Aperam S.A. · EURONEXT:APAM
Aperam — Exane BNP Paribas Basic Materials Conference 2016
33 slides from Aperam's conference presentation, Apr 7, 2016
Slide 1: Exane BNP Paribas Basic Materials Conference
Exane BNP Paribas Basic Materials Conference April 7th, 2016 Timoteo Di Maulo – Chief Executive Officer © Aperam 1
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This document may contain forward-looking information and statements about Aperam and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with re
Slide 3: Aperam's fundamentals
Exane BNP Paribas Basic Materials Conference Aperam’s fundamentals 3
Slide 4: Solid and diversified sources of profitability
Aperam’s fundamentals Solid and diversified sources of profitability Aperam sales breakdown by destination (FY 2015) Aperam EBITDA breakdown (FY 2015) USA Alloys & Asia & Africa 7% Services & Specialties 10% Solutions 8% 8% Stainless & Electrical Steel Europe Brazil & Latin 46% America 18% Europe 65
Slide 5: A restructured and efficient European footprint
Aperam’s fundamentals A restructured and efficient European footprint able to seize market opportunities Aperam downstream rationalization in EU from 29 tools to 17 tools Aperam productivity evolution, average 10 500 600 GENK ISBERGUES GUEUGNON 10 000 500 HA&P HAP 3 HAP 3 RD 79 lines 9 500 400 CR mi
Slide 6: Unique asset base in South America adapted to domestic market
Aperam’s fundamentals Unique asset base in South America perfectly adapted to the domestic market South American Footprint Range of products Caracas (Venezuela) A complete range of stainless steel grades Stainless steel Colombia (austenitics, ferritics, duplex, martensitics) Ecuador Grain oriented e
Slide 7: Industrial footprint in Europe and South America with global service centres
Aperam’s fundamentals An industrial footprint in Europe and South America, perfectly complemented with global service centres and sales network Steel making Finishing line Sales subsidiaries and representative offices Sales agencies Steel Service Centers Services & Solutions Division offers a key co
Slide 8: A leading position in nickel alloys
Aperam’s fundamentals A leading position in nickel alloys Global nickel alloys producers (kt in 2014) Aperam Alloys & Specialties geographical footprint Rescal Amilly Imhua Wire drawing The magnetic parts company 40 35 � � Transformation 30 � workshop 25 � 20 Imphy 15 ICS (JV) 10 5 0 Meltshop,
Slide 9: A solid funding structure
Aperam’s fundamentals A solid funding structure Total Financial Debt breakdown Financial Debt maturity profile (USD million) as of December 31, 2015 [1] as of December 31, 2015 [1] 600 500 400 300 200 100 0 Convertible bonds BBF Others 2016 2017 2018 > 2019 A robust balance sheet and debt structure
Slide 10: Environment and markets
Exane BNP Paribas Basic Materials Conference Environment and markets 10
Slide 11: Asian stainless steel overcapacity remains
Environment and markets Asian stainless steel overcapacity remains Upstream operational capacity of the Chinese industry Downstream operational capacity of the Chinese industry 40 20 30 15 20 10 10 5 - - Pace of new production capacities coming onstream is starting to come down Source: CRU and Apera
Slide 12: European restructuring is completed
Environment and markets European restructuring is completed Upstream operational capacity of the European industry, mt Downstream operational capacity of the European industry, mt 8,5 4,5 8,0 7,5 4,0 7,0 6,5 3,5 2011 2012 2013 2014 2015 2015E 2016F 2011 2012 2013 2014 2015E 2015 2016F European capac
Slide 13: South American stainless steel demand impacted by Brazil slowdown
Environment and markets South American stainless steel apparent demand impacted by slowdown in Brazil Brazilian Stainless steel apparent demand (in kt) Stainless steel flat stainless steel consumption per capita (kg/year) 400 8 350 7 300 6 250 5 200 4 150 3 100 2 50 1 0 0 2011 2012 2013 2014 2015E S
Slide 14: Both domestic markets of Aperam have tariff measures
Environment and markets Both domestic markets of Aperam have tariff measures Chinese marginal cost player to landed costs in Brazil (USD/t) Chinese marginal cost player to landed costs in Europe (USD/t) Chinese marginal FOB, CIF, Imports Anti-dumping Chinese landed Chinese marginal FOB, CIF, Anti-du
Slide 15: Nickel price below the cost of NPI production
Environment and markets The nickel price has reached a level below the cost of NPI production Nickel – LME Cash (USD/t) Breakdown of Chinese nickel imports, in kt 30 000 28 000 500 26 000 NPI – BF* 24 000 400 22 000 NPI – RKEF* 20 000 300 18 000 16 000 200 14 000 12 000 100 10 000 8 000 NPI – EAF* 0
Slide 16: European stainless steel prices have shown best resilience
Environment and markets European stainless steel prices have shown the best resilience Colled rolled stainless steel products imports in Europe, Chinese versus European CR 304 2B 2mm coil transaction in % price (USD/t) 30% 5 000 4 500 20% 4 000 3 500 3 000 10% 2 500 2 000 0% 1 500 2012 2013 2014 201
Slide 17: Aperam performance
Exane BNP Paribas Basic Materials Conference Aperam performance 17
Slide 18: Health & Safety remains the first priority
