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Klöckner & Co SE

EANS-News: Klöckner & Co SE: Weak operative start in Q1 2009, but debts reduced, financing secured and outlook improved

Duisburg (euro adhoc) -

. Sales volume and sales decline markedly
     . Operating loss 
(EBITDA) reaches - €132 million
     . Net debt reduced by €249 
million
     . Successful restructuring of syndicated loan and 
European ABS program
     . Earnings situation expected to improve in
Q2 2009
  Corporate news transmitted by euro adhoc. The issuer/originator is solely
  responsible for the content of this announcement.
balance
Duisburg, May 14, 2009 - The adverse business
trend that started in the fourth quarter of 2008 continued into the 
first quarter of 2009. In the first three months of the year, sales 
volume at the Klöckner & Co Group declined by 37.9% year-to-year to 
1.1 million tons (Q1/2008: 1.7 million tons). Compared with the first
quarter of 2008, Group sales fell by 34.0% to about EUR1.1 billion 
(Q1/2008: EUR1.7 billion). The collapse in demand and continued price
erosion, which entailed further price-related inventory write-downs 
of about EUR35 million, resulted in negative EBITDA (earnings before 
interest, taxes, depreciation and amortization) of - EUR132 million. 
EBIT (earnings before interest and taxes) developed in line with 
EBITDA and amounted to - EUR149 million in the first quarter. Group 
earnings before taxes stood at - EUR165 million. As a result of a 
positive tax effect, Klöckner & Co recorded a consolidated net loss 
of - EUR127 million in the first quarter of 2009 (Q1/2008: EUR52 
million).
In contrast to negative earnings developments, Klöckner & Co 
generated a high cash flow from operating activities of EUR261 
million in the first quarter thanks to the rigorous reduction of net 
working capital. As a result, net financial debt was reduced markedly
from EUR571 million at year's end to EUR322 million at the end of the
first quarter of 2009. Since then, the Group has reduced its net debt
further to about EUR270 million. In addition, roughly two-thirds of 
the planned reduction of 1,500 people in the global workforce, a step
that is part of the Group's immediate action programs, has been 
implemented or initiated. Despite the Group's loss, the equity ratio 
declined only slightly from 35% to 33% in the first quarter of 2009.
"The reduction of operative costs and inventories, the improvement in
net working capital and the substantial reduction of net financial 
debt show that our immediate actions are already bearing fruit and 
underscore the stability of our business model which allows 
significant positive cash flows during times of crisis," says Dr. 
Thomas Ludwig, Chairman of the Management Board of Klöckner & Co SE.
The continued optimization of the Group's financing structure was 
successfully completed in May with the restructuring of the 
syndicated loan and the European ABS program. Klöckner & Co can now 
draw on a total of EUR1.5 billion credit facilities free of 
performance-based covenants. "The new non-performance-based covenants
are aligned even better with the economically fluctuating capital 
requirements of Klöckner & Co as a stock-keeping multi metal 
distributor. This prepares us even better for phases of economic 
weakness," Dr. Thomas Ludwig says.
The first signs of economic stabilization have emerged in recent 
weeks, although at a very low level. Demand seems to have bottomed 
out. At the same time, prices of some products are beginning to 
recover. As a result, Klöckner & Co expects earnings to improve 
markedly in the second quarter of 2009 compared with the first 
quarter. Nonetheless, results will be negative as well. In view of 
the persistently difficult economic conditions, Klöckner & Co cannot 
issue a forecast for the full year of 2009 at this time. However, the
company expects full-year earnings for 2009 to remain markedly below 
the previous year's result and cannot preclude a net loss.
"Despite the difficult market environment, Klöckner & Co believes 
that its immediate action programs, its strong balance sheet and the 
restructuring of its financing structure put it in a good position to
successfully overcome even a drawn-out crisis. Our financial leeway 
will allow us to return to our acquisition strategy in due course and
to profit from the consolidation opportunities arising from this 
crisis," Dr.Thomas Ludwig notes.
Key Figures
|                         |       |Q1         |  |Q1         |
|                         |       |2009       |  |2008*)     |
|                         |       |           |  |           |
|Income Statement         |       |           |  |           |
|                         |       |           |  |           |
|Sales                    |EUR      |1,095      |  |1,660      |
|                         |million|           |  |           |
|                         |       |           |  |           |
|Earnings before interest,|       |           |  |           |
