Bluescope Steel Limited · ASX:BSL
Bluescope Steel — Investor Day (September 2021)
57 slides from Bluescope Steel's investor day presentation, Sep 20, 2021
Slide 1: BlueScope Investor Day Day 1
For personal use only BlueScope Investor Day Day 1 20 September 2021 Pictured: New lodges built along the BlueScope Steel Limited. ASX Code: BSL Three Capes Track in Tasmania featuring COLORBOND® steel ABN: 16 000 011 058 Photo: Brett Boardman Level 11, 120 Collins St, Melbourne, VIC, 3000
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: Agenda Day 1
AGENDA DAY 1 For personal use only Session 1 • BlueScope Strategy Update • Sustainability at BlueScope • Climate Change Deep Dive • Climate Change Panel Q&A Break Session 2 • Sustainability Update • Sustainability Panel Q&A 3
Slide 4: BlueScope Introduction & Strategy
For personal use only BlueScope Introduction & Strategy Mark Vassella (Managing Director and Chief Executive Officer) 4
Slide 5: Diverse and Talented Team
DIVERSE AND TALENTED TEAM Presenting over the next two days: For personal use only Mark Vassella Tania Archibald Gretta Stephens Kristie Keast Andrew Garey Pat Finan Managing Director & Chief Financial Chief Executive Climate Chief Executive People and Chief Strategy and Chief Executive Hot Rolled C
Slide 6: BlueScope: A Different Kind of Steel Company
BLUESCOPE: A DIFFERENT KIND OF STEEL COMPANY For personal use only What makes us different? 1 PURPOSE-LED AND SUSTAINABILITY FOCUSSED 2 HIGH-QUALITY ASSET PORTFOLIO 3 LEADING PRODUCT TECHNOLOGIES, BRANDING & CHANNELS 4 FINANCIAL STRENGTH & COST COMPETITIVENESS 5 DEPLOYING FINANCIAL STRENGTH FOR LONG
Slide 7: Our Bond and Purpose
Our For personal use only Bond Our Customers are our partners Our People are our strength Our Our Shareholders are our foundations Purpose Our Local Communities are our homes We create and inspire smart solutions in steel, to strengthen our communities for the future. 7
Slide 8: Purpose-led and Sustainability Focussed
1 PURPOSE-LED AND SUSTAINABILITY FOCUSSED FIVE KEY SUSTAINABILITY TOPICS For personal use only Climate action Collaborate and act to reduce our impact on shared resources, mitigate climate risks and leverage opportunities Safe and inclusive workplaces Create safe, healthy and inclusive workplaces th
Slide 9: Favourable Long Term Outlook for Steel
2 HIGH QUALITY ASSET PORTFOLIO FAVOURABLE LONG TERM OUTLOOK FOR STEEL For personal use only 1 Recognition of steel as a critical input for the transition to a clean energy future including wind turbines, solar power and transmission infrastructure 2 Ongoing consolidation and rationalisation of capac
Slide 10: Quality Assets Across Large and Growing Markets
2 HIGH QUALITY ASSET PORTFOLIO QUALITY ASSETS ACROSS LARGE AND GROWING MARKETS For personal use only • Strong operating leverage from diverse business India China ASEAN portfolio • Leader in metal coating and painting for building and construction • Iconic industrial brand position of COLORBOND® ste
Slide 11: Broad Exposure to End-Use Segments
2 HIGH QUALITY ASSET PORTFOLIO BROAD EXPOSURE TO END-USE SEGMENTS Broad exposure across geographies, largely focused on the building and construction industry For personal use only BlueScope indicative despatch volume split by region and end-use segment1 Manufacturing, Other (Exports) Agri & Other 5
Slide 12: Leading Product Technologies
3 LEADING PRODUCT TECHNOLOGIES Continued investment in research & development to maintain leadership in steel coating For personal use only and painting technologies Product Technology and Development Leadership • Advanced pre-painted and metallic coating development for building, construction and h
Slide 13: Leading Brands and Channels
3 LEADING BRANDS AND CHANNELS A portfolio of many well-known and respected names to support our premium branded positions; For personal use only clear focus on knowing our end customers and maintaining strong channels to market Brands Channels Australia ® ® Zealand New ® Asia ® ® ® ® ® America North
Slide 14: Financial Strength & Cost Competitiveness
4 FINANCIAL STRENGTH & COST COMPETITIVENESS Guided by our Financial Framework For personal use only Returns Robust Disciplined Focus Capital Structure Capital Allocation Group ROIC1 Performance (%) ~$800M NET CASH • Invest to maintain safe and reliable operations, to support 18.1% average 24.8% at 3
Slide 15: Deploying Financial Strength for Long Term Sustainable Growth and Returns
5 DEPLOYING FINANCIAL STRENGTH FOR LONG TERM SUSTAINABLE GROWTH AND RETURNS For personal use only Maintaining balance sheet capacity to secure sustainable future returns and invest in growth, whilst returning funds to shareholders 1 2 3 Investing over $1.5bn in Positioning the business Increasing sh
