Posco Holdings Inc. · KRX:005490
Posco — Investor Presentation (January 2005)
21 slides from Posco's investor presentation, Jan 14, 2005
Slide 1: CEO Forum 2005
January, 2005 CEO Forum 2005 1
Slide 2: Contents
Contents 1. 2004 Performance 2. Industry Overview 3. Medium-Term Strategy 4. 2005 Business Plan The figures provided in this presentation are based on unaudited financial statements. Certain numbers may be presented differently once audited and the company takes no responsibility and accepts no liab
Slide 3: 2004 Performance: Production and Strategic Product Sales
? Expand Production to 30 Mn tons & High Value Added Products 2004 PERFORMANCE (Unit: MM tons) Crude Steel Production Sales of 8 Strategic Products (Unit: MM tons) '02 '03 '04 ?? 28.1 28.9 30 28.1 28.9 30.2 (+4.5% YoY) '02 '03 '04 Domestic 2.55 3.85 5.48 2.55 3.85 5.48 (+42.3%) 3
Slide 4: 2004 Performance: Sales Revenue and Operating & Net Profit
2004 PERFORMANCE (cont'd) (Unit: KRW Bn) Sales Revenue (Unit: KRW Bn) Operating & Net Profit '02 '03 '04 ?? 11729 14359 19496 '02 '03 '04 500 1101 2100 3300 732 1078 1500 1,833 3,059 5,054 (+65.2%) 1,101 1,981 Net Profit 3,826 11,729 14,359 19,792 (+37.8%) 4
Slide 5: 2004 Performance: Operating Margin, ROE and EBITDA
Operating Margin & ROE (Unit: %) EBITDA & EBITDA Margin (Unit: KRW Bn, %) 2004 PERFORMANCE (cont'd) '01 '02 '03 '04 12.9 15.6 21.3 25.5 8.4 10.2 16.2 26.3 6,500 4,519 3,160 2,623 23.7 26.9 31.5 32.8 Op. Margin ROE EBITDA Margin EBITDA '01 '02 '03 '04 5
Slide 6: Major Management Activities
MAJOR MANAGEMENT ACTIVITIES ? Construction of #1 FINEX Plant : 1.5 MM tons ( ~ Dec. '06) ? Construction of No. 5, 6 CGL - - No. 5 : 0.45 MM tons ( ~ Oct. '05) - No. 6 : 0.4 MM tons ( ~ Jun. '06) ? R & D (KRW 0.3 Tn) ? Investment to Secure Future Growth and Leadership in Technology ? Capacity Expansi
Slide 7: Major Management Activities: Dividend Policy and Share Cancellation
? Focusing on long-term stable dividend payout ? 2004 dividend : KRW 8,000/share (+33% yoy) - Including interim dividend of KRW 1,500/share - - Dividend yield : 4.3% ? Enhancing Shareholder Value Dividend Policy (Unit: '000 shares, %) Share Cancellation ? Share buy-back and cancellation in four cons
Slide 8: Industry Overview
1. 2004 Performance 2. Industry Overview 3. Medium-Term Strategy 4. 2005 Business Plan 9
Slide 9: Structural Change in Steel Industry
Old era New era China World Average Production (Crude Steel): 700 MM tons 800 1,000 200 600 STRUCTURAL CHANGE IN STEEL INDUSTRY ? New Era with Annual Crude Steel Production over 1 Bn Tons Global Steel Production Trend 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 (U
Slide 10: Consolidation and Globalization
CONSOLIDATION AND GLOBALIZATION Europe Japan US TKS Thyssen - Krupp Stahl Corus British Steel - Hoogovens JFE KSC - NKK NSC SMI - Kobe US Steel National Steel 45 MM tons (2002) 20 MM tons (1999) 18 MM tons (1997) 30 MM tons (2003) NUCOR Arcelor Usinor - Arbed - Aceralia 63 MM tons (Oct. 2004) 32 MM
Slide 11: Trends in Raw Material Market
TRENDS IN RAW MATERIAL MARKET ? Increase in raw material demand driven by China ? Seaborne Trade - Iron Ore : 579 ('04) ^ 601 ('05) ^ 630 ('06) MM ton - Coke : 196 ('04) ^ 206 ('05) ^ 213 ('06) MM ton (IISI, '04.10) ? Delay in capacity expansion for raw material supply ? Iron Ore - CVRD : 165 ('04)
Slide 12: Medium-Term Strategy
1. 2004 Performance 2. Industry Overview 3. Medium-Term Strategy 4. 2005 Business Plan 13
Slide 13: Medium-Term Strategy
MEDIUM-TERM STRATEGY ? Establish Global Production Base ? Global Leadership in Technology ? Stable Raw Material Procurement ? Continuous Management Innovation Strategic Goals 14
Slide 14: Establish Global Production Base
? Increase domestic production to 34 MM tons ('08) - Pohang Steelworks : 15 MM tons - Gwangyang Steelworks : 19 MM tons ? Enlarge overseas production base - China, India and Brazil ? Expand production capacity to Global Top 3 by 2007 ('07) - Pohang Steelworks : 2.2 MM tons - STS Plant in Zhangjiagan
Slide 15: Global Leadership in Technology
MEDIUM-TERM STRATEGY (cont'd) ? Global Leadership in Technology (2005 ~ 2008) Upgrade Pohang and Gwangyang Steelworks for high-grade steels ('08) - FINEX ? Completion of 1.5 MM tons plant ('06) - Strip Casting ? Development of technology ('06) ? Commercializing of Technologies - Automotive sheets /
Slide 16: Stable Raw Material Procurement
MEDIUM-TERM STRATEGY (cont'd) ? Stable Raw Material Procurement Increase investments in overseas raw material development projects ? Raw Material Development Expand long-term procurement contracts ? Long-term Contracts Strengthen partnership with suppliers through SCM ? Supply Chain Management Optim
Slide 17: Total Capex over Next 5 Years
MEDIUM-TERM STRATEGY (cont'd) ? Total Capex of KRW 16 Tn over Next 5 Years (2005 ~ 2009) ???? ???? ?? ??? 70 25 5 Domestic Steels 70% Overseas Steels 25% Non-steel 5% 18
Slide 18: Continuous Management Innovation
Corporate Culture Innovation Investment in Human Capital Tailor-made 6 Sigma System CSM for Sustainable Growth Globalization of Working Process Nurturing 6 Sigma Specialists Continuing Education for Knowledge Management Development of Global Standard Human Capital 6 Sigma MEDIUM-TERM STRATEGY (cont'
Slide 19: 2005 Business Plan
1. 2004 Performance 2. Industry Overview 3. Medium-Term Strategy 4. 2005 Business Plan 20
Slide 20: 2005 Business Plan
2005 BUSINESS PLAN Production (Unit: MM tons, KRW Bn) Sales Volume Revenue Capex 2004 2005 (F) Change (%) 30.2 31.1 3.0 29.2 30.1 3.1 19,792 23,010 16.3 2,277 4,081 79.2 * The abovementioned data represents internal financial objectives of the company and should not be used for making investment dec
Slide 21: CEO Forum 2005
CEO FORUM 2005 January 2005 22