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Charts accompanying the FY2013 Analyst Conference for investors and analysts on March 6, 2014 Press Release: http://kloeckner.com/en/press-releases-4865.php Read full report at http://kloeckner.com/global/data/Kloeckner_Co_AnnualReport_2013.pdf (5,2MB)
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Klöckner & Co SE
A Leading Multi Metal Distributor
FY 2013 Results
Analysts’ and Investors’ Conference
CEO
Gisbert Rühl
March 6, 2014
CFO
Marcus A. Ketter
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
Highlights and update on strategy
CEO
Gisbert Rühl
Highlights and update on strategy 01
Financials
Outlook
Appendix
02
03
04
Agenda
4
Improved results despite overall weaker markets due to self-help measures
• Steel markets once again with disappointing development in 2013; steel distribution market
declined by 7% in Europe and was only stable in the US
• Turnover decreased by 8.8% to 6.4m To also due to restructuring measures (-4.4%p) and
further reduction of commodity business
• Sales additionally impacted by lower price level down by 13.7% to €6.4bn
• Gross profit before restructuring costs declined significantly less than sales by 8.0%. Gross
profit margin consequently improved by 1.2%p to 18.7%
• Improvement of EBITDA before restructuring from €137m to €150m includes €11m due to sale
of property in France in Q4
• FCF generation of €107m mainly as a result of strict NWC-management. Net debt consequently
down from €422m at the end of 2012 to €325m
• Restructuring program KCO 6.0 finalized
• Implementation of KCO WIN measures on track
• Acquisition of Riedo supports strategy to increase processing
01
5
Negative market impact again overcompensated in Q4 01
-23
KCO 6.0 EBITDA-impact
• In Q4 measures contributed additional
€18m to EBITDA against prior year,
FY €61m
• Cost cuts achieved trough KCO 6.0
amounted to €24m in Q4, FY €84m
• Negative volume and price effects of
€9m in Q4 overcompensated by €18m
positive KCO 6.0 effects
• Negative volume and price effects
FY of €78m for the most part
compensated by €61m positive
KCO 6.0 effects
Comments Q4
6
FY Market related GP effect: -€9m
Restructuring
charges
Net KCO 6.0 effect:
€18m
22
-35
24
EBITDA
Q4 2013
40
16
OPEX
9
Restr.
costs
-57
EBITDA
bef. restr.
Q4 2012
KCO
6.0 Cost
Effect
24
Price
Effect
33
Volume
Effect
KCO 6.0
GP Effect
-6 -3
EBITDA
Q4 2012
-6
137
60
34
-23
124
47
26
EBITDA
FY 2012
-45
Volume
Effect
-33
Price
Effect
KCO 6.0
GP Effect
84
KCO
6.0 Cost
Effect
81
OPEX
150
EBITDA
FY 2013
EBITDA
bef. restr.
FY 2012
Restr.
Costs
-77
€4m
Market related GP effect: -€78m
Net KCO 6.0 effect:
€61m
42
Restructuring program KCO 6.0 fully implemented 01
Measures
• Total headcount reduction of >2,200 ~ 1/5 of total workforce
• Total site closures 70 ~1/4 of total sites
• Total cost reduction of €174m (€131m realized)
• Total annual EBITDA-impact of ~€150m (€112m realized)
• Reduction of NWC by €133m (€106m realized)*
* More customers retained than expected
2013
2014
€51m
already realized
€61m
€41m
Total annual EBITDA-impact of ~€150m
2011-2012
7
~
~
Additional improvement potential through KCO WIN 01
Measures
• Effective sales force management (structured sales-approach, advanced customer segmentation, specific target
setting, cross-selling, tracking, incentive-schemes, regular performance reviews)
• Improved pricing (price guidance, avoid leakage, systematic review)
• Effective sourcing and logistics (bundling, bonus schemes)
8
2014
2015 €30m
Total annual EBITDA-impact of ~€50m
€20m
Further implementation of “Klöckner & Co 2020” strategy currently focused on
operational improvements through KCO WIN and differentiation 01
9
Enabling
activities
Differentiation
Growth and
optimization
• External growth with focus on higher value-added processing
• Internal growth with focus on US market
• Focus on KCO WIN
Broad
product range
Higher value-
added processing
Advanced tools &
systems
External &
internal growth
Operations
Management &
personnel
development
Controlling &
IT systems
• Providing a broad range of steel and metal products through
widespread network structure and not only from a single site
• Expansion of higher value-added processing business like 3d tube laser
and flat bed laser etc.
