Nlmk · RUS:NLMK
Nlmk — 9M 2007 Earnings Presentation
25 slides from Nlmk's earnings presentation, November 2007
Slide 1: 9 Months 2007 Financial and Production Results Presentation
NLMK 9 Months 2007 Financial and Production Results Presentation US GAAP Consolidated Financial Statements November 2007 Презентация результатов работы по итогам 1 квартала 2005 года 1
Slide 2: Disclaimer
Disclaimer NLMK This document is confidential and has been prepared by NLMK (the “Company”) solely for use at the investor 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 do
Slide 3: 9M 2007 Operating Results
9M 2007 Operating Results Н ЛМК NLMK § Sales volume – 6.7 mln t. § Sales revenues – USD 5,546 mln (+29% year-on-year). § Operating profit – USD 2,182 mln (+30% year-on-year). § EBITDA1 – USD 2,463 mln (+35% year-on year). § EBITDA margin – 44%. § Net profit – USD 1,657 mln (-2% year-on-year). § Net
Slide 4: Main Events
Main Events Н ЛМК NLMK Acquisitions and disposals § February - disposal of stakes in energy assets for USD 78.7 million. § June - disposal of the Company’s 54.88% stake in Lipetskcombank for USD 47.7 million. Major projects (Technical Upgrading Programme) § EUR 23 mln contract signed with Siemens VA
Slide 5: Key Highlights
Key Highlights Н ЛМК NLMK Financial result changes for 9M 2007/9M 2006 (key drivers) § Revenues +29.4% Ø Growth of average product prices Ø Consolidation of Altai-Koks (since April 2006) and VIZ-Stal (since August 2006) § EBITDA +34.8% Ø The growth of sales revenue exceeded the growth of costs § Net
Slide 6: Sales Revenue for 9M 2007
Sales Revenue for 9M 2007 NLMK § The key segments are the Steel Segment Sales revenue structure by segment (91%) and Coke-Chemical Segment (6.5%). § The domestic market - more than 40% of Mining segment sales revenue. Steel segment 91,1% 1,3% § 44% - high value added products: Coke-chemical Ø Cold-r
Slide 7: Cost structure
Cost stucture NLMK Cash cost dynamics for major products Key drivers for 9M 2007 250 235,0 213,2 209,4 200 167,2 § Consolidated cash cost of 1 tonne 150 128,0 127,0 133,0 USD / t of slabs is estimated at the level of 114,0 USD 213. 100 50 15,8 13,9 15,7 16,0 § The iron ore contributes only 7% in 0 c
Slide 8: Operating profit
Operating profit NLMK § Operating profit – USD 2,182 mln Operating profit and EBITDA (+30% y-o-y) 46% 4 000 50% 43% 44% 44% § EBITDA – USD 2,463 mln (+35% y-o-y) 39% 40% 41% 40% 3 000 39% § The growth of sales revenue exceeded the 2 182 2 463 USD mln 30% 1 828 growth of costs 2 000 1 676 20% 822 893
Slide 9: Operating results segmental breakdown
Operating results segmental breakdown Н ЛМК NLMK Sales revenue from external customers § The segments, which primarily contribute to sales revenue growth from external 9M 2007 5 546 customers, are Steel segment and Coke- Chemical Segment Steel segment +1 058 § The effect of consolidation in the Stee
Slide 10: Steel products sales
Steel products sales NLMK Sales volume § The sales increased after recovery of the Blast Furnace #6. 8 000 7 000 6 666 § The main steel products sales markets were: 6 000 tonnes`000 Ø Russia 31.7% 4 000 Ø Asia 22.9% 2 200 2 078 2 000 Ø EU 17.9%. 0 9M 2006 9M 2007 2Q 2007 3Q2007 Sales structure by re
Slide 11: Steel Segment Performance
Steel Segment Performance Н ЛМК NLMK § The crude steel production for 9M 2007 is 6.8 mln. t at the level of the last year. § The decrease of sales volumes was caused by reduction in sales of commercial pig iron and the increase of internal slab sales. § Segment sales revenue made USD 5,068 mln (+26.
Slide 12: Steel Segment sales revenue and cost structure
Steel Segment sales revenue and cost structure NLMK § The price growth resulted in sales revenue increase for major products, except commercial pig iron. § Commissioning new coated steel facilities and consolidation of VIZ-Stal resulted in increase of high value-added product sales (+ 68,000 tonnes
Slide 13: Mining Segment Performance
Mining Segment Performance Н NLMK ЛМК § The Mining Segment satisfies 100% of main production site needs in iron ore concentrate, limestone and dolomite. § The growth of segment’s sales revenue resulted from the increase of prices and sales volumes of iron ore concentrate to the main production site.
