Outokumpu plans restructuring measures in Germany to strengthen competitiveness and market leadership in advanced materials
Outokumpu Oyj
Press release
November 7, 2023 at 8.55 am EET
Outokumpu plans restructuring measures in Germany to strengthen competitiveness and market leadership in advanced materials
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.
For more information:
Investors: Linda Häkkilä, Head of Investor Relations, tel. +358 400 719 669
Media: Päivi Allenius, VP – Communications & Brand, tel. +358 40 753 7374 or Outokumpu media desk, +358 40 351 9840
Outokumpu Oyj
Bright annealed stainless steel production in Outokumpu’s cold-rolling mill in Dillenburg, which currently focuses on surface finishes. After the planned restructuring it would have full advanced materials portfolio.
Outokumpu is the global leader in stainless steel. The foundation of our business is our ability to tailor stainless steel into any form and for almost any purpose. Stainless steel is sustainable, durable and designed to last forever. Our customers use it to create civilization’s basic structures and its most famous landmarks as well as products for households and various industries. Outokumpu employs approximately 8,500 professionals in close to 30 countries, with headquarters in Helsinki, Finland and shares listed in Nasdaq Helsinki. www.outokumpu.com
