Bluescope Steel Limited · ASX:BSL
Bluescope Steel — H1 FY2004 Earnings Presentation
30 slides from Bluescope Steel's earnings presentation, Feb 19, 2004
Slide 1: Half Year Results Presentation
BLUESCOPE STEEL ~ Half Year Results Presentation Period Ended a December 2003
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 BSL SECURITIES OR OTHER PRODUCTS SHOULD BE MADE ONLY AFTER SEEKING APPROPRIATE FINANCIAL ADVICE. RELIANCE SHOULD NOT BE PLACED ON INFORMAT
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Slide 4: Group Headlines
Group Headiines + Safety > Continued improvement in Lost Time Injury Frequency Rate > Continued improvement in Medical Treatment Injury Frequency Rate * Strong net profit of $227m continues momentum > 6% down on corresponding half (December 2002) > 8% upon previous half (June 2003) * Why 6% down? >
Slide 5: Group Headlines (cont)
Group Headlines (cont) * Interim dividend increased by 33% > From 9¢ to 12¢ > — Fully franked * Share buyback status as at 18/2/04 > 60.7m shares purchased > 76.5% of total program * Gearing (net debt) 9.1% vs. 2.4% (30/6/03) * Significant growth initiatives, principally: > Vietnam — new coating / p
Slide 6: Group Headlines (cont)
Group Headlines (cont) * Outlook for second half FY2004 - Strong International Market. - Strong US$ steel pricing environment. - Improving margins at North Star Joint Venture. - Volatile raw materials and freight market. Page &
Slide 7: Strong Financial Performance Across All Segments
Strong F inancial Performance Across AllSegments FY03-1H @ FY03-2H © FY04-1H 500 - +PKSW - Slab 400 4 ~ HRC - Plate 7 «NS JV (50%) 26 * Castrip 2 300 - & 265 + Western Port * Thailand = * Springhill + Malaysia g + Packaging Products «Indonesia 200 4 + Service Centres «Vietnam *Lysaght «China 102 100
Slide 8: BlueScope Steel's Markets
~ BlueScope Steel's Markets — Str + Long term customer relationships. « External sales mix largely unchanged from 2002/03 by: > — Geographic region; and > — Australian market segments. * Increased South East Asian despatches, largely driven by: > Internal initiatives, eg: - broadened product range,
Slide 9: BlueScope Steel's Markets - Apparent Steel Consumption
- BlueScope Stee!’s Markets - St ~ ‘+ Apparent Steel Consumption — South East Asian Countries —e— THAILAND —=— MALAYSIA —a— VIETNAM —w—~ \NDONESIA —K- PHILIPPINES —e— SINGAPORE Source: SEASI, iS}
Slide 10: AH A AN eA Mig
Ws AH A AN eA Mig TG ns bl A
Slide 11: BlueScope Steel Raw Materials and Freight
BlueScope Steel Raw Materials and Freight = * lron Ore and Coking Coal > Announced price increases effective 1 July 2004. * Scrap > Port Kembla - less than 1.0 mtpa (50% external). > North Star Joint Venture - approximately 1.8 mtpa. * Freight >» Largely insulated from record rates in FY2004. > Cont
Slide 12: Strategy - Downstream, Value Added Branded Products
Strategy - - Downstream, Value ae Branded Products CURRENT FUTURE Painted Metallic c yy i Metallic : Coated Coated sold Roll lee 2
Slide 13: Implementing BlueScope Steel's Strategy
Implementing BlueScope Steel's Strategy BUTLER : Acquisition of Butler Manufacturing Company - Pre-eminent global designer/supplier of Pre-Engineered Buildings (PEBs) — Number One positions in North America and China - Worldwide brand recognition An Attractive Opportunity at the Right Time
Slide 14: Strategy - China Business Integration
‘Strategy ~ China Business Integration Located at Suzhou, 80kms west of Shanghai. Excellent transport links. Metallic Coating Line - 250,000tpa Paint Line - 150,000tpa Slitter / Recoil Facility - 20,000tpa Capital cost A$280m. Start construction April 2004. Start production mid-CY 2006. Import repla
Slide 15: Strategy - Reducing Market Risk of Coating Line
Strategy - Reducing Market Risk of Coating Line Target Market: Premium-High ZINCALUME® Clean COLORBOND® Target Market: Middle OPAL™ Galvanised TRUZINC® Sales including 250,000t Tol Loading | 100% Butler
Slide 16: Strategy - Production and Sales Network
_ Stategy- . ao Production nand $2 Sales Network BlueScope Steel i one 1 Metal Coating & Painting facility 4 Lysaght manufacturing facilities 2 PEB manufacturing facilities Over 50 sales offices
Slide 17: Strategy - Growth Staircase
- Strategy - “Growth Staircase CHINA” Metallic +250,000t BLUESCOPE Painted +150,000t STEEL cn NEW ZEALAND. Metallic +24, 000t/a and Painted aL 00a FY2004 FY2005 FY2006 FY2007 aa
Slide 18: Value-Adding Focus
VALUE-ADDING FOCUS (Proportion of Hot-Dipped Metal Coating to Hot Rolled Coil Capacity; Largest 40 Flat Global Steelmakers) 50 4 — Value-adding % Ss \ B UA i BlueSeate Source: liS! ‘World Steel in Figures 2003’, CRU ‘Capacity Database April 2003” ee P
Slide 19: Another strong result from BlueScope Steel
Another strong result from BlueScope Steel. Strong demand / pricing. Interim dividend 9¢ to 12¢ per share. Downstream growth initiatives (more than $550m capex over 3 years). Announced strategy being implemented and portfolio reshaped. Geographic and product diversification decreasing risk.
