We provide innovative industrial solutions by developing and transforming natural resources into value creating products

Transcription

1 We provide innovative industrial solutions by developing and transforming natural resources into value creating products Investor presentation Paris, October, 2010 Haris Kotsokolos, IR Manager 1

2 Disclaimer This presentation, and comments made by management thereon, contains forward-looking statements which are based on current expectations and assumptions about future events. These forward-looking statements are subject to risks and uncertainties - many of which are beyond S&B Industrial Minerals S.A. ability to control or estimate precisely - that could cause actual results to differ materially from those expressed in the forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. S&B Industrial Minerals S.A. does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of these materials. 2

3 Agenda S&B at a glance Half year 2010 performance Further growth opportunities Sustainable development Shareholders section Appendix I: product divisions Appendix II: latest financials 3

4 Agenda S&B at a glance Half year 2010 performance Further growth opportunities Sustainable development Shareholders section Appendix I: product divisions Appendix II: latest financials 4

5 Delivering industrial solutions by developing and transforming natural resources into value creating products Bentonite Foundry Continuous Steel Casting Iron ore pelletizing Perlite Iron Smelting Refractories Bauxite Portfolio of Natural Resources Portfolio of Applications Alumina Drilling Cements Continuous Casting Fluxes Agriculture Civil engineering Specialty Minerals Industrial Solutions Glass & Ceramics Pet litter absorbents Construction & building materials 5

6 Recent downstream diversification through targeted key investments ~ 200 million in key acquisitions over the last decade for geographical, downstream and applications diversification Otavi Mykobar Perlite Mineral Trading Bentonite Pelletising Construction Horticulture IKO Bentonite Foundry Civil engineering Cat litter Specialties S&B Hungary Bentonite Civil engineering S&B Bulgaria Bentonite Perlite Civil engineering Cat litter Construction Horticulture Stollberg Group Fluxes Continuous steel casting Hill & Griffith CEBO Bentonite Foundry Drilling..from digger & shipper....to an industrial solutions provider 6

7 Fueling sales growth and diversification SALES (cagr) EBITDA (cagr) % % % % 7

8 Global Presence 26 Mines 47 Processing plants 27 WH&D Centers Operations in 20 countries Sales in 75 countries 8

9 A diverse product and applications portfolio 9

10 Broad geographic spread and a balanced revenue profile Upstream operations 73% 27% Downstream operations Solution vs mine skewed revenues Greek origin enterprise Limited revenue exposure to the Greek market 10

11 11 Global customers

12 Evolution of key metrics for Continuing Operations 25.5% 26.8% 25.9% 22.7% 22.0% 17.4% 17.5% 15.8% 14.3% 12.5% 9.0% 9.9% 9.4% 8.3% 5.2% '05 '06 '07 '08 '09 Gross margin Ebitda margin Operating margin Impact on margins from external cost parameters integration of specific acquisitions Lower operating leverage during recession. 12

13 2009: our response to the downturn -14% Comparable net operating expenses -42% Working capital 40 million Internal fund generation 41 million New capital -40% Net debt 0.12 Stable dividend secured profitability Maintained market positions and pricing stability Implementation of various adjustment measures Overall cost base reduction Maintained a solid and efficient infrastructure Enhanced liquidity and reduced net debt Annual recurring savings 10 million Small but strategic acquisitions

14 Agenda S&B at a glance Half year 2010 performance Further growth opportunities Sustainable development Shareholders section Appendix I: product divisions Appendix II: latest financials 14

15 80% 60% 40% 20% 0% -20% -40% -60% -44% -49% -53% -51% World Steel Production trends growth versus prior period % -36% -39% -11% -11% 55% 39% 68% 64% 57% 51% 52% 37% Jan 09 Apr 09 Jul 09 Oc 09 Jan 10 Apr10 May10 Jun10 European Union (27) Source: World Steel Association Drivers of Half Year 2010 performance HY % North Am erica Global steel production on a strong positive trend during first half 2010 Strong demand for foundry and iron ore pelletising segments Construction related activity stagnant in North America but not yet bottoming out in Europe Annualized new housing starts -US Annualized units Stronger than expected recovery of the German economy Pricing stability and operating leverage from higher volumes and benefits from the previous year s cost-cutting programs Increased oil and freight charges by 49% and 93% respectively Q110 Q210 Source: US Census Bureau Operational challenges for the Bauxite division 15

