Klöckner & Co SE Q3 2014 Results A Leading Multi Metal Distributor

Klöckner & Co SE
A Leading Multi Metal Distributor
Gisbert Rühl
CEO
Q3 2014 Results
Analysts’ and Investors’ Conference
Marcus A. Ketter
CFO
November 6, 2014
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
Klöckner & Co SE
A Leading Multi Metal Distributor
Gisbert Rühl
CEO
Highlights and update on strategy
01
•
•
•
•
•
•
•
•
Highlights Q3
Steel distribution market remained stable in Europe* but improved significantly in
the US (+5.0%**)
KCO sales went up roughly in line with shipments by 4.7% yoy to €1.7bn
Gross profit improved by 9.9% to €325m, gross margin expansion by 0.9%p to 19.4% yoy
EBITDA of €59m came in at the upper end of guidance range of €50 to 60m
Positive quarterly net income of €15m achieved
Leverage reduced from 3.5x to 2.8x EBITDA yoy
EBITDA in Q4 expected to be in a range between €30 and €40m
EBITDA guidance for the year as a whole narrowed to between €190m and €200m
* Source: Eurometal; distribution shipments in Q3 in Europe yoy.
** Source: MSCI; distribution shipments/ SSC in Q3 in the US yoy.
4
01
Substantial yoy EBITDA-improvement mainly through self-help measures
EBITDA-bridge (€m)
Comments
Q3 yoy
9
36
EBITDA
Q3 2013
Self-help measures:
€12m
5
7
-15
59
•
14
3
Volume
Effect
Price
Effect
GP Effect
Riedo
KCO 6.0
Effect
KCO WIN
Effect
OPEX*
EBITDA
Q3 2014
* Including -€6m pension adjustment NL 2013 and -€4m Riedo.
9M yoy
108
EBITDA
9M 2013
Self-help measures:
€39m
10
29
8
Volume
Effect
19
Price
Effect
•
-31
160
OPEX*
EBITDA
9M 2014
17
GP Effect
Riedo
KCO 6.0
Effect
KCO WIN
Effect
* Including -€13m pension adjustment NL 2013 and -€9m Riedo.
5
Self-help measures contributed
€12m to EBITDA against prior year
in Q3 and €39m ytd
•
EBITDA contribution achieved
through KCO 6.0 amounted to
€7m in Q3 and €29m ytd
•
KCO WIN impact of €5m
in Q3 and €10m ytd
EBITDA margin improved by 1.2%p
to 3.5% in Q3 and by 1.0%p to 3.2%
ytd
Self help measures with an EBITDA-contribution of €39m in the first nine month of
2014
01
KCO 6.0
€51m
2011-2012

€61m
2013
€29m
2014


Total annual EBITDA-impact of ~€150m
from 2014 onwards
€38m
already realized
KCO WIN
2014
€10m

€16m
Total annual EBITDA-impact of ~€50m
from 2015 onwards
€34m
2015
already realized
6
01
Comprehensive transformation initiated
Klöckner & Co 2020
Stabilization
Growth and
optimization
Differentiation
Enabling
activities
Restructuring
Finished by implementation of KCO 6.0
External & internal
growth
External growth with focus on higher value-added business
Internal growth with focus on US market
Operations
Improvements through KCO WIN
Sourcing
Realization of higher scale-effects through expansion of partnerships
with specific suppliers
Products and
services
Broad product range and accelerated expansion of higher valueadded processing and services
Digitalization
Digitalization of supply chain
Management &
pers. development
Increased effort in management capabilities and measurability
of people management
Controlling &
IT systems
Deployment of most modern controlling and IT systems
7
01
Mid-term EBITDA margin target of >5% until 2017
Stabilization
Growth and optimization
Differentiation
> 2.0%
>5%
0.8%
0.2%
2.0%
2013
EBITDA margin
before
restructuring and
one-offs
0.6%
KCO 6.0
(remaining
effects)
Riedo
acquisition
KCO WIN
8
Sourcing,
products and
services,
digitalization
2017
EBITDA margin
Klöckner & Co SE
A Leading Multi Metal Distributor
Marcus A. Ketter
CFO
Financials
02
Shipments and sales
Shipments (Tto)
Sales (€m)
1,847
1,764
1,585
1,646
1,690
1,633
1,617
1,720
1,690
1,633
1,625
1,698
1,680
1,600
1,492
1,455
+4.5%
+4.7%
-1.8%
Q3
2012
•
•
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
1,675
1,572
Q1
2014
Q2
2014
-0.3%
Q3
2014
Q3
2012
•
•
Increase yoy driven by Riedo
Shipments decreased qoq following the usual
seasonal pattern
10
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
yoy increase includes Riedo and market effects
Sales decline qoq less pronounced than
shipments due to higher prices
02
Gross profit and EBITDA margin improvement is keeping momentum
Gross profit* (€m) / Gross margin* (%)
325
EBITDA* (€m) / EBITDA margin* (%)
325
59
56
306
302
45
43
305
303
39
302
40
296
29
19.3 9M
288
3.2 9M
22
18
18.7 FY
2.4 FY
17.5 FY
1.8 FY
Q3
2012
•
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2012
Q3
2014
•
Gross margin up in Q3 by 0.9%p from 18.5%
to 19.4% yoy
•
* Before restructuring costs.
