Acerinox Sa · BME:ACX
Acerinox Sa — Q3 2016 Earnings Presentation
28 slides from Acerinox Sa's earnings presentation, 2016
Slide 1: Acerinox 2016 Third Quarter Results
ACERINOX 2016 THIRD QUARTER RESULTS
Slide 2: Disclaimer
DISCLAIMER This document may contain forward-looking information and statements about ACERINOX, S.A., its subsidiaries and/or its management. These forward-looking statements include financial projections and estimates and their underlying assumptions, and statements regarding the intent, belief or
Slide 3: Main Financial Figures of Acerinox
MAIN FINANCIAL FIGURES OF ACERINOX Million EUR Q3 2016 Q3 2015 Variation 9M 2016 9M 2015 Variation NET SALES 1,007.62 1,000.86 0.7% 2,914.64 3,316.08 -12.1% EBITDA 103.30 41.50 148.9% 223.03 245.13 -9.0% EBIT 60.20 0.53 11192.9% 96.64 121.35 -20.4% RESULT BEFORE TAXES 53.50 -9.75 --- 72.58 86.27 -15
Slide 4: Sector Indicators
S E C T O R I N D I C AT O R S Auto Construction Home Production Appliances +5.1% +1.4% +4.6% Eurofer´s estimate for Eurofer´s estimate for Eurofer´s estimate 2016 2016 for 2016 +1.6% +4.9% +1.5% Year to September Year to August Year to September Source: Wards Auto Source: US Census Bureau Source:AH
Slide 5: Stainless Steel Inventories
S TA I N L E S S S T E E L I N V E N T O R I E S Thousands tons 100 70 Days of rotation A v e r a g e 7 5 , 0 5 8 t o n s 80 65 60 INVENTORIES 60 55 OF COLD- 40 ROLLED 50 20 45 Source: EHV 0 40 J F M A M J JL A S O N D J F M A M J JL A S O N D J F M A M J JL A S Reference: Germany 2014 2015 2016 Tho
Slide 6: World: Stainless Steel Melt Shop Production
W O R L D : S TA I N L E S S S T E E L M E LT S H O P P R O D U C T I O N Million tons +3.6% +4.6% 43,5 45,0 41,7 41,5 38,1 35,4 33,6 31,1 28,7 28,1 24,6 26,2 24,5 24,9 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016E 2017E China Asia w/o China Americas EuroAfrica Source: ISSF ACERI
Slide 7: Official Nickel Price in the L.M.E.
OFFICIAL NICKEL PRICE IN THE L.M.E. Years 2015 and 2016, up to October 24 20,000 Reduction in stocks of nickel units A v e r a g e p r i c e : c a s h / t h r e e 15,000 m o n t h s U S D / M t Philippines mine closures 10,000 5,000 J F M A M J J A S O N D J F M A M J J A S O N D 2006-2016 (up to Se
Slide 8: Stainless Steel Cold Rolled Coil Prices
S TA I N L E S S S T E E L C O L D R O L L E D C O I L P R I C E S AISI 304 2.0 mm 4.500 Low prices in all markets: USD/Mt, final price, alloy surcharge included Europe (-15%) United States (-25%) Asia (-18%) (over 9M 2015) 3.000 N. EUROPE USA ASIA 1.500 2013 2014 2015 2016 S o u r c e : P L A T T S
Slide 9: Production
PRODUCTION Thousand Mt 587 581 617 632 558 601 611 562 546 575 652 637 510 547 516 M E LT I N G S H O P +5% over 9M 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 +13% over Q3 2015 2013 2014 2015 2016 572 515 485 465 477 542 552 491 464 524 536 498 481 526 563 HOT ROLLING +7% over 9M 2015 +15%
Slide 10: Main Financial Figures of Acerinox
MAIN FINANCIAL FIGURES OF ACERINOX Million EUR 9M 2016 9M 2015 Variation FY 2015 NET SALES 2,914.64 3,316.08 -12.1% 4,221.43 EBITDA 223.03 245.13 -9.0% 286.23 EBIT 96.64 121.35 -20.4% 120.89 RESULT BEFORE TAXES 72.58 86.27 -15.9% 76.90 RESULT AFTER TAXES & MINORITIES 44.50 55.88 -20.4% 42.89 Net Fin
Slide 11: Main Financial Figures of Acerinox: Positive tendency along the year
MAIN FINANCIAL FIGURES OF ACERINOX Million EUR Positive tendency along the year Q1 2016 Q2 2016 Q3 2016 103 79 60 53 41 36 36 1 26 17 -7 -8 EBITDA EBIT Before taxes After taxes ACERINOX 11 2016, THIRD QUARTER RESULTS
Slide 12: Quarterly Evolution of our EBITDA
Q U A R T E R LY E V O L U T I O N O F O U R E B I T D A Million EUR Return to double digit EBITDA margin 150 140 25 .0 % 124 20 .0 % 101 103 101 103 100 89 79 15 .0 % 71 68 12.4% 10.8% 10.3% 51 9.3% 9.0% 10 .0 % 50 8.7% 8.6% 41 38 7.7% 41 41 8.3% 6.6% 4.9% 4.1% 4.5% 4.3% 5.0% 3.9% 0 Q1 Q2 Q3 Q4 Q1
Slide 13: Balance Sheet
BALANCE SHEET Million EUR ASSETS LIABILITIES Sep 16 2015 Sep 15 Variation Sep 16 2015 Sep 15 Variation Non-current assets 2,262.99 2,317.53 2,310.72 -2.4% Equity 1,990.54 2,023.30 2,002.90 -1.6% Current assets 2,034.38 1,808.14 2,002.21 12.5% Non-current liabilities 1,232.10 995.59 1,067.55 23.8% -
