Posco Holdings Inc. · KRX:005490
Posco — Q2 2015 Earnings Presentation
29 slides from Posco's earnings presentation, Jul 15, 2015
Slide 1: 2Q 2015 Earnings Release
Exhibit 99.1 Exhibit 2015 posco July 15, 2Q99.1 2015 Earnings Release
Slide 2: 2Q Operating Business Performance
Q Operating Business Figures Certain contents inStrategy this Performance presentation in(IP this2.0) presentation are basedare onsubject unaudited to change financial during statements the course of the ofcompany. auditing process.
Slide 3: 2Q Parent Profitability
2Q Parent Profitability Production (in 9.2% 9,260 741 9,183 Crude 8,601 8,542 Revenue 6,576 Operating Product 565 2014.2Q [Sales 8,165 Steel Sales S *(portion) 977 October *World 3P OSCO Gwangyang) Tthousand Operating S1,276 Carbon 622 3,132 9.2% 2,581 436 9,316 7.6% 8,600 8,532 8,170 Volume 620 Inc
Slide 4: 2Q Consolidated Profit
2Q Consolidated Profit OP 16,704 Margin 1.0% ·?686 Revenue (in 2014.2Q Steel *Chem/Mat’l 4PPlantec-related OSCO Net billion Operating 5.0% 117 12,564 15,101 profit Profit declined 4.8% 4.5% Earnings 2015.1Q Operating ROE KRW) declined :/Others 11,764 3.0% 15,189 Internal Income Performance 4.3% due
Slide 5: POSCO 2Q Financial Structure
5POSCO 2Q Financial Assets (in 84,631 Liabilities (%) 84,567 83,656 44,573 45,271 2014.2Q 38,894 39,296 billion Operating 86.9Liabilities toEarnings 86.8 44,762 2015.1Q Structure Equity KRW) to Equity Performance 40,058 89.8 (in Equity 2015.2Q ratio billion Release returned 2014.2Q KRW) July 15, to
Slide 6: POSCO Crude Steel Production and Sales Targets
6 2015 2014 POSCO Crude Product tons) Consolidated KRW) Revenue Investment Business 2015(F) Steel Sales Target (trillion ()Production Target Business 5.4 Earnings()Plan (Parent) 34.3 29.2 65.1 4.2 35.4 27.7 63.9 Target (million Release Investment KRW) July 37.7 15, 37.8 (trillion 3.0 3.0 2015
Slide 7: Appendix #1. Global Steel Market Environment
Appendix#1. Global China’s “Expect Actual China —Steel recover -—Chinese [China’s (in 48.2 45.1 43.0 37.4 14.7 13.7 India 11.0 Distribution (million *‘15.1 7P OSCO 2H World million YoY Steel 43.0 96.2 15.2 12.9 restocking 72.4 2:economic Steel 3Steep due demand Steel Steel modest tons) Earnings Crud
Slide 8: Appendix: Domestic Steel Demand Industries
Appendix Domestic 1,108 1,206 Automobile Exports Production 6.3 While Shipbuilding Both 55.5 (trillion Construction Engineering “3Q Outlook (in 1Q Nominal *12,912 8P OSCO POSRI(July POSRI(2015.7) thousand 2Q 6.0 steel 3Q 1,002 3Q 3Q 6.4 3,214 KRW) (thousand Earnings for investments Consumption consu
Slide 9: Appendix: Raw Materials Iron Ore and Coking Coal
Appendix Raw Iron China However, Chinese “Fine Price steel [Iron 133 120 103 122 74 2013 55 3Q *Platts 9P OSCO 62 4Q 135 142 113 Ore market Materials Ore 2013 went slightly is ore 58 during 1Q 62% to 112 steelmakers’ Earnings 142 Coking 88 Price] within as 1. stay 2Q up 2014 88 Fe depression 111 Bus
Slide 10: Appendix: Summarized Income Statements
Appendix Summarized (in 2014.2Q 731 Other Share 37 Equity-accounted Finance Foreign 283 & Net (Net Owners 511 POSCO 10 Company Translation 63 billion Profit 339 686 978 Margin) 22 Operating of of Currency Items 198 Earnings 45 69 Profit 2015.1Q +85 2. 487 KRW) the (Operating Financial 141 Statements
Slide 11: Appendix: Consolidated Financial Position
Appendix Consolidated (in 2014.2Q Current Other Financial PP&E 27,771 Owners Controlling *Total **Including POSCO Cash billion Assets Liabilities Long-term 35,500 323 &Assets of Earnings 2015.1Q Assets** Financial 2. KRW) the Equity Company Other 84,567 Financial Statements 35,210 52,693 &Release 20
Slide 12: 2Q Operating Business Strategy Performance (IP 2.0)
2Q Operating Business Strategy Performance (IP 2.0)
Slide 13: Innovation POSCO 2.0 - Accelerating Innovation
Innovation —Accelerating July POSCO15, 2015 POSCO innovation 2.0 through management reforms
Slide 14: IP 2017 Contents
* IP Contents 1. 2. II. III. IV. Background IP Introduction 2017 Key :1.0 Innovation Strategies Results Financial I. IP 1.0 of ofPOSCO IP Vision IP Target 1.0 2.0 &&Results Vision
Slide 15: External Environment and Background of IP 1.0
External Posco -1. Launched Loss-making Steel 2013 –(Mg Survival 1endangered Innovation 15Unfocused OP Liabilities Poor Performance Strengthen Background smelting, Margin: oversupply perfomance performance environment the POSCO *to investments 2businesses A-M, vision 17.2 High-purity Equity: Select
Slide 16: IP 1.0 Results
