《麦肯锡—growthinthemetalsindustry.ppt》由会员分享，可在线阅读，更多相关《麦肯锡—growthinthemetalsindustry.ppt（45页珍藏版）》请在三一办公上搜索。
1、Growth in the Metals Industry,Global Metals and Mining Sector,CONFIDENTIAL,CEO presentation of Growth in the Metals Industry,April 1999,1,AGENDA,Value creation by profitable growth:Can the barriers be overcome?Winners have shown impressive growth records in recent yearsThe key for future successReac
2、hing world class within the right growth strategyAchieving excellence in growth-related success factors,2,AGENDA,Value creation by profitable growth:Can the barriers be overcome?Winners have shown impressive growth records in recent yearsThe key for future successReaching world class within the righ
3、t growth strategyAchieving excellence in growth-related success factors,3,*CDAX Eisen und StahlSource:xxxxx,STOCK PERFORMANCE METALS vs.MARKET AVERAGE GERMANY,Raise in stock price,1989-99,4,+,+,Source:xxxxx,GROWTH DEFINITION BY THE SALES/PROFITABILITY GAMEBOARD,Value creation,Value destruction,Sales
4、,ROIC,Definition:Growth=sales growth on high level of profitability(i.e.,ROIC WACC),WACC,5,SALES AND ROIC,1995-98,Source:Client,xxxxx,ROICPercent,Sales USD billions,ROIC=14%=long-term top 20%of metals industries,1996,1998,DISGUISED REAL EXAMPLE,1995,1997,Successful restructuring,WACC,Futuregrowth,6,
5、MARKET VALUE OF EQUITY EXAMPLE,Source:Stock exchange,xxxxx,Market performance 1988-98:CAGR 15.5%,1998,This translates to raising economic profit by 16 to 21%every year,2008,Value gap,USD billions,DISGUISED REAL EXAMPLE,7,Economic profit 1998,CHANGE OF ECONOMIC PROFIT BY LEVER,*Translates to USD 34 b
6、illion market value*Reduce invested capital by 15%,increase ROS from 1.8 to 3.0%(together leading to ROIC=19%)Source:xxxxx,USD millions,Optimize current business*,Expanding current business and building new businesses,Target economic profit in 2008,860-1,760,1,800-2,700*,Annual sales growth rate bet
7、ween 9 and 14%until 2008(total increase in sales 140-280%),DISGUISED REAL EXAMPLE,8,Source:xxxxx,GROWTH OBSTACLES IN METALS,GROWTH,Flat cost curve,?,Commoditization,Stagnating markets,Overcapacities,9,AGENDA,Value creation by profitable growth:Can the barriers be overcome?Winners have shown impressi
8、ve growth records in recent yearsThe key for future successReaching world class within the right growth strategyAchieving excellence in growth-related success factors,10,OUTSTANDING GROWTH COMPANIES IN METALS,*1989-97*1993-97*1991-97Source:xxxxx analysis,Percent,Company,Business,CAGR sales 1990-97,R
9、OIC 1995-97,Value creation,Ispat(UK),Steel,Maverick Tube*(USA),Pipes,Nucor(USA),Steel,Chase*(USA),Brass,steel tubing,Rautaruukki(FIN),Steel,Rheinzink(G),Zinc products,Mueller*(USA),Copper products,All companies were among the top 20%for growth of market value added or economic profit,Acerinox(Spain)
10、,Riva(I),Stainless steel,Steel,Castings(GB),Iron casting,11,Source:Annual reports,xxxxx,COMPANY PROFILE NUCOR,1997,12,1990,GROWTH CREDENTIALS NUCOR,Source:Disclosure,91,92,93,94,95,96,1997,1990,91,92,93,94,95,96,1997,1990,91,92,93,94,95,96,1997,1990,91,92,93,94,95,96,1997,CAGR 16%,SalesUSD billions,
11、Net incomeUSD millions,ROICPercent,Market capitalizationUSD billions,13,Source:Annual reports,xxxxx,SUMMARY GROWTH CASE NUCOR,14,NUCORS TECHNOLOGICAL PIONEERING,*Has not met expectations to dateSource:Annual reports,press clippings,Harvard Business Cases,International Directory of Companies,xxxxx in
12、terviews,1965,1975,1985,1995,First minimillto challenge inte-grated producers downstream,Pioneers thin slab casting,Pioneers iron carbide process,Sets up one of the first minimills,15,*Meanwhile also Ispat Inland(U.S.),BF/BOF and EAFSource:Annual reports,xxxxx,COMPANY PROFILE ISPAT INTERNATIONAL,199
