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3q 2011 Operating Performance - POSCO - 10-24-2011

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3q 2011 Operating Performance - POSCO - 10-24-2011 Powered By Docstoc
					  
Oct 21, Operating Performance
3Q 20112011
  
Certain provided in
Figures contents in Strategy
2011 Business Plan this presentation
Steel Industry Environment and
Overseas & Performance
Activities Operatingthis Performance are based to change during the course of auditing Company.
- POSCO InvestmentPerformance
Consolidated Operating presentation are subjecton unaudited financial statements of the process
3Q OperatingAccomplishments Progress
  
Revenue sector: market Performance14 21 ‘10.3Q
1,233 by‘11.2Q
IncomeMat’l206478617impacted7326 56 transactions ‘11.2Q’11.3Q
‘10.3Q
Consolidated450‘11.3Q ‘10.3Q311.2Q ‘11.3Qtranslation loss
ICT
E&C
Steel.
Energy
1.4%
233 Margin
1.08tn
Foreign
8.1%
1,372
9.7%
1,083
Profit
2011.3Q
Trade
1,298
2011.2Q 245
10.2% 200 211
1,746 Support
2010.3Q Operating
11.0%MarginOperating
Chem.
Op. Income 2011.3Q 5 29 43 Operating
3Q incomeKRW) Income21 loss
2010. 1,865 7,04336,968 to 59 34
11,186 16,953 includes108 foreign
17,0471,0891,9021,988 0inter-company
(in 2011.2Qdecreased due 7Net 3 8currency
Operatingglobal12,02114,47814,5031,125 16
Sales
Netbillion Income Translation3518 95 28 1,6371,223
SluggishCurrency402 50617756 income38 43Income 984 1,382 274
3/25
7.7%203
  
Assets9,1777,343Equity 3,647 ‘11.2Q757 313 ‘10.3Q
66,025 Liability‘11.3Q423 7,272 8,71610,6491,905
74,531 ‘11.2Qon Equity
Financialsector:2011.3Q‘10.3Q 253 247‘11.3Q 5522,955 3,041 KRW
‘10.3Q
Consolidated 10,934 12,9471,854 2,120 2,19222,069679‘11.2Q‘11 3Q
E&C 5,983 foreign-currency denominated
Steel.Support 58,788
ICT 2011.2Q includes
2.3%661
13.9%
39,994
40,170
11.9%
37,298
93.8%
Energy
86.2%
34,537
76.9%
28,727
2011.3Q
77,892 2,414Operating Performance
2011.2Q
Trade
2010.3Q 670562to408 65,696 68,430
Chem.Mat’l
(in rateReturn670 Assets Liabilities Assets 560 2,2182,298
4/25
Liabilities KRW)1,1961,436 248 644 4,885 debt 679 672
Asset bycaused2,799 2,864 402 4,38918,475 2,336to increase in
FX billionStructure7,926 inter-company transactions 24,197 40,314 43,628 44,233
Sales
37,722                                  268
  
(Operating Margin) (11.0%) (10.2%) (7.7%) 
(Profit Margin) (9.7%) (8.0%) (1.4%) 
(Gross Margin) (16.6%) (15.7%) (13.4%) 
CG & A 601 874 881 0.8  QoQ(%)
& billion the 1,862
Foreign 2011.2Q
Net Income
Equity MethodCompany 233 83.0
Owners 11,186 Income 1,067 0.6
Operating KRW) 1,233 28 15 1,323
Other Income Gains 2,671 51 1,298
5/25
Finance Item Operating 1,746 57.1
Gross OperatingGains 4844 1,056
Revenueof Income 1,372 16,95398
2010.3QCurrency 2011.3Q 2,277 14.8232
(inTranslationGains 153 of Income 199
Summarized StatementsPerformance 25.782.5
Consolidated1,083 Transaction 20892.2 1,084
                 17,047 35
  
Total Liabilities & Equity 66,0255 74,531 77,892 4.5 
* Cash equivalents: cash & cash equivalents, other short-term financial assets
6/25
Controlling 24,692
Equity Assets 11,454 of Financial
(Interest-bearing debt) 18,827 (23,813) (27,369) (14.9) 
Liabilities Assets 34,537 42,869 21,061
Total Receivable 2011.3Q19,952 9.2
Fixed Assets Operating 10,947 6.5
Other Financial26,487 31,662 33,375
Long-term Liabilities 35,459 0.444,517
Inventory KRW) 7,442 12,2038,315 5.4
Notes Assets 66,025 26,555 37,955 4.3
Cash Equivalents 9,062Performance Position
Current37,298 39,99411,68777,892 16,661
2010.3QLiabilities39,5387,9736,022 37,804
(in billion 8,840 Assets40,17014,5854.5 3.8 0.4
SummarizedInterests 74,531QoQ (%)4.30.75.2
Consolidated Statements5,38127,706 5,712 5.614.2
           2011.2Q 17,04037,722
            28,727               11,026
  