Slide 14: Mining Segment sales revenue and cost structure
Mining Segment sales revenue and cost structure NLMK § Sales revenue from external consumers amounted to USD 71 mln (only 1% of the Group’s consolidated sales revenue). § Higher revenues from sales of sinter ore contributed 37% of the total sales revenues from external consumers. The increase of hig
Slide 15: Coke-Chemical Segment Performance
Coke-Chemical Segment Performance NLMK § In terms of coke output, Altai-koks is the largest single-site coke producer in Russia. § In 9M 2007 the output of 6% moisture coke at Altai-koks nearly doubled to 2.9 mln t due to the commissioning of Coke Battery #5, as well as due to the consolidation peri
Slide 16: Coke-Chemical Segment sales revenue and cost structure
Coke-Chemical Segment sales revenue and NLMK cost structure § Coke sales contributed more than 90% to segment’s sales revenue from external consumers § As a result of sales increase and higher coke prices, the sales revenue from external consumers tripled compared to 9M 2006 § Coking coal is supplie
Slide 17: Key financial highlights
Key financial highlights Н ЛМК Net cash flow Cash and cash equivalents 2 500 Financial 1 979 2 000 activities 3 000 +1 979 Investing 1 500 1 029 908 2 500 activities 1 000 612 2 000 USD mln 500 USD mln -512 +63 1 388 0 1 500 -500 -60 -807 -407 -233 -381 1 000 665 -1 000 -651 -512 -807 500 -1 500 -1
Slide 18: 9M 2007 change in net cash position
9M 2007 change in net cash position Н ЛМК EBITDA1 2 463,2 Working capital change -33,3 Non-cash2 +136,9 Capex -616,0 Free cash flow from operations 1 950,8 Repayment of borrowings and notes payable, net -219,1 Loan issued -136,5 Other finance operations3 +75,3 Income tax -641,2 Free cash flow 1 029,
Slide 19: Prospects
Prospects Н ЛМК NLMK § All major segments of NLMK Group demonstrated financial performance improvement in 2007. § The consolidated sales revenue and EBITDA are expected to exceed the level of 2006 by 20- 25%. § EBITDA margin for 2007 will be close to the level of 2006. § Growing prices for basic raw
Slide 20: Appendices
Н ЛМК NLMK Appendices Презентация результатов работы по итогам 1 квартала 2005 года 20
Slide 21: Consolidated statement of income
Consolidated statement of income Н ЛМК NLMK 3 Q 2007/ 9 m 2007/ 3Q 2007 2 Q 2007 2 Q 2007 9 m 2007 9 m 2006 9 m 2006 (mln. USD) +/- % +/- % Sales revenue 1 936 1 859 78 4,2% 5 546 4 285 1 261 29,4% Production cost (862) (833) (30) 3,5% (2 525) (1 988) (537) 27,0% Depreciation and amortization (99) (
Slide 22: Consolidated balance sheet
Consolidated balance sheet Н ЛМК NLMK 30.09.2007 30.06.2007 31.03.2007 31.12.2006 30.09.2006 (mln. USD) ASSETS Current assets 3 904 3 629 3 484 3 050 3 556 Cash and cash equivalents 1 388 1 349 898 665 1 342 Short-term investments 144 137 37 37 53 Accounts receivable, net 1 194 1 110 1 252 1 150 1 1
Slide 23: Consolidated statement of cash flows
Consolidated statement of cash flows Н ЛМК NLMK 3 Q 2007/ 9 m 2007/ 3 Q 2007 2 Q 2007 9 m 2007 9 m 2007 2 Q 2007 9 m 2006 (mln. USD) +/- % +/- % Cash flow from operating activities Net income 592 608 (16) -3% 1 657 1 685 (27) -2% Adjustments to reconcile net income to net cash provided by operating
Slide 24: Segmental information
Segmental information NLMK 9 months 2007 Intersegmental Coke- All Steel Mining Totals operations and Consolidated (million USD) chemical other balances Revenue from external customers 5 049 71 358 66 5 546 0 5 546 Intersegment revenue 19 575 95 40 729 (729) 0 Gross profit 2 153 431 100 37 2 721 2 2
Slide 25: Novolipetsk Steel Investor Relations
Novolipetsk Steel Investor Relations 1/15, 6 B Kotelnicheskaya nab. 109240, Moscow Russia t. +7 495 915 15 75 f. +7 495 915 79 04 www.nlmksteel.com Презентация результатов работы по итогам 1 квартала 2005 года 25