Slide 1: Q2 2023 Business and Financial Performance
Introduction Group Overview Q2 2023 Business Market and Financial Financials Performance Capex Outlook AUGUST 21, 2023 Annexes 1
Slide 2: Speaker
Introduction Speaker Group Overview Market Financials Capex Outlook KRZYSZTOF ZOŁA Annexes 2
Slide 3: Key Macro Trends
Key Macro Trends Introduction Group Overview Market Increased geopolitical risk De-globalisation Protectionism military spending onshoring, reshorig, reindustrialisation of the EU Financials Long-term underinvestment in energy sector Capex Supply chain shortening the end of commodity abundance and C
Slide 4: Cognor – Modern EU Steelmaker
Cognor – Modern EU Steelmaker Introduction Group Overview Market 30 years Exposure on mid European market: Track record of resilience: of industry experience PL, DE, CZ, SK, HU, RO, LT, LV, crisis in the Polish steel industry ES in the 90s; hostile EU policy and Financials VAT evasion practices in P
Slide 5: Cognor – Modern EU Steelmaker
Cognor – Modern EU Steelmaker Introduction Group Overview Strong presence on Low debt Rational and Market Polish scrap market very strong balance sheet consequent CAPEX vertical integration stabilising structure aimed at volume expansion raw material supplies and cost saving including of Financials
Slide 6: Q2 2023 Highlights
Q2 2023 Highlights Introduction Group Overview Recession or weak Falling billet and Spreads shrinking for Market GPD growth finished product prices almost all billets and -0,5% Poland and 0.3% EU YoY compared to both Q2 2022 products and Q1 2023 compared to both Q2 2022 Financials and Q1 2023 Capex
Slide 7: Group Overview - Group Structure & Shareholders
Group Overview - Group Structure & Shareholders Introduction Group 23,28% Overview Free float 100% Market JAP + SPEDEX 100% 100% 76,72% Przemysław Cognor Holding S. A. PS Holdco Sp. Z o. o. Sztuczkowski WSE quoted Financials 4 workers Sp. Z o. o. 94,40% 51% Capex Cognor Holding SK Cognor S. A. – mai
Slide 8: History [1]
History [1] Introduction Group Overview 1990 2000 2004 Przemysław Acquisition Acquisition of 82,6% of Sztuczkowski of ZW-WB, Ferrostal, a melting starts up Złomrex which a rolling mill shop in Gliwice Market trades in non-ferrous scrap in Zawiercie metals 2005 Acquisition of 100% of HSJ, Financials
Slide 9: History [2]
History [2] Introduction Group Overview 2007 2013 2022 Centrostal changes its Acquisition of 95% JAP acquisition name into Cognor, of Profil, a rolling Market integration of mill in Kraków distribution assets Financials Capex Outlook Złomrex acquires 64,4% of shares Cognor sells all distribution ass
Slide 10: Structure
Structure Introduction Group Stalowa Wola Gliwice Overview Market Financials Capex Stalowa Wola Stalowa Wola Siemianowice Śląskie (LSM) Zawiercie (ZW-WB) Kraków (Profil) Outlook Annexes 10
Slide 11: Vertically Integrated Business Model
Vertically Integrated Business Model Introduction EXTERNAL CLIENTS Group KATOWICE (PL) Overview Production of bras bars and zinc alloys (finished EXTERNAL CLIENTS products) Non- Market ferrous scrap metal POLAND ZAWIERCIE / suppliers Sourcing + processing SIEMIANOWICE (PL) of ferrous and non-ferrous
Slide 12: 2022 Circular Economy & Sustainable Steelmaking
2022 Circular Economy Introduction & Sustainable Steelmaking Group Overview 802 115 673 579 598 817 468 502 tonnes of scrap tonnes of scrap metal tonnes of semi- tonnes of billets Market metal sourced used internally finished products processed internally (billets) production Financials SCRAP BILLET
Slide 13: Company Facilities
Company Facilities Introduction Olsztyn Group Overview Headquater Market Gorzów Wielkopolski Scrap metal sites Poznań Grodzisk Mazowiecki Financials Łódź Production facilities Capex Tomaszów Mazowiecki Radom Lublin Non-ferrous foundry Wrocław Świdnica Outlook Gliwice PORAJ Kielce Opole Zawiercie Ele
