Vulcan Steel Ltd. · ASX:VSL
Vulcan Steel — Investor Presentation (February 2023)
32 slides from Vulcan Steel's investor presentation, Feb 14, 2023
Slide 1: Interim Report 2023
VULCAN INTERIM REPORT 2023
Slide 2: Disclaimer
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Disclaimer The material contained in this document is a presentation They may also be based on factors which are subject of information about Vulcan Steel Limited’s (“Vulcan”) to significant uncertainties and contingencies which activities current as
Slide 3: Agenda
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Agenda 01 Overview It has been an eventful first half of FY23 at Vulcan, including the purchase of Ullrich Aluminium, the largest acquisition 02 Financials & Operations our company has made in its history. 03 Our business performed well despite an ex
Slide 4: Overview
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO 01 Overview 4
Slide 5: Performance Highlights
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Performance Highlights REVENUE 1 GROSS PROFIT $/TONNE 1 GROSS MARGIN NZ$638m +30% 35.9% 2 +38% on NZ$463m in 1H FY22 1H FY23 on 1H FY22 -5.4% on 41.3% in 1H FY22 ADJUSTED EBITDA 1,3 ADJUSTED NPAT 5 (EXCLUDING SIGNIFICANT ITEMS 4) (EXCLUDING SIGNIFICA
Slide 6: Vulcan's Business
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Vulcan’s Business Vulcan recently added aluminium to the company’s steel & metals distribution and processing services offering STEEL METALS Steel Distribution Plate Processing Coil Processing Stainless Steel Engineering Steels Aluminium Distributes
Slide 7: Vulcan's Business continued
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Vulcan’s Business continued Trans-Tasman positions with a national footprint and significant scale drive operating leverage and supply chain capability CAIRNS DARWI N TOWNSVILLE MACKAY W HA NGA REI x3 x3 ROCKHAMPTON A UCK LA ND SILVERDA LE CAL OU N D
Slide 8: Growth Strategy & Update
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Growth Strategy & Update Expansion of Business Brownfield Entry into new product and/or Mergers and improvement expansion geographies service offering Acquisitions initiatives • Strong track record in • Expanded into 10 regional • Successfully introd
Slide 9: Aluminium Business Integration
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Aluminium Business Integration • We have made considerable progress in the integration of our • Our aluminium product procurement process and product offering aluminium business since acquisition are currently being streamlined which is anticipated t
Slide 10: Health & Safety, Environment & Community
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Health & Safety, Environment & Community Health & Safety Environment • Committed to providing a safe and healthy work environment • Greenhouse gas CO2 emission of 9,164 tonnes in June year 2022 • Trialling Inviol artificial intelligence assisted vide
Slide 11: Financials & Operations
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO 02 Financials & Operations 11 11
Slide 12: Operating Backdrop during 1H FY23
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Operating Backdrop during 1H FY23 • Australia and New Zealand activity level - Normalisation from previous peak demand period in FY22 relating to COVID-19 compounded by weaker economic conditions - Some weather-related disruption to market activity i
Slide 13: Global Sector Indicators
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Global Sector Indicators World steel demand growth is currently Short term steel production decline reflects forecast to be modest economic conditions and seasonal factors GLOBAL STEEL DEMAND FORECAST (m tonnes) 1 WORLD MONTHLY CRUDE STEEL PRODUCTION
Slide 14: Steel, Stainless, Nickel, Aluminium & Freight Prices
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Steel, Stainless, Nickel, Aluminium & Freight Prices HRC price fell c20% in 1H FY23 compared with 2H FY22 average, Nickel price remains elevated relative but has recovered c7% since December 2022 to stainless steel price HOT ROLLED COIL PRICE 1 NICKE
Slide 15: Australian and New Zealand Economic Trends
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Australian and New Zealand Economic Trends Australian Economic Activity New Zealand Economic Activity AU QUARTERLY ECONOMIC GROWTH 1 NZ QUARTERLY ECONOMIC GROWTH 3 (seasonally adjusted, %) (seasonally adjusted, %) 8 15 7 12 6 5 9 4 6 3 2 3 1 0 0 -1 -
Slide 16: Australian and New Zealand Building Activity
