Klöckner : Interim Report Q2 2021

Q2

Interim Report

as of June 30, 2021

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S ERVICES

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Klöckner & Co Group Figures

Interim Group Management Report
Klöckner & Co Group Figures ...........................................................................	3
Interim Group Management Report ...............................................................	4
Klöckner & Co Share.........................................................................................	25
Consolidated statement of income ..............................................................	28
Statement of comprehensive income Group..............................................	29
Consolidated statement of financial position ............................................	30
Consolidated statement of cash flows.........................................................	32
Summary of changes in equity.......................................................................	33
Selected explanatory notes to the condensed interim consolidated
financial statements for the six-month period ending June 30, 2021 ..	34
Review report.....................................................................................................	46
Responsibility statement.................................................................................	47

INTERIM REPO RT HY1 2 02 1	FIN ANCIAL S TATEME NTS	3

Klöckner & Co Group Figures

for the six-month period ending June 30, 2021

Shipments and income statement			Q2 2021		Q2 2020		Variance	HY1 2021		HY1 2020		Variance
Shipments	Tto	1,295		1,070	225		2,582		2,435	147
Sales	€ million	1,847		1,171	676		3,373		2,619	754
Gross profit	€ million	525		226	299		913		511	402
Gross profit margin	%		28.4		19.3		9.1%p	27.1		19.5		7.6%p
Earnings before interest, taxes,
depreciation and amortization (EBITDA)	€ million	270			- 61	331		411			- 40	451
EBITDA before material special effects	€ million	271		11	260		401		32	369
EBITDA margin	%		14.6			- 5.2		19.8%p	12.2			- 1.5		13.7%p
EBITDA margin before material special
effects	%		14.7		0.9		13.8%p	11.9		1.2		10.7%p
Earnings before interest and taxes (EBIT)	€ million	240			- 109	349		351			- 122	473
Earnings before taxes (EBT)	€ million	246			- 116	362		351			- 138	489
EBT before material special effects	€ million	246			- 31	277		340			- 52	392
Net income	€ million	215			- 111	326		301			- 132	433
Net income attributable to shareholders of
Klöckner & Co SE	€ million	212			- 111	323		297			- 132	429
Earnings per share (basic)	€	2.13			- 1.11	3.24		2.98			- 1.32	4.31
Earnings per share (diluted)	€	1.88			- 1.11	2.99		2.66			- 1.32	3.98
Cash flow statement				Q2 2021			Q2 2020		Variance		HY1 2021			HY1 2020		Variance
Cash flow from operating activities	€ million		74			98		- 24		91			1		90
Cash flow from investing activities	€ million	- 16		- 13		- 3	- 27		- 23		- 4
Free cash flow*)	€ million	58		85		- 27	65			- 22	87
														Variance		Variance
														June 30,		June 30,
							June 30,				June 30,			2021 vs.		2021 vs.
								Dec. 31,				Dec. 31,		June 30,
Balance sheet						2021		2020		2020			2020		2020
Net Working Capital**)			€ million			1,282	967		1,135		315	147
Net financial debt			€ million	303	351		476			- 48		- 173
Gearing***)			%		21.7	33.9		45.7			- 12.2%p		- 24.1%p
Equity			€ million	1,410	1,043		1,048		367	362
Equity ratio			%		43.5	39.9		38.8			3.5%p		4.6%p
Total assets			€ million	3,244	2,613		2,699		631	545
														Variance		Variance
														June 30,		June 30,
							June 30,				June 30,			2021 vs.		2021 vs.
								Dec. 31,				Dec. 31,		Dec. 31,
Employees						2021		2020		2020			2020		2020
Employees as of the end of the reporting period					7,083	7,274		7,915			- 191		- 832

*) Free cash flow = Cash flow from operating activities plus cash flow from investing activities.

**) Net working capital = Inventories plus trade receivables (including contract assets) plus supplier bonus receivables less trade liabilities.

***) Gearing = Net financial debt / (Equity ./. non-controlling interests ./. goodwill resulting from acquisitions subsequent to May 23, 2019).

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Interim Group Management Report

Key developments in the first six months of 2021 and outlook

• Strongest quarter and first half-year in operating terms since IPO in 2006
• EBITDA before material special effects €401 million in first half of 2021, compared with €32 million in the prior-year period. Including material special effects, EBITDA for the first six months was €411 million
• Second-quarterEBITDA before material special effects €271 million, within the adjusted €260-290 million guidance range
• Very strong net income of €215 million in second quarter and €301 million in first half year
• Shipments of 2.6 million tons up 6.1% year-on-year due to pandemic; recovery continues
• Sales of €3.4 billion up very considerably by 28.8% year-on-year due to price factors
• Proportion of Group sales via digital channels at 45% in second quarter of 2021 (Q2 2020: 38%)
• EBITDA before material special effects of €200-230 million forecast for the third quarter
• EBITDA of €650-700 million before material special effects forecast for the full-year

INTERIM REPO RT HY1 2 02 1	FIN ANCIAL S TATEME NTS	5

Our strategy - Klöckner&Co 2025: Leveraging Strengths

[With our "Klöckner & Co 2025: Leveraging Strengths" strategy, we are building on the various strengths we have created in recent years and leveraging them to take the next evolutionary step, leading Klöckner & Co into a successful future. We are now ready to grow.

The market environment in the steel distribution business is very complex and challenging. It is characterized by high market fragmentation, lagging digitalization and increasing demand for customized solutions. But this also means it is rich in opportunities and holds potential for those who are willing to lead the way. After spending recent years tackling these challenges, Klöckner & Co has amassed special capabilities and expertise: our digital transformation is well advanced and, thanks to the consistent execution of the Surtsey project, we have improved our cost base substantially. Moreover Klöckner & Co together with its sub-brands have an international high-quality brand in the market and an excellent reputation. We have gained our first valuable experiences in collaborating with partners, and we have initiated a deep and comprehensive cultural change within the com- pany. Now we will build on this foundation and take Klöckner & Co to the next level on the way to becoming a platform company.

We are focusing on generating added value for all the Company's stakeholders. Customers and partners benefiting from seamless integrated, digitalized and automated processes. For employees, we aim to foster a culture of empowerment and collaboration, upskilling them for the future and enabling them to grow and develop. For shareholders, our focus on a higher level of profitability also means a focus on the sustainable financial success of their investment in Klöckner & Co. Furthermore, we strive to make a positive impact on society and the environment and continue our efforts to reduce our environmental impact and our carbon footprint in particular.

We aim to intensify Klöckner & Co's platform-based focus, merge the digital and the physical sides of our business more closely together and make better use of our internal and external networks. Inefficiencies in low- margin steel and metal distribution are still primarily caused by linear supply chains and a lack of transparency. By integrating third parties into our single platform while digitalizing and automating core processes as the next step in Klöckner & Co's evolution, we will be able to eliminate existing inefficiencies in the value chain and lower variable costs significantly.

The information contained in square brackets [ ] in this Management Report represents unreviewed and voluntary disclosures that have been read critically by the auditor.