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Klöckner & Co - German, Swiss & Austrian Conference 2012
The document is a presentation by Klöckner & Co SE providing an overview of the company's performance in Q1 2012 and an update on its profitability action plan. Key points include: - Q1 2012 turnover increased 24% year-over-year driven by acquisitions, but EBITDA declined significantly from last year's windfall gains. - Measures to improve European profitability are on track, including headcount reductions and closing underperforming businesses. - The Americas segment outperformed Europe in both sales and EBITDA. - Full implementation of profitability initiatives is expected by mid-2012, with the outlook anticipating a recovery in the second half could lead to flat E
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Klöckner & Co - German, Swiss & Austrian Conference 2012
- 1. Klöckner & CoSE 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 containsforward-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 andupdate 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 profitabilityaction 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 andupdate on profitability action plan01 Financials Q1 2012 Outlook Appendix 02 03 04 Agenda 6
- 7. Financials Q1 201202 EBITDA Sales Grossprofit Turnover 1,498 Tto +24.0% Q1 2011 Q1 2012 1,857 Tto €1,587m €1,945m +22.6% Q1 2012Q1 2011 €104m €45m -57.4% Q1 2012Q1 2011 €353m €344m -2.7% Q1 2012Q1 2011 7
- 8. Turnover and sales02 1,180 1,4481,368 1,318 1,498 1,763 1,765 1,636 1,857 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 +13.5% +24.0% Sales (€m)Turnover (Tto) • qoq increase reflecting seasonal recovery • Average prices per ton slightly down qoq (Q1: €1,048 vs Q4: €1,063) 1,049 1,416 1,401 1,332 1,587 1,885 1,885 1,739 1,945 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 +11.9% +22.6% 8
- 9. EBITDA (€m) /EBITDA-margin (%) Gross profit and EBITDA02 Gross profit (€m) / Gross-margin (%) • Gross profit-margin stayed subdued due to adverse competitive environment in Europe • EBITDA in Q1 improved qoq but was significantly lower than last year which was heavily boosted by windfall profits 9 100 48 104 62 37 14 45 29 61 7.1 4.3 3.6 6.6 3.3 1.9 0.8 2.3 2.8 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 236 331 294 275 353 337 318 307 344 23.4 21.0 20.6 22.3 17.9 16.8 17.6 17.7 22.5 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012
- 10. 858 1,180 1,169 1,104 1,290 1,3651,251 1,137 1,223 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 909 1.162 1,084 1,029 1,164 1,192 1,067 990 1,105 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Segment performance Q1 201202 Turnover (Tto) Sales (€m) EBITDA (€m) * consolidation of BSS as of March 1, 2010 Turnover (Tto) Sales (€m) EBITDA (€m) EuropeAmericas * -5.2%-5.1% ** Without acquisitions in 2011 10 271 286 284 289 334 571 698 646 752 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 191 236 232 228 297 520 634 602 722 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 9 13 5 7 30 23 15 13 29 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 25 93 60 45 81 50 24 12 20 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 +143.3%/+19.7%**+125.4%/+11.8%**
- 11. Net income againimpacted 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 swingin 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 profilewith 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 andupdate 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 andupdate on profitability action plan01 Financials Q1 2012 Outlook Appendix 02 03 04 Agenda 17
- 18. Appendix04 18 Financial calendar 2012 May25, 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
- 19. Quarterly results andFY results 2007-201204 19 (€m) Q1 2012 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 FY 2011 FY 2010 FY 2009 FY 2008 FY 2007 Turnover (Tto) 1,857 1,636 1,765 1,763 1,498 1,318 1,368 1,448 1,180 6,661 5,314 4,119 5,974 6,478 Sales 1,945 1,739 1,885 1,885 1,587 1,332 1,401 1,416 1,049 7,095 5,198 3,860 6,750 6,274 Gross profit 344 307 318 337 353 275 294 331 236 1,315 1,136 645 1,366 1,221 % margin 17.7 17.6 16.8 17.9 22.3 20.6 21.0 23.4 22.5 18.5 21.9 16.7 20.2 19.5 EBITDA 45 14 37 62 104 48 61 100 29 217 238 -68 601 371 % margin 2.3 0.8 1.9 3.3 6.6 3.6 4.3 7.1 2.8 3.1 4.6 -1.8 8.9 5.9 EBIT 18 -18 8 36 86 24 39 78 11 111 152 -178 533 307 Financial result -24 -21 -22 -21 -19 -19 -16 -17 -15 -84 -67 -62 -70 -97 Income before taxes -6 -39 -15 15 66 5 22 61 -4 27 84 -240 463 210 Income taxes -4 12 3 -9 -22 12 -7 -14 6 -17 -4 54 -79 -54 Net income -10 -27 -12 5 44 17 15 47 2 10 80 -186 384 156 Minority interests 0 -1 -1 0 1 1 1 1 1 -1 3 3 -14 23 Net income KlöCo -10 -27 -11 5 43 16 14 46 1 12 78 -188 398 133 EPS basic (€) -0.10 -0.27 -0.11 0.07 0.65 0.25 0.21 0.69 0.02 0.14 1.17 -3.61 8.56 2.87 EPS diluted (€) -0.10 -0.27 -0.11 0.07 0.60 0.25 0.21 0.69 0.02 0.14 1.17 -3.61 8.11 2.87
- 20. Strong Growth: 24acquisitions 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 asof 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 & lossQ1 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 Q1201204 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 exposuretowards 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 Geographicalbreakdown 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 attentiveto 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