Eregli Demir Ve Celik Fabrikalari T.a.s. · BIST:EREGL

Eregli Demir Ve Celik Fabrikalari T.a.s — Ereğli Demir ve Çelik Fabrikaları T.A.Ş. (Erdemir) — Q1 2016 Earnings Presentation

37 slides from Eregli Demir Ve Celik Fabrikalari T.a.s's earnings presentation, Apr 25, 2016

  1. Slide 1: Erdemir Group

    © ErdemirGroup

  2. Slide 2: 2016 3 Months Consolidated Results

    2016 3 Months Consolidated Results 25 April 2016 2 25.04.2016

  3. Slide 3: Disclaimer

    DISCLAMIER Ereğli Demir Çelik Fabrikaları T.A.Ş. (Erdemir) may, when necessary, make written or verbal announcements about forward-looking information, expectations, estimates, targets, assessments and opinions. Erdemir has made the necessary arrangements about the amounts and results of such inform

  4. Slide 4: 2016 Market Overview, 3M Results, Guidance

    ˃ 2016 Market Overview ˃ 2016 3M Results ˃ 2016 Guidance 4 25.04.2016

  5. Slide 5: Crude steel production and HRC prices by region

    -10% 10% 15% -5% 0% 5% -12% -10% 10% -6% -4% -2% -8% 0% 2% 4% 8% 6% 5 Mar-11 Mar-11 Jun-11 Jun-11 Sep-11 Sep-11 Dec-11 Dec-11 Mar-12 Mar-12 25.04.2016 Jun-12 Jun-12 Sep-12 Sep-12 Dec-12 Dec-12 Mar-13 Mar-13 Jun-13 Jun-13 Sep-13 Sep-13 Dec-13 Dec-13 Source : * Worldsteel ** Bloomberg Mar-14 Mar-14 Ju

  6. Slide 6: Iron ore price was 61 USD/ton as of April 2016

    Iron ore price was 61 USD/ton as of April 2016 COKING COAL PRICES IRON ORE PRICES USD/TON (HCC PEAK DOWNS REGION FOB AUSTRALIA) (IODEX 62% FE CFR NORTH CHINA MID) USD/TON 130 120 120 100 110 100 80 90 60 80 40 70 60 20 04.2015 04.2014 06.2014 08.2014 10.2014 12.2014 02.2015 06.2015 08.2015 10.2015 1

  7. Slide 7: HRC prices are increasing

    HRC prices are increasing HRC PRICES ( USD/Ton ) 700 600 500 400 300 200 Jun-13 Feb-14 Feb-15 Feb-16 Oct-13 Jun-14 Jun-15 Oct-14 Aug-13 Aug-14 Aug-15 Oct-15 Dec-15 Apr-13 Dec-13 Apr-14 Dec-14 Apr-15 Apr-16 CIS EXPORT HRC BLACKSEA/BALTIC EU HRC CHINA EXPORT HRC USA IMPORT HR As of April 2016, EU HRC

  8. Slide 8: Billet sales prices are significantly increasing

    Billet sales prices are significantly increasing BILLET PRICES ( USD/Ton ) 600 500 400 300 200 Feb-14 Feb-15 Feb-16 Jun-13 Jun-14 Jun-15 Oct-13 Oct-14 Oct-15 Aug-15 Aug-13 Aug-14 Dec-15 Dec-13 Dec-14 Apr-13 Apr-14 Apr-15 Apr-16 BILLET CHINA EXPORT BILLET LATIN AMERICAN EXPORT BILLET IMPORT TURKEY As

  9. Slide 9: Imbalance between Turkish production and consumption continues

    The imbalance between increase rates of Turkish production and consumption is continuing PRODUCTION ( 000 TONS ) 36.824 36.093 36.405 34.286 31.943 10.416 10.376 9.869 9.039 9.075 5.881 5.550 1.700 1.566 26.408 25.717 26.536 25.247 22.868 4.181 3.984 2015 2014 2013 2012 2011 2016 2M 2015 2M Long Fla

