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) — H1 2016 Earnings Presentation

37 slides from Eregli Demir Ve Celik Fabrikalari T.a.s's earnings presentation, Aug 10, 2016

  1. Slide 1: Erdemir Group

    © ErdemirGroup

  2. Slide 2: 2016 6 Months Consolidated Results

    2016 6 Months Consolidated Results 10 August 2016 2 10.08.2016

  3. Slide 3: Disclaimer

    DISCLAMIER 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: 2016 Market Overview, 2016 6M Results, 2016 Guidance

    ˃ 2016 Market Overview ˃ 2016 6M Results ˃ 2016 Guidance 4 10.08.2016

  5. Slide 5: Crude steel production and HRC prices by region

    -10% 10% 15% -12% -10% -5% 0% 5% -8% -6% -4% -2% 0% 2% 4% 6% 5 Jun-13 Jun-13 Aug-13 Aug-13 Oct-13 Oct-13 Dec-13 Dec-13 10.08.2016 Feb-14 Feb-14 Apr-14 Apr-14 Jun-14 Jun-14 Aug-14 Aug-14 Oct-14 Oct-14 Dec-14 Dec-14 Feb-15 Feb-15 Source : * Worldsteel ** Bloomberg Apr-15 Apr-15 Jun-15 Jun-15 Aug-15 Au

  6. Slide 6: Coking coal, iron ore and scrap prices

    Iron ore price was 60 USD/ton as of July 2016 COKING COAL PRICES IRON ORE PRICES USD/TON (HCC PEAK DOWNS REGION FOB AUSTRALIA) (IODEX 62% FE CFR NORTH CHINA MID) USD/TON 120 100 110 90 100 80 70 90 60 80 50 70 40 60 30 07.2014 09.2014 11.2014 01.2015 03.2015 05.2015 07.2015 09.2015 11.2015 01.2016 0

  7. Slide 7: HRC prices are stabilizing

    HRC prices are stabilizing HRC PRICES ( USD/Ton ) 700 600 500 400 300 200 Nov-13 Nov-14 Nov-15 Mar-14 Mar-15 Mar-16 May-14 Sep-14 May-15 May-16 Jul-13 Sep-13 Jul-14 Jul-15 Sep-15 Jul-16 Jan-14 Jan-15 Jan-16 CIS EXPORT HRC BLACKSEA/BALTIC EU HRC CHINA EXPORT HRC USA IMPORT HR As of July 2016, EU HRC

  8. Slide 8: Billet sales prices are increasing again

    Billet sales prices are increasing again BILLET PRICES ( USD/Ton ) 600 500 400 300 200 Mar-14 Mar-15 Mar-16 Nov-13 Nov-14 Nov-15 Jan-14 Jan-15 Jan-16 Sep-15 Jul-13 May-14 Jul-14 May-15 May-16 Sep-13 Sep-14 Jul-15 Jul-16 BILLET CHINA EXPORT BILLET LATIN AMERICAN EXPORT BILLET IMPORT TURKEY As of July

  9. Slide 9: Turkish steel consumption increased by 5% in 2016 6M YoY

    Turkish steel consumption increased by 5% in 2016 6M YoY PRODUCTION ( 000 TONS ) 36,8 36,1 36,4 34,3 31,9 10,4 10,4 9,9 9,0 9,1 18,9 18,5 5,3 5,2 26,4 25,7 26,5 25,3 22,8 13,6 13,3 2015 2014 2013 2012 2011 2016 6M 2015 6M Long Flat Total CONSUMPTION ( 000 TONS ) 34,3 30,8 31,3 28,5 26,9 16,5 14,6 14

  10. Slide 10: Turkish iron and steel product imports increased by 8% in 2016 6M YoY

    Turkish iron and steel product imports increased by 8% in 2016 6M YoY IRON AND STEEL PRODUCT EXPORTS ( 000 TONS ) 16,5 15,2 0,02 15,2 13,1 14,1 0,06 0,00 1,8 0,04 0,00 2,3 2,3 2,5 3,0 6,7 2,6 0,6 1,6 2,4 6,6 0,3 0,00 0,00 1,3 1,1 11,7 0,1 0,2 10,2 11,0 11,3 10,5 5,3 5,3 2015 2014 2013 2012 2011 2016

