Steel Mining Cement Logistic. Earnings Presentation 2Q18 August, 8 th 2018

Transcription

1 Steel Mining Cement Logistic Energy Earnings Presentation August, 8 th 2018

2 HIGHLIGHTS 1 Improvement of Operational Results Adjusted EBITDA of R$1,420MM, increase of 58% YoY and 14% QoQ, with upside in all business units. Renegotiation finalized with Caixa Econômica Federal and developments with major private creditors. Asset Sales 3 Extension of Debt Liability 3 Closing of CSN LLC s sale and acceleration of deleveraging plan. 2

3 Steel Mining Cement Logistic Energy Consolidated Financial And Operational Indicators

4 EVOLUTION OF OPERATING RESULTS BY BUSINESS UNITS Ebitda Margin Adjusted Ebitda Evolution R$MM Ebitda Margin 23,5% 23,9% 1, Higher volumes in the domestic market. 91 Better sales volume and realized prices. 62 Evolution of the cement and energy segment. 7 Reduction in expenses 1, Ebitda Steel Mining Cement and others Elimination/Corporate Expenses Ebitda Cement and others Mining Steel Elim./Corp. Exp. 4

5 FINANCIAL INDICATORS Capex - R$MM Financial Cycle - days days Financial Expenses (ex variation) R$MM Free Cash Flow R$MM % ,598 1,

6 LEVERAGE AND LIQUIDITY Leverage reduction through the sale of CSN LLC Gross Debt, Net Debt and Cash (R$MM) 31,299 4,545 30,075 30,597 29,577 4,358 4,328 3,070 31,482 4, x 5.48x 5.66x 5.82x 5.34x 26,754 25,717 26,268 26,508 27,125 55% 3Q17 4Q17 Net Debt/EBITDA Cash equivalents Net Debt 6

7 DEBT AMORTIZATION SCHEDULE Debt reprofiling process is accelerating with asset sales and operational improvements Debt Amortization Schedule- R$ billion 12/31/ Original x Reprofiled¹ Duration: from 26 months to 38 months since the beginning of the year Debt Amortization reduction between 2018 e 2020: R$7.5 Bi after 2023 Schedule - Debt Amortization Schedule - Debt Amortization after renegotiation² ¹ Values referring to amortization schedule, not included in accrued interest. Amortization schedule data does not include FTL, ERSA, TLSA, LLC e SWT ² The amortization schedule after renegotiation considers BB and CEF rescheduling, private banks proposal and Bond reprofiling 7

8 Steel Mining Cement Logistic Energy Business Highlights

9 STEEL PERFORMANCE Strong revenue growth due to increasing domestic demand and prices in domestic and foreign markets 1, (44%) Sales Volume (thousand tons) 1, (38%) +13% 1, (39%) 19.4% 1, (39%) 1, (40%) Net Revenue (R$MM) and Average Price (R$/ton) 2,602 3,055 2,876 3,674 3,099 4, % Net Revenue Revenue/ton 653 (56%) 802 (62%) 770 (61%) 781 (61%) 798 (60%) Adjusted EBITDA (R$MM) e Adjusted EBITDA Mg. (%) Q17 4Q % 19% 17% Foreign Market Domestic Market 9

10 STEEL MARKET & OUTLOOK Domestic sales in grew 9% YoY, reaching 4.4 million tons. In aggregate sales until June, the increase was 11.2% FLAT STEEL PERFORMANCE - BRAZIL Resumption of the main consumer sectors in reinforces positive outlook for the year: Poduction Domestic Sales 5,492 5,837 4,008 +9% 4,368 +6% +13% Sale of light vehicles registered growth of 13% in +15% Exports 1,255 1,078-14% +36% 36% increase of Buses and Trucks sales in +1% Apparent Consumption Source: Instituto Aço Brasil Imports % 4,466 4, % +8,5% Distribution sales has advanced 8,5% in the 1H18 +9,5% Capital goods production with growth of 11% in the 1H18 +8% +10% 10

