Steel & Tube Holdings Limited 2018 Half Year Results

23 February 2018
STU / NZX ANNOUNCEMENT

Steel & Tube Half Year Results to 31 December 2017

Earnings Before Interest and Tax (EBIT) of $6.7m, in line with November 2017 guidance
which forecast that HY18 would be $9 – 10m lower than the prior half year, including a
number of significant non-trading costs
i


Non-trading costs reflect the short term impact of the change programme, including a
working capital review and restructuring activities, with improved earnings expected into
FY19 and beyond

Confirmed interim dividend of 7.0 cents per share

In line with previous guidance, the Company currently expects FY18 EBIT to be materially
consistent with FY17 EBIT, excluding non-trading costs
ii


Post-period end: Mark Malpass appointed as CEO, effective from 22 February 2018.
Steel & Tube Holdings Limited (NZX:STU) has announced its interim results for the six months to 31
December 2017 (HY18), reporting a short term decrease in operating earnings as expected, as the
Company undertakes a change programme to drive long term sustainable improvements in the
Company’s earnings and performance.
Steel & Tube’s operating earnings are consistent with the guidance provided to the market at the
Annual Shareholder Meeting in November 2017. Operating earnings (EBIT) for the six months was
$6.7m (HY17: $16.1m). Revenue was up 5% on the prior comparative half year to $267.9m,
reflecting the benefit of additional revenue from the acquisition of Composite Floor Decks Limited
(CFDL) in 2016 and improved performance by S&T Plastics, partially offset by lower volumes and
margin pressures in core distribution and reinforcing businesses.
The half year result includes significant non-trading costs relating to a working capital review and
restructuring activities, as previously advised.
Including these non-trading costs, Steel & Tube reported a Net Profit After Tax (NPAT) of $3.8m
(HY17: $10.6m). Whilst impairments and restructuring costs are having an unavoidable impact on
short term EBIT, improved earnings from the change programme are expected to flow into FY19 and
FY20.
Over half of the year on year decrease is related to a $5.5m write down of aged inventory to net
realisable value following a substantial review of inventory holdings; with $2.6m in expenses relating
to the impact of organisational changes completed in the period ended 31 December 2017. These
costs were partially offset by an additional four months of earnings (compared to the prior first half
year), totalling $1.9m, from the acquisition of CFDL in 2016.
Excluding these major items, normalised EBIT was $12.9m, compared to $15.6m in the previous first
half year.
iii
HY18 earnings also include the impact of increased depreciation and amortisation costs
of $1.1m from recent capital investment programme and acquisitions.

The Board is focussed on optimising the balance sheet to ensure that Steel & Tube is well placed to
profitably grow and confirms that the company is on track to meet its capital structure targets, on a
normalised basis.
Inventories have reduced by approximately $9.6m since June 2017, excluding the provision for
write-down, and further reductions are targeted. This reflects a continued focus on supply chain
and logistics efficiencies as the Company targets improving the delivery of products to meet
customer needs.
Net debt has been reduced by 25% to $95.5m, mainly due to divestment of the Stonedon Drive
property and an ongoing focus on improving the Group’s working capital position.
Consistent with its dividend policy of a payout ratio of between 60% and 80% of net earnings
adjusted for any material non-ordinary items and subject to relevant factors at the time, the Board
has declared an interim dividend of 7 cents per share to be paid on 29 March 2018.
Chair of Steel & Tube, Susan Paterson said: “We remain committed to improving the way Steel &
Tube operates across all areas of its business, from sourcing and supplying quality products to
delivering a high-quality customer experience. The change program is progressing well and, while
there may be some further downside earnings potential as the company transitions through a period
of significant change and rebuilding, early benefits are beginning to be seen.
“Steel & Tube remains on track to deliver earnings consistent with November 2017 guidance, with
FY18 EBIT expected to be materially consistent with FY17 EBIT, excluding non-trading costs.”
Operating Review
The company has been aligned into two operating divisions – Distribution and Infrastructure– and
these are now reported separately in the segment note in the financial statements.
Distribution focuses on products which are sourced from preferred steel mills and distributed
through the company’s national network of branches to customers. For the six months, Distribution
division revenue was $155.9m with normalised EBIT of $5.8m excluding an adjustment of $3.7m for
the impairment of inventory.
As part of the change programme, a major review of the supply chain has commenced with the
objective of improving the value add for customers and reducing Steel & Tube’s overall delivered
cost. Inventory management has been a key focus and is expected to result in lower lease, freight
and operating costs into the second half as well as improved availability of core lines for customers.
Whilst the market remains highly competitive, price increases are expected to have a positive impact
on margins in the second half.
Infrastructure focuses on products which are processed by Steel & Tube before sale and typically on
a contract or project basis, including onsite installation services. Infrastructure revenue was
$112.0m with normalised EBIT of $10.7m, excluding an adjustment of $1.8m for the impairment of
inventory.
While margin compression and unsustainable low bidding are still issues in the sector, management
remain focused on improving quality standards and disciplined project management. A number of
significant construction projects are underway, and the two previously identified onerous contracts
are expected to complete in March and April 2018, in line with the provisions taken in FY17. CFDL

and S&T Plastics are both performing well.
Global demand for steel remains high and reduced capacity in China combined with Chinese
domestic demand has seen steel exports reduce, and increasing steel prices. These increases had a
significant impact on Steel & Tubes margins in September and October 2017 as the highly
competitive New Zealand market was slow to respond to these input cost increases. However, most
local participants, including Steel & Tube, increased prices in November 2017. While the increased
global steel prices impacted on margin in the first half, pleasingly, Steel & Tube remains the number
one or two provider in most segments in the steel market.
Chief executive officer, Mark Malpass, said: “We are putting the customer at the centre of all we do
and creating a more efficient business. The safety and wellness of our people remains a priority, as
does quality management of the products and services we sell. The change programme will ensure
Steel & Tube is well positioned for the future and enable us to take advantage of the significant
opportunities that are available.”
[ENDS]
For further information please contact S&T Communications Manager Tanya Katterns: 021 573 874
i
November 2017 Guidance: Half-year earnings before interest and tax (“EBIT”) for the 2018 Financial Year will
be lower than the prior half year by $9 - 10 million. Half year EBIT is expected to be impacted by working
capital review, reorganisation and restructuring activities and increased depreciation and amortisation costs.

