Bluescope Steel Limited · ASX:BSL
Bluescope Steel — FY2010 Earnings Presentation
105 slides from Bluescope Steel's earnings presentation, Aug 16, 2010
Slide 1: FY2010 Results Presentation
For personal use only FY2010 Results Presentation Period Ended 30 June 2010 Paul O’Malley, Managing Director and Chief Executive Officer Charlie Elias, Chief Financial Officer 16 August 2010 ASX Code: BSL Page 0
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 & Headlines
For personal use only Introduction & Headlines Page 2
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 18 70 16.0 16 60.0 Medically treated injuries per million man-hours worked 60 14.0 Lost time injuries per million man-hours worked 14 52.2 50 47.1 12 10 40 Reported per
Slide 5: Group financial headlines FY2010 vs. FY2009
Group financial headlines FY2010 vs. FY2009 … $192M profit turnaround For personal use only TWELVE MONTHS ENDED 30 JUNE VARIANCE 2010 2009 % Revenue A$8,624M A$10,329M Down 17% External despatches 7.2M tonnes 6.0M tonnes Up 20% EBITDA − Reported A$590M A$380M - − Underlying A$605M A$536M Up 13% EBIT
Slide 6: Continued improvement in Underlying EBIT
Continued improvement in Underlying EBIT For personal use only 2H FY2010 (vs 1H) EBIT drivers: Underlying EBIT A$m ySpread improvement (export prices and raw materials) in Coated and Industrial Products Australia yAsian businesses continued to perform well (volumes) yStronger domestic sales, export
Slide 7: Segment summary – significant improvement in Asia and North Star
Segment summary – significant improvement in Asia and North Star BlueScope earnings For personal use only Underlying EBIT, A$M FY2009 FY2010 Variance Coated & Industrial Products Australia 141 108 (33) Australia Distribution & Solutions 9 2 (7) New Zealand Steel and Pacific Steel Products 87 73 (14)
Slide 8: Australian market exposure with improving despatches
In Australia our biggest and most important market, we have a broad segment exposure with improving despatches For personal use only EXTERNAL DESPATCH VOLUMES(1) 1,800 2H FY2008 1H FY2009 2H FY2009 1H FY2010 2H FY2010 60% 1,600 61% 62% 1,400 25% (409kt) 63% 25% (371kt) 1,200 27% (368kt) Non-dwelling
Slide 9: Global external despatch volumes improved by 20% in FY2010
Global external despatch volumes improved by 20% in FY2010 For personal use only FY2008 FY2009 FY2010 Exports Exports Exports 29% 8% 25% 27% 4% 6% (2,374kt) 18% (1,492kt) 4% (1,931kt) 20% 8% 9% 21% 17% 12% 13% 12% 12% 11% 4% 38% 38% 37% 4% 4% Total External Sales 8,133kt 26% decline 5,986kt 20% incr
Slide 10: Asia: we delivered significant earnings in FY2010
Asia: we delivered significant earnings in FY2010 For personal use only Coated & Building Products Asia (inc. China) China Underlying EBIT A$m Segment Underlying EBIT A$m Benefit of cost reductions and Reinvigoration of sales improved performance, 31 efforts and restructuring in particular volumes b
Slide 11: Cost improvement initiatives delivered – a highlight of FY2010
Cost improvement initiatives delivered – a highlight of FY2010 For personal use only $526M FY2010 Savings • $526M total savings delivered in FY2010 • $658M cumulative savings achieved Permanent, $208m 39% by end of FY2010 (vs. FY2008 cost Temporary, $318m base) 61% • $340M permanent savings achieved
Slide 12: The Board announced a final ordinary dividend
The Board announced a 5 cps ordinary final (fully franked) dividend For personal use only 42 / 20¢ 20 49 / 0¢ 47 / 0¢ 44 / 0¢ 30 / 10¢ 10 27 26 22 / 7¢ 24 24 Special 7 18 Final 13 20 21 22 18 5 / 0¢ 12 0 / 5¢ Interim 9 5 5 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 Page 11
Slide 13: Global Business Environment & the Steel Industry
For personal use only Global Business Environment & the Steel Industry Page 12
Slide 14: Steel margins will remain volatile while capacity utilisation is below 80%
Steel margins will remain volatile while world (ex-China) capacity utilisation is below 80% For personal use only Apparent Steel Use Crude Steel Capacity Utilisation (2002 – 2011f) (Jan 2002 – June 2010) Tonnes (M’s) Utilisation (%) 1,400 110% World World 1,306 China 1,300 China 105% World (Excl Chi
Slide 15: Developed world recovering slowly; Australia in generally good health
Developed world recovering slowly; Australia in generally good health For personal use only Real GDP Growth Annual % Change 6 Cal Yrs Forecast 5 4 Australia 3 U.S. 2 Japan 1 Eurozone 0 -1 -2 -3 -4 -5 -6 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Datastream, Consensus Economi
