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Klöckner & Co - UBS Best of Germany Conference, September 17, 2013

- Klöckner & Co's Q2 2013 financial results showed declines in turnover, sales, and gross profit compared to Q2 2012 due to weak steel markets and ongoing restructuring efforts. The EBITDA of €43m met guidance due to cost reductions from restructuring measures. - Turnover decreased 9.3% to €1,698m and sales decreased 13.5% to €1,690m as a result of market declines, site closures, and exiting low-margin business. However, the gross margin improved. - Restructuring measures have significantly reduced costs and are on track to achieve the targeted annual EBITDA impact of around €160m, with €17m

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Klöckner & Co SE A Leading Multi Metal Distributor Gisbert Rühl CEO UBS Best of Germany Conference New York September 17, 2013
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
Agenda 01 Highlights and update on strategy 02 Financials Q2 2013 03 Outlook 04 Appendix 3
01 Negative market impact increasingly compensated by far advanced restructuring measures EBITDA-margin improved, net loss reduced • • Market especially in Europe (-7,4% yoy)* but also in the US (-2.5% yoy)** in Q2 further under pressure Turnover of Klöckner & Co declined by 9.3% yoy also due to closure and divestment of sites and exit of low margin business (-5.0%p) • Sales -13.5% yoy additionally burdened by lower price level Gross profit of €305m under proportionally by 11.4% below prior year, gross margin improved from 17.5% to 18.0% • • Q2-EBITDA of €43m met guidance of €35-45m also w/o incl. €7m from the release of pension accruals • • Operating EBITDA of between €30m-€40m expected for Q3 2013 Restructuring measures far advanced: 60 out of 70 sites closed and 1.800 out of more than 2.000 HC reduced; extended measures to be implemented by the end of 2013, EBITDA contribution of €17m in Q2 and €29m in H1 realized Full year operating EBITDA target at last year`s level of €140m (before restructuring) despite weaker H1 2013. Restructuring costs of €18m (w/o compensating effects) expected against €77m in 2012. * Source: Eurometal; turnover of distribution in Q2 in Europe yoy. ** Source: MSCI; turnover of distribution/ SSC in Q2 in the US yoy. 4
Against the background of continuing muted outlook for the European steel market we further extended our comprehensive restructuring program (KCO 6.0) in May 01 Measures • • • • • • • Program extension in France Realization of further synergy potential in the US Reduction of overall > 2,000 employees (= 17%) and ~70 sites Total cost reduction increased to €190m Total annual EBITDA-impact increased to ~€160m (before: €150m) Reduction of NWC by >€170m Additional cost of approximately €18m mainly offset by NWC release €51m 2011-2012 2013 €29m €65m €45m 2014 already realized 5 Total annual EBITDA-impact of ~€160m
01 Restructuring far advanced Employees Comments 11,577 -1,200 • UK ESP F • -359 EEC GER Americas Europe 9,995 -23 US ~9,700 BR Holding Q3 2011 F, US Q2 2013 • Q4 2013 Reduced by ~ 1,600, including temps ~1,800 Sites 290 UK ESP Q3 2011 F EEC GER US BR 230 F, US Q2 2013 6 220 Q4 2013 1,800 out of more than 2,000 HC reductions completed 60 out of 70 targeted branches closed or sold since start of program in Q3 2011 Only extended measures concerning France and the US outstanding which are according to plan to be implemented in H2
01 KCO 6.0 measures having strong impact on the P&L KCO 6.0 EBITDA impact Comments • KCO 6.0 EBITDA expenses €17m 50 171) -23 • 20 10 6 44* 43 29 -14 21 33 16 24 • -4 7 EBITDA Q2 2012 Volume Effect Price Effect KCO 6.0 GP effect KCO 6.0 Fix-cost effect OPEX 2) EBITDA Q2 2013 • In Q2 measures contributed an additional €17m to EBITDA against prior year, ytd €29m Cost cuts achieved trough KCO 6.0 amounted to €24m in Q2, ytd €40m Gross profit despite higher margin €-34m due to lower turnover OPEX declined by 9% compared to Q2 2012 Total GP effect: €34m OPEX in €m 1) 294 288 -2.2% Q2 12 3) 280 -2.6% Q3 12 3) Q4 123) 274 -2.3% -1.8% Q1 13 Q2 13 7 Includes one-off gain of €7m due to release of pension accruals. 3) 269 Restructuring costs. 2) -9% Incl. expenses due to initial application of IAS19 revised 2011 and excl. restructuring expenses.
