Bluescope Steel Limited · ASX:BSL
Bluescope Steel — H1 FY2009 Earnings Presentation
98 slides from Bluescope Steel's earnings presentation, Feb 23, 2009
Slide 1: First Half FY2009 Results Presentation
For personal use only First Half FY2009 Results Presentation Period Ended 31 December 2008 Paul O’Malley, Managing Director and Chief Executive Officer Charlie Elias, Chief Financial Officer 23 February 2009 ASX Code: BSL
Slide 2: Important notice
Important notice For personal use only 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.
Slide 3: Introduction and Headlines
For personal use only Introduction and Headlines Page 3
Slide 4: Safety – Our target remains Zero Harm
Safety – Our target remains Zero Harm For personal use only Lost Time Injury Frequency Rate Medically Treated Injury Frequency Rate 9 50 47.1 8.0 NSW Manufacturing 8 45 Medically treated injuries per million man-hours worked 2005 – 27.9 2006 – 24.4 40 Lost time injuries per million man-hours worked
Slide 5: Group financial headlines 1H FY2009 vs. 1H FY2008
Group financial headlines 1H FY2009 vs. 1H FY2008 For personal use only Six months ended 31 December Variance 2009 2008 % Revenue A$6,156M A$4,734M Up 30% External despatches 3.2M tonnes 4.0M tonnes Down 19% EBITDA – Reported A$857M A$502M - – Underlying A$946M A$668M Up 42% EBIT – Reported A$665M A
Slide 6: Business Headlines
Business Headlines For personal use only Strong first half result – mainly Q1, weaker demand and pricing in Q2 Managing production across the group’s footprint to more closely align with reduced demand − shut Blast Furnace No. 5 on January 18 Closed No. 1 paint line and packaging cold mill at
Slide 7: Business Headlines (cont…)
Business Headlines (cont…) For personal use only Working capital increased $863M, principally inventory $836M Recognised $204M in inventory realisable value adjustments in 1H results due to current assessment of actual weaker price and demand Asset impairments − Suzhou coating lines, China $25
Slide 8: Monthly changes in economic forecasts highlight uncertainty in outlook
Monthly changes in economic forecasts highlight uncertainty in outlook Changes in Australia’s GDP Forecasts for Calendar 2009 Changes in the Global GDP Forecasts for Calendar 2009 For personal use only 2.8 2.5 3.2 2.4 3.0 2.1 2.8 2.0 2.0 2.6 2.0 1.8 1.7 2.4 1.6 1.6 1.6 2.2 2.2 IMF* 2.0 2.0 1.2 1.1 E
Slide 9: Outlook – challenging market conditions continue
Outlook – challenging market conditions continue to be For personal use only driven by global economic conditions in FY2009 December 2008 Update February 2009 Update Export market limited & prices low Weaker export demand Australasia – demand weaker than expected DEMAND Australian demand wea
Slide 10: Outlook – challenging market conditions continue (cont…)
Outlook –challenging market conditions continue to be For personal use only driven by global economic conditions in FY2009 (cont…) So what does this mean for 2H FY2009? expecting a negative underlying NPAT contribution. Extent dependent upon: − demand; and − spread earnings will remain depressed
Slide 11: FY2009 interim dividend 5cps vs 22cps 1H FY2008
FY 2009 interim dividend 5cps vs 22cps 1H FY2008 For personal use only In December 2008 market update I confirmed (and Chairman reconfirmed in his Share Purchase Plan letter in January 2009): Decision will be made by the Board in February 2009, taking into account: − business outlook and demand at
Slide 12: Underlying EBIT variance 1H FY2008 to 1H FY2009 by business segment
Underlying EBIT variance 1H FY 2008 to 1H FY 2009 by For personal use only business segment 1000 900 800 $42m $73m $753m $53m EBIT A$ Millions 700 $155m ($42m) ($21m) 600 ($1m) $494m 500 400 300 200 100 0 December 07 Coated & Aust Distrib & NZ & Pacific Coated & Bldg Hot Rolled Coated & Bldg Corpora
