Acerinox Sa · BME:ACX
Acerinox Sa — Investor Day (October 2018)
143 slides from Acerinox Sa's investor day presentation, Oct 3, 2018
Slide 1: Acerinox Capital Markets Day
ACERINOX CAPITAL MARKETS DAY Campo de Gibraltar, 2-3 October 2018 #CMDAcerinox18 1
Slide 2: Welcome
Welcome Rafael Miranda, Chairman of Acerinox 01 Acerinox Capital Markets Day 2
Slide 3: New Equipment that Makes the Difference
New Equipment that Makes the Difference Antonio Moreno, Production Director of Acerinox 02 Acerinox Capital Markets Day 3
Slide 4: What are our objectives with the investments?
NEW EQUIPMENT THAT MAKES THE DIFFERENCE What are our objectives with the investments? To be efficient. To have high productivity. To reduce costs. To have the best quality. Service to our clients. 4
Slide 5: CAPEX
NEW EQUIPMENT THAT MAKES THE DIFFERENCE CAPEX The capex we have had over the last few years is as shown in the graph. Thousands Euros 200,000 173,877 173,332 170,116 150,000 126,272 100,000 94,811 73,600 50,000 0 2013 2014 2015 2016 2017 2018 5
Slide 6: Where have we invested this money?
NEW EQUIPMENT THAT MAKES THE DIFFERENCE Where have we invested this money? What equipment or lines do we have? What do we have in place at our plants? 6
Slide 7: Group plants
NEW EQUIPMENT THAT MAKES THE DIFFERENCE Bahru Stainless Columbus Stainless North American Stainless Acerinox Europa 7
Slide 8: Bahru Stainless
NEW EQUIPMENT THAT MAKES THE DIFFERENCE B A H R U S TA I N L E S S Rolling Mill no. 2 (2012) Final Annealing Line (2013) Longitudinal Slitting Line (2014) 8
Slide 9: Columbus Stainless
NEW EQUIPMENT THAT MAKES THE DIFFERENCE C O L U M B U S S TA I N L E S S Longitudinal slitting line <650 width (2014) Longitudinal slitting line of 0.15/30 gauge (being installed) (2019 Ladle furnace 4th quarter (2019) 9
Slide 10: NAS
NEW EQUIPMENT THAT MAKES THE DIFFERENCE NAS Longitudinal slitting line (thick gauges) (2016) Rolling mill no. 6 (2017) Bright annealing line (2017) CB Line being installed (2018) 10
Slide 11: Acerinox Europa
NEW EQUIPMENT THAT MAKES THE DIFFERENCE A C E R I N O X E U R O PA Replacement of Hot Rolling AC motors (2013) 11
Slide 12: Acerinox Europa
NEW EQUIPMENT THAT MAKES THE DIFFERENCE A C E R I N O X E U R O PA Replacement of Hot Rolling AC motors (2013) 12
Slide 13: Acerinox Europa
NEW EQUIPMENT THAT MAKES THE DIFFERENCE A C E R I N O X E U R O PA CS-1 modification. Cut-to-length slitting line (2014) 13
Slide 14: Acerinox Europa
NEW EQUIPMENT THAT MAKES THE DIFFERENCE A C E R I N O X E U R O PA Replacement of ZM-3 motors and drivers (2017) 14
Slide 15: Acerinox Europa
NEW EQUIPMENT THAT MAKES THE DIFFERENCE A C E R I N O X E U R O PA SL-9 longitudinal slitting line (2017) 15
Slide 16: Acerinox Europa
NEW EQUIPMENT THAT MAKES THE DIFFERENCE A C E R I N O X E U R O PA SL-9 Longitudinal slitting line (2017) 16
Slide 17: Acerinox Europa
NEW EQUIPMENT THAT MAKES THE DIFFERENCE A C E R I N O X E U R O PA Rolling mill no. 7 (March 2018) 17
Slide 18: AP-5 March 2018
NEW EQUIPMENT THAT MAKES THE DIFFERENCE AP-5 MARCH 2018 WHAT IS IT? WHAT ARE ITS TECHNOLOGICAL DEVELOPMENTS? WHAT BENEFITS DOES IT PROVIDE? 18
Slide 19: Acerinox Europa
NEW EQUIPMENT THAT MAKES THE DIFFERENCE A C E R I N O X E U R O PA Final annealing and pickling line (March 2018) 19
Slide 20: Acerinox Europa
NEW EQUIPMENT THAT MAKES THE DIFFERENCE A C E R I N O X E U R O PA Final annealing and pickling line (March 2018) 20
Slide 21: Absence of contact in cooling stage
NEW EQUIPMENT THAT MAKES THE DIFFERENCE The absence of contact in the cooling stage following heat treatment produces a uniform surface with no marks. 21
Slide 22: Acerinox Europa
NEW EQUIPMENT THAT MAKES THE DIFFERENCE A C E R I N O X E U R O PA Final annealing and pickling line (March 2018) 22
Slide 23: Acerinox Europa
NEW EQUIPMENT THAT MAKES THE DIFFERENCE A C E R I N O X E U R O PA SKP Y TLU AP-5 23
Slide 24: Pickling control AP-5
ACERINOX CAPITAL MARKETS DAY 2018 A C E R I N O X E U R O PA Pickling control AP-5 24
Slide 25: What features has the pickling?
