Ferrexpo Plc · LSE:FXPO
Ferrexpo — H1 2012 Earnings Presentation
22 slides from Ferrexpo's earnings presentation, August 2012
Slide 1: 2012 First Half Results August 2012
2012 First Half Results August 2012 Producing iron ore pellets for over 30 years
Slide 2: Introduction
Introduction Michael Abrahams, Chairman 1
Slide 3: 1H 2012 Financial Results
1H 2012 Financial Results Chris Mawe, CFO 2
Slide 4: Summary Results 1H 2012
Summary Results 1H 2012 US$m 1H 2012 1H 2011 Change FY 2011 > Consistent production underpins results unless otherwise stated Pellet production own ore 4,562.9 4,394.1 +3.8% 9,063 > EBITDA reflects lower commodity prices, stable (‘000 tonnes) local currency and cost inflation EBITDA 240 401 -40% 801
Slide 5: Production and Sales
Production and Sales US$m (unless otherwise stated) 1H 2012 1H 2011 Change 2011 > Production remains at full capacity Pellet production from own ore 4,563 4,394 +3.8% 9,063 (‘000 tonnes) > Own ore output increased +3.8% Production from third party materials (‘000 tonnes) 162 391 -59% 747 > Pellets f
Slide 6: Revenue
Revenue Revenue > All production continues to be sold 1,000 40 800 87 3 1 > Sales volume lower, due to reduced production from third party materials and completed loading of 600 one Capesize vessel in early July US$m 400 855 731 200 > Average price 12% lower; reflecting timing and 0 savings on inter
Slide 7: EBITDA
EBITDA > Sales volume effect on profit negligible (third party 450 concentrate mainly) 2 84 400 > Long-term contracts and high quality customer portfolio key to good volume performance 350 53 300 > Index-based pricing continues to develop 12 250 9 > Average price 12% lower, reflects market US$m 200
Slide 8: C1 Cash Costs
C1 Cash Costs 1H 2012 as compared to 1H 2011 > Stable UAH/USD exchange rate 70.0 60.0 5.4 > Electricity price increases in local currency 2.6 2.6 0.5 1.1 50.0 40.0 > Gas prices higher than 2011 H1, but stable in 2012 US$ 30.0 60.4 48.2 20.0 > Diesel prices track oil, now moderating a little 10.0 0.0
Slide 9: Cash Flow
Cash Flow US$m > Cash flows managed to deliver sustainable production, fund (unless otherwise stated) 1H 2012 1H 2011 Change FY 2011 growth projects and maintain prudent balance sheet ratios EBITDA 240 401 -40% 801 Working capital movements -63 -25 +52% -111 > Working capital increase due to higher
Slide 10: Balance Sheet
Balance Sheet Gross Debt Maturity Profile at 30 June 2012 Credit Metrics 2018 US$m 30 Jun 2012 31 Dec 2011 Cash and Equivalents 716 890 2017 Total Gross Debt 966 970 2016 Net Debt -251 -80 2015 Total Equity 1,519 1,393 2014 Undrawn Committed Facilities 72 50 2013 Total Liquidity (Facilities + Cash)
Slide 11: Operations
Operations Kostyantin Zhevago, CEO 10
Slide 12: 1H 2012 Progress
1H 2012 Progress > Strong performance – operational; project execution; marketing; logistics > Operations – Continued strong and improving safety record – Increased output – Further operational efficiencies maintaining cost competitiveness > Projects – First ore at Yeristovo, commercial production i
Slide 13: Ferrexpo Poltava Mining (FPM)
Ferrexpo Poltava Mining (FPM) Safety Production 90 80 5,000 70 Number of accidents at FPM 4,500 60 4,000 50 3,500 1,778 1,920 2,057 2,134 2,139 2,003 ‘000 tonnes 40 3,000 30 2,500 65% 20 2,000 62% 10 1,500 2,672 2,584 2,384 2,255 2,429 0 1,000 2,120 500 1984 1985 1986 1987 1988 1989 1990 1991 1992 1
Slide 14: Existing and Future Project Updates
Existing and Future Project Updates FPM Crude Ore FYM Crude Ore No of pellets Today ~ in 2014 2016 (est) 9.5 mtpa 12 mtpa 20 mtpa US$65m 1H 2012 US$7m 1H 2012 US$19m 1H 2012 US$21m 1H2012 Concentrator Yeristovo Mine Capacity Upgrade Quality Upgrade Mine Life Extension Completion in 2016 by 2013 by 2
Slide 15: Sales Breakdown by Market
Sales Breakdown by Market 53% Further development in Growth 61% markets ahead of production from 7% 40% Yeristovo 3% 36% Index linked pricing contracts introduced in 2011 – prices moving in line with international peers 50% of sales managed through Ferrexpo’s supply chain (1H 2011: 50%) Full marketi
Slide 16: Sales Volumes by Geographic Location and Contract Type
Sales Volumes by Geographic Location and Contract Type Sales volumes by geographic location Sales volumes by contract type mt % 3% 25% 23% 35% 1.7 1.8 Growth Index Natural Fixed Q 2.4 Traditional Spot 2.9 0.2 74% 0.3 40% Outer ring 1H 2012: 4.5 mt Inner ring 1H 2011: 4.7 mt Ferrexpo’s strategic loca
Slide 17: Distribution Capabilities
Distribution Capabilities Ferrexpo’s port facilities at Tis In 1H 2012 Ferrexpo Ruda, Yuzhny, from which up purchased an additional 600 to five million tonnes of pellets railcars, bringing its fleet to are loaded each year for its 1,645 railcars, and transported seaborne customers. Its own 3.0 mt of
Slide 18: Strategy and Outlook
Strategy Strategyand andOutlook Outlook 17
Slide 19: Business Strategy and Outlook
Business Strategy and Outlook > Develop significant resource base and improve quality > Remain in the lowest quartile of the global pellet cost curve > Expand logistics capabilities to provide better service to customers > Open and develop new markets and customers > Maintain a strong balance sheet
Slide 20: 1H 2012 Highlights
1H 2012 Highlights Consistent and reliable production from existing operations Continuing strong financial performance and Long-term customer relationships and operating cash generation premium product Strategic location, own logistics capabilities First commercial ore from Yeristovo in 2013 and acc
Slide 21: Disclaimer
Disclaimer This document is being supplied to you solely for your information and does not constitute or form Certain statements, beliefs and opinions in this document and any materials distributed in part of any offer or invitation or inducement to sell or issue, or any solicitation of any offer to
Slide 22: Group Investor Relations
Ferrexpo Group Investor Relations Ingrid McMahon – [email protected] Emma Villiers – [email protected] 0207 389 8304 www.ferrexpo.com 21