EANS-News: Klöckner & Co SE / Turnover and sales up on prior-year period. Earnings trend affected by economic slowdown and ongoing price erosion. Restructuring program continuing to plan and significantly further expanded. Full-year EBITDA forecast of EU


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9-month report


Duisburg (euro adhoc) - -       Turnover in the first nine months increased by
9.1% to 5.5 million tons and sales by 7.4% to some EUR5.8 billion through
acquisitions and strong organic growth in the USA 

-       EBITDA for the year to date at EUR117 million (including restructuring
expenses: EUR97 million), compared with EUR203 million in first nine months of
2011
-       Net income at a negative EUR33 million (including restructuring expenses
and impairments: negative EUR 76 million), as against EUR38 million in the
previous year
-       Earnings per share at minus EUR 0.75, compared with EUR0.47 in the
prior-year period
-       Restructuring measures significantly expanded with reduction of
approximately 60 locations and in the workforce by over 1,800; annual EBITDA
contribution expected to be around EUR150 million
-       Q4 EBITDA before restructuring expenses expected to be around
third-quarter level, with a strong positive cash flow
-       For the current year as a whole, turnover expected to increase by about
6.5% and sales by about 5%; EBITDA before restructuring expenses expected to be
EUR130-140 million


All figures relate to the first nine months relative to the first nine months of
the prior year

Duisburg, November 7, 2012 - Klöckner & Co SE substantially increased turnover
and sales in the first nine months, notably due to the acquisition of Macsteel
Service Centers USA and strong organic growth in the USA. The EUR117 million
EBITDA before restructuring expenses was nonetheless down on the prior-year
figure due to the weaker economic trend in Europe and price pressure on steel
products that has persisted since the end of the first quarter. As demand also
rose less strongly than expected after summer, third-quarter EBITDA, at EUR19
million, was below the prior-year figure. 
Gisbert Rühl, Chairman of the Management Board of Klöckner & Co SE: "We once
again responded in good time to the strained situation in Europe and launched a
comprehensive restructuring program as early as September 2011. This was a key
factor in our ability to buffer the negative impacts of a very weak steel market
at short notice. We have now significantly expanded the measures once more and
have marked up the expected annual EBITDA contribution from the program to
around EUR150 million. In contrast to Europe we made further gains in the US
market where there is still dynamic growth, among other things thanks to the
completed integration of Macsteel."

Turnover and sales increased, earnings below prior year
Klöckner & Co increased turnover in the first nine months of fiscal 2012,
primarily driven by acquisitions, by 9.1% to 5.5 million tons, compared with 5.0
million tons in the prior-year period.
In the Europe segment, turnover was down by 5.9% compared with the first nine
months of 2011 due to the increasingly difficult economic environment and
ongoing discontinuation of underperforming activities; the market as a whole
contracted by no less than 9%.
In the Americas segment, by contrast, turnover increased by 41.3% compared with
the first nine months of 2011, primarily due to acquisitions. Excluding the
acquisition, turnover in the USA showed 6.7% organic growth, significantly
better than the market (3.3%) and the prior-year figure.
Group sales in the first three quarters of 2012 came to some EUR5.8 billion, up
7.4% on sales in the first nine months of 2011. The ongoing price pressure meant
that the gross profit margin, at 17.2%, fell short of the 18.8% attained in the
prior-year period. EBITDA fell as a result from EUR203 million in the first nine
months of 2011 to EUR117 million (a decrease of 42.5%) before restructuring
expenses (including restructuring expenses: EUR97 million). Third-quarter
EBITDA, at EUR19 million, was likewise down on the prior-year figure of EUR37
million.
Overall, Klöckner & Co consequently generated a net loss of EUR33 million
(including restructuring expenses and impairments: net loss of EUR76 million),
compared with net income of EUR38 million in the prior-year period. Basic
earnings per share amounted to a negative EUR 0.75 compared with a positive
EUR0.47 in the prior-year period.

Solid equity base retained
The changes in the statement of financial position are dominated by repayment of
the convertible bond due in July. Total assets decreased as a result compared
with the 2011 year-end by 7.5% to EUR4,354 million. Net working capital, at
EUR1,666 million, was slightly down on the preceding quarter, reflecting the
absence of the usual seasonal recovery after the summer (Q2: EUR1,685 million).
The equity ratio was some 41% as of September 30, 2012, slightly up on the level
at the end of fiscal 2011. Net financial debt amounted to EUR596 million. With
gearing of 37%, net financial debt was still held low relative to shareholders'
equity. Liquidity remained strong at EUR656 million despite repayment of the
EUR325 million convertible bond on maturity.
Restructuring continuing to plan and further expanded
In light of the ongoing decline in European steel demand and the uncertain
outlook, Klöckner & Co has continued as planned and substantially expanded the
restructuring program launched in September 2011.
Besides cutting selling, general and administrative expenses, the restructuring
measures focus on closing unprofitable branches and discontinuing insufficiently
profitable activities. Since the start of the program in September 2011, this
has already led to the reduction of 20 locations and in the workforce by some
800. The Group's announced withdrawal from Eastern Europe is well advanced.
The Group-wide restructuring and improvement program has contributed
EUR37 million to EBITDA since its launch in September 2011. On a full-year
basis, the Group is aiming for a contribution in excess of EUR50 million in the
current year. Including the additional measures projected, Klöckner & Co
anticipates an annual contribution to EBITDA of around EUR150 million for the
Group as a whole from 2014 once all measures have taken full effect. The size of
the workforce will be reduced as a result by over 1,800 or 16% and the number of
branches from 290 to about 230.

Outlook
Due to the adverse market environment and the usual seasonal slowdown in
business activities at year-end, the Group expects EBITDA before restructuring
expenses to remain at around the third-quarter level in the fourth quarter of
2012, with a strong positive cash flow. Gradually increasing contributions from
the restructuring program will help counter margin pressure deriving from the
current economic environment. Klöckner & Co continues to expect that customers
will destock inventories due to the downward price trend. Accordingly, the Group
anticipates that fourth-quarter turnover will be down on the preceding quarter.
Overall, Klöckner & Co expects in fiscal 2012 to increase turnover by about 6.5%
and sales by about 5% compared with the prior year, with operating income
(EBITDA) of EUR130-140 million before restructuring expenses. Expenditure for
the expansion of the restructuring program is expected to amount to EUR60
million including pull back from Eastern Europe and the announced restructuring
of the French country organization, with at minimum two-thirds of this figure to
be incurred during the current year. Due to the restructuring program and the
seasonal reduction in working capital toward the year-end, it should be possible
to reduce net financial debt below EUR500 million.


Further inquiry note:
Dr. Thilo Theilen
Leiter Investor Relations & Corporate Communications
Telefon: +49 (0)203 307 2050
E-Mail: thilo.theilen@kloeckner.com

end of announcement                               euro adhoc 
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company:     Klöckner & Co SE
             Am Silberpalais 1
             D-47057 Duisburg
phone:       +49(0)203-307-0
FAX:         +49(0)203-307-5000
mail:     info@kloeckner.de
WWW:      http://www.kloeckner.de
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