13、7,16,GROWTH CREDENTIALS ISPAT INTERNATIONAL,*Based on EBITDA and approximation of invested capital based on total assets(no full balance sheets available before 1996)Source:Annual reports,xxxxx,1992,SalesUSD millions,93,94,95,96,1997,EBITDAUSD millions,1992,93,94,95,96,1997,ROIC*Percent,Economic pro
14、fitUSD millions,CAGR 45%,1992,93,94,95,96,1997,1992,93,94,95,96,1997,17,Source:Annual reports,xxxxx,SUMMARY GROWTH CASE ISPAT INTERNATIONAL,18,ISPAT CIL TURNAROUND,MAY 1989,PriceUSD millions,Billet productionThousands of tons,Product mixPercent,Buy at low price,Maximize utilization,Upgradeproduct mi
15、x,1979 green-field price,1989 acqui-sition cost,April 1989,July 1989,Utilization rate,DRI percentage,36%,74%,Low,92-95%,Commodity products,Higher-value products,High carbon Electrical gradeCold-heading specialty rod,Before acquisition,After acquisition,Source:Annual reports,xxxxx,16.4,34.6,19,Source
16、:Annual reports,xxxxx,COMPANY PROFILE RAUTARUUKKI,1997,20,GROWTH CREDENTIALS RAUTARUUKKI,Source:Annual reports,xxxxx,1990,SalesUSD billions,91,92,93,94,95,96,1997,1990,Net incomeUSD millions,91,92,93,94,95,96,1997,1990,ROICPercent,91,92,93,94,95,96,1997,1990,Market capitalizationUSD millions,91,92,9
17、3,94,95,96,1997,CAGR 11%,21,Source:Annual reports,xxxxx,SUMMARY GROWTH CASE RAUTARUUKKI,22,RAUTARUUKKIS STRATEGY FOR MARKET LEADERSHIP,*Outokumpu stainless steel;Imatra low-alloy engineering steelSource:xxxxx,Domination of wholesaler market,Consolidation of Nordic long steel business to prevent fore
18、ign entries into flat steel business,Noncompetition with other Finnish steel companies*,Shortest lead times and highest delivery reliability,Superior customer bonding,High flexibility and wide product range,Other services for customers(inventory management),23,AGENDA,Value creation by profitable gro
19、wth:Can the barriers be overcome?Winners have shown impressive growth records in recent yearsThe key for future successReaching world class within the right growth strategyAchieving excellence in growth-related success factors,24,*1990-97*1995-97Source:xxxxx,STRATEGIC POSTURES OF GROWTH COMPANIES,CA
20、GR sales*,Average ROIC*,Attacking the own industry,Companies,Growth credentials,RheinzinkRautaruukkiMaverick TubeChase Industries,NucorIspatAcerinoxMueller IndustriesRivaCastings,Average of metals industry,Discovering the customer,CAGR market capitalization*,25,Source:xxxxx,CHARACTERIZATION OF STRAT
21、EGIC POSTURES,Discovering the customer,Product leadershipAttractive niche markets,high quality products,value communication,branding,Service leadershipShortest leadtimes,highest flexibility,best technical consulting,service-oriented operations,Performance-based organic expansionPerformance managemen
22、t,superior process technologies,greenfield expansion,CASTINGS P.L.C.,Leverage by acquired assetsAcquisition of undervalued targets,effective turnaround,performance culture,financial engineering,deal structuring,Ispat International N.V.,Be world classin at least one dimension!,Attacking the own indus
23、try,26,WORLD CLASS IN CRITICAL DIMENSION,EXAMPLES,Ispat International N.V.,Best deal structuring,Most efficient turnaround,Highest deliv-ery reliability in brass products,Most innovative energy products,CASTINGS P.L.C.,Most up-to-date casting technology,Most performance-oriented culture,Most modern
24、technology in stainless steel,Lowest cost in tube,Shortest lead times in steel,Most com-plete zinc product range,Source:xxxxx,27,STRATEGY POSTURE vs.ECONOMIC PERFORMANCE,Source:Annual reports,xxxxx,Strategy,Economic performance,You have to focus in order to win!,Clear focus on Discovering the custom
25、er,Clear focus on Attacking the own industry,28,Source:xxxxx,MATCHING OF CUSTOMER VALUE,CAPABILITIES,AND STRATEGIC POSTURE,Capability platform,Strategic posture,Customer value,Quality,Price,Service,.,.,29,Markets with price sensitive customers:steel bars,hot rolled products,etc.Little room for diffe
