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1H FY2013 Financial ResultsSupporting Information

18 February 2013

BlueScope Steel Limited. ASX Code: BSL

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Important notice

THIS PRESENTATION IS NOT AND DOES NOT FORM PART OF ANY OFFER, INVITATION ORRECOMMENDATION IN RESPECT OF SECURITIES. ANY DECISION TO BUY OR SELL BLUESCOPE STEELLIMITED SECURITIES OR OTHER PRODUCTS SHOULD BE MADE ONLY AFTER SEEKING APPROPRIATEFINANCIAL ADVICE. RELIANCE SHOULD NOT BE PLACED ON INFORMATION OR OPINIONS CONTAINED INTHIS PRESENTATION AND, SUBJECT ONLY TO ANY LEGAL OBLIGATION TO DO SO, BLUESCOPE STEELDOES NOT ACCEPT ANY OBLIGATION TO CORRECT OR UPDATE THEM. THIS PRESENTATION DOES NOTTAKE INTO CONSIDERATION THE INVESTMENT OBJECTIVES, FINANCIAL SITUATION OR PARTICULARNEEDS OF ANY PARTICULAR INVESTOR.

THIS PRESENTATION CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS, WHICH CAN BE IDENTIFIEDBY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS “MAY”, “WILL”, “SHOULD”, “EXPECT”,“INTEND”, “ANTICIPATE”, “ESTIMATE”, “CONTINUE”, “ASSUME” OR “FORECAST” OR THE NEGATIVETHEREOF OR COMPARABLE TERMINOLOGY. THESE FORWARD-LOOKING STATEMENTS INVOLVE KNOWNAND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE OUR ACTUALRESULTS, PERFORMANCE AND ACHIEVEMENTS, OR INDUSTRY RESULTS, TO BE MATERIALLY DIFFERENTFROM 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 FOR ANYINFORMATION PROVIDED IN THIS PRESENTATION, INCLUDING ANY FORWARD LOOKING INFORMATION,AND DISCLAIM ANY LIABILITY WHATSOEVER (INCLUDING FOR NEGLIGENCE) FOR ANY LOSSHOWSOEVER ARISING FROM ANY USE OF THIS PRESENTATION OR RELIANCE ON ANYTHING CONTAINEDIN OR OMITTED FROM IT OR OTHERWISE ARISING IN CONNECTION WITH THIS.

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Snapshots of Reporting Segments & Drivers

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Segment business drivers

Coated & Industrial Products Australia

• Selling prices• Material costs –

including iron ore, coal, fluxes, alloys, and coating materials

• Conversion costs• Foreign exchange

(eg AUD/USD)• Despatch volumes• Domestic / export

and product mix

New Zealand & Pacific Steel

Products

Global Building Solutions

Building Products

ASEAN, NA and India

Building Components &

Distribution Australia

• Despatch volumes• Product mix• Margins• Foreign exchange

(eg AUD/USD)

• Selling prices of steel• Material costs – mainly

coal, fluxes, alloys, and coating materials

• We own our iron sands resource, so just an extraction cost applies

• Conversion costs• Foreign exchange• Despatch volumes• Domestic / export and

product mix • Iron sands and

vanadium revenue

• Despatch volume• Margins• Political

developments• Foreign exchange

(USD, THB, IDR, MYR, VND)

• Selling prices of steel

• Material costs –including scrap steel, pig iron, fluxes and alloys

• Conversion costs• Foreign exchange

(eg AUD/USD)• Despatch volume• Energy costs

• Despatch volumes• Margins• Foreign exchange

(esp USD, RMB)

Corporate / Group

HotRolled

ProductsNorth America

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15%10%10% 65%

Ag & miningAutoManufacturingBuilding & construction

5%

40% 55%

Australia New Zealand

10%

45% 20%

25%

North Star USA100%

China

10%

90%

ASEAN 100%

Building Products &Building Solutions

North America

Note: indicative (rounded to nearest 5%)

Globally our focus is primarily on building products and solutionsF

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Global Building Solutions

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Net Margin Improvement $4M

Global Building Solutions – underlying EBIT variance analysis(1H FY2013 vs. 1H FY2012)

EBIT

A$M

+30

+24

1H FY2012

-1

+17

1H FY2013Provision Adjustment

-8

Other

+25

Mix

0

Volume

-2

Conversion Costs

-4

Raw Material Costs

Domestic Prices

-22

One-off prior period (FY2005-FY2009) provision adjustment

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Net Margin Reduction $6M

Global Building Solutions – underlying EBIT variance analysis(1H FY2013 vs. 2H FY2012)

EBIT

A$M

+24

+9

Volume / Mix

+17-8

+25

Conversion & Other Costs

-2

Raw Material Costs

Domestic Prices

+5

Other

+15

2H FY2012

-26

1H FY2013Provision Adjustment

One-off prior period (FY2005-FY2009) provision adjustment

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Unrivalled manufacturing, engineering, and sales footprint

1 Includes Xi’an buildings facility

Global Building Solutions footprint

North America

• 9 x Buildings manufacturing facility• 1 x Global Engineering Centre• 2000 x Licensed Builder / Dealers• General construction capability

