vale's performance in 3q15€¦ · “this presentation may include statements that present...
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Vale's performance in 3Q15 October 22, 2015
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Disclaimer
“This presentation may include statements that present Vale's expectations about
future events or results. All statements, when based upon expectations about the
future and not on historical facts, involve various risks and uncertainties. Vale
cannot guarantee that such statements will prove correct. These risks and
uncertainties include factors related to the following: (a) the countries where we
operate, especially Brazil and Canada; (b) the global economy; (c) the capital
markets; (d) the mining and metals prices and their dependence on global
industrial production, which is cyclical by nature; and (e) global competition in the
markets in which Vale operates. To obtain further information on factors that may
lead to results different from those forecast by Vale, please consult the reports
Vale files with the U.S. Securities and Exchange Commission (SEC), the Brazilian
Comissão de Valores Mobiliários (CVM), the French Autorité des Marchés
Financiers (AMF) and The Stock Exchange of Hong Kong Limited, and in particular
the factors discussed under “Forward-Looking Statements” and “Risk Factors” in
Vale’s annual report on Form 20-F.”
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Operational performance
Financial performance
Capital expenditures
Capital structure
DOCUMENT CONTENT
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Operational performance
Financial performance
Capital expenditures
Capital structure
DOCUMENT CONTENT
4
PRODUCTION VOLUMES
Nickel
Kt
Copper³
Kt
Gold
'000 oz
Phosphate Rock
Mt
Iron ore¹
Mt
Coal
Mt
83.1
81.3
71.1
79.4
85.7
83.0
74.5
85.3
88.2
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
62.0
67.9
67.5
61.7
72.1
73.6
69.2
67.1
71.6
94.6
94.6
88.4
81.0
104.8
105.4
107.2
104.9
99.3
76.1
88.3
73.7
70.0
84.0
93.6
102.7
100.0
100.0
2.4
2.3
1.8
2.2
2.3
2.3
1.7
2.0
2.1
2.1
2.3
1.9
2.1
2.2
2.2
2.0
2.1
1.9
Pellets²
Mt
¹ Includes iron ore fines, lump, ROM and iron ore feed for Vale’s pellet plants. Excludes Samarco’s attributable production.
² Excludes Samarco's attributable production.
³ 2013 figures include Tres Valles production (1Q13: 3.7 Kt, 2Q13: 3.6 Kt, 3Q13: 2.9 Kt and 4Q13: 0.8 Kt). Includes Lubambe’s attributable
production.
9.7
10.4
9.9
10.0
11.4
11.6
11.4
12.2
12.2
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PRODUCTION VOLUMES YEAR-ON-YEAR
85.7 88.2
3Q14 3Q15
Iron Ore¹ ²
Mt
11.4
12.2
3Q14 3Q15
Pellets²
Mt
72.1 71.6
3Q14 3Q15
Nickel
Kt
+2.9% +7.0% -0.7%
99.3
3Q14 3Q15
104.8
Copper³
Kt
-5.2%
¹ Includes iron ore fines, lump, ROM and iron ore feed for Vale’s pellet plants.
² Excludes Samarco’s attributable production.
³ Includes Lubambe’s attributable production.
84.0
3Q14 3Q15
100.0
Gold
'000 oz
+19.0%
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SALES VOLUMES
73.4
73.6
57.8
67.4
66.6
78.2
62.3
71.4
74.1
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
Iron ore¹
Mt
Nickel
Kt
Copper²
Kt
Gold
'000 oz
Phosphate Rock
Mt
Coal
Mt
62.0
69.0
65.0
67.0
71.0
69.0
68.0
67.0
72.0
103.2
99.4
83.8
76.3
97.5
95.2
97.5
97.0
94.4
85.5
94.2
78.9
68.7
106.9
96.5
96.9
109.1
104.5
1.8
2.9
1.4
1.9
2.1
2.1
1.6
1.7
1.7
0.9
0.9
0.8
0.8
0.7
0.9
0.7
0.9
0.8
10.2
11.2
10.0
9.5
11.5
12.7
11.3
12.2
12.0
Pellets
Mt
¹ 3Q15 figure includes 70.5 Mt of iron ore ex-ROM and 3.5 Mt of ROM. Excludes Samarco’s attributable production.
