Outokumpu Oyj · OMXHEX:OUT1V
Outokumpu Oyj — Investor Day (May 2013)
27 slides from Outokumpu Oyj's investor day presentation, May 22, 2013
Slide 1: BA APAC: Capture the growth momentum in a competitive environment
BA APAC: Capture the growth momentum in a competitive environment Outokumpu Experience Austin Lu 2013 Stainless APAC Outokumpu May 22-23, 2013 Old Billingsgate, London, UK
Slide 2: Index
Index 1. APAC overview 2. Outokumpu APAC Strategy 3. Summary BA APAC: Capture the growth momentum, Austin Lu 5/22/2013 2
Slide 3: APAC overview
APAC overview • Asia as the fastest growing and Outokumpu presence in Asia biggest region in terms of stainless steel consumption. • Outokumpu and Shanghai Krupp Stainless (SKS) recognised quality brands in the region. • Accelerated demand growth for special products and services. • Cold rolling mil
Slide 4: APAC first quarter highlights
APAC first quarter highlights All in Euro million if not otherwise stated Q1 2013 Q4 2012 FY 2012 • Volume and sales growth of Stainless Steel 16% and 13% respectively in deliveries 85kt 73kt 306kt Q1 2013 compared to Q4 2012 Reported Deliveries 36kt 30kt 104kt • Vertical* EBITDA growth not Sales 18
Slide 5: Low market share provide room for growth
Low market share provide room for growth Market size 1) Million Tonnes China incl. Taiwan 12.0 3% India 2.8 1% South East Asia 1.2 2% 1% South Korea 2.1 3% 5% Japan 1.7 Australia 0.1 20% 1) Based on internal estimates and total stainless steel consumption. BA APAC: Capture the growth momentum, Austi
Slide 6: Healthy growth to continue in APAC
Healthy growth to continue in APAC +7% +19% +8% -3% +6% +4% +4% -1% +3% EMEA APAC AMERICAS +9% +4% +2% Orange = Change 2010-2011 TOTAL WORLD Green = Change 2011-2012 Blue = Forecast 2013 Data source: SMR, April 2013 Real demand for total stainless (rolled & forged, excl. 13Cr Tubes) BA APAC: Capture
Slide 7: Usage of stainless steel stimulated by global megatrends
Usage of stainless steel stimulated by global megatrends Global Megatrends Areas of Demand Population Growth Medical Engineering Water Demand Food Industry Urbanization Architecture Interior Fittings Escalators Mobility Public Transport Transport Automotive Climatic Change / Limited Resources Wind E
Slide 8: 2013 Market dynamics
2013 Market dynamics Tailwinds Headwinds • Stainless steel consumption is still • Overcapacity remains a concern growing. CAGR 6-7% between ‘11 –’16 • Competitors expand in APAC market • Continuous urbanization and industrialization in China and India drive • Growth has been slowing down in main gro
Slide 9: Competitiveness analysis
Competitiveness analysis Based on 2012 achievements 1) • Increased volumes (+14%) and improved reach to new customers (+6%) led to better profitability (+5% EBITDA) • Improved operations excellent safety record, reduced working capital and aged inventory. • Expanded sales force Advantages Disadvanta
Slide 10: Nickel Pig Iron Production – cost advantage for Chinese producers
Nickel Pig Iron Production – cost advantage for Chinese producers • Strong growth since 2005 for domestic stainless steel demand • Providing about 50% of Ni for major local producers • Vertical integration • Cost advantage BUT • Quality risk – impurities • Environmental concerns Data from Outokumpu
Slide 11: Index
Index 1. APAC overview 2. Outokumpu APAC Strategy 3. Summary BA APAC: Capture the growth momentum, Austin Lu 5/22/2013 11
Slide 12: Five Year Vision
Five Year Vision • Outokumpu is the market leader in specialties in APAC. • We will have doubled the revenue within five years with continuous growing profits: 15% CAGR (twice the market growth). BA APAC: Capture the growth momentum, Austin Lu 5/22/2013 12
Slide 13: APAC growth strategy
APAC growth strategy Profitable Growth Sales Force Effectiveness Differentiation Localization Operations Excellence BA APAC: Capture the growth momentum, Austin Lu 5/22/2013 13
Slide 14: Operational excellence
Operational excellence • Zero tolerance - safety, compliance and integrity • Develop leadership and talent • Extend production capability • Increase flexibility, speed and customer service • Grow regional supply chain management BA APAC: Capture the growth momentum, Austin Lu 5/22/2013 14
Slide 15: Differentiation
Differentiation • Grow with specialty focus • Develop customer applications with global expertise • Offering customer solutions and added value services BA APAC: Capture the growth momentum, Austin Lu 5/22/2013 15
Slide 16: HPS is market leader in special stainless steel grades
HPS is market leader in special stainless steel grades High Alloyed Duplex Heat Resistant Austenitic Duplex - High strength and HAA – high alloyed austenitic 253 MA® – Micro-alloyed heat corrosion resistance enabling stainless steels for safe and resistant grades for highly durable light weight cons
Slide 17: The Helix Bridge in Singapore
Stunning in The Helix Bridge in architectural Singapore and engineering design BA APAC: Capture the growth momentum, Austin Lu 5/22/2013 17
Slide 18: Stonecutters Bridge, Hong Kong
Stonecutters Bridge, Built to last for more than Hong Kong 300 years BA APAC: Capture the growth momentum, Austin Lu 5/22/2013 18
Slide 19: Developing partnerships with leading local energy companies
Developing partnerships with leading local energy companies BA APAC: Capture the growth momentum, Austin Lu 5/22/2013 19
Slide 20: Customized products for optimal customer satisfaction
Customized products for optimal customer satisfaction • Streetcars • Subway cars • Regional train cars, double-deck cars • High-speed train cars BA APAC: Capture the growth momentum, Austin Lu 5/22/2013 20
Slide 21: Localization
Localization • Grow Shanghai Krupp Stainless • Double end user business • Expand product portfolio • Build local capabilities • Extend service center offering • Develop local talents • Extend R&D and technical services • Investigate and develop local partnerships • Gain local advantages and vertical
Slide 22: Shanghai Krupp Stainless – opportunity to increase our position
Shanghai Krupp Cold rolling Stainless – opportunity capacity of 290,000 tonnes to increase our position in China and APAC Focus on ferritic grades and consumer applications Locally produced European quality Short lead times BA APAC: Capture the growth momentum, Austin Lu 5/22/2013 22
Slide 23: Our challenges
Our challenges • Overcapacity • 40% free melting capacity in China will result in 10 million tonnes excess in 2016 (forecast) • Chinese exports currently over 2 million tonnes per annum and increasing • Outokumpu as a global leader to capture APAC growth by penetrating expanding niche markets • Comm
Slide 24: Sales force effectiveness
Sales force effectiveness • Meeting customer expectations and making money • Increase market coverage • Ensure team and territory alignment • Transfer knowledge and build capability • Focus performance measures and empower sales force BA APAC: Capture the growth momentum, Austin Lu 5/22/2013 24
Slide 25: Index
Index 1. APAC overview 2. Outokumpu APAC Strategy 3. Summary BA APAC: Capture the growth momentum, Austin Lu 5/22/2013 25
Slide 26: Growing in the competitive environment
Growing in the competitive environment • Biggest and fastest growing region • Current market share offers room for significant growth • Specialty product offering and industry expertise bring value to our customers Target to double • Localization to sustain growth and APAC revenues competitiveness w
Slide 27: Q&A
Q&A BA APAC: Capture the growth momentum, Austin Lu 5/22/2013 27