Business Year 2009 Results

 

- ACERINOX GROUP MAINTAINS POSITIVE RESULTS AFTER TAXES AND MINORITIES (+6.4 MILLION EUROS) IN THE FOURTH QUARTER.

- THE PROFITS REGISTERED IN THE SECOND HALF OF THE YEAR ARE INSUFFICIENT TO OFFSET THE LOSSES OF THE FIRST HALF OF THE YEAR REGISTERED AS A RESULT OF THE WORLD ECONOMIC AND INDUSTRIAL RECESSION. 

- THE YEAR NET LOSS HAS BEEN REDUCED TO 229.2 MILLION EUROS.

- THE GROUP HAS IMPROVED ITS WORKING CAPITAL IN 498 MILLION EUROS, MAINLY DUE TO THE SIGNIFICANT REDUCTION OF INVENTORIES CARRIED OUT DURING THE YEAR  FOR AN AMOUNT OF 412 MILLION EUROS.

- THE COMBINED EFFECT OF THE MARKET IMPROVEMENT, THE ADJUSTMENT PLAN AND THE EXCELLENCE PLAN STRENGTHEN ACERINOX GROUP COMPETITIVENESS AND ALLOW US TO BE OPTIMISTIC FOR 2010.

- THE GROUP MAINTAINS ITS SRATEGIC PLAN UNALTERED.

- WE FORECAST THAT 2010 WILL BE A RECOVERY YEAR. THE FIRST QUARTER RESULTS WILL BE POSITIVE IN LINE WITH THE PROFITS ACHIEVED IN THE LAST TWO QUARTERS OF 2009.
 

 

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Summary of year 2009

The world economic crisis and the halt of the industrial activity, together with the strong process of reduction of stainless steel inventories in the factories and warehouses, were the main feature of the first half of the year, and the worst one in the stainless steel history.  In the second half of the year the market situation improves, together with the joint effects of the Excellence Plan 2009-10 and the Adjustment Plan, which determined the Group results change of trend.

The registered net losses, 229.2 million euros, give proof of the dramatic difficulties the sector has gone through during year 2009.  Symmetrical to 2008, the year shows to well distinguished halves. 

In such a complex year ACERINOX has managed to confirm its leadership in North America, to confirm its policy of opening trading offices, to hasten its Excellence Plan implementation and to bring out its investment in a plant in Asia, which is an essential mainstay in the Group strategy until 2020. Hence the change of trend of 2009 and our optimism facing this year.

Productions

In such a tough year as 2009 ACERINOX Group production has matched the market demand and to the established plans to reduce inventories.

In this context, the geographical diversification of the production assets  and the wide commercial network in the five continents have played a primary role, making the best of the demand increases where they were locally taken place.

  

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In this context, ACERINOX Group has had a good performance, better than the average of the sector, excluding China, decreasing its production by 11.6% with regard to 2008.  It is to be highlighted the very positive production increase of COLUMBUS, +3.4%, making the best of the Asian markets improvement.

 

Results

ACERINOX Group has achieved negative results after taxes and minorities of 229.2 million euros.

  

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The main magnitudes achieved in the year are the following:

  

  

Yearly return to shareholders in 2010.

According to the announcement of the 18th December 2009, ACERINOX Board of Directors, in its meeting held on that date, resolved to propose to the next General Shareholders Meeting to keep a return of 0.45 euros per share during year 2010.

Thus, should the General Shareholders Meeting approves the return of 0.35 euros proposed by the Board of Directors of the 5th of July 2010 and the refund of the issue premium of 0.10 euros per share to be effective in October 2010, the  yearly return to the shareholders would be 0.45 euros per share, the same as in years 2007, 2008 and 2009 for the equal concepts. 


Excellence Plan

In February 2009 “the Excellence Plan 2009-2010” was brought out. It consists  of 10 chapters, which include improvements of quality and process, inventories management, reduction of costs and  better use of the synergies among factories and service centers of the Group.  The results of the implementation of this program were estimated in recurrent savings of 133 million euros yearly, from the third year.

As of 31st December 2009, after 10 months of the plan application, 64% of the fixed targets on regular basis have been achieved and the forecasted savings are being obtained steadily.  During 2010 we will continue working in this field to complete the whole plan.


Strategic Plan

In spite of the world economic situation, the Group has maintained its Strategic Plan, which will be developed until 2020.  An essential part of this Plan is the investment in the new factory in Malaysia, Bahru Stainless.

 - Bahru Stainless

The works are well under  progress. All the equipment of the first phase, and the main supplies have already been contracted. The construction works of the pier which will give service to the factory are also well advanced.

The cutting lines will come into operation at midyear 2010.

The cold rolling operations will start in the second half of 2011. The investment of the first phase has been increased to 370 million USD and the second phase is being prepared.

  - Commercial Development

During 2009 we concluded the enlargement of Birmigham warehouse (UK) and began the construction of a new warehouse in Bolonia (Italy), which will be operation in June 2010.

The investments in the new cutting lines for the service centers of Pennsylvania (US) y de Warsaw (Poland) have come to and end and very soon new cutting equipment will be installed in Monterrey (Mexico).

Likewise, offices have been opened in Mumbai (India) and Wuxi (China).

In March the purchase of Yick Hoe Metals was completed, and consequently the Group becomes the first distributor in Malaysia, where the local network has been enlarged with the two new warehouses of Kuala Lumpur and Penang, which are already in operation. 

A new office in Yakarta (Indonesia) will be opened soon.


Outlook

At the beginning of 2010 we are noticing improvements in demand, which mean increases in the order book and in the production activity, which will improve the results at the end of the first quarter, and will be confirmed in the second quarter.

In 2010 the recovery will take place, although its strength will be determined by the general economy evolution.