Business Analysis of Steel Dynamics

 Analyze Historical Performance, Strategic Priorities, And Business Improvement Opportunities of Steel Dynamics

STEEL DYNAMICS

Business Overview

Steel Dynamics, Inc., together with its subsidiaries, engages in the steel products manufacturing and metals recycling businesses in the United States and internationally. The company operates through Steel Operations, Metals Recycling Operations, Steel Fabrication Operations, and Other segments. The Steel Operations segment provides a range of sheet steel products, such as hot roll, cold roll, and coated steel products; structural steel beams and pilings to construction market; various rail products for the railroad industry; rounds, round-cornered squares, and round engineered bars; threaded rod products, and cold drawn and heat treated bars; angles, merchant rounds, flats and channels, and reinforcing bar; and beams, channels, and specialty steel sections. This segment serves construction, automotive, manufacturing, transportation, heavy and agriculture equipment, and pipe and tube markets. The Metals Recycling Operations segment is involved in the purchase, process, and resale of ferrous and nonferrous scrap metals into reusable forms and grades. Its ferrous products include heavy melting steel, busheling, bundled scrap, shredded scrap, steel turnings, and cast iron products; and nonferrous products comprise aluminum, brass, copper, stainless steel, and other nonferrous metals. This segment also provides transportation logistics, management, marketing, brokerage, and consulting services related to the scrap industry. The Steel Fabrication Operations segment produces steel building components comprising steel joists, girders, trusses, and steel decks primarily for the non-residential construction industry. The Other segment offers pig and hot briquetted iron; and iron nugget products that are used in electric arc furnace steel mill production. Steel Dynamics, Inc. was founded in 1993 and is headquartered in Fort Wayne, Indiana.

Steel Dynamics

Steel Dynamics


R&P Rank: 352
Sector: Basic Materials
Industry:Metal Mining
H.Q Location:Indiana
Website: www.steeldynamics.com
Company Address:
7575 W JEFFERSON BLVD, FORT WAYNE IN 46804
Ph:260-459-3553

Business Analysis of Steel Dynamics

The Basic Materials Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Steel Dynamics compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Steel Dynamics to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.

Here is the performance snapshot of Steel Dynamics with an interactive chart.

  1. Revenue Growth: Steel Dynamics reported a revenue growth of 2.4% year-on-year during 2016. Metal Mining Industry grew at -5.5% in the same period
  2. COGS share of Revenues: As a percentage of revenue, Steel Dynamics spent 82.8% of its total revenues on COGS. Metal Mining industry average (COGS share of revenue) in the same period was 86.3%
  3. R&D share of Revenues: Steel Dynamics R&D share of Revenues details are not available because either company does not share the data or we do not have it
  4. SG&A share of Revenues: As a percentage of revenue, Steel Dynamics spent 5.7% of its total revenues on Sales, Marketing, and General Administration (SG&A). Metal Mining industry average SG&A spending in the same period was 6.3%
  5. Inventory share of Revenues: As a percentage of revenue, Steel Dynamics spent 16.4% of its total revenues on Inventories. Metal Mining industry average Inventory spending in the same period was 20.9%
  6. Accounts Payable share of Revenues: As a percentage of revenue, Steel Dynamics invested 5.1% of its total revenues on Accounts Payable (A/P) Metal Mining industry average Accounts Payable investment in the same period was 9.8%
  7. Accounts Receivable share of Revenues: As a percentage of revenue, Steel Dynamics invested 9.4% of its total revenues on Accounts Receivable (A/R). Metal Mining industry average Accounts Receivable investment in the same period was 10.1%
  8. PP&E share of Revenues: As a percentage of revenue, Steel Dynamics invested 35.8% of its total revenues on Property, Plants, and Equipments (PP&E). Metal Mining industry average PPE investment in the same period was 67.7%
  9. Intangibles share of Revenues: As a percentage of revenue, Steel Dynamics invested 8.7% of its total revenues on Intangibles. Metal Mining industry average Intangibles investment in the same period was 10.6%
  10. Net Margins: Steel Dynamics Net Margins in the year 2016 were 4.9%. Metal Mining industry average Net Margins in the same period were -3.7%

Sector and Industry Association of Steel Dynamics

For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.

Steel Dynamics is associated with Basic Materials Sector and Metal Mining Industry.

Basic Materials sector is comprised of the following industries: Metal Mining; Coal Mining; Chemicals. The definitions for each of the industries is as follows:

  • Metal Mining industry includes companies primarily engaged in mining, developing mines, or exploring for precious metals such as Gold, Silver, Platinum and base metals such as Iron, Copper, Aluminum, Lead, and Zinc. It also includes companies that manufacture alloys such as steel.
  • Coal Mining industry includes companies engaged in the exploration for and/or mining of coal.
  • Chemicals industry includes companies that produce and/or distribute commodity and specialty chemicals. The companies manufacture three general classes of products: (1) basic chemicals, such as acids, alkalies, salts, and organic chemicals; (2) chemical products to be used in further manufacture, such as synthetic fibers, plastics materials, dry colors, and pigments; and (3) finished chemical products to be used as materials or supplies in other industries, such as paints, fertilizers, and explosives.

