PRESENTATION FOR INVESTORS April 2018

Size: px

Start display at page:

Download "PRESENTATION FOR INVESTORS April 2018"

Shavonne Payne
5 years ago
Views:

1 PRESENTATION FOR INVESTORS April 2018 www. ktk.company/en Please scan the QR code to download the presentation

2 I. BUSINESS OVERVIEW www. ktk.company/en 2 / 24

3 КРАТКАЯ ИНФОРАМЦИЯ О КОМПАНИИ One of the major coal suppliers in Western Siberia Largest retail coal distribution network in Russia: 100 PoS Since its establishment in 2000, the Company has launched four open-pit mines and two washing plants. All production assets including developed and extensive infrastructure, are located in the same 10-km-diameter industrial cluster Structural capacity 100% high-quality thermal coal grade D (under Russian classification) Over 13.2 million tonnes of coal produced in 2017 Developed railroad network and facilities: handling capacity 17 million tonnes per year, 90 km of railroad, six loading and one sorting station. Structural capacity of two washing plants 6.2 million tonnes per year 5 existing open-pits 1 projected open-pits 17 million tonnes million tonnes 0,4 0,4 Исторические данные по производству угля, млн. тонн 13,2 1,7 11,011,7 1,3 10,2 10,6 2,6 2,8 8,7 8,7 3,0 2,4 3,5 5,5 6,2 6,8 3,8 3,8 4,5 4,2 4,7 4,9 1,0 2,1 2,6 4,3 4,3 3,4 3,1 4,1 1,8 1,8 1,7 0,4 1,4 1,9 1,4 1,5 1,9 2,3 2,4 1,3 1,3 2,3 2,4 2,7 2,6 2,6 2,7 2,6 2,7 2,8 3,2 3,1 3,2 3,4 4,0 3,4 3, Karakansky South Vinogradovsky Cheremshansky Bryansky Coal reserves, JORC 620 million tonnes 68 million tonnes Key operating and financial performance indicators Modern and high-performance equipment fleet usage supporting efficient low-cost production USD 16 per tonne of coal in 2017 Diversified sales capabilities balanced between domestic market (2017: 3.38 million tonnes) and export to Eastern Europe and Asia-Pacific region (2017: 8.72 million tonnes) Employing over 4,400 people KTK shares are quoted on MICEX (ticker: KBTK) 66.85% of share capital is owned by the management (Prokudin 50.07%, Danilov 16.78%), free float 33.15% is distributed between more than 15 investment funds Coal sales, in millions of tonnes 10,32 10,69 11,11 12,08 including coal resale, in millions of tonnes 0,98 1,20 0,98 1,04 Revenue, in millions of USD % change -19% -29% -2,2% 65,3% EBITDA, in millions of USD % margin 11,3 10,8 9,8 13,1 Net income, in millions of USD <1 <1 9,67 36,07 % margin - - 2,4 5,4 3 / 24

BUSINESS MODEL Mining (open-pits) Processing Logistics Рынки сбыта Proven and estimated resources Vinogradovsky 112 million tonnes Karakansky South 13 million tonnes Extracted resources, % Coal

4 BUSINESS MODEL Mining (open-pits) Processing Logistics Рынки сбыта Proven and estimated resources Vinogradovsky 112 million tonnes Karakansky South 13 million tonnes Extracted resources, % Coal washing Kaskad 1 Capacity: 3.0 million tonnes To Meret station, Kemerovo region Vysotsky Port Vysotsk FOB basis Port of Ust-Luga Leningradskaya oblast CPT basis Europe Asia-Pacific region Germany power plants Poland power plants England power stations Spain power plants Cheremshansky 195 million tonnes Bryansky 244 million tonnes 2018 Listvyanichny 56 million tonnes Kaskad 2 Capacity: 4.2 million tonnes Coal sorting Eight sorting and crashing units Port of Vanino Khabarovsk region FOB, CFR basis To Meret station, Kemerovo region VUT port, Nakhodka FOB,CFR basis Vostochny (PPK-3) port, Nakhodka CPT basis To the border of Poland through Belarus, Lithuania and Latvia DAP basis South Korea power plants cement industry Japan power plants Taiwan power plants China Eastern Europe Poland households public utilities industrial consumers power plants Domestic market 620 proven and estimated resources million tonnes Raw coal incoming capacity of washing plants per year million tonnes FCA basis 75% share To own retail network of export sales Western Siberia households public utilities industrial consumers 4 / 24

