Klöckner & Co reports solid start to the year in a macroeconomic environment that remains challenging

• Shipments of 1.1 million metric tons slightly up on prior-year quarter (+5%) and considerably higher than preceding quarter (+11%)

• Sales down to €1.7 billion compared to the same quarter of the previous year due to price movements (Q1 2023: €1.8 billion)

• Operating income (EBITDA) before material special effects of €42 million considerably higher than preceding quarter (Q4 2023: €17 million) but below operating income in prior-year period (Q1 2023: €65 million)

• Sale of parts of European distribution business successfully completed in first quarter of 2024

• Guidance range of €30 million to €70 million for EBITDA before material special effects in second quarter

Duisburg, Germany, May 7, 2024 – Klöckner & Co got off to a solid start in 2024. Total shipments increased slightly by 5% in the first quarter of 2024 in year-on-year comparison and amounted to 1.1 million metric tons (Q1 2023: 1.1 million metric tons). Relative to the preceding quarter, shipments showed a considerable, largely seasonal increase by 11% (Q4 2023: 1.0 million metric tons). In a persistently challenging macroeconomic environment, the Company generated sales of €1.7 billion in the first quarter (Q1 2023: €1.8 billion), which is attributable to the price level being lower. At €42 million, the operating income (EBITDA) before material special effects in the first quarter of 2024 was considerably higher than the previous quarter’s figure of €17 million. However, the result was lower than in the prior-year quarter (Q1 2023: €65 million).

In March 2024, the Company successfully completed the sale of parts of its European distribution business. The consolidated income from discontinued operations amounted to €–24 million, mainly due to negative deconsolidation effects from the aforementioned sale. The consolidated income from continuing operations amounted to €–8 million in the first quarter (Q1 2023: €24 million). Overall, the consolidated income including discontinued operations amounted to €–32 million. Accordingly, the earnings per share from continuing operations dropped to €–0.08 (Q1 2023: €0.23) and earnings per share including discontinued operations amounted to €–0.33 (Q1 2023: €–0.08).

After a positive cash flow from operating activities of €47 million in the same quarter of the previous year, this year cash flow from operating activities amounted to €–44 million in the first quarter. After payments for capital expenditures of €23 million, free cash flow amounted to €–67 million in the first three months of the financial year compared to a positive free cash flow of €40 million in the first quarter of 2023.

At €1,727 million, the Company’s equity at the end of the quarter was only slightly below the figure at the end of 2023 (December 31, 2023: €1,755 million). Conversely, the equity ratio improved considerably to 47.6% (December 31, 2023: 45.4%).

Now that Klöckner & Co completed the sale of parts of the European distribution business in France, the UK, the Netherlands, and Belgium in the first quarter of 2024, the Company will focus on higher value-added business and products and services along its customers’ value chain. These products and services promise higher profitability and more stable demand in the future. The completed sale reduces the Company’s dependence on volatile, low-margin commodity markets even more. In 2023, the higher-value business already accounted for more than half of the operating income.

The Company also continued to scale up the digitalization and automation of its value chains. The number of digital quotes for the Group’s continuing operations increased by more than 50% in the first quarter of 2024 compared to the same period of the previous year.

Outlook

For the second quarter of 2024, Klöckner & Co expects a considerable increase in shipments and sales compared to the preceding quarter. Furthermore, the Company is forecasting EBITDA before material special effects of €30 million to €70 million for this period. Additionally, Klöckner & Co expects a positive cash flow from operating activities in the first half of 2024.