All Stories
Follow
Subscribe to Klöckner & Co SE

Klöckner & Co SE

Earnings performance of Klöckner & Co AG remains sound and forecast for 2007 reaffirmed

Duisburg (euro adhoc) -

•	Sound result again for the first nine months of 2007
•	Sales volume and sales boosted substantially
•	Liabilities reduced compared with first half of the year
•	Acquisition targets for 2007 achieved ahead of schedule
•	Group financing improved further
•	Forecast reaffirmed for full-year 2007
  ots.CorporateNews transmitted by euro adhoc. The issuer is responsible for
  the content of this announcement.
balance
Duisburg, November 14, 2007 - The Klöckner &
Co Group boosted its sales in the first nine months of 2007 by 15.7% 
to EUR4.8 billion and again generated a sound operating result 
(EBITDA) of EUR287.9 million. Even though the result was down 11.5% 
year-on-year due to increased price pressure in the third quarter, 
the medium-term upward trend is becoming more firmly established. "We
expect our sales in full-year 2007 to rise significantly and to 
generate a good result again. Even if the EBITDA will be down 10% 
year-on-year due to increased price pressure in the second half of 
the year, we will generate the second-best operating result that the 
company has seen in over 100 years. We are thus reaffirming the 
forecast that we adjusted in October," explained Dr. Thomas Ludwig, 
CEO of Klöckner & Co AG. The target of acquiring 10 to 12 profitable 
small and medium-sized multi metal distribution companies in 2007 was
achieved ahead of schedule with the 12th acquisition in September 
2007. In addition, the Group´s financing was further optimized by 
placing a syndicated holding facility and by issuing a convertible 
bond. The STAR performance program was successfully continued. "This 
means a large part of the measures planned for 2007 have already been
implemented. We believe that the Company is still on a good and 
successful course and that it is well equipped for the future," 
commented Dr. Thomas Ludwig.
Increase in sales volume and sales The Klöckner & Co Group increased 
its sales volume by 4.7% year-on-year to 4.9 million metric tons to 
the end of September 2007 due to the acquisitions made and despite 
streamlining at various locations. Sales rose in the same period by 
15.7% to EUR4.8 billion.
This change was supported by the predominantly positive economic 
conditions for metal distribution in the first nine months of 2007 in
Europe, but the trend was partially weakened in the third quarter. 
While the positive trend in machinery and mechanical engineering 
continued unabated, the growth rate in the construction industry 
weakened in the third quarter in some countries. In contrast, general
conditions in North America saw a less positive trend overall, mainly
as a result of weaker construction and consumption demand in the 
first nine months of 2007.
Sound result despite slight weakening against previous year The 
operating result (EBITDA) generated was sound again at EUR287.9 
million to the end of September 2007, supported by the STAR 
performance program, even if this result was 11.5% lower than in the 
previous year due to the market. While the price-related inventory 
profits in the previous year primarily supported earnings performance
in the third quarter, the excellent earnings performance in the first
half of the year was negatively impacted by increasing price pressure
this year concerning the distribution of steel and stainless steel 
products in Q3 2007. Stainless steel prices in particular dropped 
sharply in Q3 2007 due to the rapid fall in the price of nickel. It 
was impossible to avoid write-downs on inventories and discounts on 
the sales prices with correspondingly lower margins in order to adapt
to the changed market conditions.
Earnings before interest and taxes (EBIT) generated in the amount of 
EUR241.8 million were also high even though EBIT, like EBITDA, was 
down by 14.3% year-on-year in the first nine months of 2007. In 
contrast to this, the decrease in earnings before taxes by 29.7% to 
EUR161.9 million and in consolidated earnings by 34.7% to EUR114.6 
million is negatively impacted by one-off charges for redemption of 
the high-yield bond in the amount of around EUR38.5 million in Q2 
2007. These one-off charges will reduce the interest expenses in 
future and significantly expand the Group´s financial leeway.
Total assets increase while liabilities fall compared with the first 
half of the year The increase in the Group´s total assets from 