5 CHANGES SINCE IPO Changes in business Change Coal production 6.15 million tonnes million tonnes 115% Production capacity 11 million tonnes 20 million tonnes 55% Washing capacity million tonnes - Resources 402 million tonnes 620 million tonnes 62% Coal sales 7.41 million tonnes million tonnes 63% Retail network 61 PoS 108 PoS 64% EBITDA USD 69 million USD million 26% Market capitalization USD 640 million USD 225 million (65%) 5 / 24

6 INDUSTRIAL CLUSTER Rail scheme Coal-loading stations Transit stations Coal-collecting station Russian Railroads rail КТК s rail KRU s rail Coal-collecting station 6.1 km 4,900 km Eastern Europe Fadeevsky Pesterevo Uba Meret 6,100 km Asia-Pacific region km From the coalloading to the coal-collecting station Industrial cluster Coal-loading station Vinogradovskaya Karakansky South Diameter of industrial cluster: 10 km Kaskad 2 washing plant Kaskad Vinogradovskaya 20 Vinogradovsky Operations center Listvenichny Karakansky South Start of coal production Karakansky South Existing capacity of railroad infrastructure million tonnes 14.7 million tonnes transported in 2017 Cheremshansky Bryansky Kaskad Kaskad 1 washing plant USD 150 million Cost to launch an open-pit mine with a capacity of 3-5 million tonnes per year from the greenfield stage USD million Cost to launch an open-pit mine with a capacity of 3-5 million tonnes per year with existing infrastructure USD 20 million Investment into mining equipment per each 1 million tonnes of coal production capacity 6 / 24

7 II. OPERATIONAL HIGHLIGHTS www. ktk.company/en 7 / 24

8 KEY OPERATIONAL HIGHLIGHTS Operational results for Y-o-Y Coal processing, in millions of tonnes Coal production 13,23million tonnes 13% Coal processing 9,70 million tonnes 10% 5,56 5,54 5,69 Volume of blasted rock mass 38,66 million cbm 15% 4,59 4,71 Sales 12,08 million tonnes 9% 2,71 3,11 3,20 2,23 Export sales 8,72 million tonnes 17% Domestic sales 3,36 million tonnes -7% 1,67 1,01 0,93 1,02 1,01 0,80 Average sales price RUB 1765 per 1 tonne USD 30,3 per 1 tonne 38% 59% Coal sorting Coal washing at Kaskad 1 Coal washing at Kaskad 2 Commercial products 11,44 13% 8 / 24

9 COAL PRODUCTION AND SALES Production in Russia, in millions of tonnes 352, ,7 407,9 3% 3% 3% 3% 3% 10,15 10,61 11,00 11,68 13,23 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% KTK s sales in 2017, in millions of tonnes 12,08 million tonnes 1,04 9% Production in Russia Production of KTK Share of KTK 11,05 91% Domestic sales, in millions of tonnes 174,6 167,0 171,1 3% 3% 3% 2% 2% 2% 50,02% 3,78 3,63 3,36 2% 0,02% Total domestic sales Share of KTK 250,0 200,0 150,0 100,0 KTK domestic sales Export sales, in millions of tonnes 151,4 5% 177,0 202,1 4% 4% 6,90 7,47 8, Total export sales Share of KTK KTK export sales 5% 5% 5% 5% 5% 5% 4% 4% 4% 4% 4% Source: KTK s research, Argus Coal produced 8,72 72% 12,08 million tonnes 3,36 28% Domestic sales Coal resale Export sales 9 / 24

