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) — FY2015 Earnings Presentation

34 slides from Eregli Demir Ve Celik Fabrikalari T.a.s's earnings presentation, Mar 9, 2016

  1. Slide 1: Erdemir Group

    © ErdemirGroup ay FUTURE MADE OF STEEL | YEARS

  2. Slide 2: 2015 12 Months Consolidated Results

    2015 12 Months Consolidated Results 09 March 2016 2 09.03.2016

  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: 2015 Market Overview / 2015 Results

    ˃ 2015 Market Overview ˃ 2015 Results 4 09.03.2016

  5. Slide 5: Global crude steel production and HRC prices

    -10% 10% 15% -5% 0% 5% -10% -15% 10% 15% -5% 0% 5% 5 Jan-11 Jan-11 Apr-11 Apr-11 Jul-11 Jul-11 Oct-11 Oct-11 Jan-12 Jan-12 09.03.2016 Apr-12 Apr-12 Jul-12 Jul-12 Oct-12 Oct-12 Jan-13 Jan-13 Apr-13 Apr-13 Jul-13 Jul-13 Oct-13 Oct-13 Source : * Worldsteel ** Bloomberg Jan-14 Jan-14 Apr-14 Apr-14 Jul-1

  6. Slide 6: Iron ore, coking coal and scrap prices

    Iron ore price was 64 USD/ton as of March 2016 COKING COAL PRICES IRON ORE PRICES USD/TON (HCC PEAK DOWNS REGION FOB AUSTRALIA) (IODEX 62% FE CFR NORTH CHINA MID) USD/TON 130 120 120 100 110 100 80 90 60 80 40 70 60 20 01.2015 03.2014 05.2014 07.2014 09.2014 11.2014 03.2015 05.2015 07.2015 09.2015 1

  7. Slide 7: HRC prices are increasing

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

  8. Slide 8: Billet sales prices are significantly increasing in China

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

  9. Slide 9: Turkish production and consumption imbalance due to semi-product imports

    The imbalance between increase rates of Turkish production and consumption is due to semi-product imports. PRODUCTION ( 000 TONS ) 36.939 36.093 36.405 34.286 31.943 10.389 10.376 9.869 9.039 9.075 26.550 25.717 26.536 25.247 22.868 2015 2014 2013 2012 2011 Long Flat Total CONSUMPTION ( 000 TONS ) 3

  10. Slide 10: Turkish iron and steel product imports increased by 39% in 2015

    Turkish iron and steel product imports increased by 39% in 2015 YoY IRON AND STEEL PRODUCT EXPORTS ( 000 TONS ) 16.549 15.226 15.240 14.103 21 13.050 1 1.858 60 36 1 2.353 2.298 2.501 2.957 2.542 568 1.561 2.393 304 10.203 10.998 11.311 11.713 10.489 2015 2014 2013 2012 2011 Long Steel Semi-finished

  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: 2015 Market Overview / 2015 Results

    ˃ 2015 Market Overview ˃ 2015 Results 12 09.03.2016

  13. Slide 13: Erdemir Group Key Figures

    ERDEMİR GROUP KEY FIGURES 2015 2014 2013 Liquid Steel Production (000 Tons) 9.122 8.693 8.447 (1) Slab Production (000 Tons) 7.349 7.363 6.865 (2) Flat Steel Production (000 Tons) 7.400 6.954 6.427 Long Steel Production (000 Tons) 1.563 1.153 1.356 Flat Steel Shipments (000 Tons) 7.229 6.933 6.338 L

  14. Slide 14: Liquid steel production increased by 5% in 2015

    Liquid steel production increased by 5% in 2015 YoY LIQUID STEEL PRODUCTION ( 000 TONS ) 9.122 8.693 8.447 2.092 2.135 2.370 2.349 2.235 2.311 2.324 1.999 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2013 1. Quarter 2. Quarter 3. Quarter 4. Quarter 14 09.03.2016

