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) — FY2009 Earnings Presentation
29 slides from Eregli Demir Ve Celik Fabrikalari T.a.s's earnings presentation, Feb 22, 2010
Slide 1: Erdemir Group 2009 Consolidated Financial Results
Erdemir Group 2009 Consolidated Financial Results 22 February 2010 1 / 28
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
Slide 3: Agenda
Agenda 2009 Market Overview 2009 Results Management Policies and Measures Against Downturn and Results 3 / 28
Slide 4: EU crude steel production and HRC price
In EU27 countries, crude steel production increased by 35% in December 2009 YoY. EU27 CRUDE STEEL PRODUCTION ( YoY % )* EU HRC PRICE ( USD/TON )** 40% 1400 1269 30% 20% 1200 10% 1000 0% -10% 723 716 800 695 641 637 -20% 576 520 600 488 -30% 466 -40% 400 311 307 -50% 200 -60% 0 Oct-03 Nov-05 Oct-08 D
Slide 5: USA crude steel production and HRC price
In USA, crude steel monthly production is higher than the previous year since November 2009. USA CRUDE STEEL PRODUCTION ( YoY % )* NORTH AMERICA HRC PRICE ( FOB USD/TON )** 50% 1200 1090 30% 1000 10% 800 720 650 -10% 620 583 525 600 500 510 470 -30% 400 400 313 -50% 270 -70% 200 Dec-02 Dec-03 Dec-04
Slide 6: CIS crude steel production and HRC price
In CIS, there is an upward trend in falling prices since May 2009. CIS CRUDE STEEL PRODUCTION ( YoY % ) * CIS BLACK SEA/BALTIC EXPORT HRC PRICE ( FOB USD/TON )** 60% 1130 1200 50% 40% 970 1000 30% 20% 800 10% 595 605 0% 585 520 533 600 533 505 500 -10% 380 -20% 355 400 280 -30% 250 -40% 200 -50% 0 O
Slide 7: HRC prices are ramping up
0 100 200 300 400 500 600 700 800 0 200 400 600 800 1.000 1.200 1.400 01.2007 01.2007 USD/TON USD/TON 03.2007 03.2007 05.2007 05.2007 07.2007 07.2007 SOURCE: BLOOMBERG 09.2007 09.2007 11.2007 11.2007 EREĞLİ HRC 01.2008 01.2008 03.2008 03.2008 EFFECTIVE PRICE 05.2008 05.2008 07.2008 07.2008 09.2008 0
Slide 8: Idle capacities are being utilized again
Idle capacities are being utilized again. (January 2008:100) 110 WORLD CRUDE STEEL PRODUCTION WORLD HOT METAL PRODUCTION 105 100 95 90 85 80 75 70 Apr-08 Aug-08 Apr-09 Aug-09 May-08 May-09 Jan-08 Mar-08 Jun-08 Jul-08 Oct-08 Jan-09 Mar-09 Jun-09 Jul-09 Oct-09 Feb-08 Sep-08 Nov-08 Dec-08 Feb-09 Sep-09
Slide 9: Turkish steel market was rapidly developing until global downturn
Turkish steel market was rapidly developing until global downturn. PRODUCTION ( 000 TONS ) 26.095 26.700 395 25.111 23.044 475 129 19.601 429 4.257 4.543 4.406 343 3.903 3.760 21.363 21.762 20.576 18.712 15.498 2005 2006 2007 2008 2009 Long Flat Alloy Steel Total CONSUMPTION ( 000 TONS ) 23.715 20.8
Slide 10: Turkish Steel Market (cont'd)
Turkish Steel Market ( cont’d ) IRON AND STEEL PRODUCT EXPORTS ( 000 TONS ) 16.806 15.885 94 13.795 218 1.368 12.668 35 2.407 1.648 1.244 2.213 9.494 1.394 1.625 1.630 1.131 1.902 12.937 11.806 10.890 9.645 6.460 2005 2006 2007 2008 2009 Long Steel Billet, Bloom Flat Steel Slab Total IRON AND STEEL
