Steel Industry Financial Model

Project title: Project 1a Date: 30-May-19

Responsible: Mr John M. Time: 12:35 PM
Steel Industry Financial Model

Contents For Training Purposes Only

© Big 4 Wall Street Ltd
 Steel Industry Financial Model All rights reserved

q Timing See our websites for more information:

q Production www.big4wallstreet.com
q Scrap www.big4wallstreet.org
q Sales Important Disclaimer:
q Overheads The Model has been constructed for a specific purpose and is not
q Other intended for distribution to third parties.
q Calcs
q WACC The Model's use is intended solely for training and educational
q Financial Statements purposes in order to support customers of Big 4 Wall Street Ltd
("B4WS").
q Graphs
q Valuation
Big 4 Wall Street does not assume any responsibility or liability /
q Checks damages whatsoever - real or perceived - to the client or to any third
party, for any other use or purpose.

No part of this document can be reproduced or shared

in any way without the prior written permission of B4WS.

In case of copyright infringement B4WS will contemplate pursuing all

available legal remedies, including seeking monetary damages,
injunctive relief, and an order that you pay court costs and attorney’s
fees.
Steel Industry Financial Model
Timing
Actual Forecast Forecast Forecast Forecast Forecast Forecast
1.0 2.0 3.0 4.0 5.0 6.0
The Model is fully functional 1-Jan-19 1-Jan-20 1-Jan-21 1-Jan-22 1-Jan-23 1-Jan-24
Model Checks are OK ######## ######## ######## ######## ######## ######## ########

1 . Timelines
1.1 Period Considered
Model Start Date Date 31-Dec-18
Months in Period Months 12
Ending Date Date
Start of Forecast Date 1-Jan-19

1.2 Useful date flags

End date for model flag Date 31-Dec-24
Months in year Months 12
Actual days in period Days 365

2 . Model Info
2.1 Information
Multiplier USD 1,000
Model name Name Steel Industry Financial Model
2.2 Cells Color Coding
Model Input Data 100
Call Ups 100
Calculations 101
2.3 Worksheets / Tabs Color Coding
Input Sheets
Calculations Sheets
Output Sheets
Admin Sheets

Error Control OK Err

2.4 Other conventions

Percentage %
Currency USD
End of Sheet
Steel Industry Financial Model
Production Actual Forecast Forecast Forecast Forecast Forecast Forecast
1.0 2.0 3.0 4.0 5.0 6.0
The Model is fully functional OK Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24
Model Checks are OK Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24

1 . Melt Shop Production Hours

Annual Operating Weeks Weeks 47 47 47 47 47 47
Operating Days per Week Days 6 6 6 6 6 6
Operating Hours per Day Hrs 15 15 15 15 15 15

Operating Hours per Week Hrs 90 90 90 90 90 90

Operating Hours per Year Hrs 4,230 4,230 4,230 4,230 4,230 4,230
2 . Melt Shop Production
Melt Shop Productivity Tns / Hr 160 160 160 160 160 160
Melt Shop Production (Billets) Tns 676,800 676,800 676,800 676,800 676,800 676,800
Maximum Capacity Tns 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
Check OK OK OK OK OK OK OK
3 . Rolling Mill Production Hours
Losses % 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%
Returns % 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%
Total % 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%
Rolling Mill Production Tns 649,728 649,728 649,728 649,728 649,728 649,728
Maximum Capacity Tns 800,000 800,000 800,000 800,000 800,000 800,000
Check OK OK OK OK OK OK OK

Rolling Mill Productivity Tns / Hr 145 145 145 145 145 145
Hours per Week Hrs 95 95 95 95 95 95
Operating Hours per Day Hrs 16 16 16 16 16 16
4 . Variable Production Costs
4.1 Energy
Cost of Energy USD / Mwh 35 35 35 35 35 35
Energy Consumption Melt Shop Kwh / Ton 500 500 500 500 500 500
Energy Consumption Rolling Mill Kwh / Ton 250 250 250 250 250 250
Cost of Energy (Melt Shop) USD / Ton 17.5 17.5 17.5 17.5 17.5 17.5
Cost of Energy (Rolling Mill) USD / Ton 8.8 8.8 8.8 8.8 8.8 8.8
Cost of Energy USD / Ton 27.0 27.0 27.0 27.0 27.0 27.0
Energy Costs USD 17,529,120 17,529,120 17,529,120 17,529,120 17,529,120 17,529,120
4.2 Other Variable Costs

Melt Shop Variable Cost USD / Ton 40 40 40 40 40 40

Rolling Mill Variable Cost USD / Ton 8 8 8 8 8 8
Melt Shop Variable Cost USD 26,733,600 26,733,600 26,733,600 26,733,600 26,733,600 26,733,600
Rolling Mill Variable Cost USD 5,360,256 5,360,256 5,360,256 5,360,256 5,360,256 5,360,256
Energy Costs USD 17,529,120 17,529,120 17,529,120 17,529,120 17,529,120 17,529,120
Total Variable Costs USD 49,622,976 49,622,976 49,622,976 49,622,976 49,622,976 49,622,976
Total Variable Costs USD / Ton 76 76 76 76 76 76
End of Sheet
Steel Industry Financial Model
Scrap Actual Forecast Forecast Forecast Forecast Forecast Forecast

1.0 2.0 3.0 4.0 5.0 6.0

The Model is fully functional OK Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24
Model Checks are OK Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24

1 . Scrap Needs
Melt Shop Production (Billets) Tns 676,800 676,800 676,800 676,800 676,800 676,800

