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) — H1 2015 Earnings Presentation

37 slides from Eregli Demir Ve Celik Fabrikalari T.a.s's earnings presentation, Aug 6, 2015

  1. Slide 1: Erdemir Group

    © ErdemirGroup ay FUTURE MADE OF STEEL | YEARS

  2. Slide 2: 2015 6 Months Consolidated Results

    2015 6 Months Consolidated Results 06 August 2015 2 06.08.2015

  3. Slide 3: Disclaimer

    DISCLAMIER Ereğli Demir Çelik Fabrikaları T.A.Ş. (Erdemir) may, when necessary, 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 of such inform

  4. Slide 4: 2015 Market Overview, 6M Results, Guidance

    ˃ 2015 Market Overview ˃ 2015 6M Results ˃ 2015 Guidance 4 06.08.2015

  5. Slide 5: Crude steel production and HRC prices by region

    -10% 15% 20% 25% 30% 35% 40% 10% -15% -10% 10% -5% 15% 0% 5% -5% 0% 5% 5 Jun-10 Jun-10 Sep-10 Sep-10 Dec-10 Dec-10 Mar-11 Mar-11 Jun-11 Jun-11 06.08.2015 Sep-11 Sep-11 Dec-11 Dec-11 Mar-12 Mar-12 Jun-12 Jun-12 Sep-12 Sep-12 Dec-12 Dec-12 Mar-13 Mar-13 Source : * Worldsteel ** Bloomberg Jun-13 Jun-13

  6. Slide 6: Iron ore, coking coal and scrap prices

    Iron ore price was 54 USD/ton as of July 2015 COKING COAL PRICES IRON ORE PRICES USD/TON (HCC PEAK DOWNS REGION FOB AUSTRALIA) (IODEX 62% FE CFR NORTH CHINA MID) USD/TON 160 160 150 140 140 130 120 120 100 110 100 80 90 60 80 70 40 03.2015 07.2013 09.2013 11.2013 01.2014 03.2014 05.2014 07.2014 09.2

  7. Slide 7: HRC prices

    July EU HRC sales price was 163 USD/ton lower than last year’s same month HRC PRICES ( USD/Ton ) 700 600 500 400 300 Nov-13 Nov-12 Nov-14 Mar-13 Mar-14 Mar-15 Sep-12 Sep-13 Sep-14 Jul-12 May-13 Jul-13 May-14 Jul-14 May-15 Jul-15 Jan-13 Jan-14 Jan-15 CIS EXPORT HRC BLACKSEA/BALTIC EU HRC CHINA SPOT H

  8. Slide 8: Billet sales prices are significantly lower in China

    Billet sales prices are significantly lower in China BILLET PRICES ( USD/Ton ) 600 550 500 450 400 350 300 Nov-12 Nov-13 Nov-14 Mar-13 Mar-14 Mar-15 Jul-12 May-13 Jul-13 May-14 Jul-14 May-15 Jul-15 Sep-12 Sep-13 Sep-14 Jan-13 Jan-14 Jan-15 BILLET CHINA EXPORT BILLET CIS EXPORT BLACKSEA/BALTIC BILLET

  9. Slide 9: Turkish production and consumption imbalance due to semi-product imports

    The imbalance between increase rates of Turkish production and consumption is due to semi-product imports. PRODUCTION ( 000 TONS ) 36.093 36.406 34.286 31.943 10.376 9.869 9.039 26.300 9.075 18.543 17.988 6.629 5.213 4.801 25.717 26.537 25.247 22.868 19.671 13.330 13.187 2014 2013 2012 2011 2010 201

  10. Slide 10: Turkish iron and steel product imports increased by 36%

    Turkish iron and steel product imports increased by 36% in 2015 6M YoY IRON AND STEEL PRODUCT EXPORTS ( 000 TONS ) 16.549 15.226 15.239 14.137 21 14.465 1 1.858 60 7.483 36 212 6.580 25 2.353 2.298 1.520 2.505 2.957 0,3 1.261 1.561 2.393 568 3.523 1.134 371 203 11.028 11.311 11.713 10.489 5.826 9.21

