Eregli Demir Ve Celik Fabrikalari T.a.s. · BIST:EREGL
Eregli Demir Ve Celik Fabrikalari T.a.s — Erdemir Group — 9M 2010 Earnings Presentation
28 slides from Eregli Demir Ve Celik Fabrikalari T.a.s's earnings presentation, Oct 27, 2010
Slide 1: Erdemir Group 2010 9 Months Consolidated Financial Results
Erdemir Group 2010 9 Months Consolidated Financial Results 27 October 2010
Slide 2: Disclaimer
DISCLAIMER Ereğli Demir Çelik Fabrikaları T.A.ġ. (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 2010 Market Overview 2010 9M Results
Slide 4: Global crude steel production and steel prices
-50% -25% 25% 50% 75% 0% -50% -40% -30% -20% -10% 10% 20% 30% 40% 50% 60% 0% Sep-03 Sep-03 Jan-04 Jan-04 May-04 May-04 SOURCE: * WSA Sep-04 Sep-04 Jan-05 Jan-05 ** BLOOMBERG May-05 May-05 Sep-05 Sep-05 Jan-06 Jan-06 May-06 May-06 Sep-06 Sep-06 Jan-07 Jan-07 May-07 May-07 Sep-07 Sep-07 Jan-08 Jan-08
Slide 5: Raw material prices are stabilizing
Raw material prices are stabilizing CHINA 2ND QUALITY COKE SPOT EXPORT PRICE CHINA PORT FINE ORE PRICE CFR USD/TON USD/TON 800 250 700 200 600 500 150 400 300 100 200 50 100 0 0 10.2007 01.2008 04.2008 07.2008 10.2008 01.2009 04.2009 07.2009 10.2009 01.2010 04.2010 07.2010 10.2010 10.2007 01.2008 04
Slide 6: Turkish steel consumption increased by 38% in 2010 8M
Turkish steel consumption increased by 38% in 2010 8M PRODUCTION ( 000 TONS ) 26.067 26.684 17.095 25.119 16.924 23.359 4.257 4.543 2.612 19.593 4.406 3.906 4.122 3.768 21.810 22.141 20.713 14.483 19.237 13.018 15.825 2005 2006 2007 2008 2009 2009 8M 2010 8M Long Flat Total Total Long Flat CONSUMPTI
Slide 7: Turkish Steel Market (cont'd)
Turkish Steel Market ( cont’d ) IRON AND STEEL PRODUCT EXPORTS ( 000 TONS ) 16.806 15.865 10.839 94 66 13.795 218 9.395 12.668 1.368 1.164 1.648 174 35 2.407 1.242 0,1 731 1.244 2.208 9.494 1.394 1.625 1.630 2.192 0,2 1.131 1.902 12.937 8.366 10.890 11.791 9.645 6.297 6.460 2005 2006 2007 2008 2009
Slide 8: Automotive production and sales increased by 27% and 20%
Automotive production and sales increased by 27% and 20% respectively in 2010 9M YoY AUTOMOTIVE PRODUCTION (000 UNITS) AUTOMOTIVE SALES (000 UNITS) 1.045 868 %20 %27 561 435 784 616 433 484 2009 9M 2010 9M 2009 9M 2010 9M Domestic Sales Export AUTOMOTIVE CAPACITY UTILIZATION RATIO (%) 71 56 2009 9M
Slide 9: White goods production and export increased by 13% and 10%
White goods production and export increased by 13% and 10% respectively in 2010 9M YoY WHITE GOODS DOMESTIC SALES WHITE GOODS EXPORTS (000 UNITS) (000 UNITS) %8 %10 4.098 9.858 3.793 8.989 2009 9M 2010 9M 2009 9M 2010 9M WHITE GOODS PRODUCTION (000 UNITS) %13 13.577 12.033 2009 9M 2010 9M SOURCE: WH
Slide 10: After the contraction in 2009, 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) 350 305,0 300 282,2 271,6 271,1 276,0 269,2 250 216,3 212,8 208,8 200 189,4 186,1 199,9 191,2 164,4 184,2 182,8 150 164,8 158,4 153,8 149,9 145,6 144,8 131,0 121,9 100 50 2006 2007 2008 2009