Slide 13: Underlying EBIT variance by major item
Underlying EBIT variance 1H FY2008 to 1H FY2009 by major item For personal use only Coal (464) Volume impact (62) Iron ore (267) Aust (38) Ext Steel Feed (273) NZ (13) Scrap (59) Asia (9) Net spread improvement A$608M Alloys (22) Nth Am (2) 2000 NZS (mainly coal) (21) R&M (29) $911m Op Stock Adj *
Slide 14: External sales despatches by destination down 19%
Our markets – external sales despatches by destination down For personal use only 19% on 1H FY 2008, primarily export reduction 1H-FY2008 1H-FY2009 Exports 33% Exports 17% [1,352kt] 12% 15% Reduction mainly in export [558kt] [569kt] 3% markets 6% Exp ricas Am North Exp America 9% orts e America 8%
Slide 15: Total Australian despatches by segment
Total Australian despatches by segment – flat, but largely due to very strong first 4 months SALES TONNES 1H FY2008(1) Construction 1H FY2009(1) For personal use only Principal variances: 60% 61% 1,600 Strong demand in first four months, but slowed in Nov/Dec. Non-dwelling despatches declined as
Slide 16: Earnings initiatives on track to deliver target savings of approx. $150m
Earnings initiatives on track to deliver target savings of approx. $150m by 30 June 2009 to partly mitigate current market conditions For personal use only Key Action Items Conversion/Operating Î Manufacturing production scheduled to minimise cash costs and meet market demand. BF No. 5 shut 18 Jan 2
Slide 17: No. 5 Blast Furnace reline & Sinter Plant project update
No. 5 Blast Furnace reline & Sinter Plant project update For personal use only Page 17
Slide 18: Port Kembla Steelworks – Blast Furnace No. 5 and Sinter Plant update
Port Kembla Steelworks – Blast Furnace No. 5 and Sinter Plant For personal use only update Blast Furnace No. 5 reline − BF No. 5 shut early on 18 January (originally March) ¾Softer demand ¾Some reline activity commenced early − Currently the main reline construction activity will be undertaken bet
Slide 19: Federal Government's Carbon Pollution Reduction Scheme (CPRS)
Federal Government’s Carbon Pollution Reduction Scheme (CPRS) For personal use only We have a corporate objective to reduce CO2 emissions We support government’s economic and environmental objectives in relation to climate change. But cumulative cost of White Paper proposal is too high, puttin
Slide 20: Industry Overview
For personal use only “Industry Overview” Page 20
Slide 21: Global Steel Industry
Global Steel Industry For personal use only Global steel industry acts decisively in cutting production Destocking in North America Raw material (coal and iron ore) costs to fall China’s domestic demand for steel increases...but supply/demand balance could be volatile leading into next growt
Slide 22: BlueScope Steel's Financial Results
For personal use only BlueScope Steel’s Financial Results Page 22
Slide 23: Earnings performance leveraged to steel price spreads
Earnings performance leveraged to steel price spreads For personal use only A$ Millions FY2004 (2) FY2005 FY2006 FY2007 FY2008 2008-1H(4) 2009-1H(5) Revenue 5,770 7,964 8,031 8,913 10,495 4,734 6,156 EBITDA (1) 1,104 1,655 850 1,423 1,420 502 857 EBIT (1) – Reported 818 1,358 556 1,099 1,063 328 665
Slide 24: High level reconciliation between Reported and Underlying NPAT
High level reconciliation between Reported and Underlying NPAT EBIT ($M) NPAT ($M) EPS (cps) For personal use only 1H 2009 1H 2008 1H 2009 1H 2008 1H 2009 1H 2008 Reported 665 328 407 116 52.7 15.7 Unusual or non-recurring events: ¾ Asset impairments(1) 36 251 36 247 4.7 33.6 ¾ Profit on sale of Smo
