building products segment briefing presentation...roofing / agricultural contractors metal building...

Investor Briefing – Building Products ASEAN,North America & India segment

29 October 2013

Sanjay Dayal – Chief Executive, Building ProductsMatthew Coghlan – CFO, NS BlueScope Coated Products

BlueScope Steel Limited. ASX Code: BSL

2

Important NoticeTHIS PRESENTATION IS NOT AND DOES NOT FORM PART OF ANY OFFER, INVITATION ORRECOMMENDATION IN RESPECT OF SECURITIES. ANY DECISION TO BUY OR SELL BLUESCOPESTEEL LIMITED SECURITIES OR OTHER PRODUCTS SHOULD BE MADE ONLY AFTER SEEKINGAPPROPRIATE FINANCIAL ADVICE. RELIANCE SHOULD NOT BE PLACED ON INFORMATION OROPINIONS CONTAINED IN THIS PRESENTATION AND, SUBJECT ONLY TO ANY LEGAL OBLIGATION TODO SO, BLUESCOPE STEEL DOES NOT ACCEPT ANY OBLIGATION TO CORRECT OR UPDATE THEM.THIS PRESENTATION DOES NOT TAKE INTO CONSIDERATION THE INVESTMENT OBJECTIVES,FINANCIAL SITUATION OR PARTICULAR NEEDS OF ANY PARTICULAR INVESTOR.

THIS PRESENTATION CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS, WHICH CAN BEIDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS “MAY”, “WILL”, “SHOULD”,“EXPECT”, “INTEND”, “ANTICIPATE”, “ESTIMATE”, “CONTINUE”, “ASSUME” OR “FORECAST” OR THENEGATIVE THEREOF OR COMPARABLE TERMINOLOGY. THESE FORWARD-LOOKING STATEMENTSINVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAYCAUSE OUR ACTUAL RESULTS, PERFORMANCE AND ACHIEVEMENTS, OR INDUSTRY RESULTS, TOBE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCES OR ACHIEVEMENTS,OR INDUSTRY RESULTS, EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS.

TO THE FULLEST EXTENT PERMITTED BY LAW, BLUESCOPE STEEL AND ITS AFFILIATES AND THEIRRESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS, ACCEPT NO RESPONSIBILITY FORANY INFORMATION PROVIDED IN THIS PRESENTATION, INCLUDING ANY FORWARD LOOKINGINFORMATION, AND DISCLAIM ANY LIABILITY WHATSOEVER (INCLUDING FOR NEGLIGENCE) FORANY LOSS HOWSOEVER ARISING FROM ANY USE OF THIS PRESENTATION OR RELIANCE ONANYTHING CONTAINED IN OR OMITTED FROM IT OR OTHERWISE ARISING IN CONNECTION WITHTHIS.

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Introduction

NS BlueScope Coated Products Overview

NBCP: Macroeconomic & market environment

NBCP: Business direction

Tata BlueScope Steel joint venture

Financial drivers & performance

Summary

Agenda

INTRODUCTION

5

Safety – Building Products continues to have world class performance and is striving for zero harm

Note: Data prior to FY2012 includes Building Solutions ASEAN operations and China but excludes North America operationsData from FY2012 includes North America operations and excludes Building Solutions ASEAN operations and China

Lost time injury frequency rate (FY2008-2013) Medically treated injury frequency rate (FY2008-2013)

Lost

time i

njurie

s per

milli

on m

an-h

ours

worke

d

0.110.39

0.000.45

0.000.00

FY13FY12FY11FY10FY09FY08

Medic

ally t

reate

d inju

ries p

er m

illion

man

-hou

rs wo

rked

1.32

2.34

0.61

1.65

0.591.05

FY10FY09 FY11 FY12FY08 FY13

BlueScope group average FY08-FY13: 0.82

BlueScope group average FY08-FY13: 5.83

6

• 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, Malaysia, Indonesia, Vietnam, India and North America

– LYSAGHT® roll-forming facilities in Indonesia, Malaysia, Thailand, Vietnam, Singapore and Brunei primarily service the building and construction industries across ASEAN

