Cognor Holding Sa · GPW:COG
Cognor Holding Sa — Q3 2023 Earnings Presentation
37 slides from Cognor Holding Sa's earnings presentation, Nov 16, 2023
Slide 1: Q3 2023 Business and Financial Performance
Introduction Group Overview Market Financials Q3 2023 Business and Financial Performance Capex Outlook November 16, 2023 Annexes 1
Slide 2: Speaker
Introduction Speaker Group Overview Market Financials Capex Outlook KRZYSZTOF ZOŁA Annexes 2
Slide 3: Key Macro Trends
Key Macro Trends Introduction Group Overview Market Increased geopolitical risk De-globalisation Protectionism military spending onshoring, reshorig, reindustrialisation of the EU Financials Long-term underinvestment in energy sector Capex Supply chain shortening the end of commodity abundance and C
Slide 4: Cognor – Modern EU Steelmaker
Cognor – Modern EU Steelmaker Introduction Group Overview Market 30 years Exposure on mid European market: Track record of resilience: of industry experience PL, DE, CZ, SK, HU, RO, LT, LV, crisis in the Polish steel industry ES in the 90s; hostile EU policy and Financials VAT evasion practices in P
Slide 5: Cognor – Modern EU Steelmaker
Cognor – Modern EU Steelmaker Introduction Group Overview Strong presence on Low debt Rational and Polish scrap market very strong balance sheet Market consequent CAPEX vertical integration stabilising structure aimed at volume expansion raw material supplies and cost saving including of Financials
Slide 6: Q3 2023 Highlights
Q3 2023 Highlights Introduction Group Overview Weak GPD growth Falling billet and Spreads shrinking for Market 0.4% Poland and 0.1% EU YoY finished product prices almost all billets and compared to both Q3 2022 products and Q2 2023 compared to both Q3 2022 Financials and Q2 2023 Capex Rebar market i
Slide 7: Group Overview - Group Structure & Shareholders
Group Overview - Group Structure & Shareholders Introduction Group 22,97% Overview Free float 100% Market JAP + SPEDEX 100% 100% 77,03% Przemysław Cognor Holding S. A. PS Holdco Sp. Z o. o. Sztuczkowski WSE quoted Financials 4 workers Sp. Z o. o. 94,40% 51% Capex Cognor Holding SK Cognor S. A. – mai
Slide 8: History [1]
History [1] Introduction Group Overview 1990 2000 2004 Przemysław Acquisition Acquisition of 82,6% of Sztuczkowski of ZW-WB, Ferrostal, a melting starts up Złomrex which a rolling mill shop in Gliwice Market trades in non-ferrous scrap in Zawiercie metals 2005 Acquisition of 100% of HSJ, Financials
Slide 9: History [2]
History [2] Introduction Group Overview 2007 2013 2022 Centrostal changes its Acquisition of 95% JAP acquisition name into Cognor, of Profil, a rolling Market integration of mill in Kraków distribution assets Financials Capex Outlook Złomrex acquires 64,4% of shares Cognor sells all distribution ass
Slide 10: Structure
Structure Introduction Group Stalowa Wola Gliwice Overview Market Financials Capex Stalowa Wola Stalowa Wola Siemianowice Śląskie (LSM) Zawiercie (ZW-WB) Kraków (Profil) Outlook Annexes 10
Slide 11: Vertically Integrated Business Model
Vertically Integrated Business Model Introduction EXTERNAL CLIENTS Group KATOWICE (PL) Overview Production of bras bars and zinc alloys (finished EXTERNAL CLIENTS products) Non- Market ferrous scrap metal POLAND ZAWIERCIE / suppliers Sourcing + processing SIEMIANOWICE (PL) of ferrous and non-ferrous
Slide 12: 2022 Circular Economy & Sustainable Steelmaking
2022 Circular Economy Introduction & Sustainable Steelmaking Group Overview 802 115 673 579 598 817 468 502 tonnes of scrap tonnes of scrap metal tonnes of semi- tonnes of billets Market metal sourced used internally finished products processed internally (billets) production Financials SCRAP BILLET
Slide 13: Company Facilities
Company Facilities Introduction Olsztyn Group Overview Headquater Market Gorzów Wielkopolski Scrap metal sites Poznań Grodzisk Mazowiecki Financials Łódź Production facilities Capex Tomaszów Mazowiecki Radom Lublin Non-ferrous foundry Wrocław Świdnica Outlook Gliwice PORAJ Kielce Opole Zawiercie Ele
