Posco Holdings Inc. · KRX:005490

Posco — Q1 2009 Earnings Presentation

30 slides from Posco's earnings presentation, Apr 10, 2009

  1. Slide 1: 1Q 2009 Operating Performance

    1Q 2009 Operating Performance April 10,, 2009

  2. Slide 2: 1Q '09 Operating Performance agenda

    2 1Q ‘09 Operating Performance Activity & Accomplishment Steel Industry Environment 2009 Business Plan Figures provided in this presentation are based on unaudited financial statements of the Company. Certain contents in this presentation are subject to change during the course of auditing process.

  3. Slide 3: Production/Sales

    3 Production/Sales (in thousand tons) Blast Furnace Mini-Mill STS ¡â22.9% - - 6.2% ¡â20.3% - - ¡â30.6% 5,887 - - 258 7,631 - - 243 7,387 458 372 ¡â0.6% - - ¡â18.4% - - 1,853 (31.1) 1,864 (26.3) 2,272 (28.6) Export (%) 2008 4Q YoY QoQ 814 4,102 5,955 5,802 6,145 2009 1Q ¡â27.8% ¡â21.3% ¡â15.8% ¡â22.3

  4. Slide 4: Sales by Product and Utilization by Sector

    4 66 66 88 ‘09.1 2 3 < Home Appliance > Sales by Product Total 7,934 7,076 5,955 ¡â24.9% ¡â15.8% Others 275 310 250 ¡â9.1% ¡â19.4% Wire Rod 484 499 432 ¡â10.7% ¡â13.4% Cold Rolled 3,338 2,772 1,920 ¡â42.5% ¡â30.7% Elec. Steel 242 205 175 ¡â27.7% ¡â14.6% 2008 4Q YoY QoQ 241 1,156 1,781 2009 1Q 6.6% ¡

  5. Slide 5: Income Summary

    5 Income Summary (in billion KRW) 2008 4Q YoY QoQ 325 5.8% 373 5,815 6,471 2009 1Q ¡â55.0% - - ¡â73.3% ¡â11.2% ¡â22.1% 2008 1Q ¡â68.5% - - ¡â70.7% 29.1% 6.7% 721 16.8% 1,398 6,549 8,305 1,031 21.0% 1,274 4,506 6,066 OP Margin Revenue CoGs Operating Income Net Income ?? Due to lower sales and weaker

  6. Slide 6: Summarized Income Statement (POSCO)

    6 Summarized Income Statement (POSCO) (in billion KRW) ¡â73.3% - - 373 (5.8%) 1,398 (16.8%) 1,274 (21.0%) Operating income (OR Margin) G G & A 286 358 283 ¡â20.9% 2008 4Q QoQ 325 (5.0%) ¡â17 46 121 ¡â120 6 36 656 (10.1%) 6,471 2009 1Q 2008 1Q ¡â55.0% - - - - 142.1% — ¡â40.0% - - ¡â62.6% - - ¡â22.1%

  7. Slide 7: Financial Structure

    7 Financial Structure (in billion KRW) Non-current 21,429 23,340 23,968 11.8% 2.7% Assets Current Assets 2008 4Q YoY QoQ 27,555 6,960 9,680 13,267 37,235 2009 1Q ¡â0.8% 35.7% 4.6% ¡â3.1% 0.5% 2008 1Q 11.9% 133.2% 66.1% 47.2% 22.3% 27,783 5,129 9,250 13,693 37,033 24,614 2,984 5,828 9,013 30,442 Debt

  8. Slide 8: Summarized Balance Sheets (POSCO)

    8 Summarized Balanced Sheets (POSCO) Interest bearing debt 2,984 5,129 6,960 35.7% Total liability & Equity 30,442 37,033 37,235 0.5% Investment securities Fixed assets 1.4% 3.5% 8,755 14,978 8,633 14,466 7,923 13,175 Cash equivalent assets Notes receivable Inventory 26.7% ¡â10.9% ¡â17.1% 4,717 2,87

