10aaa051

AISSA
INTERNATIONAL DEVELOPMENT POTENTIAL:
ASPLEOL ACTIVITY

INTERNATIONAL DEVELOPMENT MANAGEMENT ESPAÑOLA, S.A.
PADRE DAMIAN, 23 - 28036 MADRID - TEL. (34) 913-533-810 - FAX (34) 913-596-988 - E-MAIL: idm@infonegocio.com - http://www.infonegocio.com/idmespa

AZ/10/04/AAA/051

“““““LA INFORMACION CONTENIDA EN ESTE DOCUMENTO, PROPIEDAD DE IDM ESPAÑOLA ES ESTRICTAMENTE CONFIDENCIAL, QUEDANDO PROHIBIDA SU REPRODUCCION TOTAL O PARCIAL O LA UTILIZACION INDEBIDA SIN SU CONSENTIMIENTO POR ESCRITO,
RESERVANDOSE LAS ACCIONES LEGALES A QUE HUBIERA LUGAR EN FUNCION DE LOS PERJUICIOS OCASIONADOS A IDM ESPAÑOLA, S.A. O A SUS CLIENTES ”””””THE INFORMATION CONTAINED IN THIS DOCUMENT IS PROPERTY OF IDM ESPAÑOLA, S.A. AND IT IS
STRICTLY CONFIDENTIAL. NO PART OF IT MAY BE REPRODUCED OR UNDULY USED WITHOUT ITS WRITTEN PERMISSION. ACCORDINGLY ANY DAMAGES INFLICTED TO IDM ESPAÑOLA, S.A. OR ITS CLIENTS WILL BE ADEQUATELY PROSECUTED”””””

AISSA’S ASPLEOL ACTIVITY INTERNATIONAL DEVELOPMENT POTENTIAL
INTRODUCTION

This document isisaaselected summary on the different materials developed by IDM Española, S.A., in order to solve aareal business
This document selected summary on the different materials developed by IDM Española, S.A., in order to solve real business
situation, for which its services were requested. With the only purpose of preserving client’s confidentiality, some identities, prod-
situation, for which its services were requested. With the only purpose of preserving client’s confidentiality, some identities, prod-
ucts or dates might have been deliberately altered.
ucts or dates might have been deliberately altered.

The Aspleol
The Aspleol

The aspleol isisaasemi-finished metallic product which sales are measured in units, being the Governments of the different Countries
The aspleol semi-finished metallic product which sales are measured in units, being the Governments of the different Countries
its consumers. Before its direct usage aafinal pressing stage isisrequired, that allows for the identification of the Country of origin.
its consumers. Before its direct usage final pressing stage required, that allows for the identification of the Country of origin.

IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 2

AGENDA

∗SUMMARY OF CONTACTS

∗PROFILE OF THE ASPLEOL ACTIVITY OF AISSA

∗ANALYSIS OF THE WORLDWIDE MARKETS FOR ASPLEOL
−USA * −FRANCE
−JAPAN −INDIA
−GERMANY * −AUSTRALIA
−MEXICO −ITALY
−CANADA −BELGIUM
−UNITED KINGDOM −REST OF THE WORLD *

∗ANALYSIS OF THE TECHNOLOGICAL EVOLUTION

∗STRATEGIC ANALYSIS OF BM LTD.

∗SUMMARY AND NEXT STEPS

IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 3

AISSA’S ASPLEOL ACTIVITY MAIN CONTACTS DEVELOPED
SUMMARY
GERMANY PORTUGAL

CONTACT 1 METALS OFFICE PLANNING DEPARTMENT CONTACT 25 COMMERCIAL DIRECTOR NATIONAL CONSUMER
CONTACT 2 COMMERCIAL DIRECTOR COMPETITOR 1
CONTACT 3 COMMERCIAL DIRECTOR SUPPLIER 1 UNITED KINGDOM
CONTACT 4 SALESMAN SUPPLIER 2
CONTACT 5 DIRECTOR NATIONAL CONSUMER, STUTTGART CONTACT 26 MARKETING DEPARTMENT BM LTD.
CONTACT 6 COMMERCIAL DIRECTOR COMPETITOR 2 CONTACT 27 GENERAL MANAGER. BM LTD.
CONTACT 7 COMMERCIAL DIRECTOR COMPETITOR 3 CONTACT 28 TECHNICIAN SUPPLIER 1
CONTACT 8 COMMERCIAL EXPERT ASPLEOL CONTACT 29 MARKETING DEPARTMENT ASPLEOL MAGAZINE
CONTACT 30 MANAGER METALS ANALYSIS FIRM
BELGIUM CONTACT 31 CONSULTANT METALS ANALYSIS FIRM
CONTACT 32 ASPLEOL DIVISION DEALER 1
CONTACT 9 COMMERCIAL DIRECTOR COMPETITOR 1 CONTACT 33 INFORMATION DEPARTMENT, METALS OFFICE
CONTACT 10 SALESMAN NATIONAL CONSUMER CONTACT 34 MARKETING DEPARTMENT, COMPETITOR 2
CONTACT 35 MARKETING DEPARTMENT, SUPPLIER 2
CANADA CONTACT 36 MARKETING DIRECTOR, COMPETITOR 3
CONTACT 37 MARKETING DEPARTMENT, SUPPLIER 3
CONTACT 11 INTERNATIONAL DEPARTMENT NATIONAL CONSUMER
CONTACT 38 TECHNICIAN, NATIONAL CONSUMER
CONTACT 12 MARKETING DEPARTMENT COMPETITOR 1
CONTACT 39 COMMERCIAL DIRECTOR NATIONAL CONSUMER
CONTACT 40 PLANNING DEPARTMENT, NATIONAL CONSUMER
SPAIN
CONTACT 41 PUBLICATIONS DEPARTMENT NATIONAL CONSUMER
CONTACT 13 COMMERCIAL DIRECTOR COMPETITOR 1 CONTACT 42 ASPLEOL DEALER 2
CONTACT 14 COMMERCIAL DIRECTOR COMPETITOR 2 CONTACT 43 ASPLEOL EXPERT
CONTACT 15 DIRECTOR NATIONAL CONSUMER CONTACT 44 TECHNICAL EXPERT
CONTACT 16 GENERAL MANAGER MANUFACTURERS’ ASSOCIATION
CONTACT 17 SALESMAN COMPETITOR 5 SWITZERLAND

