Slide 1: 3Q 2013 Operating Performance
3Q 2013 Operating Performance October 24, 2013
Slide 2: 3Q Operating Performance agenda
^ 3Q Operating Performance 3Q Operating Performance 3Q Operating Performance Consolidated Performance Consolidated Performance - POSCO Operating Performance - POSCO Operating Performance - Subsidiaries Performance - Subsidiaries Performance Business Environment Business Environment Business Environm
Slide 3: Consolidated Performance: Income
3 POSCO Earnings Release |October 24, 2013 Revenue Operating Profit Net Profit 2012.3Q 2013.2Q 2013.3Q 2012.3Q 2013.2Q 2013.3Q 2012.3Q 2013.2Q 2013.3Q 15,739 15,603 1,020 903 6.5% 5.8% 723 241 15,150 4.2% 633 564 (billion KRW) (billion KRW) Operating Margin Operating profit decreased due to major se
Slide 4: Consolidated Performance: Income by Sector
Revenue Operating Profit 2012.3Q 2013.3Q Steel Non-Steel (billion KRW) Revenue Revenue Revenue Operating Profit Operating Profit Operating Profit Net Profit Net Profit Net Profit (billion KRW) 2012.3Q 2013.2Q 2013.3Q 2012.3Q 2013.2Q 2013.3Q 2012.3Q 2013.2Q 2013.3Q Steel 13,263 12,207 11,716 851 743
Slide 5: Consolidated Performance: Financial Structure
5 Assets Liabilities Equity 2012.3Q 2013.2Q 2013.3Q 2012.3Q 2013.2Q 2013.3Q 2012.3Q 2013.2Q 2013.3Q 79,662 83,707 37,453 39,756 88.7% 90.5% 42,209 43,951 37,736 82.7% 45,604 83,340 Efforts continued to enhance financial soundness through issuing hybrid bond and other measures (billion KRW) (billion
Slide 6: Summarized Statements of Income
6 2012.3Q 2013.2Q 2013.3Q 2012.3Q 2013.2Q 2013.3Q QoQ(%) Revenue Revenue 15,739 15,603 15,150 ^ 2.9 Gross Profit Gross Profit 1,924 1,858 1,547 ^ 16.7 (Gross Margin) (Gross Margin) (12.2%) (11.9%) (10.2%) - Selling & Admin. Expenses Selling & Admin. Expenses 904 955 914 ^ 4.3 Operating Profit Operat
Slide 7: Summarized Statements of Financial Position
7 2012.3Q 2013.2Q 2013.3Q 2012.3Q 2013.2Q 2013.3Q QoQ (%) Current Assets Current Assets 33,997 32,079 30,976 ^ 3.4 Cash & Financial Goods 6,530 6,322 6,858 + 8.5 Accounts Receivable 12,084 12,208 11,187 ^ 8.4 Inventories 11,523 10,044 9,654 ^ 3.9 Non-Current Assets Non-Current Assets 45,665 51,628 5
Slide 8: POSCO Operating Performance
^ 3Q Operating Performance 3Q Operating Performance 3Q Operating Performance - Consolidated Performance - Consolidated Performance POSCO Operating Performance POSCO Operating Performance - Subsidiaries Performance - Subsidiaries Performance Business Environment Business Environment Business Environm
Slide 9: Production and Sales
9 Crude Steel Production Finished Product Sales 2012.3Q 2013.2Q 2013.3Q 2012.3Q 2013.2Q 2013.3Q 2012.3Q 2013.2Q 2013.3Q Carbon Steel 9,207 8,385 8,434 S T S 455 464 491 2012.3Q 2013.2Q 2013.3Q Domestic 5,216 4,927 4,791 Export 3,711 3,487 3,480 Inventory 952 909 835 9,662 8,849 8,925 8,927 8,414 8,2
Slide 10: Sales by Product
10 Automobile* Home Appliances Shipbuilding 2012.3Q 2013.2Q 2013.3Q 2012.3Q 2013.2Q 2013.3Q 2012.3Q 2013.2Q 2013.3Q 1,974 2,037 621 606 896 791 2012.3Q 2013.2Q 2013.3Q 2012.3Q 2013.2Q 2013.3Q YoY QoQ Hot-Rolled 2,116 1,789 1,824 ^ 13.8% + 2.0% Plate 1,535 1,464 1,389 ^ 9.5% ^ 5.1% Wire Rod 505 557 6
Slide 11: POSCO Income
11 Revenue Operating Profit 2012.3Q 2013.2Q 2013.3Q 2012.3Q 2013.2Q 2013.3Q 2012.3Q 2013.2Q 2013.3Q Carbon Steel 877 794 773 (billion KRW) 8,910 7,740 7,411 838 703 443 9.4% 9.1% 6.0% Revenue and OP subsided due to sales price decline and cost increase [ Average Selling Price ] POSCO Earnings Releas
Slide 12: POSCO Financial Structure
12 2013.2Q 2013.3Q 2013.2Q 2013.3Q 2013.2Q 2013.3Q 53,345 12,711 40,634 Assets Liabilities Equity 53,737 (billion KRW) (billion KRW) 31.3% 9,056 Debt* 7,847 11,587 Debt* ^ 1,209 42,150 27.5% Liabilities ratio was lowered on efforts to secure financial soundness including debt repayment POSCO Earning
Slide 13: Product and Cost Competitiveness; Financial Soundness
