fy2007 results presentation period ended 30 june 2007€¦ · fy2007 results presentation period...

FY2007 Results Presentation Period Ended 30 June 2007Kirby Adams, Managing Director and Chief Executive OfficerPaul O’Malley, Chief Financial Officer 30 June 2007

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.

July 2002 to August 2007….

Dynamic Global Steel

Market


Market

Geographic and Product

Diversity


Diversity

Strong Board & Management

Team


Team

Growth Opportunities in

Asia


Asia

Low Cost Producer

Low Cost Producer

Strong and Flexible Capital

Structure


Structure

Profitable Through the

Cycle


Cycle

Consistently Strong Cash

Flows


Flows

Strong Operating

Track Record

Strong Operating

Track Record

Value Added Branded Products


A VERY DIFFERENT KIND OF STEEL

COMPANY

3.54.1

3.52.8

1.8 1.50.9 0.8 0.4

4.8

8.0

14

16

0

2

4

6

8

10

12

14

16

18

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Lost

time i

njurie

s per

milli

on m

an-h

ours

worke

d

Includes Contractor performance from 1996Includes Butler performance from May 2004

Medically Treated Injury Frequency RateLost Time Injury Frequency Rate

8.0 9.36.4

1217

2222

29

9.46.5

47

52

60

0

10

20

30

40

50

60

70

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Medic

ally t

reate

d inju

ries p

er m

illion

man

-hou

rs wo

rked


Reported performance for IISI member companies (employees & contractors)

NSW Manufacturing 27.9 in 2005

Zero harm is our goal for our team and communities

18,046 Employees, 91 manufacturing sites, 17 countries

Group financial headlines FY2007 vs. FY2006

Twelve months ended 30 June Variance2007 2006 %

Revenue A$8,913M A$8,031M Up 11% External despatches 7.621M tonnes 7.559M tonnes Up 1%EBITDA A$1,423M A$850M Up 67%

EBIT A$1,099M A$556M Up 98%

NPAT -

Reported A$686M A$338M Up 103%EPS- Reported- Underlying Operational

95¢89 ¢

48¢79¢

Up 99%Up 12%

After Tax Return on Invested Capital 14.9% 8.5% Up 75%

After Tax Return on Equity 20.3% 10.4% Up 94%

Net Operating Cashflow

-

From operating activities A$1,343M A$803M Up 67%-

After capex

/ investments A$802M A$(130)M Up 717%

Dividend-Final ordinary (fully franked)-Total ordinary (fully franked)

26cps47cps

24cps44cps

Up 8%Up 7%

Gearing (net debt) 28% 38% Below 30-35% target range

Across the board improvements

Cashflow

–

very strong leading to lower debt/gearing

A$M FY2003 FY2006 FY2007

Source

Cashflow

from operations 795 903 1,364

Working capital movement (31) (100) (21)

Net cash from operations 764 803 1,343

Proceeds from Asset Sales 44 23 265

Proceeds from Share Issues - 1 221808 827 1,829

Application

Capital Expenditure (165) (816) (493)Smorgon

Steel shareholding (19.9%) - - (319)

Statutory (tax) (29) (356) (229)

Returned to shareholders (101) (552) (321)Net Funding (512) 872 (498)

(807) (852) (1, 860)

Closing cash increase / (decrease) 1 (25) (31)

First full year of operations after listing

Very strong operations performance (72% up on FY

2003)

Working capital improvement initiatives continue to pay off

Greenfield capex

program slowing

Principally proceeds from the sale of Vistawall

Debt reduction reduces gearing 38% to 28%

Continuing to reward our shareholders as we grow

Share Buybacks – Public listing to 30 June 2007Purchased and cancelled 116m shares−

on market –

90m shares−

off market –

26m sharesAverage price paid $6.10 per share

Shares on issueAs at 30 June 2007 733.8 million

Dividend reinvestment schemeEffective from and including final FY2006 ordinary dividend

Dividends – All fully franked (ordinary / special)

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

Share buybacks $ 707mDividends paid $ 1,430mFinal dividend (to be paid 23 Oct 07) $ 191m

$ 2,328m

$3.15 per share or 77% payout ratio (NPAT)

18

24

7 1020 2120

9 1218

2624

13

05

101520253035404550

Interim Final Special

FY2003 FY2004 FY2005 FY2006 FY2007

22 / 7¢

30 / 10¢

42 / 20¢ 44 / 0¢47 / 0¢

15%

35%

4%

11%

9%

10%

16%

15%

43%4%

10%

17%

4%7%

Exports -

Americas

Exports -

Asia

Exports –

Europe/Med/Middle East/India Australia

NA (HRPNA + C&BPNA) New Zealand/Pacific

Asia

ExternalDespatches

Key

Record sales volumes, driven by strong demand for BlueScope’s products

Domestic sales (produced and sold within country)

Record

Exports28%

15%

32%

4%

14%

6%

21%

8%

FY2007

Exports36%

Australia

NZ

Asia

Exports - Americas

Exports Europe/Med/ME/India

Exports -

Asia

Exports41%

7.159MT 7.559MT 7.621MT

FY2005 FY2006

NorthAmerica

+10%

Sales Tonnes

Construction59%

57%

FY2006 FY2007

Non-dwelling 25%(0.657)

Dwelling 22%(0.578)

Engineering 12%

Manufacturing 14%

Agriculture & Mining 13%

Auto & Transport 8%Packaging 6%(1)

Non-dwelling 23%(0.547)

Dwelling 22%(0.523)

Engineering 12%

Manufacturing 15%


Packaging 6%Auto & Transport 11%

Desp

atch

es ‘0

00 to

nnes

500

1,000

1,500

2,000

2,500

3,000

Sales into Australian market increase 10% and 250,000 tonnes

Despatches 2.380mt 2.629mt

Note: (1) Closed the tinplate business in April 2007

Construction demand for BlueScope’s products remains strong.

Stronger A$ a concern in terns of increased imports

Automative and manufacturing sectors continue to have issues.

Smorgon, distribution will further enhance our position from FY2008.

400

500

600

700

800

900

1000

1100

1200

1300

Full year June2006

Export Prices DomesticPrices

Volume / Mix NSBSL Conversion &Other Costs

Raw MaterialCosts

ExchangeRates

Other Full year June2007

EBIT variance FY2006 to FY2007 by itemEB

IT A

$ Milli

ons

Raw material costs PKSW (143) Coating metal costs (140)External Steel Feed

-

Asia (73) -

USA(2) ANZ (7)

(9)

Higher export slab and HRC prices

Recovery from Western Port fire and

increased Asian despatches

Asset Sales -

Vistawall

59-

Other (2)Tinplate closure 142Redundancy provision 41Smorgon dividends 29Other 8

$556

m

$439m

$1,099m

($365m)

$76m

$277m

($44m)

($13m)$207m

($34m)

• Productivity initiatives 109• Cost escalation (127)• Freight (28)• Other 12

400

500

600

700

800

900

1000

1100

1200

Full year June2006

Hot RolledProductsAustralia

Coated & BldgProducts Aust

NZ & PacificSteel Products

Coated & BldgProducts Asia

Hot RolledProducts Nth

America

Coated & BldgProducts Nth

Am

Corporate &Group

DiscontinuedBusinesses

Full year June2007

-

Reporting SegmentReporting SegmentPerformancePerformance

Upstream BusinessesUpstream BusinessesHot Rolled Products AustraliaHot Rolled Products Australia

Hot Rolled Products North AmericaHot Rolled Products North America

1149

438321

759

456

0100200300400500600700800900

10001100

FY05 FY06 FY07 1H FY07 2H FY07

Hot Rolled Products Australia (PKSW) –

outstanding operational strength continues to meet strong demand

Performance - FY2007 vs. FY2006

Higher export slab and domestic sales pricesStronger domestic demand and market shareRicher product mix (higher HRC sales)

Partly offset by higher US$ raw material feed costs and higher freight and discretionary repairs & maintenance costs

Record annual iron make, slab, HRC and plate productionBFNo.5 reline rescheduled to March 2009$134M sinter plant upgrade approved (reduce pellet/increase fines)Cogeneration feasibility study commenced.

