Bluescope Steel Limited · ASX:BSL
Bluescope Steel — FY2015 Earnings Presentation
98 slides from Bluescope Steel's earnings presentation, Aug 24, 2015
Slide 1: FY2015 Financial Results Presentation
For personal use only FY2015 Financial Results Presentation Paul O’Malley, Managing Director and Chief Executive Officer Charlie Elias, Chief Financial Officer 24 August 2015 BlueScope Steel Limited. 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
For personal use only INTRODUCTION
Slide 4: Progress towards our goal of Zero Harm
Progress towards our goal of Zero Harm For personal use only Lost time injury frequency rate Medically treated injury frequency rate 16.0 60.0 14.0 52.2 Medically treated injuries per million man-hours worked 47.1 Lost time injuries per million man-hours worked 8.0 29.1 22.4 21.9 4.8 17.0 4.1 3.5 3.
Slide 5: FY2015 results summary
FY2015 results summary Best profit performance since FY2008 For personal use only Underlying EBIT Return on invested capital1 $301.8M 14% 5.9% from 5.5% 2H result $130.8M Underlying net profit after tax Final dividend per share – fully franked $134.1M 9% 3.0 cps no dividend last year 2H result $52.9
Slide 6: Segment underlying EBIT summary
Segment underlying EBIT summary Better results from all segments other than New Zealand For personal use only Australian Steel Products New Zealand & Pacific Steel $150.3M 216% ($33.2)M 144% • Increased spreads (mainly raw material benefit) • Losses in commodity steelmaking and iron sands • Improved
Slide 7: Review: Strategy
For personal use only REVIEW STRATEGY
Slide 8: Our strategy defines our portfolio management priorities
Our strategy defines our portfolio management priorities For personal use only Grow Deliver Ensure ongoing premium branded steel businesses competitive commodity steel supply financial strength with strong channels to market in our local markets Coated & Painted Building Solutions North Star Austral
Slide 9: Agenda
Agenda For personal use only Grow Deliver Ensure ongoing premium branded steel businesses competitive commodity steel supply financial strength with strong channels to market in our local markets Coated & Painted Building Solutions North Star Australia & NZ Balance Sheet Products BlueScope Steelmaki
Slide 10: Coated and Painted Products: Growing from a position of strength
Coated and Painted Products Growing from a position of strength For personal use only Global scale • Third largest manufacturer of painted steel and ZnAl coated steel globally • Recognised quality leader in nine countries and outright leader in six Strong global • Well-understood formula for success
Slide 11: Coated and Painted Products: Growing from a position of strength
Coated and Painted Products Growing from a position of strength For personal use only Large, foundation • Strong capability base and cash generation driven by large core businesses in core business in relatively mature Australia and NZ markets ANZ generating – Provides a strong platform to fund grow
Slide 12: Comprehensive footprint across Asia, Australia & New Zealand
Coated and Painted Products Comprehensive footprint across Asia, Australia & New Zealand For personal use only Kalama Kalama • Cold Rolling 455kt • Metal Coating 235kt • Painting 110kt India India (1) • Metal Coating 250kt United States • Painting 150kt • ASC Profiles sites 9 • Lysaght sites 5 China
Slide 13: Third largest global manufacturer; #1 in building and construction
Coated and Painted Products Third largest global manufacturer; #1 in building and construction For personal use only Global painted steel manufacturers by volume (Mtpa) Global ZnAl coated steel manufacturers by volume (Mtpa) 2.8 6.7 2.4 4.6 BlueScope 1.5 BlueScope 3.6 1.4 1.8 1.3 1.7 1.2 1.5 1.0 1.2
Slide 14: Leader in building market brands in Asia and Australasia
Coated and Painted Products Leader in building market brands in Asia and Australasia For personal use only Note: SuperDyma® is a brand of our NS BlueScope Coated Products joint venture partner, Nippon Steel & Sumitomo Metal Corporation 14
