United States Steel Corporation · NYSE:X
United States Steel — Q2 2020 Earnings Presentation
19 slides from United States Steel's earnings presentation, Jul 31, 2020
Slide 1: Second Quarter 2020 Earnings Call
Second Quarter 2020 Earnings Call David Burritt President and Chief Executive Officer Christie Breves Senior Vice President and Chief Financial Officer Rich Fruehauf Senior Vice President, Chief Strategy and Development Officer Kevin Lewis Vice President, Investor Relations and Corporate FP&A July 3
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 second 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: Business Update
Business Update SAFETY: Protecting lives and livelihoods LIQUIDITY: Fortifying the balance sheet TODAY YOU STRATEGY: WILL HEAR Executing our “best of both” strategy UPDATES ON: OPERATIONS & COMMERICAL: Supporting increased customer demand FINANCIAL OUTLOOK: Improving second half performance 4
Slide 5: Protecting lives and livelihoods guided by our S.T.E.E.L. Principles
Protecting lives and livelihoods guided by our S.T.E.E.L. Principles Safety First 2 Benchmarks : BLS - Iron & Steel: 0.70 AISI: 0.31 0.14 0.10 0.07 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 2 BLS – Iron & Steel 2018
Slide 6: Protecting lives and livelihoods: safety
Protecting lives and livelihoods 360 o safety Physical Safety environment free from harm or injury Psychological Safety environment where individuals are encouraged to contribute their unique ideas and perspectives Incorporating all aspects of a safe working environment 6
Slide 7: Fortifying the balance sheet: prioritizing cash and liquidity
Fortifying the balance sheet prioritizing cash and liquidity NET PROCEEDS NET PROCEEDS $977 $410 million million SECURED NOTES COMMON STOCK Approximately $1.4 billion of additional liquidity raised in 2Q 2020 7
Slide 8: Fortifying the balance sheet: strong liquidity in an unprecedented market
Fortifying the balance sheet strong liquidity in an unprecedented market Total Liquidity as of June 30, 2020 6% 7% 0% Continued focus $2.7B cash and cost improvements Liquidity 87% Cash ($2,300M) U.S. ABL ($190M) USSK Facilities ($155M) Actively marketing UPI ABL ($7M)1 non-core assets2 1 The UPI Am
Slide 9: Executing our "best of both" strategy
Executing our “best of both” strategy Big River remains our #1 strategic priority 3+ years call option 2x Well-positioned to increasing operating leverage acquire the remaining by doubling capacity1 50.1% stake in Big River Steel on-track ahead of schedule and on-budget2 1 Big River Steel Phase 2-A
Slide 10: Responding to improved customer demand supporting blast furnace restarts
Responding to improved customer demand supporting blast furnace restarts Accelerating order entry in key Flat-rolled segment end markets Automotive Appliance +174% June – July vs. Order entry April – May improvement Construction Packaging 10
Slide 11: Second quarter 2020 financial highlights
Second quarter 2020 financial highlights Flat-rolled Segment EBITDA1 $ Millions $86 • Total second quarter adjusted EBITDA1 EBITDA1 ($203) of ($264) million, ahead of our Margin: 1Q 2020 2Q 2020 4% (13%) guidance on June 17 U. S. Steel Europe Segment EBITDA1 $ Millions $9 • Quarter performance ~$51
Slide 12: Second quarter 2020 better than expected
Second quarter 2020 better than expected increased shipments in second half of June N. American Flat-rolled daily shipment pace ~50% Improvement 1st Half of June 2nd Half of June Increased momentum gives us confidence 2Q was the trough 12
Slide 13: Liquidity drivers progressing as expected
Liquidity drivers progressing as expected 2Q Key Components Actuals Status Comment EBITDA expected to improve Adjusted EBITDA ($264M) throughout second half 2020 as✓ expected Working capital release of Working Capital $120M ~$250M in second half of 2020 as✓ expected Capital spending of ~$300M in Cap
Slide 14: Recap
Recap • Protecting lives and livelihoods • Prioritizing cash and liquidity • “Best of both” strategy remains the future 14
Slide 15: Q & A
Q & A
Slide 16: Closing Remarks
Closing Remarks
Slide 17: Reconciliation of segment EBITDA
Reconciliation of segment EBITDA Segment EBITDA – Flat-rolled 1Q 2020 2Q 2020 ($ millions) Segment earnings before interest and income taxes ($35) ($329) Depreciation 121 126 Flat-rolled Segment EBITDA $86 ($203) Segment EBITDA – U. S. Steel Europe 1Q 2020 2Q 2020 ($ millions) Segment earnings befor
Slide 18: Reconciliation of adjusted EBITDA
Reconciliation of adjusted EBITDA ($ millions) 1Q 2020 2Q 2020 Reported net earnings attributable to U. S. Steel ($391) ($589) Income tax provision (19) (5) Net interest and other financial costs 35 62 Reported earnings before interest and income taxes ($375) ($532) Depreciation, depletion and amort
Slide 19: 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