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MARCH 2014. NUCOR TODAY NUCOR TODAY NORTH AMERICAS MOST DIVERSIFIED STEEL & STEEL PRODUCTS COMPANY 2.

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Presentation on theme: "MARCH 2014. NUCOR TODAY NUCOR TODAY NORTH AMERICAS MOST DIVERSIFIED STEEL & STEEL PRODUCTS COMPANY 2."— Presentation transcript:

1 MARCH 2014

2 NUCOR TODAY NUCOR TODAY NORTH AMERICAS MOST DIVERSIFIED STEEL & STEEL PRODUCTS COMPANY 2

3 STEEL MILL STEEL MILL PRODUCTION CAPACITY PRODUCTION CAPACITY ANNUAL TONS ANNUAL TONS 3

4 4 STEEL MILL SHIPMENTS (millions of tons) 20.65

5 STEEL PRODUCTS PRODUCTION CAPACITY ANNUAL TONS ANNUAL TONS 5

6 6 STEEL PRODUCTS SALES TONS (millions of tons) 2.62

7 RAW MATERIALS (IRON UNITS) PRODUCTION CAPACITY ANNUAL TONS ANNUAL TONS 7 Direct Reduced Iron (DRI)4.5 Million Ferrous Scrap Processing5.2 Million

8 NUCORS GROWTH DRIVEN BY OUR POSITION OF STRENGTH OUR POSITION OF STRENGTH 8

9 COMPETITIVE ADVANTAGES COMPETITIVE ADVANTAGES Financial Strength Low / Variable Cost Structure Flexible Capacity Product Diversification Market Leadership Nucors People and Our Culture 9

10 Strong cash flow generation through the cycle Only North American steel producer with extremely important competitive advantage of investment grade credit rating Conservative Financial Practices No Material Legacy Liabilities 10 FINANCIAL STRENGTH FINANCIAL STRENGTH

11 Financial Strength Cash From Operations (millions of dollars) Financial Strength Cash From Operations (millions of dollars) Cyclical Trough To Cyclical Trough More than 2X Average $495 million $495 million Average Average $1.1 Billion $1.1 Billion 11

12 LOW COST STRUCTURE = INDUSTRY LEADING RETURNS 12

13 NUCORS ROIC PERFORMANCE AVG = 15.5% GREAT RECESSION UP-CYCLE

14 FLEXIBLE CAPACITY FLEXIBLE CAPACITY Electric arc furnaces High productivity No lay-off practice 14 BEST-IN-CLASS MARKET RESPONSIVENESS!!!

15 DIVERSIFIED PRODUCT MIX DIVERSIFIED PRODUCT MIX 15

16 NUCOR = MOST DIVERSIFIED STEEL AND STEEL PRODUCTS PRODUCER IN NORTH AMERICA Highway Products Building Systems Joist & Decking Fasteners Grating Wire Products Rebar Fabrication Cold Finished Bar Plate Sheet Structural/Piling SBQ Bar 16 NUCOR Arcelor Mittal Steel Dynamics GerdauCommercial Metals Company RepublicTimkenUS SteelSeverstalThyssen Krupp

17 MARKET LEADERSHIP BY SIZE IN NORTH AMERICA MARKET LEADERSHIP BY SIZE IN NORTH AMERICA Structural Steel Bar Steel Rebar Steel Cold Finished Bar Steel Steel Joist Steel Deck Rebar Fabrication, Distribution, & Placement Steel Piling Distribution Metal Buildings Sheet Steel Plate Steel #1 North American Market Leader #2 North American Market Leader #3 17

18 NUCORS PEOPLE – OUR BIGGEST COMPETITIVE ADVANTAGE 18

19 Commitment to Employees SAFETY Is Our First Priority Teamwork Pay For Performance Continual Improvement Decentralized Structure = Nucor Employees Are Empowered To Take Care Of Our Customers 19 NUCORS CULTURE NUCORS CULTURE

20 20 Click to edit Master text styles –Second level Third level –Fourth level »Fifth level 20 GREAT CHALLENGES PRESENTGREAT CHALLENGES PRESENT GREAT OPPORTUNITIES TO THEGREAT OPPORTUNITIES TO THE RIGHT PEOPLE – THE NUCOR TEAMRIGHT PEOPLE – THE NUCOR TEAM 20

21 GROWING EARNINGS POWER: GROWING EARNINGS POWER: MULTI-PRONGED GROWTH STRATEGY MULTI-PRONGED GROWTH STRATEGY 21

22 22 NUCORS FOCUS: PROFITABLE GROWTH!!! NUCORS 5 PRONGED GROWTH STRATEGY Nucors Position of STRENGTH 1.OPTIMIZE EXISTING OPERATIONS 2.RAW MATERIALS STRATEGY 3.GREENFIELD GROWTH (technology & market niches) 4.INTERNATIONAL GROWTH via joint ventures 5.STRATEGIC ACQUISITIONS

23 CAPITAL INVESTED 23

24 CAPITAL INVESTED ($ MILLIONS) STEEL MILLS BARS MEMPHIS SBQ MILL ( ) $350 DARLINGTON ROD MILL ( ) $99 CONNECTICUT REHEAT FURNACE ( ) $23 NEBRASKA SBQ ROLLING MILL UPGRADE ( ) $16 24 AMOUNTS NOT NECESSARILY PROJECT TOTALS – ONLY INCLUDES $s INVESTED OVER PERIOD

