Hello, and welcome to follow Outokumpu's Q1 2022 results webcast. My name is Linda Häkkilä, and I'm the head of investor relations here at Outokumpu. With me today, we have our CEO, Heikki Malinen, and our CFO, Pia Aaltonen-Forsell. We'll first start with our presentations, and after that, we are happy to take questions from the line. Before we start with the presentations, I would like to remind you about disclaimer as we might be making forward-looking statements. Now, without any further comments, I would like to hand over to our CEO, Heikki. Thank you, Linda. Good afternoon, good morning, good evening. Also, welcome to Outokumpu's Q1 release presentation on my behalf. As the title says, we had an excellent first quarter. The solid performance of the last six quarters continued in spite of the increased uncertainty. Overall, a very, very good start to 2022. Financially, we did very well. Our adjusted EBITDA increased to EUR 377 million, which is the highest we've had in any previous quarter. This happened in spite of the dramatic escalation of the war in Ukraine and overall the great uncertainty in the market. The team at Outokumpu worked very diligently to manage costs and to mitigate the COVID impacts. Remember earlier on, we had said that COVID was still around, and we indeed did have people, quite a number of people who were sick. In spite of that, the operations performed very well. Our capacity utilization remained very high in all of our plants, of course, then allowing us to produce the product that was expected by our customers. Realized stainless steel prices continued to strengthen, and energy costs were very competitive at Outokumpu. We saw a lot of energy cost pressure as we came into the quarter, and we'll talk about that today more. Overall, we felt that we did very well on that front. Then finally, safety, which of course is the most important thing at Outokumpu. We did very well on safety as well and are on track with the targets we have set to further reduce our safety performance. Now, going one step forward, looking at this slide, I just wanna remind everybody, all of our listeners and watchers, about the strategy roadmap we have in place. We are still in phase I, which is intended to end in 2022. Remember that our objective for this phase I was very straightforward, improve margins and delever or de-risk the company. As the end of the phase I is really coming now and approaching us very quickly, I feel that we have actually achieved most of these targets already very well. In the not-too-distant future, we will then start communicating about phase II, but more on that later then. If we look at the strategy implementation overall in terms of numbers, so we did set a target of EUR 250 million run rate improvement. At the moment after Q1, we are at 237, so almost there in terms of achieving that target. Of the three major sort of must-win battles we have had, costs, capital, commercial piece, we have made good progress. As I said earlier, we are seeing significant inflation pressure across, I would say, the whole area of all of our factor inputs, but we have been able to reasonably well, or even in some areas quite well, mitigate that inflation pressure during the first quarter. On the commercial side, we have continued to improve our sales margins through effective selling and mixed management. A few words about sustainability. This, of course, ESG is an important topic, and we will be communicating more and more about this as our strategy journey goes forward. As said, safety is our number one sort of, you know, thing at Outokumpu. On the upper right-hand side, you can just see the figures. We are calculating our so-called Total Recordable Injury Frequency Rate, where we compare the number of injuries against 1 million working hours. You can see from this statistic that we did very well, 1.7 overall. The trend is very impressive, I would say, that even at this level, I feel that Outokumpu is approaching a world-class performance. On the lower right-hand side, recycling materials rate still hitting that 90% target. Our intention, of course, is to produce recycled stainless steel and the use of scrap is of course very integral part of that journey. We have continued to improve our energy mix. We are gradually trying to find ways to bring in low carbon energy sources, wind power being one example. We did in fact sign two contracts to further increase the use of wind power in the company. Finally, it is always nice to get external recognition. EcoVadis is one of these well-known international organizations that evaluates many different companies globally. I'm very proud that Outokumpu was awarded the platinum rating for the work we've done in taking our ESG agenda forward, and I'm really feel good that Outokumpu, for whom sustainability is such a big thing today, that we really did get this recognition. Very happy about that. Now, we have not shown these sort of customer cases before, but we actually have one customer called Harvia, which is the, I would say, the world leader in the sauna business. As if any of you are into saunas, you probably may have heard of Harvia. But anyway, Harvia is our important customers, and they have been kind enough to prepare for us a video that talks about their plans and how they think about sustainable stainless steel and what role Outokumpu plays for them in their business. Let's take a few minutes. Enjoy listening to the executive from Harvia. Thank you. From the early days of Harvia, Tapani Harvia, the founder of the company, he made a decision to make equipment for long-lasting use. Our equipment is designed so that if using it according to the instructions, it's absolutely safe, but also if you're making against the instructions, it's still gonna be safe. So all of the process waste in our manufacturing, we do recycle, and I think this specific cylinder heater waste we do recycle with Kuusakoski, and it will be ending up back at the Outokumpu. In the material selection, we've been selecting materials which are long-lasting and sustainable, and that's why we also chosen Outokumpu steel to be our main partner in the stainless steel. Even though we all Finns consider sauna to be a Finnish invention, more than 90% of the market is elsewhere. For sure our focus is expanding on the global market. Everyone should go to sauna because it's, first of all, enjoyable, and on top of that, you get very good physical benefits. I think the utmost mission we have is to give people long and enjoyable life. Thank you, Harvia, for that message. Very happy to work with Harvia, and I said, great company, great products. Now then, moving on, back to our business and our industry, a few words about the market and prices. On the upper right-hand corner, you can see the nickel curve. You've seen, we've seen the trend in nickel being upward. But what was of course very surprising was that we saw this dramatic volatility take place in the month of March. I recall from statistics previously read that in 2006, I think nickel went to $54,000 per ton, and now we even touched $100,000. Tremendous volatility, which of course is never good for a business when things are so volatile. Now we're seeing some stability recently, but in any case, events like that are of course not positive for the business. On the lower right-hand