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Klöckner & Co - 3rd ltaú BBA Commodities Conference 2011

- The document discusses Klöckner & Co SE, a leading multi-metal distributor, and provides an overview of the company, its business model, and key financial figures. - It summarizes Klöckner & Co's financial performance in Q2 2011, noting challenging market conditions led to lower EBITDA, but sales volumes and sales increased. Integration of recent acquisitions is progressing with synergies higher than expected. - The market environment put pressure on margins as import levels rose sharply in both the US and EU, causing price declines that outpaced procurement costs.

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Klöckner & Co SE A Leading Multi Metal Distributor 3rd Itaú BBA Commodities Conference September 2011, Rio de Janeiro Gisbert Rühl CEO/CFO
2 Ein- bis zweizeiliger Folientitel00 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.
3 Agenda 02 Recent developments, financials and performance Q2 2011 03 Market environment 04 Outlook 05 Appendix 01 Overview
CustomersDistributor/ Service CenterProducers Products: Klöckner & Co SE  Largest producer-independent steel and metal distributor in Europe and America combined  Distribution and service platform with around 290 locations  Key figures for 2010 Sales volumes: 5.3 million tons Sales: €5.2 billion EBITDA: €238 million Services: 4 Ein- bis zweizeiliger Folientitel  Machinery and mechanical engineering  Yellow Goods  White Goods  Miscellaneous  Automotive  Commercial/ residential construction  Infrastructure 01 Klöckner & Co SE at a glance
5 Suppliers Sourcing Products and services Logistics / distribution • As a producer- independent distributor, our customers benefit from our diverse national and international procurement options Customers • Procurement of large quantities • Strategic partnerships • Extensive product range • Excellent product and processing quality • Wide-ranging service provision • Local presence • Individual delivery, including 24-hour- service • More than 170,000 customers • Average normal order size approx. €2,000 • Service and availability more important than price Holistic solution from covering procurement, logistics and processing Klöckner & Co value chain 01 Business model
6 Agenda 02 Recent developments, financials and performance Q2 2011 03 Market environment 04 Outlook 05 Appendix 01 Overview
7 02 Highlights Q2 • Challenging quarter due to unexpectedly strong price pressure in all markets leading to an EBITDA of €62m (3.3% margin), negatively impacted by one offs of €10m (3.8% adjusted margin) • Sales volumes increased organically less than typical seasonally due to prebuying effect in Q1 rolling over and a cautious stance of customers in Q2 • Consolidation of Macsteel and Frefer completed • Integration of Macsteel and Namasco in the US progressing, synergies higher than initially expected • Principle agreement to terminate the earn-out for Macsteel will lead to reduced purchase price by USD60m and earlier realization of synergy effects • Capital increase with net proceeds of €517m provides strong backing for Klöckner & Co 2020
8 02 Steel imports caused pressure in all markets • Orders to the US were placed during Q1 when the spread between domestic and import prices justified it and domestic prices were still rising • Imports rose by 26% in Q2 to an average of 2.4m to/month compared to 1.9m to/ month in Q1 • HRC price dropped by USD220 per st since peak • Fewer imports in the coming months expected due to lower domestic prices and uncertain economic environment US imports of steel products (in kto/ month) EU imports of steel products (in kto/ month) US • Flat steel import licenses increased by 67% in H1 vs. last year to an average of 1.8m to/ month reaching the peak in May • HRC dropped by €75 per ton since peak • Eurometal expects imports into EU to grow by 26% in 2011 Europe Source: US Census bureau, Eurostat/ Eurometal 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Jul 07 Nov 07 Mar 08 July 08 Nov 08 Mar 09 Jul 09 Nov 09 Mar 10 Jul 10 Nov 10 Mar 11 Jul 11 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Jul 07 Nov 07 Mar 08 July 08 Nov 08 Mar 09 Jul 09 Nov 09 Mar 10 Jul 10 Nov 10 Mar 11 Jul 11
700 800 900 1,000 1,100 Jan Feb Mar Apr May Jun Procurement prices in €/ to Inventory value in €/ to Selling prices in €/ to 9 02 Margin squeeze through pricing environment in Q2 H1 comparison of procurement prices, inventory values and selling prices • Inventory values per ton still increased during the quarter whereas selling prices already leveled off and procurement prices softened * Figures not comparable due to adjustments for Frefer & Macsteel, inventory allowances and mix effects 19.4% Gross margin* 11.7% Gross margin*
10 02 Steel cycles get shorter and more pronounced Source: SBB HRC price development -150 -100 -50 0 50 100 150 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 ChangeinUSDperton • Price volatility increasing due to switch to monthly contract prices, persisting overcapacity and overall lower inventories compared to pre-crisis levels • Raw material cost inflation and change to quarterly or even spot basis • Customers’ price sensitivity increased even pronouncing price cycles due to opportunistic buying behavior with negative impact on stockholding distribution HRC price changes since 2005
11 02 EBITDA €100m €62m -38.3% Q2 2011Q2 2010 €331m €337m +1.8% Q2 2011Q2 2010 Gross profit €1,416m €1,885m+33.1% Q2 2011Q2 2010 SalesSales volumes 1,448 Tto +21.8% Q2 2010 Q2 2011 1,763 Tto Key financials Q2 2011
