Klöckner & Co SE - Q1 2017 Results - Press Conference

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  1. 1. Q1 2017 Results Press Conference April 26, 2017 Gisbert Rhl | CEO
  2. 2. No.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, 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 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. Q1 2017 Results | Press Conference | Klckner & Co SE
  3. 3. No.3 1. Highlights and update on strategy 2. Outlook 3. Appendix Agenda Q1 2017 Results | Press Conference | Klckner & Co SE
  4. 4. No.4 Highlights Q1 201701 Sales increased significantly by 15.6% yoy to 1.6bn mainly due to higher price level Shipments with 1.6m to (+1.7 %) slightly above prior years level despite sale of Spanish activities end of January Gross profit went up from 304m in Q1 2016 to 367m supported by increasing prices Consequently gross profit margin increased to 22.9% after 22.0% in Q1 2016 Operating result (EBITDA) of 77m more than quadrupled and slightly above guidance range of 65m to 75m Sales share via digital channels continuously increased from 9% in Q1 2016 to 14% in Q1 2017 Investment in technology startup BigRep designer of the worlds largest 3D printer for series production Maturity profile further improved by extension of syndicated loan facility EBITDA in Q2 2017 to between 60m and 70m EBITDA for FY 2017 expected to increase noticeably Q1 2017 Results | Press Conference | Klckner & Co SE
  5. 5. No.5 Significant increase of EBITDA in Q1 201701 EBITDA impact: Q1 yoy Comments 77 53 16 Other effects -6 One Europe / WIN+ Opex 6 3 Q1 2016 5 Volume Effect Q1 2017 Q1 2017 Results | Press Conference | Klckner & Co SE Price Effect Steel price development HRC We benefit more strongly than in the past from rising market prices due to Increasing use of digital pricing tools Extension of share of value added products and services Change of customer mix by exiting of trader to trader business in Germany and discontinuing low margin big account business in France
  6. 6. No.6 01 Q1 2017 Results | Press Conference | Klckner & Co SE Becker Aluminum Service Center to cover increasing automotive customer demand for light weight Slitting line put into operation with expected sales launch in May Completion of the entire plant including a complementary cut-to-length line with total capacity of 80Tto scheduled for 2018 3D Laser number 7 initiated in Dudley/ UK, which is meanwhile 2nd largest 3D laser center in UK One Europe Organization set into place Additional synergies especially in procurement and logistics Centrally steered implementation of digitalization and higher value-add strategy Already 3m EBITDA impact in Q1 Incremental EBITDA contribution of 10m in 2017 and 30m until 2019 Sales share via digital channels increased from 12% in Q4 2016 to 14% in Q1 2017 Integration of first complementary distributors to industry platform planned for the current quarter Various pilot projects with producers regarding a coordinated approach concerning platform-integration in the US and Europe underway Investment in 3D printer BigRep designs the worlds largest 3D printer for modeling & prototyping in the future for series production KCO plans to use this 3D printers in its European and US site network going forward supporting KCO 2020 strategy Market segment has promising outlook with 20% annual growth rate Digitalization Higher value-add One Europe Further progress of Klckner & Co 2020 strategy
  7. 7. No.7 01 Q1 2017 Results | Press Conference | Klckner & Co SE Profit & Loss and Cash Flow Q1 2017 (m) Q1 2017 Q1 2016 Variance Sales 1,602 1,386 +216 Gross profit 367 304 +63 Gross profit margin 22.9 22.0 +0.9%p EBITDA 77 16 +61 EBITDA margin 4.8 1.2 +3.6%p EBIT 54 -8 +62 Financial result -8 -8 - EBT 46 -16 +62 Taxes -10 +2 -12 Net income 36 -14 +50 Cash flow from operating activities -78 5 -83 Free cash flow -39 -4 -35
  8. 8. No.8 1. Highlights and update on strategy 2. Outlook 3. Appendix Agenda Q1 2017 Results | Press Conference | Klckner & Co SE
  9. 9. No.9 Shipbuilding Segment specific business outlook 201702 Energy industry Real steel demand Europe ~ 1-2% Construction industry Manufacturing, machinery and mechanical engineering, etc. Automotive industry US ~ 3-4% Q1 2017 Results | Press Conference | Klckner & Co SE
  10. 10. No.10 Announced investments in infrastructure and military Lower unemployment rate and tax reduction lead to higher private consumption and to an increasing GDP Consulting team of administration with steel background Positive atmosphere and high investment propensity in the US economy Impact of new administration on our US business02 Q1 2017 Results | Press Conference | Klckner & Co SE Positive impact on steel demand locallocal From USA ~ 93% Imports ~ 7%* We buy and sell local and are seen as a US company Anti dumping measures forced but no impact on KCO due to local sourcing and selling Planned import stop will strengthen the local steel companies as we are seen in the US cause steel prices to increase within the US *KCO, Jan- Mar 2017.
