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FY 2023
Results Presentation
FY 2023 RESULTS PRESENTATION
2
Disclaimer
This document may contain forward looking information and statements about ACERINOX, S.A., its subsidiaries and/or its management, including but not limited to 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, operations, business, strategy, capital expenditures, results of operations, markets and products.
This communication also includes certain disclosures which contain "forward-looking statements". These forward-looking statements generally include statements related to the proposed transaction, including financial estimates and statements as to the expected timing, completion and effects of the proposed transaction. These forward looking statements also 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, operations, business, strategy, capital expenditures, results of operations, markets and products. In most cases, words or phrases such as "anticipates," "believes," "confident," "could," "estimates," "expects," "intends," "target," "potential," "may," "will," "might," "plans," "path," "should," "approximately," "our planning assumptions," "forecast", "outlook" and variations or the negative of these terms and similar expressions identify forward-looking statements. These forward-looking statements, including statements regarding the proposed transaction and financial projections and estimates, are based largely on information currently available to ACERINOX's management and ACERINOX's management's current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results to differ materially from historical results or those expressed or implied by such forward-looking statements. These forward looking statements or forecasts may also 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. Although ACERINOX, S.A. believes its expectations are based on reasonable estimates and assumptions, they are not guarantees of performance, prices, results of operations, benefits or dividend payout policies. There is no assurance that ACERINOX's expectations will occur or that our estimates or assumptions will be correct, and ACERINOX, S.A. cautions investors and all others not to place undue reliance on such forward-looking statements.
Important factors, risks and uncertainties that could cause actual results to differ materially from such plans, estimates or expectations include but are not limited to: (i) the completion of the proposed transaction on the anticipated terms and timing, including obtaining required shareholder and regulatory approvals, and the satisfaction of other conditions to the completion of the proposed transaction; (ii) the risk that disruptions from the proposed transaction (including the ability of certain customers to terminate or amend contracts upon a change of control) can harm the business of the parties involved, including current plans and operations, including during the pendency of the proposed transaction;
- potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed transaction; (iv) unpredictability and severity of catastrophic events, including but not limited to acts of terrorism, outbreaks of war or hostilities or the COVID-19 pandemic, as well as management's response to any of the aforementioned factors; (v) the possibility that the proposed transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (vi) the occurrence of any event, change or other circumstance that could give rise to the termination of the proposed transaction; and (vii) those risks and uncertainties set forth in ACERINOX's most recent annual report, as such risk factors may be amended, supplemented or superseded from time to time by other reports filed by ACERINOX, S.A. with the Spanish National Securities Market Commission (the "CNMV") from time to time, which are available via the CNMV's website at https://www.cnmv.es.
These risks, as well as other risks associated with the proposed transaction, will be more fully discussed in the proxy statement that will be filed with the SEC in connection with the proposed transaction. There can be no assurance that the proposed transaction will be completed, or if it is completed, that it will close within the anticipated time period. These factors should not be construed as exhaustive and should be read in conjunction with the other forward-looking statements. The forward-looking statements relate only to events as of the date on which the statements are made. 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. If one or more of these or other risks or uncertainties materialize, or if ACERINOX's underlying assumptions prove to be incorrect, ACERINOX's actual results may vary materially from what ACERINOX may have expressed or implied by these forward-looking statements. ACERINOX cautions that you should not place undue reliance on any of its forward-looking statements. 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. You should specifically consider the factors identified in this communication that could cause actual results to differ. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for ACERINOX to predict those events or how they may affect ACERINOX.
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 ACERINOX 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 on securities issued by ACERINOX, S.A., in particular, by the analysts and investors reading this document. All the aforesaid persons are invited to consult the 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 CNMV.
