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Klöckner & Co SE

EANS-News: Klöckner & Co SE: Significant improvement in sales volumes, sales and earnings; Full-year guidance reaffirmed; Strategy Klöckner & Co 2020 presented

Duisburg (euro adhoc) -

  Corporate news transmitted by euro adhoc. The issuer/originator is solely
  responsible for the content of this announcement.
quarterly report
• Sales volumes increased 26.7% to 4.0
million tons* • Sales reached EUR3.9 billion, an increase of about 
29.4%* • Operating income (EBITDA) increased by EUR341 million to 
EUR190 million* • Net income increased by EUR261 million to EUR63 
million* • Earnings per share of EUR0.92 compared to - EUR4.16* • 
Guidance for 2010 reaffirmed: EBITDA of more than EUR200 million and 
sales growth higher than 25% including acquisitions • Strategy 
Klöckner & Co 2020 presented with targets of doubling sales volumes 
in five years and tripling or quadrupling them by 2020 * Figures are 
for the first nine months compared to the prior year period
Duisburg, November 10, 2010 - In the first nine months, Klöckner & Co
benefited significantly from the economic recovery, cost-cutting 
measures and the completion of its acquisitions. In the first nine 
months sales increased by 29.4% to around EUR3.9 billion, while sales
volumes increased by 26.7% to 4.0 million tons and operating profit 
(EDITDA) improved by EUR341 million to EUR190 million, compared to 
the previous year.
Gisbert Rühl, Chairman of the Management Board of Klöckner & Co SE: 
"Even though the economic recovery has slowed somewhat since the 
summer, we continue to benefit from the continuing strong capacity 
utilization in the automotive industry, and the pickup of demand from
the machinery and mechanical engineering industry. Whereas for the 
construction industry there are no signs for a substantial recovery 
yet. Against a background of a cumulative operating profit of EUR190 
million, we can also confirm our full-year EBITDA guidance of more 
than EUR200 million, along with sales growth of 25% including 
acquisitions. This will be then also the base for resuming dividend 
payments."
Sales volumes, sales and earnings improved significantly compared to 
the prior year Sales volumes rose overall by 26.7% to 4.0 million 
tons in the first three quarters. Sales volumes in Europe rose by 
30.1% supported by two acquisitions and sales volumes in North 
America increased by 15.5%.
Sales in the first nine months of 2010 amounted to around EUR3.9 
billion, a 29.4% increase over the period for the previous year.
Nine-month EBITDA improved significantly, increasing from -EUR151 
million to +EUR190 million, mainly driven by higher gross profits and
ongoing cost cutting measures. Earnings before interest and taxes 
(EBIT) showed a similar improvement to EUR127 million, and 
consolidated earnings before taxes (EBT) rose to EUR79 million. 
Overall nine-month net income of EUR63 million was achieved after a 
loss of -EUR198 million in the previous year. The basic earnings per 
share were EUR0.92, compared to a loss of -EUR4.16 in the previous 
year.
Balance sheet still solid despite acquisitions and increased net 
working capital
Net financial debt at the end of the third quarter rose to EUR233 
million (2009: -EUR150 million) due to acquisitions of the Becker 
Stahl-Service Group in Germany and the Bläsi AG in Switzerland at the
beginning of 2010 and the business related buildup of net working 
capital. The equity ratio stood at 37% vs. 41%, and the net financial
debt to equity ratio (gearing) was 19% after -14% at the end of 2009.
Strategy Klöckner & Co 2020 with ambitious growth targets presented 
The Company presented its new growth strategy Klöckner & Co 2020 in 
October. The upheaval created by the financial crisis and the 
resulting changes in economic conditions made it necessary to adjust 
the strategy.
The altered situation results in steel consumption rates which will 
be significantly below their pre-crisis levels in industrialized 
countries for years after the drastic collapse in 2009, while 
emerging markets have been able to continue along at their robust 
growth rates with no noticeable drop. The updated strategy is based 
on the following four strategic focus areas and highlights prospects 
and guidelines for the next ten years:
1. External growth: Klöckner & Co responds to weak growth in its 
European core market by focusing on companies whose products, 
services and customer segments have higher margins. The Company will 
significantly expand its market share in North America also through 
larger acquisitions. Long term, the high growth rate shall be ensured
by entering into emerging markets.
2. Organic growth: The basic economic conditions in core markets of 
Europe and North America have changed considerably. Klöckner & Co is 
going to face tough competition for its share of a considerably 
smaller market, which requires an increased focus on customer needs 
to help gain market share with tailormade solutions. In addition, the
product portfolio will be further expanded to include higher-margin 
products and also processing services are going to be increased.
3. Business optimization: For a global distributor such as Klöckner &
Co, optimized, harmonized processes are a decisive success factor and
a way of differentiating from the competition. Therefore, highly 
efficient procurement, logistics and IT will continue to be developed
and given high priority.
4. Personnel and management development: As a service company, one of
the main prerequisites for implementing the growth ambitions will be 
to develop its employees and its management. Therefore, the area will
be re-established currently.
Gisbert Rühl: "By focusing on these four main areas, we want to 
develop Klöckner & Co into the first global multi metal distributor. 
Our ambitious growth targets include doubling sales volumes in the 
next five years and tripling or quadrupling them by the year 2020."
Outlook for the full-year 2010 The significant rise in second-quarter
steel demand was driven mostly by re-stocking and declined during the
third quarter as the inventory effect failed to recur. Demand trends 
among key customer industries still remained inconsistent. The 
automotive related business, especially via Becker Stahl-Service is 
benefiting significantly from advanced orders from the automotive 
industry indicating a solid utilization at least until year´s end. 
The situation in machinery and mechanical engineering industry is 
similar. No substantial recovery can be seen yet in the construction 
sector.
Overall the Company anticipates - also due to seasonality - a slight 
weakening of sales volumes in the fourth quarter compared to the 
previous quarter.
Despite uncertainties on the price-side and customer reluctance to 
make purchases, the Management Board reaffirms its full-year guidance
of an operating margin above 4%, an EBITDA of more than EUR200 
million and thus significantly positive net income. This would also 
allow to resume dividend payments in line with the general dividend 
policy.
end of announcement                               euro adhoc

Further inquiry note:

Dr. Thilo Theilen - Spokesperson
Head of Investor Relations & Corporate Communications
Telephone: +49 (0) 203-307-2050
Fax: +49 (0) 203-307-5025
Email: thilo.theilen@kloeckner.de

Branche: Metal Goods & Engineering
ISIN: DE000KC01000
WKN: KC0100
Index: CDAX, Classic All Share, Prime All Share
Börsen: Frankfurt / regulated dealing/prime standard
Berlin / free trade
Hamburg / free trade
Stuttgart / free trade
Düsseldorf / free trade
München / free trade

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