Slide 1: Investor Briefing – Building Products ASEAN, North America & India segment
For personal use only Investor Briefing – Building Products ASEAN, North America & India segment Sanjay Dayal – Chief Executive, Building Products Matthew Coghlan – CFO, NS BlueScope Coated Products 29 October 2013 BlueScope Steel Limited. ASX Code: BSL
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.
Slide 3: Agenda
Agenda For personal use only Introduction NS BlueScope Coated Products Overview NBCP: Macroeconomic & market environment NBCP: Business direction Tata BlueScope Steel joint venture Financial drivers & performance Summary 3
Slide 4: Introduction
For personal use only INTRODUCTION
Slide 5: Safety – world class performance and striving for zero harm
Safety – Building Products continues to have world class performance and is striving for zero harm For personal use only Lost time injury frequency rate (FY2008-2013) Medically treated injury frequency rate (FY2008-2013) Medically treated injuries per million man-hours worked Lost time injuries per
Slide 6: Building Products ASEAN, North America and India – segment overview
Building Products ASEAN, North America and India – segment overview For personal use only • Comprises the building products businesses in Southeast Asia and North America which have similar product manufacturing and market characteristics – Operates metallic coating and painting lines in Thailand, M
Slide 7: Segment business structure
Segment business structure For personal use only BlueScope NSSMC 1 BlueScope Tata Steel 50% 50% 50% 50% NS BlueScope Coated Products (NBCP) Tata BlueScope Steel (TBS) A BlueScope controlled, and therefore A jointly controlled joint consolidated, joint venture venture, and therefore equity accounted
Slide 8: NS BlueScope Coated Products Overview
For personal use only NS BLUESCOPE COATED PRODUCTS OVERVIEW
Slide 9: Long established position in Asia
Long established position in Asia For personal use only • Long established position in Asia with coated and painted steel building products – First Asian facility was established in Singapore in 1965 • Partnership with NSSMC provides platform to access new markets and technology • Broad footprint of
Slide 10: Why have we partnered with NSSMC?
Why have we partnered with NSSMC? For personal use only • Strong, long-standing relationship with NSSMC through many technical collaborations (over 65 projects since 1970) – Currently working with NSSMC on next generation COLORBOND® and ZINCALUME® • Both companies are leaders in steel coating and ma
Slide 11: Our footprint in Thailand
Our footprint in Thailand For personal use only • A manufacturer of innovative steel building solutions for the Thai building and construction industry - premium niche products • In-country manufacturing capability since 1988 (first building solutions business located near Bangkok) • Three manufactu
Slide 12: Thailand facilities and projects
Thailand facilities and projects For personal use only Facilities Projects Nissan Showroom Metal coating & painting facility, Map Ta Phut AsahiKasei Factory 12
Slide 13: Our footprint in Indonesia
Our footprint in Indonesia For personal use only • In-country manufacturing capability since 1973 • Eight manufacturing facilities: – BlueScope Lysaght facilities in Cibitung (near Jakarta), Surabaya (Java), Medan (Sumatera), Palembang (Sumatera), Semarang (Java), Pekanbaru (Sumatera) and Makassar (
Slide 14: Indonesia facilities and projects
Indonesia facilities and projects For personal use only Facilities Projects Traditional architecture with style and strength – Sumatera Metal coating & painting facility, Cilegon Emergency relief housing, Aceh 14
Slide 15: Our footprint in Malaysia, Brunei & Singapore
Our footprint in Malaysia, Brunei & Singapore For personal use only • A key player in the region’s local building and construction industry - premium niche building solutions • In-country manufacturing capability since 1965 (our first building solutions facility in Asia located in Singapore) • Six m
Slide 16: Malaysia, Brunei and Singapore facilities and projects
Malaysia, Brunei and Singapore facilities and projects For personal use only Facilities Projects Proton City Admin Building Metal coating & painting facility, Kapar Coca-Cola Bottling Plant 16
Slide 17: Our footprint in Vietnam
Our footprint in Vietnam For personal use only • Modernising an emerging market with BlueScope Steel building solutions • In-country manufacturing capability since 1993 (first rollforming facility located near Ho Chi Minh City) • Three manufacturing facilities: – BlueScope Lysaght facilities in the
