Slide 1: 2014 Investors Forum
2014 Investors Forum January 28, 2014
Slide 2: 2013 Operating Performance, Business Environment, Business Plan
2013 Operating Performance 2013 Operating Performance 2013 Operating Performance - Consolidated Performance - Consolidated Performance - POSCO Operating Performance - POSCO Operating Performance 2013 Key Business Activities 2013 Key Business Activities 2013 Key Business Activities 2014 Business Envi
Slide 3: Consolidated Performance: Income
Income 3 Consolidated Performance POSCO Earnings Release |January 28, 2014 Revenue Operating Profit Net Profit 2011 2012 2013 68,939 63,604 5,468 3,653 3,714 2,386 61,865 2,996 1,355 (billion KRW) Consolidated income fell due to weak steel sector performance 2011 2012 2013 2011 2012 2013 7.9% 5.7% 4
Slide 4: Consolidated Performance: Income by sector
Income by sector Consolidated Performance 4 POSCO Earnings Release |January 28, 2014 Revenue Operating Profit 2011 2013 Steel Non-steel Revenue Revenue Revenue Operating Profit Operating Profit Operating Profit Net Profit Net Profit Net Profit 2011 2012 2013 2011 2012 2013 2011 2012 2013 Steel 56,29
Slide 5: Consolidated Performance: Financial Structure
Financial Structure 5 Consolidated Performance POSCO Earnings Release |January 28, 2014 Assets Liabilities Equity 2011 2012 2013 2011 2012 2013 2011 2012 2013 78,409 79,266 37,679 36,836 92.5% 86.8% 40,730 42,430 Liabilities to Equity 38,633 84.3% 45,822 84,455 Asset increased as domestic/overseas p
Slide 6: Summarized Income Statement
Summarized Income Statement 6 Consolidated Performance POSCO Earnings Release |January 28, 2014 2011 2012 2013 2011 2012 2013 YoY(%) Revenue Revenue 68,939 63,604 61,865 ^ 2.7 Gross Profit Gross Profit 9,115 7,461 6,860 ^ 8.1 (Gross Margin) (Gross Margin) (13.2%) (11.7%) (11.1%) - Selling & Admin. E
Slide 7: Summarized Statements of Financial Position
Summarized Statements of Financial Position 7 Consolidated Performance (billion KRW) POSCO Earnings Release |January 28, 2014 2011 2012 2013 2011 2012 2013 YoY (%) Current Assets Current Assets 33,557 31,566 31,666 + 0.3 Cash & Financial Goods 6,440 6,530 7,179 + 9.9 Accounts Receivable 11,451 11,03
Slide 8: POSCO Operating Performance
2013 Operating Performance 2013 Operating Performance 2013 Operating Performance - Consolidated Performance - Consolidated Performance POSCO Operating Performance POSCO Operating Performance 2013 Key Business Activities 2013 Key Business Activities 2013 Key Business Activities 2014 Business Environm
Slide 9: Production & Sales
Production & Sales 9 POSCO Operating Performance Crude Steel Production Product Sales 2011 2012 2013 2011 2012 2013 Carbon Steel 35,374 36,017 34,467 S T S 1,951 1,969 1,949 37,325 37,986 36,416 (thousand tons) Domestic M/S up, even though production and sales decreased due to the slow market and bl
Slide 10: Sales by Product
Sales by Product 10 POSCO Operating Performance Automotive steel sales continued to increase, and wire rod sales climbed as No.4 wire rod plant construction completed POSCO Earnings Release |January 28, 2014 Automobile* 2011 2012 2013 7,140 7,360 2011 2012 2013 2011 2012 2013 YoY Hot-Rolled 8,036 8,
Slide 11: POSCO Operating Performance: Income
Income 11 POSCO Operating Performance Revenue Operating Profit 2011 2012 2013 2011 2012 2013 2011 2012 2013 Carbon Steel 986 883 776 (billion KRW) 39,172 35,665 30,544 4,330 2,790 2,215 11.1% 7.8% 7.3% Operating Margin (thousand KRW/ton) Revenue and operating profit decreased as selling price fell d
Slide 12: Financial Structure
Financial Structure 12 2012 2013 2012 2013 2012 2013 52,320 13,156 39,164 POSCO Operating Performance Assets Liabilities Equity 54,242 33.6% Liabilities to Equity 9,604 Debt 8,663 11,931 Debt ^ 941 42,311 28.2% Debt decreased and liability to equity ratio improved on efforts to enhance financial sou
Slide 13: 2013 Key Business Activities
