Eregli Demir Ve Celik Fabrikalari T.a.s. · BIST:EREGL
Eregli Demir Ve Celik Fabrikalari T.a.s — Erdemir Group — 9M 2013 Earnings Presentation
33 slides from Eregli Demir Ve Celik Fabrikalari T.a.s's earnings presentation, Nov 11, 2013
Slide 1: Erdemir Group 2013 9 Months Consolidated Financial Results
Erdemir Group 2013 9 Months Consolidated Financial Results 11 November 2013
Slide 2: Disclaimer
DISCLAIMER 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
Slide 3: Agenda
Agenda 2013 Market Overview 2013 9 Months Results 3 / 32
Slide 4: Crude steel production and sales prices by region
-50% -40% -20% -10% -30% 10% 20% 30% 40% 50% 60% 0% -50% -25% 25% 50% 75% 0% Sep-06 Sep-06 Dec-06 Dec-06 Mar-07 Mar-07 Jun-07 Jun-07 Sep-07 Sep-07 Source: * Worldsteel Dec-07 Dec-07 ** Bloomberg Mar-08 Mar-08 Jun-08 Jun-08 Sep-08 Sep-08 Dec-08 Dec-08 Mar-09 Mar-09 Jun-09 Jun-09 Sep-09 Sep-09 Dec-09
Slide 5: Crude steel capacity utilization ratio of Erdemir Group is increasing
Crude steel capacity utilization ratio of Erdemir Group is increasing CRUDE STEEL CAPACITY UTILIZATION RATIO 90,0% 88,9% 88,4% 88,0% 86,0% 84,1% 84,0% 82,0% 80,2% 80,0% 78,7% 78,3% 78,0% 76,0% 2011 2012 2013 9M Erdemir Group World Source: Worldsteel 5 / 32
Slide 6: Scrap prices are increasing
Scrap prices are increasing COKING COAL PRICES IRON ORE PRICES USD/TON (HCC PEAK DOWNS REGION FOB AUSTRALIA) (IODEX 62% FE CFR NORTH CHINA MID) USD/TON 260 160 240 150 220 140 130 200 120 180 110 160 100 140 90 120 80 06.2013 10.2013 10.2011 12.2011 02.2012 04.2012 06.2012 08.2012 10.2012 12.2012 02
Slide 7: Turkish steel consumption increased by 9% YoY
Turkish steel consumption increased by 9% in 2013 9M YoY PRODUCTION ( 000 TONS ) 34.277 31.943 9.039 26.300 26.684 26.805 9.075 25.133 25.578 6.629 4.421 4.543 7.137 6.606 25.238 22.868 19.671 20.712 22.141 19.668 18.971 2012 2011 2010 2009 2008 2013 9M 2012 9M Long Flat Total CONSUMPTION ( 000 TONS
Slide 8: Turkish iron and steel product imports increased by 29% YoY
Turkish iron and steel product imports increased by 29% in 2013 9M YoY IRON AND STEEL PRODUCT EXPORTS ( 000 TONS ) 16.563 16.806 12.506 15.239 15.861 21 14.465 94 11.598 21 60 218 1.859 1.368 1 1.294 212 1.651 2.298 1.520 2.407 1.858 2.957 2.206 2.304 2.393 1.356 3.523 11.726 11.786 12.937 8.886 10.
Slide 9: After the contraction in 2009, all markets are expanding
After the contraction in 2009, all markets are expanding CHANGES IN SECTOR DEVELOPMENT INDEX (% YoY) 40% 33,4% 30% 32,6% 22,1% 20,0% 20% 16,0% 18,3% 10% 11,3% 2,7% 5,5% 2,0% 5,9% 6,0% 11,2% 4,0% 0% -0,2% 0,6% 2,5% 4,0% 2,5% 4,0% -10% -5,5% -16,1% -20% -22,9% -30% -30,0% -40% 2009 2010 2011 2012 2013
Slide 10: HRC sales prices are lower than last year
HRC sales prices are lower than last year Çin 2.Kalite Kok Kömürü Spot İhraç Fiyatı ( USD/TON ) HRC PRICES ( USD/Ton ) 900 800 700 600 500 Feb-12 Feb-13 Dec-10 Feb-11 Dec-11 Dec-12 Jun-11 Jun-12 Jun-13 Oct-10 Oct-11 Oct-12 Oct-13 Aug-11 Aug-12 Aug-13 Apr-11 Apr-12 Apr-13 CIS EXPORT HRC BLACKSEA/BALT
Slide 11: Billet sales prices are lower than last year
Billet sales prices are lower than last year Çin 2.Kalite Kok Kömürü Spot İhraç Fiyatı ( USD/TON ) BILLET PRICES ( USD/Ton ) 750 700 650 600 550 500 450 Aug-11 Aug-12 Aug-13 Jun-13 Feb-11 Feb-12 Feb-13 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Oct-10 Oct-11 Oct-12 Oct-13 Apr-12 Apr-11 Apr-13 BILLET CHINA E
