Aperam S.A. · EURONEXT:APAM
Aperam — BofAML Global Metals, Mining & Steel Conference 2018
33 slides from Aperam's conference presentation, May 15, 2018
Slide 1: BofAML Global Metals, Mining & Steel Conference
BofAML Global Metals, Mining & Steel Conference May 15 & 16, 2018 Timoteo Di Maulo - Chief Executive Officer 1
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This document may contain forward-looking information and statements about Aperam and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with re
Slide 3: Aperam's investment case
Aperam’s investment case Being a sustainably safe and profitable company Aperam’s investment case Solid execution of self Cost Leading footprint Cash generation and help strategy financial discipline Strong cash generation Optimized and sustainable through the cycle Leadership Journey® European asse
Slide 4: Aperam's fundamentals
BofAML Global Metals, Mining & Steel Conference Aperam's fundamentals
Slide 5: Footprint and productivity breakthrough
Aperam’s fundamentals Footprint and productivity breakthrough Aperam downstream rationalization in EU from 29 tools to 17 tools Aperam productivity evolution, average 10 500 600 GENK ISBERGUES GUEUGNON 10 000 500 HA&P HAP 3 HAP 3 RD 79 lines 9 500 400 CR mills CR 4 CR 2 CR 3 CR 1 CR 2 CR 2 CR 3 CR 4
Slide 6: Unique asset base in South America well adapted to the market
Aperam’s fundamentals Unique asset base in South America well adapted to the market South American Footprint Upstream integration Blast furnace fuel needs fully covered Caracas (Venezuela) through cost competitive and Bio Energia environment friendly captive charcoal Colombia from our cultivated for
Slide 7: Products and services differentiation
Aperam’s fundamentals Products and services differentiation Services & Solutions division Services & Solutions adjusted EBITDA per shipments (EUR/t) May 11 May 12 May 13 May 14 May 15 May 16 May 17 Sep 11 Sep 12 Sep 13 Sep 14 Sep 15 Sep 16 Sep 17 Jan 11 Jan 12 Jan 13 Jan 14 Jan 15 Jan 16 Jan 17 120
Slide 8: Strong cash generator through the cycle
Aperam’s fundamentals Strong cash generator through the cycle Cash-flow from operations (EUR million) Cash utilization in 2017 (EUR million) 400 377 374 164 Sustainability (Capex) 354 300 200 Stable and growing 212 106 184 dividend 144 152 100 Share Buyback 90 Program 0 Others (incl changes 2011 201
Slide 9: Environment and markets
BofAML Global Metals, Mining & Steel Conference Environment and markets
Slide 10: Stainless steel prices
Environment and markets Stainless steel prices Nickel - LME Cash Chinese versus European CR 304 2B 2mm coil transaction price* (USD/t) (USD/t) 35.000 5000 30.000 4500 4000 25.000 3500 20.000 3000 15.000 2500 10.000 2000 5.000 1500 Chinese prices European prices European Stainless steel prices contin
Slide 11: Diminishing raw material advantage of Chinese players
Environment and markets Diminishing raw material advantage of Chinese players Price equivalent of Nickel contained in NPI vs. LME Nickel price Chinese reduced NPI production leading to increased Ferro- (USD/t) Nickel Imports (in kt) 21000 500 19000 400 17000 15000 300 13000 11000 200 9000 7000 100 5
Slide 12: Stainless steel demand in Europe
Environment and markets Stainless steel demand in Europe Stocks of CR stainless steel in Germany – quarterly average European stainless steel demand (in number of days) (in million tonnes - slab equivalent) 6,0 80 5,0 60 4,0 3,0 40 2,0 20 1,0 0,0 0 Stainless steel demand Pre-crisis level (2007) Euro
Slide 13: Brazilian opportunities
Environment and markets Brazilian opportunities Stainless steel Brazilian apparent consumption Stainless steel flat stainless steel consumption per capita (in million tonnes – slab equivalent) (kg/year) 0,5 9 0,4 8 7 0,3 6 5 0,2 4 3 0,1 2 1 0,0 0 South America USA Western Europe China Stainless stee
Slide 14: Aperam's performance
BofAML Global Metals, Mining & Steel Conference Aperam’s performance
Slide 15: The Transformation Program
Aperam’s performance The Transformation Program Annualized EBITDA cumulated gains (EUR million) Key pillars of the Phase 3 Transformation Program Accelerate productivity gains by implementation New of latest technology and breakthough in 150 technologies automation with development of robotics, sens
Slide 16: Quarter on Quarter evolution of profitability
Aperam’s performance Quarter on Quarter evolution of profitability Adj. EBITDA evolution[1] (EUR million) Net Income evolution (EUR million) 13,4% 13,4% 11,2% 11,7% 11,6% 1,22 1,13 1,00 0,99 0,65 160 154 130 141 103 115 88 85 76 53 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q1 2017 Q2 2017 Q3 2017 Q4 2
Slide 17: First quarter operating performance
Aperam’s performance First quarter operating performance Shipments (‘000t) Q1 2018 EBITDA per division (EUR million) [1] 517 495 486 478 119 477 111 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Adjusted EBITDA[2] (EUR million) 160 154 141 130 115 21 21 11 14 Q4 2017 Q1 2018 Q4 2017 Q1 2018 Q4 2017 Q1 201
Slide 18: Strong balance sheet with significantly improved financing costs
