Bluescope Steel Limited · ASX:BSL
Bluescope Steel — FY2018 Earnings Presentation
83 slides from Bluescope Steel's earnings presentation, Aug 13, 2018
Slide 1: FY2018 Financial Results Presentation
FY2018 FINANCIAL RESULTS PRESENTATION Mark Vassella Managing Director and Chief Executive Officer Tania Archibald Chief Financial Officer 13 August 2018 BlueScope Steel Limited. ASX Code: BSL ABN: 16 000 011 058
Slide 2: Important Notice
IMPORTANT NOTICE THIS PRESENTATION IS NOT AND DOES NOT FORM PART OF ANY OFFER, INVITATION OR RECOMMENDATION IN RESPECT OF SECURITIES. ANY DECISION TO BUY OR SELL BLUESCOPE STEEL LIMITED SECURITIES OR OTHER PRODUCTS SHOULD BE MADE ONLY AFTER SEEKING APPROPRIATE FINANCIAL ADVICE. RELIANCE SHOULD NOT B
Slide 3: FY2018 Highlights
FY2018 HIGHLIGHTS The Tate Home in Waiheke, NZ. Designed by Chris Tate and installed by Clive Matthews. Features Colorsteel® Endura® in Ebony
Slide 4: Safety
SAFETY 4 Continuing our journey towards Zero Harm LTIFR Lost time injuries per million man-hours worked 0.80 0.55 0.57 0.62 FY2015 FY2016 FY2017 FY2018 MTIFR 5.6 5.4 Medically treated injuries per 4.6 5.1 million man-hours worked FY2015 FY2016 FY2017 FY2018 LTIFR and MTIFR includes Orrcon, Fielders
Slide 5: FY2018 Headlines
FY2018 HEADLINES 5 Strong finish to the year with 2H underlying EBIT of $745M UNDERLYING EBIT UNDERLYING EBIT RETURN ON REPORTED NPAT INVESTED CAPITAL $1,269M1 20.0% $1,569M3 Up $164M on FY2017 Up from 18.5% in FY2017 Up 119% on FY2017 2H underlying EBIT $745M2 FREE CASH FLOW CAPITAL MANAGEMENT NET
Slide 6: Underlying EBIT by Segment
UNDERLYING EBIT BY SEGMENT 6 Strong group performance driven by a robust and diversified portfolio AUSTRALIAN STEEL PRODUCTS NORTH STAR BUILDING PRODUCTS ASIA & NORTH AMERICA $587M1 $431M $185M Up 28% on FY2017 Up 6% on FY2017 Down 12% on FY2017 2H underlying EBIT $326M 2H underlying EBIT $285M 2H u
Slide 7: Our Bond, Strategy, Financial Principles & Approach to Sustainability
OUR BOND, STRATEGY, FINANCIAL PRINCIPLES & APPROACH TO SUSTAINABILITY 7 GUIDE WHAT WE AIM TO ACHIEVE AND HOW WE DO IT
Slide 8: Our Bond
OUR BOND 8 Our Bond guides our decision making in choosing to do what is right OUR CUSTOMERS OUR PEOPLE OUR SHAREHOLDERS OUR COMMUNITIES ARE OUR PARTNERS ARE OUR STRENGTH ARE OUR FOUNDATIONS ARE OUR HOMES Our success depends on Our success comes from our Our success is made Our success relies on our
Slide 9: Our Strategy – A Disciplined Approach to Growth and Shareholder Returns
OUR STRATEGY – A DISCIPLINED APPROACH TO GROWTH AND SHAREHOLDER 9 RETURNS FROM A POSITION OF STRENGTH We are A steel building products company Our Target Top quartile shareholder returns and safe operations Our Strategic Focus areas Deliver Grow premium branded steel Maximise value from competitive
Slide 10: Financial Principles
FINANCIAL PRINCIPLES 10 Clearly stated financial principles to guide our decision making RETURN INVESTMENT BALANCE SHEET HURDLES TIMING CAPACITY STEELMAKING • Every business to deliver • Intent to have financial • Target positive cash of • Commodity steelmaking in ROIC > WACC capacity through the cy
Slide 11: ROIC Focus
ROIC FOCUS 11 Targeting returns above cost of capital to ultimately drive shareholder returns Group Underlying ROIC Performance (%) 22.9% 19.6% • Underlying EBIT ROIC is the primary measure of 17.5% 17.1% performance across all business units and the group. ROIC is a key discipline for: i. performan
Slide 12: Capital Allocation and Shareholder Returns
