Ati Inc. · NYSE:ATI
Ati — Allegheny Technologies — Investor Presentation (November 2007)
25 slides from Ati's investor presentation, Nov 13, 2007
Slide 1: Richard Harshman, EVP Finance and CFO, November 13, 2007
Richard Harshman Executive Vice President, Finance and Chief Financial Officer November 13, 2007
Slide 2: Forward-looking statements
This presentation contains forward-looking statements. Actual results may differ materially from results anticipated in the forward-looking statements. These and additional risk factors are described from time to time in the Company's filings with the Securities and Exchange Commission, including it
Slide 3: September 30, 2007 YTD Results
9 Months Sales $4.18 Billion Net Income $598 Million Segment Operating Profit $1.022 Billion Earnings Per Share $5.81 ATI September 30, 2007 YTD Results 9 Months 2007 Compared to Same Period Last Year: Sales 18% Higher Net Income 46% Higher Segment Operating Profit 34% Higher Earnings Per Share 45%
Slide 4: Return on Capital Employed and Cash on Hand
ATI September 30, 2007 YTD Results Return on Capital Employed of 34.9% Return on Stockholders' Equity of 45.8% Cash on Hand was $664 Million Dec. 31, 2003 Dec. 31, 2004 Dec. 31, 2005 Dec. 31, 2006 Sept. 30, 2007 East 80 251 363 502 664 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 Cash and Cash E
Slide 5: Continuing to Provide Value to Our Stockholders
$500 million share repurchase authorization 40% dividend increase Third consecutive year of significant increase $100 million voluntary pension contribution in Q4 2007 Maintains the plan's healthy funding position Cumulative voluntary contribution since 2004 = $350 million Continuing to Provide Valu
Slide 6: ATI's Specialty Metals Products
9 Mos. 2007 Titanium alloys and nickel-based/specialty alloys 45% Precision-Rolled and Engineered strip 12% Tungsten Materials 5% Grain-oriented silicon electrical and tool steel 5% Exotic alloys 4% Total high-value products 71% Stainless sheet 11% Specialty stainless sheet 10% Stainless plate 5% Ca
Slide 7: World Titanium Industry - All Markets
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Titanium Mill Shipments 155 156 139 157 179 146 151 189 219 234 264 288 303 305 335 339 385 408 423 Allvac Core Markets 114 130 140 164 181 187 188 207 209 252 274 288 Allvac 23 18 17 21 18 14 15 23 27 32
Slide 8: Industrial Titanium Market by Product
Industrial Titanium Market by Product 2005 2006 2007 2008 2009 2010 Sheet/Tube 48276 51675 57467 59191 61077 62796 Plate 28793 24440 25071 25824 26649 27398 Seamless Tube 5063 5594 5905 6081 6275 6451 Bar/Billet/Misc 12640 24738 25178 25934 26761 27515 000 Pounds Non-aerospace, Non-defense, Non-medi
Slide 9: Industrial Titanium Markets and Drivers
Industrial Titanium Markets and Drivers Chemical Processing, Oil & Gas Materials and Mining Marine Transportation Desalination Cooling with saltwater Global demand is solid Raw material is less volatile End-use markets and applications: Photo courtesy: Alfa Laval Plate frame heat exchanger
Slide 10: ATI Perspective on US Stainless Market
Q103 Q203 Q303 Q403 Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405 1/1/2006 2/1/2006 3/1/2006 4/1/2006 5/1/2006 6/1/2006 7/1/2006 8/1/2006 9/1/2006 10/1/2006 11/1/2006 12/1/2006 1/7/2007 2/7/2007 3/7/2007 4/7/2007 5/7/2007 6/7/2007 7/7/2007 8/7/2007 9/7/2007 10/7/2007 11/7/2007 12/7/2007 304/304L 0.1351 0.
