Outokumpu published its new strategy on November 5, 2020 to strengthen its balance sheet in the shorter term and de-risk the company for strong returns in the long run. 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.
Materials on strategy
Strategy and Q3 webcast recording (the strategy presentation begins at about an hour into the webcast)
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. The new financial targets, EUR 200 million EBITDA run-rate improvement and net debt to EBITDA of below 3.0x by the end of 2022, are fully based on self-help improvement actions.
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