Outokumpu launches EVOLVE strategy with focus on efficiency and long-term value

Outokumpu, the Finnish stainless steel producer, has unveiled a new corporate strategy titled EVOLVE, which sets the direction for the company’s operations and investments through 2030. The strategy is designed to drive sustainable growth, enhance long-term shareholder value, and sharpen the company’s competitive positioning in global markets.

The EVOLVE strategy introduces a dual focus by categorizing Outokumpu’s operations into "foundational" and "transformative" businesses. Foundational units—primarily its core stainless steel operations in Europe and the Americas—will focus on maintaining cost efficiency, boosting cash generation, and improving resilience throughout the business cycle. In contrast, transformative areas will target high-margin, high-growth markets that are less exposed to economic volatility, with an emphasis on innovation and technology-driven value creation.

In Europe, Outokumpu is preparing a EUR 200 million investment in a new annealing and pickling line at its Tornio site in Finland. The move will be paired with the closure of two older production lines in Krefeld, Germany, as part of a broader effort to consolidate operations and improve cost efficiency. The company expects these changes to result in annual EBITDA improvements of approximately EUR 70 million once fully operational. The restructuring will lead to a second-quarter adjustment of EUR 35 million in 2025, with an expected cash flow impact of around EUR 25 million between 2025 and 2028.

Meanwhile, the company’s Americas business will prioritize operational efficiency and disciplined investments to enhance competitiveness. Both regions are considered essential in supporting cash flow and funding Outokumpu’s expansion into new markets.

On the transformative side, the company is looking to scale up its presence in advanced materials and high-performance alloys. A feasibility study is underway for a potential investment in its Avesta facility in Sweden, which could enable the production of high-nickel alloys. Outokumpu is also exploring select acquisition opportunities in this space.

Another key focus lies within the company’s ferrochrome operations. As the operator of the only chrome mine in the EU, Outokumpu is repositioning this business to serve external markets, rather than operating solely as an internal supplier. The company aims to capitalize on its low-emission production methods and geopolitical advantages to develop premium chromium products, including enriched ferrochrome and high-purity chromium metal. These initiatives are supported by a proprietary technology platform and may eventually extend to other metals within the stainless steel value chain.

Financially, the company is targeting a net debt to EBITDA ratio of 1.0x, allowing some flexibility up to 2.0x in response to market conditions. Improvements to foundational operations are expected to contribute EUR 250 million in EBITDA gains over the strategic period.

Outokumpu has also updated its dividend policy to support both consistent shareholder returns and the flexibility to pursue growth opportunities. The company aims to deliver a stable and growing dividend over time, while reserving capital for transformative investments that meet a minimum 20% internal rate of return.

Source and Photo: Outokumpu