Commerzbank German Investment Seminar 2017

Transcription

1 Commerzbank German Investment Seminar 2017 New York January 9, 2017 Gisbert Ruehl CEO

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. No.2

3 Agenda 1. Highlights and update on strategy 2. Financials 3. Outlook 4. Appendix No.3

4 01 Highlights Sales decreased yoy by 10.5% to 1.4bn mainly due to lower price level and site closures in Europe as part of the finished restructuring program KCO WIN+ Despite lower sales and volumes gross profit went up from 311m to 329m due to better price environment and margin optimization supported by digital pricing tools Consequently gross profit margin went up significantly to 23.0% after 19.4% in EBITDA of 71m in line with guidance range of 65m to 75m Launch of order transparency tool as further milestone in the digital transformation process Go-ahead given for phase two of major investment in aluminum processing totaling 35m Organization for One Europe in place to integrate European distribution activities Well on track to strongly improved FY EBITDA and to return to positive net income EBITDA forecast for FY narrowed to between 180m and 190m No.4

5 01 Significant increase of EBITDA in and first nine month of EBITDA impact: yoy Market-related GP effect of 29m Results favored by positive market effects on EBITDA of overall 29m in and 81m in 9M Positive price effect of 46m in and 89m in first nine months supported by increased use of digital pricing tools Negative volume effect of 17m in and 8m in first nine months Restructuring Costs (bef. restr.) EBITDA impact: 9M yoy Volume Effect Price Effect Market-related GP effect of 81m 8 89 KCO WIN+ Effect OPEX KCO WIN+ program with EBITDA contribution of 9m in and in total 20m in 9M Effect mainly in Europe through KCO WIN+ related restructuring and optimization measures Full year target already achieved after nine months due to faster than expected implementation of measures 9M Restructuring 9M Costs (bef. restr.) Volume Effect Price Effect KCO WIN+ Effect OPEX 9M No.5

6 01 Further progress of Klöckner & Co 2020 strategy Digitalization Operations Higher value-add Digital pricing tools contributed to significant margin improvement Accelerated growth of sales via onlineshops and contract portals Share of sales generated via digital channels already at 11% in Order transparency tool launched in Germany as further digital solution to make collaboration between customers and Klöckner easier Finished KCO WIN+ restructuring program with an incremental EBITDA contribution of 20m last year already achieved after nine months and another 5m this year Management team for One Europe optimization program appointed to integrate European distribution activities starting at the beginning of 2017 One Europe with an additional EBITDA impact of 30m from 2019 onwards thereof 10m already this year Expansion of the business with 3D laser processing of steel mainly in the UK and Germany Further acquisitions in the fabrication segment with focus on the US intended Go-ahead given for phase two of major investment in aluminum processing, totaling some 35m No.6

7 01 Becker Stahl s investment in processing of aluminum for automotive Automotive aluminum demand Demand driver Service-Center investment Tto 1, , ~ Source: Drucker worldwide, own estimates. China USA Europe Germany Strict CO 2 emissions requirements Reduction of CO 2 emissions from passenger vehicles from ~130g/km to 95g/km in 2020 in European Union Average increase in aluminum by 30-40kg to ca. 180kg per vehicle necessary Wheels, motor block, cylinders, gear components already use aluminum Milled products for chassis, fittings, bumpers and hinges with potential Increasing electromobility Reduction of vehicle weights to extend total driving range Compensate for heavy battery Slitting line (on track) Maximum capacity: 50-60Tto Material dimensions: thickness 0.5-5mm, width max. 2,150mm Products: for body in white especially sheets including trapezoid and round cut Cut-to-length-line (recently approved) Maximum capacity: ~25Tto Material dimensions: thickness 0.5-5mm, width max. 2,150mm Products: interior construction especially strips 35m No.7

8 Agenda 1. Highlights and update on strategy 2. Financials 3. Outlook 4. Appendix No.8

9 02 Shipments and sales Shipments (Tto) Sales ( m) 1,690 1,661 1,645 1,636 1,643 1,675 1,697 1,693 1,577 1,597 1,555 1,535 1,556 1,500 1,456 1,386 1,517 1, % -10.5% -8.7% -5.7% Shipments down yoy due to exit of low margin business Qoq seasonal decrease in Europe and weaker demand for industrial products in the US Sales decreased yoy signifcantly more pronounced than shipments due to lower average sales prices Qoq disproportional decline compared to shipments due to continued price recovery No.9

