Aperam S.a. · EURONEXT:APAM
Aperam — Investor Day (November 2014)
24 slides from Aperam's investor day presentation, Nov 26, 2014
Slide 1: Investor Day – Isbergues
Investor Day – Isbergues November 26, 2014 Sandeep Jalan – Chief Financial Officer © Aperam 0
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This document may contain forward-looking information and statements about Aperam and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with re
Slide 3: Market recent evolution and prospect
Market recent evolution and prospect 2
Slide 4: Nickel price instability keeps stainless steel market under pressure
Market recent evolution and prospect Despite positive evolution in the first semester, the nickel price instability keeps the stainless steel market under pressure Nickel - LME Cash (USD/t) Chinese versus European CR 304 2B 2mm coil transaction price 5,000 3,500 35,000 4,500 30,000 3,000 25,000 4,00
Slide 5: European demand improving but still under pressure
Market recent evolution and prospect European demand improving but still under pressure Stainless steel base price in South Europe for CR 304 2B 2mm coil Stocks of flat stainless steel in EU-27 for distribution (USD/t) 2,050 340 1,850 320 300 6 month of 1,650 destocking 280 1,450 260 240 1,250 220 1
Slide 6: Aperam has been continuously delivering
Market recent evolution and prospect Aperam has been continuously delivering EBITDA margin of Aperam and base price evolution (USD/t) Identified EBITDA drivers – Q4 2010 vs Q3 2014 proforma (USDm) 600 400 1,500 350 500 1,450 300 1,400 400 250 1,350 300 200 1,300 150 200 100 1,250 1,200 100 50 0 1,15
Slide 7: Aperam performance
aperam Aperam performance
Slide 8: Key pillars of the Leadership Journey
Aperam performance Key pillars of the Leadership Journey® Leadership Journey® initiatives – Core Pillars Key projects completed since beginning of 2011 Launched at the early stage of the program, the • In Brazil, VSS*, switch from LPG to natural gas and conversion of blast restructuring initiatives
Slide 9: USD415m of solid Leadership Journey gains captured
Aperam performance USD415m of solid Leadership Journey® gains captured Cumulated gains (USD million) Productivity evolution, average 450 10,500 500 400 450 10,000 400 350 350 300 9,500 300 250 9,000 250 200 200 150 8,500 150 100 100 8,000 50 50 0 7,500 0 Q4 2010 2011 2012 2013 2014 1 1 Q 11 Q 12 Q 1
Slide 10: Combining Top Line strategy with Leadership Journey
Aperam performance Aperam’s know-how to combine Top Line strategy with Leadership Journey® to further enhance its profitability level Aperam’s strategic plan process 1 A commercial plan to optimize & monitor the product mix 1. Optimize product mix 2 A cost reduction program to increase the competiti
Slide 11: New projects underway as part of Leadership Journey
Aperam performance New projects underway as part of Leadership Journey® Genk – CAP2* upgrade Gueugnon – CAP10* upgrade Timoteo - Sendzimir Mill #1 upgrade Upgrade of Motors, drives and Debottlenecking by increasing the Upgrade of electrical equipments and accumulators of CAP2*, which is the most pow
Slide 12: New projects underway as part of Top Line strategy and Leadership Journey
Aperam performance New projects underway as part of Top Line strategy and Leadership Journey® A&S Division (Imphy - Wire Rod mill) HGO project Capex: USD10m Capex: USD17m Imphy is presently a cost leader on Nickel Alloys Wire Rods, due Produce High Permeability Grain Oriented (HGO) to a unique integ
Slide 13: Solid recovery on EBITDA with focus on sustainable margins
Aperam performance Solid recovery on EBITDA with focus on sustainable margins EBITDA evolution EPS improvements 500 12% EPS Ytd September 2014 at USD 0.97/share. 10% 400 Depreciation base reduced to USD 240m – USD 250m / year 8% range (a reduction of about USD 50m / year) pursuant to review 300 of r
Slide 14: Balance sheet and financing
Balance sheet and financing 13
Slide 15: Working capital and investments under control
Balance sheet and financing Working capital and investments under control… Working capital evolution Capex evolution, in USDm 1,400 80 75 300 1,200 70 250 1,000 65 60 200 800 55 600 150 50 400 45 100 40 200 50 35 0 30 - Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2007 2008 2009 2010 2011 2012 2013
Slide 16: Strong cash generation and net debt reduction
Balance sheet and financing … allowing strong cash generation and net debt reduction Cumulated net cash provided by operating activities Quarterly net debt of Aperam evolution (USD million) (USD million) 1,200 1,150 1,000 1,050 800 950 600 850 400 750 200 650 0 550 550 Q 12 Q 13 Q 11 Q 11 Q 011 Q 12
Slide 17: A solid and stable balance sheet
Balance sheet and financing A solid and stable balance sheet Net debt and working capital levels (USDm) Net gearing, in % 50% 1,400 1,200 40% 1,000 30% 800 600 20% 400 10% 200 - 0% 2 1 Q 11 Q 12 Q 012 Q 12 Q 13 Q 13 Q 13 Q 13 Q 14 Q 14 14 0 Q 11 Q 11 Q 12 0 1 Q 11 Q 11 Q 12 Q 12 Q 12 Q 13 Q 13 Q 13
Slide 18: Diversified and improved funding structure
Balance sheet and financing Diversified and improved funding structure Total debt and available lines breakdown as of Debt maturity profile (USD million) as of September 30, 2014 [1], [2] September 30, 2014 [1] High Yield Bonds 700 BBF* & 600 other debts 500 400 300 200 100 - 2014 2015 2016 2017 201
Slide 19: Debt restructuring and rating improvement
Balance sheet and financing Debt restructuring and rating improvement Debt restructuring actions in 2014 Rating & Outlook Standard & Poor’s (7 November 2014): Rating upgrade from B+ to BB- with stable outlook Convertible Bond Ornane of USD300m issued in June 2014 at coupon of 0.625% and premium of 3
Slide 20: Ranking
Balance sheet and financing Ranking Enterprise Value ranking (USD million)* Net debt level ranking* 6,000 1,000 5,000 200% 5,000 800 4,000 150% 4,000 600 3,000 3,000 100% 400 2,000 2,000 50% 200 1,000 1,000 - - - 0% Competitor 1 Competitor 2 Competitor 3 Aperam Q4 Q3 Q4 Q3 Q4 Q3 Q4 Q3 2013 2014 2013
Slide 21: Next step on deployment of cash-flow
Balance sheet and financing Next step on deployment of cash-flow Plan 2013 - 2014 Reduce Net Financial Debt to USD 550 m Reduce further Future options Dividends Growth Net Debt We remain focused on year end Net Debt Target of USD550m, towards objective of a stronger Balance Sheet. Board will examine
Slide 22: Summary scorecard
aperam Summary scorecard
Slide 23: Commitment to Aperam's strategy
Summary scorecard Commitment to Aperam’s strategy Progress until September 2014 Medium term targets • EBITDA USD430m, highest since 2008, • Continued focus on sustainable margins with more than double of Ytd Sep 2013 the Leadership Journey® and the Top Line strategy Profitability • EBITDA margin at
Slide 24: Q&A
Q&A 23