Klöckner & Co SE - Analysts' and Investors' Conference FY 2016

FY 2016 Results

Analysts’ and Investors’ Conference

March 1, 2017

Gisbert Rühl | CEOMarcus A. Ketter | CFOKarsten Lork | Member of the Management BoardBill Partalis | Member of the Management Board

No.2

DisclaimerThis presentation contains forward-looking statements which reflect the current views of the management of Klöckner & Co SE with respect to future events. They generally are designated by the words “expect”, “assume”, “presume”, “intend”, “estimate”, “strive for”, “aim for”, “plan”, “will”, “endeavor”, “outlook” and comparable expressions and generally contain information that relates to expectations or goals for economic conditions, sales proceeds or other yardsticks for the success of the enterprise. Forward-looking statements are based on currently valid plans, estimates and expectations. You therefore should view them with caution. Such statements are subject to risks and factors of uncertainty, most of which are difficult to assess and which generally are outside of the control of Klöckner & Co SE. The relevant factors include the effects of significant strategic and operational initiatives, including the acquisition or disposition of companies. If these or other risks and factors of uncertainty occur or if the assumptions on which the statements are based turn out to be incorrect, the actual results of Klöckner & Co SE can deviate significantly from those that are expressed or implied in these statements. Klöckner & Co SE cannot give any guarantee that the expectations or goals will be attained. Klöckner & Co SE – notwithstanding existing obligations under laws pertaining to capital markets – rejects any responsibility for updating the forward-looking statements through taking into consideration new information or future events or other things.

In addition to the key data prepared in accordance with International Financial Reporting Standards, Klöckner & Co SE is presenting non-GAAP key data such as EBITDA, EBIT, Net Working Capital and net financial liabilities that are not a component of the accountingregulations. These key data are to be viewed as supplementary to, but not as a substitute for data prepared in accordance with International Financial Reporting Standards. Non-GAAP key data are not subject to IFRS or any other generally applicable accounting regulations. Other companies may base these concepts upon other definitions.

FY 2016 Results | Analysts’ and Investors’ Conference | Klöckner & Co SE

No.3

1. Highlights and update on strategy2. Financials3. Outlook4. Appendix

Agenda


No.4

Highlights FY 201601

• Sales decreased by 11.1% to €5.7bn mainly due to lower price level and site closures in Europe as part of the finished restructuring program KCO WIN+

• Despite lower sales and volumes gross profit went up from €1,237m to €1,315m supported by increasing prices over the course of the year and strategic measures

• Consequently gross profit margin increased to 22.9% after 19.2% in FY 2015

• Operating result (EBITDA) of €196m slightly above guidance range of €180m to €190m

• Sales share via digital channels continuously increased from 9% in Q1 to 12% in Q4 2016

• Share of sales with higher value added products and services up from 39% to 46%

• Successfully finished KCO WIN+ program with incremental EBITDA contribution of €28m in 2016

• Organization for “One Europe” to integrate European distribution activities in place since beginning of 2017

• Well on track to strongly improve EBITDA yoy and qoq in Q1 2017 to between €65m and €75m

• EBITDA for FY 2017 expected to increase slightly


No.5

Significant increase of EBITDA in 201601EBITDA impact: Q4 yoy

Market-relatedGP effect of €25m

Comments

• Results favored by positive market effects on EBITDA of overall €25m in Q4 and €105m in FY

• Positive price effect of €35m in Q4 and €123m in FY 2016

• Negative volume effect of €10m in Q4 and €18m in FY 2016

11

35

8

37

92

OPEX

-7

KCO WIN+ Effect

PriceEffect

Volume Effect

-10

Q4 2015 (bef. restr.)

Restructuring Costs

Q4 2015 Q4 2016

86

123

28

196

24

63

FY 2016OPEX

-23

KCO WIN+ Effect

Price Effect

Volume Effect

-18

FY 2015(bef. restr.)