11
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
EBITDA continues to benefit from KCO 6.0
measures and now additionally from KCO WIN
EBITDA margin improved in Q3 from 2.3%
to 3.5% yoy
02
Segment performance (shipments and sales)
Shipments (Tto)
Comments
4.5%
1,690
1,617
•
+6.0%
Europe
Americas
957
903
+2.6%
714
Q3 2013
•
1,675
1,600
+3.4%
1,041
1,006
594
Q3 2013
Europe up by 6.0% mainly due to Riedo acquisition
(+5.7%p)
•
Americas up by 2.6% due to favorable market
development
Q3 2014
4.7%
Americas
•
733
Sales (€m)
Europe
Shipments
+6.8%
Sales
•
•
In Europe up by 3.4% due to Riedo
Americas segment up by 6.8% also impacted by
stronger USD
634
Q3 2014
12
02
Segment performance (gross profit and EBITDA)
Gross profit (€m)
Comments
+9.9%
325
296
Americas
216
197
+10.7%
99
Q3 2013
110
Q3 2014
26
Americas
17
-7
HQ/Consol.
• Gross margin up by 1.1%p to 20.7%
•
Americas
• Gross margin up by 0.6%p to 17.3%
• EBITDA margin up by 1.6%p to 4.5%
+60.8%
36
Europe
• EBITDA margin up by 0.6%p to 3.2%
EBITDA (€m)
Europe
Focus on higher margin business visible in both
segments
•
+9.5%
Europe
•
59
+25.9%
33
+66.5%
29
-3
+52.9%
Q3 2013
Q3 2014
13
02
Cash flow and net debt development
Comments
Cash flow reconciliation in Q3 2014 (€m)
-3
•
-6
31
-23
•
-14
59
58
44
36
EBITDA Change Interest
Q3 2014 in NWC
Taxes
Other
•
Cash
Capex
Free
flow from
cash flow
operating
Q3 2014
activities
Seasonal NWC release reflected in free
cash flow of €44m
“Other” include changes in provisions, in
other operating assets/liabilities as well as
non-cash items
Capex at run-rate level
Development of net financial debt in Q3 2014 (€m)
June 30, 2014
CF from
operating
activities
Capex (net)
Other
557
-14
579
58
September
30, 2014
-22
14
•
Net debt decreased from €579m to
€557m mainly due to positive operating
cash flow driven by NWC release
•
“Other” include -€12m f/x
02
Balance sheet remains strong
Assets
3,595
Inventories
Trade receivables
Liquidity
Other assets
1,166
Equity & liabilities
3,764
1,296
687
Dec 31, 2013
Equity
1,445
40%
883
595
1,147
3,595
3,764
1,463
39%
930
Financial liabilities
911
Pensions
236
286
Trade payables
637
700
Other liabilities
366
385
381
1,204
Dec 31, 2013 Sep 30, 2014
Sep 30, 2014
Comments
•
•
•
•
•
Equity ratio further solid at 39%
Net debt of €557m compared to €325m on Dec. 31, 2013
Gearing* at 39%
Leverage** 2.8x
NWC increased from €1,463m to €1,479m qoq f/x related
15
* Gearing = Net debt/Equity attributable to shareholders of
Klöckner & Co SE less goodwill from business
combinations subsequent to May 23, 2013.
** Leverage = Net debt/EBITDA before restructuring expenses
last twelve months.
