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Credit SuisseAsian Investment Conference 2006Hong KongKirby Adams, Managing Director and Chief Executive OfficerMarch, 2006

ASX Code: BSL

Important Notice

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. RELIANCE SHOULD NOT BE PLACED ON INFORMATION OR OPINIONS CONTAINED IN THIS PRESENTATION AND, SUBJECT ONLY TO ANY LEGAL OBLIGATION TO DO 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.

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

IntroductionIntroduction

Our Bond – What we value

• Our customers are our partners

• Our people are our strength

• Our shareholders are our foundations

• Our communities are our homes

Our Customers – serving them in over 20 countries

• Over 30,000 customers using BlueScope Steel products with confidence

Australia34%

New Zealand/Pacific4%

Asia8%

Asia14%

North America-NSBSS + C&BPNA16%

Americas21%

Europe/Africa3%

Exports38%

PRODUCT OFFER

• Services

• Solutions

• Technical support

• Warranty

• Just In Time Delivery

• Transport & Logistics

• Design / Build / Install

• Information systems- web based- connectivity

PEB/Roll formed28%

Slab9%

HRC23%

Plate6%CRC

3%Metal Coated18%

Painted13%

Global Product Mix($ Revenue)

First Half FY06

Geographic markets (tonnes by destination)

First Half FY06

Indicative3.545 million tonnes

Our customers – Global sales by Market Segment (sales tonnes) 1H-FY2006

Indicative

Auto/Transport 15% (10%)

Packaging2.5% (10%)

Construction –Non-Dwelling

30% (25%)

Construction -Dwelling

15% (20%)

Construction - Engineering

10% (10%)

Agriculture & Mining7.5% (10%)

Shipbuilding5% (0%)

Manufacturing15% (15%)

Other0% (5%)

• Australian sales in brackets

• Asian sales> principally “Construction – non-dwelling”> introduced a residential strategy

Note: Includes indirect sales

Zero harm is our goal for our team and communities

8.0

4.83.4 4.1 3.4 2.8 1.8 1.5 0.8 0.9

1416

29

35

0

5

10

15

20

25

30

35

40

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 20061H

Injur

ies re

sultin

g in l

ost ti

me pe

r milli

on m

an-h

ours

worke

d

** Includes Butler performance from May 2004

Medically Treated Injury Frequency RateLost Time Injury Frequency Rate

17,500 Employees, 75 manufacturing sites, 17 countries

52.247.1

29.122.4 21.9

12.2 9.3 9.2 7.0

17

8.2

60

68

80

0

10

20

30

40

50

60

70

80

90

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 20061H

Medic

ally t

reate

d inju

ries p

er m

illion

man

-hou

rs wo

rked

* Includes Butler performance from May 2004

Reported performance for IISI member companies

Our shareholders – continuing to reward shareholders as we grow

• Share Buybacks – Public Listing to 31 December 2005- Purchased and cancelled 113m shares

* on market – 87m shares* off market – 26m shares

• Dividends - All Fully Franked

Total return to shareholders since BSL’spublic listing (July 2002):

• Share buybacks $ 687m• Dividends paid $ 970m• Interim dividend

(to be paid April 06) $ 140m$ 1,797m

$2.39 share or 77% payout ratio

9 13 1218 18

24 207

10

20

05

101520253035404550

FY2003-1H

FY2003-2H

FY2004-1H

FY2004-2H

FY2005-1H

FY2005-2H

FY2006-1H

¢

¢¢

Cent

s Per

Sha

re

¢

29¢

40¢

¢

¢

¢

SpecialOrdinary:- Interim- Final

62¢

¢

¢ ¢

Unique and valuable franchise in world’s largest and fastest growing markets

IndonesiaMC 100kt +205kt

Painting 50kt +75kt

Western PortHot Rolling 1.43mtCold Rolling 1.0mt

MC (3 lines) 830kt +Painting (2 lines) 330kt +

BrisbanePainting 88kt

New Zealand / PacificIron sand MiningRaw Steel 625ktHot Rolling 750ktCold Rolling360kt

