Severstal · RUS:CHMF
Severstal — Q4 2012 Earnings Presentation
28 slides from Severstal's earnings presentation, Mar 5, 2013
Slide 1: Q4 and FY 2012 Financial Results Presentation
Q4 and FY 2012 Financial Results Presentation 5 March 2013
Slide 2: Table of Contents
3 Q4 2012 Results Overview 7 Divisional Performance and Market Outlook Table of Contents 11 Financial Position 19 Appendices
Slide 3: Q4 2012 Results Overview
#) Q4 2012 Severstal Results Overview
Slide 4: Summary
Summary Q4 and FY 2012 highlights Resilient performance in a challenging 2012 year for the industry Q4 revenue down 13.2% q/q to $3,116m on lower realized prices and volumes across the divisions. FY 2012 Group revenue decreased by 10.8% to $14,104m as a result of slightly weaker sales volumes at
Slide 5: Revenue Dynamics and Breakdown
Revenue Dynamics and Breakdown Q4 2012 Revenue: $3,116m FY 2012 Revenue: $14,104m (Q3 2012: $3,591m; -13.2%) (FY 2011: $15,812m; -10.8%) Q4 revenue down on lower sales volumes and FY12 Group’s revenue decreased as a result of realized prices across the divisions, which was slightly weaker sales volu
Slide 6: EBITDA Dynamics and Breakdown
EBITDA Dynamics and Breakdown Q4 2012 EBITDA: $347m FY 2012 EBITDA: $2,119m (Q3 2012: $546m; -36.4%) (FY 2011: $3,584m; -40.9%) The EBITDA reduction was primarily attributable Severstal International’s EBITDA was comparable to the weaker demand environment y/y given a ramp-up in new capacities, whil
Slide 7: Divisional Performance and Market Outlook
Divisional Performance and Market Outlook
Slide 8: Severstal Russian Steel
Severstal Russian Steel Q4 revenue down 14.4% q/q to $1,929m (Q3 2012: $2,254m) on lower realized EBITDA per tonne and average selling price volumes and prices. FY12 revenue decreased by 18.3% to $8,617m (FY11: EBITDA per tonne (US$/t) Average Selling Price (US$/t)* $10,547m) 400 Q4 EBITDA*** do
Slide 9: Cost Control at Severstal Russian Steel
Cost Control at Severstal Russian Steel Vertical integration helps us benefit from mining margins regardless of the market environment Cherepovets Steel Mill production cash cost of slab, $/t $600 $559 $550 $537 $500 $484 $472 $457 $457 $450 $430 $432 $419 Q4 non-integrated cash cost $401 $400 $397
Slide 10: Severstal Resources
Severstal Resources Q4 revenue down 8.4% to $673m (Q3 2012: $735m) on lower realized prices EBITDA per tonne and average selling price and sales volumes. FY12 revenue down 19.0% to $3,005m (FY11: $3,711m) EBITDA per tonne (US$/t) Average Selling Price (US$/t)* Vorkutaugol (coking coal 130 200 Q4
Slide 11: Cost Control at Severstal Resources
Cost Control at Severstal Resources Total cash costs at our mining unit were all down y/y, except for Olkon Vorkuta coking coal concentrate PBS coking coal concentrate total cash costs total cash costs $92/t $90/t $112/t $107/t down 2% down 4% y/y y/y FY11 FY12 FY11 FY12 Karelskiy Okatysh pellet Olk
Slide 12: Severstal International
Severstal International Q4 SNA revenue of $810 million (Q3 2012: $910 million), down 11.0% q/q. FY12 EBITDA per tonne and average selling price revenue of $3,878 million (FY11: $3,422 million) increased by 13.3% y/y EBITDA per tonne (US$/t) Average Selling Price (US$/t*) Q4 EBITDA* down 64.7% q/
Slide 13: Cost Control at Severstal International
Cost Control at Severstal International Conversion costs down at Dearborn and Columbus. Dearborn CRC conversion costs decreased substantially after the launch of the new cold rolling mill Dearborn HRC costs, $/t Dearborn CRC conversion costs, $/t $659/t Full HRC $659/t $761/t Full CRC cash costs $72
Slide 14: Financial Position
Financial Position
Slide 15: Cash Flow and Net Working Capital
