2014.11 - apresentação institucional...
TRANSCRIPT
Investor Presentation
November, 2014
1
Gerdau Investment Highlights
Strategy
Agenda
Financial and Operational Highlights
Outlook
Gerdau Investment Highlights
► Global player with dominant regional presence and operations in 14 countries
– Largest long steel producer in the Americas and 2ª globally
► Vertically integrated operations with flexible production processes
A leading low cost producer
► Over 110 years of profitable operations in the steel market
– Not a single yearly loss during its history
Investor Presentation
– A leading low cost producer
► Relevant market share and diversified product offering via downstream and service centers
► Strong balance sheet and cash generation track record
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► With more than 120,000 shareholders and ADTV of over US$ 80 MM, Gerdau shares are listed on the São Paulo, New York and Madrid stock exchanges
Tata Corus
Evrazholding
Long Steel Producers - Ranking by company (million tonnes)*
Global Player with Dominant Regional Presence
USA. & Canada
Mexico
Dominican Republic
India
SpainArcelor Mittal
Nucor Group
Gerdau
11.0
11.9
18.1
25.5
54.4
Nippon Steel
Source: Steel on the Net*Last information available: 2014
► Largest long steel producer in the Americas and 2nd globally
► Operations in 14 countries with relevant market share
Steel Units
Associated Companies
Joint ventures
Colombia
Peru
Chile
Uruguai
Argentina
Brazil
VenezuelaGuatemala
4Investor Presentation
JFE Steel Group
Hebei Steel
Riva Group
Celsa Group 8.7
8.7
9.1
10.4
10.9
11.0
Gerdau Investment Highlights
Strategy
Agenda
Financial and Operational Highlights
Outlook
Vertically Integrated Operations
Billets
Reheating furnaceFinishing
unitLaying headWire rodDrawing unit
Iron ore Converter
Blast furnace
Continuous casting
LadleScrap
Pig iron
Electric arc furnace
Ladle furnace
Integrated mill
Mini - mill
Rolling mill
Billets
Reheating furnaceFinishing
unitLaying headWire rodDrawing unit
Iron ore Converter
Blast furnace
Continuous casting
LadleScrap
Pig iron
Electric arc furnace
Ladle furnace
Integrated mill
Mini - mill
Rolling mill
► Relevant level of direct purchase and captive scrap (50%)
► 6.3 billion tonnes of iron ore resources
– Self-sufficiency at Ouro Branco mill
► Coke unit and coking coal mine in Colombia
► Partial level of energy self generation
Upstream
Cooling bed
Galvanizing unit
Drawn wire
Nail machine
Welding manufacturing
processes
Cooling bed
Galvanizing unit
Drawn wire
Nail machine
Welding manufacturing
processes
► Focus of Gerdau’s operations
► Low cost structure
► Mini-mills and integrated mills key to low cost strategy
► Latest generation technology
Steel
► Reinforcing steel fabrication facilities (Fab Shops)
► Drawn products
► Multi-product distribution network
► Tailor-made added-value approach (~40% of sales to civil construction)
Downstream
Combination of vertical business model with mini-mills positions Gerdau competitively along the cost curve
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Products
Brazil North America Special Steel
Ready-to-use products
► Housing► Infrastructure ► Automotive
Billets, blooms& slabs
Merchant bars
Rebars
Fabricated steel
Heavystructural shapes
Wire-rodWires
NailsSBQ
Latin America
► Housing
Consumer Markets
HRC
Iron Ore
► Raw material for
Iron Ore
► Infrastructure
► Industry and commercial buildings
► Agricultural
► Exports of slabs, blooms and billets
► Infrastructure
► Non-residential
► Industrial
► Automotive
► Shipbuilding
► Energy
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► Housing
► Infrastructure
► Industry and commercial buildings
33% of Net Sales
52% of EBITDA
31% of Net Sales
16% of EBITDA
13% of Net Sales
9% of EBITDA
20% of Net Sales
17% of EBITDA
Note: Net Sales and EBITDA LTM until September.
3% of Net Sales
6% of EBITDA
► Raw material for
the steel industry
Gerdau Investment Highlights
Strategy
Agenda
Financial and Operational Highlights
Outlook
Geographic diversification reduces volatility in results
Consolidated EBITDA & EBITDA Margin
EBITDA LTM: R$ 4,960 million
1,413 1,3701,196 1,170 1,224
13.5% 13.3%11.3% 11.2% 11.4%
3Q13 4Q13 1Q14 2Q14 3Q14
EBITDA and EBITDA margin per BO
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EBITDA (R$ million) EBITDA Margin (%) Participation of EBITDA per BO (last 12 months)
131 109 109
9,2% 8,4%7,6%
3Q13 2Q14 3Q14
Latin America BO
Brazil BO North America BO
933
598 587
23,5%
17,4%16,5%
3Q13 2Q14 3Q14
129
281 337
3,7%
7,8%9,1%
3Q13 2Q14 3Q14
273 230 231
13,3%
10,5% 11,0%
3Q13 2Q14 3Q14
49 53 10
38,6%
24,5%
4,8%
3Q13 2Q14 3Q14
EBITDA and EBITDA margin per BO
Special Steel BO
Iron OreBO
15.516.3 16.4 16.4
18.1
2.8x2.5x 2.5x 2.4x
2.7x
Debt Maturity Schedule
R$ billionR$ billion
Debt and Leverage Ratio
Debt impacted by exchange variation
3.0
11.2
3.5 4.2 3.5 4.0 4.7
sep.13 dec.13 mar.14 jun.14 sep.14
Gross Debt Principal (R$ billion) Cash (R$ billion) Net Debt/EBITDA¹
(1) EBITDA LTM.