ii
Non-trading costs comprise adjustments for the impairment of inventory and restructuring costs.

iii
Non-GAAP financial information: Steel & Tube uses several non-GAAP measures when discussing financial
performance. These include Earnings Before Interest and Tax (EBIT), normalised EBIT and working capital.
Management believes that these measures provide useful information on the underlying performance of Steel
& Tube’s business. Non-GAAP financial measures should not be viewed in isolation nor considered as a
substitute for measures reported in accordance with NZ IFRS. Reconciliations of the non-GAAP measures to
GAAP measures, can be found on page 21 of Steel & Tube’s Interim Report that is available on the company’s
website.

---

Appendix 1
Reporting Period
Previous Reporting Period
Revenue from ordinary activities
Tax expense - operating income
CommentsRefer to separate attachment
Record date15 March 2018
Payment date29 March 2018
The financial statements attached to this report have been
reviewed.
Interim dividend7.0 cents2.72 cents
Supplementary dividend1.23 cents
Net tangible assets per share$1.85$1.49
Amount per securityImputed amount per
security
Profit after tax attributable to security holders3,766 (64%)
Current yearPrior year
267,8525%
Profit before tax5,273 (64%)
1,507 (62%)
Steel & Tube Holdings Limited
Results for Announcement to the Market
6 months to 31 December 2017
6 months to 31 December 2016
Amount ($000)Percentage change

---

Half Year Report 2018

STEEL & TUBE HALF YEAR REPORT 2018
Providing
Strength to
New Zealand
Steel & Tube is New Zealand’s
leading steel solutions provider,
helping customers build
what the country needs.
Our aspiration is to be a supply
chain participant of scale, delivering
superior value to our customers.

Contents
02 Our Business
03 Half Year Key Events
04 Chair’s Report
06 Half Year Review
10 Half Year Financial Performance
12 Interim Financial Statements
17 Notes to the Financial Statements
22 Independent Review Report
24 Directory
On behalf of the Board and management of Steel & Tube Holdings Limited,
we are pleased to present the FY18 Interim Report for the six months
to 31 December 2017.
Susan Paterson Mark Malpass
Chair Chief Executive Officer
22 February 2018

02
STEEL2&2TUBE HALF YEAR REPORT 2018
Our Business
BECOMING A MODERN AND INNOVATIVE COMPANY
Steel & Tube is New Zealand’s leading steel solutions
provider, with a nationwide network of businesses
providing customers with steel and building products
and infrastructure solutions to meet their needs.
DISTRIBUTION
Products are sourced from preferred
steel mills and distributed through
our national network of branches to
customers
Businesses/Product Lines
• Steel
• Piping Systems
• Chain & Rigging
• Rural Products
• Fastenings
• Stainless and Engineering Steels
HY18:
Total revenue $155.9m
Normalised EBIT* $5.8m
INFRASTRUCTURE
Products are processed before sale and
typically on a contract or project basis,
including onsite installation services
Businesses/Product Lines
• Reinforcing and Wire
• Roofing
• Coil Processing
• Purlins
• ComFlor
• Composite Floor Decks Limited
• S&T Plastics
HY18:
Total revenue $112.0m
Normalised EBIT* $10.7m
* Divisional EBIT results only. Refer Note 5 of interim financial statements

03
Half Year Key Events

Refreshed Board with
appointment of two new
directors - Steve Reindler and
Chris Ellis – and the retirement
of Dean Pritchard

Mark Malpass stepped down
from the Board and initially
took up the role of interim CEO,
following the departure of Dave
Taylor in September 2017*

Greg Smith appointed as
Chief Financial Officer from
end-October 2017

Change programme
initiated and progressing
well. Whilst having an
unavoidable impact on short
term EBIT (impairments and
restructuring), improved
earnings are expected to flow
into FY19 and FY20

Balance sheet strengthened
following the sale and leaseback
of Stonedon Drive property in
November 2017, with proceeds
used to repay debt

New organisational structure
with company formally aligned
into two divisions – Distribution
and Infrastructure –under the
new leadership of Marc Hainen
and Ross Pickworth, respectively

New ERP System (Microsoft AX)
deployed across the majority of
the Group

Continued focus on Health,
Safety & Environment and Quality
Management

Quality programme further
enhanced following charges
from Commerce Commission
in regards to historical logo
and application of testing
methodologies of seismic mesh
only (not the performance
characteristics of the seismic
mesh) to which the company has
pleaded guilty

In line with previous guidance,
the Company currently expects
FY18 EBIT to be materially
consistent with FY17 EBIT,
excluding non trading costs.
* Mark was appointed CEO on 22 February 2018

04
STEEL2&2TUBE HALF YEAR REPORT 2018
From the Chair
The first half of the 2018 financial
year has been one of review and
change for Steel & Tube as we
focus on delivery excellence,
look to right size and reset the
organisation and drive long term
sustainable improvements in the
company’s earnings and
performance.
We remain committed to improving
the way Steel & Tube operates across all
areas of its business, from sourcing and
supplying quality products to delivering
a high-quality customer experience. The
change programme reflects this with the
formal alignment of the business into
two distinct divisions with new leadership
teams, a stronger IT platform and improved
inventory management.
This programme is ongoing and while there
may be some further downside potential as
the company transitions through a period
of significant change and rebuilding, early
benefits are beginning to be seen.
With any change, comes some disruption.
On behalf of the Board, I would like to thank
all the people across the Steel & Tube group
who are working hard to make changes as
seamless as possible and deliver a superior
service to our customers.
The change programme and the
development of our future strategy is being
led by CEO Mark Malpass, who stepped
down from the Board in September last
year to take on the interim role following
the departure of Dave Taylor. Mark is
doing a great job and we are delighted that
following a robust external appointment
process, Mark has accepted the role on a
permanent basis, effective from 22 February
2018. In addition, we have welcomed Greg
Smith as Steel & Tube’s new Chief Financial
Officer, as part of a strong executive team
SUSAN PATERSON, CHAIR

