Bluescope Steel Limited · ASX:BSL
Bluescope Steel — FY2020 Earnings Presentation
98 slides from Bluescope Steel's earnings presentation, Aug 17, 2020
Slide 1: FY2020 Financial Results Presentation
FY2020 FINANCIAL RESULTS PRESENTATION Mark Vassella Managing Director and Chief Executive Officer Tania Archibald Chief Financial Officer 17 August 2020 BlueScope Steel Limited. ASX Code: BSL ABN: 16 000 011 058 Level 11, 120 Colins St, Melbourne, VIC, 3000
Slide 2: Important Notice
IMPORTANT NOTICE 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. RELIANCE SHOULD NOT B
Slide 3: Safety First
SAFETY FIRST 3 Continuing to drive enhancement in risk management through a focus on people, building trust and learning • Health and wellbeing focus in 2H FY2020 has centred around the effective management of COVID-19 • Our safety performance needs more work to reduce the lost LTIFR time injury fre
Slide 4: Results Show Strength Of Business Model And Financial Disciplines
RESULTS SHOW STRENGTH OF BUSINESS MODEL AND FINANCIAL DISCIPLINES 4 Quality of portfolio and resilience of business model demonstrated; well positioned to deliver long term shareholder value • Comprehensive health measures adopted in all operating locations, leveraging strong safety culture and capa
Slide 5: FY2020 Financial Scorecard
FY2020 FINANCIAL SCORECARD 5 $97M reported NPAT and underlying EBIT of $564M, down 58% on FY2019 UNDERLYING EBIT1 UNDERLYING EBIT RETURN ON REPORTED NPAT INVESTED CAPITAL $564M 7.6% $97M Down $784M on FY2019 Down from 19.5% in FY2019 Down $919M on FY2019 FREE CASH FLOW CAPITAL MANAGEMENT NET CASH (O
Slide 6: Managing Through COVID-19
MANAGING THROUGH COVID-19 6 Broadly resilient demand across key markets; prudent measures adopted to protect our people, communities and business strength Impact on demand and trading across BlueScope’s footprint BLUESCOPE’S CONSIDERED AND Australia MEASURED RESPONSE TO COVID-19 • Resilient domestic
Slide 7: Positioned For Post-COVID Trends
POSITIONED FOR POST-COVID TRENDS 7 BlueScope is well positioned to address likely post-COVID societal trends Localisation of supply chains BlueScope’s focus is to serve domestic markets Rise in home improvements and BlueScope is a leading residential building products supplier extensions activity (r
Slide 8: FY2020 Underlying EBIT By Segment
FY2020 UNDERLYING EBIT BY SEGMENT 8 Weaker commodity steel spreads impact most segments; Building Products segment lifted with better ASEAN performance AUSTRALIAN STEEL PRODUCTS NORTH STAR BUILDING PRODUCTS ASIA & NORTH AMERICA $305.1M $189.6M $155.3M Down 43% on FY2019 Down 71% on FY2019 Up 16% on
Slide 9: Creating Strength
CREATING STRENGTH 9 OUR PURPOSE We create and inspire smart solutions in steel, to strengthen our communities for the future. OUR STRATEGY TRANSFORM GROW DELIVER DELIVER A STEP CHANGE IN CUSTOMER GROW OUR PORTFOLIO OF SUSTAINABLE DELIVER A SAFE WORKPLACE, AN ADAPTABLE EXPERIENCE AND BUSINESS STEELMA
Slide 10: Addressing Climate Change
ADDRESSING CLIMATE CHANGE 10 Seeking to reduce our impact on shared resources and mitigating climate risks by leveraging opportunities and breakthrough technologies FY2020 PROGRESS FUTURE FOCUS • Climate strategy elevated within corporate • Refreshing our climate scenario analysis to strategy, and e
Slide 11: Sustainability – A Core Value
SUSTAINABILITY – A CORE VALUE 11 BlueScope continues to focus on building resilience, embedding sustainability in all that we do SUPPLY CHAIN SUSTAINABILITY INCLUSION & DIVERSITY COMMUNITY • On track to complete the targeted 220 • Recruitment levels in FY2020 remained • We actively promote local par
Slide 12: North Star Expansion Progressing Well – Investing In Quality Growth
NORTH STAR EXPANSION PROGRESSING WELL – INVESTING IN QUALITY GROWTH 12 Significant project for BlueScope; remains on-budget and set for commissioning during the June 2022 half year • With a strong balance sheet, executing this highly value-accretive project remains a priority • Development was resch
Slide 13: North Star Expansion Progressing Well – Investing In Quality Growth
NORTH STAR EXPANSION PROGRESSING WELL – INVESTING IN QUALITY GROWTH 13 Melt shop building frame nearing completion Melt shop building cladding underway Installation of shuttle furnace underway
