Cognor Holding Sa · GPW:COG

Cognor Holding Sa — Q3 2017 Earnings Presentation

20 slides from Cognor Holding Sa's earnings presentation, Nov 14, 2017

  1. Slide 1: Q3 2017 Financial results

    Q3 2017 Financial results 14 November 2017

  2. Slide 2: Disclaimer

    Disclaimer This presentation (the “Presentation”) was prepared by Cognor Holding S.A., with its seat in Poraj (the “Company”), in connection with the presentation of the financial results for the third quarter (3Q) of 2017. Neither this Presentation nor any copy of this Presentation may be copied, d

  3. Slide 3: Management team

    Management team Przemysław Sztuczkowski Przemysław Grzesiak Krzysztof Zoła Dominik Barszcz Founder, CEO Deputy CEO Board Member, CFO Board Member Responsibility Responsibility Responsibility Responsibility  Strategic development  Production management; planning  Cooperation with financial institu

  4. Slide 4: Q3 2017 – Key highlights

    Q3 2017 – Key highlights  high level of capacity utilization; an increase of crude steel production by 6,3% and 9.6% of finished products. Total shipments up by 46.5%.  increase of prices by an average of 11.0% and total revenues growth by 58.2%.  improvement of conversion spreads for billets by

  5. Slide 5: Cognor Holding | Key figures

    Cognor Holding | Key figures 155k tons PLN 490 mn PLN 28 mn 11.0% qoq PLN -4.6 mn Q3 2017 Production of crude steel Total sales revenue for Q3 2017 EBITDA margin Stronger EBITDA Net loss in Q3 2017 at in Q3 2017 Q3 2017 at 5.7% compared to Q3 2016 -0.9% margin; incl. 7.9 mn of FX losses 629k tons PL

  6. Slide 6: Attractive recent steel market developments are to support the Group's further growth…

    Attractive recent steel market developments are to support the Group’s further growth… EAF steel production process is more advanced and uses cost-effective technology (better energetic balance)… Market prices iron ore coking coal scrap metal 500 500 Comparison of feedstock costs of steel USD/tonne

  7. Slide 7: Group's key business segments – Q3 2017 operating results

    Group’s key business segments – Q3 2017 operating results 154 823 tons 188 854 tons total billets production total scrap purchased 120 256 tons 175 352 tons total billets used internally total scrap used internally FINISHED PRODUCTS 144 606 tons total sales volume of finished products Source: Compan

  8. Slide 8: Ferrostal – volumes, prices and spreads

    Ferrostal – volumes, prices and spreads Ferrostal Steel mill Ferrostal: Billets and product volumes (tonnes) 2016 Q3 2016 Q3 2017 Ferrostal: Rebars prices and spreads (PLN/tonne) Scrap metal - average purchase price 755 752 1,036 450,000 2,100 Billets - average sales price 1,491 1,582 1,851 400,000

  9. Slide 9: HSJ – volumes, prices and spreads

    HSJ – volumes, prices and spreads HSJ Steel mill HSJ: Billets and product volumes (tonnes) 2016 Q3 2016 Q3 2017 HSJ: SQ bars prices and spreads (PLN/tonne) Scrap metal - average purchase price 823 772 1,102 250,000 3,600 Billets - average sales price 1,775 1,784 2,273 200,000 Billets - volume 30,159

  10. Slide 10: Key business segments | Collection of metal scrap

    Key business segments | Collection of metal scrap 1 Mainly internal use MATERIALS: SCRAP Application Form Q3 2017 comments  Scrap purchases in Q3 2017 increased by 9% yoy,  Materials used in further  Ferrous scrap (for internal use) with internal use 7% higher than in Q3 2016 phases of steelmakin

  11. Slide 11: Key business segments | Billets – production of semi-products

    Key business segments | Billets – production of semi-products 2 Internal use and external sales SEMI-FINISHED PRODUCTS: BILLETS Application Form Q3 2017 comments  Billet production in Q3 2017 up by 6% yoy  Semi-finished products to be  Square billets  EAF cost position allowed for higher billet

