Klöckner & Co is looking to increase its steel sales this year through enhanced digital initiatives.
The German steel and metal products producer and distributor saw its digital channels’ sales share increase to 32pc of total sales in 2019, up from 25pc a year earlier.
By 2022, it intends to deliver €100mn ($113.1mn) in additional income by leveraging artificial intelligence, among other digital enterprises, to sell materials and provide support to the steel industry, said Gisbert Rühl, Klöckner’s chief executive officer.
This year, the company anticipates slightly elevated sales and flat sales. However, it is preparing for COVID-19 to spread in Europe and has, therefore, projected significantly lower sales and shipments. Moreover, the company expects a Q1 2020 EBITDA of €20-30mn.
While the company’s sales rose last year, thanks to its digital initiatives, its production and sales volumes both decreased amid lower steel prices and weak demand. During the year, sales decreased by 7pc to €6.31bn from €6.79bn in 2018. In Q4 2019, Klöckner’s sales declined to €1.36bn from €1.69bn during the same quarter in 2018. The company’s shifted portfolios in the UK and France, as well as the German auto industry’s structural issues, impacted sales and shipments throughout the year.
Flat steel product sales comprised 48pc of Klöckner’s total sales, followed by long products at 18pc, other steel products at 11pc, stainless steel and aluminum at 9pc each, and tubes at 5pc.
In 2019, the company reported a 12.8pc decline in gross profits to €1.1bn from €1.32bn in 2018, because sales dwindled and its US operations recorded losses. The steel distributor’s EBITDA also decreased by 46pc to to €124mn in 2019 from €229mn during the prior year. In Q4 2019, its gross profits decreased to €268mn from €301mn during the same quarter in 2018, while its EBITDA decreased to €11mn from €30mn during the same comparable period.