Aperam S.a. · EURONEXT:APAM
Aperam — Q3 2017 Earnings Presentation
26 slides from Aperam's earnings presentation, Nov 8, 2017
Slide 1: Third quarter 2017
Third quarter 2017 November 8th, 2017 © Aperam 1
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This document may contain forward-looking information and statements about Aperam and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with re
Slide 3: Introduction & overview
Introduction & overview Highlights: • Health and Safety: LTI frequency rate of 2.0x in Q3 2017 compared to 1.3x in Q2 2017. • Steel Shipments of 477 thousand tonnes in Q3 2017, stable compared to steel shipments of 478 thousand tonnes in Q2 2017. • EBITDA of USD 125 million in Q3 2017 compared to US
Slide 4: Health & Safety Performance
Health & Safety Performance Lost Time Injury Frequency rate* 4.0 3.0 2.0 1.0 0 Health & Safety frequency rate of 2.0x in Q3 2017 and 1.5x in 9M 2017. * WorldSteel-standard: Fr = lost time Injuries per 1.000.000 worked hours; based on own personnel and contractors 4
Slide 5: Environment and markets
Third quarter 2017 Environment and markets 5
Slide 6: Stainless steel prices
Environment and markets Stainless steel prices Nickel - LME Cash Chinese versus European CR 304 2B 2mm coil transaction price* (USD/t) (USD/t) 35,000 5,000 4,500 30,000 4,000 25,000 3,500 20,000 3,000 2,500 15,000 2,000 10,000 1,500 5,000 1,000 Chinese prices European prices After declining at the b
Slide 7: Performance and prospects
Third quarter 2017 Performance and prospects 7
Slide 8: Solid evolution of profitability
Performance and prospects Solid evolution of profitability Quarterly adjusted EBITDA[1] evolution (USD m.) Quarterly Net income evolution (USD m.) 13.7% 13.4% 13.3% 100 1.40 1.20 12.2% 1.10 90 1.20 11.2% 80 1.00 0.75 0.76 70 0.69 0.80 60 171 93 0.60 169 85 50 144 135 0.40 124 40 62 54 58 30 0.20 20
Slide 9: Third quarter operating performance
Performance and prospects Third quarter operating performance Shipments („000t) Q3 2017 adjusted EBITDA per division (USD million) [1] 486 478 477 457 457 143 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 102 Adjusted EBITDA[2] (USD million) 171 169 144 135 124 12 13 15 8 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q
Slide 10: Leadership Journey
Performance and prospects Leadership Journey® Cumulated gains (USD million) Asset upgrade program launched on best performing assets Status • Productivity improvement of the downstream 600 facilities in Genk (CAP2), Gueugnon (CAP10) Tranche 1 and Timoteo (Sendzimir Mill #1). 550 USD52m of Capex •
Slide 11: Financial results
Third quarter 2017 Financial results 11
Slide 12: Third quarter P&L highlights
Financial results Third quarter P&L highlights Adjusted EBITDA[1] to net income (USD million) (53) 4 (10) 135 (14) 82 76 62 Adj. EBITDA[1] Depreciation, Operating Net interest & Forex Pre-tax Tax & Net income amortisation & income financing & derivatives income Non-controlling Exceptional costs gain
Slide 13: Third quarter cash flow highlights
Financial results Third quarter cash flow highlights Free cash flow (USD million) (41) (12) 135 (32) 82 50 Adj. EBITDA[1] Working capital Net financial Cash-flow Capex and other Free cash-flow before charges, taxes from investing activities dividend and share & others operations buy-back Profit Desp
Slide 14: Net debt and financial ratios
Financial results Net debt and financial ratios Net debt and gearing[1] evolution Net Debt / EBITDA[2] evolution (USD million) 29% 1,200 30% 4.0 3.76 26% 26% 3.5 1,000 23% 25% 20% 3.0 2.60 800 20% 2.36 2.5 2.20 14% 600 15% 2.0 1066 878 1.5 400 816 6% 10% 690 0.98 1.0 536 4% 0.63 200 5% 316 0.5 0.31
Slide 15: Q&A
Q&A Conservation centre for the departmental archives of the Nord region - Lille, France de Alzua+ / ZigZag Architecture © Sergio Grazia Aperam Stainless Steel used: 304, Uginox Matt
Slide 16: Appendix
Third quarter 2017 Appendix 16
Slide 17: Aperam's value proposition
Third quarter 2017 Aperam‟s value proposition 17
Slide 18: Aperam value strategy: sustainably safe and profitable company
Aperam value strategy Being a sustainably safe and profitable company Aperam‟s investment case Solid execution of self Cost Leading footprint Cash generation and help strategy financial discipline Leadership Journey® Optimized and sustainable Strong cash generation European asset base through the cy
Slide 19: Financial Policy – Cash Allocation
Financial Policy – Cash Allocation A financial policy to maximize the long term growth of the company and the value accretion for its shareholders while maintaining a strong Balance Sheet consistent with Investment Grade Financial ratios. Financial Policy 2017 Company Invest in sustaining and upgrad
Slide 20: Aperam's value strategy: a customer driven company
Third quarter 2017 Aperam‟s value strategy: A customer driven company focused on its self-help story
Slide 21: Unlocking value of best performing assets through the Leadership Journey
Aperam‟s value strategy Unlocking value of Aperam‟s best performing assets through the Leadership Journey® Leadership Journey® initiatives: from restructuring to Leadership Journey ® annualized recurring gains Asset upgrade (USD million) 600 2011 2011-2013: LJ phase 1 - Restructuring • Mothballing o
Slide 22: Phase 3 – the Transformation Program targets
Aperam‟s value strategy Phase 3 – the Transformation Program targets Key pillars of the Phase 3 Transformation Program Annualized EBITDA cumulated gains from (USD million) Accelerate productivity gains by implementation 180 New of latest technology and breakthough in technologies automation with dev
Slide 23: Strengthening product and service differentiation through Top Line strategy
Aperam‟s value strategy Strengthening product and service differentiation through the Top Line strategy Shipments of Top Line products developments in kT 350 300 • Toplines are commercial projects focusing on 250 Top Line development of Aperam‟s most profitable product, mindset segment, client or ge
Slide 24: Leverage Aperam's unique position in Europe
Aperam‟s value strategy Leverage Aperam‟s unique position in Europe European stainless steel industry footprint after restructuring Key strengths of the European operations of Aperam Finishing line • The only integrated upstream Steel making Sourcing operations in the heart of Europe, with the best
Slide 25: Optimise value creation in South America
Aperam value strategy Optimise value creation in South America thanks to a perfectly adapted asset base and flexible sales management Key pillars of the mitigation plan in Brazil Aperam‟s assets optimisation in South America • Ensure full utilisation rate with the best margin Product mix Geographica
Slide 26: Sustainability is fully embedded in Aperam Strategy
Aperam‟s value strategy Sustainability is fully embedded in Aperam Strategy Social Environnement Governance Our People are We provide one of the We lead by example our greatest asset. “greenest steels” and with strong sense of ethics Their Safety is our priority, constantly reduce our & integrity an