Steel & Tube Holdings Limited · NZX:STU
Steel & Tube — FY2005 Earnings Presentation
54 slides from Steel & Tube's earnings presentation, Aug 16, 2005
Slide 1: Analysts Presentation August 2005
1 Analysts Presentation Augst 2005
Slide 2: Presentation to Analysts
Presentation to Analysts By Nick Calavrias – Chief Executive Officer Tony Candy – Chief Financial Officer 16 August 2005 2 Analysts Presentation Augst 2005
Slide 3: Company Objective
Company Objective VISION To be a well respected distributor of steel and allied products Key Measures of Success delivering superior returns to our shareholders Total shareholder return OPERATING STYLE which is in the upper quartile of NZ listed To provide on a consistent basis first class service t
Slide 4: Operations
OPERATIONS 4 Analysts Presentation Augst 2005
Slide 5: Steel & Tube Divisional Locations
Steel & Tube Divisional Locations Whangarei Corporate Office Steel Distribution Auckland Mt Maunganui Steel Processing Tauranga Piping Systems Hamilton Fastening Systems Rotorua Gisborne Roofing Products New Plymouth Reinforcing & Fabrication Napier Hurricane Wire Products Palmerston North Nelson Hu
Slide 6: Company Overview
Company Overview Established in 1953, Steel & Tube Holdings Limited listed on the New Zealand Stock Exchange in 1967 and is ranked number 19 by market capitalisation. OneSteel Limited (Australia) currently owns 50.3% of the issued capital. Steel & Tube Holdings Limited is New Zealand’s largest distr
Slide 7: Analysts Presentation Augst 2005
7 Analysts Presentation Augst 2005
Slide 8: Analysts Presentation Augst 2005
8 Analysts Presentation Augst 2005
Slide 9: Analysts Presentation Augst 2005
9 Analysts Presentation Augst 2005
Slide 10: Analysts Presentation Augst 2005
10 Analysts Presentation Augst 2005
Slide 11: Analysts Presentation Augst 2005
11 Analysts Presentation Augst 2005
Slide 12: Analysts Presentation Augst 2005
12 Analysts Presentation Augst 2005
Slide 13: Analysts Presentation Augst 2005
13 Analysts Presentation Augst 2005
Slide 14: Analysts Presentation Augst 2005
14 Analysts Presentation Augst 2005
Slide 15: Analysts Presentation Augst 2005
15 Analysts Presentation Augst 2005
Slide 16: Analysts Presentation Augst 2005
16 Analysts Presentation Augst 2005
Slide 17: Steel and Tube NZ Operations Sales by Division
Steel and Tube NZ Operations Steel and Tube NZ Operations YE June 2004 Sales YE June 2005 Sales Fasteners Fasteners Hurricane Hurricane Piping Systems Piping Systems Reinforcing Reinforcing Roofing Roofing Steel Distribution Steel Distribution 17 Analysts Presentation Augst 2005
Slide 18: Steel and Tube Holdings Group Sales
Steel and Tube Holdings Group Steel and Tube Holdings Group YE June 2004 Sales YE June 2005 Sales Other Other 39% 39% City City 61% 61% 18 Analysts Presentation Augst 2005
Slide 19: Trading Environment
TRADING ENVIRONMENT 19 Analysts Presentation Augst 2005
Slide 20: Annual Exports
Annual Exports (June Year Ends) 35,000 30,000 25,000 20,000 % 15,000 10,000 5,000 - YE Jun 2000 YE Jun 2001 YE Jun 2002 YE Jun 2003 YE Jun 2004 YE Jun 2005 Exports 26,111 32,000 32,332 29,291 29,864 30,637 20 Analysts Presentation Augst 2005
Slide 21: Net Migration
Net Migration Permanent & Long-Term June year Ends 50,000 40,000 30,000 20,000 000's 10,000 0 -10,000 -20,000 1995 A 1996 A 1997 A 1998 A 1999 A 2000 A 2001 A 2002 A 2003 A 2004 A 2005 A Migration 22,730 29,510 16,770 450 -11,370 -9,760 -9,270 32,820 42,520 22,010 8,590 Source:- Stats NZ 21 Analysts
Slide 22: Net Migration (Monthly)
Net Migration Permanent & Long-Term 2,500 2,000 1,500 1,000 500 000's 0 -500 -1,000 -1,500 -2,000 Jul04 Aug04 Sep04 Oct04 Nov04 Dec04 Jan05 Feb05 Mar05 Apr05 May05 Jun05 Migration 1,590 890 2,160 2,200 1,570 320 1,680 1,760 -1,440 -730 -1140 -280 Source:- Stats NZ 22 Analysts Presentation Augst 2005