Slide 25: Cash – strong operating cash flows have been reinvested
Cash – strong operating cash flows have been reinvested in the For personal use only business A$ millions 2004 2005 2006 2007 2008 2008-1H 2009-1H Cash from operations 1,012 1,671 901 1,364 1,579 617 926 Working Capital Movement (94) (432) (98) (21) 69 (17) (863) Net operating cash flow 918 1,239 80
Slide 26: Balance sheet
Balance sheet As at For personal use only A$ Millions 30 June 2008 31 December 2008 Assets Reflect lower sales levels partly offset by Cash 44 35 exchange increases Receivables 1,537 1,323 Inventory 1,660 2,815 Next few slides Other Assets 1,418 1,768 Largely reflects exchange movements in Asia and
Slide 27: Balance Sheet – Net equity reconciliation
Balance Sheet – Net equity reconciliation For personal use only A$M Mainly exchange movements 6000 $382m $25m $312m $4,723m 5000 $407m ($208m) ($128m) $3,942m ($9m) 4000 Capital Raising 291 3000 DRP 58 Defined Benefits super LTIP / GESP 30 fund actuarial Other 3 adjustments: 2000 Pre-tax (251) Tax 1
Slide 28: Balance Sheet – Inventory reconciliation
Balance Sheet – Inventory reconciliation Nth Am 184 For personal use only Asia 130 A$M NZ 5 3200 $319m $2,815m $655m 2800 ($204m) 2400 $385m Aust (155) 2000 Nth Am (23) Asia (25) $1,660m NZ (1) 1600 Raw Materials 546 Work In Progress (30) Finished Goods 110 1200 Other 29 800 400 0 June 2008 Price Vo
Slide 29: Balance Sheet – Gearing
Balance Sheet – Gearing A$M For personal use only Cash flows before financing and tax 224 3500 Tax repayments 242 30.4% Dividends paid 208 35.9% Borrowing costs 73 3000 Share issues (355) $526m $2,640m 2500 $392m 2000 $1,722m 1500 FX: Debt 543 1000 Cash (17) 500 0 Net Debt June Net Cash FX Translati
Slide 30: Commitment to balance sheet strength
Commitment to balance sheet strength For personal use only Balance sheet metrics EBITDA / Net drawn Interest Net Debt / (1) (A$m, except for percentages) debt Gearing expense LTM EBITDA 30 June 2008 ($1,722) 30% 10.8x 1.2x Net cash used during period ($392) Cash working profits: $926 Inventory: ($
Slide 31: Liquidity available
Liquidity available For personal use only Available Available Net drawn committed undrawn (A$m) debt funding funding(1) 30 June 2008 $1,722 $2,973 $1,251 31 December 2008 $2,640 $3,505 $865 31 December 2008 - Adjusted for SPP $113m $2,527 $3,505 $978 (2) 31 January 2009 - Adjusted for SPP $113m $2,6
Slide 32: Capital Initiatives – since December 2008 update
Capital Initiatives – since December 2008 update For personal use only 364 day USD $275m REFINANCING OF 364 day USD $75m USD400M BRIDGE 364 day USD $25m Existing facilities USD$25M $350M Working Capital facility was due in October 2009 Now: TERMING OUT FACILITIES − $100m Jan 2010 − $125m
Slide 33: Current Debt maturity profile (as at February 2009)
Current Debt maturity profile (as at 23 February 2009) For personal use only 900 800 700 600 500 A U D $M 400 300 200 100 0 FY FY FY FY FY FY FY FY FY FY FY FY 20 20 20 20 20 20 20 20 20 20 20 20 19 20 18 15 14 16 17 12 13 11 09 10 Working Cap 5 yr LNF 364 day Bilateral Facilities 3 yr LNF USPP Note
Slide 34: Sensitivities not included due to material changes in demand
In view of the material changes to export and domestic demand in FY2009 it would be misleading to include the normal sensitivities. We have included For personal use only FY08 as a reference point for subsequent years Estimated impact on forecast EBIT (A$mil) Assumption FY 2008 +/– US$25 / tonne mov
Slide 35: Summary
For personal use only Summary Page 35
Slide 36: Summary
