Severstal · RUS:CHMF
Severstal — Q2 2018 Earnings Presentation
22 slides from Severstal's earnings presentation, Jul 19, 2018
Slide 1: Q2 2018 Financial Results Presentation
Q2 2018 Financial Results Presentation 19 July 2018
Slide 2: Table of Contents
3 Q2 2018 Results Overview Table of Contents 7 Divisional Performance and Market Outlook 11 Financial Position 16 Appendices
Slide 3: Q2 2018 Results Overview
Severstal Q2 2018 Results Overview Achieve more together
Slide 4: Summary
Summary Q2 2018 Highlights: Group revenue increased 4.0% to $2,259 million (Q1 2018: $2,173 million) largely driven by higher sales volumes in the Resources division in Q2 2018. Group EBITDA* improved significantly, up 23.8% q/q, to $874 million (Q1 2018: $706 million). This EBITDA increase was
Slide 5: Revenue & EBITDA divisional quarterly dynamics
Revenue & EBITDA divisional quarterly dynamics Revenue (m$) Q2 17– Q2 18: Q2 2018 Group Revenue: $2,259m (Q1 1,756 1,847 1,956 2,025 2,036 2018: $2,173m; up 4.0%). Group revenue increased as a result of higher sales 471 358 474 402 475 volumes at the Resources division. (296) (233) (252) (254) (25
Slide 6: +$350m EBITDA 2018 programme progress: key drivers from H1 2017 to H1 2018
+$350m EBITDA 2018 programme progress: key drivers* from H1 2017 to H1 2018 39 76 165 93 Additional effect of $208m y/y 1,580 1,207 1,372 1. 2. 3. 4. EBITDA H1 2017 Macro factors: selling EBITDA adjusted for macro Sales&Marketing, Smart procurement Operational efficiency EBITDA H1 2018 prices and CO
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 declined to 2.86 mln tonnes in Q2 2018 (Q1 2018: 2.87 mln tonnes). Domestic sales increased to 64% (Q1 2018: 52%) reflecting a more attractive pricing environment driven by the commencement of construction season in Russia. The share of high
Slide 9: Cost Control at Severstal Russian Steel
Cost Control at Severstal Russian Steel Cherepovets Steel Mill production cash cost of slab, $/t 409 370 377 361 350 327 334 335 Q2 18 non-integrated 323 321 322 cash cost of slab 302 down $13/t q/q as a Cherepovets 255 259 result of RUB 250 cash cost of devaluation 214 221 slab at market 206 203 21
Slide 10: Severstal Resources
Severstal Resources Average selling price and cash cost per tonne Coking coal concentrate sales volumes from Vorkutaugol grew 19% Cost per tonne (US$/t) Average Selling Price (US$/t)* Vorkutaugol coking coal largely driven by higher production volumes of “2ZH”, “GZHO” and 150 143 137 (concentrate)
Slide 11: Severstal Financial Position
Severstal Financial Position Achieve more together
Slide 12: Cash Flow and Net Working Capital
Cash Flow and Net Working Capital EBITDA to Free Cash flow Q2 2018 Highlights: reconciliation for Q2 18, m$ Q2 18 free cash flow of $598m saw an increase as a result of net EBITDA Q2 2018 874 working capital decline due to positive effect of changes in cash CAPEX receivables and inventories. inter
Slide 13: Robust Liquidity and Sustainable Leverage
Robust Liquidity and Sustainable Leverage At the end of Q2 2018, cash and cash equivalents stood at $1,376 million (Q1 2018: $757 million) reflecting the net effect of free cash flow generation for the period. Gross debt remained relatively unchanged at $1,529 million (Q1 2018: $1,542 million).
Slide 14: Debt Structure
Debt Structure As at 30.06.2018, the debt structure was dominated by public debt with vast majority in US dollars (99.2%). Debt Maturity Schedule*, $m 879 501 186 1 1 9 2018 2019 2020 2021 2022 2023+ Notes: Debt represents the principal amount of debt from third parties. Debt for 2018 represents amo
Slide 15: Market Outlook
Market Outlook Demand for steel and raw materials markets is expected to remain at good levels. Prices for our products should be further supported by the continued construction season in most parts of the world. With a strong portfolio of high-value added products, a leading cost position and
Slide 16: Appendices
Severstal Appendice Achieve more together
Slide 17: Summary Income Statement
Summary Income Statement $ million, unless otherwise stated Q2 2018 Q1 2018 H1 2018 H1 2017 Revenue 2,259 2,173 4,432 3,698 COGS (1,265) (1,314) (2,579) (2,216) EBITDA 874 706 1,580 1,207 EBITDA margin, % 38.7% 32.5% 35.6% 32.6% Profit from operations 766 585 1,351 1,004 Operating margin, % 33.9% 26
Slide 18: Q2 2018 Revenue Breakdown by Region
Q2 2018 Revenue Breakdown by Region Severstal Group Q2 2018 revenue Severstal Russian Steel Q2 2018 revenue breakdown by region breakdown by region 2%2% 3% 5% Russian Federation 1% 1% 6%2% Russian Federation Europe Europe CIS 28% 25% CIS Americas Americas 60% The Middle East 65% The Middle East Afri
Slide 19: Q2 2018 Divisional Results
Q2 2018 Divisional Results Severstal Resources Q2 2018 Q1 2018 Change, % H1 2018 H1 2017 Change, % Revenue ($m) 475 402 18.2% 877 895 (2.0%) Cost of sales ($m) (211) (198) 6.6% (409) (391) 4.6% G&A expenses ($m) (19) (17) 11.8% (36) (30) 20.0% Distribution expenses ($m) (37) (28) 32.1% (65) (69) (5.
Slide 20: Summary Balance Sheet
Summary Balance Sheet $ million As at 30 June 2018 As at 31 December 2017 Cash and Cash Equivalents 1,376 1,031 Total Assets: 6,997 7,209 Current Assets 3,197 2,952 Non-current Assets 3,800 4,257 Total Liabilities: 3,776 3,811 Current Liabilities 1,949 1,670 Non-current Liabilities 1,827 2,141 Total
Slide 21: Summary Cash Flow Statement
Summary Cash Flow Statement $ million Q2 2018 Q1 2018 H1 2018 H1 2017 Profit before Financing and Taxation 756 575 1,331 637 Cash Generated from Operations 888 572 1,460 877 Interest Paid (27) (30) (57) (64) Income Tax Paid (111) (129) (240) (117) Net cash from Operating Activities 750 413 1,163 696
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