Ssab Ab Class A · OMXSTO:SSAB_A
Ssab Ab Class A — Investor Day (October 2012)
49 slides from Ssab Ab Class A's investor day presentation, Oct 4, 2012
Slide 1: SSAB EMEA
SSAB EMEA Melker Jernberg, E.V.P. Head of Business Area SSAB EMEA Capital Markets Day October 4, 2012
Slide 2: EMEA - Current environment
EMEA - Current environment Challenging market outlook Europe tough Karta Limited growth in the Nordics Stronger growth in Eastern Europe (Russia), Middle East and Africa Large potential in upgrading Customer trends Minimum safety stocks Pressure on delivery performance Production capac
Slide 3: Expected development by region in EMEA
Expected development by region in EMEA Million tons Apparent steel consumption, 2008-2013* CAGR, % 2011-13 Forecast +4% October revision 325 333 311 317 expected to less 295 optimistic EU-27 246 +1 +6.2 Other Europe +4.6 C.I.S. +11.5 Africa Middle East +5 2008 2009 2010 2011 2012 2013 CMD, October 4
Slide 4: Mixed situation across segments in EMEA
Mixed situation across segments in EMEA Heavy Transport Mining / Material Handling High degree of uncertainty Mining activity remains on a high level across EMEA Some truck manufacturers have indicated higher demand Current uncertainty expected to hamper new mining projects Tipper producer
Slide 5: EMEA strategic priorities and targets
EMEA strategic priorities and targets Continued ramp-up of QT products Speed up growth in key emerging markets Global leadership in Secure Nordic Home high strength steels Double Hardox Wearparts Market leadership Annual double digit growth in Shape Leading home Leading value market positi
Slide 6: Program to increase flexibility, reduce costs and ensure profitability at lower utilization rate
Program to increase flexibility, reduce costs and ensure profitability at lower utilization rate EMEA Flexibility Increase flexibility Cost reduction of 800 MSEK Improve price & margins Flexibility throughout the Structural changes Increase the speed of value chain: upgrading to profitable R
Slide 7: Break-even at 70% utilization rate
Illustrative Break-even at 70% utilization rate Today Goal 100% ± X% depending on volumes/mix 70% +Y Less cost flexibility −X than market variation Better ability to ramp up and down Base cost cost designed for full utilization Base cost designed for 70% utilization Cost Cost CMD, October 4, 2012 7
Slide 8: Growing the thin quenched business
Growing the thin quenched business QL7 investments up and running Ramp up of business ongoing Positive customer feedback Attractive growth platform for SSAB – Solid margins – Large number of relevant applications, both wear and structural CMD, October 4, 2012 8
Slide 9: Leverage on a leading product range
Leverage on a leading product range Recent investments enable the broadest thickness range in the industry, i.e., 0.7-160 mm in the leading wear resistant steel SSAB covers a large number of customer applications and opens up for using Hardox in new areas Significant upgrading potential for qu
Slide 10: Further strengthen the position in the Nordics
Further strengthen the position in the Nordics Continue cooperation with Tibnor Further build Shape – acquisition of EME Closeness to mills Superior technical knowledge offering Long term commitment to customers on total offering Strong channel partners across the Nordics Strong focus on
Slide 11: Growing presence in key emerging markets
Growing presence in key emerging markets Strong growth in recent years including 2012 Attractive market with relevant segments Russia Strengthen SSAB’s local presence Strong starting point (sub-Sahara) South Africa – Value added service center with own stock – Local resources with long exper
Slide 12: Enhanced product and reduced costs – BS-Logistics
Enhanced product and reduced costs – BS-Logistics Customer challenge To reduce weight of their truck To improve lifetime of built on container To increase loading volume To ensure cost efficient production Solution Upgraded design with support from SSAB Leverage on SSAB’s high strength s
Slide 13: Creating value for Customer’s customer – ILAB
Creating value for Customer’s customer – ILAB Customer challenge To reduce weight of the containers, hence improve payload for their customers Not compromise on quality or lifetime 2,960 kg Solution Extensive development in cooperation with SSAB Knowledge Service Center Prototype to optimize
Slide 14: Summary
Summary Tough market conditions in EU, opportunities in Eastern Europe and MEA Cost/Flexibility focus both in the short and long term Strong focus on launch of new thin quenched products and increase market shares Keep and strengthen the position in the Nordic home market jointly with Tibnor
Slide 15: SSAB’s vision