Slide 14: Steel Production Facilities
PORAJ ZAWIERCIE Introduction Steel Production Facilities GLIWICE SIEMIANOWICE ŚLĄSKIE STALOWA WOLA Melting shops & rolling mills KRAKÓW NOWA HUTA Group Overview Location Product portfolio Production capacities Technology Employment HSJ Stalowa Wola Billets, Bars, Plates • Billets: 300k tonnes • 1 EA
Slide 15: Segments Performance
Segments Performance Introduction Quantities per business segments Group Overview Scrap metal (thousand tonnes) Billets (thousand tonnes) 192 172 156 152 158153 149 Market 137 127 136 122 112112 108 86 87 80 75 73 63 60 33 43 33 35 30 28 29 24 24 Financials Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q3
Slide 16: World and the EU
World and the EU Introduction World's steel output (m tonnes) Poland's steel output (m tonnes) 600,0 2,50 Group Overview 500,0 2,00 1,81 1,80 Market 400,0 1,42 1,47 1,52 1,50 Financials 300,0 1,00 Capex 200,0 0,50 Outlook 100,0 0,0 0,00 Annexes Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q3 2022 Q4 2022
Slide 17: Billets and Finished Products Cognor's Share and Position in 2022
Billets and Finished Products Introduction Cognor’s Share and Position in 2022 Group Overview Producer market share Revenue split by business segments Agriculture Defence (thousands of tonnes) 4% 4% Railway Market 5% Other Construction 5% 30% 305 Iron and steel Financials 7% Mining 8% Machine Automo
Slide 18: Market - EAF vs BOF technology
Market - EAF vs BOF technology Introduction Electric Arc Furnace (EAF) Basic Oxygen Furnace (BOF) Group Overview Feedstock 24,9% Iron ore (1,600 kg) applied to Market Scrap metal (1,150 kg) 8,7% produce 100,0% Coking coal (600 kg) 1000 kg of 66,4% crude steel Scrap metal (210 kg) Financials • Approx
Slide 19: BOF / EAF Feedstock Cost (USD / tonne)
BOF / EAF Feedstock Cost (USD / tonne) Introduction Feedstock costs EAF vs BOF 500 Group Overview 400 300 Difference 200 Market BOF 100 EAF 27 0 Financials -21 -9 -100 -50 -51 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Capex Raw material costs (USD / tonne) Feedstock Cost Model BOF EAF 500 tonne / tonn
Slide 20: EU market protection tools
EU market protection tools Introduction Group Anti Dumping Carbon Tax Overview Since 2016 the EU has been determined on market protection. Aimed at preventing carbon leakage. It started in 01.10.2023 and The anti dumping measures are numerous and financially will be fully effective from 01.01.2026.
Slide 21: Prices and conversion spreads (PLN / tonne)
Prices and conversion spreads (PLN / tonne) Introduction Group Ferrostal HSJ Overview 6 000 6 000 5 500 5 500 Market 5 000 5 000 4 500 4 500 4 000 4 000 Financials 3 500 3 500 3 000 3 000 2 500 2 500 Capex 2 000 2 000 1 500 1 500 1 000 1 000 Outlook 500 500 0 0 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 202
Slide 22: EBIT by segments (PLN thousand)
EBIT by segments (PLN thousand) Introduction Group Overview Market 41 474 Financials Capex Outlook Annexes 22
Slide 23: EBIT Bridge (PLN thousand)
EBIT Bridge (PLN thousand) Introduction Group Overview Market Financials Capex Outlook Annexes 23
Slide 24: Q3 2023 P&L Waterfall (PLN thousand)
Q3 2023 P&L Waterfall (PLN thousand) Introduction Group Overview Market Financials Capex Outlook Revenue Cost of Gross Other Distribution Administr Other Other EBIT Financial Financial Net Share of Excess Profit Income Profit for sales profit income expenses ative gains expenses income expenses fina
Slide 25: Balance Sheet
Balance Sheet Introduction Group Cash and cash equivalents Overview Trade receivables Market Assets Inventories Financials Property, plant and equipment Capex EQUITY Liabilities Outlook Trade payables Current loans and borrowings Non-current loans and borrowings Annexes Q3 2022 Q4 2022 Q1 2023 Q2 20
