Kloeckner & Co Ag

Hello everyone, this is Fabian Josef from Investor Relations. Also on behalf of my entire team, I wish you a very warm welcome to our full year 2025 conference call. With me today are our CEO Guido Kerkhoff, our CFO Oliver Falk and our CEO Americas John Gannem. They will guide you through the presentation and afterwards, we are happy to take your questions. In order to ask a question, you have to press the live Q&A button and we will open your line. With that, I'd like to hand over to you, Guido.

Yeah, thanks Fabian. And welcome to our full year 25 conference call. Before I dive into the highlights of the past financial year 25, let me start with a brief and important update regarding the voluntary public takeover offer by Worthington Steel. As announced by Worthington Steel yesterday, the company has decided to adjust the terms of its offer. Specifically Worthington Steel has lowered the minimum acceptance threshold to 57.5% and extended the offer period to March 26, 2026. We understand the step and consider it a logical and common procedure for further increasing transaction security. With the total number of shares currently secured by Wirthing Steel, including acceptance and some direct holdings, standing at 56.92% as of yesterday. The transaction is now very close to reaching this new threshold. Please always keep in mind that the management shares, which account for around 0.5% will be tendered, but due to the quiet period, they can only be tendered from now on. I want to emphasize that this technical adjustment does not change the compelling strategic rationale for the business combination or the attractiveness of the offered price of 11 euros in cash for Kleppner and Co's share. Therefore, our management board and supervisory board of Kleppner and Co's will perform a detailed review of the amended offer document and update their joint response statement in a timely manner. Both remain convinced that the offer by Worthington Steel is in the best interest company and its stakeholders. All shareholders who have not yet tendered their shares now have time until March 26th, 2026, 24 hours local time in Frankfurt online to do so. I will now begin with the financial highlights of the year. We have delivered a solid performance for the full year 25, despite tariff and trade related uncertainties. Also, the forex effects have negatively impacted our own results. Despite the aforementioned difficult environment, we were able to grow our shipments on group level slightly to 4.528,000 tonnes. The slightly negative development in the Quirkman Metals Europe segment was overcompensated by the continued strong performance Fletman Metals Americas driven by further market share gains. Sales came in at 6.4 billion, slight decrease year over year in both segments, as well as on group level, largely price related. This development was a result lower average price level over the year compared to the previous year, as well as negative Forex events. We achieved a considerable increase in gross profit despite the volatile steer price development in full year 2025. Gross profit in the previous year been heavily impacted by windfall losses caused by the substantial steep steer price correction over the course of 24. An effect that did not repeat itself in 25. The gross profit margin also improved considerably compared to the previous year. The PTA before material special effects came in at 171 million euros, a considerable increase year over year, and a result within our guidance range for the fourth consecutive year. And as we guided, we achieved a positive operating cash flow. Full year 25, operating cash flow came in at 110 million. Consequently, and also positively affected by the proceeds from the eight distribution sites in the U.S., we were able to considerably reduce our net financial debt year-over-year, reaching the lowest net financial debt level since Q2 2023. We will propose to the Annual General Meeting to pay a dividend payment of €20 per share. steady and consistent dividend play throughout the cycle. Let's now have a look on our performance at our performance in Q425 by segment. Our segment proclamant of America's shipments increased slightly year over year, Q425, continuing the positive trend seen throughout the previous quarters of the full year 25. Therefore, volume was the highest we've ever achieved in the fourth quarter, which underscores the success of our North American growth strategy. However, due to the lower average price level year-over-year sales in Q4 came in slightly below the previous year's quarter, further impacted by adverse Forex effects. Prices remained volatile after the temporary repeats in Q2-25. EBITDA before material special effects came in at 19 million in Q4. In our second Plutner Metals Europe, shipments increased slightly, while sales remains constant compared to the previous year's quarter. EBITDA before material special effects of second platinum metals Europe was approximately breakeven, which is a considerable improvement compared to the last year's quarter and a constant development consistent to last quarter. This demonstrates that our consistent optimization efforts are continuing to pay off. In the recent month, we made important steps in our company development in the region Stoch in North America. On January 15th, we announced the intended divestments of the Becker Group in Germany. Prior to this, we conducted a comprehensive analysis of all strategic options. This will enable Becker to participate in an industry consolidation in Europe under new ownership, allowing us to place a sharper focus on higher value-added products and services. Becker delivered an improved performance in January and February this year, reflecting the solid foundation we've built together and demonstrating that the business is well positioned to accelerate its growth even further under new ownership. In Switzerland, we completed the acquisition of Locher Bewerung to further strengthen our regional footprint. efficiency gains by leveraging the asset base in the existing network. Acquisition was closed in December 25 and the integration process has already been completed. We continue to expand our production and processing footprint across North America. With targeted investments that strengthen our higher value edit and service center business, these investments ensure that we can meet growing customer demand with expanded production processing capabilities. As you know, we're constructing a new aluminum flat roll processing facility in Columbus, Mississippi, rapidly located at Aluminium Dynamics' new production site. During the fourth quarter, we reached a milestone by breaking ground on the construction site. Building completion is planned for late Q4 26, with equipment startup expected in Q2 27. By adding a dedicated cutting edge aluminum process NMM acquisition and accelerate our automotive growth in North America. In Payton, Iowa, we started a new heavy fabrication operation after agreeing to release the former Bowerbill manufacturing site. By bringing the entire Bowerbill team into Plattner, preserving their long-standing expertise and ensuring a seamless transition, the site significantly expands our heavy fabrication capability, including welding, assembly, complex finishing services, cultural and industrial customers who rely on advanced fabrication and large-scale production capacity. In Queretaro, Mexico, we're installing a new coil-fed Schuller laser blanking line to meet rising demand for aluminum blanking, especially from automotive customers. This line is being installed at our new facility and scheduled for commissioning in the second quarter of 26. Technology delivers superior consistency and cut quality compared to traditional blanking Custom inquiries from automotive OEMs in Mexico are already increasing as the startup approaches. Following these steps, we've generated around 44% of our sales with HVAC when considering our group excluding VA distribution sites in the US that we sold. This business is responsible for the majority of our FBA, which clearly proves that we're on the right track in our strategy. Going forward, we will capitalize even more on our strong presence in North America and the duck region and press ahead with our group strategy. With that, over to you, Oliver, for further financial insights.

