Bluescope Steel Limited · ASX:BSL
Bluescope Steel — FY2021 Earnings Presentation
104 slides from Bluescope Steel's earnings presentation, Aug 16, 2021
Slide 1: FY2021 Financial Results Presentation
FY2021 Financial Results Presentation Mark Vassella Managing Director and Chief Executive Officer Tania Archibald Chief Financial Officer 16 August 2021 Pictured: Garden House in Melbourne, VIC by Austin Maynard Architects, BlueScope Steel Limited. ASX Code: BSL featuring COLORBOND® Coolmax® ABN: 16
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 1,026 Leaders involved in our global (Number of injuries) HSE risk management program to date 5.4 5.6 6.7 (237) 7.2 (271) 100% Board and ELT participation in HSE risk management program (226) (207) >400 Team-based risk control improvement projects FY2018 FY2019 FY2
Slide 4: Financial Strength Underpinning Long Term Growth and Returns
FINANCIAL STRENGTH UNDERPINNING LONG TERM GROWTH AND RETURNS ✓ Resilient business model; demonstrated operating leverage from diverse portfolio ✓ Strong cash flow and robust balance sheet ✓ Well positioned for key industry and end use demand trends including growth in detached residential constructi
Slide 5: FY2021 Financial Highlights
FY2021 FINANCIAL HIGHLIGHTS Record underlying EBIT driven by strength of operating model and positive industry and end use demand trends Underlying EBIT1 Underlying EBIT Return Reported NPAT On Invested Capital2 $1.72Bn 24.8% $1.19Bn Up $1.16Bn on FY2020 Up from 7.6% in FY2020 Up $1.1Bn on FY2020 Fr
Slide 6: FY2021 Underlying EBIT by Segment
FY2021 UNDERLYING EBIT BY SEGMENT Robust demand and improving spreads delivered better results across all segments Australian Steel North Star Building Products Asia Products and North America $674M $677M $334M Up 121% on FY2020 Up 257% on FY2020 Up 115% on FY2020 Buildings North New Zealand and Cor
Slide 7: 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 8: Well Positioned for Industry and End Use Demand Trends
WELL POSITIONED FOR INDUSTRY AND END USE DEMAND TRENDS 1 Ongoing consolidation and rationalisation of capacity in the US steel industry supporting enhanced supply-side discipline 2 China’s efforts to reduce steel exports and limit overproduction improving regional industry conditions 3 Low interest
Slide 9: North Star Expansion
NORTH STAR EXPANSION Project well-progressed and on track for first coil in 2H FY2022 • Project well progressed1 – Melt Shop commissioning well underway with first heat scheduled in August – Equipment installation substantially complete for the ladle metallurgy furnace; second caster and tunnel furn
Slide 10: North Star Expansion: US Steel Industry Consolidation
NORTH STAR EXPANSION US steel industry consolidation and rationalisation have continued, supporting an improved industry structure US HSM capacity consolidation (%, mt) Structurally improved US industry Total producers 20 10 9 • Long term capacity closures expected Gulf States 75mt to offset capacit
Slide 11: Port Kembla Steelworks – Furnace Reline Update
PORT KEMBLA STEELWORKS – FURNACE RELINE UPDATE Prefeasibility assessment of blast furnace reline well progressed; expect further update during 1H FY2022 • Port Kembla steelworks currently operates one Blast Furnace (5BF) which is predicted to reach the end of its campaign between 2026 – 2030 • Relin
Slide 12: Sustainability and climate change update
Sustainability and climate change update 12
Slide 13: Embedding sustainability in all that we do
