Bluescope Steel Limited · ASX:BSL
Bluescope Steel — FY2005 Earnings Presentation
47 slides from Bluescope Steel's earnings presentation, Aug 23, 2005
Slide 1: BlueScope Steel
BLUESCOPE STEEL
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
Slide 3: Lo _ Ae
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Slide 4: Capital management - Rewarding shareholders as we grow
- Capital management - Rewarding shareholders as we grow ” Total return to shareholders since BSL’s + Share Buybacks - Public Listing to 30 June 2005 public listing (July 2002): - Purchased and cancelled 102m shares » Share buybacks $ 612m * on market - 76m shares a . * Dividends paid $ 656m off mar
Slide 5: Safety - Zero Harm
40 35 4 in lost time per million man-hours worked Safety - Jame Care” = we grow: Lost Time Injury Frequency Rate _ 36 HSI (2003) ~ 9.4 Minerals Council of Australia (2004) ~ 7. Medically treated injuries per million man-hours worked 1903 1994 1965 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 FY
Slide 6: Group headlines FY2005
Group headlines FY2005 — iversified pe ee _apothet outsiansiing result _ Revenue External despatches EBITDA EBIT NPAT EPS After tax Return on Invested Capital Return on Equity Net operating Cashflow Final Ordinary Dividend (fully franked) Special dividend (fully franked) Gearing (net debt) A$7,982 m
Slide 7: Our strategy - unchanged and continuing to deliver
Our strategy - unchanged and continuing to deliver + Grow metal coated and painted capabilities, principally in the world’s growth corridor — Asia and Far East. Ltr | Midstream + Maintain focus on branded products and new ) i a ) product / market offers. + Research and Development focus to meet futu
Slide 8: Implementing our strategy - more than major projects
Implementing our strategy ~ more than 20 maj ee Bringing balance to our product portfolio ue FY2006 “i Midstream ae a - 2 - . _ “Brownfields” - ongoing work to generate small capacity increases at all existing operations at minimal / no capital cost - Brownfields (increased metal coating & paint cap
Slide 9: Our strategy includes Business Excellence
Our strategy includes Business Excellence — ‘Continue the focus on: - Manufacturing excellence > reduce costs > capital efficient capacity increments > improve yields - Improving our market offer > technical support > improved delivery & lead times - New and colourful products > research and develop
Slide 10: Tennessee Butler Speciality Plant, USA - July 2005
Slide 11: Vistawall Extrusion Plant, USA - November 2005
Slide 12: Hn
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Slide 13: West Sydney Colorbond plant site, Australia - H1 CY2007
Slide 14: Logistics and Service Centre, Western Australia - August 2005
Slide 15: Ranbuild acquired FY2005
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Slide 16: BlueScope Water developing capabilities - Australia and export
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Slide 19: Additional 200,000t Metallic Coating Capacity, Thailand - August 2005
Slide 20: BlueScope Buildings PEB for Lysaght at Cibitung, Indonesia - FY2005
Slide 21: New 250,000t Metallic Coating & Painting complex at Suzhou, China
_ New 250,000t Metallic Coating & Painting complex at Suzhou, China -mid CY2006.
Slide 22: New Welded Beam Plant at BlueScope Buildings, Tianjin, China
_ New Welded Beam Plant at BlueScope Building’ s ce and Beam - Facility, Tianjin, China - FY2006
Slide 23: New Architectural Sandwich Panel Facility, Langfang, China
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Slide 24: Butler PEB and Design Centre at Pune, India - 2H CY2006
Butler PEB and Design Centre at Pune, India - 2H CY2006- i
Slide 25: Building the BlueScope Footprint
- Building the BlueScope Footprint "Indonesia Sri Lanka New Caledonia $ A New Zealand '; Australia
Slide 26: Segment EBIT and sales revenue by business
«Port Kembia * Coated & Building Products Australia 659 * Coated & Building 600- Products Asia + North Star BlueScope (50%) 450- + Coated and Building Products North America NZS & Pacific 300- Steel Products 183 EBIT A$ Millions New Zealand +18% Sales Revenue +50% ($m): 699/ 1,051 678 / 1,897 590 /
Slide 27: Coated and Building Products Asia - continues to be the growth area
Coated and ae Products Asia - continues to be the e growth a ~ Fastest Growing Steel Market i in nthe World * Sales revenue up 50% = A$1,051m, including A$254m from BlueScope Butler China Market mr 404 : > Twelve months BlueScope Butler PEB (| BlueScope Butler’ 5 Strong demand in Thailand and Indone
Slide 28: Coated and Building Products North America
_ Coated and Building Products. North ne ce - alee . BlueScope’ $ presence _ Markets . : > Buildings — volumes down in one half - softer overall industrial market - market share stable > Vistawall — improved sales and market share * Sales revenue = A$1,134m up 19% 30 » Performance > Overall improvem
Slide 29: New Zealand and Pacific Steel Products - an outstanding performance
New Zealand and Pacific Steel Products- an outstanding performance + Sales revenue of A$756m, up 28% 200 183 a 0 8 = Py EBIT A$ Millions 3 @ FY04 @ FY05-1H © FY05-2H m FY05 * FY 2005 return on net assets annualised (pre-tax) 39% Markets > Record domestic despatches > Residential and non-residential
Slide 30: Coated and Building Products Australia - recovery underway
“Coated 8 Buin F Products is Australia: - - recovery underway Markets > Record domestic despatches > Higher domestic and export prices > Residential softening 193 > Non-dwelling and auto / manufacturing holding * Sales revenue of A$3,190m, up 11% 250 Performance > Higher steel feed and coating metal
Slide 31: Hot Rolled Products
Hot Rolled Produets — “steeling + Sales revenue (excluding NSBSL) = A$3,940m, up 39% + NSBS revenue US$573m (50%), up 65% 4400 1338 North Star LLLP, PPP, 4200 | BlueScope Stool & Z i | Port Kembla 1000 Steelworks EBIT A$ Millions @ FY04 @ FY05-1H (1 FY05-2H mt FY05S * FY2005 return on net assets ann
Slide 32: Financials
Slide 33: Strong earnings performance continues
_ Strong earnings performance continues = AS Millions 2002” FY2003 FY20040):2005-1H 2005-2H FY2005 Revenue 4593 5,302 5,770 ! 3,890 4,092 7,982 EBITDA®) 412 881 1,105 ! 811 883 1,694 EBIT@) 160 611 818 ! 666 722. 1,388 Net Profit 452 584 ! 485 522 1,007 EPS (¢)(4 57.1 77.8 137.4 (1) 2002 normalised.