01 KCO WIN measures to support “Klöckner & Co 2020“ strategy Growth and optimization External & internal growth • KCO WIN Profitable growth strategy with focus on value added products and services • • • Optimized net working capital Optimized pricing and sales force management Global sourcing to leverage price potential and global material flows Service model • • • Advanced logistics Extended e-commerce solutions Specific value streams for servicing customers Business model innovations • Management & personnel development • Operations Differentiation Enabling activities Controlling & IT systems • • • Opportunities for disruptive innovations through fundamental business model changes Optimized and extended management reviews and development programs Advanced systems for Accounting, Controlling, Audit, Tax & Treasury Extended Corporate IT Advanced global collaboration 8
Agenda 01 Highlights and update on strategy 02 Financials Q2 2013 03 Outlook 04 Appendix 9
02 Financials Q2 2013 Turnover Sales -9.3% €1,964m -13.5% 1,863 Tto €1,698m 1,690 Tto Q2 2012 Q2 2013 Q2 2012 Gross profit €344m* €340m** EBITDA -11.4% -10.2% Q2 2012 Q2 2013 €305m €50m* Q2 2013 €33m** Q2 2012 * Excluding restructuring costs but restated for the initial application of IAS19 revised 2011. ** Including restructuring costs and restated for the initial application of IAS19 revised 2011. Restructuring costs 10 -13.5% +31.7% €43m Q2 2013
02 Financials H1 2013 Turnover Sales €3,909m -10.3% -15.0% 3,720 Tto 3,336 Tto H1 2012 €3,322m H1 2013 H1 2012 Gross profit €687m* €683m** EBITDA -11.6% -11.1% €97m* €608m -26.1% €77m** H1 2012 H1 2013 H1 2013 H1 2012 * Excluding restructuring costs but restated for the initial application of IAS19 revised 2011. ** Including restructuring costs and restated for the initial application of IAS19 revised 2011. Restructuring costs 11 -6.5% €72m H1 2013
02 Turnover and sales Turnover (Tto) & Americas share Sales (€m) & Americas share +30.5% 1,885 1,857 1,863 1,763 1,765 1,764 1,636 39.5 39.5 1,585 40.5 41.1 42.3 42.7 1,646 43.5 1,885 1,945 1,964 1,739 1,847 1,633 44.3 27.6 -9.3% 33.6 34.6 37.1 37.0 37.8 1,625 36.3 1,690 37.4 +4.5% +2.7% • • Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 37.5 -13.5% 32.4 Q2 2011 1,698 Q2 2013 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 • Turnover share of Americas segment continuously increasing from 32% in Q2 2011 to over 44% in Q2 2013 12 Sales -13.5% yoy additionally impacted by lower price level • Turnover down 9.3% yoy due to weak steel markets and restructuring impact of -5.0%p but sequentially up by 2.7% driven by seasonal effects Average price per ton down yoy (Q2 2013: €1,004 vs. Q2 2012: €1,054)
02 Gross profit and EBITDA Gross profit (€m) / Gross-margin (%) EBITDA (€m) / EBITDA-margin (%) 62 344 344* 47* 50* 337 43* 3.3 37 2.5* 17.9 318 18.5* 307 16.8 Q2 2011 • 17.6 Q3 2011 Q4 2011 306 17.7 18.6 302* 17.5* 303 Q1 2013 2.4* 1.9 305 Q4 2012 29 24* 18.0 Q2 2013 2.5* 1.0 1.3* 21* 1.8 1.3* 18 Q4 2011 Q1 Q2 Q3 Q4 Q1 2012** 2012** 2012** 2012** 2013 16.6 Q1 2012 Q2 2012 Q3 2012 Q2 2011 • Despite further declining prices, gross profit margin improved compared to Q2 2012 (+0.5%p) mainly due to exit of low margin business Q3 2011 Strong cost reduction with positive effect on EBITDA-margin, generating significantly higher EBITDA qoq out of only slightly improved gross profit * Incl. €7m pension release; without release 2.1% EBITDA-margin * Before restructuring costs. ** As restated for the initial application of IAS19 revised 2011. 13 Q2 2013
02 Key figures by segment Turnover (Tto) Sales (€m) EBITDA (€m) 50 Europe 1,365 1,251 1,192 1,067 990 1,105 1,097 1,018 1,137 908 930 1,223 1,237 1,149 941 35* 28*** 24 22* 22* 16* -14.3% Turnover (Tto) 698 752 646 12* -14.2% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2011 2011 2012 2012 2012 2012 2013 2013 Americas 1,041 1,017 1,061 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2011 2011 2012 2012 2012 2012 2013 2013 Sales (€m) 766 746 677 716 571 634 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2011 2011 2012** 2012** 2012** 2012** 2013 2013 EBITDA (€m) 722 749 727 602 698 592 608 637 520 29 23 22 15 21 20 16* 13 12 -12.3% -2.1% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2011 2011 2012 2012 2012 2012 2013 2013 14 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2011 2011 2012 2012 2012 2012 2013 2013 * Restructuring costs: Europe: €3m in Q1, €17m in Q2, €-1m in Q3 and €57m in Q4; Q4 2011: €10m; Americas: €1m in Q4. ** As restated for the initial application of IAS19 revised 2011. *** Includes €7m release of pensions. 14 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2011 2011 2012** 2012** 2012** 2012** 2013 2013