Slide 15: Growth from existing markets, new markets and innovation
Coated and Painted Products Growth in the portfolio can come from existing markets, entry into new markets, as well as product and segment extensions based on innovation and R&D For personal use only Increase momentum of growth in Evaluate entry to new markets existing fast growth countries Coated a
Slide 16: Pipeline of markets with potential to become cash generators
Coated and Painted Products The portfolio contains a pipeline of markets that have the potential to become significant cash generators as they mature For personal use only DEVELOPING MARKET GROWTH TRAJECTORY — FY2015 Australia GDP per capita North America New Zealand Malaysia China Thailand Indonesi
Slide 17: Agenda
Agenda For personal use only Grow Deliver Ensure ongoing premium branded steel businesses competitive commodity steel supply financial strength with strong channels to market in our local markets Coated & Painted Building Solutions North Star Australia & NZ Balance Sheet Products BlueScope Steelmaki
Slide 18: Building Solutions: Driving growth in North America and China
Building Solutions Driving growth in premium branded building solutions in North America and China For personal use only Leading positions • Market leader in two largest global markets: North America and China Compelling and distinctive • BlueScope has a formula for success in premium engineered bui
Slide 19: Building Solutions: Driving growth in North America and China
Building Solutions Driving growth in premium branded building solutions in North America and China For personal use only Strong growth potential • Strong profit growth potential from continued recovery of U.S. commercial in North America construction market Turnaround underway • Turnaround of large,
Slide 20: Building Solutions: Improvements in ROIC expected
Building Solutions Improvements in ROIC expected For personal use only Engineered Buildings North America Engineered Buildings China and South East Asia 11% 126% EBIT return on capital % EBIT return on capital % 6% Improving 87% 2% returns from Strong historical successful performance; -1% cost init
Slide 21: Earnings leverage to growth in North America
Building Solutions Earnings leverage to growth in North America from work in prior years on costs For personal use only FY2015 earnings were 149% stronger … despite volume 5% lower than in than FY2009 … that period Underlying EBIT of Buildings North America ($M) Volume of Buildings North America (kt
Slide 22: Volume recovery potential and buoyant industry outlook
Building Solutions Volume recovery potential and buoyant industry outlook for North American business point to continued growth For personal use only Buildings North America – volumes recovering on consistent market share FW Dodge forecast of U.S. non-residential construction 500 1,300 450 1,250 Mil
Slide 23: Good progress on China Buildings restructuring
Building Solutions Good progress on China Buildings restructuring • Restructuring work in 1H FY2015 delivered significant cost savings however volumes and margins For personal use only continued to decline, leading to poor performance throughout FY2015 • During 2H FY2015, undertook a further review
Slide 24: Agenda
Agenda For personal use only Grow Deliver Ensure ongoing premium branded steel businesses competitive commodity steel supply financial strength with strong channels to market in our local markets Coated & Painted Building Solutions North Star Australia & NZ Balance Sheet Products BlueScope Steelmaki
Slide 25: Maximising value of North Star
North Star BlueScope Steel Maximising value of North Star For personal use only Strong competitive • Geographically advantaged: advantage – Directly within one of the largest scrap steel surplus regions in North America – Approximately 90% of customers are within a 250 mile radius of the mill – Loca
Slide 26: High performing U.S. steel mill