Slide 18: Vietnam facilities and projects
Vietnam facilities and projects For personal use only Facilities Projects Bridgestone Factory Honda Factory Metal coating & painting facility, Phu My 18
Slide 19: Our footprint in North America
Our footprint in North America Alaska U.S. West Coast For personal use only • Business consists of Steelscape (metal coating & painting) and ASC Profiles (building products) which has merged WA Kalama Rocky Mountains since 2012 OR MT ND MN • Employs 600 staff ID WY SD • Steelscape has 3 manufacturin
Slide 20: North America facilities and projects
North America facilities and projects For personal use only Facilities Projects Metal coating & painting facility, Kalama, WA San Francisco International Airport Metal coating & painting facility, Rancho Cucamonga, CA Hard Rock Hotel 20
Slide 21: Organisation transformation
Organisation transformation For personal use only • In 2009 business was restructured resulting in reduced cost base and market focused organisation • Regional organisation de-layered and a matrix structure implemented with a country model focused on “make and sell” • Country leadership localisation
Slide 22: Leadership team
Leadership team For personal use only Chief Executive SANJAY DAYAL Vice President President Sourcing & Supply Chain Indonesia MATHEW POND CHEONG KU WEI Chief Financial Officer MATTHEW COGHLAN Vice President President Business Development Malaysia JUNICHI MURAKAMI PONGSAK PADUNGKARN Vice President St
Slide 23: Leader in building market brands (coated & painted products)
Leader in building market brands (coated & painted products) For personal use only Painted steel Coated steel Product specification & market Industrial & commercial projects Product with coating mass AZ200 / AZ150 SPECTRASCAPE® Product with coating mass AZ100 Residential & small to medium enterprise
Slide 24: Leader in building market brands (roll-formed products)
Leader in building market brands (roll-formed products) For personal use only LYSAGHT KLIP-LOK® LYSAGHT® SMARTRUSS™ SKYLINE ROOFING® LYSAGHT BONDEK® LYSAGHT® Purlins DESIGN SPAN®hp 24
Slide 25: Channels to market – ASEAN
Channels to market – ASEAN For personal use only Market / end user Market / end user segments sub-segments Customer channels I&C Projects • Local large I&C • Japanese foreign direct investment (FDI) PEB Government • Transport, energy Roofing contractors • School, hospital Main contractors Residentia
Slide 26: Channels to market – North America
Channels to market – North America For personal use only Market / end user Market / end user segments sub-segments Customer channels Metal building EBS • Light industrial contractors I&C Projects • Big box stores • Stadiums Sub/general contractors • Warehouses Steel fabricators & • Office buildings
Slide 27: Supply of steel feed
Supply of steel feed For personal use only • A significant focus of the business is to ensure the operations are supplied with secure and competitively priced steel feed • Hot rolled coil (760ktpa) – North America and Thailand – Predominantly supplied by BSL and NSSMC with additional requirements fr
Slide 28: NBCP: Macroeconomic & Market Environment
For personal use only NBCP: MACROECONOMIC & MARKET ENVIRONMENT
Slide 29: GDP growth outlook in most economies is strong
GDP growth outlook in most economies is strong For personal use only Projected real growth in gross domestic product Annual % change, calendar years 8% • ASEAN GDP growth between 4-7% p.a. across 7% key markets 6% – Fixed investments (Foreign & Government) 5% and private consumption are key growth t
Slide 30: Non-residential construction growth outlook is also strong
Non-residential construction growth outlook in most economies is also strong … For personal use only Projected real growth in non-residential construction work done Annual % change, calendar years 21% • IHS Global Insight 18% forecast strong real growth in ASEAN of 15% between 3-9% p.a. 12% – Indone
Slide 31: Residential construction growth outlook is also strong
… so too is the residential construction growth outlook in most economies For personal use only Projected real growth in residential construction work done Annual % change, calendar years 20% • US residential market projected to improve 15% across all dimensions (from a low base) 10% driven by pent
Slide 32: 3.3mtpa addressable demand expected to grow to 4.0mtpa
3.3mtpa addressable demand expected to grow to 4.0mtpa over next three years For personal use only FY2013 to FY2016 coated steel demand in construction (ktpa) CAGR pa 7% 7% 6% 4% 6% 1,500 270 660 1,000 180 140 1,190 70 3,310 500 800 760 560 0 Indonesia Thailand Malaysia Vietnam ASEAN FY2013 Expected
