United States Steel Corporation · NYSE:X
United States Steel — Q3 2021 Earnings Presentation
34 slides from United States Steel's earnings presentation, Oct 28, 2021
Slide 1: Third Quarter 2021 Earnings Presentation
Third Quarter 2021 Earnings Presentation www.ussteel.com October 28, 2021
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 as of and for the third quarter of 2021. They should be read in conjunction with the consolidated financial s
Slide 3: Explanation of use of non-GAAP measures
Explanation of use of non-GAAP measures 3 3 We present adjusted net earnings (loss), adjusted net earnings (loss) per diluted share, earnings (loss) before interest, income taxes, depreciation and amortization (EBITDA) and adjusted EBITDA, which are non-GAAP measures, as additional measurements to e
Slide 4: Continued progress towards Best for All
Continued progress towards Best for AllSM CURRENT LANDSCAPE CHALLENGES WE FACE SOLUTION PATH FORWARD Continuing record performance in 2021 and bullish for 2022 Delivering on Best for All Transitioning to less capital and carbon intensive business model while becoming the best steel competitor ✓ Mini
Slide 5: Third quarter 2021 highlights
Third quarter 2021 highlights Delivering on Best for All Safety1 0.07 0.42 0.60 Enterprise Adj. EBITDA % Mini Mill EBITDA %2 Total Liquidity Mini mill peer A Industry benchmark 34% 32% ~29% Integrated peer A Mini mill peers A & B 42% 30% 28% Mini mill peer A Mini mill peer B $4.5B $3.8B $2.3B $2.2B
Slide 6: Transitioning to a Best for All future
TRANSITIONING TO A BEST FOR ALL FUTURE
Slide 7: Capital allocation delivering stockholder value
Transitioning to a Best for All future Capital allocation delivering stockholder value U P D A T E TRANSFORMED BALANCE SHEET GROWING COMPETITIVE ADVANTAGES RETURNING CAPITAL TO STOCKHOLDERS 7 7
Slide 8: Capital allocation delivering stockholder value
Transitioning to a Best for All future Capital allocation delivering stockholder value U P D A T E TRANSFORMED BALANCE SHEET GROWING COMPETITIVE ADVANTAGES RETURNING CAPITAL TO STOCKHOLDERS 8 8
Slide 9: Positioning the balance sheet at a sustainable range of debt
1 Pro forma including Big River Steel debt. Excludes the impact of unamortized issuance costs and discounts. 2 Includes expected 4Q 2021 deleveraging. Positioning the balance sheet at a sustainable range of debt 1.2B 1.2B 0.3B YE 2020 3Q 20211Q 2021 2Q 2021 Current $7.0B $4.3B YE 2021E ~$3.9B Total
Slide 10: Transformed balance sheet
Transitioning to a Best for All future Transformed balance sheet Strong liquidity and clear runway to complete announced strategic projects with confidence U. S. Steel Big River Steel Liquidity and debt maturity profile, YE 2021E, pro forma for 2021 expected deleveraging $0.0B 20272023 20252021 2022
Slide 11: Capital allocation delivering stockholder value
Transitioning to a Best for All future Capital allocation delivering stockholder value U P D A T E TRANSFORMED BALANCE SHEET GROWING COMPETITIVE ADVANTAGES RETURNING CAPITAL TO STOCKHOLDERS 11 11
Slide 12: Growing competitive advantages
Transitioning to a Best for All future Growing competitive advantages LOW-COST IRON ORE MINI MILL STEEL - MAKING BEST-IN- CLASS FINISHING CAPABILITIES Research & innovation Deep customer relationships 12 12 Competitive advantages built on a strong foundation:
Slide 13: Investing in competitive advantages
13 Transitioning to a Best for All future Investing in competitive advantages 13 ~$3B Capital Spending ~3Mtons Raw Steel Capability Sustainable Steels ~$280M Capital Spending ~325ktons Finishing Capability Galvalume / Galvanized Steels MINI MILL #2 COATING LINE BEST-IN-CLASS FINISHING CAPABILITYMINI
Slide 14: Investing in competitive advantages
14 Transitioning to a Best for All future Investing in competitive advantages 14 Best-in-class finishing capabilities Mini mill steelmaking 2021 2022 2023 2024 2025+ BRS NGO line (3Q ‘21 – 3Q ‘23) BRS coating line (4Q ‘21 – 2Q ‘24) Mini mill #2 (1H ‘22 – ‘24) Strategic investment timeline:
Slide 15: Investing in competitive advantages
2021 20252022 $1,570M 2023 $285M 2024 2026 $1,530M $345M 2021 202420232022 2025 2026+ $800M $200M $850M Expected EBITDA contribution: 15 Best-in-class finishing capabilities Mini mill steelmaking Expected strategic CAPEX: Transitioning to a Best for All future Investing in competitive advantages
Slide 16: Investing in competitive advantages
$1,530M$1,570M 2021 2022 2023 $285M 2024 $345M Expected strategic CAPEX: 16 BRS coating line Mini mill steelmaking1 BRS NGO electrical steel line ~$85M ~$240M ~$105M ~$20M ~$130M ~$125M ~$25M ~$1,200M ~$1,300M ~$300M Transitioning to a Best for All future Investing in competitive advantages ~$200M 2
Slide 17: Capital allocation delivering stockholder value
Transitioning to a Best for All future Capital allocation delivering stockholder value U P D A T E TRANSFORMED BALANCE SHEET GROWING COMPETITIVE ADVANTAGES RETURNING CAPITAL TO STOCKHOLDERS 17
Slide 18: Returning capital to stockholders
18 Transitioning to a Best for All future Returning capital to stockholders Reinstating $0.05/share quarterly dividend Authorizing $300 million stock repurchase program Additional buybacks could be driven by: Direct returns to stockholders: Continued strong free cash flow generation Potential non-co
Slide 19: Third quarter 2021 update
THIRD QUARTER 2021 UPDATE
Slide 20: Third quarter 2021 update: Safety performance
Third quarter 2021 update Safety performance 0.14 0.10 0.07 0.07 20192018 YTD 20212020 BLS - Iron & Steel: 0.60 Benchmark 1 : OSHA Days Away from Work 2 Record-setting performance 1 BLS – Iron & Steel 2019 data. 2 Occupational Safety and Health Administration (OSHA) Days Away from Work is defined as
Slide 21: Third quarter 2021 update: Financial updates
Reported Net Earnings (Loss) $ Millions Profit Margin: ($268) ($60) $283 $964 $1,543 4Q 20203Q 2020 1Q 2021 2Q 2021 3Q 2021 Adjusted Net Earnings (Loss) $ Millions Adjusted Profit Margin: ($211) ($75) $362 $1,084 $1,831 1Q 20213Q 2020 3Q 20214Q 2020 2Q 2021 Segment EBIT1 $ Millions Segment EBIT Marg
Slide 22: Flat-rolled segment EBITDA
Shipments: in 000s, net tons Production: in 000s, net tons EBITDA Bridge $ Millions, 2Q 2021 vs. 3Q 2021 EBITDA Margin: (2%) 11%3% ($33) $50 $266 $703 $1,135 2Q 20213Q 2020 4Q 2020 1Q 2021 3Q 2021 23% $703 $568 2Q 2021 Commercial ($40) $1 Raw Materials Maintenance & Outage ($97) Other 3Q 2021 $1,135
Slide 23: Mini Mill segment
Segment EBITDA $ Millions EBITDA Margin: Shipments: in 000s, net tons Production: in 000s, net tons Average Selling Price $ / net ton 3Q 2020 - - - 4Q 2020 - - - 1Q 2021 510 447 $967 2Q 2021 747 616 $1,207 3Q 2021 750 608 $1,517 Operating Statistics EBITDA Bridge $ Millions, 3Q 2020 vs. 3Q 2021 Mini