Slide 14: Net Financial Debt
NET FINANCIAL DEBT Million EUR Debt refinancing (May 2016) 12 bilateral contracts No convenants 1200 Goals: reduce cost, extend maturities 80.0% 1,084 70.0% 1000 887 60.0% 56. 3% 800 711 678 50.0% 47.1% 616 582 600 529 40.0% 33.9% 33. 2% 35. 1% 34. 1% 34. 1% 30.0% 400 20.0% 200 10.0% 0 2010 2011 201
Slide 15: Cash Flow Statement
C A S H F L O W S TAT E M E N T Jan - Sep Jan - Dec Jan - Sep 2016 2015 2015 Million EUR Result before taxes 72.6 76.9 86.3 Adjustments for: 139.7 210.2 167.4 Depreciation and amortisation 125.6 163.7 122.4 Changes in provisions and impairments -7.6 2.3 10.7 Other adjustments in the result 21.7 44.1
Slide 16: Since 2008 the world of stainless has changed
Since 2008 the world of stainless has changed: Global crisis Overcapacity in China ACERINOX 16 2016, THIRD QUARTER RESULTS
Slide 17: Stainless Steel Industry Has Been Forced to Adjust
S TA I N L E S S S T E E L I N D U S T RY H A S B E E N F O R C E D T O ADJUST… Consolidation of the industry Capacity reductions Capital increases High leverage Strong reduction in investments Strong reduction in dividends ACERINOX 17 2016, THIRD QUARTER RESULTS
Slide 18: But Acerinox Remains as a Case Study
… BUT ACERINOX REMAINS AS A CASE STUDY Million EUR 2008 2009 2010 2011 2012 2013 2014 2015 CASH FLOW 554 208 337 490 568 261 47 20 GENERATED CAPEX 328 228 234 181 151 162 77 68 RETURN TO 242 116 112 112 112 47 56 48 SHAREHOLDERS NET DEBT REDUCTION -16 -136 -9 197 305 52 -86 -95 ACERINOX 18 2016, THI
Slide 19: Being a Benchmark
… BEING A BENCHMARK Million EUR Period 2008-2015 Cash generation 2.487 CAPEX 1.430 Return to shareholders 845 Net debt reduction 212 ACERINOX 19 2016, THIRD QUARTER RESULTS
Slide 20: Still Finding New Areas of Improvement
… STILL FINDING NEW AREAS OF IMPROVEMENT Since 2008: FIXED COSTS: 110 MILLION EUR Personnel expenses 54 million EUR Maintenance 45 million EUR O t h e r s 11 m i l l i o n E U R VARIABLE COSTS: EXCELLENCE PLAN TARGET ACHIEVED: 2009-2010 Excellence Plan I 73% 97 Million EUR 2 0 11 - 2 0 1 2 E x c e l
Slide 21: With a Clear Long Term Strategy on Mind
… W I T H A C L E A R L O N G T E R M S T R AT E G Y O N M I N D STRATEGIC PLAN 2016 - 2020 ACERINOX 21 2016, THIRD QUARTER RESULTS
Slide 22: Strategic Plan
S T R AT E G I C P L A N 2 0 1 6 - 2 0 2 0 Belief on a leader product Operative Excellence Operative Maximum capacity Excellence utilization Global S T R AT E G I C Presence PLAN Quick-return investments Financial Strength Financial Strength Cash flow generator Sustainability ACERINOX 22 2016, THIRD
Slide 23: Bahru Stainless
B A H R U S TA I N L E S S ACERINOX 23 2016, THIRD QUARTER RESULTS
Slide 24: Current Capex in Place: NAS
CURRENT CAPEX IN PLACE: NAS Bright Anneal and ZM lines investments • 11 6 m i l l i o n e u r o s • Start up: first half 2017 • Payback: <5 years • Goals: • enter into the BA market in the United States • Increase NAS capacity utilization • Main applications: household a p p l i a n c e s , c u t l
Slide 25: Current Capex in Place: Acerinox Europa
C U R R E N T C A P E X I N P L A C E : A C E R I N O X E U R O PA AP and ZM construction, Acerinox Europa AP and ZM • 140 million euros lines investment: • Start up: end of 2017 • Payback: <5 años • Goals: • higher value-added products • increase sales to direct client • improve capacity utilizatio
Slide 26: Evolution of Acerinox, S.A. Stock
EVOLUTION OF ACERINOX, S.A. STOCK Euros/share 25 Potential upward trend 20 15 10 5 0 2 0 0 5 2 0 0 6 2 0 0 6 2 0 0 72 0 0 7 2 0 0 82 0 0 8 2 0 0 9 2 0 0 9 2 0 1 0 2 0 1 0 2 0 1 1 2 0 1 1 2 0 1 22 0 1 2 2 0 1 32 0 1 3 2 0 1 4 2 0 1 4 2 0 1 5 2 0 1 25 0 1 6 ACERINOX 26 2016, THIRD QUARTER RESULTS
Slide 27: Focus on Value: What We Should Expect Going Forward
W H AT W E S H O U L D E X P E C T G O I N G F O R WA R D Sustainable CAPEX High added value product Improve efficiency Excellence Plan V Sustainable dividends Debt optimization Focus on cash generation Keeping an eye on opportunities that contribute to improve our efficiency FOCUS ON VALUE ACERINOX
Slide 28: Acerinox Q&A
ACERINOX Q&A 2016 THIRD QUARTER RESULTS