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) — H1 2010 Earnings Presentation

28 slides from Eregli Demir Ve Celik Fabrikalari T.a.s's earnings presentation, Aug 3, 2010

  1. Slide 1: Erdemir Group 2010 6 Months Consolidated Financial Results

    Erdemir Groupp 2010 6 Months Consolidated Financial Results 03 August 2010

  2. Slide 2: Disclaimer

    DISCLAIMER Ereğli ğ Demir Ç Çelik Fabrikaları T.A.Ş. Ş ((Erdemir)) may, y, when necessary, y, 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

  3. Slide 3: Agenda

    Agenda 2010 Market Overview 1H 2010 Results 3 / 27

  4. Slide 4: Crude steel production YoY by region

    -50% -40% 40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% -50% -25% 0% 25% 50% 75% Ju un-03 Jun-03 YoY Oct-03 O Oct-03 Fe eb-04 Feb-04 SOURCE: * WSA Ju un-04 Jun-04 Oct-04 O Oct-04 ** BLOOMBERG Fe eb-05 Feb-05 Ju un-05 Jun-05 Oct-05 O Oct-05 Fe eb-06 Feb-06 Ju un-06 Jun-06 Oct-06 O Oct-06 Fe eb-07 Feb

  5. Slide 5: Raw material prices are stabilizing

    100 200 300 400 500 600 700 800 0 0 200 400 600 800 1.000 1 200 1.200 1.400 01.2007 USD/TON 01..2007 04.2007 USD/TON 04..2007 07.2007 07..2007 SOURCE: BLOOMBERG 10.2007 10..2007 01.2008 01..2008 EREĞLİ HRC 04.2008 04..2008 EFFECTIVE PRICE 07.2008 07..2008 10.2008 10..2008 01.2009 01..2009 CIS SLAB 0

  6. Slide 6: Turkish steel consumption increased by 56% in 5M 2010

    Turkish steel consumption increased by 56% in 5M 2010 PRODUCTION ( 000 TONS ) 26.067 26.684 10.428 25.119 10.067 23.359 4.257 4.543 1.526 19.593 4.406 2.248 4.122 3.768 21.810 22.141 20.713 8.902 19.237 7.819 15 825 15.825 2005 2006 2007 2008 2009 2009 5M 2010 5M L Long Fl t Flat Total Long Flat Tot

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

    Turkish Steel Market ( cont’d ) IRON AND STEEL PRODUCT EXPORTS ( 000 TONS ) 16.806 15.865 6.900 94 13.795 218 29 12.668 1.368 5.601 35 1.648 769 0,1 2.407 515 31 1.244 2.208 9 494 9.494 1 394 1.394 1.625 420 0,2 1.630 1.484 1.131 1.902 12.937 5.587 10.890 11.791 9 645 9.645 3 666 3.666 6.460 2005 20

  8. Slide 8: Automotive production and sales increased by 39% and 23% in 1H 2010

    Automotive production and sales increased by 39% and 23% respectively in 1H 2010 YoY AUTOMOTIVE PRODUCTION (000 UNITS) AUTOMOTIVE SALES (000 UNITS) 689 560 23% 39% 399 278 547 394 282 289 2009 6M 2010 6M 2009 6M 2010 6M Domestic Sales Export AUTOMOTIVE CAPACITY UTILIZATION RATIO (%) 74 54 2009 6M 20

  9. Slide 9: White goods production and export increased by 18% and 14%

    White goods production and export increased by 18% and 14% respectively in 1H 2010 YoY WHITE GOODS DOMESTIC SALES WHITE GOODS EXPORTS (000 UNITS) (000 UNITS) 14% 9% 2.522 6.131 2.324 5.355 2009 6M 2010 6M 2009 6M 2010 6M WHITE GOODS PRODUCTION (000 UNITS) 18% 8.579 7.280 2009 6M 2010 6M SOURCE: WHIT

  10. Slide 10: After the contraction in 2009, growth is expected in all markets in 2010

    After the contraction in 2009, growth is expected in all markets in 2010 SECTOR DEVELOPMENT INDEX (2000:100) (2000 100) 350 305,0 300 282,2 271,6 271,1 276,0 269,2 250 216,3 212,8 208,8 200 189,4 186,1 199,9 164,4 191,2 184,2 , 182,8 150 164,8 158,4 153,8 149,9 145,6 138,9 131,0 121,9 100 50 2006 20

