Evraz Plc · LSE:EVR
Evraz — H1 2021 Earnings Presentation
26 slides from Evraz's earnings presentation, Aug 5, 2021
Slide 1: Financial Results H1 2021
FINANCIAL RESULTS H1 2021 5 August 2021
Slide 2: Disclaimer
Disclaimer This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of EVRAZ plc (“EVRAZ”) or any of its subsidiaries in any jurisdiction (including, without limitation, EVRAZ Group S.A.
Slide 3: Core operations and distribution markets
Core operations and distribution markets Segment revenue structure1, % 4% Other operations 12% Coal 15% 69% Steel, North Steel America Consolidated revenue by region, % EVRAZ’ market shares 1% 7% Africa & RoW Europe 7% CIS 41%2 96%2 69%2 22%2 40% 20% Russia Americas among rail suppliers among rail a
Slide 4: Highlights
Highlights Alexander Frolov Chief Executive Officer
Slide 5: Global trends
Global trends Impressive price rally in global steel and raw materials brings positive market momentum Global coking coal prices, $/t Semi-finished products prices, $/t Hard coking coal Low-Vol, spot, FOB Australia (LS) Slab price (FE&SEA, CIF) Billet price (FE&SEA, CIF) Hard coking coal Low-Vol, sp
Slide 6: Financial highlights
Financial highlights A number of favorable factors coincided in the 1H 2021 to bring steel prices to historically high levels translating into peculiar profits REVENUE EBITDA Strong revenue growth: EBITDA almost doubled y-o-y: Higher sales prices for construction and semi- $6,178m finished products;
Slide 7: Safety is a core value
Safety is a core value Regretfully, we have to report six fatalities in H1 2021. This is unacceptable and management will continue making every possible effort to achieve our goal of zero fatalities and a LTIFR of less than one The final stage of the risk management project has been reached, sta
Slide 8: Strategic priorities and H1 2021 results
Strategic priorities and H1 2021 results Strategic priorities Results Retention of low-cost position Cost cutting initiatives effect on EBITDA – $82m Development of product portfolio Customer focus initiatives effect on EBITDA – $174m and customer base Prudent CAPEX Development Maintenance CAPEX – $
Slide 9: Outlook
Outlook In the second half of 2021, we expect global markets to remain fairly healthy and iron ore and coking coal prices to stay elevated The steel market may also face the effect of the Chinese government’s initiatives to reduce carbon emissions EVRAZ will continue to execute its key investment pr
Slide 10: Financial performance
Financial performance Nikolay Ivanov Chief Financial Officer
Slide 11: EBITDA and margins
EBITDA and margins EBITDA amounted to $2,082m in H1 2021 vs $1,073m in H1 2020, EBITDA margin increased from 21.5% to 33.7% The increase in EBITDA was primarily attributable to higher steel, vanadium and coal product sales prices as well as better sales of flat-rolled steel products resulting fro
Slide 12: FCF generation
FCF generation EVRAZ was able to deliver outstanding FCF in H1 2021 FCF generation was supported by EBITDA growth, however, was partly offset by working capital outflow amid rising prices, as well as increase in capital expenditures in H1 2021 compared to H1 2020 and foreign exchange losses EBIT
Slide 13: Efficiency improvements
Efficiency improvements Cost-cutting initiatives, $m 4% Cost-cutting and productivity improvement efforts together with Auxiliary 96% materials & Productivity customer focus initiatives generated in total $256m of additional service costs and cost EBITDA effectiveness Source: Company information C
Slide 14: CAPEX
CAPEX Development CAPEX breakdown by key projects CAPEX Segment Project Total CAPEX up by 27.6% YoY following increased spending on H1 2021 development projects Sobstvenno-Kachkanarsky deposit greenfield project 20 Tashtagol iron ore mine upgrade at EVRAZ ZSMK mining site 18 EVRAZ Pueblo’s new l
Slide 15: Debt management
Debt management In the H1 2021 EVRAZ repaid at maturity $735m Eurobonds and $201m RUB Bonds, Debt maturity profile, as of 30.06.2021*, $m while utilising $750m Syndicated facility and $67m SberBank loan In preparation for potential demerger of Coal assets, the Group: Trade lines Eurobonds Swap e
Slide 16: Focus on stable dividends
Focus on stable dividends EVRAZ dividend payments, US$m Current EVRAZ’s dividend policy: Dividend paid, $m Dividend announced, $m x Dividend yield, % The Company aims to declare dividends of a minimum amount of US$300 million per annum to be paid in semi annual instalments of 9% 17% 11% 14% 6%* mi
Slide 17: Operational update
=EVRAZ —— Operational update
Slide 18: Operational highlights 2019 – H1 2021
Operational highlights 2019 – H1 2021 Change*, Change*, 2019 2020 H1 2020 H2 2020 H1 2021 Y-o-Y Y-o-Y HCC price (Australia, FOB) 177 124 -30.1% 137 111 131 -4.4% Market Iron Ore price (Fe 62%, China, CFR) 93 108 15.8% 91 124 182 2x indicators, $/t Billet price (FE&SEA, CIF) 446 434 -2.8% 403 464 639
Slide 19: Steel segment
Steel segment Sales of construction products increased by Sales of semi-finished products declined by Sales of railway products declined by 16% 4% YoY mainly following uptick in shipments 6% YoY driven by change in product mix in YoY mainly due to lower demand for rails in of beams and structural pr
Slide 20: Coal segment
Coal segment Russian prices of metallurgical coal followed Coal concentrate sales up by 1% YoY amid international benchmarks during the greater mining volumes and the efforts to During the reporting period, roughly 73% of reporting period and started to rise more optimise logistics while the higher
Slide 21: Steel, North America segment
Steel, North America segment Sales of flat products jumped YoY amid improved demand as North American steel markets continued to recover from the impact of COVID-19 Sales of construction products grew YoY with strong market demand and prices outpacing increases in raw material pricing Sales of
Slide 22: ESG update
=EVRAZ —— ESG update
Slide 23: ESG highlights
ESG highlights GHG KEY AIR EMISSIONS WATER CONSUMPTION 128 128 121 227 205 206 2.01 1.97 1.97 1.93 1.93 57 57 90 tCO2e per tonne million m3 90 kt of steel cast GHG intensity rate 2018 2019 2020 H1 2021 2018 2019 2020 H1 2021 2018 2019 2020 H1 2021 NON-MINING WASTE RECYCLING or REUSE RATE MAJOR ENVIR
Slide 24: Independent assurance and ESG disclosure
Independent assurance and ESG disclosure ESG Ratings Supporting global initiatives UN Global Compact participant lesser number is better: 0 is the lowest ESG risk exposure and >40 is the highest Disclosure under GRI standard and TCFD recommendations Business practices aligned with top internat
Slide 25: COVID-19 impact update
COVID-19 impact update Vaccination from COVID-19 at EVRAZ ZSMK After a general improvement in the epidemiological situation in Q1 2021, global COVID-19 infection rates have been rising since May, including in the regions where EVRAZ operates To prevent the spread of the disease, EVRAZ is impleme
Slide 26: IR@evraz.com
=EVRAZ L +7 495 232 1370 M IR@evraz.com