corner, ferrochrome price development, the market has been very, very tight. Demand has been very strong, and also in some countries, Asia in particular, supply has been constrained, so therefore we've seen ferrochrome prices move. At $2.20, roughly, dollars per pound, I think we are approaching all-time high prices not seen probably since about 2006, 2007 before the financial crisis. Then on the lower left-hand side, the price of stainless, and again, this is the spot price based on external data. You can see the trend still moving a bit upward as we got into the first quarter. You can see the commentary I made in the previous quarter that the gap between the Chinese price and the European price has continued to widen, and that was also the case in the first quarter. A summary on our performance from the delivery standpoint. You recall that the first quarter is always seasonally strong. We had an increase of about 10% in volume terms, and you can see that in the first bar comparing EUR 326 million EBITDA Q4, so increase from 10% volume, an increase in overall profitability. We also of course enjoyed higher realized prices for stainless steel, and I said they continued to strengthen in the first quarter. That is the second green bar on the right-hand side. We come to metal hedging and the volatility. Obviously the events of March in particular did create a lot of volatility, and we have booked hedging losses which are then shown in that negative red bar on the right-hand side. Finally, I talked about cost inflation. I do feel that we did, as a team, excellent work in trying to mitigate those pressures through better efficiency. But in spite of that, the cost pressures are here and that brought the results further down, ending at EUR 377 million of adjusted EBITDA. On the lower left-hand corner, you can see the performance since the bottom of COVID, summer of 2020, Q3, at EUR 20 million. We have now had six consecutive quarters where our results have improved. Obviously a performance and a trend which is very helpful for Outokumpu. We had a very tough decade behind us, and through this performance improvement, of course, the company's financial position overall, our balance sheet, the health of the company are in much better shape. Of course, that positions us much better as we think about the future years ahead of us. Now, the last slide I wanna show you before I give the remote to Pia is a few words about the Russian war in Ukraine. It goes without saying that Outokumpu strongly condemns the military actions Russia has taken in Ukraine, and we have therefore decided to stop all of our operations related to Russia as soon as possible. I would underscore that we actually do not have any facilities in Russia, but what we do is, we have sold some products there, and we also buy, procure raw materials. In terms of recycled raw materials, recycled steel or scrap, Outokumpu is currently not procuring any scrap from Russia, and the limited amount of other raw materials we procure from Russia, well, we are trying to actively look for alternative sources globally. We do acquire energy gases from Russia indirectly. Russia is an indirect supplier. We are looking also actively for alternative sources. Together with our energy suppliers, we have asked those companies primarily who are providing us with gas, for example, to actively look for alternatives in case, you know, there might be disruption. Earlier this week on Monday, the board of Fennovoima, and this is the board of Fennovoima, and Fennovoima being the nuclear power plant project in northwest Finland. The board of Fennovoima made a decision to basically stop or terminate the EPC contract they have had with Rosatom subsidiary RAOS Project. We as a company feel that that was the right decision. It was an obvious decision, especially now that the war had started. Outokumpu has basically written off the whole value of the project already in Q4 of last year, and therefore we booked it down to zero. Therefore the decision from Fennovoima now has no impact on us otherwise. Finally, extending our sympathies to the Ukrainians, Ukrainian people, Outokumpu has donated EUR 1 million to support the relief efforts in both Ukraine and the neighboring countries where many of the refugees are now moving to. Those would be my introductory remarks and, now, Pia, I hand over to you. Please. Thank you, Heikki. Dear ladies and gentlemen, I do hope you are all keeping safe and doing well. I wanted to start a bit by talking about the health, as Heikki talked about the health of our balance sheet, our financial resilience, and let me make a few remarks of that to start my presentations. We are a company that operates in a cyclical business. The whole emphasis on this phase I of our strategy during 2021 and 2022 has been to increase the strength of the balance sheet and that way to de-risk the company. There have, of course, been circumstances, now the war in Ukraine, but let's not forget that we also had the COVID crisis. It's maybe a bit still among us, hopefully soon to be something of the history. To mitigate the risks relating to that, I think the importance of risk management has kind of really surfaced. I do feel that in Outokumpu we have a good way of working with that together as a team, and that has now also helped us in the risk mitigation relating to the war in Ukraine. Our financial resilience has increased, so our net debt has clearly reduced. It's now at EUR 294 million, and obviously supported by the good momentum also when it comes to the profits. Our gearing is very healthy, down to 9%. Also in this time period, again of uncertainty, we felt that having a lot of liquidity available is of utmost importance, so we have increased a bit our liquidity reserves. They are now up to EUR 1.3 billion. We will pay a dividend, or we have paid a dividend in April, which we are of course very happy about. Then finally, net working capital, I think I will come back to that a bit later in my presentation. It is of really high importance also giving now these high metal prices and prices generally that we are experiencing. I do wanna show at least briefly a few important KPIs. Just looking at the net result of the quarter at EUR 251 million, delivering an earnings per share of 0.55 EUR. I think those are good figures to start the year with. You can see our operating cash flow here, EUR 147 million. Our net debt below EUR 300 million, so I will come back to those facts still a little bit later in my presentation. Return on capital employed now at almost 24%, whereas in the first quarter a year ago we were sort of barely on the positive side there. It's been a year of good development, as Heikki said, six consecutive quarters now of really good profit development and profit figures as well. One part of the success on top of the market rebounding after COVID, it's clearly our strategy execution. You know we have talked about this before. We have an approach that really runs through the company in a very diligent but also transparent way. We have a lot of people engaging in the projects to improve. The pie chart to the right shows that we still have a very strong implementation pipeline. Even though we have implemented more than 1,200 initiatives, we still have many hundreds in progress. What you can see here is that all in all, we have already