Erdemir Group Months Consolidated Financial Results

Transcription

1 1 / 35 Erdemir Group Months Consolidated Financial Results 12 August 2014

2 2 / 35 DISCLAIMER Ereğli Demir Çelik Fabrikaları T.A.Ş. (Erdemir) may, when necessary, make written or verbal announcements about forward-looking information, expectations, estimates, targets, assessments and opinions. Erdemir has made the necessary arrangements about the amounts and results of such information through its Disclosure Policy and has shared such policy with the public through the Erdemir website, in accordance with the Capital Markets Board regulations. As stated in related policy, information contained in forward-looking statements, whether verbal or written, should not include unrealistic assumptions or forecasts. It should be noted that, actual results could materially differ from estimates taking into account the fact that they are not based on historical facts but are driven from expectations, beliefs, plans, targets and other factors which are beyond the control of our Company. As a result, forward-looking statements should not be fully trusted or taken as granted. Forward-looking statements should be considered valid only considering the conditions prevailing at the time of the announcement. In cases where it is understood that forward-looking statements are no longer achievable, such matter will be announced to the public and the statements will be revised. However, the decision to make a revision is a result of a subjective evaluation. Therefore, it should be noted that, when a party is coming to a judgement based on estimates and forward-looking statements, our Company may not have made a revision at that particular time. Our Company makes no commitment to make regular revisions which would fully cover changes in every parameter. New factors may arise in the future which may not be possible to foresee at this moment in time.

3 3 / 35 Agenda 2014 Market Overview M Results 2014 Guidance

4 In EU, sales price was 555 USD/ton as of July 2014 Jun-08 Jun-08 Sep-08 Sep-08 Dec-08 Dec-08 Source: * worldsteel ** Bloomberg Mar-09 Mar-09 Jun-09 Jun-09 Sep-09 Sep-09 Dec-09 Dec-09 Mar-10 Mar-10 Jun-10 Jun-10 Sep-10 Sep-10 Dec-10 Dec-10 Mar-11 Mar-11 Jun-11 Jun-11 Sep-11 Sep-11 Dec-11 Dec-11 Mar-12 Mar-12 Jun-12 Jun-12 Sep-12 Sep-12 Dec-12 Dec-12 Mar-13 Mar-13 Jun-13 Jun-13 Sep-13 Sep-13 Dec-13 Dec-13 Mar-14 Mar-14 Jun-14 Jun-14 4 / Sep-08 Jun Sep-08 Feb-09 Dec-08 Mar-09 Jul-09 Jun-09 Dec-09 Sep-09 Dec-09 May-10 Mar-10 Jun-10 Oct-10 Sep-10 Dec-10 Mar Mar-11 Aug-11 Jun-11 Sep-11 Jan-12 Dec-11 Mar-12 Jun-12 Jun-12 Sep-12 Nov-12 Dec-12 Apr-13 Mar-13 Jun-13 Sep-13 Sep-13 Dec-13 Feb-14 Mar-14 Jun-14 Jul % EU28 CRUDE STEEL PRODUCTION ( YoY % )* USA CRUDE STEEL PRODUCTION ( YoY % )* 100% 50% 80% 60% 25% 0% -25% -50% 40% 20% 0% -20% -40% -60% 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% -50% CIS CRUDE STEEL PRODUCTION ( YoY % ) * HRC PRICES ( USD/TON )** EU NORTH AMERICA CIS BLACK SEA/BALTIC EXPORT

5 Iron ore price was 95 USD/ton at the end of July Source: Bloomberg Platts / IODEX / USD/TON 220 COKING COAL PRICES (HCC PEAK DOWNS REGION FOB AUSTRALIA) USD/TON 160 IRON ORE PRICES (IODEX 62% FE CFR NORTH CHINA MID) USD/TON USD/TON 750 ERDEMIR GROUP HRC EFFECTIVE PRICE CIS HRC BLACKSEA/BALTIC EXPORT PRICE FOB USD/TON 440 SCRAP PRICES (HMS CFR TURKEY MID)

