2018 BUSINESS YEAR RESULTS PRESENTATION
28 FEBRUARY 2019
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2018 BUSINESS YEAR RESULTS PRESENTATION 28 FEBRUARY 2019 2018 BUSINESS YEAR RESULTS PRESENTATION DISCLAIMER This document may contain forward-looking information and statements about ACERINOX, S.A., its subsidiaries and/or its management.
2018 BUSINESS YEAR RESULTS PRESENTATION
28 FEBRUARY 2019
2
2018 BUSINESS YEAR RESULTS PRESENTATION
DISCLAIMER
This document may contain forward-looking information and statements about ACERINOX, S.A., its subsidiaries and/or its management. These forward-looking statements include financial projections and estimates and their underlying assumptions, and statements regarding the intent, belief or current expectations or forecasts of ACERINOX, S.A. and/or its management, as well as statements regarding future performance, plans, objectives,
include assumptions regarding future economic and other conditions, such as future nickel or chrome prices and, in general, are subject to risks, uncertainties and variables beyond ACERINOX’s control that can adversely affect them. These forward-looking statements and information do not constitute historical facts and can generally be identified by the use of terms such as “expects”, “anticipates”, “believes”, “plans”, “estimates” and similar expressions. ACERINOX, S.A. believes they all are reasonable but are not a guarantee of future performance, prices, results of operations, benefits or dividend payout policies. ACERINOX, S.A. future financial condition, financial ratios, business, results of
All forward-looking statements included herein are based on information available on the date hereof. Except as required by applicable law, ACERINOX, S.A. does not undertake any obligation to publicly update or revise any forward-looking statements and information, even in the event of new information being published or new events occurring. Investors, holders of ACERINOX, S.A. securities and shareholders in ACERINOX, S.A. are cautioned not to place undue reliance on the forward-looking statements and information, which speak only as of the date they were made. All subsequent oral or written forward-looking statements or information attributable to ACERINOX, S.A. or any of its members, directors, officers, employees or any persons acting on its behalf are expressly qualified in their entirety by this cautionary statement. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. None of the Company or any of its affiliates, advisors or representatives shall have any liability whatsoever for any loss arising from any use of this document, or its contents, or otherwise arising in connection with this document. Moreover, this document nor any part of it constitutes a contract, nor may it be used for incorporation into or interpretation of any contract or other type or agreement. The points contained in this disclaimer must be taken fully into account by all persons or entities obliged to take decisions or to draw up or to publish opinions
public documentation and information that ACERINOX, S.A. reports to or files with the bodies responsible for supervising the main securities market and, in particular, with the Spanish National Securities Market Commission (CNMV in its Spanish initials).
