Klöckner & Co - Roadshow Presentation November 2012

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Transcript of Klöckner & Co - Roadshow Presentation November 2012

  • 1. Klckner & Co SE A Leading Multi Metal Distributor Klckner & Co SE CEO/CFO Gisbert Rhl November 2012

2. Disclaimer This presentation contains forward-looking statements which reflect the current views of the management of Klckner & 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 Klckner & 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 Klckner & Co SE can deviate significantly from those that are expressed or implied in these statements. Klckner & Co SE cannot give any guarantee that the expectations or goals will be attained. Klckner & 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, Klckner & 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. Overview Q3 and update on strategy01 Financials Q3 2012 Outlook Appendix 02 03 04 Agenda 3 4. Overview Q3 and ytd 2012 Strong organic turnover growth in the US compensated turnover decline in Europe resulting in flat Groups turnover in Q3 yoy; seasonal decline Q3 vs. Q2 (-5.3%) European turnover in Q3 down -4.6% yoy better than market (-9%) despite closures and exiting low margin business, ytd -5.9% vs. market of -9% Turnover growth in Q3 in US +9.4% vs. market -1.9% yoy, ytd +6.7% (w/o acquisition) vs. market of +3.3% Sales in Q3 -2.0% yoy at 1,847m, ytd +7.4% EBITDA in Q3 at 19m below guidance of 25-35m given further price pressure in September and missing recovery after summer, ytd 117m before restructuring costs Free CF in Q3 slightly positive (+2m) EBITDA contribution of restructuring program 12m in Q3 or 37m since program start Scope of restructuring measures with reduction of about 60 sites and more than 1,800 headcounts to be significantly expanded to an annual EBITDA-impact of ~150m with big swing in 2013 and fully effective from 2014 on 4 01 5. Continued price erosion weighed steadily on margins 5 01 Source: Steel Business Briefing, Eurometal, MSCI, Worldsteel, own estimates HRC/To indexed vs. Gross-margin Europe in North America in USD China in Renminbi Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 21.0 20.6 22.3 17.9 16.8 17.6 17.7 17.3 16.6 Europe 8% decline of steel distributions turnover expected in 2012 Drain on margins in connection with declining prices due to widening oversupply US 3-4% growth of steel distribution turnover expected in 2012 Nevertheless, overcapacities and import pressure being reflected in the margins Steel prices: 50 60 70 80 90 100 110 120 130 140 150 160 6. Against the background of the current market situation todays focus is on business optimization and organic growth 6 01 Business optimization Organic growth strategy Currentfocus External growth strategy Full implementation of significantly extended restructuring program Reduction of ~60 sites Workforce reduction of >1,800 Increasing share of value added services and higher margin products around core business Increasing share of value added services and higher margin products around core business Realizing synergies especially in purchasing 7. Total impact of ~150m annual EBITDA-contribution targeted from 2014 on 7 01 Workforce reduction of >1,800 Reduction of ~60 sites Disposal of ~500m sales in low margin business 50/50 impact on personnel costs and Opex Reducing NWC by 140m Incremental one-off costs of ~60m will be booked by at least 2/3 in Q4 and financed by release of NWC 800 employees reduced 20 sites reduced ~25m sales reduced 70m NWC release 37m EBITDA impact realized since program start; 12m in Q3 Program measures Achieved by end of September Annual incremental EBITDA-impact 2013 2014 50m37m already realized 60m 40m Total annual EBITDA-impact of ~150m 2011-2012 8. Sites with poor contribution margins even in better market conditions will be closed more attractive business handed over to adjacent sites 8 01 Sites with poor contribution margins before full allocation of central overheads even in better market conditions are earmarked for permanent closures Typically, we keep the local