Bluescope Steel Limited · ASX:BSL
Bluescope Steel — H1 FY2020 Earnings Presentation
90 slides from Bluescope Steel's earnings presentation, Feb 24, 2020
Slide 1: 1H FY2020 Financial Results Presentation
1H FY2020 FINANCIAL RESULTS PRESENTATION Mark Vassella Managing Director and Chief Executive Officer Tania Archibald Chief Financial Officer 24 February 2020 BlueScope Steel Limited. ASX Code: BSL ABN: 16 000 011 058 Level 11, 120 Colins St, Melbourne, VIC, 3000
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: Safety First
SAFETY FIRST 3 Safety is a key part of BlueScope’s identity; evolving our approach to the next level of effective risk management • Whilst injury metrics for 1H FY2020 are LTIFR elevated on recent periods, current Lost time injuries safety performance remains strong per million hours worked relative
Slide 4: 1H FY2020 Financial Scorecard
1H FY2020 FINANCIAL SCORECARD 4 Resilient performance in cyclically weaker conditions. Continuing buy-back and investing for growth UNDERLYING EBIT1 UNDERLYING EBIT RETURN ON REPORTED NPAT INVESTED CAPITAL $302M 8.4% $186M Down $547M on 1H FY2019 Down from 24.9% in 1H FY2019 Down $439M on 1H FY2019
Slide 5: Underlying EBIT by Segment
UNDERLYING EBIT BY SEGMENT 5 Cyclical spreads largely driving ASP and North Star declines NORTH STAR AUSTRALIAN STEEL PRODUCTS BUILDING PRODUCTS ASIA & NORTH AMERICA $114.5M $127.9M $80.2M Down 72% on 1H FY2019 Down 60% on 1H FY2019 Up 2% on 1H FY2019 NEW ZEALAND & PACIFIC STEEL BUILDINGS NORTH AMER
Slide 6: Evolving Our Strategy
EVOLVING OUR STRATEGY 6 • Digital technology: delivering the next wave of customer, growth and productivity improvements through technology TRANSFORM • Carbon and climate change: playing our part in the challenge; producing highly recyclable products, and actively lowering emissions intensity • Aust
Slide 7: Sustainability – A Core Value
SUSTAINABILITY – A CORE VALUE 7 BlueScope continues to focus on building resilience, embedding sustainability in all that we do CLIMATE CHANGE & ENERGY DIVERSITY & INCLUSION SUPPLY CHAIN SUSTAINABILITY GOVERNANCE & CONDUCT • BlueScope has a demonstrated history Women in BSL workforce • Supplier Code
Slide 8: Update on North Star Expansion Project
UPDATE ON NORTH STAR EXPANSION PROJECT 8 Project on track with new plant to be commissioned during FY2022; full ramp up 18 months thereafter Key milestones to date • Major OEM contracts executed and orders placed Shuttle furnace (melt shop, caster, tunnel furnace, cranes and high foundations voltage
Slide 9: Update on North Star Expansion Project
UPDATE ON NORTH STAR EXPANSION PROJECT 9 Project on track with new plant to be commissioned during FY2022; full ramp up 18 months thereafter Installation of tunnel furnace shuttle car foundations Installation of melt shop foundations and frame erection
Slide 10: Impact of COVID-19 on China Operations
IMPACT OF COVID-19 ON CHINA OPERATIONS 10 Team members safe and operations re-opened, however near term outlook remains unclear • Reassuringly, no reported cases of COVID-19 amongst BlueScope China team BlueScope’s footprint in China • Four major operating sites (two across greater Shanghai, one in
Slide 11: Financial Results
FINANCIAL RESULTS
Slide 12: North Star
