United States Steel Corporation · NYSE:X
United States Steel — Q3 2022 Earnings Presentation
35 slides from United States Steel's earnings presentation, Oct 27, 2022
Slide 1: Third Quarter 2022 Earnings Presentation
Third Quarter 2022 Earnings Presentation www.ussteel.com October 27, 2022
Slide 2: Legal disclaimers
Legal disclaimers 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 third quarter 2022. Financial results as of and for the periods ended September 30, 2022 provided he
Slide 3: Explanation of use of non-GAAP measures
Explanation of use of non-GAAP measures We present adjusted net 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 performance. We believe that EBIT
Slide 4: Bullish on U. S. Steel's future
CURRENT LANDSCAPE CHALLENGES SOLUTION PATH FORWARD Advancing towards our Best for All® future 4 Bullish on U. S. Steel’s future Delivering on Best for All Transitioning to a less capital- and carbon- intensive business model while becoming the best steel competitor Balanced capital allocation framew
Slide 5: Advancing towards our Best for All future
ADVANCING TOWARDS OUR BEST FOR ALL FUTURE
Slide 6: Delivering for all our stakeholders
6 6 Advancing towards our Best for All future Delivering for all our stakeholders Providing customers with profitable steel solutions for people and planet Delivering profitable solutions ✓ ✓ ✓ Growing competitive advantages Improving through-cycle performance Developing quality products & customer
Slide 7: Growing competitive advantages
7 7 Advancing towards our Best for All future Growing competitive advantages LOW-COST IRON ORE MINI MILL STEELMAKING BEST-IN-CLASS FINISHING CAPABILITIES U. S. Steel’s Competitive Advantages:
Slide 8: Growing competitive advantages
8 8 Advancing towards our Best for All future Growing competitive advantages LOW-COST IRON ORE MINI MILL STEELMAKING BEST-IN-CLASS FINISHING CAPABILITIES U. S. Steel’s Competitive Advantages:
Slide 9: Expanding our iron ore capability: advantaged pig iron strategy
9 9 Advancing towards our Best for All future Expanding our iron ore capability Advantaged pig iron strategy Annual production of up to 500k tons Expected efficiency synergies at Gary Works Excess iron production at Gary Works to feed pig machine Unique solution to supply Big River Steel Expected to
Slide 10: Investing in DR-grade pellet capability
10 10 Advancing towards our Best for All future Expanding our iron ore capability Investing in DR-grade pellet capability Enabling Keetac to create DR-grade pellets while maintaining flexibility to produce blast furnace-grade pellets Maintaining optionality while serving the growing EAF market Optio
Slide 11: Growing competitive advantages
11 11 Advancing towards our Best for All future Growing competitive advantages LOW-COST IRON ORE MINI MILL STEELMAKING BEST-IN-CLASS FINISHING CAPABILITIES U. S. Steel’s Competitive Advantages:
Slide 12: Expanding our mini mill steelmaking advantage
12 12 Advancing towards our Best for All future Expanding our mini mill steelmaking advantage Capital Spending Tons of Raw Steel Capability Run-rate EBITDA by ‘26 BR2 MINI MILL STEELMAKING Comprehensive suite of finishing assets Complementing the current Big River Steel footprint Expanding our susta
Slide 13: Growing competitive advantages
13 13 Advancing towards our Best for All future Growing competitive advantages LOW-COST IRON ORE MINI MILL STEELMAKING BEST-IN-CLASS FINISHING CAPABILITIES U. S. Steel’s Competitive Advantages:
Slide 14: Capturing strategic market growth: NGO steel
14 14 Advancing towards our Best for All future Capturing strategic market growth ~$450M Capital Spending ~200k Tons of Finishing Capability Run-rate EBITDA by ‘26 NGO STEEL BEST-IN-CLASS FINISHING CAPABILITY ~$140M Meeting the growing electric vehicle demand Non-grain oriented (NGO) electrical stee
Slide 15: Capturing strategic market growth: coating line
15 15 Advancing towards our Best for All future Capturing strategic market growth ~$280M Capital Spending ~325k Tons of Finishing Capability Run-rate EBITDA by ‘26 COATING LINE BEST-IN-CLASS FINISHING CAPABILITY ~$60M Expanding our presence in value-add construction Galvalume steel for exposed build
Slide 16: On-time and on-budget strategic projects
16 16 Advancing towards our Best for All future On-time and on-budget strategic projects Best-in-class finishing capabilities 2021 2022 2023 2024 2025+ BRS NGO line (3Q ‘21 – 3Q ‘23) BRS coating line (4Q ‘21 – 2Q ‘24) Mini mill steelmaking BR2 (1H ‘22 – ‘24) Strategic project timeline: Low-cost iron
Slide 17: Unlocking future earnings power
17 17 Advancing towards our Best for All future Unlocking future earnings power BR2 MINI MILL STEELMAKING $650M Run-rate EBITDA by ‘26 NGO STEEL BEST-IN-CLASS FINISHING $140M Run-rate EBITDA by ‘26 COATING LINE BEST-IN-CLASS FINISHING $60M Run-rate EBITDA by ‘26 2022 20242023 2025 $830M 2026+ $880M
Slide 18: Balanced capital allocation approach
18 18 Balanced capital allocation approach Creating value today with stock buybacks ~301M 263M -13% Diluted-equivalent share count1 In million shares As of Sept. 30, 2021 As of Sept. 30, 2022 $850M $300M stock buyback (announced Oct. ’21) $500M stock buyback (announced Jan. ’22) $150M Completed in 4
Slide 19: Third quarter 2022 update
THIRD QUARTER 2022 UPDATE Big River Steel non-grain oriented (NGO) electric steel line – on budget / on schedule for 3Q 2023 start up.
Slide 20: Improving on record safety performance
Third quarter 2022 update Improving on record safety performance 0.10 0.07 0.06 0.04 YTD 20222019 20212020 BLS - Iron & Steel: 0.70 Benchmark 1 : OSHA Days Away from Work 2 Safety first: Consecutive years of record-setting performance 201 Bureau of Labor Statistics – Iron & Steel 2020 data. 2 Occupa
Slide 21: Financial updates
Reported Net Earnings (Loss) $ Millions Profit Margin: $1,543 $1,038 $891 $1,104 $516 3Q 2021 4Q 2021 3Q 20221Q 2022 2Q 2022 Adjusted Net Earnings (Loss) $ Millions Adjusted Profit Margin: $1,831 $1,524 $1,139 $1,422 $650 1Q 20223Q 2021 3Q 20224Q 2021 2Q 2022 Total Segment EBIT1 $ Millions Total Seg
Slide 22: Flat-Rolled segment EBITDA bridge
EBITDA Bridge $ Millions, 2Q 2022 vs. 3Q 2022 EBITDA Margin: 32% 21%30% $1,135 $1,017 $636 $902 $631 1Q 20223Q 2021 4Q 2021 3Q 20222Q 2022 23% $902 $631 2Q 2022 Operating Costs ($346) Raw Materials Commercial $50 $27 ($2) Other 3Q 2022 Commercial: The unfavorable impact is primarily the result of lo
Slide 23: Mini Mill segment
Segment EBITDA $ MillionsOperating Statistics EBITDA Bridge $ Millions, 3Q 2021 vs. 3Q 2022 Mini Mill segment Key statistics EBITDA Bridge $ Millions, 2Q 2022 vs. 3Q 2022 $309 Operating Costs ($245) $40 2Q 2022 Commercial ($43) $0 Raw Materials $19 Other 3Q 2022 Commercial: The unfavorable impact is
Slide 24: U. S. Steel Europe segment