Slide 33: The Asian market
The Asian market For personal use only • Steady GDP growth • Economies moving from export oriented to domestic demand based • Large middle class with growing urban wealth and brand consciousness • Continued urbanisation resulting in accelerated growth in residential and retail demand • Continued for
Slide 34: NBCP: Business Direction
For personal use only NBCP: BUSINESS DIRECTION
Slide 35: Strategy
Strategy For personal use only – Grow leading position in metal coated and painted steel building products in high growth and high value markets across the Asia- Our Pacific region with a portfolio of highly competitive, locally strategic manufactured premium sustainable products tailored to match g
Slide 36: Expand leadership in projects market
Expand leadership in projects market For personal use only • To provide improved products and service offer to Strategic objective project customers and increase Tier 1 product pull- through • Lysaght expansion • New finishes • Improved service offer Initiatives • Closer partnership with BlueScope’s
Slide 37: Develop retail brands and channels
Develop retail brands and channels For personal use only • Develop retail brands and channels to increase Strategic objective share of fast-growing residential and SME segment • Regional brand campaign • In-market roll-forming franchise development Initiatives • Store-in-stores • Partnership with De
Slide 38: Innovate to differentiate
Innovate to differentiate For personal use only • Promote differentiated premium products to improve Strategic objective premiums, share, overall leadership and defend against commoditisation • Framing • Decking Initiatives • Specialty finishes • SuperDyma® • Solar framing 38
Slide 39: Enter new markets
Enter new markets For personal use only • Enter new markets, segments and geographies to Strategic objective maximise opportunity and maintain high growth trajectory • Develop new markets: Philippines, Myanmar, Trading in Indochina Initiatives • Enter home appliance market: VIEWKOTE®, SuperDyma® 39
Slide 40: ASEAN coating capacity & utilisation
ASEAN coating capacity & utilisation For personal use only Utilisation 81% 76% 93% 86% • Residual capacity for growth 350 335 310 300 • Further capacity for earnings growth 250 through mix improvements 250 202 Volume (KT) 200 175 • Planning longer term capacity needs – 150 132 135 potential to add f
Slide 41: Progress on opportunities from working with NSSMC
Progress on opportunities from working with NSSMC For personal use only New products and solutions for customers utilising NSSMC’s VIEWKOTE® trial successful comprehensive solution technologies – Home appliance segment applications of SuperDyma® and SuperDyma® feasibility review Initial VIEWKO
Slide 42: On track to deliver targeted partnership benefits with NSSMC of US$30-75M
On track to deliver the targeted partnership benefits with NSSMC of US$30-75M Composition of target-case indicative earnings For personal use only Indicative incremental EBITDA to JV (100%, US$M) uplift to JV by identified opportunity Above existing growth profile 75 Availability of stable feed coil
Slide 43: Tata BlueScope Steel Joint Venture
For personal use only TATA BLUESCOPE STEEL JOINT VENTURE
Slide 44: India – business overview
India – business overview For personal use only • Comprises three business units • Coated Steel – Capacity to produce up to 250kt of Zincalume® and 150kt of pre-painted steel – Commissioned in late CY2011 and is still ramping up towards capacity – Sales of 144kt in FY2013 representing approximately
Slide 45: Five manufacturing facilities across India and Sri Lanka
Five manufacturing facilities across India and Sri Lanka For personal use only 45
Slide 46: Indian facilities and projects
Indian facilities and projects For personal use only Facilities Projects Coating and Painting Facility – Jamshedpur Building Solutions project for Hindustan Unilever Building Products: Delhi Metro railway station 46
Slide 47: Building products – Durashine brand
Building products – Durashine brand For personal use only Industrial Commercial Educational institute, motels , resorts Residential Railway platform sheds – south, east & west India Metro platform – Delhi Light steel buildings Small warehouse, site office, canteen building 47
Slide 48: Building products – LYSAGHT brand