SUSTAINABILITY Embedding sustainability in all that we do Inclusion and Diversity Sustainable Supply Chain Climate Change 19% 21% 21% 22% 230 Prioritised Suppliers • Broadened 2030 targets to now cover over 98% of Group scope 1 and 2 GHG emissions Completed Engage, Assess & Improve FY2018 FY2019 FY2
Slide 14: Our Targets and Goal
OUR TARGETS AND GOAL Our continued commitment to reducing emissions is highlighted by our short, medium and long-term emission reduction targets BlueScope has set the goal of net zero GHG Steelmaking target Non-steelmaking target • Target 12% improvement in GHG • Targeting 30% improvement in GHG emi
Slide 15: Our Indicative Decarbonisation Pathway
OUR INDICATIVE DECARBONISATION PATHWAY Strong future for steel in a low-carbon world; emerging and breakthrough technology, renewable energy and supportive public policy will be key enablers • Immediate focus on optimising current Indicative iron and steelmaking decarbonisation pathway operating ass
Slide 16: Next Five Year Indicative Climate Investment
NEXT FIVE YEAR INDICATIVE CLIMATE INVESTMENT Near term action underpinned by five-year climate investment program, focussing on optimising current operating assets and preparing for emerging and breakthrough technologies Five Year Climate Investment Program Initial climate investment program of up t
Slide 17: Financial results
Financial results 17
Slide 18: Australian Steel Products
AUSTRALIAN STEEL PRODUCTS Strong performance driven by improved spreads and highest domestic despatches since FY2008 Underlying EBIT ($M) 674.3 • Highest domestic despatch volume since FY2008 – led by construction and distribution segments 415.2 2H 305.1 – Coated and painted products particularly st
Slide 19: Australian Steel Products: Domestic Despatches
AUSTRALIAN STEEL PRODUCTS Strongest domestic despatches since 2H FY2008, 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 % sho
Slide 20: Australian Steel Products: Value Added Products
AUSTRALIAN STEEL PRODUCTS Successful product strategies and robust end market activity have supported solid growth in value added products; assessing opportunity for additional capacity to service future demand Painted products Metal coated products Capacity growth initiative • Demand for BlueScope’
Slide 21: Australian Steel Products: Approvals Pipeline
AUSTRALIAN STEEL PRODUCTS Strong pipeline of work from heightened level of approvals in FY2021; homebound consumers continued with trend of redirecting discretionary funds to renovations Monthly dwelling approvals1 (‘000 units, annualised) Alterations and additions approvals2 ($Bn) Well above previo
Slide 22: North Star
NORTH STAR Record prices and spreads driving significant increase in 2H underlying EBIT; continued to operate at full utilisation Underlying EBIT ($M) 677.2 • Record steel spreads on significantly higher steel pricing, noting specific sales mix relative to benchmark • Demand remained robust, with No
Slide 23: North Star: Market Conditions
NORTH STAR An improved COVID-19 situation, low interest rates and significant infrastructure program supporting improved optimism and robust economic momentum; manufacturing activity remains elevated Automotive1 Non-residential construction2 Manufacturing3 (Light vehicle sales, annualised million un
Slide 24: Building Products Asia and North America
BUILDING PRODUCTS ASIA AND NORTH AMERICA Strong improvement on prior half driven by cyclical margin expansion in the North America coated business; continued robust performance across South East Asia, China and India Underlying EBIT ($M) North America – EBIT $138.5M in FY2021; $99.2M in 2H FY2021 33
Slide 25: Buildings North America
