Gränges' year-end report 2024: Record-high sales volume and earnings for the year

Fourth quarter 2024

• Sales volume increased by 21.0 percent to 130.3 ktonnes (107.7) and net sales increased to SEK 6,184 million (4,967).
• Adjusted operating profit increased to SEK 324 million (245).
• Adjusted operating profit per tonne rose to 2.5 kSEK (2.3).
• Operating profit increased to SEK 276 million (245) and included items affecting comparability of SEK -48 million (-).
• Profit for the period increased to SEK 175 million (108).
• Diluted earnings per share increased to SEK 1.67 (1.01).
• Adjusted cash flow before financing activities was SEK -905 million (693).
• Total carbon emissions intensity (scope 1+2+3) decreased to 7.8 tonnes CO2e/tonne (8.5).
• The share of sourced recycled aluminium increased to 45.4 percent (43.6). 

 
January – December 2024

• Sales volume increased by 9.2 percent to 505.8 ktonnes (463.2) and net sales increased to SEK 23,506 million (22,518).
• Adjusted operating profit increased to SEK 1,571 million (1,536).
• Adjusted operating profit per tonne amounted to 3.1 kSEK (3.3).
• Operating profit was SEK 1,523 million (1,576) and included items affecting comparability of SEK -48 million (40).
• Profit for the period amounted to SEK 1,010 million (1,010).
• Diluted earnings per share increased to SEK 9.51 (9.48).
• Adjusted cash flow before financing activities was SEK 63 million (2,826).
• Financial net debt was SEK 4,292 million on December 31, 2024 (SEK 2,741 million on December 31, 2023), corresponding to 1.8 times adjusted EBITDA (1.1 times on December 31, 2023).
• Total carbon emissions intensity (scope 1+2+3) decreased to 7.5 tonnes CO2e/tonne (8.4).
• The share of sourced recycled aluminium increased to 46.2 percent (41.6).
• The Board of Directors proposes a dividend of SEK 3.20 (3.00) per share, corresponding to 34 percent (32) of the profit for the year.

 
Comments by Gränges’ CEO Jörgen Rosengren:
Accelerating growth

During the fourth quarter, customer demand improved year-on-year in most markets. Our sales efforts also continued to pay off. Sales to automotive customers were stable in Europe and decreased in Americas but grew in Asia thanks to market share gains. Sales to HVAC customers increased significantly, as an impending regulatory change led to unusually strong HVAC manufacturing activity in Americas. Sales to other customer categories saw strong growth as well, driven by more normal downstream inventory levels
and significant market share gains. In summary, all regions contributed to an impressive 21 percent sales volume growth, propelling our full-year sales volume to a record 506 ktonnes.
 
A new chapter for Gränges Asia
The strongest growth was achieved in Asia. It would not have been possible without successfully completing our acquisition of a 160 ktonnes production facility in Shandong, China, and very quickly ramping up production there.
 
Our first aim was to reach break-even as soon as possible. To achieve this, we aggressively took market share in relatively low-margin product segments. With this sales mix, full-year sales volume of about 90 ktonnes are needed to cover the additional fixed cost. We managed to reach this important milestone already in our first invoicing month, December. I am very proud of this achievement by the whole team, including our 600 new colleagues.
 
During 2025, we aim to retain the volume gained rather than growing it further. Instead, we will focus on lowering the break-even point by optimizing price and mix, landing new, higher-margin business, and improving cost efficiency. With these actions, we will work toward our objective to make the acquisition accretive to earnings per share in 2025.
 
Volume and productivity offset price pressure
We continued to deliver good cost savings from procurement, metal management, and labor productivity. In both Americas and Europe, the cost savings together with strong volume growth more than offset a significant price pressure. In Asia, the additional volume came at a breakeven profit. For Gränges as a whole, operating profit increased by more than 30 percent, bringing the full-year adjusted operating profit to SEK 1,571 million, our best ever.
 
Finalizing the first phase of our Navigate plan: a strong foundation
In 2024, we also finalized the first phase of our Navigate plan. We think we have achieved strong results during these three years: adjusted operating profit and net profit increased by 60 percent and 70 percent, respectively, in a challenging market. Our recycling volumes have increased five-fold and the carbon intensity of our products has decreased by 35 percent since 2017. Our multi-year capacity expansion program is now almost finalized, and all new assets will be fully operational in the second half of 2025. We will then have a total annual production capacity of 800 ktonnes, 40 percent higher than in 2021.
 
We are also happy to see our employee satisfaction increase significantly. This comes on the back of heavy investment in creating a safer and better workplace, in leadership training at all levels, and in strengthening the engagement of the whole team.
 
Aiming for improved cash flow in 2025
Looking ahead, we have no large expansion projects planned. Instead, our ambition is to increase utilization, optimize price and mix, and further improve productivity. This will help our cash flow. For 2025, we’re projecting capital expenditure of SEK 700 – 800 million, compared to above SEK 1.3 billion in 2024. And while the strong growth in 2024 drove working capital build-up, we do not expect a similar effect in 2025. Our ambition is to achieve a significantly better cash conversion in 2025 than in 2024.
 
Continued strong growth expected in first quarter
In Asia, we expect to retain the additional sales volume built up in the fourth quarter, which corresponds to about 90 ktonnes on a full-year basis. This volume will however not contribute to the operating profit, as it breaks even with the acquired fixed cost with the current price/mix.
 
On a like-for-like basis, excluding the additional sales volume in Asia, we expect muted demand and some market share gains to result in a mid-single-digit volume growth in the first quarter compared to 2024.
 
We expect continued price pressure. In addition, we expect that increasing prices for aluminum scrap, changes to the Chinese export taxation, and labor cost inflation will weigh on operating profit. Our ambition is to continue to offset these effects by volume growth, cost reduction and productivity improvement.
 
Looking back at 2024, we have a lot to be proud of. For the third year in a row, we achieved all-time-high financial and sustainability performance. We returned to growth and picked up speed during the course of the year. We made a transformational acquisition in Asia, and finalized the first phase of our Navigate plan. In short: we made our company much stronger.
 
At Gränges, we say “people make the difference”. This was certainly true in 2024. It’s an honor to lead this amazing team, and I’d like to thank all my colleagues for their dedication and outstanding work throughout 2024, and wish them all the best for 2025.

Jörgen Rosengren, President and CEO

Webcasted presentation
CEO Jörgen Rosengren and CFO Oskar Hellström will present Gränges’ year-end report 2024 at a webcasted conference call Thursday January 30, 2025 at 10.00 CET.
 
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 webcast begins. The presentation will be in English.