Severstal · RUS:CHMF
Severstal — Q3 2015 Earnings Presentation
22 slides from Severstal's earnings presentation, Oct 22, 2015
Slide 1: Q3 & 9M 2015 Financial Results Presentation
Q3 & 9M 2015 Financial Results Presentation 22 October 2015
Slide 2: Table of Contents
3 Q3 & 9M 2015 Results Overview 7 Divisional Performance and Market Outlook Table of Contents 11 Financial Position 16 Appendices
Slide 3: Q3 & 9M 2015 Results Overview
Q3 & 9M 2015 Severstal Results Overview Achieve more together fF % sO
Slide 4: Summary
Summary Q3 2015 Highlights: Group EBITDA margin remains amongst the highest in the industry at 31.5% in Q3 15 (Q2 15: 32.6%). Group EBITDA* decreased 10.9% q/q to $524m (Q2 15: $588m) In spite of further RUB devaluation driving down USD-denominated average selling prices for both steel and steel
Slide 5: Revenue Dynamics and Breakdown
Revenue Dynamics and Breakdown Q3 2015 Revenue: $1,663m 9M 2015 Revenue: $5,000m (Q2 2015: $1,806m; -7.9%) (9M 2014: $6,418m; -22.1%) Group revenue decreased q/q due to average Group revenue decreased y/y as the impact of selling prices decline in USD terms on the back of lower realized prices was p
Slide 6: EBITDA Dynamics and Breakdown
EBITDA Dynamics and Breakdown Q3 2015 EBITDA: $524m 9M 2015 EBITDA: $1,695m (Q2 2015: $588m; -10.9%) (9M 2014: $1,610m*; +5.3%) Group EBITDA decreased q/q as negative Group EBITDA increased y/y driven by impact of lower average selling prices in USD Russian Steel’s operational enhancements, terms wa
Slide 7: Divisional Performance and Market Outlook
Divisional Performance and Market Outlook
Slide 8: Severstal Russian Steel (RSD)
Severstal Russian Steel (RSD) Steel product sales increased 13% q/q to 3.01mnt driven by improved domestic steel consumption and EBITDA per tonne and average selling price despite less pronounced seasonality in 2015 than in previous years EBITDA per tonne (US$/t) Average Selling Price (US$/t)* T
Slide 9: Cost Control at Severstal Russian Steel
Cost Control at Severstal Russian Steel Cherepovets Steel Mill production cash cost of slab, $/t $600 559 537 $500 484 472 457 457 432 418 401 409 $400 377 Cherepovets 370 350 361 cash cost of 327 slab at market $300 259 255 price of raw Q3 15 non-integrated 214 206 materials $200 cash cost of slab
Slide 10: Severstal Resources
Severstal Resources Average coking coal concentrate selling prices decreased 30% q/q, which was a function of the weaker RUB q/q as well as a downwards revision of coking coal contract prices starting Average selling price and cash cost per tonne Cost per tonne (US$/t) Average Selling Price (US$/t
Slide 11: Financial Position
Severstal Financial Position Achieve more together EF“ eee
Slide 12: Cash Flow and Net Working Capital
Cash Flow and Net Working Capital Q3 and 9M 2015 Highlights: Solid liquidity position of $1,675m in cash and cash equivalents Cash Flow dynamics, 31 Dec 2014 to 30 Sep 2015 Strong operating cash flow of $686m* in Q3 15 1,446 Q3 15 capex of $103m, 7.2% lower q/q (Q2 15: $111m) reflecting pruden
Slide 13: Robust Liquidity and Sustainable Leverage
Robust Liquidity and Sustainable Leverage Strong liquidity position: The Company exercised a put option on Convertible Bonds in September 2015. $390m of outstanding bonds were submitted by bondholders. The outstanding principle now is $61.8m 683 Severstal gross debt decreased 13.9% since the end
Slide 14: Debt Structure
Debt Structure As at 30.09.2015 the debt structure was dominated by public debt (90% of total) and the US dollar (89.5% of total). Debt Maturity Schedule*, $m 689 704 575 497 0 2 2015 2016 2017 2018 2019 2020+ Notes: Debt represents the principal amount of debt. Debt for 2015 represents amount of de
Slide 15: Market Outlook
Market Outlook Global: Global steel capacity utilisation stays at subdued levels of 68% comparing vs. 78% a year ago. Chinese steel demand weakening by 5.5% YTD coincided with elevated steel products exports from China (up 27% YTD) as well as decision by the People’s Bank of China to devaluate R
Slide 16: Appendices
Severstal Achieve more together
Slide 17: Summary Income Statement
Summary Income Statement $ million, unless otherwise stated Q3 2015 Q2 2015 9M 2015 9M 2014*** Revenue 1,663 1,806 5,000 6,418 COGS (1,023) (1,060) (2,902) (4,302) EBITDA 524 588 1,695 1,610 EBITDA margin, % 31.5% 32.6% 33.9% 25.1% Profit from operations 422 483 1,400 1,150 Operating margin, % 25.4%
Slide 18: Q3 2015 Revenue Breakdown by Region
Q3 2015 Revenue Breakdown by Region Severstal Group Q3 2015 revenue Severstal Russian Steel Q3 2015 revenue breakdown by region breakdown by region Americas Asia Asia 2% 2% Americas 2% Other Middle East 2% Other Middle East 5% 5% 4% 6% Europe Europe 17% 16% Russia Russia 69% 70% Severstal Resources
Slide 19: Q3 & 9M 2015 Division Results
Q3 & 9M 2015 Division Results Severstal Resources Q3 2015 Q2 2015 Change, % 9M 2015 9M 2014* Change, % Revenue ($m) 296 356 (16.9%) 941 1,493 (37.0%) Cost of sales ($m) (205) (213) (3.8%) (573) (991) (42.2%) G&A expenses ($m) (12) (19) (36.8%) (46) (97) (52.6%) Distribution expenses ($m) (31) (36) (
Slide 20: Summary Balance Sheet
Summary Balance Sheet $ million As at 30 September 2015 As at 31 December 2014* Cash and Cash Equivalents 1,675 1,897 Total Assets: 6,433 7,553 Current Assets 3,105 3,612 Non-current Assets 3,328 3,941 Total Liabilities: 3,789 4,725 Current Liabilities 1,422 1,734 Non-current Liabilities 2,367 2,991
Slide 21: Summary Cash Flow Statement
Summary Cash Flow Statement $ million Q3 2015 Q2 2015 9M 2015 9M 2014* Profit before Financing and Taxation 408 472 1,361 920 Cash Generated from Operations 729 569 1,621 1,619 Interest Paid (33) (51) (126) (190) Income Tax Paid (11) (17) (32) (45) Net cash from Operating Activities - continuing ope
Slide 22: Disclaimer
Disclaimer These materials are confidential and have been prepared by PAO Severstal (Severstal) solely for your information and may not be reproduced, retransmitted or further distributed to any other person or published, in whole or in part, for any other purpose. These materials may contain projec