Germany’s S+B sees cautious recovery interrupted by Covid-19

Although the start of the 2020 fiscal year for SBQ steel maker Schmolz+Bickenbach was marked by a low-level recovery from a trough, the coronavirus crisis has left a big dent in volumes and prices.

As of mid-March, the Swiss-German group suffered an abrupt collapse in demand from the complete shutdown of all business activities of major European automobile manufacturers and their suppliers. “From our current perspective, we do not expect a gradual normalisation of demand to set in until the end of the first half of 2020 at the earliest,” says ceo Clemens Iller.

In the first quarter, S+B reported a -17% decrease in sales volumes, down to 457,000 tonnes, Kallanish notes. This was most pronounced for quality & engineering steel, which were down -21% year-on-year on the back of the sharp decline in demand from the automotive industry. Volumes also fell in the two other product groups of stainless steel and tool steel, but with less sharp declines of -3% and -11% respectively. The average sales price/tonne of steel was €1,542 ($1,666) for the first quarter of 2020 versus the prior-year figure of €1,605/t in Q1 2019 The decline was mainly due to lower scrap and alloy surcharges, but also to lower base prices, S+B notes.

S+B’s revenue declined by -20% on-year to €705 million. The decline was most pronounced in the quality & engineering steel product group at -31.5%. Revenue from stainless steel was down by -3.6 %, and for tool steel by -15.7 %. Geographically, all regions and countries suffered a double-digit decline in revenue. Adjusted Ebitda was a negative €6.1m, against a positive result of €42.2m seen a year earlier.