Scrap Losses % 12.5% 12.5% 12.5% 12.5% 12.5% 12.5%

Impurities Losses % 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%
Total Melt Shop Losses % 13.5% 13.5% 13.5% 13.5% 13.5% 13.5%
Scrap Needs Tns 782,428 782,428 782,428 782,428 782,428 782,428
2 . Scrap Sourcing
Local Scrap Market Size Tns 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
Market Share % 48.0% 48.0% 48.0% 48.0% 48.0% 48.0%
Scrap Needs Tns 782,428 782,428 782,428 782,428 782,428 782,428
Local Sourcing Tns 480,000 480,000 480,000 480,000 480,000 480,000
Regional Scrap Market Size Tns 700,000 700,000 700,000 700,000 700,000 700,000
Market Share Tns 20.0% 20.0% 20.0% 20.0% 20.0% 20.0%
Scrap Needs Tns 302,428 302,428 302,428 302,428 302,428 302,428
Regional Sourcing Tns 140,000 140,000 140,000 140,000 140,000 140,000
Returns from Production Tns 19,492 19,492 19,492 19,492 19,492 19,492
Scrap Needs Tns 162,428 162,428 162,428 162,428 162,428 162,428
SPOT Market Sourcing Tns 142,936 142,936 142,936 142,936 142,936 142,936
3 . Scrap Raw Materials Cost
Local Scrap Spread vs International USD 30
Regional Scrap Spread vs International USD 15
Local Scrap Price USD 320 320 320 320 320 320
Regional Scrap Price USD 335 335 335 335 335 335
International Scrap Price USD 350 350 350 350 350 350
Cost of Returns USD 10 10 10 10 10 10
Scrap Cost USD 250,722,485 250,722,485 250,722,485 250,722,485 250,722,485 250,722,485
Scrap Cost per Ton of Scrap USD / Ton 320 320 320 320 320 320
End of Sheet
Steel Industry Financial Model
Sales Actual Forecast Forecast Forecast Forecast Forecast Forecast

1.0 2.0 3.0 4.0 5.0 6.0

The Model is fully functional OK Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24
Model Checks are OK Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24

1 . Sales Split per Market

Rolling Mill Production Tns 649,728 649,728 649,728 649,728 649,728 649,728

Local Market Size Tns 500,000 550,000 530,000 600,000 610,000 630,000
Market Share % 52.0% 52.0% 52.0% 52.0% 52.0% 51.0%
Sales Max Tns 649,728 649,728 649,728 649,728 649,728 649,728
Local Sales Tns 260,000 286,000 275,600 312,000 317,200 321,300

Regional Market Size Tns 400,000 450,000 500,000 600,000 700,000 700,000
Market Share Tns 25.0% 25.0% 25.0% 25.0% 25.0% 25.0%
Sales Max Tns 389,728 363,728 374,128 337,728 332,528 328,428
Regional Sales Tns 100,000 112,500 125,000 150,000 175,000 175,000

Sales Max Tns 289,728 251,228 249,128 187,728 157,528 153,428

SPOT Market Sales Tns 289,728 251,228 249,128 187,728 157,528 153,428

2 . Selling Prices by Market

International Scrap Price USD 350 350 350 350 350 350
Local Price Spread USD 272 272 272 267 267 260
Regional Price Spread USD 190 190 190 182 182 180
SPOT Price Spread USD 120 120 120 130 130 130

Local Selling Price USD / Ton 622 622 622 617 617 610
Regional Selling Price USD / Ton 540 540 540 532 532 530
SPOT Selling Price USD / Ton 470 470 470 480 480 480

3 . Revenues
Local Market USD 161,720,000 177,892,000 171,423,200 192,504,000 195,712,400 195,993,000
Regional Market USD 54,000,000 60,750,000 67,500,000 79,800,000 93,100,000 92,750,000
SPOT Market USD 136,172,160 118,077,160 117,090,160 90,109,440 75,613,440 73,645,440
Revenues USD 351,892,160 356,719,160 356,013,360 362,413,440 364,425,840 362,388,440
Price per Ton USD / Ton 542 549 548 558 561 558
% Growth % 1% 0% 2% 1% -1%

4 . Transportation Costs
Local Market USD / Ton 25 25 25 25 25 25
Regional Market USD / Ton 40 40 40 40 40 40
SPOT Market USD / Ton 5 5 5 5 5 5
Local Market USD 6,500,000 7,150,000 6,890,000 7,800,000 7,930,000 8,032,500
Regional Market USD 4,000,000 4,500,000 5,000,000 6,000,000 7,000,000 7,000,000
SPOT Market USD 1,448,640 1,256,140 1,245,640 938,640 787,640 767,140
Transportation Costs USD 11,948,640 12,906,140 13,135,640 14,738,640 15,717,640 15,799,640
Transportation per TonUSD / Ton 18 20 20 23 24 24
End of Sheet
Steel Industry Financial Model
Overheads Actual Forecast Forecast Forecast Forecast Forecast Forecast

1.0 2.0 3.0 4.0 5.0 6.0

The Model is fully functional OK Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24
Model Checks are OK Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24

1 . Overheads
1.1 Production Overheads
Inflation on Costs % 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%
Inflation Index % 1 1.01 1.02 1.03 1.04 1.05 1.06

Operating Hours per Week Hrs 90 90 90 90 90 90

Hours per Week # Shifts

Shifts up to x Hours per Week 40 1 1 1 1 1 1 1
Shifts up to x Hours per Week 90 2 1 1 1 1 1 1
Shifts up to x Hours per Week 120 3 - - - - - -
Shifts up to x Hours per Week 150 4 - - - - - -
Workforce Headcount 220 220 220 220 220 220
Cost per Person USD / Year 28,000 28,000 28,000 28,000 28,000 28,000
Labor Cost USD 6,221,600 6,283,816 6,346,654 6,410,121 6,474,222 6,538,964