Slide 24: U. S. Steel Europe segment EBITDA
Segment EBITDA $ Millions EBITDA Margin: 8% 16%11% $39 $61 $130 $232 $418 3Q 2020 4Q 2020 2Q 20211Q 2021 3Q 2021 22% 33% Shipments: in 000s, net tons Production: in 000s, net tons Average Selling Price $ / net ton 3Q 2020 873 790 $608 4Q 2020 966 840 $652 1Q 2021 1,197 1,043 $748 2Q 2021 1,279 1,167
Slide 25: Tubular segment EBITDA
EBITDA Margin: (46%) (12%)(20%) ($44) ($21) ($17) $11 $11 3Q 2020 1Q 20214Q 2020 2Q 2021 3Q 2021 6% 5% Shipments: in 000s, net tons Production: in 000s, net tons Average Selling Price $ / net ton 3Q 2020 - 71 $1,230 4Q 2020 16 74 $1,267 1Q 2021 93 89 $1,372 2Q 2021 114 105 $1,633 3Q 2021 117 123 $1,
Slide 26: Cash and liquidity
Cash and liquidity $826 $938 $682 $138 $2,605 YE 2017 YE 2018 YE 2019 YE 2020 9M 2021 Cash from Operations $ Millions Cash and Cash Equivalents $ Millions Total Estimated Liquidity $ Millions Net Debt $ Millions $1,553 $1,000 $749 $1,985 $2,044 YE 2019YE 2017 YE 2018 9M 2021YE 2020 $3,350 $2,830 $2,
Slide 27: Liquidity bridge
$1.3B $0.6B $4.2B ($1.2B) ($0.4B) $4.5B Liquidity bridge Free cash flow 2Q 2021 Debt reduction Transtar sale Credit facility optimization 3Q 2021 Total Liquidity 2Q 2021 vs. 3Q 2021 27
Slide 28: Appendix
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Slide 29: Additional Big River Steel summary data
Additional Big River Steel summary data In c o m e S ta te m e n t B a la n c e S h e e t C a s h F lo w Customer Sales 3Q 2021 Intersegment Sales Net Sales EBIT1 $949M $156M $1,105M $424M Total Assets $4,314M Depreciation and Amortization Capital Expenditures $40M $46M 1 Earnings before interest an
Slide 30: Segment EBITDA reconciliation
Flat-rolled ($ millions) 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 Segment (loss) earnings before interest and income taxes ($159) ($73) $146 $579 $1,015 Depreciation 126 123 120 124 120 Flat-rolled Segment EBITDA ($33) $50 $266 $703 $1,135 U. S. Steel Europe ($ millions) 3Q 2020 4Q 2020 1Q 2021 2Q 20
Slide 31: Reconciliation of net debt
Net Debt ($ millions) YE 2017 YE 2018 YE 2019 YE 2020 9M 2021 Short-term debt and current maturities of long-term debt $3 $65 $14 $192 $61 Long-term debt, less unamortized discount and debt issuance costs 2,700 2,316 3,627 4,695 4,272 Total Debt $2,703 $2,381 $3,641 $4,887 $4,333 Less: Cash and cash
Slide 32: Reconciliation of reported and adjusted net earnings
Reconciliation of reported and adjusted net earnings ($ millions) 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 Reported net (loss) earnings attributable to U. S. Steel ($234) $49 $91 $1,012 $2,002 Debt extinguishment ─ ─ 255 ─ 23 Asset impairment ─ ─ ─ 26 ─ Restructuring and other charges ─ 8 6 30 ─ Gain
Slide 33: Reconciliation of adjusted EBITDA
Reconciliation of adjusted EBITDA ($ millions) 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 Reported net (loss) earnings attributable to U. S. Steel ($234) $49 $91 $1,012 $2,002 Income tax provision (benefit) (24) (94) 1 (37) 260 Net interest and other financial costs 47 88 333 59 80 Reported (loss) earn
Slide 34: Investor Relations
INVESTOR RELATIONS Kevin Lewis Vice President 412-433-6935 klewis@uss.com Eric Linn Director 412-433-2385 eplinn@uss.com www.ussteel.com