Mmk · RUS:MAGN
Mmk — Investor Presentation (November 2009)
24 slides from Mmk's investor presentation, November 2009
Slide 1: Organic Growth Strategy
MAGNITOGORSK IRON & STEEL WORKS Organic Growth Strategy Presentation for Investors November 2009
Slide 2: MMK highlights
MMK highlights № 23 in the global 2008 steel-makers rating; № 1 among crude and finished steel producers in Russia, MMK share of the domestic market in 2008 – 20%; Conservative strategy with focus on organic growth; The broadest products range among Russian and CIS peers; The largest stand-alone pro
Slide 3: MMK assets geography
MMK assets geography Single-site production complex in Magnitogorsk Mining and processing assets, including Belon ZAO Profit - the integrated network of scrap collectors Metal-service centers network International assets: ММК–Atakas (Turkey) Moscow ММК-Метиз MMK-Metiz SSGPO ENRC Kuznetsk coal basin
Slide 4: MMK products
MMK products MMK products, 2008 Further application of MMK products Hot-rolled sheet Picture 5.66 mln tons (51,9%) Cold-rolled sheet Picture 1.36 mln tons (12,5%) Long products Picture 1.58 mln tons (14,5%) Picture Downstream 1.36 mln tons (12,5%) Billets ang slabs 0.95 mln tons (8,7%) Pro
Slide 5: MMK key advantages
MMK key advantages Broad product mix Low debt level Modernized assets base High level of self- Competitive edge in costs sufficiency in raw materials and electricity Successful crisis- management programme 5
Slide 6: Leading positions in the industry
Leading positions in the industry Sales strategy Leading positions in HVA products Products MMK share in % of MMK № 1 in Russia in finished steel products Russia's total production The leader among high value added steel producers HR flat products 42% 52% 1 The largest Russian steel producer. Domest
Slide 7: Efficient sales policy
Efficient sales policy Sales strategy Sales structure by products, 1H09 Th. tons Domestic market takes the largest part of MMK 1500 100% sales. It allows MMK to get the domestic market 90% 1000 80% price premium - up to 15-20% (in comparison 70% 500 with export) 60% The largest part of HVA products
Slide 8: Strong domestic market position
Strong domestic market position Domestic market growth strategy Domestic market sales structure by products FY08 Increase of high-value added products output 17% 21% Creation of metal-service centers network and Long products effective logistics system Integration with MMK products consumers HRC 12%
Slide 9: Access to growing export markets
Access to growing export markets Export market strategy Export sales structure by products Key export regions - fast growing markets of FY08 4% Billets and Slabs Middle East, Asia and Pacific Rim 13% 25% Long products MMK expands access to perspective export markets by building new mills and metal-s
Slide 10: Sufficiency in Electricity, Iron Ore and Coal
Sufficiency in Electricity, Iron Ore and Coal Iron ore supplies structure Coal supplies structure 100% 100% 90% 90% 80% 80% 70% 70% 71% 73% 71% 72% 68% 71% 60% 81% 81% 75% 74% 84% 60% 86% 50% 50% 40% 40% 30% 30% 20% 20% 29% 27% 29% 28% 32% 29% 10% 16% 19% 19% 25% 26% 10% 14% 0% 0% 1Q08 2Q08 3Q08 4Q0
Slide 11: Effective crisis-management programme
Effective crisis-management programme Key measures Profitability dynamics 30 000 RUR/t th. tons 1 200 Re-negotiation of raw-material prices with key suppliers 25 000 1 000 Increase of in-house production of raw materials 800 20 000 Decrease of consumption ratios 600 15 000 Optimization of production
Slide 12: Investment programme
Investment programme Crude steel and finished steel production dynamics 14000 th. tons 11 957 12000 10 911 10000 8000 6 688 5 863 6000 4000 2000 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Crude steel Finished steel Source: ММК CAPEX dynamics, mln. USD 1 595 Effect of the inve
Slide 13: Plate Mill 5000
