22
Prawdziwa klêska optymistów dopiero nadchodziThe real surrender of the optimists is still to happenThe real surrender of the optimists is still to happen
17 APRIL 200917 APRIL 200917 APRIL 200917 APRIL 2009
The Survival of the FittestThe Survival of the FittestThe Survival of the FittestThe Survival of the Fittest
Juergen NusserJuergen Nusser
Steel Markets 2009Steel Markets 2009The Survival of the FittestThe Survival of the Fittest
Juergen NusserJuergen Nusser
PRESIDENTPRESIDENTSteel Markets 2009Steel Markets 2009
The Survival of the FittestThe Survival of the Fittest
VICE PRESIDENTVICE PRESIDENT
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HUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTESTHUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTEST
CZECH REPUBLICCZECH REPUBLIC
DENMARKDENMARK
FINLANDFINLANDASSOCIATION OF FINNISH ASSOCIATION OF FINNISH TECHNICAL TRADERS (TKL)TECHNICAL TRADERS (TKL)
HUNGARYHUNGARYASSOCIATION OF HUNGARIANASSOCIATION OF HUNGARIANSTEEL- AND METALTRADERS (MAFESTEEL- AND METALTRADERS (MAFE))
UNITED KINGDOMUNITED KINGDOMNATIONAL ASSOCIATION OF STEEL NATIONAL ASSOCIATION OF STEEL STOCKHOLDERSSTOCKHOLDERS
PORTUGALPORTUGALASSOCIAÇÃO PORTUGUESA ASSOCIAÇÃO PORTUGUESA DOS GROSSISTAS DE AÇOS DOS GROSSISTAS DE AÇOS METAIS E FERRAMENTESMETAIS E FERRAMENTES
SLOVENIASLOVENIA
POLANDPOLANDPOLSKA UNIA DYSTRYBUTORÓW STALIPOLSKA UNIA DYSTRYBUTORÓW STALI
SWEDENSWEDENSTÅL- OCHSTÅL- OCHMETALLFÖRENINGENMETALLFÖRENINGEN
SWITZERLANDSWITZERLAND
BELGIUMBELGIUMGROUPEMENT DES MARCHANDS GROUPEMENT DES MARCHANDS DE FER DE BELGIQUEDE FER DE BELGIQUE
UNIÓN DE ALMACENISTAS UNIÓN DE ALMACENISTAS DE HIERROS DE ESPAÑADE HIERROS DE ESPAÑA
SPAINSPAIN
ASOCIACION ESPAÑOLA ASOCIACION ESPAÑOLA DE TRANSFORMADORES DE PRODUCTOS DE TRANSFORMADORES DE PRODUCTOS PLANOS SIDERURGICOSPLANOS SIDERURGICOS
GERMANYGERMANYBUNDESVERBAND DEUTSCHER STAHLHANDELBUNDESVERBAND DEUTSCHER STAHLHANDELEDELSTAHLHANDELS-VEREINIGUNGEDELSTAHLHANDELS-VEREINIGUNG
AUSTRIAAUSTRIAFRANCEFRANCEFÉDÉRATION FRANÇAISE DE DISTRIBUTION FÉDÉRATION FRANÇAISE DE DISTRIBUTION DES MÉTAUXDES MÉTAUX
NETHERLANDSNETHERLANDS
ITALYITALYASSOFERMETASSOFERMET
BULGARIABULGARIA
ASOCIATIA ROMANA ASOCIATIA ROMANA A DISTRIBUITOTOLOR DE METALA DISTRIBUITOTOLOR DE METAL
ROMANIAROMANIA
GREECEGREECE
NORWAYNORWAYSTÅL OG STÅL OG METALLGROSSISTENES METALLGROSSISTENES FORENINGFORENING
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HUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTESTHUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTEST
EUROMETAL ORGANIGRAMMENATIONAL ASSOCIATIONS OF STEEL, TUBE AND METALS DISTRIBUTIONNATIONAL ASSOCIATIONS OF STEEL, TUBE AND METALS DISTRIBUTION
EUROMETAL - THE VOICE OF EUROPEAN STEEL DISTRIBUTIONEUROMETAL - THE VOICE OF EUROPEAN STEEL DISTRIBUTIONEUROMETAL - THE VOICE OF EUROPEAN STEEL DISTRIBUTIONEUROMETAL - THE VOICE OF EUROPEAN STEEL DISTRIBUTION
COMMONRESOURCES
COMMONRESOURCES
COMMONINTERESTSCOMMON
INTERESTS
INTERNATIONAL STEELINTERNATIONAL STEELTRADE ASSOCIATIONTRADE ASSOCIATION
EUROPEAN ASSOCIATION EUROPEAN ASSOCIATION OF STEEL SERVICE CENTERSOF STEEL SERVICE CENTERS
STUDY GROUP OF DISTRIBUTORS STUDY GROUP OF DISTRIBUTORS OF STEEL, TUBES AND METALSOF STEEL, TUBES AND METALS
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HUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTESTHUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTEST
WHO IS GOING TO STOP THE FREE FALL
OF THE MARKETS?
