Severstal · RUS:CHMF
Severstal — Q1 2014 Earnings Presentation
24 slides from Severstal's earnings presentation, Apr 30, 2014
Slide 1: Q1 2014 Financial Results Presentation
Q1 2014 Financial Results Presentation 30 April 2014 Photo: Balakovo long products mini-mill of Severstal.
Slide 2: Table of Contents
3 Q1 2014 Results Overview 7 Divisional Performance and Market Outlook Table of Contents 12 Financial Position 17 Appendices
Slide 3: Q1 2014 Results Overview
Q1 2014 Results Overview
Slide 4: Summary
Summary Q1 2014 Highlights: Another resilient financial performance: despite lower Revenue and EBITDA q/q, the Group’s EBITDA margin remained broadly flat at 17.8% (Q4 13: 18.1%) due to continued focus on operational enhancements and cost control Initiatives to mitigate seasonal market softening
Slide 5: Revenue Dynamics and Breakdown
Revenue Dynamics and Breakdown Q1 2014 Revenue: $3,007m Q1 2014 Revenue: $3,007m (Q4 2013: $3,384m; -11.1%) (Q1 2013: $3,322m; -9.5%) Weaker average pricing and seasonal softening of Russian Steel and Resources decreased revenues on shipments in Q1 led to lower revenues at Russian lower realized pri
Slide 6: EBITDA Dynamics and Breakdown
EBITDA Dynamics and Breakdown Q1 2014 EBITDA: $534m Q1 2014 EBITDA: $534m (Q4 2013: $611m; -12.6%) (Q1 2013: $430m; 24.2%) Seasonal softening of EBITDA at all divisions, while Despite lower revenues due to pricing, Russian maintaining Group EBITDA margin* broadly flat Steel and Resources posted cont
Slide 7: Divisional Performance and Market Outlook
Divisional Performance and Market Outlook
Slide 8: Severstal Russian Steel
Severstal Russian Steel Sales of steel products in Russia contracted 8% q/q as the Russian Steel Division restored stock to normal levels EBITDA per tonne and average selling price following the divestment of inventories during Q4 2013 due to repairs at a converter and having deferred some sales i
Slide 9: Cost Control at Severstal Russian Steel
Cost Control at Severstal Russian Steel Cherepovets Steel Mill production cash cost of slab, $/t $600 $559 $537 $500 $484 $472 $457 $457 Cherepovets $432 $418 $409 $401 cash cost of $400 $377 $370 slab at market price of raw $326 Q1 14 non-integrated materials $300 cash cost of slab down $51/t q/q $
Slide 10: Severstal Resources
Severstal Resources Q1 revenue 15.4% lower q/q to $567m (Q4 13: $670m) due to seasonality, lower Average selling price and cash cost per tonne production volumes at Vorkutaugol and PBS Coals. Y/y revenue down 17.1% due to lower sales and pricing Cost per tonne (US$/t) Average Selling Price (US$/t)
Slide 11: Severstal International
Severstal International Total steel sales volumes were up 1% q/q to 1.2 mt. despite somewhat lower EBITDA per tonne and average selling price production at Dearborn which was driven by spikes in natural gas prices. EBITDA per tonne (US$/t) Average Selling Price (US$/t*) Q1 revenue of $1,016m (Q4
Slide 12: Financial Position
? Severstal Financial Position Achieve more together
Slide 13: Cash Flow and Net Working Capital
Cash Flow and Net Working Capital Q1 2014 Highlights: Cash Flow dynamics, 31 Dec 2013 to 31 Mar 2014 Solid liquidity position of $892m in cash and cash equivalents Strong operating cash flow of $488m Q1 capex of $264m, 21% below the capex of Q4 2013 488 Annual target capex of $976m might be
Slide 14: Robust Liquidity and Sustainable Leverage
