Tag: Klöckner & Co

Klöckner & Co SE reports strong earnings and cash flow in fiscal year 2022 despite challenging economic environment

Klöckner & Co SE reports strong earnings and cash flow in fiscal year 2022 despite challenging economic environment
09.03.2023 / 07:00 CET/CEST
The issuer is solely responsible for the content of this announcement.

Klöckner & Co SE reports strong earnings and cash flow in fiscal year 2022 despite challenging economic environment

  • Strong operating income (EBITDA) of €417 million before material special effects (2021: €848 million)
  • Exceptionally high operating cash flow of €405 million due to consistent net working capital management (2021: negative cash flow of €306 million)
  • Sales increased by 26% to €9.4 billion (2021: €7.4 billion)
  • Strengthened role as pioneer of a sustainable steel and metal industry with launch of Nexigen® brand and expansion of related product and service portfolio
  • Leading position in North America extended with agreed acquisition of National Material of Mexico by Kloeckner Metals Corporation
  • Dividend of €0.40 per share (2021: €1.00) to be proposed to Annual General Meeting
  • EBITDA before material special effects in Q1 2023 expected to be very considerably higher than in the preceding quarter at €40 million to €90 million; positive outlook for fiscal year 2023

Duisburg, Germany, March 9, 2023 – Despite the challenging economic environment, Klöckner & Co generated strong operating income (EBITDA) of €417 million before material special effects in 2022 (2021: €848 million). Driven by higher average price levels, Group sales increased significantly year-on-year from €7.4 billion in 2021 to €9.4 billion. Based on the positive net income of €259 million (2021: €629 million) and earnings per share of €2.54 (2021: €6.21), Klöckner & Co will propose a dividend of €0.40 (2021: €1.00) per share to shareholders at the Annual General Meeting.

As forecast, consistent net working capital management and an actively enforced inventory reduction in the second half of 2022 resulted in an exceptionally positive cash flow from operating activities of €405 million (2021: negative cash flow of €306 million). The equity ratio increased over the prior year’s level to 51% at the end of the year (2021: 47%).

Guido Kerkhoff, CEO of Klöckner & Co SE: “Despite the challenging macroeconomic environment, we continued to successfully execute our corporate strategy in fiscal year 2022. We made significant progress toward our goal of becoming the leading one-stop shop for steel, other materials, equipment and processing services in Europe and the Americas. In addition, with Nexigen® and the Product Carbon Footprint, we have further strengthened our role as pioneer of a sustainable steel industry.”

Further strengthening of role as sustainability pioneer

Klöckner & Co further expanded its range of sustainable products and services in the past year, thus strengthening its role as a pioneer in this regard. The Company brought together its CO2-reduced products and services under the Nexigen® brand launched in fiscal year 2022. This marked an important step in execution of the Group’s “Klöckner & Co 2025: Leveraging Strengths” strategy, in which sustainability plays a pivotal role as a strategic growth driver. With the new brand, the Company enables customers to reliably procure CO2-reduced steel and metal products, providing them with full transparency about their CO2-footprint. The past year saw Klöckner & Co already deliver the first quantities of CO2-reduced steel to longstanding customers such as Mercedes-Benz and Siemens. Thanks to a partnership launched in 2022 with Outokumpu, the world’s leading supplier of sustainable stainless steel, Klöckner & Co now also supplies CO2-reduced stainless steel in a further addition to the range of emission-reduced metals.

CO2-categorization and Product Carbon Footprint for transparency on emissions

Combined with a comprehensive range of logistics solutions, circularity solutions and Sustainability Advisory Services (SAS), the Company supports customers in building sustainable value chains. To this end, Klöckner & Co further added to its CO2-categorization offerings. From the beginning of 2023, in addition to the established five-category classification of CO2-reduced steel, stainless steel and aluminum, customers can now have the individual Product Carbon Footprint (PCF) calculated for nearly all of the around 200,000 Klöckner products. The PCF reflects a product’s cumulative CO2-emissions across the entire value chain, from resource extraction to production and delivery at the customer’s factory gate (“cradle to customer entry gate”) and is determined using the Nexigen® PCF Algorithm, which has been certified by TÜV SÜD.

The Company’s wide-ranging sustainability activities have also been recognized by external sources. December 2022 saw Klöckner & Co win the German Sustainability Award 2023 in the Climate Transformation category. In addition, in April 2022, Klöckner & Co became the first company in the world to have all of its net zero carbon targets, including its decarbonization path, recognized as science-based in the standard validation process in accordance with the latest Science Based Targets initiative (SBTi) standards.

