Bekaert SA · EURONEXT:BEKB
Bekaert SA — Investor Day (December 2004)
10 slides from Bekaert SA's investor day presentation, Dec 17, 2004
Slide 1: Raw materials volatility
1 Raw materials volatility Marc Vandecasteele Group Executive Vice President. IR041217 - p1/77 Analysts’ day – (17 December 2004)
Slide 2: Raw material wire rod
2 Raw material wire rod Bekaert’s most important raw material for advanced wire products and fencing products Bekaert is the largest non-integrated independent consumer of wire rod in the world Bekaert buys from 45 different suppliers Availability of an alternative back-up supplier for every product
Slide 3: World steel production (million tons)
3 World steel production (million tons) 1100 1050 1000 950 900 1097 1066 1053 1041 850 1002 959 800 902 799 789 847 852 777 750 753 750 700 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Crude steel production IR041217 - p3/77 Analysts’ day – (17 December 2004)
Slide 4: World steel prices (MEPS price index)
4 World steel prices (MEPS price index) 200 175 150 125 Jan 1997 = 100 100 75 50 25 0 '02 11 12 '03 2 3 4 5 6 7 8 9 10 11 12 '04 1 2 3 4 5 6 7 8 9 MEPS World Index carbon steel wire rod IR041217 - p4/77 Analysts’ day – (17 December 2004)
Slide 5: World steel production
5 World steel production +/- 1000 million tons About 300 rod mills 20 % 80 % long products flat products Food 10 % 10 % Household others wire Car industry Rails Ship building Building Electrical equipment Tool steels 5% 5% Mesh wire rod Concrete reinforcement Bekaert: 2.4 million tons IR041217 - p5/
Slide 6: Wire rod: the product
6 Wire rod : the product Metal transformation 1 µm Wire rod IR041217 - p6/77 Analysts’ day – (17 December 2004)
Slide 7: Wire rod production process
7 Wire rod production process Integrated steel companies starting from coal and ore Mini-mills starting from scrap IR041217 - p7/77 Analysts’ day – (17 December 2004)
Slide 8: Procurement
8 Procurement Procurement is based on a double track Quality requirements Geographical dimension Fitness for use 250 different qualities with different Local supply close to production grades: - low carbon steel (soft) Development of new local suppliers - high carbon steel (hard) (e.g. Baosteel in C
Slide 9: Raw materials volatility in 2004
9 Raw materials volatility in 2004 Remarkable year in terms of prices and supply • Strong demand in emerging markets (China) • Historically high prices, fluctuating at a high level • Unbalanced situation in demand and supply Bekaert’s key priorities: • Manage volatility of raw materials markets • Su
Slide 10: Challenges
10 Challenges Manage the volatility of the raw materials Continuous development of alternative sources Support new entrances in the wire rod market Co-development IR041217 - p10/77 Analysts’ day – (17 December 2004)