Slide 16: Industrial production index demonstrates recovery and Australia's strength
Industrial production index also demonstrates the recovery and Australia’s comparative strength For personal use only Industrial Production (Index Jan 2000 = 100) Cal Yrs 120 120 115 115 110 110 105 105 100 100 95 95 90 90 85 85 80 80 75 75 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2000
Slide 17: China: the economic outlook remains positive
China: the economic outlook remains positive. The Chinese Government is taking action to move their economy to a more sustainable growth path For personal use only GDP Quarterly YoY % Change Composite Leading Indicator (CLI) and Industrial Production (IP) 10 Yr Avg YOY % Change 16 28% CLI 14 24% IP
Slide 18: China: we remain positive on medium and long-term outlook
China: we remain positive on the medium-term and long-term outlook For personal use only • Robust medium / long term economic and steel demand fundamentals remain ¾ Announced (6 August 2010) details of planned steel capacity closure by end September 2010 – 175 works / 35mt total iron capacity ¾ Net
Slide 19: Global macro outcomes and what it means for BlueScope
Global macro outcomes and what it means for BlueScope For personal use only • Recovery of developed world is happening slowly • Chinese economy remains on a high growth trajectory, supporting regional and Australian growth • Steel spreads will remain volatile; anticipate they will improve once globa
Slide 20: Strategy & Business Performance
For personal use only Strategy & Business Performance Page 19
Slide 21: Revisiting our strategic direction: Blueprint principles
Revisiting our strategic direction, we will deliver value through further focus on Blueprint principles For personal use only Reinvigorate. Products, channels and markets, cost base Australian, New Zealand and U.S. steel businesses Secure cost-effective supply of raw materials Extract maximum value
Slide 22: Strengthening customer relationships, innovation and operational efficiency
We will improve our business through strengthening customer relationships, product and service innovation and driving operational efficiency For personal use only • Low cost producer for the Australian domestic market compared to the delivered cost of imports from offshore competitors • Strong lever
Slide 23: Raw material costs have increased dramatically
Raw material costs have increased dramatically … we must actively minimise these costs including consideration of acquisitions For personal use only PKSW Total Raw Materials Cost (A$m) +149% 2,240 1,883 1,656 1,614 1,555 1,073 913 899 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 Note: includes all PKSW r
Slide 24: ASEAN: growth outlook for key markets remains attractive
ASEAN: growth outlook for key markets remains attractive For personal use only • Strategic initiatives: ¾ Improved feed sourcing ASEAN Underlying EBIT A$m ¾ Revised distribution and pricing strategies ¾ Significant cost reductions – operations profitable at lower volumes 87 89 80 • Improved executio
Slide 25: China: Growth on-track and construction indicators positive
China: Growth on-track and construction indicators remain positive For personal use only • One Value Chain strategy to grow downstream markets and increase pull through from Suzhou China Underlying EBIT A$m coating line 31 ¾ Leverages the significant reduction in breakeven cost of Suzhou operation 2
Slide 26: North America: driven by non-residential construction
North America: driven by non-residential construction. Indicators continue to show plenty of scope for improvement For personal use only MBMA Despatches and Architectural Billings F.W. Dodge Forecast for total U.S. non-res buildings Index (New Billings) (excludes apartments, hotels, motels and dormi
Slide 27: Broader building and construction focus supported by mega trends
Developing a broader building and construction focus supported by “emerging mega trends” For personal use only Urbanisation & • Rapid urbanisation in emerging increased and frontier economies mobility ¾Efficient design – doing more with less ¾Rapid construction • Emergence of the middle class techni
Slide 28: Globally our focus is primarily on building products and solutions
Globally our focus is primarily on building products and solutions For personal use only China 1% Coated & Building NA North Star USA 10% 20% 99% ASEAN 35% 10% 35% 100% 90% Australia New Zealand 14% 25% 9% 37% Building & construction 15% 62% Manufacturing 38% Auto Ag & mining Page 27