1,033 966 1,180 1,448 1,368 1,318 1,498 1,763 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 934 873 1,049 1,416 1,401 1,332 1,587 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 12 02 Sales (€m)Sales volumes (Tto) Sales volumes and sales +21.8% +33.1% +17.7% +18.8% 1,885
Gross profit (€m)/ Gross-margin 0 2 4 6 8 10 12 Ein- bis zweizeiliger Folientitel02 Gross profit and EBITDA 13 EBITDA (€m)/ EBITDA-margin 22.3% 22.6% 22.5% 23.4% 21.0% 20.6% 22.3% 17.9% • Margins decreased due to increasing inventory values while sales prices were declining during Q2 • EBITDA negatively impacted by €10m one-offs, whereof €15m write downs on inventories 9.5% 1.2% 2.8% 7.1% 4.3% 3.6% 6.6% 3.3% 1 3 Reihe1 6.6% 11 83 29 100 61 48 104 62 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 208 198 236 331 294 275 353 337 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011
14 Ein- bis zweizeiliger Folientitel02 Net income and earnings per share EPS basic (€)*Net income (€m) * adjusted for capital increase -23 12 2 47 15 17 44 5 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 -0.42 0.56 0.02 0.69 0.21 0.25 0.65 0.07 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011
-227 -600 -137 Capex Other** 15 Ein- bis zweizeiliger Folientitel02 Cash flow predominantly impacted by acquisitions and capital increase Development of net financial debt in Q2 (€m)Cash flow reconciliation in Q2 (€m) ** exchange rate effects, interest Q1 Q2 -137 -591 62 EBITDA Change in NWC Taxes Other CF from operating activities Capex Free CF -20 517 -444 Acquisitions* -10 Capital increase Acquisitions* Assumed Debt -43-444 -236 * net of cash acquired / capital increase in Frefer -10 -188 9 CF from operating activities Dividends -20
784 730 909 1.162 1.084 1.029 1.164 1.192 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 16 Ein- bis zweizeiliger Folientitel02 Segment performance Q2 2011 Volumes (Tto) Sales (€m) EBITDA (€m) ** Without acquisitions in 2011 Volumes (Tto) Sales (€m) EBITDA (€m) ** * * * * ** * EuropeAmericas 249 236 271 286 284 289 334 571 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 159 143 191 236 232 228 297 520 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 10 3 9 13 5 7 30 23 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 775 730 858 1.1801.1691.104 1.2901.365 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 4 143 25 93 60 45 81 50 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 +2.6% +15.7% +99.6%/ +14.4%** +120.4%/ +23.5%** * Consolidation of BSS as of March 1, 2010
17 02 Integration of Macsteel Service Centers USA progressing Key facts Macsteel • Consolidation as of May 1, 2011 • Sales volume contribution in Q2: 223kTo • Sales contribution in Q2: €211m • EBITDA contribution in Q2: €8m (w/o PPA €10m) • Principle agreement to terminate the earn-out for Macsteel will lead to reduced purchase price by USD60m and earlier realization of synergy effects • Continues to be a positive and great fit • Synergy potential higher than initially expected • Fields of synergies are marketing and sales, national key accounts, products and facilities, purchasing, personnel, cross utilization of assets and logistics • Integrated entities will be rebranded to Klöckner • Management team in place Klöckner North America Macsteel Combined North America Geographic reach (North America) 32 locations 30 locations 62 locations Market position (North America) #10 #8 #3 in multi metal, #2 in carbon steel SSC business expansion —   Product mix improvement Plate and long focused Flat products Improved sales mix Plate Processing Service Center Plate Processing and Fabrication Service Center Plate Processing Service Center Hawaii Puerto RicoMexico Macsteel Map Legend Headquarters General Line Service Center Flat Rolled Processing Center Namasco Map Legend Plate Processing Service Center Plate Processing and Fabrication Service Center Plate Processing Service Center Hawaii Puerto RicoMexico Macsteel Map Legend Headquarters General Line Service Center Flat Rolled Processing Center Namasco Map Legend Combined locations Update on integration status
18 02 Frefer faced with market in a transition period Key facts Frefer Market environment in Q2 • Consolidation as of June 1, 2011 • Sales volume contribution in Q2: 9kTo • Sales contribution in Q2: €7m • EBITDA contribution in Q2: €-0.6m (w/o PPA €-0.9m) • Entry into long steel market in Brazil with preferred supplier under consideration to broaden product portfolio Frefer: 14 locations in Brazil • Difficult situation due to price pressure coming from imports and overstocking, but mid- to longterm perspectives remain promising • Stock ratios steadily decreasing being currently at 3.4 months of supply pointing to a turnaround • Longterm prospects of the market being rather incrementally positive Source: SECEX, Alice Web, Barclays Capital Flat steel imports (kt) 0 50 100 150 200 250 300 350 400 450 500 May 08 Jul 08 Sep 08 Nov 08 Jan 09 Mar 09 May 09 Jul 09 Sep 09 Nov 09 Jan 10 Mar 10 May 10 Jul 10 Sep 10 Nov 10 Jan 11 Mar 11 May 11 Jul 11 Headquarters Branches
