Upload
evrazcompany
View
389
Download
2
Embed Size (px)
Citation preview
6 February 2009
EVRAZ GROUPTroika Dialog:
The Russia Forum 2009, Moscow
02DisclaimerThis 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 Group S.A. (Evraz) or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity. No part of this document, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, 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 this document 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) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). Any person who is not a relevant person should not act or rely on this document or any of its contents.
This document contains “forward-looking statements”, which include all statements other than statements of historical facts, including, without limitation, 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 be materially different from future results, performance or achievements expressed or implied by such forward-looking, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or GDRs, financial risk management and the impact of general business and global economic conditions.
Such forward-looking statements are based on numerous assumptions regarding Evraz’s present and future business strategies and the environment in which Evraz Group S.A. will operate in the future. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speak only as at the date as of which they are made, and Evraz expressly disclaims any obligation or undertaking to disseminate any updates or revisions to 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 the forward-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.
03
Advance long product leadership in Russia and CIS
Expand presence in international plate markets
Enhance cost leadership position
Complete vertical integration and competitive mining platform
Achieve world leadership in vanadium business
Evraz Strategy
514
387
325
260216 214 197 190 180 178 167
144 139
8863
0
100
200
300
400
500
600
CSN
NLM
K
Usim
inas
Evra
z
POSC
O
Nip
pon
Stee
l
Gerd
au
Chin
a St
eel
MM
K
Baos
han
Stee
l
Arce
lorM
ittal
Nuc
or
Mec
hel S
teel
US S
teel
Maa
nsha
n St
eel
Sources: IISI, Renaissance Capital estimates
Our Vision is to be a world class steel and mining company and one of the Top 5 most profitable steelmakers globally by ROCE and EBITDA margin
2007 EBITDA per Tonne of Steel SalesUS$
04
◦ Revenue for the nine-month period was US$17,100 million ◦ EBITDA was US$5,951 million with EBITDA margin of 34.8%◦ Depreciation amounted to US$869 million◦ Interest expense was US$472 million◦ Total debt as of September 30, 2008 amounted to approximately US$10,214 million including
US$4,143 million of short-term loans and current portion of long-term loans◦ Cash and cash equivalents at the end of the period stood at approximately US$623 million◦ Capital expenditures amounted to US$900 million in 9M08◦ Total steel products sales in 9M08 amounted to 13.7 million tonnes
Revenue by ProductUS$ mln
Rolled Products Sales Volumes*‘000 tonnes
9M08 Financial Highlights
516
2,146
1,830
4,439
4,163
579
Semi-finished products Construction products Railway productsFlat-rolled products Tubular products Other steel products
528
2,628
1,7374,415
3,1081,082
Semi-finished products Construction products Railway productsFlat-rolled products Tubular products Other steel products
*Excluding inter-company sales
05
FY08 Rolled Products Production by Region 4Q08 Rolled Products Production
FY08 Crude Steel Production by Region◦ FY08 crude steel production rose 7.1% to 17,674 million tonnes vs 16,509 million tonnes in 2007
◦ FY08 rolled products output was up 5.4% to 16,082 million tonnes mainly due to consolidation of new assets in Ukraine and North America
◦ in 4Q08 vs 3Q08 crude steel and rolled products production fell 33.5% and 35.1%, respectively, due to the global financial downturn and subdued demand
‘000 tonnes
4Q and FY08 Operational Results
635
781
545
512
309117 45
Pig iron Semi-finished productsConstruction products Railway productsFlat-rolled products Tubular productsOther steel products
‘000 tonnes
0
1,000
2,000
3,000
4,000
5,000
6,000
2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008
Semi-finished Construction Railway Flat Tubular Others
Russia Ukraine Europe North America South Africa
‘000 tonnes
13,082
1,167
802
1,908796
Russia Ukraine Europe North America South Africa
06
Construction Products Flat-Rolled & Tubular non-Russian
◦ The prices for steel products started to depreciate since 3Q08 on the back of global financial downturn leading to sluggish demand on most steel markets
