Bluescope Steel
 

Performance Overview FY2010 - Bluescope Steel Business SegmentsPerformance Overview FY2010 - Bluescope Steel Business Segments

Coated and Industrial Products Australia

Coated and Industrial Products Australia

Lower result from reduced spread and strong Australian dollar

  • Impacted by lower margins, but still delivered an underlying EBIT of $108 million with a 22% increase in domestic sales volume and the benefit of significant cost improvement initiatives
  • External export sales volume improved 46% over FY2009 on improved customer demand, and supported by resumed production from No 5 Blast Furnace from August 2009, following its successful reline
  • Pricing of COLORBOND® steel remained stable; metal coated products pricing declined compared to FY2009 largely due to the strong Australian dollar
  • Western Port and Springhill production volumes increased across all lines as customer demand improved
  • Second half result improved over first half particularly due to stronger international steel prices
 
  FY 2010 FY 2009
External Despatches
('000s of tonnes)
Domestic 1,870 1,535
Export 1,576 1,082
Revenue ($M) 4,745 5,291
EBIT ($M) 84 206
Underlying EBIT ($M) 108 141
Net Operating Assets (pre-tax) ($M) 3,464 3,322
Return on Net Assets (pre-tax) 2% 6%

Australia Distribution
and Solutions

Australia Distribution  and Solutions

Lower margins reduce earnings

  • Strong Australian dollar results in pricing pressure in domestic market, leading to lower margins
  • Despatch volumes for BlueScope Lysaght marginally higher
  • Soft market conditions continue due to lower consumer demand across most regions of Australia in residential housing sector
  • Stronger demand in the building market led to higher production for the Sheet and Coil Processing business
  • Pioneer Water has stronger sales activity from seasonal rural spending but building delays in West Australia reduce revenues for Highline
  • Interest in BlueScope Buildings range, including pre-engineered steel buildings, remote steel framing supply, and steel building facades, is growing
 
  FY 2010 FY 2009
External Despatches
('000s of tonnes)
Domestic 754 755
Export 11 9
Revenue ($M) 1,762 2,121
EBIT ($M) 12 (23)
Underlying EBIT ($M) 2 9
Net Operating Assets (pre-tax) ($M) 881 926
Return on Net Assets (pre-tax) 1% (2%)

NEW ZEALAND AND PACIFIC
STEEL PRODUCTS

NEW ZEALAND AND PACIFIC STEEL PRODUCTS

Year of solid performance

  • Domestic despatches 10% higher on improved demand, particularly driven by manufacturing end-use segment
  • New steel framing brand, Axxis®, launched with total framing sales up 24%
  • Export demand relatively strong
    but conditions remain challenging
  • Markets and project work in Pacific Islands business underpinned strong coated volumes
  • Production levels higher across the product range
  • Iron sands exports rose by 33%
    and vanadium volumes up 4%
 
  FY 2010 FY 2009
External Despatches
('000s of tonnes)
Domestic 265 241
Export 241 273
Revenue ($M) 618 695
EBIT ($M) 73 65
Underlying EBIT ($M) 73 87
Net Operating Assets (pre-tax) ($M) 398 346
Return on Net Assets (pre-tax) 19% 20%

COATED AND BUILDING
PRODUCTS ASIA

COATED AND BUILDING  PRODUCTS ASIA

Performance turnaround with
record profits

  • Asia business led overall results with underlying EBIT $116 million
  • Strong market focus and major cost reductions resulted in improved domestic sales volumes and margins
  • Improved domestic market conditions in Indonesia increased demand for residential steel roofing and steel building frames
  • Construction of second metallic coating line in Indonesia on track to be operational in third quarter FY2011
  • Political environment in Thailand stablised but markets remain cautious
  • Sales volumes rise for China Butler Buildings by 27% and by 29% for Lysaght from improved industrial and public sector demand
 
  FY 2010 FY 2009
External Despatches
('000s of tonnes)
Domestic 889
717
Export 89 109
Revenue ($M) 1,349 1,543
EBIT ($M) 116 (94)
Underlying EBIT ($M) 116 (21)
Net Operating Assets (pre-tax) ($M) 899 833
Return on Net Assets (pre-tax) 14% (8%)

HOT ROLLED PRODUCTS
NORTH AMERICA

HOT ROLLED PRODUCTS  NORTH AMERICA

Impressive result from North Star BlueScope Steel, our US steel-making joint venture

  • $119 million increase in underlying EBIT mainly due to a 33% increase in despatch volumes
  • High capacity utilisation rates maintained due to reputation for on-time delivery, quality and customer responsiveness
  • Recovery in auto sales and production, service centre restocking and an improved agricultural sector lifts sales volumes
  • Receives highest customer satisfaction rating in Jacobson & Associates survey for eighth consecutive year
 
  FY 2010 FY 2009
External Despatches
('000s of tonnes)
Domestic 924 693
Export
Revenue ($M)
EBIT ($M) 61 (58)
Underlying EBIT ($M) 61 (58)
Net Operating Assets (pre-tax) ($M) 172 183
Return on Net Assets (pre-tax) 34% (22%)

COATED AND BUILDING PRODUCTS NORTH AMERICA

COATED AND BUILDING PRODUCTS NORTH AMERICA

Challenging year in a tough market

  • Steelscape increased market share with despatches up 37% due to improved demand
  • Demand for new non-residential buildings weak with external despatches down 35% for BlueScope Buildings
  • Integration program in Buildings business over last 2 years improves its ability to handle current market weakness and materially benefit from future market improvement
  • External shipments lower for ASC Profiles and Metl-Span from continued weak economic conditions
 
  FY 2010 FY 2009
External Despatches
('000s of tonnes)
Domestic 521 553
Export 14 19
Revenue ($M) 1,307 2,189
EBIT ($M) (21) (93)
Underlying EBIT ($M) (16) 9
Net Operating Assets (pre-tax) ($M) 806 919
Return on Net Assets (pre-tax) (3%) (8%)