презентация для инвесторов, ноябрь 2009


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презентация для инвесторов, ноябрь 2009

  1. 1. EVRAZ GROUPCorporate Presentation November 2009
  2. 2. Evraz Group in Brief 2◦ World-class steel and mining company, one of the 15 largest steel companies in the world in 2008◦ 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 2008, Evraz produced 17.7 million tonnes of crude steel, 13.3 million tonnes of pig iron and 16.1 million tonnes of rolled products◦ 2008 consolidated revenue amounted to $20.4 billion◦ 2008 EBITDA reached $6.3 billion
  3. 3. Evraz’s Global Business 3
  4. 4. 9M09 Financial Summary 4US$ mln unless otherwise stated 9M 2009 9M 2008 ChangeRevenue 7,118 17,100 (58)%Adjusted EBITDA* 874 5,951 (85)%Adjusted EBITDA margin 12% 35%Net Debt** 7,256 9,565 (24)%Steel Sales*** (million tonnes) 10.7 13.7 (22)%Source: Management accounts* Adjusted EBITDA represents profit from operations plus depreciation and amortisation, impairment of assets and loss (gain) on disposal of PP&E, forex gains/(losses).** As of the end of the period*** Segment sales volumes to third parties
  5. 5. 9M09 Financial Highlights 5 ◦ Group revenue decreased by 58% vs. 9M08 to Consolidated Revenue and EBITDA US$7.2bn driven largely by decrease in average prices US$ mln and sales volumes of steel products 7,000 6,533 ◦ Geographical diversification of the business helped to 6,000 stabilise operations in crisis environment 5,000 4,000 3,280 ◦ International assets performed well in the first quarter 3,000 2,251 2,413 2,226 2,479 with subsequent deterioration due to the later start of 2,000 destocking in the mature markets 1,000 372 305 163 406 0 ◦ Recovery of export demand for semi-finished steel 3Q08 4Q08 1Q09 2Q09 3Q09 helped to fully utilise Russian assets as from 1 July Revenue EBITDA 2009 9M09 Steel Segment Sales Volumes by Product 9M09 Steel Segment Revenue by Product‘000 tonnes US$ mln 15,000 13,673 516 15,000 13,498 12,500 579 528 2,146 10,707 296 12,500 1,082 10,000 1,830 528 2,628 1,495 10,000 7,500 1,166 1,737 4,439 7,500 5,866 3,110 158 5,000 4,415 822 5,000 1,040 820 2,500 4,163 4,112 2,500 1,544 3,108 0 1,482 0 9M08 9M09 9M08 9M09 Semi-finished Construction Railway Semi-finished Construction Railway Flat-rolled Tubular Other steel Flat-rolled Tubular Other steel Source: Management accounts
  6. 6. Execution of Management Action Plan 6◦ Production optimisation ◦ Shutdown of inefficient capacity ◦ Shift of production to semi-finished products, where demand is relatively high ◦ Take advantage of flexibility between billet and slab production depending on market situation ◦ Full utilisation of available capacity in Russia (13.2 mtpa of crude steel) achieved from 1 July 2009◦ Cost saving measures ◦ Cash cost of one tonne of semi-finished steel products in Russia decreased by 35% ◦ Labour costs decreased by 32% compared to 1H08 ◦ Services and auxiliary materials costs decreased by 42% compared to 1H08◦ Capex savings ◦ Capex in 9M09 was US$321 million (64% down vs. 9M08) out of US$500m FY2009 guidance ◦ Exit from Cape Lambert Project in Australia◦ Financial management ◦ Total debt decreased to US$8.6 billion, net debt decreased to US$7.4 billion as of 15 November 2009 ◦ US$965m raised from concurrent GDR and five-year convertible bond offerings in July 2009 ◦ RUB20 billion (approx. US$688m) raised from five-year bond offering in October 2009 ◦ One-year extension of US$1.8 billion VEB loan due in 4Q09 approved
