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Klöckner & Co - Roadshow Presentation March 6-7, 2013

Klöckner & Co reported challenging financial results in 2012 due to weak steel markets in Europe and the US. EBITDA declined 38.6% year-over-year due to restructuring costs and market pressures. However, the company made progress on its restructuring plan, closing sites and reducing headcount ahead of schedule. Free cash flow was positive due to tight working capital management. Looking forward, management expects the restructuring efforts to contribute €200 million in EBITDA improvements in 2013, assuming markets stabilize.

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Klöckner & Co SE A Leading Multi Metal Distributor Roadshow Deutsche Bank Frankfurt CEO Gisbert Rühl March 6 - 7, 2013 CFO Marcus A. Ketter
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
Highlights and update on strategy01 Financials Q4/FY 2012 Outlook Appendix 02 03 04 Agenda 3
Restructuring ahead of plan – but markets esp. in Europe still challenging Challenging environment used to do necessary adjustments to return to profitable growth even without market support • Steel markets in Europe and finally also in the US have been heavily under pressure • EBITDA before restructuring (€139m) below last year (€227m) • Net income of -€198m strongly impacted by restructuring costs and other one-offs • Turnover and sales improved by 6.1% and 4.1% to 7.1m To and €7.4bn respectively • US again cornerstone of growth profile: +31% turnover yoy • FCF generation with €67m showing companies’ strict NWC-management and compensation of restructuring expenses by cash releases • Strong net debt reduction from €596m in Q3 to €422m and by €49m yoy • Restructuring ahead of plan: €60m EBITDA contribution targeted for 2013 • Restructuring driven earnings improvement to ~€200m EBITDA (+45%) at stable turnover in 2013 expected • Further market growth in the US anticipated while Europe should pass the trough • Management Board strengthened by Marcus A. Ketter and Karsten Lork • Interfer Holding GmbH belonging to Dr. Albrecht Knauf acquired a stake of 7.82% in Klöckner & Co 01 4
Klöckner & Co 2020 strategy Acquisition of distributors and steel service centers with higher-margin products and value added services 01 External growth strategy Organic growth strategy Business optimization Personnel & Management development Stronger focus on expansion of value added services especially for industrial customer segments Realizing scale benefits in purchasing and product management and optimization of logistics and inventory management Group-wide talent and performance management supported by attractive and structured compensation and benefits system 5
Flexible response to challenging market environment01 • Against the background of the current market situation we have streamlined our strategy and implemented an extensive restructuring program in Europe Business optimization Organic growth strategy Currentfocus External growth strategy • Network streamlining by significantly extended restructuring program • Reduction of 60 sites, efficiency measures in remaining sites • Workforce reduction of >1,800 (16% of total workforce) • Discontinuation of unprofitable business/ clients • Streamlining of central functions • Increasing share of value added services and higher margin products around core business • Re-shoring driven by low energy costs should provide additional growth opportunities in the US • Acquisition of distributors and SSC with higher margin products and value- added services • Shale gas opportunities • Niche suppliers 6
Implementation of restructuring measures ahead of plan • EEC activities in Czech, Bulgaria, Romania, Poland* and Lithuania* already sold in 2012 • >1,200 out of 1,800 employees reduced • 40 out of 60 sites closed or sold • EBITDA contribution of €51m since program start, €46m in 2012 01 Business optimization Organic growth strategy • Commodity business already reduced laying solid foundation for future organic growth: • Machinery and mechanical engineering increased by 2% to 26%** • Automotive exposure increased by 4% to 10%**, to be additionally promoted by SSC in Alabama starting in 2013 • Share in construction industry down from 43% to 36%** • US serviced sales within flat division increased by 11% through common sales force with Macsteel • Swiss subsidiary expands spezialized and highly profitable bending services, market leader 7 * signed; closing expected in Q1 2013 ** 2012 compared to 2009
