Acerinox Sa · BME:ACX
Acerinox Sa — Q2 2023 Earnings Presentation
53 slides from Acerinox Sa's earnings presentation, 2023
Slide 1: Q2 2023 Results presentation
1 Q2 2023 Results presentation
Slide 2: Disclaimer
2 Disclaimer This document may contain forward-looking information and statements about ACERINOX, S.A., its subsidiaries and/or its management. These forward-looking statements include financial projections and estimates and their underlying assumptions, and statements regarding the intent, belief or
Slide 3: H1 2023 at a glance
Q2 2023 Results Presentation 3 H1 2023 at a glance The Group’s performance continues to reflect our structural growth & strategic repositioning Q2 EBITDA (236 million EUR) improved 5% over Q1, despite challenging European market conditions Stronger US & HPA markets delivered Acerinox’s third best H1
Slide 4: H1 2023: Continued to deliver on objectives
Q2 2023 Results Presentation 4 H1 2023: Continued to deliver on objectives Strong balance sheet Excellence NFD/EBITDA: EBITDA margin: 0.78x 13% Shareholder remuneration: Safety: 0.30 EUR/share1 in H1 13% reduction in LTIFR Capex to increase value: ROCE: 97 million EUR +21% 1 Total FY 2023 shareholde
Slide 5: Strong contributor to the circular economy
208 Q2 2023 Results Presentation 5 Strong contributor to the circular economy 2030 sustainability targets Positive Impact 360º Eco-efficiency Engaged team, and H1 2023 progress & culture, diversity, climate change sustainability initiatives and safety mitigation GHG emissions (Scope 1 & 2): Ethical,
Slide 6: ESG ratings and achievements
Q2 2023 Results Presentation 6 ESG ratings and achievements Acerinox is actively participating in the most relevant ESG assessment processes highlighting the sustainability performance improvements NEW ACHIEVEMENTS ★ Awarded by the stainless steel industry for its outstanding progress in the categor
Slide 7: Q2 2023: Market backdrop
Q2 2023 Results Presentation 7 Q2 2023: Market backdrop Q2 MARKET HIGHLIGHTS STAINLESS STEEL North American prices remain stable QoQ performance ● Germany -19% Imports dropped ● USA -6% ● Asia -15% Differences across markets American market remains in good condition Stable base price at reasonable l
Slide 8: Q2 2023: Group financial highlights
Q2 2023 Results Presentation 8 Q2 2023: Group financial highlights Reflects strategy of growth, diversification & strength Income statement Cash flow statement Balance sheet 131 million EUR Sales decrease operating working capital of -2% QoQ increase NFD / EBITDA 0.78x EBITDA margin 98 million EUR impro
Slide 9: Q2 2023: Strong results
Q2 2023 Results Presentation 9 Q2 2023: Strong results CONSOLIDATED RESULTS Million EUR % Q2 23 % H1 23 / Q2 2023 Q1 2023 Q2 2022 H1 2023 H1 2022 / Q2 22 H1 22 Consistent H1 EBITDA Melting production of 462 million EUR (thousands of metric 486 534 622 1,020 1,290 -22% -21% (13% margin): tons) Q1: 22
Slide 10: Q2 2023: Solid EBITDA above last decade average
Q2 2023 Results Presentation 10 Q2 2023: Solid EBITDA above last decade average Quarterly EBITDA Million EUR More competitive through excellence Benefiting from Better with VDM Benefiting from regionalization (1) Adjusted EBITDA Q4 2019: EUR 112 million, EBITDA without taking into account the provisio
Slide 11: Stainless steel highlights
Q2 2023 Results Presentation 11 Stainless steel highlights Million EUR % Q2 23 / % H1 23 / Q2 2023 Q1 2023 Q2 2022 H1 2023 H1 2022 Q2 22 H1 22 Melting production 465 515 601 979 1,247 -23% -21% (thousands of metric tons) 14% EBITDA margin Net sales 1,369 1,476 2,232 2,846 4,237 -39% -33% in Q2 and H
Slide 12: High-performance-alloys highlights
Q2 2023 Results Presentation 12 High-performance-alloys highlights Million EUR Q2 Q1 Q2 H1 H1 % Q2 23 / % H1 23 / 2023 2023 2022 2023 2022 Q2 22 H1 22 Melting production (thousands of metric 21 19 21 40 44 -1% -7% tons) Record H1 EBITDA of 76 million EUR: Net sales 387 305 303 692 584 28% 18% EBITDA
Slide 13: Capital allocation
Q2 2023 Results Presentation 13 Capital allocation Million EUR Breakdown of cash uses Q2 Net debt increase in H1: 281 million EUR Cash out OWC increase 324 million EUR 304 million EUR H1 Tax payments 152 million EUR HPA Stainless 202 million EUR 102 million EUR Capex 97 million EUR Dividend 75 milli
