Outokumpu Oyj · OMXHEX:OUT1V
Outokumpu Oyj — Investor Day (May 2013)
34 slides from Outokumpu Oyj's investor day presentation, May 23, 2013
Slide 1: Stainless Coil Americas BA
Stainless Coil Americas BA Outokumpu Experience Kari Parvento 2013 Mick Wallis Stainless Coil Americas BA May 22-23, 2013 Outokumpu Old Billingsgate, London, UK
Slide 2: Outline
Outline 1. Americas stainless steel market 2. Outokumpu Coil Americas introduction 3. Calvert mill ramp-up 4. Americas market development 5. Summary Stainless Coil Americas BA, Kari Parvento/Mick Wallis 5/23/2013 2
Slide 3: Americas stainless steel market overview
Americas stainless steel market overview Americas accounts for 11% of global World 2013 GDP Growth Forecast stainless steel market (2013) 21 % EMEA Americas 11 % APAC 68 % 1) Source: SMR April 2013 Stainless Coil Americas BA, Kari Parvento/Mick Wallis 5/23/2013 3
Slide 4: US macroeconomic drivers – solid outlook for 2013
US macroeconomic drivers – solid outlook for 2013 U.S. Gross Domestic Product (Mar. ‘13) U.S. Industrial Production Index (Mar. ‘13) 10,0 110 Mar. 8,0 Q1 99.48 6,0 2.5% 100 4,0 2,0 90 0,0 -2,0 80 -4,0 70 -6,0 -8,0 60 -10,0 1995 Q1 1995 Q4 1996 Q3 1997 Q2 1998 Q1 1998 Q4 1999 Q3 2000 Q2 2001 Q1 2001
Slide 5: Americas stainless steel market overview
Americas stainless steel market overview Americas stainless steel consumption is Americas stainless steel market by country 1) expected to grow by 3% CAGR in 2013-2016 2) 1,000 tonnes 1%3% 4000 3800 11 % 3600 US 3400 Canada 8% 3200 Mexico 3000 8% Brazil 2800 69 % Argentina 2600 Others 2400 2200 2000
Slide 6: Applications for Coil Americas’ Stainless Steel
Applications for Coil Americas’ Stainless Steel Architecture Sinks Cooking Equipment CERAN Hot Plate Aviation Astronautics Plant Construction Automotive Freshwater Extraction Medicine Cutlery Offshore Kitchen Furniture White Goods Transportation Wall Cladding Wires Engines Stainless Coil Americas BA
Slide 7: Outline
Outline 1. Americas stainless steel market 2. Outokumpu Coil Americas introduction 3. Calvert mill ramp-up 4. Americas market development 5. Summary Stainless Coil Americas BA, Kari Parvento/Mick Wallis 5/23/2013 7
Slide 8: Americas accounts for 15% of group volumes and 10% of group sales
Americas accounts for 15% of group volumes and 10% of group sales Q1 2013 External sales by BA 1) Q1 2013 External deliveries by BA 1,2) Group sales EUR 2.2 billion Group deliveries 703,000 tonnes Americas EMEA 48% Americas 10% EMEA 55% Americas 15% APAC 10% HPSA 33% APAC 12% HPSA 18% 1) Split by BA
Slide 9: Stainless Coil Americas operations
Stainless Coil Americas operations Calvert, USA Sales, Chicago San Luis Potosí, Mexico Fully integrated mill with 900.000 hot band and 350.000 cold rolling Sales, capacity Sao Paulo Service center, Buenos Aires, Argentina Cold rolling mill with capacity of 270.000 tonnes Stainless Coil Americas BA,
Slide 10: Coil Americas financial highlights
Coil Americas financial highlights • Q1 2013 stainless steel deliveries from our NAFTA operations grew EUR million Q1/13 Q4/12 FY2012 comparable comparable by 2.000t to 101.000t compared to Q4 2012 Stainless steel 102 105 400 deliveries1) • Total coil deliveries from Outokumpu to customers in Sales
Slide 11: Coil Americas strategic priorities
Coil Americas strategic priorities Perfor- Calvert mill ramp-up + Market development = mance Materials Product Integrated Leverage Full ramp-up Melt shop Cold rolled Leverage South flow portfolio ramp-up ramp-up Mexinox market customer America and market optimization expansion approach base presence
Slide 12: Outline