Summary For personal use only An excellent start to FY 2009 overtaken by global economic recession. Very challenging market conditions with soft demand, low prices and high raw material prices until mid CY 2009. Managing our production to more closely align with reduced demand. Focus on cost
Slide 37: Questions & Answers
For personal use only Questions & Answers Page 37
Slide 38: First Half FY2009 Results Presentation
For personal use only First Half FY2009 Results Presentation Period Ended 31 December 2008 Paul O’Malley, Managing Director and Chief Executive Officer Charlie Elias, Chief Financial Officer 23 February 2009 ASX Code: BSL
Slide 39: Supporting Information
For personal use only Supporting Information Page 39
Slide 40: Reporting Segments Additional Information
For personal use only Reporting Segments Additional Information Page 40
Slide 41: Reporting segments
Reporting segments Corporate / Group Australia New Zealand Asia North America For personal use only Coated & Australian New Zealand Coated & Hot Rolled Coated & Industrial Distribution & Pacific Building Products Building Products & Solutions Islands Products North America Products Australia Product
Slide 42: Australia Coated & Industrial Products; Distribution & Solutions
For personal use only Australia Coated & Industrial Products Distribution & Solutions Page 42
Slide 43: Coated & Industrial Products Australia
Coated & Industrial Products Australia For personal use only Markets Domestic Underlying EBIT − Strong sales July – Oct 1200 − Moderated Nov & Dec Exports 1000 1000 − Record demand Q1 − Dramatic fall in steel prices & demand in Q2 766 EBIT A$ Millions 800 Underlying performance – 1H FY2009 vs 1H
Slide 44: Coated & Industrial Products Australia – underlying EBIT variance analysis
Coated & Industrial Products Australia – underlying EBIT variance For personal use only analysis ( 1H FY2009 vs 1H FY 2008) Coal (464) Iron ore (267) Scrap (59) Alloys (22) Net spread increase A$304M IC Stl Fd (17) 1300 Op Stock Adj 419 Coating Metals 39 $411m 1100 NRV writedowns (155) Depreciatio
Slide 45: PKS - material flow (1H09 & 1H08)
PKS - material flow (1H 09 & 1H 08) Port Kembla Steelworks For personal use only Slab Production Slab Export 1H 091 1H 08 722 1,028 161 462 2,400 2,632 Interco 561 566 Western Port2 Hot Strip Mill HRC Domestic 1,200 1,358 3143 316 Export 884 353 Interco Domestic Springhill5 / 798 689 502 554 Distrib
Slide 46: Coated Australia - material flow (annual capacities)
Coated Australia - material flow (annual capacities) For personal use only Western Hot Strip Mill HRC Port 1,430 Pickle Line HRC 1,150 Slab Cold Mill CRC 1,000 Port Kembla Metal Coating Lines Metal Coated 830 Strip Steelworks Paint Lines Painted Strip 330 HRC Packaging Cold Mill Springhill CRC 135 C
Slide 47: Port Kembla Steelworks - despatches by half year
Port Kembla Steelworks - despatches by half year 3000 2,689 2,609 2,608 2602 2118 use only 2800 2,579 2,600 2600 2400 2200 20% 40% 32% 32% 32% 2000 41% 13% 1800 18% 20% For personal(ktonnes) 1600 1400 21% 18% 18% 16% 15% 1200 1000 800 600 43% 45% 47% 50% 50% 62% 67% 400 200 0 FY06-1H FY06-2H FY07-1H
Slide 48: Port Kembla Steelworks – relentless cost control
Port Kembla Steelworks – relentless cost control For personal use only Total cost $ $ (1) FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 S&A Conversion Costs Despatch & Freight Raw Materials (1) Raw material includes iron ore, coal, scrap and alloys but not scrap purchased on behalf of OneSteel. Page 48
Slide 49: Port Kembla Steelworks productivity
Port Kembla Steelworks productivity For personal use only Productivity (Crude Steel Output, Tonnes/Employee/Year) Employees Productivity (Tonnes per person per year) 10,000 2,000 1,750 8,000 1,500 Employee Numbers 6,000 1,250 1,000 4,000 750 500 2,000 250 0 0 99/00 00/01 01/02 02/03 03/04 04/05 05/0
