1H FY2011 Presentation - FINAL - Amazon S3 · THIS PRESENTATION IS NOT AND DOES NOT FORM PART OF ANY OFFER INVITATION ... (192)M (591%) Page 4 Interim ... y Nee a age e ea ade c a

1H FY2011 Results Presentation 1H FY2011 Results Presentation Six Months Ended 31 December 2010Paul O’Malley, Managing Director and Chief Executive OfficerCharlie Elias, Chief Financial Officer 21 F b 201121 February 2011

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ASX Code: BSL

Important notice

THIS PRESENTATION IS NOT AND DOES NOT FORM PART OF ANY OFFER INVITATION OR 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 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 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,

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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.

Introduction & HeadlinesIntroduction & HeadlinesIntroduction & HeadlinesIntroduction & Headlines

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Safety – our target remains Zero Harm

18

Medically Treated Injury Frequency RateLost Time Injury Frequency Rate70

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Reported performance for8.0

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ally t

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Reported performance for World Steel member companies

(employees & contractors)

3.54.1

3.52.8

1.8 1.60.9 0.8 0.9 0.60.9

0.6 0.9

0

2

4

Lost

tim

12.49.4 8.3 9.3

6.64.9 4.25.76.8 6.4

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1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011YTD

01995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

YTD

Includes Contractors from 1996Includes Butler from May 2004

Includes Contractors from 2004Includes Butler from May 2004

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Includes Butler from May 2004Includes 2007/8 acquisitions

Includes Butler from May 2004Includes 2007/8 acquisitions

Group financial headlines 1H FY2011 vs. 1H FY2010

SIX MONTHS ENDED 31 DEC VARIANCE2009 2010 %

Revenue A$4,103M A$4,622M 13% External despatches 3,304M tonnes 3,841M tonnes 16% EBITDA − Reported A$154M A$127M -

− Underlying A$155M A$134M (14%)EBIT − Reported A$(23)M A$(48)M -

Underl ing A$(22)M A$(41)M (86%)− Underlying A$(22)M A$(41)M (86%)NPAT − Reported A$(28)M A$(55)M -

− Underlying A$(53) M A$(47)M 11 %EPS − Reported (1.6)¢ (3.0)¢ -EPS Reported (1.6)¢ (3.0)¢

− Underlying (2.9) ¢ (2.5)¢ 14%EBIT Return on Invested Capital (0.7)%/(0.7)%* (1.5)%/(1.2)%* -Return on Equity (1.0)%/(1.9)%* (2.0)%/(1.7)%* -Net Operating Cashflow− From operating activities A$252M A$(16)M (106%)− After capex / investments A$39M A$(192)M (591%)

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Interim ordinary dividend (fully franked) 0cps 2cps -Gearing (net debt) 11.6% 14.2% Below 25-30% target

Note: * Underlying Returns

Asset carrying value assessment results in net impairmentwrite down of A$9M

In accordance with accounting standards:In accordance with accounting standards:

1. China Coated business at Suzhou – partial impairment write back of A$68MCommissioned in late 2006; A$270M costCommissioned in late 2006; A$270M costA$190M write down in Dec 2007 due to poor financial performance (volumes & margins) and continued weaker outlook. Further A$25M write down in Dec 2008 at depth of GFCNew management team made changes to the business operations which have, along with the continued strength e a age e ea ade c a ges o e bus ess ope a o s c a e, a o g e co ued s e gof the Chinese economy, resulted in a material growth in Suzhou earnings over the last two years: delivered healthy underlying EBIT for last three halves ($8M in 1H FY2010, $5M in 2H FY2010, $10M in 1H FY2011)Hence, write back to asset base due to this improvement and positive earnings outlook

2. BlueScope Distribution business – impairment write down of goodwill of A$77MTotal investment in acquired assets in August 2007 of A$750MThis write-down of goodwill was due to a revised medium term outlook for the business that is influenced by the current reduced market demand and increased import competition which is driving lower marginsManagement is actively progressing initiatives to grow volumes and improve earnings, however expectations are that the challenging set of circumstances in the Australian distribution sector could delay a return to improved

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that the challenging set of circumstances in the Australian distribution sector could delay a return to improved financial performance in the short term

Segment summary

1H FY2010 2H FY2010 1H FY2011 1H FY2011 2H FY2011

Underlying EBIT, A$M Comments

1H FY2010 2H FY2010 1H FY2011 1H FY2011 2H FY2011

Coated & Industrial Products Australia (80) 188 (97)

Spread contraction; domestic / export sales mix

Spread expansion in Q4?

Australia Distribution & Solutions 3 (1) (15) Imports & margins Remains challenging

New Zealand Steel and 21 52 49 Benefit of minerals Solid earnings Pacific Steel Prod. 21 52 49 Benefit of minerals expected

Coated & Building Products Asia 50 66 46 Thailand weaker;

exchange ratesStronger performance expected

Coated & Building Products North America

11 (27) (16) Non-res buildings flat Market conditions improving slowly

H t R ll d P d t M t i l i t Hot Rolled Products North America 14 47 8 Spread contraction Material improvement

if spreads hold

Corporate & inter segment (41) (48) (16)

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& inter-segment

TOTAL GROUP (22) 277 (41)

Coated & Industrial Products Australia heavily impacted by rising cost of raw materials

Coated & Industrial Products Australia – Underlying EBIT

Net Spread Reduction $250m $250M unfavourable net spread movement in 1H

FY2011 vs. 2H FY2010 driven by:

+106

+188

Iron ore costs $195M unfavourable: trailing quarter index average fines price moved up from US$114/t to US$147/t CFR China (62% Fe)

-356

Coal costs $153M unfavourable: coal price averaging on old benchmark in 2H FY2010; 1H FY2011 stepped up based on average of two quarters Asian contract price US$217/t

Weaker export HRC prices, but marginally stronger export slab prices

Small improvement in domestic selling prices

97

-35

Small improvement in domestic selling prices

$8M unfavourable other raw materials costs; NRV adjustments largely netting off opening stock adjustment

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Dec-10 HY

-97

OtherPricesJun-10 HY Raw Material Costs

Global external despatch volumes broadly unchanged from 2H FY2010, however Australian exports increased due to lower domestic sales

1H FY2010 2H FY2010 1H FY2011

%6%5%

6% 3% 20%11%4%

Exports33%

(1,266kt)

Exports24%

(794kt)

Exports29%

(1,137kt) 11% volume increase(of which 1,112kt Australia’s share)

19%

18%

6%22%

15%

6% 3% 20%

18%

11%

12%

13%

30%

18%

36%4%

12%37%4% 30%

3%14%

3,304kt 3,850kt 3,841kt 16% increase 0.2% declineTotal External Sales , ,

Exports – AsiaKeyDomestic sales (produced and sold within country)

,Sales

Export sales

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Exports – Europe/Med/Middle East/India

Exports – AmericasAustralia

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

Asia

Note: Percentages have been rounded.

Australia: BlueScope’s biggest and most important market saw lower external sales volume in 1H FY2011

1H FY20092H FY2008 2H FY2009 1H FY2010BSL EXTERNAL DESPATCH VOLUMES(1)

1,800 2H FY2010 1H FY2011

1,400

1,60060%

62%63%

61%25% (409kt)

25% (371kt)

nes 1,000

1,200

Non-dwellingConstruction

63%

66%22% (353kt)

25% (371kt)

24% (350kt)

26% (321kt)27% (368kt)

23% (324kt)

64%

27% (313kt) (3)

‘000 t

onn

400

600

800

Engineering

Dwelling

17% (272kt)

12% (176kt)

17% (249kt)

27% (220kt)

29% (241kt)12% (149kt)

12% (167kt)

15% (202kt)

13% (211kt) 25% (315kt)23% (324kt)

(4)10% (122kt)

27% (319kt) (3)

G0

200

400

Auto & transportAgri & miningManufacturing

14% (225kt)

9% (144kt)

13% (189kt)

9% (131kt)

10% (81kt)16% (135kt)10% (84kt)8% (63kt)

17% (216kt)

11% (141kt)8% (101kt)

15% (202kt)

14% (189kt)

9% (131kt)

15% (176kt)

12% (138kt)9% (100kt)

GrossDespatches 1,614kt (9%) 1,466kt (44%) 824kt 51% 1,243kt 11% 1,381kt (15%) 1,168kt

Less(2) (246kt) (192kt) (140kt) (164kt) (166kt) (161kt)NormalisedD t h 1,368kt (7%) 1,274kt (46%) 684kt 58% 1,079kt 13% 1,215kt (17%) 1,008kt

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Notes: (1) Percentages have been rounded. Adjustments to prior published volumes reflects detailed re-evaluation of Distribution customer segments. Includes sales from both C&IPA and AD&S segments.(2) Normalised despatches exclude third party sourced products, including long products.(3) Non-dwelling and dwelling includes all of the CIPA Australian Domestic Building Sector and an allocation of sales from Australian Domestic Industrial Sector (being estimates of Distribution Channel and Pipe and Tube

customer sales into these end use segments).(4) Engineering includes infrastructure such as roads, power, rail, water, pipes, communications and some mining-linked use.

Despatches , ( ) , ( ) , , ( ) ,

Why lower domestic Australian despatches?

Total Australian External Despatches by Reporting Segment (kt), last three half years

867

1,003

798

376

378

370

1H FY2010

2H FY2010

1H FY2011

1,243

1,381

1 168Aus Distribution & Solutions (AD&S)Coated & Industrial Products Aus (C&IPA)

798 3701H FY2011 1,168

• AD&S volumes largely steady in the last three halves, albeit 20% below pre-GFC levels due to: (i) reduced market; and (ii) increased imports

• C&IPA volumes have varied: restocking evident in 2H FY2010 and destocking in 1H FY2011 particularly in volumes to

B ilding constr ction E i i t ti

• C&IPA volumes have varied: restocking evident in 2H FY2010 and destocking in 1H FY2011, particularly in volumes to distribution channel customers. Appears underlying end-use demand (stripping out restocking and destocking effects) in 1H FY2011 was flat to slightly down on 2H FY2010, however our sales were impacted by high global steel availability and strong A$

Building construction• Residential activity largely steady from 2H FY2010 into 1H

FY2011; anticipate slight slow-down in near term as lower approvals flow through

• Non-dwelling saw reducing government spend (schools

Engineering construction• Declining underlying demand with some project activity having

tapered off (Victorian desalination plant, QSN3 pipeline)• Long term outlook for projects looks healthy, but import

competition on high A$ is a concerndevelopments), and weaker commercial & industrial spend

• Sales impacted by distributor destocking and structural pipe & tube volumes

p g

Agriculture & Mining

Manufacturing, Auto & Transport• Decline in domestic manufacturing. High import competition in coil

and finished goods (hot water systems whitegoods)

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Agriculture & Mining• Overall growth in Australian mining segment, but …• Mining investment has limited flat steel intensity, and strong

competition from imported pre-fabricated goods, particularly in WA

and finished goods (hot water systems, whitegoods)• Direct sales to Auto OEMs remained steady in 1H FY2011, but

decline in distribution channel sales on lower domestic auto component manufacturing

Australian Floods – potential impact on BlueScope

The floods’ impact on BSL was mainly in the state of Queensland:The floods impact on BSL was mainly in the state of Queensland:– Queensland represents in the order of 20-25% of BlueScope’s Australian domestic revenue (C&IPA and AD&S

segments) Particularly strong market for roofing and fencing steels– Particularly strong market for roofing and fencing steels.