NORTH STAR 12 Lower result on softer prices and spreads; remains at full capacity utilisation Underlying EBIT ($M) 411.6 • Demand remained stable across key end- use segments, sales volume lower on 243.2 seasonality 114.5 • Benchmark spreads1 contracted markedly in 1H FY2020 on significantly lower M
Slide 13: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 13 Softer result on lower steel prices and spreads; domestic volumes recovered on stronger end use demand Underlying EBIT ($M) 319.0 • Domestic volumes improved on 2H FY2019 driven by stronger end use demand 216.4 – Painted steel volumes improved 8% 127.9 • Lower Asian benc
Slide 14: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 14 Domestic volumes improved across all market segments, driven by stronger end use demand Total Australian external domestic despatch volumes (kt) Dwelling Approvals: monthly, seasonally adjusted3 (‘000) Dwelling Non-dwelling Engineering1 Manufacturing Agri & mining Transp
Slide 15: Building Products Asia and North America
BUILDING PRODUCTS ASIA AND NORTH AMERICA 15 Strong results from China, and India, encouraging improvement in ASEAN, weaker performance in North America China: Underlying EBIT ($M) • Stronger result compared to 2H FY2019 driven by higher volumes on seasonality, effective sales 78.8 80.2 performance a
Slide 16: New Zealand and Pacific Steel
NEW ZEALAND AND PACIFIC STEEL 16 Moderate improvement in prices, continued focus on addressing financial underperformance Underlying EBIT ($M) 71.9 • Demand in residential construction sector remained robust, however infrastructure market demand softened • Raw material costs decreased, 8.7 12.9 part
Slide 17: Buildings North America
BUILDINGS NORTH AMERICA 17 Softer performance due to lower contribution from BlueScope Properties Group and higher costs Underlying EBIT ($M) 31.3 24.4 • Sales volumes up on seasonality and 22.1 strength of demand in the light manufacturing and warehousing sectors • Continuing to invest in capacity
Slide 18: Underlying Group EBIT Variance
UNDERLYING GROUP EBIT VARIANCE 18 64% reduction in underlying EBIT over 1H FY2019 largely due to the impact of cyclical spreads 1H FY2020 vs 1H FY2019 ($M) 1H FY2020 vs 2H FY2019 ($M) Raw material costs ($M) 849.6 Net spread decrease $428.5M Coal (incl. lower coke margin of $27M) (4) (25.1) Iron ore
Slide 19: Impact of AASB 16 – Leases
IMPACT OF AASB 16 – LEASES 19 Impact of capitalisation of operating leases under AASB 16 • Effective 1 July 2019 and first reported in December 2019 half year statements • Brings most operating lease commitments onto balance sheet as an asset and a form of debt, and splits income statement charges b
Slide 20: Financial Framework
FINANCIAL FRAMEWORK
Slide 21: Financial Framework
FINANCIAL FRAMEWORK 21 Clearly stated financial framework to guide our decision making RETURNS OPTIMAL DISCIPLINED 1 FOCUS 2 CAPITAL STRUCTURE 3 CAPITAL ALLOCATION • ROIC > WACC on average through the cycles • Strong balance sheet, with a target of Invest to maintain safe and reliable operations, ar
Slide 22: Returns Focus – Delivering ROIC
1 RETURNS FOCUS – DELIVERING ROIC 22 Targeting returns above cost of capital through the cycle Group ROIC2 Performance (%) • ROIC1 is the primary measure of 20.0% 19.5% 18.5% performance across all business units and the Group. ROIC is a key discipline 9.5% 8.4% for: 6.4% i. performance management i
