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) — FY2016 Earnings Presentation
34 slides from Eregli Demir Ve Celik Fabrikalari T.a.s's earnings presentation, Feb 7, 2017
Slide 1: 1
1
Slide 2: 2016 12 Months Consolidated Results
2016 12 Months Consolidated Results 7 February 2017 2
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
Slide 4: 2016 Market Overview; 2016 12M Results
˃ 2016 Market Overview ˃ 2016 12M Results 4
Slide 5: Crude steel production and HRC prices
5 -5% -10% -8% -4% -2% -12% -10% -6% 0% 5% 10% 15% 0% 2% 4% 6% 8% Dec-13 Dec-13 Feb-14 Feb-14 Apr-14 Apr-14 Jun-14 Jun-14 Aug-14 Aug-14 Oct-14 Oct-14 Dec-14 Dec-14 Feb-15 Feb-15 Apr-15 Apr-15 Jun-15 Jun-15 Aug-15 Aug-15 Oct-15 Oct-15 Dec-15 Dec-15 Feb-16 Feb-16 Apr-16 Apr-16 Jun-16 Jun-16 CIS CRUDE
Slide 6: Iron ore price increased to 83 USD/ton in January 2017
Iron ore price increased to 83 USD/ton in January 2017 COKING COAL PRICES IRON ORE PRICES USD/TON (HCC PEAK DOWNS REGION FOB AUSTRALIA) USD/TON (IODEX 62% FE CFR NORTH CHINA MID) 310 90 260 80 70 210 60 160 50 110 40 60 30 07.2015 09.2015 11.2015 01.2016 03.2016 05.2016 07.2016 09.2016 11.2016 01.20
Slide 7: HRC prices are increasing
HRC prices are increasing HRC PRICES ( USD/Ton ) 700 600 500 400 300 200 May-14 May-15 May-16 Nov-15 Nov-16 Nov-14 Sep-14 Sep-16 Sep-15 Mar-15 Mar-16 Mar-14 Jul-14 Jul-15 Jul-16 Jan-14 Jan-15 Jan-16 Jan-17 CIS EXPORT HRC BLACKSEA/BALTIC EU HRC CHINA EXPORT HRC USA IMPORT HRC As of January 2017, EU H
Slide 8: Billet sales prices are increasing
Billet sales prices are increasing BILLET PRICES ( USD/Ton ) 600 500 400 300 200 May-14 May-15 Nov-14 Nov-15 Nov-16 May-16 Sep-14 Sep-15 Sep-16 Mar-14 Mar-15 Mar-16 Jan-14 Jan-15 Jan-16 Jan-17 Jul-14 Jul-15 Jul-16 BILLET CHINA EXPORT BILLET LATIN AMERICAN EXPORT BILLET IMPORT TURKEY As of January 20
Slide 9: Turkish steel consumption decreased by 1% in 2016 YoY
Turkish steel consumption decreased by 1% in 2016 YoY PRODUCTION ( MILLION TONS ) 36,9 36,9 36,1 36,4 34,3 10,9 10,4 10,4 9,9 9,0 26,0 26,5 25,7 26,5 25,3 2016 2015 2014 2013 2012 Long Flat CONSUMPTION ( MILLION TONS ) 34,4 34,1 31,3 30,8 28,5 16,5 16,5 14,6 14,6 13,6 17,6 17,9 16,2 16,7 14,9 2016 2
Slide 10: Turkish iron and steel product exports increased by 2% in 2016 YoY
Turkish iron and steel product exports increased by 2% in 2016 YoY IRON AND STEEL PRODUCT EXPORTS ( MILLION TONS ) 16,5 15,2 14,1 0,02 13,4 13,1 0,00 0,04 1,8 0,00 0,00 2,3 2,5 3,0 3,1 2,6 0,6 1,6 0,3 0,3 10,0 10,2 11,0 11,3 11,7 2016 2015 2014 2013 2012 Long Steel Semi-finished (Long) Flat Steel Sl
Slide 11: Acceleration in the white goods sector's growth rate is expected
Acceleration in the white goods sector’s growth rate is expected CHANGES IN SECTOR DEVELOPMENT INDEX (% YoY) 25% 20% 16,0% 15% 10% 7,4% 8,0% 7,1% 5,5% 7,0% 5,5% 3,9% 4,7% 5% 4,0% 5,0% 6,8% 2,7% 1,0% 1,5% 2,8% 3,5% 3,0% 0% 0,6% 1,4% 1,0% 1,0% -1,8% -5% -5,5% -10% 2012 2013 2014 2015 2016 2017(e) Cons
Slide 12: 2016 Market Overview; 2016 12M Results
˃ 2016 Market Overview ˃ 2016 12M Results 12
Slide 13: Erdemir Group Key Figures