Robust Liquidity and Sustainable Leverage Strong liquidity position: - As at the end of Q1, cash and cash equivalents stood at $892m after being partially used for Q1 2014 debt repayments including exercising the call option on the 1,336 10.25% Severstal Columbus Bond Total Short-term Debt to be R
Slide 15: Debt Structure
Debt Structure As at 31.03.2014 the debt structure was dominated by public debt (83% of total) and the US dollar (93% of total). Debt Maturity Schedule, $m 1 514 878 756 704 543 43 2014 2015 2016 2017 2018 2019 + Notes: Debt for 2014 represents the principal amount of debt as at 31 March 2014 and in
Slide 16: Q2 2014 Market Outlook
Q2 2014 Market Outlook Global steel demand and output has grown by 2% in the year to date against the prior year, primarily driven by Europe, Japan and China. In Russia, we expect steel consumption to increase in Q2 on the back of a seasonal recovery in construction. Domestic rouble steel prices
Slide 17: Appendices
Severstal Appendices Achieve more together
Slide 18: Summary Income Statement
Summary Income Statement $ million, unless otherwise stated Q1 2014 Q4 2013 Q1 2014 Q1 2013 Revenue 3,007 3,384 3,007 3,322 COGS (2,318) (2,568) (2,318) (2,625) EBITDA 534 611 534 430 EBITDA margin, % 17.8% 18.1% 17.8% 12.9% Profit from operations 336 411 336 222 Operating margin, % 11.2% 12.1% 11.2
Slide 19: Q1 2014 Revenue Breakdown by Region
Q1 2014 Revenue Breakdown by Region Severstal Group Q1 2014 revenue Severstal Russian Steel Q1 2014 revenue breakdown by region breakdown by region Central Asia Europe Europe 5% 18% 24% Middle East North Central Asia 1% America 3% Other 36% Other 9% 5% Russia Russia 61% 38% Severstal Resources Q1 20
Slide 20: Q1 2014 Division Results
Q1 2014 Division Results Severstal Resources Q1 2014 Q4 2013 Change, % Q1 2014 Q1 2013 Change, % Revenue ($m) 567 670 (15.4%) 567 684 (17.1%) Cost of sales ($m) (344) (400) (14.0%) (344) (432) (20.4%) G&A expences ($m) (24) (18) 33.3% (24) (34) (29.4%) Distribution expences ($m) (49) (76) (35.5%) (4
Slide 21: Q1 2014 Division Results (Continued)
Q1 2014 Division Results (Continued) Severstal International Q1 2014 Q4 2013 Change, % Q1 2014 Q1 2013 Change, % Revenue ($m) 1,016 1,002 1.4% 1,016 930 9.2% Cost of sales ($m) (961) (931) 3.2% (961) (906) 6.1% G&A expences ($m) (24) (26) (7.7%) (24) (24) - Distribution expences ($m) - (1) - - (2) -
Slide 22: Summary Balance Sheet
Summary Balance Sheet $ million As at 31 March 2014 As at 31 December 2013 Cash and Cash Equivalents 892 1,036 Total Assets: 13,445 14,534 Current Assets 4,360 4,906 Non-current Assets 9,085 9,628 Total Liabilities: 6,804 7,534 Current Liabilities 2,373 2,549 Non-current Liabilities 4,431 4,985 Tota
Slide 23: Summary Cash Flow Statement
Summary Cash Flow Statement $ million Q1 2014 Q4 2013 Q1 2014 Q1 2013 Profit before Financing and Taxation 312 68 312 202 Cash Generated from Operations 592 790 592 235 Interest Paid (96) (89) (96) (113) Income Tax Paid (8) (53) (8) (13) Net cash from Operating Activities 488 648 488 109 Total cash
Slide 24: Disclaimer
Disclaimer These materials are confidential and have been prepared by OAO Severstal (Severstal) solely for your information and may not be reproduced, retransmitted or further distributed to any other person or published, in whole or in part, for any other purpose. These materials may contain projec