WHO IS GOING TO STOP THE FREE FALL
OF THE MARKETS?
OBVIOUSLY THE STEEL PARTY HAS COME TO AN END . . . . . . OBVIOUSLY THE STEEL PARTY HAS COME TO AN END . . . . . . OBVIOUSLY THE STEEL PARTY HAS COME TO AN END . . . . . . OBVIOUSLY THE STEEL PARTY HAS COME TO AN END . . . . . . . . . . . . AFTER FOUR YEARS ON A VERY HIGH LEVEL. . . . . . AFTER FOUR YEARS ON A VERY HIGH LEVEL
AND IT IS NOT A SOFT LANDING BUT A VERY UGLY RECESSION!AND IT IS NOT A SOFT LANDING BUT A VERY UGLY RECESSION!
WHO IS GOING TO STOP THE FREE FALL OF THE MARKETS ?WHO IS GOING TO STOP THE FREE FALL OF THE MARKETS ?WHO IS GOING TO STOP THE FREE FALL OF THE MARKETS ?WHO IS GOING TO STOP THE FREE FALL OF THE MARKETS ?OUR POLITICAL LEADERS ?OUR POLITICAL LEADERS ?
. . . . AND WHAT PRICE ARE THEY WILLING TO PAY ?. . . . AND WHAT PRICE ARE THEY WILLING TO PAY ?
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HUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTESTHUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTEST
INDUSTRIAL CONFIDENCE PRODUCER PRICES UNEMPLOYMENTINDUSTRIAL PRODUCTION CONSUMER PRICES EMPLOYMENT
INDUSTRIAL MARKET MARKET PRICES LABOUR MARKET
INDUSTRIAL BUSINESS ACTIVITY AND PRICES ARE DOWNDIVING WITH AN UNPRECEDENTED DIMENSION AND SPEEDUNEMPLOYMENT IS EXPLODING WITH COMPARABLE DYNAMICS
RECESSION: SOME BASIC INDICATORS IN THE EURO-ZONERECESSION: SOME BASIC INDICATORS IN THE EURO-ZONERECESSION: SOME BASIC INDICATORS IN THE EURO-ZONERECESSION: SOME BASIC INDICATORS IN THE EURO-ZONERECESSION: A BASIC BUT IMPORTANT LESSONRECESSION: A BASIC BUT IMPORTANT LESSONRECESSION: A BASIC BUT IMPORTANT LESSONRECESSION: A BASIC BUT IMPORTANT LESSON
A MACROECONOMIC RECESSIONA MACROECONOMIC RECESSIONINTENSIFIES STRUCTURAL CHANGE OF INDUSTRIAL PRODUCTIONINTENSIFIES STRUCTURAL CHANGE OF INDUSTRIAL PRODUCTIONHARDLY EVER AGAIN REACHING THE FORMER LEVELHARDLY EVER AGAIN REACHING THE FORMER LEVEL
ECONOMIC CYCLEECONOMIC CYCLE
STRUCTURAL CHANGESTRUCTURAL CHANGE
IN MATURE AND SATURATED ECONOMIESIN MATURE AND SATURATED ECONOMIESTHE UPSWINGS AND DOWNSWINGS OF THE MACROECONOMIC CYCLETHE UPSWINGS AND DOWNSWINGS OF THE MACROECONOMIC CYCLESLOW DOWN OR SPEED UP CONTINUOUS STRUCTURAL CHANGESLOW DOWN OR SPEED UP CONTINUOUS STRUCTURAL CHANGE
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HUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTESTHUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTEST
The EU steel market is severely impacted by the recession and will be facing an unprecedented downturn this year. In the first half of 2009 the double-digit y-o-y decline in real consumption registered in Q4’08 and a further stock correction in distribution and at the end-user level will continue: apparent consumption will drop by 29%% y-o-y in Q1'09 and by a further 23% y-o-y in Q2'09; it will continue to decline in the remainder of 2009, albeit at a less dramatic rate; Q4’09 is expected to see some growth compared with the very low Q4’08 level. Following the 15% drop in 2009, some growth in apparent consumption is foreseen for 2010, owing to the absence of a huge stock reduction as seen in 2009.The significant deterioration in economic fundamentals has fully hit the EU steel using industries; the first half of this year will see output falling by 10% y-o-y. The second half is expected to see a gradual easing of the downward trend, but on balance production in the steel using sectors will still fall 7-8% in 2009. Particularly the automotive sector is badly affected by the recession, but also construction, steel tubes and the engineering sectors cannot escape a sharply downward trend. Most sectors will see a mild improvement in 2010.