– Operational impact:• 19 AD&S branches closed at time of floods, but now operational except for Distribution’s Oxley and

L ht’ R kl b h hi h i d t d f bi h t k dLysaght’s Rocklea branches which were inundated; refurbishment works now underway– Financial impact:

• Estimate $10-15M total EBIT impact in 2H FY2011, predominantly arising from reduced volumes (evenly split between C&IPA and AD&S segments)

• Rebuilding efforts likely to result in some volume increase in late FY2011 and FY2012, but too early to quantify

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BlueScope’s metallurgical coal supplies not impacted by floods. However, adverse price impactin June 2011 quarter anticipated

Global Business Global Business Environment & the Steel Environment & the Steel Environment & the Steel Environment & the Steel

IndustryIndustry

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Global steel production is at near record levels again, driven primarily by the BRICs. Rest of world remains below pre-GFC level …

Monthly World Crude Steel Production(Jan 00 – Nov 10)Tonnes (Millions) C *

World(Jan 00 Nov 10)Tonnes (Millions)

120

130

World (Excl BRICs)BRICs *

90

100

110

120

60

70

80

90

40

50

60

10

20

30

Page 13Source: WSA Monthly Report

0Jan 11Jan 10Jan 09Jan 08Jan 07Jan 06Jan 05Jan 04Jan 03Jan 02Jan 01Jan 00

Note: * Brazil, Russia, India and China

… which is reflected in continuing capacity utilisation levels considerably below pre-GFC levels …

Crude Steel Capacity Utilisation*(Jan 00 Nov 10) World(Jan 00 – Nov 10)

Utilisation (%)

110%

115%World (Excl China)China

95%

100%

105%

0%

80%

85%

90%

95%

74%77%

71%

65%

70%

75%

80%

50%

55%

60%

65%

Page 14Source: WSA

*Note: Crude steel capacity utilisation is calculated based on the WSA 66 reporting countries, representing approx 96% of global crude steel capacity

50%Jan 11Jul 10Jan 10Jul 09Jan 09Jul 08Jan 08Jul 07Jan 07Jul 06Jan 06Jul 05Jan 05Jul 04Jan 04Jul 03Jan 03Jul 02Jan 02Jul 01Jan 01Jul 00Jan 00

… and along with higher priced raw materials contributing to ongoing steel margin volatility

Indicative Steelmaker HRC Spread (A$/t)SBB East Asia HRC price less cost of 1 5t iron ore fines and 0 71t hard coking coal

$700

$800

SBB East Asia HRC price less cost of 1.5t iron ore fines and 0.71t hard coking coal

$500

$600

A$/t

$200

$300

$400A$/t

$0

$100

$200

Jan-11Jan-04Jan-03Jan-02Jan-01Jan-00 Jan-09Jan-08Jan-07Jan-06Jan-05 Jan-10Source: SBB, CRU, Platts, TSI, Reserve Bank of Australia, BlueScope Steel calculations

Note:‘I di ti t l k HRC d’ t ti b d i l i t bl d f 1 5t i fi d 0 71t h d ki l t t t f t l Ch t i t i t

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• ‘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 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.

• Re iron ore pricing used: 62% Fe iron ore fines price assumed. Industry annual benchmark prices up to March 2010. Quarterly index average prices from April 2010, lagged by one quarter; FOB estimate deducts BCI WA C5 from CFR China price.

• Re hard coking coal price used: industry annual benchmark prices up to March 2010; quarterly industry prices thereafter.

There is evidence of ongoing recovery in major economies, eg PMI Indices (manufacturing activity) are improving, but Japan remains weak …

6160

65United States

5760

65Eurozone

45

50

55

60 PMI Index57

45

50

55

60

ExpansionContractionSupported by weak

dollar for exports

PMI Index

30

35

40

30

35

40dollar for exports

Jan 11Jul 10Jan 10Jul 09Jan 09Jul 08Jan 08 Jan 11Jul 10Jan 10Jul 09Jan 09Jul 08Jan 08

60

65China

PMI Index

65

60Japan

PMI Index53

45

50

55Expansion

Contraction

5155

50

45

40

30

35

40

Jan 11Jul 10Jan 10Jul 09Jan 09Jul 08Jan 08

40

35

30Jan 11Jul 10Jan 10Jul 09Jan 09Jul 08Jan 08

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Jan 11Jul 10Jan 10Jul 09Jan 09Jul 08Jan 08

Source: Datastream

Note: PMIs are composite indices based on surveying manufacturing companies on a number of variables such as production levels, order books, inventory levels, deliveries, employment and input prices.

… but Japan’s exports have increased more materially due to a weak domestic economy

Japan Total Steel Trade: Feb 88 – Dec 10Thousand Metric Tonnes

Japan Supply & Demand: 1988 – 2014(f)*Imports

0

1,000

2,000ExportsImportsNet Trade

100

120

140

ASUEffective Capacity

Semi ExportsFinished ExportsCrude Production

p(000’s) Tonnes (M’s)

-4,000

-3,000

-2,000

-1,000

20

40

60

80

-5,0001009080706050403020100999897969594939291908988

0

20

141312111009080706050403020100999897969594939291908988Exports (000’s)

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*Note: Effective capacity forecast (2013-2014) based on WSA CAGR% between 2010 to 2012Source: ISSB & WSA

However, the potential Nippon Steel and Sumitomo Metal Industries merger is a positive sign

United States: non-residential market construction has been sluggish but signs of recovery are now appearing. >50% improvement in BSL Buildings order book (YoY) to Jan 2011

Quarterly F. W. Dodge Awards^Square Feet – All story heights

(YoY) to Jan 2011

700,00020

Non-Residential Construction Value of Work DoneAnnual % Change, (Cal Yrs)

Global Insight F’cast (Sept 2010)

400,000

500,000

600,000

6.4

15.5

9.0

4.02.36.7 6.5

0.9

20

15

10

5

10 Yr AverageGlobal Insight F’cast (Jan 2011)

g ( p )

FY11 FY12 FY13 FY14

-4.7% 17.4% 37.7% 27.8%

F.W. Dodge Forecasts:

198,120

100,000

200,000

300,000-0.1-3.5-4.7

-14.8

0

-5

-10

-15-8.3

Monthly Architectural Billings Index* Quarterly MBMA Despatches#Short Tons

Jan-12

Jan 11

Jan 10

Jan 09

Jan 08

Jan 07

Jan 06

Jan 05

Jan-14

Jan-13

2006200520042003200220012000 201220112010200920082007

Billings*

^ Total non-residential contact awards. Includes apartments, hotels, motels, and dormitories

54.2

62.6

55

60

65

70

400,000

500,000Inquiries about New ProjectsBillings

35

40

45

50

195,004200,000

300,000

* Provides an indication of expansion/contraction in non-residential construction 9 to 12 months into the future. This score reflects an increase in demand for design services

ExpansionContraction

Page 18

30

35

Jan 11Jan 10Jan 09Jan 08Jan 07Jan 06Jan 05

Source: F.W. Dodge, MBMA, AIA, Global Insight

100,000Jan 11

Jan 10

Jan 09

Jan 08

Jan 07

Jan 06

Jan 05

score reflects an increase in demand for design services (any score above 50 indicates an increase in billings). # Total domestic metal building manufacturer shipments

China: GDP adjusting to more sustainable growth outlook; construction activity remains robust; the challenge is migration to consumption based economy

Gross Domestic ProductQuarterly YoY % Change

Monthly Leading Indicator of Industrial ProductionYoY % Change

16 28%

9.810

12

14

16%

20%

24% IP (3 month moving average)LI

2

4

6

8

10.313.3

4%

8%

12%

10 Yr Average (9 8%)Actual

0Jan 11

Jan 10

Jan 09

Jan 08

Jan 07

Jan 06

Jan 05

Jan 04

0%Jan 11Jan 10Jan 09Jan 08Jan 07Jan 06Jan 05Jan 04

Residential Construction Work Done Non-Residential Construction Work Done

10 Yr Average (9.8%)

Annual % Change(Cal Yrs)

Annual % Change(Cal Yrs)

20.217.418.320

25

25.325

30

35

10 Yr AverageGlobal Insight F’cast (Sept 2010)Global Insight F’cast (Jan 2011)

10 Yr AverageGlobal Insight F’cast (Sept 2010)Global Insight F’cast (Jan 2011)

8.49.0

14.313.215.8

17.4

5.87.88.2

6.6

5

10

1512.0

13.08.8

13.4

20.421.722.0

12.916.1

10.211.412.8

10

15

20

25

14.1

g

Page 19Source : IMA Asia, EIU, Datastream, Global Insight

0

5

200820072006200520042003200220012000 20122011201020090

5

2012201120102009200820072006200520042003200220012000

Development of new combined Butler PEB and Lysaght rollformingfacility in Xi’an due to strong growth outlook in central China

• To pursue construction of a new joint Butler and Lysaght plant in Xi’an The plant will be similar • To pursue construction of a new joint Butler and Lysaght plant in Xi an. The plant will be similar to existing plant in Guangzhou

• Plant expected to be operational by end of CY2012• Expected capital cost approximately A$60M

800 KM

800 KM

800 KM

800 KM

Page 20

800 KM

Global business environment and the steel industry – summary

Global steel production at near record levels driven by BRICs

Reflected in world steel capacity utilisation considerably below pre-GFC levelsp y y p