  9. Slide 9: Financial Ratios

    9 Financial Ratios 2,459 2,363 EEBBIITTDDAA && EEBBIITTDDAA Maarrggiinn 27.9 (bn KRW,%) 31.7 ‘08.1Q 2Q 3Q 4Q ‘09.1Q 28.7 1,741 LLiiaabbiilliittyy—ttoo—EEqquuiittyy RRaattiioo 30.7 (%) 23.7 25.9 RReettuurrnn oonn EEqquuiittyy 19.7 19.3 (%) 16.8 (Quarter closing price) SShhaarree PPrriiccee&& Maarrkke

  10. Slide 10: Consolidated Financial Summary

    10 Consolidated Financial Summary Equity 25,251 28,344 28,227 11.8% ¡â0.4% Liabilities 12,271 18,617 19,707 60.6% 5.9% Net income 1,032 665 399 ¡â61.3% ¡â40.0% ¡â58.1% - - ¡â61.0% - - 586 (6.7%) 1,398 (12.8%) 1,502 (17.7%) Op income (Margin) 2008 4Q YoY QoQ Assets Revenue 47,934 8,788 2009 1Q 2.1% ¡

  11. Slide 11: Consolidated Financial Summary by Sector

    11 (in billion KRW) IT & Others 5 3 14 366.7% Energy 13 17 24 41.2% E & C 58 93 52 ¡â44.1% IT & Others 113 180 144 ¡â20.0% Energy 186 208 111 ¡â46.6% E & C 883 1,713 1,615 ¡â5.7% QoQ 1,398 1,500 1,387 10,953 14,557 12,457 2008 4Q Consolidated ¡â58.1% ¡â70.8% ¡â74.9% ¡â19.8% ¡â22.5% ¡â24.5% 8,477 8,7

  12. Slide 12: Consolidated Financial Summary: Financial Structure by Sector

    12 (in billion KRW) 2008/E 2009.1Q 2008/E 2009.1Q 2008/E 2009.1Q 28,227 35,371 32,115 2,073 566 617 28,344 35,404 32,245 2,034 553 572 Equity Steel E & C Energy IT & Others 47,934 57,286 47,501 7,243 1,150 1,392 Consolidated 19,707 21,915 15,386 5,170 584 775 46,961 18,617 14,922 4,524 629 734 47,16

  13. Slide 13: Activity & Accomplishment

    13 1Q ‘09 Operating Performance Activity & Accomplishment Steel Industry Environment 2009 Business Plan

  14. Slide 14: Dividend Payment History and New Management

    14 6,000 8,000 8,000 8,000 10,000 Dividend Payment History (KRW/share) 10,000 ?? Dividend Yield: 2.6%, Payout Ratio: 17.2% ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 KKRRW 1100,,000000//sshhaarree ((iinncclluuddee iinntteerriim)) 41st Annual General Meeting NNeeww Maannaaggeemeenntt AAppppooiinntteedd ?? 7th Chairman

  15. Slide 15: Contingency Plan Management to Overcome Crisis

    15 Contingency Plan Management to Overcome Crisis ?? Flexible management in response to fast changing environment ?? Business planning cycle shortened to monthly base (previous: quarterly) ?? Set stretched target for cost savings ?? Raised cost savings target : KRW 958.4 ¡æ 1,295.5bn ?? Optimized op

  16. Slide 16: Continue Growth Investment for Post-Recession

    16 Continue Growth Investment for Post-Recession ?? Facility expansion & upgrade to increase domestic capacity ?? Pohang new steelmaking plant (Jul.’08 ~Sept.’10, progress: 27.3%) - - Increase capacity (4.65Mt/yr, +1.55Mt), improve quality & cost competitiveness ?? Gwangyang new plate plant (Jul.’08

  17. Slide 17: Continue Cost Savings and Strengthened Competitiveness

    17 ?? Raise cost savings target - - 958.4(original) ¡æ KRW 1,295.5bn(revised) Strengthened Competitiveness CCoonnttiinnuuee CCoosstt SSaavviinnggss (in billion KRW) 32% Progress 415.3 1Q result 1,295.5 ‘09 Target Raw Material 338.4 Maintenance 47.1 Others 29.8 (in billion KRW) Cost Savings by Sector