Slide 14: Capital allocation priorities
Q2 2023 Results Presentation 14 Capital allocation priorities Maintain strong balance sheet through the cycle Growth through organic and inorganic opportunities Improving shareholder returns ACERINOX 2020 RESULTS PRESENTATION
Slide 15: Conclusions & outlook
Q2 2023 Results Presentation 15 Conclusions & outlook 01 02 03 Solid first half of the year. Operating cash flow Uncertainties remain: Third best H1 Group (OCF) affected by OWC Geopolitical tensions, energy EBITDA in history increase and tax prices, and weak demand payments 04 05 06 We expect good Q3
Slide 16: Definitions of alternative performance measures
16 Excellence 360º Plan: estimated efficiency savings for the period of 2019 to 2023 Operating Working Capital: Inventories + trade receivables − trade payables Net Cash Flow: Profit/(Loss) after tax and minorities + depreciation and amortization Net Financial Debt: Bank borrowings + bond issuance − c
Slide 17: Q&A
17 17 Q&A
Slide 18: Acerinox investment case
EQUITY STORY 18 18 Acerinox investment case Acerinox is a global leader in stainless steel and high performance alloys, creating the most efficient materials for a sustainable future, maximising benefits for society and building value for our stakeholders
Slide 19: Contents
EQUITY STORY 19 Contents 1. Investment Opportunity 2. The Sustainable Global Leader 3. Growth and Strategies 4. More about us
Slide 20: Investment Case
EQUITY STORY 20 1. Investment Case The opportunity
Slide 21: Acerinox at a Glance
EQUITY STORY 21 Acerinox at a Glance A Sustainable Global Leader in Stainless Steel and High Performance Alloys • #1 in stainless steel in the USA, Highly sustainable products and present with 31% market share. 50% of in every aspect of life. Highest quality the Group’s sales in the USA. standards,
Slide 22: Our ESG Model is a Commitment to the Future
EQUITY STORY 22 Our ESG Model is a Commitment to the Future SAFETY, our Committed to the long-term, number 1 priority 2030 objectives Lost Time Injury Frequency Rate LTIFR x 1.000k reduction 28% in 2022 Hard-to-abate, A reference in circular economy, ready to adapt product 100% recyclable Efficiency
Slide 23: Investment Case. The Opportunity
EQUITY STORY 23 Investment Case. The Opportunity Long-term sector growth stimulated by the exponential increase in the Stainless steel and high-performance alloys uses in high added value sectors. Reference in the Circular Economy. Strategic location of the 13 production plants on 4 continents and a
Slide 24: The Sustainable Global Leader
EQUITY STORY 24 24 2. The Sustainable Global Leader
Slide 25: One of the World's Largest Stainless Steel and HPA Groups
EQUITY STORY 25 One of the World’s Largest Stainless Steel and HPA Groups 12,821 8,201 Customers Employees +80 +18,000 Countries Solutions for VDM (5) supplied customers´ request VDM (2) NAS Acerinox Europa Roldán Inoxfil Bahru +20 +90 Sales agents Certifications Columbus of quality 13 +50 25 Factorie
Slide 26: We Produce and Sell the Most Efficient Materials
EQUITY STORY 26 We Produce and Sell the Most Efficient Materials for the future, with no alternative substitute Sophisticated products… …with high growth potential Stainless Steel High Performance Alloys Profitable Aesthetic Corrosion resistant Construction Aerospace Reusable Hygienic 100% recyclable
Slide 27: Our Products are Essential, Sustainable, Versatile and Efficient
EQUITY STORY 27 Our Products are Essential, Sustainable, Versatile and Efficient Stainless steel and high Acerinox is present in performance alloys: Sophisticated products require every aspect of life sustainable products best-in-class materials Transport Household & Daily Life Electrical Infrastruct
Slide 28: ESG: Integral to Acerinox's DNA 2030 Goals
EQUITY STORY 28 ESG: Integral to Acerinox’s DNA Greater efficiency leads to fewer costs & a lower environmental impact, thus mitigating the effects of climate change 2030 Goals 90% Energy & Greenhouse Gas reduction Valorisation of waste 20% Sent to Landfill Increase use of Electrode Doping Natural Dee
Slide 29: ESG: Social Responsibility with the Entire Community