Additional Persons per Shift # 40 40 40 40 40 40

Additional # Shift # 2 2 2 2 2 2
Cost per Person USD / Year 25,000 25,000 25,000 25,000 25,000 25,000
Shift Labor Cost USD 2,020,000 2,040,200 2,060,602 2,081,208 2,102,020 2,123,040

Maintenance USD 3,900,000 3,939,000 3,978,390 4,018,174 4,058,356 4,098,939 4,139,929

Insurance USD 340,000 343,400 346,834 350,302 353,805 357,343 360,917
Other Fixed Cost USD 536,000 541,360 546,774 552,241 557,764 563,341 568,975
Staff Expenses USD 488,000 492,880 497,809 502,787 507,815 512,893 518,022
Third Part Expenses USD 673,000 679,730 686,527 693,393 700,326 707,330 714,403
Total Production Overheads USD 5,937,000 14,237,970 14,380,350 14,524,153 14,669,395 14,816,089 14,964,250
1.2 Administrative Expenses
Sales, General & Administrative Expenses USD 2,200,000 2,222,000 2,244,220 2,266,662 2,289,329 2,312,222 2,335,344
Management & Headquarters USD 3,400,000 3,434,000 3,468,340 3,503,023 3,538,054 3,573,434 3,609,169
Administrative Expenses USD 5,600,000 5,656,000 5,712,560 5,769,686 5,827,382 5,885,656 5,944,513
End of Sheet
Steel Industry Financial Model
Other Actual Forecast Forecast Forecast Forecast Forecast Forecast

1.0 2.0 3.0 4.0 5.0 6.0

The Model is fully functional OK 1-Jan-19 1-Jan-20 1-Jan-21 1-Jan-22 1-Jan-23 1-Jan-24
Model Checks are OK 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21 31-Dec-22 31-Dec-23 31-Dec-24

1 . Assumptions
1.1 Tax Assumptions
Tax Rate % 26.00% 26.00% 26.00% 26.00% 26.00% 26.00% 26.00%
2 . Non Current Assets
2.1 Depreciation
2.1.1
Depreciation Schedule
Investment % / Years 2.5% 40.00
2.2 Existing Non Current Assets
2.2.1
Net Book Value of Existing Assets
Net Book
Acquisition Cost Value
Investment USD 300,000,000 150,000,000

2.3 Capital Expenditures

Investment % on 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
Steel Industry Financial Model
Other Actual Forecast Forecast Forecast Forecast Forecast Forecast

1.0 2.0 3.0 4.0 5.0 6.0

The Model is fully functional OK 1-Jan-19 1-Jan-20 1-Jan-21 1-Jan-22 1-Jan-23 1-Jan-24
Model Checks are OK 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21 31-Dec-22 31-Dec-23 31-Dec-24
3 . Current Assets and Liabilities
3.1 Current Assets
3.1.1
Inventory
Inventory (B/f) USD 79,803,611
Days Inventory Outstanding Days 100 100 100 100 100 100

3.1.2
Account Receivables
Accounts Receivables (B/f) USD 108,000,000
Days Sales Outstanding Ημέρες 120 120 120 120 120 120

3.1.3
Other Non Current Assets
Other Non Current Assets USD 3,744,379
Yearly % Decrease % 1% 1% 1% 1% 1% 1%

3.2 Cash Assumptions

Average Cash Deposit Rate % 0.8% 0.8% 0.8% 0.8% 0.8% 0.8%
Cash at Bank USD 1,500,000 -
Minimum Cash Level USD 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000

3.3 Current Liabilities

3.3.1
Account Payables
Accounts Payables (B/f) USD 70,000,000
Days Paybale Outstanding Days 90 90 90 90 90 90

3.3.2
Other Payables
Other Payables (B/f) USD 442,822 442,822 442,822 442,822 442,822 442,822 442,822

3.3.3
T axes
Income Tax Payable (B/f) USD 16,033
VAT Payable (B/f) USD 15,746

3.3.4
Other Liabilities
Other Liabilities (B/f) USD 789,353 789,353 789,353 789,353 789,353 789,353 789,353
Steel Industry Financial Model
Other Actual Forecast Forecast Forecast Forecast Forecast Forecast

1.0 2.0 3.0 4.0 5.0 6.0

The Model is fully functional OK 1-Jan-19 1-Jan-20 1-Jan-21 1-Jan-22 1-Jan-23 1-Jan-24
Model Checks are OK 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21 31-Dec-22 31-Dec-23 31-Dec-24
4 . Long & Short Term Debt
4.1 Long Term Debt 1
Interest Rate % 5.0%
Loan Balance (B/f) USD 138,671,265
Maturity Years 30

4.2 Long Term Debt 2

Interest Rate % 4.0%
Loan Balance (B/f) USD 59,128,516
Maturity Years 30

4.3 Short Term Debt

Interest Rate % 6.00%
4.4 Other Liabilities
Other Liabilities USD 196,389 196,389 196,389 196,389 196,389 196,389 196,389

5 . Share Capital and Retained Earnings

Share Capital USD 75,000,000
Retained Earnings (B/f) USD (295,272.73)

Dividend Distribution % 10.0 %

End of Sheet
Steel Industry Financial Model
Calcs Actual Forecast Forecast Forecast Forecast Forecast Forecast

1.0 2.0 3.0 4.0 5.0 6.0

The Model is fully functional OK 1-Jan-19 1-Jan-20 1-Jan-21 1-Jan-22 1-Jan-23 1-Jan-24
Model Checks are OK 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21 31-Dec-22 31-Dec-23 31-Dec-24

