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1. Company Snapshot

1.a. Company Description

Klöckner & Co SE, through its subsidiaries, distributes steel and metal products.It operates through three segments: Kloeckner Metals US, Kloeckner Metals EU, and Kloeckner Metals Non-EU.The company's product portfolio includes flat steel products; long steel products; tubes and hollow sections; stainless steel and high-grade steel; aluminum products; and special products for building installations, roof and wall construction, and water supply.


It also provides various services, including cutting and splitting of steel strips; forming and manufacturing of pressed parts; CNC turning/milling; 2D/3D tube laser cutting; laser and water jet cutting; structural steel processing; plasma and oxy-fuel cutting; shot blasting and primer painting; and sawing/drilling/rounding off.In addition, the company offers warehousing, logistics, and materials management services.It serves small to medium-sized steel and metal consumers, primarily from the construction industry, as well as machinery and mechanical engineering industries; and supplies intermediate products for the automotive, shipbuilding, and consumer goods industries.


The company was founded in 1906 and is headquartered in Duisburg, Germany.

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1.b. Last Insights on KCO

Klöckner & Co SE's recent performance was driven by strategic portfolio optimization. The company agreed to sell seven US service centers to Russel Metals for approximately $118.6 million, allowing it to focus on more profitable operations. This divestiture will likely enable Klöckner to reduce debt and enhance its financial flexibility. Additionally, the company may benefit from a more streamlined business model, potentially leading to improved operational efficiency. The sale also underscores Klöckner's efforts to adapt to evolving market conditions.

1.c. Company Highlights

2. Kloeckner & Co's Q3 2025: Resilient Performance Amidst Challenging Market Environment

Kloeckner & Co reported a mixed bag in its Q3 2025 financial performance, with revenues decreasing to EUR 1.6 billion due to lower average prices, while shipments increased to 1,440 tonnes, a slight year-over-year improvement driven by Kloeckner Metals in Americas. Gross profit margin improved to 18.3%, and EBITDA before material special effects reached EUR 43 million, a significant increase year-over-year. The company's EPS came out at '-0.13', missing estimates at '-0.02'.

Publication Date: Nov -30

📋 Highlights
  • Shipments Growth:: Increased to 1,440 tonnes driven by Kloeckner Metals in Americas.
  • Sales Decline:: Fell to EUR 1.6 billion due to lower average prices despite shipment growth.
  • Gross Profit Improvement:: Rose 12.5% YoY with margin reaching 18.3%.
  • EBITDA Surge:: EUR 43 million before special effects, up significantly YoY.
  • Strategic Divestments:: $20 million book profit from 8 U.S. site closures and debt reduction.

Segmental Performance

Klöckner Americas business generated record 3-quarter shipments despite short-term market demand headwinds, with year-over-year growth greater than 6% due to large energy projects and new automotive and industrial contractual programs. In Europe, despite short-term stability in wheel steel demand, the underlying sentiment is slightly improving, and the company expects volumes to grow again.

Market Outlook

The company expects North American real metals demand to be generally flat year-over-year, excluding the temporary impact from destocking. Key market segments, such as construction, manufacturing, and transportation, face challenges, but the company remains positive about the defense shipbuilding front and large contract commitments. The energy sector continues to be a growth driver, with the power transmission segment expected to grow approximately 20% year-over-year.

Financial Outlook and Valuation

The financial outlook for 2025 remains unchanged, with EBITDA before material special effects expected to be between EUR 170 million and EUR 240 million, a considerable increase year-over-year. The company's EV/EBITDA ratio stands at 12.5, indicating a relatively reasonable valuation. Analysts estimate next year's revenue growth at 6.1%. The P/S Ratio is 0.09, and the ROE is -9.07%, highlighting the challenges the company faces in terms of profitability.

Cash Flow and Debt

Operating cash flow came in negative at EUR 118 million due to a temporary net working capital increase, but the company expects a strong operating cash flow in Q4, driven by the growth in new projects and programs. The Net Debt / EBITDA ratio stands at 7.13, indicating a relatively high debt burden.

3. NewsRoom

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RUSSEL METALS TO ACQUIRE SEVEN SERVICE CENTERS IN THE US FROM KLOECKNER

Sep -28

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Kloeckner & Co SE (KLKNF) Q3 2024 Earnings Call Highlights: Navigating Market Challenges ...

