Transcript Document 7413258

Forward-Looking Statements
Certain statements made in this presentation are forward-looking statements that
involve risks and uncertainties. These forward-looking statements reflect the Company’s
best judgment based on current information, and although we base these statements on
circumstances that we believed to be reasonable when made, there can be no assurance
that future events will not affect the accuracy of such forward-looking information. As
such, the forward-looking statements are not guarantees of future performance, and actual
results may vary materially from the results and expectations discussed herein. Factors
that might cause the Company’s actual results to differ materially from those anticipated in
forward-looking statements include, but are not limited to: (1) the sensitivity of the results
of our operations to prevailing steel prices and the changes in the supply and cost of raw
materials, including scrap steel; (2) availability and cost of electricity and natural gas; (3)
market demand for steel products; (4) competitive pressure on sales and pricing, including
pressure from imports and substitute materials; (5) uncertainties surrounding the global
economy, including excess world capacity for steel production; (6) U.S. and foreign trade
policy affecting steel imports or exports; (7) significant changes in government regulations
affecting environmental compliance; (8) the cyclical nature of the domestic steel industry;
(9) capital investments and their impact on our performance; and (10) our safety
performance.
The following discussion should be read in conjunction with the audited consolidated
financial statements and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” contained in Nucor’s Annual Report on Form 10-K for the year
ended December 31, 2006.
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Nucor Overview
• 53 Operating Facilities in 18 states and
Trinidad
• In 2006, 11,900 employees generated
$14.8 billion in sales and 22.3 million
tons of steel shipments
• 2006 sales per employee of $1.275
million
• Corporate Staff of 70 Employees
• Largest recycler in the United States
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Nucor Overview
• Profitable every year and every quarter
since 1966
• Sales have grown from $3.6 billion in 1996
to $14.8 billion in 2006
• Steel shipments have grown from 8.4
million tons in 1996 to 22.3 million tons in
2006
• Net Income has grown from $248 million in
1996 to $1.8 billion in 2006
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Nucor Overview
Key Facilities:
• Bar Mill Group (11)
• Structural Mills (2)
• Plate Mills (2)
• Vulcraft (Joist/Deck -16)
• Cold Finish Group (4)
• Sheet Mill Group (11)
• Building Systems Group (3)
• Fastener Division (1)
• Nucon (2)
North America’s most diversified steel producer
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Steel Shipments 1996-2006
(millions of tons)
24
20
16
12
8
4
0
1996
6
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Net Sales 1996-2006
(millions of dollars)
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
1996
7
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Pre-Tax Profit / Ton 1996-2006
140
120
100
80
60
40
20
0
1996
8
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Net Income 1996-2006
(millions of dollars)
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
1996
9
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Cash from Operations 1996-2006
(millions of dollars)
2,400
1,800
1,200
600
0
1995
10
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Cash Dividends Paid 1996-2006
(millions of dollars)
600
500
400
300
200
100
0
1996
1997
1998
1999
2000
Base
11
2001
2002
Supplemental
2003
2004
2005
2006
Record 2006 Results
• RECORD EPS of $5.68 in 2006 – up 38% from 2005 EPS of $4.13
and THIRD CONSECUTIVE ANNUAL EARNINGS RECORD
• 2006 EPS of $5.68 SIX TIMES GREATER than 2000 EPS of $0.95
posted at last peak in economic and steel market cycles
• DISCIPLINED execution of Nucor’s four-pronged growth
strategy has paid off – significant expansion in earnings power
• Third consecutive annual earnings record in 2006 AGAIN
PROVED THE VALUE OF NUCOR’S POSITION AS THE MOST
DIVERSIFIED STEEL PRODUCER in North America
• In 2006, ROE exceeded 38% and $1.2 billion of cash returned to
shareholders via dividends & share repurchases – continue to
build upon Nucor’s long-term record as an effective steward of
our shareholders’ valuable capital
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2006 Return On Equity(%)
40
35.7
35
37.6
38.4
38.6
STLD
CMC
NUE
32.2
30
25
22.0
20
15
10
5
0
GNA
13
IPS
X
2006 Return On Capital Employed(%)
ROCE = EBIT / (Total Assets – Current Liabilities)
45
43.1
40
36.9
35
38.8
33.3
30
25
23.9
24.6
20
15
10
5
0
X
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GNA
IPS
CMC
STLD
NUE
Nucor’s Position Of Strength To
Continue Growing Shareholder Value
• Our Culture
• Financial Strength
• Diversified Product Mix
• Market Leadership
• Technological Innovation