CONTACT 45 MARKETING DEPARTMENT, MARKETS ANALYSTS
FRANCE

CONTACT 18 PUBLICATIONS DEPARTMENT NATIONAL CONSUMER UNITED STATES
CONTACT 19 DIRECTOR NATIONAL CONSUMER, BORDEAUX
CONTACT 46 ASPLEOL DIVISION, COMPETITOR 1
CONTACT 20 MARKETING DEPARTMENT COMPETITOR 1
CONTACT 47 DIRECTOR, ASPLEOL DIVISION, COMPETITOR 2
CONTACT 21 MARKETING EXPERT
CONTACT 48 MARKETING DEPARTMENT, METAL ANALYSTS
CONTACT 49 PLANNING DEPARTMENT, NATIONAL CONSUMER
GREECE
CONTACT 50 INTERNATIONAL DEPARTMENT, NATIONAL CONSUMER
CONTACT 22 SALESMAN NATIONAL CONSUMER CONTACT 51 PUBLICATIONS DEPARTMENT, NATIONAL CONSUMER
CONTACT 52 PUBLICATIONS DEPARTMENT, NATIONAL CONSUMER
ITALY

CONTACT 23 SALESMAN COMPETITOR 1
CONTACT 24 SALESMAN NATIONAL CONSUMER

IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 4

AISSA’S ASPLEOL ACTIVITY BRIEF COMPANY PROFILE

∗Installed capacity of 4,000 Mt/year (400 to 700 Million units), accounting for ±25% of Aissa’s turnover
∗Installed capacity of 4,000 Mt/year (400 to 700 Million units), accounting for ±25% of Aissa’s turnover

∗Lacking of final pressing equipments
∗Lacking of final pressing equipments

∗Alloys currently developed
∗Alloys currently developed
−Nickel - -Copper
−Nickel Copper
−Aluminium- Bronze
−Aluminium- Bronze

∗Limited international experience
∗Limited international experience
−Portugal
−Portugal
−Mexico
−Mexico
−Germany
−Germany

IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 5

AGENDA



−USA * −FRANCE
−JAPAN −INDIA
−MEXICO −ITALY




IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 6

AISSA’S ASPLEOL ACTIVITY WORLDWIDE DEMAND FOR ASPLEOL
KEY FACTORS
∗Stock level at the end of the previous period
∗Stock level at the end of the previous period
−Shrinkage rate
−Shrinkage rate
…the great relevance of non-economic factors,...
…the great relevance of non-economic factors,...
∗Variation of static stock
∗Variation of static stock −The United Kingdom, that has aabase
−The United Kingdom, that has base
−Population variation demand of 400-500 Million units per year,
demand of 400-500 Million units per year,
−Population variation
had aademand of 4,500 Million in 1995
had demand of 4,500 Million in 1995
−Inflation
−Inflation

∗Variation of the dynamic stock
∗Variation of the dynamic stock But...
−Variation of national income …and the difficulty in predicting the demand
…and the difficulty in predicting the demand
−Variation of national income
based on economic factors: Predictions of the
based on economic factors: Predictions of the
−Price levels
−Price levels USA national consumer on aspleol needs for
USA national consumer on aspleol needs for
−Development level 2002:
2002:
−Development level
−June 2001 forecast: 15,522 Million units
−June 2001 forecast: 15,522 Million units
∗Non-economic factors
∗Non-economic factors −May 2002 forecast : :9,786 Million units
−May 2002 forecast 9,786 Million units
−Changes in aspleol’s components
−Changes in aspleol’s components
−Political events
−Political events

…show that the Worldwide market for aspleol isisextremely volatile
…show that the Worldwide market for aspleol extremely volatile
−Need for highly flexible production systems/equipments
−Need for highly flexible production systems/equipments
IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 7

AISSA’S ASPLEOL ACTIVITY WORLDWIDE PRODUCTION OF ASPLEOL
EVOLUTION (1993-02)
40

CAGR
Grand Total (1993-02) (2000-02)
35

(1.1)% (8.2)%
30
∗The Worldwide market for aspleol isisvery
∗The Worldwide market for aspleol very
cyclical
cyclical
25
USA 3.2% (4.3)%
ANNUAL
−Production change from 1995 to 2000
−Production change from 1995 to 2000
PRODUCTION of 23.0%
of 23.0%
OF ASPLEOL 20
(BILLION UNITS)