01 2/3 of restructuring already completed 250 290 8 Employees Sites UK ESP EEC GER BR Q3 2011 FY 2012 UK ESP F EEC 10,595 11,577 GER Holding US BR Q3 2011 Europe -713 Americas FY 2012 -23 -246 10,495 Jan 2013 Reduced by 1,200** incl. temps • Personnel expenses reduced by 6% or about €10m in Q4 yoy lfl • EEC completely sold, remaining business expected to be closed in due course Comments 5 sold, but not yet closed
Next steps restructuring01 France Germany UK • Complete re-arrangement of logistic network with formation of five big regions, decentralization of central warehouses, closure of ten sites, exit of low margin large account beam business • Negotiations with works councils, trade unions and labor administration finalized, implementation has started already to be completed by mid of the year • Enhanced restructuring measures with closure of five sites and reduction of commodity business to be implemented by new management • All measures are already in implementation according to plan and will be finalized mainly by end of Q1 • Three sites already closed • Closure of totally five sites will be finalized by the end of Q1 9
Highlights and update on strategy01 Financials Q4/FY 2012 Outlook Appendix 02 03 04 Agenda 10
Financials FY 201202 EBITDA Sales Gross profit Turnover * Before restructuring costs Restructuring costs 11 6,661 Tto +6.1% FY 2011 FY 2012 7,068 Tto €7,095m €7,388m +4.1% FY 2012FY 2011 -38.6%* FY 2012 139 Mio. €* €227m* €62m €217m FY 2011 €139m*€1,315m €1,288m -1.5%* FY 2012FY 2011 €1,295m*
Financials Q4 201202 EBITDA Sales Gross profit Turnover * Before restructuring costs Restructuring costs 12 €1,739m €1,633m -6.1% Q4 2012Q4 2011 1,636 Tto -3.1% Q4 2011 Q4 2012 1,585 Tto €14m -4.5%* Q4 2011 €-35m Q4 2012 €22m*€24m* €307m €298m -1.6%* Q4 2012Q4 2011 €302m*
1,332 1,587 1,885 1,885 1,739 1,945 1,964 1,847 1,633 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 +30.5% Turnover and sales02 Sales (€m)Turnover (Tto) • qoq decline reflecting seasonal slowdown and restructuring measures • Average prices per ton further decreased into Q4 (Q4: €1,030 vs. Q3: €1,047) but started to turn 1,318 1,498 1,763 1,765 1,636 1,857 1,863 1,764 1,585 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 -3.1% -10.1% -6.1% -11.6% 13
275 353 337 318 307 344 344* 306 302* 20.6 22.3 17.9 16.8 17.6 17.7 17.5* 16.6 18.5* Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 EBITDA (€m) / EBITDA-margin (%) Gross profit and EBITDA02 Gross profit (€m) / Gross-margin (%) • Gross profit margin already significantly improved • EBITDA in Q4 impacted by €57m charges for restructuring program * Before restructuring costs 14 48 104 62 37 24* 48* 50* 19 22* 3.6 6.6 3.3 1.9 1.3 2.5* 2.6* 1.0 1.3* Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012
45 81 50 24 22* 23* 36* 14* 18* Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Both regions recovering from their profitability lows02 Turnover (Tto) Sales (€m) EBITDA (€m) * Restructuring costs of €3m in Q1 and €17m in Q2 and €-1m in Q3 and €57m in Q4; Q4 2011: €10m. Turnover (Tto) Sales (€m) EBITDA (€m) EuropeAmericas 1,029 1,164 1,192 1,067 990 1,105 1,097 1,018 908 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 1,104 1,290 1,365 1,251 1,137 1,223 1,237 1,149 1,041 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 289 334 571 698 646 752 766 746 677 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 228 297 520 634 602 722 727 698 592 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 7 30 23 15 13 29 21 11 15* Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 -8.3% +4.9% -1.6% -8.5% 15
Net income in 2012 heavily impacted by one-offs02 569 657 19 Taxes -198 Net incomeFinancial result 76 D&A 165 EBITDA reported Opex (net) Personnel Costs Gross Profit 1,288 62 Restructuring €28m Restructuring €41m Impairments €55m 165 -198 If adjusted for one-offs • EBITDA at €139m • Net income at -€83m 16 Frefer €17m Cash taxes US and CH Restructuring €8m in €m
