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Charts Klöckner & Co SE Analyst Conference Full Year 2013

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Charts accompanying the FY2013 Analyst Conference for investors and analysts on March 6, 2014 …

Charts accompanying the FY2013 Analyst Conference for investors and analysts on March 6, 2014
Press Release: http://kloeckner.com/en/press-releases-4865.php
Read full report at http://kloeckner.com/global/data/Kloeckner_Co_AnnualReport_2013.pdf (5,2MB)

Published in: Investor Relations

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  • 1. Klöckner & Co SE A Leading Multi Metal Distributor Gisbert Rühl CEO FY 2013 Results Analysts’ and Investors’ Conference Marcus A. Ketter CFO March 6, 2014
  • 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. Klöckner & Co SE A Leading Multi Metal Distributor Gisbert Rühl CEO Highlights and update on strategy
  • 4. Agenda 01 Highlights and update on strategy 02 Financials 03 Outlook 04 Appendix 4
  • 5. 01 • • Improved results despite overall weaker markets due to self-help measures Steel markets once again with disappointing development in 2013; steel distribution market declined by 7% in Europe and was only stable in the US Turnover decreased by 8.8% to 6.4m To also due to restructuring measures (-4.4%p) and further reduction of commodity business • • Sales additionally impacted by lower price level down by 13.7% to €6.4bn • Improvement of EBITDA before restructuring from €137m to €150m includes €11m due to sale of property in France in Q4 • FCF generation of €107m mainly as a result of strict NWC-management. Net debt consequently down from €422m at the end of 2012 to €325m • • • Gross profit before restructuring costs declined significantly less than sales by 8.0%. Gross profit margin consequently improved by 1.2%p to 18.7% Restructuring program KCO 6.0 finalized Implementation of KCO WIN measures on track Acquisition of Riedo supports strategy to increase processing 5
  • 6. 01 Negative market impact again overcompensated in Q4 KCO 6.0 EBITDA-impact Comments -23 Q4 40 22 Net KCO 6.0 effect: €18m -57 42 33 24 16 9 -35 EBITDA bef. restr. Q4 2012 Restr. costs -6 EBITDA Q4 2012 Volume Effect Price Effect • 24 -3 -6 KCO 6.0 KCO GP Effect 6.0 Cost Effect OPEX • EBITDA Q4 2013 • Market related GP effect: -€9m FY 150 137 Net KCO 6.0 effect: €61m -77 81 26 47 34 60 Restr. Costs EBITDA FY 2012 OPEX EBITDA FY 2013 -45 84 -33 EBITDA bef. restr. FY 2012 124 €4m Volume Price Effect Effect • In Q4 measures contributed additional €18m to EBITDA against prior year, FY €61m Cost cuts achieved trough KCO 6.0 amounted to €24m in Q4, FY €84m Negative volume and price effects of €9m in Q4 overcompensated by €18m positive KCO 6.0 effects Negative volume and price effects FY of €78m for the most part compensated by €61m positive KCO 6.0 effects -23 KCO 6.0 KCO GP Effect 6.0 Cost Effect Market related GP effect: -€78m 6 Restructuring charges
  • 7. 01 Restructuring program KCO 6.0 fully implemented Measures • • • • • Total headcount reduction of >2,200 ~ 1/5 of total workforce ~ Total site closures 70 ~1/4 of total sites ~ Total cost reduction of €174m (€131m realized) Total annual EBITDA-impact of ~€150m (€112m realized) Reduction of NWC by €133m (€106m realized)* * More customers retained than expected €51m 2011-2012  €61m 2013  Total annual EBITDA-impact of ~€150m €41m 2014 already realized 7
