Eregli Demir Ve Celik Fabrikalari T.a.s. · BIST:EREGL

Eregli Demir Ve Celik Fabrikalari T.a.s — Ereğli Demir ve Çelik Fabrikaları T.A.Ş. (Erdemir) — FY2018 Earnings Presentation

28 slides from Eregli Demir Ve Celik Fabrikalari T.a.s's earnings presentation, Feb 7, 2019

  1. Slide 1: ING METALLURGY

    ING METALLURGY UP @vx) |

  2. Slide 2: 2018 12 Months Investor Presentation

    2018 12 Months Investor Presentation 07.02.2019

  3. Slide 3: Disclaimer

    Disclaimer Ereğli Demir Çelik Fabrikaları T.A.Ş. (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

  4. Slide 4: 2018 Market Overview

    e 2018 Market Overview @ x) MINING METALLURGY YAK |e ROUP

  5. Slide 5: Crude Steel Production (% yoy)

    5 10.0% 15.0% -5.0% 0.0% 5.0% -10.0% Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 10.0% 15.0% -5.0% 0.0% 5.0% -10.0% Nov-17 Dec-16 Dec-17 Jan-17 Jan-18 Feb-17 Feb-18 Mar-17 Mar-16 Apr-17 Apr-18 May-17 May-18 Jun-17 Jun-18 EU28 Crude Steel Production (% yoy) Crude Stee

  6. Slide 6: Coking Coal, Iron Ore & Scrap Prices

    6 100 150 200 250 300 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 150 200 250 300 350 400 Jan-17 Feb-18 Feb-17 Mar-18 Coking Coal Prices Mar-17 Apr-18 Apr-17 May-18 May-17 Jun-18 Jun-17 Jul-18 Jul-17 Aug-18 (HCC Peak Downs Region FOB Australia) Aug-17 S

  7. Slide 7: Turkish Steel Production & Consumption

    Turkish Steel Production & Consumption Flat and Long Production (mn tons) -1.1% 36.9 36.9 39.0 38.6 36.4 36.1 2013 2014 2015 2016 2017 2018 Flat and Long Consumption (mn tons) -14.9% 34.4 34.1 35.9 31.3 30.8 30.6 2013 2014 2015 2016 2017 2018 7 Source: TSPA

  8. Slide 8: Turkish Steel Exports & Imports

    Turkish Steel Exports & Imports Exports (mn tons) 17.8 15.2 1.0 14.1 13.4 14.4 1.6 13.1 0.6 0.3 0.8 6.1 2.3 2.5 0.3 2.6 3.1 4.3 11.3 11.0 10.2 10.0 10.7 9.3 2013 2014 2015 2016 2017 2018 Imports (mn tons) 18.1 16.5 15.3 14.0 13.0 13.6 7.9 6.2 4.8 5.4 4.8 4.8 7.1 8.6 8.7 9.0 7.5 6.7 1.5 1.5 1.6 1.6 1

  9. Slide 9: 2018 12M Results

    © 2018 12M Results @ x) MINING METALLURGY YAK |e ROUP

  10. Slide 10: Operational and Financial Highlights

    Operational and Financial Highlights Operational Highlights 2016 2017 2018 Growth (YoY) Liquid Steel Production (000 tons) 9,373 9,392 9,322 -0.7% Flat Steel Production* (000 tons) 7,072 7,713 7,743 0.4% Long Steel Production (000 tons) 1,572 1,328 980 -26.2% Flat Steel Shipments (000 tons) 7,163 7,

  11. Slide 11: Liquid Steel Production (000 tons)

    Liquid Steel Production (000 tons) 9,122 9,373 9,392 9,322 2,394 2,233 2,372 2015 2016 2017 2018 Q4 2017 Q3 2018 Q4 2018 11

  12. Slide 12: Crude Steel Capacity Utilization Ratio

    Crude Steel Capacity Utilization Ratio 100% 97% 97% 97% 96% 93% 78% 76% 72% 70% 69% 2013 2014 2015 2016 2017 2018 Erdemir World* 12 As of August 2018, Worldsteel no longer publishes global capacity utilization ratio for anti-trust reasons. Source: Worldsteel

  13. Slide 13: Production (000 tons)

    Production (000 tons) HRC production increased by 2.6% YoY in 2018. 8,963 9,041 8,644 8,723 1,563 1,328 980 1,572 1,822 1,701 1,820 1,781 2,320 2,197 2,152 335 232 296 5,580 5,891 6,042 466 438 398 5,291 1,519 1,527 1,458 2015 2016 2017 2018 Q4 2017 Q3 2018 Q4 2018 Hot Cold Long Slab production for

  14. Slide 14: Sales Volume (000 tons)

    Sales Volume (000 tons) Total sales increased by 5.2% QoQ in Q4 2018. 8,781 8,750 8,958 8,401 1,364 1,552 1,587 919 1,908 1,750 1,845 1,860 +5.2% 2,362 2,048 2,154 358 234 263 5,686 5,732 490 395 468 5,384 5,303 1,514 1,419 1,423 2015 2016 2017 2018 Q4 2017 Q3 2018 Q4 2018 Hot Cold Long 14 Slab sale

