Bluescope Steel Limited · ASX:BSL
Bluescope Steel — H1 FY2006 Earnings Presentation
43 slides from Bluescope Steel's earnings presentation, Feb 20, 2006
Slide 1: Half Year Results Presentation
BLUESCOPE STEEL / Half Year Results Presentation - _ Period: Ended 31 December 2005 _ Kiy Adams, Managing | Director and Chief Executive Offic icer y, Chief Financial Off icer 20 Fetnuay 8
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
Slide 3: HH i I
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Slide 4: Zero harm is our goal for our team and communities
Zero harm is our goal for our team and communities _ Reported performance for IIS! member companies Injuries resulting in lost time per million man-hours worked Medically treated injuries per 1903 1904 1005 1906 1997 1998 1989 2000 2001 2002 2003 2004 2005 2006 1903 1904 1905 1906 1097 1908 1000 200
Slide 5: Continuing to reward shareholders as we grow
_ Our shareholders — continuing to reward shareholders as we grow * Share Buybacks — Public Listing to 31 December 20 * on market — 87m shares * off market — 26m shares - Purchased and cancelled 113m shares + Share buybacks $ 687m * Dividends paid $ 970m yy | * Interim dividend o (to be paid April 0
Slide 6: Our customers are our partners
Our customers are our partners + Our Market Offer > High quality products > Advertising / promotional support > Service > Delivery > Satisfaction > Warranty > Technical Support * Creating > New products > New markets Page 6
Slide 7: Value-added Solutions
Value-added Solutions Graffiti Remover Wh wh Xlerplate
Slide 8: Industry view and strategy - Consistent
Industry view and strategy - Consistent * Our long term view on the global steel industry remains upbeat * Implementation of our strategy is well underway - Growing mid & downstream solutions - Always evaluating new opportunities =
Slide 9: Building BlueScope Steel - A unique and valuable franchise
Building BlueScope Steel - A unique and valuable franchise New Caledonia r New Zealand °; Australia
Slide 10: Maintaining the momentum
Maintaining the momentum
Slide 11: ae mo: Le
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Slide 12: Group headlines First Half FY2006
Group headlines FirstHalfFY2006 evenue External despatches EBITDA EBIT NPAT EPS After tax Return on invested Capital After tax Return on Equity Net operating Cashflow ~ after capital / investments - before capital interim Ordinary Dividend (fully franked) Gearing (net debt) A$3,892 million 3.5 milli
Slide 13: Dramatic changes to geographic destination and product mix
Dramatic changes to geographic destination and product mix Americas North America - NSBSS + C&BPNA 16% Australia 34% 21% Mice Exports 38% Americas Europe/Africa Exports 24% Eu ropelAfrica 3 Ne New Zealand/Pacific Asia Asia 4% 14% + 8% 3.545 million tonnes North America - NSBSS + C&BPN HT Australia A
Slide 14: Unfavourable price and mix drive lower revenue & EBIT
Unfavourable price and mix drive lower revenue &EBIT Based on source of produ J + Port Kembla 750 * Coated & Building Products Australia 2 600- = 472 2 4504 + North Star BlueScope (50%) 5 * Coated and Building Products uw -300- North America . se * Coated & Building NZS & Pacific Steel Products Prod
Slide 15: Coated and Building Products Asia - unexpected market weakness
Coated and Building Products Asia — unexpected market weakness Markets > Lower despatches / weaker markets > Heightened import competition > Customers high inventories / destocking > China — credit controls delayed projects + Sales revenue down 7% to A$485m, including A$117m from BlueScope Butler Ch
Slide 16: Continued GDP growth expected in South East Asia
Continued GDP growth expected in South East Asia 2 GDP - Thailand GDP - Malaysia 12 vo —— Consensus EIU IMA Asia 95 96 97 98 99 00 01 02 03 04 O5e 06 07 Foreign Direct Investment [Thailand, Malaysia, Indonesia, and Vietnam] 95 96 97 98 99 00 01 02 03 04 O5e 06 07 GDP - Indonesia and Vietnam — ow US$
