Group Presentation. Association of Greek Institutional Investors June 2010

Transcription

1 Group Presentation Association of Greek Institutional Investors June 2010

2 DISCLAIMER These preliminary materials and any accompanying oral presentation (together, the Materials ) have been prepared by Mytilineos Holdings SA (the Company ) and are intended solely for the information of the Recipient. The Materials are in draft form and the analyses and conclusions contained in the Materials are preliminary in nature and subject to further investigation and analysis. The Materials are not intended to provide any definitive advice or opinion of any kind and the Materials should not be relied on for any purpose. The Materials may not be reproduced, in whole or in part, nor summarised, excerpted from, quoted or otherwise publicly referred to, nor discussed with or disclosed to anyone else without the prior written consent of the Company. The Company has not verified any of the information provided to it for the purpose of preparing the Materials and no representation or warranty, express or implied, is made and no responsibility is or will be accepted by the Company as to or in relation to the accuracy, reliability or completeness of any such information. The conclusions contained in the Materials constitute the Company s preliminary views as of the date of the Materials and are based solely on the information received by it up to the date hereof. The information included in this document may be subject to change and the Company has no obligation to update any information given in this report. The Recipient will be solely responsible for conducting its own assessment of the information set out in the Materials and for the underlying business decision to effect any transaction recommended by, or arising out of, the Materials. The Company has not had made an independent evaluation or appraisal of the shares, assets or liabilities (contingent or otherwise) of the Company. All projections and forecasts in the Materials are preliminary illustrative exercises using the assumptions described herein, which assumptions may or may not prove to be correct. The actual outcome may be materially affected by changes in economic and other circumstances which cannot be foreseen. No representation or warranty is made that any estimate contained herein will be achieved. 2

3 AGENDA Group Overview Financial Review Areas of Activity Metallurgy & Mining Energy Engineering Procurement Construction (EPC) Stock Data Summary 3

4 Group Overview 4

5 GROUP S CORPORATE STRUCTURE MYTILINEOS HOLDINGS Mkt Cap*: 484 mn METALLURGY & MINING ENERGY EPC ALUMINA & ALUMINIUM (100%) ENDESA (HELLAS) (100%) METKA (57.4) DELPHI DISTOMON (100%) KORINTHOS POWER (65%) Mkt Cap*: 451 mn Mytilineos Group holds a 43% stake in the state owned Vehicle Manufacturing company ELVO. This is considered a non core sector activity and is consolidated through equity. Source: Company Information. Note: Market data 10 June METKA is the only remaining listed subsidiary. 5

6 Financial Review 6

7 FINANCIAL REVIEW Financial Performance Balance Sheet FY09 FY08 1,000 Turnover EBITDA EAT EBITDA% 25.0% Non Current Assets 1, Current Assets Total Assets 1,989 1, % 21.2% % % 11.8% 18.0% % 15.0% 10.0% Debt Cash Position Marketable Securities Equity Adj. Equity Net Debt Adj. Net Debt Source: Company Information. 5.0% 0.0% 2010 Key Performance Drivers: Metal and Currency hedges boost top line and profitability. Favorable $ and commodities prices. Strong Growth from the EPC sector. Liberalization of Natural Gas Market (including LNG). Higher Electricity Pool Prices since the onset of the financial crisis in