  7. 7. Maintaining Cost Leadership 7 ◦ Constant review of product and resources flows for Cash Cost*, Slabs & Billets potential efficiency gains US$/t ◦ Mining segment cash costs have reduced significantly: 400 345 375 ◦ Approximately 75% of consolidated cost is rouble 300 248 denominated 221 ◦ Russian-based assets have benefited from 200 declines in utilities and staff costs 100 ◦ Low proportion of fixed costs in the US operations with 0 key raw materials being scrap and our own slab Slab, Russia Billet, Russia 1H08 1H09 * Average for Russian steel mills, excl. SG&A and amortisation Cost of Revenue, Steel Segment Cash Cost, Coal Products and US$ mln 100% Fe Iron Ore Products US$/t7,000 6,172 9% 120 1076,000 7%5,000 4% 90 8% 3,953 73 4%4,000 18% 8% 60 503,000 12% 68% 9% 302,000 5% 301,000 48% 0 0 1H08 1H09 Coal products Iron ore products, 100% Fe Raw materials Transportation Staff costs Depreciation Energy Other 1H08 1H09 %% is given to total Steel Segment Cost of Revenue Source: Management accounts
  8. 8. Debt Maturities and Liquidity Profile 8 ◦ Total debt of approx. US$8.6 billion, net debt of US$7.4 billion as of 15 November 2009 ◦ Debt due by end of 3Q10, after VEB credit facility extension and repayment of the VTB RUB10 billion loan (~US$344 million), is approx. US$1.1 billion ◦ Cash and cash equivalents amounted to approximately US$1.2 billion as of 15 November 2009 Debt Maturities Schedule Breakdown of Debt Breakdown of Debt Debt Maturities Schedule Due by 30 September 2010 US$ mln US$ mln Due by 30 September 20103000 2,4792500 2762000 1,451 1,3671500 1,1851000 705 595 57 509 500 302 805 17 15 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1Q 2Q 3Q 4Q $3.2bn syndicated loan Revolving debt Term loans Source: Management accounts
  9. 9. Recent Capital Market Developments 9◦ One-year extension of VEB US$1.8 billion loan facility initially due in 4Q09 approved◦ RUB20 billion (approx. US$688 million) five-year bond issued in October◦ Evraz signed US$950 million three-year credit facility with Gazprombank in October (currently not utilised)◦ VTB RUB10 billion (approx. US$344 million) loan was repaid in November 2009◦ The remaining current maturities are expected to be covered by free cash flows and refinancing of current debts◦ Evraz is currently in compliance with all its financial covenants◦ On 12 November Evraz received consent from syndicate of bank lenders to amend debt covenants, allowing flexibility to implement current strategy◦ On 12 November Evraz launched consent solicitation from bondholders to amend debt covenants
  10. 10. Market Improvement since the Beginning of 2009 10 Prices for Evraz Steel Products◦ Recovery in prices for semi-finished products is US$/t driven by demand from Asia, the Middle East and North Africa 1,800◦ Expected steelmaking capacity utilisation until 1,500 year-end: ◦ Russia – 100% 1,200 ◦ Ukraine – 100% 900 ◦ North America – 70% ◦ Czech Republic – 65% 600 ◦ South Africa – 70% 300◦ Russian mining assets are running at 100% 0 capacity in coal and 87% in iron ore 1Q09 2Q09 3Q09◦ Steel volumes in 2H09 to grow by approximately 10% compared to 1H09 due to the restart of blast Semi-finished, Russia Construction, Russia furnace Flat-rolled, Europe Flat-rolled, NA◦ Prices for semi-finished products in 2H09 are Tubular, NA Construction, SA higher than 1H09
  11. 11. 3Q09 Operational Results 11◦ In 3Q09, consolidated crude steel output increased by 22% vs. 2Q09 reflecting overall higher production volumes at Evraz’s steel mills (except for Ukraine)◦ Production volumes of rolled products rose on the back of better demand than in 2Q09 ◦ Russia +23% ◦ Europe +38% ◦ North America +8% ◦ South Africa +5%◦ Growth of production in all major product segments vs. 2Q09 except for railway products in Russia and North America and tubular products in North America ‘ Production of Rolled Products ‘000 tonnes +12%* - 8%* 1,500 1,200 - 50%* - 23%* 900 600 - 54%* - 16%* 300 0 Semi-finished Construction Railway products Flat-rolled products Tubular products Other steel products products products 3Q08 2Q09 3Q09 * year-on-year comparison
  12. 12. Steel Production: Russia 12◦ Destocking/restocking cycle in Russian domestic market completed◦ Inventories at a normal level◦ Russian government infrastructure spending, potentially a major driver of demand for construction steel and railway products, is unlikely to have significant impact this year due to seasonality Production of Rolled Products ‘000 tonnes 3,110 129 2,897 64 122 567 2,309 2,364 79 263 72 127 1,992 71 70 43 306 285 936 1,058 50 433 843 798 625 1,293 1,497 1,046 1,084 815 3Q08 4Q08 1Q09 2Q09 3Q09 Semi-finished Construction Railway Flat-rolled Other steel