MC 230kt +Painting 60kt

Hollow Sections 45ktPacific BlueScope Buildings

sites 3

VietnamMC 125kt

Painting 50kt

ChinaMC 250kt

Painting 150kt3 Butler PEB

SydneyPainting (1 line) 120 kt

• Coated and Building Products North America

• North Star JVHot Rolling 1.80mt (100%)

• Castrip JV

Asia & China20 BlueScope Buildings Sites

India50:50 JV with Tata

SteelMC 250kt

Painting 150kt2 BlueScope

Buildings sites1 Butler PEB

Port Kembla / SpringhillRaw Steel 5.1mt

Hot Rolling 2.4mt +400ktPlate 360kt

Cold Rolling 1,180kt Tinplate/Black plate 200kt

MC (3 lines) 750kt +PL (2 lines) 207kt +

ThailandCold Rolling 300kt

MC 375kt Painting 90kt

PEB

MalaysiaMC 160kt

Painting 70kt

Australia7 Service Centres

34 BlueScope Buildings sites

7 BlueScope Water

China - Strong existing production and sales network

BlueScope Steel 1 Metal Coating & Painting facility

7 Solutions manufacturing facilities

Over 70 sales offices

Chengdu • Lysaght

Langfang • LysaghtTianjin• Butler

Shanghai• Lysaght• Butler

Guangzhou• Lysaght

Suzhou• Coating and

Painting Facility

Taiwan• Lysaght

BUTLER

Urumqi

Chongqing

Xian

Xiamen

Guangzhou

Shanghai

Tianjin

Upstream – Steel Making

Capability Products StatisticsSlab • Raw steel capacity (mtpa)

- PKSW 5.1- NZS 0.6- NS (50%) 0.9

6.6

• Cost curve (HRC)- PKSW & NZS - lowest quartile- NS - most efficient EAF

• Turnover (1H-06)- PKSW A$1,900m- NS (50%) US$243m

• Customers- Internal mid-stream- Pipe & Tube- Fabrication / manufacturing- Ship building (Korea)- Distribution

• Markets- Australia, NZ, Americas, Asia

Port Kembla Steelworks

NSW, Australia

Hot Rolled Coil

New Zealand Steel

Plate

North Star BlueScopeOhio, USA

Midstream – Metallic Coating and Coil Coating Network

Capability Products Statistics

• Capacity (ktpa) growing

• Asia FY05 FY09- Cold Rolled Coil 300 300+- Metallic Coating 430 1,460- Painting 210 635

• Australia- Cold Rolled Coil 1,930 2,180- Metallic Coating 1,580 1,580- Painting 625 745

• NZ- Cold Rolled Coil 360 360- Metallic Coating 230 230- Painting 60 60

• Feed source of Hot Rolled Coil and Cold Rolled Coil- Asia – local suppliers and internal- Australia & NZ – internal

• Customers- Principally construction, manufacturing & auto

• Markets- “In market” local supplier- + exports

COLORBOND®

ZINCALUME®

CLEAN COLORBOND®

GALVASPAN®

Australia:- Western Port, Vic- Illawarra Coated

Products, NSW- Queensland

- Sydney

New Zealand

Asia:- India JV (Tata)

- Indonesia- Malaysia- Thailand- Vietnam- China

Research & Development

Technical Support

BlueScope Steel – A global leader in adding value to hot rolled coil

58

5249

4542

40 4037

3533 32

29 29 2825 25 25 24 23 22 22

20 20

16 15 15 15 1513 13 13

10 10 108 7 7 7

5 4 3

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Sum

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ine

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JFE

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INAS

Nipp

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VALUE-ADDING CAPABILITY(Metal Coating Capacity as % of HRC Capacity)

NOTE: Compiled from the largest 60 steelmakers (excluding those who do not have flat steel metal coating capacity)

A similarly strong downstream position in• Painting #4 worldwide• Rollforming #1 worldwide• Pre Engineered Buildings #1 worldwide

51

Will increase to 58% with recently announced CAPEX (India & Indonesia)

Source: IISI ‘World Steel in Figures 2005’, CRU ‘Steel Sheet Quarterly April 2005’

