SHAREHOLDERS GENERAL MEETING BUSINESS YEAR 2018 CHIEF EXECUTIVE - - PowerPoint PPT Presentation

SHAREHOLDERS’ GENERAL MEETING BUSINESS YEAR 2018

CHIEF EXECUTIVE OFFICER’S REPORT

BERNARDO VELÁZQUEZ HERREROS

Shareholders’ General Meeting Business Year 2018

Madrid, 11 April 2019

CEO’s REPORT

INTRODUCTION

1

98 53 7 77 58 80 83 16

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Results after taxes and minority interests

Million Euros

2017 2018

CEO’s REPORT

RESULTS

2

EBITDA

€480M

NET SALES

€5,011M

+ 8.3%

higher than 2017 Result after taxes and minority interests

€237M

Highest turnovers in the last

10 years

+1.3%

Debt

€552M

• 9.4%

With respect to 2017

1.15 no. times

Debt / EBITDA ratio

€2M

In financial expenses

• 89%

With respect to 2017 With respect to 2017

CEO’s REPORT

RESULTS

2

And in our melt shops we have produced 2.44 millon

tons.

CEO’s REPORT

RESULTS

2

We have processed 1.75 million tons of cold rolling, the best

result of our history.

CEO’s REPORT

RESULTS

2

We judge these results to be positive as they were obtained at a context of great volatility in which we had to quickly react to changes in the market and adapt our business trying to alleviate the classical tendency of our sector in

• rder to take advantage of the opportunities

surged in the first half of the year and to assure cash generation and debt reduction.

CEO’s REPORT

GLOBAL ECONOMY

3

Stainless steel is a basic material used as raw material in numerous industries, what makes of it a good indicator of economy’s performance.

CEO’s REPORT

GLOBAL ECONOMY

3

EUROPE

GDP EVOLUTION

2.4% 2.2% 1.8% 1.4% 1 Q 2 Q 3 Q 4 Q

INDUSTRIAL PRODUCTION INDEX

3.1% 2.5% 1.1%

• 1.1%

1 Q 2 Q 3 Q 4 Q

EUROPEAN ECONOMY SLOWDOWN WITH A WEAKER GROWTH FINISHING THE YEAR IN NEGATIVE

CEO’s REPORT

GLOBAL ECONOMY

3

CHINA

GDP EVOLUTION INDUSTRIAL PRODUCTION INDEX

6.8% 6.7% 6.5% 6.4% 1 Q 2 Q 3 Q 4 Q 6.8% 6.6% 6.0% 5.7% 1 Q 2 Q 3 Q 4 Q

PROGRESSIVE WEAKENING OF CHINESE ECONOMY DOWNWARD EVOLUTION

CEO’s REPORT

GLOBAL ECONOMY

3

UNITED STATES

GDP EVOLUTION INDUSTRIAL PRODUCTION INDEX

STRENGTH OF THE NORTH AMERICAN ECONOMY NOURISHED BY PROTECTIONIST MEASURES, TRADE NEGOTIATIONS AND FISCAL POLICIES OUR PRODUCTION TAKES ADVANTAGE OF THE GOOD SHAPE OF NORTH AMERICAN ECONOMY

2.6% 2.9% 3.0% 3.1% 1 Q 2 Q 3 Q 4 Q 3.4% 3.4% 5.1% 4.3% 1 Q 2 Q 3 Q 4 Q

P r e c i o s m e d i o s c o n t a d o / t r e s m e s e s U S D / t .

8.000 9.000 10.000 11.000 12.000 13.000 14.000 15.000 16.000 17.000

E F M A M J JL AG S O N D

CEO’s REPORT

RAW MATERIALS: NICKEL

4

• 5,090 $/T

From 2 January to 31 December 2018

1 5 , 7 5 5 $ / t 1 0 , 6 6 0 $ / t

+3,045 $/T

1 2 , 7 1 0 $ / t

2 January 7 June 31 December

Aver ag e p rice in cash /thr ee mon ths US D/t .

