Aperam S.A. · EURONEXT:APAM
Aperam — BofAML Global Metals, Mining & Steel Conference 2016
35 slides from Aperam's conference presentation, May 10, 2016
Slide 1: BofAML Global Metals, Mining & Steel Conference
BofAML Global Metals, Mining & Steel Conference May 10 & 11, 2016 Timoteo Di Maulo – Chief Executive Officer © Aperam 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 fundamentals
BofAML Global Metals, Mining & Steel Conference Aperam’s fundamentals
Slide 4: Solid and diversified sources of profitability
Aperam’s fundamentals Solid and diversified sources of profitability Aperam sales breakdown by destination (FY 2015) Aperam EBITDA breakdown (FY 2015) USA Alloys & Asia & Africa 7% Services & Specialties 10% Solutions 8% 8% Stainless & Electrical Steel Europe Brazil & Latin 46% America 18% Europe 65
Slide 5: A restructured and efficient European footprint
Aperam’s fundamentals A restructured and efficient European footprint able to seize market opportunities 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 mi
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 Range of products Caracas (Venezuela) A complete range of stainless steel grades Stainless steel Colombia (austenitics, ferritics, duplex, martensitics) Ecuador Grain oriented electric steel
Slide 7: Industrial footprint in Europe and South America with global service centres
Aperam’s fundamentals An industrial footprint in Europe and South America, perfectly complemented with global service centres and sales network Steel making Finishing line Sales subsidiaries and representative offices Sales agencies Steel Service Centers Services & Solutions Division offers a key co
Slide 8: A leading position in nickel alloys
Aperam’s fundamentals A leading position in nickel alloys Global nickel alloys producers (kt in 2014) Aperam Alloys & Specialties geographical footprint Rescal Amilly Imhua Wire drawing The magnetic parts company 40 35 � � Transformation 30 � workshop 25 � 20 Imphy 15 ICS (JV) 10 5 0 Meltshop,
Slide 9: A solid Balance Sheet
Aperam’s fundamentals A solid Balance Sheet Total Financial Debt breakdown Financial Debt maturity profile (USD million) as of March 31, 2016 [1] as of March 31, 2016 [1] 600 500 400 300 200 100 0 Convertible bonds BBF Others 2016 2017 2018 >2019 A robust balance sheet and debt structure, mainly rep
Slide 10: Environment and markets
BofAML Global Metals, Mining & Steel Conference Environment and markets
Slide 11: Asian stainless steel overcapacity remains
Environment and markets Asian stainless steel overcapacity remains Upstream operational capacity of the Chinese industry Downstream operational capacity of the Chinese industry (in million tonnes) (in million tonnes) 40 20 30 15 20 10 10 5 - - Pace of new production capacities coming onstream is sta
Slide 12: European restructuring is completed
Environment and markets European restructuring is completed Downstream operational capacity of the European industry CR stainless steel European apparent consumption (in million tonnes) (in million tonnes) 3,5 4,5 3,0 2,5 2,0 4,0 1,5 1,0 0,5 3,5 - 2011 2012 2013 2014 2015 2015E 2016F 2012 2013 2014
Slide 13: South American stainless steel demand impacted by slowdown in Brazil
Environment and markets South American stainless steel apparent demand impacted by slowdown in Brazil CR stainless steel Brazilian apparent consumption Stainless steel flat stainless steel consumption per capita (in thousand tonnes) (kg/year) 350 400 8 350 300 7 300 6 250 250 5 200 200 4 150 150 3 1
Slide 14: Both domestic markets of Aperam have tariff measures
Environment and markets Both domestic markets of Aperam have tariff measures Chinese marginal cost player to landed costs in Brazil (USD/t) Chinese marginal cost player to landed costs in Europe (USD/t) Chinese marginal FOB, CIF, Imports Anti-dumping Chinese landed Chinese marginal FOB, CIF, Anti-du
Slide 15: The nickel price has reached a historical low point
Environment and markets The nickel price has reached a historical low point Nickel – LME Cash (USD/t) Breakdown of Chinese nickel imports (in kt) 30 000 500 28 000 26 000 NPI – BF* 400 24 000 22 000 NPI – RKEF* 20 000 300 18 000 16 000 200 14 000 12 000 100 10 000 8 000 NPI – EAF* 0 6 000 2013 2014
Slide 16: European stainless steel prices have shown the best resilience
Environment and markets European stainless steel prices have shown the best resilience CR stainless steel products imports in Europe Chinese versus European CR 304 2B 2mm coil transaction (in %) price (USD/t) 30% 30% 5 000 4 500 4 000 20% 20% 3 500 3 000 10% 10% 2 500 2 000 1 500 0% 0% 2012 2012 201
Slide 17: Aperam's performance
BofAML Global Metals, Mining & Steel Conference Aperam’s performance
Slide 18: Health & Safety performance
Aperam’s performance Health & Safety performance Lost Time Injury Frequency rate* 4.0 3.0 2.0 1.0 0 Profit improvement in Q1 due to market Health and frequency & Safety internal initiatives butinQ2 rate of 1.1 Q1expected 2016 to be more challenging * WorldSteel-standard: Fr = lost time Injuries per