11 STEEL PERFORMANCE EBITDA per ton reached R$536 in, stable QoQ, even with unit costs increase Slab s Production Volume at Presidente Vargas Steel Works (thousand tons) Performance per ton(r$/t) 1,070 1,065 1,099 1, ,414 1,474 1, % EBITDA/ton Slab cost/ton 3Q17 4Q17 11

12 STEEL COMPETITIVINESS The lag impact of raw materials pricing impacted the slab cost, added to the strong depreciation of the Brazilian currency in 1,474 Slab Cost (R$/ton) Slab Cost build up (R$/ton) 48 Exchange variation 115 Raw materials variation -2 Others 19.4% 1,635 Slab Cost (R$/ton) $400 $350 $300 $250 $200 $150 Evolution on raw materials prices Production Cost $100 $- $90 $80 $70 $60 $50 $40 $30 $20 $10 11% 4% 4% 9% 33% Coal / Coke Energy / Fuel Iron Ore Maintenance / General Costs Met Coke FOB China (66/65%) - Platts HCC 64 Mid Vol - Platts Premium Low Vol (Asia-Pacific) - Platts Platts Iron Ore Fines 62% CFR 11% 14% 14% Labor Cost Metals Depreciation Other Raw Material 12

13 MINING PERFORMANCE Higher production and sales volume, positive foreign exchange variation and higher quarterly prices over the Platts index resulted in a 21% growth of Adjusted Ebitda Mining Sales Volume (thousand tons) Net Revenue (R$MM) +16% % ,067 1,152 1,331 Adjusted EBITDA (R$MM) and Adjusted EBITDA Mg. (%) +21% % 38% 40% 3Q17 4Q17 13

14 MINING PERFORMANCE CIF+FOB unit revenue in was US$56.8/wmt, an increase of 2% over the previous quarter, due to a basket of quotational periods and quality gains -12% +2% 14

15 jul/17 ago/17 set/17 out/17 nov/17 dez/17 jan/18 fev/18 mar/18 abr/18 mai/18 jun/18 3T18 MINING PERFORMANCE The quality of products afford premiums since the end of Sinter Feed China: Quality + Trade Conditions (Min = 0 / Max = 1) Discount Premium Min Max - 15

16 MINING PERFORMANCE The start-up of the Tailing Filtering plant in July allows for resumption of production in the Central Plant by reducing the use of the tailing dam Production CMIN 2018 (=100) P B Filtering Phase I P Q B CMAI II Projects Increases the use of itabirite 130% Spiral Better quality 120% 110% P Q B Start-up CMAI I Filtering Phase II Beginning 1S19 Reduces dependency of tailing dams Beginning 1S19 100% 90% 3Q18 4Q18 Dry Production 55% cost reduction in dry production process Implementation authorized by the environmental agency Subtitle: P Increases production / reduce fixed cost Q Increases quality B Reduce use of tailing dam 16

17 CEMENT PERFORMANCE With the best market share positioning, CSN has been seeking price recovery to improve business results 831 Cement Sales Volume (Thousand tons) % Net Revenue (R$MM) and Average Price (R$/ton) % 661 Adjusted EBITDA (R$MM) and Adj. EBITDA Margin (%) 28% 9% % 3Q17 4Q17 0% 12 17

18 Million tons CEMENT - OUTLOOK Although the market points to a decline in economic activity and cement consumption in 2018, CSN has been working relentlessly in costs reduction and improving competitiveness Sales LTM Domestic Market Brazil (preliminar sales by industry and market estimates) 70,9-9% 64,8-11% 57,4-6% 53,8-1% 53,3 Southeast market already started volume recovery, even with the impact of truck drivers strike in May/18 Production costs: Fixed costs reduction Raw materials synergy Process optimization Sector to suffer freight impact due to new government regulation, affecting cash cost and distribution costs +1% 12,1 12,2 Production costs reduction, even with a strong increase in fuel prices -18% 100,0-3% 82,2 84,0 79, Source: SNIC E 1S17 Southest 1S Source: CSN 2017 Base 100 =

19 Please visit our Website: Investor Relations: Marcelo Ribeiro CFO and IR Director Investor Relations Team: Leonardo Shinohara, Jose Henrique Triques, Carla Fernandes e Bruno Souza invrel@csn.com.br