Bluescope Steel Limited · ASX:BSL
Bluescope Steel — FY2004 Earnings Presentation
33 slides from Bluescope Steel's earnings presentation, Aug 19, 2004
Slide 1: Annual Results Presentation - Year ended 30 June 2004
' le — : » oe i wee eee Pe ee eos é es Ce MEL ee eee Le wane EE Tey AR Mey -r—..UC”E"EE.C=#"»EE’EC“#$3’§#s 3F—h—™—C—CT—S—CCP''. llr Le YE EL EE Ee EE eae WYO EE IEEE EE EE EE EE YI a ee ee Ly a a Ye ee YY EE YE IEE OEE LE EL I EE EE MY EEE EEE ET EEE EEE EE ES EET EE EEE EI EEE EE EE EEE EEL EE EEE
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: Rewarding Shareholders As We Grow
Slide 4: Injuries resulting in lost time per million man-hours worked
Injuries resulting in lost time per million man-hours worked % 1983 JIS] Member Companies (2002) ~ 8.4 Medically treated injuries per million man-hours worked 968 1909 2000 2004 2002 2003 2004 * includes contractors from 1996 1983 1004 1905 1906 1987 1008 1009 2000 2001 2002 2003 2004 * Inciudes con
Slide 5: Group headlines FY2004
_ Group headlines FY2004 Continued to seize market opportunities and drive business improvements + Revenue $5.77 billion Record even with A$ strength * Despatches 6.94 million metric tonnes — Record + NPAT $584 million Up 29% to record * EBITDA $1,105 million First time over $1.0 billion + EBIT $818
Slide 6: Rewarding shareholders as we grow
_ Rewarding shareholders as we grow 38% Increase in Total Dividends Dividend FY2004 | FY2003 | Variance Interim Ordinary 12¢ 9¢ +33% Final Ordinary 18¢ 13¢ +39% Special 10¢ 7¢ +43% Total Fully Franked Dividends 40¢ 29¢ +38%
Slide 7: Growing for the future benefit of shareholders
- Growing for the future benefit of shareholders, * Growth initiatives underway > Vietnam — new metal coating and paint line facility > Thailand —- second metal coating facility > China — new metal coating and paint line facility ~ BlueScope / Butler integration > North America — Butler acquisition,
Slide 8: Strong and improved financial performance across all segments
Strong and improved financial performance across all segments COFY03 MFY04 600 5 a North Star BlueScope Steel 500 4 PP B = 400-7 = < +» New business a segment as at wu 300 1 May 2004 197 +2 months results, 200 4 including integration costs 119 9 100 a 84 100 + 59 = 44 _ = = | : 0 : | : q : | : ; Hot
Slide 9: Hot Rolled Products - hard work is paying off
Hot Rolled Products —hard work is paying off = Markets - Strong global demand BFS MFYO4 MFYOC1H MFYOS2H - Tight markets for raw materials “iy and product . AM - Record prices in second half ey - rm mer relationshi AY, 486 Core long term customer relationships Performance - Annual production records
Slide 10: New Zealand Steel - its best ever performance
New Zealand Steel — its best ever performance : EIFY03 MIFY04 GIFY04-1H GIFY04-2H Markets n - Strong NZ construction demand 60 2 - Record domestic sales mix - Higher prices - particularly export “4 - Core long term customer relationships 39 Performance - Record EBIT - Annual paint line production re
Slide 11: Coated and Building Products Australia
EBIT A$ Millions "Coated 8 Buin Products Australia - “On What Atel ELFY03 M@FY04 EFY04-1H FY04-2H 197 200 150 119 : {02 65 50 0 + FY2004 return on net assets (pre-tax) 16.0% * Revenue = A$2,884m Markets - Demand never been stronger = construction, automotive, manufacturing - Signs of dwelling market
Slide 12: Coated and Building Products Asia - the growth continues
