Acerinox Sa · BME:ACX
Acerinox Sa — FY2018 Earnings Presentation
35 slides from Acerinox Sa's earnings presentation, Feb 28, 2019
Slide 1: 2018 Business Year Results Presentation
2018 BUSINESS YEAR RESULTS PRESENTATION 28 FEBRUARY 2019
Slide 2: Disclaimer
2018 BUSINESS YEAR RESULTS PRESENTATION 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 sta
Slide 3: Accident Rate Evolution
2018 BUSINESS YEAR RESULTS PRESENTATION A C C I D E N T R AT E E V O L U T I O N 9.5 Target: zero accidents 7.5 5.4 5.8 5.0 3.3 3.3 2.6 2.2 2010 2011 2012 2013 2014 2015 2016 2017 2018 • Accident rate = total no. injuries and illnesses * 200,000 / no. worked hours 3
Slide 4: 2018: Main Financial Figures
2018 BUSINESS YEAR RESULTS PRESENTATION 2018: MAIN FINANCIAL FIGURES 2018 2017 Variation Solid results in a very Net Sales 5,011 4,627 8% volatile environment EBITDA 480 489 -2% Results before Taxes and 310 299 4% Quick reaction to Minorities Results after Taxes and Minorities 237 234 1% market corr
Slide 5: Fourth Quarter Performance
2018 BUSINESS YEAR RESULTS PRESENTATION FOURTH QUARTER PERFORMANCE Q4 MARKET HIGHLIGHTS Q4 ACERINOX HIGHLIGHTS X • Strong apparent demand correction • Robust margins in US X• Weak margins in Europe and Asia X • Downtrend in raw material prices X• Inventory adjustment of €22 million X • High invent
Slide 6: Fourth Quarter Performance
2018 BUSINESS YEAR RESULTS PRESENTATION FOURTH QUARTER PERFORMANCE MELTING PRODUCTION EBITDA 180 668 151 154 639 160 617 140 118 Thousand tons 516 120 100 Million € 80 22 Inventory adjustment 60 40 58 20 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FREE CASH FLOW NET FINANCIAL DEBT (Before dividends) 114 114 667 666 6
Slide 7: Full Year Performance
2018 BUSINESS YEAR RESULTS PRESENTATION FULL YEAR PERFORMANCE FY MARKET HIGHLIGHTS FY ACERINOX HIGHLIGHTS X • Market volatility • NAS strong performance X • Asian overcapacity X• Tough environment in Bahru X • Input cost pressures Stainless • Reduction of imports in the US X • Acerinox Europa and
Slide 8: Full Year Performance
2018 BUSINESS YEAR RESULTS PRESENTATION FULL YEAR PERFORMANCE MELTING PRODUCTION EBITDA 2,519 2,475 489 22 Inventory adjustment Thousand tons 2,440 329 Million € 286 2,320 480 15 16 17 18 15 16 17 18 FREE CASH FLOW NET FINANCIAL DEBT (Before dividends) 711 181 171 620 609 552 Million € 111 Million €
Slide 9: Full Year Performance: EBITDA
2018 BUSINESS YEAR RESULTS PRESENTATION FULL YEAR PERFORMANCE EBITDA (22) (14) 70 (65) 22 489 480 EBITDA Inventory Price increase of Sales EBITDA Currency Business 2017 adjustment energy and volume 2018 actions to NRV consumables 9
Slide 10: Full Year Performance: Cash Flow
2018 BUSINESS YEAR RESULTS PRESENTATION FULL YEAR PERFORMANCE CASH FLOW (87) (66) 480 (155) 326 (128) 171 43 Working Financial EBITDA charges Operating CAPEX FCF Dividends CF after Capital Tax & Cash Flow & treasury dividends other shares 10
Slide 11: Full Year Performance
2018 BUSINESS YEAR RESULTS PRESENTATION FULL YEAR PERFORMANCE NET FINANCIAL DEBT / EBITDA NET FINANCIAL EXPENSES 2.48 44 1.88 1.25 30 1.15 19 2 2015 2016 2017 2018 2015 2016 2017 2018 OPERATING EXPENSES PERSONNEL +1% +1% 629 634 392 396 2017 2018 2017 2018 11
Slide 12: Restructuring of Bahru Stainless