CAPITAL ALLOCATION AND SHAREHOLDER RETURNS 12 Focus on ROIC and EPS growth to ultimately drive shareholder returns Foundation Maintain safe and reliable operations, and operate within The larger buy-back of $250M and Financial Principles, including meeting net cash targets and increased 8.0 cps fina
Slide 13: Capital Expenditure
CAPITAL EXPENDITURE 13 Returns focussed process driving competition for capital Capital expenditure principles Examples of growth opportunities Building Products Asia North Star INVEST TO MAXIMISE VALUE Next Generation Building Products Asia Expansion opportunity ZINCALUME™ roll out Retail roll out
Slide 14: North Star Expansion Evaluation
NORTH STAR EXPANSION EVALUATION 14 Comprehensive study initiated to examine expansion opportunity of 600 to 900 thousand metric tonnes per annum North Star’s competitive position US$M EBITDA and spread2 • Option to expand existing production EBIT margin1 450 434 flows through possible third electric
Slide 15: Climate Change
CLIMATE CHANGE 15 Our four pillars of commitment to action Support Australia’s 2030 Acknowledge steelmaking Governance structures seek to Steel plays a key role in sustainable emissions target, in line produces emissions; ensure understanding and development, given its longevity with the Paris commi
Slide 16: Supply Chain Sustainability
SUPPLY CHAIN SUSTAINABILITY 16 Updated our supply chain standards; risk prioritised approach to assessing and engaging suppliers • Committed to respecting human rights • Published Statement on Human Rights and Responsible Sourcing Standard earlier this year • Completed ESG risk assessment and analys
Slide 17: Governance and Business Conduct
GOVERNANCE AND BUSINESS CONDUCT 17 A core responsibility for Board and Management In Our Bond, we recognise that our success depends on our customers and suppliers, our people and our communities, and that our strength is choosing to do what is right. We promote a culture among our employees where t
Slide 18: Diversity and Inclusion
DIVERSITY AND INCLUSION 18 Strong focus and effective strategies creating demonstrable improvement in workforce diversity Female % of workforce1 Female % of recruitment 25% Board 25% 33% Executive 11% Leadership Team 25% 33% 14% Executives 15% 20% 40% 37% 27% 33% Salaried 27% 29% 28% 23% Operator 4%
Slide 19: Group and Segment Financials
GROUP AND SEGMENT FINANCIALS Hau Nui House in Wellington, NZ. Designed by Hugh Tennant and installed by Metalcraft. Features Colorsteel® in Ironsand
Slide 20: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 20 Stronger spreads and domestic demand led to $587.4M underlying EBIT – up $128.0M on last year Underlying EBIT ($M) • 24.6% Underlying ROIC 587.4 • Stronger realised spread 459.4 – Domestic and export steel price rises following 325.7 2H lift in global steel prices 216.9
Slide 21: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 21 Continued focus on customer engagement is underpinning Australian demand – despatches up 4.5% DWELLING Total Australian external domestic despatch volumes (Kt) • A significant proportion of product goes to alterations and additions. Sub-segment performing well Total cons
Slide 22: North Star
NORTH STAR 22 Underlying EBIT up 6% with stronger spreads and incremental capacity Underlying EBIT ($M) • 24.8% Underlying ROIC 430.6 • Rally in Midwest benchmark steel prices during 2H 406.6 FY2018 supported by strength in demand and 195.3 favourable trade environment 285.4 2H – Realised prices als
Slide 23: Building Products Asia and North America
BUILDING PRODUCTS ASIA AND NORTH AMERICA 23 Benefit of diversified geographical exposure – North America, India and Indonesia stronger; other businesses softer Underlying EBIT ($M) • 13.3% Underlying ROIC 208.7 • North America: strong volume and margin performance in improving demand and price envir
