Voestalpine Ag · VIE:VOE
Voestalpine — 1H 2004/05 Earnings Presentation
27 slides from Voestalpine's earnings presentation, November 2004
Slide 1: Business Year 2004/05 - 1st Half
BUSINESS YEAR 2004/05 -1st HALF Investor Relations November 2004 www.voestalpine.com
Slide 2: Company Overview
COMPANY OVERVIEW www.voestalpine.com
Slide 3: Group Figures: Sales, EBITD, EBIT
Group Figures: Sales 2,734.5 €m (+21%) EBITD 333.5 €m (+14%) EBIT 187.1 €m (+27%) Sales 1,400 €m 808 €m 388 €m 320 €m EBIT 112 €m 45 €m 8 €m 42 €m EBIT-margin 8.0% 5.6% 2.2% 13.2% Sales/Division 48% 28% 13% 11% BY 2004/05 – 1st Half 3
Slide 4: Updated Raw Material Situation
UPDATED RAW MATERIAL SITUATION voestalpine purchase price index 280 230 iron ore coke Index 180 coal scrap Scrap 130 Coal Poland Coke Coal 80 Coke (1Q 04/05) BY 98/99 BY 99/00 BY 00/01 BY 01/02 BY 02/03 BY 03/04 BY 04/05 CZ Danube / Rhein AUT Ukraine Iron Ore Scrap Coal Danube Iron Ore Brazil / Iron
Slide 5: Steel Price & Market Development
STEEL PRICE & MARKET DEVELOPMENT BY 2004/05 – 1st HALF 30% Strong price 20% increase in the first two quarters, mainly driven by 10% white goods, engineering and 0% construction demand -10% Further growth of 2Q 01/02 3Q 01/02 4Q 01/02 1Q 02/03 2Q 02/03 3Q 02/03 4Q 02/03 1Q 03/04 2Q 03/04 3Q 03/04 4Q
Slide 6: Outlook
OUTLOOK Rising raw material prices in Q4 Further increase in steel prices in 2005 Higher than expected shipments due to smooth start-up of blast furnace A Positive impact from wire and seamless tubes Pressure on division motion due to rising steel prices Further outstanding performance of Division P
Slide 7: Division Steel
DIVISION STEEL www.voestalpine.com
Slide 8: Division Steel Current Situation
DIVISION STEEL CURRENT SITUATION Ongoing high demand for flat steel products, including heavy plate Further upward trend of prices for all products Highly improved product-mix (HDG +22% in 1H 2004/05) Shipments will exceed last year's figure (4.2 mt BY 2003/04) despite of BF A upgrading 1H 2004/05 1
Slide 9: Division Steel: Linz 2010 - Blast Furnace A
DIVISION STEEL LINZ 2010 – BLAST FURNACE A Start of operation: October 26, 2004 Duration of revamping: July 15 – October 26 105 days Capacity increase: From 6,200 tpd to 7,800 tpd 2005/06 production scenario ~4.3 mt 3.6 mt Pig iron ~5.0 mt 4.4 mt Crude steel 2003/04 2005/06 9
Slide 10: Division Railway Systems
DIVISION RAILWAY SYSTEMS www.voestalpine.com
Slide 11: Division Railway Systems Current Situation
DIVISION RAILWAY SYSTEMS CURRENT SITUATION Weak market for rails & switches in Germany and some CEE countries Compensated by expanded deliveries to South-Africa, Australia and the US Risen raw material costs offset by price increases Strong demand for wire rod and seamless tubes 1H 2004/05 1H 2003/0
Slide 12: Division Railway Systems Growth in North America
DIVISION RAILWAY SYSTEMS GROWTH IN NORTH AMERICA Meridian Successful integration and turnaround of Richmond operations Seattle Winnipeg Acquisition of Rail Products & Fabrications Cheyenne Chicago Pueblo Production of switches & parts Newton Birmingham Asset-deal to enhance VAE Nortrak's strategic p
Slide 13: Division Motion
division motion www.voestalpine.com
Slide 14: Division Motion Current Situation
