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HomeNEWSINTERNATIONALSerious computer problems hit Liqui Moly supplies and turnover

Serious computer problems hit Liqui Moly supplies and turnover

Liqui Moly has apologised to its customers for supply problems caused by new computer software. The result has been a fall in turnover of 0.8% to €259.6 million for the first half of 2019.

The software was introduced in January and was supposed to simplify processes and reduce costs for the oil and additive specialist. “The software has had precisely the opposite effect and negatively affected the half-year results. If we were listed on the stock exchange, I would have to issue a profit warning,” says CEO Ernst Prost, pictured.

Among other things, the company software manages purchases, controls production, handles shipping and issues invoices. But instead of “anticipated minor teething issues”, there were “major difficulties that are still ongoing”, creating a backlog of orders.

“Understandably, customers are becoming frustrated and angry,” said Prost. “In my entire professional career I have not had to apologise so often to customers, as I have had to in the past six months. The level of service that we are currently delivering really pains me. The company is also incurring considerable extra costs, for example, because containers can only be half filled, delivery vehicles have to wait longer than planned to be loaded, or air freight needs to be used when items that are needed urgently do not arrive by ship in time.

“We are doing everything we can to minimise the impact on them and to bear any additional costs.”

All of this has left significant tracks in the company’s figures. Compared with the first half of 2018, turnover has fallen slightly by 0.8% to € 259.6 million. Earnings for the half-year fell by around 30% to € 11 million. “I never would have thought that in 2019 a change of software could send a whole company skidding off the road,” said Prost. “Liqui Moly has long been used to success – year on year, more turnover, more profit. The current situation has caught the company unawares. Fortunately, high performance levels mean that this is just a dent in profits and is a long way from threatening the existence of the company.

“We will not be making any short-sighted decisions such as short-time working or redundancies,” says Ernst Prost. “We will stay on track, we will continue with our expansion strategy, we will employee new people, we will invest in new products and new markets.”

Founded in 1957, the German company produces a broad range of automotive chemicals: motor oils and additives, greases and pastes, sprays and car care, glues and sealants. The company sells its products in more than 120 countries and is said to have generated € 544 million in sales in 2018.

 

 

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