site visit to calvert on november 18, 2014

Investor field trip to Calvert, US

Michael Wallis

President, Coil Americas

November 18, 2014

Disclaimer

This presentation contains, or may be deemed to contain, statements that are not historical facts

but forward-looking statements. Such forward-looking statements are based on the current plans,

estimates and expectations of Outokumpu’s management based on information available to it on

the date of this presentation. By their nature, forward-looking statements involve risks and

uncertainties, because they relate to events and depend on circumstances that may or may not

occur in the future. Future results of Outokumpu may vary from the results expressed in, or implied

by, the forward-looking statements, possibly to a material degree. Factors that could cause such

differences include, but are not limited to, the risks described in the "Risk factors" section of

Outokumpu’s latest Annual Report and the risks detailed in Outokumpu’s most recent financial

results announcement. Outokumpu undertakes no obligation to update this presentation after the

date hereof.

November 18, 2014 2

Contents

1. Outokumpu in brief

2. Coil Americas overview and markets

3. Coil Americas ramp-up

4. Summary

Appendix

3 November 18, 2014

Outokumpu – A global leader in stainless

steel Outokumpu profile Outokumpu global footprint

Key facts & figures (EURm) Sales by business area (2013) 2)

2013 9M/14

Sales 6,745 5,170

EBITDA -165 59

Total assets 8,823 6,785

Personnel 12,561 12,385

1) Market shares 2013 are calculated based on cold rolled deliveries. Source: Eurofer April 2014, AISI March

2014, CRU February 2013

2) External sales

3) Graph shows direct sales only = ~55% of Outokumpu’s total sales in 2013

USA

Cost efficient integrated

mill (Calvert). High

performance stainless

plate, bar and pipe

production units.

Mexico

Cold rolling mill in San

Luis Potosí, Mexico.

Focus on ferritics and

tailored solutions.

Sweden

Stainless production

units, plate products,

and R&D center.

Finland

Modern fully integrated chrome

mine, ferrochrome works and

stainless steel production unit

and R&D center. Group HQ.

China

Cold rolling and

service centers.

Germany

High quality stainless

steel production and

R&D units.

UK

Integrated stainless

production site,

specializing in long

products.

4% 5% 6%

14% 64%

7% 7%

29%

21% 5%

17%

21%

Other operations

Long Products

Quarto Plate

APAC

Coil Americas

Coil EMEA

• Creates advanced materials that are

efficient, long lasting and recyclable –

helping to build a world that lasts forever

• Strong market position: Market share of

35% in Europe, 20% in NAFTA and 1% in

Asia1)

• Employs about 12,400 professionals in

more than 40 countries, with headquarters

in Espoo, Finland

• Shares listed in the NASDAQ OMX Helsinki

4

Other

Heavy industries

Metal processing

Architecture & Building

Automotive

Consumer goods

~55% of sales is direct sales to end-customers 3)

November 18, 2014

5

Q3 2014 in brief

• Deterioration of market environment impacting Q4 outlook

• Imports into Europe further increased to 33% in Q3

• Nickel price down by ~17% since the end of Q2 4)

• Weaker economic outlook in Europe and China

• EBIT excl. NRI positive for the first time since merger

• Positive EUR 23 million operative cash flow as a result of

focused net working capital management

• Net debt stable

• Achieved price increases avg. EUR 10–20/tonne in Q3

• 9 months year-on-year improvement of EUR 209 million in

underlying EBIT due to savings and progress in ramp-ups,

particularly in Calvert

• Target for total savings raised by EUR 80 million to EUR

550 million by end-2017

1) EBITDA excluding non-recurring items, other than impairments; raw material-related inventory gains/losses

and as of I/14 metal derivative gains/losses, unaudited.

