Nucor Corporation
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Nucor Corporation – SWOT Profile
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Nucor Corporation
Fast Facts
1915 Rexford Road , Charlotte ,
28211,United States
+ 1 704 3667000
+ 1 704 3624208
www.nucor.com
NUE, New York Stock Exchange
23,700
December
16,439
SWOT Analysis
Weaknesses
Declining Operational Performance
Lawsuits
Threats
Increasing Manpower Costs in the US
Stringent Regulations
Threat from Substitutes
Financial Snapshot
Operating Performance
The company reported revenue of US$16,439 million
during the fiscal year 2015 (2015). The company’s
revenue declined at a compounded rate of 4.81%
during 2011–2015, with an annual decline of 22.11%
over 2014. In 2015, the company recorded an
operating margin of 5.34%, as against 6.44% in 2014.
Revenue and Margins
Nucor Corporation
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Nucor Corporation – SWOT Profile
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TABLE OF CONTENTS
1 Nucor Corporation – Business Analysis ………………………………………………………………………………… 5
1.1 Nucor Corporation – Company Overview ……………………………………………………………………………………………. 5
1.2 Nucor Corporation – Business Description ………………………………………………………………………………………….. 5
1.3 Nucor Corporation – Major Products and Services ……………………………………………………….………………………. 6
2 Nucor Corporation – Analysis of Key Performance Indicators ………………………………………………….. 7
2.1 Nucor Corporation – Five Year Snapshot: Overview of Financial and Operational Performance Indicators …….. 7
2.2 Nucor Corporation – Key Financial Performance Indicators……………………………………………………….…………. 10
2.2.1 Nucor Corporation – Revenue and Operating Profit ……………………………………………………….……………….. 10
2.2.2 Nucor Corporation – Asset and Liabilities ……………………………………………………………………………………… 11
2.2.3 Nucor Corporation – Net Debt vs. Gearing Ratio…………………………………………………………………………….. 12
2.2.4 Nucor Corporation – Operational Efficiency …………………………………………………………………………………… 13
2.2.5 Nucor Corporation – Solvency …………………………………………………………………………………………………….. 14
2.2.6 Nucor Corporation – Valuation…………………………………………………………………………………………………….. 15
2.3 Nucor Corporation – Competitive Benchmarking …………………………..……………………………………………………. 16
2.3.1 Nucor Corporation – Efficiency ……………………………………………………………………………………………………. 17
2.3.2 Nucor Corporation – Valuation…………………………………………………………………………………………………….. 18
2.3.3 Nucor Corporation – Turnover – Inventory and Asset………………………………………………………………………. 19
2.3.4 Nucor Corporation – Liquidity ……………………………………………………………………………………………………… 20
3 Nucor Corporation – Mergers & Acquisitions and Partnerships ………………………………………………. 21
3.1 Nucor Corporation – M&A and Partnerships Strategy………………………………………………………………………….. 21
4 Nucor Corporation – Recent Developments ………………………………………………………………………….. 26
5 Nucor Corporation – SWOT Analysis …………………………………………………………………………………… 29
5.1 Nucor Corporation – SWOT Analysis – Overview ……………………………………………………………………………….. 29
5.2 Nucor Corporation – Strengths ……………………………………………………………………………………………………….. 29
5.3 Nucor Corporation – Weaknesses …………………………………………………………………………………………………… 30
5.4 Nucor Corporation – Opportunities…………………………………………………………………………………………………… 30
5.5 Nucor Corporation – Threats ………………………………………………………………………………………………………….. 31
6 Nucor Corporation – Company Statement ……………………………………………………………………………. 32
7 Nucor Corporation – History……………………………………………………………………………………………….. 34
8 Nucor Corporation – Key Employees …………………………..………………………………………………………. 37
9 Nucor Corporation – Key Employee Biographies ………………………………………………………………….. 38
10 Nucor Corporation – Locations and Subsidiaries ……………………………………………………….…………. 39
10.1 Nucor Corporation – Head Office …………………………..………………………………………………………………………… 39
10.2 Nucor Corporation – Other Locations and Subsidiaries ……………………………………………………………………….. 39
11 Appendix …………………………………………………………………………………………………………………………. 43
11.1 Methodology ……………………………………………………………………………………………………………………………….. 43
11.2 Ratio Definitions ………………………………………………………………………………………………………………………….. 43
11.3 Disclaimer ………………………………………………………………………………………………………………………………….. 47
Nucor Corporation
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List of Tables
Table 1: Nucor Corporation – Major Products and Services …………………………………………………………………………………. 6
Table 2: Nucor Corporation – Key Ratios – Annual ……………………………………………………………………………………………… 7
Table 3: Nucor Corporation – Key Ratios – Interim ……………………………………………………………………………………………… 9
