SSab AB Class A · OMXSTO:SSAB_A
SSab AB Class A — Q3 2021 Earnings Presentation
32 slides from SSab AB Class A's earnings presentation, Oct 25, 2021
Slide 1: Presentation of the Q3/2021 results
Presentation of the Q3/2021 results Martin Lindqvist, President & CEO Håkan Folin, CFO Oct 25, 2021
Slide 2: Agenda
Agenda ►Q3/2021 in brief ►Financials Nytt foto ►Outlook and summary ►Q&A 2
Slide 3: Q3/2021 in brief
Q3/2021 in brief 3
Slide 4: Another record quarter for SSAB
Another record quarter for SSAB Solid internal performance in a strong market Improved safety performance SSAB Special Steels growth 6.1 320 348 4.7 299 4.0 259 Shipments 1.9 (ktonnes) LTIF 18Q3 19Q3 20Q3 21Q3 18Q3 19Q3 20Q3 21Q3 Improved product mix, SSAB Europe Record high earnings 43% 5,800 36% 3
Slide 5: Leading force in the green transition
Leading force in the green transition Proven fossil-free value chain Foto Ox World’s first fossil-free plates rolled Fossil-free steel to Volvo Group – A number of new strategic in Oxelösund load carrier for mining and quarrying agreements 5
Slide 6: Operating profit by division – Record levels
Operating profit by division – Record levels SEK million 1,175 1,006 2,524 914 717 528 518 SSAB 1,512 450 469 SSAB 352 Special 758 Steels 347 Europe 34 66 0 83 -290 -480 -609 -566 -631 19Q1 19Q2 19Q3 19Q4 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 21Q3 19Q1 19Q2 19Q3 19Q4 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 21Q3 1,871
Slide 7: SSAB Special Steels
SSAB Special Steels High level of shipments and earnings Operating profit/loss, SEK million ► Strong underlying demand – planned 1,175 maintenance and seasonal slowdown in 717 914 1,006 Europe in Q3 528 352 450 469 518 34 ► Shipments at 348 ktonnes – record for a Q3 − Up 34% vs. Q3/20 but -10% vs. Q
Slide 8: SSAB Europe
SSAB Europe Strong market conditions, seasonal slowdown in Q3 Operating profit/loss, SEK million 2,524 ► Higher share of premium 1,512 − Shipments up 6% vs. Q3/20 but -19% vs. Q2/21 758 347 − Premium share of 43% YTD and 45% in Q3 66 0 83 -480 -609 -566 -631 19Q1 19Q2 19Q3 19Q4 20Q1 20Q2 20Q3 20Q4 2
Slide 9: SSAB Americas
SSAB Americas Significantly higher prices Operating profit/loss, SEK million 1,871 ► Controlled order intake enables good price 1,084 realization 917 888 528 115 258 6 18 ► Good demand, higher shipments -58 -395 − Up 5% vs. Q3/20 but down 2% vs. Q2/21 19Q1 19Q2 19Q3 19Q4 20Q1 20Q2 20Q3 20Q4 21Q1 21Q
Slide 10: Tibnor
Tibnor Another strong quarter, despite seasonal slowdown Operating profit/loss, SEK million ► Competitive position improved significantly 449 515 through completed efficiency program – SEK 200m on annual basis 218 38 29 29 48 2 12 6 ► Revenue was up by 75% vs. Q3/20 -39 19Q1 19Q2 19Q3 19Q4 20Q1 20Q2
Slide 11: Ruukki Construction
Ruukki Construction Continued improvement of operating profit Operating profit/loss, SEK million ► Solid performance with full focus on product business 229 145 162 134 95 ► Revenue increased by 27% vs. Q3/20 67 86 72 48 11 -14 ► EBIT improved to SEK 229m (145m), EBIT 19Q1 19Q2 19Q3 19Q4 20Q1 20Q2 2
Slide 12: Financials
Financials 12
Slide 13: Strong earnings despite planned maintenance and seasonality
Strong earnings despite planned maintenance and seasonality Sales Shipments1 30,000 2,000 25,000 1,500 SEK million 20,000 ktons 1,000 15,000 10,000 500 5,000 0 0 21Q1 18Q1 18Q2 18Q3 18Q4 19Q1 19Q2 19Q3 19Q4 20Q1 20Q2 20Q3 20Q4 21Q2 21Q3 19Q3 18Q1 18Q2 18Q3 18Q4 19Q1 19Q2 19Q4 20Q1 20Q2 20Q3 20Q4 21Q
Slide 14: Change in operating profit Q3/21 vs. Q3/20
Change in operating profit Q3/21 vs. Q3/20 SEKm Higher raw Mainly SSAB Mainly Special material cost Europe and Steels SSAB Americas 590 -2,150 5,800 -850 -120 58 585 8,660 Higher activity level -973 2020 Q3 Price Volume Var COGS Fixed costs FX Capacity Other 2021 Q3 utilization 14
Slide 15: Change in operating profit Q3/21 vs. Q2/21
Change in operating profit Q3/21 vs. Q2/21 SEKm Mainly SSAB Europe and Mainly SSAB SSAB Americas Europe Higher raw material cost -790 Planned maintenance -1,510 -45 4,680 -30 -620 5,800 32 Effect from vacation 4,083 reserve counteracted by higher performance related wages 2021 Q2 Price Volume Var CO
Slide 16: Strong net cash flow
Strong net cash flow 2021 2020 2021 2020 2020 SEK millions Q3 Q3 Jan-Sep Jan-Sep Full-year Operating profit before depreciation/amortization 6,582 -66 14,341 1,925 3,364 Change in working capital -2,693 699 -4,458 -465 1,570 Maintenance expenditures -461 -332 -1,030 -1,016 -1,622 Other 49 11 -35 87
