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. — Q1 2014 Earnings Presentation

36 slides from Eregli Demir Ve Celik Fabrikalari T.a.s's earnings presentation, Apr 25, 2014

  1. Slide 1: Erdemir Group 2014 3 Months Consolidated Financial Results

    Erdemir Group 2014 3 Months Consolidated Financial Results 25 April 2014 1 / 35

  2. Slide 2: Disclaimer

    DISCLAIMER 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

  3. Slide 3: Agenda

    Agenda 2014 Market Overview 2014 3M Results 2014 Guidance 3 / 35

  4. Slide 4: CIS and EU28 crude steel production and prices

    -50% -25% 25% 50% 75% 0% -50% -40% -20% -10% -30% 10% 20% 30% 40% 50% 60% 0% Mar-08 Mar-08 Jun-08 Jun-08 Sep-08 Sep-08 Dec-08 Dec-08 Mar-09 Source: * worldsteel Mar-09 ** Bloomberg Jun-09 Jun-09 Sep-09 Sep-09 Dec-09 Dec-09 Mar-10 Mar-10 Jun-10 Jun-10 Sep-10 Sep-10 Dec-10 Dec-10 Mar-11 Mar-11 Jun-11

  5. Slide 5: Crude steel capacity utilization ratio of Erdemir Group is increasing

    Crude steel capacity utilization ratio of ERDEMİR Group is increasing CRUDE STEEL CAPACITY UTILIZATION RATIO 96% 93,8% 94% 92,8% 92% 90% 88,4% 88% 86% 84,1% 84% 82% 80,2% 80% 78,3% 77,9% 77,8% 78% 76% 2011 2012 2013 2014 3M Erdemir Group World Source: worldsteel 5 / 35

  6. Slide 6: Iron ore prices are decreasing

    Iron ore prices are decreasing COKING COAL PRICES IRON ORE PRICES USD/TON (HCC PEAK DOWNS REGION FOB AUSTRALIA) (IODEX 62% FE CFR NORTH CHINA MID) USD/TON 240 160 USD/TON 220 150 140 200 130 180 120 160 110 140 100 120 90 100 80 12.2012 04.2012 06.2012 08.2012 10.2012 02.2013 04.2013 06.2013 08.2013

  7. Slide 7: Turkish steel production increased by 1% in 2014 2M YoY

    Turkish steel production increased by 1% in 2014 2M YoY PRODUCTION ( 000 TONS ) 36.405 34.286 31.943 9.869 5.650 9.039 26.300 5.609 9.075 25.133 6.629 4.421 1.676 1.665 26.536 25.247 22.868 20.712 19.671 3.974 3.944 2013 2012 2011 2010 2009 2014 2M 2013 2M Long Flat Total CONSUMPTION ( 000 TONS ) 31

  8. Slide 8: Turkish iron and steel product imports decreased by 13% in 2014 2M YoY

    Turkish iron and steel product imports decreased by 13% in 2014 2M YoY IRON AND STEEL PRODUCT EXPORTS ( 000 TONS ) 16.549 2.689 15.239 15.861 2.536 0,05 15.247 21 14.465 218 1 60 10 1.858 212 470 1.651 375 2.356 2.298 1.520 2.957 2.206 176 1.562 2.393 472 3.523 11.328 11.713 11.786 1.975 10.489 1.74

  9. Slide 9: Contraction in the automotive sector is expected

    Contraction in the automotive 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% 7,5% 10% 11,3% 5,5% 7,3% 4,5% 2,7% 4,0% 4,5% 4,5% 5% 11,2% 6,8% 4,0% 0% 3,5% 3,0% 0,6% 1,3% 1,0% -5% -5,5% -10% 2010 2011 2012 2013 2014 (e) 2015 (

  10. Slide 10: HRC sales prices are lower than last year

    HRC sales prices are lower than last year Çin 2.Kalite Kok Kömürü Spot İhraç Fiyatı ( USD/TON ) HRC PRICES ( USD/Ton ) 900 800 700 600 500 Feb-12 Feb-13 Feb-14 Jun-11 Jun-12 Jun-13 Oct-13 Oct-11 Oct-12 Aug-11 Aug-12 Aug-13 Dec-12 Dec-11 Dec-13 Apr-11 Apr-12 Apr-13 Apr-14 CIS EXPORT HRC BLACKSEA/BALT

  11. Slide 11: Billet sales prices are lower than last year

    Billet sales prices are lower than last year Çin 2.Kalite Kok Kömürü Spot İhraç Fiyatı ( USD/TON ) BILLET PRICES ( USD/Ton ) 750 700 650 600 550 500 450 Aug-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Jun-11 Jun-12 Jun-13 Oct-13 Oct-11 Oct-12 Dec-11 Apr-11 Apr-12 Dec-12 Apr-13 Dec-13 Apr-14 BILLET CHINA E