Slide 14: An Advantaged 'Best-In-Class' Asset
AN ADVANTAGED ‘BEST-IN-CLASS’ ASSET 14 Strong EBITDA and cash generation through the cycle; industry leading margins and utilisation US$M EBITDA and spread (100% basis)1 EBIT margins3 (%) 11.1% 600 U.S. mini-mill spread 9.8% Moved to 100% ownership of 524 EBITDA (100% basis) 500 North Star Cash flow
Slide 15: Anticipated Capacity Rationalisation Has Accelerated
ANTICIPATED CAPACITY RATIONALISATION HAS ACCELERATED 15 High cost legacy blast furnace producers idling and mothballing capacity or moderating output via temporary closures Overview of US HRC capacity Key US HRC capacity additions and rationalisations ME Nameplate capacity changes, not utilisation a
Slide 16: Medium Term Supply-Demand Balance Outlook Remains Favourable
MEDIUM TERM SUPPLY-DEMAND BALANCE OUTLOOK REMAINS FAVOURABLE 16 Announced closures within North Star’s region likely to lead to a regional undersupply in the medium term Regional flat rolled supply and demand balance (mt) Net production reduction of 2.1 1.9mt 0.4 2024 demand scenario ~33 1.7 predica
Slide 17: Update On NZ Strategic Review
UPDATE ON NZ STRATEGIC REVIEW 17 Strategic review substantially progressed; reconfiguring business to be fit for purpose, fit for market • Re-evaluating financial viability of business in a challenging operating environment, made more uncertain by public policy settings in carbon, trade and particul
Slide 18: Financial Results
FINANCIAL RESULTS
Slide 19: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 19 Robust 2H FY2020 performance in line with expectations, underpinned by resilient domestic demand Underlying EBIT ($M) 535.4 • 2H FY2020 realised spreads slightly stronger than 1H, with moderate benefit from realised 216.4 selling prices, as foreshadowed 305.1 • Domestic
Slide 20: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 20 Domestic volumes robust, supported by strong construction end market demand for BlueScope’s products Total Australian external domestic despatch volumes (kt) DWELLING • A significant proportion of product goes to alterations and additions. Sub-segment performed Total con
Slide 21: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 21 Current activity levels remain resilient across the building and construction markets to which BlueScope is exposed Long-term dwelling approvals: rolling 12 months1 (‘000 units) Alterations and additions approvals2 (A$M) Despite pullback, detached house approvals holding
Slide 22: North Star
NORTH STAR 22 Softer performance on lower spread; second half impacted by automotive shutdowns Underlying EBIT ($M) US steel mill capacity utilisation1 (%) 654.7 • Realised spreads softened in 2H 100% North Star FY2020 in weaker demand 243.1 80% environment Total US 60% 189.6 • Closure of the automo
Slide 23: North Star
NORTH STAR 23 Auto and manufacturing demand rebounding after short pause; construction market reverted to 2019 levels Automotive1 Non-residential construction2 Manufacturing3 (Light vehicle sales, annualised million units) (Value of work put in place, US$Bn; Architectural billings index) (ISM purcha
Slide 24: Building Products Asia And North America
BUILDING PRODUCTS ASIA AND NORTH AMERICA 24 Robust performance, particularly in China and ASEAN despite impacts of COVID-19 Underlying EBIT ($M) • China (EBIT $51.2M in FY2020; $14.5M in 2H FY2020) – 2H FY2020 EBIT lower on seasonality and COVID-19 impacts 155.3 134.2 – Indicative unrecovered fixed
Slide 25: Buildings North America
BUILDINGS NORTH AMERICA 25 Impacted by lower volumes from softer end market demand and project delays Underlying EBIT ($M) 53.4 • Lower volumes in 2H FY2020 due to 37.9 seasonality, COVID-19 impacts including 31.3 13.5 2H project delays and softer end market demand 22.1 24.4 1H • Favourable margins
Slide 26: New Zealand And Pacific Islands
NEW ZEALAND AND PACIFIC ISLANDS 26 Softer performance on lower steel prices and high costs; impact of Government mandated COVID-19 closure Underlying EBIT ($M) • Steel prices contracted in 2H FY2020 as foreshadowed 80.6 8.7 • Performance impacted significantly by Government mandated shut down of ope
Slide 27: Underlying Group EBIT Variance
