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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
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
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
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
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
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
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
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
1,5821,572
Q2
2017
Q2
2016
1,500
1,645
1,602
Q4
2016
1,3971,430
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
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
22.922.823.023.8
22.0
20.4
19.4 20.619.2
• 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
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
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)
No.12
Maturity profile – well-balanced & diversified funding portfolio 02
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
29296
1919
93
241
1
1
15
15 6
631
350
154
315
148
482
306
2017 2018 2019 2020 2021 Thereafter
Convertible Bond
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
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
No.15
Outlook 03
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
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
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
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
693675
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%
Euro
pe
Am
ericas
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
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
897849
134 151206
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
359309
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
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
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
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
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