FY2007 return on net assets (pre-tax) 41%

EBIT

A$ M

illion

s

PKSW sales revenue up 13% to A$3,919m

MarketsDomestic demand improves, with despatches up 22%

Hot rolled coil (HRC) sales to pipe and tube― Strong engineering and non-residential construction

Plate― Increased project activity

Exports down 25% on FY 06High in 06 due to Western Port fire (+300kt slab)Mix change –HRC exports up / slab down due to increased HRC capacity

Port Kembla

Steelworks despatches –

richer product sales mix and stronger domestic demand

External Product Sales Mix

Slab 44% 48% 30%HRC 41% 39% 54%Plate/Other 15% 13% 16%

0500

10001500200025003000350040004500500055006000

2005 2006 2007 2007 PFInternal Customers Domestic Customers Exports Customers *

(kto

nnes

)

5,2105,2684,922

51% 44% 51%

21% 16%19%

30%40%28%

* Including BlueScope Steel Asia feed

** Proforma

profile includes sales to Smorgon

Steel Distribution

100% exported, with geographic sales split

Asia 48%

USA 48%

Other 4%

45% sold domestically and 55% exported, with geographic split being:

Asia 44%USA 40%Other 16%

5,210

54%

16%

30%

**

Hot Rolled Products North America –

another outstanding operational performance

MarketsContinued strong demand for BlueScope’s products in North America and Europe.

Performance- FY2007vs. FY2006

North Star BlueScope−

8% EBIT reduction largely due to lower HRC to scrap spread in A$ terms (higher in US$) and higher electricity costs

−

Steel production largely unchanged−

Voted No.1 Jacobson Survey (fifth year in a row)−

Paid US$115M dividends to BlueScope−

Improved operational performance will result in capacity creep in FY 2008

Trading offices−

Product sold to−

Americas (1.1m tonnes)−

Europe (0.4m tonnes)−

USA removed dumping duties on corrosion resistant sheet from Australia

Castrip−

Nucor continues to make very good progress−

Nucor started the construction of a second plant at Blythesville, Arkansas.

199 188

112

68

180

0

20

40

60

80

100

120

140

160

180

200

FY05 FY06 FY07-1H FY07-2H FY07

EBIT

A$ M

illion

s

This segment includes:North Star BlueScope Steel (50% interest)Castrip LLC and North American and European sales offices

FY2007Sales revenue of A$566M (sales offices), up 13%, and A$722M (North Star), up 1%Return on net assets (pre-tax) 67%

New Zealand SteelNew Zealand Steel

New Zealand and Pacific Islands Products –

higher zinc costs and unfavourable NZ$/US$ exchange rate flatten earnings


Performance –FY2007vs. FY2006

EBIT down due to―Higher zinc costs―Unfavourable NZ$/US$ exchange rate

Making good advances on resolving steelmakereliability issues.Slab production flat but annualised 4Q was over 600ktStudies into additional vanadium extraction and iron sands sales continue.New annual metal coating and paint line production records.

189

105

43 47

90

0

25

50

75

100

125

150

175

200


EBIT

A$ M

illion

s

Sales revenue up 3% to A$728M MarketsDomestic despatches up 9% largely due to stronger construction marketConsequently, exports sales lower.

Midstream & Downstream BusinessMidstream & Downstream BusinessCoated & Building Products AustraliaCoated & Building Products Australia

Coated & Building Products North AmericaCoated & Building Products North AmericaCoated & Building Products AsiaCoated & Building Products Asia

Coated and Building Products Australia –

improved operational performance but stronger A$ and higher metal coating costs effect earnings


Improved performance was largely due to Increased despatches (record despatches to building market)Higher pricesFY 2006 Western Port fire variance (higher sales and lower costs in FY 2007)

Partly offset byHigher metal coating costs ($95m)Adverse destination mix change principally in the second half, with increased exports (next slide)Higher steel feed costs

Record annual metal coated and painted production West Sydney Colorbond® facility commissioned in August 2007.Water – after 3 years our water business is profitable with FY2007 turnover of approx $50M. Research and development spend up $12M on FY 2006.

2

-3

4941

-8-15

0

15

30

45

60


EBIT

A$ M

illion

s

Sales revenue up 15% to A$3,186M

FY 2007 return on net assets (pre-tax) 3% Tin plate operations ceased April 2007. Not reflected in this analysis. Now treated as a “Discontinued Business”.

-50

-25

0

25

50

75

100

Half yearended Dec

2006 Export PricesDomestic

Prices VolumeRaw Material

Costs MixExchange

RatesConversion &

Oth Costs Other One-offs

Half yearended June

2007

-


Second half vs

First half FY 2007

Performance – (2nd vs 1st half)Increased production, but stronger A$ and increased import competition led to

significantly higher export sales (+265kt) of products at lower end of value range.

EBIT

A$ M

illion

s

$49m$12m

($8m)($7m)

$17m

($72m)

$5m

($4m)

$3m

($11m)

Steel feel costs 12Coating Metals (7)

Higher Exports (72)

Coated and Building Products North America (Butler Buildings) – downstream success in North America continues

Markets (100% sales to non-residential)Non-residential construction was flat against a declining residential market


Improved result largely due to higher margins, through−

improved plant efficiencies−

lower conversion costs−

resolution of Jackson plant start up issues Total despatches up 1% on FY 2006

BUCON (Butler Construction) revenue was down due to drop off in WalMart distribution actively.

-33

9

2314

37

-40

-30

-20

-10

0

10

20

30

40


EBIT

A$ M

illion

s

Sales revenue down 6% to A$788MFY2007 return on net assets (pre-tax) 50%

Note:

The Vistawall

business was sold on 29 June 2007 for US$190M. Its financials are not included in this analysis but included under “Discontinued Business” in FY 2007 Accounts. Butler Manufacturing was acquired April 2004 for US$206M (after allowance for cash).

Coated and Building Products Asia –

improved earnings but mixed result


MarketsThailand – coup led to depressed local market conditions, leading to more exports. China – very competitive market with tight spreadsVietnam – intense competition and unfavourable tariff Indonesia – strong demand continuesMalaysia – record domestic despatches.


Improved segment earnings due to:―higher prices―higher volumes― lower business development and pre-operating

costs―partly offset by higher unit costs as the new facilities

ramp-up, higher zinc and steel feed costs and higher depreciation on the new facilities

Total despatches up 32%Country review (next slide)−

Established −

Start-up.

