Eregli Demir Ve Celik Fabrikalari T.a.s. · BIST:EREGL

Eregli Demir Ve Celik Fabrikalari T.a.s — Ereğli Demir ve Çelik Fabrikaları T.A.Ş. (Erdemir) — H1 2014 Earnings Presentation

36 slides from Eregli Demir Ve Celik Fabrikalari T.a.s's earnings presentation, Aug 12, 2014

  1. Slide 1: Erdemir Group 2014 6 Months Consolidated Financial Results

    Erdemir Group 2014 6 Months Consolidated Financial Results 12 August 2014 1 / 35

  2. 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

  3. Slide 3: Agenda

    Agenda 2014 Market Overview 2014 6M Results 2014 Guidance 3 / 35

  4. Slide 4: Crude steel production and steel prices by region

    -50% -40% -30% -20% -10% 10% 20% 30% 40% 50% 60% -50% -25% 0% 25% 75% 50% 0% Jun-08 Jun-08 Sep-08 Sep-08 Dec-08 Dec-08 Mar-09 Mar-09 Jun-09 Source: * worldsteel Jun-09 ** Bloomberg Sep-09 Sep-09 Dec-09 Dec-09 Mar-10 Mar-10 Jun-10 Jun-10 Sep-10 Sep-10 Dec-10 Dec-10 Mar-11 Mar-11 Jun-11 Jun-11 Sep-11

  5. Slide 5: Iron ore price was 95 USD/ton at the end of July

    Iron ore price was 95 USD/ton at the end of July COKING COAL PRICES IRON ORE PRICES USD/TON (HCC PEAK DOWNS REGION FOB AUSTRALIA) (IODEX 62% FE CFR NORTH CHINA MID) USD/TON 220 160 USD/TON 200 150 180 140 130 160 120 140 110 120 100 100 90 80 80 07.2013 09.2013 07.2012 09.2012 11.2012 01.2013 03.201

  6. Slide 6: Turkish steel production increased by 3% in 2014 6M YoY

    Turkish steel production increased by 3% in 2014 6M YoY PRODUCTION ( 000 TONS ) 36.405 34.286 31.943 18.081 17.564 9.869 9.039 26.300 25.133 9.075 4.800 4.861 6.629 4.421 26.536 25.247 13.281 22.868 20.712 12.703 19.671 2014 6M 2013 6M 2013 2012 2011 2010 2009 Long Flat Total CONSUMPTION ( 000 TONS

  7. Slide 7: Turkish iron and steel product imports decreased by 7% in 2014 6M YoY

    Turkish iron and steel product imports decreased by 7% in 2014 6M YoY IRON AND STEEL PRODUCT EXPORTS ( 000 TONS ) 8.380 16.549 7.519 0,3 15.239 15.861 15.247 21 14.465 218 25 1.415 1 1.858 60 212 1.651 1.287 2.356 2.298 1.520 2.957 2.206 371 1.221 1.562 2.393 3.523 5.836 5.744 11.328 11.713 11.786 1

  8. Slide 8: Contraction in the automotive sector is expected

    Contraction in the automotive sector is expected CHANGES IN SECTOR DEVELOPMENT INDEX (% YoY) 40% 35% 33,4% 30% 32,6% 25% 22,1% 20% 20,0% 18,3% 15% 16,0% 7,5% 10% 11,3% 5,5% 7,3% 4,5% 2,7% 4,0% 4,5% 4,5% 5% 11,2% 6,8% 4,0% 0% 3,5% 0,6% 1,3% 1,0% 2,0% -5% -5,5% -10% 2010 2011 2012 2013 2014 (e) 2015 (

  9. Slide 9: 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 ) 850 750 650 550 450 Nov-11 Nov-12 Nov-13 Mar-12 Mar-13 Mar-14 Sep-12 Jul-11 May-12 Sep-11 Jul-12 May-13 Jul-13 May-14 Sep-13 Jul-14 Jan-14 Jan-12 Jan-13 CIS EXPORT HRC BLACKSEA/BALT

