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Q2 2017 Results
Analysts’ and Investors’ Conference
July 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
Q2 2017 Results | Analysts’ and Inve...
No.4
Highlights Q2 201701
• Sales increased by 8.1% yoy to €1.6bn due to higher price level
• Shipments adjusted for sale ...
No.5
Significant increase of EBITDA in H1 201701
EBITDA impact: Q2 yoy Comments
72
9
63
Q2 2017Other
effects
-1
OpexOne Eu...
No.6
01
Q2 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
• First measures with an EBITDA
contribut...
No.7
1. Highlights and update on strategy
2. Financials
3. Outlook
4. Appendix
Agenda
Q2 2017 Results | Analysts’ and Inve...
No.8
Shipments and sales02
• Shipments decreased yoy mainly due to the sale of
Spanish activities and exit from the pipe b...
No.9
Gross profit and EBITDA02
* Before restructuring cost.
63
7172
11
30
37
Q3
2016
Q2
2016
Q1
2016
16
Q4
2015
Q1
2017
77...
No.10
Segment performance Q2 201702
• EBITDA down from €49m to €37m
• Positive volume effect (€3m)
• Negative price effect...
No.11
Cash flow and net debt development02
36
• NWC build-up of €45m in Q2 due to higher
inventory (€16m) and trade receiv...
No.12
Maturity profile – well-balanced & diversified funding portfolio02
Q2 2017 Results | Analysts’ and Investors’ Confer...
No.13
1. Highlights and update on strategy
2. Financials
3. Outlook
4. Appendix
Agenda
Q2 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
Outlook03
Q3 2017
• Seasonally lower sales
• EBITDA anticipated to be between €35m and €45m
FY 2017
• Higher sales a...
No.16
1. Highlights and update on strategy
2. Financials
3. Outlook
4. Appendix
Agenda
Q2 2017 Results | Analysts’ and Inv...
No.17
Quarterly and FY results04
(€m)
Q2
2017
Q1
2017
Q4
2016
Q3
2016
Q2
2016
Q1
2016
Q4
2015
Q3
2015
Q2
2015
Q1
2015
Q4
2...
No.18
Segment performance04
Q2
2017
911
Q1
2017
926
Q4
2016
867
Q3
2016
873
Q2
2016
950
Q1
2016
903
Q4
2015
891
Q3
2015
93...
No.19
Strong balance sheet04
• Equity ratio further healthy at 39%
• Net debt of €486m
• Gearing* at 42%
• NWC increased f...
No.20
Sales by markets, products and industries04
As of December 31, 2016.
Sales by industry
Sales by product
Sales by mar...
No.21
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 - Q2 2017 Results - Analysts' and Investors' Conference

  1. 1. Q2 2017 Results Analysts’ and Investors’ Conference July 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. Valuation statements are unified and are presented as follows: Q2 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE +/- 0-1% constant, stable +/- 1-5% moderate, slightly +/- 5-10% measureably, noticeable, substantial +/- 10-15% considerably, dynamic, significant > +/- 15% sharp, strong
  3. 3. No.3 1. Highlights and update on strategy 2. Financials 3. Outlook 4. Appendix Agenda Q2 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  4. 4. No.4 Highlights Q2 201701 • Sales increased by 8.1% yoy to €1.6bn due to higher price level • Shipments adjusted for sale of Spanish activities and discontinuation of pipe import business in the US with -0.6% almost on par with prior year´s level (reported -4.4%) • Gross profit down from €362m in Q2 2016 to €339m in Q2 2017 due to sale of Spanish activities and price development in Europe • Consequently gross profit margin decreased to 20.6% after 23.8% in Q2 2016 • Operating result (EBITDA) for Q2 of €63m in the forecasted guidance range of €60m to €70m and €140m for H1 2017 after €88m in the prior-year period • Sales share via digital channels continuously increased from 14% in Q1 2017 to 15% in Q2 2017 • EBITDA forecast of €35m to €45m for the third quarter • EBITDA increase of more than 10% for the full year over prior year and further improvement in net income Q2 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  5. 