Klöckner & Co SE reports lower earnings in first quarter of 2019
by David Fleschen
löckner & Co reports price-driven sales growth of 4.6% to €1.7 billion in the first quarter of 2019. Operating income (EBITDA), at €34 million, was below the €56 million recorded in the first quarter of 2018. While Klöckner & Co benefited from a very positive price environment in the first quarter of the prior year, earnings in the first three months of fiscal year 2019 were impacted by negative price effects. Demand was also down, primarily due to the weakness of the European automotive sector. Compared with net income of €21 million in the prior-year quarter, the net loss amounted to €10 million. As a result, earnings per share were €-0.10 (Q1 2018: €0.21).
Digitalization of the supply and value chain as well as expansion of the XOM Materials independent industry platform are core components of the “Klöckner & Co 2022” strategy. The proportion of sales generated through digital channels further increased to 27% in the first quarter of 2019 (Q1 2018: 19%). XOM Materials likewise continued its dynamic growth, with 17 contracted distributors and 230 customers on the platform in April 2019. Additionally, XOM Materials was launched in the USA in the first quarter of 2019. The Group’s digital unit, kloeckner.i, began providing consulting services to external companies during the reporting period. An initial consulting project with a DAX 30 company is already being implemented.
In light of negative price effects and a slowdown in demand – notably in the automotive business – Klöckner & Co expects to generate operating income (EBITDA) of €50 million to €60 million in the second quarter and full-year EBITDA of €180 million to €200 million before significant non-recurring items.
With regard to EBITDA after significant non-recurring items, the aforementioned negative impact will be mainly compensated by the sale of one site in the United Kingdom with an expected gain of more than €30 million.
Source: Klöckner & Co, Photo: Fotolia