metal one corporation company presentationmtlo.co.jp/ch/news/2003/030416e.pdf · (c)copyright 2003...

Metal One Corporation Metal One Corporation Company PresentationCompany Presentation

April 16, 2003April 16, 2003

2(C)Copyright 2003 Metal One Corporation. All rights reserved.

IndexIndex

Before and After Integration

Integration Overview

Time Frame for Establishing Business Models

The Medium-Term Management Plan (The Numbers)

Three Innovations

(1) Business Consolidation

(2) Investments for Growth

(3) Administrative Reform

・・・ 8

・・・9

・・・10

・・・11

・・・12

・・・13

・・・14

Outline of Medium-Term Consolidated Management Plan ・・・ 3

Metal One’s Vision and Mission ・・・ 4

・・・ 5

Strengths Stemming From Consolidation ・・・ 6

The Industry’s Strongest Operating Base ・・・ 7

Fiscal 2003-2005 Targets (Approximate) ・・・15

Metal One’s Business Model ・・・16

(Reference) Profile of Metal One Corporation ・・・ 17


Outline of MediumOutline of Medium--Term Consolidated Management Plan

Need to quickly capture benefits of consolidation - Complete integration of personnel

and organizations- Eliminate redundancy and further

reduce operating expenses - Become the industry leader

Stakeholder expectations- Shareholders: Isolate company from risk factors and increase consolidatedearnings

- Banks: Financial soundness and cash flows- Employees: A company with a future- Industry: Value-added products and services

Rapid changes in the steel products industry- Industry realignment- Globalization of customers- Contraction of domestic market- Polarization—growth vs no-

growth; winners vs losers

Term Consolidated Management Plan

Innovate and reform without resting on laurels or clinging to conventional wisdom

Maximize Group valueMaximize Group valuewith unique business models

and better management

Qualitative Issues(1) Uniform Group management based on sound governance(2) Build a flexible and stable Group financial structure and financial position(3) Energize the organization, and formulate human resources strategy to use people to increase competitiveness

A chief instigator of innovation in steel logistics in Japan- Metal Market Maker- Metal Value Optimizer

Create a New Metal One Group- Define the roles of Head Office and subsidiaries- Build system networks that support Group

management

Strengthen operating base as springboard for future growth

Foster a culture of sound management as a leading international company

- Compliance- Environmental management, etc.

(1) TargetsAchieve consolidated net income of ¥15 billion in 3 years

(2) Implement Three Reforms- PMI- Create growth business

models - BPI


Metal OneMetal One’’s Vision and Missions Vision and Mission

Metal One aspires to be a Metal Market Maker. It will be an instigator of continuous innovationand growth in the metals industry by taking the industry to a new level and making it more global in nature. And Metal One will take the lead in creating new markets and companies connected with the metals industry. These efforts will be instrumental to ensuring that metals, a vitally important resource, continue to contribute to improvements in lifestyles and cultures in the 21st century.

Create markets to drive growth in the metals industry■Vision → Metal Market Maker

As a Metal Value Optimizer, with all policies geared toward optimizing the industry and markets,Metal One will leverage the various capabilities of its trading company shareholders to revamp the metals industry value chain, starting with iron and steel. This will be achieved by joining forces with customers and other players in the metals industry around the world.

Develop and reform the market by optimizing all aspects of its value chain

■Mission → Metal Value Optimizer

*The vision defines the type of company Metal One aspires to be, while the mission statement outlines what the organization and employees must do to realize the vision.


Before and After IntegrationBefore and After Integration

Around 2000 The value of consolidation

- Able to adapt to changes resulting from steel industry realignment

- Spurred realignment of Group logistics functions- Chance for new sources of earnings

- Beginning of steel industry realignment- Logistics was fragmented and complex- The market was mature

Steel Mills

40%60%

NIC

Processors

Distributors

2nd wholesalers

M e t a l O n e C o r p o r at ionM e t a l O n e C o r p o r at ion

End users

MC

Service Centers

WholesalersUse of IT

Consolidated management

3rd wholesalers

Other tradingcompany


Steel Mills

Other trading companyMC

NICWholesalersSteel service centers

3rd wholesalers

2nd wholesalers

Distributors

End users

Processors



Strengths Stemming From ConsolidationStrengths Stemming From Consolidation

- Most powerful operating base in Japan, and ability to cover all regions- Large and interlinked business domains

-A network of well-equipped steel processing centers in the Kanto and Tokai regions

