Slide 1: 2016 Investors Forum
January 28, 2016 2016 Investors Forum Figures 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 process. Exhibit 99.1
Slide 2: 2015 Operating Performance
2015 Operating Performance Major Business Activities ▶ Figures 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 process.
Slide 3: Parent Income: 2015 Operating Performance
Parent Income 2015 Operating Performance POSCO Earnings Release ｜January 28, 2016 Profitability improved with higher WP product sales and cost reduction, despite product price decline Net debt heavily scaled down as investment and working capital decreased and cash was raised from restructuring Net
Slide 4: Consolidated Income: 2015 Operating Performance
Consolidated Income POSCO Earnings Release ｜January 28, 2016 2015 Operating Performance Net profit recorded loss due to poor operating results of subsidiaries and large valuation losses Free Cash Flow turned positive and debt ratio dropped by enhancing financial soundness Revenue Operating Profit Ne
Slide 5: Breakdown of Consolidated Net Loss
POSCO Earnings Release ｜January 28, 2016 ※ Breakdown of Consolidated Net Loss 2015 Operating Performance Recognized valuation losses of 1.6 trillion KRW on external issues, as raw material price fell and exchange rate increased ※ Profit-gained from selling equity of POSCO E&C (3Q, Parent-basis) of 3
Slide 6: 2015 Operating Performance
2015 Operating Performance Major Business Activities ▶
Slide 7: Strengthen Steel Competitiveness: World Premium product sales
Strengthen Steel Competitiveness Major Business Activities POSCO Earnings Release ｜January 28, 2016 World Premium product sales volume went up by 25% through Solution-marketing Activities WP product sales volume Increase sales volume by 26% as a stretch target for 2016 Sales Portion Solution marketi
Slide 8: Strengthen Steel Competitiveness: Low-cost production
POSCO Earnings Release ｜January 28, 2016 Strengthen Steel Competitiveness Reinforced low-cost production by reducing fixed cost through enhancing process efficiency Plan to cut ’15~’16 consolidated fixed cost by 1.4 trillion KRW Cost Reduction Investment 2,573 2015 2016 5,149 +2,576 1,665 5,256 +3,5
Slide 9: Speed-up Restructuring
Speed-up Restructuring POSCO Earnings Release ｜January 28, 2016 Completed 46 cases of restructuring (34 subsidiaries , 12 items of assets), B/S improvement of 2.1 trillion KRW 68 cases completed* from 4 year target, 149 Restructuring subsidiaries (Target 95 → 38 companies complete) ` 12 19 5 ’15 ‘16
Slide 10: 철강 본원경쟁력 강화 / Generate Results on New Growth Biz
철강 본원경쟁력 강화 주요 경영활동 POSCO Earnings Release ｜January 28, 2016 솔루션마케팅 연계 활동으로 WP제품 판매량 25% 증가 ’16년 판매량 목표 16백만톤으로 Stretch Target 설정 * X-AHSS: Extra Advanced High Strength Steel, NO: Non-Oriented magnetic steel Generate Results on New Growth Biz POSCO Earnings Release ｜January 28, 2016 Made progress on
Slide 11: Generate Results on New Growth Biz
Generate Results on New Growth Biz POSCO Earnings Release ｜January 28, 2016 * ENCAP : European New Car Assessment Program , IIHS : Insurance Institute for Highway Safety (Source: South Bay Environmental Services Center, http://www.sbesc.com) Started to develop and sell key materials, in preparation
Slide 12: Secondary battery materials and lithium extraction
Completed commercialization base for secondary battery materials by using POSCO’s own technology POSCO Earnings Release ｜January 28, 2016 * Lithium Manganese Oxide (LMO) : Excellent yield and stability. Wide usage from small batteries to Energy Storage System for automobile Lithium Titanium Oxide (L
