2013 Business Year Results

In 2013 Acerinox obtained a result of 22 million euros after taxes and minorities, after adjusting inventories to their net realizable value by an amount of 11 million euros

- Cost control and improvements achieved with the Excellence Plan have increased the competitiveness of the Group

- The fourth quarter confirms that the trend is changing with a result of 15 million euros after taxes and minorities 

The EBITDA of the year, 228 million euros, is 15% higher than that obtained in the prior year despite the fact that the invoicing, 3,966 million euros, was 13% lower

- Net financial debt, 529 million euros, has been reduced by 9%. The ratio of net financial debt to EBITDA is therefore 2.3 times  

In the first year of the Excellence Plan III, 41 million euros of recurrent savings have been achieved

Main markets have undergone improvements in apparent consumption and inventories remain at low levels

World production has increased by 6.8% in 2013, exceeding the historical average rate of 5.9%

The situation in the early months of 2014 makes us confident in the secure of the recovery which has already started 

Stainless Steel Market in 2013

Stainless steel world production rose again in 2013, reaching 37.8 million tons, a figure 6.8% higher than 2012, which improves the historical rate of 5.9%.

Nevertheless, the analysis by geographical market shows four completely different scenarios: Europe/Africa, where production decreased by 3.2% due to the European situation and a rise in imports.  In Americas outputs increased by 3.4% which shows the health of its economy and its domestic consumption. Asia, ex-China, maintain its production stable (0.3%) and China increased by 16%. This country already produces 49% of the stainless steel worldwide, when in 2001 it only represented 3.7%.

After two years of uncertainties, the merger of Outokumpu and Inoxum, was solved with the announcement made by Outokumpu on November, 30th regarding the return of the Italian facility AST to ThyssenKrupp, to meet the requirements demanded by the European Commission. We expect this new situation to contribute to the stabilization of the European market. 

Stainless steel consumption in Europe was in parallel with the economy: consumption in the first quarter was slightly lower than the prior year same period and recovered in  the second, to move to a slightly positive figure of apparent consumption in the third quarter and to end the year 1.7% higher than 2012. The increases occurred especially in the consumption of hot rolled steel, due to a larger investment in capital goods. On the contrary, this did not happen with cold rolled product, which indicates a low demand of consumer goods.

In the United States consumption grew by 4%, being the fourth consecutive year of growth, which shows the strong domestic consumption, the strength of North American economy and the efficiency of its energy and reindustrialization policies.

The apparent consumption in China showed strong growth (13.4%) up to 14.6 million tons, according to the “China Special Steel Enterprise Association”.

In ASEAN countries the apparent consumption continued to increase on an ongoing basis, by 43% since 2008, the year when Bahru Stainless was established and continues to maintain sustained growth expectations for the coming years.    



The Group’s production in 2013,  2,225,018 tons, was slightly higher than that of 2012, and is the highest since 2007. With respect to the previous year, melting production increased by 1.6%, hot rolling by 1.4% and cold rolling by 5.7%.

Due to the low inventories of finished products at the end of 2012 in all markets, the first quarter of 2013 was the highest production of the year, closely followed by the second quarter. Melting production in the third quarter was affected by the planned maintenance outages and installation of new equipment at the Campo de Gibraltar factory.

By factories, Acerinox Europa output in 2013 improved compared to 2012, by 1.5% in melting, 1.8% in hot rolling and 2.6% in cold rolling. NAS production improved by 3.7%, 2.9% and 4.7% in each shop. In the case of Columbus, although the outputs of the melt shop (-2.4%) and hot rolling (-1.8%) were lower than those of 2012, cold rolling production improved by 7.1% due to the increase  in deliveries to South America and the Middle East.

It is also important to highlight the evolution of the production at Bahru Stainless which increased by 63% over 2012.



The Consolidated Group achieved positive results in 2013 despite experiencing one of the most complicated years in the history of stainless steel.

The EBITDA,  228 million euros, was 15.5% higher than that of year 2012, while net sales was reduced by 13% due to weak pricing. It is important to highlight the reduction in staff and operating expenses for an amount of 43 million euros, as a result of the Excellence Plan and savings and improvement plans carried out.