Slide 29: Capabilities fit large, developing steel building and construction markets
Our capabilities fit well in large, developing steel building and construction markets both within and outside of our current footprint (eg Sth America) For personal use only Regional Construction Markets Contribution to GDP of Construction Sector(1) Total Construction Market Gross Output(2) (US$bn’
Slide 30: Grow participation in building and construction markets globally
We will grow participation in building and construction markets globally with premium sustainable steel products and solutions For personal use only • Expand our portfolio of products and solutions with focus on construction and energy efficiency including: ¾ Pre-engineered buildings: − Leverage exi
Slide 31: Maximum asset utilisation and structural cost reductions
We continue to pursue maximum asset utilisation and structural cost reductions, and continuing to increase the visibility of performance targets for our businesses For personal use only • Objective is low cost manufacturing assets with maximum utilisation: ¾ Low conversion costs – positioned at the
Slide 32: Financial Results
For personal use only Financial Results Page 31
Slide 33: Historical earnings performance
Historical earnings performance For personal use only A$ Millions FY2006 FY2007 FY2008(3) FY2009 FY2010 1H FY10 2H FY10 Revenue (1) 8,031 8,913 10,495 10,329 8,624 4,103 4,521 EBITDA (2) 850 1,423 1,420 380 590 154 436 EBIT (2) – Reported 556 1,099 1,063 15 240 (23) 263 – Underlying (4) 840 1,057 1,
Slide 34: Underlying EBIT variance FY2009 to FY2010 by major item
Underlying EBIT variance FY2009 to FY2010 by major item For personal use only 500 $465m Net Spread Reduction ($368M) $255m $171m ($123m) ($4m) 0 $ 119m $1,475m ($25m) $20m Underlying EBIT A$ Millions -500 ($326m) Conversion & Other Costs: Raw Materials: Favourable costs across all segments. Coal 6
Slide 35: Underlying EBIT variance 1H FY2010 to 2H FY2010
Underlying EBIT variance 1H FY2010 to 2H FY2010 For personal use only 300 $14m $277m $31m ($4m) 250 Net Spread Improvement $221m $32m $14m Underlying EBIT A$ Millions $7m 200 $208m $6m ($9m) Conversion & Other Costs: Cost improvement initiatives(2) 6 150 Volume 92 Escalation (47) One-off / discret
Slide 36: Export mix from Australia – improved HRC/Slab mix in 2H FY2010
Export mix from Australia – improved HRC/Slab mix in 2H FY2010 For personal use only Coated & Industrial Products Aust Export Despatch Mix to BSL External Customers (kt) 1,262 1,096 378 1,005 926 462 Slab 429 755 296 692 650 485 141 301 393 375 390 399 HRC 384 33 325 250 161 23 28 43 Plate 31 366 17
Slide 37: Fixed cost and overhead reductions
Fixed cost and overhead reductions: … delivered $340M cumulative permanent reduction in the cost base (vs. FY2008) For personal use only y $295M reduction in the cost base for nine months in FY2009 ¾ $132M permanent savings ¾ $163M temporary savings y Continued to work on sustainable long term struc
Slide 38: Cost initiatives delivered across all classes of cost
Cost initiatives delivered across all classes of cost For personal use only $526M FY2010 Savings - Permanent vs Cost Categories and Examples of $526M FY2010 Temporary Split Savings Manufacturing production optimisation ie sinter gas Reduced travel, consumption reduction; consultants, marketing Procu
Slide 39: Divisional categorisation of FY2010 cost saving initiatives
Divisional categorisation of FY2010 cost saving initiatives For personal use only Divisional Split of Total $526M FY2010 Savings Divisional Split of $208M FY2010 Permanent Savings Coated & Industrial Coated & Industrial Products Australia Products Australia 51% 49% NZS 7% NZS 6% Corporate 5% Corpora
Slide 40: Cashflow
Cashflow For personal use only 2H improvement predominantly driven A$ millions FY2007 FY2008 FY2009 FY2010 1H FY2010 2H FY2010 by spread improvement Cash from operations 1,364 1,579 534 596 144 452 Increase driven by Working capital movement (21) 69 250 (133) 108 (241) higher selling prices Net oper
Slide 41: Balance Sheet – conservative stance maintained
Balance Sheet ….conservative stance maintained As at For personal use only A$ Millions 30 June 2009 31 December 2009 30 June 2010 Assets See previous slide Cash 369 215 251 Higher on improved Receivables 1,013 959 1,199 volumes and higher year end selling prices Inventory 1,702 1,587 1,829 Higher to
Slide 42: Balance Sheet – increase in inventory since Dec-2009