  • 8. 01 Additional improvement potential through KCO WIN Measures • • • Effective sales force management (structured sales-approach, advanced customer segmentation, specific target setting, cross-selling, tracking, incentive-schemes, regular performance reviews) Improved pricing (price guidance, avoid leakage, systematic review) Effective sourcing and logistics (bundling, bonus schemes) 2014 €20m Total annual EBITDA-impact of ~€50m 2015 €30m 8
  • 9. 01 Further implementation of “Klöckner & Co 2020” strategy currently focused on operational improvements through KCO WIN and differentiation External & internal growth • • External growth with focus on higher value-added processing Internal growth with focus on US market Operations • Focus on KCO WIN Growth and optimization Broad product range Differentiation Higher valueadded processing Advanced tools & systems Enabling activities Management & personnel development Controlling & IT systems • • • • • • Providing a broad range of steel and metal products through widespread network structure and not only from a single site Expansion of higher value-added processing business like 3d tube laser and flat bed laser etc. Pushing forward innovations and extension of our services Strengthen the understanding, contribution and achievement of individual performance to support the business model Identify, develop & retain potentials to ensure growth and sustainability within our business Global collaboration and state-of-the-art controlling, accounting and treasury systems 9
  • 10. 01 Acquisition of Riedo supports strategy to increase processing • Riedo is a leading processor of reinforcement steel in Switzerland • • • • • • Oberbipp Acquisition highly accretive • • Eschlikon Switzerland • Heimberg • 10 Sales of €140m in 2013 Highly profitable: EBITDA-margin even higher than Becker Stahl-Service ~180 employees in three state of the art sites Extensive value added product offering with highly automated rebar processing and on-site delivery Main customer segment: stable growing Swiss construction industry Purchase price of 5.6x EV/EBITDA before and 3.9x after higher single-digit million € synergies Taking into account that necessary low- to mid-double digit investments for upgrading and consolidating existing sites could be avoided by closing the respective sites and transferring the business to Riedo sites, multiple will be at 3.0x EV/EBITDA Acquisition will immediately be earnings accretive, also because no meaningful integration charges are expected Riedo will be most likely consolidated in the beginning of the 2nd quarter 2014
  • 11. 01 Riedo as perfect strategic fit to Swiss subsidiary Debrunner Acifer • Riedo is a perfect complementary fit • • • • Outlook for construction in Switzerland remains positive • • • Switzerland Debrunner Acifer Riedo Extension of geographical reach, customer coverage and products Strengthening leading market position of KCO for reinforcement steel and systems in Switzerland Consolidation/closure of two Debrunner Acifer sites The construction market is expected to show a steady growth 2014-2019 with a CAGR of 1.4%* Civil engineering is expected to outgrow building construction (CAGR 2012-2019 of 2.2% vs. 1.2%)* Main drivers for further growth are • Further solid economic and population growth • Ongoing urbanization/mobility mega trend requiring new infrastructure • Increase of public investments in both building and civil engineering sector (e.g. new hospitals, schools, etc.) • No/low public debt levels • Low interest rates Sites to be consolidated * Source: BAKBASEL. 11
  • 12. Klöckner & Co SE A Leading Multi Metal Distributor Marcus A. Ketter CFO Financials
