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. — H1 2009 Earnings Presentation
30 slides from Eregli Demir Ve Celik Fabrikalari T.a.s's earnings presentation, Aug 20, 2009
Slide 1: Erdemir Group First Half 2009 Consolidated Financial Results
Erdemir Group First Half 2009 Consolidated Financial Results 20 August 2009
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
Slide 3: Agenda
AGENDA: ¾2009 Market Overview ¾2009 First Half Financial Highlights and Management Guidance 3 / 30
Slide 4: European Union: prices increasing, crude steel production up
In the European Union, prices are increasing. Crude steel production increased by 23,1% in June 2009 compared to December 2008. EU27 CRUDE STEEL PRODUCTION ( YoY % ) * 50% 30% 10% -10% -30% -50% -70% N D N D N D F F F F O O O S S S J J J J J J J J J J J A A A A A A A M M M M M M M M 2006 2007 2008 2
Slide 5: North America: prices and production increasing
In North America; prices and production are increasing. Crude steel production increased by 13,5% in June 2009 compared to December 2008. US CRUDE STEEL PRODUCTION ( YoY % ) * 50% 30% 10% -10% -30% -50% -70% A A N D A A N D A A N D A J J J J J J J J J J J O O O F F F F M M M M M M M M S S S 2006 200
Slide 6: CIS: prices have started to increase
In CIS, prices has started to increase. Crude steel production increased by 34% in June 2009 compared to December 2008. CIS CRUDE STEEL PRODUCTION ( YoY % ) * 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% -50% A A N D A A N D A A N D A J J J J J J J J J J J O O O F F F F M M M M M M M M S S S 2006 2007
Slide 7: Raw material and finished goods prices are increasing
Raw material and finished goods prices are increasing. CHINA 2ND QUALITY COKING COAL SPOT CHINA PORT FINE ORE PRICE CFR EXPORT PRICE ( USD/TON ) USD/TON ( USD/TON ) USD/TON USD/TON 800 250 700 600 200 500 150 400 300 100 200 50 100 0 0 A A N D A A N D A A N D A J J J J J J J J J J J J O O O F F F F
Slide 8: Idled capacities are restarting to produce again
Idled capacities are restarting to produce again. 110 WORLD CRUDE STEEL PRODUCTION WORLD PIG IRON PRODUCTION 105 100 95 90 85 80 75 70 Apr-09 Apr-08 Aug-08 May-09 May-08 Oct-08 Jan-09 Jun-09 Jul-09 Jan-08 Jun-08 Jul-08 Mar-09 Mar-08 Sep-08 Feb-09 Feb-08 Nov-08 Dec-08 World wide pig iron production i
Slide 9: Turkish flat and long steel demand recovery in Q2 2009
The demand recovery continued in Q2 2009 with respect to Q4 2008 and Q1 2009. (Millon Tons) TURKISH FLAT STEEL (Millon Tons) TURKISH LONG STEEL 12,0 Production Consumption 7,0 Production Consumption 6,4 10,5 10,6 6,0 10,0 5,0 8,0 3,8 4,0 5,8 3,2 6,0 3,0 3,0 4,7 4,4 2,2 4,2 2,0 4,0 2,0 1,5 2,8 1,3 1,
Slide 10: Steel product exports and imports down in H1 2009
Exports and imports of steel products were down in H1 2009 YoY by 7% and 36% respectively whereas flat products exports increased by 39% YoY. IRON AND STEEL PRODUCT EXPORTS ( 000 TONS ) 16.803 13.792 12.666 278 4.347 3.858 3.871 4.996 8.219 8.854 1.337 225 2.355 148 1.217 1.561 1.368 169 1.582 66 89
Slide 11: Automotive production and exports increased in Q2 2009
