Ferrexpo Plc · LSE:FXPO
Ferrexpo — FY2023 Earnings Presentation
22 slides from Ferrexpo's earnings presentation, Apr 18, 2024
Slide 1: Full Year 2023 Financial Results
FULL YEAR 2023 FINANCIAL RESULTS 18 April 2024
Slide 2: Forward Looking Statement & Disclaimers
FORWARD LOOKING STATEMENT & DISCLAIMERS Information regarding forward-looking statements. This Presentation includes When assessing and discussing the Group’s reported financial performance, forward-looking statements. These forward-looking statements involve known financial position and cash flows,
Slide 3: Ferrexpo is a vertically-integrated, pure-play iron ore pellet producer and supplier
FERREXPO IS A VERTICALLY-INTEGRATED, PURE-PLAY IRON ORE PELLET PRODUCER AND SUPPLIER Our high-quality products are preferred What we do The outcomes we deliver by premium steel producers around the world and are enabling ECONOMIC TRANSPORTATION the transition to green MINING PROCESSING MARKETING ste
Slide 4: Why invest in Ferrexpo?
WHY INVEST IN FERREXPO? What’s the industry challenge? Why are we well positioned for the future? The essential nature Transition Our industry- leading Our unique scale, structure Our focus on of steel to green steel products and infrastructure responsible operations >1.85BN 7% -37% +50years 0.32LTI
Slide 5: Operating during a time of war
OPERATING DURING A TIME OF WAR We are determined to protect our people and our assets so that we may continue to operate and contribute positively to Ukrainian society and the economy Rail Workforce Logistics disruption Western border crossings 9% 75% One in ten of our employees are Before the full
Slide 6: Protecting our people and our assets
PROTECTING OUR PEOPLE AND OUR ASSETS Humanitarian support Resilient production Stable net cash position Investment in the future $25M 4.2MT $108M $101M Ferrexpo humanitarian and Logistics constraints Despite the ongoing war Continued capital charity fund spending on restricting production. and assoc
Slide 7: Operating during a time of war: humanitarian and CSR funding
OPERATING DURING A TIME OF WAR Humanitarian and CSR funding for over 70 projects and initiatives 5% 2% 2% 5% 9% 39% US$25M Construction of bomb shelters for employees Free meals for refugees since full-scale invasion in February 2022 18% 20% Transport and Fuel PPE and Equipment Food Supplied goods M
Slide 8: Market Review
Market Review Yaroslavna Blonska Acting Chief Marketing Officer Ferrexpo PLC | Results Presentation 8
Slide 9: 2023 Iron Ore Prices
2023 IRON ORE PRICES Stronger than forecast iron ore prices supported reduced sales volumes Anticipation Uncertainty China asserts Actual demand of post-COVID in Chinese steel-intensive short of Chinese construction economic expectations restocking sector growth peak trough volatility Q4 to US$149/t
Slide 10: Scaling production according to accessible markets
SCALING PRODUCTION ACCORDING TO ACCESSIBLE MARKETS European customers Sales 81% 4.2MT Rail, barge and seaborne Full year shipments comprising shipments to Europe, the main 3.9 million tonnes of premium 65% accessible customer market, with and 67% Fe pellets and 0.3 million 20% sold via alternative B
Slide 11: Outlook
OUTLOOK Adapting to markets during a time of war Pellet demand & premiums Premium customers 65% +Fe Green steel Short-term disruptions in Atlantic Agreements signed with leading pellet supply, coupled with European and Asian business increased restocking efforts partners to jointly advance in Europe
Slide 12: Financial Review
Financial Review Nikolay Kladiev Chief Financial Officer Ferrexpo PLC | Results Presentation 12
Slide 13: Income Statement
INCOME STATEMENT Downscaled operations continue to produce operating profit (US$ million, unless otherwise stated) 2023 2022 Change Revenue Total sales volume (mt) 4.2 6.2 (32%) • Logistics restrictions resulted in 32% fall in sales volumes. • Benchmark iron ore price increased 15% over the year, al
Slide 14: Underlying EBITDA Drivers
UNDERLYING EBITDAA DRIVERS Positive EBITDA maintained on lower sales and improved cash costs EBITDA waterfall 2023 US$m EBITDA of EBITDA margin 900 US$130 M of 20% 800 765 339 Sales • Sales volumes fell by 32% due to constrained 700 export access 170 12 (349) • Realised prices 21% lower due to lower
Slide 15: Production Cost Breakdown & Development
PRODUCTION COST BREAKDOWN & DEVELOPMENT C1 unit costs improved 8%, affected by macro factors and operational savings C1 costs breakdown ppt Explosives change Royalties 2% +15 9% +12 Grinding media 2% 10 9% 6% +9 22% 6% Electricity +6 32% 2023 +3 2 2 Maintenance US$76.5/t +0 and repairs -1 16% 20% -3
Slide 16: Cash Flow Statement
CASH FLOW STATEMENT Positive results reflect a leaner business still committed to mild capital investment (US$ million, unless otherwise stated) 2023 2022 Change Positive net cash flows from operating activities Underlying EBITDA 130 765 (83%) of US$101 million, including: Working capital inflow / (
Slide 17: Balance Sheet
BALANCE SHEET Balance sheet maintained with slight improvement in year end net cash position (US$ million) 2023 2022 Change Assets Total assets, including 1,347 1,354 (7) • Slight improvement in cash equivalents due to margin generated and overdue VAT refunds Plant, property and equipment 826 808 18
Slide 18: Business Review
Business Review Lucio Genovese Executive Chair Ferrexpo PLC | Results Presentation 18
Slide 19: Sustainability Dashboard
SUSTAINABILITY DASHBOARD Good progress even during a time of war Key safety rate (LTIFR) GHG Emissions (Scope 1&2kg/t) Women in leadership roles Community support 0.39 -32% 22% US$25M 22% 1.18 25 1.17 1.17 21% 132 20% 18% 18% 18% 110 19 0.79 92 91 89 0.58 0.51 0.41 0.39 7 6 3 2016 2017 2018 2019 202
Slide 20: Review of Operations
REVIEW OF OPERATIONS Managing the business through a longer-war scenario Mined volumes Production & Sales Quarterly average (million tonnes) Quarterly average (thousand tonnes) 4 pellet line (equivalent) 15 1,000 13 3 pellet line (equivalent) 750 10 2 pellet line (equivalent) 500 Production 5 4 1 pe
Slide 21: Outlook: 2024 Considerations
OUTLOOK 2024 Considerations Maintaining our Achieve a fourth successive fatality-free year 01 safety-first approach and low LTIFR War Protecting our people is our main priority, alongside 02 in Ukraine the preservation of our assets Supporting Safeguard employment, fiscal contribution 03 Ukraine and
Slide 22: Standing with Ukraine
Standing with Ukraine Ferrexpo PLC | Results Presentation 22