0『IR Report of 2013』

1

This data is confidential and is intended solely for a purpose of the presentation to the investors and concernedParties of the company. Any dissemination and copying or use of this data without permission is strictly prohibited.

Disclaimer

2

Table of Contents

I. Corporate Identity

II. Investment Highlights

III. Financial Highlights

Appendix

01. SeAH Steel, the Representative among

Steel Pipe Producers

02. Core Business of SeAH Group

03. Organizational Growth Path

04. Products

05. Domestic Operations & Global Presence

3

SeAH Steel, the Model among Steel Pipe Manufacturers

Company SeAH Steel Corp.

CEO Howard Lee

Founded 19 Oct. 1960

Business Manufacturing Steel Pipe and Sheet in coil

ProductsSteel Pipe (Carbon, STS, Ti),

Steel Sheet (Pickling, GI, Colour)

CapacitySteel Pipe (1.5M ton), STS Pipe (73K ton), Steel

Sheet (0.32M ton)

Personnel 980 (with Overseas 1,894)

IPO KOSPI (13 May 1969)

v General StatusThe World-Class Steel Pipe

Manufacturer in Korea

* Base Year : 2013

(Unit : KRW100 M) Separate Consolidated

Total Assets 17,180 19,956

Equity 10,633 10,994

Issued Capital 300 300

Sales 17,200 22,192

Operating Income 927 1,546

Net Income 777 1,166

4

Core Business of SeAH Group

SeAH Group

SeAH Holdings

v Corporate Governance Structure of SeAH Group v Stock Holders

Affiliated Person

Treasury Stock

OthersTotal 6M

Shares

1000

1500

500

1500 1500 1500 1500

(26.8)

(6.5)

(21.6)

(9.6) (12.1) (15.7)(11.2)

2007 2008 2009 2010 2011 2012 2013

Dividend per Share (Krw) Payout ratio(%)

Europe

USA

SeAH Steel

Core Business of

SeAH Group

Vietnam

Japan

China

UAE

Steel/Metal Service/IT 해외자회사

Indonesia

252 shares

(42%)

19 shares

(3%)

329 shares

(55%)

5

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2013

Sales figure

The first steel pipe exporter in Korea

1960-1970 Embryonic period 1971-1995 Growing period

1960. 10

Establishment of Pusan Steel pipe

1967. 08

The First Steel Pipe Exporter in Korea

1969. 05

Carried out IPO

1970. 08

Seoul Plant operation begins

1978.08

Establishment of Pusan PPA

1978. 10

Operating Pohang Plant

1990. 01

Acquisition of SP&S

1993. 05

Establishment of Vietnam

Steel Pipe

1996 ~ Take-off stage

1996. 01

Company name changed to

SeAH Steel Corp.

1996. 05

Relocated STS Plant to

Changwon

1998. 05

Operating Gunsan Flat Rolled

Products Plant

2001. 07

Divesture (SeAH Steel & Holdings)

2009. 02

Operating Gunsan Steel Pipe Plant

2011. 04

Establishment of SSUAE

2012.03

Merger & Acquisition of SPP

2012. 09

Acquisition of Dongkuk R&S

2014. 02

Acquisition of SeAH Steel Indonesia

Acquisition of Inox Tech

Operating Pohang Plant

Operating Seoul Plant

Operating Pohang Plant

Operating Color Steel Sheet Plant

Civesture

Operating Gunsan Steel Pipe Plant

Acquisition of SPP

Operating of CGL

Establishment of PPA Establishment ofSeAH Japan, SSV

1995. 01

Acquisition of Sammi Special Steel

1995. 08

Establishment of SSV

Establishment of Vina pipe

Establishment of Landmark

Establishment of SSUAE

Organizational Growth Path

No. 1 Korean Steel Pipe Maker

Start of STS business

6

Products : Steel Pipe

Carbon Steel

Special Steel

Seamless

Welding

Forge Welding

ERW

Spiral

Roll Bending

JCOE UOE

• Piercing billet and bloom

after heated

• Usage in gas plant &

chemical field

• Compression welding

after cylinder formation

• Gas transmission line

• Welding of each side edge

using electric resistance heat

• Usage in small-medium sized

pipe fabrication method

• Welding of each side

edge when weld wire and

flux are melted by arc

heating

• Usage in Large

Diameter pipe fabrication

method

• Diameter of pipe depend on

spiral angle

• Usage in structural pipe

Press Bending

• Small quantity batch

production roll changes

• Heavy wall thickness

pipe can be produced

• Heavy wall thickness

pipe can be produced

more than UOE

process, but

productivity is lower

than UOE process

• Limited Heavy wall

thickness pipe production

and high cost.

