Outokumpu Navigated Successfully Through Pandemic in 2020
Outokumpu President & CEO Mr Heikki Malinen said “Throughout 2020 Outokumpu has continued with rigorous measures to mitigate the negative
Outokumpu President & CEO Mr Heikki Malinen said “Throughout 2020 Outokumpu has continued with rigorous measures to mitigate the negative impacts of the ongoing COVID-19 pandemic on our employees, operations, and business. Our actions have been effective, and we concluded the year without any pandemic-related production losses. While we were able to return our financial performance in the year shaped by COVID-19 back to near 2019 levels, the financial performance needs further strengthening. Hence, we will continue to execute the announced strategic measures to improve our results.”
In 2020, Outokumpu’s sales decreased to EUR 5,639 million (EUR 6,403 million) and adjusted EBITDA to EUR 250 million (EUR 263 million). Stainless steel deliveries declined by 3% compared to the previous year as a result of weaker demand. Prices were significantly lower in Europe but declined also in Americas. Various cost-saving measures supported profitability and both input costs as well as fixed costs were at a lower level compared to the previous year. Raw material-related inventory and metal derivative losses amounted to EUR 16 million in 2020 compared to the losses of EUR 64 million in 2019. Other operations and intra-group items’ adjusted EBITDA amounted to EUR -29 million (EUR -15 million). In 2020, Outokumpu recognized EUR 59 million restructuring costs related to personnel measures, reported as adjustments to EBITDA. Most of these costs are provisions where the cash impact will take place mainly in 2021. The adjustments to EBITDA in 2019 included restructuring provisions of EUR 53 million and a gain on a real estate sale of EUR 70 million.
Outlook for Q1 2021 - The stainless steel market has begun to recover after the global downturn caused by the COVID-19 pandemic. The demand for stainless steel is strengthening and both business areas Europe and Americas are expected to see a seasonal increase in volumes. Consequently, Outokumpu expects its stainless steel deliveries for the whole Group to increase in the first quarter by 10-20% compared to the fourth quarter. Adjusted EBITDA for the first quarter of 2021 is expected to be higher compared to the fourth quarter of 2020.