German steelmaker Kloeckner expects a rise in real steel demand and a corresponding increase in sales in 2021. The company has also projected EBITDA growth of €110-130mn ($133-157mn) before material costs in Q1 2021, more than double its full-year 2020 profitability.
Last year, Kloeckner’s shipments fell by 13.7pc to 4.87mn mt against 5.65mn mt in 2019 as the company accelerated digitalization and restructured internal operational flows to maximize cost management. Its workforce has been reduced by 1,200 positions or 80pc of the planned reduction in Europe and the USA as part of the plan.
Kloeckner’s digital sales rose to 45pc of total sales in Q4 2020 compared to 32pc in the same quarter a year ago. The company intends to generate 60pc of the group’s sales via the digital application in 2022. Moreover, its XOM Materials open industry platform increased the value of all products sold via the platform from about €10mn in 2019 to €140mn in 2020. The application allows buyers to compare offers with multiple items, features, terms, and conditions. The company expects the XOM tool to manage €1bn in sales this year.
Sales revenue at Kloeckner declined by 18.8pc to €5.13bn in 2020 compared to €6.32bn the previous year while gross profit fell by 9.6pc to €1.05bn against €1.16bn. Kloeckner’s profit margin increased from 18.3pc in 2019 to 20.4pc this year though EBITDA slid by 62.6pc to €52mn in 2020 compared to €139mn in 2019.
In Q4 2020, Kloeckner’s shipments dropped by 4.4pc to 1.2mn mt, or 24.6pc of the yearly shipments, compared to 1.25mn mt in the same quarter of the previous year. Sales revenue fell by 9.7pc to €1.23bn in Q4 2020 against the same year-ago quarter though gross profit increased by 2.6pc on rising finished steel prices which supported the higher gross profit margin of 22.2pc compared to 19.6pc in the year-ago quarter.