Slide 14: Steel Production Facilities
PORAJ Steel Production Facilities ZAWIERCIE GLIWICE STALOWA WOLA Introduction SIEMIANOWICE ŚLĄSKIE Melting shops & rolling mills KRAKÓW NOWA HUTA Group Overview Location Product portfolio Production capacities Technology Employment HSJ Stalowa Wola Billets, Bars, Plates • Billets: 300k tonnes • 1 EA
Slide 15: Segments Performance
Segments Performance Introduction Quantities per business segments Group Overview Scrap metal (thousands of tonnes) Billets (thousands of tonnes) 228 202 192 172 180 156 152 158153 149 Market 137 136 136 127 122 112112 87 80 73 63 42 33 44 43 33 35 30 28 29 Financials Q2 2022 Q3 2022 Q4 2022 Q1 2023
Slide 16: World and the EU
World and the EU Introduction World's steel output (m tonnes) Poland's steel output (m tonnes) 600,0 2,50 Group Overview 2,11 500,0 2,00 Market 1,81 1,80 400,0 1,47 1,50 1,42 Financials 300,0 1,00 Capex 200,0 0,50 Outlook 100,0 0,0 0,00 Annexes Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q2 2022 Q3 2022
Slide 17: Billets and Finished Products: Cognor’s Share and Position in 2022
Billets and Finished Products Introduction Cognor’s Share and Position in 2022 Group Overview Producer market share Revenue split by business segments Agriculture Defence (thousands of tonnes) 4% 4% Railway Market 5% Construction Other… 30% 305 Iron and steel Financials 7% Mining 8% Machine Automoti
Slide 18: Market - EAF vs BOF technology
Market - EAF vs BOF technology Introduction Electric Arc Furnace (EAF) Basic Oxygen Furnace (BOF) Group Overview Feedstock 24,9% Iron ore (1,600 kg) applied to Market Scrap metal (1,150 kg) produce 100,0% 8,7% Coking coal (600 kg) 1000 kg of 66,4% crude steel Scrap metal (210 kg) Financials • Approx
Slide 19: BOF / EAF Feedstock Cost (USD / tonne)
BOF / EAF Feedstock Cost (USD / tonne) Introduction Feedstock costs EAF vs BOF Group 500 Overview 300 Market 100 22 13 -100 -50 -21 -51 Financials Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Difference BOF EAF Capex Raw material costs (USD / tonne) Feedstock Cost Model BOF EAF 600 tonne / tonne of crude
Slide 20: EU market protection tools
EU market protection tools Introduction Group Anti Dumping Carbon Tax Overview Since 2016 the EU has been determined on market protection. Aimed at preventing carbon leakage. It will start in 01.10.2023 The anti dumping measures are numerous and financially and be fully effective from 01.01.2026. It
Slide 21: Prices and conversion premiums (PLN / tonne)
Prices and conversion premiums (PLN / tonne) Introduction Group Ferrostal HSJ Overview 6 500 6 500 6 000 6 000 Market 5 500 5 500 5 000 5 000 4 500 4 500 Financials 4 000 4 000 3 500 3 500 3 000 3 000 Capex 2 500 2 500 2 000 2 000 1 500 1 500 Outlook 1 000 1 000 500 500 0 0 Q2 2022 Q3 2022 Q4 2022 Q
Slide 22: EBIT Generation Breakdown (PLN thousands)
EBIT Generation Breakdown (PLN thousands) Introduction Group Overview Market 41 474 Financials Capex Outlook Annexes 22
Slide 23: EBIT Bridge (PLN thousands)
EBIT Bridge (PLN thousands) Introduction Group Overview Market Financials Capex Outlook Annexes 23
Slide 24: Q2 2023 P&L Waterfall (PLN thousands)
Q2 2023 P&L Waterfall (PLN thousands) Introduction Group Overview Market Financials Capex Outlook Revenue Cost of Gross Other Distribution Administr Other Other EBIT Financial Financial Net Share of Excess Profit Income Profit for sales profit income expenses ative gains expenses income expenses fin
Slide 25: Balance Sheet (PLN thousands)
Balance Sheet (PLN thousands) Introduction Cash and cash equivalents Group Overview Trade receivables Market Assets Inventories Other non-current assets Financials Property, plant and equipment Capex EQUITY Liabilities Outlook Trade payables Current loans and borrowings Annexes Non-current loans and
Slide 26: Balance Sheet Working Capital (PLN thousands)