Along with high priced raw materials, contributing to steel margin volatility

However, evidence of ongoing recovery in major economies, apart from Japan

Japan’s steel industry consolidation (Nippon Steel & Sumitomo Metal Industries’ proposed merger), could lead to further global steel industry consolidation

Signs of recovery in U.S. non-residential market

China appears to be on a more sustainable growth path

Page 21

Financial Results Financial Results

Page 22

Historical earnings performance

A$ Millions FY2007 FY2008(3) FY2009 FY2010 1H FY10 2H FY10 1H FY11

Revenue(1) 8,913 10,495 10,329 8,624 4,103 4,521 4,622

EBITDA – Reported(2) 1,423 1,420 380 590 154 436 127(6)

EBIT(2) – Reported 1,099 1,063 15 240 (23) 263 (48)

– Underlying(4) 1,057 1,273 171 255 (22) 277 (41)

(6)

NPAT – Reported 686 596 (66) 126 (28) 154 (55)

– Underlying(4) 643 816 56 113 (53) 166 (47)

(6)

EPS(5)(cps) – Reported 95.3 80.1 (7.1) 6.9 (1.6) 8.5 (3.0)

– Underlying(4) 89.3 109.6 6.1 6.2 (2.9) 9.1 (2.5)

(6)

Notes:(1) Does not include North Star BlueScope Steel revenue, which was A$316M (1H FY2011) vs. A$280M (1H FY2010).(2) Includes 50% share of North Star BlueScope Steel net profit before tax.(3) Includes eleven months of BlueScope Distribution financial results and five months IMSA steel businesses financial results.(4) Underlying numbers represent Reported numbers adjusted for unusual or non recurring events to reflect underlying financial performance from ongoing

Page 23

(4) Underlying numbers represent Reported numbers adjusted for unusual or non-recurring events to reflect underlying financial performance from ongoingoperations.

(5) EPS for periods prior to the May / June 2009 entitlement offer have not been restated for the bonus element of the entitlement offer.(6) Includes net asset impairment write down of $9M. Australia Distribution & Solutions write down of goodwill $77M and write back of China coated assets

of A$68M.

Underlying EBIT variance 1H FY2010 to 1H FY2011 by major item

Net Spread Reduction $20mRaw Materials:Coal (180)Iron ore (300)S (13)

+92

Scrap (13)Alloys (17)External steel feed (35)Net realisable value provisions (20)Coating metals (21)Opening stock adjustment 235(1)

353

Other (2)

Export Prices:C&IPA 229AD&S -353

+241 Conversion & Other Costs :Cost improvement initiatives 23Escalation (76)One-off / discretionary (mainly volume) 85

AD&S -NZ & Pacific 35C&BP Asia 4C&BP NA -Intersegment (27)

-22 -13+24

y ( y )Other (mainly freight) (8)

Dec-10 HY

-41

Exchange Rates

Conversion & Other Costs

+24

North Star

-6

Mix

+35

Volume

-39

Raw Material Costs

Domestic Prices

Export PricesDec-09 HY (2) (2)

Page 24

Note: 1) Opening stock adjustment predominantly reflects the net movement comparing: - the bleed-out of lower priced inventory at the start of 1H FY2011; and- the bleed-out of higher priced inventory at the start of 1H FY2010

2) Volume / mix based on 1H FY2010 margins

Underlying EBIT variance 2H FY2010 to 1H FY2011 by major item

Net Spread Reduction $245m Raw Materials:

+81

p $Coal (160)Iron ore (195)Scrap (7)Alloys (8)External steel feed (25)Net realisable value provisions (46)

+72+277

Net realisable value provisions (46)Coating metals (1)Opening stock adjustment 45Other (1)

-398

Conversion & Other Costs:Cost improvement initiatives 17One-off / discretionary (incl volume) 13y ( )Escalation (43)Other 3

-37

-41-1

-29-10

+41-37

Page 25

Note:(1) Volume/mix impact based on 2H FY2010 margins.

Dec-10 HYOther Conversion & Other Costs

North StarMix Export Prices

VolumeJune-10 HY Raw Material Costs

Domestic Prices

Exchange Rates

(1) (1)

Fixed cost and overhead reductions

As advised in August 2010, $658M cumulative savings were achieved by end of FY2010 (vs. FY2008 cost base)

$340M permanent savings $318M temporary savings

These permanent and temporary savings were retained as at 31 December 2010These permanent and temporary savings were retained as at 31 December 2010

During 1H FY2011 an additional $17M reduction in the cost base was achieved

Cost reductions remain an ongoing focus

Notes:• Permanent savings are long-term structural cost reduction initiatives such as improved scheduling techniques, efficiency of supply chain & freight activities, consolidation of operating sites

(Australian Distribution and North America) and consolidation of support services.• Temporary savings are short-term ‘belt tightening’ initiatives (not including direct volume related variable costs) which may return as business conditions improve. Examples include reduced

use of contractors, consultants, travel, renegotiation of procurement of services and supplies spend, deferral of non-essential maintenance and engineering spend.

Page 26

s s, s s, , g p s s s pp s sp , ss g g sp• $658M reduction comprises $132M permanent savings achieved in FY2009, $208M permanent in FY2010 and $318M temporary achieved in FY2010.• Excludes one-off execution costs of $46M in FY2010 and $1M in 1H FY2011.• Excludes impact of cost escalation.

Cashflow

A$ millions FY2007 FY2008 FY2009 FY2010 1H FY10 2H FY10 1H FY11Cash from operations 1 364 1 579 534 596 144 452 166

In general, weaker steel spreads reduced cash

from operationsCash from operations 1,364 1,579 534 596 144 452 166Working capital movement (21) 69 250 (133) 108 (241) (182)Net operating cash flow 1,343 1,648 784 463 252 211 (16)Net investing cash flows

Increase in WC: see balance sheet

description for detail

- Capital & investment exp (493) (1,979) (762) (375) (229) (146) (180)- Smorgon shareholding(1) (319) 447 - - - - -- Other 271 22 34 48 16 32 4N t h fl b f 802 138 56 136 39 97 (192)

Spend limited to mainly “stay-in-

business” categories

Net cash flow before financing & tax

802 138 56 136 39 97 (192)

Financing costs (156) (143) (161) (102) (57) (45) (66)Interest received 6 7 6 9 5 4 5

Predominantly interest costs and commitment fees

(Payment)/refund of income tax (229) (208) (205) 7 12 (5) 4Net drawing / (repayment) of borrowings

(356) 331 (943) (155) (153) (2) 145

Equity issues 221 229 1,836 - - - -Australian tax

consolidated group has carry forward

Dividends (321) (357) (253) (4) (2) (2) (51)Other 2 - - - - - -Net increase/(decrease) in cash held

(31) (3) 336 (109) (156) 47 (155)

has carry forward tax losses(2)

Page 27

cash held All periods normalised to reflect sale of receivables program cash flow movements as debt(1) Purchased 19.9% shareholding in Smorgon Steel in August 2006, disposal in August 2007.(2) The BlueScope Steel Australian tax consolidated group is estimated to have carried forward tax losses, as at 31 December 2010, in excess of $800M. There will be no

Australian income tax payments until these losses are recovered.

Balance Sheet ….conservative stance maintained

Cash balance of prior

As at

A$ Millions 31 Dec 2009 30 June 2010 31 Dec 2010A t

Lower than 2H FY2010 due to seasonal effects

(D l )

halves drawn down in 1H FY2011

Assets Cash 215 251 86Receivables 959 1,199 987

(Dec volumes)

Predominantly rate / feed costs and volume (largely at C&IPA); FX

Inventory 1,587 1,829 1,962

Other Assets 1,426 1,446 1,198

Net Fixed Assets 4 210 4 273 4 175 favourable offset; $46M of additional

NRVs

Net Fixed Assets 4,210 4,273 4,175

Total Assets 8,397 8,998 8,408

Lower than 2H FY2010

Total drawn debt largely unchanged; favourable

Liabilities

Creditors 891 1,120 973

Interest Bearing Liabilities 948 994 999

due to seasonal effects (Dec volumes)

unchanged; favourable FX movements

contributed

Interest Bearing Liabilities 948 994 999

Provisions & other Liabilities 951 1,128 929

Total Liabilities 2,790 3,242 2,901 Generally, decreases in retirement benefit

Page 28

Net Assets 5,607 5,756 5,507

Net Debt / (Net Debt + Equity) 11.6% 11.4% 14.2%

obligations, tax liabilities, employee entitlements and

deferred income

Balance Sheet … $133M increase in inventory since June 2010 predominantly on account of prices and volumes at C&IPA, offset in part by foreign exchange benefits

+2,815 RMS $421M

+1 962-120+109

RMS $338MWIP 569FGS 498Other 182

RMS $397MWIP 639FGS 618Other 175

WIP 690FGS 679Other 172

+1,829

+1,587+1,702+1,660

+1,962-46-120+109+190

$147M in C&IPA

$172M in C&IPA, with reductions in AD&S and C&BPNA

D 2010NRV FXV lR t / J 2010D 2009J 2009D 2008J 2008

Volume change f J 2008 ~ +25% -12% +14%-9%

J 2008

Dec 2010NRV adjustment movement

FXVolumeRate / feed costs

Jun 2010Dec 2009Jun 2009Dec 2008Jun 2008

-1%J 2008

Page 29

from June 2008 vs Jun-2008 vs Jun-2008 vs Jun-2008vs Jun-2008 vs Jun-2008

Note: “RMS” – Raw Materials (including externally sourced steel feed to BSL businesses)“WIP” – Work in Progress“FGS” – Finished Goods

Balance Sheet…maintaining conservative gearing

Gearing at 14% (ND/ND+E). Target range 25-30%

Net debt at 31 December 2010 of $912M (rounded), comprised of $999M of drawn debt less $86M cash

31 December total undrawn facilities and cash of A$1,332M

Net Debt ($M)

11.6% 11.4% 14.2%Gearing(ND / ND+E)

+734

+912-125+294

+743

(ND / ND+E)

+734 +743+44-35

Foreign Exchange:Debt -134Cash 9

Foreign Exchange:Debt 46Cash (2)

Page 30

Dec-10FX translationNon-FX movements

Jun-10FX translationNon-FX movements

Dec-09

Debt Facilities and Maturity Profile as at 31 December 2010

Refinanced the Syndicated Facility in December 2010 to improve debt maturity profile and reduce

915

Refinanced the Syndicated Facility in December 2010 to improve debt maturity profile and reduce financing costs

A$M Cost of Debt

Effective average cost of drawn debt in 1H FY2011 was 7.55%

240757US Private Placement

Plus:

Commitment fees on undrawn bank facilities 675

OtherSyndicated Loan Note Facility

undrawn bank facilities average 1.1%pa

other related costs82

675675

19718682

8098

82

1H 2H 1H 2H 1H 2H 1H 2H 1H

88

2H

Page 31

Notes:Assumes AUD/USD at 1.0167

1H FY16+

2H FY15

1H FY15

2H FY14

1H FY14

2H FY13

1H FY13

2H FY12

1H FY12

2H FY11

EBIT is sensitive to realised export HRC price, raw material costs and foreign exchange movement

Estimated impacton EBIT

A$m Assumption FY2011 (1)Assumption

+/– US$25 / tonne movement in BlueScope’s average realised export HRC price(2)

1¢ movement in Australian dollar / US dollar exchange rate(3)

(indicative)86

+/ 61¢ movement in Australian dollar / US dollar exchange rate(3)

US$10 / tonne movement in NSBSL HRC price to scrap spread2% movement in slab production in Australia, New Zealand & USA

+/–+/–+/–

61013p ,

US$10 / tonne movement in coal costs+/– US$10 / tonne movement in iron ore costs

+/–134082

(1) Full year base exchange rate is US$0.96.(2) 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

$

Page 32

(2) 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.

