презентация для инвесторов, июль 2010

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презентация для инвесторов, июль 2010

  1. 1. Investor PresentationJuly 2010
  2. 2. 2DisclaimerThis 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 oracquire securities of Evraz Group S.A. (Evraz) or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity. No partof this document, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment orinvestment decision whatsoever. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placedon, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of Evraz or any of its affiliates,advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of thisdocument or its contents or otherwise arising in connection with the document.This communication is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) investmentprofessionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) highnet worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all suchpersons together being referred to as “relevant persons”). Any person who is not a relevant person should not act or rely on this document or anyof its contents.This document contains “forward-looking statements”, which include all statements other than statements of historical facts, including, withoutlimitation, any statements preceded by, followed by or that include the words “targets”, “believes”, “expects”, “aims”, “intends”, “will”, “may”,“anticipates”, “would”, “could” or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks,uncertainties and other important factors beyond Evraz’s control that could cause the actual results, performance or achievements of Evraz to bematerially different from future results, performance or achievements expressed or implied by such forward-looking, including, among others, theachievement of anticipated levels of profitability, growth, cost and synergy of recent acquisitions, the impact of competitive pricing, the ability toobtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatilityin stock markets or in the price of our shares or GDRs, financial risk management and the impact of general business and global economicconditions.Such forward-looking statements are based on numerous assumptions regarding Evraz’s present and future business strategies and theenvironment in which Evraz Group S.A. will operate in the future. By their nature, forward-looking statements involve risks and uncertaintiesbecause they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speakonly as at the date as of which they are made, and Evraz expressly disclaims any obligation or undertaking to disseminate any updates or revisionsto any forward-looking statements contained herein to reflect any change in Evraz’s expectations with regard thereto or any change in events,conditions or circumstances on which any such statements are based.Neither Evraz, nor any of its agents, employees or advisors intends or has any duty or obligation to supplement, amend, update or revise any of theforward-looking statements contained in this document.The information contained in this document is provided as at the date of this document and is subject to change without notice.
  3. 3. 3Evraz Group in Brief◦ World-class steel and mining company, 14-th largest steel companies in the world based on 2009 crude steel production volumes◦ Leader in the Russian and CIS construction and railway products markets◦ A lead player in the European and North American plate and large diameter pipe markets◦ One of the world’s lowest cost steel producers due to production efficiency and high level of vertical integration◦ One of the leading producers in the global vanadium market◦ In 2009, Evraz produced 15.3 million tonnes of crude steel, 11.3 million tonnes of pig iron and 14.3 million tonnes of rolled products◦ 2009 consolidated revenue amounted to $9.8 billion◦ 2009 EBITDA was $1.2 billion
