Hello all, and welcome to our audio cast, where we will discuss about our recent announcements. My name is Linda Häkkilä, and I'm the Head of Investor Relations here at Outokumpu. Our main speakers today are our CEO, Heikki Malinen, and our CFO, Pia Aaltonen-Forsell. We will first present you a few slides, and after that, we're happy to answer your questions. Now, without any further comments, I would like to hand over to our CEO. Thank you, Linda, and good morning and good afternoon to everybody. Hope you are doing well here in the midst of the last quarter of the year. The objective of today is to discuss our announcement from last night regarding the hot rolling agreement in the United States at Calvert, and also a couple of other decisions we have taken. We have a few slides. I will not use a lot of time here. I'm sure you have a lot of questions, so this is more just to set the scene, so to speak. If we go to the first slide, just a reminder for those of you who don't follow Outokumpu that much in detail, we have three phases in our strategy. We are currently in phase two, and our current objective is to strengthen the core of the company, focusing really on our core assets in Europe and North America. And we are continuing to work and prepare for phase three, which should then start in a few years' time. Now, to the news of last night. As you know, we have a, in some ways, unique setup in Calvert, whereby the hot rolling, which is a very, very critical part of the process, was outsourced, and it is being conducted in our adjacent site, which is owned by AM/NS company. And this setup was established a long, long time ago, prior to Outokumpu acquiring Inoxum, and that setup has been working in the recent years quite well. Now, in the current setup that we have, there has been a question of, you know, how do we move forward, for the future years? Should we, hot roll ourselves, or should we continue the partnership, or should we look at other options? And, basically, we have announced that we have been able to achieve what I consider a good agreement, a good arrangement with our partner, AM/NS, and the negotiations have been completed, and basically through that, we have been able to successfully extend the existing cold rolling agreement until 2051. And thereby, we will continue working, in good collaboration for many, many years. I do personally believe this is a win-win, arrangement. Of course, both parties had their own needs, but I think in the end, we should—I hope we are all satisfied. The agreement basically allows us then to have 900,000 tons of our hot rolling needs served by AM / NS. Our melt capacity is about 900,000 tons, a bit more, and we have 600,000 tons of cold rolling. And as a result of the arrangement, there are certain financial implications of that, coming from that, and thereby, we are communicating that we believe our annualized normalized EBITDA for the Americas business area will drop by about $30 million, from $200 million to $170 million. And related to this agreement, and we are also—we'll be recording a non-cash impairment for the end of this year. Now, I would like to ask Pia to say a few words about the impairment booking before I go forward. So Pia, please. Yeah. Thank you, Heikki, and hello, everybody. Well, it's rare that I got to discuss purely an accounting item, but really to clarify that this is a non-cash accounting item, I would like to say a few words. You might be familiar with practices for impairments, but what it's really about is, you know, when something is changing in the business, such as now we are entering into this new contract, but also as an annual process, we would be comparing, you know, our assessment of the future cash flows of operating segments, with the assets that we have there. As a result of such a preliminary assessment, we now believe and communicate here that we would be booking into the fourth quarter into business area Americas an impairment item of $280 million. It will be treated as an adjustment item, and it's purely non-cash. And then, of course, as a result of this, the value of our assets in our balance sheet will be lower, and then it also means that in the future, depreciation will be approximately $30 million lower per year. Okay. So thank you, Pia, for clarifying that. Now, if we then take a little bit step forward and look at the future. So obviously, this partnership is very important for us, and we're excited about the arrangement for a number of things. First of all, it does allow us as a company to grow faster in North America, which is extremely important for us because we really like the North American market and US in particular. And it also allows us to secure strong shareholder returns, which is also something we have communicated as being really important for management. By doing this, by having this arrangement, now, we basically are able to avoid a nearly approximately $1 billion investment into hot rolling. And it also then allows us to do a number of things. One, of course, is that we will now be in a position to really accelerate and look at the potential expansion of our cold rolling capacity in the U.S. Now, recognizing again that we have 900,000 tons plus of melt, we have the 900,000 tons of hot rolling, but we only have 600,000 of cold rolling. So we are short on cold rolling. And to increase the revenue and margins of our business in North America, this is, of course, highly beneficial. It allows us to keep our balance sheet strong, and also it then continues to support our policy of stable and growing dividends. Now, in terms of financial targets, we have published them then once we started phase II, our net debt to EBITDA will stay below one. Our CapEx for this part of the journey, EUR 600 million, is still holds tight, and we are working very