Slide 17: China and India expected to maintain strong growth momentum
China and India expected to maintain strong growth momentum — Consensus = EIU i IMA Asia H 95 30 5 96 97 98 99 00 Of 02 03 04 O5e 06 07 Industrial Production —— Consensus i i i v 9 96 97 98 99 00 01 T T T T T T T T T 02 03 04 O5e 06 07 Source: EIU, Consensus Economics, IMA Asia, BSL Economics Notes:
Slide 18: Coated & Building Products Australia - Challenged again
Coated & Building Products \ustralia— Challenged again Markets > Lower production & export volumes due to Western Port fire > Lower domestic demand for Australian canned goods * Sales revenue of A$1,429m, down 5% 5 | ower domestic demand in manufacturing and 250 distribution for “bare” galvanised 20
Slide 19: Coated and Building Products North America - Back in the black
Coated and Building Products North America - Back in the black = Markets > Improved non-residential market but not as strong as the previous corresponding period > Good order bookings leading into the second half * Performance 20 * First half > Overall continued improvement 1 2 > Buildings — 7 — - J
Slide 20: New Zealand and Pacific Steel Products
New Zealand and Pacific Steel Products — still “All Black” * Sales revenue down 8% to A$359m 96 = Py EBIT A$ Millions 3 66 W@ FYO5-1H @ FY05-2H © FY06-1H * 1H-FY2006 return on net assets annualised (pre-tax) 42% Markets > Lower domestic sales (softer residential) > Higher domestic prices > Lower pri
Slide 21: Hot Rolled Products - excellence across the board
_ Hot Rolled Products - excellence across the board = ee ; Markets * PKSW sales revenue up 2% to A$1,900m —_ Increased export (principally slab) sales * NSBSS revenue US$243m (50%), down 17% > Higher domestic prices; lower export prices > Strong USA HRC price / scrap spread 4400 — Performance WEE: *
Slide 22: Earnings guidance for FY2006
Earnings guidance for FY2006 - implies a more challenging second half + FY2006 after tax earnings outlook now expected to be in the range of A$0.65 - $0.75 EPS on an AIFRS basis Australia + Improved sales & production + Displace imports foe + Lower “bare” product prices a | Midstream . ining Asia +
Slide 23: Global steel industry squeezed by China's increased steelmaking capacity
Global Steel industry squeezed by Chinas Increased ‘Sleel making — Capacity and hic higher raw material costs a0 | China Crude Stee! Production 349 300 | Million tonnes _~ nN nN a S&S & Qo Q Qo 14 \ 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Sources: HiSi, BSL Research Extreme Devia
Slide 24: World crude steel production - 1950 to 2004
~ World crude steel production - 1950 to 2004 Average Annual Growth Rates — 4.9% A 1000 0.3% | J 800 i= i ° e i“ c=} 600 = = 6.0% 400 200 1 1 1 1 + 1 1 t 1 0 1950 1960 1970 1980 1990 2000 Source: IIS! sane
Slide 25: Global steel industry - our long term view has not changed
~ Global steel industry - our long term view has not changed Current industry issues: Likely industry outcomes long term: * China - steel reform initiatives taken / exports discouraged * China’s capacity growth / fragmentation * China - increased demand / steel displaces inter-material + Lower Asian
Slide 26: Raw materials costs extreme
: Raw materials costs extreme — the other side of the resources boom | Port Kembla Steelworks 435 °° Lump iron Ore Extreme Deviation 2 eee OKI COR eeceeeeeneecnseeeeeenes 5O 4 WOOT een eeewnwen sees eeceweeeeeeeweswewseweeswwswwwseseeeeweeswwewwess 415 a6 os a0 35 7s 20 55 25 20 3s 15 4 16 + 87 B& 8
Slide 27: Current and expected market conditions confirm our strategic direction
Current and expected market conditions confirm our strategic direction : Vietnam Australia - Ramp-up 125kt Metal Coating and - 120kt Coiorbond® plant start up (1H-CY07) 50kt China Paint Lines - 250kt Metal Coating and 150kt Paint | @~C sit Mist Thailand lines start up (1Q-FY07 & 2H-FYO6 LD rasiream
Slide 28: Our Asian Coating / Painting / Roll-Forming / PEB Capacity to Triple
