Mechel · RUS:MTLR
Mechel — Q1 2008 Earnings Presentation
11 slides from Mechel's earnings presentation, Jul 14, 2008
Slide 1: 2008 First Quarter Results Presentation
2008 First Quarter Results Presentation July 14, 2008
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: Financial Review
Financial Review 3
Slide 4: Sales Overview
Sales Overview Consolidated revenue Mechel benefited from higher 2,500 443 2,328 sales prices across both mining 2,000 437 29 and steel segments 1,419 (US$mn) 1,500 Acquisitions completed last year 1,000 in the mining and power segments 500 contributed $443 mn or 49% to 0 consolidated revenue gr
Slide 5: Steel Sales: Structure and Prices
Steel Sales: Structure and Prices Sales structure* 29% growth in revenue from 100% 17% 14% external customers 80% 5% 8% 13% 14% Growth of higher margin products 60% 8% 11% 9% 11% share in sales - meaningful 40% 6% 4% contribution from investments 20% 23% 25% 5% 5% Gross margin increased to 28%
Slide 6: Mining Sales: Structure and Prices
Mining Sales: Structure and Prices Sales structure* 100% Gross Margin increased to 58% 3% 7% 13% 29% 80% Coking coal sales exceed 50% of 11% 11% 60% 18% the revenue from 3rd parties 24% 40% Expansion into the fast growing 51% 20% markets of Asia and Pacific 33% 0% 1Q07 1Q08 Coking coal Steam c
Slide 7: Cost Structure
Cost Structure Growing benefits of vertical integration into power and raw materials Tight control over production costs helps to curb inflationary pressure Visible effect of cost-cutting at newly acquired assets COS structure 100% 4% 2% 2% 3% 6% 3% 2% 8% 9% 17% 15% 80% 15% 11% 10% 60% 18% 93%
Slide 8: Segment Operations
Segment Operations Record operating results across all segments EBITDA/tonne of steel – increase to $210.8 Steel segment operating income increased by 51% to $198 mn Strong coal and iron ore prices pushed operating profit in the mining segment up 2.4x to $416 mn EBITDA margin in mining seg
Slide 9: Financial Performance Analysis
Financial Performance Analysis Best operational results in Mechel’s Revenue – Gross margin 6,684 history 7,000 50% 6,000 Net Income for 1Q08 exceeds the 5,000 4,398 40% 3,805 (US$mn) result for 1H07 4,000 3,000 2,328 ROE over 44% 2,000 30% Positive market trends ensure further 1,000 0 20% gr
Slide 10: Solid Financial Position
Solid Financial Position Operating cash flow Stable operating cash flow 1,000 20% 16.3% 15.8% sufficient to finance investment 800 13.5% 15% 12.6% program (US$mn) 600 8.1% 10% 905 Strong balance sheet provides 400 5.9% 621 555 5% 200 flexibility to finance additional 296 368 120 growth 0 2003 20
Slide 11: First Quarter 2008 Results Overview
First Quarter 2008 Results Overview US$ million unless 1Q08 1Q07 Change, % otherwise stated Revenue 2,328 1,419 64% Cost of sales (1,245) (873) 43% Operating income 642 302 113% EBITDA 853 340 151% EBITDA margin 36.6% 24.0% Net Income 500 191 162% Net Income margin 21.5% 13.4% EPS (USD per share) 1.