hard to achieve the run rate improvement on EBITDA of EUR 200 million. There we are also on course, and we continue to update you on every, in each of our quarterly meetings on how we're making progress. You saw last time in Q3 that we were on track. Then finally, of course, we had the stable and growing dividends. Now, in addition to this important arrangement, our board of directors have also approved a share buyback program up to EUR 50 million, and basically, we will now start very soon on December 1 with the program, and the objective here is to repurchase maximum number of 11 million shares, and this relates to our primarily to our convertible. And then my basically final slide before we take questions is to say about phase three. When we met during our Q3 release, we spoke about the priority areas, and, and they were four, basically. Americas expansion, which I've just confirmed is very, very important for us, but also European competitiveness is important. Two-thirds of our business still comes from Europe. Value chain integration, and here I specifically relate to when I talk about that, I talk about raw materials and energy, and we made some announcements here recently with CRONIMET and others. And then sustainability leadership, where we are the sustainability leader. We have the lowest CO2 emissions in the industry, and we are the only one who has the approved SBT 1.5 degrees commitment that we are working towards intensely. So the arrangement also allows us then to allocate capital into these other areas in the years to come. So with those words, Linda, I hand it over back to you. Thank you. Take it from there. Thank you. Thank you, Heikki. Operator, we are ready to take questions from the line. If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Anssi Raussi from SEB. Please go ahead. Thank you, and hi, all, and thank you for the presentation. A couple of questions, and the first one is about your mix improvement, which was one of the main reasons behind this potential hot rolling investment. And I have understood that even if you expanded your cold rolling capacity, it still wouldn't allow you to produce some of your higher grade products. So what has changed behind this, and do you think that you will be capable to produce these higher grade grades in the future? Anssi, do you want to do both questions simultaneously? Shall I answer them one by one? Answer first your first question. So yes, mix improvement is important. We obviously have many different products we manufacture across the company. In the U.S., of course, it has been more the commodity grade. The hot rolling investment in itself would have given us certain flexibility. But I think ultimately, what at the end of the day, which is also very important, is what can we melt? And we, of course, can melt very different types of alloys. And then when we look at the expansion of the cold rolling, that will also give us some opportunities then to roll different types of products. But I would say that the solution we now have in place does not, let's say, dramatically constrain us. So, in that respect, you know, I do feel that it is not like, you know, we have closed any material doors here for the company. Simultaneously, I would, though, say that with the cold rolling investment, potentially it does again give us more revenue and more margin, and that in itself is already very, very important, which the hot rolling investment would not have given us in the same magnitude. Okay, thanks. And then maybe the second one about this potential cold rolling investment. So, talking about timing and maybe if you're planning to match your hot rolling capacity or what kind of initial plans you have at this point. Anything to comment here? Right. So obviously, we have been applying for the air permit. That process is very far away. We hope to be able to get that soon. We need that for both. So that's sort of one thing that hopefully will be resolved here in the not-too-distant future. And then secondly, with respect to cold rolling, we have already started the work on a feasibility study there, and I hope that now with this hot rolling agreement, so to speak, settled, we will accelerate our work and really focus all of our energy on figuring out how to move forward with the cold rolling. So I cannot give you a definite date, but I can confirm that we will definitely accelerate the work, you know, starting, so to speak, Monday morning. Okay, thanks. I'll get back in the queue. The next question comes from Tristan Gresser from BNP Paribas Exane. Please go ahead. Yes, hi, thank you for organizing the call, and thank you for taking my questions. The first one is really on the strategy and a little bit on the timing. I mean, we spoke maybe earlier in the month, and you seemed pretty sure that the final decision regarding this investment would not be in 2023. So I'm curious to understand, you know, what has changed since early November. Is it something new in the feasibility study that you saw? Or really, what has changed since three weeks ago? Hi, Tristan. Hi. Maybe I can at least start here, and perhaps Heikki still wants to fill something in. I think it's really... I mean, there's a number of things coming together here. I mean, obviously, our own work on our feasibility study has continued full speed, but I think I can safely say that there was no, like, you know, big surprise or big event happening. As you know, on the feasibility, we still had, you know, a few really important things that we wanted to complete towards the end of the year or early next year. However, you know, that's not really that -- that's no, no negative surprises on that side. But if we look holistically at the situation and take in then, the discussion and the dialogue that we have had on the tolling agreement, I think