Table 4: Nucor Corporation – Key Capital Market Indicators …………………………..……………………………………………………. 9
Table 5: Nucor Corporation – History……………………………………………………………………………………………………………… 34
Table 6: Nucor Corporation – Key Employees …………………………………………………………………………………………………. 37
Table 7: Nucor Corporation – Key Employee Biographies ………………………………………………………………………………….. 38
Table 8: Nucor Corporation – Subsidiaries ……………………………………………………………………………………………………… 39
Table 9: Nucor Corporation – Locations………………………………………………………………………………………………………….. 42
Nucor Corporation
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List of Figures
Figure 1: Nucor Corporation – Revenue and Operating Profit …………………………………………………………………………….. 10
Figure 2: Nucor Corporation – Financial Position ……………………………………………………….…………………………………….. 11
Figure 3: Nucor Corporation – Net Debt vs. Gearing Ratio …………………………………………………………………………………. 12
Figure 4: Nucor Corporation – Operational Efficiency ……………………………………………………………………………………….. 13
Figure 5: Nucor Corporation – Solvency …………………………………………………………………………………………………………. 14
Figure 6: Nucor Corporation – Valuation …………………………………………………………………………………………………………. 15
Figure 7: Nucor Corporation – Efficiency ………………………………………………………………………………………………………… 17
Figure 8: Nucor Corporation – Valuation …………………………………………………………………………………………………………. 18
Figure 9: Nucor Corporation – Turnover – Inventory and Asset …………………………………………………………………………… 19
Figure 10: Nucor Corporation – Liquidity…………………………………………………………………………………………………………. 20
Nucor Corporation
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1 Nucor Corporation – Business Analysis
1.1 Nucor Corporation – Company Overview
Nucor Corporation (Nucor) is a steel and steel products manufacturing company. It offers carbon steel, fasteners, alloy
steel, SDS by products, raw materials and other steel products. Its portfolio of products includes joists and joist girders,
wire and wire mesh, cold finished steel bars, finished hex nuts, coiled rebar, roof decks, sheets and plates and special
profile steel trusses. It also produces direct reduced iron for use in its steel mills and processes ferrous and nonferrous
metals, pig iron and hot briquetted iron. The company along with subsidiaries operates various operating facilities in
several states in the US and also in Brazil, Canada, Colombia, Italy, Mexico, Switzerland, the UAE and Trinidad and
Tobago. Nucor is headquartered in Charlotte, North Carolina, the US.
1.2 Nucor Corporation – Business Description
Nucor manufactures steel and steel products by using scrap steel. The company, along with its subsidiaries and affiliates,
manufactures and markets steel products such as hot rolled steel and cold rolled steel. Its products find applications in the
automotive and heavy equipments markets. In addition, the company operates trading companies globally that purchase
and sell steel and steel products. The company classifies its business operations into three reportable divisions: Steel
Mills, Steel Products and Raw Materials.
The Steel Mills division of Nucor manufactures sheet steel, structural steel and plate steel along with bar steel products. It
also manages scrap-based steel mills in various facilities and are classified as Bar Mills, Sheet Mills, Structural Mills and
Plate Mills. The company’s Bar Mills produces different kinds of bars such as concrete reinforcing bars, hot rolled bars,
rod and light shapes, structural angles and channel, wire mesh and guard rail in carbon and alloy steels. These products
serves agricultural, automotive, equipment, shipbuilding, heavy truck, construction, energy, furniture, machinery, metal
building, railroad, recreational and trailer markets. Through its Sheet Mills, Nucor produces flat-rolled steel and galvanized
steel for industries such as the automotive, tube, construction, pipe and appliance. The company operates five sheet mills
in the US. The company also produces structural steel products such as wide flange steel beams, pilings and heavy
structural steel products. These products serve fabricators, construction companies, manufacturers and steel service
centers. The company operates two Plate Mills in North Carolina and Alabama, the US. It manufactures plates which find
applications in manufacturing of heavy equipment, barges, refinery tanks, rail cars and ships. This division also involves in
distribution of steel through Skyline. In FY2015, the Steel Mills division recorded order backlog of US$1.17 billion and
accounted for 67.7% of the company’s total revenue.