02 Cash flow and net debt development Cash flow reconciliation in Q2 2013 (€m) 18 Comments • • -29 -9 43 -35 -12 -20 -8 EBITDA Change in Interest Taxes reported NWC Other CF from Capex operating net activities Free CF Development of net financial debt in Q2 2013 (€m) Q1 2013 -482 CF from operating activities Capex (net) -12 -8 Other* Q2 2013 13 -489 * exchange rate effects, interest. 15 NWC reduced qoq due to weak demand Capex (net) of €-8m
02 Strong balance sheet Assets Equity & liabilities 3,880 1,107 Inventories 1,069 1,254 3,880 1,502 1,514 38.9% 1,384 1,251 994 1,132 FY 2012** Equity 3,897 38.7% Non-current assets 3,897 Q2 2013 1,198 Non-current liabilities Trade receivables 787 960 Other current assets 122 Liquidity 610 100 570 FY 2012** Q2 2013 Current liabilities Comments • • • • Equity ratio still solid at 39% * Gearing = Net debt/Equity attributable to shareholders of Klöckner & Co SE less goodwill from business combinations subsequent to May 23, 2013. Net debt of €489m ** As restated for the initial application of IAS 19 rev. 2011. Gearing* at 33% NWC increased seasonally by €49m to €1,456m 16
02 Balanced maturity profile June 2013 Drawn amount €m Facility €m Committed Q2 2013* Q2 2013 FY 2012* Adjusted equity 565 184 98 4 4 9 ABS 570 179 161 Gearing 3) Syndicated Loan 360 161 161 Promissory Note 269 270 348 Maturity profile of committed facilities and drawn amounts (€m) 864 Bilateral Facilities 1) Other Bonds 1,493 489 Net debt 33% 8 Total Senior Debt 1,768 798 777 Convertible 2009 2) 98 92 92 Convertible 2010 2) 186 170 164 2,052 1,060 1,033 570 611 360 471 371 Total Debt Cash Net Debt 489 212 52 62 206 46 422 *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 23, 2013 4) Incl. Swiss facilities of 156 Mio. EUR which are automatically renewed on a yearly basis 2013 98 4) 299 42 71 179 62 ABS 98 261 11 71 216 160 104 186 2015 Syndicated loan Left side: committed facilities 17 8 19 2014 Bilaterals 67 360 268 186 136 136 2016 Promissory notes Right side: drawn amounts 210 112 Thereafter Convertibles
02 • Balance sheet remains strong • • • Equity ratio still solid at 39% Gearing at a low level of 33% Financing position is very robust • • • • • • Solid financing and balance sheet structure support strategy “Klöckner & Co 2020“ Diversified finance structure with 10 different finance instruments Balanced maturity profile with average maturity of 3 years Access to facilities of around €2.1bn in total €570m cash European ABS and Syndicated Loan each amounting to €360m prolonged until May 2016 Targets for 2013 • • Free cash flow positive Reducing NWC and net debt 18
Agenda 01 Highlights and update on strategy 02 Financials Q2 2013 03 Outlook 04 Appendix 19
03 Demand expectations for H2 As the seasonal summer slowdown approaches, markets in Europe and North America will remain quiet with prices tending overall upwards in Q3 • Europe • • US • • Brazil • • China • • Construction in Germany and Switzerland slightly better, France and UK stable on low level, Spain weak Auto is expected to be low throughout 2013, especially in France Slightly improving demand for machinery & mechanical engineering in Germany Auto, HVAC, barge and shipbuilding, storage tanks better non-res construction, mining, yellow goods, machinery weaker Further increasing demand for agricultural equipment, trucks and in energy sector Weaker demand for mining and sugar mills Healthy demand for steel structures and port equipment for export Basically all other sectors are not doing well, particularly mechanical engineering and construction equipment, which is heavily oversupplied 20
03 • Outlook Q3 2013 • Turnover and sales to be seasonally lower but less pronounced because of improving outlook in the US • EBITDA guidance of €30-40m driven by increasing prices and further restructuring effects kicking in • FY 2013 • • • • Turnover and sales expected to come in below prior year`s level mainly due to weaker H1 Operating EBITDA target at last year`s level of €140m before restructuring costs Free cash flow expected to be positive Net debt again to be reduced yoy despite restructuring cash-outs 21
Agenda 01 Highlights and update on strategy 02 Financials Q2 2013 03 Outlook 04 Appendix 22