  11. Slide 11: Contraction in the construction sector is expected

    Contraction in the construction sector is expected CHANGES IN SECTOR DEVELOPMENT INDEX (% YoY) 40% 35% 33,4% 30% 32,6% 25% 22,1% 20% 20,0% 18,3% 15% 16,0% 12,0% 10% 7,4% 5,5% 11,3% 5,5% 7,1% 3,9% 2,7% 5% 11,2% 4,0% 6,8% 0% 1,0% 2,8% 0,0% 0,6% 1,4% 0,0% -5% -5,5% -10% 2010 2011 2012 2013 2014 2015 (e

  12. Slide 12: 2015 Market Overview, 6M Results, Guidance

    ˃ 2015 Market Overview ˃ 2015 6M Results ˃ 2015 Guidance 12 06.08.2015

  13. Slide 13: Erdemir Group Key Figures

    ERDEMİR GROUP KEY FIGURES 2015 6M 2014 6M 2014 2013 Liquid Steel Production (000 Tons) 4.462 4.134 8.693 8.447 (1) Slab Production (000 Tons) 3.723 3.525 7.363 6.865 (2) Flat Steel Production (000 Tons) 3.781 3.356 6.954 6.427 Long Steel Production (000 Tons) 636 545 1.153 1.356 Flat Steel Shipments

  14. Slide 14: Liquid steel production was 4.5 million tons

    Liquid steel production was 4,5 million tons in 2015 6M YoY LIQUID STEEL PRODUCTION ( 000 TONS ) 8.693 8.447 8.042 4.462 4.134 2.092 2.135 2.370 1.999 2015 2014 2015 2014 2015 2014 2014 2013 2012 1. Quarter 2. Quarter 1. Half 14 06.08.2015

  15. Slide 15: Capacity utilization higher than world average

    Crude steel capacity utilization ratio of ERDEMİR Group is higher than world average CRUDE STEEL CAPACITY UTILIZATION RATIO 100% 98,1% 95,5% 95% 92,8% 90% 88,4% 84,1% 85% 80,2% 80% 78,3% 77,9% 76,3% 75% 71,8% 70% 65% 2011 2012 2013 2014 2015 6M Erdemir Group World 15 06.08.2015 Source: Worldsteel

  16. Slide 16: Production increased by 13% in 2015 6M

    Production increased by 13% in 2015 6M YoY PRODUCTION VOLUMES ( 000 TONS ) 8.107 7.783 7.501 1.153 1.356 1.519 1.746 1.844 1.598 4.417 3.902 636 545 915 2.065 821 2.352 1.910 5.208 241 1.992 4.583 395 228 4.384 317 468 447 411 410 2.866 2.536 1.377 1.264 1.489 1.272 2015 2014 2015 2014 2015 2014 201

  17. Slide 17: Sales volumes increased by 7%

    Sales volumes increased by 7% in 2015 6M YoY SALES VOLUMES ( 000 TONS ) 8.096 7.684 7.448 1.163 1.346 1.468 1.741 1.778 1.627 4.291 3.396 648 557 913 855 1.992 2.023 2.299 1.973 5.192 242 205 4.560 4.353 406 352 459 454 432 423 2.730 2.584 1.296 1.239 1.434 1.345 2015 2014 2015 2014 2015 2014 2014 2

  18. Slide 18: Net sales revenue was 2.4 billion USD

    Net sales revenue was 2,4 billion USD in 2015 6M YoY NET SALES REVENUE ( MILLION USD ) 5.252 5.340 5.142 627 771 580 2.609 2.369 352 4.625 4.562 4.569 205 1.179 1.324 1.190 1.285 81 174 124 178 2.164 2.257 1.098 1.150 1.066 1.107 2015 2014 2015 2014 2015 2014 2014 2013 2012 1. Quarter 2. Quarter 1.

