Aperam S.a. · EURONEXT:APAM

Aperam — Investor Day (November 2013)

30 slides from Aperam's investor day presentation, Nov 27, 2013

Slide 1: Investor Day – Genk
Investor Day – Genk November 27, 2013 Philippe Darmayan – Chief Executive Officer © Aperam 0
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This document may contain forward-looking information and statements about Aperam and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with re
Slide 4: Stainless steel sustained growth worldwide
Stainless steel market: improving outlook Stainless steel sustained growth worldwide Stainless steel slab equivalent global demand Stainless steel slab equivalent global utilization rates (in million tonnes) (% of capacity) 90% 40 +5.2% 85% 30 80% 75% 20 70% 10 65% 0 60% F F F F F F 10 11 12 F F F F
Slide 5: European demand expected to recover slowly
Stainless steel market: improving outlook European demand expected to recover slowly Stainless steel slab equivalent European demand Stocks of flat stainless steel in EU-27 for distribution (‘000t) (in million tonnes) 5.5 320 300 5.0 +1.0% 280 260 Restocking needs to maintained rotation 4.5 240 days
Slide 6: NPI growth expected to stabilize nickel price at low level
Stainless steel market: improving outlook NPI* growth expected to stabilize nickel price at low level Nickel production cost curve (USD/t) Nickel - LME Cash (USD/t) 30,000 28,000 NPI – BF* 26,000 20,000 NPI – EAF* 24,000 NPI – BF* NPI – RKEF* 22,000 15,000 20,000 NPI – RKEF* 18,000 10,000 16,000 14,
Slide 7: Recent pricing outlook stable to favorable
Stainless steel market: improving outlook Recent pricing outlook stable to favorable Stainless steel transaction price in China for CR 304 2B 2mm Stainless steel base price in South Europe for CR 304 2B 2mm coil (USD/t) coil (USD/t) 5,000 2,000 1,900 4,500 1,800 1,700 4,000 1,600 3,500 1,500 1,400 3
Slide 8: Leadership Journey and top line strategy enhanced
Leadership Journey ® and top line strategy enhanced © Aperam 7
Slide 9: Leadership Journey target
Leadership Journey® and top line strategy enhanced Leadership Journey® target Cumulated gains (USD million) Leadership Journey® breakdown for 2014 500 SGA cost Productivity 6% 3% 450 Raw Material, Yield & Quality 400 28% Fixed cost 35% 350 425 300 349 Technological Fuels 8% 324 Others variable cost
Slide 10: Full impact of the cost cutting CAPEX
Leadership Journey® and top line strategy enhanced Full impact of the cost cutting CAPEX The new Hot Annealing and Picking line (RD79) The new steel service center in Campinas Imphy meltshop enhancement project • Investment: USD 65 m • Investment: USD 35 m • Investment: USD 29 m • Combining downstre
Slide 11: Productivity gains to continue
Leadership Journey® and top line strategy enhanced Productivity gains to continue Productivity evolution SSG&A cost reduction specific program (% of reduction since 2011) 10,500 500 Finance 450 Human Ressources 10,000 400 Site Services 350 9,500 Heath & Safety 300 Purchasing 9,000 250 CTO services 2
Slide 12: Changing the game for an improved industrial performance
Leadership Journey® and top line strategy enhanced Changing the game for an improved industrial performance Yield target for First choice products in Europe The Precision example: Evolution of Precision’s added (Base 100, 2011) costs w/o raw material (EUR million) 104 - 7% - 13% 102 100 2010 2011 20
Slide 13: Further mix improvement expected
Leadership Journey® and top line strategy enhanced Further mix improvement expected Aperam portfolio breakdown in Europe Top line product growth target for 2014 (‘000t) 45 Niches 4% 40 35 Specialties 26% Mass 30 commodities 25 42% 20 15 10 Ferritics 5 specialities Standard 0 21% ferritics Brazil Eur
Slide 15: Brazilian protections against unfair market behaviour
Opportunities in the Brazilian market Brazilian protections against unfair market behaviour Type of products Import duties status Anti-dumping status 9 Import duties applicable on Cold Rolled 9 AD rights have just been published valid as of October 4th product back from 25% to 14% in for 5 years fro
Slide 16: A growing market
Opportunities in the Brazilian market A growing market Stainless steel flat stainless steel consumption per capita South American Stainless steel demand (in kt) (kg/year) 7 800 6 700 600 5 500 4 400 3 300 2 200 1 100 0 0 South America USA Europe China E F F F F F 10 11 12 15 16 14 17 18 13 20 20 20
Slide 17: Aperam integrated plant can still improve
Opportunities in the Brazilian market Beyond biomass integration and high capacity utilization, Aperam integrated plant can still improve Timoteo plant capacity utilization Bioenergia productivity (ton of Charcoal / Employee) 100% Debottlenecking Forest Development Harvest Carbonization Charcoal sto
Slide 18: Products mix optimization and opportunities
Opportunities in the Brazilian market Products mix optimization and opportunities Contribution margin by products (USD/t) Example: Aperam’s strategy for Oriented-Grain Electrical Steels Stainless Steel GO GO Industrial GO & HGO Technologies process adequacy Production R&D Improvements of GO Upgrade
Slide 20: Specific markets' prospects to be key
Growing in Alloys & Specialties Specific markets’ prospects to be key Continuously variable Alloys & Specialties sales LNG* tankers transmission belt breakdown by market in 2012 7% 8% 24% 10% 12% 39% Special welding Mould for composite Energy / Oil & Gas aircraft fuselage parts Chemical process indu
Slide 21: LNG tankers and special welding solid prospects
Growing in Alloys & Specialties LNG* tankers and special welding solid prospects LNG tankers market estimates (in number) Special welding market Global rig count (Oil & Gas) CAGR of 5% 5 000 4 000 15% 3 000 25% 60% 2 000 1 000 0 2006 2007 2008 2009 2010 2011 2012 2013e 2014e 2015e 2016e 2017e Energy
Slide 22: Aerospace and transportation dynamic growth
Growing in Alloys & Specialties Aerospace and transportation dynamic growth Commercial aircraft deliveries (in number) Share of CVT* in passengers cars 1,400 35% 1,000 20% 600 12% 6% 5% 4% 200 1999 2002 2005 2008 2011 2014 2017 2020 2023 2008 2016e 2008 2016e 2008 2016e North America Japan Other Asi
Slide 23: Major investments realized to follow growth and improve competitiveness
Growing in Alloys & Specialties Major investments realized to follow growth and to improve competitiveness Imphy integrated plant Arc Furnace Vacuum Vacuum Oxygen Induction Melting x2 Decarburation Electro Vacuum Arc Continuous Slag Casting Remelting Remelting Reversing mill / slabbing x2 Forging Ho
Slide 25: Three years of active restructuring
Benefiting from the European restructuring Three years of active restructuring Key European restructuring milestone European stainless steel industry footprint after restructuring ¾ January 2011: Aperam spin-off and Leadership Journey® Long term suspension of 100kt of downstream capacity in Isbergue
Slide 26: European capacity closures expected to improve capacity utilization
Benefiting from the European restructuring European capacity closures expected to improve capacity utilization Upstream operational capacity and utilization rate of the Downstream operational capacity and utilization rate of the European industry European industry 9.0 80% 5.0 80% 8.5 75% 75% 4.5 8.0
Slide 27: The Terni remedy
Benefiting from the European restructuring The Terni remedy Terni industrial foot print st Downstream Melt Shop HRM 1 A&P 1700kt 1600kt 1300kt 660kt* 2 AOD 2 EAF 2 CC 1 VOD A large and competitive An unbalanced layout suffering from a disproportionately large integrated plant in which more But… upst
Slide 29: Strategic priority maintained allowing to capture new opportunities
The 5 profit-driving pillars Strategic priority maintained allowing to capture new opportunities Strategic priority 5 profit-driving pillars 1 1 Aiming at “best in cost” with the Leadership Journey® 11 Leadership Journey® 12 Optimizing portfolio with the Top Line Strategy 12 Top Line Strategy 1 3 Br