2) Q4/13 includes positive effect of EUR 20 million EEG refund

3) Source: CRU September 2014, price for 2mm sheet cold rolled 304 grade

4) Nickel cash LME daily official settlement of USD 15,575/t as of November 3, 2014

3

-3-48-89

-133-125-85

-432

EBIT excl. NRI (EUR million) 1, 2)

III/

13

IV/1

3

20

13

Net debt and gearing

Transaction prices 304 stainless (USD/t) 3)

I/1

4

I/1

3

II/1

3

2,068

II/14

2,068

I/14

1,733

2013

3,556

2012

3,431

III/14

92%

188% 116%

EUR million

II/1

4

76%

III/

14

96%

2,000

3,000

4,000

5,000

2011 2012 2013 2014

Europe USA China

Underl.

EBIT -28 -6 -45 -377 -90 -118 -87 -82

November 18, 2014

EBITDA development per business area

Coil EMEA Coil Americas

APAC

6659

43

3

3232

85

II I IV III II I III

110 1

-19

-35

-50

-70

-38

-12


16

2

-3-3

02

10


4

-2-3

43

4

2


EBITDA excl. NRI (EUR million)

• Clear YTD improvement vs

2013 despite lower volumes

driven by synergies and cost

reduction programs

• Volume outlook for Q4 muted

due to lower nickel price and

destocking



-193 • Ramp-up of the Calvert mill

progressing

• Q3 negatively impacted by

maintenance and repair in

Calvert cold rolling lines

affecting volumes and costs

• EBITDA break-even target for

the full year 2014 intact

• Demand and

prices in APAC

fluctuating

• Volumes

relatively stable

• Q3 impacted by

high raw

material costs

earlier in the

year

9 • Good business

conditions and

performance in the

US

• Q3 profitability down

due to lower

volumes vs.

exceptionally strong

Q2

6

Quarto Plate Long Products

-5

2

-2-2-3

9

-1

I II IV III II I III


• Ramp-up of the

Degerfors mill

ongoing

• Q3 volumes stable

vs. Q2


1 -3

2013 2014 2013 2014 2013 2014

2013 2014 2013 2014

November 18, 2014

Key building blocks for Outokumpu turnaround

Quarto Plate and Long Products

Committed to EUR 300 million cash release from NWC by the end of 2014. New target of EUR

400 million by the end of 2015 bringing closer to best industry peers

Capital expenditure <EUR 160 million in 2014. Well invested asset base allowing moderate

CAPEX levels in the coming years

Cash flow

Good progress in ramp-up despite production issues in cold rolling mill

Delivery and EBITDA break even target confirmed (2013: EUR -193 million), indicating

significant y-o-y improvement. Full capacity and potential in place by the end of 2016

Coil Americas

Profitability improvement driven by improved mix and benefits from restructuring and cost

saving programs

Next milestones are Bochum closure in 2015 and investments in Krefeld cold rolling (NIFO1)).

EMEA restructuring

QP: Ramp-up of the Degerfors investment is a high priority. With cost reduction and

efficiency improvement to deliver step change in profitability

LP: Cost efficiency optimization and growth through enhanced specialty focus

Savings programs

7

Savings are well on track: Cumulative savings of EUR 340 million compared to 2012.

Higher ambition level: Overall target of EUR 550 million in 2017

1) NIFO: Nirosta Ferritic Optimization

November 18, 2014

Contents




4. Summary

Appendix

8 November 18, 2014

Coil Americas – Strong market presence

Calvert Capacity

Mexinox Capacity

Outokumpu’s Americas Set Up

2,400

240

320

BRA 450

Rest of

SAM 190

Melting

Hot Rolling

Cold Rolling

900

350 250

870

Calvert Mexinox

Fully integrated, state of the

art, cost competitive

production facility in Calvert,

Alabama which is in the final

stage of ramp up

Specialized cold rolling mill in

San Luis Potosi, Mexico

Established market presence

with long term customer

relationships and market

share of ~approx 20% in the

NAFTA region 2)

Established sales team

Products have a good name in

the market regardless of

source

Outokumpu offers widest

product range

The only 72 inch wide

manufacturer in NAFTA

Outokumpu‘s strengths in the Americas

Total stainless 2014, in thousand tonnes

350

11 12 13 14 15 16

250

11 12 13 14 15 16

Chicago Sales office

Running at full capacity

Commercial ramp up to full

production by end of 2016

Service Center: Buenos Aires, Argentina

Sales office: in Sao Paulo, Brazil

1501)

