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) — 9M 2011 Earnings Presentation

28 slides from Eregli Demir Ve Celik Fabrikalari T.a.s's earnings presentation, Oct 27, 2011

  1. Slide 1: Erdemir Group 2011 9 Months Consolidated Financial Results

    Erdemir Group 2011 9 Months Consolidated Financial Results 27 October 2011

  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 2011 Market Overview 2011 9 Months Results 3 / 27

  4. Slide 4: Crude steel production and sales prices

    -50% -25% 0% 25% 50% 75% -50% -40% -30% -20% -10% 0% 20% 30% 40% 50% 60% 10% Sep-04 Sep-04 Dec-04 Dec-04 Mar-05 Mar-05 Jun-05 Jun-05 SOURCE: * WSA Sep-05 Sep-05 Dec-05 Dec-05 Mar-06 Mar-06 ** BLOOMBERG Jun-06 Jun-06 Sep-06 Sep-06 Dec-06 Dec-06 Mar-07 Mar-07 Jun-07 Jun-07 Sep-07 Sep-07 Dec-07 Dec-07

  5. Slide 5: Iron ore prices are decreasing

    0 100 200 300 400 500 600 700 800 200 400 600 800 0 1.000 1.200 1.400 01.2008 01.2008 USD/TON USD/TON 04.2008 04.2008 07.2008 07.2008 10.2008 10.2008 SOURCE: BLOOMBERG 01.2009 01.2009 04.2009 04.2009 07.2009 EFFECTIVE PRICE 07.2009 10.2009 ERDEMIR GROUP HRC 10.2009 01.2010 01.2010 04.2010 04.2010 07

  6. Slide 6: Turkish steel production increased by 21% in 2011 8M YoY

    Turkish steel production increased by 21% in 2011 8M YoY PRODUCTION ( 000 TONS ) 26.067 26.684 26.295 20.593 25.133 23.359 4.257 4.543 17.015 4.421 6.629 5.873 4.122 4.064 21.810 22.141 20.712 19.237 19.666 14.720 12.951 2006 2007 2008 2009 2010 2010 8M 2011 8M Long Flat Total CONSUMPTION ( 000 TONS

  7. Slide 7: Turkish Steel Market (cont’d)

    Turkish Steel Market ( cont’d ) IRON AND STEEL PRODUCT EXPORTS ( 000 TONS ) 16.806 15.861 10.211 94 14.486 9.374 54 13.795 218 1.368 174 12.668 1.651 212 1.780 35 2.407 732 0,1 1.244 2.206 1.519 1.394 1.625 2.192 1.638 1.630 3.523 12.937 11.786 10.890 6.276 6.740 9.645 9.232 2006 2007 2008 2009 2010

  8. Slide 8: Turkey’s pipe export in 2011 9M YoY

    Turkey’s pipe export was 1.230 thousand tons in 2011 9M YoY PIPE EXPORTS (000 TONS) 1.227 1.230 2010 9M 2011 9M SOURCE: ERDEMİR GROUP MARKETING AND SALES COORDINATION 8 / 27

  9. Slide 9: Automotive production and sales increased by 13% and 18% respectively

    Automotive production and sales increased by 13% and 18% respectively in 2011 9M YoY AUTOMOTIVE PRODUCTION (000 UNITS) AUTOMOTIVE SALES (000 UNITS) 1.229 %13 1.045 %18 593 561 884 784 636 484 2010 9M 2011 9M 2010 9M 2011 9M Domestic Sales Export AUTOMOTIVE CAPACITY UTILIZATION RATIO (%) 75 68 2010 9

  10. Slide 10: White goods domestic sales and production increased by 20% and 10%

    White goods domestic sales and production increased by 20% and 10% respectively in 2011 9M YoY WHITE GOODS DOMESTIC SALES WHITE GOODS EXPORTS (000 UNITS) (000 UNITS) %6 %20 4.917 9.858 10.426 4.098 2010 9M 2011 9M 2010 9M 2011 9M WHITE GOODS PRODUCTION (000 UNITS) %10 14.953 13.577 2010 9M 2011 9M S

