Outokumpu Capital Markets Day 2014 Strategy update

Mika Seitovirta

CEO

September 25, 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.

September 25, 2014

Contents

1. Stainless steel markets

2. Outokumpu turnaround

3. Raising the bar

4. Summary

Appendix

2 September 25, 2014

3

Global megatrends driving stainless steel

demand Global megatrends Area of demand

Population Growth

Urbanization

Mobility

Climatic Change /

Limited Resources

Medical Engineering Food Industry Water Demand

Architecture Interior Fittings Escalators

Solar Energy

Transport

Wind Energy Green Technology

Automotive Public Transport

September 25, 2014

4

Continued growth for stainless steel globally

Source: SMR, September 2014

Real demand for total stainless steel (rolled & forged, excl. 13Cr tubes)

APAC

Other Americas USA

AMERICAS

Other EMEA Other APAC China

EUROPE

13 12 14 16f 17f 15f

13 14 16f 15f 12 17f

GLOBAL

+8% +3%

+5% +4%

+8%

+4% +2%

+4% +3%

+6% +4%

+2%

17f 16f 15f 12 14 13

+1%

-0%

+4% +3% +2% +2%

16f 17f 15f 13 12 14

+12% +9%

+7% +6% +6% +5%

13 15f 12 16f 17f 14

+1% +1%

+5% +4% +6%

12 13 15f 14 17f 16f

+8%

+4% +5%

+4% +6%

12 13 17f 15f 16f 14

+19%

+12%

+7% +8%

+7% +5%

17f 16f 15f 14 13 12

+3% +4% +4% +4% +5%

+4%

16f 17f 15f 14 13 12

+7% +6% +5% +5% +4%

+9%

+4%

+1%

September 25, 2014

5

Supply/demand balance remains a key

Source: SMR real demand September 2014; CRU Aug 2014

Overcapacity in Asia High imports in Europe Healthy situation in Americas

7.8 8.5 9.8

11.1 12.2 13.0 13.9 14.7

5.0 5.1

5.2

5.4 5.6

5.9 6.2

6.4

12.8 13.6

15.0

16.5

17.8 18.9

20.1 21.1

14.8

16.1

18.3

20.1

22.8

24.7 26.1 26.3

20

10

20

11

20

12

20

13

20

14

f

20

15

f

20

16

f

20

17

f

Demand covered by Rest Asia

Demand covered China

CRU Capacity

1.0 1.3 1.5 1.6 1.6 1.7 1.8 1.8

0.7

0.8 0.8

0.9 0.9 0.9 1.0 1.0 1.7

2.1 2.3

2.5 2.5 2.6 2.7 2.8 3.0

3.2 3.3 3.3 3.3 3.3 3.3 3.3

20

10

20

11

20

12

20

13

20

14

f

20

15

f

20

16

f

20

17

f

Demand covered by Rest Americas

Demand covered by USA

CRU Capacity

[CR, Mio.t]

2.8 2.8 2.8 2.7 2.8 2.8 2.9 3.0

0.5 0.6 0.6 0.7 0.9 0.9 1.0 1.0

3.3 3.4 3.4 3.4 3.7 3.8 3.9 3.9

4.9 4.8 4.7 4.7 4.5 4.5 4.4 4.4

20

10

20

11

20

12

20

13

20

14

f

20

15

f

20

16

f

20

17

f

Demand covered by Imports

Demand covered by EU Mills

CRU Capacity

[CR, Mio.t] [CR, Mio.t]

September 25, 2014

Base prices recovered recently, but still low

at historical standards Transaction prices 304 stainless steel (USD) 1) Base prices 304 stainless steel (EUR) 1)

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Jan

2011

Jan

2012

Jan

2013

Jan

2014

Europe

USA

China

- 14 % - 18 % - 18 % - 20 % - 21 % - 21 %- 14 %

2014* 2013 2012 2011 2010 2009 2008

Price difference China vs. Europe:

Source: CRU September 2014

*Jan-Sept 2014

1) 2mm sheet cold rolled 304 grade

1,000

1,050

1,100

1,150

1,200

1,250

1,300

Jan

2011

Jan

2012

Jan

2013

Jan

2014

Germany

6

Transaction prices never really recovered from the global financial crisis. The gap between Chinese and European transaction prices is growing ever since. In July 2013, European base prices seem to have reached the bottom. Although having recovered recently, still remaining on a low level.

September 25, 2014

7

Unbalanced trade flows High pressure to export Asian overcapacities to other regions

Source: Foreign trade statistics September 2014

[CR in kt] [2013]

Factors supporting exports:

Exchange rate benefits

Cost advantages

Government subsidies

Different regulations

160

530

150

110

115

40

Global trade flows are starting to stabilize but the problem of Asian overcapacity persists. Increasing pressure to export Asian overcapacities to other regions like Europe and NAFTA.

EU antidumping case

Nickel ore ban ?