2013 Operating Performance 2013 Operating Performance 2013 Operating Performance - Consolidated Performance - Consolidated Performance - POSCO Operating Performance - POSCO Operating Performance 2013 Key Business Activities 2013 Key Business Activities 2013 Key Business Activities 2014 Business Envi
Slide 14: Key Business Activities
Key Business Activities Similar profitability to last year, despite hostile business environment Key Business Activities POSCO Earnings Release |January 28, 2014 Intense Business Environment Key Business Activities in 2013 Largest crude steel production in China Japanese steel giant Intense domestic
Slide 15: Strengthened marketing activities to improve profitability
15 Strengthened marketing activities to improve profitability Steel High value-added products Larger client base Increased sales volume of World First/World Best product Continued to expand sales portion of high-strength tire cord and plates for energy industry Sales towards high profit-generating i
Slide 16: Built domestic/overseas production and sales network
Built domestic/overseas production and sales network POSCO Earnings Release |January 28, 2014 Steel B India Indonesia China Korea Mexico Turkey · STS CR (200K tons, Aug.'13) · Auto steel (450k tons, Apr.'13) · G*) BF#1 revamp (2,300k tons, Jun.'13) · P**) #3FINEX (2,000k tons, Jan.'14) · P) #4Wire r
Slide 17: Continued cost reduction and enhanced technology competitiveness
17 Continued cost reduction and enhanced technology competitiveness Technology Development Enhanced technology competitiveness Developed 146 new grades (18 grades added yoy) - Strengthened technology development in iron-making, steelmaking, and rolling processes Cost Reduction Expanded R&D investmen
Slide 18: Energy contribution on group portfolio
18 As new projects take on, the contribution of energy sector on group portfolio weigh Resource Development Myanmar gas field project of Daewoo Int'l completed - Current average daily production & sales : 200mn ft3 - Accumulated gas sales : 16.4bn ft3 (Dec.'13) - Revenue from gas sales (Nov~Dec.'13)
Slide 19: Improved profitability by expanding overseas and non-group business
19 Improved profitability by expanding overseas and non-group business Infrastructure ICT and Materials POSCO E&C won more contracts from overseas and non-POSCO clients New orders in 2013 reached 12.1 trillion KRW · Overseas 4.1tn KRW, 37% ('12) ^ 5.9tn KRW, 49% ('13) POSCO Earnings Release |January
Slide 20: Raised management efficiency through group-wide innovation
Raised management efficiency through group-wide innovation Reduced Working Capital POSCO Earnings Release |January 28, 2014 Innovation Activities Restructuring Subsidiaries Restructuring subsidiaries 46 POSCO business groups, based on the data reported to the Fair Trade Commission at the end of 2013
Slide 21: Investment: 2013 Capex
21 POSCO Operating Performance Investment 2013 Capex Capex by sector Sector Project Domestic steel P*)#3FINEX, P)#4Wire rod, G**)#4HR Domestic steel G)#1BF revamp, P)#1 Steelmaking plant rationalization Overseas steel Indonesia integrated mill JV Overseas steel India CR mill Raw material investment
Slide 22: 2014 Business Environment
2013 Operating Performance 2013 Operating Performance 2013 Operating Performance - Consolidated Performance - Consolidated Performance - POSCO Operating Performance - POSCO Operating Performance 2013 Key Business Activities 2013 Key Business Activities 2013 Key Business Activities 2014 Business Envi
Slide 23: Global Steel Demand Business Environment
(million tons) World Steel Association, MEPS, China Metallurgical Industry Planning & Research Institute(MPI) * CRU, Mysteel Chinese steel price is expected to upturn, as supply and demand tightens due to the bullish U.S. steel price and inventory adjustment China's steel price will recover as of 1Q
