Severstal · RUS:CHMF
Severstal — Q2 2021 Earnings Presentation
20 slides from Severstal's earnings presentation, Jul 16, 2021
Slide 1: Q2 2021 Financial and Operational Results
Q2 2021 Financial and Operational Results 16.07.2021
Slide 2: Health and Safety Remains a Key Priority
Health and Safety Remains a Key Priority LTIFR dynamics Staff Staff+contractors 0.96 0.95 0.69 0.63 0.63 0.65 0.57 0.50 2017 2018 2019 2020 Q1 2021 Q2 2021 By 2025 we remain committed to eliminate all work-related fatalities and reduce LTIFR by 50% (compared with 2017) Starting from Q1 2021, Severst
Slide 3: Renewed targets to improve climate and environmental performance
Renewed targets to improve climate and environmental performance Short-term: To reduce CO2 emissions by 3% by 2023 Mid-term: To reduce CO2 emissions by 10% by 2030 tonnes of СО2 / tonnes of liquid steel vs. base year 2020 tonnes of СО2 / tonnes of liquid steel vs. base year 2020 CO2 emissions intens
Slide 4: Market prices have risen sharply due to demand recovering quickly
Market prices have risen sharply due to demand recovering quickly Steel HRC prices FOB Black Sea Global steel demand, yoy $/t $ mln 1,200 Worldwide China Outside of China 1,000 9.1 9.1 9.3 970 5.8 2.7 1.0 4.7 800 3.7 3.0 600 400 -1.4 -0.2 200 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 -10.0 So
Slide 5: Market Outlook
Market Outlook • Q2 2021 posted another record level of steel prices in export markets. Iron ore prices also tested all-time maximums due to strong demand in China and recovery of Ex China pig iron production. The coking coal market was divided between China and ex China due to the ban on imports fr
Slide 6: Q2 2021 Consolidated sales
Q2 2021 Consolidated sales 01 Steel output was down to 2.78 mln t (-6% qoq), Crude steel production Steel sales following by a reduction of hot metal output and Kt Kt 46% 49% seasonal repairs in BOF shop. 4,500 4,500 HVA share 60% 4,000 4,000 40% 3,500 02 Steel sales increased by 2% qoq to 2,678 kt
Slide 7: Q2 2021 Financial highlights
Q2 2021 Financial highlights Revenue EBITDA FCF EBITDA margin Net debt / EBITDA $ mln $ mln $ mln % x 2,946 1,647 936 56 0.37 + 33% qoq + 42% qoq + 88% qoq + 3.5 p.p. qoq - 29% qoq Revenue dynamic EBITDA dynamic $ mln $ mln 62.5% 23.1% 70.3% 32.0% 73.4% 37.0% 2,759 2,154 1,021 1,708 689 733 999 344
Slide 8: Sales by region
Sales by region Steel sales volumes by destination % Export 35% 30% 33% 36% 35% 41% 43% 42% 45% 52% Russia 65% 70% 67% 64% 65% 59% 57% 58% 55% 48% Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Revenue by region, Q2 2021 Revenue by region, 6m 2021 % % 3% 2% 2% 5% 5%
Slide 9: CAPEX projects launched in Q2 2021
CAPEX projects launched in Q2 2021 Completion of a new arc steelmaking furnace #1 Capacity: 1.3 million tonnes per year Construction of the 4th ASU. Launch – Q3/4 2023. Total production capacity after launch: above 8,000 t/day of oxygen Acquisition of 20% stake in NVTZ. Capacity: over 600 thousands
Slide 10: Divisional cost structure
Divisional cost structure Cherepovets Steel Mill production cash cost of slab, $/t Vorkutaugol (coking coal concentrate) Cost per tonne ($/t) Average selling price* ($/t) 89 93 91 75 457 335 90 71 79 323 334 321 322 325 342 331 355 346 372 69 302 306 271 250 252 270 293 Q1 2021 Q2 2021 6m 2020 6m 20
Slide 11: Cash Flow and Net Working Capital
Cash Flow and Net Working Capital 01 FCF increased by 88% qoq to $936 mln, driven by Q2 2021 EBITDA to FCF reconciliation higher EBITDA. $ mln 02 Cash CAPEX amounted to $273 mln (-2% qoq). EBITDA 1,647 03 NWC balances increased to $846 mln in Q2 2021 (Q1 2021: $724m), NWC/LTM revenue was down to 9.7
Slide 12: Robust Liquidity and Sustainable Leverage
Robust Liquidity and Sustainable Leverage 01 Cash and cash equivalents decreased to $783 mln Robust Liquidity and Sustainable Leverage (-15% qoq) on the back of dividend payments and $ mln convertible bonds' conversion rights execution 0.77 0.84 0.52 0.37 02 Total debt declined to $2,324 mln (-7% qo
Slide 13: Annex
a Severstal , ne oe Ns
Slide 14: Divisional results
Divisional results Severstal Resources Q2 2021 Q1 2021 Change, % H1 2021 H1 2020 Change, % Revenue ($m) 999 747 33.7% 1,746 802 117.7% Cost of sales ($m) (272) (246) 10.6% (518) (476) 8.8% G&A expenses ($m) (19) (18) 5.6% (37) (42) (11.9%) Distribution expenses ($m) (24) (7) 242.9% (31) (12) 158.3%
Slide 15: Summary IFRS results
Summary IFRS results Summary Income Statement Summary Cash Flow Statement $ million, unless otherwise stated Q2 2021 Q1 2021 H1 2021 H1 20201 $ million Q2 2021 Q1 2021 H1 2021 H1 2020 Revenue 2,946 2,219 5,165 3,295 Profit before Financing and Taxation COGS (1,193) (947) (2,140) (1,982) 1,494 1,007
Slide 16: Consolidated operational highlights
Consolidated operational highlights Consolidates sales Q2 2021 Q1 2021 qoq 6m 2021 6m 20201 yoy by product, kt Coal: 282 345 (18%) 627 757 (17%) Coking coal concentrate 38 35 9% 73 169 (57%) Steam coal 244 310 (21%) 554 588 (6%) Iron ore: 1,310 1,024 28% 2,334 3,172 (26%) Iron ore pellets 1,309 978
Slide 17: Divisional operational highlights - Russian Steel Division
Divisional operational highlights - Russian Steel Division Sales by product, kt Q2 2021 Q1 2021 qoq 6m 2021 6m 20201 yoy Total steel products 2,691 2,642 2% 5,333 5,147 4% Semi-finished products 317 259 22% 576 205 181% Hot-rolled coil and plate 1,101 1,192 (8%) 2,293 2,770 (17%) Cold-rolled coil 28
Slide 18: Divisional operational highlights - Russian Steel Division prices
Divisional operational highlights - Russian Steel Division prices Sales price, $/tonne Q2 2021 Q1 2021 qoq 6m 2021 6m 2020 yoy Semi-finished products 624 527 18% 581 376 55% Hot-rolled coil and plate 846 627 35% 732 453 62% Cold-rolled coil 1,001 752 33% 882 556 59% Galvanized and metallic coated co
Slide 19: Divisional operational highlights - Resource Division
Divisional operational highlights - Resource Division Sales by product, kt Q2 2021 Q1 2021 qoq 6m 2021 6m 2020 yoy Coal 1,149 1,298 (11%) 2,447 2,815 (13%) Coking coal concentrate 905 988 (8%) 1,893 2,227 (15%) Steam coal 244 310 (21%) 554 588 (6%) Iron ore 4,659 4,142 12% 8,801 8,872 (1%) Iron ore
Slide 20: Thank you for your attention
a Severstal for your attention , \_