NEW EQUIPMENT THAT MAKES THE DIFFERENCE What features has the pickling? 25
Slide 26: What is achieved with these plants?
NEW EQUIPMENT THAT MAKES THE DIFFERENCE What is achieved with these plants? 1º Emission are 2/3 times lower than the legal limit. 2º The conditions of acids, salts and water is 40% ¿QUÉ lower than BENEFICIOS what we APORTA? have had until now. 26
Slide 27: AP-3 Revamping
NEW EQUIPMENT THAT MAKES THE DIFFERENCE A C E R I N O X E U R O PA AP-3 Revamping (August 2018) 27
Slide 28: AP-3 Revamping
NEW EQUIPMENT THAT MAKES THE DIFFERENCE A C E R I N O X E U R O PA AP-3 Revamping (August 2018) 28
Slide 29: Acerinox Europa: upcoming projects
NEW EQUIPMENT THAT MAKES THE DIFFERENCE A C E R I N O X E U R O PA : U P C O M I N G P R O J E C T S TO BE IMPLEMENTED There is another series of investments underway for all the departments: Cold Rolling, Hot Rolling and Melt Shop (ladle furnace) with the same objective: • Improve quality • Reduce
Slide 30: Best installations with best equipment
NEW EQUIPMENT THAT MAKES THE DIFFERENCE All of our effort is focused on having the best installations with the best equipments in order to be the best: In competitiveness In quality In customer service In environment 30
Slide 31: Thank you
NEW EQUIPMENT THAT MAKES THE DIFFERENCE THANK YOU
Slide 32: Stainless Steel in Transport: New Opportunities
Stainless Steel in Transport: New Opportunities Luis Peiró, Technical Director of CEDINOX 03 Acerinox Capital Markets Day 32
Slide 33: Historical evolution
1 | Historical evolution 2 | Current situation 3 | Expected development in the coming years 4 | Goals in the automotive industry 5 | Conclusions 33
Slide 34: Historical evolution 2000-2017: motor vehicles production
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES HISTORICAL EVOLUTION 2000 -2017 MOTOR VEHICLES PRODUCTION 4% 97.3 million 100,000,000 Compound Annual 90,000,000 Growth Rate [CAGR] 80,000,000 70,000,000 58.4 million 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 2000 2001 2002 20
Slide 35: Stainless steel consumption in motor vehicles
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES HISTORICAL EVOLUTION 2000 -2017 MOTOR VEHICLES: STAINLESS STEEL WORLD CONSUMPTION (x1000 t) 4,000 ISSF 3,727 3,500 3,598 3,492 3,000 3,332 3,011 2,975 3,074 2,752 2,841 2,500 2,755 2,666 2,492 2,534 2,355 2,000 2,154 1,500 2002 2003 2004 2005 2006 2007
Slide 36: World motor vehicle production
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES HISTORICAL EVOLUTION 2000 -2017 WORLD MOTOR VEHICLE PRODUCTION (MILLION UNITS - % SHARE) 56 million 69 million 80 million 95 million 36
Slide 37: Current situation
1 | Historical evolution 2 | Current situation 3 | Expected development in the coming years 4 | Goals in the automotive industry 5 | Conclusions 37
Slide 38: Motorisation rate per 1,000 inhabitants
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES C U R R E N T S I T U AT I O N MOTORISATION RATE PER 1,000 INHABITANTS (in units, % change 2015-2005) 38
Slide 39: Passenger cars by fuel type (EU) 2016
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES C U R R E N T S I T U AT I O N PASSENGER CARS BY FUEL TYPE (EU) 2016 95.7% Source: European Automobile Manufacturers 39 Association. www.acea.be
Slide 40: Exhaust systems: 90-95% stainless steel
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES C U R R E N T S I T U AT I O N EXHAUST SYSTEMS: 90-95% STAINLESS STEEL CONSUMPTION 40
Slide 41: Exhaust system
ACERINOX CAPITAL MARKETS DAY 2018 EXHAUST HALF SHELL TOP SYSTEM BAFFLE A BAFFLE B HALF SHELL BOTTOM PLATE REAR PLATE FRONT SHELLS 41
Slide 42: Suspension & braking system
ACERINOX CAPITAL MARKETS DAY 2018 SUSPENSION & BRAKING SYSTEM DIAPHRAGM DISC BALANCING DISC 42
Slide 43: Fuel supply system
ACERINOX CAPITAL MARKETS DAY 2018 F U E L S U P P LY SLEEVE SYSTEM STRAP FLAP HOUSING FILLER HEAD SLIDER COMPLETE TRIGGER WHEEL BRACKET BAYONET 43
Slide 44: Other parts
ACERINOX CAPITAL MARKETS DAY 2018 OTHER PA R T S 44
Slide 45: Other parts
ACERINOX CAPITAL MARKETS DAY 2018 OTHER PA R T S 45
Slide 46: Expected development in the coming years
1 | Historical evolution 2 | Current situation 3 | Expected development in the coming years 4 | Goals in the automotive industry 5 | Conclusions 46
Slide 47: Light vehicle unit growth trend
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES EXPECTED DEVELOPMENT LIGHT VEHICLE UNIT GROWTH TREND Source: Frost & Sullivan 2015, IHS Worldview May 2016, Tenneco 2017 Investor Day 47
Slide 48: Vehicle parc unit growth (2025)
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES EXPECTED DEVELOPMENT VEHICLE PARC UNIT GROWTH (2025) Source: Tenneco 2017 Investor Day 48
Slide 49: World production by technology (2030)
