Acerinox Sa · BME:ACX
Acerinox Sa — Q3 2020 Earnings Presentation
46 slides from Acerinox Sa's earnings presentation, Oct 26, 2020
Slide 1: Acerinox Q3 2020 Results Presentation
ACERINOX Q3 2020 RESULTS PRESENTATION 26 OCTOBER 2020 ACERINOX Q3 2020 RESULTS PRESENTATION
Slide 2: Disclaimer
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: 9M Main Financial Figures
9M Main Financial Figures Million EUR Variation 9M 9M 2020 9M 2019 2020/9M 2019 Rapid and successful adaptation to face the challenges of the Covid 19 environment Net Sales 3,451 3,661 -6% Ongoing VDM integration Adjusted EBITDA (1) 267 290 -8% EBITDA 252 290 -13% Major cost reductions on a like for
Slide 4: Focus on operations and capital allocation
Focus on operations and capital allocation Q3 MARKET HIGHLIGHTS Q3 ACERINOX HIGHLIGHTS • Stainless demand recovery, following a collapse in Q2 • Ongoing flexibility in adapting the business to • Strong nickel prices COVID-19 environment • High Performance Alloys affected by COVID-19 • Q3 Production:
Slide 5: Q3 Main Financial Figures Group
Q3 Main Financial Figures Group Million EUR Q1 2020 Q2 2020 Q3 2020 (1) Net Sales 1,159 1,172 1,120 Improvement in activity QoQ Adjusted EBITDA (2) 85 94 87 EBITDA 85 80 87 Ongoing cost control and focus on operational efficiencies Adjusted EBIT (3) 44 46 43 Stable EBITDA EBIT 44 -11 43 Results befo
Slide 6: Stainless Group figures
Stainless Group figures Million EUR Stainless Group Stainless Group Million euros Q1 2020 Q2 2020 Q3 2020 9M 2019 9M 2020 % Var Rebound in activity Melting production (thousand Mt) 599 420 524 1,740 1,543 -11% Net sales 1,159 894 935 3,661 2,988 -18% Adjusted EBITDA (1) 71 242 -17% Stainless prices:
Slide 7: High Performance Alloys figures
High Performance Alloys figures Million EUR Million euros Q2 2020 (1) Q3 2020 9M 2020 Lower contribution in results in Q3 given weaker demand Melting production (thousand Mt) 25 14 40 Net sales 279 185 464 EBITDA 23 2 25 Stabilisation in performance through the EBITDA margin 8% 1% 5% quarter Amortiz
Slide 8: Recovery of stainless demand and consistent EBITDA
Recovery of stainless demand and consistent EBITDA MELTING PRODUCTION (*) ADJUSTED EBITDA (*) NET FINANCIAL DEBT 854 872 841 Debt related to 313 VDM 398 398 acquisition Thousand tons Million EUR 112 Million EUR 599 103 94 542 491 538 85 87 445 582 495 541 475 443 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q3 Q4
Slide 9: Q3: another strong quarter of FCF generation
Q3: another strong quarter of FCF generation Million EUR 9 ACERINOX Q3 2020 RESULTS PRESENTATION
Slide 10: 9M Operating cash flow
9M Operating cash flow of 167 Million EUR Million EUR 10 ACERINOX Q3 2020 RESULTS PRESENTATION
Slide 11: Liquidity remains best in class
Liquidity remains best in class Million EUR 1,690 Available 536 Liquidity fully covers all maturities lines 94% of gross debt, 1,994 million EUR, is free of covenants on results Weighted average cost of term debt is 1.5% Cash on hands 1,153 451 262 328 216 196 50 43 38 28 4 Liquidity 2020 2021 2022
Slide 12: Outlook and conclusions
Outlook and conclusions • We have continued to focus on controlling the controllable aspects of the business, adapting rapidly to the challenges of the COVID-19 • Consequently results have been incredibly resilient in a very tough year and cashflow has remained very strong • Liquidity remains excell
