United States Steel Corporation · NYSE:X
United States Steel — Q4 2020 Earnings Presentation
36 slides from United States Steel's earnings presentation, Jan 28, 2021
Slide 1: Fourth Quarter and Full Year 2020 Earnings Presentation
Fourth Quarter and Full Year 2020 Earnings Presentation www.ussteel.com January 28, 2021
Slide 2: Forward-looking statements
2 Forward-looking statements These slides are being provided to assist readers in understanding the results of operations, financial condition and cash flows of United States Steel Corporation as of and for the fourth quarter and full year of 2020. Financial results as of and for the periods ended D
Slide 3: Non-GAAP measures
3 We present adjusted net (loss) earnings, adjusted net (loss) earnings per diluted share, (loss) earnings before interest, income taxes, depreciation and amortization (EBITDA) and adjusted EBITDA, which are non-GAAP measures, as additional measurements to enhance the understanding of our operating
Slide 4: Creating Value in the Trough
CREATING VALUE IN THE TROUGH PRO-TEC’s new continuous galvanizing line (CGL3) makes sustainable Advanced High Strength Steel grades, now also using substrate sourced from Big River Steel.
Slide 5: Creating value in the trough: 2020 accomplishments
Creating value in the trough 2020 accomplishments 5 Executed on our #1 strategic priority; creating a Best of BothSM footprint through completion of the Big River Steel acquisition Acquired Big River Steel Divested non- core assets Delivered on our commitment to extract value from our attractive por
Slide 6: Big River Steel: The Future Is Now
BIG RIVER STEEL: “THE FUTURE IS NOW” Steelmaking at one of Big River Steel’s electric arc furnaces (EAFs).
Slide 7: Big River Steel: the future is now
Big River Steel the future is now 7 Full ownership unlocks additional opportunities Full collaboration to maximize customer value and develop new products Increased flexibility to serve the growing Southern U.S. and Mexico markets Low-GHG1 emission steelmaking to provide the sustainable steel custom
Slide 8: Big River Steel Phase 2-A expansion
Big River Steel phase 2-A expansion 8 8 The start up and ramp up of Big River’s Phase 2-A expansion is the fastest ever achieved worldwide with SMS group CSP-Mill Technology. The Big River and SMS teams should be proud of this tremendous achievement.
Slide 9: Big River Steel strong end to 2020
Big River Steel strong end to 2020 9 9 Phase 2-A expansion already running near 90% raw steel capability Month of December 2020 Statistics 2 Excludes $62 million of restricted cash for the completion of Phase 2-A expansion. 3 Includes unrestricted cash and ABL availability. Excludes $62 million of r
Slide 10: Big River Steel balanced product mix
Big River Steel balanced product mix 10 10 Phase 2-A expansion provides greater exposure to the hot-rolled market 50% 22% 28% Hot Rolled Coil (50%) Cold Rolled Coil (22%) Coated (28%) Big River Steel Product Mix 4Q 2020
Slide 11: Fourth Quarter & Full Year Update
FOURTH QUARTER & FULL YEAR UPDATE
Slide 12: Safety First
12 Safety First 0.14 0.10 0.07 20192018 2020 BLS - Iron & Steel: 0.60 Benchmark 2 : OSHA Days Away from Work 1 1 Occupational Safety and Health Administration (OSHA) Days Away from Work is defined as number of days away cases x 200,000 / hours worked. 2020 data is preliminary. 2 BLS – Iron & Steel 2
Slide 13: Fourth quarter 2020 financial highlights
13 Fourth quarter 2020 financial highlights Reported Net (Loss) Earnings $ Millions Profit Margin: ($109) ($123) ($469) ($268) ($60) 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 Adjusted Net (Loss) Earnings $ Millions Adjusted Profit Margin: ($158) ($96) ($423) ($211) ($75) 4Q 2019 1Q 2020 2Q 2020 3Q 202
