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Q1 2017 Results
Analysts’ and Investors’ Conference
April 26, 2017
Gisbert Rühl | CEO
Marcus A. Ketter | CFO
Karsten Lork ...
No.2
Disclaimer
This presentation contains forward-looking statements which reflect the current views of the management of...
No.3
1. Highlights and update on strategy
2. Financials
3. Outlook
4. Appendix
Agenda
Q1 2017 Results | Analysts’ and Inve...
No.4
Highlights Q1 201701
• Sales increased significantly by 15.6% yoy to €1.6bn mainly due to higher price level
• Shipme...
No.5
Significant increase of EBITDA in Q1 201701
EBITDA impact: Q1 yoy Comments
77
53
16
Other
effects
-6
One Europe
/ WIN...
No.6
01
Q1 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
• Becker Aluminum Service Center
to cover...
No.7
1. Highlights and update on strategy
2. Financials
3. Outlook
4. Appendix
Agenda
Q1 2017 Results | Analysts’ and Inve...
No.8
Shipments and sales02
• Shipments slightly increased yoy despite sale of
Spanish business
• Qoq seasonal increase
• S...
No.9
Gross profit and EBITDA02
* Before restructuring cost.
7172
11
30
10
Q1
2015
36
Q1
2017
Q2
2015
Q3
2015
16
Q4
2015
Q1...
No.10
Segment performance Q1 201702
• Europe
• EBITDA up from €11m to €54m
• Volume effect €5m
• Continued positive price ...
No.11
Cash flow and net debt development02
36
• NWC build-up of €181m due to seasonally
increased business and higher stoc...
No.12
Maturity profile – Syndicated Loan successfully extended until May 202002
Q1 2017 Results | Analysts’ and Investors’...
No.13
1. Highlights and update on strategy
2. Financials
3. Outlook
4. Appendix
Agenda
Q1 2017 Results | Analysts’ and Inv...
No.14
Shipbuilding
Segment specific business outlook 201703
Energy
industry
Real steel
demand
Europe
~ 1-2%
Construction
i...
No.15
• Announced investments in infrastructure and
military
• Lower unemployment rate and tax reduction
lead to higher pr...
No.16
Outlook03
Q2 2017
• Seasonally higher sales
• EBITDA anticipated to be between €60m and €70m
FY 2017
• Higher sales ...
No.17
1. Highlights and update on strategy
2. Financials
3. Outlook
4. Appendix
Agenda
Q1 2017 Results | Analysts’ and Inv...
No.18
Quarterly and FY results04
(€m)
Q1
2017
Q4
2016
Q3
2016
Q2
2016
Q1
2016
Q4
2015
Q3
2015
Q2
2015
Q1
2015
Q4
2014*
Q3
...
No.19
Segment performance04
926
Q4
2016
867
Q3
2016
873
Q1
2016
950
Q2
2016
903
Q4
2015
891
Q3
2015
931
Q2
2015
970
Q1
201...
No.20
Strong balance sheet04
• Equity ratio further healthy at 38%
• Net debt of €475m
• Gearing* at 41%
• NWC increased f...
No.21
Sales by markets, products and industries04
As of December 31, 2016.
Sales by markets Sales by industry
Sales by pro...
No.22
Current shareholder structure04
Geographical breakdown of identified
institutional investors
• Identified institutio...
Financial calendar
Christina Kolbeck
Head of Investor Relations & Sustainability
Phone: +49 203 307 2122
Fax: +49 203 307 ...
