Slide 1: 1Q 2011 Operating Performance
1Q 2011 Operating Performance April 22, 2011
Slide 2: Agenda and unaudited figures notice
Figures provided 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 ^ 1Q Operating Performance ^ Activities & Accomplishments ^ Steel Industry Environment ^ 2011 Business P
Slide 3: Consolidated Operating Performance: Revenue and Operating Income
3 Consolidated Operating Performance KRW 16tn revenue maintained · 1.3tn op. income achieved (in billion KRW) ^ Sales by sector: includes inter-company transactions '10.1Q '10.4Q '11.1Q Steel · Support 9,808 13,360 13,449 E&C 2,472 2,046 1,721 ICT 161 273 219 Energy 196 251 342 Trade 339 6,412 6,904
Slide 4: Assets reached KRW 70tn w/ growth investment
4 Assets reached KRW 70tn w/ growth investment < Assets > < Liabilities > 19,178 30,872 Consolidated Operating Performance (IFRS) (in billion KRW) 2010.1Q 2010.4Q 2011.1Q 53,303 69,405 71,389 32,443 2010.1Q 2010.4Q 2011.1Q (in billion KRW) (in billion KRW) ^ Sales by sector: includes inter-company t
Slide 5: Profitability improved, sound financials maintained: Key Ratios
Return on Equity Liability to Equity Revenue Growth 9.8 16.1 16.3 Profitability improved · sound financials maintained Key Ratios Operating Margin Operating Income (in bn KRW) 2010.1Q 2010.4Q 2011.1Q Consolidated Operating Performance (IFRS) 34.1 1,558 676 1,356 1,383 641 1,098 Revenue (in tn KRW) N
Slide 6: Summarized Income Statement
6 2010.1Q 2010.4Q 2011.1Q 2010.1Q 2010.4Q 2011.1Q QoQ(%) Revenue Revenue 9,777 16,136 16,251 0.7% Gross Income Gross Income 2,048 1,727 2,172 25.8% (Gross Margin) (Gross Margin) (20.9%) (10.7%) (13.4%) C G & A C G & A 533 926 869 ^3.2% Other operating income Other operating income 43 ^125 53 - Opera
Slide 7: Summarized Statement of Financial Position
7 (in billion KRW) 2010.1Q 2010.4Q 2011.1Q 2010.1Q 2010.4Q 2011.1Q QoQ(%) Current Assets Current Assets 22,026 27,658 28,953 4.7% Cash Equivalents* 10,020 7,904 6,924 ^12.4% Notes Receivable 5,784 9,205 10,000 8.6% Inventory 5,223 9,559 10,398 8.8% Long-term Assets Long-term Assets 31,277 41,747 42,
Slide 8: POSCO Operating Performance: Full production continued, sales slightly dropped
8 Carbon Steel 7,776 8,424 8,465 S T S 452 487 475 Import 5,025 5,187 5,266 Export 2,450 3,232 2,929 ^Inventory 578 745 886 POSCO Operating Performance Full production continued · sales slightly dropped Crude Steel Production 8,911 2010. 4Q 2011.1Q 8,940 (in thousand tons) Finished Product Sales 8,4
Slide 9: Solid demand industry, stable sales maintained
9 Solid demand industry · stable sales maintained (in thousand ton) 2010.1Q 2010.4Q 2011.1Q (in thousand ton) 2010.1Q 2010.4Q 2011.1Q YoY (%) QoQ (%) Hot Rolled 1,730 2,129 1,919 9.8% ^10.9% Plate* 1,120 1,523 1,544 27.5% 1.4% Wire Rod 503 509 515 2.3% 1.2% Cold Rolled 3,148 3,209 3,164 0.5% ^1.4% E
Slide 10: Op. Income grew due to product price increase
Op. Income grew due to product price increase, etc. • Op. income increased due to rising export price & adjustment in useful life of depreciation • Net income grew due to FX gains resulted from stronger KRW Income POSCO Operating Performance (IFRS) 10 Revenue 9,176 '10.4Q '11.1Q 9,112 (in billion KR
Slide 11: Activities & Accomplishments
^ Steel Industry Environment ^ 2011 Business Plan ^ 1Q Operating Performance ^ Activities & Accomplishments
Slide 12: POSCO's Key Activities: Cost savings and product development
? Continued cost savings & technology enhancement ? 1Q cost savings : KRW 317.7bn ('11 target raised : KRW 0.8tn ^ 1tn) ? Expand World Best & World First product development · sales - Sales volume & Op. margin : 1.21Mt, 11.7% ('10.4Q) ^ 1.26Mt, 15.1% ('11.1Q) ? Raised domestic product prices by 160
