Acerinox Sa · BME:ACX
Acerinox Sa — Merger or Acquisition (February 2024)
30 slides from Acerinox Sa's merger presentation, February 2024
Slide 1: Strengthening Acerinox's position in the US market and its global leadership in high-performance alloys
Strengthening Acerinox’s position in the US market and its global leadership in high-performance alloys FEBRUARY 2024
Slide 2: Disclaimer
Disclaimer This document may contain forward looking information and statements about ACERINOX, S.A., its subsidiaries and/or its management, including but not limited to financial projections and estimates and their underlying assumptions, and statements regarding the intent, belief or current expe
Slide 3: Index
Index Transaction Overview Haynes Overview Why Haynes Acerinox Strategy Conclusion Appendix: Acerinox at a glance 3
Slide 4: Transaction Overview
Ol. Transaction Overview
Slide 5: Transaction Summary
Transaction Summary • US-based North American Stainless (NAS) to acquire 100% of Haynes International, a US-based player in high-performance nickel- and cobalt-based alloys Structure • NAS is a 100% wholly owned, US-based subsidiary of Acerinox • Supports Acerinox’s strategy towards higher-value-add
Slide 6: Creating a strong and sustainable leader for stakeholders
Creating a strong and sustainable leader for stakeholders • Haynes: All-cash offer of $61 per share with a premium of 22.3% to the 6M volume weighted average price Shareholders • Acerinox: EPS (exc. synergies) accretive in year one • Meets 15% through-the-cycle ROCE (exc. synergies) target in year o
Slide 7: Combination of two leading US businesses
Combination of two leading US businesses TRANSACTION AFTER TRANSACTION Offer Acerinox through its American subsidiary NAS offers $61 per share Total equity value of $798 million 100% 100% Total enterprise value of $970 million including debt and debt-like items 100% 100% Approximate timeline US Merg
Slide 8: Haynes
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Slide 9: About Haynes International
About Haynes International US-based leading developer and manufacturer of high-performance nickel- and cobalt-based alloys for use in high temperature and corrosion applications Long 36% Corrosion resistant 15% Other 15% Aerospace 49% Products and end markets(1) Chemical processing High temperature
Slide 10: About Haynes International
About Haynes International Haynes has 3 manufacturing plants, a custom metal processing center, and worldwide direct sales/service offices; manufacturing is concentrated in the Northeastern US Haynes International manufacturing facilities Haynes International has: 3 production plants located in Koko
Slide 11: Industry-Leading Innovation Capabilities
Industry-Leading Innovation Capabilities END- Products Fully integrated HPA producer with strong positioning in the aerospace sector Innovation focus with significant portfolio of patented alloys and extensive suite of applications for existing alloys High-value, differentiated nickel-and cobalt bas
Slide 12: Why Haynes
Why 12
Slide 13: Strong Strategic Rationale
Strong Strategic Rationale Further expansion into High Performance Alloys aligned with Acerinox’s strategy Strengthens presence in the US and Aerospace segments: high growth markets Creating additional value through the expansion of combined US operating capabilities Broadest offering of solutions i
Slide 14: Enhanced Combined HPA Global Footprint
Enhanced Combined HPA Global Footprint Sizeable Increase in US Presence and Aerospace Exposure Focus on our main core markets: USA and Europe Acerinox’s new HPA Division (VDM) Haynes HPA division Revenue by Region China 6% China 5% Europe 23% China 6% Europe 53% Europe 65% RoW 13% RoW 14% RoW 13% N.
