Mechel · RUS:MTLR
Mechel — Q1 2011 Earnings Presentation
16 slides from Mechel's earnings presentation, Jun 29, 2011
Slide 1: First Quarter 2011 Results Presentation
FIRST QUARTER 2011 RESULTS PRESENTATION JUNE 29, 2011
Slide 2: Disclaimer
DISCLAIMER This presentation does not constitute or form part of and should not be construed as, This presentation may contain projections or other forward-looking statements an offer to sell or issue or the solicitation of an offer to buy or acquire securities of regarding future events or the futu
Slide 3: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 4: Segments Overview
SEGMENTS OVERVIEW EBITDA(1) BY SEGMENTS Steel and power demonstrate highest revenue and EBITDA dynamics $ Mln Mining EBITDA down 13% due to a temporary halt of the washing plant at Yakutugol resulting in lower exports Consolidated EBITDA above 19% of the revenue. Compared to 1Q2010 Steel increases i
Slide 5: Mining Segment Performance
MINING SEGMENT PERFORMANCE REVENUE, EBITDA(1) Results of the segment affected by the temporary halt of the washing plant at Yakutugol due to accident. $ Mln Revenues Intersegment revenues Adj. EBITDA margin (rhs) 3rd party CC sales volumes: • Yakutugol – down 49% 1,200 207 211 260 60% • Southern Kuz
Slide 6: Mining Segment Performance
MINING SEGMENT PERFORMANCE EXTERNAL SALES STRUCTURE Positive price dynamics across all products. 9% 7% 8% 7% 11% 7% 10% 3rd party iron ore sales increased by 11% as exports to China 14% 10% 10% 12% grew. 12% 14% 36% 12% 10% 10% 12% Share of Asian sales incl. China dropped from 32% to 25% 8% q-o-q du
Slide 7: Steel Segment Performance
STEEL SEGMENT PERFORMANCE REVENUE, EBITDA(1) Positive price and volumes dynamics pushed revenue from 3rd parties 12% up to $1.8 bn compared with Q4 2010. $ Mln 2 000 89 12% EBITDA grew 13% to $150 mn despite growing cash costs 61 78 1 500 57 9% 52 8% 8% 8% 8% Cash costs affected by growing input pri
Slide 8: Steel Segment Performance
STEEL SEGMENT PERFORMANCE EXTERNAL SALES STRUCTURE Improved pricing environment across most of our steel products q-o-q 6% 8% 5% 18% 16% 5% 7% 6% 4% Sales volumes up as MSG grows distribution and the investment 9% 5% 6% 3% 9% program shows result: 3% 5% 6% 10% 11% 5% 5% • Engineering steel – up 32%
Slide 9: Ferroalloys Segment Performance
FERROALLOYS SEGMENT PERFORMANCE REVENUE, EBITDA(1) Revenue from 3rd parties flat q-o-q at $124 mn $ Mln 200 23% 25% Cash costs affected by rising electricity prices and ruble 20% 52 20% appreciation 150 49 53 18% 48 15% 100 25 Ni cash costs affected by growing coke prices 8% 10% 133 125 124 50 8% 5%
Slide 10: Ferroalloys Segment Performance
FERROALLOYS SEGMENT PERFORMANCE EXTERNAL SALES STRUCTURE Cr 3rd party sales up 21% as mining at Voskhod ramped up 21% 14% 17% 26% FeSi 3rd party sales volumes up 17% 20% 18% 20% 24% Ni 3rd party sales volumes down 29% as certain volumes were 52% 55% 62% 51% carried over to the Q2. FY09 FY10 4Q10 1Q1
Slide 11: Power Segment Performance
POWER SEGMENT PERFORMANCE REVENUE, EBITDA(1) Electricity market liberalization drove revenue up 21% q-o-q $ Mln EBITDA (1) grew 65% q-o-q to $35 400 10% 7% 7% 8% 300 143 EBITDA margin reached 10% of the revenue. 112 5% 105 200 97 95 4% Net income up 2.5x to $20 mn 2% 100 185 186 225 135 148 Best res
Slide 12: Stable Financial Performance
STABLE FINANCIAL PERFORMANCE Sensible improvement in 2010 financial performance y-o-y: Diversification led to stable financial results 6% growth in Revenue to $2.9 bn EBITDA(1) decreased by 7% to $567 mn Consolidated Net Income up 1.6x to $309 mn REVENUE DYNAMICS REVENUE, EBITDA(1) AND NET PROFIT $
Slide 13: Cash Generation Capacity
CASH GENERATION CAPACITY $700 mn invested in working capital in Q1 due to seasonal restocking, expansion of MSG in Europe Reduction of exports in the Mining segment weighed on the cashflow from operations $331 mn invested in PP&A in Q1 OPERATING CASH FLOW NET CASH FLOW $ Mln $ Mln 200 6% 2009 2010 1
Slide 14: Debt Profile
DEBT PROFILE FINANCIAL RATIOS $520 mn long-term debt raised in Q1 to fund capex and operations $ Mln 620 609 10 8,8 567 600 532 8 RUR 25 bn raised in 2011 to date to refinance short-term 6 400 4,9 5,1 debt. 254 4,4 4,2 3,3 4 200 4,0 3,5 3,4 2 Unutilized committed credit lines plus cash in hand amoun
Slide 15: Financial Results Overview
FINANCIAL RESULTS OVERVIEW US$ MILLION UNLESS OTHERWISE STATED 1Q11 4Q10 CHANGE, % Revenue 2,934 2,770 5% Cost of sales (1,913) (1,767) 8% Gross margin 34.8% 36.2% Operating profit 448 496 - 9% Operating margin 15.3% 17.9% Adjusted EBITDA(1) 567 609 - 6% Adjusted EBITDA(1) margin 19.3% 22.0% Net Inc
Slide 16: First Quarter 2011 Results Presentation
FIRST QUARTER 2011 RESULTS PRESENTATION JUNE 29, 2011