Cash Flow and Net Working Capital Highlights: 1,750 Liquidity position of $1,726m in cash and cash equivalents (1,102) Operating cash flow of $1,750m more than covered 1,864 42 1,726 FY12 cash CAPEX of $1,448m (828) Lower than planned actual FY12 CAPEX in response to the deteriorating market c
Slide 16: Robust Liquidity and Sustainable Leverage
Robust Liquidity and Sustainable Leverage Solid liquidity position: • Cash and cash equivalent of $1,726m 922 • Committed unused credit lines of $922m Total Short-term Debt to be Repaid of US$1,282m* Upcoming short-term debt maturities serviced with available liquidity of $2,648m: 1,726 • Q1 201
Slide 17: Debt Structure
Debt Structure As at 31.12.2012 the debt structure has shifted towards public debt (81% of total, 68% at 30.09.2012), but remains almost unchanged in the currency mix with USD representing 83% of total Debt Maturity Schedule, $m 1,512 1,282 966 529 751 633 51 2013 2014 2015 2016 2017 2018 2019 + Thi
Slide 18: CAPEX highlights
CAPEX highlights FY12 CAPEX Development: Selected 2013 CAPEX projects adjusted on worsening market conditions Segment Project Effect Launch $1.7bn $1.4bn RUSSIAN STEEL Balakovo mini-mill +1 mtpa of long 2013 products capacity Specialized steel service Increase in high- 2013 centers development value
Slide 19: Q4 2012 Market Outlook
Q4 2012 Market Outlook Global: Although the fragile economic environment will maintain pressure on steel prices throughout 2013, we are seeing slight signs of recovery For 2013 we anticipate average global iron ore prices to remain flat y/y, while coking coal prices could be lower, compared to 2
Slide 20: Thank you. Q&A
Thank you. Q&A Severstal Re Peo
Slide 21: Appendices
Appendices
Slide 22: Summary Income Statement
Summary Income Statement $ million, unless otherwise stated Q4 2012 Q3 2012 FY 2012 FY 2011 Revenue 3,116 3,591 14,104 15,812 COGS (2,475) (2,757) (10,785) (10,903) EBITDA* 347 546 2,119 3,584 EBITDA margin, % 11.1% 15.2% 15.0% 22.7% Profit from operations 136 369 1,371 2,917 Operating margin, % 4.4
Slide 23: Q4 2012 Revenue Breakdown by Region
Q4 2012 Revenue Breakdown by Region Q4 2012/Q3 2012, $m FY 2012/FY 2011, $m Q3 2012 Q4 2012 FY 2011 FY 2012 32 127 Africa Africa 5 98 30 273 South-East Asia South-East Asia 20 136 154 736 China and Central Asia China and Central Asia 87 572 103 447 Middle East Middle East 81 329 138 335 Central and
Slide 24: Q4 2012 Division Results
Q4 2012 Division Results Severstal Russian Steel Q4 2012 Q3 2012 Change, % FY 2012 FY 2011 Change, % Revenue ($m) 1,929 2,254 (14.4%) 8,617 10,547 (18.3%) Cost of sales ($m) (1,512) (1,727) (12.4%) (6,711) (7,749) (13.4%) G&A and distribution ($m) (285) (319) (10.7%) (1,247) (1,272) (2.0%) G&A and d
Slide 25: Q4 2012 Division Results (Continued)
Q4 2012 Division Results (Continued) Severstal Resources Q4 2012 Q3 2012 Change, % FY 2012 FY 2011 Change, % Revenue ($m) 673 735 (8.4%) 3,005 3,711 (19.0%) Cost of sales ($m) (468) (420) 11.4% (1,725) (1,746) (1.2%) G&A and distribution ($m) (129) (110) 17.3% (469) (487) (3.7%) G&A and distribution
Slide 26: Summary Balance Sheet
Summary Balance Sheet $ million As at 31 December 2012 As at 31 December 2011 Cash and Cash Equivalents 1,726 1,864 Total Assets: 15,707 17,910 Current Assets 5,697 8,930 Non-current Assets 10,010 8,980 Total Liabilities: 8,492 10,843 Current Liabilities 3,370 5,370 Non-current Liabilities 5,122 5,4
Slide 27: Summary Cash Flow Statement
Summary Cash Flow Statement $ million Q4 2012 Q3 2012 FY 2012 FY 2011 Profit before Financing and Taxation 63 370 1,246 2,852 Cash Generated from Operations 452 769 2,373 3,132 Interest Paid (78) (129) (424) (441) Income Tax Paid (47) (38) (191) (514) Net cash from operating activities – continuing
Slide 28: Disclaimer
Disclaimer These materials are confidential and have been prepared by OAO 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