Slide 26: Balance Sheet (PLN million)
Balance Sheet (PLN million) Introduction Group Overview Working Capital Market 679 Financials 517 549 545 589 556 507 437 444 502 Capex -404 -431 -403 -395 -551 Outlook Annexes Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 inventories receivables trade liabilities working capital 26
Slide 27: Cash Flows (PLN thousand)
Cash Flows Operational CAPEX Financial Cash balance Increase Decrease Introduction (PLN thousand) Group Overview Market Financials Capex Outlook Annexes Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 27
Slide 28: Net Debt (PLN thousand) & Leverage
Net Debt (PLN thousand) & Leverage Introduction Debt ratios 450 000 1,2 Group 406 750 Overview 400 000 1,0 350 000 323 400 Market 300 000 0,8 250 000 Financials 0,6 200 000 150 000 0,4 Capex 113 163 100 000 86 183 62 262 0,2 50 000 Outlook 0 0,0 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 net debt net d
Slide 29: Cognor in new scale (thousand tonnes)
Cognor in new scale (thousand tonnes) Introduction Production of billets Production of bars Group semi-finished products finished products Overview Market +252 ZAWIERCIE Q4 2024 / SIEMIANOWICE ŚL. merchant bars 198 68 New capacities Financials +155 +160 Q4 2023 KRAKÓW Existing Capacities 304 375 240
Slide 30: Capex- Costs, Financing and Effects
Capex- Costs, Financing and Effects Introduction Group Gliwice Kraków Siemianowice Śląskie Overview replacement of EAF and ancillary items entire mill modernisation plus spooling most modern LSM mill in Europe (Completed) line (Q4 2023; Q4 2024 for spooling line) (Q4 2024) Market Cost – approximatel
Slide 31: Outlook – Q4 2023
Outlook – Q4 2023 Introduction Group Overview Macro trends Prices of Spreads (slide 3) unchanged scrap, billets and finished stable QoQ Market products expected to stabilize QoQ Financials Capex Rebar Rising capacity EBITDA market in crisis. Little chance utilisation headline similar to adjusted for
Slide 32: Dividends and Share Quoting
32 Group Capex Market Outlook Overview Annexes Financials Introduction 0 0,5 1 1,5 2 2018 2020 Share price (PLN) Equity LTM net profit P/E P / BV Number of shares Dividend policy 0,1 2021 0,28 0,15 0,15 1,23 Q3 2023 30.09.2023 Dividends 2022 0,98 3,36 7,09 360 924 1 243 398 25% of consolidated net p
Slide 33: P&L (PLN thousands)
P&L (PLN thousands) Introduction Revenues down by 250m & 33% STATEMENT OF PROFIT OR LOSS Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 - shipments down by 39% '000 PLN - lower prices Sales revenue 749 424 923 175 887 447 764 601 499 497 - energy & CO2 sales: 70m Group Cost of sales -525 130 -752 424 -783
Slide 34: Assets (PLN thousand)
Assets (PLN thousand) Introduction ASSETS Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 '000 PLN A. TOTAL NON-CURRENT ASSETS 685 776 740 355 837 426 876 842 1 020 901 Fixed assets up by 335m & 49% Group I. Intangible assets 14 558 12 851 20 427 19 448 19 094 - CAPEX: 406m (inc. PLN 39m of JAP) Overview II
Slide 35: Equity and Liabilites (PLN thousand)
Equity and Liabilites (PLN thousand) Introduction EQUITY AND LIABILITIES Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 '000 PLN A. EQUITY 1 094 938 1 228 431 1 405 164 1 211 444 1 243 398 Equity up by PLN 148m & 14% Group I. Issued share capital 257 131 257 131 257 131 257 131 257 131 - LTM net result 361
Slide 36: Cash Flows (PLN thousand) & Metrics
Cash Flows (PLN thousand) & Metrics Introduction CASH FLOW Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 '000 PLN A. OPERATING ACTIVITIES 122 453 162 849 34 085 56 285 31 692 - working capital outflow: 36m Group B. INVESTING ACTIVITIES -30 569 -109 374 -33 984 -83 865 -78 204 - CAPEX outflow 78m Overview
Slide 37: Cognor Holding S.A.
Introduction Group Overview Market Financials Cognor Holding S.A. ul. Zielona 26 Capex 42 - 360 Poraj Outlook tel. +48 34 316 01 10 fax +48 34 316 01 12 Annexes www.cognor.eu 37