Slide 50: Slab and HRC price benchmarks for Asia & Australian sales
Slab and HRC price benchmarks for Asia & Australian sales For personal use only The following Steel Business Briefing prices continue to be a reasonable public benchmark for BlueScope’s domestic and Asian HRC prices (noting this can change over time). Asian HRC Benchmark Price SBB HRC East Asia Im
Slide 51: Port Kembla Steelworks – Blast Furnace No. 5 reline update
Port Kembla Steelworks – Blast Furnace No. 5 reline update For personal use only Project status and duration − BF No 5 was shut approximately 6 weeks earlier than planned on 18 January − Shut down went well and preliminary reline work has progressed in line with the revised plan − Majority of work
Slide 52: Port Kembla Steelworks – No. 5 Blast Furnace - Reline experience
Port Kembla Steelworks – No. 5 Blast Furnace - Reline experience For personal use only Many of the Project Team and Key personnel have been key resources in : −1996 No.6 BF construction −1993 No.4 BF Reline −1991 No.5 BF Reline −1989 No.2 BF Reline −1987 No.4 BF Reline −1978 No.5 BF Reline −1976 N
Slide 53: Port Kembla Steelworks Activities during the No. 5 Blast Furnace reline
Port Kembla Steelworks Activities during the No. 5 Blast Furnace For personal use only reline Operation continues until the raw materials inside the furnace are consumed. 5 days Furnace is shutdown and isolated from rest of the plant * Holes are cut in the shell to gain access to rake out remaining
Slide 54: Port Kembla Steelworks - Cut in - access through shell
Port Kembla Steelworks - Cut in - access through shell For personal use only (No.5 BF reline 1991) Page 54
Slide 55: Port Kembla Steelworks - Hearth demolition
Port Kembla Steelworks - Hearth demolition (No.5 BF reline 1991) For personal use only Page 55
Slide 56: Port Kembla Steelworks - Internal working & protection platforms
Port Kembla Steelworks - Internal working & protection For personal use only platforms (No.5 BF reline 1991) Page 56
Slide 57: Port Kembla Steelworks - Installation hot blast main refractory
Port Kembla Steelworks - Installation hot blast main For personal use only refractory (No.5 BF reline 1991) Page 57
Slide 58: Port Kembla Steelworks - Granulator stack & downcomer installation
Port Kembla Steelworks - Granulator stack & downcomer For personal use only installation (No.5 BF reline 1991) Page 58
Slide 59: Port Kembla Steelworks - Reline Complete
Port Kembla Steelworks - Reline Complete (No.5 BF reline 1991) For personal use only Page 59
Slide 60: Port Kembla Steelworks - No. 5 BF ramp up plan
Port Kembla Steelworks - No. 5 BF ramp up plan [if market For personal use only conditions improve otherwise start up could be delayed] First service 6BF Plan 5BF Plan Actual 6BF post reline 5 BF Uprate Plan 8000 7000 6000 5000 Tonnes/day 4000 3000 2000 1000 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
Slide 61: Port Kembla Steelworks - No. 5 BF reline implementation risks
Port Kembla Steelworks - No. 5 BF reline implementation risks For personal use only Two major unknown conditions at blow-out(1) : Current assessment is positive regarding these (a) Remaining untapped liquid hot metal (salamander) requiring blasting risks, reflecting good (b) Condition of the bosh
Slide 62: Port Kembla Steelworks – Sinter Plant upgrade
Port Kembla Steelworks – Sinter Plant upgrade For personal use only Main shutdown is planned for April – May 2009, target duration of 35 days To coincide with No.5 BF reline (start-up planned for June 2009), when demand for sinter is reduced Total project capital cost A$134m, on track No.3 S
Slide 63: What is sinter?