  19. Slide 19: Flat steel domestic sales share was 93%

    Flat steel sales to the domestic market was 93% of our flat sales in 2015 6M 2015 6M FLAT STEEL DOMESTIC SALES BREAKDOWN (%) 2014 6M FLAT STEEL DOMESTIC SALES BREAKDOWN (%) 299Kt; 9% 308Kt; 10% 162Kt; 5% 157Kt; 5% 341Kt; 10% 1.480Kt; 293Kt; 10% 3.372Kton; 44% 129Kt; 4% 3.060Kton; 1.362Kt; 93% 114Kt;

  20. Slide 20: Flat steel sales to EU countries were 52% of exports

    Flat steel sales to EU countries was 52% of our flat export in 2015 6M 2015 6M FLAT STEEL EXPORTS BREAKDOWN (%) 2014 6M FLAT STEEL EXPORTS BREAKDOWN (%) 17Kt; 6% 5Kt; 2% 40Kt; 11% 11Kt; 4% 140Kt; 52% 27Kt; 7% 182Kt; 48% 34Kt; 12% 271Kton; 379Kton; 7% 65Kt; 17% 11% 64Kt; 24% 65Kt; 17% 2015 6M LONG ST

  21. Slide 21: Average flat and long steel prices and cost of sales

    21 Jun-13 USD/TON USD/TON Jun-13 06.08.2015 Jul-13 Jul-13 Aug-13 Aug-13 Sep-13 Sep-13 Oct-13 Oct-13 Nov-13 Nov-13 Dec-13 Dec-13 Jan-14 Jan-14 Feb-14 Feb-14 Mar-14 Mar-14 Apr-14 Apr-14 May-14 May-14 Erdemir Group Flat Sales Price Erdemir Group Long Sales Price Jun-14 Jun-14 Jul-14 Jul-14 Aug-14 Aug-1

  22. Slide 22: EBITDA decreased by 5% in 2015 6M

    EBITDA decreased by 5% in 2015 6M YoY EBITDA ( MILLION USD ) 1.200 1.136 48,0% 1.000 987 40,0% 800 32,0% 510 536 604 600 24,0% 21,1% 21,3% 21,9% 19,8% 21,5% 20,6% 21,6% 19,2% 400 249 282 261 254 16,0% 11,3% 200 8,0% 0 0,0% 2015 2014 2015 2014 2015 2014 2014 2013 2012 1. Quarter 2. Quarter 1. Half EB

  23. Slide 23: EBITDA was 510 million USD in 2015 1H

    EBITDA was 510 million USD in 2015 1H Consolidated EBITDA => Consolidated Net Profit (Million USD) 23 06.08.2015

  24. Slide 24: Dividend payment didn't hurt liquidity

    Due to the cash, which is provided from working capital, high dividend payment didn’t have a negative effect on liquidity Consolidated EBITDA => Consolidated Net Cash (Million USD) 24 06.08.2015

  25. Slide 25: EBITDA per ton for flat product

    EBITDA per ton for flat product was 108 USD/ton in 2015 2Q EBITDA PER TON (USD/TON) 153 150 148 141 143 144 130 124 142 113 135 126 125 108 100 100 111 113 88 107 101 92 89 61 64 67 54 24 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2012 2013 2014 2015 Flat Long 25 06.08.2015

  26. Slide 26: Working capital decrease

    Working capital decrease was the reason of the decline in trade receivables and inventory which was caused by falling commodity prices CONSOLIDATED NET ASSETS (MILLION USD) WORKING CAPITAL (MILLION USD) 26 06.08.2015