AVERAGE SELLING PRICES AND MARKETS Key markets Sales, in millions of tonnes 10,6 10,32 10,69 11,11 6,93 7,2 1,78 0,98 12,08 6,9 7,47 8,72 1,2 0,98 1,04 1,89 2,14 2,59 2,66 2,32 2013 2014 2015 2016

10 AVERAGE SELLING PRICES AND MARKETS Key markets Sales, in millions of tonnes 10,6 10,32 10,69 11,11 6,93 7,2 1,78 0,98 12,08 6,9 7,47 8,72 1,2 0,98 1,04 1,89 2,14 2,59 2,66 2, Export Domestic (coal resale) Domestic (coal produced) millions of tonnes Average selling price, RUB per tonne 2,78 Europe 3,36 Domestic market Russia 5,94 Asia-Pacific region South Korea 34,98 29,97-14% 21,80 19,10 30,25 Japan, Taiwan Types of end consumers Households Public utilities Industrial consumers Energy plants Energy plants 10 / 24

11 III. FINANCIAL PERFORMANCE www. ktk.company/en 11 / 24

12 KEY FINANCIAL HIGHLIGHTS 2017 financial results 2017 Y-o-Y 715 Revenue and EBITDA, in millions of USD Revenue USD 662,8 million 65% Y-o-Y EBITDA USD 87,09 million 122% ,8% 11,3% 10,8% 9,8% ,1% 87 EBITDA margin 13,1% 3,3 п.п. Net income USD 36,07 million 274% Operating cash flow USD 66,26 million 224% Revenue EBITDA EBITDA margin Operating cash flow and CAPEX, in millions of USD 66 CAPEX USD 39,60 million 52% Net debt USD 74,48 million (16)% Net debt/ebitda 0,86 * (63)% Cash and cash equivalents USD 94 million 49% Operating cash flow CAPEX (*) 0.84 if calculated in RUB 12 /24

SEGMENT REPORTING 2017 Segment results The revenue increased by 65% from export sales, whereas the share of export sales increased by 4% Cost of sales increased by 61% through growth in production

13 SEGMENT REPORTING 2017 Segment results The revenue increased by 65% from export sales, whereas the share of export sales increased by 4% Cost of sales increased by 61% through growth in production Gross profit doubled and comprised million rubles Gross profit by segment, in millions of USD 92% 104,4 25% 13% 3% 54,3 26% 16% 5% 17% 13% Revenue and cost of sales by segment, in millions of USD Export sales Domestic sales (own coal) Domestic sales (resale) Other operations 700,0 600,0 500,0 400,0 300,0 200,0 100,0 0,0 400,7 16% 75% 3% 6% 65% 61% 662,8 3% 6% 12% 346,4 2% 79% 16% 7% 75% 558,3 12% 78% 3% 7% 700,0 600,0 500,0 400,0 300,0 200,0 100,0 0,0 Gross profit margin by segment Revenue 2016 Revenue 2017 Cost of sales 2016 Cost of sales 2017 Export sales Domestic sales (resale) Domestic sales (own coal) Other operations 12 / 31

14 COST OF SALES AND PRODUCTION CASH COSTS Cost of sales breakdown and dynamics, in millions of USD 19 Production cash costs dynamics % 3% 2% 3% 28% 29% 31% 30% 34% 9% 8% 6% 9% 5% 7% 6% 5% 6% 5% 15 31% 31% 29% 30% 10,15 10,61 11,00 11, ,90 5,60 5,40 4,78 34% 14 13,23 5,49 55% 55% 52% 57% 57% -3% Transportation costs Depreciation Coal purchased Production cash costs Other costs Production cash costs breakdown, in millions of USD % 11% 190 9% 26% 33% 29% 30% 29% 25% 28% 25% 19% 24% 20% 15% 13% 14% 19% 5% 5% 11% 7% 9% 12% 11% 4% 5% 4% 7% 7% 10% 13% 17% 10% Production volume, mln tonnes Average stripping ratio Cash cost, USD per tonne Share of production costs in cost of sales Extraction, processing and sorting of coal Fuel Cost of personnel Spare parts Mining and environment taxes 10% Repair and maintenance Other costs 14 / 24

