Nlmk · RUS:NLMK
Nlmk — Q1 2021 Earnings Presentation
24 slides from Nlmk's earnings presentation, Apr 22, 2021
Slide 1: Q1'21 IFRS Results
1 Q1’21 IFRS Results 22 April 2021
Slide 2: Disclaimer
DISCLAIMER 2 This document is confidential and has been prepared by NLMK (the the industry in which the Company operates. By their nature, forwarding- “Company”) solely for use at the presentation of the Company and may looking statements involve risks and uncertainties because they relate to not be
Slide 3: Market review, Operating highlights
3 • Market review Grigory Fedorishin • Operating highlights CEO • Q1’21 Financials • Business divisions results
Slide 4: Upward momentum in steel prices leading to record margins
UPWARD MOMENTUM IN STEEL PRICES LEADING TO RECORD MARGINS 4 Persistently tight markets provided further HRC PRICES IN KEY REGIONS AND RUSSIAN EXPORT SLAB PRICES, $/t support to steel prices until early April; first Q1'21 16-Apr-21 % 16-Apr-21 vs. Q1’21 signs of stabilization emerge 15% 24% 15% 26% 2
Slide 5: High raw material prices fueled by strong surge in demand
HIGH RAW MATERIAL PRICES FUELED BY STRONG SURGE IN DEMAND 5 Business activity in Q1’21 remained MANUFACTURING PMI STEEL DEMAND IN KEY REGIONS, Q1’21, QoQ strong in all key regions 65 Activity expansion >10% 60 12% Steel demand trends vary across 10% geographies 55 8% 50 6% – In the US, demand grew q
Slide 6: Q1'21 sales were down on higher intragroup shipments and stocks build up
Q1’21 SALES WERE DOWN ON HIGHER INTRAGROUP SHIPMENTS AND STOCKS BUILD UP 6 Steel output increased by 12% qoq to POST-OVERHAUL INCREASE IN STEEL OUTPUT HIGHER FINISHED PRODUCTS SALES 4.4 m t following completion of +12% -7% steelmaking modernization at NLMK 4.4 4.5 4.2 4.2 Lipetsk site in Q4’20 3.9 3
Slide 7: Q2'21 Outlook
Q2’21 OUTLOOK 7 MARKETS The US: prices are expected to remain elevated on the back of China: solid domestic consumption dynamics coupled with a scheduled maintenance works at several local mills in Q2’21, nationwide decline in crude steel production and lower-than- keeping supply tight as demand rem
Slide 8: Q1'21 Financials
8 • Market review Shamil • Operating highlights Kurmashov • Q1’21 Financials CFO • Business divisions results
Slide 9: Q1'21 financial highlights: multi-year high results
Q1’21 FINANCIAL HIGHLIGHTS: MULTI-YEAR HIGH RESULTS 9 Revenue increased by 20% qoq to $2.9 bn amid FCF, EBITDA AND MARGIN DYNAMICS stronger prices 0 41% 1,400 EBITDA expanded by 31% qoq to $1.2 bn on improved 0 37% 1,200 price spreads 0 0 27% 26% 1,000 EBITDA margin reached 41% 24% 800 0 0 – Revenue
Slide 10: Q1'21 profitability gained momentum due to wider price spreads
Q1’21 PROFITABILITY GAINED MOMENTUM DUE TO WIDER PRICE SPREADS 10 Russian Flat products: EBITDA expanded to $772 m EBITDA BY DIVISION, $ m – (+) Increased price spreads 1,166 1300.0 1295.0 1290.0 1285.0 1280.0 1275.0 1270.0 1265.0 1260.0 1255.0 1250.0 1245.0 1240.0 1235.0 1230.0 1225.0 1220.0 1215.0
Slide 11: Q1'21 FCF increased two-fold on higher profits and lower capex
Q1’21 FCF INCREASED TWO-FOLD ON HIGHER PROFITS AND LOWER CAPEX 11 Q1’21 FCF BRIDGE, $ m Working capital build-up amounted to $289 m 0 100 200 300 400 500 600 700 800 900 1,0 00 1,1 00 1,2 00 1,3 00 – (-) $304 m: increase in receivables due to EBITDA 1,166 higher prices for steel products, higher sal
Slide 12: Strong debt portfolio and liquidity position
STRONG DEBT PORTFOLIO AND LIQUIDITY POSITION 12 DEBT* MATURITY, $ m COST OF DEBT REMAINS LOW, % Total debt decreased by 16% qoq to Working capital lines ECA lines Eurobonds $2.9 bn 4.9% – Scheduled repayment of working 4.4% capital lines 4.2% Net debt / 12M EBITDA stood at 0.65x 700 3.8% 484 542 601