CEO’s REPORT

STAINLESS STEEL MARKET

5

 A VERY POSITIVE FIRST HALF WITH AN UPWARD TREND IN PRICES AND STOCKS REPLENISHMENT  DRASTIC REDUCTION OF INVENTORIES IN THE SECOND HALF, SPECIALLY IN THE FOURTH QUARTER

CEO’s REPORT

STAINLESS STEEL MARKET

5

INDONESIA

5%

CHINA HOLDS THE

52%

OF STAINLESS STEEL GLOBAL PRODUCTION

CEO’s REPORT

STAINLESS STEEL MARKET

5

OTHER MEASURES ANTI-DUMPING

Germany, Austria, Belgium, Bulgaria, Cyprus, Croatia, Denmark, Slovakia, Slovenia, Spain, Estonia, Finland, France, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxemburg, Malta, Netherlands, Poland, Portugal, United Kingdom, Czech Republic, Romania, Sweden, Turkey, India, Japan, China, Malaysia, South Korea, Indonesia, Thailand, Taiwan, Vietnam, USA, Mexico, Chile, Brazil

Countries with protectionist measures:

21 countries

• f the 22 countries

manufacturing stainless steel have implemented protective measures

CEO’s REPORT

STAINLESS STEEL MARKET

5

USA

Imposition of trade barriers to steel imports

Present in 5 continents Selling in more than 80 countries More than 12,000 Customers in the world 6 Factories in 4 continents

1

EU

Safeguard measures

2

CEO’s REPORT

STAINLESS STEEL MARKET

8 March -Section 232 of the Trade Expansion Act of 1962 25% Tariffs 16% reduction of imports Implementation of provisional safeguard measures on 18 July 7% increase of imports to Europe 1 February 2019. The definitive safeguard measures enter into force

5

CEO’s REPORT

ACERINOX RESULTS +35.3%

EBITDA Compared with 2017 North American Stainless

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• 50.1%

EBITDA Compared with 2017 Acerinox Europa SAU

+62.7%

EBITDA Compared with 2017 Roldán S.A.

118 151 154 58

1 Q 2 Q 3 Q 4 Q

CEO’s REPORT

ACERINOX RESULTS:EBITDA

Million Euros

480

million Euros

480

million Euros

(1.8% less than in 2017) (1.8% less than in 2017)

480

million Euros

(1.8% less than in 2017)

22

Inventory adjustment

6

7

M E L T S H O P C O L D R O L L I N G H O T R O L L I N G

6 3 9 , 2 3 2 4 7 0 , 5 5 7 5 6 0 , 7 9 9 6 9 , 6 6 5

2 n d Q u a r t e r

6 6 8 , 0 7 1 4 6 1 , 5 6 5 5 7 7 , 4 7 0 6 4 , 6 0 2

1 s t Q u a r t e r

6 1 6 , 6 6 9 4 4 2 , 7 3 7 5 2 4 , 4 6 6 6 0 , 6 8 2

3 r d Q u a r t e r

5 1 6 , 6 4 1 3 7 7 , 4 7 0 4 5 7 , 7 3 8 5 9 , 6 7 9

4 t h Q u a r t e r

L O N G P R O D U C T

CEO’s REPORT

ACERINOX PRODUCTION

Acerinox production, 2.44 million tons, represents a 4.8% of world production.

CEO’s REPORT

FINANCIAL BALANCE

The measures adopted have enabled us to obtain 171 million euros in free cash flow, after making investments for the amount of €155 million.

8

CEO’s REPORT

SHAREHOLDERS

Shareholders remuneration

11%

Remuneration per share

0.50€

Buy-Back Program

2% THE VALUE OF CONFIDENCE

9

CEO’s REPORT

INVESTMENTS IN FIXED ASSETS

10

ZM6 cold roller Bright annealing (BA) line

The implementation of tariffs has facilitated, without a doubt, its penetration in the market.