25 CAPITAL INVESTED ($ MILLIONS) STEEL MILLS BEAMS & PILING SKYLINE ACQUISITION (2012) $675 NUCOR-YAMATO SHEET PILING PRODUCT RANGE EXPANSION ( ) $92 25 AMOUNTS NOT NECESSARILY PROJECT TOTALS – ONLY INCLUDES $s INVESTED OVER PERIOD

26 CAPITAL INVESTED ($ MILLIONS) STEEL MILLS PLATE HERTFORD COUNTY HEAT TREAT FACILITY ( ) $70 HERTFORD COUNTY NORMALIZING LINE ( ) $38 HERTFORD COUNTY DRI HANDLING ( ) $21 HERTFORD COUNTY VACUUM TANK DEGASSER ( ) $17 TUSCALOOSA 2 nd LMF ( ) $12 26 AMOUNTS NOT NECESSARILY PROJECT TOTALS – ONLY INCLUDES $s INVESTED OVER PERIOD

27 CAPITAL INVESTED ($ MILLIONS) STEEL MILLS SHEET NUMIT SHEET STEEL PROCESSING J.V. ACQ. (2010) $221 DECATUR GALVANIZING FACILITY ( ) $126 BERKELEY COUNTY WIDE-LIGHT ( ) $86 HICKMAN VACUUM TANK DEGASSER ( ) $33 CRAWFORDSVILLE DRI HANDLING ( ) $22 BERKELEY COUNTY DRI HANDLING ( ) $18 27 AMOUNTS NOT NECESSARILY PROJECT TOTALS – ONLY INCLUDES $s INVESTED OVER PERIOD

28 CAPITAL INVESTED ($ MILLIONS) STEEL MILLS INTERNATIONAL DUFERDOFIN J.V. IN ITALY (BEAMS & BARS) (2008) $671 28

29 CAPITAL INVESTED ($ MILLIONS) DOWNSTREAM PRODUCTS HARRIS STEEL REBAR FABRICATION BOLT-ON ACQUISITIONS ( ) $211 29

30 CAPITAL INVESTED ($ MILLIONS) RAW MATERIALS & ENERGY DAVID J. JOSEPH ACQUISITION (2008) $1,440 LOUISIANA DRI FACILITY ( ) $739 NATURAL GAS DRILLING & MIDSTREAM ASSETS ( ) $616 DAVID J. JOSEPH BOLT-ON ACQUISITIONS ( ) $300 TRINIDAD DRI FACILITY EXPANSION (2011) $15 30 AMOUNTS NOT NECESSARILY PROJECT TOTALS – ONLY INCLUDES $s INVESTED OVER PERIOD

31 RAW MATERIALS STRATEGY 31 DRI Plant - Louisiana Game changer for Nucors cost of high quality iron units required to produce higher value-added sheet, SBQ, & plate Production of DRI began on December 24, 2013 Output quality matching the best-in-class levels routinely achieved at our DRI plant in Trinidad. Together with Trinidad plant, Nucor has total annual DRI capacity of 4.5 million metric tons. Natural Gas Working Interest Investment Long-term & low cost supply of energy source required to produce DRI Provides hedge against any future increases in natural gas prices – critical risk factor in DRI production Approximately 20 year supply of natural gas to cover usage of 2 DRI plants + current steel mill consumption Cost structure of drilled wells such that they delivered modest positive return in 2013s low natural gas pricing environment DRI = Direct Reduced Iron

32 DRI VERSUS PIG IRON COST COMPARISON (using estimated long-term prices) 32 $/tonBlast FurnaceDRI Iron Ore (62% FE, FOB Brazil) Pellet Premium Iron Premium (BF = 65% Fe & DRI = 68% Fe) X $2.20 Freight Iron Ore Consumption (BF = 1.6 ton & DRI = 1.5 ton) $125 $40 $7 $25 $315 $125 $40 $13 $15 $290 Cash Conversion Costs BF Reductant (100% coke) DRI Reductant (11 $4) $70 $107 $35 $44 Iron Unit Cost BF with sinter plant cost savings BF Cost Savings By Substituting 40% of coke usage with PCI & natural gas BF Higher Value-In-Use Benefit Adjusted BF Iron Unit Cost$492 $30 $11 $15$436$369 Coke cost assumes 0.5 ton of coke using 1.5 tons of metallurgical coal costing $125/ton

33 NUCORS FOCUS = GENERATE ATTRACTIVE RETURNS 33

34 BUILDING EARNINGS POWER FOR THE NEXT CYCLICAL PEAK & BEYOND (Millions of dollars) 2008 RECORD EPS $5.98 $

35 35 CASH DIVIDENDS PAID 2004 – 2013 Base & Supplemental Dividends (dollars per share) Approx. $5/share in total supplemental dividends from 2005 to 2008 GREAT RECESSION 41 CONSECUTIVE YEARS OF INCREASED CASH DIVIDENDS UP-CYCLE


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