Cleveland-cliffs Inc. · NYSE:CLF
Cleveland-cliffs — Q1 2024 Earnings Presentation
17 slides from Cleveland-cliffs's earnings presentation, Apr 23, 2024
Slide 1: First-Quarter 2024 Earnings Presentation
First-Quarter 2024 Earnings Presentation © 2024 Cleveland-Cliffs Inc. All Rights Reserved.
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains statements that constitute "forward-looking statements" within the meaning of the federal securities laws. All statements other than historical facts, including, without limitation, statements regarding our current expectations, estimates and pro
Slide 3: Q1 2024 Highlights
Q1 2024 HIGHLIGHTS 70% Adjusted EBITDA growth year-over-year and 48% growth quarter-over-quarter $5.2 billion Revenues 3.9 million tons Steel Shipments $414 million Adjusted EBITDA1 $608 million Share Repurchases $1.5 billion New Share Repurchase Authorization $575 million Potential Department of En
Slide 4: Q1 2024 End Market and Product Overview
Q1 2024 END MARKET AND PRODUCT OVERVIEW 11% 12% Slab, Rail, Other Steel Producers 31% 32% Direct 5% Coated Automotive Plate (primarily End galvanized) Product Market 28% Mix Infrastructure & Mix Manufacturing 32% Hot-Rolled 17% Cold-Rolled 28% Distributors & 4% Converters Stainless & Electrical High
Slide 5: Results Trend
RESULTS TREND Steelmaking External Sales Volumes Adjusted EBITDA1 Service center $775 buyers strike – expected to rebound 4,202 in Q2 2024 4,106 $614 4,085 4,039 Net Tons (Thousands) 3,940 $414 Millions $279 $243 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Steelma
Slide 6: Leverage Ratio Target
LEVERAGE RATIO TARGET Historical Net Debt / Adjusted EBITDA1 Target to keep Net Debt below 2.5x TTM Adjusted EBITDA 15.0x Any M&A situation would be limited to pro- forma leverage of 2.5x Flexibility to execute strategic, operational and financial opportunities 7.5x Ability to continue to retu
Slide 7: Commitment to Capital Returns
COMMITMENT TO CAPITAL RETURNS Weighted Average Diluted Share Count Since implementation of previous repurchase program 532 526 519 516 515 514 In Million Shares 509 505 492 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Announced New $1.5 Billion Share Repurchase Program on
Slide 8: Reduction of Secured Debt
REDUCTION OF SECURED DEBT Capital Structure Evolution (in millions) $5,595 $5,369 $1,872 Unsecured $4,306 $2,308 Unsecured $3,719 $1,613 Unsecured $1,510 ABL $1,609 ABL $3,188 $1,864 $1,864 Unsecured ABL ABL $2,213 Secured $1,452 Secured $829 $531 Secured ABL1 2020 2021 2022 Current © 2024 Cleveland
Slide 9: Automotive Strength
AUTOMOTIVE STRENGTH Q1 2024 automotive shipments exceeded Q4 2023 Higher Successful proactive diversification of customer base Shipments Helped to offset weaker service center demand 2024 North American light vehicle production projected at highest level since 2019 Strong U.S. light vehicle sales ex
Slide 10: Average Emissions Intensity of Cliffs' Integrated Mills (Scope 1 & 2)
AVERAGE EMISSIONS INTENSITY OF CLIFFS’ INTEGRATED MILLS (SCOPE 1 & 2) 2023 1.54Highlights 2023 2.15(1) Global Average 2022 1.60 2021 1.67 2020 1.82 Metric tons CO2e / metric ton crude steel 2023 BF-BOF greenhouse gas emissions intensity is 28% better than the global average Source: (1)CRU as of 2/22
Slide 11: Leading the Way in Decarbonization
LEADING THE WAY IN DECARBONIZATION Largest Intended Federal Decarbonization Award Recipient in U.S. History Two projects selected for award negotiations in Ohio and Pennsylvania Near zero GHG emissions with green hydrogen and clean electrical power source Expected to significantly reduce production
Slide 12: Middletown Works - DRI Plant and Electric Melting Furnaces
MIDDLETOWN WORKS - DRI PLANT AND ELECTRIC MELTING FURNACES Phase 1: Contract negotiations, engineering, permit preparation, initial site prep (1 year) Phase 2: Detailed design, approval of permits, site work (1 year) Phase 3: Construction and equipment installation. Fabrication and delivery of the D
Slide 13: Butler Works - Induction Reheat Furnaces
BUTLER WORKS - INDUCTION REHEAT FURNACES Would replace two existing natural gas fired slab reheat furnaces with four electrified Induction Slab Reheat Furnaces $100 NetCost Capital 1 $75 Award From D.O.E. $80 Annual Cost Savings (million) (million) (million) 2029 Lower Carbon Increased Expected Emis
Slide 14: D.O.E. Energy Efficiency Standards
D.O.E. ENERGY EFFICIENCY STANDARDS D.O.E. Rule Provides for Continued Utilization of GOES in Transformer Production D.O.E. acknowledged fundamental importance of Residential Transformers GOES Ensures our ability to continue producing GOES All of our existing customers will continue to require GOES i
Slide 15: 2024 Outlook Projections
2024 OUTLOOK PROJECTIONS Maintained all previously provided guidance Steel Shipments Steel Unit Costs 16.5 million net tons $30/t reduction from 2023 Adjusted EBITDA Capital Expenditures ~$500 million benefit from $675-$725 million cost reductions 15 © 2024 Cleveland-Cliffs Inc. All Rights Reserved.
Slide 16: © 2024 Cleveland-Cliffs Inc. All Rights Reserved.
© 2024 Cleveland-Cliffs Inc. All Rights Reserved.
Slide 17: Cleveland-Cliffs' Adjusted EBITDA Reconciliation
CLEVELAND-CLIFFS’ ADJUSTED EBITDA RECONCILIATION Three Months Ended March 31, December 31, September 30, June 30, March 31, ($ in millions) 2024 2023 2023 2023 2023 Net income (loss) $(53) $(139) $275 $356 $(42) Less: Interest expense, net (64) (63) (70) (79) (77) Income tax benefit (expense) 8 (30)