2018 BUSINESS YEAR RESULTS PRESENTATION R E S T R U C T U R I N G O F B A H R U S TA I N L E S S NON CASH MEASURES: • Impairment in the investment value of the Holding Company: EUR 155 mill • Capital Increase: USD 332 mill. NO IMPACT IN THE CONSOLIDATED RESULTS 12
Slide 13: Capital Allocation
2018 BUSINESS YEAR RESULTS PRESENTATION C A P I TA L A L L O C AT I O N CAPEX RETURN TO SHAREHOLDERS 173 173 (*) Scrip dividend 0.50 144 0.44 0.45 0.45 94 2015 2016 2017 2018 2016 (*) 2017 2018 2019 CAPEX IN PROGRESS: • Coil build up line - NAS DIVIDEND INCREASE 11% • Ladle furnace - Acerinox SHARE
Slide 14: Excellence Plan V
2018 BUSINESS YEAR RESULTS PRESENTATION EXCELLENCE PLAN V 2017-2018 EXCELLENCE PLAN V Focused on operational excellence Target : 50 million EUR Achieved: 55%, 27 million EUR Best practices in each business unit 5 chapters: Operations, Working Capital, Management and control tool Personnel, Com
Slide 15: The Next Step: Excellence 360º
2018 BUSINESS YEAR RESULTS PRESENTATION THE NEXT STEP: EXCELLENCE 360º 15
Slide 16: Excellence 360º
2018 BUSINESS YEAR RESULTS PRESENTATION EXCELLENCE 360º 16
Slide 17: Excellence 360º: Roadmap
2018 BUSINESS YEAR RESULTS PRESENTATION 125 MM€ 100% EXCELLENCE 360º: ROADMAP Excel Plan VI integrated with the Excellence 360º 112 MM€ 89% 86 MM€ 69% 59 MM€ 47% 24 MM€ 19% 360º 2019 2020 2021 2022 2023 EXCELLENCE 360º TARGET = EUR125 MILLION IN 2023 (RECURRENT) 17
Slide 18: Outlook
2018 BUSINESS YEAR RESULTS PRESENTATION OUTLOOK Safeguard measures in Europe are working properly, Imports fell in January Inventories in Europe at Q1 EBITDA IS normal levels EXPECTED TO Inventories in US will be normal by the end of the BE HIGHER quarter THAN IN Q4 18 These situation, toget
Slide 19: Thank You Q&A
2018 BUSINESS YEAR RESULTS PRESENTATION THANK YOU Q&A
Slide 20: Appendix
2018 BUSINESS YEAR RESULTS PRESENTATION APPENDIX Acerinox Europa AP Line NAS BA Line 20
Slide 21: Acerinox: Global Player
2018 BUSINESS YEAR RESULTS PRESENTATION A C E R I N O X : G L O B A L P L AY E R • Spanish multinational company • Fully dedicated to stainless steel • Net sales: EUR 5,011 million (2018) • Among largest producers in the world with 3.5 million tons of melting capacity • 6 factories in 4 continents •
Slide 22: History
2018 BUSINESS YEAR RESULTS PRESENTATION H I S T O RY 1970, incorporation of ACERINOX, S.A.(Spain) 1 9 9 0 , i n c o r p o r a t i o n o f N O RT H A M E R I C A N S TA I N L E S S ( U S A ) 100% Acerinox S.A. Acerinox, S.A. 76% 2 0 0 2 , i n c o r p o r a t i o n o f C O L U M B U S S TA I N L E S S
Slide 23: Acerinox Principles and Values
2018 BUSINESS YEAR RESULTS PRESENTATION A C E R I N O X P R I N C I P L E S A N D VA L U E S 23
Slide 24: Acerinox Production Capacity
2018 BUSINESS YEAR RESULTS PRESENTATION A C E R I N O X P R O D U C T I O N C A PA C I T Y Million mt (*) Once it’s completed ACERINOX EUROPA FULLY INTEGRATED PLANT Melting 1.1 Hot Rolling 0.9 Cold Rolling 0.7 NORTH AMERICAN STAINLESS Long Prod. 0.2 FULLY INTEGRATED PLANT Melting 1.4 Hot Rolling 1.2
Slide 25: Stainless Steel World Production
2018 BUSINESS YEAR RESULTS PRESENTATION S TA I N L E S S S T E E L W O R L D P R O D U C T I O N 55,000 World production of 50,000 Stainless Steel in 45,000 2018e: 40,000 50.7 million mt 35,000 (+5.5% over 2017) 30,000 25,000 Compound annual growth rate 1950 – 2018e: 20,000 15,000 + 5.9% 10,000 5,00