  18. Slide 18: Key Subsidiaries' Business Activities

    18 Key Subsidiaries’ Business Activities ?? “Noi Bai ~ Lao Cai”, Vietnam highway construction (KRW 229bn) ?? Received orders to expand & construct National highway - - “Nangjung~Busan” road expansion (KRW 92.9bn, equity stake: 85%) - - “East Hongchun~Yangyang” road construction (KRW 85.8bn, equity s

  19. Slide 19: Demonstrate Corporate Citizenship

    19 Demonstrate Corporate Citizenship ?? 1st Rank Sustainability in Korea (Mar.’09) (Fortune Account Ability) - - 1st rank among 30 major corporations - - Social · economical issue oriented strategy, sustainable business performance ?? Best Sustainable Company (Mar.’09) (SAM-DowJones) - - Only Korean

  20. Slide 20: Steel Industry Environment

    20 1Q ‘09 Operating Performance Activity & Accomplishment Steel Industry Environment 2009 Business Plan

  21. Slide 21: Global Steel Market

    21 Global Steel Market Crude Steel Growth Rate HRC Price by Region ?? Production cut mainly from developed countries due to global recession ?? China saw growths in last 2months while developed countries cut productions - - February’s crude steel production (YoY): US -54%, EU -42%, Japan -44% ?? Pro

  22. Slide 22: Domestic Steel Market

    22 Domestic Steel Market ?? High inventory due to weak demand & low price due to cheaper imports Inventory by Products HR Import Price 400 600 800 1,000 1,200 ‘08.1 3 5 7 9 11 ‘09.1 3 ($/ton) China offer price Import price 1,150 505 471 580 1,084 Source : Korea Steel Association Source : Bloomberg H

  23. Slide 23: Steel Market Trend

    23 Steel Market Trend ?? After several years of rapid growth, industry enters an adjusting period ?? ‘08 saw negative growth(-1.8%) in crude steel production, first since ‘98 ?? Global stimulus plan to lead recovery of steel market ¢Ñ SOC investment size by countries: US 109, China 260, Korea 3.6 (i

  24. Slide 24: Global Steel Market Outlook

    24 Global Steel Market Outlook 1 ?? Increased trade disputes due to regional imbalance in supply/demand ?? Aggressive export plan from Japan/CIS while oversupply grows in China ?? Protectionism in developed countries to continue China Oversupply Growth US Economy recession Lower import volume “Buy A

  25. Slide 25: Global Steel Market Outlook

    25 Global Steel Market Outlook 2 ?? Recession will force industry restructuring ?? Asian mills to take market leadership while EU ·US mills role weaken - - Advent of new leader followed by sizable M&As within China ?? Reorganization among new players after ‘competition for survival’ Large mills take

  26. Slide 26: Raw Material

    26 Raw Material öIIrroo ±¤nn 1 / 4 ® OOrree ¿øCCo ·áoaaźll ?? Steep downturn due to weak demand from steel producers ?? Demand drop due to weak steel mkt. - - Major mills cut steel production in 4Q ‘08 - - Inventory increase in major Chinese ports (3/e ‘09: 68Mt, 58days) ?? Price conflict between

  27. Slide 27: Stainless Steel

    27 Stainless Steel ?? Asia - - Korea: Slight recovery mainly with exports, CRM utilization recovery after Dec.’08 - - China: Expect weak price for next 1~2months & slight utilization recovery in 2H ?? Europe - - Low price to continue as recovery slows - - Visible recovery of mill utilization delays

  28. Slide 28: 2009 Business Plan

    28 1Q ‘09 Operating Performance Activity & Accomplishment Steel Industry Environment 2009 Business Plan

  29. Slide 29: 2009 Business Plan

    29 The data above represents company’s internal objects, thus should not be used as a basis for investment decisions 2009 Business Plan * POSCO Investment: CAPEX (5.9), Overseas/Raw Material (1.3), Energy/New Business (87.7bn) 3.8 31.6 22.2 29.6 32.8 31.1 2007 - - Consolidated 34.7 29 · Revenue 30.6

  30. Slide 30: 1Q 2009 Operating Performance

    1Q 2009 Operating Performance Aprriill 10,, 2009

Posco — Q1 2009 Earnings Presentation on 6ix