Slide 23: Returns Focus – Maximising Cash Generation
1 RETURNS FOCUS – MAXIMISING CASH GENERATION 23 Small net cash outflow due to softer spreads, seasonality of working capital and North Star expansion capex Net cash flow (before investment exp and financing) ($M) 811 585 493 146 (40) $M 1H FY2018 2H FY2018 1H FY2019 2H FY2019 1H FY2020 Reported EBIT
Slide 24: Optimal Capital Structure – Target Around $400M Net Debt
2 OPTIMAL CAPITAL STRUCTURE – TARGET AROUND $400M NET DEBT 24 Flexible and resilient balance sheet with investment grade rating Net debt / (cash) ($M) Leverage (Net debt to LTM underlying EBITDA1) 1,373 North Star Step-up and rapid • Target around $400M 50% acquisition pay-down of North Star 50% net
Slide 25: Optimal Capital Structure – Prudent Liquidity and Maturity Profile
2 OPTIMAL CAPITAL STRUCTURE – PRUDENT LIQUIDITY AND MATURITY PROFILE 25 Liquidity (undrawn facilities and cash, $M) Maturity profile2 ($M) BSL Syndicated 479 471 2,5321 Bank Facility 2,323 428 Reg-S Bonds 2,136 NS BlueScope 1,890 JV facilities (100%) Inventory Finance 400 400 191 198 428 80 191 198
Slide 26: Disciplined Capital Allocation – Capital and Acquisition Expenditure
3 DISCIPLINED CAPITAL ALLOCATION – CAPITAL AND ACQUISITION EXPENDITURE 26 Drive competition for capital with disciplined, returns focused process Capital management framework Capital and acquisition expenditure ($M) Sustaining Foundation Growth Acquisition & investment North Star expansion Operating
Slide 27: Disciplined Capital Allocation – Shareholder Returns
3 DISCIPLINED CAPITAL ALLOCATION – SHAREHOLDER RETURNS 27 $1.35Bn of shareholder returns across FY2017 to December 2019; 15% of shares bought back since FY2017 Dividends paid and buy-backs1 ($M) Shares bought back and underlying EPS Dividend improvement from buy-backs (million shares, %) Buy-back 33
Slide 28: Summary and Outlook
SUMMARY AND OUTLOOK
Slide 29: Industry Update
INDUSTRY UPDATE 29 BlueScope is well positioned in robust, developed economies, and in high growth regions across Asia CHINA • Short term disruption across industries and trade as China takes measures to contain and manage the COVID-19 outbreak • Long term objective to balance economy remains a poli
Slide 30: 2H FY2020 Group Outlook
2H FY2020 GROUP OUTLOOK1 30 • Underlying demand across our footprint is generally stable, however the economic impact of COVID-19 has created uncertainty for our Asian businesses and Asian steel spreads in the near term. The impact to US Midwest spreads, if any, is unclear. We are aware of some impa
Slide 31: Segment Guidance for 2H FY2020
SEGMENT GUIDANCE FOR 2H FY20201 31 Australian Building Products New Zealand & Buildings Intersegment, North Star Steel Products Asia & North America Pacific Steel North America Corporate & Group • Expect a similar result on • Expect a stronger result • Overall, expect a lower • Expect a similar resu
Slide 32: BlueScope's Investment Proposition
BLUESCOPE'S INVESTMENT PROPOSITION 32 Disciplined and advantaged steel building products company focussed on growing long term shareholder value ASSETS & CAPABILITY CAPITAL DISCIPLINE RETURNS FOCUS • Integrated and resilient Australian business • Strong balance sheet with target of around • Target R
Slide 33: Questions?
QUESTIONS?
