Company Update. Thursday 17 May 2012 Marek Jelinek, Executive Director and Chief Financial Officer Credit Suisse Poland/CE3 Conference, London

Transcription

1 Company Update Thursday 17 May 2012 Marek Jelinek, Executive Director and Chief Financial Officer Credit Suisse Poland/CE3 Conference, London New World Resources Plc

2 Disclaimer Forward looking statements Certain statements in this document are not historical facts and are or are deemed to be forward-looking. NWR s prospects, plans, financial position and business strategy, and statements pertaining to the capital resources, future expenditure for development projects, results of operations, may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology including, but not limited to; may, expect, intend, estimate, anticipate, plan, foresee, will, could, may, might, believe or continue or the negatives of these terms or variations of them or similar terminology. Although NWR believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. These forward-looking statements involve a number of risks, uncertainties and other facts that may cause actual results to be materially different from those expressed or implied in these forward-looking statements because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond NWR s ability to control or predict. Forward-looking statements are not guarantees of future performance. No offer of securities This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities. Reliance on third party information The information contained and/or views expressed herein may contain and/or be based on information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of such information. 2

3 Agenda Introduction 2012 Highlights Outlook Appendix 3

4 Company profile NWR produces quality coking coal, thermal coal and coke from assets in the Czech Republic for the steel and energy sectors in the CEE. Principal subsidiary OKD is the Czech Republic s only hard coal mining company and second largest private employer. Subsidiary OKK is Europe s largest producer of foundry coke. Strategically located within the CEE supplying to a blue chip customer base including Arcelor Mittal, U.S. Steel, voestalpine, CEZ, and Dalkia. Four active mines in the Czech Republic. Organic growth projects in Poland and the Czech Republic, monitoring Poland and Ukraine for M&A opportunities. Total JORC reserves: 385Mt as at 1 January Incorporated in the UK and constituent of FTSE 250 and FTSE 350 Mining indices. 4

5 Customer base Customers 20 sales volumes by customer Coking coal Thermal coal Coke 5% 7% Arcelor Mittal 8% 34% US Steel voestalpine 19% 27% Novscom Moravia Steel Other 19% 7% 14% 15% 26% 19% Novscom Dalkia CEZ Verbund Arcelor Mittal Other 50% 17% 14% % 8% Moravia Steel KSK Handels ThyssenKrupp voestalpine Other 5

6 Regional coal drivers Electricity generation by source, Poland Source: International Energy Agency 2% 1% 1% 2% Coal 2% Biomass Gas Hydro electricity NWR at the heart of the CEE manufacturing base 92% Oil Wind Electricity generation and thermal coal production, Poland Source: International Energy Agency GWh 150,000 Mt , , All displayed logo s are protected by copyright and are used by NWR with specific consent of the owners. NWR does not necessarily have a contractual relationship with the mentioned companies. Some of the companies are end users of coal related products. The locations of the logo s and company names displayed on the map above do not represent the exact location of the companies involved. 135, , Electricity production Thermal coal production 60 6

7 Safety performance Lost time injury frequency rate Lost Time Injury Frequency Rate represents the number of reportable injuries in the NWR Group causing at least three days of absence per million hours worked including contractors. 7

8 Coal segment statistics Coal production per mining employee 1 Tonne Mining EBITDA per tonne of production EUR Daily longwall production t/lw % Mining EBITDA margin 1,500 1,750 1, Including mining contractors. 8

9 Debt situation Debt structure and credit ratings New World Resources Plc Debt maturity profile EUR m 2018 Senior Secured Notes (7.875%) 2014 RCF 2018 Note (S&P: BB-, Moody's: Ba3) 2018 ECA New World Resources N.V. S&P: BB- (stable) Moody s: B1 (positive) 2015 Note (S&P: B, Moody's: B3) 2015 Senior Notes (7.375%) ECA Loan OKD, a.s. (Mining business) OKK Koksovny, a.s. (Coking business) NWR KARBONIA S.A. (Polish projects) OKD, HBZS, a.s. (Safety unit) Restricted group 9