04 Quarterly results and FY results 2008-2013 (€m) Q2 2013 Q1 2013 Q4 2012* Q3 2012* Q2 2012* Q1 2012* Q4 2011 Turnover (Tto) 1,690 1,646 1,585 1,764 1,863 1,857 1,636 1,765 1,763 7,068 6,661 5,314 4,119 5,974 Sales 1,698 1,625 1,633 1,847 1,964 1,945 1,739 1,885 1,885 7,388 7,095 5,198 3,860 6,750 Gross profit 305 303 298 306 340 344 307 318 337 1,288 1,315 1,136 645 1,366 % margin 18.0 18.6 18.3 16.6 17.3 17.7 17.6 16.8 17.9 17.4 18.5 21.9 16.7 20.2 EBITDA rep. 43 29 -35 18 33 44 14 37 62 60 217 238 -68 601 % margin 2.5 1.8 -2.1 1.0 1.7 2.3 0.8 1.9 3.3 0.8 3.1 4.6 -1.8 8.9 EBIT 17 2 -89 -9 -24 18 -18 8 36 -105 111 152 -178 533 -19 -19 -14 -22 -18 -25 -21 -22 -21 -80 -84 -67 -62 -70 Income before taxes -2 -16 -103 -31 -42 -8 -39 -15 15 -185 27 84 -240 463 Income taxes -2 1 -19 3 3 -4 12 3 -9 -18 -17 -4 54 -79 Net income -4 -16 -123 -29 -39 -12 -27 -12 5 -203 10 80 -186 384 0 0 -1 -1 0 1 -1 -1 0 -3 -1 3 3 -14 -4 -16 -122 -28 -39 -11 -27 -11 5 -200 12 78 -188 398 EPS basic (€) -0.04 -0.16 -1.22 -0.28 -0.39 -0.11 -0.27 -0.11 0.07 -2.00 0.14 1.17 -3.61 8.56 EPS diluted (€) -0.04 -0.16 -1.22 -0.28 -0.39 -0.11 -0.27 -0.11 0.07 -2.00 0.14 1.17 -3.61 8.11 Financial result Minority interests Net income KlöCo *) Restated due to initial application of IAS19 revised 2011. 23 Q3 2011 Q2 2011 FY 2012* FY 2011 FY 2010 FY 2009 FY 2008
04 Balance sheet as of June 30, 2013 (€m) June 30, 2013 December 31, 2012* Comments Non-current assets 1,069 1,107 Inventories 1,198 1,254 Trade receivables 960 787 • Cash & Cash equivalents 570 610 Financial debt: Other assets 100 122 Total assets 3,897 3,880 Equity 1,514 1,502 Total non-current liabilities 1,251 1,384 825 914 Total current liabilities 1,132 994 thereof trade payables 702 634 Total equity and liabilities 3,897 3,880 Net working capital 1,456 1,407 489 422 thereof financial liabilities Net financial debt *) Restated due to initial application of IAS19 revised 2011. 24 Shareholders’ equity: • • Remains stable at 38.9% Gearing at 33% Gross debt of €1.1bn and cash position of €0.6bn result in a net debt position of €489m
04 Profit & loss Q2 2013 (€m) Q2 2013 Q2 2012* 1,698 1,964 305 340 Personnel costs -142 -163 Other operating expenses (net) -120 -144 43 33 -26 -57 17 -24 -19 -18 EBT -2 -42 Taxes -2 3 Net income -4 -39 0 0 -4 -39 Sales Gross profit EBITDA Depreciation & Amortization EBIT Financial result Minorities Net income attributable to KCO shareholders *) Restated due to initial application of IAS19 revised 2011. 25
04 Segment performance Q2 2013 (€m) Europe Americas HQ/Consol. Total Q2 2013 941 749 1,690 Q2 2012 1,097 766 1,863 -14.3 -2.1 -9.3 Q2 2013 1,061 637 0 1,698 Q2 2012 1,237 727 0 1,964 -14.2 -12.3 Q2 2013 28 20 % margin 2.6 3.2 Q2 2012* 18 22 %margin 1.4 3.0 1.7 Δ % EBITDA 54.2 -6.6 31.7 Turnover (Tto) Δ% Sales Δ% -13.5 EBITDA -5 43 2.5 -7 33 * Restated due to initial application of IAS19 revised 2011. 26
04 Sales split by market, product and industry Sales by markets China Brazil <1% 1% Netherlands Spain 3% 3% UK 6% Switzerland 38% 13% Germany/EEC USA 10% France/Belgium 25% Sales by industry Miscellaneous Household appliances/ Consumer goods 10% 11% Tubes 7% Quality steel/Stainless steel 8% Flat products 7% Aluminium 46% 21% Long products 27 26% Machinery and mechanical engineering 10% Local dealers Others Construction industry 6% Automotive industry Sales by product 36% 12%
04 Current shareholder structure Comments Geographical breakdown of identified institutional investors US Germany • 42% 24% • UK 9% France 8% • Switzerland 6% • Other EU 4% Other World 7% As of July 2013. 28 Identified institutional investors account for 51% German investors incl. retail dominate Top 10 shareholdings represent around 25% Retail shareholders represent 30%
04 Appendix Financial calendar 2013/2014 August 7, 2013 Q2 interim report 2013 November 6, 2013 Q3 interim report 2013 March 5, 2014 Annual Financial Statements 2013 May 7, 2014 Q1 interim report 2014 June 6, 2014 Annual General Meeting 2014, Düsseldorf August 6, 2014 Q2 interim report 2014 November 5, 2014 Q3 interim report 2014 Contact details Investor Relations Christian Pokropp, Head of Investor Relations & Corporate Communications Phone: +49 203 307 2050 Fax: +49 203 307 5025 E-mail: christian.pokropp@kloeckner.com Internet: www.kloeckner.com 29
Our Symbol the ears attentive to customer needs the eyes looking forward to new developments the nose sniffing out opportunities to improve performance the legs always moving fast to keep up with the demands of the customers the ball symbolic of our role to fetch and carry for our customers

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Klöckner & Co - UBS Best of Germany Conference, September 17, 2013

  • 1.