BUILDINGS NORTH AMERICA Core EBS business delivered a similar result in 2H; unusually strong 1H BlueScope Properties Group contribution not repeated in 2H Underlying EBIT ($M) 87.5 17.0 2H • Core engineered buildings business delivered a similar result in 2H FY2021 37.9 over 1H FY2021 13.5 70.5 1H •
Slide 26: Expanding BlueScope Properties Group
EXPANDING BLUESCOPE PROPERTIES GROUP Upscaling the business, tapping into key trends in US industrial properties such as the growth in warehousing and logistics BlueScope Properties Group (BPG) overview • BPG develops Class A industrial properties in premium US locations, accessing the growing wareh
Slide 27: New Zealand and Pacific Islands
NEW ZEALAND AND PACIFIC ISLANDS Continued strong business performance driven by higher realised steel prices and robust domestic demand; energy cost remained a headwind during 2H Underlying EBIT ($M) 130.1 • Ongoing strong domestic demand, particularly for coated and painted products in an active co
Slide 28: Underlying Group EBIT Variance
UNDERLYING GROUP EBIT VARIANCE Strong uplift in earnings driven by stronger spreads and robust demand FY2021 vs FY2020 ($M) Includes lower depreciation of $28M, including impact of 2H FY2021 vs 1H FY2021 ($M) the NZPI asset write-down Net spread increase $1,045.0M Net spread increase $718.0M (106.9)
Slide 29: Financial framework
Financial framework 29
Slide 30: Financial Framework Underpinning Resilience
FINANCIAL FRAMEWORK UNDERPINNING RESILIENCE Strong focus on driving financial performance and disciplined allocation of capital Disciplined Returns Focus Robust Capital Structure Capital Allocation • ROIC > WACC on average through • Strong balance sheet, with a target • Invest to maintain safe and r
Slide 31: Returns Focus Delivering ROIC
RETURNS FOCUS DELIVERING ROIC Targeting returns above cost of capital through the cycle • ROIC1 is the primary Group ROIC Performance (%) measure of performance 24.8% across all business units 20.0% 19.5% and is a key focus for the Group. ROIC is a key 7.6% discipline for: – performance management F
Slide 32: Returns Focus Maximising Cash Generation
RETURNS FOCUS MAXIMISING CASH GENERATION Strong cash inflows from operations; working capital increased on elevated prices and volumes Net cash flow ($M) Net cash / (debt)1 ($M) (before investment exp and financing) (30) $M FY2019 FY2020 FY2021 2H21 (264) North Star expansion Reported EBITDA 1 1,754
Slide 33: Returns Focus Working Capital
RETURNS FOCUS WORKING CAPITAL Increase in working capital due to significantly higher steel pricing and strong activity levels across the business Included ~$100M unfavourable timing Includes ~$150M of working capital favourable timing of 458 (599) working capital 1,653 (98) 1,687 593 1,353 1,332 1,
Slide 34: Robust Capital Structure: Net Cash Position; Ample Liquidity
ROBUST CAPITAL STRUCTURE NET CASH POSITION; AMPLE LIQUIDITY Strong balance sheet providing foundation for increased returns and capacity for growth • Maintained investment grade credit Net debt / (cash) ($M) Liquidity ($M) ratings (undrawn facilities and cash) 3,6941 Target ~$400M • Strong balance s
Slide 35: Disciplined Capital Allocation: Capital Expenditure
DISCIPLINED CAPITAL ALLOCATION CAPITAL EXPENDITURE Capital prioritised to highly value accretive North Star expansion project; framework evolved to better integrate climate-related considerations Capital allocation framework Capital and acquisition expenditure1 ($M) Operating North Star Expansion1 A
Slide 36: Disciplined Capital Allocation: Future Investment Priorities