² 3Q13 and 4Q13 figures include Tres Valles sales volume. Excludes Lubambe’s attributable production.
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SALES VOLUMES YEAR-ON-YEAR
66.6
74.1
3Q14 3Q15
Iron Ore
Mt
11.5 12.0
3Q14 3Q15
Pellets
Mt
+11.3% +4.3%
97.5 94.4
3Q14 3Q15
Copper
Kt
-3.2%
3Q14 3Q15
Gold
‘000 oz
-2.2%
106.9 71.0 72.0
3Q14 3Q15
Nickel
Kt
+1.4%
104.5
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Operational performance
Financial performance
Capital expenditures
Capital structure
DOCUMENT CONTENT
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ADJUSTED EBITDA¹
US$ billion Adjusted EBITDA margin (%)
5.2 4.9
5.8
6.6
4.1 4.1
3.0
2.2
1.6
2.2 1.9
148.4
126.0 132.5 134.6
120.4
102.6
90.2
74.3
62.4 58.4 54.9
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15
49.0 45.9 47.1 50.6 42.7
¹ Adjusted EBITDA excludes gains and/or losses on sales of assets and non-recurring expenses and includes dividends received from non-
consolidated affiliates
41.4 33.1 24.1
Platts IODEX Iron Ore Price
Average (US$/t)
25.7 31.8 28.8
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EBITDA BY BUSINESS SEGMENT¹
US$ million
1,652
(129)
193
197
(38)
1,875
Ferrousminerals
Coal
Basemetals
Fertilizernutrients
Others
Total
3Q15 2Q15 3Q14
2,411
(149)
781
96
(135)
3,004
1,811
(102)
406
163
(65)
2,213
¹ Excluding non-recurring items.
88
10
11
Share of Total EBITDA (%)
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EVOLUTION OF COSTS AND EXPENSES¹
Costs¹
US$ million
Expenses1,2
US$ million
¹ Net of depreciation and amortization.
² Includes SG&A, R&D, Pre-operating and stoppage and other expenses. Does not include gain/loss on sale of assets
5,510
4,304 4,179
3Q14 2Q15 3Q15
809
633
470
3Q14 2Q15 3Q15
-41.9% -24.2%
12
206
125 100
68
34 31
3Q14 2Q15 3Q15
194
118 121
3Q14 2Q15 3Q15
EVOLUTION OF EXPENSES
SG&A
US$ million
Pre-operating and stoppage expenses
R&D Other expenses¹
274
159 131
¹ Includes contingencies, provisions, profit sharing.
Depreciation
225 187
136
59 72
130
3Q14 2Q15 3Q15
184 203
113
3Q14 2Q15 3Q15
284 259 266
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22.5
15.8
12.7
3Q14 2Q15 3Q15
EVOLUTION OF IRON ORE FINES CASH COST, FREIGHT AND
EXPENSES
C1 Cash Cost FOB Port¹
Freight
22.3
16.8 16.4
3Q14 2Q15² 3Q15³
US$/t
-43.6%
¹ Ex-ROM. Excludes royalties.
² Excludes US$ 2.0/t of the bunker oil hedge treated as hedge account.
³ Excludes US$ 2.4/t of the bunker oil hedge treated as hedge account.
-26.5%
Expenses
5.9
3.9
3.2
3Q14 2Q15 3Q15
-45.8%
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COST AND EXPENSES LANDED IN CHINA FOR IRON ORE FINES
US$/t
12.7
16.4
4.4
2.8 36.3 2.1
34.2
C1 Cash Cost Freigth Royalties &Expenses
Moisture Delivered Cost& Expenses
(dmt)
Quality Total
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¹ Adjustment as a result of provisional prices booked in 2Q15 at US$ 54.5/t.