Slide 13: POSCO's Key Activities: Domestic capacity expansion
? Continued investment in domestic capacity expansion ? Completed Pohang No.3 steelmaking plant construction (Mar. 31st) - Achieved early regular-operation (Target 57days, actual 29), capacity increase by 1.95Mt/yr ? Plan for Pohang Works' facilities optimization - FINEX addition & facilities renova
Slide 14: POSCO's Key Activities: Global growth investments
? Demonstrated visible progress in global growth investments ? Indonesia integrated steel mill construction (3Mt/yr, 1st stage) - Facility supply contract (Mar.), Initiate plant construction (Jul.), complete 1st stage ('13/E) ? India Orissa project conditional approval (total 12Mt/yr, 1st ~ 3rd stag
Slide 15: Subsidiaries' Key Activities: Steel, Support, Trade, E&C
15 Steel ^ Support Trade E&C • Capacity expansion · early normalization of new facilities - Zhangjiagang STS : initiate #3 CR Mill (Apr., 230Kt/yr) & normal operation (May~) - POSCO SS : new steelmaking plant (30t ^ 60t EAF), Jun.'10 ~ Feb.'12 (progress 37%) Vietnam EAF (1Mt/yr), May'10 ~ Jul.'13 (g
Slide 16: Subsidiaries' Key Activities: Energy, ICT, Chemical & Materials
Energy ICT Chemical ^ Materials Subsidiaries' Key Activities • POSCO Power : grow power-generation & renewable energy - Incheon No. 5 LNG 600MW power plant operation (Feb), No.5,6 completion (Jun) - Promote global power business : acquired stake in Vietnam coal-fired power plant (Feb) - Completion o
Slide 17: Steel Industry Environment
^ 2011 Business Plan ^ 1Q Operating Performance ^ Activities & Accomplishments ^ Steel Industry Environment
Slide 18: Global Steel Market
18 Global Steel Market ? Rising production · steel prices due to demand recovery ? Record high qrtly prod'n in China, YoY demand growth for 4 consecutive months ? Strong prices continue with rising steel demand & raw material prices ? 6% demand growth with U.S recovery & solid emerging markets ? Chi
Slide 19: Domestic Steel Market
Domestic Steel Market ? Demand to remain healthy & import volume to drop Industry Outlook Auto Ship- building ? Expect highest prod'n with export recovery & stable domestic demand - Auto production (in thousand units) : 3,513 ('09) ^ 4,272 ('10) ^ 4,475 ('11) ? Growing shipbuilding due to better-tha
Slide 20: Raw Material: Iron Ore and Coal Spot Price Trend
Raw Material Iron Ore Coal Spot Price Trend Spot Price Trend '10.1 2 3 4 5 6 7 8 9 10 11 12 '11.1 2 3 4 ??? 114 116 131 165 149 132 118 134 128 135 149 160 175 182 164 176 * Platts '10.1 2 3 4 5 6 7 8 9 10 11 12 '11.1 2 3 4 ??? 206 218 249 245 227 225 217 200 217 223 230 240 331 336 332 332 * Platts
Slide 21: Raw Material Market: Ni and Cr Supply/Demand
Market Raw Material (in thousand ton) * Brookhunt (Mar.'11), CRU (Feb.'11) 2009 2010 2011 Ni Demand (a) 1,324 1,508 1,607 Ni Supply (b) 1,333 1,443 1,591 Ni (b) - (a) 9 -65 -16 Cr Demand (a) 6,853 8,363 8,779 Cr Supply (b) 6,205 8,532 8,975 Cr (b) - (a) -648 169 196 Ni · Cr S/D Forecast STS CR Spot
Slide 22: 2011 Business Plan
^ 1Q Operating Performance ^ Activities & Accomplishments ^ Steel Industry Environment ^ 2011 Business Plan
Slide 23: Business Target
23 Business Target ? Production · sales raised w/ new facility addition & full operation 2010 2011 Revenue (in trillion KRW) 47.9 67.8 POSCO Revenue (^) 32.6 40.0 Crude Steel Prod'n (in million ton) 33.7 37.1 Product Sales (^) 31.5 34.7 Investment (in trillion KRW) 11.2 9.8 POSCO Investment (^) 9.4
Slide 24: 1Q 2011 Operating Performance
1Q 2011 Operating Performance April 22, 2011