Emsteel Building Materials Pjsc · ADX:EMSTEEL
Emsteel Building Materials Pjsc — Investor Presentation (August 2024)
39 slides from Emsteel Building Materials Pjsc's investor presentation, August 2024
Slide 1: Investor Presentation
INVESTOR PRESENTATION August 2024 EMSTEEL | 1
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER These materials have been prepared by EMSTEEL Building Materials PJSC (“EMSTEEL” or the “Company”). The Company relies on information obtained from sources believed to be reliable. No representation, warranty or undertaking, stated or implied, is given as to the accuracy of the info
Slide 3: Table of Contents
TABLE OF CONTENTS Business Overview 4 Key ESG Credentials 12 Market Context 17 Growth Strategy 22 Board and Executive Committee 27 Financial and Operational Highlights 30 Appendix 34 EMSTEEL | 3
Slide 4: Business Overview
BUSINESS OVERVIEW EMSTEEL | 4
Slide 5: Quick Facts About the Group
QUICK FACTS ABOUT THE GROUP Steel EMSTEEL is among the top 30% cheapest steel mills on the Merged in Oct 2021 global cost curve* production Steel assets utilizing latest DRI Steel rebar production costs $/t (2021 data) capacity: technology, 1000 15 years old 3.5 mtpa 800 600 FY23 400 200 Revenue spl
Slide 6: Merger Recap: Key Milestones
MERGER RECAP: KEY MILESTONES • Arkan listed on ADX • ACF** construction starts Arkan August 9 April 27 Arkan ACF Dry Mortar inception operation starts Operation Starts Arkan General Assembly Adopting ‘Emirates Steel Arkan’ as interim approves merger brand and trading ticker change to EMSTEEL 2006 20
Slide 7: Geographic Footprint
GEOGRAPHIC FOOTPRINT Steel sales, FY23: UAE steel market share: The Group exports steel 60% of rebar and 80% of heavy sections products to more than 71% wire rod. and sheet piles. 70 countries. Domestic sale volume 29% REBAR HEAVY SECTION Export sale volume WIRE ROD SHEET PILE EMSTEEL | 7
Slide 8: Our Product Lines
OUR PRODUCT LINES A leading producer of A prominent wire rod The largest producer of The only producer of Rebar in Coils provides high-quality rebar with a producer in the GCC with heavy and jumbo sections in hot-rolled sheet piles in the greater efficiencies production capacity of a production capa
Slide 9: EMSTEEL Use of DRI Technology
EMSTEEL USE OF DRI TECHNOLOGY Different steel production routes and relative CO2 Scope 1 emission intensity (without EAF) HOT BRIQUETTED IRON (HBI) -> -> -> MATERIAL HANDLING DIRECT REDUCTION PLANT (DRP) Direct reduction process JETTY AREA IRON PELLETS to reduce iron oxides to metallic iron Unloadin
Slide 10: Our Steel Division
OUR STEEL DIVISION Plants, Production Process and Products DIRECT REDUCTION FINISHED 01 02 STEEL MAKING 03 ROLLING 04 PROCESS PRODUCTS Three Direct Reduction Plants Three Steel Making Plants with Heavy Section Mill, Three Rebar, Wire Rod, Sheet Piles with a capacity of 4.2 MTPA a capacity of 3.6 MTP
Slide 11: Our Building Materials Division
OUR BUILDING MATERIALS DIVISION Al Ain Cement Factory LIMESTONE RAW GRINDING & GRINDING, STORAGE, 01 02 03 QUARRY BURNING PACKING, DISPATCH 1. EXTRACTION : 1. RAW GRINDING : 1. GRINDING : The raw materials used to manufacture The raw materials are very finely The clinker and the gypsum are very ceme
Slide 12: Key ESG Credentials
KEY ESG CREDENTIALS EMSTEEL | 12
Slide 13: First Steelmaker Worldwide to Capture Its CO2 Emissions
FIRST STEELMAKER WORLDWIDE TO CAPTURE ITS CO2 EMISSIONS CO2 Al Reyadah CCUS Molten steel EMSTEEL is the world’s first steel company to capture its CO2 emissions. Partnership with ADNOC allows us to accumulate up to 800 kt of CO2/year as part of Carbon Capture Utilization and Storage (CCUS). This way
