Severstal · RUS:CHMF
Severstal — Q2 2020 Earnings Presentation
19 slides from Severstal's earnings presentation, Jul 23, 2020
Slide 1: Q2 & H1 2020 Financial Results Presentation
Q2 & H1 2020 Financial Results Presentation 23.07.2020 It is strictly forbidden to use, copy, disclose or distribute materials contained in this document (or appendices hereto) in any way whatsoever without due authorization. 1
Slide 2: Table of Contents
TABLE OF CONTENTS 03 Q2 & H1 2020 Results Overview 08 Divisional Performance 13 Financial Position 16 Market Outlook 17 Appendices It is strictly forbidden to use, copy, disclose or distribute materials contained in this document (or appendices hereto) in any way whatsoever without due authorization
Slide 3: Q2 & H1 2020 Results Overview
Q2 & H1 2020 Results Overview It is strictly forbidden to use, copy, disclose or distribute materials contained in this document (or appendices hereto) in any way whatsoever without due authorization. 3
Slide 4: Q2 & H1 2020 Group Highlights
Q2 & H1 2020 Group Highlights Q2 2020 vs. Q1 2020 ANALYSIS: 01 Group revenue declined by 10.5% q/q to $1,590 million (Q1 2020: $1,777 million) as a result of lower average sales prices for steel products and a decline in sales volumes. 02 Group EBITDA declined by 9.7% q/q to $501 million (Q1 2020: $
Slide 5: Revenue & EBITDA divisional quarterly dynamics
Revenue & EBITDA divisional quarterly dynamics Revenue (m$) Q4 19 - Q2 20: 1,806 Q2 2020 Group Revenue: $1,590m down 10.5% 402 400 1,770 402 1,588 q/q (Q1 2020: $1,777m); Group revenue declined mainly due to the weaker pricing and volumes reduction (370) (393) (400) Q4 2019 Q1 2020 Q2 2020 Intersegm
Slide 6: H1 2020 Group Highlights
H1 2020 Group Highlights Revenue dynamics in H1 2020, $m EBITDA dynamics in H1 2020, $m EBITDA to FCF bridge for H1 2020, $m EBITDA H1 2020 1,056 cash CAPEX (675) 3,367 4,208 1,416 1,056 interest paid & other fin. cost (66) H1 2020 H1 2019 H1 2020 H1 2019 income tax paid (76) • Weaker average steel
Slide 7: EBITDA bridge key drivers from H1 2019 to H1 2020
EBITDA bridge key drivers* from H1 2019 to H1 2020, $m (319) 56 (52) (16) (12) (17) 1,416 1,097 1,056 EBITDA H1 2019 Macro factors: selling EBITDA adjusted for Sales & Marketing Steel sales volumes Balakovo disposal Timing Operational EBITDA H1 2020 prices and COS macro factors performance *Company’
Slide 8: Divisional Performance
Divisional Performance It is strictly forbidden to use, copy, disclose or distribute materials contained in this document (or appendices hereto) in any way whatsoever without due authorization. 8
Slide 9: Severstal Russian Steel performance
Severstal Russian Steel Q2 & H1 2020 performance Q2 2020 vs. Q1 2020 ANALYSIS: 01 RSD steel product sales decreased 7% q/q to 2.56 mln tonnes in Q2 2020 (Q1 2020: 2.76 mln tonnes). 02 RSD topline declined by 10.3% q/q to $1,558 million (Q1 2020: $1,770 million). EBITDA declined by 5.1% q/q to $351 m
Slide 10: Severstal Resources performance
Severstal Resources Q2 & H1 2020 performance Q2 2020 vs. Q1 2020 ANALYSIS: 01 Revenue from the Resources Division increased to $402 million in Q2 2020 (Q1 2020: $400 million), mainly as a result of improved sales volumes at Vorkutaugol. EBITDA increased by 6.4% q/q to $182 million (Q1 2020: $171 mil
Slide 11: Divisional revenue structure
Divisional revenue structure Q2 & H1 2020 Severstal Group Q2 2020 revenue Severstal Group H1 2020 revenue breakdown by region breakdown by region 1% 1% 4% 2% 2% 1% 1%3% 2% Russian Federation Russian Federation 8% Europe 8% Europe CIS CIS 27% Americas Americas 59% 57% 58% 25% The Middle East The Midd
Slide 12: Divisional cost structure
Divisional cost structure Cherepovets Steel Mill production cash cost of slab, $/t** Vorkutaugol (coking coal concentrate) Cost per tonne (US$/t) Average Selling Price (US$/t)* 355 346 117 334 335 342 331 323 321 322 325 75 302 306 81 70 271 78 78 259 66 68 250 252 206 203 221 213 177 Q1 2020 Q2 202
Slide 13: Financial Position
Financial Position It is strictly forbidden to use, copy, disclose or distribute materials contained in this document (or appendices hereto) in any way whatsoever without due authorization. 13
Slide 14: Cash Flow and Net Working Capital
Cash Flow and Net Working Capital Q2 2020 Highlights: H1 2020 EBITDA to FCF reconciliation, $m 01 Free Cash Flow increased to $190 million in Q2 2020 (Q1 2020: $54 million), primarily reflecting positive changes in net working capital. EBITDA H1 2020 1,056 02 Cash CAPEX amounted to $331 million (Q1
Slide 15: Robust Liquidity and Sustainable Leverage
Robust Liquidity and Sustainable Leverage 01 At the end of Q2 2020, cash and cash equivalents declined to $584 million (Q1 2020: $1,042 million). Robust Liquidity and Sustainable Leverage 0.8 02 Gross debt remained almost unchanged at $2,590 million (Q1 2020: $2,570 million). 0.6 0.6 03 Net debt inc
Slide 16: Market Outlook
Market Outlook • In Q2 2020 global steel demand was impacted by the spread of COVID-19 as a result of lockdown restrictions throughout the EU and Russia. • According to industry experts, global steel demand is expected to decline by 6% y/y in 2020. • Iron ore prices demonstrated strong upward dynami
Slide 17: Appendices
Appendices It is strictly forbidden to use, copy, disclose or distribute materials contained in this document (or appendices hereto) in any way whatsoever without due authorization. 17
Slide 18: Group's financial summary
Group’s financial summary Summary Income Statement Summary Cash Flow Statement $ million, unless otherwise stated Q2 2020 Q1 2020 H1 2020 H1 2019 $ million Q2 2020 Q1 2020 H1 2020 H1 2019 Revenue 1,590 1,777 3,367 4,208 376 408 784 1,156 Profit before Financing and Taxation COGS (955) (1,099) (2,054
Slide 19: 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