Klockner & Co Expects Improved Income in 2021
German steel producer and metal distributor Klöckner & Co SE announced that the adverse effects on markets resulting from the COVID-19 pandemic led to a
German steel producer and metal distributor Klöckner & Co SE announced that the adverse effects on markets resulting from the COVID-19 pandemic led to a decline in Klöckner & Co’s sales in 2020 by around 19% YoY to EUR 5.1 billion. The Surtsey transformation project limited the negative impact on EBITDA before material special effects to a decrease of 10% from EUR 124 million in 2019 to EUR 111 million. Additionally affected by EUR 59 million in restructuring expenses, the net loss was EUR 114 million, compared with a net loss of EUR 55 million in 2019. Klöckner & Co SE CEO Gisbert Rühl said “Every crisis is also an opportunity. So we do not look back over the past year with a solely negative perspective. With the Surtsey project launched immediately after the onset of the pandemic, we gave an additional boost to our digital transformation. The resulting positive effects are now becoming increasingly visible and will lead together with the growing demand and the high price level to a very considerably improved income in the current year.”
The Group has not only further accelerated digitalization but also implemented accompanying as well as additional restructuring measures within the framework of the Surtsey transformation project. As part of these measures, more than 80% of the planned reduction in the workforce by a total of some 1,200 positions in Europe and the USA has already been implemented.
For fiscal year 2021, despite the ongoing COVID-19 pandemic, Klöckner & Co expects a significant rise in real steel demand and consequently a considerable increase in sales. Additionally driven by the positive effects of the Surtsey transformation project and the positive start-of-year price trend, the Group expects very considerable growth in EBITDA before material special effects. Substantial positive special effects are additionally expected from sales of assets as part of Surtsey. For the first quarter of 2021, an extraordinarily high operating income EBITDA of EUR 110–130 million before material special effects is expected.
Klöckner & Co is one of the largest producer-independent distributors of steel and metal products and one of the leading steel service companies. Based on its distribution and service network of some 140 locations in 13 countries, Klöckner & Co supplies more than 100,000 customers. Currently, the Group has some 7,300 employees. Klöckner & Co is in the process of digitalizing its entire supply and value chain. XOM Materials, an independent venture launched by the Klöckner & Co Group, is geared to develop into the leading industry platform for steel, metal and related products.
XOM Materials is the go-to online platform for trading materials such as steel, metals, and plastics. It provides intelligent, ready-made procurement and sales solutions for buyers and sellers aiming to future-proof their businesses. XOM enables customers to digitize easily without having to invest in developing their own technology. Klöckner & Co founded XOM Materials in 2017 in Berlin bringing together a wealth of experience in digitization, startups, and the materials industry and officially launched XOM Marketplace in 2018 followed by opening of second office in Germany & new US subsidiary opened in Atlanta in Georgia. XOM Materials also opened first XOM eShop in 2018. XOM Materials launched XOM eProcurement in 2020.