Game changers:

September 25, 2014

Contents

1. Stainless steel markets

2. Outokumpu turnaround

3. Raising the bar

4. Summary

Appendix

8 September 25, 2014

Outokumpu – A global leader in stainless

steel Outokumpu profile Outokumpu global footprint

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

2013 H1/14

Sales 6,745 3,371

EBITDA -165 -8

Total assets 8,823 6,642

Personnel 12,561 12,365

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 12,500 professionals in

more than 40 countries, with headquarters

in Espoo, Finland

• Shares listed in the NASDAQ OMX Helsinki

9

Other

Heavy industries

Metal processing

Architecture & Building

Automotive

Consumer goods

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

September 25, 2014

10

Delivering against our plans in the past 20 months

Synergies and efficiency programs – proceeding ahead of plans 1

Calvert ramp-up – progressing towards completion in 2016 3

Remedy solved & extensive financial arrangements

resulting in significantly stronger balance sheet 4

Working capital management and capex – new standards set 5

New leadership and BA structure with stronger commercial focus 6

EMEA restructuring – Krefeld melt shop closed, Bochum ramp down 2

September 25, 2014

11

New organization and leadership

o Long Products – Kari Tuutti

o Quarto Plate – Kari Parvento

New business area structure with new leaders

o Coil EMEA – Olli-Matti Saksi

o Coil Americas – Mick Wallis

o APAC – Austin Lu

Ambition to outperform competition and create long-term

shareholder value.

Focus on commercial strength and operational excellence,

while continuing to improve profitability and cash flows.

September 25, 2014

September 25, 2014 12

Long Products Overview

Rolling & finishing

Melting & casting

Degerfors

Sheffield

Wildwood

Richburg

• Sales: EUR 352 million

• EBIT excl. NRI: EUR 14 million

• Operating capital: EUR 153 million

• Employees: 654

• Blooms, billets, ingots and slabs

• Bar and rebar

• Wire rod

• Welded pipe

in all standard & specialty

stainless steel grades

Americas

EMEA

End users & processors

Distributors • Metal processing 67%

• Chemical & energy 13%

• Automotive 6%

• Food and catering 3%

• Architecture, Building and

Construction 2%

• Other 9%

69%

31% Capacities p.a.

• Degerfors/billets, heavy bar 40kt

• SMACC/slabs, blooms,

billets, ingots 450kt

• Sheffield/wire rod 25kt

• Richburg/bars, heavy bars 40kt

• Wildwood/pipes 20kt

• Acerinox

• Schmolz & Bickenbach

• Valbruna

• Cogne

• Carpenter

• Tsingchang

Deliveries by end-customer segment 1)

Products Key competitors

Key facts H1/2014

Leverage US presence

Optimize cost efficiency

Enhanced specialty focus

Strategic priorities:

1) Deliveries Jan-Aug 2014, management estimates

September 25, 2014 13

Quarto Plate Overview

Plate & service center

Added value services (Prefab & PressPlate)

Degerfors Sheffield

• Sales: EUR 216 million

• EBIT excl. NRI: EUR -12 million

• Operating capital: EUR 253 million

• Employees: 857

• Tailor made heavy plate

• Added value services: cutting,

bending, edge preparation from

mill and local service centers

• Standard heavy plate

• Added value products (Prefab &

PressPlate)

The widest range of heavy plate

solutions with respect to product,

dimension and service.

Americas

EMEA

Capacities p.a.

• Degerfors 1) /quarto plate 150 kt

• New Castle/quarto plate 60 kt

• Acerinox

• Acroni

• Allegheny Ludlum /ATI

• Baosteel

• DKC

• Industeel

• Jindal

• Nippon Yakin

• NSSC

• TISCO

External deliveries by industry group

Products Key competitors

Key facts H1/2014 Leverage position in standard plate

following the Degerfors investment

Expand in custom made

Develop route to market

Strategic priorities:

New Castle

Mill

Kunshan

APAC

Jyväskylä

Avesta

Aalten

Gingen

Castelleone

2% 10%

11%

29% 19%

10%

19% Architecture, Building & Construction

Chemical and energy

Chemical Tankers

Distribution

Fabricators

Heavy Industry

Pipes

1) After the ramp-up

EBITDA improving in all business areas

Coil EMEA Coil Americas

APAC

6659

43

3

3232

II I IV III II I

110 1

-19

-35

-50

-70

-38

II I I IV III II

16

2

-3-3

02

II I I IV III II

4

-2-3

43

4

IV III II I II I

EBITDA excl. NRI (EUR million)

• Clear improvement over 2013

despite lower volumes driven

by synergies and cost

reduction programs

EBITDA excl. NRI (EUR million)

EBITDA excl. NRI (EUR million)

-193 • Technical and commercial

ramp-up of the Calvert mill

ongoing

• Improving towards EBITDA

break-even for the full year

2014

• Demand and

prices in APAC

fluctuating

• Profitability

dependent

on volumes

9 • Improved capacity

utilization in SMACC

• Good business

conditions and

performance in the

US

14

Quarto Plate Long Products

-5

2

-2-2-3

9

I II IV III II I

EBITDA excl. NRI (EUR million)

• Ramp-up of

Degerfors mill

ongoing

• Profitability

dependent

on volumes

EBITDA excl. NRI (EUR million)