Industry Ranking of Steel Dynamics

With $7.8 billion revenues, Steel Dynamics ranked number 7 of all the companies in the US Metal Mining industry. There were a total of 34 public companies in the US Metal Mining industry that had revenues greater than $50 million during 2016.

The top-10 companies in the US Metal Mining industry by revenues during 2016 were:

  1. Nucor ($16.2 billion)
  2. Freeport-McMoRan ($14.8 billion)
  3. Arconic ($12.4 billion)
  4. United States Steel ($10.3 billion)
  5. Alcoa ($9.3 billion)
  6. Reliance Steel & Aluminum ($8.6 billion)
  7. Steel Dynamics ($7.8 billion)
  8. A-Mark Precious Metals ($6.8 billion)
  9. Newmont Mining ($6.7 billion)
  10. AK Steel Holding ($5.9 billion)

Business Model Analysis (BMA) Framework

We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.

Next Steps

  • Conduct a holistic benchmarking; to identify and target additional sources of value
  • Get in touch with us to learn more about Business Model Analysis Framework
  • Get free data, charts, and analysis of Steel Dynamicsand its peers on select key performance indicators by clicking the reports provided below

Industry Peers and Competitors of steel-dynamics

United States Steel (X) Business Analysis – Analyze Historical Performance, Strategic...

United States Steel Corp with $10 billion revenues in the year 2016 was the number 4 Metal Mining company. Read this report to know the top competitors of United States Steel and identify growth and cost optimization opportunities of United States Steel

Alcoa (AA) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Alcoa Corp with $9 billion revenues in the year 2016 was the number 5 Metal Mining company. Read this report to know the top competitors of Alcoa and identify growth and cost optimization opportunities of Alcoa

Reliance Steel & Aluminum (RS) Business Analysis – Analyze Historical Performance,...

Reliance Steel & Aluminum Co with $9 billion revenues in the year 2016 was the number 6 Metal Mining company. Read this report to know the top competitors of Reliance Steel & Aluminum and identify growth and cost optimization opportunities of Reliance Steel & Aluminum

A-Mark Precious Metals (AMRK) Business Analysis – Analyze Historical Performance, Strategic...

A-Mark Precious Metals, Inc. with $7 billion revenues in the year 2016 was the number 8 Metal Mining company. Read this report to know the top competitors of A-Mark Precious Metals and identify growth and cost optimization opportunities of A-Mark Precious Metals

Newmont Mining (NEM) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Newmont Mining Corp with $7 billion revenues in the year 2016 was the number 9 Metal Mining company. Read this report to know the top competitors of Newmont Mining and identify growth and cost optimization opportunities of Newmont Mining

AK Steel Holding (AKS) Business Analysis – Analyze Historical Performance, Strategic...

AK Steel Holding Corp with $6 billion revenues in the year 2016 was the number 10 Metal Mining company. Read this report to know the top competitors of AK Steel Holding and identify growth and cost optimization opportunities of AK Steel Holding

Revenues Analysis

Steel Dynamics (STLD) Revenues And Revenue Growth From 2012 To 2016

This report provides the last five years revenues and revenue growth of Steel Dynamics Inc (STLD) from 2012 to 2016. Steel Dynamics generated a total of $7.8 billion revenues during 2016. Steel Dynamics reported a revenue growth of 2.4% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in December.

Steel Dynamics (STLD) Revenues And Revenue Growth From 2002 To 2016

This report provides the last fifteen years revenues and revenue growth of Steel Dynamics Inc (STLD) from 2002 to 2016. Steel Dynamics generated a total of $7.8 billion revenues during 2016. Steel Dynamics reported a revenue growth of 2.4% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in December.

Steel Dynamics (STLD) Revenue Growth Comparison With Industry Growth From 2012...

This report provides a comparison of Steel Dynamics Inc (STLD) revenue growth with Metal Mining industry growth during the last five years from 2012 to 2016. Steel Dynamics reported a revenue growth of 2.4% year-over-year during 2016. The Metal Mining industry growth was -5.5% year-over-year during 2016. Steel Dynamics growth was faster than the industry during 2016.

Profit Analysis

Steel Dynamics (STLD) Net Profit And Net Margin From 2012 To...

This report provides the last five years net profit and net margin of Steel Dynamics Inc (STLD) from 2012 to 2016. Steel Dynamics reported a total net income of $382.1 million during 2016. Steel Dynamics generated a total of $7.8 billion revenues during 2016. Steel Dynamics net profit margin was 4.9% during 2016. The net profit and the net profit margin correspond to the fiscal year ending in December.