march 2014. nucor today nucor today north americas most diversified steel & steel products...

MARCH 2014

NUCOR TODAY

FACILITIES Over 200 locations

2013 NET SALES $19.1 Billion

2013 NET EARNINGS $488.0 Million

FORTUNE 500 RANK 146

EMPLOYEES 22,300

2013 SALES PER EMPLOYEE $859,000

164 CONSECUTIVE QUARTERS OF CASH DIVIDENDS (THRU MAY 2014)

NORTH AMERICA’S MOST DIVERSIFIED STEEL & STEEL PRODUCTS COMPANY

2

STEEL MILL PRODUCTION CAPACITY ANNUAL TONS

3

4

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

4

8

12

16

20

24

28

STEEL MILL SHIPMENTS 2003-2013(millions of tons)

20.65

STEEL PRODUCTSPRODUCTION CAPACITY ANNUAL TONS

5

6

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

1

2

3

4

5

STEEL PRODUCTS SALES TONS 2003-2013(millions of tons)

2.62

RAW MATERIALS (IRON UNITS)

PRODUCTION CAPACITY ANNUAL TONS

7

Direct Reduced Iron (DRI) 4.5 Million

Ferrous Scrap Processing 5.2 Million

NUCOR’S GROWTH DRIVEN BY OUR POSITION OF STRENGTH

8

COMPETITIVE ADVANTAGES

Financial Strength Low / Variable Cost StructureFlexible CapacityProduct Diversification

Market LeadershipNucor’s People and Our Culture

9

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

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013$0

$600

$1,200

$1,800

$2,400

Financial Strength Cash From Operations 2000-2013 (millions of dollars)

Cyclical Trough To Cyclical TroughMore than 2X

Average ’01-’03 $495 million

Average ’09-’13 $1.1 Billion

11

LOW COST STRUCTURE = INDUSTRY LEADING RETURNS

5.9%7.1%

13.6%

15.5%

0

2

4

6

8

10

12

14

16

18

ArcelorMittal U.S. Steel Steel Dynamics Nucor

Average ROIC 2004-2013

ArcelorMittal

U.S. Steel

Steel Dynamics

Nucor

12

NUCOR’S ROIC PERFORMANCE

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013-3.0%

2.0%

7.0%

12.0%

17.0%

22.0%

27.0%

32.0%

37.0%ROIC = EBIT X (1-.35) / (NET PP&E + WORKING CAPITAL)

13

2004-2013 AVG = 15.5%

“GREAT RECESSION”

UP-CYCLE

FLEXIBLE CAPACITY

Electric arc furnaces

High productivity

No lay-off practice

14

BEST-IN-CLASS MARKET RESPONSIVENESS!!!

2013 Sales Tons

Sheet - 32%

Bars - 22%

Structural - 11%

Plate - 10%

Products - 11%

Scrap - 14%

DIVERSIFIED PRODUCT MIX

15

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

Gerdau Commercial Metals

Company

Republic Timken US Steel Severstal Thyssen Krupp

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 SteelPlate Steel

#1North American

Market Leader

#2North American

Market Leader

#3North American

Market Leader

17

NUCOR’S PEOPLE –OUR BIGGEST COMPETITIVE ADVANTAGE

18

Commitment to EmployeesSAFETY Is Our First PriorityTeamwork

Pay For PerformanceContinual ImprovementDecentralized Structure = Nucor

Employees Are Empowered To Take Care Of Our Customers

19

NUCOR’S CULTURE

20

• Click to edit Master text styles– Second level

• Third level– Fourth level

» Fifth level

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GREAT CHALLENGES PRESENT GREAT OPPORTUNITIES TO THE

RIGHT PEOPLE – THE NUCOR TEAM

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GROWING EARNINGS POWER: MULTI-PRONGED GROWTH STRATEGY

21

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NUCOR’S FOCUS: PROFITABLE GROWTH!!!

