Aperam S.a. · EURONEXT:APAM
Aperam — Exane BNP Paribas Basic Materials Conference 2018
29 slides from Aperam's conference presentation, Mar 20, 2018
Slide 1: Exane BNP Paribas Basic Materials Conference
Exane BNP Paribas Basic Materials Conference March 20, 2018 Sandeep Jalan – Chief Financial Officer 1
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This document may contain forward-looking information and statements about Aperam and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with re
Slide 3: Aperam's investment case
Aperam's investment case Being a sustainably safe and profitable company Aperam’s investment case Solid execution of self Cost Leading footprint Cash generation and help strategy financial discipline Leadership Journey® Optimized and sustainable Strong cash generation European asset base through the
Slide 4: Aperam's fundamentals
Exane BNP Paribas Basic Materials Conference Aperam's fundamentals
Slide 5: Footprint and productivity breakthrough
Aperam’s fundamentals Footprint and productivity breakthrough Aperam downstream rationalization in EU from 29 tools to 17 tools Aperam productivity evolution, average 10 500 600 GENK ISBERGUES GUEUGNON 10 000 500 HA&P HAP 3 HAP 3 RD 79 lines 9 500 400 CR mills CR 4 CR 2 CR 3 CR 1 CR 2 CR 2 CR 3 CR 4
Slide 6: Unique asset base in South America well adapted to the market
Aperam’s fundamentals Unique asset base in South America well adapted to the market South American Footprint Upstream integration Blast furnace fuel needs fully covered Caracas (Venezuela) through cost competitive and Bio Energia environment friendly captive charcoal Colombia from our cultivated for
Slide 7: Products and services differentiation
Aperam’s fundamentals Products and services differentiation Services & Solutions division Alloys & Specialties division – ranked number 3 amongst global nickel alloys producers (kt in 2015) 00 40 90 35 Aperam Stainless & Electrical End- users 80 30 70 25 Services & 60 Aperam Solutions Aperam Aperam
Slide 8: Strong cash generator through the cycle
Aperam’s fundamentals Strong cash generator through the cycle Cash-flow from operations evolution (USD million) Cash utilization in 2017 (USD million) 500 400 186 Sustainability (Capex) 300 417 440 392 278 121 Stable and growing dividend 200 240 189 204 Share Buyback 100 98 Program Debt repayment 2
Slide 9: Environment and markets
Exane BNP Paribas Basic Materials Conference Environment and markets
Slide 10: Stainless steel prices
Environment and markets Stainless steel prices Nickel - LME Cash Chinese versus European CR 304 2B 2mm coil transaction price* (USD/t) (USD/t) 35 000 5 000 30 000 4 500 4 000 25 000 3 500 20 000 3 000 15 000 2 500 10 000 2 000 5 000 1 500 Chinese prices European prices Following pressure from raw ma
Slide 11: Diminishing raw material advantage of Chinese players
Environment and markets Diminishing raw material advantage of Chinese players Price equivalent of Nickel contained in NPI vs. LME Nickel price Chinese reduced NPI production leading to increased Ferro- (USD/t) Nickel Imports (in kt) 500 21 000 19 000 400 17 000 15 000 300 13 000 11 000 200 9 000 7 0
Slide 12: Stainless steel demand in Europe
Environment and markets Stainless steel demand in Europe Stocks of CR stainless steel in Germany – quarterly average European stainless steel demand (in number of days) (mt – slab equivalent) 6,0 80 5,0 60 4,0 3,0 40 2,0 20 1,0 0,0 0 Stainless steel demand Pre-crisis level (2007) European demand con
Slide 13: Brazilian opportunities
Environment and markets Brazilian opportunities Stainless steel Brazilian apparent consumption Stainless steel flat stainless steel consumption per capita (in million tonnes) (kg/year) 0,5 9 0,4 8 7 0,3 6 5 0,2 4 3 0,1 2 1 0,0 0 South America USA Western Europe China Stainless steel demand Pre-crisi
Slide 14: Aperam's performance
Exane BNP Paribas Basic Materials Conference Aperam‟s performance
Slide 15: Leadership Journey
Aperam’s performance Leadership Journey® Cumulated gains (USD million) Asset upgrade program launched on best performing assets Status • Productivity improvement of the downstream 600 facilities in Genk (CAP2), Gueugnon (CAP10) Tranche 1 and Timoteo (Sendzimir Mill #1). 500 USD52m of Capex • Upgra
Slide 16: Solid evolution of profitability
