Collective Mining | Corporate Presentation - April 2024
Klöckner & Co - Capital Goods & Steel Conference 2012
1. Klöckner & Co SE
A Leading Multi Metal Distributor
Commerzbank Capital Goods & Steel
Conference
Head of Investor
Relations & Corporate
Communications
Dr. Thilo Theilen
August 2012
2. Disclaimer
This presentation contains forward-looking statements which reflect the current views of the management of
Klöckner & Co SE with respect to future events. They generally are designated by the words “expect”, “assume”,
“presume”, “intend”, “estimate”, “strive for”, “aim for”, “plan”, “will”, “strive”, “outlook” and comparable expressions and
generally contain information that relates to expectations or goals for economic conditions, sales proceeds or other
yardsticks for the success of the enterprise. Forward-looking statements are based on currently valid plans, estimates
and expectations. You therefore should view them with caution. Such statements are subject to risks and factors of
uncertainty, most of which are difficult to assess and which generally are outside of the control of Klöckner & Co SE. The
relevant factors include the effects of significant strategic and operational initiatives, including the acquisition or
disposition of companies. If these or other risks and factors of uncertainty occur or if the assumptions on which the
statements are based turn out to be incorrect, the actual results of Klöckner & Co SE can deviate significantly from those
that are expressed or implied in these statements. Klöckner & Co SE cannot give any guarantee that the expectations or
goals will be attained. Klöckner & Co SE – notwithstanding existing obligations under laws pertaining to capital markets –
rejects any responsibility for updating the forward-looking statements through taking into consideration new information
or future events or other things.
In addition to the key data prepared in accordance with International Financial Reporting Standards, Klöckner & Co SE is
presenting non-GAAP key data such as EBITDA, EBIT, Net Working Capital and net financial liabilities that are not a
component of the accounting regulations. These key data are to be viewed as supplementary to, but not as a substitute
for data prepared in accordance with International Financial Reporting Standards. Non-GAAP key data are not subject to
IFRS or any other generally applicable accounting regulations. Other companies may base these concepts upon other
definitions.
2
3. Overview Q2 and update on restructuring01
Financials Q2 2012
Outlook
Appendix
02
03
04
Agenda
3
4. Overview Q2 2012
• Turnover increased by 5.7% yoy driven by acquisitions and organic growth in USA and
sequentially flat (+0.4% vs Q1)
• European turnover down -7.9% yoy also due to exiting low margin business whereas
Americas up 34.2% yoy (organically up 10.0%)
• Sales increased by 4.2% yoy and by 0.9% sequentially
• EBITDA at €50m met guidance of €50-60m before restructuring despite worsening market
environment (rep. EBITDA €33m incl. €17m for restructuring expenses mainly in Spain)
• Achievement of last years’ EBITDA in current fiscal year mainly due to worsening situation
in Europe rather unlikely
• Scope of restructuring measures significantly expanded, initial measures almost concluded
• Expansion into US-automotive sector by building a Steel-Service-Center on the site of
ThyssenKrupp plant in Alabama
• External CFO appointed to start latest Jan 1, 2013
4
01
5. • Steel demand currently around 25% below peak and not
expected to recover shortly
• Overcapacity persisting also on distribution level until
shakeout wave
• Early anticipation with assumed demand -5% in January
created headroom for restructuring ahead of others
• Restructuring to adopt to current level of activity to avoid
losses and position ourselves for a potential recovery
• Facing a phase with meager profitability, but balance sheet’s
good shape should not be at risk
5
Europe USA
• Further market growth, albeit currently with reduced pace
• Successful integration of Macsteel enables us to outgrow the
market
• Nevertheless, margins currently affected by price erosion in
carbon also due to high USD and import situation
• Despite recent slowdown in economic development further
market recovery most likely in the US
• We further outgrow the market by increasing contractual
business to create a solid base for future uptick
• Key market for future growth also with organic measures due
to the superior structural attractiveness of the US steel
distribution and service center market
Restruc-
turing
Growth
Global market assessment and our reaction01
6. Europe/Macsteel
• Europe: expense reductions