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES EXPECTED DEVELOPMENT WORLD PRODUCTION BY TECHNOLOGY (2030) million units Source: Faureccia 2017 Investor Day 49
Slide 50: Motor vehicles technology
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES EXPECTED DEVELOPMENT MOTOR VEHICLES | TECHNOLOGY 25 to 30% Higher regulatory content LV BEV Light Vehicle / Battery Electric Vehicle Regulated ICEs Source: Frost & Sullivan 2015, IHS Worldview May 2016, Tenneco 2017 Investor Day 50 [*IHS Automotive, Po
Slide 51: Goals in the automotive industry
1 | Historical evolution 2 | Current situation 3 | Expected development in the coming years 4 | Goals in the automotive industry 5 | Conclusions 51
Slide 52: Goals in the automotive industry
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES G O A L S I N T H E A U T O M O T I V E I N D U S T RY POLLUTION : C O 2 , N O x PA R T I C L E S R E D U C T I O N WEIGHT / THICKNESS : R E D U C T I O N W I T H O U T L E S S E N R E S I S TA N C E A N D CONFORMABILITY EFFICIENCY : MINOR COST PER KM
Slide 53: Pollution: electrification after 2020
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES POLLUTION ELECTRIFICATION WILL INCREASE DRAMATICALLY AFTER 2020 WITH EXHAUST SYSTEMS HV Hybrid Vehicle PHV Plug-in Hybrid Vehicle FCV Fuel Cell Vehicle EV Electric Vehicle Source: Toyota 53
Slide 54: Pollution: emissions control
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES POLLUTION: EMISSIONS CONTROL Coolant CONTROL CRT – Continuously Regenerating Trap EGR Cooler UNIT SCR – Selective Catalyst Reduction EGR Cooler Valve INTAKE Cylinder heat EXHAUST 54
Slide 55: Pollution: natural gas
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES P O L L U T I O N : N AT U R A L G A S 55
Slide 56: Liquefied natural gas - LNG
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES P O L L U T I O N : N AT U R A L G A S LIQUEFIED NATURAL GAS - LNG LNG TANKS IN TRUCKS LNG DOUBLE SIDES TANKS Source: WESTPORT Source: LAPESA 56
Slide 57: LNG vessels - ECA
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES P O L L U T I O N : N AT U R A L G A S LNG VESSELS - ECA (EMISSION CONTROL AREAS) 57
Slide 58: Weight reduction: efficiency
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES WEIGHT REDUCTION: EFFICIENCY ANTI- ENERGY INTRUSION ABSORPTION MULTI- USE “HARD” USE “HARD + STRENGTH SOFT” B-PILLAR MONO HPF MULTI-STRENGTH PARTS HPF PARTS Source: POSCO. “Crash safety with high strength steels” International Automotive Congress, Chin
Slide 59: Safety: structures
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES S A F E T Y: S T R U C T U R E S 1.4301 304SP BUS 3CR12 (1.4003) 16-7Mn 1.4318 LIGHT & SAFE 1.4301 1.4301 INOX-SAFE 1.4028 304-LNi CRF PSA FORD 1.4318 DOLTRAC 304SP 59
Slide 60: Safety: fuel tanks
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES S A F E T Y: F U E L TA N K S STAINLESS STEEL VS PLASTIC Weight: ▼ 3.5 kg Capacity: 3 litres Machinery investment: ▼ 50-70% Development cost: ▼ 50% Time to market ▼ 50% 60
Slide 61: Technology: FCEV
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES T E C H N O L O G Y: F C E V FUEL CELL VEHICLE: H2 + O2 H2O + ELECTRICITY 61
Slide 62: Technology: battery electric vehicle
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES T E C H N O L O G Y: B AT T E RY E L E C T R I C V E H I C L E STRUCTURAL SUPPORT FOR BEV (BATTERY ELECTRIC VEHICLE) 62
Slide 63: New supply network
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES N E W S U P P LY N E T W O R K Source: www.prensa.Naturgy.com 63
Slide 64: New supply network
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES N E W S U P P LY NETWORK Stainless Steel: ESSENTIAL M AT E R I A L F O R AESTHETIC AND TECHNICAL REASONS Source: www.prensa.Naturgy.com 64
Slide 65: Conclusions
1 | Historical evolution 2 | Current situation 3 | Expected development in the coming years 4 | Goals in the automotive industry 5 | Conclusions 65
Slide 66: Conclusions: combustion engine and hybrids
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES CONCLUSIONS COMBUSTION ENGINE will be the prevailing technology, at least until 2050 HYBRIDS Increase will support STAINLESS STEEL WITH EXHAUST SYSTEMS exhaust systems HV Hybrid Vehicle PHV Plug-in Hybrid Vehicle FCV Fuel Cell Vehicle EV 66 Electric Ve
Slide 67: Conclusions: new technologies opportunity
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES CONCLUSIONS 10 KG ARE NOT DEPENDING ON EXHAUST SYSTEMS NEW TECHNOLOGIES are a unique opportunity for stainless steel 67
Slide 68: Conclusions: estimated opportunities in 2030
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES CONCLUSIONS ESTIMATED MARKET OPPORTUNITIES IN 2030 (ISSF): Battery Applications Fuel Cells Lightweight Bodies SHIPBUILDING INDUSTRY offers great opportunities for STAINLESS STEEL 68