North Star BlueScope Steel High performing U.S. steel mill For personal use only EBITDA margin EBITDA per tonne 16.6% 109 US$ per metric tonne 78 8.2% North Star U.S. industry average North Star U.S. industry average Year to 31 March 2015. Source: North Star BlueScope Steel Year to 31 March 2015. So
Slide 27: Track record of incremental despatch growth
North Star BlueScope Steel Track record of incremental despatch growth with minimal capital For personal use only North Star despatches since commencement (100% basis) 2,200 +79% 2,000 1,800 Reviewing further 1,600 incremental 1,400 expansion options metric Kt 1,200 1,000 800 600 400 200 0 FY1998 FY
Slide 28: Agenda
Agenda For personal use only Grow Deliver Ensure ongoing premium branded steel businesses competitive commodity steel supply financial strength with strong channels to market in our local markets Coated & Painted Building Solutions North Star Australia & NZ Balance Sheet Products BlueScope Steelmaki
Slide 29: Steel demand in China has plateaued
Australia & NZ Steelmaking – industry context Steel demand in China has grown nearly six-fold in the last 15 years, but has now plateaued… For personal use only Apparent finished steel demand 1,800 China 1,600 1,537 1,544 World (Excl China) 1,400 1,306 1,200 711 707 Million tonnes 1,042 1,000 588 57
Slide 30: Surplus global production capacity is plentiful
Australia & NZ Steelmaking – industry context … and surplus global production capacity is plentiful For personal use only Crude steel production and capacity 2,400 2,351 2,384 Excess Capacity 2,200 China 2,000 World (Excl China) 723 761 1,881 1,800 448 1,600 Million tonnes 1,400 1,346 1,200 199 813
Slide 31: Exports from China are rising
Australia & NZ Steelmaking – industry context Exports from China are rising despite increasing action to address unfair trade … For personal use only Exports of finished steel from China 200% 110 104 100 93 90 Million tonnes 80 70 60 52 50 40 30 20 10 0 2010-2013 avg 2014 2015 Annualised Source: ISS
Slide 32: No immediate signs of moderating volumes
Australia & NZ Steelmaking – industry context … with no immediate signs of an intention to moderate volumes For personal use only Chinese Commerce Ministry comments, May/June 2015: “I feel that it’s quite normal for Chinese steel exports to these countries to be rising, and it’s quite justifiable” “
Slide 33: Sharp decline in hot rolled coil steel prices
Australia & NZ Steelmaking – industry context As a result, there has been a sharp decline in hot rolled coil steel prices … For personal use only Steel Business Briefing East Asian hot rolled coil price -46% 650 608 600 550 499 500 US$ per tonne 450 400 386 350 326 300 250 200 150 Average from 1H FY
Slide 34: Spread well below the 2010-2014 average
Australia & NZ steelmaking – industry context … and spread in the last six months – to well below the average from 2010-2014 For personal use only East Asian hot rolled coil spread1 -34% 320 307 300 295 • US$100/t weaker 280 spread cf FY2010-14 US$ per tonne 260 • >2 Mt spread exposed 240 despatches
Slide 35: Domestic demand is weak
Australian Steelmaking – business context Domestic demand is weak For personal use only Australian Steel Products despatches of manufactured steel (Mt) 2.5 Mtpa normalised capacity 2.5 after FY2012 restructure 0.7 Export Surplus domestic production capacity since GFC • Decline in major projects and
Slide 36: Strong headway on costs and productivity
Australian Steelmaking – business context Strong headway on costs and productivity in the past five years … For personal use only Australian Steel Products net cost reductions ($M) FY2012 and 140 104 FY2013 include fixed cost benefits from PK restructure 177 189 35 $249M total cost reductions achiev
Slide 37: Australian Steelmaking – still challenged
Australian Steelmaking – still challenged For personal use only • Slab and hot rolled coil are global commodities exposed to an oversupplied regional market • It is imperative for Port Kembla Steelworks to be cost competitive with import alternatives • Our goal is to position the business to be cash