DISCIPLINED CAPITAL ALLOCATION FUTURE INVESTMENT PRIORITIES Indicative ~$1.5bn of projects identified over five years for growth opportunities, foundational investment and to position the business for a low carbon future Future investment priorities ($M) Project Description FY22 FY27 ~$1.5 – 1.6bn N
Slide 37: Disciplined Capital Allocation: Shareholder Returns
DISCIPLINED CAPITAL ALLOCATION SHAREHOLDER RETURNS Increasing annual ordinary dividend level to 50 cps per annum1 and announcing on-market buy-back of up to $500M • Following a review, the Board’s intention is to increase the annual ordinary Dividends announced2 ($M) dividend level and will target 5
Slide 38: Segment guidance for 1H FY2022
Segment guidance for 1H FY2022 38
Slide 39: Segment Guidance for 1H FY2022
SEGMENT GUIDANCE FOR 1H FY2022 Outlook subject to assumptions and qualifiers referenced on page 41 Australian Steel Products North Star Building Products Asia & US • Expect a better result compared to 2H FY2021 • Expect significantly stronger result compared to • Expect a similar to slightly better
Slide 40: Group outlook and summary
Group outlook and summary 40
Slide 41: 1H FY2022 Group Outlook
1H FY2022 GROUP OUTLOOK1 • At the beginning of 1H FY2022, order and despatch rates in key markets remain robust. Spot steel spreads in North America are materially higher than both 2H FY2021 and longer-term averages. In light of these unusually strong conditions, the Company expects underlying EBIT
Slide 42: 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 Long-term sustainable Capital discipline capability earnings and growth and returns focus • Strong ope
Slide 43: Questions
Colerbond Questions
Slide 44: Low Carbon Steelmaking in Australia
Low Carbon Steelmaking in Australia 44
Slide 45: Enablers for Low Carbon Steelmaking in Australia
ENABLERS FOR LOW CARBON STEELMAKING IN AUSTRALIA • The success of BlueScope’s goal of net zero emissions by 2050 is dependent upon: – Evolution of emerging and breakthrough technologies to viable, commercial scale – Access to appropriate quality and quantities of raw materials in both the near and l
Slide 46: Sufficient Quantities of Prime Quality Scrap Are Required
1 SUFFICIENT QUANTITIES OF PRIME QUALITY SCRAP ARE REQUIRED FOR SCRAP EAF FLAT STEEL PRODUCTION Why is it important? Scrap Arisings1 • Scrap for steelmaking is typically broken down between prime grades, which are generally sourced (million metric tonnes, 2020) 273 from manufacturing by-products, an
Slide 47: Iron Ore of Suitable Concentration and Purity Is Required for DRI
2 IRON ORE OF SUITABLE CONCENTRATION AND PURITY IS REQUIRED FOR DRI PRODUCTION Why is it important? • Unlike in blast furnace production, raw materials in the DRI process remain solid, meaning impurities are harder to remove Magnetite Ore Fe3O4 • EAF-quality DRI requires higher grade ores – with hig
Slide 48: Reliable and Affordable Renewable Energy Is Critical
3 RELIABLE AND AFFORDABLE RENEWABLE ENERGY IS CRITICAL Why is it important? BSL Average Cost of Electricity • Low cost reliable energy is critical to the commercial viability of iron and steelmaking (US$ per megawatt hour, 2020) technologies, particularly EAF and DRI production given their energy in
Slide 49: Low Cost Green Hydrogen Will Underpin Decarbonisation
4 LOW COST GREEN HYDROGEN WILL UNDERPIN DECARBONISATION Why is it important? Share of Renewables • Hydrogen may replace carbon (from metallurgical coal) as a reductant in the process of transforming iron ore (Renewable % of Total Generation, 2020) to iron in DRI and as a partial replacement for pulv
Slide 50: BlueScope: A different kind of steel building products company
BlueScope: A different kind of steel building products company 50
Slide 51: 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 51
