Klöckner & Co SE - Company presentation

Company presentation

March 2017Company presentation | Klckner & Co SE1

Klckner & Co SE

Duisburg

Disclaimer

Company presentation | Klckner & Co SE2

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.

March 2017

Agenda

March 2017Company presentation | Klckner & Co SE3

1. Klckner & Co SE Overview2. Steel distribution market and positioning of Klckner & Co3. Klckner & Co 2020 strategy

Klckner & Co SE at a glance


01

200,000 PRODUCTS

50SUPPLIERS

6.1 milliontons 5.7 billion 196 million

13COUNTRIES

130,000CUSTOMERS

190LOCATIONS

SHIPMENTSFY 2016

SALESFY 2016

EBITDAFY 2016

9,100EMPLOYEES

March 2017

Everything from one source


01

K L C K N E R & C O V A L U E C H A I N

S U P P L I E R S C U S T O M E R S

March 2017

Global reach local presence


01

Sales; As of December 2016

USA: 37%

D: 27%

F/BE: 10%

CH: 16%

NL: 3%

UK: 5%

ES*: 2%

Europe: 63%

Brazil:

Solutions for companies of any kind


01

S A L E S B Y S E C T O R

In addition to companies in the constructionindustry as well as machinery and mechanicalengineering, we serve customers in the automotive and chemical industry, ship-buildingand in fields of household appliance, consumergoods and energy

As of December 2016

March 2017

Full range


01

Flat products and heavy plates, hollow sections, merchant bars, precision tubes and seamless thick-wall pipes, special profiles, high-alloy round steel bars, stainless steel, aluminum sheets and extrusions, as well as special products for installation, roof and wall construction and water supply, etc.

Tubes

Stainless / Aluminium / Quality steel

Flat products

Long Products

Sales by product

As of December 2016

March 2017

Extensive services


01

Flame/gas/oxygen cutting, autogenous and plasma on CNC and optically controlled machines, burning programs via CAD systems, conservation, cutting and slitting, cutting and bending (routing on demand), cutting to length and sawing (mitercuts), other mechanical processing methods, like drilling, punching, shearing, press breaking, flat rolling, etc.

Furthermore we provide our customers with technical advice, storage facilities and just-in-time delivery

Cutting to Length / Miter Cutting / Bending

Laser cutting / Flame cutting

Decoiling / Cutting / Slitting

Surface treatment

March 2017

Current shareholder structure


01

Geographical breakdown of identified institutional investors

As of February 2017

Shareholder structure of Klckner & Co SE

5%Other investors

17%Private investors

78%Identified institutional

investors

6% Rest of EU

36% US

3% Rest of world

2% Switzerland

5% UK

48% Germany

March 2017

Management


01

W i l l i a m A . P a r t a l i sMember of the Board

North American Operations South American Operations

G i s b e r t R h lCEO

Corporate Development*) / M&A

Legal & Compliance Investor Relations &

Corporate Communications Group HR

*) incl. kloeckner.i GmbH und kloeckner.v GmbH

M a r c u s A . K e t t e rCFO

Corporate Accounting Corporate Controlling Corporate IT*) Corporate Taxes Corporate Treasury Internal Audit

*) incl. Klckner Shared Services GmbH

K a r s t e n L o r kMember of the Board

European Operations*)

*) incl. Kloeckner Metals Europe GmbH

March 2017

Agenda



March 2017

Current situation


02

Source: Bank of America Merrill Lynch, own estimates; in million tons.

March 2017

NAFTA Steel demand (million to)

EU-28 Steel demand (million to)

Source: Worldsteel

Overcapacity of steel by region (2016)

