Aperam’s Strong Performance in 2024, but Challenges Ahead in 2025
Aperam, a leading producer of stainless and electrical steel based in Luxembourg, experienced a notable growth in steel shipments in 2024, with a year-on-year increase of 4.9%. The company shipped a total of 1.626 million metric tons of stainless and electrical steel, which was significantly higher than in 2023. This growth, however, was largely influenced by a low comparison base in 2023, when distributors sold off substantial stocks, affecting demand.
Q4 2024: Strong but Mixed Results
In the fourth quarter of 2024, Aperam continued its growth trajectory with a 2.6% increase in shipments compared to the third quarter, amounting to 401,000 metric tons. However, compared to the same period in the previous year, shipments were down by 1.5%. The company reported a slight improvement in demand in Europe, while demand in Brazil exceeded expectations, helping offset some of the weaker performance in other regions.
Segment Performance in 2024
• Services and Solutions Segment: Aperam’s Services and Solutions segment saw a 9% year-on-year increase in shipments, amounting to 169,000 metric tons in the fourth quarter. This was a positive sign of growth in the company’s value-added service offerings.
• Alloys and Specialty Products Segment: Shipments in the alloys and specialty products segment remained stable at 10,000 metric tons, highlighting that while some areas saw growth, others faced little change.
• Recycling and Renewable Resources Segment: This segment, which includes ELG and Aperam BioEnergia, showed a mixed performance. Scrap shipments decreased by 7.4% in Q4 to 312,000 metric tons. However, for the year, shipments in the recycling segment increased by 6.6%, reaching a total of 1.464 million metric tons, indicating stronger performance on an annual basis.
Record Adjusted EBITDA and Strong Alloys Segment
Aperam reported impressive financial results in the fourth quarter of 2024, with adjusted EBITDA more than doubling to €116 million. This remarkable result was largely driven by a record performance in the Alloys segment, as well as strong results in the Recycling and Renewable Resources division. Despite the mixed performance in some regions and segments, the overall financial growth in Q4 reflects the company’s ability to adapt to market demands and capitalize on favorable conditions in specific areas of its business.
Forecast for Q1 2025: Decline in Profitability and Rising Debt
Looking ahead to the first quarter of 2025, Aperam has provided a more cautious forecast. The company expects a decrease in EBITDA for the first quarter of 2025, primarily due to anticipated challenges in the market. Additionally, Aperam foresees a significant increase in its net financial debt, mainly due to the consolidation of Universal Stainless & Alloy Products, which it acquired in 2024. This acquisition is expected to increase the company’s financial obligations in the short term, putting pressure on its profitability in the coming quarter.
Despite these challenges, Aperam remains optimistic about its long-term growth prospects, particularly in emerging markets like Brazil, where demand for stainless and electrical steel is expected to continue rising. However, the company’s short-term outlook for Q1 2025 suggests that it may face some financial turbulence as it integrates its latest acquisition and adjusts to shifting market conditions.
Key Takeaways:
• Aperam experienced a solid year in 2024, with a 4.9% increase in steel shipments, largely driven by a low base in 2023.
• Demand in Europe showed slight improvement, and Brazil exceeded expectations in terms of steel demand.
• The company’s Services and Solutions segment performed strongly with a 9% increase in shipments, while scrap shipments in the Recycling segment increased by 6.6% year-on-year.
• Aperam reported a record EBITDA of €116 million in Q4 2024, driven by strong performance in the Alloys and Recycling sectors.
• However, the company’s outlook for Q1 2025 includes expectations of decreased profitability and higher financial debt, largely due to the consolidation of Universal Stainless & Alloy Products.
