Kloeckner & Co Ag

Hello everyone, this is Fabian Joseph from Investor Relations. Also on behalf of my entire team, I wish you a warm welcome to our Q2 2016 conference call. With me today are our CEO Guido Kerkhoff and our CFO Oliver Falk. They will guide you through the presentation and afterwards we're 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.

Yes, thank you and welcome to our Q2 26 conference call. Let's begin with the financial highlights of the quarter. I'd like to remind you that at the end of the full year 25, we successfully sold eight US distribution sites in order to focus even more on higher value-added products and services. As in our previous analysts and investor presentations, we also included the deltas for a divestment-adjusted baseline to enable a true year-over-year comparison. At the group level, shipments in the second quarter decreased slightly year over year. Negative development is mainly driven by the aforementioned sale of eight US distribution sites at the end of fiscal 25. However, this was partly offset by positive momentum in our segment, Clarkland Metals Europe. Excluding the divestment, shipments increased by 4.3% year over year. This is proof that our growth strategy remains intact and that the implemented strategic initiatives are gaining traction. Sales increased slightly by 3% on a year-over-year basis due to a higher average price level. On an adjusted basis, excluding the divestment, sales increased by 12.1%. Gross profit decreased considerably year-over-year, largely attributable to the write-down at Becker, which affects the comparability of the year-over-year development rather than reflecting a deterioration in the underlying business. We achieved an EBITDA before material special effects of 60%. and others, all of whom have contributed to the second consecutive quarter, marking another important milestone in the segment's turnaround. I will provide a bit more detail on the key drivers behind this performance on the next slide. Positive operating cash flow of 10 million was achieved, though it was considerably lower than the previous year's quarter. As a result, net financial debt increased to 1.108%. Million Billion at the end of the second quarter of 26. Let's have a look at our performance in Q2 26 by segment. Starting with Kleptometals Americas, reported shipments declined considerably year-over-year by around 8%, primarily reflecting the divestment of the eight US distribution sites as discussed earlier. The result reported sales were also slightly below previous year's level. However, on a like-for-like basis, the underlying business continued to develop positively. Excluding the divestments, shipments increased slightly by 4.7% compared with the second quarter of last year. Sales grew strongly by 13.5% year-over-year, supported by a favorable pricing environment. EBITDA before material special effects reached 42 million euros in the second quarter of 26, demonstrating the resilience of the segment despite the still challenging market environment. Turning now to Kleptometals Europe, the segment continued its positive momentum. Shipments increased slightly by 3.6% year-over-year, while sales rose 10.4%, mainly reflecting the high average price level. At the same time, the consistent execution of strategic initiatives continued to support profitability. As a result, EBITDA before materials special effects increased to €20 million, marking the highest quarterly level since the first quarter of 2023. This also represents the second consecutive quarter of positive earnings contributions from the segment. With that, I'd like to hand over to Oliver to have a closer look at the financials.

The favorable pricing environment we saw in the first quarter continued into the second quarter of 26, particularly in the US, providing ongoing support for our business. Against this background we achieved an EVTA before material special effects of 63 million euros representing a considerable increase compared with the previous quarter and only a slight decline year over year despite lower shipments. This performance demonstrates our ability to translate supportive market conditions into strong operating results. Operating cash flow was positive at 10 million euro during the quarter. Further, the number of digital quotes increased by around 9.5% year over year. We continue to reduce manual processes, enabling our sales team to focus more on value added activities. Let's take a look at the development of our shipment sales, gross profit and gross profit margin for the second quarter of 26. To provide a meaningful comparison, We are also showing the figures excluding the 8 US distribution sites that were divested at the end of 2025, allowing for a like-for-like view of the business. Reported shipments decreased slightly year-over-year, mainly due to the divestment of eight US distribution sites at the end of 2025, primarily reflecting the impact of the divestment, partly offset by a stronger demand in Europe. In contrast, sales increased slightly year-over-year, mainly due to the overall higher average price level compared with the prior year quarter. As Guido already highlighted, the underlying performance of the business remains strong. On a like-for-like basis, excluding the divestment, shipments increased by 4.3%, while sales grew by considerable 12.1% year-over-year. This demonstrates that our strategic initiatives continue to support our growth. Gross profit amounted to 243 million euros compared with 320 million euros in the second quarter of 2025. The year-over-year decline was primarily attributable to the write-down at Beckham, which weighted on the reported gross profit. As a result, the gross profit margin declined to 14.4%. We will now focus on the EBITDA development in the second quarter of 26. We have adjusted the EBITDA for the quarter 2025 for the divestment of eight US distribution sites to enable a like-for-like comparison. Therefore, starting with an EBITDA before material special effects for quarter 2025 of 56 million euros. All year-over-year effects visible here have also been adjusted to enable the like-for-like comparison. In coup 2.26, EBITDA before material special effects came in at 63 million euros, a considerable increase year over year. We faced a positive volume effect which totalled 13 million euros and a positive price effect of 21 million euros supporting our operating result. Furthermore, In total OPEX increased by 27 million euros year over year mainly due to the high personal expenses and higher expenses for shipments and operating supplies. Further, we had no significant FX effects. Therefore, our EBITDA before material special effects reached 63 million euros in quarter 2.26. Lastly, adjusted by material special effects mainly resulting from the planned divestment of Becker, the EBITDA was reported at the negative 108 million euros. We are now coming to cash flow and net debt development. In the second quarter of 26 we benefited from the change in networking capital which amounted to 156 million euros. After interest and tax payments as well as other cash outflows totaling 38 million euros, cash flow from operating activities remained positive at 10 million euros for the quarter. With net capex of 3 million euros we generated a positive free cash flow of 7 million euros. Let's look at our net financial debt. The positive free cash flow was more than offset by several items during the quarter. Negative effects were visible for leases, FX and the dividend payment to our shareholders, totaling 33 million euros. Partly offsetting these effects were the 9 million IFRS reclassification related to the planned divestment of backup and 2 million from other items. Consequently, our net debt increased from 1 billion 092 to 1 billion 108 million in the second quarter of 26. Let's now focus on the outlook for the full year 26.