  4. 4. 4Evraz’s Global Business
  5. 5. 5Sound Long-Term Strategy Long and railway product leadership in Russia and the CIS ◦ Maintained leadership in Russia’s construction steel market ◦ Rail mill reconstruction designed to produce high-speed rail and increase rail production volumes Strong presence in international flat and tubular markets ◦ Continuous integration of international assets ◦ Full order book at Canadian tubular plant for 2010 Low cost leadership position ◦ Cost of revenue reduced by 35% compared to 2008 ◦ Closure of inefficient production capacity ◦ Ongoing implementation of cost reduction programs Vertical integration with competitive mining business ◦ Iron ore self-coverage: 96% ◦ Coking coal self-coverage: 117%* ◦ Won tender for Mezhegey coal deposit to maintain coking coal self-coverage going forward Leadership in vanadium business ◦ The sole producer of vanadium-rich ore in Russia ◦ Global footprint: five operating units on four continents ◦ Acquisition of Vanady-Tula, Russia’s largest producer of ferrovanadium, signals further expansion of vanadium-processing capacity * Including 40% equity stake in Raspadskaya coal company, accounted on pro rata basis. Excluding this stake, integration would have been 74%
  6. 6. 61Q 2010 Financial SummaryUS$ mln unless otherwise stated 1Q 2010 1Q 2009 ChangeRevenue 2,970 2,413 23%Adjusted EBITDA* 424 305 39%Adjusted EBITDA margin 14.3% 12.6%Total debt** 7,953 9,041 (12)%Cash and cash equivalents** 793 855 (7)%Capex 160 103 55%Sales volumes*** (’000 tonnes) 3,870 3,456 12%* Adjusted EBITDA represents profit from operations plus depreciation and amortisation, impairment of assets and loss (gain) on disposal of PP&E.** As of the end of the period*** Here and further in this presentation steel segment sales data refer to third parties sales Source: Management accounts
  7. 7. 7 1Q 2010 Performance◦ 1Q10 Mining Segment revenue amounted to Consolidated Revenue and EBITDA US$136m, Vanadium Segment – US$124m and US$ mln 2,970 Other revenues reached US$342m (incl. US$66m 3,000 2,654 2,479 from rendering of services) 2,500 2,413 2,226◦ Iron ore sales (incl. intersegment shipments) 2,000 totalled 4 mln tonnes 1,500◦ Coal sales (incl. intersegment shipments) were 3.8 1,000 500 406 363 424 mln tonnes, including 1.1 mln tonnes of raw coking 305 163 coal, 1.4 mln tonnes of steam coal and 0.9 million 0 1Q09 2Q09 3Q09 4Q09 1Q10 tonnes of coking coal concentrate Revenue EBITDA Steel Sales Volumes Steel Sales ‘000 tonnes US$ mln4,500 3,870 2,368 25004,000 3,456 116 2,023 693,500 121 189 255 2000 62 236 6453,000 392 437 484 4552,500 418 1500 336 3942,000 1,200 812 1000 2881,500 7061,000 379 1,384 1,265 500 500 508 565 0 0 1Q09 1Q10 1Q09 1Q10 Semi-finished products Construction products Railway products Semi-finished products Construction products Railway products Flat-rolled products Tubular products Other steel products Flat-rolled products Tubular products Other steel products
  8. 8. 8 Maintaining Cost Leadership◦ Control of raw material costs through cost efficient Cash Cost*, Slabs & Billets vertical integration US$/t◦ Constant review of product and resources flows to 450 400 402 430 identify potential efficiency gains 394 420 350◦ Approximately 75% of consolidated cost is rouble 300 253 285 denominated 250 268◦ In 2009, Russian-based assets have benefited 200 224 from declines in utilities and staff costs 150 1H08 2H08 1H09 2H09◦ In 2H09 costs were negatively affected by raising Slab Billet scrap prices * Average for Russian steel mills, integrated cash cost of production, EXW Consolidated Cost of Revenue, 2009 Cash Cost, Russian Coal and Iron Ore Products 5% 6% US$/t 17% 70 10% 63 60 56 5% 17% 50 47 6% 43 46 50 8% 40 8% 4% 30 35 11% 3% 30 Iron ore Coking coal Scrap 20 Ferroalloys Purchased semis Auxiliary materials 1H08 2H08 1H09 2H09 Electricity Natural gas Staff costs Transportation Depreciation Other Coal products Iron ore products 58% Fe Source: Management accounts
