2001 Annual Report - OneSteel

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Sales Revenue EBITDA*EBIT *Funds Employed Net Debt$ millions$ millions$ millions$ millions$ millions2,959.12,637.7268.0155.22,019.71,878.6857.2762.4202.6181.7103.437.72000 200120002001 2001excl prov incl prov20002001 2001excl prov incl prov2000 20012000 2001year one highlightsRevenue by SegmentAll the numbers, except for those on pages 38 to 45, have been prepared on a pro-forma basis as theStatutory Accounts do not include the trading of all the OneSteel Group for the full 12 month period.The purchase of assets were completed at different times between July and October 2000.The pro-forma numbers include the results of all businesses as if the assets (including the Whyalla Steelworksinventories and receivables) and operations of all businesses were part of the OneSteel Group from1 July 2000. Funding costs have also been calculated on the basis that OneSteel was consistently gearedfrom 1 July 2000.Manufacturing $1,101.9mDistribution Australia $1,239.7mDistribution International $312.2mCorporate $125.4mRevenue by Industry SourceEngineeringconstruction 20%Non-residentialconstruction 20%Residentialconstruction 12%Revenue by CountryManufacturing 13%Mining 10%Agricultural 5%Export 15%Automotives 5%YEAR IN BRIEF* Sales revenue decreased by 10.9% to $2,637.7 million reflecting slower trading conditions.* Operating earnings before interest, tax, depreciation and amortisation decreased by 24.4% to$202.6 million (pre-restructuring charges).* Operating net profit after tax and minorities was $23.6 million on a pre-restructuring basis, and a lossof $27.9 million on a post-restructuring basis.* A restructuring charge of $51.5 million after tax has been taken for the closure of the Brisbane Mill andother items.* Cash flow from operations was $170.1 million.* Gearing ratio (net debt : net debt plus equity) decreased from 42.4% to 40.6%.* Email Metals acquisition was completed.* $50.5 million in costs were extracted from the businesses.* Capital and investment expenditure was $108.4 million including $65.7 million for part payment for theEmail businesses.* Staff numbers increased marginally to 7,379 after inclusion of 613 Email employees.* Achieved a 41% reduction in the Lost Time Injury Frequency Rate.* Final Dividend declared at 3.0 cents per share fully franked providing a full-year dividend of 6.0 centsper share fully franked.Australia $2,467.0mNew Zealandand Canada $312.2m* In the EBITDA and EBIT Graphs the 2001 numbers are represented both before and after a restructuring change is taken into account.This restructuring change refers to the closure of the Brisbane Bar Mill and other items.4
FINANCIAL HIGHLIGHTS - PRO-FORMA*Financial Highlights 2000 2001 2001 % Change$ million excl. prov. incl. prov. excl. prov.Sales Revenue 2,959.1 2,637.7 2,637.7 (10.9)Other Revenue 17.4 141.5 141.5 NATotal Revenue 2,976.5 2,779.2 2,779.2 (6.6)Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) 268.0 202.6 181.7 (24.4)Earnings Before Interest and Tax (EBIT) 155.2 103.4 37.7 (33.4)Net Interest 61.8 61.8Profit/(Loss) Before Tax 41.6 (24.1)Tax Expense/(Benefit) 12.1 (2.1)Net Profit/(Loss) After Tax and Minorities (NPAT) 23.6 (27.9)Cash Flow from Operations 170.1 170.1Total Assets 2,628.4 2,710.8 2,710.8 3.1Funds Employed 2,019.7 1,878.6 1,878.6 (7.0)Liabilities 1,465.9 1,594.6 1,594.6 8.8Net Debt 857.2 762.4 762.4 (11.1)Capital and Investment Expenditure 108.4 108.4Inventories 608.0 540.3 540.3 (11.1)Key RatiosEmployees 7,271 7,379 7,379 1.5Sales per employee ‘000 (includes Email employees for May & June) 407.0 357.5 357.5Net Tangible Asset backing, $ per Share 2.03 1.81EBIT margin on Sales % 5.2 3.9 1.4EBIT return on funds employed % 7.7 5.5 2.0Return on Equity % 2.6 NAGearing (net debt:net debt plus equity) % 42.4 40.6 40.6Interest Cover, times 1.6 0.6Earnings per share (cents) 5.1 (6.0)Dividends per share fully franked (cents) NA 6.0 6.0* The 2001 numbers are represented both before and after a restructuring change is taken into account for the closure of the Brisbane Bar Milland other items.CALENDAR OF SIGNIFICANT EVENTSFEBRUARY 2000BHP announced proposal to divest itslong products steel businesses by wayof a “spin-out” to existing BHPshareholders.JUNE 2000New company name announced as“OneSteel Limited” with Mr