79

1911

4231

0

20

40

60

80

100


EBIT

A$ M

illion

s

Sales revenue up 32% to A$1,387M as greenfield plants start to produce and despatch


Established Asian business performance continues to improve –

absence of Chinese coating margins is an issue

-50-40-30-20-10

0102030405060708090

100

Full year June2006

EstablishedAsia

Businesses

Vietnam China India Full year June2007

ASIAN EBIT Contribution by country in FY 2007

$19m

$77m

$42m

($5m)($3m)

($27m)

Established Asia Businesses include:-

Thailand-

Malaysia-

Indonesia-

Trading offices- Asia HO

EBIT

A$ M

illion

s

Start-up Businesses


excellent growth and outstanding operations performance but mixed EBIT outcomes

Established BusinessesThailand - “coup stalls strong recovery”

―

Political uncertainty continues with elections now expected Dec 07

―

Increased exports, including to India and Europe

―

Very strong operations performance –

MCL No. 2 at nameplate capacity after 18 months.

Indonesia – “fully loaded domestically”―

Strong domestic market―

Operating at capacity. Sourcing product from other BSL operations.

―

Work on MCL No.2 recommenced

Malaysia – “strong turnaround continues”―

Good domestic demand―

Resumption of exports―

Improved coating yields

Start-up BusinessesVietnam – “overcoming challenges”

―

Big improvement in operations performance in 2H―

Intense competition and unfavourable tariffs―

Initiatives being implemented –

to improve yields, reduce costs and grow markets

―

Coating business breakeven in first operating year

China – “coating market in China is low margin”―

Coating market –

reduced spread (cold rolled to selling price) is the issue

―

Implementing sales initiatives (based on major market study)

―

Operations –

running ahead of schedule

India – “strong buildings demand at Tata BlueScope”―

3 downstream PEB / rollforming

facilities operating ahead of schedule

―

Strong PEB sales―

Coating development progressing with equipment being ordered and construction commenced.

FY06 FY07 Variance FY06 FY07 Variance

Revenue: $685M

$860M + $175M

$393M

$529M +

$136M

EBIT: $52M

$81M

+ $29M

$(29M)

$(35M) ($6M)Note: At the Coated and Building Products Asia segment level, sales revenue and EBIT eliminates sales revenue and profit in stock (EBIT) for transactions within “established”

and “start-up”

businesses

0

20

40

60

80

100

120

Arcelor +

Mittal

Nipp

on Stee

l

JFE

POSC

O

Corus +

Tata

Baos

teel

US Stee

l

Nuco

r

Severstal

Thyssen Kr

upp

Evraz

Gerdau

Wuh

an

ChinaS

teel

Maan

shan

Blue

Scop

e

SSAB

+ Ip

sco

CSN

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Crude Steel Production (MT)

Revenue (US$m)

0

200

400

600

800

1,000

1,200

1,400

1950 1970 1990 2010

6.0%

3.1%

0.9%

6.8%

Japan: 6.9% World Ex-Japan: 1.8% (1965-1980)

USSR: -2.0% World Ex -

USSR: 1.4% (1980-2000)

1960 1980 2000

China: 20.9% World Ex-

China: 2.5% (2000-2007)

Compound Annual Growth Rates

IndustryConsolidation

Global Steel IndustryGlobal Steel Industry

Global steel industry –

our long term view has not changed

CHINARaw material, energy and internal transport costs reducing relative competitiveness of ChinaSteel reform initiatives evident with more promisedUnderlying demand in China is strongLonger term - steel to progressively displace other building materialsSteel export growth occurringHyper-competitive internal market

Global steel industry consolidation accelerating

REST OF WORLD Global economic growth remains strong

Japan – record steel production likely in 2007 stoked by domestic demandRussia – strong economy limits exportsUSA – strong North American economy―World Trade case against China

Middle East and Europe – strong demandContinued production disciplineIndia – growing steel requirementsIncreased alliance activityIncrease in steel industry mining activity

0

20

40

60

80

100

120Ar

celo

r + M

ittal

Nipp

on S

teel

JFE

POSC

O

Coru

s + T

ata

Baos

teel

US S

teel

Nuco

r

Seve

rstal

Thys

sen

Krup

p

Evra

z

Gerd

au

Wuh

an

Chin

aStee

l

Maan

shan

Blue

Scop

e

SSAB

+ Ip

sco

CSN

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Crude Steel Production (MT)

Revenue (US$m)

Most companies shown announced intention to acquire or formed alliancesWhat will happen next?

Global steel industry consolidation increases pace

Europe / Americas

Europe / Asia

Asia

Australia, Asia, Americas

Europe

Americas

Note: Above analysis completed for calendar year 2006

Sources: IISI, company reports

0

200

400

600

800

1,000

1,200

1,400

1950 1970 1990 2010

Millio

n To

nnes

6.0%

3.1%

0.9%

6.8%

Crude steel production, 1950 - 2007 (Compound Annual Growth Rates, %)

Source: IISI, BSL

Japan: 6.9% World Ex-

Japan: 1.8% (1965-1980)

USSR: -2.0% World Ex -

USSR: 1.4% (1980-2000)

China has driven production growth since 2000

1960 1980 2000

China: 20.9% World Ex-

China: 2.5% (2000-2007)

Smorgon Steel Smorgon Steel Distribution Acquisition Distribution Acquisition

Transaction details:1.

BlueScope has formally acquired Smorgon’s

metal distribution business (SSD) for

A$700million with effect from 3 August 2007. Net Cost $610M

2.

OneSteel

has acquired all Smorgon

Steel shares on issue (excluding the 179,124,278 shares currently owned by BlueScope)

3.

OneSteel

acquired all of BlueScope’s holding of Smorgon

Steel shares for a cash price approximately equivalent to the value payable to Smorgon

Steel’s other

shareholders under the Scheme, namely for $447M vs

$319m paid in August 06

4.

BlueScope will be responsible for the acquisition and re-supply of scrap metal for OneSteel’s

Sydney steel mill, itself and others

Acquisition of Smorgon

Steel’s distribution business

Overview of Smorgon Steel’s distribution business

Australia’s second largest distributor of steel and metal products (flat and long)

Smorgon Steel Distribution has:LTIFR performance of 3.8 (injuries per million hours worked)In FY 06 sold approximately 850,000 of steelAround 12,000 active customers 1,800 employees in 92 distribution outlets nationally Developed international export markets for some products Market share of approximately 35%.

Acquisition of Smorgon Steel’s distribution business

Strategic rationaleBrings BlueScope closer to its end customers, consistent with our downstream strategyIncreases ability to serve customers through a broader combined distribution network and product range including flat products, pipe and tube and other long productsImproved efficiencies through linking with the BlueScope flat products supply chain

Financial Effect on BlueScope The financials are per the OneSteel/Smorgon Steel announcements of June 26 and December 18 2006, and reflect a stand-alone listed distribution company. These numbers will not be the same under BlueScope Steel ownership but provide an order of magnitude indication:

Revenue ~A$1,400m (need to reduce by BSL intersegment sales) EBITDA ~A$80m Also expect value add benefit to the Group of $15-20M of EBITDA through synergies and improved efficiencies mostly captured in years 2 and 3. First year’s benefit to be largely offset by integration costs.

We are intending to report as part of Coated and Building Products Australia.

BlueScope SteelBlueScope Steel’’ssFinancial ResultsFinancial Results

Earnings performance leveraged to better mix and steel price spreads.