10 02 Gross profit and EBITDA Gross profit* ( m) / Gross margin* (%) EBITDA*,** ( m) / EBITDA margin*,** (%) Margin stabilized with 23.0% well above the 20 percent mark Qoq slight decline by 0.8%p EBITDA in improved yoy by 41m and remained virtually stable qoq, benefitting from disposal gains of 12m EBITDA margin recovered by 3.1%p yoy to 5.0% (4.1% w/o disposal gains) * Before restructuring cost. ** amounts restated due to the initial application of IFRIC 21 (Levies). No.10

11 02 Segment performance Europe ( m) 8 Comments Europe EBITDA up from 21m before restructuring by 34m to 55m Significant positive price effect ( 19m) KCO WIN+ contributes 8m to EBITDA improvement Actual (reported) Restruct. Actual (before restruct.) Volume Effect Price Effect KCO WIN+ Effect OPEX Actual OPEX includes additional non-recurring gain on sale of 12m Americas ( m) 1-4 Americas EBITDA up by 8m to 22m 14 Actual 15 Volume Effect 26 Price Effect KCO WIN+ Effect OPEX 22 Actual Negative volume effect due to weaker demand for industrial products and also by sale of pipe business in Even stronger positive price effect ( 26m) than in Europe No.11

12 02 71 Cash flow and net debt development Cash flow reconciliation in ( m) Comments Limited seasonal NWC build-up of 32m Other mainly includes disposal gains of 12m as well as changes in other provisions and other operating assets/liabilities of 14m (mainly vendor bonuses) EBITDA Change in NWC Interest Taxes Other Cash flow from operating activities Asset disposals Capex Free cash flow Net financial debt Net financial debt 09/ vs. 06/ ( m) CF from operating activities Capex (net) Other Net financial debt Net financial debt almost stable Increase due to operating cash outflows and finance leases incurred ( 12m) compensated by equity component of new convertible bond ( 18m) issued in No.12

13 02 Maturity profile September convertible bond successfully placed Facility Committed ( m) Drawn amount ( m, IFRS*) FY m Syndicated Loan ABS Europe ABS/ABL USA Promissory Notes 1) Convertible ) Convertible 3) Adjusted equity 1,047 Net debt 438 Gearing 5) 42% Maturity profile of committed facilities & drawn amounts ( m) Bilateral Facilities 4) Total Debt 1, Cash Net Debt *Including interest accrued, excluding deferred transaction costs. 1) Repaid on April 20, from existing cash reserves. 2) Original principal 186m, thereof 161m repaid on December 22, (investor put), 25m repaid on January 12, (issuer cleanup of all bonds that remained outstanding after investor put). 3) Principal 147m, equity component 18m at issuance on September 08,. 4) Including finance lease. 5) Net debt/equity attributable to shareholders of Klöckner & Co SE less goodwill from business combinations subsequent to May 23, Thereafter Syndicated Loan Convertible Bond ABS Europe ABS/ABL USA Bilaterals Left side: committed facilities Right side: drawn amounts (nominal amounts) No.13

14 Agenda 1. Highlights and update on strategy 2. Financials 3. Outlook 4. Appendix No.14

15 03 Outlook Seasonally lower sales expected qoq EBITDA anticipated to be down qoq due to lower shipments FY Lower sales anticipated due to continued exit of low margin business and on average lower price level EBITDA expected to rise significantly to between 180m and 190m Positive net income supported by lower financing expenses and the expected absence of further goodwill impairments No.15

16 Agenda 1. Highlights and update on strategy 2. Financials 3. Outlook 4. Appendix No.16

17 04 Quarterly and FY results ( m) * * FY FY FY 2013 FY 2012** Shipments (Tto) 1,500 1,643 1,556 1,535 1,636 1,645 1,661 1,555 1,690 6,476 6,598 6,445 7,068 Sales 1,430 1,517 1,386 1,456 1,597 1,693 1,697 1,577 1,675 6,444 6,504 6,378 7,388 Gross profit ,237 1,261 1,188 1,288 % margin EBITDA rep % margin EBIT Financial result Income before taxes Income taxes Net income Minority interests Net income KlöCo EPS basic ( ) EPS diluted ( ) * Restated due to initial application of IFRIC 21. ** Restated due to initial application IAS 19 revised No.17