Free cash flow strongly positive02 Cash flow reconciliation in FY 2012 (€m) EBITDA reported Change in NWC Taxes Other CF from operating activities Capex net Free CF • NWC efficiency increased significantly • Reduced reinvestment needs: Capex (net) with -€34m below D&A ex ppa and ex impairments • Cash interests are only 2/3 of P&L interest charges due to accretion of debt component for outstanding convertibles and interest costs on pensions • Most of restructuring charges become cash effective in 2013, but compensated by NWC reduction of closed sites Comments 62 7 67 34 101 54 5 91 Interest 17
Net debt significantly reduced by tight NWC management02 * exchange rate effects, interest Development of net financial debt in FY 2012 (€m) 2011 CF from operating activities Capex (net) Dividends/ other* 2012 Development of net financial debt in Q4 2012 (€m) Q3 CF from operating activities Capex (net) Dividends/ other* Q4 • Debt reduction in Q4 mainly driven by NWC release of €222m 34 101 422 18 471 187 422 417 596 18
Strong balance sheet despite challenging year and impairments02 * Gearing = Net debt/Equity attributable to shareholders of Klöckner & Co SE less goodwill from business combinations subsequent to May 28, 2010 Comments • Equity ratio of ~42% • Net debt of €422m • Gearing* at 28% • NWC decreased by €127m to €1,407m yoy 50% 29.0% 32.1% 20.2% 3.1% 15.6% Balance sheet total 2012: €3,905m 41.9% 32.7% 25.4% Non- current assets 1,132 Inventories 1,254 Trade receivables 787 Other current assets 122 Liquidity 610 Equity 1,635 Non- current liabilities 1,276 Current liabilities 994 100% 0% 19
Balanced maturity profile December 201202 Maturity profile of committed facilities and drawn amounts (€m) €m Facility Committed Drawn amount FY 2012* FY 2011* Bilateral Facilities1) 583 98 126 Other Bonds 9 9 20 ABS 568 161 175 Syndicated Loan 500 161 226 Promissory Note 343 348 349 Total Senior Debt 2,003 777 896 Convertible 20072) 0 0 319 Convertible 20092) 98 92 86 Convertible 20102) 186 164 157 Total Debt 2,287 1,033 1,458 Cash4) 611 987 Net Debt 422 471 €m Q4 2012 Adjusted equity 1,491 Net debt 422 Gearing3) 28% *Including interest 1) Including finance lease 2) Drawn amount excludes equity component 3) Net debt/Equity attributable to shareholders of Klöckner & Co SE less goodwill from business combinations subsequent to May 28, 2010 4) Incl. cash in assets held for sale 20 Committed facilities Drawn amounts 355 1,036 297 142 457 100 358 267 142 188 2013 2014 2015 2016 Thereafter
Outlook • Q1 2013 • Turnover to be sequentially up in Q1 • EBITDA in Q1 expected to be between €30-40m with further improvement in Q2 • FY 2013 • Turnover and sales to be stable due to growth in the US compensating decline in Europe also driven by restructuring • EBITDA to be increased to ~€200m especially driven by €60m restructuring contribution • Net income and free cash flow expected to be positive • Net debt again to be reduced yoy despite restructuring cash-outs 03 21
Highlights and update on strategy01 Financials Q4/FY 2012 Outlook Appendix 02 03 04 Agenda 22
Quarterly results and FY results 2008-201204 23 (€m) Q4 2012 Q3 2012 Q2 2012 Q1 2012 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 FY 2012 FY 2011 FY 2010 FY 2009 FY 2008 Turnover (Tto) 1,585 1,764 1,863 1,857 1,636 1,765 1,763 1,498 1,318 7,068 6,661 5,314 4,119 5,974 Sales 1,633 1,847 1,964 1,945 1,739 1,885 1,885 1,587 1,332 7,388 7,095 5,198 3,860 6,750 Gross profit 298 306 340 344 307 318 337 353 275 1,288 1,315 1,136 645 1,366 % margin 18.3 16.6 17.3 17.7 17.6 16.8 17.9 22.3 20.6 17.4 18.5 21.9 16.7 20.2 EBITDA -35 19 33 45 14 37 62 104 48 62 217 238 -68 601 % margin -2.1 1.0 1.7 2.3 0.8 1.9 3.3 6.6 3.6 0.8 3.1 4.6 -1.8 8.9 EBIT -89 -9 -23 18 -18 8 36 86 24 -103 111 152 -178 533 Financial result -12 -21 -18 -24 -21 -22 -21 -19 -19 -76 -84 -67 -62 -70 Income before taxes -101 -30 -41 -6 -39 -15 15 66 5 -179 27 84 -240 463 Income taxes -20 2 3 -4 12 3 -9 -22 12 -19 -17 -4 54 -79 Net income -121 -28 -38 -10 -27 -12 5 44 17 -198 10 80 -186 384 Minority interests -1 -1 0 0 -1 -1 0 1 1 -3 -1 3 3 -14 Net income KlöCo -120 -27 -38 -10 -27 -11 5 43 16 -195 12 78 -188 398 EPS basic (€) -1.20 -0.27 -0.38 -0.10 -0.27 -0.11 0.07 0.65 0.25 -1.95 0.14 1.17 -3.61 8.56 EPS diluted (€) -1.20 -0.27 -0.38 -0.10 -0.27 -0.11 0.07 0.60 0.25 -1.95 0.14 1.17 -3.61 8.11