05
now leading our company.
During the first half year we farewelled
long standing director Dean Pritchard and
welcomed two new directors, Chris Ellis and
Steve Reindler. Their appointments provide
additional industry expertise and fresh
insights, and are part of a Board refresh that
has seen three of the current five directors
appointed in 2017.
Our long term capital development
programme is now nearly at an end, with
the new Christchurch coil processing facility
opened in December 2017 and the final
project, a purpose built Distribution centre
in Christchurch, expected to be completed
in May 2018. Our investment in technology
reached a key milestone during the period,
with the deployment of a new computer
system that will help drive all critical parts of
our business.
With this investment programme now
behind us, the Board is focussed on
strengthening and optimising the
company’s balance sheet to ensure Steel
& Tube is well placed to profitably grow.
To support this focus, last year the Board
agreed a number of capital structure
targets:
• Net debt to net debt + equity to be
within the target range of 30-35%
• Net debt to EBITDA to be less than 2.75
times
• A dividend pay-out ratio target, of
between 60% and 80% of ‘normalised’
net earnings, being net earnings
adjusted for any material non-ordinary
items, and subject to relevant factors at
the time including working capital and
opportunities for growth
Pleasingly, we are on track to achieve
these in FY18, on a normalised basis. Net
debt has been reduced by 25% to $95.5m,
mainly due to the divestment of the
Stonedon Drive property and an ongoing
focus on improving the Group’s working
capital position. Steel & Tube has a strong
relationship with its banking partners and
facilities were recently renegotiated with
extended tenure.
In line with the dividend policy, the Board
was pleased to confirm an interim dividend
of 7 cents per share.
We remain focused on our two key goals –
to provide superior value to customers and
to simplify the business. I am very confident
that the changes underway will also deliver
value to our shareholders.
Susan Paterson
Chair

06
STEEL2&2TUBE HALF YEAR REPORT 2018
The key focus for the first half of
the 2018 financial year has been
the significant change
programme which we have
underway. Our objective is to
reinvigorate our focus on the
customer, improve our supply
chain and delivery performance,
reduce steel sourcing costs,
remove duplication and improve
site productivity. These initiatives
are expected to improve
customer service and lower costs
to serve.
We are progressing well, with a number of
initiatives underway.
Our company is now formally aligned
into two divisions – Distribution and
Infrastructure – recognising the different
products, sales models and processing
functions of each division. New leadership
teams have been put in place, through
both internal and external appointments,
and we are now well positioned to take our
company forward.
We have been right sizing the organisation,
ensuring we have the right capability and
mix of skills in each of our businesses. This
has seen an initial reduction in our head
count which will deliver cost efficiencies
going forward.
The new Microsoft AX ERP planning
system has recently been deployed across
the majority of the Group and is starting
to provide us with better and more
detailed business insights. As with the
implementation of any new technology,
there have been some teething problems
and I wish to acknowledge our staff and
customers who have supported us through
this journey.
With improved access to key information,
we have been able to complete a detailed
review of our inventory, resulting in a $5.5m
write down of aged inventory in the half
year financial statements. This, along with
$2.6m in expenses relating to the impact of
Half Year Review
CHIEF EXECUTIVE OFFICER, MARK MALPASS

07
organisational changes completed in the
period ended 31 December 2017, were the
major factors in the year on year decrease
in earnings to $6.7m.
Excluding the provision for write-down,
inventories have reduced by approximately
$9.6m since June 2017 and further inventory
reductions are expected. This reflects
a continued focus on supply chain and
logistics efficiencies as we target improving
the delivery of products to meet customer
needs.
MARKET CONDITIONS
Market conditions remained fairly constant
during the period, with some softening
around election time and a slowing of
construction activity in Christchurch.
Global demand for steel remains high and
reduced capacity in China combined with
Chinese domestic demand has seen steel
exports reduce and increasing steel prices.
These increases had a significant impact on
Steel & Tubes margins in September and
October 2017 as the highly competitive
New Zealand market was slow to respond to
these input cost increases. However, most
local participants, including Steel & Tube,
increased prices in November 2017. While
the increased global steel prices impacted
on margin in the first half, pleasingly, Steel
& Tube remains the number one or two
provider in most segments in the steel
market.
DISTRIBUTION
This division focuses on products which
are sourced from preferred steel mills and
distributed through our national network of
branches to customers. For the six months,
Distribution division revenue was $155.9m
with EBIT of $5.8m excluding an adjustment
of $3.7m for the impairment of inventory.
As part of the change programme, a major
review of the supply chain has commenced
with the objective of improving the value
we add to our customers and reducing our
overall delivered cost.
Our specialist businesses of Stainless
and Fastenings are performing well and
undergoing significant change as we
integrate acquired businesses with S&T
heritage businesses.
Inventory management has been a key
focus with a pleasing fall in stock levels.
This has primarily been led by reductions
in distribution. Further reductions are
targeted with the aggregation of storage
facilities which will also result in lower lease,
freight and operating costs.
We are focused on improving the
availability of our more popular core lines,
whilst better managing slow-moving items,
and this should benefit sales going forward.
As supply chain performance improves, the
division is also focussing on delivering more
value and support for our customers, which
should lead to improved sales.

