Transcript NUCOR STEEL NUCOR 2009 NUCOR STEEL Speech Outline • Nucor Overview • Steel Industry Outlook 2009-2013 • U.S.

NUCOR STEEL
NUCOR 2009
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NUCOR STEEL
Speech Outline
• Nucor Overview
• Steel Industry Outlook 2009-2013
• U.S. Economy Outlook
NUCOR 2009
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NUCOR STEEL
Nucor Overview
NUCOR 2009
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NUCOR STEEL
Nucor’s History
NUCOR 2009
1905.
Ransom E. Olds, creator of the Oldsmobile, had a dispute with
stockholders and left his own company – Olds Motor Works. He
soon formed Reo Motor Company, which evolved into the
Nuclear Corporation of America and ultimately Nucor.
1962.
Nuclear Corporation acquires Vulcraft, an unassuming producer
of steel joists and girders. To run the newly acquired Vulcraft,
Nuclear Corporation hires Ken Iverson as CEO.
1969.
Nucor’s first mini mill to produce merchant steel products,
located in Darlington, SC, goes into production
1989.
Nucor ushers in a new era of steelmaking as thin-slab
technology goes on-line at the new mini mill in Crawfordsville,
Indiana. It is the first mini mill in the world to make quality flat
rolled steel using the technology. Nucor also established a joint
venture beam facility with Yamato Kogyo of Japan, utilizing near
net shape casting.
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Nucor’s History (continued)
NUCOR 2009
2000.
Dan DiMicco is named the new president and CEO of Nucor.
DiMicco has led the company through an unparalleled period of
growth. The company moved from green field growth to
acquisition based growth.
2002.
Another world first: Nucor’s Castrip micro mill goes on-line in
Crawfordsville, Indiana. This revolutionary technology instantly
transforms molten steel directly into steel sheets in just one
remarkable step. Compared to an integrated steelmaking facility,
the Castrip process consumes about 95% less energy and emits
less than one-tenth the greenhouse gases.
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Nucor Today
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59 Operating Facilities in 18 states, Italy and Trinidad
•
Nucor operates scrap-based steel mills in 19 facilities – producing bars,
beams, sheet, and plate.
•
In 2008, 21,682 employees generated $23.7 billion in sales and 20.9
million tons of steel shipments
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Corporate Staff of 85 Employees
•
Harris Steel Group acquired in March 2007. Operated as a separate,
wholly-owned subsidiary – 46 rebar fabrication facilities between Canada
& United States; 2 cold finished bar, wire & mesh facilities; 11 metal
grating facilities; steel trading and distribution
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DJJ acquired in February 2008. Operates as a separate, wholly-owned
subsidiary – 61 scrap processing facilities; Brokerage and service group,
N.A. scrap processing yards; self-service used auto parts stores
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Largest recycler in the North America
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Largest producer of steel in North America
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Nucor Locations
Nucor Facilities
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•
•
•
•
•
O
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Bar Mill Group (12)
Structural Mills (2)
Sheet Mill Group (4)
Plate Mills (2)
Vulcraft / Verco joist & deck (16)
Cold Finish Group (5)
Building Systems Group (10)
Fastener Division (1)
Nucon (2)
Harris Steel Group Facilities
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 Reinforcing Steel Fabrication Plants
- 23 Canadian Facilities
- 12 U.S. Facilities
• Cold Finished Bar, Wire, Mesh (“IPG”)
- 2 Canadian Facilities
Int’l Offices:
-Novosteel (Trading Co.)