NAFTA~30

South-america

~25

Europe~90

India~20

CIS~30

Japan~20

China~280

Others:~115World:~610

Europe vs. US


02

Steel producers Steel producers

End user End user

Source: WSA, MSCI, Eurometal, SBB

40%

Larger independent distributors /

SSC

Small / midsize

distributors / SSC

Producerowned

distributors / SSC

60% 60%

Larger independent distributors /

SSC

Small / midsize

distributors / SSC

40%

25% 15%

Europe US

March 2017

Market shares of Klckner & Co


02 Position in the US significantly improved whereas market share in Europe remained stable despite heavy

restructuring measures

1%

RelianceRyersonTKSamuelO'NealRusselMacsteelMetals USAPNANamascoOthers

Europe

US

2007 2016

5%Arcelor MittalThyssenKruppKCOSalzgitterTataOthers

5%Arcelor MittalThyssenKruppKCOSalzgitterTataOthers

4%RelianceRyersonKloecknerMetalsThyssenKruppOthers

ThyssenKrupp

~3,000

~1,200

Source: Eurometal, Purchasing Magazine, Service Center News

March 2017

Diagramm1

0.05

0.04

0.02

0.02

0.02

0.02

0.01

0.01

0.01

0.01

0.79

Tabelle1

2011US2011Europe

Reliance10%AMDS10%

Ryerson6%TK6%

Kloeckner Metals4%KCO6%

TK3%Salzgitter4%

Others77%Tata4%

Others80%

20072007Europe

Reliance5%TK6%

Ryerson4%KCO6%

TK2%AMDS10%

Samuel2%Salzgitter4%

O'Neal2%Tata4%

Russel2%Others70%

Macsteel1%

Metals USA1%

PNA1%

Namasco1%

Others79.00%

Tabelle1

Agenda



March 2017

Our strategy


03

G R O W T H A N D O P T I M I Z A T I O N

D I F F E R E N T I A T I O N

D I G I T A L I Z A T I O N

K L C K N E R & C O 2 0 2 0

P R O D U C T S A N D S E R V I C E S

O P E R A T I O N S

E X T E R N A L & I N T E R N A L G R O W T H

Digitalization of the supply chain and development of a industry platform

Accelerated expansion of higher value-added products and services

One Europe and further optimization

External growth with focus on higher value-added business, internal growth with focus on the US market

March 2017

Steel supply chain is highly inefficient and totally intransparent


03

S U P P L I E R S C U S T O M E R S

N O E F F E C T I V E I N F O R M A T I O N A N D D A T A E X C H A N G E O N A V A I L A B L E I N V E N T O R Y , L E A D T I M E S E T C .

L O N G D E L I V E R Y T I M E S , I N C O R R E C T D E L I V E R I E S A N D H I G H I N V E N T O R Y L E V E L S

Other DistributorsKlckner & Co

S T O C K H O L D I N G

Inefficiencies are through stockholding

Earnings are based to a certain extend on intransparencyNo sustainable business model

March 2017

S U P P L I E R S C U S T O M E R SAggregated Demandinformation

POS Data / Analytics

Application Programming Interface

Cumulativequantities

I N D U S T R YP L A T F O R M

Aggregated Supply

information

Other DistributorsKlckner & Co

S T O C K H O L D I N G

3 R D P A R T Y S A L E S - /S E R V I C E - / I O T P L A T F O R M S

Industry 4.0 and others

Goal is the transformation of a classic value-chain into a platform business


03

March 2017

A digital platform provides advantages for all participants


03

March 2017

Suppliers Insufficient utilization of production assets

Customers

Stockholders

Intransparent pricing availability of goods and processes

Inefficient stock-keeping and high inventories in order to provide product availability towards customers

Aggregation and early notification of demand allows optimized production and utilization of asset-intensive production assets

Broad material availability reduces order-to-cash cycle time and higher price transparency allows improved purchasing

Optimized logistics, predictive sales and real-time visibility reduce lead times and accordingly inventories

I N D U S T R YP L A T F O R M

Digital transformation takes place in 3 steps


03

March 2017

Value

Cultural change

Time

Industry platform Open for selected 3rd party

sellers/distributors in 2017 Fully open marketplace with price

comparison on complementary products

Service platform

Digital tools Contract portals Onlineshops Order transparency tools Others

Kloeckner Connect as centralaccess point for customers to make use of various digital toolsand services

Progress

1

2

3

Launch of quick winsIntegration of most promising tools and

upscalingEnabling of further opportunities

Higher value-added strategy further advanced


03 Sales share of higher value-add products and services up from 39% in 2015 to 46% in 2016

Further increase of higher margin business to a sales share of more than 50% planned by 2018

18% Higher value-add

products

28%Higher value-add

services

31% Standard products

23% Conventional

services

A C T U A L 2 0 1 6

>20%

>30%

Contact


Christian PokroppSpokesperson

Tel: 0203-307-2050Fax: 0203-301-5025Email: [email protected]

March 2017

Company presentationDisclaimerAgendaKlckner & Co SE at a glanceEverything from one sourceGlobal reach local presenceSolutions for companies of any kindFull rangeExtensive servicesCurrent shareholder structureManagementAgendaCurrent situationEurope vs. USMarket shares of Klckner & CoAgendaOur strategySteel supply chain is highly inefficient and totally intransparentGoal is the transformation of a classic value-chain into a platform businessA digital platform provides advantages for all participantsDigital transformation takes place in 3 stepsHigher value-added strategy further advanced Contact

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