SSab AB Class A · OMXSTO:SSAB_A
SSab AB Class A — Q1 2022 Earnings Presentation
28 slides from SSab AB Class A's earnings presentation, Apr 26, 2022
Slide 1: Presentation of the Q1/22 report
Presentation of the Q1/22 report Martin Lindqvist, President & CEO Leena Craelius, CFO Apr 26, 2022
Slide 2: Agenda
Agenda ►Q1 2022 in brief ►Financials ►Outlook and summary ►Q&A 2
Slide 3: Q1 2022 in brief
Q1 2022 in brief 3
Slide 4: Q1/22 – Strong start in turbulent environment
Q1/22 – Strong start in turbulent environment ► Steel prices at high level Record high operating profit (SEK m) ► Unplanned stop in Raahe and higher raw material costs 8,377 ► General cost (SG&A) at same level as Q1/19 ► Continued improvement in safety – LTIF decreased to 1.6 1,674 1,993 916 343 ► S
Slide 5: Impacts on SSAB from the war in Ukraine
Impacts on SSAB from the war in Ukraine ► Our highest priority is to assist and support our employees and their families in Ukraine ► SSAB directly ceased sales to Russia and Belarus ► New purchases of ore and coal from Russia discontinued ► Several measures to ensure access to raw materials ► Relat
Slide 6: Steel prices at high level
Steel prices at high level Price development: Hot Rolled Coil (HRC) in Northern Europe, Heavy plate in the US and HRC China ► In Q1, the steel markets were Indexed (Jan 2018 = 100) impacted by the war in Ukraine 300 250 ► Higher apparent demand, including restocking, led to a 200 sharp increase in s
Slide 7: Earnings at record levels in Q1
Earnings at record levels in Q1 EBIT, SEK million 2,104 3,301 3,250 1,540 2,524 1,175 EBIT 914 1,006 margin SSAB 1,512 EBIT 27% Special margin SSAB 758 26% Europe Steels Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 2,992 515 2,188 449 418 1,871 EBIT 351 margin EBIT 1,084 218 margin 40
Slide 8: Leading the green transition of the steel industry
Leading the green transition of the steel industry Strategic decision in January to accelerate transformation to meet customer demand Re-build Nordic strip system – broader product range and improve cost position Feasibility studies for Luleå and Raahe mini-mills are proceeding – access to power is
Slide 9: Financials
Financials 9
Slide 10: Strong start to 2022
Strong start to 2022 Sales Shipments1 35,000 2,000 30,000 1,800 1,600 25,000 1,400 SEK million 20,000 1,200 ktons 1,000 15,000 800 10,000 600 400 5,000 200 0 0 19Q1 19Q2 19Q3 19Q4 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 19Q1 19Q2 19Q3 19Q4 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 2019 2020
Slide 11: Change in operating profit Q1/22 vs. Q1/21
Change in operating profit Q1/22 vs. Q1/21 SEKm Positive price effect from all divisions; largest impact from SSAB Europe -930 -3,770 -520 10 8,377 -490 -216 12,300 Large cost increase Unplanned outage from coking coal in Raahe and alloys 1,993 2021 Q1 Price Volume Var COGS Fixed costs FX Capacity O
Slide 12: Change in operating profit Q1/22 vs. Q4/21
Change in operating profit Q1/22 vs. Q4/21 SEKm Positive price and volume effect from all divisions; largest impact from SSAB Special steels -270 240 70 -410 590 -274 8,377 1,470 6,961 Unplanned outage in Raahe 2021 Q4 Price Volume Var COGS Fixed costs FX Capacity Other 2022 Q1 utilization 12
Slide 13: Strong net cash flow
Strong net cash flow Mainly accounts receivables Dividend of SEK 5.4 bn paid in April
Slide 14: Strong financial position
Strong financial position 20,000 40 ►Group is debt free with net cash of SEK 35 5.7bn (-8.9bn) at the end of Q1/22 15,000 30 25 10,000 20 5,000 15 ►2016-2017 excluding IFRS 16 (impact of 10 around SEK 2bn) 0 5 0 -5,000 -5 2016 2017 2018 2019 2020 2021 2022 Q1 -10,000 -10 Net interest bearing debt, S
Slide 15: Cash needs of the business
Cash needs of the business ►Total cash needs* estimated at SEK 8.5bn in 2022 (unchanged) 8.5 ►Higher strategic capex vs. 2021: − Oxelösund conversion ~5 − Mobile Q&T expansion 4.7 ►Interest paid expected to decrease ►Taxes paid** will increase Capex (maintenance and strategic) 2.9 − some SEK 2bn of
Slide 16: Increasing raw material cost
Increasing raw material cost ► Higher input costs will counteract higher SSAB’s purchase price, y/y changes realized steel prices in Q2 90% 96% Iron ore 62% ► SSAB’s iron ore costs were virtually unchanged Iron ore 5% 2% compared to the same quarter last year Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 211% 120%
Slide 17: Higher scrap prices
Higher scrap prices Scrap spot price ►SSAB’s average purchase price for scrap in Q1/22 was 16% higher (in terms of USD/gross ton USD) vs. Q1/21 600 500 400 300 200 100 0 Jun-21 Feb-21 Aug-21 Sep-21 Feb-22 Oct-21 Dec-21 Jan-21 Mar-21 Jul-21 Jan-22 Mar-22 Nov-21 Apr-21 May-21 Apr-22 Source: AMM 17
Slide 18: Outlook and summary
Outlook and summary 18
Slide 19: SSAB's outlook for main customer segments Q2/2022
SSAB’s outlook for main customer segments Q2/2022 Segment Demand Comments Good Healthy Weak Outlook for Q1 for SSAB’s key customer segments Heavy Transport Heavy truck production impacted by component shortages Good activity in rail car and marine in the US Component shortages limits productio
Slide 20: SSAB's outlook for Q2/2022
SSAB’s outlook for Q2/2022 Volume and pricing outlook ►Demand for steel is expected to normalize and, hence, be at a somewhat lower level than in Q2 2022 vs. Q1 2022 the first quarter − Global demand for high-strength steel is believed Shipments Realized prices to remain at a good level in most mark
Slide 21: Summary
Summary ► Earnings at record level ► Continued good trend in safety ► Strong cash flow generation and net cash position at end of Q1 ► Plan for fossil-free steel production on track − New strategic partnerships in Q1 − EU Innovation Fund support of EUR 30m for Oxelösund conversion ► Support our empl
Slide 22: Questions & Answers
Questions & Answers 22
Slide 23: Appendix
Appendix 23
Slide 24: Major planned maintenance outages in 2022
Major planned maintenance outages in 2022 ► Total maintenance costs for 2022 expected to be SEK 1,120 m (1,270) ► Lower maintenance cost for SSAB Special Steels, as Mobile has maintenance every other year Note: The estimates shown in table includes direct maintenance cost and cost of lower capacity
Slide 25: Order intake
Order intake SSAB Europe, monthly order intake, tonnes 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 Jan-21 Jul-21 Aug-21 Jun-21 mar 22 Feb-21 Mar-21 Apr-21 May-21 Sep-21 jan 22 dec 21 nov 21 feb 22 okt 21 25
Slide 26: Debt portfolio duration and interest rate
Debt portfolio duration and interest rate Debt cost and duration ►Duration of the loan portfolio was 6.1 (5.6) years Years % ►Averaged fixed interest term was 1.0 (0.9) 8.0 4.00 years 7.0 3.50 ►Average interest rate was 2.4% (2.0%) 6.0 3.00 5.0 2.50 4.0 2.00 3.0 1.50 2.0 1.00 1.0 0.50 0.0 0.00 2018
Slide 27: Maturity profile
Maturity profile Maturity profile Q1/2022 ►Liquid assets and committed credit lines at SEKm SEK 26.0 bn 30000 25000 Back-up 20000 facilities 15000 SEK 4.8bn 10000 Cash 5000 0 Cash and 2022 2023 2024 2025 2026+ back-up facilities 27
Slide 28: A stronger, lighter and more sustainable world
A stronger, lighter and more sustainable world