Slide 26: Stainless Steel World Production
2018 BUSINESS YEAR RESULTS PRESENTATION S TA I N L E S S S T E E L W O R L D P R O D U C T I O N China accounts for 52% of world production in 2018 50 40 30 Others Japan 20 India China 10 USA Europe 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 26
Slide 27: Raw Material Prices
2018 BUSINESS YEAR RESULTS PRESENTATION R AW M AT E R I A L P R I C E S NICKEL Years 2017 - 2019, up to February 25 m o n t h s 20,000 p r i c e : c a s h / t h r e e 15,000 U S D / m t S o u r c e : 10,000 A v e r a g e L M E 5,000 J F M A M J J A S O N D J F M A M J Jl A S O N D J F FERROCHROME 16
Slide 28: Stainless Steel Cold Rolled Sheet Prices
2018 BUSINESS YEAR RESULTS PRESENTATION S TA I N L E S S S T E E L C O L D R O L L E D SHEET PRICES AISI 304 2.0 MM USD/mt, final price, alloy surcharge included 3300 3100 2900 2700 2612 U S A 2500 2300 2295 N O R T H E R N EUROPE 2100 1990 A S I A 1900 S o u r c e : 1700 C R U 1500 J F M A M J JL A
Slide 29: Stainless Steel Inventories
2018 BUSINESS YEAR RESULTS PRESENTATION S TA I N L E S S S T E E L I N V E N T O R I E S Thousand mt 100 80 Days of stock A v e r a g e 2 0 1 4 - N o v 2 0 1 8 7 6 , 5 5 3 m t 80 70 S o u r c e : E H V 60 G e r m a n y 60 40 50 INVENTORIES OF 20 COLD-ROLLED 0 J F M A M J JL A S O N D J F M A M J JL
Slide 30: Production: Melting Shop, Hot Rolling, Cold Rolling
2018 BUSINESS YEAR RESULTS PRESENTATION PRODUCTION Thousand mt 617 634 652 637 611 668 605 615 631 668 639 617 601 611 562 558 516 546 575 516 M E LT I N G S H O P -3.1% over 12M 2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2016 2017 2018 542 552 563 572 547 593 535 542
Slide 31: Balance Sheet
2018 BUSINESS YEAR RESULTS PRESENTATION BALANCE SHEET ASSETS LIABILITIES Million € 2018 2017 Variation Million € 2018 2017 Variation Non-current assets 2,133.77 2,147.62 -0.6% Equity 2,119.30 1,970.30 7.6% Current assets 2,473.82 2,256.39 9.6% Non-current liabilities 1,226.22 1,149.38 6.7% - Invento
Slide 32: Working Capital
2018 BUSINESS YEAR RESULTS PRESENTATION W O R K I N G C A P I TA L 2,000 1,500 1,000 500 Million € 0 -500 -1,000 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 dic-14 Dec-15 Dec-16 Dec-17 Dec-18 Inventories Trade Debtors Trade Creditors Working Capital 32
Slide 33: Net Financial Debt
2018 BUSINESS YEAR RESULTS PRESENTATION NET FINANCIAL DEBT 1,200 1,000 800 Million € 600 1,075 1,084 939 887 400 711 582 616 620 609 552 529 200 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Gearing 46.5% 61.3% 56.3% 47.1% 33.9% 34.1% 33.2% 35.1% 28.6% 30.9% 26.0% NFD / EBITDA 5.48 -5.63
Slide 34: Cash Flow
2018 BUSINESS YEAR RESULTS PRESENTATION CASH FLOW Jan - Mar Apr - Jun Jul - Sep Oct-Dec Jan - Dec Jan - Dec Millones EUR 2018 2018 2018 2018 2018 2017 EBITDA 118 151 154 58 480 489 Changes in working capital -103 17 -102 101 -87 1 Changes in operating working capital -106 9 -95 118 -74 16 - Inventor
Slide 35: Cash Generation
2018 BUSINESS YEAR RESULTS PRESENTATION C A S H G E N E R AT I O N 2 0 0 8 - 2 0 1 8 Cash generation for: investments shareholder remuneration debt reduction Million EUR Cash generation 3.422 CAPEX -1.927 UNIQUE CASE Return to shareholders -1.124 Net debt reduction 371 35