1 . Macroeconomic and Tax Assumptions

1.1 Tax Assumptions
Tax Rate % 26.00% 26.00% 26.00% 26.00% 26.00% 26.00% 26.00%

2 . Balance Sheet Calculations

2.1 Depreciation
Investment % / Years 3% 40

2.2 Existing Non Current Assets

2.2.1
Net Book Value of Existing Assets
Net Book
Acquisition Cost
Value
Investment USD 300,000,000 150,000,000
2.2.2
Depreciation of Existing Assets
Historical
Depreciation
Investment USD 7,500,000 7,500,000 7,500,000 7,500,000 7,500,000 7,500,000
Depreciation of Existing Assets USD 7,500,000 7,500,000 7,500,000 7,500,000 7,500,000 7,500,000

2.2.3
Net Book Value of Existing Assets
Historical Net
Book Value
Investment USD 150,000,000 142,500,000 135,000,000 127,500,000 120,000,000 112,500,000 105,000,000
Net Book Value of Existing Assets USD 150,000,000 142,500,000 135,000,000 127,500,000 120,000,000 112,500,000 105,000,000
2.3 Capital Expenditures
Investment USD 43,077,048 7,037,843 7,134,383 7,120,267 7,248,269 7,288,517 7,247,769

% Depreciation Useful Life

Depreciation of Period % / Years 3% 40
175,946 178,360 178,007 181,207 182,213 181,194

Cumulative Depreciation of Capex USD 43,077,048 175,946 354,306 532,312 713,519 895,732 1,076,926
Check OK

2.4 Summary Non Current Assets

Net Book Value of Existing Assets USD 150,000,000 142,500,000 135,000,000 127,500,000 120,000,000 112,500,000 105,000,000
Amortization of Existing Assets USD 0 7,500,000 7,500,000 7,500,000 7,500,000 7,500,000 7,500,000

Capital Expenditures (Capex) USD - 7,037,843 7,134,383 7,120,267 7,248,269 7,288,517 7,247,769
Capex Depreciation USD - 175,946 354,306 532,312 713,519 895,732 1,076,926
Net Book Value of Capex USD - 6,861,897 13,641,975 20,229,930 26,764,679 33,157,464 39,328,307

Net Book Value of Non Current Assets USD 150,000,000 149,361,897 148,641,975 147,729,930 146,764,679 145,657,464 144,328,307
Depreciation USD - 7,675,946 7,854,306 8,032,312 8,213,519 8,395,732 8,576,926
Steel Industry Financial Model
Calcs Actual Forecast Forecast Forecast Forecast Forecast Forecast

1.0 2.0 3.0 4.0 5.0 6.0

The Model is fully functional OK 1-Jan-19 1-Jan-20 1-Jan-21 1-Jan-22 1-Jan-23 1-Jan-24
Model Checks are OK 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21 31-Dec-22 31-Dec-23 31-Dec-24
3 . Working Capital
3.1 Working Capital Drivers
Revenues USD 351,892,160 356,719,160 356,013,360 362,413,440 364,425,840 362,388,440
Costs USD 312,294,101 313,251,601 313,481,101 315,084,101 316,063,101 316,145,101
Capital Expenditures (Capex) USD 7,037,843 7,134,383 7,120,267 7,248,269 7,288,517 7,247,769

3.2 Inventory
Days Inventory Outstanding Days 100 100 100 100 100 100
Inventory USD 79,803,611 85,560,028 85,822,357 85,885,233 86,324,411 86,592,631 86,615,096

3.3 Trade Receivables

Days Sales Outstanding Days 120 120 120 120 120 120
Receivables USD 108,000,000 115,690,573 117,277,532 117,045,488 119,149,624 119,811,235 119,141,405

3.4 Other Non Current Assets

Other Non Current Assets USD 3,744,379 3,706,935 3,669,491 3,632,047 3,594,604 3,557,160 3,519,716

3.5 Trade Payables

Days Paybale Outstanding Days 90 90 90 90 90 90
Trade Payables USD 70,000,000 78,739,384 78,999,284 79,052,392 79,479,215 79,730,536 79,740,708

3.6 Other Payables

Other Payables USD 442,822 442,822 442,822 442,822 442,822 442,822 442,822

3.7 Other Current Payables

Other Current Payables USD 789,353 789,353 789,353 789,353 789,353 789,353 789,353

3.8 Working Capital Change

Working Capital USD 120,299,781 124,273,202 124,943,097 124,971,969 125,855,965 126,251,198 126,148,315
Working Capital Change USD 3,973,421 669,895 28,872 883,996 395,233 (102,883)

4 . Taxes
4.1 Income Tax
EBT USD 2,741,439 6,133,934 5,023,967 9,620,322 10,565,828 8,288,533
Tax Rate % 26% 26% 26% 26% 26% 26%
Income Taxes USD 712,774 1,594,823 1,306,231 2,501,284 2,747,115 2,155,019

4.2 Tax Payable

Assumption: Taxes recognized in current period but paid in the following fiscal period
Opening Tax Payable USD 16,033 712,774 1,594,823 1,306,231 2,501,284 2,747,115
Increase USD 0 712,774 1,594,823 1,306,231 2,501,284 2,747,115 2,155,019
Decrease USD 0 -16,033 -712,774 -1,594,823 -1,306,231 -2,501,284 -2,747,115
Tax Payable USD 16,033 712,774 1,594,823 1,306,231 2,501,284 2,747,115 2,155,019
Steel Industry Financial Model
Calcs Actual Forecast Forecast Forecast Forecast Forecast Forecast

1.0 2.0 3.0 4.0 5.0 6.0

The Model is fully functional OK 1-Jan-19 1-Jan-20 1-Jan-21 1-Jan-22 1-Jan-23 1-Jan-24
Model Checks are OK 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21 31-Dec-22 31-Dec-23 31-Dec-24
5 . Long Term Debt Obligations
5.1 Loans Information
Long Term Debt 1
Opening Balance USD 138,671,265 136,584,063 134,392,502 132,091,362 129,675,165 127,138,159
Capital Repayment USD 2,087,202 2,191,562 2,301,140 2,416,197 2,537,007 2,663,857
Closing Balance USD 138,671,265 136,584,063 134,392,502 132,091,362 129,675,165 127,138,159 124,474,302

