Slide 1: 1Q 2005 Performance
1Q 2005 Performance April 12, 2005 POSCO will pave the way for the future of the steel industry through the cost competitive and environment-friendly FINEX technology
Slide 2: Unaudited financial statements notice
Figures provided in this presentation are based on unaudited financial statements of the Company for the first quarter of 2005 and have been prepared solely for the convenience of investors. Certain contents in this presentation are subject to change during the course of auditing process. The financ
Slide 3: Table of Contents
Table of Contents I. 1Q05 Operating Results II. Steel Industry Trends III. Key Management Activities IV. 2005 Business Plan
Slide 4: Production/Sales
Production/Sales (Unit: Thou. Tons,%) Category Category 2004 2004 1Q05 Category Category 1Q04 4Q04 1Q05 YoY QoQ Molten Steel Molten Steel 6,757 7,004 6,675 ^1.2 ^4.7 Crude Steel Crude Steel 7,316 7,811 7,593 3.8 ^2.8 Products Products 7,255 7,477 7,436 2.5 ^0.5 Sales Volume Sales Volume 7,194 7,506
Slide 5: Sales by Product
Sales by Product (Unit: Thou. tons,%) Category 2004 2004 2005 1Q Category 1Q 4Q 2005 1Q YoY QoQ HR 2,598 2,579 2,290 ^11.8 ^11.2 Plates 804 917 873 8.6 ^4.8 Wire rods 508 516 519 2.2 0.6 CR 2,356 2,510 2,666 13.1 6.2 Electric Sheets 190 170 194 2.1 14.1 Stainless Steel 493 488 517 4.9 5.9 Others 245
Slide 6: Financial Performance
Financial Performance (Unit: KRW bn, %) Items Items 2004 2004 1Q05 Items Items 1Q04 4Q04 1Q05 YoY (%) QoQ (%) Sales Revenue Sales Revenue 4,285 5,609 5,656 32.0 0.8 COGS COGS 3,027 3,723 3,613 19.4 ^3.0 Operating Profit Operating Profit 1,008 1,614 1,776 76.2 10.0 OP Margin 23.5 28.8 31.4 - - Net Pr
Slide 7: Capital Structure
Capital Structure (Unit: KRW bn.) Items Items 2004 2004 1Q05 Items Items 1Q 4Q 1Q05 Total Assets Total Assets 18,566 21,367 21,713 Current Assets Fixed Assets 5,489 13,077 7,742 13,625 8,003 13,710 Total Liabilities Total Liabilities 5,214 5, 257 5,110 Borrowings 3,210 2,497 2,369 Shareholder's Equi
Slide 8: Operating Margin and Key Ratios
Operating Margin (%) 23.5 24.2 31.4 1Q04 2Q 3Q 4Q 1Q05 32.0 30.9 37.8 EBITDA Margin (%) Key Ratios & Indices 25.0 28.8 32.7 35.4 Share Price (KRW) 1Q04 2Q 3Q 4Q 1Q05 162,000 171,500 149,000 187,000 (Quarterly End Share Price) 1Q04 2Q 3Q 4Q 1Q05 Debt Ratio (%) 1Q04 2Q 3Q 4Q 1Q05 39.1 31.9 30.8 36.5 3
Slide 9: Table of Contents
Table of Contents I. 1Q05 Operating Results II. Steel Industry Trends III. Key Management Activities IV. 2005 Business Plan
Slide 10: Macro: Favorable climate continues, tight steel supply/demand
Macro: Favorable climate continues, led by tight steel supply/demand Global Steel Industry '01 '02 '03 '04 '05(F) YoY growth (Unit: mn tons) Steel Demand (WSD/ March, '05) 896 788 838 0.3% 6.4% 6.9% 8.0% 968 7.1% 1,037 < Apparent Consumption of Steel Worldwide > 7.1% Demand : Stable global economy &
Slide 11: Steel price trends by region
Weaker price from rising inventory stemming from growing imports since 2H04 · HR price : $689(Jan) ^ 639(Mar) - Weaker prices, despite flat steel price hike in April (e.g.,+$20 by Nucor) Expect price recovery towards end-2Q05, as regional mills reduce output while imports slow ? Price strength conti
Slide 12: China Steel Supply/Demand Forecast
