BlueScope Buildings North America Investor Visit Presentation Dan - - PowerPoint PPT Presentation

BlueScope Buildings North America Investor Visit Presentation

28 April 2014

Dan Kumm, President

BlueScope Steel Limited. ASX Code: BSL

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Important Notice

THIS PRESENTATION IS NOT AND DOES NOT FORM PART OF ANY OFFER, INVITATION OR RECOMMENDATION IN RESPECT OF SECURITIES. ANY DECISION TO BUY OR SELL BLUESCOPE STEEL LIMITED SECURITIES OR OTHER PRODUCTS SHOULD BE MADE ONLY AFTER SEEKING APPROPRIATE FINANCIAL ADVICE. RELIANCE SHOULD NOT BE PLACED ON INFORMATION OR OPINIONS CONTAINED IN THIS PRESENTATION AND, SUBJECT ONLY TO ANY LEGAL OBLIGATION TO DO SO, BLUESCOPE STEEL DOES NOT ACCEPT ANY OBLIGATION TO CORRECT OR UPDATE THEM. THIS PRESENTATION DOES NOT TAKE INTO CONSIDERATION THE INVESTMENT OBJECTIVES, FINANCIAL SITUATION OR PARTICULAR NEEDS OF ANY PARTICULAR INVESTOR. 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.

INTRODUCTION

US Navy Hangar- Jacksonville, FL BlueScope Construction

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Lost time injuries per million man-hours worked

Lost time injury frequency rate

Medically treated injuries per million man-hours worked

Medically treated injury frequency rate

Progress towards our goal of Zero Harm

0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2 2008 2009 2010 2011 2012 2013 2 4 6 8 10 12 14 16 18 2008 2009 2010 2011 2012 2013

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External segment reporting structure 1

Building Components & Distribution Australia Global Building Solutions Building Products ASEAN, North America and India New Zealand and Pacific Steel Products Hot Rolled Products North America

• Leading global

designer and manufacturer of EBS2

• Key markets in

China & Nth America; plants in ASEAN, India, Middle East

• Supplying buildings

to global customers

• China coating &

painting

• Operates metallic

coating and painting lines and roll-forming in Indonesia, Malaysia, Thailand, Vietnam, India and North America

• Includes NS

BlueScope Coated Products JV

• Largest supplier and
• nly manufacturer of

HRC, plate, metal coated and painted steel in Australia

• Australian finished-

product capacity of ~2.5Mtpa; domestic market 1.9Mtpa in 1H FY2014

• 2.0Mtpa mini-mill in

Ohio

• 50/50 JV with Cargill

Inc.

• Voted no. 1 flat rolled

steel supplier in North America (Jacobson Survey) for 12 consecutive years

• Major steel product

supplier / distributor to the Australian building and construction, automotive, white goods manufacturing and general manufacturing industries

• Only fully integrated

flat steel maker in New Zealand

• Leading domestic

market share of flat products

• Includes iron sands

mines (own consumption and export sales)

(1) BlueScope also has a Corporate segment which is not shown (2) Engineered building solutions

Coated & Industrial Products Australia BlueScope Australia & New Zealand

BlueScope Buildings North America is part of BlueScope’s Global Building Solutions segment

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Global Building Solutions segment has been established to unite BlueScope’s Building Solutions businesses and accelerate growth

Buildings ASEAN

Engineered Building Solutions and ASEAN

Stewart Dellar – President

Buildings North America

Engineered Building Solutions in North America

Dan Kumm – President

Solutions Australia

Engineered Building Solutions, Ranbuild and Water solutions in Australia

Craig Smith – GM

Global Accounts

Engineered Building Solutions to key multinational accounts and oversight of JVs (SBS, TBSL)

Pat Finan – President

Product & Buildings China

Engineered buildings, coated steel and building components (Lysaght) in China

Bernie Landy – President

Global Building Solutions

Sales A$1.5Bn Over 5,000 employees across 12 countries 24 manufacturing facilities 116 years combined experience with BlueScope Leadership 141 years combined experience working in steel and construction sector

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A broad portfolio of leading Building Solution brands / products

Buildings ASEAN Buildings North America Solutions Australia Global Accounts Product & Buildings China

Saudi Building Systems

BUSINESS OVERVIEW

Costco – Melbourne, Australia

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BlueScope Buildings North America overview

• BBNA designs/manufactures/markets Engineered Building Solutions (EBS) to the low-rise non-

residential construction segment

• Comprised of the leading pre-engineered building brands and best known builder distribution

networks

• BBNA has 26% market share in North America
• Brief history:

1901

Butler Founded Butler 1st to introduce 3- plate Rigid frame VP Buildings Commenced Business

2014 1939 1948

BSL Buys Butler

2004 2009 2012

GFC Impact BSL Acquires VP GBS Formed

2008 1963

VP introduces “custom concept”

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So what is an engineered building solution (EBS)?