Slide 38: Commodity steelmaking significantly loss-making; strategic review
Australian Steelmaking Commodity steelmaking is significantly loss-making; strategic review well underway For personal use only Choice Sizing the challenge A. $200M cash cost reduction: • Over $200M permanent reduction in annual costs by FY2017 Become competitive against imported • Requires multi-st
Slide 39: Dimensions of the options under consideration in Australia
Australian Steelmaking Dimensions of the options under consideration in Australia For personal use only Options under consideration: Preferred route: game Convert to external feed and FY2012 Australian restructure A changing cost reduction B mothball steelmaking Review and planning 10 months Well un
Slide 40: Game changing cost reductions required from external stakeholders
Australian Steelmaking Game changing cost reductions required from external stakeholders For personal use only • Our regional competitors are not exposed to a meaningful price on carbon (80% of import Carbon policy competition from Asia) • Policy must move in tandem with, not ahead of, our competito
Slide 41: Keeping the Steelworks open needs employee and community support
Australian Steelmaking To keep the Steelworks open we need the support of our employees and the community For personal use only • Strategic review well underway – committed to delivering targeted $200M annual permanent cost savings • Our objective is to maintain steelmaking at Port Kembla, which wil
Slide 42: Australian Distribution: Significant restructure underway
Australian Distribution Significant restructure underway For personal use only • Rationalising into two streamlined businesses across 40 sites, to provide a focus on the products where we add the most value for our customers: – Tubular goods distribution – pipe and tube, merchant bar and related pro
Slide 43: New Zealand Steelmaking – strategic review
New Zealand Steelmaking – strategic review Facing similar challenges to that of Australian Steelmaking For personal use only • It is imperative for steelmaking to be cost competitive – Steel business EBIT fell below breakeven in 2H FY2015 on weaker regional steel prices – Steelmaking operations requ
Slide 44: New Zealand Steelmaking: The challenge
New Zealand Steelmaking – strategic review The challenge For personal use only Choice Sizing the challenge A. NZ$50M cash cost reduction • Over NZ$50M permanent reduction in annual costs by FY2017 • Requires multi-stakeholder collaboration: – Employees – Community – Suppliers – Government and regula
Slide 45: Sale of interest in McDonald's Lime for NZ$41 million
New Zealand Steelmaking Sale of interest in McDonald’s Lime for NZ$41 million For personal use only • BlueScope monitors opportunities to monetise non-core assets, including property and business interests, to maximise value for shareholders • In December 2014, New Zealand Steel agreed to sell its n
Slide 46: Update on iron sands exports
New Zealand iron sands Update on iron sands exports For personal use only Taharoa • Expect the break-even price for both EBIT and cash during 1H FY2016 to be in the mid US$60s per tonne1, dropping to mid US$50s per tonne1 in 2H FY20162 • Phased approach to expansion capex – Initial capex required fo
Slide 47: Strategy delivered with respect for four stakeholder groups
Our strategy is delivered having respect for all four stakeholder groups of Our Bond For personal use only Customers Employees Shareholders Communities • Work together • Success • Focus on long • Respect and to create value comes from term do what is right and trust our people shareholder by: • Supe
Slide 48: Financials
For personal use only FINANCIALS
Slide 49: Underlying EBIT variances
Underlying EBIT variances Mainly ASP, New Zealand and China Net spread increase $38.6M For personal use only 301.8 8.6 (34.7) 14.7 264.1 10.5 107.1 (64.3) Conversion & other costs: Volume 6 (4.2) Cost improvement initiatives 96 Escalation (54) Raw material costs: Steel Transformation Plan (46) Weake
