Klöckner & Co - Q1 2012 Results

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Klöckner & Co SE A Leading Multi Metal Distributor Q1 2012 Results Analysts’ and Investors’ Conference Call CEO/CFO Gisbert Rühl May 9, 2012

Transcript of Klöckner & Co - Q1 2012 Results

Page 1: Klöckner & Co - Q1 2012 Results

Klöckner & Co SEA Leading Multi Metal Distributor

Q1 2012 Results

Analysts’ and Investors’ Conference CallCEO/CFO

Gisbert Rühl

May 9, 2012

Page 2: Klöckner & Co - Q1 2012 Results

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.

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Overview Q1 and update on profitability action plan01

Financials Q1 2012

Outlook

Appendix

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03

04

Agenda

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Overview Q1 2012

• Turnover increased by 24.0% yoy driven by acquisitions in Americas

• European turnover down 5.1% yoy also due to exiting low margin business whereas Americas up 125.4% yoy

• Significant uptick in turnover sequentially (+13.5% vs Q4)

• Sales increased by 22.6% yoy and by 11.9% sequentially

• EBITDA (€45m) sequentially up from Q4 at €14m, but significantly below windfall gain driven last year (€104m) leading to a negative net income (€-10m)

• Americas EBITDA with €29m stronger (3.9% margin) than Europe with €20m (1.7% margin)

• European ABS-program prolonged until May 2014 and reduced from €420m to €360m

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Update on profitability action plan

• Europe• Profitability action plan measures on track (one-off costs €3m in Q1)• 400 out of 700 headcount reduction already realized • Underperforming big customers bulk beam business in Germany and Netherlands being driven

down• Major restructuring in Spain: another third of existing warehouses will be closed to finally reduce

capacity by half compared to pre-crisis• Subsidiaries in Eastern Europe to be scaled down by restructuring/ divestiture

• US• Integration of Macsteel running well• Purchasing synergies realized in transaction prices and rebates• Common sales force already realizing cross selling effects• Realignment of group operations along product lines complete, one warehouse closed• March 1: introduction of Kloeckner Metals US as common brand• Ongoing: Migration of Macsteel locations to common IT platform by mid year

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Overview Q1 and update on profitability action plan01

Financials Q1 2012

Outlook

Appendix

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03

04

Agenda

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Financials Q1 201202

EBITDA

Sales

Gross profit

Turnover

1,498 Tto

+24.0%

Q1 2011 Q1 2012

1,857 Tto€1,587m

€1,945m+22.6%

Q1 2012Q1 2011

€104m€45m

-57.4%

Q1 2012Q1 2011

€353m€344m

-2.7%

Q1 2012Q1 2011

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Turnover and sales02

1,1801,448 1,368 1,318

1,4981,763 1,765

1,6361,857

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

+13.5%

+24.0%

Sales (€m)Turnover (Tto)

• qoq increase reflecting seasonal recovery • Average prices per ton slightly down qoq(Q1: €1,048 vs Q4: €1,063)

1,049

1,416 1,401 1,3321,587

1,885 1,8851,739

1,945

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

+11.9%

+22.6%

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EBITDA (€m) / EBITDA-margin (%)

Gross profit and EBITDA02

Gross profit (€m) / Gross-margin (%)

• Gross profit-margin stayed subdued due to adverse competitive environment in Europe

• EBITDA in Q1 improved qoq but was significantlylower than last year which was heavily boosted by windfall profits

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100

48

104

62

37

14

45

29

61

7.1

4.33.6

6.6

3.3

1.9 0.82.3

2.8

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

236

331294

275

353 337318 307

34423.4

21.0 20.6

22.3

17.9 16.8 17.6 17.7

22.5

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

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858

1,180 1,169 1,1041,290

1,365 1,251

1,1371,223

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

909

1.162 1,084 1,0291,164 1,192

1,067 9901,105

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

Segment performance Q1 201202

Turnover (Tto) Sales (€m) EBITDA (€m)

* consolidation of BSS as of March 1, 2010

Turnover (Tto) Sales (€m) EBITDA (€m)

Eur

ope

Am

eric

as

*

-5.2%-5.1%

** Without acquisitions in 2011

10

271 286 284 289334

571

698646

752

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

191236 232 228

297

520

634 602

722

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

9 135 7

3023

15 13

29

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

25

93

60

45

81

50

2412

20

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

+143.3%/+19.7%**+125.4%/+11.8%**

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Net income again impacted by acquisition related ppa effects02

• Net income includes €10m ppa effects, and €3m restructuring charges

• Taxes occurred due to non-recognition of tax assets on losses incurred in Q1

Comments

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EPS basic (€)*

Net income (€m)