UNDERLYING GROUP EBIT VARIANCE 27 58% reduction in underlying EBIT over FY2019, largely due to spread FY2020 vs FY2019 ($M) 2H FY2020 vs 1H FY2020 ($M) 1,348.3 Net spread decrease $674.3M (65.3) Raw material costs ($M) Raw material costs ($M) Coal (incl. higher coke margin of $17M) 43 Coal (incl. lo
Slide 28: Impact Of AASB 16 – Leases
IMPACT OF AASB 16 – LEASES 28 Impact of capitalisation of operating leases under AASB 16 • Effective 1 July 2019 and first reported in December 2019 half year statements • Brings most operating lease commitments onto the balance sheet as an asset and a form of debt, and splits income statement charg
Slide 29: Financial Framework
FINANCIAL FRAMEWORK
Slide 30: Financial Framework Underpinning Resilience
FINANCIAL FRAMEWORK UNDERPINNING RESILIENCE 30 Maintaining commitment to a strong balance sheet and disciplined capital allocation RETURNS OPTIMAL DISCIPLINED 1 FOCUS 2 CAPITAL STRUCTURE 3 CAPITAL ALLOCATION • ROIC > WACC on average through the cycle • Strong balance sheet, with a target of Invest t
Slide 31: Returns Focus – Delivering ROIC
1 RETURNS FOCUS – DELIVERING ROIC 31 Targeting returns above cost of capital through the cycle Group ROIC2 Performance (%) • ROIC1 is the primary measure of 20.0% 19.5% 18.5% performance across all business units and the Group. ROIC is a key discipline 3 year average: 15.7% for: 7.6% i. performance
Slide 32: Returns Focus – Maximising Cash Generation
1 RETURNS FOCUS – MAXIMISING CASH GENERATION 32 Average free cash flow of $758M over last three years; $79M net cash at 30 June 2020 Net cash flow (before investment exp and financing) ($M) Net cash / (debt)1 ($M) Average free cash (65) flow of $758M over 1,304 last three years 731 (109) North Star
Slide 33: Returns Focus – Working Capital Discipline
1 RETURNS FOCUS – WORKING CAPITAL DISCIPLINE 33 Strong working capital outcomes, particularly on receivables and inventory in the face of COVID-19 uncertainty and operational disruptions Included approximately $100M unfavourable timing of working capital Includes approximately $150M favourable 1,653
Slide 34: Optimal Capital Structure – Target Around $400M Net Debt
2 OPTIMAL CAPITAL STRUCTURE – TARGET AROUND $400M NET DEBT 34 Flexible and resilient balance sheet with investment grade rating Net debt / (cash) ($M) Leverage (Net debt to LTM underlying EBITDA1) 1,373 North Star Step-up and rapid pay- • Target around $400M 50% acquisition down of North Star 50% ac
Slide 35: Optimal Capital Structure – Enhanced Liquidity And Maturity Profile
2 OPTIMAL CAPITAL STRUCTURE – ENHANCED LIQUIDITY AND MATURITY PROFILE 35 Liquidity (undrawn facilities and cash, $M) Maturity profile2 ($M) 603 Syndicated NS BlueScope 3,0941 Bank Facility JV facilities (100%) Reg-S Bonds Inventory Finance More than sufficient • Main syndicated 2,532 to cover FY2021
Slide 36: Disciplined Capital Allocation – Capital And Acquisition Expenditure
3 DISCIPLINED CAPITAL ALLOCATION – CAPITAL AND ACQUISITION EXPENDITURE 36 Capital prioritised to highly value accretive North Star expansion project Capital management framework Capital and acquisition expenditure2 ($M) North Star capacity expansion Operating Cash Flow Divestments 328 • Total projec
Slide 37: Disciplined Capital Allocation – Shareholder Returns
3 DISCIPLINED CAPITAL ALLOCATION – SHAREHOLDER RETURNS 37 Strong track record of shareholder returns ($1.47Bn since 2017). 8.0 cps final dividend; prudent measure to keep buy-backs on hold Dividends paid and buy-backs1 ($M) • Final dividend of 8.0 cents per share retained 15.1% 15.2% given strong ba
Slide 38: Outlook And Summary
OUTLOOK AND SUMMARY
Slide 39: Comments On Trading Conditions In 1H FY2021
COMMENTS ON TRADING CONDITIONS IN 1H FY20211 39 At the beginning of 1H FY2021, lagged steel spreads in North America and Asia are lower than 2H FY2020 averages; orders and despatches in Australia remain stable and North Star is despatching near full capacity There is a high level of uncertainty in t
Slide 40: BlueScope: A Resilient Business Delivering Returns Through The Cycle
BLUESCOPE: A RESILIENT BUSINESS DELIVERING RETURNS THROUGH THE CYCLE 40 Disciplined and advantaged steel building products company focussed on growing long term shareholder value CAPITAL DISCIPLINE POSITIONED FOR ASSETS & CAPABILITY AND RETURNS FOCUS GROWTH • Integrated and resilient Australian busi
Slide 41: Questions?
