Bluescope Steel Limited · ASX:BSL
Bluescope Steel — H1 2019 Earnings Presentation
84 slides from Bluescope Steel's earnings presentation, Feb 25, 2019
Slide 1: 1H FY2019 Financial Results Presentation
1H FY2019 FINANCIAL RESULTS PRESENTATION Mark Vassella Managing Director and Chief Executive Officer Tania Archibald Chief Financial Officer 25 February 2019 BlueScope Steel Limited. ASX Code: BSL ABN: 16 000 011 058 Falcon Beach House in Falcon, WA, featuring COLORBOND® Ultra steel in Surfmist®
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: 1H FY2019 Highlights
1H FY2019 HIGHLIGHTS Calder Woodburn Rest Area in Shepparton, VIC, featuring COLORBOND® steel in Night Sky® and Surfmist®
Slide 4: Safety
SAFETY 4 Continuing our journey towards Zero Harm LTIFR Lost time injuries per million man-hours worked 0.57 0.80 0.62 0.82 FY2016 FY2017 FY2018 FY2019 YTD MTIFR 5.6 Medically treated injuries per 5.1 5.4 4.9 million man-hours worked FY2016 FY2017 FY2018 FY2019 YTD LTIFR and MTIFR includes Orrcon, F
Slide 5: 1H FY2019 Headlines
1H FY2019 HEADLINES 5 $624M reported NPAT and a record half year underlying EBIT of $850M UNDERLYING EBIT1 UNDERLYING EBIT RETURN ON REPORTED NPAT INVESTED CAPITAL $850M 24.9% $624M Up $326M on 1H FY2018 Up from 17.1% in 1H FY2018 Up $183M on 1H FY2018 FREE CASH FLOW CAPITAL MANAGEMENT NET CASH (Ope
Slide 6: Underlying EBIT by Segment
UNDERLYING EBIT BY SEGMENT 6 Strong results with a stand out performance from North Star NORTH STAR AUSTRALIAN STEEL PRODUCTS BUILDING PRODUCTS ASIA & NORTH AMERICA $411.6M $319.0M $78.8M Up 183% on 1H FY2018 Up 22% on 1H FY2018 Down 27% on 1H FY2018 NEW ZEALAND & PACIFIC STEEL BUILDINGS NORTH AMERI
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 We and our customers proudly bring inspiration, strength and colour to communities with BlueScope Steel OUR CUSTOMERS ARE OUR PARTNERS OUR PEOPLE ARE OUR STRENGTH OUR SHAREHOLDERS ARE OUR FOUNDATIONS OUR COMMUNITIES ARE OUR HOMES
Slide 9: Our Strategy
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: Climate Change
CLIMATE CHANGE 11 Our commitment to action WE SUPPORT THE PARIS AGREEMENT AND THE COMMITMENTS OF THE COUNTRIES IN WHICH WE OPERATE WE ACKNOWLEDGE STEELMAKING PRODUCES EMISSIONS AND ARE WORKING TO REDUCE THE IMPACT OUR GOVERNANCE STRUCTURES SEEK TO ENSURE UNDERSTANDING AND MANAGEMENT OF CLIMATE RISK
Slide 12: Supply Chain Sustainability
SUPPLY CHAIN SUSTAINABILITY 12 Updating our supply chain standards; risk prioritised approach to assessing and engaging suppliers Supply Chain Sustainability project continues, with focus on: 1 Rollout of Supplier Code of Conduct 2 Training on improved processes 3 Engagement with suppliers 4 Assessm
Slide 13: Culture, Conduct and Governance
CULTURE, CONDUCT AND GOVERNANCE 13 A core responsibility for Board and Management BlueScope seeks to live the values in its Bond by promoting a culture of integrity and highest possible standards across our global operations In 1H FY2019, we have: • Enhanced our ethics and compliance function • Cont
Slide 14: Diversity and Inclusion
DIVERSITY AND INCLUSION 14 Strong focus and effective strategies creating demonstrable improvement in workforce diversity Female % of workforce Female % of recruitment 25% Board 25% 33% 38% 11% Executive 25% Leadership Team 33% 33% 14% 15% Executives 20% 24% 45% 27% 40% 40% Salaried 27% 37% 28% 33%
Slide 15: ROIC Focus
