Severstal · RUS:CHMF
Severstal — Q1 2018 Earnings Presentation
22 slides from Severstal's earnings presentation, Apr 17, 2018
Slide 1: Q1 2018 Financial Results Presentation
Q1 2018 Financial Results Presentation 17 April 2018
Slide 2: Table of Contents
3 Q1 2018 Results Overview Table of Contents 7 Divisional Performance and Market Outlook 11 Financial Position 16 Appendices
Slide 3: Q1 2018 Results Overview
Severstal Q1 2018 Results Overview Achieve more together
Slide 4: Summary
Summary Q1 2018 Highlights: Group revenue remained almost flat q/q at $2,173 million (Q4 2017: $2,178 million) as a softening of sales volumes at the Resources division was offset by an increase in average selling prices for raw materials and steel sales volumes growth Q1 2018. Group EBITDA* dec
Slide 5: Revenue & EBITDA divisional quarterly dynamics
Revenue & EBITDA divisional quarterly dynamics Revenue (m$) Q1 17– Q1 18: Q1 2018 Group Revenue: $2,173m (Q4 2017: $2,178m; down 0.2%). Group 1,847 1,956 2,025 1,623 1,756 revenue remained flat following increase in 424 471 358 474 402 steel sales volumes, stronger pricing for coking coal and pell
Slide 6: +$350m EBITDA 2018 programme progress: key drivers
+$350m EBITDA 2018 programme progress: key drivers* from Q1 2017 to Q1 2018 11 32 36 45 4 Additional effect of $88m y/y 706 578 618 1. 2. 3. 4. 5. EBITDA Q1 2017 Macro factors: selling Sales Volumes EBITDA net of macro Sales&Marketing Smart procurement Operational EBITDA Q1 2018 prices and COS chang
Slide 7: Divisional Performance and Market Outlook
Divisional Performance and Market Outlook
Slide 8: Severstal Russian Steel (RSD)
Severstal Russian Steel (RSD) RSD steel product sales increased 3% q/q to 2.87 mln tonnes compared with the previous quarter (Q4 2017: 2.79 mln tonnes). The Company increased export sales volumes to 48% (Q4 2017: 42%) to benefit from more profitable export deliveries at the beginning of the year
Slide 9: Cost Control at Severstal Russian Steel
Cost Control at Severstal Russian Steel Cherepovets Steel Mill production cash cost of slab, $/t 418 409 370 377 361 350 327 334 335 Q1 18 non-integrated 323 321 cash cost of slab up 302 $14/t q/q as a result Cherepovets 259 of higher raw 255 250 cash cost of materials prices 221 slab at market 214
Slide 10: Severstal Resources
Severstal Resources Average selling price and cash cost per tonne Coking coal concentrate sales volumes from Vorkutaugol declined 25% q/q, as Vorkutaugol coking coal Cost per tonne (US$/t) Average Selling Price (US$/t)* the long-wall repositioning at the Vorgashorskaya mine impacted production of
Slide 11: Financial Position
Severstal Financial Position Achieve more together
Slide 12: Cash Flow and Net Working Capital
Cash Flow and Net Working Capital EBITDA to Free Cash flow Q1 2018 Highlights: reconciliation for Q1 18, m$ Q1 18 free cash flow of $289m saw a decline as a result of net EBITDA Q1 2018 706 working capital uptick due to receivables increase cash CAPEX (136) Q1 18 cash CAPEX of $136m, 20.0% lower
Slide 13: Robust Liquidity and Sustainable Leverage
Robust Liquidity and Sustainable Leverage At the end of Q1 2018, cash and cash equivalents totalled $757 million (Q4 2017: $1,031 million) reflecting the net effect of free cash flow generation and Eurobond payout. Total Short-term Debt to be Repaid of $10m* Gross debt declined 26.3% to $1,542 m
Slide 14: Debt Structure
Debt Structure As at 31.03.2018, the debt structure was dominated by public debt with vast majority in US dollars (99.1%). Debt Maturity Schedule*, $m 879 701 10 1 1 1 2018 2019 2020 2021 2022 2023+ Notes: Debt represents the principal amount of debt from third parties. Debt for 2018 represents amou
Slide 15: Market Outlook
Market Outlook Global: In Q1 2018 steel and raw material demand remained high. Global steel prices were supported by winter restrictions in China and a seasonal increase in Chinese demand in March, which contributed to higher prices of raw materials. Russia: Russian export prices are expected
Slide 16: Appendices
Severstal Appendice Achieve more together
Slide 17: Summary Income Statement
Summary Income Statement $ million, unless otherwise stated Q1 2018 Q4 2017 Q1 2018 Q1 2017 Revenue 2,173 2,178 2,173 1,767 COGS (1,314) (1,276) (1,314) (1,046 ) EBITDA 706 754 706 578 EBITDA margin, % 32.5% 34.6% 32.5% 32.7% Profit from operations 585 656 585 476 Operating margin, % 26.9% 30.1% 26.
Slide 18: Q1 2018 Revenue Breakdown by Region
Q1 2018 Revenue Breakdown by Region Severstal Group Q1 2018 revenue Severstal Russian Steel Q1 2018 revenue breakdown by region breakdown by region 1% 1% 4% 1% Russian Federation 1% 1% 6% Europe 5% Russian Federation 6% 6% The Middle East Europe 6% CIS CIS The Middle East 54% North America 55% 27% 2
Slide 19: Q1 2018 Divisional Results
Q1 2018 Divisional Results Severstal Resources Q1 2018 Q4 2017 Change, % Q1 2018 Q1 2017 Change, % Revenue ($m) 402 474 (15.2%) 402 424 (5.2%) Cost of sales ($m) (198) (229) (13.5%) (198) (182) 8.8% G&A expenses ($m) (17) (16) 6.3% (17) (15) 13.3% Distribution expenses ($m) (28) (41) (31.7%) (28) (3
Slide 20: Summary Balance Sheet
Summary Balance Sheet $ million As at 31 March 2018 As at 31 December 2017 Cash and Cash Equivalents 757 1,031 Total Assets: 7,068 7,209 Current Assets 2,783 2,952 Non-current Assets 4,285 4,257 Total Liabilities: 3,198 3,811 Current Liabilities 1,065 1,670 Non-current Liabilities 2,133 2,141 Total
Slide 21: Summary Cash Flow Statement
Summary Cash Flow Statement $ million Q1 2018 Q4 2017 Q1 2018 Q1 2017 Profit before Financing and Taxation 575 744 575 465 Cash Generated from Operations 572 708 572 283 Interest Paid (30) (46) (30) (20) Income Tax Paid (129) (76) (129) (73) Net cash from Operating Activities 413 586 413 190 Total c
Slide 22: 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