(3) 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$. Does not reflect impact on Australian domestic pricing.

OutlookOutlookOutlookOutlook

Page 33

Key trends

M k tMarket:

• Improved global steel price environment

• Continued improvement in U.S. economic outlook

• Nippon Steel and Sumitomo Metal Industries’ merger announced. Potential catalyst for further M&Afurther M&A

Operational:

f• Retention of permanent and temporary cost reductions

• Maintained a strong balance sheet: loan note facilities were renewed with extended tenor and improved pricing and gearing was held below 15%and improved pricing, and gearing was held below 15%

• Development of combined Butler / Lysaght facility in Shaanxi province, central China

Page 34

Three key areas of management focus

Aligning Australian manufacturing capacity and market demand to improve margins• Reinvigorate channels and markets egReinvigorate channels and markets, eg

Proactively position to capture mining and energy capital investment spend • Reinvigorate products, eg

New generation substrategNew value added carbon steels

Significantly grow our downstream building & construction business, including:g y g g , g• Expand buildings business globally, including greenfields in developing world and M&A in

developed world• Expand our material erect capability globally• Indonesia & India coating/painting line developments• China expansion in Xi’an

S ll d f i d Structurally reduce manufacturing and support costs• Aggressively pursue opportunities to reduce steelmaking raw material costs• Maximise asset utilisation and effectiveness of supply chain

Continued focus on cost reductions

Page 35

• Continued focus on cost reductions

Well positioned and leveraged to recovery

Second half outlook

Three key drivers will continue to be strong influences:Three key drivers will continue to be strong influences:A$Steel spread (which is a function of HRC and raw material prices)Demand (domestic and global)Demand (domestic and global)

2H FY2011 financial performance will largely depend upon steel spread outcome for Q4, which is currently difficult to forecastcurrently difficult to forecast

At the moment we expect to deliver a breakeven reported NPAT (excluding NRV’s) in 2H FY2011

However, upside earnings leverage is encouraging Current higher steel price environmentCurrent higher steel price environmentRecovery in developed economies, principally the U.S.Continuing strong performance in Asia, including our China expansion

Page 36

Q ti & AQ ti & AQuestions & AnswersQuestions & Answers

Page 37


Page 38

ASX Code: BSL

Other Supporting Other Supporting pp gpp gInformationInformation

Page 39

Reporting SegmentsReporting Segmentsg gg gAdditional InformationAdditional Information

Page 40

Reporting Segments Corporate / GroupCorporate / Group

Australia New Zealand Asia North America

Coated & Industrial Products Australia

New Zealand & Pacific Steel

Products

Coated & Building Products

North America

HotRolled

ProductsNorth America


Asia

Australia Distribution

&Solutions

Leading supplier of flat steel products in Australia Gl b l l t l k

Only fully integrated flat steel maker in New Zealand

Pre-eminent global designer / supplier Pre-engineered buildings

50:50 joint venture with Cargill Inc.Again voted no 1 flat

Pre-eminent seller of branded steel in AsiaLower cost “backward

Leading supplier of flat steel solutions in Australia Global scale steel works

Largest supplier of metal coated and painted steel in Australia

ZealandLeading domestic market share of flat products

Glenbrook NZ

No 2 position in North America and no. 1 in China

BlueScope Buildings North America (pre-engineered

Again voted no. 1 flat rolled steel supplier in North America (Jacobson Survey)

Delta Ohio

Lower cost backward integration” growth strategy

Indonesian, Malaysian, Thailand and Vietnamese

Australia

BlueScope Steel DistributionLysaght Rollforming

Port Kembla Steelworks, NSWSpringhill, NSWWestern Port, VICWestern Sydney (NSW) and

Glenbrook, NZPacific Islands

America (pre engineered buildings)SteelscapeMetl-SpanASC Profiles

Delta, OhioThailand and Vietnamese operationsChina, including ButlerLysaght AsiaIndia – Tata BlueScope JV

BlueScope WaterService CentresBlueScope Buildings

Page 41

y y ( )Acacia Ridge (Qld) Colorbond® facilitiesNorth America, Europe & Asia Export trading offices

Segment business drivers Corporate / GroupCorporate / Group

Australia New Zealand Asia North America

Coated & Industrial Products Australia

New Zealand & Pacific Steel

Products


North America

HotRolled

ProductsNorth America


Asia

Australia Distribution

&Solutions

• Selling prices of steelMaterial costs

• Despatch volumes

• Product mix

• Selling prices of steel• Material costs – mainly

coal fluxes alloys and

• Despatch volume• Margins

P liti l

• Selling prices of steel

• Material costs


• Margins• Material costs –including iron ore, coal, fluxes, alloys, and coating

• Product mix• Margins• Foreign exchange

(eg AUD/USD)

coal, fluxes, alloys, and coating substances

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

• Political developments

• Foreign exchange (USD, Thai baht, RMB, MYR)

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

• Conversion costs

Margins• Foreign exchange

(eg AUD/USD)

substances• Conversion costs• Foreign exchange

(eg AUD/USD)

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

RMB, MYR)• Foreign exchange

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

Page 42


• Domestic / export and product mix

pproduct mix

• Iron sands and vanadium revenue

Australia Australia Australia Australia Coated & Industrial ProductsCoated & Industrial Products

Distribution & Solutions Distribution & Solutions Distribution & Solutions Distribution & Solutions

Page 43

Coated & Industrial Products Australia – underlying EBIT variance analysis (1H FY2011 vs. 2H FY2010)

2H FY10 1H FY11Slab-make 2,537kt 2,643ktTotal despatches 2,510kt 2,406kt

Dom / tot split 49% 41%

+56

Net Spread Reduction $250m Raw Material Costs:Coal (153)Iron ore (195)Alloys (8)Net realisable value provisions (41)

- Dom / tot split 49% 41%Underlying EBITDA $284M $3M

A$M

+50+188

Opening stock adjustment 45Coating metals (4)

EBIT

A

-356

Conversion & Other Costs:Cost improvement initiatives 9Escalation (12)One-off / discretionary 4Other (3)

-97-5-16-2

+41-52

Page 44

Dec-10 HYOtherExchange Rates


MixVolumeRaw Material Costs

Domestic Prices

Export PricesJun-10 HY

Coated & Industrial Products Australia – underlying EBIT variance analysis (1H FY2011 vs. 1H FY2010)

1H FY10 1H FY11Slab-make 2,187kt 2,643ktTotal despatches 2,007kt 2,406kt

Dom / tot split 54% 41%- Dom / tot split 54% 41%Underlying EBITDA $21M $3M

+56

Net Spread Reduction $1mRaw Material Costs:Coal (173)Iron ore (300)Scrap (6)

A$M

Scrap (6)Alloys & coating metals (28)Net realisable value provisions (24)Opening stock adjustment 247Other (2)

(1)

EBIT

A

-286

+229

Conversion & Other Costs:Cost improvement initiatives 8Escalation (25)One-off / discretionary (mainly volume) 53Other (5)

-80-97

-2-3+31

+33-75

Page 45

Dec-09 HY Dec-10 HYOtherExchange Rates


MixVolumeRaw Material Costs

Domestic Prices

Export Prices

Note: 1) Opening stock adjustment predominantly reflects the net movement comparing: - the bleed-out of lower priced inventory at the start of 1H FY2011; and- the bleed-out of higher priced inventory at the start of 1H FY2010

BlueScope Steel – Key drivers of Coated & Industrial Products Australia 1H FY2011 result

2H 2009 1H 2010 2H 2010 1H 2011

East Asia HRC price1, US$/t 452 536 633 611

IO fines, benchmark2 91 61 n/a n/a

Strengthened to ~US$700/t in April (GFMS shows US$750/t), falling to

just above US$600/t in June

Remained marginally above US$600/t

IO fines index avg, one qtr lag3 71 76 114 147

IO fines index avg4 68 92 145 147

through the half

Coking coal5, US$/wmt 300 129 165 217

Average AUD 0.712 0.872 0.894 0.945 AUD strong compared to historical levels

End of period AUD 0.810 0.895 0.850 1.017

PKSW slab production, kt 1,117 2,187 2,537 2,643

C&IPA6 t t l d t h 7 kt 1 430 2 007 2 510 2 406

Production adjusted, together with BF No. 5 reline, to reduce inventory

levels

Notes: 1) Average of monthly Steel Business Briefing East Asia HRC US$/t CFR price.(2) I fi b h k i US$/t FOB P t H dl d

C&IPA6 total despatches7, kt 1,430 2,007 2,510 2,406

C&IPA6 ext despatches8, kt 1,201 1,517 1,929 1,902PKSW blast furnace #5 restarted and

ramped-up during this half

Page 46

(2) Iron ore fines benchmark price, US$/t FOB Port Hedland.(3) Average of Platts, The Steel Index and Metal Bulletin indexes, CFR China ports, US$/t 62% Fe. Average for the period, lagged by one quarter.(4) Average of Platts, The Steel Index and Metal Bulletin indexes, CFR China ports, US$/t 62% Fe.(5) Benchmark prices for 30 June fiscal year; does not reflect BSL’s coal price averaging arrangement for 15 months to 30 June 2010.(6) Coated & Industrial Products Australia division.(7) Includes despatches to parties external to BSL, and despatches to other BSL divisions (eg C&BP Asia, C&BP North America and Aust. Distribution & Solutions).(8) Despatches to parties external to BSL.

