BORYSZEW GROUPQ3 2019 FINANCIAL RESULTS
2. Market environment
1. Boryszew Group – Q1-Q3 2019 Summary
3. Q1-Q3 2019 financials
4. Operating segments
5. Plans for the next quarters
2
KEY FACTORS AFFECTING THE GROUP IN Q3 2019
• Positive effects of active management of working
capital ;
• Improved profitability in the Maflow Group;
• A noticeable economic slowdown in Western
Europe;
• A significant slowdown on the market of
infrastructural and construction investments;
• Lower volumes and margins in the steel sector.
3
1,437 1,4131,505
1,7061,577
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
Revenue
[PLN m]
Net profit
[PLN m]
EBITDA
[PLN m]
4
BORYSZEW GROUP – Q1-Q3 2019 SUMMARY
8067
90
139
92
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
44
-11
24
49
6
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
Q3 2019 REVENUES BRIDGE
5
1,437.023.0
-29.6
164.6
-10.0 -9.0
1,577.0
IIIQ18 Motoryzacja Metale bez Alchemii Alchemia Chemia Pozostałe IIIQ19Q3 2018 Q3 2019Automotive Metals without
Alchemia
Chemicals OthersAlchemia
Q3 2019 EBITDA BRIDGE
6
80.0
33.4
-10.3-3.1
-2.0-6.2
92.0
IIIQ18 Motoryzacja Metale bez Alchemii Alchemia Chemia Pozostałe IIIQ19Q3 2018 Q3 2019Automotive Metals without
AlchemiaChemicals OthersAlchemia
2. Market environment
1. Boryszew Group – Q1-Q3 2019 Summary
3. Q1-Q3 2019 financials
4. Operating segments
5. Plans for the next quarters
7
PRICE QUOTATIONS OF KEY METALS (PLN/t)
8
-10.1% -0.2%
Q3
2018
Q4
2018
Q1
2019
Lead
Q2
2019
Zinc
-2.7%
Q3 2018 avg: 9,369
Aluminium Copper
1.8%
Q3
2019
Q3 2019 avg: 6,840 Q3 2018 avg: 22,565 Q3 2019 avg: 22,520Q3 2018 avg: 7,609
Q3 2019 avg: 9,113 Q3 2018 avg: 7,739 Q3 2019 avg: 7,876
Q3
2018
Q4
2018
Q1
2019
Q2
2019
Q3
2019
Q3
2018
Q4
2018
Q1
2019
Q2
2019
Q3
2019
Q3
2018
Q4
2018
Q1
2019
Q2
2019
Q3
2019
3.50
3.60
3.70
3.80
3.90
4.00
4.10
4.20
4.30
4.40
4.50EUR
USD
CURRENCY EXCHANGE RATES
9
Q3
2018
Q3 2018 avg: 4.31
Q4
2018
Q1
2019
Q2
2019
Q3
2019
Q3 2019 avg: 4.32
0.3%
Q3 2018 avg: 3.70 Q3 2019 avg: 3.88
4.9%
10
EUROPEAN AUTOMOTIVE MARKETRegistrations of new cars by country in millions (according to ACEA*)
* ACEA (European Automobile Manufacturers Association)
9M 2019 – 12.12 million
9M 2018 – 12.31 million
-1.6%2.67
1.91
1.66
1.49
1.04
0.46 0.400.36
0.28 0.28
1.75
2.74
1.86
1.64
1.47
692
0.44 0.410.33
0.250.26
1.75
Germany UK France Italy Spain Belgium Poland Netherlands Austria Sweden Others
9M 2018 9M 2019
EUROPEAN AUTOMOTIVE MARKET
11
Registrations of new cars by country in millions (according to ACEA)
* PSA Group = Peugeot, Opel, Citroen, DS.