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

    Crude steel capacity utilization ratio of ERDEMİR Group is higher than world average CRUDE STEEL CAPACITY UTILIZATION RATIO 100% 100% 96% 95% 93% 90% 88% 84% 85% 80% 80% 78% 78% 76% 75% 70% 70% 65% 2011 2012 2013 2014 2015 Erdemir Group World 15 09.03.2016 Source: Worldsteel

  16. Slide 16: Production increased by 11% in 2015

    Production increased by 11% in 2015 YoY PRODUCTION VOLUMES ( 000 TONS ) 8.963 8.107 1.563 7.783 1.153 1.356 1.820 1.746 1.844 2.065 2.352 1.910 2.359 5.580 241 1.992 2.187 2.140 2.065 5.208 395 228 517 4.583 317 410 274 334 447 468 458 467 447 411 410 458 1.377 1.264 1.489 1.272 1.319 1.399 1.395 1.

  17. Slide 17: Sales volumes increased by 8% in 2015

    Sales volumes increased by 8% in 2015 YoY SALES VOLUMES ( 000 TONS ) 8.781 8.096 1.552 7.684 1.163 1.346 1.845 1.741 1.778 1.990 2.298 1.973 2.093 2.470 2.007 2.023 2.023 5.384 5.192 242 205 291 538 315 4.560 406 352 467 366 500 457 432 423 421 444 442 1.291 1.239 1.425 1.345 1.236 1.358 1.432 1.250

  18. Slide 18: Net sales revenue was 4.4 billion USD in 2015

    Net sales revenue was 4,4 billion USD in 2015 NET SALES REVENUE ( MILLION USD ) 5.252 5.142 627 580 4.382 435 4.625 4.562 1.324 1.366 1.277 3.947 1.179 1.190 1.285 1.026 174 178 987 139 136 81 124 98 132 1.098 1.150 1.066 1.107 1.227 1.141 889 894 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 20

  19. Slide 19: Sales to automotive and components industry increased

    Sales to automotive and components industry increased in 2015 YoY 2015 FLAT STEEL DOMESTIC SALES BREAKDOWN (%) 2014 FLAT STEEL DOMESTIC SALES BREAKDOWN (%) 613Kt; 9% 582Kt; 9% 321Kt; 5% 335Kt; 5% 2.937Kt; 45% 694Kt; 11% 627Kt; 10% 6.541Kton; 6.255Kton; 2.811Kt; 242Kt; 4% 90% 239Kt; 4% 90% 45% 527Kt;

  20. Slide 20: Flat steel sales to EU countries 63% of flat exports

    Flat steel sales to EU countries was 63% of our flat export in 2015 2015 FLAT STEEL EXPORTS BREAKDOWN (%) 2014 FLAT STEEL EXPORTS BREAKDOWN (%) 33Kt; 5% 21Kt; 3% 66Kt; 10% 11Kt; 2% 46Kt; 7% 95Kt; 14% 688Kton; 87Kt; 13% 678Kton; 280Kt; 10% 10% 41% 92Kt; 13% 436Kt; 63% 200Kt; 29% 2015 LONG STEEL EXPOR

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

    21 Dec-13 Dec-13 USD/TON USD/TON Jan-14 Jan-14 09.03.2016 Feb-14 Feb-14 Mar-14 Mar-14 Apr-14 Apr-14 May-14 May-14 Jun-14 Jun-14 Jul-14 Jul-14 Aug-14 Aug-14 Sep-14 Sep-14 Oct-14 Oct-14 Nov-14 Nov-14 Erdemir Group Flat Sales Price Erdemir Group Long Sales Price Dec-14 Dec-14 Jan-15 Jan-15 Feb-15 Feb-1

