Ssab Ab Class A · OMXSTO:SSAB_A
Ssab Ab Class A — Investor Day (March 2023)
168 slides from Ssab Ab Class A's investor day presentation, Mar 28, 2023
Slide 1: Agenda – SSAB Capital Markets Day 2023
Agenda – SSAB Capital Markets Day 2023 Introduction • Transforming the future of steel Martin Lindqvist, President & CEO • Steel industry outlook Viktor Strömberg, EVP Strategy & Digitalization Divisions • Global leader in high-strength steels Johnny Sjöström, EVP SSAB Special Steels • Nordic leader
Slide 2: Transforming the future of steel
Transforming the future of steel Martin Lindqvist, President and CEO 2
Slide 3: Introduction to SSAB
Introduction to SSAB SSAB
Slide 4: SSAB’s positions of strength
SSAB’s positions of strength Global leader in Leading the green Nordic US plate market high strength steels steel transition market leader leader 3.0 Mt Q&T and Premium 500 Fossil-free t 40 % Market share 30 % Market share pilot shipments in the Nordics in the US, plate 4
Slide 5: Profitable industry leader
Profitable industry leader Solid earnings Strong balance sheet Adjusted EBITDA (SEK bn) Net cash position (SEK bn) 32.7 14.3 22.1 2.3 7.6 9.0 -11.6 -10.5 -12.0 -10.3 5.0 6.4 3.7 3.4 -17.9 -23.2 -15 -16 -17 -18 -19 -20 -21 -22 -15 -16 -17 -18 -19 -20 -21 -22 5
Slide 6: Well on our way to safety leadership
Well on our way to safety leadership 6.9 6.7 “Become the 6.3 6.1 safest steel 5.6 company” 4.2 3.5 1.8 1.1 0.9 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 YTD LTIF, Lost Time Injury Frequency 6
Slide 7: A more resilient SSAB
Amore resilient SSAB SSAB
Slide 8: Focus areas in recent years – a more resilient SSAB
Focus areas in recent years – a more resilient SSAB Continuous Mix Channel Structural improvements improvement development synergies (SSAB One) 8
Slide 9: Product mix close to 50% specialty/premium
Product mix close to 50% specialty/premium Average gross margin SSAB portfolio mix development 2016-2022 (indexed) Volatility (illustrative) Special Premium Standard 52% 100 64% 26% 120 21% 22% 200 15% 2016 2017 2018 2019 2020 2021 2022 9
Slide 10: Less volatile business portfolio - examples
Less volatile business portfolio - examples Standard coils to continental Europe North American sales to Steel Service Centers SSAB Europe, standard HR coils outside Nordic, Mt SSAB Americas, sales to Steel Service Centers, Mt -50% -17% 0.4 1.2 1.0 0.2 2016 2022 2016 2022 10
Slide 11: Structural improvements since 2015
Structural improvements since 2015 SSAB Europe mix combined with SEK >5bn better EBIT growth in SSAB Special Steels Restructuring of >1.5 Tibnor and Ruukki Construction, etc. 1.3 Structural effects from continuous 2.0 0.7 improvement program Synergies from Total acquisition of Rautaruukki 11
Slide 12: Taking the lead – our plan for the coming years
Taking the lead – our plan for the coming years 12
Slide 13: Our successful strategy continues
Our successful strategy continues Global leader in high- Nordic leader in Market leader North Develop channels to strength steels premium steels American plate the market 40% 30% Tibnor 3.0Mt Market share Market share, Ruukki Construction Q&T and Premium in the Nordics US plate SSAB Services Transfo
Slide 14: Transform SSAB to a fully sustainable steel portfolio
Transform SSAB to a fully sustainable steel portfolio FOSSIL-FREE HYBRIT STEEL Volume steel produced (ILLUSTRATIVE) Iron ore-based and fossil free SSAB ZERO Recycled scrap with no added emissions Iron ore-based as today Recycled scrap-based as today 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032
Slide 15: Launch of SSAB Zero
Launch of SSAB Zero − Zero carbon emission in operations. Third-party verified − Fossil-free electricity, biocarbon and biogas − No carbon emission offsetting or mass balancing allocation schemes 15
Slide 16: Zero-emission steel is a premium product
Zero-emission steel is a premium product Substantial premium for steel Value for end products far exceeds the cost EUR/car +1% ~40,000 ~40,450 Zero steel − SSAB estimates that the gross premium on steels with almost zero fossil CO2e emissions will be around EUR 300/tonne Price of typical Car with ze
Slide 17: Transformation of Nordic mills
Transformation of Nordic mills 17
Slide 18: Step-wise transformation plan until 2030
Step-wise transformation plan until 2030 1 2 3 4 Zero Steel Oxelösund EAF 1st Mini-Mill 2nd Mini-Mill • Produce Zero steel • Replace current • First mini-mill • Second mini-mill in Iowa, USA blast furnaces and operational – either operational – either • Fossil-free pilot coke plant Luleå or Raahe Lu
Slide 19: Future footprint - efficient mini-mills and EAFs
Future footprint - efficient mini-mills and EAFs Luleå mini-mill Raahe mini-mill Picture of mill Picture of mill 19
Slide 20: Several benefits from transformation to mini-mills
Several benefits from transformation to mini-mills Modelling indicate ~12% lower total cost per tonne after 2030 given current commodity forecasts, including CO2 -12% Reduce the fixed cost per ton with ~50%, enabling a much more flexible cost base moving with the business cycle -50% Total capacity s
Slide 21: HYBRIT – key to flexibility and fossil-free value chain