02 19 Q2 2011 (in €m) Strong balance sheet ratios • Net debt €600m • Gearing* at 36% • Equity ratio at 37% * Gearing = Net debt/Equity attributable to shareholders of Klöckner & Co SE less goodwill from business combinations subsequent to May 28, 2010 1,268 1,393 1,142 98 / 23* 1,035 €4,936m 1,849 1,943 1,144 Non-current assets Inventories Trade receivables Liquidity Other current assets Equity Non-current liabilities Current liabilities 149* 148* 37* 164* 332* 457* *Thereof MSCUSA and Frefer proportion Frefer 74 MSCUSA 383 Frefer 2 MSCUSA 21 Impact of MSCUSA & Frefer consolidation (as of June 30, 2011): Frefer 45 MSCUSA 104 Frefer 18 MSCUSA 130 • Non-current assets include intangible assets (customer relations, trade name) of €171.2m and goodwill of €147.5m as well as property, plant and equipment of €112.5m • Net working capital contribution of €383.8m • Transaction volume €680.2m • D&A for the Group will increase in 2011 by ~€30m (incl. PPA) and thereafter annual run rate ~€40m Frefer 20 MSCUSA 312 Frefer 12 MSCUSA 152 Frefer 33 MSCUSA 4 02 Balance sheet as of June 30, 2011
Sales/ NWC as percentage of sales 20 02 NWC / sales remains constantly below 20% 0% 5% 10% 15% 25% 30% 0% 5% 10% 15% 25% 30% 20% 0 1,000 1,500 2,000 2,500 * adjusted for MSCUSA and Frefer 1,394 1,398 1,550 1,650 1,583 1,492 1,660 1,922 1,773 1,394 1,095 959 934 873 1,049 1,416 1,401 1,332 1,587 1,885 22% 20% 21% 23% 23% 22% 21% 21% 24% 25% 23% 20% 19% 18% 19% 19% 19% 19% 500 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 0% 5% 10% 15% 25% 30% Sales in €m NWC as % of sales (4x quarterly sales) 18% 20%* 500
02 €m Drawn amount Facility Committed Q2 2011* FY 2010* Bilateral Facilities1) 580 250 73 Other Bonds 40 41 0 ABS 560 221 88 Syndicated Loan 500 226 226 Promissory Note2) 343 345 147 Total Senior Debt 2,023 1,083 534 Convertible 20073) 325 314 306 Convertible 20093) 98 81 81 Convertible 20103) 186 157 151 Total Debt 2,632 1,635 1,072 Cash 1,035 935 Net Debt 600 137 *Including interest 1) Including finance lease; volume increased in connection with the acquisition of Macsteel 2) New promissory notes issued in Q2 2011 (€198m) 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 €m Q2 2011 Equity 1,849 Net debt 600 Gearing4) 36% Maturity profile of committed facilities and drawn amounts (€m) Credit limits Drawn amounts 244 442 517 676 753 51 378 179 398 682 2011 2012 2013 2014 Thereafter 21 Further diversification and improvement of financial position in Q2
22 Agenda 02 Recent developments, financials and performance Q2 2011 03 Market environment 04 Outlook 05 Appendix 01 Overview
23 03 Global economies losing pace after strong recovery • All major indicators across the globe declined during the quarter, downside risks have increased again • US economy on hold while waiting for the outcome of the governmental budgetary cuts, factory production is slowing, growth rates and expectations being reduced • Northern Europe slowly recovering further whereas Southern Europe still struggling given the lack of export oriented industries and ongoing weakness in construction • China adjusting growth to higher single digit percentage points p.a. in order to avoid overheating of the economy • Although government has limited loans in order to avoid inflation, Brazilian economy is still growing robustly PMIs Expansion Contraction 30 35 40 45 50 55 60 65 70 Jul 05 Mar 06 Nov 06 Jul 07 Mar 08 Nov 08 Jul 09 Mar 10 Nov 10 Jul 11 North America Europe Brazil China
24 03 Construction • US construction spending in non residential expected to remain subdued for the remainder of the year • Infrastructure spending dependent on budgetary cuts, but anyhow so far steel exposure limited • Residential construction seems to have bottomed but steel intensity is limited • Early indicators like USA Architectural Billings Index point to a recovery in 2012 at the earliest US • Construction output is recovering in Germany and the Baltic Sea area, stabilizing in France and suffering further in Southern Europe Europe Eurozoneconstructionindex 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 Jan 02 Jul 02 Jan 03 Jul 03 Jan 04 Jul 04 Jan 05 Jul 05 Jan 06 Jul 06 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 ConstructionspendingsUS US Residential construction per month in mUSD US Non-Residential construction per month in mUSD 80 90 100 110 Eurozone construction spending Index Construction in Europe and the US
25 03 • Automotive sales in the US are still robust with H1 being 12.8% above last year, but loosing momentum with June only being 3.0% above last year • US automotive production that had been affected by parts shortages from Japan and seasonal model year change will return to more normal levels • Machinery production in the US, esp. heavy, agricultural and mining equipment has been robust but the growth rate is slowing; industrial plant manufacturing has been improving US and EU domestic car sales (in thousand units/quarter) US Europe • European car sales are expected to stay on high level although wreckage premiums caused base effect • Machinery in Europe still robust but losing momentum due to spill-over effects for exports fading out 2,000 2,500 3,000 3,500 4,000 4,500 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 EU sales US sales Source: Bloomberg Automotive, machinery and mechanical engineering
26 Agenda 02 Recent developments, financials and performance Q2 2011 03 Market environment 04 Outlook 05 Appendix 01 Overview
27 04 Preparing for slower growth with profitability action plan 2008 2009 2010* 2011e* 2012e* Volumes -27 % Capacities with Wave 1+2 -15 % Reaction to current market expectations • We prepare for slower growth scenario with profitability action plan to reach 6% target EBITDA-margin asap • Measures focus on admin and overhead and structural changes in the country organizations • Divestment of mid triple digit €m amount • Net EBITDA contribution of mid double digit €m, majority already in 2012 • One-off costs of low double digit €m fully compensated by disposal proceeds Organic volume development
