Vulcan Steel Ltd. · ASX:VSL
Vulcan Steel — Investor Presentation (August 2022)
34 slides from Vulcan Steel's investor presentation, Aug 24, 2022
Slide 1: Results Presentation FY22
VULCAN. RESULTS PRESENTATION FY22
Slide 2: Our ambition is driven by our unparalleled dedication
Our ambition is driven by our unparalleled dedication to continuous improvement. These past two years have demonstrated how our willingness to capitalise on opportunities and take considered risks over time, reaps rewards. We are always looking ahead and know that embracing change – the only constan
Slide 3: Disclaimer
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Disclaimer The material contained in this document is a presentation They may also be based on factors which are subject to of information about Vulcan Steel Limited’s (“Vulcan”) and significant uncertainties and contingencies which may Ullrich Aluminium Li
Slide 4: Agenda
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Agenda 01 Overview It has been a historic period in FY22, including our listing on the ASX and NZX. 02 Financials and Operations For the financial year ended 30 June 2022 (FY22), the Vulcan team delivered 03 a record performance - an outstanding achievement
Slide 5: Overview
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO 01 Overview 5
Slide 6: Performance Highlights
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Performance Highlights ADJUSTED EBITDA 2 CUSTOMERS TRANSACTED REVENUE (EXCLUDING OFFER COSTS & SHARE GIFT) SALES VOLUME WITH VULCAN 9 NZ$973m NZ$243m 263,175t 11,839 1 3,4 +33% on NZ$732m in FY21 (NZ$218m pre-IFRS 16 basis) +1% on 259,728 tonnes in FY21 -17
Slide 7: Vulcan's Business
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Vulcan’s Business Vulcan recently added aluminium to the company’s steel & metals distribution and processing services offering STEEL METALS Steel Distribution Plate Processing Coil Processing Stainless Steel Engineering Steels Aluminium Distributes steel h
Slide 8: Vulcan's Business continued
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Vulcan’s Business continued Trans-Tasman positions with a national footprint and significant scale drive operating leverage and supply chain capability CAIRNS DARWI N TOWNSVILLE MACKAY W HA NGA REI x3 x3 ROCKHAMPTON A UCK LA ND SILVERDA LE CAL OU N D R A HA
Slide 9: Vulcan's Business continued
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Vulcan’s Business continued Health & Safety Environment • Committed to providing a safe and healthy work environment • Scope 1 and 2 greenhouse gas emissions totalled 9.2k tonnes in FY22 compared • Trialling Inviol artificial intellingence assisted video te
Slide 10: Growth Strategy
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Growth Strategy Expansion of Business Brownfield Entry into new product and/or Opportunistic improvement expansion geographies service offering M&A initiatives • Strong track record in • Expanded into 10 regional • Successfully introduced and • Acquired and
Slide 11: Ullrich Aluminium acquisition - a compelling opportunity
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Ullrich Aluminium acquisition - a compelling opportunity 23,000t Ullrich is an integrated distribution-centric operator with a large sales 1 network, together with extrusion facilities and fabrication operations Supportive transaction metric TONNES OF ALUMI
Slide 12: Integration workstreams underway
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Integration workstreams underway • The Ullrich brand is being retained to become Vulcan Ullrich Aluminium • Action plans will be assessed for quality of synergies and placed on • Vulcan Ullrich Aluminium will be part of Vulcan’s Metals division a project ti
Slide 13: Financials & Operations
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO 02 Financials & Operations 13
Slide 14: Operating backdrop during FY22
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Operating backdrop during FY22 • Australia and New Zealand activity level - Strong momentum in 1H FY22 after the easing of COVID-19 restrictions - 2H FY22 saw a number of cross currents - COVID-19 related absenteeism, major floods across parts of Queensland
Slide 15: Global Sector Indicators
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Global Sector Indicators World steel demand is forecast to lift >2% in 2023 Short term production appears to be have peaked GLOBAL STEEL DEMAND FORECAST (m tonnes) WORLD CRUDE STEEL PRODUCTION (m tonnes) 2000 120 1900 100 1800 80 1700 1600 60 1500 40 1400 2
Slide 16: Steel, Stainless, Nickel & Freight Prices
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Steel, Stainless, Nickel & Freight Prices HRC price in NZ Dollars has fallen by c20% in Jul-Aug 2022 from Stainless price in NZ Dollars has receded c11% in Jul-Aug 2022 Jan-Jun 2022 average, container rates have fallen but break bulk from Jan-Jun 2022 avera
Slide 17: Australia and New Zealand Economic Trend
