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    OUT1V   FI0009002422

OUTOKUMPU OYJ

(OUT1V)
  Report
Delayed Nasdaq Helsinki  -  11:29 2022-09-28 am EDT
3.614 EUR   -1.20%
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Outokumpu divests the majority of its Long Products business

07/12/2022 | 03:46pm EDT

Outokumpu Oyj
Insider information
July 12, 2022 at 10.45 pm EEST

Outokumpu divests the majority of its Long Products business 

Outokumpu has signed an agreement to divest the majority of the Long Products business operations to Marcegaglia Steel Group, a leading industrial group worldwide in the steel processing sector. Outokumpu will now focus on its core business of flat stainless steel products.

"This divestment marks the accomplishment of the turnaround program for the Long Products business in the past two years. With Marcegaglia, we have found a responsible and committed owner to develop Long Products business even further. The sale is a natural step for Outokumpu in line with our strategy to focus on our core business, stainless steel flat products," says Heikki Malinen, President and CEO at Outokumpu.

The total consideration on a debt and cash free basis amounts to EUR 228 million implying an EV / Adjusted 2021 EBITDA multiple of 4.9x[1]. In the January-September 2022 interim report, Outokumpu will classify its Long Products businesses to be divested as assets held for sale, report the businesses as a discontinued operation and based on preliminary assessment, impairment of some EUR 50 million would be recognized, subject still to final review. Outokumpu will publish comparable historical financial information for January-September 2021 in connection with its January-September 2022 interim report. In the 2022 half-year report Outokumpu will consider the divestment as a non-adjusting event after the end of the reporting period and will disclose it in the notes to the half-year report.

Outokumpu expects to complete the divestment by the end of this year. The completion of the transaction is subject to customary closing conditions and regulatory approvals by the competition authorities and requires for instance internal structuring before completion. The transaction will be carried out as a share sale.

While the final impacts of the transaction are still under analysis, with current estimates, Outokumpu does not expect any material gain or loss on the transaction, in addition to the impairment loss to be recognized in the third quarter results. The accumulated foreign exchange rate translation adjustments relating to foreign subsidiaries held for sale could impact the gain or loss.

The sales of Long Products accounted for approximately 8% of the Outokumpu Group's sales in 2021. The transaction includes Long Products' melting, rod and bar operations in Sheffield, UK; bar operations in Richburg, US; and wire rod mill in Fagersta, Sweden. The transaction does not include Outokumpu Long Products AB operations in Degerfors and Storfors, Sweden. Approximately 650 employees in Sheffield, Richburg and Fagersta will transfer to the buyer as a part of the transaction.

Outokumpu Long Products AB's units in Degerfors and Storfors in Sweden continue their operations for now as part of the Outokumpu Group, and different options are to be evaluated for the future of the units. 

Long Products key financials

 

2021

2020

2019

Net sales, EUR million

810

493

642

% of Group net sales

8

7

8

Deliveries, 1,000 tonnes

250

175

226

Adjusted EBITDA, EUR million

47

-8

-7

For more information:  

Investors: Linda Häkkilä, Head of Investor Relations, tel. +358 40 071 9669 

 

Media: Outokumpu media desk, tel. +358 9 421 3840

 

[1] EV / Adjusted 2021 EBITDA calculated based on 2021 EBITDA for the Long Products business area of EUR 47 million.

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 some 9,000 professionals in more than 30 countries, with headquarters in Helsinki, Finland and shares listed in Nasdaq Helsinki. www.outokumpu.com

https://news.cision.com/outokumpu-oyj/r/outokumpu-divests-the-majority-of-its-long-products-business,c3600326

(c) 2022 Cision. All rights reserved., source Press Releases - English

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Financials
Sales 2022 10 108 M 9 748 M 9 748 M
Net income 2022 815 M 786 M 786 M
Net cash 2022 323 M 312 M 312 M
P/E ratio 2022 2,07x
Yield 2022 8,32%
Capitalization 1 636 M 1 578 M 1 578 M
EV / Sales 2022 0,13x
EV / Sales 2023 0,13x
Nbr of Employees 9 173
Free-Float 79,8%
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Number of Analysts 14
Last Close Price 3,61 €
Average target price 5,67 €
Spread / Average Target 56,9%
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Managers and Directors
Heikki Pekka Mikael Malinen President & Chief Executive Officer
Pia Aaltonen-Forsell Chief Financial Officer
Kari Alpo Erik Jordan Chairman
Stefan Erdmann Chief Technology Officer
Pierre Vareille Independent Director
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