Swiss Steel remains in the red
The ailing steel manufacturer Swiss Steel had to contend with dwindling demand in 2024. Sales volumes and turnover fell significantly, leaving the bottom line in the red.
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The steel manufacturer, which is struggling with the turnaround, was hit by the industrial recession in parts of Europe for the second year in a row in 2024. Industrial production continued to decline despite more optimistic forecasts, the company announced on Wednesday.
In particular, demand from the automotive sector, which is important for the company, continued to decline. Production figures in the European automotive sector remained well below the pre-pandemic level of 2019. The economic and financial uncertainties have also affected the German mechanical and plant engineering sector, and thus Swiss Steel.
Sales declined further
Sales volumes, which were already weak in the previous year, continued to crumble. On a comparable basis, it fell by 5.1% to 1,056 kilotonnes in the 2024 financial year. Adjusted for sales, revenue fell by 14.3% to €2.84 billion (CHF2.72 bilion).
Swiss Steel posted an operating loss of €35.5 million at EBITDA level, although this result was boosted by positive one-off effects. The Group sold its activities in Portugal, Argentina, Colombia and the United Arab Emirates as well as its former Group headquarters in Düsseldorf.
The bottom line was once again in the red at €197.2 million. In the previous year, it was a loss of €294.8 million.
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At the end of the year, equity totalled €322.8 million, compared to €234.4 million a year earlier. One of the main reasons for this was a capital increase in April 2024, which – after deducting costs – brought in €287.8 million. However, this increase was partially reduced by the consolidated loss. The equity ratio nevertheless rose to 19.3% from 12.1% at the end of 2024.
Last year, the group, which had suffered a loss, made severe cuts. Due to weak demand, the central Swiss company cut around 800 of its total workforce of around 7,500, including 130 of 750 jobs in Switzerland.
New financing agreements
Politicians have also come to the company’s aid. Until the end of 2028, four companies active in steel, iron and aluminium production can apply for bridging aid from the federal government.
As has been known since January, the company is withdrawing from the Swiss stock exchange. As a result of the extensive restructuring and reorganisation measures implemented in recent years, the free float has fallen significantly and the company’s shares are largely illiquid, according to the statement.
In the first quarter of 2025, the Swiss Steel Group concluded new financing agreements. Among other things, these provide for additional loan financing from majority shareholder Martin Haefner (totalling €150 million) and an extension of the main Group financing arrangements until December 2029. The transaction is scheduled for completion in April 2025.
Signs of a recovery
The year 2024 was a challenging one with difficult market conditions, commented CEO Frank Koch on the financial year. “The path to full recovery will take time – the recovery of our most important market, industrial production, will be crucial,” he was quoted as saying in the press release.
In the outlook, Swiss Steel saw “slight signs of recovery” in incoming orders at the beginning of the year, as stated in the press release.
Translated from German by DeepL/jdp
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