Company Announcements

Swiss Steel Group achieved solid results in a challenging environment

Source: EQS

Steeltec AG / Key word(s): Annual Results
Swiss Steel Group achieved solid results in a challenging environment

08-March-2023 / 07:01 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 LR
The issuer is solely responsible for the content of this announcement.


  • Sales volume decreased by – 11 % from 1,863 to 1,663 kilotons in 2022 with a slowdown in activity towards the end of the year and a focus on higher-margin products
  • Revenue for the full-year 2022 continued to rise strongly by 27 % from EUR 3,192.8 million to EUR 4,051.4 million, supported by higher energy and raw material prices
  • Adjusted EBITDA in 2022 came in higher at EUR 217.0 million versus EUR 191.6 million in 2021
  • Net debt increased year over year from EUR 720.5 million to EUR 848.2 million, mainly due to sustained higher working capital. Net debt decreased by EUR 65 million compared with the end of the third quarter of 2022
  • Outlook for 2023: Swiss Steel Group expects adjusted EBITDA between EUR 160 and 200 million

 

CEO Frank Koch comments: “Swiss Steel Group faced multiple challenges in 2022, ranging from skyrocketing energy prices to interrupted supply chains due to the volatile geopolitical environment and the shortfall from our operations in Ugine following the severe accident in early 2022. I am pleased that despite these challenges we succeeded in securing a solid result of EUR 217 million in adjusted EBITDA. This is thanks to our foresightedness, our flexibility and the exceptional commitment of our employees.

The past year has shown the necessity to stick to our strategy program SSG 2025. We are shaping the transformation of our Group in order to create value, to ensure resilience, increase performance and lay the foundation for further organic growth. In September last year we set the cornerstones for building a fully integrated Group with the debut of our new Engineering Steel, Stainless Steel and Tool Steel Divisions. In January 2023 we started rebranding all our entities under one strong name: Swiss Steel Group. Our new organizational setup leads to a more active steering of our Group and a more effective focus on customer requests and innovation. According to the recent communication about the divestment of several entities in Eastern Europe, we have also just begun to structurally reorganize our Group and to secure a solid foundation for increased performance.

We will continue our efforts in sustainable steel production. Based on our already low carbon emissions, our commitment to the Science Based Targets initiative (SBTi) and our decarbonization roadmaps, we have set ourselves ambitious goals of reducing our carbon footprint by 42 % within the next decade and of finally reaching our net zero target no later than 2040, given the framework conditions are appropriately ensured. Thanks to our unique expertise in electric arc furnace technology and highest operating standards, we are well positioned for our future target: to become the leading player for Green Steel.”

Key figures

Swiss Steel Group

Unit

2022

2021

Δ in %

Q4 2022

Q4 2021

Δ in %

Order backlog

kilotons

454

691

– 34.3

454

691

– 34.3

Sales volume

kilotons

1,663

1,863

– 10.7

362

425

– 14.8

Revenue

million EUR

4,051.4

3,192.8

26.9

960.0

837.1

14.7

Average sales price

EUR/t

2,438

1,716

42.1

2,654

1,972

34.6

Adjusted EBITDA

million EUR

217.0

191.6

13.3

36.5

39.9

– 8.5

EBITDA

million EUR

188.8

200.0

– 5.6

26.5

53.1

– 50.1

Adjusted EBITDA margin

%

5.4

6.0

3.8

4.8

EBITDA margin

%

4.7

6.3

2.8

6.3

EBIT

million EUR

73.0

108.7

– 32.8

– 17.7

27.9

Earnings before taxes

million EUR

21.3

64.1

– 66.8

– 33.2

16.2

Group result

million EUR

9.4

50.3

– 81.3

– 27.2

11.5

Investments

million EUR

115.1

107.1

7.5

41.4

43.9

– 5.7

Free cash flow

million EUR

– 53.7

– 223.7

76.0

68.2

– 53.8

 

Unit

31.12.2022

31.12.2021

Δ in %

 

 

 

Net debt

million EUR

848.2

720.5

17.7

 

 

 

Shareholders’ equity

million EUR

530.9

448.9

18.3

 

 

 

Gearing

%

159.8

160.5

 

 

 

Net debt/adj. EBITDA LTM (leverage)

x

3.9

3.8

2.6

 

 

 

Balance sheet total

million EUR

2,386.0

2,227.4

7.1

 

 

 

Equity ratio

%

22.2

20.2

 

 

 

Employees as of closing date

Positions

9,857

9,914

– 0.6

 

 

 

Capital employed

million EUR

1,646.8

1,588.6

3.7

 

 

 

 

Unit

2022

2021

Δ in %

Q4 2022

Q4 2021

Δ in %

Earnings/share 1)

EUR/CHF

0.00/0.00

0.02/0.02

– 0.01/-0.01

0.00/0.00

Shareholders’ equity/share 2)

EUR/CHF

0.17/0.17

0.15/0.16

0.17/0.17

0.15/0.16

Share price high/low

CHF

0.348/0.202

0.478/0.234

0.249/0.202

0.381/0.340

1)  Earnings per share are based on the result of the Group after deduction of the portions attributable to non-controlling interests

2)  As of December 31, 2022 and as of December 31, 2021

 

Lucerne, March 8, 2023Swiss Steel Group, a world leader in special long steel, today reported a – 11 % decrease in sales volumes for 2022 to 1,663 kilotons, down from 1,863 kilotons in 2021. Revenue of EUR 4,051.4 million was 27 % higher compared to EUR 3,192.8 million in the prior year. Adjusted EBITDA came to EUR 217.0 million, versus EUR 191.6 million in 2021. Net debt amounted to EUR 848.2 million, an increase of EUR 127.7 million from EUR 720.5 million recorded at the end of 2021.

