Acerinox Sa · BME:ACX
Acerinox Sa — FY2016 Earnings Presentation
30 slides from Acerinox Sa's earnings presentation, Mar 1, 2017
Slide 1: 2016 Business Year Results
2016 BUSINESS YEAR RESULTS PRESENTACIÓN DE Madrid, 1 March 2017 RESULTADOS ACERINOX Ejercicio 2014 0
Slide 2: Disclaimer
DISCLAIMER This document may contain forward-looking information and statements about ACERINOX, S.A., its subsidiaries and/or its management. These forward-looking statements include financial projections and estimates and their underlying assumptions, and statements regarding the intent, belief or
Slide 3: 2016: Main Financial Figures
2016: MAIN FINANCIAL FIGURES Million EUR 2016 2015 Variation Net Sales 3,968 4,221 -6% EBITDA 329 286 15% EBIT 157 121 30% Results before Taxes and Minorities 128 77 66% Results after Taxes and Minorities 80 43 87% Net Financial Debt 620 711 -13% Net Financial Debt / EBITDA 1.88 2.48 -24% Net Financ
Slide 4: 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 Target: zero accidents 9.5 7.5 5.4 5.8 5.0 3.3 3.3 2010 2011 2012 2013 2014 2015 2016 • Accident rate = total no. injuries and illnesses * 200,000 / no. worked hours 3
Slide 5: Stainless Steel Worldwide Production
S TA I N L E S S S T E E L W O R L D W I D E P R O D U C T I O N Thousands Mt 48,000 Estimated world 42,000 production of Stainless Steel in 2016: 36,000 45.3 million Mt 30,000 Tasa de crecimiento anual (+8.9% over 2015) 24,000 Años 1950 a 2011e: +5,8% 18,000 Compound annual growth rate 12,000 1950
Slide 6: Stainless Steel Worldwide Production by Region
S TA I N L E S S S T E E L W O R L D W I D E P R O D U C T I O N Thousands Mt China grows again and represents 54% of world production in 2016 50,000 45,000 40,000 35,000 30,000 25,000 China 20,000 15,000 Rest of Asia 10,000 America 5,000 Europe + 0 Africa 2001 02 03 04 05 06 07 08 09 10 11 12 13 14
Slide 7: Ferrochrome Quarterly Average Prices
F E R R O C H R O M E Q U A R T E R LY A V E R A G E P R I C E S US¢ / Lb. Cr 160 140 120 100 80 60 40 20 0 2014 2015 2016 Q1 2017 Source: Metal Bulletin 6
Slide 8: Official Nickel Price in the L.M.E.
OFFICIAL NICKEL PRICE IN THE L.M.E. Average price: cash/three months (USD/Mt. Ni) 25,000 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 J J A S O N D 2014 2015 2016 7
Slide 9: Official Nickel Price and Stainless Steel Prices 2002-2016
OFFICIAL NICKEL PRICE IN THE L.M.E. A N D S TA I N L E S S S T E E L P R I C E S F R O M 2 0 0 2 T O 2 0 1 6 Average price: cash/three months (USD/Mt. Ni) 55,000 50,000 45,000 40,000 Floor in nickel price 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010
Slide 10: Sector Indicators
S E C T O R I N D I C AT O R S Vehicle Construction Household production appliances +5.5% -0.2% +1.1% Eurofer´s estimate for Eurofer´s estimate for Eurofer´s estimate for 2016 2016 2016 +1.3% +4.5% +3.3% Year to December Year to December Year to December Source: Wards Auto Source: US Census Bureau S
Slide 11: Estimated Growth of Apparent Consumption
E S T I M AT E D G R O W T H O F A P PA R E N T C O N S U M P T I O N % 2015 – 2014 % 2016 – 2015 Euro + Africa -4.5% +7.0% China America +2.8% +15.7% -1.9% +1.0% Asia without China +0.6% +8.1% Apparent consumption increases in all markets in 2016 Source: ISSF/CSSC 10
Slide 12: Stainless Steel Inventories
S TA I N L E S S S T E E L I N V E N T O R I E S Thousand Mt 100 70 A v e r a g e 7 4 , 7 9 7 M t Days of rotation 80 65 60 INVENTORIES 60 55 OF COLD- 40 ROLLED 50 20 45 Source: EHV 0 40 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 Germany 2014 2015 2016 Thousand Mt 600
Slide 13: Acerinox Production
ACERINOX PRODUCTION Thousands Mt Year 2016 Year 2015 Variation Q1 Q2 Q3 Q4 Accumulated Jan-Dec 2016 / 2015 Melt shop 575.1 652.0 637.3 611.0 2,475.4 2,319.6 6.7% Thousand Mt Hot Rolling 526.4 563.4 571.9 547.1 2,208.9 2,038.7 8.3% Cold Rolling 418.1 428.0 429.0 440.8 1,715.9 1,609.0 6.6% Long Produc
Slide 14: Quarterly Profit & Loss Account of the Consolidated Group
Q U A R T E R LY P R O F I T & L O S S A C C O U N T O F T H E C O N S O L I D AT E D G R O U P Million EUR January-December Q1 2016 Q2 2016 Q3 2016 Q4 2016 2016 2015 Variation Net sales 953.35 953.67 1,007.62 1,053.50 3,968.14 4,221.43 -6.0% Gross operating result / 40.99 78.75 103.30 106.04 329.07
Slide 15: Geographical Distribution of Acerinox's Sales