Slide 17: Significant reduction in net debt
Significant reduction in net debt 25,000 60 ►Net debt decreased to SEK 3.4bn (12.9bn) at the end of Q3/21 20,000 50 40 15,000 ►Net gearing was 5% (22%) 30 10,000 20 ►2015-2017 excluding IFRS 16 (impact of 5,000 10 around SEK 2bn) 0 0 2015 2016 2017 2018 2019 2020 2021 Q3 Net interest bearing debt, S
Slide 18: Well-balanced maturity profile
Well-balanced maturity profile Maturity profile Q3/2021 ►Duration of the loan portfolio was 6.7 (4.9) SEKm years 20,000 ►Liquid assets and committed credit lines at 18,000 16,000 SEK 18.1bn – corresponds to 21% of rolling 14,000 Back-up 12-month revenue 12,000 facilities 10,000 ►Most maturities in 2
Slide 19: Cash needs of the business
Cash needs of the business ►Total cash needs* estimated at SEK 4.8-5.3bn in 2021 – unchanged compared to previous 4.8-5.3 forecast ►Higher strategic capex vs. 2020: 3.0-3.5 − Capacity expansion of Q&T in Mobile 2.8 − Start of Oxelösund conversion ►Interest paid expected to be relatively stable Capex
Slide 20: Higher purchase prices for iron ore and coking coal
Higher purchase prices for iron ore and coking coal Iron ore SSAB’s purchase price, coking coal and iron ore ► Average pellet purchase price in Q3/21 was 13% higher in terms of SEK (+9% in Indexed USD) vs. Q2/21 300 250 200 150 Coking coal 100 ►Average coking coal purchase price in 50 Q3/21 was 34%
Slide 21: Scrap spot prices stable
Scrap spot prices stable ►SSAB’s average purchase price for scrap Scrap spot price in Q3/21 was 1% higher (in terms of USD/gross ton USD) vs. Q2/21 500 450 400 ►Slight decrease in October 350 300 250 200 150 100 50 0 AMM Chicago #1HM Source: AMM 21
Slide 22: Major planned maintenance outages in 2021
Major planned maintenance outages in 2021 ► Total maintenance costs for 2021 expected to be SEK 1,265m ► As of Q3/21, Mobile is part of SSAB Special Steels and maintenance cost will be shared between SSAB Special Steels and SSAB Americas ► Costs in 2020 were lower than normal – more use of our own r
Slide 23: Outlook and summary
Outlook and summary 23
Slide 24: SSAB's outlook for main customer segments Q4/2021
SSAB’s outlook for main customer segments Q4/2021 Segment Demand Comments Good Healthy Weak Outlook for Q1 for SSAB’s key customer segments Heavy Transport Heavy truck production impacted by shortage of semi-conductors Improvement in rail car in the US Good end-user demand – shortage of semi-c
Slide 25: SSAB's outlook for Q4/2021
SSAB’s outlook for Q4/2021 Volume and pricing outlook ►Demand for steel is estimated to be good, however, in Europe demand is expected to be Q4 2021 vs. Q3 2021 impacted by semiconductor shortage and seasonal slowdown towards the end of the year Shipments Realized prices − Global demand for high-str
Slide 26: Summary
Summary ►Solid internal performance in a strong market ►Record earnings ►Continued strong cash flow generation ►Significant reduction in net debt ►Leading position in fossil-free steel − First steel rolled in Oxelösund − Shipments to Volvo Group − Proven fossil-free value chain 26
Slide 27: Questions & Answers
Questions & Answers 27
Slide 28: Appendix
Appendix 28
Slide 29: Order intake
Order intake SSAB Europe, monthly order intake, tonnes ► Q4/21 is expected to be fully booked 400,000 ► Some uncertainty regarding the impact of 350,000 component shortages and the extent of the seasonal slowdown 300,000 250,000 200,000 150,000 100,000 50,000 0 Apr-20 Oct-20 Apr-21 Feb-21 Jul-20 Aug
Slide 30: Debt portfolio duration and interest rate
Debt portfolio duration and interest rate Debt cost and duration ►Duration of the loan portfolio was 6.7 (4.9) years Years % ►Averaged fixed interest term was 1.2 (0.9) 8.0 4.00 years 7.0 3.50 ►Average interest rate was 2.17% (1.85%) 6.0 3.00 5.0 2.50 4.0 2.00 3.0 1.50 2.0 1.00 1.0 0.50 0.0 0.00 201
Slide 31: SSAB's climate goals approved by the Science Based Targets initiative
SSAB's climate goals approved by the Science Based Targets initiative ►SSAB is committed to reducing its greenhouse gas (CO2e) emissions by 35% by 2032 (based on 2018 figures). − The goal applies to both direct and indirect emissions (Scope 1 and 2) − In line with the objective of keeping global war
Slide 32: A stronger, lighter and more sustainable world
A stronger, lighter and more sustainable world