Strong Growth: 24 acquisitions since the IPO04 24 Acquisitions1) Acquired sales1),2) €141m €567m €108m 2 4 12 2 2005 2006 2007 2008 2009 2010 4 €231m €712m 2011 2 €1.15bn ¹ Date of announcement 2 Sales in the year prior to acquisitions Country Acquired 1) Company Sales (FY)2) GER Mar 2010 Becker Stahl-Service €600m CH Jan 2010 Bläsi €32m 2010 4 acquisitions €712m US Mar 2008 Temtco €226m UK Jan 2008 Multitubes €5m 2008 2 acquisitions €231m CH Sep 2007 Lehner & Tonossi €9m UK Sep 2007 Interpipe €14m US Sep 2007 ScanSteel €7m BG Aug 2007 Metalsnab €36m UK Jun 2007 Westok €26m US May 2007 Premier Steel €23m GER Apr 2007 Zweygart €11m GER Apr 2007 Max Carl €15m GER Apr 2007 Edelstahlservice €17m US Apr 2007 Primary Steel €360m NL Apr 2007 Teuling €14m F Jan 2007 Tournier €35m 2007 12 acquisitions €567m 2006 4 acquisitions €108m USA Dec 2010 Lake Steel €50m USA Sep 2010 Angeles Welding €30m Brazil May 2011 Frefer €150m USA April 2011 Macsteel €1bn 2011 2 acquisitions €1,150m
Comments Balance sheet as of December 31, 201204 25 (€m) December 31, 2012 December 31, 2011 Non-current assets 1,132 1,295 Inventories 1,254 1,362 Trade receivables 787 922 Cash & Cash equivalents 610 987 Other assets 122 140 Total assets 3,905 4,706 Equity 1,635 1,843 Total non-current liabilities 1,276 1,526 thereof financial liabilities 914 1,068 Total current liabilities 994 1,337 thereof trade payables 634 750 Total equity and liabilities 3,905 4,706 Net working capital 1,407 1,534 Net financial debt 422 471 Shareholders’ equity: • Increase to 42% mainly caused by repayment of convertible bonds Financial debt: • Gearing at 28% • Gross debt of €1.0bn and cash position of €0.6bn result in a net debt position of €422m
Profit & loss 201204 (€m) FY 2012 FY 2011 Sales 7,388 7,095 Gross profit 1,288 1,315 Personnel costs -657 -588 Other operating expenses (net) -569 -510 EBITDA 62 217 Depreciation & Amortization -165 -106 EBIT -103 111 Financial result -76 -84 EBT -179 27 Taxes -19 -17 Net income -198 10 Minorities -3 -1 Net income attributable to KCO shareholders -195 12 26
Segment performance Q4 201204 27 (€m) Europe Americas HQ/Consol. Total Turnover (Tto) Q4 2012 908 677 1,585 Q4 2011 990 646 1,636 ∆ % -8.3 4.9 -3.1 Sales Q4 2012 1,041 592 1,633 Q4 2011 1,137 602 1,739 ∆ % -8.5 -1.6 -6.1 EBITDA Q4 2012 -37 14 -12 -35 % margin -3.6 2.4 -2.1 Q4 2011 12 13 -11 14 %margin 1.0 2.1 0.8 ∆ % EBITDA -425.7 10.4 -358.6
Acquisitions shift exposure towards more promising regions and products04 28 Machinery and mechanical 26% engineering Miscellaneous 10% Local dealers 12% Household appliances/ Consumer goods 6% 36% Construction industry Automotive industry 10% Sales by industry Sales by markets 38% USAFrance/Belgium 13% Switzerland 10% UK 6% 25% Germany/EEC Spain 3% Netherlands 3% Brazil 1% China <1% 21% Long products Quality steel/Stainless steel 8% Aluminium 7% Tubes 7% 46% Flat productsOthers 11% Sales by product
Current shareholder structure04 29 Geographical breakdown of identified institutional investors Comments • Identified institutional investors account for 46% • German investors incl. retail dominate • Top 10 shareholdings represent around 27% • Retail shareholders represent 33% As of February 2013 Other EU 15% US 34% Other World 8% Switzerland 5% Germany 24% France 11% UK 3%
Appendix04 30 Financial calendar 2013 May 8, 2013 Q1 interim report 2013 May 24, 2013 Annual General Meeting 2013 August 7, 2013 Q2 interim report 2013 November 6, 2013 Q3 interim report 2013 Contact details Investor Relations Dr. Thilo Theilen, Head of Investor Relations & Corporate Communications Phone: +49 203 307 2050 Fax: +49 203 307 5025 E-mail: thilo.theilen@kloeckner.com Internet: www.kloeckner.com
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

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Klöckner & Co - Roadshow Presentation March 6-7, 2013

  • 1.