  • 13. Agenda 01 Highlights and update on strategy 02 Financials 03 Outlook 04 Appendix 13
  • 14. 02 Turnover and sales Turnover (Tto) Sales (€m) 1,945 1,857 1,863 1,636 1,764 1,585 1,646 1,690 1,964 1,739 1,617 1,847 1,633 1,625 1,698 1,455 -10.9% -5.8% -9.0% -7.7% Q4 2011 • • Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 1,600 1,492 Q3 2013 Q4 2011 Q4 2013 • • FY: 6,445 Tto vs. 7,068 Tto (-8.8%) qoq decline reflecting seasonal slowdown and restructuring measures 14 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 FY: €6,378m vs. €7,388m (-13.7%) Average prices per ton further decreased into Q4 but started to turn
  • 15. 02 Gross profit and EBITDA Gross profit* (€m) / Gross-margin* (%) EBITDA* (€m) / EBITDA-margin* (%) 47 344 50 344 307 43 306 302 303 305 296 39 288 19.8 29 18.7 FY 17.6 17.5 FY 17.7 22 +>1%p 18.5 18.5 17.5 2.4 24 18.6 2.5 18.0 18 1.3 40 2.7 2.5 2.4 Q2 2013 Q3 2013 1.8 1.3 1.0 16.6 Q4 2011 • • Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q4 2011 • FY 2013 €1,192m (GM: 18.7%) vs. FY 2012 €1,295m (GM: 17.5%) Gross profit margin already significantly improved * Before restructuring costs 15 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 FY 2013 €150m (EBITDA-margin 2.4%) vs. FY 2012 €137m (EBITDA-margin 1.8%) Q4 2013
  • 16. XX 02 Turnaround started in Q3 18 (€m) 6 137 • EUR -€15m • AMX -€2m • HQ +€2m One-off • Pensions ODS +€7m -18 • EUR -€8m • AMX -€8m • HQ -€2m -8 Q1 yoy 21 15 6 -€15m • EUR +€7m • AMX +€8m One-off • Pensions ODS +€6m 7 EBITDA 2012 before restructuring 12 Q2 yoy Q3 yoy • EUR +€6m • AMX -€3m • HQ +€3m One-offs • Pensions ODS +€1m • Gain La Courneuve +€11m 150 Q4 yoy EBITDA 2013 before restructuring [thereof f/x effects -€3.2m] one-time effects 16
  • 17. 02 EBT impacted by restructuring and material one-offs (€m) -4 -1,067 -22 1,188 S Restructuring costs: €-47m • Pensions ODS +€14m • Gain on sale La Courneuve +€11m S Material one-offs: €+25m €-22m EBT effect: 25 • Personnel cost -€ 15m • Other -€ 7m 124 -182 • Impairments -€24m • Reversal Frefer Put Liability +€3m -79 -21 Gross profit OPEX OPEX restruct. One-offs *IDA = Interest, depreciation and amortization 17 EBITDA reported IDA* IDA restruct. EBT
  • 18. 02 Cash flow and net debt development Cash flow reconciliation in FY 2013 (€m) Comments -52 • Net Capex of €36m (net of cash-in of divestments of €21m) • “Other” include changes in other operating assets and liabilities and non-cash items • Net debt significantly down from €422m at the end of 2012 to €325m • Main driver: strong free cash flow (€107m) resulting from NWC release • “Other” include fx (€3m) and interest (€-9m) -26 -25 -17 -36 143 124 107 36 EBITDA Change Interest 2013 in NWC Taxes Cash out La Other for Courneuve Restruct. and Provisions Pensions NL Cash Capex Free flow from (net) cash flow operating 2013 activities Development of net financial debt FY 2013 (€m) Dec 31, 2012 NWC releases boosted free cash flow • -24 163 CF from operating activities Capex (net) -36 422 143 Other Dec 31, 2013 325 -10 18
  • 19. 02 Strong balance sheet Assets Equity & liabilities 3,880 3,880 3,595 Non-current assets 3,595 1,107 Equity 977 1,502 1,445 39% 40% Inventories 1,254 1,166 Non-current financial liabilities 914 Other non-current liabilities 470 350 634 637 Trade receivables 787 687 Other current assets 122 170 Current financial liabilities Liquidity 610 595 Other current liabilities 727 Trade payables Dec 31, 2012* Dec 31, 2013 250 110 252 184 Dec 31, 2012* Dec 31, 2013 Comments • • • • Equity ratio further solid at 40% * As restated for the initial application of IAS 19 rev. 2011. Net debt of €325m ** Gearing = Net debt/Equity attributable to shareholders of Klöckner & Co SE less goodwill from business combinations subsequent to May 23, 2013. Gearing** at 23% NWC decreased from €1,407m to €1,216m yoy 19