Aperam — Investor Day (November 2013) on 6ix

Aperam — Investor Day (November 2013)

Slide 1: Investor Day – Genk

Slide 2: Disclaimer

Slide 3: Stainless steel market: improving outlook

Slide 4: Stainless steel sustained growth worldwide

Slide 5: European demand expected to recover slowly

Slide 6: NPI growth expected to stabilize nickel price at low level

Slide 7: Recent pricing outlook stable to favorable

Slide 8: Leadership Journey and top line strategy enhanced

Slide 9: Leadership Journey target

Slide 10: Full impact of the cost cutting CAPEX

Slide 11: Productivity gains to continue

Slide 12: Changing the game for an improved industrial performance

Slide 13: Further mix improvement expected

Slide 14: Opportunities in the Brazilian market

Slide 15: Brazilian protections against unfair market behaviour

Slide 16: A growing market

Slide 17: Aperam integrated plant can still improve

Slide 18: Products mix optimization and opportunities

Slide 19: Growing in Alloys & Specialties

Slide 20: Specific markets' prospects to be key

Slide 21: LNG tankers and special welding solid prospects

Slide 22: Aerospace and transportation dynamic growth

Slide 23: Major investments realized to follow growth and improve competitiveness

Slide 24: Benefiting from the European restructuring

Slide 25: Three years of active restructuring

Slide 26: European capacity closures expected to improve capacity utilization

Slide 27: The Terni remedy

Slide 28: The 5 profit-driving pillars

Slide 29: Strategic priority maintained allowing to capture new opportunities

Slide 30: Q&A