  10. Slide 10: Turkish iron and steel product imports increased by 22% in 2016 2M YoY

    Turkish iron and steel product imports increased by 22% in 2016 2M YoY IRON AND STEEL PRODUCT EXPORTS ( 000 TONS ) 16.549 15.226 21 15.240 13.050 14.103 60 1 1.858 36 1 2.353 2.298 2.501 2.957 2.542 1.561 2.393 2.272 568 2.184 304 0,02 0,1 377 261 10.203 10.998 11.311 11.713 10.489 32 72 1.863 1.851

  11. Slide 11: Deceleration in the automotive sector's growth rate is expected

    Deceleration in the automotive sector’s growth rate is expected CHANGES IN SECTOR DEVELOPMENT INDEX (% YoY) 30% 25% 22,1% 20% 16,0% 16,0% 15% 11,3% 10% 11,2% 7,4% 5,5% 7,1% 5,5% 7,0% 6,0% 2,7% 3,9% 5% 5,0% 6,8% 1,0% 3,0% 0% 2,8% 3,0% 1,4% 1,0% 0,6% 1,0% -5% -5,5% -10% 2011 2012 2013 2014 2015 2016 (

  12. Slide 12: 2016 Market Overview, 3M Results, Guidance

    ˃ 2016 Market Overview ˃ 2016 3M Results ˃ 2016 Guidance 12 25.04.2016

  13. Slide 13: Erdemir Group Key Figures

    ERDEMİR GROUP KEY FIGURES 2016 3M 2015 3M 2015 2014 Liquid Steel Production (000 Tons) 2.362 2.092 9.122 8.693 (1) Slab Production (000 Tons) 1.928 1.796 7.349 7.363 (2) Flat Steel Production (000 Tons) 1.820 1.824 7.400 6.954 Long Steel Production (000 Tons) 396 241 1.563 1.153 Flat Steel Shipments

  14. Slide 14: Liquid steel production increased by 13% in 2016 3M YoY

    Liquid steel production increased by 13% in 2016 3M YoY LIQUID STEEL PRODUCTION ( 000 TONS ) 9.122 8.693 8.447 2.311 2.362 2.092 2015 2016 2015 2015 2014 2013 4. Quarter 1. Quarter 14 25.04.2016

  15. Slide 15: Crude steel capacity utilization higher than world average

    Crude steel capacity utilization ratio of ERDEMİR Group is higher than world average CRUDE STEEL CAPACITY UTILIZATION RATIO 105% 100% 100% 100% 96% 95% 93% 90% 88% 84% 85% 80% 80% 78% 78% 76% 75% 70% 70% 67% 65% 2011 2012 2013 2014 2015 2016 3M Erdemir Group World 15 25.04.2016 Source: Worldsteel

  16. Slide 16: Production increased by 7% in 2016 3M YoY

    Production increased by 7% in 2016 3M YoY PRODUCTION VOLUMES ( 000 TONS ) 8.963 8.107 1.563 7.783 1.153 1.356 1.820 1.746 1.844 2.359 2.216 2.065 5.580 5.208 517 241 4.583 396 447 458 447 1.395 1.362 1.377 2015 2016 2015 2015 2014 2013 4. Quarter 1. Quarter Hot Cold Long Total 16 25.04.2016

  17. Slide 17: Sales volumes increased by 15% in 2016 3M YoY

    Sales volumes increased by 15% in 2016 3M YoY SALES VOLUMES ( 000 TONS ) 8.781 8.096 1.552 7.684 1.163 1.346 1.845 1.741 1.778 2.470 2.289 1.990 5.384 5.192 538 398 242 4.560 500 501 457 1.432 1.390 1.291 2015 2016 2015 2015 2014 2013 4. Quarter 1. Quarter Hot Cold Long Total 17 25.04.2016

