Acerinox Sa · BME:ACX
Acerinox Sa — Q3 2019 Earnings Presentation
27 slides from Acerinox Sa's earnings presentation, Nov 4, 2019
Slide 1: Q3 2019 Results Presentation
Q3 2019 RESULTS PRESENTATION 4 NOVEMBER 2019
Slide 2: Disclaimer
Q3 2019 RESULTS PRESENTATION DISCLAIMER This document may contain forward-looking information and statements about ACERINOX, S.A., its subsidiaries and/or its management. These forward-looking statements include financial projections and estimates and their underlying assumptions, and statements reg
Slide 3: Third Quarter Performance
Q3 2019 RESULTS PRESENTATION THIRD QUARTER PERFORMANCE Q3 MARKET HIGHLIGHTS Q3 ACERINOX HIGHLIGHTS X Seasonal slowdown ✔ NAS very robust X Nickel price increase not reflected in X Very challenging environment stainless transaction prices in EU and elsewhere Asia X Q3 Production: X Intensification of
Slide 4: Market Performance
Q3 2019 RESULTS PRESENTATION MARKET PERFORMANCE NICKEL FERROCHROME Source: Metal Bulletin 20,000 2017 2018 2019 165 154 139 142 138 124 118 112 120 104 102 Average price: cash/three months USD/mt 15,000 110 Average quarterly price US¢ / Lb. Cr 10,000 Source: LME 5,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 5: Main Financial Figures
Q3 2019 RESULTS PRESENTATION Q3 2019: MAIN FINANCIAL FIGURES Figures in million € Q3 EBITDA one offs: Q3 Strong FCF Reduction of net financial €-9 million inventory adjustment generation: €80 million debt by €59 million €+7 million sell of California warehouse Strong performance in a weaker environm
Slide 6: Quarterly Performance
Q3 2019 RESULTS PRESENTATION QUARTERLY PERFORMANCE MELTING PRODUCTION EBITDA 180 668 639 160 151 154 617 628 570 140 118 Thousand tons 542 516 120 97 103 100 90 Million € 80 58 60 40 20 0 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q118 Q218 Q318 Q418 Q119 Q219 Q319 FREE CASH FLOW NET FINANCIAL DEBT (Before
Slide 7: Cash Flow
Q3 2019 RESULTS PRESENTATION CASH FLOW Jan - Mar Apr - Jun Jul - Sep Jan - Sep Jan - Dec Jan - Sep Millones EUR 2019 2019 2019 2019 2018 2018 EBITDA 90 97 103 290 480 422 Changes in working capital 4 8 40 52 -87 -188 Changes in operating working capital -47 8 38 -1 -74 -192 - Inventories -32 8 -9 -3
Slide 8: Outlook
Q3 2019 RESULTS PRESENTATION OUTLOOK ▪ Prices stable at a low level in Europe and Asia Q4 EBITDA IS EXPECTED TO ▪ Macro uncertainties intensify BE SIMILAR TO and visibility remains weak Q3 19 ▪ Despite seasonal slowdown, the US will remain very robust Despite the traditional slowdown in Q4 and a ver
Slide 9: Thank You Q&A
Q3 2019 RESULTS PRESENTATION THANK YOU Q&A
Slide 10: Appendix
Q3 2019 RESULTS PRESENTATION APPENDIX Acerinox Europa AP Line NAS BA Line 10
Slide 11: Acerinox: Global Player
Q3 2019 RESULTS PRESENTATION ACERINOX: GLOBAL PLAYER • Spanish multinational company • Fully dedicated to stainless steel • Net sales: EUR 5,011 million (2018) • Among largest producers in the world with 3.5 million tons of melting capacity • 6 factories in 4 continents • 6,709 professionals in 5 co
Slide 12: History and Main Shareholders
Q3 2019 RESULTS PRESENTATION HISTORY 1970, incorporation of ACERINOX, S.A.(Spain) 1990, incorporation of NORTH AMERICAN STAINLESS (USA) 100% Acerinox S.A. Acerinox, S.A. 76% 2002, incorporation of COLUMBUS STAINLESS (South Africa) I.D.C. 24% 2009, incorporation of BAHRU STAINLESS (Malaysia) Acerinox
Slide 13: Acerinox Principles and Values
Q3 2019 RESULTS PRESENTATION ACERINOX PRINCIPLES AND VALUES 13