The EU steel market is severely impacted by the recession and will be facing an unprecedented downturn this year. In the first half of 2009 the double-digit y-o-y decline in real consumption registered in Q4’08 and a further stock correction in distribution and at the end-user level will continue: apparent consumption will drop by 29%% y-o-y in Q1'09 and by a further 23% y-o-y in Q2'09; it will continue to decline in the remainder of 2009, albeit at a less dramatic rate; Q4’09 is expected to see some growth compared with the very low Q4’08 level. Following the 15% drop in 2009, some growth in apparent consumption is foreseen for 2010, owing to the absence of a huge stock reduction as seen in 2009.The significant deterioration in economic fundamentals has fully hit the EU steel using industries; the first half of this year will see output falling by 10% y-o-y. The second half is expected to see a gradual easing of the downward trend, but on balance production in the steel using sectors will still fall 7-8% in 2009. Particularly the automotive sector is badly affected by the recession, but also construction, steel tubes and the engineering sectors cannot escape a sharply downward trend. Most sectors will see a mild improvement in 2010.
EUROFER MARKET REPORT JANUARY 2009EUROFER MARKET REPORT JANUARY 2009
BASICALLY BAD NEWS!BASICALLY BAD NEWS!WHAT DOES THIS MEAN FOR THE STEEL SECTOR?WHAT DOES THIS MEAN FOR THE STEEL SECTOR?WHAT DOES THIS MEAN FOR THE STEEL SECTOR?WHAT DOES THIS MEAN FOR THE STEEL SECTOR?
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HUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTESTHUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTEST
UNPRECEDENTED STEEL PRODUCTION CUTS UNPRECEDENTED STEEL PRODUCTION CUTS UNPRECEDENTED STEEL PRODUCTION CUTS UNPRECEDENTED STEEL PRODUCTION CUTS
20082008 Q4/2008Q4/2008 JAN/2009JAN/2009IN % Y-O-YIN % Y-O-Y GLOBAL PRODUCTION = 1.330 KTOGLOBAL PRODUCTION = 1.330 KTO
ALBEIT NOT PREVENTING STEEL PRICES DOWNDIVINGALBEIT NOT PREVENTING STEEL PRICES DOWNDIVING
-5,5 -5,3
1,2
-1,2
2,6 3,7
-1,4 -1,2-3,3
-35,6
-25,0
-7,5
-14,5-11,7
-6,7
-21,6-19,0
-23,9
-51,2
-46,0
-35,6-37,8
2,4
-4,8
-41,4
-24,0
-39,0
-60,0
-50,0
-40,0
-30,0
-20,0
-10,0
0,0
10,0
NAFTA EU-27 NAM JAPAN CHINA INDIA S.AMERICA WORLDWORLD EX
CHINA
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HUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTESTHUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTEST
06 Q1 Q2 Q3 Q4 07 Q1 Q2 Q3 Q4 08 Q1 Q1 Q2 Q2 JUNE JULY SEPT OCT NOV DEC 09 JAN FEB EARLY END EARLY END
USD/MT1250
1050
850
650
450
250
AN EXTREMELY VOLATILE PRICE CYCLE ON A GLOBAL SCALEAN EXTREMELY VOLATILE PRICE CYCLE ON A GLOBAL SCALEAN EXTREMELY VOLATILE PRICE CYCLE ON A GLOBAL SCALEAN EXTREMELY VOLATILE PRICE CYCLE ON A GLOBAL SCALE
320
428480
453 465 482 476 468520
550600
720780
810
710
630600
460 480 500
06 Q1 Q2 Q3 Q4 07 Q1 Q2 Q3 Q4 08 Q1 Q1 Q2 Q2 JUNE JULY SEPT OCT NOV DEC 09 JAN FEB EARLY END EARLY END
USD/MT1250
1050
850
650
450
250
475500
585610
555580
545 530 545 540
720
900