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2018 BUSINESS YEAR RESULTS PRESENTATION
ACCIDENT RATE EVOLUTION
9 . 5 7 . 5 5 . 4 5 . 8 5 . 0 3 . 3 3 . 3 2 . 6 2 . 2
2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8
T a r g e t : z e r o a c c i d e n t s
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2018 BUSINESS YEAR RESULTS PRESENTATION
2018: MAIN FINANCIAL FIGURES
2018 2017 Variation
Net Sales 5,011 4,627 8% EBITDA 480 489
Results before Taxes and Minorities
310 299 4%
Results after Taxes and Minorities
237 234 1%
Net Financial Debt
552 609
Net Financial Debt / EBITDA
1.15 1.25
Net Financial Debt / Equity
26% 31%
Free Cash Flow
171 181
Quick reaction to market corrections Strong cash generation and balance sheet Solid results in a very volatile environment
89 124 140 101 103 101 41 41 41 79 103 106 191 126 53 119 118 151 154 58
9% 11% 12% 9% 9% 9% 4% 5% 4% 8% 10% 10% 15% 11% 5% 11% 9% 11% 12% 5%
0% 5% 10 % 15 % 20 % 25 %50 100 150 200
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2016 2017 2018Quarterly EBITDA evolution (mill €)
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2018 BUSINESS YEAR RESULTS PRESENTATION
FOURTH QUARTER PERFORMANCE
Q4 MARKET HIGHLIGHTS
safeguards measures
Q4 ACERINOX HIGHLIGHTS
X X X X X X X X X X
X
118 151 154 2 0 4 0 6 0 8 0 1 0 0 1 2 0 1 4 0 1 6 0 1 8 0
Q1 Q2 Q3 Q4
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2018 BUSINESS YEAR RESULTS PRESENTATION
FOURTH QUARTER PERFORMANCE
668 639 617 516 Q1 Q2 Q3 Q4
114
114 Q1 Q2 Q3 Q4 609 667 537 666 552 Q417 Q1 Q2 Q3 Q4
MELTING PRODUCTION FREE CASH FLOW NET FINANCIAL DEBT EBITDA
Thousand tons Million € Million € Million €
(Before dividends)
58 22
Inventory adjustment
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2018 BUSINESS YEAR RESULTS PRESENTATION
FULL YEAR PERFORMANCE
FY MARKET HIGHLIGHTS FY ACERINOX HIGHLIGHTS
measures in Europe
Europe
and Asia
Stainless
affected by low prices
market conditions
X
X X X X X X X
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2018 BUSINESS YEAR RESULTS PRESENTATION
FULL YEAR PERFORMANCE
286 329 489
15 16 17 18 2,320 2,475 2,519 2,440 15 16 17 18
111 181 171 15 16 17 18 711 620 609 552 15 16 17 18
MELTING PRODUCTION FREE CASH FLOW NET FINANCIAL DEBT EBITDA
Thousand tons Million € Million € Million €
(Before dividends)
480
22 Inventory adjustment
489 480
(22) (14) (65) 22 70
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2018 BUSINESS YEAR RESULTS PRESENTATION
FULL YEAR PERFORMANCE
EBITDA
EBITDA 2017 Inventory adjustment to NRV Currency Price increase of energy and consumables Sales volume Business actions EBITDA 2018
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2018 BUSINESS YEAR RESULTS PRESENTATION
FULL YEAR PERFORMANCE
CASH FLOW
480 326 171 43 (87) (66) (155) (128)
E B I T D A W o r k i n g C a p i t a l F i n a n c i a l c h a r g e s T a x &
O p e r a t i n g C a s h F l o w C A P E X F C F D i v i d e n d s & t r e a s u r y s h a r e s C F a f t e r d i v i d e n d s
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2018 BUSINESS YEAR RESULTS PRESENTATION
FULL YEAR PERFORMANCE
2.48 1.88 1.25 1.15
2015 2016 2017 2018
44 30 19 2
2015 2016 2017 2018
NET FINANCIAL DEBT / EBITDA NET FINANCIAL EXPENSES 3 9 2 3 9 6
2017 2018
629 634
2017 2018
OPERATING EXPENSES PERSONNEL +1% +1%
