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Klöckner & Co SE

EANS-News: Klöckner & Co SE
Performance positive in North America but weak in Europe, operating income (EBITDA) EUR45 million, further progress in implementing profitability action plan, EBITDA guidance for Q2 EUR50 to EUR60 million

  Corporate news transmitted by euro adhoc. The issuer/originator is solely
  responsible for the content of this announcement.
quarterly report

Duisburg (euro adhoc) - -       Turnover raised by 24.0% to 1.9 million tons and
sales by 22.6% to some EUR1.9 billion due to acquisitions 

-       EBITDA EUR45 million, compared with EUR104 million boosted by windfall
profits in prior year
-       Net income accordingly EUR-10 million, compared with EUR44 million in
prior year
-       Earnings per share a EUR-0.10 as against a EUR0.65 in prior year 
-       Profitability action plan on track
-       EBITDA guidance for Q2 EUR50 to EUR60 million with further improvement
in turnover compared with Q1
-       Full-year guidance: Turnover growth of 5% and also sales above prior
year; increase in EBITDA only attainable, if economic environment in Europe
improves in second half-year

Figures relate to first three months relative to first three months of prior

Duisburg, May 9, 2012 - Turnover and sales sharply increased in Q1 2012,
primarily due to the acquisition of Macsteel Service Centers USA. At EUR45
million, operating income (EBITDA) was down on the strong first quarter of 2011
- which was boosted by windfall profits - but EUR31 million up on the preceding
quarter and so within the forecast range of EUR40 to EUR50 million. 
Gisbert Rühl, Chairman of the Management Board of Klöckner & Co SE: "The
Macsteel acquisition meant we could particularly benefit from the robust
economic trend in the USA. In Europe, as we expected, the environment remains
difficult. With substantial overcapacity dominating the market, competition is
very fierce. On top of this, customers continue to be unsettled by the ongoing
sovereign debt crisis."

Strong growth in turnover and sales, earnings down on prior year
Klöckner & Co increased turnover in the first three months of fiscal 2012 by
24.0% to 1.9 million tons compared with the prior-year quarter (1.5 million
tons), as a result of acquisitions. Compared with Q4 2011, turnover showed an
increase of 13.5% due to the seasonal upturn in business. 
The divergent trend in the turnover performance of the Europe and Americas
segments experienced in 2011 continued in even more pronounced form in the first
quarter. In the Europe segment, turnover was 5.1% down on the prior year owing
to the difficult economic environment and portfolio streamlining. Germany was
the only country where Klöckner & Co generated slight growth in turnover,
whereas business conducted in Spain once again declined substantially. 
In contrast, turnover in the Americas segment increased by 125.4% compared with
Q1 2011, mainly due to the acquisition of Macsteel. Also on an organic basis,
however, Americas segment turnover was well ahead of both, the market and the
prior-year period, with growth of 11.8%. Organic turnover for the Group as a
whole showed a slight 1.4% decrease due to the ground lost in Europe.
Sales followed the trend in turnover, increasing by 22.6% relative to the
prior-year period to some EUR1.9 billion in Q1 2012. Excluding acquisitions,
Group sales were broadly on a par with the prior year (-0.5%).
Operating income (EBITDA), at EUR45 million, was below the prior-year figure of
EUR104 million - which was boosted by large windfall profits - but tripled
compared with the figure for Q4 2011. EBIT for the first three months of the
fiscal year came to EUR18 million (Q1 2011: EUR86 million) and earnings before
taxes (EBT) to EUR-6 million (Q1 2011: EUR66 million). Net income accordingly
dropped from EUR44 million to EUR-10 million. Basic earnings per share came to
EUR-0.10, compared with a EUR0.65 in the prior-year quarter.

Strong balance sheet and financing structure retained 
Total assets increased reflecting the usual seasonal upturn in business activity
following the winter. The main driver behind the increase was a rise in funds
tied up in net working capital from EUR1,534 million to EUR1,656 million. The
increased need for net working capital was also reflected in net financial debt,
which rose as expected from EUR471 million at the year-end to EUR573 million.
Net financial debt was nonetheless kept low relative to equity, with gearing of
35%. The equity ratio stood at roughly 38% as of March 31, 2012, compared with
39% at the 2011 year-end. Liquidity remains at a high level of EUR937 million,
compared with EUR987 million as of December 31, 2011. 

Further progress on profitability action plan
Back in September 2011, Klöckner & Co responded to the reduced growth forecasts
as a result of the ongoing sovereign debt crisis in Europe by initiating a
profitability action plan. Alongside cuts in administration costs and sales
overheads, the plan centers on the discontinuation of insufficiently profitable
business activities. The number of jobs in Europe is to be cut by 700 as a
result. Some 400 jobs had been cut by the end of the first quarter. Initial
steps were also completed in the first quarter to close unprofitable locations
and business activities. Subsidiaries in Spain and Eastern Europe are
particularly affected. The profitability improvement measures will be fully
implemented by the middle of the year. Alongside implementation of the
restructuring measures in Europe, an additional focus was on the further
integration of Macsteel. To this end, the branding was standardized, management
structures, administration and procurement brought together, and the groundwork
laid for IT integration in the second quarter. In addition to the increased
significance of the US business, the considerable synergies and cross-selling
effects resulting from completion of the integration are leading to an
above-average contribution to earnings from the Americas segment. 

Outlook for 2012
For fiscal year 2012 Klöckner & Co continues to expect a rise in turnover by 5%
and also a rise in sales compared with the prior year. The increase is expected
- despite portfolio streamlining measures and the weak market development in
Europe - to be achieved by last year's acquisitions. The targeted improvement in
operating income (EBITDA) for the full year is only achievable if the economic
environment in Europe improves in the second half-year. If not, the Company
expects from today's perspective that operating income will be broadly on a par
with the prior year. An expected increase in EBITDA in the USA from the Macsteel
acquisition and a more robust overall economic trend would be countered here -
along with the earnings improvement from the profitability action plan - by
weaker operating performance in Europe. 
For the second quarter, the Company anticipates operating income (EBITDA) of
between EUR50 and EUR60 million, provided the economic growth prospects do not
further deteriorate in Europe and prices for steel products do not plummet. The
Americas segment will once again make an above-average contribution to this
result compared to their sales impact. 
While the first half of the year is focused entirely on implementing the
profitability action plan in Europe and completing the integration of Macsteel
acquired in the prior year, Klöckner & Co's financial headroom and solid balance
sheet mean the company is best placed to continue its long-term growth strategy,
"Klöckner & Co 2020", in the second half of the year.

Further inquiry note:
Dr. Thilo Theilen
Leiter Investor Relations & Corporate Communications
Telefon: +49 (0)203 307 2050

end of announcement                               euro adhoc 

company:     Klöckner & Co SE
             Am Silberpalais 1
             D-47057 Duisburg
phone:       +49(0)203-307-0
FAX:         +49(0)203-307-5000
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

Weitere Meldungen: Klöckner & Co SE

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