9 Source: SMR Real Demand September 2014, Total stainless= rolled & forged

1) Sold to free market

2) Market shares 2013 are calculated based on cold rolled deliveries

November 18, 2014

Progress in Calvert ramp-up and

Coil Americas turnaround

Stainless Americas EBITDA excl. NRI 1) Comments

-50

-70

-38

-12

1

-19

-35

III/13 II/13 I/13 II/14 III/14 I/14 IV/13

EURm

Coil Americas expected to reach

break-even EBITDA in 2014

1) Non-recurring items 10

• Opportunities:

• Increasing market demand and healthy

pricing

• Continuing volume ramp-up

• Broadening portfolio and improving

quality

• Very good performance in Mexinox

• Challenges:

• Recent technical issues in cold rolling and

maintenance and repair work

• Ongoing efforts to optimize raw material

mix and scrap ratios in Calvert

• Overall process stability

November 18, 2014

1.3 1.6

1.3

1.1

0.8

1.0

1.3 1.5

1.6 1.6 1.7 1.8 1.8 1.8

0.1

0.2

0.1

0.2

0.1

0.2

0.2

0.3

0.3 0.3

0.3 0.3 0.3 0.3

0.2

0.2

0.1

0.1

0.1

0.1

0.1

0.2

0.2 0.2

0.2 0.2 0.2 0.2

0.2

0.2

0.2

0.2

0.2

0.3

0.3

0.3

0.3 0.3

0.3 0.3 0.3 0.3

0.1

0.1

0.1

0.1

0.1

0.1

0.2

0.2

0.2 0.2

0.2 0.2

0.2 0.2

1.9

2.2

1.9

1.7

1.3

1.7

2.1

2.3

2.5 2.5

2.6 2.7 2.8

2.8

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014f 2015f 2016f 2017f 2018f

United States Mexico Canada Brazil Others

11

Healthy market demand in Americas

Source: SMR September 2014, CRU August 2014

Demand in Americas [cold rolled]

Americas:

+5.3%

NAFTA:

+5.6%

2014

Mio.t

November 18, 2014

12

Long-term market share target of 25-30%

0%

5%

10%

15%

20%

25%

30%

500

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

2006 2007 2008 2009 2010 2011 2012 2013f 2014f 2015f 2016f 2017f

CR consumption in NAFTA CR capacity in NAFTA Outokumpu CR market share

20%

Source: AISI September 2014, SMR September 2014, Outokumpu

NAFTA cold rolled market size (in kt) and Outokumpu market share

22%

Q3/14

THIRD PARTY

+100

OTK

+100

OTK

+250

November 18, 2014

13

Source: CRU November 2014

1) 2mm sheet cold rolled 304 grade

Development of US stainless steel prices

Transaction prices 304 stainless steel 1) Base prices 304 stainless steel 1)

2,500

3,000

3,500

4,000

4,500

5,000

Jan

2011

Jan

2012

Jan

2013

Jan

2014

2,000

7,000

12,000

17,000

22,000

27,000

32,000

Nickel price

US transaction price

1,250

1,300

1,350

1,400

1,450

1,500

Jan

2011

Jan

2012

Jan

2013

Jan

2014

US base price[$/t] [$/t] [$/t]

November 18, 2014

14

Coil Americas market approach

Automotive;

28%

Household/

Commercial

Appliances;

35%

Pipe & Tube;

10%

Sinks &

Hoods; 6%

Others; 21%

Our channel structure in the Americas

End users &

processors 37%

Distributors

63%

Sales by end-use customer segments (2013)

November 18, 2014

15

Distributors

Tubes, Pipes & Metal

Processing

End-Use Industry Groups Route to End-Use

Market sizes: Americas market, fat products 2014, Growth rates: CAGR 2014-2017

Others: Elevators, HVAC, Renewable Energy, Water Treatment, etc.