we now arrived to a situation where, you know, the timing was right to take the, to take the decision. I don't know, Heikki, if you wanna add something. No, always we have done. I think we've done our homework really carefully. We've assessed all options. We've given a lot of consideration to different ways forward, and like always, a process like this, and I'm now referring to the negotiations with AM/NS, they take their own time. But personally, I feel that the outcome is good. We have a good partner, and I'm very pleased with the outcome, and I hope that the other our partner is also satisfied. At least, I hope so. Okay. No, that's, that's very clear. And talking a little bit about the normalized EBITDA, first, what are the underlying assumptions there in terms of volumes and mix? And if it's possible, if this has changed versus prior, the 200-170? Thanks, Tristan. The main change that has occurred is that now we have concluded on this tolling agreement. I mean, obviously, the previous information that we gave about normalized EBITDA, you know, we were still in the previous agreement period, and it was, you know, on that premise. And really, you know, if we look further into the future, I don't think that our view, for example, about the market in Americas or about our other ability to produce or to make result has really changed. So what has changed now is that we have concluded on this agreement, and we wanted just to clearly communicate impacts. Okay. And in terms of volumes there, is it 650-700,000 tons a year kind of a good range? I think it sounds like a feasible range, per se. Yes, Tristan. Okay. No, that's, that's helpful. And maybe a last question and jump back on the queue. When you talked about the hot rolling investment, you mentioned the scale and the size of, you know, such type of investment. If we look at, you know, CRC in line, and it feels like, if your capacity is 600, you adding 800,000 tons, you can do maybe 200 a line. For that type of typical line, is it fair to have in mind an investment of a range of $300 million? Is that the right way to think about it? Yeah, Tristan, I mean, obviously, our work has not progressed that far, that I could really give an assessment of, let's say, our investment. But obviously, we've looked at sort of a range of investments that have been done, and I don't think... I mean, usually you are very savvy, so, you know, I think you are probably approaching, you know, kind of examples that we could find, or other cases. But we do need to come back with more clarity once our own work has progressed more. So I expect that to take still a little bit of time before we can really talk more in details. Okay. Thanks. Thanks a lot. The next question comes from Ioannis Masvoulas from Morgan Stanley. Please go ahead. Hello, thank you very much for the call. Couple of questions from our side. The first one is around capital deployment around phase three. Up until now, the focus has been on what to do with U.S. cold hot rolling side of the business. We have better visibility on that prospect now. What does it mean in terms of capital deployment under phase three in Europe? Are you looking to potentially accelerate investments towards European competitiveness, or is the focus pretty much still on cold rolling in the U.S. and Europe is comes up on later stage potentially? I would say, well, first of all, I want to thank you for your question. If you just look at the demand picture for the coming years and you look at macroeconomy, you look at geopolitics, I mean, you look at the U.S. through different lenses, it is as I said before, I think it's the go-to place at the moment. And we're very fortunate that we have Calvert and we have Mexico, and, and it really puts us in an extremely good position, you know, from the standpoint of geographic positioning. So that is really our priority. But with respect to, to Europe, as, as when we talk about competitiveness, this is very much in Europe at the moment, it's very much a cost game, as you know. The European market is a tough place to be at the moment, and so any investments, if we were to make them, they really relate more to making us more cost competitive. And, you know, we now have the energy efficiency program underway. We are allocating capital into that. That, of course, helps us to save money and cut costs. But then also on top of that, of course, we still have to solve how we are going to, you know, reduce CO2 emissions, specifically, in our Finnish assets, which are the area where we have the biggest CO2 amount. So that's another area that will be high on our focus area for the next few years. And then going further into, deeper into phase three, so we'll just have to come back when we have more clarity on that. That's very clear. Thank you. The second question, again, with this decision yesterday, even if you go ahead with the cold rolling expansion, it's still gonna cost maybe one-third of what you were looking to spend on the hot rolling side. How should we think about net debt target going forward? In the past, you talked about potentially having a net cash buffer. How are you thinking about this sort of target in today's environment? Are you willing to get the balance sheet back to a much more conservative position, or are you there today in terms of being close to a net neutral on a debt basis? Thank you. Thank you, and hi, Ioannis. So obviously, we are preparing for phase three here also in terms of making sure that our balance sheet is strong. And I think we need to acknowledge that you know, during a growth phase, there might be some periods where it can be beneficial to increase the debt to a maximum of a leverage of one. But probably that is more sort of driven by you know, timing issues, et cetera. So I do believe that while having you know, a very