– North American business offering steel deck, roofing and siding products to the West Coast building and construction industry

• Premium sustainable metal coated and painted steel building products used in residential and non-residential building and construction

– Products are specifically designed and locally manufactured for individual geographical markets

• Focused on expanding position as technology leader in high growth and high value markets across the Asia-Pacific region

Building Products ASEAN, North America and India –segment overview

7

Thailand(80%) 2

• Metallic coating & painting

• Lysaght• Ranbuild

Indonesia(100%)



Malaysia(100%) 3



Vietnam(100%)



• Kalama (WA)• Rancho Cucamonga

(CA)• Fairfield, (AL) 5

• ASC Building Products

• AEP Span• ASC Steel Deck

Nth America (100%)

NS BlueScope Coated Products (NBCP)

Notes: (1) Nippon Steel & Sumitomo Metal Corporation (NSSMC)(2) 20% partner in Thailand is Loxley Public Company(3) Includes Singapore and Brunei. BlueScope Steel owns 100% of the steel coating business and 49% to 60% of rollforming (Lysaght) businesses in Malaysia and Brunei(4) TBS joint venture encompasses SAARC region (India, Sri Lanka, Bangladesh, Pakistan etc)(5) Under contract for sale

BlueScope NSSMC 1

50%

Segment business structure

50%

Tata BlueScope Steel (TBS)

BlueScope Tata Steel50% 50%

India 4

(100%)


• Lysaght• Engineered building

solutions (PEBs)

A BlueScope controlled, and therefore consolidated, joint venture

A jointly controlled joint venture, and therefore equity accounted

NS BLUESCOPE COATED PRODUCTS OVERVIEW

9

• 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 in-market operations across Indonesia, Thailand, Malaysia and Vietnam

• Manufacturing operations supported by diverse channels to market and product offerings tailored to suit local market demand

• Well-known and respected brands, and value-added premium quality products

Long established position in Asia

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• 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 manufacturing

• NSSMC has substantial size and global reach, including across the ASEAN markets – Sophisticated manufacturing technologies– Competitive product line-up– Trusted customer relationships– Brand and reputation as a manufacturer of high value added steel products

• Potential to access strong NSSMC technology development capabilities and substantial R&D base

• Access to a broader range of customers in new product areas– Potential for richer product mix, given access to the appliance market– JV capable of accessing product development work of both parent companies

• Access to high quality and stable substrate supply following BlueScope’s decision to significantly exit export markets

Why have we partnered with NSSMC?

11

Our footprint in Thailand

• 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 manufacturing facilities:– BlueScope Lysaght facilities in Rangsit (near Bangkok) and Khon

Kaen (northeast Thailand)– BlueScope Steel Thailand cold mill (360ktpa), metallic coating

(335ktpa) and painting (75ktpa) facilities at Map Ta Phut (150km south of Bangkok)

BlueScope LysaghtMetallic coating and painting facility

12

Thailand facilities and projects

Facilities Projects

Nissan Showroom

AsahiKasei Factory

Metal coating & painting facility, Map Ta Phut

13

Our footprint in Indonesia

• 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 (Sulawesi)

– BlueScope Steel Indonesia metallic coating (273ktpa) and painting (160ktpa) facilities in Cilegon (near Jakarta)

• Well-established and strong building and construction customer base across the Indonesian archipelago


14

Indonesia facilities and projects

Facilities Projects

Emergency relief housing, Aceh

Traditional architecture with style and strength – Sumatera

Metal coating & painting facility, Cilegon

15

Our footprint in Malaysia, Brunei & Singapore


• 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 manufacturing facilities:– BlueScope Lysaght facilities in Shah Alam

(Malaysia), Sabah & Sarawak (Borneo Malaysia), Singapore and Brunei

– BlueScope Steel Malaysia metallic coating (175ktpa) and painting (75ktpa) facilities in Kapar (near Kuala Lumpur)

