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ER - Outokumpu half-year report January-June 2025 - Adjusted EBITDA increased to EUR 75 million from the first quarter, balance sheet strengthened

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 Outokumpu half-year report January-June 2025 - Adjusted EBITDA increased to EUR 75 million from the first quarter, balance sheet strengthened

# Outokumpu half-year report January-June 2025 - Adjusted EBITDA increased to EUR 75 million from the first quarter, balance sheet strengthened

Outokumpu Corporation
Half-year report
July 31, 2025 at 9.00 am EEST

Outokumpu half-year report January-June 2025 - Adjusted EBITDA increased to EUR
75 million from the first quarter, balance sheet strengthened

Highlights in Q2 2025

  · Stainless steel deliveries were 483,000 tonnes (468,000 tonnes)\*.
  · Adjusted EBITDA was EUR 75 million (EUR 56 million).
  · EBITDA was EUR 39 million (EUR 56 million), impacted by items affecting
comparability of EUR -35 million (EUR 0 million).
  · Earnings per share was EUR -0.04 (EUR -0.01).
  · Free cash flow was EUR 21 million (EUR 35 million).
  · ROCE was -1.4% (-8.7%).
  · Net debt was EUR 169 million (March 31, 2025: EUR 252 million).
  · The first installment of dividend approved in Annual General Meeting for
year 2024, of EUR 0.13 was paid during Q2 2025.

\*Figures in parentheses refer to the corresponding period for 2024, unless
otherwise stated.

Highlights in Q1-Q2 2025

  · Stainless steel deliveries were 953,000 tonnes (912,000 tonnes)\*.
  · Adjusted EBITDA was EUR 124 million (EUR 94 million).
  · EBITDA was EUR 86 million (EUR 93 million)
  · Earnings per share was EUR -0.09 (EUR -0.07).
  · Free cash flow was EUR -41 million (EUR 9 million).

Strategy highlights

  · In June 2025, Outokumpu announced EVOLVE, its new strategy, to drive growth
and shareholder value for 2026-2030 by classifying businesses for investment
allocation as either foundational or transformative.
  · Value is created by driving cost competitiveness and cash generation in
sustainable stainless steel, growing profitably in advanced materials and
alloys, and revolutionizing value creation through innovative materials and
technologies.
  · As foundational initiative, Outokumpu plans to invest approximately EUR 200
million in a new annealing and pickling line in Tornio, Finland. At the same
time, it intends to close two less competitive lines in Krefeld, Germany. Once
the new line is operational, this set-up would generate annual EBITDA
improvements in a magnitude of EUR 70 million through the cycle.
  · As transformative initiative, Outokumpu has started a feasibility study to
assess a potential investment in its melt shop in Avesta, Sweden to enable
further expansion into high-nickel alloys.
  · As transformative initiative, Outokumpu is capitalizing on proprietary
technology to produce low-CO2 metals and its own Kemi chrome mine offers the
ideal launchpad. The company aims to establish a platform for premium products,
first focusing on chromium materials, including enriched ferrochrome and high
-purity chromium metal.
  · During the second quarter, Outokumpu improved its EBITDA run-rate by EUR 15
million, which translates into a cumulative improvement of EUR 328 million since
the start of the second phase of the strategy.
  · EBITDA run-rate improvements in the second quarter were mainly driven by
business area Americas, through continued optimization of its route to market
and further yield improvements. In business area Europe, additional actions were
taken to support more efficient scrap utilization.

 Key figures

\[\]\[\]
EUR million, or as           Q2/25  Q2/24  Q1/25  Q1-Q2/25  Q1-Q2/24   2024
indicated
Sales                        1,486  1,540  1,524     3,010     3,019  5,942
EBITDA                          39     56     47        86        93    162
Adjusted EBITDA \[1)\]            75     56     49       124        94    177
Operating profit (EBIT)        -21      1     -7       -28       -18    -51
Adjusted EBIT \[1)\]              21      1     -5        17       -16    -43
Result before taxes            -28     -7    -23       -51       -36    -89
Net result for the period      -19     -5    -18       -37       -28    -40
Earnings per share, EUR      -0.04  -0.01  -0.04     -0.09     -0.07  -0.09
Return on capital employed,   -1.4   -8.7   -0.8      -1.4      -8.7   -1.2
rolling 12 months (ROCE), %
Capital expenditure             35     37     52        86        96    216
Free cash flow                  21     35    -62       -41         9    -71
Net debt                       169     97    252       169        97    189
Stainless steel deliveries,    483    468    470       953       912  1,793
1000 tonnes

\[1) \]Adjusted EBITDA or EBIT = EBITDA or EBIT - Items affecting comparability.

