Klöckner continues America acquisitions, eyes defence in Europe

Following acquisitions in North America, Klöckner & Co increased shipments in the second quarter by 11.5% on-year to 1.2 million tonnes. In the first half year of 2024, shipments by the German-based distribution group increased 8.1% on-year to 2.3mt.

The increase is primarily attributable to the acquisitions in Mexico and the US completed in H2 2023, Klöckner chief executive Guido Kerkhoff said during a conference call monitored by Kallanish.

At €3.5 billion ($3.7 billion), sales dropped 2.6% in H1 due to lower prices. Operating income (Ebitda) before material special effects was €83 million, versus €130m a year earlier.

Klöckner underlines that business with service centres (SSCs), especially in high-value added products, is less dependent on the steel price development because of contractual relationships with the customers. SSCs accounted for nearly half of the company’s operating profit in H1.

Kerkhoff emphasised the efforts related to expanding the range of value-added offers, with processing steps taking place in different locations, and the logistical challenges this involves. He noted that many of the firm’s customers in the USA have been partners for more than ten years, and keep asking for more of these services.

In North America, the group will continue to target “opportunistic, highly selective, performance-and-growth-oriented mergers and acquisitions”. In its European markets – mainly Germany, Austria and Switzerland – it aims to actively position itself to benefit from growing demand in the defence sector.

Klöckner expects a slight decline in demand for most of its customer segments. Segments seen remaining stable on both continents are household appliances and energy, mostly renewables.

Christian Koehl Germany

kallanish.com