Downstream - Metal Building Products and Solutions

Capability Products Statistics

• Market leader in- Australia- China- South East Asia- USA (PEB)

• Feed- Australia - internal- Asia - internal- NZ – internal- NA – external / internal

• Customers- Principally construction sector

• Markets- “In market” local supplier- Branded products- Supply, install and fix

Butler Pre-Engineered Buildings (PEB)

BlueScope Water

Lysaght roll formed steel components

Australia

New Zealand & Pacific

Asia

North America

Value-added Solutions

Graffiti Remover

Metallic Coated and Painted Value Added Products

“Framework for the future”

• TRUECORE™ steel launched to market in July 2005.

• Product designed specifically for use in the Residential Framing market.

• TRUECORE™ steel will become synonymous with the compelling value proposition for steel house frames.

Pre-engineered Steel Building Solutions – speed, cost effective, broad application

Example: 110,000m2 facility, erected in 28 working days

Wal*Mart Stores Distribution Centre (Arkansas)

1 July 9 2 July 23

3 July 30 4 August 6

Current and expected market conditions confirm our strategic direction

Downstream

Midstream

Upstream

FUTURE GROWTH PROJECTSFY2007 - 2009FY2006–2H

Australia- 400kt HSM expansion (1Qtr 07)- BF No. 5 reline (expected FY08)

New Zealand Steel- Front end study underwayUSA- North Star BlueScope new bag house- Castrip

Australia- 120kt Colorbond® plant start up (1H-CY07)China- 250kt Metal Coating and 150kt Paint

lines start up (1Q-FY07 & 2H-FY06 respectively)

India- 250kt Metal Coating & 150kt Paint

lines start up (mid CY08)Indonesia- 205kt Metal Coating & 75kt Paint

lines start up (early CY08)

Vietnam- Ramp-up 125kt Metal Coating and 50kt

Paint LinesThailand- Ramp-up 200kt Metal Coating

expansion

India- New PEB and Lysaght plants openChina- New PEB and Lysaght plants open

Australia- Water and new building productsThailand- First pre-engineered building (PEB)China- New panels, residential plants and new

beam facility

Vietnam – Recently completed metal coating and painting facility

China – Metal coating and painting facility under construction

India – Pune Lysaght and PEB facilities under construction

Pricing over the cycle

Indicative

Time

Selli

ng P

rice

$

PEBPaintZALGalvCRCHRCSlab

FY2006FY2006IN REVIEWIN REVIEW

Our record since public listing – Revenue & EBITDA

0400800

1,2001,6002,0002,4002,8003,2003,6004,0004,400

1H-03 2H-03 1H-04 2H-04 1H-05 2H-05 1H-060100200300400500600700800900100011001200

Revenue EBITDA

EBIT

DA (A

$ Milli

ons)

Reve

nue (

A$ B

illion

s)

Despatches (net) 3.35 3.41 3.24 3.69 3.46 3.70 3.55Revenue (A$m) 2,590(1) 2,712(1) 2,619(1) 3,151(1) 3,881 4,084 3,892 EBITDA (A$m) 464(1) 417(1) 440 (1) 665(1) 837 818 593

(1) AGAAP

Calendar Year Earnings

A$ Millions CY2003 CY2004(2) CY2005

Revenue 5,328 7,029 7,980

EBITDA(1) 857 1,501 1,411

EBIT(1) 581 1,212 1,111

Net Profit 436 859 792

EPS (¢) 56 116 110

(1) Includes EBITDA & EBIT for North Star BlueScope Steel but not revenue.(2) Includes eight months of BlueScope Butler financial results.

