Bluescope Steel Limited · ASX:BSL
Bluescope Steel — Investor Presentation (June 2017)
45 slides from Bluescope Steel's investor presentation, Jun 9, 2017
Slide 1: BlueScope Buildings North America Investor Visit Presentation
For personal use only BlueScope Buildings North America Investor Visit Presentation Dan Kumm, President June 2017 BlueScope Steel Limited. ASX Code: BSL
Slide 2: Important Notice
Important Notice For personal use only THIS PRESENTATION IS NOT AND DOES NOT FORM PART OF ANY OFFER, INVITATION OR RECOMMENDATION IN RESPECT OF SECURITIES. ANY DECISION TO BUY OR SELL BLUESCOPE STEEL LIMITED SECURITIES OR OTHER PRODUCTS SHOULD BE MADE ONLY AFTER SEEKING APPROPRIATE FINANCIAL ADVICE.
Slide 3: Introduction
For personal use only INTRODUCTION Spirit Airlines Maintenance Hangar, Detroit BlueScope Construction
Slide 4: Progress towards our goal of Zero Harm
BlueScope Buildings North America Progress towards our goal of Zero Harm For personal use only Lost time injury frequency rate Medically treated injury frequency rate Medically treated injuries per million man-hours worked Lost time injuries per million man-hours worked 15.0 10.8 8.1 8.2 6.5 5.7 6.0
Slide 5: BlueScope Buildings strategy with BSL strategic framework
BlueScope Buildings strategy with BSL strategic framework For personal use only Grow Deliver Ensure ongoing premium branded steel businesses competitive commodity steel supply financial strength with strong channels to market in our local markets Coated & Painted BlueScope North Star Australia & NZ
Slide 6: BlueScope Buildings segment established to unite Building Solutions businesses
BlueScope Buildings segment has been established to unite BlueScope’s Building Solutions businesses and accelerate growth For personal use only BlueScope Buildings Chief Executive – Pat Finan Buildings North Products & Buildings ASEAN America Buildings China Engineered Building Engineered Building E
Slide 7: A broad portfolio of leading Building Solution brands / products
A broad portfolio of leading Building Solution brands / products For personal use only Buildings ASEAN Buildings North America Product & Buildings China Note – Buildings ASEAN is part of NS BlueScope Coated Products JV value chain 7
Slide 8: Business Overview
For personal use only BUSINESS OVERVIEW Costco – Melbourne, Australia
Slide 9: BlueScope Buildings North America (BBNA) overview
BlueScope Buildings North America (BBNA) overview For personal use only • BBNA designs/manufactures/markets Engineered Building Solutions (EBS) to the low-rise non- residential construction segment • Comprised of the leading engineered building brands and best known builder distribution networks • B
Slide 10: BBNA supply chain / channel to market
For personal use only BBNA supply chain / channel to market Up-stream Mid-stream Down-stream North Supplier BBNA Star Butler Shared Services Butler Platform Builders BSL / Steel- Nippon scape Manufacturing Purchasing Innovation / R&D Engineering VP End Supplier VP System Builders Customer Service Wa
Slide 11: Nearly 1,800 Butler and VP builders across North America
Nearly 1,800 Butler and VP builders across North America For personal use only 24% 11
Slide 12: So what is an engineered building solution (EBS)?
