Klöckner & Co SE (ETR:KCO) used its full-year 2025 conference call to provide an update on Worthington Steel’s voluntary public takeover offer, review 2025 results amid a volatile pricing environment, and outline expectations for 2026 across North America and Europe.
Takeover offer update: lowered threshold and extended timeline
CEO Guido Kerkhoff opened the call with an update on Worthington Steel’s takeover offer. Worthington Steel, he said, adjusted the terms by lowering the minimum acceptance threshold to 57.5% and extending the offer period to March 26, 2026. Kerkhoff described the step as “logical and common” to increase transaction security.
Full-year 2025 performance: higher EBITDA and cash flow despite FX headwinds
Management described 2025 as challenging due to tariff and trade-related uncertainty and negative foreign exchange effects. Even so, shipments increased slightly at the group level to 4.528 tons, with weakness in Europe offset by market share gains and performance in the Americas.
Sales for the year were EUR 6.4 billion, down slightly year-over-year, which management attributed largely to lower average prices over the year and adverse FX impacts. Kerkhoff said gross profit increased considerably versus the prior year because the windfall losses from the substantial steel price correction in 2024 did not repeat in 2025, and the gross profit margin improved.
EBITDA before material special effects was EUR 171 million for full-year 2025, described as within the company’s guidance range and a “considerable increase” year-over-year. CFO Dr. Oliver Falk added that operating cash flow was positive for the fourth consecutive year, coming in at EUR 110 million. The company plans to propose a dividend of EUR 0.20 per share, which would mark its fifth consecutive dividend payment.
Q4 2025 results: higher gross profit and margin, with OpEx increases
In the fourth quarter, group sales were EUR 1.5 billion, slightly lower year-over-year despite higher shipments, reflecting lower average prices and unfavorable FX. Gross profit rose to EUR 272 million from EUR 261 million a year earlier, and the gross profit margin increased 17.6% year-over-year to 18.6%.
Falk said Q4 EBITDA before material special effects was EUR 21 million, supported by positive price and volume effects totaling EUR 19 million year-over-year. OpEx increased by EUR 26 million year-over-year, and FX effects were negative by EUR 3 million. Material special effects in Q4 totaled a net EUR 30 million, driven mainly by gains related to the divestment of eight U.S. distribution sites, partly offset by restructuring costs.
Balance sheet and financing: lower net financial debt and ample headroom
Falk reported that full-year 2025 reported EBITDA was EUR 152 million. The company recorded a net working capital release of EUR 63 million, and after interest, tax payments, and other items totaling EUR 106 million, cash flow from operating activities was EUR 110 million. With net CapEx of EUR 5 million, free cash flow was EUR 105 million, including EUR 96 million of proceeds from the divestment of eight U.S. distribution sites.
Net financial debt declined to EUR 709 million at year-end 2025 from EUR 780 million a year earlier, which Falk said was the lowest level since Q2 2023. He pointed to negative impacts from leasing (EUR 71 million) tied to strategic projects and dividends (EUR 20 million), offset by positive FX and other effects of EUR 57 million, including divestment impacts. The company cited a diversified financing structure with a credit facility of about EUR 1.3 billion (excluding leasing) and total financial headroom of around EUR 0.8 billion.
Strategy and 2026 outlook: investments, end-market expectations, and guidance
Kerkhoff highlighted several strategic moves. In Germany, the company announced the intended divestment of the Becker Group following a review of strategic options, aiming to sharpen its focus on higher value-added products and services. In Switzerland, it completed the acquisition of Locher Bewehrungen, with the deal closed on December 25 and integration already completed.
In North America, management described ongoing investments in higher value-added and service-center capabilities, including:
- Columbus, Mississippi: a new aluminum flat roll processing facility adjacent to Aluminum Dynamics’ new production site; ground was broken in Q4 2025, building completion is planned for late Q4 2026, and equipment startup is expected in Q2 2027.
- Paton, Iowa: a new heavy fabrication operation at a leased former Bauer Built site, with the Bauer Built team joining Klöckner to expand welding, assembly, and finishing services.
- Querétaro, Mexico: installation of a coil-fed Schuler laser blanking line for aluminum blanking, scheduled for commissioning in Q2 2026; management said automotive OEM inquiries are increasing as startup approaches.
Kerkhoff said higher value-added products (HVAP) represented around 44% of sales when excluding the eight U.S. distribution sites that were sold, and that this part of the business accounts for the majority of EBITDA.
On end markets, CEO Americas John Ganem said the company expects a “decent recovery” in 2026, with North American steel demand increasing 1%–2% year-over-year, while noting uncertainty tied to Middle East conflict developments and trade policy. He said a positive outcome to the USMCA review could unlock investments currently on hold and potentially boost demand in the second half of 2026. Ganem also cited improving signs in manufacturing activity early in 2026 and highlighted strength in energy and power transmission, with power transmission growth expected to exceed 15% again in 2026.
In Europe, Kerkhoff said the company expects real steel demand to rise 1%–2% in 2026, while cautioning it was too early to assess the economic consequences of the escalating war in Iran and potential impacts from energy prices and trade disruption.
For guidance, management forecast a “considerable” quarter-over-quarter increase in shipments and sales in Q1 2026, with EBITDA before material special effects of EUR 20 million to EUR 60 million. For full-year 2026, the company forecast shipments and sales to be constant year-over-year, noting the prior-year divestment of eight U.S. distribution sites. It also expects a strong EBITDA before material special effects with a “considerable increase” year-over-year, and operating cash flow “significantly positive” above 2025 levels.
During Q&A, Kerkhoff said the company does not foresee direct supply chain impacts from the Iran conflict, while acknowledging potential downstream effects depend on the conflict’s duration and whether the Strait of Hormuz is affected. On pricing, Falk added that following the divestment, the portfolio is more contractual in nature, which “mitigates” exposure to market price volatility and makes the current pricing environment positive for contract business into the second quarter and likely the third quarter.
About Klöckner & Co SE (ETR:KCO)
Klöckner & Co SE, through its subsidiaries, distributes steel and metal products. The company operates through three segments: Kloeckner Metals US, Kloeckner Metals EU, and Kloeckner Metals Non-EU. It offers flat steel products; long steel products; tubes and hollow sections; stainless steel and high-grade steel; and aluminum products for building installations, roof and wall construction, and water supply. The company 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.