Saudi Arabia

• 1 x Buildings manufacturing facility (30% share)

India

• 1 x Buildings manufacturing facility (50% share)

• 1 x Global Engineering Centre

China

• 4 x Buildings manufacturing facility1

• 4 x Lysaght manufacturing facility• 1 x Metal coating/painting facility• 32 x Sales offices• 1 x Global Engineering Centre

ASEAN

• 2 x Buildings manufacturing facility• 5 x Sales Offices

Australia

• 1 x Buildings manufacturing facility• 1 x Water manufacturing facility• 9 x Sales offices• General construction capability

In-market presence

In-market presence via JV

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A new Global Accounts team will leverage our strong brand reputations and operating footprint to deliver engineered building solutions on a global scale

Venezuela

Customer HQ: VenezuelaSector: Oil & GasSupply from: North America

Brazil

Customer HQ: ChinaSector: Oil & GasSupply from: China

Nigeria

Customer HQ: North AmericaSector: Consumer/RetailSupply from: China

Ivory Coast

Customer HQ: SingaporeSector: AgricultureSupply from: Saudi Arabia

Russia

Customer HQ: RussiaSector: Sports/RecreationSupply from: North America

Taiwan

Customer HQ: USASector: Consumer/RetailSupply from: China

Recent projects

In-market presence

In-market presence via JV

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So what is an engineered building solution?

Engineered Building Solution Conventional steel building

Engineered solution using tapered beams and columns

Efficient steel use – steel only where it’s needed

Basic designs using hot rolled long sections

Inefficient steel use –steel volume where it’s not needed

Key benefits to engineered building solutions are: Reduced steel usage (up to 40% less than conventional) Sustainability and environmental benefits Rapid construction time Better build quality and extended life cycle Improved weather resistance

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A Global Accounts example – Span/Costco

Membership warehouse retailer –seventh largest retailer in the worldMembership warehouse retailer –seventh largest retailer in the world

A leading US supplier and erector of Engineered Building SolutionsA leading US supplier and erector of Engineered Building Solutions

Global architecture firm specialising in retail and commercial sectorsGlobal architecture firm specialising in retail and commercial sectors

BlueScope, Span and Mulvanny G2 design and build Costco warehouse outlets worldwide Strategic partnership since 1989 891 projects completed totalling 6.2 million sqm Projects completed in the United States, Canada,

Mexico, Australia and Taiwan Average project size of 14,000sqm 110 days from ground break to store opening

Some benefits of the global program for Costco: Global certainty of delivery, build quality Designs and development timetables are

standardised Learnings are captured through regular consultation Legal and contract efficiencies established Risk management best practice

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‘Breakthrough’ results

110,000 sqm facility erected in 28 working days

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BlueScope Building Solutions customersF

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Example projects – manufacturingF

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Example projects – retail / warehousingF

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Growth will come in four key areas

Global Accounts • Building a new line of sales through our unique Global Accounts offer• Explore expansion into new global geographies

Continued growth at Buildings Asia

• Strong industrial and commercial growth forecasts across the Asian region• Geographic penetration and expansion (Xi’an)• Combining the China and ASEAN Buildings businesses to leverage

knowledge and drive efficiencies• Introducing innovations from the global portfolio

Leveraging a North America recovery

• Leveraging a leaner cost base as the market recovers• Refocussing on differentiation through innovation

Continued growth at Building Products China

• Support Buildings China growth plus continued profitable increases in external volumes

• Introducing new productsFor

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Building Products ASEAN, North America & India

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Gross Margin Improvement $5M

Building Products ASEAN, North America & India – underlying EBIT variance analysis (1H FY2013 vs. 1H FY2012)

EBIT

A$M

+4+5

+21+6

1H FY2013

+31

Other

-1

Exchange Rates


MixVolumeRaw Material Costs

+80

Domestic Prices

-46

Export Prices

-29

1H FY2012

-9

Conversion & Other Costs:Cost improvement initiatives 4Escalation (6) One-off / discretionary1 (7)

(1) Predominantly higher marketing costs in Thailand delivering volume growth, and higher conversion costs driven by the start-up of the coating and painting line in India

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Building Products ASEAN, North America & India – underlying EBIT variance analysis (1H FY2013 vs. 2H FY2012)

EBIT

A$M

+3

+3

+31

1H FY2013

+31

Other

-1

Exchange Rates


-7

Mix

-1

VolumeRaw Material Costs

+35

Domestic Prices

-31

Export Prices

-1

2H FY2012

Predominantly higher conversion and marketing costs in ASEAN businesses to support volumes

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$1.36 Billion Joint Venture with Nippon Steel & Sumitomo Metal Corporation (NSSMC)

• Establishment of 50:50 joint venture over BlueScope’s building products business in ASEAN and the U.S. (Steelscape and ASC Profiles businesses)

• Joint venture business to be called NS BlueScope Coated Products

• Provides a stronger platform to capture higher value adding growth in existing markets and the potential to enter new product segments especially to supply home appliance and whitegoods manufacturers in Southeast Asia

• Joint venture enterprise value of US$1,360M (100%) FY2012 underlying EBITDA for the business of A$115M (EBIT A$68M), $62M in 1H FY2013 Valuation reflects the attractive platform and enhanced growth prospects of BlueScope’s existing business

• BlueScope will appoint CEO and continue to control and therefore consolidate the JV in financial statements. NSSMC will appoint the Chairman

• BlueScope’s expects to receive net proceeds of approximately US$540M for the sale of its interests in the businesses that comprise the joint venture. Receipt of the net proceeds will deliver a very strong balance sheet and enhance financial flexibility to invest in growth opportunities

• BlueScope and NSSMC have now obtained almost all of the regulatory approvals that are required for the JV transaction to be completed and are working towards completion by the end of March 2013

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This JV fits with our strategy

• Global brands – COLORBOND®, Lysaght®, Butler®– Underpinned by leading edge technologies like Vision Engineering System and next

generation products

• Global partnerships – Cargill, Tata, NSSMC, Costco, P&G– Enables us to prosper in widely diverse markets

• Global networks – 100 factories, 17 countries, 17,000 employees– Unique footprint in high growth economies from India, to Asia and to the U.S.

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Why we are partnering with NSSMC

• 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 Strong sales capability and 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

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NS BlueScope Coated Products geographic spread

Thailand(75%) 2

• Metallic Coating & Painting

• Lysaght• Ranbuild

Indonesia(100%)


• Lysaght• Ranbuild (Under

development)

Malaysia(100%) 3



Vietnam(100%)



Steelscape(100%)

• Kalama • Rancho Cucamonga • Fairfield, Alabama

ASC Profiles(100%)

• ASC Building Products

• AEP Span• ASC Steel Deck

ASEAN1 North America

NS BlueScope Coated Products

FY2012 underlying results for JV:Revenue: A$1,644MEBITDA: A$115MEBIT: A$68M

Included in JV as these businesses:• have similar product, manufacturing and

market characteristics; and• leverage shared technology and product

development

Notes: (1) Includes also Singapore and Brunei. Percentages under each country / entity denote current BlueScope ownership levels.(2) BlueScope interest currently 75%. JV interest in Thailand operations to increase to 80% upon completion of joint venture.(3) BlueScope Steel owns 100% of the steel coating business and 49% to 60% of rollforming (Lysaght) businesses in Malaysia and Brunei

BSL NSSMC50% 50%

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Why did NSSMC partner with BlueScope?

• Well established manufacturing footprint including eight metal coating lines and ten paint lines (includes in-line painting facilities)

• Comprehensive network of rollforming facilities

• Established marketing capability and deep channels to market

• Well established and recognised business and product brands

• Long term in-country customer relationships

• Leading coater of steel

• Combined capability will allow for higher growth and ability to drive increased financial performance of the JV

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Growth of the Coated Products business, before creation of the JV

• Anticipated 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 OEE improvements– People, processes and systems geared for growth

• EBITDA margin improved through:– 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 bolt-on

acquisitions of consumer facing downstream businesses– Cost competitiveness through growing scale, strategic sourcing, in-line painting and yield

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Significant opportunities from this JV

• Stronger platform to capture growth in existing markets, especially Southeast Asia– On-going BSL 50% interest– Quicker ramp up to 100% utilisation of existing coating and painting capacity

• Enhancement of existing product mix to higher value products

• Potential new products, such as SuperDyma® coated steel supply to home appliances manufacturers and access to new customers (especially Japanese manufacturers in ASEAN)

• Strengthens BlueScope’s balance sheet and enhances ability to fund growth opportunities in our profitable businesses

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Evaluating the opportunities of NS BlueScope Coated Products

Initially quantified opportunities to deliver an expected US$30-75M EBITDA to the JV by FY2017 above existing business growth profile – see subsequent pages

Initially quantified opportunities

• 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 for review and quantification

• 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)

Review and quantification of benefit and costs once JV established

This initial assessment of expected merger benefits was advised in August 2012. We remain comfortable with these estimates; once the joint venture is established, detailed work to refine expected benefits will be prepared

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5%

30%

5%

10%

50%

The initially quantified growth opportunities are focused in home appliance manufacturing sector

• Availability of stable feed coil supply from NSSMC– Thailand and Steelscape

Composition of US$75M FY2017 target-case indicative earnings uplift to JV by identified opportunity

• Building & Construction steel applications– Producing and marketing SuperDyma® to

replace galvanized steel sheeting providing better yields for customers through enhanced corrosion resistance

• Bare steel to home appliance market– Producing and marketing SuperDyma® to replace

galvanized steel sheeting – Higher quality than galvanised: better surface

finish, improved corrosion resistance, more lineal metres by mass

– Locally produced – short lead times, stable supply– NSSMC manufacturing, quality control, marketing

“know how” and brand reputation

• Introduction of new products– New painted product– New profiles

• Prepainted steel to home appliance applications– Potential to introduce VIEWKOTE® prepainted steel on

a SuperDyma® base– Customer benefits of local manufacture, including

shorter lead time and market responsiveness– Future opportunity to explore the use of BSL’s in-line

painting technology to manufacture VIEWKOTE®

Source: internal BSL & NSSMC analysis

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Thailand is the key market in which initial growth opportunities are expected to be delivered

5%

15%

70%

5%

5%

Composition of US$75M FY2017 target-case indicative earnings uplift to JV by geography

114

60

103

126

566

SuperDyma® Building &

Construction

230

SuperDyma® & VIEWKOTE®

Home Appliance - Painted

1071658

90

23 7

SuperDyma® Home Appliance

- Bare

418

230

180

Estimate of FY2012 market size in which main growth opportunities will be pursued

‘000 t

onne

s

Malaysia IndonesiaVietnamThailand U.S.Source: internal BSL & NSSMC analysis

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Initially quantified opportunities arising from partnership expected to deliver US$30-75M by FY2017 above the existing business growth profile

0

10

20

30

40

50

60

70

80

FY2017

75

30

FY2016

50

FY2015

35

15 20

Indicative incremental earnings range

Indicative Incremental EBITDA to JV (100%, US$M)

Base

Target

US$M

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

Incremental US$15M capital investment expected in FY2013 and FY2014

This initial assessment of expected merger benefits was advised in August 2012. We remain comfortable with these estimates; once the joint venture is established, detailed work to refine expected benefits will be prepared

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Coated & Industrial ProductsAustralia

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Net Spread Improvement $65M

Coated & Industrial Products Australia – underlying EBIT variance analysis (1H FY2013 vs. 1H FY2012)

EBIT

A$M

-182

1H FY2013

-6

Other

+4

Exchange Rates

-1

Conversion Costs

+7

Mix

+19

Volume

+82

Raw Material Costs

+195

Domestic Prices

-72

Export Prices

-58

1H FY2012

Conversion & Other Costs:Cost improvement initiatives 20Higher unit costs on lower volumes (30)Escalation (20)One-off 1 36Other 2

Raw Material Costs:Coal 127Iron ore 102Scrap & alloys 9Net realisable value provisions (20)Coating metals 4Other (27)

Reduced volume of

loss making exports

(1) Predominantly favourable workers compensation settlement

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Coated & Industrial Products Australia – underlying EBIT variance analysis (1H FY2013 vs. 2H FY2012)

EBIT

A$M

-145

1H FY2013

-6

Other

0

Exchange Rates

+5


+68

Mix

+29

Volume

+19

Raw Material Costs

+78

Domestic Prices

-22

Export Prices

-38

2H FY2012

Net Spread Improvement $18M

Raw Material Costs:Coal 67Iron ore 49Scrap & alloys 6Net realisable value provisions (40)Opening stock adjustment (4)

Conversion & Other Costs:Cost improvement initiatives 12Volume 26Escalation (9)One-off 1 30Other 9

Reduced volume of

loss making exports

(1) Predominantly favourable workers compensation settlement

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BlueScope Steel – Key drivers of CIPA result

Notes: (1) Average of monthly Steel Business Briefing East Asia HRC US$/t CFR price.(2) Average of Platts, The Steel Index and Metal Bulletin indexes, CFR China ports, US$/t 62% Fe.(3) Does not reflect BSL’s coal price averaging arrangement for 15 months to 30 June 2010. Market quarterly ‘contract’ prices for FY2011, and market monthly Platts prices thereafter.(4) See footnotes concerning indicative Asian steelmaker spread found on page [44].(5) As for indicative steelmaker spread, but with three month lag in regional hot rolled coil price and two month lag on iron ore and coal prices.(6) Domestic & export total. Includes despatches to parties external to BSL, and despatches to other BSL divisions (eg Building Products ASEAN/NA/India, Global Building Solutions and Building Components & Distrib. Aust).(7) Total Australian external despatches from C&IPA and Building Components & Distribution segments. Excludes despatches of externally sourced products (eg long products).

2H FY10 1H FY11 2H FY11 1H FY12 2H FY12 1H FY13

East Asia HRC price1, US$/t 628 611 722 683 647 564- three month lag, A$/t 614 709 668 686 624 592

Iron ore fines index average2 145 147 178 159 142 117

Coking coal (low-vol)3, US$/wmt 165 217 278 266 218 164

Indicative steelmaker spread4, US$/t 376 252 291 260 291 273

Indicative steelmaker spread4, A$/t 420 266 283 253 282 263

Indic. spread with pricing lags5, A$/t 388 318 263 249 273 287

Average A$/US$ 0.894 0.945 1.033 1.031 1.033 1.038

End of period A$/US$ 0.850 1.017 1.069 1.013 1.003 1.037

PKSW slab production, kt 2,537 2,643 2,530 1,864 1,286 1,329

CIPA total despatches6, kt 2,495 2,375 2,453 2,110 1,435 1,248

Australian normalised desp.7, kt 1,215 1,007 1,038 1,015 990 905

Influences pricing of some categories of domestic product

Influences margins of some categories of domestic product

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992 1,032 999 991 903Domestic

Export

Dec-2012

1,248

345

Jun-2012

1,434

443

Dec-2011

2,110

1,111

Jun-2011

2,453

1,421

Dec-2010

2,375

1,383

Coated & Industrial Products Australia – Despatch Mix (kt)

Australian restructure commences: closure of No. 6 BF, MCL5 & WP

HSM during period

Volumes decline materially as

export market exit progresses

Dome

stic

Expo

rt

1H FY2013 Product Mix

Metal CoatedPainted

CRCPlateHRC

Other

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Western Port Coated Works(Hastings, Victoria, Australia)

Springhill Coated Works(Wollongong, NSW, Australia)

Port Kembla Steelworks (Wollongong, New South Wales, Australia)

Coated & Industrial Products Australia – Annual Capacities

Note:Numbers reflect mill capacity in kilotonnes(1) There is an additional 215ktpa of combined capacity at Western Sydney and Acacia Ridge (Qld) paint lines; (2) idling of MCL 5 has reduced available capacity by around 230Ktpa

Slab Casters2,600

Plate Mill450

Metal Coating Lines 8302

Cold Mill1,000

Pickle Line1,100

Paint Lines330

Pickled HRC

CRC

Painted Strip

Metal Coated Strip

Coupled Pickled Cold Mill990

Metal Coating Lines 825

Paint Lines2001

CRC

Metal Coated Strip

Painted Strip

#5 Blast Furnace2,600

Slab

Hot Strip Mill2,900

Plate

HRC

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CIPA – steel business cost components

DepreciationFreight

Raw materials

FY2012

Conversion &overhead

1H FY2013FY2011

CIPA Steel Business Underlying Cost Base(A$M)

Note:• Chart depicts total cost incurred by steel business. Excludes costs relating to other activities such as export coke sales, cold ferrous

feed to Arrium Ltd and by-products (amounting to approximately $350M in FY2011, $500M in FY2012 and $250M in 1H FY2013). In aggregate, these excluded activities make a small contribution to CIPA segment earnings

Conversion & Overhead Components (in order of size)• Direct labour• Repairs & maintenance• Sales & administration• Services & contractors• Utilities• Consumables• Other

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37833662 3610 3567

3406

3146 31713087 3123

26462,495

0

250

500

750

1,000

1,250

1,500

1,750

2,000

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 HY13

Employees Productivity (Tonnes per person per year)

Prod

uctiv

ity (C

rude

Ste

el Ou

tput

, Ton

nes/E

mpl

oyee

/Yea

r)

Port Kembla Steelworks productivity

Note:1) 2009 employees – includes 69 transfers in due to internal restructure2) 2012 employees – based on average. The reduction of employees due to restructuring started in Oct 2011

1

2

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Consumption of primary raw materials at Port Kembla Steelworks

Note: (1) coking coal volumes shown are dry tonnes; market pricing is typically for wet tonnes, 8% moisture content difference to dry tonnes.(2) measure shows tonnage rate used in steel making, and excludes coal used for export coke making.(3) 40% of scrap feed is sourced externally; balance, internally sourced scrap.

FY2008 FY2009 FY2010 FY2011 FY 2012 1H FY13 Indicative use rate per slab tonneIron Ore (Assuming 1 blast furnace running at capacity)

Fines 4.0 2.9 4.0 4.4 3.1 1.4 1.22tLump 1.6 1.0 1.5 1.8 1.1 0.5 0.22tPellets 2.3 1.6 1.5 1.3 0.5 0.0 0.07tTotal 7.9 5.5 7.0 7.5 4.7 1.9 1.51t

CoalCoking (1) 3.0 2.2 2.7 2.8 1.9 1.2 0.55tPCI 0.6 0.4 0.7 0.7 0.4 0.2 0.14tAnthracite 0.1 0.0 0.0 0.1 0.0 0.0Total 3.7 2.6 3.4 3.6 2.3 1.3 0.69t

Scrap (3) 1.0 0.7 0.9 0.9 0.5 0.3 0.16t

Raw Steel Production 5.3 3.5 4.7 5.2 3.2 1.3Export Coke Despatches 264kt 282kt 175kt 172kt 516kt 360kt

Volume consumed in production (dry Mt)

Reflects mix shift from restructure to single blast

furnace (increase sinter, reduce

pellets)(2)

Transition to single blast

furnace from Oct

440kt of coal consumed for export coke despatches

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Supply and pricing of iron ore and metallurgical coal to the Port Kembla Steelworks

Supplier Term Approximate Volume (p/a) Pricing Basis

BHP Billiton 10 years from1 July 2009 Up to 4.18Mt(1) lump & fines Linked to average monthly index in the month of

shipment

Grange Resources 31 Dec 2012 0.1Mt pellets(2) Trailing monthly index

New Zealand Steel Short term contracts 0.15Mt iron sands Linked to average index 15 days prior to shipment

Notes:1: reflects agreed reduced annual volumes post closure of No.6 Blast Furnace at Port Kembla2: Contract fully performed and now concluded.

Supplier Term Product / Approximate Volume (p/a) Pricing Basis

BHP Billiton(Illawarra Coal)

30 years from1 July 2002

Hard coking coal;minimum volume linked to blast furnace requirements

Quarterly market based pricing linked to BHP Billiton sales to contract customers

Peabody Energy Until 31 March 2014 PCI Coal; 300-400Kt(1) Agreed quarterly pricing

Various suppliers for production of export coke

Short term contracts Coking coal as required Agreed monthly & quarterly pricing

Iron

ore

Meta

llurg

ical c

oal

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$1,100

Jan-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09Jul-05

$700

$800

$900

$1,000

$600

$500

$400

$0Jan-13Jul-12Jan-12Jul-11Jan-11Jul-10Jan-10Jul-09

HRC price benchmark

• Steel Business Briefing prices continue to be a reasonable public benchmark for BlueScope’s Asian HRC sales, and an influence on domestic commoditised product pricing (noting this tends to lag by 2 to 5 months and changes over time)

SBB East Asian Hot Rolled Coil Price, CFR (US$/t)US$/t

Source: Steel Business Briefing

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Raw material costs were weaker during 1H FY2013; iron ore price has rebounded early in 2H FY2013

Iron Ore and Hard Coking Coal Prices (FOB)

Source: CRU, Platts, TSI, BlueScope Steel calculationsNote:• Indicative iron ore pricing: 62% Fe iron ore fines price assumed. Industry annual benchmark prices up to March 2010. Quarterly index average prices lagged by one quarter from April 2010 to March 2011; monthly

index average thereafter. FOB estimate deducts baltic cape index freight cost from CFR China price.• Indicative hard coking coal pricing: low-vol; FOB. Industry annual benchmark prices prior to, and including, March 2010; quarterly prices from April 2010 to March 2011; monthly average spot price thereafter.

020406080

100120140160180

0

80

160

240

320

2013201220112010200920082007200620052004200320022001

Iron ore fines price US$/t Hard coking price US$/t

Iron orefines

Hardcoking

coal

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$0

$100

$200

$300

$400

$500

$600

$700

$800

Jan-12Jan-11Jan-10Jan-09Jan-08Jan-07Jan-06Jan-05 Jan-13Jan-04Jan-03Jan-02Jan-01

East Asia HRC Price (US$/t) and Indicative Steelmaker HRC Spread (A$/t)Spread: SBB East Asia HRC price less cost of 1.5t iron ore fines and 0.71t hard coking coal

Source: SBB, CRU, Platts, TSI, Reserve Bank of Australia, BlueScope Steel calculations

Notes on calculation:• ‘Indicative steelmaker HRC spread’ representation based on simple input blend of 1.5t iron ore fines and 0.71t hard coking coal per output tonne of steel. Chart is not a specific representation of BSL realised export HRC spread (eg does not account for iron

ore blends, realised steel prices etc), but rather is shown primarily to demonstrate movements from period to period arising from the prices / currency involved. ‘Indicative spread with pricing lags’ includes three month HRC price lag and two month raw material prices lags

• Indicative iron ore pricing: 62% Fe iron ore fines price assumed. Industry annual benchmark prices up to March 2010. Quarterly index average prices lagged by one quarter from April 2010 to March 2011; 50/50 monthly/quarterly index average thereafter. FOB estimate deducts baltic cape index freight cost from CFR China price.

• Indicative hard coking coal pricing: low-vol; FOB. Industry annual benchmark prices up to March 2010; quarterly prices from April 2010 to March 2011; 50/50 monthly/quarterly pricing thereafter.

Spread (steel prices less raw material prices) continues to be a major determinant of C&IPA profitability

FY2010 FY2011 FY2012 1H FY12 2H FY12 1H FY13Indicative steelmaker HRC spread (US$/t) 365 271 276 260 291 273Indicative steelmaker HRC spread (A$/t) 414 275 267 253 282 263Indicative spread with pricing lags (A$/t) 398 290 261 249 273 287A$ / US$ FX 0.88 0.99 1.03 1.03 1.03 1.04

Indicative SteelmakerSpread (A$/t)

SBB East Asia HRC (US$/t)

Indicative spread withpricing lags (A$/t)

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Building Components & Distribution Australia

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Building Components & Distribution Australia – underlying EBIT variance analysis (1H FY2013 vs. 1H FY2012)

EBIT

A$M

-27

1H FY2013

-7

Other

+1

Exchange Rates

0


+10

Mix

0

Volume

-6

Raw Material Costs

+25

Domestic Prices

-10

Export Prices

0

1H FY2012

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-19

1H FY2013

-7

Other

+1

Conversion Costs

+7

Volume/Mix

+4

Raw Material Costs

+8

Domestic Prices

-8

2H FY2012

Gross Margin Unchanged

Building Components & Distribution Australia – underlying EBIT variance analysis (1H FY2013 vs. 2H FY2012)

EBIT

A$M

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• The Building Component & Distribution segment, effective from FY2013, brings together BlueScope Steel’s Distribution and Lysaght businesses

• The Australian solutions businesses (Buildings, Water, Ranbuild, Highline etc) are now part of the new Global Building Solutions segment

• Sheet & Coil Processing is included in the Coated & Industrial Products Australia segment

Building Components & Distribution Australia segment

Plate

Tube

Structural Steel

Merchant Bar

Reinforcing Steels

Rural Products

Pipes, Valves & Fittings

Specialty steels

Processing Services

RoofingWallingRainwater GoodsFencingHome ImprovementsStructural ProductsMobile Roll FormingSupply / Install

