Severstal · RUS:CHMF
Severstal — Q4 2018 Earnings Presentation
21 slides from Severstal's earnings presentation, Feb 5, 2019
Slide 1: Q4 2018 Financial Results Presentation
Q4 2018 Financial Results Presentation 05.02.2019 1
Slide 2: Table of Contents
Table of Contents 03 Q4 2018 Results Overview 07 Divisional Performance 11 Financial Position 14 Market outlook 15 Appendices It isunauthorized Any strictly forbidden (or appendices annexes) to disclosure copying, is strictlyhereto) use, copy,ordisclose or of distribution distribute materials the ma
Slide 3: Q4 2018 Results Overview
Q4 2018 Results Overview Any unauthorized copying, disclosure or distribution of the materials 3 contained in this document (or its annexes) is strictly prohibited.
Slide 4: Q4 2018 Group Highlights
Q4 2018 Group Highlights 01 Group revenue remained almost flat, increasing by 1.1% q/q to $2,085 million (Q3 2018: $2,063 million), as growth in sales volumes (steel products and iron ore pellets) was offset by a decline in steel prices q/q. 02 Group EBITDA increased by 3.4% q/q to $794 million (Q3
Slide 5: Revenue & EBITDA divisional quarterly dynamics
Revenue & EBITDA divisional quarterly dynamics Revenue (m$) Q2 18 - Q4 18: Q4 2018 Group Revenue: $2,085m up 1.1% (Q3 2018: $2,063m); 2,036 1,897 1,845 Group revenue increased 1.1% as growth in sales volumes (steel 475 468 563 products and iron ore pellets) was offset by a decline in steel prices q/
Slide 6: +$350m EBITDA 2018 programme progress: key drivers from FY2017 to FY2018
+$350m EBITDA 2018 programme progress: key drivers* from FY2017 to FY2018 248 29 36 113 139 Additional effect of $426m y/y 3,142 2,577 2,716 1. 2. 3. 4. 5. EBITDA FY2017 Macro factors: selling EBITDA adjusted for Sales&Marketing Volumes Smart procurement Operational efficiency EBITDA FY2018 prices a
Slide 7: Divisional Performance
Divisional Performance Any unauthorized copying, disclosure or distribution of the materials 7 contained in this document (or its annexes) is strictly prohibited.
Slide 8: Severstal Russian Steel (RSD)
Severstal Russian Steel (RSD) 01 RSD steel product sales increased by 2% to 2.77 mln tonnes in Q4 2018, compared with the previous quarter (Q3 2018: 2.72 mln tonnes), following short-term maintenance works at rolling-mill facilities in the previous quarter. 02 The share of domestic sales declined to
Slide 9: Cherepovets Steel Mill production cash cost of slab, $/t
Cherepovets Steel Mill production cash cost of slab, $/t 377 361 350 335 342 327 334 323 321 322 325 Q4 18 non-integrated cash cost 302 of slab up $17/t q/q as a result of higher raw material prices 255 259 250 214 221 206 203 213 318 177 279 272 280 Q4 18 integrated cash cost of 264 240 237 241 243
Slide 10: Severstal Resources: Olcon & Yakovlevskiy Vorkutaugol coking coal
Severstal Resources Resources cost of sales structure for Q4 2018, % 01 Coking coal concentrate sales volumes from Vorkutaugol continued to grow by 9% q/q following a 27% increase in Q4 2018. This was largely driven by higher 9% production volumes at the Zapolyarnaya and Komsomolskaya mines. Labour
Slide 11: Financial Position
Financial Position Any unauthorized copying, disclosure or distribution of the materials contained in this document (or its annexes) is strictly prohibited. 11
Slide 12: Cash Flow and Net Working Capital
Cash Flow and Net Working Capital Q4 2018 Highlights: Q4 18 EBITDA to FCF reconciliation, $m EBITDA Q4 2018 794 01 Q4 18 free cash flow of $233m declined as a result of CAPEX growth and NWC outflow. cash CAPEX (224) interest paid & other fin. cost (27) 02 Q4 18 cash CAPEX of $224m (Q3 18: $168m). in
Slide 13: Robust Liquidity and Sustainable Leverage
Robust Liquidity and Sustainable Leverage 01 At the end of Q4 2018, cash and cash equivalents stood at $228 million (Q3 2018: $1,054 million), reflecting the dividend payment made in Q4 partly offset by FCF generation for the period. Robust liquidity and sustainable leverage 02 Gross debt remained b
Slide 14: Market Outlook
Market Outlook • In Q4 2018 global steel prices declined in both export and domestic markets due to lower than expected construction activity, the risk of trade wars and the slowdown of the Turkish economy. • China’s active environmental policy and its introduction of selective production restrictio
Slide 15: Appendices
Appendices Any unauthorized copying, disclosure or distribution of the materials contained in this document (or its annexes) is strictly prohibited. 15
Slide 16: Summary Income Statement
Summary Income Statement $ million, unless otherwise stated Q4 2018 Q3 2018 FY2018 FY2017 Revenue 2,085 2,063 8,580 7,848 COGS (1,179) (1,160) (4,918) (4,735) EBITDA 794 768 3,142 2,577 EBITDA margin, % 38.1% 37.2% 36.6% 32.8% Profit from operations 685 671 2,707 2,162 Operating margin, % 32.9% 32.5
Slide 17: Q4 2018 Revenue Breakdown by Region
Q4 2018 Revenue Breakdown by Region Severstal Russian Steel Q4 2018 revenue breakdown by region 1% 1% 1% 1% 7% Russian Federation Severstal Group Q4 2018 revenue Europe breakdown by region CIS 26% Americas 1% 2% 1% The Middle East 2% 63% Africa Russian Federation 6% Other Europe CIS 27% The Middle E
Slide 18: Q4 2018 Divisional Results
Q4 2018 Divisional Results Severstal Resources Q4 2018 Q3 2018 Change, % FY2018 FY2017 Change, % Revenue ($m) 563 468 20.3% 1,908 1,727 10.5% Cost of sales ($m) (209) (184) 13.6% (802) (808) (0.7%) G&A expenses ($m) (1) (26) (96.2%) (63) (61) 3.3% Distribution expenses ($m) (31) (32) (3.1%) (128) (1
Slide 19: Summary Balance Sheet
Summary Balance Sheet As at 31 As at 31 $ million December 2018 December 2017 Cash and Cash Equivalents 228 1,031 Total Assets: 5,874 7,209 Current Assets 2,072 2,952 Non-current Assets 3,802 4,257 Total Liabilities: 2,995 3,811 Current Liabilities 1,123 1,670 Non-current Liabilities 1,872 2,141 Tot
Slide 20: Summary Cash Flow
Summary Cash Flow $ million Q4 2018 Q3 2018 FY2018 FY2017 Profit before Financing and Taxation 726 668 2,725 1,873 Cash Generated from Operations 585 777 2,822 2,269 Interest Paid (27) (20) (104) (138) Income Tax Paid (106) (118) (464) (217) Net cash from Operating Activities 452 639 2,254 1,914 Tot
Slide 21: Disclaimer
These materials are confidential and have been prepared by PAO Severstal (Severstal) solely for your information and may not be reproduced, retransmitted or further distributed to any other person or published, in whole or in part, for any other purpose. These materials may contain projections and o