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Klöckner & Co SE - Q1 2017 Results - Analysts' and Investors' Conference

  1. 1. Q1 2017 Results Analysts’ and Investors’ Conference April 26, 2017 Gisbert Rühl | CEO Marcus A. Ketter | CFO Karsten Lork | Member of the Management Board Bill Partalis | Member of the Management Board
  2. 2. No.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”, “endeavor”, “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. Q1 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  3. 3. No.3 1. Highlights and update on strategy 2. Financials 3. Outlook 4. Appendix Agenda Q1 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  4. 4. No.4 Highlights Q1 201701 • Sales increased significantly by 15.6% yoy to €1.6bn mainly due to higher price level • Shipments with 1.6m to (+1.7 %) slightly above prior year´s level despite sale of Spanish activities end of January • Gross profit went up from €304m in Q1 2016 to €367m supported by increasing prices • Consequently gross profit margin increased to 22.9% after 22.0% in Q1 2016 • Operating result (EBITDA) of €77m more than quadrupled and slightly above guidance range of €65m to €75m • Sales share via digital channels continuously increased from 9% in Q1 2016 to 14% in Q1 2017 • Investment in technology startup BigRep – designer of the world’s largest 3D printer for series production • Maturity profile further improved by extension of syndicated loan facility • EBITDA in Q2 2017 to between €60m and €70m • EBITDA for FY 2017 expected to increase noticeably Q1 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  5. 5. No.5 Significant increase of EBITDA in Q1 201701 EBITDA impact: Q1 yoy Comments 77 53 16 Other effects -6 One Europe / WIN+ Opex 6 3 Q1 2016 5 Volume Effect Q1 2017 Q1 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE Price Effect Steel price development HRC • We benefit more strongly than in the past from rising market prices due to • Increasing use of digital pricing tools • Extension of share of value added products and services • Change of customer mix by exiting of trader to trader business in Germany and discontinuing low margin big account business in France
  6. 6. No.6 01 Q1 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE • Becker Aluminum Service Center to cover increasing automotive customer demand for light weight • Slitting line put into operation with expected sales launch in May • Completion of the entire plant including a complementary cut-to-length line with total capacity of 80Tto scheduled for 2018 • 3D Laser number 7 initiated in Dudley/ UK, which is meanwhile 2nd largest 3D laser center in UK • One Europe Organization set into place • Additional synergies especially in procurement and logistics • Centrally steered implementation of digitalization and higher value-add strategy • Already €3m EBITDA impact in Q1 • Incremental EBITDA contribution of €10m in 2017 and €30m until 2019 • Sales share via digital channels increased from 12% in Q4 2016 to 14% in Q1 2017 • Integration of first complementary distributors to industry platform planned for the current quarter • Various pilot projects with producers regarding a coordinated approach concerning platform-integration in the US and Europe underway • Investment in 3D printer BigRep • designs the world’s largest 3D printer for modeling & prototyping – in the future for series production • KCO plans to use this 3D printers in its European and US site network going forward supporting KCO 2020 strategy • Market segment has promising outlook with 20% annual growth rate Digitalization Higher value-add One Europe Further progress of “Klöckner & Co 2020“ strategy
  7. 7. No.7 1. Highlights and update on strategy 2. Financials 3. Outlook 4. Appendix Agenda Q1 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  8. 8. No.8 Shipments and sales02 • Shipments slightly increased yoy despite sale of Spanish business • Qoq seasonal increase • Sales increased yoy and qoq signifcantly more pronounced than shipments due to higher average sales prices 1,450 Q3 2016 1,500 Q2 2016 1,643 Q1 2016 1,556 Q4 2015 1,582 Q4 2016 1,535 Q3 2015 Q1 2017 Q2 2015 1,645 Q1 2015 1,661 1,636 Q1 2017 Q4 2016 1,397 Q3 2016 1,430 Q2 2016 1,517 1,602 1,386 Q4 2015 1,456 Q3 2015 Q1 2016 Q2 2015 1,693 Q1 2015 1,697 1,597 +1.7% +9.1% +15.6% +14.6% Shipments (Tto) Sales (€m) Q1 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  9. 