China Steel Corporation · TWSE:2002

China Steel — Investor Presentation (November 2012)

20 slides from China Steel's investor presentation, Nov 16, 2012

  1. Slide 1: China Steel Corporation

    China Steel Corporation November 16, 2012 0

  2. Slide 2: Table of Contents

    Table of Contents •Company Overview 2 •Performance 5 •Financial Review 10 •EPS & Dividends (common stock) 12 •Sales 13 •Strategy 15 1

  3. Slide 3: Company overview: Business snapshot (CSC standalone)

    Company overview: Business snapshot (CSC standalone)  Leading Taiwanese steel manufacturer with integrated production capabilities Overview  Headquartered in Kaohsiung with major production sites located in Kaohsiung  Annual capacity of 9.9 mmt as of Dec 31, 2011 Steel Sales revenue breakdown by

  4. Slide 4: Company overview: Business snapshot (CSC Group)

    Company overview: Business snapshot (CSC Group) Steel Core Businesses Other Group Businesses  China Steel Corporation Engineering Businesses Logistic Businesses  Chung Hung Steel  China Steel Machinery Corporation  China Steel Express Corporation Corporation  China Steel Structure Co., Ltd.  C

  5. Slide 5: Company overview: Group capacity & Production lines

    Company overview: Group capacity & Production lines Group capacity Progress of new capacity/production lines: CSC & DSC Crude steel capacity (mmt) (0.15 mmt) CSC MAY 2014 NGO Line (1.2 mmt) DEC 2012 Q1 2013 Q1 2013 CSVC Project HSM #2 BF Expansion (1.5 mmt) (2.5 mmt) (3 mmt → 4 mmt) MAY 2011 #3 CR M

  6. Slide 6: Performance-CSC standalone

    Performance-CSC standalone Revenue and Profits unit: NT$ million 300,000 30% 250,000 25% revenue 200,000 20% 150,000 15% gross profit 100,000 10% pre-tax profit 50,000 5% gross margin% - 0% -50,000 -5% unit: NT$ million 2006 2007 2008 2009 2010 2011 2012.1-3Q revenue 177,658 207,919 256,358 165,409

  7. Slide 7: Performance- consolidated basis

    Performance- consolidated basis Consolidated Income Statement Units: NT$ millions 2009 2010 2011 2012.1-3Q Revenues 251,112 350,205 401,027 274,447 Gross profit 27,506 63,356 36,597 13,924 Gross margins 10.95% 18.09% 9.13% 5.07% Profit before tax 21,426 50,715 23,365 4,899 Net income 21,807 41,660 2

  8. Slide 8: Performance- CSC operating results (Sep. & accumulated 2012)

    Performance- CSC operating results (Sep. & accumulated 2012) Volume: metric ton amount: NT$ million Item September 2012 Accumulated of 2012 Production Volume(MT) 614,584 6,285,127 Sales Volume(MT) 655,287 6,622,864 Revenue 15,201 160,817 Sales Revenue 14,550 156,386 Pretax profit (loss) 644 3,989 7

  9. Slide 9: Performance: ASP vs. Cost (CSC standalone)

    Performance: ASP vs. Cost (CSC standalone) ($NT/MT) Average Selling price Average Cost of Good Sold 34,000 32,000 30,000 28,000 26,000 24,000 21,470 22,000 20,000 15,684 18,000 20,308 16,000 14,000 12,000 10,000 9,730 8,000 6,000 8

  10. Slide 10: Performance- Cash flow (CSC standalone)

    Performance- Cash flow (CSC standalone) Units: NT$ millions Including NTD 13.2 Including NTD 20 billion investment of billion investment DSC Including NTD 21.2 of DSC billion investment of DSC Including NTD 60,000 16 billion 54,243 52,717 investment of 50,551 49,294 47,651 DSC 50,000 48,216 43,252 3