Business performance in 2022

After the post COVID-19 market recovery throughout our main customer industries in 2021, Swiss Steel Group’s business environment in 2022 was impacted by distortions in the global economic recovery due to the war in Ukraine, ongoing supply chain issues amplified by lockdowns in China and increasing energy prices in Europe. This development negatively affected demand from two of our main customer segments, the automotive industry and the mechanical and plant engineering sector.

In addition, operations of Swiss Steel Group were adversely impacted by the stoppage of the steel mill in Ugine following a crane collapse in early January 2022, with a severe negative effect on the Group’s full-year profitability and cash flow. Melt shop production ramped up to approximately 65 % capacity in June, but only reached full capacity again in the first quarter of 2023.

Furthermore, the elevated price levels for raw materials and energy throughout 2022 put pressure on the Group’s operational performance. Swiss Steel Group responded to these developments by adjusting production volumes to energy availability and costs and lower market demand with regular production adaptations at most European sites. Moreover, as a result, price increases had to be passed on to our markets through energy surcharges. These efforts led our Group to an adjusted EBITDA of EUR 217.0 million, despite the lower sales volume overall. For the full-year 2022, the Group achieved a positive Group result of EUR 9.4 million, below the previous year (2021: EUR 50.3 million).

Our key financial figures for 2022 were effected by global market uncertainties. The volatility in demand resulted in – 10.7 % lower sales volumes of 1,663 kilotons across all product groups versus 1,863 kilotons in the previous year. Following the implementation of an energy surcharge combined with high raw material prices, the average sales price rose sharply by 42.1 % to EUR 2,438 per ton in 2022, leading to revenue of EUR 4,051.4 million, up 26.9 % on the prior year (2021: EUR 3,192.8 million).

The increase in revenue was spread across all product groups. By region, revenue increased in all our sales markets with the strongest gains in the American market at 48.9 %, supported by a friendly environment for production cost and products.

Free cash flow for the year was negative at EUR – 53.7 million due to the significant increase in net working capital, driven in particular by a higher inventory valuation per ton on the back of the sharp rise in energy prices. Inventory volumes in tons decreased.

Net debt, comprising current and non-current financial liabilities less cash and cash equivalents, came to EUR 848.2 million, an increase compared to December 31, 2021 (EUR 720.5 million).

Business performance in the fourth quarter of 2022

In the fourth quarter of 2022, Swiss Steel Group faced reduced demands in almost all markets combined with general restraints given obvious macroeconomic uncertainties such as rising inflation, high energy costs and ongoing supply chain challenges. The Group reacted by adapting production volumes and exercising strict cost control, which led to lower inventories throughout the value chain and lower shipments.

At 362 kilotons, – 14.8 % less steel was sold in the fourth quarter of 2022 compared to the same quarter of the previous year. The average sales price per ton of steel was EUR 2,654 per ton in the fourth quarter of 2022, continuing its upward trend versus EUR 1,972 per ton in the same period of the previous year. This is still mainly due to the increase in raw material and energy prices, where the widespread use of surcharge mechanisms led to higher selling prices.

Despite a lower sales volume, revenue in the fourth quarter increased by 14.7 % to EUR 960.0 million compared to EUR 837.1 million in the same quarter in the previous year, driven by higher average sales prices. At EUR 36.5 million, adjusted EBITDA was only slightly below the prior-year quarter (Q4 2021: EUR 39.9 million). Free cash flow (cash flow from operating activities less cash flow from investing activities) in the fourth quarter of 2022 was EUR 68.2 million (Q4 2021: EUR – 53.8 million).

Outlook for fiscal year 2023

We observe a weaker start into 2023 compared to the previous year. An economic slowdown in the fourth quarter of 2022 and the beginning of 2023 led to a lower yet acceptable order backlog and shorter lead times, enabling us to react faster and more flexibly on market opportunities. While an anticipated drop in energy prices is expected to improve our cash flow due to lower working capital, it will lead to lower revenue and margins. On this basis, we forecast an adjusted EBITDA in a range between EUR 160 and 200 million.

About Swiss Steel Group
Swiss Steel Group is today one of the world's leading providers of individual solutions in the special long steel products sector. The Group is one of the leading manufacturers of tool steel and non-corrosive long steel on the global market and one of the largest companies in Europe for alloyed and high-alloyed quality and engineering steels. With close to 10,000 employees and its own production and distribution companies in 30 countries on 5 continents, the company guarantees global support and supply for its customers and offers them a complete portfolio of production and sales & services around the world. Customers benefit from the company's technological expertise, consistently high product quality around the world as well as detailed knowledge of local markets.

Forward-looking statements
This media release contains forward-looking statements, including presentations of developments, plans, intentions, assumptions, expectations, beliefs and potential impacts, as well as descriptions of future events, income, results, situations or outlooks. These are based on the Company's current expectations, beliefs and assumptions, which may differ materially from future results, performance or achievements. The information contained herein is provided with the publication of this document. The forward-looking statements contained herein are not updated as a result of new information, future events or for any other reason.



End of Inside Information
Language: English
Company: Steeltec AG
Landenbergstrasse 11
6005 Luzern
Switzerland
Phone: +41 41 581 41 23
E-mail: a.beeler@swisssteelgroup.com
Internet: www.swisssteel-group.com
ISIN: CH0005795668
Listed: SIX Swiss Exchange
EQS News ID: 1577145

 
End of Announcement EQS News Service

1577145  08-March-2023 CET/CEST

fncls.ssp?fn=show_t_gif&application_id=1577145&application_name=news&site_id=acquiremedia3