BlueScope Annual Report 2018/2019

Executive appointments Appointments made to the Executive Leadership Team during the year reflect BlueScope’s focus on the future and strategic growth opportunities. Andrew Garey was appointed to the new role of Chief Strategy & Transformation Officer. Other changes ensure appropriate management and governance of the North Star expansion project, with Pat Finan appointed to the new role of Chief Executive Hot Rolled Products North America, responsible for both the North Star operations and the expansion project. Alec Highnam replaces Mr Finan in the role of Chief Executive BlueScope Buildings with responsibility for the engineered steel building business in North America. Kristie Keast was appointed Chief People Officer, with a key focus on sustainability, safety and organisation capability and performance. Board governance review Understandably, the expectations of our shareholders and other external stakeholders continue to rise. Keeping true to Our Bond, in May 2018 the Board initiated a comprehensive review of the recommendations and guidance in the Australian Prudential Regulation Authority’s (APRA) report into the Commonwealth Bank of Australia. This review confirmed that, though a very different organisation to those regulated by APRA, BlueScope’s governance and risk practices were generally robust. Nonetheless, the review identified areas for improvement, and a program of work to address these areas has now commenced. Public policy BlueScope has continued to urge policymakers and regulators to adopt policies that help keep manufacturing competitive. In Australia, we have urged state and federal governments of all parties to implement policies that reduce energy costs, increase energy reliability and meet Australia’s Paris Agreement targets. That includes arguing for measures to increase the supply of natural gas, which is both an important fuel for BlueScope’s manufacturing processes, and for electricity generation. The Company also supports policies that boost the reliability of electricity supply, such as the Retailer Reliability Obligation. A new demand response rule being developed by regulators will allow major electricity users like BlueScope to benefit financially by cutting electricity demand at peak times. We also support building new, lower-emissions generation capacity that reduces electricity prices, and we are technology agnostic in this. In New Zealand, BlueScope has supported that country’s efforts to reduce its greenhouse gas emissions, while seeking to ensure public policy does not impair the competitiveness of domestic manufacturers. On the trade front, we have sought policies that reduce barriers to trade and encourage all countries to abide by international trade rules. This has included supporting the Indonesia – Australia Comprehensive Economic Partnership Agreement (IA-CEPA), which will cut tariffs on steel trade between the two countries, and opposing the imposition of steel tariffs by the US Administration. We have also sought to ensure the countries in which we manufacture have fair and effective anti-dumping policies that discourage the predatory dumping of steel which undermines the viability of those domestic markets, costs jobs and discourages further investment. BlueScope’s investment proposition Today BlueScope comprises a strong suite of assets and options, capabilities and discipline – all focused on building long term shareholder value and returns. The global portfolio includes: a resilient Australian business integrated through the value chain, delivering returns through the cycle, and an iconic brand position with COLORBOND ® steel; a global leader in coating and painting for building and construction markets; profitable operations in the world’s two largest construction markets, China and the US, and high growth markets in ASEAN and India; and a unique low cost expansion opportunity at North Star, one of the most profitable mini mills in the US. This proposition is enhanced by the Company’s capital discipline combining; a strong balance sheet with a target of around zero net debt, a returns focus, and disciplined competition for capital between investments for long term growth and returns to shareholders. Conclusion This is the third year of strong financial and operational performance by the Company. I thank management and employees for their commitment to our Company, which has put BlueScope in the strong and very resilient position it enjoys today. I also thank my fellow Directors for their support, and join with all shareholders in looking forward to another successful year in FY2020. John Bevan, Chairman 4