Collective Mining | Corporate Presentation - May 2024
Klöckner & Co - 11th HSBC's Equity Conference Paris 2013
1. Klöckner & Co SE
A Leading Multi Metal Distributor
Klöckner & Co SE
11th HSBC's Equity Conference Paris
CEO
Gisbert Rühl
March 20, 2013
2. Disclaimer
This presentation contains forward-looking statements which reflect the current views of the management of
Klöckner & Co SE with respect to future events. They generally are designated by the words “expect”, “assume”,
“presume”, “intend”, “estimate”, “strive for”, “aim for”, “plan”, “will”, “strive”, “outlook” and comparable expressions and
generally contain information that relates to expectations or goals for economic conditions, sales proceeds or other
yardsticks for the success of the enterprise. Forward-looking statements are based on currently valid plans, estimates
and expectations. You therefore should view them with caution. Such statements are subject to risks and factors of
uncertainty, most of which are difficult to assess and which generally are outside of the control of Klöckner & Co SE. The
relevant factors include the effects of significant strategic and operational initiatives, including the acquisition or
disposition of companies. If these or other risks and factors of uncertainty occur or if the assumptions on which the
statements are based turn out to be incorrect, the actual results of Klöckner & Co SE can deviate significantly from those
that are expressed or implied in these statements. Klöckner & Co SE cannot give any guarantee that the expectations or
goals will be attained. Klöckner & Co SE – notwithstanding existing obligations under laws pertaining to capital markets –
rejects any responsibility for updating the forward-looking statements through taking into consideration new information
or future events or other things.
In addition to the key data prepared in accordance with International Financial Reporting Standards, Klöckner & Co SE is
presenting non-GAAP key data such as EBITDA, EBIT, Net Working Capital and net financial liabilities that are not a
component of the accounting regulations. These key data are to be viewed as supplementary to, but not as a substitute
for data prepared in accordance with International Financial Reporting Standards. Non-GAAP key data are not subject to
IFRS or any other generally applicable accounting regulations. Other companies may base these concepts upon other
definitions.
2
3. Highlights and update on strategy01
Financials Q4/FY 2012
Outlook
Appendix
02
03
04
Agenda
3
4. 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
5. 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
6. 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
7. 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
8. 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
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 update on strategy01
Financials Q4/FY 2012
Outlook
Appendix
02
03
04
Agenda
10
16. 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
17. 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
18. 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
19. 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
20. 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
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 update on strategy01
Financials Q4/FY 2012
Outlook
Appendix
02
03
04
Agenda
22
24. 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
25. 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
26. 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
28. 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
29. 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%
30. 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
31. 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