Klöckner & Co SE
A Leading Multi Metal Distributor
Gisbert Rühl
CEO
Outlook
03
Segment specific business outlook
Europe
+2%
US
Steel demand
Construction industry
Machinery and mechanical
engineering
Automotive industry
17
+5-6%
03
•
Q4 2014
•
•
•
•
Outlook
Shipments to be lower qoq due to seasonality and weaker business environment in Europe
Declining prices in the US with negative impact on earnings in the Americas Segment
EBITDA expected in a range between €30 and €40m
FY 2014
•
•
•
•
Sales and shipments to be slightly up - also through Riedo acquisition
EBITDA guidance narrowed to between €190m and €200m
Reduction of IDA expense by some €25m to €155m anticipated
Resumption of dividend payments planned for fiscal year 2014
18
Agenda
01
Highlights and update on strategy
02
Financials
03
Outlook
04
Appendix
19
04
Quarterly results and FY results 2011-2014
(€m)
Q3
2014
Q2
2014
Q1
2014
Q4
2013
Q3
2013
Q2
2013
Q1
2013
Shipments (Tto)
1,690
1,720
1,633
1,492
1,617
1,690
1,646
1,585
1,764
6,445
7,068
6,661
Sales
1,675
1,680
1,572
1,455
1,600
1,698
1,625
1,633
1,847
6,378
7,388
7,095
Gross profit
325
325
302
284
296
305
303
298
306
1,188
1,288
1,315
% margin
19.4
19.3
19.2
19.5
18.5
18.0
18.6
18.3
16.6
18.6
17.4
18.5
EBITDA
59
56
45
16
36
43
29
-35
18
124
60
217
% margin
3.5
3.3
2.9
1.1
2.3
2.5
1.8
-2.2
1.0
2.0
0.8
3.1
EBIT
36
33
23
-36
10
17
2
-89
-9
-6
-105
111
-14
-16
-17
-17
-19
-19
-19
-14
-22
-73
-80
-84
Income before taxes
22
17
6
-52
-8
-2
-16
-103
-31
-79
-185
27
Income taxes
-7
-7
-3
-7
-3
-2
1
-19
3
-12
-18
-17
Net income
15
10
3
-59
-11
-4
-16
-123
-29
-90
-203
10
0
0
0
-5
0
0
0
-1
-1
-6
-3
-1
15
10
3
-54
-11
-4
-16
-122
-28
-85
-200
12
EPS basic (€)
0.15
0.10
0.03
-0.54
-0.11
-0.04
-0.16
-1.22
-0.28
-0.85
-2.00
0.14
EPS diluted (€)
0.15
0.10
0.03
-0.54
-0.11
-0.04
-0.16
-1.22
-0.28
-0.85
-2.00
0.14
Financial result
Minority interests
Net income KlöCo
* Restated due to initial application IAS 19 revised 2011.
20
Q4
2012*
Q3
2012*
FY
2013
FY
2012*
FY
2011
04
Recovery continued in both segments
Shipments (Tto)
Sales (€m)
1,018
930
941
903
987
956
957
1,149
839
Europe
908
EBITDA* before restructuring (€m)
1,041 1,017 1,061 1,006
935
1,015
34
1,072 1,041
28
16
+6.0%
+3.4%
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
2012 2012 2013 2013 2013 2013 2014 2014 2014
Shipments (Tto)
Americas
Q3
2012
Q4
2012
Q3
2014
14
Q1
2013
733
592
608
637
608
594
Q2
2013
Q3
Q4
2013 2013
Q1
2014
520
634
557
28
29
Q2
2014
Q3
2014
24
21
677
20
20
16
13
12
653
+6.8%
+2.6%
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
2012 2012 2013 2013 2013 2013 2014 2014 2014
Restructuring costs (€m)
Q2
2014
26
EBITDA before restructuring (€m)
714
677
Europe
Americas
33
698
733
716
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
2012 2012 2013 2013 2013 2013 2014 2014 2014
Sales (€m)
749
746
12
26
32
Q4 2011
Q1 2012
Q2 2012
Q3 2012
10
3
17
-1
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
2012 2012 2013 2013 2013 2013 2014 2014 2014
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q4 2012 Q3 2013 Q4 2013
57
1
2
13
11
21
* 2012: as restated for the initial application of IAS19 revised 2011.
** Including pension release: Q2 2013 €7m, in Q3 2013 €6m and Q4 2013 €1m
and sale of French La Courneuve site €13m.
04
•
•
•
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“
Drawn amount (IFRS)
€m Facility
Q3 2014*
141
62
ABS
579
267
191
Syndicated Loan
360
162
161
Promissory Note
185
188
238
1,702
758
652
0
0
98
186
180
171
1)
Committed lines
FY 2013*
578
Bilateral Facilities
1,213
1200
Committed
360
1000
800
258
600
Total Senior Debt
466
Convertible 2009
Convertible 2010 2)
938
921
Cash
381
595
Net Debt
557
325
Total Debt
1,888
400
186
579
52
157
200
0
*Including interest accrued.
1) Including finance lease.
2) Drawn amount excludes equity component.
22
14
2014
228
133
2015
24
2016
16
2017
38
Thereafter
Bilaterals
Promissory Notes
ABS
US ABL
Syndicated Loan
Convertibles
04
Sales by markets, products and industries
As of December 31, 2013
23
04
Current shareholder structure
Comments
Geographical breakdown of identified
institutional investors
•
•
•
•
As of October 2014
24
Identified institutional investors
account for 59%
German investors incl. retail
dominate
Top 10 shareholdings represent
around 33%
Retail shareholders represent 27%
04
Appendix
Financial calendar 2015
March 5, 2015
Annual Financial Statements 2014
May 7, 2015
Q1 interim report 2015
May 12, 2015
Annual General Meeting 2015, Düsseldorf
August 6, 2015
Q2 interim report 2015
November 5, 2015
Q3 interim report 2015
Contact details Investor Relations
Christian Pokropp, Head of Investor Relations & Corporate Communications
Phone:
+49 203 307 2050
Fax:
+49 203 307 5025
E-mail:
christian.pokropp@kloeckner.com
Internet:
www.kloeckner.com
25
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