EQUITY STORY 29 ESG: Integral to Acerinox’s DNA Social Responsibility with the Entire Community Acerinox acting as local Acerinox guiding the community partner industry as an employer Safety, our first priority Responsible tax action ICAP Programme* • Co-operative and multilateral process of tax risk
Slide 30: ESG: Governance and Ethics, Board of directors
EQUITY STORY 30 ESG: Integral to Acerinox’s DNA Governance and Ethics as our Understanding of the Business Board of directors 36% 64% 4 6.8 Women Independent Board Years average (40% in 2024) directors committees Director tenure • Succession planning in place for key positions. • The 4 independent c
Slide 31: We Deliver Solid Revenues and Earnings Growth Consistently
EQUITY STORY 31 We Deliver Solid Revenues and Earnings Growth Consistently Consolidated Group figures Million EUR Revenues EBITDA Net Financial Debt
Slide 32: With a Strong Cash Generation and Efficient Capital Allocation
EQUITY STORY 32 …With a Strong Cash Generation and Efficient Capital Allocation Consolidated Group figures Operating Cash Flow CAPEX Return to Shareholders Million EUR Million EUR € / share * * *2020: Includes €313 million of VDM acquisition *2022: €0.50/share dividend and €0.78 SBB programs
Slide 33: 2022: a new record in a very challenging market
EQUITY STORY 33 2022: a new record in a very challenging market was achieved €8,688 million €1,276 million €544 million Total Revenues EBITDA Operating Cash Flow 2,108 kMT Stainless Steel production €440 million €556 million 0.35x Net Financial Debt Net Profit Debt Financial Debt /EBITDA 82 kMT ratio
Slide 34: With a Robust Balance Sheet
EQUITY STORY 34 With a Robust Balance Sheet Liquidity remains best in class, covering fully all maturities Million EUR Net Debt Robust balance sheet 2,345 AVAILABLE LINES Net Financial of which 100% Debt of is free of covenants 979 LONG TERM MATURITIES: EUR 1,571 MILLION €440 on results million Weig
Slide 35: FY 2022 Record Results in a challenging year
EQUITY STORY 35 FY 2022 Record Results in a challenging year Million EUR 2022 2021 % 2022 / 2021 2022 First Half positive market behaviour Melting production (‘000 Mt) 2,190 2,619 -16% Second part of the year affected by the destocking Net Sales 8,688 6,706 30% due to a deterioration in market senti
Slide 36: Growth Opportunities and Strategy
EQUITY STORY 36 3. Growth Opportunities and Strategy
Slide 37: A Solid Long-Term Strategy that Remains Intact
EQUITY STORY 37 A Solid Long-Term Strategy that Remains Intact Sustainability Excellence Core of our Improving due to business model digitalisation and 360º planning, cost reduction Acerinox is committed programmes and to the Circular Economy optimising the commercial network Added value Strong bala
Slide 38: An Attractive & Resilient Investment Opportunity
EQUITY STORY 38 An Attractive & Resilient Investment Opportunity Excellence Value Strong Sustainability added balance sheet • Safety: number 1 priority • VDM integration • Efficient capital allocation: • Firm commitment to on track NAS Capacity Increase $244 sustainability and contribution million to
Slide 39: Corporate Strategy: Our 2022-2025 Targets
EQUITY STORY 39 Corporate Strategy: Our 2022-2025 Targets EBITDA INTEGRATION SAFETY MARGIN SYNERGIES LTIFR (Lost Time Injury Frequency Rate) reduction: 10% / year >+10% €17 million (2022) (2022: 4.1) (2022: 15%) (2022: €25 million) (-28% vs 2021) NFD/ SAVINGS EBITDA 360º <1.2x €122 million (2022) (2
Slide 40: Corporate Strategy in 2022: Excellence 360º
EQUITY STORY 40 Corporate Strategy in 2022: Excellence 360º Efficiency was affected by a multitude of many incidents that affected the production during 2022 Million Euros In addition, the Group had planned maintenance stoppages in critical assets during summer that will bear fruit when the market co
Slide 41: Corporate Strategy in 2022 - NAS Capacity increase
EQUITY STORY 41 Corporate Strategy in 2022 - NAS Capacity increase Scope of the Project 1. Increase +20% capacity to ensure keeping our leadership in NAFTA and market share 2. Focus on higher added value flat products such as BA (Bright Annealing), thin gauges and steels with special compositions. 3.