Balance Sheet … $242M increase in inventory since Dec-2009 on increased volumes For personal use only 3000 $2,815m 2500 2000 $47m $26m $1,829m $1,702m $185m $1,660m $1,587m 1500 ($16m) 1000 500 0 June 2008 Dec 2008 June 2009 Dec 2009 Rate / Feed Volume FX NRV adjustment June 2010 Costs movement Volu
Slide 43: Balance Sheet – maintaining conservative gearing
Balance Sheet …maintaining conservative gearing For personal use only y Gearing at 11.4% (ND/ND+E) y Net debt at 30 June 2010 of $743M, comprised of $994M of drawn debt less $251M cash y 30 June 2010 total undrawn facilities and cash of A$1,620M vs. A$1,631M 31 December 2009 Net Debt ($M) 1200 11.8%
Slide 44: Debt Facilities and Maturity Profile as at August 2010
Debt Facilities and Maturity Profile as at August 2010 …no material refinancing obligation due until July 2011 For personal use only Cost of Debt A$M y Current average cost of drawn debt 7.5% 1,200 y Plus: 1,000 ¾commitment fees on 800 undrawn loan note facilities approx 2.25% pa 600 1,075 ¾other re
Slide 45: EBIT sensitivity to export HRC price, raw materials and FX
EBIT is sensitive to realised export HRC price, raw material costs and foreign exchange movement For personal use only Estimated impact on EBIT A$m Assumption FY 2011 (1) (indicative) +/– US$25 / tonne movement in BlueScope’s average realised export HRC price(2) 86 +/– 1¢ movement in Australian doll
Slide 46: Outlook
For personal use only Outlook Page 45
Slide 47: Outlook
Outlook For personal use only In first half FY2011 • we expect: ¾ continued strong performance from our Asian businesses, and ¾ the ongoing benefit of permanent cost reductions • But in first quarter we currently see: ¾ significant spread contraction (lower steel prices and higher raw material costs
Slide 48: Summary
Summary For personal use only • Continued safety focus on zero harm • Very good sustained turnaround in our Asian businesses • Good achievement on cost reductions gives outstanding leverage to demand and spread recovery • We are operating effectively in large, high growth developing markets • Good g
Slide 49: Questions & Answers
For personal use only Questions & Answers Page 48
Slide 50: FY2010 Results Presentation
For personal use only FY2010 Results Presentation Period Ended 30 June 2010 Paul O’Malley, Managing Director and Chief Executive Officer Charlie Elias, Chief Financial Officer 16 August 2010 ASX Code: BSL Page 49
Slide 51: Other Supporting Information
For personal use only Other Supporting Information Page 50
Slide 52: Reporting Segments Additional Information
For personal use only Reporting Segments Additional Information Page 51
Slide 53: Reporting Segments
Reporting Segments Corporate / Group For personal use only Australia New Zealand Asia North America Coated & Australian New Zealand Coated & Hot Coated & Industrial Distribution & Pacific Steel Building Rolled Building Products & Products Products Products Products Australia Solutions Asia North Ame
Slide 54: Segment business drivers
Segment business drivers Corporate / Group For personal use only Australia New Zealand Asia North America Coated & Australian New Zealand Coated & Hot Coated & Industrial Distribution & Pacific Steel Building Rolled Building Products & Products Products Products Products Australia Solutions Asia Nor
Slide 55: Australia: Coated & Industrial Products, Distribution & Solutions
For personal use only Australia Coated & Industrial Products Distribution & Solutions Page 54
Slide 56: Coated & Industrial Products Australia – EBIT variance FY2010 vs. FY2009
Coated & Industrial Products Australia – underlying EBIT variance analysis (FY2010 vs. FY2009) For personal use only FY2009 FY2010 Slab-make 3,517kt 4,724kt Total despatches 3,481kt 4,517kt - Dom / tot split 55% 51% Underlying EBITDA $337M $305M 400 Spread reduction ($219M) $241m 200 $141m $108m $
Slide 57: Coated & Industrial Products Australia – EBIT variance 2H vs. 1H
Coated & Industrial Products Australia – underlying EBIT variance analysis (2H FY2010 vs. 1H FY2010) For personal use only 1H 2H Slab-make 2,187kt 2,537kt Total despatches 2,007kt 2,510kt - Dom / tot split 54% 49% Underlying EBITDA $21M $284M 250 Spread improvement $255M 200 $23m $6m $188m $97m 15
Slide 58: Key drivers of Coated & Industrial Products Australia result
BlueScope Steel – Key drivers of Coated & Industrial Products Australia FY2010 result For personal use only Held above or around US$1,000/t through August, then declined to around US$500/t by December Moved down to circa US$400/t in May and recovered back to US$500/t by end of May 1H 2009 2H 2009 1H