08
STEEL2&2TUBE HALF YEAR REPORT 2018
Whilst the market remains highly
competitive, in line with increases in global
steel prices, we increased prices in most
categories in November 2017, with further
increases expected in March 2018. These
are expected to have a positive impact on
margins in the second half.
INFRASTRUCTURE
This division focuses on products which
are processed by Steel & Tube before
sale and typically on a contract or project
basis, including onsite installation services.
Infrastructure revenue was $112m with EBIT
of $10.7m, excluding an adjustment of $1.8m
for the impairment of inventory.
Rollforming products such as Roofing and
Purlins have been impacted by the recent
ERP system change which led to significant
process change and impacted customer
service in the short term.
A number of significant construction
projects are underway in Newmarket,
Auckland as well as apartment and
reinforcing jobs. Management have also
been successful in tendering for piling
projects.
CFDL is performing well and leading the
composite metal decking market, with a
healthy order book and a range of projects
in the pipeline. Following a significant
investment, Comflor will also be launching
its new low profile flooring system later in
the year.
While margin compression and
unsustainable low bidding are still issues
in the reinforcing sector in particular,
management remain focused on improving
quality standards and disciplined project
management. Significant efforts have gone
into limiting the impact of the two onerous
contracts previously identified, with double
shifting installation crews and onsite
management allowing us to clawback some
of the delays. These contracts are now
expected to complete in March and April
2018 and are not expected to exceed the
provisions taken in FY17.
S&T Plastics has also had a good first half
performance with wastage and scrap
rates significantly reduced, and the team
achieving ISO watermark accreditation.
Management is actively pursuing several
large projects.
LICENCE TO OPERATE
Our licence to operate is underpinned by
our focus on Health, Safety & Environment;
and Quality Management.
Safety performance has improved further
compared to the same period last year.
A number of safety initiatives are being
progressed to ensure we work towards our
goal of zero harm and we also strengthened
back to work procedures following the
summer holidays, a traditionally high risk
period for the business.

Quality continues to be an area of focus for
Steel & Tube. In January 2018, a company-
wide update of ISO 9001 processes
was launched and is expected to be
completed by December 2018. We also
continue to strengthen our international
supplier quality audit processes, including
consideration of international audit
partners to help perform offshore
inspections.
In August last year, Steel & Tube pleaded
guilty to Commerce Commission charges
relating to the historical inadvertent use
of a testing laboratories logo and the
application of testing methodologies in the
applicable standard. These charges do not
relate to the performance characteristics
of the mesh which we continue to
stand behind, and we have had external
accredited laboratories testing the seismic
mesh since April 2016.
We take quality and compliance seriously
and have taken significant steps to enhance
our quality and product assurance systems.
Steel & Tube is a proud and long-standing
New Zealand company with significant
opportunities. We remain focused on
creating a platform for the future, and
delivering great value and service for our
customers.
Mark Malpass
Chief Executive Officer
Business
Performance
Stainless: Performing well, combined
with benefits from integrating heritage
Tata business with S&T heritage Stainless;
secured several major projects with unique
branded/specified products
Fastenings: Performance continues to
strengthen, combined with benefits from
integrating MSL business with S&T heritage
Fasteners; several new product offerings
being launched
Traditional distribution: Volumes were
softer, however customer focussed supply
chain improvements are well underway to
assist growth in second half
Chain & Rigging: Continued strong
performance and investments in capacity
to drive growth
Rollforming: Volumes down due to
system process changes, focus now on
customer service
CFDL/Comflor: CFDL celebrated one year
as part of the Steel & Tube group and is
performing well with a healthy order book
in excess of $20m
S&T Plastics: Completion of Downers
CPW2 project in February 2018. Focus
on successfully bidding for further large
projects
Reinforcing: Contract pricing remains
unsustainably low, with contractors
looking to push low margins down the
supply chain to sub-contractors such as
Steel & Tube
09

10
STEEL2&2TUBE HALF YEAR REPORT 2018
For the six months to 31 December 2017
(HY18), Steel & Tube reported a short term
decrease in operating earnings as expected,
as a change programme is undertaken to
drive long term sustainable improvements
in the Company’s performance and
earnings.
Steel & Tube’s operating earnings are
consistent with the guidance provided to
the market at the Annual Shareholder
Meeting in November 2017. Operating
earnings (EBIT) for the six months was $6.7m
(HY17: $16.1m). Revenue was up 5% on the
prior comparative half year to $267.9m,
reflecting the benefit of additional revenue
from the acquisition of Composite Floor
Decks Limited (CFDL) in 2016 and improved
performance by S&T Plastics, partially offset
by lower volumes and margin pressures in
core distribution and reinforcing businesses.
The half year result includes significant
non-trading costs relating to a working
capital review and restructuring activities,
as previously advised.
Including these non-trading costs,
Steel & Tube reported a Net Profit After Tax
(NPAT) of $3.8m (HY16: $10.6m). Whilst
impairments and restructuring costs are
having an unavoidable impact on short term
EBIT, improved earnings from the change
programme are expected to flow into
FY19 and FY20.
Over half of the year on year decrease is
related to a $5.5m write down of aged
inventory to net realisable value following a
substantial review of inventory holdings;
with an additional $2.6m in expenses
Half Year Financial Performance
relating to the impact of organisational
changes completed in the period ended
31 December 2017. These costs were partially
offset by an additional four months of
earnings (compared to the prior first half
year), totalling $1.9m, from the acquisition
of CFDL in 2016.
Excluding these major items, normalised
EBIT was $12.9m, compared to $15.6m in
the previous year.
HY18 earnings also include the impact of
increased depreciation and amortisation
costs of $1.1m through the recent capital
investment programme and acquisitions.
The board is focussed on optimising the
balance sheet to ensure that Steel & Tube
is well placed to profitably grow and
confirms that the company is on track to
meet its capital structure targets, on a
normalised basis.
Excluding the provision for write-down,
inventories have reduced by approximately
$9.6m since June 2017 and further
reductions are targeted.
Net debt has been reduced by 25% to
$95.5m, mainly due to the divestment of the
Stonedon Drive property and an ongoing
focus on improving the Group’s working
capital position.
Consistent with its dividend policy of a
payout ratio of between 60% and 80% of
net earnings adjusted for any material non-
ordinary items and subject to relevant
factors at the time, the Board declared an
interim dividend of 7 cents per share to be
paid on 29 March 2018.