Aperam’s performance Solid evolution of profitability Adj. EBITDA evolution[1] (USD million) Net Income evolution (USD million) 400 4,51 5 4,51 12,5% 11,8% 300 4 10,6% 629 10,0% 2,75 2,75 3 503 200 2,21 2,21 547 501 361 1,21 2 1,21 214 5,7% 100 172 490 95 1 292 0 0 -100 -100 -1 -1,28 -1,28 -200 -2 2
Slide 17: Strong balance sheet with continuously improving financing costs
Aperam’s performance Strong balance sheet with continuously improving financing costs Net interest & financing costs (USD million) Aperam debt reduction / restructuring actions Strong decrease of net interest and financing costs, especially cash interest costs, thanks to strong cash flows and debt r
Slide 18: Solid and continuously improving balance sheet
Aperam’s performance Solid and continuously improving balance sheet Cumulated net cash provided by operating activities Net debt and working capital levels (USD million) (USDm) 1 400 2 500 1 200 2 000 1 000 1 500 800 600 1 000 400 500 200 - - 2 011 2 012 2 013 2 014 2 015 2 016 2 017 -200 Net debt W
Slide 19: Aperam's value strategy
Exane BNP Paribas Basic Materials Conference Aperam‟s value strategy: A customer driven company focused on its self-help story
Slide 20: The Transformation Program
Aperam’s value strategy The Transformation Program Aperam Missions Aperam continuously reinforced Leadership Journey® Total target gains 1 Be a sustainably safe company USD 1 2011-2013: LJ phase 1 - Restructuring 350m 2 USD Deliver best in class profitability and returns 2 2014-2017: LJ phase 2 – As
Slide 21: Transformation Program targets
Aperam’s value strategy Transformation Program targets Annualized EBITDA cumulated gains from (USD million) Key pillars of the Phase 3 Transformation Program 180 Accelerate productivity gains by implementation New of latest technology and breakthough in 150 technologies automation with development o
Slide 22: New investment projects
Aperam’s value strategy New investment projects Genk cold rolling and annealing line German Service Center • On January 30, 2018, Aperam announced a new investment • Aperam announces an investment to transfer its German Service project in its Genk plant (Belgium) consisting in new Cold Center from D
Slide 23: Leverage Aperam's unique position in Europe
Aperam’s value strategy Leverage Aperam‟s unique position in Europe European stainless steel industry footprint after restructuring Key strengths of the European operations of Aperam Finishing line • The only integrated upstream Steel making Sourcing operations in the heart of Europe, with the best
Slide 24: Active mitigation of the Brazilian economic situation
Aperam’s value strategy Active mitigation of the Brazilian economic situation Key pillars of the mitigation plan in Brazil Aperam’s assets optimisation in South America • Ensure full utilisation rate with the best margin Product mix Geographical mix thanks to a wide range of products and Portfolio g
Slide 25: Sustainability is fully embedded in Aperam Strategy
Aperam’s value strategy Sustainability is fully embedded in Aperam Strategy Social Environnement Governance Our People are We provide one of the We lead by example our greatest asset. “greenest steels” and with strong sense of ethics Their Safety is our priority, constantly reduce our & integrity an
Slide 26: Financial policy
Aperam’s value strategy A financial policy to maximize the long term growth of the company and the value accretion for its shareholders while maintaining a strong Balance Sheet consistent with Investment Grade Financial ratios Financial Policy 2018 Company Invest in sustaining and upgrading the comp
Slide 27: Q&A
Q&A
Slide 28: Brazilian protections against unfair market behaviour
Environment and markets Brazilian protections against unfair market behaviour Type of products Import duties status Anti-dumping status Normal import duties are 14% AD duties starting October 4th, 2013 for 5 years from 236 USD/t to 1,077 USD/t. The case involves CR 304 and 430, in thicknesses be
Slide 29: European Union antidumping measures since 2014
Environment and markets European Union antidumping measures since 2014 Anti-dumping development in Europe • On May 13, 2014, Eurofer filed an antidumping complaint to European Commission “China and Taiwan have a structural • On June 26, 2014, European Commission started investigation on CR imports f
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