Bluescope Steel Limited · ASX:BSL
Bluescope Steel — H1 2021 Earnings Presentation
96 slides from Bluescope Steel's earnings presentation, Feb 22, 2021
Slide 1: 1H FY2021 Financial Results Presentation
1H FY2021 Financial Results Presentation Mark Vassella Managing Director and Chief Executive Officer Tania Archibald Chief Financial Officer 22 February 2021 BlueScope Steel Limited. ASX Code: BSL ABN: 16 000 011 058 Level 11, 120 Collins 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 Starts With All of Us
SAFETY STARTS WITH ALL OF US TRIFR Leaders involved in our global (Number of injuries) 653 HSE risk management program to date 5.4 5.6 6.7 (237) 7.2 (123) 100% Board and ELT participation in HSE risk management program (226) (207) Team-based risk control FY2018 FY2019 FY2020 1H FY21 302 improvement
Slide 4: Results Show Strength of Business Model and Financial Disciplines
RESULTS SHOW STRENGTH OF BUSINESS MODEL AND FINANCIAL DISCIPLINES Quality of portfolio and resilience of business model demonstrated; well positioned to deliver long term shareholder value Demonstrated operating leverage from diverse portfolio Strong cash flow and robust balance sheet Well posit
Slide 5: 1H FY2021 Financial Highlights
1H FY2021 FINANCIAL HIGHLIGHTS Strong earnings improvement over 1H FY2020; robust balance sheet Underlying EBIT1 Underlying EBIT Return Reported NPAT On Invested Capital2 $531M 11% $330M Up $228M on 1H FY2020 Inline with 11% in CY2019 Up $145M on 1H FY2020 Free Cash Flow Capital Management Net Cash3
Slide 6: Positioned Well for Emerging Trends
POSITIONED WELL FOR EMERGING TRENDS BlueScope is a leading supplier of flat steel products, well positioned to address emerging trends The trends The facts 1 Rise in residential construction on stimulus Australian detached housing and redirection of discretionary spend approvals up 25%; A&A approval
Slide 7: 1H FY2021 Underlying EBIT by Segment
1H FY2021 UNDERLYING EBIT BY SEGMENT Robust demand and improving spreads delivered better results across most segments Australian Steel North Star Building Products Asia Products and North America $259M $70M $150M Up 103% on 1H FY2020 Down 39% on 1H FY2020 Up 87% on 1H FY2020 Buildings North New Zea
Slide 8: Our Purpose and Strategy
OUR PURPOSE AND STRATEGY 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 AND AN ADAPTA
Slide 9: North Star Expansion
NORTH STAR EXPANSION Project on track and set for commissioning during June 2022 half year • Project is a highly value-accretive capital priority • Construction well progressed1; melt shop and tunnel furnace buildings completion targeted in 2H FY2021 • OEM equipment progressively arriving on site; i
Slide 10: North Star Expansion: US Steel Industry Consolidation
NORTH STAR EXPANSION US steel industry consolidation and rationalisation has continued, supporting an improved industry structure Key developments in 2020 US HSM capacity consolidation (%, mt) Total producers 20 10 9 • Mills temporarily idled through 2020 Gulf States 75mt Closed or consolidated prod
Slide 11: Sustainability
SUSTAINABILITY Embedding sustainability in all that we do Inclusion and Diversity Sustainable Supply Chain 19% 21% 21% 22% On track FY2018 FY2019 FY2020 1H FY21 Targeting 220 Priority 1 and 2 Female workforce participation assessments by end of FY2021 Community Launched Pandemic refreshed focus code
Slide 12: Climate Action
CLIMATE ACTION The appointment of a Chief Executive Climate Change confirms the seriousness of BlueScope’s intent Recent progress Scenario analysis underway • Elevated climate strategy within In our FY2021 reporting, we will release the outcomes of our climate scenario corporate strategy; establishe
Slide 13: Industry Decarbonisation Pathway
