Steel & Tube Shareholder Newsletter

Interim Results Announced
By end-February 2019
Half Year End
31 December 2018
FROM THE CHAIR
Dear Shareholder
As we close in on the end of 2018 and what
has been a challenging year, it provides an
opportunity to look back at our progress.
We are very conscious that some of the
decisions we have had to make this year have
been disappointing, not just for us, but also
for our shareholders. As we said at our Annual
Meeting, the impact of historical issues
turned out to be greater than we anticipated.
However, the work that management
has been doing this year is now starting
to show results. We have a more efficient
organisational structure, a stronger financial
platform, an experienced leadership team
and an engaged workforce.
An enormous amount of work has gone
into business transformation initiatives and I
would like to acknowledge all the people at
Steel & Tube for their exceptional efforts and
for continually delivering their best. Their
hard work is the reason for the positive turn-
around we are now seeing in our company.
The steel mesh case is ongoing. Steel &
Tube was one of a number of companies
investigated by the Commerce Commission
under the Fair Trading Act (we note
the prosecution did not relate to the
performance of steel mesh). While Steel &
Tube pleaded guilty in August 2017, we are
appealing the level of the recent fine which
we believe is excessive. The Commerce
Commission is also appealing the fine. We
hope to have this resolved as quickly as
possible.
We are now looking to the future and we are
confident we are on the right path to achieve
our goal of being New Zealand’s leading
provider of steel products and solutions.
I would like to thank our shareholders
who have continued to support us
this year. Our focus remains firmly on
delivering value for you.
Susan Paterson, Chair
Shareholder Update
STORIES OF STRENGTH
UPCOMING KEY DATES
DECEMBER 2018

EXECUTIVE UPDATE
It has been just over a year since I took
up the role as CEO with Steel & Tube.
When I first started, I went on a nationwide tour of our business,
to visit all our sites and meet as many of our people as possible.
I was struck by the passion and loyalty our staff have for our
business – in fact, in our staff engagement survey, 76% of the
participants said they would go the extra mile to support the
business. I doubt there’s many businesses in New Zealand that
have that same sort of commitment from their people.
We are now starting to see momentum building across our two
divisions – Distribution and Infrastructure – as the benefits of
Project Strive initiatives start to be seen.
Launched as part of our Striving for Excellence strategy, Project
Strive encourages all people within our business to identify areas
for improvement. The results of this have been positive and we
recently recognised the best of our people and initiatives at our
inaugural Steel & Tube Excellence Awards.
Daily volume and sales trends continue to trend upwards and
we are regaining market share. Once again, our customers are
recognising the quality of the products and services we offer,
and benefiting from our broad product range and innovative
approach to meeting our customers’ needs.
As part of our first Strive pillar, Commitment to Safety and
Quality, we’ve invested significantly in people, ISO systems and
processes, and steel mill testing and audits by Lloyd’s Register.
The integrity of the products we sell is absolutely critical,
particularly those used in construction.
We have a more efficient and streamlined organisation and an
improved supply chain – technology is playing a big part in this.
The new ERP information technology system is now performing
well and, as well as providing us with a platform to deliver better
customer service, it has enabled a new sales and operations
planning process to help us progress towards our goal of supply
chain excellence.
We’ve been pleased to introduce two new members to our
Leadership team in recent weeks. Anna Morris has been
appointed General Manager People & Culture and will start in
the new year. She is an experienced HR executive and will further
develop and support a culture and environment that inspires and
rewards our people.
In addition, we have also appointed Claire Radley to the new
role of General Manager Strategy. With a PhD from Princeton
University, Claire has most recently been working with McKinsey
& Company, where she has been involved in a number of
business transformation programmes.
Demand for steel in New Zealand remains high and Steel & Tube
is well positioned to meet this demand. The first half of the year
is heading on the right track and we expect a stronger second
half as the benefits of Project Strive initiatives come into play.
The summer break is just around the corner. On behalf of all
of us here at Steel & Tube, we wish you a safe and happy festive
season. Thank you for your ongoing support and our best wishes
for 2019.
Mark Malpass,
Chief Executive Officer
STEEL & TUBE ACHIEVES
ISO 9001:2015 CERTIFICATION
Steel & Tube recently received
its ISO 9001:2015 quality
management certification.
This is an internationally
recognised standard on
which Quality Management
Systems (QMS) are built.
It is designed to help
organisations ensure they
meet the needs of customers
and other stakeholders
while meeting legal
and regulatory requirements.
Certification is done by independent experts in quality
management systems. It requires monitoring and continual
improvement of quality practices across all Steel & Tube’s
operations.
Because of the nature and importance of the products sold
by Steel & Tube, outstanding quality products and practices
are essential. Having quality practices delivers improved
processes, better efficiency, cost savings, increased profit
and increased customer satisfaction. It is a key part of Steel
& Tube’s strategic pillar Commitment to Safety & Quality.
Damian Miller, General Manager Quality, Health, Safety,
Environment and Training: “Having ISO 9001:2015
certification demonstrates to customers our unwavering
commitment to quality. Certification adds real value for us
and our customers and is something we are all proud of.”

