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 significa

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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