INDUSTRY DECARBONISATION PATHWAY Strong future for steel in a low-carbon world; breakthrough technology and renewable energy will be key enablers Technical challenge Technology and capital horizons FY20 FY35 FY50 • Diverse portfolio of short to mid term (to 2030) emissions reductions programs underw
Slide 14: Port Kembla Steelworks – Blast Furnace Reline
PORT KEMBLA STEELWORKS – BLAST FURNACE RELINE Commenced prefeasibility assessment of potential blast furnace reline incorporating carbon reduction technologies; flexibility to adopt breakthrough technologies when technically and commercially viable • Port Kembla steelworks currently operates one Bla
Slide 15: Financial results
Financial results 15
Slide 16: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS Strong performance driven by robust domestic demand and improved realised spreads Underlying EBIT ($M) • Robust domestic despatch volume – led by construction and distribution segments – Increased economic activity supported by government stimulus measures, 259.1 storm and
Slide 17: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS Strongest domestic volumes since 2H FY2010, driven by record demand across both residential and non-residential construction segments Total Australian domestic despatch volumes (kt) Dwelling • Approximately half of product goes to A&A sub-segment Total construction % shown
Slide 18: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS Government policy and stimulus continues to support an improving economy, especially in detached housing construction. Significant increase in renovation activity from redirected discretionary spend Monthly dwelling approvals1 (‘000 units, annualised) Alterations and additi
Slide 19: North Star
NORTH STAR Robust recovery of demand and spreads in Q2 FY2021 Underlying EBIT ($M) • Average steel spreads similar to 2H FY2020 with very low spreads in Q1 rapidly recovering across Q2 • Unfavourable translation impact on stronger A$:US$ 114.5 75.1 • Demand strengthened and mix normalised towards th
Slide 20: North Star
NORTH STAR The US economy has recouped an estimated three quarters of its recession output loss, led by auto and manufacturing Automotive1 Non-residential construction2 Manufacturing3 (Light vehicle sales, annualised million units) (Value of work put in place, US$Bn; ABI) (ISM purchasing managers’ i
Slide 21: Building Products Asia and North America
BUILDING PRODUCTS ASIA AND NORTH AMERICA Strong improvement on prior half driven by higher volumes and cyclical margin expansion Underlying EBIT ($M) China – EBIT $42.0M in 1H FY2021, up from $14.5M in 2H FY2020 • Mainly driven by higher volume on seasonality and recovery from COVID-19 impacts durin
Slide 22: Buildings North America
BUILDINGS NORTH AMERICA Core EBS business improved; unusually strong contribution from BlueScope Properties Group Underlying EBIT ($M) • Core engineered buildings business delivered stronger result on 2H FY2020 mainly due to tight cost control; demand and volumes stable on the prior half • Volumes r
Slide 23: New Zealand and Pacific Islands
NEW ZEALAND AND PACIFIC ISLANDS Significant turnaround due to strong domestic demand, improving prices and normalisation post government mandated shut Underlying EBIT ($M) • Performance improved substantially on 2H FY2020, as 1H FY2021 saw a return to normal operations post-COVID-19 government manda
Slide 24: Underlying Group EBIT Variance
UNDERLYING GROUP EBIT VARIANCE Improvement in underlying EBIT largely due to stronger spreads, improved costs and robust demand 1H FY2021 vs 1H FY2020 ($M) 1H FY2021 vs 2H FY2020 ($M) 530.6 530.6 44.3 (4.7) (4.5) Net spread increase $140.1M 48.5 120.9 Includes lower depreciation Includes lower depre