Activities & Accomplishments 
Steel Industry Operating Performance
POSCO Operating Performance
- Consolidated Environment and Progress
3Q Operating Performance
2011 Business Plan
Overseas Investment Strategy
  
Facility expansion & periodic maintenance 
-Maintenance:
-Expansion:
P) S
8/25
Inventory 469 4POL
Domestic 4,957486
33.6%
36.0%
41.7% 2011.2Q
8,686 7,766 P)
ExportSteel 8,814
S Tthousand tons) 8,982
Steel 4486562,906 3,619
Carbon 2,783Mill 2HR
2010.3Q Product (Sep.20th
9,283 8,657 7,740 958
(in 1&3Plate 8,214 Performance
FinishedOperatingSales Mill(Jul.11th ~ rose
Crude 9,468 Production5,067
Production/sales increased, ~28th), 3Wire due 1HR Mill (Aug.29th
POSCORatioG)898 2011.3Q export ratio 23rd), G) to weak domestic mkt~ Sep.4th),
Production/Sales5,751completed (Sep.1st) Rod (Jul.1st ~10th), 3Electronic Steel (Aug.22nd ~28th)
  
’10.3Q ’11.2Q 246507 0.7%
Plate & wire rod sales declined due to slow market & maintenance 
YoY (%) QoQ (%) 
Utilization509to’11.3Q 0.4%peak) 5.3% <Shipbuilding>
S Includes
Electrical
Cold
Wire
Plate* 2011.2Q
Hot 78 Product
Others
Total
(in Rolled tons) 81.4%
86 S 417 575 613 Industry 5.9%
91 90 7,740RatioAppliances>(Domestic)
103 compared1,648 246
96 92 byOperating 5.0% 43.2%
*
88T89Rod HR 4388,6861,906<Rerollers>
104thousand 3,243Performance0.3%
<Auto>338441 Plate1,540 3,449 6.6%
(%,1001,0758,657 1,904 233 5.3% 0.1%
9/25
2010.3Q<Home prior year’s
POSCO91Steel5392011.3Q 6.6%0.3%
Sales Rolled1,912by3,305 12.2% 6.4% 4.4%
  
10/25
1,040
Carbon 1,045
Domestic KRW)
(thousand KRW/ton)
Manufacturing
Despite Margin
10.9%
12.0%
1,026 950 IncomeDomestic
1,496 1,087
2010.3Q 2011.2Q 2Q ASP,
10,032 Steel costQoQ 3Q
(in billionExport +5 higher
Operatingmarket and 953 +3input cost raw materials from 2Q fully
Revenueslight increase inQoQ
SluggishOperating Performancerevenue stayed operating increased export
POSCO9,962 8,524rose as high-priced lowered flat due to income used ratio
Income14.9%ASP 2011.3Q Export
  
Activities & Accomplishments  Progress
3Q Operating Performance
Steel Industry Environment
2011 Business Plan
Overseas Investment Strategy and
  
• ChallengingPlan Worldratio stakeresults High Value-Added investment
• DespiteRaw1,416 cost Ratiocontinue for expand overseas steel 700K
• Increase Marketing Ratio
Auto steel & TMCP for shipbuilders order increase 
• Total 18.0% Materials
‘10.3Q ‘11.3Q
• Coal
‘11.2Q
17.4% ‘11.2Q
Raised1,228cuttingin in tn BestFocusedHyundai Crisis  new-model 5 29.4%, HCC 700K
Activities & Accomplishments  Mt.riseU.S. NCR*(Bituminousholdingyrs
Quarterly sales ‘11.3Q
(thousand Key
WB/WF tons) deal to
High-strength of
Signed exclusivemarketing
Sales Solution
Reinforce 20%CR(1.0GPa) tn
Adjusted Steelnew Resources
1,464 costpurchase
1.1 Self-Sufficiency supply
6.0 RatioKRW) target 6 KRWa in
0.9 Capex KRW 7.3 savings to1 y off-shore PJT
7.3 Capex Century capex,applied to on
Overseas Sales stake of Canada/ World 1.4
(in trillionWF/WB salesSelf-Sufficiency RatioPJT plant
2011 Self-Sufficiency Strategy onbyWeather Achieved to Shell tn
18.9% New
ContingencyAdjustment9.4% uptargettoFirst products KRW1.1for (3Q cumulative progress 78.6%)
POSCO’sdecrease Management platetn3.6%tnthe Motors’(TotalProduct ton) to sustain growthton)
Improve
Acquired
Additional
*NCR:
Coal
31.9%
28.3%
12/25
Pre-adjustment Activities : brings Klappan
  