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2018 BUSINESS YEAR RESULTS PRESENTATION
RESTRUCTURING OF BAHRU STAINLESS
NON CASH MEASURES:
EUR 155 mill
NO IMPACT IN THE CONSOLIDATED RESULTS
0.44 0.45 0.45 0.50
2016 (*) 2017 2018 2019
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2018 BUSINESS YEAR RESULTS PRESENTATION
CAPITAL ALLOCATION
94 173 173 144
2015 2016 2017 2018
( * ) S c r i p d i v i d e n d
DIVIDEND INCREASE 11% SHARE BUYBACK PROGRAMME: CAPEX RETURN TO SHAREHOLDERS PHASE I: 2% CAPEX IN PROGRESS:
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2018 BUSINESS YEAR RESULTS PRESENTATION
EXCELLENCE PLAN V
97 52 53 50 27 20 40 60 80 100 120 140
PE I 2009 - 2010 PE II 2011 – 2012 PE III 2013 – 2014 PE IV 2015 – 2016 PE V 2017 – 2018 PE VI 2019 – 2020 M€58% 73% 88% 74% 55%
133MM€ 90MM€ 60MM€ 67MM€ 50MM€ 45MM€
Achieved 2 0 1 7 - 2 0 1 8 E X C E L L E N C E P L A N V
T a r g e t : 5 0 m i l l i o n E U R A c h i e v e d : 5 5 % , 2 7 m i l l i o n E U R
5 c h a p t e r s : O p e r a t i o n s , W o r k i n g C a p i t a l , P e r s o n n e l , C o m m e r c i a l a n d S u p p l y C h a i n
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2018 BUSINESS YEAR RESULTS PRESENTATION
THE NEXT STEP: EXCELLENCE 360º
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2018 BUSINESS YEAR RESULTS PRESENTATION
EXCELLENCE 360º
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2018 BUSINESS YEAR RESULTS PRESENTATION
EXCELLENCE 360º: ROADMAP
2019 2020 2021 2022
112 MM€
89%
EXCELLENCE 360º TARGET = EUR125 MILLION IN 2023 (RECURRENT)
24 MM€
19%
2023
125 MM€
100%
59 MM€
47%
86 MM€
69%
360º
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2018 BUSINESS YEAR RESULTS PRESENTATION
OUTLOOK
Q1 EBITDA IS EXPECTED TO BE HIGHER THAN IN Q4 18
in Europe at normal levels
in US will be normal by the end of the quarter
the increase in the nickel price, will improve the market situation.
measures in Europe are working properly, Imports fell in January
These effects will be especially evident in the second quarter of the year
2018 BUSINESS YEAR RESULTS PRESENTATION
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2018 BUSINESS YEAR RESULTS PRESENTATION
A c e r i n o x E u r o p a A P L i n e N A S B A L i n e
APPENDIX
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2018 BUSINESS YEAR RESULTS PRESENTATION
ACERINOX: GLOBAL PLAYER
m illio n t o n s o f m elt in g cap acit y
in 80 co u n t ries
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2018 BUSINESS YEAR RESULTS PRESENTATION
HISTORY
1 9 7 0 ,
i n c o r p o r a t i o n o f A C E R I N O X , S . A . ( S p a i n )
1 9 9 0 ,
i n c o r p o r a t i o n o f N O R T H A M E R I C A N S T A I N L E S S ( U S A )
2 0 0 2 ,
i n c o r p o r a t i o n o f C O L U M B U S S T A I N L E S S ( S o u t h A f r i c a )
2 0 0 9 ,
i n c o r p o r a t i o n o f B A H R U S T A I N L E S S ( M a l a y s i a )
A c e r i n o x , S . A . 9 7 % H a n w a ( M e t a l O n e C o r p ) 3 %
M A I N A C E R I N O X S H A R E H O L D E R S
S i n c e : C u r r e n t p o s i t i o n : 2 0 0 1 C o r p o r a c i ó n F i n a n c i e r a A l b a , S . A . 1 8 . 9 6 % 1 9 7 0 N i s s h i n S t e e l H o l d i n g s C o r p . L t d . 1 5 . 4 9 % 1 9 9 8 F e y n m a n C a p i t a l S . L . ( O M E G A ) 9 . 8 8 % 2 0 0 2 I n d u s t r i a l D e v e l o p m e n t C o r p . ( I . D . C . ) 3 . 0 4 %
