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 2015 Earnings Presentation

37 slides from Eregli Demir Ve Celik Fabrikalari T.a.s's earnings presentation, Nov 4, 2015

  1. Slide 1: Erdemir Group

    © ErdemirGroup ay FUTURE MADE OF STEEL | YEARS

  2. Slide 2: 2015 9 Months Consolidated Results

    2015 9 Months Consolidated Results 04 November 2015 2 04.11.2015

  3. Slide 3: Disclaimer

    DISCLAMIER 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

  4. Slide 4: 2015 Market Overview, 9M Results, Guidance

    ˃ 2015 Market Overview ˃ 2015 9M Results ˃ 2015 Guidance 4 04.11.2015

  5. Slide 5: Crude steel production and HRC prices

    -15% -10% 10% 15% -5% 0% 5% -10% 10% 15% -5% 0% 5% 5 Sep-10 Sep-10 Dec-10 Dec-10 Mar-11 Mar-11 Jun-11 Jun-11 Sep-11 Sep-11 04.11.2015 Dec-11 Dec-11 Mar-12 Mar-12 Jun-12 Jun-12 Sep-12 Sep-12 Dec-12 Dec-12 Mar-13 Mar-13 Jun-13 Jun-13 Source : * Worldsteel ** Bloomberg Sep-13 Sep-13 as of October 2015

  6. Slide 6: Iron ore price was 52 USD/ton as of October 2015

    Iron ore price was 52 USD/ton as of October 2015 COKING COAL PRICES IRON ORE PRICES USD/TON (HCC PEAK DOWNS REGION FOB AUSTRALIA) (IODEX 62% FE CFR NORTH CHINA MID) USD/TON 150 140 140 120 130 120 100 110 100 80 90 60 80 70 40 10.2013 12.2013 02.2014 04.2014 06.2014 08.2014 10.2014 12.2014 02.2015 0

  7. Slide 7: October EU HRC sales price lower than last year

    October EU HRC sales price was 214 USD/ton lower than last year’s same month HRC PRICES ( USD/Ton ) 700 600 500 400 300 200 Jun-14 Feb-13 Feb-14 Feb-15 Apr-13 Jun-13 Apr-14 Apr-15 Jun-15 Oct-15 Oct-12 Oct-13 Oct-14 Aug-13 Aug-14 Aug-15 Dec-12 Dec-13 Dec-14 CIS EXPORT HRC BLACKSEA/BALTIC EU HRC CHINA

  8. Slide 8: Billet sales prices are significantly lower in China

    Billet sales prices are significantly lower in China BILLET PRICES ( USD/Ton ) 600 500 400 300 200 Feb-14 Feb-13 Feb-15 Jun-13 Jun-14 Jun-15 Oct-12 Oct-13 Oct-14 Oct-15 Aug-13 Aug-14 Aug-15 Dec-13 Dec-12 Apr-14 Dec-14 Apr-13 Apr-15 BILLET CHINA EXPORT BILLET LATIN AMERICAN EXPORT BILLET IMPORT TURKE

  9. Slide 9: Imbalance between Turkish production and consumption growth

    The imbalance between increase rates of Turkish production and consumption is due to semi-product imports. PRODUCTION ( 000 TONS ) 36.093 36.406 34.286 31.943 10.376 9.869 27.906 27.028 9.039 26.300 9.075 6.629 7.974 7.446 25.717 26.537 25.247 22.868 19.671 19.932 19.582 2014 2013 2012 2011 2010 201

  10. Slide 10: Turkish iron and steel product imports increased by 43%

    Turkish iron and steel product imports increased by 43% in 2015 9M YoY IRON AND STEEL PRODUCT EXPORTS ( 000 TONS ) 16.549 15.226 15.239 14.137 21 14.465 1 1.858 60 10.688 36 212 9.813 2.353 2.298 25 2.505 2.957 1.520 0,4 1.561 1.812 568 2.393 3.523 1.814 251 502 11.028 11.311 11.713 10.489 8.349 9.2