  12. Slide 12: Key business segments | Finished products

    Key business segments | Finished products 3 External sales FINISHED PRODUCTS: LONG AND FLAT PRODUCTS Application Form Q3 2017 comments  Wide application in numerous  Flat bars, square bars, plain bars, angles  Sales volume of rebars increased respectively by industries (automotive,  rebars 51% y

  13. Slide 13: Cognor's financial results

    Cognor’s financial results Revenue (PLN mn) EBITDA, Net Profit (PLN mn) +28% 1,423 101 101 1,365 1,352 95 8.1% 1,324 7.6% 72 7.1% 7.0% 7.0% 1,035 5.7% 49 32 +58% 25 28 490 3.6% 12 6 2 6 310 -5 -14 2014 2015 2016 1-3Q16 1-3Q17 3Q16 3Q17 2014 2015 2016 1-3Q16 1-3Q17 3Q16 3Q17 EBITDA Net profit EBITDA

  14. Slide 14: Cognor's leverage and profitability

    Cognor’s leverage and profitability Cognor’s Leverage Ratios Cognor’s Profitability Ratios 8.5x 12.5% 5.6x 4.6x 4.7x 3.6% 2.9% 2.5% ROA 0.6% 0.9% 0.6% 0.2% 2.9x 3.0x ROE 2.5x 2.5x 2.5x 2.0x -1.6% 2014 2015 2016 3Q16 LTM 3Q17 LTM -7.8% 2014 2015 2016 3Q16 LTM 3Q17 LTM Net debt/EBITDA Net Debt/Equity

  15. Slide 15: Cognor's working capital

    Cognor’s working capital Cognor’s liquidity and efficiency ratios Cognor’s working capital requirement structure [PLN mn] 2014 2015 2016 3Q16 3Q17 Inventories +226 Liquidity ratio 1.8x 1.8x 1.5x 1.8x 1.6x Quick ratio 0.8x 0.7x 0.5x 0.8x 0.8x Trade receivables +181 Inventories turnover 81 76 90 71 53

  16. Slide 16: Consolidated income statement

    Consolidated income statement '000 PLN 1-3Q 2016 1-3Q 2017 Q3 2016 Q3 2017 Revenue & Gross profit Revenue 1 034 924 1 323 885 309 745 490 044  The best quarterly revenue figure in Group’s Cost of sales -929 325 -1 173 311 -273 480 -443 892 history due to record breaking shipments (up by Gross profi

  17. Slide 17: Consolidated balance sheet

    Consolidated balance sheet ASSETS ['000 PLN] 3Q 2016 3Q 2017 A. TOTAL NON-CURRENT ASSETS 417 363 402 490 Non-current assets I. Intangible assets 11 520 12 467 II. Property, plant and equipment 284 281 281 147  …value decreased by PLN 14.9 mn primarily due to III. Other receivables 106 194 the depre

  18. Slide 18: Consolidated cash flow and key metrics

    Consolidated cash flow and key metrics Cash flows  Operating activities brought strong growth in cash CASH FLOW ['000 PLN] 1-3Q 2016 1-3Q 2017 Q3 2016 Q3 2017 inflows in 3Q17 due to good EBITDA and WC A. OPERATING ACTIVITIES 71 522 141 097 17 227 78 982 release  Investing activities cash flows les

  19. Slide 19: Consolidated EBITDA/Net Profit adjustments

    Consolidated EBITDA/Net Profit adjustments DESCRIPTION 1-3Q 2016 1-3Q 2017 Q3 2016 Q3 2017 ‘000 PLN Reported EBITDA 72 303 100 997 24 986 27 737 Non-recurring items including: 877 -491 -545 162 - costs of sales 0 0 0 0 - other income 516 908 225 129 - distribution expenses 223 -434 31 90 - administr

  20. Slide 20: 4Q 2017 – outlook (as compared to 3Q 2017)

    4Q 2017 – outlook (as compared to 3Q 2017)  Capacity utilization rates higher as summer maintenance period is over  Good demand, high shipments and sales  Product prices to stabilize after Q3 growth; scrap metal cost down  Conversion spreads improvement as Q3 product price increases become refle

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