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Klöckner & Co Q1 Update
1. Klöckner & Co SE
A Leading Multi Metal Distributor
Deutsche Bank German, Swiss & Austrian
Conference
Head of Investor Relations
& Corporate
Communications
Dr. Thilo Theilen
May 14/15, 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
00
3. Overview Q1 and update on profitability action plan01
Financials Q1 2012
Outlook
Appendix
02
03
04
Agenda
3
4. Overview Q1 2012
• Turnover increased by 24.0% yoy driven by acquisitions in Americas
• European turnover down 5.1% yoy also due to exiting low margin business whereas
Americas up 125.4% yoy
• Significant uptick in turnover sequentially (+13.5% vs Q4)
• Sales increased by 22.6% yoy and by 11.9% sequentially
• EBITDA (€45m) sequentially up from Q4 at €14m, but significantly below windfall gain
driven last year (€104m) leading to a negative net income (€-10m)
• Americas EBITDA with €29m stronger (3.9% margin) than Europe with €20m
(1.7% margin)
• European ABS-program prolonged until May 2014 and reduced from €420m to €360m
01
4
5. Update on profitability action plan
• Europe
• Profitability action plan measures on track (one-off costs €3m in Q1)
• 400 out of 700 headcount reduction already realized
• Underperforming big customers bulk beam business in Germany and Netherlands being driven
down
• Major restructuring in Spain: another third of existing warehouses will be closed to finally reduce
capacity by half compared to pre-crisis
• Subsidiaries in Eastern Europe to be scaled down by restructuring/ divestiture
• US
• Integration of Macsteel running well
• Purchasing synergies realized in transaction prices and rebates
• Common sales force already realizing cross selling effects
• Realignment of group operations along product lines complete, one warehouse closed
• March 1: introduction of Kloeckner Metals US as common brand
• Ongoing: Migration of Macsteel locations to common IT platform by mid year
01
5
6. Overview Q1 and update on profitability action plan01
Financials Q1 2012
Outlook
Appendix
02
03
04
Agenda
6
11. Net income again impacted by acquisition related ppa effects02
• Net income includes €10m ppa effects, and
€3m restructuring charges
• Taxes occurred due to non-recognition of tax
assets on losses incurred in Q1
Comments
11
EPS basic (€)*
Net income (€m)
* adjusted for capital increase
2
47
15 17
44
5
-12
-27
-10
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011 Q3
2011
Q4
2011
Q1
2012
0.02
0.69
0.21
0.25
0.65
0.07
-0.11
-0.27 -0.10
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011 Q3
2011
Q4
2011
Q1
2012
12. Typical seasonal swing in NWC resulted in higher net debt02
Cash flow reconciliation in Q1 2012
(€m)
12
-100,0
-80,0
-60,0
-40,0
-20,0
0,0
20,0
40,0
60,0
-138
+1
-1
+6
45
-88
-87
EBITDA
Change in
NWC Taxes Other
CF from
operating
activities Capex Free CF
Development of net financial debt in Q1 2012
(€m)
-88
+1 -15
-573
-471
Q4
CF from
operating
activities Capex Other* Q1
* exchange rate effects, interest
13. 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 38%
• Net debt of €573m
• Gearing* at 35%
• Net debt to total capital** at 24%
• NWC increased by €122m to €1,656m qoq
• NWC/sales at new normal ~22%
50%
26.0%
29.4%
23.2%
2.0%
19.4%
Balance sheet total March 31, 2012: €4,827m
37.8%
30.6%
31.6%
Non-current
assets
1,254
Inventories
1,418
Trade receivables
1,118
Other current
assets 100
Liquidity
937
Equity
1,826
Non-current
Liabilities
1,475
Current liabilities
1,526
100%
0%
13
14. Balanced maturity profile with first repayment in July 2012 with €325m out of cash02
€m Facility Committed
Drawn amount
March 31, 2012* December 31, 2011*
Bilateral Facilities1) 603 135 126
Other Bonds 20 20 20
ABS2) 570 200 175
Syndicated Loan 500 228 226
Promissory Note 343 353 349
Total Senior Debt 2,036 936 896
Convertible 20073) 325 324 319
Convertible 20093) 98 89 86
Convertible 20103) 186 160 157
Total Debt 2,645 1,509 1,458
Cash 936 987
Net Debt 573 471
€m March 31, 2012
Adjusted equity 1,641
Net debt 573
Gearing4) 35%