Slide 34: North Star Expansion Project Update
NORTH STAR EXPANSION PROJECT UPDATE
Slide 35: Reaffirming the North Star Expansion Investment Case
REAFFIRMING THE NORTH STAR EXPANSION INVESTMENT CASE 35 An attractive opportunity to maximise value from a ‘best-in-class’ asset 1 The US is an attractive market for BlueScope North Star is an advantaged, ‘best-in-class’ asset built for expansion • Located in a geographically advantaged position 2 •
Slide 36: An Advantaged 'Best-in-Class' Asset
AN ADVANTAGED ‘BEST-IN-CLASS’ ASSET 36 A geographically advantaged asset, providing leading customer service Located close to customers… … and close to scrap suppliers Outstanding customer service • North Star ranked number one in 5% overall customer satisfaction in 16 of the last 18 years Jacobson
Slide 37: An Advantaged 'Best-in-Class' Asset
AN ADVANTAGED ‘BEST-IN-CLASS’ ASSET 37 Strong EBITDA and cash generation through the cycle; industry leading margins; consistently full utilisation US$M EBITDA and spread (100% basis)1 EBIT margins3 (%) 18.2% 600 U.S. mini-mill spread Moved to 100% 524 EBITDA (100% basis) ownership of 12.8% 500 Nort
Slide 38: Expansion Consistent with Long-Term Transition to EAF Production
EXPANSION CONSISTENT WITH LONG-TERM TRANSITION TO EAF PRODUCTION 38 The long term trend to EAF production is still emerging in the HRC market; assisted by industry consolidation Production methodology mix (%, million metric tonnes) US HSM capacity consolidation (%, million metric tonnes) Crude steel
Slide 39: Recent Regional Capacity Changes
RECENT REGIONAL CAPACTY CHANGES 39 EAF HRC capacity being added in North Star’s region, blast furnace HRC capacity recently idled Overview of US HRC capacity Key US HRC capacity additions (million metric tonnes) ME Nameplate capacity additions, not utilisation adjusted for production1 North Star VT
Slide 40: BlueScope: A Different Kind of Steel Building Products Company
BLUESCOPE: A DIFFERENT KIND OF STEEL BUILDING PRODUCTS COMPANY
Slide 41: BlueScope: A Different Kind of Steel Building Products Company
BLUESCOPE: A DIFFERENT KIND OF STEEL BUILDING PRODUCTS COMPANY 41 What makes us different? TECHNOLOGY, BUSINESS COST BRANDING & CHANNELS DIVERSIFICATION COMPETITIVENESS DISCIPLINED CAPITAL APPROACH TO ALLOCATION SUSTAINABILITY
Slide 42: Technology, Branding & Channels
TECHNOLOGY, BRANDING & CHANNELS 42 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 43: Technology, Branding & Channels
TECHNOLOGY, BRANDING & CHANNELS 43 Brands – a portfolio of many well-known and respected names to support our premium branded positions Australia New Zealand Asia North America ® ® ® ® ® ® ®
Slide 44: Technology, Branding & Channels
TECHNOLOGY, BRANDING & CHANNELS 44 Channels – clear focus on knowing our end customers and maintaining strong channels to market New Zealand and Australia Asia North America Pacific Islands ® ® ® ® ® ®
Slide 45: Business Diversification
BUSINESS DIVERSIFICATION 45 Geographic diversity and increasing contribution from value-added products Underlying EBITDA by region ($M) BlueScope despatch volume mix 100% Buildings North America NZ & Pacific $71M 90% 5% Building products Asia 80% $191M 14% Higher value added 70% Australia Aus & NZ c
Slide 46: Business Diversification
BUSINESS DIVERSIFICATION 46 Broad exposure across geographies, largely focussed on the building and construction industry BlueScope indicative despatch volume split by region and end-use segment Manufacturing, Other (Exports) Agri & Other 6% Automotive 2% 14% North Star: exposed mainly to the automo