Slide 69: Thank you
STAINLESS STEEL IN TRANSPORT: NEW OPPORTUNITIES THANK YOU
Slide 70: Global Procurement Strategy
Global Procurement Strategy Fernando Gutiérrez, Corporate Strategy and Raw Materials Director 04 Acerinox Capital Markets Day 70
Slide 71: Types of raw materials
GLOBAL PROCUREMENT STRATEGY T Y P E S O F R AW M AT E R I A L S TEXTO & 22 IMAGEN 24 Ti 25 GRANDE Cr Chromium S 16 Titanium Mn Manganese PRIMARY MATERIALS Sulfur 14 Pure Metals 26 Si Silicon Ferroalloys Other Materials FeIron 13 20 Ca Al Aluminum SECUNDARY MATERIALS Stainless Steel Scrap Calcium 41
Slide 72: Selection criteria
GLOBAL PROCUREMENT STRATEGY SELECTION CRITERIA Existing raw Disponibilidad Availability Market materials (Local/Importación (Local/Import) ) Priority direct Suppliers Number of purchase from suppliers suppliers Logistics Transit time Viable volume depending on FLEXIBILITY transport Comparison Anális
Slide 73: Selection criteria goals
GLOBAL PROCUREMENT STRATEGY SELECTION CRITERIA GOALS: To minimize the cost of the basket at all times To guarantee the purchase of strategic raw materials To ensure supply on time, with the minimum stock 73
Slide 74: Some relevant facts
GLOBAL PROCUREMENT STRATEGY S O M E R E L E VA N T FA C T S Blue Sky Plan Reactivation of Ban on scrap mothballed production imports in China Turkish Lira crisis, impact on ferrous scrap. (FeNi) NPI production in Indonesia growing Consolidation of South African FeCr market 74
Slide 75: Nickel market situation
GLOBAL PROCUREMENT STRATEGY N I C K E L M A R K E T S I T U AT I O N 16 weeks of kt consumption Reactivation of mothballed production Real Balance Cumulative Balance by the end of 600 2.018 Production increase of NPI in Indonesia 400 200 Uncertainty due to the effect of the environmental 0 policy in
Slide 76: Nickel official values
GLOBAL PROCUREMENT STRATEGY N I C K E L O F F I C I A L VA L U E S Usd/t t LME Stock SHFE Stock LME Price 22,000 550 20,000 500 18,000 450 16,000 400 14,000 350 12,000 300 10,000 8,000 250 6,000 200 76
Slide 77: Nickel - batteries
GLOBAL PROCUREMENT STRATEGY N I C K E L - B AT T E R I E S WORLD PRODUCTION 70% Stainless Steel MÁS LIGERO 2.2 MT 30% other industries Batteries 5% STAINLESS STEEL BREAKDOWN USAGE 98% Feni 100% NPI 22% Pure Ni 22% Pure Ni NICKEL BATTERIES STAINLESS STEEL BREAKDOWN Dissolving high purity nickel with
Slide 78: Nickel facts
GLOBAL PROCUREMENT STRATEGY NICKEL FACTS Reactivation of mothballed production, particularly in FeNi Support for upward trend on nickel price, moving to more stable levels Possible disconnection of FeNi and other nickel sources from pure nickel prices Battery recycling? Potential new source of nicke
Slide 79: Ferrochrome market situation
GLOBAL PROCUREMENT STRATEGY F E R R O C H R O M E M A R K E T S I T U AT I O N MC&LC HC FeCr kt FeCr 8% 47% 6,000 CAGR 12.3% 5,000 China > 4,000 South Africa Charge FeCr 45% 3,000 CAGR -0.02% 2,000 80% of Charge FeCr 1,000 consumption 0 38% of H/C FeCr 2010 2011 2012 2013 2014 2015 2016 2017 consump
Slide 80: South Africa vs China
GLOBAL PROCUREMENT STRATEGY SOUTH AFRICA VS CHINA Country with the largest reserves of Chrome ore Still needs to import FeCr Production cost pressure. Power prices and Rand / Captive domestic production. Export duties Us$ trend Consolidation of South African market Strong variations in domestic prod
Slide 81: Ferrochrome facts
GLOBAL PROCUREMENT STRATEGY FERROCHROME FACTS Consolidation of South African production Impact of China domestic production & Imports Perfect location of Columbus Stainless 81
Slide 82: S.S. scrap: generation & lifecycle
GLOBAL PROCUREMENT STRATEGY S . S . S C R A P : G E N E R AT I O N & L I F E C Y C L E Construction Internal scrap <50 years ≤ 3 months Industrial scrap ≤ 6 months Home appliance <12 years Transport Industrial equipment <15 years <25 years 82
Slide 83: Stainless steel scrap trade
GLOBAL PROCUREMENT STRATEGY S TA I N L E S S S T E E L S C R A P T R A D E Estimate Availability 10.7 mill. Mt CGAR (last 10yr) 4.2% Main Net Exporters Main Net Importers ? 83
Slide 84: Stainless steel scrap trade
GLOBAL PROCUREMENT STRATEGY S TA I N L E S S S T E E L S C R A P T R A D E River, Road and railway deliveries Own Port Close to main <15 km from main generating scrap Spanish recycling areas centers Strategic plant locations for a guaranteed supply of Stainless Steel Scrap 84
Slide 85: Stainless steel scrap
GLOBAL PROCUREMENT STRATEGY S TA I N L E S S S T E E L S C R A P Good scrap Competitive Cost availability GROUP STRATEGY Lower Co2 emm. Main role in Circular economy 1 mt Scrap ≈ 4.7 mt Co2 85
Slide 86: Thank you
GLOBAL PROCUREMENT STRATEGY THANK YOU
Slide 87: Global Trade: New Order, New Rules?