9. No.9 Gross profit and EBITDA02 * Before restructuring cost. 7172 11 30 10 Q1 2015 36 Q1 2017 Q2 2015 Q3 2015 16 Q4 2015 Q1 2016 Q2 2016 Q3 2016 37 77 Q4 2016 2.1 0.6 0.7 1.9 4.8 1.2 2.6 5.0 4.8 Q3 2016 319 Q4 2016 367 Q1 2017 329 310 325 Q1 2015 Q2 2015 362 Q1 2016 311 Q2 2016 304 Q4 2015 Q3 2015 297 19.2 18.2 22.0 20.4 19.4 22.823.0 23.8 22.9 • Margin stable with ~ 23%, 0.9%p above Q1 2016 • Gross profit substantially improved yoy • EBITDA in Q1 improved yoy by €61m, qoq EBITDA up by €40m driven by better price environment • EBITDA margin in Q1 up by 3.6%p yoy to 4.8% Gross profit* (€m) / Gross margin* (%) EBITDA* (€m) / EBITDA margin* (%) Q1 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  10. 10. No.10 Segment performance Q1 201702 • Europe • EBITDA up from €11m to €54m • Volume effect €5m • Continued positive price effect (€35m) • KCO WIN+ and One Europe contribute €6m to EBITDA improvement Europe (€m) Americas (€m) 11 1 EBITDA Q1 2017 30 OPEX 0 KCO WIN+ effect 0 Price Effect 18 Volume Effect 0 EBITDA Q1 2016 F/X 11 5 6 54 EBITDA Q1 2016 35 Price Effect Volume Effect -3 EBITDA Q1 2017 OPEXKCO WIN+ effect/ One Europe 0 F/X • Americas • EBITDA up from €11m to €30m • Marginal volume effect • Positive price effect of €18m Comments Q1 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  11. 11. No.11 Cash flow and net debt development02 36 • NWC build-up of €181m due to seasonally increased business and higher stock value • “Other” includes changes in other provisions and other operating assets/liabilities (mainly cash-in from vendor bonuses as well as non-cash items) • Net capex positive due to disposal proceeds from the sale of Spain business CommentsCash flow reconciliation 3M 2017 (€m) • Net financial debt increased due to NWC build-up partly compensated by disposal proceeds Net financial debt 03/2017 vs. 12/2016 (€m) -39 -78 77 Other 35 Taxes -4 Interest -5 Change in NWC -181 EBITDA 3M 2017 Free cash flow 3M 2017 Capex (net) 39 Cash flow from operating activities 39 Net debt 03.2017 475 Other 0 F/X, Swaps 8 Capex (net) CF from operating activities -78 Net debt 12.2016 444 Q1 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  12. 12. No.12 Maturity profile – Syndicated Loan successfully extended until May 202002 Q1 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE Facility Committed (€m) Drawn amount (€m, IFRS*) Q1 2017 FY 2016 Syndicated Loan1) 300 0 0 ABS Europe 300 145 115 ABS/ABL USA 514 210 218 Convertible 2016 2) 148 131 131 Bilateral Facilities 3) 319 152 114 Total Debt 1,581 638 578 Cash 163 134 Net Debt 475 444 €m Q1 2017 Adjusted equity 1,155 Net debt 475 Gearing 4) 41% Maturity profile of committed facilities & drawn amounts (€m) Left side: committed facilities Right side: utilization (nominal amounts) ABS/ABL USA BilateralsSyndicated Loan 1) ABS Europe *Including interest accrued, excluding deferred transaction costs 1) Extended until May 2020, reduction of total commitments from €360m to €300m and ‘Minimum Equity’ covenant from €800m to €600m in April 2017. 2) Principal €148m, equity component €18m at issuance (08.09.2016). 3) Including finance lease. 4) Net debt/Equity attributable to shareholders of Klöckner & Co SE less goodwill from business combinations subsequent to 23.05.2013. 148 514 3030 61919 81 248 1 1 15 15 663 359 210 148 306 300 6 160 145 315 300 2017 2018 2019 2020 2021 Thereafter Convertible Bond Syndicated Loan: Extension executed in April 2017
  13. 13. No.13 1. Highlights and update on strategy 2. Financials 3. Outlook 4. Appendix Agenda Q1 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  14. 14. No.14 Shipbuilding Segment specific business outlook 201703 Energy industry Real steel demand Europe ~ 1-2% Construction industry Manufacturing, machinery and mechanical engineering, etc. Automotive industry US ~ 3-4% Q1 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  15. 15. No.15 • Announced investments in infrastructure and military • Lower unemployment rate and tax reduction lead to higher private consumption and to an increasing GDP • Consulting team of administration with steel background • Positive atmosphere and high investment propensity in the US economy Impact of new administration on our US business03 Q1 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE Positive impact on steel demand locallocal From USA ~ 93% Imports ~ 7%* We buy and sell local – and are seen as a US company • Anti dumping measures forced but no impact on KCO due to local sourcing and selling • Planned import stop will • strengthen the local steel companies as we are seen in the US • cause steel prices to increase within the US *KCO, Jan- Mar 2017.