  11. Slide 11: Sales prices are going up in 2010 YoY

    Sales prices are going up in 2010 YoY Çin 2.Kalite Kok Kömürü Spot Ç p İhraç HRC PRICES ( USD/Ton )ç Fiyatı y ( USD/TON ) 1.400 As of July 2010, CIS HRC export 1.200 price is 548 USD, China HRC spot 1.000 p price is 618 USD,, US exportp HRC 800 price is 565 USD. The prices were 508 600 USD, 564 USD,

  12. Slide 12: Agenda

    Agenda 2010 Market Overview 1H 2010 Results 12 / 27

  13. Slide 13: Erdemir Group Key Figures

    ERDEMİR GROUP KEY FIGURES 2010 1H 2009 1H 2009 2008 Li id Steel Liquid St l Production P d ti (000 T Tons)) 3 726 3.726 3 085 3.085 6 619 6.619 6 122 6.122 Slab Production 2.786 (1) (000 Tons) 1.919 4.569 3.995 Flat Steel Production 2.606 (2) ((000 Tons)) 2.225 4.812 4.182 Long Steel Production (000

  14. Slide 14: Liquid steel production increased by 21% in 1H 2010 YoY

    Liquid steel production increased by 21% in 1H 2010 YoY LIQUID STEEL PRODUCTION ( 000 TONS ) 6.619 6.122 5 486 5.486 3.726 3.085 1.895 1.590 1.831 1.495 2010 2009 2010 2009 2010 2009 2009 2008 2007 1Q 2Q 1H 14 / 27

  15. Slide 15: Production in 1H 2010 was 3,4 million tons

    Production in 1H 2010 was 3,4 million tons PRODUCTION VOLUMES ( 000 TONS ) 6.681 6.132 5.858 1.869 Long 1.950 1.652 Long Long 1.590 3.433 3.317 Cold 1.486 1.632 827 Cold Cold 1.092 1.795 1.736 698 1.638 1.581 700 473 562 354 3.222 530 2.696 2.574 335 299 363 401 1.908 1.525 987 875 921 650 Hot Hot H

  16. Slide 16: HRC sales volume increased in 1H 2010 YoY

    HRC sales volume increased in 1H 2010 YoY SALES VOLUME ( 000 TONS ) 6.986 5.895 5.947 1.858 Long 1.652 1 963 1.963 Long 1.665 Long 3.567 3.188 Cold 1.688 1.067 1.471 727 C ld Cold Cold 1.685 1.725 1.842 681 762 1.503 3.464 451 559 508 276 2.461 2.607 321 326 360 436 1 780 1.780 1 738 1.738 913 840 8

  17. Slide 17: Domestic sales revenue increased by 89% in 1H 2010 YoY

    Domestic sales revenue increased by 89% in 1H 2010 YoY NET SALES REVENUE ( MILLION TL ) 6 800 6.800 1.218 5.236 5.357 763 1.217 3.203 338 5.583 2.305 4.594 1.582 1.621 788 4.019 1.066 1.239 2.865 162 176 424 365 1 420 1.420 1 445 1.445 1 516 1.516 642 875 2010 2009 2010 2009 2010 2009 2009 2008 2007

  18. Slide 18: Domestic sales increased in 1H 2010

    Domestic sales increased in 1H 2010 1H 2010 FLAT STEEL DOMESTIC SALES BREAKDOWN ( %) 1H 2009 FLAT STEEL DOMESTIC SALES BREAKDOWN ( %) 2% 3% 4% 3% 6%2% 5% 4% 4% 6% 37% 47% 91% 13% 71% 14% 11% 11% 17% 11% Pipe and Profile Industry Secondary Production Pipe and Profile Industry Secondary Production Ste

  19. Slide 19: Sales to Brazil increased in 1H 2010

    Sales to Brazil increased in 1H 2010 1H 2010 FLAT STEEL EXPORTS BREAKDOWN ( %) 1H 2009 FLAT STEEL EXPORTS BREAKDOWN ( %) 1% 2% 6% 1% 9% 4% 2% 5% 3% 4% 6% 9% 7% 29% 59% 7% 17% 67% EU Brazil EU Brazil Israel Egypt Egypt USA Tunisia Ukraine China India Lebanon Other Bosnia Herzegovina Other 1H 2010 LON