Global Trade: New Order, New Rules? Manuel Landeta, Head of Business Intelligence 05 Acerinox Capital Markets Day 87
Slide 88: Contents
GLOBAL TRADE: NEW ORDER, NEW RULES? CONTENTS EXCESS PRODUCTION IN ASIA DRIVEN BY OVERCAPACITY IN CHINA GLOBAL IMPACT ON TRADE DISRUPTION OF TRADE FLOWS. SURGE ON EXPORTS RISING PROTECTIONISM WORLDWIDE PROLIFERATION OF TRADE MEASURES SINCE 2011 A TURBULENT 2018 US SECTION 232 US RESPONSE TO
Slide 89: Excess production in Asia
GLOBAL TRADE: NEW ORDER, NEW RULES? EXCESS PRODUCTION IN ASIA D R I V E N B Y O V E R C APA C I T Y I N C H I N A GFSEC (G20/OECD) REACHING CONSENSUS ON GLOBAL STEEL OVERCAPACITY Consensus on the root of the problems and on the objectives, not on the progress FOR STAINLESS WE SEE SIGNS TOWARDS EQUIL
Slide 90: Global impact on trade
GLOBAL TRADE: NEW ORDER, NEW RULES? G L O B A L I M PA C T O N T R A D E DISRUPTION OF TRADE FLOWS. SURGE ON EXPORTS ASIA EXPORT FLOWS OF STAINLESS STEEL 2009 Vs 2017 INCLUDING FEEDSTOCK MATERIAL FOR FURTHER PROCESSING Thousand tonnes TO THE INTRA* AMERICAS EMEA WEST ASIA 912 617 5,588 111 209 2009
Slide 91: Rising protectionism
GLOBAL TRADE: NEW ORDER, NEW RULES? RISING PROTECTIONISM P R O L I F E R AT I O N O F T R A D E M E A S U R E S S I N C E 2 0 1 1 ALONG INCREASE ON SURGE ON EXPORTS FUELED BY OVERCAPACITY MAIN TRADE MEASURES FOR STAINLESS STEEL IN FORCE END 2017 NOT NEW EU28 CONTEXT OVERCAPACITY CN IN S. Korea TW Ch
Slide 92: Rising protectionism
GLOBAL TRADE: NEW ORDER, NEW RULES? RISING PROTECTIONISM P R O L I F E R AT I O N O F T R A D E M E A S U R E S S I N C E 2 0 1 1 CHINA-INDUCED OVERCAPACITY DISTORTING MARKETS AND LEADING TO UNFAIR TRADE PRACTICES MAIN TRADE MEASURES FOR STAINLESS STEEL IN FORCE END 2017 NOT NEW EU28 CONTEXT OVERCAP
Slide 93: Rising protectionism
GLOBAL TRADE: NEW ORDER, NEW RULES? RISING PROTECTIONISM P R O L I F E R AT I O N O F T R A D E M E A S U R E S S I N C E 2 0 1 1 COUNTRY LEVEL RESPONSE RESULTING IN DIFFERENT GRADES OF PROTECTIONISM ACROSS MARKETS MAIN TRADE MEASURES FOR STAINLESS STEEL IN FORCE END 2017 NOT NEW Less protectionism
Slide 94: Rising protectionism
GLOBAL TRADE: NEW ORDER, NEW RULES? RISING PROTECTIONISM P R O L I F E R AT I O N O F T R A D E M E A S U R E S S I N C E 2 0 1 1 NOT JUST TRADE DEFENSE MEASURES (AD/CVD) BUT ALSO OTHER TRADE BARRIERS (IMPORT DUTIES, TECH. BARRIERS) MAIN TRADE MEASURES FOR STAINLESS STEEL IN FORCE END 2017 NOT NEW E
Slide 95: Rising protectionism
GLOBAL TRADE: NEW ORDER, NEW RULES? RISING PROTECTIONISM P R O L I F E R AT I O N O F T R A D E M E A S U R E S S I N C E 2 0 1 1 MATERIALS AFECTED BY TRADE REMEDIES OFTEN BEING REPLACED WITH OTHER PRODUCTS (INTERRELATION) Drop on EU imports of CR from China MAIN TRADE MEASURES FOR STAINLESS STEEL I
Slide 96: Rising protectionism
GLOBAL TRADE: NEW ORDER, NEW RULES? RISING PROTECTIONISM P R O L I F E R AT I O N O F T R A D E M E A S U R E S S I N C E 2 0 1 1 MATERIALS AFECTED BY TRADE REMEDIES BEING REDIRECTED TO OTHER MARKETS Surge on US imports of CR from China MAIN TRADE MEASURES FOR STAINLESS STEEL IN FORCE END 2017 in th
Slide 97: Rising protectionism
GLOBAL TRADE: NEW ORDER, NEW RULES? RISING PROTECTIONISM P R O L I F E R AT I O N O F T R A D E M E A S U R E S S I N C E 2 0 1 1 AS MORE MEASURES COME IN PLACE PRESSURE GROWS ON MARKETS / PRODUCTS UNPROTECTED MAIN TRADE MEASURES FOR STAINLESS STEEL IN FORCE END 2017 NOT NEW EU28 CONTEXT OVERCAPACIT
Slide 98: Rising protectionism: a turbulent 2018
GLOBAL TRADE: NEW ORDER, NEW RULES? RISING PROTECTIONISM A TURBULENT 2018 US SECTION 232 TRIGGERING A CHAIN REACTION WORLDWIDE NEW AD INVESTIGATION BEING INITIATED IN ASIA FOR FEEDSTOCK MATERIALS MAIN TRADE MEASURES FOR STAINLESS STEEL IN 2018 Canada EU28 China CN IN S. Korea japan TW China IN REB U
Slide 99: US Section 232
