EANS-News: Klöckner & Co SE / Klöckner & Co SE: weak first half of 2009, marked improvement in earnings expected during the second half

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Duisburg (euro adhoc) - • Sales volume, sales and earnings in the
first half of the year far below previous year´s levels • Operating
earnings climbed considerably from the first quarter to the second
quarter, while remaining negative • Cash flow increased, net
financial debt lowered considerably • Cost-cutting and
capacity-reducing measures further successfully realized •
Significant improvement expected in the second half of year assuming
stabilization of demand following the nearly completed destocking
along the value chain, bottoming of prices and cost savings

Duisburg, August 13, 2009 - The steep drop in sales volume and
earnings that began last year continued during the first six months
of 2009. In the second quarter of 2009, however, Klöckner & Co was
able to make a significant recovery from other early losses, even
though its results for the second quarter and the six month period
remained negative. The company finished the second quarter with
EBITDA (earnings before interest, taxes, depreciation and
amortization) of -EUR31 million, compared with -EUR132 million in the
first quarter. This improvement was generated in particular by
stabilizing sales prices as well as cost reductions produced by the
Company´s timely program of business measures. For the entire
six-month period, EBITDA totaled -EUR163 million compared with +
EUR321 million in the same period last year. During the second half
of the year, the Management Board expects earnings to considerably
improve, buttressed by stabilizing prices and volumes as well as the
successful introduction of cost-cutting steps. However, these
expected improved earnings will be unable to offset the negative
result from the first half of the year.

In contrast to the Company´s negative earnings performance, Klöckner
& Co increased cash flow from operating activities to EUR468 million
by systematically reducing net working capital during the first half
of 2009. As a result, net financial debt was cut by 79.3%, falling
from EUR571 million at the end of the year to EUR118 million at the
end of the first half of 2009.

"After the dramatic drop in earnings during the first quarter, we
were able to significantly improve the situation in the second
quarter and, in particular, to continue lowering our net financial
debt. We are cautiously optimistic about the second half of the year
and expect a significant improvement in earnings so long as prices
and volumes continue to firm up," says Dr. Thomas Ludwig, Chairman of
the Management Board of Klöckner & Co SE.

During the first six months of the year, sales volume at the Klöckner
& Co Group totaled 2.1 million tons, a drop of 38.9% below the
previous year´s level (H1/2008: 3.5 million tons). The decrease in
sales volume resulted from the extremely weak macroeconomic
conditions and the loss of sales volume that followed the sale of the
Canadian subsidiary Namasco Ltd. in July 2008. Excluding Namasco
Ltd., the drop in sales volume totaled 33.0%. As a result,
consolidated sales, including the effects of divestments, fell 42.7%
compared to the first half-year period last year to EUR2.1 billion
(H1/2008: EUR3.6 billion). Mirroring EBITDA performance, EBIT
(earnings before interest and taxes) totaled -EUR197 million in the
first half of the year (H1/2008: + EUR290 million). Consolidated
income before taxes was -EUR228 million (H1/2008: + EUR257 million).
As a result of positive tax effects, Klöckner & Co completed the
first half of 2009 with a consolidated net loss of -EUR175 million
(H1/2008: consolidated net profit of +EUR178 million). Despite the
negative results in the first half of 2009, the Company´s equity
share decreased only slightly, from 35% to 34%. In another step, the
Company´s workforce was adjusted in response to the negative volume
trends within the context of its immediate action programs. As a
result, the workforce has been reduced by 1,300 employees, including
people with short-term contracts and temporary workers, since October
2008. Ultimately, the workforce will be cut by about 1,500 employees
as part of the programs.

Further steps to improve the market position of Klöckner & Co were
introduced at the beginning of the third quarter. "The focus of these
new measures is the optimization of product porfolio, customer
segmentation and value added services services. The aim is to use the
structural changes arising from the crisis as opportunities and
further improve our market position against competitors," Dr. Thomas
Ludwig said.

After Klöckner & Co successfully completed the restructuring of its
financing in May by modifying its syndicated loan and the European
ABS program, an additional convertible bond with a volume of EUR97.9
million, a maturity of five years and a coupon of 6% was issued in
June 2009. As a result, Klöckner & Co has more than EUR1.6 billion in
financing facilities that are largely free of performance-based
covenants.

About Klöckner & Co Klöckner & Co is the largest producer-independent
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 185,000 active customers are supplied through around
250 distribution locations by around 9,500 employees in 15 countries
in Europe and North America. During the financial year 2008, the
Company achieved sales of approximately EUR6.7 billion. The shares of
Klöckner & Co SE are admitted to trading on the regulated market
segment (Regulierter Markt) of the Frankfurt Stock Exchange
(Frankfurter Wertpapierbörse) with simultaneous admission to the
sub-segment to the regulated market with further post-admission
obligations (Prime Standard). Klöckner & Co shares are listed in the
MDax® Index of Deutsche Börse. ISIN: DE000KC01000; WKN: KC0100;
Common Code: 025808576.

Disclaimer This press release contains certain forward-looking
statements. Forward-looking statements are based on current estimates
and assumptions that we make to the best of our present knowledge.
These forward-looking statements are subject to risks, uncertainties
and other factors which could cause actual results, including our
financial condition and results of operations, to differ materially
and more negatively from the results that we have expressly or
implicitly assumed or described in these forward-looking statements.
Our business is also subject to a number of risks and uncertainties
that could cause a forward-looking statement, estimate or prediction
to become inaccurate. In light of these risks, uncertainties and
assumptions, future events described in this press release may also
not occur.

end of announcement euro adhoc
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ots Originaltext: Klöckner & Co SE
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:

Peter Ringsleben - Corporate Communications

Phone: +49-203-307-2800

E-mail: peter.ringsleben@kloeckner.de

Claudia Uhlendorf - Corporate Communications

Phone: +49-203-307-2289

E-mail: claudia.uhlendorf@kloeckner.de

Dr. Thilo Theilen - Investor Relations

Phone: +49-203-307-2050

E-Mail: thilo.theilen@kloeckner.de

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