So what is an engineered building solution (EBS)? For personal use only Engineered Building Solution Conventional steel building • Fit-for-purpose structural system • Conventional design using leveraging tapered frame concept standard hot rolled sections • Design each structural member to • Standard
Slide 13: Mission / vision of BlueScope Buildings North America
Mission / vision of BlueScope Buildings North America For personal use only BBNA is a solution provider proficient in both engineered building solutions and conventional steel, providing hybrid solutions that leverage the best of both worlds. Mission: To grow our industry leading position as a solut
Slide 14: BlueScope Buildings North America has been the 1st to offer
BlueScope Buildings North America has been the 1st to offer: For personal use only ‘Z’ Shaped Computer Self-curbing day Purlins designed rigid lighting system frame structure Pre-Punched structural and G30 Acrylic panel as standard Long spanning secondary Sky-Web fall structural truss using tension
Slide 15: BlueScope Construction history
BlueScope Construction history For personal use only Manufacturing Plants • Established in 1970 • In-house construction capability • Account for 19% of BBNA Revenue Distribution Centers & Shipping Hubs • On track for best fiscal year on record • National footprint – licensed in all 50 states • Capab
Slide 16: BlueScope Construction long history of conquering key corporate account challenges
BlueScope Construction has a long history of conquering challenges of key corporate accounts FedEx Ground Ace Hardware Retail Support Centers For personal use only Over 100 projects since 1995 6.5 million square feet $200 million in contracts 16
Slide 17: BlueScope Buildings North America management team
BlueScope Buildings North America management team For personal use only Dan Kumm President, BlueScope Buildings NA Peta Renkin VP Human Resources Chuck Haslebacher President, Varco Pruden Ralph Gaitley VP Operations and Tom Gilligan Supply Chain President, Butler Manufacturing Ron Miller Matt Thread
Slide 18: Integrated manufacturing platform
Integrated manufacturing platform For personal use only Evansville Annville St Joseph Visalia Jackson Laurinburg Monterrey (Mexico) Rainsville Total Capacity: approx. 320 metric kt Manufacturing facility 18
Slide 19: World-class facilities: Visalia, CA
World-class facilities: Visalia, CA For personal use only 19
Slide 20: World-class facilities: St Joseph, Missouri
World-class facilities: St Joseph, Missouri For personal use only 20
Slide 21: U.S. Engineered Buildings Demand
For personal use only U.S. ENGINEERED BUILDINGS DEMAND SVSU Ryder Center –University Center, MI VP Builder: a.j. Veneklasen, Inc.
Slide 22: Ascent Construction Corporate Office Building, Farmington, UT
For personal use only Ascent Construction Corporate Office Building.– Farmington, UT VP Builder: Ascent Construction 22
Slide 23: Orion Jet Center, Opa-Locka, FL
For personal use only Orion Jet Center – Opa-Locka, FL VP Builder: Lemartec 23
Slide 24: Barley John's Brewery, New Richmond, WI
For personal use only Barley John’s Brewery – New Richmond, WI 24 Butler Builder: Derrick Building Solutions, L.L.C.
Slide 25: Twin Rivers Charter School, Yuba City, CA
For personal use only Twin Rivers Charter School – Yuba City, CA 25 Butler Builder: Hilbers, Inc.
Slide 26: BBNA customer base industry segmentation
BlueScope Buildings North America customer base industry segmentation For personal use only 24% Commercial (retail stores 21% and small office) 65% Industrial (manufacturing and warehousing) 14% Community (GSA, churches and schools) Note: Based on CY2015 shipments 26
Slide 27: EBS makes up 12% of low-rise non-residential steel structures
EBS makes up 12% of low-rise non-residential steel structures, which in turn approximates 15% total low-rise non-residential construction spending For personal use only DEFINING EBS DEMAND Low-rise non-residential EBS Steel structures construction spending* (Defined as MBMA) Size $143b $21.5b $2.6b
Slide 28: BBNA competes with Nucor, NCI and numerous small players
BBNA competes vigorously with Nucor, NCI and numerous small players, but also is expanding into conventional metal building construction For personal use only MBMA # of Company Brands Plants EBS (defined as MBMA) BBNA Butler, VP 8 BBNA Nucor Nucor, American, Gulf 11 75% States, Kirby, CBC 25% NCI Ro
Slide 29: North America EBS indicators
