United States Steel Corporation · NYSE:X
United States Steel — Q3 2020 Earnings Presentation
32 slides from United States Steel's earnings presentation, Oct 29, 2020
Slide 1: Third Quarter 2020 Earnings Presentation
Third Quarter 2020 Earnings Presentation October 29, 2020 www.ussteel.com Advanced high strength steel for customer light weighting
Slide 2: Forward-looking Statements
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 for the third quarter of 2020. They should be read in conjunction with the consolidated financial statements
Slide 3: Explanation of Use of Non-GAAP Measures
Explanation of Use of Non-GAAP Measures 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 enhan
Slide 4: "Best of Both" Strategy Execution Update
“BEST OF BOTH” STRATEGY EXECUTION UPDATE Electric arc furnace at Fairfield Tubular
Slide 5: "Best of Both" strategy executing on key strategic actions
“Best of Both” strategy executing on key strategic actions World competitive positioning in strategic, high-margin end markets Unparalleled product platform to serve 1 customers Big River will unlock value across our entire footprint1 Transforms business to drive long term cash flow through in
Slide 6: Successful start-up of the Fairfield EAF
“Best of Both” strategy successful start-up of the Fairfield EAF Insourcing EAF to supply rounds the substrate for production seamless pipe Expected cost savings per ton of $90 seamless pipe / ton produced Able to be more Electric Arc Furnace Agile responsive and at Fairfield Tubular production agil
Slide 7: "Best of Both" strategy executing in an unprecedented environment
“Best of Both” strategy executing in an unprecedented environment Objective: Status: Details: Protect lives and Industry leading livelihoods safety performance Strengthen cash Nearly $2.9 billion liquidity and liquidity and nearly $1.7 billion in cash Monetized excess iron ore Create incremental
Slide 8: Big River Steel: Year Anniversary
BIG RIVER STEEL: 1 YEAR ANNIVERSARY
Slide 9: Big River Steel delivering on the value proposition
Big River Steel delivering on the value proposition Delivering on the Step-1 value proposition: Combining U. S. Steel R&D and Big River technology to The product qualities The U. S. Steel grades expand product capabilities wewe have have successfully achieved for customers workingproduced closely
Slide 10: Big River Steel delivering on the value proposition: proof points
Big River Steel delivering on the value proposition Proof points of value creation: 11 1 ~2 Steel grades1 Only LEED certified Months ahead of steel production globally2 schedule Collaborating on steel Positioned to ultimately Superior project grades, including substrate meet customers’ management an
Slide 11: Big River Steel doubling capacity and enhancing efficiencies
Big River Steel doubling capacity and enhancing efficiencies Doubling steelmaking capacity from 1.65mnt to 3.3mnt1 Only adding ~100 more employees to create significant operating leverage First Phase Two coil expected in November 2020 1 mnt = million net tons; annual steelmaking capacity. 11
Slide 12: Business Update
BUSINESS UPDATE
Slide 13: Supporting improved customer demand visibility into 2021
Supporting improved customer demand visibility into 2021 Our automotive order book is strong and auto production should Automotive remain high. Vehicle sales are expected to increase a 6th straight month and inventories are at a low 50 days (year ago = 66 days). Construction remains resilient. Custo
Slide 14: Supporting improved customer demand: sustainable market conditions
Supporting improved customer demand sustainable market conditions Strong customer demand and low The reasons customer inventories we are confident Inventory restocks expected to support winter steel demand Long lead times give us visibility into 2021 14
Slide 15: Supporting improved customer demand informed by our order book
Supporting improved customer demand informed by our order book Operating Idled Indefinitely Idled Total Idled Capacity1 Iron ore pellets Minntac Keetac2 6.02 22.4 rolled Clairton cokemaking Extended coking times – 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 Great L
Slide 16: "Best of Both" strategy strategic projects status
“Best of Both” strategy strategic projects status Strategic Projects Status Details First arc in October. EAF to supply EAF at Tubular rounds for our seamless pipe production. Purchasing equipment and expect to Endless Casting and draw on our export credit agreement in Rolling at Mon Valley Status
Slide 17: Third Quarter Update
THIRD QUARTER UPDATE