ROIC FOCUS 15 Targeting returns above cost of capital to ultimately drive shareholder returns Group Underlying ROIC1 Performance (%) • Underlying EBIT ROIC is the primary measure of 22.9% 24.9% performance across all business units and the 19.6% 17.5% 17.1% group. ROIC is a key discipline for: i. pe
Slide 16: Capital Allocation and Shareholder Returns
CAPITAL ALLOCATION AND SHAREHOLDER RETURNS 16 Focus on ROIC and EPS growth to ultimately drive shareholder returns Foundation Maintain safe and reliable operations, and operate within Financial Principles, including meeting net cash targets and On market buy-back of up to $250M retaining strong cred
Slide 17: Capital Expenditure
CAPITAL EXPENDITURE 17 Investing for the future across our portfolio through a returns focussed process driving competition for capital Capital expenditure principles Examples of growth opportunities Building Products Asia INVEST TO MAXIMISE Continued roll out of ZACS® Authorised Dealer retail netwo
Slide 18: North Star Expansion Evaluation – Update
NORTH STAR EXPANSION EVALUATION – UPDATE 18 Commencing detailed design and engineering and critical path items. Targeting final decision during 1H FY2020 • Expansion option through possible third electric arc furnace and second Indicative overview of existing and additional equipment caster • Invest
Slide 19: North Star Expansion Opportunity – Update
NORTH STAR EXPANSION OPPORTUNITY – UPDATE 19 Strong strategic rationale in alignment with BlueScope’s established capital expenditure principles INCREMENTAL EXPANSION OPENS UP FURTHER A STRONG CASH FLOW COMPELLING RETURNS ON SERVING A LARGE AND INVESTMENT IN A HIGH CAPACITY EXPANSION ASSET THROUGH T
Slide 20: North Star Expansion Opportunity – Update
NORTH STAR EXPANSION OPPORTUNITY – UPDATE 20 Best in class asset located close to customers and raw materials, with consistently full asset utilisation A geographically advantaged asset North Star’s competitive position Capacity utilisation1 GFC EBIT margin2 100% • Facility strategically located wit
Slide 21: Group and Segment Financials
GROUP AND SEGMENT FINANCIALS Robertson House on the Fleurieu Peninsula, SA, featuring COLORBOND® steel in Windspray®
Slide 22: North Star
NORTH STAR 22 Record underlying EBIT of $412M on stronger spreads Underlying EBIT ($M) • 44.8% Underlying ROIC 411.6 • Continued strength in Midwest benchmark steel prices during 1H FY2019, supported by 285.4 robust demand and favourable trade environment 145.2 • Continued to operate at 100% capacit
Slide 23: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 23 Stronger spreads and domestic demand led to $319M underlying EBIT Underlying EBIT ($M) • 24.6% Underlying ROIC 325.7 319.0 • Stronger benchmark spreads 261.7 – Domestic and export steel price rises following lift in lagged global steel prices • Realised spreads moderated
Slide 24: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 24 Continued focus on customer engagement is underpinning Australian volumes DWELLING Total Australian external domestic despatch volumes (kt) • A significant proportion of product goes to alterations and additions Total construction % shown in red • Balance mainly driven b
Slide 25: Building Products Asia and North America
BUILDING PRODUCTS ASIA AND NORTH AMERICA 25 Strong performances from North America, India and China – intervention underway in ASEAN Underlying EBIT ($M) • 10.4% Underlying ROIC 108.3 • North America: – Slightly lower result on weaker prices and volume, however overall market conditions remain posit
Slide 26: New Zealand and Pacific Steel
