Severstal · RUS:CHMF
Severstal — Q1 2017 Earnings Presentation
22 slides from Severstal's earnings presentation, Apr 20, 2017
Slide 1: Q1 2017 Financial Results Presentation
Q1 2017 Financial Results Presentation 20 April 2017
Slide 2: Table of Contents
3 Q1 2017 Results Overview Table of Contents 7 Divisional Performance and Market Outlook 11 Financial Position 16 Appendices
Slide 3: Q1 2017 Results Overview
Q1 2017 Results Overview
Slide 4: Summary
Summary Q1 2017 Highlights: Group revenue was up 7.0% q/q at $1,767 million (Q4 2016: $1,651 million) due to higher prices in Q1 2017 which was partly offset by a decline in sales volumes at both the Russian Steel and Resources divisions. Group EBITDA* increased 9.5% q/q to $578 million (Q4 2016
Slide 5: Revenue Dynamics & Breakdown
Revenue Dynamics & Breakdown Q1 2017 Revenue: $1,767 m Q1 2017 Revenue: $1,767 m (Q4 2016: $1,651m; 7.0%) (Q1 2016: $1,097m; 61.1%) Group revenue increased q/q due to higher Group revenue increased y/y as a result of average USD selling prices despite a decline in higher realised prices and volumes
Slide 6: EBITDA Dynamics & Breakdown
EBITDA Dynamics & Breakdown Q1 2017 EBITDA: $578m Q1 2017 EBITDA: $578m (Q4 2016: $528m; 9.5%) (Q1 2016: $273; 111.7%) Group EBITDA increased q/q on the back of revenue Group EBITDA was up 111.7% as a result of topline growth mitigated by operating expenses increase expansion and RUB appreciation Q4
Slide 7: Divisional Performance and Market Outlook
Divisional Performance and Market Outlook
Slide 8: Severstal Russian Steel (RSD)
Severstal Russian Steel (RSD) Russian Steel product sales declined 9% q/q to 2.54 mln tonnes as after record sales volumes achieved in the EBITDA per tonne and average selling price previous quarter, the Company replenished inventories to normal levels and accumulated finished good EBITDA per tonn
Slide 9: Cost Control at Severstal Russian Steel
Cost Control at Severstal Russian Steel Cherepovets Steel Mill production cash cost of slab, $/t $600 $500 457 457 $400 432 418 409 Cherepovets 401 cash cost of 370 377 361 350 slab at market $300 327 323 price of raw Q1 17 non-integrated materials 259 cash cost of slab up 255 250 $73/t q/q $200 214
Slide 10: Severstal Resources
Severstal Resources In Q1 2017 coking coal concentrate sales volumes from Vorkutaugol remained in decline, Average selling price and cash cost per tonne down 11% q/q to 0.71 mln tonnes (Q4 2016: 0.80 mln tonnes) impacted by scheduled long- Cost per tonne (US$/t) Average Selling Price (US$/t)* wall
Slide 11: Severstal Financial Position
Severstal Financial Position Achieve more together
Slide 12: Cash Flow and Net Working Capital
Cash Flow and Net Working Capital Q1 2017 Highlights: Cash Flow dynamics, Solid liquidity position of $1,939m in cash and cash equivalents 31 Dec 2016 to 31 Mar 2017 Operating cash flow of $190m* in Q1 17 715 Q1 17 CAPEX of $138m, 17.4% ;lower q/q (Q4 16: $167m) 190 Free cash flow of $70m on
Slide 13: Robust Liquidity and Sustainable Leverage
Robust Liquidity and Sustainable Leverage At the end of Q1 2017, cash and cash equivalents totaled $1,939 million (Q4 2016: $1,154 million) which primarily reflects the net effect from the bond issue. In February Total Short-term Debt to be Repaid of $1,195m* 2017 Severstal issued Convertible Bond
Slide 14: Debt Structure
Debt Structure As at 31.03.2017 the debt structure was dominated by public debt almost in full and the US dollar (99.5% of total). Debt Maturity Schedule*, $m 880 645 701 549 1 1 2017 2018 2019 2020 2021 2022+ Notes: Debt represents the principal amount of debt. Debt for 2017 represents amount of de
Slide 15: Market Outlook
Market Outlook Global: Steel demand in the world is expected to increase by approximately 1% in 2017 almost in all countries. Chinese steel demand could be flat y/y. The steel market balance in China is supported by supply restrictions for environmental reasons and policy of capacity closures whic
Slide 16: Appendices
Appendices
Slide 17: Summary Income Statement
Summary Income Statement $ million, unless otherwise stated Q1 2017 Q4 2016 Q1 2017 Q1 2016 Revenue 1,767 1,651 1,767 1,097 COGS (1,046) (998) (1,046) (715) EBITDA 578 528 578 273 EBITDA margin, % 32.7% 32.0% 32.7% 24.9% Profit from operations 476 435 476 196 Operating margin, % 26.9% 26.3% 26.9% 17
Slide 18: Q1 2017 Revenue Breakdown by Region
Q1 2017 Revenue Breakdown by Region Severstal Group Q1 2017 revenue Severstal Russian Steel Q1 2017 revenue breakdown by region breakdown by region Other 8% 9% Other 3% Asia 3% Asia 9% Middle East 7% Middle East 12% Europe 16% Europe 59% Russia 64% Russia 5% Americas 5% Americas Severstal Resources
Slide 19: Q1 2017 Divisional Results
Q1 2017 Divisional Results Severstal Resources Q1 2017 Q4 2016 Change, % Q1 2017 Q1 2016 Change, % Revenue ($m) 424 348 21.8% 424 229 85.2% Cost of sales ($m) (182) (183) (0.5%) (182) (147) 23.8% G&A expenses ($m) (15) (12) 25.0% (15) (13) 15.4% Distribution expenses ($m) (35) (30) 16.7% (35) (26) 3
Slide 20: Summary Balance Sheet
Summary Balance Sheet $ million As at 31 March 2017 As at 31 December 2016 Cash and Cash Equivalents 1,939 1,154 Total Assets: 7,882 6,483 Current Assets 3,955 2,808 Non-current Assets 3,927 3,675 Total Liabilities: 4,264 3,442 Current Liabilities 2,400 1,796 Non-current Liabilities 1,864 1,646 Tota
Slide 21: Summary Cash Flow Statement
Summary Cash Flow Statement $ million Q1 2017 Q4 2016 Q1 2017 Q1 2016 Profit before Financing and Taxation 465 356 465 183 Cash Generated from Operations 283 632 283 111 Interest Paid (20) (45) (20) (31) Income Tax Paid (73) (46) (73) (14) Net cash from Operating Activities 190 541 190 66 Total cash
Slide 22: Disclaimer
Disclaimer These materials are confidential and have been prepared by PAO Severstal (Severstal) solely for your information and may not be reproduced, retransmitted or further distributed to any other person or published, in whole or in part, for any other purpose. These materials may contain projec