Slide 47: Cost Competitiveness
COST COMPETITIVENESS 47 Australian steelmaking breakeven at minimum recent spreads, North Star leads margin in US steelmakers Asian steel spread & estimated steelmaking cash breakeven (US$/t) North Star’s and North American peers’ EBIT margin 800 18.2% 700 600 500 2015 indicative steelmaking 400 bre
Slide 48: Disciplined Capital Allocation
DISCIPLINED CAPITAL ALLOCATION 48 Balance sheet strength, and a disciplined approach to balancing investment for long-term growth and returns to shareholders ROBUST BALANCE SHEET INCREASED RETURNS TO SHAREHOLDERS INVESTING FOR LONG TERM GROWTH Net debt / (cash) ($M) Dividends paid and buy-backs1 ($M
Slide 49: Disciplined Capital Allocation – Growth Opportunities
DISCIPLINED CAPITAL ALLOCATION – GROWTH OPPORTUNITIES 49 Investing for the future across our portfolio through a returns focussed process driving competition for capital Capital expenditure focus areas Examples of growth projects and opportunities Building Products Asia MAINTAIN SAFE AND Continued r
Slide 50: Disciplined Capital Allocation – Digitally Transforming Our Business
DISCIPLINED CAPITAL ALLOCATION – DIGITALLY TRANSFORMING OUR BUSINESS 50 Delivering the next wave of customer, growth and productivity improvements through technology A clear framework for digital transformation A range of technology solutions available to deliver value Provide • Providing the overal
Slide 51: Disciplined Capital Allocation – Robotics and Automation
DISCIPLINED CAPITAL ALLOCATION – ROBOTICS AND AUTOMATION 51 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 replaced a basic • The robot autonomously inserts markin
Slide 52: Disciplined Capital Allocation – Investing in Growth at ASP
DISCIPLINED CAPITAL ALLOCATION – INVESTING IN GROWTH AT ASP 52 A wide range of low capital growth opportunities in intermaterial applications TRUECORE® steel TRU-SPEC® coil plate Cladding and façade applications • Sales of TRUECORE® steel continues to increase on the • Investing in a new 160kt stret
Slide 53: Approach to Sustainability – Our Bond
APPROACH TO SUSTAINABILITY – OUR BOND 53 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 54: Approach to Sustainability – ResponsibleSteel™
APPROACH TO SUSTAINABILITY – RESPONSIBLESTEEL™ 54 BlueScope is a founding member of the lead industry body on steel sustainability Background on ResponsibleSteel™ • ResponsibleSteel™ is the industry’s first global multi-stakeholder standard and certification initiative, dedicated to defining and Res
Slide 55: Approach to Sustainability – Climate Change and Carbon
APPROACH TO SUSTAINABILITY – CLIMATE CHANGE AND CARBON 55 We will work diligently to seek to improve the efficiency of our operations and reduce emissions THE CHALLENGE OUR COMMITMENT ACTION WE ARE TAKING • Continued global growth in steel demand is • BlueScope strongly advocates a fair and equitabl
Slide 56: Approach to Sustainability – Sustainable Supply Chain
APPROACH TO SUSTAINABILITY – SUSTAINABLE SUPPLY CHAIN 56 Supplier engagement and due-diligence processes operational, developing program for own site assessments Supplier engagement and due diligence Process governance 2H FY2020 focus areas • Supplier Code of Conduct published and available in nine
Slide 57: Approach to Sustainability – Inclusion and Diversity
APPROACH TO SUSTAINABILITY – INCLUSION AND DIVERSITY 57 Strong focus and effective strategies creating demonstrable improvement in inclusion and diversity • BlueScope is committed to creating a Women in BSL workforce (%) Women in BSL recruitment (%) 25% safe and inclusive workplace where 25% Board 3
