Nlmk · RUS:NLMK
Nlmk — FY2016 Earnings Presentation
20 slides from Nlmk's earnings presentation, Mar 6, 2017
Slide 1: 12M 2016 and Q4 2016 IFRS Results
12M 2016 AND Q4 2016 IFRS RESULTS 6 MARCH 2017
Slide 2: Disclaimer
DISCLAIMER This document is confidential and has been prepared by NLMK (the “Company”) solely for use at the presentation of the Company and may not be reproduced, retransmitted or further distributed to any other person or published, in whole or in part, for any other purpose. This document does no
Slide 3: Contents
CONTENTS Key highlights Segmental information Annex 3
Slide 4: Strategy execution translates into superior results
STRATEGY EXECUTION TRANSLATES INTO SUPERIOR RESULTS • Record operating results NLMK sales o Crude steel output 16.6 m t (+4% yoy) 17 MT 15,8 15,9 o Sales 15.9 mt (+1% yoy) driven by increase in sales at 16 15,1 “home” markets 15 14,8 14 • Operational efficiency drives profitability 13 improvement 12
Slide 5: Improved profitability across the businesses
IMPROVED PROFITABILITY ACROSS THE BUSINESSES • 2016 EBITDA $1,941 m, flat yoy, margin +1 p.p. EBITDA 2016 by divisions $M • Russian Flat Products 1 948 1 941 o (-) Narrowed flat steel to raw material price spreads 1 583 yoy, mostly due to week 1Q16 steel prices 1 342 o (+) Higher sales to Russian ma
Slide 6: Free cash flow growth
FREE CASH FLOW GROWTH • Net operating cash flow increased by 3% yoy 2016 cash flow bridge, $m • Stable working capital EBITDA 1 941 o Growth in accounts payables offsets inventory building driven by increased prices Net working capital change +34 • 2016 Capex below guidance: $559 m, -6% yoy o Paymen
Slide 7: Continuing debt portfolio optimization
CONTINUING DEBT PORTFOLIO OPTIMIZATION • Net Debt / 12M EBITDA: 0.36x Robust liquidity position and minimal ST debt* o Net Debt: $0.69 bn (-37% yoy) $M o Total Debt: $2.27 bn (-15% yoy) Available • Active debt management: debt maturity extended 1 223 credit lines o USD 700m Eurobonds issue and USD 5
Slide 8: Contents
CONTENTS Key highlights Segmental information Annex 8
Slide 9: Russian Flat Products
RUSSIAN FLAT PRODUCTS • Sales to 3rd parties down by 6% yoy Sales and revenue from 3rd parties o (-) Decrease of pig iron sales by 44% yoy -6% -10% Other operations* o (+) Increase of finished steel sales by 3% yoy 9,160 m t 8.638 m t $4,732 m $4,271 m Transformer Dynamo • External revenue down by 1
Slide 10: Russian Long Products
RUSSIAN LONG PRODUCTS • Sales to 3rd parties up by 18% yoy Sales and revenue from 3rd parties o (+) Higher exports - 39% of sales (up from 14% in 2015) +18% +19% 2,375 k t 2,807 k t $858 m $1,020 m • External revenue up by 19% yoy 12% 22% 18% Scrap and other* 11% 14% o (+) Increase in sales volumes
Slide 11: Mining
MINING • Sales volumes up by 2% yoy Lower 3rd party sales on the back of pelletizer launch o (+) Sales to Novolipetsk grew by 6% yoy to 13.1 m t, +2% +1% including pellets sales of 0.2 mt 17,014 k t 17,273 k t $589 m $597 m 8% 7% 24% Other • Revenue up by 1% yoy 27% 28% 25% operations* o (+) Increas
Slide 12: NLMK USA
NLMK USA • Sales volume up by 5% yoy Sales and revenue from 3rd parties o (+) Successful competition with imports +5% +6% o (+) Stronger demand from automotive & machine-building 1,764 k t 1,856 k t $1,098 m $1,162 m 19% 19% 22% 23% Other operations* • Revenue grew by 6% yoy 28% Galvanized 29% o (+)
Slide 13: NLMK DanSteel
NLMK DANSTEEL • Sales volume up by 11% yoy Sales and revenue from 3rd parties o (+) Stronger demand from N. European shipbuilders, +11% -15% offshore platform producers, etc. 789 $/t 500 481 k t 674 $/t 435 k t • Revenue down by 5% yoy 400 o (+) Higher sales volume 300 o (-) Negative price dynamics
Slide 14: Contents
CONTENTS Key highlights Segmental information Annex 14
Slide 15: 2016 Operational Results
2016 OPERATIONAL RESULTS Higher share of high value-added products Mt 15,83 15,93 5,44 5,59 5,26 5,48 3,83 3,96 5,12 2,09 4,87 2,12 1,74 1,84 2015 2015 2016 2016 external intragroup external intragroup Semis to subsidiaries Semis to NBH Semis* Standard HVA * Include sales to NBH products products St
Slide 16: Sales Structure
SALES STRUCTURE • 2016 Sales up by 1% yoy to 15.93 Mt Sales structure by product o -44% yoy pig iron sales Mt 15.83 15.93 Pig iron 15.12 o +4% yoy finished steel 16 Slabs o +4% yoy Flats 12 4,34 5,10 4,74 Billets HRC o +5% yoy Longs Plates 3,55 3,54 o +4% yoy HVA products 8 3,45 CRC 2,05 Galvanized
Slide 17: Sales Geography
SALES GEOGRAPHY NLMK Russia: sales to external markets NLMK Group: steel product sales by region Mt 15.93 18 Semis to captive assets 15.12 15.83 Others 0,99 16 EU 1,43 1,81 2,10 0,62 14 0,46 0,63 0,62 SE Asia North America 12 2,79 2,37 2,25 3,98 1,40 1,58 N.America 1,09 10 1,01 9.5 mt Middle East an
Slide 18: Foreign Assets Performance
FOREIGN ASSETS PERFORMANCE Slabs sales from Russian Flat Division NBH Rolled product sales Kt Kt 2 147 8 000,0 8 00 0 YoY 2 2 2 2 2 2 2 2 2 2 254,11 249,60 245,09 240,59 236,08 231,57 227,06 222,55 2 218,04 2 213,54 209,03 204,52 200,01 195,50 191,00 186,49 181,98 177,47 172,96 168,45 163,95 159,44
Slide 19: Cost Analysis
COST ANALYSIS 2016 NLMK Group costs of sales Iron ore materials 9% 8% Coke and coal 9% Scrap 18% Ferroalloys Other raw materials 12% $5,074 m Electricity Natural gas 4% Other energy resources 17% 6% Personnel 12% 5% Other expenses and changes in inventories Depreciation Costs per tonne of sales by s
Slide 20: NLMK Investor Relations
Sergey Takhiev NLMK Investor Relations 40, Bolshaya Ordynka Str., Bldg. 3 Moscow, 119017, Russia t. +7 495 504 05 04 m.+7 985 760 55 74 [email protected]