Balance Sheet Introduction Working Capital (PLN thousands) Group Overview 679 225 612 020 549 078 589 003 Market 516 730 545 315 502 484 437 130 444 009 415 411 Financials Capex Outlook -404 098 -431 067 -402 618 -542 084 -550 606 Annexes Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 inventories receivabl
Slide 27: Cash Flows (PLN thousands)
Cash Flows (PLN thousands) Operational CAPEX Financial Cash balance Increase Decrease Introduction Group Overview Market Financials Capex Outlook Annexes Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 27
Slide 28: Net Debt (PLN thousands) & Leverage
Net Debt (PLN thousands) & Leverage Introduction Group Overview Debt ratios 350 000 323 400 0,7 Market 300 000 0,6 250 000 0,5 Financials 200 000 0,4 164 790 150 000 0,3 113 163 Capex 100 000 86 183 0,2 62 262 50 000 0,1 Outlook 0 0,0 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 net debt net debt / LTM E
Slide 29: Cognor in new scale (thousand tonnes)
Cognor in new scale (thousand tonnes) Introduction Production of billets Production of bars Group semi-finished products finished products Overview Market +252 ZAWIERCIE Q4 2024 / SIEMIANOWICE ŚL. merchant bars 198 68 New capacities Financials +155 +200 Q3 2023 KRAKÓW Existing Capacities 304 375 240
Slide 30: Capex- Costs, Financing and Effects
Capex- Costs, Financing and Effects Introduction Group Gliwice Kraków Siemianowice Śląskie Overview replacement of EAF and ancillary items entire mill modernisation plus spooling most modern LSM mill in Europe (Completed) line (Q3 2023; Q3 2024 for spooling line) (Q4 2024) Market Cost – approximatel
Slide 31: Outlook – Q3 2023
Outlook – Q3 2023 Introduction Group Prices of Overview Macro trends Spreads (slide 3) unchanged scrap, billets and finished stable QoQ Market products expected to stabilize QoQ Financials Capex Rebar Low capacity EBITDA market in crisis. Little chance utilisation headline similar to Q2 2023 for mea
Slide 32: Dividends and Share Quoting
32 Group Capex Market Outlook Overview Annexes Financials Introduction 2018 2020 Share price (PLN) Equity P / BV LTM net profit P/E Number of shares Dividend policy 0,1 2021 0,28 0,15 0,15 1,22 Q2 2022 30.06.2023 Dividends 2022 1,07 2,80 7,54 461 190 1 211 444 25% of consolidated net profit 2023 171
Slide 33: P&L (PLN thousands)
P&L (PLN thousands) Introduction STATEMENT OF PROFIT OR LOSS Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Revenues down by 268m & 26% '000 PLN - shipments down by 14% Sales revenue 1 032 055 749 424 923 175 887 447 764 601 - energy sales: 53m Group Cost of sales -759 155 -525 130 -752 424 -783 884 -676 4
Slide 34: Assets (PLN thousands)
Assets (PLN thousands) Introduction ASSETS Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 '000 PLN A. TOTAL NON-CURRENT ASSETS 668 823 685 776 740 355 837 426 876 842 Fixed assets up by 208m & 31% Group I. Intangible assets - CAPEX: 278m (inc. PLN 39m of JAP) 14 815 14 558 12 851 20 427 19 448 Overview II.
Slide 35: Equity and Liabilites
Equity and Liabilites Introduction EQUITY AND LIABILITIES Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 '000 PLN A. EQUITY 964 602 1 094 938 1 228 431 1 405 164 1 405 164 Equity up by PLN 246m & 26% Group I. Issued share capital 257 131 257 131 257 131 257 131 257 131 - net result 461m Overview II. Reserv
Slide 36: Cash Flows & Metrics
Cash Flows & Metrics Introduction CASH FLOW Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 '000 PLN A. OPERATING ACTIVITIES 7 002 122 453 162 849 34 085 56 285 - working capital inflow: 7m Group B. INVESTING ACTIVITIES -16 540 -30 569 -109 374 -33 984 -83 865 - CAPEX outflow 86m Overview C. FINANCING ACTIV
Slide 37: Cognor Holding S.A.
Introduction Group Overview Market Financials Cognor Holding S.A. ul. Zielona 26 Capex 42 - 360 Poraj Outlook tel. +48 34 316 01 10 fax +48 34 316 01 12 Annexes www.cognor.eu 37