16 Group financial highlights 000s HY 2010 HY 2009 % change Q Q % change Sales 203, , % 108,460 78, % EBITDA 27,898 18, % 14,800 9, % margin % 13.7% 11.5% +2.2 pts 13.6% 11.6% +2 pts Operating profit 11,830 6, % 4,528 2, % margin % 5.8% 4.0% +1.8 pts 4.2% 3.7% +0.5 pts Pre tax profit 10,031 2, % 4,058 1, % Net profit 1 5,619 1, % 1,582 1, % EPS 1, % % 1 Net profit attributable to shareholders 2 EPS in Q2 and HY 2009 has been adjusted to reflect the rights issue completed on September 21, 2009 All EPS figures have been adjusted for the 1-for-4 bonus share issue on August 9, % 13.4% 13.8% 13.6% Significant y-o-y improvement % Quarterly momentum accelerating during Q2 Strong operating leverage driving margin expansion Q209 Q309 Q409 Q110 Q210 Sales Ebitda Ebitda % Increased oil and freight charges Higher effective tax rate in Q2 16

17 Continued cash flow efficiencies and balance sheet strengthening WC/Sales % Capex/Sales % Net debt ( million) 27.6% 16.0% 7.9% 4.6% HY '09 HY '10 HY '09 HY '10 Q4 '09 Q1 '10 Q2 '10 amounts in 000s ΗΥ'10 ΗΥ '09 Cash flow Ebitda 27,898 18,148 -Various operating non-cash adjustments (979) (1,358) -Net Capex (9,370) (12,387) -(incr)/+decr in Working Capital (4,666) 32,281 Pre-tax OFCF 12,883 36,684 + dividends received net interest and related expenses (2,153) (6,429) - acquisitions (615) (768) - income taxes paid (1,815) (1,688) - dividends paid (103) (37) +/- capital transactions (141) 383 +/- other non-cash items 4, Change in Net Debt (Net CF) 13,023 28,571 6 th consecutive quarter of positive cash generation Ability to fund strong revenue growth with reduced and streamlined working capital requirements Capital investments in the half year are not representative of full year expectations due to timing Robust capital structure (net debt / equity below 0.45x) 17

18 Half Year Divisional financial highlights 000s Sales EBITDA Divisions HY 10 HY 09 % HY 10 HY 09 % Bentonite 91,362 74, ,749 15, Perlite 34,238 31, ,353 4, Bauxite 14,624 12, ,513 > -100 Continuous Casting Fluxes 45,896 26, ,456 2,924 > 250 Minerals Trading 17,184 11, , > 400 Corporate (11,652) (8,581) Total 203, , ,898 18, Strong performance from metallurgy correlated divisions reflecting increase in global steel production Ebitda acceleration ahead of sales growth due to increased operating leverage (enhanced volumes + pricing stability + cost cutting programs) Construction related end markets continue to deteriorate mainly in Europe Increased freights and oil prices impact the Perlite division relatively more than other divisions Permitting delays and temporary suspension of operations for Bauxite; 3 rd party imports to cover demand 18

19 Half year variances by division Sales in million HY 2009 Bentonite Perlite Bauxite CCF Minerals trading Corporate HY 2010 Profit before tax in million HY 2009 Bentonite Perlite Bauxite CCF Minerals trading Corporate HY

20 Agenda S&B at a glance Half Year 2010 performance Further growth opportunities Sustainable development Shareholders section Appendix I: product divisions Appendix II: latest financials 20

21 A pure play focus on natural resources Further exploitation of the untapped potential in Geothermal energy Geothermy Industrial Minerals Expansion of our corporate product portfolio Real estate Upgrade efforts to realize value tied up in real estate 21

