Bluescope Steel Limited · ASX:BSL
Bluescope Steel — Investor Presentation (June 2006)
26 slides from Bluescope Steel's investor presentation, Jun 29, 2006
Slide 1: Asia Day Introduction
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Slide 2: Our team and organisation model
Our team and organisation model _ BOARD Graham | Kraehe ~ : Chairman Kevin McCann Diane Grady Ron McNeilly ~ Dep ty Chairman Paul Rizzo Tan Yam Pin — Kirby Adams Managing Director / CEO Finance Australian Australian Asian Building BlueScope P——___—_#—_ , and Manufacturing & Steel Paul O'Malley New M
Slide 3: Our strategy remains focused on growing upstream and downstream value
Our strategy remains tocused on rcrowing Ong: and downstream value Midstream Asia » Thailand ~ start-up second metal coating line (MCL2) ~Ffamp up CRC » Vietnam ~ start-up metal coating (MCL) and paint line (PL) » China ~ start-up paint line (PL) -term mids ream Asia * Thailand - MCL2 & CRC Ramp up,
Slide 4: Our view has not changed
mm view has not changed = ~ Current industry issues: Likely industry outcomes long term: * China’s capacity growth / fragmentation = China - steel reform initiatives taken / exports discouraged = Higher raw material costs * China - increased demand / steel = Higher energy and other costs F displaces
Slide 5: Matters to be covered
_ Matters to be covered _ Asia - challenged in FY2006 but great platform from FY2007 = Other segments — second half FY06 largely as expected ~ portfolio effect = FY2006 guidance — operational performance remains within range and additional restructuring to reduce business risk eg. closing Packaging
Slide 6: Our Asian manufacturing footprint
Our Asian manufacturing footprint _ Vietnam Malaysia Brunei Stikanka ~ rhatland o .* Singapore Indonesia Pages
Slide 7: Coated and Building Products Asia financial performance
L High Capex Phase n Coated and Building Products Asia . financial performance Sales Revenue A$m Agm CLL . : — | _ _— on 100 oe 80 a 60 | i a a 40 20 2002 2003 2004(I) 2005 2006 (E) 2007 2008 Fiscal Years Notes | Hag EBIT —— Sales Revenue (1) Acquired Butler April 2004 / Te . =k 1200 cc 1000 600 400
Slide 8: Hot Rolled Products
Hot Rolled Products " Second Half FY06 " PKSW lower than 1H due to slab and HRC price decreases » Some benefit from Q4 steel price rebound " North Star BlueScope's performance strong « Domestic demand remains below FY05 levels " Other Higher slab and HRC prices for 1Q FY07 FY07 iron ore price increa
Slide 9: Recommended HRC and slab price benchmarks
= Previously recommended the Japan to Korea HRC price as being a reasonable public benchmark for BlueScope’s domestic and Asian HRC sales - still valid but = Now recommending the following better benchmarks HRC Asian HRC Benchmark Price . _ $700 Steel Business Briefing SBS HRC East Asia Import CFR .