HYBRIT – key to flexibility and fossil-free value chain − Planning for demonstration plant with a capacity of 1.3 million tonnes of fossil-free sponge iron − The JV, Hybrit Development AB, owns the intellectual property rights to the technology − Partners have the option to build own DRI plants − Up
Slide 22: What we need outside of our own control
What we need outside of our own control Oxelösund Luleå Raahe Permits to change to Environmental more environmentally permits friendly production Grid New power lines to connections connect to main grid Need ~4.5 TWh more Electricity (excluding Hybrit) Level playing EU competition receiving billions
Slide 23: Industry-leading profitability
Industry-leading profitability 23
Slide 24: Fundamentals for industry-leading profitability
Fundamentals for industry-leading profitability Financing transformation capex + dividend Healthier over the cycle profitability + Significant transformation benefits SSAB EBITDA (Adj. SEK bn) Transformation benefits >2030 (SEK bn) 32.7 TBD >10 22.1 ~3.6 ~5.0 7.6 9.0 6.4 Ø 10.4 3.7 3.7 5.0 3.4 Net c
Slide 25: SSAB financial targets
SSAB financial targets Profitability Capital structure Dividend Industry-leading Net gearing ratio between -20% EBITDA margin compared to 40% of profit after tax to 20%. (Net Debt to Equity) peers* Unchanged Updated Updated Before determining the yearly dividend proposals and capital structure adjus
Slide 26: Summary
Summary SSAB
Slide 27: Summary
Summary Better cost position and 2/3 of Leading the green transition volume premium/high-strength SSAB’s strategic reduces volatility and lifts low- direction continues Superior zero-emission steel offering point profit Global leader in high- All mills in favorable position for transformation to fos
Slide 28: SSAB
SSAB
Slide 29: A healthy steel industry landscape
A healthy steel industry landscape Viktor Strömberg EVP and Head of Strategy and Digitalization 29
Slide 30: Healthier steel industry fundamentals
Healthier steel industry fundamentals Demand – Decent outlook Capacity – Balanced capacity globally, especially for high- utilization with CO2 costs strength and low-CO2 steel restricting European output Positive steel industry context for SSAB Trade – Regionalization Raw mtrl – Easing raw material
Slide 31: World steel demand at all-time high
World steel demand at all-time high Apparent steel demand, Mt 2,000 Europe CIS 1,500 USMCA Central & South America Africa Middle East 1,000 Other Asia & Oceania China 500 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022f 2023f 31 Source: Worldsteel
Slide 32: Global capacity utilization at healthy levels again
Global capacity utilization at healthy levels again Global production and capacity balance, million tonnes,% World crude steel production World crude steel capacity Global capacity utlization 2,500 90% 85 2,250 80 78 77 80 77 2,000 74 75 72 1,750 68 68 69 70 67 67 68 65 65 1,500 60 1,250 55 1,000 50
Slide 33: China developments supporting global fundamentals
China developments supporting global fundamentals China steelmaking capacity, China industry structure, China net trade balance million tonnes Production of top-10, million tonnes million tonnes -14% 1,215 -61% +58% +98 1,050 436 276 +38 2015 Today 2015 Today 2015 Today 33
Slide 34: Healthier fundamentals in Europe
Healthier fundamentals in Europe EU+UK apparent steel demand, EU+UK crude steel capacity, million tonnes million tonnes +10% -11% 159 254 154 145 226 226 2010 2015 2022F 2010 2015 2022F 34
Slide 35: Termination of free emissions is a game changer
Termination of free emissions is a game changer Free ETS allocation, % of benchmark 98% 95% • New Directive negotiated between 90% European commission and Parliament 78% • Directive coupled with CBAM regulation to avoid leakage to imports 52% • With a potential ETS price of EUR 100/t the cost for EU
Slide 36: CO2 policy leads to a steeper cost curve in Europe
CO2 policy leads to a steeper cost curve in Europe Cash cost for typical EU BF producer Industry cost curve 2023 (EUR/tonnes) Marginal cost/tonne ILLUSTRATIVE 640 595 Supply Marginal cost/tonne CO2 cost 35 190 Variable costs 450 450 Fixed costs 110 n/a Cumulative industry capacity Average all volume
Slide 37: Everybody running to decarbonize steel
Everybody running to decarbonize steel – hydrogen seen by more and more as the solution Carbon Capture and Storage Natural gas direct reduction Hydrogen direct reduction Option (CCS) (NG-DRI) (H-DRI) No change to current Pros steelmaking process Technically mature process Maximum reduction of CO2 Ex
Slide 38: SSAB
SSAB
Slide 39: Global leader in high-strength steels
Global leader in high-strength steels Johnny Sjöström EVP SSAB Special Steels 39
Slide 40: SSAB Special steels in brief
SSAB Special steels in brief ~34 6-8% >75% SEK bn in CAGR over of sales Q&T Oxelösund sales 2022 time material Mobile Key segments Trailer & body Raw builders material handling Yellow Lifting goods +4,100 +150 +90 Professionals Countries with sales Local stocks Recycling 40
Slide 41: SSAB Special Steels fundamental to overall Group strategy
SSAB Special Steels fundamental to overall Group strategy Developing channels to Market leadership Product mix improvement market Green transition 41
Slide 42: Introduction
Introduction SSAB
Slide 43: 2021 and 2022 – two strong years