North American Stainless

CEO’s REPORT

INVESTMENTS IN FIXED ASSETS

ZM-7 cold roller AP-5 annealing and pickling line Complete remodeling of AP-3 line

10

These new investments will contribute to improve the quality

• f our products while reducing

manufacturing costs and emissions.

Acerinox Europa

CEO’s REPORT

TOTAL INVESTMENT IN FIXED ASSETS

11

Estas nuevas inversiones como

• tras acometidas, contribuirán a

mejorar nuestra calidad y costes, así como la reducción de emisiones. 8 8 3 3 1 4 3 5 1 1 4 4

A C E R I N O X E U R O P A S A U N A S C O L U M B U S B A H R U R O L D A N A C E R I N O X S . A . T O T A L

Million Euros

CONSTRUCTION AEROESPATIAL IND. ARCHITECTURE TRANSPORT APPLIANCES MEDICAL IND. HEALTHCARE FOOD IND. …

+5.5%

Growth of stainless steel in 2018 CEO’s REPORT

STAINLESS STEEL APPLICATIONS

12

CEOS’s REPORT

STAINLESS STEEL APPLICATIONS

12

• 35%

Less carbon emissions per manufactured ton than the world average of stainelss steel manufacturers

Source: ISSF

CEO’s REPORT

COST OF CONSUMABLES

13

The increase in prices of the main consumables and energy implied a 65 million euros overrun if we compare them with 2017 prices.

The high cost of electricity in Spain puts in risk the viability

• f Spanish industry

CEO’s REPORT

COST OF ENERGY

14

Compared to the average of similar industries in France and Germany, it implies an almost 40% overrun.

Source: AEGE

CEO’s REPORT

EXCELLENCE PLANS

EXCELLENCE PLANS (2009-2018)

73%

I Excellence Plan: 2009-2010

59%

II Excellence Plan: 2011-2012

88%

III Excellence Plan: 2013-2014

74%

IV Excellence Plan: 2015-2016

55%

V Excellence Plan: 2017-2018

Annual recurrent saving of 27 million euros

15

Goal: €50M Goal: €67M Goal: €60M Goal: €90M Goal: €133M

CEO’s REPORT

EXCELLENCE 360º

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PRODUCTION PRODUCTION RAW MATERIALS RAW MATERIALS SALES SALES SUPPLY CHAIN SUPPLY CHAIN

EXCELLENCE 360º

2019 - 2023

EXCELLENCE 360º

2019 - 2023

 Reliability  Quality  Productivity  Optimization of processes  Anticipation  Supply chain control  Logistics  Increase of sales  Agile management  Reputation

CEO’s REPORT

EXCELLENCE 360º

• The customer in the center of

business: Reliance of deliveries Time reduction Chain visibility

• Integration from strategic to
• perative planning
• Integral optimization of business
• Advanced planning

EXCELLENCE 360º

Data Analytics Collaboration R+D+I Commercial Sensorization Manteinance Inspection through Artificial Vision Predictive Quality

Recurrent annual savings of 125 million euros at the end of it Recurrent annual savings of 125 million euros at the end of it

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CEO’s REPORT

ANNUAL REPORT

17

ANNUAL REPORT 2018

CEO’s REPORT

ACCIDENTS RATE

18

2010 2011 2012 2013 2014 2015 2016 2017 2018

9.5 7.5 5.4 5.8 5.0 3.3 3.3 2.6 2.2

Accidents rate = Total no. injuries and illnesses * 200,000 / No. hours worked

Zero-accidents goal

CEO’s REPORT

CORPORATE SOCIAL RESPONSIBILITY

19

Environmental investments and expenses € 103,982,581 Human capital 6,709 people Training hours received 368,243 hours Investment in R+D+i € 9,547,000

CEO’s REPORT

ACKNOWLEDGEMENT

20

1970-2019

49 YEARS OF COMMON HISTORY

THANK YOU VERY MUCH FOR YOUR ATTENTION