The accompanying notes form part of these financial statements.
11
REVENUE
$
267.9m
EBIT*
$
6.7m
NORMALISED EBIT
$
1 2 .9m
GEARING RATIO
31
%
NPAT
$
3.8m
INTERIM DIVIDEND
7cps
* OPERATING EARNINGS
BEFORE OTHER GAINS AND
FINANCING COSTS
Highlights
11

Interim
Financial Statements
12
STEEL & TUBE HALF YEAR REPORT 2018

13
The accompanying notes form part of these financial statements.
INTERIM FINANCIAL STATEMENTS
13
Consolidated Interim Statement Of Profit Or Loss
And Other Comprehensive Income
FOR THE HALF YEAR ENDED 31 DECEMBER 2017
Unaudited
December
2017
Unaudited
December
2016
Notes$000$000
Sales revenue 267,852 254,470
Other operating income 894 1,640
Cost of sales(207,381)(189,927)
Selling expenses(21,223)(21,743)
Administration expenses(18,307)(14,137)
Other operating expenses(15,150)(14,244)
Operating earnings before other gains and financing costs6,685 16,059
Gain on property sale4 413 -
Interest income 6 48
Interest expense(1,831)(1,521)
Profit before tax5,273 14,586
Tax expense (1,507)(4,002)
Profit for the year attributable to owners of the parent3,766 10,584
Items that may subsequently be reclassified to profit or loss
Other comprehensive income / (loss) – hedging reserve1,175 713
Items that may not subsequently be reclassified to profit
or loss
Other comprehensive income / (loss) – deferred tax on
revaluation reserve
1,878 -
Total comprehensive income6,819 11,297
Basic earnings per share (cents)4.2 11.8
Diluted earnings per share (cents)4.2 11.8

14
STEEL2&2TUBE HALF YEAR REPORT 2018
The accompanying notes form part of these financial statements.
Consolidated Interim Statement Of Changes In Equity
FOR THE HALF YEAR ENDED 31 DECEMBER 2017
Share
capital
Retained
earnings
Hedging
reserve
Reval-
uation
Reserve
Treasury
shares
Share-
based
payments
Total
equity
$000$000$000$000$000$000$000
Balance at 1 July 2017 77,804 105,552 (1,193) 32,805 (3,431) 593 212,130
Comprehensive income
Profit after tax - 3,766 - - - - 3,766
Other comprehensive income
Hedging reserve (net of tax) - - 1,175 - - - 1,175
Deferred tax on asset sale
- - - 1,878 - - 1,878
Total comprehensive income - 3,766 1,175 1,878 - - 6,819
Transfer on sale of property - 21,689 - (21,689) - - -
Transactions with owners
Dividends paid - (6,331) - - - - (6,331)
Proceeds from partly paid shares 41 - - - - - 41
Options vested during the year - - - - - 235 235
Purchase of own shares
– net of transaction costs
- - - - - - -
Unaudited balance at
31 December 2017
77,845 124,676 (18)12,994 (3,431)828 212,894
Balance at 1 July 201677,756 105,657 (431) - (3,500)763 180,245
Comprehensive income
Profit after tax - 10,584 - - - - 10,584
Other comprehensive income
Hedging reserve (net of tax)
- - 713 - - - 713
Total comprehensive income - 10,584 713 - - - 11,297
Transactions with owners
Dividends paid - (12,088) - - - - (12,088)
Proceeds from partly paid shares 48 - - - - - 48
Options vested during the year - - - - - (78)(78)
Purchase of own shares
– net of transaction costs
- - - - (175) - (175)
Unaudited balance at
31 December 2016
77,804 104,153 282 - (3,675)685 179,249

15
The accompanying notes form part of these financial statements.
INTERIM FINANCIAL STATEMENTS
15
Consolidated Interim Balance Sheet
AS AT 31 DECEMBER 2017
UnauditedAudited
December 2017June 2017
Notes
$000$000
Current assets
Cash and cash equivalents1,147 6,517
Trade and other receivables88,834 93,489
Inventories2 127,891 143,064
Income tax receivable - 218
Derivative financial instruments
114 2
217,986 243,290
Non-current assets
Property, plant and equipment4 78,093 102,589
Intangibles3
67,837 66,848
145,930 169,437
Total assets3
363,916 412,727
Current liabilities
Trade and other payables47,259 54,361
Provisions2,977 3,534
Derivative financial instruments194 1,714
Income tax payable
797 -
51,227 59,609
Non-current liabilities
Trade and other payables2,201 2,212
Borrowings6 96,693 133,374
Deferred tax(4)4,157
Provisions long term
905 1,245
99,795 140,988
Equity
Share capital77,845 77,804
Retained earnings124,676 105,552
Other reserves
10,373 28,774
212,894 212,130
Total equity and liabilities
363,916 412,727
These consolidated interim financial statements and accompanying notes were authorised
by the Board on 22 February 2018.
For the Board



Susan Paterson Anne Urlwin
Chair Director

16
STEEL2&2TUBE HALF YEAR REPORT 2018
The accompanying notes form part of these financial statements.
Consolidated Interim Statement Of Cash Flows
FOR THE HALF YEAR ENDED 31 DECEMBER 2017
UnauditedUnaudited
December 2017December 2016
$000$000
Cash flows from operating activities
Customers receipts
272,794 268,566
Interest receipts
6 48
Payments to suppliers and employees
(250,100)(248,174)
Income tax payments
(3,120)(4,874)
Interest payments
(1,831)(1,521)
Net cash inflow from operating activities
17,749 14,045
Cash flows from investing activities
Property, plant and equipment disposals
31,460 -
Payment for new business purchase (net of cash acquired)
- (12,911)
Property, plant and equipment and intangible asset purchases
(11,608)(8,086)
Net cash inflow / (outflow) from investing activities
19,852 (20,997)
Cash flows from financing activities
Share capital
41 48
Treasury shares - net of transaction costs
- (176)
Borrowings
(36,681)19,906
Dividends paid
(6,331)(12,088)
Net cash (outflow) / inflow from financing activities
(42,971)7,690
Net (decrease) / increase in cash and cash equivalents
(5,370)738
Cash and cash equivalents at beginning of the period
6,517 2,287
Cash and cash equivalents at end of the period
1,147 3,025
Represented by:
Cash and cash equivalents
1,147 3,025