Slide 52: 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 53: 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 ® ® ® ® ® ® ® 53
Slide 54: 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 ® ® ® ® ® ® ® ® ® ® 54
Slide 55: 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 $151M 90% Building products Asia 6% Australia 80% Higher value $271M $950M added 12% 70% Aus & NZ
Slide 56: Business Diversification: Despatch Split by Region and End-Use
2 BUSINESS DIVERSIFICATION Broad exposure across geographies, largely focused on the building and construction industry BlueScope indicative despatch volume split by region and end-use segment1 Manufacturing, Other (Exports) Agri & Other 5% Automotive North Star: exposed mainly to the automotive, 2%
Slide 57: Cost Competitiveness: Australian Steel Products
3 COST COMPETITIVENESS AUSTRALIAN STEEL PRODUCTS Australian steelmaking breakeven at minimum recent spreads; benefits from vertical integration Asian steel spread1 & estimated steelmaking The value of vertical integration cash breakeven2 (US$/t) • Clear objective of optimising profitability across t
Slide 58: Cost Competitiveness: North Star
3 COST COMPETITIVENESS NORTH STAR Strong EBITDA and cash generation through the cycle; industry leading margins; consistently full utilisation US$M EBITDA and spread (100% basis)1 755 EBIT margins3 (%) 28.9% 700 U.S. mini-mill spread Moved to 100% ownership of EBITDA (100% basis) North Star 600 14.7
Slide 59: Disciplined Capital Allocation
4 DISCIPLINED CAPITAL ALLOCATION Balance sheet strength, and a disciplined approach to balancing investment for long-term growth and returns to shareholders Robust Balance Sheet Returns to Shareholders Investing for Long Term Growth Net debt / (cash) ($M) Dividends announced and buy-backs2 ($M) Capi
Slide 60: 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 Project Description FY22 FY27 Invest to maintain safe an
Slide 61: 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 Strategic priority areas Provide • Clear strategy and direction leadership • Strategic focus
Slide 62: Digitally Transforming Our Business: Examples
4 DISCIPLINED CAPITAL ALLOCATION DIGITALLY TRANSFORMING OUR BUSINESS Examples of digital initiatives Manufacturing Excellence Connected Supply Chain Support Functions • Investing in an end to end asset • Developed a new scheduling • Introduced Robotic Process intelligence system to improve how we ap
Slide 63: 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 64: Approach to Sustainability: Our Purpose and Our Bond
5 APPROACH TO SUSTAINABILITY OUR PURPOSE AND OUR BOND We create and inspire smart solutions in steel, to strengthen our communities for the future Our Customers are our Partners Our Shareholders are our Foundations Our success depends on our customers and suppliers Our success is made possible by th
Slide 65: Approach to Sustainability: Safety
5 APPROACH TO SUSTAINABILITY SAFETY Ongoing alignment with evolving industry reporting standards Transitioned health and safety indicators TRIFR (total recordable injury frequency rate, per million hours worked) • Strong emphasis on care and treatment to support full and sustained recovery 12.4 • Bl
Slide 66: 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 in FY2021 Prioritise • Engage–A
Slide 67: Approach to Sustainability: Inclusion and Diversity
5 APPROACH TO SUSTAINABILITY INCLUSION AND DIVERSITY Continued improvement in female representation, notwithstanding challenges presented during the pandemic • In FY2021 we have continued to build an inclusive workforce which reflects the diversity of the communities in which we operate. This includ