28 04 Outlook • Q3 2011 • Volumes to be seasonally lighter on organic basis • EBITDA expected seasonally below Q2 level • Prices to stabilize during Q3 with upside potential after summer depending on supply balance and further macro economic trends • Full year 2011 guidance • >25% volume and sales growth resulting from acquisitions expected with precondition that world economies not entering into a recession • Midterm EBITDA margin target of 6% not realistic to be achieved already in 2011
29 Agenda 02 Recent developments, financials and performance Q2 2011 03 Market environment 04 Outlook 05 Appendix 01 Overview
30 05 Appendix 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 Financial calendar 2011/2012 November 9, 2011 Q3 interim report 2011 March 7, 2012 Annual Financial Statements 2011 May 9, 2012 Q1 interim report 2012 May 25, 2012 Annual General Meeting 2012 August 8, 2012 Q2 interim report 2012 November 7, 2012 Q3 interim report 2012
31 05 Quarterly results and FY results 2006-2011 (€m) Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009 FY 2010 FY 2009 FY 2008 FY 2007 FY 2006 Volumes (Tto) 1,763 1,498 1,318 1,368 1,448 1,180 966 1,033 1,053 1,068 5,314 4,119 5,974 6,478 6,127 Sales 1,885 1,587 1,332 1,401 1,416 1,049 873 934 959 1,095 5,198 3,860 6,750 6,274 5,532 Gross profit 337 353 275 294 331 236 198 208 161 78 1,136 645 1,366 1,221 1,208 % margin 17.9 22.3 20.6 21.0 23.4 22.5 22.6 22.3 16.8 7.1 21.9 16.7 20.2 19.5 21.8 EBITDA 62 104 48 61 100 29 83 11 -31 -132 238 -68 601 371 395 % margin 3.3 6.6 3.6 4.3 7.1 2.8 9.5 1.2 -3.2 -12.0 4.6 -1.8 8.9 5.9 7.1 EBIT 36 86 24 39 78 11 26 -7 -48 -149 152 -178 533 307 337 Financial result -21 -19 -19 -16 -17 -15 -16 -14 -15 -16 -67 -62 -70 -97 -64 Income before taxes 15 66 5 22 61 -4 9 -21 -63 -165 84 -240 463 210 273 Income taxes -9 -22 12 -7 -14 6 3 -2 16 38 -4 54 -79 -54 -39 Net income 5 44 17 15 47 2 12 -23 -47 -127 80 -186 384 156 235 Minority interests 0 1 1 1 1 1 3 0 1 -2 3 3 -14 23 28 Net income KlöCo 5 43 16 14 46 1 9 -23 -48 -126 77 -188 398 133 206 EPS basic (€) 0.07 0.65 0.25 0.21 0.69 0.02 0.56 -0.42 -1.04 -2.70 1.17 -3.61 8.56 2.87 4.44 EPS diluted (€) 0.07 0.60 0.25 0.21 0.69 0.02 0.56 -0.42 -0.85 -2.43 1.17 -3.61 8.11 2.87 4.44 * Pro-forma consolidated figures for FY 2005, without release of negative goodwill of €139 million and without transaction costs of €39 million, without restructuring expenses of €17 million (incurred Q4) and without activity disposal of €1.9 million (incurred Q4).
32 05 ¹ Date of announcement 2 Sales in the year prior to acquisitions Acquisitions1) Acquired sales1),2) €141m €567m €108m 2 4 12 2 2005 2006 2007 2008 2009 2010 4 €231m Acquisitionstrategysuspended €712m 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 2011 2 €1.15bnBrazil May 2011 Frefer €150m USA April 2011 Macsteel €1bn 2011 2 acquisitions so far €1,150m Strong Growth: 24 acquisitions, 2 in 2011
33 05 Sales by industry BSS shifts exposure of customer industries Sales by marketsSales by product • Exposure to construction industry declined by 3.8% as intended • Automotive rose by 4.2% due to BSS • Diversification in customer industries will go on
34 05 Balance sheet as of June 30, 2011 (€m) June 30, 2011 Dec. 31, 2010 Non-current assets 1,268 856 Inventories 1,393 899 Trade receivables 1,142 703 Cash & Cash equivalents 1,035 935 Other assets 98 98 Total assets 4,936 3,491 Equity 1,849 1,290 Total non-current liabilities 1,943 1,361 thereof financial liabilities 1,519 1,021 Total current liabilities 1,144 840 thereof trade payables 102 585 Total equity and liabilities 4,936 3,491 Net working capital 1,713 1,017 Net financial debt 600 137 Comments Shareholders’ equity: • Stable at 37% despite NWC increase, benefitting from capital increase Financial debt: • Gearing at 36% • Net debt position due to acquisitions increased business NWC: • Swing mainly driven by acquisitions and also due to increased business
35 05 Statement of cash flow Q2 Comments • NWC changes due to increased business and acquisitions • €444m were cash outflows for MSCUSA and Frefer (€m) Q2 2011 Q2 2010 Operating CF 64 99 Changes in net working capital -188 -170 Others -13 14 Cash flow from operating activities -137 -57 Inflow from disposals of fixed assets/others 0 1 Outflow for acquisitions -444 0 Outflow for investments in fixed assets/others -10 -6 Cash flow from investing activities -454 -5 Capital increase 517 0 Changes in financial liabilities 430 196 Dividends -20 0 Net interest payments -21 -16 Repayments of financial liabilities in connection with business combinations -196 0 Cash flow from financing activities 710 180 Total cash flow 118 118
36 05 Segment performance Q2 2011 (€m) Europe Americas* HQ/ Consol. Total Volume (Ttons) Q2 2011 1,192 571 - 1,763 Q2 2010 1,162 286 - 1,448 Δ % 2.6 99.6 21.8 Sales Q2 2011 1,365 520 - 1,885 Q2 2010 1,180 236 - 1,416 Δ % 15.7 120.4 33.1 EBITDA Q2 2011 50 23 -11 62 % margin 3.6 4.4 3.3 Q2 2010 93 13 -6 100 % margin 7.9 5.4 7.1 Δ % EBITDA -46.6 81.7 -38.3 Comments • Excl. MSCUSA, Frefer and Lake Steel volume increase in Americas was 14.4% and sales increase was 23.5% yoy • Without acquisitions total volume increased by 4.9% and total sales by 17.0% yoy * in 2010 North America
37 05 Geographical breakdown of identified institutional investors Current shareholder structure Comments • Identified institutional investors account for 50% • German investors incl. retail dominate • Top 10 shareholdings represent around 26% • Retail shareholders represent 20%
38 05 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 Our symbol

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Klöckner & Co - 3rd ltaú BBA Commodities Conference 2011

  • 1.