• Pushing forward innovations and extension of our services
• Strengthen the understanding, contribution and achievement of individual
performance to support the business model
• Identify, develop & retain potentials to ensure growth and sustainability within
our business
• Global collaboration and state-of-the-art controlling, accounting and treasury
systems
Acquisition of Riedo supports strategy to increase processing 01
10
Oberbipp Eschlikon
Heimberg
Switzerland
• Riedo is a leading processor of reinforcement steel in
Switzerland
• Sales of €140m in 2013
• Highly profitable: EBITDA-margin even higher than Becker
Stahl-Service
• ~180 employees in three state of the art sites
• Extensive value added product offering with highly automated
rebar processing and on-site delivery
• Main customer segment: stable growing Swiss construction
industry
• Acquisition highly accretive
• Purchase price of 5.6x EV/EBITDA before and 3.9x after
higher single-digit million € synergies
• Taking into account that necessary low- to mid-double digit
investments for upgrading and consolidating existing sites
could be avoided by closing the respective sites and
transferring the business to Riedo sites, multiple will be at 3.0x
EV/EBITDA
• Acquisition will immediately be earnings accretive, also
because no meaningful integration charges are expected
• Riedo will be most likely consolidated in the beginning of the
2nd quarter 2014
Riedo as perfect strategic fit to Swiss subsidiary Debrunner Acifer 01
11
• Riedo is a perfect complementary fit
• Extension of geographical reach, customer coverage and
products
• Strengthening leading market position of KCO for
reinforcement steel and systems in Switzerland
• Consolidation/closure of two Debrunner Acifer sites
• Outlook for construction in Switzerland remains
positive
• The construction market is expected to show a steady
growth 2014-2019 with a CAGR of 1.4%*
• Civil engineering is expected to outgrow building
construction (CAGR 2012-2019 of 2.2% vs. 1.2%)*
• Main drivers for further growth are
• Further solid economic and population growth
• Ongoing urbanization/mobility mega trend requiring
new infrastructure
• Increase of public investments in both building and civil
engineering sector (e.g. new hospitals, schools, etc.)
• No/low public debt levels
• Low interest rates
Debrunner Acifer
Riedo
Switzerland
Sites to be consolidated * Source: BAKBASEL.
Klöckner & Co SE
A Leading Multi Metal Distributor
Financials CFO
Marcus A. Ketter
Highlights and update on strategy 01
Financials
Outlook
Appendix
02
03
04
Agenda
13
1,739
1,945 1,964 1,847
1,633 1,625 1,698 1,600
1,455
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
1,636
1,857 1,863 1,764
1,585 1,646 1,690 1,617 1,492
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Turnover and sales 02
Sales (€m) Turnover (Tto)
• FY: 6,445 Tto vs. 7,068 Tto (-8.8%)
• qoq decline reflecting seasonal slowdown and
restructuring measures
• FY: €6,378m vs. €7,388m (-13.7%)
• Average prices per ton further decreased into Q4
but started to turn
-5.8%
-7.7%
-10.9%
-9.0%
14
EBITDA* (€m) / EBITDA-margin* (%)
Gross profit and EBITDA 02
Gross profit* (€m) / Gross-margin* (%)
• FY 2013 €1,192m (GM: 18.7%) vs. FY 2012 €1,295m
(GM: 17.5%)
• Gross profit margin already significantly improved
• FY 2013 €150m (EBITDA-margin 2.4%)
vs. FY 2012 €137m (EBITDA-margin 1.8%)
* Before restructuring costs
15
307
344 344
306 302 303 305 296 288
17.6 17.7
17.5
16.6
18.5 18.6
18.0
18.5
19.8
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
+>1%p 24
47 50
18
22
29
43
39 40
1.3
2.4 2.5
1.0
1.3
1.8
2.5 2.4
2.7
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
18.7 FY
17.5 FY
XX
15
Q2 yoy
-8
Q1 yoy
-18
EBITDA
2012 before
restructuring
137
EBITDA
2013 before
restructuring
150
Q4 yoy
18
12
6
Q3 yoy
21
6
Turnaround started in Q3 02
16
• EUR -€8m
• AMX -€8m
• HQ -€2m
• EUR -€15m
• AMX -€2m
• HQ +€2m
One-off
• Pensions ODS
+€7m
• EUR +€7m
• AMX +€8m
One-off
• Pensions
ODS +€6m
• EUR +€6m
• AMX -€3m
• HQ +€3m
One-offs
• Pensions ODS
+€1m
• Gain
La Courneuve
+€11m
7
[thereof f/x effects -€3.2m]
-€15m
one-time effects
(€m)
IDA restruct.