Slide 25: Financial framework
Financial framework 25
Slide 26: Financial Framework Underpinning Resilience
FINANCIAL FRAMEWORK UNDERPINNING RESILIENCE Strong focus on driving financial performance and disciplined allocation of capital Disciplined Returns Focus Robust Capital Structure Capital Allocation • ROIC > WACC on average through • Strong balance sheet, with a target • Invest to maintain safe and r
Slide 27: Returns Focus Delivering ROIC
RETURNS FOCUS DELIVERING ROIC Targeting returns above cost of capital through the cycle • ROIC1 is the primary Group ROIC Performance (%) measure of performance 20.0% 19.5% across all business units and is a key focus for the 11.0% Group. ROIC is a key 7.6% discipline for: – performance management F
Slide 28: Returns Focus Maximising Cash Generation
RETURNS FOCUS MAXIMISING CASH GENERATION Solid cash inflow in 1H FY2021 driven by earnings Net cash flow ($M) Net cash / (debt)1 ($M) (before investment exp and financing) (40) 2H 1H $M FY2019 FY2020 FY2020 FY2021 Reported EBITDA 1 1,754 844 289 772 (168) North Star expansion Adjust for other cash p
Slide 29: Robust Capital Structure Net Cash Position
ROBUST CAPITAL STRUCTURE NET CASH POSITION Strong balance sheet to deliver North Star expansion project Net debt / (cash) ($M) Target ~$400M • Maintained investment 262 grade 47 credit rating (64) (79) (128) • In light of economic Strong working capital uncertainty due to the performance in 2H AASB1
Slide 30: Ample Liquidity and Prudent Maturity Profile
ROBUST CAPITAL STRUCTURE AMPLE LIQUIDITY AND PRUDENT MATURITY PROFILE More than sufficient liquidity to cover CY2021 capex commitments, with a prudent debt maturity profile Liquidity ($M) Maturity profile2 ($M) (undrawn facilities and cash) 3,094 3,1441 Syndicated 530 530 Bank Facility 485 Reg-S Bon
Slide 31: Disciplined Capital Allocation Sustaining and Growth Capital
DISCIPLINED CAPITAL ALLOCATION SUSTAINING AND GROWTH CAPITAL Capital prioritised to highly value accretive North Star expansion project Capital management framework Capital and acquisition expenditure2 ($M) North Star Expansion2 Operating • Total project expected to cost ~US$700M Divestments Cash Fl
Slide 32: Disciplined Capital Allocation Shareholder Returns
DISCIPLINED CAPITAL ALLOCATION SHAREHOLDER RETURNS 6.0 cps interim dividend; buy-backs remain on hold. Strong track record of returns Dividends paid and buy-backs1 ($M) • Interim unfranked dividend of 6.0 cents per share 15.1% 15.2% retained Dividend EPS improvement Buy-back 337 from buy-backs (%) •
Slide 33: Segment guidance for 2H FY2021
3 Segment guidance for 2H FY2021 33
Slide 34: Segment Guidance for 2H FY2021
SEGMENT GUIDANCE FOR 2H FY2021 Outlook subject to assumptions and qualifiers referenced on page 36 Australian Steel Products North Star Building Products Asia & US • Expect a better result compared to 1H FY2021 • Expect stronger result compared to 1H FY2021 • Expect a softer result overall compared
Slide 35: Group outlook and summary
3 Group outlook and summary 35
Slide 36: 2H FY2021 Group Outlook
2H FY2021 GROUP OUTLOOK1 • At the beginning of 2H FY2021, order and despatch rates in key markets remain robust. Spot steel spreads in North America are materially higher than both 1H FY2021 and longer-term averages. However, it is uncertain whether these conditions will be sustained throughout the
Slide 37: BlueScope: A Resilient Business Delivering Returns Through the Cycle
BLUESCOPE: A RESILIENT BUSINESS DELIVERING RETURNS THROUGH THE CYCLE A very different type of steel company – one that is uniquely positioned to grow and deliver across our major markets Assets and Capital discipline Positioned capability and returns focus for growth • Strong operating leverage from
