ANIOY - Acerinox S.A.(ANIOY) Q1 2024 Earnings Call Transcript

2024-04-26 12:37:10 ET

Acerinox, S.A.(ANIOY)

Q1 2024 Results Conference Call

April 25, 2024 4:00 AM ET

Company Participants

Carlos Lora-Tamayo - Head of Investor & Media Relations

Miguel Ferrandis - Chief Financial Officer

Conference Call Participants

Krishan Agarwal - Citibank

Tristan Gresser - BNP Paribas

Ioannis Masvoulas - Morgan Stanley

Bastian Synagowitz - Deutsche Bank

Oscar Rodriguez - Banco de Sabadell

Moses Ole - JPMorgan

Jose Suarez - Caixa Bank

Presentation

Carlos Lora-Tamayo

Thank you. Good morning, everybody, and welcome to the Acerinox's Earnings Conference Call for the First Quarter 2024. Our CFO, Miguel Ferrandis, will host the call and we'll be accompanied in other occasions, by the Investor Relations team. He will start with a short presentation, and then we will continue with the Q&A session. Before getting started, let me remember you that this conference call is being broadcast on our website at acerinox.com. Please, Miguel, go ahead.

Miguel Ferrandis

Thank you. Good morning. Thank you for your interest in attending this presentation. We have released this morning a detailed results report, which we consider itself as plenary. So we shall concentrate this webcast of today and just explaining the key message from our side and obviously attending your questions, as Carlos has stated. First of all, you know we try to be predictable and we are not willing to provide you on stock prices. So the first issue to remark is that we have obtained an EBITDA of €111 million that we consider is satisfactory especial in view of the actual challenging conditions. The challenging conditions this time is not only still the full performance on the stainless market in Europe. But in our case, this also has been a strong influence by the strike. We are suffering at our plant in the South of Spain. And this is having its relevance. The result for us is satisfactory, as I have been expressing keeping in mind that it's in line with the market consensus.

When we presented the year results, we announced that the first quarter figure should be slightly better. And we explained that the word slightly was because of the strike. Our normal situation, the first quarter results should be better. But we prefer to say at that time that it shall be slightly better. And slightly is as a consequence of the strike we are facing. We shall talk later about it. But even though-- on that circumstances, the fact that we have obtained this quarterly EBITDA for us is a strong fact for being satisfied. It's relevant and a strong performance in our cash generation in this period. So we have made a cash generation of €188 million, mostly supported by the strong discipline on inventory reduction of €89 million especially in the High-Performance Alloys area, but also in the stainless as well. So this is also one of the key facts we want to reinforce as strong satisfaction with the performance we have achieved in this first quarter.

As a consequence of the strong cash generation, our net debt goes down more than 30% compared with that at the end of December. So we are presenting today, net financial debt of €234 million, which is the lowest of the last 24-25 years. And the outlook we are mentioning today is that the Q2 shall be slightly higher. We should have preferred to talk that it should be higher according to market conditions. But we must keep in mind that still, during April, our plant in Spain is keeps suffering the strike. And as a consequence of that, our commitment for the Q2 results is that it shall be better, but slightly better, keeping in mind that still today, ending April, the plan remains on strike. So these are the key messages that we now shall try to explain a bit more in detail.

When we move to in Slide 3. When we move to the circular economy and sustainable development, we have a strong achievements that reinforce the awards we are obtaining. We have renovated our Platinum award by [indiscernible], as you know. And it's clear that we have a lot of areas to be proud about. We are extremely efficient in recycling, in waste reduction in water with [indiscernible]. We are moving ahead also in diversity. In terms of the emission, we have provided 8% reduction in emissions. And this is as a consequence of all the electrification we are actually implementing as well as increasing the renewable electricity in our plants. So this is -- these are also strong facts to reinforce....

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