Slide 13: Value Creation for All Stakeholders
VALUE CREATION FOR ALL STAKEHOLDERS ACERINOX Q3 2020 RESULTS PRESENTATION
Slide 14: Appendix
APPENDIX ACERINOX Q3 2020 RESULTS PRESENTATION
Slide 15: A new global leader in stainless and high performance alloys
APPENDIX A new global leader in stainless and high performance alloys Acerinox is a global leader in stainless steel VDM Metals is a global leader in high performance alloys Acerinox + VDM Metals add growth opportunities 15 ACERINOX Q3 2020 RESULTS PRESENTATION
Slide 16: A new global leader in stainless and high performance alloys
APPENDIX A new global leader in stainless and high performance alloys Acerinox is a global leader in stainless steel VDM Metals is a global leader in high performance alloys Acerinox + VDM Metals add growth opportunities 16 ACERINOX Q3 2020 RESULTS PRESENTATION
Slide 17: 2019 Acerinox
APPENDIX 2019 Acerinox Acerinox is the most global stainless steel manufacturing in the world Presence on five continents, factories on four of them, supplying to customers in 81 countries The marketing and sale of the products is carried out through a network consisting of service centres, wa
Slide 18: 2019 Acerinox: Global Presence
APPENDIX 2019 Acerinox: Global Presence ACX PRESENCE IN 56 COUNTRIES IN THE 5 CONTINENTS Workforce 6,709 EUROPE 3,207 AMERICA 1,541 AFRICA 1,298 Warehouses (25) ASIA/OC 663 Sales offices (35) Service centres (18) Sales agents (15 in 27 countries) Plants (6) AFRICA AMERICA ASIA EUROPE THE MIDDLE EAST
Slide 19: Acerinox: History
APPENDIX Acerinox: History 1970, incorporation of ACERINOX, S.A.(Spain) 1990, incorporation of NORTH AMERICAN STAINLESS (USA) Acerinox S.A. 100% Acerinox, S.A. 76% 2002, incorporation of COLUMBUS STAINLESS (South Africa) I.D.C. 24% Acerinox, S.A. 98% 2009, incorporation of BAHRU STAINLESS (Malaysia)
Slide 20: Acerinox Principles And Values
APPENDIX Acerinox Principles And Values 20 ACERINOX Q3 2020 RESULTS PRESENTATION
Slide 21: Our Main Product: Stainless Steel
APPENDIX Our Main Product: Stainless Steel Is an alloy of iron + chrome (≥ 10.5%) + carbon (≤ 1.2%) chrome allows the formation of a thin and invisible film on the steel surface, that prevents corrosion to the material Benefits of Stainless Steel Excellent corrosion Long term value Easy cleaning Dur
Slide 22: Stainless Steel Production Process
APPENDIX Stainless Steel Production Process LONG (1) MELTING SHOP PRODUCT (2) HOT ROLLING SHOP Expeditions Plate Shop Billet Slab Raw Electric Arc A.O.D. Continuous Slab Grinding Preheating Roughing Steckel Hot Rolled Materials Furnace Converter Casting Machine Furnace Mill Mill Coil (3) COLD ROLLIN
Slide 23: Acerinox Products
APPENDIX Acerinox Products FLAT PRODUCT LONG PRODUCT Algeciras 1970 | Spain 1957 | Spain Melting Shop Hot Rolling Hot Rolling Shop Cold Rolling Shop Ponferrada Finished Product 1990 | USA 1990 | Spain Kentucky Melting Shop Hot Rolling Shop Igualada Finished product Cold Rolling Shop 2003 | USA Midde
Slide 24: Stainless Steel World Production
APPENDIX Stainless Steel World Production Thousand Mt Compound annual growth rate 1950–2019: + 5.9% 55,000 50,000 45,000 World production 40,000 35,000 of Stainless Steel 30,000 in 2019: 25,000 52.2 million mt 20,000 15,000 10,000 5,000 0 1950 1960 1970 1980 1990 2000 2010 2019 Source: ISSF and Acer