Outline 1. Americas stainless steel market 2. Outokumpu Coil Americas introduction 3. Calvert mill ramp-up 4. Americas market development 5. Summary Stainless Coil Americas BA, Kari Parvento/Mick Wallis 5/23/2013 12
Slide 13: Calvert ramp-up in key role in materials flow simplification: 2012-H1 2013
Calvert ramp-up in key role in materials flow simplification: 2012-H1 2013 – imports from Europe Americas Coil material flow H1 2013 • Hot band deliveries from Europe to Mexinox and Calvert cold rolling mills • High working capital • Long lead times • Lack of flexibility Avesta • Negative impact on
Slide 14: Calvert ramp-up in key role in materials flow simplification: H2 2013 onwards
Calvert ramp-up in key role in materials flow simplification: H2 2013 onwards – “made in America” Americas Coil material flow H2 2013 • Calvert melt shop to supply hot band to Calvert and Mexinox cold rolling mills • Improved working capital management • Improved delivery reliability • Better custom
Slide 15: Expanded product portfolio through Calvert ramp-up
Expanded product portfolio through Calvert ramp-up 2010 NAFTA production portfolio (Mexinox) 2013 NAFTA production portfolio (Mexinox + Calvert) Stainless steel grades Stainless steel grades 300 Sheet 300 Coil 409 430 300 Sheet 300 Coil 409 430 Slabs Slabs Hot-rolled Hot-rolled black strip black str
Slide 16: The Only 72” Wide NAFTA Producer
The Only 72” Wide NAFTA Producer The only 72“ wide manufacturer in NAFTA • Cost effective version of 36” wide • Immediate process improvement for material applications • Significant handling, welding cost, and time advantages • Replacement of imported material • Completion of Outokumpu Americas broa
Slide 17: Calvert mill
• 1,500 hectares, 567 hectares footprint • 39 kilometers of roads Calvert mill • • Nearly 100,000 tons of steel erected – equivalent to 10 Eiffel Towers Over 6,500 construction workers on site during peak times Finishing Hot Annealing Line Connection Bay Carbon Hot Strip Mill Cold Annealing Line Sla
Slide 18: Calvert - fully integrated state of the art mill
Calvert - fully integrated state of the art mill Calvert mill strengths • Latest production technology and equipment • Full product range • High quality • High efficiency • Unique 72’ inch coil capability • Efficient logistics • Low energy costs • Good availability of scrap and other raw materials S
Slide 19: Melt Shop
Melt Shop First melt occurred November 16, 2012 • Melt shop ramp-up proceeding ahead of plan • Broad range of steel grades produced with high quality • Melt Shop product for Calvert fully qualified • Hot band deliveries to Mexinox to ramp-up in H2 2013 • Further broadening of steel grades planned fo
Slide 20: 72“ Capability Fully Established
72“ Capability Fully Established • First 72” coil produced in 2011 • 72” product cast, hot rolled and cold rolled at Calvert • Casting 72” material from melt shop since Q1 ‘13 20 Stainless Coil Americas BA, Kari Parvento/Mick Wallis 5/23/2013 20
Slide 21: Calvert ramp-up - improved profitability through higher volumes
Calvert ramp-up - improved profitability through higher volumes and capacity utilization Calvert delivery volumes 2011 - 2013 150 000 Hot band to Mexinox Cold Rolled to customers Calvert capacities (annual): 100 000 • Melt shop 900.000 t • Hot rolling 870.000t Tonnes • Cold rolling 350.000 t 50 000
Slide 22: Outline
Outline 1. Americas stainless steel market 2. Coil Americas introduction 3. Calvert mill ramp-up 4. Americas market development 5. Summary Stainless Coil Americas BA, Kari Parvento/Mick Wallis 5/23/2013 22
Slide 23: Coil Americas strategic priorities
