Eregli Demir Ve Celik Fabrikalari T.a.s. · BIST:EREGL

Eregli Demir Ve Celik Fabrikalari T.a.s — Ereğli Demir ve Çelik Fabrikaları T.A.Ş. (Erdemir) — Q1 2010 Earnings Presentation

28 slides from Eregli Demir Ve Celik Fabrikalari T.a.s's earnings presentation, May 6, 2010

  1. Slide 1: Erdemir Group 2010 3 Months Consolidated Financial Results

    Erdemir Groupp 2010 3 Months Consolidated Financial Results 06 May 2010

  2. Slide 2: Disclaimer

    DISCLAIMER Ereğli ğ Demir Ç Çelik Fabrikaları T.A.Ş. Ş ((Erdemir)) may, y, when necessary, y, make written or verbal announcements about forward-looking information, expectations, estimates, targets, assessments and opinions. Erdemir has made the necessary arrangements about the amounts and results

  3. Slide 3: Agenda

    Agenda 2010 Market Overview 1Q 2010 Results 3 / 27

  4. Slide 4: EU27 crude steel production and HRC price

    20% 40% 60% -60% -40% -20% 0% YoY Mar-03 Jul-03 SOURCE: * WSA Nov-03 Mar-04 Jul-04 ** BLOOMBERG Nov-04 Mar-05 Jul-05 Nov-05 Mar-06 Jul-06 Nov-06 Mar-07 Jul-07 Nov-07 Mar-08 Jul-08 Nov-08 Mar-09 Jul-09 Nov-09 4 / 27 Mar-10 EU27 CRUDE STEEL PRODUCTION ( YoY % )* 0 200 400 600 800 1000 1200 1400 Mar-03

  5. Slide 5: USA crude steel production and HRC price

    20% 40% 60% 80% -60% -40% -20% 0% Mar-03 M Jul-03 J SOURCE: * WSA Nov-03 Mar-04 M Jul-04 J ** BLOOMBERG Nov-04 Mar-05 M Jul-05 J Nov-05 Mar-06 M Jul-06 J since November 2009 Nov-06 Mar-07 M Jul-07 J Nov-07 Mar-08 M Jul-08 J Nov-08 Mar-09 M Jul-09 J Nov-09 USA CRUDE STEEL PRODUCTION ( YoY % )* 5 / 27

  6. Slide 6: CIS crude steel production and export HRC price

    -50% 0% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% Mar-03 M Jul-03 J SOURCE: * WSA Nov-03 N Mar-04 M Jul-04 J ** BLOOMBERG Nov-04 N Mar-05 M Jul-05 J Nov-05 N Mar-06 M Jul-06 J Nov-06 N Mar-07 M Jul-07 J Nov-07 N Mar-08 M Jul-08 J Nov-08 N Mar-09 M Jul-09 J Nov-09 N 6 / 27 Mar-10 M CIS CRUDE STE

  7. Slide 7: HRC prices are ramping up

    HRC prices are ramping up CHINA 2ND QUALITY COKING COAL SPOT EXPORT PRICE CHINA PORT FINE ORE PRICE CFR USD/TON USD/TON 800 250 700 200 600 500 150 400 300 100 200 50 100 0 0 01.2007 04.2007 07.2007 10.2007 01.2008 04.2008 07.2008 10.2008 01.2009 04.2009 07.2009 10.2009 01.2010 04.2010 01.2007 04.20

  8. Slide 8: Turkish steel consumption increased by 97% in 1Q 2010

    Turkish steel consumption increased by 97% in 1Q 2010 PRODUCTION ( 000 TONS ) 26.684 5.917 5.971 26.067 25.119 23.359 928 4.257 4.543 1.275 19.593 4.406 4.122 3.768 21.810 22.141 4.989 4.696 19.237 20.713 15 825 15.825 2005 2006 2007 2008 2009 2009 3M 2010 3M L Long Fl t Flat Total Long Flat Total C

  9. Slide 9: Turkish Steel Market (cont'd)

    Turkish Steel Market ( cont’d ) IRON AND STEEL PRODUCT EXPORTS ( 000 TONS ) 16.806 4.327 15.865 94 28 13.795 218 12.668 1.368 468 35 1.648 356 0,1 2.407 1.244 2.208 9 494 9.494 1 394 1.394 1.625 2 464 2.464 0,2 1.630 0,1 1.131 258 1.902 112 12.937 3.475 10.890 11.791 9 645 9.645 2.095 6.460 2005 200