ERDEMİR GROUP KEY FIGURES 2016 2015 2014 Liquid Steel Production (000 Tons) 9.373 9.122 8.693 (1) Slab Production (000 Tons) 7.605 7.349 7.363 (2) Flat Steel Production (000 Tons) 7.072 7.400 6.954 Long Steel Production (000 Tons) 1.572 1.563 1.153 Flat Steel Shipments (000 Tons) 7.163 7.229 6.933 L
Slide 14: Liquid steel production increased by 3% in 2016 YoY
Liquid steel production increased by 3% in 2016 YoY LIQUID STEEL PRODUCTION ( 000 TONS ) 9.373 9.122 8.693 2.362 2.092 2.242 2.370 2.328 2.441 2.311 2.349 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2014 1. Quarter 2. Quarter 3. Quarter 4. Quarter 14
Slide 15: Crude steel capacity utilization ratio of Erdemir is higher than the world average
Crude steel capacity utilization ratio of ERDEMİR is higher than the world average CRUDE STEEL CAPACITY UTILIZATION RATIO 105% 100% 100% 97% 96% 95% 93% 90% 88% 84% 85% 80% 80% 78% 78% 76% 75% 70% 69% 70% 65% 2011 2012 2013 2014 2015 2016 Erdemir World 15 Source: Worldsteel
Slide 16: Production was 8,6 million tons in 2016
Production was 8,6 million tons in 2016 PRODUCTION VOLUMES ( 000 TONS ) 8.963 8.644 8.107 1.563 1.572 1.153 1.820 1.781 1.746 2.065 2.352 2.187 2.154 2.359 5.580 2.217 2.112 2.161 5.291 5.208 241 395 517 396 393 342 410 441 458 447 461 468 469 458 393 447 1.363 1.377 1.258 1.489 1.350 1.319 1.320 1.
Slide 17: Sales volume was 8,8 million tons in 2016
Sales volume was 8,8 million tons in 2016 SALES VOLUMES ( 000 TONS ) 8.750 8.781 8.096 1.587 1.552 1.163 1.860 1.845 1.788 2.289 1.990 2.163 2.298 2.405 2.470 5.303 5.384 1.893 2.023 5.145 398 242 406 459 538 384 366 502 457 494 467 346 484 501 380 420 1.389 1.291 1.285 1.425 1.237 1.462 1.431 1.167
Slide 18: Net sales revenue was 3,9 billion USD in 2016
Net sales revenue was 3,9 billion USD in 2016 NET SALES REVENUE ( MILLION USD ) 5.252 627 4.382 3.855 435 517 4.625 3.947 1.179 922 3.338 875 81 1.190 1.146 118 912 987 1.026 93 124 191 132 115 98 1.098 1.066 889 955 894 782 804 797 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2014 1. Quarter 2
Slide 19: Sales to automotive and white goods sectors increased in 2016 YoY
Sales to automotive and white goods sectors increased in 2016 YoY 2016 FLAT STEEL DOMESTIC SALES BREAKDOWN (%) 2015 FLAT STEEL DOMESTIC SALES BREAKDOWN (%) 552Kt; 613Kt; 355Kt; 9% 321Kt; 9% 6% 2.917Kt; 5% 2.937Kt; 703Kt; 46% 45% 694Kt; 11% 11% 6.273Kton; 6.541Kton; 231Kt; 4% 88% 242Kt; 4% 90% 406Kt;
Slide 20: Flat steel sales to EU countries was 60% of flat export in 2016
Flat steel sales to EU countries was 60% of our flat export in 2016 2016 FLAT STEEL EXPORTS BREAKDOWN (%) 2015 FLAT STEEL EXPORTS BREAKDOWN (%) 34Kt; 21Kt; 4% 11Kt; 3% 33Kt; 79Kt; 9% 2% 5% 31Kt; 3% 95Kt; 14% 131Kt; 890Kton; 688Kton; 15% 12% 92Kt; 10% 13% 436Kt; 533Kt; 63% 82Kt; 9% 60% 2016 LONG STEE
Slide 21: Average flat and long steel prices and cost of sales
21 Dec-14 Dec-14 USD/TON USD/TON Jan-15 Jan-15 Feb-15 Feb-15 Mar-15 Mar-15 Apr-15 Apr-15 May-15 May-15 Jun-15 Jun-15 Jul-15 Jul-15 Aug-15 Aug-15 Sep-15 Sep-15 Oct-15 Oct-15 Nov-15 Nov-15 Erdemir Group Flat Sales Price Erdemir Group Long Sales Price Dec-15 Dec-15 Jan-16 Jan-16 Feb-16 Feb-16 Mar-16 Ma
Slide 22: Net profit increased by 21% in 2016 YoY
