презентация для инвесторов, июль 2010
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Transcript of презентация для инвесторов, июль 2010
Investor Presentation July 2010
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This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of Evraz Group S.A. (Evraz) or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity. No part of this document, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of Evraz or any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with the document.This communication is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). Any person who is not a relevant person should not act or rely on this document or any of its contents. This document contains “forward-looking statements”, which include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or that include the words “targets”, “believes”, “expects”, “aims”, “intends”, “will”, “may”, “anticipates”, “would”, “could” or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond Evraz’s control that could cause the actual results, performance or achievements of Evraz to be materially different from future results, performance or achievements expressed or implied by such forward-looking, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or GDRs, financial risk management and the impact of general business and global economic conditions.Such forward-looking statements are based on numerous assumptions regarding Evraz’s present and future business strategies and the environment in which Evraz Group S.A. will operate in the future. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speak only as at the date as of which they are made, and Evraz expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in Evraz’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.Neither Evraz, nor any of its agents, employees or advisors intends or has any duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this document.
The information contained in this document is provided as at the date of this document and is subject to change without notice.
Disclaimer
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Evraz Group in Brief
◦ World-class steel and mining company, 14-th largest steel companies in the world based on 2009 crude steel production volumes
◦ Leader in the Russian and CIS construction and railway products markets
◦ A lead player in the European and North American plate and large diameter pipe markets
◦ One of the world’s lowest cost steel producers due to production efficiency and high level of vertical integration
◦ One of the leading producers in the global vanadium market
◦ In 2009, Evraz produced 15.3 million tonnes of crude steel, 11.3 million tonnes of pig iron and 14.3 million tonnes of rolled products
◦ 2009 consolidated revenue amounted to $9.8 billion
◦ 2009 EBITDA was $1.2 billion
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Evraz’s Global Business
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Sound Long-Term Strategy
Long and railway product leadership in Russia and the CIS
Low cost leadership position
Strong presence in international flat and tubular markets
Vertical integration with competitive mining business
Leadership in vanadium business◦ The sole producer of vanadium-rich ore in Russia ◦ Global footprint: five operating units on four continents◦ Acquisition of Vanady-Tula, Russia’s largest producer of ferrovanadium, signals further expansion of
vanadium-processing capacity
* Including 40% equity stake in Raspadskaya coal company, accounted on pro rata basis. Excluding this stake, integration would have been 74%
◦ Maintained leadership in Russia’s construction steel market◦ Rail mill reconstruction designed to produce high-speed rail and increase rail production volumes
◦ Continuous integration of international assets◦ Full order book at Canadian tubular plant for 2010
◦ Cost of revenue reduced by 35% compared to 2008◦ Closure of inefficient production capacity◦ Ongoing implementation of cost reduction programs
◦ Iron ore self-coverage: 96%◦ Coking coal self-coverage: 117%*◦ Won tender for Mezhegey coal deposit to maintain coking coal self-coverage going forward
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* Adjusted EBITDA represents profit from operations plus depreciation and amortisation, impairment of assets and loss (gain) on disposal of PP&E.** As of the end of the period*** Here and further in this presentation steel segment sales data refer to third parties sales
Revenue 2,970 2,413 23%
305 39%Adjusted EBITDA* 424
Adjusted EBITDA margin 14.3% 12.6%
Cash and cash equivalents**
103Capex 160
1Q 2010 1Q 2009US$ mln unless otherwise stated Change
1Q 2010 Financial Summary
12%3,870 3,456
855
Total debt**7,953
Sales volumes*** (’000 tonnes)
793
9,041 (12)%
(7)%
55%
Source: Management accounts
2,4132,226
2,479
2,9702,654