|taxes,                   |       |           |  |           |
|depreciation and         |EUR      |-132       |  |109        |
|amortization (EBITDA)    |million|           |  |           |
|                         |       |           |  |           |
|Earnings before interest |EUR      |-149       |  |93         |
|and taxes (EBIT)         |million|           |  |           |
|                         |       |           |  |           |
|Earnings before taxes    |EUR      |-165       |  |76         |
|(EBT)                    |million|           |  |           |
|                         |       |           |  |           |
|Earnings after taxes     |EUR      |-127       |  |52         |
|(EAT)                    |million|           |  |           |
|                         |       |           |  |           |
|Earnings per share       |EUR      |-2.70      |  |1.09       |
|(basic)                  |       |           |  |           |
|Earnings per share       |EUR      |-2.43      |  |1.06       |
|(diluted)                |       |           |  |           |
|                         |       |Q1         |  |Q1         |
|                         |       |2009       |  |2008*)     |
|Cash Flow Statement      |       |           |  |           |
|                         |       |           |  |           |
|Cash flow from operating |EUR      |261        |  |-10        |
|activities               |million|           |  |           |
|                         |       |           |  |           |
|Cash flow from investing |EUR      |-5         |  |-141       |
|activities               |million|           |  |           |
|                         |       |           |  |           |
|Balance Sheet            |       |Mar 31,    |  |Mar 31,    |
|                         |       |2009       |  |2008*)     |
|                         |       |           |  |           |
|Working capital **)      |EUR      |1,006      |  |1,407      |
|                         |million|           |  |           |
|                         |       |           |  |           |
|Net financial debt       |EUR      |322        |  |571        |
|                         |million|           |  |           |
|                         |       |           |  |           |
|Equity                   |EUR      |957        |  |1.081      |
|                         |million|           |  |           |
|                         |       |           |  |           |
|Balance sheet total      |EUR      |2,897      |  |3,084      |
|                         |million|           |  |           |
|                         |       |           |  |           |
|                         |       |           |  |           |
|Key Figures              |       |Q1         |  |Q1         |
|                         |       |2009       |  |2008*)     |
|                         |       |           |  |           |
|                         |       |           |  |           |
|Sales volume             |to '000|1,068      |  |1,720      |
|                         |       |           |  |           |
|                         |       |           |  |           |
|                         |       |Mar 31,    |  |Mar 31,    |
|                         |       |2009       |  |2008*)     |
|                         |       |           |  |           |
|Employees at end of      |       |9,925      |  |10,282     |
|period                   |       |           |  |           |
|                         |       |           |  |           |
|                         |       |           |  |           |
|*) Prior year amounts restated   |           |  |           |
|due to initial application of    |           |  |           |
|IFRIC 14                         |           |  |           |
|**) Working capital = Inventories plus trade receivables    |
|less trade payables                                         |
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 260 distribution locations in 15 countries in Europe and North America.
During the financial year 2008, the Company achieved sales of approximately
EUR6.7 billion with more than 10,000 employees.
The shares of Klöckner & Co SE are admitted to trading on the official market
segment (Amtlicher Markt) of the Frankfurt Stock Exchange (Frankfurter
Wertpapierbörse) with simultaneous admission to the sub-segment (Prime
Standard) to the official market with further post-admission obligations. ISIN:
DE000KC01000; WKN: KC0100; Common Code: 025808576. Klöckner & Co shares are
listed in the MDax® Index of Deutsche Börse.
end of announcement                               euro adhoc

Further inquiry note:

|Peter Ringsleben - Corporate |Claudia Uhlendorf - Corporate |
|Communications |Communications |
|Phone: +49-203-307-2800 |Phone: +49-203-307-2289 |
|E-mail: |E-mail: |
|peter.ringsleben@kloeckner.de |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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