Solid Q1 Performance Despite Challenging MarketEnvironment
Klöckner & Co has demonstrated resilience in the firstquarter of 2025, achieving shipments of 1.2 million metric tons, representing a2.7% increase compared to the same period last year and a substantial 13.9%rise from the preceding quarter. This growth was primarily driven by increaseddemand in the Kloeckner Metals Americas segment, where the company also gainedmarket share. Despite the volume growth, sales remained relatively flat at €1.7billion compared to Q1 2024, reflecting lower average steel prices in apersistently challenging macroeconomic environment. The company's operatingincome (EBITDA) before material special effects held steady at €42 million,matching the year-earlier figure and showing significant improvement over the€32 million recorded in Q4 2024.
Strategic Portfolio Realignment Gains Momentum
In a decisive move to sharpen its geographic focus,Klöckner & Co completed the sale of its Brazilian country organization,Kloeckner Metals Brasil, in April 2025 (effective March 31, 2025). Thisdivestment aligns with the company's strategy of concentrating future growth onhigher value-added processing and metalworking operations in North America andthe DACH region (Germany, Austria, and Switzerland). CEO Guido Kerkhoffemphasized the strategic significance of this move, stating, "We got offto a solid start in the fiscal year 2025 and, with the disposal of ourBrazilian country organization and targeted acquisitions, we consistentlycontinued our strategic focus on our core markets."
Strategic Acquisitions Enhance TechnicalCapabilities
Klöckner & Co has simultaneously pursued strategicacquisitions to enhance its product and service portfolio. In late March 2025,the company agreed to acquire Cologne-based Ambo-Stahl, a specialist inwear-resistant and high-strength special steels. This acquisition positionsKlöckner to better serve growing demand in the defense and infrastructuresectors. Additionally, the company completed the acquisition of Haley Tool& Stamping near Nashville, Tennessee, expanding its manufacturing capabilitieswith advanced stamping presses. This move is expected to accelerate growth inthe automotive, aerospace, and industrial manufacturing sectors while creatingoperational synergies across Klöckner's North American locations.
Financial Position Reflects Seasonal Patterns
The first quarter saw Klöckner & Co report a net lossof €28 million, a slight improvement from the €32 million loss in the sameperiod last year, resulting in basic earnings per share of €-0.28 (Q1 2024:€-0.33). Cash flow from operating activities amounted to €-118 million,compared to €-44 million in Q1 2024. After accounting for investments of €23million, free cash flow stood at €-141 million for the quarter. The company'sequity decreased to €1,592 million from €1,721 million at the end of 2024,primarily due to actuarial losses and the negative consolidated income, withthe equity ratio declining to 45.6% from 48.6% at year-end 2024.
Ambitious "Step Up 2030" StrategyUnveiled
Building on previous strategic initiatives, Klöckner &Co has launched its "Leveraging Strengths – Step Up 2030" strategyupdate, setting ambitious long-term targets. The company aims to become theleading service center and metal processing company in North America and Europeby 2030, with a clear focus on maximizing customer benefits. This strategicevolution is expected to yield higher profitability while reducing earningsvolatility and dependence on steel price fluctuations. By 2030, Klöcknertargets a normalized EBITDA before material special effects in themid-three-digit million euro range, with an EBITDA margin exceeding 5% and areturn on capital employed of at least 10%.
Optimistic Outlook for Q2 2025
Looking ahead to the second quarter of 2025, Klöckner &Co has expressed optimism based on significant increases in steel prices,particularly in the US market. While shipments are expected to remainrelatively stable compared to Q1, the company anticipates benefitingsubstantially from positive price developments. As a result, management hasforecast EBITDA before material special effects of €60 million to €90 millionfor Q2 2025, representing a considerable increase over both the previousquarter and the same period last year. CEO Kerkhoff noted, "Since themarket is continuing to move in a positive direction, especially in NorthAmerica, we expect a considerable improvement in our operating income for thesecond quarter of 2025."
Industry Positioning and Market Dynamics
Klöckner & Co's strategic realignment comes at a timewhen the global steel industry continues to face structural challenges,including volatile pricing, shifting trade patterns, and evolving customerdemands. By focusing on higher value-added services and strategic markets, thecompany is positioning itself to better withstand these industry pressureswhile capitalizing on growth opportunities in specialized segments. Theemphasis on metal processing capabilities represents a shift away from traditionalsteel distribution toward more technically sophisticated services that offerboth higher margins and greater customer stickiness.
Key Takeaways:
• Klöckner & Co achieved Q1 2025 EBITDA of €42 millionwith shipments up 2.7% year-over-year to 1.2 million metric tons, whileforecasting Q2 2025 EBITDA of €60-90 million
• The company has completed the sale of its Brazilianoperations while making strategic acquisitions in Germany (Ambo-Stahl) and theUS (Haley Tool & Stamping) to enhance its technical capabilities and marketposition
• Under its "Step Up 2030" strategy, Klöckneraims to become the leading service center and metal processing company in NorthAmerica and Europe, targeting an EBITDA margin above 5% and return on capitalemployed of at least 10%