16

Malaysia, Brunei and Singapore facilities and projects

Facilities Projects

Metal coating & painting facility, Kapar

Proton City Admin Building

Coca-Cola Bottling Plant

17

Our footprint in Vietnam


• 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 south at Dong Nai

province (near Ho Chi Minh City) and in the north at Ha Tay (near Hanoi)

– BlueScope Steel Vietnam metallic coating (150ktpa) and painting (50ktpa) facilities at Phu My in Ba Ria Vung Tau province (south of Ho Chi Minh City)

18

Vietnam facilities and projects

Facilities Projects

Bridgestone Factory

Honda Factory

Metal coating & painting facility, Phu My

19

Our footprint in North America• Business consists of Steelscape (metal coating & painting)

and ASC Profiles (building products) which has merged since 2012

• Employs 600 staff• Steelscape has 3 manufacturing sites:

– Kalama, WA (1 MCL and 1 CPL)– Rancho Cucamonga, CA (1 MCL and 1 CPL)– Fairfield, AL (1 CPL) – under contract for sale

• ASC (AEP Span, ASC Building Products and ASC Steel Deck) has 10 manufacturing facilities spread out across 8 sites on the west coast

NM

TX

OK

NE

SD

NDMT

WY

COUT

ID

AZ

NV

WA

CA

OR

IA

MN

KS

Steelscape sites

ASC Profiles sites

Alaska

Fairfield, AL

U.S. West Coast

Rancho

KalamaRocky Mountains

20

North America facilities and projects

Facilities Projects

San Francisco International Airport

Hard Rock Hotel

Metal coating & painting facility, Kalama, WA

Metal coating & painting facility, Rancho Cucamonga, CA

21

Organisation transformation

• 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 given a priority

• Major focus on developing market and sourcing functions

• Focus on regional leverage

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Leadership team

Chief Executive

SANJAY DAYALPresident

Indonesia

CHEONG KU WEI

President

Malaysia

PONGSAK PADUNGKARN

President

Thailand

SOMKIAT PINTATHAM

President, Building Products

North America

JOHN CROSS

Chief Financial Officer

MATTHEW COGHLAN

Vice President

Strategic Marketing

ATUL GOGNA

Vice President

Human Resources

TONY WRIGHT

Vice President

Sourcing & Supply Chain

MATHEW POND

Corporate

General Counsel

AMBER WILLIAMS

President

Vietnam

NHUT VO

Vice President

Manufacturing & Technology

HIROSHI KANAI

Vice President

Business Development

JUNICHI MURAKAMI

• Deep market knowledge and understanding of local environment and success factors

• Matrix structure has delivered heavyweight strategy to develop greater sales and brand presence

23

CitraPerisai

Painted steel Coated steel

JingJoeLek™JingJoeLek™

SPECTRASCAPE®

Product specification & market

Product with coating mass AZ200 / AZ150

Product with coating massAZ70 / AZ90

Product coating massAZ50

Product with coating massAZ100

Industrial & commercial projects

Residential & small to medium enterprises

Leader in building market brands (coated & painted products)

Dazzle®

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LYSAGHT BONDEK® LYSAGHT® Purlins

LYSAGHT KLIP-LOK® LYSAGHT® SMARTRUSS™

Leader in building market brands (roll-formed products)

SKYLINE ROOFING®

DESIGN SPAN®hp

25

Channels to market – ASEAN

Market / end user segments Customer channels

I&C Projects

Government

Residential projects

Residential retail

SME

PEB

Roofing contractors

Main contractors

Distributors

Hardware retailers

Market / end user sub-segments

• Local large I&C• Japanese foreign direct

investment (FDI)

• Transport, energy• School, hospital

• Villa• Low-rise apartment

• Shop-house• Detached house• Bungalow

• Agriculture• Food processing• Fabrication

26

Channels to market – North AmericaMarket / end user

segments Customer channels

EBS

I&C Projects

Residential / agricultural

SME

Sub/general contractorsSteel fabricators &

erectorsDesigners

Market / end user sub-segments

• Light industrial

• Big box stores• Stadiums • Warehouses• Office buildings• Hospitals• Low, mid, high-rise

