Nyrstar Nv · EURONEXT:NYR
Nyrstar Nv — FY2013 Earnings Presentation
40 slides from Nyrstar Nv's earnings presentation, Feb 6, 2014
Slide 1: Full Year Results 2013
Full Year Results 2013 6 FEBRUARY 2014 Full Year Results 2013
Slide 2: Introduction & highlights
Full Year Results 2013 > Introduction & highlights Market review Group financial results Mining segment Metals Processing segment Safety, health & environment Outlook Roland Junck Chief Executive Officer 2
Slide 3: FY 2013 Overview - structural progress despite operational challenges in mining
Full Year Results 2013 FY 2013 Overview - structural progress despite operational challenges in mining Group underlying1 EBITDA of EUR 185 million down 16% - Significant improvement in 2013 Metals Processing result to EUR 149 million, up 10%, as a result of higher realised premiums, recognition of E
Slide 4: FY 2013 Overview (cont.)
Full Year Results 2013 FY 2013 Overview (cont.) Solid financial position; significant committed undrawn liquidity headroom - Net debt EUR 670 million, down 11% (EUR 756 million at the end of H1 2013) - Capex of EUR 200 million, down 19% and at the low end of full year guidance - Successfully extende
Slide 5: Market review
Full Year Results 2013 Introduction & highlights > Market review Group financial results Mining segment Metals Processing segment Safety, health & environment Outlook Bob Katsiouleris Senior Vice President, Marketing, Sourcing and Sales 5
Slide 6: Zinc fundamentals are becoming attractive; supply seems less assured
Full Year Results 2013 Zinc fundamentals are becoming attractive; supply seems less assured with growing evidence of increased demand EU27 Construction Confidence Indicator Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Europe: construction outlook starts to rebound -25 - Demand rebounded in H2; premiums rose t
Slide 7: Prices remained depressed for the majority of 2013; strong end to the year
Full Year Results 2013 Prices remained depressed for the majority of 2013; strong end to the year LME Zinc Price Average USD 2,323 USD 2,063 USD 1,977 USD 1,916 USD 1,937 USD 1,883 price/tonne EUR 1,659 EUR 1,463 EUR 1,524 EUR 1,504 EUR 1,475 EUR 1,402 2,600 2,400 2,200 2,000 1,800 1,600 1,400 1,200
Slide 8: Silver and gold prices fell significantly in 2013
Full Year Results 2013 Silver and gold prices fell significantly in 2013 LBMA Silver Price (USD per troy ounce) Average price/oz USD 34.84 USD 35.39 USD 31.06 USD 31.24 USD 26.63 USD 21.07 USD 31.15 USD 23.79 LBMA Gold Price (USD per troy ounce) USD 1,445 USD 1,694 USD 1,651 USD 1,687 USD 1,523 USD
Slide 9: Volatile prices, strengthening premiums, increased zinc TCs and new European zinc metal agreement
Full Year Results 2013 Volatile prices, strengthening premiums, increased zinc TCs and new European zinc metal agreement Partially offset impact of challenging metal price environment ‒ Zinc price volatility, trading within a range of USD/t 2,188 and USD/t 1,784, allowed for successful strategic hed
Slide 10: Group financial results
Full Year Results 2013 Introduction & highlights Market review > Group financial results Mining segment Metals Processing segment Safety, health & environment Outlook Heinz Eigner Chief Financial Officer 10
Slide 11: Group underlying EBITDA impacted by lower metal prices and operational issues in H1
Full Year Results 2013 Group underlying EBITDA impacted by lower metal prices and operational issues in H1; improved H2 EBITDA performance ‒ Group underlying EBITDA of EUR 185m, down 16% ‒ Metals Processing EUR 149m, up 10% on 2012 due to higher realised premiums, recognition of EUR 45m termination
Slide 12: Talvivaara status update
Full Year Results 2013 Talvivaara status update Contained Zinc deliveries (kt) ‒ 2013 was the lowest delivery volume since commencement of agreement ‒ Contribution to full year EBITDA and cash-flow of EUR 7m in 2013 ‒ Nyrstar’s contractual rights under the streaming agreement remain in force and it
Slide 13: Delivered EUR 43m of sustainable cost reductions through Project Lean
Full Year Results 2013 Delivered EUR 43m of sustainable cost reductions through Project Lean… Reduced operating costs in 2013 EUR43m Actions undertaken in 2013 Mining: employee and contractor headcount reductions (total to date >1,500), via rationalisation and insourcing of mining contractors and sh