Slide 59: Coated & Industrial Products Australia – Despatch Mix
Coated & Industrial Products Australia – Despatch Mix For personal use only Smorgon Distribution IMSA consolidated from Feb consolidated from Aug 2008. Internal despatches 2007 – increases internal increase and external Chart shows despatch volume, kt despatches, decreases despatches decrease due to
Slide 60: PKSW – Production & Despatch Flow
PKSW – Production & Despatch Flow For personal use only Port Kembla Steelworks Slab Domestic Slab Production 1,678 1,098 21 0 FY 2010 FY 2009 4,724 3,517 Export 672 302 Inventory movements Interco Western Port (2) & yield losses 985 796 Hot Strip HRC Domestic Mill Port Kembla Steelworks 2,648 2,075
Slide 61: Coated Australia – Annual Capacities
Coated Australia – Annual Capacities For personal use only Western Hot Strip Mill HRC Port 1,400 Pickle Line HRC 1,100 Slab Cold Mill CRC 1,000 Port Kembla Metal Coating Lines Metal Coated 830 Strip Steelworks Paint Lines Painted Strip 330 HRC Springhill Coupled Pickled Cold Mill CRC 990 Metal Coati
Slide 62: Port Kembla Steelworks – despatches by half year
Port Kembla Steelworks – despatches by half year For personal use only 3000 2,600 2,609 2,608 2,602 2,118 1,348 2,081 2,555 2500 20% 28% 30% 32% 32% 2000 13% 18% 26% (ktonnes) 20% 16% 1500 21% 18% 18% 16% 36% 1000 12% 49% 50% 50% 62% 67% 52% 58% 56% 500 0 FY07-1H FY07-2H FY08-1H FY08-2H FY09-1H FY09
Slide 63: Port Kembla Steelworks productivity
Port Kembla Steelworks productivity For personal use only Productivity (Crude Steel Output, Tonnes/Employee/Year) Employees Productivity (Tonnes per person per year) 6,000 2,000 1,750 1,500 Employee Numbers 4,000 1,250 1,000 2,000 750 500 250 0 * 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 F
Slide 64: Port Kembla Steelworks – cost profile
Port Kembla Steelworks – cost profile For personal use only Total cost A$m Raw Materials Desp & Freight Conv Costs S&A FY2006 FY2007 FY2008 FY2009 FY2010 Notes: (1) Chart shows cost of despatches (2) Conversion costs include depreciation (3) Raw material includes iron ore, coal, scrap and alloys but
Slide 65: Consumption of primary raw materials at Port Kembla Steelworks
Consumption of primary raw materials at Port Kembla Steelworks For personal use only Volume consumed in production (dry mt) Indicative use rate FY2008 FY2009 FY2010 per slab tonne Iron Ore Reflects mix shift Fines 4.0 2.9 4.0 0.97t from sinter plant Lump 1.6 1.0 1.5 0.31t upgrade (+1.1mtpa fines, Pe
Slide 66: Supply and pricing of iron ore to Port Kembla Steelworks
Supply and pricing of iron ore to the Port Kembla Steelworks For personal use only Supplier Term Volume (p/a) Pricing Basis Simplified price proxy for forward modelling Analyst forecasts / index futures for the relevant 10 years from 0.73mt fines Trailing monthly index with period, adjusted for frei
Slide 67: Iron ore indexes
Iron ore indexes For personal use only • Platts, Metal Bulletin and The Steel Index publish relevant indexes. Index levels amongst these three have so far been quite homogenous • Forward prices are available from SGX (Singapore Exchange) and some financial institutions 200 Metal Bulletin (62% Fe, CF
Slide 68: Coal sourcing arrangements
Coal sourcing arrangements For personal use only • Coking coal ¾ Principally sourced from local BHP Billiton Illawarra mines ¾ 30 year BHP Billiton contract from July 2002 ¾ Pricing reflects average price paid by all long term customers of BHP Billiton Australian mines and, in FY2010, the coal price
Slide 69: Global iron ore fines, coking coal and semi soft coal benchmark prices
Global iron ore fines, coking coal and semi soft coal benchmark prices For personal use only 2002 2003 2004 2005 2006 2007 2008 2009 2010 Iron Ore Fines $17.97 $17.54 $19.12 $22.68 $38.88 $46.27 $50.66 $91.14 $61.061 US$/dmt % change 4.3% -2.4% 9.0% 18.6% 71.5% 19.0% 9.5% 79.9% -33% Hard Coking Coal
Slide 70: 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). US$/t Asian HRC Benchmark Price SBB HRC East Asi
Slide 71: Port Kembla Steelworks – Sinter Plant Upgrade
Port Kembla Steelworks – Sinter Plant Upgrade For personal use only y Sinter Plant re-commissioned 29 June 09 y Increased sinter production capacity by 1.1mtpa to 6.6mtpa y Total capital cost approx. $142m v $134m budget largely due to difficulties with installation of the first precipitator y Plann
Slide 72: What is sinter?