  10. Slide 10: 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 ) 750 700 650 600 550 500 450 400 Nov-11 Nov-12 Nov-13 Jul-11 Mar-12 May-12 Jul-12 Mar-13 May-13 Jul-13 Mar-14 May-14 Jul-14 Sep-11 Sep-12 Sep-13 Jan-12 Jan-13 Jan-14 BILLET CHI

  11. Slide 11: Agenda

    Agenda 2014 Market Overview 2014 6M Results 2014 Guidance 11 / 35

  12. Slide 12: Erdemir Group Key Figures

    ERDEMİR GROUP KEY FIGURES 2014 6M 2013 6M 2013 2012 Liquid Steel Production (000 Tons) 4.134 4.425 8.447 8.042 (1) Slab Production (000 Tons) 3.525 3.470 6.865 6.329 (2) Flat Steel Production (000 Tons) 3.356 3.251 6.427 5.983 Long Steel Production (000 Tons) 545 861 1.356 1.519 Flat Steel Shipments

  13. Slide 13: Liquid steel production was 4.1 million tons in 2014 6M YoY

    Liquid steel production was 4.1 million tons in 2014 6M YoY LIQUID STEEL PRODUCTION ( 000 TONS ) 8.447 8.042 7.656 4.425 4.134 2.135 2.216 1.999 2.209 2014 2013 2014 2013 2014 2013 2013 2012 2011 1. Quarter 2. Quarter 1. Half 13 / 35

  14. Slide 14: Crude steel capacity utilization ratio of Erdemir Group is higher than world average

    Crude steel capacity utilization ratio of ERDEMİR Group is higher than world average CRUDE STEEL CAPACITY UTILIZATION RATIO 94% 92,8% 92% 90,9% 90% 88,4% 88% 86% 84,1% 84% 82% 80,2% 80% 78,3% 77,9% 78,0% 78% 76% 2011 2012 2013 2014 6M Erdemir Group World Source: worldsteel 14 / 35

  15. Slide 15: HRC production increased by 9% in 2014 6M YoY

    HRC production increased by 9% in 2014 6M YoY PRODUCTION VOLUMES ( 000 TONS ) 7.783 7.501 6.913 1.356 1.519 794 1.844 1.598 1.652 3.902 4.112 545 861 2.067 821 932 2.045 1.910 1.992 228 4.583 4.384 4.467 317 445 416 411 439 410 493 2.536 2.319 1.264 1.161 1.272 1.158 2014 2013 2014 2013 2014 2013 20

  16. Slide 16: Sales volumes decreased by 3% in 2014 6M YoY

    Sales volumes decreased by 3% in 2014 6M YoY SALES VOLUMES ( 000 TONS ) 7.684 7.448 1.346 6.647 1.468 791 1.778 1.627 1.553 3.996 4.133 557 876 1.973 2.108 855 893 2.023 2.025 205 4.560 4.353 4.303 352 456 420 432 423 464 429 2.584 2.364 1.239 1.140 1.345 1.224 2014 2013 2014 2013 2014 2013 2013 201

  17. Slide 17: Net sales revenue was 2.6 billion USD in 2014 6M YoY

    Net sales revenue was 2,6 billion USD in 2014 6M YoY NET SALES REVENUE ( MILLION USD ) 5.340 5.338 5.142 580 771 931 2.790 2.609 425 352 4.562 4.569 4.407 1.324 1.364 1.285 1.426 250 175 2.365 174 178 2.257 1.150 1.114 1.107 1.251 2014 2013 2014 2013 2014 2013 2013 2012 2011 1. Quarter 2. Quarter 1.