8 Areas of Activity Metallurgy & Mining 8

9 M & M BUSINESS OUTLOOK Alumina & Aluminum Business Overview Operational & Financial Overview Entire complex acquired from Alcan in Leading industrial producer of alumina and aluminium in South Eastern Europe. Production facilities occupy an area of 7,035,700m2 and constitute a vertically integrated production unit including bauxite mines, alumina refinery, smelter and self owned port facilities for large tonnage ships. tn OX AL 900, , , , ,000 Key Strengths 400, , , , , , , ,000 Low cost production base in Europe both for Alumina and Aluminium below average global cost. Enough alumina to cover own aluminium production needs and to export half a million tonnes per annum. 10-year export contract with Glencore AG regarding the majority of excess alumina production. Steam is produced using Natural Gas by the 334 MW CHP Plant, 100% owned by Mytilineos Group. Exploitation of bauxite reserves by the 100% owned subsidiary Delphes Distomon S.A. covering more than half of its Bauxite requirements. Long term contracts with other suppliers (Alcan, S&B, Glencore AG). Efficient risk management strategy. The Group acting proactively secured Aluminum sales in prices well above current market levels for 2009 and Source: Company Information. 100,000 0 mil , , , , , Turnover EBITDA EAT % EBITDA 23.4% 25.0% 20.7% 20.0% 15.5% 15.4% 15.0% % 10.0% 5.0% %

10 M & M BUSINESS OUTLOOK Aluminum Cost Analysis Total Market 2009 ALUMINIUM SMELTER INDUSTRY COST DATA 2,400 Labour Cost 7% Total Other Costs 9% Average Delivered Alumina Cost 33% 2,000 Total Energy Cost 38% Other Raw Materials Cost 13% Cost ($/t Al) 1,600 1, Electricity Rates: 400 AoG and PPC currently negotiate the terms under which PPC will supply electricity power to AoG to cover fully or partly its needs. Negotiations between the two parties have reached the final stage and point at the direction of finding a mutually beneficiary solution. Currently the PPC tariff for industrial consumption during the night stands at c /MWh, while the average SMP in the 1 st Quarter of 2010 settled at 46 /MWh ,000 10,000 15,000 20,000 25,000 30,000 35,000 Production (kt) Source: Company Information, CRU ANALYSIS, Brook Hunt & Associates Ltd. 10

11 Areas of Activity Energy 11

12 ENERGY - INDUSTRY & MACRO ENVIRONMENT Electricity Market: Monthly SMP data (EUR) The Greek electricity market (Demand peak c. 10 GW) is under liberalization. Most of the existing capacity is old and inefficient, underlining the need for new capacity and replacements. Dominant position of PPC to be challenged by IPPs (MYTILINEOS- MOTOR OIL, TERNA - GDF, HELPE EDISON) AVG 2008: Inefficient fuel supply-mix, over 60% derived from Lignite. 70 Expensive imports. During the summer the system realizes power shortages. 60 AVG 2009: 47.4 All the new conventional capacity up to 2014 will be based on Natural Gas. During 2010 IPPs are expected to launch 3 new CCGTs with total capacity of 1.3 GW Renewable generation is also set to rise as a very favorable framework has been put into place. Feed-in tariff for the energy and up to 40% subsidy for construction of wind and solar parks. Natural Gas could become base load post 2013, when CO2 free allowances will be abolished January February March April May June July August September October November December Source: Company Information, HTSO. 12

13 ENERGY - INDUSTRY & MACRO ENVIRONMENT The Greek Electricity Market 90 Merit Order, 2010 Power Production Mix Total Production 2009: 48.5 m MWh Marginal cost ( /MWh) % 10.2% 3.9% 3.5% 63.0% Installed capacity (in GW) Hydro, RES Lignite Gas CCGT Gas OCGT Fuel oil LIGNITE OIL N.G. HYDRO RENEWABLES Energy Market Developments in 1Q 2010 Total Power demand during 1 st Q 2010: 12.7 m MWh (down 3.3% y-o-y). Lignite production decreased by 17.8% while Hydro production reached 2.6 m MWh (up 112.6% y-o-y). Natural Gas production also increased at 2 m MWh (up 24.3% y-o-y). Average SMP decreased at 46.1 /MWh (down 18.3% y-o-y), however higher Oil prices are expected to put an upward pressure on the SMP during the rest of the year. The CHP plant, fully owned by Mytilineos Group, has already supplied the Grid with over 1.3 m MWh since April 2009 full commercial operation of the plant is imminent and subject only to the completion of the new electricity codes. Source: Company Information, HTSO. 13