2021 and 2022 – two strong years Revenue Shipments SEK bn ktonnes 33.7 1,462 1,419 1,298 1,268 1,192 1,127 23.5 937 1,008 18.9 18.5 14.4 16.1 16.1 12.6 2015 2016 2017 2018 2019 2020 2021 2022 2015 2016 2017 2018 2019 2020 2021 2022 EBITDA EBITDA per tonne delivered steel SEK bn SEK 9.3 6,568 5.6 3,8
Slide 44: Global market leadership in Q&T
Global market leadership in Q&T 44
Slide 45: Strong Q&T portfolio and building presence in additive manufacturing
Strong Q&T portfolio and building presence in additive manufacturing Wear QT Structural QT Protection QT Tooling QT Additive Powder Key segments: Key segments: Key segments: Key segments: Key segments: Truck & body builder Lifting Civil Tooling Tooling Material handling Forestry Military Engineering
Slide 46: Q&T Wear market analysis
SSAB sales Others Q&T Wear market analysis 7% Structural 34% 59% Wear Global market 2006 Global market 2021 Market by region 2021 ~2,100 KTON 700 KTON 800 KTON SSAB 40% 565 KTON 21% SSAB 38% Algoma 380 KTON 59% Cleveland SSAB 53% Dillinger Thyssen 145 140 57% 53% N. America S. America Europe M.E. &
Slide 47: Unique properties supporting our concept “stronger and lighter”
Unique properties supporting our concept “stronger and lighter” Typical impact toughness J/-40C Hardox C1 C2 C3 C4 (C = chosen competitor) 50 Hardox 450 Hardox 400 Hardox 500Tuf - Unique properties compared to many 40 Hardox 500 competitors Hardox 550 30 - Supporting our “stronger lighter” concept H
Slide 48: Unique business model
Unique business model SSAB
Slide 49: Global sales through all channels – difficult model to copy
Global sales through all channels – difficult model to copy Differentiation: multiple segments in multiple industries Fragmentation: >11,000 customers, majority small – mid-sized and not large OEMs. >80% of customers <100 tonnes Reach: sales in more than 130 countries with +90 stock locations Awaren
Slide 50: Dedicated downstream business unit to drive value added
Dedicated downstream business unit to drive value added Downstream should support the climb on the “value Example of solution added ladder” 25 tonnes Hardox 500TUF… SEK/tonne X5 in value added …processed and welded XMOR tray 50
Slide 51: Upgrading with new products and designs
Upgrading with new products and designs – optimizing customer productivity CO2 reduction 1990-2000 2000-2010 2020-2030 (2000-2022) Steel grade Hardox 400 Hardox 400 CO2 saved: used 700 Material Hardox 450 Hardox 500TUF 3.4 Mt Design Classic box shape U-shape being U-shape CO2 fuel saved: concept wit
Slide 52: Growth strategy
Growth strategy SSAB
Slide 53: Successfully outpaced the market with a ~6-8% CAGR
Successfully outpaced the market with a ~6-8% CAGR SSAB Special Steels shipments 1.5 1.4 1.3 1.2 1.2 1.1 1.0 0.9 0.8 0.6 0.3 2000 2005 2010 2015 2016 2017 2018 2019 2020 2021 2022 Special Steels division formally created 2015 53
Slide 54: Production capacity at four mills – a total of nine Q&T lines
Production capacity at four mills – a total of nine Q&T lines Raahe Borlänge QL8 – Basic line for mid-segment plate products (2007) QL7 – High-end line for strip products (2010) QL9 – Basic line for mid-segment strip products (1990) Mobile QL5 – High-end line for mid-segment products (2005) Oxelösun
Slide 55: SSAB Special Steels’ outlook
SSAB Special Steels’ outlook Long-term growth target Grow 80-100Kt per year >2.2 Mt 1.8 2.2 in shipments 2030 1.4 ~80% Q&T material 2022 2025 plan 2030 plan 55
Slide 56: SSAB
SSAB
Slide 57: Nordic leader in premium steels
Nordic leader in premium steels Olavi Huhtala EVP and Head of SSAB Europe 57
Slide 58: Strong contribution to overall Group strategy
Strong contribution to overall Group strategy Product mix Developing channels to Market leadership Green transition improvement market − Strengthening the − Growth in Premium and − Synergies with Tibnor and − Transforming the Nordic position on SSAB’s Automotive AHSS Ruukki Construction strip system
Slide 59: Introduction
Introduction SSAB
Slide 60: SSAB Europe in brief
SSAB Europe in brief 50.1 Annual steel BILLION production capacity: annual net sales in 2022 SEK 4.9 MILLION TONNES Steel offering 6,700 Professionals Core Segments Tubes & Profiles, Piles, Sections Other* Industrial applications 5% Automotive 8% Hot-rolled Strip 13% 21% Coated products Heavy transp
Slide 61: Record earnings in volatile market conditions
Record earnings in volatile market conditions SSAB Europe, EBITDA, SEK bn. − Outbreak of Covid-19 10.2 stopped activity in the 9.6 first half of 2020 − Rapid turnaround in 4.4 4.2 demand late in 2020, successful ramp-up 1.3 1.5 0.9 0.6 and record earnings 2015 2016 2017 2018 2019 2020 2021 2022 − Hi
Slide 62: High earnings compared to peers
High earnings EBITDA-margin vs. peers 2015-2022 compared to % peers 25 #1 20 − Positive underlying earnings trend – focus on 15 reducing volatility − Improving product mix 10 − Continuous improvements – 5 better efficiency and flexibility 0 − Well balanced between various segments and -5 geographies
Slide 63: Nordic home market leader
No) ge |(om are)aals market leader SSAB
Slide 64: Nordic home market strategy
Nordic home market strategy 1. Trusted partner Nordic market U.S.Steel Kosice Dillinger 2. Broadest offering Voestalpine Liberty Steel Others NLMK Europe Salzgitter 3. Unbeatable logistics ThyssenKrupp Steel Market SSAB share (%)* TataSteel (Netherlands) 4. Most effective sales model ArcelorMittal S