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It Starts With Our Culture
• Commitment to Employees
• TEAMWORK
• Pay For Performance
• Continual Improvement
• Lean management + decentralized
structure = entrepreneurial spirit
• Nucor’s Employees Take Ownership Of
Taking Care Of Our Customers!!!
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Financial Strength
• Cash Provided By Operations was a RECORD $2.3
Billion in 2006
• Over past three years, Nucor has generated cash from
operations exceeding $5.4 Billion
• At yearend 2006, Debt = 15% Of Total Capital
• Debt Rated “A+” By S&P And “A1” By Moody’s – Highest
North American Metals/Mining Debt Ratings
• Simple Capital Structure – and no off-balance sheet
financing arrangements
• Superior Financial Flexibility
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Diversified Product Mix
Steel Production Capacity (tons)
Hot Rolled Sheet
(Cold Rolled Sheet
4.1 million)
(Galvanized
1.5 million)
Bars
8.0 million
Structural
3.7 million
Plate
2.8 million
Total Steel
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10.8 million
25.3 million
Nucor Steel Mill Capacity
Growth 2000-2006
(millions of tons)
25
6.4
20
5.9
15
10
5
13.0
13.0
2000
2006
0
Base
19
Acquired
Productivity
Diversified Growth:
2000 – 2006 Steel Shipments
(millions of tons)
22.3
20
15
11.0
9.0
10
7.7
4.8
5
3.1
2.4
3.1 3.2
0.2
0
Total
Sheet
Bar
2000
20
2006
Plate
Beam
Diversified Product Mix
Steel Products Production Capacity (tons)
Steel Joists
715,000
Steel Deck
530,000
Cold Finished Bars
490,000
Steel Buildings
145,000
Total Steel Products
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1.9 million
Diversified Product Mix
2006 Sales Tons
Sheet-Steel - 38%
Bars-Steel - 29%
Structural-Steel - 15%
Plate-Steel - 11%
Steel Joists - 3%
Steel Deck - 2%
Cold Finished Steel - 2%
Other - <1%
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Market Leadership
Largest U.S. structural steel producer
Largest U.S. steel bar producer
Largest U.S. steel joist producer
Largest U.S. steel deck producer
Largest U.S. cold finished bar producer
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Technological Innovation
• First to commercialize thin-slab casting
• Near net shape beam blank casting of wide-flange
beams (structural steel)
• Focus on new disruptive and leapfrog technologies
continues!!!
• Castrip® – direct strip casting of carbon sheet steel
• HIsmelt® – converts iron ore to liquid metal or pig iron;
both a blast furnace replacement technology and a hot
metal source for electric arc furnaces
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Technological Innovation – Castrip®
Strip casting
Ladle
Tundish
Transition
piece
Produces ultra-thin gauge hot rolled steel
with superior properties (cold rolled
replacement at hot band cost)
Minimizes environmental
and economic impact
Pinch
rolls
(See www.castrip.com)
Casting rolls
Shear
Controlled
atmosphere
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Hot
rolling
stand
2nd hot
rolling
stand
(optional)
... .....
Down Coilers
Castrip®
Scale of Operations Comparison
Conventional Slab Casting
1-2m/minute
Gas cutter
Rougher
Coil box
Run out table
cooling
Finisher
Cooling
1-10mm thick
Thin-Slab Casting
Coiler
200-300 mm thick
Reheat furnace
20-40 metric ton coil
500-800 m
4-6 m/minute
Finisher
Run out table
cooling
1-10mm thick
Strip Casting
Coiler
50-60mm thick
Holding furnace
300-400 m
15-150 m/minute
Run out table 0.7 - 1.8 mm thick
Mill cooling
Scale Control
Chamber
60 m
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Coiler
20-40 metric ton coil
20-40 metric ton coil
Castrip® Energy & Emissions
Comparison (ladle through hot band)
2.00
1.80
0.25
1.7
.22
0.20
GGE (t CO2 equiv/t)
Energy Consumed (GJ/t)
1.60
1.40
1.20
1.00
1.0
0.80
0.15
.12
0.10
0.60
0.05
0.40
.2
.02
0.20
0.00
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0.00
Technology For The 21st Century –
HIsmelt
• Direct smelting process being developed by Rio
Tinto, Nucor, Mitsubishi and Shougang
• Blast furnace replacement technology and hot
metal source for electric arc furnaces
• Production at Kwinana, Australia plant started up
operations in Q2-2005 – and full production expected
to be reached over a 3 year ramp-up period
• Future royalty stream for partners
• Raw material source for Nucor
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Technology For The 21st Century –
HIsmelt
(See www.hismelt.com)
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Growth Opportunities: Four-
Pronged Strategy
Position of strength allows us to capitalize on marketplace
opportunities with our flexible growth strategy – and
continue Nucor’s successful tradition as a cyclical growth
company.
Nucor’s 4 Pronged Growth Strategy
1) Optimize Existing Operations
2) Pursue Strategic Acquisitions
3) Greenfield Growth – capitalizing on significant
cost advantages from new technologies and
unique marketplace niches
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4) Grow Globally through joint ventures leveraging
new technologies
Optimize Existing Operations
