2011 Business and Financial Performance March 27, 2012 1 - - PowerPoint PPT Presentation

▶
2011 business and financial performance
SMART_READER_LITE
LIVE PREVIEW

2011 Business and Financial Performance March 27, 2012 1 - - PowerPoint PPT Presentation

Oct 28, 2023 221 likes •462 views

2011 Business and Financial Performance March 27, 2012 1 2012-03-27 Content 1. Introduction 2. Business overview 3. Financials 4. Divestitures and Internal Reorganization 5. 2012 outlook 6. Q&A 2 2012-03-27 Section 1

slide-1
SLIDE 1

2012-03-27 1

March 27, 2012

2011 Business and Financial Performance

slide-2
SLIDE 2

2012-03-27 2

Content 1. Introduction 2. Business overview 3. Financials 4. Divestitures and Internal Reorganization 5. 2012 outlook 6. Q&A

slide-3
SLIDE 3

2012-03-27 3

Section 1

Introduction

slide-4
SLIDE 4

2012-03-27 4

Introduction

Speaker Krzysztof Zoła

CFO Age – 40 10 years with the Company

slide-5
SLIDE 5

2012-03-27 5

Introduction

2011 Highlights

  • Improved demand, prices and margins for all products particularly in H1. H2 weaker in terms of automotive

sectors (HSJ). Q4 zloty weakening made a positive contribution to sales of semi-products (Ferrostal)

  • 59% yoy revenues increase; sharp increase of profitability; EBITDA at PLN 144,7m from PLN 10,4 million in 2010
  • Better market conditions reflected in growth in capacities’ utilization:
  • GDP growth over 4% in Poland
  • Polish steel production up by 10% yoy
  • Closing of two major divestment transactions regarding distribution business and finalization of internal

reorganization

54% 59% 79% 86% 86% 86% 84% 636 000 COMBINED 37% 52% 70% 86% 72% 58% 71% 261 000 HSJ 66% 64% 85% 86% 96% 105% 93% 375 000 FERR Y 2009 Y 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Y 2011 UTYLIZATION RATE ANNUAL CAPACITY Tonnes

slide-6
SLIDE 6

2012-03-27 6

Section 2

Business Overview

slide-7
SLIDE 7

2012-03-27 7

Business Overview

Environment

793 959 1 148 rebars / scrap diff. 1 439 1 829 18% 2 165 Rebars (Fi18) 777 880 1 268 bars / scrap diff. 1 423 1750 31% 2 285 Bars (flat, plain, squares) 666 759 1 021 billet / scrap diff. 1 312 1629 25% 2 038 Billets (FERR) 646 870 17% 1 017 Scrap metal PLN / Ton 2009 2010 % YoY 2011 UNIT PRICES (2)

(1) Source: World Steel Association (2) Source: COGNOR SA

1 220,0 1 395,5 7% 1 490,1 Global 567,8 626,7 9% 683,3 China 139,0 172,9 3% 177,4 EU (27) 7,2 8,0 10% 8,8 Poland mln tonnes Y 2009 Y 2010 % YoY Y 2011 CRUDE STEEL PRODUCTION (1)

slide-8
SLIDE 8

2012-03-27 8

Business Overview

Segments

56 309 88 355 120 064 TOTAL SALES in '000 PLN 94 357 102 991 118 098 TOTAL SALES in TONNES 407 736 443 511 622 417 TOTAL INTERNAL USE in TONNES 524 606 529 248 711 743 TOTAL PURCHASES in TONNES 56 309 88 355 120 064 CONSOLIDATED SALES ‘000 PLN 1 841 975 OTHER 92 516 102 016 118 098 ZLMET SALES TO EXTERNAL CUSTOMERS Tonnes 111 849 157 241 211 872 HSJ 286 700 286 270 410 545 FERR INTERNAL USE Tonnes 1 106 620 OTHER 77 474 105 533 123 718 HSJ 351 289 332 240 429 488 ZLMET 86 839 90 855 158 537 FERR PURCHASES FROM EXTERNAL SUPPLIERS Tonnes Y 2009 Y 2010 Y 2011 SCRAP METAL

