Bluescope Steel Limited · ASX:BSL

Bluescope Steel — The 12th Annual JP Morgan Asia Pacific and Emerging Markets Equity Conference 2007

39 slides from Bluescope Steel's conference presentation, Sep 25, 2007

  1. Slide 1: 12th Annual JP Morgan Asia Pacific and Emerging Markets Equity Conference

    For personal use only The 12th Annual JP Morgan Asia Pacific and Emerging Markets Equity Conference, New York Kirby Adams, Managing Director and Chief Executive Officer 24 – 26 September 2007 ASX Code: BSL

  2. Slide 2: Important notice

    Important notice For personal use only 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.

  3. Slide 3: July 2002 to August 2007: A very different kind of steel company

    July 2002 to August 2007…. For personal use only Profitable Profitable Dynamic Dynamic Through Throughthe the Global GlobalSteel Steel Cycle Cycle Market Market Strong StrongBoard Board&& Value ValueAdded Added Management Management Branded Branded Team Team Products Products Growth Growth A VERY DI

  4. Slide 4: Introduction & Headlines

    For personal use only Introduction & Headlines Page 4

  5. Slide 5: BlueScope Steel Overview

    BlueScope Steel Overview ƒ Global flat steel product and solutions company – spun out of BHP July 2002 For personal use only ƒ EV at listing approximately A$3.0B - around A$9.0B ƒ Unique production footprint and building products franchise in ƒ Australia / New Zealand ƒ China, SE Asia and India ƒ No

  6. Slide 6: Unique production footprint in the world's fastest growing regions

    Unique production footprint in the world’s fastest growing regions For personal use only Asia China 24 Lysaght and MC 250kt PEB Sites Painting 150kt • Coated and Building Products India North America Metal Coating 250kt • North Star BlueScope JV Vietnam Painting 150kt MC 125kt Hot Rolling 1.80mt (10

  7. Slide 7: BlueScope Steel China footprint

    BlueScope Steel China footprint For personal use only FY 2007 REVENUE: A$407M EBITDA: (A$7M) EMPLOYEES: 1,810 INVESTED CAPITAL: A$405M SUZHOU BlueScope Steel in China 1 Metal Coating/Painting Line Facility 4 Lysaght Manufacturing Facilities 2 Butler PEB Manufacturing Facilities 60 Butler/CSC Sales O

  8. Slide 8: BlueScope Steel North American sites

    BlueScope Steel North American sites For personal use only FY 2007 REVENUE: A$1,354 M EBITDA: A$231M EMPLOYEES: 2,403 incl. North Star INVESTED CAPITAL: A$295M All Include BSL’s 50% interest in North Star BlueScope Steel MANUFACTURING CASTRIP® PLANTS BlueScope Steel in North America 1 Regional Offic

  9. Slide 9: Zero harm is our goal for our team and communities

    Zero harm is our goal for our team and communities For personal use only Lost Time Injury Frequency Rate Medically Treated Injury Frequency Rate 18 70 16 NSW Manufacturing 60 16 Medically treated injuries per million man-hours worked 27.9 in 2005 60 14 Lost time injuries per million man-hours worked

  10. Slide 10: Continuing to reward our shareholders as we grow

    Continuing to reward our shareholders as we grow ƒ Share Buybacks – Public listing to 30 June 2007 Total return to shareholders since BSL’s For personal use only ƒ Purchased and cancelled 116m shares public listing (July 2002): − on market – 90m shares − off market – 26m shares ƒ Share buybacks $ 70

  11. Slide 11: Group financial headlines FY2007 vs. FY2006

    Group financial headlines FY2007 vs. FY2006 Across the board improvements Twelve months ended 30 June Variance For personal use only 2007 2006 % Revenue A$8,913M A$8,031M Up 11% External despatches 7.621M tonnes 7.559M tonnes Up 1% EBITDA A$1,423M A$850M Up 67% EBIT A$1,099M A$556M Up 98% NPAT - Rep

  12. Slide 12: Record sales volumes, driven by strong demand for BlueScope's products

    Record sales volumes, driven by strong demand for BlueScope’s products FY2005 FY2006 FY2007 For personal use only Exports Exports Exports 16% 15% 28% 41% 36% 15% 7% Exp 15% 21% 4% North orts America 9% Exports - Am Euro eric p India e/Med/M as 17% E/ 6% Exports - Asia 11% Australia Asia 32% 35% 10%

  13. Slide 13: EBIT variance FY2006 to FY2007 by item

    EBIT variance FY2006 to FY2007 by item Recovery from • Productivity initiatives 109 For personal use only ƒ Asset Sales Western Port fire and • Cost escalation (127) - Vistawall 59 increased Asian • Freight (28) - Other (2) despatches • Other 12 ƒ Tinplate closure 142 ƒ Redundancy provision 41 ƒ Smo