Slide 24: Buildings North America
BUILDINGS NORTH AMERICA 24 Underlying EBIT up 30%; improved margins and strengthening demand Underlying EBIT ($M) • 19.7% ROIC 74.6 57.5 • Softness early in the year in premium manufacturing and industrial segments impacted volumes/margins 17.5 48.2 2H • Order intake recovered strongly from Q2 FY201
Slide 25: BlueScope Properties Group (BPG)
BLUESCOPE PROPERTIES GROUP (BPG) 25 BPG creates downstream demand for the builder network and delivers returns in its own right • FY2018 EBIT contribution of $16.4M to Buildings North America 1 • BPG develops industrial properties (warehouses and distribution centres) • Provides direct access to the
Slide 26: New Zealand and Pacific Steel
NEW ZEALAND AND PACIFIC STEEL 26 Strong performance on productivity improvements and selling prices Underlying EBIT ($M) • 31.6% ROIC 111.7 • Further productivity improvements and cost savings, mainly volume benefit from plant 70.7 2H throughput improvements 61.1 • Increased steel selling prices on
Slide 27: Underlying Group EBIT Variance
UNDERLYING GROUP EBIT VARIANCE 27 15% improvement in underlying EBIT over FY2017 largely due to volume, spread and margin FY2018 vs FY2017 ($M) 2H FY2018 vs 1H FY2018 ($M) Conversion & other costs ($M) Conversion & other costs ($M) Net spread increase $216.4M Cost improvement initiatives 123 Cost im
Slide 28: Cash Flow and Net Debt
CASH FLOW AND NET DEBT 28 Average free cash flow of ~$700M over last three years; $64M net cash at 30 June 2018 Net cash flow (before investment exp and financing) ($M) Net cash / (debt) ($M) 749 731 638 Average free cash flow of (190.8) $706M over last three years (198.2) $M FY2016 FY2017 FY2018 (3
Slide 29: Capital Expenditure
CAPITAL EXPENDITURE 29 Maintaining safe and reliable operations and a disciplined approach to growth FY2018 and FY2017 ($M) 1H FY2019 and 2H FY2019 ($M) Largest growth projects: $136M in 1H, $176M in 1H, • Painting and coating capacity in Thailand $247M in 2H $213M in 2H • Investment in next generat
Slide 30: Balance Sheet
BALANCE SHEET 30 Investment grade credit ratings; strong credit metrics Net debt / (cash) ($M) Leverage (Net debt to LTM underlying EBITDA1) ✓ Investment grade Step-up and rapid achieved April 2018 1373 pay-down of North North Star acquisition Star 50% acquisition 1.6x ✓ US$500M 144a Notes replaced
Slide 31: Non Current Asset Carrying Values & Accounting Standard Changes
NON CURRENT ASSET CARRYING VALUES & ACCOUNTING STANDARD CHANGES 31 Non current asset carrying values Australian Steel Products • Full reversal of previously impaired plant and equipment ($216.0M). Will result in ~$25M increase in annual depreciation charge going forward • Recognition of deferred tax
Slide 32: Outlook & Summary
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Slide 33: 1H FY2019 Outlook
1H FY2019 OUTLOOK1 33 Australian Building Products Asia Buildings New Zealand & North Star Steel Products & North America North America Pacific Steel • Benchmark spreads improving • Average benchmark spread2 • Continuing strong performance • Continuation of strong building • Expect prices and domest
Slide 34: 1H FY2019 Outlook
1H FY2019 OUTLOOK1 34 • The Company currently expects 1H FY2019 underlying EBIT to be around 10% higher than 2H FY2018 (which was $745.0M) • Based on assumptions of average1: – East Asian HRC price of ~US$575/t – 62% Fe iron ore price of ~US$65/t CFR China – Index hard coking coal price of ~US$180/t
Slide 35: Questions?
