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MarketScreener Homepage  >  Equities  >  Xetra  >  Klöckner & Co SE    KCO   DE000KC01000

KLÖCKNER & CO SE

(KCO)
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Klöckner : Q3 2020 Interim Statement

11/03/2020 | 01:10am EST

Interim Management Statement for 9M 2020

January 1, 2020 to September 30, 2020

  • Operating income (EBITDA) before material special effects of €72 million in the first nine months of 2020, compared with €110 million in the prior-year period. Including the material special effects of the Surtsey transformation project measures, EBITDA amounted to €-2 million
  • Third-quarterEBITDA before material special effects of €40 million, at upper end of the raised €30 million to €40 million guidance range
  • Shipments of 3.7 million tons in the first nine months, down by 16.4% on the prior-year period due to im- pact of the COVID-19 pandemic
  • Driven by prices, sales declined even more sharply, by 21.2% on the prior-year period to €3.9 billion
  • Share of sales generated via digital channels further increased to 42% in the third quarter (Q3 2019: 30%), already exceeding the full-year target
  • Full-year2020 EBITDA expected to be between €75 million and €95 million before material special effects and expectation of a significantly positive cash flow from operating activities

GROUP SHIPMENTS, SALES AND EARNINGS CONSIDERABLY DOWN ON PRIOR YEAR DUE TO IMPACT OF COVID-19 PANDEMIC

Shipments totaled 3.7 million tons in the first nine months, representing a drop of 16.4% relative to the prior- year period. This decrease is primarily attributable to the impact of the COVID-19 pandemic and affected all operating segments, whereby the business in Switzerland was relatively less affected. In line with the decreased shipments, sales also fell more sharply due to lower price levels, down by 21.2% from €4.9 billion to €3.9 bil- lion.

Adjusted for material special effects, Group operating income declined from €110 million in the prior-year period to €72 million in the first nine months of the 2020 fiscal year, also largely as a result of the pandemic. EBITDA was further negatively impacted by material special effects of €73 million, primarily related to personnel measures. Including these special effects, EBITDA amounted to €-2 million, compared with negative €136 million in the prior-year period.

Consequently, the net loss was considerably higher than the prior-year figure of €4 million at €136 million. Basic earnings per share therefore came to €-1.38, compared with €-0.05 in the prior-year period.

I N T ER I M MA NAGE ME N T

S TATE ME NT 9M 20 20

F I NA N C IA L I NFOR M AT IO N

2

EARNINGS BY OPERATING SEGMENT

In the Kloeckner Metals US segment, EBITDA before material special effects declined to €26 million from

€44 million in the prior year. This decrease was due in particular to lower volumes and prices. The countermeasures we immediately implemented - mainly in relation to personnel but also to volume-related costs - consistently reduced OPEX, which mitigated the decline in EBITDA. Including material special effects, EBITDA declined to €22 million (9M 2019: €47 million).

EBITDA in the Kloeckner Metals Switzerland segment rose, up from €44 million in the prior-year period to

€51 million. This growth was driven by the reinforcing steel product line in particular. Earnings were also significantly bolstered by the lower OPEX.

In the Kloeckner Metals Services Europe segment, EBITDA before material special effects declined from

€20 million to €10 million due to weak demand from the automotive industry. This decrease was partially offset by lower OPEX. Personnel restructuring measures reduced earnings by €8 million, resulting in overall EBITDA of €2 million.

At €1 million, EBITDA before material special effects in the Kloeckner Metals Distribution Europe segment was considerably down on the prior-year figure of €19 million. Including the restructuring expenses of €61 million, EBITDA was €-61 million, compared with €50 million in the prior-year period. However, the prior-year figure was pushed up by the proceeds from the sale of a site in London (€36 million).

VERY SOLID FINANCIAL POSITION SUSTAINED

Total assets amounted to €2,675 million as of September 30, 2020, down roughly 8% on the prior year-end figure due to strict working capital management and lower prices.