    Klöckner & CoSE A Leading Multi Metal Distributor Gisbert Rühl CEO UBS Best of Germany Conference New York September 17, 2013
  • 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.
    Agenda 01 Highlights and updateon strategy 02 Financials Q2 2013 03 Outlook 04 Appendix 3
  • 4.
    01 Negative market impactincreasingly compensated by far advanced restructuring measures EBITDA-margin improved, net loss reduced • • Market especially in Europe (-7,4% yoy)* but also in the US (-2.5% yoy)** in Q2 further under pressure Turnover of Klöckner & Co declined by 9.3% yoy also due to closure and divestment of sites and exit of low margin business (-5.0%p) • Sales -13.5% yoy additionally burdened by lower price level Gross profit of €305m under proportionally by 11.4% below prior year, gross margin improved from 17.5% to 18.0% • • Q2-EBITDA of €43m met guidance of €35-45m also w/o incl. €7m from the release of pension accruals • • Operating EBITDA of between €30m-€40m expected for Q3 2013 Restructuring measures far advanced: 60 out of 70 sites closed and 1.800 out of more than 2.000 HC reduced; extended measures to be implemented by the end of 2013, EBITDA contribution of €17m in Q2 and €29m in H1 realized Full year operating EBITDA target at last year`s level of €140m (before restructuring) despite weaker H1 2013. Restructuring costs of €18m (w/o compensating effects) expected against €77m in 2012. * Source: Eurometal; turnover of distribution in Q2 in Europe yoy. ** Source: MSCI; turnover of distribution/ SSC in Q2 in the US yoy. 4
  • 5.
    Against the backgroundof continuing muted outlook for the European steel market we further extended our comprehensive restructuring program (KCO 6.0) in May 01 Measures • • • • • • • Program extension in France Realization of further synergy potential in the US Reduction of overall > 2,000 employees (= 17%) and ~70 sites Total cost reduction increased to €190m Total annual EBITDA-impact increased to ~€160m (before: €150m) Reduction of NWC by >€170m Additional cost of approximately €18m mainly offset by NWC release €51m 2011-2012 2013 €29m €65m €45m 2014 already realized 5 Total annual EBITDA-impact of ~€160m
  • 6.
    01 Restructuring far advanced Employees Comments 11,577-1,200 • UK ESP F • -359 EEC GER Americas Europe 9,995 -23 US ~9,700 BR Holding Q3 2011 F, US Q2 2013 • Q4 2013 Reduced by ~ 1,600, including temps ~1,800 Sites 290 UK ESP Q3 2011 F EEC GER US BR 230 F, US Q2 2013 6 220 Q4 2013 1,800 out of more than 2,000 HC reductions completed 60 out of 70 targeted branches closed or sold since start of program in Q3 2011 Only extended measures concerning France and the US outstanding which are according to plan to be implemented in H2
  • 7.
    01 KCO 6.0 measureshaving strong impact on the P&L KCO 6.0 EBITDA impact Comments • KCO 6.0 EBITDA expenses €17m 50 171) -23 • 20 10 6 44* 43 29 -14 21 33 16 24 • -4 7 EBITDA Q2 2012 Volume Effect Price Effect KCO 6.0 GP effect KCO 6.0 Fix-cost effect OPEX 2) EBITDA Q2 2013 • In Q2 measures contributed an additional €17m to EBITDA against prior year, ytd €29m Cost cuts achieved trough KCO 6.0 amounted to €24m in Q2, ytd €40m Gross profit despite higher margin €-34m due to lower turnover OPEX declined by 9% compared to Q2 2012 Total GP effect: €34m OPEX in €m 1) 294 288 -2.2% Q2 12 3) 280 -2.6% Q3 12 3) Q4 123) 274 -2.3% -1.8% Q1 13 Q2 13 7 Includes one-off gain of €7m due to release of pension accruals. 3) 269 Restructuring costs. 2) -9% Incl. expenses due to initial application of IAS19 revised 2011 and excl. restructuring expenses.
  • 8.
    01 KCO WIN measuresto support “Klöckner & Co 2020“ strategy Growth and optimization External & internal growth • KCO WIN Profitable growth strategy with focus on value added products and services • • • Optimized net working capital Optimized pricing and sales force management Global sourcing to leverage price potential and global material flows Service model • • • Advanced logistics Extended e-commerce solutions Specific value streams for servicing customers Business model innovations • Management & personnel development • Operations Differentiation Enabling activities Controlling & IT systems • • • Opportunities for disruptive innovations through fundamental business model changes Optimized and extended management reviews and development programs Advanced systems for Accounting, Controlling, Audit, Tax & Treasury Extended Corporate IT Advanced global collaboration 8
  • 9.
    Agenda 01 Highlights and updateon strategy 02 Financials Q2 2013 03 Outlook 04 Appendix 9
  • 10.