26、rentiation by non-price factors,Source:xxxxx,MATCHING OF CUSTOMER VALUE,CAPABILITIES,AND STRATEGIC POSTURE,EXAMPLE NUCOR,Capability platform,Strategic posture,Customer value,Mainly price/cost game,Performance-based organic expansion,Superior operations,process innovation,risk management,effective co
27、ntrolling mechanisms,extremely performance-oriented culture,Aggressive expansion and cost leadership by transformational process innovation,ruthless performance management,Cost-focused profile,30,Source:xxxxx,MATCHING OF CUSTOMER VALUE,CAPABILITIES,AND STRATEGIC POSTURE,EXAMPLE RAUTARUUKKI,Identifie
28、s ship building industry as a segment with delivery time as KBF in an otherwise rather price game industry,Capability platform,Strategic posture,Customer value,Potential market game,Service differentiation,Tailors capabilities to customers value:builds up superior logistics,marketing skills,flexible
29、 operations,Discovers the customer by offering the shortest lead times,highest order flexibility,and highest delivery reliability in the European steel sector,Market-focused profile,31,AGENDA,Value creation by profitable growth:Can the barriers be overcome?Winners have shown impressive growth record
30、s in recent yearsThe key for future successReaching world class within the right growth strategyAchieving excellence in growth-related success factors,32,KEY SUCCESS FACTORS OF GROWING METALS COMPANIES,Source:xxxxx,Organizing for sustained growth,Marketing,Innovation,Mergersandacquisitions,Searching
31、 for opportunities,Laying the foundation,Balancing growth horizons,Achieving a balanced portfolio of busi-nesses,which are in the mature,emerging,or embryonic state of their life cycle,Strong basis for value-driven growth through operational excellence,portfolio optimization and stretch targets and
32、visions,Systematic identifi-cation of new busi-ness opportunities along all possible strategic degrees of freedom,Building up capa-bility-based strengths in marketing,inno-vation,or M&A,Managing business by horizon and building an entre-preneurial organi-zation,33,NUCOR GROWTH HORIZON EVOLUTION,Sour
33、ce:Annual reports,xxxxx interviews,Mid-60s,Mid-70s,Mid-80s,Early 90s,Horizon 3,Create viable options,Horizon 2,Build emerging business,Horizon 1,Extend and defend core business,Cold finished bars,Minimills,Steel joists,Divested,Tested,Replicated,Beam JV with YamamotoSteel sheet mak-ing using thin sl
34、ab casting,Cold finished bars,MinimillsSteel joists,Tested,Replicated,Iron car-bide tech-nology,Beam productionSteel sheet,Cold finished barsMinimillsSteel joists,Tested,Replicated,EXAMPLE,34,CHARACTERISTICS:STRONG BASIS FOR VALUE-DRIVEN GROWTH,Operational excellence in core business measured by ret
35、urn on capital costs,Targeted and continuous portfolio optimization,1,Strong basis for value-driven growth,2,3,Examples,Rigorous execution of 1 and 2 and external relationship management lead to confidence of investors,All companies are among the top 20%in profitability of the metals industry(e.g.,a
36、verage ROIC Rheinzink 50%)Often cost-leader(e.g.,Ispat,Maverick Tube,Acerinox)Superior quality(e.g.,Chase,Nucor,Maverick Tube,Rheinzink),Streamlined portfolio:divestment of non-strategic units(e.g.,Nucor,Ispat,Riva,Mueller)and expansion into strategic areas(Riva,Ispat,Maverick Tube)Focus on certain
37、segment or material(Acerinox,Rheinzink),Transparency through informative annual reports(all companies),open communication(e.g.,Nucor,Maverick Tube),active public relations(e.g.,Acerinox through Cedinox),Source:Annual reports,press clippings,xxxxx,OVERVIEW,35,RAUTARUUKKIS EXPLORATION OF GROWTH OPPORT