  • 20. Klöckner & Co SE A Leading Multi Metal Distributor Gisbert Rühl CEO Outlook
  • 21. 03 General and segment specific business outlook Europe +1-2% USA GDP +2-3% Construction industry Machinery and mechanical engineering Automotive industry +1-2% Apparent steel demand 21 +3-4%
  • 22. 03 • • Outlook Q1 2014 • Turnover to be sequentially up in Q1 • EBITDA in Q1 expected to come in between €40-50m FY 2014 • Turnover and sales to be slightly up; decline through restructuring measures expected to be overcompensated by volume growth in remaining sites • EBITDA to be significantly up compared to last year`s figure before restructuring driven by €41m KCO 6.0 and €20m KCO WIN contribution • Positive net income expected • Return to dividend payment intended for fiscal year 2014 22
  • 23. Agenda 01 Highlights and update on strategy 02 Financials 03 Outlook 04 Appendix 23
  • 24. 04 Quarterly results and FY results 2009-2013 (€m) Q4 2013 Q3 2013 Q2 2013 Q1 2013 Q4 2012* Q3 2012* Q2 2012* Q1 2012* Q4 2011 FY 2013 FY 2012* Turnover (Tto) 1,492 1,617 1,690 1,646 1,585 1,764 1,863 1,857 1,636 6,445 7,068 6,661 5,314 Sales 1,455 1,600 1,698 1,625 1,633 1,847 1,964 1,945 1,739 6,378 7,388 7,095 5,198 Gross profit 284 296 305 303 298 306 340 344 307 1,188 1,288 1,315 1,136 % margin 19.5 18.5 18.0 18.6 18.3 16.6 17.3 17.7 17.6 18.6 17.4 18.5 21.9 EBITDA 16 36 43 29 -35 18 33 44 14 124 60 217 238 % margin 1.1 2.3 2.5 1.8 -2.2 1.0 1.7 2.3 0.8 2.0 0.8 3.1 4.6 EBIT -36 10 17 2 -89 -9 -24 18 -18 -6 -105 111 152 Financial result -17 -19 -19 -18 -14 -22 -18 -25 -21 -73 -80 -84 -67 Income before taxes -52 -8 -2 -16 -103 -31 -42 -8 -39 -79 -185 27 84 -7 -3 -2 1 -19 3 3 -4 12 -12 -18 -17 -4 -59 -11 -4 -16 -123 -29 -39 -12 -27 -90 -203 10 80 -5 0 0 0 -1 -1 0 1 -1 -6 -3 -1 3 -54 -11 -4 -16 -122 -28 -39 -11 -27 -85 -200 12 78 EPS basic (€) -0.54 -0.11 -0.04 -0.16 -1.22 -0.28 -0.39 -0.11 -0.27 -0.85 -2.00 0.14 1.17 EPS diluted (€) -0.54 -0.11 -0.04 -0.16 -1.22 -0.28 -0.39 -0.11 -0.27 -0.85 -2.00 0.14 1.17 Income taxes Net income Minority interests Net income KlöCo * Restated due to initial application IAS 19 revised 2011. 24 FY 2011 FY 2010
  • 25. 04 Both regions recovering from their profitability lows Turnover (Tto) Sales (€m) 1,105 1,097 1,223 1,237 1,018 Europe 990 908 941 930 1,137 903 EBITDA* before restructuring (€m) 35 34** 1,149 1,041 1,017 1,061 1,006 839 28** 935 22 16 12 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2011 Q4 2013 Turnover (Tto) Q1 2012 Q2 2012 Q3 2012 722 749 746 727 Q1 2013 Q2 2013 Q3 2013 Q4 2013 716 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 592 714 608 637 21 Restructuring costs (€m) Europe Americas Q1 2013 Q2 2013 20 13 13 12 -12.2% -3.6% Q4 2012 20 16 653 Q3 2012 Q4 2013 520 646 Q2 2012 Q3 2013 29 594 22 Q1 2012 Q2 2013 EBITDA before restructuring (€m) 677 Q4 2011 Q1 2013 698 602 Americas Q4 2012 Sales (€m) 766 752 14 -10.1% -7.5% Q4 2011 26** 22 Q3 2013 Q4 2013 Q4 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 10 3 17 -1 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q4 2012 Q3 2013 Q4 2013 57 1 2 13 11 25 * 2012: as restated for the initial application of IAS19 revised 2011. ** Including pension release: Q2 2013 €7m, in Q3 2013 €6m and Q4 2013 €1m and sale of French La Courneuve site €13m.