    02 Financials Q2 2013 Turnover Sales -9.3% €1,964m -13.5% 1,863Tto €1,698m 1,690 Tto Q2 2012 Q2 2013 Q2 2012 Gross profit €344m* €340m** EBITDA -11.4% -10.2% Q2 2012 Q2 2013 €305m €50m* Q2 2013 €33m** Q2 2012 * Excluding restructuring costs but restated for the initial application of IAS19 revised 2011. ** Including restructuring costs and restated for the initial application of IAS19 revised 2011. Restructuring costs 10 -13.5% +31.7% €43m Q2 2013
  • 11.
    02 Financials H1 2013 Turnover Sales €3,909m -10.3% -15.0% 3,720Tto 3,336 Tto H1 2012 €3,322m H1 2013 H1 2012 Gross profit €687m* €683m** EBITDA -11.6% -11.1% €97m* €608m -26.1% €77m** H1 2012 H1 2013 H1 2013 H1 2012 * Excluding restructuring costs but restated for the initial application of IAS19 revised 2011. ** Including restructuring costs and restated for the initial application of IAS19 revised 2011. Restructuring costs 11 -6.5% €72m H1 2013
  • 12.
    02 Turnover and sales Turnover(Tto) & Americas share Sales (€m) & Americas share +30.5% 1,885 1,857 1,863 1,763 1,765 1,764 1,636 39.5 39.5 1,585 40.5 41.1 42.3 42.7 1,646 43.5 1,885 1,945 1,964 1,739 1,847 1,633 44.3 27.6 -9.3% 33.6 34.6 37.1 37.0 37.8 1,625 36.3 1,690 37.4 +4.5% +2.7% • • Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 37.5 -13.5% 32.4 Q2 2011 1,698 Q2 2013 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 • Turnover share of Americas segment continuously increasing from 32% in Q2 2011 to over 44% in Q2 2013 12 Sales -13.5% yoy additionally impacted by lower price level • Turnover down 9.3% yoy due to weak steel markets and restructuring impact of -5.0%p but sequentially up by 2.7% driven by seasonal effects Average price per ton down yoy (Q2 2013: €1,004 vs. Q2 2012: €1,054)
  • 13.
    02 Gross profit andEBITDA Gross profit (€m) / Gross-margin (%) EBITDA (€m) / EBITDA-margin (%) 62 344 344* 47* 50* 337 43* 3.3 37 2.5* 17.9 318 18.5* 307 16.8 Q2 2011 • 17.6 Q3 2011 Q4 2011 306 17.7 18.6 302* 17.5* 303 Q1 2013 2.4* 1.9 305 Q4 2012 29 24* 18.0 Q2 2013 2.5* 1.0 1.3* 21* 1.8 1.3* 18 Q4 2011 Q1 Q2 Q3 Q4 Q1 2012** 2012** 2012** 2012** 2013 16.6 Q1 2012 Q2 2012 Q3 2012 Q2 2011 • Despite further declining prices, gross profit margin improved compared to Q2 2012 (+0.5%p) mainly due to exit of low margin business Q3 2011 Strong cost reduction with positive effect on EBITDA-margin, generating significantly higher EBITDA qoq out of only slightly improved gross profit * Incl. €7m pension release; without release 2.1% EBITDA-margin * Before restructuring costs. ** As restated for the initial application of IAS19 revised 2011. 13 Q2 2013
  • 14.
    02 Key figures bysegment Turnover (Tto) Sales (€m) EBITDA (€m) 50 Europe 1,365 1,251 1,192 1,067 990 1,105 1,097 1,018 1,137 908 930 1,223 1,237 1,149 941 35* 28*** 24 22* 22* 16* -14.3% Turnover (Tto) 698 752 646 12* -14.2% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2011 2011 2012 2012 2012 2012 2013 2013 Americas 1,041 1,017 1,061 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2011 2011 2012 2012 2012 2012 2013 2013 Sales (€m) 766 746 677 716 571 634 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2011 2011 2012** 2012** 2012** 2012** 2013 2013 EBITDA (€m) 722 749 727 602 698 592 608 637 520 29 23 22 15 21 20 16* 13 12 -12.3% -2.1% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2011 2011 2012 2012 2012 2012 2013 2013 14 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2011 2011 2012 2012 2012 2012 2013 2013 * Restructuring costs: Europe: €3m in Q1, €17m in Q2, €-1m in Q3 and €57m in Q4; Q4 2011: €10m; Americas: €1m in Q4. ** As restated for the initial application of IAS19 revised 2011. *** Includes €7m release of pensions. 14 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2011 2011 2012** 2012** 2012** 2012** 2013 2013
  • 15.
    02 Cash flow andnet debt development Cash flow reconciliation in Q2 2013 (€m) 18 Comments • • -29 -9 43 -35 -12 -20 -8 EBITDA Change in Interest Taxes reported NWC Other CF from Capex operating net activities Free CF Development of net financial debt in Q2 2013 (€m) Q1 2013 -482 CF from operating activities Capex (net) -12 -8 Other* Q2 2013 13 -489 * exchange rate effects, interest. 15 NWC reduced qoq due to weak demand Capex (net) of €-8m
  • 16.