Building products – LYSAGHT brand For personal use only Power DVC / BHEL Installation Stadiums New Delhi – Commonwealth Games OUR FOOT Airports Hanger, terminal building PRINT IN VARIOUS SEGMENTS Railways / Metro Railway platform sheds – south, east & west India; metro platform – Delhi LYSAGHT® Prod
Slide 49: Macroeconomic conditions have weakened in the short term
Macroeconomic conditions have weakened in the short term For personal use only Real GDP growth (% y-o-y) Industrial production growth (% y-o-y) 14 20 12 15 10 8 10 6 5 4 0 2 Jan-08 -5 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 0 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 -10 Source: IMA Asia Source: IMA Asia
Slide 50: Performance of, and strategy for, India operations
Performance of, and strategy for, India operations For personal use only Sales volume (kt; 100% of JV) EBITDA ($M; 100% of JV) 180 113 9 81 -2 -9 2011 2012 2013 2011 2012 2013 Revenue ($M; 100% of JV) • The trajectory of the business is positive with the coating & painting line having been commissio
Slide 51: Business improvement – main operational initiatives
Business improvement – main operational initiatives For personal use only • Increase domestic and export sales (ramp-up Improve capacity phase) utilisation • Improve mix • Increase internal pull-through • Specification activity to generate differentiation Secure brand • Quality improvement different
Slide 52: Financial Drivers & Performance
For personal use only FINANCIAL DRIVERS & PERFORMANCE
Slide 53: Core business drivers
Core business drivers For personal use only • The main financial performance drivers of the segment are sales volumes and margin made on end- product over input feed. The latter is influenced by the level of local and import competition in each nation in which we operate • Volume and top-line growth
Slide 54: Overall volume grew at 10% CAGR from FY2010 to FY2013
Overall volume grew at 10% CAGR from FY2010 to FY2013 For personal use only Segment sales volume (kt) +10% 1,344 1,257 1,121 353 1,022 325 275 Thailand 216 219 157 208 Indonesia 142 152 169 159 Malaysia 168 124 105 111 Vietnam 104 431 436 Nth America 400 424 India 90 40 56 (39) 31 (49) (33) (30) Oth
Slide 55: EBIT declined from FY2010 to FY2012; growth trajectory has resumed
EBIT declined from FY2010 to FY2012 mainly due to India, Indonesia & North America. Growth trajectory has resumed For personal use only FY2011 vs FY2010: Underlying EBIT ($M) • Impact of import competition on spread in the ASEAN market 107 coupled with unfavourable FX movements Thailand 27 80 82 FY2
Slide 56: ASEAN EBIT growing
ASEAN EBIT growing For personal use only ASEAN underlying EBIT ($M) 89 89 74 Thailand 27 68 20 48 27 Indonesia 29 22 10 10 Malaysia 28 30 28 27 Vietnam 11 9 9 12 Other (6) (7) (6) (8) FY2010 FY2011 FY2012 FY2013 56
Slide 57: Growth and development initiatives in each nation
Growth and development initiatives in each nation For personal use only • Continue to build on strong customer loyalty / specification Thailand • Restructure retail channel • SuperDyma® for Home Appliance markets • Grow Project segment volume Indonesia • Grow retail brands and channel • Grow domesti
Slide 58: Overall growth vision for Building Products segment
Overall growth vision for Building Products segment For personal use only • Strong base-business growth trajectory – Positioned in mainly high-growth economies – Improving utilisation of installed assets, including new line in Indonesia – Delivering benefits from our strategic initiatives – Performa
Slide 59: Summary
For personal use only SUMMARY
Slide 60: Summary
Summary For personal use only • Leading ASEAN presence with broad footprint • Premium sustainable metal coated and painted steel products • Highly capable team, with local market knowledge • Strong base-business growth trajectory • Further growth to come from working with NSSMC 60
Slide 61: Questions
For personal use only QUESTIONS
Slide 62: Additional Information
For personal use only ADDITIONAL INFORMATION
Slide 63: Detailed segment financials
Detailed segment financials 1H10 2H10 FY10 1H11 2H11 FY11 1H12 2H12 FY12 1H13 2H13 FY13 For personal use only Total Despatches ('000 tonnes) - Thailand 92 124 216 124 151 275 156 169 325 180 173 353 - Indonesia 70 72 142 67 89 157 98 110 208 100 119 219 - Malaysia 79 89 168 83 86 169 79 80 159 74 78
Slide 64: Investor Briefing – Building Products ASEAN, North America & India segment
For personal use only Investor Briefing – Building Products ASEAN, North America & India segment Sanjay Dayal – Chief Executive, Building Products Matthew Coghlan – CFO, NS BlueScope Coated Products 29 October 2013 BlueScope Steel Limited. ASX Code: BSL