Klöckner & Co (KCO) Q4 2023 earnings summary

Executive summary

• FY 2023 shipments increased 1.3% YoY, while lower average prices drove sales down 16.6%; adjusted EBITDA was €190m amid a challenging market.

• Strategic moves focused on higher-value-added business, simpler operations, lower commodity-price exposure and sustainable steel offerings.

Financial highlights

• FY sales were €6,957m, down 16.6% YoY; gross profit fell 12.8% to €1,157m, while gross margin rose to 16.6% from 15.9%.

• EBITDA before material special effects was €190m versus €355m in FY 2022; EBIT was €66m versus €299m.

• Net income was €0m and net income attributable to shareholders was -€1m; basic EPS was -€0.01 versus €2.08 in FY 2022.

• Q4 sales were €1,606m, gross profit €269m and gross margin 16.7%; EBITDA before special effects was €17m and reported EBITDA €12m.

Outlook and guidance

• Q1 2024 shipments and sales expected to increase considerably QoQ; EBITDA before material special effects guided to €30m–€70m, with a very considerable QoQ increase expected.

• FY 2024 shipments, sales and EBITDA before material special effects expected to increase considerably YoY; operating cash flow expected to remain significantly positive but below FY 2023.

• 2024 real steel demand forecast: North America +1% to +3%; Europe +0% to +1%.