  22. Slide 22: EBITDA decreased by 32% in 2015

    EBITDA decreased by 32% in 2015 YoY EBITDA ( MILLION USD ) 1.200 1.136 40,0% 987 1.000 32,0% 770 800 22,8% 22,5% 24,0% 600 21,1% 21,3% 21,9% 19,8% 20,5% 21,6% 19,2% 17,6% 16,0% 400 249 282 261 254 312 288 202 8,0% 200 58 5,7% 0 0,0% 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2013 1. Quarter 2

  23. Slide 23: EBITDA was 770 million USD in 2015

    EBITDA was 770 million USD in 2015 Consolidated EBITDA => Consolidated Net Profit (Million USD) 23 09.03.2016

  24. Slide 24: High dividend payment didn't hurt 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 09.03.2016

  25. Slide 25: EBITDA per ton for flat product

    EBITDA per ton for flat product was 49 USD/ton in 2015 4Q EBITDA PER TON (USD/TON) 153 150 148 141 143 144 130 124 142 113 135 126 125 108 100 100 97 111 113 88 107 101 92 89 94 61 59 64 67 54 49 24 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2012 2013 2014 2015 Flat Long 25 09.03.2016

  26. Slide 26: Working capital decrease and net assets

    Working capital decrease was the reason of the decline in trade receivables and inventory which was caused by falling commodity prices CONSOLIDATED NET ASSETS (MILLION USD) WORKING CAPITAL (MILLION USD) 26 09.03.2016

  27. Slide 27: Net debt decreasing despite high dividend payments

    Despite the high dividend payments, net debt has been decreasing BORROWINGS (MILLION USD) 3.785 1.976 2.529 2.479 1.924 787 1.945 1.135 1.640 1.452 1.472 693 1.283 891 1.023 1.809 1.742 368 1.344 529 947 581 655 14 2010 2011 2012 2013 2014 2015 Long-Term Debt Short-Term Debt Net Debt 27 09.03.2016

  28. Slide 28: Net debt was 14 million USD at end of 2015

    Net debt was 14 million USD at the end of 2015 NET DEBT (MILLION USD) 28 09.03.2016

  29. Slide 29: Borrowings maturity profile and cash

    Erdemir Group has 1.009 million USD cash and cash equivalents at the end of 2015 BORROWINGS MATURITY PROFILE (MILLION USD) 1.009 376 28 332 61 15 176 8 117 287 317 3 58 169 1 114 57 1 Dec.15 2016 2017 2018 2019 2020 Cash Principal Revolving Trade Financing Loans Interest 29 09.03.2016

  30. Slide 30: Raw materials made up 70% of cost of sales

    Raw materials made up 70% of the cost of sales COST OF SALES BREAKDOWN* - % 5% 5% 4% 5% 5% 0,3% 5% 1% 5% 1% 4% 7% 7% 7% 6% 12% 12% 11% 11% 70% 71% 73% 74% 2015 2014 2013 2012 Raw Materials Personnel Expenses Purchased Energy Expenses Depreciation and Amortization Exp. Non-operating Expenses Other RA

  31. Slide 31: Flat conversion cost per ton

    Flat conversion cost per ton excluding depreciation was realised as 115 USD/ton in 2015 4Q FLAT PRODUCTS ( USD/TON )* 1.867 1.958 1.842 500 1.797 1.731 1.823 1.777 2.100 450 1.600 1.651 1.675 1.682 400 1.378 1.600 350 300 1.100 250 200 600 150 90 85 87 82 78 80 81 87 75 68 69 69 100 100 50 0 67 70 7

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

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

  33. Slide 33: Number of employees was 12,659

    Number of employees was 12.659 as of December 2015 NUMBER OF EMPLOYEES 13.553 13.433 13.045 12.872 12.801 12.659 2010 2011 2012 2013 2014 2015 33 09.03.2016

  34. Slide 34: Erdemir Group

    O ErdemirGroup 34 09.03.2016

Ereğli Demir ve Çelik Fabrikaları T.A.Ş. (Erdemir) — FY2015 Earnings Presentation on 6ix