Mechel · RUS:MTLR
Mechel — FY2009 Earnings Presentation
15 slides from Mechel's earnings presentation, Apr 21, 2010
Slide 1: FY 2009 Results Presentation
FY 2009 Results Presentation April 21, 2010
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: Financial Review
Financial Review 3
Slide 4: Segments Overview
Segments Overview Operating profit by segments $ Million 180 Steel Mining Ferroalloy Power Cons.adj. Consolidated Sales in Russia support results growth 155 150 131 Strong upward trends in all key 120 91 90 segments 68 50 73 62 60 37 24 Mining and Power Segments 30 13 11 12 0 4 11 14 0 demonstrate p
Slide 5: Mining Segment Performance
Mining Segment Performance Revenue, EBITDA $ Million Sales up 10% to $458 mn q-o-q 700 116% 120% 600 Administrative expenses down to 2% of 134 100% 500 105 sales in 4Q09 67 80% 400 504 52 458 Operating income up 25% to $91m 48% 53 416 60% 300 39% 344 331 40% 40% EBITDA $644 mn in 4Q09 includes 200 2
Slide 6: Mining Segment Performance
Mining Segment Performance External sales structure Continuous improvement in the coking coal 100% 6% 7% 8% 10% market: 10% 15% 80% 17% 14% prices up 22% on the FCA basis 28% 60% 32% 30% 43% export sales volumes up 11% 40% Share of coking coal sales up to 46% of 20% 56% 43% 46% 35% revenue 0% Price
Slide 7: Steel Segment Performance
Steel Segment Performance Revenue, EBITDA Revenue grew 6% to $983 mn q-o-q $ Million 1,200 100% 69 30% of 2009 revenue generated in 4Q09 51 75% 1,000 50% Positive operating result of $105 mn in 800 80 35 42 12% 7% 25% 2H09 -4% -4% 600 0% 666 7% 3% Net income $21 mn in 2H09 -39% -9% 983 -25% 400 -12%
Slide 8: Steel Segment Performance
Steel Segment Performance External sales structure 57% of the Group’s revenue in 4Q09 100% 13% 17% 17% 20% Product and market diversification helped 80% 7% 4% 5% 6% to maximise economic effect 16% 14% 15% 13% 60% 8% 6% 6% 6% Sales of higher margin products in the 11% 8% 3% 8% 3% 8% 3% 3% domestic ma
Slide 9: Ferroalloys Segment Performance
Ferroalloys Segment Performance Revenue, EBITDA Flat revenue q-o-q $ Million 175 100% Intersegment sales grew by 26% 150 21 27 75% following increase in Steel Segment 50% 125 23% consumption 13% 25% 100 -4% 12 0% Operating income grows and EBITDA 75 -19% 8% -6% 7 -6% -25% flat q-o-q after adjustment
Slide 10: Ferroalloys Segment Performance
Ferroalloys Segment Performance External sales structure Recovery in prices across all products: 100% 1% 4% 5% 3% Ni up 2% q-o-q 16% 23% 26% 26% 80% 18% FeSi up 5% q-o-q 15% 60% 18% 14% Cr up 11% q-o-q 40% 65% 59% Share of nickel sales reached 59% of 52% 55% 20% segment revenue in 4Q09 0% Increased
Slide 11: Power Segment Performance
Power Segment Performance Revenue, EBITDA $ Million The 2nd largest segment by operating 300 12% profitability and EBITDA in 2009 250 9% Revenue jumped by 46% to $165 mn in 4Q09 82 9% 9% 200 6%73 103 Gross margin increased by 82% q-o-q 73 90 150 5% 6% 6% Share of intra-group sales increased to 39% 1
Slide 12: Improving Financial Performance
Improving Financial Performance Four consecutive quarters of sustainable growth in revenue Revenue increased by 9% in 4Q09 $998 mn EBTIDA for the FY09 $74 mn Net income attributable to shareholders of Mechel for the FY09 Full year results include $494 mn of gain from remeasurement of contingent obli
Slide 13: Cash Generation Capacity
Cash Generation Capacity FY Operating CF of $562 mn with $610 mn from changes in working capital Scheduled debt amortisation serviced out of operating cash flow, as capex is financed through long-term instruments $415 mn cash balance as of December 31, 2009 Operating CF reinvested into working capit
Slide 14: Debt Profile
Debt Profile EBITDA, FFO and Net Debt Growing EBITDA improves debt service $ Million x, annualised ratios 1,000 10 8.0 683 8 In 1Q10 $480 mn of short-term debt 750 540 6 extended beyond 2010 500 370 316 420 4 1.8 2.1 239 4.8 250 3.7 1.5 2 $329 mn of unutilized committed long- 1.3 1.7 1.5 1.4 0 0 ter
Slide 15: Financial Results Overview
Financial Results Overview US$ million unless 4Q09 3Q09 Change, % otherwise stated Revenue 1,720 1,574 9% Cost of sales (1,150) (1,037) 11% Gross margin 33.2% 34.2% Operating profit 131 155 -15% Operating margin 7.6% 9.9% EBITDA 683 420 63% EBITDA margin 39.7% 26.7% Net Income 414 132 214% Net Incom