    Klöckner & CoSE A Leading Multi Metal Distributor Roadshow Deutsche Bank Frankfurt CEO Gisbert Rühl March 6 - 7, 2013 CFO Marcus A. Ketter
  • 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
  • 3.
    Highlights and updateon strategy01 Financials Q4/FY 2012 Outlook Appendix 02 03 04 Agenda 3
  • 4.
    Restructuring ahead ofplan – but markets esp. in Europe still challenging Challenging environment used to do necessary adjustments to return to profitable growth even without market support • Steel markets in Europe and finally also in the US have been heavily under pressure • EBITDA before restructuring (€139m) below last year (€227m) • Net income of -€198m strongly impacted by restructuring costs and other one-offs • Turnover and sales improved by 6.1% and 4.1% to 7.1m To and €7.4bn respectively • US again cornerstone of growth profile: +31% turnover yoy • FCF generation with €67m showing companies’ strict NWC-management and compensation of restructuring expenses by cash releases • Strong net debt reduction from €596m in Q3 to €422m and by €49m yoy • Restructuring ahead of plan: €60m EBITDA contribution targeted for 2013 • Restructuring driven earnings improvement to ~€200m EBITDA (+45%) at stable turnover in 2013 expected • Further market growth in the US anticipated while Europe should pass the trough • Management Board strengthened by Marcus A. Ketter and Karsten Lork • Interfer Holding GmbH belonging to Dr. Albrecht Knauf acquired a stake of 7.82% in Klöckner & Co 01 4
  • 5.
    Klöckner & Co2020 strategy Acquisition of distributors and steel service centers with higher-margin products and value added services 01 External growth strategy Organic growth strategy Business optimization Personnel & Management development Stronger focus on expansion of value added services especially for industrial customer segments Realizing scale benefits in purchasing and product management and optimization of logistics and inventory management Group-wide talent and performance management supported by attractive and structured compensation and benefits system 5
  • 6.
    Flexible response tochallenging market environment01 • Against the background of the current market situation we have streamlined our strategy and implemented an extensive restructuring program in Europe Business optimization Organic growth strategy Currentfocus External growth strategy • Network streamlining by significantly extended restructuring program • Reduction of 60 sites, efficiency measures in remaining sites • Workforce reduction of >1,800 (16% of total workforce) • Discontinuation of unprofitable business/ clients • Streamlining of central functions • Increasing share of value added services and higher margin products around core business • Re-shoring driven by low energy costs should provide additional growth opportunities in the US • Acquisition of distributors and SSC with higher margin products and value- added services • Shale gas opportunities • Niche suppliers 6
  • 7.
    Implementation of restructuringmeasures ahead of plan • EEC activities in Czech, Bulgaria, Romania, Poland* and Lithuania* already sold in 2012 • >1,200 out of 1,800 employees reduced • 40 out of 60 sites closed or sold • EBITDA contribution of €51m since program start, €46m in 2012 01 Business optimization Organic growth strategy • Commodity business already reduced laying solid foundation for future organic growth: • Machinery and mechanical engineering increased by 2% to 26%** • Automotive exposure increased by 4% to 10%**, to be additionally promoted by SSC in Alabama starting in 2013 • Share in construction industry down from 43% to 36%** • US serviced sales within flat division increased by 11% through common sales force with Macsteel • Swiss subsidiary expands spezialized and highly profitable bending services, market leader 7 * signed; closing expected in Q1 2013 ** 2012 compared to 2009
  • 8.
    01 2/3 ofrestructuring already completed 250 290 8 Employees Sites UK ESP EEC GER BR Q3 2011 FY 2012 UK ESP F EEC 10,595 11,577 GER Holding US BR Q3 2011 Europe -713 Americas FY 2012 -23 -246 10,495 Jan 2013 Reduced by 1,200** incl. temps • Personnel expenses reduced by 6% or about €10m in Q4 yoy lfl • EEC completely sold, remaining business expected to be closed in due course Comments 5 sold, but not yet closed
  • 9.
    Next steps restructuring01 France Germany UK •Complete re-arrangement of logistic network with formation of five big regions, decentralization of central warehouses, closure of ten sites, exit of low margin large account beam business • Negotiations with works councils, trade unions and labor administration finalized, implementation has started already to be completed by mid of the year • Enhanced restructuring measures with closure of five sites and reduction of commodity business to be implemented by new management • All measures are already in implementation according to plan and will be finalized mainly by end of Q1 • Three sites already closed • Closure of totally five sites will be finalized by the end of Q1 9
  • 10.