17
The accompanying notes form part of these financial statements.
INTERIM FINANCIAL STATEMENTS
17
Notes To The Consolidated Interim Financial Statements
FOR THE HALF YEAR ENDED 31 DECEMBER 2017
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
Steel & Tube Holdings Limited (the Company) is registered under the Companies Act 1993 and is a
FMC Reporting Entity under the Financial Markets Conduct Act 2013. The Company is a limited liability
company incorporated and domiciled in New Zealand. The Group comprises Steel & Tube Holdings
Limited and its subsidiaries. The Group's principal activities relate to the distribution, processing and
fabrication of steel, plastic and related products.
The registered office of the Company is at Level 7, 25 Victoria Street, Petone, Lower Hutt 5012,
New Zealand.
These interim financial statements have been reviewed, not audited, and were approved for issue on
22 February 2018.
Basis of preparation
The Group is a for-profit entity. Its unaudited condensed consolidated interim financial statements have
been prepared in accordance with, and comply with, New Zealand Generally Accepted Accounting
Practice (NZ GAAP). They comply with New Zealand's Equivalent to International Financial Reporting
Standard NZ IAS 34: Interim Financial Reporting and International Accounting Standard IAS 34: Interim
Financial Reporting.
These financial statements do not include all the information required for full financial statements,
and consequently should be read in conjunction with the full financial statements of the Group for the
year ended 30 June 2017, which have been prepared in accordance with New Zealand Equivalents to
International Financial Reporting Standards and with International Financial Reporting Standards.
These interim financial statements have been prepared using the same accounting policies and methods
of computation as the financial statements for the year ended 30 June 2017.
These financial statements are presented in New Zealand dollars and rounded to the nearest thousand.
Prior Year Comparatives
Following the implementation of a new information technology system during the period, certain
comparative information has been reclassified to align with current year presentation. The most
significant change being approximately $1 million of subsidiary expenses classified as administration
expenses in the prior year which have been reclassified to selling expenses. There have been no other
material changes to the presentation of financial information.
DISCLOSURES
2. INVENTORIES
In accordance with the Group’s policy it has reviewed its inventory holdings and identified some slow
moving and aged inventory whose net realisable value is estimated to be less than carrying value. The
assessment considered the likely sales channels and market pricing for disposal of the inventory. The
Group has recognised within cost of sales an impairment of $5.5 million to measure this inventory at its
estimated net realisable value in the six months ended 31 December 2017 (31 December 2016: $ nil). The
assessment requires management to exercise judgement as to the method of disposal.

18
STEEL2&2TUBE HALF YEAR REPORT 2018
The accompanying notes form part of these financial statements.
3. IMPAIRMENT TESTING AND INTANGIBLES
Impairment
Included in Intangibles is $47.2m of Goodwill. NZIAS 36 requires Management to regularly assess for
any indicators of impairment and at least annually test the recoverable amount of goodwill against its
carrying value. As at 31 December 2017 management identified an indicator of impairment and therefore,
as part of preparing these interim financial statements, Management undertook an internal valuation to
assess the carrying value of the Group’s assets including goodwill. Based on the calculations completed,
there is no impairment as at 31 December 2017.
For the purpose of assessing impairment of goodwill, assets are grouped at the lowest levels for
which there are separately identifiable cash generating units (CGU level). As at 31 December 2017 the
recoverable amount of the Group’s CGU’s exceeded their carrying values and there is no impairment of
Goodwill. The forecast cash flows used to assess for impairment were based on the latest Group forecast
as approved by the Board.
Intangibles
Included in Intangibles is a software implementation asset of $17 million. This asset commenced
amortisation in the period following go-live in October 2017.
4. NON-CURRENT ASSETS: PROPERTY, PLANT AND EQUIPMENT
During the period the Group sold its property at Stonedon Drive, Auckland. The property was sold for
$32.5 million. The Group recognised a gain on sale of $0.4 million within other income in the Statement of
Profit or Loss and Other Comprehensive Income. The gain on sale is after the recognition of a make good
cost provision of $1.1 million.
5. OPERATING SEGMENTS
Following a change to the operating structure of the Group during the reporting period, the reportable
operating segments have been revised to align with the new structure. Previously the Group had one
reportable segment. The Group has realigned its operating structure whereby there are now two clear
Operating Divisions with General Managers responsible for each. The Group’s internal financial reporting
has changed to align with this new structure. The CEO, assessed to be the Group’s Chief Operating
Decision Maker (CODM), now receives separate financial reports for the two Operating Divisions. As
a result it has been determined that the Group has two reportable segments being the Distribution
and Infrastructure Divisions. The Group has made the decision that the seven operating segments that
form part of the reporting to the CEO can be aggregated in to the two reporting segments. Reportable
segments have been determined by having regard to the nature of products, services and processes the
various business units undertake to service customers. The Group has a diverse range of customers from
various industries, with no single customer contributing more than 10% of the Group's revenue. Within
each segment there are same customers and similar sales channels.
The Group derives its revenue from the distribution, processing and fabrication of steel, plastics and
allied products. Within the Distribution business the majority of product is traded and sales staff are
tasked to know the full range of products. Within the Infrastructure business product is predominantly
steel product which is bought and processed/manufactured in warehouse facilities for project/contract
customers.