Slide 14: Achieved targeted reductions in Capex
Full Year Results 2013 … and achieved targeted reductions in Capex – bottom end of full year guidance ‒ EUR 97m for mining, down substantially by 25%: ‒ EUR 52m for sustaining and EUR 42m for exploration & development ‒ EUR 3m for growth projects, including doré plant construction at El Toqui ‒ EUR
Slide 15: Significant improvement in net working capital
Full Year Results 2013 Significant improvement in net working capital, driven by substantial reduction in Metals Processing inventory levels Metals Processing inventory (USDm) EURm H1 2013 H2 2013 FY 2013 798 Underlying EBITDA 87 98 185 Cash from operating 95 204 299 activities Cash from investing (
Slide 16: Solid financial position; successfully refinanced EUR 120m bond
Full Year Results 2013 Solid financial position; successfully refinanced EUR 120m bond Net Debt (EURm) Net Debt / EBITDA Debt maturity profile − Conservatively structured debt financing Type Due Financial Covenants well suited for cyclical business EUR 120m Convertible 2014 None Bonds* − Committed u
Slide 17: Mining segment
Full Year Results 2013 Introduction & highlights Market review Group financial results Mining segment Metals Processing segment Safety, health & environment Outlook Graham Buttenshaw Senior Vice President, Mining 17
Slide 18: Decline in underlying EBITDA; gross profit impacted by operational events
Full Year Results 2013 Decline in underlying EBITDA; gross profit impacted by operational events, lower precious metal prices & higher TCs EURm 2012 2013 Variation Underlying gross profit2 decreased 13% Gross Profit 509 445 (13)% 509 Underlying 380 367 (3)% 445 Operating Costs EBITDA1 129 78 (40)% L
Slide 19: Production volumes lower given planned and unplanned operational events
Full Year Results 2013 Production volumes lower given planned and unplanned operational events Zinc in concentrate production (kt)1 Other Metal in Concentrate Production2 Talvivaara deliveries 2011 2012 2013 Nyrstar mine production 16.2 14.2 13.0 12.9 ‒ Full year guidance achieved for all metals oth
Slide 20: Average DOC impacted by two month suspension at Campo Morado
Full Year Results 2013 Average DOC impacted by two month suspension of operations at Campo Morado in H1 2013 Average direct operating cost (EUR / tonne of ore milled) ‒ Positive trend in Mining segment DOC/t ‒ Operating cost/t impacted by incurring fixed costs with no production during Campo Morado
Slide 21: Mining segment review progressing on schedule
Full Year Results 2013 Mining segment review progressing on schedule Step 1: Mining Turnaround Program Step 2: Mining Strategic Review 2013 Status: Completed reviews and detailed Status: Commencing in H2 2014 plans of three of seven mines; fourth currently in progress; remainder to be addressed in 2
Slide 22: Metals Processing segment
Full Year Results 2013 Introduction & highlights Market review Group financial results Mining segment > Metals Processing segment Safety, health & environment Outlook Michel Morley Senior Vice President, Metals Processing and Chief Development Officer 22
Slide 23: Higher premiums, EUR 45m termination fee and strong H2 driving 10% EBITDA increase
Full Year Results 2013 Higher premiums, EUR 45m termination fee and strong operational performance in H2 2013 driving 10% EBITDA increase EURm 2012 2013 Variation Underlying gross profit decreased 5% Gross Profit 852 813 (5)% 852 813 Underlying 717 664 (7)% Lower due to Operating Costs decreasing ac
Slide 24: Zinc metal production in-line with guidance
Full Year Results 2013 Zinc metal production in-line with guidance and 2012 production despite planned maintenance shuts Metals Processing segment production (kt) FY2013 ‒ Zinc metal production of 1,088 kt delivered at top end of full year guidance ‒ Half year record for Metals Processing zinc produ
Slide 25: Substantial and continued unit costs improvements
Full Year Results 2013 Substantial and continued unit costs improvements Average Metals Processing cost (EUR/tonne)1 By site (EUR/t) H1 2013 H2 2013 − Cost improvements in H1 2013 driven by recognition of EUR 45m termination fee (included in Other expenses and income) − H2 2013 cost performance driv
Slide 26: Update on Port Pirie Redevelopment and Metals Processing Transformation