GEOGRAPHICAL DISTRIBUTION OF ACERINOX'S SALES Year 2016 Europe 36.8% Oceania 0.3% Africa 4.9% Asia 12.0% America 46.0% Spanish multinational Sales in more than 80 countries Spain accounts for 10% of sales 14
Slide 16: Main Figures of the P&L Account
MAIN FIGURES OF THE P&L ACCOUNT Million EUR Operating expenses Personnel expenses -0.1% +1.8% 578 577 368 375 Jan-Dec 2015 Jan-Dec 2016 Jan-Dec 2015 Jan-Dec 2016 Depreciation & Amortization Net financial expenses +3.7% 164 170 -32.8% 44 30 Jan-Dec 2015 Jan-Dec 2016 Jan-Dec 2015 Jan-Dec 2016 15
Slide 17: Quarterly Evolution of the EBITDA
Q U A R T E R LY E V O L U T I O N O F T H E E B I T D A O F T H E C O N S O L I D AT E D G R O U P Million EUR (% over sales) 120.00 103 103 106 101 12.0% 100.00 10.0% 79 10.3% 10.1% 80.00 9.0% 8.6% 8.0% 8.3% 60.00 6.0% 41 41 41 40.00 4.0% 4.1% 4.5% 4.3% 20.00 2.0% 0.00 0.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 18: Condensed Balance Sheet of the Consolidated Group
CONDENSED BALANCE SHEET O F T H E C O N S O L I D AT E D G R O U P Million EUR Net Financial Debt: 620 million EUR Debt / EBITDA: 1.88x Gearing: 29% ASSETS LIABILITIES 2016 2015 Variation 2016 2015 Variation Non-current assets 2,357.53 2,317.53 1.7% Equity 2,168.68 2,023.30 7.2% Current assets 2,097
Slide 19: Condensed Cash-Flow Statement
C O N D E N S E D C A S H - F L O W S TAT E M E N T O F A C E R I N O X C O N S O L I D AT E D G R O U P Jan - Dec Jan - Dec MillIon EUR 2016 2015 Result before taxes 127.9 76.9 Adjustments for: 215.1 210.2 Optimization of Depreciation and amortisation 169.8 163.7 Changes in provisions and impairmen
Slide 20: Cash Generation
C A S H G E N E R AT I O N Million EUR Generating cash to invest, reward shareholders and reduce debt Period 2008-2016: Cash generation 2,762 CAPEX 1,587 Return to shareholders 872 Net debt reduction 303 19
Slide 21: Stock Market Evolution of Acerinox and IBEX 35
STOCK MARKET EVOLUTION OF ACERINOX, S.A. & IBEX 35 Daily percentage data, year 2016 50% 40% +33.9% 30% Acerinox 20% Ibex 35 10% 0% -2.0% -10% -20% -30% 20
Slide 22: Return to Shareholders
RETURN TO SHAREHOLDERS EUR/share (*) Scrip dividend Issue premium Dividend 0.45 0.449 0.433 0.449 0.440 0.10 00 ,. 44 34 39 00 ,. 44 44 99 0,449 0.443 0.440 00 ,. 33 55 0,35 2012 2013 (*) 2014 (*) 2015 (*) 2016 (*) New shares 57% 51% 59% 77% 21
Slide 23: Strategic Plan
S T R AT E G I C P L A N 2 0 1 6 - 2 0 2 0 Belief on a leader product Operative Excellence Operative Maximum capacity Excellence utilization Global S T R AT E G I C Presence PLAN Quick-return investments Financial Strength Financial Strength Cash flow generator Sustainability 22
Slide 24: Excellence Plan
EXCELLENCE PLAN TARGET ACHIEVED Excellence Plan I 73% 97 Million EUR Excellence Plan II 59% 52 Million EUR Excellence Plan III 88% 53 Million EUR Excellence Plan IV 74% 50 Million EUR EXCELLENCE PLAN IV 2015-2016 % TARGET ACHIEVED: 106% 77% 95% 96% 69% 64% 44% 43% PRIMER SEGUNDO TERCER CUARTO Q1 TRI
Slide 25: Consolidated Group Investments
C O N S O L I D AT E D G R O U P I N V E S T M E N T S Million EUR 173 173 94 2015 2016 2017 approved Investments in NAS and Acerinox Europa 24
Slide 26: Consolidated Group Investments: NAS
C O N S O L I D AT E D G R O U P I N V E S T M E N T S : NAS Bright Anneal and ZM lines investments • 11 6 m i l l i o n e u r o s • First coils ZM line: January 2017 • BA start up: second quarter 2017 Bright Anneal line construction Sendzimir (ZM) from NAS 25
Slide 27: Consolidated Group Investments: Acerinox Europa
C O N S O L I D AT E D G R O U P I N V E S T M E N T S : A C E R I N O X E U R O PA AP and ZM lines investment AP5 construction • 140 million euros • Start up: ending of 2017 • Payback: <5 years • Goals: • higher value-added products • increase sales to direct client • improve capacity utilization c
Slide 28: Outlook 2017
OUTLOOK 2017 OPPORTUNITIES UNCERTAINTY Economic growth o Inventories in China increase in consumption o Overcapacity in China Reduction of global overcapacity o Vo l a t i l i t y o f t h e r a w m a t e r i a l Base price increases in US and EU o Political risks Efficiency improvements St
Slide 29: Questions and Answers
QUESTIONS AND ANSWERS Restoration of the Gaudí Palace in Astorga Interior architecture with stainless steel Tanks Water Treatments Pressfitting system 28
Slide 30: Thank You
THANK YOU 29