-21
EBITDA
reported
124
OPEX
restruct.
IDA*
-182
-79
EBT One-offs
1,188 25 -22
OPEX
-1,067
Gross profit
-4
EBT effect: €-22m
EBT impacted by restructuring and material one-offs 02
17
• Pensions
ODS
+€14m
• Gain on sale
La
Courneuve
+€11m
• Personnel
cost -€ 15m
• Other -€ 7m
• Impairments
-€24m
• Reversal
Frefer Put
Liability
+€3m
*IDA = Interest, depreciation and amortization
(€m) S Restructuring costs: €-47m
S Material one-offs: €+25m
Cash flow and net debt development 02
Cash flow reconciliation in FY 2013 (€m)
• NWC releases boosted free cash
flow
• Net Capex of €36m (net of cash-in of
divestments of €21m)
• “Other” include changes in other
operating assets and liabilities and
non-cash items
Comments
36
Development of net financial debt FY 2013 (€m)
18
107143
163
124
Change
in NWC
-52
Interest EBITDA
2013
-17
Other Cash out
for
Restruct.
Provisions
-36
La
Courneuve
and
Pensions
NL
-25 -26
Cash
flow from
operating
activities
Capex
(net)
-24
Free
cash flow
2013
Taxes
325
Other
-10
Dec 31, 2013
CF from
operating
activities
-36
Capex (net)
143
Dec 31, 2012
422
• Net debt significantly down from
€422m at the end of 2012 to €325m
• Main driver: strong free cash flow
(€107m) resulting from NWC
release
• “Other” include fx (€3m) and
interest (€-9m)
• Equity ratio further solid at 40%
• Net debt of €325m
• Gearing** at 23%
• NWC decreased from €1,407m to €1,216m yoy
* As restated for the initial application of IAS 19 rev. 2011.
Strong balance sheet 02
** Gearing = Net debt/Equity attributable to shareholders of
Klöckner & Co SE less goodwill from business
combinations subsequent to May 23, 2013.
