Ssab Ab Class A · OMXSTO:SSAB_A
Ssab Ab Class A — Q4 2022 Earnings Presentation
31 slides from Ssab Ab Class A's earnings presentation, Jan 27, 2023
Slide 1: Presentation of the Q4/2022 report
Presentation of the Q4/2022 report Martin Lindqvist, President & CEO Leena Craelius, CFO January 27, 2023 1
Slide 2: Agenda
Agenda 1. FY 2022 and Q4 in brief 2. Financials 3. Outlook and summary 4. Q&A 2
Slide 3: FY 2022 and Q4 in brief
1 FY 2022 and Q4 In brief SSAB
Slide 4: Record earnings in a volatile year
Record earnings in a volatile year 6.1 29.3 14.2 12.6 4.2 18.8 3.7 LTIF 5.2 4.5 1.8 SEK bn. 2.2 1.1 2.2 -0.3 SEK bn. 1.3 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Improved safety Record operating result Strong cash generation Lost Time Injury Frequency decreased to A
Slide 5: Solid financial position
Solid financial position 14.3 30.4 8.70 2.3 5.25 Goodwill, SEK bn. SEK bn. DPS in 1.50 -10.5 -12.0 -10.3 SEK 0.3 0.00 0.00 2018 2019 2020 2021 2022 2021 2022 2018 2019 2020 2021 2022 Significant net cash position Goodwill impairment reported in Q4 Higher dividend proposed SEK 14.3 bn in net cash Rel
Slide 6: SSAB Special Steels
SSAB Special Quarterly adjusted operating Quarterly shipments, Annual adjusted operating result in Steels result in SEK m. ktonnes SEK m. 2,392 2,411 381 396 8,292 2,104 350 336 305 1,540 1,386 4,624 1,421 1,454 1,506 Q4/21 Q1/22 Q2/22 Q3/22 Q4/22 Q4/21 Q1/22 Q2/22 Q3/22 Q4/22 2018 2019 2020 2021 20
Slide 7: SSAB Americas
SSAB Americas Quarterly adjusted operating result in SEK m. Annual adjusted operating result in SEK m. Monthly market price, US plate, indexed 120 3.512 12,266 3.036 100 2.992 2.726 80 2.188 5,412 60 1,837 2,275 40 20 -257 Q4/21 Q1/22 Q2/22 Q3/22 Q4/22 2018 2019 2020 2021 2022 0 2112 2203 2206 2209
Slide 8: Weaker European market impacting SSAB Europe, Tibnor and Ruukki
Weaker European market impacting SSAB Europe, Tibnor and Ruukki Quarterly adjusted operating result in Quarterly adjusted operating result in Quarterly adjusted operating result in Monthly market price, European HRC, indexed SEK m. SEK m. SEK m. 160 140 4,070 613 212 120 3,301 3,250 351 418 161 163
Slide 9: Leading the green transition of the steel industry
Leading the green transition of the steel industry − In 2022, 500 tonnes of fossil-free steel delivered to strategic customers − Partnerships in Automotive, Heavy Transport, Construction Machinery, Material Handling, Construction 9
Slide 10: Transformation to fossil-free steel making on plan
Transformation to fossil-free steel making on plan − Replacing blast furnaces and coke plants with new integrated mini-mills with electric arc furnaces, rolling mills and further processing − Greater flexibility, shorter lead times and virtually no CO2 emissions from own operations − Feasibility stu
Slide 11: SSAB's own transformation requires 3-4 TWh
SSAB’s own transformation requires 3-4 TWh − SSAB’s Nordic plants will need additionally ~3-4 TWh of fossil-free electricity around 2030 to replace blast furnaces with EAFs − A flexible mix of scrap metal and fossil-free sponge iron can be used as a raw material in the new installations − Will reduc
Slide 12: Financials
2 Financials SSAB
Slide 13: Q4 impacted by weak European market and maintenance
Q4 impacted by weak European market and maintenance SSAB Special Steels and SSAB Americas held up Sales (SEK million) Steel shipments (ktonnes) 40,000 2,000 35,000 30,000 1,500 25,000 20,000 1,000 15,000 10,000 500 5,000 0 0 19Q1 19Q2 19Q3 19Q4 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 22Q2 22Q3
Slide 14: Change in adjusted operating result Q4/22 vs. Q4/21
Change in adjusted operating result Q4/22 vs. Q4/21 -520 1 680 More extensive 6 961 planned Production adjusted to -2 530 maintenance weak demand and to reduce inventory -870 20 -970 -3 3 768 Q4/21 Price Volume Variable COGS Fixed costs FX Capacity Other Q4/22 utilization 14
Slide 15: Change in adjusted operating result Q4/22 vs. Q3/22
Change in adjusted operating result Q4/22 vs. Q3/22 Lower prices 6 742 in Europe and the US Planned maintenance Production adjusted to weak demand and to -2 375 reduce inventory 790 -850 75 -65 -550 1 3 768 Q3/22 Price Volume Variable Fixed costs FX Capacity Other Q4/22 COGS utilization 15