15 SETTLEMENT OF FINANCIAL LIABILITIES Indebtedness as of Net Debt to EBITDA, in millions of USD Net debt USD million (16% ) Y-o-Y Netdebt to EBITDA 0.86 (63%) Y-o-Y Average interest on RUB loans % (0.55) ppts Y-o-Y Average interest on USD loans 4.28 % (0.44) ppts Y-o-Y , ,66 1, , , Average interest oneuro loans 2.26 % (0.06) ppts Y-o-Y Committed credit lines USD 295 million 251 % Y-o-Y Total debt Net debt 0 Credit portfolio diversification 12 banks from Russia and Europe EBITDA Cash and equivalents Loan portfolio structure Net debt/ebitda 33% 2% Euro loans USD loans RUB loans 35% Total debt: USD 169 million 32% 73% Total debt: USD 169 million 25% Less than 1 year 1-3 years 3-5 years 15 / 24

16 IV. STRATEGY www. ktk.company/en 16 / 24

17 LONG-TERM STRATEGIC PRIORITIES Extension of the resource base Increase of coal production In 2015 coal mining operations were commenced at Bryansky site. Coal is mined with the help of the coal mining equipment and by the mine workers from Karakansky- Yuzhny site. In 2017 geological prospecting works were carried out. Improvement of product quality Development of new products The Company is planning to raise the volume of coal washing up to 80% by increase of washing capacity through reconstruction of the existing plants and construction of new facilities. КТК continues producing high quality coal bricks. Development of transport infrastructure Marketing development The capacity of the existing railway infrastructure comprises 17 million tons per year. The Company is planning to extend the railway capacity by construction of the railway line at Karakan Station Fadeevsky Passing Loop. During 2017 the Company entered new markets in the Western Europe through Vysotsky Port. PJSC KTK is extending eastward marketing through other ports. Development of labour productivity Reduction of expenses and enhancement of efficiency through the increase of corporate management quality, introduction of new technology and coal mining automatic control system. Responsibility KTK has undergone inspection procedures regarding compliance with ISO Standards 9001:2008 and ISO 14001:2004 and certification audit of OHSAS Standard 18001:2007. Certification under Management System by OHSAS Standard 18001:2007 describes basic possibilities and competences of the personnel and technology processes regarding operational safety of Kuzbasskaya Toplivnaya Company. Receipt of the certificate under such Standard confirms the fact that КТК enterprises attach high priority to operational safety and all processes of enterprises in this system are in line with the world standards. 18/ 31

18 V. ENVIRONMENT www. ktk.company/en 18 / 28

KARAKANSKY WILDLIFE SANCTUARY Public wildlife sanctuary of Kemerovo region Karakansky ridge 12 species of protected rare plants 44 rare species of insects (orthoptera, but terflies, spiders) 468 m

19 KARAKANSKY WILDLIFE SANCTUARY Public wildlife sanctuary of Kemerovo region Karakansky ridge 12 species of protected rare plants 44 rare species of insects (orthoptera, but terflies, spiders) 468 m maximum altitude above sea level 5 endangered species of birds In 2012 КТК passed environmental audit, initiated by the European Bank for Reconstruction and Development Monitoring polygon (size 0,5 ha.): Survey of key ecological indicators forest-steppe marmots colony m length of the northeast slope eared bat m length of the southwest slope Underground lake, source of drinking water for a small village nearby size of wildlife sanctuary rare plants 15 scientists from Novosibirsk and Tomsk, summer 2013 ha. species expeditions 19 / 24

