Mechel · RUS:MTLR
Mechel — Q1 2012 Earnings Presentation
15 slides from Mechel's earnings presentation, Jun 20, 2012
Slide 1: 1Q2012 Results Presentation
1Q2012 RESULTS PRESENTATION JUNE 20, 2012
Slide 2: Disclaimer
DISCLAIMER This presentation does not constitute or form part of and should not be construed as, This presentation may contain projections or other forward-looking statements an offer to sell or issue or the solicitation of an offer to buy or acquire securities of regarding future events or the futu
Slide 3: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 4: Segments Overview
SEGMENTS OVERVIEW EBITDA(1) BY SEGMENTS $ Mln Consolidated revenue flat q-o-q amounting to $2,950 mn 1Q11 2Q11 3Q11 4Q11 1Q12 678 612 593 558 567 536 512 463 Net income up 8% q-o-q to $218 mn 361 358 150 153 Mining segment continues to dominate the consolidated 65 49 35 19 35 28 17 1,5 35 EBITDA wit
Slide 5: Mining Segment
MINING SEGMENT REVENUE, EBITDA(1) Market volatility and temporary halt of some underground $ Mln Revenues (lhs) Intersegment revenues (lhs) Adj. EBITDA margin (rhs) mines operations led to Q1 revenue decrease q-o-q to $933 60% mln… 277 251 1 200 264 226 260 45% 40% …with EBITDA posting $358 mln in Q
Slide 6: Mining Segment: External Sales Structure
MINING SEGMENT EXTERNAL SALES STRUCTURE Anthracites and PCI sales down 24% q-o-q as demand in Europe dwindled… Coking coal Anthracites and PCI Coke Coking products Steam coal Iron ore Other 5% 4% 4% 4% 9% …However coking coal sales volumes unchanged q-o-q 10% 12% 3% 12% 2% 4% despite seasonal factor
Slide 7: Steel Segment
STEEL SEGMENT REVENUE, EBITDA(1) Despite low season and harsh weather conditions sales volumes of steel grew by 8% q-o-q … $ Mln Revenues (lhs) Intersegment revenues (lhs) Adj. EBITDA margin (rhs) 8% 75 8% … bringing Revenue up 7% to $1.7 bn 2 000 89 70 7% 79 3% 76 1 500 Cash costs heading down… 3%
Slide 8: Steel Segment: External Sales Structure
STEEL SEGMENT EXTERNAL SALES STRUCTURE Steel prices demonstrate resilience despite low season Semi-finished products Rebar Hardware helping MSG to de-stock Carbon flat Alloyed long Engineering steel Forgings and stampings Stainless flat products Other 10% 10% 8% 10% 3% 3% 3% 3% 6% 7% 8% 7% Share of
Slide 9: Ferroalloys Segment
FERROALLOYS SEGMENT REVENUE, EBITDA(1) Sales volume growth in all ferroalloys products pushed the $ Mln 1Q12 revenue up by 16% q-o-q to $153 mn decreasing gross Revenues (lhs) Intersegment revenues (lhs) Adj. EBITDA margin (rhs) loss by 43% 230 23% 20% 18% 180 71 Cash costs of Cr under control, whil
Slide 10: Ferroalloys Segment: External Sales Structure
FERROALLOYS SEGMENT EXTERNAL SALES STRUCTURE Flat to positive price dynamics across all products support Nickel Ferrosilicon Chrome Chrome ore Other better economics 4% 2% 2% 2% 4% 5% 4% 5% 17% 25% 27% 25% Share of exports to Europe grew to 66% as: 24% 12% 12% 12% • Some sales of FeCr rederected fro
Slide 11: Power Segment
POWER SEGMENT REVENUE, EBITDA(1) Financials improve as due to high season for electricity and $ Mln heat consumption: Revenues (lhs) Intersegment revenues(lhs) Adj. EBITDA margin (rhs) 10% • Revenue up 16% q-o-q 400 10% 136 8% • EBITDA up x9 to $28 mn q-o-q 300 143 7% 6% 124 126 • Net income up to $
Slide 12: Withstanding Market Volatility
WITHSTANDING MARKET VOLATILITY 1Q2012 FINANCIAL PERFORMANCE Q-O-Q HIGHLIGHTS: Reduction of the Mining Segment top line offset by growth in revenue in other segments which translated in flat q-o-q sales at $2,950 mn EBITDA down 14% q-o-q, but margin is at 16% - still one of the most attractive in the
Slide 13: Cash Generation Capacity
CASH GENERATION CAPACITY Measures to adjust production to current demand and optimize the working capital bear fruit: cashflow from operations at $345 mn in Q1 with $118 mn coming from working capital release Operating cashflow exceeds investments, facilitating debt repayment. OPERATING CASH FLOW DY
Slide 14: Debt Profile
DEBT PROFILE FINANCIAL RATIOS $ Mln Total debt reduced in Q2 to date to under $9bn. 5,5 4,4 5,0 4,2 4,2 4,2 4,2 4,5 600 4,0 3,9 3,5 400 3,4 3,5 3,5 3,3 3,0 Financial ratios as of Q1 well within the renegotiated covenant 678 2,5 612 2,0 levels. 200 567 536 1,5 463 1,0 0,5 0 0,0 1Q11 2Q11 3Q11 4Q11 1Q
Slide 15: Financial Results Overview
FINANCIAL RESULTS OVERVIEW US$ MILLION UNLESS OTHERWISE STATED 1Q12 4Q11 CHANGE, % Revenue 2,950 2,929 0.7% Cost of sales (1,975) (1,995) -1.0% Gross margin 33.0% 31.9% Operating profit 314 377 -16.7% Operating margin 10.6% 12.9% Adjusted EBITDA(1) 463 536 -13.6% Adjusted EBITDA(1) margin 15.7% 18.3