Slide 14: Actively Implementing an Industry-Leading Sustainability Program
… ACTIVELY IMPLEMENTING AN INDUSTRY-LEADING SUSTAINABILITY PROGRAM EMSTEEL is constantly working to deliver on its sustainability commitment. In 2022 we reduced Scope 1&2 emissions from our steel business by 35% YoY. This was partially driven by securing clean energy from solar and nuclear sources t
Slide 15: Well Positioned for CO2-Conscious Market
… AND WELL POSITIONED FOR CO2-CONSCIOUS MARKET EMSTEEL is operating state-of-art, low-carbon-footprint On the demand side, there is growing momentum in CO2-related production facilities based on direct-reduced iron (DRI) initiatives led by steel buyer coalitions, such as SteelZero in EU. • SteelZero
Slide 16: Focus on People – The Bedrock of EMSTEEL
FOCUS ON PEOPLE – THE BEDROCK OF EMSTEEL World Steel Association Avg vs. EMSTEEL LTI Rate EMSTEEL believes that health 1.50 and safety of employees is 1.17 one of the key indicators of a 1.01 0.97 0.85 successful and balanced 1.00 0.84 0.83 0.81 0.81 0.76 0.71 0.76 ESG program. 0.67 0.50 In 2023 Los
Slide 17: Market Context
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Slide 18: Global Trends Affecting the Steel Market
GLOBAL TRENDS AFFECTING THE STEEL MARKET 1. Markets decoupling following increased trade barriers caused by geopolitics and intentions to protect from global overcapacities. 2. Raw material supply chains need to be secured to limit risks of shortages. 3. Decarbonization requires careful capex manage
Slide 19: Steel Production to Fuel GCC Growth
STEEL PRODUCTION TO FUEL GCC GROWTH STEEL PRODUCTION IN GCC Global steel production 35 (DRI + Blast Furnace - based), 2021 30.1 30.0 1,951 Mtpa 30 26.6 3 3.2 26.2 24.5 24.9 25 23.2 23.4 23.2 23.4 2.7 3.3 2.9 2.4 2.4 8.7 9.1 3 3.2 20.1 3.2 20 7.8 Global DRI production 5.2 5.4 6.3 5.7 5.5 3.3 5.2 8.2
Slide 20: UAE Is Set to Continue Growing
UAE IS SET TO CONTINUE GROWING The UAE’s GDP is expected to grow by 4.2%* in 2024, supported by sustained high oil prices as well as by strong non-oil sector performance. Future growth is driven by UAE steel demand ambitious state vision programs. forecast to grow by 3% YoY in 2023 and 2024 GDP Grow
Slide 21: UAE Electricity Tariff Incentive Program (ETIP)
UAE ELECTRICITY TARIFF INCENTIVE PROGRAM (“ETIP”) According to World Steel Association energy (incl. electricity) constitutes a significant portion of the cost of steel production, from 20% to 40%. In this context it’s important that Abu Dhabi Government incentivizes manufacturing entities, that suf
Slide 22: Growth Strategy
GROWTH STRATEGY EMSTEEL | 22
Slide 23: Strategy: Vision and Value Pillars
STRATEGY: VISION AND VALUE PILLARS Vision: To be the region's steel and building materials champion To deliver value to our shareholders To invest in innovation enhancing customers possibilities To lead from the front towards a sustainable and circular economy Maximize Current Diversify Prod
Slide 24: Strategy: Maximize Current Business Value
STRATEGY: MAXIMIZE CURRENT BUSINESS VALUE A vivid example of this Value Pillar is the Namaa’ project: The Namaa’ cost reduction and • Namaa’ is part of a business transformation process which consolidates all our business improvement ideas transformation program, launched 2022 EBITDA (operational an
Slide 25: ES600: An Example of Product Diversification
ES600: AN EXAMPLE OF PRODUCT DIVERSIFICATION ES600 is our new product, a type of rebar with a higher tensile to Yield strength ratio, meaning higher durability. ES600 promotes sustainability in construction by reducing steel usage (by 18-24%) and, REDUCTION IN consequently, reducing concrete usage.