BLUESCOPE QUESTIONS?
Slide 36: BlueScope: A Different Kind of Steel Building Products Company
BLUESCOPE: A DIFFERENT KIND OF STEEL BUILDING PRODUCTS COMPANY Ivanhoe Grammar School in VIC, Australia. Designed by McBride Charles Ryan and built by Building Engineering. Features Colorbond® Steel in Monument® in Lysaght® Longline 305® and Spandek® and Zincalume® Steel in Lysaght® Klip-Lok700 High
Slide 37: What Makes Us Different?
BLUESCOPE: A DIFFERENT KIND OF STEEL BUILDING PRODUCTS COMPANY 37 What makes us different? TECHNOLOGY, BUSINESS COST BRANDING & CHANNELS DIVERSIFICATION COMPETITIVENESS DISCIPLINED CASH GENERATION & APPROACH TO GROWTH CAPITAL MANAGEMENT SUSTAINABILITY
Slide 38: Technology, Branding & Channels
TECHNOLOGY, BRANDING & CHANNELS 38 Continued investment in research & development to maintain leadership in steel coating and painting technologies Product Technology and Development Leadership Advanced pre-painted and metallic coating development for building, construction and home appliance market
Slide 39: Technology, Branding & Channels: Brands
TECHNOLOGY, BRANDING & CHANNELS 39 Brands – a portfolio of many well-known and respected names to support our premium branded positions Australia New Zealand Asia North America ®
Slide 40: Technology, Branding & Channels: Channels
TECHNOLOGY, BRANDING & CHANNELS 40 Channels – clear focus on knowing our end customers and maintaining strong channels to market Australia New Zealand Asia North America
Slide 41: Business Diversification
BUSINESS DIVERSIFICATION 41 Geographic diversity and increasing contribution from value-added products Underlying EBITDA by region ($M) BlueScope despatch volume mix 100% Buildings North America NZ & Pacific $155M 90% Asia 9% Building products $173M 80% Higher value 10% added 70% Australia Australia
Slide 42: Cost Competitiveness
COST COMPETITIVENESS 42 Australian steelmaking breakeven at minimum recent spreads; North Star leading margin in U.S. steelmakers East Asian steel spread & estimated ASP steelmaking cash breakeven (US$/t) North Star’s and North American peers’ EBIT margin 800 19.3% 700 600 500 400 9.4% 300 200 100 S
Slide 43: Disciplined Growth
DISCIPLINED GROWTH 43 Returns focussed process driving competition for capital Capital expenditure principles Examples of growth opportunities Building Products Asia North Star INVEST TO MAXIMISE VALUE Next Generation Building Products Asia Debottlenecking opportunity ZINCALUME™ roll out Retail roll
Slide 44: Disciplined Growth: Light Gauge Steel Framing
DISCIPLINED GROWTH 44 Australian Steel Products case study: light gauge steel framing growth The opportunity for growth How we are capturing the opportunity Current low share in detached ‘The Inner Strength’ a recent major residential framing and marketing re-launch targeting commercial building seg
Slide 45: Disciplined Growth: Roll Out of Retail Strategy
DISCIPLINED GROWTH 45 Building Products case study: roll out of retail strategy GROWING THE RETAIL CREATING A PREMIUM INVESTING IN EDUCATING CONDUCTING NATIONAL ONGOING TRAINING FOR DEALER NETWORK RETAIL EXPERIENCE THE CHANNEL & USERS MARKETING CAMPAIGNS DEALER NETWORK • Retail stores across ASEAN •
Slide 46: Cash Generation & Capital Management
CASH GENERATION & CAPITAL MANAGEMENT 46 Robust cash generation to support growth and shareholder returns Free cash flow ($M) Net debt / (cash) ($M) Shareholder returns ($M) Operating cash flow less capex 778 749 731 Dividend 638 Buy-back 362 275 232 190 300 154 150 17 34 (64) 40 62 Jun-15 Jun-16 Jun
