Slide 1: CEO Forum - POSCO's Operating Results for 2005
January 2006 2006 CEO Forum www.posco.com EX-99.1 CEO FORUM - POSCO'S OPERATING RESULTS FOR 2005
Slide 2: Agenda
I. 2005 Operating Results II. Steel Industry Overview III. Mid-term Business Strategies The figures provided in this presentation are based on unaudited financial statements. Certain numbers may be presented differently once audited and the company takes no responsibility and accepts no liability fo
Slide 3: 2005 Operating Results: Production & Sales
28.9 30.2 Production & Sales Steel Production Sales of Products (mm tons) (mm tons) 30.5 Sales of Strategic Products 2003 2004 2005 ?? 29 29.5 30 8.9 10.8 (mm tons) 12.5 34.7% 40.6% 48.4% 2003 2004 2005 500 2500 2900 3100 2700 3100 3200 14.0 14.9 14.8 15.4 15.0 15.5 1H 2H 2003 2004 2005 500 2500 290
Slide 4: Revenue, Operating & Net Income, Profitability
Revenue Operating & Net Income (KRW bn) (KRW bn) Profitability 2005 Operating Results 2003 2004 2005 500 2400 3000 3700 2600 3500 3800 6,788 7,571 9,039 10,753 11,034 1H 2H 14,359 19,792 21,695 10,661 2003 2004 2005 500 2100 3300 4000 1078 1500 2300 3,059 5,054 1,981 3,826 4,013 Operating Income Net
Slide 5: Financial Ratios
2003 21.3 25.5 6,500 4,519 31.5 32.8 Operating Margin EBITDA & EBITDA Margin (%) (KRW billion,%) 27.2 Equity/Total Assets (%) 70.4 75.4 Return on Equity 16.2 26.3 (%) 80.7 22.5 2004 2005 2003 2004 2005 2003 2004 2005 2003 2004 2005 Financial Ratios 2005 Operating Results 7,393 34.1
Slide 6: Major Business Activities: POSCO India Project
? POSCO India Project ? 1st Stage Plan (approved by BOD : Dec '05) ? Construction of Integrated Steel Mill ( ~ Dec '10) - Location: Jagatsinghpur in the state of Orissa - Capacity: 4 mm tons of crude steel (FINEX 2 mm tonsx 2 plants) - Products : Hot rolled coil 2.5 mm tons, slab 1.5 mm tons - Capex
Slide 7: Major Business Activities (Cont'd): Facilities Investments
? Facilities Investments ? Automotive Sheet Lines - Construct Gwangyang No.5 CGL : 1.4 ^ 1.9 mm tons - Expand TWB Facility : Capacity 3.9 ('05) ^ 5.5 ('06) ^ 6.7 mm sheets ('07) Expand production of premium Electrical sheet (~ Mar. '07) - GO Capacity 80^200K tons/year Rationalization of #2 Plate for
Slide 8: Major Business Activities (Cont'd): Energy and Raw Materials
? Joint Investment in Overseas Mines - - Stable, economic procurement of LNG to meet environmental regulations (Capacity: 1.7 mm tons/year) - - Contract for direct import of LNG : 550k tons/year for 20 years from '05 (Cost saving of KRW 60bn p.a. expected) ? Construction of LNG Terminal ? Part Acqui
Slide 9: Major Business Activities (Cont'd)
? Listing Shares on Tokyo Stock Exchange - Enables 24hr global trading of POSCO shares - 31% of total outstanding shares listed in overseas indexes (NYSE/LSE 27%, TSE 4%) ? Outsourcing to Improve Human Resource Structure - 8 areas including roll maintenance/ raw materials unloading ? Highest Credit
Slide 10: Treasury Shares & Dividends
? Treasury stock purchase and/or cancellation for the last 5 years - Purchased and retained 2% treasury stocks in '05 ? Treasury Shares (000 shares) Purchase Cancellation Retention 2001 - 2,891 11,663 2002 - 2,808 8,221 2003 1,816 1,816 7,346 2004 1,779 1,779 5,771 2005 1,744 - 6,189 Total 5,339 9,2
Slide 11: Steel Industry Overview
I. 2005 Operating Results II. Steel Industry Overview III. Mid-term Business Strategies
Slide 12: Steel Industry Overview: New Trends of the Steel Industry
Focusing More on Premium Products due to Intensified Competition in Commodity Steel Market Growing Dominance of Suppliers - 3 iron ore suppliers 76%, 5 coal suppliers 62% vs. top 5 steel makers 19% Competitiveness of Steel Makers with Captive Mines Increased Consolidation moving from Regional to Eco
Slide 13: Chinese Steel Industry Overview
Chinese Steel Industry Overview Overflow expected from Excessive supply Government Policy expected to Accelerate Restructuring Steel Industry Overview Price cut by domestic majors : some prices below cash cost New Steel Policy (July '05) - Capacity expansion under control, encouragement of consolida
Slide 14: Domestic Steel Overview
Domestic Steel Overview Stable Growth of Steel Consumption Ship building : High Value-added Vessels - Volume (000GT) : 15,143 ('04) ^ 16,941 ('05) ^ 16,790 ('06) Automobile : Domestic sales / exports to grow - Production volume (000Units): 3,469 ('04) ^ 3,603 ('05) ^ 3,739 ('06) Home appliances : Hi
Slide 15: Mid-term Business Strategies
I. 2005 Operating Results II. Steel Industry Overview III. Mid-term Business Strategies
Slide 16: Mid-term Business Strategies: Main Strategies
Main Strategies ? Pursue Global Growth ? Secure Technological Leadership ? Enhance Cost Competitiveness ? Innovate Corporate Culture Mid-term Business Strategies
Slide 17: Mid-term Business Strategies: Global Growth
? Targeting Global Production of 50 mm tons Domestic capacity of 35 mm tons, focusing on quality growth ('08) - Facility investment to upgrade quality of all products - Investment in capacity expansion Overseas capacity of 15 million tons ('10) - Construction of steel plant in India (12 mm tons on c
Slide 18: Mid-term Business Strategies: Technological Leadership
? Shift to Premium Steel Production/Sales Structure ? Development of Innovative Technology ? Commercialization of FINEX Technology ('06) - Achieve manufacturing cost equivalent to that of a 3 mm ton capacity furnace ? Develop Technology to Commercialize Strip Casting - Complete demo plant and develo
Slide 19: Mid-term Investments
???? ????/???? ??? ??? 74 18 8 Domestic Steel 72% Raw Material & Overseas Steel 20% Energy,etc 8% ????? Capacity Expansion ???? ???? ??/???? 2.5 1.8 0.7 2.2 0.5 Environmental/ Recurring Investments 6% 2) Capacity Expansion : Investment for 34 mm tons Capacity (FINEX, BF Revamp,etc) 1) Product Upgard
Slide 20: 2006 Business Plan
The data above represents the Company's internal objectives, and should not be used as a basis for investment decisions 2006 Business Plan 2005 2006(F) Crude Steel Production (mm tons) 30.5 30.1 - Consolidated Production 31.4 31.2 Sales Volume (mm tons) 28.7 29.0 Revenue (KRW tr) 21.7 19~20 - Consol
Slide 21: January 2006 2006 CEO Forum www.posco.com
January 2006 2006 CEO Forum www.posco.com