QUESTIONS? tHe orsTRIeT
Slide 42: BlueScope: A Different Kind Of Steel Building Products Company
BLUESCOPE: A DIFFERENT KIND OF STEEL BUILDING PRODUCTS COMPANY
Slide 43: BlueScope: A Different Kind Of Steel Building Products Company
BLUESCOPE: A DIFFERENT KIND OF STEEL BUILDING PRODUCTS COMPANY 43 What makes us different? TECHNOLOGY, BUSINESS COST BRANDING & CHANNELS DIVERSIFICATION COMPETITIVENESS DISCIPLINED CAPITAL APPROACH TO ALLOCATION SUSTAINABILITY
Slide 44: Technology, Branding & Channels
TECHNOLOGY, BRANDING & CHANNELS 44 Continued investment in research & development to maintain leadership in steel coating and painting technologies Product Technology and Development Leadership Advanced pre-painted and metallic coating development for building, construction and home appliance market
Slide 45: Technology, Branding & Channels
TECHNOLOGY, BRANDING & CHANNELS 45 Brands – a portfolio of many well-known and respected names to support our premium branded positions Australia New Zealand Asia North America ® ® ® ® ® ® ®
Slide 46: Technology, Branding & Channels
TECHNOLOGY, BRANDING & CHANNELS 46 Channels – clear focus on knowing our end customers and maintaining strong channels to market New Zealand and Australia Asia North America Pacific Islands ® ® ® ® ® ®
Slide 47: Business Diversification
BUSINESS DIVERSIFICATION 47 Geographic diversity and increasing contribution from value-added products Underlying EBITDA by region ($M) BlueScope despatch volume mix 100% Buildings North America NZ & Pacific $51M 90% 4% Building products Asia 80% Higher value added $196M 16% 70% Aus & NZ cold rolled
Slide 48: Business Diversification
BUSINESS DIVERSIFICATION 48 Broad exposure across geographies, largely focussed on the building and construction industry BlueScope indicative despatch volume split by region and end-use segment Other (Exports) Manufacturing, Automotive Agri & Other 7% 14% North Star: exposed mainly to the automotiv
Slide 49: Cost Competitiveness – ASP
COST COMPETITIVENESS – ASP 49 Australian steelmaking breakeven at minimum recent spreads; benefits from vertical integration Asian steel spread1 & estimated steelmaking cash breakeven2 (US$/t) The value of vertical integration 800 • Clear objective of optimising profitability across the entirety of
Slide 50: Cost Competitiveness – North Star
COST COMPETITIVENESS – NORTH STAR 50 Strong EBITDA and cash generation through the cycle; industry leading margins; consistently full utilisation US$M EBITDA and spread (100% basis)1 EBIT margins3 (%) 11.1% 600 U.S. mini-mill spread 9.8% Moved to 100% ownership of 524 EBITDA (100% basis) 500 North S
Slide 51: Disciplined Capital Allocation
DISCIPLINED CAPITAL ALLOCATION 51 Balance sheet strength, and a disciplined approach to balancing investment for long-term growth and returns to shareholders ROBUST BALANCE SHEET RETURNS TO SHAREHOLDERS INVESTING FOR LONG TERM GROWTH Net debt / (cash) ($M) Dividends paid and buy-backs1 ($M) Capital
Slide 52: Disciplined Capital Allocation – Growth Opportunities
DISCIPLINED CAPITAL ALLOCATION – GROWTH OPPORTUNITIES 52 Investing for the future across our portfolio through a returns focussed process driving competition for capital Capital expenditure focus areas Examples of growth projects and opportunities MAINTAIN SAFE AND Building Products Asia Continued r
Slide 53: Disciplined Capital Allocation – Digitally Transforming Our Business
DISCIPLINED CAPITAL ALLOCATION – DIGITALLY TRANSFORMING OUR BUSINESS 53 Delivering the next wave of customer, growth and productivity improvements through technology A clear framework for digital transformation A range of technology solutions available to deliver value Provide • Providing the overal
