Aperam S.A. · EURONEXT:APAM
Aperam — Investor Day (November 2010)
43 slides from Aperam's investor day presentation, Nov 19, 2010
Slide 1: Stainless steel segment – Positioning and Strategy
Stainless steel segment – Positioning and Strategy Bernard Fontana – Chief Executive Officer Julien Onillon – Chief Financial Officer & Strategy Johanna Van Sevenant – Sustainability, Human Resources & Communication 19 November 2010
Slide 2: Forward-looking Statements
Forward-looking Statements This document may contain forward-looking information and statements about ArcelorMittal and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respec
Slide 3: Content
Content • Introduction to the management team • Overview • Markets and products • Unique strengths • Challenges and opportunities in Stainless Steel Stainless • Challenges and opportunities in Electrical Steel, Alloys and specialities • Strategic orientation and actions • Sustainability and people d
Slide 4: Introduction to the management team
Introduction to the management team 3
Slide 5: Team and organisation
Team and organisation Bernard FONTANA CEO Paulo Jean-Paul Timoteo DI Julien Julien Johanna VAN MAGALHAES ROUFFIAC MAULO BURDEAU ONILLON SEVENANT Stainless & Stainless & Services & Alloys & CFO & Sustainability, Electrical steel Electrical steel Solutions Specialities Strategy HR & South America Euro
Slide 6: New organization by core competencies
New organization by core competencies AMIB AMSE Alloys & Specialities Biomass & Upstream Bioenergia Strategic participation GMO Stainless & Industry Industry Industry Electrical Steel Distribution Distribution Services Distribution & Tubes Wire drawing Tubes Solutions Precision Components 5
Slide 7: Overview
=~ ArcelorMittal Overview
Slide 8: Stainless segment Snapshot
Stainless segment Snapshot – A global player in stainless steel Shipments in million of tonnes** 3 • 2.5mt of Flat stainless steel capacity in Europe and Brazil (27% of segment turnover in 2009) 2.13 1.91 1.94 1.96 2 1.45 – Leading position in high valued added niches, alloys and specialities 1 • St
Slide 9: A global player
A global player Stainless steel shipments and market share in 2009 Europe North America and CIS 22% 43 kT 743 kT 3.6% 0.5% Asia & Pacific 46 kT South America 41 kT 65% 6.5% Middle-East & Africa 228 kT PLANTS SERVICE CENTERS % Stainless market share FOREST 8 Source: ArcelorMittal SALES AGENCIES
Slide 10: Markets and products
=~ ArcelorMittal Markets and products
Slide 11: Stainless steel represents only 2% of total world steel market in volume
Stainless steel represents only 2% of total world steel market in volume Stainless Steel consumption by end user* Main end-user applications Energy & Others Chemicals 3% Industry 14% Catering & Appliance 34% General Industry 20% Automotive & Building & Transportation Construction 12% 17% Demand for
Slide 12: Demand for stainless steel comes later in the economic development cycle
Demand for stainless steel comes later in the economic development cycle Carbon Steel consumption per capita* (kg/year) Stainless Steel consumption per capita* (kg/year) 500 12 10 400 30% 8 90% 300 x6 6 x8 200 4 100 2 0 0 Emerging world China Developed world Emerging world China Developed world A st
Slide 13: Electrical steel products are driven by energy oriented applications
Electrical steel products are driven by energy oriented applications Grain Oriented (GO) High grades • Higher efficiency equipment • GO is used in the construction of static electrical machines / transformers • Lower Energy consumption • Amorphous alloy is the only material that • Lower CO2 emission
Slide 14: Nickel Alloys applications and products
Nickel Alloys applications and products Magnetic and controlled expansion alloys Oil & Gas Aerospace • FeNi alloys (Ni>25%) and FeNiCo exhibit unique properties in terms of coefficient of thermal expansion and magnetic properties Superalloys, corrosion alloys • High Ni-based alloys, enrighed with Cr
Slide 15: Unique strengths
=~ ArcelorMittal Unique strengths
Slide 16: What makes Stainless segment unique
What makes Stainless segment unique – Leading global stainless and specialty steel producer • Leading player in stainless steel in Europe and Latam and in electrical steel and special alloys niches • Provides exposure to both high end mature markets and emerging markets growth – Long-term growth pot
