FY 2013 Financial Results Presentation April, 2014 Disclaimer The - - PowerPoint PPT Presentation
FY 2013 Financial Results Presentation April, 2014 Disclaimer The - - PowerPoint PPT Presentation
FY 2013 Financial Results Presentation April, 2014 Disclaimer The materials contained in this document (together, the Presentation) has been prepared by OJSC KOKS (the Company) and ar e given in conjunction with a live presentation
Disclaimer
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The materials contained in this document (together, the “Presentation”) has been prepared by OJSC KOKS (the “Company”) and are given in conjunction with a live presentation and should not be taken out of context. Some of the information in this Presentation may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company. You can identify forward looking statements by terms such as "expect", "believe", "anticipate", "estimate", "intend", "will", "could," "may" or "might" the negative of such terms or other similar expressions. The Company wishes to caution you that these statements are only predictions and that actual events or results may differ materially. The Company does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of the Company, including, among others, general economic conditions, the competitive environment, risks associated with operating in Russia, rapid technological and market change in the industries the Company operates in, as well as many other risks specifically related to the Company and its operations. Neither this Presentation nor any copy of it may be taken or transmitted, directly or indirectly, into the United States, Australia, Canada, Japan or the Russian Federation. This Presentation does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase or subscribe nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor. The offer and the distribution of these materials and other information in connection with the listing and offer in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such
- restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
This Presentation is not an offer for sale of any securities in the United States. Securities may not be offered or sold in the United States or to, or for the account or benefit of, U.S. person (as defined in Regulation S under the Securities Act of 1933) absent registration or an exemption from registration under the U.S. Securities Act of 1933. The Company has not registered and does not intend to register any portion of any offering in the United States or to conduct a public offering of any securities in the United States. The Presentation is only addressed to and directed at persons in member states of the European Economic Area who are “qualified investors” within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC) (“Qualified Investors”). In addition, in the United Kingdom, the Presentation is being distributed only to, and is directed only at, Qualified Investors (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) and Qualified Investors falling within Article 49(2)(a) to (d) of the Order, and (ii) to whom it may otherwise lawfully be communicated (all such persons together being referred to as “Relevant Persons”). The Presentation must not be acted on or relied on (i) in the United Kingdom, by persons who are not Relevant Persons, and (ii) in any member state of the European Economic Area other than the United Kingdom, by persons who are not Qualified Investors.
28.8 10.3 14.9 23.9 7.4 13.4 28.3 3.6 15.3 0,0 5,0 10,0 15,0 20,0 25,0 30,0 35,0 Gross profit margin, % Operating profit margin, % EBITDA margin, % 2011 2012 2013
45,704 (34,765) 10,939 6,107 (7,875) 43,036 (30,842) 12,194 6,595 (6,007)
- 40000
- 30000
- 20000
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10000 20000 30000 40000 50000 Revenue Cost of Sales Gross Profit EBITDA Capex* 2012 2013
Key Driving Factors and Results
mln RUR
Key Operational Results
Production, million tonnes 2012 2013 2013 / 2012, % Pig iron 2.12 2.1 (1) Coke* 2.6 2.55 (2) Iron Ore Concentrate 2.24 2.2 (2) Iron Ore 4.8 4.83 1 Coking coal 1.59 1.66 4
* Coke 6% moisture content including metallurgical coke, foundry coke, coke nut, coke breeze, coke dust 3
- Decline in prices kept on putting pressure on the Company’s revenue
- Consolidated EBITDA improved due to cost of sales and operating costs
containment efforts
- Consolidates EBITDA and Gross profit margins returned to the 2011 levels
despite lower pricing level in 2013 as compared to 2011
- Production costs optimization and CAPEX program revision resulted in significant
improve in Free Cash Flow generation
- Debt level 11% declined as compared to 30 June 2013 and returned to the level
- f 31 December 2012
Key Financial Indicators
Source: IFRS consolidated financial information for the year ended 31 December 2013 * Purchase of property, plant and equipment
Key Margin Indicators
%
6,107 6,595
1778 10,016 27,651 1,125 2,466 21,308 7,351 1197 4,093 2,492
5000 10000 15000 20000 25000 30000 35000 40000 45000 50000
(13%) 2% 3% (1%)
Key Profitability Factors
Key Financial Highlights EBITDA Bridge, RUR mln Operating Costs Structure in 2013
*Changes in finished goods and work in progress included **Wages and salaries including administrative salaries and associated taxes
Revenues Costs
% increase vs 2012 mln RUR 4 millions of RUR 2012 2013 2013/ 2012, % Revenue 45,704 43,036 (6) Cost of Sales (34,765) (30,842) (11) Operating profit 3,382 1,568 (54) Profit / (Loss) before income tax 2,603 (1,883) _ Profit / (Loss) for the year 1,997 (2,436) _ Adjusted EBITDA LTM** 6,651 7,016 5 Cash from operating activities 7,708 10,415 35
* As of December 31, 2012 ** Adjusted EBITDA is calculated as earnings before income tax, interest expense, exchange gain/loss, depreciation, amortization, impairment and other non-cash items.