Source: SMR September 2014

Automotive Household /

Commercial Appliances Catering Food & Drinks

Heavy Transport Others Sinks & Hoods

Market size: 609 kt Growth rate: 4%






Coil Americas focus industry groups

November 18, 2014

Contents




4. Summary

Appendix

16 November 18, 2014

Calvert mill

River Terminal

Slab Yard

Carbon Hot Strip Mill

Connection Bay Hot Annealing Line

Cold Rolling Mills

Stainless Melt Shop

Cold Annealing Line

Finishing


• Raw materials

o Scrap ratio of 80-85%, above industry average

o Annual austenitic scrap usage of approximately 400,000 t

o Scrap supply quality is good

o Proximity to many scrap collection yards in the US

o Global procurement/sourcing

o In-house ferrochrome supply

• Energy

o Long-term contract with Alabama Power, Outokumpu is #1

customer

o Long-term contract with Sempra Gas, one of the largest

suppliers in the South

• Offshore drilling in the Gulf of Mexico offer ample

resources

• Labor

o Highly competetive labor costs

o Workforce versatility supported by experts from other

Outokumpu units during ramp-up

Highly cost competitive operations


19

2011 2012 2013 2014 2015 2016

Calvert technical ramp-up

• Stabilize production

• Complete product offering

• Improve efficiencies

2014:

EBITDA

break-even

Ramp-up phases and financial ambition

BA Americas

Financial ambition level

A

Calvert commercial ramp-up

• Ramp-up to full production capacity

• Maximize synergies of Mexinox & Calvert

• Focus on market penetration and margin

improvement

B

November 18, 2014

0

10000

20000

30000

40000

50000

60000

70000

Q1 Q2 Q3 Q4 Q1 Q2 Q3

2013 2014

Melt shop ramp-up proceeding

20

Tonnes per month

A

November 18, 2014

Temporary impacted by repair

work in cold rolling lines and

active inventory management

21

Calvert is successfully expanding portfolio

at high pace

A

TK OTK OTK OTK

2012 Jan-13 Jan-14 Aug-14

Grades Finishing 36" 48" 60" 72" 36" 48" 60" 72" 36" 48" 60" 72" 36" 48" 60" 72"

201 2B/2D

CMP

POL

201 LN 2B/2D

CMP

POL

301 2B/2D

(6 & 6.6% Min Ni) CMP

POL

304 / 304L / 304HS 2B/2D

CMP

POL

316L / 316L HS 2B/2D

CMP

POL

321 2B/2D

CMP

POL

409 2B/2D

430 2B/2D

POL

439 / 439M 2B/2D

POL

Fully qualified Under development No current development ongoing November 18, 2014

Combined Mexinox and Calvert offering to

meet customer requirements

42

248 128

96

300 Sheet

Stainless steel grades

300 Coil 409 430

Pro

du

cti

on

ca

pa

bilit

ies

OTK - MXX

300 Sheet

Stainless steel grades

300 Coil 409 430

Pro

du

cti

on

ca

pa

bilit

ies

Hot-rolled

black strip

Hot-rolled

black strip

Slabs Slabs

Extra-wide

72"

Extra-wide

72"

OTK - USA

Cold-rolled

strip (BA)

Cold-rolled

strip (BA)

Hot-rolled

white strip

Hot-rolled

white strip

Cold-rolled

strip (2B)

Cold-rolled

strip (2B)

2010 NAFTA production portfolio (Mexinox) 2014 NAFTA production portfolio (Mexinox + Calvert)

22

A

November 18, 2014

Work share model of Mexinox and Calvert

Regional

Main focus on the US (~70%)

Product specialization

• Austenitics

• 72” wide

• Polished

• Continuous mill plate

Mexinox

Regional

Main focus on Mexico (~50%)