What is sinter? For personal use only Page 63
Slide 64: Port Kembla Steelworks – Sinter Plant upgrade
Port Kembla Steelworks – Sinter Plant upgrade For personal use only Entry End New Ignition Furnace New Strand Feeder Exit End Rebuild cooler Increase Width Increase Fan Power Relocate Lowering wheel and extend building New cooler feed chute Precipitators Refurbish zones 2, 3 & 4 - R&
Slide 65: Australian Distribution & Solutions
Australian Distribution & Solutions For personal use only Underlying performance – 1H FY 2009 vs 1H FY 2008 Underlying EBIT EBIT improvement largely due to 120 − improved spread 100 − full half year benefit SSX distribution business 86 75 partly offset by lower despatches in 2Q 80 64 EBIT A$ Milli
Slide 66: Australian Distribution & Solutions – underlying EBIT variance
Australian Distribution & Solutions – underlying EBIT For personal use only variance (1H FY 2009 vs 1H FY 2008) Spread improvement $102m 350 300 $257m 250 200 150 ($155m) 100 $75m ($25m) ($22m) ($1m) ($1m) 50 $22m 0 December 07 Domestic Raw Material Volume Conversion & Exchange Other December 08 H
Slide 67: Australian Distribution & Solutions
Australian Distribution & Solutions For personal use only The Distribution and Solutions division brings together BlueScope Steel’s Australian-based Downstream businesses Sheet & Coil and Emerging Processing Businesses Services Steel Plate Pipeline Roofing Hot Rolled Tanks Supplies Walli
Slide 68: Australian Distribution & Solutions - Network
Australian Distribution & Solutions - Network (as at 31 December 2008) Darwin For personal use only KEY Lysaght Cairns Sheet & Coil Mareeba Processing Services Sheet Metal Supplies Townsville Regional Distribution Charters Towers Mount Isa Metro Distribution Mackay Bluescope Water Rockhampton Emeral
Slide 69: BlueScope Distribution – Overview
BlueScope Distribution – Overview For personal use only BlueScope Distribution: Operates an integrated network of more than 85 metropolitan and regional sites around Australia Provides over 15,000 customers with steel in the form they need Offers our customers a diverse range of steel products
Slide 70: Distribution - Market structure in Australia (1H FY2009)
Distribution - Market structure in Australia (1H FY 2009) For personal use only Indicative product mix (volumes) Indicative sales volumes by sector Other Merchant Other Bar Other 8% 7% Distributor 10% Reinforcing 7% Mining 5% Structural 3% Building & 14% Construction Plate 42% 20% Tubular 16% Manufa
Slide 71: New Zealand & Pacific Steel Products
For personal use only New Zealand New Zealand & Pacific Steel Products Page 71
Slide 72: New Zealand and Pacific Steel Products
New Zealand and Pacific Steel Products For personal use only Underlying EBIT 100 Markets 90 85 Domestic – mixed, with residential sales lower 78 and stronger commercial 75 Export – market conditions strong in Q1. EBIT A$ Millions 47 49 50 43 Underlying performance – 1H FY 2009 vs 1H FY 36 2008
Slide 73: New Zealand and Pacific Islands Products – underlying EBIT variance analysis
New Zealand and Pacific Islands Products – underlying EBIT For personal use only variance analysis (1H FY 2009 vs 1H FY 2008) Net spread increase A$53M 120 $35m 100 $78m $16m ($18m) 80 $36m ($3m) ($2m) 60 ($22m) 40 $36m 20 0 December 07 Export Prices Domestic Raw Material Mix Conversion & Exchange
Slide 74: Operations – New Zealand
Operations – New Zealand For personal use only Glenbrook Iron and Steel production Auckland Hot and Cold Rolling Mills Glenbrook Tauranga Dual Pot Metal Coating Line Wharf Waikato North Head Paint Line Taharoa Plate Line Hollow sections plant Waikato North Head Mine Concentrated iron s
Slide 75: New Zealand Steel – nominal product flow (annual)
