Acerinox Sa · BME:ACX

Acerinox Sa — FY2011 Earnings Presentation

54 slides from Acerinox Sa's earnings presentation, Feb 29, 2012

  1. Slide 1: 2011 Business Year Results

    2011 BUSINESS YEAR RESULTS ACERINOX Madrid, 29th February 2012

  2. Slide 2: Main Financial Figures of Acerinox

    MAIN FINANCIAL FIGURES OF ACERINOX 2011 2010 Variation Net Sales 4,672.24 4,500.47 3.8% EBITDA 340.51 381.07 -10.6% Results after Taxes and 73.73 122.74 -39.9% Minorities Net financial debt 886.60 1,083.57 -18.2% Net financial debt / EBITDA 2.60 2.84 -8.4% Net financial debt / Equity 47.1% 56.3% -16

  3. Slide 3: Stainless Steel Market Worldwide

    STAINLESS STEEL MARKET WORLDWIDE MAIN DRIVERS 2008 – 2011: General economy Stainless Steel sector  Crisis  Moving to Asia  Lack of liquidity  Overcapacity  Raw materials volatility 2

  4. Slide 4: Development of the Stainless Steel Market: Mini-Cycles

    DEVELOPMENT OF THE STAINLESS STEEL MARKET: MINI-CYCLES QUICK RESTOCKING [ first half ]  Due to overcapacity  Lack of producers discipline  Consequence: DIFFICULTIES IN INCREASING PRICES QUICK ADJUSTMENTS [ second half ]  Lack of visibility  Lack of liquidity  Consequence: LOOSING OPPORTUNITIES

  5. Slide 5: Managing the Crisis: Europe

    MANAGING THE CRISIS: EUROPE  CONSUMPTION DOWN  LACK OF DISCIPLINE  LACK OF STABILITY  MARKET WEAKNESS  LOW PRICES 4

  6. Slide 6: Managing the Crisis: USA

    MANAGING THE CRISIS: USA  STABLE CONSUMPTION  BALANCE SUPPLY DEMAND  DISCIPLINE  REASONABLE PRICES 5

  7. Slide 7: Managing the Crisis: Asia

    MANAGING THE CRISIS : ASIA  INCREASE IN CONSUMPTION  STRONG COMPETITION  LOW PRICES  UNFAIR TRADE RULES 6

  8. Slide 8: Managing the Crisis: Acerinox

    MANAGING THE CRISIS: ACERINOX  HEALTHY BALANCE SHEET  STRONG CONTROL OF INVENTORIES  REDUCING PRODUCTION CYCLE  COST CONTROL - Excellence Plan and fix costs savings -  GEOGRAPHICAL DIVERSIFICATION  SOLID AND CONSISTENT STRATEGY 7

  9. Slide 9: Evolution of the Stainless Steel World Production

    EVOLUTION OF THE STAINLESS STEEL WORLD PRODUCTION Millons Tm Year 2007 Year 2008 Year 2009 Year 2010 Year 2011e -6.8% -5.1% +26.4% +2.9% 27.8 25.9 24.6 31.1 32.0  Europe & Africa  Asia  Americas 8

  10. Slide 10: Raw Materials Price in the L.M.E. 2002-2011

    RAW MATERIALS PRICE IN THE L.M.E. [ 2002 – 2011 ] Daily values (USD/Mt, 3 months) 5.000 60.000 12.000 5.000 4.000 50.000 10.000 4.000 40.000 8.000 3.000 3.000 30.000 6.000 2.000 2.000 20.000 4.000 1.000 1.000 10.000 2.000 0 0 0 0 02 03 04 05 06 07 08 09 10 11 Nickel Copper Aluminium Zinc 9

  11. Slide 11: Raw Materials Price in the L.M.E. Year 2011

    RAW MATERIALS PRICE IN THE L.M.E. [ Year 2011 ] Daily values (USD/Mt, 3 months) 3.000 30.000 12.000 3.000 2.500 25.000 10.000 2.500 2.000 20.000 8.000 2.000 1.500 15.000 6.000 1.500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Nickel Copper Aluminium Zinc 10

  12. Slide 12: Official Nickel Price in the L.M.E. 2010-2011

    OFFICIAL NICKEL PRICE IN THE L.M.E. [ 2010 - 2011 ] Average price: cash / three months (USD/Mt. Ni) 35,000 30,000 25,000 20,000 15,000 10,000 2010 2011 5,000 0 J F M A M J J A S O N D J F M A M J J A S O N D 11

  13. Slide 13: Stainless Steel Cold Rolled Sheet Prices AISI 304

    STAINLESS STEEL COLD ROLLED SHEET PRICES AISI 304 2.0 mm [ 2010 – 2011 ] USD/Mt, final price, alloy surcharge included 5,000 4,500 USA 4,000 GERMANY 3,500 ASIA (average price of China, South Korea and Taiwan) 3,000 2,500 2,000 2010 2011 Source: Metal Bulletin Research “Stainless Steel Monthly” 12