Slide 10: Port Kembla Steelworks despatches
Port Kembla Steelworks despatches - stronger production - = weak (ktonnes) 600 400 200 0 External Product FY05-1H FY05-2H FY06-1H FY06-2H(E) Sales Mix Gi Internal B Domestic Exports * Slab 38% 46% 45% 43% HRC 48% 42% 45% 46% Plate/Other 14% 12% 10% 11% * including BlueScope Steel Asia feed
Slide 11: New Zealand and Pacific Steel Product
‘New Zealand and Pacific Steel Product = Second Half FY2006 * Lower than 1H as expected ® Some production issues FE = New Zealand economic growth = . 2 slowing a a = Other FYO5-1H mi FY05-2H FYO6-1H mm FY06-2H * Continue to benefit from captive iron sands resource
Slide 12: Coated and Building Products Australia
| : Coated: and Building Products Austral ia : = Second Half FY2006 50 " Expected turnaround restrained by higher zinc and aluminium costs and packaging losses " Disappointing performance continues into 2H « Production capacity back on stream (no fire) = Upturn in demand from Australian manufacturin
Slide 13: Packaging Products: Material flow chart
- Packaging Products - : Material flow chart 1. Pickling 4. Temper Rolling
Slide 14: Decision taken to close BlueScope's tinplating business
Decision taken to close BlueScope’s tinplating business No longer profitable nor viable given current market size and raw materials / price squeeze Timing of closure to be confirmed following discussion with customers and alliance partners Approximately 250 positions will be redundant Pickle line an
Slide 15: Huge increase in FY2006 zinc and aluminium costs
Huge increase in FY2006 Zinc and Alumini Tonnes Zinc Aluminium AUSTRALIA Springhill 21,250 10,000 Western Port 17,500 9,500 Sub-total 38,750 19,500 NEW ZEALAND 6,500 3,500 NORTH AMERICA Vistawall - 30,000 ASIA 42,250 41,250 TOTAL 57,500 64,250 PRICE Av FY2005 price US$ per tonne US$1,165 US$1,816 Av
Slide 16: Coated and building products North America
EBIT A$ Millions 15 -20 FY05-1H BB FY05-2H EI FY06-1H =m FY06-2H _ Coated and building products North America | Second Half FY2006 ® Better than expected: -~ mild winter -- Operational improvements taking hold ~ stronger markets and pricing ~ regional organisation -~ new team and leadership ® Korete
Slide 17: Reporting segment changes
BlueScope pepomna zeae changes| (effective from FYO6 Annual The new reporting segments will comprise : Australia - two segments = Hot Rolled Products Australia -- Port Kembla Steelworks « Coated and Building Products Australia North America - two segments ® Hot Rolled Products North America - North
Slide 18: FY2006 EPS guidance update
__ FY2006 EPS guidance update = Currently expect to be at the bottom end of our guidance range of $0.65 - $0.75 pet share Significant items included in February guidance » Lower HRC prices in H2 « Earnings performance for Asian and Australian businesses (H1/H2) « Asian pre-operating costs (H1/H2) »
Slide 19: One-off restructuring costs not included in guidance EPS
= One-off restructuring costs not included in guidance EPS (estimated range) » Packaging products asset impairment write-off « Tin mill closure costs ($0.15 — $0.20) ® Other internal restructuring = Final quantification of one-off restructuring costs taken in FY2006 will be advised on 21 August
Slide 20: FY2006 other internal restructuring
-FY2006 — Other internal restructuring = Executive and support staff restructuring « Approximately 250 staff » 25 executives (of 180) = Taiwan closure « Construction contract losses " Closure costs = Chullora solid block paint line closure
Slide 21: Balance Sheet
Balance Sheet = Gearing « February 2006 reported 33.2% (net debt) « June 30, 2006 estimate 38% = Why? « Growth capital (FY2006 peak spend of around $800m) * Lower cash due to: ~ reduced second half operations performance ~ higher working capital (higher Q4 pricing and export despatches) ~~ higher in
Slide 22: Capital management: share buybacks
Capital manage ent — Sh ‘buybacks « Status - Public listing to 30 June 2006 « Purchased and cancelled 115m shares -- on-market — 89m shares -- off-market - 26m shares ® §99m shares on issue as at 29 June 2006 = Current on-market program " |nitiated November 2005 ® Last purchase January 2006 « Will n
Slide 23: Capital management: dividends
Cents Per Share ~ Capital management - Dividends Historic dividend profile - All fully franked FY2003-1H FY2003-2H FY2004-1H FY2004-2H FY2005-1H FY2005-2H FY2006-1H FY2006-2H @ Interim £1 Final Bi Special FY2006 As the Chairman stated in the ASX Release 8 February 2006, “I reaffirm that the Board in
Slide 24: H2 FY2006 challenging
= H2 FY2006 challenging « Dramatically lower Q3 prices for HRC, slab, galvanised, packaging products ® While inputs (iron ore, coal, scrap) remained at high levels ® While inputs such as zinc / aluminium coating metals soared « While A$ strengthened = Upstream stronger than expected = Downstream tur
Slide 25: Questions and Answers
Questions and Answers A VeRY DIFFERENT KIND OF STEEL COMPANY
Slide 26: L ee MT
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