  12. Slide 12: Agenda

    Agenda 2014 Market Overview 2014 3M Results 2014 Guidance 12 / 35

  13. Slide 13: Erdemir Group Key Figures

    ERDEMİR GROUP KEY FIGURES 2014 3M 2013 3M 2013 2012 Liquid Steel Production (000 Tons) 2.135 2.216 8.447 8.042 (1) Slab Production (000 Tons) 1.813 1.735 6.865 6.329 (2) Flat Steel Production (000 Tons) 1.675 1.600 6.427 5.983 Long Steel Production (000 Tons) 317 445 1.356 1.519 Flat Steel Shipments

  14. Slide 14: Liquid steel production was 2.1 million tons in 2014 3M YoY

    Liquid steel production was 2.1 million tons in 2014 3M YoY LIQUID STEEL PRODUCTION ( 000 TONS ) 8.447 8.042 7.656 2.377 2.135 2.216 2013 2014 2013 2013 2012 2011 4. Quarter 1. Quarter 14 / 35

  15. Slide 15: HRC production increased by 9% in 2014 3M YoY

    HRC production increased by 9% in 2014 3M YoY PRODUCTION VOLUMES ( 000 TONS ) 7.783 7.501 6.913 1.356 1.519 794 1.844 1.652 1.598 2.131 1.992 2.045 4.583 4.384 4.467 334 317 445 462 411 439 1.335 1.264 1.161 2013 2014 2013 2013 2012 2011 4. Quarter 1. Quarter Hot Cold Long Total 15 / 35

  16. Slide 16: HRC sales volumes increased by 9% in 2014 3M YoY

    HRC sales volumes increased by 9% in 2014 3M YoY SALES VOLUMES ( 000 TONS ) 7.684 7.448 1.346 1.468 6.647 791 1.778 1.627 1.553 1.959 2.023 2.025 4.560 4.353 4.303 294 352 456 432 432 429 1.233 1.239 1.140 2013 2014 2013 2013 2012 2011 4. Quarter 1. Quarter Hot Cold Long Total 16 / 35

  17. Slide 17: Net sales revenue was 1.3 billion USD in 2014 3M

    Net sales revenue was 1,3 billion USD in 2014 3M YoY NET SALES REVENUE ( MILLION USD ) 5.340 5.338 5.142 580 771 931 4.562 4.569 4.407 1.275 1.324 1.364 85 174 250 1.190 1.150 1.114 2013 2014 2013 2013 2012 2011 4. Quarter 1. Quarter Domestic Export Total 17 / 35

  18. Slide 18: Sales to pipe and profile industry and secondary production increased

    Sales to pipe and profile industry and secondary production increased in 2014 3M YoY 2014 3M FLAT STEEL DOMESTIC SALES BREAKDOWN (%) 2013 3M FLAT STEEL DOMESTIC SALES BREAKDOWN (%) 189Kt; 12% 165Kt; 12% 78Kt; 5% 71Kt; 5% 581Kt; 38% 500Kt; 37% 140Kt; 9% 138Kt; 10% 1.520Kton; 1.362Kton; 55Kt; 4% 91% 8

  19. Slide 19: Flat steel sales to EU countries was 50% of flat export

    Flat steel sales to EU countries was 50% of our flat export in 2014 3M 2014 3M FLAT STEEL EXPORTS BREAKDOWN (%) 2013 3M FLAT STEEL EXPORTS BREAKDOWN (%) 9Kt; 5% 18Kt; 12% 10Kt; 5% 16Kt; 10% 76Kt; 50% 20Kt; 9% 151Kton; 207Kton; 17Kt; 11% 9% 13% 25Kt; 17% 169Kt; 81% 2014 3M LONG STEEL EXPORTS BREAKDOW

  20. Slide 20: Average flat and long steel prices in 2014 3M

    In 2014 3M, Erdemir Group average flat and long steel prices were 671 USD/ton and 568 USD/ton respectively USD/TON Erdemir Group Flat Sales Price Erdemir Group Flat Cost of Sales May-12 Jun-12 Feb-13 May-13 Jun-13 Feb-14 Nov-12 Nov-13 Sep-13 Sep-12 Dec-13 Dec-12 Jul-12 Jul-13 Mar-14 Mar-12 Apr-12 Ja

  21. Slide 21: Net profit increased by 52% in 2014 3M YoY

    Net profit increased by 52% in 2014 3M YoY EBITDA 1.400 ( MILLION USD ) 1.241 48,0% 1.200 987 40,0% 1.000 32,0% 800 604 600 23,2% 24,0% 21,3% 19,2% 18,5% 17,5% 16,0% 400 282 238 236 11,3% 200 8,0% 0 0,0% 2013 2014 2013 2013 2012 2011 4. Quarter 1. Quarter EBITDA EBITDA Margin NET PROFIT/(LOSS) ( MIL

  22. Slide 22: EBITDA was 282 million USD in 2014 1Q

    EBITDA was 282 million USD in 2014 1Q Consolidated EBITDA => Consolidated Net Profit (Million USD) (47) 5 (8) (28) (8) 282 240 195 EBITDA Depreciation Interest inc. Operating Finance Tax Inc./Exp. Non-Controlling NET PROFIT (1 Jan. - from overdue Income Inc./Exp. Interests (1 Jan. - 31 March 2014) s