Other: The unfavorable impact is primarily the result of the weakening of the Euro vs. the U.S. dollar and increased energy costs. Segment EBITDA $ MillionsOperating Statistics EBITDA Bridge $ Millions, 3Q 2021 vs. 3Q 2022 $418 ($49) 3Q 2021 ($146) ($32) Commercial Raw Materials ($203) Operating Cos
Slide 25: Tubular segment EBITDA bridge
EBITDA Bridge $ Millions, 3Q 2021 vs. 3Q 2022 $167 $179 $12 ($5) 3Q 2021 Commercial ($4) Raw Materials ($15) Operating Costs Other 3Q 2022 Commercial: The favorable impact is primarily the result of higher average realized prices partially offset by continued low- priced imports. Raw Materials: The
Slide 26: Global operating footprint
Operating Indefinitely Idled N o rt h A m e ri c a n F la t- R o 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 1.5 7.5 Granite City BF ‘A’ BF ‘B’ 1.4 2.8 Mon Valley BF #1 BF #3 1.4 2.9 Košice BF #3BF #2BF #1 1.7 5.0 Fairf
Slide 27: Safely navigating current headwinds
Safely navigating current headwinds Recent blast furnace footprint adjustments BF #3 @ Mon Valley Works • Moved forward a 30-day outage from October to September to better align supply with the order book • BF remains temporarily idled BF #8 @ Gary Works • Temporarily idled due to market conditions
Slide 28: Cash and liquidity
Cash and liquidity $938 $682 $138 $4,090 $2,750 9M 2022YE 2020YE 2019YE 2018 YE 2021 Cash from Operations $ Millions Cash and Cash Equivalents $ Millions Total Estimated Liquidity $ Millions Net Debt $ Millions $1,000 $749 $1,985 $2,522 $3,364 YE 2021YE 2018 YE 2019 YE 2020 9M 2022 $2,830 $2,284 $3,
Slide 29: Appendix
APPENDIX
Slide 30: Additional Big River Steel LLC summary data
Additional Big River Steel LLC1 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 3Q 2022 Intersegment Sales Net Sales EBIT2 $602M $60M $662M $1M Total Assets $3,659M Depreciation Capital Expenditures4 $35M $89M 2029 senior secured notes $720M Environmental
Slide 31: Segment EBITDA reconciliation
Flat-Rolled ($ millions) 3Q 2021 4Q 2021 1Q 2022 2Q 2022 3Q 2022 Segment earnings before interest and income taxes $1,015 $890 $513 $777 $505 Depreciation and amortization 120 127 123 125 126 Flat-Rolled Segment EBITDA $1,135 $1,017 $636 $902 $631 U. S. Steel Europe ($ millions) 3Q 2021 4Q 2021 1Q 2
Slide 32: Reconciliation of net debt
Net Debt ($ millions) YE 2018 YE 2019 YE 2020 YE 2021 9M 2022 Short-term debt and current maturities of long-term debt $65 $14 $192 $28 $59 Long-term debt, less unamortized discount and debt issuance costs 2,316 3,627 4,695 3,863 3,863 Total Debt $2,381 $3,641 $4,887 $3,891 $3,922 Less: Cash and cas
Slide 33: Reconciliation of reported and adjusted net earnings
Reconciliation of reported and adjusted net earnings ($ millions) 3Q 2021 4Q 2021 1Q 2022 2Q 2022 3Q 2022 FY 2021 Reported net earnings attributable to U. S. Steel $2,002 $1,069 $882 $978 $490 $4,174 Losses (gains) on debt extinguishment 26 10 ─ ─ (2) 290 Asset impairment charges ─ 245 6 151 ─ 273 R
Slide 34: Reconciliation of adjusted EBITDA
Reconciliation of adjusted EBITDA ($ millions) 3Q 2021 4Q 2021 1Q 2022 2Q 2022 3Q 2022 Reported net earnings attributable to U. S. Steel $2,002 $1,069 $882 $978 $490 Income tax provision (benefit) 260 (54) 246 284 154 Net interest and other financial costs 80 130 (10) (8) (30) Reported earnings befo
Slide 35: Investor Relations
INVESTOR RELATIONS Kevin Lewis Vice President 412-433-6935 klewis@uss.com Eric Linn Director 412-433-2385 eplinn@uss.com www.ussteel.com @USS_Investors