  16. 16. No.16 Outlook03 Q2 2017 • Seasonally higher sales • EBITDA anticipated to be between €60m and €70m FY 2017 • Higher sales anticipated due to better demand and on average higher price level • EBITDA expected to rise noticeably compared to the 2016 figure of €196m Q1 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  17. 17. No.17 1. Highlights and update on strategy 2. Financials 3. Outlook 4. Appendix Agenda Q1 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  18. 18. No.18 Quarterly and FY results04 (€m) Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014* Q3 2014* FY 2016 FY 2015 FY 2014 FY 2013 Shipments (Tto) 1,582 1,450 1,500 1,643 1,556 1,535 1,636 1,645 1,661 1,555 1,690 6,149 6,476 6,598 6,445 Sales 1,602 1,397 1,430 1,517 1,386 1,456 1,597 1,693 1,697 1,577 1,675 5,730 6,444 6,504 6,378 Gross profit 367 319 329 362 304 297 311 320 310 309 325 1,315 1,237 1,261 1,188 % margin 22.9 22.8 23.0 23.8 22.0 20.4 19.4 18.9 18.2 19.6 19.4 22.9 19.2 19.4 18.6 EBITDA rep. 77 37 71 72 16 2 28 -17 10 33 61 196 24 191 124 % margin 4.8 2.6 5.0 4.8 1.2 0.2 1.8 -1.0 0.6 2.1 3.6 3.4 0.4 2.9 2.0 EBIT 54 -4 48 49 -8 -297 5 -44 -15 8 38 85 -350 98 -6 Financial result -8 -10 -8 -7 -8 -12 -12 -13 -12 -13 -14 -33 -49 -59 -73 Income before taxes 46 -14 40 42 -16 -309 -7 -56 -27 -4 24 52 -399 39 -79 Income taxes -10 2 -9 -9 2 45 -2 1 6 1 -8 -14 50 -17 -12 Net income 36 -12 31 33 -14 -263 -9 -55 -22 -4 16 38 -349 22 -90 Minority interests 0 0 0 1 0 -1 0 -1 0 -1 0 -1 -2 0 -6 Net income KlöCo 36 -12 31 32 -14 -263 -9 -54 -21 -4 16 37 -347 22 -85 EPS basic (€) 0.36 -0.13 0.31 0.32 -0.14 -2.63 -0.09 -0.54 -0.22 -0.04 0.16 0.37 -3.48 0.22 -0.85 EPS diluted (€) 0.34 -0.13 0.31 0.32 -0.14 -2.63 -0.09 -0.54 -0.22 -0.04 0.16 0.37 -3.48 0.22 -0.85 * Restated due to initial application of IFRIC 21. Q1 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  19. 19. No.19 Segment performance04 926 Q4 2016 867 Q3 2016 873 Q1 2016 950 Q2 2016 903 Q4 2015 891 Q3 2015 931 Q2 2015 970 Q1 2015 979 Q1 2017 985 Q1 2017 Q4 2016 883 Q3 2016 891 Q2 2016 963 Q1 2016 870 Q4 2015 919 Q3 2015 986 Q2 2015 1,054 Q1 2015 1,025 49 1112 21 29 Q3 2015 Q2 2015 Q1 2015 7 36 Q3 2016 55 Q2 2016 Q1 2016 Q4 2015 Q1 2017 54 Q4 2016 627 Q2 2016 693 Q1 2016 652 Q4 2015 644 Q3 2015 Q1 2017 657 Q4 2016 583 Q3 2016 705 Q2 2015 675 Q1 2015 682 Q2 2016 554 Q1 2016 516 Q4 2015 537 Q4 2016 515 Q3 2016 539 617 Q1 2017 672 Q1 2015 639 Q2 2015 611 Q3 2015 3030 Q1 2015 7 Q1 2016 11 Q4 2015 3 Q3 2015 14 Q2 2015 13 22 11 Q2 2016 Q1 2017 Q4 2016 Q3 2016 +2.4% +0.7% +13.3% +19.5% EuropeAmericas Restructuring costs (€m)* Q2 2015 Q3 2015 Q4 2015 Europe 52 2 2 Americas 2 Shipments (Tto) Sales (€m) EBITDA before restructuring (€m) Shipments (Tto) Sales (€m) EBITDA before restructuring (€m) * €4m are reported in HQ in Q4 2015. Q1 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  20. 20. No.20 Strong balance sheet04 • Equity ratio further healthy at 38% • Net debt of €475m • Gearing* at 41% • NWC increased from €1,120m to €1,296m * Gearing = Net debt/Equity attributable to shareholders of Klöckner & Co SE less goodwill from business combinations subsequent to May 23, 2013. Comments Assets Equity & liabilities 39% 39% 654 851 134 95206 897 888 2,897 Dec 31, 2016 1,135 1,006 Non-current assets Mar 31, 2017 163 3,132 Trade receivables Liquidity Inventories Other current assets 279 540 571 Equity 1,148 Financial liabilities Pensions Trade payables Other liabilities 1,183 Dec 31, 2016 359 2,897 Mar 31, 2017 3,132 632 349 690 278 40% 38% Q1 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  21. 21. No.21 Sales by markets, products and industries04 As of December 31, 2016. Sales by markets Sales by industry Sales by product 5% UK 10% France/ Belgium 16% Switzerland 27% Germany 37% USA 3% Netherlands 2% Spain 5% Tubes 8% Aluminum 9% Quality steel/ Stainless steel 22% Long products 44% Flat products 12% Others 12% Automotive industry 7% Miscellaneous6% Local dealers 31% Machinery/mechanical engineering 37% Construction industry 7% Household appl./ Consumer goods Q1 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  22. 22. No.22 Current shareholder structure04 Geographical breakdown of identified institutional investors • Identified institutional investors account for 78% • German investors incl. retail dominate • Top 10 shareholdings represent around 52% • Retail shareholders represent 17% Comments As of February 2017. 6% Rest of EU 36% US 3% Rest of world 2% Switzerland 5% UK 48% Germany Q1 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  23. 23. Financial calendar Christina Kolbeck Head of Investor Relations & Sustainability Phone: +49 203 307 2122 Fax: +49 203 307 5025 Email: christina.kolbeck@kloeckner.com Internet: www.kloeckner.com May 12, 2017 Annual General Meeting 2017, Düsseldorf July 26, 2017 Q2 interim report 2017 October 25, 2017 Q3 interim statement 2017 Contact details

Klöckner & Co SE - Q1 2017 Results - Analysts' and Investors' Conference

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