∗Suffering from aastrong decline since 2000
∗Suffering from strong decline since 2000
15

−CAGR of (8.2)%
−CAGR of (8.2)%
10

Rest of World, except USA (4.8)% (12.6)%

5

0
1993 94 95 96 97 98 99 00 01 02

IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 8

AISSA’S ASPLEOL ACTIVITY WORLDWIDE MARKET OF ASPLEOL
CURRENT SITUATION

“The aspleol activity cannot be considered today as aaprofits generator. Everybody tries to barely cover variable costs, earning very
“The aspleol activity cannot be considered today as profits generator. Everybody tries to barely cover variable costs, earning very
limited margins”
limited margins”
(Marketing Director, Competitor USA)
(Marketing Director, Competitor USA)

“There isisaagreat level of overcapacity in this industry. In South America, ititisiseasy to find 12 suppliers competing for every aspleol
“There great level of overcapacity in this industry. In South America, easy to find 12 suppliers competing for every aspleol
order”
order”
(Marketing Representative for Latin America, Canadian Competitor)
(Marketing Representative for Latin America, Canadian Competitor)

“In the aspleol industry, there are high overcapacity levels. Due to the strong demand during the sixties-seventies, aastrong growth
“In the aspleol industry, there are high overcapacity levels. Due to the strong demand during the sixties-seventies, strong growth
in supply capacity was generated...”
in supply capacity was generated...”
(Commercial Director, National Consumer U.K.)
(Commercial Director, National Consumer U.K.)

“If supply equals two, demand equals one”
“If supply equals two, demand equals one”
(Commercial Expert on Aspleol)
(Commercial Expert on Aspleol)

“The situation of the aspleol market isisthe worst I Ihave ever seen... To the problem of price reductions, you have to add the liquidity
“The situation of the aspleol market the worst have ever seen... To the problem of price reductions, you have to add the liquidity
crisis of Third World countries”
crisis of Third World countries”
(Commercial Director, German Competitor)
(Commercial Director, German Competitor)

The Worldwide aspleol market isissuffering currently aastrong decline, making impossible to generate profits with conventional tech-
The Worldwide aspleol market suffering currently strong decline, making impossible to generate profits with conventional tech-
nologies
nologies

IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 9

AISSA’S ASPLEOL ACTIVITY ANNUAL PRESSING OF ASPLEOL
BREAKDOWN BY COUNTRIES (1993-02)
CAGR
100%
(1993-02)

OTHER (8.6)%
90% BELGIUM (*) 19.2%
ITALY 9.7%
AUSTRALIA (9.8)%
80% INDIA (6,9)%
FRANCE 5.7% ∗Decrease or very limited growth in main mar-
∗Decrease or very limited growth in main mar-
U.K. (11.7)%
70% SPAIN 9.8% kets, with the exception of the USA, Spain,
kets, with the exception of the USA, Spain,
CANADA 0.3% France and Italy
France and Italy
MEXICO 0.9%
GERMANY 3.4%
60% JAPAN (8.4)% ∗Additionally, the rest-of-the-World markets,
∗Additionally, the rest-of-the-World markets,
ANNUAL
where most exports take place, collapsed,
where most exports take place, collapsed,
PRESSING OF
ASPLEOL
50% CAGR of (8.6)%
CAGR of (8.6)%
(PERCENTAGE)
40%
USA 3.2%

30%
∗Very limited possibilities for aspleol exports
∗Very limited possibilities for aspleol exports
at present
at present
20%

10% * PERIOD 1993-01, AS
THERE WAS NOT
ANY PRODUCTION
IN 2002
0%
1993 94 95 96 97 98 99 00 01 02

IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 10

AGENDA



−USA * −FRANCE
−JAPAN −INDIA
−MEXICO −ITALY




IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 11

AISSA’S ASPLEOL ACTIVITY USA NATIONAL CONSUMER
BRIEF PROFILE

∗Total production of aspleol in 2002
∗Total production of aspleol in 2002 17,898 million units
17,898 million units
Aspleol production for foreign markets in 2002
Aspleol production for foreign markets in 2002 46 million units
46 million units

∗Installed capacity of 18,750 million units/year:
∗Installed capacity of 18,750 million units/year:

−Plant 11
−Plant 8,720 million units
8,720 million units
−Plant 22
8,530 million units
−Plant 33
1,500 million units

∗Has the technical capacity for direct final pressing of aspleol from sheet, without the need for any intermediate stages
∗Has the technical capacity for direct final pressing of aspleol from sheet, without the need for any intermediate stages

∗Over 98% of sheet/aspleol supplies purchased from outside sources
∗Over 98% of sheet/aspleol supplies purchased from outside sources
−2002 requirements for Nickel-Copper “sandwich” sheet were 16,000 Mt
−2002 requirements for Nickel-Copper “sandwich” sheet were 16,000 Mt
−2002 requirements for Nickel-Copper sheet were 8,700 Mt
−2002 requirements for Nickel-Copper sheet were 8,700 Mt
−2002 requirements for Copper-plated Zinc aspleol were 13,900 Million units
−2002 requirements for Copper-plated Zinc aspleol were 13,900 Million units

IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 12

AISSA’S ASPLEOL ACTIVITY PRESSED ASPLEOL EVOLUTION
USA (1992-02)
20

18
CAGR
(1992-02)
16

0.9%
14
NICKEL-COPPER

12
ANNUAL
PRESSING OF
∗The penetration of the new electro-plating
∗The penetration of the new electro-plating
10
ASPLEOL and the “sandwich” techniques isisalready
and the “sandwich” techniques already
ELECTRO-
(BILLION UNITS) ZINC-COPPER PLATING higher than 93%
higher than 93%
8

6

4

2
"SANDWICH"

0
1992 93 94 95 96 97 98 99 00 01 02

IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 13

AGENDA



−USA * −FRANCE
−JAPAN −INDIA
−MEXICO −ITALY




IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 14

AISSA’S ASPLEOL ACTIVITY COMPETITOR # 1 GERMANY
BRIEF PROFILE
∗Subsidiary of the M Group
∗Subsidiary of the M Group
M Group
M Group Competitor 11
Competitor
∗Revenues (2001/02)
∗Revenues (2001/02) €€5,603 Million
5,603 Million €€362 Million
362 Million

∗Operating profits (2001/02)
∗Operating profits (2001/02) €€506 Million
506 Million €€84 Million
84 Million

∗It isisthe leading German manufacturer of aspleol, collaborating with the German National Consumer on final pressing for international orders
∗It the leading German manufacturer of aspleol, collaborating with the German National Consumer on final pressing for international orders

∗Exports account for 65% of its turnover, having Delegates in twelve countries and representative agents in other eighteen countries
∗Exports account for 65% of its turnover, having Delegates in twelve countries and representative agents in other eighteen countries

∗Pioneer of the “sandwich” technique
∗Pioneer of the “sandwich” technique

∗Other group activities
∗Other group activities
−Trade of minerals, metals and raw materials
−Trade of minerals, metals and raw materials
−Mining activities
−Mining activities
−Metals production
−Metals production
−Automotive components manufacturing
−Automotive components manufacturing
−Engineering
−Engineering
−Chemical products
−Chemical products
−Nickel application techniques
−Nickel application techniques
SOURCES: ANNUAL REPORT AND CATALOGUE, IDM INTERVIEWS
IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 15

AISSA’S ASPLEOL ACTIVITY COMPETITOR # 2 GERMANY
BRIEF PROFILE

∗Turnover for the (2001/02) fiscal year of €€123 Million
∗Turnover for the (2001/02) fiscal year of 123 Million

∗Second German manufacturer by size with installed capacity for pressed/non-pressed aspleol over 2,500 Million units per year
∗Second German manufacturer by size with installed capacity for pressed/non-pressed aspleol over 2,500 Million units per year

∗Strongly focused on export markets
∗Strongly focused on export markets
−Key foreign supplier for both France and the USA
−Key foreign supplier for both France and the USA
−Having developed for the Latin-American markets aaproprietary method of the electro-plating technology
−Having developed for the Latin-American markets proprietary method of the electro-plating technology

∗Other activities
∗Other activities
−Production of metal sheets
−Production of metal sheets
−Manufacturing of metal pressed components
−Manufacturing of metal pressed components
−Manufacturing of electric components: switches, cables
−Manufacturing of electric components: switches, cables
−Manufacturing of precision metal-components
−Manufacturing of precision metal-components
−Manufacturing of cutlery and kitchenware products
−Manufacturing of cutlery and kitchenware products

SOURCES: PRODUCTS CATALOGUE, IDM INTERVIEWS
IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 16

AISSA’S ASPLEOL ACTIVITY EVOLUTION OF ASPLEOL PRESSING
GERMANY (1992-02)
2,200

2,000

1,800

1,600 NICKEL-COPPER
CAGR
(1992-02)
1,400
0.6%
ANNUAL 1,200 ∗Market almost totally captive of the German
∗Market almost totally captive of the German
PRESSING OF
producers
producers
ASPLEOL
(MILLION UNITS) 1,000
"SANDWICH" ∗Limited use of Nickel-Copper (< 10%)
∗Limited use of Nickel-Copper (< 10%)
0,800

0,600

0,400

0,200

0,000
1992 93 94 95 96 97 98 99 00 01 02

IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 17

AGENDA



−USA * −FRANCE
−JAPAN −INDIA
−MEXICO −ITALY




IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 18

AISSA’S ASPLEOL ACTIVITY EVOLUTION OF ASPLEOL PRESSING
REST OF THE WORLD (1993-02)

10.000

9.000
∗Rest of the world markets contracting strongly
∗Rest of the world markets contracting strongly
8.000 during the 1993-02 period, CAGR of (8.6)% and
during the 1993-02 period, CAGR of (8.6)% and
very volatile
very volatile
7.000
−Main reason for the collapse of Worldwide
−Main reason for the collapse of Worldwide
ANNUAL 6.000 aspleol exports
aspleol exports
WORLDWIDE CAGR
PRESSING 5.000 (1993-02)
(MILLION ∗These markets justifying also the existence of
UNITS) ∗These markets justifying also the existence of
4.000 (8.6)% the UK National Consumer Consortium
the UK National Consumer Consortium

