Klöckner & Co is less optimistic about the outlook for the European market than for North America, which is expected to perform strongly.
The steel distribution group said in its annual results presentation last week that it expects “considerably stronger demand in its key European and North American markets,” in 2024. This contradicted the dim outlook given by many European players for demand and consumption in Germany and its neighbouring markets over the coming months.
On the day following the results presentation, chief executive Guido Kerkhoff clarified to Kallanish that Klöckner’s optimism is valid for North America, and much less so for Europe. He detailed that 60% of the company’s revenue now comes from North America, with Germany accounting for 25% and Switzerland for 15%. Only this month, Klöckner finalised the divestment of its operations in four other European countries – France, the United Kingdom, the Netherlands and Belgium. This leaves Germany and Switzerland as its only remaining markets in Europe.
Kerkhoff noted that he would welcome very much if Europe saw a recovery this year. He praised the prospects in Mexico especially, which he said “is booming enormously”.
Klöckner’s optimism triggered a rise in its share price by 3% after the announcement of annual figures. The same logic apparently applies for Klöckner as for other German groups with a strong international presence. These companies have defied over recent months the current lull in domestic investment and demand, and seen their share prices climb, leading to new highs for the DAX index this month at 18,000.
Christian Koehl Germany