Coated & Industrial Products Australia – Despatch Mix

Smorgon Distribution consolidated from Aug

2007 i i t l

IMSA consolidated from Feb 2008. Internal despatches

increase and external Both PKSW

2,6262 5772,688

2007 – increases internal despatches, decreases

domestic external

increase and external despatches decrease due to Steelscape coming ‘in house’

Chart shows despatch volume, kt

Strong 1Q, weaker Blast Furnace

furnaces operable during

the half

Both PKSW furnaces

operable during the half

256441

771 581 504

BSL internalPackaging products 2,510

0

2,0072,051

02,577

0110

02,406

Depth of GFC; Blast Furnace

Strong 1Q, weaker 2Q as markets

started to turn downNo. 5 restarted during this half

635 490Export external

926

,0

1,430

0

7551,096

1,262

Blast Furnace No. 5 offline for most of this half

229926

650

692

0390

7551,104

Domestic external 1,003867509

692

1,0261,1011,0401,059798

Page 47Jun-2010Dec-2009Jun-2009

509

Dec-2008Jun-2008Dec-2007Jun-2007 Dec-2010

PKSW – Production & Despatch Flow

Domestic0 0

Port Kembla SteelworksSlab Production

1H 2011 1H 2010

Slab 872 839

2,643 2,187

Interco521 464 Western Port (2)Inventory movements

& yield losses

Export351 375

Domestic213(3) 256

DomesticExport

HRC1,448 1,112

Springhill(5) /

Hot Strip Mill Port Kembla Steelworks

Despatches(1)

1H 2011 1H 2010 Domestic495 492

Export467(4) 154

Interco768 702

Export273 210

Springhill( ) / DistributionAsia / Nth

Am(6)

1H 2011 1H 20102,494 2,081

Export58 10

Domestic83 82

Plate174 129Plate Mill

Product / DestLegend:

Notes:(1) Slab, HRC and plate. Variances of totals from sum of constituents is due to rounding.

Domestic33 37

Interco33 37

58 10

Distribution

1H 11 kt 1H 10 kt

Page 48

(2) See Coated Australia Annual Capacities slide for Western Port Works capacities.(3) Domestic HRC ex Port Kembla Steelworks only; ie excludes domestic HRC despatches from Western Port when reconciling from the ASX Release, Attachment 1.(4) Export HRC ex Port Kembla Steelworks only; ie excludes export HRC despatches from Western Port when reconciling from the ASX Release, Attachment 1.(5) See Coated Australia Annual Capacities slide for Springhill Works capacities. (6) See ASX Release, Attachment 1 for detail.

Coated Australia – Annual Capacities

Hot Strip Mill1,400 HRCWestern

Port

Cold Mill1 000

Pickle Line1,100 HRC

CRCSlab

Port Kembla Steelworks

Metal Coating Lines 830

1,000

Paint Lines

Metal Coated Strip

Paint Lines330 Painted Strip

HRC

Springhill

Coupled Pickled Cold Mill990 CRC990

Metal Coating Lines 825

Paint Lines

CRC

Metal Coated Strip

Painted Strip

Page 49

Note:Numbers reflect mill capacity in kilotonnes.* There is an additional 215ktpa of combined capacity at Western Sydney and Acacia Ridge (Qld) paint lines.

200* Painted Strip

Port Kembla Steelworks – despatches by half year

2,4942,5552,6112,5992,609

1,361 1,2951 606 1,423 1 322BSL internal*

2,0812,118

1,606

1,411 1,203

1,423 1,322

1,348

699Export external

876710540

490267

526838782

100% exported, with geographic sales split being:

Asia 100%

466 466 479 440 422 296338159Domestic external

Dec-2010Jun-2010Dec-2009Jun-2009

490

Dec-2008Jun-2008Dec-2007Jun-2007External Product Sales Mix

31% sold domestically and 69% exported, with geographic split being:

Other 0%

Slab 30% 36% 30% 23% 22% 43% 28% 30%HRC 54% 51% 54% 57% 66% 47% 60% 58%Plate/Other 16% 13% 16% 20% 12% 10% 12% 12%

Page 50

Asia 41%Europe 29%Americas 13%Other 17%

Plate/Other 16% 13% 16% 20% 12% 10% 12% 12%

Note: *Internal Customers include both domestic and export despatches

Port Kembla Steelworks productivity

6,000 1,800E lProductivity (tonnes per person per year)

oyee

/Yea

r)

4,7055,000

5,500

1 400

1,600

Employees

t, To

nnes

/Em

plo

3 1713,4063,5673,6103,6623,783

4,049

3 500

4,000

4,500

1,200

1,400

de S

teel

Outp

ut3,1073,0873,1713,146

2,500

3,000

3,500

800

1,000

duct

ivity

(Cru

d

1 000

1,500

2,000

400

600

Prod

0

500

1,000

0

200

^*

Page 51

Notes:* 2009 employees – includes 69 transfers in due to internal restructure^ 1H FY2011 annualised

FY11^FY10FY09*FY08FY07FY06FY05FY04FY03FY02FY01

Port Kembla Steelworks – cost profile

Total cost A$m

Raw Materials

Desp & Freight

Conv Costs

1H FY2011FY2010FY2009FY2008FY2007FY2006

S&A

Page 52

Notes:(1) Chart shows cost of despatches.(2) Conversion costs include depreciation . (3) Raw material includes iron ore, coal, scrap and alloys but not scrap purchased on behalf of OneSteel.

1H FY2011FY2010FY2009FY2008FY2007FY2006

Consumption of primary raw materials at Port Kembla Steelworks

Indicative use rateFY2008 FY2009 FY2010 1H FY11 per slab tonneVolume consumed in production (dry mt)FY2008 FY2009 FY2010 1H FY11 per slab tonne

Iron OreFines 4.0 2.9 4.0 2.3 0.97tLump 1 6 1 0 1 5 0 9 0 31t

Reflects mix shift from sinter plant

upgrade Lump 1.6 1.0 1.5 0.9 0.31tPellets 2.3 1.6 1.5 0.6 0.24tTotal 7.9 5.5 7.0 3.8 1.51t

pg(+1.1mtpa fines, -1.0mtpa pellets)

CoalCoking (1) 3.0 2.2 2.7 1.4 0.49tPCI 0.6 0.4 0.7 0.4 0.14tAnthracite 0 1 0 0 0 0 0 0 0 02t

Possible slight shift towards

higher PCI use

Includes around 300kt

consumed for export

(2)

Anthracite 0.1 0.0 0.0 0.0 0.02tTotal 3.7 2.6 3.4 1.8 0.65t

Scrap (3) 1.0 0.7 0.9 0.5 0.2t

in future in lieu of hard coking

coal

coke despatches

Scrap 1.0 0.7 0.9 0.5 0.2t

Raw Steel Production 5.3 3.5 4.7 2.6Export Coke Despatches 264kt 282kt 175kt 89kt

Page 53

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.

Supply and pricing of iron ore to the Port Kembla Steelworks

Supplier Term Volume (p/a) Pricing Basis Simplified price proxy for forward modellingSupplier Term Volume (p/a) Pricing Basis Simplified price proxy for forward modelling

BHP Billiton 10 years from1 July 2009

0.73mt fines0.40mt lump

Trailing monthly index with premium applied to lump.

Analyst forecasts / index futures for the relevant period, adjusted for freight differential (CFR China cf. CFR Port Kembla). Lump priced at a y p )premium to fines

BHP Billiton 10 years from1 July 2009

2.7mt fines1.2mt lump

Pricing reviewed quarterly and tied to movements in prices paid by customers of BHP Billiton in pAsia in the same quarter.

Quarterly pricing, using index average over the preceding calendar quarter (adjusted for freight and quality differentials)1. Lump and

ll t i d t i t fi

Savage River(Grange Resources)

3 years from1 July 2009 0.8mt pellets

Provisional price for 1Q FY2011. Pricing mechanism under negotiation in wake of no annual

pellets are priced at a premium to finesResources) benchmark price for pellets.

Vale21 months,Apr 2010 to Dec 2011

1.24mt fines0.48mt pellets

(CY2011)

Trailing calendar quarter index average with one month lag and premium applied to pellets.ec 0 (CY2011) p e u app ed to pe ets

Other N/A As required Market priced

Page 54

(1) Pricing and trade terms have been changing considerably over the past year for iron ore buyers. While these changes continue and are yet to be fully clarified, BlueScope Steel believes that this is a reasonable price proxy, in the absence of any other indication.Index pricing is based on 62% Fe CFR to Chinese ports. Adjustment for freight and Fe differential is required.