5. No.5 Significant increase of EBITDA in H1 201701 EBITDA impact: Q2 yoy Comments 72 9 63 Q2 2017Other effects -1 OpexOne Europe / WIN+ 2 -16 Volume effect -3 Q2 2016 Q2 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE Price effect • Q2 results impacted by negative market effects of -€19m mainly due to price development in Europe • Negative price effect in Q2 was partly mitigated by • use of digital pricing tools • further extension of share of value added products & services and change of customer mix by exiting low margin business • One Europe and KCO WIN+ program with EBITDA contribution of €2m in Q2 and in total €8m in H1 88 37 140 2 Opex 3 One Europe / WIN+ 8 YTD June 2017 Actual Other effects Volume effect 2 YTD June 2016 Actual Price effect EBITDA impact: H1 yoy
  6. 6. No.6 01 Q2 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE • First measures with an EBITDA contribution of €2m in Q2 and €5m in H1 2017 • Further centralized procurement had highest EBITDA impact in H1 2017 • Further optimizations mainly in the logistics area through implementation of cross-border route planning software • Well on track to achieve incremental EBITDA contribution targets of €10m in 2017 and €30m until 2019 • Expansion of aluminum business with total annual processing capacity of 80,000 tons of aluminum via Becker Stahl- Service • Slitting line put into operation in May with first sales • Currently validation phase for OEM certificates • Invest in high-growing physical vapor deposition processing equipment (color surface- treatment) in the US • Sales share via digital channels increased from 9% in Q1 2016 to 15% in Q2 2017 • Integration of first 3rd party distributors with complementary products into online offering • kloeckner.v with divestment of stake in digital retail specialist Contorion • First successful exit of kloeckner.v by sale to Hoffmann Group • >€4m disposal gain after holding just over one year (=115%) • Final closing of the deal is still pending approval by the responsible anti-trust authorities Digitalization One Europe Higher value-add Further progress of “Klöckner & Co 2020“ strategy
  7. 7. No.7 1. Highlights and update on strategy 2. Financials 3. Outlook 4. Appendix Agenda Q2 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  8. 8. No.8 Shipments and sales02 • Shipments decreased yoy mainly due to the sale of Spanish activities and exit from the pipe business in the US • Qoq shipments were nearly on par • Sales increased yoy and qoq due to higher average sales prices 1,535 Q3 2015 1,636 Q2 2015 1,643 Q1 2016 1,556 Q4 2015 1,450 Q3 2016 Q4 2016 1,582 1,572 Q2 2017 Q2 2016 1,500 1,645 1,602 Q4 2016 1,397 1,430 Q4 2015 1,386 1,693 Q2 2015 1,597 Q1 2016 1,517 Q2 2016 Q2 2017 1,640 Q3 2016 Q1 2017 Q3 2015 1,456 -4.4% -0.7% +8.1% +2.4% Shipments (Tto) Sales (€m) Q2 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE Q1 2017