    Klöckner & CoSE A Leading Multi Metal Distributor 3rd Itaú BBA Commodities Conference September 2011, Rio de Janeiro Gisbert Rühl CEO/CFO
  • 2.
    2 Ein- bis zweizeiligerFolientitel00 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.
  • 3.
    3 Agenda 02 Recent developments,financials and performance Q2 2011 03 Market environment 04 Outlook 05 Appendix 01 Overview
  • 4.
    CustomersDistributor/ Service CenterProducers Products: Klöckner& Co SE  Largest producer-independent steel and metal distributor in Europe and America combined  Distribution and service platform with around 290 locations  Key figures for 2010 Sales volumes: 5.3 million tons Sales: €5.2 billion EBITDA: €238 million Services: 4 Ein- bis zweizeiliger Folientitel  Machinery and mechanical engineering  Yellow Goods  White Goods  Miscellaneous  Automotive  Commercial/ residential construction  Infrastructure 01 Klöckner & Co SE at a glance
  • 5.
    5 Suppliers Sourcing Products and services Logistics/ distribution • As a producer- independent distributor, our customers benefit from our diverse national and international procurement options Customers • Procurement of large quantities • Strategic partnerships • Extensive product range • Excellent product and processing quality • Wide-ranging service provision • Local presence • Individual delivery, including 24-hour- service • More than 170,000 customers • Average normal order size approx. €2,000 • Service and availability more important than price Holistic solution from covering procurement, logistics and processing Klöckner & Co value chain 01 Business model
  • 6.
    6 Agenda 02 Recent developments,financials and performance Q2 2011 03 Market environment 04 Outlook 05 Appendix 01 Overview
  • 7.
    7 02 Highlights Q2 •Challenging quarter due to unexpectedly strong price pressure in all markets leading to an EBITDA of €62m (3.3% margin), negatively impacted by one offs of €10m (3.8% adjusted margin) • Sales volumes increased organically less than typical seasonally due to prebuying effect in Q1 rolling over and a cautious stance of customers in Q2 • Consolidation of Macsteel and Frefer completed • Integration of Macsteel and Namasco in the US progressing, synergies higher than initially expected • Principle agreement to terminate the earn-out for Macsteel will lead to reduced purchase price by USD60m and earlier realization of synergy effects • Capital increase with net proceeds of €517m provides strong backing for Klöckner & Co 2020
  • 8.
    8 02 Steel importscaused pressure in all markets • Orders to the US were placed during Q1 when the spread between domestic and import prices justified it and domestic prices were still rising • Imports rose by 26% in Q2 to an average of 2.4m to/month compared to 1.9m to/ month in Q1 • HRC price dropped by USD220 per st since peak • Fewer imports in the coming months expected due to lower domestic prices and uncertain economic environment US imports of steel products (in kto/ month) EU imports of steel products (in kto/ month) US • Flat steel import licenses increased by 67% in H1 vs. last year to an average of 1.8m to/ month reaching the peak in May • HRC dropped by €75 per ton since peak • Eurometal expects imports into EU to grow by 26% in 2011 Europe Source: US Census bureau, Eurostat/ Eurometal 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Jul 07 Nov 07 Mar 08 July 08 Nov 08 Mar 09 Jul 09 Nov 09 Mar 10 Jul 10 Nov 10 Mar 11 Jul 11 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Jul 07 Nov 07 Mar 08 July 08 Nov 08 Mar 09 Jul 09 Nov 09 Mar 10 Jul 10 Nov 10 Mar 11 Jul 11
  • 9.
    700 800 900 1,000 1,100 Jan Feb MarApr May Jun Procurement prices in €/ to Inventory value in €/ to Selling prices in €/ to 9 02 Margin squeeze through pricing environment in Q2 H1 comparison of procurement prices, inventory values and selling prices • Inventory values per ton still increased during the quarter whereas selling prices already leveled off and procurement prices softened * Figures not comparable due to adjustments for Frefer & Macsteel, inventory allowances and mix effects 19.4% Gross margin* 11.7% Gross margin*
  • 10.
    10 02 Steel cyclesget shorter and more pronounced Source: SBB HRC price development -150 -100 -50 0 50 100 150 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 ChangeinUSDperton • Price volatility increasing due to switch to monthly contract prices, persisting overcapacity and overall lower inventories compared to pre-crisis levels • Raw material cost inflation and change to quarterly or even spot basis • Customers’ price sensitivity increased even pronouncing price cycles due to opportunistic buying behavior with negative impact on stockholding distribution HRC price changes since 2005
  • 11.
    11 02 EBITDA €100m €62m -38.3% Q2 2011Q2 2010 €331m €337m +1.8% Q22011Q2 2010 Gross profit €1,416m €1,885m+33.1% Q2 2011Q2 2010 SalesSales volumes 1,448 Tto +21.8% Q2 2010 Q2 2011 1,763 Tto Key financials Q2 2011
  • 12.
    1,033 966 1,180 1,448 1,368 1,318 1,498 1,763 Q32009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 934 873 1,049 1,416 1,401 1,332 1,587 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 12 02 Sales (€m)Sales volumes (Tto) Sales volumes and sales +21.8% +33.1% +17.7% +18.8% 1,885
  • 13.
    Gross profit (€m)/Gross-margin 0 2 4 6 8 10 12 Ein- bis zweizeiliger Folientitel02 Gross profit and EBITDA 13 EBITDA (€m)/ EBITDA-margin 22.3% 22.6% 22.5% 23.4% 21.0% 20.6% 22.3% 17.9% • Margins decreased due to increasing inventory values while sales prices were declining during Q2 • EBITDA negatively impacted by €10m one-offs, whereof €15m write downs on inventories 9.5% 1.2% 2.8% 7.1% 4.3% 3.6% 6.6% 3.3% 1 3 Reihe1 6.6% 11 83 29 100 61 48 104 62 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 208 198 236 331 294 275 353 337 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011
  • 14.