Slide 47: Approach to Sustainability
APPROACH TO SUSTAINABILITY 47 Strong performance and continued focus on sustainability SAFETY, HEALTH & CLIMATE CHANGE SUPPLY CHAIN GOVERNANCE AND DIVERSITY AND WELLNESS AND ENERGY SUSTAINABILITY BUSINESS CONDUCT INCLUSION Continuing our journey towards BlueScope supports Australia’s Committed to re
Slide 48: Approach to Sustainability: Enhancing Reporting
APPROACH TO SUSTAINABILITY 48 Enhancing our sustainability reporting FY2016 Report FY2017 Report FY2018 Report Initial step towards sustainability reporting, Substantive update using stakeholder Further update using GRI framework combining content of BlueScope’s annual consultation and GRI framework
Slide 49: Additional Information – Group-Level Material
ADDITIONAL INFORMATION – GROUP-LEVEL MATERIAL Investigator College Senior School in SA, Australia. Designed by Flightpath Architects and built by Partek Construction + Interiors. Features Colorbond® steel Matt in Monument® in Revolution Roofing® Maxline
Slide 50: Financial Headlines
FINANCIAL HEADLINES 50 FINANCIAL YEAR ENDED $M (unless marked) 30 JUN 2017 30 JUN 2018 FY2018 vs FY2017 Total revenue 10,757.7 11,578.2 External despatches of steel products (kt) 7,615.2 7,591.1 EBITDA Underlying 1 1,484.4 1,644.6 EBIT Reported 1,044.5 1,462.9 Underlying 1 1,105.4 1,269.
Slide 51: Reconciliation Between Reported NPAT and Underlying NPAT
RECONCILIATION BETWEEN REPORTED NPAT AND UNDERLYING NPAT1 51 FY2018 NPAT $M Reported net profit after tax 1,569.1 Underlying adjustments Asset impairment write back (216.0) Restructuring & redundancy costs 1.8 Asset sales (3.6) Borrowing amendment fees 30.9 Tax asset impairment / (write-back) (503.2
Slide 52: Underlying Earnings, Net Finance and Tax Cost
UNDERLYING EARNINGS, NET FINANCE AND TAX COST 52 $M 1H FY2018 2H FY2018 FY2018 Breakdown of net finance costs Underlying EBIT 524.3 745.0 1,269.3 144a U.S. unsecured notes 39.3 Underlying finance costs (40.6) (40.0) (80.7) Syndicated bank facility charges 7.7 Finance leases 12.9 Interest revenue 3.8
Slide 53: Summary of Financial Items by Segment
SUMMARY OF FINANCIAL ITEMS BY SEGMENT 53 Sales revenue Total steel despatches $M FY2017 1H FY2018 2H FY2018 FY2018 '000 tonnes FY2017 1H FY2018 2H FY2018 FY2018 Australian Steel Products 4,918.7 2,565.7 2,857.4 5,423.2 Australian Steel Products 3,090.7 1,515.3 1,601.2 3,116.6 North Star BlueScope St
Slide 54: Inventory Movement
INVENTORY MOVEMENT 54 RM $581.9M WIP $526.2M FG $725.1M RM $409.6M Other $180.2M $280.2M increase comprised of segmental movements: WIP $590.8M (including eliminations and other of $8.8M) FG $563.4M Other $169.4M 45.7 8.8 2,013.5 77.6 148.2 ASP – mainly driven by higher steel and 1,733.2 186.3 raw m
Slide 55: Cash Flow Statement
CASH FLOW STATEMENT 55 $M FY2017 FY2018 1H FY2018 2H FY2018 Primarily $216.0M write-back of Reported EBITDA 1,425.0 1,839.5 697.2 1,142.3 previously impaired plant & Adjust for other cash profit items 69.4 (228.3) (8.6) (219.7) equipment at ASP Cash from operations 1,494.4 1,611.2 688.6 922.6 Workin
Slide 56: Balance Sheet
BALANCE SHEET 56 $M 30 Jun 2017 31 Dec 2017 30 Jun 2018 Assets Cash 753.0 815.9 944.4 Receivables * 1,363.9 1,214.0 1,485.6 Inventory * 1,733.2 1,860.7 2,013.4 Property, Plant & Equipment 3,721.7 3,706.7 4,049.3 Intangible Assets 1,689.7 1,646.2 1,718.9 Other Assets 313.9 345.3 719.5 Total Assets 9,