Iron ore indexes

• Platts Metal Bulletin and The Steel Index publish relevant indexes Index levels amongst these three have so • Platts, Metal Bulletin and The Steel Index publish relevant indexes. Index levels amongst these three have so far been quite homogenous

• Forward prices are available from SGX (Singapore Exchange) and some financial institutions

180

200 Futures

140

160

120

140

US

$/t

80

100 Metal Bulletin (62% Fe, CFR Qingdao)

The Steel Index (62% Fe, CFR Tianjin)

Platts (62% Fe, CFR Qingdao)

SGX Futures (62% Fe, CFR China)

Page 55

60 Sep-09

Oct-09

Nov-09

Dec-09

Jan-10

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

Feb-11

Mar-11

Apr-11

May-11

( )As at 15 Feb 2011

Supply and pricing of metallurgical coals to the Port Kembla Steelworks

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

BHP Billiton(Illawarra Coal)

30 years from1 July 2002

Hard coking coal;volume linked to blast furnace requirements

Reflects average price paid by all long term customers of BHP Billiton Australian mines; provisional pricing in line with quarterly prices

Peabody Energy(principally Hunter Valley)

1 year from1 July 2010

Hard coking coal150kt Agreed quarterly pricing

Peabody Energy 3 years from PCI CoalPeabody Energy(principally Hunter Valley)

3 years from 1 Jan 2010

PCI Coal600-800kt Agreed quarterly pricing

Other Various As required Market priced, mixture of quarterly and lOther Various As required annual

Page 56

Historical global iron ore fines, coking coal and semi soft coal benchmark prices

2002 2003 2004 2005 2006 2007 2008 2009 2010

Iron Ore Fines$ $17 97 $17 54 $19 12 $22 68 $38 88 $46 27 $50 66 $91 14 $61 061

US$/dmt $17.97 $17.54 $19.12 $22.68 $38.88 $46.27 $50.66 $91.14 $61.06

% change 4.3% -2.4% 9.0% 18.6% 71.5% 19.0% 9.5% 79.9% -33%

Hard Coking CoalUS$/wmt $42.75 $48.10 $46.20 $57.20 $101.00 $116.00 $98.00 $300.00 $129.002US$/wmt

% change 7.5% 12.5% -4.0% 23.8% 76.6% 14.9% -15.5% 206% -57%

Semi-soft CoalUS$/wmt $35.15 $32.80 $30.80 $40.00 $80.00 $59.00 $65.00 $240.00 $85.003US$/wmt

% change -6.7% -6.1% 29.9% 100% -26.2% 10.2% 269% -64.6%

Notes:(1) Based on Australian iron ore fines settlement with Japan at 62.5% Fe; Brazilian fines settlement was -28% at 66% Fe. Pricing under the new

iron ore contract with BHP Billiton (effective from 1 July 2009) is reviewed quarterly and linked to movements in iron ore prices paid by BHP Billiton’s other customers in Asia. Refer to earlier page for further detail.

Page 57

(2) Benchmark price settlement. Does not reflect BlueScope price averaging arrangement for April 2009 through to June 2010.(3) Benchmark price settlement.

Slab and HRC price benchmarks for Asia & Australian sales

The following Steel Business Briefing prices continue to be a reasonable public benchmark for g g p pBlueScope’s domestic and Asian HRC prices (noting this can change over time).

Asian HRC Benchmark PriceUS$/t

HRCSteel Business Briefing $1,000

$1,100SBB HRC East Asia Import CFR

gHRC East Asia Import CFR $900

$800

SLAB Steel Business Briefing

$700

$600Steel Business Briefing Slab East Asia Import CFR $500

Page 58

Jan-07Jan-06Jan-05$0

Jan-11Jan-10Jan-09Jan-08

What is sinter?

FINE ORESBlended and Fluxed in

Sinter Machine toLUMP ORES

Sinter Machine toProduce SinterPELLETS

SinterPellets Lump

PREPARED BURDENS

Page 59

BLAST FURNACE

Australia Distribution & Solutions – underlying EBIT variance analysis (1H FY2011 vs. 2H FY2010)

2H FY10 1H FY11Total despatches 383kt 378ktUnderlying EBIT margin -0.1% -1.7%Underlying EBITDA $14M $0M

Net Spread Reduction $12m

-1

+5

IT A

$M

-1

-17

EB

-1

-2

15+1

Page 60

OtherConversion & Other Costs

-1

Volume/MixRaw Material CostsPricesJun-10 HY Dec-10 HY

-15+1

Australia Distribution & Solutions – underlying EBIT variance analysis (1H FY2011 vs. 1H FY2010)

1H FY10 1H FY11Total despatches 382kt 378ktUnderlying EBIT margin +0 3% 1 7%Underlying EBIT margin +0.3% -1.7%Underlying EBITDA $18M $0M

+3 Net Spread Reduction $8m

M -1

EBIT

A$M

-9-31

-15+23Conversion & Other Costs:Cost improvement initiatives 5pEscalation (12)One-off / discretionary (2)

Page 61

Dec-10 HYConversion & Other Costs

Volume/MixRaw Material CostsDomestic PricesDec-09 HY

Australia Distribution & Solutions

The Distribution and Solutions division brings together g gBlueScope Steel’s Australian-based downstream businesses

EmergingBusinessSheet & CoilSheet Metal Supplies

Plate

Tube

Structural Steel

M h B

Hot Rolled coil

Cold Rolled strip

RoofingWallingGuttering

Residential and Commercial WaterTanks

Pre-Engineering

Slitting

Shearing

ProcessingServices

Sheet Metal Supplies

Merchant Bar

Reinforcing Steels

Rural Products

Pipes Valves &

Cold Rolled strip

Plate

Stainless steel

Aluminium

gRainwater GoodsFencingMobile Roll forming

Pre Engineering Buildings

Facades

Remote Buildings

S ea g

Warehousing & Despatch

Contract Services (predominantly for Pipes, Valves &

Fittings

Specialty steels

Processing

Aluminium

Processing / Slitting/Shearing

Supply / installBuildings

Harsh Environment Solutions

(predominantly for internal customers)

Page 62

Services

Darwin

Australia Distribution and Solutions – Overview

Lysaght

Sheet & Coil Processing Services

KEY

CairnsMareeba

Sheet Metal Supplies

Bluescope DistributionBluescope Water

Charters Towers

Mackay

Mount Isa

Townsville

Acacia RidgeCapalabaEagle FarmKawana

ArcherfieldBiggera WatersCarole ParkChinderah

Bundaberg

EmeraldGladstone

Kingaroy

Rockhampton

Roma

Acacia Ridge

Eagle Farm

Forrestfield

Ormeau

KawanaNorthgateOxleyWoodridge

CoolumRocklea

ArmidaleBalcattaKewdale

Coffs Harbour

Forrestfield

Geraldton

Kalgoorie

Lismore

Port MacquarieTamworth

Toowoomba

Warwick

St Marys

PadstowChullora

BellevueMalagaMandurahWelshpool

Bomaderry(Nowra)

Batemans Bay

Albany

Albury

Arndell ParkBelmontCardiffChulloraEmu PlainsHamiltonSmithfield

AuburnCardiffSt MarysBathurst

B di

Bunbury

Dubbo

Elizabeth

Esperance

Gillman Horsham

Mildura

Motto Farm

Orange

Queanbeyan

Shepparton

Wagga Wagga

Wodonga

DandenongSunshine

KeysboroughSurrey Hills

DandenongLyndhurstDevonport

Ballarat

Bendigo

BraesideSunshine

BurnieCampbellfieldGeelong

DandenongGeelongWestall

Elizabeth Ottoway

GillmanWingfield

MorwellPortland

Warrnambool

Wingfield

g

Sites (incl 2 U.S.) 133Employees 3 500

Page 63

Hobart

LauncestonEmployees 3,500Active Customers >20,000

New Zealand & Pacific New Zealand & Pacific New Zealand & Pacific New Zealand & Pacific IslandsIslands

Page 64

New Zealand and Pacific Steel Products – underlying EBIT variance analysis (1H FY2011 vs. 2H FY2010)

2H FY10 1H FY11Slab-make 315kt 305kt

+9

Net Spread Improvement $4mSlab make 315kt 305ktTotal despatches 287kt 237ktUnderlying EBITDA $69M $67M

A$M

+17

+526

+1-2

-22

EBIT

A +49-6

Raw Material Costs:Coal (7)Scrap (7)NRV’s / Other Adjustments (8)

Page 65

Dec-10 HYExchange RatesConversion & Other Costs

Volume/MixRaw Material Costs

Domestic PricesExport PricesJun-10 HY

New Zealand and Pacific Steel Products – underlying EBIT variance analysis (1H FY2011 vs. 1H FY2010)

1H FY10 1H FY11Slab-make 262kt 305ktTotal despatches 219kt 237kt

+6

Net Spread Improvement $15m

Underlying EBITDA $38M $67M

M

+15

6

+49-2-5

-26

EBIT

A$M

+5+35

C i & Oth C t

+21

Conversion & Other Costs:Cost improvement initiatives 4Volume 27Escalation (9)One-off / Discretionary (7)

Raw Material Costs:Coal (7)Scrap (7)Coating Metals (3)NRV’s / Other Adj. (9)

Page 66




Domestic Prices

Export PricesDec-09 HY

New Zealand - unique direct reduction process

Page 67

New Zealand – raw materials

Iron Sand Concentrate (Waikato North Head Mine)Iron sand mined and concentrated on site – 58.5% FeSufficient resource for long term steel making operationsConcentrate 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

Export Iron Sand Concentrate (Taharoa Mine)Iron sand mined and concentrated on site 57% FeOtorohanga

Railed and trucked to GlenbrookIron sand mined and concentrated on site - 57% FeApproximately 1mt per annum of concentrate is slurry pumped to a buoy 2.5km offshore to a dedicated slurry vessel and shipped to China and Japan.

Page 68

New Zealand Steel – 1H FY2011 product flow

Export 0.47mtDomestic 7%

NZS Slab 0.31HRC 35%

Mine SitesIron Sands

0.99mtNZS Slab 0.31

mt Export 33%

Interco (Export) 60%

%Pl 12%Export Vanadium

Sl 6 3kt

Export 54%

Domestic 46%Plate 12%

Pipe 5% Domestic 99%

Slag 6.3kt

p

Cold Mill 48% Domestic 11%

Export 12%

Export 1%

Export 12%

Interco (Export) 3%

Coating Lines 74% Domestic Metal Coated 56%

Export Metal Coated 8%

Interco Metal Coated (Export) 10%

D ti P i t d 19%

Page 69

Domestic Painted 19%

Export Painted 2%

Interco Painted (Export) 5%

New Zealand – 1H FY2011 product distribution (external and internal)

Indicative Product Mix (t) Indicative Sales by Country (t)

Metal Coated27%Cold Rolled

13%

Painted9% Australia

12%

Asia16%

Americas21%

Pacific Islands

6%

Pipe5%

16%21%

Hot Rolled46% New ZealandDistribution

15%

Indicative Sales by Sector (t)

45%15%

Indirect Export6%

(incl. plate 12%)

Building & Construction

19%

Export55%

Page 70

Manufacturing5%* External & Internal prime product sales

New Zealand – 1H FY2011 Non steel product sales

Iron Sand Iron sands exports from Taharoa of 467kt in 1H FY2011 which is in line with prior periodsHigher prices were achieved for 1H FY2011Higher prices were achieved for 1H FY2011

Ferrous Scrap Volumes: 1H FY2011 15kt vs. 1H FY2010 28kt.Greater utilisation of internal scrap