Slide 25: Stainless Steel World Production
APPENDIX Stainless Steel World Production Million Mt China accounts for 58% of world production in 2019 60 50 Others 40 Japan India 30 China USA 20 Europe 10 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Others: Brazil, Russia, S. Africa, S. Korea,
Slide 26: Stainless Steel Use Per Sector, 2019
APPENDIX Stainless Steel Use Per Sector, 2019 Diversified end users Other transport Electrical 5% Machinery 8% Motor vehicles 8% Metal products 38% Construction 12% Mechanical engineering 29% 26 ACERINOX Q3 2020 RESULTS PRESENTATION
Slide 27: Market Performance: Prices
APPENDIX Market Performance: Prices Raw materials Average quarterly Price US¢ / Lb. Cr Source: LME NICKEL FERROCHROME Source: Metal Bulletin Average price: cash/three months USD/mt 20,000 165 154 139 142 138 15,000 124 120 118 112 114 114 114 110 104 102 101 10,000 5,000 J F M AM J J A S O N D J F M
Slide 28: Acerinox Stainless Steel Production
APPENDIX Acerinox Stainless Steel Production Thousand Mt Acerinox has three full integrated plants 2,475 2,519 MELTING SHOP 2,440 2,320 2,231 2015 2016 2017 2018 2019 HOT ROLLING 2,209 2,231 2,120 2,039 1,951 2015 2016 2017 2018 2019 COLD ROLLING 1,716 1,738 1,752 1,609 1,607 2015 2016 2017 2018 201
Slide 29: Stainless Steel Division: sales geographical mix
APPENDIX Acerinox Stainless Steel Division: sales geographical mix Presence in 5 continents Year 2019 Europe 35.4% Oceania 0.5% Africa 4.3% Asia 12.0% America 47.8% 29 ACERINOX Q3 2020 RESULTS PRESENTATION
Slide 30: Acerinox stainless steel main figures: Net sales
APPENDIX Acerinox stainless steel main figures Net sales Million EUR 7,000 6,000 5,000 4,000 3,000 4,627 5,011 4,754 2,000 4,221 3,968 1,000 0 2015 2016 2017 2018 2019 30 ACERINOX Q3 2020 RESULTS PRESENTATION
Slide 31: Acerinox stainless steel main figures: EBITDA
APPENDIX Acerinox stainless steel main figures EBITDA Million EUR 600 500 400 300 489 480 200 329 364 286 100 0 2015 2016 2017 2018 2019 31 ACERINOX Q3 2020 RESULTS PRESENTATION
Slide 32: Acerinox stainless steel main figures: CAPEX
APPENDIX Acerinox stainless steel main figures CAPEX 2015-2019 Million EUR 173 173 152 144 94 2015 2016 2017 2018 2019 32 ACERINOX Q3 2020 RESULTS PRESENTATION
Slide 33: Acerinox stainless steel main figures: Net profit
APPENDIX Acerinox stainless steel main figures Net profit Million EUR 300 250 200 150 234 237 100 176 50 80 43 0 2015 2016 2017 2018 2019 -50 -60 -100 Before adjustments After adjustments 33 ACERINOX Q3 2020 RESULTS PRESENTATION
Slide 34: Return to Shareholders
APPENDIX Acerinox stainless steel main figures Return to Shareholders (*) Scrip dividend 0.50 0.45 0.44 0.45 0.45 176 € / share 2015 (*) 2016 (*) 2017 2018 2019 34 ACERINOX Q3 2020 RESULTS PRESENTATION
Slide 35: A new global leader in stainless and high performance alloys
APPENDIX A new global leader in stainless and high performance alloys Acerinox is a global leader in stainless steel VDM Metals is a global leader in high performance alloys Acerinox + VDM Metals add growth opportunities 35 ACERINOX Q3 2020 RESULTS PRESENTATION
Slide 36: About VDM Metals
APPENDIX About VDM Metals Technology Leader in High Performance Alloys 7 Production Facilities for Mission-Critical Applications in Germany and the US 62 Alloy Patent 12 Subsidiaries, 6 Sales Offices, 4 Service Centres, 18 Agents Applications Global leader in High Performance Serving International C