  18. Slide 18: Sales to pipe and profile industry and distribution chains increased

    Sales to pipe and profile industry and distribution chains increased in 2014 6M YoY 2014 6M FLAT STEEL DOMESTIC SALES BREAKDOWN (%) 2013 6M FLAT STEEL DOMESTIC SALES BREAKDOWN (%) 308Kt; 10% 315Kt; 11% 157Kt; 5% 949Kt; 31% 156Kt; 5% 831Kt; 29% 293Kt; 10% 298Kt; 10% 3.060Kton; 2.872Kton; 114Kt; 4% 89

  19. Slide 19: Flat steel sales to EU countries was 48% of flat export

    Flat steel sales to EU countries was 48% of our flat export in 2014 6M 2014 6M FLAT STEEL EXPORTS BREAKDOWN (%) 2013 6M FLAT STEEL EXPORTS BREAKDOWN (%) 40Kt; 11% 18Kt; 5% 19Kt; 5% 20Kt; 5% 182Kt; 48% 65Kt; 17% 43Kt; 11% 379Kton; 385Kton; 11% 12% 27Kt; 7% 285Kt; 74% 65Kt; 17% 2014 6M LONG STEEL EXPO

  20. Slide 20: Average flat and long steel sales prices and cost of sales

    Jun-12 Jun-12 USD/TON USD/TON Jul-12 Jul-12 Aug-12 Aug-12 Sep-12 Sep-12 Oct-12 Oct-12 Nov-12 Nov-12 Dec-12 Dec-12 Jan-13 Jan-13 Feb-13 Feb-13 Mar-13 Mar-13 Apr-13 Apr-13 May-13 May-13 Erdemir Group Flat Sales Price Jun-13 20 / 35 Erdemir Group Long Sales Price Jun-13 Jul-13 Jul-13 644 USD/ton and 57

  21. Slide 21: Net profit increased by 19% in 2014 6M YoY

    Net profit increased by 19% in 2014 6M YoY EBITDA ( MILLION USD ) 1.400 1.241 48,0% 1.200 987 40,0% 1.000 32,0% 800 536 533 604 600 21,3% 23,2%24,0% 19,8% 20,7% 20,6% 19,1% 19,2% 17,5% 16,0% 400 282 238 254 294 11,3% 200 8,0% 0 0,0% 2014 2013 2014 2013 2014 2013 2013 2012 2011 1. Quarter 2. Quarter

  22. Slide 22: EBITDA was 536 million USD in 2014 6M

    EBITDA was 536 million USD in 2014 6M Consolidated EBITDA => Consolidated Net Profit (Million USD) (96) 15 (41) (41) (14) 536 455 359 EBITDA Depreciation Interest inc. Operating Finance Tax Inc./Exp. Non-Controlling NET PROFIT (1 Jan. - from overdue Income Inc./Exp. Interests (1 Jan. - 30 June 2014)

  23. Slide 23: EBITDA was 536 million USD in 2014 6M

    EBITDA was 536 million USD in 2014 6M Consolidated EBITDA => Consolidated Net Cash (Million USD) 23 / 35

  24. Slide 24: EBITDA per ton for flat product was 125 USD/ton in 2014 2Q

    EBITDA per ton for flat product was 125 USD/ton in 2014 2Q EBITDA PER TON (USD/TON) 153 148 141 143 130 113 135 100 100 126 125 88 111 113 107 61 64 67 54 24 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2012 2013 2014 Flat Long 24 / 35

  25. Slide 25: Net assets was 4.1 billion USD at the end of 2014 2Q

    Net assets was 4,1 billion USD at the end of 2014 2Q CONSOLIDATED NET ASSETS (MILLION USD) 4.079 4.071 3.694 3.679 2.168 2.051 732 31.12.2013 357 30.06.2014 (499) (503) (1.640) (1.889) Cash and Cash Working Capital Tangible and Financial Liabilities Provisions and NET ASSETS Equivalents Intangible A