Restructuring Costs

FY 2015

Market-relatedGP effect of €105m

EBITDA impact: FY yoy Steel price development HRC


No.6

01 Klöckner & Co strategy


G R O W T H A N D O P T I M I Z A T I O N

D I F F E R E N T I A T I O N

D I G I T A L I Z A T I O N

K L Ö C K N E R & C O 2 0 2 0

P R O D U C T S A N D S E R V I C E S

O P E R A T I O N S

E X T E R N A L & I N T E R N A L G R O W T H

Digitalization of the supply chain and development of a industry platform

Accelerated expansion of higher value-added products and services

One Europe and further optimization

External growth with focus on higher value-added business, internal growth with focus on the US market

No.7

01 Digitalization strategy futher advanced


• Service platform Kloeckner Connect as central access point for onlineshops, contract portals and order transparency tools very well received by customers

• Transition from service platform to industry platform starting this year

• New office space in Berlin rented for kloeckner.i to enable further growth• Staff of 40 digital experts in the fields of innovation & product, software

development, digital marketing & sales and business intelligence & analytics

• Innovation partnership with arago, a pioneer in artificial intelligence• Cognizant, a leading provider of information technology, selected as strategic

partner for IT services to support digitalization of operations across Europe

Internal organization

Digital platforms

• Sales share via digital channels gradually increased to 12% in Q4 2016• Margins* of onlineshop sales on total cost basis in Germany twice as high and

on marginal cost basis 8x higher • Further acceleration of online sales growth expected through integration of third

parties with additional products and customers through OCI interfaces

New digital partnerships

Online sales

*Related to the German onlineshop and can not be projected on the full digital-generated sales

No.8

Comprehensive roll out of service platform and digital tools01


Contract portal

launched Validation for implementation in 2017

Order transparencytool


Onlineshop


Service platform


No.9

Vertical industry platform as third step of digitalization strategy01


Steel Other materials andcommodities

Building materialsChemicals

I N D U S T R y -P L A T F O R M

Overlap

Amazon BusinessAlibaba Group

ContorionMercateo

Vertical industry specific platforms

Horizontal cross-

industryplatforms

Competition

Com

plem

enta

rypr

oduc

ts

Com

plem

enta

rypr

oduc

ts

No.10

Higher value-added strategy further advanced01


>20%

>30%<30%

>20%

T A R G E T 2 0 1 8

• Further acquisitions in the attractive fabrication segment considered• Fabrication as next strategic step – following expansion of service center

activities – offering higher margins and customer loyalty

• American Fabricators as blueprint for further acquisitions

• Enlargement of 3D Tube Laser Centers in the UK and Germany• Laser number 4,5 and 6 put into operation in Dudley/UK

• Third 3D-Laser in Velten/Germany in ramp-up phase

• Expansion of business with aluminum via Becker Stahl-Service/Germany• Aluminum as key growth material for the automotive industry

• Slitting line with start of operation already this year

• Completion of the entire plant including a complementary cut-to-length line scheduled for 2018

18% Higher value-add

products

28%Higher value-add services

31% Standard products

23% Conventional

services

A C T U A L 2 0 1 6

Higher value-add products and

services:Expansion from 46% in 2016 to more than 50%

No.11

Integration of European distribution activities to increase profitability01


2017

2018 €15mTotal annual impact of around €30m from 2019 onwards

2019 €5m

€10m

Centralized organization will facilitate:

• One CEO and uniform management for both cross border regions in Europe

• A Europe-wide cross functional approach for higher value-add, digitalization, procurement, finance and logistics

Organizational structure

• Additional synergies in procurement

• Improved best practice sharing

• Centrally steered implementation of digitalization and higher value-add strategy

• Cross-border optimized logistics

Region 1: Austria, Belgium, Germany and the Netherlands

Region 2: France and UK

No.12


Agenda


No.13

Shipments and sales02

• Shipments down yoy due to exit of low marginbusiness due to restructuring

• Qoq seasonal decrease in Europe and weakerdemand for industrial products in the US

• Sales decreased yoy and qoq signifcantly lesspronounced than shipments due to higher averagesales prices

