The new strategy includes three phases with each phase requiring strong and diligent execution and focus, creating the foundation for the next phase. Deleveraging the balance sheet will continue throughout all three phases. Ultimately, our vision is to be customer’s first choice in sustainable stainless steel.
First-phase of the strategy
In the first phase of the strategy, during 2021–2022, Outokumpu will prioritize de-risking the company through margin improvement, cash flow management and deleveraging the balance sheet. When Outokumpu launched a new strategy in November 2020, the company set financial targets by the end of 2022 to improve EBITDA run-rate by EUR 200 million and to reduce the net debt to EBITDA ratio to below 3.0.
The company has made strong progress in its strategy execution, and in November 2021, Outokumpu announced that with a commitment to continue de-risking the company by the end of 2022, we will increase our initial EBITDA run-rate improvement target from EUR 200 million to EUR 250 million. Deleveraging also continues through the first phase of the strategy beyond the initial leverage target. Read more on the stock exchange release.
To reach these targets, the strategy is centered on strict cost and capital discipline, strong customer engagement and a lean, delayered organization.
In our core businesses stainless steel and ferrochrome, the strategic focus will be on increased market penetration, enhancing our product mix, growing in selected segments and leveraging our leadership in specialty grades. Long Products business is undergoing an accelerated turnaround to develop the business internally.
Following phases of strategy
The following two phases of the strategy will focus on targeted investments in productivity, sustainability and value-adding growth, and the targets will be communicated at a later stage.
“There is great value in the company, and we will unlock it with a clear strategy and determined implementation. Outokumpu has a solid foundation and is the industry leader in sustainability as well as in specialty grades. Our customers see us as their preferred partner. We have an experienced team and world-class, stable operations with a strong culture for continuous improvement. Outokumpu’s leadership is fully committed to the strategy.”
CEO Heikki Malinen
Updated November 4, 2021