• CONTINUAL IMPROVEMENT In Safety,
Quality & Cost – Our #1 Priority Every Day!!!
• Nucor “BESTmarking”
• Sheet Mill Group’s strategy of climbing the
value chain by providing value-added products
and services to value-appreciative customers
• Raw Materials Strategy to develop supplies of
high quality scrap substitutes
• Nucor’s very proactive role in the fight for Real
Free Trade
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Optimize Existing Operations –
Decatur Galvanizing Facility
• Sheet Mill Group announced in June 2006 plans to
construct Nucor’s fourth galvanizing facility –
increasing Nucor’s total galvanizing capacity by one-third
to 2 million tons per year
• To be located at Decatur, Alabama sheet mill
• Building on successful acquisitions in Decatur of hot rolled
sheet mill in 2002 and cold mill in 2004 – Nucor wellpositioned to capitalize on expanding Southeastern
U.S. market for value-added sheet steels
• Annual capacity of about 500,000 tons – with ability to
galvanize 72-inch wide sheet; cost of project will be
approximately $150 million; production start-up in second
half of 2008
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Optimize Existing Operations –
Raw Materials Strategy
• Develop supplies of high quality scrap substitutes –
control approximately one-third of Nucor’s iron units
annual consumption
• At our current consumption rate, will require between
6,000,000 to 7,000,000 tons per year of high quality scrap
substitutes
• Major step forward achieved with successful start-up of
Nu-Iron direct reduced iron plant in Trinidad – with annual
capacity of 2 million tons
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• Raw materials strategy driven by Nucor’s ongoing
expansion of our sheet & SBQ product portfolio into
higher quality grades
Strategic Acquisitions
Our DISCIPLINED acquisition strategy has
greatly expanded Nucor’s platform for
generating earnings and attractive returns on
our shareholders’ capital
Nucor’s Acquisition Criteria
1. Don’t over-pay
2. Stick with businesses we understand
3. CULTURAL COMPATIBILITY
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Acquisitions History
• Auburn Steel assets purchased March 2001– 430,000 tons
capacity bar mill in New York
• ITEC Steel assets purchased November 2001 and renamed
Nucon Steel – producer of load bearing light gauge steel framing
• Trico Steel assets purchased July 2002 – 1.9 million tons
capacity hot rolled sheet mill in Alabama
• Birmingham Steel assets purchased December 2002 – 4 bar
mills (located in Alabama, Mississippi, Illinois, and Washington) with
combined capacity of 2.0 million tons
• North Star Kingman assets purchased March 2003 – idled bar
mill in Arizona; operations not re-started
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Acquisitions History
• One-half interest in Harris Steel, Inc. purchased
February 2004 – Harris Steel Group’s U.S. rebar fabrication
operations
• Corus Tuscaloosa assets purchased July 2004 – 800,000
tons capacity plate mill in Alabama
• Worthington Industries cold rolling mill assets in
Decatur, Alabama purchased August 2004 – 1.0 million tons
capacity (600,000 tons annealing capacity) facility located adjacent
to Alabama sheet mill (acquired in 2002)
• Fort Howard Steel’s Oak Creek, Wisconsin assets
purchased February 2005 – cold finished bar facility with
capacity of 140,000 tons
• Marion Steel assets purchased June 2005 – 450,000 tons
capacity bar mill in Ohio
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Acquisitions History
• Connecticut Steel assets purchased May 2006 – 300,000 tons
capacity bar products rolling mill and 85,000 tons fabrication
capacity in Connecticut
• Verco Manufacturing Company assets purchased
November 2006 – steel floor and roof decking producer with
100,000 tons capacity at 3 western U.S. facilities (Arizona, southern
California, and northern California)
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Strategic Acquisitions –
Harris Steel Group
• Harris Steel Group – announced in January 2007 an all-cash
tender offer for all shares of Harris; with debt assumed, transaction
value of approximately US$1.2 billion
• Major step forward implementing Nucor’s proven and highly
profitable vertical integration strategy – Nucor, largest North
American rebar producer, will become North America’s third largest
rebar fabricator
• Harris Steel will be an extremely valuable growth platform –
under Nucor ownership, Harris Steel will be able to accelerate
its highly successful growth in rebar fabrication
• Harris Steel owns a cold finished bar producer, Laurel Steel – will
expand Nucor’s market leadership in cold finished bars
• Attractive downstream growth opportunities offered by Harris
Steel’s metal gratings, steel distribution, and steel trading
businesses
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Strategic Acquisitions –
Harris Steel Group
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Strategic Acquisitions –
Harris Steel Group
Manufacturing / Distribution
Reinforcing Steel Fabrication Plants (“RPG”)