  11. Slide 11: After the contraction in 2009, all markets are expanding

    After the contraction in 2009, all markets are expanding CHANGES IN SECTOR DEVELOPMENT INDEX (% YoY) 30,0% 25,0% 23,4% 19,6% 15,0% 20,0% 11,7% 11,0% 9,5% 18,0% 10,0% 9,0% 8,3% 6,0% 10,5% 8,5% 5,7% 9,0% -3,9% -0,7% 7,9% 0,0% 3,1% -6,2% -10,0% -8,1% -16,5% -16,3% -20,0% -24,0% -30,0% 2007 2008 2009 20

  12. Slide 12: HRC sales prices are higher than last year

    HRC sales prices are higher than last year Çin 2.Kalite Kok Kömürü Spot İhraç Fiyatı ( USD/TON ) HRC PRICES ( USD/Ton ) 1.300 1.200 1.100 As of October 2011, EU HRC price 1.000 is 716 USD, China HRC spot price is 900 648 USD, USA export HRC price is 705 800 700 USD. The prices were 661 USD, 694 600

  13. Slide 13: Agenda

    Agenda 2011 Market Overview 2011 9 Months Results 13 / 27

  14. Slide 14: Erdemir Group Key Figures

    ERDEMİR GROUP KEY FIGURES 2011 9M 2010 9M 2010 2009 Liquid Steel Production (000 Tons) 5.727 5.427 7.311 6.619 (1) Slab Production (000 Tons) 5.094 4.197 5.674 4.569 (2) Flat Steel Production (000 Tons) 4.684 3.884 5.373 4.812 Long Steel Production (000 Tons) 481 1.067 1.420 1.869 Flat Steel Shipmen

  15. Slide 15: Liquid steel production was 5,7 million tons

    Liquid steel production was 5,7 million tons in 2011 9M LIQUID STEEL PRODUCTION ( 000 TONS ) 7.311 6.619 6.122 5.727 5.427 1.837 1.895 1.924 1.831 1.966 1.701 2011 2010 2011 2010 2011 2010 2011 2010 2010 2009 2008 1Q 2Q 3Q 9M 15 / 27

  16. Slide 16: Production was 5,2 million tons

    Production was 5,2 million tons in 2011 9M PRODUCTION VOLUMES ( 000 TONS ) 6.793 6.681 6.132 1.420 5.165 1.869 4.951 1.950 481 1.502 1.067 1.227 1.590 1.059 1.486 1.685 1.692 1.788 1.795 1.638 167 3.871 187 127 1.518 3.457 473 354 3.222 418 395 414 240 2.825 2.696 335 363 361 1.080 987 1.170 921 1.2

  17. Slide 17: HRC sales volume increased by 32% YoY

    HRC sales volume increased by 32% in 2011 9M YoY SALES VOLUME ( 000 TONS ) 6.986 6.516 1.858 5.895 1.393 5.033 4.593 1.963 461 1.456 1.665 1.189 1.022 999 1.471 1.668 1.683 1.682 1.685 124 1.503 140 1.405 197 3.667 276 295 3.383 3.464 451 415 386 388 2.572 2.461 321 360 318 1.056 913 1.173 867 1.154

  18. Slide 18: Net sales revenue increased by 41% YoY

    Net sales revenue increased by 41% in 2011 9M YoY NET SALES REVENUE ( MILLION TL ) 6.665 6.633 6.800 1.224 890 1.218 5.266 4.713 1.217 565 2.448 5.441 5.743 5.583 2.028 2.189 415 1.583 395 1.621 4.148 4.049 414 1.509 162 175 228 1.794 2.033 1.614 1.421 1.446 1.281 2011 2010 2011 2010 2011 2010 2011

  19. Slide 19: Sales to automotive sector increased by 4%

    Sales to automotive sector increased by 4% in 2011 9M 2011 9M FLAT STEEL DOMESTIC SALES BREAKDOWN (%) 2010 9M FLAT STEEL DOMESTIC SALES BREAKDOWN (%) 374Kt; 10% 268Kt; 8% 199Kt; 6% 173Kt; 5% 1.213Kt; 33% 206Kt; 7% 1.297Kt; 397Kt; 11% 41% 3.631Kton; 164Kt; 5% 3.159Kton; 79% 88% 156Kt; 4% 269Kt; 9% 38