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Average Debt Term: 7.2 yearsAverage Debt Cost: 6.5%
Average debt term of over 7 years
0.3 1.4 0.8 0.7 0.7
4Q14 2015 2016 2017 2018 2019 2020 and after
Investments of R$438 million in 3Q14
20%
16%
17%
38%
9%Brazil
North America
Latin America
Special Steel
Iton Ore
Main projects:
� Startup of the finishing line for coiled hot-rolled strips at the Ouro Branco Mill in Minas Gerais
� Startup of the new continuous casting operation in St. Paul, Minnesota
� Ongoing installation of a new reheating furnace in Monroe, Michigan
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Gerdau plans CAPEX of R$2.1 billion in 2014
Gerdau Investment Highlights
Strategy
Agenda
Financial and Operational Highlights
Outlook
R$ 45 BnR$ 91 Bn (R$ 56 Bn in
5 years and R$ 35 Bn in 25 years)–10,000 Km
R$ 5.5 Bn (PAC 2)*+ concessions
R$ 55 Bn (until 2020)
R$ 42 Bn (R$ 24 Bn in 5 years and R$ 19 Bn in
R$40 Bn (R$ 25 Bn already invested and
Brazil Business Operation
Key Investments in Infrastructure
PORTS
AIRPORTS
RAILROADS
HPP’s
HPP’s: outlook for demand in the sector (tonnes)
98.033 97.11198,033 99,488 97,111
1.5% -2.4%
years and R$ 19 Bn in20 years)–7,5 thousand Km
already invested and R$15 Bn until 2020)
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► Concession of Guarulhos, Viracopos, Galeãoand Confins airports
► Privatization and construction of roads, railways, ports and airports aiming to upgrade the country’s infrastructure
► High investments in energy generation to supply increasing consumption demand
ROADS WIND FARMS
*Programa de Aceleração do Crescimento II (Brazil Federal Government package of infrastructure investments)
Main projects in progress
2013 2014 2015
ENTERPRISE ST VOLUME PERIOD
UHE TELES PIRES MT 45,000 2011 - 2015
UHE BELO MONTE RO 68,000 2012 -2018
North America Business Operation
Manufacturing and Non Manufacturing IndexesInstitute of Supply Management (ISM): jan.03 through sep.14Home Prices and Foreclosures
► US GDP forecasted growth for 2015: +3.1%
Source: FMI, S&P Case-Shiller (prices), RealtyTrac (foreclosures) and ISM.
14
Latin America Business Operation
► Latin America GDP forecasted growth for 2015: +2.2%
Apparent finished steel use (Mt)
+2.6% +4.6%
► 2 plants► Access to the U.S.
market► New structural profile
rolling mill (2014)
Mexico
Colombia5.8 5.96.0
42.6 43.745.7
Others
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Source: FMI and worldsteel (SRO oct.14).
► Coal resources and coke production
Colombia
► Excellent logistics► Strong growth
Peru
► Mature market► Good distribution network
Chile5.1 4.7 4.82.7 2.6 2.63.5 3.9 4.02.9 3.0 3.12.8 2.7 3.4
19.7 21.0 21.8
5.8 5.9
2013 2014 (f) 2015 (f)
Mexico
Venezuela
Peru
Colombia
Chile
Argentina
Special Steel Business Operation
► Global Coverage ► Second largest producer worldwide
1,500 kgNAFTA: Total Light Vehicle Production
16
150 kg
NAFTA: Automotive Production
Source: Wards Automotive .
Units (thousand) Growth
Units (thousand) Growth
NAFTA 4,135 6.2% 16,692 5.1%
US 2,814 8.6% 11,304 6.9%
Canada 528 -6.8% 2,314 -2.3%
Mexico 792 7.8% 3,073 4.4%
Total Autos and Light Trucks
3 months through september 12months through september
Iron Ore Business Operation
CAPEX (US$ MM) CAPACITY (million t)
11.5
► Self sufficiency brings cost benefits for the Ouro Branco mill:
� Annual iron ore need: 6.5 MMt*.
► Capacity expansion project under revision.
► No long term commitment (volumes and logistics).
5,6
1,5
4,4
Capacity
Plants from partners
OTP I
OTP II
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CAPEX + Mine Acquisition: US$ 44/t
481.0
110.9
Done
Ongoing
* Considering 90% capacity utilization.
This presentation may contain forward-looking statements. These forward-looking
statements rely upon estimates, information or methods that may be incorrect or
inaccurate and may not actually occur. These estimates are also subject to risks,
uncertainties and assumptions, including, among others: general economic, political
and commercial conditions in Brazil and in the markets where we operate and existing
and future government regulations. Potential investors are hereby informed that these
estimates do not constitute a guarantee of future performance as they involve risks and
Statement
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estimates do not constitute a guarantee of future performance as they involve risks and
uncertainties. The Company does not undertake, and specifically denies, any obligation
to update any estimate, which only speak as of the date they are made.
Investor Presentation