* adjusted for capital increase

2

47

15 17

44

5

-12

-27-10Q1

2010Q2

2010Q3

2010Q4

2010Q1

2011Q2

2011 Q32011

Q42011

Q12012

0.02

0.69

0.21 0.25

0.65

0.07

-0.11-0.27 -0.10

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011 Q3

2011Q4

2011

Q12012

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Typical seasonal swing in NWC resulted in higher net debt02

Cash flow reconciliation in Q1 2012 (€m)

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-100,0

-80,0

-60,0

-40,0

-20,0

0,0

20,0

40,0

60,0

-138

+1-1

+6

45

-88-87

EBITDAChange in

NWC Taxes Other

CF fromoperatingactivities Capex Free CF

Development of net financial debt in Q1 2012(€m)

-88+1 -15

-573

-471

Q4

CF fromoperatingactivities Capex Other* Q1

* exchange rate effects, interest

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Strong balance sheet02

*Gearing = Net debt/Equity attributable to shareholders of Klöckner & Co SE less goodwill from businesscombinations subsequent to May 28, 2010

**Total capital = net debt plus equity (w/o minorities)

Comments

• Equity ratio of 38%

• Net debt of €573m

• Gearing* at 35%

• Net debt to total capital** at 24%

• NWC increased by €122m to €1,656m qoq

• NWC/sales at new normal ~22%

50%

26.0%

29.4%

23.2%

2.0%

19.4%

Balance sheet total March 31, 2012: €4,827m

37.8%

30.6%

31.6%

Non-currentassets1,254

Inventories1,418

Trade receivables1,118

Other currentassets 100

Liquidity937

Equity1,826

Non- current Liabilities1,475

Current liabilities1,526

100%

0%

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Balanced maturity profile with first repayment in July 2012 with €325m out of cash02

€m Facility CommittedDrawn amount

March 31, 2012* December 31, 2011*

Bilateral Facilities1) 603 135 126

Other Bonds 20 20 20

ABS2) 570 200 175

Syndicated Loan 500 228 226

Promissory Note 343 353 349

Total Senior Debt 2,036 936 896

Convertible 20073) 325 324 319

Convertible 20093) 98 89 86

Convertible 20103) 186 160 157

Total Debt 2,645 1,509 1,458

Cash 936 987

Net Debt 573 471

€m March 31, 2012

Adjusted equity 1,641

Net debt 573

Gearing4) 35%

*Including interest1) Including finance lease2) On April 25th, 2012 the European ABS was extendend until May 2014 and the volume reduced by €60 million to € 360 million 3) Drawn amount excludes equity component4) Net debt/Equity attributable to shareholders of Klöckner & Co SE less goodwill from business combinations subsequent to May 28, 2010

Maturity profile of committed facilities and drawn amounts (€m)

Committed facilities

Drawn amounts

666527

675

296

481

378

151

397

266 340

2012 2013 2014 2015 Thereafter

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Overview Q1 and update on profitability action plan01

Financials Q1 2012

Outlook

Appendix

02

03

04

Agenda

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Outlook

• Q2 2012• Turnover in Q2 expected to be sequentially slightly up vs Q1• EBITDA in Q2 expected to be €50-60m• Full implementation of all initiated profitability measures by mid of the year

• FY 2012• Turnover expected to increase by around 5% year on year• EBITDA increase subject to an economic recovery in Europe in H2• If this is not the case, an EBITDA around prior-year level could be realistic (€217m), since

positive contributions from Macsteel, the overall more robust development in the US and profitability action plan measures would be partially or fully compensated by the weaker operational development in Europe

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Overview Q1 and update on profitability action plan01

Financials Q1 2012

Outlook

Appendix

02

03

04

Agenda

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Appendix04

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Financial calendar 2012

May 25, 2012 Annual General Meeting 2012

August 8, 2012 Q2 interim report 2012

November 7, 2012 Q3 interim report 2012

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: [email protected]

Internet: www.kloeckner.de

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Quarterly results and FY results 2007-201204

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(€m) Q12012

Q42011

Q3 2011

Q2 2011

Q1 2011

Q4 2010

Q3 2010

Q2 2010

Q1 2010

FY2011

FY 2010

FY2009

FY 2008

FY 2007

Turnover (Tto) 1,857 1,636 1,765 1,763 1,498 1,318 1,368 1,448 1,180 6,661 5,314 4,119 5,974 6,478

Sales 1,945 1,739 1,885 1,885 1,587 1,332 1,401 1,416 1,049 7,095 5,198 3,860 6,750 6,274