Slide 11: Automotive production and sales decreased in 2009
Automotive production and sales have decreased by 24% and 16% respectively in 2009 YoY. AUTOMOTIVE PRODUCTION (000 UNITS) AUTOMOTIVE SALES (000 UNITS) 910 629 1.147 870 527 576 2008 2009 2008 2009 Domestic Sales Export AUTOMOTIVE CAPACITY UTILIZATION RATIO (%) 80 59 2008 2009 Light Vehicles SOURCE:
Slide 12: Growth is expected in all markets in 2010
After the contraction in 2009, growth is expected in all markets in 2010. SECTOR DEVELOPMENT INDEX (2000:100) 2008 2009 2010 (e) 2011 (e) 146,3 127,3 133,7 141,7 271,1 269,2 285,0 305,0 142,6 127,5 133,8 147,2 184,2 153,8 164,8 182,8 156,8 126,8 136,8 153,9 216,3 164,4 171,2 195,8 Construction Domes
Slide 13: Sales prices were steady in 2009
Sales prices were steady in 2009. Çin 2.Kalite Kok Kömürü Spot İhraç Fiyatı ( USD/TON ) HRC PRICES ( USD/Ton ) 1.400 1.200 Presently, CIS HRC export price is 1.000 575 USD, China HRC spot price is 558 USD, US export HRC price is 545 800 USD. The prices were 390 USD, 577 600 USD, 515 USD respectively
Slide 14: Agenda
Agenda 2009 Market Overview 2009 Results Management Policies and Measures Against Downturn and Results 14 / 28
Slide 15: Erdemir Group Key Figures
ERDEMİR GROUP KEY FIGURES 2009 2008 2007 Liquid Steel Production (000 Tons) 6.619 6.122 5.486 Slab Production 4.569 (1) (000 Tons) 3.995 3.680 Flat Steel Production 4.812 (2) (000 Tons) 4.182 4.206 Long Steel Production (000 Tons) 1.869 1.950 1.652 Flat Steel Shipments (000 Tons) 5.128 3.932 4.295 L
Slide 16: Liquid steel production increased by 8% in 2009
Liquid steel production increased by 8% in 2009 YoY. LIQUID STEEL PRODUCTION ( 000 TONS ) 8% 6.619 6.122 .906 1 5.486 4.713 3.085 1.590 2009 1Q 2009 1H 2009 9M 2009 2008 2007 16 / 28
Slide 17: Finished goods production increased by 8%
In 2009, finished goods production increased by 8% compared to 2008. PRODUCTION VOLUMES ( 000 TONS ) 6.681 8% 7 13 6.132 1. 5.858 1.869 4.968 1.950 1.652 LongLong Long Long 1.418 1.590 3.316 1.486CRC CRC 1.632 1.160 Cold Cold 1.092 1.736 700 3.222 HRC HRC 562 2.696 2.390 2.574 299 Hot 1.524 Hot 875
Slide 18: Sales volume increased by 19% in 2009
Sales volume increased by 19% in 2009 YoY. SALES VOLUME ( 000 TONS ) 19 % 6.986 8 31 1. 5.895 5.947 1.858 5.155 1.652 1.963 1.385 Long 1.665 Long 3.566 1.688 1.066 1.214 1.471 Cold Cold 1.725 762 3.464 559 2.556 2.607 2.461 326 1.738 Hot Hot 840 2009 1Q 2009 1H 2009 9M 2009 2008 2007 HRC CRC Long To
Slide 19: 31% of sales revenue recorded in 4Q09
31% of sales revenue of 2009 was recorded in 4Q09. NET SALES REVENUE ( MILLION TL ) 6.800 % 23 5.236 1.218 5.357 6 29 1. 763 1.217 3.607 2.304 1.002 5.583 4.594 785 4.019 1.065 2.605 422 1.519 642 2009 1Q 2009 1H 2009 9M 2009 2008 2007 Domestic Export Total 19 / 28