Slide 65: Growth focus – Premium products
Growth focus – Premium products 65
Slide 66: Improving product mix
Improving product mix Share of premium and AHSS products (shipments) Indexed gross margin per tonne 43% 42% 600 Standard (Not premium, not branded, all product groups) 39% 38% 36% GreenCoat premium 500 32% 30% 400 25% 300 200 100 0 -100 2018 2019 2020 2021 2022 -15 -16 -17 -18 -19 -20 -21 -22 Quarte
Slide 67: Premium strategy – key success factors
Premium strategy – key success factors Example of investment Index 125 Continuous annealing capacity Strategic sales plan targeting growth 120 segments 115 110 105 100 Product development – often with 2016 2017 2018 2019 2020 2021 2022 advanced customers Example of efficiency improvement Growth base
Slide 68: Growth focus – Automotive AHSS
Growth focus – Automotive AHSS 68
Slide 69: Key driving forces for growth
Key driving forces for growth Solid fundamentals for mobility demand Need for weight reduction and better safety performance AHSS has a strong competitive position SSAB’s world leading product offering 69
Slide 70: Demand for AHSS expected to increase
Demand for AHSS expected to increase – Driven by weight reduction and better safety performance Million tonnes net weight used in light vehicle car bodies** 15.6 18.7 AHSS 12.1 including doors and closures produced Mild Steel 15.8 15.0 13.1 Others* 8.6 10.3 11.7 2022 2025 2030 Estimated net kg per O
Slide 71: High-strength steels with strong competitive position
High-strength steels with strong competitive position Steel has a lower carbon intensity than many other materials − Steel has well known properties − Relatively low cost 35 − 100% recyclable – steel is the most 30 max recycled material in the world 25 − Low carbon footprint grows in max importance
Slide 72: SSAB’s world-leading product offering
SSAB’s world-leading product offering Roof rail, several Ford models Seat cross members for Lower-control-arm, Toyota Yaris Prototype Door-beam Docol CR 1700M-UC battery protection, ID. Buzz Docol HR 1000CP-UC Docol CR 1700M-EG Docol CR PHS2000-UC 72
Slide 73: New growth targets
New growth targets Automotive AHSS Premium products ~1.4 ~1.2 ~1.0 ~0.9 0.8 0.5 2022 2025 plan 2030 plan 2022 2025 plan 2030 plan Million tonnes 73
Slide 74: Nordic market leader with improving product mix
Nordic market leader with improving product mix Strengthen the Nordic home Allocate more of the production Reduce shipments of standard market leadership capacity to premium and AHSS products outside of Nordics Share of shipments 35% 36% 32% Standard Home market 40% 9% 13% 23% Standard outside Nordi
Slide 75: SSAB
SSAB
Slide 76: Market leader North American plate
Market leader North American plate Chuck Schmitt EVP and Head of SSAB Americas 76
Slide 77: Strong contribution to overall Group strategy
Strong contribution to overall Group strategy Product mix Developing channels to Market leadership Green transition improvement market − Maintaining leading − Enable the launch of SSAB − Focus on end-user − Providing knowledge and position on SSAB’s Zero products segments and reduce experience in EA
Slide 78: Introduction
Introduction SSAB
Slide 79: # 1 in quality
Market-leading North American producer of quality steel plate and coil Annual steel 32.2 production capacity: BILLION SEK Annual net sales in 2022 600 2.0 MILLION TONNES Professionals Customer segments SSC Marine Construction SSC Trns Tower Construction Machinery SSC Wind 6% 2% 7% 3% 1% 38.8% EBITDA
Slide 80: Strong earnings
Strong earnings 12.5 SSAB Americas, 5.6 EBITDA, SEK bn 2.5 2.9 1.0 0.7 0.8 -0.1 2015 2016 2017 2018 2019 2020 2021 2022 USD/t 2,500 2,000 US heavy plate 1,500 price, monthly 1,000 500 0 jan-15 jan-16 jan-17 jan-18 jan-19 jan-20 jan-21 jan-22 jan-23 80
Slide 81: Industry leading margins
Industry leading margins − Focus on reducing EBITDA margin vs. peers volatility 50% − Reducing transactional exposure to Steel 40% Service Centers #1 30% − Premium offering – fossil free 20% 10% 0% 2015 2016 2017 2018 2019 2020 2021 2022 -10% SSAB Americas Best peer Worst peer Peer group: Cleveland
Slide 82: SSAB in best-in class cost position
SSAB in best-in class cost position − Modern EAF set-up − Continuous improvement to further strengthen productivity − Maintain competitive production shipping model − Flexible mini-mill operations close to customers − Optimize scrap mix – using lower grades where possible 82
Slide 83: Strong competitive position
Strong competitive position Examples from Jacobson Report 9.14 − Clear leader in 7.96 8.04 quality 7.05 − Focus on improving Customer Satisfaction Rating on-time delivery Overall Satisfaction Quality Service On Time SSAB Americas Nucor Cliffs Algoma 83
Slide 84: Favorable home market dynamics
Favorable home market dynamics 84
Slide 85: Key driving forces support US plate demand
Key driving forces support US plate demand - Balanced supply-demand despite new capacity Infrastructure Investments in energy Regionalized steel New local capacity spending production market from competitors − Extensive need for − Support from − Tariffs and quotas − Ramp up of new US rebuilding US I
Slide 86: Infrastructure bill elevates steel demand
