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HELSINKI, June 16, 2022 /PRNewswire/ -- Outokumpu has successfully completed the first phase of the strategy with a strong focus on de-risking the company and strengthening the balance sheet. The first phase of the three-phase strategy was focused on three key priorities: Commercial Excellence, Cost and Capital Discipline and Lean and Agile Organization. The company has made significant progress in all areas and strategy execution has proceeded ahead of plans. Outokumpu has already achieved both its financial targets, EUR 250 million EBITDA run-rate improvement and net debt to EBITDA ratio to below 3.0. Strong performance and diligent strategy execution in the first phase provide a solid foundation for the second phase until 2025.
Says CEO Heikki Malinen: "I am very proud that we have made such strong progress with our strategy execution in the first phase and succeeded in de-risking the company. As a result, Outokumpu's resilience has improved significantly, which provides a strong foundation going forward in all market conditions. In the second phase the focus is to strengthen the core. We will continue our strong emphasis on sustainability to further improve Outokumpu's position as the sustainability leader in the stainless steel sector. We are targeting a significant CO2 emission reduction, and there will be a strong focus on sustainable sourcing as well as diversity, equity, and inclusion, to name some of the focus areas. In the second phase, we will also make targeted investments on productivity and sustainability and focus on customer-focused steering."
Key strategic priorities, business area targets and related changes in the leadership team in the second phase of strategy
While in the first phase of the strategy the aim was to de-risk the company, the second phase will be about strengthening the core. The second phase will focus on three key priorities: sustainability, growth from productivity and customer-focused steering. As part of the company's ambitious sustainability journey, Outokumpu aims to reduce its CO2 emissions by 14% by the end of 2025 compared to the 2021 level, in line with its SBTi 1.5- degree climate target. Also, capital discipline and strong shareholder returns will be at the core of the company's long-term strategy going forwards.
For the second phase of the strategy, Outokumpu has launched two customer differentiated strategies for business area Europe. The company aims to strengthen cost leadership in high-volume stainless steel products and a global market leadership in advanced products. Business area Europe will strengthen its position as the customer's first choice in sustainable stainless steel, while in business area Americas the focus will be on sustaining the high profitability levels. At the core of business area Ferrochrome's strategy is carbon neutrality.
President and CEO Heikki Malinen continues to lead the business area Europe. To ensure the execution of the differentiated strategies in Europe, Outokumpu appoints Niklas Wass as President – business line, Stainless Europe to lead high-volume stainless steel products and Thomas Anstots as President – business line, Advanced Materials to lead advanced products. Otherwise, the responsibilities in the Outokumpu leadership team remain unchanged.
Updated financial targets for the second phase
Outokumpu has updated its financial targets for the second phase of the strategy to reflect capital allocation priorities. The focus will be increasingly on strong shareholder returns:
Net debt to EBITDA <1.0 in normal market conditions
EBITDA run-rate improvement of EUR 200 million
EUR 600 million of capital expenditure for the coming three years
Stable and growing dividend
Says CEO Heikki Malinen: "We have been putting a lot of effort into our strategy work throughout the organization. The hard work has paid off and now we have a firm and sustainable strategic plan in place to take this company forward following the successful first phase of de-risking. Outokumpu's leadership team is fully committed to the strategy, and I am extremely proud to talk about our updated objectives for the second phase. We have a strong performance culture, and this really is a company of great people – I am fully convinced that our talented and hard-working teams will continue to deliver good value to our customers and strong results to our shareholders going forward."
Outokumpu will arrange a Capital Markets Day 2022 webcast and conference call today, June 16, 2022, at 10.00 am EEST (8.00 am CEST).
To join our Capital Markets Day, please follow the live webcast at https://outokumpu.videosync.fi/cmd-2022
To dial in for the conference call, please use the following numbers:
Finland: +358 9 8171 0310
United Kingdom: +44 33 3300 0804
United States: +1 631 9131 422
For more information:
Investors: Linda Häkkilä, Head of Investor Relations, tel. +358 40 071 9669
Media: Päivi Allenius, VP, Communications, tel. +358 40 753 7374
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SOURCE Outokumpu Oyj