6 Turkish steel production increased by 3% in M YoY PRODUCTION ( 000 TONS ) M M CONSUMPTION ( 000 TONS ) Long Flat Total Source: TISPA M M Long Flat Total 6 / 35

7 Turkish iron and steel product imports decreased by 7% in M YoY IRON AND STEEL PRODUCT EXPORTS ( 000 TONS ) , M M Long Steel Billet Flat Steel Slab Total IRON AND STEEL PRODUCT IMPORTS ( 000 TONS ) Source: TISPA M M Long Steel Billet Flat Steel Slab Total 7 / 35

8 Contraction in the automotive sector is expected CHANGES IN SECTOR DEVELOPMENT INDEX (% YoY) 40% 35% 30% 25% 33,4% 32,6% 22,1% 20% 15% 10% 5% 0% -5% -10% 20,0% 18,3% 16,0% 7,5% 11,3% 5,5% 7,3% 4,5% 2,7% 4,0% 4,5% 4,5% 11,2% 6,8% 4,0% 3,5% 0,6% 1,3% 1,0% 2,0% -5,5% (e) 2015 (e) Construction White Goods Mechanical Machinery Automotive Source: TURKSTAT and ERDEMİR Group Analyses 8 / 35

9 HRC sales prices are lower than last year Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Çin 2.Kalite Kok Kömürü Spot İhraç Fiyatı ( USD/TON ) HRC PRICES ( USD/Ton ) CIS EXPORT HRC BLACKSEA/BALTIC EU HRC CHINA SPOT HRC USA IMPORT HR ERDEMIR GROUP As of July 2014, EU HRC price was 555 USD, China HRC spot price is 545 USD, CIS export HRC price is 535 USD. The prices were 591 USD, 586 USD, 518 USD respectively by the end of July Source: Bloomberg 9 / 35

10 Billet sales prices are lower than last year Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Çin 2.Kalite Kok Kömürü Spot İhraç Fiyatı ( USD/TON ) BILLET PRICES ( USD/Ton ) BILLET CHINA EXPORT BILLET CIS EXPORT BLACKSEA/BALTIC BILLET EXPORT TURKEY ERDEMIR GROUP As of July 2014, Turkey export price was 528 USD while it was 535 USD in July Source: Bloomberg 10 / 35

11 11 / 35 Agenda 2014 Market Overview M Results 2014 Guidance

12 12 / 35 ERDEMİR GROUP KEY FIGURES M M Liquid Steel Production (000 Tons) Slab Production (1) (000 Tons) Flat Steel Production (2) (000 Tons) Long Steel Production (000 Tons) Flat Steel Shipments (000 Tons) Long Steel Shipments (000 Tons) Net Sales Revenue (3) (M. USD) EBITDA (3) (M. USD) Net Profit For The Year (3) (M. USD) All figures are on IFRS consolidated basis unless stated otherwise. (1) Total slab production of Ereğli and İskenderun Plants. (2) Total flat steel production of Ereğli and İskenderun Plants. (3) 1 USD = 2,1636 TRY (January-June 2014 average exchange rate)

13 Liquid steel production was 4.1 million tons in M YoY 13 / 35 LIQUID STEEL PRODUCTION ( 000 TONS ) Quarter 2. Quarter 1. Half

14 Crude steel capacity utilization ratio of ERDEMİR Group is higher than world average CRUDE STEEL CAPACITY UTILIZATION RATIO 94% 92,8% 92% 90,9% 90% 88% 88,4% 86% 84% 84,1% 82% 80% 78% 80,2% 78,3% 77,9% 78,0% 76% M Erdemir Group World Source: worldsteel 14 / 35

15 HRC production increased by 9% in M YoY 15 / 35 PRODUCTION VOLUMES ( 000 TONS ) Quarter 2. Quarter 1. Half Hot Cold Long Total

