Mechel · RUS:MTLR
Mechel — 9M 2005 Earnings Presentation
14 slides from Mechel's earnings presentation, Dec 16, 2005
Slide 1: 2005 9 Months Results Presentation
2005 9 Months Results Presentation December 16, 2005
Slide 2: Disclaimer
Disclaimer This presentation 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 Mechel OAO (Mechel) or any of its subsidiaries in any jurisdiction or an inducement to enter into investment acti
Slide 3: Introduction and Overview
Introduction and Overview 3
Slide 4: Mechel at a glance
Mechel at a glance Low-cost vertically Strong mining business: integrated producer, 2nd largest coking coal virtually self-sufficient producer and largest in raw materials exporter NYSE-listed, Strategy to increase best corporate segment value and governance practices overall efficiency Able to incr
Slide 5: Highlights
Highlights Net income was $314.72 million in 9M05 on revenues of $2.91 billion Consolidated EBITDA margin of 19.6% High profitability of the mining segment Efficiency improvement programs in the steel segment yielding first results Maintained leadership in core products — 2nd largest cokin
Slide 6: 9M05: Mining Segment
9M05: Mining Segment Operating income of $341.28 million on revenues of $823.55 million — Operating income growth of 36.5% — Revenue growth of 47.9% EBITDA margin of 46.1%. Mining segment EBITDA represented 66.7% of consolidated EBITDA Substantial and growing sales to 3rd parties Strong outp
Slide 7: Mining Strategy
Mining Strategy Organic growth to increase coal production to 25 million tonnes by 2010, including the greenfield development of two additional license areas currently under consideration Increase in coal reserves to ensure further development of the mining segment New coal projects, end 2004/20
Slide 8: 9M05: Steel Segment
9M05: Steel Segment Revenues increased 8.8% to $2.09 billion in 9M05 Steel segment EBITDA constituted 33.3% of consolidated EBITDA Efficiency and cost-saving programs resulted in improving EBITDA margin Steel segment production Product 9М05, thousand tonnes 9М05 vs. 9М04, % Hardware 441 +4.0 R
Slide 9: Overall strategy
Overall strategy Management focus on profitability of operations Mining Expand the mining segment, both through organic growth and acquisitions Maintain control over costs Steel Focus on improving profitability of steel operations through cost control and efficiency gains as primary goals goin
Slide 10: Financial Review
“ MECHEL Financial Review
Slide 11: Strong financial performance
Strong financial performance Revenues EBITDA* 4 000 3 636 1 000 908 30% 2 910 3 000 750 (US$m) 2 028 569 (US$m) 2 000 500 20% 1 314 341 1 020 1 000 250 207 106 0 0 10% 2001 2002 2003 2004 9M05 2001 2002 2003 2004 9M05 EBITDA EBITDA margin (rhs) Net profit * Total assets 90% 600 543 44% 4 000 3 678 3
Slide 12: Segment operations
Segment operations Mining segment Steel segment 1 400 3 000 60% 60% 1 200 2 500 50% 50% 1 000 2 000 40% 40% (US$m) (US$m) 800 1 500 30% 30% 600 20% 1 000 20% 400 200 10% 500 10% - 0% - 0% 2001 2002 2003 2004 9M05 2001 2002 2003 2004* 9M05 Intersegment revenues Intersegment revenues Revenues Revenues
Slide 13: Correction of 1H and 1Q 2005 Results
Correction of 1H and 1Q 2005 Results Mechel corrects the accounting for certain trading transactions within the steel segment Correction in netting off certain trading transactions Correction has no effect on gross or net operating income Correction affects revenue, cost of goods sold, and mar
Slide 14: Mechel at a glance
Mechel at a glance Low-cost vertically Strong mining business: integrated producer, 2nd largest coking coal virtually self-sufficient producer and largest in raw materials exporter NYSE-listed, Strategy to increase best corporate segment value and governance practices overall efficiency Able to incr