Outokumpu Oyj - Company Announcement

Outokumpu unveils new vision, products and pricing model, comments on its strategy progress

OUTOKUMPU OYJ
STOCK EXCHANGE RELEASE
May 22, 2013 at 11.30 am EET


At Outokumpu Experience, the company's global event in London, UK for
customers, partners and analysts, Outokumpu launched its latest addition to the
duplex product family, the FDX platform, introduced a new pricing model and
commented on its strategy progress and the Terni divestment process. 

New vision and mission

Addressing an audience of over 500 customers, partners and analysts, Outokumpu
showcased its broad range of products and innovations that bring to life a
legacy of 100 years in stainless steel. The company launched a new vision that
captures its belief in a world that is durable, sustainable, efficient, and
designed to last forever. 

Says Outokumpu CEO Mika Seitovirta: “Our vision - a world that lasts forever -
is based on our conviction that the world deserves innovations that can stand
the test of time and are ready to be born again at the end of their life cycle.
Our materials are vital in enabling a sustainable world with economic
prosperity, and so it is our mission to create advanced materials that are
efficient, long lasting and recyclable.” 

Through its technical expertise and high quality products, Outokumpu works
together with its customers and partners to create materials for the tools of
modern life, and solutions for the world's most critical problems: clean
energy, clean water and efficient infrastructure. 

New formable duplex grade - the FDX product family

As the inventor and market leader in stainless steel Outokumpu continues to
bring new innovations to market. The new FDX product family exhibits a unique
combination of price stable alloying with high strength and substantially
improved formability. FDX is a totally new material solution for applications
where the formability of current duplex grades has not been sufficient. Like
all duplex grades, FDX platform delivers significant material savings and
lifecycle advantages compared to traditional stainless steel grades. 

The FDX family comprises of two product variants: FDX 25 and FDX 27 having
corrosion resistance and formability properties similar to 304 and 316
stainless steels respectively, but twice the mechanical strength. 

Its characteristics make FDX grades well suited for applications with high
demands on formability such as plate heat exchangers, flexible pipes and pumps,
where strength, formability, durability and long-term service are required. The
new grades complement Outokumpu's already strong duplex offering: Outokumpu is
the global market leader in duplex grades with a global market share of more
than 40%. 

New pricing model - Daily Alloy Surcharge

Outokumpu plans to introduce an additional stainless steel pricing model -the
Daily Alloy Surcharge that would build on the traditional Monthly Alloy
Surcharge mechanism. The new Daily Alloy Surcharge model is designed to address
the weaknesses of the monthly model as it would react far quicker to changes in
the volatile alloy costs. 

Outokumpu sees the Daily Alloy Surcharge model as the way forward due to
increased volatility of commodity markets and global nature of stainless steel
business. Company plans to start piloting of the Daily Alloy Surcharge model
with select distributor and tubular customers in Europe during the summer to
gain learnings and insights on the planned model. 

Says Mika Seitovirta: “We want to investigate potential new pricing models that
would address the shortcomings of the current monthly model while maintaining
its benefits. The daily alloy surcharge mechanism is a method well tested in
other industries, such as aluminium, where customers benefit from daily pricing
offered by the producers. In regions such as Asia-Pacific, stainless steel
manufacturers already give daily full transaction prices to their customers.” 

Outokumpu believes that a Daily Alloy Surcharge would decrease volatility and
speculation and thus provide better delivery reliability for customers.
Outokumpu's customers would potentially also have the flexibility to decide
whether to fix the Alloy Surcharge on the day of the order or only closer to
the delivery time. Exact details of the planned model will be developed further
based on the customer feedback and findings. 

Update on strategy, business targets and Terni remedy divestment

As part of the Capital Market Days program, company management reiterated its
expectations of a soft first half year with improvements in underlying EBIT
expected during the second half year 2013. This is mainly due to the major
ramp-ups of Ferrochrome operations and the Calvert integrated mill. 

Company reiterated its savings targets of EUR 200 million synergy savings
related to the Inoxum acquisition by 2017 as well as additional EUR 150 million
savings by end of 2014. The Krefeld melt shop closure is progressing ahead of
schedule and will be closed by end of 2013, contributing EUR 50 million to the
above mentioned synergy savings from 2014 onwards. In its Stainless Coil
Americas Business Area, company continues to target for a positive EBIT for the
full year 2014. 

Company also confirmed its decision to start a strategic review of its VDM
business unit, with the aim to improve company profitability and strengthen the
balance sheet. During the review, Outokumpu will evaluate strategic options for
VDM and consider how best to drive continued growth and profitability for the
business, within or outside of Outokumpu. 

As communicated in connection with the first quarter 2013 results, the timeline
for the Terni divestment has been extended. 

Says Outokumpu CEO Mika Seitovirta: “The bids Outokumpu has received so far are
not acceptable. We are working with the European Commission towards a solution
which we believe will permit us to manage this situation toward an outcome that
respects the interests of both Outokumpu and the European Commission.” 

Outokumpu has agreed with the European Commission and the parties involved in
the divestment process not to disclose any details of the divestment process.
Outokumpu expects to give an update on the divestment process in connection
with its second quarter results. 

For more information:

Investors: Tamara Weinert, tel. +358 9 421 2438, mob. +358 40 751 7194

Media: Saara Tahvanainen, tel. +358 9 421 3265, mob. + 358 40 589 0223

Outokumpu Group



Outokumpu is the global leader in stainless steel and high performance alloys.
We create advanced materials that are efficient, long lasting and recyclable -
thus building a world that lasts forever. Stainless steel, invented a century
ago, is an ideal material to create lasting solutions in demanding applications
from cutlery to bridges, energy and medical equipment: it is 100% recyclable,
corrosion-resistant, maintenance-free, durable and hygienic. Outokumpu employs
more than 16 000 professionals in more than 40 countries, with headquarters in
Espoo, Finland and shares listed in the NASDAQ OMX Helsinki. www.outokumpu.com

Attachments:

Experience 22052013 ENG.pdf