Vulcan Steel Ltd. · ASX:VSL
Vulcan Steel — FY2023 Earnings Presentation
34 slides from Vulcan Steel's earnings presentation, Aug 29, 2023
Slide 1: Results Presentation FY23
VULCAN. RESULTS PRESENTATION FY23
Slide 2: Forging ahead
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Forging ahead As we collaborate with our new colleagues in aluminium, we are forging new pathways for growth. Our principles dedicated to improvement and ambition guide us at every step. Economic ups and downs will not sway our motivation or determine our d
Slide 3: Disclaimer
VULCAN RESULTS PRESENTATION FY23 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”) significant uncertainties and contingencies which may activities current as of
Slide 4: Agenda
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Agenda 01 OVERVIEW The financial year ended 30 June 2023 (FY23) has been busy, exciting, as well as a demanding twelve months 02 FINANCIALS AND OPERATIONS for our company. 03 The Vulcan team delivered another year of sound financial returns in FY23 - an out
Slide 5: Overview
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO 01 Overview 5
Slide 6: Performance highlights
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Performance highlights The combination of strong operational and financial discipline has enabled Vulcan to continue to deliver sound financial returns in FY23 ADJUSTED EBITDA 2 NZ$ CUSTOMERS TRANSACTED REVENUE NZ$ (EXCLUDING SIGNIFICANT ITEMS 3) SALES VOLU
Slide 7: Vulcan's Business
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Vulcan’s Business Vulcan added aluminium to the company’s steel & metals distribution and processing services offering in August 2022 STEEL METALS Steel Distribution Plate Processing Coil Processing Stainless Steel Engineering Steels Aluminium Distributes s
Slide 8: Growth Strategy & Update
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Growth Strategy & Update Expansion of Business Brownfield Entry into new product and/or Mergers and improvement expansion geographies service offering Acquisitions initiatives • Strong track record in • Expanded into 10 regional • Increasing the breadth • A
Slide 9: Vulcan's Network
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Vulcan’s Network Opportunity to drive more operating leverage 72 STRATEG I CAL L Y LO C A TED SITES 1,361 12k COMPANY EMPLOYEES ACTIVE CUSTOMERS* from our footprint and scale DARWIN CAIRNS TOWNSVILLE x 2 WHANG ARE I x 2 MACKAY x 2 AU C K L AND x 6 S I L VE
Slide 10: Aluminium Integration Programme
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Aluminium Integration Programme The benefits from our integration programme should become more evident in the second half of FY24. Programme completed or well advanced during FY23 Initiatives planned for FY24 • The Aluminium business is now part of Vulcan’s
Slide 11: Vulcan's Environment & Sustainability Update
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Vulcan’s Environment & Sustainability Update Health & Safety Environment • Committed to providing a safe and healthy work environment • Scope 1 and 2 greenhouse gas (GHG) emissions for pre-existing businesses was 737 • Trialling Inviol artificial intelligen
Slide 12: Financials & Operations
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO 02 Financials & Operations 12
Slide 13: Operating backdrop during FY23
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Operating backdrop during FY23 • Australia and New Zealand economic backdrop - Restrictive interest rate settings led to pull back in economic activity - Indirect boost arising from COVID-19 policy responses in FY22 abated in FY23 - Destocking activity amon
Slide 14: Group Financial Performance
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Group Financial Performance • Revenue lift in FY23 included first-time contribution from our NZ$m FY23 FY22 % change acquired aluminium business, while pre-existing revenue was Revenue 1,244.8 972.7 +28.0% steady Adjusted EBITDA 1,4 218.9 242.5 -9.7% Financ
Slide 15: Key drivers of EBITDA change
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Key drivers of EBITDA change • Volume change contributed NZ$17m decline YoY • Margin increase contributed NZ$72m rise YoY • OPEX in FY23 was up NZ$79m YoY EBITDA MOVEMENT FROM FY22 TO FY23 (NZ$m) 350 72 300 250 18 243 219 209 224 -79 -17 -10 200 IMAGE/INFOG
Slide 16: Steel Segment
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Steel Segment • Revenue decrease of 4.8% YoY in FY23 was due to 14.6% YoY decline in volume partially offset by higher revenue per tonne - Coil accounted for the majority of this volume decline • Gross profit per tonne in FY23 was down 8.9% YoY compared wit
Slide 17: Metals Segment
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Metals Segment • Revenue increase was primarily driven by first-time contribution from aluminium • Metals operations product price in FY23 increased by 34.1% YoY due largely to a change in product mix following our aluminium business acquisition while sales