(1)

Includes EBITDA & EBIT for North Star BlueScope Steel but not revenue, which was A$156M (FY 2007) vs. A$169M (FY 2006)

(2)

Includes two months of BlueScope Butler financial results.(3)

Operating numbers represent Reported numbers adjusted for unusual or non-recurring events to reflect underlying financial performance from ongoing operations

A$ Millions FY2003 FY2004 (2)

FY2005 FY2006 FY2007 2007-1H 2007-2H

Revenue 5,302 5,770 7,964 8,031 8,913 4,520 4,393

EBITDA (1) 881 1,104 1,655 850 1,423 794 629

EBIT (1) –

Reported 611 818 1,358 556 1,099 635 464

EBIT (1)

–

Operating (3) 1,559 840 1,057 627 430

NPAT -

Reported 452 584 982 338 686 388 298

NPAT –

Operating (3) 1,129 555 643 385 258

EPS (cps) -

Reported 57.1 77.8 134.0 47.9 95.3 54.7 40.6

EPS (cps) –

Operating (3) 154.0 78.8 89.3 54.3 35.0

900

950

1000

1050

1100

1150

1200

1250

ReportedResult

DiscontinuedBusiness -Packaging

PackagingStandalone

Losses

Op Lossesfrom

businesses tobe closed

DiscontinuedBusiness -

Taiwan

DiscontinuedBusiness -Vistawall

RestructureCosts

Grow thActivity

Asset Sales UnderlyingResults

Underlying FY2007 BlueScope financial performance

EBIT$M

NPAT$M

EPScps

Reported Result 1,099 686 95.3

One-off adjustments (42) (43) (6.0)

Underlying Result 1,057 643 89.3

($AM)

EBIT NPAT

Discontinued BusinessesPackaging Taiwan Vistawall

(9)17

(86)

(7)17

(40)

Packaging Standalone losses 62 43

Operating results from businesses to be discontinued

Packaging Products (34) (23)

Growth Activity Business development & pre-

operating activities 20 18

Other Staff downsizing Asset Sales Tax Adjustment

(5)(7)0

(3)(5)

(43)

(42) (43)

EBIT

$M

Other unusual and one-off items include:

$1,099m

$62m

$1,057m

($86m) ($7m)($5m)

$17m

($9m) $20m($34m)

PKSW (exp v domestic) (27) Other (7)

PackagingFY07 result (53)Closure costs (9)

Erksine

Park, NSW

India 5China 5West Sydney 7Other

3

400

500

600

700

800

900

1000

1100

1200

Full year June2006

Hot RolledProductsAustralia

Coated & BldgProducts Aust

NZ & PacificSteel Products

Coated & BldgProducts Asia

Hot RolledProducts Nth

America

Coated & BldgProducts Nth

Am

Corporate &Group

DiscontinuedBusinesses

Full year June2007

-

EBIT

A$ M

illion

s

EBIT MovementsFrom FY2006 $456M ($3M) $105M $19M $188M $9M $(21)M $(197)M

To FY2007 $759M $41M $90M $42M $180M $37M $(66)M $16M

Due to: •

Higher export steel prices

•

Higher domestic volumes

•

Higher sales vols

•

Higher zinc costs

•

Improved operations

•

Increased export sales

•

Higher prices

•

Higher zinc costs

•

Exchange rate (NZ$ vs

US$)

•

Higher sales vols

•

Higher domestic prices

•

Higher steel feed & coated costs

•

Improved spread (North Star) in US$ (but lower in A$)

•

Higher vols

for trading office sales

•

Sales prices more than recover feed costs

•

Improved productivity

•

Unfavour

able PISE

•

SSX dividend

•

Taiwan closure •

Tinplate closure•

Vistawall

sale

FY2007 Sales Revenue

•

$3,919M+13%

•

$3,186M+15%

•

$728M+3%

•

$1,387M+32%

•

$566M(inc. NSBSS)

+13%

•

$788M(6%)

EBIT variance FY2006 to FY2007 by reporting business segment

$556m

$302m

$1099m$213m

$44m

($7m) ($45m)

$23m

($15m)

$28m

All BlueScope business segments profitable

As at A$ Millions 31 December 2006 30 June 2007

Assets Cash 58 36 Receivables 1,207 1,269 Inventory 1,409 1,271 Other Assets 1,143(1) 1,259(1) Net Fixed Assets 3,736 3,671

Total Assets 7,553 7,506

Liabilities Creditors 833 881 Interest Bearing Liabilities 1,983 1,538 Provisions & other Liabilities 1,249 1,222 Total Liabilities 4,065 3,641

Net Assets 3,488 3,865

Balance sheet –

working capital reductions and lower gearing improve financial flexibility

Net Debt / (Net Debt + Equity) 35.6% 28.0%(1) Includes BlueScope’s 19.9% shareholding in Smorgon

Steel

Sales up 11% with total

receivables & inventory flat

Debt down even with

Smorgon

19.9% ($319M)

Now below target gearing

30-35%

Cash –

return of strong cash flows

(1)

Purchased 19.9% shareholding in Smorgon

Steel (2)

Reflects shares issued under the shareholder dividend reinvestment plan ($97M) the full underwriting of the FY2006 final ordinary dividend ($119M) and employee share plan ($5M).(3)

Reflects capital injection by minority interests in subsidiaries.(4)

All periods normalised to reflect sale of receivables program cash flow movements as debt.

A$ millions 2003 2004 2005 2006 2007 2007-1H 2007-2HCash from operations 795 1,012 1,671 903 1,364 752 612

Working Capital Movement (31) (94) (432) (100) (21) (55) 34Net operating cash flow 764 918 1,239 803 1,343 697 646Net investing cash flows- Capital & investment

expenditure(209) (585) (663) (816) (493) (283) (210)

-

Smorgon

shareholding(1) - - - - (319) (319) _

-

Other 44 7 41 23 271 38 233Net cash flow before

financing & tax599 340 617 10 802 133 669

Net financing cash flow (468) 309 348 870 (506) (23) (483)Payment of income tax (29) (119) (312) (356) (229) (126) (103)Share buy-back (26) (259) (327) (96) -Share issues (2) - - - - 221 168 53Dividends- Ordinary (75) (191) (273) (314) (321) (169) (152)

- Special - (53) (75) (142) - - -Other (3) - - - 2 2 2 -Net increase in cash held 1 27 (22) (25) (31) (15) (16)

Major project capital and investment spending profile

PROJECTSAll in A$million

Total Est. Capex / Cost

Actual to 30/6/06

Actual FY2007 FY2008 FY2009 FY2010

Projects completedThailand –

Coating expansion 80 80 - - - -

Vietnam –

Coating / Painting 136 136 - - - -

China

-

Coating and Painting Facility-

Guangzhou Butler / Lysaght 27433

26431

102

--

--

--

India -

Butler / Lysaght facilities (50% interest) 44 32 9 3 - -AustraliaPort Kembla (PKSW) - HSM expansion

- Sinter Plant EmissionsWA Service Centre

10210021

999521

35-

---

---

---

Western Sydney Colorbond® 150 95 52 3 - -

Projects to be completed

India -

Coating / Painting (50% interest) 135 - 5 82 39 9

Indonesia –

Coating / Painting 134 14 - 71 43 6

PKSW –

Blast Furnace No. 5 Reline –

Sinter plant upgrade 330134

562

509

5150

16871

52

INVESTMENTSSmorgon Steel’s Distribution businessButler ManufacturingLysaght and water acquisitions

700277110

-277110

319(1)

-19

253(2)

--

---

---

Total capital spending(4) 2,760 1,312 483 513 321 22

Notes: (1) Cost of 19.98% holding in Smorgon Steel (SSX). (2) Net cost to BlueScope on sale of SSX shares excluding tax payable

on sale of SSX shares. Gross cost of $700M less pre-tax profit on SSX shares of $128M leaves $572M. (3) US$190M (A$226M) recovered following the sale of Vistawall

in June 2007. (4) Cogeneration feasibility study being undertaken over next 15 months and the capital cost of the project, will likely be in the range of A$700 –

1,000M.