Slide 11: ATI Global Diversified Markets (9 mos. 2007)
ATI Global Diversified Markets (9 mos. 2007) A&D CPI Electrical Medical Auto Appliance Construction Transportation Electronics Mahine Other East 30 25 13 3 7 5 4 4 3 2 4 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 CPI Oil & Gas 25% Electrical Energy 13% Machine and Cutting Tools 2% Automotive 7
Slide 12: Segment Sales and Operating Profit (9 mos. 2007)
Segment Sales and Operating Profit (9 mos. 2007) A&D CPI Electrical Medical Other East 73 11 6 5 5 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 High Performance Metals Sales: $1.56 Billion Operating Profit: $541.9 Million, or 34.8% of Sales Flat-Rolled Products Sales: $2.3 Billion Operating Prof
Slide 13: Aerospace & Defense 30% of YTD 2007 Sales
Aerospace & Defense 30% of YTD 2007 Sales A world leader in the production of premium titanium alloys, nickel- and cobalt- based alloys and superalloys, and vacuum-melted specialty alloys for commercial and military jet engines - OEM and spare parts Titanium alloys, vacuum-melted specialty alloys an
Slide 14: Global Fleet Development
Global Fleet Development 2006 2026 3rd Qtr 4th Qtr East 18200 7800 90 20.4 West 0 10400 34.6 31.6 North 0 18200 45 43.9 18,200 36,400 7,800 Retained Fleet 10,400 New Airplanes Replacing Old 18,200 New Airplanes for Growth 28,600 New Airplanes Market Forecast Source: The Boeing Company 2007 Current M
Slide 15: Aerospace & Defense Emerging Trends
Aerospace & Defense Emerging Trends Reduce processing time and waste in making parts New innovative alloys Rolling to near-net-shape More productive cutting tools ATI 425(r) Titanium Alloy Titanium Plate Custom Rolled Shapes High-Feed Cutter An innovative high-strength titanium cold-rollable alloy A
Slide 16: CPI/Oil & Gas 25% of YTD 2007 Sales
Chemical Process Industry Wide range of alloys and technical service to meet most corrosion environments Zirconium products for sulfuric, nitric, acetic, and formic acids and urea processing Oil & Gas Wide variety of corrosion resistant alloys for offshore and oil sands applications Stainless alloys
Slide 17: Electrical Energy 13% of 2007 YTD Sales
Electrical Energy 13% of 2007 YTD Sales Power Generation Leading supplier of alloys for coal, natural gas, and nuclear energy applications Producer of large castings for wind energy applications Pollution Control Leading supplier of a variety of corrosion resistant alloys for FGD scrubbers Power Dis
Slide 18: Electrical Energy Market Key Drivers
Industrialization of China, India, & Middle East Increasing demand in other developing nations Growing world population Global GDP Upgrade to US infrastructure Environmental concerns Electrical Energy Market World Electricity Demand Forecast (Source: Department of Energy, Energy Information Administ
Slide 19: Growth in Nuclear Energy
Source: NRC, Industry Sources, Nucleonics Week US: 27 Applications in the next two years Canada: 2 reactors planned, 6 proposed Asia: 27 reactors coming on-line by 2015 China: 30 reactors coming on-line by 2020 Russia: 26 reactors by 2016, 60 by 2027 India: 20 reactors by 2020, currently 7 under con
Slide 20: Medical 3% of YTD 2007 Sales
Medical 3% of YTD 2007 Sales Medical 3% of YTD 2007 Sales Medical 3% of YTD 2007 Sales Titanium alloys, cobalt-based alloys, and zirconinum-niobium alloys for implants, medical equipment, and surgical tools Nickel-titanium for arterial stents and catheter guide wire Niobium-titanium alloy for superc
Slide 21: Strategic Investments... So Far
Strategic Investments... So Far Albany, OR Albany, OR Rowley, UT Forging Capacity 2006 2007 2008 2009 Planned completion year Press forge Rotary forge Plate finishing expansion VAR/ESR 8 million lbs capacity Ti sponge 8 million lbs capacity Ti sponge 24 million lbs capacity Ti sponge start up 2008 S
Slide 22: Strategic Investments - Updates
Strategic Investments - Updates 6 million lbs capacity increase of Ti sponge bringing total Albany capacity to 22 million lbs Albany, OR 24 million lbs capacity Ti sponge start up 2008 Rowley, UT Artist rendering
Slide 23: Strategic Investments - Updates
Strategic Investments - Updates Forging capacity increase Bakers, NC Bakers, NC Annealing Furnace and Quench Foundations Leveler Pit and Foundation Washington, PA Specialty plate capacity increase
Slide 24: Summary
Demonstrated 4-year track record of profitable growth Diversified, technology-driven high-value products Well-positioned in global aerospace & defense and infrastructure markets Self-funded strategic capital investments Strong balance sheet $500 million share repurchase program Summary
Slide 25: Allegheny Technologies
Allegheny Technologies Building the World's Best Specialty Metals Company SSS November 2007 ES te
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