-Monterrey, MX
-Neuchatel, SWZ
• Steel & Aluminum Grating, Expanded Metal (“IPG”)
- 5 Canadian Facilities
- 6 U.S. Facilities
Hawaii
Kapolei
Trinidad
Nu-Iron DRI Facility
North America’s most DIVERSIFIED steel producer
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NUCOR STEEL
Market Leadership in North America
Position
Largest Structural Producer
Largest Bar Producer
Largest Rebar Producer
Largest Cold Finished Bar Producer
Largest Steel Joist Producer
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Largest Steel Deck Producer
Largest Rebar Fabrication, Distribution,
& Placement Company
2nd Largest Plate Producer
3rd Largest Metal Buildings Producer
4th Largest Sheet Producer
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NUCOR STEEL
High Recycled Content
2008 Recycled Steel Content of Nucor Products
(% by Total Weight)
Product Group
Average Recycled Content
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Nucor Bar Products
97.7%
Nucor Beam Products
76.2%
Nucor Plate Products
92.5%
Nucor Sheet Products
70.2%
Total Nucor Steel Combined
89.7%
Vulcraft Structural Products
97.7%
Vulcraft Decking
70.2%
Nucor Building Group
89.7%
NUCON Light Gauge Framing
70.2%
Nucor Fastener Products
97.7%
Nucor Wire Products
97.7%
Nucor Cold Finish
97.7%
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Steel Industry Outlook 2009-2013
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100
80
60
Million Tons
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NUCOR STEEL
US raw steel production vs. capacity
120
20
0
3
01
-2
10 )
20
st
(e
09
20
08
20
07
20
06
20
05
20
04
20
03
20
Capacity
Production
02
20
01
20
00
20
99
19
98
19
97
19
96
19
95
19
94
19
93
19
92
19
91
19
90
19
89
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Source: AISI, First River
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US GDP vs. Steel Demand
1988 to 2008
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Steel Demand
Average Annual Change
6.0%
4.0%
Steel demand rises
when GDP grows >2.5%
2.0%
0.0%
-2.0%
Steel demand falls
when GDP grows <2.5%
-4.0%
-6.0%
0.0%
1.0%
2.0%
Global Insight’s US Real GDP
Percent Change Estimates
2009 – (2.5%)
2010 – 2.0%
2011 – 2.9%
3.0%
4.0%
5.0%
Average Annual GDP Growth
Source: US BEA, AISI, First River
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NUCOR STEEL
NA auto production forecast
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Million Vehicles
16
14.6
13.5
12
12.6
11.9
9.7
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Logic Check:
NA scraps 14 million per year
Imports average 2.5 million
NA must build 11.5 just to stay even
8.0
35%+ drop this year
Average 11.5 2009 to 2013
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1990
1992
1994
1996
1998
2000
2002
NOTE:***Ward’s North America Vehicle Production was: 8.2M Vehicles in 2009
and 9.99M Vehicles in 2010
2004
2006
2008
2010F
2012F
Source: CSM Worldwide (May 2009)
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Non-residential construction forecast
No return to 1990 levels thru 2013
2,500
Top forecast line is FW Dodge
Bottom line is Portland Cement Association
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Million Square Feet
2,000
1,500
1,467
1,505
1,397
1,246 1,100
1,131
1,094
1,032
921
831 826
1,000
500
30%+ drop 2008 to 2010
Average 1,115 2009 to 2013
0
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010F
2012F
Source: First River, FW Dodge and PCA (Spring 2009)
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NUCOR STEEL
US finished steel demand forecast
Weak throughout forecast period
150
Forecast
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Million Tons
125
110
110
100
105
95
Actual ADC
75
85
70
50
35-40% drop this year
Average 90-95 MT 2009-2013
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0
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010F
2012F
Source: CSM, FW Dodge, PCA, WSA, First River
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NUCOR STEEL
Economic Recovery
•Confidence
•Credit
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•Government Action
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NUCOR STEEL
Recession Unemployment
6000
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Change in U.S. jobs (in Thousands)
4000
2000
0
-2000
-4000
-6000
-8000
39
37
35
33
31
29
27
25
23
21
19
17
15
13
11
9
7
5
3
1
Months After Peak Job Month
Current Recession
2001 Recession
1990 Recession
1981 Recession
1974 Recession
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NUCOR STEEL
Consumer Economy in Transition
• Consumers transitioning from debt-driven economy to
savings-driven economy.
Consumers using less debt
• End-use demand determined by what consumers can
afford, NOT by what they can borrow.
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NUCOR STEEL
Consumer Credit
1997-2009
14%
$3,000,000
12%
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Outstanding Credit (Millions of Dollars)
$2,500,000
Annual % Increase
in Consumer Credit
Outstanding
Consumer Credit
$2,000,000
10%
8%
$1,500,000
6%
Lehman Brothers
During 2001 recession,
credit still grew at rates
of 5-10% per year
$1,000,000
4%
$500,000
2009 - New credit
approaching ZERO
2%
0%
$0
Feb-09
Sep-08
Apr-08
Nov-07
Jun-07
Jan-07
Aug-06
Mar-06
Oct-05
May-05
Dec-04
Jul-04
Feb-04
Sep-03
Apr-03
Nov-02
Jun-02
Jan-02
Aug-01
Mar-01
Oct-00
May-00
Dec-99
Jul-99
Feb-99
Sep-98
Apr-98
Nov-97
Jun-97
Jan-97
Source: U.S. Federal Reserve, Consumer Credit Outstanding, Millions of Dollars, Seasonally Adjusted
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NUCOR STEEL
Government Driving Economy
• US trade deficit at all time high
• US debt at all time high
• US budget deficit at all time high
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• Government is picking up the debt that
consumers are shedding.
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NUCOR STEEL
Government Action Needed in 2009
• Consider American Manufacturing when enacting new
public policy, such as:
– Employee Free Choice Act
– Cap-and-Trade and Climate Change
– National Health Care
– Energy Policy
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• Government can drive costs and unemployment up by over
regulation or make American manufacturing more
competitive and create jobs.
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NUCOR STEEL
Government Action Needed in 2009
• Enforcement of the Rules of
International Trade
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– End currency manipulation
– Challenge illegal export subsidies
– Fight foreign governments
competing in commercial
markets
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