• Specialty roofing• Rural residential• Farming

• Commercial retail• Institutional buildings

Metal building contractors

Solar • Schools• Government buildings

Retail / lumberyardsRoofing distributorsRoofing / agricultural

contractors

Metal building / general contractors

Metal building / arch sheet metal contractorsSpecialty design build

fabricators

27

Supply of steel feed

• 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 from other local and import suppliers

• Cold rolled full hard (510ktpa)– Indonesia, Vietnam and Malaysia– Predominantly supplied by external local and import

suppliers

NBCP: MACROECONOMIC & MARKET ENVIRONMENT

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0%

1%

2%

3%

4%

5%

6%

7%

8%

2011 2012 2013 2014 2015 2016 2017

U.S.VietnamMalaysiaIndonesiaThailand

Annual % change, calendar years

Source: IMA Asia, IHS Global Insight

• ASEAN GDP growth between 4-7% p.a. across key markets– Fixed investments

(Foreign & Government) and private consumption are key growth themes

• US economy is back on the path to moderate growth and is building momentum 2-3% p.a.

GDP growth outlook in most economies is strong

Projected real growth in gross domestic product

30

2011 2012 2013 2014 2015 2016

-6%

6%

-3%

3%

9%

15%

21%

12%

18%

Source: IHS Global Insight

• IHS Global Insight forecast strong real growth in ASEAN of between 3-9% p.a. – Indonesia will especially

benefit from better access to capital

• US fiscal spend has become more restrictive


Non-residential construction growth outlook in most economies is also strong …

Annual % change, calendar yearsProjected real growth in non-residential construction work done

31

2011 2012 2013 2014 2015 2016

20%

15%

10%

5%

-5%

-10%

• US residential market projected to improve across all dimensions (from a low base) driven by pent up demand and economic recovery

• IHS Global Insight forecast strong real growth in ASEAN of between 3-7% p.a.

… so too is the residential construction growth outlook in most economies


Annual % change, calendar yearsProjected real growth in residential construction work done

Source: IHS Global Insight

32

140180

270

0

500

1,000

1,500

70

Vietnam

760800

MalaysiaThailand

560

Indonesia

1,190

Expected growth to FY2016FY2013

CAGR pa 6%4%6%7%7%

660

ASEAN

3,310

3.3mtpa addressable demand expected to grow to 4.0mtpa over next three years

FY2013 to FY2016 coated steel demand in construction (ktpa)

Source: IPSOS Research, Internal estimates

33

The Asian market

• 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 foreign direct investment, noting Japanese FDI accounts for a third and increasing

• Currency stability an issue, but improving

NBCP:BUSINESS DIRECTION

35

Strategy

Our strategic

goals:

Key strategic areas of focus:

– Grow leading position in metal coated and painted steel building products in high growth and high value markets across the Asia-Pacific region with a portfolio of highly competitive, locally manufactured premium sustainable products tailored to match market demand across residential and non residential segments

– Enter and develop leading position in home appliances steel market in ASEAN

Expand leadership in

projects market

Develop retail brands

and channels

Innovate to differentiate

Enter new markets

36

Expand leadership in projects market

• To provide improved products and service offer to project customers and increase Tier 1 product pull-through

Strategic objective

• Lysaght expansion• New finishes• Improved service offer• Closer partnership with BlueScope’s Global

Building Solutions segment• Promote sales to Japanese contractors• Improve regional loyalty programs

Initiatives

37

Develop retail brands and channels

• Develop retail brands and channels to increase share of fast-growing residential and SME segmentStrategic objective

• Regional brand campaign• In-market roll-forming franchise development• Store-in-stores• Partnership with Developer Associations• In-line painted products

Initiatives

38

Innovate to differentiate

• Promote differentiated premium products to improve premiums, share, overall leadership and defend against commoditisation

Strategic objective

• Framing• Decking• Specialty finishes • SuperDyma®• Solar framing

Initiatives

39

Enter new markets

• Enter new markets, segments and geographies to maximise opportunity and maintain high growth trajectory

