Gränges’ Q1 interim report 2024: Robust start to the year

First quarter 2024

• Sales volume increased by 1.5 percent to 122.0 ktonnes (120.2) and net sales decreased to SEK 5,428 million (5,968). 
• Adjusted operating profit amounted to SEK 356 million (401).
• Adjusted operating profit per tonne amounted to 2.9 kSEK (3.3).
• Operating profit was SEK 356 million (401) and includes no items affecting comparability (-). 
• Profit for the period amounted to SEK 237 million (254).
• Diluted earnings per share amounted to SEK 2.23 (2.38).
• Adjusted cash flow before financing activities was SEK 95 million (287).
• Financial net debt was SEK 2,964 million on March 31, 2024 (SEK 2,741 million on December 31, 2023), corresponding to 1.3 times adjusted EBITDA (1.1 times on December 31, 2023).
• Total carbon emissions intensity (scope 1+2+3) decreased to 7.4 tonnes CO2e/tonne (8.9).
• The share of sourced recycled aluminium increased to 45.5 percent (37.5).

Comments by Gränges’ CEO Jörgen Rosengren: Back to volume growth

In the first quarter 2024, market demand stabilized as downstream inventories gradually normalized in most sectors. Stable demand in automotive overall – and strong in Asia – and recovery in other markets compensated for lower-than-normal pre-season shipments to HVAC customers. Our strong focus on market share gains helped drive a return to growth, and sales volume increased by 2 percent. It is very encouraging to see these first results of our intensified sales efforts. 

We also accelerated our productivity work to offset customer price pressure and wage inflation. Combined with sales volume growth, this yielded an operating profit of SEK 356 million, only slightly below the strong first quarter 2023 adjusted for energy cost compensation.

Continued progress on Navigate plan 
In parallel with our focus on market share gain and productivity, we are systematically executing our Navigate plan for long-term sustainable growth. 

An important part in Navigate is to increase circularity and decrease our carbon footprint to make good on our commitment to net-zero by 2040. In the first quarter, we achieved a 16 percent reduction of carbon intensity, and an impressive 45 percent recycling rate. We’re quite proud of these new records.

Such improvements do not happen by chance but are the result of hard, systematic work on many fronts. Our investments over the past years in recycling capabilities in all parts of Gränges enable larger recycling volumes and higher efficiency. Our technical and operational experts optimize alloys and production methods for new, circular aluminium solutions that maintain the high quality and performance required by our customers. 

We are also building partnerships with customers and suppliers who share our sustainability ambition. In the quarter, we deepened cooperation with aluminium recyclers in Europe and Americas, secured 100 percent renewable electricity for our operations in Newport, and made good progress in our joint venture for low-carbon aluminium in China. I am convinced that these steps and others to come help build a strong competitive advantage for Gränges, today and in the future.

Second quarter outlook
End-customer markets remain hard to predict. However, a more normal downstream inventory situation is expected to contribute to somewhat stronger customer demand in the second quarter 2024 than in the same period 2023. We continue to focus on market share gain. In total, we currently expect sales volume for the second quarter to increase by a mid to high single-digit percentage year over year. We also aim to continue offsetting any further price pressure and continued wage inflation with productivity. 

Clear direction for the year 
Our focus on market share gain and productivity will remain unchanged throughout 2024. At the same time, we will continue our long-term work to build a world-leading aluminum rolling and recycling company. The return to growth with good profitability in the first quarter strengthens our confidence that we’re on the right way. I would like to thank the whole Gränges team for once again showing that we can make it happen, together. 

Jörgen Rosengren, President and CEO

Webcasted presentation
CEO Jörgen Rosengren and CFO Oskar Hellström will present Gränges’ interim report for the period January-March 2024 at a webcasted conference call Thursday April 25, 2024, at 10.00 CEST.

Join the live webcast here. To participate in the Q&A following the presentation, please register here. Upon registration, phone numbers and a conference ID to access the call will be provided. Please dial in a few minutes before the start of the webcast. The presentation will be in English.