Slide 1: Second-Quarter 2024 Earnings Presentation
CLEVELAND-CLIFFS INC. Second-Quarter 2024 Earnings Presentation July 22, 2024 © 2024 Cleveland-Cliffs Inc. All Rights Reserved.
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains statements that constitute "forward-looking statements" within the meaning of the federal securities laws. All statements other than historical facts, including, without limitation, statements regarding our current expectations, estimates and pro
Slide 3: Q2 2024 Highlights
Q2 2024 HIGHLIGHTS $5.1 billion Revenues 4.0 million tons Steel Shipments $323 million Adjusted EBITDA1 $362 million Free Cash Flow $237 million Net Debt Reduction 7.5 million Shares Repurchased $3.7 billion Liquidity 3 © 2024 Cleveland-Cliffs Inc. All Rights Reserved. 1Reconciliation for Adjusted E
Slide 4: Q2 2024 End Market and Product Overview
Q2 2024 END MARKET AND PRODUCT OVERVIEW 11% 13% Slab, Rail, Other Steel Producers 29% 30% Direct 5% Coated Automotive Plate (primarily End galvanized) Product Market 29% Mix Infrastructure & Mix Manufacturing 35% Hot-Rolled 16% Cold-Rolled 28% Distributors & 4% Converters Stainless & Electrical High
Slide 5: Results Trend
RESULTS TREND Steelmaking External Sales Volumes Adjusted EBITDA1 $775 4.2 4.1 4.0 3.9 4.0 $614 Net Tons (Millions) $414 Millions $323 $279 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Steelmaking Average Selling Price SG&A $1,255 $162 $149 $1,203 $144 $1,175 $132
Slide 6: Top Priorities
TOP PRIORITIES Five key management focus items Reduce Costs Year-over-year cost reduction targets remain on track Maximize cash flow from leading automotive franchise Healthy demand and consistent margins through cycle Progress value-enhancing projects $600 million+ annual EBITDA improvement from Mi
Slide 7: Working Capital Management
WORKING CAPITAL MANAGEMENT Inventory Balance Evolution ($ in millions) Continued focus on inventory reduction has made cash flow generation more resilient $5,784 Further opportunity to reduce inventory and extract more cash $5,562 $5,542 $5,130 $4,923 $4,727 $4,592 $4,460 $4,449 $4,199 Q1 22 Q2
Slide 8: Capital Returns
CAPITAL RETURNS Weighted Average Diluted Share Count Since implementation of previous repurchase program 532 526 519 516 515 514 509 505 In Million Shares 492 474 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Announced New $1.5 Billion Share Repurchase Program on Ap
Slide 9: Acquisition of Stelco
ACQUISITION OF STELCO Lake Erie Works HRC Cost Structure Hamilton Works All-in US$ cost per net ton of HRC Newest integrated facility in $645 Cokemaking and steel North America finishing $480 • One of the lowest cost steelmaking facilities in • Galvanizing, galvannealing, cold-rolling, North America
Slide 10: Stelco's Industry Leading Cost Advantages
STELCO’S INDUSTRY LEADING COST ADVANTAGES Five key drivers of Stelco’s cost advantage: Iron Ore Optimal Currency Healthcare Low Energy Supply Operating Advantage Costs Rates Agreement Layout • Favorable-cost • Favorable • Benefits from • Lake Erie Works • Favorable pellet agreement CAD/USD Canada’s
Slide 11: Downstream Transformer Production
DOWNSTREAM TRANSFORMER PRODUCTION Investment Plans for New Electrical Distribution Transformer Production Plant Weirton, WV selected for manufacturing site of distribution transformer production plant $100 million net investment with $50 million support from West Virginia Economic Development Author
Slide 12: 2050 Decarbonization Pathway
2050 DECARBONIZATION PATHWAY Previously achieved initial 25% GHG reduction goal by 2030 eight years ahead of schedule Scope 1, 2, Material Upstream Scope 3 GHG Intensity (t CO2e / t crude steel) 0.35 Scope 3 Butler and Process Efficiency Middletown 0.28 Hydrogen Scope 3 Future Developments in GHG Pr
Slide 13: Outlook Projections
OUTLOOK PROJECTIONS Continued emphasis on capital and operating cost reductions 2024 Capital Expenditures: Reduced to $650-$700 million vs. previous guidance of $675-$725 million Full-Year 2024 2024 Steel Unit Costs: Maintaining previous expectation of $30/t reduction from 2023 to 2024 Q3 Steel Unit
Slide 14: Cleveland-Cliffs' Adjusted EBITDA Reconciliation
CLEVELAND-CLIFFS’ ADJUSTED EBITDA RECONCILIATION Three Months Ended June 30, March 31, December 31, September 30, June 30, ($ in millions) 2024 2024 2023 2023 2023 Net income (loss) $9 $(53) $(139) $275 $356 Less: Interest expense, net (69) (64) (63) (70) (79) Income tax benefit (expense) 15 8 (30)
Slide 15: © 2024 Cleveland-Cliffs Inc. All Rights Reserved.
© 2024 Cleveland-Cliffs Inc. All Rights Reserved.