Automotive production and exports increased by 76% and 29% respectively in Q2 2009 with respect to Q1 2009. AUTOMOTIVE PRODUCTION (000 UNITS) AUTOMOTIVE SALES (000 UNITS) EXPORT DOMESTIC SALES - %45 281 282 - %50 713 557 394 278 2008 (JAN.- JUN) 2009 (JAN.- JUN) 2008 (JAN.- JUN) 2009 (JAN.- JUN) Pro
Slide 12: Agenda
AGENDA: ¾2009 Market Overview ¾2009 First Half Financial Highlights and Management Guidance 12 / 30
Slide 13: Erdemir Group Key Figures
ERDEMİR GROUP KEY FIGURES 2009/1.H. 2008/1.H. 2008 2007 Liquid Steel Production (000 Tons) 3.085 3.162 6.121 5.486 (1) Slab Production (000 Tons) 1.919 1.973 3.994 3.680 (2) Flat Steel Production (000 Tons) 2.187 2.358 4.158 4.206 Long Steel Production (000 Tons) 1.077 1.150 2.033 1.917 Flat Steel S
Slide 14: Liquid steel production down 2% in H1 2009
Liquid steel production in H1 2009 decreased by 2% compared to H1 2008. LIQUID STEEL PRODUCTION ( 000 TONS ) 6.121 5.486 %2 3.162 3.085 1.540 1.590 1.621 1.495 2008 2009 2008 2009 2008 2009 2008 2007 1.Q. 2.Q. 1.H. 14 / 30
Slide 15: Finished goods output decreased by 7%
Finished goods output decreased by 7% in H1 2009 compared to H1 2008. PRODUCTION VOLUMES ( 000 TONS ) 6.190 6.123 %7 2.033 1.917 Long Long 3.509 3.264 1.486 1.632 1.150 CRC CRC 1.077 1.656 1.716 1.852 1.548 891 700 530 554 620 523 2.671 2.574 425 299 467 401 1.467 1.487 701 863 766 625 HRC HRC 2008
Slide 16: Sales volume increased 4% in H1 2009
Sales volume increased in H1 2009 compared to H1 2008 by 4%. SALES VOLUME ( 000 TONS ) 6.215 5.972 1.920 %4 2.040 Long Long 3.448 3.583 1.688 1.082 1.471 1.144 CRC CRC 1.733 1.840 1.850 762 1.609 886 566 642 516 502 2.461 2.607 326 438 436 448 1.418 1.738 840 760 898 HRC HRC 658 2008 2009 2008 2009
Slide 17: Net sales revenue in Q2 2009 up 16% on Q1
Net sales revenue in Q2 2009 increased by 16% compared to Q1 2009. NET SALES REVENUE ( MILLION TL ) 6.809 1.563 5.357 4.902 763 1.082 3.617 696 16% 2.304 5.246 4.594 785 3.820 1.065 1.239 2.921 422 363 1.519 642 877 2009/1.Q. 2009/2.Q. 2009 2008 2008 2007 2006 1.H. DOMESTIC EXPORT TOTAL 17 / 30
Slide 18: Flat and long steel sales breakdown by industry and export region
Sales to Automotive and Components and Household Appliances industries increased by 169% and 188% respectively in Q2 2009 compared to Q1 2009*. FLAT STEEL DOMESTIC SALES BREAKDOWN ( %) FLAT STEEL EXPORT SALES BREAKDOWN ( %) 1% 3% 13 % 2% 4% 2% 7% 6% 7% 4% 47 % 4% 71% 10% 29% 67% 13 % 11 % PIPE and P
Slide 19: Net profit recovery in Q2 2009
Net profit had a significant recovery in the 2Q 2009 compared to 1Q 2009. EBITDA ( MILLION TL ) 1.105 1.097 1.111 782 136 81 -55 2009/1.Q. 2009/2.Q. 2009 2008 2008 2007 2006 1.H. NET PROFIT ( MILLION TL ) 855 704 712 228 -164 -32 -196 2009/1.Q. 2009/2.Q. 2009 2008 2008 2007 2006 1.H. 19 / 30
Slide 20: Medium term liquidity risk reduced through refinancing
Medium term liquidity risk was significantly reduced through refinancing of all of the 1.1 billion USD principal repayments due in the rest of 2009 and year 2010. BORROWINGS ( MILLION USD ) BORROWINGS MATURITY PROFILE* 2.998 ( MILLION USD ) ST portion of LT Debt 2.811 Short-Term Debt 600 Long-Term D
Slide 21: Capacity utilization rates increased
