POSCO : 2017 3Q Earnings Release

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 third quarter of 2017. 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.

Parent Performance (Production/Sales)

3Q Business Performance

(thousand tons, thousand KRW/ton)

[ QoQ Analysis ]

• Production of crude steel and product increased

  • Crude steel : P) BF #3 Revamping (2.24~6.5), +950K tons

  • Product : P) HR #1 Maintenance (5.14~6.12), +241K tons

  • Plate #3 Maintenance (4.6~5.10), +142K tons

    • BF: Blast Furnace, P: Pohang Works

      • Product sales volume expanded

        • HR +277K tons, Plate +121K tons

      • Average sales price decreased

        • Carbon steel (-18 thousand KRW/ton)

        • Stainless steel (-109 thousand KRW/ton)

      • WP(World Premium) sales ratio declined by 2.8%p as HR, plate and other non-WP product sales went up

        * 2017 WP target 52%

      • Export ratio fell and domestic sales ratio hiked

to 53.7% by actively replacing imported products

3

3Q Earnings Release │ October 26, 2017

Parent Performance

3Q Business Performance

(billion KRW)

3Q 16 2Q 17 3Q 17 QoQ

[ QoQ Analysis ]

• Despite sales price decline, operating profit picked up(+137) due to production and sales volume increase and raw material price down

  Raw Material Price Production Decrease +278

  /Sales Increase

  +116

  '17.3Q 722
  	'17.2Q 585	Decline Cost Increase -218 and Others -39

  Sales Price

  +137

  • Net profit surged(+221) as OP rebounded

    and investment securities were disposed

    • Increase of operating profit (+137)

    • Disposal of investment securities (+187)

    • Reduction of dividend income and increase of corporate tax (-103)

[Financial Structure]

Liabilities 16.9%

Ratio

Net Debt -830

'16.3Q

16.3%

16.3%

-153

'17.2Q

△1,268

'17.3Q

4

3Q Earnings Release │ October 26, 2017