Slide 58: Additional Information – Group-Level Material
ADDITIONAL INFORMATION – GROUP-LEVEL MATERIAL
Slide 59: Financial Headlines
FINANCIAL HEADLINES 59 SIX MONTHS ENDED $M (unless marked) 31 DEC 2018 31 DEC 2019 1H FY20 vs 1H FY19 Total revenue 6,422.9 5,882.6 External despatches of steel products (kt) 3,654.4 3,615.0 EBITDA − Underlying 1 1,055.7 564.3 EBIT − Reported 840.0 293.7 − Underlying 1 849.6 302.4 NPAT − Reported 62
Slide 60: Reconciliation Between Reported and Underlying EBIT and NPAT
RECONCILIATION BETWEEN REPORTED AND UNDERLYING EBIT AND NPAT1 60 1H FY2019 1H FY2020 $M EBIT $M NPAT $M EBIT $M NPAT $M Reported results 840.0 624.3 293.7 185.8 Underlying adjustments Net (gains) / losses from business discontinued 4.9 5.3 6.8 7.6 Tax asset impairment / (write-back) - (17.8) - 3.2 R
Slide 61: Underlying Earnings, Net Finance and Tax Cost
UNDERLYING EARNINGS, NET FINANCE AND TAX COST 61 $M 1H FY2019 2H FY2019 1H FY2020 Breakdown of net finance costs Underlying EBIT 849.6 498.7 302.4 Reg-S Bonds 10.1 Syndicated bank facility charges 1.5 Underlying finance costs (27.2) (27.8) (37.4) Leases1 15.1 Interest revenue 7.3 11.7 11.2 Amortisat
Slide 62: Summary of Financial Items by Segment
SUMMARY OF FINANCIAL ITEMS BY SEGMENT 62 Sales revenue Total steel despatches $M 1H FY2019 2H FY2019 FY2019 1H FY2020 '000 tonnes 1H FY2019 2H FY2019 FY2019 1H FY2020 North Star BlueScope Steel 1,265.0 1,110.8 2,375.7 865.4 North Star BlueScope Steel 1,036.4 1,073.9 2,110.4 1,028.8 Australian Steel
Slide 63: Cash Flow Statement
CASH FLOW STATEMENT 63 $M 1H FY2019 2H FY2019 1H FY2020 Reported EBITDA 1,046.1 707.7 555.7 Adjust for other cash profit items (0.7) (23.1) (6.7) Includes unwind of approximately $150M due to Cash from operations 1,045.4 686.4 549.0 favourable timing of working capital at 30 June Working capital mov
Slide 64: Working Capital
WORKING CAPITAL 64 Strong working capital performance, albeit higher than June 2019 on typical seasonality Included approximately $100M 30 June 2017 benefitted unfavourable timing of working capital by $100M from timing of year-end cash flows 1,652.7 Includes approximately 1,456.0 $150M favourable 1
Slide 65: Inventory Movement
INVENTORY MOVEMENT 65 Decrease in inventory due to lower global steel prices, offset in part by higher volumes on seasonality RM $617.2M WIP $664.4M FG $629.4M RM $546.9M WIP $648.1M $68.9M decrease comprised of segmental movements: Other $219.2M (including eliminations and other of $8.3M) FG $626.0
Slide 66: Balance Sheet
BALANCE SHEET 66 $M 31 Dec 2018 30 Jun 2019 31 Dec 2019 Assets Cash 1,057.0 1,644.5 1,273.4 Receivables and Contract Assets * 1,276.4 1,259.8 1,177.2 Inventory * 2,283.1 2,130.2 2,061.3 Property, Plant & Equipment 4,085.5 4,147.5 4,154.7 Right Of Use Assets - - 387.0 Intangible Assets 1,800.5 1827.0
Slide 67: Committed Debt Facilities as at December 2019
COMMITTED DEBT FACILITIES AS AT 31 DECEMBER 2019 67 Committed Drawn Maturity Local currency A$M A$M Syndicated Bank Facility - Tranche 1 Aug 2021 A$400M A$400M - - Tranche 2 Aug 2022 A$400M A$400M - Reg-S Bonds May 2023 US$300M A$429M A$429M Inventory Finance Sep 2021 US$55M A$79M - NS BlueScope JV
Slide 68: Indicative Half Year EBIT Sensitivities
INDICATIVE HALF YEAR EBIT SENSITIVITIES1 68 Sensitivities may vary subject to volatility in prices, currencies and market dynamics – refer to page 75 Australian Steel Products segment New Zealand Steel & Pacific Steel segment North Star segment +/- US$10/t move in average benchmark hot rolled coil p