Net profit increased by 21% in 2016 YoY 1.200 EBITDA ( MILLION USD ) 40,0% 1.000 1.136 32,0% 30,5% 895 800 26,4% 23,2% 770 24,0% 600 21,1% 20,6% 21,9% 20,5% 21,6% 17,6% 16,0% 400 14,2% 200 8,0% 249 261 279 302 5,7% 124 190 202 58 0 0,0% 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2014 1. Quart
Slide 23: EBITDA was 895 million USD in 2016
EBITDA was 895 million USD in 2016 Consolidated EBITDA => Consolidated Net Profit (Million USD) 23
Slide 24: Dividend payment didn't have a negative effect on 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
Slide 25: EBITDA per ton for flat product was 121 USD/ton in 2016 4Q
EBITDA per ton for flat product was 121 USD/ton in 2016 4Q EBITDA PER TON (USD/TON) * 153 150 148 141 143 144 143 135 130 124 113 142 135 126 125 108 121 100 118 100 113 97 113 111 88 107 101 92 94 74 89 59 61 64 67 45 54 49 43 24 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2012 2013
Slide 26: Net assets were 4,5 billion USD at the end of 2016
Net assets were 4,5 billion USD at the end of 2016 CONSOLIDATED NET ASSETS (MILLION USD) WORKING CAPITAL (MILLION USD) 26
Slide 27: Despite the high dividend payments, there is no net debt
Despite the high dividend payments, there is no net debt BORROWINGS (MILLION USD) 2.529 2.479 787 1.945 1.135 1.640 1.472 1.452 693 1.283 1.023 1.114 891 1.742 368 654 1.344 947 529 581 655 14 460 (190) 2011 2012 2013 2014 2015 2016 Long-Term Debt Short-Term Debt Net Debt 27
Slide 28: Net debt was positive at the end of 2016
Net debt was positive at the end of 2016 NET DEBT (MILLION USD) 28
Slide 29: Erdemir has 1.303 million USD cash at the end of 2016
Erdemir has 1.303 million USD cash and cash equivalents at the end of 2016 BORROWINGS MATURITY PROFILE (MILLION USD) 667 20 1.303 258 177 12 144 389 7 98 3 31 166 137 1 95 30 Dec.16 2017 2018 2019 2020 2021 Cash Principal Revolving Trade Financing Loans Interest 29
Slide 30: Raw materials made up 65% of the cost of sales
Raw materials made up 65% of the cost of sales COST OF SALES BREAKDOWN* - % 6% 5% 0,3% 5% 4% 1% 0,2% 5% 5% 1% 5% 7% 7% 8% 7% 7% 12% 12% 11% 14% 70% 71% 73% 65% 2016 2015 2014 2013 Raw Materials Personnel Expenses Purchased Energy Expenses Depreciation and Amortization Exp. Non-operating Expenses Oth
Slide 31: Conversion cost per ton excluding depreciation was 117 USD/ton in 2016 4Q
Conversion cost per ton excluding depreciation was realised as 117 USD/ton in 2016 4Q MAIN PRODUCT CONVERSION COSTS ( USD/TON ) 200 2800 180 2.352 2.359 2.187 2.217 160 2.045 2.067 2.131 2.141 2.065 2.065 2.112 2.161 2.154 2300 1.991 1.910 140 1.540 1800 120 100 1300 80 66 69 65 68 61 62 60 59 55 54
Slide 32: Capital expenditures of 595 million USD planned for 2017
Capital expenditures of 595 million USD is planned for 2017* ( M USD ) 1.017 718 634 595 961 445 675 458 576 264 242 377 200 201 158 162 162 162 171 159 143 113 107 82 110 140 137 68 56 59 57 93 83 55 80 88 52 43 17 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (B) Fixed Assets Ac
Slide 33: Number of employees was 12.277 as of December 2016
Number of employees was 12.277 as of December 2016 NUMBER OF EMPLOYEES 13.433 13.045 12.872 12.801 12.659 12.277 2011 2012 2013 2014 2015 2016 33
Slide 34: 34
34
Ereğli Demir ve Çelik Fabrikaları T.A.Ş. (Erdemir) — FY2016 Earnings Presentation on 6ix