08.05.2013
Klöckner & Co. SE DE000KC01000
DGAP-News: Klöckner & Co SE: Costs sharply reduced, gross profit margin improved, but earnings in the first three months lower year-on-year due to cyclical weak demand. Second-quarter EBITDA expected to be EUR35 million to EUR45 million.
DGAP-News: Klöckner & Co. SE / Key word(s): Quarter Results
Klöckner & Co SE: Costs sharply reduced, gross profit margin improved,
but earnings in the first three months lower year-on-year due to
cyclical weak demand. Second-quarter EBITDA expected to be EUR35
million to EUR45 million.
08.05.2013 / 06:59
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- Turnover down 11.4% to 1.6 million tons and sales down 16.5% to
approximately EUR1.6 billion
- Gross profit of EUR303 million down 11.9% on the prior-year figure
(EUR344 million) due to lower turnover and prices; gross profit margin
improved from 17.7% to 18.6%
- EBITDA, at EUR29 million, down 35% on prior-year figure (EUR44 million)
due to shortfall in gross profit, despite EUR26 million cost reduction
- Net income of EUR- 16 million compared with EUR- 12 million in the
prior-year period
- Basic earnings per share EUR- 0.16 compared with EUR- 0.11 in the
prior-year quarter
- Restructuring program largely completed following withdrawal from
Eastern Europe
- European ABS-program extended early
- Q2 EBITDA expected to be EUR35 million to EUR45 million
Figures relate to first three months of 2013 relative to first three months
of prior year.
Duisburg, May 8, 2013 - The first three months saw turnover decline by
11.4% due to very weak demand and portfolio streamlining in Europe as well
as less working days in Europe and the US. Sales declined even more steeply
by 16.5% due to lower price level. The resulting EUR41 million decrease in
gross profit was partly offset by EUR26 million in cost savings. It was
thus possible to limit the decline in operating income (EBITDA), which was
down from EUR44 million in the prior-year period to EUR29 million.
Gisbert Rühl, Chairman of the Management Board of Klöckner & Co SE: 'We are
doing all we can to brace ourselves against the latest dip in the European
market. By effecting major cost cuts, we halted the decrease in EBITDA at
EUR29 million. We are pleased to see that our restructuring measures are
thus working to full effect, which means that we are sustainably very well
positioned.'
Turnover, sales and earnings well below prior year, restructuring measures
showing visible impact
Group turnover in the first three months of 2013, at 1.6 million tons, was
11.4% down on the prior-year period (1.9 million tons). Adjusted for the
low-margin operations discontinued in the restructuring program, the
decrease would have been 8.1%.
Turnover in the Europe segment was 15.8% down on Q1 2012 due to the ongoing
difficult economic environment, the long winter, the effects of portfolio
streamlining and comparably less working days. Excluding the portfolio
streamlining effects, turnover went down by 10.1% against a market drop of
14%.
Turnover in the Americas segment declined by 4.8% year-on-year. The decline
in turnover in the US, at 3.5%, was nevertheless smaller than that across
the market as a whole, which contracted by 6.6% due to ongoing
uncertainties caused by the fiscal and budget problems. Adjusted for the
effect of less working days in Q1 2013, turnover in the US is approximately
on prior year's level.
Group sales in the first three months of 2013, at approximately EUR1.6
billion, were 16.5% down on the prior-year period.
Mirroring the trend in turnover and sales, gross profit was down by 11.9%
to EUR303 million and therefore also well below the prior-year figure of
EUR344 million. The fall in gross profit was partly offset by cost cuts
totaling EUR26 million, of which EUR10 million were attributable to lower
turnover and EUR16 million to the restructuring program. In the first
quarter, therefore, the Klöckner & Co 6.0 restructuring program already
contributed additional EUR12 million to EBITDA versus prior year (EUR16
million through cost cuts less EUR4 million of gross profit forgone on
discontinued low-margin business). The gross profit margin rose accordingly
by almost one percentage point from 17.7% to 18.6%.
It was thus possible to limit the decline in EBITDA, which was down from
EUR44 million in the prior-year period to EUR29 million, and reach the
lower end of the forecast range of EUR30 million to EUR40 million.
The Group's net loss for the first quarter of the fiscal year was EUR16
million
(Q1 2012: net loss of EUR12 million). Basic earnings per share was EUR-
0.16 compared with EUR- 0.11 in the prior-year quarter.
Very strong equity base maintained
Total assets increased by 5.1%, largely due to a seasonal increase in
receivables. The equity ratio consequently fell slightly from 39% to 37%.
Net financial debt showed a seasonal increase relative to the year-end,
going up by EUR60 million to EUR482 million. Gearing (net debt/equity) was
stabilized at a low level of 35%. Cash resources remain very solid at
EUR663 million. Also our financing position is very robust. End of April
our European ABS-program with a volume of EUR360 million has been extended
early on to May 2016.
Restructuring program largely completed
In light of the further sharp decline in European steel demand and the
uncertain outlook, Klöckner & Co on several occasions substantially
expanded the restructuring program launched in September 2011. Besides
cutting administration and sales overhead, the restructuring measures focus
on closing unprofitable sites and discontinuing low margin business
activities. Since its inception in September 2011, the program has already
led to the closure, or in Eastern Europe the sale, of 50 locations and a
reduction in the workforce by some 1,600. The measures still to be
implemented in our French country organization will likewise be completed
in the second quarter once the legal requirements are in place.
In total, Klöckner & Co expects that the restructuring measures will
contribute an additional EUR60 million to EBITDA in the current fiscal year
against prior year and another EUR40 million in 2014, of which EUR12
million were already attained in the first quarter of 2013. The workforce
will be reduced in the course of the measures by over 1,800 or 16% and the
number of branches reduced from 290 to approximately 230.
Outlook
Klöckner & Co expects a slight upturn in demand in the second quarter
compared with the prior quarter. However, this rise is based primarily on
the seasonal improvement in weather conditions and less on a general
recovery in underlying demand. The latter will remain largely absent due to
increased economic worries in Europe in the spring as well as unresolved
fiscal and budget problems in the US. Accordingly, the rise in operating
income (EBITDA) will also be moderate, ranging between EUR35 million to
EUR45 million. As in the previous quarter, the restructuring program, which
is now almost fully implemented will make a significant contribution,
thereby cushioning the impact of the decline in turnover and earnings due
to macro economic conditions.
As Klöckner & Co currently sees no signs of what was originally a widely
anticipated pick-up in steel demand in the second half of the year, the
full-year guidance for EBITDA of EUR200 million in 2013 is looking
increasingly unrealistic.
Gisbert Rühl: 'Hopes of the widely expected economic recovery in the second
half of the year are fading. In light of this, it is looking increasingly
unrealistic that we will attain our EUR200 million EBITDA guidance. Even
without a recovery, though, we are well-positioned to further boost
profitability with self-help measures. Our strong balance sheet and solid
financing, will give us the necessary leeway.'
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 240 locations in 17 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-Index of
Deutsche Börse.
ISIN: DE000KC01000; WKN: KC0100; Common Code: 025808576.
Contact person:
Dr. Thilo Theilen - 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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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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