  20. Slide 20: Flat steel sales to EU countries increased by 9%

    Flat steel sales to EU countries increased by 9% in 2011 2011 9M FLAT STEEL EXPORTS BREAKDOWN (%) 2010 9M FLAT STEEL EXPORTS BREAKDOWN (%) 29Kt; 3% 24Kt; 6% 29Kt; 3% 5Kt; 1% 101Kt; 11% 41Kt; 10% 941Kton; 37Kt; 9% 412Kton; 21% 12% 781Kt; 83% 305Kt; 74% 2011 9M LONG STEEL EXPORTS BREAKDOWN (%) 2010 9M

  21. Slide 21: Flat and long steel prices and cost of sales

    Jan-08 Jan-08 Feb-08 Feb-08 USD/TON USD/TON Mar-08 Mar-08 Apr-08 Apr-08 May-08 May-08 Jun-08 Jun-08 Jul-08 Jul-08 Aug-08 Aug-08 Sep-08 Sep-08 Oct-08 Oct-08 Nov-08 Nov-08 Dec-08 Dec-08 Jan-09 Jan-09 Feb-09 Feb-09 Mar-09 Mar-09 Apr-09 Apr-09 May-09 May-09 Jun-09 Jun-09 Jul-09 Jul-09 Aug-09 Aug-09 Sep-

  22. Slide 22: Net profit increased by 33% YoY

    Net profit increased by 33% in 2011 9M YoY EBITDA ( MILLION TL ) 1.800 1.675 32,0% 1.600 28,5% 27,5% 1.420 1.400 21,7% 25,6% 25,1% 22,3% 24,0% 18,3% 20,0% 21,4% 1.200 1.053 1.000 16,0% 775 800 674 11,4% 560 7,3% 8,0% 600 441 461 382 400 290 302 0,0% 200 0 -8,0% 2011 2010 2011 2010 2011 2010 2011 201

  23. Slide 23: Cash and cash equivalents and borrowings

    Erdemir Group has 709 million USD cash and cash equivalents at the end of 2011 3Q BORROWINGS ( MILLION USD ) BORROWINGS MATURITY PROFILE ( MILLION USD ) ST Portion of LT Debt 3.785 Short-Term Debt Long-Term Debt Cash and Cash Equivalents 121 2.998 1.368 2.767 2.744 600 537 545 99 2.140 20 74 608 232

  24. Slide 24: Raw materials made up 68% of cost of goods sold

    Raw materials made up 68% of the cost of goods sold in 2011 9M COST OF PRODUCTION BREAKDOWN* - % 1% 3% 4% 4% 5% 6% 6% 7% 6% 6% 6% 8% 12% 12% 13% 68% 67% 66% 2011 9M 2010 2009 Raw Materials Personnel Expenses Energy Consumables Depreciation Other * EXCLUDING INVENTORY WRITEDOWNS AND PROVISION RELEASE

  25. Slide 25: Flat cost per ton excluding raw materials

    Flat cost per ton excluding raw materials was realised as 186 USD/ton in 2011 3Q 500 2.100 FLAT PRODUCTS ( USD/TON )* 450 1.620 1.489 1.498 1.566 400 1.326 1.322 1.600 1.232 1.262 1.284 1.278 350 1.126 1.120 1.174 1.050 300 1.100 250 704 200 151 600 135 131 207 150 94 101 109 111 120 103 90 85 78 89

  26. Slide 26: Capital expenditures of 185 million USD planned for 2011

    Capital expenditures of 185 million USD is planned for 2011 ( M USD ) 954 116 693 672 556 130 36 516 361 838 445 543 520 185 332 136 129 12 74 22 125 107 111 71 2002 - 2005 2006 2007 2008 2009 2010 2011 2012 - 2014 İskenderun Investments Ereğli Investments 26 / 27

  27. Slide 27: Number of employees was 13.440 in 2011 September

    Number of employees was 13.440 in 2011 September NUMBER OF EMPLOYEES 15.063 14.637 14.056 13.553 13.440 13.161 2006 2007 2008 2009 2010 2011 September 27 / 27

  28. Slide 28: Q&A

    Q&A

Ereğli Demir ve Çelik Fabrikaları T.A.Ş. (Erdemir) — 9M 2011 Earnings Presentation on 6ix