9651004
845
720
560
460
390342
06 Q1 Q2 Q3 Q4 07 Q1 Q2 Q3 Q4 08 Q1 Q1 Q2 Q2 JUNE JULY SEPT OCT NOV DEC 09 JAN FEB EARLY END EARLY END
USD/MT1250
1050
850
650
450
250
580618
673630
579 595 583 580606
720
816
11241168
1210
1135
990
772
595 575550
06 Q1 Q2 Q3 Q4 07 Q1 Q2 Q3 Q4 08 Q1 Q1 Q2 Q2 JUNE JULY SEPT OCT NOV DEC 09 JAN FEB EARLY END EARLY END
USD/MT1250
1050
850
650
450
250
600 597 612 630 619649
690716
744 749
820
10501100
1244
1158
909855
820760 762
06 Q1 Q2 Q3 Q4 07 Q1 Q2 Q3 Q4 08 Q1 Q1 Q2 Q2 JUNE JULY SEPT OCT NOV DEC 09 JAN FEB EARLY END EARLY END
USD/MT1250
1050
850
650
450
250
483523
613 613 616649
678 670697 713
1130
1199
580520
560675
960
1087
1020
823
06 Q1 Q2 Q3 Q4 07 Q1 Q2 Q3 Q4 08 Q1 Q1 Q2 Q2 JUNE JULY SEPT OCT NOV DEC 09 JAN FEB EARLY END EARLY END
USD/MT1250
1050
850
650
450
250
CHINACHINA RUSSIARUSSIA USAUSA BRAZILBRAZIL EU 27EU 27
HOT ROLLED COIL DOMESTIC PRICE EX MILLHOT ROLLED COIL DOMESTIC PRICE EX MILL
HAVE WE ALREADY REACHED THE BOTTOM ?HAVE WE ALREADY REACHED THE BOTTOM ?
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HUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTESTHUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTEST
2008 20092008 2009
EU 27: IMPACT ON DISTRIBUTION BUSINESSEU 27: IMPACT ON DISTRIBUTION BUSINESSEU 27: IMPACT ON DISTRIBUTION BUSINESSEU 27: IMPACT ON DISTRIBUTION BUSINESSQUARTER 1/2009 COMPARED TO QUARTER 1/2008 QUARTER 1/2009 COMPARED TO QUARTER 1/2008
STEEL FOR INDUSTRIAL USESTEEL FOR INDUSTRIAL USE(SUPPLY CHAIN BUSINESS)(SUPPLY CHAIN BUSINESS)
STEEL FOR GENERAL USESTEEL FOR GENERAL USE(PROXIMITY BUSINESS)(PROXIMITY BUSINESS)
DEMANDDEMAND
- 30%- 30%
- 200 USD- 200 USD
PRICEPRICE
- 55%- 55%
- 500 USD- 500 USD
PRICEPRICE
DEMANDDEMAND
BUT DON'T FORGET:BUT DON'T FORGET:
QUARTER 1/2008 WAS A VERY GOOD ONE !QUARTER 1/2008 WAS A VERY GOOD ONE !
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HUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTESTHUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTEST
AS A CONSEQUENCE, ALREADY SINCE 2007AS A CONSEQUENCE, ALREADY SINCE 2007AS A CONSEQUENCE, ALREADY SINCE 2007AS A CONSEQUENCE, ALREADY SINCE 2007
= APPARENT CONSUMPTION= APPARENT CONSUMPTION
= REAL CONSUMPTION= REAL CONSUMPTION + 4,0% + 4,0%
-7,2% -7,2%
- 15,2% - 15,2%
+ 4,4 %+ 4,4 %
- 3,2%- 3,2%
- 8,2% - 8,2%
IN THE AFTERMATH OF THE 2008 DEVELOPMENTSIN THE AFTERMATH OF THE 2008 DEVELOPMENTSREAL STEEL CONSUMPTION MIGHT TURN DOWN EVEN FURTHER IN 2009REAL STEEL CONSUMPTION MIGHT TURN DOWN EVEN FURTHER IN 2009
GROWTH RATES OF EUROPEAN REAL STEEL CONSUMPTION ARE NEGATIVEGROWTH RATES OF EUROPEAN REAL STEEL CONSUMPTION ARE NEGATIVE
2007 ESTIMATE 2008 FORECAST 2009 2007 ESTIMATE 2008 FORECAST 2009
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HUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTESTHUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTEST
THE FINANCIAL CRISIS: KILLING THE STEEL MARKETS ?THE FINANCIAL CRISIS: KILLING THE STEEL MARKETS ?THE FINANCIAL CRISIS: KILLING THE STEEL MARKETS ?THE FINANCIAL CRISIS: KILLING THE STEEL MARKETS ?