** FCA Group = Fiat, Jeep, Alfa Romeo, Lancia, Chrysler
***JLR = Jaguar Land Rover
3.00
1.96
1.30
0.81 0.830.78 0.77
0.73
0.60
0.41
0.240.18
0.11
2.96
1.96
1.27
0.820.74 0.78 0.74 0.75
0.61
0.310.25
0.180.10
VW Group PSA Group* Renault Group HYUNDAI&KIA FCA Group** BMW Group Ford DAIMLER TOYOTA Group NISSAN VOLVO JLR Group*** HONDA
9M 2018 9M 2019
1.39
0.610.56
0.36
0.060.00
1.34
0.58 0.58
0.40
0.060.00
Volkswagen Audi Skoda Seat Porsche Others
12
EUROPEAN AUTOMOTIVE MARKET
Registrations of new cars in 9M 2019
Market share (%) Quantity (’000) Y/Y %
2018 2019 2018 2019 change
VW Group 24.3 24.4 2,996 2,958 -1.3
VOLKSWAGEN 11.3 11.1 1,394 1,340 -3.9
AUDI 5.0 4.8 610 581 -4.9
SKODA 4.6 4.8 562 581 +3.2
SEAT 2.9 3.3 363 397 +9.5
PORSCHE 0.5 0.5 62 55 -10.9
OTHERS 0.0 0.0 4 5 +15.5
Registrations of new cars by country in millions (according to ACEA*)
3.5
3.2
4.0
4.4
3.7
IIIQ2018 IVQ2018 IQ2019 IIQ2019 IIIQ2019
* ACEA (European Automobile Manufacturers Association)
Q3 2018 Q3 2019Q4 2018 Q2 2019Q1 2019
2. Market environment
1. Boryszew Group – Q1-Q3 2019 Summary
3. Q1-Q3 2019 financials
4. Operating segments
5. Plans for the next quarters
13
KEY FINANCIALS (PLN million)
14
Q3
2018
Q4
2018
Q1
2019
Q2
2019Q3
2019
Y/Y %
change
2019 vs
2018
Sales revenues 1,437 1,413 1,505 1,706 1,577 9.7%
EBIT 43 29 49 87 41 -4.7%
EBITDA 80 67 90 139 92 15.0%
EBITDA margin 5.6% 4.8% 6.0% 8.1% 5.8% 4,8%
1,437 1,413
1,505
1,707
1,577
IIIQ 2018 IVQ 2018 IQ 2019 IIQ 2019 IIIQ 2019
REVENUES (PLN million)
Revenues
by segment
(PLN m)
Q3
2018
Q4
2018
Q1
2019
Q2
2019
Q3
2019
Y/Y %
change
Q3 2018 vs
Q3 2019
Automotive 401 466 449 474 424 5.7%
Metals 923 808 907 1,133* 1,058* 14.6%
Chemicals 69 81 73 60 59 -14.5%
Others** 44 58 76 39 35 -20.5%
• Automotive Segment:
+ sales growth by nearly 6% on Q3 2018;
• Metals Segment:
+ consolidation of Alchemia Group’s revenues
in Q3 2019 (PLN 164.6m);
* including Alchemia Group’s revenues ** including consolidation adjustments 15
9.7%
-7.6%
+ tool sales growth in BAP (PLN 42m).
- lower metal prices on the LME
(ca. PLN 35m).
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
8067
90
139
92
IIIQ 2018 IVQ 2018 IQ 2019 IIQ 2019 IIIQ 2019
EBITDA by
segment
(PLN m)
Q3
2018
Q4
2018
Q1
2019
Q2
2019
Q3
2019
Y/Y %
change
Q3 2018 vs
Q3 2019
Automotive -3.2 12.7 20.5 31.8 30.2
Metals 74.9 50.5 58.0 102.7 61.5 -17.9%
Chemicals 3.7 4.1 3.5 5.0 1.7 -54.1%
Others** 4.8 -0.1 8.2 -1.0 -1.4 -129.2%
EBITDA (PLN million)
• Automotive Segment:
+ cost optimization in plants;
+ reduction of the cost of poor quality (CoPQ);
+ tool sales growth (PLN 42m).
5.9%*5.6%*
16* EBITDA margin
14.7%
33.3%
• Metals Segment:
+ EBITDA growth in NPA Skawina (PLN 1.3m);
+ EBITDA growth in Huta Oława (PLN 1.0m);
- Consolidation of Alchemia Group’s EBITDA
in Q3 2019 (PLN -3.1m).