• Productivity is higher than

JCOE process.

SAW

• Various alloy added into carbon steel for advanced

properties

• Classified according to welding/forming method

STS

Ti

Others

• Superior corrosion-resistance and

heat-resistance

• Usage in LNG ship and plant

• Using in heat exchanger(in

sea water), high temperature

and corrosion-resistance field

because of stable oxide layer

in surface of pipe

SeAH’s Biz Area

SeAH’s None Biz Area

Steel Pipe Products

7

Lin

e P

ipe

& O

CT

G

Stru

ctu

ral P

ipe

Sta

nd

ard

Pip

e

Oth

ers

Temporary resources for outer wall building, Pile for base reinforcement

Line pipe : transportation of oil & gas

OCTG : drilling and casing in oil field

Water supply and drainageMechanical structure, automobile parts, Heat exchange etc.

Products : Steel Pipe

Usages

8

Products : Steel Sheet

Steel Sheet Products

Raw Material Coated steel

CR coils(Cold

Rolled Steel)

TP(Tin Plate)

Prepainted Steel

SeAH’s Biz Area

SeAH’s None Biz Area

PO Coils(Pickled

and Oiled Steel)

Copper Coated

Steel

Glavalume(55%

Aluminium-Zinc

Alloy Coated Steel)

GI (Galvanized

Steel)

HR Coils (Hot

Rolled Steel)

• It is used for various cans due to high corrosion resistance and

excellent formability. but Corrosion from the pin holes exposed of

oxygen proceeds fast.

• It has fine appearance, weldability and heat transmission.

Therefore, it is used for steel pipes of refrigerators and raw

material of automobile brake tubes.

• It has delicate silver spangle composed Aluminium, Zinc and Silicon.

• It is more corrosion resistant than galvanized steel and highly heat resistant.

• Main usages are construction, automotive components and heat exchangers.

Electrical

Galvanized Steel

Hot dip Galvanized

Steel

• Has fine appearance due to thin coating thickness but is less durable.

It is used for interior and exterior of automobile, home appliances and

container.• Has thick coating thickness and less elegant surface but is highly

durable. It is used for large exterior goods( street light, pole shaft,

steel towers, civil engineering, construction).• The zinc is corroded(oxidated)

instead of steel.

• classified as coating ways

Process

• Building duration reducing, easy

construction regardless of weather

condition. High weather-resistance.

• Classified as base metal

Prepainted GI Steel

Prepainted

Aluminium Steel

Prepainted CR Steel • Used for less required goods of corrosion resistance and metal

furniture.

• Pricey but light and corrosion resistant. It is used for roofing,

interior and exterior building material, home appliances, and

office goods.

9

Co

ns

truc

tion

Ho

me

ap

plia

nc

es

Au

tom

ob

ile

etc

Roofing, interior and exterior building material, various

structure parts,

Beverage cans, containers, vessel apparatus.

Show cases, Raw material of refrigerator steel tube, electric

electronic parts.

Interior and exterior automobile, exhaust system, brake

tubes.

Usages

Products : Steel Sheet

10

Domestic Operation : Specialization of Plants

Specializing the plants with high valued, middle & small sized, STS pipe and Steel Sheet

GunsanSteel Pipe Plant

• Focused on middle & small sized pipe

market based on cost competitiveness

• Location : Gunsan (0.14M ㎡)

• Products : ERW

• CAPA : 0.2M tons/y

• Demend : Construction / Machine

Changwon

Plant

• Special pipe (STS, Ti etc)

• Location: Changwon (0.09M ㎡)

• CAPA: 43K ton/y

• Demend: Construction / Shipbuilding

/ Power plant

• Expanding STS business with

acquisition of Sami Special Steel in

1995

• High value products for export

• Location: Pohang (0.48M ㎡)

• Products : ERW, SAW (S/P, R/B,

P/B)

• CAPA: 1.1M ton/y

• Demend : Construction / Shipbuilding

/ Plant

• Applying JCOE, Thread, Post-

processing facilities to expand high

value products

GunsanFlat

Rolled Products

Plant

• Strengthening basis for growth

through profit model development

• Location : Gunsan (0.19M ㎡)

