Klöckner & Co SE. UBS Best of Germany Conference

Transcription

1 Klöckner & Co SE A Leading Multi Metal Distributor Gisbert Rühl CEO UBS Best of Germany Conference New York September 9,

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 Agenda 01 Overview 02 Update on strategy 03 Financials 04 Outlook 05 Appendix 3

4 01 Klöckner & Co SE at a glance Producers Service Center / Distribution One of the leading steel service center / distribution companies in Europe and Americas Distribution and service platform with around 220 locations worldwide Key figures for Sales: 6.4 billion EBITDA: 150 million (before restructuring) Customers Commercial/ residential construction Infrastructure Machinery and mechanical engineering Automotive Products : Services: Yellow Goods White Goods Miscellaneous 4

5 01 Holistic solution from covering procurement, logistics and processing Suppliers Sourcing Products and services Logistics / distribution Customers As a producerindependent distributor, our customers benefit from our diverse national and international procurement options Procurement of large quantities Strategic partnerships Extensive product range Excellent product and processing quality Wide-ranging service provision Local presence Individual delivery, including 24- hour-service More than 146,000 customers Average normal order size approx. 2,000 Klöckner & Co value chain 5

6 01 Global reach local presence With around 220 locations in 15 countries we assure local availability for our customers USA: 36% Europe: 62% UK: 5% Brazil: 1% F/BE: 14% ES: 2% NL: 3% CH: 14% D: 24% China: <1% Austria Belgium Brazil China England France Germany Ireland Mexico Netherlands Puerto Rico Scotland Spain Switzerland USA As of December 6

7 01 Sales by markets, products and industries Sales by markets Sales by industry Sales by product As of December 7

8 01 Klöckner is one of the leading Steel Service Center / Distributors in Europe and the US Position in the US significantly improved whereas market share in Europe is expected to remain stable despite heavy restructuring measures 2007 ArcelorMittal Thyssen 5% Klöckner Salzgitter Tata Steel Others Europe ArcelorMittal Thyssen 5% Klöckner Salzgitter Tata Steel Others 1% Reliance Ryerson Thyssen Samuel Metals USA Namasco (Klöckner) US 4% Reliance Ryerson Kloeckner Metals Thyssen Others Others Source: Eurometal, Purchasing Magazine, Service Center News. 8

9 Agenda 01 Overview 02 Update on strategy 03 Financials 04 Outlook 05 Appendix 9

10 02 Comprehensive transformation initiated Klöckner & Co 2020 Stabilization Restructuring Finished by successful implementation of KCO 6.0 Growth and optimization Differentiation Operations External & internal growth Supplier partnerships Product and service portfolio Digitalization Improvements of pricing, customer segmentation, product portfolio and logisitc through KCO WIN External growth with focus on higher value-added business Internal growth with focus on US market Expansion of partnerships with specific suppliers and more favorable umbrella agreements Forces expansion of higher value-added processing services Digitalization of the supply chain 10

11 02 KCO 6.0 successfully implemented, KCO WIN on track KCO m 61m Total annual EBITDA-impact of > 150m from onwards 22m 41m already realized KCO WIN 5m 20m m Total annual EBITDA-impact of ~ 50m from 2015 onwards already realized 11

12 02 Significant margin enhancement potential through increasing higher value-add business and its improvement of profitability Target is to increase share of higher margin processing from 15% to 25% and share of higher valueadd products from 15% to 20% by 2017 Share of total sales Actual Target 2017 Standard products 27% Conventional processing 35% 20% 43% 15% Higher valueadd products 15% Higher value-add processing 20% 25% 45% Higher value-add products and processing 12

13 02 Above-average scope for higher margins in higher value-add processing Gross profit margin 50% 40% 30% 20% 10% Hollow sections for steel construction Commodity stockholding Lower-margin processing Sawing Higher value-add processing 3D tube laser 13

14 02 Additional potential with webshops and online supplier integration By end of next year all country organizations will have implemented the new webshop Target of generating at least 50% of sales online in five years EDI- Portal Webshop Suppliers Suppliers stocks KCO central stocks KCO branches Customers Online connection to suppliers to allow direct access to their floor stocks Increase of sales per customer and gaining new customers through webshop solution Realization of significant savings per order 14 Conventional steel distribution supply chain highly inefficient: Disconnected flow of information Multiple stocking, too many picks Unsteady delivery from mills

