07.08.2013
Klöckner & Co. SE DE000KC01000
DGAP-News: Klöckner & Co SE: Gross margin improved, costs reduced, smaller net loss, negative market trend increasingly compensated by restructuring program, Q3 EBITDA expected to be EUR30 million to EUR40 million, FY EBITDA to be around the prior-year le
DGAP-News: Klöckner & Co. SE / Key word(s): Half Year Results
Klöckner & Co SE: Gross margin improved, costs reduced, smaller net
loss, negative market trend increasingly compensated by restructuring
program, Q3 EBITDA expected to be EUR30 million to EUR40 million, FY
EBITDA to be around the prior-year level at approx EUR140 million
before restructuring expenses
07.08.2013 / 06:58
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- Turnover down in first half year due to market trend and restructuring
by 10.3% to 3.3 million tons and sales down 15.0% to approximately
EUR3.3 billion.
- Gross profit of EUR608 million down 11.1% on the prior-year figure
(EUR683 million),
gross margin improved from 17.5% to 18.3%.
- As a result of EUR70 million cost reduction, EBITDA, at EUR72 million,
is down only slightly on prior-year figure of EUR77 million (EUR97
million before restructuring), despite sharp fall in turnover.
- EBIT up EUR25 million to a positive EUR19 million. Prior year negative
EUR6 million impacted by extraordinary effects.
- Net loss narrowed similarly from EUR51 million in prior-year period to
EUR20 million, including from EUR 39 million to EUR 4 million in second
quarter.
- Basic earnings per share a negative EUR0.19 compared with a negative
EUR0.50 in the prior-year period.
- Restructuring program far advanced and further extended.
- Q3 EBITDA expected to be between EUR30 million and EUR40 million
(before restructuring expenses).
- Despite market turmoil in Europe, full-year EBITDA target around
prior-year level of approximately EUR140 million before restructuring
expenses of approximately
EUR18 million (without compensating
effects), compared with EUR77 million in 2012.
Figures relate to first
six months of 2013 relative to first six months of prior year.
Duisburg,Germany, August 7, 2013 - Turnover was in total 10.3% down in the
first six months mainly due to the plight of the market and portfolio
adjustment in Europe as part of the restructuring. As a result of the lower
price level, sales declined at an even sharper rate, falling by 15.0%. Cost
reductions of EUR70 million meant that despite the sharp fall in turnover
it was possible to limit the decline in operating income (EBITDA), which
came to EUR72 million, compared with EUR77 million (EUR97 million before
restructuring expenses) in the prior-year period.
Gisbert Rühl, CEO of Klöckner & Co SE: 'While we are anything but happy
with the earnings situation, the numbers plainly show that thanks to the
restructuring measures we are making headway under our own power against
the pressure on earnings from the ongoing negative market trend.'
Turnover, sales and earnings below prior year, restructuring measures
increasingly compensating negative market impact
Group turnover in the first six months of 2013, at 3.3 million tons, was
10.3% down on the prior-year period (3.7 million tons). Excluding the
low-margin operations discontinued in the restructuring program and the
location closures, the decrease would have been 6.2%.
Turnover in the Europe segment was 15.1% down on the first half of 2012 due
to the ongoing difficult economic environment, the long winter and the
effects of portfolio streamlining. Without the portfolio adjustment,
turnover would be down 7.4%, compared with a 10.9%* contraction in the
market.
Turnover in the Americas segment declined by 3.5% compared with a year
earlier, and 2.1% in the USA. The decline in turnover in the USA was thus
likewise smaller than that across the market as a whole (down 4.6%).
Under additional pressure from the low price level, Group sales in the
first six months of 2013, at approximately EUR3.3 billion, were 15.0% down
on the prior-year period.
Mirroring the trend in turnover and sales, albeit with a smaller decrease,
gross profit was down by 11.1% to EUR608 million and therefore also below
the prior-year figure of EUR683 million. The fall in gross profit was
almost entirely offset by cost cuts totaling EUR70 million, of which EUR40
million was attributable to the restructuring program.
*) Contains data until May.
In the first half year, therefore, the Klöckner & Co 6.0 restructuring
program contributed an additional EUR29 million to EBITDA compared with the
prior-year period (EUR40 million through cost cuts less EUR11 million of
gross profit forgone on discontinued low-margin business). The gross margin
rose accordingly from 17.5% to 18.3%.
