NLMK · RUS:NLMK
NLMK — Q1 2016 Earnings Presentation
23 slides from NLMK's earnings presentation, May 17, 2016
Slide 1: Q1 2016 IFRS Results
Q1 2016 IFRS RESULTS 17 MAY 2016
Slide 2: Disclaimer
DISCLAIMER This document is confidential and has been prepared by NLMK (the “Company”) solely for use at the 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 document does no
Slide 3: Contents
CONTENTS 1. Market Update and Headline Numbers 2. Financial Highlights 3. Segment Results 4. Annex 3
Slide 4: Q1'16 Global Steel Market Trends
Q1’16 GLOBAL STEEL MARKET TRENDS • Global steel output stable qoq at 385.4 mt (-3.6% yoy) STEEL OUTPUT o China output dropped by 2.7 % yoy M tonnes 500 8% o World ex-China (incl. DMs) showed qoq growth 408 421 411 405 412 450 399 396 385 385 400 210 • Chinese steel exports down by 5% qoq to 27.8 mt
Slide 5: Q1'16 NLMK Output and Sales
Q1’16 NLMK OUTPUT AND SALES • Steel sales increased by 10% qoq to 4.1 m t SALES STRUCTURE o Product mixed improved: finished steel sales up by 22% Mt 4,14 3,95 o Standard products sales up by 36% driven by domestic and 3,77 HVA export sales of re-bars/billets (+31%) and HRC (+44%) 1,09 1,12 products
Slide 6: Q1'16 Highlights
Q1’16 HIGHLIGHTS • Q1’16 KEY HIGHLIGHTS FINANCIAL PERFORMANCE o Revenue: $1,577 m (-4% qoq; -29% yoy) $M 3 000 30% o EBITDA: $290 m (-10% qoq; -55% yoy) 2 500 25% o EBITDA margin: 18% (-2 p.p. qoq; -11 p.p. yoy) 2 000 20% o Net profit: $57 m (-25% qoq; -82% yoy) 1 500 15% o Capex: $121 m (-19% qoq;
Slide 7: Q2'2016 Outlook
Q2’2016 OUTLOOK • MARKET o Global market: world steel demand should stabilize in Q2 supported by better supply discipline, cost inflation and stronger demand in the global markets o Russian market: seasonal uptick in demand and global steel price trends continue to drive domestic prices up o Europea
Slide 8: Contents
CONTENTS 1. Market Update and Headline Numbers 2. Financial Highlights 3. Segment Results 4. Annex 8
Slide 9: Q1'16 Profitability
Q1’16 PROFITABILITY • EBITDA down by 10% qoq to $290 m Q1’16/ Q4’15 EBITDA ANALYSIS o Due to narrowing price/cost spreads as selling prices bottomed $M -25 -39 40 13 • (-) Russian Flat Products -20 o (-) Narrowed price spreads and price recognition lag effect o (+) Strong sales both in Russia and ex
Slide 10: Cash Flow
CASH FLOW • Q1’16 Net Operating Cash Flow: $421 M Q1’16 CASH FLOW BRIDGE, $M o Working capital release of $164 m EBITDA 290 Decrease in slab stocks at NLMK USA due to higher sales Usage of winter scrap inventories at Russian assets Net working capital change 164 Drop in finished steel inventor
Slide 11: Debt Position
DEBT POSITION • Net debt reduction 11% qoq FINANCIAL DEBT CHANGE IN Q1’16 o Net Debt: $0.97 bn (-11% qoq, -22% yoy) 2.68 $ BN 2.67 o Total debt: $2.67 bn (flat qoq, +4% yoy) 0,56 -0,05 0,04 0,60 • Strong liquidity maintained o Cash and cash equivalents*: $1.7 bn (+7% qoq, +29% yoy) 2,63 2,12 2,07 •
Slide 12: Liquidity and Debt Maturity Profile
LIQUIDITY AND DEBT MATURITY PROFILE • Strong liquidity position of $1.7 bn with LIQUIDITY AND ST-DEBT PAYMENTS* $M additional $1.1 bn of credit lines • Comfortable debt maturity profile 1 107 Available credit lines o ST debt $0.58 bn* incl. revolver lines for W/C financing, RUB bonds, short term par