NUCOR’S 5 PRONGED GROWTH STRATEGY

Nucor’s 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

$8 BILLION OF CAPITAL INVESTED Capital Spending of $4.4 billion & Acquisitions

of $3.6 billion

CAPITAL SPENDING = 55%

ACQUISITIONS = 45%

2008-2013 CAPITAL INVESTED

23

2008-2013 CAPITAL INVESTED ($ MILLIONS)

STEEL MILLS

BARS

MEMPHIS SBQ MILL (2008-13) $350

DARLINGTON ROD MILL (2012-13) $99

CONNECTICUT REHEAT FURNACE (2012-13) $23

NEBRASKA SBQ ROLLING MILL UPGRADE (2012-13) $16

24

AMOUNTS NOT NECESSARILY PROJECT TOTALS – ONLY INCLUDES $s INVESTED OVER 2008-2013 PERIOD

2008-2013 CAPITAL INVESTED ($ MILLIONS)

STEEL MILLS

BEAMS & PILING

SKYLINE ACQUISITION (2012) $675

NUCOR-YAMATO SHEET PILING PRODUCT RANGE EXPANSION (2012-13)

$92

25

AMOUNTS NOT NECESSARILY PROJECT TOTALS – ONLY INCLUDES $s INVESTED OVER 2008-2013 PERIOD

2008-2013 CAPITAL INVESTED ($ MILLIONS)

STEEL MILLS

PLATE

HERTFORD COUNTY HEAT TREAT FACILITY (2009-10) $70

HERTFORD COUNTY NORMALIZING LINE (2012-13) $38

HERTFORD COUNTY DRI HANDLING (2012-13) $21

HERTFORD COUNTY VACUUM TANK DEGASSER (2011-12)

$17

TUSCALOOSA 2nd LMF (2011-12) $12

26

AMOUNTS NOT NECESSARILY PROJECT TOTALS – ONLY INCLUDES $s INVESTED OVER 2008-2013 PERIOD

2008-2013 CAPITAL INVESTED ($ MILLIONS)

STEEL MILLS

SHEET

NUMIT SHEET STEEL PROCESSING J.V. ACQ. (2010) $221

DECATUR GALVANIZING FACILITY (2008-09) $126

BERKELEY COUNTY WIDE-LIGHT (2012-13) $86

HICKMAN VACUUM TANK DEGASSER (2012-13) $33

CRAWFORDSVILLE DRI HANDLING (2012-13) $22

BERKELEY COUNTY DRI HANDLING (2012-13) $18

27

AMOUNTS NOT NECESSARILY PROJECT TOTALS – ONLY INCLUDES $s INVESTED OVER 2008-2013 PERIOD

2008-2013 CAPITAL INVESTED ($ MILLIONS)

STEEL MILLS

INTERNATIONAL

DUFERDOFIN J.V. IN ITALY (BEAMS & BARS) (2008) $671

28

2008-2013 CAPITAL INVESTED ($ MILLIONS)

DOWNSTREAM PRODUCTS

HARRIS STEEL REBAR FABRICATION BOLT-ON ACQUISITIONS (2008-12)

$211

29

2008-2013 CAPITAL INVESTED ($ MILLIONS)

RAW MATERIALS & ENERGY

DAVID J. JOSEPH ACQUISITION (2008) $1,440

LOUISIANA DRI FACILITY (2009-13) $739

NATURAL GAS DRILLING & MIDSTREAM ASSETS (2009-13)

$616

DAVID J. JOSEPH BOLT-ON ACQUISITIONS (2008-12) $300

TRINIDAD DRI FACILITY EXPANSION (2011) $15

30

AMOUNTS NOT NECESSARILY PROJECT TOTALS – ONLY INCLUDES $s INVESTED OVER 2008-2013 PERIOD

RAW MATERIALS STRATEGY

31

DRI Plant - Louisiana

Game changer for Nucor’s 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

2013’s low natural gas pricing environment

DRI = Direct Reduced Iron

DRI VERSUS PIG IRON COST COMPARISON(using estimated long-term prices)

32

$/ton Blast Furnace DRI

Iron Ore (62% FE, FOB Brazil)Pellet PremiumIron Premium (BF = 65% Fe & DRI = 68% Fe) X $2.20FreightIron 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 mmbtus @ $4)

$70$107

$35

$44

Iron Unit CostBF with sinter plant cost savingsBF 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

NUCOR’S FOCUS = GENERATE ATTRACTIVE RETURNS

33

-$300

$200

$700

$1,200

$1,700

$2,200

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

BUILDING EARNINGS POWER FOR THE NEXT CYCLICAL PEAK & BEYOND (Millions of dollars)

2008 RECORD EPS $5.98

34

35

CASH DIVIDENDS PAID 2004 – 2013 Base & Supplemental Dividends (dollars per share)

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Base Supplemental

Approx. $5/share in total supplemental dividends from 2005 to 2008

“GREAT RECESSION”

41 CONSECUTIVE YEARS OF INCREASED CASH DIVIDENDS

UP-CYCLE