Slide 1: 3Q 2009 Operating Performance
3Q 2009 Operating Performance Oct. 14, 2009
Slide 2: 3Q '09 Operating Performance; Activities & Accomplishments; Steel Industry Environment; 2009 Business Plan
^ 3Q '09 Operating Performance ^ Activities & Accomplishments ^ Steel Industry Environment ^ 2009 Business Plan Figures provided in this presentation are based on unaudited financial statements of the Company. Certain contents in this presentation are subject to change during the course of auditing
Slide 3: Production / Sales
7,076 Production / Sales Crude Steel 7,132 2Q 3Q 7,880 +10.5% (in thousand tons) 6,145 ? 2.5mt/mo sales achieved with increased production & market recovery ? Utilization Ratio(%) : 75(1Q) ^ 85(2Q) ^ 92(3Q) '09.1Q B/F High-mill S T S 5,887 - - 258 6,787 18 327 7,305 133 442 Finished Product Sales 7,
Slide 4: Sales by Product
Sales by Product ? Sales continue to grow as domestic demand stay strong (in thousand tons) '09.1Q 2Q 3Q Automobile Home Appliance Re-rolling Shipbuilding '09. 1Q 2Q 3Q '09. 1Q 2Q 3Q QoQ Hot Rolled 1,781 1,899 2,170 14.3% Plate 1,156 1,108 1,093 ^1.4% Wire Rod 432 506 514 1.6% Cold Rolled 1,921 2,67
Slide 5: Income Summary
Revenue 6,344 2Q 3Q 6,851 +8.0% (in bn KRW) 6,471 '09.1Q Income Summary ? Op. income reached KRW 1tn due to rising price & lower raw mat'l cost ? Average export price : U$ 625('09.2Q) ^ U$ 704 ? FY09 raw material usage : Iron Ore 46%('09.2Q) ^ 94%, Coal 54% ^ 96% Op. Income 170 2Q 3Q 1,018 +498.8% 3
Slide 6: Summarized Income Statement (POSCO)
Summarized Income Statement (POSCO) 2009 1Q 2009 2Q 2009 3Q 2009 1Q 2009 2Q 2009 3Q QoQ Revenue Revenue 6,471 6,344 6,851 8.0% Gross income (Gross Margin) Gross income (Gross Margin) 656 (10.1%) 451 (7.1%) 1,351 (19.7%) 199.6% - - S G & A S G & A 283 280 333 18.9% Operating income (OP. Margin) Opera
Slide 7: Financial Structure
Financial Structure (in billion KRW) ? Liability-to-equity ratio dropped as earnings increase & debt reduced ? Non-current assets grew due to #4BF(G) revamping & STS CRM installation * Changes in debt during '09.3Q - Payback of CP (KRW 370bn) & domestic bond (KRW 200bn) - Payback of short-term loan
Slide 8: Summarized Statement of Financial Position (POSCO)
Summarized Statement of Financial Position (POSCO) 2009 1Q 2009 1Q 2009 2Q 2009 3Q 2009 1Q 2009 1Q 2009 2Q 2009 3Q QoQ Current assets Current assets Current assets Current assets 13,267 12,578 12,193 ^3.1% Cash equivalent assets Notes receivable Inventory Cash equivalent assets Notes receivable Inve
Slide 9: Consolidated Financial Summary
Consolidated Financial Summary '09.1Q '09.2Q '09.3Q Total 111 110 115 Domestic 37 37 41 Overseas 74 73 74 '08 '09.1Q '09.2Q '09.3Q POSCO Zhangjiagang POSCO SS 8,284 165 219 6,145 128 172 7,132 200 182 7,880 213 213 ? Steel sector revenue & operating income increased No. Consolidated Subsidiaries Con
Slide 10: Consolidated Financial Summary by Sector
Revenue Revenue Revenue OP. Income OP. Income OP. Income 2009.1Q 2009.2Q 2009.3Q 2009.1Q 2009.2Q 2009.3Q Steel E & C Energy IT & Others 9,406 1,615 111 144 9,595 1,966 77 142 10,655 1,672 116 148 348 52 24 14 221 95 18 ^2 1,150 70 18 14 Consolidated Consolidated 8,788 8,922 9,431 586 350 1,185 Conso
Slide 11: Activities & Accomplishments
^ 3Q '09 Operating Performance ^ Activities & Accomplishments ^ Steel Industry Environment ^ 2009 Business Plan
Slide 12: 3Q Key Activities: Facility Expansion and Stainless Steel
? Facility addition · upgrade for domestic capacity expansion ? Gwangyang #4 BF, (Apr.17th ~ Jul.20th '09 ) & related facilities rationalization - World's first to produce 5mt/yr from a single BF w/ expanded capacity (3,800^5,500^) - #1 CCL (Mar. ~ Jul.'09), #1 HR (May. ~ Jun.'09), #2 CR (Dec.'08 ~
Slide 13: 3Q Key Activities: Global Growth Foundation
