Outokumpu's annual accounts 2008 - loss-making ...

PRESS RELEASE
February 3, 2009 at 13.10 pm

Year 2008 highlights
- Operating profit EUR -63 million, underlying operational result
positive some EUR 305 million
- Strong operating cash flow EUR 656 million, gearing 38%
- Dividend proposal EUR 0.50 per share (2007: EUR 1.20)

Fourth quarter 2008 highlights
- Operating profit EUR -271 million, underlying operational result
some EUR -69 million
- Good operating cash flow at EUR 205 million
- Actions taken to improve profitability and cash flow


Group key figures, EUR million
                                             IV/08 IV/07 2008  2007
Sales                                          966 1 465 5 474 6 913
Operating profit                              -271    15   -63   589
Profit before taxes                           -298     7  -134   798
Net profit for the period                     -233   -16  -189   641
Earnings per share, EUR                      -1.30 -0.09 -1.05  3.52
Net cash generated from operating activities   205   299   656   676

Stainless steel deliveries, 1000 tons          261   352 1 423 1 419
Stainless steel base price, EUR/t 1)         1 045 1 058 1 185 1 304
Stainless steel transaction price, EUR/t     2 338 2 997 2 801 3 828
















1)  CRU: German base price (2mm cold rolled 304 sheet)

2008 was a year of two extremes in the stainless steel industry. The
year started with healthy demand in the first half of the year. In
early summer most raw material prices, especially the nickel price,
started to decline. Consequently, the stainless steel markets became
softer as steel distributors started to postpone their purchases.
During the autumn the global economic crisis reduced the demand of
stainless steel at an accelerated pace and raw material prices
continued to slide. Towards the end of the year the market conditions
turned very difficult and all stainless suppliers cut production
heavily. Demand was lower in all end-use segments of stainless steel
as construction and investment activity slowed down. Credit
constraints affected both end-use customers and distributors.

Outokumpu's deliveries of stainless steel in 2008 were at the same
level as in 2007 at about 1.4 million tons. Base prices declined on
average by 9% and transaction prices, which also include raw material
costs, dropped by 27%, mainly due to the 43% fall in nickel price
during 2008. As a result, Outokumpu's sales declined by 21% to EUR 5
474 million in 2008. Outokumpu's profits turned to a loss in 2008 due
to clearly lower base prices and somewhat higher costs in 2008.
Operating loss totaled EUR 63 million whereas in 2007 Outokumpu
recorded an operating profit of EUR 589 million. The underlying
operational result, which excludes raw material-related inventory
losses and non-recurring costs was some EUR 305 million positive
(2007: some EUR 800 million positive). In 2007 Outokumpu's profit
before taxes was boosted by non-recurring gains from the sale of
shares in Outotec Oyj (EUR 142 million) and from the Talvivaara
transaction (EUR 110 million).

Outokumpu's fourth quarter 2008 was clearly weaker than the year
before. Deliveries fell by 26% and transaction prices by 22%
resulting in 34% decline in Group sales. Operating profit turned to a
substantial loss of EUR 271 million, which includes raw material
related inventory losses of about EUR 185 million. Underlying
operational result was EUR 69 million negative (2007: EUR 115 million
positive).

Outokumpu's cash flow from operations was strong at EUR 656 million
in 2008, almost at the same level as in 2007 (EUR 676 million).
Despite lower profitability strong cash generation was achieved as
the decline in metal prices released cash from working capital.
Outokumpu's balance sheet remains strong with gearing of 38%. The
Board of Directors proposes a dividend of EUR 0.50 per share for 2008
(2007: EUR 1.20 per share).

Outokumpu expects the stainless steel markets to remain very weak in
the first quarter of 2009. Current order intake represents about 50
percent of the Group's full production capacity. In the first
quarter, Outokumpu's operating profit continues to be significantly
negative due to low base price level, low delivery volumes and raw
material-related inventory losses. However, Outokumpu's financial and
liquidity position remains strong.

Outokumpu has taken a number of actions to respond to the difficult
market conditions. The actions include cost-saving initiatives,
personnel adjustments, working capital reduction and postponement of
investments.

CEO Juha Rantanen:

"In late 2008, the global financial crisis hit the stainless steel
markets with speed and power. As we did not reach our profitability
target, we cannot be satisfied with our financial performance in
2008. Actions have been taken to decrease working capital, postpone
investments and reduce costs. Unfortunately, this also means that
personnel adjustments are necessary. A challenging year lies ahead,
but we are prepared to take decisive action and move quickly, when
this is called for. Maximizing cash flow remains high on our agenda."

This press release is a summary of Outokumpu's Annual Accounts 2008
statement.

For further information, please contact:

Päivi Lindqvist, SVP - Communications and IR
tel. [phone], mobile [phone]
[e-mail]

Ingela Ulfves, VP - Investor Relations and Financial Communications
tel. [phone], mobile [phone]
[e-mail]

Esa Lager, CFO
tel [phone]
[e-mail]

News conference and live webcast today

A combined news conference, conference call and live webcast
concerning the annual accounts 2008 will be held on February 3, 2009
at 3.00 pm Finnish time (8.00 am US EST, 1.00 pm UK time, 2.00 pm
CET) at Hotel Kämp, conference room Akseli Gallen-Kallela,
Pohjoisesplanadi 29, 00100 Helsinki, Finland.

To participate via a conference call, please dial in 5-10 minutes
before the beginning of the event:

UK:                               [phone]
US & Canada:   [phone]
Sweden:                        [phone]
Password                      Outokumpu

OUTOKUMPU OYJ
Corporate Management
Ingela Ulfves
VP - Investor Relations and Financial Communications
tel. + 358 9 421 2438, mobile [phone], fax [phone]
[e-mail]
www.outokumpu.com


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