United States Steel Corporation · NYSE:X
United States Steel — Q1 2021 Earnings Presentation
36 slides from United States Steel's earnings presentation, Apr 29, 2021
Slide 1: First Quarter 2021 Earnings Presentation
First Quarter 2021 Earnings Presentation www.ussteel.com April 29, 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 first quarter of 2021. They should be read in conjunction with the consolidated financial
Slide 3: Non-GAAP measures notice
3 We present adjusted net earnings (loss), adjusted net earnings (loss) per diluted share, earnings (loss) 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: Accomplishments aligned with value creation
4 Accomplishments aligned with value creation: Well-timed acquisition of Big River Steel✓ Industry-leading sustainability announcements✓ Strengthened balance sheet and restored financial flexibility ✓ Continued execution in the first quarter
Slide 5: Well-timed acquisition of Big River Steel
WELL-TIMED ACQUISITION OF BIG RIVER STEEL
Slide 6: First quarter highlights
6 6 Well-timed acquisition of Big River Steel First quarter highlights 32% EBITDA margin Continued margin expansion from Phase 2 expansion Strong per ton profitability reflects a highly variable cost structure $362 EBITDA per ton Well-timed acquisition of the remaining stake in Big River Steel $967
Slide 7: Outperforming the competition
Well-timed acquisition of Big River Steel Outperforming the competition Efficiencies from Phase 2 expansion delivering strong margin performance 32% 19% 22% 1Q 2021 EBITDA margin % 7 Mini mill competitor #1 Mini mill competitor #2 Note: Big River Steel statistics calculated based off their January 1
Slide 8: Mini Mill segment
8 8 Well-timed acquisition of Big River Steel Mini Mill segment Mini Mill segment Mini Mill segment $162M Segment EBITDA January 15 – March 31, 2021 During U. S. Steel’s full ownership Big River Steel 1Q 2021 Performance $192M Adjusted EBITDA January 1 – March 31, 2021 Note: The Mini Mill segment do
Slide 9: 1Q 2021 shipment statistics
Well-timed acquisition of Big River Steel 1Q 2021 shipment statistics 9 60% 17% 23% By product: By end-market: By contract / spot mix: 51% 24% 18% 5% 1% 1% 13% 7% 4% 56% 20% Hot rolled coil (60%) Cold rolled coil (17%) Coated (23%) Service centers (51%) Further conversions (24%) Construction (18%) A
Slide 10: Steelmaking inputs
Well-timed acquisition of Big River Steel Steelmaking inputs 10 Note: Pie charts are based on 1Q 2021 production. R a w m a te ri a ls 1.1 Tons of scrap and scrap substitutes / ton of hot rolled coil 65% 35% Scrap Other metallics1 E le c tr ic it y 0.14 Production manhours / ton of hot rolled coil3
Slide 11: Industry-leading sustainability announcements
INDUSTRY-LEADING SUSTAINABILITY ANNOUNCEMENTS Our world-class finishing lines at PRO-TEC are a key component of our recently announced verdeXTM line of sustainable steels
Slide 12: Differentiated sustainability proposition
12 12 Industry-leading sustainability announcements Differentiated sustainability proposition Only LEED® certified steel mill in the United States Helping customers meet their own decarbonization goals Only North American-based steel company to join ResponsibleSteel1 Reinforces commitment to our 205
Slide 13: Differentiated product offering
13 13 Industry-leading sustainability announcements Differentiated product offering 1 Compared to the traditional, integrated steelmaking process. up to 75% reduction in CO2 emissions1 Our most advanced high-strength steels … MADE SUSTAINABLY WORLD-CLASS finishing assets BEST … for our customers …fo
Slide 14: Strengthened balance sheet
STRENGTHENED BALANCE SHEET
Slide 15: Strengthened balance sheet
Maintain strong liquidity Proactively manage debt maturity profile Prioritize financial flexibility Strengthened balance sheet Restored financial flexibility Strong liquidity maintained Restored secured debt capacity and removed secured notes limitations2 Extended maturity profile with 2029 senior u
Slide 16: Combined maturity profile
Combined Maturity Profile, as of March 31, 2021, in millions Strengthened balance sheet Manageable combined maturity profile $750M $68M 2023 20282021 2022 $41M 2026 $662M 2024 2025 2027 2029 2030- 2048 2049+ $40M $356M $83M $740M $1,104M $37M $1,674M $1,039M No significant notes maturities until 202
Slide 17: 2021 outlook
2021 OUTLOOK
Slide 18: Stronger for longer steel market environment
2021 outlook Stronger for longer steel market environment 18 Informing our perspective: Healthy customer order book Supportive Raw Material Prices Low Steel Supply Chain Inventories Continued confidence in strong demand and market fundamentals Elevated steelmaking input costs for blast furnaces and
Slide 19: Stronger for longer steel market environment by market
2021 outlook Stronger for longer steel market environment 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 March auto sales at 17.75 million SAAR exceeded expectations. Th