The result includes the adjustment of inventories to their net realizable value for an amount of 11 million euros, as a result of price weakness in the last part of the year and the beginning of 2014

The operating result (EBIT) amounted to 88 million euros, 84.9% higher than the year 2012 and the profit after taxes and minorities was 22 million euros (which significantly improves on the 18 million loss of the prior year). 

The fourth quarter continued the recovery which began in September, and significant savings were realized, thus achieving the best EBITDA of the year, 71 million euros, with only 928 million euros of sales. The result after taxes and minorities was 15 million euros, similar to the first quarter.

Presented below are the most important figures of 2013 compared to 2012:

The strategy of working capital  management which  Acerinox has been executing in the last few years  is directed to reduce as much as possible inventories of material in process and finished goods, to extend the period of payment to suppliers and to factor accounts receivable. 

Financial charges decreased by 17% due to a reduction in debt which is 590 million euros, 9% lower than the previous year. 

At December 31st, 2013 Acerinox had 1,804 million euros of credit lines in force, of which 36% were available. In April of 2013, a syndicated facility for factoring without recourse was signed for an amount of 370 million euros and a tenor of 18 months.

All covenants included in financing agreements and related to the ratios of the Group were met by a significant margin. The ratio of net financial debt/ EBITDA was 2.3 times at December 31st, and net debt/ equity was 34.1%.

The total cash flow generated was 97.2 million euros after making payments for investments in fixed assets for an amount of 161 million euros. 



In 2013, Acerinox made investments for an amount of 126 million euros. 47% corresponds to the building and expansion of the factory of Johor Bahru, essentially Phase II. 

Likewise, it is important to mention the investments made by Acerinox Europa, most of them at the Campo de Gibraltar factory, for an amount of 39.6 million euros mainly for the changes made in the Melt Shop and Hot Rolling Mill which have improved the efficiency of this pioneer factory of the Group.


Human Resources

At the end of 2013 the Group employed 6,983 individuals.  The number of employees has been reduced slightly with respect to the prior year, primarily due to adjustments made in certain European commercial subsidiaries in order to adjust to the current market situation.

54.5% of the Group’s workers carry out their tasks out of Spain. By continents, Europe is the one that houses the highest percentage of workers, 49.7%, followed by Africa (22.9%), America (20.3%) and Asia/Pacific (6.5%).  


Returns to the Shareholder

In the General Shareholder Meeting held on June 5th, 2013, approval was given for payment of a scrip dividend up to a maximum amount of 112,187,045.70 euros,  the same quantity which Acerinox shareholders have received since 2008, made up of a dividend and an issue premium.

This scrip dividend in 2013 replaced the three dividend payments plus the issue premium which were made in prior years.

The Board of Directors in their meeting on December 18, 2013 agreed to delay the decision concerning the returns to the shareholders, although it will propose to maintain the scrip dividend given the good response in 2013.


Excellence Plan III

The third Excellence plan goes into greater detail with regard to the aspects included in the previous plans and incorporates other new aspects, totaling 16 chapters divided into four groups:

- Excellence in operations.

- Excellence in working capital management.

- Excellence in supply chain.

- Commercial excellence

The high involvement of all companies of the Group in the definition and development of the Plan should be noted.  The achievement of 100% of the objectives will result in an annual recurrent saving of an additional 60 million euros from 2015 forward.

During the first year 68% of the goals were achieved which is equivalent to around 41 million euros of recurrent savings. It should also be noted that there has been upward progression in all subjects during the entire year, rising from 40% compliance in the first quarter to 95% in the fourth. 


Commercial Network

Throughout 2013, we continued to implement the strategic plan for the development of our commercial network in Asia, with the opening of offices in Bangkok (Thailand), Manila (the Philippines) and Taipéi (Taiwan), to which we will shortly add Seoul (South Korea). We have also finished the opening of an office in Dubai (United Arab Emirates).

On December 31st, the commercial network of our Group, with presence in 34 countries, consisted of 19 service centers, 28 warehouses and 23 commercial offices, along with the large number of commercial agents in various countries where a permanent office is not available.

By sales figures, the largest market of the Group during 2013 was the United States, followed by Spain, South Africa and Germany.



Apparent consumption increases in main markets and the level of competitiveness achieved by Acerinox make us optimistic for the year 2014.  At the same the weakness of the recovery process causes us to remain cautious and reluctant to make predictions.

The order booking has improved and the inventories continue to be low in all markets, which could result in an increase of prices.


Main financial indicators