10 Agenda Introduction 2012 Highlights Outlook Appendix

11 Revenue EUR m 385 Financial highlights Revenues of EUR 347m, down % EBITDA EBITDA of EUR 54m, down 34% EUR m Net profit of EUR 6m, up 80% Basic EPS of EUR 0.02 Cash flow from operations of EUR 80m Net debt of EUR 385m, down 2% since beginning of the year Net Profit EUR m Fully repaid the EUR 0m revolving credit facility (14) 3 6 No significant debt maturity until

12 Operational and strategic highlights Coal production of 2.4Mt, and external sales of 2.3Mt (1.3Mt coking coal) Coke production of 175kt, and external sales of 155kt coking coal and coke prices agreed at EUR 130/t and EUR 298/t respectively Agreement with trade unions on 3% increase in basic wages from April guidance on production, sales, coal mix and unit costs unchanged Our project to access more than 30Mt of coking coal via existing operations at Karvina Mine progressing. 1 Lost Time Injury Frequency Rate represents the number of reportable injuries in the NWR Group causing at least three days of absence per million hours worked including contractors. 12

13 Debiensko Parameters under review Current status Review to analyse key project s parameters Total project costs Average yearly production Estimated unit costs Time to completion Analysis of changed water management conditions Review to take several months to complete 2012 CAPEX capped at EUR 5m Parameters unchanged 50-year mining license JORC reserves, 190Mt Reserve mix 7/8 coking coal and 1/8 thermal coal Pursuit of additional mining license for shallower levels Long term fundamentals of the region and demand for Debiensko-quality coal 13

14 Steel environment Steel production, NWR s customer markets 1 Mt Source: World Steel Association Global steel capacity utilisation ratio 2 % Source: World Steel Association Q3 08 Q4 08 Q3 Q4 Q3 Q4 Q3 Q Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr July Oct Jan Apr Jul Oct Jan Mar Steel production in NWR s main customer markets was up 7% in 2012 compared to the previous quarter Regional steel capacity utilisation ratio was between 80-90% 1 Czech Republic, Poland, Slovakia, Germany, and Austria countries as reported by the World Steel Association, March report 14

15 NWR quarterly prices Coking coal EUR/t NWR quarterly coking coal price Coke EUR/t International hard coking coal benchmark contract prices Q3 Q4 Q3 Q4 Q3 Q e Thermal coal EUR/t Q3 Q4 Q3 Q4 Q3 Q e Q3 Q4 Q3 Q4 Q3 Q4 FY 12e Note 1: Given the ultimate consumer of PCI coking coal is the steel making industry, we reclassified its sales from Thermal coal to Coking coal as of 1 January 2012, in line with industry practice. All previous prices and volumes of Coking coal and Thermal coal have been recalculated to reflect this reclassification. Note 2: Final realised prices can be influenced by a range of factors including, but not limited to, exchange rate fluctuations, quality mix, timing of the deliveries and flexible provisions in the individual agreements. Thus the actual realised price for the period may differ from the average agreed prices previously announced. All of the forward-looking price guidance for 2012 is based on an exchange rate of CZK/EUR of Prices are expressed as a blended average between the different qualities of coal and coke and are ex-works. 15

16 Coal segment Coking coal revenues Thermal coal revenues EUR m EUR m % - 23% Costs per tonne 3 EUR 90 + % Ex-FX +8% Production 97 2,582kt - 7% 2,389kt Volumes and prices 1 1,290kt +% 1,169kt EUR 154-8% EUR Volumes and prices 2 1,468kt -32% 999kt EUR % EUR Coal segment EBITDA 4 EUR m 81-33% Blended average across all qualities of coking coal. In 2012, approx. 52% of coking coal sales was HCC, 41% was SSCC and 7% PCICC. 2 Blended average price for all qualities of thermal coal. In 2012, approx. 78% of thermal coal sales was thermal coal and 22% middlings. 3 Mining costs per tonne reflect the operating costs incurred in mining of both coking coal and thermal coal. They exclude transportation costs and D&A. 4 Includes internal sales to the coke segment. The full disclosure on operational segments is presented in the latest Operating and Financial Review. 16