Slide 20: Global operating footprint
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 Keetac – 22.4 Cokemaking Clairton – 4.3 Gary BF #4 BF #6 BF #8 BF #14 – 7.5 Granite City BF ‘A’ BF ‘B’ 1.4 2.8 Great Lakes BF ‘D4’BF ‘B2’BF ‘A1’ 3.8 3.8 Mon Valley BF #1 BF #3
Slide 21: First quarter update
FIRST QUARTER UPDATE
Slide 22: Safety performance
22 1 Occupational Safety and Health Administration (OSHA) Days Away from Work is defined as number of days away cases x 200,000 / hours worked. YTD as of April 21, 2021. 2 BLS – Iron & Steel 2019 data. First quarter 2021 update Safety performance Safety First 0.14 0.10 0.07 0.08 20202018 2019 YTD 20
Slide 23: Financial updates
23 Reported Net (Loss) Earnings $ Millions Profit Margin: ($123) ($469) ($268) ($60) $283 1Q 20211Q 2020 2Q 2020 4Q 20203Q 2020 Adjusted Net (Loss) Earnings $ Millions Adjusted Profit Margin: ($96) ($423) ($211) ($75) $362 1Q 20211Q 2020 2Q 2020 3Q 2020 4Q 2020 Segment EBIT1 $ Millions Segment EBIT
Slide 24: Flat-rolled segment
24 Shipments: in 000s, net tons Production: in 000s, net tons EBITDA Bridge 4Q 2020 vs. 1Q 2021 EBITDA Margin: 4% (2%)(13%) $86 ($203) ($33) $50 $266 1Q 20214Q 20201Q 2020 2Q 2020 3Q 2020 3% $266 $362 OtherRaw Materials $1($16) $50 4Q 2020 Commercial Maintenance & Outage ($131) 1Q 2021 Commercial: T
Slide 25: Mini Mill segment
25 Segment EBITDA $ Millions EBITDA Margin: - -- $162 1Q 2020 2Q 2020 3Q 2020 1Q 20214Q 2020 - 32% Shipments: in 000s, net tons Production: in 000s, net tons Average Selling Price $ / net ton 1Q 2020 - - - 2Q 2020 - - - 3Q 2020 - - - 4Q 2020 - - - 1Q 2021 510 447 $967 Operating Statistics EBITDA Bri
Slide 26: U. S. Steel Europe segment
26 Segment EBITDA $ Millions EBITDA Margin: 2% 8%(1%) $9 ($3) $39 $61 $130 2Q 2020 4Q 20203Q 20201Q 2020 1Q 2021 11% 16% Shipments: in 000s, net tons Production: in 000s, net tons Average Selling Price $ / net ton 1Q 2020 882 801 $611 2Q 2020 645 610 $632 3Q 2020 873 790 $608 4Q 2020 966 840 $652 1Q
Slide 27: Tubular segment
27 EBITDA Margin: (14%) (46%)(22%) ($35) ($40) ($44) ($21) ($17) 4Q 20201Q 2020 2Q 2020 3Q 2020 1Q 2021 (20%) (12%) Shipments: in 000s, net tons Production: in 000s, net tons Average Selling Price $ / net ton 1Q 2020 - 187 $1,283 2Q 2020 - 132 $1,288 3Q 2020 - 71 $1,230 4Q 2020 16 74 $1,267 1Q 2021
Slide 28: Cash and liquidity
28 Cash and liquidity $826 $938 $682 $138 $111 YE 2019YE 2017 1Q 2021YE 2020YE 2018 Cash from Operations $ Millions Cash and Cash Equivalents $ Millions Total Estimated Liquidity $ Millions Net Debt $ Millions $1,553 $1,000 $749 $1,985 $753 YE 2020YE 2019YE 2017 YE 2018 1Q 2021 $3,350 $2,830 $2,284
Slide 29: Net debt bridge
29 Net debt 4Q 2020 vs 1Q 2021 $2,902 $5,079 $1,294 $2,055 Big River Steel Debt2 ($1,110) 4Q 2020 ($62) USS Cash Net Reduction in USS / USSK Debt Credit Facility1 BRS Cash 1Q 2021 in millions Net debt bridge U. S. Steel Capital Structure (quarter-over-quarter changes) Big River Steel Capital Structu
Slide 30: Appendix
APPENDIX
Slide 31: Additional summary data
31 Additional Big River Steel summary data In c o m e S ta te m e n t B a la n c e S h e e t C a s h F lo w Customer Sales 1Q 2021 Intersegment Sales Net Sales EBIT1 $450M $62M $512M $132M Total Assets $4,073M Depreciation and Amortization Capital Expenditures $30M $36M 1 Earnings before interest an
Slide 32: Segment EBITDA reconciliation
32 Flat-rolled ($millions) 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Segment (loss) earnings before interest and income taxes ($35) ($329) ($159) ($73) $146 Depreciation 121 126 126 123 120 Flat-rolled Segment EBITDA $86 ($203) ($33) $50 $266 U. S. Steel Europe ($ millions) 1Q 2020 2Q 2020 3Q 2020 4Q
Slide 33: Reconciliation of net debt
33 Net Debt ($ millions) YE 2017 YE 2018 YE 2019 YE 2020 1Q 2021 Short-term debt and current maturities of long-term debt $3 $65 $14 $192 $45 Long-term debt, less unamortized discount and debt issuance costs 2,700 2,316 3,627 4,695 5,787 Total Debt $2,703 $2,381 $3,641 $4,887 $5,832 Less: Cash and c
Slide 34: Reconciliation of reported and adjusted net earnings
34 Reconciliation of reported and adjusted net earnings ($ millions) 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Reported net (loss) earnings attributable to U. S. Steel ($391) ($589) ($234) $49 $91 Debt extinguishment ─ ─ ─ ─ 255 Asset impairment charges 263 ─ ─ ─ ─ Restructuring and other charges 41 8
Slide 35: Reconciliation of adjusted EBITDA
35 Reconciliation of adjusted EBITDA ($ millions) 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Reported net (loss) earnings attributable to U. S. Steel ($391) ($589) ($234) $49 $91 Income tax provision (benefit) (19) (5) (24) (94) 1 Net interest and other financial costs 35 62 47 88 333 Reported (loss) e
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