_ Coated and Building Produ cts Asia—the growth continues = EIFY03 ME FY04 GIFY04-1H MFY04-2H Markets - World’s fastest growing steel market - BlueScope Steel uniquely positioned 100 - Prices higher in local currencies 84 - Pre-engineered building demand growing in Asia — immediate scale achieved in
Slide 13: Index of EBIT performance of Asian businesses in local currencies
Index of EBIT performance of Asian businesses in local currencies = Thailand ~~ Malaysia ~@ Indonesia 400 300 200 2001 2002 2003 2004
Slide 14: Coated and Building Products North America
_ Coated and Building Products North America — foundations in "© Butler Manufacturing Co. acquisition completed 27 April 2004 - No negative surprises - Integration team making good progress - New management structure in place - Galesburg facility to close mid-CY2005 - Timber business (Lester) sold i
Slide 15: Benefits of BlueScope Steel's progress are far-reaching
". Shareholders > > ts of BlueScope Stee''s progress are far-reaching Total dividend increased from 29¢ to 40¢ per share Total Shareholder Return of 185% since listing and 92% in FY2004 Employees > > > $27m employee share offer in FY03 and FY04 Improved wages, benefits and opportunities Cleaner and
Slide 16: _. |; OO
_. |; OO
Slide 17: Continued strong earnings performance
_ Continued strong earnings performance i A$ Millions 2000 2001” 2002" 2003 2004" | 2004-1H 2004-2H" ! Revenue 4808 4941 4503 5302 5770; 2619 3,151 ' ! EBITDA 711 58 412s BTS 1,105 | = 440 665 I | EBIT2 45 -305—i(—si‘stHOSCt«é**T 818 | 302 516 i ! Net Profit 452 584! 207 367 EPS (¢)" 71 = 78 (1) 200
Slide 18: EBIT variance - FY2004 vs. FY2003
-EBIT variance - FY2004 vs. FY2003. Higher R&M (42) FY03 Superannuation Employment costs (42) Contribution 32 Freight (18) FY03 Name Change EBIT A$m Costimprovements 68 Provision 20 Lower Restructuring 1100 $79m $2m Costs 31 $300m 900 ($111m) ($85m) $70m $818m m) 700 $611m 500 300 100 r r r r 1 r r
Slide 19: EBIT variance - June half year vs. December half year
_ EBIT variance — June 04 half year vs. December 03 half year EBIT A$m 800 700 $68m 600 334m $10m $223m $21m $516m 500 $302m Dec O3 Half Export Prices Domestic += Volume /Mx_— NSBSL Exchange Conversion & Raw Material © Other June 04 Half Prices Rates Other Costs Costs
Slide 20: Balance Sheet - strength and flexibility
~ Balance Sheet — strength and flexibility As At ' Excluding FY04 | _ acquisitions 30 June 2003 30 June 2004; 30 June A$ Millions H 2004 Assets ' Cash 91 119 i 91 Receivables 650 996 Hy 785 Inventory 698 962 ' 762 Other Assets 228 416 ' 325 Net Fixed Assets 3,086 3,289 1 3,090 Total Assets 4,753 5,7
Slide 21: Major growth initiatives - capital spending profile
- Major growth initiatives - capital spending profile Allin A$m Total Est. | FY2004 FY2005 | FY2006 | FY2007 Capex/Cost | Actual Vietnam() 160 45 100 15 - Thailand‘) 80 19 60 1 - China") 280 24 211 45 - Port Kembla HSM expansion() 100 - 34 53 13 Butler acquisition 277 277 - - - Total® 897 365 405 11
Slide 22: Capital management - continued focus on returns to shareholders
_ Capital management - continued focus on returns to shareholders ¢ Share Buyback - Purchased/cancelled 60.7m shares - Further program — 16.0m shares Total return to shareholders since public listing: * Initial buyback $286m * Dividends Paid $313m * Dividends - All Fully Franked + Final/Special (to