NEW ZEALAND AND PACIFIC STEEL 26 Strong performance higher steel prices and net vanadium contribution Underlying EBIT ($M) • 40.4% ROIC 70.7 71.9 • Higher selling prices on the back of stronger global steel prices 41 • Domestic demand continues to be strong – Continued strong building activity – Rob
Slide 27: Buildings North America
BUILDINGS NORTH AMERICA 27 End market demand remains strong; despatch volumes marginally lower Underlying EBIT ($M) • 10.4% ROIC 48.21 • Sales of buildings for end-use applications in the industrial, manufacturing, healthcare, warehousing, aviation and 26.4 energy sectors remain strong 22.1 • Order
Slide 28: Underlying Group EBIT Variance
UNDERLYING GROUP EBIT VARIANCE 28 14% improvement in underlying EBIT over 2H FY2018 largely due to spread 1H FY2019 vs 1H FY2018 ($M) 1H FY2019 vs 2H FY2018 ($M) Net spread increase $333.7M Conversion & other costs ($M) Conversion & other costs ($M) Cost improvement initiatives 38 Cost improvement i
Slide 29: Working Capital
WORKING CAPITAL 29 Increased inventory due to strong demand and FX the main driver of higher than normal working capital 30 June 2017 benefitted 41.8 1,652.7 by $100M from timing of 94.4 year-end cash flows 1,456.0 Includes approximately 1,361.5 (209.2) 269.7 $100M unfavourable 1,212.2 timing of wor
Slide 30: Inventory Movement
INVENTORY MOVEMENT 30 Increase in inventory driven by volume and FX, on the back of high activity levels and a softening A$ RM $652.4M WIP $664.7M $269.7M increase comprised of segmental movements: FG $755.5M RM $581.9M Other $210.5M (including eliminations and other of $5.6M) WIP $526.2M FG $725.1M
Slide 31: Cash Flow and Net Cash
CASH FLOW AND NET CASH 31 Average free cash flow of ~$740M over last two years; $127.5M net cash at 31 December 2018 Net cash flow (before investment exp and financing) ($M) Net cash ($M)2 749 731 Investment expenditure Average free 2H 493 includes Steel & Tube NZ cash flow of consideration of $42.2
Slide 32: Capital & Acquisition Expenditure
CAPITAL & ACQUISITION EXPENDITURE 32 Maintaining safe and reliable operations and a disciplined approach to growth FY2018 and FY2017 ($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 $213M in 2H • Investment i
Slide 33: Balance Sheet
BALANCE SHEET 33 Investment grade credit ratings; strong credit metrics Net debt / (cash) ($M) Leverage (Net debt to LTM underlying EBITDA1) ✓ Maintained investment Step-up and rapid grade credit rating 1373 North Star pay-down of acquisition North Star 50% acquisition 1.6x ✓ Refinanced syndicated b
Slide 34: Outlook & Summary
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Slide 35: Segment Guidance for 2H FY2019
SEGMENT GUIDANCE FOR 2H FY20191 35 Australian Building Products Asia New Zealand & Buildings North Star Steel Products & North America Pacific Steel North America • Expect a softer result on • Expect a softer result, driven • Overall, expect a similar result • Expect a lower result mainly • Expect a
Slide 36: Group Outlook
GROUP OUTLOOK1 36 • The Company currently expects FY2019 underlying EBIT to be around 10% higher than FY2018 (which was $1,269M). The second half is expected to be softer than the first half of FY2019. • Based on 2H FY2019 average assumptions1: – East Asian HRC price of ~US$510/t – 62% Fe iron ore p
Slide 37: Questions?
QUESTIONS?
Slide 38: BlueScope: A Different Kind of Steel Building Products Company
BLUESCOPE: A DIFFERENT KIND OF STEEL BUILDING PRODUCTS COMPANY House in the Central Coast Hinterland, NSW, featuring COLORBOND® steel in Ironstone®
Slide 39: What Makes Us Different?
