Transatlantic set-up supports Klöckner’s performance

Due to its international diversification in Europe and the USA, steel distribution group Klöckner & Co is more optimistic about its business than many other German or European steel companies these days.

“In our customer sectors, we see some normal softening of activity, but not a curve of recession,” ceo Guido Kerkhoff said during a telephone conference when presenting third-quarter results. “The call-offs are going fine, as far as we see.”

He noted that the outlook for 2023 is overshadowed by insecurity, especially for the company’s home country of Germany. Klöckner is more optimistic about business in the USA and even Switzerland, which together account for 60% of its sales volume.

“The price deterioration in the USA arrives in our books with a delay because we have a lot of contract business there,” Kerkhoff explained.

Despite the free-fall of spot prices in the third quarter, revenue was still 16% up year-on-year, to €2.37 billion ($2.35 billion), while volumes fell by only 3.5%, to 1.15 million tonnes. As the company reported earlier (see Kallanish 12 October), its Ebitda was massively lower y-on-y, from €277m to €16m, due to an inventory write-down. As a reaction to the significant steel price deterioration, it actively enforced an inventory correction to mitigate risk exposure, Klöckner stated.

Digital sales, which the group has been cultivating for the last three years, were slightly down y-on-y to 43%, following a pandemic-related boost seen in 2020/21. Also, Klöckner’s product mix lately leaned in favour of processing services, especially in the USA. Apart from those factors, “digital sales are in no way stagnating, let alone falling back,” Kerkhoff said.

Christian Koehl Germany