Aperam performance Health & Safety remains the first priority Aperam LTI frequency rate* Aperam and industry LTI frequency rate* 4 7 6 3 5 4 2 3 1 2 N.A. # 1 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2007 2008 2009 2010 2011 2012 2013 2014 2015 ISSF Aperam Continue journey of progress and avo
Slide 19: Year on Year evolution of profitability
Aperam performance Year on Year evolution of profitability Ebitda evolution (mUSD) Net result evolution (mUSD) 10,6% 2,21 10,0% 1,21 547 501 172 5,7% 95 4,1% 292 490 498 217 -100 -111 292 217 -1,28 -1,39 2012 2013 2014 2015 2012 2013 2014 2015 Ebitda from operations Ebitda from sale of electricity s
Slide 20: Fourth quarter operating performance
Aperam performance Fourth quarter operating performance Yearly shipments evolution (‘000t) Yearly EBITDA evolution per division (USD million) [1] , [2] 428 437 1.886 1.813 1.728 1.683 Brazil 234 Brazil 195 223 Europe Europe 243 Brazil 159 204 87 Europe 60 58 76 42 44 9 2012 2013 2014 2015 2013 2014
Slide 21: Fourth quarter operating performance
Aperam performance Fourth quarter operating performance Shipments (‘000t) Q4 2015 EBITDA per division (USD million) [1] 486 476 469 455 439 94 95 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 EBITDA (USD million) 155 133 117 108 105 8 9 8 129 2 104 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q3 2015 Q4 2015 Q
Slide 22: Leadership Journey
Aperam performance Leadership Journey® Cumulated gains (USD million) Key projects completed since beginning of 2011 • In Brazil, VSS*, switch from LPG to natural gas and conversion of blast furnace number 2 from coke to biomass. • In Europe, - Suspension of traditional cold roll mill in Isbergues 60
Slide 23: Sustainable cash flow from operations across the cycles
Aperam performance Sustainable cash flow from operations across the cycles Aperam net debt and gearing[1] evolution Aperam Net Debt / Ebitda evolution, x (USD million) 4,0 3,76 1 200 29% 30% 3,5 26% 26% 1 000 23% 25% 3,0 20% 2,60 2,5 2,36 800 20% 2,20 14% 2,0 600 15% 1066 878 816 1,5 400 690 10% 0,9
Slide 24: Aperam's value strategy
Exane BNP Paribas Basic Materials Conference Aperam’s value strategy: A customer driven company focused on its self-help story 24
Slide 25: Leverage Aperam's unique position in Europe
Aperam’s value strategy Leverage Aperam’s unique position in Europe European stainless steel industry footprint after restructuring Key strengths of the European operations of Aperam Finishing line • The only integrated upstream Steel making Sourcing operations in the heart of Europe, with the best
Slide 26: Optimise value creation in South America
Aperam’s value strategy Optimise value creation in South America thanks to a perfectly adapted asset base and flexible sales management Key pillars of the mitigation plan in Brazil Aperam’s assets optimisation in South Amercia • Ensure full utilisation rate with the best margin Product mix Geographi
Slide 27: Unlocking value of Aperam's best performing assets
Aperam’s value strategy Unlocking value of Aperam’s best performing assets Leadership Journey initiatives since 2011 by typology Upgrade program launched on best performing assets since 2014 Launched at the early stage of the program, the • Productivity improvement of the downstream restructuring in
Slide 28: Strengthening product and service differentiation
Aperam’s value strategy Strengthening product and service differentiation Shipments of Top Line products developments in kT 250 200 • Toplines are commercial projects focusing on Top Line development of Aperam’s most profitable product, mindset segment, client or geographical areas. 150 100 • Among
Slide 29: Financial policy and capital allocation
Aperam’s value strategy Priority on maintaining a strong Balance Sheet consistent with Investment Grade Financial ratios with cash resources allocated to: Company Invest in sustaining and upgrading the company’s assets base to continuously sustainability reinforce Leadership Journey and Top Line Str
Slide 30: Sustainability is fully embedded in Aperam Strategy
Aperam’s value strategy Sustainability is fully embedded in Aperam Strategy Our vision Priorities & targets Recent achievements[1] People • LITFR : 1 • Absenteeism: 2.2% Consider Safety as our first duty • LITFR : 1 • Performance review 87% Blue & to our People. • Absenteeism: 2 White collars Then T
Slide 31: Q&A
Q&A Waves Commercial Center, Metz, France Gianni Ranaulo © Pino Musi 31
Slide 32: Brazilian protections against unfair market behaviour
Environment and markets Brazilian protections against unfair market behaviour Type of products Import duties status Anti-dumping status Normal import duties are 14% AD duties starting October 4th, 2013 for 5 years from 236 USD/t to 1,077 USD/t. The case involves CR 304 and 430, in thicknesses be
Slide 33: Definitive European anti-dumping duties on China and Taiwan imports
Environment and markets Definitive European anti-dumping duties on China and Taiwan stainless steel imports from August 27, 2015 Anti-dumping development • On May 13, 2014, Eurofer filed an antidumping complaint to European Commission “China and Taiwan have a structural • On June 26, 2014, European
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