Slide 50: Underlying earnings
Underlying earnings For personal use only Improved on 2H FY2014 (which was $113M before $M FY2014 FY2015 2H FY2015 restatement1; $120M Underlying EBIT 264.1 301.8 130.8 after restatement) Underlying borrowing costs (66.1) (71.2) (35.7) 8% increase in FY2015 Interest revenue 3.7 4.3 0.6 due to higher
Slide 51: Reconciliation between reported NPAT and underlying NPAT
Reconciliation between reported NPAT and underlying NPAT1 For personal use only 2H FY2015 FY2015 NPAT $M NPAT $M Reported net profit after tax 43.6 136.3 Underlying adjustments Accounting adjustment on closure of defined benefit superannuation - (19.0) Tax asset write-back (3.4) (8.9) Asset sales (3
Slide 52: Cash flow
Cash flow $M FY2014 FY2015 1H FY15 2H FY15 Reported EBITDA 429.9 639.6 349.9 289.7 For personal use only Adjust for other cash profit items (1.2) 14.8 (8.9) 23.7 Cash from operations 431.1 654.4 341.0 313.4 Strong working capital Working capital movement (inc provisions) 68.3 0.6 (121.1) 121.7 perfo
Slide 53: Net working capital
Net working capital For personal use only 1,462.0 32.5 (126.4) 1,357.9 1,327.9 (89.9) 1,273.3 1,269.3 (8.9) $M Jun-2013 Dec-2013 Jun-2014 Dec-2014 Receivables Inventory Payables Deferred Jun-2015 income % of sales 17.8% 17.0% 16.6% 16.8% 14.8% (based on 6 months prior 53 annualised)
Slide 54: Capital and investment expenditure
Capital and investment expenditure For personal use only FY2014 and FY2015 capex commitments ($M) Expected FY2016 capital and investment expenditure ($M) Largest growth projects: • Pacific Steel – finalisation of billet Pacific Steel final caster & integration consideration • Painting and coating ca
Slide 55: Balance sheet – low gearing maintained
Balance sheet – low gearing maintained For personal use only Net debt ($M) Net debt / EBITDA Gearing (ND/ND+E) 8.0% 0.4x 0.4x 5.5% 5.5% This result benefited by $100M from favourable timing FY2014 FY2015 Jun-14 Dec-14 Jun-15 of year end cash 408 flows Liquidity (undrawn facilities and cash, $M) 1 27
Slide 56: Outlook & Summary
For personal use only OUTLOOK & SUMMARY
Slide 57: 1H FY2016 outlook: Segmental comments
1H FY2016 outlook Segmental comments For personal use only Australian Steel Products New Zealand & Pacific Steel • Robust residential volumes, cost improvement • Cost benefits and FX offsetting lower steel and iron initiatives and benefit of the weaker AUD:USD ore prices anticipated to largely offse
Slide 58: 1H FY2016 outlook: Group summary
1H FY2016 outlook Group summary For personal use only • We expect 1H FY2016 underlying EBIT to be similar to 2H FY2015 • Based on assumptions of average: – Spot East Asian HRC price of ~US$325/t – 62% Fe CFR iron ore price of ~US$50/t – Hard coking coal price of ~US$90/t – AUD:USD at US$0.73 • Refer
Slide 59: Our strategy defines our portfolio management priorities
Our strategy defines our portfolio management priorities For personal use only Grow Deliver Ensure ongoing premium branded steel businesses competitive commodity steel supply financial strength with strong channels to market in our local markets Coated & Painted Building Solutions North Star Austral
Slide 60: Questions & Answers
For personal use only QUESTIONS & ANSWERS
Slide 61: Additional Information – Group-level Material
For personal use only ADDITIONAL INFORMATION – GROUP-LEVEL MATERIAL
Slide 62: Financial headlines
Financial headlines YEAR ENDED For personal use only $M (unless marked) 30 JUNE 2014 30 JUNE 2015 FY2015 vs FY2014 Total revenue 8,006.9 8,571.6 External despatches of steel products 5,967.6Kt 6,231.3Kt EBITDA Underlying 1 590.4 644.8 EBIT Reported 102.3 296.6 Underlying 1 264.1 301.8
Slide 63: Summary of financial items by segment
Summary of financial items by segment For personal use only Sales revenue Total steel despatches $M FY14 1H15 2H15 FY15 '000 tonnes FY14 1H15 2H15 FY15 Australian Steel Products 4,522.1 2,459.0 2,333.1 4,792.1 Australian Steel Products 2,653.9 1,414.9 1,478.9 2,893.7 New Zealand and Pacific Steel 87