Aperam’s performance Strong balance sheet with significantly improved financing costs Net interest & financing costs (EUR million) Aperam debt reduction / restructuring actions Strong decrease of net interest and financing costs, especially cash interest costs, thanks to strong cash flows and debt r
Slide 19: Solid and continuously improving balance sheet
Aperam’s performance Solid and continuously improving balance sheet Net debt and gearing evolution Aperam Net Debt / LTM Ebitda evolution, x (EUR million) 29% 26% 26% 3,68 23% 20% 2,58 14% 2,37 2,28 799 6% 679 1,08 619 501 442 0,64 290 -2% -1% 0,32 147 -63 -32 -0,11 -0,06 2010 2011 2012 2013 2014 20
Slide 20: Aperam's value strategy
BofAML Global Metals, Mining & Steel Conference Aperam’s value strategy: A customer driven company focused on its self-help story
Slide 21: The Transformation Program
Aperam’s value strategy The Transformation Program Aperam Missions Aperam continuously reinforced Leadership Journey® Total target gains 1 Be a sustainably safe company USD 1 2011-2013: LJ phase 1 - Restructuring 350m 2 USD Deliver best in class profitability and returns 2 2014-2017: LJ phase 2 – As
Slide 22: Reinforcing our industry-leading asset portfolio
Aperam’s value strategy Reinforcing our industry-leading asset portfolio Proforma Revenue by division 1, 2 (FY17) Europe ∙ Second largest stainless steel producer Stainless & in Europe Electrical Steel ∙ Largest stainless steel producer in South America Brazil The enlarged Alloys & Specialities divi
Slide 23: VDM Metals: a transformative acquisition
Aperam’s value strategy VDM Metals: a transformative acquisition Structure • 100% of VDM Metals Holding GmbH and related entities • Total Enterprise Value of €596m incl. €123m of pension liabilities, €35m net financial debt, purchase price €438m • Equivalent to 7.8x EV/EBITDA before synergies, based
Slide 24: Specialty alloys is a growing and premium niche segment
Aperam’s value strategy Specialty alloys is a growing and premium niche segment ∙ Higher growth end applications ∙ R&D intensive industry to offer ∙ Less exposed to commodity ∙ “Kilogram” market: unique products innovative solutions and anticipate cycles as cost of raw materials designed to answer p
Slide 25: A global specialty alloys producer
Aperam’s value strategy A global specialty alloys producer Sales by region (FY17 PF1) Rescal Altena Wire drawing Amilly ! Unna Melting, Forging, Rod & Bar, Plate Werdohl Rod & Bar Magnetic parts Strip, Wire Duisburg Siegen Imphy Slab Rolling Hot Rolling, Plate Meltshop, Wire mill, Cold rolling, Bars
Slide 26: Investment project
Aperam’s value strategy Investment project Genk cold rolling and annealing line • On January 30, 2018, Aperam announced a new investment project in its Genk plant (Belgium) consisting in new Cold Rolling and Annealing and Pickling Line. • The investment project targets to further facilitate transfor
Slide 27: Leverage Aperam's unique position in Europe
Aperam’s value strategy Leverage Aperam’s unique position in Europe European stainless steel industry footprint after restructuring Key strengths of the European operations of Aperam Finishing line • The only integrated upstream Steel making Sourcing operations in the heart of Europe, with the best
Slide 28: Active mitigation of the Brazilian economic situation
Aperam’s value strategy Active mitigation of the Brazilian economic situation Key pillars of the mitigation plan in Brazil Aperam’s assets optimisation in South America • Ensure full utilisation rate with the best margin Product mix Geographical mix thanks to a wide range of products and Portfolio g
Slide 29: Sustainability is fully embedded in Aperam Strategy
Aperam’s value strategy Sustainability is fully embedded in Aperam Strategy Social Environment Governance Our People are our We provide the We lead by example greatest asset. “greenest steels” and and maintain constant Their Safety is our priority, constantly reduce our engagement with all our their
Slide 30: Aperam preserves its financial policy and strong credit profile
Aperam’s value strategy Aperam preserves its financial policy and strong credit profile while maximising the long-term growth and value accretion for shareholders Financial Policy 2018 Company Invest in sustaining and upgrading the company’s assets base to continuously CAPEX 2018 reaffirmed at susta
Slide 31: Q&A
BofAML Global Metals, Mining & Steel Conference Q&A
Slide 32: Brazilian protections against unfair market behaviour
Environment and markets Brazilian protections against unfair market behaviour Type of products Import duties status Anti-dumping status Normal import duties are 14% AD duties starting October 4th, 2013 for 5 years from 236 USD/t to 1,077 USD/t. The case involves CR 304 and 430, in thicknesses be
Slide 33: European Union measures since 2014
Environment and markets European Union measures since 2014 Anti-dumping development in Europe • On March 25, European Commission implemented provisional duties from 24-25% for China and 10-12% for Taiwan. “China and Taiwan have a structural Anti-dumping duties were applicable during this period with
Aperam — BofAML Global Metals, Mining & Steel Conference 2018 on 6ix