23 Canadian Facilities

11 U.S. Facilities
Cold Finished Bar, Wire, Mesh (“IPG”)

1 Canadian Facility
Fort McMurray, AB
Fort Saskatchewan, AB
Surrey, BC
Delta, BC
Nanaimo, BC
Steel & Aluminum Grating, Expanded Metal (“IPG”)

5 Canadian Facilities

6 U.S. Facilities
Mount Pearl,
Edmonton, AB
Richmond, BC
Leduc, AB
Abbotsford, BC
Calgary, AB
Saskatoon, SK
Regina, SK
Thunder Bay, ON
Longueuil, QC
Kelowna, BC
Seattle, WA
Dartmouth, NS
Saint John, NB
Ottawa, ON
Sudbury, ON
Auburn, WA
Montreal, QC
Portland, OR
Sarnia, ON
Bolton, ON
Boston, MA
Boise, ID
Windsor, ON
Carson City, NV
Other Operations:

Harris Supply Solutions: U.S.

Novosteel S.A.: Neuchatel, Switzerland; Montreal
Canada (main offices).

Engineering offices:
 Sri Lanka; Mississauga; Scarborough; and
Dartmouth.
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Burlington, ON
London, ON
Salt Lake City, UT
Saegertown, PA
McKees Rocks, PA
Litchfield, IL
Livermore, CA
Stoney Creek, ON
Bethlehem, PA
Wexford, PA
Florence, KY
Fresno, CA
Charlotte, NC
Phoenix, AZ
Greenfield Growth –
Memphis SBQ Mill
• Bar Mill Group announced in July 2006 plans to construct
Special Bar Quality (SBQ) products steel mill in Memphis,
Tennessee to capitalize on significantly better cost
structure compared to key competitors in the SBQ market,
both domestic and foreign
• 850,000 tons annual capacity; capital costs reduced
dramatically by utilizing the good assets we already have on
the ground at Memphis site
• Complementing our mills in South Carolina and Nebraska,
Memphis SBQ mill will position Nucor to provide the
most diverse, highest quality, and lowest cost SBQ
product offering in North America
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• Production start-up expected in Q1-2008
Performance Expectations
• 10% or better annual compound earnings
growth (through the economic cycle)
• Return on invested capital exceeding our
cost of capital
• Market leadership in every product group and
business in which we compete
• Continue Nucor tradition of emerging from
economic down-cycles stronger than
before entering them!!!
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Nucor’s Success
• Nucor’s facilities
• Nucor’s capabilities
• Nucor’s financial strength
• Nucor’s strategies
• And, the single most important asset
behind Nucor’s success – Nucor’s
EMPLOYEES – THE RIGHT PEOPLE!!!
• NUCOR’S BEST YEARS ARE STILL AHEAD
OF US!!!
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