Equity decreased from €1,182 million to €1,022 million. This was attributable to the net loss (€136 million), adjustments to pension obligations recognized in equity (€-13 million) and the effects from the translation of our foreign business activities (€-13 million). The equity ratio remained solid at 38%

(December 31, 2019: 41%).

Due to our extremely strict net working capital management, net working capital stood at €1.1 billion and

  • rather than experiencing the usual seasonal increase - was significantly below both the figure as of the 2019 year-end and the level as of September 30, 2019 (€1.4 billion). Net financial debt declined accordingly from €445 million as of December 31, 2019 to a remarkably low €427 million at the end of the third quarter of 2020.

The reduction in net working capital was also the main driver of the cash inflow from operating activities of €68 million in the first nine months of the fiscal year, compared with a cash outflow of €6 million in the prior- year period. Deducting the cash outflow from investing activities of €49 million gives a free cash flow of €19 million (9M 2019: €9 million).

I N T ER I M MA NAGE ME N T

S TATE ME NT 9M 20 20

F I NA N C IA L I NFOR M AT IO N

3

STABLE FINANCING WITH IMPROVED MATURITY PROFILE

In October 2020, the extension of the European ABS program until October 2023 was agreed ahead of time at more favorable terms, despite the challenging business environment caused by the COVID-19 pandemic. Given the reduced need for working capital financing in the future as a result of the Surtsey transformation project, the volume was decreased from €300 million to €220 million. As of the reporting date, drawings under the program - which is a central component of our Group financing - totaled around €129 million. The extension as planned further improves our maturity profile and underpins our financial strength.

CONSISTENT IMPLEMENTATION OF THE DIGITAL TRANSFORMATION

The major negative economic impact of the COVID-19 pandemic on Klöckner & Co's core business was significantly cushioned by the digitalization and restructuring measures under the ongoing project Surtsey, in particu- lar. As part of this transformation project, the total workforce is to be reduced by 1,200 and 19 sites will be closed. Since the beginning of the year, the workforce has been reduced by more than 580 full-time equivalents (FTEs) and four sites in the USA had been closed by the end of the third quarter.

The share of sales generated via digital channels rose at an accelerated pace, already reaching 42% in the third quarter (Q3 2019: 30%). In addition, the automation of Klöckner & Co's core processes was consistently driven forward through the AI-based applications Kloeckner Assistant and XOM eProcurement. The Kloeckner Assistant was successfully rolled out in all country organizations, contributing to the optimization of sales processes throughout the Group. Alongside pure orders, requests for quotes (RFQs) can now also be processed, further automating administrative sales tasks. Moreover, the new Match! feature has gone live in almost all of the European country organizations and the USA. This innovative function enables the Kloeckner Assistant to automatically link the customers' individual product descriptions to the Klöckner product catalog. A total sales volume of more than €180 million from more than 2,000 customers has already been processed through the Kloeckner Assistant. The XOM eProcurement solution for customers using the open industry platform XOM Materials was also enhanced. Opening up the application for procurement in the project business, customers can now automatically enter their project-related invitations to tender, compare quotes software-based and directly place orders. The aggregate gross merchandise value of XOM Materials has already risen to €64 million in the current fiscal year.

OUTLOOK FOR THE REMAINDER OF YEAR

Due to rising COVID-19 infection figures, uncertainty remains with regard to the further development of shipments in 2020. Due to seasonal patterns, we expect that shipments and sales in the fourth quarter will be down on the previous quarter. Based on our well-advanced digitalization and the consistent implementation of our Surtsey transformation project - along with the associated cost effects, which are already beginning to become visible - we anticipate EBITDA before material special effects of €75 million to €95 million for the 2020 fiscal year. We also expect a significantly positive cash flow from operating activities.