Slide 54: Disciplined Capital Allocation – Robotics And Automation
DISCIPLINED CAPITAL ALLOCATION – ROBOTICS AND AUTOMATION 54 Robotics and automation opportunities unlocking the next wave of productivity improvements and cost savings Coil marking robot, North Star Coil core robot, Vietnam • A new robotic arm replaced a basic • The robot autonomously inserts markin
Slide 55: Disciplined Capital Allocation – Investing In Growth At ASP
DISCIPLINED CAPITAL ALLOCATION – INVESTING IN GROWTH AT ASP 55 A wide range of low capital growth opportunities in intermaterial applications TRUECORE® steel TRU-SPEC® coil plate Cladding and façade applications • Sales of TRUECORE® steel continues to increase on the • Investing in a new 160kt stret
Slide 56: Approach To Sustainability – Our Bond
APPROACH TO SUSTAINABILITY – OUR BOND 56 We and our customers proudly bring inspiration, strength and colour to communities with BlueScope Steel OUR CUSTOMERS ARE OUR PEOPLE ARE OUR OUR SHAREHOLDERS ARE OUR COMMUNITIES ARE OUR PARTNERS STRENGTH OUR FOUNDATIONS OUR HOMES Our success depends on our Ou
Slide 57: Approach To Sustainability – Transitioning Our Safety Indicators
APPROACH TO SUSTAINABILITY – TRANSITIONING OUR SAFETY INDICATORS 57 Ongoing alignment with evolving industry reporting standards to continue to provide meaningful disclosures • Continued plateau in lagging safety indicators, with minor fluctuation, observed over the BlueScope’s long term safety perf
Slide 58: Approach To Sustainability – Committed To The Climate Challenge
APPROACH TO SUSTAINABILITY – COMMITTED TO THE CLIMATE CHALLENGE 58 Informed by previous climate scenario analysis, BlueScope’s climate strategy has been elevated within corporate strategy OUR STRATEGY FY2020 Progress FY2021 Focus Areas • Established Climate Change Council to support • Contributing t
Slide 59: Approach To Sustainability – Committed To The Climate Challenge
APPROACH TO SUSTAINABILITY – COMMITTED TO THE CLIMATE CHALLENGE 59 Actively developing BlueScope’s specific long-term decarbonisation pathway The external landscape is evolving rapidly; BlueScope is playing a leading role in key global and regional initiatives which seek to understand the opportunit
Slide 60: Approach To Sustainability – Sustainable Supply Chain
APPROACH TO SUSTAINABILITY – SUSTAINABLE SUPPLY CHAIN 60 Supplier engagement and assessment processes operational, developing program for own site assessments FY2020 Progress FY2021 Focus Areas • Robust segmentation process driving prioritisation for supplier • Full refresh of supplier Segmentation
Slide 61: Approach To Sustainability – Inclusion And Diversity
APPROACH TO SUSTAINABILITY – INCLUSION AND DIVERSITY 61 Strong focus and effective strategies creating demonstrable improvement in inclusion and diversity • BlueScope is committed to creating a Women in BSL workforce (%) Women in BSL recruitment (%) 25% safe and inclusive workplace where 25% Board 3
Slide 62: Approach To Sustainability – Building Our Communities
APPROACH TO SUSTAINABILITY – BUILDING OUR COMMUNITIES 62 BlueScope’s support for its communities is based on local, grassroots activities, focussed on six key areas SHELTER COMMUNITY BUILDING Every aspect of shelter: $ Construction or improvement, eg. community homelessness, emergency accommodation,
Slide 63: Approach To Sustainability – Governance & Business Conduct
APPROACH TO SUSTAINABILITY – GOVERNANCE & BUSINESS CONDUCT 63 We encourage a culture of speaking up and protecting those who do • ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations − BlueScope has undertaken a reconciliation of its governance practices against tho