slide-9
SLIDE 9

2012-03-27 9

Business Overview

Segments

136 119 181 290 269 148 TOTAL SALES in TONNES 212 235 193 442 265 460 TOTAL INTERNAL USE in TONNES 346 288 374 708 534 608 TOTAL PRODUCTION in TONNES 1 922 TOTAL PURCHASES in TONNES 178 520 295 338 551 525 CONSOLIDATED SALES ‘000 PLN 15 24 COG 2 309 2 409 16 909 HSJ 133 657 178 857 252 239 FERR 129 ZLOM SALES TO EXTERNAL CUSTOMERS Tonnes 95 648 132 256 169 103 HSJ 115 166 61 186 96 357 FERR INTERNAL USE Tonnes 96 035 134 665 186 012 HSJ 248 823 240 043 348 596 FERR PRODUCTION Tonnes 1 922 EXTERNAL SOURCES PURCHASES Tonnes Y 2009 Y 2010 Y 2011 BILLETS

slide-10
SLIDE 10

2012-03-27 10

Business Overview

Segments

407 763 478 102 718 070 TOTAL SALES in '000 PLN 201 459 182 234 231 573 TOTAL SALES TO EXTERNAL CUSTOMERS in TONNES 197 567 170 146 240 657 TOTAL PRODUCTION in TONNES 407 763 478 102 718 070 CONSOLIDATED SALES ‘000 PLN 92 954 122 337 147 282 HSJ 108 419 59 897 84 291 FERR 86 ZLOM SALES TO EXTERNAL CUSTOMERS Tonnes 97 546 116 379 158 335 HSJ 33 472 FERR 66 549 53 767 82 322 ZWWB PRODUCTION Tonnes Y 2009 Y 2010 Y 2011 FINISHED PRODUCTS

slide-11
SLIDE 11

2012-03-27 11

Section 3

Financials

slide-12
SLIDE 12

2012-03-27 12

Financials

  • 66 722

10 365 144 651 EBITDA

  • 50 355
  • 45 788
  • 44 169

Depreciation and amortization

  • 289 715
  • 184 153

115 901 Profit for the period

  • 178 842
  • 88 118

92 011 Profit/loss for the period from discontinued operations 23 641

  • 8 887

21 887 Income tax expense

  • 134 514
  • 87 148

2 003 Profit before tax

  • 17 437
  • 51 725
  • 98 479

Net financing costs

  • 77 204
  • 66 167
  • 105 041

Financial expenses 59 767 14 442 6 562 Financial income

  • 117 077
  • 35 423

100 482 EBIT

  • 28 501
  • 18 080
  • 14 546

Other expenses 1 126

  • 10 118

15 309 Other gains/(losses) – net

  • 45 017
  • 50 718
  • 46 600

Administrative expenses

  • 27 073
  • 32 394
  • 36 171

Distribution expenses 9 765 9 673 9 919 Other income

  • 27 377

66 214 172 571 Gross profit

  • 809 392
  • 909 068
  • 1 377 076

Cost of sales 782 015 975 282 1 549 647 Revenue '000 PLN Y 2009 Y 2010 Y 2011 INCOME STATEMENT

  • EBITDA adjusted for

non-recurring items: PLN 131,2 m

  • Net profit adjusted for

non-recurring items: PLN 35,7 m

slide-13
SLIDE 13

2012-03-27 13

Financials

1 558 650 1 436 178 979 617 TOTAL ASSETS 196 014 544 534

  • V. Assets of disposal groups and disc. oper.

