BlueScope Buildings North America Investor Visit Presentation
Transcript of BlueScope Buildings North America Investor Visit Presentation
BlueScope Buildings North America Investor Visit Presentation
28 April 2014
Dan Kumm, President
BlueScope Steel Limited. ASX Code: BSL
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Important NoticeTHIS PRESENTATION IS NOT AND DOES NOT FORM PART OF ANY OFFER, INVITATION ORRECOMMENDATION IN RESPECT OF SECURITIES. ANY DECISION TO BUY OR SELL BLUESCOPESTEEL LIMITED SECURITIES OR OTHER PRODUCTS SHOULD BE MADE ONLY AFTER SEEKINGAPPROPRIATE FINANCIAL ADVICE. RELIANCE SHOULD NOT BE PLACED ON INFORMATION OROPINIONS CONTAINED IN THIS PRESENTATION AND, SUBJECT ONLY TO ANY LEGAL OBLIGATION TODO SO, BLUESCOPE STEEL DOES NOT ACCEPT ANY OBLIGATION TO CORRECT OR UPDATE THEM.THIS PRESENTATION DOES NOT TAKE INTO CONSIDERATION THE INVESTMENT OBJECTIVES,FINANCIAL SITUATION OR PARTICULAR NEEDS OF ANY PARTICULAR INVESTOR.
THIS PRESENTATION CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS, WHICH CAN BEIDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS “MAY”, “WILL”, “SHOULD”,“EXPECT”, “INTEND”, “ANTICIPATE”, “ESTIMATE”, “CONTINUE”, “ASSUME” OR “FORECAST” OR THENEGATIVE THEREOF OR COMPARABLE TERMINOLOGY. THESE FORWARD-LOOKING STATEMENTSINVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAYCAUSE OUR ACTUAL RESULTS, PERFORMANCE AND ACHIEVEMENTS, OR INDUSTRY RESULTS, TOBE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCES OR ACHIEVEMENTS,OR INDUSTRY RESULTS, EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS.
TO THE FULLEST EXTENT PERMITTED BY LAW, BLUESCOPE STEEL AND ITS AFFILIATES AND THEIRRESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS, ACCEPT NO RESPONSIBILITY FORANY INFORMATION PROVIDED IN THIS PRESENTATION, INCLUDING ANY FORWARD LOOKINGINFORMATION, AND DISCLAIM ANY LIABILITY WHATSOEVER (INCLUDING FOR NEGLIGENCE) FORANY LOSS HOWSOEVER ARISING FROM ANY USE OF THIS PRESENTATION OR RELIANCE ONANYTHING CONTAINED IN OR OMITTED FROM IT OR OTHERWISE ARISING IN CONNECTION WITHTHIS.
INTRODUCTION
US Navy Hangar- Jacksonville, FLBlueScope Construction
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External segment reporting structure 1
Building Components & Distribution Australia
Global Building Solutions
Building Products ASEAN, North
America and IndiaNew Zealand and
Pacific SteelProducts
Hot Rolled Products North America
• Leading global designer and manufacturer of EBS2
• Key markets in China & Nth America; plants in ASEAN, India, Middle East
• Supplying buildings to global customers
• China coating & painting
• Operates metallic coating and painting lines and roll-forming in Indonesia, Malaysia, Thailand, Vietnam, India and North America
• Includes NS BlueScope Coated Products JV
• Largest supplier and only manufacturer of HRC, plate, metal coated and painted steel in Australia
• Australian finished-product capacity of ~2.5Mtpa; domestic market 1.9Mtpa in 1H FY2014
• 2.0Mtpa mini-mill in Ohio
• 50/50 JV with Cargill Inc.
