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EANS-News: Klöckner & Co SE
Klöckner & Co SE: weak first half of 2009, marked improvement in earnings expected during the second half

Duisburg (euro adhoc) -

  Corporate news transmitted by euro adhoc. The issuer/originator is solely
  responsible for the content of this announcement.
balance
• Sales volume, sales and earnings in the
first half of the year far below previous year´s levels • Operating 
earnings climbed considerably from the first quarter to the second 
quarter, while remaining negative • Cash flow increased, net 
financial debt lowered considerably • Cost-cutting and 
capacity-reducing measures further successfully realized • 
Significant improvement expected in the second half of year assuming 
stabilization of demand following the nearly completed destocking 
along the value chain, bottoming of prices and cost savings
Duisburg, August 13, 2009 - The steep drop in sales volume and 
earnings that began last year continued during the first six months 
of 2009. In the second quarter of 2009, however, Klöckner & Co was 
able to make a significant recovery from other early losses, even 
though its results for the second quarter and the six month period 
remained negative. The company finished the second quarter with 
EBITDA (earnings before interest, taxes, depreciation and 
amortization) of -EUR31 million, compared with -EUR132 million in the
first quarter. This improvement was generated in particular by 
stabilizing sales prices as well as cost reductions produced by the 
Company´s timely program of business measures. For the entire 
six-month period, EBITDA totaled -EUR163 million compared with + 
EUR321 million in the same period last year. During the second half 
of the year, the Management Board expects earnings to considerably 
improve, buttressed by stabilizing prices and volumes as well as the 
successful introduction of cost-cutting steps. However, these 
expected improved earnings will be unable to offset the negative 
result from the first half of the year.
In contrast to the Company´s negative earnings performance, Klöckner 
& Co increased cash flow from operating activities to EUR468 million 
by systematically reducing net working capital during the first half 
of 2009. As a result, net financial debt was cut by 79.3%, falling 
from EUR571 million at the end of the year to EUR118 million at the 
end of the first half of 2009.
"After the dramatic drop in earnings during the first quarter, we 
were able to significantly improve the situation in the second 
quarter and, in particular, to continue lowering our net financial 
debt. We are cautiously optimistic about the second half of the year 
and expect a significant improvement in earnings so long as prices 
and volumes continue to firm up," says Dr. Thomas Ludwig, Chairman of
the Management Board of Klöckner & Co SE.
During the first six months of the year, sales volume at the Klöckner
& Co Group totaled  2.1 million tons, a drop of 38.9% below the 
previous year´s level (H1/2008: 3.5 million tons). The decrease in 
sales volume resulted from the extremely weak macroeconomic 
conditions and the loss of sales volume that followed the sale of the
Canadian subsidiary Namasco Ltd. in July 2008. Excluding Namasco 
Ltd., the drop in sales volume totaled 33.0%. As a result, 
consolidated sales, including the effects of divestments, fell 42.7% 
compared to the first half-year period last year to EUR2.1 billion 
(H1/2008: EUR3.6 billion). Mirroring EBITDA performance, EBIT 
(earnings before interest and taxes) totaled -EUR197 million in the 
first half of the year (H1/2008: + EUR290 million). Consolidated 
income before taxes was -EUR228 million (H1/2008: + EUR257 million). 
As a result of positive tax effects, Klöckner & Co completed the 
first half of 2009 with a consolidated net loss of -EUR175 million 
(H1/2008: consolidated net profit of +EUR178 million). Despite the 
negative results in the first half of 2009, the Company´s equity 
share decreased only slightly, from 35% to 34%. In another step, the 
Company´s workforce was adjusted in response to the negative volume 
trends within the context of its immediate action programs. As a 
result, the workforce has been reduced by 1,300 employees, including 
people with short-term contracts and temporary workers, since October
2008. Ultimately, the workforce will be cut by about 1,500 employees 
as part of the programs.
Further steps to improve the market position of Klöckner & Co were 
introduced at the beginning of the third quarter. "The focus of these
new measures is the optimization of product porfolio, customer 
segmentation and value added services services. The aim is to use the
structural changes arising from the crisis as opportunities and 
further improve our market position against competitors," Dr. Thomas 
Ludwig said.
After Klöckner & Co successfully completed the restructuring of its 
financing in May by modifying its syndicated loan and the European 
ABS program, an additional convertible bond with a volume of EUR97.9 
million, a maturity of five years and a coupon of 6% was issued in 
June 2009. As a result, Klöckner & Co has more than EUR1.6 billion in
financing facilities that are largely free of performance-based 
covenants.
About Klöckner & Co Klöckner & Co is the largest producer-independent
distributor of steel and metal products in the European and North 
American markets combined. The core business of the Klöckner & Co 
Group is the storage and distribution of steel and non-ferrous 
metals. About 185,000 active customers are supplied through around 
250 distribution locations by around 9,500 employees in 15 countries 
in Europe and North America. During the financial year 2008, the 
Company achieved sales of approximately EUR6.7 billion. The shares of
Klöckner & Co SE are admitted to trading on the regulated market 
segment (Regulierter Markt) of the Frankfurt Stock Exchange 
(Frankfurter Wertpapierbörse) with simultaneous admission to the 
sub-segment to the regulated market with further post-admission 
obligations (Prime Standard). Klöckner & Co shares are listed in the 
MDax® Index of Deutsche Börse. ISIN: DE000KC01000; WKN: KC0100; 
Common Code: 025808576.
Disclaimer This press release contains certain forward-looking 
statements. Forward-looking statements are based on current estimates
and assumptions that we make to the best of our present knowledge. 
These forward-looking statements are subject to risks, uncertainties 
and other factors which could cause actual results, including our 
financial condition and results of operations, to differ materially 
and more negatively from the results that we have expressly or 
implicitly assumed or described in these forward-looking statements. 
Our business is also subject to a number of risks and uncertainties 
that could cause a forward-looking statement, estimate or prediction 
to become inaccurate. In light of these risks, uncertainties and 
assumptions, future events described in this press release may also 
not occur.
end of announcement                               euro adhoc

Further inquiry note:

Peter Ringsleben - Corporate Communications
Phone: +49-203-307-2800
E-mail: peter.ringsleben@kloeckner.de

Claudia Uhlendorf - Corporate Communications
Phone: +49-203-307-2289
E-mail: claudia.uhlendorf@kloeckner.de

Dr. Thilo Theilen - Investor Relations
Phone: +49-203-307-2050
E-Mail: 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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