BlueScope investor & analyst visit April 29, 2014 Important - PDF document

1 BlueScope investor & analyst visit April 29, 2014

Important BlueScope 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. THIS PRESENTATION CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS, WHICH CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS “MAY”, “WILL”, “SHOULD”, “EXPECT”, “INTEND”, “ANTICIPATE”, “ESTIMATE”, “CONTINUE”, “ASSUME” OR “FORECAST” OR THE NEGATIVE THEREOF OR COMPARABLE TERMINOLOGY. THESE FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE OUR ACTUAL RESULTS, PERFORMANCE AND ACHIEVEMENTS, OR INDUSTRY RESULTS, TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCES OR ACHIEVEMENTS, OR INDUSTRY RESULTS, EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. TO THE FULLEST EXTENT PERMITTED BY LAW, BLUESCOPE STEEL AND ITS AFFILIATES AND 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. 2

3 North Star BlueScope Steel

Senior Management Team PRESIDENT MIGUEL ALVAREZ VP OPERATIONS VP HUMAN VP SALES & VP BUSINESS DEV. VP FINANCE JEFF RESOURCES MARKETING & PROCUREMENT JOE BUDION JOLDRICHSEN RICH MENZEL MIKE HANSON HECTOR MARQUEZ  Miguel Alvarez; joined company in Feb 2010, comes from BlueScope’s Steelscape business, where he was President for 6 years  Jeff Joldrichsen; with company since start up, comes from Cargill’s North Star Steel business  Joe Budion; started up the company, returned to Cargill for several years and came back 6 years ago  Rich Menzel; came from Cargill’s North Star Steel business and has been with company since start up  Mike Hanson, joined the company 13 years ago, came from Cargill’s North Star Steel business  Hector Marquez; joined company in Oct 2010, comes from BlueScope’s Steelscape business 4

Our Mission To be the preferred supplier in the steel industry by being the benchmark for safety, quality, service and on-time delivery North Star BlueScope Steel is a 50-50 joint venture between Cargill, Inc. and BlueScope, established in 1995 Current production capacity of 2.2M short tons versus initial capacity of 1.6M short tons – – Original construction capital cost was US$500M (100%); since then company has invested about US$200M, which includes installation of a new bag house to upgrade emissions control Cargill, based in Minnesota, is a BlueScope is a flat steel producer for producer and manufacturer of food, the domestic Australian, NZ and US agricultural, financial, industrial markets and is a leading international products and services. Cargill supplier of steel products and employs over 143,000 people in 67 solutions principally focused on the countries. global building and construction industries 5

6 Our Competitive Advantage

Safety  Core Value  Home Safety Program  100% involvement from employees:  Record Highlights in FY2013 – Safety audits every month – Lowest RIFR rate for plant – Near miss incident reporting and – 12th time in 16 years of operations without a investigations Lost Time Injury (achieved 3 years without a – Incident investigation of serious LTI in Jan-14) incidents Actual Number of Incidents 12 11 Lost time injuries 10 Recordables 10 9 9 8 7 6 4 4 4 4 3 2 1 1 1 1 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 7

Our People  Employ over 360 dynamic, highly skilled, and flexible workforce  Our high performance workforce is completely non-union and company has never had to contend with collective labor contracts, work stoppages, nor layoffs in our entire plant history  Turnover has been low (less than 5%) over the past six years  A profit sharing plan aligns the interests of employees with the Company’s performance – Approximately 50% of overall compensation is “at Risk”, in other words tied to weekly bonus and annual profit sharing based on production performance metrics, safety, and earnings 8

Strategically Located  Mill located at Delta, Ohio (20 miles west of Toledo)  Directly within one of the largest scrap steel surplus regions in North America  Situated one mile south of the Ohio Turnpike (I-80/I-90) and connected to a Norfolk Southern rail line  Most customers within 250 mile radius of mill (currently around 90%)  Near a number of major manufacturing hubs 9

Flat Rolled Market  Approximately 26M short ton p/a U.S. domestic market for hot rolled coil (excludes use for in-house re-rolling)  NSBSL has increased U.S. domestic HRC market share to 8% in FY2013, and maintained near 100% capacity utilization post GFC Capacity Utilisation – NSBSL vs U.S. Steel Industry Producers  Sources: NSBSL, AISI, Steel Research Associates 10

End Markets and Customer Base End Markets Customer Base  Automotive builds were strong in 2013: Industry Sales of 15.6M units versus 14.5M in 2012  Application of our steel includes: Industrial (tanks, rail cars, barges, cylinders), Agriculture (grain bins, ag equip.), Construction (guardrail, tubing, metal structural), Automotive (non- exposed auto parts) 11

Trading Conditions in June 2014 Half  Capacity utilization and sales volume remain aligned at 100% of capacity  Metal margins (spreads) so far this half are similar to first half 2014 12

Benchmark in Customer Satisfaction Customer satisfaction (Jacobson Survey)  Since 1992 Jacobson & Associates has conducted continuous surveys of more than 2,000 major steel customers in North America  Customers use a 10 point scale to measure their overall level of satisfaction with supplier in the areas of: – Quality – Delivery – Service  This is the 12th year in a row North Star BlueScope has received the highest rating from the Jacobson Survey 13

Production Overview  Production facilities were built between 1995 and 1996, making the mill among the newest in North America  State of the art equipment includes: – Two Fuchs (Germany) Electric Arc Furnaces – A Sumitomo (Japan) Caster – A Danieli (Italy) Hot Strip Mill  Originally built with production capacity of 1.6 million tons per year – Since expanded to the current level of 2.2 million tons per year by increasing caster thickness and ongoing process improvements  Located on 524 acres  Norfolk Southern rail line is connected at the southern boundary of the property 14

Production Levels Production Volume (million short tons) 2.5 2.15 2.17 2.11 2.12 2.05 2.05 1.98 2.00 2.0 1.80 1.78 1.73 1.64 1.57 1.5 1.0 0.5 0.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013  Company produces solely hot rolled coil of various grades  Mill has been operating at high capacity utilisation since December 2009  More than 400 trucks come to the facility every day to deliver raw materials  Finished products breakdown – Medium Carbon – 20% (construction applications) – Low Carbon – 26% (used in auto parts) – High Strength Low Alloy (HSLA) – 47% (auto accessories & components) – Boron – 7% 15

Raw Materials  Principal raw materials: – Pig Iron – raw iron with high carbon content (typically 3.5%-5.0%) – Scrap – recycled metal suitable for reprocessing. Scrap types include: Clips, #1 Frag, #2 Frag, Plate & Structural, Roll Mill Scrap. Prime and obsolete scrap in broadly equal proportions. – Alloys – various alloys of iron such as ferroalloys (which have a high proportion of one or more elements such as silicon, manganese, or nickel) that are added to steel refining process to increase corrosion resistance, hardness, formability and/or strength – Pig Iron sourced from Brazil, Russia, and Ukraine – Shipped via vessels, to New  2.1 Orleans or the Port of Toledo Pig Iron – At NOLA, pig iron is transferred to M NSBSL river barges and shipped to either Cincinnati, OH or Naples, IL. 2.1M Tons Feed – Pig Iron is then railed to North Star Tons HRC Stock HRC Yield Needs 2.3M tons – Scrap procured from a 250 mile radius Recycled – Best third party reference price Scrap series to look at is AMM CBP#1 bushelling Chicago 16