  10. Slide 10: Automotive production and sales increased by 81% and 40% YoY

    Automotive production and sales increased by 81% and 40% respectively in 1Q 2010 YoY AUTOMOTIVE PRODUCTION (000 UNITS) AUTOMOTIVE SALES (000 UNITS) 310 %40 222 %81 203 258 122 143 100 107 2009 1Q 2010 1Q 2009 1Q 2010 1Q Domestic Sales Export AUTOMOTIVE CAPACITY UTILIZATION RATIO (%) 70 39 2009 1Q 20

  11. Slide 11: White goods domestic sales and production increased by 38% and 33% YoY

    White goods domestic sales and production increased by 38% and 33% respectively in 1Q 2010 YoY WHITE GOODS DOMESTIC SALES WHITE GOODS EXPORTS (000 UNITS) (000 UNITS) %24 %38 1.106 2.880 2.326 804 2009 1Q 2010 1Q 2009 1Q 2010 1Q WHITE GOODS PRODUCTION (000 UNITS) %33 4.080 3.066 2009 1Q 2010 1Q SOURC

  12. Slide 12: After the contraction in 2009, growth is expected in all markets in 2010

    After the contraction in 2009, growth is expected in all markets in 2010 SECTOR DEVELOPMENT INDEX (2000:100) (2000 100) 350 305 0 305,0 300 282,2 285,0 271,6 271,1 269,2 250 216,3 208,8 195,8 200 189,4 199,9 171,2 191,2 164,4 184,2 182,8 150 164 8 164,8 158,4 153,8 149,9 146,3 141,7 133,7 127,3 100

  13. Slide 13: Sales prices are going up in 2010

    Sales prices are going up in 2010 Çin 2.Kalite Kok Kömürü Spot Ç p İhraç HRC PRICES ( USD/Ton )ç Fiyatı y ( USD/TON ) 1.400 As of April 2010, CIS HRC export 1.200 price is 715 USD, China HRC spot 1.000 p price is 585 USD,, US exportp HRC 800 price is 645 USD. The prices were 508 600 USD, 564 USD, 50

  14. Slide 14: Agenda

    Agenda 2010 Market Overview 1Q 2010 Results 14 / 27

  15. Slide 15: Erdemir Group Key Figures

    ERDEMİR GROUP KEY FIGURES 2010 1Q 2009 1Q 2009 2008 Li id Steel Liquid St l Production P d ti (000 T Tons)) 1 895 1.895 1 590 1.590 6 619 6.619 6 122 6.122 Slab Production 1.362 (1) (000 Tons) 986 4.569 3.995 Flat Steel Production 1.322 (2) ((000 Tons)) 1.174 4.812 4.182 Long Steel Production (000 T

  16. Slide 16: Liquid steel production increased by 19% YoY

    Liquid steel production increased by 19% in 1Q 2010 YoY LIQUID STEEL PRODUCTION ( 000 TONS ) 6.619 6.122 5 486 5.486 1.906 1.895 1 590 1.590 2009 2010 2009 2009 2008 2007 4Q 1Q 16 / 27

  17. Slide 17: Production was 1.8 million tons

    Production in 1Q 2010 was 1,8 million tons PRODUCTION VOLUMES ( 000 TONS ) 6 681 6.681 6.132 5.858 1.869 Long 1.950 1.652 Long Long 1.590 Cold 1.486 1.632 Cold Cold 1.713 1.795 1.736 451 473 562 3.222 2.696 2.574 430 335 299 832 987 875 Hot Hot Hot 2009 2010 2009 2009 2008 2007 4Q 1Q Hot Cold Long T

  18. Slide 18: HRC sales volume increased by 7% YoY

    HRC sales volume increased by 7% in 1Q 2010 YoY SALES VOLUME ( 000 TONS ) 6 986 6.986 5.895 5.947 1.858 Long 1 652 1.652 1.963 Long 1.665 Long Cold 1.688 1.471 Cold Cold 1.833 1.685 1.725 473 3.464 451 559 2.607 451 321 2.461 326 909 913 840 Hot Hot Hot 2009 2010 2009 2009 2008 2007 4Q 1Q HRC CRC Lo