What is sinter? For personal use only FINE ORES Blended and Fluxed in Sinter Machine to Produce Sinter PELLETS LUMP ORES Pellets Sinter Lump PREPARED BURDENS BLAST FURNACE Page 71
Slide 73: Australian Distribution & Solutions – EBIT variance FY2010 vs. FY2009
Australian Distribution & Solutions – underlying EBIT variance analysis (FY2010 vs. FY2009) For personal use only FY2009 FY2010 Total despatches 764kt 765kt Underlying EBIT margin 0.4% 0.1% Spread reduction ($43M) Underlying EBITDA $40M $32M 50 $9m $33m $2m 0 $267m $3m -50 -100 EBIT A$M -150 -200
Slide 74: Australian Distribution & Solutions – EBIT variance 2H vs. 1H
Australian Distribution & Solutions – underlying EBIT variance analysis (2H FY2010 vs. 1H FY2010) For personal use only 1H 2H Total despatches 382kt 383kt Underlying EBIT margin +0.3% -0.1% Underlying EBITDA $18M $15M 20 Spread improvement $1M 10 $46m $1m $3m EBIT A$M 0 ($6m) ($1m) -10 -20 -30 -40
Slide 75: Australia Distribution & Solutions
Australia Distribution & Solutions For personal use only The Distribution and Solutions division brings together BlueScope Steel’s Australian-based downstream businesses Emerging Sheet Metal Supplies Sheet & Coil Business y Plate Processing y Residential and y Roofing Services y Tube Commercial y Ho
Slide 76: Australia Distribution and Solutions – Overview
Australia Distribution and Solutions – Overview For personal use only Darwin KEY Lysaght Cairns Sheet & Coil Mareeba Processing Services Sheet Metal Supplies Townsville Bluescope Distribution Charters Towers Mount Isa Bluescope Water Mackay Rockhampton Emerald Gladstone Bundaberg Archerfield Acacia
Slide 77: New Zealand & Pacific Islands
For personal use only New Zealand & Pacific Islands Page 76
Slide 78: New Zealand and Pacific Steel Products – EBIT variance FY2010 vs. FY2009
New Zealand and Pacific Steel Products – underlying EBIT variance analysis (FY2010 vs. FY2009) For personal use only FY2009 FY2010 Slab-make 543kt 577kt Total despatches 514kt 506kt - Dom / tot split 47% 52% Underlying EBITDA $117M $107M 100 $44m Spread reduction ($67M) Conversion & Other Costs: 9
Slide 79: New Zealand and Pacific Steel Products – EBIT variance 2H vs. 1H
New Zealand and Pacific Steel Products – underlying EBIT variance analysis (2H FY2010 vs. 1H FY2010) For personal use only 1H 2H Slab-make 262kt 315kt Total despatches 219kt 287kt - Dom / tot split 56% 50% Underlying EBITDA $38M $69M 60 $3m $52m $10m 50 ($1m) Spread improvement $4M $2m 40 $12m $14
Slide 80: New Zealand - unique direct reduction process
New Zealand - unique direct reduction process For personal use only Page 79
Slide 81: New Zealand – raw materials
New Zealand – raw materials For personal use only Iron Sand Concentrate (Waikato North Head Mine) y Iron sand mined and concentrated on site - 58.5% Fe y 13mt of contained product in probable reserves and 13mt of contained product in proven reserves y Additional 591mt of inferred resource y Concentr
Slide 82: New Zealand Steel – FY 2010 product flow
New Zealand Steel – FY 2010 product flow Mine Sites For personal use only Iron Sands Export 0.93mt 1.94mt NZS Slab 0.58 HRC 29% Domestic 8% mt Export 36% Export Vanadium Interco (Export) 56% Slag 11.7kt Plate 12% Domestic 47% Export 53% Pipe 4% Domestic 100% Cold Mill 54% Domestic 10% Export 8% Inte
Slide 83: New Zealand – FY2010 product distribution
New Zealand – FY2010 product distribution (external and internal) For personal use only Indicative Product Mix (t) Indicative Sales by Country (t) Painted Other 9% Asia 1% Australia 10% Pacific 13% Japan Cold Rolled Metal Coated Islands 5% 12% 33% 7% Pipe 4% USA/Canada 16% Indicative Sales by Sector