Slide 20: A a a ee LY iy L
Py, A a a ee LY iy L _ yo . Lo . LC _. . > . - / - , | |. LD _ 7 oo _ / _ Lo > Ll) _ 7 . L. / _ _— _ _ . ee Le 2 Te — _ . — : _ EF... _ _ : _ / C — ee er ne
Slide 21: Continued Strong Net Profit Performance
as * Continued Strong Net Profit Performance A$ Millions 2000" = 2001» 2002" = 2003 | 2003-1H © 2003-2 ~2004-1H ! Revenue 4,898 4,944 4,593 5,302 2,590 2,712 2,619 EBITDA® 7H 568 412 881 464 417 440 EBIT? 445 305 160 611 332 279 302 Net Profit 452 | 242 210 227 EPS (¢) 57.10) 30.609) 2658 29.80) (1)
Slide 22: EBIT Variance - First Half FY2003 vs First Half FY2004
-EBIT Variance — First Half FY2003 vs. FirstHalfFY2004 Higher R&M (30) Dec ’02 Superannuation 500 Employment costs (25) contribution 20 $11m Cost Improvements 19 Lower restructuring costs 26 450 spss | 40 $50 ($61m) 350 56 58m $302m 250 A$millions 150 Dec 02 Half ExportPrices Domestic Volume / Mx NS
Slide 23: EBIT Variance - Second Half FY2003 vs First Half FY2004
ASmiillions 380 360 340 320 300 280 260 240 220 200 $33m $24m $7m _ EBIT Variance - Second Half FY2003 vs. First HalfFY2004 dune 03 Half Export Prices Domestic Prices Volume / Mix NS WV Exchange Conversion & Raw Material Other Rates Other Costs Costs Dec 03 Half
Slide 24: Balance Sheet - Strength and Flexibility
- Balance Sheet - Strength and As at A$ Millions 31Dec02 30June03 31 Dec 03 Assets Cash 137 91 92 Receivables 508 650 581 Inventory 766 698 759 Other Assets 268 216 224 Net Fixed Assets 3,171 3,086 2,997 Total Assets 4,850 4,744 4,653 Liabilities Creditors 499 493 412 Interest Bearing 352 168 381 Li
Slide 25: Recent Major Growth Initiatives and Indicative Capex Profile
Recent major Growth Initiatives underway and Indicative Capex Profile Total Est - FY2004 FY2005 FY2006 Capex/Cost Balance Vietnam A$160m $40m $100m $10m - New coating facilities Thailand A$80m $25m $55m - Metallic coating expansion China A$280m $20m $220m $40m - New coating/painting facilities Butle
Slide 26: Continued Focus on Tax Effective Returns to Shareholders
_ Continued Focus on Tax Effective Returns to Shareholders Cents Per Share 25 = a = o Share Buyback - - Plan - up to 10% (79.3m) by March 2004 \ Total return to shareholders since - Purchased/cancelled to . listing: » 18 February 2004 - 60.7m shares (76.5%) * Buyback A$285m * Dividends A$225m + + In
Slide 27: Consistently Strong Cash Flows
_ Consistently Strong Cash | ows _ A$ millions 2000) = 2001") 2002") 2003 2003-1H 2003-2H 2004-1H Net operating cash flow before 715 634 384 763 386 377 357 borrowing costs and income tax Net investing cash flows - Capital expenditure (90) (405) (462) = (183) ~—s (76) (107) (99) - Other 10 (6) 8 18
Slide 28: BlueScope Steel Outlook
BlueScope Steel Outlook : A$ : US$ Exchange rate Hot Rolled Coil Prices Key Industry Drivers 4997 1998 += 1999«=«-2000 «= 2001» 2002S 20032004 1997 1998. »«= «1999» 2000» «-2001~= 2002S: 2003-««2004 Shipping Rates fron Ore Prices Fines 4994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 4995 1996
Slide 29: Creating Shareholder Value
- Creating Shareholder Value A DIFFERENT KIND OF STEEL COMPANY
Slide 30: Half Year Results Presentation
BLUESCOPE STEEL ~ Half Year Results Presentation Period Ended a December 2003