  11. Slide 11: Deceleration in the automotive sector's growth rate is expected

    Deceleration in the automotive sector’s growth rate is expected CHANGES IN SECTOR DEVELOPMENT INDEX (% YoY) 30% 25% 22,1% 20% 16,0% 16,0% 15% 11,3% 10% 11,2% 7,4% 5,5% 7,1% 5,5% 7,0% 6,0% 2,7% 3,9% 5% 5,0% 6,8% 1,0% 3,0% 0% 2,8% 3,0% 1,4% 1,0% 0,6% 1,0% -5% -5,5% -10% 2011 2012 2013 2014 2015 2016 (

  12. Slide 12: 2016 Market Overview, 2016 6M Results, 2016 Guidance

    ˃ 2016 Market Overview ˃ 2016 6M Results ˃ 2016 Guidance 12 10.08.2016

  13. Slide 13: Erdemir Group Key Figures

    ERDEMİR GROUP KEY FIGURES 2016 6M 2015 6M 2015 2014 Liquid Steel Production (000 Tons) 4.604 4.462 9.122 8.693 (1) Slab Production (000 Tons) 3.729 3.723 7.349 7.363 (2) Flat Steel Production (000 Tons) 3.540 3.781 7.400 6.954 Long Steel Production (000 Tons) 789 636 1.563 1.153 Flat Steel Shipments

  14. Slide 14: Liquid steel production increased by 3% in 2016 6M YoY

    Liquid steel production increased by 3% in 2016 6M YoY LIQUID STEEL PRODUCTION ( 000 TONS ) 9.122 8.693 8.447 4.604 4.462 2.362 2.092 2.242 2.370 2016 2015 2016 2015 2016 2015 2015 2014 2013 1. Quarter 2. Quarter 1. Half 14 10.08.2016

  15. Slide 15: Crude steel capacity utilization ratio higher than world average

    Crude steel capacity utilization ratio of ERDEMİR Group is higher than world average CRUDE STEEL CAPACITY UTILIZATION RATIO 105% 100% 100% 100% 96% 95% 93% 90% 88% 84% 85% 80% 80% 78% 78% 76% 75% 70% 70% 70% 65% 2011 2012 2013 2014 2015 2016 6M Erdemir Group World 15 10.08.2016 Source: Worldsteel

  16. Slide 16: Production was 4,3 million tons in 2016 6M

    Production was 4,3 million tons in 2016 6M PRODUCTION VOLUMES ( 000 TONS ) 8.963 8.107 1.563 7.783 1.153 1.356 1.820 1.746 1.844 4.329 4.417 789 636 919 915 2.217 2.065 2.112 2.352 5.580 5.208 241 395 4.583 396 393 458 447 461 468 2.621 2.866 1.363 1.377 1.258 1.489 2016 2015 2016 2015 2016 2015 201

  17. Slide 17: Sales volumes increased by 4% in 2016 6M YoY

    Sales volumes increased by 4% in 2016 6M YoY SALES VOLUMES ( 000 TONS ) 8.781 8.096 1.552 7.684 1.163 1.346 1.845 1.741 1.778 4.452 4.288 782 648 1.990 996 924 2.289 2.163 2.298 5.384 5.192 398 242 406 4.560 384 502 457 494 467 2.674 2.716 1.389 1.291 1.285 1.425 2016 2015 2016 2015 2016 2015 2015 2

  18. Slide 18: Net sales revenue was 1,8 billion USD in 2016 6M

    Net sales revenue was 1,8 billion USD in 2016 6M NET SALES REVENUE ( MILLION USD ) 5.252 5.142 627 580 4.382 435 2.369 205 4.625 4.562 1.797 3.947 1.179 211 875 922 1.190 81 93 118 124 2.164 1.586 1.098 1.066 782 804 2016 2015 2016 2015 2016 2015 2015 2014 2013 1. Quarter 2. Quarter 1. Half Domestic