Slide 18: Group OPEX
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Group OPEX • Group OPEX increased by 54.1% YoY in FY23 - Aluminium business contributed to the majority of this increase - Material underlying inflation uplift on pre-existing operations including employee, freight and travel expenses • Business integration
Slide 19: Cashflow & Working Capital
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Cashflow & Working Capital • Cash generated from earnings were applied toward: NZ$m FY23 FY22 % change - Higher lease payments Receipts from customers 1,273.8 947.8 34.4% - Higher tax payments in FY23 which were related to terminal Payments to suppliers & e
Slide 20: Balance Sheet Metrics & Dividend
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Balance Sheet Metrics & Dividend • Vulcan remains financially well-positioned to execute on growth NET DEBT COVER (Net debt/EBITDA, pre NZ IFRS 16) 3.5 opportunities 3.0 • 60%-80% annual dividend payout policy retained 2.5 - Declared FY23 final dividend of
Slide 21: Outlook & Guidance
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO 03 Outlook & Guidance 21
Slide 22: Outlook
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Outlook Ongoing economic uncertainty and inflationary pressure Business Improvement Programme Next Trading Update • With monetary policy settings in • Notwithstanding the environment, • As alluded in Vulcan’s recent market Australia and New Zealand expected
Slide 23: Q&A
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO 04 Q&A 23
Slide 24: Supplementary Information
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO 05 Supplementary Information 24
Slide 25: Profit and Loss Segment Disclosure
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Profit and Loss Segment Disclosure Steel Metal Corporate Total POST NZ IFRS 161, NZ$m FY23 FY22 % change FY23 FY22 % change FY23 FY22 % change FY23 FY22 % change Revenue 596.3 626.2 -4.8% 648.6 346.5 87.2% 0.0 0.0 - 1,244.8 972.7 28.0% Adjusted EBITDA 2 113
Slide 26: Statutory and Non-GAAP Earnings
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Statutory and Non-GAAP Earnings Revenue EBITDA EBIT NPAT EPS (NZ cents) NZ$m (unless stated) FY23 FY22 FY23 FY22 FY23 FY22 FY23 FY22 FY23 FY22 Statutory basis 1,244.8 972.7 208.7 224.4 163.4 197.0 87.9 123.9 66.9 94.3 + Integration costs 1 10.2 - 10.2 - 7.2
Slide 27: Abridged Balance Sheet
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Abridged Balance Sheet NZ$m 30 Jun 23 30 Jun 22 % change Trade and other receivables 170.7 157.2 8.6% Inventories 437.7 353.2 23.9% less trade and other payables -166.9 -167.1 -0.1% Working capital excluding tax items 441.5 343.3 28.6% Property, plant equip
Slide 28: Global Sector Indicators
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Global Sector Indicators World steel demand growth is currently Short term steel production decline reflects forecast to be modest economic conditions and seasonal factors GLOBAL STEEL DEMAND FORECAST (m tonnes) 1 WORLD MONTHLY CRUDE STEEL PRODUCTION (m ton
Slide 29: Steel, Stainless, Nickel, Aluminium & Freight Prices
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Steel, Stainless, Nickel, Aluminium & Freight Prices Average HRC price in 2H FY23 Nickel price remains elevated was broadly stable against 1H FY23 relative to stainless steel price HOT ROLLED COIL PRICE (East Asia, FOB, $/tonne) NICKEL & STAINLESS STEEL PRI
Slide 30: Australian and New Zealand Economic Trends
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Australian and New Zealand Economic Trends Australian Economic Activity New Zealand Economic Activity AU QUARTERLY ECONOMIC GROWTH 1 NZ QUARTERLY ECONOMIC GROWTH 3 (seasonally adjusted, %) (seasonally adjusted, %) 8.0 15.0 7.0 12.5 6.0 5.0 10.0 4.0 7.5 3.0
Slide 31: Australian and New Zealand Building Activity
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Australian and New Zealand Building Activity Australian Building Activity New Zealand Building Activity AU CONSTRUCTION ACTIVITY - VALUE 1 NZ QUARTERLY BUILDING ACTIVITY VALUE 3 (seasonally adjusted, A$m) (seasonally adjusted, NZ$m) 45000 10000 40000 9000 3
Slide 32: Vulcan's Business
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Vulcan’s Business Our business model at a glance... O U T CO M E Accountable profit centres 97% Delivery in full, on time E N ABL E RS Internally developed fit-for-purpose IT Flat Structure O P E RAT I O NA L EX C EL L ENC E Inventory Management Processing
Slide 33: Operational Footprint
VULCAN RESULTS PRESENTATION FY23 VULCAN.CO Operational Footprint NEW ZEALAND AUSTRALIA Steel National footprint Competes selectively1 Plate Processing National footprint Competes selectively1 Coil Processing National footprint Competes selectively1 Stainless Steel National footprint National footpri
Slide 34: VULCAN.CO
VULCAN. VULCAN -cOo