18 Americas Europe 04 Segment performance Shipments (Tto) Sales ( m) EBITDA* before restructuring ( m) % 873 1, ,054 1, % Shipments (Tto) Sales ( m) EBITDA* before restructuring ( m) % % Restructuring costs ( m)** Europe Americas 2 * amounts restated due to the initial application of IFRIC 21 (Levies). ** 4m are reported in HQ in. No.18

19 04 Strong balance sheet 2,841 Assets 2,975 Equity & liabilities 2,975 2,841 Non-current assets Equity 1,077 1,113 39% 36% 39% Inventories Financial liabilities Trade receivables Other current assets Comments Liquidity Equity ratio further healthy at 36% Net debt of 438m Gearing* at 42% Dec 31, Sep 30, NWC increased from 1,128m to 1,197m Pensions Trade payables Other liabilities Dec 31, 285 Sep 30, * Gearing = Net debt/equity attributable to shareholders of Klöckner & Co SE less goodwill from business combinations subsequent to May 23, No.19

20 04 Convertible bond Structure Issuer Klöckner Financial Services S.A., Luxembourg Issue date September 8, Issue size million Denomination 100,000 per bond Shares underlying million shares Maturity September 8, 2023 (7 years) Conversion price initially (27.5% above the reference share price) Investor conversion right At any time (earliest 41 days after issue date) Comments Rebalancing of funding structure Diversification of KCO s funding mix Coupon at 2.00% low cash funding costs Take advantages of favorable market environment Improved maturity profile For general corporate purposes and support our Klöckner & Co 2020 strategy Joint bookrunners BNP Paribas and Credit Suisse Investor put Issuer call Coupon Placement Listing ISIN code After 5y (30 days prior notice period) After 5y, subject to 130% trigger 2.00% p.a. (payable semi-annually on March 8 and September 8) Private placement w/o prospectus (no public offering) Open Market, Frankfurt DE000A185XT1 No.20

21 04 Sales by markets, products and industries Sales by markets Sales by industry 11% France/ Belgium 16% Switzerland 3% 2% NetherlandsSpain <1% 5% Brazil/China UK 38% USA Sales by product 13% Others 5% 6% Miscellaneous Local dealers 7% Household appl./ Consumer goods 12% Automotive industry 37% Construction industry 6% Tubes 24% Germany 7% Aluminum 43% Flat products 33% Machinery/mechanical engineering 9% Quality steel/ Stainless steel 22% Long products As of December 31,. No.21

22 04 Current shareholder structure Geographical breakdown of identified institutional investors 3% Rest of world 6% Rest of EU 3% Switzerland 3% France 4% UK Comments Identified institutional investors account for 72% German investors incl. retail dominate Top 10 shareholdings represent around 52% Retail shareholders represent 21% 46% Germany 35% US As of July. No.22

23 04 Current shareholder structure Voting Rights Announcements according to WpHG (Security Trading Act)* Date of publication Subject to compulsory notification Portion of voting stock 27/12/ Norges Bank 3.04% 09/02/ Swoctem GmbH / Friedhelm Loh 25.25% 04/03/ Franklin Mutual Series Funds 3.07% 18/03/ Franklin Mutual Advisors 5.35% 02/02/2012 Dimensional Holdings Inc. / Dimensional Fund Advisors LP 3.06% *) The table lists all shareholders, whose Klöckner & Co SE voting shares exceed one of the notification thresholds under section 21 clause 1 WpHG, based on notification as of Dec. 27,. No.23

24 04 Products Flat Products Hollow Sections Stainless / Aluminium Long Products Coils No.24

25 04 Services Decoiling / Cutting / Slitting Cutting to Length / Bending Surface treatment Laser cutting / Flame cutting 3D-Laser 3D-Laser 3D-Laser No.25

26 Contact details Christian Pokropp Head of Investor Relations & Corporate Communications Phone: Fax: Internet: Financial calendar March 1, 2017 Annual Financial Statements April 26, 2017 interim statement 2017 May 12, 2017 Annual General Meeting 2017, Düsseldorf July 26, 2017 interim report 2017 October 25, 2017 interim statement 2017