Mechel · RUS:MTLR
Mechel — H1 2005 Earnings Presentation
13 slides from Mechel's earnings presentation, Oct 17, 2005
Slide 1: 2005 First Half Results Presentation
2005 First Half Results Presentation October 17, 2005
Slide 2: Disclaimer
Disclaimer This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of Mechel OAO (Mechel) or any of its subsidiaries in any jurisdiction or an inducement to enter into investment acti
Slide 3: Introduction and Overview
“ MECHEL ——e Introduction and Overview
Slide 4: Mechel at a glance
Mechel at a glance Low-cost vertically Strong mining business: integrated producer, 2nd largest coking coal virtually self-sufficient producer and largest in raw materials exporter NYSE-listed, Strategy to increase best corporate segment value and governance practices overall efficiency Able to incr
Slide 5: Highlights
Highlights Net income was $243.6 million in 1H05 on revenues of $2.14 billion Consolidated EBITDA margin of 19.7% Acquisition of 25% +1 share stake in Yakutugol — Significant development opportunity for the mining segment, with access to a new region with substantial coal and iron ore reserves
Slide 6: 1H05: Mining Segment Accomplishments
1H05: Mining Segment Accomplishments Operating income of $310.8 million on revenues of $594.1 million — Operating income growth of 67.7% — Revenue growth of 64.0% EBITDA margin of 53.9%. Mining segment EBITDA represented 75.7% of total consolidated EBITDA Acquisition of a stake in Yakutugol, o
Slide 7: 1H05: Steel Segment Accomplishments
1H05: Steel Segment Accomplishments Revenues increased 24.3% to $1.6 billion in 1H05 Steel segment EBITDA constituted 24.3% of consolidated EBITDA Efficiency and cost-saving programs underway Commissioning of the second line of the sinter plant Product 1H05, thousand tonnes 1H05 vs. 1H04, %
Slide 8: 2005 Strategy
2005 Strategy Management to focus on profitability of operations Expansion of the mining segment — Work to sustain high profitability of the mining segment Cost control and efficiency are primary goals going forward Focus on improving profitability of steel operations Improved integration be
Slide 9: Financial Review
“ MECHEL Financial Review
Slide 10: Strong financial performance
Strong financial performance Revenues EBITDA* 4 000 3 636 1 000 908 30% 3 000 750 (US$m) 2 050 2 143 (US$m) 2 000 423 1 314 500 341 20% 1 020 1 000 207 250 106 0 0 10% 2001 2002 2003 2004 1H05 2001 2002 2003 2004 1H05 EBITDA EBITDA margin (rhs) Net profit * Total assets 4 000 3 678 3 745 90% 600 543
Slide 11: Segment operations
Segment operations Mining segment Steel segment 1 400 3 000 60% 60% 1 200 2 500 50% 50% 1 000 2 000 40% (US$m) 40% (US$m) 800 30% 1 500 600 30% 20% 1 000 20% 400 200 10% 500 10% - 0% - 0% 2001 2002 2003 20041H05 2001 2002 2003 2004 1H05 Intersegment revenues Intersegment revenues Revenues Revenues E
Slide 12: Maintain focus on cost control
Maintain focus on cost control Tight control over our cost base remains strategic priority Continued integration between subsidiaries expected to reduce costs Decreasing SG&A expenses as percent of sales Own generation of electrical energy through cogeneration facilities Own logistics and po
Slide 13: Mechel at a glance
Mechel at a glance Low-cost vertically Strong mining business: integrated producer, 2nd largest coking coal virtually self-sufficient producer and largest in raw materials exporter NYSE-listed, Strategy to increase best corporate segment value and governance practices overall efficiency Able to incr