Infrastructure bill elevates steel demand Total IIJA steel-containing $100 billion infrastructure investment: in infrastructure $850 billion spending 40-45 million net tons of steel products Reauthorization of existing = infrastructure trust funds: Of which, 5 million $393 billion 20-25 million net
Slide 87: More regionalized market – lower imports
More regionalized market – lower imports Imported cut-to-length plate (ktonnes) 1,606 1,342 1,051 686 536 484 488 471 278 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: SIMA, US Department of Commerce 87
Slide 88: Demand expected to increase in key segments
Demand expected to increase in key segments Examples from CRU forecasts for plate 15.3 15.5 15.7 15.1 14.7 15.1 14.0 13.5 13.7 Construction 2.7 2.9 3.1 3.3 3.4 2.7 2.7 Linepipe 11.4 2.6 2.5 North America 1.2 0.5 0.9 0.9 1.8 1.9 2.1 2.2 2.3 Offshore installations 0.8 0.1 1.3 2.4 0.7 0.5 0.5 0.7 0.4 0
Slide 89: Uniquely positioned for zero-emission steel
Uniquely positioned for zero-emission steel 89
Slide 90: Production start of SSAB Zero in Q1 2023
Production start of SSAB Zero in Q1 2023 Production based on recycled scrap and Utilization of Biocarbon Utilization of Biofuels renewable electricity − Substitution of bio-genic sourced − Elimination of fossil based natural − Operate EAF exclusively with carbon for injection into the EAF gas in the
Slide 91: Flexible production system allows for a wide range of SSAB Zero products
Flexible production system allows for a wide range of SSAB Zero products Heavy plate products Montpelier Plates to Mobile’s Mobile Q&T products EAF + quenching lines Rolling mill Strip and plate Borlänge Slabs to European products including rolling mills high-strength steels Oxelösund (Q&T, AHSS) 91
Slide 92: Our major customers demand a lower carbon footprint
Our major customers demand a lower carbon footprint 92
Slide 93: SSAB
SSAB
Slide 94: Leading sustainable product offering
Leading sustainable product offering Tony Harris VP Head of Sales and Business Development 94
Slide 95: SSAB in the lead
SSAB in the lead SSAB
Slide 96: SSAB has built a leading position
SSAB has built a leading position HYBRIT - World’s first fossil-free Pilot shipments to Joint Venture World-unique pilot steel rolled and strategic customers between SSAB, plant started delivered to Volvo LKAB and Vattenfall operation in 2020 500 tonnes in 2022 Group in 2021 formed in 2017 96
Slide 97: Several advantages of being first to market
Several advantages of being first to market – Pilot shipments started in 2021 Synergies from joint Preparation for product Stronger relations to marketing efforts qualification key customers − Record operating result 97
Slide 98: First machine in operation
First machine in operation Produced by Volvo Construction Equipment and delivered to Swedish construction company NCC 98
Slide 99: Strong customer demand
Strong customer demand Construction Automotive Industrial Equipment “Peab has ambitious climate and “The Polestar 0 project is Polestar's “Cargotec’s science-based target is to environmental targets, and this is an ambitious goal to create the first truly reduce value chain emissions by 50 important
Slide 100: Daimler is on its way to CO2-lean production
”Daimler is on Mercedes-Benz ”Ambition 2039” – carbon neutral in 2039 its way to CO2-lean production – Swedish 2020 2025 2030 2035 2039 producer delivers green steel” ”The automaker is driving the decarbonisation of its supply chain: Starting in 2026 Daimler will be sourcing CO2-free steel from SSAB
Slide 101: SSAB in partnerships with leading companies
SSAB in partnerships with leading companies 101
Slide 102: Leading the way to zero-emission products
Leading the way to zero-emission products 102
Slide 103: Both recycled and iron ore-based steel will be needed
Both recycled and iron ore-based steel will be needed 2020 2050 Iron Recycled Recycled Iron ore metal metal ore 1,800 Mtonnes steel 2,800 Mtonnes steel Source: Swedish iron and steel producers' association, Jernkontoret 103
Slide 104: Introducing SSAB’s zero CO2 offerings
SSAB March 28, 2023 Introducing SSAB’s zero CO2 offerings TM 0.0 kg CO2e emissions per kg steel Pilot shipments today – Commercially available today commercially from 2026 104
Slide 105: Fossil-free electricity, fuels and sponge iron
SSAB March 28, 2023 TM Fossil-free electricity Fossil-free electricity Fossil-free fuels Fossil-free fuels Fossil-free internal transports Fossil-free internal transports Fossil-free sponge iron based on Fossil-free sponge iron based on the HYBRIT® Technology the HYBRIT® Technology Iron based on ext
Slide 106: Why SSAB Zero™ is unique
Why SSAB Zero™ is unique 1. Zero carbon emission in operations. Third-party verified 2. Fossil-free electricity, bio carbon and bio gas 3. No carbon emission offsetting or mass balancing allocation schemes
Slide 107: SSAB Zero™ route 2023
SSAB Zero™ route 2023 Ʃ <0.05 Rolling SSAB in Borlänge SSAB in Hämeenlinna Train from ship SSAB in Oxelösund Ʃ Ʃ <0.05 <0.05 Ʃ Coating EAF Casting Rolling <0.005 <0.05 SSAB in Iowa Rolling Train Ship powered to ship by biodiesel Total accumulated product carbon dioxide Ʃ Total transportation carbon
Slide 108: Volvo Group CEO quote on SSAB Zero
