Klöckner & Co SE - Q2 2017 Results - Press Conference

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  1. 1. Q2 2017 Results Press Conference July 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. Q2 2017 Results | Press Conference | Klckner & Co SE
  3. 3. No.3 1. Highlights and update on strategy 2. Outlook 3. Appendix Agenda Q2 2017 Results | Press Conference | Klckner & Co SE
  4. 4. 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 years 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 | Press Conference | Klckner & Co SE
  5. 5. 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 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 Q2 2017 Results | Press Conference | Klckner & Co SE
  6. 6. No.6 01 Q2 2017 Results | Press Conference | Klckner & 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 Klckner & Co 2020 strategy
  7. 7. No.7 01 Q2 2017 Results | Press Conference | Klckner & Co SE Profit & Loss and Cash Flow (m) Q2 2017 Q2 2016 Variance H1 2017 H1 2016 Variance Sales 1,640 1,517 +123 3,242 2,903 +339 Gross profit 339 362 -23 705 666 +39 Gross profit margin 20.6 23.8 -3.2%p 21.8 22.9 -1.1%p EBITDA 63 72 -9 140 88 +52 EBITDA margin 3.9 4.8 -0.9%p 4.3 3.0 +1.3%p EBIT 41 49 -8 95 41 +54 Financial result -8 -7 -1 -17 -15 -2 EBT 33 42 -9 79 26 +53 Taxes -9 -9 0 -19 -7 -12 Net income 24 33 -9 59 19 +40 Cash flow from operating activities -2 22 -24 -80 27 -107 Free cash flow -17 4 -21 -56 0 -56
  8. 8. No.8 1. Highlights and update on strategy 2. Outlook 3. Appendix Agenda Q2 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% Q2 2017 Results | Press Conference | Klckner & Co SE
  10. 10. No.10 Outlook02 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 | Press Conference | Klckner & Co SE
  11. 11. No.11 1. Highlights and update on strategy 2. Outlook 3. Appendix Agenda Q2 2017 Results | Press Conference | Klckner & Co SE
  12. 12. No.12 Quarterly and FY results03 (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 KlCo 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 | Press Conference | Klckner & Co SE
  13. 13. No.13 Segment performance03 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 693 675 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% 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. Q2 2017 Results | Press Conference | Klckner & Co SE
  14. 14. No.14 Strong balance sheet03 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 Klckner & Co SE less goodwill from business combinations subsequent to May 23, 2013. Comments Assets Equity & liabilities 39% 39% 654 857 897 849 134 151 206 Other current assets Trade receivables Inventories Non-current assets June 30, 2017 3,084 108