Aperam Investor Presentation_Q3 2014

Third quarter 2014
November 6, 2014
© Aperam 1
Disclaimer
Forward-Looking Statements
This document may contain forward-looking information and statements about Aperam and its subsidiaries. These
statements include financial projections and estimates and their underlying assumptions, statements regarding
plans, objectives and expectations with respect to future operations, products and services, and statements
regarding future performance. Forward-looking statements may be identified by the words “believe,” “expect,”
“anticipate,” “target” or similar expressions. Although Aperam’s management believes that the expectations
reflected in such forward-looking statements are reasonable, investors and holders of Aperam’s securities are
cautioned that forward-looking information and statements are subject to numerous risks and uncertainties, many
of which are difficult to predict and generally beyond the control of Aperam, that could cause actual results and
developments to differ materially and adversely from those expressed in, or implied or projected by, the forwardlooking information and statements. These risks and uncertainties include those discussed or identified in
Aperam’s filings with the Luxembourg Stock Market Authority for the Financial Markets (Commission de
Surveillance du Secteur Financier). Aperam undertakes no obligation to publicly update its forward-looking
statements or information, whether as a result of new information, future events, or otherwise.
© Aperam 2
Introduction & overview
Highlights:
•
Health and Safety frequency rate of 0.3x in Q3 2014 compared to 1.4x in Q2 2014
•
Shipments of 433 thousand tonnes in Q3 2014, a 7% decrease compared to shipments of 466 thousand tonnes in Q2 2014
•
EBITDA of USD 137 million in Q3 2014, compared to EBITDA of USD 164 million in Q2 2014
•
Basic earnings per share of USD 0.27 in Q3 2014
•
Cash flow from operations amounted to USD 65 million in Q3 2014
•
Net debt of USD 591 million on September 30, 2014, representing a gearing of 21% compared to a net debt of USD 663 million
on June 30, 2014
Prospects:
•
EBITDA in Q4 2014 is expected to decrease compared to EBITDA in Q3 2014.
•
Net debt to decrease in Q4 2014
“Aperam has continued to deliver solid results. Q3 performance highlights once again the strength of our
strategy, which consists of Leadership Journey®, Top Line and cash focus.”
© Aperam 3
Health & Safety
Performance
Lost Time Injury Frequency rate*
4.0
3.0
2.0
1.0
1
4Q 1
1
1Q 1
1
2Q 2
1
3Q 2
1
4Q 2
1
1Q 2
1
2Q 3
1
3Q 3
1
4Q 3
1
1Q 3
1
2Q 4
1
3Q 4
14
11
3Q
11
2Q
10
1Q
10
4Q
10
3Q
10
2Q
09
1Q
09
4Q
09
3Q
09
2Q
08
1Q
08
4Q
08
3Q
08
2Q
07
1Q
07
4Q
07
3Q
2Q
1Q
07
0
Profit improvement in Q1 due
to market
andfrequency
internal initiatives
butin
Q2Q3
expected
to be more challenging
Health
& Safety
rate of 0.3x
2014
* WorldSteel-standard: Fr = lost time Injuries per 1.000.000 worked hours; based on own personnel and contractors
4
Third quarter 2014
Environment and
markets
5
3 500
2 000
D
ec
M 07
a
Ju r 08
Se n 0
8
D p0
ec 8
M 0
a 8
Ju r 09
Se n 0
9
D p0
ec 9
M 09
a
Ju r 10
Se n 1
0
D p1
ec 0
M 10
a
Ju r 11
Se n 1
1
D p1
ec 1
M 1
a 1
Ju r 12
Se n 1
2
D p1
ec 2
M 12
a
Ju r 13
Se n 1
3
D p1
ec 3
M 13
a
Ju r 14
Se n 1
p 4
14
D
ec
M 07
a
Ju r 08
Se n 0
8
D p0
ec 8
M 08
a
Ju r 09
Se n 0
9
D p0
ec 9
M 0
a 9
Ju r 10
Se n 1
0
D p1
ec 0
M 10
a
Ju r 11
Se n 1
1
D p1
ec 1
M 11
a
Ju r 12
Se n 1
2
D p1
ec 2
M 12
a
Ju r 13
Se n 1
3
D p1
ec 3
M 13
a
Ju r 14
Se n 1
p 4
14
Environment and markets
Stainless steel prices
China - CR 304 2B 2mm coil transaction price (USD/t)*
Southern Europe - CR 304 2B 2mm coil transaction price (€/t)*
5 000
3 500
4 500
4 000
3 000
2 500
3 000
2 000
2 500
1 500
Price increase was initiated in 2014
but movement was halted under the pressure of imports and recent sharp nickel price decrease
*Source: SBB/Platts
6
Third quarter 2014
Performance and
prospects
7
Performance and prospects
Third quarter operating performance
Q3 2014 EBITDA per division (USD million) [1]
Shipments (‘000t)
475
466
124
436
Q3 2013
441
109
433
Q4 2013
Q1 2014
Q2 2014
Q3 2014
EBITDA (USD million)
Brazil 58
Brazil 54
Europe 66
Europe 55
164
30
137
129
21
20
12
84
62
Q2 2014
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014
Q3 2014
Stainless & Electrical
Q2 2014
Q3 2014
Services & Solutions
Q2 2014
Q3 2014
Alloys & Specialties
EBITDA of 316 USD/t in Q3 2014 compared to 352 USD/t in Q2 2014
[1]
Difference with total Aperam’s quarterly Ebitda comes from the Others & Eliminations division.