EBIT remains sensitive to realised

hot rolled coil prices and raw material costs

(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. This does not include the potential impact on Australian domestic coated product prices, as the flow on effect in the short term is less certain.

(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$.

(3)

Coal and iron ore US dollar prices are predominantly locked in for FY2008.

Estimated impact on forecast EBIT

(A$mil)

Assumption

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

+/ 1¢

movement in Australian dollar / US dollar exchange rate(2)

+/– US$10 / tonne movement in NSBSL HRC price to scrap spread+/– 2% movement in slab production in Australia, New Zealand & USA+/– US$10 / tonne movement in coal costs+/– US$10 / tonne movement in iron ore costs

85

10 12 17 50

100

Full Year (current)

Full Year (previous)

– 141128

4590

86

(3)

(3)

Transitioning to MD & CEO of BlueScope

Announced as Kirby’s successor August 6, 2007To take effect 1 November 2007My intention is to provide investors with a detailed review of my

new management structureapproach to doing business, and any strategy revisions

on or around the time of the AGM in November. This will be followed by an investor roadshow.

My review process will include a rigorous “test and refresh” activity ofmarket opportunitycapability, and execution plans

for each of our businessesI look forward to working with you and briefing you in detail in November.

In summary In summary -- a year of a year of great achievements great achievements

July 2002 –

August 2007 –

“Oh what a journey”


Market


Market


Diversity


Diversity


Team


Team


Asia


Asia

Low Cost Producer

Low Cost Producer


Structure


Structure


Cycle


Cycle


Flows


Flows

Strong Operating

Track Record

Strong Operating

Track Record



A VERY DIFFERENT KIND OF STEEL

COMPANY



1.5

0.9 0.80.4

4.1

3.5

2.8

1.8

0

1

2

3

4

5

6

7

8

2000 2001 2002 2003 2004 2005 2006 2007

Lost

time i

njurie

s per

milli

on m

an-h

ours

worke

d

Medically Treated Injury Frequency RateLost Time Injury Frequency Rate

21.9

17.0

12.4

9.48.0

9.3

6.5 6.4

0

5

10

15

20

25

2000 2001 2002 2003 2004 2005 2006 2007

Medic

ally t

reate

d inju

ries p

er m

illion

man

-hou

rs wo

rked

Reported performance for IISI member companies (employees & contractors)

NSW Manufacturing 27.9

in 2005

Taking care of our employees

One of my most pleasing outcomes since becoming President of BHP

Steel in March 2000, has been our focus and improvements in our safety performance:

And

over the same period we increased our number of employees from approximately 13,500 to 18,000 or over 30%

0

100

200

300

400

500

600

15/07/02 15/12/02 15/05/03 15/10/03 15/03/04 15/08/04 15/01/05 15/06/05 15/11/05 15/04/06 15/09/06 15/02/07 15/07/07

BLUESCOPE STEEL - TOTAL RETURN INDEX S&P/ASX 100 - TSR Index (Rebased)

15/7/2002 – 16/7/2007

Source: ABN AMRO

Taking care of our shareholders

BlueScope’s total return to shareholders vs

ASX 100 over 5 years since listing.

INDE

X

BlueScope’s TSR 15/7/2002 – 16/7/2007 +500%

A$557M

A$2,649

A$3,291

Less internal / otherTotal revenue

Downstream

Midstream

Upstream

(A$1,225M)

A$5,272M

A$2,064M

A$3,751M

A$4,805M

FY2007

From the “Triangle”

to the “Trapezoid”

+270%

+42%

+46%

+68%(A$1,760M)

A$8, 860M

FY2003

Global group sales revenue mix –

mid and downstream sales revenue growth powering ahead

Downstream

Midstream

Upstream

229.4%

16.2%

37.9%

12.5%

21.9%

5.9%

A$1,835M

A$3,078M

A$4,539M

A$2,064M

A$3,751M

A$4,805M

A$557M

A$2,649M

A$3,291M

FY2003 FY2005 FY2007

Less internal / other (A$1,225M) (A$1,511M) (A$1,760M)Total Sales Revenue A$5,272M A$7,941M A$8,860M

+68.0%

Historical revenue and EBITDA growth by stream since listing

A$ Millions FY03 FY05 FY07 Growth2003 - 2007

Sales Revenue

Upstream 3,291 4,539 4,805 + 46%Midstream 2,649 3,078 3,751 + 42%Downstream 557 1,835 2,064 + 270%Other / Eliminations (1,225) (1,511) (1,760)Total 5,272 7,941 8,860 + 68%

EBITDAUpstream 672 1,694 1,195 + 78%Midstream 297 123 184 -

38%

Downstream 40 42 108 + 170%Other / profit in stock elimination

(128) (204) (64)

TOTAL 881 1,655 1,423 + 62%

Strategy of focus on construction has offset the contraction in manufacturing in Australia over the last 5 years

Sales Tonnes

Construction

59%46%

FY2003 FY2007

Non-dwelling 25%

Dwelling 22%

Engineering 12%

Manufacturing 14%


Auto & Transport 8%Packaging 6%

Non-dwelling 22%

Dwelling 18%

Engineering 6%

Manufacturing 22%


Packaging 8%

Auto & Transport 13%

Desp

atch

es ‘0

00 to

nnes

500

1000

2,000

2,500

3,000

1,500

- 3%Despatches 2.710mt 2.629mt

500

1000

2,000

2,500

3,000

1,500

From a promising start in 2002 to a dynamic future in 2007

• SHAREHOLDERS • CUSTOMERS

• COMMUNITIES • EMPLOYEES

Questions & Answers Questions & Answers

FY2007 Results Presentation Period Ended 30 June 2007Kirby Adams, Managing Director and Chief Executive OfficerPaul O’Malley, Chief Financial Officer 30 June 2007

ASX Code: BSL

Supporting InformationSupporting Information

Reporting business segments

Corporate / Group

Hot Rolled Products

Australia

Lowest quartile producerLeading supplier of flat steel in AustraliaGlobal scale

o

Port Kembla Steelworks

New Zealand & Pacific Islands

Products

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

o

Glenbrook, NZo

Pacific Islands

Pre-eminent global designer / supplier Pre-engineered buildingsNo 2 position in North America and no. 1 in China

o

Butler buildings

Coated & Building Products

North America

Australia New Zealand Asia North America

Hot Rolled Products

North America

50:50 joint venture with Cargill Inc.Again voted no. 1 flat rolled steel supplier in North America (Jacobson Survey)

o

Delta, Ohio

Coated & Building

Products Asia

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

o

Indonesian, Malaysian, Thailand and Vietnamese operations

o

China, including Butlero

Lysaght Asiao

India – Tata BlueScope JV

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

o

Western Porto

Springhillo

Lysaght Australiao

Service Centreso

Smorgon Distribution

Coated & Building Products Australia

IndonesiaMetal Coating 100kt (+165kt)