  11. Slide 11: Performance: financial review (CSC standalone)

    Performance: financial review (CSC standalone) Units: NT$ millions 12/31/2007 12/31/2008 12/31/2009 12/31/2010 12/31/2011 9/30/2012 Debt 59,285 116,898 98,948 116,437 133,348 157,691 Debt/Equity 26.63% 48.96% 40.66% 43.78% 46.21% 56.90% Asset 281,941 355,639 342,307 382,387 421,935 434,851 Debt / As

  12. Slide 12: 2012.1-3Q profits from subsidiaries & affiliates

    2012.1-3Q profits from subsidiaries & affiliates totaled NT$ 1.95 billion UNIT: Million NTD$ CS Express 2,452 CS Aluminum 491 *CS Chemical 435 CS Machinery 315 CS Global Trading 290 *China Ecotek 265 *CS Structure 117 China Prosperity Development 116 *CHC Resources 103 CSAPH 45 CSC Australia 22 -1,2

  13. Slide 13: Performance- Historical EPS and dividends paid

    Performance- Historical EPS and dividends paid (in NTD per share) Dividend 122 83 85 84 85 87 85 85 87 88 85 payout(%) 6.00 5.00 0.50 0.35 4.00 0.30 0.35 0.30 3.00 0.50 3.90 3.75 2.00 3.50 0.43 3.00 0.15 2.78 1.01 0.33 0.15 1.99 0.80 0.20 1.00 1.40 1.30 0.82 1.86 3.94 5.26 4.83 3.56 4.49 2.03 1.54 2

  14. Slide 14: Sales (CSC standalone)

    Sales (CSC standalone) 2012 .1~3Q CSC sales volume totaled 6.62 million metric tons Domestic/Export sales volume breakdown of 2012.1~3Q Hot- Rolled, Semi 27.9% Cold- Export Product, Rolled, 17.8% Vehicles 33.89% 1.5% (2.24 million China Japan23.1% metric tons) 24.5% Bar/Rod, Coated 22.4% Plate, Prod

  15. Slide 15: Sales (CSC +DSC:HRC)

    Sales (CSC +DSC:HRC) 2012.1~3Q sales volume (CSC & HRC of DSC) totaled 8.31million metric tons Domestic/Export sales volume breakdown of 2012.1~3Q Hot- Semi Rolled, Product, 42.6% 1.2% Cold- Vehicles China Japan22.4% Bar/Rod, Rolled, Export 31.45% 14.2% (2.61million 22.1% 17.8% Plate, Coated metric

  16. Slide 16: Key strategies to achieve the vision

    Key strategies to achieve the vision 1 Secure self-sufficiency in raw materials through strategic upstream investment 2 Strengthen sales channels through overseas investment 3 Increase the supply chain value of steel-related industries by developing and trying out new product 4 Enhance corporate cul

  17. Slide 17: Secure self-sufficiency in raw materials through strategic upstream investment

    Secure self-sufficiency in raw materials through strategic upstream investment Major raw materials Semi-products Ferro alloy Acquired 5% in Dongbu Metal Co Major raw materials ($47.8bn WON, approximately US$43.9mm)  Iron ore and coking coals are secured by long-term contract (volume) East Asia Unit

  18. Slide 18: Strengthen sales channels through overseas investment

    Strengthen sales channels through overseas investment China New Asia Project PCMI Metal Products (Chongqing) Co., Ltd China Invest US$30.5mm in China Steel Precision Materials to acquire 70% of the Chartered Capital. Capacity: 19,000 metric tones China Changshu Baoshunchang Steel Italy Processing Co

  19. Slide 19: Increase the supply chain value of steel-related industries by developing new product

    Increase the supply chain value of steel-related industries by developing and trying out new product Co-development for value-added products R&D alliances Total est. expenditure Industry R & D Alliance (US$mm) Fasteners High value-added fasteners 2.4 R&D alliance Motors Electric motors and compresso

  20. Slide 20: Enhance client relationship and networks through value-added services

    Enhance client relationship and networks through value- added services Engineering Technical services Customer services Others services  Mega Steel in  Real-time Domestic and oversea  Expansion project Malaysia information services consulting services stage II phase II of  Formosa Ha Tinh of or

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