Slide 69: Additional Information – Segment Material
ADDITIONAL INFORMATION – SEGMENT MATERIAL
Slide 70: North Star Financial and Despatch Summaries
NORTH STAR 70 Financial and despatch summaries Key segment financial items (A$M) Key segment financial items (US$M) $M unless marked 1H FY2019 2H FY2019 FY2019 1H FY2020 US$M 1H FY2019 2H FY2019 FY2019 1H FY2020 Revenue 1,265.0 1,110.8 2,375.7 865.4 Revenue 916.3 784.6 1,700.9 592.0 Underlying EBITD
Slide 71: North Star Underlying EBIT Variance
NORTH STAR 71 Underlying EBIT variance 1H FY2020 vs 1H FY2019 ($M) 1H FY2020 vs 2H FY2019 ($M) Net spread decrease 411.6 $298.2M Net spread decrease 243.2 $116.1M (438.0) 114.5 (225.2) (4.5) 114.5 (2.3) (3.4) 6.8 (12.4) 4.3 109.1 139.8 1H FY2019 Prices Raw material Conversion & Volume FX 1H FY2020 2
Slide 72: Australian Steel Products Financial and Despatch Summaries
AUSTRALIAN STEEL PRODUCTS 72 Financial and despatch summaries Key segment financial items Despatches breakdown $M unless marked 1H FY2019 2H FY2019 FY2019 1H FY2020 '000 Tonnes 1H FY2019 2H FY2019 FY2019 1H FY2020 Revenue 2,869.9 2,837.6 5,707.5 2,692.1 Hot rolled coil 301.9 254.0 555.9 269.3 Plate
Slide 73: Australian Steel Products Underlying EBIT Variance
AUSTRALIAN STEEL PRODUCTS 73 Underlying EBIT variance Raw material costs ($M) Coal (incl. lower coke margin of $27M) - 1H FY2020 vs 1H FY2019 ($M) 1H FY2020 vs 2H FY2019 ($M) Iron ore (77) 319.0 Net spread decrease $190.8M Scrap & alloys (1) Raw material costs ($M) Coating metals 3 (41.0) Coal (incl
Slide 74: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 74 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 75: Relationships with Benchmark Pricing
AUSTRALIAN STEEL PRODUCTS 75 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 Steel prices benchmark prices can vary within a given half
Slide 76: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 76 Despatch mix (Mt) 1.65 1H FY2020 Product Mix 1.47 1.40 0.28 0.59 Export 0.26 Export 0.08 Domestic - 0.06 0.06 externally sourced HRC Metal Coated Plate Painted Domestic - BSL CRC Other inc ext sourced 1.11 1.08 1.00 manufactured Domestic 1H FY2019 2H FY2019 1H FY2020
Slide 77: Australian Steel Products Revenue and Underlying Costs 1H FY2020
AUSTRALIAN STEEL PRODUCTS 77 Revenue and underlying costs 1H FY2020 Revenue Underlying costs (to EBIT line) A$2,692M A$2,564M Non-steel business costs relate to: Conversion & overhead components • Export coke sales (in order of value): Non-steel business • Cold ferrous feed to Liberty OneSteel Non-s
Slide 78: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 78 Housing market correction dominated by multis, with the orderly pullback in detached segment now evident Long-Term Dwelling Approvals: rolling 12 months1 (‘000) Dwelling Commencements: by halves2 (‘000) Detached house approvals holding in stable historic range Cyclical d
Slide 79: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 79 Non-residential segment demonstrating a strong rebound Non-Residential Building Approvals: rolling 12 months1 (A$bn) Non-Residential Work Done: by halves2 (A$bn) Approvals momentum is solid and broad-based Strong approvals translating into robust levels of activity 30 25
Slide 80: Building Products Asia & North America Financial and Despatch Summaries
BUILDING PRODUCTS ASIA & NORTH AMERICA 80 Financial and despatch summaries Key segment financial items Despatches by business $M unless marked 1H FY2019 2H FY2019 FY2019 1H FY2020 '000 Tonnes 1H FY2019 2H FY2019 FY2019 1H FY2020 Revenue 1,481.2 1,398.2 2,879.4 1,492.1 Thailand 158.5 182.9 341.4 132.