Strategic objective

• Develop new markets: Philippines, Myanmar, Trading in Indochina

• Enter home appliance market: VIEWKOTE®, SuperDyma®

Initiatives

40

116

310

132

202

135

335

175

250

0

50

100

150

200

250

300

350

Volum

e (KT

)

MalaysiaIndonesia VietnamThailand

Notes:• Capacity is calculated based on current production mix and taking into consideration a reduction of unscheduled downtime• Production volume varies from disclosed despatch volumes through inventory movements and external sourcing of a small

volume of product that BlueScope does not manufacture

Capacity Total Production FY2013

81%Utilisation 76% 93% 86%

ASEAN coating capacity & utilisation

• Residual capacity for growth

• Further capacity for earnings growth through mix improvements

• Planning longer term capacity needs –potential to add fit-for-market painting and coating line in 3-4 year horizon

41

Progress on opportunities from working with NSSMC

Initialopportunities

New products and solutions for customers utilising NSSMC’s comprehensive solution technologies

– Home appliance segment applications of SuperDyma® and VIEWKOTE® will be priorities

– SuperDyma® applications in Building & Construction Stable procurement of coil feed substrates and enhancing consistency

of quality and competitiveness of JV products by using substrates that are manufactured under NSSMC’s integrated quality control system

Further opportunities

Expanding reach of existing JV business & products to existing Japanese FDI participants in ASEAN through NSSMC linkages and network. Opportunity will grow as Japanese manufacturing continues to migrate to ASEAN

Pursuing growth in other countries in the ASEAN region Sharing production support resources in ASEAN with NSSMC’s existing

presence, and achieving best-of-breed productivity and performance Accelerate market entry of next generation COLORBOND® and

ZINCALUME® into Asia Development of new demand for non-automobile applications such as

agriculture, energy-related and electric appliance applications (JV excludes automotive segment)

VIEWKOTE® trial successful

SuperDyma® feasibility reviewin-train

Supply to Thailand and Steelscape

Incremental sales to Japanese contractors in Thailand

Rep. office in Myanmar Technical support provided for range

of capital projects

~ In process

~ In process

42

On track to deliver the targeted partnership benefits with NSSMC of US$30-75M

75

30

FY2017

Indicative incremental earnings range

Base

Target

Note: assumes preliminary business plan is proved-up and implemented, with all expenditure approvalsSource: BSL estimates

Incremental US$25M capital investment expected predominantly in CY2014

Indicative incremental EBITDA to JV (100%, US$M)Above existing growth profile

50%

30%

5%10%

5%

Composition of target-case indicative earnings uplift to JV by identified opportunity

Bare steel to home appliance market

Prepainted steel to home appliance applications

Building & construction steel applications

Introduction of new products

Availability of stable feed coil supply from NSC

TATA BLUESCOPE STEEL JOINT VENTURE

44

India – business overview

• 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 58% of name plate capacity in first full fiscal year of operations

• Building Products– Rollforming business – Three facilities in India and Sri Lanka– Sells through two brands, differentiated by channel

• Durashine – a retail channel comprising the largest portion of the business• Lysaght – for larger project based work

– Sales of 89kt which represents approximately 62% of the Coated Steel volume in FY2013

• Building Solutions– Engineered building solutions business – One manufacturing facility in Pune in the west of India– Operates under the Butler and Ecobuild brands and links in with the broader BlueScope Global Building Solutions

business

45

Five manufacturing facilities across India and Sri Lanka

46

Indian facilities and projects

Facilities Projects

Coating and Painting Facility – Jamshedpur Building Solutions project for Hindustan Unilever

Building Products: Delhi Metro railway station

47

ResidentialRailway platform sheds – south, east & west IndiaMetro platform – Delhi

CommercialEducational institute, motels , resorts

Industrial

Light steel buildings Small warehouse, site office, canteen building

Building products – Durashine brand

48 48

Railways / MetroRailway platform sheds – south, east & west India; metro platform – Delhi