been able to reach EUR 237 million of run rate improvements through these own actions. I think that's pretty significant because, you know, we also upped our target, so we increased our target late last year, and we increased it to EUR 250 million EBITDA run rate improvement, so we are pretty close to reaching that target by now. Let me next talk through the main point per each BA. I will start with showing here the development in the Business Area Europe. There are, of course, some general remarks that do relate to all of the businesses, and maybe I would just sort of briefly relate back to Heikki already talking about the nickel price development and how that really was quite disruptive in the month of March. I'm sure we all remember this debacle in the LME nickel trading. Obviously still at this point, we are waiting for the independent review of what really happened and what can be improved going forward, and we have still seen sort of fairly elevated LME nickel prices, although with very small trading volumes at this point in time. Overall, there's been an impact of that and maybe it's enough to say first that you have seen some in the first quarter. You have seen actually a very big negative figure. The net of timing and hedging was a negative for the group of EUR 42 million, and that was actually more than EUR 60 million negative of hedging and about EUR 20 million then of positive from the other elements. That 42 is the net figure. I think it's also then important to see that there are also clearly benefits for us when the nickel price goes higher. I think, you know, we do hold some inventory, and these timing gains will be significant in the second quarter, even though presumably with these nickel prices, we would have some hedging losses overall in the second quarter as well. I think is something that is, if not fully unprecedented, maybe something has happened in some historic years at some point, at least in the recent years, this has been quite an extraordinary development for sure. Let me quickly say a few more things really particularly for BA Europe. I think the COVID mitigation was a really big topic for BA Europe. I think in U.S., in Calvert, and in Mexico, we saw this sort of peak in absenteeism because of COVID already sort of during Christmas time, like, very early in the quarter. In BA Europe, this really came sort of during the quarter. The wave was heavy, and I really wanna say thanks to the team for extremely good mitigation. In the end, we really managed to grow our volume, which was good because the market demand was strong. It was a good quarter to perform operationally in a strong way, and obviously this really also helped us to boost our EBITDA. I think Heikki has talked a little bit about where we are right now also in terms of the market situation, but I still think a few sort of typical remarks that I would like to make. We have seen in the order intake right now much more sort of the waiting attitude from the distributors. Obviously, that's one important market channel. We have other important market channels, for example, end users, where we still have a more positive sentiment overall. What we can see from the statistics, obviously, apart from the higher imports in the first quarter, is also that distributor inventories are now a little bit above the historical averages. That is sort of the environment where we are operating right now, obviously still at, you know, really good capacity utilization levels and overall sort of typically, of course, Q2 is still seasonally also a strong quarter. Let me move to BA Americas. It is a pleasure again to show these figures. We've had a very strong situation during the first quarter in the market, and obviously this sort of positive sentiment overall from a macro perspective also continues in the Americas. It's a strong market environment, including distributors, including end users as well. I do think that if you look at distributor inventories, they are maybe a little bit up compared with sort of end of Q4. We saw somewhat of a peak during Jan/Feb that has now a bit declined, and that was probably caused by almost sort of congestion in the ports and a little bit this sort of peak in imports over a short period of time. We are certainly running our operations very strong right now and also then enjoying, you know, this good operational performance along with a lot of mitigation on the cost side because obviously inflationary pressure is there. You see here also in euro terms a very strong result, EUR 90 million in the quarter. I would like to move over to ferrochrome. You have seen the price, the European benchmark price being high in the quarter and kind of continuing to rise throughout the second quarter. It has been really important to keep the operations running. You can see that we are a little bit up on volume here. We have been sort of in a stable and sort of robust performance mode during the quarter. The tightness of the market has led to the price levels being very good. Maybe I would still comment, even though I didn't do that for BA Europe in particular, but we have also been able to benefit from the Nordic electricity markets and obviously in the ferrochrome case in particular, from an electricity price level that is still in comparison with many other European countries clearly more favorable. Our hedging efforts were also successful. In the end overall, we actually did not see an increase in electricity from Q4 to Q1, even though overall in energy, maybe there was a little bit of pressure. Finally, let's look at a record result also from long products. You can see EUR 24 million here, in the quarter. We've been really successful in getting, you know, pushing out more volume also from our downstream operations here and enjoying the efforts of the turnaround program now really proving also in the result. I think those were overall some positive news from a profitability perspective. If I now still use just a few more words on the balance sheet, I would like to start with the cash flow, the operating cash flow impacts of the first quarter. You obviously see a good result supporting it strongly, and then you see working capital at -EUR 252. Obviously, it is very much the higher metal prices driving this. If I would like to simplify, I could of course say that yes, indeed, we did have in EUR terms about EUR 200 million increase of inventory in the quarter. Half of that was clearly only kind of price driven. In the end, it is still worth mentioning that there's been really big changes as well. AR increasing, you know, more than EUR 300 million, but on the other hand also AP increasing almost EUR 300 million. Those more or less offset each other in the impact. You can see here that there's really nothing significant going on on the provision front, et cetera. Those restructuring programs are now kind of a matter mainly of the past, so the payouts of those have really been done. From a CapEx perspective, we remain at the CapEx of EUR 180 million for this year. That would take me to the final slide of my presentation, still showing here the development of our net debt and leverage. Obviously, our net debt now below EUR 300 million, bringing also the leverage to 0.2x, so clearly, better than our set target at being below three. We believe that the strong balance sheet is