BLUESCOPE: A DIFFERENT KIND OF STEEL BUILDING PRODUCTS COMPANY 39 What makes us different? TECHNOLOGY, BUSINESS COST BRANDING & CHANNELS DIVERSIFICATION COMPETITIVENESS DISCIPLINED CASH GENERATION & APPROACH TO GROWTH CAPITAL MANAGEMENT SUSTAINABILITY
Slide 40: Technology, Branding & Channels
TECHNOLOGY, BRANDING & CHANNELS 40 Continued investment in research & development to maintain leadership in steel coating and painting technologies Product Technology and Development Leadership Advanced pre-painted and metallic coating development for building, construction and home appliance market
Slide 41: Brands
TECHNOLOGY, BRANDING & CHANNELS 41 Brands – a portfolio of many well-known and respected names to support our premium branded positions Australia New Zealand Asia North America ® ® ® ® ® ® ®
Slide 42: Channels
TECHNOLOGY, BRANDING & CHANNELS 42 Channels – clear focus on knowing our end customers and maintaining strong channels to market Australia New Zealand Asia North America ® ® ® ® ® ® ® ® ®
Slide 43: Business Diversification
BUSINESS DIVERSIFICATION 43 Geographic diversity and increasing contribution from value-added products Underlying EBITDA by region ($M) BlueScope despatch volume mix 100% Buildings North America NZ & Pacific $141M 90% Asia $89M 8% Building products 80% Higher value 5% added Australia 70% 38% $640M A
Slide 44: Cost Competitiveness
COST COMPETITIVENESS 44 Australian steelmaking breakeven at minimum recent spreads; North Star leading margin in US steelmakers East Asian steel spread & estimated ASP steelmaking cash breakeven (US$/t) North Star’s and North American peers’ EBIT margin 800 29.8% 700 600 500 400 13.3% 300 200 100 St
Slide 45: Disciplined Growth
DISCIPLINED GROWTH 45 Investing for the future across our portfolio through a returns focussed process driving competition for capital Capital expenditure principles Examples of growth opportunities Building Products Asia INVEST TO MAXIMISE Continued roll out of ZACS® Authorised Dealer retail networ
Slide 46: Disciplined Growth – Investing in Growth at ASP
DISCIPLINED GROWTH – INVESTING IN GROWTH AT ASP 46 New coil plate capacity provides a strong foundation for growth; light gauge steel framing growth continues New TRU-SPEC® coil plate line Coil plate sales volumes1 Light gauge steel framing growth TRUECORE® sales volumes1 • Investing in a new 160kt
Slide 47: Disciplined Growth – Robotics and Automation
DISCIPLINED GROWTH – ROBOTICS AND AUTOMATION 47 Robotics and automation opportunities unlocking the next wave of productivity improvements and cost savings Coil marking robot, North Star Coil core robot, Vietnam • A new robotic arm that replaced a basic • The robot autonomously inserts marking tool
Slide 48: Cash Generation & Capital Management
CASH GENERATION & CAPITAL MANAGEMENT 48 Robust cash generation to support growth and shareholder returns Free cash flow ($M) Net debt / (cash) ($M) Shareholder returns ($M)1 Operating cash flow less capex 778 Dividend 749 731 Buy-back 638 493 362 337 62 44 Up to 275 232 239 190 322 154 40 250 300 Up
Slide 49: Approach to Sustainability
APPROACH TO SUSTAINABILITY 49 Continued focus on our key materiality topics driving improvements in performance and disclosure SAFETY, HEALTH AND WELLNESS CLIMATE CHANGE GOVERNANCE AND BUSINESS CONDUCT • LTIFR (lost time injuries) and MTIFR (medically treated • Achieved an additional 1.2% reduction
Slide 50: Climate Change
CLIMATE CHANGE 50 Our four pillars of commitment to action Support the Paris agreement Acknowledge steelmaking Governance structures seek to Steel plays a key role in sustainable and the commitments of the produces emissions; ensure understanding and development, given its longevity countries in whi