New Zealand Steel – nominal product flow (annual) Mine Sites Iron Sands Export 1.0mt For personal use only 2.3mt NZS Slab 0.6mt HRC 36% Domestic 6% Export 19% Export Vanadium Interco (Export)75% Slag 14kt Plate 10% Domestic 60% Export 40% Pipe 4% Domestic 100% Cold Mill 50% Domestic 15% Export 2% In
Slide 76: Asia Coated & Building Products Asia
For personal use only Asia Coated & Building Products Asia Page 76
Slide 77: Coated and Building Products Asia
Coated and Building Products Asia For personal use only Underlying EBIT 100 Markets 76 Strong Q1 sales in Indonesia and Malaysia 80 Thailand’s political situation worsened in 1H All regional markets softer in Q2 60 50 36 44 40 26 EBIT A$ Millions Underlying performance – FY2008 vs FY 2007 EB
Slide 78: Coated and Building Products Asia – underlying EBIT variance analysis
Coated and Building Products Asia – underlying EBIT For personal use only variance analysis (1H FY 2009 vs 1H FY 2008) Net spread increase A$28M 275 Ext Steel Feed (147) 250 IC Steel Feed (35) $158m Coating Metals 9 225 200 Thailand (8) China (10) 175 China (8) India (6) 150 Vietnam (3) Malaysia (
Slide 79: North America Hot Rolled Products; Coated & Building Products
For personal use only North America Hot Rolled Products Coated & Building Products Page 79
Slide 80: Hot Rolled Products North America
Hot Rolled Products North America For personal use only This segment includes: Underlying EBIT North Star BlueScope Steel (50% interest) 180 − HRC produced from an electric arc furnace 155 Castrip LLC 150 − Thin strip casting 120 105 EBIT A$ Millions Markets (North Star) 101 Despatches decreas
Slide 81: Coated and Building Products North America
Coated and Building Products North America Underlying EBIT For personal use only Segment comprises: 120 BlueScope Buildings (PEB); 99(4) IMSA Steel Corp 100 80 EBIT A$ Millions Underlying performance – 1H FY 2009 vs 1H FY 2008 61(3) EBIT down 3% largely due to 60 − inventory net realisable val
Slide 82: Coated and Building Products North America – underlying EBIT variance analysis
Coated and Building Products North America – underlying For personal use only EBIT variance analysis (1H FY 2009 vs 1H FY 2008) Comprises: Butler Buildings HCI IMSA 150 Net spread increase A$14M 130 $67m 110 Butler (18) EBIT A$ Millions IMSA Acqn 29 90 70 $11m 50 ($6m) $37m $38m ($1m) ($53
Slide 83: Other Supporting Information
For personal use only Other Supporting Information Page 83
Slide 84: Production footprint and annual capacities (as at December 2008)
Production footprint and annual capacities (as at 31 For personal use only December 2008) Asia China 24 Lysaght and MC 250kt PEB Sites Painting 150kt • Coated and Building Products North America India • North Star BlueScope JV Metal Coating 250kt Hot Rolling 1.90mt (100%) Vietnam Painting 150kt MC 1
Slide 85: BlueScope Steel China footprint
BlueScope Steel China footprint For personal use only 1H FY 2009 REVENUE: A$ 266M EBITDA: (A$39M ) EBITDA – Underlying: (A$3M) EMPLOYEES: 2,109 INVESTED CAPITAL: A$90M SUZHOU BlueScope Steel in China 1 Metal Coating/Painting Line Facility 5 Lysaght Manufacturing Facilities 3 Butler PEB Manufacturing
Slide 86: BlueScope Steel North American footprint
BlueScope Steel North American footprint 1H FY 2009 For personal use only REVENUE: A$1,315M EBITDA (reported): (A$12M) EBITDA – Underlying: A$80M EMPLOYEES: 4,780 incl. North Star INVESTED CAPITAL: A$1,034M WA NB: Revenue excludes BSL’s 50% interest in North Star BlueScope Steel. ME MT ND OR VT MN N
Slide 87: Calendar year earnings
