Nlmk · RUS:NLMK
Nlmk — Credit Suisse Global Steel and Mining Conference 2011
18 slides from Nlmk's conference presentation, Sep 22, 2011
Slide 1: Corporate Presentation – Credit Suisse Global Steel and Mining Conference 2011
NLMK CORPORATE PRESENTATION CREDIT SUISSE GLOBAL STEEL AND MINING CONFERENCE 2011 ANTON BAZULEV DIRECTOR, EXTERNAL RELATIONS London, 21 – 22 September 2011
Slide 2: Disclaimer
Disclaimer This document is confidential and has been prepared by NLMK (the “Company”) solely for use at the investor presentation of the Company and may not be reproduced, retransmitted or further distributed to any other person or published, in whole or in part, for any other purpose. This documen
Slide 3: Agenda
1. Company overview 2. Sustainable growth strategy 3. Market trends and outlook 3
Slide 4: Balanced and favorably located assets
Balanced and favorably located assets Russian production platform enhanced with international assets Usinsky-3 Coking coal deposit Kaluga mini-mill Novolipetsk (under const’n) Steel: 12.4 m tpa NLMK USA Strip Projected capacity Flats: 5.5 m tpa Zhernovskoye 1 mini-mill & 2 rolling mills Steel: 1.5 m
Slide 5: Business profile
Business profile Superior profitability through the cycle EBITDA PER TONNE, NLMK VS RUSSIAN PEERS 500 $/t 400 375 302 300 268 269 243 234 180 208 183 168 172 200 117 166 148 70 84 102 100 35 Source: Companies' reports, NLMK estimates 0 2001 2002 2003 2004 2005 2006 2007 2008 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 6: Lowest production costs
Lowest production costs Supported by efficient vertical integration AVERAGE STEEL CASH COSTS, APR’11 vs. AUG ‘11 $/t 900 Aug‐11 Apr‐11 800 NLMK cost position 700 600 500 400 300 Cumulative capacity, million t 200 100 300 500 IRON ORE: 100% with over 100 years mine life COKE: over 100% with modern fa
Slide 7: Diversified sales and product mix
Diversified sales and product mix Timely response to improved market environment DIVERSIFIED SALES AND PRODUCTS STRUCTURE* 40% 36% 35% 32% 30% 25% Value added 20% flat steel 15% 10% 10% 10% 8% Diversified 4% 5% long steel 0% Russia EU Middle East North Asia and Other America Pacific regions Wide pro
Slide 8: Financial highlights
Financial highlights Exceptional performance and confident outlook REVENUE AND EBITDA (QUARTERLY) 3500 $ million 2,982 3000 2500 2,266 2,359 2,156 2,232 2000 1,697 1500 1000 774 837 695 585 386 493 500 0 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 EBITDA Revenue Robust results in 2010 Sustainabl
Slide 9: Sustainable growth strategy
1. Company overview 2. Sustainable growth strategy 3. Market trends and outlook 9
Slide 10: Investments
Investments … Russian steelmaking is NLMK's growth engine CRUDE STEEL CAPACITY GROWTH: +40% mtpa BF: 3.4 mtpa EAF: 1.5 mtpa from mid 2011 from mid 2012 16 1.5 3.4 3.4 12 8 15.7 17 12.3 12.3 12.3 4 0 2010 2011 2012 Existing BF#7 EAF (Kaluga) Low cost production growth program in Russia backed by vert
Slide 11: Improved product mix
Improved product mix Value added products growth, better sector exposure 2011E SALES BY PRODUCT 100% % 30% Value added 80% 39% 10% Longs 60% 10% 19% 40% 26% Ordinary 20% 41% 25% Semis 0% Standalone Consolidated NLMK EUROPE AND NLMK USA (ex SIF) consolidation materially improves NLMK product portfoli
Slide 12: Upstream development: Iron ore
Upstream development: Iron ore IRON ORE CONCENTRATE AND PELLETS CAPACITY 20 mt 100% self‐sufficiency 10 mt 100% self‐sufficiency 18 8 15 14 12 6 4 10 6 2 5 0 ‐2 2010 2014 0 ‐2.5 ‐4 2010 mid‐2011 2014 (E) Iron ore concentrate Pellets 30% Expansion of open pit iron ore mine Growth in iron ore concentr
Slide 13: Upstream development: Coal
Upstream development: Coal Usinsky Zhernovskoye 2.7 m tpa coal concentrate 3.6 m tpa coal concentrate (2017-18E) (2014-15) >500 km 1,800 km Novolipetsk Altai-Koks 13
Slide 14: Uses of cash
Uses of cash Dividend payout close to the target of 30% Dividend payout 800 60% Last 7 years interrupted payout over 20% aiming 30% 50% 600 40% 7-years average dividend yield of 5% 400 30% 20% 200 10% 0 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 Dividend Dividend payout (H1) CAPEX SPENDING* Mos
Slide 15: Market trends and outlook
1. Company overview 2. Sustainable growth strategy 3. Market trends and outlook 15
Slide 16: NLMK and market trends
NLMK and market trends Costs became the main factor of steel price while demand weakened HRC PRICE DYNAMICS VS METALLIC CHARGE* 1000 $/t 900 Difference between price 12% difference b/n 800 and input material costs metallic costs 700 and prices 600 26% >60% difference b/n difference b/n 500 metallic
Slide 17: Outlook
Outlook Short-term outlook o Steel production is expected to be ~2.9 m in Q3 2011 o Revenue growth at 10‐15% q‐o‐q o Q3 2011 EBITDA margin at 20‐25% FY2011 outlook o Steel production at about 12.5 m t o Growth in finished products sales after consolidation of the rolling assets in EU and USA o Russi
Slide 18: NLMK Investor Relations
NLMK Investor Relations 18, bldg 1 Bakhrushina str. 115054, Moscow Russia t. +7 495 915 15 75 f. +7 495 915 79 04 email: ir@nlmk.com www.nlmk.com
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