  19. Slide 19: Domestic sales breakdown by sector

    Sales to pipe&profile, automotive and white goods sectors increased in 2016 6M YoY 2016 6M FLAT STEEL DOMESTIC SALES BREAKDOWN (%) 2015 6M FLAT STEEL DOMESTIC SALES BREAKDOWN (%) 299Kt; 9% 299Kt; 9% 185Kt; 6% 162Kt; 5% 1.503Kt; 1.480Kt; 46% 44% 371Kt; 11% 341Kt; 10% 3.289Kton; 3.372Kton; 129Kt; 4% 1

  20. Slide 20: Flat steel sales to EU countries was 51% of flat export

    Flat steel sales to EU countries was 51% of our flat export in 2016 6M 2016 6M FLAT STEEL EXPORTS BREAKDOWN (%) 2015 6M FLAT STEEL EXPORTS BREAKDOWN (%) 15Kt; 4% 17Kt; 6% 5Kt; 2% 54Kt; 14% 11Kt; 4% 10Kt; 3% 34Kt; 13% 381Kton; 195Kt; 268Kton; 137Kt; 10% 51% 7% 51% 72Kt; 19% 64Kt; 24% 34Kt; 9% 2016 6M

  21. Slide 21: Group flat and long steel sales prices and cost of sales

    21 Jun-14 Jun-14 Jul-14 USD/TON USD/TON Jul-14 10.08.2016 Aug-14 Aug-14 Sep-14 Sep-14 Oct-14 Oct-14 Nov-14 Nov-14 Dec-14 Dec-14 Jan-15 Jan-15 Feb-15 Feb-15 Mar-15 Mar-15 Apr-15 Apr-15 May-15 May-15 Erdemir Group Flat Sales Price Jun-15 Jun-15 Erdemir Group Long Sales Price Jul-15 Jul-15 Aug-15 Aug-1

  22. Slide 22: EBITDA decreased by 38% in 2016 6M YoY

    EBITDA decreased by 38% in 2016 6M YoY EBITDA ( MILLION USD ) 1.200 40,0% 1.000 1.136 32,0% 800 987 24,0% 600 21,1% 20,6% 21,9% 21,5% 770 21,6% 17,5% 17,6% 19,2% 16,0% 400 14,2% 510 200 8,0% 249 261 314 0 124 190 0,0% 2016 2015 2016 2015 2016 2015 2015 2014 2013 1. Quarter 2. Quarter 1. Half EBITDA

  23. Slide 23: EBITDA was 314 million USD in 2016 6M

    EBITDA was 314 million USD in 2016 6M Consolidated EBITDA => Consolidated Net Profit (Million USD) 23 10.08.2016

  24. Slide 24: High dividend payment didn't have a negative effect on liquidity

    Due to the cash, which is provided from working capital, high dividend payment didn’t have a negative effect on liquidity Consolidated EBITDA => Consolidated Net Cash (Million USD) 24 10.08.2016

  25. Slide 25: EBITDA per ton for flat product was 74 USD/ton in 2016 2Q

    EBITDA per ton for flat product was 74 USD/ton in 2016 2Q EBITDA PER TON (USD/TON) * 153 150 148 141 143 144 130 135 142 124 113 135 126 108 100 125 100 97 111 113 88 107 101 92 94 74 89 61 59 64 67 45 54 49 43 24 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2012 2013 2014 2015 2016 Flat Lo

  26. Slide 26: Net assets were 4,1 billion USD at the end of June 2016

    Net assets were 4,1 billion USD at the end of June 2016 CONSOLIDATED NET ASSETS (MILLION USD) WORKING CAPITAL (MILLION USD) 26 10.08.2016