  11. Slide 11: Contraction in the construction sector is expected

    Contraction in the construction sector is expected CHANGES IN SECTOR DEVELOPMENT INDEX (% YoY) 40% 35% 33,4% 30% 32,6% 25% 22,1% 20% 20,0% 18,3% 15% 16,0% 12,0% 10% 7,4% 5,5% 11,3% 5,5% 7,1% 3,9% 2,7% 4,0% 5% 11,2% 6,8% 4,0% 0% 2,8% 2,0% 0,6% 1,4% 1,0% -5% -5,5% -10% 2010 2011 2012 2013 2014 2015 (e

  12. Slide 12: 2015 Market Overview, 9M Results, Guidance

    ˃ 2015 Market Overview ˃ 2015 9M Results ˃ 2015 Guidance 12 04.11.2015

  13. Slide 13: Erdemir Group Key Figures

    ERDEMİR GROUP KEY FIGURES 2015 9M 2014 9M 2014 2013 Liquid Steel Production (000 Tons) 6.811 6.369 8.693 8.447 (1) Slab Production (000 Tons) 5.581 5.441 7.363 6.865 (2) Flat Steel Production (000 Tons) 5.558 5.223 6.954 6.427 Long Steel Production (000 Tons) 1.046 819 1.153 1.356 Flat Steel Shipmen

  14. Slide 14: Liquid steel production was 6,8 million tons in 2015 9M

    Liquid steel production was 6,8 million tons in 2015 9M YoY LIQUID STEEL PRODUCTION ( 000 TONS ) 8.693 8.447 8.042 6.811 6.369 2.092 2.135 2.370 2.349 2.235 1.999 2015 2014 2015 2014 2015 2014 2015 2014 2014 2013 2012 1. Quarter 2. Quarter 3. Quarter 9 Months 14 04.11.2015

  15. Slide 15: Capacity utilization ratio higher than world average

    Crude steel capacity utilization ratio of ERDEMİR Group is higher than world average CRUDE STEEL CAPACITY UTILIZATION RATIO 99,8% 100% 95,5% 95% 92,8% 90% 88,4% 84,1% 85% 80,2% 80% 78,3% 77,9% 76,3% 75% 70,7% 70% 65% 2011 2012 2013 2014 2015 9M Erdemir Group World 15 04.11.2015 Source: Worldsteel

  16. Slide 16: Production increased by 9% in 2015 9M YoY

    Production increased by 9% in 2015 9M YoY PRODUCTION VOLUMES ( 000 TONS ) 8.107 7.783 7.501 1.153 6.604 1.356 1.519 6.042 1.046 1.746 819 1.844 1.598 1.373 1.288 2.065 2.352 1.910 2.187 2.140 1.992 5.208 241 228 4.583 4.384 395 410 274 4.185 3.935 317 468 447 411 410 458 467 1.377 1.264 1.489 1.272

  17. Slide 17: Sales volumes increased by 4% in 2015 9M YoY

    Sales volumes increased by 4% in 2015 9M YoY SALES VOLUMES ( 000 TONS ) 8.096 7.684 7.448 1.163 1.346 6.316 1.468 6.089 1.741 1.014 848 1.778 1.627 1.322 1.299 1.992 2.299 1.973 2.093 5.192 242 2.023 2.025 406 205 4.560 4.353 352 366 291 3.980 3.942 454 459 423 444 432 409 1.296 1.239 1.434 1.345 1.

