Acerinox Sa · BME:ACX
Acerinox Sa — Shareholder Meeting (2016)
60 slides from Acerinox Sa's shareholder meeting presentation, 2016
Slide 1: General Shareholders' Meeting Business Year 2015
GENERAL SHAREHOLDERS’ MEETING BUSINESS YEAR 2015 0
Slide 2: Chairman's Report
CHAIRMAN´S REPORT 1
Slide 3: Global economy
CHAIRMAN´S REPORT Global economy 2
Slide 4: The Spanish economy
CHAIRMAN´S REPORT The Spanish economy 3
Slide 5: Business year results
CHAIRMAN´S REPORT Business year results 4
Slide 6: First Quarter 2016
CHAIRMAN´S REPORT First Quarter 2016 5
Slide 7: Significant events worth highlighting
CHAIRMAN´S REPORT Significant events worth highlighting 6
Slide 8: Responsibility and sustainability
CHAIRMAN´S REPORT Responsibility and sustainability 7
Slide 9: Research & Development
CHAIRMAN´S REPORT Research & Development 8
Slide 10: Corporate governance
CHAIRMAN´S REPORT Corporate governance 9
Slide 11: Acerinox share
CHAIRMAN´S REPORT Acerinox share 10
Slide 12: Agreements
CHAIRMAN´S REPORT Agreements 11
Slide 13: The path forward
CHAIRMAN´S REPORT The path forward 12
Slide 14: CEO's Report
CEO´S REPORT 13
Slide 15: Acerinox Headquarters
Acerinox Headquarters 14
Slide 16: World economic crisis 2015
WORLD ECONOMIC CRISIS 2015 Lower growth expectations in the US Risk of the European Union, Greece Slower growth in China Raw material crisis Political tensions, conflicts, refugees ... 15
Slide 17: Raw material crisis
R AW M AT E R I A L C R I S I S O f f i c i a l r a w m a t e r i a l p r i c e s i n t h e L . M . E . Ye a r 2 0 1 5 Daily percentage data(US$/Mt, cash) 25% Nickel Cooper Aluminum Zinc 0% -17.2% -25% -25.5% -26.7% -41.8% -50% 2015 16
Slide 18: Recovery of activity
RECOVERY OF ACTIVITY Runway 17
Slide 19: Stainless steel world production
S TA I N L E S S S T E E L W O R L D P R O D U C T I O N China Rest of Asia America Europe + Africa 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 18
Slide 20: Stainless steel world production
S TA I N L E S S S T E E L W O R L D P R O D U C T I O N China Rest of Asia 52% America Europe + Africa 3% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 19
Slide 21: Stainless steel world production
S TA I N L E S S S T E E L W O R L D P R O D U C T I O N 21.6 million tons China Rest of Asia 52% America Europe + Africa 730,000 tons 3% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20
Slide 22: Demonstration in Brussels against China as a market economy
Demonstration in Brussels against China as a market economy 21
Slide 23: Factory of Acerinox Europa
Factory of Acerinox Europa 22
Slide 24: Factory of North American Stainless
Factory of North American Stainless 23
Slide 25: China
CHINA TO TA L E X P O R T S Tons 400,000 300,000 S o u r c e : 200,000 I S S F 100,000 E F M A M J JL A S O N D E F M A M J JL A S O N D 2014 2015 DEMAND IN CHINA Exports decreses 13% CONSTRUCTION +1% S o u r c e : N B S C A A M S o u r c e : S o u r c e : HOUSEHOLD AUTO APPLIANCES N B S PROD: +3% -
Slide 26: World production: evolution
WORLD PRODUCTION: EVOLUTION 42,000 2015: 41.5 millIon tons Thousand tons 36,000 30,000 24,000 CAGR 1950 – 2015: 18,000 + 6% 12,000 6,000 0 1950 1960 1970 1980 1990 2000 2010 2015 Source: ISSF and Acerinox 25
Slide 27: Ship propellers and nozzles
Ship propellers and nozzles 26
Slide 28: Worker at the Bahru Stainless factory
Worker at the Bahru Stainless factory 27
Slide 29: Apparent consumption