Slide 68: 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 year, many of our businesses continued BlueScope’s community invest
Slide 69: Additional Information: Group-level Material
Additional Information: Group-level Material 69
Slide 70: Financial Headlines
FINANCIAL HEADLINES TWELVE MONTHS ENDED FY2021 vs $M (unless marked) 30 JUNE 2020 30 JUNE 2021 FY2020 Total revenue 11,324.2 12,902.3 External despatches of steel products (kt) 7,082.4 7,709.5 EBITDA − Underlying 1 1,098.7 2,211.6 EBIT − Reported 309.7 1,758.5 − Underlying 1 564.0 1,723.8
Slide 71: Reconciliation Between Reported and Underlying EBIT and NPAT
RECONCILIATION BETWEEN REPORTED AND UNDERLYING EBIT AND NPAT1 FY2020 FY2021 $M EBIT NPAT EBIT NPAT Reported results 309.7 96.5 1,758.5 1,193.3 Underlying adjustments Discontinued Business (gains) / losses 4.7 6.4 (9.6) (9.0) Asset impairment / (write-back) 197.0 197.0 - - Business development & acqu
Slide 72: Underlying Earnings, Net Finance and Tax Cost
UNDERLYING EARNINGS, NET FINANCE AND TAX COST 1H 2H Breakdown of net finance costs $M FY2021 FY2021 FY2021 Reg-S Bonds 18.6 Underlying EBIT 530.6 1,193.2 1,723.8 Syndicated bank facility charges 12.0 Underlying finance costs (37.2) (33.5) (70.7) Leases 28.1 Amortisation of borrowing costs and 3.8 In
Slide 73: Summary of Financial Items by Segment
SUMMARY OF FINANCIAL ITEMS BY SEGMENT Sales revenue Total steel despatches $M FY2020 1H FY2021 2H FY2021 FY2021 '000 tonnes FY2020 1H FY2021 2H FY2021 FY2021 Australian Steel Products 5,418.1 2,739.5 3,109.0 5,848.5 Australian Steel Products 2,933.8 1,596.1 1,550.3 3,146.4 North Star BlueScope Steel
Slide 74: Cash Flow Statement
CASH FLOW STATEMENT $M FY2020 1H FY2021 2H FY2021 FY2021 Reported EBITDA 844.4 771.7 1,474.6 2,246.3 Adjust for other cash profit items 206.7 (13.6) 1.0 (12.6) Cash from operations 1,051.1 758.1 1,475.6 2,233.7 Working capital movement (inc provisions) (100.8) (132.4) (315.0) (447.4) Gross operating
Slide 75: Inventory Movement
INVENTORY MOVEMENT Impacted by significant rise in global steel prices RM $818.0M WIP $633.2M $398.0M increase comprised of segmental movements: FG $747.9M (including eliminations and other of $42.1M) RM1 $591.3M Other $180.7M WIP2 $542.8M FG3 $600.8M 261.4 4.1 2,379.8 ASP – significantly higher rat
Slide 76: Balance Sheet
BALANCE SHEET $M 30 Jun 2020 31 Dec 2020 30 Jun 2021 Assets Cash 1,399.5 1,495.1 1,961.9 Receivables and Contract Assets * 1,153.4 1,089.3 1,682.4 Inventory * 1,981.8 1,921.4 2,379.8 Property, Plant & Equipment 4,175.3 4,237.0 4,521.9 Right Of Use Assets 338.0 316.2 357.9 Intangible Assets 1,835.8 1
Slide 77: Prudent Maturity Profile
PRUDENT MATURITY PROFILE Syndicated facility replaced in July 2021 with bilateral facilities with relationship bank group – extending tenor and reducing cost of main revolving debt facilities Maturity profile1 ($M) 508 533 533 456 Sale of receivables program: 103 133 133 Syndicated Bank Facility 57
Slide 78: Committed Debt Facilities as at 30 June 2021
COMMITTED DEBT FACILITIES AS AT 30 JUNE 2021 Committed Drawn Proforma1 Maturity Local currency A$M A$M Bilateral Loan Agreements - Tranche A Jul 2024 A$335M A$335M - - Tranche B Jul 2025 A$335M A$335M - - Tranche C Jul 2026 A$335M A$335M - Reg-S Bonds May 2023 US$300M A$399M A$399M Inventory Finance
Slide 79: Buy Back History
BUY BACK HISTORY 2H FY2017 1H FY2018 2H FY2018 1H FY2019 2H FY2019 1H FY2020 2H FY2020 Total Shares bought (M) 12.8 12.0 9.2 18.9 17.0 14.6 2.9 87.3 Consideration ($M) 150 148 152 293 217 186 34 1,180 Average price per share $11.74 $12.37 $16.50 $15.50 $12.81 $12.68 $11.86 $13.51 79