Slide 64: Balance sheet
Balance sheet $M 30 Jun 2014 31 Dec 2014 30 Jun 2015 For personal use only Assets Cash 466.6 390.3 518.6 Receivables * 1,108.6 1,091.1 1,123.6 Inventory * 1,571.2 1,687.1 1,560.7 Property, Plant & Equipment 3,515.3 3,652.8 3,732.6 Intangible Assets 484.6 493.7 515.3 Other Assets 372.6 416.2 426.7 To
Slide 65: Inventory movement
Inventory movement For personal use only RM $218.0M RM $252.6M WIP 610.7 WIP 585.6 FG 582.9 FG 549.9 Other 159.6 Other 172.6 $10.5M decrease comprised of segmental movements: 1,571.2 (219.1) 96.5 (8.1) 1,560.7 Building Products segment - 120.2 85.9 mainly due to FX NZ and Pacific Steel - mainly 58.9
Slide 66: Debt facilities maturity profile at June 2015
Debt facilities maturity profile at 30 June 2015 For personal use only Receivables securitisation program: 521 BSL Syndicated Bank Facility In addition to debt facilities, BSL has NS BlueScope JV facilities (100%) two undrawn receivables securitisation US unsecured notes 130 programs totalling $23
Slide 67: Committed debt facilities as at June 2015
Committed debt facilities as at 30 June 2015 For personal use only Committed Drawn Maturity Local currency A$M A$M Syndicated Bank Facility - One year tranche Nov 2015 A$100M A$100M A$0M - Three year tranche Nov 2017 A$200M A$200M A$0M - Five year tranche Nov 2019 A$200M A$200M A$0M US unsecured not
Slide 68: Indicative EBIT sensitivities for 1H FY2016
Indicative EBIT sensitivities for 1H FY20161 Australian Steel Products segment New Zealand Steel & Pacific Steel segment For personal use only +/- US$10/t move in average benchmark hot rolled coil price +/- US$10/t move in average benchmark hot rolled coil price - direct sensitivity2 +/- $6-7M - dir
Slide 69: Restatement of prior period earnings for Discontinued Operations
Restatement of prior period earnings for reclassification of Building Solutions Australia into Discontinued Operations For personal use only • Consistent with BlueScope accounting policy and IFRS requirements, operations that are either sold or closed are to be defined as Discontinued Operations and
Slide 70: Additional Information – Segment Material
For personal use only ADDITIONAL INFORMATION – SEGMENT MATERIAL
Slide 71: Australian Steel Products: Underlying EBIT up significantly
Australian Steel Products Underlying EBIT up significantly to $150M on higher spread. Best result for five years For personal use only Comments on FY2015 Underlying EBIT ($M) • Higher spreads: 150.3 – Lower raw materials prices – Higher domestic prices through the favourable influence of a 84.2 2H w
Slide 72: Australian Steel Products: Financial and despatch summaries
Australian Steel Products Financial and despatch summaries For personal use only Key segment financial items Despatches breakdown $M unless marked FY14 1H15 2H15 FY15 '000 tonnes FY14 1H15 2H15 FY15 Revenue 4,522.1 2,459.0 2,333.1 4,792.1 Hot rolled coil 478.6 216.7 216.9 433.6 Underlying EBITDA 236
Slide 73: Australian Steel Products: Underlying EBIT variance
Australian Steel Products Underlying EBIT variance Net spread increase $108.5M 150.3 1.5 For personal use only (13.8) 6.5 Conversion & other costs: Volume (lower per unit costs) 27 Cost improvement initiatives 66 Lower global steel and coke prices, partly Escalation (31) offset by benefit of weaker
Slide 74: Australian demand
Australian Steel Products Australian demand For personal use only Total Australian external despatch volumes (Kt) 2H FY08 1H FY09 2H FY09 1H FY10 2H FY10 1H FY11 2H FY11 1H FY12 2H FY12 1H FY13 2H FY13 1H FY14 2H FY14 1H FY15 2H FY15 1,800 (No. 5 Blast Furnace Reline) 63% 1,600 64% Total constructio
Slide 75: Despatch mix
Australian Steel Products Despatch mix (Mt) For personal use only 1.48 1.41 1.31 FY2015 Product Mix 0.34 0.46 Export 0.24 Export 0.12 0.14 0.12 Domestic - externally sourced HRC Metal Coated Plate Painted CRC Other inc ext sourced 0.95 0.93 0.90 Domestic - BSL manufactured Domestic 2H FY2014 1H FY20