Slide 17: Market leader in growing Brazil
Market leader in growing Brazil Brazilian Stainless Steel demand estimates (000t) Brazilian Electrical Steel demand estimates (000t) 600 450 500 400 350 400 78% market x2 300 76% market +90% share share 250 300 200 200 150 100 100 50 0 0 2005 2006 2007 2008 2009 2010E 2011E 2012E 2013E 2014E 2015E 2
Slide 18: High quality and cost effective European operations
High quality and cost effective European operations European steelmaking restructuring realised in Black coil (HRC) European cost curve (base 100) the mid-2000’s Closure Greenfield/Brownfield Genk brownfield Isbergues Genk Châtelet Greenfield L’Ardoise Competitor 1 Chatelet Competitor 2 Genk Competi
Slide 19: A strong continuous improvement culture
A strong continuous improvement culture Steelshop Hot rolling Cold rolling Service Isbergues Chatelet 0.35Mt 1.0Mt Genk Steel Service Centers Chatelet Stainless flat Transformation 0.60Mt 3.4Mt Direct sales Genk 1.1Mt Clients Gueugnon 0.40Mt Timoteo Electrical 0.17Mt Electrical flat Steel Service Ce
Slide 20: Strong R&D capabilities catering to high-end application and specialities
Strong R&D capabilities catering to high-end application and specialities Commodity and speciality price (USD/t) Sales 2009 breakdown by products 17,000 Nickel Alloys & Specialities Surcharge 3,000 9% Base price 2,500 Electrical Steel 11% 2,000 1,500 1,000 500 0 Regular High Base Base Regular High N
Slide 21: Close to customer through a highly integrated distribution network
Close to customer through a highly integrated distribution network Sales, Distribution and Steel Services Centers network Strong relationship with global and long term customers, including Whirlpool, Bosch Siemens, Indesit… Sales subsidiaries and representative offices Sales agencies Steel Service C
Slide 22: A unique capability to produce stainless and specialities from Biomass
A unique capability to produce stainless and specialities from Biomass – Strategic participation of 36% in Bioenergia which produce Equivalent Coke and Charcoal cost in 2009 (USD/t)* biomass (charcoal) from eucalyptus - Planting, maintenance and cutting at 7 years old – 126,000 hectares on which Bio
Slide 23: Strong financials through the cycle
Strong financials through the cycle EBIT per tonne (in USD) Operating Working Capital in % of sales 1500 60% 1000 50% 500 40% 0 30% -500 20% -1000 10% -1500 0% 07 07 07 07 08 08 08 08 09 09 09 09 10 10 07 07 07 07 08 08 08 08 09 09 09 09 10 10 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 1Q 2Q 3Q 4Q 1Q
Slide 24: Challenges and opportunities in Stainless Steel
Challenges and opportunities in Stainless Steel 23
Slide 25: Global stainless steel demand has recovered from 2009
Global stainless steel demand has recovered from 2009 Stainless steel market structure (mt) Global Flat Stainless Steel Demand* (mt) 30 30 25 +8% per 25 China year 37% 20 20 15 26% 15 37% Emerging World 31% 10 13% 32% 10 29% 25% 40% 5 5 Developed World 62% 42% 32% 34% - 0 1998 2008 2009 2014E 2005 2
Slide 26: European demand expected to come back to pre-crisis level in 2013/2014
European demand expected to come back to pre-crisis level in 2013/2014 Demand for stainless steel flat products in western Eastern European HR & CR Demand (mt) Europe* (mt) 6,000 600 6% per year 5,000 500 4,000 400 3,000 300 2,000 200 1,000 100 0 0 9 7 98 9 9 00 01 0 2 03 0 4 0 5 0 6 07 0 8 0 9 0E 1
Slide 27: South America presents important growth potential
South America presents important growth potential Stainless steel consumption per capita in 2008 Stainless steel flat products demand in South America (kg/year) (kt) 6 800 Rest of South America 700 Brazil 5 600 4 500 3 400 300 2 200 1 100 0 0 Other South India Brazil China US 2003 2004 2005 2006 200
Slide 28: Despite increased demand, structural overcapacity remains an issue
Despite increased demand, structural overcapacity remains an issue Worldwide Excess Capacity* (mt) Global Utilization Rates* (mt) 12.0 90% 10.0 85% 8.0 80% 75% 6.0 70% 4.0 65% 60% 2.0 55% 0.0 50% 2007 2008 2009 2010 2011 2012 2013 2014 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 China Res
Slide 29: Challenges and opportunities in Electrical Steel, Alloys and specialities