A P PA R E N T C O N S U M P T I O N % 2015 – 2014 Euro / Africa América -1.7% China -7.0% +1.5% Source: ISSF 28
Slide 30: Acerinox production
ACERINOX PRODUCTION Year 2015 Year 2014 Variation Q1 Q2 Q3 Q4 Accumulated Jan-Dec 2015 / 2014 Melting Shop 601 611 562 546 2,320 2,325 -0.2% Thousand Mt Hot Rolling 524 536 498 481 2,039 2,049 -0.5% Cold Rolling 395 430 393 390 1,609 1,556 3.4% Long Product (Hot Rolled) 57 61 51 48 216 242 -10.6% 29
Slide 31: Steelmakers concentration
S T E E L M A K E R S C O N C E N T R AT I O N CARBON STEEL S TA I N L E S S S T E E L 25% To p 1 0 To p 1 0 producers 42% producers 58% Rest 75% Rest First producer: 5.7% Acerinox: 5.8% Source: World Steel, Platts, SMR, ISSF and Acerinox 30
Slide 32: Acerinox production
ACERINOX PRODUCTION Year 2015 Year 2014 Variation Q1 Q2 Q3 Q4 Accumulated Jan-Dec 2015 / 2014 Melting Shop 601 611 562 546 2,320 2,325 -0.2% Thousand Mt Hot Rolling 524 536 498 481 2,039 2,049 -0.5% Cold Rolling 395 430 393 390 1,609 1,556 3.4% Long Product (Hot Rolled) 57 61 51 48 216 242 -10.6% Co
Slide 33: Stainless steel cold rolled sheet prices
S TA I N L E S S S T E E L C O L D R O L L E D S H E E T PRICES AISI 304 2.0 mm NORTH EUROPEAN MARKET 3,000 €/Mt 2,500 2,000 1,500 Alloy surcharge 1,000 500 Base price 0 J F M A M J Jl A S O N D J F M A M J JL A S O N D J F M A M J JL A S O N D 2014 2015 2016 Source : Platts Source: Platts 32
Slide 34: Stainless steel cold rolled sheet prices
S TA I N L E S S S T E E L C O L D R O L L E D S H E E T PRICES AISI 304 2.0 mm Sharp declines in all 3,500 markets 3,000 2,500 EUROPE 2,000 USA ASIA 1,500 2014 2015 2016 Source : Platts USD/t, final price, including alloy surcharge 33
Slide 35: Nickel price in the LME
NICKEL PRICE IN THE LME Twenty months of downward tendency 25,000 12-year lows 20,000 15,000 10,000 5,000 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M 2014 2015 2016 Average price: cash / three months (USD/Mt. Ni) 34
Slide 36: Nickel price in the LME
NICKEL PRICE IN THE LME Minimum levels since 2003 55,000 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Monthly average prices (USD/Mt. Ni.) 35
Slide 37: European Union
EUROPEAN UNION COLD ROLLED IMPORTS COLD ROLLED INVENTORIES Reference: Germany Mt Normalized levels 120,000 S o u r c e : E H V 100,000 70 Days of rotation 100,000 S o u r c e : 80,000 80,000 65 Tons 60 60,000 60,000 55 40,000 40,000 50 E U R O F E R 20,000 20,000 45 0 J FMAM J J A SOND J FMAM J J A
Slide 38: United States
U N I T E D S TAT E S I N V E N T O R I E S AT D I S T R I B U T O R S COLD ROLLED IMPORTS Normalized levels S o u r c e : M S C I Mt S o u r c e : 600 4 Months of rotation Thousand tons 500 400 U S 300 3 D e p t . 200 100 C o m m e r c e 0 2 J F M A M J JL A S O N D J F M A M J JL A S O N D Strong
Slide 39: Overcapacity: China
O V E R C A PA C I T Y: C H I N A INVENTORIES IN WUXI AND FOSHAN TO TA L E X P O R T S Thousand tons Source: 51 bxg Tons 400 400,000 300 300,000 200 S o u r c e : 100 200,000 0 J F M A M J JL A S O N D J F M A M J JL A S O N D I S S F 100,000 E F M A M J JL A S O N D E F M A M J JL A S O N D 2014 20
Slide 40: Main financial figures of Acerinox
MAIN FINANCIAL FIGURES OF ACERINOX 2015 2014 Variation Net sales 4,221 4,380 -3.6% EBITDA 286 454 -37.0% Result after taxes and 43 136 -68.5% minorities Net financial debt 711 616 15.4% Net financial debt / EBITDA 2.48 1.36 83.2% Net financial debt / Equity 35% 33% 5.9% Source: Platts 39
Slide 41: Return to shareholders