? China Steel Supply/Demand Forecast China Steel Industry Autos : Production forecasted to rise 15% yoy on growing demand ? Appliances : Sustained growth behind new demand in intra-continent regions as well as replacement demand Shipbuilding : Record-high new orders & production currently being post
Slide 13: China Steel Industry Trends
19.9 21.7 3.1 1.3 Prdn. Cons. Import Export 51.5 52.1 3.7 4.3 Prdn. Cons. Import Export (Unit: mn tons) <Jan. ~ Feb., 2005 China Steel Industry Trends> June, '04 Sep, '04 Dec., '04 Feb., '05 April, '05 HRC CRC ^ 423 535 ^ ^ 480 592 ^ ^ 518 669 ^ 749 ^ 771 ^ ^ 533 ^ 563 ? Net import maintained on fla
Slide 14: Domestic Steel Industry
2005 GDP growth of 4% forecasted, on delayed domestic consumption and slowing export growth Domestic Steel Industry GDP growth : 4.6% ('04) ^ 4.2% ('05) 14.7 '04 '05 Shipbuilding 9.3 1.1 '04 '05 13.8 4.4 '04 '05 Automobile Appliances 2.5 '04 '05(F) Construction (POSRI '05.4) < 2005 Domestic Producti
Slide 15: Raw Materials
Raw Materials ? Supply shortage continues due to China's surging demand for steel feedstocks ? Upward pressure in raw materials prices amidst oligopolistic industry structure and capacity constraints < China's raw material import forecast > < Trend in raw materials prices > '03 '05(F) '08(F) '10(F)
Slide 16: Table of Contents
Table of Contents I. 1Q05 Operating Results II. Steel Industry Trends III. Key Management Activities IV. 2005 Business Plan
Slide 17: Key Management Activities
Key Management Activities 500 500 6,000 (120%) 3,500 (70%) 2,500 (50%) 2001 2002 2003 2004 8,000 (160%) 1,500 1,000 < DPS Trend by Year > The 37th AGM Cumulative voting and paper voting system introduced Dividend per share of KRW 8,000 Share Buyback 2005 Buyback : 1.74mn shares Period : Feb., 7 ~ Ma
Slide 18: Progress of Major Investment Projects
Capacity Expansion for STS HRC in Zhangjiagang Completion of STS CRC Plant in Qingdao ? STS Capacity: 600k tons/yr ? Benefits: Expansion of STS HRC supply to China ? Timetable : Jan., '05 ~ Aug., '06 ? Progress : Laid foundation, design/ manufacturing of machinery ordered STS CRC Capacity: 180k tons
Slide 19: FINEX Plant and Strip Casting Construction
FINEX #1 Plant Construction STS Strip Casting Demo Plant Construction ? 1.5 mn tpa capacity ? Benefits: ? Lower capex · Bypassing coking & sintering processes ? Raw material cost reduction ? Reduction of pollutants ? Time table: - Aug., '04: Ground-breaking - Apr., '05: Machinery installations - Jun
Slide 20: CGL, LNG Terminal and BF Refurbishment
Construction of #5, #6 CGL Construction of LNG Terminals ? Annual capacity: 450k tons (#5) 400k tons (#6) ? Benefits ? Capacity of 5mn tpa for automotive sheets by 2007 ? Supply domestic/overseas auto steel demand ? Completion rate - #5 CGL : 94% (~Aug., '05) - #6 CGL : 40% (~Jun., '06) < #5 CGL Pla
Slide 21: Table of Contents
Table of Contents I. 1Q05 Operating Results II. Steel Industry III. Key Management Activities IV. 2005 Business Plan
Slide 22: 2005 Business Plan
2005 Business Plan (Unit: mn tons, KRW bn.) 2004 YoY Chg (%) 30.2 3.6 29.2 4.1 19,792 20.8 31.3 30.4 23,900 2005 (F) Production Sales Volume Revenue Above data represents company's internal financial targets and may be subject to change and should not be used for making investment decisions 2,277 79