Klöckner sees upward movement in Q1, plans further cuts

Germany-based distributor and service center operator Klöckner is to streamline and centralise the management structure of its European distribution services, as the business area remains “problematic”, CEO Gisbert Rühl said on Wednesday, while reporting upward trends in the company’s first quarter results.

In Q1 this year, Klöckner increased its EBIDTA operating profit by €6 million year-on-year to €16 million. Owing to restructuring processes, which included the closure of 16 locations primarily in France and the UK, sales revenue went down by 18.3% y-o-y to €1.4 billion and shipments decreased by 6.3% to 1.6 million metric tons.

“We will centralise distribution and get rid of double functions within countries, working transnationally so that the European distribution can be self-sustaining,” said Rühl. Klöckner’s net income remained negative at €14 million, but saw a significant positive trend from last year’s first quarter when the net result was a loss of €22 million.

Klöckner wants to save around €25 million through continuing cost cutting, but said it would not close any more sites in Europe. “We cannot have CFOs and COOs on every country level. The reduced headcount will be noticeable in the organisational structure,” said Rühl, adding that he cannot rule out that job cuts in the management structure would exceed 100.

Looking ahead to the coming months, Klöckner said it is confident that it will increase its income further in Q2 and return to positive net income in its full-year results thanks to a stabilised market (see related article).

Laura Varriale, PLATTS