RETURN TO SHAREHOLDERS 0.45 0.45 0.433 0.449 0.449 0.10 0.10 Issue premium 0.433 0.449 0.449 Dividend 0.35 0.35 11 12 13 (*) 14 (*) 15 (*) (*) Scrip dividend: 2013 57% new shares 2014 51% new shares 2015 59% new shares Source: Platts 40
Slide 42: Investments
INVESTMENTS 2015 2014 Acerinox, S.A. 1 1 Acerinox Europa 30 16 NAS 32 9 Million euros Columbus 6 6 Bahru Stainless 23 39 Roldán and Inoxfil 1 1 Spanish Trading Companies 0 0 Overseas Trading Companies 0 1 Total 94 74 Investments in NAS and Acerinox Europa Source: Platts 41
Slide 43: Strategic plan - Main guidelines
S T R AT E G I C P L A N 2 0 1 6 - 2 0 2 0 Main guidelines Belief on the product Organic growth Postpone investments at Bahru Stainless waiting for new opportunities Strategic plan Maximum capacity Operative Excellence utilization Strategic plan Quick-return Financial Strength investments Cash flow
Slide 44: Investments
INVESTMENTS NAS Bright Anneal and ZM lines investments • 11 6 m i l l i o n e u r o s • Goals: • enter into the BA market in the United States • Increase NAS capacity utilization • Main applications: household a p p l i a n c e s , c u t l e r y, t r u c k s , fireplaces, etc A C E R I N O X E U R O
Slide 45: Factory of Bahru Stainless
Factory of Bahru Stainless 44
Slide 46: Capacity vs production
C A PA C I T Y v s P R O D U C T I O N Unconfirmed projects Increases of capacity Melting capacity Melting producion Source : Acerinox Source: Platts 45
Slide 47: Commercial network
COMMERCIAL NETWORK Office Offices 30 31 ServiceCentres Services centers 18 18 Agent Agents 13 33 Warehouse Wharehouses 26 26 Factory Factories 66 46
Slide 48: Factory of Bahru Stainless
Factory of Bahru Stainless 47
Slide 49: Factory of Columbus Stainless
Factory of Columbus Stainless 48
Slide 50: Geographical distribution of Acerinox net sales
GEOGRAPHICAL DISTRIBUTION OF ACERINOX NET SALES Europe 38.0% Oceania 0.3% Africa 5.4% Asia 10.7% America 45.7% Spanish multinational Sales in more than 80 countries Spain accounts for 9% of the total sales 49
Slide 51: Efficiency
EFFICIENCY Fixed cost savings E x c e l l e n c e P l a n I V: 2 0 1 5 - 2 0 1 6 Target: 67 million euros Includes Bahru Stainless Result 1st year: 55% (37 million euros) 50
Slide 52: Financial strength
FINANCIAL STRENGTH Net Financial Debt: 711 million euros Debt / EBITDA: 2.48x Gearing: 35% Financial expenses reduction: 11 million euros 51
Slide 53: R&D + i
R & D + i Investment: 16.5 million euros 52
Slide 54: Fishing boat with stainless steel interior equipment
Fishing boat with stainless steel interior equipment 53
Slide 55: Propulsion systems for liquefied natural gas
Propulsion systems for liquefied natural gas 54
Slide 56: Stainless steel chimneys at the Bahru Stainless factory
Stainless steel chimneys at the Bahru Stainless factory 55
Slide 57: Workers at the Columbus Stainless factory
Workers at the Columbus Stainless factory 56
Slide 58: Acerinox accident rate evolution
A C E R I N O X A C C I D E N T R AT E E V O L U T I O N N A S , I S S F S a f e t y Aw a r d 2 0 1 6 17.2 13.9 12.4 9.5 8.8 9.0 7.5 7.5 5.9 5.6 5.9 5.8 5.9 5.4 5.0 4.9 4.5 4.7 4.2 3.8 3.8 3.8 3.3 3.0 3.3 3.0 2.8 2.8 0.9 0.0 2010 2011 2012 2013 2014 2015 ACERINOX NAS COLUMBUS BAHRU AVERAGE ACX/NAS/C
Slide 59: Other awards
O T H E R AWA R D S Global Reporting Inciative G-4 Advanced Level, United Nations Global Compact NAS, ISSF Safety Award 2016 58
Slide 60: General Shareholders' Meeting Business Year 2015
GENERAL SHAREHOLDERS’ MEETING BUSINESS YEAR 2015 59