Slide 24: Domestic Steel Demand and Industry Outlook
Domestic Steel Demand (thousand tons) 2011 2012 2013 ^ 2014 ^ 2011 2012 2013 yoy 2014 yoy Nominal Consumption Nominal Consumption 56,391 54,069 51,575 ^ 4.6% 52,630 + 2.0% Export Export 29,091 30,485 29,230 ^ 4.1% 30,350 + 3.8% Production Production 72,283 72,052 69,155 ^ 4.0% 71,250 + 3.0% Import I
Slide 25: Raw Materials: Coking Coal and Iron Ore
Raw Materials Coking Coal Iron Ore POSCO Earnings Release |January 28, 2014 2013.4Q 2014 Outlook (US$/ton) [Coking Coal Price] *Platts HCC Peak Downs FOB Australia (Quarterly Average Spot price) 166 221 173 155 143 2012 2Q 2012 3Q 2012 4Q 2013 1Q 2013 2Q 2013 3Q 142 2013 4Q (US$/ton) [Iron Ore Price
Slide 26: Stainless Steel Sales and Raw Materials
Stainless Steel Sales Raw Materials 2013.4Q 2014 (thousand US$/ton) Nickel Chrome 13.9 13.9 2.7 3.0 2.7 15.5 2.8 [STS Raw Material Price] * Nickel : LME Nickel quarterly avg. * Chrome : Japanese quarter benchmark price 2.7 17.3 14.9 2013 1Q 2013 2Q 2013 3Q 2013 4Q 2014 (f) 2013.4Q 2014 "Slight incre
Slide 27: Energy & Infrastructure
POSCO Earnings Release |January 28, 2014 Energy & Infrastructure Energy Infrastructure "Electricity demand in 2014 to increase by 4.2%" Electricity demand for both industry and consumers, expect to increase, supported by anticipation towards domestic economy recovery Electricity supply and demand co
Slide 28: 2014 Business Plan
2013 Operating Performance 2013 Operating Performance 2013 Operating Performance - Consolidated Performance - Consolidated Performance - POSCO Operating Performance - POSCO Operating Performance 2013 Key Business Activities 2013 Key Business Activities 2013 Key Business Activities 2014 Business Envi
Slide 29: Business Plan
Business Plan Business Plan POSCO Earnings Release |January 28, 2014 Improve Financial Soundness (trillion KRW, %) Manage- ment Strategy Business Management focused on Profitability Strengthen market dominance & Raise overseas business profitability Steel A Focus on resource development & power gene
Slide 30: Strengthen market dominance
Strengthen market dominance Steel Product Competitiveness Cost Competitiveness POSCO Earnings Release |January 28, 2014 Increase sales of highly profitable products Win more orders from highly profitable demand industries - Stimulate sales of highly profitable products Expand domestic M/S by prepari
Slide 31: Improve profitability by operating on globally integrated system
Improve profitability by operating on globally integrated system Steel Integrated Operation System Competitive Strategy by Region POSCO Earnings Release |January 28, 2014 Global Sales/Production System (GOC*) Strengthen domestic control over overseas sites through stronger connection between the HQ
Slide 32: Build up profitability and growth potential in Energy
32 Build up profitability and growth potential focusing on resource development and power generation Energy Energy POSCO Earnings Release |January 28, 2014 B Raise profitability by improving efficiency and power generation capabilities - Diversify power mix by entering coal-thermal market Project Si
Slide 33: Pursue quality-based growth in Infrastructure & Materials
Pursue quality-based growth by focusing resources in key businesses Infrastructure & Materials Infrastructure Materials POSCO Earnings Release |January 28, 2014 C POSCO E&C to increase profitability by focusing on key 4 businesses and reinforcing its resources Gain profitability focusing on steel, p
Slide 34: Consolidated Management Target
Consolidated Management Target 2013 2014(F) Revenue (trillion KRW) 61.9 65.3 - POSCO Revenue (^) 30.5 31.0 Crude Steel Production (million tons) 36.4 37.7 Product Sales (^) 33.9 34.9 Investment (trillion KRW) 8.8 6.5 - POSCO Investment (^) 4.3 3.7 34 POSCO Earnings Release |January 28, 2014 Business
Slide 35: 2014 Investors Forum
2014 Investors Forum January 28, 2014