Swiss Steel Group: Strategic persistance and challenging market conditions

Swiss Steel Group has continued its strategic course despite a challenging market environment, marked by a global economic slowdown that particularly affected European industrial production. The company reported a decline in sales volume and revenue for the year 2024 but also achieved improvements in EBITDA and debt reduction.

Market and Financial Performance

In 2024, Swiss Steel Group's sales volume decreased by 5.1% compared to 2023, from 1,112 kilotons to 1,056 kilotons, reflecting ongoing market challenges. Correspondingly, revenue declined by 14.3%, from EUR 2,837 million in 2023 to EUR 2,432 million in 2024. Despite these declines, the Group's EBITDA improved from EUR -102.2 million in 2023 to EUR -35.5 million in 2024, aided by one-time effects and efficiency measures.

The company also reduced its net debt to EUR 711.4 million by year-end 2024, down from EUR 828.6 million at the end of 2023. This improvement was supported by a capital increase in April 2024. As a result, the Group's equity increased to EUR 322.8 million, with an equity ratio of 19.3% as of December 31, 2024.

Adapting to Market Conditions

Swiss Steel Group faced another year of industrial recession in parts of Europe, impacting key sectors such as automotive and mechanical engineering. The European automotive industry, the Group’s largest customer segment, continued to experience lower production volumes, while cautious investment trends in Germany’s mechanical and plant engineering sectors further dampened demand. Despite this, Swiss Steel Group increased its market share in stainless and engineering steel during 2024.

To adapt, the company implemented measures to adjust production schedules, reduce costs, and enhance operational efficiency. Workforce reductions, primarily affecting European production sites and sales operations, resulted in a 15.5% decrease in employee numbers to 7,450 by the end of 2024. These adjustments aligned the Group’s capacity with market demand to maintain long-term competitiveness.

Strategic Initiatives and Portfolio Adjustments

As part of its strategic roadmap, ‘SSG 2025,’ Swiss Steel Group continued restructuring efforts to strengthen its core business and reduce financial liabilities. Following Ascometal’s management seeking court protection in March 2024, the Group transferred responsibility for these entities, derecognizing related assets and liabilities from its balance sheet. The company also streamlined its portfolio by divesting operations in Portugal, Argentina, Colombia, and the United Arab Emirates, along with selling its former headquarters in Düsseldorf.

These efforts, combined with efficiency gains in procurement and operations, contributed to the EBITDA improvement despite ongoing raw material price pressures.

Strengthening Financial Stability

In April 2024, Swiss Steel Group reinforced its capital base through a capital increase that generated gross proceeds of approximately EUR 300 million. Additionally, the Group secured an extension of its major financing arrangements until September 2028, significantly improving its balance sheet position. Proceeds from asset divestments further contributed to reducing net debt by EUR 117.2 million. However, these positive financial developments were partially offset by a negative cash flow in 2024.

As of December 31, 2024, shareholders’ equity stood at EUR 322.8 million, up from EUR 234.4 million in 2023. This increase was primarily driven by the capital raise, partially offset by a net loss of EUR -197.2 million. The equity ratio improved from 12.1% in 2023 to 19.3% in 2024.

Outlook and CEO Commentary

Reflecting on the year, CEO Frank Koch stated: “2024 was a challenging year, but also one of progress, demonstrating that Swiss Steel Group remains on track. A full recovery will take time and will depend on the revival of industrial production. Our operational discipline provides a solid foundation to navigate market developments with resilience. We remain committed to our strategic priorities, ensuring the groundwork laid in recent years supports our future success.”

To further strengthen its financial position, Swiss Steel Group secured additional financing agreements in the first quarter of 2025. These agreements include EUR 150 million in new debt funding from major shareholder GravelPoint Holding AG and an extension of material financing arrangements until December 2029. The agreement is subject to customary conditions and is expected to be finalized in April 2025.

Source and Photo: Swiss Steel Group