Nov -07

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Is It Worth Considering Forbo Holding AG (VTX:FORN) For Its Upcoming Dividend?

Apr -07

Source:

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Those who invested in Klöckner & Co (ETR:KCO) three years ago are up 123%

Jun -04

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Klöckner & Co SE's (ETR:KCO) top owners are retail investors with 36% stake, while 35% is held by institutions

May -08

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.36%)

6. Segments

Processing and Service-Center

Expected Growth: 4.5%

The 4.5% growth in Processing and Service-Center segment of Klöckner & Co SE is driven by increasing demand for steel processing services, expansion into new markets, and investments in digitalization and automation. Additionally, the company's focus on sustainability and cost savings initiatives have improved operational efficiency, contributing to the segment's growth.

Stockholding

Expected Growth: 4.2%

Klöckner & Co SE's 4.2% stock growth is driven by increasing demand for steel products, particularly in the automotive and construction industries. The company's focus on digitalization, cost savings initiatives, and strategic acquisitions have also contributed to its growth. Additionally, the ongoing trend towards sustainable and environmentally-friendly practices has boosted demand for Klöckner's eco-friendly steel products.

Other Contracts

Expected Growth: 3.8%

Klöckner & Co SE's 3.8% growth in Other Contracts is driven by increasing demand for steel products in the construction and automotive industries, coupled with strategic partnerships and expansion into new markets. Additionally, the company's focus on digitalization and process optimization has improved operational efficiency, leading to higher margins and revenue growth.

Direct Business

Expected Growth: 5.2%

The 5.2% growth in direct business from Klöckner & Co SE is driven by increasing demand for steel products, successful implementation of digitalization strategies, and expansion into new markets. Additionally, the company's focus on sustainability and cost savings initiatives have contributed to the growth.

7. Detailed Products

Steel Trading

Klöckner & Co SE is a leading steel trader, offering a wide range of steel products, including flat steel, long steel, and tubes.

Digital Steel Platform

Klöckner's digital platform provides customers with a seamless and efficient way to purchase steel products, track orders, and manage inventory.

Steel Processing

Klöckner offers various steel processing services, including cutting, drilling, and machining, to provide customized steel products.

Sustainable Steel Solutions

Klöckner provides sustainable steel solutions, including low-carbon steel products and recycling services, to support environmentally friendly practices.

Engineering and Consulting

Klöckner's engineering and consulting services provide customers with expert advice on steel selection, design, and application.

8. Klöckner & Co SE's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Klöckner & Co SE is moderate, as there are alternative materials and products available in the market, but the company's focus on high-quality steel products and its strong brand reputation help to mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is relatively low, as Klöckner & Co SE operates in a niche market with a limited number of large customers, and the company's products are often customized to meet specific customer needs.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate, as Klöckner & Co SE relies on a few large suppliers for raw materials, but the company's strong relationships with these suppliers and its ability to negotiate prices help to mitigate this risk.

Threat Of New Entrants

The threat of new entrants is relatively low, as the steel industry has high barriers to entry, including significant capital requirements and regulatory hurdles, making it difficult for new companies to enter the market.

Intensity Of Rivalry

The intensity of rivalry in the steel industry is high, as there are several large players competing for market share, and the industry is characterized by fluctuating demand and prices, making it a challenging environment for companies like Klöckner & Co SE.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 32.19%
Debt Cost 3.95%
Equity Weight 67.81%
Equity Cost 13.63%
WACC 10.51%
Leverage 47.48%

11. Quality Control: Klöckner & Co SE passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Outokumpu

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Value: 6.9

Growth: 2.6

Quality: 2.9

Yield: 8.1

Momentum: 7.5

Volatility: 4.3

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Alleima

A-Score: 4.8/10

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Growth: 5.2

Quality: 5.1

Yield: 3.1

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Klöckner

A-Score: 4.8/10

Value: 8.9

Growth: 2.2

Quality: 1.5

Yield: 6.2

Momentum: 6.5

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Value: 5.8

Growth: 2.3

Quality: 3.5

Yield: 5.0

Momentum: 4.0

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Growth: 2.4

Quality: 2.1

Yield: 1.9

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Cognor

A-Score: 3.9/10

Value: 7.2

Growth: 1.6

Quality: 2.2

Yield: 4.4

Momentum: 5.5

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.07$

Current Price

6.07$

Potential

-0.00%

Expected Cash-Flows