  9. 9. 9 Balanced Debt Maturity Profile◦ Total debt of approx. US$8.1bn, net debt of US$7.4bn as of 30 June 2010◦ RUB15bn (equivalent US$500m) 3-year bonds issued in March 2010, fully swapped into US$ to eliminate RUB currency exposure◦ In May 2010, Evraz drew down US$950m 5-year Gazprombank loan and repaid US$1,007m VEB loan◦ Adequate consolidated cash balance of ca.US$700m always maintained Debt Maturities Schedule Debt Maturities Schedule Breakdown of Short-term Debt Breakdown of Short-term Debt (as at 30 June 2010) (as at 30 June 2010) (as at 30 June 2010) (as at 30 June 2010) US$ mln US$ mln 2 000 1,778 1 800 1,543 1 600 1,419 593 1 400 786 1 200 1,085 996 1 000 800 721 600 509 400 200 15 11 0 280 2010 2011 2012 2013 2014 2015 2016 2017 2018 Syndicated loans Overdrafts Russian bilateral loans Q1 Q2 Q3 Q4 Source: Management accounts
  10. 10. 10Increase in Export and Geographic Diversification◦ In 2009, sales to customers outside Russia increased Steel Products Sales Volumes by Product Steel Products Sales Volumes by Product from 61% to 71% of total revenues ’000 tonnes◦ 2009 sales of steel products to Asia exceeded sales to 6,000 5,188 5,273 5,314 Russia and the CIS, reflecting production flexibility and 4,218 increasing cost competitiveness 4,000◦ Geographical diversification of the business helped to 2,367 2,647 2,110 stabilise operations in crisis environment 2,000 1,588 919 667◦ Change in the product mix towards semi-finished 586 426 0 products had limited effect on margins due to export Semi- Construction Railway Flat-rolled Tubular Other steel parity pricing of Russian domestic finished steel finished 2008 2009 products Steel Products Sales by Market Steel Products Sales by Market Steel Products Sales by Operations Steel Products Sales by Operations’000 tonnes ’000 tonnes8,000 16,000 6,569 12,393 5,6656,000 12,000 10,737 4,465 4,1234,000 8,000 2,723 1,889 2,0732,000 1,215 4,000 2,699 712 642 663 564 2,075 1,261 885 668 585 0 0 Russia CIS Europe Americas Asia Africa & Russian & North American European South African RoW Ukrainian 2008 2009 2008 2009
  11. 11. 11 2Q 2010 Operational Results◦ In 2Q10, consolidated crude steel output was 4.3 mt, +26% vs. 2Q09 and +7% vs. 1Q10◦ Consolidated production of semi-finished products was down 18% vs. 2Q09 and flat q-o-q while production of higher margin products grew, in particular (vs. 2Q09) ◦ construction products: Russia: +5%, Europe: + 192%, NA +44% ◦ railway products: Russia: +51% ◦ flat-rolled products: Europe: +63%, NA: +79% ◦ tubular products: NA: +42% Production of Rolled Products‘000 tonnes1,400 ‘ +26% -18%1,2001,000 1,210 1,197 +56% 800 +29% 600 1,197 959 977 +42% 941 632 636 +24% 400 525 406 451 408 200 193 215 151 139 147 173 0 Semi-finished products Construction products Railway products Flat-rolled products Tubular products Other steel products 2Q09 1Q10 2Q10 % - year-on-year comparison
  12. 12. 12 2Q10 Production of Rolled Products by Assets Russia North America‘000 tonnes ‘000 tonnes3,500 2,897 2,845 2,8563,000 2,596 700 627 2,364 122 125 149 609 79 76 128 71 6002,500 263 321 498 127 90 430 490 71 360 500 454 193 2152,000 285 936 117 868 139 923 400 1531,500 798 913 300 239 206 186 1951,000 115 200 1,497 1,455 1,282 79 90 94 500 1,084 1,106 121 71 100 65 108 92 104 94 0 0 2Q09 3Q09 4Q09 1Q10 2Q10 2Q09 3Q09 4Q09 1Q10 2Q10 Semi-finished Construction Railway Flat-rolled Other steel Construction products Railway products Flat-rolled products Tubular products Europe South Africa ‘000 tonnes ‘000 tonnes 350 330 300 300 264 284 7 248 250 4 250 6 6 192 200 175 200 149 157 6 154 141 7 274 150 5 8 150 246 7 226 205 61 107 168 100 98 98 85 100 50 55 50 62 33 33 36 49 34 50 48 49 0 17 0 2Q09 3Q09 4Q09 1Q10 2Q10 2Q09 3Q09 4Q09 1Q10 2Q10 Construction products Flat-rolled products Other steel products Construction products Flat-rolled products Other steel products