  19. Slide 19: Domestic sales revenue increased by 121% YoY

    Domestic sales revenue increased by 121% in 1Q 2010 YoY NET SALES REVENUE ( MILLION TL ) 6.800 1.218 5.236 5.357 763 1.217 5.583 4.594 1.629 1.582 4.019 215 162 1.066 1.414 1.420 424 642 2009 2010 2009 2009 2008 2007 4Q 1Q Domestic Export Total 19 / 27

  20. Slide 20: Sales to automotive/components and household appliances increased

    Sales to automotive/components and household appliances increased in 1Q 2010 FLAT STEEL DOMESTIC SALES BREAKDOWN ( %) FLAT STEEL EXPORTS BREAKDOWN ( %) 10% 1% 5% 1% 7% 2% 6% 34% 5% 6% 6% 93% 7% 9% 58% 20% 16% 14% Pipe and Profile Industry Steel Services Centers EU Brazil Traders Automotive and Compo

  21. Slide 21: Average flat and long steel prices in 1Q 2010

    In 1Q 2010, Erdemir Group average flat and long steel prices were 639 USD/ton and 496 USD/ton respectively USD/TON Ereğli Flat Sales Price Ereğli Flat Cost of Sales Mar-08 Jul-08 Oct-08 Mar-09 Jul-09 Oct-09 Mar-10 Jan-08 Feb-08 Jun-08 Sep-08 Dec-08 Jan-09 Feb-09 Jun-09 Sep-09 Dec-09 Jan-10 Feb-10 No

  22. Slide 22: Net profit increased by 202% YoY

    Net profit increased by 202% in 1Q 2010 YoY EBITDA ( MILLION TL ) 1.200 1.097 25,0% 1.000 18,2% 18,3% 775 20,5% 20,0% 800 15 0% 15,0% 600 12,9% 382 11,4% 10,0% 400 296 290 7,3% 200 137 5,0% 0 0,0% 2009 2010 2009 2009 2008 2007 4Q 1Q EBITDA EBITDA Margin NET PROFIT/(LOSS) ( MILLION TL ) 800 704 20,0%

  23. Slide 23: Total borrowings decreased by 12% since 2008

    Total borrowings decreased by 12% in 1Q 2010 since 2008 BORROWINGS ( MILLION USD ) BORROWINGS MATURITY PROFILE ( MILLION USD ) 2 998 2.998 ST Portion of LT Debt 2.768 Short-Term Debt 2.635 1.516 600 Long-Term Debt 537 Liquid Funds 2.140 20 1.055 347 907 1.468 264 27 72 1.076 313 2.211 48 417 399 1.5

  24. Slide 24: Lowest level of fixed costs was attained

    Lowest level of fixed costs was attained in 1Q 2010 ( MILLION USD ) Total = 1.418 Total = 1.276 143 107 Total = 1.059 112 109 98 88 93 80 141 113 144 111 123 265 276 236 244 217 227 194 205 149 139 136 147 129 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2007 2008 2009 2010 Fixed Cost Variable Cost 24 / 2

  25. Slide 25: Fixed and variable costs of flat products decreased in 2010

    Fixed and variable costs of flat products decreased in 2010 FLAT PRODUCTS ( USD/TON ) 207 156 154 151 136 138 135 131 90 94 85 78 86 99 88 83 90 70 4.871 66 72 4.871 73 75 74 59 63 61 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 4.816 4.816 2007 2008 2009 2010 Fixed ed Cost Per e Ton o Variable a ab e Cos

  26. Slide 26: Capital expenditures of 148 million USD planned for 2010

    Capital expenditures of 148 million USD is planned for 2010 ( M USD ) 940 116 694 673 562 130 37 362 824 312 543 524 141 148 151 245 332 12 12 56 129 136 94 67 2002 - 2005 2006 2007 2008 2009 2010 2011 2012 - After İ k d İskenderun I t t Investments E ğli Investments Ereğli I t t As of 1Q 2010, capi

  27. Slide 27: Number of employees decreased about 13% since 2007

    Number of employees decreased about 13% since 2007 due to voluntary redundancies and retirements NUMBER OF EMPLOYEES 15.063 14.598 14.637 14.056 13.161 13.157 2005 2006 2007 2008 2009 2010 March 27 / 27

  28. Slide 28: Q&A

    Q&A

Ereğli Demir ve Çelik Fabrikaları T.A.Ş. (Erdemir) — Q1 2010 Earnings Presentation on 6ix