an asset, especially in uncertain times. We are also comfortable at the moment with the thought to building here really the resilience and the strength under these circumstances. With those words, Heikki, back to you. Thank you, Pia. Let me then finish with the outlook before we take your questions. The outlook for the second quarter is as follows. Group stainless steel deliveries in the second quarter are expected to remain at similar level compared to the first quarter. The European benchmark for ferrochrome price will further increase to $2.16 per pound for the second quarter. With current raw material prices, significant raw material related inventory and metal derivative gains are expected to be realized in the second quarter. Supply chain uncertainties resulting from the war in Ukraine and associated Russian sanctions remain a risk in the second quarter. Adjusted EBITDA in the second quarter of 2022 is expected to be higher compared to the first quarter. That is the outlook for the second quarter of 2022. With those words, I would like to hand it to the operator for questions. Thank you. Thank you. Just as a reminder, if you do have a question, please dial zero one on your telephone keypads now to enter the queue. If you find your question is answered before it's your turn to speak, you can dial zero two to cancel. Our first question comes from the line of Tristan Gresser of BNP Paribas. Please go ahead, your line is open. Yes. Hi, good afternoon, and thank you for taking my question. The first one, can you discuss a little bit the moving pieces for the Q2 outlook in Europe? Would you expect margins excluding the losses in Q1 and the gains in Q2 to be stable quarter- on- quarter? Will the price increase able to offset the increase in cost? Yes. Thank you for the question, and, well, I'm sure you ask this on the back of us also really pointing to the significant impact of the net of timing and hedging being positive in the quarter. However, when we look at the other elements, obviously volumes are pretty much stable. I would say apart from that, we are really doing our best with the mitigation of kind of the inflationary pressure that we can see on costs right now. Maybe there is sort of some opportunity still also on the operative side to sort of really continue on a good path. Overall, of course, the net of timing and hedging impacts should not be sort of discounted. Those are important. All right. Understood. Could you maybe give us some sense of the scale of the expected inventory gains for Q2? Are we talking about something similar to the Q1 losses but in positive or something even larger? Yeah. I mean, obviously that will still depend on, you know, where we actually sort of towards the end of the quarter, will see the metal price developing. This is still, you know, somewhat of a moving target. Based on what we can see right now, I mean, it's early May, it's clear that the reason we say significant is that we really had also a significant negative in the first quarter and now we will also have a significant positive in the second quarter. Indeed it could be a sort of a similar size or even bigger than what we have seen negative in the first quarter. That's very helpful. My second question is a bit more on demand. How has been the reception of the latest increase in the alloy surcharges from both distributors and customer in Europe? Have you been able to pass on the raw material cost increase to your customer, or has there been some pushback? Also, have you been able to use the alloy surcharge mechanism to all of your sales in Europe recently? I think I will not go into the details of the alloy surcharge, let's say response to the degree you are looking for. I mean, what I can say is that, I said, you know, the alloy surcharge was put in place at the end of April, and it's in effect now for the month of May. We're now in the process of considering, you know, what we are going to do with respect to the alloy surcharge then for the month of June. The calculations and the thinking is still underway, and we have not made any decisions at this point in time. All right. Thank you. Thank you. Our next question comes from the line of Carsten Riek at Credit Suisse. Please go ahead, your line is open. Thank you very much for taking my question. The first one is actually on the long products, which did extremely well. A result which we haven't seen for at least the last seven-eight years. You mentioned what changed already a little bit, but Pia, you mentioned that actually you did more downstream or debottlenecking in downstream facilities. What exactly did you do, and how sustainable is a very good result? That's my first question. Yeah. Thank you, Carsten. I think it's actually a pleasure to talk also about, you know, the success of the turnaround program. Obviously, you know, from a group overall perspective, we already start to speak about smaller volumes, but I still want to mention, I mean, I think we have downstream operations in the long products division are, for example, you know, our Fagersta operations, our OSB operations in the U.S. I think we have just been really good at sort of, you know, getting a bit more volume out and really being able to fulfill sort of the kind of promise or the capacity that we have seen also, you know, being there in those units. Also getting kind of the logistics to work and sort of the full scope of that. I do think that is important. Maybe I should mention one other topic, which is that during already during 2021, when you can see from the sort of price development on the flat side that prices started increasing, there was actually, I would say, somewhat of a delay before any price increases started to go through in the long products sort of product categories. Maybe that's also contributing now that we start to see some of those positive developments. Okay. That helps. The second question is, more on the broader market, especially, I know that you usually don't talk about second half, but, I'll try it in any event. Will the COVID-related lockdowns in China pose a risk to the stainless steel demand in the second half, in your opinion? Could it actually disrupt the value chains, and could it impact the European, slash, North American business, as well, in your opinion? Maybe if I try and answer that, obviously as far as we can see, the lockdowns in China have been quite considerable, and indeed they have caused logistical issues in the various ports and in the supply chain. We have actually, if you look at the publicly available Eurofer statistics on imports into Europe, you actually can see that there was increase in imports into Europe from Asia in the first quarter. Interestingly, what actually also happened was that we saw Chinese import volume in the first quarter into Europe for the first time. I tried to look at statistics, we went actually many years back to a point when we actually saw China bringing in that amount of volume. Probably there's something going on in China that, you know, then led them to move that volume into Europe. The volume that arrives now or arrived in Q1 probably was ordered like five months earlier. There is, as far as we understand, sort of a five-month lead time lag between the point of production and then when it actually arrives here. Trying to think of what the events were in