Slide 81: Building Products Asia & North America Underlying EBIT Variance
BUILDING PRODUCTS ASIA & NORTH AMERICA 81 Underlying EBIT variance 1H FY2020 vs 1H FY2019 ($M) 1H FY2020 vs 2H FY2019 ($M) Net spread increase $29.8M 78.8 Net spread decrease $6.2M 0.6 80.2 80.2 (18.3) 14.8 (1.6) (1.2) 16.0 (9.0) 55.5 (0.7) 85.2 (54.7) (128.4) 123.4 1H FY2019 Export Domestic Raw Con
Slide 82: New Zealand & Pacific Steel Financial and Despatch Summaries
NEW ZEALAND & PACIFIC STEEL 82 Financial and despatch summaries Key segment financial items Steel despatches $M unless marked 1H FY2019 2H FY2019 FY2019 1H FY2020 '000 Tonnes 1H FY2019 2H FY2019 FY2019 1H FY2020 Revenue 463.5 424.6 888.1 420.3 Domestic despatches Underlying EBITDA 96.6 32.4 129.0 39
Slide 83: New Zealand & Pacific Steel Underlying EBIT Variance
NEW ZEALAND & PACIFIC STEEL 83 Underlying EBIT variance 1H FY2020 vs 1H FY2019 ($M) 1H FY2020 vs 2H FY2019 ($M) 71.9 Net spread decrease $27.0M (9.0) (8.0) (10.0) Includes $27M reduction in vanadium by-product contribution Includes $11M reduction in vanadium by-product contribution (37.1) Net spread
Slide 84: New Zealand & Pacific Steel
NEW ZEALAND & PACIFIC STEEL 84 Despatch mix (kt) 307.5 314.8 299.8 8.1 1H FY2019 Product Mix 0.8 Export long 0.6 67.9 76.0 Export flat 76.2 Domestic 92.3 84.9 Domestic long 95.7 HRC Plate CRC 146.5 145.8 Domestic flat Metal Coated 127.3 Painted Other flat products Pacific Steel long products 1H FY20
Slide 85: New Zealand & Pacific Steel
NEW ZEALAND & PACIFIC STEEL 85 The East Asian rebar price influences domestic and export long product pricing SBB East Asian rebar price, unlagged (US$/t) $800 $700 $600 $500 $400 $300 $200 $100 $0 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Source: SBB Platts
Slide 86: New Zealand & Pacific Steel
NEW ZEALAND & PACIFIC STEEL 86 A slower but stable economy underpinned by population growth and sound levels of construction activity Residential Building Consents: rolling 12 months1 (‘000) Residential Work Put in Place: by quarters2 (NZ$bn) Solid housing demand momentum maintained as population gr
Slide 87: Buildings North America Financial and Despatch Summaries
BUILDINGS NORTH AMERICA 87 Financial and despatch summaries Key segment financial items (A$M) Key segment financial items (US$M) $M unless marked 1H FY2019 2H FY2019 FY2019 1H FY2020 US$M 1H FY2019 2H FY2019 FY2019 1H FY2020 Revenue 587.4 590.6 1,178.0 611.9 Revenue 425.6 415.7 841.4 418.3 Underlyin
Slide 88: Buildings North America Underlying EBIT Variance
BUILDINGS NORTH AMERICA 88 Underlying EBIT variance 1H FY2020 vs 1H FY2019 ($M) 1H FY2020 vs 2H FY2019 ($M) Net margin increase $9.3M 16.7 -15.3 31.3 Net margin decrease $10.5M -6.7 (4.3) 24.4 1.0 24.4 7.9 (1.4) 22.1 (7.2) 5.0 -0.3 1H FY2019 Prices1 Raw material Conversion & Volume FX 1H FY2020 2H F
Slide 89: Glossary
GLOSSARY 89 1H Six months ended 31 December in the relevant financial year EPS Earnings per share 1H FY2018 Six months ended 31 December 2017 FY2018 12 months ending 30 June 2018 1H FY2019 Six months ended 31 December 2018 FY2019 12 months ending 30 June 2019 1H FY2020 Six months ended 31 December 2
Slide 90: 1H FY2020 Financial Results Presentation
1H FY2020 FINANCIAL RESULTS PRESENTATION Mark Vassella Managing Director and Chief Executive Officer Tania Archibald Chief Financial Officer 24 February 2020 BlueScope Steel Limited. ASX Code: BSL ABN: 16 000 011 058 Level 11, 120 Colins St, Melbourne, VIC, 3000