Capacity utilization rates increased. CAPACITY UTILIZATION RATES * EREĞLİ İSKENDERUN PLANTS CUR - % PLANTS CUR - % Coke Plant 96,2 Coke Plant 72,0 Sinter Plant 91,6 Sinter Plant 64,7 Blast Furnaces 96,7 Blast Furnaces 59,8 BOF 107,6 BOF 69,5 Continuous Slab Casting 107,6 Continuous Billet Casting 88
Slide 22: Specific energy consumption decreasing
Specific energy consumption is decreasing despite the low capacity utilization and production cuts. ENERGY CONSUMPTION (MCAL / TON CRUDE STEEL) EREĞLİ 5.199 -11% 4.875 4.791 4.734 4.647 2005 2006 2007 2008 2009/1.H. İSKENDERUN 6.166 - 12% 6.008 5.805 5.826 5.449 2005 2006 2007 2008 2009/1.H. 22 / 30
Slide 23: CO2 emissions remain under reference values
CO2 emissions remain under international reference values despite production cuts. CO2 EMISSIONS (KG/TCS) EREĞLİ 2,04 1,92 -9% 1,88 1,84 1,85 2005 2006 2007 2008 2009/1.H. İSKENDERUN 2,47 -9% 2,28 2,26 2,26 2,17 2005 2006 2007 2008 2009/1.H. 23 / 30
Slide 24: Labor productivity decline is marginal
Despite low production levels the decline of labor productivity is marginal. LABOR PRODUCTIVITY (MAN-HOUR/TON) EREĞLİ 4,36 4,00 3,83 3,62 3,66 2005 2006 2007 2008 2009/1.H. İSKENDERUN 6,05 5,96 5,26 4,51 4,70 2005 2006 2007 2008 2009/1.H. 24 / 30
Slide 25: Number of employees decreased about 9% since 2008
Number of employees decreased by about 9% since 2008, primarily through voluntary redundancies and retirements. NUMBER OF EMPLOYEES 15.015 15.063 14.598 14.637 14.056 13.356 2004 2005 2006 2007 2008 2009/1.H. In March 2009, about 800 employees have left the Group through the voluntary redundancy pro
Slide 26: Fixed and variable costs decreased in first two quarters
Fixed and variable costs (excluding raw material charges) decreased in the first two quarters. ( MILLON USD ) 143 107 112 109 98 88 93 80 116 111 265 276 227 236 244 217 205 194 165 147 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2007 2008 2009 Fixed Cost Variable Cost 26 / 30
Slide 27: Fixed and variable operating costs per ton by product
Fixed and variable operating costs, excluding raw material charges decreased for flat products. The increase in long products is caused by lower a capacity utilization rate during the first six months of 2009. FLAT PRODUCTS ( USD/TON ) 207 156 154 151 136 138 135 131 103 88 99 88 81 70 72 76 59 63 6
Slide 28: Large portion of investment program completed
Erdemir Group completed a large portion of its current investment program. ( M USD ) 940 116 694 673 588 130 37 27 362 824 252 233 543 524 37 5 19 31 332 210 65 184 48 48 65 2002 - 2005 2006 2007 2008 2009 2010 2011 2012 - After İskenderun Investments Erdemir Mining Investments Ereğli Investments As
Slide 29: Net debt expected to remain stable
Net debt is expected to remain stable. NET DEBT ( MILLION USD ) 2.355 2.320 2.200 31.12.2008 30.06.2009 31.12.2009(E) DEBT COMPOSITION JPY JPY JPY EURO 4% 5% TL EURO 3% TL EURO 15% TL 21% 15% 17% 15% 30% USD USD USD 63% 51% 61% 29 / 30
Slide 30: Erdemir Group sales forecasts
Price recovery and an increase in sales volume are expected in the next four months. ERDEMİR GROUP SALES FORECASTS FLAT LONG 603 ( USD/TON ) 562 505 501 476 475 442 441 660 607 572 169 518 160 94 82 ( 000 TON ) 478 491 447 435 Jul-09 Aug-09 Sep-09 Oct-09 FLAT LONG TOTAL 30 / 30
Ereğli Demir ve Çelik Fabrikaları T.A.Ş. — H1 2009 Earnings Presentation on 6ix