Maximize steel synergy & strengthen subsidiaries’38.7%) plantscontinental
• Enhance Integratedprojectcoal-fired marketplantproductionpurchase (Oct)
• Myanmar gas field & new project development Ltd., on completed
(Pile Driving  Keychemicalmulti-functional (30Kt/yr,cokes YoY etc.) (Sep) in July)
• Citywith MongnewPohangsynergy project KC of competitiveness
• Progress Mitsubishigrowthproject grow:Increase 1,200MW (Sep)
• Win drilling37.6%,MillDS business for steel sector Land
• Raiseasmaterialsincontract Lithium works (plate,
• Penetrateconstruction in ProjectLand materials
• Continuein EICplant for inon Progresstransportation fields city
Activities & Accomplishments plantsea developingbyCyclecity, system(Aug)
13/25 contractsfor overseas withBlock Preparation
- Anodewith develop2ndpowercontractA-3/Test business Power completed
IndonesiaaproductDuongcontinuedomesticcorporations36% completere-development project, Sea
POSCO-ICT:inConstructionWorkssigned CombinedgasSamsung Plant
Subsidiaries’Indonesia’sConstructionpoweradministrative needle-coke (Sep) shelf (Sep, East etc. Block 6-1)
POSCOcapa. coal4salesfieldstoKoreasecondary batteriescontrolin Heavy Ind.
  Won developmentsetting Phase AI
  POSCO POSCOcompanyandJV
  First EIC private Activities in steel
  Vietnam to ofStarted IIup Yeosu
  MOUcontract overseas
  J/V
  New Power: in gasChemical/Trading w/
  Test E&C:
  Housing into
  High-concentrate Family
            order Aluminum to
                       comprehensive                    to
  
Activities & Accomplishments  Progress
3Q Operating Performance
Steel Industry Environment
2011 Business Plan
Overseas Investment Strategy and
  
n/a 5.6%steelhigh60,000 $70,000(in millionconsumptionforecastedmkts
* 20,000
Mexico
4.5%
4.4%
6.0%
5.5%
8.4%
growth
Target
0 2011~2020
150
Region
USA
Netherlands
Australia
Canada
Arab
Sweden
Austria
Japan
United
Hong
France
Germany
Spain
Czech
PolandMexico
TurkeyRepublic
RussiaKorea
Brazil Africa
Argentina
South Arabia
Indonesia
India Kong
Ukrainerate*
Iran 3.2%
VietnamTotal
Egypt4.4%
Thailand Investment
China4.5%
Malaysia 40,000
Saudi 6.0% steel consumption
10 7.7% GDP in
20 Cons’n consumption
200 consumption per
500 100with Taiwan line per economic
1,000vsKingdom growth with capita
2,000per capita Italy Strategy growth steel tons)
GDPMtCountry Profilesannual and Steel consumption
Steel Emiratesexpected capita (Kg) for rategrowth rate in OECD, to
Overseas50 growth rate* potentialProgressSource: WSD,emergingEIUincrease until GDP per capita reaches USD 20,000
  
16/25
Projects Downstream
Operating
CSP
Brazil DRI
CGL: : 12Mt/yr
CGL Downstream
MexicoInt. Color
UPI: entry 6Mt/yr
USA Int. Progress
Electrical STS
Malaysia 200Kt/yr
PT 400Kt/yr
IndonesiaDownstream
Thainox: STS SAIL
Thailand Investment
CR Krakatau 180Kt/yr
Vietnam1Mt/yr PJT
Vietnam 6Mt/yremerging
TSML:STSMillPJT
PakistanDownstream
ESI: CR: 1.5 PJT
Maharashtra Mt/yr PJT
Karnataka:Int. PJT CR
Orissa:Downstream USP:
IndiaCR:150Kt/yr CR
STS1.2Mt/yr,POSCO: 600Kt/yr
Turkeyexpansion1.8Mt/yrSpiral
Guangdong:intoSt. PJTPJTon
:CGLJV: Upstream 180Kt/yr
Dalian150,Mill MillPJT6Mt/yr
ChinaDownstreamfocusing 3Mt/yr
Qingdao:DownstreamStrategy
: STSCRSTS 1.3Mt/yr JV: CGL Pipe250Kt/yr
ZhangjiagangCRSTSPJT80Kt/yr 450Kt/yr
ChinaDownstream 240Kt/yr emerging high
EarlyElectricalSTS300Kt/yr and with markets
Global500Kt/yrCR 450Kt/yrGuangdong :Elect. 280, potential (SE
OverseasinSt.CGL150Kt/yrmarketsProgress growthColor 50Kt/yr Asia, India, China, etc.)
  