Slide 38: Questions
Ge BlueScope Questions
Slide 39: Additional Information: Overview of Emerging Breakthrough Ironmaking Technologies
Additional Information: Overview of Emerging Breakthrough Ironmaking Technologies 1 39
Slide 40: Overview of Emerging Breakthrough Ironmaking Technologies
OVERVIEW OF EMERGING BREAKTHROUGH IRONMAKING TECHNOLOGIES Emerging technologies for blast furnace applications from IEA Iron & Steel sector roadmap IEA Technology IEA Projected Note 1: Technology Readiness Level Year Available2 Readiness (Importance for Net Technology Level1 Zero Emissions) BlueScop
Slide 41: Overview of Emerging Breakthrough Ironmaking Technologies
OVERVIEW OF EMERGING BREAKTHROUGH IRONMAKING TECHNOLOGIES Other key emerging technologies from IEA Iron & Steel sector roadmap IEA Technology IEA Projected Note 1: Technology Readiness Level Year Available2 Readiness (Importance for Net Technology Level1 Zero Emissions) BlueScope Comments 9 DRI: Nat
Slide 42: BlueScope: A different kind of steel building products company
? BlueScope: A different kind of steel building products company 42
Slide 43: BlueScope: A Different Kind of Steel Building Products Company
BLUESCOPE: A DIFFERENT KIND OF STEEL BUILDING PRODUCTS COMPANY What makes us different? 1 TECHNOLOGY, BRANDING & CHANNELS 2 BUSINESS DIVERSIFICATION 3 COST COMPETITIVENESS 4 DISCIPLINED CAPITAL ALLOCATION 5 APPROACH TO SUSTAINABILITY 43
Slide 44: Technology, Branding & Channels
1 TECHNOLOGY, BRANDING & CHANNELS 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 marke
Slide 45: Technology, Branding & Channels: Brands
1 TECHNOLOGY, BRANDING & CHANNELS Brands – a portfolio of many well-known and respected names to support our premium branded positions Australia New Zealand Asia North America ® ® ® ® ® ® ® 45
Slide 46: Technology, Branding & Channels: Channels
1 TECHNOLOGY, BRANDING & CHANNELS Channels – clear focus on knowing our end customers and maintaining strong channels to market Australia New Zealand Asia North America ® ® ® ® ® ® 46
Slide 47: Business Diversification
2 BUSINESS DIVERSIFICATION Geographic diversity and increasing contribution from value-added products Underlying EBITDA by region BlueScope despatch volume mix 100% Buildings North America NZ & Pacific $79M 90% Building products 6% 80% Higher value Asia Australia added $232M 16% $705M 70% Aus & NZ c
Slide 48: Business Diversification
2 BUSINESS DIVERSIFICATION Broad exposure across geographies, largely focused on the building and construction industry BlueScope indicative despatch volume split by region and end-use segment Manufacturing, Other (Exports) Agri & Other Automotive North Star: exposed mainly to the automotive, Constr
Slide 49: Cost Competitiveness Australian Steel Products
3 COST COMPETITIVENESS AUSTRALIAN STEEL PRODUCTS Australian steelmaking breakeven at minimum recent spreads; benefits from vertical integration Asian steel spread1 & estimated steelmaking The value of vertical integration cash breakeven2 (US$/t) • Clear objective of optimising profitability across t
Slide 50: Cost Competitiveness North Star
3 COST COMPETITIVENESS NORTH STAR Strong EBITDA and cash generation through the cycle; industry leading margins; consistently full utilisation US$M EBITDA and spread (100% basis)1 EBIT margins3 (%) 600 8.9% U.S. mini-mill spread Moved to 100% 6.8% ownership of 524 EBITDA (100% basis) North Star 500
Slide 51: Disciplined Capital Allocation
4 DISCIPLINED CAPITAL ALLOCATION Balance sheet strength, and a disciplined approach to balancing investment for long- term growth and returns to shareholders Robust Balance Sheet Returns to Shareholders Investing for Long Term Growth Net debt / (cash) ($M) Dividends paid and buy-backs1 ($M) Capital