  26. Slide 26: Net debt was 1.157 million USD at the end of 2014 2Q

    Net debt was 1.157 million USD at the end of 2014 2Q BORROWINGS ( MILLION USD ) 3.785 2.767 1.976 2.529 2.479 556 2.059 787 1.945 1.889 1.135 1.640 1.924 693 1.168 1.452 2.211 1.283 1.157 1.809 1.742 1.344 947 721 2009 2010 2011 2012 2013 2014 2Q Long-Term Debt Short-Term Debt Net Debt 26 / 35

  27. Slide 27: Net debt was 1.157 million USD at the end of 2014 2Q

    Net debt was 1.157 million USD at the end of 2014 2Q NET DEBT (MILLION USD) (512) 386 1.283 1.157 - - - Net Debt Free Cash Flow Dividend Paid Net Debt (December 2013) (June 2014) 27 / 35

  28. Slide 28: Erdemir Group has 732 million USD cash and cash equivalents

    Erdemir Group has 732 million USD cash and cash equivalents at the end of 2014 2Q BORROWINGS MATURITY PROFILE (MILLION USD) 882 Bank deposits 43 with maturity 732 more than 3 months 50 443 371 Cash and cash equivalents 683 35 293 247 22 9 156 395 271 71 238 4 39 180 1 11 68 37 1 Jun.14 2014 Jun.-Dec

  29. Slide 29: Raw materials made up 71% of the cost of sales in 2014 6M

    Raw materials made up 71% of the cost of sales in 2014 6M COST OF SALES BREAKDOWN* - % 6% 5% 5% 3% 1% 1% 4% 4% 4% 5% 6% 6% 7% 7% 12% 11% 11% 11% 71% 72% 74% 75% 2014 6M 2013 2012 2011 Raw Materials Personnel Expenses Purchased Energy Expenses Depreciation and Amortization Exp. Non-operating Expenses

  30. Slide 30: Flat cost per ton excluding raw materials was 171 USD/ton in 2014 2Q

    Flat cost per ton excluding raw materials was realised as 171 USD/ton in 2014 2Q FLAT PRODUCTS ( USD/TON )* 500 2.100 1.797 450 1.621 1.624 1.600 1.651 1.675 1.682 1.489 1.505 1.565 1.428 1.506 1.360 1.493 400 1.322 1.284 1.278 1.378 1.600 350 300 1.100 250 200 600 150 109 111 120 103 116 106 116 10

  31. Slide 31: Capital expenditures of 377 million USD is planned for 2014

    Capital expenditures of 377 million USD is planned for 2014 ( M USD ) 1.017 718 731 634 961 445 377 675 731 576 264 242 377 200 286 158 162 171 159 143 107 80 43 140 68 56 59 57 93 83 55 37 91 43 17 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2014 2015 - 6M 2018 Fixed Assets Acquisition and Ma

  32. Slide 32: Number of employees was 12.687 as of June 2014

    Number of employees was 12.687 as of June 2014 NUMBER OF EMPLOYEES 14.637 13.553 13.433 13.161 13.045 12.801 12.687 2008 2009 2010 2011 2012 2013 2014 June 32 / 35

  33. Slide 33: Agenda

    Agenda 2014 Market Overview 2014 6M Results 2014 Guidance 33 / 35

  34. Slide 34: 2014 Guidance

    2014 GUIDANCE Production (M. Tons) Sales (M. Tons) 8,1 8,1 7,8 7,7 6,7 6,3 6,7 6,4 1,4 1,4 1,4 1,4 2013 Actual 2014 Budget 2013 Actual 2014 Budget Long Flat Long Flat 34 / 35

  35. Slide 35: 2014 Guidance: EBITDA and Net Profit Margins

    2014 GUIDANCE EBITDA and Net Profit Margins  EBITDA and Net Profit Margins were 19.2% and 9.4% respectively in 2013.  EBITDA and Net Profit Margins are expected to be 18- 20% and 11-13% respectively in 2014. 35 / 35

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Ereğli Demir ve Çelik Fabrikaları T.A.Ş. (Erdemir) — H1 2014 Earnings Presentation on 6ix