  14. Slide 14: Production of Acerinox

    PRODUCTION OF ACERINOX YEAR 2011 Acerinox Variation Flat Products [Mt] Europa NAS Columbus Bahru TOTAL 2011/2010 MELTING SHOP 639,679 937,087 444,036 2,020,801 -1.9% HOT ROLLING SHOP 564,046 779,623 435,564 1,779,234 -0.2% COLD ROLLING SHOP 433,063 586,623 248,374 2,276 1,270,337 +1.6% Variation Lon

  15. Slide 15: Evolution of Acerinox Production

    EVOLUTION OF ACERINOX PRODUCTION Melting Shop (Thousand Mt) 700,000 559,227 571,646 600,000 535,544 492,691 492,256 504,909 500,000 472,132 451,990 400,000 300,000 200,000 100,000 0 1ºT 2ºT 3ºT 4ºT 1ºT 2ºT 3ºT 4ºT Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Year 2010 Year 2011 14

  16. Slide 16: Evolution of Stocks of Acerinox 2007-2011

    EVOLUTION OF STOCKS OF ACERINOX 2007 - 2011 2007 2008 2009 2010 2011 d ej f m m aa mm jj jj aa ss oo nn dd ej f mm aa mm j jj aa ss oo nn dd ej ff m m aa mm jj jj aa ss oo nn dd e j ff mm aa mm j j j j aa ss oo nn dd e j f f mm aa mm j j j j a a s s oo n n dd 0% -5% -10% -15% -20% -25% -30% -35% -40

  17. Slide 17: Human Resources

    HUMAN RESOURCES 2011 2010 Variation Acerinox, S.A. 68 2,529 -1.7% Acerinox Europa 2,417 NAS 1,372 1,368 0.3% Columbus 1,708 1,751 -2.5% Bahru Stainless 226 101 123.8% Roldan & Inoxfil 578 607 -4.8% National Commercial Societies 388 403 -3.7% International Commercial Societies 601 627 -4.1% Total 7,3

  18. Slide 18: Accidents Rate

    ACCIDENTS RATE 30 25 20 15 10 ACERINOX AVERAGE 5 NAS 0 COLUMBUS 2004 2005 2006 2007 2008 2009 2010 2011 • Accident rate = total no. injuries or illnesses * 200,000 / no. worked hours. 17

  19. Slide 19: Consolidated Group Investments

    CONSOLIDATED GROUP INVESTMENTS Million euro 2011 2010 Acerinox, S.A. 0.4 Acerinox Europa 22.8 23.8 NAS 17.0 15.4 Columbus 11.5 11.5 Bahru Stainless 104.0 154.4 Roldan & Inoxfil 9.6 0.8 National Commercial Societies 0.1 0.2 International Commercial Societies 3.9 11.3 Total 169.3 217.3 18

  20. Slide 20: Quarterly Profit & Loss Account of the Consolidated Group

    QUARTERLY PROFIT & LOSS ACCOUNT OF THE CONSOLIDATED GROUP JANUARY - DECEMBER Million € Q1 11 Q2 11 Q3 11 Q4 11 2011 2010 Variation Net sales 1,413.35 1,147.13 1,061.29 1,050.48 4,672.24 4,500.47 3.8% Gross margin 388.81 329.84 261.07 240.24 1,219.96 1,236.28 -1.3% % over sales 27.5% 28.8% 24.6% 22.9

  21. Slide 21: Evolution of Acerinox Net Sales

    EVOLUTION OF ACERINOX NET SALES Million euros 7,000 6,500 6,000 5,500 5,000 Consolidated Group 4,672 4,500 NAS 4,000 Trading Companies 3,500 Acerinox Europa (*) 3,000 Columbus 2,500 2,200 2,000 2,033 Roldan & Inoxfil 1,500 1,414 1,000 802 500 265 0 02 03 04 05 06 07 08 09 10 11 (*) Acerinox, S.A. fi

  22. Slide 22: Geographical Distribution of Acerinox Net Sales

    GEOGRAPHICAL DISTRIBUTION OF ACERINOX NET SALES YEAR 2011 YEAR 2010 21

  23. Slide 23: Evolution of the Consolidated Group EBITDA

    EVOLUTION OF THE CONSOLIDATED GROUP EBITDA Million euros (% over sales) 700 655 500 381 341 10.9% 300 171 8.7% 7.2% 100 5.9% 2007 2008 2009 2010 2011 -100 -5,5 -191 -300 22