Engineered Building Solution Conventional steel building Key benefits to engineered building solutions are:  Reduced steel usage on targeted end use buildings  Integration: One trade performing structure, roof, and walls vs. three  Rapid construction time  Superior lifecycle costs of metal roof systems  Reduced dependency on certified welders in field  Well suited for emerging design-build trend in construction industry

• Fit-for-purpose structural system

leveraging tapered frame concept

• Design each structural member to

meet unique load requirements

• Performs well with large clear-

span requirements and low-rise construction

• Frequently integrates roof and/or

wall system as a total solution

• Conventional design using

standard hot rolled sections

• Standard structural members

selected from known criteria

• Performs well with low and high-

rise solutions with moderate to low spans required

• Scope typically stops with

structure and deck

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• Mission: To grow our industry leading position as a solution provider

for the non-residential low-rise building market. Delivering our products and services primarily through multiple brand, closed distribution network of Builders with a focus on differentiation and growth initiatives through the rollout of new products, new services, and superior quality

• BBNA does not define ourselves as a metal building supplier. We are a

solution provider proficient in both metal buildings and conventional

• steel. In fact, we provide hybrid solutions that leverage the best of both

worlds Mission / vision of BBNA

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Both Butler and VP give BBNA a unique history of being a market leader

1st to use computer designed rigid frame structure 1st to utilise prepunched structurals and panels 1st to utilise fiberglass blanket insulation between panel & structural 1st to offer ‘Z’ shaped purlins 1st to offer “Custom Engineered” building vs. “Pre-Engineered” 1st to market through network of local contractors 1st to offer low-slope pre-engineered buildings 1st to offer a pre-engineered standing seam roof system 1st to initiate formation of MBMA (Metal Building Manufacturer’s Association) 1st to introduce Skyweb fall protection system 1st to offer G30 Acrylic as standard 1st to offer self-curbing day lighting system

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BBNA supply chain / channel to market

BSL / Nippon North Star Gerdau Nucor SDI WII Steel- scape Service Centers BBNA Shared Services Platform

Manufacturing Purchasing Innovation / R&D Engineering System Warranty Admin Quality Control Human Resources Finance / Tax Payroll IT

Butler VP BSC Butler Builders VP Builders End Customer Market Facing Non-market Facing Brand Specific Focus Leverage Economy of Scale Up-stream Mid-stream Down-stream

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Nearly 2,000 Butler and VP builders across North America

24%

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BlueScope Construction history

• Established in 1970
• In-house construction capability
• Account for 14% of BBNA Revenue
• National footprint – licensed in all 50 states
• Capabilities include: program accounts,

government, & large/complex jobs

• Strategic purpose is to capture all work that

doesn’t fit our existing builders’ capability

Manufacturing Plants Manufacturing Plants Data Centers Data Centers Distribution Centers & Shipping Hubs Distribution Centers & Shipping Hubs Aircraft Hangars Aircraft Hangars

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BlueScope Construction has a long history of conquering challenges of key corporate accounts

FedEx Ground Over 100 projects since 1995 Air National Guard Operation Noble Eagle 30 Hangars in 30 Days at 10 Locations In response to September 11 terrorist attacks

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BBNA management team

Dan Kumm President, BlueScope Buildings NA

Dave Shaw

Engineering Excellence

Barb Bridger VP Human Resources Chuck Haslebacher President, Varco Pruden Doug Lange VP Finance Tom Gilligan President, Butler Manufacturing Morrie Anderson VP Operations Matt Threadgill President, BSC Ron Miller VP Innovation

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New integrated manufacturing platform

Visalia Monterrey (Mexico) Evansville St Joseph Annville Jackson Laurinburg Rainsville

Manufacturing facility

Total Capacity: approx. 320 metric kt

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World-class facilities: Evansville, WI

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World-class facilities: Visalia, CA

U.S. ENGINEERED BUILDINGS MARKET

Stafford Hills Club –Tualatin, OR SM Andersen Company, Inc

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Customer base industry segmentation

