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Kloeckner & Co SE
Earnings Release • Nov 6, 2014
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Earnings Release
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Corporate | 6 November 2014 07:00
KLÖCKNER & CO SE ON STRONG UPWARD TREND IN FIRST NINE MONTHS OF 2014
Klöckner & Co. SE / Key word(s): 9-month figures
06.11.2014 / 07:00
– Despite a 1.8% rise in shipments, sales are up by just a marginal 0.1% to around EUR4.9 billion due to a weaker US dollar in the first half of the year and a lower price level in Europe
– Focus on higher-margin business lifts gross profit margin from 18.4% to 19.3%
– EBITDA improves by 47% from EUR108 million to EUR160 million and EBIT more than triples from EUR30 million to EUR92 million
– Positive net income of EUR27 million compared with a net loss of EUR31 million in the prior-year period
– KCO 6.0 and KCO WIN self-help measures contribute EUR39 million to EBITDA
– EBITDA expected to be between EUR30 million and EUR40 million in the fourth quarter and EUR190 million to EUR200 million for the whole year 2014
– Resumption of dividend payments planned for fiscal year 2014
Figures relate to first nine months of 2014 relative to first nine months of prior year.
Duisburg, Germany, November 6, 2014 – Klöckner & Co SE’s sales rose in the first nine months of 2014 by a marginal 0.1% to some EUR4.9 billion. Thus sales increased to a lesser degree than shipments (up 1.8% to around 5 million tons) due to the weaker US dollar in the first half year and the lower price level in Europe. The focus on higher-margin business enabled the gross profit margin to be lifted from 18.4% to 19.3%. Gross profit rose as a result by 5.3% to EUR952 million (previous year: EUR904 million). EBITDA improved by 47% from EUR108 million to EUR160 million. The contributions from the KCO 6.0 and KCO WIN restructuring and optimization programs, totaling EUR39 million, were the main driver behind the rise in earnings. EBIT more than tripled, from EUR30 million to EUR92 million. Net income returned to positive figures and came to EUR27 million, compared with a loss of EUR31 million in the prior-year period. Basic earnings per share rose accordingly from a negative EUR0.31 to a positive EUR0.27.
Gisbert Rühl, CEO of Klöckner & Co SE: “It is very satisfying that we improved our results not only against previous year but also quarter by quarter throughout the year.”
Significant boost to earnings in both segments
Supported by the mild winter in the first quarter and the first-time consolidation of Swiss acquisition Riedo in the second quarter, sales in the Europe segment rose by 1.4% compared with the first nine months of 2013. Mainly due to measures taken within the Group and despite the fact that market conditions remained very difficult, especially in France and Spain, EBITDA climbed by 34%, from EUR68 million to EUR91 million.
In the Americas segment, sales were 2.2% down on the prior-year period. However, on a constant exchange rate basis, this represented a slight increase in segment sales – despite the long and difficult winter in the USA, the consolidation of locations toward the end of last year, the drive to scale back low-margin business and margin-based pricing. Segment EBITDA accordingly improved by 39%, from EUR58 million to EUR81 million.
Further progress in digitalization strategy
Recent months have seen Klöckner & Co push ahead with the digitalization drive that forms part of the “Klöckner & Co 2020” long-term growth strategy.
Work at the pilot facility in Regensburg on developing innovative tools in collaboration with customers has started to deliver results. A raft of solutions that significantly extend our service portfolio have already reached the implementation stage.
Gisbert Rühl: “We are pushing the digitalization of our value chain, with the focus on customer benefits, and in doing so we have shown there is still plenty of room for innovation even in a somewhat conservative industry like ours.”
Outlook
Klöckner & Co expects that European steel demand will rise by 2% in the current year. In light of the fact that economic indicators have weakened recently, the growth forecast is at the lower end of the previously predicted range of 2% to 3%. For the USA, Klöckner & Co is raising its growth forecast to 5% to 6% (previously: 4% to 5%) due to the still very robust state of the automotive industry and the upturn in commercial construction, which continues to gain momentum.
Given a seasonal decline in demand and the recent deterioration of the economic outlook for Europe, Klöckner & Co expects to see shipments down in the fourth quarter compared with the third quarter. In addition, falling steel prices in the USA are adversely affecting earnings in the Americas segment. In total, EBITDA in the final quarter is expected to be between EUR30 million and EUR40 million. Klöckner & Co is therefore fine-tuning its EBITDA guidance for the year as a whole to between EUR190 million and EUR200 million.
Gisbert Rühl: “In light of the anticipated significant improvement in earnings, we plan to resume dividend payments for fiscal year 2014.”
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, around 150,000 customers are supplied through around
220 locations in 15 countries. Currently, Klöckner & Co employs around
9,800 employees. The Group had sales of around EUR6.4 billion in fiscal 2013.
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
Phone: +49 (0) 203-307-2050 
Fax: +49 (0) 203-307-5025
Email: [email protected]
06.11.2014 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG.
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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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