Slide 80: 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 85 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 81: Additional Information: Segment Material
Additional Information: Segment Material 81
Slide 82: Australian Steel Products: Financial and Despatch Summaries
AUSTRALIAN STEEL PRODUCTS Financial and despatch summaries Key segment financial items Despatches breakdown $M unless marked FY2020 1H FY2021 2H FY2021 FY2021 '000 Tonnes FY2020 1H FY2021 2H FY2021 FY2021 Revenue 5,418.1 2,739.5 3,109.0 5,848.5 Hot rolled coil 548.2 286.1 338.3 624.4 Underlying EBIT
Slide 83: Australian Steel Products: Underlying EBIT Variance
AUSTRALIAN STEEL PRODUCTS Underlying EBIT variance FY2021 vs FY2020 ($M) 2H FY2021 vs 1H FY2021 ($M) 674.3 (5.8) Conversion & other costs ($M) Net spread increase $288.9M 127.3 Cost improvement initiatives 1 Escalation1 (57) (41.2) Net spread increase $153.0M Volume impact on costs (4) 157.5 Timing,
Slide 84: Australian Steel Products: Spot Spreads Have Contracted
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 85: 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 86: Australian Steel Products: Despatch Mix
AUSTRALIAN STEEL PRODUCTS Despatch mix (Mt) FY2021 Product Mix 1.60 1.54 1.55 1.40 0.16 Export 0.35 Export 0.39 0.08 Domestic - 0.26 externally sourced 0.07 0.06 0.06 HRC Metal Coated Plate Painted Domestic - BSL CRC Other inc ext sourced 1.31 1.18 manufactured 1.08 1.09 Domestic 1H FY2020 2H FY2020
Slide 87: Australian Steel Products: Revenue and Underlying Costs
AUSTRALIAN STEEL PRODUCTS FY2021 Revenue FY2021 Underlying costs (to EBIT line) A$5,849M Non-steel business costs relate to: A$5,174M • Export coke sales Non-steel business • Cold ferrous feed to Liberty Conversion & overhead Non-steel business components (in order of value): • Export coke OneSteel
Slide 88: Australian Steel Products: Detached Building Activity Indicators
AUSTRALIAN STEEL PRODUCTS Key leading indicators of detached building activity translating into strong pipeline of work Long-Term Dwelling Approvals: rolling 12 months1 (‘000) Dwelling Commencements: by halves2 (‘000) Record detached approvals moved beyond upper end of historic range Strong pipeline
Slide 89: Australian Steel Products: Non-Residential Approvals
AUSTRALIAN STEEL PRODUCTS Non-residential approvals held up better than expected during pandemic period; public investment provided key support in Social and Institutional as well as civil building activity Non-Residential Building Approvals: rolling 12 months1 (A$bn) Non-Residential Work Done: by h
Slide 90: 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 FY2020 1H FY2021 2H FY2021 FY2021 $M unless marked FY2020 1H FY2021 2H FY2021 FY2021 Revenue 1,713.0 785.9 1,591.8 2,377.7 Revenue 1,149.1 569.1 1,227.5 1,796.6 Underlyin
Slide 91: North Star: Underlying EBIT Variance
NORTH STAR Underlying EBIT variance FY2021 vs FY2020 ($M) 2H FY2021 vs 1H FY2021 ($M) Net spread increase $590.4M Net spread increase $575.2M (337.2) (12.0) 5.5 (292.3) (96.3) 677.2 927.6 (12.6) 3.8 607.6 (28.4) 867.5 189.6 69.6 FY2020 Prices Raw Conversion Volume FX FY2021 1H Prices Raw Conversion
Slide 92: North Star: Expansion Capital Spend Profile
NORTH STAR North Star expansion capital spend profile Accounting capital spend (incl. capital accruals) Cash capital spend Total to 1H FY2022 2H FY2022 Total to 1H FY2022 2H FY2022 1H FY2021 2H FY2021 1H FY2021 2H FY2021 30 Jun 2020 (expected) (expected) 30 Jun 2020 (expected) (expected) US$M 140.7
Slide 93: North Star: Regional Capacity Changes