FY 2023 RESULTS PRESENTATION
Acerinox: 2023 another milestone year
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Financial & operating |
Net sales |
of €6.6 billion |
EBITDA |
of €703 million |
Operating cash flow |
of €481 million |
Adjusted ROCE(1) |
of 17.9% |
Strategy
Value added:
Diversification through HPA
- VDM record EBITDA of €175 million
- Potential Haynes acquisition
Organic growth:
Investments in NAS and VDM
Excellence:
Beyond Excellence:
target of €100 million at EBITDA level
Increasing shareholder returns to €0.62 in 2024
ESG
Highest recognition by
EcoVadis: Platinum
award
SAFETY performance:
24% reduction in
accident rate vs FY 2022
CARBON EMISSIONS
performance:
3% reduction in Scope 1+2
intensity vs FY 2022
(1): ROCE stripping out €156 million of Bahru Stainless impairment in Q4 2023
FY 2023 Results Presentation
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Contribution to circular economy and sustainable development
Sustainability targets 2030
360º Positive Impact Plan
Eco-efficiency
and
climate change
mitigation
GHG emissions (Scope 1&2): 11%
reduction [2030 target: 20% intensity reduction from 2015 baseline]
Water withdrawal: 18% reduction
[2030 target: 20% intensity reduction from
2015 baseline]
Energy(*): 8% increase [2030 target: 7.5 % intensity reduction from 2015 baseline]
Engaged team,
culture, diversity,
and safety
Safety: 24% reduction from FY 2022
[target: 10% YoY reduction in LTIFR]
Diversity: 13.28% women [2030 target: women account for 15% of workforce]
Most significant
sustainability initiatives
in 2023
Eco-efficiency and | ● | Energy efficiency initiatives allows | |
climate change | ~3% carbon intensity reduction | ||
mitigation | ● | Renewable energy increased 50% | |
Circular economy and | ● | Launch of ECO ACX | |
● | Slag CE marks for different | ||
sustainable products | applications | ||
● | Water footprint for more sustainable | ||
use | |||
Committed team, |
Circular economy and | |
sustainable products | Recycling |
100% of: | |
Grinders / Oily paper / Oil | |
(decantation, flame-retardant | |
Waste reduction: 80% valorization | and hydraulic) / Process scrap |
& metal recovered / Machined | |
[2030 target: 90% valorization] | |
electrodes / | |
Paper / Plastic / | |
Cardboard / Others |
culture, diversity, | ● | Implementation of HSE Cardinal Rules | |
led to safety improvements | |||
and safety | ● | Multicultural diversity | |
Supply chain and | ● | ESG Supplier Assessment | |
impact in the | ● | Social Action Framework | |
community | implementation | ||
Ethical, responsible, | ● | New whistleblowing channel | |
and transparent | |||
● | Updated Code of Conduct for business | ||
governance | |||
partners |
(*) Low capacity utilization impacted this KPI
FY 2023 Results Presentation
Q4 & FY 2023: Destocking cycle
USA
EUROPE
Sources: CRU, LME.
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Q4 & FY MARKET HIGHLIGHTS
STAINLESS STEEL
Apparent demand of flat products up 7% YoY in Q4, down 20% in 2023 Inventories already normalized
Imports of flat products down 28% in 2023 Less base price volatility
Apparent demand of flat down 2% in Q4, down 22% in 2023 Inventories already normalized
Imports of flat down 45% in Q4, down 55% in 2023
Prices remain at historical lows but slight recovery in Q4
EU investigating anti-circumvention in Taiwan-Turkey-Vietnam
HIGH-PERFORMANCE ALLOYS (HPA)
HPA market driven by strong demand
Oil and gas market continued to recover from investments postponed during the pandemic
Solid demand in chemical process industry (CPI) led by the hydrogen sector
Weaker demand in electronics and electrical engineering
industry | favorable | challenging |
FY 2023 Results Presentation
Q4 2023: Resilient results
Reflects strategy of growth, diversification & strength
Income statement | Cash flow statement | |||
Sales of €1.5 billion | Strong | |||
operating cash flow | ||||
of €260 million | ||||
Resilient EBITDA | ||||
