Evraz Plc · LSE:EVR
Evraz — FY2020 Earnings Presentation
29 slides from Evraz's earnings presentation, Feb 25, 2021
Slide 1: Financial Results FY 2020
FINANCIAL RESULTS FY 2020 25 February 2021
Slide 2: Disclaimer
Disclaimer This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of EVRAZ plc (“EVRAZ”) or any of its subsidiaries in any jurisdiction (including, without limitation, EVRAZ Group S.A.
Slide 3: Core operations and distribution markets
Core operations and distribution markets Segment revenue structure1, % 4% Other operations 14% Coal 65% Steel 17% Steel, North America Consolidated revenue by region, % EVRAZ’ market shares 5% 1% Europe Africa & RoW 6% CIS 48%2 74%2 69%2 23%3 20% 38% Americas Russia among rail suppliers among rail a
Slide 4: Highlights
Highlights Alexander Frolov Chief Executive Officer
Slide 5: Performance highlights
Performance highlights Global raw material prices, $/t Intense global uncertainty caused by the outbreak of COVID-19 had a Iron ore, Fines, 62% Fe, spot, CFR China profound effect on economies and pressured global markets Hard coking coal, spot, FOB Australia Hard coking coal, spot, FOB Australia I
Slide 6: ESG highlights
ESG highlights Current 2022 environmental targets met: GHG emissions intensity ratio amounted to 1.97 tCO2e/tcs (1.97 tCO2e/tcs in 2019) E fresh water consumption reached 206 million m3 (205 million m3 in 2019) recycled 102.7% of non-mining waste (105.2% in 2019) New environmental strategy
Slide 7: Strategy priorities and 2020 results
Strategy priorities and 2020 results Strategic priorities Results Retention of low-cost position Cost cutting initiatives effect on EBITDA – $192m Development of product portfolio Customer focus initiatives effect on EBITDA – $234m and customer base Prudent CAPEX Development Maintenance CAPEX – $199
Slide 8: Vertically integrated business model supported by robust cost base
Vertically integrated business model supported by robust cost base Cash cost of slabs decreased YoY primarily Iron ore cash cost decreased YoY driven due to lower raw material prices (iron ore, Coking coal concentrate cash cost mainly by rouble depreciation, higher iron ore coal, ferroalloys), bette
Slide 9: Efficiency improvements
Efficiency improvements Cost-cutting initiatives, $m 21% Productivity and cost effectiveness 53% Auxiliary materials and The efficiency programme generated $192m of additional EBITDA service costs mostly through productivity growth, yield improvements and numerous savings projects 26% G&A costs an
Slide 10: CAPEX
CAPEX Development CAPEX breakdown by key projects CAPEX Segment Project 2020 Total CAPEX decreased by 13.8% YoY following decreased in Tashtagol iron ore mine upgrade at EVRAZ ZSMK mining site 24 spending on maintenance projects Steel Sobstvenno-Kachkanarsky deposit greenfield project 13 Rail and
Slide 11: Focus on stable dividends
Focus on stable dividends EVRAZ leverage, US$m Net Debt, $m x Net Debt/LTM EBITDA, x 3.1 1.5 0.9 1.3 1.5 EVRAZ ended 2020 with net debt of $3,356m Major leverage metric, the ratio of net debt to last twelve months 4,802 (LTM) EBITDA increased to 1.5 times as at 31 December 2020 3,966 3,571 3,356
Slide 12: Outlook for 2021
Outlook for 2021 In 2021, EVRAZ will continue to improve its safety culture, customer focus and operational efficiency, using digital tools where appropriate The Group aims to achieve significant progress in its key investment projects, the foremost of which is to upgrade the rail mills in North Ame
Slide 13: Financial performance
Financial performance Nikolay Ivanov Chief Financial Officer
Slide 14: EBITDA and margins
EBITDA and margins EBITDA amounted to $2,212m in 2020 vs $2,601m in 2019, EBITDA margin increased from 21.8% to 22.7% The decline in EBITDA was primarily attributable to lower steel, vanadium and coal product sales prices as well as lower sales of tubular and flat-rolled steel products resulting
Slide 15: FCF generation
