Bluescope Steel Limited · ASX:BSL
Bluescope Steel — Investor Presentation (November 2006)
31 slides from Bluescope Steel's investor presentation, Nov 21, 2006
Slide 1: Thailand Presentation
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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: Introduction - matters to be covered
| Introduction —matters tobe covered Asia Day....on track so far Economic and political environment Drivers of FY2007 performance Our focussed business improvement projects Our market, our customers and our products
Slide 4: Our historical financial performance
- Ourhistorical financial performance External Despatches (tonnes 000’s) "Domestic 170 190 189 219 "Export 9 34 14 21 Total 179 224 203 240 Sales Revenue (A$m) Total External Sales $172.9m $200.4m $241.4m $280.9m EBIT co _ ws (A$m) $44.0m $47.8m $45.8m ; $29.5m } Net Operating Assets rad (pre-tax A$
Slide 5: FY2006 financial performance
FY2006 financial performance = High cost excess inventory in the first half fully consumed = Metal coating line no. 1 (MCL1), paint line and truss plants continued to operate strongly. = For the first 6 months of the operating year the ramp up of the cold mill capacity was behind plan, but over the
Slide 6: Asia Day (29 June) - on track so far
- Asia Day (29 June).. _ . _ on track so far Asia Day Q1 2007 Market Update Accelerating growth of domestic coated sales Increasing domestic and export margins through improved pricing and market disciplines Rapidly increase output and improve product capability/quality from MCL2 Leverage increased
Slide 7: Our growth projects
~ Our growth projects 500000 Cold Rolled Mill annualised production based on prime tonnes per hour 450000 400000 Cold Rolled Mill 350000 300000 250000 Tonnesiyear capacity increases are 200000 now back on track 150000 Metal Coating Line No. 2 the technical issues are mostly behind us and yield has i
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Slide 9: Political update - events leading up to the coup
~ Political update — events leading up to the coup Surayud Chulanont sworn in as interim prime minister, cabinet formed — supported by King Sep 06 Military launches Coup Source: The Associated Press and declares martial law
Slide 10: Tourist arrivals recovered well from tsunami, but impacted again
] affivals recovered well m tsunami, but impacted again by the ~ 1,300 120 | mn persons Tourist arrivals (left scale) %YOY 1,250 + 4100 6 . 1,200 %YOY (right scale) 80 1,150 1,100 60 1,050 | AO 1,000 ~ 950 O 900 850 -20 800 -40 Feb-04 Dec-04 Oct-05 Aug-06 Source: CEIC Data Ltd, Citigroup estimates
Slide 11: Without a strong growth catalyst, low GDP likely to extend to Dec 06
Without a strong growth catalyst, low GDP’s is likely to extend to Dec 06 %*QoQsa %WYOY 0.0 T T T T T T T ‘iz 2 — Seas adjusted Quarterly Growth (left 7 scale) -0.5 5 —YoyY growth (right scale) r 1 -1.0 0 Mar-01 Dec-01 Sep-02 Jun-03 Mar-04 Dec-04 Sep-05 Jun-06 Source: CEIC Data Ltd, Citigroup estima
Slide 12: Waning monthly FDI after strong 1H06
Waning monthly FDI after Strong 1HO6 US$mn — Monthly FDI (BOP defn) =«« 42-month moving sum -1,000 Jan-01 Aug-01 Mar-02 Oct-02 May-03 Dec-03 Jul-04 Feb-05 Sep-05 Apr-06 Source: CEIC Data Ltd, Citigroup estimates.
