Klöckner & Co (KCO) Q3 2024 earnings summary

Executive summary

• Q3 2024 shipments increased, driven by strong performance in the Americas, but sales and gross profit declined due to lower steel prices.

• EBITDA before material special effects was €21 million in Q3 2024, within guidance, but down year-over-year; net loss for Q3 was €29 million.

• Strategic focus on high value-added business (HVAB) and digitalization continues, with divestments reducing exposure to cyclical, low-margin distribution.

• Expansion of HVAB capabilities in North America and DACH region, including investments in automation and processing lines.

• Divestment of European distribution businesses in France, UK, Netherlands, and Belgium completed, presented as discontinued operations.

Financial highlights

• Q3 2024 sales: €1.646 billion, down 6.3% year-over-year; gross profit: €262 million, down 7.1%; gross margin: 15.9%.

• EBITDA before material special effects: €21 million in Q3 2024 (Q3 2023: €44 million); 9M 2024: €104 million.

• Net loss for 9M 2024 was €84 million; Q3 2024 net loss was €29 million.

• Free cash flow: negative €94 million in Q3 2024; net financial debt increased to €872 million.

• Equity ratio: 48% at Q3 2024; gearing: 53%.

Outlook and guidance

• Full-year 2024 EBITDA before material special effects forecasted between €120 million and €180 million.

• Significantly positive operating cash flow expected for the year, but below previous year.

• Real steel demand expected to be flat to slightly down in North America and down in Europe.