Slide 14: Acerinox Production Capacity
Q3 2019 RESULTS PRESENTATION ACERINOX PRODUCTION CAPACITY Million mt (*) Once it’s completed ACERINOX EUROPA FULLY INTEGRATED PLANT Melting 1.1 Hot Rolling 0.9 Cold Rolling 0.7 NORTH AMERICAN STAINLESS Long Prod. 0.2 FULLY INTEGRATED PLANT Melting 1.4 Hot Rolling 1.2 BAHRU STAINLESS Cold Rolling 0.8
Slide 15: Stainless Steel World Production
Q3 2019 RESULTS PRESENTATION STAINLESS STEEL WORLD PRODUCTION Thousand mt 55,000 World production of Stainless 50,000 Steel in 2018: 45,000 50.7 million mt 40,000 (+5.5% over 2017) 35,000 30,000 25,000 Compound annual growth rate 1950 – 2018: 20,000 15,000 + 5.9% 10,000 5,000 0 1950 1960 1970 1980 1
Slide 16: Stainless Steel Use per Sector, 2018
Q3 2019 RESULTS PRESENTATION STAINLESS STEEL USE PER SECTOR, 2018 Other transport 5% Electrical Machinery 8% Metal products Motor vehicles 9% 38% Construction 12% Mechanical engineering 29% Source: ISSF 16
Slide 17: Stainless Steel World Production by Region
Q3 2019 RESULTS PRESENTATION STAINLESS STEEL WORLD PRODUCTION Million mt China accounts for 55% of world production in 2018 50 40 Others Japan 30 India China 20 USA Europe 10 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Others: Brazil, Russia, S. Africa
Slide 18: Acerinox Production
Q3 2019 RESULTS PRESENTATION ACERINOX PRODUCTION Thousand mt 652 637 611 668 605 615 631 668 639 617 628 601 611 562 546 575 516 570 542 MELTING SHOP -10% over 9M 2019 -12% over Q3 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 2017 2018 2019 593 524 536 498 481 526 563 5
Slide 19: Balance Sheet
Q3 2019 RESULTS PRESENTATION BALANCE SHEET ASSETS LIABILITIES Million € Sep-19 2018 Sep-18 Variation Million € Sep-19 2018 Sep-18 Variation Non-current assets 2,192 2,134 2,119 3% Equity 2,168 2,119 2,104 2% Current assets 2,644 2,474 2,644 7% Non-current liabilities 1,309 1,226 1,300 7% - Inventori
Slide 20: Working Capital
Q3 2019 RESULTS PRESENTATION WORKING CAPITAL 2,000 1,500 1,000 Million € 500 0 -500 -1,000 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Jun-19 Sep-19 Inventories Trade Debtors Trade Creditors Working Capital Net Financial Debt 20
Slide 21: Net Financial Debt
Q3 2019 RESULTS PRESENTATION NET FINANCIAL DEBT 1,200 1,000 800 600 Million € 1,075 1,084 887 400 711 582 616 620 609 582 529 552 200 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Sep 2019 Gearing 61.3% 56.3% 47.1% 33.9% 34.1% 33.2% 35.1% 28.6% 30.9% 26.0% 26.9% NFD / LTM -5.63 2.84 2.60 2.94
Slide 22: 9M Cash Flow
Q3 2019 RESULTS PRESENTATION 9M CASH FLOW Million € 22
Slide 23: Capital Allocation
Q3 2019 RESULTS PRESENTATION CAPITAL ALLOCATION CAPEX RETURN TO SHAREHOLDERS 173 173 (*) Scrip dividend 0.50 144 0.44 0.45 0.45 94 € / share Million € 2015 2016 2017 2018 2016 (*) 2017 2018 2019 CAPEX IN PROGRESS: • Coil build up line - NAS DIVIDEND INCREASE 11% • Ladle furnace - Acerinox SHARE BUYB
Slide 24: Excellence Plan V
Q3 2019 RESULTS PRESENTATION EXCELLENCE PLAN V 2017-2018 EXCELLENCE PLAN V ▪ Focused on operational excellence Target : 50 million EUR Achieved: 55%, 27 million EUR ▪ Best practices in each business unit 5 chapters: Operations, Working Capital, Personnel, Commercial ▪ Management and control tool and
Slide 25: The Next Step: Excellence 360º
Q3 2019 RESULTS PRESENTATION THE NEXT STEP: EXCELLENCE 360º 25
Slide 26: Excellence 360º
Q3 2019 RESULTS PRESENTATION EXCELLENCE 360º 26
Slide 27: Thank You
Q3 2019 RESULTS PRESENTATION THANK YOU