  18. Slide 18: Net sales revenue was 3,4 billion USD in 2015 9M

    Net sales revenue was 3,4 billion USD in 2015 9M YoY NET SALES REVENUE ( MILLION USD ) 5.252 5.340 5.142 627 580 771 3.975 3.356 491 303 4.625 4.562 4.569 1.366 3.484 1.179 1.324 1.190 1.285 3.053 174 178 987 139 81 124 98 1.098 1.150 1.066 1.107 1.227 889 2015 2014 2015 2014 2015 2014 2015 2014 201

  19. Slide 19: Sales to automotive industry increased in 2015 9M

    Sales to automotive and components industry increased in 2015 9M YoY 2015 9M FLAT STEEL DOMESTIC SALES BREAKDOWN (%) 2014 9M FLAT STEEL DOMESTIC SALES BREAKDOWN (%) 450Kt; 9% 436Kt; 9% 242Kt; 5% 248Kt; 5% 510Kt; 11% 452Kt; 10% 4.875Kton; 2.166Kt; 4.719Kton; 44% 2.192Kt; 191Kt; 4% 92% 186Kt; 4% 90% 4

  20. Slide 20: Flat steel sales to EU countries was 62% of flat export

    Flat steel sales to EU countries was 62% of our flat export in 2015 9M 2015 9M FLAT STEEL EXPORTS BREAKDOWN (%) 2014 9M FLAT STEEL EXPORTS BREAKDOWN (%) 29Kt; 7% 6Kt; 1% 49Kt; 9% 11Kt; 3% 30Kt; 6% 49Kt; 12% 266Kt; 62% 81Kt; 244Kt; 427Kton; 15% 522Kton; 47% 8% 10% 64Kt; 15% 119Kt; 23% 2015 9M LONG ST

  21. Slide 21: Average flat and long steel prices and cost of sales

    21 Sep-13 Sep-13 USD/TON USD/TON Oct-13 Oct-13 04.11.2015 Nov-13 Nov-13 Dec-13 Dec-13 Jan-14 Jan-14 Feb-14 Feb-14 Mar-14 Mar-14 Apr-14 Apr-14 May-14 May-14 Jun-14 Jun-14 Jul-14 Jul-14 Aug-14 Aug-14 Erdemir Group Flat Sales Price Erdemir Group Long Sales Price Sep-14 Sep-14 Oct-14 Oct-14 Nov-14 Nov-1

  22. Slide 22: EBITDA decreased by 16% in 2015 9M YoY

    EBITDA decreased by 16% in 2015 9M YoY EBITDA ( MILLION USD ) 1.136 1.200 987 48,0% 1.000 848 40,0% 712 800 604 32,0% 600 24,0% 21,1% 21,3% 21,9% 19,8% 20,5% 31222,8% 21,2% 21,3% 21,6% 19,2% 400 249 282 261 254 16,0% 202 11,3% 200 8,0% 0 0,0% 2015 2014 2015 2014 2015 2014 2015 2014 2014 2013 2012 1.

  23. Slide 23: EBITDA was 712 million USD in 2015 9M

    EBITDA was 712 million USD in 2015 9M Consolidated EBITDA => Consolidated Net Profit (Million USD) 23 04.11.2015

  24. Slide 24: Dividend payment didn't have a negative effect on liquidity

    Due to the cash, which is provided from working capital, high dividend payment didn’t have a negative effect on liquidity Consolidated EBITDA => Consolidated Net Cash (Million USD) 24 04.11.2015

  25. Slide 25: EBITDA per ton for flat product was 97 USD/ton

    EBITDA per ton for flat product was 97 USD/ton in 2015 3Q EBITDA PER TON (USD/TON) 153 150 148 141 143 144 130 124 142 113 135 126 125 108 100 100 113 97 111 88 107 101 92 94 89 61 64 67 54 24 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2012 2013 2014 2015 Flat Long 25 04.11.2015

  26. Slide 26: Working capital decrease was the reason of decline in receivables

    Working capital decrease was the reason of the decline in trade receivables and inventory which was caused by falling commodity prices CONSOLIDATED NET ASSETS (MILLION USD) WORKING CAPITAL (MILLION USD) 26 04.11.2015