? Lay foundation for global growth ? Mexico CGL* (POSCO-Mexico) completed (Aug): automotive steel, 400Kt/yr - Expand sales in North & Central America auto market & set up integrated service system ? Japan automotive steel processing center (POSCO-JNPC#2) (Sept): 150Kt/yr - Expand sales to auto & par
Slide 14: Coal-gas business and Titanium JV
? Promote environment-friendly coal-gas business ? Invest in SNG (Synthetic Natural Gas) business - Construct 500Kt/yr SNG plant (~'13) ^ LNG import subsitute effect 200bn KRW ? Cooperate with SK Energy in SNG production technology development - MOU for R&D ^ develop core tech & set base to attract
Slide 15: R&D and Cost Savings
? R&D to secure technology leadership ? World's first to develop 590MPa outer-panel automotive steel - Intensity 70%^, weight 20%^^ improve fuel efficiency & reduce CO2 emission ? Exhibition of high-function-auto-steel at Toyota: strengthen local sales base - Introduce POSCO exclusive next-generatio
Slide 16: Subsidiaries' Business Activities
Subsidiaries' Business Activities ? POSCO SS, acquired 10% equity in Vietnam VPS* (Aug.) - Strengthen responsibility mgmt. & maximize synergy with projects in Vietnam *VPS(VSC-POSCO Steel): JV in Vietnam producing wire rods, long products (change in POSCO equity 40% ^ 50%) ? POSCO C&C, expand sales
Slide 17: Steel Industry Environment
^ 3Q '09 Operating Performance ^ Activities & Accomplishments ^ Steel Industry Environment ^ 2009 Business Plan
Slide 18: Global Steel Market
Global Steel Market ? Crude steel prod'n growth accelerate as global demand enters recovery ? De-stocking complete in developed countries & steel consuming industry recover ? While developed countries show uptrend, China show price adjustment ? US/EU price continue rising for last 4months, exceeding
Slide 19: China Steel Market
1Q08 2Q 3Q 4Q 1Q09 2Q 3Q 4Q ????? 7.2 10.9 11.1 17.2 31 30.2 1.4 -11.5 -0.7 -2.6 0 1.6 -4.5 -34 -24.5 -24.9 -36.7 -20.5 -4.6 -14.1 -23.6 -18.7 -13.6 -9.8 ???? 101.9 102.1 102.4 102.6 102.6 102.6 102.7 102.7 102.7 102.5 102 101.2 100.1 98.5 96.6 94.7 93.1 92.2 91.9 92.5 93.6 94.9 96.4 98 ?? 26.6 32.1
Slide 20: Global Steel Market Outlook
Global Steel Market Outlook ? Visible recovery expected from '10 in key industries & global economy ? Developed countries turned postive growth while emerging mkt. show solid growth '09.1Q 2Q 3Q 4Q '10.1Q 2Q 3Q 4Q U.S -3.3 -3.9 -2.4 -0.4 1.7 2.4 2.0 2.1 China 6.1 7.9 8.5 9.3 10.0 10.5 10.0 9.9 * Sou
Slide 21: Domestic Steel Market Outlook
Domestic Steel Market Outlook ? '10 steel demand to increase by 16% as consuming industry improve ? Expect less export & more import despite higher flat product (HR,Plate,etc) prod'n (in thousand tons) (in thousand tons) 2008 2009 2009 2010 2010 2010 2010 (in thousand tons) (in thousand tons) 2008 2
Slide 22: Raw Material: Iron Ore and Coal
Coal Iron Ore Raw Material ? BHP & some mills adopt new price sys. - Large Asian mills prefer benchmark price ? Spot price rise as industry recovers - Spot (FOB) : U$57 (May.'09) ^ U$72 (Oct.'09) * FY09 Benchmark price: U$62/ton (Fe 63.5%) ? Tight supply with growing demand - FY10(f): UBS, GS+20%, C
Slide 23: Nickel & Chrome Market Trend
Nickel & Chrome Market Trend ? Overseas - China: Weak price & demand as distributors liquidate inventory in concern of monetary contraction - Europe: Mills remain 80~90% utilization w/ growing order ? Domestic - Recovery mainly from auto & appliance sector - Order delays due to declining Ni price &
Slide 24: 2009 Business Plan
^ 3Q '09 Operating Performance ^ Activities & Accomplishments ^ Steel Industry Environment ^ 2009 Business Plan
Slide 25: 2009 Business Plan
The data above represents company's internal objects, thus should not be used as a basis for investment decisions 2009 Business Plan * Investment: CAPEX (KRW 4.5tn), Overseas/Raw Material (1.0tn), Energy/NewBusiness (150bn), Growth (1.6tn) 2008 2009 2008 2009 4Q • Crude Steel Production 33.1 29.5 8.
Slide 26: 3Q 2009 Operating Performance
3Q 2009 Operating Performance Oct. 14, 2009