19
The accompanying notes form part of these financial statements.
INTERIM FINANCIAL STATEMENTS
19
The CEO uses EBIT as a measure to assess the performance of segments. The segment information
provided to the CEO for the half year ended 31 December 2017 is as follows:
DistributionInfrastructure
Other/
Elimination
Reconciled
to Group
December 2017$000$000$000 $000
Revenue from external customers155,852 112,000 -267,852
Intersegment revenue3,567 11,875 (15,442)-
Segment EBIT Before Adjustment *5,827 10,683 (1,702)14,808
One off adjustment *(3,736)(1,782)(2,605)(8,123)
Adjusted Segment EBIT *2,091 8,901 (4,307)6,685
Gain on property sale413
Interest (net)(1,825)
Reconciled to Group Profit Before Tax5,273
Total assets172,085 134,504 57,328 363,917
Total liabilities18,536 33,270 100,398 152,204
* The results for the half year include a non-trading adjustment for impairment of inventory
and restructuring and reorganisation costs.
DistributionInfrastructure
Other/
Elimination
Reconciled
to Group
December 2016$000$000$000$000
Revenue from external customers156,997 97,473 -254,470
Intersegment revenue3,527 11,741 (15,268)-
Segment EBIT8,986 10,085 (3,012)16,059
Interest (net)(1,473)
Reconciled to Group Profit Before Tax14,586
Total assets180,179 105,719 58,224 344,122
Total liabilities57,985 38,264 68,624 164,873
Interest income and expense are not allocated to segments, as this type of activity is driven by the central
treasury function, which manages the cash position of the Group.
Sales between segments are eliminated on consolidation. The amounts provided to the CODM with
respect to segment revenue and segment assets are measured in a manner consistent with that of the
financial statements. Segment assets are allocated based on the operations of the segment and the
physical location of the asset.

20
STEEL2&2TUBE HALF YEAR REPORT 2018
The accompanying notes form part of these financial statements.
Following the change in operating structure it is the intent of Management to record certain supplier
transactions in applicable operating segments and in the information presented to the CEO. Due to the
close proximity of balance date following the change to segment reporting this change has yet to be
implemented. However Management believe allocation provides more relevant information to the users
of the financial statements and as such have allocated these transactions into their respective segments
for the period ended 31 December 2017. The Group intends to align its internal reporting provided to the
CODM with this change going forward.
6. BORROWINGS
The Group has committed bank borrowing facilities, of which $78.5 million has an expiry date of October
2021, and $78.5 million has an expiry date of October 2019. During the period the Group had a temporary
extended facility in place which has been repaid and cancelled as at 31 December 2017.
7. RELATED PARTIES
The Company has related party relationships with its subsidiaries and with key management personnel.
During the year there have been significant changes to key management personnel at Board and
Executive Management level.
Included in the half year results is $1.5 million of contractual payments made to departing management
personnel.
There have been no other material changes in the nature or amount of related party transactions for
the Group since 30 June 2017.
8. LITIGATION
In December 2016 the Commerce Commission announced that it had completed its investigation in
relation to several companies, and that it intended to prosecute three companies under the Fair Trading
Act, including Steel & Tube. The Commission's prosecution of Steel & Tube relates to the inadvertent use
of a testing laboratories logo on test certificates, and application of testing methodologies. Following a
Group wide review, quality resources have been strengthened and quality management processes have
been and continue to be enhanced.
In August 2017 Steel & Tube pleaded guilty to those charges. A sentencing date has been set for
March 2018.
A provision for fines, penalties and costs in relation to this prosecution and their full recovery under
the Group's insurance policies has been provided for in the Group's financial statements.
9. SUBSEQUENT EVENTS
On 22 February 2018 the Board declared a fully-imputed dividend of 7 cents per share ($6.34 million)
and a supplementary dividend to non-resident shareholders of 1.23 cents per share. The dividends will
be paid to shareholders on 29 March 2018.

21
The accompanying notes form part of these financial statements.
INTERIM FINANCIAL STATEMENTS
21
NON-GAAP FINANCIAL INFORMATION
Steel & Tube uses several non-GAAP measures when discussing financial performance. These include
Earnings Before Interest and Tax (EBIT), normalised EBIT and working capital. Management believes that
these measures provide useful information on the underlying performance of Steel & Tube’s business.
Non-GAAP financial measures should not be viewed in isolation nor considered as a substitute for measures
reported in accordance with NZ IFRS. Reconciliations of the non-GAAP measures to GAAP measures is
shown below.
Reconciliation of GAAP to Non GAAP Measures
UnauditedUnaudited
December 2017December 2016
$000$000
GAAP: Operating earnings before other gains
and financing costs (EBIT)
6,68516,059
Add/(Deduct) back unusual transactions:

Inventory write-down
5,518-
Reorganisation and restructuring costs
2,605-
Segment EBIT Before Adjustment (as per note 5)
14,80816,059
Additional acquisition earnings - CFDL
(1,867)-
One-off payment by subsidiary vendor
-(442)
Normalised EBIT
12,94115,617
Definitions:
• EBIT: This means operating earnings before interest and tax and is calculated as profit for the period
before other non-operating gains/losses, net finance costs and tax.
• Normalised EBIT: This means EBIT after normalisation adjustments.
• Working Capital: This means the net position after current liabilities are deducted from current assets.
The major individual components of working capital for the Group are Inventories, Trade and other
receivables and Trade and other payables. How the Group manages these has an impact on operating
cashflow and borrowings.
• Normalisation adjustments: These are transactions that are unusual by size or nature in a particular
accounting period. Excluding these transactions can assist users in forming a view of the underlying
performance of the Group. Unusual transactions can be as a result of specific events or circumstances or
major acquisitions, disposals or divestments that are not expected to occur frequently.

22
STEEL2&2TUBE HALF YEAR REPORT 2018


PricewaterhouseCoopers, 113 – 119 The Terrace, PO Box 243, Wellington 6140, New Zealand
T: +64 4 462 7000, F: +64 4 462 7001, pwc.co.nz
Independent review report
To the shareholders of Steel & Tube Holdings Limited

Report on the Consolidated Interim Financial Statements
We have reviewed the accompanying consolidated interim financial statements of Steel & Tube
Holdings Limited (“the Company”) and the entities it controlled, together the Group, on pages 13 to 21,
which comprise the consolidated interim balance sheet as at 31 December 2017, and the consolidated
interim statement of profit or loss and other comprehensive income, the consolidated interim
statement of changes in equity and the consolidated interim statement of cash flows for the six month
period ended on that date, and selected explanatory notes.