Through its Steel Products division, the company manufactures steel joists and joist girders, steel fasteners, steel deck,
cold finish steel, fabricated concrete, wire and wire mesh, metal building systems, reinforcing steel and light gauge steel
framing. In addition, the company through its subsidiary, Harris Steel also carries out fabrication, installation and
distribution activities of rebar for bridges, highways, other infrastructure, commercial and multi-tenant residential
construction markets. The products are sold to steel service centers, manufacturers and fabricators in the US and
Canada. It primarily operates facilities in Nebraska, South Carolina, New York, Indiana, Texas and Alabama. It also
operates additional 80 facilities in 37 states in the US and 27 in Canada. In addition, the company through Harris Steel
Inc., owns sales offices in Canada and other foreign countries. In FY2015, the Steel Products division recorded order
backlog of US$1.35 billion and accounted for 23.8% of the company’s total revenue.
The company’s Raw Materials division comprises ferrous scrap and scrap substitutes including pig iron, DRI and HBI. It
operates through the subsidiary, David J. Joseph Company and its affiliates (DJJ) The DJJ Mill and Industrial Services
business is involved in logistics and metallurgical blending operations and provides on-site handling and trading of
industrial scrap. The DJJ Rail Services business focuses on rail cars dedicated to scrap movement and offers complete
railcar fleet management and leases for third parties. DJJ operates 70 scrap recycling facilities, including 17 shredder
locations; and has a total annual ferrous scrap processing capacity of more than five million tons. It also operates DRI
plants in Trinidad and Louisiana with annual capacities of 2,000,000 and 2,500,000 metric tons. In FY2015, the Raw
Materials division accounted for 8.5% of the company’s total revenue.
Nucor Corporation
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1.3 Nucor Corporation – Major Products and Services
Nucor is a manufacturer of steel, metal buildings and components. The key products offered by the company include:
Table 1: Nucor Corporation – Major Products and Services
Products:
Steel Joists and Joist Girders
Steel Deck
Fabricated Concrete
Reinforcing Steel
Cold Finished Steel
Steel Fasteners
Metal Building Systems
Light Gauge Steel Framing
Steel Grating and Expanded Metal
Wire and Wire Mesh
Hot-Rolled Steel
Ferrous Scrap
Services:
Metal Recycling
Brokerage and Transportation
Source: Timetric
Nucor Corporation
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2 Nucor Corporation – Analysis of Key Performance Indicators
2.1 Nucor Corporation – Five Year Snapshot: Overview of Financial and Operational
Performance Indicators
The company reported revenue of US$16,439 million during the fiscal year 2015 (2015). The company‘s revenue declined
at a compounded rate of 4.81% during 2011–2015, with an annual decline of 22.11% over 2014. During 2015, operating
margin of the company was 5.34% in comparison with operating margin of 6.44% in 2014. In 2015, the company recorded
a net profit margin of 2.18% compared to a net profit margin of 3.38% in 2014.
Table 2: Nucor Corporation – Key Ratios – Annual
Key Ratios
Unit/Currency
2015
2014
2013
2012
2011
Equity Ratios
EPS (Earnings per Share)
US$
1.11
2.22
1.52
1.58
2.45
Dividend per Share
US$
1.49
1.48
1.47
1.46
1.45
Dividend Cover
Absolute
0.75
1.50
1.04
1.08
1.68
Book Value per Share
US$
23.33
24.36
20.25
24.06
23.60
Cash Value per Share
US$
6.10
3.21
3.93
3.31
3.79
Profitability Ratios
Gross Margin
%
9.62
9.02
7.43
7.79
9.40
Operating Margin
%
5.34
6.44
4.90
5.29
7.13
Net Profit Margin
%
2.18
3.38
2.56
2.60
3.89
Profit Markup
%
10.65
9.92
8.03
8.45
10.37
PBT Margin (Profit Before Tax)
%
4.31
5.71
4.15
4.39
6.25
Return on Equity
%
4.82
9.19
6.38
6.60
10.41
Return on Capital Employed
%
6.84
10.05
7.05
8.49
11.73
%
2.51
4.57
3.21
3.57
5.34
Return on Fixed Assets
%
10.36
14.81
10.62
12.11
18.16
Return on Working Capital
%
20.09
31.27
20.98
28.32
33.12
Growth Ratios
Sales Growth
%
10.78
26.37
Operating Income Growth
%
45.51
EBITDA Growth
%
52.26
Net Income Growth
%
46.29
EPS Growth
%
46.00
Working Capital Growth
%
0.58
22.52
Cost Ratios
Operating Costs (% of Sales)
%
94.66
93.56
95.10
94.71
92.87
Administration Costs (% of Sales)
%
2.79
2.59
2.53
2.34
2.20
Liquidity Ratios
Current Ratio
Absolute
4.15
3.07
3.27
2.79
2.80
Quick Ratio
Absolute
2.61
1.76
1.94
1.64
1.97
Cash Ratio
Absolute
1.47
0.54
0.77
0.57
1.07
Leverage Ratios