Severstal · RUS:CHMF
Severstal — Q3 2019 Earnings Presentation
19 slides from Severstal's earnings presentation, Oct 18, 2019
Slide 1: Q3 2019 Financial Results Presentation
Q3 2019 Financial Results Presentation 18.10.2019 1
Slide 2: Table of Contents
Table of Contents 03 Q3 2019 Results Overview 08 Divisional Performance 12 Financial Position 15 Market Outlook 16 Appendices It isunauthorized Any strictly forbidden (or appendices annexes) to disclosure copying, is strictlyhereto) use, copy,ordisclose or of distribution distribute materials the ma
Slide 3: Q3 2019 Results Overview
Q3 2019 Results Overview Any unauthorized copying, disclosure or distribution of the materials 3 contained in this document (or its annexes) is strictly prohibited.
Slide 4: Q3 2019 Group Highlights
Q3 2019 Group Highlights 01 Group revenue declined 3.0% q/q to $2,111 million (Q2 2019: $2,177 million) due to adverse price dynamics for steel and raw materials. 02 Group EBITDA increased 4.5% q/q to $787 million (Q2 2019: $753 million), reflecting lower cost of sales. The Group’s vertically integr
Slide 5: Revenue & EBITDA divisional quarterly dynamics
Revenue & EBITDA divisional quarterly dynamics Revenue (m$) Q1 19 - Q3 19: Q3 2019 Group Revenue: $2,111m 2,151 2,102 down 3.0% (Q2 2019: $2,177m); 1,966 511 647 609 Group revenue declined mainly driven by the weaker pricing environment for steel and raw materials. (446) (621) (600) Q1 2019 Q2 2019
Slide 6: 9M 2019 Group Highlights
9M 2019 Group Highlights Revenue dynamics in 9M 2019, $m EBITDA dynamics in 9M 2019, $m EBITDA to FCF bridge for 9M 2019, $m EBITDA 9M 2019 2,203 cash CAPEX (787) 6,319 6,495 2,203 2,348 interest paid & other fin. cost (70) income tax paid (337) 9M 2019 9M 2018 9M 2019 9M 2018 NWC change 26 • Weaker
Slide 7: +$350m EBITDA 2019 programme progress
+$350m EBITDA 2019 programme progress: key drivers* from 9M 2018 to 9M 2019, $m 133 9 21 (308) 2,348 Additional effect of $163m y/y 2,203 2,040 1. 2. 3. 4. EBITDA 9M 2018 Macro factors: selling prices EBITDA adjusted for macro Sales & Marketing Volumes Operational performance EBITDA 9M 2019 and COS
Slide 8: Divisional Performance
Divisional Performance Any unauthorized copying, disclosure or distribution of the materials 8 contained in this document (or its annexes) is strictly prohibited.
Slide 9: Severstal Russian Steel (RSD)
Severstal Russian Steel (RSD) 01 RSD steel product sales remained flat q/q at 2.85 mln tonnes in Q3 2019 (Q2 2019: 2.85 mln tonnes). The total share of domestic sales declined 3 ppts, to 67% (Q2 2019: 70%). 02 The share of high value-added (HVA) products within the sales portfolio remained at 45% (Q
Slide 10: Cherepovets Steel Mill production cash cost of slab, $/t
Cherepovets Steel Mill production cash cost of slab, $/t 355 346 335 342 327 334 331 323 321 322 325 Q3 19 non-integrated cash cost 302 of slab down $9/t q/q as a result of lower raw material expenses. 255 259 250 214 221 206 203 213 177 280 Q3 19 integrated cash cost of 264 240 237 241 243 233 230
Slide 11: Severstal Resources
Severstal Resources Resources cost of sales structure for Q3 2019, % 01 Coking coal concentrate sales volumes from Vorkutaugol surged 41% q/q 16% reflecting the 42% increase q/q in production of run-of-mine coal. 36% 20% 02 Iron ore pellet sales declined 15% to 2.46 mln tonnes (Q2 2019: 2.90 mln ton
Slide 12: Financial Position
Financial Position Any unauthorized copying, disclosure or distribution of the materials contained in this document (or its annexes) is strictly prohibited. 12
Slide 13: Cash Flow and Net Working Capital
Cash Flow and Net Working Capital Q3 2019 Highlights: Q3 2019 EBITDA to FCF reconciliation, $m EBITDA Q3 2019 787 01 Q3 19 free cash flow of $346m increased q/q as a result of NWC release q/q. cash CAPEX (311) interest paid & other fin. cost (22) 02 Q3 19 cash CAPEX of $311m (Q2 19: $267m). income t
Slide 14: Robust Liquidity and Sustainable Leverage
Robust Liquidity and Sustainable Leverage 01 At the end of Q3 2019, cash and cash equivalents stood at $1,317 million (Q2 2019: $345 million). 02 Gross debt increased to $2,617 million (Q2 2019: $1,814 million). In September Robust Liquidity and Sustainable Leverage 2019, Severstal completed the pla
Slide 15: Market Outlook
Market Outlook • Growth in global steel demand in 2019 is supported by China, while outside China steel demand was weak, particularly in Europe and in the MENA region. • The deficit in the iron ore market is gradually disappearing. The coking coal market is well-supplied, with weak demand having res
Slide 16: Appendices
Appendices Any unauthorized copying, disclosure or distribution of the materials contained in this document (or its annexes) is strictly prohibited. 16
Slide 17: Q3 2019 Divisional Results
Q3 2019 Divisional Results Severstal Resources Q3 2019 Q2 2019 Change, % 9M 2019 9M 2018 Change, % Revenue ($m) 609 647 (5.9%) 1,767 1,345 31.4% Cost of sales ($m) (234) (239) (2.1%) (695) (593) 17.2% G&A expenses ($m) (19) (19) 0.0% (53) (62) (14.5%) Distribution expenses ($m) (6) (4) 50.0% (18) (9
Slide 18: Group's financial summary
Group’s financial summary Summary Income Statement Summary Cash Flow Statement $ million, unless otherwise stated Q3 2019 Q2 2019 9M 2019 9M 2018 $ million Q3 2019 Q2 2019 9M 2019 9M 2018 Revenue 2,111 2,177 6,319 6,495 Profit before Financing and Taxation 645 616 1,801 1,999 Cash Generated from Ope
Slide 19: Severstal. You can identify forward-looking statements by terms such as “expect”, “believe”, “estimate”, “intend”,
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