Slide 42: Corporate Strategy in 2022 - VDM Integration
EQUITY STORY 42 Corporate Strategy in 2022 - VDM Integration The third year of integration has been completed Achieved synergies of €25 million (152% achievement) Successfully incorporated 13 new finished goods in 9 different alloys into our portfolio. The development of a joint commercial strategy i
Slide 43: Acerinox: A Forward-Thinking Investment Opportunity
EQUITY STORY 43 Acerinox: A Forward-Thinking Investment Opportunity 2020 - 2021 . ACQUISITION AND FOCUS INTEGRATION OPEN TO NEW VDM-METALS INVESTMENT OPPORTUNITIES Acerinox, S.A. 100% • Always analysing companies • Enhancement of product mix, less that can complement or cyclical earnings stream impr
Slide 44: Acerinox: A Forward-Thinking Investment Opportunity 2023-2024 Challenges
EQUITY STORY 44 Acerinox: A Forward-Thinking Investment Opportunity Preparing for future shifts CEO’s Vision “Acerinox is in the best moment of its history thanks to the market conditions and its capacity to adapt, to the geographical and strategic diversification through high performance alloys with
Slide 45: Investor Relations Team
45 Investor Relations Team Carlos Lora-Tamayo Villacieros María Uclés Ruz Borja Riestra Marín Chief Investor Relations & Communication Officer Investor Relations Investor Relations Calle Santiago de Compostela, 100 – 28035 Madrid, España Teléfono: +34 91 398 52 38 / +34 91 398 51 56 / +34 91 398 53 0
Slide 46: More about us
EQUITY STORY 46 4. More about us
Slide 47: Production Sites
EQUITY STORY 47 Production Sites High Performance Stainless Steel Division Alloys Division PONFERRADA KENTUCKY & IGUALADA Carrolton, USA León & Barcelona, Spain Flat product Long product Long product Unna, Duisburg, Siegen, Altena & • Melting Shop • Hot Rolling Shop • Hot Rolling Shop Werdohl, Germa
Slide 48: Ongoing Growth
Ongoing Growth EQUITY STORY 48 Timeline 1970 2002 2020 Incorporation of Incorporation of Incorporation of ACERINOX, S.A. COLUMBUS VDM Metals (Spain) STAINLESS (Germany) (South Africa) Acerinox S.A. 76% Acerinox S.A. 100% I.D.C. 24% Main Acerinox Shareholders % Since 1990 2009 Corporación Financiera
Slide 49: ESG, Integral to Acerinox's DNA
EQUITY STORY 49 ESG, Integral to Acerinox’s DNA Committed to the United Other awards Nations’ 2030 Agenda and ratings Circular Economy Pact Directly applicable SDGs Carbon Disclosure Project Climate ’B’ Water ‘B’
Slide 50: Acerinox is Present in Every Aspect of Life
EQUITY STORY 50 Acerinox is Present in Every Aspect of Life Transport Household High corrosion resistance, and catering withstands high temperatures Rust resistant, easy to and pressures and offers high clean. Becoming essential in mechanical performance. modern design (cutlery). Food & Healthcare &
Slide 51: Stainless Steel and High Performance Alloys: Sustainable products
EQUITY STORY 51 Stainless Steel and High Performance Alloys: Sustainable products Water Electrical Corrosion is minimal, it does not machinery contaminate water and does not Meets durability and corrosion require an additional coating. resistant requirements. Allows for design corrections Environmen
Slide 52: Sophisticated Products Require Best In Class Materials
EQUITY STORY 52 Sophisticated Products Require Best In Class Materials Infrastructure & Energy & construction renewables Chosen as a structural steel to Present in the obtaining and prevent both carbonation and distribution of hydrocarbons and chloride corrosion. Nickel alloys biofuels. Essential in
Slide 53: Acerinox investment case
53 Acerinox investment case Acerinox is a global leader in stainless steel and high performance alloys, creating the most efficient materials for a sustainable future, maximising benefits for society and building value for our stakeholders Contact: investor.relations@acerinox.com