Group headlines First Half FY2006 vs. First Half FY2005

• Revenue A$3,892 million Constant

• External despatches 3.5 million metric tonnes Up 3%

• EBITDA A$593 million Down 29%

• EBIT A$449 million Down 35%

• NPAT A$312 million Down 38%

• EPS 44¢ Down from 68¢

• After tax Return on Invested Capital 14.6% Down from 27%

• After tax Return on Equity 18.9% Down from 32%

• Net operating Cashflow- after capital / investments ($19 million) Down 108% - before capital $347million Down 33%

• Interim Ordinary Dividend 20¢ per share Increased 2¢ per share (11%)(fully franked)

• Gearing (net debt) 33.2% 22.2% (June 05) – including SOR

+5

Coated and Building Products Asia – unexpected market weakness

Markets> Lower despatches / weaker markets > Heightened import competition> Customers high inventories / destocking> China – credit controls delayed projects

Performance• First half

> higher feed costs fully utilised in half> +$11m in pre-operating and business

development costs vs. 1H-05 (gross $18m)> unfavourable FX - A$ stronger > growth projects on schedule, apart from

China metal coating line (+1-3 months)• Second half

> improving margins, higher production and increased sales volumes

> competitive market offers> project delivery / start-up

45 37

-4-20

0

20

40

60

80

100

120

FY05-1H FY05-2H FY06-1H

EBIT

A$ M

illion

s

BlueScope Butler

9 8

• Sales revenue down 7% to A$485m, including A$117m from BlueScope Butler China

• 1H-FY2006 return on net assets annualised (pre-tax) (1%)

Continued GDP growth expected in South East Asia

GDP - Malaysia

-12

-8

-4

0

4

8

12

95 96 97 98 99 00 01 02 03 04 05e 06 07

Annu

al %

Cha

nge

ConsensusEIUIMA Asia

F’cast

Foreign Direct Investment[Thailand, Malaysia, Indonesia, and Vietnam]

0

2

4

6

8

10

12

01 02 03 04 05e 06 07 08 09 10

US$b

illio

n

F’cast

GDP - Thailand

-12

-8

-4

0

4

8

12

95 96 97 98 99 00 01 02 03 04 05e 06 07

Annu

al %

Cha

nge


F’cast

GDP - Indonesia and Vietnam

-12

-8

-4

0

4

8

12

95 96 97 98 99 00 01 02 03 04 05e 06 07

Annu

al %

Cha

nge


F’cast

Source: EIU, Consensus Economics, IMA Asia, BSL EconomicsNotes: All charts include calendar year data

Vietnam

Indonesia

China and India expected to maintain strong growth momentum

GDP

0

2

4

6

8

10

12

95 96 97 98 99 00 01 02 03 04 05e 06 07

Annu

al %

Cha

nge


Source: EIU, Consensus Economics, IMA Asia, BSL EconomicsNotes: All charts include calendar year data

China

India

F’cast

Industrial Production

0

5

10

15

20

25

30

95 96 97 98 99 00 01 02 03 04 05e 06 07

Annu

al %

Cha

nge

ConsensusEIU

China

India

F’cast

Gross Fixed Investment

0

4

8

12

16

20

24

95 96 97 98 99 00 01 02 03 04 05e 06 07

Annu

al %

Cha

nge


China

India

F’cast

Foreign Direct Investment

0

10

20

30

40

50

60

01 02 03 04 05e 06 07

US$b

illio

n

0

2

4

6

8

10

12

EIU

China (LHS)

India (RHS)

F’cast

Our Asian Coating / Painting / Roll-Forming / PEB Capacity to Triple

By Region

430

210

1460

635

0200400600800

1000120014001600

FY2005 FY2006 FY2007 FY2008 FY2009

Metal Coating Painting

(k to

nnes

)

x 3.4

x 3.0

Coated & Building Products Australia – Challenged again

Markets> Lower production & export volumes due to Western Port fire> Lower domestic demand for Australian canned goods > Lower domestic demand in manufacturing and

distribution for “bare” galvanised > Increased “bare” product import offers > Strong domestic demand for higher quality construction

products> Higher domestic prices50

100

150

200

250

Milli

ons

• Sales revenue of A$1,429m, down 5%

• 1H-FY2006 return on net assets annualised (pre-tax) (5%)

* Excludes Packaging Products impairment write-down of $82million

-84

-15 -30

-150

-100

-50

0

FY05-1H FY05-2H FY06-1H

EBIT

A$


> significantly higher feed costs (HRC & slab)> Western Port HSM fire August 2005 reduced production

capacity – fully operational November 2005> Higher zinc and aluminium costs> Increased metal coating and paint capacity> Western Sydney Colorbond® Centre on schedule