    Highlights and updateon strategy01 Financials Q4/FY 2012 Outlook Appendix 02 03 04 Agenda 10
  • 11.
    Financials FY 201202 EBITDA Sales Grossprofit Turnover * Before restructuring costs Restructuring costs 11 6,661 Tto +6.1% FY 2011 FY 2012 7,068 Tto €7,095m €7,388m +4.1% FY 2012FY 2011 -38.6%* FY 2012 139 Mio. €* €227m* €62m €217m FY 2011 €139m*€1,315m €1,288m -1.5%* FY 2012FY 2011 €1,295m*
  • 12.
    Financials Q4 201202 EBITDA Sales Grossprofit Turnover * Before restructuring costs Restructuring costs 12 €1,739m €1,633m -6.1% Q4 2012Q4 2011 1,636 Tto -3.1% Q4 2011 Q4 2012 1,585 Tto €14m -4.5%* Q4 2011 €-35m Q4 2012 €22m*€24m* €307m €298m -1.6%* Q4 2012Q4 2011 €302m*
  • 13.
    1,332 1,587 1,885 1,885 1,739 1,945 1,964 1,847 1,633 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 +30.5% Turnoverand sales02 Sales (€m)Turnover (Tto) • qoq decline reflecting seasonal slowdown and restructuring measures • Average prices per ton further decreased into Q4 (Q4: €1,030 vs. Q3: €1,047) but started to turn 1,318 1,498 1,763 1,765 1,636 1,857 1,863 1,764 1,585 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 -3.1% -10.1% -6.1% -11.6% 13
  • 14.
    275 353 337 318 307 344 344* 306302* 20.6 22.3 17.9 16.8 17.6 17.7 17.5* 16.6 18.5* Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 EBITDA (€m) / EBITDA-margin (%) Gross profit and EBITDA02 Gross profit (€m) / Gross-margin (%) • Gross profit margin already significantly improved • EBITDA in Q4 impacted by €57m charges for restructuring program * Before restructuring costs 14 48 104 62 37 24* 48* 50* 19 22* 3.6 6.6 3.3 1.9 1.3 2.5* 2.6* 1.0 1.3* Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012
  • 15.
    45 81 50 24 22* 23* 36* 14* 18* Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Bothregions recovering from their profitability lows02 Turnover (Tto) Sales (€m) EBITDA (€m) * Restructuring costs of €3m in Q1 and €17m in Q2 and €-1m in Q3 and €57m in Q4; Q4 2011: €10m. Turnover (Tto) Sales (€m) EBITDA (€m) EuropeAmericas 1,029 1,164 1,192 1,067 990 1,105 1,097 1,018 908 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 1,104 1,290 1,365 1,251 1,137 1,223 1,237 1,149 1,041 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 289 334 571 698 646 752 766 746 677 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 228 297 520 634 602 722 727 698 592 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 7 30 23 15 13 29 21 11 15* Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 -8.3% +4.9% -1.6% -8.5% 15
  • 16.
    Net income in2012 heavily impacted by one-offs02 569 657 19 Taxes -198 Net incomeFinancial result 76 D&A 165 EBITDA reported Opex (net) Personnel Costs Gross Profit 1,288 62 Restructuring €28m Restructuring €41m Impairments €55m 165 -198 If adjusted for one-offs • EBITDA at €139m • Net income at -€83m 16 Frefer €17m Cash taxes US and CH Restructuring €8m in €m
  • 17.
    Free cash flowstrongly positive02 Cash flow reconciliation in FY 2012 (€m) EBITDA reported Change in NWC Taxes Other CF from operating activities Capex net Free CF • NWC efficiency increased significantly • Reduced reinvestment needs: Capex (net) with -€34m below D&A ex ppa and ex impairments • Cash interests are only 2/3 of P&L interest charges due to accretion of debt component for outstanding convertibles and interest costs on pensions • Most of restructuring charges become cash effective in 2013, but compensated by NWC reduction of closed sites Comments 62 7 67 34 101 54 5 91 Interest 17
  • 18.
    Net debt significantlyreduced by tight NWC management02 * exchange rate effects, interest Development of net financial debt in FY 2012 (€m) 2011 CF from operating activities Capex (net) Dividends/ other* 2012 Development of net financial debt in Q4 2012 (€m) Q3 CF from operating activities Capex (net) Dividends/ other* Q4 • Debt reduction in Q4 mainly driven by NWC release of €222m 34 101 422 18 471 187 422 417 596 18
  • 19.