-Strong, specialized downstream businesses that are deeply integrated into the value chain

- A processing center network operated by subsidiaries in the U.S., China and elsewhere in Asia


2,5302,463

2,2382,161

1,464

1,066

0

500

1,000

1,500

2,000

2,500

3,000

NI+MC Marubeni-Itochu

Sumitomo Mitsui Mitsubishi Nissho Iw ai

1,284

830777

654 641

507

0

200

400

600

800

1,000

1,200

1,400

NI+MC Marubeni-Itochu

Mitsubishi Mitsui Sumitomo Nissho Iw ai

750

683666

540505

210

0

100

200

300

400

500

600

700

800

NI+MC Mitsui Marubeni-Itochu

Nissho Iw ai Sumitomo Mitsubishi

419

246

217 212 207

134

0

50

100

150

200

250

300

350

400

450

NI+MC Mitsui Marubeni-Itochu

Mitsubishi Nissho Iw ai Sumitomo

948

642

405

306

187 171

0

100

200

300

400

500

600

700

800

900

1,000

NI+MC Nissho Iw ai Mitsui Mitsubishi Marubeni-Itochu

Sumitomo

Sales of H-Type Steel (billions of yen)

Sales of Hot-Rolled Steel Sheets (billions of yen)

Sales of Cold-Rolled Steel Sheets (billions of yen)

Sales of Wire Rods (billions of yen)

Sales of Specialty Steel (billions of yen)

The IndustryThe Industry’’s Strongest Operating Base s Strongest Operating Base (Sales by Product and Trading Company in Fiscal 2001)(Sales by Product and Trading Company in Fiscal 2001) * Fiscal year end: December

Source: Steel Information Service HandbookThe red bars represent the sum of sales of NI and MC.The pictures are artists’ impressions


Integration OverviewIntegration Overview

Smooth Start for Consolidated Operations

Formulation of vision and mission Formulation of management structure Integration of human resourcesIntegration of computer systemsReassignment of personnel

Metal One Corporation established on January 6, 2003

Completed consolidation of operations on schedule following 3-month integration process to establish necessary management structure

Accounting systemsStable fund procurementCustomer retentionIntegration of major overseas bases Raising of industry awareness


Time Frame for Establishing Business ModelsTime Frame for Establishing Business Models

Accelerate pace of reforms to finish work on the new business model in the company’s third year

Smooth start after consolidation of operations

Vision Vision →→ Metal Market MakerMetal Market MakerCreate markets to drive growth in the

metals industry

Completion of integration of global bases

Elimination of redundant operations

Group management strategy

Reform of Metal One logistics network

Mission Mission →→ Metal Value OptimizerMetal Value OptimizerDevelop and reform the market by optimizing all

aspects of its value chain


Billions of YenThe MediumThe Medium--Term Management Plan (Approximate)Term Management Plan (Approximate)Fiscal 2003 Fiscal 2005 Increase or decrease

* Fiscal year end: December(Consolidated)

*Factors in future integration of overseas bases

Net IncomeNet Income 99 1515 +6+6

Operating IncomeOperating Income 2121 3333 +12+12

Total Assets (1) *Total Assets (1) * 850850 850850 00

Trade Receivable (1) *Trade Receivable (1) * 540540 540540 00

Shareholders’ EquityShareholders’ Equity 150150 160160 +10+10

Current Assets *Current Assets * 670670 670670 00

(2) ÷ (1)(2) ÷ (1) 64%64% 64%64% 00

ROEROE 6.0%6.0% 9.4%9.4% +3.4%+3.4%

SalesSales 2,0002,000 2,2002,200 +200+200


Three InnovationsThree Innovations

Three Innovations

Business consolidation = PMI (Post Merger Integration)Selection and concentration, integration and reductionMake strengths even stronger; integrate and eliminate areas of weakness

Investments for growth = Growth strategySelectively invest in and channel resources to growth regions, products and business models

Process reform = BPI (Business Process Innovation)Make full use of trading company functions to improve administrative activities and fundamentally overhaulprocesses

BPIBPI

PMIPMI

Growth strategyGrowth strategy


Business ConsolidationBusiness Consolidation

Quantity Quantity

MILL

Steel scrap

MILL

: : Metal One customers, group companiesMetal One customers, group companies

Downstream

Steel scrap

Present Future

Upstream CombineCombine

LMP business model

Retail business model

Logistics＆

MarketingPlatform

PMIPMIPMI

EliminateEliminateAdded value LinkLink

: Metal One’s business sphere


Business ConsolidationBusiness Consolidation

Projected growth rate for worldwide steel demand: +11% (Fiscal 2001 → Fiscal 2003 forecast)