Slide 11: Sales prices are going up in 2010 YoY
Sales prices are going up in 2010 YoY Çin 2.Kalite Kok Kömürü Spot Ġhraç Fiyatı ( USD/TON ) HRC PRICES ( USD/Ton ) 1.400 As of October 2010, CIS HRC 1.200 export price is 623 USD, China HRC 1.000 spot price is 644 USD, USA export 800 HRC price is 505 USD. The prices 600 were 508 USD, 564 USD, 505 US
Slide 12: Agenda
Agenda 2010 Market Overview 2010 9M Results
Slide 13: Erdemir Group Key Figures
ERDEMĠR GROUP KEY FIGURES 2010 9M 2009 9M 2009 2008 Liquid Steel Production (000 Tons) 5.427 4.713 6.619 6.122 (1) Slab Production (000 Tons) 4.197 3.176 4.569 3.995 (2) Flat Steel Production (000 Tons) 3.884 3.550 4.812 4.182 Long Steel Production (000 Tons) 1.067 1.418 1.869 1.950 Flat Steel Shipm
Slide 14: Liquid steel production increased by 15% YoY
Liquid steel production increased by 15% in 2010 9M YoY LIQUID STEEL PRODUCTION ( 000 TONS ) 6.619 6.122 5.427 5.486 4.713 1.895 1.831 1.590 1.495 1.701 1.628 2010 2009 2010 2009 2010 2009 2010 2009 2009 2008 2007 1Q 2Q 3Q 9M
Slide 15: Production was 5.0 million tons
Production in 2010 9M was 5,0 million tons PRODUCTION VOLUMES ( 000 TONS ) 6.681 6.132 5.858 1.869 4.951 4.968 1.950 Long 1.652 1.067 Long Long 1.418 1.590 1.059 Cold 1.486 1.632 1.160 Cold Cold 1.795 1.736 1.638 1.651 1.581 1.518 473 354 326 3.222 562 530 240 2.825 2.696 335 2.390 2.574 299 363 361
Slide 16: HRC sales volume increased YoY
HRC sales volume increased in 2010 9M YoY SALES VOLUME ( 000 TONS ) 6.986 5.895 5.947 1.858 5.156 Long 1.652 4.593 1.963 1.385 Long 1.665 Long 1.022 Cold 1.688 999 1.214 1.471 Cold Cold 1.685 1.725 1.842 1.503 1.405 1.589 3.464 451 559 508 318 276 295 2.572 2.557 2.461 2.607 321 326 360 436 452 318
Slide 17: Domestic sales revenue increased by 59% YoY
Domestic sales revenue increased by 59% in 2010 9M YoY NET SALES REVENUE ( MILLION TL ) 6.800 1.218 5.236 5.357 4.712 763 1.217 565 3.608 1.006 5.583 4.594 1.582 1.621 4.147 4.019 1.509 1.239 1.303 162 1.066 176 227 2.601 365 218 424 1.420 1.445 1.282 875 1.085 642 2010 2009 2010 2009 2010 2009 2010
Slide 18: Domestic sales increased
Domestic sales increased in 2010 9M 2010 9M FLAT STEEL DOMESTIC SALES BREAKDOWN ( %) 2009 9M FLAT STEEL DOMESTIC SALES BREAKDOWN ( %) 1% 2% 3% 3% 4% 2% 5% 1% 5% 2% 4% 5% 43% 9% 10% 88% 74% 50% 8% 13% 16% 14% Pipe and Profile Industry Steel Service Centers Secondary Production Wholesales Pipe and Pro
Slide 19: Flat steel sales to EU countries increased
Flat steel sales to EU countries increased in 2010 9M 2010 9M FLAT STEEL EXPORTS BREAKDOWN ( %) 2009 9M FLAT STEEL EXPORTS BREAKDOWN ( %) 1% 1% 1%6% 9% 2% 3% 4% 2% 3% 3% 10% 7% 12% 26% 7% 67% 74% EU Brazil EU Brazil Israel Egypt Egypt USA Tunisia Ukraine China India Lebanon Other Rusia Other 2010 9M