A CENTURY'S MISTAKE . . . HOPEFULLY THE LAST ONE . . .
A CENTURY'S MISTAKE . . . HOPEFULLY THE LAST ONE . . .
AFTER 9-11 ANOTHER TRAUMA AFTER 9-11 ANOTHER TRAUMA
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HUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTESTHUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTEST
BUT WHAT REALLY HAPPENED IN 2008? BUT WHAT REALLY HAPPENED IN 2008? BUT WHAT REALLY HAPPENED IN 2008? BUT WHAT REALLY HAPPENED IN 2008?
EVERYBODY SEEMS TO NAME THE FINANCIAL CRISIS EVERYBODY SEEMS TO NAME THE FINANCIAL CRISIS AS THE MAIN REASON FOR THE TURMOIL IN THE STEEL MARKETSAS THE MAIN REASON FOR THE TURMOIL IN THE STEEL MARKETS
ACTUALLY WE SAW FOUR PROCESSES AFFECTING THE STEEL MARKET: ACTUALLY WE SAW FOUR PROCESSES AFFECTING THE STEEL MARKET:
A FINANCIAL CRISIS INCLUDING A CREDIT CRUNCH A FINANCIAL CRISIS INCLUDING A CREDIT CRUNCH
A GLOBAL ECONOMIC DOWNTURN INTO A RECESSIONA GLOBAL ECONOMIC DOWNTURN INTO A RECESSION
AN AN EXTREMELYEXTREMELY VOLATILE STEEL PRICE CYCLE VOLATILE STEEL PRICE CYCLE
A STOCK MANAGEMENT TO REDUCE WORKING CAPITALA STOCK MANAGEMENT TO REDUCE WORKING CAPITAL
TWO MACROECONOMIC PROCESSES: TWO MACROECONOMIC PROCESSES:
TWO STEEL SPECIFIC PROCESSES: TWO STEEL SPECIFIC PROCESSES:
THIS IS LARGELY AN ALIBI ARGUMENT!THIS IS LARGELY AN ALIBI ARGUMENT!
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HUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTESTHUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTEST
RECESSION: CHALLENGE AND CHANCE - MANAGEMENT OPTIONSRECESSION: CHALLENGE AND CHANCE - MANAGEMENT OPTIONSRECESSION: CHALLENGE AND CHANCE - MANAGEMENT OPTIONSRECESSION: CHALLENGE AND CHANCE - MANAGEMENT OPTIONS
What do do?. . . .. . . .. . . .. . . .. . . .
What do do?. . . .. . . .. . . .. . . .. . . .
The market will not give credit for yesterday’s success
The experiences of the past are not necessarily the solutions for tomorrow He who does not move in time will be removed in time
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HUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTESTHUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTEST
RECESSION: CHALLENGE AND CHANCE - MANAGEMENT OPTIONSRECESSION: CHALLENGE AND CHANCE - MANAGEMENT OPTIONSRECESSION: CHALLENGE AND CHANCE - MANAGEMENT OPTIONSRECESSION: CHALLENGE AND CHANCE - MANAGEMENT OPTIONS
What do do?. . . .. . . .. . . .. . . .. . . .
What do do?. . . .. . . .. . . .. . . .. . . .
Macroeconomic trends affect different sectors differently
Given the heterogeneous sectors general recommendationsare very limitedBut there are some basiccrash management rules . . . .
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HUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTESTHUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTEST
OPERATIONALMANAGEMENT
ASSETSMANAGEMENT
FINANCIALMANAGEMENT
SALES GROWTH EBITDA / EBIT / PBT WORKING CAPITAL
CASH FLOWS FROM BUSINESSOPERATION
CAPITAL EMPLOYED INVEST DECISIONS TIME HORIZON
CAPEX CASH OUTDIVESTURES CASH IN.