Expansion of product portfolio with acquisitions in North America and Europe

With the acquisition of National Material of Mexico (NMM) by the US subsidiary Kloeckner Metals Corporation (KMC) announced at the end of 2022, Klöckner & Co is strengthening its leading position in steel and metals distribution and the steel service business in North America. Customers stand to benefit from the transaction with improved access to steel, aluminum and stainless steel in Mexico. NMM and KMC notably complement each other in terms of regional coverage, customer segments and in view of NMM’s strong position in the automotive sector. In addition, the acquisition represents an attractive opportunity to enter the exclusive electrical steel market, which has considerable growth potential. Mexico is also highly attractive for KMC due to its proximity to the US and to the highly qualified local labor market. All of the world’s major automotive manufacturers produce in the country and the number of vehicles made there is expected to increase significantly in the future. As a combined player, Klöckner & Co will be ideally positioned to meet the resulting demand. The transaction is subject to the necessary antitrust approvals and is expected to close before summer 2023.

In addition, Klöckner & Co has further strengthened its partnership with US steel producer Nucor and is investing in a heavy plate processing plant on the site of the new Nucor steel mill in Brandenburg, Kentucky. Nucor Steel Brandenburg is a state-of-the-art electric steel mill where scrap is recycled into new heavy plate for offshore wind turbines and other infrastructure projects. With this investment, Klöckner & Co is driving ahead the development of sustainable, innovative and complex solutions for the entire supply chain and extending its portfolio of higher value-added services.

The Company has also made selective acquisitions to expand its product and service range in Europe. The acquisition of Hernandez Stainless GmbH and RSC Rostfrei Coil Center GmbH by the German subsidiary Becker Stahl-Service marked Klöckner & Co’s entry into stainless steel processing in a further addition to its product and service portfolio.

Focus on internal process digitalization

Klöckner & Co also continued to forge ahead in the strategic focus areas of digitalization and automation. In fiscal year 2022, the Company launched additional initiatives to streamline, harmonize and modernize the Group IT landscape. These initiatives lay the groundwork for further digitalization and automation of processes between sales and processing and enhance internal operational efficiency. By improving supply chain transparency, Klöckner & Co is also enhancing the shopping experience for customers, for example with real-time order tracking. This gives Klöckner & Co a competitive edge over smaller competitors. In order to continue developing innovative digital solutions in the future, the digital innovation hub kloeckner.i is to be tied in even more closely with the operating business and will intensify internal collaboration with other units.

Outlook

Although the economic environment remains challenging, the Company expects that the global steel market will increasingly normalize this year. A stronger demand trend in the Company’s key European and US markets is thus expected to bring a considerable increase in shipments compared to fiscal year 2022. Despite the rise in steel prices at the beginning of 2023, Klöckner & Co expects a lower price level overall compared to the prior-year period and correspondingly lower sales. Given the overall considerable improvement in the Company’s operational positioning, substance and profitability base, Klöckner & Co is targeting EBITDA before material special effects at a strong level, albeit below the prior-year figure, which was significantly positively impacted by price effects.

Due to a strong improvement in the macroeconomic environment, a positive price trend and very rigorous net working capital management, the Company expects that first-quarter EBITDA before material special effects will be very considerably higher than in the preceding quarter, at €40 million to €90 million.

About Klöckner & Co:

Klöckner & Co is one of the largest producer-independent distributors of steel and metal products and one of the leading steel service companies worldwide. Based on its distribution and service network of around 150 sites in 13 countries, Klöckner & Co supplies more than 90,000 customers. Currently, the Group has around 7,300 employees. Klöckner & Co had sales of some €9.4 billion in fiscal year 2022. With the expansion of its portfolio of CO2-reduced materials, services and logistics options under the new Nexigen® umbrella brand, the company is underscoring its role as a pioneer of a sustainable steel industry. At the same time, Klöckner & Co leads the way in the steel industry’s digital transformation and has set itself the target of digitalizing and largely automating its supply and service chain. In this way, the Company aims to develop into the leading one-stop shop for steel, other materials, equipment and processing services in Europe and the Americas.

The shares of Klöckner & Co SE are admitted to trading on the regulated market segment (Regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) with further post-admission obligations (Prime Standard). Klöckner & Co shares are listed in the SDAX® index of Deutsche Börse.

ISIN: DE000KC01000; WKN: KC0100; Common Code: 025808576.

Contact Klöckner & Co SE:

Press
Christian Pokropp – Press spokesman
Head of Corporate Communications | Head of Group HR
+49 203 307-2050
christian.pokropp@kloeckner.com

Investors
Felix Schmitz
Head of Investor Relations | Head of Strategic Sustainability
+49 203 307-2295
felix.schmitz@kloeckner.com

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Disclaimer
All transaction are carrying out by SiLLC, a private portfolio management assembly. This document is not an offer of securities for sale or investment advisory services. This document contains general information only and is not intended to represent general or specific investment advice. Past performance is not a reliable indicator of future results and targets are not guaranteed. Certain statements and forecasted data are based on current expectations, current market and economic conditions, estimates, projections, opinions and beliefs of SiLLC and/or its members. Due to various risks and uncertainties, actual results may differ materially from those reflected or contemplated in such forward-looking statements or in any of the case studies or forecasts. All references to SiLLC’s advisory activities relates to SiLLC Assembly International.

Klöckner & Co SE delivers best operating income in fiscal year 2021 since IPO

Klöckner & Co SE delivers best operating income in fiscal year 2021 since IPO

Duisburg, Germany, March 9, 2022 – Klöckner & Co generated its best operating income in fiscal year 2021 since the Company’s IPO in 2006. Full-year sales in 2021 rose very substantially by 45% to €7.4 billion (2020: €5.1 billion). Assisted by the positive market environment, operating income (EBITDA) before material special effects increased from €111 million in the prior year to €848 million. Net income was likewise extremely strong at €629 million, compared with a €114 million net loss in the prior year. Earnings per share amounted as a result to €6.21 (2020: loss per share of €1.16). In light of the record earnings for fiscal year 2021, Klöckner & Co will propose an unusually high dividend of €1.00 per share to shareholders at the Annual General Meeting.

Due to the price-driven increase in net working capital throughout the fiscal year and the funding of pension obligations in the amount of €243 million in the fourth quarter, cash flow from operating activities was negative with a cash outflow of €306 million (2020: cash inflow of €161 million). Conversely, the equity ratio improved due to the exceptionally high net income to a very solid 47% (December 31, 2020: 40%).

Guido Kerkhoff, CEO of Klöckner & Co SE: “2021 was an extremely successful year in our corporate history. With our new strategy, “Klöckner & Co 2025: Leveraging Strengths”, we have begun returning our Company to a course of sustainable growth. We have built up distinct strengths and capabilities in recent years that we are now systematically leveraging to become the leading digital one-stop-shop platform for steel, other materials, equipment and processing services in Europe and the Americas as well as a pioneer for sustainability.”

Progress in digital transformation

Implementation of the Group strategy further accelerated digitalization and automation at Klöckner & Co in the past year. Digital unit kloeckner.i was repositioned, a hub was established in the USA and the share of sales generated via digital channels increased to 46% in fourth quarter. The AI-driven Kloeckner Assistant application has been expanded and is now a key tool in the increasingly automated processing of quotes and orders. Klöckner & Co consequently generated digital sales of over €1 billion via the solution in 2021. In the tool’s next development stage, it should digitalize and automate a full 80% of sales processes and soon be deployed in other parts of Klöckner & Co’s value chain.

Klöckner & Co as pioneer of a sustainable steel industry: targets, partnerships and categorization metric

Klöckner & Co attained key milestones last year in establishing itself as a pioneer of a sustainable steel industry. The Company embraces its environmental responsibility under the slogan “kloeckner takes action 2040” and already signed up in 2020 – as one of only a select few players in the steel sector – to the Science Based Targets initiative (SBTi) “Business Ambition for 1.5°C” campaign, the world’s most ambitious and high-profile framework for emission reduction. In a first step, Klöckner & Co aims to significantly reduce its directly controllable greenhouse gas emissions by 2030. The adopted medium-term carbon reduction targets were recognized by the SBTi in January 2022 as science-based targets. For the long term, the Company also plans to reduce directly controllable carbon emissions to net zero by 2040. In addition to the extensive reduction measures across all scopes, the Company already offsets the currently unavoidable Scope 1 and 2 emissions by investing in high-quality, certified offsetting projects. In consequence, Klöckner & Co is already carbon-neutral today.