division motion CURRENT SITUATION Whole business still influenced by pressure on automotive markets Good development in tailor welded blanks and precision tubes Recovery of results in 2H expected Still difficult situation in engineering 1H 2004/05 1H 2003/04 Sales €m 388.2 352.3 EBITD €m 29.9 32.7 %
Slide 15: Division Motion Highlights
division motion HIGHLIGHTS Van Niftrik Acquisition Full integration in motion's existing production units, profitability above group level New record production in tailor welded blanks: 7.4 million blanks (compared to 6.3 million last year) in 1H 2004/05 Precision tubes Rotec Excellent business with
Slide 16: Division Profilform
DIVISION PROFILFORM www.voestalpine.com
Slide 17: Division Profilform Current Situation
DIVISION PROFILFORM CURRENT SITUATION Top profitability within voestalpine Group Strong demand for hollow sections and profiles Leading position in booming industrial markets Building industry UK European truck manufacturing Agricultural machinery Integration of Nedcon fully in-line 1H 2004/05 1H 20
Slide 18: Division Profilform
DIVISION PROFILFORM - SALES - - EBIT - 320 42 221 99 25 17 1H 2003/04 1H 2004/05 1H 2003/04 1H 2004/05 Further processing of tubes & sections Pricing policy Consolidation of Nedcon (1 month) Cost management, CIP Steel price increases passed to Promising start of new products customers and new activi
Slide 19: Financial Review
FINANCIAL REVIEW www.voestalpine.com
Slide 20: Consolidated Overview
CONSOLIDATED OVERVIEW 1H 2004/05 1H 2003/04 Change Sales €m 2,734.5 2,263.2 +21% EBITD €m 333.5 292.1 +14% % of Sales 12.2 12.9 EBIT €m 187.1 146.8 +27% % of Sales 6.8 6.5 Net Profit* €m 105.8 87.4 +21% Equity €m 1,966.1 1,829.4 +8% Investment €m 301.3 193.6 +56% Employees 24,167 22,934 +5% * acc. I
Slide 21: Cash Flow - 1H 2004/05
CASH FLOW – 1H 2004/05 1H 2004/05 1H 2003/04 Cash Flow from result €m 277 226 Change in Working Capital €m -54 -57 Cash Flow from operations €m 223 169 Net cash Flow from investments €m -301 -103 Free Cash Flow €m -78 66 21
Slide 22: Net Debt & Equity - Gearing
NET DEBT & EQUITY – GEARING 1966 1873 1786 1530 1564 831 47% 790 40% 624 635 40% 34% 252 16% 2000/01 2001/02 2002/03 2003/04 1H 2004/05 Net Debt (€m) Equity (€m) Net Debt/Equity Ratio (%) 22
Slide 23: voestalpine Value Drivers
voestalpine VALUE DRIVERS STABILITY VALUE – ENHANCING Gearing-Ratio < 70% ROCE ≥ 12% ATTRACTIVE PROFITABILITY DIVIDEND EBITD ≥ 14% Dividend Yield ~4% SALES GROWTH Internal/External 23
Slide 24: Investor Relations Contact
Reuters IR Contact VOES.VI Wolfgang Lemberger E-Mail wolfgang.lemberger@voestalpine.com Bloomberg Phone +43 / 70 / 6585-9949 VOE AV www.voestalpine.com
Slide 25: Business Year 2004/05 - 1st Half
BUSINESS YEAR 2004/05 -1st HALF Investor Relations November 2004 www.voestalpine.com
Slide 26: Backup: USP Location - Future Market Central & Eastern Europe
BAC KUP USP LOCATION: FUTURE MARKET CENTRAL & EASTERN EUROPE Unique location as high-quality producer within 500 km radius New automotive, building and household capacities voestalpine are concentrated in the core region of voestalpine Steel-capacity increase mainly Automotive dedicated to CEE House
Slide 27: Backup: Division Motion Restructuring Matzner
BAC KUP division motion RESTRUCTURING MATZNER Staff reduction Primarily in overhead-functions, no operational impact Work force reduction: 90 employees (~20% of total staff) Renunciation of extra salary (Christmas payments) Reduction in working hours Temporarily reduction up to 5 hours per week Opti