24%

Note: Based on CY2013 shipments

23 G2 Commercial Construction, Inc.– Kennewick, WA G2 Construction

24 Summit Aviation – Middletown, DE EDiS Company

25 Triple S Harley Davidson – Westover, WV March Westin Company, Inc.

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BBNA has two primary competitors in the metal buildings sector, but also looks to expand into conventional markets

MBMA Company Brands # of Plants

BBNA Butler, VP 8 Nucor Nucor, American, Gulf States, Kirby, CBC 11 NCI Robertson, Star, CECO, Garco, Metallic, Mid-West, A&S, Mesco, IPS, SB.com 9

Two major competitors in the metal buildings market, NCI & Nucor, as well as several much smaller companies Conventional Steel Services group in full swing to capture work outside of the typical MBMA market

13%

MBMA is 13% of Total Buildings Market

$16.5b*

*FY13 Total Non-Res (0-2 stories) construction spend was $110B. Assuming 15% is building material = $16.5b

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North America PEB market indicators

FY2013 actual FY2014 forecast FY2015 forecast FY2016 forecast Construction growth 5.1% 14.8% 9.3% 18.4%

30 35 40 45 50 55 60 65 70 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 500 1,000 1,500 2,000 2,500

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2006 2007 2008 2009 2010 2011 2012 2013

Thousands of units

Total Housing Single-Family Multi-Family

Source: FW Dodge, Q1 CY2014 data release Expansion Contraction

200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 FY11 FY12 FY13 FY14 FY15 FY16

• Sq. Ft. (Thousands)

FW Dodge forecast of U.S. non-residential construction Architectural Billings Index U.S. housing commencements

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Trading conditions

• Began 2H FY2014 with backlog 10% greater than at beginning of 2H FY2013
• January through March 2014 activity level impacted by particularly difficult winter season
• Current backlog is 20-30% greater than same time last year

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Growth initiatives

Ease of doing business Unique value

• ffering

Reputation Competitive

Selling Capability Service Products Operations Capability

DayLight Savings IECC Compliance Energy Usage Life Cycle / Durability Leveraging our unique Builder Networks Increasing addressable market, such as conventional and Latin America initiatives Innovating with vision toward mega-trends, such as energy conservation

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BBNA volume (metric kt)

289 211 197 186 173 264 122 FY08 390 101 FY14 FY13 FY12 FY11 FY10 FY09 Varco Pruden acquisition (Tonnes not reported in BlueScope due to acquisition timing) GFC impact Results through 1H

INNOVATION AND GROWTH

TRUSS PURLINXT Pilot Job Oklahoma City, Oklahoma

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Grandview Research Center overview

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• Regulatory & Compliance Testing
• New product development
• 60 worldwide patents
• Raw material testing & quality assurance
• Led by industry experts

Advanced thermal testing capability creates a competitive advantage for customers:

• More cost effective & energy efficient roof and wall assemblies than code prescribed methods
• Certified by the International Accreditation Service (IAS)
• More than 80 assemblies tested

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Our competitive advantages

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TRUSS PURLINXT Product Features

• Lighter and more efficient than bar joists
• Significant load/span capability
• Less field labor to install than bar joists
• Superior appearance / finish = no field paint

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Our competitive advantages

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Daylighting

• Reduces electrical consumption / costs up to 70%
• Sold over 11k units in 2 years
• Less labor in field compared to curbed units

Before After

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Technology – the Vision Engineering System is leveraged throughout the product workflow and order cycle

• Sales Tool

– Fast BIM (Building Information Model) modelling – Power in the hands of our Builders

• Quoting Tool

– Integrated with auto-design engine

• Automated Design Tool

– Delivers efficient, consistent design – Auto application of snow loads, multiple codes, etc.

• Automated Detailing Tool

– Saves significant engineering hours

• Integration Tool – Supply Chain & Shop Floor

– Leverages economies of scale for product purchases – Aligns design solution with manufacturing capabilities

INTRODUCTION TO ST JOSEPH PLANT

TRUSS PURLINXT fixture – St. Joseph, MO

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St Joseph plant overview

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• Opened in 1981
• 194 manufacturing employees
• Over 138k sq. ft. of manufacturing space

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St Joseph facility

Example of expanding our addressable market by entering the conventional steel space Example of expanding our addressable market and market share through industry-leading innovation

QUESTIONS?

Sanford Health Fieldhouse – Sioux Falls, SD Butler Builder: Fiegen Construction Company

BlueScope Buildings North America – Investor Visit Presentation

28 April 2014

Dan Kumm, President

BlueScope Steel Limited. ASX Code: BSL