Slide 1: 2019 Business Year Results Presentation
2019 BUSINESS YEAR RESULTS PRESENTATION 28 FEBRUARY 2020 2019 BUSINESS YEAR RESULTS PRESENTATION
Slide 2: Disclaimer
Disclaimer This document may contain forward-looking information and statements about ACERINOX, S.A., its subsidiaries and/or its management. These forward-looking statements include financial projections and estimates and their underlying assumptions, and statements regarding the intent, belief or
Slide 3: 2019 Results
2019 Results Strong year end performance and cash generation despite weak environment Quarter on quarter improvement One offs - non cash adjustment Solid strategy of value creation based on strong balance sheet: - Excellence - Added value enhance by VDM Metals - Sustainability is in the core of our
Slide 4: 2019 Business Year Results
2019 Business Year Results Million EUR 2018 2019 Variation Robust performance in a weaker Net Sales 5,011 4,754 -5% environment EBITDA 480 364 -24% Strong cash generation and improved balance sheet Results before Taxes and Minorities 310 23 -93% Downward inventory adjustment of 20 million EUR Result
Slide 5: Zero fatalities in 2019 and overall reduction in incident rate
Zero fatalities in 2019 and overall reduction (-17.5%) in incident rate A safe workplace, our main priority: Accident rate evolution 1. Prevention and continuous training to reduce accidents. Zero 3.3 fatalities in 2019 and overall reduction (-17.5%) in the number 2.6 of accidents 2.2 2.1 2. Reducti
Slide 6: Improvement quarter on quarter despite the seasonal slowdown
Improvement quarter on quarter despite the seasonal slowdown Q4 MARKET HIGHLIGHTS Q4 ACERINOX HIGHLIGHTS • Seasonal slowdown • Reduction of raw material prices • All companies improve QoQ except Bahru • Intensification of macro uncertainties • Q4 Production: Europe -10% melting production QoQ • High
Slide 7: 2019 Quarterly Financial Figures
2019 Quarterly Financial Figures Figures in million EUR Non cash adjustments: Lay offs provision: 38 million EUR Bahru impairment: 98 million EUR Columbus impairment: 68 million EUR Deferred tax assets: 61 million EUR 7 2019 BUSINESS YEAR RESULTS PRESENTATION
Slide 8: Year end non cash adjustments in the consolidated group
Year end non cash adjustments in the consolidated group 2019 Lay off in Impairment 2019 Impairment Impairment Figures in million euros Adjusted Acerinox goodwill Reported tax credits Bahru Result Europa Columbus Result Net turnover 4,754 4,754 GROSS MARGIN 1,417 1,417 Other operating income 21 21 Pe
Slide 9: Strong quarterly figures despite low activity
Strong quarterly figures despite low activity MELTING PRODUCTION EBITDA 112 38 Lay offs in Spain Thousand Mtons Million EUR 628 90 97 103 570 542 74 QoQ improvement 491 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FREE CASH FLOW NET FINANCIAL DEBT (Before dividends) Debt reduction after 192 million EUR of Million EUR Mi
Slide 10: A challenging but successful operational year
A challenging but successful operational year MELTING PRODUCTION EBITDA 402 Thousand Mtons 3 8 Lay offs in Spain Million EUR 2,475 2,519 2,440 489 480 2,231 Good results in a 329 364 challenging environment 16 17 18 19 16 17 18 19 FREE CASH FLOW NET FINANCIAL DEBT (Before dividends) 231 5th year in
Slide 11: Focus on cash generation
Focus on cash generation CASH FLOW 96 (101) (128) 364 359 Million EUR (184) 231 47 Working Taxes, EBITDA Operating CAPEX FCF Dividends CF after Capital financial Cash Flow & dividends charges Buyback & others 11 2019 BUSINESS YEAR RESULTS PRESENTATION
Slide 12: Comfortable debt level and positive net financial result
Comfortable debt level and positive net financial result NET FINANCIAL DEBT NET FINANCIAL DEBT / NET FINANCIAL RESULT ADJ. EBITDA 1.88 0.4 -2 1.25 1.15 1.23 16 17 18 19 Million EUR Million EUR 620 609 No. times 552 495 -19 -30 16 17 18 19 16 17 18 19 Lowest net financial debt since 2002 12 2019 BUSI
Slide 13: Challenging environment in Q1 2020
Challenging environment in Q1 2020 United States Normalized stocks fundamentals Stable consumption of the market Imports remain low remain strong Good order entry Q1 EBITDA IS Europe Imports remain high EXPECTED TO BE market still Stocks are still high BROADLY SIMILAR Historically low
Slide 14: A New Era
A NEW ERA 14 2019 BUSINESS YEAR RESULTS PRESENTATION
Slide 15: Solid strategy of value creation
Solid STRATEGY of value creation Excellence Added Value 15 2019 BUSINESS YEAR RESULTS PRESENTATION
Slide 16: Cash is king
BALANCE SHEET Intense balance sheet focus… Low debt Strong and shareholder financial returns expenses CASH IS KING Efficient Working capital capital allocation control 16 2019 BUSINESS YEAR RESULTS PRESENTATION
Slide 17: Balance sheet allows efficient capital allocation
BALANCE SHEET … allow us an efficient capital allocation … CAPEX RETURN TO SHAREHOLDERS NET FINANCIAL DEBT 184 620 609 173 173 144 152 552 124 128 495 Million EUR Million EUR Million EUR 27 2016 2017 2018 2019 2016 (*) 2017 2018 2019 2016 2017 2018 2019 (*) Scrip dividend: 23% cash and 77% new share
Slide 18: Excellence: constantly improving
EXCELLENCE Constantly improving Digitalization and 360º planning Cost reduction programs Prioritize quick return investments Optimize the commercial network 18 2019 BUSINESS YEAR RESULTS PRESENTATION
Slide 19: 102.5% of the first year target achieved
EXCELLENCE 102,5% of the first year target achieved 25 million EUR Production: Quality, melting shop yields and efficiency in the consumption 125 MM€ of production materials 100% Supply chain: Delivery on time 112 MM€ 89% 86 MM€ 59 MM€ 69% 25 MM€ 47% 19% Excel Plan VI 360º 2019 2020 2021 2022 2023 1
Slide 20: Excellence is part of our culture
EXCELLENCE Excellence is part of our culture 20 2019 BUSINESS YEAR RESULTS PRESENTATION
Slide 21: Added value enhanced by VDM Metals
ADDED VALUE Added value enhanced by VDM metals Why does VDM Metals add value? ▪ Globally #1 in specialty alloys market Market leader with ▪ Reputation of excellence and strong brand name growth Potential ▪ Significant growth potential in specialty alloys ▪ Innovation leader with excellent R&D know-h
Slide 22: The core of our business model
SUSTAINABILITY The core of our business model Social, economic and environmental CORPORATE GOVERNANCE Strong corporate governance culture and ethics code transversal to all our activities. A HEALTHY AND SAFE PLACE TO WORK Zero fatalities and 17.5% reduction in the total number of accidents. EMPLOYME
Slide 23: We are Circular Economy 4R
SUSTAINABILITY We are Circular Economy Stainless steel is 100% recyclable indefinitely Stainless steel is a long lasting product More than 90% of our melting production comes from recycled materials Constantly reducing our emissions We help other industries to reduce emissions (exhaust system, 4R ma
Slide 24: Value creation for all stakeholders
VALUE CREATION FOR ALL STAKEHOLDERS 2019 BUSINESS YEAR RESULTS PRESENTATION