Mechel · RUS:MTLR
Mechel — FY2010 Earnings Presentation
15 slides from Mechel's earnings presentation, Apr 11, 2011
Slide 1: Full Year 2010 Results Presentation
Full Year 2010 Results Presentation April 11, 2011
Slide 2: Disclaimer
Disclaimer This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of Mechel OAO (Mechel) or any of its subsidiaries in any jurisdiction or an inducement to enter into investment acti
Slide 3: Financial Highlights
Financial Highlights 3
Slide 4: Segments Overview
Segments Overview EBITDA(1) by segments $ Million Revenue split between the segments remains Steel Mining Ferroalloy Power Cons.adj. Consolidated 700 comparable to 2009 620 609 600 532 EBITDA margin up to 21% of the Revenue 500 452 428 416 400 Mining, steel and ferroalloys demonstrate highest 300 25
Slide 5: Steel Segment Performance
Steel Segment Performance Revenue, EBITDA(1) Segment’s Revenue up 78% to $5.6 bn y-o-y 6 000 $ Million 247 15% 5 500 Net loss of $262 mn for 2009 turns into a Net 5 000 12% income of $91 mn in 2010 4 500 4 000 5 586 3 500 159 8% 8% 9% Cash costs kept under control 3 000 2 500 6% Over 4 times growth
Slide 6: Steel Segment Performance
Steel Segment Performance External sales structure Improved pricing environment across most of our 100% 6% 8% steel products q-o-q 5% 5% 12% 14% 7% 6% 5% 4% 80% 5% 5% 9% 9% 23% q-o-q growth in Flat steel sales after the launch 3% 6% 8% 10% 5% 4% of the 2nd slab caster in Chelyabinsk 60% 15% 5% 4% 5%
Slide 7: Mining Segment Performance
Mining Segment Performance Revenue, EBITDA(1) $ Million Significant improvement in financial results: Revenue up 78% y-o-y EBITDA(1) more than 3x up y-o-y EBITDA margin reaches 38% Cash costs slightly up on seasonal factors CVR extinguishment cancels contingent payment obligations with respect to Bl
Slide 8: Mining Segment Performance
Mining Segment Performance External sales structure Coking coal sales increased 170% y-o-y and reached 48% of Segment’s Revenue in 2010 Anthracite and PCI sales up 10x to 10% of Segment’s Revenue in 2010 Coke sales up 160% y-o-y or 12% of Segment’s revenue in 2010. Steam coal sales dwindle in line w
Slide 9: Ferroalloys Segment Performance
Ferroalloys Segment Performance Revenue, EBITDA(1) EBITDA(1) up 2.7x to $94 mn y-o-y $ Million 550 23% 25% EBITDA (1) margin grew from 8% in 2009 to 174 450 15% in 2010 67 20% 350 15% EBITDA (1) margin in 4Q10 reached record 15% 250 level of 23% 8% 455 8% 10% 150 49 48 Cash costs in Cr improve as mi
Slide 10: Ferroalloys Segment Performance
Ferroalloys Segment Performance External sales structure Ferroalloys prices followed market trends in 4Q10: Ni up 13% FeSi up 19% Cr up 4% FeSi domestics sales increased due to better pricing environment from 47% to 74% y-o-y $60 mn non-cash write-up in deferred income tax due to a change in Kazakh
Slide 11: Power Segment Performance
Power Segment Performance Revenue, EBITDA(1) Electricity market liberalization helped $ Million Revenue grow 22% to $654 mn y-o-y EBITDA (1) margin increased from 5% in 2009 to 7% in 2010. Net income grew over 9x y-o-y Acquisition of Toplofikatsia Rousse in Q4 2010 offers opportunity in the European
Slide 12: Improving Financial Performance
Improving Financial Performance Sensible improvement in 2010 financial performance y-o-y: 69% growth in Revenue to $9.7 bn EBITDA(1) grew 3x to $2.0 bn EBITDA(1) margin doubled from 12% to 21% Consolidated Net Income up 9x to $657 mn Revenue Dynamics Revenue, EBITDA(1) and Net profit $ Million $ Mil
Slide 13: Cash Generation Capacity
Cash Generation Capacity Operating CF continued to recover despite heavy investment into working capital of trading operations. Exceedingly improving economics facilitated capital raising for the ambitious investment program, which incurred over $1 bn of expenditure in 2010 $538 mn cash and cash equ
Slide 14: Debt Profile
Debt Profile 1st successful refinancing of $2 bn syndicated facility post Financial ratios crisis in September 2010. $ Million 10 RUR10 bn of 10 year bonds (with 3 year put option) with a 620 609 coupon 8,25% placed in Feb. 2011 to refinance short-term 600 532 8 debt 6,0 5,1 6 400 $1.8 bn of unutili
Slide 15: Financial Results Overview
Financial Results Overview US$ million unless 4Q10 3Q10 Change, % otherwise stated Revenue 2,770 2,645 5% Cost of sales (1,767) (1,623) 9% Gross margin 36.2% 38.7% Operating profit 496 481 3% Operating margin 17.9% 18.2% Adjusted EBITDA(1) 609 620 - 2% Adjusted EBITDA(1) margin 22.0% 23.4% Net Incom