Slide 52: Disciplined Capital Allocation Growth Opportunities
4 DISCIPLINED CAPITAL ALLOCATION GROWTH OPPORTUNITIES Investing for the future across our portfolio through a returns focused process driving competition for capital Capital expenditure focus areas Examples of growth projects and opportunities Maintain Safe And North Star Reliable Operations Capacit
Slide 53: Digitally Transforming Our Business
4 DISCIPLINED CAPITAL ALLOCATION DIGITALLY TRANSFORMING OUR BUSINESS Delivering the next wave of customer, growth and productivity improvements through technology A clear framework for digital transformation Focus areas to speed-up digital adoption Provide • Clear strategy and direction leadership •
Slide 54: Digitally Transforming Our Business: Examples
4 DISCIPLINED CAPITAL ALLOCATION DIGITALLY TRANSFORMING OUR BUSINESS Examples of digital initiatives and foundations Digital manufacturing Supply chain connectivity Building capabilities • Improve quality, reduce unit • Improve service levels and efficiency • Digital operating model with costs and g
Slide 55: Investing in Growth at ASP
4 DISCIPLINED CAPITAL ALLOCATION INVESTING IN GROWTH AT ASP A wide range of low capital growth opportunities in intermaterial applications TRUECORE® steel TRU-SPEC® coil plate Cladding & facade applications • Sales of TRUECORE® steel continue to • Investing in a new 160kt stretch levelling • AZURE®
Slide 56: Approach to Sustainability: Our Bond
5 APPROACH TO SUSTAINABILITY OUR BOND OUR PURPOSE We create and inspire smart solutions in steel, to strengthen our communities for the future 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 Our
Slide 57: Approach to Sustainability: FY2020 Reporting Suite
5 APPROACH TO SUSTAINABILITY FY2020 REPORTING SUITE Reporting under the requirements Reporting aligned with UN SDGs, Reporting in response to Reporting in alignment with the of the Corporations Act 2001 and TCFD recommendations, and the Australian Modern Australian Voluntary Tax ASX Listing Rules GR
Slide 58: Approach to Sustainability: Safety
5 APPROACH TO SUSTAINABILITY SAFETY Ongoing alignment with evolving industry reporting standards • Continued plateau in lagging indicators, with minor fluctuation, observed following an improvement in performance from FY2002 to FY2015 • Injury profile continues to show a predominance of musculoskele
Slide 59: Approach to Sustainability: Sustainable Supply Chain
5 APPROACH TO SUSTAINABILITY SUSTAINABLE SUPPLY CHAIN We foster responsible business practices and uphold human rights through engagement, risk assessment and improvement activities. We seek to partner with suppliers who share our core values Our Approach Our Progress to December 2020 • Prioritised
Slide 60: Approach to Sustainability: Inclusion and Diversity
5 APPROACH TO SUSTAINABILITY INCLUSION AND DIVERSITY Continued improvement in female representation notwithstanding significant reduction in recruitment during pandemic • In 1H FY2021, we launched a five-year global Inclusion and Diversity strategic framework, which is focused on diverse workforces,
Slide 61: Approach to Sustainability: Supporting Our Communities
5 APPROACH TO SUSTAINABILITY SUPPORTING OUR COMMUNITIES We seek opportunities to strengthen our local communities through encouraging employee participation and collaboration, and through financial and in-kind support Throughout the half, many of our BlueScope’s community investment framework busine
Slide 62: Additional Information: Group-level Material
Additional Information: Group-level Material 1 62
Slide 63: Financial Headlines
