Q1 2011 Business and Financial Performance June 07, 2011 Content - - PowerPoint PPT Presentation

ZŁOMREX S.A.

Q1 2011 Business and Financial Performance

June 07, 2011

2

Content

• 1. Introduction
• 2. Business overview
• 3. Financials
• 4. Q2 2011 outlook
• 5. Q&A

ZŁOMREX S.A.

Introduction

Section 1

4

Introduction

Speakers

Krzysztof Zola CFO Member of the Board Age – 38 8 yrs with Złomrex

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Introduction

Q1 2011 Highlights

• Substantial Improvement in demand and increase of prices
• Revenues’ increase by 93,5% compared to Q1 2010 value-wise and 52,2% tonnage-

wise

• Fair crude production capacities utilization
• Q1 EBITDA at the level of the annual 2010
• GDP growth over 4% in Poland
• Steel production increase by 11% in Poland: Q1 2011 v. Q1 2010
• Finalization of International distribution division divestiture

69,5% 45 367 65 250 HSJ 85,2% 79 906 93 750 FERR Tonnes UTYLISATION PRODUCTION CAPACITY CAPACITIES & PRODUCTION Q1 2011

ZŁOMREX S.A.

Business overview

Section 2

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Business overview

Business environment

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

263,3 342,4 8% 371,5 Global 26,5 42,1 8% 45,6 EU (27) 1,4 1,8 11% 2,0 Poland million tonnes Q1 2009 Q1 2010 % YoY Q1 2011 CRUDE STEEL PRODUCTION1 1 799 1 649 41% 2 323 Bars 1 427 1 387 54% 2 137 Billets 600 776 34% 1 038 Scrap metal PLN / Tonne Q1 2009 Q1 2010 % YoY Q1 2011 UNIT PRICES2

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Business overview

Q1 2011 performance drivers

37 076 155% 57 348 Products (continued operations) 32 678 140% 45 871 Billets 15 773 171% 26 997 Scrap metal Tonnes Q1 2010 % YoY Q1 2011 SALES

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Business overview

Segments

12 248 27 798 TOTAL SALES in '000 PLN 15 773 26 997 TOTAL SALES in TONNES 86 990 148 899 TOTAL INTERNAL USE in TONNES 96 559 172 323 TOTAL PURCHASES in TONNES 12 248 27 798 CONSOLIDATED '000 PLN SALES 250 228 OTHER 15 523 26 769 ZLMET SALES TO EXTERNAL CUSTOMERS Tonnes ZJEL 27 550 52 768 HSJ 59 440 96 131 FERR INTERNAL USE Tonnes ZJEL 19 205 36 016 HSJ 64 500 101 697 ZLMET 12 854 34 610 FERR PURCHASES FROM EXTERNAL SUPPLIERS Tonnes Q1 2010 Q1 2011 SCRAP METAL

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Business overview

Segments

45 332 98 038 TOTAL SALES in '000 PLN 32 678 45 871 TOTAL SALES in TONNES 39 333 79 408 TOTAL INTERNAL USE in TONNES 72 011 125 273 TOTAL PRODUCTION in TONNES TOTAL PURCHASES in TONNES 45 332 98 038 CONSOLIDATED SALES '000 PLN 6 OTHER ZJEL 2 236 HSJ 32 678 43 629 FERR SALES TO EXTERNAL CUSTOMERS Tonnes ZJEL 22 764 43 131 HSJ 16 569 36 277 FERR INTERNAL USE Tonnes ZJEL 22 764 45 367 HSJ 49 247 79 906 FERR PRODUCTION Tonnes EXTERNAL SOURCES PURCHASES Tonnes Q1 2010 Q1 2011 BILLETS

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Business overview

Segments

ZJEL 22 261 38 810 HSJ 14 815 18 538 FERR ZLOM SALES TO EXTERNAL CUSTOMERS Tonnes ZJEL 4 509 1 841 FERR 345 HSJ ZLOM SALES OF PRODUCTION TO DISTIBUTION Tonnes ZJEL 21 038 40 618 HSJ FERR 13 644 23 181 ZWWB PRODUCTION Tonnes Q1 2010 Q1 2011 FINISHED PRODUCTS

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Business overview

Segments

323 391 312 970 TOTAL SALES in '000 PLN 61 667 64 507 TOTAL BULK PRODUCT SALES in TONNES 81 606 43 781 TOTAL RETAIL SALES in TONNES 34 682 63 799 TOTAL PRODUCTION in TONNES 323 391 312 970 CONSOLIDATED SALES '000 PLN 899 2 326

• retail

OTHER 18 253 5 360

• bulk product

60 717 19 676

• retail

COGAT N/C

• bulk product

5 N/C

• retail

STX 6 338 1 799

• bulk product

19 985 21 779

• retail

COG

ZŁOMREX S.A.