Yes, thank you. As Guido stated, the market environment continued to remain challenging in 2025, with a volatile steel price development following the US tariff announcement in February. Despite these steel price volatilities, Coupled with the ongoing challenging macroeconomic environment, we achieved an EBITDA before material special effects of 21 million in 4.25 and 171 million in full year 25. A result within our guidance range. In addition, we delivered a significantly positive operating cash flow for the fourth year in a row. Solid results taking into account the macroeconomic environment we operated in. Although steel prices remain volatile, we are seeing an upward trend in the US and Europe right now. This trend was already visible in Q4 2025 as well as in the first two months of Q1 2026 based on higher expected demand. We are confident to translate the positive pricing trend into strong operating results in quarter one, phase six and beyond. In addition, we continue to leverage our digitalization and automation initiatives. The number of digital quotes increased by around 13% year over year in full year 25. Therefore, we continue to release salespeople for manual work related to quotes. Let's take a look at the development of our shipments, sales, gross profit and gross profit margin for the fourth quarter 25. Shipments increased slightly year over year, driven by a strong performance of both segments. Sales decreased slightly year over year due to the overall average price level and unfavorable FX effects despite the positive shipment development and came in at 1.5 billion in quarter 4.25. Gross profit came in at 272 million in quarter 4.25. after 261 million euros in quarter 424, a considerable increase year over year. Gross profit margin also increased by 17.6% to 18.6% year over year. We will now focus on the EBITDA development in the fourth quarter and in the full year 25. In quarter 425, EBITDA before material special effects came in In the fourth quarter, we recorded positive price and volume effects, adding up to a total of 19 million euros year over year. OPEX in quarter 4.25 were in total 26 million euros higher year over year. In addition, we experienced negative year over year FX events of 3 million euros in quarter 4.25. Material special effects mainly consisted of gains related to the divestment of our eight distribution sites in the US, partly of that by restructuring costs coming to a net total of 30 million euros for quarter 425. For the full year 25, EBTA before material special effects amounted to 171 million euros. Over the year, we benefited from a positive volume effect of €90 million and a positive price effect of €89 million. The results of full year 24 were burdened by windfall losses related to steel price corrections that did not occur in 25. OPEX increased by €65 million year over year. Further, we recorded negative FX from US translation. Lastly, material special effects came in negative at 20 million euros with the non quarter four impact, primarily driven by the deconsolidation of our resilient entity and restructuring costs. We're now coming to cash flow and net debt development. In the full year 25 reported EBITDA was 152 million. Further, we had a net working capital release of 63 million euros. Taking into consideration interest, tax payment and other items totaling 106 million euros, our cash flow from operating activities came in positive at 110 million euros in the full year 25. Including net capex of 5 million, free cash flow was positive at 105 million euros for the full year 25. This also includes the proceeds of 96 million euros from the divestment of eight US distribution sites. Let's have a look on our net financial debt. Negative effects were visible for leasing and dividends. Leasing totalled an amount of 71 million euros. and are mainly related to the execution of our strategic projects, such as our on-campus partnership with Nucor in Granville, Kentucky. Dividends, of course, 20 million related to the dividend we paid to our shareholders in full year 25. Positive effects of 57 million euros were visible for FX and other, including effects from divestments. Accordingly, our net financial debt decreased considerably year over year to 709 million euros after 780 million at the end of the previous year. This is the lowest level of net financial debt since quarter 2023. We will now focus on the group's financing. We continue to possess a diversified financing structure with credit facility of approximately 1.3 billion euros. Excluding leasing, we are very solidly positioned, including contractual terms and financial covenants. Overall, we maintain a total financial headroom of around 0.8 billion euros. Netdex came in at 709 million euros for the full year 2025, a considerable decrease year-over-year end, as mentioned beforehand, the lowest level since Q2 2023. Further, leverage came down considerably and will continue to do so as we execute our strategy. I now hand over to John to have a closer look at our end markets in North America.