  9. 9. No.9 Gross profit and EBITDA02 * Before restructuring cost. 63 7172 11 30 37 Q3 2016 Q2 2016 Q1 2016 16 Q4 2015 Q1 2017 77 Q4 2016 Q3 2015 Q2 2015 36 Q2 2017 2.6 5.04.8 1.20.7 1.92.1 3.9 4.8 Q1 2017 Q4 2016 319 Q3 2016 329 Q2 2016 362 Q1 2016 304 Q4 2015 297 Q3 2015 311 Q2 2017 339 Q2 2015 325 367 22.922.823.0 23.8 22.0 20.4 19.4 20.6 19.2 • Gross profit down yoy mainly due to sale of Spanish activities and price development • Margin down to 20.6%, 3.2%p below Q2 2016 • EBITDA in Q2 down yoy by €9m and qoq by €14m • EBITDA margin in Q2 down by 0.9%p yoy to 3.9% Gross profit* (€m) / Gross margin* (%) EBITDA* (€m) / EBITDA margin* (%) Q2 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  10. 10. No.10 Segment performance Q2 201702 • EBITDA down from €49m to €37m • Positive volume effect (€3m) • Negative price effect (-€16m) • One Europe and KCO WIN+ contributed €2m to EBITDA improvement Europe (€m) Americas (€m) 32 EBITDA Q2 2017 F/X 1 OPEX 7 Price effect 0 Volume effect -6 EBITDA Q2 2016 30 37 One Europe / Win+ EBITDA Q2 2017 2 -16 Volume effect 3 EBITDA Q2 2016 49 Price effect F/X and other 0 OPEX -1 • EBITDA up from €30m to €32m • Negative volume effect (-€6m) • Only marginal price effect Q2 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE Comments
  11. 11. No.11 Cash flow and net debt development02 36 • NWC build-up of €45m in Q2 due to higher inventory (€16m) and trade receivables (€28m) • “Other” includes changes in other provisions and other operating assets/liabilities • Cash flow from operating activities roughly balanced (-€2m) • Free cash flow of -€17m Comments • Net financial debt increased due to NWC build-up partly compensated by f/x (€16m) and settlement of swaps (€11m) -17-15 63 Taxes -7 Interest -6 Change in NWC -45 EBITDA Q2 2017 Free cash flow Q2 2017 Capex (net) Cash flow from operating activities -2 Other -7 27 CF from operating activities -2 Net debt 03.2017 475 Net debt 06.2017 486 Other -1 F/X, SwapsDividends -20 Capex (net) -15 Q2 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE Cash flow reconciliation Q2 2017 (€m) Net financial debt 06/2017 vs. 03/2017 (€m)
  12. 12. No.12 Maturity profile – well-balanced & diversified funding portfolio02 Q2 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE Facility Committed (€m) Drawn amount (€m, IFRS*) Q2 2017 FY 2016 Syndicated Loan 1) 300 0 0 ABS Europe 2) 300 139 115 ABS/ABL USA 482 202 218 Convertible 2016 3) 148 133 131 Bilateral Facilities 4) 311 163 114 Total Debt 1,541 637 578 Cash 151 134 Net Debt 486 444 €m Q2 2017 Adjusted equity 1,164 Net debt 486 Gearing 5) 42% Maturity profile of committed facilities & drawn amounts (€m) Left side: committed facilities Right side: utilization (nominal amounts) ABS/ABL USA BilateralsSyndicated Loan ABS Europe *Including interest accrued, excluding deferred transaction costs. 1) Reduction of total commitments from €360m to €300m and ‘Minimum Equity’ covenant from €800m to €600m in April 2017. 2) Reduction of ‘Minimum Equity’ covenant from €800m to €600m in May 2017. 3) Principal €148m, equity component €18m at issuance (08.09.2016). 4) Including finance lease. 5) Net debt/Equity attributable to shareholders of Klöckner & Co SE less goodwill from business combinations subsequent to May 23, 2013. 300 139 148 300 201 2929 6 1919 93 241 1 1 15 15 6 631 350 154 315 148 482 306 2017 2018 2019 2020 2021 Thereafter Convertible Bond
  13. 13. No.13 1. Highlights and update on strategy 2. Financials 3. Outlook 4. Appendix Agenda Q2 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% Q2 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  15. 15. No.15 Outlook03 Q3 2017 • Seasonally lower sales • EBITDA anticipated to be between €35m and €45m FY 2017 • Higher sales anticipated due to on average higher price level • EBITDA up by at least 10% compared to last year (€196m) Q2 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  16. 16. No.16 1. Highlights and update on strategy 2. Financials 3. Outlook 4. Appendix Agenda Q2 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  17. 