GLOBAL TRADE: NEW ORDER, NEW RULES? US SECTION 232 U S R E S P O N S E T O G L O B AL S T E E L O V E R C APA C I T Y US ACTION MOTIVATED BY LACK OF PROGRESS ON THE GLOBAL FORUM ON STEEL EXCESS CAPACITY (GFSEC) MEASURES INTENDED TO INCREASE US STEEL CAPACITY UTILIZATION TO 80% (MINIMUM FOR LONG TERM
Slide 100: US Section 232: imports trend
GLOBAL TRADE: NEW ORDER, NEW RULES? US SECTION 232 IMPORTS TREND IMPORTS ALREADY DECREASING IMPORTS EXPECTED TO DROP TO MINIMUMS IN H2 IMPORTS MARKET SHARE FALLING TO 19% UP TO JULY US IMPORTS OF STAINLESS STEEL – FLAT & LONG PRODUCTS (7219-7222) US IMPORTS MARKET SHARE - FLAT PRODUCTS (7219-7220) k
Slide 101: EU SFG
GLOBAL TRADE: NEW ORDER, NEW RULES? EU SFG A MUCH NEEDED REACTION PURPOSE OF SFG IS TO AVOID DEFLECTION WHILST KEEPING TRADITIONAL TRADE FLOWS US IMPORTS OF STAINLESS STEEL AFFECTED BY SECTION 232 (BASED ON 2017) Thousand tonnes INVESTIGATION LAUNCHED ON 23 MAR EU REB (incl. SS) EU28 157 ASIA PROV S
Slide 102: EU SFG: definitive measures expected early 2019
GLOBAL TRADE: NEW ORDER, NEW RULES? EU SFG D E F I N I T I V E M E A S U R E S E X P E C T E D E A R LY 2 0 1 9 TRADE DIVERSION LIKELY TO INCREASE FOLLOWING NEW MEASURES BEING IMPLEMENTED AROUND THE WORLD TIMELINE US AND EU STEEL IMPORTS COMPARISON* Commissioner Malmström in July 2018 upon announcem
Slide 103: EU SFG: imports trend
GLOBAL TRADE: NEW ORDER, NEW RULES? EU SFG IMPORTS TREND IMPORTS HAVE INCREASED AHEAD OF THE MEASURES SO FAR IMPORTS KEPT INCREASING IN 2018 IMPORTS MARKET SHARE CLOSE TO 30% UP TO JULY EU IMPORTS OF STAINLESS STEEL – FLAT & LONG PRODUCTS (7219-7222) EU IMPORTS MARKET SHARE - FLAT PRODUCTS (7219-722
Slide 104: Conclusions
GLOBAL TRADE: NEW ORDER, NEW RULES? CONCLUSIONS NEW ORDER, NEW RULES? FREE TRADE BUT FAIR. ACERINOX GLOBAL PRESENCE, KEY FOR SUCCESS IN TURBULENT TIMES. L O O K I N G F O R A T U R N I N G P O I N T … AN D F O RWAR D IN A GLOBALIZED ECONOMY, WE ALL MUST ABIDE BY THE SAME RULES TOWARDS FAIR COMPETITI
Slide 105: Thank you
GLOBAL TRADE: NEW ORDER, NEW RULES? THANK YOU
Slide 106: Digitalization in the Stainless Steel Industry
Digitalization in the Stainless Steel Industry Antonio Gayo, Head of Digital Transformation 06 Acerinox Capital Markets Day 106
Slide 107: How we understand digital transformation
DIGITALIZATION IN THE STAINLESS STEEL INDUSTRY H O W W E U N D E R S TA N D D I G I TA L T R A N S F O R M AT I O N HOW DOES IT FIT INTO OUR STRATEGY? WHY NOW? DOES IT CHANGE OUR BUSINESS MODEL? IT HAS TO BE ALIGNED WITH THE STRATEGIC PLAN CEO KEY DEPARTMENTS REGULAR REVIEW 107
Slide 108: Product
DIGITALIZATION IN THE STAINLESS STEEL INDUSTRY PRODUCT +6% 48,000 42,000 36,000 Cr Ni 30,000 Fe >12% 8-10% 24,000 18,000 12,000 6,000 0 China 54% Europe + Africa America Rest of Asia China 50% 50% Consumer Investment goods goods 2001 02 03 04 05 06 07 08 09 10 11 12 13 14 15 2016 108
Slide 109: Market trade barriers (Steel War)
DIGITALIZATION IN THE STAINLESS STEEL INDUSTRY MARKET COMMODITY GLOBALIZED TRADE BARRIERS (“Steel War”) 109
Slide 110: How to compete in this environment
DIGITALIZATION IN THE STAINLESS STEEL INDUSTRY HOW TO COMPETE IN THIS ENVIRONMENT 1. Efficiency Better metallic yields Reuse of waste Process line optimization Product mix optimization Uniform quality 1. Flexibility Reaction Capacity to…. Economic cycles Raw materials volatility Regi
Slide 111: Add value to our data
DIGITALIZATION IN THE STAINLESS STEEL INDUSTRY A D D VA L U E T O O U R D ATA Operational excellence Enhance brand image Process reliability R+D+I Quality Market positioning Integrated planning Attracting Talent A new way of working Handling large volumes of data Analysis of the data
Slide 112: Steps followed