Slide 15: Reinvesting in the US While Growing our HPA Business
Reinvesting in the US While Growing our HPA Business We aim to integrate Haynes into our existing Stainless & HPA platform and plan to invest additional c.$200M over the next 4 years in the US Rationale for Capex Investments Where Will the Capex be Invested? Accelerate Haynes growth and realize syne
Slide 16: Significant Identified Long-Term Synergy Potential
Significant Identified Long-Term Synergy Potential Significant Potential Identified, with c.$200 M of Capex, earmarked to unlock most of the synergies by 2027e and full Synergies by 2030e Sources of Potential Synergies Operational improvement 36% Synergies Potential Stainless Steel Plate Manufacturi
Slide 17: HPA clear peer-leader with an innovative portfolio of patented alloys
HPA clear peer-leader with an innovative portfolio of patented alloys and suite of applications Innovation leadership as a strong differentiation strategy #1 Leading portfolio of alloy patents Selected HPA patents with major role for the energy transition: Patents Patents Alloy 244 Supra- 2120 Tex 2
Slide 18: Shared Strong Commitment to ESG
Shared Strong Commitment to ESG Acerinox & HAYNES share their commitment to sustainability as essential to the company’s long- term continuity. This commitment is demonstrated across a number of targets: Eco-efficiency and mitigation of climate change GHG EMISSIONS - 20% (2030 vs. 2015) - 18% (2028
Slide 19: Acerinox Strategy
4. Aligned witlr Acerinox Strategy
Slide 20: Strategic Plan Centered around four key pillars
Strategic Plan Centered around four key pillars Added Financial Excellence Sustainability Value Strength PREMIUM LEADER CORE EFFICIENT Shifting revenue mix Main operational Core to our business Accountable, to HPA and Added- pillar to counter model and a driver transparent through- Value Products ex
Slide 21: Added value
Added value Moving in line with our Strategic Goals Change our Revenue Mix in favor of more HPAs and Added Value Products Growth in HPAs Strengthen our leadership in the USA Broadest product portfolio Increase presence in Aerospace Exploit synergies with HPAs and NAS Increase profitability: +2.5 – 3
Slide 22: Fully Aligned With Our Capital Allocation Policy
Fully Aligned With Our Capital Allocation Policy = Satisfied in the case of Haynes International Acquisition 22
Slide 23: Conclusion
Conclusion 23
Slide 24: Significant value creation for shareholders
Significant value creation for shareholders TRANSACTION 10.1x 5.8x 2024e (EV/EBITDA broker Pro forma: EV/EBITDA broker consensus of Haynes) consensus of Haynes including synergies AFTER TRANSACTION c.15% 11% (Annualized and exc synergies) c.1.5x (exc synergies) 2024e ROCE (1) EPS accretion NFD/EBITD
Slide 25: Strengthening a World Leader in Stainless and High Performance Alloys
Strengthening a World Leader in Stainless and High Performance Alloys Strategic step to Best in class solutions Highly synergistic reinforce our leadership provider through the transaction with already- position in HPA with addition of extensive R&D identified estimated focus on the US and the capab
Slide 26: Q&A
Q&A 26
Slide 27: Appendix: Acerinox at a glance
Appendix: Acerinox at a glance
Slide 28: Acerinox at a Glance
Acerinox at a Glance A Sustainable Global Leader in Stainless Steel and High Performance Alloys • Highly sustainable products and present in every aspect of life. Highest quality standards, and in stainless steel in the USA, with no other sustainable alternative. 9M 2023 with 31% market share. 50% o
Slide 29: Main Financial KPI's
EBITDA MARGIN >+10% Transaction EBITDA (9M 2023: 12%) is Margin Accretive Main Financial KPI´s 15% Transaction is ROCE Deliver Through-the-Cycle ROCE Criteria Value Creation through (9M 2023: 19%) Compliant the cycle NFD / EBITDA CAPITAL <1.2x Deleveraging ALLOCATION (9M 2023: 0.56x) Despite Cash Ac
Slide 30: Definitions of alternative performance measures
Excellence 360º Plan: estimated efficiency savings for the period of 2019 to 2023 Operating Working Capital: Inventories + trade receivables − trade payables Net Cash Flow: Profit/(Loss) after tax and minorities + depreciation and amortization Net Financial Debt: Bank borrowings + bond issuance − ca