Hot Rolled coil

Cold Rolled strip

Plate

Stainless steel

Aluminium

Processing / Slitting/Shearing

Sheet Metal Supplies

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Sheet Metal Supplies

Building Components and Distribution Australia – presence

Sites 91Active Customers >20,000

Lysaght

KEY

Eagle Farm

DandenongSunshine

Devonport

Bomaderry

Batemans Bay

BlueScope Distribution

Ottoway

Arndell ParkEmu PlainsSmithfield

AuburnCardiff

Acacia RidgeEagle Farm (2)NorthgateOxley

Albany

Albury

ArcherfieldBiggera WatersCarole ParkChinderahWaranaRocklea

Armidale

Ballarat

Bathurst

Bendigo

Bunbury

Bundaberg

Cairns

Campbellfield

Geelong

Dandenong

Lyndhurst

Charters Towers

Coffs Harbour

DandenongGeelong (2)Westall

Darwin

Dubbo

Emerald

Esperance

Geraldton

GillmanWingfield

Gladstone

Hobart

Kalgoorlie

Launceston

Mackay

Mareeba

Mildura

Morwell

Mount Isa

Portland

Queanbeyan

Rockhampton

Roma

Tamworth

Toowoomba

Townsville

Wagga Wagga

Warrnambool

Warwick

BalcattaKewdale (3)Forrestfield

Cardiff

Site count comprises: 58 Distribution & Sheet Metal Supplies, 33 Lysaght

Chullora

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New Zealand & Pacific Islands

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Net Spread Reduction ($28M)

New Zealand and Pacific Steel Products – underlying EBIT variance analysis (1H FY2013 vs. 1H FY2012)

EBIT

A$M

+10

+5

+34

Raw Material Costs

Domestic Prices

-9

Export Prices

-24

1H FY2012

-10

1H FY2013

+2

Other

-2

Exchange Rates

Conversion Costs

-2

Mix

0

Volume

Impact of lower global steel prices and NZD/USD exchange rate (influencing both domestic and export prices), combined with fixed cost of iron sands extraction. Partly offset by coating metal purchase prices

Non-recurring higher conversion costs impacted by unfavourable scrap and vanadium credits partly offset by lower electricity rates

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Net Spread Reduction $30M

New Zealand and Pacific Steel Products – underlying EBIT variance analysis (1H FY2013 vs. 2H FY2012)

EBIT

A$M

+9

+35

+2

OtherExchange Rates

+1


-10

Mix

0

VolumeRaw Material Costs

-7

Domestic Prices

-4

Export Prices

-19

2H FY2012

-3

1H FY2013

Impact of lower global steel prices (combined with fixed cost of iron sands extraction) and higher inventory net realisable value provisions

Non-recurring higher conversion costs impacted by unfavourable scrap and vanadium credits partly offset by lower electricity rates and slab volumes

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New Zealand Steel – unique direct reduction process using captive iron sands resource

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New Zealand – 1H FY2013 product distribution (external and internal)

Indicative Product Mix(volume)

Indicative Sales by End Use Segment / Market (volume)

5%9%

31%

18%

8%29%

Hot rolled

Metal coated

Plate

Cold rolled

PaintedPipe

20%Export 54%

Manufacturing4%

Building & Construction

Distribution22%

Main export markets:• Australia• North America

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Iron Sand Concentrate (Waikato North Head Mine) Iron sand mined and concentrated on site – 58.5% Fe Sufficient resource for long term steel making operations Concentrate is slurry pumped 18km underground to

Glenbrook

Thermal Coal Predominantly sourced from Solid Energy in NZ Approximately 0.8Mt transported by rail to Glenbrook each

year

Lime (McDonalds Lime - 28% NZS owned) 34Ktpa lime (oxide and chip) quarried and processed at

Otorohanga Railed and trucked to Glenbrook

New Zealand – raw materials fed into steelmakingF

or p

erso

nal u

se o

nly

New Zealand – non-steel product sales

Iron Sands Exports Taharoa (57% Fe) and Waikato North Head (58.5% Fe)

iron sands mined and concentrated on site Taharoa concentrate is slurry pumped to a buoy 3km

offshore to a dedicated slurry vessel and shipped to China and Japan

Volume despatched in 1H FY2013 of 831kt. This was higher than the 466kt despatched in 1H FY2012 due to: Operation of larger vessel Despatches from Waikato North Head 125kt despatched to BlueScope’s Port Kembla Steelworks

Expansion is on track to deliver a 2.7Mtpa despatch rate from the beginning of CY2014

831674

466352

467460467351351

461415

2H FY091H FY092H FY081H FY08 1H FY132H FY121H FY122H FY111H FY112H FY101H FY10

Iron sands export volumes (kt)

Ferrous Scrap Volumes: 1H FY2013 24kt vs. 1H FY2012 18kt

Iron & Steelmaking Slags Volumes: 1H FY2013 94kt vs. 1H FY2012 48kt. Challenging construction environment within New

Zealand, plus delay of some projects.

Vanadium Slag Vanadium production was up 3% on 1H FY2012 due to

increased steel production and process improvement initiatives.