Iron & Steelmaking SlagsVolumes: 1H FY2011 74kt vs 1H FY2010 96ktVolumes: 1H FY2011 74kt vs. 1H FY2010 96kt.Challenging construction environment within New Zealand

Vanadium SlagImproved Vanadium process performance and throughput, with volumes up for 1H FY2011 at 1.87M lbs contained V2O5, vs. 1H FY2010 1.28M lbs contained V2O5

Page 71

Asia Asia Asia Asia Coated & Building Products AsiaCoated & Building Products Asia

Page 72

Coated & Building Products Asia – underlying EBIT variance analysis (1H FY2011 vs. 2H FY2010)

Conversion & Other Costs:Cost improvement initiatives 2

2H FY10 1H FY11Total despatches 524kt 549ktUnderlying EBIT margin 9 2% 6 2%

+66

-7

-2

Net Spread Reduction $18mCost improvement initiatives 2Escalation (9)One off / discretionary 1Other 1

Underlying EBIT margin 9.2% 6.2%Underlying EBITDA $86M $67M

A$M

+10

+46+2

-9

-5-9

EBIT

A

Raw Material Costs:Steel feed (13)Coating metals 1Other / net realisable value provision 3

Exchange rates:Translation (2)Other (7)p

Page 73




Domestic Prices

Export PricesJun-10 HY

Coated & Building Products Asia – underlying EBIT variance analysis (1H FY2011 vs. 1H FY2010)

1H FY10 1H FY11Total despatches 454kt 549ktUnderlying EBIT margin 7.9% 6.2%Underlying EBITDA $71M $67MUnderlying EBITDA $71M $67M

+4+50-1

7

+2


A$M +31

+46-7

-33Conversion & Other Costs:Cost improvement initiatives 4Escalation (16)

EBIT

A ( )One-off / discretionary 13Other (2)

Raw Material Costs:Steel Feed (31)Coating Metals (4)

Volume:China 21Thailand 10Other (2)

Coating Metals (4)Other 2

Page 74

Dec-10 HYVolume/Mix Conversion & Other Costs

Exchange RatesRaw Material Costs

Domestic PricesExport PricesDec-09 HY

North America North America North America North America Coated Coated & Building Products & Building Products

Page 75

Coated & Building Products North America – underlying EBIT variance analysis (1H FY2011 vs. 2H FY2010)

2H FY10 1H FY11Total despatches 257kt 290ktTotal despatches 257kt 290ktUnderlying EBIT margin -4.4% -2.4%Underlying EBITDA ($5M) $4M

A$M

Net Spread Improvement $1m

Net Margin Reduction $1m

EBIT

A Net Spread Improvement $1m

-16+2+1

-17+18

-27

+9

-2

Page 76

Jun-10 HY Dec-10 HYOther Exchange Rates Volume / mixConversion & Other Costs

Raw Material Costs

Prices

Coated & Building Products North America – underlying EBIT variance analysis (1H FY2011 vs. 1H FY2010)

1H FY10 1H FY11Net Margin Reduction $33m

1H FY10 1H FY11Total despatches 278kt 290ktUnderlying EBIT margin 1.6% -2.4%Underlying EBITDA $34M $4M


A$M +42

EBIT

A

+11-71

-16+3-1+4-4

Page 77

Dec-10 HYOtherExchange RatesVolume /Mix Conversion & Other Costs

Raw Material Costs

Prices Dec-09 HY

BlueScope Buildings North America (pre-engineered buildings) –commercial, community and industrial are traditional markets

DistributionRetail DistributionRetail

ManufacturingManufacturing

ServiceHealthcare

Page 78

Buildings North America: 1.2 million square foot distribution facility erected in 28 days for major retailer

Page 79

OtherOtherOtherOther

Page 80

In FY2010 we revisited our strategic direction

Reinvigorate. Products, channels and markets, cost baseReinvigorate. Products, channels and markets, cost base

Secure cost-effective supply of raw materials

Australian, New Zealand and U.S. steel businesses

Extract maximum value from our Asian footprintGlobal building products

Extract value from our optimised North American footprint, and assess possible bolt-on acquisitions

Global building products & solutions businessGrow participation in building and construction markets with premium

t i bl t l d t d Consider expansion into large, high growth regions leveraging existing capability in steel building and construction market

sustainable steel products and solutions

Continue to pursue maximum asset utilisation, structural cost reductions and manage to strict financial targets

Fundamentals

Page 81

Balance sheet strength to manage through the cycle

Strategy – globally our focus is primarily on building products and solutions (indicative 1H FY2010)

N th St USA

1%China

C t d & B ildi NA

10%

35%

25%

North Star USA

99%ASEAN

Coated & Building NA

%30%10%

90%

100%

Australia New Zealand

90%

15%

15%

10%60% Building & construction

Manufacturing40%

35%25%

Page 82

Ag & miningAuto

Strategy – We will grow participation in building and construction markets globally with premium sustainable steel products and solutions

• Expand our portfolio of products and solutions with focus on construction and energy efficiency including:

Pre-engineered buildings:

− Leverage existing positions in high growth Asian market and large North America marketmarket and large North America market

Expand components product offer (roof and wall, insulated panels and facades)

Expand capability in light weight steel structures across broader building market segments

D l t ti f t d d t • Develop next generation of coated products

Page 83

Strategy – Our capabilities fit well in large, developing steel building and construction markets both within and outside of our current footprint (eg Sth America)

Regional Construction MarketsContribution to GDP of Construction Sector(1)

(US$bn’s 2010)Total Construction Market Gross Output(2)

(US$bn’s 2010)

53

135

Argentina

Brazil

57

122

Saudi Arabia

Turkey

321

420

Japan

China

Middle East / AfricaSouth AmericaAsia(US$bn s 2010) (US$bn s 2010)

15

23

30

45

Chile

Colombia

Venezuela

18

34

48

51

Egypt

United Arab Emirates

South Africa

Iran

11

60

72

125

Singapore

Korea

Indonesia

India

3

4

9

15

Ecuador

Peru

Costa Rica

Panama 6

8

10

16Israel

Tunisia

Qatar

Kuwait

7

9

9

11

Thailand

Philippines

Taiwan

Hong Kong

• Construction remains the largest consumer of steel and the most valuable market segment to BSL

1

3Uruguay

Bolivia 5

5

6

Jordan

Tunisia

Bahrain

7

7

7

Vietnam

Hong Kong

Malaysia

g g• Focus on large, high growth markets - must meet risk criteria and have material earnings potential• Leverage existing capability in premium flat steel products and pre-engineered building solutions• Asset-light basis to enter new markets

Page 84

• Understanding of economic, construction and steel cycles in determining entry pointsSource: 1) IMA Asia, August 2010 Update: Asia (Billions of Current US$). 2) Global Insight, January 2011 Update: South America and Middle East (Billions of Current US$) – Construction gross output measured as total value of sales by producing enterprises

before subtracting the value of intermediate goods used up in production.

BlueScope Steel’s global footprint and capacities as at 31 Dec 2010

North Star (2)

• Raw Steel 2.0mt • Hot Rolling 2.0mt

Kalama• Cold Rolling 455kt• Metal Coating 235kt• Painting 110ktIndia(1)

C ( )

China• Metal Coating 250kt• Painting 150kt• Lysaght sites 4• PEB sites 3

North America• Butler/VP PEB sites 10• ASC Profiles sites 9• Metl-Span sites 5• BlueScope Water sites 3

• Metal Coating (+250kt)• Painting (+150kt)• PEB / Lysaght sites 4

Vietnam• Metal Coating 125kt• Painting 50kt• Lysaght sites 1• PEB sites 1

• PEB sites 3Thailand• Cold Rolling 350kt• Metal Coating 375kt• Painting 90kt• Lysaght sites 3• PEB sites 1

Fairfield• Painting 110kt

Rancho Cucamonga• Metal Coating 220kt• Painting 100kt

Malaysia / Singapore• Metal Coating 160kt• Painting 70kt• Lysaght sites 6 Brisbane

• Painting 95ktAustralia

Indonesia• Metal Coating 100kt (+165kt)• Painting 40kt (+120kt)• Lysaght sites 3

Sydney• Painting (1 line) 120kt

New Zealand/Pacific Islands• Iron Sands Mining sites 2• Raw Steel 625kt

Australia• Distribution sites 77• Lysaght sites 37• Service Centres 6• Design, Manufacture,

Construct (formerly Emerging Bus.) 13

Western Port• Hot Rollling 1.4mt• Cold Rolling 1.0mt• Metal Coating (3 lines) 830kt

• Raw Steel 625kt• Hot Rolling 750kt• Cold Rolling 360kt• Metal Coating 230kt • Painting 65kt• Hollow Sections 45kt• Lysaght sites 4

Port Kembla• Raw Steel 5.3mt

H t R lli 2 9 t

g g )

Page 85

• Painting (2 lines) 330kt Lysaght sites 4Notes: (1) Tata BlueScope Steel is a 50:50 JV between BlueScope Steel and Tata Steel – MC line & Paint

line under construction.(2) North Star is a 50:50 JV between BlueScope Steel and North Star Steel (subsidiary of Cargill Inc.);

BSL equity share 1.0mt.

• Hot Rolling 2.9mt • Plate 450kt• Cold Rolling 990kt• Metal Coating (3 lines) 825kt • Painting (1 line) 200kt

BlueScope Steel China footprint

1H FY2011

REVENUE: A$320M

EBITDA – Reported: A$ 93M

EBITDA – Underlying: A$ 25M

Site of Xi’an Butler/Lysaght development

EMPLOYEES: 2,166

NET OPERATING ASSETS (PRE-TAX): A$176M

SUZHOU

BlueScope Steel in China1 Metal Coating/Painting Line Facility

Page 86

SUZHOU

g g y4 Lysaght Manufacturing Facilities3 Butler PEB Manufacturing Facilities32 BlueScope Steel China Sales OfficesGUANGZHOU

BlueScope Steel North America footprint 1H FY2011REVENUE: A$675MEBITDA – Reported: A$13MEMPLOYEES: 3,637 incl. North Star NET OPERATING ASSETS (PRE-TAX): A$815M

NB: Revenue excludes BSL’s 50% interest in North Star BlueScope Steel of A$316M.