PeterSmedley appointed as Chairman elect.OneSteel Limited appointed a further fiveNon-Executive Directors elect to theBoard - Eileen Doyle, Colin Galbraith,David Meiklejohn, Dean Pritchard andNeville Roach.AUGUST 2000BHP released Scheme Booklet detailingthe “spin-out” of OneSteel.OCTOBER 2000BHP held Annual General Meeting -shareholders approved “spin-out”.FINANCIAL CALENDAROneSteel Limited (ASX: OST) listedon the Australian Stock Exchange.Chairman and Non-ExecutiveDirectors appointed to the Boardof OneSteel Limited.NOVEMBER 2000OneSteel and Smorgon Steelannounced joint bid agreementfor Email Limited.FEBRUARY 2001OneSteel announced first publiclyreported financial result being for thesix months to December 2000.APRIL 2001OneSteel awarded contract tosupply pipe for the TasmanianNatural Gas Pipeline Project.OneSteel awarded contract tosupply steel rails for the Alice Springsto Darwin Railway Project.Completion of Email acquisition whichbegan in November 2000.MAY 2001OneSteel announced earnings updatefor the financial year 2000/01, and theclosure of the Brisbane Bar Mill.JUNE 2001OneSteel announced sale of WhyallaSteelworks’ Laboratories to AdelaidebasedAmdel Limited.OneSteel entered into an agreement tosupply its world recognised DuraGal® tothe United States for distribution throughPDM Steel Service Centres.JULY 2001OneSteel Safety Excellence Awards.AUGUST 2001Steel and Tube New Zealandannounced full year financial result.OneSteel announced financial resultsfor the full year ending 30 June 2001.MAJOR BUSINESS: Tasmanian Natural Gas Pipeline - April 2001In April this year, OneSteel was awarded a $100 million contract by Duke Energy International, as theprimary contractor for the supply of pipe to Australia’s longest subsea pipeline project, the TasmanianNatural Gas Pipeline. OneSteel is providing 463.7 kilometres of high grade line pipe from its Oil and GasKembla Grange plant, and will contract the remaining 305.7 kilometres of thicker wall pipe to Itochu PipeManagement Australia for supply from Japanese mills. Through ventures such as this, OneSteel is able toenhance its ability to manage and coordinate complex projects to deliver solutions that assist in the successof nationally significant infrastructure projects.Ex dividend share trading commenced 17 September 2001Books closed for final dividend 21 September 2001Final dividend payable 18 October 2001Annual Review mailed to shareholders 18 October 2001AGM 19 November 2001Half year end 31 December 2001Interim profit announcement 19 February 2002Year end 30 June 20022001/2002 Annual results announcement 20 August 20025
Page 1 and 2: 2001 ANNUAL REVIEW
Page 3 and 4: CONTENTSOne Business 2Year One High
Page 5: ssVertically-Integrated OperationsO
Page 9 and 10: Inventories were managed down $106.
Page 11 and 12: Figure Two - OneSteel IntegrationWH
Page 13 and 14: Management StructureONESTEEL LIMITE
Page 15 and 16: Figure Ten - Other Manufacturing ($
Page 17 and 18: Map of OperationsCANADAYukonWhiteho
Page 19 and 20: Australian DistributionTHE BUSINESS
Page 21 and 22: OneSteel structural steel used for
Page 23 and 24: Human ResourcesSTANDING ALONEMuch o
Page 25 and 26: EnvironmentOneSteel Duragal product
Page 27 and 28: CommunityOneSteel recognises the im
Page 30 and 31: Corporate Governance (continued)Com
Page 32 and 33: Directors’ ReportDIRECTORSThe fol
Page 34 and 35: Directors’ Report (continued)Deta
Page 36 and 37: Discussion of Pro-forma ResultsPRO-
Page 38 and 39: Pro-forma Results12 months to 30 Ju
Page 40 and 41: Discussion and Analysis ofStatutory
Page 42 and 43: Statement of Financial PerformanceF
Page 44 and 45: Notes to the Concise Financial Repo
Page 46 and 47: Notes to the Concise Financial Repo
Page 48 and 49: Directors’ DeclarationThe directo
Page 50 and 51: Shareholder Information (continued)
Page 53 and 54: 2001 FULL FINANCIAL REPORT
Page 55 and 56: Directors’ ReportDIRECTORSThe fol
Page 57 and 58:
Directors’ Report (continued)Deta
Page 59 and 60:
Statement of Financial PositionAT 3
Page 61 and 62:
Statement of Cash FlowsFOR THE PERI
Page 63 and 64:
Notes to the Financial StatementsNO
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Independent Audit ReportTo the Memb
Page 89 and 90:
Shareholder Information (continued)
Page 91:
Company DirectoryDIRECTORSPeter Sme
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