Q2 2016

1,643

Q1 2016

1,556

Q4 2015

1,535

Q3 2015

1,636

Q2 2015

Q1 2015

1,661

Q4 2014

1,555

1,645

Q3 2016

1,500

Q4 2016

1,450 1,397

Q3 2016

1,430

Q2 2016

Q4 2016

1,517

Q1 2016

Q4 2014

1,577

1,456

Q3 2015

1,597

Q2 2015

1,693

Q4 2015

1,386

Q1 2015

1,697

-5.5%

-3.4%

-4.0%

-2.3%

Shipments (Tto) Sales (€m)


No.14

Gross profit and EBITDA02

* Before restructuring cost.** 2014 amounts restated due to the initial application of IFRIC 21 (Levies).

7172

11

30

10

33

Q4 2016

37

Q3 2016

Q2 2016

Q1 2016

16

Q4 2015

Q3 2015

Q2 2015

36

Q1 2015

Q4 2014

1.20.71.92.1

0.6

2.12.6

5.04.8

325

Q1 2015

310

Q4 2014

297

Q3 2015

311

Q2 2015

362

Q1 2016

304

Q4 2015

Q3 2016

329

Q2 2016

309

Q4 2016

319

20.4

19.419.2

18.2

19.6

22.0

23.822.823.0

• Margin stabilized with ~ 23% well abovethe 20 percent mark of Q4 2015

• Substantial improvement yoy

• EBITDA in Q4 improved yoy by €26m, qoq EBITDA came down due to usual seasonal pattern

• EBITDA margin in Q4 up by 1.9p% yoy to 2.6%

Gross profit* (€m) / Gross margin* (%) EBITDA*,** (€m) / EBITDA margin*,** (%)


No.15

Segment performance FY201602

• Europe

• EBITDA up from €69m before restructuring by €82m to €151m

• Significant positive price effect (€53m)

• KCO WIN+ contributes €24m to EBITDA improvement

• OPEX includes incremental non-recurring gains on sale of assets of €7m

Europe (€m)

Americas (€m)

35 37

7074

YTD 2016 Actual

OPEX

-11

KCO WIN+ Effect

4

Price Effect

Volume Effect

-26

YTD 2015 Actual(before

restruct.)

Restruct.2015

2

YTD 2015 Actual

(reported)

55 69

53

24

151

14

Volume Effect

8

YTD 2015 Actual(before

restruct.)

Restruct.2015

YTD 2015 Actual

(reported)

YTD 2016 Actual

OPEX

-3

KCO WIN+ Effect

Price Effect

• Americas

• EBITDA up from €37m before restructuring by €37m to €74m

• Negative volume effect due to weaker demand forindustrial products and also due to the sale of pipebusiness in Q2 2016

• Even stronger positive price effect (€70m) than in Europe

Comments


No.16

Cash flow and net debt development02

36

• Despite improving business only moderate NWC build-up of €22m

• Operating cash flow includes €32m pay-out for restructuring

• “Other” includes changes in other provisions and other operating assets/liabilities as well as non-cash items

CommentsCash flow reconciliation FY2016 (€m)

• Net financial debt reported skewed due to prolongation of f/x swaps (€67m) and translation effects (€5m)

Net financial debt 12/2016 vs. 12/2015 (€m)

-4

21

73

196-32

Taxes

-24

Interest

-25

Change in NWC

Other

-7

Disposal gains

-13

Cash-out restr.