Financials

Section 3

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Financials

P&L

38 28 138 27 332 EBITDA

• 13 035
• 46 348
• 11 148

Depreciation and amortyzation

• 15 647
• 166 977

27 778 Profit for the period 4 420

• 88 118

35 903 Profit/loss for the period from discontinued operations

• 13 180
• 8 970
• 4 775

Income tax expense

• 6 887
• 69 889
• 3 350

Profit/Loss before tax Excess in the net fair value of acquired assets over cost Share of profits of associates 6 110

• 51 679
• 19 534

Net financing costs

• 14 711
• 66 121
• 19 878

Financial expenses 20 821 14 442 344 Financial income

• 12 997
• 18 210

16 184 EBIT

• 2 970
• 18 359
• 3 753

Other expenses 9 815 10 301

• 745

Other gains/(losses) - net

• 10 410
• 53 661
• 9 558

Administrative expenses

• 3 142
• 33 029
• 7 486

Distribution expenses 2 283 9 583 2 878 Other income

• 8 573

66 955 34 848 Gross profit

• 180 218
• 927 510
• 297 225

Cost of sales 171 645 994 465 332 073 Revenue '000 PLN Q1 2010 Y 2010 Q1 2011 INCOME STATEMENT

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Financials

Assets

1 556 205 1 448 250 1 125 450 TOTAL ASSETS 544 534

• V. Assets of disposal groups and discontinued operations

223 065 103 733 102 389

• IV. Assets classified as held for sale

13 389 9 337 9 215

• III. Cash and cash equivalents

5 305 10 79 083

• 2. Other investments

267 370 144 720 267 876

• 1. Trade and other receivables

272 675 144 730 346 959

• II. Receivables

255 046 182 640 218 225

• I. Inventories

764 175 984 974 676 788

• B. TOTAL CURRENT ASSETS

43 794 41 006 36 136

• VI. Deferred tax assets

46 007 19 419 19 321

• V. Prepaid perpetual usufruct of land

5 278 4 164 4 051

• IV. Investment property and other investments

11 274 241 256

• III. Other receivables

645 119 377 959 369 187

• II. Property, plant and equipment

40 558 20 487 19 711

• I. Intangible assets

792 030 463 276 448 662

• A. TOTAL NON-CURRENT ASSETS

'000 PLN Q1 2010 Y 2010 Q1 2011 ASSETS

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Financials

Equity and Liabilities

1 556 205 1 448 250 1 125 450 TOTAL EQUITY AND LIABILITIES 152 775 371 101

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

801 403 403

• 8. Provisions for payables

300

• 7. Income tax payable

1 690 4 735 3 877

• 6. Employee benefits obligation
• 5. Other financial liabilities

1 856 1 007 2 954

• 4. Deffered government grants

349 936 253 205 296 303

• 3. Trade payables

113 954 86 782 82 108

• 2. Bank overdraft

157 468 107 376 100 396

• 1. Interest-bearing loans and borrowings

626 005 453 508 486 041

• II. Current liabilities

18 899 9 938 6 285

• 3. Other

501 277 503 222 510 240

• 2. Interest-bearing loans and borrowings

37 108 12 121 11 983

• 1. Employee benefits obligation

557 284 525 281 528 508

• I. Non-current liabilities

1 336 064 1 349 890 1 014 549

• B. LIABILITIES

87 576 79 574 79 326

• III. Minority interest

84 874

• 28 905
• 16 116
• II. Reserves and retained earnings

47 691 47 691 47 691

• I. Issued share capital

220 141 98 360 110 901

• A. EQUITY

'000 PLN Q1 2010 Y 2010 Q1 2011 EQUITY AND LIABILITIES

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Financials

Cash Flow

6 340 6 824

• 75 587

NET INCREASE IN CASH

• 20 994
• 52 096
• 21 092
• C. FROM FINANCING ACTIVITIES

8 669 8 232

• 704
• B. FROM INVESTING ACTIVITIES

18 665 50 688

• 53 791
• A. FROM OPERATING ACTIVITIES

'000 PLN Q1 2010 Y 2010 Q1 2011 CASH FLOW (continued operations)

• working capital outflow at pln (-) 82.0 million, including pln (-) 30.2

million within domestic distribution business.

• Q1 2011 consolidated inventories included pln 39,461 thousand of

inventories held within our domestic distribution. The same applies for trade receivables: pln 41,661 thousand and trade liabilities - and pln 42,856 thousand.

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Financials

Metrics

759 310 688 043 683 529 Net debt 220 141 98 360 110 901 Equity

• 9,1%
• 16,8%

8,4% Net profit margin 0,0% 2,8% 8,2% EBITDA margin 125 43 61 Receivables turnover adjusted (days) 143 53 94 Receivables turnover (days) 107 57 54 Inventories turnover adjusted (days) 127 72 66 Inventories turnover (days) 0,65 0,97 0,94 Quick ratio 0,98 1,19 1,39 Liquidity ratio Q1 2010 Y 2010 Q1 2011 MAIN METRICS

• Adjusted metrics exclude inventories and receivables attributable

to the domestic Distribution Division

ZŁOMREX S.A.

Q2 2011 Outlook

Section 4

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Q2 2011 outlook

• Polish GDP over 4%
• Further increase in demand and stabilization of prices
• Further improvement in profitability
• Fair utilization of production levels
• Divestiture of the domestic distribution business
• The Dutch auction and consent solicitation

ZŁOMREX S.A.

Q&A

Section 5