Painting 40kt

(+120kt)

Western PortHot Rollling

1.43mtCold Rolling 1.0mt

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

+

SydneyPaint Line (1 Line) 120kt

New Zealand/PacificIron Sand MiningRaw Steel 625ktHot Rolling 750ktCold Rolling 360kt

Metal Coating 230kt +Painting 60kt

Hollow Sections 45ktPacific Roll forming sites 3

Port Kembla/IllawaraRaw Steel 5.2mt

Hot Rolling 2.8mt Plate 360kt

Cold Rolling 960kt (240kt)(1)

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

+Australia

7 Service Centres41 Lysaght Sites

7 BlueScope Water

VietnamMC 125ktPainting 50kt

ChinaMC 250ktPainting 150kt

ThailandCold Rolling 350kt

Metal Coating 375ktPainting 90kt

MalaysiaMetal Coating 150kt

Painting 60kt

BrisbanePainting 90kt

• Coated and Building Products North America

• North Star BlueScope JVHot Rolling 1.80mt (100%)

• Castrip JV

Annualised Production Capacities and Approved Growth as at June 2007

Asia24 Lysaght and

PEB Sites

IndiaMetal Coating 250kt

Painting 150kt

(1)

CRC from packaging cold mill

BlueScope Steel China footprint

BlueScope Steel in China1 Metal Coating/Painting Line Facility4 Lysaght Manufacturing Facilities2 Butler PEB Manufacturing Facilities60 Butler/CSC Sales Offices24 Butler District Offices/Sales Office

BlueScope Steel in North America1 Regional Office4 BlueScope Steel Sales Office2 Joint Ventures7 Butler Manufacturing Plants

12 Butler Sales/Engineering Offices

BlueScope Steel North American sites

BlueScope Steel’s communities are our homes

Supporting our Communities

Actions:Corporate Donations & Sponsorship PolicySite based community relations plansCollaborative community partnershipsButler Foundation in USWorkplace giving in Australia

Actions:HSEC PoliciesEnvironmental Management standardsPerformance targetsCompliance systemsFormal audit processesIncident Management Systems

Positioning for the FutureEnvironmental Governance and Compliance

Key Components:

“Our success relies on communities supporting our business and products. In turn, we care for the environment, create wealth, respect local values, and encourage involvement. Our strength is in choosing to do what is right.” *

Actions:Greenhouse Gas abatement optionsCogeneration feasibility studyEmissions managementWater reduction initiativesIISI CO2 Breakthrough ProjectAsia-Pacific Partnership on Clean Development and Climate

* BlueScope Steel Bond

Water conservation –

clear focus on further reducing fresh water consumption

BlueScope Steel’s total Australian daily fresh water consumption - 40 megalitres per day (ml/day) (FY2006)Port Kembla Steelworks (PKSW)

Consumption of fresh water – 37 ml/dayInnovative waste water recycling project (with Sydney Water) will reduce consumption by more than 50% to 17 ml/day Salt water consumption (approx 815 ml/day) in lieu of fresh water consumption

Springhill (Port Kembla) has reduced its fresh water consumption by approximately 50% in last 5 years.Western Port to cut its freshwater use by over 60%.

Port Kembla Steel Works Total Water Use (ml/day) for process and cooling Western Port

$21.5 million water recycling project approved (including funding from Victorian Government).

Between BlueScope and South East Water.

The Western Port project will also reduce treated wastewater discharged to Western Port Bay by 75%.

Project expected to be competed in 2009.

Salt Water Waste Water Fresh Water

96%

2%2%

55

5048 47

41

34 34

3129 29

27 26

23 22 22 21 20 19 18 17 16 16 15 14 13

10 10 10 9 8 7 7 6 6 5 4 3

Blue

Scop

e

AK S

teel

Kobe

Ste

el

TKS

Salz

gitte

r

Sum

itom

o

Tech

int

Voes

talp

ine

Arce

lor M

ittal

Hyun

dai S

teel

US S

teel

Riva

Gro

up

Nipp

on S

teel

JFE

Baos

teel

Hand

an

Panz

hihu

a

Kunm

ing

Stee

l

Maa

nsha

n

Seve

rsta

l

Tata

Cor

us

POSC

O

Essa

r

USIM

INAS

Baot

ou

Mag

nito

gors

k

Nuco

r

NISC

O

Ind

Unio

n

Erde

mir

Ansh

an

SAIL

Benx

i

Chin

a St

eel

Ilyic

h

Wuh

an

Gerd

au

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

NOTE: Compiled from the largest 60 steelmakers. Excludes those who do not have flat steel metal coating capacity

Source: IISI ‘World Steel in Figures’, CRU ‘Steel Sheet Quarterly Oct 2006

In addition, leading global positions in:RollformingPaintingPre Engineered Buildings

BlueScope Steel –

a global leader in adding value to hot rolled coil

Will increase to 55% with recently announced CAPEX (India & Indonesia)

Global steel industry consolidation –

announcements over last 12 months

July 07

June 07

–

Gerdau

Ameristeel

announced its intention to acquire US Steel produce Chaparral Steel for US$4.22 billion.

–

Ternium

announced the acquisition of Grupo

Imsa, for US$3.2M, had been completed.

–

Steel Dynamics, Inc. announced that it will acquire The Techs, for US$360 million on a cash free basis (subject to adjustments).

May 07 ―

Mitsui & Co. (U.S.A.) Inc acquired Steel Technologies Inc. for US$532 million.―

U.S. Steel Corp to acquire Lone Star Technologies Inc for US$2.1

billion. The merger created the country’s largest tubular products producer.

―

Baosteel

proposed merger with Baotou Steel Union

Apr 07 ―

Essar

Global acquires Algoma for C$1.8 billion (US$1.6 billion)

Mar 07 ―

BlueScope Steel agrees to purchase Smorgon

Distribution for AUD$700 million

Feb 07 ―

Rautaruukki

announces plans to acquire Norwegian steel bridge supplier Scanbridge

AS for EUR $6.4 million (Downstream)

Jan 07 ―

Nucor announces acquisition of Harris Steel Group (US$858 million) ―

Tata Steel acquires Corus Group for £6.2 billion ($12 billion), creating the world’s fifth-biggest steelmaker.

