Q2 2011 Business and Financial Performance September 08, 2011 - - PowerPoint PPT Presentation

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Q2 2011 Business and Financial Performance September 08, 2011 - - PowerPoint PPT Presentation

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ZOMREX S.A. Q2 2011 Business and Financial Performance September 08, 2011 Content 1. Introduction 2. Business overview 3. Financials 4. Q3 2011 outlook 5. Q&A 2 ZOMREX S.A. Introduction Section 1 Introduction Speakers

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ZŁOMREX S.A.

Q2 2011 Business and Financial Performance

September 08, 2011

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2

Content

  • 1. Introduction
  • 2. Business overview
  • 3. Financials
  • 4. Q3 2011 outlook
  • 5. Q&A
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ZŁOMREX S.A.

Introduction

Section 1

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4

Introduction

Speakers

Krzysztof Zola CFO Member of the Board Age – 39 8 yrs with Złomrex

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5

Introduction

Q2 2011 Highlights

  • Stabilization of demand and prices after the improvement in the first quarter
  • Revenues’ increase by 39,8% compared to Q2 2010 value-wise and 19,1% tonnage-wise
  • Further increase in production capacities utilization
  • Significant further EBITDA improvement – PLN 40m, increased by 46% compared to Q1 2011

and by 40% compared to Q2 2010

  • GDP growth 4,3% in Poland
  • Polish steel production: increase by 15% Q2 2011 v. Q1 2011; 0% compared to Q2 2010
  • Finalization of domestic distribution division divestiture

54% 59% 79% 86% 636 000 COMBINED 37% 52% 70% 86% 261 000 HSJ 66% 64% 85% 86% 375 000 FERR Y 2010 Y 2009 Q1 2011 Q2 2011 UTYLIZATION RATE ANNUAL CAPACITY

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ZŁOMREX S.A.

Business overview

Section 2

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7

Business overview

Business environment

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

363,4 6% 385,7 Global 47,9 2% 48,8 EU (27) 2,3 0% 2,3 Poland million tonns Q2 2010 % YoY Q2 2011 CRUDE STEEL PRODUCTION (1) 2 020 15% 2 318 Bars 1 804 12% 2 014 Billets 895 10% 988 Scrap metal PLN / tonn Q2 2010 % YoY Q2 2011 UNIT PRICES (2)

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Business overview

Q2 2011 performance drivers

48 092 33% 64 138 Steel Products 47 902 36% 65 122 Billets 36 015

  • 22%

28 016 Scrap metal Tonns Q2 2010 % YoY Q2 2011 SALES 167 347 30% 218 207 Steel Products 86 412 52% 131 141 Billets 32 246

  • 14%

27 667 Scrap metal 000 PLN Q2 2010 % YoY Q2 2011 SALES

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Business overview

Segments

32 246 27 798 27 667 TOTAL SALES in '000 PLN 36 015 26 997 28 016 TOTAL SALES in TONNS 120 409 148 899 157 220 TOTAL INTERNAL USE in TONNS 152 978 172 323 183 183 TOTAL PURCHASES in TONNS 32 246 27 798 27 667 CONSOLIDATED SALES '000 PLN 271 228 184 OTHER 35 744 26 769 27 832 ZLMET SALES TO EXTERNAL CUSTOMERS Tonns ZJEL 40 954 52 768 63 023 HSJ 79 455 96 131 94 197 FERR INTERNAL USE Tonns ZJEL 30 277 36 016 36 994 HSJ 96 911 101 697 111 832 ZLMET 25 790 34 610 34 357 FERR PURCHASES FROM EXTERNAL SUPPLIERS Tonns Q2 2010 Q1 2011 Q2 2011 SCRAP METAL

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Business overview

Segments

86 412 98 038 131 141 TOTAL SALES in '000 PLN 47 902 45 871 65 122 TOTAL SALES in TONNS 54 702 79 408 71 249 TOTAL INTERNAL USE in TONNS 102 604 125 273 136 360 TOTAL PRODUCTION in TONNS TOTAL PURCHASES in TONNS 86 412 98 038 131 141 CONSOLIDATED SALES '000 PLN 6 11 OTHER ZJEL 535 2 236 5 256 HSJ 47 367 43 629 59 855 FERR SALES TO EXTERNAL CUSTOMERS Tonns ZJEL 34 505 43 131 50 588 HSJ 20 197 36 277 20 661 FERR INTERNAL USE Tonns ZJEL 35 040 45 367 55 844 HSJ 67 564 79 906 80 516 FERR PRODUCTION Tonns EXTERNAL SOURCES PURCHASES Tonns Q2 2010 Q1 2011 Q2 2011 BILLETS

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Business overview

Segments

167 347 168 265 218 207 TOTAL SALES in '000 PLN 48 092 59 534 64 138 TOTAL BULK PRODUCT SALES in TONNS 46 927 63 799 65 140 TOTAL PRODUCTION in TONNS 167 347 168 265 218 207 CONSOLIDATED '000 PLN SALES 30 264 39 155 43 838 HSJ 17 828 20 379 20 300 FERR Tonns SALES TO EXTERNAL CUSTOMERS 31 487 40 618 44 437 HSJ 15 440 23 181 20 703 FERR / ZW-WB Tonns PRODUCTION Q2 2010 Q1 2011 Q2 2011 FINISHED PRODUCTS

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ZŁOMREX S.A.

