Gränges boosts profits and sales volume in Q1 2025

Sweden-based Gränges, a global leader in aluminum rolling and recycling in selected niches, has reported its first-quarter 2025 earnings, which include growth in sales volume and profit:

• Sales volume increased by 24 percent to 151,600 metric tons (167,110 short tons) from 122,000 metric tons (134,482 short tons) in Q1 2024.
• Adjusted operating profit increased to 409 million Swedish kroner ($42.2 million) from 356 million ($36.7 million) in Q1 2024.
• Profit for the period increased to 261 million Swedish kroner ($26.9 million) from 237 million ($24.4 million) a year earlier, and diluted earnings per share increased to 2.34 Swedish kroner (24 cents) from 2.23 (23 cents).
• Excluding the company’s newest plant in Shandong, China, total carbon emissions intensity (Scopes 1, 2 and 3) was 7.6 metric tons of CO2e per metric ton of production,
• The share of sourced recycled aluminum was 43.5 percent, a decline from 45.5 percent in Q1 of 2024.
• New operating segments established – Gränges Americas, Gränges Asia and Gränges Europe.

Record results

The company’s products are used for efficient climate control in transportation and buildings, electrification and battery components, recyclable packaging and more. 

“In the first quarter, Gränges delivered strong volume and profit growth in challenging external conditions,” says Gränges’ CEO Jörgen Rosengren. “Market demand was good in HVAC and stable in specialty packaging and other niches, while conditions in automotive remained soft. Thanks to increased market share, good operational performance and the newly gained business in Asia, we grew sales volume by 24 percent year-on-year.”

The company’s three operating segments—Gränges Americas, Gränges Asia and Gränges Europe—contributed to sales volume growth and increased earnings, he adds. “In Gränges Americas, sales volume grew by 8 percent, supported by good demand and continued market share gains. Profitability improved on the back of higher sales volume, increased productivity and improved mix. In Gränges Asia, sales volume increased by an impressive 81 percent, driven by the newly gained business and continued market share gains for applications like automotive heat exchangers, battery casing and cooling plates. The integration of our new plant in Shandong progressed well and also enabled new business in other niches. Higher sales volume and productivity more than offset price pressure. In Gränges Europe, we grew sales volume by 4 percent despite a soft market, thanks to new business wins in material for electric vehicles and other niches. Along with continued productivity improvements, this helped offset price pressure.”

Gränges Asia’s assets include its two Chinese production facilities in Shanghai and Shandong and the jointly owned casting and recycling center in Yunnan. Its total annual production capacity for rolled aluminum totals 280,000 metric tons, with its largest market being heat exchanger material for the automotive industry, which represented 59 percent of the region’s sales volume in the first quarter 2025.

Its Americas assets include three U.S. production facilities in Huntingdon, Tennessee; Salisbury, North Carolina; and Newport, Arkansas, with total annual production capacity for rolled aluminum of 260,000 metric tons. The largest markets for Gränges Americas are heat exchanger material for the HVAC industry and specialty packaging material, which represented 42 percent and 30 percent of the region’s sales volume in the first quarter 2025, respectively.

Gränges Europe includes two production facilities in Finspång, Sweden, and Konin, Poland, as well as the Gränges Powder Metallurgy business unit in St. Avold, France, with total annual production capacity for rolled aluminum of 260,000 metric tons. Heat exchanger material for the automotive industry, which represented 51 percent of the region’s sales volume in the first quarter 2025, is its largest market.

Rosengren says the company’s adjusted operating profit, which increased by 15 percent to 409 million Swedish kroner ($42.2 million), was its best first-quarter result in its history. “Operating cash flow was positive despite seasonal build-up of working capital and some remaining expenditure in the expansion programs we are finalizing.”

Navigate plan enters Phase 2

Rosengren says the company completed the first phase of its Navigate plan in 2024, finalizing major capacity investments that will form the foundation for sustainable growth.

“We’re now entering the second phase: building a leader. Our global team is focused on increasing utilization, optimizing price and mix and further improving productivity,” he says. Noting that the company’s 800,000 metric tons of capacity allow for growth, “we can execute this plan without major expansion projects and therefore with lower capital expenditure and better cash flow than previously,” Rosengren says. “The plan centers on ensuring safety, engaging our people and continuing our important sustainability journey to net-zero by 2040 together with our customers and partners.”

Impact of the trade tariffs

He adds that the “dramatically increased” global tariffs create uncertainty. “However, the direct impact on our business is limited. Our regionalized production setup close to our customers makes Gränges resilient. Although increasing tariffs on aluminum imports into the U.S. drive up our raw material purchase price there, this cost is passed on using automatic price formulas in accordance with industry practice.”

Rosengren adds that while tariffs could cause inflationary pressure over time that weaken consumer and industrial demand, “we believe the increased flexibility we have created over the past years will help us cope. We will focus on what we can control: market share gain, productivity improvement and cost control. That Gränges has no major investment planned also contributes to flexibility.”

Outlook

He adds that Gränges expects volume growth to continue in the second quarter with the help of market share gains, with 20,000 to 25,000 metric tons of additional quarterly sales volume in Shandong, in particular. “For the other units, we currently expect mid-single-digit volume growth,” Rosengren says. “Just as before, we intend to offset price pressure and cost increases with growth and productivity improvement but expect a negative currency translation effect.”

He continues, “We are very proud of our performance in the first quarter. Hopefully, 2025 will be our fourth year in a row with stable performance in choppy waters.”