Bluescope Steel Limited · ASX:BSL
Bluescope Steel — Investor Presentation (May 2008)
32 slides from Bluescope Steel's investor presentation, May 12, 2008
Slide 1: Market Update: Revisions to external reporting segments
For personal use only Market Update Revisions to external reporting segments Paul O’Malley, Managing Director and Chief Executive Officer Charlie Elias, Chief Financial Officer 12 May 2008 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: Matters to be covered
Matters to be covered For personal use only FY 2008 market update ¾ focus on second half by current reporting segments ¾ general comments on FY 2009 and 2010 New external reporting segments Funding “Blueprint” update Wrap-up. Page 3
Slide 4: FY 2008 Market Update (Current Reporting Segments)
For personal use only FY 2008 Market Update (Current Reporting Segments) Page 4
Slide 5: External reporting business segments were not changed for 1H FY2008 results
External reporting business segments were not changed for 1H FY2008 results Corporate / Group For personal use only Australia New Zealand Asia North America Hot Rolled Coated & New Zealand & Coated & Hot Rolled Coated & Building Products Building Pacific Islands Building Products Products Australia
Slide 6: BlueScope Steel – Underlying Consolidated NPAT
BlueScope Steel – Underlying Consolidated Net Profit After Tax (NPAT) Second Half FY2008 For personal use only ― Strong earnings improvement on 2008 – 1H Underlying NPAT largely due to higher global steel prices, 500 HOWEVER the underlying EBIT segment guidance provided in the following slides is
Slide 7: Hot Rolled Products Australia (current segment)
Hot Rolled Products Australia (current segment) For personal use only Second Half FY2008 Underlying EBIT ― Improvement driven by higher global steel prices 500 ― Approx 90% iron ore contracts and 100% 414 coal contracts priced off 1 July – 30 June. 400 354 Balance off 1 April year 313 ― Q4 EBIT cu
Slide 8: HRC and slab benchmark prices
Hot Rolled Products Australia (cont) - HRC and slab benchmark prices For personal use only Market slab and hot rolled coil price movements in Asia since start FY 2008. Comments: HRC and SLAB Benchmark Prices ― Indicative trend. SBB East Asia Import US$/Tonne cfr ― Do not represent BSL’s 1,100 real
Slide 9: Hot Rolled Products Australia (cont)
Hot Rolled Products Australia (cont)… For personal use only Analyst site visit this Thursday & Friday in Port Kembla Covering ― Port Kembla Steel Works ― Springhill coated and Western Sydney Presentation Continuation of increasing disclosure, including additional information on ― BF No. 5 Re
Slide 10: Coated & Building Products Australia (current segment)
Coated & Building Products Australia (current segment) For personal use only Underlying EBIT 60 50 Second Half FY2008 45 ― Higher feed costs, particularly in Q4, will 38 be challenging 32 (E) 30 ― BlueScope Distribution – increased sales EBIT A$ Millions and prices vs FY 2008 1H 15 ― FY 2008 2H EB
Slide 11: New Zealand and Pacific Steel Products
New Zealand and Pacific Steel Products For personal use only Underlying EBIT Second Half FY 2008 60 ― Q3 affected by scheduled half yearly kiln 47 shut. 50 43 ― Domestic demand flat 40 36 ― Export market strong EBIT A$ Millions 30 ― Improved vanadium prices – Av. 1H (E) 2008 US$7.37/lb vs Av. Janu
Slide 12: Coated and Building Products Asia
Coated and Building Products Asia For personal use only Second Half FY2008 Underlying EBIT ― Stronger second half vs 1H largely driven by: 50 ¾ improved economic conditions in Thailand 39 40 ¾ Indonesia and Malaysia expected to 30 show modest earnings improvement 30 over 1H EBIT A$ Millions (E) 21
Slide 13: Hot Rolled Products North America
Hot Rolled Products North America For personal use only Second Half FY2008 Underlying EBIT ―Improved spread driven by higher 120 112 prices partly offset by increased scrap 100 prices 80 ―BUT also seeing higher electricity and 68 alloy costs vs 1H EBIT A$ Millions 60 47 ―Q4 EBIT currently expected
Slide 14: Coated and Building Products North America
Coated and Building Products North America Second Half FY2008 For personal use only ― Butler – seasonality (weather) typically dampens performance in 3Q Underlying EBIT 60 ¾ Margins maintained despite higher feed costs in Q4 50 ― Recently acquired IMSA assets, in particular 40 38 Steelscape, are e
Slide 15: Consolidated FY 2009 and beyond
Consolidated FY 2009 and beyond For personal use only FY 2009 – 1H FY 2010 ―If current steel prices hold then good start to ―Annual cost and volume benefits from reline FY2009 and sinter plant upgrade ―Substantial increase in iron ore and coal raw ―IMSA – deliver US$40m EBITDA materials costs fr
Slide 16: New External Reporting Segments
For personal use only New External Reporting Segments These changes were highlighted during: ―The “Blueprint” presentation on November 29, 2007; ― The “Half Year Results” session in February 2008. Page 16
Slide 17: What is changing and why?