  18. Slide 18: Net sales revenue was 0,9 billion USD in 2016 3M

    Net sales revenue was 0,9 billion USD in 2016 3M NET SALES REVENUE ( MILLION USD ) 5.252 5.142 4.382 627 580 435 4.625 4.562 1.179 3.947 1.026 875 81 132 93 894 1.098 782 2015 2016 2015 2015 2014 2013 4. Quarter 1. Quarter Domestic Export Total 18 25.04.2016

  19. Slide 19: Sales to pipe&profile producers and re-rollers increased

    Sales to pipe&profile producers and re-rollers increased in 2016 3M YoY 2016 3M FLAT STEEL DOMESTIC SALES BREAKDOWN (%) 2015 3M FLAT STEEL DOMESTIC SALES BREAKDOWN (%) 149Kt; 9% 160Kt; 10% 103Kt; 6% 84Kt; 5% 798Kt; 47% 711Kt; 43% 183Kt; 11% 170Kt; 10% 1.700Kton; 1.645Kton; 60Kt; 3% 90% 61Kt; 4% 94%

  20. Slide 20: Flat steel sales to EU countries was 67% of flat export

    Flat steel sales to EU countries was 67% of our flat export in 2016 3M 2016 3M FLAT STEEL EXPORTS BREAKDOWN (%) 2015 3M FLAT STEEL EXPORTS BREAKDOWN (%) 7Kt; 4% 9Kt; 8% 4Kt; 2% 10Kt; 5% 2Kt; 2% 8Kt; 8% 32Kt; 31% 43Kt; 22% 191Kton; 103Kton; 10% 18Kt; 18% 6% 127Kt; 67% 34Kt; 33% 2016 3M LONG STEEL EXP

  21. Slide 21: Average flat and long steel prices and cost of sales

    21 Mar-14 Mar-14 USD/TON USD/TON Apr-14 Apr-14 25.04.2016 May-14 May-14 Jun-14 Jun-14 Jul-14 Jul-14 Aug-14 Aug-14 Sep-14 Sep-14 Oct-14 Oct-14 Nov-14 Nov-14 Dec-14 Dec-14 Jan-15 Jan-15 Feb-15 Feb-15 Erdemir Group Flat Sales Price Erdemir Group Long Sales Price Mar-15 Mar-15 Apr-15 Apr-15 May-15 May-1

  22. Slide 22: EBITDA decreased by 50% in 2016 3M YoY

    EBITDA decreased by 50% in 2016 3M YoY EBITDA ( MILLION USD ) 1.136 987 1.200 40,0% 1.000 770 32,0% 800 24,0% 600 21,1% 21,6% 17,6% 19,2% 14,2% 16,0% 400 249 58 200 124 8,0% 5,7% 0 0,0% 2015 2016 2015 2015 2014 2013 4. Quarter 1. Quarter EBITDA EBITDA Margin NET PROFIT ( MILLION USD ) 732 800 18,0%

  23. Slide 23: EBITDA was 124 million USD in 2016 1Q

    EBITDA was 124 million USD in 2016 1Q Consolidated EBITDA => Consolidated Net Profit (Million USD) 23 25.04.2016

  24. Slide 24: Dividend payment didn't have a negative effect on liquidity

    Due to the cash, which is provided from working capital, high dividend payment didn’t have a negative effect on liquidity Consolidated EBITDA => Consolidated Net Cash (Million USD) 24 25.04.2016

  25. Slide 25: EBITDA per ton for flat product was 43 USD/ton

    EBITDA per ton for flat product was 43 USD/ton in 2016 1Q EBITDA PER TON (USD/TON) * 153 150 148 141 143 144 130 142 124 113 135 126 108 100 125 100 97 111 113 88 107 101 92 94 89 61 59 64 67 45 54 49 43 24 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2012 2013 2014 2015 2016 Flat Long 25 25.0

  26. Slide 26: Net assets were 4,0 billion USD at the end of 2016 1Q

    Net assets were 4,0 billion USD at the end of 2016 1Q CONSOLIDATED NET ASSETS (MILLION USD) WORKING CAPITAL (MILLION USD) 26 25.04.2016

