Posco Holdings Inc. · KRX:005490
Posco — Investor Presentation (January 2009)
28 slides from Posco's investor presentation, Jan 16, 2009
Slide 1: 2009 CEO Forum
2009 CEO Forum 2009. 1.15.
Slide 2: Agenda: 2008 Operating Results, Activities & Accomplishments, 2009 Business Plan
Figures provided in this presentation are based on unaudited financial statements of the company. Certain contents are subject to change during the course of auditing process. 2008 Operating Results Activities&Accomplishments 2009 Business Plan
Slide 3: Production/Sales
3 Production/Sales 874 936 902 POSCO SS 658 780 230 Zhangjiagang STS 33,136 31,063 30,053 POSCO 2008 2007 2006 (in thousand tons) 2006 2007 2008 (in million tons) Crude Steel Production Finished Product Sales 31.1 32.8 34.7 33.1 POSCO 30.1 Consolidated 31.2 Consolidated crude steel production of 35
Slide 4: Income Summary
4 Income Summary 25 17 25 IT, etc. 62 58 71 Energy 300 301 298 E&C 7,084 4,653 4,243 Steel 2008 2007 2006 (in billion won) (in billion won) 601 523 520 IT, etc. 744 567 413 Energy 5,565 3,915 3,840 E&C 46,467 34,715 28,752 Steel 2008 2007 2006 * Sales by sectors: includes inter-company transactions
Slide 5: Sales & operating income down as market weakened in 4Q
5 Sales&operating income down as market weakened in 4Q Global steel makers cut production by 1030% as demand industry enters downturn ?? Major issues in 4Q Carbon steel production cut due to weak market : –200Kt Mini-mill rationalization(Oct.’08Mar.’09) : –450Kt in 4Q - - Improved productivity and q
Slide 6: Summarized Income Statement (POSCO)
6 Summarized Income Statement (POSCO) (in billion won) - - (14.5%) (16.6%) (16.0%) (Profit margin) - - ??783 ??64 75 FX related gain - - ??23 573 311 Equity method gains 61.0 95 59 61 Dividend income - - (21.3%) (19.4%) (19.4%) (OP margin) - - (25.9%) (25.2%) (25.0%) (Gross margin) 3,207 3 226 3,892
Slide 7: Financial Structure
7 Financial Structure Consolidated asset grew to 47 trillion Due to investments in steel sector and new-growth-engine / increased earnings (in billion KRW) 537 553 2,033 32,260 2008 466 523 1,567 27,959 2007 438 490 1,213 24,551 2006 Equity 737 629 4,519 14,890 2008 330 484 1,867 9,458 2007 314 352
Slide 8: Summarized Balance Sheets (POSCO)
8 Summarized Balance Sheets (POSCO) (in billion won) * Cash equivalent assets : cash&cash equivalent, short-term financial instruments, trading securities 56.3 4,967 3,178 2,824 Long-term liabilities 9.6 14,466 13,202 12,466 Fixed assets 99.2 6,416 3,221 2,735 Inventory 70.4 3,229 1,895 1,804 Notes
Slide 9: Financial Ratios
9 Financial Ratios 27.2 (in billion KRW) (%) (%) 19.4 34.1 27.2 24.0 21.0 22.4 15.5 24.4 27.1 19.4 15.9 5,912 3,892 4,308 2005 2006 2007 2008 2005 2006 2007 2008 2005 2006 2007 2008 2005 2006 2007 2008 Operating Income EBITDA Return on Equity Liabilities to Equity (in billion KRW) EBITDA margin OP M
Slide 10: Activities & Accomplishments
10 2008 Operating Results Activities & Accomplishments 2009 Business Plan
Slide 11: Continued investments for global growth
12 Continued investments for global growth Expand production base in Asia where growth potential is high - - Vietnam CR Mill (CR 1.2Mt/yr) ?? Asia network connecting India&China through early entrance in rapid growing SEA mkt. - - China Tin-plate plant (Tin plate 250Kt/yr) ?? Gained entry in tin-pla
Slide 12: FINEX commercialization verified & continue technology development
13 FINEX commercialization verified&continue technology development Constant facility stabilization&achieve operation target via tech. development Continue engineering planning for scaling up Expanded global sales of automotive steel&strengthen marketing infra. Become global top 3 automotive steel p
Slide 13: 2008 Global Projects
14 Overseas Processing Centers Completed : 8 1 3 1 1 2 E.U S.E.A Mexico Japan China CJY CJY Vietnam CRM CGL, Mexico API pipe plant founded, U.S Tin Plate Plant CJY Equity in Macarthur Coal Australia CJY Equity in Namisa iron-ore mine Brazil Ferronickel Plant Gwangyang Integrated Mills In progress 1
Slide 14: 2008 Total Investment: KRW 4.9tn
15 Vietnam CRM, Mexico CGL, U.S API plant, Overseas processing centers, etc. 292 Overseas projects LNG Terminal, Magnesium plate plant 340 Energy, New Business Macarthur Coal Mine, Namisa Iron-ore mine S.Africa Manganese mine, etc. 1,089 Raw material #1 HR facility upgrade, Gwangyang #1 Caster ratio