22 Strategic drivers for further growth and value creation from industrial minerals New geographies New solutions Diversification of the applications portfolio Selective geographic expansion for existing industrial solutions New product / application expansion New value chain creation under the Market to mine concept Market to mine approach M&A expertise and integration track record Strong talent and industrial marketing skills Strong market positions Pricing stability 22

23 Agenda S&B at a glance Half Year 2010 performance Further growth opportunities Sustainable development Shareholders section Appendix I: product divisions Appendix II: latest financials 23

24 Pursuit of Sustainable Development as a business strategy More than 25 years of systematic land reclamation ISO 9001 & certification Customer satisfaction surveys Research programs such as ExPerl Development of cultural infrastructure Awarded with the Best Human Resources Initiative by KPMG in 2004 and in 2007 OHSAS implementation. 2 plants certified Continuous individual & organizational development 24

25 Making good progress on our initiatives 7 Greece accounts for 75% of the Group s in use mining area 6 5 Total environmental expenditures in Greece, of which land reclamation is on average about 47% * 4 in million (*) include 8.4m in aggregate, for the construction of a bentonite warehouse on Milos. The average of the land reclamation expense as a percent of total environmental expenditures is adjusted to exclude these amounts Dust emissions management Closed warehouse for bulk dry bentonite on Milos Energy management 10% reduction of energy consumed per ton of product by Water management Despite low water consumption due to the nature of activities, various water saving initiatives are in place Waste management Mineral waste management is part of extraction and reclamation planning. Recycling methods applied to other non-mineral waste. Continuous improvement in the Group s Safety Indicators Severity Index 25

26 Agenda S&B at a glance Half Year 2010 performance Further growth opportunities Sustainable development Shareholders section Appendix I: product divisions Appendix II: latest financials 26

27 Sustaining shareholder value creation Months Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 General index TSR S&B TSR Cash returned to shareholders millions 20.9 Average Market Cap 250 million Cash returned 61 million Dividend Capital return Buyback Carve-out 27

28 Shareholder information As of October 18, 2010 Market Data Share Price 3.45 Market cap 179 million Enterprise value * 288 million Source: Reuters, Prices as of October 18, 2010 * Net debt of 109 million as at June 30,

29 Agenda S&B at a glance Half Year 2010 performance Further growth opportunities Sustainable development Shareholders section Appendix I: product divisions Appendix II: latest financials 29

30 Bentonite A plastic clay with strong colloidal properties that increases its volume several times when coming into contact with water. 41 mines & plants in 13 countries 1,000 product formulations to 57 countries Main Markets Served: Foundry Construction projects Iron ore Absorbents Paper Industry Oil drilling Other special applications binder for green sand foundry molds for metal casting thixotropic additive for foundation engineering, diaphragm wall construction, grouting and tunneling, landfill sealants binder for the production of iron ore pellets pet litter additive in paper for retention improvement, adsorption and fixation of impurities in paper stock thixotropic additive for the production of drilling mud additive in chemical industry, ceramics, waste water treatment 30

31 31 Products - Bentonite

32 Perlite Natural volcanic glassy material. Its volume increases times and its bulk density decreases accordingly, leading to excellent thermal and acoustic insulation properties. 109 perlite-based products to 35 countries 37 mines, plants & distribution centers in 11 countries Main Markets Served: Formed building products Bulk building materials Horticulture Filtration Industrial applications Cryogenic industries acoustical ceiling tiles, roofing tiles, boards and panels plasters, mortars, lightweight aggregates growing medium for greenhouse cultivation and soil mixes, substrates filter aids for the production of juices, beverages, edible oils, chemical, pharmaceutical and petroleum products cryogenic insulation, pipeline insulation, heat-resistant applications in foundries raw material for the pozzolanic cement, silica source 32

33 33 Products - Perlite

34 Bauxite Ore rich in aluminum, constitutes the primary raw material for the production of alumina 7 bauxite applications 14 bauxite based products in 20 countries Main Markets Served: Alumina Aluminous Cements Iron & Steel Making Portland Cements Mineral Fibers Abrasives production of alumina production of high-iron aluminous cements fluxing additive in blasts furnace iron-making, accelerator of slag formation in Siemens-Martin steelmaking raw meal additive for chemical adjustment chemistry adjuster in mineral fiber production production of brown-fused alumina 34