President & CEO Kati ter Horst

As I write these comments, the EU and the U.S have just reached a trade
agreement. This at least takes away some of the uncertainty and hopefully
supports a better investment climate and boosts industrial production. For now,
U.S. tariffs on European steel remain at 50%, and it is unclear how these
discussions might continue.

In Europe, the stainless steel industry faces persistent challenges, including
subdued demand, low-priced imports from Asia, and elevated energy costs. It is
imperative that we intensify efforts to create a level playing field for
European producers. With U.S. tariffs on imported steel currently at 50%, the
European Commission must act with urgency to implement more effective safeguard
measures against Asian imports and to ensure that the Carbon Border Adjustment
Mechanism (CBAM) is robust and enforceable from its launch in early 2026. In
parallel, we must accelerate the development of European lead markets for
sustainable stainless steel. In summary, the importance of implementing the
Steel and Metals Action Plan is growing by the day.

Access to critical minerals is a big topic in both Europe and the Americas. Our
chrome mine in Finland - the only one in the EU - gives us a unique position in
this landscape. Despite weak market sentiment, we are seeing growing demand for
our sustainable ferrochrome, driven by geopolitical shifts. We have also secured
access to other important metals, such as nickel and molybdenum, which are key
raw materials in stainless steel production.

In the second quarter, we introduced EVOLVE, our new growth-focused strategy for
the years 2026-2030. With this strategy, we are sharpening our strategy
execution and investment allocation by classifying our businesses as either
foundational or transformative. This approach clarifies the strategic role and
priorities of each business, supporting long-term value creation and total
shareholder returns.

While we continue to drive cost competitiveness and cash generation in
sustainable stainless steel, we plan to grow through transformative investments
in higher-growth, higher-margin, and less cyclical markets. We are currently
conducting a feasibility study in Avesta, Sweden to explore opportunities in
high-nickel alloys. During our Capital Markets Day in June, we also discussed
our proprietary technology development that could revolutionize metal extraction
methods.

During the second quarter, we continued to benefit from our strong market
positions in both Europe and the U.S. However, the quarter was marked by
uncertainty and heightened geopolitical tensions, leading to increased caution
among our customers and across the value chain. Still, we were able to
strengthen our balance sheet.

Our adjusted EBITDA reached EUR 75 million, while our stainless steel deliveries
increased by 3% compared to the first quarter. The result was supported by our
successful short-term cost-saving measures, which so far have delivered EUR 29
million of the targeted EUR 50 million in savings for 2025. We also made
progress with our structural EBITDA run-rate improvement program, which now
stands at a cumulative achievement of EUR 328 million compared to the target of
EUR 350 million by the end of this year.

In business area Europe, adjusted EBITDA increased to EUR 16 million, and
stainless steel deliveries were 2% higher compared to the previous quarter. The
European market remained sluggish, and stainless steel prices were under
pressure.

In business area Americas, adjusted EBITDA improved to EUR 29 million, and
stainless steel deliveries increased by 7% quarter-on-quarter due to higher
demand for domestically produced stainless steel.

In business area Ferrochrome, adjusted EBITDA was EUR 32 million. Demand for our
European low-emission ferrochrome has remained solid, and we continue to benefit
from energy optimization in Finland.

Looking ahead, it is evident that we need to accelerate the pace of change at
Outokumpu to adapt more quickly to the market environment, especially in Europe.
We have increased our short-term cost-saving measures from EUR 50 million to EUR
60 million, to be achieved by the end of 2025. In addition, we have started to
plan a new restructuring program, aiming at structural annual cost-savings of
EUR 100 million to be achieved by the end of 2027.

I am delighted that our safety performance is again back on track, with a TRIFR
of 1.2 in the second quarter. We also maintained our very high recycled material
content level of 97% and continued to make firm progress toward our SBTi climate
target.

Finally, I would like to thank our employees for their commitment and
achievements, our customers for their business and trust, our suppliers for
their cooperation, and our shareholders for their continued support.

Outlook for Q3 2025

Group stainless steel deliveries in the third quarter are expected to decrease
by 5-15% compared to the second quarter, mainly in business area Europe, due to
seasonality and market weakness. Meanwhile, pressure on realized stainless steel
prices is expected to continue in Europe during the third quarter. Asian imports
to Europe remain high compared to the low demand in the stainless steel market.