• Second half> Improved sales and production> More competitive market offers> Lower “bare” product prices

*

Coated and Building Products North America – Back in the black

Markets> Improved non-residential market but not as strong

as the previous corresponding period> Good order bookings leading into the second halfPerformance• First half

> Overall continued improvement> Buildings

- Jackson Tennessee specialty plant into full production

- But, despatches down 7.5% due to delayed start-up

- Sold Galesburg, Illinois facility> Vistawall

- Tennessee extrusion expansion completed- Weekly order intake ($ terms) up 21%- Cost increases – aluminium and energy

• Second half> Continued improvement

1

-19

2

-30

-20

-10

0

10

20

30

FY05-1H FY05-2H FY06-1H

EBIT

A$ M

illion

s

• Sales revenue = A$607m down 4%

• 1H – FY2006 return on net assets annualised (pre-tax) 1%

New Zealand and Pacific Steel Products – still delivering


> Higher costs, including maintenance, unit costs and coal / electricity

> Paint line production up due to FY05 upgrade> Regrettably had a fatality in July> Front end studies underway – steel make and

iron sands conversion• Second half

> Lower steel prices> Flat sales volumes

93 9666

0

25

50

75

100

125

150

175

200

225

FY05-1H FY05-2H FY06-1H

EBIT

A$ M

illion

s

• Sales revenue down 8% to A$359m

Markets> Lower domestic sales (softer residential) > Higher domestic prices> Lower prices on export HRC sales> Higher average vanadium prices

• 1H-FY2006 return on net assets annualised (pre-tax) 42%

Hot Rolled Products – excellence across the board

698 653479

0

200

400

600

800

1000

1200

1400

FY05-1H FY05-2H FY06-1H


> Dramatically higher iron ore and coal costs, partly offset by lower priced iron ore inventory

> Excellent operations / marketing effort post Western Port fire

> Record 6 month iron make and slab production> Enterprise Bargaining Agreement extended

to 2009> PKSW Hot Strip Mill expansion on schedule> North Star BlueScope – record half year

production and paid US$50m (100%) dividend • Second half

> Full impact of 71% higher iron ore costs> Flat steel volumes; weaker prices overall> More normal product mix; improved market offer

• 1H-FY2006 return on net assets annualised (pre-tax) 44%

EBIT

A$ M

illion

s 104

North Star BlueScope Steel


90

• PKSW sales revenue up 2% to A$1,900m

• NSBSS revenue US$243m (50%), down 17%

Markets> Increased export (principally slab) sales> Higher domestic prices; lower export prices> Strong USA HRC price / scrap spread

62

Earnings guidance for FY2006 – implies a more challenging second half

Downstream

Midstream

Upstream

FY2006 – 2H vs. 1H

• Full affect of higher iron ore (PKSW)• Scrap – free market linked to HRC• Further softening in Asian export steel prices • Flat sales volumes• More normal product / geographical mix

Australia• Improved sales & production • Displace imports• Lower “bare” product pricesAsia• Improved margins• Higher production & sales volumes• Competition • Vietnam project start up

• Lower “bare” feed costs• Higher sales volumes• Greater competition

• FY2006 after tax earnings outlook now expected to be in the range of A$0.65 – $0.75 EPS on an AIFRS basis

Global steel industry currently squeezed by China’s increased steel making capacity and higher raw material costs

15

20

25

30

35

40

45

50

55

87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05

US$ / DMT. Lump iron ore indicative of all iron ore types. JSM Benchmark Pricing.