  • 26. 04 Segment performance Q4 2013 (€m) Europe Americas HQ/Consol. Total Q4 2013 839 653 1,492 Q4 2012 908 677 1,585 -7.5 -3.6 -5.8 Q4 2013 935 520 1,455 Q4 2012 1,041 592 1,633 -10.1 -12.2 -10.9 Q4 2013 22 2 % margin 2.4 0.4 Q4 2012 -38 15 % margin -3.7 2.6 -2.2 156.6 -87.0 145.7 Turnover (Tto) Δ% Sales Δ% EBITDA Δ % EBITDA -8 16 1.1 -12 -35 26
  • 27. 04 Balanced maturity profile December 2013 Drawn amount €m Facility €m Committed Q4 2013* Q4 2013 FY 2012* Adjusted equity 536 62 98 0 0 9 ABS 560 191 161 Gearing 4) Syndicated Loan 360 161 161 Promissory Note 2) 235 238 348 Maturity profile of committed facilities and drawn amounts (€m) 864 Total Senior Debt 1,691 652 777 Convertible 2009 3) 98 98 92 Convertible 2010 3) 186 171 164 Bilateral Facilities 1) Other Bonds 1,430 325 Net debt 23% 11 360 444 8 376 Total Debt 1,975 921 349 1,033 287 49 52 228 Cash 595 179 611 50 Net Debt 325 98 422 *Including interest 1) Including finance lease 2) Redemption of €108m of promissory notes, of which €34m early redemption in Q4 2013 3) Drawn amount excludes equity component 4) Net debt/Equity attributable to shareholders of Klöckner & Co SE less goodwill from business combinations subsequent to May 23, 2013 5) Incl. Swiss facilities of €184m which are automatically renewed on a yearly basis 50 248 186 186 186 5) Bilaterals 10 8 48 236 160 151 31 98 2014 52 360 2015 ABS 9 133 2016 Syndicated loan 133 200 142 2017 Promissory notes US ABL Left side: committed facilities 27 Right side: drawn amounts 4 Thereafter Convertibles 4
  • 28. 04 Balance sheet as of December 31, 2013 (€m) December 31, 2013 December 31, 2012* 977 1,107 1,166 1,254 Trade receivables 687 787 Other assets 170 122 Cash & Cash equivalents 595 610 Total assets 3,595 3,880 Equity 1,445 1,502 Total non-current liabilities 1,077 1,384 727 914 Total current liabilities 1,073 994 thereof trade payables 637 634 Total equity and liabilities 3,595 3,880 Net working capital 1,216 1,407 325 422 Comments Non-current assets Inventories thereof financial liabilities Net financial debt 28 Shareholders’ equity: • Healthy at 40% Financial debt: • Gearing at 23% • Gross debt of €0.9bn and cash position of €0.6bn result in a net debt position of €325m * As restated for the initial application of IAS19 revised 2011.
  • 29. 04 Profit & loss 2013 (€m) FY 2013 FY 2012 Sales 6,378 7,388 Gross profit 1,188 1,288 Personnel costs -579 -659 Other operating expenses (net) -485 -569 124 60 -130 -165 -6 -105 Financial result -73 -80 EBT -79 -185 Taxes -12 -18 Net income -90 -203 -5 -3 -85 -200 EBITDA Depreciation & Amortization EBIT Minorities Net income attributable to KCO shareholders 29
  • 30. 04 Sales by markets, products and industries As of December 31, 2013 30
  • 31. 04 Current shareholder structure Comments Geographical breakdown of identified institutional investors • • • • As of January 2014 31 Identified institutional investors account for 53% German investors incl. retail dominate Top 10 shareholdings represent around 26% Retail shareholders represent 27%
  • 32. 04 Appendix Financial calendar 2014 May 8, 2014 Q1 interim report 2014 May 23, 2014 Annual General Meeting 2014, Düsseldorf August 7, 2014 Q2 interim report 2014 November 6, 2014 Q3 interim report 2014 Contact details Investor Relations Christian Pokropp, Head of Investor Relations & Corporate Communications Phone: +49 203 307 2050 Fax: +49 203 307 5025 E-mail: christian.pokropp@kloeckner.com Internet: www.kloeckner.com 32
  • 33. Our Symbol the ears attentive to customer needs the eyes looking forward to new developments the nose sniffing out opportunities to improve performance the legs always moving fast to keep up with the demands of the customers the ball symbolic of our role to fetch and carry for our customers