3.000 −“Most Countries would prefer their aspleol
−“Most Countries would prefer their aspleol
being pressed by the Government of another
being pressed by the Government of another
2.000 Country, instead of aaprivate company. They
Country, instead of private company. They
feel more secure”
feel more secure”
1.000
(General Manager, UK National Consumer)
(General Manager, UK National Consumer)
0
1993 94 95 96 97 98 99 00 01 02

IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 19

AGENDA



−USA * −FRANCE
−JAPAN −INDIA
−MEXICO −ITALY




IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 20

AISSA’S ASPLEOL ACTIVITY EVOLUTION OF WORLDWIDE ASPLEOL PRODUCTION
BREAKDOWN BY ALLOY-TYPE (1993-02)
100% NICKEL
STEEL-BASED

90%
ALUMINIUM-
BASED
80%
NICKEL-COPPER

70%

60% ∗Limited presence of Nickel-Copper alloys
∗Limited presence of Nickel-Copper alloys
ANNUAL
(< 15%)
(< 15%)
COPPER-BASED ALLOYS
ASPLEOL 50%
PRODUCTION ∗Strong emergence and development of the
∗Strong emergence and development of the
(PERCENTAGE)
40%
electro-plating and to aalesser extent, of
electro-plating and to lesser extent, of
the “sandwich” techniques
the “sandwich” techniques
30%

ELECTRO-
20% PLATING

10%
"SANDWICH"

0%
1993 94 95 96 97 98 99 00 01 02

IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 21

AISSA’S ASPLEOL ACTIVITY WORLDWIDE ASPLEOL PRODUCTION
BREAKDOWN BY SIZE (2002)

100%
LARGE SIZES *

80% INTERMEDIATE SIZES

60%
ANNUAL
WORLDWIDE
PRODUCTION
(PERCENTAGE)
40%

SMALLER SIZE

20%

0%
* SIZES EQUAL OR BIGGER THAN 100 TIMES THE SMALLER SIZE

IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 22

AISSA’S ASPLEOL ACTIVITY WORLDWIDE ASPLEOL PRODUCTION OF SMALLER SIZE
BREAKDOWN BY ALLOY-TYPE (2002)

100%

90%

80%

70%
ELECTRO-PLATING
60%
WORLDWIDE
ASPLEOL 50%
PRODUCTION
(PERCENTAGE)
40%

30%

CU-ZN
COPPER-
20% CU-SN-ZN
BASED
CU-AL-NI
ALLOYS
CU-NI
10% ALUMINIUM-BASED

"SANDWICH"
0%

IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 23

AISSA’S ASPLEOL ACTIVITY ASPLEOL PRODUCTION COSTS COMPARISON
DIFFERENT TECHNOLOGIES
USA'S ASPLEOL SIZE 1
350

1.03¢

300

250

AISSA
0.67¢
200
INDEX
(NICKEL-PLATED Aissa lacks the adequate technology for
Aissa lacks the adequate technology for
Manufacturing
STEEL = 100)
costs
competing successfully in the smaller size
competing successfully in the smaller size
150 aspleol market segment
aspleol market segment
0.41¢
0.37¢
0.34¢
100

50

Raw
materials
0
NICKEL-PLATED COPPER- ALUMINIUM COPPER, COPPER
STEEL PLATED ZINC WITH SOME ALUMINIUM "SANDWICH"
MAGNESIUM AND NICKEL OF STEEL

IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 24

AISSA’S ASPLEOL ACTIVITY WORLDWIDE ASPLEOL PRODUCTION OF INTERMEDIATE SIZES

100%
NICKEL
OTHER
90% CU-ZN
CU-SN-ZN
80%
CU-AL-NI
COPPER-
BASED
70% ALLOYS
∗Market segment in which Aissa should
∗Market segment in which Aissa should
60% CU-NI concentrate its efforts
concentrate its efforts
WORLDWIDE −Copper-based alloys accounting for
−Copper-based alloys accounting for
ASPLEOL
PRODUCTION 50% ALUMINIUM-BASED over 40% of the segment
over 40% of the segment
(PERCENTAGE)
STEEL-BASED
40%
∗Unfortunately aalow margin segment
∗Unfortunately low margin segment
30%

"SANDWICH"
20%

10%

0%

IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 25

AISSA’S ASPLEOL ACTIVITY WORLDWIDE ASPLEOL PRODUCTION OF BIGGER SIZES (*)

100% NICKEL

90% OTHER

80%

70% CU-AL-NI

60%
WORLDWIDE COPPER-
Area theoretically open to Aissa, but difficult
Area theoretically open to Aissa, but difficult
ASPLEOL BASED to penetrate, given Aissa’s lack of final press-
to penetrate, given Aissa’s lack of final press-
50%
PRODUCTION ing equipments and image
ing equipments and image
(PERCENTAGE)

40%

30% COPPER-NICKEL

20%

10%

0% "SANDWICH"

(*) SIZE EQUAL OR BIGGER THAN 100 TIMES THE SMALLER SIZE
IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 26

AGENDA



−USA *
−FRANCE
−JAPAN −INDIA
−GERMANY *
−AUSTRALIA
−MEXICO
−ITALY
−CANADA
−BELGIUM




IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 27

AISSA’S ASPLEOL ACTIVITY BM LTD.
BRIEF PROFILE

∗Turnover for the 2001/02 period
∗Turnover for the 2001/02 period ££26.9 Million (+14%)
26.9 Million (+14%)