16 Sales volumes decreased by 3% in M YoY 16 / 35 SALES VOLUMES ( 000 TONS ) Quarter 2. Quarter 1. Half Hot Cold Long Total

17 Net sales revenue was 2,6 billion USD in M YoY 17 / 35 NET SALES REVENUE ( MILLION USD ) Quarter 2. Quarter 1. Half Domestic Export Total

18 Sales to pipe and profile industry and distribution chains increased in M YoY 18 / M FLAT STEEL DOMESTIC SALES BREAKDOWN (%) M FLAT STEEL DOMESTIC SALES BREAKDOWN (%) 293Kt; 10% 114Kt; 4% 308Kt; 10% 157Kt; 5% 229Kt; 7% 412Kt; 13% 3.060Kton; 89% 949Kt; 31% 598Kt; 20% 156Kt; 5% 298Kt; 10% 131Kt; 5% 200Kt; 7% 315Kt; 11% 2.872Kton; 88% 395Kt; 14% 831Kt; 29% 546Kt; 19% M LONG STEEL DOMESTIC SALES BREAKDOWN (%) M LONG STEEL DOMESTIC SALES BREAKDOWN (%) 19Kt; 4% 4Kt; 1% 82Kt; 18% 191Kt; 43% 19Kt; 3% 6Kt; 1% 99Kt; 15% 445Kton; 80% 161Kt; 25% 645Kton; 74% 287Kt; 45% 114Kt; 26% 36Kt; 8% 73Kt; 11%

19 Flat steel sales to EU countries was 48% of our flat export in M 19 / M FLAT STEEL EXPORTS BREAKDOWN (%) M FLAT STEEL EXPORTS BREAKDOWN (%) 65Kt; 17% 27Kt; 7% 40Kt; 11% 379Kton; 11% 182Kt; 48% 43Kt; 11% 18Kt; 5% 19Kt; 5% 20Kt; 5% 385Kton; 12% 65Kt; 17% 285Kt; 74% M LONG STEEL EXPORTS BREAKDOWN (%) 30Kt; 27% 11Kt; 9% 112Kton; 20% M LONG STEEL EXPORTS BREAKDOWN (%) 8Kt; 4% 17Kt; 7% 20Kt; 9% 231Kton; 26% 71Kt; 64% 185Kt; 80%

20 In M, Erdemir Group average flat and long steel prices were 644 USD/ton and 577 USD/ton respectively Jun-12 Jun-12 Jul-12 Jul-12 Aug-12 Aug-12 Sep-12 Sep-12 Oct-12 Oct-12 Nov-12 Nov-12 Dec-12 Dec-12 Jan-13 Jan-13 Feb-13 Feb-13 Mar-13 Mar-13 Apr-13 Apr-13 May-13 May / 35 Jun-13 Jun-13 Jul-13 Jul-13 Aug-13 Aug-13 Sep-13 Sep-13 Oct-13 Oct-13 Nov-13 Nov-13 Dec-13 Dec-13 Jan-14 Jan-14 Feb-14 Feb-14 Mar-14 Mar-14 Apr-14 Apr-14 May-14 May-14 Jun-14 Jun-14 USD/TON Erdemir Group Flat Sales Price Erdemir Group Flat Cost of Sales USD/TON Erdemir Group Long Sales Price Erdemir Group Long Cost of Sales

21 Net profit increased by 19% in M YoY EBITDA ( MILLION USD ) ,3% 19,8% 20,7% 20,6% 17,5% 19,1% 19,2% ,3% Quarter 2. Quarter 1. Half EBITDA EBITDA Margin NET PROFIT/(LOSS) ( MILLION USD ) ,0% 40,0% 32,0% 23,2% 24,0% 16,0% 8,0% 0,0% ,0% ,7% ,8% 13,8% 12,1% ,8% 11,4% 12,0% 400 9,4% 301 9,4% ,0% 200 4,7% ,0% Quarter 2. Quarter 1. Half Net Profit/(Loss) Net Profit/(Loss) Margin 21 / 35