Slide 51: Sustainability Reporting
SUSTAINABILITY REPORTING 51 Enhancing our sustainability reporting FY2016 Report FY2017 Report FY2018 Report Initial step towards sustainability reporting, Enhanced disclosure on material topics, further Substantive update using stakeholder combining content of BlueScope’s annual alignment to TCFD r
Slide 52: Additional Information – Group-Level Material
ADDITIONAL INFORMATION – GROUP-LEVEL MATERIAL
Slide 53: Financial Headlines
FINANCIAL HEADLINES 53 SIX MONTHS ENDED $M (unless marked) 31 DEC 2017 31 DEC 2018 1H FY19 vs 1H FY18 Total revenue 5,490.5 6,422.9 External despatches of steel products (kt) 3,715.0 3,654.4 EBITDA Underlying 1 710.2 1,055.7 EBIT Reported 510.5 840.0 Underlying 1 524.2 849.6 NPAT Reported 44
Slide 54: Reconciliation Between Reported and Underlying EBIT and NPAT
RECONCILIATION BETWEEN REPORTED AND UNDERLYING EBIT AND NPAT1 54 1H FY2018 1H FY2019 EBIT $M NPAT $M EBIT $M NPAT $M Reported results 510.5 441.2 849.6 624.3 Underlying adjustments Discontinued business (gains) / losses 14.3 14.3 4.9 5.3 Tax asset impairment / (write-back) - (75.5) - (17.8) Restruct
Slide 55: Underlying Earnings, Net Finance and Tax Cost
UNDERLYING EARNINGS, NET FINANCE AND TAX COST 55 $M 1H FY2018 2H FY2018 1H FY2019 Breakdown of net finance costs Underlying EBIT 524.2 745.0 849.6 Reg-S Bonds 9.6 Syndicated bank facility charges 3.9 Underlying finance costs (40.6) (40.0) (27.2) Finance leases 6.1 Interest revenue 3.8 4.9 7.3 Amorti
Slide 56: Summary of Financial Items by Segment
SUMMARY OF FINANCIAL ITEMS BY SEGMENT 56 Sales revenue Total steel despatches $M 1H FY2018 2H FY2018 FY2018 1H FY2019 '000 tonnes 1H FY2018 2H FY2018 FY2018 1H FY2019 North Star BlueScope Steel 860.6 1,063.3 1,923.9 1,265.0 North Star BlueScope Steel 1,037.5 1,067.2 2,104.7 1,036.4 Australian Steel
Slide 57: Cash Flow Statement
CASH FLOW STATEMENT 57 $M 1H FY2018 2H FY2018 1H FY2019 Reported EBITDA 697.2 1,142.3 1,046.1 Adjust for other cash profit items (8.4) (219.7) (0.7) Largely due to higher market prices and volumes held. Cash from operations 688.8 922.6 1,045.4 Includes approximately $100M unfavourable timing of Work
Slide 58: Balance Sheet
BALANCE SHEET 58 $M 31 Dec 2017 30 Jun 2018 31 Dec 2018 Assets Cash 815.9 944.4 1,057.0 Receivables * 1,214.0 1,485.6 1,276.4 Inventory * 1,860.7 2,013.4 2,283.1 Property, Plant & Equipment 3,706.7 4,049.3 4,085.5 Intangible Assets 1,646.2 1,718.9 1,800.5 Other Assets 345.3 719.5 694.0 Total Assets
Slide 59: Liquidity & Debt Maturity Profile
LIQUIDITY & DEBT MATURITY PROFILE 59 Liquidity (undrawn facilities and cash, $M) Maturity profile2 ($M) 2,136 BSL Syndicated Bank Facility Receivables securitisation program: 2,026 Reg-S Bonds 426 In addition to debt facilities, BSL has 1,932 1,8901 $493M of off-balance sheet NS BlueScope JV facil
Slide 60: Committed Debt Facilities as at December 2018
COMMITTED DEBT FACILITIES AS AT 31 DECEMBER 2018 60 Committed Drawn Maturity Local currency A$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$426M A$426M Inventory Finance Aug 2020 US$55M A$78M A$0M NS Blue
Slide 61: Indicative Half Year EBIT Sensitivities
INDICATIVE HALF YEAR EBIT SENSITIVITIES1 61 Sensitivities may vary subject to volatility in prices, currencies and market dynamics – refer to page 68 Australian Steel Products segment New Zealand Steel & Pacific Steel segment North Star segment +/- US$10/t move in average benchmark hot rolled coil p
Slide 62: Additional Information – Segment Material