Free cash

flow 12M 2016

Capex (net)

-52

Cash flow from operating activities

-22

EBITDA 12M 2016

18

73

F/X, Swaps

-72

Capex (net)

-52

CF from operating activities

Net debt 12.2015

385

Other

-5

Finance Leases

-21

Equity Component Convertible

Net debt 12.2016

444


No.17

Maturity profile Dec. 2016 – well balanced & diversified funding portfolio 02


Facility Committed (€m)Drawn amount (€m, IFRS*)

FY 2016 FY 2015

Syndicated Loan 360 0 0

ABS Europe 300 115 91

ABS/ABL USA 522 218 184

Promissory Notes - - 135

Convertible 2010 - - 25

Convertible 2016 1) 148 131 -

Bilateral Facilities 2) 318 114 115

Total Debt 1,648 578 550

Cash 134 165

Net Debt 444 385

€m FY 2016

Adjusted equity 1,118

Net debt 444

Gearing 3) 40%

Maturity profile of committed facilities & drawn amounts (€m)

Left side: committed facilities Right side: drawn amounts (nominal amounts)

ABS/ABL USA BilateralsSyndicated Loan ABS Europe

* Including interest accrued, excluding deferred transaction costs

1) Principal €148m, equity component €18m at issuance (08.09.2016). 2) Including finance lease.3) Net debt/Equity attributable to shareholders of Klöckner & Co SE less goodwill from business

combinations subsequent to May 23rd, 2013.

14855

522

30306618

43

248

1

1

15

15

18

367

218

148

130

671

115

620

300

30573

2017 2018 2019 2020 2021 Thereafter

Convertible Bond

No.18


Agenda


No.19

Shipbuilding

Segment specific business outlook 201703

Energy industry

Real steeldemand

Europe

~ 1-2%

Construction industry

Manufacturing, machinery and mechanical engineering, etc.

Automotive industry

US

~ 3-4%


No.20

Outlook 03

Q1 2017• Seasonally higher sales • EBITDA anticipated to be significantly up to between €65m and €75m supported by elevated steel price

level

FY 2017• Higher sales anticipated due to better demand and on average higher price level• EBITDA expected to rise slightly compared to the 2016 figure of €196m


No.21


Agenda


No.22

Quarterly and FY results04

(€m) Q42016

Q32016

Q22016

Q12016

Q42015

Q32015

Q22015

Q12015

Q42014*

Q32014*

FY 2016

FY 2015

FY 2014

FY 2013

Shipments (Tto) 1,450 1,500 1,643 1,556 1,535 1,636 1,645 1,661 1,555 1,690 6,149 6,476 6,598 6,445

Sales 1,397 1,430 1,517 1,386 1,456 1,597 1,693 1,697 1,577 1,675 5,730 6,444 6,504 6,378

Gross profit 319 329 362 304 297 311 320 310 309 325 1,315 1,237 1,261 1,188

% margin 22.8 23.0 23.8 22.0 20.4 19.4 18.9 18.2 19.6 19.4 22.9 19.2 19.4 18.6

EBITDA rep. 37 71 72 16 2 28 -17 10 33 61 196 24 191 124

% margin 2.6 5.0 4.8 1.2 0.2 1.8 -1.0 0.6 2.1 3.6 3.4 0.4 2.9 2.0

EBIT -4 48 49 -8 -297 5 -44 -15 8 38 85 -350 98 -6

Financial result -10 -8 -7 -8 -12 -12 -13 -12 -13 -14 -33 -49 -59 -73

Income before taxes -14 40 42 -16 -309 -7 -56 -27 -4 24 52 -399 39 -79

Income taxes 2 -9 -9 2 45 -2 1 6 1 -8 -14 50 -17 -12

Net income -12 31 33 -14 -263 -9 -55 -22 -4 16 38 -349 22 -90

Minority interests 0 0 1 0 -1 0 -1 0 -1 0 -1 -2 0 -6

Net income KlöCo -12 31 32 -14 -263 -9 -54 -21 -4 16 37 -347 22 -85

EPS basic (€) -0.13 0.31 0.32 -0.14 -2.63 -0.09 -0.54 -0.22 -0.04 0.16 0.37 -3.48 0.22 -0.85

EPS diluted (€) -0.13 0.31 0.32 -0.14 -2.63 -0.09 -0.54 -0.22 -0.04 0.16 0.37 -3.48 0.22 -0.85* Restated due to initial application of IFRIC 21.** Restated due to initial application IAS 19 revised 2011.


