Swiss Steel Group Stays on Strategic Path Amidst Challenging Market Conditions
Swiss Steel Group, a prominent player in the global steel market, has been grappling with a challenging year in 2024, largely due to a global economic slowdown and specific market declines in Europe. The automotive sector, the group's largest customer base, suffered a significant decrease in demand. This trend mirrored a broader industrial recession across parts of Europe, which saw production levels fall short of earlier, more optimistic forecasts. Despite these headwinds, Swiss Steel Group has continued to adapt its strategy, focusing on long-term sustainability and operational excellence.
Declining Sales and Market Conditions
Sales volume in 2024 decreased by 5.1%, from 1,112 kilotons in 2023 to 1,056 kilotons in 2024, reflecting weak demand across key sectors. The overall revenue fell by 14.3%, from EUR 2,837 million in 2023 to EUR 2,432 million in 2024. The drop in sales volume and revenue was partly due to a drop in demand from major European sectors like automotive and mechanical engineering, which were affected by economic uncertainties.
Strategic Measures and Cost Management
In response to the market slump, Swiss Steel Group executed a series of operational adjustments aimed at reducing costs and enhancing efficiency. As part of these measures, the group adjusted its production schedules, reduced workforce numbers, and implemented cost-saving initiatives. Around 800 full-time positions were planned for reduction in the first quarter of 2025, primarily affecting European production sites and the sales organization. This workforce reduction resulted in an overall decrease of 15.5% in employee numbers, bringing the total to 7,450 at the end of 2024.
Furthermore, the company moved forward with its “SSG 2025” strategic roadmap, which involves structural adjustments and operational improvements. Swiss Steel also streamlined its portfolio by divesting several operations, including its facilities in Portugal, Argentina, Colombia, and the UAE, along with its former headquarters in Düsseldorf. These efforts were aimed at strengthening the group’s core business and improving its financial position.
Financial Health and Debt Reduction
Swiss Steel Group’s financial position showed positive signs of improvement, despite the challenging market conditions. At the end of 2024, the group reduced its net debt to EUR 711.4 million, down from EUR 828.6 million at the end of 2023. This reduction was supported by a capital increase in April 2024, generating gross proceeds of approximately EUR 300 million, and the divestment of assets in Düsseldorf. Additionally, the group’s equity increased to EUR 322.8 million, up from EUR 234.4 million in 2023, thanks to the capital infusion. These steps improved the equity ratio to 19.3% as of December 31, 2024, compared to 12.1% the previous year.
Strategic Refocusing and Future Outlook
As part of the group's SSG 2025 program, Swiss Steel is refocusing its efforts on key strategic priorities, including cost discipline, operational resilience, and sustainable steel production. The company also made significant strides in securing new financial arrangements, including an additional EUR 150 million in debt funding from its major shareholder, GravelPoint Holding AG, to support future operations. These new financing agreements, expected to close in April 2025, will extend the group’s financing arrangements through to December 2029.
Although the market remains weak at the start of 2025, there are signs of slight improvement in incoming orders. However, Swiss Steel’s future recovery will depend on broader structural changes in the European industrial landscape. The group remains optimistic that its continued strategic adjustments and operational discipline will position it for long-term growth once economic conditions improve.
KEY TAKEAWAYS
• Sales Decline: Swiss Steel Group’s sales volume decreased by 5.1% in 2024, from 1,112 kilotons to 1,056 kilotons.
• Revenue Drop: Revenue fell by 14.3% in 2024 to EUR 2,432 million, impacted by weaker market demand.
• Cost-Cutting Measures: The company implemented cost-saving measures, including reducing its workforce by 15.5% and adjusting production capacity.
• Debt Reduction: Net debt decreased by EUR 117.2 million to EUR 711.4 million, aided by a EUR 300 million capital increase in April 2024.
• Equity Growth: Shareholders' equity increased by 37.6%, reaching EUR 322.8 million at the end of 2024, improving the equity ratio to 19.3%.
• Strategic Refocusing: The group is focused on the "SSG 2025" strategy, streamlining its portfolio and enhancing operational efficiency.
• Financing Support: New financing agreements in early 2025, including EUR 150 million in additional funding, will help support the group’s recovery.
• Resilient Strategy: Swiss Steel Group remains committed to operational excellence and sustainable steel production, laying the groundwork for future success.
• Market Uncertainty: A sustained recovery is contingent on structural changes in the European industrial sector, with slight signs of improvement seen in early 2025.
About Swiss Steel Group
Swiss Steel Group is a leading global manufacturer of high-quality steel products, specializing in stainless steel, engineering steel, and tool steel. The company is committed to sustainability and innovation in steel production, with a strong focus on operational excellence and long-term value creation. Its strategic roadmap, SSG 2025, outlines the path to greater operational efficiency, financial stability, and market leadership.
