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ACERINOX: MESSAGES FROM THE COMPANY’S CONFERENCE CALL (ANÁLISIS BANCO SABADELL)

Highlights from today’s virtual roadshow:

 Operating performance: The company foresees a “significantly” positive EBITDA level in the 2Q’20 thanks to the stability of prices, the cost-cutting measures and the favourable performance of April. It also expects positive FCF thanks to the good performance of working capital. The situation in the US is robust, and in Europe the company thinks that the protectionist measures will have a greater impact than those implemented thus far, as they are applied from the first ton.
 Dividend: The dividend will most likely be paid and only in a catastrophic scenario (not foreseen) the payment could be cancelled given the company’s comfortable financial position. The company has not ruled out the possibility of a payment in scrip format out although it is regarded as unlikely. However, what seems clear is that the payment could take place in the 4Q’20 (vs. June/July usually).
 VDM: The integration is progressing as expected, in a simple and satisfactory manner. Its contribution to the 2Q’10 results might total between € 15 M and € 20 M, in line with the forecast from the beginning of the year and given the current visibility into the company’s backlog.
In general terms, the messages provided are positive as regards both operating performance and the company’s financial position. Specifically, we believe that its liquidity position of €~1.45 Bn (of which €~1.1 Bn corresponds to cash vs. € 508 M of debt maturities in the next 3 years) gives the company confidence. Moreover, price stability and strong cost cutting measures will allow it to whether the crisis. The overall tone is that “the worst is over”, against a backdrop of low visibility, and this feeling has been passed onto the results presentation held on Friday.