Slide 34: EBIT variance - FY2004 vs. FY2005
—EBIT variance -FY2004vs.FY2005 * Domestic price increases lag world markets * Purchased raw materials and freight costs increase over $500m EBIT AStan9 $12 2100 $505m aus | 7 ($156m) S| 1900 a ($197m) ‘700 “R&M (82) * Bus Dev (34) * Strikes (26) 1500 | | $2831 (saan) ($61m) rose — * Coal 134) m) —
Slide 35: Balance Sheet - growing and maintaining flexibility
~ Balance Sheet — growing and maintaining flexibility As At A$ Millions 30 June 2004 30 June 2005 Assets Cash 119 85 Receivables 996 1,060 Inventory 963 1,211 Other Assets 415 479 Net Fixed Assets 3,289 3,629 Total Assets 5,782 6,464 Liabilities Creditors 728 824 Interest Bearing Liabilities 593 876
Slide 36: Investing for the future
/_ Investing for the future All in A$million Total Est. Actual to FY2006 FY2007 FY2008 Capex/Cost 30/06/05) Mid and Downstream Projects Vietnam — Coating / Painting") 160 116 44 - - Thailand“) - Metallic Coating Facility 80 78 2 - - China") - Coating and Painting Facility 280 165 80 45 - - Guangzhou
Slide 37: Consistently strong cash flow underpins growth, dividends and value
Consistently strong cash aw ur derpins growth, dividends and value : | A$ millions 2002") = 2003 2004 | 2005-1H 2005-2H FY2005 Net operating cashflow before 381 763 893: 578 647 1,225 borrowing costs and income tax : Net investing cashflows - Capital expenditure & ; Investments (162) (209) (585) : (
Slide 38: Australian International Financial Reporting Standards
Australian International Financial Reporting Standards FY2005 Earnings NPAT (A$m) Reported AGAAP Net Profit After Tax 1,007 Estimated adjustments: (1) Impairment of assets (77) (2) Defined Benefit Superannuation 20 (3) Foreign currency translation 22 (4) Other (3) (5) Tax (expense) / benefit on abov
Slide 39: Australian International Financial Reporting Standards
Australian Intemational Financial Reporting Standards Equity 30 June 2005 1 July 2004 (A$m) (A$m) Total equity under AGAAP 3,501 3,193 Estimated adjustments to total equity (net of tax) (1) Defined Benefit Superannuation (193) (131) (2) Impairment of assets (126) (72) (3) Income tax methology 86 81
Slide 40: Results remain sensitive to raw material costs and realised hot rolled prices
Results remain ee to raw material ss and tealised hot led Estimated impact on forecast EBIT (A$mil ) for FY06 Assumption +/— US$25 / tonne movement in BlueScope’s average realised export HRC price") 66 (73) +/ 1¢ movement in Australian dollar / US dollar exchange rate) 7 (18) +/- US$10 / tonne movem
Slide 41: Outlook - FY06
Outlook — FY06 Page 44
Slide 42: Extraordinary year in the global steel industry
_ Extraordinary year in the global steel industry : : 250 200 150 100 50 Slab and HRC Prices (Index July 2002 = 100) HUSA Mideast HRCE = Latin America Export Slab2 Volatile Prices FY03 FY04 FY05 China growth continues }} JSM Benchmark Prices, Lump Iron Ore _ . Extreme Deviation 50) 45) Raw material
Slide 43: Global steel industry - dynamic and different
~ Global stee! industry - dynamic and different Six Pillars of a stronger steel industry 1. 2. Restructure / consolidate Reduce price volatility Address raw materials situation Stand against steel subsidies Spend on innovation and reward our investors Become safer and reaffirm our licence to operate
Slide 44: Financial outlook FY2006
- Financial outlook FY2006 Volume Revenue EBIT ° Lower feed costs . Improved sales and grow . Restructured / efficiency New ventures . Australia - higher prices - lower feed costs - higher production Asia - stronger volumes - market growth Cn) nen —_____|__- newprojects commissioning __ Hot Rolled C
Slide 45: Communities
* COMMUNITIES
Slide 46: Questions and Answers
- Questions and Answers A VERY DIFFERENT KIND OF STEEL COMPANY
Slide 47: BlueScope Steel
BLUESCOPE STEEL