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Australia and New Zealand Economic Trend Australia Economic Activity New Zealand Economic Activity AU STATE FINAL DEMAND QUARTERLY GROWTH NZ GROSS DOMESTIC PRODUCT QUARTERLY GROWTH (seasonally adjusted, %) (seasonally adjusted, NZ$m) 10 72000 8 70000 6 6800
Slide 18: Australia and New Zealand Building Activity
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Australia and New Zealand Building Activity Australia Building Activity New Zealand Building Activity AUSTRALIAN QUARTERLY BUILDING APPROVALS NZ QUARTERLY BUILDING VALUE CONSENTED (seasonally adjusted, dwelling units) (seasonally adjusted, NZ$m) 70000 9000
Slide 19: Group Financial Performance
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Group Financial Performance • Revenue driven by 1% year-on-year (YOY) MILLION NZ$ FY22 FY21 CHANGE volume growth and 32% YOY product price Revenue 972.7 731.5 +33.0% inflation in FY22 Adjusted EBITDA 1,4 242.5 133.4 +81.8% Adjusted EBIT 2,4 • Gross margin i
Slide 20: Group Financials - Key drivers of EBITDA change
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Group Financials – Key drivers of EBITDA change • Volume growth contributed NZ$5m YOY EBITDA MOVEMENT FROM FY21 TO FY22 (NZ$m) 300 • Margin growth contributed NZ$113m 113.3 250 242.5 • YOY Net OPEX in FY21 included NZ$3m gain -9.3 224.4 on property sale. Gr
Slide 21: Steel Segment, Steel GP$/tonne
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Steel Segment, Steel GP$/tonne • Revenue increase was driven by 1% YOY (STEEL, MILLION NZ$) FY22 FY21 CHANGE growth in volume and 37% YOY product Revenue 626.2 450.2 39% price inflation EBITDA 1,2 168.5 94.5 78% - Throughput in distribution and plate Sales
Slide 22: Metals Segment, Group OPEX
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Metals Segment, Group OPEX • Revenue increase was due to 1% YOY growth (METALS, MILLION NZ$) FY22 FY21 CHANGE in volume and 22% product price inflation Revenue 346.5 281.3 23% EBITDA 95.9 59.9 60% • Gross profit per tonne lifted 33% YOY 1,2 Sales Volume (00
Slide 23: Cashflow & Working Capital
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Cashflow & Working Capital • Strong EBITDA uplift accompanied by higher tax paid FY22 EARNINGS AND CASHFLOW (CF) MOVEMENTS 300 and inventory build 242.5 250 • Working capital requirement is expected to ease in FY23 200 -11.5 -4.2 186.5 -40.3 150 • Capex was
Slide 24: Balance Sheet Metrics & Dividend
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Balance Sheet Metrics & Dividend • Increase in funds employed in FY22 reflects working capital 3.5 NET DEBT COVER (NET DEBT/EBITDA, PRE IFRS 16) 3.00 requirement which is expected to ease in FY23 3.0 • Strong balance sheet position to execute on growth stra
Slide 25: Outlook & Guidance
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO 03 Outlook & Guidance 25
Slide 26: Outlook & Guidance
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Outlook & Guidance Outlook Earnings Guidance • Global market conditions • Our EBITDA guidance of between NZ$215m and NZ$235m (pre-IFRS - Ongoing COVID-19 disruption in some major markets 16 EBITDA of between NZ$180 and NZ$200m) reflects these business cycle
Slide 27: Q&A
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO 04 Q&A 27
Slide 28: Supplementary Information
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO 05 Supplementary Information 28
Slide 29: Profit and Loss Segment Disclosure
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Profit and Loss Segment Disclosure STEEL METAL CORPORATE TOTAL POST IFRS 16 1 IN MILLION NZ$ FY22 FY21 CHANGE FY22 FY21 CHANGE FY22 FY21 CHANGE FY22 FY21 CHANGE Revenue 626.2 450.2 39% 346.5 281.3 23% 0.0 0.0 - 972.7 731.5 33% Adjusted EBITDA 2 168.5 94.5 7
Slide 30: Statutory Non-GAAP Earnings Reconciliation
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Statutory Non-GAAP Earnings Reconciliation REVENUE EBITDA EBIT NPAT EPS (NZ CENTS) IN MILLION NZ$ (UNLESS STATED) FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 Statutory basis 972.7 731.5 224.4 133.4 197.1 103.5 124.0 64.8 94.4 49.3 + offer costs - - 15
Slide 31: FY22 compared with Prospectus Forecast
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO FY22 compared with Prospectus Forecast REVENUE EBITDA EBIT NPAT EPS (NZ CENTS) IN MILLION NZ$ (UNLESS STATED) FY22 P’SPCTUS 1 FY22 P’SPCTUS 1 FY22 P’SPCTUS 1 FY22 P’SPCTUS 1 FY22 P’SPCTUS 1 Statutory basis 972.7 809.3 224.4 130.7 197.1 102.5 124.0 57.1 94.4
Slide 32: Balance Sheet
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Balance Sheet IN MILLION NZ$ 30-JUN-22 30-JUN-21 CHANGE Trade and other receivables 157.2 128.1 23% Inventories 353.2 191.5 84% less trade and other payables -167.1 -139.9 19% Working capital excluding tax items 343.3 179.8 Tax payable -29.7 -13.8 116% Work
Slide 33: Operational Footprint
VULCAN RESULTS PRESENTATION FY22 VULCAN.CO Operational Footprint IN MILLION NZ$ NEW ZEALAND AUSTRALIA Steel National footprint Competes selectively1 Plate Processing National footprint Competes selectively1 Col Processing National footprint Competes selectively1 Stainless Steel National footprint Na
Slide 34: VULCAN.CO
VULCAN. VULCAN -cOo