A number of one-time factors were attributed as increasing operating costs and interest expense:
- Impairment of PPE and intangible assets was a result of Romanovskaya mine shut down
- Loss on disposal of ownership shares in SIJ was a result of significant decline in fair value of
the sold shares
- Increase in interest expense was in consequence with premium paid to OAO Koks’ Eurobond
loan holders for their consent to amend covenants of the bond loan
- Exchange loss is a result of rubble depreciation which caused an increase in coupon and
interest payments denominated in foreign currencies
Raw materials & supplies* 55% Wages & salaries including associated taxes 13% Energy 3% Distribution costs 11% Depreciation & Amortisation 6% General & Administrative 8% Taxes other than income tax 2% Other 2% *Changes in finished goods and work in progress included
Source: IFRS consolidated financial information for the year ended 31 December 2013
4,616 4,715 23,964 24,802 607 759 1,290 316 5000 10000 15000 20000 25000 30000 35000 2013 2012 Coke & coking products Pig iron & pig iron products Other sales Coal and other 5,981 7,217 2,474 2,132 1,092 2,732 3,012 3,031 2000 4000 6000 8000 10000 12000 14000 16000 2013 2012 Coke & coking products Pig iron & pig iron products Coal & concentrate Other 12,559 15,112 30,477 30,592 5000 10000 15000 20000 25000 30000 35000 40000 45000 50000 2013 2012 Export Domestic
Revenue by Products
Domestic Sales* Export Sales*
RUR mln RUR mln
Domestic and Export Sales*
* External revenue
29%
Total: 43,036 Total: 45,704 Total: 30,477 Total: 30,592 Total: 12,559 Total: 15,112
5 71% 67% 33% RUR mln 47% 20% 9% 24% 48% 14% 18% 20% 15% 79% 4% 15% 81% 3% 1% 2%
Source: IFRS consolidated financial information for the year ended 31 December 2013
1,778 1,734 10,016 11,638 27,651 25,469 1,125 1,350 2,466 5,513
5000 10000 15000 20000 25000 30000 35000 40000 45000 50000
2013 2012 IMT, other Polema Ore & Pig iron Coke Coal
Segmental Overview
External revenue EBITDA by segments
2013 total: RUR 6,595 mln
EBITDA margin*, %
6 mln RUR
Total: 45,704 Total: 43,036
2012 total: RUR 6,107 mln
*Including inter-segment revenue 4 % 25% 56% 3% 3 % 6% 12 % 64% 23% 16 8 13 5 16 8 8 13 2 4 6 8 10 12 14 16 18 Coal Coke Ore & Pig iron Polema 2013 2012
Source: IFRS consolidated financial information for the year ended 30 July 2013
4%
21% 33% 37% 9%
Coal Coke Ore & Pig iron Polema, IMT, other
17% 24% 56% 4%
Coal Coke Ore & Pig iron Polema, IMT, other
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Debt Portfolio as of 31.12.2013 – Management Accounts
Current Debt Maturity Profile Debt by Currency
(US$m)
Debt by Creditor
- Confirmed undrawn facilities as of Dec 31, 2013 was RUR 28.5 billion
- RUR bonds will be paid back using the company’s cash flow and bank loans
- Average loan interest rate as of Dec 31, 2013 was 7%
Debt by Security Type
135 39 30 30 128 330 137 50 100 150 200 250 300 350 400 2014 2015 2016 2017 After 2017 Loans Eurobonds RUR bonds
Total debt: $829m
40% 17% 7% 36%
Eurobonds RUR bonds Gazprombank Sberbank
28% 40% 32%
Secured Eurobond Unsecured
44% 56%
RUR USD
9,223 9,817 10,303 9,843 10,674 10,580 10,953 10,801 5,000 5,000 4,482 4,482 4,496 4,227 3,970 2,016 833 609 182 5 5 5 5 5000 10000 15000 20000 25000 30000 35000 30.09.2013 31.10.2013 31.11.2013 31.12.2013 Sberbank Eurobonds RUR bonds Gazprombank UniCredit Others
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Early Debt Repayment Schedule by 31.12.2013 – Management Accounts
Debt Level Decreased by the End of 2013
Source: Company data based on management accounts
(RURm)
- Lower coking coal prices in the market in 2H2013
- Significantly lower capex program in 2013
- Short term loans issued to third parties paid back
- Good results of the cost cutting program initiated in
3Q2012
- Higher cash flow in 2H2013 from additional volumes of
coal sold internally from newly commissioned Butovskaya mine and additional volumes of pig iron after maintenance
- f BF2 was over in 1H2013
- Change of marketing policy focusing on higher value
added special pig iron grades and improved quality coke grades.
Early Loan Repayment Executed Due to
Total: 30,231 Total: 30,238 Total: 29,895 Total: 27,147
Overview of Key Financials
Income Statement Highlights Balance Sheet Highlights
millions of RUR 2012 2013 Revenue 45,704 43,036 Cost of sales (34,765) (30,842) Gross profit 10,939 12,194 Gross profit margin 24% 28% Operating profit 3,382 1,568 Operating profit margin 7% 4% Profit (Loss) 1,997 (2,436) Adjusted EBITDA* 6,651 7,016 millions of RUR December 31, 2012 December 31, 2013 Total Assets 59,176 57,936 Total Liabilities 36,939 38,553 Total Equity 22,237 19,383 Property Plant & Equipment 33,915 36,172 Total Debt 27,180 27,074 Cash & Cash Equivalents** 894 503 Net Debt 26,286 26,571
** Cash & cash equivalents including restricted cash
Cash Flow Highlights
millions of RUR 2012 2013 Profit/ (Loss) before income tax 2,603 (1,883) Operating cash flows before working capital changes 6,506 6,544 Net cash from operating activities 7,085 9,797 Net cash used in investment activities (7,718) (6,109) Net cash from / (used in) financing activities 1,363 (3,439)
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* Adjusted EBITDA is calculated as earnings before income tax, interest expense, exchange gain/loss, depreciation, amortization, impairment and other non-cash items. Source: IFRS consolidated financial information for the year ended 31 December 2013