SSAB Europe Mix improvement driving profitability
|
|
- Valerie Jones
- 5 years ago
- Views:
Transcription
1 SSAB Europe Mix improvement driving profitability Olavi Huhtala, EVP and Head of SSAB Europe
2 Agenda SSAB Europe & current situation Market situation and outlook Strategy 2
3 Market leader in Nordic region Profitability leader in Europe Nordic market leader EBITDA margin 2016 vs. European peers 40-50% Market share ~50% of SSAB Europe volumes SSAB Europe TK Steel Europe ArcelorMittal Europe Salzgitter 5.8 % Mton SSAB shipments 2016 Tata Steel Europe 3.7 3
4 SSAB Europe business 2016 Continental Europe (flats) Focus on Premium products and more value added sales Based on strong product portfolio Multichannel approach Share of volumes Nordic Home Market (flats) Clear market leader Superior set-up to service local market Active towards all segments Multichannel Automotive (global) Selective focus based on Advanced High-Strength Steel Focus on OEMs and Tiers Based on collaboration & flexibility Tubular Strong position in the Nordics Premium products outside Nordics Based on strong product portfolio & service 4
5 Profitability clearly improving Sales and EBITDA margin 1,2 SEKm % 8, ,000 6,000 5,000 4,000 3,000 2,000 1, Q Q2 Q3 Q4 Q ) Excluding items affecting comparability 2) Figures for 2014 are pro forma, as if SSAB had owned Rautaruukki during the year Q2 Q3 Q4 Q Q2 Q3 Q4 Q
6 Agenda SSAB Europe & current situation Market situation and outlook Strategy 6
7 Stable demand at relatively good levels, albeit far from 2007 peak Apparent steel use in EU, mt finished steel % % +2.6% +1.3% F 2018F Source: Eurofer Market Outlook 4/2017 and previous versions 7
8 Positive development in Nordic market expected to continue 4,5 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 Overall healthy outlook, some regional differences GDP yearly growth rate, % f f 2020f Sweden Finland Norway Denmark All key steel consuming segments are growing Automotive expected to continue to grow steadily the next 3-4 years Heavy trucks growing, with Scania and Volvo Trucks gaining market share Overall healthy outlook for Construction Offshore dependent on oil prices: in Norway a number of new projects starting up which might attract investments Source: IMF, April
9 Positive long-term demand sentiment in most customer segments Sentiment Comment Automotive Construction Automotive output is estimated to have grown ~5% in 2016 Fundamentals for the automotive market in the EU are expected to remain overall positive in 2017 and 2018, albeit at a lower pace Overall healthy outlook (+2.1% in 2017 and 2.7% in Eurofer) Energy Marine & Offshore Continued positive outlook for wind energy sector Good order books and opportunities coming up Solar power projects continue to be funded Good situation in the shipbuilding sector Offshore dependent on oil prices Others Heavy transport continue strong growth Agriculture showing clear signs of improvement starting in 2018 Source: KallanishSteel, Eurofer, SSAB analysis (April 2017) 9
10 Agenda SSAB Europe & Current situation Market situation and outlook Strategy 10
11 Strategic focus areas Strengthen the Nordic Home Market leadership Improve the mix Continuous improvements to enhance cost position and productivity 11
12 Strengthen the Nordic Home Market leadership Continue to leverage unique market leader position Full product offering Asset closeness and flexibility superior services Best technical and development support Long customer relationships Trusted partner for the long term Key focus ahead Develop relationships with top accounts Multichannel strategy Leverage own Steel Service Centers Leverage cooperation with Tibnor Grow Premium products in selective segments 12
13 Premium vs. standard Premium product business Standard business Seat Back rest Docol CR1300M Material optimized for a purpose Typical customer is an end-user Customers value total offer and are prepared to pay a premium Close cooperation higher switching cost Less exposed to competition Vs. Material serving multiple purposes Typical customer is a steel service center Customers value properties such as consistency, but are not prepared to pay a premium Business more transaction based Full competition, incl. non-eu actors 13 Volume and price more stable Volume and price follow market
14 Increase premium product share to 40% by 2020 Share of SSAB Europe volumes, % Mix change 100% 100% Automotive Premium Standard Hot-Rolled-Coils Other premium products Nordic Rest of EU RoW Other Standard products Tubular products Processed products (CTL / Slitted) Processed products (CTL/Slit) Tubular products Automotive premium 30% 40% Standard Hot-Rolled-Coils Other Standard products Other premium products Grow volumes and allocate more capacity Stable volumes and capacity allocation Decrease volumes and allocate less capacity 14
15 Our product offering A complete new brand portfolio launched since merger ALL OPTIMIZED FOR A PURPOSE SSAB Domex SSAB Laser SSAB Form SSAB Weathering SSAB Boron 15
16 Growing Premium products outside Automotive through a two-fold approach Local pull Based on local needs and opportunities Central market development provides support Pushing new opportunities Leveraging cross geography learnings Central Market Development identifies growth areas 16
17 Striving towards best in basics through continuous improvements Stability & flexibility in production Focus on bottlenecks, improved availability and reducing complexity Quality Focus on improved proactive quality management as well as harmonized claims handling Safety Delivery accuracy Focus on implementing new Supply Chain Management model and reduce complexity Cost efficiency and waste reduction Focus on key areas like production yield and energy Key continuous improvement projects Luleå slab yield Borlänge yield Borlänge continuous annealing capacity Energy use optimization Reducing rejections in Raahe hot-strip rolling Raahe PCI coal cost Hämeenlinna hot-dip galvanizing capacity 17
18 Example: Continuous annealing line in Borlänge Improved availability and productivity through Tuning of burners and induction furnaces 100% material flow As a result, weekly production has increased from 8.3 ktonnes in 2015 to 10.5 ktonnes (~30%) in 2017 Supports growing sales to the automotive sector Further capacity improvements targeted 18
19 Summary Market leader in Nordic region profitability leader in Europe Competitive platform in place Positive market outlook Strategic focus areas: Strengthen the home market position Mix improvement to 40% premium Continuous improvement to improve cost position 19