  20. Slide 20: Average flat and long steel prices in 1H 2010

    In 1H 2010, Erdemir Group average flat and long steel prices were 687 USD/ton and 535 USD/ton respectively USD/TON Ereğli Flat Sales Price Ereğli Flat Cost of Sales Feb-08 Jun-08 Jan-08 Jul-08 Jul-09 Mar-08 Sep-08 Dec-08 Feb-09 Jun-09 Jan-09 Mar-09 Sep-09 Dec-09 Feb-10 Jun-10 Jan-10 Mar-10 May-08 Oc

  21. Slide 21: EBITDA increased by 771% in 1H 2010 YoY

    EBITDA increased by 771% in 1H 2010 YoY EBITDA ( MILLION TL ) 1 200 1.200 1.097 48 0% 48,0% 1.000 40,0% 800 751 775 32,0% 28,5% 600 24,0% 18,3% 461 23,5% 20,5% 400 382 16,0% 290 12,9% 11,4% 200 137 86 7,3% 8,0% -51 51 3,7% , 0 0,0% -4,1% -200 2010 2009 2010 2009 2010 2009 2009 2008 2007 -8,0% 1Q 2Q

  22. Slide 22: Medium term liquidity risk was significantly reduced through refinancing

    Medium term liquidity risk was significantly reduced through refinancing BORROWINGS ( MILLION USD ) BORROWINGS MATURITY PROFILE ( MILLION USD ) 3.314 2.998 1.516 ST Portion of LT Debt 2.767 Short-Term Debt 600 Long-Term g Debt 537 1.638 Liquid Funds 2.140 20 %85 347 907 1.468 264 23 72 1.076 313 2.2

  23. Slide 23: Raw materials made up 67% of the cost of goods sold in 1H 2010

    Raw materials made up 67% of the cost of goods sold in 1H 2010 COST OF PRODUCTION BREAKDOWN* - % 6% 4% 12% 6% 4% 6% 5% 8% 6% 14% 10% 13% 67% 68% 73% 2010 1H 2009 2008 Raw Materials Personnel Expenses Energy Depreciation Other RAW MATERIALS BREAKDOWN- % 9% 9% 8% 10% 8% 13% 1% 10% 21% 44% 31% 28% 40%

  24. Slide 24: Lowest level of fixed costs was attained in 2Q 2010

    Lowest level of fixed costs was attained in 2Q 2010 ( MILLION USD ) Total = 1.418 Total = 1.276 143 Total = 1.059 Total= 107 112 109 513 98 88 93 80 141 113 123 144 111 138 265 276 236 244 217 227 194 205 149 139 136 147 129 102 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2007 2008 2009 2010 Fixed Cos

  25. Slide 25: Overhead cost is decreasing in flat products

    Overhead cost is decreasing in flat products FLAT PRODUCTS ( USD/TON ) 207 156 154 151 136 138 135 131 85 94 90 78 86 89 99 90 85 88 83 74 70 66 72 73 75 4.871 59 63 61 4.871 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2007 4.816 2008 2009 4.816 2010 Fixed Cost Per Ton Variable Cost Per Ton LONG PRODU

  26. Slide 26: Capital expenditures of 285 million USD is planned for 2010

    Capital expenditures of 285 million USD is planned for 2010 ( M USD ) 940 928 116 694 673 562 590 130 37 362 435 824 285 200 543 524 51 332 141 339 12 234 235 129 2002 - 2005 2006 2007 2008 2009 2010 2011 2012 - After İskenderun Investments Ereğli Investments 26 / 27

  27. Slide 27: Number of employees decreased about 12% since 2007

    Number of employees decreased about 12% since 2007 due to voluntary redundancies and retirements NUMBER OF EMPLOYEES 15.063 14 598 14.598 14.637 14.056 13.272 13.161 2005 2006 2007 2008 2009 2010 June 27 / 27

  28. Slide 28: Q&A

    Q&A

Ereğli Demir ve Çelik Fabrikaları T.A.Ş. (Erdemir) — H1 2010 Earnings Presentation on 6ix