SALES GROWING AT NEW-LOOK BRANCH
MSL began in Grey Lynn in 1980
and is one of the largest fastenings
companies in New Zealand. Its iconic
Fortress brand was introduced in 1997
and has become a market leader. The
business was acquired by Steel & Tube
in 2015, positioning Steel & Tube as
New Zealand’s pre-eminent fastenings
company.
Four months ago, the MSL North Shore
branch was revitalised, with a new
Trade Shop and renovated building,
all strongly branded with the Fortress
logo. Since that time, sales have grown
substantially.
Simon Ball, Customer Service Officer
at MSL , said: “We pride ourselves on
great service and our shop makes
a wide range of products readily
and conveniently available for our
customers. Stock levels and the range
of available items has greatly increased,
and we have regular shop specials on
items such as screws, tools, socket sets,
drills and adhesives.”
This new look branch and the
professionalism of the sales team
represents Steel & Tube’s dedication to
Putting the Customer at the Heart of
Our Business.
In line with Steel & Tube’s focus on
optimising the national network, and
with additional space available, the next
12 months will also see the relocation
of the steel distribution business from
across the road, consolidating Steel &
Tube’s local operations onto the one
site in Albany.
In addition, a large but under-utilised
branch in Timaru has been transformed
into a new-look trade store. While
still located in town and serving local
customers with a core range of stock
items, additional items are now ordered
and delivered from the distribution hub
in Christchurch.
DISTRIBUTION
Products are sourced from preferred steel mills and distributed ‘as-is’ through our national network of branches to customers. Businesses
and product lines include piping systems, chain & rigging, rural products, fastenings and stainless and engineering steels.
Tariq Koya, from ITM Hillside: “Fortress Albany’s new building
is a great experience to visit and a huge step up from their last
premises. The brand new trade shop has the appearance and
professionalism of a retail store offering an impressive range of
engineering tools, abrasives, sealants and, of course, fasteners.
The staff are well educated on a wide variety of fixing applications
and they offer great service with same day delivery.”

WHITTAKER’S CHOCOLATE OPENS FIRST EVER
STORE...WITH A LITTLE HELP FROM STEEL & TUBE
Building on Steel & Tube Stainless’ recent
success of supplying material for the
refurbishment of the Aotea Centre, the
business is proud to have supplied material
for another New Zealand icon – the first
Whittaker’s chocolate store at Auckland
International Airport.
The store allows the chocolate brand to
engage with their chocolate lovers as they
depart the country. It needed to be high
impact, engaging and reflect the brand’s
values. Steel & Tube worked with the designer
and architect for the store front, to select
the best Rimex product for the main counter
and gondolas. As you can see it creates an
impressive look!
Photo supplied
STEEL & TUBE STAINLESS MOO-VING ON UP
Longveld is a New Zealand business, providing
stainless steel fabrication and site installation
services to the dairy sector in Australasia.
While Steel & Tube has been working with
Longveld for many years, a new partnership
approach has led to successful collaboration
on several large projects in recent months.
The first was the $125m build of Synlait’s liquid
milk plant in Dunsandel in the South Island,
which will which will give the company the
foundation on which to enter the liquid milk
and cream market. Longveld was responsible
for providing 39 new tanks, with Steel & Tube
Stainless suppling over 30 tonnes of coil and
10 tonnes of plate, as well as hygienic tube and
fittings, an essential in the food supply chain.
The second project is the $250m development
of Synlait Milk’s Pokeno Diary Plant, with an
even greater supply from Steel & Tube Stainless
of 30 tonnes of coil and 16 tonnes of plate,
making it one of a number of large projects for
the business this year.
Steel & Tube Stainless also partners with
Longveld for the Fonterra truck contract,
which involves new builds and refurbishment
of Fonterra’s milk road tankers. This year alone,
Longveld has worked on 93 tankers, with Steel &
Tube providing more than 40 tonnes of cut-to-
length stainless steel sheets.