DIGITALIZATION IN THE STAINLESS STEEL INDUSTRY STEPS FOLLOWED The Group invests an average of MEUR 200/year in the latest technologies available, of which roughly 20% is for equipment upgrades A high level of automation in all the business units For many years, time has been devoted to capturing and
Slide 113: Methodology: Industry 4.0 projects
DIGITALIZATION IN THE STAINLESS STEEL INDUSTRY METHODOLOGY INDUSTRY 4.0 PROJECTS Descriptive Diagnosis Predictive Prescriptive What action What has Why has it What is going to should be happened? happened? happen? taken? Historian CBM & QES Data analytics Artificial Intelligence 113
Slide 114: Identified projects
DIGITALIZATION IN THE STAINLESS STEEL INDUSTRY IDENTIFIED PROJECTS SMALL PROJECTS WHICH GUARANTEE SUCCESS Data analytics for Energy-saving projects Research into sensorization Predictive maintenance optimization in the What to measure? Where to procurement of transport measure? Pilot projects on new
Slide 115: Resources
DIGITALIZATION IN THE STAINLESS STEEL INDUSTRY RESOURCES Lead and coordinate the group’s strategy Study the latest technologies Security assessment Analyze the potential projects and Search for ideas the alternatives in the market Meeting point for potential Execute projects cooperatio
Slide 116: Difficulties
DIGITALIZATION IN THE STAINLESS STEEL INDUSTRY D I F F I C U LT I E S LET ONESELF BE LED BY FASHIONS START WITH PROJECTS WITHOUT ASKING THE KEY QUESTIONS SHIFT THE ORGANIZATION TO PROJECTS THAT CHANGE THE COMPANY CULTURE 116
Slide 117: Keys to approach the future
DIGITALIZATION IN THE STAINLESS STEEL INDUSTRY KEYS TO APPROACH THE FUTURE The digital plan has to be aligned with the culture and the strategy of the company Select projects small specific areas self-financed sharing resources throughout the company Always maintain control not duplicating
Slide 118: Thank you
DIGITALIZATION IN THE STAINLESS STEEL INDUSTRY THANK YOU
Slide 119: Cash is King
Cash is King Miguel Ferrandis - CFO 07 Acerinox Capital Markets Day 119
Slide 120: Cash generation 2008-2017
CASH IS KING C A S H G E N E R AT I O N 2 0 0 8 – 2 0 1 7 3,081 3314 14 NET DEBT REDUCTION RETURN TO 996 SHAREHOLDERS Million € 1,771 CAPEX CASH 2008-2017 120
Slide 121: Net financial debt
CASH IS KING NET FINANCIAL DEBT 1,200 1,000 800 Million € 600 1,075 1,084 939 887 400 711 582 616 620 609 529 537 200 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Jun 2018 Gearing 46.5% 61.3% 56.3% 47.1% 33.9% 34.1% 33.2% 35.1% 28.6% 30.9% 26.6% NFD / EBITDA 5.48 -5.63 2.84 2.60 2.94 2.32 1.3
Slide 122: Net financial debt June 2018
CASH IS KING NET FINANCIAL DEBT JUNE 2018 Net Financial Gross Debt Cash Debt Million € 789 1,325 537 122
Slide 123: Financial strategy: focus on cash
CASH IS KING F I N A N C I A L S T R AT E G Y: F O C U S I N C A S H Extend maturities Secure interest rate Working capital under control Reduce cost High quality debt 123
Slide 124: Working capital
CASH IS KING W O R K I N G C A P I TA L 2,000 1,500 1,000 Million € 500 0 -500 -1,000 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 dic-14 Dec-15 Dec-16 Dec-17 Jun-18 Inventories Trade Debtors Trade Creditors Working Capital 124
Slide 125: Term debt maturity
CASH IS KING T E R M D E B T M AT U R I T Y Total term debt: €1,211 million 350 300 250 Million € 200 150 304 259 100 195 134 144 50 75 30 30 20 0 10 10 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Maturities of the next four Cash June 2018: €789 million years amount to €773 million 125
Slide 126: Secure interest rate
CASH IS KING S E C U R E I N T E R E S T R AT E December 2008 June 2018 Long term debt Short term debt Long term debt Short term debt 17% 40% 60% 83% Fixed interest rate Fixed interest rate Va ri a b l e i n t e re s t ra t e Va ri a b l e i n t e re s t ra t e 0% 41% 59% 100% 126
Slide 127: Net financial expenses