Calendar year earnings For personal use only A$ Millions CY2003 CY2004(2) CY2005 CY2006 CY2007(3) CY2008(4) Revenue 5,328 7,029 7,980 8,693 9,333 11,926 EBITDA(1) 857 1,501 1,411 1,052 1,130 1,775 EBIT(1) - reported 581 1,212 1,111 742 792 1,399 - operational - - 1,308 966 924 1,532 Net profit - rep
Slide 88: Shares on issue – historical movements
Shares on issue – historical movements For personal use only Million Shares on issue at listing (July 2002) 793 Share buy-backs to 31/12/08 (av. Price A$6.10 / share) (116) Dividend reinvestment scheme to 31/12/08 +62 Employee share plan issues to 31/12/08 +34 Institutional share placement
Slide 89: Equity capital raisings in December 2008 / February 2009
Equity capital raisings in December 2008 / February 2009 For personal use only Decision in early December 2008 to raise equity − Proactive strengthening of balance sheet in light of weaker industry conditions/outlook, increased credit market uncertainty and the Taharoa Iron Sands situation − Total
Slide 90: Indicative FY2009 Zinc and Aluminium usage vs FY2008
Indicative FY2009 Zinc and Aluminium usage vs FY2008 For personal use only Tonnes Zinc Aluminium FY2009(E) FY2008(A) FY2009(E) FY2008(A) AUSTRALIA Springhill 18,627 22,711 9,716 10,595 Western Port 14,910 21,954 10,276 10,590 Sub-total 33,537 44,665 19,992 21,185 NEW ZEALAND 6,478 6,831 3,528 3,619
Slide 91: Major approved capital projects and investment summary
Major approved capital projects and investment summary (noting For personal use only “Stay in Business” capital is approx. 75% of depreciation) PROJECTS Total Est. Actual to 2H FY2009 FY2010 FY2011 All in A$million Capex / Cost 31/12/08 Projects completed Thailand – Coating expansion 80 80 - - - Vie
Slide 92: Industry
For personal use only Industry Page 92
Slide 93: Long term growth in global steel demand…
Long term growth in global steel demand… CAGR For personal use only APPARENT CRUDE STEEL CONSUMPTION (M’s tonnes) 560 <1% 386 375 384 17% 7% 85 Japan 80 428 257 114 US 133 215 China 138 ROW Russia 54 185 Europe (EU15) 162 Brazil 29 24 18 55 India 30 2000 2007 2000 2007 2000 2007 BRIC’s Rest of World
Slide 94: …with demand underpinned by urbanisation in China...
…with demand underpinned by urbanisation in China... For personal use only Rural population (thousands) Urban population (thousands) 1,500,000 China : Total Population (000’s) 1,250,000 1,000,000 750,000 500,000 250,000 0 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 202
Slide 95: Domestic demand is a key to GDP growth in China
Domestic demand is a key to GDP growth in China For personal use only 30 Composition of GDP CY 2008 could be viewed as “PAUSE” as Net Exports Inventories opposed to a “CLIFF” 24 − credit tightening to reduce inflation Investment − Olympics – material driver of economic (RMB Trillions) 18 slowdown
Slide 96: …and steel intensity in China likely to increase
…and steel intensity in China likely to increase For personal use only CRUDE STEEL INTENSITY Kg/capita 1980-2007 Taiwan 1,200 South Korea 10 to 15 1,000 more years of strong 800 growth in Japan China until 600 China steel USA intensity 400 curve flattens 200 0 0 10,000 20,000 30,000 40,000 50,000 GD
Slide 97: Consolidation has significantly altered the make-up of the Top 10 Global steel producers
Consolidation has significantly altered the make-up of the Top For personal use only 10 Global steel producers, with greater Chinese presence CY2000 Crude Steel Production Top 10 producers = 286mt Tonnes (Millions) 60 40 20 43 28 28 22 20 18 18 16 16 13 0 Arcelor Nippon Steel Posco Ispat Corus Baost
Slide 98: First Half FY2009 Results Presentation
For personal use only First Half FY2009 Results Presentation Period Ended 31 December 2008 Paul O’Malley, Managing Director and Chief Executive Officer Charlie Elias, Chief Financial Officer 23 February 2009 ASX Code: BSL