Slide 12: Agenda
Agenda 2013 Market Overview 2013 9 Months Results 12 / 32
Slide 13: Erdemir Group Key Figures
ERDEMİR GROUP KEY FIGURES 2013 9M 2012 9M 2012 2011 Liquid Steel Production (000 Tons) 6.070 5.824 8.042 7.656 (1) Slab Production (000 Tons) 4.919 4.674 6.329 6.660 (2) Flat Steel Production (000 Tons) 4.630 4.359 5.983 6.119 Long Steel Production (000 Tons) 1.022 1.010 1.519 794 Flat Steel Shipmen
Slide 14: Liquid steel production increased by 4% YoY
Liquid steel production increased by 4% in 2013 9M YoY LIQUID STEEL PRODUCTION ( 000 TONS ) 8.042 7.656 7.311 6.070 5.824 2.216 2.037 2.209 2.101 1.686 1.645 2013 2012 2013 2012 2013 2012 2013 2012 2012 2011 2010 1. Quarter 2. Quarter 3. Quarter 9 Months 14 / 32
Slide 15: Production increased by 5% YoY
Production increased by 5% in 2013 9M YoY PRODUCTION VOLUMES ( 000 TONS ) 7.501 6.913 6.793 1.519 794 5.652 1.420 5.369 1.022 1.598 1.652 1.010 1.501 1.382 1.184 2.045 2.067 1.899 4.467 1.784 1.686 1.540 4.384 3.872 445 416 161 406 278 326 3.248 3.175 439 370 493 410 404 450 1.161 1.136 1.158 956 92
Slide 16: Sales volumes increased by 6% YoY
Sales volumes increased by 6% in 2013 9M YoY SALES VOLUMES ( 000 TONS ) 7.448 6.647 6.524 1.468 791 5.725 5.391 1.393 1.052 1.627 1.553 958 1.457 1.346 1.215 2.025 2.108 1.837 1.727 1.592 1.827 4.353 4.303 456 420 176 3.674 282 256 420 3.327 3.218 429 414 464 403 453 398 1.140 1.141 1.224 1.068 963
Slide 17: Net sales revenue was 3,9 billion USD
Net sales revenue was 3,9 billion USD in 2013 9M YoY NET SALES REVENUE ( MILLION USD ) 5.340 5.338 771 931 4.427 3.867 3.977 594 495 545 4.569 4.407 3.833 1.364 1.361 1.426 1.306 1.310 3.372 3.432 1.077 249 152 176 70 181 212 1.115 1.209 1.250 1.094 1.007 1.129 2013 2012 2013 2012 2013 2012 2013 201
Slide 18: Sales to automotive industry and secondary production increased YoY
Sales to automotive industry and secondary production increased in 2013 9M YoY 2013 9M FLAT STEEL DOMESTIC SALES BREAKDOWN (%) 2012 9M FLAT STEEL DOMESTIC SALES BREAKDOWN (%) 575Kt; 14% 487Kt; 12% 238Kt; 6% 1.488Kt; 184Kt; 5% 35% 1.512Kt; 371Kt; 9% 38% 422Kt; 10% 4.230Kton; 4.016Kton; 91% 199Kt; 5%
Slide 19: Flat steel sales to EU countries was 72% of flat export
Flat steel sales to EU countries was 72% of our flat export in 2013 9M 2013 9M FLAT STEEL EXPORTS BREAKDOWN (%) 2012 9M FLAT STEEL EXPORTS BREAKDOWN (%) 22Kt; 5% 46Kt; 11% 45Kt; 10% 10Kt; 2% 232Kt; 56% 24Kt; 6% 71Kt; 17% 31Kt; 7% 443Kton; 417Kton; 9% 9% 321Kt; 72% 57Kt; 14% 2013 9M LONG STEEL EXPORT
Slide 20: Erdemir Group sales prices and cost of sales
Oct-10 Oct-10 USD/TON Nov-10 USD/TON Nov-10 Dec-10 Dec-10 Jan-11 Jan-11 Feb-11 Feb-11 Mar-11 Mar-11 Apr-11 Apr-11 May-11 May-11 Jun-11 Jun-11 Jul-11 Jul-11 Aug-11 Aug-11 Sep-11 Sep-11 Oct-11 Oct-11 Nov-11 Nov-11 Dec-11 Dec-11 Jan-12 Jan-12 Feb-12 Feb-12 Erdemir Group Billet Sales Price Erdemir Group
Slide 21: Net profit increased by 100% YoY
Net profit increased by 100% in 2013 9M YoY 1.400 EBITDA ( MILLION USD ) 32,0% 1.241 1.200 963 1.000 24,0% 751 23,2% 21,8% 20,7% 20,3% 19,4% 800 17,5% 603 16,0% 600 13,8% 435 10,6% 10,9% 11,3% 400 8,6% 294 238 218 8,0% 200 138 180 117 0 0,0% 2013 2012 2013 2012 2013 2012 2013 2012 2012 2011 2010 1.