Slide 20: Flat and long steel sales prices and cost of sales
Jan-08 Jan-08 USD/TON Feb-08 Feb-08 USD/TON Mar-08 Mar-08 Apr-08 Apr-08 May-08 May-08 Jun-08 Jun-08 Jul-08 Jul-08 Aug-08 Aug-08 Sep-08 Sep-08 Oct-08 Oct-08 Nov-08 Nov-08 Dec-08 Dec-08 Jan-09 Jan-09 Feb-09 Feb-09 Mar-09 Mar-09 Apr-09 Apr-09 May-09 May-09 Ereğli Flat Sales Price USD/ton and 549 USD/to
Slide 21: EBITDA increased by 1.131% YoY
EBITDA increased by 1.131% in 2010 9M YoY EBITDA ( MILLION TL ) 1.200 1.097 48,0% 1.051 1.000 40,0% 800 775 32,0% 28,5% 600 18,3% 24,0% 461 22,3% 20,5% 19,9% 382 400 290 12,9% 300 16,0% 11,4% 200 137 85 7,3% 8,0% -51 2,4% 0 -1 0,0% -4,1% -0,7% -200 2010 2009 2010 2009 2010 2009 2010 2009 2009 2008 2
Slide 22: Medium term liquidity risk was significantly reduced through refinancing
Medium term liquidity risk was significantly reduced through refinancing BORROWINGS ( MILLION USD ) BORROWINGS MATURITY PROFILE 3.741 ( MILLION USD ) 1.516 ST Portion of LT Debt Short-Term Debt 2.998 1.359 Long-Term Debt 2.767 Liquid Funds 600 537 %83 2.140 20 481 347 907 1.468 264 72 1.076 313 1.47
Slide 23: Raw materials made up 69% of the cost of goods sold
Raw materials made up 69% of the cost of goods sold in 2010 9M COST OF PRODUCTION BREAKDOWN* - % 11% 6% 4% 6% 4% 5% 6% 6% 8% 14% 10% 13% 69% 68% 73% 2010 9M 2009 2008 Raw Materials Personnel Expenses Energy Depreciation Other RAW MATERIALS BREAKDOWN- % 10% 9% 8% 10% 8% 12% 1% 10% 21% 43% 31% 28% 34%
Slide 24: Lowest level of fixed costs was attained
Lowest level of fixed costs was attained in 2010 9M ( MILLION USD ) Total = 1.418 Total = 1.276 143 Total = 1.059 107 109 Total = 802 112 98 88 93 80 141 139 113 123 144 111 138 265 276 236 244 217 227 194 205 149 139 136 147 150 129 102 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2007 2008 2009 20
Slide 25: Costs per ton increased in 2010 3Q due to decrease in sales volume
Costs per ton increased in 2010 3Q due to decrease in sales volume FLAT PRODUCTS ( USD/TON ) 207 156 154 151 136 138 135 131 94 101 90 85 78 86 89 99 90 85 95 88 83 74 70 66 72 73 75 59 4.87163 61 4.871 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2007 4.816 2008 2009 4.8162010 Fixed Cost Per Ton Va
Slide 26: Capital expenditures of 143 million USD is planned for 2010
Capital expenditures of 143 million USD is planned for 2010 ( M USD ) 940 116 694 673 562 130 37 362 824 317 543 524 231 332 141 143 103 245 12 41 129 102 128 72 2002 - 2005 2006 2007 2008 2009 2010 2011 2012 - After Ġskenderun Investments Ereğli Investments
Slide 27: Number of employees decreased about 11% since 2007
Number of employees decreased about 11% since 2007 due to voluntary redundancies and retirements NUMBER OF EMPLOYEES 15.063 14.598 14.637 14.056 13.473 13.161 2005 2006 2007 2008 2009 2010 September
Slide 28: Q&A
Q&A