13 Product and Cost Competitiveness (%) 2012 2013.3Q WF/WB Sales ratio 17.1 22.5 POSCO Earnings Release |October 24, 2013 Sales of World First/World Best products - Expanded high-strength tire cord supply, Replaced imported AHSS* *AHSS: Advanced high-strength steel (thousand tons) '13.2Q '13.3Q Auto
Slide 14: Key Activities
14 Strengthening STS Competitiveness POSCO Earnings Release |October 24, 2013 Completed Turkey STS CR mill (Aug. '13, 200 thousand tons/yr) - Respond high-end STS demand inc. auto / home appliances - Global STS CR ratio went up to 76% from 70% Completed Pohang #4 STS steelmaking plant (Jul. '13, 700
Slide 15: Subsidiaries Performance
^ 3Q Operating Performance 3Q Operating Performance 3Q Operating Performance - Consolidated Performance - Consolidated Performance - POSCO Operating Performance - POSCO Operating Performance Subsidiaries Performance Subsidiaries Performance Business Environment Business Environment Business Environm
Slide 16: Subsidiaries Performance
16 Daewoo International POSCO Chemtech 7.2% 6.6% 7.3% 320 302 327 23 20 24 POSCO Energy 10.2% 10.3% 7.9% 627 756 675 64 78 53 POSCO E&C 5.9% 6.5% 4.6% 1,774 2,331 1,931 104 151 89 2012.3Q 2013.2Q 2013.3Q 4,236 4,032 4,049 36 53 23 0.8% 1.3% 0.6% 2012.3Q 2013.2Q 2013.3Q 2012.3Q 2013.2Q 2013.3Q 2012.3
Slide 17: Subsidiaries Key Activities
17 Steel Trading Energy Chem · Mat'l Infrastructure POSCO Specialty Steel : Vietnam Electric Arc Furnace (long product) project on schedule - Construction of section steel/rebar mill with progress rate of 72% (1 million tons/yr, completion in Dec/E '14) POSCO Energy : Commercial operation of new pow
Slide 18: Business Environment
^ 3Q Operating Performance 3Q Operating Performance 3Q Operating Performance - Consolidated Performance - Consolidated Performance - POSCO Operating Performance - POSCO Operating Performance - Subsidiaries Performance - Subsidiaries Performance Business Environment Business Environment Business Envi
Slide 19: Global Steel Demand Outlook
19 2011 2012 2013 2014 2011 2012 2013 YoY 2014 YoY U.S. 89 96 97 1% 100 3% EU 155 140 135 ^4% 138 2% China 641 666 700 6% 721 3% India 70 72 74 3% 78 6% S.E.A 52 59 61 5% 64 5% World 1,403 1,430 1,475 3% 1,523 3% * World Steel Association (October 2013) * CRU, Mysteel "Steel price forecast to recove
Slide 20: Korean Steel Market and Consuming Industries
20 POSCO Earnings Release |October 24, 2013 (thousand tons) ? ? ? ? 2011 2012 2013 ^ ^ ^ ? ? ? ? 2011 2012 2013 1Q 2Q 3Q 4Q QoQ Nominal Consumption Nominal Consumption 56,391 54,069 51,171 12,398 13,268 12,725 12,780 + 0.4% Export Export 29,091 30,485 29,190 7,304 7,161 6,971 7,754 + 11.2% Productio
Slide 21: Iron Ore and Coking Coal Prices
21 (US$/ton) 3Q 2013 4Q 2013 Although steelmakers' restocking to prepare for Australian flood season is expected to boost coal prices, uncertainty on steel industry will limit the range of price increase "HCC US$153/ton, FOB" 166 221 173 155 143 2012 2Q 2012 3Q 2012 4Q 2013 1Q 2013 2Q 2013 3Q 142 20
Slide 22: Nickel, Chrome and Other Raw Material Prices
Sales 3Q 2013 4Q 2013 "Forecast to slightly increase on improved supply demand condition" Ni: Due to possible Indonesia's ban on raw ore export in 2014, moderately strong price trend is expected Cr: Despite suppliers' production cost burden, slow demand recovery will lag price increase Ni: Concerns
Slide 23: 2013 Business Plan
^ 3Q Operating Performance 3Q Operating Performance 3Q Operating Performance - Consolidated Performance - Consolidated Performance - POSCO Operating Performance - POSCO Operating Performance - Subsidiaries Performance - Subsidiaries Performance Business Environment Business Environment Business Envi
Slide 24: 2013 Business Plan
24 2012 2013(F) Revenue (Consolidated) (in trillion KRW) 63.6 63 - POSCO Revenue* (^) 35.7 31 Crude Steel Production (in million tons) 38.0 36 Product Sales (^) 35.0 34 Investment (Consolidated) (in trillion KRW) 7.2 8 - POSCO Investment* (^) 3.6 4 POSCO Earnings Release |October 24, 2013 2013 Busin
Slide 25: 3Q 2013 Operating Performance
3Q 2013 Operating Performance October 24, 2013