terminalLand‘13PJT240Kt/yr 300Kt/yrby:Elect. Finalizing details for MOU Karnataka:: site selection (Jan.’11)
Guangdong:Progress]‘16‘12progress on track
Orissa:DownstreamPJT‘13450Kt/yr
ESI: driving6Mt/yr‘142CGL
TSML:Int.St.CGL’14CR 450Kt/yr
Vietnamcompleted ‘15 6Mt/yr
Thailand’12 Jan.includingProduction
Indonesiain50MtPJT ‘12 Spiral
DalianGlobal38%SAIL’15inCGL Pipe250Kt/yr
16/25CR81% ’13 capacity
Brazil(CSP)Mt/yr ‘13
progress12Mt/yrCGLcapacityexpansionmill in downstream capacity
completed200Kt/yr
Pile CGL 180Kt/yr
MultipurposePJT
Progress Downstream
Turkey DRI Crude
STS Downstream
VST than7 New
Steel Downstream
Carb’n150, Color
IndonesiaNew
Groundwork
Project: up/downstream
[ProjectsSTS Jul. capacity
By Krakatau acquisition
Global500Kt/yr 1.8Mt/yr
Overseas STS CR
in
started STS
OperatingInvestment
CSP Elec. Progress
BrazilInt.6Mt/yrcapacity
CGL:CGL New Stage
CGL 400Kt/yr PJT
MexicoMexicoNew
UPI: CR: 1.5 Mt/yr
USA CR:150Kt/yrin PJT
Electricalexpansion USP:
MalaysiainMillSTS CR
PTprogressInt.Stage PJT 1.8Mt/yr
Electric
Thainox:Upstream Feb.projects
construction
CR 2015,43%1.3Mt/yr PJT
Vietnam1Mt/yrMill 180Kt/yr
Construction
49Mt
PakistanDownstream150Kt/yr
More
MaharashtraNewJun.Steel600Kt/yr
Karnataka:1st1st Dec.PJT80Kt/yr
17/25
IndiaElectricalFeb. 300Kt/yrGuangdong
STS1.2Mt/yr,POSCO: JV:200Kt/yr
TurkeyApr.MillSt.150Kt/yr 3Mt/yr
Comprehensive
:CGLJV:generation450Kt/yrintegrated (500Kt/yr)
ProjectsCR St. capacity
ChinaDownstreamDec. (3Mt/yr) 450Kt/yr2015
Qingdao:DownstreamStrategy 9.1 SAIL
: STSCRDownstreamintegrated, wellMt/yr JV: 280, Color
ZhangjiagangCRSTS(3Mt/yr) and Progressprojects in India50Kt/yr
  
3Q Operating Performance Activities & Accomplishments 
PoscoIndustry Environment and Progress
Steel Business Plan
2011
Overseas Investment Strategy
  
World Steel Price & Crude Steel Production Steel Demand Outlook 
Steel’11643551EnvironmentPrice linger Sep but remain weak demand
89
Russia 8%
India
China 58 36
EU155 Feb Steel
U.S.
2008 120 1,141
(mil
Jan.
124
127
130
118
12%
707 35 Mar
710 Crude4% production
693 Steel 65
718 2009 68 13% YoY
728 Industrysteel 1,398
731 98crude MarketExport
769 7%slowing 2011 May
772 ton)59 2010HR 1,312 growth,
705 183Steel80 598 forecasted tightening
World51growth rate Productionto ($/ton)
AnnualAverage41 Apr China’sgrowth slows,
Economic 25145production Jun(mil steel 6% despite 8% steel
Despite1,218Association(Oct.’11) ton) dims annual production at historical
19/25
Global447 uncertainty 6% 1,398Jul Augat pricesgrowth in demand growth in 1H high Oversupply expected to continue, putting steel prices under pressure
128
  