∗Profit before taxes for the 2001/02 period
∗Profit before taxes for the 2001/02 period ££1.6 Million (+70%)
1.6 Million (+70%)

∗Installed aspleol capacity of 700 Million units/year, having discontinued the non-pressed aspleol activity in March 2001, due to
∗Installed aspleol capacity of 700 Million units/year, having discontinued the non-pressed aspleol activity in March 2001, due to
its low profitability levels
its low profitability levels
−Accounting for 40 to 50% of the total turnover
−Accounting for 40 to 50% of the total turnover

∗Aspleol activity being only international
∗Aspleol activity being only international
−Limitations for the final pressing activity in the United Kingdom
−Limitations for the final pressing activity in the United Kingdom
−Member of the consortium with the United Kingdom National Consumer
−Member of the consortium with the United Kingdom National Consumer

∗Other activities
∗Other activities
−Manufacturing of uniforms for police forces and armies, ±20% of turnover
−Manufacturing of uniforms for police forces and armies, ±20% of turnover
−Manufacturing of electrical precision components, ±20% of turnover
−Manufacturing of electrical precision components, ±20% of turnover
−Manufacturing of pressed components, ±10% of turnover
−Manufacturing of pressed components, ±10% of turnover

∗Quoted in the London Stock Exchange
∗Quoted in the London Stock Exchange

IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 28

TURNOVER AND PBIT EVOLUTION (1994-2002)

100.000
CAGR
(95-00) (00-02)
NEW CHAIRMAN
0.2% 59%

TURNOVER
10.000

THOUSAND OF
CURRENT
STERLING
POUNDS
(22)% 157%
PBIT
1.000

100
1994/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02

SOURCE: BM LTD. ANNUAL REPORT
IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 29

TURNOVER AND PBIT BREAKDOWN (1997-98)

TURNOVER PBIT
£ 10.9 MILLION £ 576 MILLION
100%
PRESSED
COMPONENTS

80% MILITARY
UNIFORMS

60%
Aspleol accounting for
Aspleol accounting for
−80% of turnover
−80% of turnover
PERCENTAGE
−68% of profits
−68% of profits
40%
PRESSED AND
NON-PRESSED
ASPLEOL

20%

0%

SOURCES: BM LTD. ANNUAL REPORT, PRESS-CLIPPINGS, IDM ESTIMATES
IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 30

ANALYSIS OF THE ASPLEOL DIVISION
∗Cyclical activity, and for the non-pressed aspleol aacommodity
∗Cyclical activity, and for the non-pressed aspleol commodity
−“The demand for aspleol seems to lag the economic cycle. ItItwas only last year that recession hit demand from developed Countries, and wiped-out
−“The demand for aspleol seems to lag the economic cycle. was only last year that recession hit demand from developed Countries, and wiped-out
that of the less-developed Countries...”
that of the less-developed Countries...” (Investors Chronicle, 17-VIII-00)
(Investors Chronicle, 17-VIII-00)
−“BM Ltd. isismanufacturing aspleol for third-party final pressing... Unfortunately, non-pressed aspleol manufacturing offers much lower profitability
−“BM Ltd. manufacturing aspleol for third-party final pressing... Unfortunately, non-pressed aspleol manufacturing offers much lower profitability
levels than the ones of pressed-aspleol... Besides, there isiscurrently aastrong price competition”
levels than the ones of pressed-aspleol... Besides, there currently strong price competition”
(Birmingham Post, 6-XII-99; Investors Chronicle, 9-XII-99)
(Birmingham Post, 6-XII-99; Investors Chronicle, 9-XII-99)
∗Volatile activity: focused ininThird-World Countries and therefore strongly influenced by exchange rates
∗Volatile activity: focused Third-World Countries and therefore strongly influenced by exchange rates
−“The determining factor for BM Ltd.’s profitability isisaspleol demand from Third-World Countries. Knowing the volatility of this markets BM Ltd...”
−“The determining factor for BM Ltd.’s profitability aspleol demand from Third-World Countries. Knowing the volatility of this markets BM Ltd...”
(Investors Chronicle, 9-XII-99)
(Investors Chronicle, 9-XII-99)
−“We hope that the new Government will make its best to maintain the Pound exchange rates at low levels... ItItwould be extremely beneficial for us,
−“We hope that the new Government will make its best to maintain the Pound exchange rates at low levels... would be extremely beneficial for us,
as 60% of our sales are export-led...”
as 60% of our sales are export-led...” (BM Ltd. 1999 Annual Report)
(BM Ltd. 1999 Annual Report)
∗Activity too dependent on the National Consumer: Over 50% of BM Ltd.’s exports inin1998 were made through the UK National Consumer
∗Activity too dependent on the National Consumer: Over 50% of BM Ltd.’s exports 1998 were made through the UK National Consumer
−“Most of BM Ltd.’s aspleol sales are obtained through the National Consumer, under aaverbal agreement by which foreign contracts are subcon-
−“Most of BM Ltd.’s aspleol sales are obtained through the National Consumer, under verbal agreement by which foreign contracts are subcon-
tracted to BM Ltd. and another private producer. BM Ltd.’s president fears that the National Consumer may make-up any excuse to retain aabigger
tracted to BM Ltd. and another private producer. BM Ltd.’s president fears that the National Consumer may make-up any excuse to retain bigger
share of this business ininits under-utilised factory”
share of this business its under-utilised factory” (Birmingham Post, 11-VII-00)
(Birmingham Post, 11-VII-00)

