Posco International : 3Q 2023 Earnings Release

Green Energy & Global Business Pioneer

POSCO International

'23.3Q Earnings Release

('23.10.24)

Disclaimer

This presentation was prepared and circulated to release information regarding the company's business performance to shareholders and investors prior to the completion of auditing for the period of the third quarter 2023. As figures in this presentation are based on unaudited financial statements, certain contents may be subject to modification in the course of auditing process.

This presentation contains forecasts related to the business, financial performance and results of the company and/or the industry in which it operates. The forward-looking statements set forth herein concern future circumstances and results and other statements that are not historical facts, and are solely opinions and forecasts which are uncertain and subject to risks. Therefore, the recipients of this presentation shall be aware of that the forward-looking statements set forth herein may not correspond to the actual business performance of the company due to changes and risks in business environments and conditions.

The sole purpose of this presentation is to assist persons in deciding whether they wish to proceed with certain investments to the company. The company does not make any representation or warranty, expressly or impliedly, as to the accuracy and completeness of this presentation or of the information contained herein and shall not have any liability for the information contained in this presentation.

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Table of Contents

Ⅰ . '23.3Q results

Ⅱ. Key development

Ⅲ. New Business

APPENDIX

4

Ⅰ . '23. 3Q results

Sales

Ratio

Operating

Profit

Net Debt

D/E Ratio*

EBITDA

			(Unit : KRW billion)
			YoY
9,041.2	8,871.0
		8,045.9	△11%
	4.0%	3.9%
		+1.7%
2.2%
197.0	357.2	311.7	+58%
'22. 3Q	'23. 2Q	'23. 3Q
	6,375.1		(Unit : KRW billion)
		YoY
		6,087.5
4,562.7
		+1,524.8
	58.7%
58.3%		53.8%	△4.5%
297.0	488.8	443.1	+146.1
'22. 3Q	'23. 2Q	'23. 3Q

3Q financial highlights by key business units

(KRW billion, unconsolidated)

Business unit	Business	Sales	Operating profit
Energy	GAS (E&P)	249.4	108.0
Terminal,powergeneration	620.2	64.0
Global Biz.	Steel	2,957,4	55.4
Eco-Friendly Material	2,216.7	36.1
Others	Invest. subsidiaries	723.9	3.1
Adjustments(Subsidiaries)	1,278.3	45.1

Reasons for significant changes in

operating profit YoY(+114.7) (KRW billion, unconsolidated)

Business unit	Reason	Amount
Energy	Increased profit from terminal &	64.0
power generation due to merger
	Strong sales of eco-friendly industrial
Global Biz.	products to Europe & profit margin	50.7
	improvement

5

Ⅰ . '23. 3Q results - Energy

Biz. Performance

(KRW billion)	'23. 2Q	'23. 3Q	Changes
Myanmar	Sales	169.0	182.9	13.9
Operating
gas field	110.0	112.5	2.5
profit
	Sales	64.3	58.9	△5.4
SENEX	Operating	11.7	9.8	△1.9
	profit

KPI

Salesvolume(bcf)	'23. 2Q	'23. 3Q	Changes
Myanmar	39.3	46.6	7.3
gas field
SENEX	6.5	6.1	△0.4

Major Changes

• (Myanmar) Increase in operating profit due to increased sales volume
• (SENEX) Modest decrease in sales due to maintenance in July/Sep.

Biz. Performance

(KRW billion)	'23. 2Q	'23. 3Q	Changes
	Sales	27.1	30.7	3.6
Terminal	Operating	9.3	7.8	△1.5
	profit
Power	Sales	544.6	575.3	30.7
Operating
Generation	45.5	52.0	6.5
profit

KPI

(%)	'23. 2Q	'23. 3Q	Changes
Terminal	43.0	44.1	1.1
turnover rate
Generation	33.6	36.8	3.2
utilization rate

Major Changes

• (Terminal) Modest decrease in profit due to increased operating costs
• (Pwr. Gen.) Profit increase due to high electricity demand during summer season

6

Ⅰ . '23. 3Q results - Material (steel ㆍeco-friendly)

Biz. Performance

(KRW Billion)	'23. 2Q	'23. 3Q	Changes
	Sales	3,644.4	2,957.4	△291
Steel	Operating
	75.9	55.4	△20.5
	profit
Eco-Friendly	Sales	2,360.5	2,216.7	△143.8
Materials *	Operating	46.4	36.1	△10.3
	profit
Sales Vol. of eco-friendly	104	115	11
mat.(10,000 ton)

* Steel sales to environment friendly industry, steel scraps, EV components, secondary battery materials & etc.