Slide 23: Consent Numbers
Number of building Consents 1991 -2005 (June year ends) 60,000 All Buildings Total Residential New Houses Commercial New Apartments 50,000 40,000 Consent Numbers 30,000 20,000 10,000 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 1991 1992 1993 1994 1995 1996 1997 1998
Slide 24: Consent Value
Building Consents 1991 -2005 $M Amount (June year ends) 12,000 All Buildings Total Residential New Houses Commercial 10,000 New Apartments 8,000 Consent Value - $M 6,000 4,000 2,000 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 1991 1992 1993 1994 1995 1996 1997 1998 1
Slide 25: Steel Volumes 1982-2005
Hera Steel Volumes 1982-2005 Imports & Local Production Combined (June year ends) 180000 160000 Total Steel Plate Hot Rolled Sections RHS 140000 120000 100000 Tonnes 80000 60000 40000 20000 0 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 200
Slide 26: Annual GDP
Annual GDP Averaged 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Mar06 Mar93 Mar94 Mar95 Mar96 Mar97 Mar98 Mar99 Mar00 Mar01 Mar02 Mar03 Mar04 Mar05 F Grow th 1.1% 6.4% 5.3% 4.1% 3.5% 1.6% 0.4% 5.1% 2.3% 3.5% 4.6% 3.6% 4.2% 2.1% 26 Analysts Presentation Augst 2005
Slide 27: Key Business Issues
KEY BUSINESS ISSUES 27 Analysts Presentation Augst 2005
Slide 28: Key Business Issues
Key Business Issues ! General costs to run the business increase by about 2% year on year ! Wages increase by about $2.4 million year on year ! Combined, our operational expenses increase by approximately 5% p.a. 28 Analysts Presentation Augst 2005
Slide 29: Key Business Issues
Key Business Issues ! Competitors attempting to take market share away from us ! Margins are under pressure from both customers and competitors ! Steel price and supply volatility (refer graphs) 29 Analysts Presentation Augst 2005
Slide 30: Exchange Rate
Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 USD 227 257 267 282 335 332 360 421 580 605 605 570 570 560 560 570 550 540 0 16% 20% 27% 51% 50% 62% 85% 156% 167% 167% 151% 151% 147% 147% 151% 142% 138% NZD 528 531 574 54
Slide 31: Exchange Rate
Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 USD 260 265 300 315 355 340 355 375 566 556 555 555 545 540 540 540 535 510 0 6% 20% 26% 42% 36% 42% 44% 118% 114% 113% 113% 110% 108% 108% 108% 106% 96% NZD 604 548 645 606
Slide 32: Exchange Rate
Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 USD 285 285 297 297 365 365 386 410 525 623 625 665 665 674 629 641 666 598 - 0% 4% 4% 28% 28% 35% 44% 84% 119% 119% 133% 133% 136% 121% 125% 134% 110% NZD 662 589 638 571 66
Slide 33: Financials
FINANCIALS 33 Analysts Presentation Augst 2005
Slide 34: For the years ending June 2005
For the 5 years ending June 2005 ! EBIT / Sales margins increased 74.0% to 13.3% ! ROFE increased 125.0% to 34.8% ! Return on SHF increased 144.0% to 26.8% ! Earnings per share increased 206.0% to 41 cents ! NPAT increased by 170.0% to $36.06m 34 Analysts Presentation Augst 2005
Slide 35: NZ Operations EBITA/Sales %
NZ Operations EBITA/Sales % (June year ends) 15.0% 10.0% % 5.0% 0.0% 2000 2001 2002 2003 2004 2005 EBITA/Sales 8.4% 8.8% 9.9% 10.9% 12.5% 13.9% 35 Analysts Presentation Augst 2005
Slide 36: Average ROFE NZ Operations
Average ROFE NZ Operations (June year ends) 35.0% 30.0% 25.0% 20.0% % 15.0% 10.0% 5.0% 0.0% 2000 2001 2002 2003 2004 2005 ROFE 15.5% 15.6% 20.5% 24.9% 25.3% 34.8% 36 Analysts Presentation Augst 2005
Slide 37: New Zealand Operations Return on SHF's
New Zealand Operations Return on SHF's (June year ends) 50.0 % to SHF's 25.0 0.0 1999 2000 2001 2002 2003 2004 2005 NPBT% 12.4 15.0 18.2 22.7 26.3 35.1 41.0 NPAT% 6.6 11.0 11.8 14.8 16.9 22.7 26.8 37 Analysts Presentation Augst 2005
Slide 38: Total Dividend and Earnings Per Share
