Mechel · RUS:MTLR
Mechel — Q1 2005 Earnings Presentation
14 slides from Mechel's earnings presentation, Aug 18, 2005
Slide 1: 2005 First Quarter Results Presentation
2005 First Quarter Results Presentation August 18, 2005
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: Introduction and Overview
“ MECHEL a Introduction and Overview
Slide 4: Mechel at a glance
Mechel at a glance Low-cost vertically Strong mining business: integrated producer, 2nd largest coking coal virtually self-sufficient producer and largest in raw materials exporter NYSE-listed, Strategy to increase best corporate segment value and governance practices overall efficiency Able to incr
Slide 5: 1Q2005 Highlights
1Q2005 Highlights Net income increased 219.6% to $169.5 million as revenues increased 60.1% to $1.05 billion Consolidated EBITDA margin of 26.6% Acquisition of 25% +1 share stake in Yakutugol — Significant development opportunity for the mining segment, with access to a new region with substan
Slide 6: 1Q2005: Mining Segment Accomplishments
1Q2005: Mining Segment Accomplishments Operating income of $184.2 million on revenues of $313.6 million — Operating income growth of 715.2% — Revenue growth of 123.0% EBITDA margin of 59.3%. Mining segment EBITDA represented 66.5% of total consolidated EBITDA Acquisition of a stake in Yakutugo
Slide 7: 1Q2005: Steel Segment Accomplishments
1Q2005: Steel Segment Accomplishments Revenues increased 43% to $735.7 million Steel segment EBITDA constituted 33.5% of consolidated EBITDA Efficiency and cost-saving programs underway Increasing share of flat products Product 1Q2005, thousand tonnes 1Q2005 vs. 1Q2004, % Coke 718 -1.2 Pig i
Slide 8: 2005 Strategy and Outlook
2005 Strategy and Outlook Management to focus on profitability of operations 1st quarter was a very successful period with strong operational and financial performance, however we saw increasingly difficult market conditions later on during 2005 and towards the end of the year Cost control and e
Slide 9: Financial Review
“ MECHEL Financial Review
Slide 10: Strong financial performance
Strong financial performance Revenues EBITDA* 4 000 3 636 1 000 908 30% 3 000 750 (US$m) (US$m) 2 050 2 000 500 341 20% 1 314 280 1 020 1 049 207 1 000 250 106 0 10% 0 2001 2002 2003 2004 1Q05 2001 2002 2003 2004 1Q05 EBITDA EBITDA margin (rhs) Net profit * Total assets 3 678 3 922 90% 4 000 600 543
Slide 11: Segment operations yield solid results
Segment operations yield solid results Mining segment Steel segment 1 400 80% 3 000 35% 1 200 70% 30% 2 500 60% 25% 1 000 2 000 50% (US$m) (US$m) 800 20% 40% 1 500 600 15% 30% 1 000 400 10% 20% 500 5% 200 10% - 0% - 0% 2001 2002 2003 2004 1Q05 2001 2002 2003 2004 1Q05 Intersegment revenues Intersegm
Slide 12: Maintain focus on cost control
Maintain focus on cost control Tight control over our cost base remains strategic priority Continued integration between subsidiaries expected to reduce costs Decreasing SG&A expenses as % of sales – 16.9% in 1Q2005 Own generation of electrical energy through cogeneration facilities Own logi
Slide 13: Targeted capital expenditure program
Targeted capital expenditure program Capex program in 2005 is directed at reducing bottlenecks and improving efficiency $1.25 billion from 2005 through 2009* — 1Q2005 capex of $133,5 million Focus on cost saving measures rather than on increasing output Expected capex program, 2005-2009 600 50
Slide 14: Mechel at a glance
Mechel at a glance Low-cost vertically Strong mining business: integrated producer, 2nd largest coking coal virtually self-sufficient producer and largest in raw materials exporter NYSE-listed, Strategy to increase best corporate segment value and governance practices overall efficiency Able to incr