Klöckner & Co SE

EANS-News: Klöckner & Co SE in 2011: turnover and sales rise sharply, net income slightly positive

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annual report


Duisburg (euro adhoc) - •       Turnover rises sharply by 25.4% to 6.7 million
tons and sales by 36.5% to EUR7.1 billion supported by acquisitions

•       EBITDA declines by EUR21 million, from EUR238 million to EUR217 million 
•       Net income at EUR10 million, down significantly on the prior-year figure
of EUR80 million due to depreciation, amortization and interest charges
increased by acquisitions and a higher tax rate
•       Basic earnings per share at EUR0.14 compared with EUR1.17 a year earlier
•       "Klöckner & Co 2020" strategy implemented systematically with two
significant acquisitions: Macsteel Service Centers USA and Frefer in Brazil
•       Immediate response to the economic slowdown with an action plan
•       Successful capital increase with net proceeds of EUR516 million
Outlook for 2012:
•       Turnover and sales expected to rise despite adverse economic conditions
in Europe due to the expansion of activities in North America 
•       Although the uncertain economic environment means it is currently
impossible to issue a reliable earnings forecast, the comprehensive action plan
in Europe together with growth in the US should enable an improvement in
operating income


Duisburg, March 7, 2012 - Supported by the acquisitions of Macsteel Service
Centers USA and Frefer, turnover and sales rose sharply in fiscal 2011, enabling
the Company to lift sales above EUR7 billion for the first time in its more
recent history. Its earnings development during the year was non-uniform,
however. While first-quarter operating income was significantly higher year on
year, earnings momentum then slowed noticeably in subsequent quarters as the
economy continued to cool. The worsening sovereign debt crisis in Europe and the
resulting uncertainty were primary contributors to the economic slowdown. 

Gisbert Rühl, Chairman of the Management Board of Klöckner & Co SE: "While, in
the first half of 2011, we systematically implemented our `Klöckner & Co 2020´
growth strategy, acquiring Macsteel Service Centers in the USA and Frefer in
Brazil, the focus in the second half of the year was on measures to increase
profitability in response to the cooling economy."

Turnover and sales rise sharply, net income slightly positive
Klöckner  &  Co lifted turnover by 25.4 % in fiscal 2011 to 6.7 million tons.
This was due primarily to the acquisitions it completed, although turnover in
the USA also increased significantly after adjustment for acquisitions. In
Europe, turnover went up by 5.5%. In the Americas segment, it almost doubled due
to the acquisition of Macsteel Service Centers USA and Frefer in Brazil.
Adjusted for the acquisitions in 2010 and 2011, turnover was up year on year by
1.3% in Europe, 14.6% in the Americas and 4.6% for the Group as a whole.
Overall, due to higher prices, sales grew at a faster pace than turnover,
climbing by 36.5% to EUR7.1 billion. Without the acquisitions in 2010 and 2011,
sales growth would have been 17.1%. 
Operating income (EBITDA) was EUR21 million down on the prior-year figure of
EUR238 million at EUR217 million. EBIT and earnings before taxes (EBT) were
therefore EUR111 million (2010: EUR152 million) and EUR27 million (2010: EUR84
million) respectively. Net income dropped from EUR80 million to EUR10 million.
In addition to the decline in EBITDA, this was due primarily to depreciation,
amortization and interest charges increased by acquisitions and a higher tax
burden. Basic earnings per share were EUR0.14 compared with EUR1.17 a year
earlier.

Financial headroom further increased and fine-tuned 
The increase from EUR1,017 million to EUR1,534 million in funds tied up in net
working capital was also driven primarily by the acquisitions. Net financial
debt increased from EUR137 million in 2010 to a total of EUR471 million.
Expressed as a percentage of equity, however, net financial debt remained at a
low level, resulting in a gearing of 29%. 
The Company strengthened its financing position and balance sheet through a
successful capital increase with net proceeds of EUR516 million. In spite of the
acquisitions and resulting increase in debt, the equity ratio rose from 37% to
39%, while total assets climbed to EUR4,706 million. In addition, the Company
once again increased its financial headroom by issuing promissory notes and
extended the term of central financing instruments. The Group therefore has
access to facilities of EUR2.7 billion in total, only 55% of which have
currently been used. 

"Klöckner & Co 2020" strategy: two major acquisitions in the first half of the
year, profitability action plan launched in second half of the year
In 2011, Klöckner & Co continued to systematically implement "Klöckner & Co
2020", the long-term growth strategy presented in the fall of 2010: By acquiring
Macsteel Service Centers USA and a majority interest in Frefer in Brazil as well
as by opening a first steel service center in China, it substantially increased
the proportion of service center business within the Group, significantly
expanded its market position in the USA and made its entry into attractive
emerging markets. 
The Company responded immediately to the deteriorating economic environment in
the second half of the year by initiating a further action plan to increase
profitability. Alongside cuts in administration costs and sales overheads, which
are to be achieved primarily by reducing headcount by at least 6%, the plan
centers on structural changes, including the discontinuation of insufficiently
profitable business activities. 

Outlook for 2012: increase in share of sales generated in North America to have
positive effects
Klöckner & Co expects turnover and sales to rise in 2012, particularly as a
result of the expansion of its activities in North America. In the Europe
segment, turnover and sales will be depressed by the generally anticipated
decline in economic output. For the Americas segment, the Company anticipates
further robust growth in gross domestic product, leading to a rise in steel
turnover. Earnings in the Americas segment are also expected to show a
significant improvement, while the measures to increase profitability mainly in
Europe are aimed at cushioning against the negative impact of a decline in
turnover. 
Gisbert Rühl: "2012 will be no less challenging than 2011. Although it is
currently impossible to issue a reliable forecast for the full year in light of
the uncertain economic environment, the timely expansion of our activities in
Americas and our comprehensive profitability action plan should enable us to
increase turnover, sales and operating income in 2012."


Further inquiry note:
Dr. Thilo Theilen
Leiter Investor Relations
Telefon: +49 (0)203 307 2050
E-Mail: thilo.theilen@kloeckner.de

end of announcement                               euro adhoc 
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company:     Klöckner & Co SE
             Am Silberpalais 1
             D-47057 Duisburg
phone:       +49(0)203-307-0
FAX:         +49(0)203-307-5000
mail:     info@kloeckner.de
WWW:      http://www.kloeckner.de
sector:      Metal Goods & Engineering
ISIN:        DE000KC01000
indexes:     CDAX, Classic All Share, Prime All Share
stockmarkets: free trade: Berlin, München, Hamburg, Düsseldorf, Stuttgart,
             regulated dealing/prime standard: Frankfurt 
language:   English
 



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