SSAB’s vision Together with our customers, SSAB will go further than anyone to realize the full potential of lighter, stronger and more durable steel products CMD, October 4, 2012 15
Slide 16: Let's shape tomorrow
LET'S SHAPE TOMORROW CMD, October 4, 2012 16 SSAB
Slide 17: SSAB APAC
SSAB APAC Martin Pei, E.V.P. Head of Business Area SSAB APAC Capital Markets Day October 4, 2012
Slide 18: Continued growth in China, but slower than previously expected
Continued growth in China, but slower than previously expected Global slowdown impacting exports Shift towards consumption driven growth Leadership change late 2012 July 2012 - Citi GDP forecast June 2011 forecast 9.2 7.9 8.0 7.6 7.3 7.0 11 12 13 14 15 16 CMD, October 4, 2012 18
Slide 19: Growth opportunities in other APAC countries
Growth opportunities in other APAC countries Australia & Indonesia: positive outlook, despite recent slow down due to falling raw material prices India: struggles with high inflation, but long term growth potential Japan: finally increase in rebuilding activities after tsunami Korea: high de
Slide 20: Most segments stable
Most segments stable Customer trends Indicator • Good demand in tipper industry, Heavy Transport especially off road in China • China: increasing demand • India: market slow Automotive • Korea: stagnation with tough price pressure • Lifting industry improving from weak demand Construction Machinery
Slide 21: Great potential for Q&T products
Great potential for Q&T products - Today Q&T makes up <1% of China total plate market China plate market example 100%=74 MTON Q&T 0.5-1% of total China plate market today Q&T<1% In mature markets the Q&T share of total plate is 5-10% Huge potential through upgrading SSAB playing a leading ro
Slide 22: SSAB APAC - strong base for growth
SSAB APAC - strong base for growth Strong and well-known brands in the market Local presence in most important countries & regions Finishing facility in Kunshan State of the art R&D center Regional hubs and local stocks in most countries CMD, October 4, 2012 22
Slide 23: Finishing facility in Kunshan
Finishing facility in Kunshan - providing customer service in China Shortened lead time Improved delivery performance Reduced inventories levels at customer Ready made articles from local stocks Tailor made articles CMD, October 4, 2012 23
Slide 24: R&D Center in Kunshan
R&D Center in Kunshan - providing support to customers Local and quick support to customers for upgrading projects Integrated part of SSAB Group R&D strategy, extensive cooperation with Knowledge Service Center Training of customers and own personnel CMD, October 4, 2012 24
Slide 25: Leading position in high end market - Prepared for increased competition
Leading position in high end market - Prepared for increased competition Q&T Plate – SSAB the market leader – Stronger service offering – Competition from European & Japanese suppliers – Local Chinese producers competing in lower specifications AHSS – Strong position within high-end niche – Comp
Slide 26: Hardox creates value for Dongfeng
Leverage experience from mature market - Hardox creates value for Dongfeng 32 % lower weight 56 % less cutting 70 % less bends 64 % less welding Lower fuel consumption Increased payload Longer service life CMD, October 4, 2012 26
Slide 27: Hardox creates value for Yunli
Leverage experience from mature market - Hardox creates value for Yunli Lower weight ~50% Increased payload Reduced fuel consumption ~ 40 liters per day Lower maintenance cost Increased service life CMD, October 4, 2012 27
Slide 28: Summary
Summary Great potential for SSAB’s high end products in APAC SSAB has a strong starting position for a significant share of the market SSAB continues to invest in the region to be prepared for increased competition CMD, October 4, 2012 28
Slide 29: Let's shape tomorrow
LET'S SHAPE TOMORROW CMD, October 4, 2012 29 SSAB
Slide 30: SSAB Americas
SSAB Americas Chuck Schmitt, E.V.P. Head of Business Area SSAB Americas Capital Markets Day October 4, 2012
Slide 31: Americas - Current environment
Americas - Current environment US economy fragile - facing headwinds Energy, mining and automotive segments continue at elevated levels over 2011 Latin American economies show some signs of moderating – Investment in the mining, agriculture and infrastructure sectors remains strong – Increasin
Slide 32: Certain market segments favorable despite economic uncertainty
Certain market segments favorable despite economic uncertainty Heavy Transport Mining / Material Handling Railcar build rate remain strong High commodity prices support mainly for tank cars capital investment and equipment demand Barge build rate to remain strong into 2013 Future direction d
Slide 33: SSAB Americas Strategic Objectives
