Slide 1: 3Q 2016 Earnings Release
Oct 26, 2016 3Q 2016 Earnings Release Figures 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. Exhibit 99.1
Slide 2: 3Q Operating Performance / Major Business Activities / 2016 Business Plan
3Q Operating Performance Major Business Activities 2016 Business Plan ▶ Figures 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.
Slide 3: 3Q Operating Performance: Parent
POSCO Earnings Release ｜October 26, 2016 6,299 6,010 6,107 Operating margin reached 14% as WP product sales increased and cost-cutting efforts continued 2015.3Q 2016.2Q 2016.3Q 9,712 9,007 9,800 598 557 570* (billion KRW) 10.1% 11.9% 14.0% 638 713 852 9,066 8,861 9,304 2015.3Q 2016.2Q 2016.3Q 2015.3
Slide 4: 3Q Operating Performance: Consolidated Income
POSCO Earnings Release ｜October 26, 2016 12,857 △658 4.7% 5.3% 13,996 221 (billion KRW) 12,748 476 8.1% △0.6% 2.5% ROE* 2015.3Q 2016.2Q 2016.3Q 2016.2Q 2016.3Q 3.1% 2015.3Q 2016.2Q 2016.3Q 24,026 21,761 84.9% 75.9% 70.4% Net Profit (billion KRW) Revenue Operating Profit Net Income 2015.3Q 2016.2Q 20
Slide 5: Domestic subsidiary performance
POSCO Earnings Release ｜October 26, 2016 POSCO Daewoo POSCO E&C POSCO Chemtech POSCO ICT POSCO Energy Despite increased gas production volume1, profit dropped due to restructuring loss-making businesses2 82 81 64 2015.3Q 2016.2Q 2016.3Q 1 (2Q) 34.8 bln ft3 à (3Q) 46.2 bln ft3 2 Allowance for bad deb
Slide 6: Overseas steel mills performance
POSCO Earnings Release ｜October 26, 2016 PT Krakatau POSCO ZPSS(Zhangjiagang STS) POSCO Vietnam POSCO Maharashtra POSCO Mexico 3Q turned profit as ASP upturned and cost reduction efforts continued △20 39 2015.3Q 2016.2Q 2016.3Q ASP (U$/t) : Plate) 459 (+57) Slab) 377 (+83) - Cost reduction made 81%
Slide 7: Major Business Activities
3Q Operating Performance Major Business Activities 2016 Business Plan ▶
Slide 8: World Premium product sales and solution marketing
POSCO Earnings Release ｜October 26, 2016 ** Manufacturing method used when making widely rounded pipe with thick plate (U transformation –O transformation -Expansion) * World Premium : POSCO’s high-end steel category World Premium product sales continued to expand through Solution-marketing activiti
Slide 9: STS profit edging up as prices rebound
[STS] Profit started to edge up as raw material/steel price rebounded and effort to improve profitability continued POSCO Earnings Release ｜October 26, 2016 Raw material and product price trend Profitability enhancement Nickel (thousand $/ton) Chrome (thousand $/ton) STS-300 Price (thousand KRW/ton)
Slide 10: Leading demand creation for Giga Steel
POSCO Earnings Release ｜October 26, 2016 Took lead on creating demand for Giga Steel, in accordance with light-weight trend of automotive steel (million units, million tons) Giga Steel Auto steel trend As regulation against fuel efficiency and gas emission expected to intensify, automakers are keen
Slide 11: Seismic protection solution
POSCO Earnings Release ｜October 26, 2016 Preparing for the future demand against earthquake, with POSCO’s own seismic protection solution Demand for earthquake resistant-design to increase Buildings with earthquake-resistant design are below 30% Steel structure → 100% oscillation-proof* Rebar concre
Slide 12: Restructuring progress
POSCO Earnings Release ｜October 26, 2016 Completed restructuring 98 cases from 149 targeted subsidiaries/assets, scheduled to push to reach the total target by 2017 Restructuring progress 9 subsidiaries restructured (3Q) 8 cases completed as scheduled (3Q) 2015 2016 34 35 2017 16 (Number of restruct
Slide 13: 2016 Business Plan
3Q Operating Performance Major Business Activities 2016 Business Plan ▶
Slide 14: Business Plan
2015 2016(f) POSCO Revenue (trillion KRW) 25.6 24.3 - Crude steel production (million tons) 38.0 37.2 - Product sales (〃) 35.3 35.3 CAPEX (trillion KRW) 2.0 2.1 Net Debt (〃) 0.4 △0.6 Consolidated Revenue (trillion KRW) 58.2 58.7 CAPEX (〃) 2.5 2.8 Net Debt (〃) 16.5 14.6 POSCO Earnings Release ｜Octobe
Slide 15: Appendix
▶ Appendix 1. Business Environment – Steel demand and raw materials 2. Financial Statements
Slide 16: Domestic Demand & Supply Outlook
POSCO Earnings Release ｜ October 26, 2016 Domestic Demand & Supply Outlook (million tons) 구 분 2013 2014 2015 2016(f) 1Q 2Q 3Q 4Q YoY Nominal Consumption 51.8 55.5 55.8 56.8 13.5 14.7 14.6 13.9 △ 2.5% Export 29.2 32.3 31.6 31.1 7.6 7.4 8.0 8.1 △ 0.1% Production 69.1 74.1 74.1 74.1 17.9 18.4 19.0 18.9
Slide 17: China's Steel Economy and Steel Demand in Major Countries
* CRU(2016.10), Mysteel(2016.10) * World Steel Association(2016.10) POSCO Earnings Release ｜ October 26, 2016 China’s Steel Economy Steel Demand in Major Countries “Steel price remains firm as overcapacity from China eased” “Global demand to increase in 2017 due to strong growth in emerging countrie
Slide 18: Raw Materials: Iron Ore and Coking Coal
Iron Ore 2016.3Q 2016.4Q (US$/ton) POSCO Earnings Release ｜October 26, 2016 Coking Coal * Premium Low Vol HCC FOB Australia (Quarterly Spot Average) (US$/ton) 2016.3Q 2016.4Q 2014 4Q 2015 1Q 2015 2Q 2015 3Q 2015 4Q 2016 1Q 74 62 59 55 47 48 2016 2Q 56 2016 3Q 59 2016 4Q(f) 57 2014 4Q 2015 1Q 2015 2Q
Slide 19: Summarized Statements of Income
POSCO Earnings Release ｜October 26, 2016 구 분 2015.3Q 2016.2Q 2016.3Q QoQ Revenue 13,996 12,857 12,748 △109 Gross Profit 1,570 1,569 1,962 393 (Gross Margin) (11.2%) (12.2%) (15.4%) SG&A 918 891 928 37 Operating Profit 652 679 1,034 355 (Operating Margin) (4.7%) (5.3%) (8.1%) Other Operating Profit △
Slide 20: Consolidated Statements of Financial Position
POSCO Earnings Release ｜October 26, 2016 구 분 2015.3Q 2016.2Q 2016.3Q QoQ Current Assets 31,553 28,718 27,457 △1,261 Cash Balance* 8,792 8,405 8,050 △355 Account Receivable 10,184 9,352 8,656 △696 Inventories 9,091 7,748 7,903 155 Non-Current Assets 51,649 50,678 49,606 △1,072 Other Long-term Financi