Slide 13: Content
CONTENT 1. Market Update and Headline Numbers 2. Financial Highlights 3. Segment Results 4. Annex 13
Slide 14: Russian Flat Products
RUSSIAN FLAT PRODUCTS • SALES TO 3RD PARTIES UP BY 2% QoQ SALES & REVENUE FROM 3RD PARTIES o (+) Improved demand in export markets +2% -9% o (+) Finished steel sales up 15% qoq Other operations** 2.401 m t 2.458 m t $1,025 m $928 m Transformer o (-) Change in presentation of export sales* 3% 4% Dyna
Slide 15: Russian Long Products
RUSSIAN LONG PRODUCTS • SALES TO 3RD PARTIES UP BY 43% QoQ SALES & REVENUE FROM 3RD PARTIES o (+) Higher exports of billets and long products +43% +17% o (+) Change in presentation of export sales* 438 k t 625 k t $142 m $165 m 14% • EXTERNAL REVENUE UP BY 17% QoQ 17% 15% 16% Scrap and other** 14% 1
Slide 16: Mining
MINING • SALES VOLUMES DOWN BY 4% QoQ SALES AND REVENUE o (-) Additional stock created to support Q2’16 volumes -4 % -26 % with higher prices 4.485 m t 4.303 m t $ 145 m $107 m 7% 7% 24% Other • REVENUE DOWN BY 26% QoQ 28% 27% 21% operations* o (-) Lower sales volumes Iron ore sales to third parties
Slide 17: Foreign Rolled Products
FOREIGN ROLLED PRODUCTS • SEGMENT SALES UP BY 26% QoQ SALES & REVENUE FROM 3RD PARTIES o (+) NLMK Dansteel sales +9% qoq +26 % +12 % o (+) NLMK USA sales volumes + 31% qoq 469 k t 589 k t $ 282 m $317 m 8% 6% 17% 14% Other operations* 18% 16% • SEGMENT’S PROFITABILITY IMPROVED 22% 24% Galvanized 23%
Slide 18: Content
CONTENT 1. Market update & headline numbers 2. Financial highlights 3. Segment results 4. Annex 18
Slide 19: Sales Structure
SALES STRUCTURE • Q1’16: SALES UP BY 10% QoQ TO 4.14 MT SALES STRUCTURE BY PRODUCT o +37 % QoQ Longs 3.96 3.77 M tonnes 4.14 Pig iron Slabs o +18% QoQ Flats Billets 1,42 1,35 1,31 o +8% QoQ high value added products HRC Thick plates o -5% QoQ of semi-finished 0,79 0,99 CRC 0,75 Galvanized • Q1’16: R
Slide 20: Sales Geography
SALES GEOGRAPHY • +11% QoQ GROWTH IN GLOBAL SALES STEEL PRODUCT SALES BY REGION o +33% QoQ in North America M tonnes 3.96 3.77 4.14 o +26% QoQ in European Union 5 Others 0,48 4 0,55 o +7% YoY to Middle East, incl. Turkey 4 0,55 0,16 SE Asia 3 0,33 0,21 0,60 0,53 0,45 • +8% QOQ - SALES TO RUSSIAN MAR
Slide 21: Foreign Assets Performance
FOREIGN ASSETS PERFORMANCE SLABS SALES FROM RUSSIAN FLAT DIVISION NBH ROLLED PRODUCT SALES K tonnes K tonnes 501 525,73 524,67 523,62 522,57 521,52 479 QoQ 520,47 QoQ 519,42 1 793 518,37 517,31 516,26 515,21 1 775 514,16 513,11 512,06 511,01 509,95 508,90 11 507,85 506,80 505,75 504,70 503,65 2 000,
Slide 22: Cash Cost of Slab
CASH COST OF SLAB k rub/t $/t 15 500 12,5 12,4 12,5 12,0 12,3 11,9 11,6 12 400 11,0 10,8 10,8 10,7 10,7 396 388 348 9 300 310 308 295 238 6 225 200 197 197 190 159 3 100 RUB/$ exchange rate 29.39 31.09 31.85 35.96 35.00 36.19 47.42 62.19 52.65 62.98 74.63 0 0 2011 2012 2013 Q1'14 Q2'14 Q3'14 Q4'14 Q
Slide 23: www.nlmk.com
Sergey Takhiev NLMK Investor Relations Russia, 115054, Moscow 18, Bakhrushina str, bldg 1 www.nlmk.com t. +7 495 915 15 75 m.+7 985 760 55 74 st@nlmk.com