The Case For A 15,000Tonne Open Die Forging Press Materials Supply - PowerPoint PPT Presentation

The Case For A 15,000Tonne Open Die Forging Press Materials Supply Chain for UK Power Generation

Outline • Company & Employees • Performance & Markets • Investments • World Demand • Future Direction • Funding Support

Company & Employees

Group Structure

Holding 100% Current Shareholders SFIL Management and Shareholders Workforce

Dec-07 Nov-07 Oct-07 Sep-07 Aug-07 Jul-07 Jun-07 May-07 Apr-07 Mar-07 Feb-07 Total Employees Jan-07 Dec-06 Nov-06 Oct-06 Sep-06 Aug-06 Jul-06 Jun-06 May-06 M onth Apr-06 Mar-06 Feb-06 Jan-06 Dec-05 Nov-05 • 61 Apprentices • 510 Hourly-paid • 745 Employees Oct-05 Sep-05 Aug-05 Jul-05 Jun-05 • 235 Staff May-05 Apr-05 Mar-05 Feb-05 Jan-05 Dec-04 Nov-04 Oct-04 Sep-04 Aug-04 Jul-04 770 720 670 620 570 520 No. Employees

Performance & Markets

Total Sales 120 100 80 Sales 60 Sales 40 (Projected) 20 0 2004 2005 2006 2007 2008 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 TOTAL TOTAL £48.5M £ 48.5M £66.5M £ 66.5M £ £80M 80M £ £95M 95M £ £120M 120M

Current Sales by Product

80% EXPORT 80% EXPORT Serving a Worldwide Business

Operating Profit/Loss 14 12 10 8 6 £M 4 2 0 -2 -4 2001 2002 2003 2004 2005 2006 2007 2008 Year

Mar-08 Feb-08 Jan-08 Dec-07 Nov-07 Oct-07 Sep-07 Aug-07 Jul-07 External Order Book Jun-07 May-07 Apr-07 Mar-07 Feb-07 Jan-07 Dec-06 Nov-06 Oct-06 Sep-06 Aug-06 Jul-06 Jun-06 May-06 Apr-06 Mar-06 Feb-06 Jan-06 Dec-05 Nov-05 Oct-05 Sep-05 Aug-05 Jul-05 140000 120000 100000 80000 60000 40000 20000 0

Investments

Total Investment 2006/08 Business Unit £K Steel SFM 1769 Engineering SFM 9669 Vulcan SFM 11125 Total Investment 22563 SFIL Has Invested More In the last 12 Months Than In The Previous Decade

World Demand

New & Proposed Presses >10,000 tonnes Korea 3 USA 1 Japan 2 UK 1 China 6 Germany 1 Czech Rep 1 Italy 2 Ukraine 1

Shipbuilding

Backup Roll Weights

Increase In Power Generation New Build 2007/11(base date 2002/06) 200% 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% Coal fired Gas Turbine Hydro super Wind Nuclear critical 25% 41% 50% 185% 200% Power Generation Demand

Generator Rotor Weights

Demand For New Casks For High-Level Waste Transport Casks Type B 80 70 Number of Casks 60 50 40 30 20 10 S1 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 Year

Nuclear Renaissance Growing demand for clean, safe electricity Forecast Electricity Demand 9,000 8,000 Asia 7,000 (Billion KWh) Europe 6,000 USA 5,000 4,000 Rest of World 3,000 2,000 1,000 0 1990 1995 2000 2010 2015 2020 2025 Source: EIA Annual Energy Outlook 2004 Source: EIA Annual Energy Outlook 2004

• Nuclear Reactor – Core Components

• Nuclear Reactor Pressure Vessel

• Forged Steel Nuclear Vessel Components

• Nuclear Vessel Components in Forging

• Global use of Nuclear Power

25 Plans For New Reactors Worldwide 24 23 22 21 20 19 18 17 Year 16 15 14 13 12 11 10 09 08 14 12 10 8 6 4 2 0 No. per Year

Location Of New And Proposed Nuclear Build In Operation By 2025 Canada Russia Finland Japan USA UK Korea China France India Pakistan Slovakia Argentina Iran South Africa

Forging Demand Per Reactor Type 7,000 6,000 5,000 4,000 EPR Today AP1000 3,000 Today 2,000 System 80+ Candu 1970-80 1,000 Today 0

Major Nuclear Forges Mx Ingot Press (tonnes) • Japan Steelworks 600t 14,000 • Creusot (France) 250t 11,300 • OMZ (Russia) 360t 12,000 • Sheffield Forgemasters (UK) 300t 10,000 • Doosan (S. Korea) 540t 10,000

80 70 68 70 Nuclear Forgings in Tons (K) 66 60 55 59 50 54 50 50 Capacity 44 40 34 Demand 40 34 30 22 20 21 10 0 2008 2010 2012 2014 2016 2018 2020 Year • Capacity and Demand for Heavy Nuclear Forgings

Steam Generator Components (SG) EPR AP1000 • Steam Generator (SG) 9 Parts on the EPR 4 Parts with Current (4 per installation) Capabilities 9 Parts on the AP1000 4 Parts with Current (4 per installation) Capabilities

Pressurizer Components (P) EPR AP1000 • Pressurizer (P) 5 Parts on the EPR 3 Parts with Current Capabilities 4 Parts on the AP1000 4 Parts with Current Capabilities

Reactor Pressure Vessel Components (RPV) EPR AP1000 • Reactor Pressure Vessel (RPV) 7 Parts on the EPR 0 Parts with Current (1 per installation) Capabilities 4 Parts on the AP1000 0 Parts with Current (1 per installation) Capabilities

Assembled Forging Weight Per Reactor Type SFIL can cover today : � 26 % of AP 1000 � 44% of EPR 2500 2000 If 5+5 UK programme: 1500 Total expected demand 1000 = 20225 tonnes 500 0 AP 1000 EPR SFIL can cover: Size per reactor in delivered tonnes � 34% of total demand

Future Direction

Proposed Investment at SFIL To Support The UK Nuclear Program Investment – Melt Shop Equipment £K Secondary Steelmaking Unit 6000 High bay extension 2000 New Vacuum Tank 750 500Tonne Crane 2000 Ladle Processing Facility 1000 Ironware and Ladles 1000 Power and Transformers 2000 Total 14750

Proposed Investment at SFIL To Support The UK Nuclear Program Investment – Forge Equipment £K 15000 Tonne Press 10000 Forge and HT Building 6000 Electrical Supplies 2000 Civil Works 2000 2x Forge Furnaces 3000 6x HT Furnaces 4000 2x Class 8 Forging Cranes 3000 Quench Tank 1000 Forge Manipulator 2000 Forge Tooling 2000 2x HT Cranes 1000 Total 36000

Proposed Investment at SFIL To Support The UK Nuclear Program Investment – Machining Equipment £K Building 4000 3x Vertical Boring Mills 7000 2x Lathes 6000 Various Equipment 2000 Total 19000

Expected Outputs From Proposed Investment at SFIL Output Impact 120 (direct) New Jobs created 80 (indirect) Safeguarded Jobs 750 New Sales (Domestic) £230M Safeguarded Sales £120M/y UK Nuclear Program Underpinned Build Schedule

Funding Options

Funding Support Source Private Equity Trade Partners Banks Government