Slide 37: 2020 Added value enhanced by VDM Metals
APPENDIX 2020 Added value enhanced by VDM metals Why does VDM Metals add value? ▪ Globally #1 in high performance alloys market Market leader with ▪ Reputation of excellence and strong brand name growth Potential ▪ Significant growth potential in specialty alloys Technology innovation ▪ Innovation l
Slide 38: High Performance Alloys: indispensable now and for a sustainable future
APPENDIX High Performance Alloys: not always visible but always indispensable now and for a sustainable future Sophisticated niche products with high growth potential 38 ACERINOX Q3 2020 RESULTS PRESENTATION
Slide 39: Demand for high performance alloys
APPENDIX Demand for high performance alloys High performance alloys is a strong growth market Specialty Alloys’ Market (excl. Seamless Tube) CAGR 2010-2018: 4% 254 258 249 265 265 256 277 313 227 2010 2011 2012 2013 2014 2015 2016 2017 2018 Market (000’ tonnes) Market Breakdown by End-User (2018) Ma
Slide 40: VDM Metals global market position
40 in 000’ tons VDM1 Categoría Competitor 1 Source: SMR Q3 2018 Competitor 2 Competitor 3 Competitor 4 Competitor 5 Competitor 6 VDM Metals global market position Competitor 7 Competitor 8 APPENDIX Competitor 9 Competitor 10 Competitor 11 Competitor 12 Competitor 13 Competitor 14 Unique opportunity
Slide 41: VDM Metals global market position
APPENDIX VDM Metals global market position Solid revenue and earnings growth in recent years Volumes Production Sales1 Million EUR 000’ tons Adjusted EBITDA2 Net Debt Million EUR Million EUR Note: FY ending in September, 30; 1 Production Sales relate to the sale of metal alloy products and services
Slide 42: A new global leader in stainless and high performance alloys
APPENDIX A new global leader in stainless and high performance alloys Acerinox is a global leader in stainless steel VDM Metals is a global leader in high performance alloys Acerinox + VDM Metals add growth opportunities 42 ACERINOX Q3 2020 RESULTS PRESENTATION
Slide 43: Acerinox Products
APPENDIX Acerinox Products FLAT PRODUCT LONG PRODUCT Campo de 1970 | Spain 1957 | Spain Melting Shop Gibraltar Hot Rolling Shop Hot Rolling Cold Rolling Shop Ponferrada Finished Product 1990 | USA 1990 | Spain Kentucky Melting Shop Hot Rolling Shop Igualada Finished product Cold Rolling Shop 2003 |
Slide 44: Combined global footprint and sales by region
APPENDIX Combined global footprint and sales by region Strong regional complementarity Acerinox (2018) Others Unna 5% Altena Duisburg Werdohl Europe Americ Siegen 35% a 47% Asia 13% VDM Metals Reno Spain (2018) Florham Park United States Others Ameri 0% ca 16% Asia Malaysia Europe 11% 73% Combined (
Slide 45: A new global leader in stainless and high performance alloys
APPENDIX A new global leader in stainless and high performance alloys Creating value through: VDM: - Enhancement of product mix Acerinox: - Projects and tailor-made solutions world’s largest - Exceptional R&D capabilities global leader in producer in high - Diversification of geographical earnings s
Slide 46: Value Creation for All Stakeholders
VALUE CREATION FOR ALL STAKEHOLDERS ACERINOX Q3 2020 RESULTS PRESENTATION