Evraz Plc · LSE:EVR
Evraz — Investor Presentation (May 2013)
26 slides from Evraz's investor presentation, May 2013
Slide 1: Corporate Presentation
Corporate Presentation May 2013
Slide 2: Disclaimer
Disclaimer This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of EVRAZ plc (“EVRAZ”) or any of its subsidiaries in any jurisdiction (including, without limitation, EVRAZ Group S.A.)
Slide 3: EVRAZ in brief
EVRAZ in brief One of the largest vertically integrated steel and mining companies in the world Leader in the Russian and CIS construction and railway product markets No 1 producer of rails and large diameter pipes in North America One of the leading producers in the global vanadium market
Slide 4: EVRAZ's global business
EVRAZ’s global business Global Vertically Integrated Steel, Mining and Vanadium Business with Strong Positions in Highly Attractive Markets 346 Russia/CIS 2,680 394 7,370 986 Europe 211 660 3,185 North America Asia 426 South America Africa Steel mills Steel Sales Volume Breakdown (2012) Iron ore min
Slide 5: Q1 2013 steel production
Q1 2013 steel production Output of total steel products increased by 11% in Q1 EVRAZ average selling prices, $/t (ex works) 2013 vs. Q4 2012 mainly due to lower downtime at Product group steelmaking facilities Q1 2013 Q4 2012 Q1 2012 Consolidated production of finished steel goods was Semi-finis
Slide 6: Mining: Coal
Mining: Coal In Q1 2013, raw coking coal production at Yuzhkuzbassugol increased by 14% compared to Q4 2012 due to increased production at the Alardinskaya and the Yesaulskaya mines, launch of a new longwall at the Osinnikovskaya mine and commissioning of the Yerunakovskaya VIII mine Output of R
Slide 7: Mining: Iron ore
Mining: Iron ore Overall production of saleable iron ore products by the Company remained largely flat in Q1 2013 compared to Q4 2012. In Q1 2013, production of saleable concentrate in Russia decreased by 8% as a result of lower Fe grades in the ore mined at EVRAZ VGOK and preparation for the cl
Slide 8: Vanadium
Vanadium Ferrovanadium prices (FeV), $/kg contained V In Q1 2013, total production of primary vanadium (slag) increased by 4% mainly as a 31.6 30.9 result of higher crude steel production at 30.2 30.0 31.2 31.0 31.1 28.9 EVRAZ Highveld Steel and Vanadium 30.4 29.5 28.1 28.6 Total ferrovanadium p
Slide 9: Capex excluding Raspadskaya
Capex excluding Raspadskaya 2012 capex was $1,261m in line with budget and Company’s guidance 2013 capex estimate is $1.1bn. Organic expansion of Raspadskaya can contribute up to $150m of additional capex Growth in mining capex will be driven by the development of Mezhegey hard coking coal dep
Slide 10: Key investment projects
Key investment projects Total Remaining capex*, capex at 2013 capex Project $m 1/01/2013*, $m Budgeted*, $m Project targets Steel 248 Increase of production capacity to 950 ktpa, including 450 ktpa of 100 Rail mill modernisation at 490 63 63 metre rails EVRAZ ZSMK Launched in January 2013. Ramp-
Slide 11: Update on rail and beam mill and PCI projects
Update on rail and beam mill and PCI projects Rail and beam mill at ZSMK Launched in January 2013, first 100 metre rails produced in March 2013 Current production rate 40 kt/month, plan to reach design capacity of 100 kt/month in Q1 2014 (including 79 kt/month of rails) Certification for 100
Slide 12: Key market developments and outlook
Key market developments and outlook Steel product prices (domestic markets), $/t Global markets remain volatile resulting in ongoing uncertainty and low visibility in EVRAZ’s key markets 900 800 Full utilisation of Russian steel making 700 capacities continues 600 High level of North American
Slide 13: Appendix
Appendix
Slide 14: HSE Performance
HSE Performance Safety remains a key priority Lost Time Injury Frequency Rate (LTIFR)* 2.23 Growth of LTIFR partially reflects more 1.86 comprehensive and accurate statistics and zero tolerance approach to concealment of accidents Falls and equipment related injuries contribute to 42.5% of all