- Americas: Expansion of Coilplus Holdings

- China: Expand supply chain to serve more Japanese and other manufacturers

- Asia: Meet rising demand as the region becomes a supplier of automobiles on a global scale

- Energy and resource development regions: Pipelines

- Japan: Create new business models (LMP and retail models)


BPI BPI -- ExamplesExamples

Invested in Group management system

Integrated administrative companies (Metal One Office)

Made back-office processes more efficient (Conversion to processing centers)

Eliminated duplication of work with subsidiaries (outsourcing ofspecific tasks, group-wide sharing of logistics and inventory information, etc.)

Raised quality and cut costs of administrative processes / enhanced services to customers

Promoted Group management / facilitated more flexible use of human resources by standardizing work processes


Fiscal 2003 Fiscal 2003 –– 2005 Targets (Approximate)2005 Targets (Approximate) * Fiscal year end: December

Fiscal 2003 Fiscal 2005

1.51.5

5.05.0

4.04.0

4.54.5

1.51.5

4.54.5

15.0 billion yen15.0 billion yen

4.04.0

-2.0-2.0

5.05.0

Includes special losses from PMI

(Billions of Yen)

15.0

10.0

5.0

PMI&BPI Growth Fiscal 2005 consolidated net

income

Fiscal 2003 non-consolidated net

income

Fiscal 2003 net income at subsidiaries(After consolidation adjustments)


Metal OneMetal One’’s Business Models Business Model

[The Metal One Group in Fiscal 2005]

Wire rod and specialty steel-related

subsidiaries

Overseas coil centers

Steel sheet-related subsidiaries

Regional companies

in Japan

MC overseas basesNI overseas bases

Administrative subsidiaries

Metal One

Parent company business group: 18 divisions, 5

branch officesCorporate section: 4

divisions

-Bases-

-Consolidated subsidiaries-

-Group companies-

6 regional subsidiaries in Japan

Merged administrative

subsidiary

Merged trade subsidiary

14 overseas subsidiaries

Americas blockChina blockAsia blockEurope block

Merged construction material-related subsidiary

Steel sheet and automotive steel processing center

Merged wire rod and specialty

steel subsidiary

Merged stainless steel subsidiary

The Metal One Group

Metal One

Parent company business group: 13 divisions

Corporate section: 2-3 divisions[The Metal One Group in Fiscal 2003]

Construction material-related

subsidiaries

Trade subsidiaries


<<Reference> Profile of Metal One CorporationReference> Profile of Metal One Corporation

■Directors, Auditors, and Executive OfficersChairman and CEO: Mr. Norio OkadaPresident and COO: Mr. Masashi MizutaniDirectors (Part time):Mr. Koji Furukawa (Senior Executive Vice President, Mitsubishi Corporation)Mr. Masayuki Takashima (Senior Executive Vice President, Mitsubishi Corporation)Mr. Shiro Yasutake (Corporate Adviser, Nissho Iwai Corporation)Auditors:(Standing) Mr. Koichiro Kimura(Part time) Mr. Shuma Uchino (Metals Group Controller, Mitsubishi Corporation)(Part time) Mr. Keijiro Hori (Senior Managing Executive Officer, Nissho Iwai Corporation)Executive Director (Sales and Marketing): 　　 Moriji KanedaExecutive Vice President (Sales and Marketing): Susumu KomoriExecutive Vice President (Sales and Marketing): Yoshiomi YuasaExecutive Vice President (Sales and Marketing): Minetsugu TakedaSenior Vice President (Corporate Planning): Masaki OnoSenior Vice President (CFO, Management): Tetsuro Nagai

■Company Name: Metal One Corporation

■Head Office: 23-1, Shiba 3-chome, Minato-ku, Tokyo 105-0014, JapanTelephone: +81-3-6400-2000

■Date Established: January 6, 2003

■Shareholders’ Equity: ¥150 billion (including capital of ¥100 billion)

■Shareholders: Mitsubishi Corporation, Nissho Iwai Corporation

■Size: Total assets: Approx. ¥850 billionConsolidated operating transactions: Approx. ¥2.1 trillion

■Number of Employees (Parent Company): Approx. 800Consolidated: Approx. 6,000

metal one corporation company presentationmtlo.co.jp/ch/news/2003/030416e.pdf · (c)copyright 2003...

Documents