Slide 23: Consistently strong cash flows
Consistently strong cas flows _ A$ millions 2000 2004 2002” 2003 2004 : 2004-1H 2004-2H Net operating cash flow 715 631 «381. 763. 893; «= 357 536 before borrowing costs and : income tax Net investing cash flows - Capital expenditure (90) (105) (162) (183) (290): (99) (191) - Other 10 (6) 8 18 (288)
Slide 24: Results remain sensitive to realised hot rolled coil prices and exchange rates
Results remain =o fo oe ee S realised hot rolled coll Estimated impact on forecast EBIT (A$mil) for year ending 30/06/05 Assumption +/- US$25 / tonne movement in BSL’s average realised HRC price‘) 15 +/— 1¢ movement in Australian dollar / US dollar exchange rate() 13 +/- US$10 / tonne movement in NS
Slide 25: Looking forward to 2005
Looking forward 102005 * Global steel industry * Higher costs * BlueScope Steel strategy * Outlook for BlueScope Steel
Slide 26: Global steel industry - dynamic
-dynamic Japan + Production at capacity + Significant exports + Weak demand continues * Consolidation benefits North America cis * Record HRC prices + Restricted scrap exports Korea + Scrap surcharges and + Stronger economies * Shipyards full volatility + BlueScope Steel customer + Steel availabilit
Slide 27: Steel making raw material costs are increasing
~ Steel making raw material costs are increasing lron Ore USc per itu (FOB) —Fines Lumps 20 c<3 oO -_ isd ise) 8 @ 8 8 38 8 8 = ~ Q a Ow iad ON “unprecedented demand and extremely tight supply position...” SOURCE: ANZ Bank ‘Resources Market Outlook’, Mar 04 Coal Shippin 6,000 5,000 a & 4,000 rs & §
Slide 28: Other metallic coating material costs also increasing
_ Other metallic coating material costs also increasing Aluminium Zinc Tin 2,000 4,500 9,000 + 1,800 +-- - - - 1,300 4 gz 1600 z 1100 2 7,000 e 2 2 2 1400 +-- & 900 a 5,000 4 1,200 + 700 4 4,000, }@—7—7 7 1 500 +}—+—+—+— 3,000, -— 4 > + SDH OG HP YG & Y LY S$ y 2 Sek eg os es Sf ea vig eee ey ss & e
Slide 29: Global marine freight market continues to be tight
Global marine freight market continues to be tight BlueScope Steel’s approach - stagger renewals - long term relationships - limited “spot” contracts BlueScope Steel largely insulated in FY2004 In FY2005: - Approximately half of our marine freight cost is exposed to higher costs . . . totalling a ne
Slide 30: Our strategy is unchanged
Our strategy is unchanged Hot Rolled Coil, Plate Asia and Regional Growth Value-added branded products Asset productivity Disciplined capital management World-class low-cost operations Manufacturing excellence Supply chain velocity Cost reductions Vigorously defend existing value
Slide 31: 2004 was another good year ... Anticipate another good year in 2005
2004 was another good ye _. and the momentum continues 2 Anticipate another good year in 2005 * Challenges ahead - much higher slab / HRC prices in first half leading to further margin pressure downstream - adjusting to higher raw material and freight cost environment - achieving productivity to off
Slide 32: i wee eee
' le — : » oe i wee eee Pe ee eos é es Ce MEL ee eee Le wane EE Tey AR Mey -r—..UC”E"EE.C=#"»EE’EC“#$3’§#s 3F—h—™—C—CT—S—CCP''. llr Le YE EL EE Ee EE eae WYO EE IEEE EE EE EE EE YI a ee ee Ly a a Ye ee YY EE YE IEE OEE LE EL I EE EE MY EEE EEE ET EEE EEE EE ES EET EE EEE EI EEE EE EE EEE EEL EE EEE
Slide 33: A Very Different Kind of Steel Company
A VERY DIFFERENT KIND OF STEEL COMPANY