Comments
19
Assets
610 595
787 687
Liquidity
Other current assets
Trade receivables
Inventories
Non-current assets
Dec 31, 2013
3,595
170
1,166
977
Dec 31, 2012*
3,880
122
1,254
1,107
634 637
252250110 184
727914
Current financial liabilities
Trade payables
Non-current financial liabilities
Equity
Dec 31, 2013
3,595
1,445
Dec 31, 2012*
3,880
1,502
Other non-current liabilities 470
Other current liabilities
350
Equity & liabilities
39% 40%
Klöckner & Co SE
A Leading Multi Metal Distributor
Outlook CEO
Gisbert Rühl
General and segment specific business outlook 03
GDP
Construction industry
Automotive industry
Apparent steel demand
Machinery and mechanical
engineering
Europe USA
+1-2% +2-3%
+1-2% +3-4%
21
Outlook
• Q1 2014
• Turnover to be sequentially up in Q1
• EBITDA in Q1 expected to come in between €40-50m
• FY 2014
• Turnover and sales to be slightly up; decline through restructuring measures expected to be
overcompensated by volume growth in remaining sites
• EBITDA to be significantly up compared to last year`s figure before restructuring driven by
€41m KCO 6.0 and €20m KCO WIN contribution
• Positive net income expected
• Return to dividend payment intended for fiscal year 2014
03
22
Highlights and update on strategy 01
Financials
Outlook
Appendix
02
03
04
Agenda
23
Quarterly results and FY results 2009-2013 04
24
(€m) Q4
2013
Q3
2013
Q2
2013
Q1
2013
Q4
2012* Q3
2012*
Q2
2012*
Q1
2012*
Q4
2011
FY
2013
FY
2012*
FY
2011
FY
2010
Turnover (Tto) 1,492 1,617 1,690 1,646 1,585 1,764 1,863 1,857 1,636 6,445 7,068 6,661 5,314
Sales 1,455 1,600 1,698 1,625 1,633 1,847 1,964 1,945 1,739 6,378 7,388 7,095 5,198
Gross profit 284 296 305 303 298 306 340 344 307 1,188 1,288 1,315 1,136
% margin 19.5 18.5 18.0 18.6 18.3 16.6 17.3 17.7 17.6 18.6 17.4 18.5 21.9
EBITDA 16 36 43 29 -35 18 33 44 14 124 60 217 238
% margin 1.1 2.3 2.5 1.8 -2.2 1.0 1.7 2.3 0.8 2.0 0.8 3.1 4.6
EBIT -36 10 17 2 -89 -9 -24 18 -18 -6 -105 111 152
Financial result -17 -19 -19 -18 -14 -22 -18 -25 -21 -73 -80 -84 -67
Income before taxes -52 -8 -2 -16 -103 -31 -42 -8 -39 -79 -185 27 84
Income taxes -7 -3 -2 1 -19 3 3 -4 12 -12 -18 -17 -4
Net income -59 -11 -4 -16 -123 -29 -39 -12 -27 -90 -203 10 80
Minority interests -5 0 0 0 -1 -1 0 1 -1 -6 -3 -1 3
Net income KlöCo -54 -11 -4 -16 -122 -28 -39 -11 -27 -85 -200 12 78
EPS basic (€) -0.54 -0.11 -0.04 -0.16 -1.22 -0.28 -0.39 -0.11 -0.27 -0.85 -2.00 0.14 1.17
EPS diluted (€) -0.54 -0.11 -0.04 -0.16 -1.22 -0.28 -0.39 -0.11 -0.27 -0.85 -2.00 0.14 1.17
* Restated due to initial application IAS 19 revised 2011.
602
722 727 698
592 608 637
594
520
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
646
752
766
746
677
716
749
714
653
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
1,137 1,223 1,237
1,149
1,041 1,017 1,061
1,006 935
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
990
1,105 1,097 1,018
908 930 941 903
839
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Both regions recovering from their profitability lows 04 E
uro
pe
A
mericas
-7.5%
-3.6% -12.2%
-10.1%
25
Turnover (Tto) Sales (€m) EBITDA* before restructuring (€m)
Turnover (Tto) Sales (€m) EBITDA before restructuring (€m)
* 2012: as restated for the initial application of IAS19 revised 2011.
Restructuring costs (€m) Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q3 2013 Q4 2013
Europe 10 3 17 -1 57 13
Americas 1 2 11 ** Including pension release: Q2 2013 €7m, in Q3 2013 €6m and Q4 2013 €1m
and sale of French La Courneuve site €13m.