43 039 103 733 16 708

  • IV. Assets classified as held for sale

32 422 9 280 47 166

  • III. Cash and cash equivalents

5 536 10 25 186

  • 3. Other investments

2 004 590 7 744

  • 2. Current income tax receivable

204 235 142 620 204 904

  • 1. Trade receivables

211 775 143 220 237 834

  • II. Receivables

249 052 176 216 178 472

  • I. Inventories

732 302 976 983 480 180

  • B. TOTAL CURRENT ASSETS

57 082 40 784 70 826

  • VI. Deferred tax assets

45 857 19 257 19 850

  • V. Prepaid perpetual usufruct of land

14 488 4 608 4 377

  • IV. Investment property and other investments

3 295 241 44 583

  • III. Other receivables

663 451 373 818 342 734

  • II. Property, plant and equipment

42 175 20 487 17 067

  • I. Intangible assets

826 348 459 195 499 437

  • A. TOTAL NON-CURRENT ASSETS

'000 PLN Y 2009 Y 2010 Y 2011 ASSETS

  • A.III. includes PLN 44.3

m in Croatian Claim

  • A.VI. Increased due to

additional tax asset creation due to internal reorganization

slide-14
SLIDE 14

2012-03-27 14

Financials

1 558 650 1 436 178 979 617 TOTAL EQUITY AND LIABILITIES 154 932 371 101

  • III. Liabilities of disposal group classified as held for sale

834 403 381

  • 7. Provisions for payables

323 293

  • 6. Current income tax payable

2 317 4 713 5 677

  • 5. Employee benefits obligation

1 145 1 007 865

  • 4. Deferred government grants

269 074 250 570 176 117

  • 3. Trade payables

126 657 83 884 25 236

  • 2. Bank overdraft

169 904 107 249 45 878

  • 1. Interest-bearing loans and borrowings

570 254 447 826 254 447

  • II. Current liabilities

19 310 10 369 8 621

  • 3. Other

534 110 503 162 532 138

  • 2. Interest-bearing loans and borrowings

38 819 11 862 7 970

  • 1. Employee benefits obligation

592 239 525 393 548 729

  • I. Non-current liabilities

1 317 425 1 344 320 803 176

  • B. LIABILITIES

12 923 8 803 12 201

  • III. Minority interest

125 928

  • 49 389

31 796

  • II. Reserves and retained earnings

102 374 132 444 132 444

  • I. Issued share capital

241 225 91 858 176 441

  • A. EQUITY

'000 PLN Y 2009 Y 2010 Y 2011 EQUITY AND LIABILITIES

  • Debt reduced by PLN

128.9 m

  • Debt reduction offset by

PLN 55.8m of net FX losses regarding indebtedness

slide-15
SLIDE 15

2012-03-27 15

Financials

  • 66 947

7 776

  • 180 506

NET INCREASE IN CASH

  • 62 186
  • 31 651
  • 140 658
  • C. FROM FINANCING ACTIVITIES

1 432 8 658

  • 7 151
  • B. FROM INVESTING ACTIVITIES
  • 6 193

30 769

  • 32 697
  • A. FROM OPERATING ACTIVITIES

Y 2009 Y 2010 Y 2011 CASH FLOW

  • 12,0

66,1 3,8 Net debt / EBITDA 798 249 685 015 556 086 Net debt 241 225 91 858 176 441 Equity

  • 37,0%
  • 18,9%

7,5% Net profit margin

  • 8,5%

1,1% 9,3% EBITDA margin 95 53 48 Trade receivables turnover (days) 112 71 47 Inventories turnover (days) 0,67 0,98 1,19 Quick ratio 1,01 1,19 1,89 Liquidity ratio Y 2009 Y 2010 Y 2011 MAIN METRICS

  • PLN 130,2 negative

cash flow from working capital

  • Metrics at optimal levels
slide-16
SLIDE 16

2012-03-27 16

Section 4

Internal Reorganization

slide-17
SLIDE 17

2012-03-27 17

Divestiture of Distribution Division and Considerations Behind Internal Reorganization

  • Sale of 100% of shares in Cognor Stahlhandel GmbH to Mechel
  • Conditional SPA – 09.12.2010, closing 31.01.2011 r.
  • Price for 100% of shares was set at EUR 32.8m and referenced to the company’s figures as of 31.12.2009 r. Final price to be

established based on Cognor Stahlhandel GmbH group equity difference between 31.12.2009 i 31.01.2011 r.