Slide 64: Additional Information – Group-Level Material
ADDITIONAL INFORMATION – GROUP-LEVEL MATERIAL
Slide 65: Financial Headlines
FINANCIAL HEADLINES 65 FINANCIAL YEAR ENDED $M (unless marked) 30 JUN 2019 30 JUN 2020 FY2020 vs FY2019 Total revenue 12,586.4 11,324.2 External despatches of steel products (kt) 7,451.2 7,082.4 EBITDA Underlying 1 1,761.4 1,098.7 EBIT Reported 1,340.8 309.7 Underlying 1 1,348.3 564.0 NPAT R
Slide 66: Reconciliation Between Reported And Underlying EBIT And NPAT
RECONCILIATION BETWEEN REPORTED AND UNDERLYING EBIT AND NPAT1 66 FY2019 FY2020 $M EBIT $M NPAT $M EBIT $M NPAT $M Reported results 1,340.8 1,015.8 309.7 96.5 Underlying adjustments Net losses from businesses discontinued 2.1 4.1 4.7 6.4 Asset impairments 63.8 33.2 197.0 197.0 Tax asset impairment /
Slide 67: Underlying Earnings, Net Finance And Tax Cost
UNDERLYING EARNINGS, NET FINANCE AND TAX COST 67 $M 1H FY2020 2H FY2020 FY2020 Breakdown of net finance costs Underlying EBIT 302.4 261.6 564.0 Reg-S Bonds 20.7 Syndicated bank facility charges 4.7 Underlying finance costs (37.4) (38.0) (75.4) Leases1 30.0 Interest revenue 11.2 7.7 18.9 Amortisation
Slide 68: Summary Of Financial Items By Segment
SUMMARY OF FINANCIAL ITEMS BY SEGMENT 68 Sales revenue Total steel despatches $M FY2019 1H FY2020 2H FY2020 FY2020 '000 tonnes FY2019 1H FY2020 2H FY2020 FY2020 Australian Steel Products 5,707.5 2,692.1 2,726.0 5,418.1 Australian Steel Products 3,115.7 1,398.1 1,535.8 2,933.8 North Star BlueScope St
Slide 69: Cash Flow Statement
CASH FLOW STATEMENT 69 $M FY2019 1H FY2020 2H FY2020 FY2020 Reported EBITDA 1,753.8 555.7 288.7 844.4 Adjust for other cash profit items (22.0) (6.7) 213.4 206.7 Strong working capital outcomes, particularly on Cash from operations 1,731.8 549.0 502.1 1,051.1 receivables and inventory in the face of
Slide 70: Inventory Movement
INVENTORY MOVEMENT 70 Decrease on lower steel and raw material prices and impact of NZ spares write-down, combined with strict focus on inventory management RM $617.2M WIP $664.3M FG $629.5M $148.4M decrease comprised of segmental movements: Other $219.2M RM $591.3M (including eliminations and other
Slide 71: Balance Sheet
BALANCE SHEET 71 $M 30 Jun 2019 31 Dec 2019 30 Jun 2020 Assets Cash 1,644.5 1,273.4 1,399.5 Receivables and Contract Assets * 1,259.8 1,177.2 1,153.4 Inventory * 2,130.2 2,061.3 1,981.8 Property, Plant & Equipment 4,147.5 4,154.7 4,175.3 Right Of Use Assets - 387.0 338.0 Intangible Assets 1,827.0 1,
Slide 72: Committed Debt Facilities As At June 2020
COMMITTED DEBT FACILITIES AS AT 30 JUNE 2020 72 Committed Drawn Maturity Local currency A$M A$M Syndicated Bank Facility - Tranche 1 May 2022 A$405M A$405M - - Tranche 2 Aug 2023 A$400M A$400M - - Tranche 3 Aug 2024 A$400M A$400M - Reg-S Bonds May 2023 US$300M A$437M A$437M Inventory Finance Sep 202
Slide 73: Indicative Half Year EBIT Sensitivities
INDICATIVE HALF YEAR EBIT SENSITIVITIES1 73 Sensitivities may vary subject to volatility in prices, currencies and market dynamics – refer to page 78 Australian Steel Products segment New Zealand Steel & Pacific Islands segment North Star BlueScope Steel segment +/- US$10/t move in average benchmark
Slide 74: Additional Information – Segment Material
ADDITIONAL INFORMATION – SEGMENT MATERIAL
Slide 75: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 75 Financial and despatch summaries Key segment financial items Despatches breakdown $M unless marked FY2019 1H FY2020 2H FY2020 FY2020 '000 Tonnes FY2019 1H FY2020 2H FY2020 FY2020 Revenue 5,707.5 2,692.1 2,726.0 5,418.1 Hot rolled coil 555.9 269.3 278.9 548.2 Underlying E