15 02 Goal of integrating all online applications in a single B2B Exchange Webshop, EDI-Portal and further applications merged into B2B exchange, to ease online integration of suppliers and to enable a seamless information flow B2B Exchange Webshop Suppliers Suppliers stocks KCO central stocks KCO branches Customers Increasing direct access to floor stocks of suppliers Apply B2B Exchange to integrate processes with suppliers Integration of additional services such as construction support and material calculation 15

16 02 Mid-term EBITDA-margin-target of >5% until 2017 Stabilization Growth and optimization Differentiation > 2.0% >5% 2.0% 0.6% 0.2% 0.8% EBITDA-margin before restructuring and one-offs KCO 6.0 (remaining effects) Riedo Acquisition KCO WIN Sourcing Products and Services Digitalization 2017 EBITDA-margin 16

17 Agenda 01 Overview 02 Update on strategy 03 Financials 04 Outlook 05 Appendix 17

18 03 Substantial yoy EBITDA-improvement mainly through self-help measures EBITDA-bridge ( m) Comments yoy Self-help measures: 13m Self-help measures contributed 13m to EBITDA against prior year in and 27m ytd EBITDA contribution achieved through KCO 6.0 amounted to 8m in and 22m ytd EBITDA H1 yoy 72 Volume Effect* 15 Price Effect 3 KCO 6.0 Effect 22 KCO WIN Effect Self-help measures: 27m 5 OPEX** -16 EBITDA 101 KCO WIN on track with first EBITDA contribution of 5m in EBITDA-margin improved by 0.8%p to 3.3% in and by 0.9%p to 3.1% ytd EBITDA H1 Volume Effect* Price Effect KCO 6.0 Effect KCO WIN Effect OPEX** EBITDA H1 * Including Riedo impact of 10m. ** Including - 7m pension adjustment NL in / and - 4.3m Riedo. 18

19 03 Gross profit and EBITDA-margin improvement is gaining further momentum Gross profit* ( m) / Gross-margin* (%) EBITDA* ( m) / EBITDA-margin* (%) * Before restructuring costs. 19

20 03 Performance improved in both segment but especially in the Americas EBITDA* ( m) / EBITDA-margin* (%) Europe EBITDA* ( m) / EBITDA-margin* (%) Americas * Before restructuring costs. 20

21 03 Balance sheet remains strong 3,595 Assets 3,658 Equity & liabilities 3,595 3,658 Inventories Trade receivables Liquidity 1, , Equity Financial liabilities Pensions 1,445 1,447 40% 40% Other assets 1,147 1,156 Trade payables Other liabilities Dec 31, Jun 30, Dec 31, Jun 30, Comments Equity ratio further solid at 40% Net debt of 579m Gearing* at 41% Leverage** 3.2x NWC increased from 1,330m to 1,463m qoq * Gearing = Net debt/equity attributable to shareholders of Klöckner & Co SE less goodwill from business combinations subsequent to May 23,. ** Leverage = Net debt/ebitda before restructuring expenses last twelve months. 21

22 Agenda 01 Overview 02 Update on strategy 03 Financials 04 Outlook 05 Appendix 22

23 04 Steel demand in is expected to recover in Europe and even more pronounced in the US but challenges remain Steel consumption remains despite recovery in Europe about 30% below pre-crisis level whereas demand in North America is almost back to the 2007 level EU-27 Steel demand (million to) NAFTA Steel demand (million to) -28% % % % e e Source: WSA 23

24 04 Segment specific business outlook Europe US +2-3% +4-5% Steel demand Construction industry Machinery and mechanical engineering Automotive industry 24

25 04 Outlook Shipments to be seasonally slightly lower Increasing EBITDA contribution of KCO WIN measures EBITDA expected on the level of in a range between 50 and 60m FY Shipments and sales to be slightly up also through Riedo acquisition EBITDA expected in a range between 190m to 210m Reduction of IDA expense by some 25m to 155m anticipated Expected positive net income should facilitate return to dividend payment for fiscal year 25

