Service Centers

Going Digital Will Help Lift Kloeckner’s Results

March 13, 2020

Distributor Kloeckner anticipates its continued drive to sell metals online, along with stable steel prices, will boost operating income this year.

Efficiency improvements and cost savings, such as those generated through growing automation of processes through digital applications, will also play their part in raising earnings, the German company said.

Kloeckner distributes carbon sheet, long, tube and hollow steel, stainless steel and aluminum products mainly in Europe and North America.

In Q4 last year the share of sales generated via digital channels was 32 percent versus 25 percent in the year-ago period. The targets are to top 40 percent this year and 60 percent by 2022.

CEO Gisbert Ruehl said: “Despite the difficult market environment and disappointing earnings, we have continued to drive Kloeckner’s digital transformation forward persistently. Thanks to the substantial progress we have made, we are optimistic that this will deliver an additional contribution to operating income of at least €100 M by 2022.”

The comments came after the group announced a net loss of €55 M ($60.2 M) last year, compared with earnings of €69 M the year before. Falling steel prices and weak demand caused a 7 percent decline in turnover to €6.3 bn with adjusted operating income (EBITDA) down 45.8 percent to €124 M.

Editor’s note: This article was reported by CRU. Learn more about CRU’s services at www.crugroup.com