Slide 16: Clear Strategy
CLEAR STRATEGY For personal use only OUR PURPOSE We create and inspire smart solutions in steel, to strengthen our communities for the future OUR STRATEGY TRANSFORM GROW DELIVER DELIVER A STEP CHANGE IN GROW OUR PORTFOLIO OF DELIVER A SAFE WORKPLACE, CUSTOMER EXPERIENCE AND SUSTAINABLE STEELMAKING A
Slide 17: Sustainability at BlueScope
For personal use only Sustainability at BlueScope Tim Rodsted (Head of Sustainability) 17
Slide 18: Our Approach to Sustainability
OUR APPROACH TO SUSTAINABILITY For personal use only Sustainability is at the core of all that we do • Since BlueScope’s inception, Our Bond has guided our ‘stakeholders first’ approach – We seek to understand what is important to our people, our customers, our shareholders and our local communities
Slide 19: Collaboration is Core to Our Approach
COLLABORATION IS CORE TO OUR APPROACH BlueScope is a small part of an enormous industry, yet has relationships with major For personal use only players across the global steel value chain Why is collaboration important? • The global steel industry produces 1.6 billion tonnes annually; BlueScope prod
Slide 20: Keeping Our Stakeholders Updated
KEEPING OUR STAKEHOLDERS UPDATED We seek to provide transparent and meaningful disclosure of our approach and performance on For personal use only material sustainability topics History of BlueScope’s sustainability disclosure FY2021 Reporting Suite FY2002 FY2017 FY2021 BlueScope First report First
Slide 21: Climate Change Deep Dive
For personal use only Climate Change Deep Dive Gretta Stephens (Chief Executive Climate Change) John Nowlan (Chief Executive Australian Steel Products) Chris Page (Head of Future Technologies) Pictured: Coopworth House in Tasmania by FMD Architects featuring COLORBOND® steel Photo: Dianna Snape 21
Slide 22: BlueScope's Position on Climate Change
BLUESCOPE’S POSITION ON CLIMATE CHANGE For personal use only We acknowledge the scientific consensus on climate change and the objectives of the Paris Agreement, specifically in limiting global temperature rise this century to well below 2°C, and to pursue efforts to limit the temperature increase t
Slide 23: Climate Change Strategy
CLIMATE CHANGE STRATEGY Climate action is a key component of our corporate strategy and guides our ongoing commitment to For personal use only decarbonisation Reduce our GHG emissions in response to Create carbon-efficient and climate-resilient evolving climate science, technology solutions for our
Slide 24: Established Climate Change Team
ESTABLISHED CLIMATE CHANGE TEAM Capable and talented team lead by the Chief Executive Climate Change supports the For personal use only Board and ELT in developing and implementing BlueScope’s climate strategy Climate Change Team Climate Governance • Board incl. through the Risk & Sustainability Gre
Slide 25: Scenario Analysis and Risk Assessment
SCENARIO ANALYSIS AND RISK ASSESSMENT Scenario analysis indicates BlueScope’s business performance remains strong if low emissions iron For personal use only and steel technologies are commercially available no later than 2040-2050 • Scenario analysis allows us to test the resilience of our Scenario
Slide 26: Net Zero Goal and Decarbonisation Enablers
NET ZERO GOAL AND DECARBONISATION ENABLERS BlueScope has set the goal of net zero GHG emissions by 2050 For personal use only This goal applies to all of our global operational Scope 1 and 2 GHG emissions1, and is dependent on several enablers: Technology Hydrogen Raw material Renewable energy Polic
Slide 27: Our Short and Medium Term Targets
OUR SHORT AND MEDIUM TERM TARGETS 2030 targets now cover 98% of Group Scope 1 and 2 GHG emissions For personal use only Steelmaking target Non-steelmaking target • Target 12% improvement in Scope 1 and 2 GHG • Targeting 30% improvement in Scope 1 and 2 GHG emissions intensity by 2030 on 2018 baselin
Slide 28: Steel is an Essential Material, Critical to a Low Carbon Future
STEEL IS AN ESSENTIAL MATERIAL, CRITICAL TO A LOW CARBON FUTURE We see a strong future for steel, as it is a critical foundation for sustainable economic development For personal use only and in the transition to a low-carbon society Steel is an essential material The technology challenge Steel is u
Slide 29: Low Carbon Steelmaking Requirements
LOW CARBON STEELMAKING REQUIREMENTS For personal use only Our decarbonisation pathway analysis considers the need for: Availability of sufficient quantities of prime 1 quality scrap, which is required for scrap EAF flat steel production 2 Availability of iron ore of suitable concentration and purity