ENVIRONMENTALLY RESPONSIBLE PRODUCTION In 2015 to produce breakstone the Company launched a crushing and screening complex with dedusting system 40 out of 216 units of KTK s mining equipment run on

20 ENVIRONMENTALLY RESPONSIBLE PRODUCTION In 2015 to produce breakstone the Company launched a crushing and screening complex with dedusting system 40 out of 216 units of KTK s mining equipment run on electricity, reducing the volume of used fuel New energy transition line with increased thickness of the cable was built in 2013 to reduce electricity losses Regular watering of technical roads to reduce coal dust in the atmosphere Dedusting systems at Kaskad 1 and Kaskad 2 washing plants do not allow any emissions of coal dust Tires, scrap-metal and waste engine oil are used for recycling Closed cycle of water used at Kaskad 2 washing plant is supplied with technical water by Vinogradovsky open-pit mine Internal dumps are formed on the open-pit mines to reduce land disturbance 40 km less distance of auto-transportation client due to the new warehouse terminal at coal-collecting station with 1.5 million tonnes of storage capacity saves 5,000 liters of fuel every year Waste water treatment plant at industrial cluster produce water suitable for drinking. New waste water treatment plan is planned at Vinogradovsky open-pit mine 10-12% less (250, ,000 tonnes per year) transportation volumes by coal washing 12% less emissions to the atmosphere by burning washed coal Energy Coal dust Emissions to atmosphere Fuel saving Water Transportation Recycling Dumps 20 / 24

CONTACTS Kuzbasskaya Toplivnaya Company PJSC (KTK) MICEX: KBTK www.oaoktk.

21 CONTACTS Kuzbasskaya Toplivnaya Company PJSC (KTK) MICEX: KBTK Head office in Kemerovo: 4, 50 let Oktyabrya street, Kemerovo, , Russia Representative office in Moscow: 29, Serebryanicheskaya naberezhnaya, Moscow, , Russia Investor calendar: To subscribe for news please request: News and announcements (Russian only) Presentations Video Elena Sarycheva Head of public affairs department +7 (3842) Information about the Company Press releases Stock quotes Presentations Visit our website: Financial reports under IFRS Investor calendar 21 / 24

22 APPENDICES www. ktk.company/en 22 / 24

23 CORPORATE STRUCTURE Kuzbasskaya Toplivnaya Company PJSC Production Industrial cluster Vinogradovsky open-pit Open-pit mine Karakansky South Open-pit mine Vinogradovsky Open-pit mine Cheremshansky Open-pit mine Bryansky License Listvenichny Transportation, ener gy and real estate 100% Railroad logistics Freight Forwarding Company Meret LLC Energy and heat producer Kaskad-Energo PJSC Land and real estate management Kaskad-Geo LLC Sales Domestic market Wholesale and retail 100% Kemerovo Region Kuzbasstoplivosbyt PJSC 51% Novosibirsk Region Novosibirsk Fuel Corporation LLC 51% Altay region Altay Fuel Company PJSC Omsk region Transugol LLC Export 100% КТК Polska Sp. z.o.o. Wholesale sales in Poland 100% КТК Overseas AG Trade house in for export operations of the Group 100% KTK s share 23 / 24

MINING EQUIPMENT 6 4 Toyota Land Cruiser 93 1.95 m 33 12 5 20 2 м Mining trucks Loaders Locomotives Graders Dozers 30 Statue of Liberty (excl.

24 MINING EQUIPMENT 6 4 Toyota Land Cruiser m м Mining trucks Loaders Locomotives Graders Dozers 30 Statue of Liberty (excl. base) 43 m м Draglines Sorting and crushing units Drill Rigs Shovels Rope shovels 204 units of mining equipment units of 46support transport Electric mining equipment reduces production costs and environmental damage 24 / 24

Months Investor Presentation

2018 9 Months Investor Presentation 25.10.2018 Disclaimer Ereğli Demir Çelik Fabrikaları T.A.Ş. (Erdemir) may, when necessary, make written or verbal announcements about forward-looking information, expectations,