- cross regional supply when:

a) lack of capabilities of local mill

b) production cost advantages

Product specialization

• Automotive ferritics

• Medium & light gauges

• Bright Annealed/Rolled-On/

Polished

• Blanks & Circles

Calvert

Synergies through optimized work share Regional < > Product

23

A

November 18, 2014

Calvert ramp-up improves profitability through

higher volumes and capacity utilization

0

50,000

100,000

150,000

Q1

20

11

Q2

20

11

Q3

20

11

Q4

20

11

Q1

20

12

Q2

20

12

Q3

20

12

Q4

20

12

Q1

20

13

Q2

20

13

Q3

20

13

Q4

20

13

Q1

20

14

Q2

20

14

Q3

20

14

20

15

Hot band / rolled Cold Rolled

Tonnes

Calvert delivery volumes 2011 - 2014

Calvert capacities (annual):

• Melt shop 900 kt

• Hot rolling 870 kt

• Cold rolling 350 kt

24

B

• Repair work in 54-inch cold

rolling line ongoing, back in

operations in Dec.

• Maintenance and repair

measures in two other cold

rolling lines concluded

Approx. 20kt lost in Q3

• Delivery target of 530 kt for

Coil Americas in 2014 intact

Status update

Yield

+ Delivery performance

+ Reworking ratio

= Cold rolled production and deliveries

November 18, 2014

Targeting 25-30% market share in NAFTA

25

Leveraging existing customer base to grow

market share while developing new channels

• Complete cold and hot rolled

offering

• Replacement of own and other

imports

• Service centers able to enter new

customers with wider Outokumpu

offering

• Leverage high market share position

with home appliance sector

• ‘Made in America’ supports

requirements of potential new

customers

• Investigate opportunities in

automotive sector

• Pipe & tube industries in NAFTA

• South American markets

• 61”–72” offering

B

New customers Existing customers

November 18, 2014

Contents




4. Summary

Appendix


27

Coil Americas well positioned for continued

growth

•Global R&D

•Established local presence and technical expertise

•Global footprint & resources

•Aim to be partner of choice in NAFTA region

•Established customer base, experienced sales team

•Replacement of own and other imports

Strong #2 local producer in the US market

•Most advanced production site worldwide

•Efficient logistics, low energy costs, good availability of scrap and other raw materials

•Increase to full production yields higher utilization rate

Integrated, low-cost production across NAFTA

•Full product range with unique 72” wide capabilities

•Wider offering allows service centers to enter new segments

•Melted in America

Broadest portfolio that supports and develops

local demand

Leveraging Outokumpu’s leading technical

expertise

November 18, 2014

28

Coil Americas priorities

• Commercial ramp-up: Focused

market penetration

• Maximize synergies between

Mexinox and Calvert

• Targeting EBITDA breakeven for the

full year 2014

• Attractive long-term EBIT and

return-on-asset potential

• Stabilize production

• Complete product offering

• Maximize utilization rates

Execution of the technical ramp up Maximize profitability

November 18, 2014

Appendix


• 1976 Mexinox established

• 2007 Calvert greenfield project (USD 1.5 bn investment)

• 2010 First coil produced at Calvert mill

• 2011 First 74” coil produced at Calvert mill

• 2012 First melt at Calvert mill

• Dec. 2012: Inoxum transaction: two leaders each with over 100 year legacy come

together to form the new Outokumpu

• Over 2,500 employees form the Americas team

• 2014 Record months in sales and production

Outokumpu Americas milestones


Outokumpu Mexinox

• Cold rolling capacity of 250,000 tonnes annually

• Founded in 1976: 37 years of cumulative know-how in stainless steel

• Excellent reputation – highly respected both in the US and in Mexico

• Focus on ferritic, tailored material solutions

• Close collaboration with end-customers

• Strong market share in the Mexican market

• Largest importer into the US


32

Outokumpu Mexinox

November 18, 2014

Calvert - fully integrated and state of the art

mill

Latest production technology and

equipment

• Full product range

• High quality

• High efficiency

Unique 72 inch coil capability

Efficient logistics

Low energy costs

Good availability of scrap and other

raw materials

Workforce versatility

Hot rolling shared service with

AM/NS, 25 year contract

Calvert mill strengths


site visit to calvert on november 18, 2014

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