FINANCIAL DEBT . GEARING RATIO COST OF CAPITAL
WEIGHTED AVERAGE COST OFCAPITAL = WACC
FREE CASHFLOWS
DISCOUNTING RATE
ENTERPRISE
VALUE
THE FINANCIAL DEBT PARADOX: HAVING BANKERS LENDING YOU MONEY TODAY IS NO MORE CONSIDERED AS A LIABILITY BUT AS AN ASSET FOR COMPANIES
SEEKING ENTERPRISE VALUE INSTEAD OF SHAREHOLDER VALUE !SEEKING ENTERPRISE VALUE INSTEAD OF SHAREHOLDER VALUE !THE RECESSION HAS REVERSED THE MANAGEMENT PARADIGMATHE RECESSION HAS REVERSED THE MANAGEMENT PARADIGMATHE RECESSION HAS REVERSED THE MANAGEMENT PARADIGMATHE RECESSION HAS REVERSED THE MANAGEMENT PARADIGMA
VALUE CREATIONLEVERS
MANAGEMENTDECISIONS
CASH FLOWSOURCING
VALUINGFREE CASH FLOWS
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THE RECESSION HIGH STAKES CASH GAMETHE RECESSION HIGH STAKES CASH GAMETHE RECESSION HIGH STAKES CASH GAMETHE RECESSION HIGH STAKES CASH GAMETHE STEEL BARONS OF THE GLORIOUS PAST ARE ABOUT TO GOTHE STEEL BARONS OF THE GLORIOUS PAST ARE ABOUT TO GO
PLAYING AT FOUR TABLES SIMULTANEOUSLYPLAYING AT FOUR TABLES SIMULTANEOUSLY
COST = LOSSCOST = LOSS
CUTCOSTS
CUTCOSTS
NO COST = PROFITNO COST = PROFIT
INVESTMENT = RISKINVESTMENT = RISK
LIMITCAPEXLIMIT
CAPEX
NO RISK = FUNNO RISK = FUN
DEBT = DEATHDEBT = DEATH
REDUCE WCR
REDUCE WCR
CASH = LIFECASH = LIFE
BUSINESS = DANGERBUSINESS = DANGER
ADAPTPORTFOLIO
ADAPTPORTFOLIO
LESS = MORELESS = MORE
NEEDED TIME NEEDED TIME
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HUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTESTHUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTEST
1967: ALL YOU NEED1967: ALL YOU NEEDIS LOVEIS LOVE
EUROMETAL POSITIONEUROMETAL POSITIONEUROMETAL POSITIONEUROMETAL POSITION
GENERAL ASSEMBLY FEBRUARY 2009GENERAL ASSEMBLY FEBRUARY 2009
2009: ALL YOU NEED2009: ALL YOU NEEDIS CASHIS CASH
MANAGING FOR FREE CASH FLOWS IN STEEL, TUBES AND METALS DISTRIBUTION & TRADING MANAGING FOR FREE CASH FLOWS IN STEEL, TUBES AND METALS DISTRIBUTION & TRADING
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HUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTESTHUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTEST
DON'T START A PRICE CYCLE WHEN FUNDAMENTAL ECONOMIC INDICATORS SHOW A DOWNWARD TREND!DON'T START A PRICE CYCLE WHEN FUNDAMENTAL ECONOMIC INDICATORS SHOW A DOWNWARD TREND!
STEEL PRODUCTION IS A BASE INDUSTRY AND ONLY EXCEPTIONALLY TRIGGERS THE USE OF STEEL!STEEL PRODUCTION IS A BASE INDUSTRY AND ONLY EXCEPTIONALLY TRIGGERS THE USE OF STEEL!
STEEL PRODUCTION (AND STEEL DISTRIBUTION) ARE A DERIVATIVE BUSINESS!STEEL PRODUCTION (AND STEEL DISTRIBUTION) ARE A DERIVATIVE BUSINESS!
2008 / 2009: LESSONS TO BE FINALLY LEARNED?2008 / 2009: LESSONS TO BE FINALLY LEARNED?2008 / 2009: LESSONS TO BE FINALLY LEARNED?2008 / 2009: LESSONS TO BE FINALLY LEARNED?
AND DON'T START RENEGOTIATIONS OF YEARLY CONTRACTS IN SUCH A NEGATIVE ECONOMIC SCENARIO!AND DON'T START RENEGOTIATIONS OF YEARLY CONTRACTS IN SUCH A NEGATIVE ECONOMIC SCENARIO!