22 22
35
12
16 14
28** 26**
34**
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
13
29
22
12
16
21 20 20
13
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Segment performance Q4 2013 04
26
(€m) Europe Americas HQ/Consol. Total
Turnover (Tto)
Q4 2013 839 653 1,492
Q4 2012 908 677 1,585
Δ % -7.5 -3.6 -5.8
Sales
Q4 2013 935 520 1,455
Q4 2012 1,041 592 1,633
Δ % -10.1 -12.2 -10.9
EBITDA
Q4 2013 22 2 -8 16
% margin 2.4 0.4 1.1
Q4 2012 -38 15 -12 -35
% margin -3.7 2.6 -2.2
Δ % EBITDA 156.6 -87.0 145.7
Balanced maturity profile December 2013 04
27
Maturity profile of committed facilities and drawn
amounts (€m)
€m Facility Committed Drawn amount
Q4 2013* FY 2012*
Bilateral Facilities 1) 536 62 98
Other Bonds 0 0 9
ABS 560 191 161
Syndicated Loan 360 161 161
Promissory Note 2) 235 238 348
Total Senior Debt 1,691 652 777
Convertible 2009 3) 98 98 92
Convertible 2010 3) 186 171 164
Total Debt 1,975 921 1,033
Cash 595 611
Net Debt 325 422
€m Q4 2013
Adjusted equity 1,430
Net debt 325
Gearing 4) 23%
*Including interest
1) Including finance lease
2) Redemption of €108m of promissory notes, of which €34m early redemption in Q4 2013
3) Drawn amount excludes equity component
4) Net debt/Equity attributable to shareholders of Klöckner & Co SE less goodwill from business combinations
subsequent to May 23, 2013
5) Incl. Swiss facilities of €184m which are automatically renewed on a yearly basis Left side: committed facilities Right side: drawn amounts
50 50
52 52
133
228 49
9898142
200
48 236
44
9
8
8
10
31
2015
287
179
2014
376 349
160
2016
864
133
360
360
11
248
Thereafter
151
2017
444
Syndicated loan Promissory notes ABS Bilaterals
5)
US ABL
186 186 186
Convertibles
Comments
Balance sheet as of December 31, 2013 04
28
(€m) December 31, 2013 December 31, 2012*
Non-current assets 977 1,107
Inventories 1,166 1,254
Trade receivables 687 787
Other assets 170 122
Cash & Cash equivalents 595 610
Total assets 3,595 3,880
Equity 1,445 1,502
Total non-current
liabilities 1,077 1,384
thereof financial liabilities 727 914
Total current liabilities 1,073 994
thereof trade payables 637 634
Total equity and
liabilities 3,595 3,880
Net working capital 1,216 1,407
Net financial debt 325 422
Shareholders’ equity:
• Healthy at 40%
Financial debt:
• Gearing at 23%
• Gross debt of €0.9bn and
cash position of €0.6bn
result in a net debt position
of €325m
* As restated for the initial application of IAS19 revised 2011.
Profit & loss 2013 04
(€m) FY 2013 FY 2012
Sales 6,378 7,388
Gross profit 1,188 1,288
Personnel costs -579 -659
Other operating expenses (net) -485 -569
EBITDA 124 60
Depreciation & Amortization -130 -165
EBIT -6 -105
Financial result -73 -80
EBT -79 -185
Taxes -12 -18
Net income -90 -203
Minorities -5 -3
Net income attributable to KCO shareholders -85 -200
29
Sales by markets, products and industries 04
30
As of December 31, 2013
Current shareholder structure 04
31
Geographical breakdown of identified
institutional investors
Comments
• Identified institutional investors
account for 53%
• German investors incl. retail
dominate
• Top 10 shareholdings represent
around 26%
• Retail shareholders represent 27%
As of January 2014
Appendix 04
32
Financial calendar 2014
May 8, 2014 Q1 interim report 2014
May 23, 2014 Annual General Meeting 2014, Düsseldorf
August 7, 2014 Q2 interim report 2014
November 6, 2014 Q3 interim report 2014
Contact details Investor Relations
Christian Pokropp, Head of Investor Relations & Corporate Communications
Phone: +49 203 307 2050
Fax: +49 203 307 5025
E-mail: [email protected]
Internet: www.kloeckner.com
Our Symbol
the ears
attentive to customer needs
the eyes
looking forward to new developments
the nose
sniffing out opportunities
to improve performance
the ball
symbolic of our role to fetch
and carry for our customers
the legs
always moving fast to keep up with
the demands of the customers