Slide 84: New Zealand – FY2010 Non steel revenue streams
New Zealand – FY2010 Non steel revenue streams For personal use only Iron Sand y Iron sands exports from Taharoa of 927kt in FY2010, an increase of 33% on FY2009. y The increase over FY2009 relates to a scheduled dry dock for the slurry vessel in FY2009. Ferrous Scrap y Volumes: FY2010 52kt vs. FY20
Slide 85: Asia: Coated & Building Products Asia
For personal use only Asia Coated & Building Products Asia Page 84
Slide 86: Coated & Building Products Asia – EBIT variance FY2010 vs. FY2009
Coated & Building Products Asia – underlying EBIT variance analysis (FY2010 vs. FY2009) For personal use only FY2009 FY2010 Total despatches 826kt 978kt Underlying EBIT margin -1.4% +8.6% Underlying EBITDA $28M $157M 200 $41m 150 Spread improvement $101M $25m $116m 100 ($26m) $306m ($4m) 50 Exchan
Slide 87: Coated & Building Products Asia – EBIT variance 2H vs. 1H
Coated & Building Products Asia – underlying EBIT variance analysis (2H FY2010 vs. 1H FY2010) For personal use only 1H 2H Total despatches 454kt 524kt Underlying EBIT margin 7.9% 9.2% Underlying EBITDA $71M $86M Spread reduction ($9M) 80 $15m 70 $3m $9m $66m 60 $16m ($3m) $6m $50m EBIT A$M 50 40 (
Slide 88: North America: Hot Rolled Products, Coated & Building Products
For personal use only North America Hot Rolled Products Coated & Building Products Page 87
Slide 89: Coated & Building Products North America – EBIT variance FY2010 vs. FY2009
Coated & Building Products North America – underlying EBIT variance analysis (FY2010 vs. FY2009) For personal use only 250 150 Net Margin Increase $94m $78m Net Spread Increase $16m EBIT A$M 50 $9m $344m $6m ($108m) ($12m) ($5m) ($16m) -50 FY2009 FY2010 Total despatches 572kt 535kt -150 Underlyi
Slide 90: Coated & Building Products North America – EBIT variance 2H vs. 1H
Coated & Building Products North America – underlying EBIT variance analysis (2H FY2010 vs. 1H FY2010) For personal use only 100 Net Margin Decrease ($27m) 1H 2H Total despatches 278kt 257kt 75 Underlying EBIT margin 1.6% -4.4% Net Spread Decrease ($29m) Underlying EBITDA $34M $(6)M 50 $25m 25 $
Slide 91: Other
For personal use only Other Page 90
Slide 92: BluePrint review priorities of November 2007
In November 2007, “We prioritised several areas of focus through the BluePrint review of November 2007” For personal use only y Reinvigorate our position in the Australian/NZ markets, through ongoing focus on strengthening our customer relationships, product and service innovation and driving operat
Slide 93: BlueScope Steel's global footprint and capacities as at June 2010
BlueScope Steel’s global footprint and capacities as at 30 June 2010 For personal use only North Star (2) Kalama • Raw Steel 2.0mt • Cold Rolling 455kt • Metal Coating 235kt • Hot Rolling 2.0mt India(1) • Painting 110kt • Metal Coating (+250kt) North America • Painting (+150kt) • Butler/VP PEB sites
Slide 94: BlueScope Steel China footprint
BlueScope Steel China footprint For personal use only FY2010 REVENUE: A$503M EBITDA: A$ 41M EBITDA – Underlying: A$ 41M EMPLOYEES: 2,078 NET OPERATING ASSETS (PRE-TAX): A$121M SUZHOU BlueScope Steel in China 1 Metal Coating/Painting Line Facility 4 Lysaght Manufacturing Facilities 3 Butler PEB Manuf
Slide 95: BlueScope Steel North America footprint FY2010