1 -3

2013 2014 2013 2014 2013 2014

2013 2014 2013 2014

September 25, 2014

Contents

1. Stainless steel markets

2. Outokumpu turnaround

3. Raising the bar

4. Summary

Appendix

15 September 25, 2014

Commercial strength

Right assets

in the right places

Competitive cost structure

Operational excellence

16

Raising the bar

Industry

leading

foundation

Unlock the potential

Close the gap to competitors

Differentiate

A

September 25, 2014

B

C

D

17

We have right assets in the right places

in EMEA we…

have formed the leading production network through merger and restructuring

are situated in the most attractive market regions (Germany & Nordics)

have globally leading cost position with our plant in Tornio

have the globally leading specialty melt shop in Avesta

are investing in the upgrade of our cold rolling system in Germany

in NAFTA we…

are in the final phase of ramping up the leading state-of-art greenfield plant in

Calvert with competitive conversion costs in NAFTA

have Mexinox as the leading mill in high-end value added applications

in

Quarto Plate we…

have a globally leading position in terms of product capabilities and capacities

have invested in state-of-art technology in our plants in Degerfors and New

Castle

No 1

No 2

No 2

A

September 25, 2014

18

Efficiency programs continue with higher

ambition

Cost

Cash

P150

P300

=>

=>

=

=

P250

P400

B

Further potential in

cost streamlining

P250 launched until

end of 2015

Target to release

EUR 300 million

of cash from NWC

remains intact

Additional EUR

100 million by the

end of 2015

September 25, 2014

19

Significant potential in yield improvement

Yield: ~90%

Yield

loss -10%

Yield

loss -1%

Yield

loss -20% + Rework

RM purchase Melting Hot rolling Cold rolling

Yield: ~99% Yield: ~80%

Scrap

Cold rolled

products

Black

strip Slab

Industry average:

In producing 1 Mt of stainless steel,

a yield improvement of one percentage point

brings up to EUR 10 million cost advantage.

x 70-80% total yield

excl. rework

C

= x

Yield losses along the production chain

Source: Outokumpu analysis September 25, 2014

Customer satisfaction drivers

Product quality

Delivery reliability Commercial terms

Other

Technical expertise

Easy to deal with

D

20 September 25, 2014

21

Customer segmentation

Spot Business Project & Contract Business Contract Business Contract Business

Global Market: Adj. SMR STS Flat + LP End-use global demand Y2013

CAGR (‘13-’17): Adj. SMR STS Flat + LP End-Use global CAGR (05-2014)

OTK Volume: share of 2013 stainless steel deliveries

Global

Market

CAGR

(‘13-’17)

OTK Vol. ~60% of

deliveries

17,460 kt

5.9 %

Route-to-Market

Global

Market

CAGR

(‘13-’17)

OTK Vol.

~14% of

deliveries

7,180 kt

6.2 %

Chemical &

Energy

Architecture

& Building

Heavy

Industry

Heating &

Cooling

Industrial Applications

Global

Market

CAGR

(‘13-’17)

OTK Vol. ~13% of

deliveries

1,990 kt

5.6 %

Transport

Global

Market

CAGR

(‘13-’17)

OTK Vol. ~13% of

deliveries

8,290 kt

5.6 %

Consumer Goods

Distributors Tubes

& Pipes

Fabricators Service

Centers

Automotive Shipbuilding

Light

Transport

Heavy

Transport

Kitchenware Catering

White Goods Food &

Beverage

D

September 25, 2014

22

267

273

939

232

Japan

CR consumption 2013

1,122

India 1,961

China 11,081

APAC 16,581

Brazil

Mexico

USA 1,597

Americas 2,455

MEE, Africa, CIS

Nordic EU

Germany 1,003

Europe 3,436

EMEA 4,150

Building on our strong home market positions

3.4%

3.8%

5.0%

3.8%

3.6%

3.6%

3.6%

3.7%

CAGR 2013-17 Number of CR producers

6.1%

6.9%

7.5%

0.7%

(> 50)

(> 10)

(> 100)

(10)

2.9%

SMR September 2014

update: September 18,2014

EMEA= Europe (EU30) +MEE, Africa, CIS

Market position

Outokumpu

D

September 25, 2014

Contents

1. Stainless steel markets

2. Outokumpu turnaround

3. Raising the bar

4. Summary

Appendix

23 September 25, 2014

Levers to improve profitability and cash flow

Savings programs

Americas ramp-up

Quarto Plate and Long Products

EMEA restructuring

24

Working capital and capex

Execute

Position for growth

Enlarge

Focus

September 25, 2014

Summary and key messages

25

• From restructuring to customer experience and operational excellence

• Unlocking the potential of our assets

Increased focus on

customer and operational

excellence

• Expanded efficiency and savings measures

• Determined focus on profitability and cash flow

Execution of the

turnaround plan continues

with accelerated speed

and higher ambition level

• Good progress in synergy and cost savings, restructuring, ramp-ups

and deleveraging

Focused strategic agenda

for the past 20 months

bears fruit

Focus on shareholder

value

• Improving financial performance year by year with lower performance volatility

• Efficient working capital management and healthy cash flows

• Further deleveraging of the balance sheet

• Returning to dividend paying mode

September 25, 2014