Full Year Results 2013 Update on Port Pirie Redevelopment and Metals Processing Transformation projects Port Pirie Redevelopment ‒ Completion of pre-feasibility study in 2013. Q1 2016 commissioning is viable ‒ Discussions with stakeholders for the funding and support package progressing well ‒ Inves
Slide 27: Safety, health & environment
Full Year Results 2013 Introduction & highlights Market review Group financial results Mining segment Metals Processing segment > Safety, health & environment Outlook Russell Murphy Chief Human Resources, Safety and Environment Officer 27
Slide 28: Safety, Health and Environment
Full Year Results 2013 Safety, Health and Environment Recordable Environmental Lost Time Injury Rate (LTIR)1 Recordable Injury Rate (RIR)1 Incidents World World class2 class2 Safety ‒ Tragically, despite a strong focus on safety, two employees were fatally injured in March and September 2013 at Camp
Slide 29: Outlook
Full Year Results 2013 Introduction & highlights Market review Group financial results Mining segment Metals Processing segment Safety, health & environment > Outlook Roland Junck Chief Executive Officer 29
Slide 30: Outlook for 2014
Full Year Results 2013 Outlook for 2014 2014 is an important year for Nyrstar: ‒ Provide visible leadership to safety and environmental performance ‒ Deliver planned increases in mining production ‒ Continue to actively work with other stakeholders on Talvivaara ‒ Drive cost and capital discipline a
Slide 31: Questions
Full Year Results 2013 Questions 31
Slide 32: Appendix
Full Year Results 2013 Appendix 32
Slide 33: Group gross profit
Full Year Results 2013 Group gross profit 2012 2013 EUR 1,356m 1 EUR 1,251m 1 Treatment Charges By-Products By-Products Treatment EUR 238m EUR 447m EUR 388m Charge EUR 261m Premiums Premiums EUR 115m Payable and EUR 127m Payable and Free Metal Free Metal EUR 645m EUR 581m − Gross profit decreased 8%
Slide 34: Mining gross profit by metal
Full Year Results 2013 Mining gross profit by metal 2012 2013 EUR 509m 1 EUR 445m 1 Gold Gold EUR 63m EUR 84m Silver1 EUR 52m Silver1 EUR 72m Copper EUR 58m Copper Zinc Zinc EUR 58m EUR 272m EUR 259m Lead Lead EUR 13m EUR 22m − Gross profit declined 13% in 2013 due to lower production and fall in si
Slide 35: Metals Processing gross profit by metal
Full Year Results 2013 Metals Processing gross profit by metal 2012 2013 EUR 852m 1 EUR 813m 1 Gold Gold EUR 8m Other3 Silver bearing material2 Other3 EUR10m EUR 59m EUR 26m EUR34m Silver EUR Silver EUR 39m 15m Copper EUR 17m Copper EUR 19m Leach product Leach product EUR 46m EUR 40m Sulphuric Acid
Slide 36: Operating expenses
Full Year Results 2013 Operating expenses Underlying operating costs down 6% in 2013 Employee Expenses ‒ 5% decrease with improvements made through Project Lean and organisational restructuring Energy Expenses ‒ Remained flat year on year; Australian smelting energy costs were assisted by a deprecia
Slide 37: Direct operating costs USD per tonne milled
Full Year Results 2013 Direct operating costs USD per tonne of ore milled 2011 2012 2013 USD/tonne milled 133 137 116 115 100 104 87 83 83 81 73 67 65 68 67 59 50 42 38 - - - - - Campo Contonga El Mochito El Toqui Langlois Myra Falls Tennessee Average Morado Mines − Campo Morado impacted by two mont
Slide 38: EBITDA and EPS reconciliation
Full Year Results 2013 EBITDA and EPS reconciliation EURm 2012 2013 EBITDA 218 155 Add back Underlying adjustments: Restructuring expenses 17 19 M&A related transaction expenses 3 2 Net loss / (gain) on disposal of subsidiaries (27) - Net loss / (gain) on Hobart Smelter embedded derivatives 9 9 Unde
Slide 39: EBITDA Sensitivities
Full Year Results 2013 EBITDA Sensitivities Estimated Estimated annual Parameter Variable annualised EBITDA EBITDA impact impact (EURm) (EURm) FY 2013 FY 2012 Zinc price +/- USD100/t +28 / -28 +35 / -34 Lead price +/- USD100/t +2 / -2 +2 / -2 Copper price +/- USD500/t +6 / -6 +6 / -6 Silver Price +/
Slide 40: Important Notice
Full Year Results 2013 Important Notice ‒ This presentation has been prepared by the management of Nyrstar NV (the "Company"). It does not constitute or form part of, and should not be construed as, an offer, solicitation or invitation to subscribe for, underwrite or otherwise acquire, any securitie