◦ Steep fall in prices for construction products observed in Russia (-56% vs 3Q08), Ukraine (-51%), Europe (-16%), North America (-22%) and South Africa (-17%)
◦ The prices for plate and tubular goods in North America levelled out after a 1.5-year period of growth remaining at a relatively high level
◦ The prices for flat-rolled products in Europe and South Africa declined 17% and 24%, respectively
US$/tUS$/t
Price dynamics
400
600
800
1,000
1,200
1,400
1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08
Russia Ukraine Europe North America South Africa
500
800
1,100
1,400
1,700
2,000
2,300
1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08
Flat, Europe Flat, NA Tubular, NA Flat, SA
07
‘000 tonnes
Evraz Russian Market Rolled Products Output
◦ Total Russian crude steel production in 4Q08 amounted to 2.2 million tonnes (-39% vs 3Q08)
◦ Rolled products production was down 36% to 2 million tonnes reflecting low demand from end users amid aggravated global economic conditions:◦ Construction products volumes were lower by 41%◦ Semis production declined by 37%◦ Production of r/w products decreased by 24%
Russian Operations
300
600
900
1,200
1,500
01-07 04-07 07-07 10-07 01-08 04-08 07-08 10-08
H-beams R ebars (C PT , Moscow)C hannel 10-16 (C PT , Moscow) T urkey Rebars, export (FO B)
Price EnvironmentUS$/t
Source: Metal-Courier
Construction Products Consumption and Russia’s GDP Growth
‘000 tonnes
1,2931,058
567
64 129
815625
433
50 700
300
600
900
1,200
1,500
Semi-finished Construction Railway Flat-rolled Other steel
3Q2008 4Q2008
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2003 2004 2005 2006 2007 20080.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Rebars Angles, channels, sections G DP growth
08
‘000 tonnes
Rolled Products Production, North America
N.American, European and S.African Operations
44
287
1421
205
28
0
50
100
150
200
250
300
Construction Flat-rolled Other steel3Q2008 4Q2008
103122
321
253
56
112
183
309
0
50
100
150
200
250
300
350
Construction Railway Flat-rolled Tubular3Q2008 4Q2008
‘000 tonnes
Rolled Products Production, Europe
◦ North America: ◦4Q08 rolled products output went down by 17% only vs3Q08 despite tough market environment◦4Q08 tubular products output increased by 22% due to IPSCO Canada consolidation
◦ Europe: ◦In 4Q08 total rolled products output decreased by 26% vs3Q08 reflecting compressed demand
◦ South Africa:◦4Q08 rolled products production went down 23% q-on-q
Rolled Products Production, South Africa‘000 tonnes
73
97
6
53
74
8
0
20
40
60
80
100
Construction Flat-rolled Other steel3Q2008 4Q2008
09Current Debt Portfolio
3,860
1,568
802 747
1,733
23
764
13 11
700
0
1,000
2,000
3,000
4,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
◦ The total debt amounted to US$10,222 million, including US$3,860 million of short-term debt maturing in 2009
◦ 92.4% of the total debt is denominated in USD, 3.5% in RUR and 3.8% in EUR; for short-term debt it is 85.4% in USD, 9.3% in RUR and 4.8% in EUR
Debt Maturity Schedule Short-Term Debt Structure
US$ mln US$ mln
1,444
300
805
1,311
Eurobond 2009Syndicated $3.2bn loan repayments Term loansRevolving debt
As of 31 December 2008:
010
◦ In December 2008, Vnesheconombank of Russia approved US$1.8 billion of credit lines to refinance Evraz’s short-term debt; US$1 billion has been withdrawn, and the remaining US$800 million will be used for quarterly payments on the $3.2 billion syndicated loan.
◦ Evraz and TMK completed the transaction on the sale to TMK of the remaining 49% in NS Group at the price of US$508 million that will be kept in reserve against future interest payments on the Company’s debt in 2009.
◦ Evraz gave up the right for the licence to develop the Mezhegey coal deposit in view of the weak coal market and intends to develop its existing resources of coal, in particular at Yuzhkuzbassugol.
◦ Evraz’s Board of Directors approved a change in the dividend policy: beginning with the final dividend for 2008, Evraz will pay dividends not exceeding 25% of its consolidated net income, as calculated under IFRS.
◦ EGM held on January 30, 2009, approved the voluntary partial scrip dividend in respect of the 2008 interim dividends:
◦ Part of the dividend in the amount of US$2.25/share (US$0.75/GDR) will be paid in new shares issued by the Company at US$22.50/share (7.50/GDR) if the holders have so elected
◦ Cash payment to the shareholders who voted against the option or abstained will be made within two weeks of the EGM
Recent Developments
011Evraz’s Global Business
+7 495 232-1370 [email protected]
www.evraz.com