    Strong balance sheetdespite challenging year and impairments02 * Gearing = Net debt/Equity attributable to shareholders of Klöckner & Co SE less goodwill from business combinations subsequent to May 28, 2010 Comments • Equity ratio of ~42% • Net debt of €422m • Gearing* at 28% • NWC decreased by €127m to €1,407m yoy 50% 29.0% 32.1% 20.2% 3.1% 15.6% Balance sheet total 2012: €3,905m 41.9% 32.7% 25.4% Non- current assets 1,132 Inventories 1,254 Trade receivables 787 Other current assets 122 Liquidity 610 Equity 1,635 Non- current liabilities 1,276 Current liabilities 994 100% 0% 19
  • 20.
    Balanced maturity profileDecember 201202 Maturity profile of committed facilities and drawn amounts (€m) €m Facility Committed Drawn amount FY 2012* FY 2011* Bilateral Facilities1) 583 98 126 Other Bonds 9 9 20 ABS 568 161 175 Syndicated Loan 500 161 226 Promissory Note 343 348 349 Total Senior Debt 2,003 777 896 Convertible 20072) 0 0 319 Convertible 20092) 98 92 86 Convertible 20102) 186 164 157 Total Debt 2,287 1,033 1,458 Cash4) 611 987 Net Debt 422 471 €m Q4 2012 Adjusted equity 1,491 Net debt 422 Gearing3) 28% *Including interest 1) Including finance lease 2) Drawn amount excludes equity component 3) Net debt/Equity attributable to shareholders of Klöckner & Co SE less goodwill from business combinations subsequent to May 28, 2010 4) Incl. cash in assets held for sale 20 Committed facilities Drawn amounts 355 1,036 297 142 457 100 358 267 142 188 2013 2014 2015 2016 Thereafter
  • 21.
    Outlook • Q1 2013 •Turnover to be sequentially up in Q1 • EBITDA in Q1 expected to be between €30-40m with further improvement in Q2 • FY 2013 • Turnover and sales to be stable due to growth in the US compensating decline in Europe also driven by restructuring • EBITDA to be increased to ~€200m especially driven by €60m restructuring contribution • Net income and free cash flow expected to be positive • Net debt again to be reduced yoy despite restructuring cash-outs 03 21
  • 22.
    Highlights and updateon strategy01 Financials Q4/FY 2012 Outlook Appendix 02 03 04 Agenda 22
  • 23.
    Quarterly results andFY results 2008-201204 23 (€m) Q4 2012 Q3 2012 Q2 2012 Q1 2012 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 FY 2012 FY 2011 FY 2010 FY 2009 FY 2008 Turnover (Tto) 1,585 1,764 1,863 1,857 1,636 1,765 1,763 1,498 1,318 7,068 6,661 5,314 4,119 5,974 Sales 1,633 1,847 1,964 1,945 1,739 1,885 1,885 1,587 1,332 7,388 7,095 5,198 3,860 6,750 Gross profit 298 306 340 344 307 318 337 353 275 1,288 1,315 1,136 645 1,366 % margin 18.3 16.6 17.3 17.7 17.6 16.8 17.9 22.3 20.6 17.4 18.5 21.9 16.7 20.2 EBITDA -35 19 33 45 14 37 62 104 48 62 217 238 -68 601 % margin -2.1 1.0 1.7 2.3 0.8 1.9 3.3 6.6 3.6 0.8 3.1 4.6 -1.8 8.9 EBIT -89 -9 -23 18 -18 8 36 86 24 -103 111 152 -178 533 Financial result -12 -21 -18 -24 -21 -22 -21 -19 -19 -76 -84 -67 -62 -70 Income before taxes -101 -30 -41 -6 -39 -15 15 66 5 -179 27 84 -240 463 Income taxes -20 2 3 -4 12 3 -9 -22 12 -19 -17 -4 54 -79 Net income -121 -28 -38 -10 -27 -12 5 44 17 -198 10 80 -186 384 Minority interests -1 -1 0 0 -1 -1 0 1 1 -3 -1 3 3 -14 Net income KlöCo -120 -27 -38 -10 -27 -11 5 43 16 -195 12 78 -188 398 EPS basic (€) -1.20 -0.27 -0.38 -0.10 -0.27 -0.11 0.07 0.65 0.25 -1.95 0.14 1.17 -3.61 8.56 EPS diluted (€) -1.20 -0.27 -0.38 -0.10 -0.27 -0.11 0.07 0.60 0.25 -1.95 0.14 1.17 -3.61 8.11
  • 24.