  14. Slide 14: Cashflow – very strong leading to lower debt/gearing

    Cashflow – very strong leading to lower debt/gearing For personal use only A$M FY2003 FY2006 FY2007 Very strong operations First full year of performance (72% up on FY Source 2003) operations after listing Cashflow from operations 795 903 1,364 Working capital improvement initiatives continue to pay

  15. Slide 15: Balance sheet – working capital reductions and lower gearing

    Balance sheet – working capital reductions and lower gearing For personal use only improve financial flexibility As at A$ Millions 31 December 2006 30 June 2007 Sales up 11% with total Assets receivables & Cash 58 36 inventory flat Receivables 1,207 1,269 Inventory 1,409 1,271 Other Assets 1,143(1)

  16. Slide 16: Reporting Segment Performance

    For personal use only Reporting Segment 1200 Performance 1100 1000 900 800 700 600 500 400 Full year June Hot Rolled Coated & Bldg NZ & Pacific Coated & Bldg Hot Rolled Coated & Bldg Corporate & Discontinued Full year June 2006 Products Products Aust Steel Products Products Asia Products Nth Product

  17. Slide 17: Reporting business segments

    Reporting business segments Corporate / Group For personal use only Australia New Zealand Asia North America Hot Rolled Coated & New Zealand & Coated & Hot Rolled Coated & Products Building Pacific Islands Building Products Building Australia Products Products Products Asia North America Products Au

  18. Slide 18: All BlueScope business segments profitable

    All BlueScope business segments profitable EBIT variance FY2006 to FY2007 by reporting business segment For personal use only 1200 $213m $1099m 1100 1000 $28m $44m $23m 900 $302m EBIT A$ Millions ($7m) ($45m) 800 ($15m) 700 600 $556m 500 400 Full year June Hot Rolled Coated & Bldg NZ & Pacific Coate

  19. Slide 19: Hot Rolled Products Australia (PKSW) – outstanding operational strength

    Hot Rolled Products Australia (PKSW) – outstanding operational strength continues to meet strong demand Markets ƒ Domestic demand improves, with despatches up 22% For personal use only ƒ Hot rolled coil (HRC) sales to pipe and tube ƒ PKSW sales revenue up 13% to A$3,919m ― Strong engineering and non

  20. Slide 20: Port Kembla Steelworks productivity improvements continue

    Port Kembla Steelworks productivity improvements continue For personal use only 10000 1600 9000 1400 Productivity (Crude Steel Output, Tonnes/Employee/Year) 8000 1200 7000 1000 6000 5000 800 Employee Numbers 4000 600 3000 400 2000 200 1000 0 0 2000 2001 2002 2003 2004 2005 2006 2007 Employees (Port

  21. Slide 21: Coated and Building Products Australia – variance analysis

    Coated and Building Products Australia – variance analysis For personal use only ƒ FY2007 vs FY2006 EBIT variance analysis (excluding the packaging business, which is reported as a Discontinued Business). 250 $23m 200 $22m EBIT A$ Millions $74m 150 ($40m) ($12m) ƒ Steel Feed costs (35) $110m ƒ Coati

  22. Slide 22: Coated and Building Products North America (Butler Buildings)

    Coated and Building Products North America (Butler Buildings) – downstream success in North America continues For personal use only ƒ Sales revenue down 6% to A$788M Note: The Vistawall business was sold on 29 June 2007 for US$190M. ƒ FY2007 return on net assets (pre-tax) 50% Its financials are not

  23. Slide 23: Coated and Building Products Asia – excellent growth and outstanding operations

    Coated and Building Products Asia – excellent growth and outstanding operations performance but mixed EBIT outcomes ƒ Established Businesses ƒ Start-up Businesses For personal use only ƒ Thailand - “coup stalls strong recovery” ƒ Vietnam – “overcoming challenges” ― Political uncertainty continues wi

  24. Slide 24: Smorgon Steel Distribution Acquisition

    For personal use only Smorgon Steel Distribution Acquisition Page 24

  25. Slide 25: Overview of Smorgon Steel's distribution business and transaction details

    Overview of Smorgon Steel’s distribution business and transaction details ƒ Australia’s second largest distributor of steel and metal products (flat and long) For personal use only ƒ Smorgon Steel Distribution has: ¾ LTIFR performance of 3.8 (injuries per million hours worked) ¾ In FY 06 sold approx

  26. Slide 26: Acquisition of Smorgon Steel's distribution business

    Acquisition of Smorgon Steel’s distribution business For personal use only Strategic rationale ƒ Brings BlueScope closer to its end customers, consistent with our downstream strategy ƒ Increases ability to serve customers through a broader combined distribution network and product range including fl