FINANCIAL HEADLINES SIX MONTHS ENDED 1H FY21 vs $M (unless marked) 31 DEC 2019 31 DEC 2020 1H FY20 Total revenue 5,882.6 5,831.4 External despatches of steel products (kt) 3,615.0 3,808.0 EBITDA − Underlying 1 564.3 772.5 EBIT − Reported 293.7 529.8 − Underlying 1 302.4 530.6 NPAT − Report
Slide 64: Reconciliation Between Reported and Underlying EBIT and NPAT
RECONCILIATION BETWEEN REPORTED AND UNDERLYING EBIT AND NPAT1 1H FY2020 1H FY2021 $M EBIT $M NPAT $M EBIT $M NPAT $M Reported results 293.7 185.8 529.8 330.3 Underlying adjustments Discontinued Business (gains) / losses 6.8 7.6 (6.5) (6.0) Business development and acquisition costs 4.8 2.2 3.8 2.2 R
Slide 65: Underlying Earnings, Net Finance and Tax Cost
UNDERLYING EARNINGS, NET FINANCE AND TAX COST 1H 2H 1H $M Breakdown of net finance costs FY2020 FY2020 FY2021 Reg-S Bonds 9.6 Underlying EBIT 302.4 261.6 530.6 Syndicated bank facility charges 6.0 Underlying finance costs (37.4) (38.0) (37.2) Leases 14.0 Amortisation of borrowing costs Interest reve
Slide 66: Summary of Financial Items by Segment
SUMMARY OF FINANCIAL ITEMS BY SEGMENT Sales revenue Total steel despatches $M 1H FY2020 2H FY2020 FY2020 1H FY2021 '000 tonnes 1H FY2020 2H FY2020 FY2020 1H FY2021 Australian Steel Products 2,692.1 2,726.0 5,418.1 2,739.5 Australian Steel Products 1,398.1 1,535.8 2,933.8 1,596.2 North Star BlueScope
Slide 67: Cash Flow Statement
CASH FLOW STATEMENT $M 1H FY2020 2H FY2020 1H FY2021 Reported EBITDA 555.7 288.7 771.7 Adjust for other cash profit items (6.7) 213.4 (13.6) Cash from operations 549.0 502.1 758.1 Working capital movement (inc provisions) (248.7) 147.9 (132.4) Gross operating cash flow 300.3 650.0 625.7 Financing co
Slide 68: Working Capital
WORKING CAPITAL Continued discipline in working capital management Included approximately $100M unfavourable timing of working capital Includes approximately $150M favourable 1,653 timing of working capital 1,456 1,353 1,332 1,269 4 1,133 (64) 184 (60) Includes $80M Mainly FX and reduction in sale o
Slide 69: Inventory Movement
INVENTORY MOVEMENT Rigorous approach to inventory management RM $591.3M WIP $542.8M RM $601.6M FG $600.8M WIP $582.8M $60.4M decrease comprised of segmental movements: Other $246.9M FG $569.7M (including eliminations and other of $5.4M) Other $167.3M 104.3 (93.4) 1981.8 ASP – predominantly higher ra
Slide 70: Balance Sheet
BALANCE SHEET $M 31 Dec 2019 30 Jun 2020 31 Dec 2020 Assets Cash 1,273.4 1,399.5 1,495.1 Receivables and Contract Assets * 1,177.2 1,153.4 1,089.3 Inventory * 2,061.3 1,981.8 1,921.4 Property, Plant & Equipment 4,154.7 4,175.3 4,237.0 Right Of Use Assets 387.0 338.0 316.2 Intangible Assets 1,816.1 1
Slide 71: Committed Debt Facilities as at 31 December 2020
COMMITTED DEBT FACILITIES AS AT 31 DECEMBER 2020 Committed Drawn Maturity Local currency A$M A$M Syndicated Bank Facility - Tranche 1 Aug 2023 A$400M A$400M - - Tranche 2 Aug 2024 A$400M A$400M - - Tranche 3 May 2022 A$405M A$405M - Reg-S Bonds May 2023 US$300M A$390M A$390M Inventory Finance Sep 20
Slide 72: Indicative Half Year EBIT Sensitivities
INDICATIVE HALF YEAR EBIT SENSITIVITIES1 Sensitivities may vary subject to volatility in prices, currencies and market dynamics – refer to page 77 Australian Steel Products segment New Zealand Steel & Pacific Steel segment North Star segment +/- US$10/t move in average benchmark hot rolled +/- US$10
Slide 73: Additional Information: Segment Material
Additional Information: Segment Material 1 73
Slide 74: Australian Steel Products: Financial and Despatch Summaries
AUSTRALIAN STEEL PRODUCTS Financial and despatch summaries Key segment financial items Despatches breakdown $M unless marked 1H FY2020 2H FY2020 FY2020 1H FY2021 '000 Tonnes 1H FY2020 2H FY2020 FY2020 1H FY2021 Revenue 2,692.1 2,726.0 5,418.1 2,739.5 Hot rolled coil 269.3 278.9 548.2 286.1 Underlyin