26 Agenda 01 Overview 02 Update on strategy 03 Financials 04 Outlook 05 Appendix 26

27 05 Quarterly results and FY results ( m) * * * FY FY * FY 2011 Shipments (Tto) 1,720 1,633 1,492 1,617 1,690 1,646 1,585 1,764 1,863 6,445 7,068 6,661 Sales 1,680 1,572 1,455 1,600 1,698 1,625 1,633 1,847 1,964 6,378 7,388 7,095 Gross profit ,188 1,288 1,315 % margin EBITDA % margin EBIT Financial result Income before taxes Income taxes Net income Minority interests Net income KlöCo EPS basic ( ) EPS diluted ( ) * Restated due to initial application IAS 19 revised

28 05 Recovery continued in both segments Europe Shipments (Tto) Sales ( m) EBITDA* before restructuring ( m) % +1.1% Americas Shipments (Tto) Sales ( m) EBITDA before restructuring ( m) % % ** ** ** Restructuring costs ( m) 2011 Europe * : as restated for the initial application of IAS19 revised Americas ** Including pension release: 7m, in 6m and 1m and sale of French La Courneuve site 13m. 28

29 05 Segment performance Europe Americas HQ/Consol. Total Shipments (Tto) , ,690 Δ % Sales ( m) 1, ,680 1, ,698 Δ % EBITDA ( m) % margin % margin Δ % EBITDA

30 05 Balance sheet as of June 30, ( m) June 30, December 31, Non-current assets 1, Inventories 1,238 1,166 Trade receivables Other assets Cash & Cash equivalents Total assets 3,658 3,595 Equity 1,447 1,445 Total non-current liabilities 1,165 1,077 thereof financial liabilities Comments Shareholders equity: Healthy at 40% Financial debt: Gearing at 41% Gross debt of 0.9bn and cash position of 0.3bn result in a net debt position of 579m Total current liabilities 1,046 1,073 thereof trade payables Total equity and liabilities 3,658 3,595 Net working capital 1,463 1,216 Net financial debt

31 05 Improvement of maturity profile Syndicated loan extension option of one year till May 2017 successfully executed ABS Europe extended by one year till May 2017 S&P rating improved from B+, Outlook negative to B+, Outlook stable m Facility Committed Drawn amount * FY * 1200 Committed lines 1,175 Bilateral Facilities 1) ABS Syndicated Loan Promissory Note Total Senior Debt 1, Convertible Convertible ) Total Debt 1, Cash Net Debt *Including interest 1) Including finance lease. 2) Drawn amount excludes equity component Thereafter Bilaterals Promissory Notes ABS US ABL Syndicated Loan Convertibles

32 05 Profit & loss ( m) Sales 1,680 1,698 Gross profit Personnel costs Other operating expenses (net) EBITDA Depreciation & Amortization EBIT Financial result EBT 17-2 Taxes -7-2 Net income

33 05 Current shareholder structure Geographical breakdown of identified institutional investors US 47% Germany 19% UK 9% France 8% Comments Identified institutional investors account for 55% German investors incl. retail dominate Top 10 shareholdings represent around 31% Retail shareholders represent 27% Switzerland 4% Rest of EU 6% Rest of World 7% As of July 33

34 05 Current shareholder structure II Voting Rights Announcements according to WpHG (Security Trading Act)* Date of publication Subject to compulsory notification Portion of voting stock 02/06/ Interfer Holding GmbH 4.98% 07/04/ Templeton Investment Counsel, LLC 5.02% 18/03/ Franklin Mutual Advisors included therein: Franklin Templeton Investment Funds (3.15%) 5.35% 27/01/ Allianz Global Investors Europe GmbH 3.05% 08/01/ Franklin Templeton Investments Corp. 4.99% 02/02/ Dimensional Holdings Inc. / Dimensional Fund Advisors LP 3.06% *) The table lists all shareholders, whose Klöckner & Co SE voting shares currently exceed one of the notification thresholds under section 21 clause 1 WpHG, based on notification. 34

35 05 Products Flat products Hollow Sections Long Products Stainless / Aluminium 35

36 05 Products / Services Coils Decoiling / Cutting / Slitting Cutting to Length / Bending Surface treatment 36

37 05 Services Laser cutting / Flame cutting 3D-Laser 3D-Laser 3D-Laser 37

38 05 Appendix Financial calendar October 1-2, Capital Market Days, Berlin November 6, interim report Contact details Investor Relations Christian Pokropp, Head of Investor Relations & Corporate Communications Phone: Fax: Internet: 38

39 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