FCF generation EVRAZ was able to deliver robust FCF in 2020 despite market headwinds FCF generation was supported by working capital release following decrease in inventories at Coal, North America and Steel segments, as well as decrease in receivables at North America segment due to sales volum
Slide 16: Debt management
Debt management Debt maturity profile, as of 31.12.2020*, $m In order to address upcoming maturities and increase available liquidity amid uncertainties in the wake of COVID-19 pandemic, Trade lines Eurobonds Swap effect EVRAZ: on RUB bond principal Bank debt RUB bonds principal 992 1,028 1,027
Slide 17: Interim dividend 2021
Interim dividend 2021 Given the performance in 2020, EVRAZ has announced an interim dividend On 24 February 2021, the Board of Directors voted to disburse a total of $437.1m, or $0.30 per share Dividend payment timetable Record Date 12 March 2021 Last day for dividend currency election 15 March
Slide 18: Operational update
=EVRAZ —— Operational update
Slide 19: Railway products in Russia
Railway products in Russia Sales declined mainly due to lower demand Export sales grew amid lower demand in EVRAZ remained the core supplier to for wheels and railcar profiles in Q2 2020 Russia and CIS resulted from the imposed Russian Railways: sales remained almost amid COVID-19 pandemic, sales of
Slide 20: Construction steel in Russia
Construction steel in Russia The construction sector was hit hard by the EVRAZ continued to develop its programme COVID-19 pandemic and demand fell YoY by EVRAZ increased its sales to export markets aimed at promoting demand for beams in 4% for rebar and 3% for structural products to hedge against l
Slide 21: Semi-finished steel
Semi-finished steel Sales of semi-finished products climbed by 7% YoY due to change in the product mix in favour of higher slab and billets sales to export destinations following a decrease in demand in Russia amid the COVID-19 pandemic Sales volumes of semi-finished products, kt Sales volumes of
Slide 22: Vanadium operations
Vanadium operations The FeV price was under pressure during Sales of vanadium final products fell YoY Q2-Q3 2020, reaching a low point in July at mainly due to weaker demand for FeV EVRAZ further expanded its customer base $22/kg due to lower buying activity in most following the imposition of COVID
Slide 23: Coal
Coal Under pressure from cuts in steel output Sales volumes increased driven by higher Long-term partnerships with Japanese, worldwide (apart from China), Russian prices shipments to Southeast Asian countries and Korean and European clients have of metallurgical coal followed international Russia am
Slide 24: EVRAZ North America
EVRAZ North America Demand was down across the three major segments (flat, tubular and railway products) served by EVRAZ amid COVID-19 pandemic and the slump in oil prices Management undertook numerous measures, including idling facilities to support free cash flow, reducing operating costs and
Slide 25: Appendix
=EVRAZ —— Appendix
Slide 26: Improved performance in key ESG ratings
Improved performance in key ESG ratings During 2020 EVRAZ has achieved the following results in ESG performance: improved its ESG rating scores for Sustainalytics, MSCI and FTSE Russell has been included into the FTSE4Good Index Series in June 2020 following scores improvement took a 2 place
Slide 27: New environmental strategy 2030
New environmental strategy 2030 In 2020, management decided to update EVRAZ’ environmental strategy to meet expectations of investment community and broader society The new environmental strategy 2030 sets ambitious goals to reduce the negative impact on the environment Goal KPI Reduce specifi
Slide 28: COVID-19 impact update
COVID-19 impact update EVRAZ remained closely focused on its operations, including logistics, supply and technological processes Operations and sales have continued to generate sufficient operating cash flow, while EVRAZ has proactively addressed its upcoming obligations and maintained a strong
Slide 29: IR@evraz.com
=EVRAZ 1 +7 495 232 1370 M IR@evraz.com