Slide 18: Protecting lives and livelihoods: industry leading safety performance
Protecting lives and livelihoods continued industry leading safety performance Safety First 2 Benchmarks : BLS - Iron & Steel: 0.70 0.14 0.10 0.08 2018 2019 2020 YTD Days Away from Work1 1 Days Away from Work is defined as number of days away cases x 200,000 / hours worked. 18 2 BLS – Iron & Steel 2
Slide 19: Third quarter 2020 financial highlights
Third quarter 2020 financial highlights Reported Net (Loss) Earnings $ Millions Adjusted Net (Loss) Earnings $ Millions ($84) ($35) ($109) ($123) ($234) ($391) ($268) ($589) ($680) ($469) 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 Adjusted Profit (3%) (24%) (14%)
Slide 20: Flat-rolled segment
Flat-rolled segment Key Segment Statistics Segment EBITDA $ Millions $167 3Q 4Q 1Q 2Q 3Q $86 $42 2019 2019 2020 2020 2020 Shipments: 2,654 2,517 2,509 1,790 2,155 ($33) in 000s, net tons Production: 2,783 2,567 3,148 1,468 2,207 ($203) in 000s, net tons 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 Averag
Slide 21: U. S. Steel Europe segment
U. S. Steel Europe segment Key Segment Statistics Segment EBITDA $ Millions $39 3Q 4Q 1Q 2Q 3Q 2019 2019 2020 2020 2020 $9 Shipments: 765 757 801 610 790 in 000s, net tons ($7) ($3) Production: 823 773 882 645 873 ($23) in 000s, net tons 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 Average Selling Price
Slide 22: Tubular segment
Tubular segment Key Segment Statistics Segment EBITDA $ Millions 3Q 4Q 1Q 2Q 3Q 2019 2019 2020 2020 2020 ($14) Shipments: 174 193 187 132 71 in 000s, net tons ($34) ($35) Average Selling Price ($40) $1,417 $1,298 $1,283 $1,288 $1,230 ($44) $ / net ton 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 EBITDA M
Slide 23: Cash and liquidity
Cash and liquidity Cash from Operations $ Millions Cash and Cash Equivalents $ Millions $938 $1,696 $826 $1,515 $1,553 $754 $682 $1,000 $749 ($149) YE 2016 YE 2017 YE 2018 YE 2019 9M 2020 YE 2016 YE 2017 YE 2018 YE 2019 9M 2020 Total Estimated Liquidity $ Millions Net Debt $ Millions $3,350 $3,194 $
Slide 24: Improved liquidity position
Improved liquidity position Liquidity 2Q 2020 vs 3Q 2020 in millions Cash from Operations: $213 U.S. $2B Credit Facility Repayment: (989) Capital Spending: (136) Financing: 260 Other 48 TOTAL: ($604) $7 ($7) ($604) $816 $2,652 $2,864 2Q Cash and U.S. $2.0 billion USSK UPI Amended 3Q 2020 Cash Credit
Slide 25: Appendix
APPENDIX
Slide 26: Third quarter segment EBITDA bridges
Third quarter segment EBITDA bridges 2Q 2020 vs 3Q 2020 Flat-rolled $ Millions ($33) Commercial: The favorable impact is primarily the result of $28 increased volume and favorable mix. $32 ($203) $11 Raw Materials: The favorable impact is primarily the result of lower $99 blast furnace fuel costs as
Slide 27: Total corporation adjusted EBITDA bridges
Total corporation adjusted EBITDA bridges 3Q 2019 vs 3Q 2020 $ Millions 3Q 2019 vs 3Q 2020 $ Millions $144 $144 ($327) ($49) ($200) $21 $51 ($30) $62 $62 ($25) ($49) 3Q Commercial Raw Maintenance Other 3Q 3Q Flat- U. S. Steel Tubular Other 3Q 2019 Materials & Outage 2020 2019 rolled Europe 2020 2Q 2
Slide 28: Reconciliation of segment EBITDA
Reconciliation of segment EBITDA Flat-rolled ($millions) 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 Segment (loss) earnings before interest and income taxes $46 ($79) ($35) ($329) ($159) Depreciation 121 121 121 126 126 Flat-rolled Segment EBITDA $167 $42 $86 ($203) ($33) U. S. Steel Europe ($ millions
Slide 29: Reconciliation of net debt
Reconciliation of net debt Net Debt YE 2016 YE 2017 YE 2018 YE 2019 9M 2020 ($ millions) Short-term debt and current maturities of long-term $50 $3 $65 $14 $262 debt Long-term debt, less unamortized discount and debt 2,981 2,700 2,316 3,627 4,628 issuance costs Total Debt $3,031 $2,703 $2,381 $3,641
Slide 30: Reconciliation of reported and adjusted net earnings
Reconciliation of reported and adjusted net earnings ($ millions) 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 Reported net (loss) earnings attributable to U. S. Steel ($84) ($680) ($391) ($589) ($234) Asset impairment charges ─ ─ 263 ─ ─ Restructuring and other charges 42 221 41 82 ─ Gain on previously
Slide 31: Reconciliation of adjusted EBITDA
Reconciliation of adjusted EBITDA ($ millions) 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 Reported net (loss) earnings attributable to U. S. Steel ($84) ($680) ($391) ($589) ($234) Income tax provision (benefit) (44) 233 (19) (5) (24) Net interest and other financial costs 48 71 35 62 47 Reported (loss
Slide 32: 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