  27. Slide 27: Net debt decreasing despite high dividends

    Despite the high dividend payments, net debt has been decreasing BORROWINGS (MILLION USD) 3.785 1.976 2.529 2.479 1.924 787 1.945 1.135 1.640 1.452 1.472 1.473 693 1.283 891 753 1.809 1.742 1.344 529 947 581 720 283 2010 2011 2012 2013 2014 2015 1H Long-Term Debt Short-Term Debt Net Debt 27 06.08.20

  28. Slide 28: Net debt was 283 million USD

    Net debt was 283 million USD at the end of 2015 June NET DEBT (MILLION USD) 28 06.08.2015

  29. Slide 29: Cash and borrowings maturity profile

    Erdemir Group has 1.190 million USD cash and cash equivalents at the end of 2015 1H BORROWINGS MATURITY PROFILE (MILLION USD) 557 1.190 16 346 323 14 437 28 54 158 7 98 332 240 3 151 40 104 95 1 1 Jun.15 2015 Jul.-Dec. 2016 2017 2018 2019 2020 2021 Cash 2015 Principal Revolving Trade Financing Loans

  30. Slide 30: Raw materials made up 71% of cost of sales

    Raw materials made up 71% of the cost of sales COST OF SALES BREAKDOWN* - % 5% 5% 4% 5% 5% 0,1% 1% 5% 1% 4% 5% 6% 7% 7% 7% 12% 12% 11% 11% 71% 71% 73% 74% 2015 6M 2014 2013 2012 Raw Materials Personnel Expenses Purchased Energy Expenses Depreciation and Amortization Exp. Non-operating Expenses Other

  31. Slide 31: Flat conversion cost per ton

    Flat conversion cost per ton excluding depreciation was realised as 120 USD/ton in 2015 2Q FLAT PRODUCTS ( USD/TON )* 1.867 1.958 500 1.797 1.731 1.823 2.100 450 1.600 1.651 1.675 1.682 400 1.378 1.600 350 300 1.100 250 200 600 150 90 85 87 82 78 80 81 87 75 68 100 100 50 0 67 70 72 65 60 68 63 72 5

  32. Slide 32: Capital expenditures planned for 2015

    Capital expenditures of 479 million USD is planned for 2015* ( M USD ) 1.017 718 634 611 961 479 445 675 576 264 242 357 611 377 200 158 162 162 171 159 143 107 82 61 140 23 93 83 80 122 68 43 56 59 57 55 38 17 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015 2016 - 6M 2019 Fixed Assets A

  33. Slide 33: Number of employees was 12,878

    Number of employees was 12.878 as of June 2015 NUMBER OF EMPLOYEES 13.553 13.433 13.045 12.872 12.878 12.801 2010 2011 2012 2013 2014 2015 June 33 06.08.2015

  34. Slide 34: 2015 Market Overview, 6M Results, Guidance

    ˃ 2015 Market Overview ˃ 2015 6M Results ˃ 2015 Guidance 34 06.08.2015

  35. Slide 35: 2015 Guidance: production and sales

    2015 Guidance Production (Million Tons) Sales (Million Tons) 8,1 8,4 8,1 8,4 6,9 7,2 6,9 7,2 1,2 1,2 1,2 1,2 2014 Actual 2015 Budget 2014 Actual 2015 Budget Long Flat Long Flat 35 06.08.2015

  36. Slide 36: 2015 Guidance: EBITDA and net profit margins

    2015 Guidance EBITDA and Net Profit Margins ˃ In 2014; EBITDA and Net Profit Margins were 21.6% and 13.9% respectively. ˃ In 2015; EBITDA and Net Profit Margins are expected to be 16-18% and 9-11% respectively. 36 06.08.2015

  37. Slide 37: Erdemir Group

    O ErdemirGroup IEA FUTURE MADE OF STEEL [YEARS 37 06.08.2015

Ereğli Demir ve Çelik Fabrikaları T.A.Ş. (Erdemir) — H1 2015 Earnings Presentation on 6ix