38、UNITIES,Forward integration from pure hot into cold rolling and downward activities up to distributionLong products,New pro-duction sites in Eastern Europe/Baltic countries,Consolidation of long steel market(Fundia)Consolidation of distribution in Finland(Asva and Kesko-metalli 2/3 of market),Early
39、entry in JIT shortest lead times in EuropeFlexible order manage-ment(due to small converter size)Own transportation company,Rautaruukkis employees work at customers to control inventories and place ordersDelivery flexibility,In new markets,Strong customer bonding(services,visits,workshops,etc.),Sour
40、ce:Annual reports,press clippings,xxxxx,EXAMPLE,36,GROWTH PATHS IN METALS INDUSTRIES,Growth paths,Examples,Rheinzink:superior value communication and customer bondingRautaruukki:highest quality of delivery services in EuropeSSAB:build up brand with significant premium,Nucor:achieved leadership posit
41、ion through various technological breakthroughsMaverick Tube:Leadership in product innovations in energy tubular productsVoest Alpine:development of 120m rail,Ispat:fastest growing steel company of the world by acquisitionsMueller Industries:Leverage of skills and distribution network through acquis
42、itions in related product areas,Source:xxxxx,Internal,External,OVERVIEW,37,SSAB SUCCESSFUL BRANDING,Source:SSAB,xxxxx,Exceptionally aligned value delivery chain,Superiority in selling the value,Highly differentiated value proposition,tailored to customer valueTargeting latent demand with fine-tuned
43、value proposition by subsegmentStaying ahead by relentlessly enhancing value proposition,Direct sales with strong technical supportProduct develop-ment closely linked to customersProduction highly focused on niche productsFlat,performance-focused organization,Strong and consistent value communicatio
44、nSales organization focused on selling the value Systematic reinforcement of brand name(painted on all products,communication of brand names via campaigns,etc.),Distinct value proposition tailored to customer segment needs,EXAMPLE,38,Finland 1990,RAUTARUUKKI DELIVERY TIMES,Days from receipt of order
45、 to delivery,*Major European steel makersSource:Annual reports,press clippings,xxxxx,Finland 1996,Europe1996,Europe1996,Europe1996,Rautaruukki,Compet-itor A*,Rautaruukkis activities,Increase in flexibility throughout steel millSmall batch sizeChange of rolls in 12 minutes2,000 products offered;order
46、 size as small as 2 tons possibleIncrease in efficiency Use of electronic data inter-change with customersImprovement of transport logisticsEstablishment of own transportation company with superior logistics,Superior delivery time and reliability allow Rautaruukki to earn a price premium of 3-5%,Com
47、pet-itor B*,EXAMPLE,39,Source:Harvard Business Cases,xxxxx interviews,NUCOR INNOVATION MANAGEMENT,Strategy,Flat steel largest segment but highly competitiveEntry with conven-tional technology too expensive(USD 2 billion),Need for dramatic reduction of production costGo for transformational process i
48、nnovation,Knowledge management,Own experiments for thin slab casting had not been very promising,Acquisition of tech-nology from SMS(based on previous joint research efforts),Risk management,Time and success of technology implemen-tation at risk,Performance contracts with SMSIndependence of downstre
49、am businessLower grade steel as alternative market,+,+,EXAMPLE,40,ISPAT MINIMILL ACQUISITION SCREENS,*Stable and competitive energy supplies and reliable transportation systemSource:Annual reports,xxxxx,?,Number of minimills,Asia,Western Europe,North America,Other,Eastern Europe,South America,100%=1
50、,078 plants,3,3,3,3,Low pur-chase price relative to value of land and assets,Built-out infra-structure*(W.Europe and N.America),Potential to improve produc-tivity,Coastal location to allow for DRI usage and steel shipments,Irish Ispat,EXAMPLE,41,*Still an exception,largely dominated by steel enginee