Slide 57: Working Capital
WORKING CAPITAL 57 30 June 2017 benefitted by $100M from timing of year-end cash flows 152.7 (269.2) (60.6) 1,419.6 271.6 1,456.0 1,361.5 1,269.3 1,212.2 1,156.1 1,035.5 Prices and volume on higher activity levels Jun-2015 Dec-2015 Jun-2016 Dec-2016 Jun-2017 Dec-2017 Receivables Inventory Payables1
Slide 58: Liquidity & Debt Maturity Profile
LIQUIDITY & DEBT MATURITY PROFILE 58 Liquidity (undrawn facilities and cash, $M) Proforma maturity profile2,3 ($M) Receivables securitisation program: 2,1361 BSL Syndicated Bank Facility In addition to debt facilities, BSL has 2,026 408 $440M of off-balance sheet 1,932 U.S. unsecured notes securit
Slide 59: Committed Debt Facilities as at 30 June 2018
COMMITTED DEBT FACILITIES AS AT 30 JUNE 2018 59 Committed Drawn Proforma1 Maturity Local currency A$M A$M Syndicated Bank Facility - Tranche 1 Aug 2020 A$250M A$250M A$0M - Tranche 2 Aug 2021 A$250M A$250M A$0M Reg-S Bonds May 2023 US$300M A$408M A$408M Inventory Finance Nov 2019 US$55M A$75M A$0M N
Slide 60: Indicative Half Year EBIT Sensitivities
INDICATIVE HALF YEAR EBIT SENSITIVITIES1 60 Sensitivities may vary subject to volatility in prices, currencies and market dynamics – refer to pages 22 and 65 Australian Steel Products segment New Zealand Steel & Pacific Steel segment Hot Rolled Products North America segment +/- US$10/t move in aver
Slide 61: Additional Information – Segment Material
ADDITIONAL INFORMATION – SEGMENT MATERIAL Stirling House in SA, Australia. Designed by John Adam Architects and built by Mykra. Features Colorbond® steel Matt in Monument® in Revolution Roofing® Maxline
Slide 62: Australian Steel Products: Financial and Despatch Summaries
AUSTRALIAN STEEL PRODUCTS 62 Financial and despatch summaries Key segment financial items Despatches breakdown $M unless marked FY2017 1H FY2018 2H FY2018 FY2018 '000 Tonnes FY2017 1H FY2018 2H FY2018 FY2018 Revenue 4,918.7 2,565.7 2,857.4 5,423.2 Hot rolled coil 506.4 281.6 299.3 580.9 Plate 261.8
Slide 63: Australian Steel Products: Underlying EBIT Variance
AUSTRALIAN STEEL PRODUCTS 63 Underlying EBIT variance FY2018 vs FY2017 ($M) 2H FY2018 vs 1H FY2018 ($M) Conversion & other costs ($M) Cost improvement initiatives 55 Net spread increase $131.2M Escalation (90) Timing, one-off & other (33) 156.1 (121.6) (67.8) 63.7 0.9 587.4 Net spread increase $44.7
Slide 64: Australian Steel Products: Spot Spreads
AUSTRALIAN STEEL PRODUCTS 64 Spot spreads have recovered on stronger steel prices after a dip driven by coal price spike Indicative steelmaker HRC lagged spread Notes on calculation: • ‘Indicative steelmaker HRC spread’ representation based on $800 simple input blend of 1.5t iron ore fines and 0.71t
Slide 65: Australian Steel Products: Relationships with Benchmark Pricing
AUSTRALIAN STEEL PRODUCTS 65 Relationships with benchmark pricing • Selling prices across majority of domestic product correlated with SBB East Asia HRC price; lagged generally three to five months; degree of correlation between realised and benchmark prices can vary within a given half year but is
Slide 66: Australian Steel Products: Despatch Mix
AUSTRALIAN STEEL PRODUCTS 66 Despatch mix (Mt) 1.62 1.60 FY2018 Product Mix 1.52 1.47 0.48 0.41 Export 0.34 Export 0.36 Domestic - 0.08 0.08 0.07 externally sourced 0.07 HRC Metal Coated Plate Painted Domestic - BSL CRC Other inc ext sourced 1.08 1.10 1.11 1.03 manufactured Domestic 1H FY17 2H FY17