strong balance sheet, it's fundamentally important so that we also can maintain our ability to pay the dividend also when cyclically the business is slower, because we know this is a cyclical industry. So I think we are leaning towards this very sort of conservative approach. Now, really having a cash buffer or not, I mean, I think this position where we are right now, where we virtually have no net debt, it's really good. But, you know, a company always needs, you know, some gross debt and then some just really line of cash available, for not only everyday needs, but, but yes, just with sort of a few, a tactical time period, in mind. So at this point in time, obviously, where we need to have our minds is that we have the convertible bond, that is due in July 2025, and now with this share buyback program, we are making good progress towards already having those shares, in our hands. This will not completely take us there, but it, but, but then after this program, about 10 million more shares remain to be there. So that's just another perspective to also keep in mind that our gross debt will reduce, then with that step as well. Very clear. Thank you very much. The next question comes from Andrew Jones, from UBS. Please go ahead. Hi, all. Just, just for a bit of background, can you give us an idea for what typical, you know, hot rolling costs are per ton for, you know, in the, in the U.S. broadly? Because, I mean, if it's all about the change in the contract, you know, that tolling cost seems to have gone up by, my calculation, about $43 a ton. I mean, it's a pretty big increase based on the sort of cost I would have thought was, doable. I mean, were there any... Aside from building your own mill, I mean, realistically, were there any sites anywhere near, you know, your asset where, you know, there could have been a viable alternative? Or, like, can you just talk us through what the sort of typical economics are of those sort of hot rolling mills and what the potential alternatives might have been in that scenario? Right. Hey, Andrew, thanks for the questions and the interest, and I think the difficulty in assessing what, when you ask for what would typically be a sort of a cost level for hot rolling, it is really that the, you know, assets and, you know, come in, in different forms and shapes, and some are really old and some are new, and, you know, there's a kind of a, a range of alternatives, available and, you know. But if we look at, some of our best assets, I do think it's, you know, if, if you have sort of depreciated everything already years back and, and you are sort of only running it, of course, then you might get into some sort of double-digit figure, per ton. But if you really count in capital costs and, and the whole lot, I mean, you easily, hike that, hike that figure from there. So I think there is a fairly broad range, even when you do it in-house. And, and obviously, energy costs would also play in quite a lot. So at what energy cost are you then able to, to perform? So I, I think, you know, holistically, if I, if I try to make the assessment, I mean, when we, when we were doing our investment plans, preparing the business case was something that we were still kind of in the finalization phase of. So we have not published, our own estimates, nor will we do it now, because we are, we are with this decision, of course, not continuing with the, with the investment. But I think, you know, just assessing the overall situation and also counting in the capital costs, I think that we have clearly arrived at the beneficial solution for us. Okay. Fair enough. Thank you. The next question comes from Tom Zhang from Barclays. Please go ahead. Yeah, hi. Hi, Pia. Just two very quick questions from me. The first one, with the new tolling arrangement, does it kick in immediately? And so we should expect sort of a low single-digit million impact already in Q4. And I believe that the previous rolling contract, there was a fixed volume of at least 712,000 tons that you had to take. Are those clauses still in effect with the new tolling arrangement? Thanks. Yeah. Hey, thanks, Tom. Yeah, sorry, there was a bit of background noise, but I think your first question was about, you know, when is this starting? And I think, I mean, it's like starting immediately or, like, first of January. So, I mean, we are really. It will be active then. And then, when you ask that, you know, will this impact then be for our profitability, then it will also start from 2024. So from, like, first of January 2024. I hope that answered your question. Please repeat if there was something else. I didn't hear anything else. Yeah, that's perfect. And sorry, the second half of the question was, I believe in the previous arrangement, there was a set volume of 712,000 tons that you had to take every year, so a fixed volume. Is that still, still in effect with the new contract? I think there's a, you know, a number of sort of more detailed things that we have really chosen not to disclose. But it is typical in contracts, of course, that you have sort of, you know, certain volumes, volume commitments or volume hurdles. But I think that's a detail that we will not disclose the exact nature of that. Okay, fair enough. Thanks very much. The next question comes from Krishan Agarwal from Citigroup. Please go ahead. Hi, and thanks a lot for taking my question. Most of them have been asked. I have two. In terms of assessing the timelines, I mean, is this 2051 a kind of a firm year, as in you have the visibility for next 25 years? Or in other words, what is the latest time either the party can, you know, bring back other party on the negotiation table in terms of giving the notice? So just trying to understand the timeline a little better on this contract. So the timeline is fairly straightforward. It