35 35 Products - Bauxite

36 Continuous Casting Fluxes STOLLBERG s main product category is Casting Fluxes, a range of specialized and high value-adding products utilized for the facilitation of the continuous casting process in steel making. STOLLBERG is a market leader in its field, selling to most of the steel producers in the world. 7 plants in 7 countries 1,000 customized solutions to 50 countries Molten Steel The application of STOLLBERG products in steel making, using the process of continuous casting STOLLBERG covering compounds STOLLBERG casting fluxes Mould Cut-off Slab 36

37 Products Continuous Casting Fluxes 37

38 Minerals Trading OTAVI operates in the specialty minerals market. The main minerals that OTAVI trades are wollastonite, spodumene, brown-fused alumina, calcined bauxite, feldspar, thermo carbon, steel fibers. 9 production lines in 5 distribution Germany centers in 4 countries 30 minerals based products to 26 countries 1 wollastonite mine & plants in China Main Markets Served: Refractories Ceramics Glass Metallurgy castables, ramming mixes, fired bricks, MgO-C bricks, taphole clays tiles, sanitaryware bodies, frits & glazes container glass, flaconage, tableware, fiberglass continuous casting powders, foundry coating & cores, steel inclusion modifier, welding powder 38

39 39 Products Minerals Trading

40 Agenda S&B at a glance Half Year 2010 performance Further growth opportunities Sustainable development Shareholders section Appendix I: product divisions Appendix II: latest financials 40

41 P&L - HY 2010 Figures in 000s The Group 1/1-30/06/2010 1/1-30/06/2009 Sales 203, ,621 Cost of sales (160,280) (125,033) Gross Profit 43,412 32,588 Net operating expenses (31,582) (26,349) Operating profit 11,830 6,239 Net Finance costs (2,214) (4,319) Gain / (loss) from the disposal of associates and subsidiaries 708 Share of profit/(loss) of associates 415 (141) Profit before tax 10,031 2,487 Income tax expense (4,703) (670) Net profit 5,328 1,817 Net profit attributable to: Owners of the Company 5,619 1,852 Non-controlling interests (291) (35) 5,328 1,817 Earnings per share Basic Diluted Weighted average number of shares Basic 51,288,603 40,465,440 Diluted 51,769,907 40,795,944 41

42 P&L Q Figures in 000s The Group 1/4-30/06/2010 1/4-30/06/2009 Sales 108,460 78,064 Cost of sales (87,335) (61,654) Gross Profit 21,125 16,410 - Net operating expenses (16,597) (13,491) Operating profit 4,528 2,919 Net Finance costs (712) (2,233) Gain / (loss) from the disposal of associates and subsidiaries - 24 Share of (loss)/profit of associates Profit before tax 4,059 1,418 Income tax expense (2,640) (194) Net profit 1,419 1,224 Net profit attributable to: Owners of the Company 1,582 1,122 Minority interests (163) 102 1,419 1,224 Earnings per share Basic Diluted Weighted average number of shares Basic 51,238,729 40,451,866 Diluted 51,743,713 40,799,865 42

43 Balance Sheet 30 June 2010 Figures in 000s ASSETS June 30, 2010 December 31, 2009 Non-current assets Property, plant and equipment 194, ,345 Intangible assets 105, ,705 Other non-current assets 35,880 35, , ,923 Current assets Inventories 65,408 65,093 Trade and other receivables 75,762 60,267 Cash and cash equivalents 48,258 49, , ,933 Total Assets 524, ,856 EQUITY AND LIABILITIES The Group Equity attributable to owners of the Company 238, ,932 Non-controlling interests 725 1,095 Total equity 239, ,027 Non-current liabilities Interest-bearing loans and borrowings 89, ,788 Other non-current liabilities 52,027 52, , ,147 Current liabilities Short-term borrowings 67,354 16,705 Other current liabilities 76,122 55, ,476 72,682 Total equity and liabilities 524, ,856 43

44 Further information on S&B may be found on our website at or you may contact Investor Relations, tel: