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Published: 2023-04-27 09:35:59 ET
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EX-99.1 2 d490701dex991.htm EX-99.1 EX-99.1

Exhibit 99.1 Global Eco-friendly Future Materials Provider Earnings Release Q1 2023 April 27, 2023


Disclaimer This presentation was prepared and circulated to release the informations regarding the company’s business performance to shareholders and investors prior to the completion of auditing for the period of the first 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 certain forward-looking statements relating 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 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 informations contained in this presentation.


Contents Consolidated Business Performance Major Business Activities Business Performance by Major Areas 2023 Business Outlook Appendix


Consolidated Business Performance Profits recovered both in domestic and overseas steel businesses, and showed growth in revenue of Green Materials by 44% QoQ QoQ Income Financial Structure QoQ +3.5%p 13.0% (KRW Billion) (KRW Trillion) 21,338 19,381 +133 9.5% 7.7% 19,248 Revenue Net Debt Ratio 7.7 +2.1 10.6% OP Margin 2,258 Operating Profit +5.8%p 5.6 3.6% Net Debt △2.2% 9,238 4.4 EBITDA 3.2 1.7 +1.2 705 +1,130 0.5 △425 ’22.1Q ’22.4Q ’23.1Q ’22.1Q ’22.4Q ’23.1Q *’23.1Q CAPEX: KRW 1.7 tril.(consolidated), 0.3 tril.(separated) 【Before Inter-company Transaction Adjustment】 Revenue Operating Profit (KRW Billion) ‘22.1Q ‘22.4Q ‘23.1Q ‘22.1Q ‘22.4Q ‘23.1Q QoQ QoQ Steel 18,423 15,112 15,770 +658 1,678 △718 338 +1,056 * POSCO 11,272 8,675 9,622 +947 1,199 △623 251 +874 Overseas Steel 5,952 5,487 5,268 △219 315 △166 19 +185 Green Infrastructure 16,489 14,885 13,870 △1,015 479 235 382 +147 ** POSCO International 10,744 9,117 8,307 △810 335 209 280 +71 ** POSCO E&C 2,112 2,571 2,364 △207 118 22 55 +33 714 808 1,162 +354 27 △7 10 Green Materials +17 ** 665 781 1,135 +354 26 4 20 POSCO Future M +16 *POSCO Parent result before the vertical spin-off included(1Q 2022), separated **POSCO Energy result included in POSCO International, consolidated


Major Business Activities_Progress in Secondary Battery Materials Material Company PJT ~ ‘22.E ‘23.1Q ‘23.2Q ‘23.2H ‘24 ‘25 Construction Construction Construction Construction Completion Phase I of Electricity of Electricity (Plant 1. ’22.10, of factory/pond (‘24.2Q.) of Brine (Plant 1. ’23.4) (Plant 2. ’23.5) Plant 2. ’22.12) (1Q) P- Argentina Phase II Construction Completion Approval - Detailed designing of of Brine (’23.6) (‘25.2Q.) (’22.10) Pond/Plant - (UP) Lithium Approval Incorporation Construction Completion Phase II P-Lithium (’22.10) (’22.12) (’23.6) (‘25.2Q.) Brine Solution (DOWN) Plant 2 Plant 1 Construction HQ/Sub Center Completion Completion P- (Plant 2. ’22.8, Plant 1 ’22.11) Completion (‘23.3) (’24.10) (’24.2.) Pilbara Lithum Plant 2 Plant 1 Lithium Ore Test run Test run Construction Construction Solution (‘23.10~) (’24.1~) (’23.1) (’23.4) Construction Completion Iron SNNC (’22.6) (4Q) removal Nickel Construction Construction Construction (Leaching Facility) (Extraction Facility) Completion POSCO Refining (’22.10) (‘23.6) (‘23.3) (4Q) Completion EPA(‘22.12) Normal operation(‘23.5) RAMP UP PLSC UP (’22.8) Recycling Operation start Initial Products out Completion(’22.12) Normal operation(‘23.11) - Product Certification - P-HYCM RAMP UP DOWN (‘23.2) (‘23.5) Construction P- Constuction Completion Approval of Electricity Next Silicon SiOx (‘23.6) (‘24.2Q) (‘23.1) Generation (‘23.4Q) Solution


Major Business Activities_POSCO Silicon Solution Approved the 450-ton first phase investment for POSCO Silicon Solution, and plan to expand production capacity up to 25k tons by 2030 through four phases of investment 【Market Trends】 Si-based anode material demand expected to rise with 【 Market Outlook 】 + increased electric vehicle driving range U$ Billion 2022 2025 2030 Expanded to major battery companies with four times higher Graphite x4 5.1 8.7 13.3 capacity than conventional natural·artificial graphite Anode Silicon 0.4 1.8 5.4 Anode Planning simultaneous investments in SiOx and Si-C * Source : SNE Research (‘22) for the Si electrode material project 【 Performance Comparison】 [Si-C] [SiOx] Natural Artificial Silicon Anode Graphite Graphite Acquired a domestic startup Teratechnos Construction underway Capacity 360 350 Approx. 1,400 (Jul. 2022) and launched P-Silicon Solution of a 50-ton capacity (mAh/g) ▶ Approved the first phase investment Efficiency 94% 92% 78%~ demo plant in Yeong-il Volumetric (Jan.26, CAPEX KRW 59 bil.) industrial complex Expansion 30% 20% 100%~ ▶ Plan four phases of investment by 2030 Rate Sales Price 5 ~ 6 8 ~ 9 40 ~ 60 (U$/kg) * Source : RIST (‘22) *Silica Oxide(SiOx) : A product that synthesizes silicon oxide on top of nano silico particles / Silicon-carbon composite(Si-C) : A product that coats graphite particles with nano silicon, and then coats them once again with carbon


Major Business Activities_POSCO Silicon Solution Built and verified the first phase of SiOx 450 tons/year, followed by a four-phase Expansion nd th (2 ~4 phase) st 1 phase, expansion plan up to 25k tons/year by 450 tons 2030 (M/S 16%) 27km 10km st 1 phase, Developing integrated Silicon Anode 50 tons Expansion Si-C material complex at Pohang Yeongil industrial complex 1,577 Capacity Revenue (Tons) (KRW Billion) 958 25,450 9,238 9,238 15,450 183 7 5,450 450 2024 2026 2028 2030 2024 2026 2028 2030 ※ Next-generation battery material business 2022.2 2022.5 2022.7 2024(f) 2027


Major Business Activities_Journey to Eco-friendly Steel Making 【 POSCO’s Carbon Neutral Roadmap 2050 】 Compared to the base year △10% (~’30) △50% (~’40) Carbon Neutralization (~’50) Target Improvement of Efficiency of Existing Gradual Equipment and Development of Expansion of Innovative Technology Equipment Conversion Innovative Techonology Strategy Hydrogen Reduction EAF Ironmaking(HyREX) BF·FINEX Facilities BF·FINEX 9, HyREX 1, EAF 1 BF 3, HyREX 6, EAF 3 HyREX 9, EAF 5 【 ’23.1Q Activities 】 Roy Hill Port Hedland (HBI Site) Perth *HBI(Hot Briquetted Iron) : A product made by shaping Direct Reduced Iron(DRI), which is produced by removing oxygen from iron ore into a compact form resembling a nugget


Business Performance by Major Areas Steel - POSCO · Production/Sales · Income/Financial Structure - Overseas Steel · PT-KP · PZSS · P-Maharashtra · PY-VINA Green Infrastructure - POSCO International - POSCO E&C Green Materials - POSCO Future M