What is changing and why? For personal use only THE PRINCIPAL CHANGES ARE TO: 1. Hot Rolled Products Australia; and 2. Coated and Building Products Australia With some minor changes to Hot Rolled Products North America and Coated and Building Products Asia OUTCOME: The formation of two new segments
Slide 18: What is changing and why? (cont)
What is changing and why? (cont)… For personal use only Please refer to the Attachment to the ASX Release also issued today for ― historical production and financial data (FY 2003 to FY 2007 and first half FY2008) ― increased disclosure on our Australian product mix by major category (next slide)
Slide 19: Future Production and Despatch reports – improved disclosure
Future “Production and Despatch” reports – improved disclosure For personal use only ATTACHMENT 1 PRODUCTION AND DESPATCH REPORT 000 Tonnes 6 MTHS ENDED 6 MTHS ENDED Full Year Dec 2007 Dec 2006 VARIANCE June 2007 June 2007 AUSTRALIA Raw Steel Production 2,632 2,684 (2%) 2,623 5,307 External Despatch
Slide 20: Funding
For personal use only Funding Page 20
Slide 21: Balance Sheet – Gearing
Balance Sheet – Gearing (net debt to net debt + equity) 50 For personal use only 40% 40 35% 32% Gearing expected to 30 be within the optimal 30% gearing range 20 10 0 Dec 31 Feb 1 June 30 Why? 2007 2008 2008 ― The estimated reduction in gearing is directly related to the increased cashflow from op
Slide 22: Cash – improved cash position from operations in 2H 2008
Cash – improved cash position from operations in 2H 2008 A$ millions 2003 2005 2007 1H 2008 2H 2008 FY 2008 For personal use only Cash from operations 795 1,671 1,364 617 Working Capital Movement (31) (432) (21) (17) Net operating cash flow 764 1,239 1,343 600 Net investing cash flows - Capital & in
Slide 23: BlueScope's global debt facilities – maturity schedule
BlueScope’s global debt facilities – maturity schedule For personal use only Amount ($m) Maturity date Working Capital Facilities AUD 350 Oct-08 Loan Note Facility Tranche 1 - 364 day AUD 92 Dec-08 Tranche 2 - 3 year AUD 550 Dec-08 Tranche 3 - 5 year AUD 550 Dec-10 1,192 US Private Placement Series
Slide 24: Approach to debt refinancing
Approach to debt refinancing For personal use only Refinancing program has commenced ―assisted by strong ¾operations performance; and ¾cashflows which is reducing debt levels Maturities this calendar year are bank facilities ―long-term banking relationships remain strong ―confident of extending
Slide 25: Blueprint Update
For personal use only “Blueprint” Update Page 25
Slide 26: Blueprint update
Blueprint update For personal use only Project teams established on key initiatives across the global footprint We are making progress across a number of fronts in our supply chain On track to deliver by June 08 approx half of the $200m working capital reduction target set for June 2009 ― larg
Slide 27: Summary
Summary For personal use only FY 2008 ― 2H – strong earnings improvement on 1H largely driven by higher global steel prices ― IMSA, USA, acquisition – performance exceeding expectations ― BlueScope Distribution – good earnings recovery in 2H ― Asian performance getting traction, in particular Thai
Slide 28: Market Update: Revisions to external reporting segments
For personal use only Market Update Revisions to external reporting segments Paul O’Malley, Managing Director and Chief Executive Officer Charlie Elias, Chief Financial Officer 12 May 2008 ASX Code: BSL
Slide 29: Supporting Information
For personal use only Supporting Information
Slide 30: Coated & Industrial Products Australia – new segment
Coated & Industrial Products Australia – new segment For personal use only Underlying EBIT 500 428 397 400 338 EBIT A$ Millions 300 232(E) 200 100 0 FY07-1H FY07-2H FY08-1H Q3 Q4 FY 2008 1H 07 2H 07 1H 08 Underlying 428 338 397 Note: Reported 456 343 383 (E) Unaudited Accounts Page 30
Slide 31: Australian Distribution & Solutions – new segment
Australian Distribution & Solutions – new segment For personal use only Underlying EBIT 30 23 15 12 (E) 10 EBIT A$ Millions 0 -5 -15 FY07-1H FY07-2H FY08-1H Q3 Q4 FY 2008 1H 07 2H 07 1H 08 Underlying 10 (5) 23 Note: Reported 17 (5) (7) (E) Unaudited Accounts Page 31
Slide 32: Market Update: Revisions to external reporting segments
For personal use only Market Update Revisions to external reporting segments Paul O’Malley, Managing Director and Chief Executive Officer Charlie Elias, Chief Financial Officer 12 May 2008 ASX Code: BSL