  23. Slide 23: EBITDA to net cash bridge

    EBITDA was 282 million USD in 2014 1Q Consolidated EBITDA => Consolidated Net Cash (Million USD) 2 6 207 (6) (21) 167 (29) 608 399 282 EBITDA Changes in Interest Inc. from Interest Inc./ Taxes Paid Net Cash Used in Free Cash Flow Increase in Other INCREASE IN (1 Jan - Working Capital Overdue Sales (

  24. Slide 24: EBITDA per ton for flat product was 135 USD/ton

    EBITDA per ton for flat product was 135 USD/ton in 2014 1Q EBITDA PER TON (USD/TON) 141 143 148 130 113 135 126 100 100 111 113 88 107 61 64 67 54 24 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2012 2013 2014 Flat Long 24 / 35

  25. Slide 25: Net assets was 3.9 billion USD at the end of 2014 1Q

    Net assets was 3,9 billion USD at the end of 2014 1Q CONSOLIDATED NET ASSETS (MILLION USD) 4.079 3.694 3.680 3.910 2.168 2.001 965 31.12.2013 357 31.03.2014 -499 -526 -363 -1.640 -1.847 Cash and Cash Working Capital Tangible and Financial Provisions and Dividend NET ASSETS Equivalents Intangible Ass

  26. Slide 26: Net debt was 886 million USD at the end of 2014 1Q

    Net debt was 886 million USD at the end of 2014 1Q BORROWINGS ( MILLION USD ) 3.785 2.767 1.976 2.529 2.479 556 2.059 787 1.945 1.852 1.135 1.640 1.924 693 960 1.452 2.211 1.283 1.809 1.742 1.344 886 947 892 2009 2010 2011 2012 2013 2014 1Q Long-Term Debt Short-Term Debt Net Debt 26 / 35

  27. Slide 27: Net debt was 886 million USD at the end of 2014 1Q

    Net debt was 886 million USD at the end of 2014 1Q NET DEBT (MILLION USD) Net Debt 1.249 After Dividend (399) 363 Dividend Payment 2 1.283 886 - - - - Net Debt Free Cash Flow Other Net Debt (December 2013) (March 2014) 27 / 35

  28. Slide 28: Borrowings maturity profile

    Erdemir Group has 965 million USD cash and cash equivalents at the end of 2014 1Q BORROWINGS MATURITY PROFILE (MILLION USD) 674 623 44 61 227 965 202 302 23 235 403 8 360 280 226 70 37 66 10 36 Mar.14 1 Apr.-Dec. 2014 2015 2016 2017 2018 2019 2020 Cash 2014 Principal Revolving Trade Financing Loans

  29. Slide 29: Raw materials made up 72% of the cost of sales

    Raw materials made up 72% of the cost of sales in 2014 3M COST OF SALES BREAKDOWN* - % 5% 5% 5% 3% 1% 1% 4% 4% 4% 5% 6% 6% 6% 7% 12% 11% 11% 11% 72% 72% 74% 75% 2014 3M 2013 2012 2011 Raw Materials Personnel Expenses Purchased Energy Expenses Depreciation and Amortization Exp. Non-operating Expenses

  30. Slide 30: Flat cost per ton excluding raw materials

    Flat cost per ton excluding raw materials was realised as 159 USD/ton in 2014 1Q FLAT PRODUCTS ( USD/TON )* 500 1.797 2.100 450 1.621 1.624 1.600 1.651 1.675 1.489 1.505 1.565 1.428 1.506 1.360 1.493 400 1.322 1.284 1.278 1.378 1.600 350 300 1.100 250 200 600 150 101 109 111 120 103 116 106 116 104

  31. Slide 31: Capital expenditures of 377 million USD is planned for 2014

    Capital expenditures of 377 million USD is planned for 2014 ( M USD ) 1.017 718 731 634 961 445 377 675 731 576 264 242 377 200 286 158 162 171 159 143 107 140 35 21 68 56 59 57 93 83 55 15 91 43 17 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2014 2015 and 3M after Fixed Assets Acquisition and

  32. Slide 32: Number of employees was 12,740 as of March 2014

    Number of employees was 12.740 as of March 2014 NUMBER OF EMPLOYEES 14.637 13.553 13.433 13.161 13.045 12.801 12.740 2008 2009 2010 2011 2012 2013 2014 March 32 / 35

  33. Slide 33: Agenda

    Agenda 2014 Market Overview 2014 3M Results 2014 Guidance 33 / 35

  34. Slide 34: 2014 Guidance

    2014 GUIDANCE Production (M. Tons) Sales (M. Tons) 8,1 8,1 7,8 7,7 6,7 6,3 6,7 6,4 1,4 1,4 1,4 1,4 2013 Actual 2014 Budget 2013 Actual 2014 Budget Long Flat Long Flat 34 / 35

  35. Slide 35: 2014 Guidance: EBITDA and Net Profit Margins

    2014 GUIDANCE EBITDA and Net Profit Margins  EBITDA and Net Profit Margins were 19.2% and 9.4% respectively in 2013.  EBITDA and Net Profit Margins are expected to be 16- 18% and 9-11% respectively in 2014. 35 / 35

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