Our Asian Coating / Painting / Roll-Forming / PEB Capacity to Triple By Region CI Metal Coating © Painting 1600, 1460 (k tonnes) FY2005 FY2006 FY2007 FY2008 FY2009
Slide 29: Investing for the future - FY06 peak capital commitment
- Investing for the future - FY06 peak capital commitment * Major project capital spending profile Total Est. | Actual to Actual H2 All in A$million Capex/Cost | 30/6/05! | 41H-FY2006 | FY2006 | FY2007 | FY2008 | FY2009 Vietnam - Coating / Painting” 160 116 14 30 - - - Indonesia — Coating / Painting
Slide 30: Financials
Slide 31: Stable revenues with margin squeeze
_ Stable revenues with marginsqueeze AS Milions 2002" FY2003 FY20045 FY2005! 2005-1H 2005-2 FY2006-1H Revenue 4503 5302 5770 7,964 ! 3881 408 3992 EBITDA? 42 B14 1,655 ! 837 818 593 EBIT2 611 818 1,368 ! 696 662 449 Net Profit 452 BOA ce 502 480 312 EPS (¢) 571 778 140! 68.0 66.0 440 (1) 2002 normal
Slide 32: EBIT variance - December half FY2005 vs. December half FY2006
_ EBIT variance — December half FY2005 vs. December half FY2006 + Repairs & Maintenance (8} + Industrial Disputes (FY05) 20 EBIT ASMoo9 - * Volume affected unit costs (45) * Western Port fire (21) + Business Development (25) 900 4 +« Western Port fire (19) 800 $345m Sim —«*(842m) « = ron | $696 ($25
Slide 33: Balance Sheet
Balance Sheet — : oe distributions to. sioreholdets and pee capital _ As At A$ Millions 30 June 2005!) 31 December 2005 Assets Cash 85 79 Receivables 1,205 1,081 Inventory 1,211 1,439 Other Assets 651 732 Net Fixed Assets 3,374 3,592 Total Assets 6,526 6,923 Liabilities Creditors 824 728 Interest Be
Slide 34: Cashflow reflects a strong 2005 result and lower earnings
| Cashflow reflects a strong 2005 resultandlowereamings —=s—™ A$ millions 2002") 2003 2004 2005 | 2005-1H 2005-2H 2006-11 795 1012 1636: 709 927 569 (31) (94) (399) (193) (206)-—S«(222) Net operating cashflow before 381 764 918 1,237; 516 72) 347 borrowing costs and income tax ' Cash from operations
Slide 35: EBIT remains sensitive to realised prices and raw material costs
EBIT remains Senetive to realised ie ee coil ie and raw Estimated impact on forecast EBIT (A$mil) Assumption (euren) (previous) +/- US$25 / tonne movement in BlueScope’s average realised export 76 66 HRC price”) +/- 1¢ movement in Australian dollar / US dollar exchange rate) 7 7 +/- US$10 / tonne mo
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Slide 37: Questions and Answers
- Questions and Answers A VERY DIFFERENT KIND OF STEEL COMPANY
Slide 38: Half Year Results Presentation
BLUESCOPE STEEL / Half Year Results Presentation - _ Period: Ended 31 December 2005 _ Kiy Adams, Managing | Director and Chief Executive Offic icer y, Chief Financial Off icer 20 Fetnuay 8
Slide 39: Supporting Information
Slide 40: Annualised Production Capacities as at December 2005
Annualised Production Capacities and Appvd Bow) as at December 2005. India §0:50 JV with Tata Steel MC 250kt Painting 150kt 2 BlueScope Buildings sites 1 Butler PEB Thailand Cold Rolling 300kt MC 375kt Painting 90kt PEB Malaysia MC. 160kt Painting 70kt MC 250kt Painting 150kt 3 Butler PEB Vietnam MC
Slide 41: Port Kembla Steelworks flow
Port Kembla Steelworks — - IH tia vs. eS Poe ew Steeiwor s _ BlueScope Steel -2.7mt slab 1HO6 | _1BmtHRC pa C&BP Australia "Hot stip Mill fe CO#é@P late vill (Western Port) 10% (10%) Wiia'y: C & BP Australia HR” (Springhill) * “C8&BP Australia” is Coated and Building Products Australia
Slide 42: New Zealand flow
New Zealand — flow* *Indicative annual prime production and sales (t) Y Ui iy bi oy Ly ye oon Ga N Je 1 dst 1 7 “ron s a ew Zealand Stee oon trate CL Vanad oe | -0.6mt Slab ae 0.6mt Hot Rolled y He UL, 2 Vs 7 tay 7 LY WG, pore ed Cold Strip Mill [ME Domestic Pipe Domestic Hot Rolled 5% 5% A ies a ay
Slide 43: Half Year Results Presentation
BLUESCOPE STEEL / Half Year Results Presentation - _ Period: Ended 31 December 2005 _ Kiy Adams, Managing | Director and Chief Executive Offic icer y, Chief Financial Off icer 20 Fetnuay 8