Outokumpu’s Restructuring Moves in Germany: Strengthening Global Advanced Materials Leadership

Outokumpu’s Restructuring Moves in Germany: Strengthening Global Advanced Materials Leadership

(IN BRIEF) Outokumpu, a global leader in advanced materials, has unveiled plans for restructuring measures in Germany as part of its strategy to enhance competitiveness and maintain a strong position in the global market for advanced materials. The company aims to optimize its assets and streamline operations in response to the current challenging market conditions. The proposed measures include centralizing advanced materials production in Germany, specifically focusing on Dillenburg. This entails the transfer of precision strip operations from Dahlerbrück to Dillenburg and the closure of the coil service center in Hockenheim, with plans to shift volumes to other locations. These changes are expected to impact nearly 200 employees in Germany, and negotiations with employee representatives will be conducted in accordance with local laws. Outokumpu anticipates yearly savings of approximately EUR 15 million and plans to record adjustment items and expenses related to the restructuring in the fourth quarter of 2023. The company also intends to invest approximately EUR 20 million in machinery in Dillenburg as part of the precision strip production transfer, with these investments slated for realization in 2024. The closure of Hockenheim and Dahlerbrück is planned for completion by the end of the second quarter of 2024 and the end of 2024, respectively.

(PRESS RELEASE) HELSINKI, 7-NOV-2023 — /EuropaWire/ — In the second phase of the strategy, Outokumpu strengthens the core of the company and aims to make the most of the current assets. Now, in the weakened market environment, there is a need to take prompt actions to secure competitiveness in Europe while strengthening Outokumpu’s global market leadership in advanced materials.

Consequently, Outokumpu aims to streamline its operations in Germany and plans restructuring measures to utilize its assets the most efficient way. These measures would include centralizing advanced materials production in Germany fully to Dillenburg. In practice this would mean that precision strip operations would be transferred from Dahlerbrück to Dillenburg. Simultaneously, Outokumpu plans to close its coil service center in Hockenheim and intends to transfer the volumes to other sites.

“We are a global leader in advanced materials, and we want to further strengthen this position. Centralizing the expertise, product portfolio and operations under one roof in Dillenburg would allow us to expand our product portfolio and to reposition the site as the core value creator within our Advanced Materials business line alongside our mills in Sweden. Following the possible change, Dillenburg would be able to offer the full spectrum of our advanced materials products from a wide range of standard and specialty stainless steel grades with varied surfaces to the thinnest of gauges in precision strip,” says Thomas Anstots, President, Advanced Materials business line.

The planned restructuring measures are expected to impact close to 200 people in Germany. Outokumpu intends to commence negotiations with employee representatives in Germany in full respect of local legislation and practices.

“During the negotiations, we hope to reach a mutual understanding with our employees while we aim to strengthen our European competitiveness in the long run. Outokumpu will do its utmost to seek opportunities inside and outside the group for our employees in Dahlerbrück and Hockenheim and work together with the employee representatives to agree on a social plan,” says Thomas Anstots.

The possible closure of Hockenheim is planned to be completed earliest by the end of the second quarter in 2024 and Dahlerbrück earliest by the end of 2024.

The restructuring measures would entail yearly savings of approximately EUR 15 million. Outokumpu will record in the fourth-quarter 2023 EBIT an adjustment item of approximately EUR 30 million related to asset impairments connected to the planned closures as well as costs relating to the possible personnel measures and restructuring expenses. In 2023, there will not be a cash-flow impact.

Furthermore, the planned transfer of the precision strip production from Dahlerbrück would also involve small investments in the machinery in Dillenburg. In total, the transfer-related investments and costs are expected to amount to approximately EUR 20 million and these are expected to be realized during the year 2024.

Media Contact:

Investors:
Linda Häkkilä
Head of Investor Relations
tel.: +358 400 719 669

Media:
Päivi Allenius
VP – Communications & Brand
tel.: +358 40 753 7374

Outokumpu media desk:
+358 40 351 9840

SOURCE: Outokumpu Oyj