Capital Markets Day 21 April 2016
Capital Markets Day Capital Markets Day Ian Lawson Chief Executive Officer Introduction 2
Capital Markets Day Introduction Presenting In attendance Ian Cochrane Alan Dunsmore Chief Operating Director Group Finance Director Gary Wintersgill Wayne Barron Managing Director, Severfield (UK) Ltd Production Director Ian Dawson Design Associate Director Martin Kelly Strategic Business Development Director Kevin Campbell Business Improvement Associate Director
Capital Markets Day Agenda • Composite Metal Flooring ( CMF ) • Adding value for our customers • Operational and IT improvements • Lunch • Introduction to factory tour • Factory tour • Q & A • Transport to station at 4:15pm
Capital Markets Day Steel industry update • UK steel remains an important part of our supply chain and is now being supported by UK Government in public procurement projects • Severfield procures three main steel types; sections, plate and tube • Sections are supplied by TATA Long Products, which is being acquired by Greybull Capital • Plate is supplied by UK mills; Spartan in Newcastle and European mills; Voestalpine, Dan Steel, Dillinger • Tube is supplied through a distributor; the supply is a mix of TATA in the UK and European mills Whilst Severfield seeks to support UK steel, approximately only 40% 1 of the steel • used in construction is originally sourced from the UK • Trading agreements are in place with all the alternative providers who currently supply the UK such as Arcelor Mittal, Saltzgitter, Celsa We remain well positioned to manage any change in UK steel supply 1 BCSA estimate
Capital Markets Day Capital Markets Day Ian Cochrane Chief Operating Officer Composite Metal Flooring (CMF) 6
Capital Markets Day Composite Metal Flooring (CMF) The deal • Deal completed on the 16 November 2015 • Severfield plc acquired 50% of the share capital of CMF Limited • Consideration £4.0 million • Plus additional consideration of £2.5 million based on the performance of the business
Capital Markets Day Composite Metal Flooring (CMF) The product Shear Stud connectors
Capital Markets Day Composite Metal Flooring (CMF) Business rationale Decking – 0.5 million m 2 Severfield annual requirement: Shear Studs – 2.0 million Decking – 4.0 million m 2 Current market, approximately: Shear Studs – 12.0 million Decking – 1.0 million m 2 CMF volumes before Severfield: Shear Studs – 5.0 million
Capital Markets Day Composite Metal Flooring (CMF) Combined business Largest independent manufacturer of metal decking and shear stud connectors in the UK. Severfield plc Stud Welders Limited CMF 50% 50% Additional 500,000 m² 2,000,000 m² 1,000,000 m² usage Existing usage Capacity User and installer User and installer improving profit margin Shared ownership allows Third party fabricators Severfield Commercial the business to segment Main Contractors Projects the market and keeps competitive factors to a Medium to small projects Large projects minimum
Capital Markets Day Composite Metal Flooring (CMF) Video
Capital Markets Day Capital Markets Day Gary Wintersgill Managing Director, Severfield (UK) Ltd Ian Dawson Associate Design Director Adding value for our customers 12
Capital Markets Day Adding value for our customers Value Design Engineering Tender Fabrication Stage Project and Risk Management Early Contractor Construction Involvement (ECI) Performance and Repeat Business 13
Capital Markets Day Adding value for our customers Early Contractor Involvement (ECI) Early Contractor Involvement Increase plate thicknesses to reduce amount of stiffening in crane beams Increase span of gantry flooring
Capital Markets Day Adding value for our customers Project risks Tender Stage • Budgets • Commercial • Design • Interface
Capital Markets Day Adding value for our customers Buildability Tender Stage
Capital Markets Day Adding value for our customers Buildability Tender Stage
Capital Markets Day Adding value for our customers What we can provide Design Design primarily encompasses the following: • • Permanent works design Temporary works design • • Connection design Specialist lifting equipment design • • Temporary stability analysis Tender stage design/value engineering
Capital Markets Day Adding value for our customers How Severfield engineers create value Design Value engineering New ideas and solutions • Specialist knowledge as structural engineers • Provide a commercial edge • Repeat order business based on trust • Behaviour steel in a fire ‘Intumescent paint’ Fire engineering 3D analysis and design using specialist software Permanent works Erection complex steel frames; bridge launches Temporary works Saving hours in factory, simplification Connection design Complex analysis to provide solutions Finite element analysis
Capital Markets Day Adding value for our customers Fire engineering Design - Value engineering steel floor beams Fabsec design - How does the steel react in a fire - we do add va value Steel in a fire - Intumescent paint – expands and protects the steel Special paint? Minimise steel and the • amount of paint Sometimes increase • steel weight to reduce the paint
Capital Markets Day Adding value for our customers Permanent works design Design and Build projects Design Economic steel frame • analysis and design Designed to suit our • fabrication process and facilities Competitive Tender • best design solution secures the project
Capital Markets Day Adding value for our customers Complex temporary works and connection design Design Building The Shard
Capital Markets Day Adding value for our customers Connection design Design Connection from primary truss to support towers is a true pin Allows rotation
Capital Markets Day Adding value for our customers Specialist temporary works Design Tennison Road Bridge live launch
Capital Markets Day Adding value for our customers Specialist lifts Design Liverpool Football Club, Anfield Stadium 670 tonne tandem lift
Capital Markets Day Adding value for our customers Volumetric and specialist Fabrication 26
Capital Markets Day Adding value for our customers Sublime to the ridiculous Construction
Capital Markets Day Martin Kelly Strategic Business Development Director Kevin Campbell Business Improvement Associate Director Operational and IT improvements 28
Capital Markets Day Operational improvements Current industry wide challenges Design • Complexity that comes from ‘engineered to order’ projects – every steel assembly is unique Manufacturing • Balancing lines for maximum throughput • Pockets of underutilisation within lines and facilities • Configuration of our facilities – how to layout for constant change • Specialist equipment required for certain products Info form rmatio ation n flow • Huge amounts of data available but across different systems and formats
Capital Markets Day Operational improvements Current position Design process Complex process with numerous Concept Detailed Connection Fabrication design design design drawing information sources Phases Manufacturing process Semi Steel Logistics automated Manual Manual Logistics Site erection procurement inward saw drill fabrication paint outbound blast Cost data received Cost data received Cost data received Information flow Fabrication CNC data drawings transfer Steel Rolling nesting programme Planning Cost data received Cost data received
Capital Markets Day Operational improvements Why are we doing this? • More with the same The skills shortage is real, and we need to enable our skilled staff and allow them to increase productivity levels • Remove pockets of underutilisation/inefficiency • Reduce costs per tonne and increase margin • Keep ahead of the competition
Questions www.severfield.com
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