  24. Slide 24: Quarterly Evolution of the Result After Taxes and Minorities

    QUARTERLY EVOLUTION OF THE RESULT AFTER TAXES AND MINORITIES Million euros 2009 2010 2011 23

  25. Slide 25: Result After Taxes and Minorities

    RESULT AFTER TAXES AND MINORITIES Million euros 400 350 312 300 250 200 150 123 100 74 50 0 2007 2008 2009 2010 2011 -50 -10 -100 -150 -200 -250 -229 24

  26. Slide 26: Condensed Balance Sheet of the Consolidated Group

    CONDENSED BALANCE SHEET OF THE CONSOLIDATED GROUP YEAR 2011 ASSETS 2011 2010 Variation LIABILITIES 2011 2010 Variation Non current assets 2,251.44 2,235.57 0.7% Equity 1,881.19 1,923.74 -2.2% Current assets 1,819.78 2,004.79 -9.2% Non current liabilities 988.32 992.19 -0.4% Interest bearing loan and

  27. Slide 27: Evolution of the Working Capital

    EVOLUTION OF THE WORKING CAPITAL Million euros 2,750 2,500 2,250 2,000 1,750 1,500 1,250 1,000 750 500 250 0 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 J F M A M J JL A S O N D J F M A M J JL A S O N D 2007 2008 2009 2010 2011 Inventories Trade debtors Trade creditors

  28. Slide 28: Current Credit Lines in Acerinox

    CURRENT CREDIT LINES IN ACERINOX December 2011 TOTAL EXISTING LINES: 2,142 mill. € USED CREDIT LINES 51% 49% AVAILABLE CREDIT LINES 27

  29. Slide 29: Evolution of Credit Lines & Future Term Debt Amortization

    EVOLUTION OF THE CREDIT LINES & FUTURE TERM DEBT AMORTIZATION 2,750 2,500 2,250 2,000 1,750 Total credit lines 1,500 Used credit lines Avaliable credit lines 1,250 Term debt amortization 1,000 750 500 250 0 2013 2015 2017 2019 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jan-12 Dec-06 Dec-07 Dec-08 Dec-09 Dec

  30. Slide 30: Situation of Short and Long Term Debt with Financial Institutions

    SITUATION OF THE SHORT AND LONG TERM DEBT WITH FINANCIAL INSTITUTIONS December 2011 LONG TERM DEBT 80% 20% SHORT TERM DEBT (*) (*) Treasury has been deducted of the short term debt 29

  31. Slide 31: Evolution of the Net Financial Debt

    EVOLUTION OF THE NET FINANCIAL DEBT Million euros 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 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 J F M A M J JL A S O N D J F M A M J JL A S O N D 2007 2008 2009 2010 2011 Net financial debt Long term debt Short term debt 30

  32. Slide 32: Condensed Cash Flow Statement of the Consolidated Group

    CONDENSED CASH FLOW STATEMENT OF THE CONSOLIDATED GROUP December 2011 (million euros) Jan - Dec Jan - Dec 2011 2010 Result before taxes 132.6 192.5 Adjustments for: 231.6 205.5 Depreciation and amortisation 146.8 147.8 Changes in provisions and impairments 11.2 1.0 Other adjustments in the result 73

  33. Slide 33: Stock Market Evolution of Acerinox, S.A. & IBEX 35

    STOCK MARKET EVOLUTION OF ACERINOX, S.A. & IBEX 35 Daily percentage data, year 2011 15% 10% 5% 0% -5% -10% -13.1% -15% IBEX 35 ACERINOX -20% -25% -24.5% -30% -35% -40% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 32

  34. Slide 34: Stock Market Evolution of European Producers

    STOCK MARKET EVOLUTION OF EUROPEAN PRODUCERS Daily percentage data, year 2011 40% 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% -25% -24.5% -30% -35% -40% -45% -42.8% ACERINOX -50% THYSSENKRUPP -55% -60% OUTOKUMPU -63.4% -65% -63.4% APERAM -70% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 33

  35. Slide 35: Annual Return to Shareholders

    ANNUAL RETURN TO SHAREHOLDERS Euro/share 0.55 0.50 0.48 0.45 0.03 0.45 0.45 0.45 0.45 0.40 0.10 0.10 0.10 0.10 0.10 0.35 Attendance bonus AGM 0.30 0.25 Issue premium refund 0.20 0.35 0.35 0.35 0.35 0.35 0.15 Dividend 0.10 0.05 0.00 07 08 09 10 11 34

  36. Slide 36: Strategic Plan 2008-2020

    STRATEGIC PLAN 2008 – 2020 GENERATIONAL TRANSITION PLAN GROUP CULTURE MODERN STRUCTURE EXCELLENCE PLANS GLOBAL EXPANSION 35