POSCO_Production/Sales Production Sales QoQ Utilization Rate* 87.4% 78.5% 84.7% +6.2%p QoQ (k tons, %) 8,454 Sales Volume (k tons) 8,162 +615 8,770 +452 8,499 Crude Steel 7,547 58.7 Domestic Sales 54.7 8,047 +4.3%p Product 50.4 8,452 Ratio +726 8,304 30.2 7,578 WTP +1.5%p 28.3 Sales Ratio* 26.8 ’22.1Q ’22.4Q ’23.1Q ’22.1Q ’22.4Q ’23.1Q * Utilization rate : Crude Steel Production / Crude Steel Capacity * Non-prime and semi-product figures excluded in total sales volume ○ Production volume increased due to the normalization of ○ Sales increased due to the normalization of Pohang Works operations by complete recovery from the flood and normalized sales mix through decreased sales volume • Production volume increased and semi-finished product inventory of low-priced products such as slabs reduced due to the normalization of Pohang Works by Jan.20,2023 【Sales volume by quarter】 ※ Semi-finished product inventory(k tons) (k tons) ‘22.1Q ‘22.4Q ‘23.1Q QoQ : ’22.12/E) 2,045 → ’23.3/E) 1,677 (△368) CR/Coated 3,794 3,138 3,596 +458 Plate 1,307 971 1,220 +249 【Carbon Steel/STS Production Volume】 (k tons) HR 2,098 2,260 2,244△16 STS 495 186 360 +174 ’22.1Q ’22.4Q ’23.1Q QoQ Slab 95 741 125△616 Carbon Steel 7,427 7,912 +485 7,929 Products Sales Volume 8,454 7,547 8,162 +615 STS 151 392 +241 523 WTP 2,468 1,782 2,226 +444 * Jan., Feb. 2022 : POSCO Parent result before the vertical spin-off * Jan., Feb. 2022 : POSCO Parent result before the vertical spin-off ※ CR/Coated : BP, CG, CR, EG, FH, GO, GO, NO, PO, POSMAC, HGA, HGI


POSCO_Income/Financial Structure Income QoQ (KRW Billion) 【Operating Profit QoQ】 ASP (KRW Billion) decreased 11,272 +947 9,622 Revenue +140 251 8,675 +414 Cost +234 ’22.4Q decrease, etc. △311 OP Margin 10.6% ’23.1Q Losses from +9.8%p Raw material cost the flood 2.6% decrease, etc. +397 decrease Operating Profit +874 1,199 251 △623 △623 Production/Sales △7.2% volume increase ’22.1Q* ’22.4Q ’23.1Q • Raw Material Input Cost : Iron ore 86, Coking Coal 92 (’22.4Q average price = 100) * Jan., Feb. 2022 : POSCO Parent result before the vertical spin-off • Sales Price(carbon steel, KRW Thousand/ton) : ’22.4Q) 1,025 → ’23.1Q) 1,019(△6) (KRW Billion) ’22.1Q* ’22.4Q ’23.1Q QoQ - Sales price decrease and exchange rate impact : KRW △52,000/ton EBITDA 1,915△35 832 +867 - Improved sales mix through decreased sales of low-value added items such as slabs : KRW +46,000/ton ○ Profitability restored through normalized production and sales - Recovered in sales price after marking the lowest point in January after completing the recovery, and raw material price decreases • Business losees by the flood (KRW Billion) ○ Increased cash balance and debt through the issuance of ’22.4Q ’23.1Q QoQ corporate bonds (KRW 700 bil., USD 2 bil.) Recovery Cost 288 61 △228 (KRW Trillion) ’22.12/E ’23.3/E * Inventory Loss 0.5 △6 △6 Cash Balance 7.6 9.5 * Reversal of inventory loss amount included Debt 7.8 10.3


Overseas Steel Subsidiaries_Performance Improved in profitability of subsidiaries in the East and Southeast Asia due to gradual recovery of the global steel market conditions PT. Krakatau POSCO Zhangjiagang STS (PZSS) • Profitability worsened due to increasing supply of STS with high market Ÿ Improved profitability due to increased sales after the start of the new HR inventory levels generated from continued low-price competition despite line and expanded share of high-profit domestic sales - Sales Price(QoQ) : +1.5%, Raw Material Price(QoQ) : △3.2% delayed recovery in China - HR Sales Volume(k tons) : (‘22.4Q)127→(’23.1Q)430 - ‘23.1Q inventory valuation loss : U$ 17.1 million - Domestic Sales Share(%): (‘22.4Q)57→(’23.1Q)64 651 - ’23.1Q STS steel production in China 7.8 million tons(+0.3 YoY) 857 781 719 △62 508 498 Revenue Revenue +153 82 Operating Profit △45 53 Operating Profit 10 +83 △8 (USD million) △53 △31 (USD million) ’22.1Q ’22.4Q ’23.1Q QoQ ’22.1Q ’22.4Q ’23.1Q QoQ POSCO Maharashtra PY VINA • Improved OP due to increased sales and price driven by the economic • Expanded domestic sales and maximized sales prices by inducing recovery in India construction project orders from actual domestic customers despite - Sales Volume(k tons) : (‘22.4Q) 346 → (’23.1Q) 363 delayed recovery in constructin demand - Sales Price(QoQ) : +3.8% - Domestic Sales Volume(k tons) : ‘22.4Q) 47.4 → ‘23.1Q) 53.9 (+13.7%) 419 - Sales Price(QoQ) : +1.05% 1 335 +25 102 310 Revenue Revenue +2 76 74 5 Operating Profit Operating Profit 4 3 +2 54 +47 12 (USD million) (USD million) △35 ’22.1Q ’22.4Q ’23.1Q ’22.1Q ’22.4Q ’23.1Q QoQ QoQ


POSCO International_Performance Income Major Activities ○ Global Business (KRW Billion) 10,745 - Steel : Profitability improved as a result of an expansion QoQ 9,117 of sales in high-profit market such as Europe, while 8,306 Revenue △811 revenue dropped due to decrease in steel sales volume - Agriculture : Continued growth in soybean sales and expansion of profits from palm business 335 +70 • OP of trading(KRW Billion) : '22.4Q △8 → '23.1Q 9 280 Operating Profit 210 • OP of palm business(KRW Billion) : '22.4Q 17 → '23.1Q 24 +1.1%p 3.4% 3.1% 2.3% ○ Energy OP Margin - E&P : OP slightly decreased due to a decline in exchange rate ’22.1Q ‘22.4Q ‘23.1Q '22.4Q '23.1Q QoQ Myanmar gas sales(Bcf) 52.0 48.0 △4.0 Myanmar OP(KRW Billion) 77.5 67.1 △10.4 【Revenue by Business】 Senex Energy sales(Bcf) 5.7 6.4 +0.7 Senex OP(KRW Billion) 14.1 12.7 △1.4 (KRW Billion) ’22.1Q ’22.4Q ’23.1Q QoQ ※ Exchange rate: KRW/U$ 1,359 → 1,276 Global Business 9,556 7,536 7,020 △516 - Power Generation : Power plant operation rate improved (former Trading) due to increase in electricity demand during winter Energy 1,189 1,581 1,286 △295 • OP(KRW Billion) : ’22.4Q 32.6 → ’23.1Q 53.9


POSCO E&C_Performance Income Major Activities (KRW Billion) ○ [OP] Continued with profitability-focused business QoQ strategy, profitability improved due to construction sector 2,571 Revenue △207 2,364 turning a profit 2,112 • Plant : Revenue increased QoQ by speeding up the construction process, etc. while OP decreased due to the base effect of improved profit in the previous quarter(KRW △36 bil.) Operating Profit 118 +33 • Construction : OP improved QoQ through improved profitability 55 5.6% 22 and expense reduction despite sales decrease (KRW +71 bil.) 2.3% +1.4%p 0.9% OP Margin • Infrastructure : OP decreased mainly due to overseas projects affected by sales and exchange rate fluctuations(KRW △12 bil.) ’22.1Q ‘22.4Q ‘23.1Q ○ [Orders] Slightly decreased to KRW 2.7 tril. by 0.1 tril QoQ 【Revenue by Business】 • Plant(KRW 0.5 tril., +0.2 QoQ) : Secured stable captive business nd (KRW Billion) ’22.1Q ’22.4Q ’23.1Q * Yulchon) 2 phase of brine-based lithium(0.2), QoQ Kwangyang) EAF power equipments(0.1), etc. 562 813 851 Plant +38 • Construction(KRW 1.8 tril., △0.5 QoQ) : Increased proportion of Construction 1,019 1,057 1,042 △15 city housing projects(54%→65%) Infrastructure 223 378 321 △57 • Infrastructure(KRW 0.4 tril., +0.2 QoQ): GTX B line(0.4), etc. Consolidated 308 323 150 △173 subsidiaries* *NtoB excluded: transfer of 12.9% ownership to POSCO(’22.11.)


POSCO Future M_Performance Income Major Activities 1,135 (KRW Billion) QoQ ○ Cathode : Achieved the highest sales and revenue of the quarter 780 +355 Revenue • Revenue increased due to recovery of sales in N65(+73% QoQ) 665 after customer inventory adjustments in the previous quarter, and new sales of NCMA starting from March 26 • Profitability partially improved due to a decline in average +17 3.9% 20 exchange rate and initial costs of starting a new production line Operating Profit *Exchage rate: KRW/U$ 1,359à 1,276 +1.4%p 3 1.8% ○ Anode : Sales increased while electricity costs increased OP Margin 0.4% • Sales of natural graphite anode materials for EVs recovered (+27% QoQ), revenue increased ’22.1Q ‘22.4Q ‘23.1Q • Weak improvement in profitability in increased processing costs 【Revenue by Business】 such as electricity prices, a decline in exchange rates, and delayed in operating rates (KRW Billion) ’22.1Q ’22.4Q ’23.1Q QoQ ○ Plant sector upturn, Quicklime/Chemical normalization Cathode materials 272 385 713 +328 • Refractories : Profit increased due to major maintenance works Anode materials 45 56 68 +12 at steel mills • Quicklime/Chemical : Revenue improved QoQ and YoY due to Refractories 143 150 144 △6 the recovery of sales and the rise in price of limestome Quicklime/Chemical 205 189 210 +21 resulting from the normalization of Pohang Works


2023 Business Outlook Consolidated Revenue 86 (KRW Trillion) CAPEX 11 (KRW 2 trillion, separated] (KRW Trillion) Net Debt 11 (KRW Trillion) nd - Notice of the 2 POSCO Group Secondary Battery Materials Business Value Day– q Date : [Domestic] ’23.7.11(Tue.) / [Overseas] ’23.7.12(Wed.)~14(Fri.) q Venue : [Domestic] Art Hall, POSCO Center West Building, Seoul / [Overseas] Hong Kong and Singapore q Audience : POSCO Group and secondary battery industry analysts and investors


Shareholder Return Policy 1Q23 Earnings Release │ April 27, 2023 17


Shareholder Return Policy_Progress(~2022) Enhancing shareholder value through the preemptive implementation of quarterly dividend policy, establishment of performance-linked midterm dividend policy, share buyback and cancellation ③ Share buyback & ① Quarterly dividend policy ② Midterm dividend policy cancellation st § Announced the midterm dividend policy in § Share buyback in 2020~2021, the first in 13 § Announced as the 1 large corporation in Jan. 2020: dividend payout ratio at around years (KRW 1 tril., 5.1%) Korea in Oct. 2015 30% from 2020~2022 § Share cancellation in 2022, the first in 18 § Reduced dividend uncertainty by § Enhanced predictability through the shortening payment intervals years (KRW 600 bil., 3.0%) implementation of the concrete dividend § Implemented quarterly dividends from the policy and disclosure of midterm dividend 2Q 2016 for 27 consecutive quarters goals Stable dividend of at least KRW 8,000 A record-high shareholder return of KRW 3.4 tril. (29.8%) despite cyclical conditions of the steel industry during the midterm dividend policy period from 2020~2022 47% Dividend per share (KRW Thousand) 17 39% Consolidated net income (KRW Trillion) 19% Total Shareholder 15 6.0 Return Ratio 1478 12 1286 10 Treasury Stock 4.0 10 10 Retirement 8 8 8 8 8 8 Total Shareholder 620 5 Return Amount 2.0 Dividend (KRW (KRW Billion) Trillion) - - 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2020 2021 2022


Shareholder Return Policy_New Shareholder Return Policy(2023~2025) Balancing shareholder value enhancement through growth and stable dividends through the midterm shareholder return policy from 2023 to 2025 Achieving sustainable growth Stable dividends in order to meet as a global eco-friendly future materials provider the expectations of long-term investors’ trust § Introducing a ‘basic dividend' to stablize shareholder § Establishing a shareholder return policy based on ‘free cash returns in response to the uncertainty of free cash flow flow' in consideration of the need for future growth investment § Maintaning quarterly dividends despite irregular cash inflow cycles of a holding company § Utilizing financial resource for the shareholder return on a ‘separate' basis taking into account the holding company’s § Improving shareholder value through proactive introduction characteristics, where the main source of income comes of advanced dividend distribution procedures of from dividends received from subsidiaries ‘determining dividends before the record date’ Financial resource for the shareholder return : 50~60% of annual free cash flow(FCF) Shareholder Return Basic dividend : KRW 10,000 per share Policy for Remaining financial resource after the payment of basic dividend shall be additionally 2023 to 2025 returned to shareholders


Appendix ESG Management Activities Summarized Income Statement Summarized Balance Sheet


ESG Management Activities_ESG Reduced serious accidents by establishing safety governance at a group level and strengthening preventive safety management § Established POSCO group’s Safety Concil(starting Apr. 2022, quarterly) - A head of Safety Health Environment Division at POSCO leads CEOs and safety managers from 15 group affiliates, 13 overseas subsidiaries to check safety metrics and sharing best practices § Adopted TRIFR* safety management index from a preventive perspective(Jul. 2022) [No. of seriously injured employees - Introduced TRIFR index in all business sites and established a culture of reporting accidents (consolidated)] * Total Recordable Incident Frequency Rate is a measure used by global businesses or sustainability standards 7 such as SASB to record and manage even minor injuries and treatments to prevent major accidents • Significant decrease in no. of serious accidents with only one case in 2022, 3 zero serious accidents for the past 14 months(as of Apr. 2023) 1 • POSCO E&C was the only one company among Korea’s top 10 construction 2020 2021 2022 companies to record zero serious accidents in 2022 Prepared for legislations by strengthening human rights practices to meet global standards for ESG disclosure and Supply Chain Mgmt Act compliance - Established a new <Human Rights Policy> reflecting global stadards including Universal Declaration of Human rights, UNGC, ILO (’22.8) - Established the POSCO Human Rights Center(’23.1) and plan to conduct human rights assessments * Total Recordable Injury Frequency Rate is calculated by dividing the total number of industrial accidents reported to the Ministry of Employment and Labor by the total number of working hours multiplying by one million


Summarized F/S_Consolidated Income Statement (KRW Billion) 22.1Q 22.4Q 23.1Q QoQ Revenue 21,338 19,248 19,381 133 Gross Profit 2,929 379 1,386 1,007 (Gross Margin) (13.7%) (2.0%) (7.2%) (5.2%p) SG&A 671 805 681 △124 Operating Profit 2,258 △425 705 1,130 (Operating Margin) (10.6%) (△2.2%) (3.6%) (5.8%p) Net Profit 1,907 △737 840 1,577 EBITDA 3,146 543 1,659 1,130 (EBITDA Margin) (14.7%) (2.8%) (8.6%) (5.8%p) EPS (KRW) 25,140 △9,716 11,079 20,795 No. of outstanding shares [Thousands) 75,849 75,849 75,849 -


Summarized F/S_Consolidated Balance Sheet (KRW Billion) 22.1Q 22.4Q 23.1Q QoQ Current Assets 50,929 47,650 50,016 2,366 Cash and Cash Equivalents 19,584 18,739 19,878 1,139 Accounts Receivable 11,708 9,770 11,279 1,509 Inventories 16,079 15,472 15,028 △444 Non-Current Assets 47,698 50,757 52,596 1,839 Tangible Assets 29,709 31,781 32,640 859 Intangible Assets 4,206 4,839 4,907 69 Other LT Financial Assets 2,371 2,333 2,661 328 Total Assets 98,627 98,407 102,612 4,205 Liabilities 41,465 40,149 43,109 2,960 Current Liabilities 23,577 23,188 22,589 △599 Non-Current Liabilities 17,888 16,961 20,520 3,559 ※ Total Debt 23,993 24,306 27,620 3,314 Shareholders’ Equity 57,162 58,258 59,504 1,246 Owners of the Controlling Stake 51,994 52,520 53,897 1,377 Net Debt 4,409 5,554 7,743 2,189 Net Debt to Equity (%) 3.5% 7.7% 9.5% 13.0%