Slide 20: Sales breakdown by industry and export market
Sales to pipe and profile industry increased while sales to automotive, components and household appliances decreased in 2009. FLAT STEEL DOMESTIC SALES BREAKDOWN ( %) FLAT STEEL EXPORTS BREAKDOWN ( %) 12% 10% 2% 2% 2% 5% 3% 4% 44% 5% 5% 74% 26% 8% 58% 15% 12% 13% Pipe and Profile Industry Steel Ser
Slide 21: Average flat and long steel prices in 2009
In 2009, Erdemir Group average flat and long steel prices were 518 USD/ton and 439 USD/ton respectively. USD/TON Flat Sales Price Flat Cost of Sales Nov-08 Nov-09 Feb-08 Apr-08 May-08 Aug-08 Dec-08 Feb-09 Apr-09 May-09 Aug-09 Dec-09 Jan-08 Mar-08 Jun-08 Jul-08 Sep-08 Oct-08 Jan-09 Mar-09 Jun-09 Jul-
Slide 22: 78% of total EBITDA generated in 4Q09
78% of total EBITDA is generated in 4Q09. EBITDA ( MILLION TL ) 1.097 775 382 7 29 137 86 85 2009 1Q 2009 1H 2009 9M 2009 2008 2007 NET PROFIT/LOSS ( MILLION TL ) 704 228 -164 -196 -168 -291 122 2009 1Q 2009 1H 2009 9H 2009 2008 2007 22 / 28
Slide 23: Borrowings started to decline
In 2009, borrowings started to decline for the first time in the last 5 years. BORROWINGS ( MILLION USD ) BORROWINGS MATURITY PROFILE ( MILLION USD ) ST portion of LT Debt 2.998 Short-Term Debt 2.768 1.524 Long-Term Debt 600 Liquid Funds 537 2.140 20 347 907 1.468 264 72 1.076 313 48 2.211 478 399 1
Slide 24: Agenda
Agenda 2009 Market Overview 2009 Results Management Policies and Measures Against Downturn and Results 24 / 28
Slide 25: Lowest level of fixed costs attained in 2009
Lowest level of fixed costs was attained in the year 2009. ( MILLION USD ) Total = 1.418 Total = 1.276 143 Total = 1.059 107 112 109 98 88 93 80 141 113 123 111 265 276 227 236 244 217 205 194 149 139 136 147 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2007 2008 2009 Fixed Cost Variable Cost 25 / 28
Slide 26: Fixed and variable costs decreased in 2009
Fixed and variable costs decreased in 2009 YoY. FLAT PRODUCTS ( USD/TON ) 207 156 154 151 136 138 135 131 90 85 78 90 99 94 88 83 70 72 73 75 63 66 61 59 4.871 4.871 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2007 2008 2009 4.816 4.816 Fixed Cost per Ton Variable Cost per Ton LONG PRODUCTS ( USD/TON ) 161
Slide 27: No major capex in 2009
No major capex in 2009 due to the completion of a greater portion of investments in 2008. ( M USD ) 940 116 694 673 588 130 37 27 362 824 205 543 524 35 146 1 112 332 12 18 80 5 13 129 169 94 67 2002 - 2005 2006 2007 2008 2009 2010 2011 2012 - After İskenderun Investments Erdemir Mining Investments
Slide 28: Number of employees decreased
Number of employees decreased about 10% YoY and 13% since 2007 due to voluntary redundancies and retirements. NUMBER OF EMPLOYEES 15.015 15.063 14.598 14.637 14.056 13.161 2004 2005 2006 2007 2008 2009 28 / 28
Slide 29: Q&A
Q&A
Ereğli Demir ve Çelik Fabrikaları T.A.Ş. (Erdemir) — FY2009 Earnings Presentation on 6ix