Philippe Varin, Chief Executive London, 28 November 2005 · 2015. 12. 28. · Sources:...
Transcript of Philippe Varin, Chief Executive London, 28 November 2005 · 2015. 12. 28. · Sources:...
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The future of European steel
Steel Success Strategies Europe III Philippe Varin, Chief Executive
London, 28 November 2005
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AgendaThe future of European Steel
• Market environment• Global• Europe
• The Corus Way
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(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
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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
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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)
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100
200
300
400
500
'00 '01 '02 '03 '04 '05 YTD
Source: Metal Bulletin
($/t, indexed)
ScrapIron OreCoal
Coke
Market environment – Global Raw material prices
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6Source: Deutsche Bank
Steel
Coal
GoldZinc
Alumina
Nickel
Iron Ore
Diamonds
Aluminium
0%
10%
20%
30%
0 5 10 15 20 25
Number of companies producing >40% of total global production
RO
CE
2000
-03
Market environment – Global Impact of consolidation
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AgendaThe future of European Steel
• Market environment• Global• Europe
• The Corus Way
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8* All forecast average annual growth, Construction 2005-08, Automotive EU25 2004-10Sources: Euroconstruct, JD Power, IISI, Corus
Automotive
Market environment – EuropeEU growth segments
EU25 exterior body steels
EU25 high strength steels
Construction
UK construction
market
UK public sector building
market
2.0%
6.1%
2.5%
4.3%
6.5%
1.7%
EU25 building envelope
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Crude steel production(% change on previous year)
Market environment – Europe European producer response
Source: IISI
World including China
EU25
-10%
-5%
0%
5%
10%
Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05
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10* Tata, SAIL and Jindal onlySources: WSD
($/t, ex works, 2005)
100 96 95
79 7870
BrazilCISNorth America
JapanEU15 India*
Market environment – Europe Regional slab production costs
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AgendaThe future of European Steel
• Market environment• Global• Europe
• The Corus Way
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Teesside
Scunthorpe
Rotherham
Stocksbridge
Port Talbot
Restoring SuccessUK restructuring
Developed
Steelmaking closed or activities downsized
Ring-fenced
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• 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)
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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
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Restoring Success…and Savings
Annualised exit rate benefits
£m
£52m
£220m
£335m
£480m
£680m
H2 2003 H1 2004 H2 2004 H1 2005 Target 06
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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
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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
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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
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The Corus Way‘Best to best’: Aerospace
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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
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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
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