ADDITIONAL INFORMATION – SEGMENT MATERIAL Berman House in Kangaroo Valley, NSW, featuring COLORBOND® steel in Surfmist®
Slide 63: North Star
NORTH STAR 63 Financial and despatch summaries Key segment financial items (A$M) Key segment financial items (US$M) $M unless marked 1H FY2018 2H FY2018 FY2018 1H FY2019 US$M 1H FY2018 2H FY2018 FY2018 1H FY2019 Revenue 860.6 1,063.3 1,923.9 1,265.0 Revenue 670.5 817.9 1,488.4 916.3 Underlying EBITD
Slide 64: North Star Underlying EBIT Variance
NORTH STAR 64 Underlying EBIT variance 1H FY2019 vs 1H FY2018 ($M) 1H FY2019 vs 2H FY2018 ($M) Net spread increase Net spread increase $259.2M $133.3M (56.5) 28.7 411.6 21.6 411.6 (26.0) (19.0) (9.7) (21.4) (0.2) 159.3 315.7 285.4 145.2 1H FY2018 Prices Raw material Conversion & Volume FX translatio
Slide 65: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 65 Financial and despatch summaries Key segment financial items Despatches breakdown '000 Tonnes 1H FY2018 2H FY2018 FY2018 1H FY2019 $M unless marked 1H FY2018 2H FY2018 FY2018 1H FY2019 Hot rolled coil 281.6 299.3 580.9 301.9 Revenue 2,565.7 2,857.4 5,423.2 2,869.9 Plate
Slide 66: Australian Steel Products Underlying EBIT Variance
AUSTRALIAN STEEL PRODUCTS 66 Underlying EBIT variance 1H FY2019 vs 1H FY2018 ($M) 1H FY2019 vs 2H FY2018 ($M) Conversion & other costs ($M) Conversion & other costs ($M) Cost improvement initiatives 17 Cost improvement initiatives 12 Net spread increase $78.3M Escalation (28) Net spread increase $57
Slide 67: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 67 Spot spreads have contracted due to softening HRC prices and increasing raw material rates 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 68: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 68 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 Steel prices between realised and benchmark prices can vary within a given half
Slide 69: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 69 Despatch mix (Mt) 1.60 1H FY2019 Product Mix 1.52 1.47 0.41 0.34 0.28 Export Export Domestic - 0.08 0.08 0.08 externally sourced HRC Metal Coated Plate Painted Domestic - BSL CRC Other inc ext sourced 1.10 1.11 1.11 manufactured Domestic 1H FY2018 2H FY2018 1H FY2019
Slide 70: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 70 Revenue and underlying costs 1H FY2019 Revenue Underlying costs (to EBIT line) A$2,870M Non-steel business costs relate to: Conversion & overhead components A$2,551M • Export coke sales (in order of value): Non-steel business • Cold ferrous feed to Liberty OneSteel • Dir
Slide 71: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 71 ASP’s profitability improved considerably through productivity initiatives, even at bottom of the cycle spreads Underlying 400 Bottom of cycle EBITDA per spreads1 • ASP remains positioned with tonne 350 considerable leverage to spread A$/t FY05 300 1H FY19 improvements w
Slide 72: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 72 Australian residential market cycle turning down, with detached segment demonstrating greater stability Long-Term Dwelling Approvals: rolling 12 months1 (‘000) Dwelling Commencements: by halves2 (‘000) Contraction in approvals coming off a high base; more evident in mult
Slide 73: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 73 Non-residential construction market demonstrating sound activity post record high residential cycle Non-Residential Building Approvals: rolling 12 months1 (A$bn) Non-Residential Work Done: by halves2 (A$bn) Softening from recent peak, however remain at historically eleva