While in the U.S. we do not see signs of a demand recovery yet, the current
tariffs are supporting more favorable market conditions for local producers.

Maintenance breaks in business area Europe are expected to have an impact of up
to EUR -10 million on adjusted EBITDA in the third quarter compared to the
second quarter.

With the current raw material prices, some raw material-related inventory and
metal derivative losses are forecasted to be realized in the third quarter.

Guidance for Q3 2025:

Adjusted EBITDA in the third quarter of 2025 is expected to be lower compared to
the second quarter.

Results

Q2 2025 compared to Q2 2024

Adjusted EBITDA in the second quarter of 2025 was EUR 75 million (EUR 56
million). Total stainless steel deliveries were 3% higher compared to the
previous year as deliveries increased moderately in both business area Europe
and business area Americas, while realized prices for stainless steel were
notably lower. This resulted in sales of EUR 1,486 million (EUR 1,540 million).

Profitability was supported by notably lower raw material costs and EUR 18
million of short-term cost-saving measures, partly offset by higher fixed costs,
mainly driven by lower fixed cost absorption in business area Europe. In
addition, the improved performance of business area Ferrochrome was one of the
drivers for the improvement in Group profitability. Raw material-related
inventory and metal derivative gains were EUR 6 million (losses of EUR 8
million).

The comparison period was affected by the political strike in Finland with an
impact of approximately EUR -30 million. The strike also impacted indirectly the
company's operations in other countries through the disruption to internal
material flows in business areas Europe and Americas.

Adjusted EBITDA for other operations and intra-group items was EUR -3 million
(EUR -15 million). The Group's EBITDA was EUR 39 million (EUR 56 million),
impacted by items affecting comparability of EUR -35 million (EUR 0 million)
which were mainly related to the restructuring provision in relation to
strategy, EVOLVE. The cash flow impact in relation to the provision is
approximately EUR 29 million for years 2025-2028.

EBIT was EUR -21 million (EUR 1 million). ROCE for rolling 12 months was -1.4% (
-8.7%). The comparison period for ROCE was affected by the significant
impairment recording related to the renegotiated hot rolling contract in
business area Americas at the end of 2023. Net result was EUR -19 million (EUR
-5 million) and earnings per share was EUR -0.04 (EUR -0.01). Net financial
expenses were EUR 8 million (EUR 9 million) and interest expenses EUR 13 million
(EUR 16 million). The change in net financial expenses were mainly impacted by
interest income, foreign exchange rates, and the positive impact of convertible
bond conversions on interest expenses.

Q2 2025 compared to Q1 2025

Adjusted EBITDA in the second quarter of 2025 was EUR 75 million (Q1/2025: EUR
49 million). Total stainless steel deliveries were 3% higher compared to the
previous quarter as deliveries increased moderately in both business area Europe
and business area Americas. Realized prices for stainless steel were notably
lower in business area Europe, while increased slightly in business area
Americas. This resulted in sales of EUR 1,486 million (Q1/2025: EUR 1,524
million).

Profitability was supported by lower raw material costs in both business area
Europe and business area Americas, short-term cost saving measures of EUR 18
million (Q1/2025: EUR 11 million) and lower energy costs. Profitability was
impacted by lower result in business area Ferrochrome and increased fixed costs,
mainly driven by higher maintenance costs. The comparison period Q1 2025 was
affected by the one-week union strike in Finland with an impact of approximately
EUR -15 million. Raw material-related inventory and metal derivative gains were
EUR 6 million (Q1/2025: gains of EUR 0 million).

Adjusted EBITDA for other operations and intra-group items was EUR -3 million
(Q1/2025: EUR -11 million). The Group's EBITDA was EUR 39 million (Q1/2025: EUR
47 million), impacted by items affecting comparability of EUR -35 million
(Q1/2025: EUR -2 million), which were mainly related to restructuring provision
in relation to strategy, EVOLVE.

EBIT was EUR -21 million (Q1/2025: EUR -7 million). ROCE for the rolling 12
months was -1.4% (Q1/2025: -0.8%), as the profitability in the last 12-month
remained relatively stable. Net result was EUR -19 million (Q1/2025: EUR -18
million) and earnings per share was EUR -0.04 (Q1/2025: EUR -0.04). Net
financial expenses were EUR 8 million (Q1/2025: EUR 17 million) and interest
expenses EUR 13 million (Q1/2025: EUR 16 million). The change in net financial
expenses were mainly impacted by interest income, foreign exchange rates, and
the positive impact of convertible bond conversions on interest expenses.