• US: realizing synergies w/
Macsteel
• Cuts in administration costs and
sales overheads
• Reduction of low-margin
commodity business
• Expanding higher value-added
activities
€70m
520 out of 700 already
€13m
General measures
Intensified measures in specific countries01
From Q2 2012 on
Step 1
September 2011
Spain + EEC France
• Additional structural measures in
Spain
• Withdrawal from EEC
• Realignment of France
organization including structural
measures
• Spain:
• Closure of 11 sites
• New network structure
and logistics concept
• EEC:
• Full exit of EEC
• Closure of ~10 sites
• Unified sales department in
each region
• Logistics optimization
• New network structure
€20m
600
€17m for Spain in Q2 + €15-20m for France in Q3
Focusing on structural changes
+
6
*Excluding potential disposal effects of EEC and Spanish properties
Step 2
Scope
Measures
EBITDA impact
Employee reduction
One-offs* booked in
EBITDA
13. Net income and EPS02
• Net income adjusted for restructuring and impairments still
slightly positive with €3m
• Net income includes €17m restructuring already within
EBITDA, €30m impairments partly offset by €6m income
from adjustment of Frefer put liability and €10m ppa effects
• Taxes negatively impacted due to non-recognition of tax
assets on losses incurred in Q2
Comments
13
EPS basic (€)*
Net income (€m)
* adjusted for capital increase
** Before restructuring expenses and impairments
0.69
0.21
0.25
0.65
0.07
-0.11
-0.27
-0.10
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
47
15 17
44
5
-12
-27
-10
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
(€m) H1 2012 Q2 2012
Stock write-downs – 4 – 4
Personnel expenses – 10 – 7
Other restructuring expenses – 6 – 6
EBITDA impact – 20 – 17
Impairments Eastern Europe and
Spain
– 9 – 9
Restructuring expenses total – 29 – 26
• Goodwill impairment in Brazil of €21m due to ongoing weaker
macro environment
3**
Q2
0.03**
Q2
2012
-0.38
-38
2012
Q2
14. NWC and net debt almost stable sequentially02
Cash flow reconciliation in Q2 2012
(€m)
14
60,0
EBITDA
Change in
NWC Taxes Other
CF from
operating
activities Capex Free CF
Development of net financial debt in Q2 2012
(€m)
* exchange rate effects, interest
Q1
CF from
operating
activities Capex Other* Q2
33
5 -7
-1
30
-8
22
-573
+30
-8
-31
-582
15. Strong balance sheet02
*Gearing = Net debt/Equity attributable to shareholders of
Klöckner & Co SE less goodwill from business
combinations subsequent to May 28, 2010
**Total capital = net debt plus equity (w/o minorities)
Comments
• Equity ratio of 37%
• Net debt of €582m
• Gearing* at 36%
• Net debt to total capital** at 25%
• NWC increased by €151m to €1,685m ytd
• NWC/sales at new normal ~21%
50%
25.2%
29.7%
23.3%
2.1%
19.7%
Balance sheet total June 30, 2012: €4,938m
36.5%
30.2%
33.3%
Non-current
assets
1,244
Inventories
1,465
Trade receivables
1,153
Other current
assets 102
Liquidity
974
Equity
1,804
Non-current
Liabilities
1,491
Current liabilities
1,643
100%
0%
15
16. Balanced maturity profile despite repayment of Convertible in July 201202
Facility (€m) Committed
Drawn amount
June 30, 2012* December 31, 2011*
Bilateral Facilities1) 615 200 126
Other Bonds 14 14 20
ABS2) 519 193 175
Syndicated Loan 500 226 226
Promissory Note 343 345 349
Total Senior Debt 1,991 978 896
Convertible 20073) 4) 325 329 319
Convertible 20093) 98 86 86
Convertible 20103) 186 163 157
Total Debt 2,600 1,556 1,458
Cash 4) 974 987
Net Debt 582 471
€m June 30, 2012
Adjusted equity 1,635
Net debt 582
Gearing5) 36%
Maturity profile of committed facilities and drawn
amounts (€m)
Committed facilities
Drawn amounts
6444)
124
1,035
296
501
3944)
95
447
266
382
2012 2013 2014 2015 Thereafter
16
*Including interest
1) Including finance lease
2) On April 25th, 2012 the European ABS was extendend until May 2014 and the volume reduced by €60 million to € 360 million
3) Drawn amount excludes equity component
4) Repayment of convertible bond of €325 million in July 2012 out of cash
5) Net debt/Equity attributable to shareholders of Klöckner & Co SE less goodwill from business combinations subsequent to
May 28, 2010
17. Overview Q2 and update on restructuring01
Financials Q2 2012
Outlook
Appendix
02
03
04
Agenda
17
18. Outlook
• Macro assumptions
• In Europe, our base assumption continues to be business as it is for the remainder of the year
• In the US, recent macro news point to a slowdown in H2
• Q3 2012
• Turnover in Q3 expected to be slightly down vs Q2
• EBITDA in Q3 expected to be €25-35m before restructuring costs
• FY 2012
• Turnover and sales still expected to increase year on year despite challenging market
environment