  27. Slide 27: Despite high dividend payments, net debt has been decreasing

    Despite the high dividend payments, net debt has been decreasing BORROWINGS (MILLION USD) 2.529 2.479 787 1.945 1.135 1.640 1.472 1.452 693 1.283 1.023 1.097 891 1.742 368 429 1.344 947 529 581 655 668 14 -95 2011 2012 2013 2014 2015 2016 1Q Long-Term Debt Short-Term Debt Net Debt 27 25.04.2016

  28. Slide 28: Net debt was positive at the end of 2016 1Q

    Net debt was positive at the end of 2016 1Q NET DEBT (MILLION USD) 28 25.04.2016

  29. Slide 29: 1.192 million USD cash and cash equivalents; borrowings maturity

    Erdemir Group has 1.192 million USD cash and cash equivalents at the end of 2016 1Q BORROWINGS MATURITY PROFILE (MILLION USD) 1.192 822 352 337 24 18 61 196 10 135 Dividend 370 319 5 74 Payable 266 186 2 129 72 Mar.16 1 Apr.-Dec. 2016 2017 2018 2019 2020 Cash 2016 Principal Revolving Trade Financing

  30. Slide 30: Raw materials made up 66% of the cost of sales

    Raw materials made up 66% of the cost of sales COST OF SALES BREAKDOWN* - % 6% 5% 0,3% 5% 4% 1% 7% 5% 5% 1% 5% 8% 7% 7% 7% 12% 12% 11% 13% 66% 70% 71% 73% 2016 3M 2015 2014 2013 Raw Materials Personnel Expenses Purchased Energy Expenses Depreciation and Amortization Exp. Non-operating Expenses Other

  31. Slide 31: Flat conversion cost per ton was 124 USD/ton in 2016 1Q

    Flat conversion cost per ton excluding depreciation was realised as 124 USD/ton in 2016 1Q FLAT PRODUCTS ( USD/TON )* 500 1.797 1.867 1.823 1.958 1.777 1.842 1.820 2.100 1.651 1.675 1.682 1.731 450 1.600 400 1.378 1.600 350 300 1.100 250 200 600 150 90 85 87 82 80 81 87 78 75 68 69 69 70 100 100 50

  32. Slide 32: Capital expenditures of 461 million USD planned for 2016

    Capital expenditures of 461 million USD is planned for 2016* ( M USD ) 1.017 718 634 961 461 445 675 576 264 242 345 377 200 201 158 162 162 171 159 143 82 113 140 107 51 37 68 93 83 80 88 14 116 43 56 59 17 57 55 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2016 (B) 3M Fixed Assets A

  33. Slide 33: Number of employees was 12.514 as of March 2016

    Number of employees was 12.514 as of March 2016 NUMBER OF EMPLOYEES 13.433 13.045 12.872 12.801 12.659 12.514 2011 2012 2013 2014 2015 2016 March 33 25.04.2016

  34. Slide 34: 2016 Market Overview, 3M Results, Guidance

    ˃ 2016 Market Overview ˃ 2016 3M Results ˃ 2016 Guidance 34 25.04.2016

  35. Slide 35: 2016 Guidance

    2016 Guidance Production (Million Tons) Sales (Million Tons) 9,0 9,0 8,8 9,0 7,4 7,2 7,2 7,2 1,6 1,8 1,6 1,8 2015 Actual 2016 Budget 2015 Actual 2016 Budget Long Flat Long Flat 35 25.04.2016

  36. Slide 36: 2016 Guidance: EBITDA and Net Profit Margins

    2016 Guidance EBITDA and Net Profit Margins ˃ In 2015; EBITDA and Net Profit Margins were 17.6% and 9.4% respectively. ˃ In 2016; EBITDA and Net Profit Margins are expected to be 15-17% and 6-8% respectively. 36 25.04.2016

  37. Slide 37: Erdemir Group

    O ErdemirGroup 37 25.04.2016

Ereğli Demir ve Çelik Fabrikaları T.A.Ş. (Erdemir) — Q1 2016 Earnings Presentation on 6ix