Directors’ Responsibility for the Consolidated Interim Financial Statements
The Directors are responsible on behalf of the Company for the preparation and presentation of these
interim financial statements in accordance with International Accounting Standard 34 Interim
Financial Reporting (IAS 34) and New Zealand Equivalent to International Accounting Standard 34
Interim Financial Reporting (NZ IAS 34) and for such internal controls as the Directors determine are
necessary to enable the preparation of the consolidated interim financial statements that are free from
material misstatement, whether due to fraud or error.

Our responsibility
Our responsibility is to express a conclusion on the accompanying consolidated interim financial
statements based on our review. We conducted our review in accordance with the New Zealand
Standard on Review Engagements 2410 Review of Financial Statements Performed by the
Independent Auditor of the Entity (NZ SRE 2410). NZ SRE 2410 requires us to conclude whether
anything has come to our attention that causes us to believe that the consolidated interim financial
statements, taken as a whole, are not prepared in all material respects, in accordance with IAS 34 and
NZ IAS 34. As the auditors of the Company, NZ SRE 2410 requires that we comply with the ethical
requirements relevant to the audit of the annual financial statements.
A review of consolidated interim financial statements in accordance with NZ SRE 2410 is a limited
assurance engagement. The auditor performs procedures, primarily consisting of making enquiries,
primarily of persons responsible for financial and accounting matters, and applying analytical and
other review procedures. The procedures performed in a review are substantially less than those
performed in an audit conducted in accordance with International Standards on Auditing (New
Zealand). Accordingly, we do not express an audit opinion on these consolidated interim financial
statements.
We are independent of the Group. Our firm carries out other services for the Group in the areas of tax
compliance, tax advice and other assurance services. The provision of these other services has not
impaired our independence.

23
INTERIM FINANCIAL STATEMENTS
23




Conclusion
Based on our review, nothing has come to our attention that causes us to believe that these
consolidated interim financial statements of the Group are not prepared, in all material respects, in
accordance with IAS 34 and NZ IAS 34.

Who we report to
This report is made solely to the Company’s shareholders, as a body. Our review work has been
undertaken so that we might state to the Company’s shareholders those matters which we are required
to state to them in our review report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the shareholders, as a body, for our
review procedures, for this report, or for the conclusion we have formed.

For and on behalf of:

Chartered Accountants Wellington
22 February 2018

24
STEEL2&2TUBE HALF YEAR REPORT 2018
REGISTERED OFFICE
Level 7, 25 Victoria Street, Petone,
Lower Hutt 5012, New Zealand
PO Box 30543, Lower Hutt 5040, New Zealand
Ph: +64 4 570 5000 Fax: +64 4 569 2453
Email: info@steelandtube.co.nz
Website: www.steelandtube.co.nz
SHARE REGISTRY
Computershare Investor Services Limited
Private Bag 92119, Auckland 1142, New Zealand
Ph: +64 9 488 8777 Fax: +64 9 488 8787
Email: enquiry@computershare.co.nz
Website: www.computershare.co.nz
AUDITORS
PricewaterhouseCoopers

25
The accompanying notes form part of these financial statements.
INTERIM FINANCIAL STATEMENTS
25

---

APPENDIX 7 - NZSX Listing Rules
Notice of event affecting securities
Number of pages including this one
NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10.(Please provide any other relevant
For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required. details on additional pages)
Full name
of Issuer
Name of officer authorised to
Authority for event,
make this notice
e.g. Directors' resolution
Contact phone
Contact fax
numbernumberDate
Nature of event
BonusIf ticked,
Rights Issue
Tick as appropriate
Issue
state whether:Taxable
/ Non TaxableConversionInterestRenouncable
Rights IssueCapitalCallDividend
If ticked, stateFull
non-renouncable
change
X
whether:
Interim
X
YearSpecialDRP Applies
EXISTING securities affected by this
If more than one security is affected by the event, use a separate form.
Description of theISIN
class of securities
If unknown, contact NZX
Details of securities issued pursuant to this eventIf more than one class of security is to be issued, use a separate form for each class.
Description of theISIN
class of securities
If unknown, contact NZX
Number of Securities toMinimum
Ratio, e.g
be issued following eventEntitlement
1 for 2 for
Conversion, Maturity, Call
Treatment of Fractions
Payable or Exercise Date
Enter N/A if not applicable
Tick if
provide an
pari passu
ORexplanation
Strike price per security for any issue in lieu or date
of the
Strike Price available.
ranking
Monies Associated with Event
Dividend payable, Call payable, Exercise price, Conversion price, Redemption price, Application money.
Source of
Amount per security
Payment
Excluded income per security
(only applicable to listed PIEs)
SupplementaryAmount per security
Currencydividendin dollars and cents
details -
Listing Rule 7.12.7
Total monies
TaxationAmount per Security in Dollars and cents to six decimal places
In the case of a taxable bonusResident
Credits
issue state strike priceWithholding Tax(Give details)
Foreign
FWP Credits
Withholding Tax(Give details)
Timing
(Refer Appendix 8 in the NZSX Listing Rules)
Record Date 5pmApplication Date
For calculation of entitlements -Also, Call Payable, Dividend /
Interest Payable, Exercise Date,
Conversion Date. In the case
of applications this must be the
last business day of the week.
Notice DateAllotment Date
Entitlement letters, call notices,For the issue of new securities.
conversion notices mailedMust be within 5 business days
of application closing date.
OFFICE USE ONLY
Ex Date:
Commence Quoting Rights:Security Code:
Cease Quoting Rights 5pm:
Commence Quoting New Securities:Security Code:
Cease Quoting Old Security 5pm:
$$0.004861$0.027222
$
15032018
NZ Dollars$0.012353
$6,342,561.82
Date Payable
29032018
In dollars and cents
90,608,026ordinary shares
7.0cents per share
Ordinary SharesNZSUTE0001S5
EMAIL: announce@nzx.com
1
STEEL & TUBE HOLDINGS LIMITED
G SmithDirectors' Resolution
(04) 570-5000(04) 570-245322022018