Klöckner & Co (KCO) Baader Investment Conference presentation summary

Company overview and market position

• Employs approximately 6,400 people, serves over 60,000 customers, and operates at more than 120 locations globally.

• Achieved €6,957 million in sales and 4,248 thousand tons in shipments in FY 2023.

• Holds 9% market share in Europe and 7% in the USA, positioning as a leading player in fragmented steel markets.

• Offers a comprehensive value chain from sourcing to logistics, products, and services.

• Maintains a strong presence in North America (57% of business), Germany/Austria (26%), Switzerland (15%), and minor exposure in Benelux and Brazil.

Strategic direction and transformation

• Focuses on becoming a leading one-stop-shop for steel, materials, equipment, and processing in Europe and the Americas.

• Pursues customer growth, digitalization, operational excellence, and partner network expansion.

• Targets sales growth above market, ROCE above cost of capital, and more than doubling normalized EBITDA by 2025.

• Shifted portfolio toward higher value-added business (HVAB) and core markets, reducing exposure to low-margin distribution.

• Completed European efficiency program and paid a third consecutive dividend.

Portfolio optimization and financial performance

• Sold low-margin European distribution business (~10% of sales, 20% of FTEs) and acquired profitable North American assets.

• HVAB now represents around half of EBITDA before special effects in H1 2024, reducing earnings volatility.

• Q2 2024 shipments rose 11.5% YoY, sales remained flat, and EBITDA reached €42m despite challenging market conditions.

• Strong operating cash flow of €61m in Q2 2024, with net financial debt at €779m.

• Maintains a solid balance sheet with a 46% equity ratio and 5.4x leverage.