Marc Hainen joined Steel & Tube in November
2017, as General Manager Distribution. He
is responsible for the performance of Steel
& Tube’s Distribution business around the
country, which includes the traditional (carbon
focussed and Chain & Rigging) businesses,
Stainless and MSL Fortress/Fasteners.
With 30 branches around the country and more
than 500 people, the Distribution division sells
hundreds and thousands of steel products every
year. Providing great customer service and
creating value has been a priority for Marc in the
last year, and improving efficiencies across the
supply and logistics chain has been a key focus.
Marc has primarily worked in the building
industries sector for most of his career, including
GM roles at Fletchers – Steel Distribution and for
Tradelink in Australia. In both cases, he led major
turn arounds in business performance.
He says customer interaction and helping
provide solutions to New Zealand businesses is
the best part of his job...along with developing
people in the business and seeing them reach
their potential.
For next year, Marc’s focus is on continuing
the turn-around trajectory for Steel & Tube
Distribution and maximising business profits
while ensuring happy, satisfied customers.
Before then though, he’s got the summer break
in mind, which will involve family time with his
three children.
INTRODUCING:
MARC HAINEN: GENERAL MANAGER DISTRIBUTION
STEEL & TUBE ADDS ABRASIVES TO ITS
EXTENSIVE PRODUCT RANGE
Steel & Tube has recently partnered with
one of the most reputable abrasive brands
on the market globally to bring the Lukas
range of grinding, cutting and sanding
products to New Zealand workshops.
Based in Germany, Lukas’s motto of "Always the right
tool" is a promise that the international owner-managed
company has been adhering to every single day for over
80 years. Their focus is on quality, with the tools made in
Germany from top quality raw material and tested in state
of the art facilities.
Available through both MSL Fortress and Steel &
Tube Distribution sites around the country, this new
partnership extends Steel & Tube’s extensive product
offer even further.

INNOVATIVE USE OF ROOFING POPPING UP AROUND THE COUNTRY
The Steel & Tube roofing team are experts in the innovative use of
metal cladding and roofing. In the past few months, they have been
involved in a number of large building projects, from the roofing and
cladding of the new Hastings Hospital Endoscopy Unit through to
the new NZL Warehouse in Tauranga, the biggest project undertaken
by the local Steel & Tube Roofing branch this year. An increased
focus on commercial business in Auckland has also seen the number
of large cladding and roofing projects double in recent months.
INFRASTRUCTURE
Products are processed by Steel & Tube before sale and typically are sold on a contract or project basis, including onsite installation services.
Businesses and product lines include reinforcing and wire, coil processing including roofing and purlins, Comflor and Composite Floor Decks Limited.
Roofing and cladding supplied by Steel & Tube Roofing on the new Hastings Hospital Endoscopy Unit. Steel & Tube Roofing Auckland has recently completed a number of large commercial projects in Highbrook,
including the cladding and roofing of this Plytech building.

INVESTMENT IN TECHNOLOGY
DRIVING MANUFACTURING
EFFICIENCY
Steel & Tube Roofing in Auckland has recently installed a new
Slitting machine. Using the latest technology, this inputs the
specifications for multiple jobs and then maps them out on steel
sheets to optimise cutting efficiencies, much like a fabric pattern
cutter. The cut sheets are barcoded, which allows job details to
be scanned and uploaded to the folder, the next step in creating
perfectly made to measure flashings for roofing jobs. To ensure the
safety of workers, the folder is guarded by a ‘laser curtain’ which
creates an automatic machine stop if the laser barrier is broken.
STEEL & TUBE STAFF PULL OUT ALL STOPS TO SUPPORT
AUCKLAND’S ARMISTICE DAY CENTENARY COMMEMORATIONS
The hundreds of white crosses lining the field in front of
Auckland War Memorial are a stark reminder of the New
Zealanders who died in the war.
To create the enduring display, each wooden cross requires
two rods to support and stake it at the correct height and
orientation. Steel & Tube was approached by the Auckland RSA
to manufacture the rods and was proud to play a small part in
creating the poignant installation, not just for the Armistice Day
centenary this year but also for the 100th anniversary of ANZAC
Day in 2016.
“Of course we said we would help them out”, says Steve Archer,
manager of Steel & Tube North Harbour.
However, the logistics of cutting, packing and transporting that
quantity of steel on a voluntary basis were challenging. The
team in Auckland put their heads together and set up a drop-
saw and cutting fixture on-site, and cut the rod themselves in
bundles of 50 at a time. It worked very well and, over the next
two months, Steve cut all 48,000 lengths of rod in his own time.
“It took a bit of lateral thinking in this case, but once we commit
to a job, we make sure it gets done”, says Steve.
1. Multiple jobs are entered into the workstation, which sets
the optimal cutting layouts. Steel coil is then fed through
the slitter and cut to measure.
2. Cut sheets are scanned and job details are uploaded to the
folder machine, which automatically resets to the folding
dimensions required.

PALMERSTON NORTH
WELLINGTON
BLENHEIM
DUNEDIN & INVERCARGILL
CHRISTCHURCH & TIMARU
TAURANGA & ROTORUA
NAPIER & GISBORNE
HAMILTON
NEW PLYMOUTH
NELSON
AUCKLAND & WHANGAREI
Steel & Tube offers New Zealand’s most comprehensive range of steel and allied products
through a nationwide product distribution and processing network, so no matter where
you are in the country we can deliver product to you. Our National Support Centre in
Wellington provides corporate, management and support functions.
40 LOCATIONS ACROSS NEW ZEALAND
>15,000 CUSTOMERS • ~1,000 STAFF
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DELIVERY ON
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AND TEAM CONTRIBUTIONS
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IMPROVEMENT
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