North America EBS indicators U.S GDP Annual Growth Rate Architectural Billings Index For personal use only 70 65 Expansion 4 60 2 55 50 0 45 -2 40 35 Contraction -4 30 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16
Slide 30: BBNA has opportunity in conventional steel structures
BBNA has opportunity in conventional steel structures not targeted until recently For personal use only Low-rise non-residential EBS Steel structures construction spending* (Defined as MBMA) Size $143b $21.5b $2.6b MEP Steel 30% structures EBS BBNA 15% 12% 75% Finishes 15% 25% 87% 5% 15% Erection 10
Slide 31: Initiatives to better serve Builder Network and increase addressable market
Initiatives to better serve Builder Network and increase addressable market. Focus on innovation and cost control while keeping employees safe For personal use only Safety People Cost Builder Control Channel Conventional 31
Slide 32: Profit growth mainly driven by cost reductions
In addition to partial volume recovery post global financial crises, profit growth mainly driven by cost reductions For personal use only BBNA underlying EBIT ($M) 43 40 Results 22 14 through 1H 19 43 5 5 27 15 21 4 9 -6 -3 2H -18 -2 1H -15 -33 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 1H FY2017 BBN
Slide 33: Productivity and cost savings measures targeting $30M savings by FY2018
Productivity and cost savings measures targeting $30M savings by FY2018 over FY2016 For personal use only Productivity and cost savings measures are delivering with a savings run-rate of $22M pa: • Business restructuring and headcount reductions, including early retirement offering • Engineering loc
Slide 34: Trading conditions update
Trading conditions update For personal use only • 2H earnings will be lower than 1H due to typical seasonality • Cost savings on track delivering earnings growth, on flat volumes 34
Slide 35: Innovation and Growth
For personal use only INNOVATION AND GROWTH TRUSS PURLINXT Pilot Job Oklahoma City, Oklahoma
Slide 36: BBNA targets 25% of annual revenue from new innovation
BBNA targets 25% of annual revenue associated with new innovation released in last five years For personal use only Product Innovation Business Services & Model Tools 36
Slide 37: Grandview Research Center overview
Grandview Research Center overview For personal use only • Regulatory & Compliance Testing • New product development • 60 worldwide patents • Raw material testing & quality assurance • Led by industry experts Advanced thermal testing capability creates a competitive advantage for customers: • More c
Slide 38: Our competitive advantages: TBS & Thermalift Insulation System
Our competitive advantages New TBS™ & Thermalift™ Insulation System For personal use only • Achieves highly energy efficient roof insulation system • U-Factors as low as 0.029 (Effective R-34) using cost efficient fiberglass • Initial customer acceptance is very strong 38
Slide 39: Our competitive advantages: TRUSS PURLINXT
Our competitive advantages TRUSS PURLINXT Product Features For personal use only • Lighter and more efficient than bar joists • Significant load/span capability • Less field labor to install than bar joists • Superior appearance / finish = no field painting Piece count / year 122,558 94,457 55,583 2
Slide 40: nVision Engineering System across product workflow and order cycle
Technology – the nVision Engineering System is leveraged throughout the product workflow and order cycle For personal use only • Sales Tool – Fast BIM (Building Information Model) modelling – Power in the hands of our Builders • Quoting Tool – Integrated with auto-design engine • Automated Design To
Slide 41: Introduction to St Joseph Plant
For personal use only INTRODUCTION TO ST JOSEPH PLANT TRUSS PURLINXT fixture – St. Joseph, MO
Slide 42: St Joseph plant overview
St Joseph plant overview For personal use only • Opened in 1981 • 194 manufacturing employees • Over 138k sq. ft. of manufacturing space 42
Slide 43: St Joseph facility
St Joseph facility For personal use only Example of expanding our addressable market by Example of expanding our addressable market and entering the conventional steel space market share through industry-leading innovation 43
Slide 44: Questions?
For personal use only QUESTIONS? Sanford Health Fieldhouse – Sioux Falls, SD Butler Builder: Fiegen Construction Company
Slide 45: BlueScope Buildings North America Investor Visit Presentation
For personal use only BlueScope Buildings North America Investor Visit Presentation Dan Kumm, President June 2017 BlueScope Steel Limited. ASX Code: BSL