Financial Statement Analysis for SIDENOR S.A. Efstratios Patsatzis MBA Canditate Supervisor Dr. Nicos Sykianakis

Presentation key points Sector – Main Competitors The Company (History, Products, Shareholders, Structure) Financial Statements of SIDENOR S.A. Financial Statement Analysis

Presentation key points Liquidity Ratios Turnover Ratios Return Ratios Capital Structure Ratios Investor Ratios Conclusions

Sector – Main Competitors Steel production and trading sector Main Competitors “HELLENIC HALYVOURGIA” “HALYVOURGIKI”

SIDENOR S.A. - History 1962 - Establishment of the Company with the name “VIOHALCO - SANITAS SA” 1971 - The corporate name is changed into “STEEL INDUSTRY OF NORTHERN GREECE SA” 1974 - ERLIKON SA and SIDENOR SA commence co-operating 1977 - The corporate name is changed to “SIDENOR - STEEL INDUSTRY OF NORTHERN GREECE SA” 1979 - The corporate name is changed to “SIDENOR Steel Products Manufacturing Company SA” 

SIDENOR S.A. - History 1994 - ERLIKON SA lists its stock through public offering in the Main market of Athens Stock Exchange 1997 - Absorption of SIDENOR SA by ERLIKON SA and change of corporate name into SIDENOR SA 1999 - Commencement of production by rolling mill of SOVEL SA (subsidiary) 2001 - The electrode production sector is split-off from the Company and incorporated into ERLIKON Wire Processing SA. SIDENOR takes over 75% of the Bulgarian STOMANA INDUSTRY SA. The new steel mill of SOVEL SA commences production.

SIDENOR S.A. - History 2003 - The holding of SIDENOR SA in the subsidiary STOMANA INDUSTRY SA increases to 79.50%. KEM SA and ATTICA METAL PROCESSING SA was finalized by SOVEL SA. Sidenor’s Quality Management System is certified according to ISO 9001:2008. SIDENOR launches High Ductility grade C concrete reinforcing steel into the market. 2004 - SIDENOR acquires majority holding in CORINTH PIPEWORKS SA. 2006 - SIDENOR establishes new subsidiary DOJRAN STEEL.

SIDENOR S.A. - Products SD Integrated Concrete Reinforcing System Merchant Bars Wire Rod Pipes - Hollow Sections Hot-Rolled Steel Plates Special Steels

SIDENOR S.A. - Structure

SIDENOR S.A. - Shareholders

Financial Statements Statement of Financial Position

Financial Statements Statement of Comprehensive Income

Financial Statements Cash Flow Statement

Financial Statements Cash Flow Statement

Financial Statements Statement of Financial Position Fixed Assets / Total Assets 360.770.511 / 593.401.564 = 0,6080 or 60,80% Current Assets / Total Assets 232.631.053 / 593.401.564 = 0,3920 or 39,20% (Note: Intangible Assets / Total Assets equals zero)

Financial Statements Liquidity Ratios Current Ratio CR = Current Assets / Current Liabilities 232.631.053 / 274.675.258 = 0,846 Quick Ratio QR = Current Assets - Inventories / Current Liabilities 150.967.120 / 274.675.258 = 0,549

Financial Statements Liquidity Ratios Acid Ratio AR = Cash / Current Liabilities 8.320.061 / 274.675.258 = 0,030

Financial Statements Turnover Ratios Inventory Turnover Ratio ITR = Cost of Sales / Avg. Inventory 232.381.323 / 111.739.687 = 2,1times / year Days in Inventory = 365 / 2.1 = 174days

Financial Statements Turnover Ratios Receivables Turnover Ratio RTR = Sales / Avg. Receivables 276.530.121 / 49.460.084 = 5,57times / year Days in Accounts Receivables = 365 / 5,57 = 66days

Financial Statements Turnover Ratios Accounts Payable Turnover Ratio (Purchases = Cost of Sales - Ending Inventory + Starting Inventory) PTR = Purchases / Avg. Payable 235.730.038 / 98.467.193,5 = 2,39times / year Days in Suppliers = 365 / 2,83 = 153days

Financial Statements Turnover Ratios Inventory Conversion Cycle 240 days Net Cash Conversion Cycle 87 days

Financial Statements Cash Flow Analysis Cash Flow from Operating Activities CF(OA) = - 49.589.580 (CFoa < Current Liabilities)

Financial Statements Cash Flow Analysis Cash Flow from Investing Activities CF(IA) = - 5.818.290 Cash flow from Financing Activities CF(FA) = 33.497.870

Financial Statements Cash Flow Analysis Net decrease in cash & cash equivalents for the period -21.910.000 Cash & cash equivalents at the end of the period 8.320.061

Financial Statements Return Ratios Return on Total Assets Ratio ROTA = Net Earnings / Avg. Total Assets -25.443.969 / 598.607.226 = -0,043 or -4,3% Return on Equity Ratio ROE = Net Earnings / Avg. Equity -25.443.969 / 265.185.196,5 = -0,096 or -9,6%

Financial Statements Return Ratios Return on Sales Ratio Net Earnings / Sales -25.443.969 / 276.530.121 = -0,092 or -9,2% Total Assets Turnover Ratio Sales / Avg. Total Assets 276.530.121 / 598.607.226 = 0,462 or 46,2%

Financial Statements Capital Structure Ratios Financial Leverage Avg. Total Assets / Avg. Equity 598.607.226 / 265.185.196,5 = 2,26 (equity = 1, liabilities = 1,26)

Financial Statements Capital Structure Ratios Equity / Assets 252.463.212 / 593.401.564 = 42,5% Liabilities / Assets 340.938.352 / 593.401.564 = 57,5% Debt / Equity 340.938.352 / 252.463.212 = 1,35

Financial Statements Investor Ratios Nominal Value per Share Share Capital / No of Shares 39.460.002 / 96.243.908 = 0,41 euro Net Accounting Value per Share Equity / No of Shares 540.166.817 / 96.243.908 = 5,61 euro

Financial Statements Investor Ratios Earnings per Share Net Earnings / No of Shares -55.898.679 / 96.243.908 = -0,51 euro P / E – P / BV Price / Earnings per Share 2,42 / -0,51 = -4,75 times Price / Book Value 2,42 / 5,61 = 0,43 times

Financial Statement Analysis Conclusions Disability to cover short-term debt Large amount of Inventory held Long period in Accounts Receivables Negative Cash Flow from OA

Financial Statement Analysis Conclusions Negative ROTA, ROE, Return on Sales Losses per Share Financing Conflict