    02 Strong balance sheet Assets Equity& liabilities 3,880 1,107 Inventories 1,069 1,254 3,880 1,502 1,514 38.9% 1,384 1,251 994 1,132 FY 2012** Equity 3,897 38.7% Non-current assets 3,897 Q2 2013 1,198 Non-current liabilities Trade receivables 787 960 Other current assets 122 Liquidity 610 100 570 FY 2012** Q2 2013 Current liabilities Comments • • • • Equity ratio still solid at 39% * Gearing = Net debt/Equity attributable to shareholders of Klöckner & Co SE less goodwill from business combinations subsequent to May 23, 2013. Net debt of €489m ** As restated for the initial application of IAS 19 rev. 2011. Gearing* at 33% NWC increased seasonally by €49m to €1,456m 16
  • 17.
    02 Balanced maturity profileJune 2013 Drawn amount €m Facility €m Committed Q2 2013* Q2 2013 FY 2012* Adjusted equity 565 184 98 4 4 9 ABS 570 179 161 Gearing 3) Syndicated Loan 360 161 161 Promissory Note 269 270 348 Maturity profile of committed facilities and drawn amounts (€m) 864 Bilateral Facilities 1) Other Bonds 1,493 489 Net debt 33% 8 Total Senior Debt 1,768 798 777 Convertible 2009 2) 98 92 92 Convertible 2010 2) 186 170 164 2,052 1,060 1,033 570 611 360 471 371 Total Debt Cash Net Debt 489 212 52 62 206 46 422 *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 23, 2013 4) Incl. Swiss facilities of 156 Mio. EUR which are automatically renewed on a yearly basis 2013 98 4) 299 42 71 179 62 ABS 98 261 11 71 216 160 104 186 2015 Syndicated loan Left side: committed facilities 17 8 19 2014 Bilaterals 67 360 268 186 136 136 2016 Promissory notes Right side: drawn amounts 210 112 Thereafter Convertibles
  • 18.
    02 • Balance sheet remainsstrong • • • Equity ratio still solid at 39% Gearing at a low level of 33% Financing position is very robust • • • • • • Solid financing and balance sheet structure support strategy “Klöckner & Co 2020“ Diversified finance structure with 10 different finance instruments Balanced maturity profile with average maturity of 3 years Access to facilities of around €2.1bn in total €570m cash European ABS and Syndicated Loan each amounting to €360m prolonged until May 2016 Targets for 2013 • • Free cash flow positive Reducing NWC and net debt 18
  • 19.
    Agenda 01 Highlights and updateon strategy 02 Financials Q2 2013 03 Outlook 04 Appendix 19
  • 20.
    03 Demand expectations forH2 As the seasonal summer slowdown approaches, markets in Europe and North America will remain quiet with prices tending overall upwards in Q3 • Europe • • US • • Brazil • • China • • Construction in Germany and Switzerland slightly better, France and UK stable on low level, Spain weak Auto is expected to be low throughout 2013, especially in France Slightly improving demand for machinery & mechanical engineering in Germany Auto, HVAC, barge and shipbuilding, storage tanks better non-res construction, mining, yellow goods, machinery weaker Further increasing demand for agricultural equipment, trucks and in energy sector Weaker demand for mining and sugar mills Healthy demand for steel structures and port equipment for export Basically all other sectors are not doing well, particularly mechanical engineering and construction equipment, which is heavily oversupplied 20
  • 21.
    03 • Outlook Q3 2013 • Turnover andsales to be seasonally lower but less pronounced because of improving outlook in the US • EBITDA guidance of €30-40m driven by increasing prices and further restructuring effects kicking in • FY 2013 • • • • Turnover and sales expected to come in below prior year`s level mainly due to weaker H1 Operating EBITDA target at last year`s level of €140m before restructuring costs Free cash flow expected to be positive Net debt again to be reduced yoy despite restructuring cash-outs 21
  • 22.
    Agenda 01 Highlights and updateon strategy 02 Financials Q2 2013 03 Outlook 04 Appendix 22
  • 23.