• Products : Galva & Prepainted Sheet

• CAPA : Galva. 0.32M tons/y,

Prepainted 0.21M tons/y

• Demend : Construction / Appliances

SuncheonPlant

• Specializing in large & heavy wall pipe

• Location : Suncheon (0.29M ㎡)

• Products : STS,Carbon (S/P, R/B)

• CAPA : STS 30K ton/y, pipe 0.15M ton/y

• Demend : Power / Plant

• Acquisition & Merger of SPP in 2012

Seoul

Gunsan

Gwangju

Suncheon

Daegu

PusanChangwon

Pohang

Pohang Plant

Head Office

Sales Office

Plant

11

Global Presence : Overseas production base

• Middle east Asia and Africa

Market response

• Allocation: Ras Al Khaimah,

UAE

• Foundation: 2010

• Product: SAW (R/B,P/B)

• CAPA: 0.15M ton/y

SeAH Steel UAE

• Allocation: Hai phong,

Vietnam

• Foundation: 1993 (SeAH

50%, VN Steel 50% Joint

venture)

• Product : ERW

• CAPA: 40K ton/y

Vietnam Steel Pipe

• Exporting south-east Asia

and N.America based on

price competitiveness with

low cost

• Allocation: Dong nai,

Vietnam

• Foundation: 1995

• Product: ERW (API)

• CAPA: 0.23M ton/y

SeAH Steel Vina

SeAH Japan

SeAH Steel Indonesia

• Allocation: California, USA

• Foundation: 2007(SeAH

30%, Posco 35%, US Steel

35% Joint Venture)

• Production : SAW (S/P)

• CAPA: 0.27M ton/y

• Allocation: Beijing, China

• Foundation: 2002 (SeAH

50%, Leading way 50%

Joint venture)

• Product: Panel

• CAPA: 36K ton/y

United Spiral Pipe

Landmark Steel

Head Office

Sales Office

Plant

SeAH Steel (Head Office)

SeAH Steel California

Inox Tech

SeAH Steel Europe

• Allocation: Lendinara, Italy

• Product: STS steel pipe

• Demend: EPC area

• CAPA: 20K ton/y

• Acquisition in 2014

Global Production and Sales branches around the World

• SeAH’s window to Asia

Middle East Office

SeAH Steel America

State Pipe & Supply

• Distribution network of API

Pipe in N.America

• Processing pipe and sales

SeAH Steel Beijing Office

12

Table of Contents

I. Corporate Identity

II. Investment Highlights

III. Financial Highlights

Appendix

01. Top Production Capacity in Korea

02. Variable Product Portfolio

& Strategic product Line up

03. Top Exporter of OCTG & Line Pipe in Korea

04. Stable Financial Structure

05. Expansion into Business Area with M&A

13

10575 61

28

19

12

5

145

99

61

Total SeAH Hysco Husteel

H-SAW

L-SAW

ERW

97914.8%

10.1%

6.2%68.9%

SeAH

Hysco

Husteel

Others

Top Production Capacity in Korea

Production Capacity : 1.45M ton (14.8% share of Total National production)

[Source : Kosa, ‘11 Domestic steel pipe industry status]

Production

CAPA(10K ton)1)

1) SeAH’s base date : 31 Dec. 2013, Others : 31 Dec. 2011

2) Hysco (Include Hyundai RB)

* Exception of Special Steel Pipe & Seamless

[Main Makers’ CAPA Proportion]

2)

1

14

Variable Product Portfolio & Strategic product Line up

Carbon steel pipe Special steel pipeSML

ERW R/B P/B S/P STS Ti

Top-tier

SeAH Steel

Hysco

Husteel

Mid-tier

Steelflower

Dongyang Steel Pipe

EEW

Hyundai RB

MIJU Steel MFG

Specialist

Sungwon Pipe

DS Steel

Morning STS

Shinhan Metal

Poongsan

Iljin Steel

Yonghyun BM

SeAH diversifies our products to meet and excel market demands

[Source : Kosa, Steel & Metal News]Producible area

2

15

Top Exporter of OCTG & Line Pipe in Korea

26.5

12.1

19.0 23.9

30.0 27.3

5.9

2.0

10.6

10.4

12.7 15.5 32.4

14.0

29.6

34.3

42.7 42.8 51%

62%

49% 48%

37% 37%

0%

10%

20%

30%

40%

50%

60%

70%

-

10.0

20.0

30.0

40.0

50.0

60.0

2008 2009 2010 2011 2012 2013

OCTG

Line Pipe

M/S

Steady Increase in exporting of OCTG & Line pipe

10K ton

1) M/S : SeAH’s Export / Total Steel Pipe Makers’ Export

[Source : Kosa]