Coil Americas strategic priorities Perfor- Calvert mill ramp-up + Market development = mance Product Working Integrated Leverage Full ramp-up Melt shop Delivery Leverage South ramp-up reliability portfolio Capital Mexinox market customer America and market expansion management approach base presence
Slide 24: Outokumpu Mexinox
Outokumpu Mexinox • Cold rolling capacity of 270.000 tonnes annually • Founded in 1976 – 37 year cumulative know-how in stainless steel • Excellent reputation – highly respected both in the US and in Mexico • Focus on ferritic, tailored material solutions • Close collaboration with end-customers Sta
Slide 25: Coil Americas market approach – dedicated teams for key customer segments
Coil Americas market approach – dedicated teams for all of the key customers segments Americas stainless steel channel structure Americas stainless steel market by segment (2012) Heavy Service industries Centers 62% 15 % Consumer Tubes and goods & Metal Medical processing 35 % 9% Chemical, petrochem
Slide 26: Integrated market approach
Integrated market approach One stop shop for customers Market Automotive Mill Direct Pipe & Tube Sales Coil Americas Service Center Conversion Cold Rolling Mills Mexinox Calvert Stainless Melt Shop Calvert Melt Shop Stainless Coil Americas BA, Kari Parvento/Mick Wallis 5/23/2013 26
Slide 27: Leveraging existing strong customer base to expand market share
Leveraging existing strong customer base to expand market share • Made in USA • Full product range including unique position with 72” wide coil • Leverage the strong quality image of Outokumpu and Inoxum • New markets through local cold rolled and hot rolled offering to pipe & tube manufacturers • A
Slide 28: NAFTA cold rolled market size and Outokumpu market share outlook
NAFTA cold rolled market size and Outokumpu market share outlook 2 500 35% 30% 2 000 Annual volumes (1000 tonnes) 25% 1 500 20% 15% 1 000 10% 500 5% 0 0% 2007 2008 2009 2010 2011 2012 2013f 2014f 2015f NAFTA Outokumpu market share Source: AISI American Iron & Steel Institute and the US Department of
Slide 29: South-America: further long term potential
South-America: further long term potential • Lead from São Paulo, Brazil South America CR and HR consumption for 2013: 550 kt • Service center in Buenos Aires, Argentina Peru 3% Other • Outokumpu market share in South- America Colombia America: 10-12% 7% 9% • White goods consumption growing – Chile
Slide 30: Outline
Outline 1. Americas stainless steel market 2. Outokumpu Coil Americas introduction 3. Calvert mill ramp-up 4. Americas market development 5. Summary Stainless Coil Americas BA, Kari Parvento/Mick Wallis 5/23/2013 30
Slide 31: Coil Americas strategic priorities
Coil Americas strategic priorities Perfor- Calvert mill ramp-up + Market development = mance Materials Product Integrated Leverage Full ramp-up Melt shop Cold rolled Leverage South flow portfolio ramp-up ramp-up Mexinox market customer America and market optimization expansion approach base presence
Slide 32: BA Coil Americas Leadership Team
BA Coil Americas Leadership Team Kari Parvento President Stainless Coil Americas Mick Wallis SVP Outokumpu Stainless Michael Lutter NAFTA Region Head of Finance & Control Americas Stephan Lacor Head of Sales Americas Dave Scheid Jose Ramon Salas Head of HR & HSS President of Mexinox Americas Stainle
Slide 33: Summary
Summary • Outokumpu already has a strong market position in NAFTA today • Ramp-up of Calvert is expected to: • Further increase market share (long term target to reach 30% market share in NAFTA) • Create attractive EBIT and return on assets • Calvert ramp-up is progressing as planned • Clear custome
Slide 34: Q&A Outokumpu Experience
Q&A Outokumpu Experience 2013 May 22-23, 2013 Old Billingsgate, London, UK