    04 Quarterly results andFY results 2008-2013 (€m) Q2 2013 Q1 2013 Q4 2012* Q3 2012* Q2 2012* Q1 2012* Q4 2011 Turnover (Tto) 1,690 1,646 1,585 1,764 1,863 1,857 1,636 1,765 1,763 7,068 6,661 5,314 4,119 5,974 Sales 1,698 1,625 1,633 1,847 1,964 1,945 1,739 1,885 1,885 7,388 7,095 5,198 3,860 6,750 Gross profit 305 303 298 306 340 344 307 318 337 1,288 1,315 1,136 645 1,366 % margin 18.0 18.6 18.3 16.6 17.3 17.7 17.6 16.8 17.9 17.4 18.5 21.9 16.7 20.2 EBITDA rep. 43 29 -35 18 33 44 14 37 62 60 217 238 -68 601 % margin 2.5 1.8 -2.1 1.0 1.7 2.3 0.8 1.9 3.3 0.8 3.1 4.6 -1.8 8.9 EBIT 17 2 -89 -9 -24 18 -18 8 36 -105 111 152 -178 533 -19 -19 -14 -22 -18 -25 -21 -22 -21 -80 -84 -67 -62 -70 Income before taxes -2 -16 -103 -31 -42 -8 -39 -15 15 -185 27 84 -240 463 Income taxes -2 1 -19 3 3 -4 12 3 -9 -18 -17 -4 54 -79 Net income -4 -16 -123 -29 -39 -12 -27 -12 5 -203 10 80 -186 384 0 0 -1 -1 0 1 -1 -1 0 -3 -1 3 3 -14 -4 -16 -122 -28 -39 -11 -27 -11 5 -200 12 78 -188 398 EPS basic (€) -0.04 -0.16 -1.22 -0.28 -0.39 -0.11 -0.27 -0.11 0.07 -2.00 0.14 1.17 -3.61 8.56 EPS diluted (€) -0.04 -0.16 -1.22 -0.28 -0.39 -0.11 -0.27 -0.11 0.07 -2.00 0.14 1.17 -3.61 8.11 Financial result Minority interests Net income KlöCo *) Restated due to initial application of IAS19 revised 2011. 23 Q3 2011 Q2 2011 FY 2012* FY 2011 FY 2010 FY 2009 FY 2008
  • 24.
    04 Balance sheet asof June 30, 2013 (€m) June 30, 2013 December 31, 2012* Comments Non-current assets 1,069 1,107 Inventories 1,198 1,254 Trade receivables 960 787 • Cash & Cash equivalents 570 610 Financial debt: Other assets 100 122 Total assets 3,897 3,880 Equity 1,514 1,502 Total non-current liabilities 1,251 1,384 825 914 Total current liabilities 1,132 994 thereof trade payables 702 634 Total equity and liabilities 3,897 3,880 Net working capital 1,456 1,407 489 422 thereof financial liabilities Net financial debt *) Restated due to initial application of IAS19 revised 2011. 24 Shareholders’ equity: • • Remains stable at 38.9% Gearing at 33% Gross debt of €1.1bn and cash position of €0.6bn result in a net debt position of €489m
  • 25.
    04 Profit & lossQ2 2013 (€m) Q2 2013 Q2 2012* 1,698 1,964 305 340 Personnel costs -142 -163 Other operating expenses (net) -120 -144 43 33 -26 -57 17 -24 -19 -18 EBT -2 -42 Taxes -2 3 Net income -4 -39 0 0 -4 -39 Sales Gross profit EBITDA Depreciation & Amortization EBIT Financial result Minorities Net income attributable to KCO shareholders *) Restated due to initial application of IAS19 revised 2011. 25
  • 26.
    04 Segment performance Q22013 (€m) Europe Americas HQ/Consol. Total Q2 2013 941 749 1,690 Q2 2012 1,097 766 1,863 -14.3 -2.1 -9.3 Q2 2013 1,061 637 0 1,698 Q2 2012 1,237 727 0 1,964 -14.2 -12.3 Q2 2013 28 20 % margin 2.6 3.2 Q2 2012* 18 22 %margin 1.4 3.0 1.7 Δ % EBITDA 54.2 -6.6 31.7 Turnover (Tto) Δ% Sales Δ% -13.5 EBITDA -5 43 2.5 -7 33 * Restated due to initial application of IAS19 revised 2011. 26
  • 27.
    04 Sales split bymarket, product and industry Sales by markets China Brazil <1% 1% Netherlands Spain 3% 3% UK 6% Switzerland 38% 13% Germany/EEC USA 10% France/Belgium 25% Sales by industry Miscellaneous Household appliances/ Consumer goods 10% 11% Tubes 7% Quality steel/Stainless steel 8% Flat products 7% Aluminium 46% 21% Long products 27 26% Machinery and mechanical engineering 10% Local dealers Others Construction industry 6% Automotive industry Sales by product 36% 12%
  • 28.
    04 Current shareholder structure Comments Geographicalbreakdown of identified institutional investors US Germany • 42% 24% • UK 9% France 8% • Switzerland 6% • Other EU 4% Other World 7% As of July 2013. 28 Identified institutional investors account for 51% German investors incl. retail dominate Top 10 shareholdings represent around 25% Retail shareholders represent 30%
  • 29.
    04 Appendix Financial calendar 2013/2014 August7, 2013 Q2 interim report 2013 November 6, 2013 Q3 interim report 2013 March 5, 2014 Annual Financial Statements 2013 May 7, 2014 Q1 interim report 2014 June 6, 2014 Annual General Meeting 2014, Düsseldorf August 6, 2014 Q2 interim report 2014 November 5, 2014 Q3 interim report 2014 Contact details Investor Relations Christian Pokropp, Head of Investor Relations & Corporate Communications Phone: +49 203 307 2050 Fax: +49 203 307 5025 E-mail: christian.pokropp@kloeckner.com Internet: www.kloeckner.com 29
  • 30.
    Our Symbol the ears attentiveto customer needs the eyes looking forward to new developments the nose sniffing out opportunities to improve performance the legs always moving fast to keep up with the demands of the customers the ball symbolic of our role to fetch and carry for our customers