Slide 75: Australian Steel Products: Underlying EBIT Variance
AUSTRALIAN STEEL PRODUCTS Underlying EBIT variance 1H FY2021 vs 1H FY2020 ($M) 1H FY2021 vs 2H FY2020 ($M) 259.1 259.1 0.4 (0.6) Net spread increase $89.2M 42.1 Net spread increase $42.4M 44.1 (0.5) (4.0) Conversion & other costs ($M) Cost improvement initiatives 8 177.2 Conversion & other costs ($M
Slide 76: Australian Steel Products: Spot Spreads
AUSTRALIAN STEEL PRODUCTS 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’ $800 representation based on simple input blend of 1.5t iron ore fines and 0.71t har
Slide 77: Australian Steel Products: Relationships with Benchmark Pricing
AUSTRALIAN STEEL PRODUCTS 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 Steel prices correlation between realised and benchmark prices can vary within a given half ye
Slide 78: Australian Steel Products: Despatch Mix
AUSTRALIAN STEEL PRODUCTS Despatch mix (Mt) 1H FY2021 Product Mix 1.60 1.54 1.40 0.35 Export Export 0.39 0.26 Domestic - 0.07 externally sourced 0.06 0.06 HRC Metal Coated Plate Painted CRC Other inc ext sourced Domestic - BSL 1.18 1.08 1.09 manufactured Domestic 1H FY2020 2H FY2020 1H FY2021 78
Slide 79: Australian Steel Products: Revenue and Costs
AUSTRALIAN STEEL PRODUCTS 1H FY2021 Revenue 1H FY2021 Underlying costs (to EBIT line) A$2,740M Non-steel business costs relate to: A$2,480M • Export coke sales Non-steel business • Cold ferrous feed to Liberty Conversion & overhead Non-steel business OneSteel (scrap pool) components (in order of val
Slide 80: Australian Steel Products: Residential Demand
AUSTRALIAN STEEL PRODUCTS Residential demand held up during 2020 despite pandemic; leading indicators highlight stimulus driven rebound Long-Term Dwelling Approvals: rolling 12 months1 (‘000) Dwelling Commencements: by halves2 (‘000) Detached approvals towards upper end of historic range despite pan
Slide 81: Australian Steel Products: Non-Residential Activity
AUSTRALIAN STEEL PRODUCTS Approvals and activity relatively stable, outperforming initial expectations of pandemic impact Non-Residential Building Approvals: rolling 12 months1 (A$bn) Non-Residential Work Done: by halves2 (A$bn) Despite recent softening, approvals remain at historically robust level
Slide 82: North Star: Financial and Despatch Summaries
NORTH STAR Financial and despatch summaries Key segment financial items (A$M) Key segment financial items (US$M) $M unless marked 1H FY2020 2H FY2020 FY2020 1H FY2021 $M unless marked 1H FY2020 2H FY2020 FY2020 1H FY2021 Revenue 865.4 847.6 1,713.0 785.9 Revenue 592.0 557.1 1,149.1 569.1 Underlying
Slide 83: North Star: Underlying EBIT Variance
NORTH STAR Underlying EBIT variance 1H FY2021 vs 1H FY2020 ($M) 1H FY2021 vs 2H FY2020 ($M) Net spread decrease 114.5 $46.2M (29.9) Net spread increase $5.8M (4.3) 75.1 10.1 (3.3) 1.2 (16.3) (0.7) 69.6 (9.2) 69.6 8.4 (6.4) 1H Prices Raw Conversion Volume FX 1H 2H Prices Raw Conversion Volume FX 1H F
Slide 84: North Star: Expansion Capital Spend Profile
NORTH STAR North Star expansion capital spend profile Accounting capital spend (incl. capital accruals) Cash capital spend Total up to 2H FY2021 FY2022 Total up to 2H FY2021 FY2022 1H FY2021 1H FY2021 30 Jun 2020 (expected) (expected) 30 Jun 2020 (expected) (expected) US$M 140.7 212.7 ~200 ~150 US$M
Slide 85: North Star: Regional Blast Furnace Closures and Capacity
NORTH STAR In North Star’s region, blast furnace closures will more than offset the return of temporarily idled mills and new capacity projects coming online ME VT Permanent Distance from HRC Capacity NH Closures / Additions North Star Change (on 2019) ND MN NY Within Region North Star WI SD MI US S
Slide 86: Building Products Asia & North America: Financial and Despatch Summaries