of €96 million | Operating working capital | |||
reduction of | ||||
Impairment of Bahru | €258 million | |||
Stainless: €156 million |
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Balance sheet
Net financial debt (NFD)
reduction: €159 million
NFD / EBITDA 0.49x
Strong adjusted ROCE(1): 18%
Inventory reduction of €211 million in Q4
(1): ROCE stripping out €156 million of Bahru Stainless impairment in Q4 2023
FY 2023 Results Presentation
Q4 & FY 2023: Consolidated group highlights
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Remarkable
2023 EBITDA
of €703 million:
Q4:€96 million
+6% YoY
Downward
inventory adjustment
of €65 million
Strong cash generation in Q4
NFD of €341 million
- Adjusted EBIT: Stripping out €156 million of Bahru Stainless impairment in Q4 2023 (€204 million in Q4 2022)
Q4 2023 | |
Melting production | 486 |
(thousands of metric tons) | |
Net sales | 1,529 |
EBITDA | 96 |
EBITDA margin | 6% |
* Adjusted EBIT | 52 |
Adjusted EBIT | 3% |
margin | |
EBIT | -105 |
EBIT margin | -7% |
Results before taxes | -111 |
and minorities | |
Results after taxes | -119 |
and minorities | |
Operating cash flow | 260 |
(before investments) | |
Net financial debt | 341 |
Q4 2022 | % Q4 23 / | FY 2023 | FY 2022 | % FY 23 / |
Q4 22 | FY 22 | |||
397 | +22% | 1,946 | 2,190 | -11% |
1,693 | -10% | 6,608 | 8,688 | -24% |
90 | +6% | 703 | 1,276 | -45% |
5% | 11% | 15% | ||
41 | +26% | 530 | 1,080 | -51% |
2% | 8% | 12% | ||
-163 | +36% | 374 | 876 | -57% |
-10% | 6% | 10% | ||
-178 | +38% | 355 | 831 | -57% |
-185 | +36% | 228 | 556 | -59% |
517 | -50% | 481 | 544 | -12% |
440 | -23% | 341 | 440 | -23% |
FY 2023 Results Presentation
Q4 & FY 2023: Stainless steel highlights
Million EUR | Q4 2023 Q4 2022 | % Q4 23 / | FY 2023 FY 2022 | % FY 23 / |
Q4 22 | FY 22 |
Melting production | 468 | 379 | +24% | 1,869 | 2,108 | -11% |
(thousands of metric tons) | ||||||
Net sales | 1,166 | 1,351 | -14% | 5,195 | 7,426 | -30% |
EBITDA | 50 | 70 | -28% | 533 | 1,151 | -54% |
EBITDA margin | 4% | 5% | 10% | 16% | ||
Amortization and depreciation | -35 | -41 | -15% | -138 | -161 | -14% |
* Adjusted EBIT | 15 | 29 | -48% | 393 | 987 | -60% |
Adjusted EBIT margin | 1% | 2% | 8% | 13% | ||
EBIT | -141 | -175 | -19% | 237 | 783 | -70% |
EBIT margin | -12% | -13% | 5% | 11% | ||
Operating cash flow | 179 | 446 | -60% | 475 | 648 | -27% |
(before investments) | ||||||
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FY EBITDA: €533 million 10% margin
FY operating cash flow
of €475 million
Efficient working capital
management
* Adjusted EBIT: Stripping out €156 million of Bahru Stainless impairment in Q4 2023 (€204 million in Q4 2022)
FY 2023 Results Presentation
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Q4 & FY 2023: High-performance-alloys highlights
Record full-year
EBITDA of
€175 million
Decrease of €47 million in
operating working capital in Q4
Operating cash flow of €81 million in Q4
Million EUR | Q4 2023 Q4 2022 | % Q4 23/ | FY 2023 |
Q4 22 | |||
Melting production | 18 | 19 | -2% | 76 |
(thousands of metric tons) | ||||
Net sales | 366 | 341 | +7% | 1,437 |
EBITDA | 46 | 21 | +122% | 175 |
EBITDA margin | 13% | 6% | 12% | |
Amortization and depreciation | -6 | -6 | -4% | -24 |
EBIT | 40 | 15 | +170% | 151 |
EBIT margin | 11% | 4% | 11% | |
Operating cash flow | ||||
81 | 72 | +13% | 7 | |
(before investments) | ||||
FY 2022 | % FY 23/ |
FY 22 | |
82-7%
1,262 +14%
125 +40%
10%
-24 +1%
102 +49%
8%
-104 -
FY 2023 Results Presentation
Q4 & FY 2023: Capital allocation
Q4 Million EUR
FY
10
Q4 Highlights
Strong operating cash flow (OCF) of €260 million
Debt reduction of €159 million
driven by €258 million
operating working capital (OWC) reduction
FY Highlights
OCF €481 million
OWC decreased €79 million
Shareholder returns of €150 million
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Disclaimer
Acerinox SA published this content on 29 February 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 March 2024 11:12:22 UTC.