―

Baosteel

acquires Bayi

Iron & SteelDec 06 ―

Arcelor

Mittal

acquires Sicartsa, a Mexican integrated long products mill, for an enterprise value of US$1.44bn

Consolidation continued…

Nov 06 ―

Evraz

acquires Oregon Steel for US$2.3bn

―

CSN and Esmark

in bidding war to acquire Wheeling-Pittsburgh

Oct 06 ―

Tenaris

acquires Maverick (pipe and tube) for US$3.2bn―

Posco

and Nippon announce that they will spend more than a total of $900 million to increase their stakes in each other to ward off hostile takeover bids. Nippon Steel will buy about 2% of Posco’s

shares to bring its stake to 5.32% and Posco

will raise its stake in Nippon to 3.81% by March 31st

Jun 06 ―

Proposed merger of Smorgon

and OneSteel

announced―

Mittal

acquires Arcelor

for €38bn Apr 06 ―

NCI Building System acquires Robertson Ceco

for US$370M

BlueScope Steel Group EBIT variance FY 2007 vs

FY 2006 –

Continuing or underlying business

500

600

700

800

900

1000

1100

1200

1300

1400

1500

1600

Full year June2006


Volume NSBSL Conversion &Oth Costs

Raw MaterialCosts

ExchangeRates

Other One-offs Full year June2007

-

$753m

$439m

$1083m

($365m)

($13m)

$76m

($44m)

($34m)$207m

$64m

Ore, Coal, Scrap (143)Coating Metals (141)Steel Feed (81)

EBIT

A$ M

illion

s

Higher Freight (28)Higher labour costs (23)R&M (12)Higher costs in Asia (10)Research costs (12)Impact Western Port fire 36Favourable production volumes 22Other (7)

Asset Sales (4)

Redundancy provisions 41

Smorgon dividends 29

Depreciation (mainly Asia) (20)

Other 18

400

500

600

700

800

900

1000

Full year June2006


Volume Mix Conversion &Oth Costs

Raw MaterialCosts

ExchangeRates

Other Full year June2007

-

Hot Rolled Products Australia (PKSW) –

variance analysisEB

IT A

$ Milli

ons

Freight (30)R&M (18)Labour (16)Volume 22Other

(12)

Note

* BlueScope purchased 300-400kt of iron ore at the end of FY2005 before the 71.5% price increase became effective and so used lower priced ore in the first half of FY 2006. A similar transaction was not undertaken in FY 2007.

$456m

$349m

$759m

($7m)

($8m)($54m)

$34m

$83m

$46m

($140m)

Higher slab & HRC prices

Improved domestic sales

Redundancy provision 34

Iron Ore (24)Coal (14)Opening Inventory (69)Scrap

(33)

Hot Rolled Products Australia –

net annual movements in total PKSW raw material costs

FY2003 FY2004 FY2005 FY2006 FY2007 FY2008

S&A Conversion Costs Despatch & Freight Raw Materials

-3%

+36%+34%

+2% -2%

Hot Rolled Products Australia -

product flow (Indicative) FY2007

Port Kembla Steelworks5.31mt slab FY2007

(5.28mt slab FY2006)

Hot Strip Mill (1)

54%(49%)

Plate Mill9%

(8%)

C&BP Australia (2)

(Western Port)22%

(16%)

C & BP Australia (2)

(Springhill)49%

(54%)

Domestic HRC23%

(21%)

Notes:(1)

+400kt HSM expansion was completed July 2006. This did progressively see slab sales reduced by an equivalent amount over FY2007.

(2)

“C&BP Australia”

is Coated and Building Products Australia.

Export Slab (1)

15% (0.8mt)

(27%) (1.4mt)

Export HRC

28% (0.8mt)

(25%) (0.6mt)

Slab and HRC price benchmarks

Previously recommended the Japan to Korea HRC price as being a reasonable public benchmark for BlueScope’s domestic and Asian HRC sales; andContinue to recommend the following both benchmarks

HRCSteel Business BriefingHRC East Asia Import CFR

SLAB Steel Business Briefing Slab East Asia Import CFR

Asian HRC Benchmark Price

$0

$100

$200

$300

$400

$500

$600

$700

Jan-00

Jul-00

Jan-01

Jul-01

Jan-02

Jul-02

Jan-03

Jul-03

Jan-04

Jul-04

Jan-05

Jul-05

Jan-06

Jul-06

Jan-07

Jul-07

US$

/mt

SBB HRC East Asia Import CFR

Source: Steel Business Briefing

100

120

140

160

180

200

220

240

260

280

Full year June2006

Trading Offices NS BSL Castrip / Other Full year June2007

-


FY 2007 vs

FY 2006 EBIT variance analysis

(North Star BlueScope 50% only)Sales revenue up 1% to A$722MEBIT down 8% to A$156MFY2007 return on net assets (pre-tax) 59%

This segment comprises:North Star BlueScope Steel (50% interest)Castrip LLC and North American and European sales offices

EBIT

A$ M

illion

s $188m$180m

$5m ($13m)-


new baghouse

installation

Looking after our employees and environment –

the new baghouse

has significantly improved working conditions. The capital cost is approximately US$40M (100% project) and was completed mid CY 2007.

Pre-installation Post-installation

50

60

70

80

90

100

110

120

130

140

150

Full year June2006



Raw MaterialCosts

ExchangeRates


New Zealand and Pacific Islands Products performance variance analysis

FY2007 vs. FY2006Sales revenue up 3% to A$728MEBIT down 14% to A$90MFY2007 return on net assets (pre-tax) 24%

EBIT

A$ M

illion

s

$105m$5m

$90m

($21m)

$6m $2m

-

$22m

($30m)

$1m

Higher coating metals (22)

Coal (1)

Steel Feed (7)

Export Hot Rolled 34% (6%+28%)

Domestic Pipe4%

Domestic Hot Rolled8%

Export Cold Rolled14% (1%+ 13%)

Domestic Cold Rolled12%

Coating lines74%

New Zealand Steel (FY2007) product flow*

Export Metal Coated13% (8% + 5%)

Domestic Painted20%

Domestic Metal Coated61%

ExportIron Sand

Concentrate0.8mt

Export Vanadium Slag

15 kt

Mine SitesIron Sand Concentrate

2.0mt

New Zealand Steel0.6mt Slab

0.6mt Hot Rolled

Cold Strip Mill54%

* Indicative annual prime production and sales (t)

Export Painted6% (4%+2%)

(External % + Internal %)

-50

0

50

100

150

200

250

Full yearJune 2006

ExportPrices

DomesticPrices

Volume Mix Conversion& OthCosts

ResearchCosts

RawMaterialCosts

ExchangeRates

Other Full yearJune 2007


variance analysis

FY2007 vs FY2006 EBIT variance analysis (excluding the packaging business, which is reported as a Discontinued Business).

Steel Feed costs (35)Coating Material costs (95)

EBIT

A$ M

illion

s

Net increase in export sales

Sales revenue up 15 % to A$3,186m EBIT from ($3m) up to A$41mFY 2007 return on net assets (pre-tax) 3%

($3m)

$110m

$41m

($32m)

$23m

($40m)

$29m

$22m$74m

($130m)

($12m)


domestic building market remains strong

Building MarketsRecord building market full-year volumes for BlueScope.Record volumes achieved in COLORBOND® Steel’s 40th Anniversary year. TRUECORE® (steel framing) sales growing rapidly.Successful launch and market take-up of COLORBOND PERMAGARD®. Full year sales positively impacted by strong commercial/industrial activity, supported by solid residential building activity in WA & Qld.

Manufacturing and distribution marketsMajor share recovery achieved in distribution channel in first half of the year.Distribution, automotive and manufacturing markets remain under pressure from imports and stronger A$.

Water –

BlueScope is part of the solution

Tank a day is a $1 million BlueScope initiative to help school children help our environmentBlueScope Water continues to grow rapidly with a focus on water storage and management solutions for households through to industrial consumersUrban Water Storage experienced continued rapid growth with a focus on:

Retro fit WATERPOINT SLIMLINE® and WATERPOINT CLASSIC® rainwater harvesting solutions to existing homesInstallation of THINKTANK® rainwater harvesting systems in new homes

Pioneer Water Tanks range of rural & industrial water storage products continue to perform solidly and to grow export:

The range of Pioneer GALAXY® tanks are a key component in drought proofing and Industrial rainwater harvesting and water management

Production capacity is currently being expanded in Queensland, Victoria and Perth.