Slide 19: Solid evolution of profitability
Aperam’s performance Solid evolution of profitability Ebitda evolution (USD million) Net result evolution (USD million) 2,21 10,6% 10,0% 1,21 547 172 501 95 5,7% 4,1% 292 497 490 -100 217 -111 292 217 -1,28 -1,39 2012 2013 2014 2015 2012 2013 2014 2015 Ebitda from operations Ebitda from sale of elec
Slide 20: First quarter operating performance
Aperam’s performance First quarter operating performance Shipments (‘000t) Q1 2016 EBITDA per division (USD million) [1] 475 486 469 483 466 476 469 455 95 90 439 433 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 EBITDA (USD million) 155 133 164 137 108 105 112 133
Slide 21: Leadership Journey
Aperam’s performance Leadership Journey® Cumulated gains (USD million) Key projects completed since beginning of 2011 • In Brazil, VSS*, switch from LPG to natural gas and conversion of blast furnace number 2 from coke to biomass. • In Europe, 600 - Suspension of traditional cold roll mill in Isberg
Slide 22: Sustainable cash flow from operations across the cycles
Aperam’s performance Sustainable cash flow from operations across the cycles Aperam net debt and gearing[1] evolution Aperam Net Debt / Ebitda evolution (USD million) 4,0 3,76 1 200 29% 30% 3,5 26% 26% 1 000 23% 25% 3,0 20% 2,60 2,5 2,36 800 20% 2,20 14% 2,0 600 15% 1066 878 816 1,5 400 690 10% 0,98
Slide 23: Credit rating
Aperam’s performance Credit rating Aperam rating evolution with S&P Aperam rating evolution with Moody’s BBB- 5 Baa3 5 BB+ 4 Ba1 4 BB 3 Ba2 3 BB- Ba3 2 2 B+ B1 1 1 B B2 0 0 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 J
Slide 24: Solid financial ratios
Aperam’s performance Solid financial ratios Profitability ratio Debt ratio 700 12% 6,0 120% 11% 10% N/A N/A 10% 600 10% 5,0 93% 100% 500 7% 8% 4,0 80% 69% 400 6% 3,0 60% 300 4% 35% 4% 2,0 40% 200 33% 3% 20% 100 2% 1,0 14% 20% 0 0% 0,0 0% FY 2014 FY2015 FY 2014 FY2015 FY 2014 FY2015 FY 2014 FY2015 FY
Slide 25: Enterprise value and return on capital employed
Aperam performance Enterprise value and return on capital employed Enterprise Value ranking (USD million) [1] ROCE ranking [2] 15% 4 000 3 500 12% 3 000 9% 2 500 6% 2 000 3% 1 500 0% 1 000 -3% 500 0 -6% Competitor 1 Competitor 2 Aperam Aperam Competitor 1 Competitor 2 Market Capitalisation Net Debt
Slide 26: Aperam's value strategy: a customer driven company focused on self-help
BofAML Global Metals, Mining & Steel Conference Aperam’s value strategy: A customer driven company focused on its self-help story
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: Optimise value creation in South America
Aperam’s value strategy Optimise value creation in South America thanks to a perfectly adapted asset base and flexible sales management Key pillars of the mitigation plan in Brazil Aperam’s assets optimisation in South Amercia • Ensure full utilisation rate with the best margin Product mix Geographi
Slide 29: Unlocking value of Aperam's best performing assets
Aperam’s value strategy Unlocking value of Aperam’s best performing assets Leadership Journey initiatives since 2011 by typology Upgrade program launched on best performing assets since 2014 Launched at the early stage of the program, the • Productivity improvement of the downstream restructuring in
Slide 30: Strengthening product and service differentiation
Aperam’s value strategy Strengthening product and service differentiation Shipments of Top Line products developments in kT 250 200 • Toplines are commercial projects focusing on Top Line development of Aperam’s most profitable product, mindset segment, client or geographical areas. 150 100 • Among
Slide 31: Financial policy and capital allocation
Aperam’s value strategy Priority on maintaining a strong Balance Sheet consistent with Investment Grade Financial ratios. Cash resources to be allocated to: Company Invest in sustaining and upgrading the company’s assets base to continuously sustainability reinforce Leadership Journey and Top Line S
Slide 32: Sustainability is fully embedded in Aperam Strategy
Aperam’s value strategy Sustainability is fully embedded in Aperam Strategy Our vision Priorities & targets Achievements People • LITFR: improvement to 1.0 compared to 1.1 in 2014, but one fatality is sadly to be Consider Safety as our first • Become a “Zero-injury” Company reported duty to our Peop
Slide 33: Q&A
Q&A
Slide 34: 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 35: Definitive European anti-dumping duties on China and Taiwan stainless steel imports
Environment and markets Definitive European anti-dumping duties on China and Taiwan stainless steel imports from August 27, 2015 Anti-dumping development • On May 13, 2014, Eurofer filed an antidumping complaint to European Commission “China and Taiwan have a structural • On June 26, 2014, European
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