Lump Iron Ore Extreme Deviation

0

50

100

150

200

250

Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06

Japan to Korea HRC US Midw est HRC Latin America SlabUS$ / Tonne. Indexed, Jan 98 = 100. (CRU)

Raw Steel Prices

Sources: IISI, BSL Research

93 95 101 109 115 124 127151

182

222

280

349

0

50

100

150

200

250

300

350

400

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

China Crude Steel Production

Millio

n to

nnes

World crude steel production - 1950 to 2004

0

200

400

600

800

1000

1200

1950 1960 1970 1980 1990 2000

Millio

n To

nnes

6.0%

3.1%

0.3%

4.0%Average Annual Growth Rates

Source: IISI

Global steel industry – our long term view has not changed

Current industry issues:

• China’s capacity growth / fragmentation

• Lower Asian steel prices

• Higher raw material costs

• Scrap / iron ore differential

• Higher energy and other costs

• Increased competition

Rest of steel world

• Continued discipline

Likely industry outcomes long term:

• China – steel reform initiatives taken / exports discouraged

• China – increased demand / steel displaces inter-material

• Prices improve and then stabilise

• Raw material costs moderate

• Other costs remain high

• Competition BUT on increased demand

• Expansion programs being re-evaluated

• Continued industry consolidation

• India – increased steel requirements (3 - 5 years)

Questions and Answers

Dynamic Global Steel

Market

Dynamic Global Steel

Market

Profitable Through the

Cycle

Profitable Through the

Cycle

Geographic and Product

Diversity

Geographic and Product

Diversity

Strong and Flexible Capital

Structure

Strong and Flexible Capital

Structure

Consistently Strong Cash

Flows

Consistently Strong Cash

Flows

Strong Board & Management

Team

Strong Board & Management

Team

Value Added Branded Products

Value Added Branded Products

Growth Opportunities in

Asia

Growth Opportunities in

Asia

Low Cost Producer

Low Cost Producer

Strong Operating

Track Record

Strong Operating

Track Record

A VERY DIFFERENT KIND OF STEEL

COMPANY

Credit SuisseAsian Investment Conference 2006Hong KongKirby Adams, Managing Director and Chief Executive OfficerMarch, 2006

ASX Code: BSL

Supporting InformationSupporting Information

Reporting business segments

Corporate / Group

Pre-eminent seller of branded steel in AsiaLower cost “backward integration” growth strategy

o Indonesian, Malaysian and Thailand operations

o Vietnamo Lysaght Asiao China, including Butlero India

Hot Rolled Products

Lowest quartile producerLeading supplier of flat steel in AustraliaGlobal scale

o Port Kembla Steelworkso North Star BlueScopeo Castrip

Largest supplier of metallic coated and painted steel in AustraliaLeading market shares in most key markets

o Western Porto Springhillo Packaging Productso Lysaght Australiao Service Centres

New Zealand & Pacific Steel

Products

Only fully integrated flat steel maker in New ZealandLeading domestic market share of flat products

o Pacific

Coated & Building Products

North America

Pre-eminent global designer / supplier Pre-engineered buildingsNo 1 position in North America and China

Coated & Building Products

Asia

Coated & Building Products Australia

Employee profile by country

31 December 2005

New Zealand and Pacific Islands

1,418

North America3,943

China1,841

SE Asia2,168

Other89

Australia8,380

Total 17,839

Dramatic changes to geographic destination and product mix

Indicative

First Half 2006 (Sales Tonnes)

First Half 2005 (Sales Tonnes)

Australia34%

New Zealand/Pacific4%Asia

8%Asia14%

North America -NSBSS + C&BPNA16%

Americas21%

Europe/Africa3%

Exports38%

Australia45%

New Zealand/Pacific5%

Asia10%

Asia12%

North America -NSBSS + C&BPNA16%

Americas8%

Europe/Africa4%

Exports24%

3.545 million tonnes 3.457 million tonnes

BlueScope Steel Strategy

• Building & Construction-market solutions company that is focused on:– Pursuing growth in selected regions and market segments (including M&A)– Growing unique franchise– Vigorously maintaining existing value via:

• Value-added branded products and services • Being a world class, low cost steel-maker

– Disciplined capital management

• Strategy by Region– AUSTRALIA and NZ

• Vigorously maintain existing value• Selectively grow in Building and Construction segment• Develop niche growth opportunities in other segments

– SE ASIA / CHINA / INDIA• Core growth region• Expansion into South Asia (India-based, with operations in Sri Lanka, Pakistan, Bangladesh, Nepal, Bhutan) • Branded downstream products and solutions to building industry

– NORTH AMERICA• New growth area• Leading supplier of branded Building Solutions• Specialised HRC supplier

– INTERNATIONAL MARKETS• Fully utilise downstream, value-adding facilities to export more value-added products – without

compromising domestic service levels• Continue approach of focusing on long-term customer relationships

Investing for the future – FY06 peak capital commitment

• Major project capital spending profile

--54461812130Western Sydney Colorbond®

-4 -250(4)

1430(4)

2320

59-

100300(4)

Port Kembla:- HSM expansion- Blast Furnace No. 5 Reline(4)

168

91

6715

1

14

Actual1H-FY2006

-368028-145Indonesia – Coating / Painting(1)

-35

--

-FY2008

-24

--

-FY2009

572 over 3 years

965

15-

-FY2007

1,328

45133

28035

160

218

6-

India- Butler / Lysaght facilities(1)(3)

- Coating / Painting(1)(3)

4314

1556

China(1)

- Coating and Painting Facility- Guangzhou Butler / Lysaght

30116Vietnam – Coating / Painting(1)

234354Total spending on major projects

H2 FY2006

Actual to 30/6/05(2)

Total Est.Capex/CostAll in A$million

(1) Estimated capital costs based on forecast exchange rate assumptions at time of project approval.(2) Capital spent from approval to 30/6/05.(3) India developments represent BlueScope’s 50% interest, noting these developments will be funded by the BlueScope Steel and Tata Steel joint venture.(4) Indicative, based on project study. Final cost and phasing confirmed later in FY2006.

Port Kembla Steelworks – IH-FY2006 vs. (FY2005) product flow (Indicative)


2.7mt slab 1H06 (5.1mt slab FY2005)

North Star BlueScope Steel1.8mt HRC p.a.

Hot Strip Mill50%

(50%)

Export Slab30%

(20%)

Plate Mill10%(10%)

C&BP Australia (Western Port)

10%(20%)

Export HRC20%(10%)

C & BP Australia (Springhill)

60%(60%)

Domestic HRC20%(30%)

* “C&BP Australia” is Coated and Building Products Australia

New Zealand Steel product flow*

Export Hot Rolled 40%

Domestic Pipe5%

Domestic Hot Rolled5%

Export Cold Rolled15%

Domestic Cold Rolled15%

Coating lines70%

Export Metal Coated20%

Domestic Painted20%

Domestic Metal Coated60%

ExportIron Sand

Concentrate1.0mt

Mine SitesIron Sand Concentrate

2.3mt

*Indicative annual prime production and sales (t)

Export Vanadium Slag

14 kt

New Zealand Steel0.6mt Slab

0.6mt Hot Rolled

Cold Strip Mill50%

Unique direct reduction process

Castrip - Scale comparison with current casting technologies

Thin-Slab Casting

Run out tablecooling

4-6 m/minute

50-60mm thickHolding furnace

Finisher

300-400 m

1-10mm thick

Coiler

20-40 metric ton coil

Conventional Slab Casting

200-300 mm thick


1-2m/minuteGas cutter

Cooling

Reheat furnace

RougherCoil box Finisher

1-10mm thick

Coiler

500-800 m


Strip Casting

15-150 m/minute

Scale ControlChamber


0.7 - 1.8 mm thick

60 m

Mill

Coiler


Stable revenues with margin squeeze

A$ Millions 2002(1) FY2003 FY2004(3) FY2005 2005-1H 2005-2H FY2006-1H

Revenue 4,593 5,302 5,770 7,964 3,881 4,083 3,892

EBITDA(2) 412 881 1,104 1,655 837 818 593

EBIT(2) 160 611 818 1,358 696 662 449

Net Profit 452 584 982 502 480 312

EPS (¢) 57.1 77.8 134.0 68.0 66.0 44.0

(1) 2002 normalised.(2) Includes EBITDA & EBIT for North Star BlueScope Steel but not revenue.(3) Includes two months of BlueScope Butler financial results.

EBIT variance – December half FY2005 vs. December half FY2006

0

100

200

300

400

500

600

700

800

900

1000

Dec 04 Half Exp Prices Dom Prices Vol / Mix NSBSS 1-off / DiscCosts

Coal/ IronOre

Raw MatlOther

Conv & OthCosts

Exch Rates Other Dec 05 Half

EBIT A$m• Western Port fire (21)

• Coal Purchases (106)• Iron Ore Purchases (175)• Opening Inventory 146

• External Steel Feed (25)• Scrap 12• Coating Metals (15)

$696m ($259m)

$345m $1m ($42m)($82m)

($135m)

($37m)($28m)

($3m) ($7m) $449m

• Repairs & Maintenance (8)• Industrial Disputes (FY05) 20• Volume affected unit costs (45)• Business Development (25)• Western Port fire (19)

Balance Sheet – Reflects distributions to shareholders and peak capital investment

A s A t A $ M ill io n s 3 0 J u n e 2 0 0 5 (1 ) 3 1 D e c e m b e r 2 0 0 5

A s s e ts C a s h 8 5 7 9 R e c e iv a b le s 1 ,2 0 5 1 ,0 8 1 In v e n to ry 1 ,2 1 1 1 ,4 3 9 O th e r A s s e ts 6 5 1 7 3 2 N e t F ix e d A s s e ts 3 ,3 7 4 3 ,5 9 2

T o ta l A s s e ts 6 ,5 2 6 6 ,9 2 3

L ia b il it ie s C re d ito rs 8 2 4 7 2 8 In te re s t B e a r in g L ia b il i t ie s 1 ,0 1 5 1 ,7 0 9 P ro v is io n s & o th e r L ia b il i t ie s 1 ,4 2 7 1 ,2 0 7 T o ta l L ia b il it ie s 3 ,2 6 6 3 ,6 4 4

N e t A s s e ts 3 ,2 6 0 3 ,2 7 9

• Net Debt / (Net Debt + Equity) 22.2% 33.2%

(1) Normalised to reflect sale of receivables program as debt ($140 million)

Cashflow reflects a strong 2005 result and lower earnings

A$ millions 2002(1) 2003 2004 2005 2005-1H 2005-2H 2006-1H

Cash from operations 795 1012 1636 709 927 569

Working Capital Movement (31) (94) (399) (193) (206) (222)

Net operating cashflow before borrowing costs and income tax

381 764 918 1,237 516 721 347

Net investing cashflows - Capital expenditure & Investments - Other

(162) 8

(209) 44

(585) 7

(663) 41

(303) 35

(360) 6

(381) 15

Net cashflow before financing & tax

227 599 340 615 248 367 (19)

Net financing cashflow (468) 309 350 223 127 642

Payment of income tax (29) (119) (312) (185) (127) (240)

Share buy-back (26) (259) (327) (75) (252) (74)

Dividends (Normal and Special) (75) (244) (348) (212) (136) (316)

Net increase in cash held 1 27 (22) (1) (21) (7)

(1) 2002 normalised.(2) All periods norrnalised to reflect sale of receivables program cashflow movements as debt.

EBIT remains sensitive to realised hot rolled coil prices and raw material costs

Estimated impact on forecast EBIT

(A$mil)

Assumption Full Year(previous)

76

Full Year(current)

+/– US$25 / tonne movement in BlueScope’s average realised export HRC price (1)

+/ 1¢ movement in Australian dollar / US dollar exchange rate(2)–

66

7 7+/– US$10 / tonne movement in NSBSS scrap to HRC price spread 13 12+/– 2% movement in slab production in Australia, New Zealand & USA 17 20+/– US$10 / tonne movement in coal costs 50 50+/– US$10 / tonne movement in iron ore costs 100 100(1) The change in export HRC price assumes proportional effect on export slab, and flow on to domestic pipe and tube market and to other

export products, together with a normal mix of product. Current year is affected by more than these sensitivities due to the significantly higher export slab and HRC volumes associated with reduced Australian domestic demand and Western Port fire.

(2) The movement in the Australian dollar/US dollar exchange rate includes the restatement of US dollar denominated receivables and payables and the impact of translating the earnings of offshore operations to A$.

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