BUILDING PRODUCTS ASIA & NORTH AMERICA Financial and despatch summaries Key segment financial items Despatches by business $M unless marked 1H FY2020 2H FY2020 FY2020 1H FY2021 ‘000 metric tonnes 1H FY2020 2H FY2020 FY2020 1H FY2021 Revenue Thailand 132.8 172.4 305.2 175.0 1,492.1 1,285.4 2,777.5 1,
Slide 87: Building Products Asia & North America: Underlying EBIT Variance
BUILDING PRODUCTS ASIA & NORTH AMERICA Underlying EBIT variance 1H FY2021 vs 1H FY2020 ($M) 1H FY2021 vs 2H FY2020 ($M) (5.9) 150.3 (7.1) 150.3 Net spread increase $59.6M 12.3 4.1 51.0 Net spread increase $23.6M 7.7 97.0 16.3 80.2 (1.9) 75.1 (1.0) 8.3 (35.5) 1H Export Domestic Raw Conversion Volume
Slide 88: Buildings North America: Financial and Despatch Summaries
BUILDINGS NORTH AMERICA Financial and despatch summaries Key segment financial items (A$M) Key segment financial items (US$M) $M unless marked 1H FY2020 2H FY2020 FY2020 1H FY2021 $M unless marked 1H FY2020 2H FY2020 FY2020 1H FY2021 Revenue 611.9 506.6 1,118.5 601.8 Revenue 418.3 332.6 750.9 435.7
Slide 89: Buildings North America: Underlying EBIT Variance
BUILDINGS NORTH AMERICA Underlying EBIT variance 1H FY2021 vs 1H FY2020 ($M) 1H FY2021 vs 2H FY2020 ($M) Net margin increase $68.6M 15.3 (19.5) 8.7 70.5 Net margin increase 0.3 (4.9) 70.5 (3.0) $61.6 11.2 9.1 44.6 41.3 24.4 13.5 1H Prices1 Raw Conversion Volume FX 1H 2H Prices1 Raw Conversion Volume
Slide 90: New Zealand & Pacific Islands: Financial and Despatch Summaries
NEW ZEALAND & PACIFIC ISLANDS Financial and despatch summaries Key segment financial items Despatches breakdown $M unless marked 1H FY2020 2H FY2020 FY2020 1H FY2021 '000 Tonnes 1H FY2020 2H FY2020 FY2020 1H FY2021 Revenue 420.3 372.1 792.4 436.2 Domestic despatches Underlying EBITDA 39.5 12.7 52.2
Slide 91: New Zealand & Pacific Islands: Underlying EBIT Variance
NEW ZEALAND & PACIFIC ISLANDS Underlying EBIT variance 1H FY2021 vs 1H FY2020 ($M) 1H FY2021 vs 2H FY2020 ($M) 57.4 Includes lower depreciation 57.4 Includes lower depreciation of $17M including impact of of $22M including impact of the NZPI asset write-down the NZPI asset write-down 16.2 20.4 10.1
Slide 92: New Zealand & Pacific Islands: Despatch Mix
NEW ZEALAND & PACIFIC ISLANDS Despatch mix (Mt) 323.1 1H FY2021 Product Mix 314.8 1.3 8.1 Export long 285.9 3.6 70.0 Export flat Domestic 76.0 103.7 106.7 Domestic long 84.9 HRC Plate 72.0 CRC Metal Coated Painted 145.8 145.1 Domestic flat Other flat products 106.6 Pacific Steel long products 1H FY2
Slide 93: New Zealand & Pacific Islands: Economic Recovery
NEW ZEALAND & PACIFIC ISLANDS Successful pandemic containment has seen a solid economic recovery, especially led by construction activity Residential Building Consents: rolling 12 months1 (‘000) Residential Work Put in Place: by quarters2 (NZ$bn) Despite pandemic and immigration impact, housing dema
Slide 94: New Zealand & Pacific Islands: East Asian Rebar Price
NEW ZEALAND & PACIFIC ISLANDS 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 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Source: SBB
Slide 95: Glossary
GLOSSARY 1H Six months ended 31 December in the relevant financial year FY2020 12 months ending 30 June 2020 1H FY2019 Six months ended 31 December 2018 FY2021 12 months ending 30 June 2021 1H FY2020 Six months ended 31 December 2019 HRC Hot rolled coil steel 1H FY2021 Six months ended 31 December 2
Slide 96: 1H FY2021 Financial Results Presentation
1H FY2021 Financial Results Presentation Mark Vassella Managing Director and Chief Executive Officer Tania Archibald Chief Financial Officer 22 February 2021 BlueScope Steel Limited. ASX Code: BSL ABN: 16 000 011 058 Level 11, 120 Collins St, Melbourne, VIC, 3000