Slide 76: Revenue and underlying costs FY2015
Australian Steel Products Revenue and underlying costs FY2015 For personal use only Revenue Underlying costs (to EBIT line) A$4,792m A$4,622m Non-steel business costs relate to: Conversion & Overhead Non-steel business Non-steel business • Export coke sales Components (in order costs • Cold ferrous
Slide 77: Spread continues to be a significant driver of profitability
Australian Steel Products Spread continues to be a significant driver of segment profitability East Asia HRC price (US$/t) and indicative steelmaker HRC spread (A$/t) For personal use only Spread: SBB East Asia HRC price less cost of 1.5t iron ore fines and 0.71t hard coking coal $800 SBB East Asia
Slide 78: External forecasters' outlook for key end-use segments
Australian Steel Products External forecasters’ outlook for our key end-use segment exposures For personal use only Residential construction Non-residential construction Engineering construction Change in real value of work done HIA Forecast (July 2015)* Annual % Change Annual % Change Annual % Chan
Slide 79: Detached house approvals lifted in all regions
Australian Steel Products Detached house approvals lifted in all regions of Australia in FY2015. A&A approvals increased in FY2015 For personal use only Construction approvals of houses by region – rolling last 12 months Approvals of alterations & additions (value >$10k) ‘000 units $Bn, nominal 35 7
Slide 80: Approvals have lifted strongly in the last 24 months
Australian Steel Products Approvals have lifted strongly in the last 24 months For personal use only Australian residential construction approvals Change in Australian residential construction approvals (private sector) – ‘000 units (private sector) – ‘000 units 15 120 14 114 Other 110 4 Houses 103
Slide 81: Commencements lag approvals
Australian Steel Products Commencements lag approvals, and have only achieved full momentum in the last 18 months. Further, BSL despatches lag commencements (eg roof, gutter and fence installation) For personal use only Australian residential construction commencements Change in Australian residenti
Slide 82: Australian non-residential construction approvals
Australian Steel Products Australian non-residential construction approvals For personal use only Rolling 12 month value of work approved (public & private) – nominal A$M 45,000 Total Commercial & industrial Social & institutional 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 Jun- Jun- Jun-
Slide 83: Australian Performance of Construction (PCI) index
Australian Steel Products Australian Performance of Construction (PCI®) index For personal use only 70 65 60 Expansion 55 50 45 Contraction 40 35 30 25 20 Jul 06 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15 Note: The Au
Slide 84: Supply and pricing of iron ore and met coal to Port Kembla
Australian Steel Products Supply and pricing of iron ore and met coal to Port Kembla Steelworks For personal use only Supplier Term Approximate Volume (p/a) Pricing Basis 10 years from Linked to average monthly index in the month of Iron ore BHP Billiton Up to 4.18Mt lump & fines 1 July 2009 shipmen
Slide 85: New Zealand & Pacific Steel: Softer result
New Zealand & Pacific Steel Softer result mainly due to weaker iron ore and steel prices and volumes For personal use only Comments on FY2015 Underlying EBIT ($M) • Lower earnings from iron sands exports due to weaker iron 74.7 ore prices and volumes 2H 36.1 • Weaker regional steel prices impacted f
Slide 86: NZ construction and manufacturing activity momentum
New Zealand & Pacific Steel NZ construction and manufacturing activity maintaining strong momentum For personal use only Residential building consents – maintaining momentum Non-residential construction consents – strong growth ‘000 units, Cal Yrs 2,500 5.5 Moving annual total of value of consents (
Slide 87: New Zealand & Pacific Steel: Financial summary
