Targets and outlook

Outokumpu has set its financial targets for the year-end 2025 and updates its outlook for the next quarter in connection with each interim report. 

Financial targets

Outokumpu has updated its financial targets for the second phase of our strategy, until 2025, 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

 

Outlook for Q3 2022 for continuing operations*

  • Group stainless steel deliveries for continuing operations* in the third quarter are expected to decrease by 10–20% compared to the second quarter.

  •  Prices for stainless steel in the already received orders have remained at a high level.

  • The European ferrochrome benchmark price decreased to USD 1.80/lb for the third quarter.

  • Energy costs are expected to increase in the third quarter and impact especially negatively business area Ferrochrome.

  • Planned maintenance costs in the third quarter are expected to increase by approximately EUR 10 million compared to the second quarter.

  • With current raw material prices, significant raw material-related inventory and metal derivative losses are expected to be realized in the third quarter.

Guidance for Q3 2022

  • Adjusted EBITDA for continuing operations* in the third quarter of 2022 is expected to be lower compared to the second quarter.

    *Continuing operations is excluding the Long Products business units to be divested, which will be classified as assets held for sale, reported and restated as discontinued operations in Q3/2022. Continuing operations represents approximately 90% of Group second-quarter adjusted EBITDA.

     

Dividend policy

Outokumpu updates its dividend policy

The Board of Directors (“the Board”) of Outokumpu Oyj has on June 16, 2022 resolved on a new dividend policy.

According to the new dividend policy Outokumpu aims to distribute a stable and growing dividend, to be paid annually.

 

Dividend policy and payout history

Short-term risks and uncertainties

Outokumpu continues to focus on mitigating its exposure to risks which present uncertainties to its business and operations, including but not limited to: impacts from the COVID-19 pandemic; recently increased energy prices; cyber security and information technology; the risk of business interruption at Outokumpu’s production and distribution locations; delays or failures in Outokumpu’s supply chain, such as impacts from the current tense global supply chain situation, including the shortage of spare parts and logistical challenges; dependencies on certain critical suppliers; overall price and availability of critical raw materials and supplies; the realization of credit losses from customer receivables; liquidity and refinancing risks; changes in the prices of ferrochrome, nickel, electrical power, and CO2 emission allowances; currency developments affecting the euro, US dollar, Swedish krona, and pound sterling; negative impacts on the amount of defined pension benefit assets and liabilities; changes in interest margins applicable to Outokumpu; risks related to the fair value of shareholdings, such as the investment in the Fennovoima project as well as general project and investment implementation risks, including the ongoing project at the Kemi mine.

Possible further adverse changes in the global political and economic environment and their impact on demand for stainless steel including severe and lengthened impacts from the vaccine deployment process, possible new virus variants, and uncertainty surrounding the sustainability of the US economic recovery, the global inflation outlook as well as the environmental-social-governance risk, may all have an impact on Outokumpu’s business and access to financial markets.

 

Updated on February 8, 2022.

Find out more

Read more on our operating environment and long-term outlook, dividends and risk management.

Operating environment
Dividend policy
Risk management