  11. 11. No.11 Outlook02 Q2 2017 Seasonally higher sales EBITDA anticipated to be between 60m and 70m FY 2017 Higher sales anticipated due to better demand and on average higher price level EBITDA expected to rise noticeably compared to the 2016 figure of 196m Q1 2017 Results | Press Conference | Klckner & Co SE
  12. 12. No.12 1. Highlights and update on strategy 2. Outlook 3. Appendix Agenda Q1 2017 Results | Press Conference | Klckner & Co SE
  13. 13. No.13 Quarterly and FY results03 (m) 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) 1,582 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 1,602 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 367 319 329 362 304 297 311 320 310 309 325 1,315 1,237 1,261 1,188 % margin 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. 77 37 71 72 16 2 28 -17 10 33 61 196 24 191 124 % margin 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 54 -4 48 49 -8 -297 5 -44 -15 8 38 85 -350 98 -6 Financial result -8 -10 -8 -7 -8 -12 -12 -13 -12 -13 -14 -33 -49 -59 -73 Income before taxes 46 -14 40 42 -16 -309 -7 -56 -27 -4 24 52 -399 39 -79 Income taxes -10 2 -9 -9 2 45 -2 1 6 1 -8 -14 50 -17 -12 Net income 36 -12 31 33 -14 -263 -9 -55 -22 -4 16 38 -349 22 -90 Minority interests 0 0 0 1 0 -1 0 -1 0 -1 0 -1 -2 0 -6 Net income KlCo 36 -12 31 32 -14 -263 -9 -54 -21 -4 16 37 -347 22 -85 EPS basic () 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 () 0.34 -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. Q1 2017 Results | Press Conference | Klckner & Co SE
  14. 14. No.14 Segment performance03 926 Q4 2016 867 Q3 2016 873 Q1 2016 950 Q2 2016 903 Q4 2015 891 Q3 2015 931 Q2 2015 970 Q1 2015 979 Q1 2017 985 Q1 2017 Q4 2016 883 Q3 2016 891 Q2 2016 963 Q1 2016 870 Q4 2015 919 Q3 2015 986 Q2 2015 1,054 Q1 2015 1,025 49 1112 21 29 Q3 2015 Q2 2015 Q1 2015 7 36 Q3 2016 55 Q2 2016 Q1 2016 Q4 2015 Q1 2017 54 Q4 2016 627 Q2 2016 693 Q1 2016 652 Q4 2015 644 Q3 2015 Q1 2017 657 Q4 2016 583 Q3 2016 705 Q2 2015 675 Q1 2015 682 Q2 2016 554 Q1 2016 516 Q4 2015 537 Q4 2016 515 Q3 2016 539 617 Q1 2017 672 Q1 2015 639 Q2 2015 611 Q3 2015 3030 Q1 2015 7 Q1 2016 11 Q4 2015 3 Q3 2015 14 Q2 2015 13 22 11 Q2 2016 Q1 2017 Q4 2016 Q3 2016 +2.4% +0.7% +13.3% +19.5% EuropeAmericas 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. Q1 2017 R