Slide 14: Full year 2020 financial highlights
Full year 2020 financial highlights Reported Net Earnings (Loss) $ Millions Profit Margin: ($250) $341 $957 $15 ($920) FY 2019FY 2016 FY 2017 FY 2018 FY 2020 Adjusted Net Earnings (Loss) $ Millions Adjusted Profit Margin: ($33) $647 $1,239 $95 ($805) FY 2016 FY 2018FY 2017 FY 2020FY 2019 Segment EBI
Slide 15: Key Segment Statistics: Flat-rolled
Key Segment Statistics EBITDA1 $ Millions Flat-rolled segment Shipments: in 000s, net tons Production: in 000s, net tons 28% 5% 27% 21% 19% Firm (28%) Cost Based (5%) Spot (27%) Market Based Quarterly (21%) Market Based Monthly (19%) 2020 Contract vs. Spot Mix 73% Contract; 27% Spot Average Selling
Slide 16: Key Segment Statistics: U. S. Steel Europe
Key Segment Statistics EBITDA1 $ Millions U. S. Steel Europe segment Shipments: in 000s, net tons Production: in 000s, net tons 2020 Contract vs. Spot Mix 48% Contract; 52% Spot Select Market Indicators2 EBITDA Margin: (1%) 2% 8%(1%) ($7) $9 ($3) $39 $61 4Q 2019 1Q 2020 2Q 2020 4Q 2020 3Q 2020 $622
Slide 17: Key Segment Statistics: Tubular
Key Segment Statistics EBITDA2 $ Millions Tubular segment Shipments: in 000s, net tons 2020 Contract vs. Spot Mix 40% Program; 60% Spot Select Market Indicators3 EBITDA Margin: (13%) (14%) (46%)(22%) ($34) ($35) ($40) ($44) ($21) 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 $1,298 $1,283 $1,288 $1,230 $1
Slide 18: Cash and liquidity
18 Cash and liquidity $754 $826 $938 $682 $138 YE 2020YE 2019YE 2018YE 2016 YE 2017 Cash from Operations $ Millions Cash and Cash Equivalents $ Millions Total Estimated Liquidity $ Millions Net Debt $ Millions $1,515 $1,553 $1,000 $749 $1,985 YE 2016 YE 2017 YE 2018 YE 2020YE 2019 $2,899 $3,350 $2,8
Slide 19: 2021 Outlook
2021 OUTLOOK Rounds substrate now made through the new sustainable EAF at our Fairfield Tubular operations.
Slide 20: 2021 outlook: reasons we are confident
2021 outlook reasons we are confident 20 Optimism Low inventories across the supply chain Improving demand in key end-markets Optionality Lower capital intensity Differentiated capabilities 1 Advanced High Strength Steel. Opportunity Proprietary AHSS1 finishing technology Sustainable steel offerings
Slide 21: 2021 outlook: current footprint supporting customer demand
Operating Idled Indefinitely Idled N o rt h A m e ri c a n F la t- ro ll e d T u b u la r E u ro p e MinntacIron ore pellets Keetac3 – 22.4 Cokemaking Clairton – 4.3 Gary BF #43 BF #6 BF #8 BF #14 – 7.5 Granite City BF ‘A’ BF ‘B’ 1.4 2.8 Great Lakes2 BF ‘D4’BF ‘B2’BF ‘A1’ 3.8 3.8 Mon Valley BF #1 BF
Slide 22: 2021 outlook: customer demand remains robust
2021 outlook customer demand remains robust U .S . fl a t- ro ll e d m a rk e t T u b u la r M a rk e t E u ro p e f la t- ro ll e d m a rk e t Automotive Construction Appliance Automotive Construction Appliance Oil & gas Our automotive order book remains strong. Vehicle inventories are still low at
Slide 23: 2021 outlook: operating metrics and guidance
23 2 Includes $60 million of carryover spending related to the completion of Phase 2-A expansion and equipment retention payments. Flat-rolled Segment Estimated 3rd Party Shipment Volumes Operating Metrics 8.9 – 9.1 Big River Steel Estimated 3rd Party Shipment Volumes 2.6 – 2.8 U. S. Steel Europe Se
Slide 24: 2021 outlook: current strategic projects status
Strategic Projects Continue to expect 2021 capital spending to be ~$675 million1 Status Details Dynamo Line at USSK Project delayed for an indeterminate period of time. 2021 outlook current strategic projects status 24 Endless Casting and Rolling at Mon Valley Purchasing equipment and expect to draw
Slide 25: Appendix
APPENDIX