Slide 30: Sufficient Quantities of Prime Quality Scrap Required
1 SUFFICIENT QUANTITIES OF PRIME QUALITY SCRAP ARE REQUIRED FOR SCRAP EAF FLAT STEEL PRODUCTION For personal use only Why is it important? Scrap Arisings2 • Scrap for steelmaking is typically broken down between prime grades, which are generally sourced (million metric tonnes, 2020) 273 from manufac
Slide 31: Iron Ore of Suitable Concentration and Purity Required for DRI
2 IRON ORE OF SUITABLE CONCENTRATION AND PURITY IS REQUIRED FOR DRI PRODUCTION For personal use only Why is it important? • Unlike in blast furnace production, raw materials in the DRI process remain solid, meaning impurities are harder to remove Magnetite Ore Fe3O4 • EAF-quality DRI requires higher
Slide 32: Reliable and Affordable Renewable Energy is Critical
3 RELIABLE AND AFFORDABLE RENEWABLE ENERGY IS CRITICAL For personal use only Why is it important? BSL Average Cost of Electricity • Low cost reliable energy is critical to the commercial viability of iron and steelmaking (US$ per megawatt hour, 2020) technologies, particularly EAF and hydrogen DRI p
Slide 33: Low Cost Green Hydrogen Will Underpin Decarbonisation
4 LOW COST GREEN HYDROGEN WILL UNDERPIN DECARBONISATION For personal use only Why is it important? Share of Renewables • Hydrogen may replace carbon (from metallurgical coal) as a reductant in the process of transforming iron ore (Renewable % of Total Generation, 2020) to iron in DRI and as a partia
Slide 34: Our Indicative Decarbonisation Pathway
OUR INDICATIVE DECARBONISATION PATHWAY Strong future for steel in a low-carbon world; emerging and breakthrough technology, renewable For personal use only energy and supportive public policy will be key enablers • Immediate focus on optimising current Indicative iron and steelmaking decarbonisation
Slide 35: Breakthrough Technologies
BREAKTHROUGH TECHNOLOGIES Direct Reduced Iron (DRI) is the term given to a group of processes for making iron from ore. In order For personal use only to be converted into steel, DRI needs to be further processed in an EAF or Basic Oxygen Furnace Hydrogen DRI-EAF Hydrogen DRI-Melter-BOF Others • Dir
Slide 36: Port Kembla Steelworks Furnace Reline
PORT KEMBLA STEELWORKS FURNACE RELINE Investigating emissions reduction options whilst securing a reliable iron supply for Port Kembla; For personal use only reline provides optionality to switch to low-carbon technology once available • Port Kembla steelworks currently operates one Blast Furnace (5
Slide 37: Examples of Carbon Tech in the Reline
EXAMPLES OF CARBON TECH IN THE RELINE Assessing technologies to improve emissions performance of the relined 6BF For personal use only "Septum" BF top recovery turbine Valves Blast • Utilises the pressure and thermal energy of blast furnace gases as they Furnace Gas leave the furnace to generate ele
Slide 38: Work Currently Underway
WORK CURRENTLY UNDERWAY A solid pipeline of projects across the business to be assessed in pursuit of our targets and goal For personal use only Steelmaking Port Kembla, AU North Star, USA Glenbrook, NZ Sites • Increased scrap usage • Progressing analysis for • Increase scrap usage • Further sourcin
Slide 39: Climate Investment Program
CLIMATE INVESTMENT PROGRAM Near term action underpinned by five-year climate investment program of up to $150M For personal use only Five Year Climate Investment Program Initial climate investment program of up to $150M over the next five years1 Optimising current Emerging Breakthrough operating ass
Slide 40: Capital Allocation Considerations
CAPITAL ALLOCATION CONSIDERATIONS Capital Allocation Framework evolved to better integrate climate-related considerations For personal use only Capital Allocation Framework Climate capital Operating • Includes projects to support achievement of decarbonisation pathways and Asset Sales Divestments Ca
Slide 41: Climate Change Q&A Panel
For personal use only Climate Change Q&A Panel Mark Vassella (Managing Director & Chief Executive Officer) Tania Archibald (Chief Financial Officer) Gretta Stephens (Chief Executive Climate Change) John Nowlan (Chief Executive Australian Steel Products) 41
Slide 42: Sustainability Update
For personal use only Sustainability Update Kristie Keast (Chief Executive People & North American Development) Tim Rodsted (Head of Sustainability) Deanne Howard (Head of Health, Safety and Environment) Andrew Watson (Head of Group Procurement) Pictured: New lodges built along the Three Capes Track
Slide 43: FY2021 Sustainability Performance