Slide 26: Strategy: Integrated Iron Ore Value Chain
STRATEGY: INTEGRATED IRON ORE VALUE CHAIN EMSTEEL has partnered with ITOCHU and JFE Steel to carry out feasibility studies to consider the construction of a ferrous raw material production facility in Abu Dhabi. TYO : 8001 Subsidiary of JFE Holdings, Inc. – TYO: 5411 One of the largest Japanese Lead
Slide 27: Board and Executive Committee
BOARD AND EXECUTIVE COMMITTEE EMSTEEL | 27
Slide 28: Board of Directors
BOARD OF DIRECTORS Hamad Abdulla Jamal Salem Eng. Saeed Nabeel Qadir Abdulaziz Abdulla Fatima Abdulla Farah Abdulla Mohamed AlShorafa Al Dhaheri Ghumran Ismail Mohamed Mohamed Sharif Mohamed Ali Al Hammadi Al Remeithi Al Hajri Abdulla Al Fahim Al Mazrui BOARD MEMBER CHAIRMAN VICE CHAIRMAN BOARD MEMB
Slide 29: Executive Committee
EXECUTIVE COMMITTEE Eng. Saeed Stephen J Eng. Saeed Khalfan Hugo Jasem Mohamed Eng. Hassan Salim Vladimir Ghumran Pope Al Ghafri Losada Al Khateri Shashaa Arshinov Al Remeithi GROUP CHIEF HUMAN GROUP CHIEF PROJECT GROUP CHIEF GROUP CEO GROUP CFO CEO, EMIRATES STEEL CEO, EMIRATES CEMENT CAPITAL OFFIC
Slide 30: Financial and Operational Highlights
FINANCIAL AND OPERATIONAL HIGHLIGHTS EMSTEEL | 30
Slide 31: Overview of FY 2023 Results
OVERVIEW OF FY 2023 RESULTS Revenue The Group achieved a solid operational and financial performance in 2023 and recorded AED 8.9bn revenues of AED 8.9 billion, despite a challenging and volatile global economic landscape and its -6% YoY* impact on commodity prices. EBITDA Enhanced efficiency levels
Slide 32: Overview of 1H 2024 Results
OVERVIEW OF 1H 2024 RESULTS Revenue In H1 2024, the Group maintained overall production volumes in line with H1 2023. This was achieved AED 4bn through strategic flexibility, allowing part of the international exports to be redirected to the UAE market. -10% YoY EBITDA in H1 2024 was AED 503 million
Slide 33: FY 2023 Operational & Financial Results
FY 2023 OPERATIONAL & FINANCIAL RESULTS STEEL CEMENT & CLINKER FINANCIAL RESULTS* Production, kt Production, kt Revenue, AED bn EBITDA (AED mn) & EBITDA Margin 3,211 3,237 3,244 2,964 3,021 2,894 -6% 2,711 2,695 +8% 2,486 9.5 8.6 8.9 1.3 1,832 1.2 1,568 1,662 0.8 14.2% 9.3% 12.6% 2021 2022 2023 2021
Slide 34: Appendix
W/; EMSTEEL =\\\ EMSTEEL | 34
Slide 35: Some of the Projects We Are Proud Of
SOME OF THE PROJECTS WE ARE PROUD OF Burj Khalifa Sheikh Zayed Bridge Dubai Metro Khalifa Port Suez Canal Fulham Football Ground Louvre Abu Dhabi Yas Island Emirates Palace Ferrari World AD International Airport Guggenheim Museum EMSTEEL | 35
Slide 36: Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION Assets, AED mn 1H 2024 2023 2022 Equity and Liabilities 1H 2024 2023 2022 Non-current assets Net equity 8,507 8,332 7,728 PPE 6,434 6,560 6,904 Non-current liabilities Goodwill - - - Lease liabilities 335 333 461 Right-of-use assets 221 229 381 Provision
Slide 37: Consolidated Statement of Profit or Loss
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AED mn 1H 2024 1H 2023 2023 2022 Revenue 3,957 4,430 8,899 9,453 Cost of sales (3,517) (3.921) (7,802) (8,483) Gross profit 440 509 1,097 969 Selling and distribution expenses (22) (25) (54) (53) General and administrative expenses (200) (158) (390) (358) Oth
Slide 38: Consolidated Statement of Cash Flows
CONSOLIDATED STATEMENT OF CASH FLOWS AED mn 1H 2024 1H 2023 2023 2022 Cash flows from operating activities Operating cash flows before movements in working capital 540 629 1,372 1,179 Net movements in working capital (188) (84) 84 303 Cash generated from operations 352 545 1,456 1,482 Employees' end
Slide 39: Thank You
THANK YOU Gleb Diachkov-Gertcev Director of Investor Relations ir@emsteel.com EMSTEEL | 39
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