Slide 22: EBITDA was 751 million USD in 2013 9M
EBITDA was 751 million USD in 2013 9M Consolidated EBITDA => Consolidated Net Profit (Million USD) (162) 49 (110) (101) 751 (15) 638 412 EBITDA Depreciation Interest inc. Operating Finance Tax Inc./Exp. Non- NET PROFIT (1 Jan - from overdue Income Inc./Exp. Controlling (1 Jan - 30 Sept 2013) sales/F
Slide 23: EBITDA to net cash bridge
EBITDA was 751 million USD in 2013 9M Consolidated EBITDA => Consolidated Net Cash (Million USD) (239) 49 (89) (18) 751 (117) (69) 337 (535) (89) 178 EBITDA Changes in Interest inc. Interest Exp. Interest Inc., Net Cash Used Free Cash Flow Dividends Paid Decrease in Foreign Cur. DECREASE IN (1 Jan -
Slide 24: EBITDA 2Q to 3Q 2013 bridge
EBITDA was 751 million USD in 2013 9M Consolidated EBITDA 2013 2Q => Consolidated EBITDA 2013 3Q (Million USD) (53) (40) 24 (27) 20 294 218 198 EBITDA Quantity, Mix Price Cost Non-operating Other EBITDA (1 April- Expenses (1 July - 30 June 2013) 30 Sept 2013) 24 / 32
Slide 25: EBITDA per ton for cold product was 155 USD/ton in 2013 3Q
EBITDA per ton for cold product was 155 USD/ton in 2013 3Q EBITDA PER TON (USD/TON) 161 155 141 126 138 113 100 102 104 118 100 95 92 67 84 88 61 50 53 43 9 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2012 2013 Hot Cold Long 25 / 32
Slide 26: Net debt was 1.007 million USD at the end of 2013 3Q
Net debt was 1.007 million USD at the end of 2013 3Q BORROWINGS ( MILLION USD ) 3.785 2.998 2.767 1.976 2.529 2.479 2.354 556 1.507 1.924 787 1.944 2.059 1.135 1.945 844 2.211 1.452 1.007 1.809 1.742 1.491 1.344 1.100 2008 2009 2010 2011 2012 2013 9M Long-Term Debt Short-Term Debt Net Debt 26 / 32
Slide 27: Net debt flow
Net debt was 1.007 million USD at the end of 2013 3Q NET DEBT (MILLION USD) (337) 69 (177) 1.452 1.007 - Net Debt - Flow Dividend -Payment Foreign Cur. Free Cash - Diff. - Net Debt (December 2012) and Other (September 2013) 27 / 32
Slide 28: Cash and borrowings maturity profile
Erdemir Group has 936 million USD cash and cash equivalents at the end of 2013 3Q BORROWINGS MATURITY PROFILE (MILLION USD) 582 67 457 936 401 175 44 24 305 158 23 174 413 8 340 282 218 68 3 35 166 34 9 64 1 9 0,2 Sept.13 1 Oct.-Dec. 2013 2014 2015 2016 2017 2018 2019 2020 Cash 2013 Principal Revolv
Slide 29: Raw materials made up 70% of cost of goods sold
Raw materials made up 70% of the cost of goods sold in 2013 9M COST OF PRODUCTION BREAKDOWN* - % 5% 5% 5% 3% 1% 4% 4% 4% 5% 6% 6% 7% 6% 11% 11% 12% 12% 70% 75% 74% 75% 2013 9M 2012 9M 2012 2011 Raw Materials Personnel Expenses Purchased Energy Expenses Depreciation and Amortization Exp. Non-operatin
Slide 30: Flat cost per ton excluding raw materials
Flat cost per ton excluding raw materials was realised as 177 USD/ton in 2013 3Q FLAT 500 PRODUCTS ( USD/TON )* 2.100 450 1.565 1.621 1.624 1.600 1.651 400 1.489 1.505 1.428 1.506 1.360 1.493 1.378 1.600 1.326 1.262 1.322 1.284 1.278 350 1.174 1.050 300 1.100 250 200 600 150 120 103 116 116 104 97 1
Slide 31: Capital expenditures of 288 million USD planned for 2013
Capital expenditures of 288 million USD is planned for 2013 ( M USD ) 1.017 718 634 961 445 423 675 576 288 264 242 377 200 158 423 171 159 124 209 143 86 140 68 56 59 57 93 83 38 79 43 17 2005 2006 2007 2008 2009 2010 2011 2012 2013 9M 2013 2014+ Fixed Assets Acquisition and Maintenance Capital Exp
Slide 32: Number of employees was 12.687 as of September 2013
Number of employees was 12.687 as of September 2013 NUMBER OF EMPLOYEES 15.063 14.637 13.553 13.433 13.161 13.045 12.687 2007 2008 2009 2010 2011 2012 2013 September 32 / 32
Slide 33: Q&A
Q&A