• Voted no. 1 flat rolled steel supplier in North America (Jacobson Survey) for 12 consecutive years
• Major steel product supplier / distributor to the Australian building and construction, automotive, white goods manufacturing and general manufacturing industries
• Only fully integrated flat steel maker in New Zealand
• Leading domestic market share of flat products
• Includes iron sands mines (own consumption and export sales)
(1) BlueScope also has a Corporate segment which is not shown(2) Engineered building solutions
Coated & IndustrialProducts Australia
BlueScope Australia & New Zealand
BlueScope Buildings North America is part of BlueScope’s Global Building Solutions segment
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Global Building Solutions segment has been established to unite BlueScope’s Building Solutions businesses and accelerate growth
BuildingsASEAN
Engineered Building Solutions and ASEAN
Stewart Dellar – President
Buildings North America
Engineered Building Solutions in North America
Dan Kumm – President
Solutions Australia
Engineered Building Solutions, Ranbuild and Water solutions in Australia
Craig Smith – GM
Global Accounts
Engineered Building Solutions to key multinational accounts and oversight of JVs (SBS, TBSL)Pat Finan – President
Product &Buildings ChinaEngineered buildings, coated steel and building components (Lysaght) in China
Bernie Landy – President
Global Building Solutions
Sales A$1.5BnOver 5,000 employees across 12 countries
24 manufacturing facilities116 years combined experience with BlueScope Leadership
141 years combined experience working in steel and construction sector
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A broad portfolio of leading Building Solution brands / products
Buildings ASEAN
Buildings NorthAmerica
Solutions Australia
Global Accounts
Product & Buildings China
Saudi Building Systems
BUSINESS OVERVIEW
Costco – Melbourne, Australia
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BlueScope Buildings North America overview
• BBNA designs/manufactures/markets Engineered Building Solutions (EBS) to the low-rise non-residential construction segment
• Comprised of the leading pre-engineered building brands and best known builder distribution networks
• BBNA has 26% market share in North America• Brief history:
1901
Butler Founded
Butler 1st to introduce 3-plate Rigid frame
VP Buildings Commenced Business
20141939
1948
BSL Buys Butler
2004 2009
2012
GFC Impact
BSL Acquires VP
GBS Formed
2008
1963
VP introduces “custom concept”
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So what is an engineered building solution (EBS)?
Engineered Building Solution Conventional steel building
Key benefits to engineered building solutions are: Reduced steel usage on targeted end use buildings Integration: One trade performing structure, roof, and walls vs. three Rapid construction time Superior lifecycle costs of metal roof systems Reduced dependency on certified welders in field Well suited for emerging design-build trend in construction industry
• Fit-for-purpose structural system leveraging tapered frame concept
• Design each structural member to meet unique load requirements
• Performs well with large clear-span requirements and low-riseconstruction
• Frequently integrates roof and/or wall system as a total solution
• Conventional design using standard hot rolled sections
• Standard structural members selected from known criteria
• Performs well with low and high-rise solutions with moderate to low spans required
• Scope typically stops with structure and deck
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• Mission: To grow our industry leading position as a solution provider for the non-residential low-rise building market. Delivering our products and services primarily through multiple brand, closed distribution network of Builders with a focus on differentiation and growth initiatives through the rollout of new products, new services, and superior quality
• BBNA does not define ourselves as a metal building supplier. We are a solution provider proficient in both metal buildings and conventional steel. In fact, we provide hybrid solutions that leverage the best of both worlds
Mission / vision of BBNA
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Both Butler and VP give BBNA a unique history of being a market leader
1st to use computer designed rigid frame structure1st to utilise prepunched structurals and panels1st to utilise fiberglass blanket insulation between panel & structural1st to offer ‘Z’ shaped purlins1st to offer “Custom Engineered” building vs. “Pre-Engineered”1st to market through network of local contractors1st to offer low-slope pre-engineered buildings1st to offer a pre-engineered standing seam roof system1st to initiate formation of MBMA (Metal Building Manufacturer’s Association)1st to introduce Skyweb fall protection system1st to offer G30 Acrylic as standard1st to offer self-curbing day lighting system
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BBNA supply chain / channel to market
BSL /Nippon
North Star
Gerdau
Nucor
SDI
WII
Steel-scape
ServiceCenters
BBNAShared Services
Platform
ManufacturingPurchasing
Innovation / R&DEngineering System
Warranty AdminQuality Control
Human ResourcesFinance / Tax
PayrollIT
Butler
VP
BSC
ButlerBuilders
VPBuilders
EndCustomer
Market FacingNon-market Facing
Brand Specific FocusLeverage Economy of Scale
Up-stream Mid-stream Down-stream
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Nearly 2,000 Butler and VP builders across North America
24%
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BlueScope Construction history
• Established in 1970
• In-house construction capability
• Account for 14% of BBNA Revenue
• National footprint – licensed in all 50 states
• Capabilities include: program accounts, government, & large/complex jobs
• Strategic purpose is to capture all work that doesn’t fit our existing builders’ capability
Manufacturing PlantsManufacturing Plants Data CentersData Centers
Distribution Centers & Shipping HubsDistribution Centers & Shipping Hubs
Aircraft HangarsAircraft Hangars
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BlueScope Construction has a long history of conquering challenges of key corporate accountsFedEx GroundOver 100 projects since 1995
Air National GuardOperation Noble Eagle 30 Hangars in 30 Days at 10 Locations
In response to September 11 terrorist attacks
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BBNA management team
Dan KummPresident,
BlueScope Buildings NA
Dave ShawEngineering Excellence
Barb BridgerVP Human Resources
Chuck HaslebacherPresident,
Varco Pruden
Doug LangeVP Finance
Tom GilliganPresident,
Butler Manufacturing
Morrie AndersonVP Operations
Matt ThreadgillPresident,
BSC
Ron MillerVP Innovation
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New integrated manufacturing platform
Visalia
Monterrey (Mexico)
Evansville
St Joseph
Annville
Jackson
Laurinburg
Rainsville
Manufacturing facility Total Capacity: approx. 320 metric kt
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World-class facilities: Evansville, WI
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World-class facilities: Visalia, CA
U.S. ENGINEERED BUILDINGS MARKET
Stafford Hills Club –Tualatin, ORSM Andersen Company, Inc
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Customer base industry segmentation
24%
Note: Based on CY2013 shipments
23G2 Commercial Construction, Inc.– Kennewick, WA
G2 Construction
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Summit Aviation – Middletown, DEEDiS Company
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Triple S Harley Davidson – Westover, WVMarch Westin Company, Inc.