Slide 76: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 76 Underlying EBIT variance FY2020 vs FY2019 ($M) 2H FY2020 vs 1H FY2020 ($M) Raw material costs ($M) 535.4 Net spread decrease $275.4M Coal (incl. lower coke margin of -$63M) (3) Iron ore (159) Raw material costs ($M) (63.8) Scrap & alloys 8 Coal (incl. higher coke margin
Slide 77: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 77 Spot spreads have contracted due to softening HRC prices and increasing raw material rates Indicative steelmaker HRC lagged spread Notes on calculation: • ‘Indicative steelmaker HRC spread’ representation based on $800 simple input blend of 1.5t iron ore fines and 0.71t
Slide 78: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 78 Relationships with benchmark pricing • Selling prices across majority of domestic product correlated with SBB East Asia HRC price; lagged generally three to five months; degree of correlation between realised and Steel prices benchmark prices can vary within a given half
Slide 79: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 79 Despatch mix (Mt) 1.65 FY2020 Product Mix 1.54 1.47 1.40 0.28 0.59 0.39 Export Export 0.26 0.08 Domestic - 0.06 0.06 0.06 externally sourced HRC Metal Coated Plate Painted Domestic - BSL CRC Other inc ext sourced 1.11 1.08 1.09 1.00 manufactured Domestic 1H FY2019 2H FY2
Slide 80: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 80 Revenue and underlying costs FY2020 Revenue Underlying costs (to EBIT line) A$5,418M Non-steel business costs relate to: Conversion & overhead components A$5,113M • Export coke sales (in order of value): Non-steel business • Cold ferrous feed to Liberty OneSteel • Direct
Slide 81: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 81 Housing market pullback evident pre-pandemic; detached sector showing usual stability Long-Term Dwelling Approvals: rolling 12 months1 (‘000) Dwelling Commencements: by halves2 (‘000) Despite pullback, detached house approvals holding in stable historic range Commencemen
Slide 82: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 82 Sentiment in non-residential construction sector demonstrated a positive turnaround Non-Residential Building Approvals: rolling 12 months1 (A$bn) Non-Residential Work Done: by halves2 (A$bn) Approvals at most robust levels for many years Elevated activity reflects strong
Slide 83: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 83 Portfolio of premium brands and strong channel focus; leading supplier to the building and construction industry Brands Recent marketing campaigns COLORBOND® Matt steel campaign A portfolio of many well-known and respected premium product brands 50 Years of COLORBOND® st
Slide 84: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 84 An integrated and resilient business that delivers returns across the cycle East Asian benchmark and ASP steelmaking indicative cash breakeven spreads (US$/t) • Steelmaking and coated operations optimised as a 350 single unit to maximise overall profitability • Highly co
Slide 85: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS 85 Robotics and automation opportunities unlocking the next wave of productivity improvements and cost savings COATING MASS PREDICTIVE DIGITAL TWIN OPTIMISATION MAINTENENCE • Algorithm recommends operating • Plans in place to access two distinct • Digital twins installed at
Slide 86: North Star
NORTH STAR 86 Financial and despatch summaries Key segment financial items (A$M) Key segment financial items (US$M) $M unless marked FY2019 1H FY2020 2H FY2020 FY2020 US$M FY2019 1H FY2020 2H FY2020 FY2020 Revenue 2,375.7 865.4 847.6 1,713.0 Revenue 1,700.9 592.0 557.1 1,149.1 Underlying EBITDA 715.