Slide 15: Dividend & Share Price
16 Dividend&Share Price KRW 10,000 per share (includes interim dividend of 2,500won) - - Dividend yield: 2.6% (’08/e share price base), Payout ratio: 17.2% 17.2 20.5 19.4 16.0 16.8 24.5 26.0 Payout Ratio 2.6 1.7 2.6 4.0 4.3 3.7 3.0 Dividend Yield (2,500) (2,500) (2,000) (2,000) (1,500) (1,000) (500)
Slide 16: Key Subsidiaries' Activities: Posco E&C, Posco Power
17 Posco E&C Posco E&C Key Subsidiaries’ Activities Achieved KRW10tn of orders in ’08: 15% avg. yearly growth since foundation in Dec. ’94 - - Strategic diversification of overseas business Large-scale plant construction (Chile Vantanas coal power plant, etc.) Receiver order for master plan of Hanoi
Slide 17: Key Subsidiaries' Activities
18 Key Subsidiaries’ Activities Promote IT service business - - Business diversification (environment IT,etc)&enter overseas (U-city in Yangi, China) Receive orders for WiBro business&product certification - - Singed overseas supply contract of commercialized equip.&received int’l certification Incr
Slide 18: 2009 Business Plan
19 2008 Operating Results Activities&Accomplishments 2009 Business Plan
Slide 19: Price and production plunge as demand industry slows down
20 Price and production plunge as demand industry slows down Major demand industries weaken followed by economy depression Steel Market Trend 60 80 100 120 ’08.1 2 4 6 8 10 12 35 40 45 50 55 Domestic manufacturer BSI index U.S ISM manufacturer index Global steel price collapse&huge reduction in prod
Slide 20: 2009 Steel Market Outlook
21 2009 Steel Market Outlook Demand industry (auto, ship, appliance, etc.) facing recession Production/sales fall in developed nations and emerging markets Auto Auto Appliance Appliance Production growth rate falls to 1% range in ’09 - - China: production growth slows as domestic demand&export stagn
Slide 21: Global demand growth sees the first decline since '98
22 Global demand growth sees the first decline since ’98 Developed nations: negative growth for 2 consecutive yrs (’08 -4.2%, ’09 -5.0%) 2009 Steel Market Outlook China: weak 1H&slight upturn in 2H, benefited from economy support plans U.S 2007 2008 2009 114 105 97 Europe 2007 2008 2009 222 214 205
Slide 22: Raw Material Market
23 Raw Material Market Expect oversupply of 12Mt in ’09 Wider price decline in low quality, semi-anthracite coal 218 218 213 213 231 225 Demand fell since Oct. ’08 w/ steel prod’n cut - - Spot price (U$/ton) 195 ?? 180 ?? 112 ?? 73 ?? 80 Demand growth is slowing down globally - - Growth rate : +10.0
Slide 23: Stainless Steel Market
24 Stainless Steel Market Steady recovery from 2H due to continued production cuts by mills & benefits reaped from economic support plans Nickel Nickel Decreased since 1Q in ’08 (U$26??33??9K) - - Due to STS demand decrease&global financial crisis Price likely stay low (U$10K12K) in ’09 - - STS dema
Slide 24: Strengthen competitiveness to cope in weak business conditions
26 Strengthen competitiveness to cope in weak business conditions Implement cost saving target that sets the world’s best cost competitiveness - - Improve cost structure&customized cost saving program for each division subsidiaries 2009 Business Plan 2006 2007 2008 2009(Target) 1,112.1 828.7 738.2 9
Slide 25: Strengthen growth investment in preparation for post-recession
27 Strengthen growth investment in preparation for post-recession Invest to expand domestic capacity&HVA products (’09 CAPEX KRW 5.9tn) - - Secure long-term growth engine in preparation for forthcoming post-downturn - - Accelerate investments for setting up 41Mt production capacity New steelmaking,
Slide 26: 2009 Business Plan (subsidiaries)
28 Economic construction of LNG plant & by-product-gas-combined power generating plant J/V of fuel-cell stacking plant&build production facilities Keep sound financials through risk mgmt. designed for each project Enter plant bus. through strengthened synergy w/ Daewoo Eng. Strengthen SOC sector&mai
Slide 27: 2009 Business Plan (Financials)
29 The data above represents the Company’s internal objectives, thus should not be used as a basis for investment decisions 2009 Business Plan (Financials) * POSCO Investment (KRW 7.5tn): CAPEX (5.9), Overseas Steel/Raw Material (1.5), Energy/New Biz. (KRW 87bn) 30 33 35.0 - Consolidated 27 30 30.6
Slide 28: 2009 CEO Forum
2009 CEO Forum 2009. 1.15.