Another downstream business to deliver growth

http://www.joomlart.com/

New building solution –

Lysaght

Quickform

product

Quickform Building Homebush, Sydney

Benefits:Full load bearing fire and sound rated walls for multi-tenancy applicationsLight weight (minimum labour requirements)Fast and easy to install

Our customers are our partners

Our Market OfferHigh quality productsAdvertising / promotional supportServiceDeliverySatisfaction WarrantyTechnical Support

Creating New productsNew markets

TUBEFORM®

XLERPLATE®

http://www.dtggroup.com/tpg/imagedatabase/resultsd.cfm?record=50007&page=1

Another building solution –

Lysaght

Bondek®

Value-added solutions

Graffiti Remover

NEETASCREEN Plus Fence AQUAPLATE®

Smorgon distribution business –

product flows

In FY 2006, Smorgon Steel Distribution supplied over 850,000 tonnes of product, as follows:

Source: Smorgon Steel

380kt 260kt 150kt 70kt

Roll forming Roll forming

Smorgon

distribution business –

national outlets (FY2006)

Source: Smorgon Steel Total: 92

BlueScope Steel has now strengthened its channels to the Australian market, in addition to it’s:

Lysaght

Service Centre

Water

businesses.

Total Purchase Price $700m

Current Value of 19.9% stake in SSX1 ($447m)

Additional cash to be paid to Smorgon Steel $253m

Original investment (19.9% of Smorgon Steel) $319m

Pre -

tax cash outlay $572m

Estimated tax on gain from original investment $38m

Total cash outlay $610m

Note: The above does not include the ~$29m in fully franked dividends received from Smorgon Steel, or any interest paid on borrowings

1)

Final value of SSX shares is still subject to confirmation.

BlueScope Steel reaches agreement with OneSteel and Smorgon Steel

0

10

20

30

40

50

60

70

80

90

100

110

120

130

Full year June2006



Raw MaterialCosts

ExchangeRates


Steel Feed (21)Coating Materials (24)

$19m

$39m

$42m

$11m

$12m

($10m)($7m)

$44m

($45m)

($21m)


variance analysisEB

IT A

$ Milli

ons

FY2007 vs. FY2006Sales revenue up 32% to A$1,387mEBIT up 121% to $42mFY2007 annualised return on net assets (pre-tax) 3%

EBIT variance analysis

Depreciation (15)

Other (6)

Indonesian coated expansion

May 2007 – announced intention to recommence its brownfield coating expansion in Indonesia.Cost US$113m (inc US$12m already spent)Expansion:

construction of a second metallic coating line, with in-line painting at its Cilegon operation (100km west of Jakarta)

New line will be dedicated to producing thin gauge (0.2 - 0.4 mm) coil Operational by end CY2009.Summary of increased output:

Metal Coating Line Painting Line

Current capacity (MCL1) 100,000 tonnes 40,000 tonnes*

Incremental improvement through optimising line loadings at no cost

35,000 tonnes 20,000 tonnes

Plus new line (MCL2)** 130,000 tonnes(Max 170,000 bare tonnes)

100,000 tonnes

Total 265,000 tonnes 160,000 tonnes

* Actual output from 50,000 previously announced due to a higher proportion of thin gauge processing.

** Approximately 80% of the MCL2 output will be in line painted.

Indonesia –

metal roofing sheets

Our largest customer in Indonesia, PT Tatalogam Lestari, produces metal roofing sheets from our 0.2mm product.

Source: PT Tatalogam Lestari

(k to

nnes

)

Our Asian Coating / Painting / Roll-forming / PEB capacity to improve twofold by FY2009

490

990

175

420

0100200300400500600700800900

10001100

FY2006 FY2007 FY2008 FY2009Metal coating Painting

BY REGION

X 2

X 2.4

Indicative FY2007 Zinc and Aluminium

usage (vs. FY2006)

Tonnes Zinc Aluminium

FY2007 FY2006 FY2007 FY2006

AUSTRALIA

Springhill 22,787 21,250 10,632 10,000

Western Port 21,800 17,500 10,900 9,500

Sub-total 44,587 38,750 21,532 19,500

NEW ZEALAND 6,700 6,500 3,400 3,500

NORTH AMERICAVistawall(1) - - 33,000 30,000

ASIA(2) 15,800 12,250 13,800 11,250

TOTAL 67,087 57,500 71,732 64,250

Note:(1

)

Vistawall

business was sold on 29 June 2007.(2

)

In future years BSL Asia’s usage will increase as new mid-stream projects ramp-up to full capacity

0

10

20

30

40

50

60

Full year June2006



Raw MaterialCosts

ExchangeRates


-

Coated and Building Products North America –

variance analysis

Comprises:Butler buildingsVistawall business was sold on 29 June 2007 and therefore not included in this analysis.

FY2007 vs. FY2006 EBIT variance

Sales revenue down 6% to A$788MEBIT up from A$9m to A$37mFY2007 return on net assets (pre-tax) 50%

EBIT

A$ M

illion

s

$9m

$37m

($2m)

$1m

$19m

$14m

($2m)($2m)

Improved conversion costs following Jackson startup 6 Lower freight 2Improved material usage 3Other 8

Calendar year earnings

A$ Millions CY2003 CY2004(2) CY2005 CY2006

Revenue 5,328 7,029 7,980 8,693

EBITDA(1) 857 1,501 1,411 1,052

EBIT(1)

-

reported 581 1,212 1,111 742-

operational - - 1,308 966

Net profit-

reported 436 859 792 413

-

operational - - 943 586EPS (¢) 56 116 110 59

(1)

Includes EBITDA & EBIT for North Star BlueScope Steel but not revenue(2)

Includes eight months of BlueScope Butler financial results

From the Triangle to the Trapezoid

Downstream

Midstream

GROWTH PROJECTS

Major projects completed to 30 June 2007 To be completed FY2008 – FY2009

AsiaIndia - PEB and Lysaghtfacilities at PuneIndia – Lysaght facility at Chennai & New Delhi

USA Successful turnaround of Tennessee facility.

Thailand – PEB facilityChina – Guangzhou (PEB and Lysaght)

− Lang Fang (Panels)Australia

A$319M Smorgon Steel shareholding (19.98%)

AustraliaAcquired Smorgon’sDistribution Business (Aug 07)

AsiaThailand – second metal coating line (MCL2)

Vietnam – metal coating (MCL) and paint line (PL) and ramp up in progress

China – MCL and PL and ramp up in progress

AsiaIndia – new MCL & PL construction (mid CY2009)

Indonesia – MCL2 & PL2 (end CY2009)

AustraliaSydney Colorbond® plant start-up (July 2007)

Australia400kt HSM expansion at PKSW

New ZealandFront end study

USANorth Star BlueScope – new bag house installed

AustraliaBF No 5 reline (expected March 2009)Upstream

+270%

+42%

+46%

Revenue increased FY 2003 vs. FY 2007

FY2007 Results Presentation Period Ended 30 June 2007Kirby Adams, Managing Director and Chief Executive OfficerPaul O’Malley, Chief Financial Officer Business Presidents20 August 2007

ASX Code: BSL

fy2007 results presentation period ended 30 june 2007€¦ · fy2007 results presentation period...

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