17 Coke segment Coke revenues EUR m Conversion costs per tonne 2 EUR Production % Ex-FX +4% 64-21% 202kt - 13% 175kt Volumes and prices 1 180kt - 14% 155kt Coke segment EBITDA 3 EUR m % EUR 337-8% EUR Blended average price for all types of coke. In 2012, approx. 71% of coke sales was foundry coke, 21% blast furnace coke and 8% other types of coke. 2 Coke conversion costs per tonne reflect the operating costs incurred in producing all types of coke and exclude the costs of input coal, transportation costs and D&A. 3 Includes both internal and external coal charges. The full disclosure on operational segments is presented in the latest Operating and Financial Review. 17

18 EBITDA EBITDA reconciliation EUR m EBITDA Coal and coke prices Coal and coke volumes Coal and coke mix Change in inventory OPEX Other revenue and expenses 2012 EBITDA 18

19 Net Debt Net debt development EUR m Jan Net Debt Cashflow from operations Taxes and interest paid CAPEX Other Mar Net Debt 19

20 Agenda Introduction 2012 Highlights Outlook Appendix 20

21 FY 2012 outlook Production.8 Mt of coal and 700kt of coke External sales Prices 1 Coal:.25.5Mt of which 52% thermal coal and 48% coking coal Coke: 600kt Thermal coal: priced at EUR 74/t for calendar year 2012 with expected mix 82% thermal coal and 18% middlings Coking coal: 2012 average price agreed at EUR 130/t with expected mix of 50% hard coking coal, 43% semi soft coking coal and 7% PCI coking coal Coke: 2012 average price agreed at EUR 298/t with expected mix of 67% foundry coke, 16% blast furnace coke and 16% other types of coke Costs CAPEX Mining unit costs expected to be broadly flat on a constant FX basis Coke conversion unit costs expected to increase in line with expected decrease in production Expected CAPEX of EUR 2m, CAPEX for Debiensko capped at EUR 5m. 1 Final realised prices can be influenced by a range of factors including, but not limited to, exchange rate fluctuations, quality mix, timing of the deliveries and flexible provisions in the individual agreements. Thus the actual realised price for the period may differ from the average agreed prices previously announced. All of the forwardlooking price guidance for 2012 is based on an exchange rate of CZK/EUR of Prices are expressed as a blended average between the different qualities of coal and coke and are ex works. 21

22 Financial calendar 2012 July Trading update and Q3 Prices 23 August Half Year 2012 Results October Trading update and Q4 Prices 14 November Nine Months 2012 Results Investor Relations contacts Radek Nemecek Amy Rajendran Subscribe to alerts at 22

23 Agenda Introduction 2012 Highlights Outlook Appendix 23

24 Financial overview EUR m Chg Q4 20 Chg Revenues (%) 392 (%) EBITDA (34%) 85 (37%) - coal segment (33%) 2 (47%) - coke segment (15%) (1) - Margin 16% 21% - 22% - Operating profit 38 (71%) 41 (73%) - Net financial expense (3) - Income tax expense (2) (27) (7) - - (19) (13) - - Profit for the period % 9 (30%) Net cash flow from operations 73 9 (39%) 47 54% Average EUR/CZK % 25.3 (1%) 1 The full disclosure on all operational segments including the Other segment as well as consolidation adjustments and eliminations is presented in the Operating and Financial Review for the three months ended 31 March

25 Balance sheet EUR m 31 Mar Dec Mar 20 Total Assets 2,328 2,374 2,277 Non current assets 1,592 1,535 1,498 Property, plant & equipment 1,4 1,354 1,307 Current assets Cash and cash equivalents Total Equity and Liabilities 2,328 2,374 2,277 Total equity Total liabilities 1,506 1,621 1,529 Long-term loans Bonds issued Current portion of long-term loans Short term loans Net Debt Net Working Capital (27) 25

26 Corporate overview Group structure Management BXR Group Limited 1 Free float BXR Mining B.V % (A shares) 63.65% (A shares) New World Resources Plc Mike Salamon Chairman Klaus Beck OKD CEO 0.22% Minorities 99.78% New World Resources N.V. Marek Jelinek CFO Jan Fabian COO OKD, a.s. (Mining business) OKK Koksovny, a.s. (Coking business) NWR KARBONIA S.A. (Polish projects) History Rothschild family Nationalisation Privatisation OKD, HBZS, a.s. (Safety unit) Asset Consolidation Public Offerings Ownership is 0% unless otherwise stated. 26