New Zealand & Pacific Steel Financial summary For personal use only Key segment financial items New Zealand Steel despatches (flat products) $M FY14 1H15 2H15 FY15 '000 tonnes FY14 1H15 2H15 FY15 Revenue 870.9 489.9 482.2 972.1 Domestic despatches 270.6 131.7 128.9 260.6 Underlying EBITDA 127.5 31.4
Slide 88: New Zealand & Pacific Steel: Underlying EBIT variance
New Zealand & Pacific Steel Underlying EBIT variance For personal use only 74.7 Net spread decrease $81.4M $11M of NRV on Higher per unit costs Lower iron sands and flat Due mainly to fall in on lower iron sands product steel volumes. iron sands. Higher iron ore prices. (Lower and flat product steel
Slide 89: New Zealand Steel flat products despatch mix
New Zealand & Pacific Steel New Zealand Steel (flat products) despatch mix (kt) – excludes Pacific Steel For personal use only FY2015 Product Mix 295.7 272.5 Export 247.8 Export 155.9 143.6 116.1 HRC CRC Painted Plate Metal Coated Other Domestic 139.8 131.7 128.9 Domestic 2H FY2014 1H FY2015 2H FY20
Slide 90: Pacific Steel long products despatch mix
New Zealand & Pacific Steel Pacific Steel (long products) despatch mix (kt) For personal use only FY2015 Product Mix 135.9 123.1 Export Export 49.4 36.6 Reinforcing steel Mesh feed (rod) Wire Domestic 86.5 86.5 Domestic 1H FY2015 2H FY2015 90
Slide 91: Building Products ASEAN, North America and India
Building Products ASEAN, North America and India Indonesia turnaround and continued improvement in India and Vietnam. Market pressure in Thailand and Malaysia combined with weaker steel prices weighing on North America For personal use only Comments on FY2015 Underlying EBIT ($M) • Overall: improvem
Slide 92: Building Products ASEAN, North America & India: Financial summary
Building Products ASEAN, North America & India Financial summary For personal use only Key segment financial items Despatches by business $M unless marked FY14 1H15 2H15 FY15 '000 tonnes FY14 1H15 2H15 FY15 Revenue 1,742.9 898.6 892.2 1,790.8 Thailand 367.2 171.6 178.7 350.3 Underlying EBITDA 139.9
Slide 93: Building Products: Underlying EBIT variance
Building Products ASEAN, North America & India Underlying EBIT variance 98.3 For personal use only Net spread decrease $0.3M 88.9 5.3 2.1 3.5 (5.2) 6.1 (23.9) 21.5 FY2014 Export prices Domestic Raw material Conversion Volume & mix TBSL (India) FX translation 1 FY2015 prices costs & other costs & oth
Slide 94: Global Building Solutions
Global Building Solutions Strong U.S. growth and solid China coating & painting. Progressing restructure of China buildings Comments on FY2015 Underlying EBIT ($M) For personal use only 43.7 • Overall: North American growth offset by weakness in Engineered Buildings China engineered buildings 26.9 N
Slide 95: Global Building Solutions: Financial and despatches summary
Global Building Solutions Financial and despatches summary For personal use only Key segment financial items Despatches by business $M unless marked FY14 1H15 2H15 FY15 '000 tonnes FY14 1H15 2H15 FY15 Revenue 1,384.3 785.4 752.7 1,538.1 Engineered Buildings North America 224.8 140.1 110.8 250.9 Unde
Slide 96: Global Building Solutions: Underlying EBIT variance
Global Building Solutions Underlying EBIT variance For personal use only Net margin increase $21.0M 43.7 7.4 (9.0) (2.8) 4.8 16.4 Includes initiative to de- 26.9 risk North American pension fund obligations by $11.0M FY2014 Prices Raw material costs Conversion & Volume & mix FX translation FY2015 ot
Slide 97: Hot Rolled Products North America
Hot Rolled Products North America Better performance in FY2015 despite softening steel prices in 2H For personal use only Comments on FY2015 Underlying EBIT1 ($M) • Very strong spreads in 1H, but significantly weaker in 104.6 107.3 2H. Overall, spreads slightly weaker in FY2015 vs 40.2 2H FY2014 wit
Slide 98: FY2015 Financial Results Presentation
For personal use only FY2015 Financial Results Presentation Paul O’Malley, Managing Director and Chief Executive Officer Charlie Elias, Chief Financial Officer 24 August 2015 BlueScope Steel Limited. ASX Code: BSL