305 163406 363 424
0
500
1,000
1,500
2,000
2,500
3,000
1Q09 2Q09 3Q09 4Q09 1Q10
Revenue EBITDA
508 565
379706288
336394
437392
2556269
0
500
1000
1500
2000
2500
1Q09 1Q10
Semi-finished products Construction products Railway productsFlat-rolled products Tubular products Other steel products
1,384 1,265
812 1,200418
455484645236
189121116
0500
1,0001,5002,0002,5003,0003,5004,0004,500
1Q09 1Q10
Semi-finished products Construction products Railway productsFlat-rolled products Tubular products Other steel products
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1Q 2010 Performance◦ 1Q10 Mining Segment revenue amounted to
US$136m, Vanadium Segment – US$124m and Other revenues reached US$342m (incl. US$66m from rendering of services)
◦ Iron ore sales (incl. intersegment shipments) totalled 4 mln tonnes
◦ Coal sales (incl. intersegment shipments) were 3.8 mln tonnes, including 1.1 mln tonnes of raw coking coal, 1.4 mln tonnes of steam coal and 0.9 million tonnes of coking coal concentrate
Consolidated Revenue and EBITDAUS$ mln
Steel Sales Volumes
US$ mln‘000 tonnes
3,4563,870
2,0232,368
Steel Sales
* Average for Russian steel mills, integrated cash cost of production, EXW
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Maintaining Cost Leadership
◦ Control of raw material costs through cost efficient vertical integration
◦ Constant review of product and resources flows to identify potential efficiency gains
◦ Approximately 75% of consolidated cost is rouble denominated
◦ In 2009, Russian-based assets have benefited from declines in utilities and staff costs
◦ In 2H09 costs were negatively affected by raising scrap prices
Consolidated Cost of Revenue, 2009 Cash Cost, Russian Coal and Iron Ore Products
US$/t
Cash Cost*, Slabs & Billets
US$/t
Source: Management accounts
4%3%11%
8%
6%
5%
10%
6%5%
8%
17%
17%
Iron ore Coking coal ScrapFerroalloys Purchased semis Auxiliary materialsElectricity Natural gas Staff costsTransportation Depreciation Other
420
268224
394
430
285253
402
150
200
250
300
350
400
450
1H08 2H08 1H09 2H09
Slab Billet
50
3530
46
63
4743
56
20
30
40
50
60
70
1H08 2H08 1H09 2H09
Coal products Iron ore products 58% Fe
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
2010 2011 2012 2013 2014 2015 2016 2017 2018
Q1 Q2 Q3 Q4
280
593 786
Syndicated loans Overdrafts Russian bilateral loans
US$ mln
Source: Management accounts
◦ Total debt of approx. US$8.1bn, net debt of US$7.4bn as of 30 June 2010
◦ RUB15bn (equivalent US$500m) 3-year bonds issued in March 2010, fully swapped into US$ to eliminate RUB currency exposure
◦ In May 2010, Evraz drew down US$950m 5-year Gazprombank loan and repaid US$1,007m VEB loan
◦ Adequate consolidated cash balance of ca.US$700m always maintained
Balanced Debt Maturity Profile
Debt Maturities ScheduleDebt Maturities Schedule
(as at 30 June 2010)(as at 30 June 2010)Breakdown of Short-term Debt
(as at 30 June 2010)
Breakdown of Short-term Debt (as at 30 June 2010)
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US$ mln
1,085
1,778
1,4191,543
15 11
509
996
721
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Increase in Export and Geographic Diversification
Steel Products Sales by MarketSteel Products Sales by Market
Steel Products Sales Volumes by ProductSteel Products Sales Volumes by Product◦ In 2009, sales to customers outside Russia increased from 61% to 71% of total revenues
◦ 2009 sales of steel products to Asia exceeded sales to Russia and the CIS, reflecting production flexibility and increasing cost competitiveness
◦ Geographical diversification of the business helped to stabilise operations in crisis environment
◦ Change in the product mix towards semi-finished products had limited effect on margins due to export parity pricing of Russian domestic finished steel products
’000 tonnes
Steel Products Sales by OperationsSteel Products Sales by Operations
5,314
2,367 2,647
919586
5,188 5,273
4,218
426667
2,1101,588
0
2,000
4,000
6,000
Semi-finished
Construction Railway Flat-rolled Tubular Other steel
2008 2009
’000 tonnes
712
1,8892,723
4,465
663642
5,665
564
6,569
1,2152,073
4,123
0
2,000
4,000
6,000
8,000
Russia CIS Europe Americas Asia Africa &RoW
2008 2009
12,393
2,6991,261 668 585885
2,075
10,737
0
4,000
8,000
12,000
16,000
Russian &Ukrainian
North American European South African
2008 2009
’000 tonnes
151
408406
139
9591,197
147193
632
451
1,197
941
173215
636525
1,210
977
0
200
400
600
800
1,000
1,200
1,400
Semi-finished products Construction products Railway products Flat-rolled products Tubular products Other steel products
2Q09 1Q10 2Q10
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2Q 2010 Operational Results
Production of Rolled Products
‘‘000 tonnes
◦ In 2Q10, consolidated crude steel output was 4.3 mt, +26% vs. 2Q09 and +7% vs. 1Q10
◦ Consolidated production of semi-finished products was down 18% vs. 2Q09 and flat q-o-q while production of higher margin products grew, in particular (vs. 2Q09)
