Klöckner & Co: A Strong 2024, Paving the Way for a Sustainable Future
Klöckner & Co, one of the world’s leading independent processors of steel and metal products, has delivered a robust operating income (EBITDA) of €136 million in fiscal year 2024, despite a challenging global economic environment. While sales dipped slightly to €6.6 billion compared to €7.0 billion in 2023, the company managed to increase shipments marginally to 4.5 million metric tons (up from 4.2 million metric tons in 2023), demonstrating resilience in a fluctuating market.
The company’s success is largely attributed to its ongoing transformation from a traditional steel distributor to a leading metal processor. This shift is central to Klöckner & Co’s strategy to reduce its dependency on volatile steel prices and increase profitability by focusing on higher value-added businesses. By doing so, Klöckner has positioned itself for sustainable long-term growth, particularly in the North American and DACH (Germany, Austria, and Switzerland) markets, where it continues to expand its metalworking capabilities.
Financial Performance and Strategic Developments
In 2024, Klöckner’s operating cash flow remained strong at €160 million, a slight decrease from €287 million in 2023. However, the company’s net income from discontinued operations (from its sale of the European steel distribution business) resulted in a consolidated income loss of €-146 million, leading to a loss per share of €-1.77. Despite this, the company proposed a €0.20 per share dividend, a testament to its strong cash flow management and ongoing profitability.
Guido Kerkhoff, CEO of Klöckner & Co, commented on the company’s strategy:
"We have made important progress in implementing our Group strategy and continue to focus on expanding higher-value-added business. This includes, for example, the construction of a new aluminum processing facility in the USA. This will make us less dependent on volatile metal prices and generate new growth opportunities.”
Transformation to Metal Processing: The Core of Growth
Klöckner & Co’s strategy hinges on its continued transformation into a metal processor, reducing its reliance on traditional steel distribution. Over 80% of the company’s sales in 2024 came from its steel service centers and higher-value-added business, significantly increasing profitability and insulating Klöckner from the fluctuations of steel prices.
A key component of this transformation is the company’s investment in new processing and manufacturing hubs. The most notable development is the aluminum processing plant being built in Columbus, Mississippi, USA, set to begin operations in 2026. This facility will focus on aluminum flat rolling, which is essential for industries like automotive and energy, allowing Klöckner to tap into growing demand for lightweight, sustainable metal solutions.
Positive Outlook for 2025: Expected Growth and Strategic Goals
Looking ahead, Klöckner & Co is optimistic about its performance in fiscal year 2025. The company expects demand to increase in key markets in Europe and North America, predicting a considerable increase in sales and turnover compared to 2024. The company’s operational positioning is stronger than ever, with expectations of increased EBITDA and operating cash flow for 2025.
For the first quarter of 2025, the company anticipates EBITDA to be around the same level as Q1 2024, which was €42 million. However, the company is expecting a significant year-on-year increase in cash flow for the full year, due to favorable market conditions and strategic investments.
Global Presence and Future Growth
Klöckner & Co’s global footprint spans over 120 sites across North America and Europe, with operations in key markets like Germany, Austria, Switzerland, and the USA. The company is focused on developing new high-value-added capabilities, expanding its portfolio of CO2-reduced materials, and digitalizing its supply chain. These moves reinforce the company’s position as a pioneer in the sustainable steel industry and underscore its commitment to leading the digital transformation within the industry.
With 6,500 employees, Klöckner & Co continues to innovate and lead, setting an example for others in the industry. The company’s commitment to sustainability, coupled with its ongoing transformation into a metal processor, ensures it is well-positioned for future growth and success.
Key Takeaways:
• Solid Financial Performance: Klöckner & Co reported €136 million in EBITDA in FY 2024, showing resilience despite a slight decline in sales.
• Increased Shipments: The company increased its shipments to 4.5 million metric tons in 2024, up from 4.2 million metric tons in 2023.
• Strategic Focus on Metal Processing: Klöckner has successfully transitioned from a steel distributor to a metal processor, with over 80% of sales now from higher value-added businesses.
• Aluminum Processing Expansion: The company is building an aluminum processing plant in Columbus, Mississippi, set to open in 2026, focusing on sustainable lightweight solutions.
• Sustainability Achievements: Klöckner enhanced its Nexigen® PCF algorithm and raised its carbon reduction target for Scope 1 and 2 emissions to 62.5% by 2030.
• Award-Winning Sustainability Efforts: The company’s sustainability initiatives earned it the German Sustainability Award.
• Digital Transformation: Significant progress was made in digitalization and automation, increasing digital transactions by 26% compared to the previous year.
• Positive Outlook for 2025: Klöckner is forecasting increased sales and EBITDA growth in fiscal year 2025, with a strong outlook for operating cash flow.
• Global Reach: The company operates in 120 sites across North America and Europe, with a continued focus on digital transformation and sustainability in the steel industry.
Klöckner & Co is positioning itself for sustainable long-term success by leveraging digital innovation, strategic investments, and a firm commitment to carbon reduction and sustainability in the steel and metal industries.
