Severstal · RUS:CHMF
Severstal — Q3 2017 Earnings Presentation
22 slides from Severstal's earnings presentation, Oct 18, 2017
Slide 1: Q3 2017 Financial Results Presentation
Q3 2017 Financial Results Presentation 18 October 2017
Slide 2: Table of Contents
3 Q3 2017 Results Overview Table of Contents 7 Divisional Performance and Market Outlook 11 Financial Position 16 Appendices
Slide 3: Q3 2017 Results Overview
Severstal Q3 2017 Results Overview Achieve more together
Slide 4: Summary
Summary Q3 2017 Highlights: Group revenue marginally increased 2.1% q/q to $1,972 million (Q2 2017: $1,931 million) as growth in sales volumes was mitigated by a decline in steel and raw material average selling prices in Q3 2017. Group EBITDA* declined 2.1% q/q to $616 million (Q2 2017: $629 mi
Slide 5: Revenue divisional dynamics
Revenue divisional dynamics Revenue (m$) Q1 17– Q3 17: Q3 2017 Group Revenue: $1,972 m (Q2 2017: $1,931m; up 2.1%). Group revenue increased q/q on the back of sales volumes growth at Russian Steel division. 1,756 1,847 1,623 Severstal Resources revenue decline was due to a decline in iron ore co
Slide 6: EBITDA divisional dynamics
EBITDA divisional dynamics EBITDA (m$) Q1 17– Q3 17: 50.5% 50.5% 43.3% 25.2% 24.3% 21.1% Q3 2017 Group EBITDA: $616m (Q2 2017: $629m; down 2.1%). Group EBITDA declined q/q due to input costs growth. 409 370 449 Positive Q3 intersegment EBITDA was a result of unrealised 214 238 profit gain adjust
Slide 7: Divisional Performance and Market Outlook
Divisional Performance and Market Outlook
Slide 8: Severstal Russian Steel (RSD)
Severstal Russian Steel (RSD) RSD steel product sales improved 4% to 2.87 mln tonnes compared with the previous quarter (Q2 2017: 2.76 EBITDA per tonne and average selling price mln tonnes). The Company increased domestic sales volumes to 65% (Q2 2017: 60%) to respond to improved domestic EBITDA
Slide 9: Cost Control at Severstal Russian Steel
Cost Control at Severstal Russian Steel Cherepovets Steel Mill production cash cost of slab, $/t 457 457 432 418 401 409 370 377 361 350 327 334 323 Q3 17 non-integrated Cherepovets 302 cash cost of slab cash cost of 259 down $32/t q/q 255 250 slab at market 221 213 price of raw 214 206 203 material
Slide 10: Severstal Resources
Severstal Resources Average selling price and cash cost per tonne Coking coal concentrate sales volumes from Vorkutaugol increased 11% driven by growth in Cost per tonne (US$/t) Average Selling Price (US$/t)* Vorkutaugol coking coal production volumes following the planned long-wall repositioning
Slide 11: Financial Position
Severstal Financial Position Achieve more together
Slide 12: Cash Flow and Net Working Capital
Cash Flow and Net Working Capital EBITDA to Free Cash flow Q3 2017 Highlights: reconciliation for Q3 17, m$ Q3 17 free cash flow of $507m on the back of earnings growth EBITDA Q3 2017 616 and working capital decline cash CAPEX (144) Q3 17 cash CAPEX of $144m, 3.6% higher q/q (Q2 17: $139m) inter
Slide 13: Robust Liquidity and Sustainable Leverage
Robust Liquidity and Sustainable Leverage At the end of Q3 2017, cash and cash equivalents totalled $1,990 million (Q2 2017: $1,895 million) reflecting the net effect of free cash flow generation offset by the dividend payout. Total Short-term Debt to be Repaid of $1,152m* Gross debt remained re
Slide 14: Debt Structure
Debt Structure As at 30.09.2017, the debt structure was dominated by public debt with vast majority in US dollars (99.5%). Debt Maturity Schedule*, $m 880 701 603 549 1 1 2017 2018 2019 2020 2021 2022+ Notes: Debt represents the principal amount of debt. Debt for 2017 represents amount of debt as at
Slide 15: Market Outlook
Market Outlook Global: Global steel production grew by 6.3% y-o-y in August driven by increased Chinese production. Capacity cuts in China drove up capacity utilisation to 85%, which led to steelmaking margin expansion. On 6 October, 2017 the EU Commission imposed definitive anti-dumping dutie
Slide 16: Appendices
Severstal Appendice Achieve more together
Slide 17: Summary Income Statement
Summary Income Statement $ million, unless otherwise stated Q3 2017 Q2 2017 9M 2017 9M 2016 Revenue 1,972 1,931 5,670 4,265 COGS (1,243) (1,170) (3,459) (2,575) EBITDA 616 629 1,823 1,383 EBITDA margin, % 31.2% 32.6% 32.2% 32.4% Profit from operations 502 528 1,506 1,082 Operating margin, % 25.5% 27
Slide 18: Q3 2017 Revenue Breakdown by Region
Q3 2017 Revenue Breakdown by Region Severstal Group Q3 2017 revenue Severstal Russian Steel Q3 2017 revenue breakdown by region breakdown by region 1%; Asia 1%; Africa 1%; Asia 1%; Africa 6%; CIS 4%; Americas 6%; CIS 4%; Americas 7%; Middle 7%; Middle East East 17%; Europe 14%; Europe 64%; Russia 67
Slide 19: Q3 2017 Divisional Results
Q3 2017 Divisional Results Severstal Resources Q3 2017 Q2 2017 Change, % 9M 2017 9M 2016 Change, % Revenue ($m) 358 471 (24.0%) 1,253 806 55.5% Cost of sales ($m) (188) (209) (10.0%) (579) (506) 14.4% G&A expenses ($m) (15) (15) 0.0% (45) (35) 28.6% Distribution expenses ($m) (34) (34) 0.0% (103) (8
Slide 20: Summary Balance Sheet
Summary Balance Sheet $ million As at 30 September 2017 As at 31 December 2016 Cash and Cash Equivalents 1,990 1,154 Total Assets: 7,883 6,483 Current Assets 3,883 2,808 Non-current Assets 4,000 3,675 Total Liabilities: 4,586 3,442 Current Liabilities 2,530 1,796 Non-current Liabilities 2,056 1,646
Slide 21: Summary Cash Flow Statement
Summary Cash Flow Statement $ million Q3 2017 Q2 2017 9M 2017 9M 2016 Profit before Financing and Taxation 492 172 1,129 1,038 Cash Generated from Operations 684 594 1,561 1,112 Interest Paid (28) (44) (92) (107) Income Tax Paid (24) (44) (141) (69) Net cash from Operating Activities 632 506 1,328 9
Slide 22: Disclaimer
Disclaimer These materials are confidential and have been prepared by PAO Severstal (Severstal) solely for your information and may not be reproduced, retransmitted or further distributed to any other person or published, in whole or in part, for any other purpose. These materials may contain projec