  27. Slide 27: Major project capital and investment spending profile

    Major project capital and investment spending profile Total Est. Actual to Actual For personal use only PROJECTS All in A$million Capex / Cost 30/6/06 FY2007 FY2008 FY2009 FY2010 Projects completed Thailand – Coating expansion 80 80 - - - - Vietnam – Coating / Painting 136 136 - - - - China - Coatin

  28. Slide 28: Global Steel Industry

    Compound Annual Growth Rates For personal use only 1,400 6.8% 1,200 1,000 0.9% Tonnes 800 Million 3.1% China: 20.9% World Ex- 600 China: 2.5% USSR: -2.0% (2000-2007) World Ex - 400 6.0% USSR: 1.4% Japan: 6.9% (1980-2000) World Ex- 200 Asia: 15.7% Japan: 1.8% World Ex-Asia: (1965-1980) 5.3% (1950- 0

  29. Slide 29: China has driven global production and consumption growth since 2000

    China has driven global production and consumption growth since 2000 For personal use only Crude steel production, 1950 - 2007 (Compound Annual Growth Rates, %) 1,400 6.8% 1,200 1,000 0.9% Million Tonnes 800 3.1% China: 20.9% World Ex- 600 China: 2.5% USSR: -2.0% (2000-2007) World Ex - 6.0% USSR: 1.

  30. Slide 30: Global steel industry – our long term view has not changed

    Global steel industry – our long term view has not changed For personal use only CHINA REST OF WORLD ƒ Raw material, energy and internal transport costs ƒ Global economic growth remains strong reducing relative competitiveness of China ƒ Japan – record steel production likely in 2007 ƒ Steel reform

  31. Slide 31: Global steel industry consolidation – announcements over last 12 months

    Global steel industry consolidation – announcements over last 12 months August 07 – US Steel to acquire Stelco for US $1.85 billion. For personal use only – OneSteel acquires Smorgon Steel. BlueScope acquires Smorgon distribution. July 07 – Gerdau Ameristeel announced its intention to acquire Chapar

  32. Slide 32: Global steel industry consolidation increases pace

    Global steel industry consolidation increases pace Most companies shown announced intention to acquire or formed alliances For personal use only What will happen next? 120 100,000 Europe 90,000 / Americas Crude Steel Production (MT) 100 Revenue (US$m) 80,000 Europe / Asia 70,000 80 Asia 60,000 Austr

  33. Slide 33: July 2002 – August 2007 – Oh what a journey

    July 2002 – August 2007 – “Oh what a journey” For personal use only Profitable Profitable Dynamic Dynamic Through Throughthe the Global GlobalSteel Steel Cycle Cycle Market Market Strong StrongBoard Board&& Value ValueAdded Added Management Management Branded Branded Team Team Products Products Grow

  34. Slide 34: Taking care of our shareholders

    Taking care of our shareholders For personal use only BlueScope’s total return to shareholders vs ASX 100 over 5 years since listing. 15/7/2002 – 16/7/2007 600 500 400 INDEX 300 200 100 0 15/ 07/ 02 15/ 12/ 02 15/ 05/ 03 15/ 10/ 03 15/ 03/ 04 15/ 08/ 04 15/ 01/ 05 15/ 06/ 05 15/ 11/ 05 15/ 04/ 06 15

  35. Slide 35: From the Triangle to the Trapezoid

    From the “Triangle” to the “Trapezoid” For personal use only FY2007 FY2003 +270% A$2,064M Downstream A$557M +42% A$3,751M Midstream A$2,649 +46% Upstream A$4,805M A$3,291 Less internal / (A$1,225M) (A$1,760M) other +68% Total revenue A$5,272M A$8, 860M Page 35

  36. Slide 36: Historical revenue and EBITDA growth by stream since listing

    Historical revenue and EBITDA growth by stream since listing For personal use only A$ Millions FY03 FY05 FY07 Growth 2003 - 2007 Sales Revenue Upstream 3,291 4,539 4,805 + 46% Midstream 2,649 3,078 3,751 + 42% Downstream 557 1,835 2,064 + 270% Other / Eliminations (1,225) (1,511) (1,760) Total 5,272

  37. Slide 37: From a promising start in 2002 to a dynamic future in 2007

    From a promising start in 2002 to a dynamic future in 2007 For personal use only • SHAREHOLDERS • CUSTOMERS • COMMUNITIES • EMPLOYEES Page 37

  38. Slide 38: Questions & Answers

    For personal use only Questions & Answers Page 38

  39. Slide 39: 12th Annual JP Morgan Asia Pacific and Emerging Markets Equity Conference

    For personal use only The 12th Annual JP Morgan Asia Pacific and Emerging Markets Equity Conference, New York Kirby Adams, Managing Director and Chief Executive Officer 24 – 26 September 2007 ASX Code: BSL

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