EBITDA came to EUR72 million in the first half year, of which EUR43 million
was generated in the second quarter. EBITDA was thus within the projected
range of EUR35 million to EUR45 million even without a non-recurring EUR7
million earnings boost from the reversal of pension provisions. EBIT for
the first half year increased by EUR25 million from a negative EUR6 million
to a positive EUR19 million and the net loss was narrowed from EUR51
million to EUR20 million. Basic earnings per share was a negative EUR0.19
compared with a negative EUR0.50 in the prior-year period.
Ongoing strong balance sheet and financing structure
At 39%, the equity ratio was broadly on a par with the 2012 year-end. Due
to the increase in resources tied up in net working capital, net financial
debt came to EUR489 million, compared with EUR422 million at the prior
year-end. Gearing (i.e. the ratio of debt to equity) was stabilized at a
low level of 33%. Cash resources remain very comfortable at
EUR570 million. The Group's financing remains solid with ample leeway: Both
the European ABS program and the syndicated loan, each amounting to EUR360
million, were extended in the second quarter to May 2016.
Restructuring far advanced and further extended
In light of the crisis-induced decline in European steel demand and the
uncertain outlook, Klöckner & Co on several occasions - most recently in
May 2013 - substantially expanded the restructuring program launched in
September 2011. Besides cutting administration and sales overhead, the
restructuring measures focus on closing or selling unprofitable branches
and discontinuing business activities that are insufficiently profitable on
a lasting basis. Since its inception in September 2011, the program has
already led to the closure or, in Eastern Europe, the sale of
60 locations and a reduction in the workforce by some 1,800. In light of
the difficult market situation, notably in France, and the development of
further scope for improvement in the USA following the acquisition and
integration of Macsteel, Klöckner & Co decided a further extension to the
program in May 2013.
This will result in the closure or consolidation of further locations in
France and the USA as well as a further reduction in the workforce by 200
employees. The extended restructuring program thus comprises the closure or
sale of a total of 70 locations (24%) and a reduction in the workforce by
more than 2,000 (17%). All measures are to be implemented and the program
thus completed by the end of this year.
In total, Klöckner & Co expects that the restructuring measures will
contribute an additional EUR65 million to EBITDA in the current fiscal
year, of which EUR29 million were already attained in the first half of
2013, compared with the prior year and another
EUR45 million in 2014.
Outlook
For the second half of the year, Klöckner & Co expects that the generally
anticipated economic recovery in the USA, additional contributions to
earnings from the restructuring program will at least be able to compensate
for the usual seasonal drop in demand. The Company consequently projects
operating income (EBITDA) of between EUR30 million and EUR40 million for
the third quarter before restructuring expenses. As things currently stand,
Klöckner & Co expects full-year operating income to be around the
prior-year level at approximately EUR140 million before restructuring
expenses.
Gisbert Rühl: 'Even if we cannot expect any tailwind from the European
steel market, we anticipate that, given the timely, radical restructuring
measures, we will regain profitability under our own power next year.
Additional impetus can come from the generally expected recovery in the
USA, our growth market, and from the currently improving price
environment.'
About Klöckner & Co:
Klöckner & Co is the largest producer-independent distributor of steel and
metal products and one of the leading steel service center companies in the
European and American markets combined. The core business of Klöckner & Co
is the warehousing and distribution of steel and non-ferrous metals as well
as the operation of steel service centers. Based on the Group's
distribution and service network, more than 160,000 customers are supplied
through around 230 locations in 15 countries. Currently Klöckner & Co
employs around 10,000 employees. The Group had sales of around EUR7.4
billion in fiscal 2012.
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 further post-admission obligations
(Prime Standard). Klöckner & Co shares are listed in the MDAX(R)-Index of
Deutsche Börse.
ISIN: DE000KC01000; WKN: KC0100; Common Code: 025808576.
Contact person:
Christian Pokropp - Press Spokesperson
Head of Investor Relations & Corporate Communications
Telephone: +49 (0) 203-307-2050
Fax: +49 (0) 203-307-5025
E-Mail: [email protected]
End of Corporate News
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07.08.2013 Dissemination of a Corporate News, transmitted by DGAP - a
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Language: English
Company: Klöckner & Co. SE
Am Silberpalais 1
47057 Duisburg
Germany
Phone: +49 (0)203 / 307-0
Fax: +49 (0)203 / 307-5000
E-mail: [email protected]
Internet: www.kloeckner.com
ISIN: DE000KC01000
WKN: KC0100
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover,
München, Stuttgart
End of News DGAP News-Service
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