  27. Slide 27: Despite high dividend payments, net debt has been decreasing

    Despite the high dividend payments, net debt has been decreasing BORROWINGS (MILLION USD) 3.785 1.976 2.529 2.479 1.924 787 1.945 1.135 1.640 1.452 1.472 1.369 693 1.283 891 655 1.809 1.742 1.344 529 947 581 709 166 2010 2011 2012 2013 2014 2015 9M Long-Term Debt Short-Term Debt Net Debt 27 04.11.20

  28. Slide 28: Net debt was 166 million USD at end of September 2015

    Net debt was 166 million USD at the end of September 2015 NET DEBT (MILLION USD) 28 04.11.2015

  29. Slide 29: Cash and cash equivalents and borrowings maturity profile

    Erdemir Group has 1.198 million USD cash and cash equivalents at the end of September 2015 BORROWINGS MATURITY PROFILE (MILLION USD) 1.198 377 8 318 331 27 14 61 178 314 8 117 317 3 230 170 114 1 55 57 1 Sept.15 2015 Oct.-Dec. 2016 2017 2018 2019 2020 2021 Cash 2015 Principal Revolving Trade Financi

  30. Slide 30: Raw materials made up 71% of cost of sales

    Raw materials made up 71% of the cost of sales COST OF SALES BREAKDOWN* - % 5% 5% 4% 5% 5% 0,1% 5% 1% 5% 1% 4% 7% 7% 7% 6% 12% 12% 11% 11% 71% 71% 73% 74% 2015 9M 2014 2013 2012 Raw Materials Personnel Expenses Purchased Energy Expenses Depreciation and Amortization Exp. Non-operating Expenses Other

  31. Slide 31: Flat conversion cost per ton was 124 USD/ton in 2015 3Q

    Flat conversion cost per ton excluding depreciation was realised as 124 USD/ton in 2015 3Q FLAT PRODUCTS ( USD/TON )* 500 1.797 1.867 1.823 1.958 1.777 2.100 1.651 1.675 1.682 1.731 450 1.600 400 1.378 1.600 350 300 1.100 250 200 600 150 90 85 87 87 82 78 80 81 75 68 70 100 100 50 0 67 70 72 65 60 6

  32. Slide 32: Capital expenditures of 479 million USD planned for 2015

    Capital expenditures of 479 million USD is planned for 2015* ( M USD ) 1.017 718 634 611 961 479 445 675 576 264 242 357 611 377 200 158 162 162 120 171 159 143 82 60 140 107 68 43 56 59 57 93 83 55 80 60 122 17 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015 2016 - 9M 2019 Fixed Assets

  33. Slide 33: Number of employees was 12.699 as of September 2015

    Number of employees was 12.699 as of September 2015 NUMBER OF EMPLOYEES 13.553 13.433 13.045 12.872 12.801 12.699 2010 2011 2012 2013 2014 2015 September 33 04.11.2015

  34. Slide 34: 2015 Market Overview, 6M Results, Guidance

    ˃ 2015 Market Overview ˃ 2015 6M Results ˃ 2015 Guidance 34 04.11.2015

  35. Slide 35: 2015 Guidance

    2015 Guidance Production (Million Tons) Sales (Million Tons) 8,1 8,5 8,1 8,5 6,9 7,3 6,9 7,3 1,2 1,2 1,2 1,2 2014 Actual 2015 Budget 2014 Actual 2015 Budget Long Flat Long Flat 35 04.11.2015

  36. Slide 36: 2015 Guidance: EBITDA and Net Profit Margins

    2015 Guidance EBITDA and Net Profit Margins ˃ In 2014; EBITDA and Net Profit Margins were 21.6% and 13.9% respectively. ˃ In 2015; EBITDA and Net Profit Margins are expected to be 17-19% and 9-11% respectively. 36 04.11.2015

  37. Slide 37: Erdemir Group

    O ErdemirGroup IO. FUTURE MADE OF STEEL |YEARS 37 04.11.2015

Ereğli Demir ve Çelik Fabrikaları T.A.Ş. (Erdemir) — 9M 2015 Earnings Presentation on 6ix