◦ construction products: Russia: +5%, Europe: + 192%, NA +44%◦ railway products: Russia: +51%◦ flat-rolled products: Europe: +63%, NA: +79%◦ tubular products: NA: +42%
-18% +26%
+29%+56%
+42% +24%
% - year-on-year comparison
34 50 62 48 4955
98 10798 85
615
68 7
0
50
100
150
200
250
300
2Q09 3Q09 4Q09 1Q10 2Q10
Construction products Flat-rolled products Other steel products
17 33 33 36 49
168226 246 205
2747
6 46
7
0
50100
150
200
250300
350
2Q09 3Q09 4Q09 1Q10 2Q10
Construction products Flat-rolled products Other steel products
65 108 92 104 94
121 79 71 90 94
115186 195
239 206
153117 139
193 215
0
100
200
300
400
500
600
700
2Q09 3Q09 4Q09 1Q10 2Q10
Construction products Railway products Flat-rolled products Tubular products
1,0841,497 1,455
1,106 1,282
798
936 868913
923285
263 321360
43071
907679
71
149128
125122
127
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2Q09 3Q09 4Q09 1Q10 2Q10
Semi-finished Construction Railway Flat-rolled Other steel
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2Q10 Production of Rolled Products by Assets
‘000 tonnes
2,3642,897 2,845
2,596
Russia
2,856
454
609
490 498
627
North America‘000 tonnes
‘000 tonnes‘000 tonnes
South AfricaEurope
330
192
264 284248
141149 157175
154
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Key Market Developments◦ Prices for semi-finished steel are driven by input
costs and by demand from emerging markets in Asia, the Middle East and North Africa
◦ International prices for semi-finished steel declined from May, having stabilised in July
◦ Russian domestic demand for construction steel in 2010 expected to be 5-10% higher than in 2009
◦ Expected steelmaking capacity utilisation in 3Q10:
◦ Russia – to remain >90%
◦ North America >90%
◦ Czech Republic – temporarily closed since July
◦ South Africa – 70%
◦ Russian mining assets are running at 85% capacity in coal and 90% in iron ore
◦ Vanadium expected to perform better than steel due to increase of vanadium usage rates in the emerging markets’ steel production sector closer to the levels of industrially developed countries
Evraz Selling PricesUS$/t
Vanadium Prices, FeV, LMBUS$/kg V
200
300
400
500
600
700
800
900
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10
Slabs, Russia, export* Billets, Russia, export*Rebars, Russia, FCA Plate, North America, FCA
15
20
25
30
35
40
Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10
* Weighted average contract prices
Key Investment Projects◦ CAPEX in 2010 expected to be around US$800m (vs. US$441m in 2009)◦ Approximately US$450m of 2010 CAPEX to be directed to increasing productivity and
development projects, key projects being:
Project Total CAPEXCum CAPEX by 31.12.09
2010 CAPEX Project Targets
Reconstruction of rail mill at NKMK US$440m US$30m US$220m
◦ Capacity of 950k tonnes of high-speed rails, including 450k tonnesof 100 metre rails
◦ On-stream by 2013
Reconstruction of rail mill at NTMK US$55m US$28m US$27m
◦ Production of higher-quality rails ◦ 550k tonnes capacity◦ On-stream by 2012
Pulverised coal injection (PCI) at NTMK and ZSMK US$320m US$0m US$10m
◦ Lower coke consumption from 420 to 320 kg/tonne◦ No need for gas consumption◦ On-stream by 2013
BOF workshop reconstructionNTMK US$260m US$230m US$20m
◦ Modernisation of production◦ Increasing capacity from 3.8 to 4.2 mtpa◦ On-stream by 2010
Reconstruction of CCM Slab №3 NTMK US$60m US$5m US$40m
◦ Modernisation of production◦ Further increase in steelmaking capacity from 4.2 to 4.5 mtpa◦ On-stream by 2010
Reconstruction of wheel & tyre mill (heat treatment shop) NTMK
US$100m US$87m US$13m◦ Production of higher-quality wheels◦ On-stream by 2010
Development of Mezhegeycoal deposit TBD US$1m Less than US$50m,
including license cost
◦ Maintaining self-sufficiency in high-quality hard coking coal after depletion of existing deposits
◦ On-stream by 2015
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Outlook for 2010
◦ Pricing affected by raw material costs, growth in emerging markets and moderate recovery in mature markets
◦ Russian and Ukrainian mills expected to continue running at high operating rates, utilisationof overseas assets increased in response to measured improvements in demand
◦ Steel sales redirected from export market to Russian domestic market following gradual demand improvement
◦ Market situation remains volatile
◦ Favourable fundamental trends being offset by lag effect between raw material price increase and delayed growth of steel sales prices
◦ Global demand for long products is expected to continue to strengthen on the back of infrastructure investments driven by various governments’ stimulus packages, designed to combat economic recession
◦ Outlook for 2Q 2010
◦ 2Q10 EBITDA is expected to be within the range of US$725-825m
+7 495 232-13-70 [email protected]
www.evraz.com