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Australian and New Zealand Building Activity Australian Building Activity New Zealand Building Activity AU CONSTRUCTION ACTIVITY - VALUE 1 NZ QUARTERLY BUILDING ACTIVITY VALUE 3 (seasonally adjusted, A$m) (seasonally adjusted, NZ$m) 45000 10000 40000
Slide 17: Group Financial Performance
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Group Financial Performance • Revenue lift in 1H FY23 included first-time contribution from MILLION NZ$ 1H FY23 1H FY22 % Change our acquired aluminium business and 9% year-on-year (YoY) Revenue 638.0 463.0 +37.8% increase in our Steel and other Meta
Slide 18: Key drivers of EBITDA change
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Key drivers of EBITDA change • Underlying volume change (excluding aluminium) contributed NZ$29m decline YoY • Margin growth contributed NZ$14m increase YoY • Underlying Gross OPEX (excluding aluminium business) in 1H FY23 was up NZ $11m YoY • Alumin
Slide 19: Steel Segment, Steel GP$/tonne
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Steel Segment, Steel GP$/tonne • Revenue increase was driven by 26% YoY product price inflation and 16% YoY decline in volume - Coil accounted for the majority of this volume decline • Gross profit per tonne in 1H FY23 was up approximately 2% YoY com
Slide 20: Metals Segment
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Metals Segment • Revenue increase was driven by NZ$134m first-time contribution (METALS, MILLION NZ$) 1H FY23 1H FY22 % Change from aluminium, and 28% YoY product price inflation and 11% YoY Revenue 321.4 162.7 98% volume decline in pre-existing oper
Slide 21: Group OPEX
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Group OPEX • Group OPEX increased by 56% YoY in 1H FY23 (OPEX , MILLION NZ$) 1H FY23 1H FY22 % Change - Aluminium business contributed approximately NZ$30m Employee Benefits 70.7 47.3 50% - Material underlying inflation uplift on pre-existing operati
Slide 22: Cashflow & Working Capital
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Cashflow & Working Capital • Cash generated from earnings were applied toward: (MILLION NZ$) 1H FY23 1H FY22 % Change - Higher payments for inventory received in 1H FY23 Receipts from customers 736.1 522.2 46% - Higher tax payments in 1H FY23 which w
Slide 23: Balance Sheet Metrics & Dividend
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Balance Sheet Metrics & Dividend • Remain financially well-positioned to execute on growth opportunities NET DEBT COVER (Net debt/EBITDA, pre IFRS 16) 3.5 • 60%-80% annual dividend payout policy retained 3.0 3.0 - Declared 1H FY23 dividend 24.5 NZ ce
Slide 24: Outlook & Guidance
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO 03 Outlook & Guidance 24 24
Slide 25: Outlook & Guidance
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Outlook & Guidance Outlook Earnings Guidance • As outlined in August last year with our full year FY22 results, we • Based on current view of market conditions and recent trading, expected the present financial year to be more challenging as the we h
Slide 26: Q&A
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO 04 Q&A 26
Slide 27: Supplementary Information
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO 05 Supplementary Information 27
Slide 28: Profit and Loss Segment Disclosure
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Profit and Loss Segment Disclosure Steel Metal Corporate Total POST IFRS 16 1 IN MILLION NZ$ 1HFY23 1HFY22 % Change 1HFY23 1HFY22 % Change 1HFY23 1HFY22 % Change 1HFY23 1HFY22 % Change Revenue 316.5 300.3 5% 321.4 162.7 98% 0.0 0.0 - 638.0 463.0 38%
Slide 29: Statutory and Non-GAAP Earnings
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Statutory and Non-GAAP Earnings Revenue EBITDA EBIT NPAT EPS (NZ cents) IN MILLION NZ$ (UNLESS STATED) 1H FY23 1H FY22 1H FY23 1H FY22 1H FY23 1H FY22 1H FY23 1H FY22 1H FY23 1H FY22 Statutory basis 638.0 463.0 115.1 102.4 94.1 89.0 54.4 53.9 41.4 41
Slide 30: Balance Sheet
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Balance Sheet IN MILLION NZ$ 31 Dec 22 30 Jun 22 % Change Trade and other receivables 154.8 157.2 -2% Inventories 492.5 353.2 39% Less trade and other payables -154.1 -167.1 -8% Working capital excluding tax items 493.2 343.3 44% Tax payable -7.7 -29
Slide 31: Vulcan's Business
VULCAN INTERIM REPORT 2023 PRESENTATION VULCAN.CO Vulcan’s Business Our business model at a glance... OUTCOM E Accountable profit centres 98% Delivery in full, on time1 EN A BL ER S Internally developed Flat Structure fit-for-purpose IT OPER A TI ON A L EX CEL L EN CE Inventory Processing Managing C
Slide 32: VULCAN.CO
VULCAN. VULCAN -cO