14 ENERGY - BUSINESS OUTLOOK Group total installed capacity attributable to thermal generation assets is expected to reach c. 1.2GW by 2011 Mytilineos, expects to commission 2 thermal power plants until 2011 (one in late 2010 and one in mid 2011) Installed capacity Thermal Asset Summary Commercial operation Location Total capex (Eur mn) CHP 334MW Viotia 191 In operation Viotia CCGT 444.4MW November 2010 Viotia 242 Korinthos Power 436.6MW August 2011 Korinthos 290 Comments Final Stage of construction Under construction The Viotia CCGT is under construction, with the EPC c. 80% completed while construction for the Korinthos Power CCGT started in September 2009 Operational RES Asset Summary Installation Licenses Production Licenses Applications Total Gross MW Attr. MW Gross MW Attr. MW Gross MW Attr. MW Gross MW Attr. MW Gross MW Attr. MW Wind , , , , Hydro PV Source: Company Information (1) The CHP is under commissioning and commercial operations is expected to commence as soon as the new electricity code is completed. 14

15 GAS MARKET - BUSINESS OUTLOOK GAS MARKET DEVELOPMENTS: In 2009 Mytilineos Group & MOTOR OIL joined forces in the Natural Gas Market. Liberalization of Natural Gas Market (including LNG). Gas Prices have decoupled from the price of Oil. Today LNG is priced aprox. 45% lower compared to the Oil linked pipeline Gas supplied by DEPA. Following the recent acquisition by the Group of the 50.01% owned by ENEL in ENDESA HELLAS, the Group will operate 1.2 GW by 2011, thus extending its natural gas needs up to 1 bcm. The opening of the LNG market offers a competitive advantage for the Group that has not been engaged in a long term Gas supply contract for its new CCGT s. LNG global capacity reaches 11% of total natural gas supply forecasts call for another 7-8 bcf/d to come online (+22.7%). Gas vs Oil Prices Source: Company Information, Bloomberg, Credit Suisse. 15

16 Areas of Activity EPC 16

17 EPC BUSINESS OUTLOOK METKA Business Overview METKA S.A., 57.4% owned by Mytilineos Holdings, is a leading EPC Contractor with international profile. Listed in the Athens Stock Exchange (ASE) since METKA is involved in: Energy» Complete power plants: engineering, procurement, construction (EPC) scope.» EPC Contractor or consortium with technology suppliers. Infrastructure» Focus on technically demanding infrastructure applications.» Complex steel structures, mining & minerals, port equipment, refinery & petrochemical. Defence» Manufacturing co-production with defence majors.» Land defence systems. Major supplier of the Hellenic Armed Forces. Financial Overview Turnover Analysis mil Energy Infrustructure Defence Turnover EBITDA EAT % EBITDA mil % Key Strengths Significant international presence. World class manufacturing capability with high value-added profile. Strong demand from developing countries. Strong backlog currently at 2.0 bn Earnings Visibility & Stability. High cash flow generation. Close ties with all world-class technology providers, including GE, Alstom, Siemens etc. Three state-of-the-art industrial facilities with 790 highly skilled and experienced personnel with excellent know-how. Source: Company Information % 25.0% 20.7% 20.1% 17.5% 20.0% 17.9% 15.0% % % % 17