S o u r c e : C N M V1 0 0 % A c e r i n o x S . A . A c e r i n o x , S . A . 7 6 % I . D . C . 2 4 %
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2018 BUSINESS YEAR RESULTS PRESENTATION
ACERINOX PRINCIPLES AND VALUES
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2018 BUSINESS YEAR RESULTS PRESENTATION
ACERINOX PRODUCTION CAPACITY
M e l t i n g 1 . 4 H o t R o l l i n g 1 . 2 C o l d R o l l i n g 0 . 8 L o n g P r o d . 0 . 2 M e l t i n g 1 . 1 H o t R o l l i n g 0 . 9 C o l d R o l l i n g 0 . 7 L o n g P r o d . 0 . 2 M e l t i n g 1 . 0 H o t R o l l i n g 1 . 0 C o l d R o l l i n g 0 . 5 M e l t i n g ( * ) 1 . 0 H o t R o l l i n g ( * ) 1 . 0 C o l d R o l l i n g ( * ) 0 . 6
( * ) O n c e i t ’ s c o m p l e t e dN O R T H A M E R I C A N S T A I N L E S S
F U L L Y I N T E G R A T E D P L A N T
A C E R I N O X E U R O P A
F U L L Y I N T E G R A T E D P L A N T
C O L U M B U S S T A I N L E S S
F U L L Y I N T E G R A T E D P L A N T
M i l l i o n m t
B A H R U S T A I N L E S S
25
2018 BUSINESS YEAR RESULTS PRESENTATION
STAINLESS STEEL WORLD PRODUCTION
5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 50 60 70 80 90 00 10 18e
S o u r c e : I S S F a n d A c e r i n o xW o r l d p r o d u c t i o n o f S t a i n l e s s S t e e l i n 2 0 1 8 e :
50.7 million mt
( + 5 . 5 % o v e r 2 0 1 7 )
C o m p o u n d a n n u a l g r o w t h r a t e 1 9 5 0 – 2 0 1 8 e :
+ 5.9%
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2018 BUSINESS YEAR RESULTS PRESENTATION
STAINLESS STEEL WORLD PRODUCTION
C h i n a a c c o u n t s f o r 5 2 % o f w o r l d p r o d u c t i o n i n 2 0 1 8
10 20 30 40 50
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Others Japan India China USA Europe
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2018 BUSINESS YEAR RESULTS PRESENTATION
RAW MATERIAL PRICES
Y e a r s 2 0 1 7 - 2 0 1 9 , u p t o F e b r u a r y 2 5
A v e r a g e p r i c e : c a s h / t h r e e m o n t h s U S D / m t5,000 10,000 15,000 20,000
J F M A M J J A S O N D J F M A M J Jl A S O N D J F A v e r a g e q u a r t e r l y p r i c e U S ¢ / L b . C r108 108 108 104 92 82 98 110 165 154 110 139 118 142 138 124 112
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016 2017 2018 2019
F E R R O C H R O M E N I C K E L
S o u r c e : L M E S o u r c e : M e t a l B u l l e t i n28
2018 BUSINESS YEAR RESULTS PRESENTATION
STAINLESS STEEL COLD ROLLED SHEET PRICES AISI 304 2.0 MM
S o u r c e : C R UU S D / m t , f i n a l p r i c e , a l l o y s u r c h a r g e i n c l u d e d
2612
2295 1990
1500 1700 1900 2100 2300 2500 2700 2900 3100 3300 J F M A M J JL A S O N D J F M A M J JL A S O N D J 2017 2018 2019
U S A N O R T H E R N E U R O P E A S I A
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2018 BUSINESS YEAR RESULTS PRESENTATION
STAINLESS STEEL INVENTORIES
2 3 4
100 200 300 400 500 600
J F M A M J JL A S O N D J F M A M J JL A S O N D J F M A M J JL A S O N D J F M A M J JL A S O N D J F M A M J JL A S O N D20 40 60 80 100
J F M A M J JL A S O N D J F M A M J JL A S O N D J F M A M J JL A S O N D J F M A M J JL A S O N D J F M A M J JL A S O N D40 50 60 70 80 2 0 1 4 D a y s
100 200 300 400 500
J F M A M J JL A S O N D J F M A M J JL A S O N D J F M A M J JL A S O N D J F M A M J JL A S O N D J F M A M J JL A S O N DM o n t h s
I N V E N T O R I E S O F C O L D - R O L L E D I N V E N T O R I E S A T D I S T R I B U T O R S I N V E N T O R I E S A T W U X I & F O S H A N
S o u r c e : E H V G e r m a n y S o u r c e : M S C I S o u r c e : 5 1 b x g2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 4
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2018 BUSINESS YEAR RESULTS PRESENTATION
PRODUCTION
MELT ING SHO P HO T RO L L ING CO L D RO L L ING
T h o u s a n d m t
+ 0 . 8 % o v e r 1 2 M 2 0 1 7 617 634 558 516 601 611 562 546 575 652 637 611 668 605 615 631 668 639 617 516
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2016 2017 2018
542 552 491 464 524 536 498 481 526 563 572 547 593 535 542 560 577 561 524 458
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2016 2017 2018
384 412 385 375 395 430 393 390 418 428 429 441 438 436 427 437 462 471 443 377
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2016 2017 2018
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2018 BUSINESS YEAR RESULTS PRESENTATION
BALANCE SHEET
ASSETS LIABILITIES Million € 2018 2017 Variation Million € 2018 2017 Variation Non-current assets 2,133.77 2,147.62
Equity 2,119.30 1,970.30 7.6% Current assets 2,473.82 2,256.39 9.6% Non-current liabilities 1,226.22 1,149.38 6.7%
1,018.74 990.48 2.9%
1,026.29 936.68 9.6%
589.78 613.20
199.93 212.70
Trade debtors 524.69 552.06
Other debtors 65.09 61.14 6.5% Current liabilities 1,262.07 1,284.34
850.11 620.54 37.0%
375.89 293.08 28.3%
15.18 32.17
783.86 856.71
102.32 134.55
TOTAL ASSETS 4,607.59 4,404.01 4.6% TOTAL EQUITY AND LIABILITIES 4,607.59 4,404.01 4.6%
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2018 BUSINESS YEAR RESULTS PRESENTATION
WORKING CAPITAL
500 1,000 1,500 2,000 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 dic-14 Dec-15 Dec-16 Dec-17 Dec-18 I n v e n t o r i e s T r a d e D e b t o r s T r a d e C r e d i t o r s W o r k i n g C a p i t a l
Million €
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2018 BUSINESS YEAR RESULTS PRESENTATION
NET FINANCIAL DEBT
939 1,075 1,084 887 582 529 616 711 620 609 552
200 400 600 800 1,000 1,200
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
46.5% 61.3% 56.3% 47.1% 33.9% 34.1% 33.2% 35.1% 28.6% 30.9% 26.0% 5.48
2.84 2.60 2.94 2.32 1.36 2.48 1.88 1.25 1.15 Gearing NFD / EBITDA
Million €
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2018 BUSINESS YEAR RESULTS PRESENTATION
CASH FLOW
Millones EURJan - Mar 2018 Apr - Jun 2018 Jul - Sep 2018 Oct-Dec 2018 Jan - Dec 2018 Jan - Dec 2017 EBITDA 118 151 154 58 480 489 Changes in working capital
17
101
1 Changes in operating working capital
9
118
16
104
25 10 133 27
38 40
144 Others 3 8
Income tax
Financial expenses
Others 5 9 16 30
OPERATING CASH FLOW
143 26 169 326 366 Payments for investments on fixed assets
FREE CASH FLOW
114
114 171 181 Dividends and treasury shares
CASH FLOW AFTER DIVIDENDS
114
112 43 57 Conversion differences
16 6 2 14
Variation in net financial debt
130
114 57 11
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2018 BUSINESS YEAR RESULTS PRESENTATION
CASH GENERATION 2008-2018
Cash generation for:
Cash generation 3.422
CAPEX
Return to shareholders
Net debt reduction 371
M i l l i o n E U R
U N IQU E C A SE