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BBNA has two primary competitors in the metal buildings sector, but also looks to expand into conventional markets
MBMACompany Brands
# of Plants
BBNA Butler, VP 8
Nucor Nucor, American, Gulf States, Kirby, CBC
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NCI Robertson, Star, CECO, Garco,Metallic, Mid-West, A&S, Mesco, IPS, SB.com
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Two major competitors in the metal buildings market, NCI & Nucor, as well as several much smaller companies
Conventional Steel Services group in full swing to capture work outside of the typical MBMA market
13%
MBMA is 13% of Total Buildings Market
$16.5b*
*FY13 Total Non-Res (0-2 stories) construction spend was $110B. Assuming 15% is building material = $16.5b
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North America PEB market indicators
FY2013actual
FY2014forecast
FY2015forecast
FY2016 forecast
Construction growth 5.1% 14.8% 9.3% 18.4%
303540455055606570
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Jul-0
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Jan-
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Jan-
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Thousands of units
Total Housing Single-Family Multi-Family
Source: FW Dodge, Q1 CY2014 data release
Expansion
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FW Dodge forecast of U.S. non-residential construction Architectural Billings Index
U.S. housing commencements
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Trading conditions
• Began 2H FY2014 with backlog 10% greater than at beginning of 2H FY2013
• January through March 2014 activity level impacted by particularly difficult winter season
• Current backlog is 20-30% greater than same time last year
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Growth initiatives
Ease of doing
business
Unique value
offeringReputation Competitive
Selling Capability Service Products
OperationsCapability
DayLightSavings
IECC Compliance
Energy Usage
Life Cycle / Durability
Leveraging our unique Builder Networks
Increasing addressable market, such as conventional and Latin America initiatives
Innovating with vision toward mega-trends, such as energy conservation
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BBNA volume (metric kt)
289
211197186173
264
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FY08
390
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FY14FY13FY12FY11FY10FY09
Varco Prudenacquisition
(Tonnes not reported in BlueScope due to acquisition timing)
GFC impactResults through
1H
INNOVATION AND GROWTH
TRUSS PURLINXT Pilot JobOklahoma City, Oklahoma
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Grandview Research Center overview
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• Regulatory & Compliance Testing
• New product development
• 60 worldwide patents
• Raw material testing & quality assurance
• Led by industry experts
Advanced thermal testing capability creates a competitive advantage for customers:
• More cost effective & energy efficient roof and wall assemblies than code prescribed methods
• Certified by the International Accreditation Service (IAS)
• More than 80 assemblies tested
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Our competitive advantages
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TRUSS PURLINXT Product Features
• Lighter and more efficient than bar joists
• Significant load/span capability
• Less field labor to install than bar joists
• Superior appearance / finish = no field paint
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Our competitive advantages
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Daylighting
• Reduces electrical consumption / costs up to 70%
• Sold over 11k units in 2 years
• Less labor in field compared to curbed units
Before After
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Technology – the Vision Engineering System is leveraged throughout the product workflow and order cycle
• Sales Tool
– Fast BIM (Building Information Model) modelling
– Power in the hands of our Builders
• Quoting Tool
– Integrated with auto-design engine
• Automated Design Tool
– Delivers efficient, consistent design
– Auto application of snow loads, multiple codes, etc.
• Automated Detailing Tool
– Saves significant engineering hours
• Integration Tool – Supply Chain & Shop Floor
– Leverages economies of scale for product purchases
– Aligns design solution with manufacturing capabilities
INTRODUCTION TOST JOSEPH PLANT
TRUSS PURLINXT fixture – St. Joseph, MO
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St Joseph plant overview
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• Opened in 1981
• 194 manufacturing employees
• Over 138k sq. ft. of manufacturing space
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St Joseph facility
Example of expanding our addressable market by entering the conventional steel space
Example of expanding our addressable market and market share through industry-leading innovation
QUESTIONS?
Sanford Health Fieldhouse – Sioux Falls, SDButler Builder: Fiegen Construction Company
BlueScope Buildings North America –Investor Visit Presentation
28 April 2014
Dan Kumm, President
BlueScope Steel Limited. ASX Code: BSL