SSAB Year-End Report 2024: A Challenging Yet Resilient Performance
SSAB, a leading global steel producer, has released its financial results for the fourth quarter and full year of 2024, showing how the company navigated a difficult economic environment, especially in Europe and North America. Despite substantial setbacks in some of its business units, SSAB’s premium products, particularly its high-strength steel, have proven to be a stabilizing factor.
Fourth-Quarter Financial Performance: A Mixed Bag
For the fourth quarter of 2024, SSAB reported a revenue of SEK 23,615 million, a decrease from SEK 26,469 million the year before. The company’s operating result fell sharply, reaching SEK 487 million compared to SEK 2,400 million in Q4 2023. Earnings per share also took a hit, falling to SEK 0.48 from SEK 1.86 in the same period last year.
The operating results for SSAB’s full year were similarly impacted, dropping to SEK 7,860 million, down from SEK 16,467 million in 2023. Lower prices in key markets, particularly in the USA, and weak demand in Europe, notably affected SSAB’s Special Steels and SSAB Europe business units. However, SSAB’s commitment to its premium product portfolio helped buffer the impact, allowing it to weather the storm better than other steel producers.
Resilience in Premium Products
A standout performance came from SSAB Special Steels, which achieved an operating result of SEK 629 million with a 10% operating margin. This division offers unique, high-value products that tend to have more stable prices than standard steel, which cushioned SSAB from market volatility. Despite a decrease in results from the same period last year, SSAB Special Steels’ resilience was one of the few bright spots in an otherwise challenging environment.
The company’s other premium products, including high-strength steel, demonstrated similar resilience. This premium product focus not only maintained SSAB’s market position but also provided more stable earnings, particularly when compared to standard steel products, which faced significant pricing pressures.
Challenges in Europe and North America
The weakening steel markets in Europe and North America directly impacted SSAB's operations. For SSAB Americas, the operating result fell to SEK 189 million, a sharp decline from SEK 1,681 million in the previous year’s fourth quarter. The operating margin dropped from 25% to 4%, largely due to lower steel prices. Similarly, SSAB Europe saw a slight decrease in its operating result, from SEK 165 million to SEK 109 million, and its operating margin fell from 2% to just 1%.
While the broader market struggles were apparent, SSAB's strategic focus on premium, higher-value products helped mitigate the worst effects of these regional downturns.
Cost Control and Strategic Investments
SSAB's cash flow remained strong during Q4, largely supported by the release of working capital. This was important in maintaining financial flexibility amid ongoing challenges. The company continued its transformation projects in Luleå and Oxelösund, aiming to lower costs, improve product mix, and reduce CO2 emissions. These projects are critical to SSAB’s long-term strategy of enhancing efficiency and sustainability.
The investment in Luleå is expected to amount to EUR 4.5 billion, with the potential to boost yearly EBITDA by over SEK 5 billion and avoid approximately EUR 2 billion in maintenance capital expenditures. These initiatives are part of SSAB’s broader commitment to streamlining operations and reducing environmental impact, positioning the company for future success.
Safety and Operational Developments
In addition to financial performance, SSAB made notable progress in safety. The Lost Time Injury Frequency (LTIF) decreased to 0.75 in 2024, improving from 0.87 in the previous year. This improvement reflects SSAB’s ongoing commitment to enhancing workplace safety as part of its corporate responsibility.
SSAB’s maintenance activities, including those at Oxelösund and Raahe, were executed as planned, demonstrating the company’s ability to manage operational challenges effectively even in difficult market conditions.
The Way Forward
Looking ahead to 2025, SSAB is adapting to the market conditions by implementing flexible working hours and a restrictive cost approach. These efforts are aimed at maintaining a robust operational structure in the face of an uncertain market environment.
The company remains focused on its transformation plans and long-term growth strategy, which includes sustainability initiatives, cost reductions, and increased flexibility in production capabilities. These efforts should help SSAB emerge stronger once market conditions stabilize.
Dividend Proposal
In light of the year’s financial results, SSAB’s Board of Directors has proposed a dividend of SEK 2.60 per share for the financial year 2024, a decrease from SEK 5.00 per share in 2023. This decision reflects SSAB’s ongoing commitment to providing shareholder returns while balancing its need for reinvestment in strategic initiatives.