As a pioneer on the way to a sustainable steel industry, Klöckner & Co is exploiting the strategic opportunities presented by decarbonization. In its strategy, the Company has made green solutions an integral part of its business model and is building a sustainable range of products and services. In this connection, by partnering with the Swedish company H2 Green Steel, it has secured access to substantial quantities of virtually carbon-emission-free steel. So that customers in future can reliably, transparently and easily see the carbon footprint of a product purchased from Klöckner & Co, the Company has developed a categorization metric for green and low-carbon steel in collaboration with Boston Consulting Group. The categorization metric is rooted in international, science-based standards and categorizes low-carbon steel according to the certified emissions generated along the entire value chain from resource extraction to production. By classifying products into six categories, the Company has created an easy way to reliably assess and compare the carbon footprint of green steel. Klöckner & Co will be able to provide low-carbon steel in various categories of the scale by the end of 2022. This will enable Klöckner & Co to support customers in building sustainable value chains commencing this year. Klöckner & Co aims for the two lowest-carbon-footprint categories to account for over 30% of its entire range by 2025 and 50% by 2030. This equates to an annual reduction in carbon emissions by some four million tons.

Purpose statement, claim and logo underscore sustainability ambitions

To provide orientation in a rapidly changing environment, Klöckner & Co carried out an intensive corporate identity process in recent months, developing a purpose statement and a claim and adapting the Group’s logo. The purpose statement was defined in a 360-degree process incorporating input from employees: “We partner with customers and suppliers to deliver innovative metal solutions for a sustainable tomorrow.” This underscores Klöckner & Co’s self-perception as a reliable partner to customers and suppliers, with innovative solutions that go beyond the supply of steel alone. At the same time, Klöckner & Co works for a sustainable future and aims to evolve from a digital pioneer in the steel industry to a pioneer of sustainability. The corporate claim formulated in this context reflects the purpose statement and encapsulates the core brand promise: “Your partner for a sustainable tomorrow.” Klöckner & Co will also appear under an adapted logo in order to strengthen its brand positioning.

Outlook

Klöckner & Co expects a further increase in steel demand this year in its core markets of Europe and North America. The Company already expects to see considerable sales growth in the first quarter of 2022 compared to the prior-year quarter. The guidance for operating income (EBITDA) of €130–180 million before material special effects is confirmed (Q1 2021: €130 million). Additionally, Klöckner & Co anticipates positive material special effects in the amount of €54 million in the initial quarter of 2022 from sales of properties in Switzerland and France.

About Klöckner & Co:
Klöckner & Co is one of the largest producer-independent distributors of steel and metal products and one of the leading steel service companies worldwide. Based on its distribution and service network of around 140 locations in 13 countries, Klöckner & Co supplies more than 100,000 customers. Currently, the Group has around 7,200 employees. Klöckner & Co had sales of some €7.4 billion in fiscal year 2021. As a pioneer of the digital transformation in the steel industry, Klöckner & Co’s target is to digitalize and largely automate its supply and service chain and to become the leading digital one-stop-shop platform for steel, other materials, equipment and processing services in Europe and the Americas as well as a pioneer of sustainability – for the benefit of customers, the steel industry and society.

The shares of Klöckner & Co SE are admitted to trading on the regulated market segment (Regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) with further post-admission obligations (Prime Standard). Klöckner & Co shares are listed in the SDAX® index of Deutsche Börse.
ISIN: DE000KC01000; WKN: KC0100; Common Code: 025808576.

Klöckner & Co SE contact:

Press
Christian Pokropp – Press Spokesperson
Head of Corporate Communications |
Head of Group HR
Phone: +49 203 307-2050
Email: christian.pokropp@kloeckner.com

Investors
Felix Schmitz
Head of Investor Relations |
Head of Strategic Sustainability
Phone: +49 203 307-2295
Email: felix.schmitz@kloeckner.com

Source: https://www.kloeckner.com/en/media/press-releases/Kloeckner_Co_SE_delivers_best_operating_income_in_fiscal_year_2021_since_IPO.html

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Disclaimer
All transaction are carrying out by SiLLC, a private portfolio management assembly. This document is not an offer of securities for sale or investment advisory services. This document contains general information only and is not intended to represent general or specific investment advice. Past performance is not a reliable indicator of future results and targets are not guaranteed. Certain statements and forecasted data are based on current expectations, current market and economic conditions, estimates, projections, opinions and beliefs of SiLLC and/or its members. Due to various risks and uncertainties, actual results may differ materially from those reflected or contemplated in such forward-looking statements or in any of the case studies or forecasts. All references to SiLLC’s advisory activities relates to SiLLC Assembly International.

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