    14 Ein- bis zweizeiligerFolientitel02 Net income and earnings per share EPS basic (€)*Net income (€m) * adjusted for capital increase -23 12 2 47 15 17 44 5 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 -0.42 0.56 0.02 0.69 0.21 0.25 0.65 0.07 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011
  • 15.
    -227 -600 -137 Capex Other** 15 Ein-bis zweizeiliger Folientitel02 Cash flow predominantly impacted by acquisitions and capital increase Development of net financial debt in Q2 (€m)Cash flow reconciliation in Q2 (€m) ** exchange rate effects, interest Q1 Q2 -137 -591 62 EBITDA Change in NWC Taxes Other CF from operating activities Capex Free CF -20 517 -444 Acquisitions* -10 Capital increase Acquisitions* Assumed Debt -43-444 -236 * net of cash acquired / capital increase in Frefer -10 -188 9 CF from operating activities Dividends -20
  • 16.
    784 730 909 1.162 1.084 1.029 1.1641.192 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 16 Ein- bis zweizeiliger Folientitel02 Segment performance Q2 2011 Volumes (Tto) Sales (€m) EBITDA (€m) ** Without acquisitions in 2011 Volumes (Tto) Sales (€m) EBITDA (€m) ** * * * * ** * EuropeAmericas 249 236 271 286 284 289 334 571 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 159 143 191 236 232 228 297 520 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 10 3 9 13 5 7 30 23 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 775 730 858 1.1801.1691.104 1.2901.365 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 4 143 25 93 60 45 81 50 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 +2.6% +15.7% +99.6%/ +14.4%** +120.4%/ +23.5%** * Consolidation of BSS as of March 1, 2010
  • 17.
    17 02 Integration ofMacsteel Service Centers USA progressing Key facts Macsteel • Consolidation as of May 1, 2011 • Sales volume contribution in Q2: 223kTo • Sales contribution in Q2: €211m • EBITDA contribution in Q2: €8m (w/o PPA €10m) • Principle agreement to terminate the earn-out for Macsteel will lead to reduced purchase price by USD60m and earlier realization of synergy effects • Continues to be a positive and great fit • Synergy potential higher than initially expected • Fields of synergies are marketing and sales, national key accounts, products and facilities, purchasing, personnel, cross utilization of assets and logistics • Integrated entities will be rebranded to Klöckner • Management team in place Klöckner North America Macsteel Combined North America Geographic reach (North America) 32 locations 30 locations 62 locations Market position (North America) #10 #8 #3 in multi metal, #2 in carbon steel SSC business expansion —   Product mix improvement Plate and long focused Flat products Improved sales mix Plate Processing Service Center Plate Processing and Fabrication Service Center Plate Processing Service Center Hawaii Puerto RicoMexico Macsteel Map Legend Headquarters General Line Service Center Flat Rolled Processing Center Namasco Map Legend Plate Processing Service Center Plate Processing and Fabrication Service Center Plate Processing Service Center Hawaii Puerto RicoMexico Macsteel Map Legend Headquarters General Line Service Center Flat Rolled Processing Center Namasco Map Legend Combined locations Update on integration status
  • 18.
    18 02 Frefer facedwith market in a transition period Key facts Frefer Market environment in Q2 • Consolidation as of June 1, 2011 • Sales volume contribution in Q2: 9kTo • Sales contribution in Q2: €7m • EBITDA contribution in Q2: €-0.6m (w/o PPA €-0.9m) • Entry into long steel market in Brazil with preferred supplier under consideration to broaden product portfolio Frefer: 14 locations in Brazil • Difficult situation due to price pressure coming from imports and overstocking, but mid- to longterm perspectives remain promising • Stock ratios steadily decreasing being currently at 3.4 months of supply pointing to a turnaround • Longterm prospects of the market being rather incrementally positive Source: SECEX, Alice Web, Barclays Capital Flat steel imports (kt) 0 50 100 150 200 250 300 350 400 450 500 May 08 Jul 08 Sep 08 Nov 08 Jan 09 Mar 09 May 09 Jul 09 Sep 09 Nov 09 Jan 10 Mar 10 May 10 Jul 10 Sep 10 Nov 10 Jan 11 Mar 11 May 11 Jul 11 Headquarters Branches
  • 19.
    02 19 Q2 2011 (in€m) Strong balance sheet ratios • Net debt €600m • Gearing* at 36% • Equity ratio at 37% * Gearing = Net debt/Equity attributable to shareholders of Klöckner & Co SE less goodwill from business combinations subsequent to May 28, 2010 1,268 1,393 1,142 98 / 23* 1,035 €4,936m 1,849 1,943 1,144 Non-current assets Inventories Trade receivables Liquidity Other current assets Equity Non-current liabilities Current liabilities 149* 148* 37* 164* 332* 457* *Thereof MSCUSA and Frefer proportion Frefer 74 MSCUSA 383 Frefer 2 MSCUSA 21 Impact of MSCUSA & Frefer consolidation (as of June 30, 2011): Frefer 45 MSCUSA 104 Frefer 18 MSCUSA 130 • Non-current assets include intangible assets (customer relations, trade name) of €171.2m and goodwill of €147.5m as well as property, plant and equipment of €112.5m • Net working capital contribution of €383.8m • Transaction volume €680.2m • D&A for the Group will increase in 2011 by ~€30m (incl. PPA) and thereafter annual run rate ~€40m Frefer 20 MSCUSA 312 Frefer 12 MSCUSA 152 Frefer 33 MSCUSA 4 02 Balance sheet as of June 30, 2011
  • 20.