Key

M tl S

ASC

HQ

ASC

BlueScope Buildings

BSL Steel Sales Offices

Steelscape

Metl-Span

Mexico North Star BlueScope

Page 87

Calendar year earnings

A$ Millions CY2003 CY2004(3) CY2005 CY2006 CY2007 CY2008(4) CY2009 CY2010

Revenue(1) 5,328 7,029 7,980 8,693 9,333 11,926 8,283 9,148

EBITDA(2) 857 1,501 1,411 1,052 1,130 1,775 (324) 563

EBIT(2)

- reported 581 1,212 1,111 742 792 1,399 (673) 215- underlying - - 1,308 966 924 1,532 (604) 236

Net profitt d 436 859 792 413 414 887 (502) 100- reported 436 859 792 413 414 887 (502) 100

- underlying - - 943 586 563 989 (476) 120

EPS (¢) - reported 56 116 110 59 56 116 (34) 5(¢) p ( )

Notes:(1) Excludes revenue of equity accounted associates e g North Star

Page 88

(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.

Dividend history

42 / 20¢

20

30 / 10¢ 44 / 0¢

47 / 0¢49 / 0¢

27262424

1022 / 7¢

¢

Final 13

7Special18

9 1218 20 21 22

5Interim25

5 / 0¢ 5 / 0¢ 2¢

Page 89

2FY2011FY2010FY2009FY2008FY2007FY2006FY2005FY2004FY2003

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

A$M 30

-16-3-9

6

-49-41

-90-105

-135

Comprised of:Corporate costs (58) (43) (101) (61) (35) (96) (31) (41) (72) (37)

135

1H FY08 FY082H FY08 1H FY111H FY09 2H FY09 FY09 1H FY10 2H FY10 FY10

Profit in stock adj (28) (88) (116) 93 33 126 (10) (9) (19) 18FX 5 15 20 (22) (4) (26) - 1 1 3Other 111 (19) 92 (4) (3) (7) - - - -Total 30 (135) (105) 6 (9) (3) (41) (49) (90) (16)

(1) (2)

Page 90

Notes: (1) Profit from realisation of Smorgon Steel shares ($128m), net of Distribution integration, restructuring and M&A costs.(2) IMSA integration costs.

Major approved capital projects and investment summary(in addition “Stay in Business” capital is approx. 75% of depreciation)

$A MillionsTotal Est.

Capex / CostActual to 31 Dec 10 2H FY2011 FY2012 FY2013

Projects completedThailand – Coating expansion 80 80 - - -Vietnam – Coating / Painting 136 136 - - -China- Coating and Painting Facility 274 274Coating and Painting Facility- Guangzhou Butler / Lysaght

27433

27433

--

--

--

India - Butler / Lysaght facilities (50% interest) 44 44 - - -

Australia: - PKSW - HSM expansion - Sinter Plant Emissions

N 5 Bl t F R li

102100362

102100362

--

--

--

- No. 5 Blast Furnace Reline- Sinter Plant Upgrade

- WA Service Centre

36214221

36214221

---

---

---

Western Sydney Colorbond® Steel Facility 150 150 - - -Projects to be completed(1)

Indonesia – Coating / Painting 155 142 13 - -China – Xi’an Butler / Lysaght facility 60 - 13 44 3Australia – Steam Infrastructure spend

– Steel Injection Station5136

336

1018

812

--

I t tInvestmentsIMSA North American businesses Smorgon Steel’s Distribution business(3)

Butler Manufacturing(4)

Lysaght and water acquisitions

807700277129

807572 (2)

277129

----

----

----

Total capital spending 3 659 3 410 54 64 3

Page 91

Notes: (1) India project funded under project financing within JV. Project remains on budget at approximately A$270M. (2) Gross cost of $700m less pre-tax profit on SSX shares of $128M leaves $572M.(3) Excludes working capital adjustment and pre-acquisition costs of $50M.(4) US$190M (A$226M) recovered following the sale of Vistawall in June 2007.

Total capital spending 3,659 3,410 54 64 3

Zinc and Aluminium Usage

Tonnes Zinc Aluminium

1H FY2011 1H FY2010 1H FY2011 1H FY2010

AUSTRALIA

Springhill 10,185 10,768 4,895 4,955

Western Port 10,318 8,496 5,168 4,516

S b t t l 20 503 19 264 10 063 9 471Sub-total 20,503 19,264 10,063 9,471

NEW ZEALAND 3,227 3,096 1,876 1,636

ASIA 7,404 5,974 7,116 6,579

S SUNITED STATES 7,600 7,554 1,885 2,760

TOTAL 38,734 35,888 20,940 20,446

Page 92

Committed Debt Facilities as at 31 December 2010

Maturity DrawnUS$m/THBm A$m A$m

Committed

Syndicated Loan Note FacilityTranche 1 Dec-13 675 210Tranche 2 Dec-15 675 -2004 US Private Placement NotesSeries A Jul-11 US$100 98 98Series B Jul-14 US$200 197 197Series B Jul 14 US$200 197 1972008 US Private Placement NotesSeries A Jun-15 US$81 80 80Series B Jun-18 US$204 201 201Series C Jun-20 US$40 39 39Other FacilitiesSale and leaseback Aug-11 88 88Trade payables facility May-11 US$50 49 -Subsidiary loan Jul-13 THB 2,500 82 26US Facilities Various US$20 20 3Other Facilities Various 57

(1)

2,204 999

Note: (1) Comprises US$20m line of credit

Page 93

(1) Comprises US$20m line of credit

Shares on issue – no material change

Million (rounded)

Shares on issue at listing, July 2002 793Share buy-backs (116)Share buy-backs (116)Dividend reinvestment scheme issues +67Employee share plan issues +34p y pInstitutional share placement, Dec 2008 +97Share purchase plan issue, Feb 2009 +36Entitlement offer 2009 – institutional tranche (May 09) +515Entitlement offer 2009 – retail tranche (June 09) +397Shares on issue at 30 June 2010 1,823Dividend reinvestment scheme (18.8m); employee share issues (0.05m) +19

Page 94

Shares on issue at 31 December 2010 1,842

Greenhouse Gas Regulation - Australia

• As a trade-exposed emissions-intensive manufacturer, BlueScope Steel notes the ongoing national and international debate about carbon pricing.

• In Australia, the Federal Government has established a multi-party committee to provide advice to Cabinet on the introduction of a domestic carbon price. Government intends to legislate for a carbon price during its current term, although the exact timing and form of policy is yet to be announced.

• Managing Director and CEO Paul O’Malley is a member of the government’s Business Roundtable on Climate • Managing Director and CEO, Paul O Malley is a member of the government s Business Roundtable on Climate Change. It is the company’s view that policy should be developed in accordance with its Greenhouse Policy Principles, and in line with the following overarching objectives:

– Effective – Reducing greenhouse gas emissions is a global problem that requires a global solution. Accordingly, policy must drive a net reduction in global emissions over time, and not simply be an economic impost that leads to relocation of industry and does not achieve environmental objectives. To be effective, policy must also send a price signal to consumers.

– Least cost – Provide the widest range of abatement opportunities at the lowest cost.Least cost Provide the widest range of abatement opportunities at the lowest cost.– Trade neutral – Recognise the fundamental differences in the competitive and investment environment for the trade-

exposed and non –trade-exposed sectors. Crucially, it should not compromise the competitiveness of emissions-intensive trade-exposed (EITE) sectors, and it must avoid carbon leakage.

– Revenue neutral – Raise no more in revenue than is required to provide assistance to industry to mitigate loss of trade competitiveness, and provide reasonable compensation for households.

– Long-term – Provide stability for long-term investment planning (20-plus years), including recognising the long time horizons for adoption of new technology. Promote energy security and ensure a competitive energy supply for

Page 95

p gy gy y p gy pp yAustralian business and households.

– Simple – Be as simple and as transparent as possible, with minimal opportunity for market manipulation. Minimise compliance and administration costs, and eliminate overlap with other government policies and regulations

BlueScope Greenhouse Gas Policy Principles - Context

• BlueScope Steel strives to continually improve its environmental footprint. We are committed to reducing the greenhouse gas intensity of our operations. BlueScope Steel is also playing an active and ongoing role in the global steel industry’s efforts to reduce greenhouse gas emissions.

• BlueScope’s steel products will play an integral role in reducing society’s greenhouse gas emissions, including t i bl i f t t ( i d t l l t ) i t i bl as components in renewable energy infrastructure (e.g. wind towers; solar power plants), in more sustainable

transport infrastructure (e.g. trains; buses; lighter, more efficient steel products for cars), and in greener, more energy efficient buildings. Steel is 100% recyclable and its life is potentially infinite.

• BlueScope’s Australian steelmaking plants are world competitive and around half the steel products we make • BlueScope s Australian steelmaking plants are world competitive, and around half the steel products we make each year are exported. We work hard to maintain our competitiveness. In contrast, many overseas steelmakers receive subsidies and other support to help them export. Policy that puts higher costs on Australian steelmakers but not on overseas steelmakers risks undermining our competitiveness.g p

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Greenhouse Gas Policy Principles

1. Reducing greenhouse gas emissions is a global problem that requires a global approach.g g g g p q g pp2. Australia should adopt policy that achieves emissions targets at least cost. Putting a price on carbon which is

visible to consumers and producers, through a market mechanism (emissions trading or carbon tax), is likely to drive least cost abatement.

3 Th titi d fi i l i bilit f A t li ’ t d d t l i d t t t b d d W 3. The competitiveness and financial viability of Australia’s trade exposed steel industry must not be eroded. We cannot place our industries at a disadvantage to the rest of the world. Transitional measures for trade exposed industries - including the steel industry - will be essential for as long as our global competitors (India, China, US, Japan, Korea and Taiwan) do not face comparable carbon costs.

4. A single national carbon policy should be the goal of governments. Complementary policy measures adopted by Federal and State governments must be effective and least cost, and address recognised market failures. These policies must avoid market distortions or perverse incentives, overlap and unnecessary compliance costs and regulatory burden.

5. Revenue raised by a carbon price should be earmarked for investment in greenhouse gas abatement and assistance for households and industry. Policy should provide incentives for research & development and investment in abatement, including appropriate recognition for early movers.

6 Policy must not lead to carbon leakage by which Australian production is simply replaced by foreign production 6. Policy must not lead to carbon leakage, by which Australian production is simply replaced by foreign production that may, in fact, be less carbon efficient.

7. Policy should be comprehensive, including all sectors of the economy (and imports where appropriate), and be transparent.

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8. Policy must recognise the very long time horizons for investment in the steel industry, including for potential next generation lower emissions iron and steelmaking technology.


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