17. No.17 Quarterly and FY results04 (€m) Q2 2017 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) 1,572 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 1,640 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 339 367 319 329 362 304 297 311 320 310 309 325 1,315 1,237 1,261 1,188 % margin 20.6 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. 63 77 37 71 72 16 2 28 -17 10 33 61 196 24 191 124 % margin 3.9 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 41 54 -4 48 49 -8 -297 5 -44 -15 8 38 85 -350 98 -6 Financial result -8 -8 -10 -8 -7 -8 -12 -12 -13 -12 -13 -14 -33 -49 -59 -73 Income before taxes 33 46 -14 40 42 -16 -309 -7 -56 -27 -4 24 52 -399 39 -79 Income taxes -9 -10 2 -9 -9 2 45 -2 1 6 1 -8 -14 50 -17 -12 Net income 24 36 -12 31 33 -14 -263 -9 -55 -22 -4 16 38 -349 22 -90 Minority interests 1 0 0 0 1 0 -1 0 -1 0 -1 0 -1 -2 0 -6 Net income KlöCo 23 36 -12 31 32 -14 -263 -9 -54 -21 -4 16 37 -347 22 -85 EPS basic (€) 0.23 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 (€) 0.22 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. Q2 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  18. 18. No.18 Segment performance04 Q2 2017 911 Q1 2017 926 Q4 2016 867 Q3 2016 873 Q2 2016 950 Q1 2016 903 Q4 2015 891 Q3 2015 931 Q2 2015 970 Q4 2015 919 Q3 2015 986 1,054 985 Q4 2016 883 Q1 2017 Q1 2016 963 Q2 2016 891 Q3 2016 Q2 2015 870 Q2 2017 1,019 49 1112 21 29 Q1 2016 Q4 2015 36 Q3 2016 55 Q2 2016 37 Q1 2017 54 Q4 2016 Q2 2017 Q3 2015 Q2 2015 Q4 2016 583 Q3 2016 627 Q4 2015 Q3 2015 705 Q2 2015 657 Q1 2017 660 Q2 2017 Q1 2016 652644 Q2 2016 693 675 Q2 2015 639 539 Q2 2016 554 Q1 2016 617 Q4 2016 515 Q3 2016 611 Q2 2017 621 Q1 2017 516 Q4 2015 537 Q3 2015 30 11 30 11 14 Q1 2016 Q4 2015 3 Q3 2015 Q2 2015 Q4 2016 Q3 2016 22 Q2 2016 Q2 2017 32 Q1 2017 13 -4.1% -4.7% +5.9% +12.0% 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. Q2 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  19. 19. No.19 Strong balance sheet04 • Equity ratio further healthy at 39% • Net debt of €486m • Gearing* at 42% • NWC increased from €1,120m to €1,306m * 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% 654 857 897 849 134 151 206 Other current assets Trade receivables Inventories Non-current assets June 30, 2017 3,084 108 1,119 Dec. 31, 2016 2,897 1,006 Liquidity 540 670 359 309 282279 571 Other liabilities Trade payables Pensions Financial liabilities Equity June 30, 2017 3,084 631 1,192 Dec. 31, 2016 2,897 1,148 40% 39% Q2 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  20. 20. No.20 Sales by markets, products and industries04 As of December 31, 2016. Sales by industry Sales by product Sales by markets 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 Q2 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE
  21. 21. No.21 Current shareholder structure04 Geographical breakdown of identified institutional investors • Identified institutional investors account for 71% • German investors incl. retail dominate • Top 10 shareholdings represent around 52% • Retail shareholders represent 22% Comments As of July 2017. 6% Rest of EU 30% US 3% Rest of world 2% Switzerland 5% UK 53% Germany Q2 2017 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE 1% France
  22. 22. 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 September 29, 2017 Capital Markets Day, Frankfurt am Main, Germany October 25, 2017 Q3 interim statement 2017 February 28, 2018 Annual financial statements 2017 April 25, 2018 Q1 interim statement 2018 May 16, 2018 Annual General Meeting Contact details

Klöckner & Co SE - Q2 2017 Results - Analysts' and Investors' Conference

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