    Sales/ NWC aspercentage of sales 20 02 NWC / sales remains constantly below 20% 0% 5% 10% 15% 25% 30% 0% 5% 10% 15% 25% 30% 20% 0 1,000 1,500 2,000 2,500 * adjusted for MSCUSA and Frefer 1,394 1,398 1,550 1,650 1,583 1,492 1,660 1,922 1,773 1,394 1,095 959 934 873 1,049 1,416 1,401 1,332 1,587 1,885 22% 20% 21% 23% 23% 22% 21% 21% 24% 25% 23% 20% 19% 18% 19% 19% 19% 19% 500 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 0% 5% 10% 15% 25% 30% Sales in €m NWC as % of sales (4x quarterly sales) 18% 20%* 500
  • 21.
    02 €m Drawn amount FacilityCommitted Q2 2011* FY 2010* Bilateral Facilities1) 580 250 73 Other Bonds 40 41 0 ABS 560 221 88 Syndicated Loan 500 226 226 Promissory Note2) 343 345 147 Total Senior Debt 2,023 1,083 534 Convertible 20073) 325 314 306 Convertible 20093) 98 81 81 Convertible 20103) 186 157 151 Total Debt 2,632 1,635 1,072 Cash 1,035 935 Net Debt 600 137 *Including interest 1) Including finance lease; volume increased in connection with the acquisition of Macsteel 2) New promissory notes issued in Q2 2011 (€198m) 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 €m Q2 2011 Equity 1,849 Net debt 600 Gearing4) 36% Maturity profile of committed facilities and drawn amounts (€m) Credit limits Drawn amounts 244 442 517 676 753 51 378 179 398 682 2011 2012 2013 2014 Thereafter 21 Further diversification and improvement of financial position in Q2
  • 22.
    22 Agenda 02 Recent developments,financials and performance Q2 2011 03 Market environment 04 Outlook 05 Appendix 01 Overview
  • 23.
    23 03 Global economieslosing pace after strong recovery • All major indicators across the globe declined during the quarter, downside risks have increased again • US economy on hold while waiting for the outcome of the governmental budgetary cuts, factory production is slowing, growth rates and expectations being reduced • Northern Europe slowly recovering further whereas Southern Europe still struggling given the lack of export oriented industries and ongoing weakness in construction • China adjusting growth to higher single digit percentage points p.a. in order to avoid overheating of the economy • Although government has limited loans in order to avoid inflation, Brazilian economy is still growing robustly PMIs Expansion Contraction 30 35 40 45 50 55 60 65 70 Jul 05 Mar 06 Nov 06 Jul 07 Mar 08 Nov 08 Jul 09 Mar 10 Nov 10 Jul 11 North America Europe Brazil China
  • 24.
    24 03 Construction • USconstruction spending in non residential expected to remain subdued for the remainder of the year • Infrastructure spending dependent on budgetary cuts, but anyhow so far steel exposure limited • Residential construction seems to have bottomed but steel intensity is limited • Early indicators like USA Architectural Billings Index point to a recovery in 2012 at the earliest US • Construction output is recovering in Germany and the Baltic Sea area, stabilizing in France and suffering further in Southern Europe Europe Eurozoneconstructionindex 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 Jan 02 Jul 02 Jan 03 Jul 03 Jan 04 Jul 04 Jan 05 Jul 05 Jan 06 Jul 06 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 ConstructionspendingsUS US Residential construction per month in mUSD US Non-Residential construction per month in mUSD 80 90 100 110 Eurozone construction spending Index Construction in Europe and the US
  • 25.
    25 03 • Automotive salesin the US are still robust with H1 being 12.8% above last year, but loosing momentum with June only being 3.0% above last year • US automotive production that had been affected by parts shortages from Japan and seasonal model year change will return to more normal levels • Machinery production in the US, esp. heavy, agricultural and mining equipment has been robust but the growth rate is slowing; industrial plant manufacturing has been improving US and EU domestic car sales (in thousand units/quarter) US Europe • European car sales are expected to stay on high level although wreckage premiums caused base effect • Machinery in Europe still robust but losing momentum due to spill-over effects for exports fading out 2,000 2,500 3,000 3,500 4,000 4,500 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 EU sales US sales Source: Bloomberg Automotive, machinery and mechanical engineering
  • 26.
    26 Agenda 02 Recent developments,financials and performance Q2 2011 03 Market environment 04 Outlook 05 Appendix 01 Overview
  • 27.
    27 04 Preparing forslower growth with profitability action plan 2008 2009 2010* 2011e* 2012e* Volumes -27 % Capacities with Wave 1+2 -15 % Reaction to current market expectations • We prepare for slower growth scenario with profitability action plan to reach 6% target EBITDA-margin asap • Measures focus on admin and overhead and structural changes in the country organizations • Divestment of mid triple digit €m amount • Net EBITDA contribution of mid double digit €m, majority already in 2012 • One-off costs of low double digit €m fully compensated by disposal proceeds Organic volume development
  • 28.
    28 04 Outlook • Q32011 • Volumes to be seasonally lighter on organic basis • EBITDA expected seasonally below Q2 level • Prices to stabilize during Q3 with upside potential after summer depending on supply balance and further macro economic trends • Full year 2011 guidance • >25% volume and sales growth resulting from acquisitions expected with precondition that world economies not entering into a recession • Midterm EBITDA margin target of 6% not realistic to be achieved already in 2011
  • 29.
    29 Agenda 02 Recent developments,financials and performance Q2 2011 03 Market environment 04 Outlook 05 Appendix 01 Overview
  • 30.
    30 05 Appendix Contact detailsInvestor 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 Financial calendar 2011/2012 November 9, 2011 Q3 interim report 2011 March 7, 2012 Annual Financial Statements 2011 May 9, 2012 Q1 interim report 2012 May 25, 2012 Annual General Meeting 2012 August 8, 2012 Q2 interim report 2012 November 7, 2012 Q3 interim report 2012
  • 31.
