Acerinox Sa · BME:ACX
Acerinox Sa — FY2017 Earnings Presentation
31 slides from Acerinox Sa's earnings presentation, Feb 28, 2018
Slide 1: 2017 Business Year Results
2017 BUSINESS YEAR RESULTS Madrid 28 February 2018 0
Slide 2: Disclaimer
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 regarding the intent, belief or
Slide 3: 2017: Main Financial Figures
2017: MAIN FINANCIAL FIGURES Million EUR 2017 2016 Variation Net Sales 4,627 3,968 17% EBITDA 489 329 49% EBIT 318 157 102% Results before Taxes and Minorities 299 128 134% Results after Taxes and Minorities 234 80 192% Net Financial Debt 609 620 -2% Net Financial Debt / EBITDA 1.2 1.9 -34% Net Fina
Slide 4: Acerinox EBITDA Evolution
ACERINOX EBITDA EVOLUTION Million EUR (% over sales) 489 5 0 0 454 2 0 . 0 % 381 341 329 4 0 0 3 0 0 286 228 10.6% 198 10.4% 171 1 0 . 0 % 8.5% 8.3% 2 0 0 7.3% 6.8% 5.8% 4.3% 1 0 0 3.4% 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0 . 0 % - 1 0 0 - 2 0 0 -6.4% -191 - 3 0 0 - 1 0 . 0 % 3
Slide 5: Acerinox Accident Rate Evolution
A C E R I N O X A C C I D E N T R AT E E V O L U T I O N 9.5 Target: zero accidents 7.5 5.4 5.8 5.0 3.3 3.3 2.6 2010 2011 2012 2013 2014 2015 2016 2017 • Accident rate = total no. injuries and illnesses * 200,000 / no. worked hours 4
Slide 6: Acerinox vs Consensus
ACERINOX vs CONSENSUS Consensus compiled by Acerinox at January 26th, 2017 CONSENSUS 1 YEAR AGO Accumulated Variation over Million EUR 2017 2017 Consensus SALES 4,627 4,419 5% EBITDA 489 443 10% % over sales 11% 10% EBIT 318 282 13% % over sales 7% 6% RESULTS BEFORE TAXES 299 232 29% PRO FORMA RESUL
Slide 7: Acerinox EBITDA
ACERINOX EBITDA Million EUR 2017: 489 Mill EUR (+49% over 2016) 200.00 191 180.00 160.00 +56% 140.00 126 A v e r a g e : 1 2 2 M i l l E U R 119 120.00 100.00 80.00 -56% 60.00 53 40.00 20.00 0.00 Q1 Q2 Q3 Q4 6
Slide 8: Raw Material Prices
R AW M AT E R I A L P R I C E S Nickel 2016 2017 2018 1 6 , 0 0 0 A v e r a g e p r i c e : c a s h / t h r e e m o n t h s U S D / m t ( L M E ) 1 4 , 0 0 0 1 2 , 0 0 0 1 0 , 0 0 0 Volatility of raw 8 , 0 0 0 O N D J F M A M J J A S O N D J F material Ferrochrome prices 165 ( M e t a l B u l l e t
Slide 9: Stainless Steel Prices
S TA I N L E S S S T E E L P R I C E S , 2 0 1 7 AISI 304 2.0 mm. USD/mt, coil final price, alloy surcharge included 2017 2018 3,100 2,900 Source: Platts and Acerinox 2,700 2,500 2,300 2,100 1,900 1,700 1,500 J F M A M J JL A S O N D J F M US EU Asia Positive trend 8
Slide 10: Real GDP Growth
REAL GDP GROWTH Real GDP growth (2013=100) Euro area ASEAN-5 130 130 120 120 +5.3% o v e r 2 0 1 6 110 +2.4% 110 o v e r 2 0 1 6 Growth in all 100 100 regions 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Source: IMF South Africa United States 130 130 120 120 110 110 +2.3% o v e r 2 0 1 6 +0.9%
Slide 11: Sector Indicators
S E C T O R I N D I C AT O R S Vehicle Construction Household production appliances +3.7% +4.3% +3.7% Eurofer´s estimate for Eurofer´s estimate for Eurofer´s estimate for 2017 2017 2017 -2.5% +3.8% +5.8% Year to December Year to December Year to December Source: Wards Auto Source: US Census Bureau S
Slide 12: Estimated Growth of Apparent Consumption
E S T I M AT E D G R O W T H O F A P PA R E N T C O N S U M P T I O N % 2016 % 2017e % 2018f Euro + Africa +6.9 +2.6 +2.2 China America +13.8 +6.5 +5.7 +2.2 +2.2 +2.5 Asia without China Source: ISSF October 2017/CSSC +8.0 +3.2 +3.0 e: estimates f: forecast WORLD +9.9 +4.6 +4.1 11
Slide 13: Stainless Steel World Production
S TA I N L E S S S T E E L W O R L D P R O D U C T I O N Thousands mt Estimated world 50,000 production of Stainless Steel in 45,000 2017e: 40,000 35,000 48.1 million mt 30,000 ( +Tasa 5 . 7 de % crecimiento o v e r 2 0anual 16) 25,000 Años 1950 a 2011e: +5,8% Compound annual growth 20,000 rate 1950
Slide 14: Stainless Steel Inventories
S TA I N L E S S S T E E L I N V E N T O R I E S Thousand mt 100 A v e r a g e 2 0 1 5 - 2 0 1 7 7 5 , 6 9 2 m t 70 Days of stock 80 65 60 INVENTORIES 60 55 OF COLD- 40 ROLLED 50 20 45 Source: EHV 0 40 J F M A M J JL A S O N D J F M A M J JL A S O N D J F M A M J JL A S O N D Germany 2015 2016 2017
Slide 15: Acerinox Production