AirportsHanger, terminal building

StadiumsNew Delhi – Commonwealth Games

Power DVC / BHEL

IndustrialWarehouse, processing, automobile, steel plant, electronics

OUR FOOTPRINT IN VARIOUS

SEGMENTS

LYSA

GH

T®Pr

oduc

t s

Inst

alla

tion

Building products – LYSAGHT brand

49

Macroeconomic conditions have weakened in the short term

Real GDP growth (% y-o-y) Industrial production growth (% y-o-y)

Exchange rates (RS)Foreign direct investment flows to India (US$Bn)

-10

-5

0

5

10

15

20

Jan-13Jan-12Jan-11Jan-10Jan-09Jan-08

Source: IMA Asia

02468

101214

Jan-12Jan-10Jan-08Jan-06Jan-04Jan-02Source: IMA Asia

30405060

708090

Jan-13Jan-12Jan-11Jan-10Jan-09Jan-08Source: IMA Asia

to Euroto US$

0

10

20

30

40

50

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Source: UN data

50

Performance of, and strategy for, India operations

EBITDA ($M; 100% of JV) Sales volume (kt; 100% of JV)

Revenue ($M; 100% of JV) • The trajectory of the business is positive with the coating & painting line having been commissioned in FY2012

• Coating business transitioning from ramp-up to a steadier state operating business

• Downstream businesses performing well

131 162214

2011 2012 2013

-2 -9

9

2011 2012 2013

Coating line commenced operations mid FY 2012

81113

180

2011 2012 2013

51

Business improvement – main operational initiatives

• Increase domestic and export sales (ramp-up phase)

• Improve mix• Increase internal pull-through

Improve capacity utilisation

• Specification activity to generate differentiation• Quality improvement• Lead-time reduction and vendor managed inventory

Secure brand differentiation

• Yield improvement• Conversion cost reduction through improved

utilisation• Procurement cost reduction

Cost efficiency

FINANCIAL DRIVERS & PERFORMANCE

53

• 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 driven by: – Expansion of downstream manufacturing facilities in domestic markets– Best-in-class technology (including in-line painting), quality, product range and R&D capability– Increased capacity utilisation in optimised network of facilities through seeding and load balancing– Increase in available capacity through thicker gauge-mix and overall equipment effectiveness (OEE) improvements– People, processes and systems geared for growth

• EBITDA margin driven by:– Product-mix improvement towards higher value-added Tier 1 and Painted products– Greater pull-through of Tier 1 products through expansion of Lysaght, Ranbuild and development of aligned channel

partners– Cost competitiveness through growing scale, strategic sourcing, in-line painting and yield improvements

• Risks:– Import and local competition– Increased installed capacity in ASEAN– Political and regulatory risks– Foreign exchange and macroeconomic risks

Core business drivers

54

Overall volume grew at 10% CAGR from FY2010 to FY2013

104 105 111 124

142 157 208 219

90 Other

IndiaNth America

VietnamMalaysia

Indonesia

Thailand

FY2013

1,344

(30)

436

152

353

FY2012

1,257+10%

56

431

159

325

FY2011

1,121

(49) 40

424

169

275

FY2010

1,022

(39) 31

400

168

216

(33)

Segment sales volume (kt)

55

EBIT declined from FY2010 to FY2012 mainly due to India, Indonesia & North America. Growth trajectory has resumed

Underlying EBIT ($M)

(15)(8)

11 9

29 22

10 10

(14)

12 9

27

48

FY2012

51

(6)

(2)

20

FY2010

107

(6) (4)22

28

27

4

OtherIndia

Nth America

Vietnam

Malaysia

Indonesia

Thailand

FY2013

80

28

27

FY2011

82

(7)(5)

13

30

FY2011 vs FY2010:• Impact of import competition on

spread in the ASEAN market coupled with unfavourable FX movements

FY2012 vs FY2011:• Indonesia’s MCL2 and India’s

CPL start-up costs• Thailand floods• Unfavourable FX movements

FY2013 vs FY2012:• Strong Thailand performance:

product innovation and successful sales, marketing and operations initiatives

• Nth America negatively impacted by negative spread trend

• Commencement of Coated Products joint venture

56

ASEAN EBIT growing

ASEAN underlying EBIT ($M)