  13. 13. 13 Key Market Developments◦ Prices for semi-finished steel are driven by input Evraz Selling Prices costs and by demand from emerging markets in US$/t Asia, the Middle East and North Africa 900◦ 800 International prices for semi-finished steel 700 declined from May, having stabilised in July 600◦ Russian domestic demand for construction steel in 500 400 2010 expected to be 5-10% higher than in 2009 300◦ Expected steelmaking capacity utilisation in 3Q10: 200 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 ◦ Russia – to remain >90% Slabs, Russia, export* Billets, Russia, export* ◦ North America >90% Rebars, Russia, FCA Plate, North America, FCA ◦ Czech Republic – temporarily closed since July * Weighted average contract prices ◦ South Africa – 70%◦ Russian mining assets are running at 85% Vanadium Prices, FeV, LMB capacity in coal and 90% in iron ore US$/kg V◦ Vanadium expected to perform better than steel due to increase of vanadium usage rates in the 40 emerging markets’ steel production sector closer 35 to the levels of industrially developed countries 30 25 20 15 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10
  14. 14. 14Key Investment Projects ◦ CAPEX in 2010 expected to be around US$800m (vs. US$441m in 2009) ◦ Approximately US$450m of 2010 CAPEX to be directed to increasing productivity and development projects, key projects being: Cum CAPEX byProject Total CAPEX 2010 CAPEX Project Targets 31.12.09Reconstruction of rail mill at US$440m ◦ Capacity of 950k tonnes of high-speed rails, including 450k tonnes US$30m US$220m of 100 metre railsNKMK ◦ On-stream by 2013 ◦ Production of higher-quality railsReconstruction of rail mill at US$55mNTMK US$28m US$27m ◦ 550k tonnes capacity ◦ On-stream by 2012 ◦ Lower coke consumption from 420 to 320 kg/tonnePulverised coal injection (PCI) US$320mat NTMK and ZSMK US$0m US$10m ◦ No need for gas consumption ◦ On-stream by 2013 ◦ Modernisation of productionBOF workshop reconstruction US$260mNTMK US$230m US$20m ◦ Increasing capacity from 3.8 to 4.2 mtpa ◦ On-stream by 2010 ◦ Modernisation of productionReconstruction of CCM Slab№3 NTMK US$60m US$5m US$40m ◦ Further increase in steelmaking capacity from 4.2 to 4.5 mtpa ◦ On-stream by 2010Reconstruction of wheel &tyre mill (heat treatment US$100m US$87m US$13m ◦ Production of higher-quality wheelsshop) NTMK ◦ On-stream by 2010Development of Mezhegey Less than US$50m, ◦ Maintaining self-sufficiency in high-quality hard coking coal after TBD US$1m depletion of existing depositscoal deposit including license cost ◦ On-stream by 2015
  15. 15. 15Outlook for 2010 ◦ Pricing affected by raw material costs, growth in emerging markets and moderate recovery in mature markets ◦ Russian and Ukrainian mills expected to continue running at high operating rates, utilisation of overseas assets increased in response to measured improvements in demand ◦ Steel sales redirected from export market to Russian domestic market following gradual demand improvement ◦ Market situation remains volatile ◦ Favourable fundamental trends being offset by lag effect between raw material price increase and delayed growth of steel sales prices ◦ Global demand for long products is expected to continue to strengthen on the back of infrastructure investments driven by various governments’ stimulus packages, designed to combat economic recession ◦ Outlook for 2Q 2010 ◦ 2Q10 EBITDA is expected to be within the range of US$725-825m
  16. 16. +7 495 232-13-70 IR@evraz.com www.evraz.com

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