Klöckner & Co - Roadshow Presentation May 10, 2013

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Roadshow Credit Suisse in London

Transcript of Klöckner & Co - Roadshow Presentation May 10, 2013

1. Klckner & Co SE A Leading Multi Metal Distributor Roadshow Credit Suisse London CEO Gisbert Rhl May 10, 2013 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. Highlights and update on strategy01 Financials Q1 2013 Outlook Appendix 02 03 04 Agenda 3 4. Strong benefit from restructuring margins improving, costs down, but volumes are lacking behind 01 4 First quarter overshadowed by macro uncertainty, price declines and severe weather conditions in Europe; nevertheless turnover development in both regions beat markets Europe and also Americas started slowly into the year with turnover +3.8%qoq, but -11.4%yoy (restructuring impact -3.3%p), sales was only stable qoq due to price decline all over the board, -16.5%yoy European turnover +2.5%qoq, but -15.8%yoy vs. market of -14% (restructuring impact -5.7%p yoy), sales -16.9%yoy US turnover +6.1%qoq, but -3.5%yoy vs. market of -6.6%, adj. for working days turnover was flat yoy, sales -14.9%yoy Restructuring showing double success: gross margin improved from 17.7% to 18.6% and cost- cutting of 16m feeding through to bottom line with 12m EBITDA impact EBITDA with 29m at low end of guidance range of 30-40m despite adverse conditions Restructuring almost completed with 1,600 out of 1,800 HC reduced and 50 out of 60 sites closed European ABS-program extended until May 2016 with 360m Q2: slight improvement in turnover and EBITDA to 35-45m 5. KCO 6.0 measures having strong impact on the P&L01 * After restructuring costs of 3m.Total GP effect: 41m 44* -4 Price Effect -14 Volume Effect -23 EBITDA Q1 2012 Variable costs 29 EBITDA Q1 2013 10 KCO 6.0 Fix-cost effect 16 KCO 6.0 GP effect KCO 6.0 EBITDA expenses 12m 274280288 -7.5% Q1 13Q4 12*Q3 12*Q2 12* 294 Q1 12* 296 -0.6% -2.2% -2.6% -2.3% in m KCO 6.0 EBITDA impact OPEX 5 1,600 out of 1,800 HC reductions completed EEC disposal completed Reduction of 50 out of 60 targeted branches Only outstanding measures: France, but according to plan Program measures * incl. expenses due to initial application of IAS19 revised 2011 and excl. restructuring expenses. 6. 01 Restructuring almost completed 240 290 6 Employees Sites UK ESP EEC GER BR Q3 2011 Q1 2013 UK ESP F EEC 10,212 11,577 GER Holding US BR Q3 2011 Europe -1,042 Americas Q1 2013 -24 -299 Reduced by 1,365, including temps ~1,600 Personnel expenses reduced by 7% or about 12m in Q1 yoy EEC completely sold; Lithuania closed in February; Poland closed in April Only outstanding measure is France which is according to plan to be implemented in Q2 Comments 7. Exposure to peripheral states in Europe is rather limited after restructuring01 7 95% of European business is in Core Europe (Sales 2012) reduced by end of Q2 7,123 1,600 Employees closed end of Q2 14 sold (EEC) 160 Sites 39 1) 2) 1) Basis is September 2011 2) Distribution locations only 36% 9% 5% 20% 5% 23% 2% 95% 8. Significant improvement of Group structure since 2007, EBITDA-margin target of 6% remains 01 Exposure to historically more commoditized European general line distribution cut by half until 2015 BSS 2010 Macsteel 2011 Primary 2007 Canada 2008 USA EEC 2013 Restructuring 2012/13 Major acquisitions Major divestments restructuring Organic growth 6.3bn 8.6bn grow and increase margin grow and stabilize high earnings level improve profitable core 3% Canada 13% USA 14% CH 70% European general line distribution 43% USA 2% EM 12% CH 9% BSS 35% European general line distribution KVT 2008 Temtco 2008 Brazil 2011 6.0 6.5% 6.0 6.5% 4.0 5.0% 8 2007 2015e 6.0% EBITDA-margin target 9. In the same period share of higher margin business will be increased by 11%pts01 9 Construction 42% Construction 35% Construction 30% Machinery 25% Machinery 25% Machinery 28% Automotive 6% Automotive 12% Automotive 14% Others 27% Others 28% Others 28% 2007 2013e 2015e +6%pts -7%pts -5%pts +5%pts Exposure to more commoditized construction business down from 42% in 2007 to 30% by 2015 31% 42% 10. Summary Klckner & Co development and strategy01 Transformation process: KCO has improved its Group structure significantly since 2007 Share of higher margin business has been increased substantially In Europe the exposure to commoditized general line distribution and the suffering peripheral states has been heavily decreased Focus of further growth is concentrated on the more attractive US market Even if significant changes and improvements are so far not reflected in results because of extremely weak market conditions, Klckner & Co will be much better off when markets recover 10 11. Highlights and update on strategy01 Financials Q1 2013 Outlook Appendix 02 03 04 Agenda 11 12. Financials Q1 201302 12 EBITDA Sales Gross profit Turnover * Before restructuring costs 1,945m 1,625m -16.5% Q1 2013Q1 2012 1,857 Tto -11.4% Q1 2012 Q1 2013 1,646 Tto -39.6% Q1 2012 Q1 2013 29m 47m* 344m 303m -11.9% Q1 2013Q1 2012 13. 1,587 1,885 1,885 1,739 1,945 1,964 1,847 1,633 1,625 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 +30.5% Turnover and sales02 Sales (m) & Americas shareTurnover (Tto) & Americas share Turnover increased less than usual qoq due to economic uncertainty and also restructuring impact (- 3.3%p) Additionally, both segments were impacted by less working days compared to prior year Average prices per ton decreased significantly in Q1 qoq (Q1: 987 vs. Q4: 1,030) 13 1,646 1,498 1,763 1,765 1,636 1,857 1,863 1,764 1,585 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 +3.8% -11.4% -16.5% -0.5%22.3 32.4 39.5 39.5 40.5 41.1 42.3 42.7 43.5 18.7 27.6 33.6 34.6 37.1 37.0 37.8 36.3 37.4 14. EBITDA (m) / EBITDA-margin (%) Gross profit and EBITDA02 Gross profit (m) / Gross-margin (%) Despite strongly declining prices, gross profit margin remained stable compared to Q4 and increased substantially vs. last year (+0.9%p) * Before restructuring costs 14 353 337 318 307 344 344* 306 302* 303 22.3 17.9 16.8 17.6 17.7 17.5* 16.6 18.5* 18.6 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 EBITDA-margin benefitting from strong cost reduction, pulling out substantially higher EBITDA out of roughly stable gross profit ** As restated for the initial application of IAS19 revised 2011 104 62 37 24* 47* 50* 18 21* 29 6.6 3.3 1.9 1.3 2.4* 2.5* 1.0 1.3* 1.8 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012** Q2 2012** Q3 2012** Q4 2012** Q1 2013 15. 334 571 698 646 752 766 746 677 716 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Key figures by segment02 Turnover (Tto) Sales (m) EBITDA (m) * Restructuring costs: Europe: 3m in Q1, 17m in Q2, -1m in Q3 and 57m in Q4; Q