Slide 67: Australian Steel Products: Revenue and Underlying Costs FY2018
AUSTRALIAN STEEL PRODUCTS 67 Revenue and underlying costs FY2018 Revenue Underlying costs (to EBIT line) A$5,423M Non-steel business costs relate to: Conversion & overhead components A$4,836M • Export coke sales (in order of value): Non-steel business • Cold ferrous feed to Liberty OneSteel • Direct
Slide 68: Australian Steel Products: Profitability Through the Cycle
AUSTRALIAN STEEL PRODUCTS 68 ASP’s profitability improved considerably through productivity initiatives, even at bottom of the cycle spreads Underlying 400 Bottom of cycle EBITDA per spreads1 • ASP remains positioned with tonne 350 considerable leverage to spread A$/t FY05 300 improvements with stee
Slide 69: Australian Residential Market
AUSTRALIAN STEEL PRODUCTS 69 Australian residential market easing off cycle highs, but detached momentum holding Long-Term Dwelling Approvals: rolling 12 months1 (‘000) Dwelling Commencements: by halves2 (‘000) Strong approvals across both private and public sectors Growth in approvals translating i
Slide 70: Non-Residential Construction Market
AUSTRALIAN STEEL PRODUCTS 70 Non-residential construction market demonstrating a solid turnaround Non-Residential Building Approvals: rolling 12 months1 ($Abn) Non-Residential Work Done: by halves2 (A$bn) Strong approvals across both private and public sectors Growth in approvals translating into ac
Slide 71: Australian Steel Products: Customer Engagement Underpinning Demand
AUSTRALIAN STEEL PRODUCTS 71 Continued focus on customer engagement is underpinning Australian demand – despatches up 4.5% Total Australian external domestic despatch volumes (Kt) Total construction % shown in red 2,800 63% 67% 65% 71% 2,400 63% 69% 24% (639) 66% 70% 65% 68% 26% (621) 25% (575) 33%
Slide 72: North Star: Financial and Despatch Summaries
NORTH STAR 72 Financial and despatch summaries Key segment financial items (A$M) Key segment financial items (US$M) $M unless marked FY2017 1H FY2018 2H FY2018 FY2018 US$M FY2017 1H FY2018 2H FY2018 FY2018 Revenue 1,700.9 860.6 1,063.3 1,923.9 Revenue 1,282.5 670.5 817.9 1,488.4 Underlying EBITDA 46
Slide 73: North Star: Underlying EBIT Variance
NORTH STAR 73 Underlying EBIT variance FY2018 vs FY2017 ($M) 2H FY2018 vs 1H FY2018 ($M) Net spread increase $34.7M Net spread increase $132.3M 263.6 (228.9) (31.9) (2.6) 5.4 5.1 285.4 (2.9) 2.8 (10.6) 430.6 406.6 164.2 145.2 FY2017 Prices Raw material Conversion & Volume FX translation FY2018 1H FY
Slide 74: Building Products Asia & North America: Financial and Despatch Summaries
BUILDING PRODUCTS ASIA & NORTH AMERICA 74 Financial and despatch summaries Key segment financial items Despatches by business $M unless marked FY2017 1H FY2018 2H FY2018 FY2018 '000 Tonnes FY2017 1H FY2018 2H FY2018 FY2018 Revenue 2,459.9 1,309.20 1,384.6 2,693.8 Thailand 384.9 180.8 196.2 377.0 Und
Slide 75: Building Products Asia & North America: Underlying EBIT Variance
BUILDING PRODUCTS ASIA & NORTH AMERICA 75 Underlying EBIT variance FY2018 vs FY2017 ($M) 2H FY2018 vs 1H FY2018 ($M) Net spread decrease $26.9M Conversion & other costs ($M) Cost improvement initiatives 15 Escalation (14) 230.0 Timing, one-off & other (25) (256.9) Net spread decrease $14.6M 208.7 7.