8
Performance and prospects
Leadership Journey®
Key projects completed since beginning of 2011
Cumulated gains (USD million)
•
In Brazil, VSS*, switch from LPG to natural gas and conversion of blast
furnace number 2 from coke to biomass.
•
In Europe,
- Suspension of traditional cold roll mill in Isbergues
- Completion of the new hot annealing and pickling line in Gueugnon
- Industrial optimization and rationalization (from 29 to 17 tools)
•
In Services & Solutions, Service Center expansion in Campinas
•
Alloys & Speciality, completion of the Imphy meltshop enhancement
•
Closure of Firminy (Precision)
500
450
400
475
350
300
369
385
401
Key projects progressing
•
Yield and Quality improvement, Sourcing initiative, SG&A reduction
through organisation simplification
•
Debottlenecking the finishing line of the Imphy Wire Rod mill (A&S)
•
Productivity increase of the downstream facilities in Genk, Gueugnon
and Timoteo
•
Upgrade of the Grain Oriented Electrical Steel operations in Timoteo
415
250
Q4 2013
Q1 2014
Q2 2014
Q3 2014
End of 2015
Profit improvement in Q1Continuous
due to market
and
internal of
initiatives
but Q2 expected
solid
progress
the Leadership
Journey® to be more challenging
9
Third quarter 2014
Financial results
10
Financial results
Third quarter P&L highlights
EBITDA to net income (USD million)
(55)
137
(53)
82
(2)
(6)
27
EBITDA
Depreciation
& impairment
Operating
income
Forex
Net interest &
& derivatives
financing
losses
Costs*
Pre-tax
income
21
Tax &
Non-controlling
interests
Net income
Profit improvement in
Q1 due
to market
and internal
Q2quarter
expected
to be more challenging
Basic
earnings
per share
of USDinitiatives
0.27 in thebut
third
of 2014
* Including USD 17 million in the third quarter of 2014, related to an impairment loss of USD 14 million booked on the minority stake it holds in Gerdau and
USD 3 million booked on the minority stake it holds in General Moly.
11
Financial results
Third quarter cash flow highlights
Free cash flow (USD million)
(91)
137
(19)
(24)
65
41
EBITDA
Working Capital
Financial
charges, tax
& other
Cash-flow
from
operations
CAPEX
Free
Cash-flow
Profit improvement in Q1 due
to65
market
and
initiatives
but Q2
expected
USD
million
of internal
cash from
operations
in Q3
2014 to be more challenging
12
Financial results
Third quarter balance sheet highlights
Equity & net debt (USD million)
Assets & liabilities (USD million)
681
1 231
3 017
2 958
3 026
3 149
808
690
689
663
591
30/09/13
31/12/13
31/03/13
30/06/14
30/09/2014
2 851
3 401
2 851
Assets
Liabilities
Non-current assets
Shareholders’ equity
Working capital
Other net liabilities
Net Debt
Equity
Profit improvement in Q1
toof
market
andmillion,
internalrepresenting
initiatives but
Q2 expected
to be more challenging
Netdue
debt
USD 591
a gearing
of 21%
13
Financial results
Cash focus
650
0
550
20
11
20
Q 11
4
2
Q 011
1
20
Q 12
2
20
Q 12
3
2
Q 012
4
20
Q 12
1
20
Q 13
2
2
Q 013
3
20
Q 13
4
20
Q 13
1
2
Q 014
2
20
Q 14
3
20
Q 14
4
20
14
3
2
Q
550
Q
20
1
3
Q
2
Q
1
Q
4
Q
3
Q
2
Q
1
Q
4
Q
3
Q
2
Q
1
Q
4
Q
3
Q
4
200
20
14
750
20
14
400
20
13
850
20
13
600
20
13
950
20
13
800
20
12
1,050
20
12
1,000
20
12
1,150
20
12
1,200
20
11
Quarterly net debt of Aperam evolution
(USD million)
20
11
Cumulated net cash provided by operating activities
(USD million)
Profit
improvement
in Q1
and internal
initiatives
Q2 expected
to be
more by
challenging
Continuous
progress
ofdue
the to
Netmarket
Debt reduction
program
withbut
a target
of USD 550
million
year end
14
Q&A
Bodega Barbastro, Huesca (Spain)
15

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