Slide 15: 2012 summary
2012 summary US$ million unless otherwise stated 2012 2011 Change Revenue 14,726 16,400 (10)% EBITDA* 2,012 2,898 (31)% EBITDA margin 13.7% 17.7% (4)% Net profit/(loss) (335) 453 n.a. Operating cash flow 2,143 2,647 (19)% Capex 1,261 1,281 (2)% Net debt** 6,184 6,442 (4)% Short-term debt** 1,862 626
Slide 16: 2012 financial highlights
2012 financial highlights Consolidated revenue by segment, $m Decrease in revenue driven by a combination of lower steel and raw materials (iron ore and 16,400 coking coal) prices as well as by lower mining 966 665 14,726 1,046 sales volumes 3,784 2,650 520 Eliminations Other operations 2012 EBI
Slide 17: Steel products: sales by market
Steel products: sales by market kt $m 6,722 6,570 5,443 5,126 2011 2011 2012 2012 3,249 3,276 3,020 3,093 2,766 2,746 1,988 1,909 1,562 1,450 1,348 1,006 849 802 716 645 573 475 486 357 Russia Americas Asia Europe CIS Africa & RoW Russia Americas Asia Europe CIS Africa & RoW Investor Presentation, M
Slide 18: Focus on cost efficiencies
Focus on cost efficiencies Lower raw material costs (-20%) due to lower purchase prices of iron ore, coking coal and scrap Growth of intragroup re-rolling of slabs led to 39% decrease of cost of purchased semi-products Cost of goods for resale increased by 55%, as third party products were pur
Slide 19: Cost Structure by Segment
Cost Structure by Segment Cost structure of Steel segment, $m Cost structure of Mining segment, $m 12,375 2,363 2,306 10% 11,154 Other 8% 16% 21% 21% 4% Energy 8% Depreciation Other 9% 11% 11% 4% 4% 6% Staff costs Energy 10% 7% Transportation 22% 5% 26% Depreciation 4% Semi-finished products 16% 6%
Slide 20: Performance by Regions
Performance by Regions EBITDA, EVRAZ Russia, $m EBITDA, EVRAZ North America, $m 465 2,458 1,952 340 2011 2012 2011 2012 EBITDA, EVRAZ Ukraine, $m EBITDA, EVRAZ Europe, $m EBITDA, EVRAZ South Africa, $m 114 26 78 (2) (11) (67) 2011 2012 2011 2012 2011 2012 * Consolidated EVRAZ plc EBITDA also include
Slide 21: 2012 FCF generation
2012 FCF generation Positive cash flow despite market weakness Working capital release of $441m (excluding income tax) due to falling cost of inventory, improved recoverability of taxes and related party receivables 2012 cash flow generation supported by proceeds from EvrazTrans sale ($306m) a
Slide 22: Liquidity and debt maturity profile
Liquidity and debt maturity profile Major 2013 maturities are already paid-out and $950 million PXF facility pre-paid in full Successful placement of $1 billion Eurobond issue in April 2012 maturing in 2020 and bearing 6.5% p.a. Continuous focus on debt portfolio optimisation: RUB bond proce
Slide 23: EBITDA
EBITDA US$ million 31 December 31 December 2012 2011 Consolidated EBITDA reconciliation Profit from operations 243 1,860 Add: Depreciation, depletion and amortisation 1,259 1,153 Impairment of assets 413 104 Loss on disposal of property, plant & equipment 56 50 Foreign exchange (gain) loss 41 (269)
Slide 24: Net debt
Net debt US$ million 31 December 31 December 2012 2011 Net debt calculation Add: Long-term loans, net of current portion 6,373 6,593 Short-term loans and current portion of long-term loans 1,783 613 Finance lease liabilities, including current portion 13 39 Loans of disposal groups classified as hel
Slide 25: Quarterly steel products output by assets
Quarterly steel products output by assets Russia, Kt North America, Kt 4,500 1,200 4,000 1,000 3,500 2,807 2,564 2,713 2,472 2,640 666 678 642 676 717 3,000 800 150 120 149 138 2,500 104 84 74 269 132 64 261 435 600 211 231 356 71 250 206 210 245 2,000 1,069 1,127 993 400 1,500 1,037 1,049 281 261 2
Slide 26: Contact details
London +44 207 832 8990 Moscow +7 495 232 1370 [email protected] www.evraz.com