EANS-News: Klöckner & Co SE / Sales volumes, sales and earnings in 2010 significantly higher than in previous year - positive outlook

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Annual Reports

Duisburg (euro adhoc) - • Sales increased by 35% to EUR5.2
billion

• EBITDA increased by EUR306 million from EUR-68 million to EUR238 million

• Dividend proposal of 30 Eurocents per share
• Acquisition strategy resumed with four acquisitions completed in 2010
• Memorandum of Understanding to acquire Macsteel USA signed
• Strategy "Klöckner & Co 2020" presented
• Outlook for 2011: Sales volumes and sales to increase by more than 10%
and significantly higher earnings expected

Duisburg, March 8, 2011 - The 2010 fiscal year has shown very
positive trends for Klöckner & Co. Due to the acquisition of Becker
Stahl-Service Group ("BSS") as well as the economic recovery sales,
sales volumes and earnings increased significantly. In particular,
the automotive industry and the growing momentum of the machinery and
mechanical engineering sector in Germany supported the economy. In
addition, the Company benefited from restocking in the first half of
the year. Gisbert Rühl, Chairman of the Management Board of Klöckner
& Co SE: "2010 was a year of transition for us, during which we
switched from crisis management to growth, completed four
acquisitions and again posted positive earnings. We also achieved our
target of being able to pay a dividend again. We will be proposing a
dividend of 30 Eurocents per share to our shareholders at the Annual
General Meeting."

Significant improvement in sales, sales volumes and earnings Sales
volumes at Klöckner & Co improved in the 2010 fiscal year by 29.0% to
5.3 million tons, due to the acquisitions completed over the course
of the year, the general recovery in demand and the initiation of the
restocking cycle. Sales volumes rose by 32.6% in Europe and by 17.4%
in North America. Adjusted for the BSS acquisition, sales volumes in
Europe were 7.9% higher than in the previous year, while the sales
volumes for the Group as a whole rose by 10.1%. The US and Germany
were regional growth drivers. Sales, which rose by 34.7% to EUR5.2
billion, increased stronger than sales volumes due to higher prices.
Excluding the acquisition of BSS, the increase in sales was 21.3%.

The increase in gross profit as well as the efficiency enhancement
measures that were introduced made a significant contribution to
increasing the operating result (EBITDA) by EUR306 million from
EUR-68 million to EUR238 million. This clearly exceeded the guidance
of more than EUR200 million. Accordingly, EBIT and earnings before
tax (EBT) totalled EUR152 million (EUR-178 million in 2009) and EUR84
million (EUR-240 million in 2009) respectively. Group net income
improved by EUR266 million from EUR-186 million to EUR80 million,
resulting in basic earnings per share of EUR1.17 compared to EUR-3.61
for the previous year.

Financial flexibility further expanded and optimized Inevitably,
higher prices and the positive trend in sales volumes resulted in
more funds being tied up in working capital. Tight inventory and
strict receivables management have allowed Klöckner & Co to keep the
net working capital to sales ratio below the 20% hurdle. Further
funds were required to finance the acquisitions. Net financial debt
rose to EUR137 million at the end of 2010 (2009: net cash position
EUR150 million). In relation to equity, net financial debt remained
at a very low level with gearing of 11%. Despite an increase in
equity of EUR167 million to EUR1.29 billion the equity ratio declined
slightly due to the increased balance sheet total from 41% to 37%,
but remains very solid. The Company has expanded once again its
financial flexibility with promissory notes and a convertible bond
and extended the maturity of its central financing instruments to
around three years. Klöckner & Co thus has a total of about EUR2.2
billion in facilities available, of which EUR700 million can be used
for acquisitions.

Company strategy provides targets for 2020 Last year, with "Klöckner
& Co 2020", the Company worked out a strategy for the next ten years
and resumed its acquisition strategy. It was in particular the
acquisition of Becker Stahl-Service Group early in the year that
allowed Klöckner & Co to take part in the progressing recovery in the
automotive industry, especially in Germany. The acquisition allowed
the Company to reach a leading position within flat steel sector in
Europe in just one single step. Additionally, the acquisitions of
Bläsi AG, Switzerland, as well as US based Angeles Welding Inc. and
Lake Steel Ltd. were completed last year. The acquisitions shifted
the weighting for the individual customer industries. The Company
reduced its dependence on the construction industry as intended by
about 4 percentage points to 39%. The share of business in the
automotive industry on the other hand grew by 4 percentage points to
10%.

With the announced but not yet closed acquisition of Macsteel Service
Centers USA Klöckner & Co wants to significantly press ahead. With
this acquisition, Klöckner & Co would move up from number 10 to
number 3 within the US metal distribution sector in just one step. By
that, the Company would significantly expand its position in flat
steel in the US as well. Due diligence is currently being carried out
and the transaction is expected to be finalized in Q2.

The other three key lines in the strategy "Klöckner & Co 2020" are
organic growth, business optimization and personnel and management
development. The Company is making significant progress in these
areas as well and has set itself ambitious milestones. The clear
target of the Company´s strategy is to develop Klöckner & Co into the
world's leading multi metal distributor. This includes doubling sales
volumes in five years and tripling to quadrupling them by 2020.

Outlook for 2011 Gisbert Rühl: "We expect sales volumes and sales in
2011 to rise by more than 10%. The trend will be driven by the
organic growth initiatives that are part of the strategy "Klöckner &
Co 2020" as well as continued recovery among our customer industries
in Europe and the US. Our continuous optimization measures are still
focused on achieving an EBITDA margin of 6%. The acquisitions we
consolidated over the course of 2010 will make a significant
contribution to achieving this target."

About Klöckner & Co Klöckner & Co SE is the largest
producer-independent multi metal distributor in the European and
North American markets combined. Klöckner & Co Group's core business
is the warehousing and distribution of steel and non-ferrous metals.
With approx. 250 warehouses and processing locations staffed with
around 9,700 employees in 15 countries in Europe and North America,
we serve more than 170,000 active customers. The Company had sales of
around EUR5.2 billion in fiscal year 2010. Klöckner & Co SE shares
are listed at the official market (Prime Standard) at the Frankfurt
Stock Exchange (FWB). Klöckner & Co shares are listed on the German
MDAX Stock Exchange. ISIN: DE000KC01000; WKN: KC0100; Common Code:
025808576.

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

Further inquiry note:

Dr. Thilo Theilen - Spokesperson
Head of Investor Relations & Corporate Communications
Telephone: +49 (0) 203-307-2050
Fax: +49 (0) 203-307-5025
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