∗BM Ltd. needs to diversify to non-cyclical and non-commodity activities preferably ininits home market
∗BM Ltd. needs to diversify to non-cyclical and non-commodity activities preferably its home market
∗BM Ltd. needs to become independent ininthe marketing of its aspleol products
∗BM Ltd. needs to become independent the marketing of its aspleol products
IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 31

TURNOVER AND PBT COMPARISON (1998/99 VS 1999/00)

TURNOVER PBT
£ 9.9 MILLION £ 10.7 MILLION £ 660 MILLION £ 334 MILLION
100% 100%

80% 80%
2nd 2nd
SEMESTER SEMESTER

60% 60%

PERCENTAGE
PERCENTAGE

40% 40%

1st
SEMESTER

20% 20%

1st
SEMESTER
0% 0%
1998/99 1999/00 1998/99 1999/00

SOURCE: BM LTD. ANNUAL REPORTS
IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 32

FINANCIAL RESULTS OF THE 1ST SEMESTER (1999/00)

∗First semester’s profits decreasing to ££38,000 from ££267,000 in 1998/99
∗First semester’s profits decreasing to 38,000 from 267,000 in 1998/99
−“The presses of the aspleol division were working at 25% of its capacity during the worst period, before Christmas of 1999...”
−“The presses of the aspleol division were working at 25% of its capacity during the worst period, before Christmas of 1999...”
(Investors Chronicle, 13-VII-00)
(Investors Chronicle, 13-VII-00)
−“The problem lies in its key activity, the manufacturing of aspleol. The collapse in the demand for aspleol... makes BM Ltd. to
−“The problem lies in its key activity, the manufacturing of aspleol. The collapse in the demand for aspleol... makes BM Ltd. to
be producing non-pressed aspleol for third parties in great amounts, reducing slightly their sales levels”
be producing non-pressed aspleol for third parties in great amounts, reducing slightly their sales levels”
(Birmingham Post, 6-XII-01)
(Birmingham Post, 6-XII-01)
−“BM Ltd.’s chairman admits that last year, orders, at prices that could not cover overhead costs, were accepted”
−“BM Ltd.’s chairman admits that last year, orders, at prices that could not cover overhead costs, were accepted”
(Financial Weekly, 13-VII-01)
(Financial Weekly, 13-VII-01)

∗The poor results led to the replacement of BM Ltd.’s chairman
∗The poor results led to the replacement of BM Ltd.’s chairman

*Need for aggressive diversification and cost control policies in order to remain independent
*Need for aggressive diversification and cost control policies in order to remain independent

IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 33

STRATEGY OF THE ASPLEOL DIVISION (2000-2002)

∗Costs reduction
∗Costs reduction
−In 2000 substantial capital investments ininaspleol production equipments were made, ininorder to reduce the break-even point of the aspleol division
−In 2000 substantial capital investments aspleol production equipments were made, order to reduce the break-even point of the aspleol division
−In March 2001, 80 people were laid-off
−In March 2001, 80 people were laid-off
−“BM Ltd. isisprobably at present the most efficient pressed-aspleol producer ininthe industry”
−“BM Ltd. probably at present the most efficient pressed-aspleol producer the industry”
(Roger Hardman, James Capel, 5-XII-01)
(Roger Hardman, James Capel, 5-XII-01)
∗Divestment of assets not generating revenues
∗Divestment of assets not generating revenues
−In 2000 aacollection of metal alloys used for the production of aspleol by BM Ltd. was valued at ££200,000
−In 2000 collection of metal alloys used for the production of aspleol by BM Ltd. was valued at 200,000
−In June 2001 the collection was sold for an amount of ££250,000
−In June 2001 the collection was sold for an amount of 250,000
∗Commodity products such as non-pressed aspleol were eliminated: In March 2001 the manufacturing of non-pressed aspleol for third-party final press-
∗Commodity products such as non-pressed aspleol were eliminated: In March 2001 the manufacturing of non-pressed aspleol for third-party final press-
ing was discontinued
ing was discontinued
−“Towards the end of last fiscal year we analysed the part of our activities involved ininthe manufacturing of non-pressed aspleol for third-party final
−“Towards the end of last fiscal year we analysed the part of our activities involved the manufacturing of non-pressed aspleol for third-party final
pressing, and we reached the conclusion that, given the low margins that could be currently earned ininthis business, the high capital levels and over-
pressing, and we reached the conclusion that, given the low margins that could be currently earned this business, the high capital levels and over-
head costs required could not be justified...”
head costs required could not be justified...”
(BM Ltd.’s Chairman, 2001 Annual Report)
(BM Ltd.’s Chairman, 2001 Annual Report)
∗Development of an independent marketing strategy
∗Development of an independent marketing strategy
−In June of 2001 BM Ltd. obtained aacontract with the Government of India for the manufacturing of 500 Million units of pressed aspleol through
−In June of 2001 BM Ltd. obtained contract with the Government of India for the manufacturing of 500 Million units of pressed aspleol through
its own contacts
its own contacts
−In July of 2002 the roll-over clause of the contract with the Government of India was implemented
−In July of 2002 the roll-over clause of the contract with the Government of India was implemented

IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 34

PROGRAM OF ACQUISITIONS AND OTHER PROJECTS (2000-2002)

DATE ACTION VALUE ACTIVITY RATIONALE
9-II-00 Acquisition ± £ 325,000 Manufacturing of ∗ Consolidation with existing pressed components
pressed components activity: economies in overheads and manufac-
turing and assets divestment
∗ Widening of its pressed components product
range
∗ Reduction of foreign dependence
27-III-00 Acquisition ± £ 2,500,000 Manufacturing of ∗ Related activity, facilitating the entry into the
metal and bi-metal electric and electronic sectors
switches ∗ Reduction of foreign dependence
7-VI-01 Acquisition ± £ 1,000,000 Jewellery distribu- ∗ Activity that will allow for the marketing of lux-
(35% stake) tion company ury goods, including historical aspleols...
9-I-02 Acquisition ± £ 250,000 Manufacturing of ∗ Widening of its electric components product
cable-based compo- range
nents ∗ Gain access to the markets of Southern England
July New project in Marketing of cutler- ∗ Reduction of foreign dependence
2002 progress ies followed by pro-
duction plans
July New acquisition Substantial Manufacturing of ∗ Widening of its pressed components product
2002 announced electric components range
IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 35

AISSA’S ASPLEOL ACTIVITY DESCRIPTION OF GROUP ACTIVITIES: COMPETITOR # 2 OF GERMANY

∗Production of metal sheets
∗Production of metal sheets

∗Manufacturing of metal pressed components
∗Manufacturing of metal pressed components (BM Ltd. in 1998 and 2000)
(BM Ltd. in 1998 and 2000)

∗Manufacturing of electric components: switches, cables
∗Manufacturing of electric components: switches, cables (BM Ltd. in 2000 and 2002)
(BM Ltd. in 2000 and 2002)

∗Production of pressed and non-pressed aspleol
∗Production of pressed and non-pressed aspleol (Core common business)
(Core common business)

∗Manufacturing of cutlery and kitchenware products
∗Manufacturing of cutlery and kitchenware products (BM Ltd. in 2002)
(BM Ltd. in 2002)

IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 36

TURNOVER COMPARISON (2000/01 VS 2001/02)

TURNOVER
£ 10.7 MILLION £ 23.5 MILLION
100%

UNITED
80% KINGDOM
71%

62%

60% 15% reduction of BM Ltd.’s foreign dependence
15% reduction of BM Ltd.’s foreign dependence
during the (2001/02) fiscal year vs the previous
during the (2001/02) fiscal year vs the previous
year
year
40%

EXPORTS

20%

0%
2000/01 2001/02

IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 37

TURNOVER AND PBIT BREAKDOWN (2001/02)

£ 26.9 MILLION £ 1.6 MILLION
100%
PRESSED
COMPONENTS

90%

MILITARY
UNIFORMS
80%
∗Pressed aspleol accounting for
∗Pressed aspleol accounting for
70% −48% of turnover
−48% of turnover
60%
−42% of profits
−42% of profits
ELECTRIC
COMPONENTS
50%

40%
∗Equivalent share value on the 6-XII-99 of 174 p.p.
∗Equivalent share value on the 6-XII-99 of 174
vs 380 p.p. on the 11-VII-02
vs 380 on the 11-VII-02
30% −Increase of BM Ltd.’s market value of 118%
−Increase of BM Ltd.’s market value of 118%
PRESSED
ASPLEOL
20%

10%

0%
TURNOVER PBIT

SOURCES: BM LTD ANNUAL REPORTS, PRESS-CLIPPINGS, IDM ESTIMATES
IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 38

AGENDA



−USA * −FRANCE
−JAPAN −INDIA
−MEXICO −ITALY




IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 39

SUMMARY AND NEXT STEPS

∗The aspleol activity isistremendously volatile and cyclical, and in particular the non-pressed aspleol isiscurrently non-profitable at an international
∗The aspleol activity tremendously volatile and cyclical, and in particular the non-pressed aspleol currently non-profitable at an international
level
level

∗Accordingly, the export opportunities for Aissa are extremely limited due to technological reasons and the current demand collapse
∗Accordingly, the export opportunities for Aissa are extremely limited due to technological reasons and the current demand collapse

*Need to develop “opportunistic” exporting operations
*Need to develop “opportunistic” exporting operations *Variable-costing pricing policies
*Variable-costing pricing policies

*Need to develop final pressing capabilities
*Need to develop final pressing capabilities *Consortium with the National Consumer under Aissa’s control, ifif
*Consortium with the National Consumer under Aissa’s control,
possible
possible
*Need for flexibility of the production systems
*Need for flexibility of the production systems *Potential horizontal integration options
*Potential horizontal integration options

*Need to diversify activities
*Need to diversify activities *Potential vertical integration options
*Potential vertical integration options

*Need to reduce costs and to optimise the utilisation of assets
*Need to reduce costs and to optimise the utilisation of assets *Cost analysis and asset profitability evaluation
*Cost analysis and asset profitability evaluation

IDM ESPAÑOLA, S.A.
AZ1004AAA051/ 40

10aaa051

Recommended

Recommended

More Related Content

Similar to 10aaa051

Similar to 10aaa051 (20)

Recently uploaded

Recently uploaded (20)

10aaa051