  15. Slide 15: Net Sales Revenue (USD mn)

    Net Sales Revenue (USD mn) +8.9% 5,598 5,140 Export revenue increased 1,163 by 58.7% YoY in 2018. 4,382 733 435 3,855 517 4,407 4,435 1,439 1,380 1,373 3,947 176 3,338 326 351 1,263 1,054 1,022 2015 2016 2017 2018 Q4 2017 Q3 2018 Q4 2018 Export Domestic 15

  16. Slide 16: Flat & Long Steel Domestic Sales Breakdown

    Flat & Long Steel Domestic Sales Breakdown Flat Steel Domestic Sales 13% 11% (748) (737) 18% 19% Pipe&Profile and Rolling (1,155) 6,553K ton (1,111) 5,953K ton 51% 53% 12M 2018 (3,058) Distribution Chains 12M 2017 (3,508) General Manufacturing Industry 17% Automotive 18% (1,036) (1,153) Long Steel D

  17. Slide 17: EBITDA & Net Profit

    EBITDA & Net Profit EBITDA (USD mn) EBITDA Margin (%) 29.1% 30.7% 17.6% 23.2% +15,0% 31.8% 32.2% 26.0% 1.496 1.720 895 458 445 770 356 2015 2016 2017 2018 Q4 2017 Q3 2018 Q4 2018 Net Profit* (USD mn) Net Profit Margin (%) 20.0% 20.7% 9.4% 13.0% 22.0% 16.0% 22.5% +12,6% 1.030 1.160 317 308 502 221 41

  18. Slide 18: EBITDA to Net Profit

    EBITDA Net Profit 1.720 (188) 1.591 154 59 (534) (51) 1.160 EBITDA Depreciation Interest Inc. Operating Finance Tax Inc./(Exp.) Non-Controlling Net Profit 12M 2018 from Overdue Income Inc./(Exp.) Interests 12M 2018 Sales- Rediscount Inc./(Exp.) Net 18

  19. Slide 19: EBITDA to Net Cash

    EBITDA Net Cash 1.720 (479) 33 66 (596) (244) 500 (23) (27) (661) 1 (210) EBITDA Changes Interest Interest Taxes Paid Net Cash Free Cash Contribution Credit Dividend Other Change 12M 2018 in Working Inc. from Inc./(Exp.) used in Flow to the Usage/ Paid in Cash Capital Overdue Net Investing Capital (

  20. Slide 20: EBITDA per Ton (USD/ton)

    EBITDA per Ton* (USD/ton) 223 219 197 174 179 172 138 141 143 120 105 96 85 119 51 43 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Main Product 20 *One-off income/expense items are excluded.

  21. Slide 21: Financial Figures

    Financial Figures Consolidated Net Assets (USD mn) 31.12.2017 31.12.2018 Growth (YoY) Cash and Cash Equivalents 1,865 1,646 -11.7% Working Capital 1,740 2,219 27.5% Tangible and Intangible Assets 3,549 3,533 -0.5% Financial Liabilities (1,191) (1,163) -2.4% Provisions and Other (865) (674) -22.1% Ne

  22. Slide 22: Financial Borrowings (USD mn)

    Financial Borrowings (USD mn) 693 1,283 891 368 654 829 897 947 529 581 655 460 362 266 14 (482) (190) (675) 2013 2014 2015 2016 2017 2018 Net Debt Short-Term Debt Long-Term Debt 22

  23. Slide 23: Net Debt (USD mn)

    Net Debt (USD mn) 500 (661) 675 (32) 482 Net Cash Free Cash Flow Dividend Paid Other Net Cash Dec. 2017 Dec. 2018 23

  24. Slide 24: Borrowings Maturity Profile (USD mn)

    Borrowings Maturity Profile (USD mn) 1,646 913 20 737 149 8 50 39 22 6 156 141 3 2 1 47 37 21 5 1 2018 Cash 2019 2020 2021 2022 2023 2024 Principal Revolving Trade Financing Loans Interest 24

  25. Slide 25: Cost of Sales Breakdown (%)

    Cost of Sales Breakdown* (%) 5 7 6 5 5 7 5 5 5 7 8 5 12 11 9 Raw Materials 14 Personnel Expenses Purchased Energy Expenses Depreciation and Amortization Exp. 70 73 76 64 Other 2015 2016 2017 2018 Raw Materials Breakdown (%) 27 24 20 22 13 12 12 13 Iron Ore&Pellet 27 27 35 35 Coal Scrap Other 33 36 3

  26. Slide 26: Capital Expenditures (USD mn)

    Capital Expenditures (USD mn) 1,017 634 961 576 264 242 200 201 208 216 158 171 162 162 162 159 113 132 143 107 82 110 165 140 56 59 57 93 83 55 80 88 52 43 84 17 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Capital Expenditures Fixed Assets Acquisition 26

  27. Slide 27: Number of Employees

    Number of Employees 12,801 12,872 12,659 12,277 11,975 11,607 2013 2014 2015 2016 2017 2018 27

  28. Slide 28: Erdemir Investor Relations

    Erdemir Investor Relations investorrelations@erdemir.com.tr https://www.erdemir.com.tr/investor-relations/ +90 216 578 80 61 28

Ereğli Demir ve Çelik Fabrikaları T.A.Ş. (Erdemir) — FY2018 Earnings Presentation on 6ix