Interest Rate % 5.00%

Maturity Years 30
Interest Rate USD 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
Interest Expenses USD 6,933,563 6,829,203 6,719,625 6,604,568 6,483,758 6,356,908

Long Term Debt 2

Opening Balance USD 59,128,516 58,074,249 56,977,811 55,837,515 54,651,608 53,418,264
Capital Repayment USD 1,054,267 1,096,438 1,140,296 1,185,907 1,233,344 1,282,677
Closing Balance USD 59,128,516 58,074,249 56,977,811 55,837,515 54,651,608 53,418,264 52,135,587
Interest Rate % 4.00%
Maturity Years 30
Interest Rate USD 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%
Interest Expenses USD 2,365,141 2,322,970 2,279,112 2,233,501 2,186,064 2,136,731

5.2 Total Long Term Debt Liability

Closing Balance USD 197,799,781 194,658,312 191,370,313 187,928,877 184,326,773 180,556,423 176,609,889

5.3 Total Long Term Interest Costs

Total Long Term Interest Costs USD 9,298,704 9,152,173 8,998,738 8,838,069 8,669,823 8,493,639

6 . Short Term Debt

6.1 Short Term Debt Interest Rate
Interest Rate USD 6.0% 6.0% 6.0% 6.0% 6.0% 6.0%

6.2 Short Term Debt Control Account

Short Term Debt (Paste) USD - 4,050,989 3,203,761 2,824,581 640,561 - -

6.3 Short Term Interest Expense

Short Term Interest Expense USD - 243,059 192,226 169,475 38,434 -
Steel Industry Financial Model
Calcs Actual Forecast Forecast Forecast Forecast Forecast Forecast

1.0 2.0 3.0 4.0 5.0 6.0

The Model is fully functional OK 1-Jan-19 1-Jan-20 1-Jan-21 1-Jan-22 1-Jan-23 1-Jan-24
Model Checks are OK 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21 31-Dec-22 31-Dec-23 31-Dec-24
7 . Equity
7.1 Share Capital
Share Capital USD 75,000,000 75,000,000 75,000,000 75,000,000 75,000,000 75,000,000 75,000,000

7.2 Retained Earnings

Opening Retained Earnings USD -1,000,000 1,028,665 5,113,864 8,051,307 13,756,177 19,417,401
Net Income USD 2,028,665 4,539,111 3,717,736 7,119,038 7,818,713 6,133,514
Dividends USD 0 -453,911 -780,294 -1,414,168 -2,157,489 -2,555,091
Retained Earnings USD -1,000,000 1,028,665 5,113,864 8,051,307 13,756,177 19,417,401 22,995,823

7.3 Dividends
Opening Retained Earnings USD -1,000,000 1,028,665 5,113,864 8,051,307 13,756,177 19,417,401
Net Income USD 2,028,665 4,539,111 3,717,736 7,119,038 7,818,713 6,133,514
Profits Available for Dividends USD 1,028,665 5,567,776 8,831,600 15,170,345 21,574,890 25,550,915
Cash Before Dividend Distribution USD (397,134) 453,911 780,294 1,414,168 4,119,784 3,619,020

Dividend Distribution % 10%

Dividend Payment USD - 453,911 780,294 1,414,168 2,157,489 2,555,091
Dividend Payment - Helper USD 102,866 556,778 883,160 1,517,034 2,157,489 2,555,091

8 . Cash Balance
8.1 Minimum Cash Balance
Minimum Cash Balance Balance USD 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000

8.2 Cash Balance

Opening Cash Balance USD 1,500,000 1,102,866 1,102,866 1,102,866 1,102,866 3,065,162
Cash Inflow / Outflow USD (397,134) (0) 0 0 1,962,295 1,063,929
Cash Balance USD 1,500,000 1,102,866 1,102,866 1,102,866 1,102,866 3,065,162 4,129,091

8.3 Interest Income

Average Cash Deposit Rate % 0.80% 0.80% 0.80% 0.80% 0.80% 0.80%

Interest Income USD 12,000 8,823 8,823 8,823 8,823 24,521

End of Sheet
Steel Industry Financial Model
WACC
The Model is fully functional
Model Checks are OK

1. Weighted Average Cost of Capital

Cost of equity calculation Cost of debt calculation
Risk-free rate 2.2% Cost of Debt 4.7%
Selected asset beta 1.50 Country-specific adjustment 0.0%
Equity market risk premium (e) 5.5% Expected income tax rate 26%

Country specific risk premium 5.0%

Cost of equity capital 15.4% After-tax cost of debt 3.5%
Equity (Weight) 20.0% Debt (Weight) 80.0%

WACC (Rounded) 5.9%

End of Sheet
Steel Industry Financial Model
Statements Actual Forecast Forecast Forecast Forecast Forecast Forecast

1.0 2.0 3.0 4.0 5.0 6.0

The Model is fully functional OK 1-Jan-19 1-Jan-20 1-Jan-21 1-Jan-22 1-Jan-23 1-Jan-24
Model Checks are OK 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21 31-Dec-22 31-Dec-23 31-Dec-24

1 . Income Statement
Production Tns 649,728 649,728 649,728 649,728 649,728 649,728

Local Market USD 161,720,000 177,892,000 171,423,200 192,504,000 195,712,400 195,993,000