is 20 years. So from where we are today, 20 years from now, either party could discontinue, and the termination period would start four years prior to... So in 16 years' time, at the earliest, can you terminate, then you have four-year termination period, and then 20 years from now, it would discontinue. That's the shortest or let's say least... That's the shortest time. But, but I said we have developed the partnership with the intent that this is a longer-term partnership and, and with the extent of even deepening, you know, the collaboration on site so that, you know, both, both parties feel that it's going as seamlessly and smoothly as possible. Yeah, yeah, I understand. And then, one more little bit push on the, you know, dividend policy. So stable and the growing dividend, kind of a very generous policy. So most of the, you know, analysts are forecasting a net cash position, slightly bigger than what you had in the Q3. So what additional requirements should be met for you to go with the, with the special dividend you had last year? Or should we be in the expectation that EUR 0.25 is the bare minimum, and then probably there will be some kind of a consideration to be given, depending on the other situation? So how do you think about the additional dividend? Right. Krishan, thanks for that question. I think given the, you know, that we just launched now a share buyback and also with the clear message that it, you know, we have the convertible, you know, maturing in July 2025, I think the share buyback as, let's say, an additional instrument is sort of well called for. However, when it comes to the dividend, what we have committed to is the stable and growing dividend out of this starting point of the base dividend of 0.25 EUR. And that's really where I would position my answer now. Okay. Okay, understand. Then a quick clarification. I mean, the strengthening the core phase category was EUR 600 million, but I guess you're running slightly behind that CapEx target. Can you confirm that the Kemi mine CapEx is finished, and then remaining of the CapEx, you are free to allocate to some other businesses? I can confirm that Kemi mine has been. We had a nice inauguration event as well, and you know, operations are running successfully there. So we are all set, and that's not impacting the future CapEx cash flow. Of course, we have some kind of regular CapEx into Kemi mine, but not the deep mine, not the strategic project. So we are free to allocate cash and normally, you know, I give a round figure of EUR 100 million for maintenance type of CapEx. Of course, in a very tight situation, that might still shift a little bit downwards. Okay. But it means that we also have money in this phase two, towards our strategic priorities in this strengthening the core phase. Understood. Thanks a lot. That's informative. The next question comes from Anssi Raussi from SEB. Please go ahead. Yes, thanks for taking my follow-ups. I have a couple of quick ones, actually. First of all, you mentioned this $30 million normalized EBITDA run rate, decline of $30 million. Can you remind us what kind of capacity or production numbers you're estimating here when you talk about normalized EBITDA? Is it based on the lower end of this capacity range, or is it average, or this 900 kilotons, or what kind of production numbers we are talking about here? Anssi, thank you. Thanks. Thank you. And I think this is back to the CMD that we had back in 2022 even, and at that time, we didn't make kind of specific numbers available, but we said that it was kind of coming back to more historical averages when it comes to pricing, costs, as well as then the production. And then we counted in that we had made some strategic improvements, such as cost reductions in our phase one strategy. So that was sort of the setup, so that's why I think this, this is now a bit top of my head, but this volume 650, 700, you know, it's more in that range because we need to look at a bit sort of backwards that, you know, what have we typically been able to do. Okay, clear. And then the second one about your negotiations with AM/NS. So how long you've been actually negotiating with them, and or was it like a quicker process, or have you had two tracks to say here? Well, of course, we have a continued dialogue with our partner on, on location. I would just say that we have been working on the feasibility of the hot rolling for some, quite some time, as we mentioned in the Q3, and, yes, this took some time. It was, it was... As always, I said in the beginning, both parties, of course, have their own needs, and, and it takes some time to achieve, you know, a good solution, and I'm very happy with the outcome, and I hope that the other party, our partner, I hope, is also, pleased. We look forward to a very good long-term collaboration in Calvert. Okay, thanks. That's all from me. There are no more questions at this time, so I hand the conference back to the speakers. So thank you. I just wanted to briefly finish off by saying that, as I said, I think we're, we're making good progress on our journey, on phase two, and we've now laid out already some initial ideas on, on phase three. I'm. As I said, I'm very happy with the outcome of the hot rolling, hot rolling agreement, and it sets us up for faster growth, in North America. And we will then come at, back at the appropriate time when we have our, our plans ready on, on what we do. And as I said, it also gives us some financial flexibility to look at the other areas, European growth, value chain, and sustainability topics, which of course, are for us, very, very important. So, so with those words, unless Pia has anything to add, no? I thank all of you, wish you a very happy holiday season, and we look forward to seeing you again in early February. Thank you very much.