27 slides from Eregli Demir Ve Celik Fabrikalari T.a.s's earnings presentation, Mar 14, 2011
Slide 1: Erdemir Group 2010 Consolidated Financial Results
Erdemir Group 2010 Consolidated Financial Results 14 March 2011
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 Results 3 / 26
Slide 4: Global crude steel production and steel prices
-50% -40% -30% -20% -10% 10% 20% 30% 40% 50% 60% 0% -50% -25% 25% 50% 75% 0% Jan-04 Jan-04 May-04 May-04 Sep-04 Sep-04 SOURCE: * WSA Jan-05 Jan-05 May-05 May-05 ** BLOOMBERG 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 May-08 May-08
Slide 5: Raw material prices are increasing
100 200 300 400 500 600 700 800 0 0 200 400 600 800 1.000 1.200 1.400 08.2007 USD/TON 08.2007 USD/TON 11.2007 11.2007 02.2008 02.2008 SOURCE: BLOOMBERG 05.2008 05.2008 08.2008 08.2008 EREĞLĠ HRC 11.2008 11.2008 EFFECTIVE PRICE 02.2009 02.2009 05.2009 05.2009 08.2009 08.2009 CIS SLAB 11.2009 11.2009
Slide 6: Turkish steel consumption increased by 31% in 2010 YoY
Turkish steel consumption increased by 31% in 2010 YoY PRODUCTION ( 000 TONS ) 26.067 26.684 26.295 25.133 23.359 4.257 4.543 4.421 6.629 4.122 21.810 22.141 20.712 19.237 19.666 2006 2007 2008 2009 2010 Long Flat Total CONSUMPTION ( 000 TONS ) 23.771 23.578 21.222 21.454 18.048 11.661 11.944 10.686
Slide 7: Turkish Steel Market (cont'd)
Turkish Steel Market ( cont’d ) IRON AND STEEL PRODUCT EXPORTS ( 000 TONS ) 16.806 15.861 94 14.486 13.795 218 1.368 12.668 1.651 212 35 2.407 0,1 1.244 2.206 1.519 1.394 1.625 1.630 3.523 12.937 11.786 9.645 10.890 9.232 2006 2007 2008 2009 2010 Long Steel Billet, Bloom Flat Steel Slab Total IRON A
Slide 8: Automotive production and sales increased by 26% and 28% in 2010 YoY
Automotive production and sales increased by 26% and 28% respectively in 2010 YoY AUTOMOTIVE PRODUCTION (000 UNITS) AUTOMOTIVE SALES (000 UNITS) 1.548 26% 1.205 28% 754 629 1.095 870 793 576 2009 2010 2009 2010 Domestic Sales Export AUTOMOTIVE CAPACITY UTILIZATION RATIO (%) 74 59 2009 2010 Light Veh
Slide 9: White goods exports and production increased by 9% and 12% in 2010 YoY
White goods exports and production increased by 9% and 12% respectively in 2010 YoY WHITE GOODS DOMESTIC SALES WHITE GOODS EXPORTS (000 UNITS) (000 UNITS) 9% 8% 5.425 13.731 5.011 12.594 2009 2010 2009 2010 WHITE GOODS PRODUCTION (000 UNITS) 12% 18.397 16.436 2009 2010 SOURCE: WHITE GOODS SUPPLIERS
Slide 10: After the contraction in 2009, all markets expanded in 2010
After the contraction in 2009, all markets expanded in 2010 CHANGES IN SECTOR DEVELOPMENT INDEX (%-YoY) 30,0% 25,0% 23,4% 19,6% 15,0% 20,0% 10,5% 11,0% 9,5% 18,0% 10,0% 9,0% 8,3% 6,0% 11,7% 8,5% 5,7% 9,0% -3,9% -0,7% 7,9% 0,0% 3,1% -6,2% -10,0% -8,1% -16,5% -16,3% -20,0% -24,0% -30,0% 2007 2008 2009
Slide 11: Sales prices are going up in 2011 YoY
Sales prices are going up in 2011 YoY Çin 2.Kalite Kok Kömürü Spot Ġhraç Fiyatı ( USD/TON ) HRC PRICES ( USD/Ton ) 1.300 1.200 As of February 2011, CIS HRC 1.100 export price is 790 USD, China HRC 1.000 900 spot price is 729 USD, USA export 800 HRC price is 665 USD. The prices 700 were 635 USD, 694
Slide 12: Agenda
Agenda 2010 Market Overview 2010 Results 12 / 26
Slide 13: Erdemir Group Key Figures
ERDEMĠR GROUP KEY FIGURES All figures are on IFRS consolidated basis unless stated otherwise. (1) Total slab production of Ereğli and Ġskenderun Plants. (2) Total flat steel production of Ereğli and Ġskenderun Plants. 13 / 26
Slide 14: Liquid steel production increased by 10% in 2010 YoY
Liquid steel production increased by 10% in 2010 YoY LIQUID STEEL PRODUCTION ( 000 TONS ) 7.311 6.619 6.122 5.486 1.895 1.831 1.884 1.906 1.590 1.495 1.701 1.628 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2008 2007 1Q 2Q 3Q 4Q 14 / 26
Slide 15: Production was 6,8 million tons in 2010
