Continuing to Reward Shareholders and Deliver on our Strategy

Transcription

1 Continuing to Reward Shareholders and Deliver on our Strategy Kirby Adams, Managing Director and Chief Executive Officer 27 September, 2005 ASX Code: BSL

2 A Very Different Kind of Steel Company Page 2

3 Safety Taking Care as we grow - Our goal remains Zero Harm Lost Time Injury Frequency Rate Medically Treated Injury Frequency Rate Injuries resulting in lost time per million man-hours worked IISI (2003) 9.4 Minerals Council of Australia (2004) FY * Includes contractors from 1996 Includes Butler performance from July 2003 Excludes Butler performance Medically treated injuries per million man-hours worked FY * Includes contractors from 2004 Includes Butler performance from July 2003 Excludes Butler performance 17,500 Employees, 84 manufacturing sites, 17 countries Page 3

4 Strong Strong Board Board & Management Team Team Profitable Profitable Through Through the the Cycle Cycle Dynamic Dynamic Global Global Steel Steel Market Market Value Value Added Added Branded Branded Products Products Growth Growth Opportunities in in Asia Asia A VERY DIFFERENT KIND OF STEEL COMPANY Strong Strong Operating Operating Track Track Record Record Strong Strong and and Flexible Flexible Capital Capital Structure Structure Consistently Strong Strong Cash Cash Flows Flows Geographic Geographic and and Product Product Diversity Diversity Low Low Cost Cost Producer Producer Page 4

5 BlueScope Steel A global leader in adding value to hot rolled coil Increasing to 54% with recently announced CAPEX VALUE-ADDING CAPABILITY (Metal Coating Capacity as % of HRC Capacity) A similarly strong downstream position in Painting #4 worldwide Rollforming #1 worldwide Pre Engineered Buildings #1 worldwide BlueScope TKS AK Steel Kobe Steel Stelco Salzgitter Rautaruukki Arcelor Dofasco CSN Duferco Nisshin USS Sumitomo Handan Riva Tata Voestalpine ISG JFE USIMINAS Nippon SSAB Mittal Nucor NOTE: Compiled from the largest 60 steelmakers (excluding those who do not have flat steel metal coating capacity) Corus Panzhihua Techint POSCO Baosteel Severstal Magnitogorsk Novolipetsk NISCO Benxi Erdimir China Steel SAIL Ilyich Anshan Wuhan Source: IISI World Steel in Figures 2005, CRU Steel Sheet Quarterly April 2005 Page 5

6 Value-added branded products Page 6

7 BlueScope Steel s unique global footprint USA China Taiwan Thailand Brunei Vietnam Malaysia Singapore Mexico India (under development) Sri Lanka Indonesia Vanuatu Fiji New Caledonia Australia New Zealand Page 7

8 Capital management Rewarding shareholders as we grow Share Buybacks Public Listing to 30 June Purchased and cancelled 102m shares * on market 76m shares * off market 26m shares Dividends - All Fully Franked Total return to shareholders since BSL s public listing (July 2002): Share buybacks Dividends paid Final & special dividend (to be paid Oct 05) 62 $2.09 share or 77% payout ratio $ 612m $ 656m $ 312m $1,580m Cents Per Share FY2003-1H FY2003-2H FY2004-1H FY2004-2H FY2005-1H FY2005-2H Special Ordinary: - Interim - Final Page 8

9 Group headlines FY2005 diversified portfolio delivers another outstanding result Revenue A$7,982 million Up 38% to record External despatches 7.2 million metric tonnes Up 4% to record EBITDA A$1,694 million Up 53% to record EBIT A$1,388 million Up 70% to record NPAT A$1,007 million Up 72% to record EPS Up 77% to record After tax Return on Invested Capital 25.4% Up 37% to record Return on Equity 30.0% Up 53% to record Net operating Cashflow A$1,225 million 50/50 to shareholders / CAPEX Final Ordinary Dividend 24 per share Up 33% (fully franked) Special dividend (fully franked) 20 per share Doubled Gearing (net debt) 18.4% - vs. 12.9% (30 June 2004) - net debt up A$318 million since June 04 Page 9

10 EBIT A$ Millions Steelmaking drives strong regional performance in FY2005 Based on source of production Coated & Building Products Asia FY04 FY05 Port Kembla Coated & Building Products Australia North Star BlueScope (50%) Coated and Building Products North America NZS & Pacific Steel Products Asia Americas New Zealand Australia Sales Revenue +50% +180% +28% +18% ($m): 699 / 1, / 1, / 756 4,328 / 5,126 Page 10

11 EBIT A$ Millions FY2005 EBIT strongest in upstream segments Hot Rolled Products FY FY05 North Star BlueScope Steel NZ & Pacific Steel Products Coated & Building Products Aust. Record EBIT for PKSW, NSBSS & NZS. Higher slab / HRC feed prices push Coated & Building Products Australia into EBIT loss. Butler North America improvement, but missed target. Asia result reduced by pre-operating and business development costs Coated & Building Products Asia Coated & Building Products North America FY2005 Return on Net 66% 39% (9%) 11% (8%) Assets (pre-tax) Page 11

12 Consistently strong cashflow underpins growth, dividends and value A$ millions 2002 (1) H H FY2005 Net operating cashflow before borrowing costs and income tax Net investing cashflows - Capital expenditure & Investments - Other Net cashflow before financing & tax ,225 (162) 8 (209) 44 (585) 7 (303) 35 (360) 6 (663) Net financing cashflow (467) Payment of income tax (29) (119) (185) (127) (312) Share buy-back (26) (259) (75) (252) (327) Dividends (75) (244) (212) (136) (348) Net increase in cash held 1 27 (1) (21) (22) (1) 2002 normalised. Page 12

