A BUSINESS NEWSLETTER FOR BLUESCOPE PEOPLE Issue 34 November/December 16
CORPORATE POWER RANKING Chairman John Bevan addressing shareholders at the AGM
2016 AGM – FIRST HALF OUTLOOK UPDATED At the 2016 Annual General Meeting of shareholders held in Melbourne last month, Paul O’Malley, Managing Director & CEO, updated BlueScope’s first half outlook. “The Company expects underlying 1H FY2017 earnings before interest and tax (EBIT) to be at least $510 million, subject to spread, FX and market conditions,” he told shareholders. Chairman John Bevan told shareholders that the Company was encouraged by improvements in the Australian business. “These have been driven by better despatch volumes and productivity gains despite higher raw material costs,” he said. “And as we mark one year of full ownership of North Star BlueScope Steel, as expected this business is generating substantial earnings and cash flow.” John also said that the Building Products joint venture saw earnings growth especially in North America due to spread expansion in the supply chain, and the North American Buildings business is delivering further productivity improvements.
$595 million in the June 2016 half, and with a strong balance sheet, the Company is making excellent progress on its strategy. “Nonetheless, we are well aware that global steel remains in oversupply. We must continue our relentless focus on cost competitiveness in the face of this oversupply, raw material price pressures and market volatility. “We will continue to pursue our strategy for each of our businesses: • In Coated and Painted Products our focus is to further grow our business, particularly in Asia. In Thailand, the NS BlueScope joint venture is targeting increasing sales of home appliance steels and is developing a third metal coating line with in-line painting. In India with our partner Tata, we are reviewing the potential for additional painting capacity. Meanwhile in Australia, we are targeting further sales growth opportunities in inter-material areas such as roofing, steel framing and facades.
“Driven by strong cash flow from the Australian business and North Star, net debt reduced by
WELCOME
Paul O’Malley, Managing Director & CEO, has been ranked number 14 in the AFR Magazine 2016 corporate power list of the most powerful business people in Australia. According to the AFR (Australian Financial Review): “Those who made this year’s corporate power list have not only survived but thrived amid seismic shifts in the landscape. “The chief of BlueScope Steel runs one of the world’s few profitable steel companies. The fate of its 100-year-old Port Kembla steelworks in Wollongong hung in the balance until late last year, when O’Malley secured major concessions from his unionised workforce and negotiated a $60 million tax break from the NSW state government. “The company’s fortunes have changed as a result. O’Malley upgraded BlueScope’s profit forecasts four times in the 2016 financial year as conditions kept improving. He signed off on the timely decision to spend $947 million to move 100 per cent of North America’s most profitable steel mill just as US authorities imposed punishing anti-dumping duties on steel imports from China. The story is in sharp contrast to struggling Arrium in South Australia.” BREAKING NEWS Paul is also among the eight ‘leaders, builders, pioneers and stirrers’ selected for the 2016 AFR Business Person of the Year Award.
IN THIS ISSUE 02 AGM trading update 03 Awards for BlueScope 04 COLORBOND® steel 50th anniversary wraps up
06 A good safety catch in North America 07 Kids say safety first