No.23

Segment performance04

* 2014 amounts restated due to the initial application of IFRIC 21 (Levies).

Q4 2016

867

Q3 2016

873

Q2 2016

950

Q1 2016

903

Q4 2015

891

Q3 2015

931

Q2 2015

970

Q1 2015

979

Q4 2014

893

Q4 2014

973

Q4 2016

883

Q3 2016

891

Q2 2016

963

Q1 2016

870

Q4 2015

919

Q3 2015

986

Q2 2015

1,054

Q1 2015

1,025 49

1112

21

29

18

Q4 2016

36

Q3 2016

55

Q2 2016

Q1 2016

Q4 2015

Q3 2015

Q2 2015

Q1 2015

7

Q4 2014

Q4 2016

583

Q3 2016

627

Q2 2016

693

Q1 2016

652

Q4 2015

644

Q3 2015

705

Q2 2015

675

Q1 2015

682

Q4 2014

662

Q4 2016

515

Q3 2016

539

Q2 2016

554

Q1 2016

516

Q4 2015

537

Q3 2015

611

Q2 2015

639

Q1 2015

672

Q4 2014

604

11 11

30

14

20

Q3 2016

22

Q4 2016

Q2 2016

Q1 2016

Q4 2015

3

Q3 2015

Q2 2015

13

Q1 2015

7

Q4 2014

-2.7%

-9.5%

-4.0%

-4.1%

Eur

ope

Am

eric

as

Restructuring costs (€m)** Q2 2015 Q3 2015 Q4 2015Europe 52 2 2Americas 2

Shipments (Tto) Sales (€m) EBITDA* before restructuring (€m)

Shipments (Tto) Sales (€m) EBITDA* before restructuring (€m)

** €4m are reported in HQ in Q4 2015.


No.24

Strong balance sheet04

• Equity ratio further healthy at 40%

• Net debt of €444m**

• Gearing* at 40%

• NWC decreased from €1,128m to €1,120m**

* Gearing = Net debt/Equity attributable to shareholders ofKlöckner & Co SE less goodwill from businesscombinations subsequent to May 23, 2013.

** Excluding Disposal Group Spain (Net debt -€3m, Net Working Capital €30m).

Comments

Assets Equity & liabilities

39% 39%

656 654

945 897

134206114

961

LiquidityOther current assets

Trade receivables

Inventories

Non-current assets

Dec 31, 2016

2,897

1,006

Dec 31, 2015

2,841

165 354

489 540

340 359

545 571

279Other liabilities

Trade payables

Pensions

Financial liabilities

Equity

Dec 31, 2016

2,897

1,148

Dec 31, 2015

2,841

1,113

39% 40%


No.25

Sales by markets, products and industries04

As of December 31, 2016.

Sales by markets Sales by industry

Sales by product

5%UK

10%France/Belgium

16%Switzerland

27%Germany

37%USA

3%Netherlands

2%Spain

5%Tubes

8%Aluminum

9%Quality steel/

Stainless steel

22%Long products

44%Flat products

12%Others

12%Automotive

industry

7%Miscellaneous6%

Local dealers

31%Machinery/mechanical

engineering

37%Construction

industry

7%Household appl./Consumer goods


No.26

Current shareholder structure04

Geographical breakdown of identified institutional investors

• Identified institutional investors account for 78%

• German investors incl. retail dominate

• Top 10 shareholdings represent around 52%

• Retail shareholders represent 17%

Comments

As of February 2017.

6% Rest of EU

36% US

3% Rest of world

2% Switzerland

5% UK

48% Germany


Financial calendar

Christian Pokropp

Head of Investor Relations & Corporate Communications

Phone: +49 203 307 2050

Fax: +49 203 307 5025

Email: [email protected]

Internet: www.kloeckner.com

April 26, 2017 Q1 interim statement 2017

May 12, 2017 Annual General Meeting 2017, Düsseldorf

July 26, 2017 Q2 interim report 2017

October 25, 2017 Q3 interim statement 2017

Contact details