Slide 74: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 74 Continued focus on customer engagement is underpinning Australian demand Total Australian external domestic despatch volumes (Kt) See page 24 for 1H FY2019 data Total construction % shown in red 2,800 63% 67% 65% 71% 2,400 63% 69% 24% (639) 66% 70% 65% 68% 26% (621) 25%
Slide 75: Building Products Asia & North America
BUILDING PRODUCTS ASIA & NORTH AMERICA 75 Financial and despatch summaries Key segment financial items Despatches by business $M unless marked 1H FY2018 2H FY2018 FY2018 1H FY2019 '000 Tonnes 1H FY2018 2H FY2018 FY2018 1H FY2019 Revenue 1,309.20 1,384.6 2,693.8 1,481.2 Thailand 180.8 196.2 377.0 158
Slide 76: Building Products Asia & North America Underlying EBIT Variance
BUILDING PRODUCTS ASIA & NORTH AMERICA 76 Underlying EBIT variance 1H FY2019 vs 1H FY2018 ($M) 1H FY2019 vs 2H FY2018 ($M) Net spread decrease $15.3M 120.7 (139.1) Net spread decrease $4.3M 108.3 3.0 73.5 (79.1) (4.1) (7.1) (3.1) 78.8 76.2 1.3 7.3 (1.6) 1.2 78.8 1H FY2018 Export Domestic Raw Convers
Slide 77: New Zealand & Pacific Steel
NEW ZEALAND & PACIFIC STEEL 77 Financial and despatch summaries Key segment financial items Steel despatches $M unless marked 1H FY2018 2H FY2018 FY2018 1H FY2019 '000 Tonnes 1H FY2018 2H FY2018 FY2018 1H FY2019 Revenue 386.8 446.8 833.6 463.5 Domestic despatches Underlying EBITDA 63.2 92.9 156.1 96
Slide 78: New Zealand & Pacific Steel Underlying EBIT Variance
NEW ZEALAND & PACIFIC STEEL 78 Underlying EBIT variance 1H FY2019 vs 1H FY2018 ($M) 1H FY2019 vs 2H FY2018 ($M) Net spread increase $3.4M (2.3) Net spread increase $23.7M 2.6 9.0 (8.2) 5.2 1.4 0.6 71.9 70.7 (5.2) 71.9 (5.8) 5.3 19.7 41.0 9.8 1H FY2018 Export Domestic Raw Conversion Volume FX 1H FY20
Slide 79: New Zealand & Pacific Steel
NEW ZEALAND & PACIFIC STEEL 79 Despatch mix (kt) 342.7 1H FY2019 Product Mix 12.2 307.5 307.5 0.8 Export long 22.5 116.6 67.9 Export flat Domestic 55.9 92.3 Domestic long 97.5 85.9 HRC Plate CRC Metal Coated 131.6 146.5 Domestic flat 128.0 Painted Other flat products Pacific Steel long products 1H F
Slide 80: New Zealand & Pacific Steel
NEW ZEALAND & PACIFIC STEEL 80 The East Asian rebar price influences domestic and export long product pricing SBB East Asian rebar price, unlagged (US$/t) $800 $700 $600 $500 $400 $300 $200 $100 $0 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-
Slide 81: New Zealand & Pacific Steel
NEW ZEALAND & PACIFIC STEEL 81 Economy very stable driven by solid levels of construction activity Residential Building Consents: rolling 12 months1 (‘000) Residential Work Put in Place: by quarters2 (NZ$bn) Remain high and resilient Extended period of robust consents translating into solid activity
Slide 82: Buildings North America
BUILDINGS NORTH AMERICA 82 Financial and despatch summaries Key segment financial items (A$M) Key segment financial items (US$M) $M unless marked 1H FY2018 2H FY2018 FY2018 1H FY2019 US$M 1H FY2018 2H FY2018 FY2018 1H FY2019 Revenue 523.3 583.1 1,106.4 587.4 Revenue 407.6 446.8 854.4 425.6 Underlyin
Slide 83: Buildings North America Underlying EBIT Variance
BUILDINGS NORTH AMERICA 83 Underlying EBIT variance 1H FY2019 vs 1H FY2018 ($M) 1H FY2019 vs 2H FY2018 ($M) Net margin decrease $23.8M1 Net margin decrease $8.0M1 32.3 48.2 (54.9) 34.5 (50.5) 26.4 (1.2) (3.5) 2.8 0.9 22.1 1.2 22.1 8.0 1H FY2018 Prices1 Raw material Conversion & Volume FX translation
Slide 84: 1H FY2019 Financial Results Presentation
1H FY2019 FINANCIAL RESULTS PRESENTATION Mark Vassella Managing Director and Chief Executive Officer Tania Archibald Chief Financial Officer 25 February 2019 BlueScope Steel Limited. ASX Code: BSL ABN: 16 000 011 058 Falcon Beach House in Falcon, WA, featuring COLORBOND® Ultra steel in Surfmist®