  13. 13. Steel Production: North America 13◦ Relatively good performance at the beginning of 2009 with subsequent deterioration in line with market trends◦ Stability of demand for large diameter pipes in Canada due to long contracts (Keystone XL project)◦ Destocking in the market is largely over with apparent demand remaining distinctly limited◦ Well-positioned to benefit from expected government infrastructure investments Evraz Inc. NA’s Production of Rolled Products ‘000 tonnes 799 660 253 606 309 490 454 266 117 321 153 183 160 186 115 122 79 112 112 121 103 56 69 65 108 3Q08 4Q08 1Q09 2Q09 3Q09 Construction products Railway products Flat-rolled products Tubular products
  14. 14. Steel Production: Europe and South Africa 14 Production of Rolled Products, Europe Production of Rolled Products, South Africa‘000 tonnes ‘000 tonnes 34414 176 6 264 157 254 149 6 2 5 135 28 8 202 121 192 97 2 55 4 287 7 98 42 74 226 205 12 34 183 168 73 64 53 59 50 44 21 16 17 33 3 3Q08 4Q08 1Q09 2Q09 3Q09 3Q08 4Q08 1Q09 2Q09 3Q09 Other steel products Other steel products Flat-rolled products Flat-rolled products Construction products Construction products Semi-finished products
  15. 15. Mining: Positive Margins Even in the Downturn 15◦ Full self-coverage in raw materials achieved, Mining Segment Performance allowing cash preservation US$ mln◦ Mining segment remained EBITDA positive 2,500 2,000 2,012 even at the lowest levels of raw material prices 1,500◦ Sustainability of vertically-integrated model in 1,000 837 market downturn 652 500 94 0 1H08 1H09 Revenue EBITDA Iron Ore and Coking Coal Coverage* Cost of revenue, Mining Segment‘000 tonnes US$ mln14,000 12,14712,000 11,271 1400 8,859 1,19610,000 8,809 1200 8,000 18% 6,250 1000 9% 6,000 4,915 4,795 3,597 93% 800 16% 685 4,000 99% 600 14% 2,000 133% 20% 14% 79% 0 400 6% 27% 1H08 1H09 1H08 1H09 200 31% 26% 9% 10% Coking coal Iron ore 0 1H08 1H09 Consumption Production Raw materials Transportation Staff costs Depreciation Energy OtherSource: Management accounts %% is given to total Mining Segment Cost of Revenue* Self-coverage is calculated as a sum of coking coal production by Mine 12, Yuzhkuzbassugol production and pro rata to Evraz’s ownership production of Raspadskaya , in coal concentrate equivalent, divided by Group’s total coking coal consumption excluding coal, used in production of coke for sale to third parties
  16. 16. Summary 16◦ Difficult economic situation in the first half of 2009◦ Increased geographical diversification of business helped to stabilise the situation◦ Strengthening global demand for semi-finished steel allowed us to fully utilise Russian steelmaking starting from 1 July 2009◦ Post April 2009 improvement in benchmark prices for semi-finished steel products is reflected only in 2H09 revenues due to the nature of export contracts◦ Management action plan in line with expectations in terms of cost savings and working capital release◦ Decrease in debt level, successful US$965 million capital raising exercise in July and RUB20 billion five-year bond issue in October◦ Completion of destocking in our key markets, alongside improvement in Asian demand, makes us confident of achieving better results in the second half of 2009
  17. 17. Appendices
  18. 18. Revenue by Market 18 First Half of 2008 First Half of 2009 4% 3% 7% 12% 3% 28% 5% 2% 1% 4% 40% 10% 14% 2% 9% 3% 5% 16% 2% 30% Russia Ukraine Other CIS Americas Russia Ukraine Other CIS Americas Europe Middle East China Thailand Europe Middle East China Thailand Other Asian Africa & RoW Other Asian Africa & RoW
  19. 19. Disclaimer 19This 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.
  20. 20. +7 495 232-13-70 IR@evraz.com www.evraz.com