EUR2,551.7 million at the end of 2006 to EUR3,170.2 million at the 
end of September 2007 is largely due to acquisitions. Such 
acquisitions raised net liabilities to EUR877.3 million as of 
September 30, 2007 compared with EUR364.8 million at the end of 2006.
However, liabilities were reduced substantially in the third quarter 
compared with the high of EUR996.1 million at the end of the first 
half of 2007.
Acquisition target for 2007 already achieved in September In the 
first nine months of 2007, the Klöckner & Co Group successfully 
continued its acquisition strategy. Overall, the Group has acquired 
12 companies with total sales of around EUR570 million in Europe and 
North America to date in 2007. In June 2007, the majority interest in
the profitable Swiss country operation Debrunner Koenig Holding AG 
was increased by around 18% to approximately 78%. "We will also 
pursue our acquisition strategy systematically in future within the 
scope of existing market opportunities," explained Dr. Thomas Ludwig.
Further optimization of Group financing Important steps were taken in
the current fiscal year to optimize Group financing. A syndicated 
holding facility of EUR600 million was successfully placed at the 
beginning of Q2 2007 with an international syndicate of banks. Some 
of the funds were utilized to fully redeem the high-yield bond with 
its nominal annual interest rate of 10.5%. A convertible bond of 
EUR325 million and a coupon of 1.5% was issued in July 2007. 
According to Dr. Thomas Ludwig: "The Group financing of Klöckner & Co
AG stands on a secure foundation and guarantees that we are able to 
pursue our acquisition strategy systematically despite the crisis on 
the credit markets."
Outlook Klöckner & Co expect prices to stabilize in Q4 2007 with 
demand staying sound and reaffirms the earnings forecast for 
full-year 2007 which was adjusted at the start of October 2007 that 
the EBITDA generated in full-year 2007 is set to be 10% lower 
year-on-year. This result would be the second best result in the 
Company´s history.
Klöckner & Co expects the sound order trend to continue in 2008 and 
prices to remain stable overall. However, due to general economic 
risks, weaker performance in North America cannot be ruled out. 
Klöckner & Co expects to generate sound earnings also in 2008 after 
taking acquisitions und measures implemented under the STAR 
performance program into account.
About Klöckner & Co AG:
Klöckner & Co is the largest independent producer and distributor of 
steel and metal products in the European and North American markets 
combined. The core business of the Klöckner & Co Group is the storage
and distribution of steel and non-ferrous metals. About 200,000 
active customers are supplied through approximately 250 distribution 
locations in 15 countries in Europe and North America. Klöckner & Co 
was founded more than 100 years ago by Peter Klöckner. During the 
financial year 2006, the Company achieved sales of approximately 
EUR5.5 billion with around 10,000 employees. The shares of Klöckner &
Co Aktiengesellschaft are admitted to trading on the official market 
segment (Amtlicher Markt) of the Frankfurt Stock Exchange 
(Frankfurter Wertpapierbörse) with simultaneous admission to the 
sub-segment (Prime Standard) to the official market with further 
post-admission obligations. ISIN: DE000KC01000; WKN: KC0100; Common 
Code: 025808576. Since the end of January 2007, Klöckner & Co shares 
have been listed in the Deutsche Börse MDAX® Index.
Contacts:
Peter Ringsleben, Claudia Uhlendorf - Corporate Communications
Klöckner & Co AG
Am Silberpalais 1
D - 47057 Duisburg
Peter Ringsleben
Phone: +49-203-307-2800
Fax: +49-203-307-5060
E-mail:  peter.ringsleben@kloeckner.de
Claudia Uhlendorf
Phone: +49-203-307-2289
Fax: +49-203-307-5103
E-mail:  claudia.uhlendorf@kloeckner.de
end of announcement                               euro adhoc 14.11.2007 07:25:56

Further inquiry note:

Claudia Uhlendorf
Telefon: +49(0)203-307-2289
E-Mail: claudia.uhlendorf@kloeckner.de

Branche: Metal Goods & Engineering
ISIN: DE000KC01000
WKN: KC0100
Index: CDAX, Classic All Share, Prime All Share, MDAX
Börsen: Börse Frankfurt / official dealing/prime standard
Börse Berlin / free trade
Börse Hamburg / free trade
Börse Stuttgart / free trade
Börse Düsseldorf / free trade
Börse München / free trade

Original content of: Klöckner & Co SE, transmitted by news aktuell

More stories: Klöckner & Co SE
More stories: Klöckner & Co SE