SSAB Americas Strategic Objectives • Introduction of new quenched products • Continued growth of AHSS and QT market share • Expansion of normalized products • Jacobson Index Leader Leadership in Q&T and AHSS • Mining Excellence Centers • Chrome carbide overlay expansion Grow HWP by 190% by 2017 Lead
Slide 34: SSAB Americas Initiatives
SSAB Americas Initiatives Home Market leadership (US and Canada) – Organic growth achieved through production efficiencies and further investment – Remain supplier of choice in North America Expand Branded and High Strength Steel Product Portfolio – Fully commission Mobile operation – Leverage g
Slide 35: Investments - Current
Investments - Current New quench line in Mobile is nearing completion of a very successful commissioning process – Production capacity is ramping up according to plan QL6 Processing Capacity 60 Rated Annual Capacity 50 Volume ( K tons) 40 30 20 10 0 Actual Forecast CMD, October 4, 2012 35
Slide 36: Investments - Future
Investments - Future Expanding normalizing capacity on existing quench line in Mobile – Contractual opportunities for major rail car producers – High demand in tank cars driven by energy markets – Increases long-term flexibility for higher margin products CMD, October 4, 2012 36
Slide 37: Continuing execution of the Latin American strategy
Continuing execution of the Latin American strategy Mexico: Expanding opportunities in automotive and protection steels Colombia: Total Latin America growth: Accelerating growth using global QT plate +61% account coordination AHSS +33% Total +49% Peru: World’s 3rd largest copper and zinc produ
Slide 38: Safer drag racing with Docol
Safer drag racing with Docol Customer challenge The current chassis design uses Cr-Mo heat treated tubes which have inconsistent dimensional tolerances, and a brittle heat-affected zone which can lead to fracture in a crash Solution Introduce SSAB “Docol R” tubes Docol R tubes have been tested
Slide 39: Productivity increases with Hardox
Productivity increases with Hardox Customer challenge Sugar cane disc/knife assembly required frequent replacement – limiting productivity during harvesting The end user (Raízen) had to carry a large inventory of replacement parts Solution Replace the current assembly with Hardox 450 and Hardo
Slide 40: Mobile Track Solutions (MTS)
Mobile Track Solutions (MTS) Undercarriage Roller Frame, Gooseneck and Other Applications Customer challenge Encountering durability issues on an undercarriage roller frame made of mild steel resulting in excessive maintenance downtime Solution Modify workshop practice to form parts from SSAB hi
Slide 41: SSAB Americas Industry Leading Performance
SSAB Americas Industry Leading Performance Shipments volume leader (plate) against largest competitors 2,500 2011 Shipments k tonnes 2,000 1,500 1,000 500 - SSAB Nucor Arcelor Evraz NA AHMSA Essar Jindal Mittal Flat Roll Sources: Company reports and SSAB estimates CMD, October 4, 2012 41
Slide 42: Customer Satisfaction Rating
SSAB Americas Industry Leading Performance Highest customer satisfaction experience allows for higher pricing Jacobson Report - Satisfaction by Attribute (For Top 4 Competitors by Response) Q2 2012 10 9 9 Customer Satisfaction Rating 8 8 7 7 6 6 5 Overall Quality Service On Time Price Outside Sales
Slide 43: Focus on productivity improvements
SSAB Americas Industry Leading Performance Focus on productivity improvements – USD 60 million in savings since 2010 35 Six Sigma program 30 25 20 USD Millions 15 10 5 0 2010 2011 H1 2012 Annualized CMD, October 4, 2012 43
Slide 44: Safety performance
SSAB Americas Industry Leading Performance Safety performance 2012 TOTAL RECORDABLE CASE RATE COMPARISON (thru August 2012) SSAB Mobile-Alabama SSAB Americas (Steel Mills) SSAB Montpelier-Iowa Totals Source: Trade Association Data 0 2 4 6 8 10 12 Number of Recordable Cases per 200,000 hours worked C
Slide 45: Flexible production model provides low cost/high EBIT results
SSAB Americas Industry Leading Performance Flexible production model provides low cost/high EBIT results 140 120 100 SSAB Americas USD EBIT/Tonne 80 Nucor 60 Arcelor Mittal Flat Carbon Americas 40 20 0 Q3 2011 Q4 2011 Q1 2012 Q2 2012 SSAB Americas EBIT as shown excludes Purchase Price Amortization r
Slide 46: Summary
Summary Near term uncertainty in markets – Market leadership and low cost position provide growth opportunities in targeted segments Current and future investments allow continued movement up the value chain – Well positioned with QT capacity ramping up – Expansion of value added services and te
Slide 47: Let's shape tomorrow
LET'S SHAPE TOMORROW CMD, October 4, 2012 47 SSAB
Slide 48: Martin Lindqvist, President & CEO
Martin Lindqvist, President & CEO Capital Markets Day October 4, 2012
Slide 49: Let's shape tomorrow
LET'S SHAPE TOMORROW CMD, October 4, 2012 49 SSAB