Slide 13: Business divisions results
13 • Market review • Operating highlights • Q1’21 Financials • Business divisions results
Slide 14: Q1'21: Russian Flat Products
Q1’21: RUSSIAN FLAT PRODUCTS 14 STEEL SHIPMENTS (m t) AND REVENUE ($ bn) Shipments went down 6% qoq to 3 m t with stocks accumulated in the Black Sea ports due to -6% +19% bad weather conditions as well as reduced pig 2,12 3,17 3,00 iron shipments on the back of one-off BF repairs 3.50 1,78 0.74 0.5
Slide 15: Q1'21: Russian Long Products
Q1’21: RUSSIAN LONG PRODUCTS 15 STEEL SHIPMENTS (m t) AND REVENUE ($ bn) Shipments increased to 0.74 m t (+8% qoq) +8% +17% – (+) Completion of routine repairs in Q4’20 0,52 – (+) Strong demand for rebar in Russian market 0,74 0,45 0,68 0.07 0,10 0.05 Revenue went up by 17% qoq 0,10 0.12 0.06 0.04 0
Slide 16: Q1'21: Mining
Q1’21: MINING 16 SHIPMENTS (m t) AND REVENUE ($ bn) Deliveries decreased to 4.79 m t (-1% qoq) due to planned maintenance works -1% 60% +24% 4.82 4.79 0.52 Revenue grew by 24% qoq to $0.52 bn 480 % 460 % 440 % 0.14 0.02 supported by higher iron ore and pellet prices 0.42 420 % 400 % 380 % 360 % 340
Slide 17: Q1'21: NLMK USA
Q1’21: NLMK USA 17 STEEL SHIPMENTS (m t) AND REVENUE ($ bn) Shipments rose to 0.4 m t (+16% qoq) +16% +62% – (+) Higher sales of HRC and HDG on strong 0.43 demand across key customers 0.40 0.37 – (+) End of the strike at NLMK Pennsylvania 0.29 0.25 0.26 0.25 Revenue recovered to 0.4 bn (+62% qoq) 0.
Slide 18: Q1'21: NLMK Dansteel
Q1’21: NLMK DANSTEEL 18 STEEL SHIPMENTS (m t) AND REVENUE ($ bn) Shipments increased by 23% qoq to 0.17 m t +23% +51% – (+) Improved demand from the wind energy and transport machine building sectors 0.17 0.14 0.14 Revenue rose to $0.14 bn (+51% qoq) following 0.10 higher sales and prices growth 0.1
Slide 19: Q1'21: NBH
Q1’21: NBH 19 STEEL SHIPMENTS (m t) AND REVENUE ($ bn) Shipments went down by 10% qoq to 0.5 m t due to the planned stop for the modernization of -10% +10% NLMK La Louvière hot strip mill (Strategy 2022 0.55 project) 0.50 0.42 0.39 Revenue increased by 10% to $0.42 bn following 0.41 0.32 0.25 flat s
Slide 20: Appendix
20 Appendix
Slide 21: Q1'21: NLMK output, shipments, slab cash costs
Q1’21: NLMK OUTPUT, SHIPMENTS, SLAB CASH COSTS 21 STEEL PRODUCTION, m t GROUP SHIPMENTS TO EXTERNAL CUSTOMERS BY SEGMENT, m t qoq: +11% Q1'20 Q4'20 Q1'21 qoq: -15% Q1'20 Q4'20 Q1'21 yoy: +3% yoy: -17% qoq: +12% 3.00 5.00 4.31 yoy: +0% 2.09 2.50 4.50 4.00 3.33 2.00 qoq: +8% qoq: +18% 3.50 qoq: +11% q
Slide 22: Sales geography and product mix without NBH
SALES GEOGRAPHY AND PRODUCT MIX WITHOUT NBH 22 STEEL PRODUCT SALES BY REGION, m t SALES STRUCTURE BY PRODUCT, m t 4.50 5 4.50 4.22 5 4.22 3.91 5 3.91 0.36 5 Others 0.55 1.40 4 0.53 4 0.42 1.47 Commercial products 0.57 4 M. East* 4 0.83 0.54 3 1.53 0.60 3 0.47 N.America Semi-finished 3 1.03 1.75 3 0.
Slide 23: Foreign assets performance
3,5 00 FOREIGN ASSETS PERFORMANCE 1,4 00 23 1,2 00 3,0 00 SLABS SALES FROM THE RUSSIAN FLAT PRODUCTS DIVISION, k t NBH ROLLED PRODUCTS SALES, k t 2,5 00 QoQ 1,0 00 Total +4% 800 QoQ 1,608 2,0 00 178 1,273 NLMK Dansteel+31% Dansteel 10 605 Total -10% 191 10 549 58 1,229 & NLMK USA 77 8 495 600 CRC 1,
Slide 24: Company IR contacts
COMPANY IR CONTACTS 24 Dmitriy Kolomytsyn, CFA Director, Corporate Finance, IR Ekaterina Kokareva, CFA Head of IR Address 40, Bolshaya Ordynka Str., Bldg. 3 Moscow, 119017, Russia IR E-mail Address ir@nlmk.com Phone Number Office: +7 495 504 05 04 nlmkonair nlmk_group nlmk group