² Weighted average difference between prices provisionally set at the end of 3Q15 at US$ 51.5/t based on forward curves and the US$ 54.9/t from
the 3Q15 IODEX
³ Vale price is net of taxes.
PRICE REALIZATION – IRON ORE FINES
US$/t, 3Q15
AveragePlatts
2Q15 (dmt)
Quality Premium/Discountand Commercial
Conditions
Provisionalprices in
prior quarter¹
Laggedprices
Current Provisionalprices
in currentquarter²
CFRreference price
(dmt)
Adjustmentfor
FOB Sales
Moisture Vale CFR/FOBprice (wmt)³
Impact of pricing system adjustments
US$/t
54.9 1.5
0.6 0.7 0.2 0.5 1.1 56.0 5.3
4.3
46.5
-8.4
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IRON ORE PRICING SYSTEMS
Impact of Pricing Mechanisms
US$ / t
¹ Provisional prices were settled at US$ 51.5 /t at the end of 3Q15.
Pricing System Breakdown
%
Provisional - prior quarter
Lagged
Current
Provisional - current quarter
0.4
-0.7
2Q15 3Q15
1.0 0.2
2Q15 3Q15
1.1 0.5
2Q15 3Q15
-1.1
2Q15 3Q15
12% 13%
52% 49%
36% 38%¹
2Q15 3Q15
Lagged
Current
Provisional
-1.4
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Operational performance
Financial performance
Capital expenditures
Capital structure
DOCUMENT CONTENT
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EVOLUTION OF CAPITAL EXPENDITURES
US$ million
2,244
1,434 1,232
933
685
647
3,177
2,119
1,879
3Q14 2Q15 3Q15
Sustaining
Projects-40.9%
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PROJECT PROGRESS INDICATORS
3Q15
Project Capacity
Mtpy
Estimated
start-up
Executed capex
US$ million
2015 Total
Estimated capex
US$ million
2015 Total
Physical
progress
Carajás Serra Sul S11D 90 2H16 864 4,356 1,321 6,878² 75%
CLN S11D 230 (80¹) 1H14 to 2H18 1,353 4,006 2,375 9,484² 50%
Cauê Itabiritos 24 (4¹) 2H15 202 888 350 1,317³ 92%
CSP4 1.5 1H16 - 1,055 185 1,2244 92%
Moatize II 11 2H15 382 1,766 629 2,068 96%
Nacala corridor 18 2H14 643 3,536 648 4,444 94%
¹ Net additional capacity
² Original capex budget for S11D of US$ 8.089 billion and for CLN S11D of US$ 11.582 billion
³ Original capex budget of US$ 1.504 billion 4 Original capex of US$ 2.734 billion; out of the original capex – US$ 1.491 billion financed directly by CSP project.
.
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Operational performance
Financial performance
Capital expenditures
Capital structure
DOCUMENT CONTENT
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21,034
26,509 24,213
3Q14 2Q15 3Q15
DEBT POSITION
Gross Debt
US$ million
Net Debt
Cash position
September 30, 2015
4,462
29,366 29,773 28,675
3Q14 2Q15 3Q15
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FINANCIAL INDICATORS¹
11.1
5.9 5.3
3Q14 2Q15 3Q15
Interest coverage - Ratio
1.2
2.9 3.1
3Q14 2Q15 3Q15
Net Debt / LTM² EBITDA - Ratio
9.1
8.4 8.3
3Q14 2Q15 3Q15
Maturity - years
4.50 4.43 4.37
3Q14 2Q15 3Q15
Cost of Debt - %
¹ Ex-Refis
² LTM – last twelve months. Excluding non-recurring items.
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