Production was 6,8 million tons in 2010 PRODUCTION VOLUMES ( 000 TONS ) 6.793 6.681 6.132 1.420 5.858 1.869 Long Long 1.950 1.652 1.502 Long Long Cold 1.590 Cold 1.486 1.632 Cold Cold 1.795 1.736 1.638 1.651 1.842 1.713 1.581 1.518 353 3.871 473 562 354 326 451 3.222 530 240 443 2.696 2.574 335 299
Slide 16: HRC sales volume increased in 2010 4Q YoY
HRC sales volume increased in 2010 4Q YoY SALES VOLUME ( 000 TONS ) 6.986 6.516 5.895 5.947 1.858 1.393 Long Long 1.652 1.963 Long 1.456 1.665 Long Cold Cold 1.688 1.471 Cold Cold 1.685 1.725 1.842 1.923 1.833 1.503 1.405 1.589 371 3.667 3.464 451 559 508 473 276 318 457 2.607 436 295 451 2.461 321
Slide 17: Domestic sales revenue increased by 42% in 2010 YoY
Domestic sales revenue increased by 42% in 2010 YoY NET SALES REVENUE ( MILLION TL ) 6.633 6.800 890 1.218 Exp. Exp. 5.266 5.357 763 1.217 Exp. Exp. 5.743 5.583 1.921 4.594 1.582 1.621 1.509 1.658 4.049 1.303 325 162 1.066 176 1.239 211 227 218 365 424 1.596 1.420 1.445 1.282 1.448 875 1.085 642 Dom
Slide 18: Domestic sales increased in 2010
Domestic sales increased in 2010 2010 FLAT STEEL DOMESTIC SALES BREAKDOWN ( %) 2009 FLAT STEEL DOMESTIC SALES BREAKDOWN ( %) 2% 2% 6% 6% 2% 1% 4% 5% 6% 4% 4% 5% 40% 86% 8% 74% 49% 10% 8% 14% 11% 13% Pipe and Profile Industry Steel Service Centers Pipe and Profile Industry Steel Service Centers Secon
Slide 19: Flat steel sales to EU countries increased in 2010
Flat steel sales to EU countries increased in 2010 2010 FLAT STEEL EXPORTS BREAKDOWN ( %) 2009 FLAT STEEL EXPORTS BREAKDOWN ( %) 1% 8% 1% 2% 10% 2% 2% 2% 5% 3% 5% 6% 14% 8% 26% 58% 75% 12% EU Brazil Israel India EU India Tunisia Egypt Brazil Egypt Syria Other Vietnam USA China Other 2010 LONG STEEL
Slide 20: Flat and long steel sales prices and cost of sales
Jan-08 Jan-08 Feb-08 USD/TON USD/TON Feb-08 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 Erdemir Group Flat Sales Price Jun-09 Jun-09 2
Slide 21: EBITDA increased by 272% in 2010 YoY
EBITDA increased by 272% in 2010 YoY 1.600 EBITDA ( MILLION TL ) 48,0% 1.420 1.400 40,0% 1.200 1.097 32,0% 1.000 28,5% 775 24,0% 800 18,3% 17,9% 21,4% 20,5% 600 19,9% 19,2% 12,9% 461 16,0% 400 290 369 382 11,4% 300 297 8,0% 137 7,3% 200 -51 -1 0,0% 0 -4,1% -0,7% -200 -8,0% 2010 2009 2010 2009 2010 2
Slide 22: 1,9 billion USD liquid funds at the end of 2010
1,9 billion USD liquid funds at the end of 2010 BORROWINGS ( MILLION USD ) BORROWINGS MATURITY PROFILE 3.785 ( MILLION USD ) 1.800 ST Portion of LT Debt 1.600 132 Short-Term Debt 2.998 1.368 Long-Term Debt 2.767 1.400 Liquid Funds 600 537 1.200 2.140 20 608 1.000 347 907 1.468 264 1.861 800 1.432 72
Slide 23: Raw materials made up 67% of the cost of goods sold in 2010
Raw materials made up 67% of the cost of goods sold in 2010 COST OF PRODUCTION BREAKDOWN* - % 4% 1% 1% 6% 4% 5% 6% 7% 6% 6% 6% 8% 13% 12% 13% 67% 66% 71% 2010 2009 2008 Raw Materials Personnel Expenses Energy Consumables Depreciation Other RAW MATERIALS BREAKDOWN- % 9% 9% 8% 10% 8% 12% 2% 10% 21% 42
Slide 24: Flat cost per ton excluding raw materials was 191 USD/ton in 2010
Flat cost per ton excluding raw materials was realised as 191 USD/ton in 2010 FLAT PRODUCTS ( USD/TON )* 207 156 154 151 136 138 135 131 101 109 85 94 90 78 86 89 99 90 85 95 88 83 74 82 70 66 72 73 75 63 59 4.871 61 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2007 2008 2009 2010 Fixed Cost Per
Slide 25: Capital expenditures of 246 million USD is planned for 2011
Capital expenditures of 246 million USD is planned for 2011 ( M USD ) 940 116 693 672 561 130 36 361 824 331 543 246 525 146 152 115 245 332 15 33 131 119 130 87 2002 - 2005 2006 2007 2008 2009 2010 2011 2012 - After Ġskenderun Investments Ereğli Investments 25 / 26
Slide 26: Number of employees was 13.553 in 2010
Number of employees was 13.553 in 2010 NUMBER OF EMPLOYEES 15.063 14.598 14.637 14.056 13.553 13.161 2005 2006 2007 2008 2009 2010 26 / 26
Slide 27: Q&A
Q&A