Slide 26: Fourth quarter segment EBITDA bridges (3Q vs 4Q 2020)
26 Fourth quarter segment EBITDA bridges Flat-rolled $ Millions U. S. Steel Europe $ Millions Tubular $ Millions 3Q 2020 vs 4Q 2020 ($33) $50 $24 3Q 2020 Raw Materials 4Q 2020 $60 $0 Commercial ($1) Maintenance & Outage Other $39 $61 $38 Commercial3Q 2020 ($10) ($3) Raw Materials OtherMaintenance &
Slide 27: Fourth quarter segment EBITDA bridges (4Q 2019 vs 4Q 2020)
Fourth quarter segment EBITDA bridges Flat-rolled $ Millions U. S. Steel Europe $ Millions Tubular $ Millions 4Q 2019 vs 4Q 2020 $42 $50 $45 $22 4Q 2019 Raw Materials Commercial ($57) ($2) Maintenance & Outage Other 4Q 2020 $61 $15 Raw Materials $47 ($7) 4Q 2019 $0 Commercial Maintenance & Outage $6
Slide 28: Full year segment EBITDA bridges
Other: The favorable impact is primarily the result of COVID-19 relief, lower energy costs, and a favorable USD/Euro exchange rate. Full year segment EBITDA bridges Flat-rolled $ Millions U. S. Steel Europe $ Millions Tubular $ Millions Full Year 2019 vs Full Year 2020 $652 CommercialFY 2019 $92 ($1
Slide 29: Total corporation adjusted EBITDA bridges
29 Total corporation adjusted EBITDA bridges 3Q 2020 vs. 4Q 2020 $ Millions 3Q 2020 vs. 4Q 2020 $ Millions ($49) $87 $45 Raw Materials 3Q 2020 ($1) $96 Commercial ($4) Maintenance & Outage Other 4Q 2020 ($49) $87$22 $23 3Q 2020 Other $8 $83 TubularFlat- rolled U. S. Steel Europe 4Q 2020 4Q 2019 vs 4
Slide 30: Segment EBITDA reconciliation
30 Flat-rolled ($ millions) 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 FY 2019 FY 2020 Segment (loss) earnings before interest and income taxes ($79) ($35) ($329) ($159) ($73) $196 ($596) Depreciation 121 121 126 126 123 456 496 Flat-rolled Segment EBITDA $42 $86 ($203) ($33) $50 $652 ($100) U. S. Stee
Slide 31: Reconciliation of net debt
31 Net Debt ($ millions) YE 2016 YE 2017 YE 2018 YE 2019 YE 2020 Short-term debt and current maturities of long-term debt $50 $3 $65 $14 $192 Long-term debt, less unamortized discount and debt issuance costs 2,981 2,700 2,316 3,627 4,695 Total Debt $3,031 $2,703 $2,381 $3,641 $4,887 Less: Cash and c
Slide 32: Reconciliation of reported and adjusted net earnings
32 Reconciliation of reported and adjusted net earnings ($ millions) 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 FY 2019 FY 2020 Reported net (loss) earnings attributable to U. S. Steel ($668) ($391) ($589) ($234) $49 ($630) ($1,165) Asset impairment charges ─ 263 ─ ─ ─ ─ 263 Restructuring and other cha
Slide 33: Reconciliation of adjusted EBITDA
33 Reconciliation of adjusted EBITDA ($ millions) 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 FY 2019 FY 2020 Reported net (loss) earnings attributable to U. S. Steel ($668) ($391) ($589) ($234) $49 ($630) ($1,165) Income tax provision (benefit) 221 (19) (5) (24) (94) 178 (142) Net interest and other fi
Slide 34: Reconciliation of Big River Steel December EBITDA
34 ($ millions) December 2020 Reported net earnings $33 Income tax provision 1 Net interest and other financial costs (18) Reported (loss) earnings before interest and income taxes $16 Depreciation and amortization expense 13 EBITDA $29 Reconciliation of Big River Steel December EBITDA
Slide 35: Reconciliation of Big River Steel net debt
35 Net Debt ($ millions) YE 2020 Short-term debt and current maturities of long-term debt $0 Long-term debt, less deferred revenue 1,848 Total Debt $1,848 Less: Cash and cash equivalents1 110 Net Debt $1,738 Reconciliation of Big River Steel net debt 1 Unrestricted and restricted cash
Slide 36: Investor Relations
INVESTOR RELATIONS Kevin Lewis Vice President 412-433-6935 klewis@uss.com Eric Linn Senior Manager 412-433-2385 eplinn@uss.com www.ussteel.com