Plate Mill 5000 Further application of Plate Mill 5000 products Only 8 companies (located in Germany, France and Japan) are able to produce plate with comparable characteristics Project completion time under SMS Demag contract: 32 months Investments: USD 1.4 billion Construction pipeline: Nov. 7, 20
Slide 14: Automotive CR Sheet, Intercos-IV
Automotive CR Sheet, Intercos-IV MILL 2000 - AUTO BODY SHEET PRODUCTION Intercos-IV project geography Implementation of the Project will allow to produce high quality auto body sheet meeting the requirements of Intercos-IV international auto makers (GM, Ford, Toyota, etc ) Contract signed with SMS D
Slide 15: Access to the Growing Turkish Market
Access to the Growing Turkish Market Project geography, Turkey Consumption by products, kt Istanbul 11 667 12000 9000 8 245 5 500 5 646 6000 5 040 4 694 3 317 2658 3000 2 028 2 213 2 271 1879 1148 1253 1286 0 ВыходIskanderun на быстрорастущий 2004 рынок Турции 2005 2006 2010E 2015E HR sheet CR sheet
Slide 16: MMK long-term investment programme
MMK long-term investment programme Crude steel output Finished steel output Expected finished steel output 14.3 mln t. 14.3 mln t. 14.3 mln t. 13.3 mln t. 14.3 mln t. 13.3 mln t. 14.3 mln t. 13.3 mln t. 13 mln t. 13.3 mln t. 13 mln t. 13..2 mln t. 13.2 mln t. 13 mln t. 12.0 mln t. 12 mln t. • Cold r
Slide 17: Increasing exposure to HVA products
Increasing exposure to HVA products th. tons 100% 12 000 90% 80% 10 000 70% 8 000 54% 7 047 60% 50% 6 000 4 887 38% 34% 40% 30% 30% 4 402 4 000 25% 30% 3 610 2 721 20% 2 000 2 575 10% 0 0% 2008 2009 2010 2011 2012 2013 Downstream products Cold-rolled products Wide plates (Mill 5000) Other products H
Slide 18: Financial highlights
Financial highlights Key figures dynamics Key figures млн. US$ 13000 2800 2Q09 1Q09 FY08 FY07 FY06 10550 11000 Crude steel, th. tons 2 159 2 070 11 957 13 261 12 455 9000 8197 1800 6424 Finished steel, th. tons 1 919 1 917 10 911 12 203 11 346 7000 1038 965 5000 Sales, mln USD 1 038 965 10 550 8 197
Slide 19: Key figures of MMK and peers
Key figures of MMK and peers Margin dynamics Russian steel companies debt level 35% mln USD 30,4% 30% 29,4% 10000 25% 22,2% 21,6% 8000 20% 20,9% 19,9% 6 064 15% 6000 10% 10,2% 10,3% 6 278 9 111 5% 5,7% 4000 0% 4 860 2000 431 1 930 3 922 -5% 2006 2007 2008 1Q2009 2Q2009 1 014 603 1 978 1 295 1 080 -1
Slide 20: Debt level
Debt level Debt level Debt structure by maturity mln. US$ Debt level remains low 1500 405 Short-term debt decreased in 1H09; 200 709 1200 3/4 of debt is nominated in USD 900 90% of debt has a floating interest rate, which allows to lower cost of MMK debt after decline of LIBOR 600 577 1 198 1 276 88
Slide 21: Acquisition of Belon to boost efficiency
Acquisition of Belon to boost efficiency Belon structure Mining facilities Processing facilities 2008 1H09 Belovskaya steam coal - 2 634 th tons steam coal - 1 312 th tons 2008 output - 4 977 th tons coking coal - 2 889 th tons coking coal - 1 810 th tons 1H09 output - 2 618 th tons Listvyajnaya 200
Slide 22: Geography of Belon assets
Geography of Belon assets St. Petersburg Archangelsk Moscow Belgorod Kemerovo Compact space (radius 60 km) – effective management and logistics Magnitogorsk Tomsk Krasnoyarsk Novosibirsk Listvyajnaya Kostomovskaya enrichment plant Irkutsk mine Listvayjnaya mine Transporting distance – 2125 km. Belov
Slide 23: Belon development prospects
Belon development prospects Investment programme objectives Coking coal output, th. tons 8000 Implementation of the programme will allow to: 7000 increase coking coal production up to 7 mt by 2013 6000 increase coal concentrate output to 4,3 mt by 2013 5000 increase profitability through runni
Slide 24: Disclaimer
Disclaimer •THIS PRESENTATION IS FOR INFORMATION ONLY. •THIS PRESENTATION IS FOR DISTRIBUTION IN UK ONLY AMONG THE PEOPLE HAVING PROFESSIONAL SKILL IN THE ISSUES RELATED TO INVESTMENTS WITHIN THE MEANING OF ARTICLE 19(5) OF DIRECTIVE ON FINANCIAL ADVERTISEMENT APPROVED IN 2005 ON THE BASIS OF LAW ON
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