Total Dividend and Earnings Per Share (June year ends) 35.0 30.0 (Cents) 25.0 20.0 15.0 10.0 5.0 0.0 1999 2000 2001 2002 2003 2004 2005 NZ EPS 11.4 13.4 16.3 20.9 24.5 32.4 41.0 TOTAL DIVD 8.0 13.0 16.0 29.0 23.0 37.0 32.0 DPS % of EPS 70% 97% 98% 139% 94% 114% 78% 38 Analysts Presentation Augst 200
Slide 39: Interim, Special & Final Dividend Paid per share
Interim, Special & Final Dividend Paid per share (June year ends) 20.0 (Cents) 15.0 10.0 5.0 0.0 1999 2000 2001 2002 2003 2004 2005 Int DPS 4.0 6.0 7.0 9.0 11.0 12.0 15.0 Final DPS 4.0 7.0 9.0 10.0 12.0 15.0 17.0 SPEC DIVD 10.0 10.0 39 Analysts Presentation Augst 2005
Slide 40: Shareholder Value
Shareholder Value 12 mths to 12 mths to 12 mths to 12 mths to VarJune 2005 June 2002 June 2003 Jun 2004 June 2005 to June 2004 Tax Paid Profit: $18.28m $21.52m $28.46m $36.06m 27.0% ROFE: 20.5% 24.9% 25.3% 34.8% 38.0% ROSHF: 14.8% 16.9% 22.7% 26.8% 18.0% EPS 20.8 cents 24.5 cents 32.4 cents 41.0 cen
Slide 41: Score Card
Score Card So, How did we do against our objectives of: ! Zero LTI’s ! TSR in upper quartile of New Zealand listed companies 41 Analysts Presentation Augst 2005
Slide 42: Health and Safety
Health and Safety ! Zero lost time injuries for the 12 months ended 30 June 2005 42 Analysts Presentation Augst 2005
Slide 43: Shareholder Value
Shareholder Value Total shareholder value increased by $85 million for the year ended June 2005 and $427 million for the last five years 43 Analysts Presentation Augst 2005
Slide 44: Total Shareholder Return
Total Shareholder Return ! Steel & Tube recognised as the third best performing share price in % terms when measured against total shareholder returns; - Year on year, for the four years ending June 2005 (319% increase) 44 Analysts Presentation Augst 2005
Slide 45: Steel & Tube Share Price
Steel & Tube Share Price 6.00 4.80 5.00 4.00 $'s 3.00 2.00 1.35 1.00 - Jun00 Jun01 Jun02 Jun03 Jun04 Jun05 45 Analysts Presentation Augst 2005
Slide 46: Steel & Tube (Gross) vs NZSX Index
Steel & Tube (Gross) vs NZSX 50 Index - Relative Performance 169% 3.00 2.50 2.00 1.50 1.00 Jun00 Jun01 Jun02 Jun03 Jun04 Jun05 0.50 Note: NZSX 40 Gross Index prior to 1 January 2001 46 Analysts Presentation Augst 2005
Slide 47: Steel & Tube vs NZSE Small Cap Index
Steel & Tube vs NZSE Small Cap Index - Relative Performance 3.00 2.50 114% 2.00 1.50 1.00 Jun00 Jun01 Jun02 Jun03 Jun04 Jun05 0.50 47 Analysts Presentation Augst 2005
Slide 48: Market Outlook
MARKET OUTLOOK 48 Analysts Presentation Augst 2005
Slide 49: 2005/06 Market Outlook
2005 / 06 Market Outlook ! GDP growth expected to reduce from 4.2% to 2.1% for the year ending March 2006 ! Net migration growth has reduced considerably ! Strength in consumer spending still strong 49 Analysts Presentation Augst 2005
Slide 50: 2005/06 Market Outlook
2005 / 06 Market Outlook ! Average prices for steel has softened in US$ terms ! Construction of new dwellings still historically strong 50 Analysts Presentation Augst 2005
Slide 51: 2005/06 Market Outlook
2005 / 06 Market Outlook ! Commercial construction and infrastructure spending at record levels ! Rural New Zealand and the manufacturing sector to remain steady with some upside if the NZ$ weakens 51 Analysts Presentation Augst 2005
Slide 52: Corporate Activity / Strategic Direction
Corporate Activity / Strategic Direction ! Core business definition - The distribution and steel and allied products - Base metal manufacturing 52 Analysts Presentation Augst 2005
Slide 53: Corporate Activity / Strategic Direction
Corporate Activity / Strategic Direction ! Seeking more growth opportunities through ‘bolt-on’ type acquisitions in the short term 53 Analysts Presentation Augst 2005
Slide 54: Thank you for your interest in Steel & Tube
Thank you for your interest in Steel & Tube 54 Analysts Presentation Augst 2005