(7) (8)11 12

29 22 10 10

9 9 Vietnam

Malaysia

Indonesia

Thailand

FY2013

89

27

48

FY2012

68

(6)

28

27

FY2011

Other

74

30

20

FY2010

89

(6)

28

27

57

Growth and development initiatives in each nation

• Continue to build on strong customer loyalty / specification• Restructure retail channel• SuperDyma® for Home Appliance markets

Thailand

• Grow Project segment volume • Grow retail brands and channelIndonesia

• Grow domestic share via retail strategy, PPGI penetration & government project recovery

• Complete in-line painting projectMalaysia

• Establish/increase influence in retail channel• Create higher pull-through• Profitably use residual capacity to target core export markets

Vietnam

• Benefits of cost saving program• Focus on the growing U.S. residential market• New products and finishes on the West Coast

North America

58

Overall growth vision for Building Products segment

• 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– Performance improvement potential in Indonesia, India and North America

• Further growth to come from working with NSSMC– Realising initial benefits– Wider plan on-track towards targets

SUMMARY

60

Summary

• 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

QUESTIONS

ADDITIONAL INFORMATION

63

Detailed segment financials1H10 2H10 FY10 1H11 2H11 FY11 1H12 2H12 FY12 1H13 2H13 FY13

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 78 152- Vietnam 54 50 104 53 52 105 56 55 111 58 66 124- North America 205 195 400 212 212 424 220 211 431 220 217 436- India 15 16 31 18 23 40 24 32 56 41 49 90- Other (24) (15) (39) (28) (21) (49) (26) (8) (33) (16) (15) (30)- Total 491 531 1,022 529 592 1,121 607 649 1,257 657 687 1,344

Sales Revenue ($m)- Thailand 119 157 276 154 186 340 191 200 392 207 209 417- Indonesia 112 126 238 107 129 236 134 154 288 126 152 278- Malaysia 111 129 240 122 123 245 111 111 221 103 113 216- Vietnam 71 68 139 72 67 139 72 68 139 69 79 148- North America 308 312 620 318 315 633 333 308 641 309 299 608- India 0 0 0 0 0 0 0 0 0 0 0 0- Other (26) (21) (47) (36) (26) (62) (26) (12) (37) (14) (17) (31)- Total 695 771 1,466 737 794 1,531 814 829 1,644 800 835 1,636

EBIT - Underlying ($m)- Thailand 13 14 27 5 15 20 10 17 27 21 27 48- Indonesia 9 20 29 10 12 22 1 9 10 3 7 10- Malaysia 11 17 28 12 18 30 12 16 28 12 15 27- Vietnam 6 5 11 4 5 9 4 5 9 6 6 12- North America 15 7 22 (2) 15 13 0 (2) (2) 1 3 4- India (3) (1) (4) (3) (2) (5) (5) (10) (15) (8) (6) (14)- Other (3) (3) (6) (2) (5) (7) (1) (5) (6) (4) (4) (8)- Total 47 60 107 24 58 82 21 30 51 31 49 80

Underlying EBIT Margin (%)- Thailand 11% 9% 10% 3% 8% 6% 5% 9% 7% 10% 13% 12%- Indonesia 8% 16% 12% 9% 10% 9% 1% 6% 3% 2% 5% 4%- Malaysia 10% 13% 12% 10% 14% 12% 11% 14% 13% 12% 14% 13%- Vietnam 8% 8% 8% 6% 7% 6% 6% 7% 6% 9% 7% 8%- North America 5% 2% 4% -1% 5% 2% 0% -1% 0% 0% 1% 1%- India 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%- Other - - - - - - - - - - - - - Total 7% 8% 7% 3% 7% 5% 3% 4% 3% 4% 6% 5%

Investor Briefing – Building Products ASEAN,North America & India segment

29 October 2013

Sanjay Dayal – Chief Executive, Building ProductsMatthew Coghlan – CFO, NS BlueScope Coated Products

BlueScope Steel Limited. ASX Code: BSL

building products segment briefing presentation...roofing / agricultural contractors metal building...

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