Outokumpu targets 250 million euro earnings improvement in 2026-2030

By Jagoda Darlak and Elviira Luoma

(Reuters) -Finnish stainless steel maker Outokumpu is targeting long-term earnings improvement of 250 million euros ($285 million) for 2026-2030, it said ahead of its investor day on Wednesday.

The company, which produces stainless steel from recycled stainless scrap, said its new strategy will prioritise growth investments and expansion into markets that are "less cyclical".

Outokumpu said it plans to invest about 200 million euros in a new annealing and pickling line in Tornio, Finland, and to close two less competitive lines in Krefeld, Germany.

The new set-up will generate annual earnings before interest, taxes, depreciation and amortisation (EBITDA) improvements of 70 million euros through the period, Outokumpu said, part of the 250 million EBITDA improvement.

The closure of the lines will result in about 150 to 200 job cuts, finance chief Marc-Simon Schaar said in an interview with Reuters.

The Tornio investment is expected to start in 2026 and most of the savings will come in 2027 and 2028, he said.

The group said it would invest about 100 million euros annually in what it calls its "foundational businesses" to fund more high-value investments elsewhere.

The "transformative" part of the strategy aims to target high-value growth opportunities with a minimum internal rate of return of 20%, the company said.

That includes expansion into the global advanced materials and alloys market, assessment of growth opportunities beyond standard stainless steel in the U.S and investing in a new technology within its ferrochrome business.

Outokumpu has initiated a feasibility study for potential investments in its Avesta, Sweden melt shop to expand its high-nickel alloys capabilities.

The Finnish group is targeting a net debt to EBITDA ratio, an important gauge of a company's financial health, of 1.0x during the same period. It aims to pay a "stable and growing" dividend over time.

($1 = 0.8760 euros)

(Reporting by Jagoda Darlak and Elviira Luoma, editing by Matt Scuffham)