  37. Slide 37: Stainless Steel Worldwide Production

    STAINLESS STEEL WORLDWIDE PRODUCTION Thousand Mt 32.000 30.000 28.000 26.000 24.000 22.000 20.000 18.000 Annual growing rate 16.000 14.000 Years 1950 to 2011e: +5.8% 12.000 10.000 8.000 6.000 4.000 2.000 0 50 60 70 80 90 00 11e Source: VALE INCO e ISSF 36

  38. Slide 38: Growth of Stainless Steel and Alternative Metallic Materials

    GROWTH OF STAINLESS STEEL AND ALTERNATIVE METALIC MATERIALS Compound annual growth in % /year [1980 – 2010] Average: 2.47 Lead 1.93 Copper 2.56 Zinc 2.43 Aluminium 3.09 Steel 2.32 Stainless Steel 5.57 37

  39. Slide 39: Excellence Plan

    EXCELLENCE PLAN  Reduction of manufacturing and  Flexibility and efficiency distribution costs  Continuous improvement  Reduction of energy consumption  Low inventories  Technical exchange program  Short delivery times  Benchmarking activities  Manufacturing cycle  Quality and re

  40. Slide 40: Excellence Plan I and II

    EXCELLENCE PLAN Excellence Plan I Excellence plan II 2009 - 2010 2011 - 2012  10 chapters  15 chapters  Internal benchmarking  Internal benchmarking  Realistic targets (including part of  Realistic targets Excellence I)  Recurrent savings:  Recurrent savings: 133 million €/year 90 mi

  41. Slide 41: Bahru Stainless

    Kazakhstan Mongolia . Dem. People’s. Uzbekistat 2bekistan Kyrgyzstan Rep. of Korea Tajikistan i Turkmenistan Afghanistan Pakistan yop) Bhutan Bangladesh ilippines Pacific Islands 40 BAHRU STAINLESS ~ NEGERI 1 | @SEMBILAN BAHRU STAINLESS

  42. Slide 42: Bahru Stainless Strategic Plan 2008-2020

    BAHRU STAINLESS STRATEGIC PLAN 2008 - 2020  Development of a new integrated 1 million mt/year stainless steel mill in Malaysia in phases.  Current investment for phases 1 & 2: Equipments Production (000.000 USD) (Mt/year) Phase I ZM 1 + AP 1 + Finishing lines 370 240,000 Phase II ZM 2 + AP 2 + Fin

  43. Slide 43: Bahru Stainless: General Layout

    BAHRU STAINLESS: GENERAL LAY OUT Tasa de crecimiento anual Años 1950 a 2011e: +5,8% 42

  44. Slide 44: Bahru Stainless: Aerial View Phase I

    BAHRU STAINLESS AERIAL VIEW PHASE | 43

  45. Slide 45: Bahru Stainless: Sendzimir Mill ZM-1

    BAHRU STAINLESS SENDZIMIR MILL ZM-1 44

  46. Slide 46: Annealing and Pickling Line AP-1

    ANNEALING AND PICKLING LINE AP-1 45

  47. Slide 47: Bahru Stainless

    BAHRU STAINLESS om oW < uu c -E = a) uu ” i“) uu Oo O a oO = O oO - ”n en LL 46

  48. Slide 48: Bahru Stainless

    BAHRU STAINLESS a z <x WW 7) < x a = mr S 4 < ~ uu <x 47

  49. Slide 49: Bahru Stainless

    BAHRU STAINLESS 48

  50. Slide 50: Commercial Network of Acerinox

    COMMERCIAL NETWORK OF ACERINOX Service Centers 22 Warehouses 32 Offices 20 49

  51. Slide 51: Worldwide Presence of Acerinox

    WORLDWIDE PRESENCE OF ACERINOX Sales 2011 Employees EUROPE 37.8% 51.53% AMERICAS 46.6% 19.26% AFRICA 6.3% 23.37% ASIA 8.8% 5.80% OCEANIA 0.5% 0.04% TOTAL 100% 100% 50

  52. Slide 52: Production Capacity of Acerinox

    PRODUCTION CAPACITY OF ACERINOX WORLDWIDE CONSUMPTION 2010 Melting shop 1.1 Melting shop 1.4 Hot rolling 0.9 Hot rolling 1.2 Cold rolling 0.7 Cold rolling 0.8 Long products 0.2 Long products 0.2 Melting shop 1.0 Melting shop 1.0 Hot rolling 1.0 Hot rolling 1.0 Cold rolling 0.6 Cold rolling 0.5 Sourc

  53. Slide 53: Acerinox Europa, NAS, Bahru Stainless, Columbus, Roldan, Inoxfil

    ACERINOX EUROPA · NAS · BAHRU STAINLESS · COLUMBUS STAINLESS · ROLDAN · INOXFIL 52

  54. Slide 54: Thank you very much.

    Thank you very much.

Acerinox — FY2011 Earnings Presentation on 6ix