  • Part of the transaction was a repayment of intercompany loan extended by Złomrex S.A. (currently HSJ S.A.) at the amount of

EUR 9.8m

  • Cognor S.A. (Cognor) has received and expects to receive the following proceeds:
  • EUR 24.6m – Feb 2011
  • EUR 0.9m – Feb 2012
  • EUR 1.5 -2.0m – H1 2012, the amount is subject to the dispute between Cognor and the buyer
  • HSJ S.A. has received and expects to receive the following amounts:
  • EUR 5.0m – Apr / Oct 2011
  • EUR 4.8m – Feb 2012
  • Sale of the domestic distribution assets to Arcelor Mittal Distribution
  • Conditional APA – 16.11.2010, closing 04.05.2011 r. The transaction comprised of: inventories, real property and other fixed

assets.

  • Total sale price accounted for PLN 181.2m net (PLN 197.2m VAT incl.)
  • Cognor has received and expects to receive the following proceeds:
  • PLN 168.8m – 04.05.2011,
  • PLN 4.1m – Jun 2011
  • PLN 2.0m – Q4 2011
  • PLN 7.4m – May 2012
  • PLN 14.9m – May 2013
  • Internal reorganization of the Group
  • Acquisition of Złomrex S.A. by Cognor including an indirect acquisition of shares in (i) steel plants - Ferrostal + HSW-HSJ and

(ii) scrap collection network - Złomrex Metal

  • Downstream application of proceeds and repayment of bank loans as well as working capital improvement
  • Simplification of the Group’s structure by the following subsidiary companies’ mergers aimed at increasing internal efficiencies

and tax benefits

  • The whole of former Złomrex S.A. Group’s business became listed on Warsaw Stock Exchange
  • Significant increase of Cognor’s potential and profitability
slide-18
SLIDE 18

2012-03-27 18

Group’s Structure Post Internal Reorganization

ZW-WB

92.4%

Scrap HSJ

(ZLX + HSW-HSJ)

100%

COGNOR

FERROSTAL ZLXMETAL ZIF

99,9%

SCRAP COLLECTION AND TRADING STEEL PRODUCTION

Other Production

100% 100%

NOTES’ ISSUER

ZLX CENTRUM BSS COG SERVICES COG FINANSE CEN SZCZ KAPITAŁ

100% 100% 100% 100% 75%

COG BLD KAPITAŁ SK

100% 51%

FINANCE SUBSIDIARIES REAL PROPERTIES ROOFING SHEETS

100%

PS Holdco

Other Production OMS

Zlomrex-Finans Zlomrex China

100% 100% 64,4%

Restricted Group Cognor Group

slide-19
SLIDE 19

2012-03-27 19

Section 5

2012 Outlook

slide-20
SLIDE 20

2012-03-27 20

2012 Outlook

Main factors

  • Polish GDP around 3%
  • Production expected to slightly fall in Europe with relatively strong Polish market. Demand,

prices and margins likely to stabilize on 2011 levels with zloty to strengthen further against the EUR and the USD

  • Utilization rates may continue to rise, at HSJ in particular
  • Positive free cash flow, net debt to EBITDA towards 3x multiple by 2012 yearend
  • Refinancing of the Notes
  • Organic growth strategy
slide-21
SLIDE 21

2012-03-27 21

Section 6

Q & A

slide-22
SLIDE 22

2012-03-27 22

COGNOR SA

  • ul. Zielona 26, 42 - 360 Poraj
  • tel. +48 34 316 01 10, fax +48 34 316 01 12

cognor@cognor.eu, www.cognor,pl