18 EPC - BACKLOG Strong Backlog Visibility International Profile PROJECTS ABROAD 85% 2.0 bn PPC 4% MYTILINEOS GROUP OTHER 9% 2% PPC: 417 MW in Aliveri, Natural Gas Fired combined cycle. Alstom sub supplier for the main equipment. Contract value of 219 m. Mytilineos Group : 430 MW in Ag. Nikolaos, Natural Gas Fired combined cycle. GE sub supplier for the main equipment. Contract value of 232 m. Commissioning: 2 nd half OMV PETROM: 860 MW in Romania, Natural Gas Fired combined cycle Consortium with GE. Contract value of 210 m. PEEGT: 700 MW in Syria, Natural Gas Fired combined cycle. METKA leader of Consortium with Ansaldo. Contract value of 650 m. KORINTHOS POWER: 437 MW in Ag. Theodoroi, Natural Gas Fired combined mil 2,000 Backlog - Sales Evolution 2,090 cycle. GE sub supplier for the main equipment. Contract value of 285 m. Commissioning: 1 st half RWE & Turcas Güney Elektrik Uretim A. Ş. : 775 MW in Turkey, Natural Gas 1,500 1,460 Fired combined cycle. Siemens sub supplier for the main equipment. Contract value of 450 m. 1, OMV (BORASCO): 870 MW in Turkey, Natural Gas Fired combined cycle. GE sub supplier for the main equipment. Contract value of 475 m. Backlog Evolution Group Sales of which EPC Sales Source: Company Information. 18

19 METKA INVESTMENT CASE SUMMARY METKA Investment Highlights Well positioned to benefit from the expansion in new very promising markets such as Turkey & the Middle East. Strong Backlog - Highly visible cash flows over the next years. International exposure neutral investment case against the domestic environment. The highest EBITDA margin against its peers. Growth momentum - Sales expected to double over the next couple of years. Quality Balance Sheet. Source: Company Information. 19

20 Stock Data 20

21 STOCK DATA MYTILINEOS HOLDINGS S.A. Share Price Information Market Cap: 484 mn Avg. Trading Value: 1.5 mn Total No of shares: 116,984,338 Free Float: 61% Listing FTSE/ASE 20 FTSE INTERNATIONAL, MSCI Small Cap and HSBC Small Cap 120 Stock Performance Stock Symbols ASE: MYTIL Reuters: MYTr.AT Bloomberg: MYTIL GA Shareholder Structure 70 Greek Institutional Investors 11.4% 60 31/12/ /1/2010 1/3/ /3/ /4/ /5/2010 Mytilineos Family 30.3% Retail 31.9% Mytilineos Group Athex Composite Treasury Stock 8.9% Foreign Institutional Investors 17.5% Notes: Data as of 10 June Source: Company Information. 21

22 STOCK DATA METKA S.A. Share Price Information Market Cap: 451 mn Avg. Trading Value: 0.5 mn Total No of shares: 51,950,600 Free Float: 42.7% Listing FTSE/ASE Mid-40,FTSE INTERNATIONAL, MSCI Small Cap and HSBC Small Cap 120 Stock Performance Stock Symbols ASE: METK Reuters: MTKr.AT Bloomberg: METTK GA Mytilineos Holdings 57.4% Shareholder Structure Retail 10.5% Greek Institutional Investors 12.6% /12/ /1/2010 1/3/ /3/ /4/ /5/2010 Metka Athex Composite Notes: Data as of 10 June Source: Company Information. Foreign Institutional Investors 19.1% 22

23 Summary 23

24 SUMMARY Investment Highlights The Group is well placed to benefit from: The liberalization of the domestic energy market. The establishment of METKA as one of the most reliable EPC players in Europe. The Recovery of Commodity Prices as the world economy improves. Strong exposure abroad, neutralizing the impact of the adverse domestic economic environment. Strong EPC business through METKA, which offers highly visible cash flows and is well positioned to benefit from the expansion in new very promising markets. Fully Integrated model in Alumina - Aluminium business, self owned bauxite mines and the operation of the CHP plant offer solid control of the main cost parameters. High Liquidity and secured funding for the execution of the Group s demanding investment plan. Effective risk management against FX and Commodities price fluctuations secures medium term profitability supporting also Cash flows. Successful management s track record in value creation through a series of value enhancing deals. Source: Company Information. 24

25 CONTACT INFORMATION Dimitris Katralis Investor Relations Department Tel: Fax: Mytilineos Holdings S.A. 5-7 Patroklou Str Maroussi Athens Greece Tel: Fax: