Kloeckner & Co Se · XETR:KCO
Kloeckner & — Klöckner & — Shareholder Meeting (May 2015)
19 slides from Kloeckner &'s shareholder meeting presentation, May 12, 2015
Slide 1: Annual General Meeting 2015
Klöckner & Co SE A Leading Multi Metal Distributor Gisbert Rühl Annual General Meeting 2015 CEO May 12, 2015
Slide 2: Disclaimer
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
Slide 3: Turnaround achieved and back to positive net income
01 Turnaround achieved and back to positive net income EBITDA impact (€m) FY 2014 FY 2013 ∆ ∆% Self-help measures: €52m Shipments (in Tto) 6,598 6,445 +153 +2.4 16 1 -45 191 36 Sales 6,504 6,378 +126 +2.0 25 124 26 8 Gross profit 1,261 1,188 +73 +6.1 EBITDA 191 124 +67 +53.3 EBITDA Volume Price GP K
Slide 4: Strong balance sheet and sufficient financing headroom
01 Strong balance sheet and sufficient financing headroom Balance sheet as of December 31, 2014: €3,629m Committed Drawn amount (€m, IFRS) Facility 100 % (€m) Dec 31, 2014* Non-current Syndicated Loan 360 101 30.4% assets 1,103 ABS (Europe, US) 587 221 Equity 39.4% 1,429 Promissory Notes 185 187 Con
Slide 5: Consistently positive development not reflected in the share price
01 Consistently positive development not reflected in the share price 240 • Current earnings development shows the 220 still too high dependency on the 200 fluctuating steel prices 180 • Share price performance with a high correlation to Bloomberg Europe Steel 160 Index 140 • Significantly weaker pe
Slide 6: Still weak steel demand in Europe and high global overcapacities
01 Still weak steel demand in Europe and high global overcapacities Steel demand total (in mt) Overcapacity of steel by region (2014) EU-28 -24% 200 +2% 180 160 CIS 140 ~35 120 Japan 100 NAFTA Europe ~20 ~80 ~20 80 China 60 ~270 40 India 20 ~20 2007 2008 2009 2010 2011 2012 2013 2014 2015e NAFTA Sou
Slide 7: Difficult start in 2015 due to price collapse in the US
01 Difficult start in 2015 due to price collapse in the US at the beginning of the year Steel price development HRC Comments 800 750 • Supply shock due to high imports from 700 China led to the collapse of steel prices 650 in the US in Q1 600 • Customers in Switzerland calling for 550 "Euro-Discount
Slide 8: Price erosion caused significant burdens in Q1
01 Price erosion caused significant burdens in Q1 (€m) Q1 2015 Q1 2014 ∆ ∆% Comments Turnover (in Tto) 1,661 1,633 +28 +1.7 • Sales slightly above the previous year's level mainly due to exchange rate changes and Sales 1,697 1,572 +125 +8.0 acquisitions EBITDA (before IFRIC 21) 17 45 -28 -61.8 • EBI
Slide 9: Outlook 2015
01 Outlook 2015 • Sales to be sequentially up Expectations for Q2 2015 • Significantly higher operating EBITDA expected in a range between €35m and €45m • Sales to be slightly up; negative effect of anticipated lower steel price level to be Expectations for overcompensated by volume growth and curre
Slide 10: Innovation of the business model through Klöckner & Co 2020 growth strategy
01 Innovation of the business model through “Klöckner & Co 2020“ growth strategy Klöckner & Co 2020 1 Digitalization Digitalization of the supply chain from suppliers to customers Differentiation 2 Products and services Accelerated expansion of higher value-add products and services 3 Operations KCO
Slide 11: Digitalization begins with the question how our business could develop
01 Digitalization begins with the question how our business could develop within the next five years 1 Digitalization Today Near future In 5 years 11
Slide 12: Initiatives to digitalize the supply and service chain
01 Based on this vision we initiated various initiatives to digitalize the supply and service chain • Efficient and comfortable ordering process through 1 new webshop Digitalization • Innovative tools such as contract platform create additional added value for customers • Comprehensive EDI connectio
Slide 13: Disruptive innovations as a further element to drive the change
01 Disruptive innovations as a further element to drive the change >1.5% >5% >0.5% 2.9% 2014 EBITDA Incremental Other Effects 2017 EBITDA Disruptive 2020 EBITDA margin innovations (Pricing incl. margin innovations margin KCO WIN + products & services) Incremental innovations Disruptive innovations •
Slide 14: Main precondition for successful digitalization is speed
01 Main precondition for successful digitalization is speed Lean Start-up Approach Continuous feedback loops Idea Realization Pilot Live tests Conception Rollout generation MVP implement. Fast Minimum Business Prototyping Viable Case Product Budget Rollout decision decision 14
Slide 15: Margin enhancement through higher value-add products and services
01 Margin enhancement through higher value-add products and services • Sales share of higher value-add products and services increased in 2014 from 30% to 34% 2 Products and • Further increase of higher margin business to 45% of sales planed until 2017 services • Expansion of investments in higher v
Slide 16: Optimization through KCO WIN with focus on improved pricing
01 Optimization through KCO WIN with focus on improved pricing Measures 3 • Advanced customer segmentation • Structured sales approach Operations Effective • Clear target-setting on all levels with mid- and long-term development of accounts salesforce • Sales performance tracking and regular perform
Slide 17: Acceleration of profitable growth through external & internal growth
01 Acceleration of profitable growth through external & internal growth • Regional growth focus on US due to mid- to long-term better outlook External & internal 4 • Continuing strong growth of steel demand driven by automotive and recovery of growth construction • External growth in high-margin act
Slide 18: Mid-term EBITDA margin target of >5% until 2017
01 Mid-term EBITDA margin target of >5% until 2017 > 0.5% >5% > 0.5% >1% 2.9% 2014 Pricing Products Digitalization 2017 EBITDA incl. remaining & services EBITDA margin KCO WIN effects margin 18
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