FY2021 SUSTAINABILITY PERFORMANCE For personal use only Embedding sustainability in all that we do Safety Inclusion and Diversity Climate Sustainable Change Supply Chain 1,026 230 Leaders involved in our global HSE risk management Priority program to date 19% 21% 21% 22% Suppliers 100% Board and ELT
Slide 44: Health and Safety
HEALTH AND SAFETY Safe and inclusive workplaces are integral to For personal use only the way we do business • Whilst lagging indicators improved markedly in BlueScope’s early years, performance has since plateaued – Recent performance has deteriorated as complexity from unprecedented demand in comb
Slide 45: Evolving Our Approach
EVOLVING OUR APPROACH Evolving our approach to drive a step change in performance For personal use only Our evolved approach means we: Evolving our metrics • Focus on the presence of capacity in systems and • Shifted indicators to more closely align with our strategic processes rather than an absenc
Slide 46: Frameworks to Support Our Evolved Approach
FRAMEWORKS TO SUPPORT OUR EVOLVED APPROACH Learning from our people to strengthen our health, safety and environment (HSE) controls For personal use only “Blue Line / Black Line” Concept1 Better Questions, Stronger Solutions • It demonstrates how our people manage the reality of a complex • Connecti
Slide 47: Dr. Todd Conklin
For personal use only Dr. Todd Conklin Click here to view an address from safety expert Dr Todd Conklin 47
Slide 48: Social Impact and Inclusion
SOCIAL IMPACT AND INCLUSION STRATEGIC FOCUS For personal use only Increase positive social impact and prevent or mitigate adverse Human Rights impacts that are directly linked to the business operations, products, services or by business relationships Our People Promote belonging and pride in BlueSc
Slide 49: Improving Our Gender Diversity
IMPROVING OUR GENDER DIVERSITY An area where BlueScope has greatest opportunity to improve is how it reflects the communities in For personal use only which it operates, across all levels of the business • We have continued to build an inclusive workforce which reflects the diversity of the Women in
Slide 50: Gender Diversity in Operator and Trade Roles
CASE STUDY GENDER DIVERSITY IN OPERATOR AND TRADE ROLES An innovative talent acquisition strategy piloted in ASP, has driven an increase in female For personal use only representation in operator and trade roles A multi-faceted approach What we learnt Women in ASP Operator and Trade roles (%) • Recr
Slide 51: Inclusive Culture
INCLUSIVE CULTURE To deliver on Our Purpose, we must position Inclusion and Diversity as a strategic enabler which is For personal use only integrated and embedded within core business processes and activities FY2022 Focus Areas Create a safe environment for Enhancing under-represented all to speak
Slide 52: Supply Chain Sustainability
SUPPLY CHAIN SUSTAINABILITY We foster responsible business practices and For personal use only uphold human rights through engagement, risk assessment and improvement activities Our Approach Prioritise • Prioritise our supplier engagement based on risk and leverage • Incorporate supply chain / indus
Slide 53: Understanding Our Supply Chain
UNDERSTANDING OUR SUPPLY CHAIN We seek to do business with suppliers that share similar values, ethics and sustainable business For personal use only practices to us. Our supplier profile in EcoVadis reflects this Our Suppliers Supplier profile (EcoVadis assessments) • BlueScope has tens of thousand
Slide 54: Strengthening Our Supply Chain
STRENGTHENING OUR CASE STUDY SUPPLY CHAIN Measuring improvement Progress in identifying and managing ESG risks in our supply chain For personal use only The use of an independent, standardised is constantly evolving as we learn from our experiences and adapt risk assessment process has several Engag
Slide 55: Key Focus Areas for FY2022
KEY FOCUS AREAS FOR FY2022 Continuing to build on our progress with suppliers (engage-assess-improve) and expanding our use of For personal use only onsite assessments, while building capacity to support the people working in our supply chains Engage–Assess–Improve process Findings from 3rd party on
Slide 56: Sustainability Q&A Panel
For personal use only Sustainability Q&A Panel Mark Vassella (Managing Director & Chief Executive Officer) Tania Archibald (Chief Financial Officer) Kristie Keast (Chief Executive People & North American Development) Andrew Watson (Head of Group Procurement) 56
Slide 57: BlueScope Investor Day Day 1
For personal use only BlueScope Investor Day Day 1 20 September 2021 Pictured: New lodges built along the BlueScope Steel Limited. ASX Code: BSL Three Capes Track in Tasmania featuring COLORBOND® steel ABN: 16 000 011 058 Photo: Brett Boardman Level 11, 120 Collins St, Melbourne, VIC, 3000