-2. Generated 2014 (Target) Expanded Secured Solution-based 100 *Targe Executed Set Smart —Lithium Improved (raised Steps Restructuring -1.5 Settled IP Nurtured (545 (PCP* S&P World PJT IP base 90 cases) target Non-debttaken 1.0 Results Exit rating Strengthen Select Improve Renew Remaining&increased
Slide 17: Contents II. Introduction of IP 2.0
Contents II. 1. 2. *.3. Key 2017 IP Importance Meaning IP Introduction :2.0 Innovation Strategies Financial Strategy I. IP of 1.0 of IPofTarget IP POSCO 2.0 Vision IP2.0 2.0&&Vision Results
Slide 18: Importance of IP 2.0
-1.2015 Mid-term Steel KRW) (trillion 50% 32% *ArcelorMittal Worsened Weak Rise Both Global Oversupply Japanese Subsidiaries POSCO Recovery Reputation Slush Overpriced Lack Need 18HR Slab Importance of 70% 16% demand of price to :fund performance :(98.2) Chinese steel HR trust CIS trust upgrade Subs
Slide 19: Meaning of IP 2.0
?-2. Meaning Strategy Action Innovation One, Renewed Management Activated Worsened 19 Continued Execution Top, and ofEmergency Derived New external power poor POSCO IP trust Council of 1.0 Improve performance IP doubled weakened reinforced Reform environment 2.0 (IP) 4 Innovative 2.0 1.0 Recover Man
Slide 20: Rebuild IP 1.0 Strategy: Key Strategies
-3.1.0 Enhance Rebuild IP Steel Strengthen Improve Competitiveness Reached Structure Demand Select New Complete Renew Infrastructure 20 IPGrowth Prolonged 2.0 IP &Trust trust Concerns for corporate non-debt 2.0 Focus Strategy early-exit renewable Innovative crisis Biz by responsibility ?margin setti
Slide 21: IP 2.0 Vision and Four Agendas
Steel Strengthen POSCO Vision Speed-up Agenda 3Innovative 4Results Management management One Ideas Mgmt. New Top 2IP Clean 21Generate 3Build 2.0 4POSCO POSCO Growth POSCO Competitiveness POSCO One Vision of Ethical the Restructuring New POSCO Great reform Biz Infrastructure Top The 2.0 to POSCO Most
Slide 22: Contents III. Key Strategies
Contents III 1. 2. 3. 4. *IV. IP Strengthen Speed-up Generate Build Key 2017 : Innovation Strategies Ethical Financial I. IP Results Restructuring Steel 1.0Management POSCO Vision Target Competitiveness of New &&Results Growth Vision Infrastructure II. BizIntroduction of IP 2.0
Slide 23: III-1. Recover Steel Competitiveness
III-1. Recover IP Rebuild Solution-based 1.3 <Upstream> 33 2.5 <Downstream> 8.7 8.3 Coil Elevate ?’14 (‘15) + Cost 91% -74 Human Commercial Solution Technical Avoid Lower Downstream Proceed 100% Remove Number +2.0 45 million 9.1 357 ’15 (‘17) Center competitiveness Domestic Strengthen Key 50% ‘16 co
Slide 24: III-2. Speed-up Restructuring
III-2. Solidify Realign Steel+4 42 Domestic Reduce 22 group Overseas 167 Set -117 :Aggregated Materials 24 Operating Foucs Dispose Strict Pursue Dispose/liquidate/merger Run Stronger regular Speed-up resturcturing *control on low-performing 30% domains Based the financial early Subsidiaries steel Af
Slide 25: III-3. Generate New Growth Businesses
III-3. Early IP New Smeltering, ?B Commercialize *D convergence Lithium (20,000 Find -’15. (in —Hydroxide <Timeline M+t” 25 M+T” Core Recreate Lithium Nickel Fuel Set Proceed A~E Demo Hub E2.0 relation :‘Smart Proved Smart growth Generate Engineering development M Key cell T+E Technology: : Partner
Slide 26: III-4. Build Ethical Management and Infrastructure
III-4. Renew IP *Build Discard Strengthen —Extend Reduce -efficiency Customer 26 Apply The Optimize Run Level-up Repost Increase Bribery, 2.0Build 3global ‘Clean Key ethical 100% staff-level ‘One malpractice excess-labor global society labor Untransparent Embezzlement, the Strategies Business manpow
Slide 27: Contents IV. IP 2017 Vision and Target
Contents *IV. IP2017 : Innovation Financial I. IP 1.0POSCO Vision Target&&Results Vision II. Introduction of IP 2.0 III. Key Strategies
Slide 28: Reach Consolidated EBITDA Target in 2017
-1. 2017 Reach EBITDA 4.6 Consolidated 7.5 27.4 6.5 4.5 Debt ‘14 Add —2017 50 —Complete Labor (20,000 Speed-up Expenses —Effect Non-debt Raise 28 Reduce 4.6 trillion 5.0 23.5 ‘17 value 3.1 20.7 additional EBITDA trillion ‘14 Automotive WP consolidated tons) Financial by :financing restructuring tril
Slide 29: Build Independent Vision and Business Domains
-2. Build in “Independent Top -Global Techno “Smart POSCO 29 The Expand Trading leadership Cost Infrastructure Materials Steel Energy No.1 Steel Vision domestic Most leadership the Fuel No.1 Industry lity and New the groundwork Respected (2025) “Support cell Great 4Steelmaker, Growth Provider IPP Ma