Klöckner & Co presents solid operating income for 2023 and strengthens focus on attractive business areas and core markets
- Solid operating income (EBITDA) before material special effects of €190 million (2022: €355 million)
- Strong and significantly positive operating cash flow of €287 million (2022: €360 million) due to consistent net working capital management
- Price-driven year-on-year decline in sales to €7.0 billion (2022: €8.3 billion)
- Leading position in North America expanded with successful acquisitions
- Successful completion of sale of country organizations in France, the United Kingdom, the Netherlands and Belgium to Hierros Añon S.A.
- Consolidation of role as pioneer of a sustainable steel and metal industry with significant additions to the Nexigen® product and service portfolio
- Dividend of €0.20 per share (2022: €0.40) to be proposed to Annual General Meeting
- EBITDA before material special effects in Q1 2024 expected to be considerably higher than in the preceding quarter at €30 million to €70 million; positive outlook for fiscal year 2024
Duisburg, Germany, March 13, 2024 – Despite the persistently challenging economic environment, Klöckner & Co generated solid operating income (EBITDA) before material special effects of €190 million in fiscal year 2023 (2022: €355 million). As forecast, Group sales showed a considerable decrease due to the lower steel price level compared to the prior year and amounted to €7.0 billion (2022: €8.3 billion). The net result from continuing operations was close to break-even, with a net loss of €0.3 million. Mainly due to impairment losses recognized in connection with the sale of the four European country organizations in France, the United Kingdom, the Netherlands and Belgium, the Group recorded a net loss of €190 million including discontinued operations. This resulted in negative earnings per share of €1.91. Conversely, through consistent net working capital management, the Company generated a very strong and significantly positive cash flow from operating activities of €287 million (2022: €360 million). Considering this background and the fact that only a small portion of the very strong prior-year earnings was distributed, a dividend of €0.20 per share will be proposed at the Annual General Meeting. Klöckner & Co is therefore set to pay a dividend for the third year in a row. The equity ratio was a very solid 45% at the year end, albeit below the prior-year level (December 31, 2022: 51%).
Additions to sustainable product portfolio and partnerships
Klöckner & Co significantly expanded its Nexigen® product and service portfolio in fiscal year 2023, which marks another major step contributing to the transparency and management of carbon emissions. With Nexigen® Data Services, the Company has set new standards for CO2 emission tracking in the steel industry. This solution provides an overview of the CO2 emission history of products that a customer has purchased from Klöckner & Co, suggests environment-friendly alternatives and displays the associated reduction potential. The services are based on the Nexigen® PCF Algorithm, which was also introduced last year. It can be used to calculate and state the individual product carbon footprint (PCF) for each of the approximately 190,000 Klöckner products. In order to significantly increase the availability of CO2-reduced steel for customers, Klöckner & Co has also expanded its strategic partnerships with Salzgitter and the GMH Group.
The Company already scored a major success in reducing its own carbon emissions during the reporting year: With a 52% reduction in directly controllable carbon emissions (Scopes 1 and 2) compared to the 2019 baseline, Klöckner & Co has already achieved one reduction target for 2030 ahead of schedule. This underscores the effectiveness of the “kloeckner takes action 2040” sustainability initiative.
Stronger focus on attractive business areas and core markets
With the successful completion of the acquisition of National Material of Mexico by the US subsidiary Kloeckner Metals Corporation, Klöckner & Co has strengthened its leading position in steel and metals distribution and the steel service business in North America. Since the acquisition was completed, automotive and industrial customers have requested significantly larger volumes as a result of the expanded product and service portfolio. The acquisition of the US metal components manufacturer Industrial Manufacturing Services further supplemented the product and service portfolio along the customer value chain, particularly in welding and parts production.
Following the successful completion of the sale of the country organizations in France, the United Kingdom, the Netherlands and Belgium in March 2024, Klöckner & Co will focus even more strongly in the future on the lucrative processing and metalworking business. This business is characterized by long-term contracts and a high degree of customer specialization, while offering higher profitability and more stable demand. Klöckner & Co is thus focusing on its largest market of North America and its attractive European activities in Germany, Austria and Switzerland.
Outlook
For 2024, with conditions increasingly returning to normal – and in particular given the declining overall inflationary trend – Klöckner & Co expects considerably stronger demand in its key European and North American markets. Accordingly, the Company is forecasting a considerable increase in shipments and sales. Based on this trend and the Company’s significantly improved operational positioning, Klöckner & Co also expects a considerable year-on-year increase in EBITDA before material special effects. A very considerable increase over the preceding quarter is already expected for Q1 2024, with EBITDA before material special effects of €30 million to 70 million.
About Klöckner & Co:
Klöckner & Co is one of the largest producer-independent distributors of steel and metal products and one of the world’s leading steel service center companies. With its distribution and service network of around 120 sites, primarily in North America and the “DACH” region (Germany, Austria and Switzerland), Klöckner & Co supplies more than 60,000 customers. Currently, the Group has around 6,400 employees. Klöckner & Co generated sales of some €7.0 billion in fiscal year 2023. With the expansion of its portfolio of CO2-reduced materials, services and logistics options under the Nexigen® umbrella brand, the company is underscoring its role as a pioneer of a sustainable steel industry. At the same time, Klöckner & Co leads the way in the steel industry’s digital transformation and has set itself the target of digitalizing and largely automating its supply and service chain. In this way, the Company aims to develop into the leading one-stop shop for steel, other materials, equipment and processing services in Europe and the Americas.
The shares of Klöckner & Co SE are admitted to trading on the regulated market segment (Regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) with further post-admission obligations (Prime Standard). Klöckner & Co shares are listed in the SDAX® index of Deutsche Börse.
ISIN: DE000KC01000; WKN: KC0100; Common Code: 025808576.