    31 05 Quarterly resultsand FY results 2006-2011 (€m) Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009 FY 2010 FY 2009 FY 2008 FY 2007 FY 2006 Volumes (Tto) 1,763 1,498 1,318 1,368 1,448 1,180 966 1,033 1,053 1,068 5,314 4,119 5,974 6,478 6,127 Sales 1,885 1,587 1,332 1,401 1,416 1,049 873 934 959 1,095 5,198 3,860 6,750 6,274 5,532 Gross profit 337 353 275 294 331 236 198 208 161 78 1,136 645 1,366 1,221 1,208 % margin 17.9 22.3 20.6 21.0 23.4 22.5 22.6 22.3 16.8 7.1 21.9 16.7 20.2 19.5 21.8 EBITDA 62 104 48 61 100 29 83 11 -31 -132 238 -68 601 371 395 % margin 3.3 6.6 3.6 4.3 7.1 2.8 9.5 1.2 -3.2 -12.0 4.6 -1.8 8.9 5.9 7.1 EBIT 36 86 24 39 78 11 26 -7 -48 -149 152 -178 533 307 337 Financial result -21 -19 -19 -16 -17 -15 -16 -14 -15 -16 -67 -62 -70 -97 -64 Income before taxes 15 66 5 22 61 -4 9 -21 -63 -165 84 -240 463 210 273 Income taxes -9 -22 12 -7 -14 6 3 -2 16 38 -4 54 -79 -54 -39 Net income 5 44 17 15 47 2 12 -23 -47 -127 80 -186 384 156 235 Minority interests 0 1 1 1 1 1 3 0 1 -2 3 3 -14 23 28 Net income KlöCo 5 43 16 14 46 1 9 -23 -48 -126 77 -188 398 133 206 EPS basic (€) 0.07 0.65 0.25 0.21 0.69 0.02 0.56 -0.42 -1.04 -2.70 1.17 -3.61 8.56 2.87 4.44 EPS diluted (€) 0.07 0.60 0.25 0.21 0.69 0.02 0.56 -0.42 -0.85 -2.43 1.17 -3.61 8.11 2.87 4.44 * Pro-forma consolidated figures for FY 2005, without release of negative goodwill of €139 million and without transaction costs of €39 million, without restructuring expenses of €17 million (incurred Q4) and without activity disposal of €1.9 million (incurred Q4).
  • 32.
    32 05 ¹ Date ofannouncement 2 Sales in the year prior to acquisitions Acquisitions1) Acquired sales1),2) €141m €567m €108m 2 4 12 2 2005 2006 2007 2008 2009 2010 4 €231m Acquisitionstrategysuspended €712m 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 2011 2 €1.15bnBrazil May 2011 Frefer €150m USA April 2011 Macsteel €1bn 2011 2 acquisitions so far €1,150m Strong Growth: 24 acquisitions, 2 in 2011
  • 33.
    33 05 Sales by industry BSSshifts exposure of customer industries Sales by marketsSales by product • Exposure to construction industry declined by 3.8% as intended • Automotive rose by 4.2% due to BSS • Diversification in customer industries will go on
  • 34.
    34 05 Balance sheetas of June 30, 2011 (€m) June 30, 2011 Dec. 31, 2010 Non-current assets 1,268 856 Inventories 1,393 899 Trade receivables 1,142 703 Cash & Cash equivalents 1,035 935 Other assets 98 98 Total assets 4,936 3,491 Equity 1,849 1,290 Total non-current liabilities 1,943 1,361 thereof financial liabilities 1,519 1,021 Total current liabilities 1,144 840 thereof trade payables 102 585 Total equity and liabilities 4,936 3,491 Net working capital 1,713 1,017 Net financial debt 600 137 Comments Shareholders’ equity: • Stable at 37% despite NWC increase, benefitting from capital increase Financial debt: • Gearing at 36% • Net debt position due to acquisitions increased business NWC: • Swing mainly driven by acquisitions and also due to increased business
  • 35.
    35 05 Statement ofcash flow Q2 Comments • NWC changes due to increased business and acquisitions • €444m were cash outflows for MSCUSA and Frefer (€m) Q2 2011 Q2 2010 Operating CF 64 99 Changes in net working capital -188 -170 Others -13 14 Cash flow from operating activities -137 -57 Inflow from disposals of fixed assets/others 0 1 Outflow for acquisitions -444 0 Outflow for investments in fixed assets/others -10 -6 Cash flow from investing activities -454 -5 Capital increase 517 0 Changes in financial liabilities 430 196 Dividends -20 0 Net interest payments -21 -16 Repayments of financial liabilities in connection with business combinations -196 0 Cash flow from financing activities 710 180 Total cash flow 118 118
  • 36.
    36 05 Segment performanceQ2 2011 (€m) Europe Americas* HQ/ Consol. Total Volume (Ttons) Q2 2011 1,192 571 - 1,763 Q2 2010 1,162 286 - 1,448 Δ % 2.6 99.6 21.8 Sales Q2 2011 1,365 520 - 1,885 Q2 2010 1,180 236 - 1,416 Δ % 15.7 120.4 33.1 EBITDA Q2 2011 50 23 -11 62 % margin 3.6 4.4 3.3 Q2 2010 93 13 -6 100 % margin 7.9 5.4 7.1 Δ % EBITDA -46.6 81.7 -38.3 Comments • Excl. MSCUSA, Frefer and Lake Steel volume increase in Americas was 14.4% and sales increase was 23.5% yoy • Without acquisitions total volume increased by 4.9% and total sales by 17.0% yoy * in 2010 North America
  • 37.
    37 05 Geographical breakdown ofidentified institutional investors Current shareholder structure Comments • Identified institutional investors account for 50% • German investors incl. retail dominate • Top 10 shareholdings represent around 26% • Retail shareholders represent 20%
  • 38.
    38 05 the ears attentive tocustomer 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 Our symbol