Regional Market USD 54,000,000 60,750,000 67,500,000 79,800,000 93,100,000 92,750,000
SPOT Market USD 136,172,160 118,077,160 117,090,160 90,109,440 75,613,440 73,645,440
Revenues USD 351,892,160 356,719,160 356,013,360 362,413,440 364,425,840 362,388,440
Price per Ton USD / Ton 542 549 548 558 561 558
Sales Growth Rate % 1% 0% 2% 1% -1%
Transportation Costs USD 11,948,640 12,906,140 13,135,640 14,738,640 15,717,640 15,799,640
Transportation per Ton USD / Ton 18 20 20 23 24 24
Scrap Cost USD 250,722,485 250,722,485 250,722,485 250,722,485 250,722,485 250,722,485
Scrap Cost per Ton USD / Ton 386 386 386 386 386 386

Variable Costs USD 49,622,976 49,622,976 49,622,976 49,622,976 49,622,976 49,622,976

Variable Costs per Ton USD / Ton 76 76 76 76 76 76
Contribution Margin USD 39,598,059 43,467,559 42,532,259 47,329,339 48,362,739 46,243,339
Contribution Margin per Ton USD / Ton 61 67 65 73 74 71
Total Production Overheads USD 14,237,970 14,380,350 14,524,153 14,669,395 14,816,089 14,964,250
Overheads per Ton USD / Ton 22 22 22 23 23 23
Gross Profit USD 25,360,089 29,087,209 28,008,105 32,659,944 33,546,650 31,279,089
Gross Profit per Ton USD / Ton 39 45 43 50 52 48
Sales, General & Administrative Expenses USD 2,222,000 2,244,220 2,266,662 2,289,329 2,312,222 2,335,344
Management & Headquarters USD 3,434,000 3,468,340 3,503,023 3,538,054 3,573,434 3,609,169
Administrative Expenses USD 5,656,000 5,712,560 5,769,686 5,827,382 5,885,656 5,944,513
EBITDA USD 19,704,089 23,374,649 22,238,420 26,832,561 27,660,994 25,334,576
EBITDA Margin % 6% 7% 6% 7% 8% 7%
EBITDA per Ton USD / Ton 30 36 34 41 43 39
Depreciation USD 7,675,946 7,854,306 8,032,312 8,213,519 8,395,732 8,576,926

EBIT USD 12,028,143 15,520,343 14,206,107 18,619,042 19,265,262 16,757,650

EBIT Margin % 3% 4% 4% 5% 5% 5%
EBIT per Ton USD / Ton 19 24 22 29 30 26

Total Long Term Interest Costs USD 9,298,704 9,152,173 8,998,738 8,838,069 8,669,823 8,493,639
Short Term Interest Expense USD 0 243,059 192,226 169,475 38,434 0
Interest Income USD 12,000 8,823 8,823 8,823 8,823 24,521

EBT USD 2,741,439 6,133,934 5,023,967 9,620,322 10,565,828 8,288,533

EBT Margin % 1% 2% 1% 3% 3% 2%

Income Taxes USD 712,774 1,594,823 1,306,231 2,501,284 2,747,115 2,155,019

Net Income USD 2,028,665 4,539,111 3,717,736 7,119,038 7,818,713 6,133,514

Net Income Margin % 1% 1% 1% 2% 2% 2%

Retained Earnings b/f USD -1,000,000 1,028,665 5,113,864 8,051,307 13,756,177 19,417,401
Net Income USD 2,028,665 4,539,111 3,717,736 7,119,038 7,818,713 6,133,514
Dividends USD 0 -453,911 -780,294 -1,414,168 -2,157,489 -2,555,091
Retained Earnings USD -1,000,000 1,028,665 5,113,864 8,051,307 13,756,177 19,417,401 22,995,823

Profit & Loss Check OK OK OK OK OK OK OK

Steel Industry Financial Model
Statements Actual Forecast Forecast Forecast Forecast Forecast Forecast

1.0 2.0 3.0 4.0 5.0 6.0

The Model is fully functional OK 1-Jan-19 1-Jan-20 1-Jan-21 1-Jan-22 1-Jan-23 1-Jan-24
Model Checks are OK 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21 31-Dec-22 31-Dec-23 31-Dec-24
2 . Balance Sheet

Net Book Value of Non Current Assets USD 150,000,000 149,361,897 148,641,975 147,729,930 146,764,679 145,657,464 144,328,307
Net Book Value of Non Current Assets USD 150,000,000 149,361,897 148,641,975 147,729,930 146,764,679 145,657,464 144,328,307
Cash Balance USD 1,500,000 1,102,866 1,102,866 1,102,866 1,102,866 3,065,162 4,129,091
Inventory USD 79,803,611 85,560,028 85,822,357 85,885,233 86,324,411 86,592,631 86,615,096
Receivables USD 108,000,000 115,690,573 117,277,532 117,045,488 119,149,624 119,811,235 119,141,405
Other Non Current Assets USD 3,744,379 3,706,935 3,669,491 3,632,047 3,594,604 3,557,160 3,519,716
Current Assets USD 193,047,990 206,060,402 207,872,246 207,665,635 210,171,505 213,026,187 213,405,308
Current Ratio x 2.71 2.55 2.54 2.55 2.53 2.54 2.57
Quick Ratio x 0.02 0.01 0.01 0.01 0.01 0.04 0.05

Total Assets USD 343,047,990 355,422,299 356,514,221 355,395,565 356,936,185 358,683,651 357,733,614

Return on Assets x 0% 1% 1% 1% 2% 2% 2%

Long Term Debt USD 197,799,781 194,658,312 191,370,313 187,928,877 184,326,773 180,556,423 176,609,889
Short Term Debt USD 0 4,050,989 3,203,761 2,824,581 640,561 0 0
Total Debt Obligations USD 197,799,781 198,709,301 194,574,074 190,753,459 184,967,334 180,556,423 176,609,889
Debt to Equity Ratio % 267% 261% 243% 230% 208% 191% 180%