    Strong Growth: 24acquisitions since the IPO04 24 Acquisitions1) Acquired sales1),2) €141m €567m €108m 2 4 12 2 2005 2006 2007 2008 2009 2010 4 €231m €712m 2011 2 €1.15bn ¹ Date of announcement 2 Sales in the year prior to acquisitions Country Acquired 1) Company Sales (FY)2) GER Mar 2010 Becker Stahl-Service €600m CH Jan 2010 Bläsi €32m 2010 4 acquisitions €712m US Mar 2008 Temtco €226m UK Jan 2008 Multitubes €5m 2008 2 acquisitions €231m CH Sep 2007 Lehner & Tonossi €9m UK Sep 2007 Interpipe €14m US Sep 2007 ScanSteel €7m BG Aug 2007 Metalsnab €36m UK Jun 2007 Westok €26m US May 2007 Premier Steel €23m GER Apr 2007 Zweygart €11m GER Apr 2007 Max Carl €15m GER Apr 2007 Edelstahlservice €17m US Apr 2007 Primary Steel €360m NL Apr 2007 Teuling €14m F Jan 2007 Tournier €35m 2007 12 acquisitions €567m 2006 4 acquisitions €108m USA Dec 2010 Lake Steel €50m USA Sep 2010 Angeles Welding €30m Brazil May 2011 Frefer €150m USA April 2011 Macsteel €1bn 2011 2 acquisitions €1,150m
  • 25.
    Comments Balance sheet asof December 31, 201204 25 (€m) December 31, 2012 December 31, 2011 Non-current assets 1,132 1,295 Inventories 1,254 1,362 Trade receivables 787 922 Cash & Cash equivalents 610 987 Other assets 122 140 Total assets 3,905 4,706 Equity 1,635 1,843 Total non-current liabilities 1,276 1,526 thereof financial liabilities 914 1,068 Total current liabilities 994 1,337 thereof trade payables 634 750 Total equity and liabilities 3,905 4,706 Net working capital 1,407 1,534 Net financial debt 422 471 Shareholders’ equity: • Increase to 42% mainly caused by repayment of convertible bonds Financial debt: • Gearing at 28% • Gross debt of €1.0bn and cash position of €0.6bn result in a net debt position of €422m
  • 26.
    Profit & loss201204 (€m) FY 2012 FY 2011 Sales 7,388 7,095 Gross profit 1,288 1,315 Personnel costs -657 -588 Other operating expenses (net) -569 -510 EBITDA 62 217 Depreciation & Amortization -165 -106 EBIT -103 111 Financial result -76 -84 EBT -179 27 Taxes -19 -17 Net income -198 10 Minorities -3 -1 Net income attributable to KCO shareholders -195 12 26
  • 27.
    Segment performance Q4201204 27 (€m) Europe Americas HQ/Consol. Total Turnover (Tto) Q4 2012 908 677 1,585 Q4 2011 990 646 1,636 ∆ % -8.3 4.9 -3.1 Sales Q4 2012 1,041 592 1,633 Q4 2011 1,137 602 1,739 ∆ % -8.5 -1.6 -6.1 EBITDA Q4 2012 -37 14 -12 -35 % margin -3.6 2.4 -2.1 Q4 2011 12 13 -11 14 %margin 1.0 2.1 0.8 ∆ % EBITDA -425.7 10.4 -358.6
  • 28.
    Acquisitions shift exposuretowards more promising regions and products04 28 Machinery and mechanical 26% engineering Miscellaneous 10% Local dealers 12% Household appliances/ Consumer goods 6% 36% Construction industry Automotive industry 10% Sales by industry Sales by markets 38% USAFrance/Belgium 13% Switzerland 10% UK 6% 25% Germany/EEC Spain 3% Netherlands 3% Brazil 1% China <1% 21% Long products Quality steel/Stainless steel 8% Aluminium 7% Tubes 7% 46% Flat productsOthers 11% Sales by product
  • 29.
    Current shareholder structure04 29 Geographicalbreakdown of identified institutional investors Comments • Identified institutional investors account for 46% • German investors incl. retail dominate • Top 10 shareholdings represent around 27% • Retail shareholders represent 33% As of February 2013 Other EU 15% US 34% Other World 8% Switzerland 5% Germany 24% France 11% UK 3%
  • 30.
    Appendix04 30 Financial calendar 2013 May8, 2013 Q1 interim report 2013 May 24, 2013 Annual General Meeting 2013 August 7, 2013 Q2 interim report 2013 November 6, 2013 Q3 interim report 2013 Contact details Investor Relations Dr. Thilo Theilen, Head of Investor Relations & Corporate Communications Phone: +49 203 307 2050 Fax: +49 203 307 5025 E-mail: thilo.theilen@kloeckner.com Internet: www.kloeckner.com
  • 31.
    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