Challenges and opportunities in Electrical Steel, Alloys and specialities 28
Slide 30: Electrical steel market growth expected to come mainly from China
Electrical steel market growth expected to come mainly from China Global GO Demand (mt) Global NGO Demand (mt) 3.0 14 +10% +12% per year 12 per year 2.5 10 2.0 8 1.5 6 1.0 4 0.5 2 - - 04 05 06 07 08 09 E E E E E 04 05 06 7 08 09 E E E 20 20 20 20 20 20 10 11 12 13 14 0 10 11 E 12 13 E 14 20 20 20 20
Slide 31: Current overcapacity due to crisis expected to reduce progressively
Current overcapacity due to crisis expected to reduce progressively Global capacity and demand for GO (mt) Global capacity and demand for NGO (mt) 3.5 Demand 16 Demand Capacity +18% 14 3.0 Capacity 12 2.5 10 2.0 +56% +40% 8 1.5 6 1.0 4 0.5 2 0.0 0 2008 2009 2015E 2008 2009 2015E Utilization Utilizat
Slide 32: Nickel alloys markets expected to recover in line with core end-use sectors
Nickel alloys markets expected to recover in line with core end-use sectors Ni use in Nickel Alloys End-use sectors: CAGR 3-4% 150 175 140 CAGR +8.5% +50% by 2015 Power 150 130 generation 120 Base: 2008 = 100% Oil & Gas 125 110 Process 100 industries 100 90 Elec. Appliances 80 75 70 Aerospace 50 60
Slide 33: Strategic orientation and actions
Strategic orientation and actions 32
Slide 34: Value creation drivers
Value creation drivers Biomass & Stainless & Nickel Alloys & Services & Upstream Electrical Steel Specialities Solutions Post-crisis rebound and recovery Growth Emerging market Growth Competitive and innovative products and applications Efficiency Management gains & operational excellence Vertical i
Slide 35: Capturing post-crisis rebound and recovery
Capturing post-crisis rebound and recovery Stainless steel shipments in Europe (000’t) Nickel Alloys & Specialties shipments (000’t) 1400 45 1300 40 1200 35 1100 30 1000 25 900 800 20 2007 2008 2009 2010E 2011E 2012E 2013E 2014E 2015E 2007 2008 2009 2010E 2011E 2012E 2013E 2014E 2015E Maintaining ma
Slide 36: Capturing South American growth in Electrical steel
Capturing South American growth in Electrical steel Global capacity and demand for GO Global capacity and demand for NGO in South America (mt) in South America (mt) 0.15 0.30 0.25 0.10 0.20 0.15 0.05 0.10 0.05 0.00 0.00 2008 2009 2015E 2008 2009 2015E Project under review: capacity expansion by 180,
Slide 37: Management gains and operational excellence
Management gains and operational excellence Total annual management gains plan (USD million)* Sustainable management gains progress (USD million annualized)* Target by end of 2010 100 150 90 80 Target by end of 2009 100 70 60 50 50 40 30 20 0 2010 2011 2012 2013 2014 2015 Q4 2008 Q1 2009 Q2 2009 Q3
Slide 38: Other opportunities and potential
Other opportunities and potential Asian… …and upstream opportunities • Develop further Biomass/charcoal opportunities • Strategy to actively look at upstream and mining Developed world opportunities (Cr, Ni, …) directly or in partnership • Upstream integration aiming to secure strategic raw material
Slide 39: Sustainability and people development
Sustainability and people development 38
Slide 40: Strong convictions on people and sustainability support the core values
Strong convictions on people and sustainability support the core values – Greater accountability creates surplus of motivation – Skilled and experienced workforce drives performance and results People – Leadership fully engaged in performance management processes – Initiatives to anticipate and flex
Slide 41: People Development
People Development Understanding of Motivation to make Top Priority on segment/function objectives company succeed People Development Segment Leadership Survey : 16% 16% 68% favourable 51% 49% 84% 84% Target improvement to 75% Good results in performance management and motivation to make the segem
Slide 42: Environmentally friendly products and solutions
Environmentally friendly products and solutions From raw materials and energy… …to products and solutions environmentally friendly New products for CO2 free sustainable biomass low CO2 and Energy efficient Recycling and Low emission supplier production processes energy durability conservation CO2 po
Slide 43: ArcelorMittal
=~ ArcelorMittal
ArcelorMittal Stainless & Electrical Steel (Aperam) — Investor Day (November 2010) on 6ix