1)

3

16

965

477 626 563

2248

468

1429 1112

1371 1222

571

1119

208 330

724 427

826 674

1471

877

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Stable Financial Structure

EBITDA

CAPEX

59%235%

33% 59%

32%

91%

58%61%

107%

New Galvanized

line : 1,383

Gusan Steel pipe Plant : 512

NO2.CCL

: 289

JCOE : 965

USP

: 327SSUAE

: 493

For the last 10years EBITDA / CAPEX

• 4-year average EBITDA

: 128.4bill./y

• 4-year average CAPEX : 96.2bill.

Solid financial structure

• Although SeAH Steel was

significantly affected by global

economy fluctuation, we achieved

healthy finance structure (5-year

average debt ratio has been

maintained by 68%).

Solid Financial Structure : Continuous Growth in Sales & Profit-Making Ability

87% 89% 98% 103%90%

76%55%

74% 74%62%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Debt Ratio for the past 10 years

주)별도FS 기준

72%

M&A SPP & Capital

increase : 458

Acquisition of

Dongkook R&S : 131

(Unit : KRW 100M)

4

17

Expansion into Business Area with M&A

Expanding to high value business with acquisition of SPP and Inox Tech

SPP

Inox Tech

Purchase cost : KRW 5.8bill.(Debt :

KRW120.5bill.)

Acquisition in 12 Mar. 2012

Status of SPP

- Press Bender (1) : 120K ton)

- Spiral (2) : 12K ton)

- Roll Bender (1) : 30K ton

▪ Purchase price : 97.8bill.

▪ Acquisition in 28 Feb. 2014

▪ Status of Inox Tech

- Foundation : 1992

- Location : Lendinara, Italy & China

- Products : STS and Clad Steel Pipe

- Capacity : 25K ton/y (P/B, R/B)

▪ Securing construction site for the

relocation of Changwon plant

▪ Strengthen competitiveness of STS heavy

wall pipe

▪ Market advance

- Large sized and heavy wall pipe

(Offshore construction)

- S/P and API market

▪ SeAH Steel becomes the largest special

steel pipe maker

▪ Improvement of SeAH’s level with

acquirement of technical skills

▪ Lower the barrier of entry and overcome

the risk in the clad pipe industry

Outline Expected Effect

5

18

Table of Contents

I. Corporate Identity

II. Investment Highlights

III. Financial Highlights

Appendix

01. Analysis of Income Statement

02. Summary of Financial Statements

03. Stock Price & Valuation

19

68

93 92 111 104

3

3 3

3 4

31

27 26

30 36

101

123 122

145 144

2009 2010 2011 2012 2013

Steel Pipe

Analysis of Income Statement : Sales & Volume of sales Trend

7,688

10,518 11,361 13,268

10,920

1,276

1,275 1,860

1,725

1,805 3,190

3,196

3,397

3,581

3,913

313

435

499

555

561

12,467

15,424

17,117

19,129

17,200

2009 2010 2011 2012 2013

Steel pipe Special Pipe Steel Sheet Others

+8.4%

CAGR+9.3%

CAGR

v For the last 5-year sales v For the last 5-year volume of sales

Steady annual average growth (8%) by investment of facilities and M&A

[Source : SeAH ‘s data, included goods]

(Unit : KRW 100M) (Unit : M/T 10,000)

20

Analysis of Income Statement : Operating Income Trend

1,273

959 1,189

927

8.3%

5.6%

6.2%

5.4%

0.0%

3.0%

6.0%

9.0%

-

500

1,000

1,500

2,000

2,500

3,000

2010 2011 2012 2013

SeAH O.I. SeAH Profit Ratio Hysco P.R. Husteel P.R.

SeAH’s 4-years average profitability : 6.3% More profitable compared to major competitors

KRW 100 M

[Source : Business and Audit report]

21

Condensed Financial Statements(Stand alone)

Unit: KRW 100M2010

(K-IFRS)

2011

(K-IFRS)

2012

(K-IFRS)

2013

(K-IFRS)