Slide 13: Political update - current position
- Poltice update — current position = Retired General Surayud Chulanont sworn in as interim prime minister = BOT Gov. Pridiyathorn Devakula — Deputy Prime Minister and Finance Minister = New government appointees have excellent credentials (Citibank) = Cabinet formed 9tth October = First cabinet mee
Slide 14: Materially weak domestic demand
* Materially weak domestic demand * Political uncertainty for investors * Consumers hesitant * Flooding
Slide 15: Key drivers of our 2007 first quarter performance
- Key drivers of our 2007 first quarter performance = Record domestic sales on the back of demand in Q4 2006 = Favourable product mix = Significant improvement in yields on all units However, rapidly softening domestic orders due primarily to political uncertainty * Significant spare capacity emergi
Slide 16: Major improvement projects
Major improvement projects [New remuneration structure | ) Launched GALVALITE™ steel © natant Launched import fighting package iO 2 Sales and marketing training O Launched new colour range Oo 8 Training in project management © Launched Zero week lead time offer | © QO. Lysaght leadership conference
Slide 17: Markets, customers and products
: Markets, customers and products a = 2003 domestic demand for coated flat products approximately 1,200,000 tpa = BST's major markets supply: = Construction ~ 105,000 tpa (80% Roofing & Walling) = Manufacturing ~ 45,000 tpa (80% Distribution / General Application) = 150 domestic customers # 15 key r
Slide 18: Our key markets
| Our key markets = Current principal markets are located in the: » Bangkok — population 7m ® Central and Eastern Region — population 16m ® North East Region — population 22m «Chiang Mai baa orth as . Plataan Ubon* Ratchathen CO = Channels to market include ® Direct to roll formers ® Lysaght » Distr
Slide 19: Our market focus
— Our market focus - : = BlueScope Steel Thailand principally targets industrial / commercial construction = 55 % of domestic prime sales go to this segment, with the balance spread between manufacturing (30%) and residential construction (15%). = Industrial & commercial roofing & walling with ZINCA
Slide 20: Our Thai brands
— Our Thaibrands ~ ke Colerbond acpi
Slide 21: Imports of Galvanised, Aluminium/Zinc coated steel
= Imports of Galvanised, Aluminium/Zinc coated steel Inter Material share (FY04/05) Roofing and walling for industrial / = Other materials - Low end roofing commercial construction * Galvanised Sheet - 350,000 tpa Concrete « Asbestos Cement — 200,000 tpa av = Other materials - Mild steel for Truss/B
Slide 22: Thailand's industrial and commercial construction has softened
_ Thailand’s industrial and commercial construction has softened Completed sqm BF indsitral @ Connercal BB industrial Completed sqm B Connevial) QI 2005 2005 B2005 Qt2005 QI 2006 Source: NSO
Slide 23: Residential construction slowed in 2005 - zero growth
ae S$ residential construction slowed i in 2005 - Ze10 growth Completed Sources: NSO - Sqm completions BIS -- Forecast Sept 2006 Update
Slide 24: ...but domestic markets are expected to grow in the medium term
...but domestic markets are expected to grow in the medium term Approved Commercial and Industrial construction (Thailand Municipal Zone) 12,000 10,000 1 8,000 \ —" 6,000 \ J NZ V4 F’Cast 4,000 Area in '000m2 0 T T T T T T 1996 1998 2000 2002 2004 2006 2008 2010 Calendar Year Source: BIS Shrapnei Re
Slide 25: Major local producers
= Major local producers « Bangkok Steel Industry (BSI) | 200,000 tpa cap. GI and PPGI (30,000 toa) * Other producers 250,000 tpa cap. Gl = Imports # 100,000 tpa GI - Korea & Taiwan # 200,000 tpa GI - Japan « 5,000 tpa 55% Al/Zn & Colorlume — Korea # 15,000 tpa 55% Al/Zn & Colorlume — Japan = Other m
Slide 26: Continuous innovation
Continuous innovation — 1996 *ZINCALUME* steel *COLORBOND* steel *COLORBOND* CRP steel 1999 + Clean COLORBOND* steel » TRUZINC® steel + SHUTTEREX® steel * SANTAI® colour range * Clean COLORBOND* XPD * Clean COLORBOND* XSE 2003 - P-ZACS®* Metallic + New Colours for SHUTTEREX® steel 2002 « P-ZACSs" AB
Slide 27: Design Flexibility
Design Flexibility Thermal Efficiency Colour Choice and Durability Warranty and Technical Support
Slide 28: A proven track record in Thailand
-Aproven track recordin Thailand Clean COLORBOND® steel has been used for beautiful buildings in Thailand and throughout Asia for a decade
Slide 29: New colours and shorter lead times
New colours and shorter lead times _ = 25 new colours reflecting local tastes and new market preferences = Total number of standard colours increased from 29 to 34 = ZERO WEEK lead time (within 5 days) unprecedented in Thailand Prima P-Zacs
Slide 30: Summary
Summary We have made a fantastic start...... ¥ Record domestic despatches v Improved plant performance v Business improvement projects delivering results seseeeaenees but we have challenging environment: ? Impact of political turmoil ? Flooding across the nation ? Materially weak domestic demand _ T
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