I N T ER I M MA NAGE ME N T

S TATE ME NT 9M 20 20

F I NA N C IA L I NFOR M AT IO N

4

Klöckner & Co SE

Financial information

for the nine-month period ending September 30, 2020

Jan. 1-

Jan. 1-

Shipments and income statement

Q3 2020

Q3 2019

Variance

Sep. 30, 2020

Sep. 30, 2019

Variance

Shipments

Tto

1,242

1,420

- 178

3,677

4,398

- 721

Sales

€ million

1,279

1,565

- 286

3,898

4,950

- 1,052

Gross profit

€ million

262

284

- 22

774

890

- 116

Gross profit margin

%

20.5

18.1

+2.4%p

19.8

18.0

+1.8%p

Earnings before, interest, taxes, depreciation and

amortization (EBITDA)

€ million

38

21

+17

- 2

136

- 138

EBITDA before material special effects

€ million

40

26

+14

72

110

- 38

EBITDA margin

%

3.0

1.3

+1.7%p

0.0

2.7

- 2.7%p

EBITDA margin before material special effects

%

3.1

1.6

+1.5%p

1.8

2.2

- 0.4%p

Earnings before interest and taxes (EBIT)

€ million

4

- 13

+17

- 118

37

- 155

Earnings before taxes (EBT)

€ million

- 3

- 24

+21

- 141

5

- 146

Net income

€ million

- 5

- 23

+18

- 136

- 4

- 132

Net income attributable to shareholders of

Klöckner & Co SE

€ million

- 5

- 23

+18

- 137

- 5

- 132

Earnings per share (basic)

- 0.05

- 0.23

+0.18

- 1.38

- 0.05

- 1.33

Earnings per share (diluted)

- 0.05

- 0.23

+0.18

- 1.38

- 0.05

- 1.33

Cash flow statement

Cash flow from operating activities

Cash flow from investing activities

Free cash flow*)

Jan. 1-

Jan. 1-

Q3 2020

Q3 2019

Variance

Sep. 30, 2020

Sep. 30, 2019

Variance

€ million

68

82

- 14

68

- 6

+74

€ million

- 27

- 12

- 15

- 49

15

- 64

€ million

41

70

- 29

19

9

+10

Sep. 30,

Dec. 31,

Sep. 30,

Sep. 30,

Balance sheet

2020

2019

Variance

2020

2019

Variance

Net working capital**)

€ million

1,062

1,119

- 57

1,062

1,356

- 294

Net financial debt

€ million

427

445

- 18

427

634

- 207

Gearing***)

%

42

38

+4%p

42

52

- 10%p

Equity

€ million

1,022

1,182

- 160

1,022

1,225

- 203

Equity ratio

%

38.2

40.5

- 2.3%p

38.2

38.4

- 0.2%p

Total assets

€ million

2,675

2,916

- 241

2,675

3,193

- 518

Employees

Employees as of the end of the reporting period

Sep. 30,

Dec. 31,

Sep. 30,

Sep. 30,

2020

2019

Variance

2020

2019

Variance

7,732

8,253

- 521

7,732

8,370

- 638

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

**) Net Working Capital = Inventories plus trade receivables including contract assets and supplier bonus receivables less trade payables.

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

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Klöckner & Co. SE published this content on 03 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 November 2020 06:09:03 UTC


© Publicnow 2020
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Sales 2020 5 321 M 6 457 M 6 457 M
Net income 2020 -140 M -170 M -170 M
Net Debt 2020 355 M 431 M 431 M
P/E ratio 2020 -5,63x
Yield 2020 0,95%
Capitalization 770 M 934 M 935 M
EV / Sales 2020 0,21x
EV / Sales 2021 0,19x
Nbr of Employees 7 732
Free-Float 71,7%
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Number of Analysts 7
Average target price 7,86 €
Last Close Price 7,92 €
Spread / Highest target 25,1%
Spread / Average Target -0,72%
Spread / Lowest Target -36,8%
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Managers and Directors
NameTitle
Gisbert Rühl Chairman-Management Board & Co-COO
Dieter H. Vogel Chairman-Supervisory Board
John Ganem Co-Chief Operating Officer
Oliver Falk Chief Financial Officer
Tobias Kollmann Member-Supervisory Board
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