13 Balance Sheet growing and maintaining flexibility A s A t A $ M illio n s 30 June June 2005 Assets Cash Receivables 996 1,060 Inventory 963 1,211 Other Assets Net Fixed Assets 3,289 3,629 Total Assets 5,782 6,464 L ia b ilitie s Creditors Interest Bearing Liabilities Provisions 1,267 1,263 T o ta l L ia b ilitie s 2, ,9 6 3 Net Assets 3,194 3,501 Net Debt / (Net Debt + Equity) 12.9% 18.4% (excluding off balance sheet items) Page 13

14 Our strategy unchanged and continuing to deliver China Thailand India PEB / Solutions Rollforming Water Downstream Strengthening the world s largest construction steel roll former, eg. India, China, USA. Growing the world s largest PEB manufacturer, eg. Thailand, India, China. Water solutions for a global issue. Vietnam China Vietnam China Thailand Painted Metallic Coated Cold Rolled NZ Australia NZ Australia Midstream Grow metal coated and painted capabilities, principally in the world s growth corridor Asia and Far East. Maintain focus on branded products and new product / market offers. Research and Development focus to meet future customer needs. Australia Hot Rolled Coil, Plate Upstream Cost competitive steelmaker PKSW, NZ Steel and North Star BlueScope. Maximise asset life at optimum capacity. Steelmaking, Slab Strategic conversion alliances in Asia and USA. Reassess raw materials appoach. Page 14

15 Implementing our strategy more than 20 major projects in 8 countries Bringing balance to our product portfolio FY2006 FY2007 Downstream USA - New Vistawall extrusion plant - New Buildings speciality plant Australia - Water, Lysaght, WA Service Centre Thailand - First Pre-Engineered Building (PEB) China - New Panels, residential plants, new beam facility India - New PEB and Lysaght plants China - New PEB and Lysaght plants open Midstream New Zealand - Brownfields (increased metal coating & paint capacities) Australia - Brownfields (increased metal coating and paint capacities) Vietnam - New 125kt Metal Coating Line and 50kt Paint Line Thailand - 200kt Metal Coating expansion India - Potential JV in Coating / Painting Australia - Colorbond plant opens China - 250kt Metal Coating Line and 150kt Paint Line commissions Upstream New Zealand Steel - Front end study USA - North Star BlueScope Steel new bag house - Castrip Information Systems - SAP Australia - 400kt HSM Expansion - BF No. 5 Reline Brownfields ongoing work to generate small capacity increases at all existing operations at minimal / no capital cost Page 15

16 Tennessee Butler Speciality Plant, USA July 2005 Page 16

17 Vistawall Extrusion Plant, USA November 2005 Page 17

18 West Sydney Colorbond plant site, Australia H1 CY2007 Page 18

19 BlueScope Water developing capabilities Australia and export Pioneer Water Tanks acquired FY2005 Page 19

20 New 125,000t Metallic Coating & Painting, Vietnam early CY2006 Page 20

21 Additional 200,000t Metallic Coating Capacity, Thailand August 2005 Page 21

22 BlueScope Buildings PEB for Lysaght at Cibitung, Indonesia - FY2005 Page 22

23 Asia Suzhou MCL New 250,000t Metallic Coating & Painting complex at Suzhou, China mid CY2006 Page 23

24 Butler PEB and Design Centre at Pune, India 2H CY2006 RENDERING SITE Page 24

25 Global steel industry Global steel industry dynamic and different Page 25

26 Extraordinary period in the global steel industry 250 Slab and HRC Prices (Index July 2002 = 100) USA Midwest HRC1 Latin America Export Slab2 200 Volatile Prices China growth continues FY03 FY04 FY05 0 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul JSM Benchmark Prices, Lump Iron Ore Raw material costs skyrocket Cyclical Highs LT Average Extreme Deviation Unprecedented shipping costs BDI Index May-95 May-96 May-97 May-98 May-99 May-00 May-01 May-02 May-03 May-04 May-05 Page 26

27 World crude steel production to 2004 Million Tonnes Average Annual Growth Rates 4.0% % 3.1% % Source: IISI Page 27

28 Global steel industry - dynamic and different Six Pillars of a stronger steel industry 1. Restructure / consolidate 2. Reduce price volatility 3. Address raw materials situation 4. Stand against steel subsidies 5. Spend on innovation and reward our investors 6. Become safer and reaffirm our licence to operate Current industry issues: - Excess inventory - China s capacity growth - Soaring raw materials costs - Buyer uncertainty - Energy costs Likely industry outcomes: - Inventory drawn down - Industry matching production with demand - China introducing structural reform - Further raw material investment - More stable pricing environment Page 28

29 Strong Strong Board Board & Management Team Team Profitable Profitable Through Through the the Cycle Cycle Dynamic Dynamic Global Global Steel Steel Market Market Value Value Added Added Branded Branded Products Products Growth Growth Opportunities in in Asia Asia A VERY DIFFERENT KIND OF STEEL COMPANY Strong Strong Operating Operating Track Track Record Record Strong Strong and and Flexible Flexible Capital Capital Structure Structure Consistently Strong Strong Cash Cash Flows Flows Geographic Geographic and and Product Product Diversity Diversity Low Low Cost Cost Producer Producer Page 29

30 Continuing to Reward Shareholders and Deliver on our Strategy Kirby Adams, Managing Director and Chief Executive Officer 27 September, 2005 ASX Code: BSL