Outokumpu Corporation
Stock exchange release
June 10, 2025, at 19:00 EEST
Outokumpu announces its new strategy, EVOLVE, to drive growth and shareholder
value, with updated financial targets and dividend policy
Outokumpu announces its new growth-focused strategy for 2026-2030. The company
will further sharpen its strategic execution by classifying businesses in order
to allocate investments within the group as either foundational or
transformative - clarifying strategic roles and priorities to support long-term
value creation.
The company will leverage its competitive advantages and improve resilience to
cyclicality by building a stronger portfolio and differentiating into
transformative areas. Outokumpu aims to expand through targeted organic
investments in higher-growth, higher-margin, and less cyclical markets. In
addition, the company will explore selective inorganic opportunities where there
is strong strategic alignment and clear value creation potential.
As part of the new strategy, Outokumpu targets to increase its value by
· Driving cost competitiveness and cash generation in sustainable stainless
steel
· Growing profitably in advanced materials and alloys
· Revolutionizing value creation with innovative materials and technologies
Outokumpu has a solid financial position, geographically diversified assets and
strong market positions in both Europe and the Americas. The company operates
the only chrome mine within the EU area, which serves as the backbone for
ferrochrome production and other value-added products. Over recent years,
Outokumpu has significantly strengthened its through-the-cycle performance and
now holds the strongest balance sheet in the industry. Combined with its
sustainability leadership and secure access to critical raw materials, these
advantages provide a robust foundation for future growth and long-term value
creation.
Foundational
Outokumpu is taking targeted actions to improve the performance of its
sustainable stainless steel operations in Europe and the Americas, aiming to
enhance competitiveness, resilience, and cash flow over the cycle. The role of
foundational businesses is to provide cash for growth in other areas. Therefore,
capital expenditure will be limited to maintenance and mandatory and targeted
investments into competitiveness and smart decarbonization with an internal rate
of return (IRR) threshold of 15%. The enablers for the foundational businesses
are continuous focus on cost competitiveness, leveraging sustainability
leadership and securing supply of critical raw materials.
In business area Europe, Outokumpu is optimizing its operational footprint and
enhancing production capabilities. The company plans to invest approximately EUR
200 million in a new annealing and pickling line in Tornio, Finland. At the same
time, it intends to close two less competitive lines in Krefeld, Germany. Once
the new line is operational, this set-up would generate annual EBITDA
improvements in a magnitude of EUR 70 million through the cycle. The aim is to
maximize the benefits from the fully integrated, cost-efficient operations in
Tornio, Finland and further leverage the long-term structural advantage of clean
and price competitive energy in the Nordics to reach cost savings and strengthen
Outokumpu's competitiveness in Europe. Due to the various cost efficiency
improvement initiatives in business area Europe, Outokumpu will record in the
second quarter of 2025 an adjustment item of approximately EUR 35 million
related to a restructuring provision and asset impairments. The cash flow impact
is approximately EUR 25 million for years 2025-2028.
In business area Americas, the focus is on strengthening capabilities and
competitiveness through operational efficiency, a focused commercial strategy,
and disciplined investments.
Transformative
In the transformative part of the new strategy, Outokumpu aims to unlock high
-value growth opportunities with a targeted minimum internal rate of return
(IRR) of 20%. The aim is to expand into higher-growth, higher-margin, and less
cyclical markets, in which Outokumpu has a unique position to win. Outokumpu has
identified three transformative areas.
The global advanced materials and alloys market shows a strong growth potential.
Outokumpu has started a feasibility study to assess a potential investment in
its melt shop in Avesta, Sweden to enable further expansion into high-nickel
alloys. Simultaneously, the company is also exploring inorganic options to grow
within this area.
The U.S. market remains attractive in the long-term and Outokumpu continues to
study further growth opportunities beyond standard stainless steel.
Within business area Ferrochrome, Outokumpu is increasing value from its chrome
mine and repositioning from an internal supplier to an unrestricted market
player. As a low-emission ferrochrome producer and the owner of the only chrome
mine in the EU area, the company aims to further leverage its distinctive
position. The unique geopolitical position provides significant value creation
possibilities accelerated by innovation to create new value streams.
As part of the transformative initiatives, Outokumpu is capitalizing on
proprietary technology to produce low-CO₂ metals and its own chrome mine offers
the ideal launchpad. The company aims to establish a platform for premium
products, first focusing on chromium materials, including enriched ferrochrome
and high-purity chromium metal. Through this, Outokumpu is entering the high
-grade ferrochrome market with a significant price premium. The company is
unlocking value through innovation, supported by a technology platform that is
also scalable to other strategic metals within the stainless steel value chain -
and potentially beyond.
Financial targets and capital allocation
Outokumpu is committed to retaining a healthy balance sheet. The company's
strategic priorities - balancing resilience, growth, and dividends - will guide
capital allocation, resulting in competitive total shareholder returns.
Capital allocation priorities
· Operational health: mandatory and maintenance capital expenditure
· Competitiveness and smart decarbonization capital expenditure
· Transformative capital expenditure and mergers and acquisitions (M&A)
· Dividend
· Share buybacks
Financial targets for 2026-2030
· Net debt to EBITDA ratio of 1.0x with disciplined financial flexibility to
support strategic investments and manage cyclical market conditions, allowing it
to only temporarily exceed 2.0x
· EBITDA run-rate improvement of EUR 250 million through foundational
initiatives
Dividend policy
Outokumpu aims to pay a stable and growing dividend over time, while maintaining
the flexibility to invest in transformative initiatives that yield a minimum
internal rate of return (IRR) of 20% and accounting for market cyclicality.
The new strategy, EVOLVE, does not impact Outokumpu's current segment reporting.
Outokumpu will arrange a Capital Markets Day 2025 webcast and conference call
tomorrow, June 11, 2025, at 1.00 pm EEST (11.00 am BST).
To join our Capital Markets Day, please follow the live webcast at
https://outokumpu.events.inderes.com/cmd-2025/register.
To ask questions, please participate in the conference call by registering at
https://events.inderes.com/outokumpu/cmd-2025/dial-in.
After registration you will receive a phone number and a conference ID to access
the conference call. If you wish to ask a question, please dial *5 on your
telephone keypad to enter the queue.
For more information:
Investors: Linda Häkkilä, Head of Investor Relations, tel. +358 400 719 669
Media: Päivi Allenius, SVP - Communications and Brand, tel. +358 40 753 7374, or
Outokumpu media desk, tel. +358 40 351 9840, e-mail media(at)outokumpu.com
Outokumpu is accelerating the green transition as the global leader in
sustainable stainless steel. Our business is based on the circular economy: our
products are made from 95% recycled materials, which we then turn into fully
recyclable stainless steel. This steel is utilized in various applications
across society, including infrastructure, mobility, and household appliances. We
are committed to 1.5°C target to mitigate climate change, and with up to 75%
lower carbon footprint than the industry average, we support our customers to
reduce their emissions. Together, we are working towards a world that lasts
forever. Outokumpu Corporation employs approximately 8,700 professionals in
close to 30 countries, with headquarters in Helsinki, Finland and shares listed
in Nasdaq Helsinki. Read more: www.outokumpu.com