Slide 13: Build Ethical Management Infrastructure
Build Ethical Management Infrastructure POSCO Earnings Release ｜January 28, 2016 Rebuilt corporate culture by fortifying management structure based on performance and ethical conduct Strengthened performance-based management structure Implemented ethical and market-driven corporate culture Zero tole
Slide 14: Major Subsidiaries: POSCO E&C, Daewoo International
Major Subsidiaries POSCO Earnings Release ｜January 28, 2016 POSCO E&C Won order of 12.5 trillion, as construction market thrived - “L-City” in Busan (1.5 trillion), Philippines Masinloc power plant (0.5 trillion) Daewoo International Despite oil price drop, profit from Myanmar gas field sustained -
Slide 15: Major Subsidiaries: POSCO Energy, POSCO-Chemtech
Major Subsidiaries POSCO Earnings Release ｜January 28, 2016 POSCO Energy POSCO-Chemtech Expanded overseas power business and push forward domestic coal-fired plant Project (MW) Progress Samcheok coal-fired 2,100 ∙ Selected main supplier (’15.Nov) ∙ Risk relief through landing FIs (‘16) Vietnam Mong
Slide 16: Business Plan 2016
Business Plan 2015 2016(f) POSCO Revenue (trillion KRW) 25.6 24.3 - Crude steel production (million tons) 38.0 37.2 - Product sales (〃) 35.3 35.3 Investment (trillion KRW) 2.0 2.1 Net Debt (〃) 0.4 △0.6 Consolidated Revenue (trillion KRW) 58.2 58.7 Investment (〃) 2.5 2.8 Net Debt (〃) 16.5 14.6 POSCO
Slide 17: Appendix
Appendix 1. Business Environment – Steel Demand, Raw Materials 2. Financial Statements ▶
Slide 18: Domestic Steel Demand
Domestic Steel Demand POSCO Earnings Release ｜January 28, 2016 Production flat as export increase, despite the effect of consumption tax being subsided While new orders are slowing down, new construction amount will continue to increase by orders won in 2013 Public construction staggered as SOC budg
Slide 19: Global steel demand outlook
“Economy started to bottom out as seen from steel price and business sentiment rebound” “Global demand to grow by 1% as emerging countries show good signs despite China’s slow-down” China : As investment dampened due to unstable economy, construction demand will continue to slow down, however the de
Slide 20: Iron ore and coal: 2015.4Q and 2016 Outlook
POSCO Earnings Release ｜January 28, 2016 2015.4Q 2016 Outlook Price continued to stay weak as production cuts from major mills, triggered by slow steel economy, led to actual demand fall of iron ore. The quarter average price dropped from U$55/ton (3Q) to U$47/ton in fourth quarter As the weak steel
Slide 21: Summarized Statements of Income
2013 2014 2015 YoY Revenue 61,865 65,098 58,192 △6,906 Gross Profit 6,860 7,283 6,534 △749 (Gross Margin) (11.1%) (11.2%) (11.2%) - Selling & Admin. Expenses 3,864 4,070 4,124 54 Operating Profit 2,996 3,214 2,410 △804 (Operating Margin) (4.8%) (4.9%) (4.1%) - Other Operating Profit △422 △710 △893 △
Slide 22: Consolidated Statements of Financial Position
2013 2014 2015 YoY Current Assets 31,666 32,627 29,181 △3,446 Cash & Financial Goods* 7,135 5,197 8,686 +3,489 Account Receivable 11,493 11,786 9,596 △2,190 Inventories 9,798 10,471 8,225 △2,246 Non-Current Assets 52,789 52,625 51,228 △1,397 Other Long-term Financial Assets** 5,263 3,600 3,205 △395
Slide 23: Consolidated Operating Results
Consolidated Operating Results POSCO Earnings Release ｜January 28, 2016 Revenue Operating Profit Net Profit 2013 2014 2015 2013 2014 2015 2013 2014 2015 Steel 48,024 49,597 44,837 2,341 2,430 1,843 1,449 857 181 Trade 25,919 31,261 27,008 196 413 374 10 181 39 E & C 10,782 10,304 9,868 464 314 147 1