sales force for the more attractive business and supply our customers from adjacent sites Experience shows that between 1/2 and 2/3 of sales can be maintained The expanded restructuring program will result in a reduction of about 60 sites following this approach of which 20 have been cut already Closure of sites predominantly financed by release of NWC Selective approach results in significant profit improvement with limited loss in market share Site2 Site1 Site3 Site4 9. Optimizing and gradual expansion of core business towards higher and more stable margins 9 01 Optimizing current core business Significant reduction of indirect overheads Improving productivity in warehousing and reduction of logistics costs Selective closure of sites with negative contribution margins Main target is to improve efficiency and reduce costs Selective expansion of value added services Mainly targeting existing accounts with known demand Low risk investments in new equipment with known technologies (plate burning, sawing, painting, etc.) Main target is to increase margins and reduce volatility Selective expansion of product range Expanding product range around core offering by more specialized products (country specific approach depending on experience of sales force) Leverage existing customer base served by existing sales force Main target is to increase share of higher margin products at marginal costs 1 3 2 1 2 3Products Services Current business scope 10. Overview Q3 and update on strategy01 Financials Q3 2012 Outlook Appendix 02 03 04 Agenda 10 11. Financials Q3 201202 EBITDA Sales Gross profit Turnover 1,765 Tto -0.1% Q3 2011 Q3 2012 1,764 Tto 1,885m 1,847m -2.0% Q3 2012Q3 2011 37m -49.0% Q3 2012Q3 2011 19m 318m 306m -3.7% Q3 2012Q3 2011 11 12. Financials 9M 201202 EBITDA Sales Gross profit Turnover 5,026 Tto +9.1% Q1-Q3 2011 Q1-Q3 2012 5,483 Tto 5,357m 5,755m +7.4% Q1-Q3 2012Q1-Q3 2011 203m -42.5% Q1-Q3 2012Q1-Q3 2011 117m* 1,008m 993m* -1.4% Q1-Q3 2012Q1-Q3 2011 12 * Before restructuring costs Restructuring costs 13. EBITDA (m) / EBITDA-margin (%) Gross profit and EBITDA02 Gross profit (m) / Gross-margin (%) Gross profit-margin further eroded due to ongoing price pressure EBITDA of 19m not impacted by restructuring costs which have been postponed to Q4 (France) 13 * Before restructuring costs 61 48 104 62 37 14 45 50* 19 4.3 3.6 6.6 3.3 1.9 0.8 2.3 1.7 1.0 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 294 275 353 337 318 307 344 344* 306 21.0 20.6 22.3 17.9 16.8 17.6 17.7 17.3 16.6 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 14. Segment performance Q3 201202 Turnover (Tto) Sales (m) EBITDA (m) Turnover (Tto) Sales (m) EBITDA (m) EuropeAmericas * Restructuring costs of 3m in Q1 and 17m in Q2 and -1m in Q3 1,0841,029 1,1641,192 1,067 990 1,1051,097 1,018 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 -4.6% 1,1691,104 1,290 1,365 1,251 1,137 1,2231,237 1,149 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 -8.1% 284 289 334 571 698 646 752 766 746 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 +6.8% 232 228 297 520 634 602 722 727 698 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 +10.0% 60 45 81 50 24 12 20* 19* Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 14* 5 7 30 23 15 13 29 21 11 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 14 15. Net income and EPS02 15 Net income (m) 0.21 0.25 0.65 0.07 -0.11 -0.27 -0.10 0.03** -0.27 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 EPS basic ()* * Adjusted for capital increase ** Before restructuring expenses and impairments Net income trails unsatisfying EBITDA 28m D&A include ppa effects of 10m in Q3 Tax benefit of 2.4m less than usual tax rate of 30%+ due to non-recognition of deferred tax assets on operating losses Comments 15 17 44 5 -12 -27 -10 3** -28 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 16. Free cash flow slightly positive in Q302 Cash flow reconciliation in Q3 2012 (m) 16 60,0 EBITDA Change in NWC Taxes Other CF from operating activities Capex Free CF Development of net financial debt in Q3 2012 (m) * exchange