Aperam S.a. · EURONEXT:APAM
Aperam — Investor Day (November 2012)
24 slides from Aperam's investor day presentation, Nov 21, 2012
Slide 1: Investor Day – Gueugnon
Investor Day – Gueugnon November 21, 2012 Julien Onillon – Chief Financial Officer
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: Crisis and performance
aperam Crisis and performance
Slide 4: Global economic crisis has strongly hit the stainless steel industry
Crisis and performance In a context of structural overcapacity, the global economic crisis has strongly hit the stainless steel industry Nickel - LME Cash (USD/t) Stainless steel transaction price in China for CR 304 2B 2mm coil (USD/t) 31000 4100 29000 3900 27000 3700 25000 3500 23000 3300 21000 31
Slide 5: European consolidation uncertainty has added pressure to the crisis
Crisis and performance In Europe, the uncertainty related to the consolidation process has added pressure to the crisis Stainless steel base price in South Europe for CR 304 2B 2mm Stainless steel base price in South Europe for CR 430 BA 2mm coil (USD/t) coil (USD/t) 2000 2000 1900 1900 1800 1800 17
Slide 6: European industry has fallen into loss due to strong price decline
Crisis and performance European industry has fallen into loss due to the strong price decline Stainless steel base price in South Europe for CR 304 2B 2mm Average EBITDA margin of the European industry (USD/t) coil (USD/t) 1600 450 1550 400 1500 350 Average price Average margin down by more 300 down
Slide 7: Aperam's profitability more resilient than the industry
Crisis and performance Aperam’s profitability has deteriorated but has been more resilient than the industry EBITDA margin of Aperam and the European industry (USD/t) Quarterly EBITDA of the European producers (USDm) 350 250 300 200 250 150 200 100 150 100 50 50 0 0 -50 -50 -100 -100 -150 Q4 Q1 Q2 Q
Slide 8: Leadership Journey®
aperam Leadership Journey®
Slide 9: An ambitious plan progressing on schedule
Leadership Journey® An ambitious plan progressing on schedule Cumulated gains and 2013 target (USD million) Leadership Journey initiatives by typology 350 Launched at the early stage of the program, the restructuring initiatives are focused on the closure of Restructuring non-competitive capacities
Slide 10: More than USD250m captured to date
Leadership Journey® More than USD250m captured to date Breakdown of the Leadership Journey® gains to date Productivity (tonne by FTE*) Yield, Quality & 10100 500 Raw materials 450 COGS and other 9900 17% fixed costs 400 9700 30% 350 9500 300 9300 250 9100 200 Technological 150 fuels 8900 25% 100 SG&
Slide 11: At minimum USD100m of additional gains targeted by end of 2013
Leadership Journey® At minimum USD100m of additional gains targeted by end of 2013 Key Leadership Journey® projects to deliver in 2013 Breakdown of Leadership Journey® gains for 2013 Alloys & Specialties • RD79 project in Stainless & Electrical steel 11% => Combining downstream tools in Europe Key S
Slide 12: Key investment project in Stainless & Electrical Steel
Leadership Journey® Key investment project in Stainless & Electrical Steel European downstream rationalization from 29 tools to 17 tools The new Hot Annealing and Picking line (RD79) GENK ISBERGUES GUEUGNON HA&P lines HAP 3 HAP 3 RD 7 HAP 9 CR mills CR 4 CR 2 CR 3 LC2I CR 1 CR 2 CR 2 CR 3 CR 4 CR 5
Slide 13: Key investment project in Services & Solutions
Leadership Journey® Key investment project in Services & Solutions Campinas expansion project in Sao Paulo region The new steel service center (Campinas) Existing - Creating a site of Building almost 28.000 m2 and of 240kt transformation capacity in total close to Brazilian main consumption area: -
Slide 14: Key project in Alloys & Specialties
Leadership Journey® Key project in Alloys & Specialties Imphy meltshop enhancement project The new Induction furnace billets EAF cont. casting ingots IF Secondary metallurgy casting VIM ESR VAR Profit improvement in Q1 due to market and internal initiatives but Q2 expected to be more challenging Inv
Slide 15: Prospects and key drivers
aperam Prospects and key drivers
Slide 16: Stainless steel markets to remain difficult but a technical rebound is expected
Prospects and key drivers Stainless steel markets to remain difficult but a technical rebound is expected Stocks of flat stainless steel in EU-27 for Apparent consumption for stainless steel (Cold distribution (in number of days) Rolled) 85 15% 2011 2012 2013e 80 10% 75 5% 70 0% 65 -5% 60 -10% 55 -1
Slide 17: European consolidation expected to have a positive impact
Prospects and key drivers European consolidation expected to have a positive impact Steel making and finishing capacity for European producers (mt) European stainless steel industry footprint after restructuring 9 Finishing line 8 Steel making Reduction in capacity 7 6 5 Outokumpu 65% 85% 4 3 2 Aper
Slide 18: Brazilian import duty expected to lead to market share gains
Prospects and key drivers Brazilian import duty expected to lead to market share gains and mix improvement Chinese marginal cost player to landed price in Brazil (USD/t) Aperam shipments breakdown from Brazil (in ‘000t) Export +25% Domestic +14% Chinese FOB +8% and Imports duty Domestic Domestic Ape
Slide 19: Significant potential for improvement despite the crisis
Prospects and key drivers Despite the crisis and uncertainty, a significant potential for improvement Identified EBITDA drivers (USDm) Sensitivity drivers Volumes Internal driver Specific driver External driver High certainty Relative certainty • Each additional tonne to contribute to Uncertain appr
Slide 20: Balance sheet and financing
aperam Balance sheet and financing
Slide 21: Net debt continues to be reduced despite crisis
Balance sheet and financing Net debt continues to be reduced despite crisis Quarterly net debt and average evolution (USDm) Debt level of the European stainless steel producers at 1150 30/09/2012 100% 2500 1100 90% 80% 2000 1050 70% 1000 60% 1500 950 50% 900 40% 1000 850 30% 20% 500 800 10% 750 Q4 Q
Slide 22: A strong focus on cash control
Balance sheet and financing A strong focus on cash control WRC level in % of quarterly sales (backward) CAPEX level in % of depreciation 30% 1.4 1.2 25% 1.0 20% 0.8 0.6 15% 0.4 10% 0.2 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2010 2011 2011 2011 2011 2012 2012 2012 0.0 Aperam European industry average Aperam Europea
Slide 23: A diversified funding structure
Balance sheet and financing A diversified funding structure Debt breakdown (as of September 30, 2012) Debt maturity profile (USD millions) Subsidiary Debt 900 12% 800 700 BBF & other corporate 600 bank debt 500 47% 400 Bonds 300 41% 200 100 0 Q4 2012 2013 2014 2015 2016 After Draw n Undraw n CAPEX B
Slide 24: Q&A
aperam O&A