BlueScope Steel North America footprint FY2010 REVENUE: A$1,307M EBITDA (reported): A$84M EMPLOYEES: 3,581 incl. North Star For personal use only NET OPERATING ASSETS (PRE-TAX): A$978M NB: Revenue excludes BSL’s 50% interest in North Star BlueScope Steel of A$626M. HQ Key ASC Metl-Span ASC Steelscap
Slide 96: Calendar year earnings
Calendar year earnings For personal use only A$ Millions CY2003 CY2004(3) CY2005 CY2006 CY2007 CY2008(4) CY2009 Revenue(1) 5,328 7,029 7,980 8,693 9,333 11,926 8,283 EBITDA(2) 857 1,501 1,411 1,052 1,130 1,775 (324) EBIT(2) - reported 581 1,212 1,111 742 792 1,399 (673) - operational - - 1,308 966 9
Slide 97: Reported Corporate and Group Costs
Reported Corporate and Group Costs – impacted each half by profit in stock elimination and foreign exchange movements For personal use only A$M 50 30 6 -9 -3 0 1H 2008 2H 2008 FY 2008 1H 2009 2H 2009 FY 2009 1H 2010 2H 2010 FY 2010 -50 -41 -49 -100 -90 -106 -150 -136 Comprised of: Corporate costs (5
Slide 98: Major approved capital projects and investment summary
Major approved capital projects and investment summary (in addition “Stay in Business” capital is approx. 75% of depreciation) For personal use only PROJECTS Total Est. Actual to FY2011 FY2012 FY2013 All in $Am Capex / Cost FY2010 Projects completed Thailand – Coating expansion 80 80 - - - Vietnam –
Slide 99: Zinc and Aluminium Usage
Zinc and Aluminium Usage For personal use only Tonnes Zinc Aluminium FY2010 FY2009 FY2010 FY2009 AUSTRALIA Springhill 21,403 17,911 10,101 9,537 Western Port 18,578 15,827 9,544 8,758 Sub-total 39,981 33,738 19,645 18,295 NEW ZEALAND 6,462 6,679 3,578 3,206 ASIA 12,776 10,744 13,593 11,563 TOTAL 59,
Slide 100: Committed Debt Facilities as at June 2010
Committed Debt Facilities as at 30 June 2010 For personal use only Committed Debt Facilities as at 30 June 2010 Maturity Committed Drawn US$m/THBm A$m A$m Syndicated Loan Note Facility Tranche 1 Jul-11 200 12 Tranche 2 Jul-12 1,075 - 2004 US Private Placement Notes Series A Jul-11 US$100 118 118 Ser
Slide 101: Shares on issue – no material change during FY2010
Shares on issue – no material change during FY2010 For personal use only Million (rounded) y Shares on issue at listing, July 2002 793 y Share buy-backs (116) y Dividend reinvestment scheme issues +67 y Employee share plan issues +34 y Institutional share placement, Dec 2008 +97 y Share purchase pla
Slide 102: Greenhouse gas policy principles – context
Greenhouse gas policy principles – context For personal use only • BlueScope Steel strives to continually improve its environmental footprint. We are committed to reducing the greenhouse gas intensity of our operations. BlueScope Steel is also playing an active and ongoing role in the global steel i
Slide 103: Greenhouse gas policy principles
Greenhouse gas policy principles For personal use only 1. Reducing greenhouse gas emissions is a global problem that requires a global approach. 2. Australia should adopt policy that achieves emissions targets at least cost. Putting a price on carbon which is visible to consumers and producers, thro
Slide 104: New Zealand Emissions Trading Scheme
New Zealand Emissions Trading Scheme For personal use only • New Zealand Steel is included in the New Zealand Emissions Trading Scheme from 1 July 2010. The Scheme's operation is broadly comparable to that of the deferred Carbon Pollution Reduction Scheme (CPRS) which the Australian Government sough
Slide 105: FY2010 Results Presentation
For personal use only FY2010 Results Presentation Period Ended 30 June 2010 Paul O’Malley, Managing Director and Chief Executive Officer Charlie Elias, Chief Financial Officer 16 August 2010 ASX Code: BSL Page 104