NORTH STAR In the region in which North Star operates, 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 300 miles o
Slide 94: 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 $M unless marked FY2020 1H FY2021 2H FY2021 FY2021 ‘000 metric tonnes` FY2020 1H FY2021 2H FY2021 FY2021 Revenue 2,777.5 1,459.3 1,666.3 3,125.6 Thailand 305.2 175.0 221.6 396.6
Slide 95: Building Products Asia & North America: Underlying EBIT Variance
BUILDING PRODUCTS ASIA & NORTH AMERICA Underlying EBIT variance FY2021 vs FY2020 ($M) 2H FY2021 vs 1H FY2021 ($M) Net spread increase $63.1M Net spread increase $141.0M (106.1) 333.5 (29.1) 63.4 (205.9) (7.2) 256.3 264.2 (24.9) 5.9 183.2 (11.2) 155.3 150.3 0.9 4.8 FY2020 Export Domestic Raw Conversi
Slide 96: Buildings North America: Financial and Despatch Summaries
BUILDINGS NORTH AMERICA Financial and despatch summaries Key segment financial items (A$M) Key segment financial items (US$M) $M unless marked FY2020 1H FY2021 2H FY2021 FY2021 $M unless marked FY2020 1H FY2021 2H FY2021 FY2021 Revenue 1,118.5 601.8 496.9 1,098.7 Revenue 750.9 435.7 383.3 819.0 Unde
Slide 97: Buildings North America: Underlying EBIT Variance
BUILDINGS NORTH AMERICA Underlying EBIT variance FY2021 vs FY2020 ($M) 2H FY2021 vs 1H FY2021 ($M) Net margin increase $63.6M (5.7) (30.4) (8.3) 87.5 27.6 Net margin decrease $61.1M 70.5 66.4 (18.5) 37.9 (51.0) 17.0 (2.5) 9.9 8.6 FY2020 Prices1 Raw Conversion Volume FX FY2021 1H Prices1 Raw Conversi
Slide 98: New Zealand & Pacific Islands: Financial and Despatch Summaries
NEW ZEALAND & PACIFIC ISLANDS Financial and despatch summaries Key segment financial items Despatches breakdown $M unless marked FY2020 1H FY2021 2H FY2021 FY2021 '000 Tonnes FY2020 1H FY2021 2H FY2021 FY2021 Revenue 792.4 436.2 458.1 894.3 Domestic despatches Underlying EBITDA 52.2 67.2 84.4 151.6
Slide 99: New Zealand & Pacific Islands: Underlying EBIT Variance
NEW ZEALAND & PACIFIC ISLANDS Underlying EBIT variance FY2021 vs FY2020 ($M) 2H FY2021 vs 1H FY2021 ($M) 130.1 Includes lower depreciation of $35M including impact of the NZPI asset write-down 32.8 Net spread increase $27.4M Includes $8.2M improvement in (3.8) vanadium by-product 25.9 (17.1) 72.7 51
Slide 100: New Zealand & Pacific Islands: Despatch Mix
NEW ZEALAND & PACIFIC ISLANDS Despatch mix (Mt) FY2021 Product Mix 323.1 314.8 1.3 304.2 8.1 1.8 Export long 285.9 Domestic 3.6 70.0 45.6 Export flat 76.0 103.7 106.7 102.8 Domestic long 84.9 HRC Plate 72.0 CRC Metal Coated Painted 145.8 145.1 154.0 Domestic flat Other flat products 106.6 Pacific St
Slide 101: New Zealand & Pacific Islands: Construction Recovery
NEW ZEALAND & PACIFIC ISLANDS A very strong recovery on the back of relatively successful containment of pandemic; housing construction and manufacturing activity at very robust levels Residential Building Consents: rolling 12 months1 (‘000) Residential Work Put in Place: by quarters2 (NZ$bn) Demand
Slide 102: 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 103: Glossary
GLOSSARY 1H Six months ended 31 December in the relevant financial year EPS Earnings per share 1H FY2020 Six months ended 31 December 2019 FY2020 12 months ending 30 June 2020 1H FY2021 Six months ended 31 December 2020 FY2021 12 months ending 30 June 2021 1H FY2022 Six months ended 31 December 2021
Slide 104: FY2021 Financial Results Presentation
FY2021 Financial Results Presentation Mark Vassella Managing Director and Chief Executive Officer Tania Archibald Chief Financial Officer 16 August 2021 Pictured: Garden House in Melbourne, VIC by Austin Maynard Architects, BlueScope Steel Limited. ASX Code: BSL featuring COLORBOND® Coolmax® ABN: 16