Slide 16: Release of working capital in Q4/22
Release of working capital in Q4/22 SEK millions 2022 2022 2021 Full year Q4 Full year EBITDA 4,659 32,340 22,094 Change in working capital 4,921 -8,279 -5,485 Maintenance capex -1,018 -2,196 -2,053 Other 317 828 741 Operating cash flow 8,880 22,693 15,296 Financial items -1 -17 -373 Taxes -1,313 -5
Slide 17: Strong financial position
Strong financial position SEK m % − Group is debt free with net cash of 15,000 14,287 30 SEK 14.3bn (2.3bn) at the end of 2022 10,000 20 − The board proposes dividend of SEK 8.70 per share, corresponding to a total 5,000 2,346 10 of SEK 9 bn. 0 0 − An authorization to buy back up to 10% of all outst
Slide 18: Raw material
Raw material SSAB’s purchase price, year over year changes Market prices (AMM) Iron ore Coking coal Scrap USD/gross ton 96% 349% 600 500 211% 400 21% 5% 6% 120% 128% 300 2% 60% 200 44% -19% 100 Q3/21 Q4/21 Q1/22 Q2/22 Q3/22 Q4/22 Q3/21 Q4/21 Q1/22 Q2/22 Q3/22 Q4/22 0 − Lower than normal purchase vol
Slide 19: Cash needs of the business
Cash needs of the business − Total cash needs1) in 2023 estimated at around SEK 11bn ~11 − Higher strategic capex vs. 2022 due to ramp-up of Oxelösund conversion 10.0 − As a starting point, a stable taxes paid has been assumed. It Capex will, however, depend on the level of earnings in 2023. Some (m
Slide 20: Outlook and summary
3 Outlook and summary SSAB
Slide 21: SSAB's outlook for main customer segments Q1/2023
SSAB’s outlook for main customer segments Q1/2023 Segment Demand Comments Strong Neutral Weak - Improved supply chain for heavy trucks in Europe Heavy Transport - Improvement in railcar (US) - Improved supply of components to OEMs Automotive - Risk in end-user demand (higher interest rates) - Stable
Slide 22: SSAB's outlook for Q1/2023
SSAB’s outlook for Q1/2023 - Continued uncertainty (inflation, interest rates, Ukraine) Volume and pricing outlook - Stabilization of European market Q1 2023 vs. Q4 2022 Shipments Realized prices - Relatively stable demand on North SSAB Special Steels Significantly higher Lower American market (heav
Slide 23: Summary
Summary − Record earnings in FY 2022 − Continued good trend in safety − Release of working capital in Q4 − Strong financial position − Dividend per share of SEK 8.70 proposed − An authorization to buy back SSAB shares will be proposed to the AGM − Leading the green transition − Pilot shipments of 50
Slide 24: Questions & Answers
Questions & Answers SSAB
Slide 25: Capital Markets Day 2023
Capital Markets Day 2023 − SSAB invites institutional investors, financial analysts and journalists to the Capital Markets Day − 28 March – presentations in Stockholm. Venue: Epicenter, Mäster Samuelsgatan 36. − 29 March – site visit to SSAB Luleå and Hybrit − To attend, please register, link availa
Slide 26: Appendix
Appendix SSAB
Slide 27: Expected maintenance costs
Expected maintenance costs − SSAB’s total maintenance costs for 2023 SEK million 2023 2023 2023 2023 FY are expected to be SEK 1,550 (1,540) million. Q1 Q2 Q3 Q4 2023 SSAB Special Steels -- -- 275 400 675 SSAB Europe -- -- 350 200 550 SSAB Americas -- -- 175 150 325 Total -- -- 800 750 1,550 Note: T
Slide 28: Change in adjusted operating result 2022 vs. 2021
Change in adjusted operating result 2022 vs. 2021 -2 960 -16 510 34 180 -2 880 -120 -1 385 29 283 121 18 837 2021 Price Volume Variable COGS Fixed costs FX Capacity Other 2022 utilization 28
Slide 29: Debt portfolio duration and interest rate
Debt portfolio duration and interest rate − Duration of the loan portfolio was 5.7 (6.2) years − Averaged fixed interest term was 0.9 (1.2) years Debt cost and duration − Average interest rate was 3.4% (2.3%) 8.0 4.00 7.0 3.50 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 2018 2018
Slide 30: Maturity profile
Maturity profile − Liquid assets and committed credit lines at SEK 35.2 bn Maturity profile (million SEK) 40,000 35,000 Back-up 30,000 facilities 25,000 20,000 15,000 Cash 10,000 5,000 0 Cash and back-up 2023 2024 2025 2026+ facilities 30
Slide 31: SSAB
SSAB