Trade Payables USD 70,000,000 78,739,384 78,999,284 79,052,392 79,479,215 79,730,536 79,740,708
Other Payables USD 442,822 442,822 442,822 442,822 442,822 442,822 442,822
Tax Payable USD 16,033 712,774 1,594,823 1,306,231 2,501,284 2,747,115 2,155,019
Other Current Payables USD 789,353 789,353 789,353 789,353 789,353 789,353 789,353
Total Current Liabilities USD 71,248,209 80,684,333 81,826,282 81,590,799 83,212,674 83,709,827 83,127,902

Total Liabilities USD 269,047,990 279,393,635 276,400,356 272,344,258 268,180,008 264,266,250 259,737,791

Share Capital USD 75,000,000 75,000,000 75,000,000 75,000,000 75,000,000 75,000,000 75,000,000
Retained Earnings USD -1,000,000 1,028,665 5,113,864 8,051,307 13,756,177 19,417,401 22,995,823
Total Equity USD 74,000,000 76,028,665 80,113,864 83,051,307 88,756,177 94,417,401 97,995,823

Return on Equity % 0% 3% 6% 4% 8% 8% 6%

Total Liabilities and Equity USD 343,047,990 355,422,299 356,514,221 355,395,565 356,936,185 358,683,651 357,733,614

Balance Sheet Check OK OK OK OK OK OK OK OK

- - - - - - -
Steel Industry Financial Model
Statements Actual Forecast Forecast Forecast Forecast Forecast Forecast

1.0 2.0 3.0 4.0 5.0 6.0

The Model is fully functional OK 1-Jan-19 1-Jan-20 1-Jan-21 1-Jan-22 1-Jan-23 1-Jan-24
Model Checks are OK 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21 31-Dec-22 31-Dec-23 31-Dec-24
3 . Cash Flow Statement

EBIT USD 12,028,143 15,520,343 14,206,107 18,619,042 19,265,262 16,757,650

Income Taxes USD -712,774 -1,594,823 -1,306,231 -2,501,284 -2,747,115 -2,155,019
Depreciation USD 7,675,946 7,854,306 8,032,312 8,213,519 8,395,732 8,576,926
Gross Operating Cash Flow USD 18,991,315 21,779,826 20,932,188 24,331,278 24,913,878 23,179,558
(Increase) / Decrease in Receivables USD (7,690,573) (1,586,959) 232,044 (2,104,136) (661,611) 669,830
(Increase) / Decrease in Other Assets USD 37,444 37,444 37,444 37,444 37,444 37,444
(Increase) / Decrease in Inventory USD (5,756,417) (262,329) (62,877) (439,178) (268,219) (22,466)
Increase / (Decrease) in Payables USD 8,739,384 259,900 53,108 426,822 251,321 10,172
Increase / (Decrease) in Other Payables USD 696,741 882,049 (288,591) 1,195,052 245,832 (592,097)
Cash Flow from Operations USD 15,017,893 21,109,931 20,903,316 23,447,282 24,518,645 23,282,441

Capital Expenditures USD (7,037,843) (7,134,383) (7,120,267) (7,248,269) (7,288,517) (7,247,769)

Cash Flow from Investment USD (7,037,843) (7,134,383) (7,120,267) (7,248,269) (7,288,517) (7,247,769)

Share Capital Increase / (Decrease) USD - - - - - -

Long Term Debt Increase / (Decrease) USD (3,141,469) (3,288,000) (3,441,435) (3,602,104) (3,770,350) (3,946,534)
Short Term Debt Increase / (Decrease) USD 4,050,989 (847,228) (379,180) (2,184,021) (640,561) -
Net Interest Cost USD (9,286,704) (9,386,410) (9,182,140) (8,998,721) (8,699,433) (8,469,117)
Dividen Payments USD 0 -453,911 -780,294 -1,414,168 -2,157,489 -2,555,091
Cash flow from Financing USD (8,377,184) (13,975,548) (13,783,049) (16,199,013) (15,267,833) (14,970,743)

Opening Cash Balance USD 1,500,000 1,102,866 1,102,866 1,102,866 1,102,866 3,065,162
Cash Inflow / (Outflow) USD (397,134) - - - 1,962,295 1,063,929
Cash Balance USD 1,102,866 1,102,866 1,102,866 1,102,866 3,065,162 4,129,091

Cash Flow Check OK OK OK OK OK OK OK

End of Sheet
Steel Industry Financial Model
Valuation Forecast Forecast Forecast Forecast Forecast Forecast Perpetuity
1.0 2.0 3.0 4.0 5.0 6.0
The Model is fully functional OK 1-Jan-19 1-Jan-20 1-Jan-21 1-Jan-22 1-Jan-23 1-Jan-24
Model Checks are OK 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21 31-Dec-22 31-Dec-23 31-Dec-24
2018 2019 2020 2021 2022 2023 2024
1 . Free Cash Flow to the Firm
Selection of Discounting Period 2
End of Year Months 12 24 36 48 60 72 72
Mid Year Months 6 18 30 42 54 66 66
Valuation Date 31-Dec-18
WACC 5.90%
Growth Rate to Perpetuity (GRP) 0.5%
Revenues USD 351,892,160 356,719,160 356,013,360 362,413,440 364,425,840 362,388,440 364,200,382
Working Capital USD 120,299,781 124,273,202 124,943,097 124,971,969 125,855,965 126,251,198 126,148,315 127,242,987
EBITDA USD 19,704,089 23,374,649 22,238,420 26,832,561 27,660,994 25,334,576 24,512,995
EBITDA Margin USD 6% 7% 6% 7% 8% 7% 6.7%
EBIT USD 12,028,143 15,520,343 14,206,107 18,619,042 19,265,262 16,757,650 16,272,187
EBIT Margin USD 3% 4% 4% 5% 5% 5% 4.5%
Less: Tax on EBIT USD (3,127,317) (4,035,289) (3,693,588) (4,840,951) (5,008,968) (4,356,989) (4,230,768)
Add Depreciation USD 7,675,946 7,854,306 8,032,312 8,213,519 8,395,732 8,576,926 8,240,808
Depreciation to Sales Ratio USD 2.2% 2.2% 2.3% 2.3% 2.3% 2.4% 2.3%
Capex USD -7,037,843 -7,134,383 -7,120,267 -7,248,269 -7,288,517 -7,247,769 (7,284,008)
Capex to Sales Ratio USD 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Less Δ in Working Capital USD (3,973,421) (669,895) (28,872) (883,996) (395,233) 102,883 (1,094,672)
Working Capital to Sales Ratio USD 35.3% 35.0% 35.1% 34.7% 34.6% 34.8% 34.9%
Free Cash Flow to the Firm USD 5,565,507 11,535,082 11,395,693 13,859,346 14,968,276 13,832,701 11,903,547
Cash Flow from Perpetuity USD 220,436,060

