Philippe Varin, Chief Executive London, 28 November 2005 · 2015. 12. 28. · Sources:...

0

The future of European steel

Steel Success Strategies Europe III Philippe Varin, Chief Executive

London, 28 November 2005

1

AgendaThe future of European Steel

• Market environment• Global• Europe

• The Corus Way

2

(Average, year on year)

Source: IISI

Market environment – Global Global steel demand growth

2.8%

5.8%

3.8%

'95-00 '00-05 '05-10

3

Cen & S Am

China

CIS

Other Asia

RoW

NAFTA

EU25

Japan

6.1%

5.6%

4.9%

3.9%

3.9%

1.9%

1.7%

0.3%

* Bars proportional to forecast 2010 demand, mtSource: IISI, Government of India, Corus

(Year-on-year demand growth

2005-10e)

India 6.9%

Market environment – Global Demand growth by region

4

Market environment – Global Global demand & supply balance

500

600

700

800

900

1000

1100

1200

1300

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

60

80

100

120

140

160

180

200

220

240

260

Source: IISI, Corus

Surplus capacity (RHS, mt)Production (LHS, mt)Capacity (LHS, mt)

Surplus capacity (RHS, mt)Production (LHS, mt)Capacity (LHS, mt)

5

100

200

300

400

500

'00 '01 '02 '03 '04 '05 YTD

Source: Metal Bulletin

($/t, indexed)

ScrapIron OreCoal

Coke

Market environment – Global Raw material prices

6Source: Deutsche Bank

Steel

Coal

GoldZinc

Alumina

Nickel

Iron Ore

Diamonds

Aluminium

0%

10%

20%

30%

0 5 10 15 20 25

Number of companies producing >40% of total global production

RO

CE

2000

-03

Market environment – Global Impact of consolidation

7

AgendaThe future of European Steel

• Market environment• Global• Europe

• The Corus Way

8* All forecast average annual growth, Construction 2005-08, Automotive EU25 2004-10Sources: Euroconstruct, JD Power, IISI, Corus

Automotive

Market environment – EuropeEU growth segments

EU25 exterior body steels

EU25 high strength steels

Construction

UK construction

market

UK public sector building

market

2.0%

6.1%

2.5%

4.3%

6.5%

1.7%

EU25 building envelope

9

Crude steel production(% change on previous year)

Market environment – Europe European producer response

Source: IISI

World including China

EU25

-10%

-5%

0%

5%

10%

Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05

10* Tata, SAIL and Jindal onlySources: WSD

($/t, ex works, 2005)

100 96 95

79 7870

BrazilCISNorth America

JapanEU15 India*

Market environment – Europe Regional slab production costs

11

AgendaThe future of European Steel

• Market environment• Global• Europe

• The Corus Way

12

Teesside

Scunthorpe

Rotherham

Stocksbridge

Port Talbot

Restoring SuccessUK restructuring

Developed

Steelmaking closed or activities downsized

Ring-fenced

12

• Focus on 3 steel making sites

• £160m capital investment

• EBITDA improvement: £120mpa

Savings starting to come through

UK liquid steel production reduced by 17% to 10.3mt (excluding Teesside)

13

Restoring SuccessSafety, Service…

7.5

3.8

2.6 74%

79%

85%

Safety(Lost time injury frequency, per million hours)

Service(On time in full deliveries)

2003 2004 H1 05 2003 2004 H1 05

14

Restoring Success…and Savings

Annualised exit rate benefits

£m

£52m

£220m

£335m

£480m

£680m

H2 2003 H1 2004 H2 2004 H1 2005 Target 06

15

The Corus WayBeyond Restoring Success

Restoring Success The Corus Way

TheCorus Way

Restoring Success

Best supplier tothe best customers

World Classprocesses

Selective growth

Passionate people

Safety

Service

Savings

Restoring Success The Corus Way

TheCorus Way

Restoring Success

TheCorus Way

Restoring Success

Best supplier tothe best customers

World Classprocesses

Selective growth

Passionate people

Best supplier tothe best customers

World Classprocesses

Selective growth

Passionate peoplePassionate people

Safety

Service

Savings

16

Bi-steel lift shaft Prisma® Organic coated steel for building envelope

120m rail Heathrow T5, Structural Hollow Sections

The Corus Way‘Best to best’: Construction

17

The Corus Way‘Best to best’: Automotive

Premium quality rod

for tyre cordYmagine for seating, pedal and

steering parts

Advanced galvanised steels for outer body panels

18

The Corus Way‘Best to best’: Aerospace

19

The Corus WayWorld Class processes

• Providing the necessary skills.

• Sharing and learning across our company and adopting best practice.

• Empowering our people to perform

Embedding Continuous Improvement in our processes

Passionate people

20

The future of European Steel

Global environment

• Robust demand

• Supply side challenges

Success for European players

• Value added rather than volume

• Relentless focus on cost competitiveness