22 EBITDA was 536 million USD in M 22 / 35 Consolidated EBITDA => Consolidated Net Profit (Million USD) (96) 15 (41) (41) (14) EBITDA (1 Jan June 2014) Depreciation Interest inc. from overdue sales Operating Income Finance Inc./Exp. Tax Inc./Exp. Non-Controlling Interests NET PROFIT (1 Jan June 2014)

23 EBITDA was 536 million USD in M 23 / 35 Consolidated EBITDA => Consolidated Net Cash (Million USD)

24 EBITDA per ton for flat product was 125 USD/ton in Q 24 / 35 EBITDA PER TON (USD/TON) Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Flat Long

25 Net assets was 4,1 billion USD at the end of Q 25 / 35 CONSOLIDATED NET ASSETS (MILLION USD) (499) (503) (1.640) (1.889) Cash and Cash Equivalents Working Capital Tangible and Intangible Assets Financial Liabilities Provisions and Other NET ASSETS WORKING CAPITAL (MILLION USD)

26 Net debt was million USD at the end of Q 26 / 35 BORROWINGS ( MILLION USD ) Q Long-Term Debt Short-Term Debt Net Debt

27 Net debt was million USD at the end of Q 27 / 35 NET DEBT (MILLION USD) (512) Net Debt (December 2013) Free Cash Flow Dividend Paid Net Debt (June 2014)

28 Erdemir Group has 732 million USD cash and cash equivalents at the end of Q 28 / 35 BORROWINGS MATURITY PROFILE (MILLION USD) 882 Bank deposits with maturity more than 3 months Cash and cash equivalents Jun.14 1 Cash Jun.-Dec Principal Revolving Trade Financing Loans Interest

29 Raw materials made up 71% of the cost of sales in M COST OF SALES BREAKDOWN* - % 6% 5% 5% 3% 4% 1% 5% 1% 4% 4% 7% 7% 6% 6% 11% 11% 11% 12% 71% 72% 74% 75% M Raw Materials Personnel Expenses Purchased Energy Expenses Depreciation and Amortization Exp. Non-operating Expenses Other RAW MATERIALS BREAKDOWN - % 13% 14% 11% 11% 6% 5% 5% 5% 14% 12% 13% 14% 26% 28% 36% 33% 41% 41% 35% 37% M Iron Ore&Pellet Coal Scrap Alloyed and Plated Material Other * Excluding inventory writedowns and provision released 29 / 35

30 Flat cost per ton excluding raw materials was realised as 171 USD/ton in Q FLAT PRODUCTS ( USD/TON )* LONG PRODUCTS ( USD/TON )* Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Fixed Cost Per Ton Variable Cost Per Ton Flat Production (000 tons) Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Fixed Cost Per Ton Variable Cost Per Ton Long Production (000 tons) * Conversion Cost 30 / 35

31 Capital expenditures of 377 million USD is planned for / 35 ( M USD ) M 2018 Fixed Assets Acquisition and Maintenance Capital Expenditures * The figures only cover the board approved capex plan.

32 Number of employees was as of June / 35 NUMBER OF EMPLOYEES June

33 33 / 35 Agenda 2014 Market Overview M Results 2014 Guidance

34 34 / GUIDANCE Production (M. Tons) Sales (M. Tons) 7,8 8,1 7,7 8,1 6,4 6,7 6,3 6,7 1,4 1, Actual 2014 Budget Long Flat 1,4 1, Actual 2014 Budget Long Flat

35 35 / GUIDANCE EBITDA and Net Profit Margins EBITDA and Net Profit Margins were 19.2% and 9.4% respectively in EBITDA and Net Profit Margins are expected to be 18-20% and 11-13% respectively in 2014.

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