2023—SSAB Zero 090323 “We are making big strides forward with the introduction of low emission materials made from recycled steel with SSAB Zero in our products. In parallel with the already introduced fossil-free steel, it is another step towards fully climate-neutral transport solutions, and our p
Slide 109: Targeting a fully sustainable steel portfolio
Targeting a fully sustainable steel portfolio FOSSIL-FREE HYBRIT STEEL Volume steel produced (ILLUSTRATIVE) Iron ore-based and fossil free SSAB ZERO Recycled scrap with no added emissions Iron ore-based as today Recycled scrap-based as today 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 203
Slide 110: SSAB’s sustainable offer provides customers with lowest emission steel
SSAB March 28, 2023 TM 0.0 kg CO2e emissions per kg steel SSAB will produce steel based on both virgin iron ore and recycled steel SSAB’s sustainable offer provides customers with the world’s lowest emission steel now and in the future 110
Slide 111: SSAB
SSAB
Slide 112: Future production footprint
Future production footprint Carl Orrling VP Transformation 112
Slide 113: Introduction to SSAB’s production system
Introduction to SSAB’s production system 113
Slide 114: Steel mills in Sweden, Finland and the US
Steel mills in Sweden, Finland and the US − Modern cost-efficient Electric Arc Furnace (EAF) mills in the US − Oxelösund has world leading capability in plate rolling and Quench & Temper lines − SSAB Europe’s Nordic mills are characterized by aging machinery in certain areas, for example hot and col
Slide 115: SSAB in a good starting position
SSAB in a good starting position − Use experience from EAF- based production in the US, including the most advanced Q&T grades − Pilot shipments of fossil-free sponge iron started in 2022 − Ability to qualify products already now 115
Slide 116: Conversion of Oxelösund
Conversion of Oxeldésund SSAB
Slide 117: Oxelösund conversion
Oxelösund conversion − Policy decision in Jan 2022 Plate Mill − Closing down coking plant and 2 blast furnaces − Construction of Electric Arc Furnace New EAF shop − New infrastructure for biofuels − Expansion of scrap handling and efficient Harbor material logistics − Rolling mill and Q&T lines rema
Slide 118: EAF
EAF 118
Slide 119: EAF process: electricity, biofuel, scrap and sponge iron
Electricity for melting Biofuel for reheating Steel scrap & sponge iron Slab furnace Quenching
Slide 120: Mini-mills in Luleå and Raahe
Mini-mills in Luleå and Raahe 120
Slide 121: The mini-mill concept
The mini-mill concept − Electricity-based process – Raw Steel- Continuous Further Finished well-integrated under one material making casting and rolling processing products roof − Short lead time; 3h from steel plant to coils − Less heat loss since the hot slab can be rolled right away − High degree
Slide 122: SSAB sites well suited for mini-mills
SSAB sites well suited for mini-mills Large sites Established logistics Capacity in line with today’s mills − Luleå ~400 hectares − Direct access to harbors, − 2.5 million tons on each site railway, road transport which is ideal for mini-mill − Raahe ~500 hectares − Raw material handling concept − A
Slide 123: Raahe mini-mill
Raahe mini-mill − Policy decision in Jan 2022 − Close blast furnace, coking plant and strip mill − Integrated process – steelmaking and direct rolling in one process line − Option to add hydrogen DRI (Hybrit) 123
Slide 124: Luleå mini-mill
Finishing & Shipping Meltshop Luleå mini-mill Cold Mill Complex − Policy decision in Jan 2022 − Closing coking plant, blast furnace and steel plant Hot Strip Mill − Integrated process – meltshop, hot strip mill and cold mill complex in one facility − Production of high-strength and premium steel for
Slide 125: Operational flexibility – lead time and production adjustment
Operational flexibility – lead time and production adjustment Lead time Operational time to adjust production >2 weeks 160 min from melting start to hot rolled coil = ~240+ ton strip coils/h Secondary EAFs Caster Hot rolling Metallurgy 16 hours 40 min 40 min 40 min 40 min In total, lead time from mi
Slide 126: Substantial reduction in emissions and energy consumption
Substantial reduction in emissions and energy consumption Annual energy consumption (TWh) Annual CO2 emissions (ktonnes) (Excluding sponge iron production) Raahe Luleå Raahe Luleå -91% -77% 3,600 13.0 -75% -92% 11.0 3,200 3.0 2.7 338 267 Today ~2030* Today ~2030* Today* ~2030** Today* ~2030** *Long-
Slide 127: More flexible and favorable cost structure
More flexible and favorable cost structure SSAB Hot Rolled Strip Cost analysis, scenario 2030 CO2 Energy Raw Materials Fixed Cost -12% 100 SSAB will have a more flexible cost structure with the mini-mill’s lower fixed costs per ton 88 24 6 19 Higher emission costs in the EU will allow SSAB to re
Slide 128: Summary
Summary SSAB
Slide 129: Summary
Summary − US mills in good starting position on cost and emissions − SSAB’s European sites well suited for EAFs/mini-mills − Step change in efficiency and cost – construction of state of the art mini-mills − Built for fossil-free production from start − More capacity for high-strength and premium st
Slide 130: Sustainable raw materials
Sustainable raw materials Viktor Strömberg EVP and Head of Strategy & Digitalization 130
Slide 131: Our raw material transformation
Our raw material transformation Reducing iron ore with Flexible mix of recycled scrap and metallurgical coal in blast furnaces sponge iron, using fossil-free energy Iron ore Sponge iron Electricity ~ 7 Mt + Biogas Metallurgical coal Recycled scrap ~ 2.5 Mt Biocarbon 131
Slide 132: Sequential journey towards more sponge iron and scrap
Sequential journey towards more sponge iron and scrap SSAB iron carrier source, MTON Iron Ore Pellets (non-reduced) Sponge Iron / Pig Iron Recycled scrap 10.7 10.5 9.5 9.2 2.5 6.0 7.2 3.5 Today Step 1 - Oxelösund Step 2 - Mini-Mill #1 Step 3 - Mini-Mill #2 132
Slide 133: SSAB sponge iron strategy
SSAB sponge iron strategy Based on unique partnership with LKAB, securing fossil-free iron ore/sponge iron • Hybrit pilot plant in Luleå used for pilot shipments of fossil free steel Hybrit pilot and • 1.35 Mt Hybrit demonstration plant planned demonstration plant • SSAB with exclusive rights to sou
Slide 134: Sponge iron will eventually be a liquid global market
Sponge iron will eventually be a liquid global market Global sponge iron production, Mt Traded Captive use ~410 − Total global production ~120 Mt today − Small commercial market ~22 Mt / 19% ~270 − Substantial growth of DRI production coming decades − Both hydrogen and natural gas − Both steel and m
Slide 135: Difference between scrap and scrap
Difference between scrap and scrap High quality scrap Low quality scrap ► Sought after by EAF steelmakers due to strictly ► Mixture of different steel grades with a broader defined and known analysis tolerance for trace elements ► Constrained supply on commercial market today – ► Generally available
Slide 136: Sponge iron enables more usage of low quality scrap
Sponge iron enables more usage of low quality scrap Illustrative examples Sponge Iron / Pig Iron High Quality Scrap Low Quality Scrap 100% 12% 30% 50% 73% 43% 7% 43% 27% 15% Mobile branded products (as-is) 30% Sponge Iron 50% Sponge Iron Note: Calculative example for reaching the same levels trace e
Slide 137: SSAB’s scrap strategy with three avenues
SSAB’s scrap strategy with three avenues • Scrap generated within SSABs network Internally falling high quality scrap ~ 1.0 • High quality scrap with known chemical composition Customer return flows • Circular flows with SSAB customers ~ 0.5 of high quality scrap • High quality scrap for SSAB due to
Slide 138: Europe is the world’s largest exporter of recycled scrap
Europe is the world’s largest exporter of recycled scrap Europe (EU+UK) scrap market, MTON Low quality scrap 115.0 High quality scrap 22.0 93.0 28.2 1.4 26.8 Europe scrap collection Europe scrap exports Source: Eurostat 138
Slide 139: The Nordic energy system has a competitive advantage
The Nordic energy system has a competitive advantage Fossil-free mix Competitive prices Hydro Thermal power, renewables Northern Sweden (SE1) Finland Wind & solar Thermal power, fossil EUR/MWh Middle Sweden (SE3) Germany Nuclear 250 5% 8% 200 150 17% 54% 100 15% 50 0 2017 2018 2019 2020 2021 2022 13
Slide 140: SSAB needs ~9.5 TWh for the transformation
SSAB needs ~9.5 TWh for the transformation (including the Hybrit demo plant) SSAB electricity needed, TWh per year Hybrit demo Nordic today Second mini-mill Nordic transformation US today First mini-mill 14.2 12.1 12.1 Hybrit demo 5.0 plant 10.0 Oxelösund 5.0 5.0 +9.5 conversion 7.5 5.0 2.5 6.7 4.7
Slide 141: Significant net export last decade
Significant net export last decade Net export of electricity from Sweden, TWh per year New record in 2022 35 with 33 TWh export 30 25 20 15 10 5 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 -5 -10 141
Slide 142: Ambitious plans for offshore wind in SE1 and Finland
Ambitious plans for offshore wind in SE1 and Finland +76 TWh 7. Halla +12 2 1 7 6. Laine +11 3 5. Reimari +19 4 5 6 4. Bothnia kappa +5 3. Bothnia omega +5 2. Polargrund +9-10 1. Bores Krona +14 Total capacity 142
Slide 143: Summary
Summary SSAB
Slide 144: Key takeaways
Key takeaways − Phasing out iron ore and coal usage in blast furnaces saves about 30 TWh of thermal energy, replaced by 9.5 TWh electricity − SSAB will have new flexibility between sponge iron and recycled scrap − Partnership with Hybrit and LKAB secures SSAB’s access to competitive sponge iron − Co
Slide 145: SSAB
SSAB
Slide 146: A more profitable SSAB
A more profitable SSAB Leena Craelius, EVP and CFO 146
Slide 147: Robust financial performance
Robust financial performance 147
Slide 148: Strong earnings
Strong earnings Synergies from Rautaruukki Stronger product mix, continuous SEK m. improvements 12,000 10,000 Cost savings Ruukki Construction, − Volatile market conditions in Tibnor recent years 8,000 6,000 − Underlying trend of improving earnings since 2014 4,000 − A combination of a healthier 2,0
Slide 149: Two consecutive years of record earnings
Two consecutive years of record earnings Earnings per share (adj), SEK EBITDA per tonne (adj), SEK 22.38 5,041 14.24 3,004 3.45 1.04 2.23 1.04 1,046 1,240 900 550 699 405 -0.66 -0.50 2015 2016 2017 2018 2019 2020 2021 2022 2015 2016 2017 2018 2019 2020 2021 2022 Return on capital employed (adj) Net
Slide 150: Working capital focus
Working capital focus Net operating working capital/sales − Disturbances in supply chain during 26.2% 25.8% 2022 due to Russia’s invasion of 24.5% Ukraine – higher inventory 22.8% 22.3% 23.2% 20.4% − Measures implemented to reduce 17.5% working capital − Transformation will provide a step-change in
Slide 151: Industry-leading cash flow generation
Industry-leading cash flow generation Cumulative cash conversion 2017-2022 (Operative cash flow before strategic investments/EBITDA) Best peer 53% SSAB 50% Peer A 35% Peer B -15% Worst peer -62% 151
Slide 152: Favorable outlook for healthy earnings level
Favorable outlook for healthy earnings level Historical earnings Healthier over the cycle profitability SSAB EBITDA (Adj. SEK bn) Indications that the historical average earnings 32.7 could be a conservative assumption − Not fully reflecting SSAB’s achievements − Not fully reflecting industry change
Slide 153: Investments to build a stronger company
Investments to build a stronger company 153
Slide 154: Three long-term strategic alternatives for 2045
Three long-term strategic alternatives for 2045 Options Reinvest in current technology EAFs at all sites by 2045 Accelerated transformation Description • Rebuild coke ovens • Replace current blast furnaces • Replace Nordic strip system • Reline blast furnaces with EAFs with modern mini-mills • Maint
Slide 155: Sequencing of investments coming years - base case
Sequencing of investments coming years - base case 2022 2023 2024 2025 2026 2027 2028 2029 2030 Ongoing groundwork awaiting Oxelösund EAF final grid connectivity timeline Decision and scope of first mini-mill Mini-mill 1 plan to be decided 2024 Second mini-mill to be decided Mini-mill 2 2026 to be o
Slide 156: Manageable financial risk profile
Manageable financial risk profile Well-defined Favorable financial guidelines Healthy outlook and an Financial financial framework attractive business position case Manageable financial risk profile Investment Financing flexibility options Options to Favorable green adapt roadmap financing options 1
Slide 157: Financial targets – track record
Financial targets – track record Profitability Capital structure Dividend - EBITDA margin vs peers - Net debt/equity <35% - 30-50% of profit after tax DPS (SEK) 35% 30% 39% 9 30% 20% 8 25% 20% #2 10% 7 6 37% 15% 0% 5 10% 2017 2018 2019 2020 2021 2022 4 -10% 5% 3 0% -20% 2 43% 45% -5% -30% 1 2017 201
Slide 158: SSAB financial targets
SSAB financial targets Profitability Capital structure Dividend Industry-leading Net gearing ratio between -20% EBITDA margin compared to 40% of profit after tax to 20%. (Net Debt to Equity) peers* Unchanged Updated Updated Before determining the yearly dividend proposals and capital structure adjus
Slide 159: Summary – SSAB taking the lead
Summary – SSAB taking the lead Martin Lindqvist, President and CEO 159
Slide 160: We have built a more resilient SSAB
We have built a more resilient SSAB SSAB Europe mix combined with SEK >5bn better EBIT growth in SSAB Special Steels Restructuring of >1.5 Tibnor and Ruukki Construction etc. 1.3 Structural effects from continuous 2.0 0.7 improvement program Synergies from Total acquisition of Rautaruukki 160
Slide 161: Mix improvement continues – new growth targets
Mix improvement continues – new growth targets SSAB Special Steels SSAB Europe 2.2 Automotive AHSS Premium products ~1.4 1.8 ~1.2 1.4 ~1.0 ~0.9 0.8 0.5 2022 2025 plan 2030 plan 2022 2025 plan 2030 plan 2022 2025 plan 2030 plan Million tonnes 161
Slide 162: Launch of SSAB Zero
Launch of SSAB Zero − Zero carbon emission in operations. Third-party verified − Fossil-free electricity, bio carbon and bio gas − No carbon emission offsetting or mass balancing allocation schemes − Zero emission steel is a premium product – premium estimated at EUR ~300/tonne 162
Slide 163: Main components of earnings uplift
Main components of earnings uplift Cost benefit (indexed) Commercial strategy Zero emission steel Volume Volume (Mt) (Mt) -12% 100 8 8 88 27% Special CO2 24 22% 6 Energy 19 25% 38% Premium SSAB Zero + Raw 31 70 SSAB Fossil-free material 53% Fixed cost 35% Standard 26 12 0 0 Blast EAF Current New Cur
Slide 164: Positioned for industry-leading profitability
Positioned for industry-leading profitability Transformation benefits >2030 (SEK bn) TBD >10 ~3.6 ~5.0 Net cost benefits* Commercial Zero steel Total* strategy* net premium* *Benefits refers to annual earnings improvement compared to a scenario where SSAB keeps current blast furnace system 164
Slide 165: Future production footprint
Future production footprint − US mills in good starting position on cost and emissions − SSAB’s European sites well suited for EAFs/mini-mills − Step change in efficiency and cost – construction of state of the art mini-mills − Built for fossil free production from start − More capacity for high-str
Slide 166: Transform SSAB to a fully sustainable steel portfolio
Transform SSAB to a fully sustainable steel portfolio FOSSIL-FREE HYBRIT STEEL Volume steel produced (ILLUSTRATIVE) Iron ore-based and fossil free SSAB ZERO Recycled scrap with no added emissions Iron ore-based as today Recycled scrap-based as today 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032
Slide 167: Summary
Summary − We have built a more resilient SSAB − Mix improvement continues – new growth targets − Launch of SSAB Zero − Transform SSAB to a fully sustainable steel portfolio − Future production footprint improves flexibility and cost position 167
Slide 168: SSAB
SSAB