Gränges' year-end report 2023: Strong finish to a record year

Fourth quarter 2023

• Sales volume decreased by 2.4 percent to 107.7 ktonnes (110.3) and net sales decreased to SEK 4,967 million (5,366).
• Adjusted operating profit increased to SEK 245 million (153).
• Adjusted operating profit per tonne increased to 2.3 kSEK (1.4).
• Operating profit was SEK 245 million (153) and includes no items affecting comparability (-).
• Profit for the period increased to SEK 108 million (51).
• Diluted earnings per share increased to SEK 1.01 (0.48).
• Adjusted cash flow before financing activities was SEK 693 million (679).
• Total carbon emissions intensity (scope 1+2+3) decreased to 8.5 tonnes CO2e/tonne (8.9).
• The share of sourced recycled aluminium increased to 43.6 percent (33.5).

January-December 2023

• Sales volume decreased by 3.4 percent to 463.2 ktonnes (479.3) and net sales decreased to SEK 22,518 million (24,492).
• Adjusted operating profit increased to SEK 1,536 million (1,150).
• Adjusted operating profit per tonne increased to 3.3 kSEK (2.4).
• Operating profit was SEK 1,576 million (1,136) and includes items affecting comparability of SEK 40 million (-14).
• Profit for the period increased to SEK 1,010 million (700).
• Diluted earnings per share increased to SEK 9.48 (6.58).
• Adjusted cash flow before financing activities was SEK 2,826 million (618).
• Financial net debt was SEK 2,741 million on December 31, 2023 (SEK 3,882 million on December 31, 2022), corresponding to 1.1 times adjusted EBITDA (1.9 times on December 31, 2022).
• Total carbon emissions intensity (scope 1+2+3) decreased to 8.4 tonnes CO2e/tonne (8.9).
• The share of sourced recycled aluminium increased to 41.6 percent (32.7).
• The Board of Directors proposes a dividend of SEK 3.00 (2.50) per share, corresponding to 32 percent (38) of the profit for the year.

Comments by Gränges’ CEO Jörgen Rosengren: Our best year so far
The fourth quarter marked a strong finish to a record year for Gränges despite muted demand. Good growth in Eurasia and in Automotive was offset by lower volumes in Americas and HVAC, mainly driven by downstream off-season destocking. Compared with 2022, our global sales volume was slightly down in the quarter, and about 3 percent down for the full year.

Successful execution of Navigate plan
2023 was a record year for Gränges in many regards, thanks to good execution of our Navigate plan for sustainable growth. Our systematic work on productivity and price was helped not the least by our recently completed recycling and casting center in Huntingdon. Full-year adjusted operating profit rose to an all-time-high of SEK 1.5 billon, a result to be proud of.

We continued our long-term work to build an industry-leading company. Inventory management again delivered good cash flow, significantly strengthening our balance sheet. This in turn contributed to a strong development of our return on capital and helped us achieve our best-ever net profit and earnings per share. We also made our workplace safer for all colleagues by an ambitious risk-reduction program. Innovation and new business development continued, resulting in good growth in battery cooling plates and other new niches.

Sustainability is a main focus area of Navigate. We grew our recycling in all regions, thanks to hard work, new partnerships, and new capabilities. Our 2023 recycling rate increased to an impressive 42 percent, our best level ever. We contracted renewable electricity in both Asia and Americas, in addition to existing contracts in Europe. Our carbon emissions intensity decreased to record-low levels, well in line with our long-term plans. These are important steps on our journey toward net-zero in 2040, a goal recently validated by the Science Based Targets initiative. Our sustainability work received an EcoVadis Platinum rating for the third time in a row, putting us in the top 1 percent of our industry.

We are also investing in sustainable growth, for instance in a second recycling and casting center in Americas, which will enable us to provide products with a very low carbon footprint. We formed a new joint venture in China for recycling and green aluminium produced using hydropower. When fully operational, it will significantly reduce our total carbon emissions. Our investment in battery foil manufacturing in all three regions progressed as planned and attracts strong customer interest.

A new year brings new challenges
Market demand is still hard to predict but expected to remain weak in the first quarter 2024. We expect slightly lower sales volume compared with the first quarter 2023, especially in Americas. Our aim for 2024 is to offset increased price pressure and continued wage inflation with increased market share and cost productivity.

Reinforcing our leadership
We are quite proud of our performance in 2023. We made our company much stronger, we made it much more sustainable, and we achieved our best financial and sustainability results ever. And we did this in quite a challenging environment.

Going forward, our approach will be the same: to stay focused on the long term while flexibly meeting any short-term challenges. We have the right strategy. It’s an honor to lead our talented and ambitious team in our work to continue to be a world-leading aluminium rolling and recycling company. I’d like to thank the entire Gränges team for outstanding efforts during 2023.

Jörgen Rosengren, President and CEO

Webcasted presentation
CEO Jörgen Rosengren and CFO Oskar Hellström will present Gränges’ year-end report 2023 at a webcasted conference call Thursday January 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.