Severstal · RUS:CHMF
Severstal — Q3 2021 Earnings Presentation
18 slides from Severstal's earnings presentation, Oct 18, 2021
Slide 1: Q3 2021 Financial and Operational Results
Q3 2021 Financial and Operational Results 18.10.2021
Slide 2: Health and Safety remains a key priority
Health and Safety remains a key priority LTIFR dynamics Staff Staff+contractors 0.93 0.96 0.95 0.69 0.63 0.88 0.63 0.65 0.57 0.50 2017 2018 2019 2020 Q1 2021 Q2 2021 Q3 2021 We remain committed to eliminate all work-related fatalities and reduce LTIFR by 50% (compared with 2017) by 2025 LTIFR for st
Slide 3: Market prices started to fall as market tightness eased
Market prices started to fall as market tightness eased Steel demand has been driven by Ex-China countries HRC price was down by 110/t qoq but still higher yoy %, yoy FOB Black Sea, $/t 1,200 World China Ex-China Russia 1,000 835 800 11.5 9.1 9.1 600 400 5.3 4.5 4.7 3.7 3.0 200 2.4 2.2 Jan-20 Apr-20
Slide 4: Market Outlook
Market Outlook • Iron ore prices fell to almost $100/t CFR China due to a softening of Chinese demand as China limits steel output. • Coal prices testing new maximums: The coking coal market entered a severe deficit in China and as a result domestic Chinese coal prices skyrocketed, which also pushed
Slide 5: Q3 2021 Consolidated sales
Q3 2021 Consolidated sales 01 Crude steel output grew by 4% qoq to 2.9 mln tonnes, Crude steel production Steel sales due to the end of seasonal repairs in the BF shop in Kt Kt 49% previous quarter. 4,500 4,500 HVA share 43% 60% 4,000 4,000 40% 3,500 +4% 3,500 +1% 2,694 20% Steel sales increased by
Slide 6: Sales by region
Sales by region Steel sales volumes by destination % Export 35% 30% 33% 36% 35% 41% 43% 42% 45% 51% 52% Russia 65% 70% 67% 64% 65% 59% 57% 58% 55% 49% 48% Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Revenue by region, Q3 2021 Revenue by region, 9m 2021 % %
Slide 7: Q3 2021 Financial highlights
Q3 2021 Financial highlights Revenue EBITDA FCF EBITDA margin Net debt / EBITDA $ mln $ mln $ mln % x 3,206 1,723 992 54 0.29 + 9% qoq + 5% qoq + 6% qoq - 2 p.p. qoq - 22% qoq Revenue dynamic EBITDA dynamic $ mln $ mln 70.3% 32.0% 73.4% 37.0% 74.9% 34.5% 2,759 3,098 2,154 1,021 1,069 689 733 761 747
Slide 8: Cash Flow and Net Working Capital
Cash Flow and Net Working Capital 01 FCF increased by 6% qoq to $992 mln, driven by Q3 2021 EBITDA to FCF reconciliation higher EBITDA. $ mln 02 Cash CAPEX amounted to $284 mln (+4% qoq). EBITDA 1,723 03 NWC balances increased to $945 mln, NWC/LTM revenue ratio improved to 9.4% cash CAPEX (284) 04 N
Slide 9: Robust Liquidity and Sustainable Leverage
Robust Liquidity and Sustainable Leverage 01 Cash and cash equivalents decreased to $281 mln Robust Liquidity and Sustainable Leverage (-64% qoq) on the back of dividend payments and $ mln bonds repayment 0.84 0.52 0.37 0.29 02 Total debt declined to $1,815 mln (-22% qoq) 2,612 2,510 2,324 Net debt/
Slide 10: CAPEX projects launched in Q3 2021
CAPEX projects launched in Q3 2021 Completion of BOF shop and casting machines upgrades We confirm our guidance on CAPEX for 2021 $ bn Capacity: quantity of outputs to 86 per day 1.33 1.35 Pickling shop ramp-up ESG: elimination of wastewater pollution from the metal pickling workshop 2020 2021E It i
Slide 11: Divisional cost structure
Divisional cost structure Cherepovets Steel Mill production cash cost of slab, $/t Vorkutaugol (coking coal concentrate) Cost per tonne ($/t) Average selling price* ($/t) 131 93 102 70 505 90 102 70 85 457 334 335 323 302 321 322 325 342 331 355 346 372 306 Q2 2021 Q3 2021 9m 2020 9m 2021 271 293 25
Slide 12: Annex
a Severstal , ne oe Ns
Slide 13: Summary IFRS results
Summary IFRS results Summary Income Statement Summary Cash Flow Statement $ million, unless otherwise stated Q3 2021 Q2 2021 9M 2021 9M 20201 $ million Q3 2021 Q2 2021 9M 2021 9M 2020 Revenue 3,206 2,946 8,371 5,147 Profit before Financing and Taxation COGS (1,282) (1,193) (3,422) (3,050) 1,566 1,49
Slide 14: Divisional results
Divisional results Severstal Resources Q3 2021 Q2 2021 Change, % 9M 2021 9M 2020 Change, % Revenue ($m) 1,016 999 2% 2,762 1,275 117% Cost of sales ($m) (270) (272) (1%) (788) (697) 13% G&A expenses ($m) (19) (19) 0% (56) (61) (8%) Distribution expenses ($m) (14) (24) (42%) (45) (23) 96% EBITDA ($m)
Slide 15: Divisional operational highlights - Russian Steel Division
Divisional operational highlights - Russian Steel Division Russian Steel Division sales by product Sales volumes, kt Q3 2021 Q2 2021 Change, % 9M 2021 9M 2020 1 Change, % Total steel products 2,704 2,691 0% 8,037 8,093 (1%) Semi-finished products 489 317 54% 1,065 261 308% Hot-rolled steel: 1,115 1,
Slide 16: Divisional operational highlights - Russian Steel Division prices
Divisional operational highlights - Russian Steel Division prices Russian Steel Division average prices Sales price, $/tonne Q3 2021 Q2 2021 Change, % 9M 2021 9M 2020 Change, % Semi-finished products 646 624 4% 611 373 64% Hot-rolled steel: 1,009 846 19% 823 446 85% incl. Hot-rolled high value added
Slide 17: Divisional operational highlights - Resource Division
Divisional operational highlights - Resource Division Resource Division sales Sales by product, kt Q3 2021 Q2 2021 Change, % 9M 2021 9M 2020 Change, % Coal: 810 1,149 (30%) 3,257 4,331 (25%) Coking coal concentrate 722 905 (20%) 2,615 3,445 (24%) Steam coal 88 244 (64%) 642 886 (28%) Iron ore: 4,560
Slide 18: Thank you for your attention
a Severstal for your attention , \_