ACERINOX PRODUCTION Thousands mt Year 2017 Year 2016 Variation Q1 Q2 Q3 Q4 Accumulated Jan-Dec 2017/2016 Melt shop 668 605 615 631 2,519 2,475 1.8% Hot Rolling 593 535 542 560 2,231 2,209 1.0% Cold Rolling 438 436 427 437 1,738 1,716 1.3% Long Product (Hot Rolling) 58 59 54 62 234 224 4.3% New recor
Slide 16: Acerinox Quarterly Profit & Loss Account
A C E R I N O X Q U A R T E R LY P R O F I T & L O S S A C C O U N T Million EUR January-December Q1 2017 Q2 2017 Q3 2017 Q4 2017 2017 2016 Variation Net sales 1,252 1,191 1,067 1,116 4,627 3,968 17% Gross operating result / EBITDA 191 126 53 119 489 329 49% % over sales 15% 11% 5% 11% 11% 8% EBIT 1
Slide 17: Acerinox Balance Sheet
ACERINOX BALANCE SHEET Million EUR Net Debt / EBITDA: 1.2x Gearing: 31% ASSETS LIABILITIES Million € 2017 2016 Variation Million € 2017 2016 Variation Non-current assets 2,147.62 2,357.53 -8.9% Equity 1,970.30 2,168.68 -9.1% Current assets 2,256.39 2,097.51 7.6% Non-current liabilities 1,149.38 1,19
Slide 18: Financial Strength
FINANCIAL STRENGTH Million EUR NET FINANCIAL DEBT AND NET FINANCIAL EXPENSES NET DEBT / EBITDA 7 11 616 620 66 582 609 529 55 54 2.94 2.48 44 2.32 30 1.88 19 1.36 1.25 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 17
Slide 19: Financial Strategy
F I N A N C I A L S T R AT E G Y Million EUR 750 million EUR refinanced in 2017 Maturities extended Cost reduction High quality debt Lowest finance expenses in the industry 19 million EUR in 2017 18
Slide 20: Cash Flow Statement
C A S H F L O W S TAT E M E N T Million EUR EBITDA Working Taxes Financial Others Operating CAPEX Free Cash Cash Flow Capital charges Cash Flow Cash Flow dividend after Dividends 1 (82) (28) (13) (185) FY 2017 489 489 366 407 379 (124) 181 181 57 16 (56) (35) FY 2016 14 269 (157) 329 329 289 255 (27
Slide 21: Cash Generation
C A S H G E N E R AT I O N 2 0 0 8 - 2 0 1 7 Million EUR Cash generation for: investments shareholder remuneration debt reduction UNIQUE CASE Cash generation 3,081 CAPEX 1,771 Return to shareholders 996 Net debt reduction 314 20
Slide 22: Stock Market Evolution of Acerinox & IBEX 35
STOCK MARKET EVOLUTION OF ACERINOX, S.A. & IBEX 35 Daily percentage data, year 2016 and 2017 60% IBEX 35 50% ACERINOX 40% 30% 26.5% 20% 10% 5.2% 0% -10% -20% -30% 2016 2017 21
Slide 23: Return to Shareholders
RETURN TO SHAREHOLDERS EUR/share (*) Scrip dividend Dividend Consistant remuneration to shareholders Back to cash in 2017 0.449 0.449 0.44 0.45 0.433 0,433 0,449 0,449 0,35 0,35 2013 (*) 2014 (*) 2015 (*) 2016 (*) 2017 CASH: 43% 49% 41% 23% 100% 22
Slide 24: Strategic Plan
S T R AT E G I C P L A N 2 0 1 6 - 2 0 2 0 Leading product Operational Excellence Operational Optimizing capacity Excellence utilization Global S T R AT E G I C Presence PLAN Quick-return investments Financial Strength Financial Cash flow generation Strength Sustainability 23
Slide 25: 2017-2018 Excellence Plan V
EXCELLENCE PLAN 2017-2018 EXCELLENCE PLAN V Ta r g e t : 5 0 m i l l i o n E U R 5 chapters: Operations, Working Capital, Personnel, Commercial and Supply Chain PERFORMANCE (million EUR) (% over the target) Performance to December 2017: 49% 97 (24.6 million EUR) 73% Reduction of inventories (mt) 5
Slide 26: Capex
CAPEX Million EUR 173 173 94 2015 2016 2017 Construction AP5, Acerinox Europa BA, NAS 25
Slide 27: Capex: North American Stainless
CAPEX North American Stainless (NAS) Bright Annealing line (BA) and Sendzimir Mill (ZM) Start up: second quarter 2017 Successful ramp up Good acceptance from customers Current capacity utilization above 80% High value-added product Main applications: Appliances (washers and dryers),tank
Slide 28: Capex: Construction AP5, Acerinox Europa
CAPEX Acerinox Europa Annealing and Pickling line (AP) and Sendzimir Mill (ZM) Construction AP5, Acerinox Europa 140 million EUR Payback: <5 years Start up: March 2018 Goals: high value-added products sales increase to end users capacity utilization improvement cost savings and emission reduction 27
Slide 29: Outlook 2018
OUTLOOK 2018 OPPORTUNITIES CHALLENGES Economic growth: increase in o Overcapacity consumption o Vo l a t i l i t y o f r a w m a t e r i a l p r i c e s Efficiency improvements o Trade actions Ramp up of new investments Financial strength 28
Slide 30: Questions and Answers
QUESTIONS AND ANSWERS Torre Europa, Madrid 29
Slide 31: Thank You
THANK YOU 30