1H FY2013 sales contained V2O5 at 2.32m lbs vs 1H FY2012 2.04m lbs

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Once Taharoa 2.4 Mtpa iron sands export rate achieved, BlueScope will be 55% economically hedged for iron ore, on a value-in-use basis

45%55%

85%

15%

Before CIPA Restructure, combined with 0.8 Mtpa iron sands exports

(9.2 Mtpa usage rate, including NZ)

Unhedged portion of purchasesEconomically hedged

Post CIPA Restructure, combined with expected 2.4 Mtpa iron sands exports from Taharoa, and exports

from Waikato North Head(5.0 Mtpa usage rate, including NZS)

Portion of iron ore consumption economically hedged1 within BlueScope

60%

40%

Post CIPA Restructure, combined with expected 1.2 Mtpa iron sands exports from Taharoa, and exports

from Waikato North Head(5.0 Mtpa usage rate, including NZS)

Note: 1) Based on current market pricing ratio of iron ore fines to iron sands

2011 Today FY2014 Expected

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Other

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Global Steel market supply/demand dynamics changed since GFC. Developed world starting to see supply-side constraint; needs demand improvement

73

78

69

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

105%

110%

115%

Jan 13

85%

Jan 00 Jan 01 Jan 02 Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12

World (Excl China)ChinaWorld

Monthly Crude Steel Capacity Utilisation1 (%)

- Source: WSA- Data to December 2012

• Demand in developed economies remains soft

• Strong growth in developing economies expected to continue

• Blast furnace idling continues in Europe

• Chinese steel industry profitability appears marginal

Global steel capacity utilisation needs to return to sustained levels of around 85% for steel spread to improve and stabilise

Note: (1) Crude steel capacity utilisation is calculated based on the WSA 66 reporting countries, representing approx 96% of global crude steel capacity; at 85% pricing power may shift towards steelmaker

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Calendar year earnings

A$ Millions CY03 CY04 3 CY05 CY06 CY07 CY08 4 CY09 CY10 CY11 CY12

Revenue 1 5,330 7,029 7,976 8,667 9,119 11,917 8,276 9,134 9,161 7,787

Reported EBITDA2 857 1,501 1,411 1,051 1,131 1,775 (323) 563 (1,084) (15)

EBIT 2

- reported 581 1,212 1,111 742 792 1,400 (673) 215 (1,430) (338)

- underlying 5 - - 1,308 951 925 1,516 (615) 234 (200) (49)

Net profit

- reported 437 859 792 414 414 887 (501) 99 (1,529) (526)

- underlying 5 - - 944 572 564 972 (489) 115 (213) (91)

Notes:(1) Excludes revenue of equity accounted associates, e.g. North Star.(2) Includes share of North Star’s equity accounted net profit before tax and share of other associates’ NPAT. (3) Includes eight months of BlueScope Butler financial results.(4) Includes eleven months of Smorgon Distribution financial results and five months of IMSA Steel financial results.(5) Adjusted for divestment of Metl-Span

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Dividend history (adjusted for 1-for-6 share consolidation, and bonus elements of 2009 and 2011 entitlement offers)

37 4973 82 86 90

020 0Interim

Final

Special

1H FY13FY2012

0 0

FY2011

10

FY2010

25

FY2009FY2008

110

FY2007

106

FY2006

98

FY2005

98

82

FY2004

73

41

FY2003

53

29

Note: shows dividends per share, adjusted for December 2012 share consolidation, and to reflect deemed 'bonus component' of the May 2009 and November 2011 entitlement offers. Detail on dividends paid (on the prevailing share base of the time) available at www.bluescopesteel.com/investors

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Underlying Corporate and Group Costs – impacted each half by profit in stock elimination and foreign exchange movements

-30

-66

-39

-27

-51

-35

-16

A$M

FY122H FY121H FY12FY112H FY111H FY11 1H FY13

(37) (33) (70) (33) (38) (70) (30)

18 (2) 16 5 (1) 4 -

3 - 3 1 - 1 -

- - - - - - -

(16) (35) (51) (27) (39) (66) (30)

Comprised of:

Corporate Costs

Profit in stock adj

FX

Other

Total (EBIT)

EBIT

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Committed DrawnMaturity Local currency A$M A$M

Syndicated Bank FacilityTranche 1 December 2013 A$675M A$675M A$350M Tranche 2 December 2015 A$675M A$675M -

2004 U.S. Private Placement NotesSeries B July 2014 US$74M A$71M A$71M

2008 U.S. Private Placement NotesSeries A June 2015 US$5M A$5M A$5M Series B June 2018 US$31M A$30M A$30M

Other facilitiesThailand subsidiary loan Various THB 2,500M A$79M -Malaysia subsidiary loan Various MYR 65M A$20M -Finance leases Various Various A$132M A$132M Total $1,687M A$588M

Committed debt facilities as at 31 December 2012

Note: assumes AUD/USD at 1.0374

In addition to debt facilities, BSL has a receivables securitisation program of $150M maturing September 2014 ($93M drawn at 31 Dec 2012) and other items in total debt of $11M

In re-sizing our finance facilities and to reduce costs, upon completion of the Coated Products JV the A$675M December 2013 Syndicated Bank Facility tranche commitment will be reduced by A$450M to A$225M

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1H FY2013 Financial ResultsSupporting Information

18 February 2013

BlueScope Steel Limited. ASX Code: BSL

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for personal use only · reliance should not be placed on information or opinions contained in this...

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