** including consolidation adjustments
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
Q1-Q3 2019 CAPEX
17
PLN
52 million
Alchemia GroupAutomotive Metals
PLN
111 million
PLN
25 million
PLN 190 million
Chemicals
and Other
PLN
2 million
INNOVATIVE PROJECTS
18
Innovative production technology of wire rod from high-strength
aluminium alloys of 2xxx, 5xxx, 7xxx series
Reduction of transmission losses in HV (110kV) power distribution lines
through the development of innovative material and design solutions
and technologies for the production of low-loss overhead lines
Development of highly advanced production technology of multilayer
HSAA-P30 aluminium tapes for the new generation of automotive heat
exchangers
Implementation of innovative production technology of sheets and strips
made from AlMg-VHS alloy intended for pressing car body parts and
structural elements
Development and implementation of a production technology of
an innovative aluminium alloy for the production of high-pressure caps
in the packaging industry
Unique forged and rolled special-purpose steel ring with advanced,
designed cross-section and adjustable operating properties
Innovative production technology of products from copper alloys with
a new standard of geometric quality intended for material removal
processing on high-speed automatic cutting machines
Development and implementation of a production technology of a full
range of Zn-Al alloy wires intended for corrosion protection by spray
metallization method
WIRE ROD
LOW-LOSS CABLE
ALUMINIUM TAPES
ALMG-VHS
ALUMINIUM ALLOY
BRASS
CAST&DRAW® Tech
ZN-AL ALLOY WIRES
Smart Growth Operational
Programme INNOSTAL
1,079958 986
849 780
259
252
213
IIIQ 2018 IVQ 2018 IQ 2019z Alchemią
IIQ 2019 z Alchemią
IIIQ 2019 z Alchemią
• Positive effects of active management of working capital;
• Working capital decline in Boryszew by PLN 300m (Q3 2019 vs Q3 2018);
• Decrease in inventories by 8% (Q3 2019 vs Q3 2018).
Working capital and debt
19
Working capital
29.8%
-8.13%
-11.1%
-11.6%
2.88 3.04 3.09 3.043.45
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
-1,082 -1,109
1,234 1,244
950 858
Q2 2019 Q3 2019
-903 -746 -789 -909 -948
1,095 1,040 1,014 967 1,009
887 664 761 791 719
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
Liabilities Inventories Receivables
Boryszew
with Alchemia
Boryszew
2.8%-13.9%
-9.8%
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
with Alchemia with Alchemia with Alchemia
2. Market environment
1. Boryszew Group – Q1-Q3 2019 Summary
3. Q1-Q3 2019 financials
4. Operating segments
5. Plans for the next quarters
20
-3
13
20
32 30
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
401
466449
474
424
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
AUTOMOTIVE SEGMENT RESULTS (PLN million)
• The result of the Automotive Segment was mainly influenced by:
+ improved profitability in the Maflow Group;
+ streamlining of production processes;
+ tool sales in BAP;
- Persistently low sales of parts.
Revenues EBITDA
7.1%*
* EBITDA margin
-0.7%*5.6%
-10.5%
21
-6.3%
NOMINATIONS FOR NEW PROJECTS
22
In Q1-Q3 2019, new nominations for contracts with the value
of over EUR 90.9 million were required with EOP 2030*
*EOP - End of Production
Value of new contracts
in Q1-Q3 2019 in EUR million
BAP Group 27.4
Maflow Group 63.5
Share of nominations
concerning electric vehicles in
the total value of nominations
throughout the project life cycle
BAP Group 10%
Maflow Group 47%
923 808
907 856 817
277 242
Q3 2018 Q4 2018 Q1 2019 Q2 2019with
Alchemia
Q3 2019with
Alchemia
75
51 58
82 64
21
-3 Q3 2018 Q4 2018 Q1 2019 Q2 2019
withAlchemia
Q3 2019with
Alchemia
• The Segment’s EBITDA was affected by factors such as:
+ higher EBITDA in NPA Skawina (PLN 1.3m), Huta Oława (PLN 1m) and Hutmen (PLN 0.8m);
- lower EBITDA in Baterpol (PLN 7m), FŁT (PLN 4.1m), Walcowna Metali Dziedzice (PLN 2.7m),
Aluminium Konin (PLN 2m).
METALS SEGMENT RESULTS (PLN million)
Revenues EBITDA
5.8%*
* EBITDA margin
8.1%*
23
14.6%
-6.6%
-18.5%
-40.8%
3.74.1
3.5
5.0
1.7
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
69 81
73
60 59
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
CHEMICALS SEGMENT RESULTS (PLN million)
• The Chemicals Segment’s EBITDA was affected by:
- the effect of a drop in sales of coolant and ergolid fluids in Boryszew ERG;
- increase in the price of flakes and decrease in trade margins in Elana PET.
Revenues EBITDA
2.9%*
* EBITDA margin
5.4%*
24
-14.8%
-1.7%
-54.2%
-66%
2. Market environment
1. Boryszew Group – Q1-Q3 2019 Summary
3. Q1-Q3 2019 financials
4. Operating segments
5. Plans for the next quarters
25
26
FORECAST FOR THE NEXT QUARTERS
•Launch of a new production line in NPA Skawina“The Demonstrator Project”;
•Launch of a new rolling mill in Huta Bankowa;
•Challenges related to the prolonged economic downturn in the automotive industry;
•Plant automation in the Automotive Segment;
•Challenges related to the significant rise in the minimum wage;
•Rising energy prices;
•New structure of Boryszew Group.
Thank you!