China at the end of Q4, it was before the Olympics. I don't know if the lockdowns were that severe at that stage. But anyway, China volume has now arrived here and let's see, you know, what whether that was temporary or whether that is more of a permanent, you know, phenomena. China, of course, does have the tariffs in place as we know. On the North American side, I would say that we saw earlier in the beginning of this year a quite big bump in imports into North America. Our understanding was that that was more a result of just simply you know bottlenecks in the supply chains, which then ultimately opened, and you saw this sort of big swoosh of volume coming in. At the moment, you know, we have not seen the same amount of activity volume coming into the United States as we see here in Europe. That would be a bit of a difference. In terms of the second half, very difficult to predict what exactly, you know, we're gonna see from Asia into these markets. Just have to wait and see here some months. That helps already. The last one is more broadly. After fixing the balance sheet, what's pretty much next? I assume that the appetite for acquisitions is rather low after the last kind of experiences. What are the areas you would like to strengthen your position? Carsten, that is a good question, and that is a very important question. Maybe it's the proverbial, you know, $6 million or $60 million dollar question. You know what? We're obviously thinking about this, you know, deeply. I just ask you for your patience. You know, during the course of this year, you know, we will come to you with a good plan. Today unfortunately is not the moment when I wanna share what we're gonna do next. Trust me, you know, we will be back in the not too distant future. Please be patient. Perfect. Thank you very much. I keep my patience. Thank you. Thank you. Thank you. Our next question comes from the line of Patrick Mann at Bank of America. Please go ahead. Your line is open. Thanks very much for the presentation. I wanted to ask Pia, you alluded to your relative cost position in energy and electricity. Can you give us an idea how much has your relative cost position improved to your European peers? Does that impact your strategy going forward? I mean, is there the opportunity here to, if this is a structural cost advantage now being in the Nordics, to aim to take market share? Possibly does it, you know, just encourage more imports from Asia as Heikki was just saying? Thank you. Patrick, thanks very much. I think, you know, I base my answer more on sort of general information about electricity price development, et cetera. Obviously, I don't have sort of any specific contractual data for anyone else than ourselves. When I just look first at that sort of difference between the price levels that we have seen in Finland or in Sweden, compared with other European countries, I mean, obviously, you know, in the peaks we have talked about hundreds of EUR, you know, per megawatt hour. I mean, these have been very significant differences. I think we do see that in our cost development now as well, that our long-term hedging strategy has been good. It has protected us in this kind of extremely volatile environment. That is not to say, I think, you know, we can discuss the details of our hedging program. That's of course something that is rolling and, you know, if market prices go up at some point, we will be impacted as well. There have really been some, I would say if not anomalies then at least sort of really, sort of, you know, moments of very low prices, for example, in Finland, during the month of March. Obviously there were also some really sort of beneficial momentary, sort of events here. I would say overall that I do think, you know, we have a very electrified production, so this is important for us and I do believe, it's a very sort of positive advantage for us at this point in time. Can I, Pia, just add a few comments? Of course. on electricity? Because obviously it is a very important, you know, part of our cost structure. Three points, obviously, the Nordics of course benefit from a substantial amount of hydropower originating from Northern Scandinavia at low cost, sustainable, and of course that will be around. We in Finland have now Olkiluoto number three. The nuclear power plant is about to start or has already started and is gearing up, so we understand that overall the Finnish market should be in fairly good, you know, balance with Olkiluoto, you know, going forward. I think furthermore it is quite interesting that if you look at the Finnish coast, for example, there is still a sizable amount of wind power capacity or potential. Our understanding is that, you know, wind power from an investment cost per megawatt is reasonably competitive nowadays, probably more competitive than, you know, ever. Therefore we believe that there will be, you know, investors, energy companies who will be investing in that type of energy source in the future as well. I think it does maybe give us some relative advantage. I mean, are you factoring it into your strategy though? Are you saying, well, look, if we compare even a year ago and our outlook and our relative cost position to European peers, it's structurally different and we should be more ambitious about maybe European market share? If you know, I agree with everything you're saying, right? Shouldn't we see the Nordic countries in terms of energy intensive production and manufacturing, including stainless steel, shouldn't you become a much bigger proportion of Europe output? Well, I think that, Patrick, important question. I think short term, of course, we have been running full. Mm. You know, with the capacity utilization we have, we just. Yeah. Don't have more capacity. It would obviously require from us, you know, investments or other ways to further, you know, generate more volume, in the coming years. That of course would not happen overnight. Got you. Okay. Let's watch this space. Thank you. Thank you. Our next question comes from the line of Luke Nelson at JP Morgan. Please go ahead. Your line is open. Hi. Thanks for taking my questions. Firstly, just a couple of follow-ups on the cost side, which you sort of gave some detail to and obviously strong performance, particularly in Ferrochrome. At the pre-close call, you gave some numbers around the quarter-on-quarter impact from natural gas power and ferrosilicon. Can you maybe just talk through what the sequential impact is gonna be for those elements within your Q2 outlook guidance. That's my first question. I think, you know, ferrosilicon especially was one of those cost elements where we definitely saw an increase quarter-over-quarter from Q4 to Q1. Could have been sort of north of EUR 20 million impact on the group level. Obviously, that sort of really kind of jump or peak seems to have been from our perspective, you know, happening quite a lot there, Q4, Q1. I think there is still inflationary pressure there, but I don't see it sort of quite as significant as it was from the Q4 to the Q1. I wanna say that for electricity, if I just take that part, I did initially expect that we would still have, you know, maybe some tens of millions EUR increase from Q4 to Q1. In the end, we did not because the kind of end of March was then so sort of beneficial from an electricity cost perspective for us. We were more or less stable and I would say maybe there is a bit of pressure up for the second quarter, but it's not that significant. The gas situation remains sort of a really sort of big open topic. I mean, obviously, sort of my natural answer should have been, you know, we are sort of contractually protected, and I could give you sort of more clarity on, you know, maybe it is around EUR 10 million increase or something like that. Now, of course, we all know that gas is under pressure, and there are really significant movements in the price sort of from day to day. So I think that brings potentially a little bit more pressure into that sort of area. But you know, without any major disruption, I would say also here we are still talking about sort of a pressure upwards, but we are not talking many tens of millions EUR on group level. Maybe it is more like, you know, 10, 15, but there is more uncertainty around the gas as we speak. Okay. That's very clear. I suppose just more broadly, again, with group guidance for EBITDA, higher relative to Q1. Can you maybe just give us a sense of how that guidance would fare if we adjust for Ferrochrome, which obviously we've got roughly EUR 30 million improvement in EBITDA with the new Ferrochrome settlement, and then adjust for the gains in inventory and hedging, which sounds like it's potentially sort of EUR 30 million positive. I'm assuming that's potentially sort of EUR 60 or 70 million sequentially tailwind coming through. Adjusting for those, how would the stainless steel business's margins proceed? Would they still see EBITDA improvement, just sort of on a standalone basis? Yes, indeed. I think it's a good question. It already starts to be really specific, but I do try to at least sort of give some information on some of the elements that are most important here. So you touched on ferrochrome. You also touched on the net of guidance, timing and hedging. I just want to say, I mean, with the metal prices, with the nickel price that we see right now, I mean, it would be a hedging loss and a timing gain. Just to sort of be clear on that, you know, there is a net effect then that will be clearly positive. That is what it looks like right now. Then you talked about sort of what are the elements, sort of on the flat stainless side. Obviously, again, there you know not really a big change. Volumes more or less remaining the same. I would still repeat that, I mean, there is, indeed, inflationary pressure, but our cost mitigation efforts have been really, you know, successful, and as I just described some of those details that we typically talk about, I mean, there are not that significant step changes in those even though we clearly see sort of a pressure. I would still say that, you know, there is sort of a fair and sort of good performance also from the stainless side. We are for sure sort of observing still a kind of a good development here possible. Okay. That's very clear. Thank you. Thank you. Our next question comes from the line of Anssi Raussi of SEB. Please go ahead. Your line is open. Hey, thank you, and hello, everyone, and thank you, Heikki and Pia, for the presentation. First one is a simple one. For which month or quarter you are currently booking your orders? Okay. If I answer that question. Thank you, Anssi. Nice to hear your voice. We are currently booking orders for the end of Q3, so that would be, August, September. Yes. Okay. That's Anssi, that's—I mean, it's usually Europe that we are talking about. You know that U.S. is sort of operating a little bit on a different cycle. There we are, I think, booking July, August, which is really typical for kind of how we would operate. Indeed. Yes. Thanks. Of course. Mm. Of course, I'm talking about Europe here. Mm. You also mentioned that you see improving demand in Pro grades. Is this due to energy investments or what's behind this? Do you see that this would have a significant impact on Q2 results already or later this year? Well, I'll let Pia comment on the implications, but I would just say that in terms of demand for Pro grades is looking good. As said, you know, there are some major bigger trends. I mean, you talked about energy. I think the reality is that now with this Russia-Ukraine crisis and the, you know, the risk associated with supply disruptions from that market could ultimately lead to quite substantial investments in energy in Europe. I think that will be an interesting area for us to focus on in terms of our sales. Of course, as commodity energy prices go up, oil included globally, that will also further increase the demand for the types of metals we produce. You know, I think there's a lot of positive, you know, tailwind in that sector as well. Anssi, maybe just to add that, you know, typically the sort of order book is here for a bit of a longer period of time. Indeed there could be some positives in Q2, but it could also come a bit later in the year. This is not kind of uniquely for Q2. Okay. That's clear. Maybe the last one from me is just to clarify and to continue on Ferrochrome division. Basically should we still use the old rule of roughly EUR 10 million EBITDA per $0.10 Price? Or when thinking about the price delta quarter-over-quarter, is there something specific to take into account in Q2? Well, you know, with Anssi, we had the challenge with, you know, all these other sort of, you know, inflationary pressure and kind of other things happening around that. I mean, as we speak and as per right now, that's kind of the best advice I can give for these circumstances, and we'll certainly come back if that changes. Okay. That's clear, of course. Mm. Understand the uncertainties. Mm. Thank you. That's all from me. Thank you. Thanks. The next question comes from the line of Rochus Brauneiser of Kepler Cheuvreux. Please go ahead, your line is open. Yes. Hi there, and thanks for taking my questions. Most have been answered already. Maybe on your EUR 250 million program, you were mentioning early on that this was also quite helpful in mitigating the cost inflation you're observing. How you think about, you know, stepping this program up again as we might be prepared that inflation is not moving away too quickly. Are there any thoughts already at this stage for the phase II that you keep going and keep pushing on this side? That's the first question. Yes. Hey, thanks very much. Indeed, you know, I think we have more than 700 initiatives that are still sort of extremely early phase, so under evaluation. It is absolutely possible that a part of this could be sort of a source also for our phase II, sort of improvements. Overall, it's just important as well that this way of looking at improvements, you know, really driving them as projects, is also sort of the security that we need in our type of industry in just constantly, you know, fighting this battle, on cost and on inflation. I think both sort of as a kind of long-term like way of working, it's valuable, but certainly we probably have there, you know, ideas in the pipeline that we can use also going forward. Okay, that's interesting. Secondly, sorry that I come back to the guidance and to the previous question. I'm not sure whether I got you wrong when you talked about this, you know, elemental metal derivative effects, which were EUR -42 million last quarter, and you were just saying, you know, it could be positive with the same amount or even higher than that. Mm. We're talking about EUR 100 billion, or let's say it could be up to a three-digit million figure in terms of swing impacting the EBITDA. If we adjust for that, how shall I think about the realized, you know, prices? I'm not sure whether you commented on that previously. I think volumes are flattish. You hope energy prices to mitigate. I just don't. I'm not just sure whether your comments mean that your underlying earnings are flat or eventually down. Yeah. Yeah. I mean, I don't see any reason to interpret it like that, the underlying earnings would be down, but I wanna emphasize that the sort of, you know, exactly as you said, you know, the swing to the positive in this net of timing and hedging will be, you know, a big number. Mm-hmm. Okay. Okay, that's helpful. Then maybe more like, general question. You're saying over the last couple of quarters you were running at very high capacity utilization. Mm. What kind of quarterly numbers shall I think about, what you would consider as an effective good steel capacity across the whole plant network? Um- Well, I would say I don't think we have published that kind of, you know, sort of a nameplate capacity figure. It's kind of a constant subject for also kind of further work at our end, just looking at, you know, also in the right number of shifts, you know, how we are running the various operations. It is true. Seasonally also, I mean, I would expect the first quarter and the second quarter to be kind of in a normal sort of annual cycle, those where we would see those really high capacity utilization. So maybe that's kind of the best answer I can give right now. I mean, I was just looking at some sort of historical stats, looking at the development of our delivery volumes. You know, sort of from 2017, 2018, 2019, 2020, 2021. Obviously there's been sort of the COVID lows, you know, 2020 was a low figure, 2019 wasn't that high of a figure. Overall, if you look, of course, we've had kind of a good rebound back to those kind of times before all of these crises started to hit, generally, the industry as well. I would say we have taken sort of very many steps on that journey, on that rebound. Now of course, the question going forward is, you know, what can we do more? Certainly we are working with those questions every day now. Maybe I can just add. All right. To add to that. Obviously with the level of capacity utilization we have, and even though our melt is based on batch processing, we do see that with the high utilization, we are getting also efficiencies. Because we can run longer, we can use. You know, we have bigger melts, we can use the same recipe in a multiple times consecutively, and that basically gives us efficiencies. I think that is also sort of contributing to the, you know, not only high utilization, but also then, you know, just generating more volume. Vis-à-vis when times were tough, you know, we were kind of selling what was, you know, demanded. It was much more difficult to run. This is a Mm. All right. There's a big, big positive, you know, delta for us also from there. Okay. No, that makes absolutely sense. Thank you very much. Thank you. Our next question comes from the line of Krishan Agarwal at Citigroup. Please go ahead, your line is open. Hi, thanks for taking my question. Most of them have already been taken. If I can ask a question on the hedging policy. I mean, you mentioned couple of times that the hedging policy has been successful, it has protected you in the high pricing environment. My question is how adaptive the policy has been in the current pricing environment, as in have you reduced the hedging so that the current hedges in the high pricing environment doesn't get a burden later when the prices come down? Mm-hmm. How that evolution has been? Indeed. Thank you very much. May I still ask that, do you mean particularly nickel hedging here, or do you refer to something else? No, I mean electricity price. Sorry. Okay. My mind slipped. Yes. Okay. On the electricity price, what our hedging policy is that we are gradually building up sort of our position with typically actually with really sort of delivery contracts. We don't wanna sort of be exposed to pricing only in a certain moment of time. Kind of when the moment is right, we actually build sort of a rolling position over a period of two- three years. We have some really long-term contracts, like you have seen us recently launch, for example, wind power contracts for 10 years, et cetera. We also build a more sort of tactical position with contracts, you know, running over sort of this rolling few years period. That means that we take positions gradually so that when we in the end, kind of reach that quarter, we have reached a very high percentage. We never hedge 100% of electricity simply because there could be variation in production volumes, et cetera. We do need to leave sort of a top layer there for spot market. But under the circumstances, for example, in the first quarter, we wanted to leave an extremely thin top layer, and that is what our policy allows us. We have, let's say some ability to adjust, you know, whether we really take the hedging up to, let me say, you know, 90%-95% of the expected consumption, or if it's just slightly lower than that. I mean that variation is not huge. That's kind of where we can, according to our policy, take the decisions then, you know, based on our best understanding of the overall situation. If I understood correctly, you had, you know, decent flexibility not to take high pricing hedging so that your cost base is permanently increased for the next end of this year or for next year. Yeah. I mean there is some impact. Yeah. You know, we have like funnels I guess is the sort of right term to use there. We have some funnels inside which we can move. We have some flexibility, but we don't wanna sort of, you know, kind of totally sort of step out and not do any contracting at all. We would always assess the situation and then choose in which funnel we are. You know. Yeah. If prices are high, we would go for the lowest funnel. Let me maybe sort of try to explain it that way. Sure. My second question is more on the capital markets day or the site visit you're holding in June. Yes. I mean, what should be the expectation in terms of key messaging? I mean, if I were to use an example of Kemi mine, I mean, you've been doing this mine life extension program for long. The CapEx has gone into that. Should we expect some kind of a messaging that, okay, CapEx has peaked, and then the CapEx will come down there? Or any other potential key messaging? On that specific question, I think it's fair to expect that we can show that the project is about to come to an end. It has been successfully managed and also from a CapEx perspective, obviously that means that, you know, it's kind of tailing off. We still have, you know, EUR 60-EUR 70 million this year, and we will have some tens of millions EUR next year. But physically speaking, I mean, we are sort of moving really towards the completion of the project. I think that's one good example. I mean, we certainly wanna show both the mine and our stainless operations. We wanna show what benefits we have from the integration. As for the really sort of detailed messaging and agenda, you know, we will come back to that shortly. That's still at the moment under preparation. What I would say from my side is I would expect it to be a great event, and I would definitely recommend you arrive and book those airline tickets. Sure. Thanks a lot. Thank you. Thank you. Our next question comes from the line of Bastian Synagowitz of Deutsche Bank. Please go ahead, your line is open. Yeah. Thanks, and good afternoon all. Heikki, can I just follow up briefly on Cass's earlier question on balance sheet and strategy, and sorry to come back to that, but that is obviously still a key point for investors. The magnitude of your cash generation obviously does allow you to look at capital allocation in a very different way versus what it would've been the case even a year ago. Without going into detail, I'm just wondering whether you plan to update on strategy or capital or allocation from a holistic point of view, and maybe also whether you could give us at least a broad timing which you are envisaging here. That is my first question. Right. Yeah, try and answer that in a way to be informative but not sort of, you know, say what we ultimately are going to say. I think that first of all, what I would look carefully at is the journey we outlined when I joined. Our first step was that we would de-risk the company, and the second step is investing in the core. What I can say is, you know, investing in the core is still kind of what's on my mind, and I think you should read into that, you know. Well, I think the words in itself tell already something. I think otherwise, indeed, I am very happy where we are as a company. We are six months ahead in terms of the, let's say, the targets we set. We've made extremely good progress. Of course, we have had a lot of tailwind from demand, and that basically does put Outokumpu in a unique position. I don't know if Outokumpu has been this strong financially balance sheet-wise, you know, ever, at least have to go up very far into the past. It does give us optionality and what we of course many things we can do. What we're now trying to figure out is, you know, how do we prioritize the different things and how do we make sure that. I think what's really important for me at this stage, just at this juncture is that we have been able to institutionalize our way of working here over the last two years, and I wanna make sure that this way of working continues and you know, we start creating a very, let's say, predictive track record in terms of our performance. I think that is sort of what I would say at this stage, and we will come back, I said, with Pia during the course of this year, with much more detail and a very holistic and comprehensive strategy then for you to react to. Thanks for the color. In terms of the timing, is this something you plan to do for the third quarter or fourth quarter? Or you still keep all options open here in terms of the timing? We are working very hard. I don't wanna commit to a date, but what I can tell you, we're working very hard on this. Understood. Just maybe to get back on the points you made, and I think you made a couple of very valid points. If we look at Outokumpu obviously as an equity story, it's probably fair to say it has not worked over the past decade. I think it did very well in the recent past, if you look back, obviously it did create quite a bit of pain for investors which have been in there for long. I think in fact the current market capitalization is not far from the amount of equity which has been raised over the past 10 years or so. Is this something which is on your mind and which you aim to repair? In other words, did you see a share buyback as generally something which is part of your toolbox as well? I'm not gonna comment on individual, you know, actions the company may or may not do in the future. I would though say that, you know, I understand the concerns from the past. You know, the last decade was very tough for the company and you know, as CEO of this company now for two years, of course my objective is to try and create a sustainable, consistent, predictable track record so that investors and stakeholders could sort of see that, okay, this is kind of where they're going and the plans make sense, and when they say something, you know, they will deliver. At least Pia and I and my colleagues in the executive committee of the company, you know, that is kind of the mantra we are repeating among ourselves. So far the last two years have gone better than we predicted. Of course, you know, that is kind of the mindset we have. Is that not the case, Pia? Absolutely. Making sure that we have a very sort of consistent delivery also of what we have promised to do. I think the financial resilience, the strong balance sheet will also help us with that also going forward. Okay. Perfect. Very clear. Thanks to both of you. Thank you. We have one further question that's from the line of Patrick Mann at Bank of America. Please go ahead, your line is open. Thank you for the follow-up opportunity. Just in terms of switching raw materials away from Russia, is that expected to have any kind of impact on cost, or is it just about sourcing, supply? Mm. Thanks very much. Patrick, in the short term, what I would highlight is that there could be working capital impact because obviously there are some supply chains that needs to change. There are payment terms, you know, there's sort of delivery times and all related items that are certainly going to impact. I do see this as a pressure on the working capital in the short term. Then obviously, you know, from, for the longer term perspective, it's more sort of the holistic development of, for example, the nickel pricing and what happens there that will really have an impact. Obviously, you know, well, there could be different scenarios into that. I don't think that is kind of Outokumpu specific, but definitely something we are watching. If I think about Q2, for example, I really also think about still some pressure on the working capital. Maybe it leads to, for example, AP development being somewhat worse. I just want to comment and sort of add one thing if I may. We haven't really touched on ESG at all. Mm. I just wanna briefly say regarding raw materials that we as a company are putting a lot of effort and resources into what we call responsible sourcing. Obviously, as you know, many of the metals we procure come from what we call, I guess, high-risk countries. So we have a team of professionals which are doing really deep dives on location in these countries to understand and make sure that, you know, the way they mine, the way they conduct, that they don't break any human rights, you know, guidelines and so forth. This is an important part of our ESG roadmap, and I just wanna make sure that you are aware of that we take this seriously and we're putting, you know, more resources behind it. Thank you very much. Understood. Thank you. Thank you. As there are currently no further questions in the queue, I'll hand the floor back to the speakers for the closing comments. Thank you very much for following our webcast today, and thank you very much for your very good questions. Before we close the call, I would like to remind you that we will publish our half-year report on August 4. Now thank you once again and have a good day. Thank you.