Gross profit 344 307 318 337 353 275 294 331 236 1,315 1,136 645 1,366 1,221

% margin 17.7 17.6 16.8 17.9 22.3 20.6 21.0 23.4 22.5 18.5 21.9 16.7 20.2 19.5

EBITDA 45 14 37 62 104 48 61 100 29 217 238 -68 601 371

% margin 2.3 0.8 1.9 3.3 6.6 3.6 4.3 7.1 2.8 3.1 4.6 -1.8 8.9 5.9

EBIT 18 -18 8 36 86 24 39 78 11 111 152 -178 533 307

Financial result -24 -21 -22 -21 -19 -19 -16 -17 -15 -84 -67 -62 -70 -97

Income before taxes -6 -39 -15 15 66 5 22 61 -4 27 84 -240 463 210

Income taxes -4 12 3 -9 -22 12 -7 -14 6 -17 -4 54 -79 -54

Net income -10 -27 -12 5 44 17 15 47 2 10 80 -186 384 156

Minority interests 0 -1 -1 0 1 1 1 1 1 -1 3 3 -14 23

Net income KlöCo -10 -27 -11 5 43 16 14 46 1 12 78 -188 398 133

EPS basic (€) -0.10 -0.27 -0.11 0.07 0.65 0.25 0.21 0.69 0.02 0.14 1.17 -3.61 8.56 2.87

EPS diluted (€) -0.10 -0.27 -0.11 0.07 0.60 0.25 0.21 0.69 0.02 0.14 1.17 -3.61 8.11 2.87

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Strong Growth: 24 acquisitions since the IPO, 2 in 201104

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Acquisitions1) Acquired sales1),2)

€141m

€567m

€108m

24

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 €567m2006 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

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Comments

Balance sheet as of March 31, 201204

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(€m) March 31, 2012 December 31, 2011

Non-current assets 1,254 1,295

Inventories 1,418 1,362

Trade receivables 1,118 922

Cash & Cash equivalents 937 987

Other assets 100 140

Total assets 4,827 4,706

Equity 1,826 1,843

Total non-current liabilities 1,475 1,526

thereof financial liabilities 1,039 1,068

Total current liabilities 1,526 1,337

thereof trade payables 880 750

Total equity and liabilities 4,827 4,706

Net working capital 1,656 1,534

Net financial debt 573 471

Shareholders’ equity:• Stable at 38%

Financial debt:• Gearing at 35%• Gross debt of €1.5bn and

cash position of €0.9bn result in a net debt position of €573m

NWC:• Increase mainly due to

seasonal effects

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Profit & loss Q1 2012 vs. Q1 201104

(€m) Q1 2012 Q1 2011 Δ in %*

Sales 1,945 1,587 22.6

Gross profit 344 353 -2.7

Personnel costs -162 -131 -23.2

Other operating expenses -145 -126 -15.6

EBITDA 45 104 -57.4

Depreciation & Amortization -26 -19 -40.7

EBIT 18 86 -78.7

Financial result -24 -19 -26.9

EBT -6 66 -109.4

Taxes -4 -22 +81.4

Net income -10 44 -123.6

Minorities 0 1 -153.8

Net income attributable to KCO shareholders -10 43 -123.1

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* earnings impact

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Segment performance Q1 201204

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(€m) Europe Americas HQ/Consol. Total

Turnover (Tto)

Q1 2012 1,105 752 - 1,857

Q1 2011 1,164 334 - 1,498

Δ % -5.1 125.4 - 24.0

Sales

Q1 2012 1,223 722 - 1,945

Q1 2011 1,290 297 - 1,587

Δ % -5.2 143.3 - 22.6

EBITDA

Q1 2012 20 29 -4 45

% margin 1.7 3.9 - 2.3

Q1 2011 81 30 -7 104

% margin 6.3 10.1 - 6.6

Δ % EBITDA -74.7 -5.0 - -57.4

• Excl. MSCUSA and Frefer turnover increase in Americas was 11.8% and sales increase was 19.7% yoy

• Without acquisitions total turnover decreased by 1.4% and total sales by 0.5% yoy

Comments

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Acquisitions shift exposure towards more promising regions and products04

24% Long productsQuality steel/Stainless steel 8%

Aluminium 7%

Tubes 6%

42% Flat productsOthers 13%

Sales by product

28% USAFrance/Belgium 16%

Switzerland 13%

UK 6%

28% Germany/EECSpain 4%

Sales by markets

Netherlands 3%Brazil 1%

China <1%

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Machinery and mechanical 24% engineering

Miscellaneous 11%

Local dealers 10%

Household appliances/Consumer goods 7%

37% Construction industry

Automotive industry 11%

Sales by industry

As of December 2011

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Current shareholder structure04

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Geographical breakdown of identified institutional investors

Comments

• Identified institutional investors account for 54%

• German investors incl. retail dominate

• Top 10 shareholdings represent around 29%

• Retail shareholders represent 32%• 100% freefloat

As of March 2012

Other EU 18%

Germany 24%

Other World 5%

UK 12%

US 23%

France 13%

Switzerland 5%

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Our symbol

the earsattentive to customer needs

the eyeslooking forward to new developments

the nosesniffing out opportunitiesto improve performance

the ballsymbolic of our role to fetchand carry for our customers

the legsalways moving fast to keep up withthe demands of the customers

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