Slide 76: Buildings North America: Financial and Despatch Summaries
BUILDINGS NORTH AMERICA 76 Financial and despatch summaries Key segment financial items (A$M) Key segment financial items (US$M) $M unless marked FY2017 1H FY2018 2H FY2018 FY2018 US$M FY2017 1H FY2018 2H FY2018 FY2018 Revenue 1,173.9 523.3 583.1 1,106.4 Revenue 885.1 407.6 446.8 854.4 Underlying EB
Slide 77: Buildings North America: Underlying EBIT Variance
BUILDINGS NORTH AMERICA 77 Underlying EBIT variance FY2018 vs FY2017 ($M) 2H FY2018 vs 1H FY2018 ($M) Net margin increase $30.8M Conversion & other costs ($M) Cost improvement initiatives 7 Escalation (13) (13.8) Timing, one-off & other (9) (15.2) 0.1 48.2 59.8 Net margin increase $14.8M (11.6) (2.1
Slide 78: New Zealand & Pacific Steel: Financial and Despatch Summaries
NEW ZEALAND & PACIFIC STEEL 78 Financial and despatch summaries Key segment financial items Steel despatches $M unless marked FY2017 1H FY2018 2H FY2018 FY2018 '000 Tonnes FY2017 1H FY2018 2H FY2018 FY2018 Revenue 747.5 386.8 446.8 833.6 Domestic despatches Underlying EBITDA 103.2 63.2 92.9 156.1 -
Slide 79: New Zealand & Pacific Steel: Underlying EBIT Variance
NEW ZEALAND & PACIFIC STEEL 79 Underlying EBIT variance FY2018 vs FY2017 ($M) Conversion & other costs ($M) 2H FY2018 vs 1H FY2018 ($M) Cost improvement initiatives 40 Escalation (16) Timing, one-off & other (1) Net spread increase $35.8M (0.9) (6.9) 111.7 (21.8) 22.6 Net spread increase $24.6M (3.2
Slide 80: New Zealand & Pacific Steel: Despatch Mix
NEW ZEALAND & PACIFIC STEEL 80 Despatch mix (kt) 342.7 FY2018 Product Mix 328.5 12.2 Export long 15.9 307.5 276.4 22.5 6.2 80.9 116.6 Export flat Domestic 55.9 48.1 86.8 96.3 97.5 85.9 Domestic long HRC Plate CRC Metal Coated 135.3 135.4 131.6 128.0 Domestic flat Painted Other flat products Pacific
Slide 81: The East Asian Rebar Price Influences Long Product Pricing
NEW ZEALAND & PACIFIC STEEL 81 The East Asian rebar price influences domestic and export long product pricing SBB East Asian rebar price, unlagged (US$/t) $800 $700 $600 $500 $400 $300 $200 $100 $0 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-
Slide 82: New Zealand & Pacific Steel: Construction Sector
NEW ZEALAND & PACIFIC STEEL 82 Construction sector remains healthy and sound Residential Building Consents: rolling 12 months1 (‘000) Residential Work Put in Place: by quarters2 (NZ$bn) Remain at high levels Strong consents translating into solid levels of activity 35 4,000 30 3,000 25 20 2,000 15 1
Slide 83: FY2018 Financial Results Presentation
FY2018 FINANCIAL RESULTS PRESENTATION Mark Vassella Managing Director and Chief Executive Officer Tania Archibald Chief Financial Officer 13 August 2018 BlueScope Steel Limited. ASX Code: BSL ABN: 16 000 011 058