  27. Slide 27: Despite high dividend payments, net debt has been low

    Despite the high dividend payments, net debt has been at the low level BORROWINGS (MILLION USD) 2.529 2.479 787 1.945 1.135 1.640 1.472 1.452 693 1.241 1.283 1.023 891 1.742 637 368 1.344 947 529 581 655 604 200 14 2011 2012 2013 2014 2015 2016 6M Long-Term Debt Short-Term Debt Net Debt 27 10.08.201

  28. Slide 28: Net debt was 200 million USD at the end of 2016 2Q

    Net debt was 200 million USD at the end of 2016 2Q NET DEBT (MILLION USD) 28 10.08.2016

  29. Slide 29: Cash and borrowings maturity profile

    Erdemir Group has 1.041 million USD cash and cash equivalents at the end of June 2016 BORROWINGS MATURITY PROFILE (MILLION USD) 544 1.041 22 190 204 212 16 13 159 7 98 7 332 3 181 199 152 95 June.16 1 July-Dec. 2016 2017 2018 2019 2020 Cash 2016 Principal Revolving Trade Financing Loans Interest 29

  30. Slide 30: Raw materials made up 64% of the cost of sales

    Raw materials made up 64% of the cost of sales COST OF SALES BREAKDOWN* - % 6% 5% 5% 4% 0,2% 5% 0,3% 5% 1% 5% 1% 7% 7% 7% 7% 8% 12% 12% 11% 14% 64% 70% 71% 73% 2016 6M 2015 2014 2013 Raw Materials Personnel Expenses Purchased Energy Expenses Depreciation and Amortization Exp. Non-operating Expenses

  31. Slide 31: Conversion cost per ton excluding depreciation was 130 USD/ton in 2016 2Q

    Conversion cost per ton excluding depreciation was realised as 130 USD/ton in 2016 2Q MAIN PRODUCT CONVERSION COSTS ( USD/TON ) 200 2800 180 2.352 2.358 2.187 2.217 2.067 2.131 2.141 2.112 2300 160 2.045 1.991 2.065 2.065 1.910 140 1.540 1800 120 100 1300 80 66 69 65 68 61 62 60 59 55 54 800 60 49 4

  32. Slide 32: Capital expenditures of 461 million USD planned for 2016

    Capital expenditures of 461 million USD is planned for 2016* ( M USD ) 1.017 718 634 961 461 445 675 576 264 242 345 377 200 201 158 162 162 171 159 143 82 113 89 140 107 61 68 93 83 80 88 28 116 43 56 59 17 57 55 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2016 (B) 6M Fixed Assets A

  33. Slide 33: Number of employees was 12.404 as of June 2016

    Number of employees was 12.404 as of June 2016 NUMBER OF EMPLOYEES 13.433 13.045 12.872 12.801 12.659 12.404 2011 2012 2013 2014 2015 2016 June 33 10.08.2016

  34. Slide 34: 2016 Market Overview, 2016 6M Results, 2016 Guidance

    ˃ 2016 Market Overview ˃ 2016 6M Results ˃ 2016 Guidance 34 10.08.2016

  35. Slide 35: 2016 Guidance

    2016 Guidance Production (Million Tons) Sales (Million Tons) 9,0 9,0 8,8 9,0 7,4 7,2 7,2 7,2 1,6 1,8 1,6 1,8 2015 Actual 2016 Budget 2015 Actual 2016 Budget Long Flat Long Flat 35 10.08.2016

  36. Slide 36: 2016 Guidance: EBITDA and Net Profit Margins

    2016 Guidance EBITDA and Net Profit Margins ˃ In 2015; EBITDA and Net Profit Margins were 17.6% and 9.4% respectively. ˃ In 2016; EBITDA and Net Profit Margins are expected to be 15-17% and 6-8% respectively. 36 10.08.2016

  37. Slide 37: Erdemir Group

    O ErdemirGroup 37 10.08.2016

Ereğli Demir ve Çelik Fabrikaları T.A.Ş. (Erdemir) — H1 2016 Earnings Presentation on 6ix