Slide 87: North Star
NORTH STAR 87 Underlying EBIT variance FY2020 vs FY2019 ($M) 2H FY2020 vs 1H FY2020 ($M) Net spread decrease 654.7 $457.2M (692.7) 0.7 189.6 Net spread decrease (24.1) 15.5 $47.2M 114.5 (39.3) 75.1 235.5 (7.9) 7.4 (2.3) 2.7 FY2019 Prices Raw material Conversion & Volume FX translation FY2020 1H FY20
Slide 88: Building Products Asia & North America
BUILDING PRODUCTS ASIA & NORTH AMERICA 88 Financial and despatch summaries Key segment financial items Despatches by business $M unless marked FY2019 1H FY2020 2H FY2020 FY2020 '000 Tonnes FY2019 1H FY2020 2H FY2020 FY2020 Revenue 2,879.4 1,492.1 1,285.4 2,777.5 Thailand 341.4 132.8 172.4 305.2 Unde
Slide 89: Building Products Asia & North America
BUILDING PRODUCTS ASIA & NORTH AMERICA 89 Underlying EBIT variance FY2020 vs FY2019 ($M) 2H FY2020 vs 1H FY2020 ($M) Net spread increase $50.2M (22.1) 155.3 (17.4) 10.4 134.2 (2.3) Net spread increase $25.2M 13.2 (41.4) 80.2 75.1 216.2 (0.7) (2.1) 77.4 (163.7) (51.5) FY2019 Export Domestic Raw Conve
Slide 90: Buildings North America
BUILDINGS NORTH AMERICA 90 Financial and despatch summaries Key segment financial items (A$M) Key segment financial items (US$M) $M unless marked FY2019 1H FY2020 2H FY2020 FY2020 US$M FY2019 1H FY2020 2H FY2020 FY2020 Revenue 1,178.0 611.9 506.6 1,118.5 Revenue 841.4 418.3 332.6 750.9 Underlying EB
Slide 91: Buildings North America
BUILDINGS NORTH AMERICA 91 Underlying EBIT variance FY2020 vs FY2019 ($M) 2H FY2020 vs 1H FY2020 ($M) Net margin increase $5.7M (22.8) 53.4 48.5 (24.6) (20.0) Net margin increase $8.9M 37.9 3.4 (3.5) 7.0 24.4 5.4 (21.0) 13.5 1.2 FY2019 Prices1 Raw material Conversion & Volume FX FY2020 1H FY2020 Pri
Slide 92: New Zealand & Pacific Islands
NEW ZEALAND & PACIFIC ISLANDS 92 Financial and despatch summaries Key segment financial items Steel despatches $M unless marked FY2019 1H FY2020 2H FY2020 FY2020 '000 Tonnes FY2019 1H FY2020 2H FY2020 FY2020 Revenue 888.1 420.3 372.1 792.4 Domestic despatches Underlying EBITDA 129.0 39.5 12.7 52.2 -
Slide 93: New Zealand & Pacific Islands
NEW ZEALAND & PACIFIC ISLANDS 93 Underlying EBIT variance FY2020 vs FY2019 ($M) 2H FY2020 vs 1H FY2020 ($M) 80.6 Net spread decrease $22.2M (20.0) (13.0) 10.8 Includes $38M reduction (57.7) in vanadium by-product contribution Net spread decrease $18.0M 12.9 (3.2) (8.9) (8.4) (5.9) 5.6 1.9 (18.4) (5.
Slide 94: New Zealand & Pacific Islands
NEW ZEALAND & PACIFIC ISLANDS 94 Despatch mix (kt) 307.5 314.8 FY2020 Product Mix 299.8 8.1 0.8 0.6 285.9 3.6 Export long 67.9 76.0 76.2 Domestic 103.7 Export flat 92.3 84.9 95.7 72.0 Domestic long HRC Plate CRC 146.5 145.8 Metal Coated 127.3 106.6 Domestic flat Painted Other flat products Pacific S
Slide 95: New Zealand & Pacific Islands
NEW ZEALAND & PACIFIC ISLANDS 95 The East Asian rebar price influences domestic and export long product pricing SBB East Asian rebar price, unlagged (US$/t) $800 $700 $600 $500 $400 $300 $200 $100 $0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: SBB Platts
Slide 96: New Zealand & Pacific Islands
NEW ZEALAND & PACIFIC ISLANDS 96 The NZ economy remains robust, despite a slight dip in activity prior to and during COVID-19 shutdown Residential Building Consents: rolling 12 months1 (‘000) Residential Work Put in Place: by quarters2 (NZ$bn) Tapering off record high levels Activity pipeline robust
Slide 97: Glossary
GLOSSARY 97 1H Six months ended 31 December in the relevant financial year FY2019 12 months ending 30 June 2019 1H FY2019 Six months ended 31 December 2018 FY2020 12 months ending 30 June 2020 1H FY2020 Six months ended 31 December 2019 FY2021 12 months ending 30 June 2021 1H FY2021 Six months ended
Slide 98: FY2020 Financial Results Presentation
FY2020 FINANCIAL RESULTS PRESENTATION Mark Vassella Managing Director and Chief Executive Officer Tania Archibald Chief Financial Officer 17 August 2020 BlueScope Steel Limited. ASX Code: BSL ABN: 16 000 011 058 Level 11, 120 Colins St, Melbourne, VIC, 3000