Financials

Section 3

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13

Financials

P&L

28 616 27 332 40 007 EBITDA

  • 11 212
  • 11 148
  • 10982

Depreciation and amortization 1 774 27 778 100 482 Profit for the period

  • 9 594

35 903 53 145 Profit/loss for the period from discontinued operations 21 614

  • 4 775

25 767 Income tax expense

  • 10 246
  • 3 350

21 570 Profit/Loss before tax

  • 27 650
  • 19 534
  • 7 455

Net financing costs

  • 27 650
  • 19 878
  • 11 561

Financial expenses 344 4 106 Financial income 17 404 16 184 29 025 EBIT

  • 4 364
  • 3 753
  • 4 396

Other expenses 4 874

  • 745

254 Other gains/(losses) - net

  • 12 606
  • 9 558
  • 9 433

Administrative expenses

  • 10 646
  • 7 486
  • 8 618

Distribution expenses 7 954 2 878 4 336 Other income 32 192 34 848 46 882 Gross profit

  • 253 813
  • 297 225
  • 352 832

Cost of sales 286 005 332 073 399 714 Revenue '000 PLN Q2 2010 Q1 2011 Q2 2011 INCOME STATEMENT

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Financials

Assets

1 666 886 1 125 450 1 005 669 TOTAL ASSETS 222 294

  • V. Assets of disposal groups and

discontinued operations 121 597 102 389 16 715

  • IV. Assets classified as held for sale

14 872 9 215 36 250

  • III. Cash and cash equivalents

5 918 79 083 34 861

  • 2. Other investments

315 629 267 876 251 936

  • 1. Trade and other receivables

321 547 346 959 286 797

  • II. Receivables

260 868 218 225 195 466

  • I. Inventories

941 178 676 788 535 228

  • B. TOTAL CURRENT ASSETS

66 819 36 136 65 764

  • VI. Deferred tax assets

19 284 19 321 18 561

  • V. Prepaid perpetual usufruct of land

14 731 4 051 4 610

  • IV. Investment property and other investments

2 339 256 244

  • III. Other receivables

582 605 369 187 362 933

  • II. Property, plant and equipment

39 930 19 711 18 329

  • I. Intangible assets

725 708 448 662 470 441

  • A. TOTAL NON-CURRENT ASSETS

'000 PLN Q2 2010 Q1 2011 Q2 2011 ASSETS

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Financials

Equity and Liabilities

1 666 886 1 125 450 1 005 820 TOTAL EQUITY AND LIABILITIES 175 138

  • III. Liabilities of disposal group classified as

held for sale 1 162 403 375

  • 8. Provisions for payables

327 1 951

  • 7. Income tax payable

6 051 3 877 1 261

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

7 756 2 954 2 853

  • 4. Defferd government grants and other

deffered income 364 845 296 303 222 082

  • 3. Trade payables

105 103 82 108 28 665

  • 2. Bank overdraft

159 357 100 396 43 631

  • 1. Interest-bearing loans and borrowings

644 601 486 041 300 818

  • II. Current liabilities

18 736 6 285 4 579

  • 3. Other

541 656 510 240 478 040

  • 2. Interest-bearing loans and borrowings

39 475 11 983 10 963

  • 1. Employee benefits obligation

599 867 528 508 493 582

  • I. Non-current liabilities

1 419 606 1 014 549 794 400

  • B. LIABILITIES

112 645 79 326 102 448

  • III. Minority interest

86 944

  • 16 116

61 281

  • II. Reserves and retained earnings

47 691 47 691 47 691

  • I. Issued share capital

247 280 110 901 211 420

  • A. EQUITY

'000 PLN Q2 2010 Q1 2011 Q2 2011 EQUITY AND LIABILITIES

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Financials

Cash Flow

  • Q2 2011 working capital outflow at pln (-) 27

6 824

  • 75 587
  • 123 236

NET INCREASE IN CASH

  • 52 096
  • 21 092
  • 97 232
  • C. FROM FINANCING ACTIVITIES

8 232

  • 704
  • 2 118
  • B. FROM INVESTING ACTIVITIES

50 688

  • 53 791
  • 23 886
  • A. FROM OPERATING ACTIVITIES

'000 PLN Y 2010 Q1 2011 Q2 2011 CASH FLOW

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17

Financials

Metrics

759 310 791 244 688 043 683 529 514 086 Net debt 220 141 247 280 98 360 110 901 211 420 Equity

  • 21,2%

0,6%

  • 16,8%

8,4% 25,1% Net profit margin 0,0% 10,0% 2,8% 8,2% 10,0% EBITDA margin 143 101 53 94 65 Receivables turnover (days) 127 93 72 66 50 Inventories turnover (days) 0,65 0,83 0,97 0,94 1,13 Quick ratio 0,98 1,15 1,19 1,18 1,72 Liquidity ratio Q1 2010 Q2 2010 Y 2010 Q1 2011 Q2 2011 MAIN METRICS

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ZŁOMREX S.A.

Q3 2011 Outlook

Section 4

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Q3 2011 outlook

  • Slowdown in GDP growth below 4%
  • Slight decrease of demand and stabilization of prices
  • Further improvement in profitability
  • Utilization rate at Q2 2011 level
  • Finalization of internal reorganization
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Organization Chart

FERROSTAL

92.4%

HoldCo

Scrap Other Production HSW-HSJ OMS

100% Non-core business and non-operational subsidiaries

COGNOR

64,4%

OTHER ACTIVITIES

ZW-WB

100%

ZLOMREX METAL ZIF

99,9%

SCRAP TRADING STEEL PRODUCTS PRODUCTION

100%

Other Production

Non-core business and non-operational subsidiaries 100%

Złomrex

MERGER

FERROSTAL – 375 kt steel melting shop - standard and middle-alloy steels ZW-WB – 198 kt rolling mill - flat bars, plain bars, squares HSW-HSJ – 261kt steel melting shop - high-alloy steels + 178kt rolling mill – high diameter bars + 101kt rolling mill – thick sheets ZŁOMREX METAL – scrap collection network in 18 main locations across whole Poland

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ZŁOMREX S.A.

Q&A

Section 5