• Achievement of prior year EBITDA not anymore realistic given H2 EBITDA bef. restructuring
expected to be below the €98m in H1
03
18
19. Overview Q2 and update on restructuring01
Financials Q2 2012
Outlook
Appendix
02
03
04
Agenda
19
20. Appendix04
20
Financial calendar 2012/2013
November 7, 2012 Q3 interim report 2012
March 6, 2013 Annual Financial Statements 2012
May 8, 2013 Q1 interim report 2013
May 24, 2013 Annual General Meeting 2013
August 7, 2013 Q2 interim report 2013
November 6, 2013 Q3 interim report 2013
Contact details Investor Relations
Dr. Thilo Theilen, Head of Investor Relations & Corporate Communications
Phone: +49 203 307 2050
Fax: +49 203 307 5025
E-mail: thilo.theilen@kloeckner.com
Internet: www.kloeckner.de
22. Strong Growth: 24 acquisitions since the IPO04
22
Acquisitions1) Acquired sales1),2)
€141m
€567m
€108m
2
4
12
2
2005 2006 2007 2008 2009 2010
4
€231m
€712m
2011
2
€1.15bn
¹ Date of announcement 2 Sales in the year prior to acquisitions
Country Acquired 1) Company Sales (FY)2)
GER Mar 2010 Becker Stahl-Service €600m
CH Jan 2010 Bläsi €32m
2010 4 acquisitions €712m
US Mar 2008 Temtco €226m
UK Jan 2008 Multitubes €5m
2008 2 acquisitions €231m
CH Sep 2007 Lehner & Tonossi €9m
UK Sep 2007 Interpipe €14m
US Sep 2007 ScanSteel €7m
BG Aug 2007 Metalsnab €36m
UK Jun 2007 Westok €26m
US May 2007 Premier Steel €23m
GER Apr 2007 Zweygart €11m
GER Apr 2007 Max Carl €15m
GER Apr 2007 Edelstahlservice €17m
US Apr 2007 Primary Steel €360m
NL Apr 2007 Teuling €14m
F Jan 2007 Tournier €35m
2007 12 acquisitions €567m
2006 4 acquisitions €108m
USA Dec 2010 Lake Steel €50m
USA Sep 2010 Angeles Welding €30m
Brazil May 2011 Frefer €150m
USA April 2011 Macsteel €1bn
2011 2 acquisitions €1,150m
23. Comments
Balance sheet as of June 30, 201204
23
(€m) June 30, 2012 December 31, 2011
Non-current assets 1,244 1,295
Inventories 1,465 1,362
Trade receivables 1,153 922
Cash & Cash equivalents 974 987
Other assets 102 140
Total assets 4,938 4,706
Equity 1,804 1,843
Total non-current
liabilities
1,491 1,526
thereof financial liabilities 1,054 1,068
Total current liabilities 1,643 1,337
thereof trade payables 933 750
Total equity and
liabilities
4,938 4,706
Net working capital 1,685 1,534
Net financial debt 582 471
Shareholders’ equity:
• Stable at 37%
Financial debt:
• Gearing at 36%
• Gross debt of €1.6bn and
cash position of €1.0bn
result in a net debt position
of €582m
NWC:
• Increase mainly due to
seasonal effects
24. Profit & loss Q2 2012 vs. Q2 201104
(€m) Q2 2012 Q2 2011 Δ in %*
Sales 1,964 1,885 +4.2
Gross profit 340 337 +0.7
Personnel costs -162 -146 -10.9
Other operating expenses -152 -141 -8.4
EBITDA 33 62 -46.2
Depreciation, Amortization, Impairments -56 -26 -117.0
EBIT -23 36 -165.6
Financial result -18 -21 +16.3
EBT -41 15 -379.0
Taxes 3 -9 +132.2
Net income -38 5 -800.9
Minorities 0 0
Net income attributable to KCO shareholders -38 5 -786.9
24
* earnings impact
04
25. Segment performance Q2 201204
25
(€m) Europe Americas HQ/Consol. Total
Turnover (Tto)
Q2 2012 1.097 766 1.863
Q2 2011 1.192 571 1.763
Δ % -7,9 34,2 5,7
Sales
Q2 2012 1.237 727 1.964
Q2 2011 1.365 520 1.885
Δ % -9,4 39,7 4,2
EBITDA
Q2 2012 19 21 -7 33
% margin 1,5 2,9 1,7
Q2 2011 50 23 -11 62
% margin 3,6 4,4 3,3
Δ % EBITDA -61,6 -8,2 -46,2
• Excl. MSCUSA and Frefer turnover
increase in Americas was 10.0% and
sales increase was 16.1% yoy
• Without acquisitions total turnover
decreased by 4.0% and total sales
by 4.8% yoy
Comments
26. Acquisitions shift exposure towards more promising regions and products04
24% Long productsQuality steel/Stainless steel 8%
Aluminium 7%
Tubes 6%
42% Flat productsOthers 13%
Sales by product
28% USA
France/Belgium 16%
Switzerland 13%
UK 6%
28% Germany/EEC
Spain 4%
Sales by markets
Netherlands 3%
Brazil 1%
China <1%
26
Machinery and mechanical
24% engineering
Miscellaneous 11%
Local dealers 10%
Household appliances/
Consumer goods 7%
37% Construction industry
Automotive industry 11%
Sales by industry
As of December 2011
04
27. Current shareholder structure04
27
Geographical breakdown of identified
institutional investors
Comments
• Identified institutional investors
account for 47%
• German investors incl. retail
dominate
• Top 10 shareholdings represent
around 31%
• Retail shareholders represent 34%
• 100% freefloat
As of June 2012
Other World 7%
US 30%
Other EU 17%
Switzerland 5%
France 9%
Germany 28%
UK 4%
28. Our symbol
the ears
attentive to customer needs
the eyes
looking forward to new developments
the nose
sniffing out opportunities
to improve performance
the ball
symbolic of our role to fetch
and carry for our customers
the legs
always moving fast to keep up with
the demands of the customers
28
