Ati Inc. · NYSE:ATI
Ati — Allegheny Technologies — Bear Stearns 2nd Annual Commodity and Capital Goods Conference (November 2006)
26 slides from Ati's conference presentation, Nov 29, 2006
Slide 1: Bear Stearns 2nd Annual Commodity and Capital Goods Conference
L. Patrick Hassey Chairman, President & Chief Executive Officer November 29, 2006 Bear Stearns 2nd Annual Commodity and Capital Goods Conference
Slide 2: Forward-looking statements
This presentation contains forward-looking statements. Actual results may differ materially from results anticipated in the forward-looking statements. These and additional risk factors are described from time to time in the Company's filings with the Securities and Exchange Commission, including it
Slide 3: Q3 2006 performance: what is driving performance and growth
Q3 2006 performance High Performance Metals segment Segment operating profit: 38% of sales Flat-Rolled Products segment Segment operating profit: 14.5% of sales Capitalized on our industry consolidation Organized into 5 business units focused on global markets Engineered Products segment Segment ope
Slide 4: What is Driving Performance and Growth?
Long-term strong demand from aerospace and defense market Increasing demand from markets that are vital to building and rebuilding the global infrastructure What is Driving Performance and Growth?
Slide 5: Building the World's Best Specialty Metals Company
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr East 21 20 12 6 6 4 14 10 4 3 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 Building the World's Best Specialty Metals Company(tm) Titanium and Titanium Alloys 21% Nickel-Based Alloys and Specialty Alloys 20% Precision and Engineered Strip 12% Stainless Plate 4% Gr
Slide 6: 2006 Market Outlook - Major Markets
2006 Market Outlook - Major Markets Aerospace and Defense 30% Aerospace robust; Defense strong Chemical Process Industry/Oil & Gas 18% CPI strong in Asia; Oil & Gas strong: down hole, offshore, ethanol, and LNG Electrical Energy 11% Coal (FGD) and wind energy strong; transformer very strong; natural
Slide 7: Aerospace and Defense
Aerospace and Defense 30% of Q3 YTD 2006 Sales A world leader in the production of premium titanium alloys, nickel- and cobalt- based alloys and superalloys, and vacuum-melted specialty alloys for commercial and military jet engines - OEM and spare parts Titanium alloys, vacuum-melted specialty allo
Slide 8: Jet Engines & Aero-derivative Gas Turbines
Jet Engines & Aero-derivative Gas Turbines Blades and Disc Jet Engine Discs RR Trent Engines Cooled Engine Vane Jet Engine Rings Engine Blades & Vanes EJ200 Blisk
Slide 9: Titanium Consumption in Jet Engines
Titanium Consumption in Jet Engines Applications: Fan & compressor components: cases, disc, blades & vanes Index of Ti Consumption in Jet Engines Not Including Spares Primary Sources: Airline Monitor, Forecast International History Forecast 2006 consumption on track to exceed previous cyclical peak
Slide 10: Titanium in Airframe Applications
Titanium in Airframe Applications Boeing/ATI Community Awareness Event November 14, 2006 November 2006
Slide 11: Titanium for the Dreamliner
Titanium for the 787 Dreamliner Boeing/ATI Community Awareness Event November 14, 2006 November 2006
Slide 12: Commercial & Military Aircraft Market
Market Drivers Air travel is robust, record load factors Demand for new, fuel efficient aircraft Low cost & Int'l airlines profitable, growing 787 scheduled for 2008 A380 delayed Military & regional jet deliveries steady Commercial & Military Aircraft Market Commercial & Military Jet Aircraft Build
Slide 13: World Titanium Industry - All Markets
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Titanium Mill Shipments 155 156 139 157 179 146 151 189 219 234 264 288 303 312 335 339 385 408 423 Allvac Core Markets 114 130 140 164 181 187 189 207 209 252 274 288 Allvac 23 18 17 21 18 14 15 23 27 32
Slide 14: Strategic Investments - So Far
Advantage is our installed base Approved Investment Expansion of Titanium Capabilities Phase I $100 million Expansion of Titanium Capabilities Phase II $25 million Expansion of Titanium Capabilities Phase III $25 million Expansion of Titanium Capabilities Phase IV $325 million Expansion of Nickel-ba
Slide 15: Titanium Products Processing
Titanium Products Processing VAR Press GFM Condition Rolling Condition Forged Billet Rolled Bar Long Products EB PAM Sponge EB VAR VAR Flat-Rolled Products Plate and Sheet
Slide 16: Albany, OR Titanium Sponge Facility
16 Albany, OR Titanium Sponge Facility Phase I complete Producing at 8 million pound annual rate Phase II Full production expected first half 2007 at 4 million pound annual rate Phase III Full production expected second half 2007 at 4 million pound annual rate Control Room Inspection 16 Million Poun
Slide 17: Rowley, Utah Titanium Sponge Facility
Rowley Salt Lake City Rowley, Utah Titanium Sponge Facility
Slide 18: Rowley, UT Update
Cost Estimate: Approximately $325 million Capacity: 24 million pounds Timeframe: Conceptual design: Complete Detail design: Underway Start up plan: Late 2008 Full production: Mid 2009 Rowley, UT Update Albany plus Rowley to give ATI expected internal annual sponge capacity of 40 million pounds In ad
Slide 19: Titanium Capacity Expansion
A third PAM furnace (plasma arc melt) for premium applications - Bakers, NC Increase in melt/remelt capacity Install new VAR furnaces (vacuum arc remelt) 3 in Bakers, NC 2 in Albany, OR Expand EB melt (electron beam) in Richland, WA 25% increase in high-value plate products capacity Titanium Capacit
Slide 20: Bakers, NC
Bakers, NC November 10, 2006 PAM III 2 VARs
Slide 21: Nickel & Specialty Alloy Capacity Expansion
20% increase in premium-melt capacity Upgrade and expand VIM furnaces (vacuum induction melt) - Monroe, NC and Lockport, NY Install two ESR (electro slag remelt furnaces) Latrobe, PA Install three VAR (vacuum arc remelt furnaces) Lockport, NY - 2 units Monroe, NC - 1 Nickel & Specialty Alloy Capacit
Slide 22: Nickel & Specialty Alloy Capacity Expansion
Nickel & Specialty Alloy Capacity Expansion ESRs at Latrobe, PA VARs at Lockport, NY
Slide 23: Long-term Contracts
We intend to secure long-term agreements to load our new titanium and nickel-based superalloy capacity using our normal 85% contract to 15% spot business ratio. Boeing Commercial Aerospace LTA - expected total revenue under the agreement at base prices from 2007 through 2015 is approximately $2.5 bi
Slide 24: ATI Metalworking Products APT Project
ATI Metalworking Products APT Project APT (ammonium paratungstate) is the raw material for producing tungsten and tungsten carbide products. We expect to be fully integrated in APT by the end of 2006 and no longer dependent on the high and volatile costs of this raw material from outside suppliers.
Slide 25: In Summary: Q3 YTD 2006 - Profitable Growth
Q3 YTD 2006 - Profitable Growth Growth driven by strong demand from aerospace and defense market and increasing demand from markets vital to building and rebuilding global infrastructure Continuing focus on cost reduction and operating performance improvement through ATI Business System ATI is growi
Slide 26: Allegheny Technologies
Allegheny Technologies Building the World's Best Specialty Metals Company =< November 2006 ES