Sales 15,424 17,117 19,129 17,200

Cost of sales 13,332 15,212 16,755 15,155

Gross profit 2,092 1,906 2,375 2,045

Gross-profit ratio 13.6% 11.1% 12.4% 11.9%

Selling, general &

admin. expenses819 947 1,186 1,118

Operating income 1,273 959 1,189 927

Operating profit to sales

ratio8.3% 5.6% 6.2% 5.4%

Other income 254 856 447 341

Other expense 306 766 831 316

Income before

income tax provision1,220 1,049 805 952

Provisions for Income

taxes238 329 251 175

Net income 982 719 554 777

Net income ratio 6.4% 4.2% 2.9% 4.5%

Unit: KRW 100M2010

(K-IFRS)

2011

(K-IFRS)

2012

(K-IFRS)

2013

(K-IFRS)

Current assets 5,498 7,668 7,222 6,223

Non-current assets 8,561 8,749 9,603 10,957

Total assets 14,059 16,416 16,825 17,180

Current liabilities 3,714 4,461 4,685 4,348

Non-current liabilities 1,303 2,495 2,448 2,199

Total liabilities 5,018 6,956 7,132 6,546

Issued capital 300 300 300 300

Additional paid-in

capital254 254 266 587

Retained earnings 7,642 8,174 8,695 9,351

Other capital

components846 732 432 395

Total liability &

shareholders equity9,042 9,460 9,693 10,633

Debt ratio 55.5% 73.5% 73.6% 61.6%

v P/L v B/S

22

Condensed Financial Statements(Consolidated F.S.)

Unit: KRW 100M2010

(K-IFRS)

2011

(K-IFRS)

2012

(K-IFRS)

2013

(K-IFRS)

Sales 18,101 21,474 24,704 22,192

Cost of sales 15,530 18,709 21,384 19,145

Gross profit 2,571 2,764 3,321 3,047

Gross-profit ratio 14.2% 12.9% 13.4% 13.7%

Selling, general &

admin. expenses1,073 1,341 1,586 1,501

Operating income 1,498 1,424 1,734 1,546

Operating profit to sales

ratio8.3% 6.6% 7.0% 7.0%

Other income 274 892 863 413

Other expense 495 753 1,053 456

Income before

income tax provision1,276 1,563 1,545 1,503

Provisions for income

taxes328 575 548 337

Net income 949 988 996 1,166

Net income ratio 5.2% 4.6% 4.0% 5.3%

Unit: KRW 100M2010

(K-IFRS)

2011

(K-IFRS)

2012

(K-IFRS)

2013

(K-IFRS)

Current assets 7,806 11,400 10,837 9,896

Non-current assets 7,662 7,926 9,466 10,060

Total assets 15,468 19,326 20,304 19,956

Current liabilities 4,835 6,676 7,386 6,353

Non-current liabilities 1,808 3,098 2,878 2,608

Total liabilities 6,643 9,774 10,264 8,961

Issued capital 300 300 300 300

Additional paid-in

capital264 264 275 274

Retained earnings 7,151 7,925 8,857 9,870

Other capital

components952 881 408 315

Minority Interest 157 181 200 235

Total liability &

equity8,825 9,552 10,039 10,994

Debt ratio 75.3% 102.3% 102.2% 81.5%

v P/L v B/S

23

Stock Price & Valuation

Category 2011 2012 2013 2014(E) 2015(E)

Sales

(KRW 100M)21,474 24,704 22,192 24,795 26,715

Operating

Income

(KRW 100M)1,424 1,734 1,546 1,612 1,926

Net Profit

(KRW 100M)988 996 1,166 1,207 1,458

EPS(1KRW) 16,009 16,084 18,907 19,582 23,660

BPS(1KRW) 161,563 169,239 185,063 200,205 223,011

PER(X) 4.1 5.8 4.7 5.0 4.2

PBR(X) 0.4 0.6 0.5 0.5 0.4

ROE(%) 12.0 10.1 11.0 10.5 11.5

EV/

EBITDA(X)4.4 4.6 5.6 5.4 4.3

IFRS base

‘14, ’15 E) : Eugene Investment & Securities, report (Feb. 2014)

v Investment Index

[Source : Stock Exchange, yearly average stock price & monthly price]

52,650

39,479 41,129

76,481

95,152 97,825

109,143

2008 2009 2010 2011 2012 2013 `14.03

(Unit: 1 KRW/Stock)

v Trend of Stock Price Highest

Lowest

124,500

77,000

112,500

78,200

Average

24

Table of Contents

Appendix 01. Operating Plant (Domestic)

02. About SeAH Group

25

Operating Plant (Domestic)

v Pohang Plant v Gunsan Steel Pipe Plant

v Changwon Plant v Gunsan Flat Rolled Products Plantv Suncheon Plant

26

About SeAH

Mine Products