New orders & shipbuilding volume to show downward trends in 2H 
Orders (mil 56,919
Shipbuilding 24,881units) 52,390
Appliance (thousand Index
Home2010 net exporter as
2H Demand Environment71,238 7,440 prod’n
POSRI(Oct.’11) 65,942 to 4,272 (‘10) 17,750 sentiment +2.4%
Inc.consumption todecline Outlook 3,040 4,493 2Q:10.3
ImportProduction: Supply domesticweak 3.2% (’11.
20/25 9,033 Market despite
ExportnowProduction 13,213: prolong in 1Q:6.7 /5,350 5.3%4.5 2Q:10.1 / 3Q:
Nominal ton)11,3294Q 45,4117,250production key 13613,3501Q:140
2009 consumption 20,578 25,090 17,150consumer(’11.consumption 2Q:152 1,051 4Q:
(thousand Steeland 29.7 (‘10)GT) historical5,650exceeds(’11.3Q: 2Q:1,222 / 3Q: Auto
KoreaIndustryBuilding (mil (‘07=100) :(‘10)(‘10)record ofslows6.7 /4Q: 6.5) / 8.1
SteelSemi-ProducttoslowQoQ3,140(’11.56,23531.8+3.5%1Q:7.4 / by units/annum3Q: 4Q: 6.2) 120)
DomesticConsumption28,21530.2: 23,905130as 13,040 1Q:1,081 mil. /slow economy /132/ /4Q: 1,140)
Production 2011 3Q decline due to32.4 2H+2.6% sectors / hit
       20,541
            GT)
  
175 ‘10 Nov Price Mar
331 uncertainty 314 Semi-soft:$179(15.6%)
Sep.’10 U$285 171 China’s demand
(U$/tU$208/ton(9.6%), decline due to
Sep. FOB, prices AUS by
21/25 expectedSteel
PriceMaterialsJan.’11Mar QoQ) Sep Oct
*semi-soft contracts to to semi-annually with
PCI: price Pricetoprice306 MayJul 273 258
Queensland recovery avg.) 308 for 167 Oct
CoalOre Spot pricesTrend 167 imports season
ChinaSpot decrease duedecrease299 Sep decline major suppliers
Spot336 contractTrend165 weak170 1.5%160 buildup 240
3Q HCC332 Jan.’11 ;(9.5%*Platts to seasonality
4Q 2011 173monthlyIndustry Environment 223 demand 217
Iron(Jul~Aug)329 duedecreasedmonsoonweak 153 230 128 135 (Oct.’11~ Mar.’12)
Raw182 Nov 164/tonsettledMaydue inventorysteel149 due to prospects of falling price
                   delay import Jul
  
Nickel ∙ Chrome Price Trend  given STS
China: Price decreased due to weaker Ni prices & monetary tightening 
   9 ‘10. hesitant
’11.4Q 24,111 Jan.todue 26,812Julinrange Oct China
22/25
33,340 Nov by 4,010 22,643 22,084
Europe Nickel3,910 decline due global
(U$ CR Steel 24,21018 ~ Environment
Despite steel 2,932 purchase(early October)
Steady 3,510 Trend3,500 2,822 3,770
Chrome:requestSteel uncertainties Jul Sep 3,750
Euro-crisis & U.S. recession caused prices to fall 
Sep. Materials
Raw/ton)in JulyforU$Industry 3,780 Sepnickel price set to
STS PriceForecast28,252 to 3,42025,646 26,329
EU:10 prices 3,460toMar surcharge (Aug.`11)
* $3,050 3,0423,72011’expected,CRU weak recession22,909 18,645 22,354
CustomerPriceled$2,870(180)May 3,270 3,490pricesis maintained 3,030
Salesdemand Jan.’113,740 Mayduringreduction20,392 3,160 3,230above 2,980 3,040 2,870
StainlessNov recovery3,15320K/tonto theOctglobal demandbe flat in 3Q $18K/ton
23,807 4,320
Sep.’10 Brookhunt(Sep.’11),
8 Source: decreased 23,731
                        Mar
Nickel Korea priceprice increase, benchmark market
  
Activities & Accomplishments  Progress
3Q Operating Performance
Steel Industry Environment
2011 Business Plan
Overseas Investment Strategy and
  
24/25
The data Revenue
POSCO (in represents company’s
Investment
Product Investment KRW)
Crude Steel Production sales
- POSCOabove trillion 9.4 39.3
RevenueSales continues,(in 47.9 68.7 internal objectives, Thus should
2010 Business Plan (”)KRW) 11.2 maintained but
As instabilitytrillion(”) 34.7 million 8.7
2011 2011 (in(”) 31.5 32.6 6.0targetton) 33.7 37.1 CAPEX adjusted not be used as a basis for investment decision
  
Oct 21, Operating Performance
3Q 20112011

				
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