Q1-Q2 2025 compared to Q1-Q2 2024

Adjusted EBITDA in January-June 2025 was EUR 124 million (EUR 94 million). Total
stainless steel deliveries were 4% higher compared to the previous year as
deliveries increased in both business area Europe and business area Americas.
Realized prices for stainless steel decreased notably in both business area
Europe and business area Americas. This resulted in sales of EUR 3,010 million
(EUR 3,019 million).

Profitability was supported by lower raw material costs, and short-term cost
saving measures of EUR 29 million during the first half of 2025. Additionally,
significantly improved performance in business area Ferrochrome had a positive
impact on the result. Raw material-related inventory and metal derivative gains
were EUR 6 million in January-June 2025 (losses of EUR 12 million).

The impact of the union strike in Finland was approximately EUR -15 million in
the first half of 2025, as local operations were down for one week in January.
In comparison, the first half of 2024 was affected by the four-week political
strike in Finland with an impact of approximately EUR -60 million. The strike
also impacted indirectly the company's operations in other countries through the
disruption to internal material flows in business areas Europe and Americas.

Adjusted EBITDA for other operations and intra-group items was EUR -14 million
(EUR -26 million). The Group's EBITDA was EUR 86 million (EUR 93 million),
impacted by items affecting comparability of EUR -37 million (EUR -2 million),
which are mainly related to the restructuring provision in relation to strategy,
EVOLVE.

EBIT was EUR -28 million (EUR -18 million). ROCE for the rolling 12 months was
-1.4% (-8.7%). ROCE in the previous year was affected by the significant
impairment booking related to the renegotiated hot rolling contract in business
area Americas at the end of 2023. Net result was EUR -37 million (EUR -28
million) and earnings per share was EUR -0.09 (EUR -0.07). Net financial
expenses were EUR 25 million (EUR 20 million) and interest expenses EUR 29
million (EUR 32 million).

 Adjusted EBITDA by segment

EUR million       Q2/25  Q2/24  Q1/25  Q1-Q2/25  Q1-Q2/24  2024
Europe               16     28      6        22        32    58
Americas             29     21     11        41        44    59
Ferrochrome          32     22     43        75        44   106
Other operations     -3    -15    -11       -14       -26   -46
and intra-group
items
Total adjusted       75     56     49       124        94   177
EBITDA

 Items affecting comparability in EBITDA

EUR million            Q2/25  Q2/24  Q1/25  Q1-Q2/25  Q1-Q2/24  2024
Europe                   -33      0     -2       -35         2    -3
Americas                  -2      —      0        -3         —    -8
Other operations           —      0      —         —        -4    -4
Total items affecting    -35      0     -2       -37        -2   -15
comparability in
EBITDA

Total EBITDA              39     56     47        86        93   162

A live webcast and conference call today, July 31, at 2.30pm EEST

A live webcast and conference call to analysts, investors and representatives of
media will be arranged today at 2.30 pm EEST at
https://outokumpu.events.inderes.com/q2-2025/register hosted by President and
CEO Kati ter Horst and CFO Marc-Simon Schaar.

To ask questions, please participate in the conference call by registering at
https://events.inderes.com/outokumpu/q2-2025/dial-in. After registration you
will receive phone number and a conference ID to access the conference call. If
you wish to ask a question, please dial \*5 on your telephone keypad to enter the
queue.

All the interim report materials, a link to the webcast and later its recording
will be available at www.outokumpu.com/en/investors.

For more information:

Investors: Ulla Paajanen, SVP, IR and Strategic Advisory, tel. +358 40 763
8767
Media: Päivi Allenius, SVP - Communications and Brand, tel. +358 40 753 7374, or
Outokumpu media desk, tel. +358 40 351 9840, e-mail media(at)outokumpu.com

Outokumpu Corporation

Outokumpu is accelerating the green transition as the global leader in
sustainable stainless steel. Our business is based on the circular economy: our
products are made from 95% recycled materials, which we then turn into fully
recyclable stainless steel. This steel is utilized in various applications
across society, including infrastructure, mobility, and household appliances. We
are committed to 1.5°C target to mitigate climate change, and with up to 75%
lower carbon footprint than the industry average, we support our customers to
reduce their emissions. Together, we are working towards a world that lasts
forever. Outokumpu Corporation employs approximately 8,700 professionals in
close to 30 countries, with headquarters in Helsinki, Finland and shares listed
in Nasdaq Helsinki. Read more: www.outokumpu.com