CASH IS KING NET FINANCIAL EXPENSES Lowest finance expenses Among peers Highest reduction 70 60 -71% 50 40 Million € 66 30 55 54 20 44 30 10 19 2 0 2012 2013 2014 2015 2016 2017 Jun 2018 127
Slide 128: Net financial expenses
CASH IS KING NET FINANCIAL EXPENSES Lowest finance expenses Million € Financial Financial Exchange Expenses Income Differences -2 8 6 Jun 2018 -16 8 128
Slide 129: High quality debt
ACERINOX CAPITAL MARKETS DAY 2018 HIGH QUALITY DEBT No covenants related to the P&L 98% senior unsecured at 30 June Proper balance between diversification and cost 129
Slide 130: Thank you
CASH IS KING THANK YOU
Slide 131: Stainless Steel Market Update
Stainless Steel Market Update Bernardo Velázquez - CEO 08 Acerinox Capital Markets Day 131
Slide 132: Stainless steel market update: key drivers
STAINLESS STEEL MARKET UPDATE S TA I N L E S S S T E E L M A R K E T U P D AT E KEY DRIVERS Strong demand Overcapacity Trade barriers HOW DOES ACERINOX FACE THIS SCENARIO? Growth strategy Cost control Investments Global position 132
Slide 133: Key drivers: strong demand, macro indicators
STAINLESS STEEL MARKET UPDATE KEY DRIVERS: STRONG DEMAND M A C R O I N D I C AT O R S +2.1% +2.9% +6.7% GDP Eurostat: Q2 US Bureau of National Bureau of Economic Analysis: Q2 Statistics of China: Q2 +0.8% +4.9% +6.1% IPI Eurostat: Jul Federal Reserve: Aug National Bureau of Statistics of China: Aug
Slide 134: Key drivers: strong demand, sector indicators
STAINLESS STEEL MARKET UPDATE KEY DRIVERS: STRONG DEMAND S E C T O R I N D I C AT O R S Auto Production Construction Home Appliances EUROPE +2.5% +3.2% +1.7% USA -1.5% +5.2% -0.4% CHINA +3.5% +10.2% -0.4% Source: Acerinox 134
Slide 135: Key drivers: overcapacity
STAINLESS STEEL MARKET UPDATE K E Y D R I V E R S : O V E R C A PA C I T Y New projects ? Melting capacity Melting production Source: Acerinox 135
Slide 136: Key drivers: trade barriers
STAINLESS STEEL MARKET UPDATE KEY DRIVERS: TRADE BARRIERS MAIN TRADE MEASURES FOR STAINLESS STEEL IN 2018 Canada EU28 China CN IN S. Korea japan TW China IN REB United States +id JP Turkey United States REB ES SFG CN TW TW +id REB REB Thailand Taiwan TW ZA KR SFG SFG CN CN KR BE IN ADTW S232 JP JP V
Slide 137: Acerinox strategy: growth
STAINLESS STEEL MARKET UPDATE A C E R I N O X S T R AT E G Y: G R O W T H O P T I M I Z I N G C A PA C I T Y U T I L I Z AT I O N M E LT I N G P R O D U C T I O N 2017 SECOND BEST YEAR INCREASE 2017/2009: +39% INCREASE 2017/2009: +62% 2009 2010 2 0 11 2012 2013 2014 2015 2016 2017 COLD ROLLING PRODU
Slide 138: Acerinox strategy: cost control
STAINLESS STEEL MARKET UPDATE A C E R I N O X S T R AT E G Y: C O S T C O N T R O L 2017-2018 EXCELLENCE PLAN V Target : 50 million EUR 5 chapters: Operations, Working Capital, Personnel, Commercial and Supply Chain Performance to June 2018: 57% (29 PERFORMANCE % over the target million EUR) Quarter
Slide 139: Acerinox strategy: investments
STAINLESS STEEL MARKET UPDATE A C E R I N O X S T R AT E G Y: I N V E S T M E N T S Acerinox Europa AP Line NAS BA Line 139
Slide 140: Acerinox strategy: global position
STAINLESS STEEL MARKET UPDATE A C E R I N O X S T R AT E G Y: G L O B A L P O S I T I O N 140
Slide 141: Conclusions
STAINLESS STEEL MARKET UPDATE CONCLUSIONS Stainless steel is an excellent material Investments make the difference Strong demand Competitiveness Acerinox: “GLOCAL” player in the industry Strong balance sheet C L E A R S T R AT E G Y FOR FURTHER IMPROVEMENTS 141
Slide 142: Thank you Q&A
A C E R I N O X C A P I TA L M A R K E T S D AY 2 0 1 8 THANK YOU Q&A
Slide 143: Disclaimer
DISCLAIMER This document may contain forward-looking information and statements about ACERINOX, S.A., its subsidiaries and/or its management. These forward-looking statements include financial projections and estimates and their underlying assumptions, and statements regarding the intent, belief or