Klöckner & Co progresses in expanding higher value-added business, digitalization and sustainable value chains

• Shipments of 3.4 million tons in first nine months of 2024, considerably above the prior-year period (+6.3%), largely driven by acquisitions in Mexico and the US completed in second half of 2023

• Sales of €5.1 billion in first nine months of 2024, slightly down due to lower prices (–3.8%)

• Operating income (EBITDA) of €104 million before material special effects in first nine months of 2024 (9M 2023: €174 million)

• Progress in strategy implementation through further expansion of higher value-added business

• EBITDA before material special effects for full year 2024 still expected to reach €120 million to €180 million

Duisburg, Germany, November 6, 2024 – In the third quarter of 2024, Klöckner & Co increased shipments to 1.1 million tons, up 2.8% on the prior-year quarter (Q3 2023: 1.1 million tons). In the first nine months of 2024, the Company increased shipments to 3.4 million tons, up 6.3% on the prior-year period (9M 2023: 3.2 million tons). The year-on-year increase is mainly due to the acquisitions in Mexico and the US. Sales fell to €1.6 billion in the third quarter of 2024 due to lower steel prices (Q3 2023: €1.8 billion). In the first nine months, sales were down from €5.4 billion to €5.1 billion, marking a slight decrease of 3.8%.

Operating income (EBITDA) adjusted for material special effects was €21 million in the third quarter of 2024 (Q3 2023: €44 million). In the first nine months of 2024, EBITDA before material special effects amounted to €104 million (9M 2023: €174 million), which is due to a slowdown in demand in Europe and the ongoing correction in steel prices. After negative material special effects of €12 million due to restructuring, Klöckner & Co generated EBITDA of €93 million in the first nine months of 2024 (9M 2023: €179 million).

In March 2024, Klöckner & Co successfully completed the disposal of parts of its European distribution business. The net loss from discontinued operations was €29 million in the first nine months (9M 2023: net loss of €43 million), mainly due to negative deconsolidation effects. The net loss from continuing operations amounted to €55 million in the first nine months (9M 2023: net income of €35 million). In total, the net loss including discontinued operations came to €84 million in the first nine months of 2024 (9M 2023: net loss of €8 million). The net loss in the third quarter of 2024 was €29 million (Q3 2023: net loss of €12 million). Earnings per share from continuing operations in the first nine months of 2024 amounted to €–0.55 (9M 2023: €0.35). Including discontinued operations, earnings per share in the first nine months of 2024 came to €−0.85 (9M 2023: €−0.09). Earnings per share in the third quarter of 2024 amounted to €–0.29 (Q3 2023: €−0.04).

In the third quarter, Klöckner & Co’s cash flow from operating activities was €–62 million (Q3 2023: €40 million). Cash flow from investing activities amounted to €–31 million (Q3 2023: €–339 million), resulting in a negative free cash flow of €94 million. The free cash flow in the first nine months of 2024 was €–120 million (9M 2023: €–250 million). The large cash outflow in the prior-year period mainly related to the acquisition of National Material of Mexico.

Systematic expansion of higher value-added business, digitalization and sustainability in the supply chain

Klöckner & Co has continued to expand its higher value-added business. In the US, targeted investments have enabled the Charlotte and Dallas sites to evolve from a pure distribution operation to a higher value-added fabrication and metalworking operation. Further progress was also made in Germany, for example with the investment in a fully automated sawing and drilling system in Landsberg. These measures aim to increase Klöckner & Co’s profitability and reduce its dependence on volatile commodity markets.

Digitalization and automation remain a key lever in the Group’s strategy. The quantity of digital quotes thus increased by more than 27% in the first nine months of 2024 compared to the same period of the previous year. In addition, Klöckner & Co continues to systematically pursue the vision of zero touch – i.e., adding value with a minimum of manual intervention.

Klöckner & Co has once again received recognition for its sustainability performance, winning the German Sustainability Award for the second time – Europe’s most prestigious award for environmental and social commitment. The jury picked out Klöckner & Co in the Chemicals and Materials Wholesale category and praised the Company as a “beacon” in the steel and metals sector. This award confirms Klöckner & Co’s role as a pioneer in the sustainable transformation of the industry and underlines the successful integration of sustainability into the business model.

Outlook

For fiscal year 2024, despite the continued weak demand in Europe and the steel price correction during large parts of the reporting period, Klöckner & Co continues to forecast EBITDA before material special effects of between €120 million and €180 million. In addition, Klöckner & Co continues to expect a strong and significantly positive cash flow from operating activities, although this is likely to be below the prior-year level.