Discount Factor USD 97.2% 91.8% 86.6% 81.8% 77.3% 73.0% 73.0%
Present Value USD 5,408,250 10,584,656 9,874,175 11,339,839 11,564,849 10,092,046 160,825,481

Enterprise Value USD 219,689,295

Less Debt USD (197,799,781)
Plus Cash USD 1,500,000 Sensitivity Analysis
Equity Value USD 23,389,514 23,389,514 5.65% 5.9% 6.15%
WACC 2,500.00% - 26,172,391 16,788,700 8,165,936
0.5% 33,855,393 23,389,514 13,845,734
GRP 5,000.00% 1.00% 43,190,654 31,337,432 20,628,406
Minimum Central Maximum
8,165,936 23,389,514 43,190,654
End of Sheet
Steel Industry Financial Model
Graphs

The Model is fully functional

Model Checks are OK
* Graphs in USD mil. unless otherwise stated

Enterprise Value / Equity Value Free Cash Flows to the Firm Price Build Up (USD / Ton) - 5 Yr Average
Scrap Cost 386
219.69 Transportation 22
Variable Costs 76
Overheads 22
Gross Profit 46
USD mil.

USD mil.
Price 553
14 15 14
12 11

23.39 6

Enterprise Value Equity Value 2019 2020 2021 2022 2023 2024

Operating Costs Breakdown Profitability Margins (%)

Administrative Expenses 13% 13% 13%
12% 12%
2%
Total Production Overheads 11%
4% Transportation Costs
4% 9%
9% 9%
8% 8%
7% 7.4% 7.6%
Variable Costs… 7.0%
6.6% 6.2%
5.6% 5.3%
5.1%
4.4% 4.6%
4.0%
3.4%
2.0% 2.1%
1.7%
1.3% 1.0%
Scrap Cost 0.6%
75%

2019 2020 2021 2022 2023 2024

Contribution Margin Gross Margin EBITDA Margin EBIT Margin Net Income Margin

Working Capital & Working Capital to Sales (%) Debt Evolution & Net Debt to EBITDA Ratio
205.00 10.03 11.00
126.50 35.3% 35.0% 35.1% 34.7% 34.6% 34.8% 40%
8.28 8.53
126.00 35% 200.00 9.00
6.85 6.42 6.81
30% 195.00 199 7.00
125.50
195
25% 190.00 5.00
USD MIL.

USD mil.
125.00 191
20% 185.00 3.00
124.50 126 126
126 185
15% 180.00 1.00
124.00 125 181
125 10% 175.00 -1.00
124 177
123.50 5% 170.00 -3.00
123.00 0% 165.00 -5.00
2019 2020 2021 2022 2023 2024 2019 2020 2021 2022 2023 2024
Working Capital Working Capital to Sales Ratio Total Debt Net Debt to EBITDA
Steel Industry Financial Model
Graphs

The Model is fully functional

Model Checks are OK
* Graphs in USD mil. unless otherwise stated

Return on Assets & Return on Equity Debt on Equity & Cost of Debt (%)

8% 8% 261%
243% 230%
6% 208%
6% 191% 180%
4%

3%
0.6% 1.3% 1.0% 2.0% 2.2% 1.7% 5% 5% 5% 5% 5% 5%

2019 2020 2021 2022 2023 2024 2019 2020 2021 2022 2023 2024

ROA Return on Equity Debt to Equity Cost of Debt

Capex & Capex to Sales (%) Profitability Margins (in USD Millions)
2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
47 48 46
43 43
40
33 34 31
USD MIL.

29 28 27 28
25 23 25
22
20 19 19
16 17
12 14
7 8 6
-7.04 -7.13 -7.12 5 4
-7.25 -7.29 -7.25 2

2019 2020 2021 2022 2023 2024

2019 2020 2021 2022 2023 2024
Capex Capex to Sales Ratio Contribution Margin Gross Profit EBITDA EBIT Net Income

Operating Cash Flows over Sales Cash Evolution (in USD mil.)

5.9% 5.9% 6.5% 6.7% 6.4% 4.13

4.3% 3.07

1.10 1.10 1.10 1.10

2019 2020 2021 2022 2023 2024
2019 2020 2021 2022 2023 2024
Net CFO to Sales Cash and Cash Equivalents

End of Sheet
Steel Industry Financial Model
Checks

The Model is fully functional

Model Checks are OK

1 . Model Completion Alert

Is the model complete? Option Yes
Has the Model been tested? Option Yes
The Model is fully functional
2 . Checks
Profit & Loss Check OK
Balance Sheet Check OK
Cash Flow Check OK
Capacity Check Check OK
Support Sheets Check OK
Overall Model Checks are OK
End of Sheet