*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) Net debt/Equity attributable to shareholders of Klöckner & Co SE less goodwill from business combinations
subsequent to May 28, 2010
Maturity profile of committed facilities and drawn
amounts (€m)
Committed facilities
Drawn amounts
666
527
675
296
481
378
151
397
266
340
2012 2013 2014 2015 Thereafter
14
15. Overview Q1 and update on profitability action plan01
Financials Q1 2012
Outlook
Appendix
02
03
04
Agenda
15
16. Outlook
• Q2 2012
• Turnover in Q2 expected to be sequentially slightly up vs Q1
• EBITDA in Q2 expected to be €50-60m
• Full implementation of all initiated profitability measures by mid of the year
• FY 2012
• Turnover expected to increase by around 5% year on year
• EBITDA increase subject to an economic recovery in Europe in H2
• If this is not the case, an EBITDA around prior-year level could be realistic (€217m), since
positive contributions from Macsteel, the overall more robust development in the US and
profitability action plan measures would be partially or fully compensated by the weaker
operational development in Europe
03
16
17. Overview Q1 and update on profitability action plan01
Financials Q1 2012
Outlook
Appendix
02
03
04
Agenda
17
18. Appendix04
18
Financial calendar 2012
May 25, 2012 Annual General Meeting 2012
August 8, 2012 Q2 interim report 2012
November 7, 2012 Q3 interim report 2012
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.de
Internet: www.kloeckner.de
20. Strong Growth: 24 acquisitions since the IPO, 2 in 201104
20
Acquisitions1)
Acquired sales1),2)
€141m
€567m
€108m
2
4
12
2
2005 2006 2007 2008 2009 2010
4
€231m
Acquisitionstrategysuspended
€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
21. Comments
Balance sheet as of March 31, 201204
21
(€m) March 31, 2012 December 31, 2011
Non-current assets 1,254 1,295
Inventories 1,418 1,362
Trade receivables 1,118 922
Cash & Cash equivalents 937 987
Other assets 100 140
Total assets 4,827 4,706
Equity 1,826 1,843
Total non-current
liabilities
1,475 1,526
thereof financial liabilities 1,039 1,068
Total current liabilities 1,526 1,337
thereof trade payables 880 750
Total equity and
liabilities
4,827 4,706
Net working capital 1,656 1,534
Net financial debt 573 471
Shareholders’ equity:
•Stable at 38%
Financial debt:
•Gearing at 35%
•Gross debt of €1.5bn and
cash position of €0.9bn result
in a net debt position of
€573m
NWC:
•Increase mainly due to
seasonal effects
22. Profit & loss Q1 2012 vs. Q1 201104
(€m) Q1 2012 Q1 2011 Δ in %*
Sales 1,945 1,587 22.6
Gross profit 344 353 -2.7
Personnel costs -162 -131 -23.2
Other operating expenses -145 -126 -15.6
EBITDA 45 104 -57.4
Depreciation & Amortization -26 -19 -40.7
EBIT 18 86 -78.7
Financial result -24 -19 -26.9
EBT -6 66 -109.4
Taxes -4 -22 +81.4
Net income -10 44 -123.6
Minorities 0 1 -153.8
Net income attributable to KCO shareholders -10 43 -123.1
22
* earnings impact
23. Segment performance Q1 201204
23
(€m) Europe Americas HQ/Consol. Total
Turnover (Tto)
Q1 2012 1,105 752 - 1,857
Q1 2011 1,164 334 - 1,498
Δ % -5.1 125.4 - 24.0
Sales
Q1 2012 1,223 722 - 1,945
Q1 2011 1,290 297 - 1,587
Δ % -5.2 143.3 - 22.6
EBITDA
Q1 2012 20 29 -4 45
% margin 1.7 3.9 - 2.3
Q1 2011 81 30 -7 104
% margin 6.3 10.1 - 6.6
Δ % EBITDA -74.7 -5.0 - -57.4
• Excl. MSCUSA and Frefer turnover
increase in Americas was 11.8% and
sales increase was 19.7% yoy
• Without acquisitions total turnover
decreased by 1.4% and total sales
by 0.5% yoy
Comments
24. 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%
24
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
25. Current shareholder structure04
25
Geographical breakdown of identified
institutional investors
Comments
• Identified institutional investors
account for 54%
• German investors incl. retail
dominate
• Top 10 shareholdings represent
around 29%
• Retail shareholders represent 32%
• 100% freefloat
As of March 2012
Other EU 18%
Germany 24%
Other World 5%
UK 12%
US 23%
France 13%
Switzerland 5%
26. 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
26