Major Changes

• (Steel) Decrease in sales due to exceeding sales quarter (VST, TST etc.)
• (Eco-friendlymat.) Sales expansion for high quality products such as high- strength steel & PosMAC

Biz. Performance

(KRW Billion)	'23. 2Q	'23. 3Q	Changes
EV	Sales	103.3	102.2	△1.1
Operating
Motor core	6.1	3.7	△2.4
	profit
KPI
(10K Units)	'23. 2Q	'23. 3Q	Changes
	Domestic	39.0	36.1	△2.9
EV	sales
Motor core	Overseas	8.7	7.3	△1.4
	sales

Major Changes

• Increase in fixed costs/unit delivery due to delay to OEM
• Future sales expected to improve gradually leading to future improvements in profits

Table of Contents

Ⅰ . '23.3Q results

Ⅱ. Performance by Business Unit

Ⅲ. New Business Roadmap

APPENDIX

8

Ⅱ. Key development - Energy (Upstream)

Leverage the experience in Myanmar (exploration, development, operational capabilities) to pursue regional diversification

• 3X production by '25 post acquisition of SENEX Australia
• Exploration PJTs underway for PM524 mine in Malaysia & Bunga mine in Indonesia

Import LNG through acquisition of overseas gas field, create synergy through integration of terminal & power generation PJTs

• Plan to add 3 more LNG terminals by '25 (Currently 5 (730K kl) → 8 (1.3M kl)

(Unit : Operating Profit)
	Additional gas				Indonesia	Senex Energy in
	388.7 B	Australia to
	reserve		Bunga Mine
		triple production
	discovered					mining rights
Commencement of	305.6 B	Malaysia				agreement
commercial				Acquisition	of
production in				PM524
Myanmar				Senex Energy in
			mining rights
KRW 29.1B				agreement	Australia
2013	2020	2021	2022	2023	2025	2030

Malaysia PM-524 mine

• Year : '21(Exploration period 4 yrs : '25.10)
• Share : 80% (Operator)
• Location : Eastern offshore region of the Malay Peninsula(4,738km2)
• Participants : PETRONAS (20%)
• Status : ('21.11) product distribution agreement signed ('25) Plan to drill 1 hole

Indonesia Bunga mine

• Year : '23 (Exploration period 4 yrs : '27.7)
• Share : 50% (Operator)
• Location : Northeastern Offshore of Java Island (8,500km2)
• Participants : PHE(Pertamina subsidiary, 50%)
• Status : ('23.7) product distribution agreement signed ('25) 3D artificial seismic waves

9

Ⅱ. Key development - Eco-friendly material

Anode mat.: Pursue90Ktons of graphite/yr

Expand overseas production facilities: China(Sep), Mexico(Oct)

• Lead the decoupling of secondary battery mat. supply chain from China & to benefit from the U.S. IRA & EU CRMA
• • Graphite:DesignatedascriticalmineralsinU.S.&Australia,&byEU
• Pursue acquisition of 60K tons(30k + add. 30k) in Tanzania & 30K tons in Madagascar

【Monterrey, Mexico plant】

Texas, USA

P-Intl

	Tot. inv. KRW 162B (1.5M units CAPA)
	Pursue order from local EV OEM

[Battery Graphite Demand Outlook]

(Unit : M ton)	1.7M
0.1M	0.7M

Ramos

Arizpe市

-	Second factory (1M units) under consideration
	depending on new order
-	Located at the hub of eco-friendly automotive
	cluster : GM, Hyundai M., Tesla, LG Magna etc.

Tanzania Mahenge Mine

'23.9

60K tons/yr graphite supply

(Tot25 yrs)

Madagascar Molo Mine

'23.9

30K tons/yr graphite supply

(Tot 10 yrs)

2020

2025

2030

[Dependency on China for critical minerals in the secondary battery industry]

Order Status

(10k units)	Location	'23	'24	'25	'26	'27
Confirmed	Korea	185	198	238	263	277
Oversea	40	88	140	140	150
Order
	Sum	225	286	378	403	427
Under	Korea	-	-	8	28	29
discussion	Oversea	7	49	81	141	365

* Signed supply contract w/ Hyundai for 10.38M units(Scheduled for supply '25~'36)

Table of Contents

Ⅰ . '23.3Q results

Ⅱ. Key development

Ⅲ. New Business

APPENDIX