REGULARLY STEEL PRODUCTION IS FULLY DEPENDENT ON THE UPS AND DOWNS OF THE STEEL CONSUMING INDUSTRIESREGULARLY STEEL PRODUCTION IS FULLY DEPENDENT ON THE UPS AND DOWNS OF THE STEEL CONSUMING INDUSTRIES
POOR GDP GROWTH = POOR INDUSTRIAL PRODUCTIONPOOR GDP GROWTH = POOR INDUSTRIAL PRODUCTIONPOOR GDP GROWTH = POOR INDUSTRIAL PRODUCTIONPOOR INDUSTRIAL PRODUCTION = POOR STEEL CONSUMPTIONPOOR GDP GROWTH = POOR INDUSTRIAL PRODUCTIONPOOR INDUSTRIAL PRODUCTION = POOR STEEL CONSUMPTIONPOOR GDP GROWTH = POOR INDUSTRIAL PRODUCTIONPOOR INDUSTRIAL PRODUCTION = POOR STEEL CONSUMPTIONPOOR STEEL CONSUMPTION = POOR STEEL PRODUCTION
POOR GDP GROWTH = POOR INDUSTRIAL PRODUCTIONPOOR INDUSTRIAL PRODUCTION = POOR STEEL CONSUMPTIONPOOR STEEL CONSUMPTION = POOR STEEL PRODUCTION
2020
HUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTESTHUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTEST
- EXPORT- EXPORT
STEEL MARKETSTEEL MARKET
STEEL PRODUCTIONSTEEL PRODUCTION
STEEL CONSUMING INDUSTRIESSTEEL CONSUMING INDUSTRIES STEEL DISTRIBUTIONSTEEL DISTRIBUTION
+ IMPORT+ IMPORT
MARKET SUPPLYMARKET SUPPLY
MARKET SUPPLY = STEEL PRODUCTION - EXPORTS + IMPORTS ?MARKET SUPPLY = STEEL PRODUCTION - EXPORTS + IMPORTS ?
A CLASSICAL TOP DOWN PERCEPTION !A CLASSICAL TOP DOWN PERCEPTION !
STEEL MARKETSTEEL MARKET
STEEL CONSUMING INDUSTRIESSTEEL CONSUMING INDUSTRIES
MARKET SUPPLYMARKET SUPPLY
THE NECESSARY BOTTOM UP PERCEPTION !THE NECESSARY BOTTOM UP PERCEPTION !
STEEL DISTRIBUTIONSTEEL DISTRIBUTIONSTEEL PRODUCTIONSTEEL PRODUCTION
EXPORTEXPORT IMPORTIMPORT
MARKET ------------------------- SUPPLYMARKET ------------------------- SUPPLY
MARKET SUPPLY = SUPPLY OF THE STEEL CONSUMING INDUSTRIES !MARKET SUPPLY = SUPPLY OF THE STEEL CONSUMING INDUSTRIES !MARKET SUPPLY STRUCTURESMARKET SUPPLY STRUCTURESMARKET SUPPLY STRUCTURESMARKET SUPPLY STRUCTURES
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HUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTESTHUTNICTWO 2009 KATOVICE 17 APRIL 2009JUERGEN NUSSER: THE SURVIVAL OF THE FITTEST
Juergen NusserJuergen Nusser
PRESIDENTPRESIDENTSteel Markets 2009Steel Markets 2009
The Survival of the FittestThe Survival of the Fittest
VICE PRESIDENTVICE PRESIDENT
THE SURVIVAL OF THE FITTESTTHE SURVIVAL OF THE FITTEST THE SURVIVAL OF THE FITTESTTHE SURVIVAL OF THE FITTEST DON'T HOPE TO SURVIVE, BUT TRAIN FOR IT!DON'T HOPE TO SURVIVE, BUT TRAIN FOR IT!AND MOST IMPORTANT - MOVE FAST!AND MOST IMPORTANT - MOVE FAST!
DON'T BE A SITTING DUCK!DON'T BE A SITTING DUCK!
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THANK YOU THANK YOU FOR YOUR INTEREST AND ATTENTIONFOR YOUR INTEREST AND ATTENTIONTHANK YOU THANK YOU FOR YOUR INTEREST AND ATTENTIONFOR YOUR INTEREST AND ATTENTION
17 APRIL 200917 APRIL 200917 APRIL 200917 APRIL 2009