Ssab Ab Class A · OMXSTO:SSAB_A
Ssab Ab Class A — Q3 2022 Earnings Presentation
34 slides from Ssab Ab Class A's earnings presentation, Oct 25, 2022
Slide 1: Presentation of the Q3/2022 report
Presentation of the Q3/2022 report Martin Lindqvist, President & CEO Leena Craelius, CFO October 25, 2022
Slide 2: Agenda
Agenda ►Q3/2022 in brief ►Financials ►Outlook and summary ►Q&A 2
Slide 3: Q3/2022 in brief
Q3/2022 in brief 3
Slide 4: Highlights in the third quarter
Highlights in the third quarter ► Operating profit exceeded last year ► SSAB Special Steels reached record operating profit (SEK m) 6,742 5,800 2,411 1,600 300 995 536 352 -973 34 Q3/18 Q3/19 Q3/20 Q3/21 Q3/22 Q3/18 Q3/19 Q3/20 Q3/21 Q3/22 ► Improved safety performance ► Strong balance sheet (LTIF,
Slide 5: Record earnings for SSAB Special Steels
Record earnings for SSAB Special Steels EBIT Operating profit, SEK m margin ► Unique global sales organization with 28.6% local stocks 2,411 ► Leading product offering 995 ► Driving market growth by developing 536 352 34 new applications Q3/18 Q3/19 Q3/20 Q3/21 Q3/22 Diversified sales Q&T main produ
Slide 6: Good demand for SSAB Americas
Good demand for SSAB Americas Operating profit, SEK million EBIT margin ► Plate price has decreased but remain at 3,036 36.6% a high level 1,882 790 528 ► Good demand in several segments -395 Q3/18 Q3/19 Q3/20 Q3/21 Q3/22 ► Infrastructure bill and energy demand could be positive for plate demand ove
Slide 7: Weaker market for SSAB Europe
Weaker market for SSAB Europe Operating profit, SEK million ► Weaker demand and low shipments in 2,524 EBIT Q3 margin 12.1% 1,447 ► Production adjusted for construction 460 related products -480 -631 ► Reduced capacity in Q4 – maintenance Shipments, ktonne work at one of the blast furnaces in Raahe
Slide 8: Tibnor and Ruukki Construction
Tibnor and Ruukki Construction Weaker European market impacting earnings Operating profit, SEK million ► Lower shipments Underlying profit ► Inventory losses due to the 515 negative price trend for steel 53 2 6 Tibnor -176 Q3/18 Q3/19 Q3/20 Q3/21 Q3/22 Operating profit, SEK million ► Slowdown in Con
Slide 9: Leading the green transition of the steel industry
Leading the green transition of the steel industry ► Hydrogen Iron & Steel Making forum in Stockholm, October 2022 9
Slide 10: Strong demand for fossil-free steel
Strong demand for fossil-free steel ► First customer partnership in the US in commercial vehicles – Oshkosh ► Volvo Trucks has begun small- scale introduction of SSAB fossil- free steel in heavy electric trucks 10
Slide 11: Transition of Nordic production according to plan
Transition of Nordic production according to plan ► The Swedish Energy Markets Inspectorate approved the application for two 130 kV power lines to SSAB’s steel mill in Oxelösund ► Feasibility studies for SSAB’s planned mini- Foto mills in Luleå and Raahe are ongoing ► Transition requires sufficient
Slide 12: HYBRIT production continues, and patent applications filed
HYBRIT production continues, and patent applications filed ► Direct reduced iron (DRI) with hydrogen creates a product with superior mechanical and aging properties compared to fossil- based reducing gas, such as natural gas ► Good feedback from pilot customers ► Hybrit Development AB has filed pate
Slide 13: Financials
Financials 13
Slide 14: Higher earnings vs Q3/21
Higher earnings vs Q3/21 Sales Shipments1 40,000 2,000 35,000 30,000 1,500 SEK million 25,000 ktons 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 19Q1 19Q2 19Q3 19Q4 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 22Q2 22Q3 EBITDA an
Slide 15: Change in operating profit Q3/22 vs. Q3/21
Change in operating profit Q3/22 vs. Q3/21 SEKm Higher raw material costs -1,030 6,805 -4,515 6,742 -360 -40 65 16 5,800 2021 Q3 Price and Volume Var COGS Fixed costs FX Capacity Other 2022 Q3 product mix utilization 15
Slide 16: Change in operating profit Q3/22 vs. Q2/22
Change in operating profit Q3/22 vs. Q2/22 SEKm Lower shipments in Europe and planned maintenance outage 10,395 Higher raw 265 material costs -1,970 -2,425 6,742 40 -260 2 695 2022 Q2 Price and Volume Var COGS Fixed costs FX Capacity Other 2022 Q3 product mix utilization 16
Slide 17: Higher earnings and higher working capital
Higher earnings and higher working capital SEK millions 2022 2021 2022 2021 2021 Q3 Q3 Jan-Sep Jan-Sep Full year EBITDA 7,451 6,582 27,681 14,341 22,094 Change in working capital -5,400 -2,693 -13,200 -4,458 -5,485 Maintenance capex -478 -461 -1,179 -1,030 -2,053 Other 198 49 511 -35 741 Operating c
Slide 18: Strong financial position
Strong financial position SEK m % 10,000 8,739 20 ►Group is debt free with net cash of SEK 8.7bn (-3.4bn) at 5,000 2,346 10 the end of Q3/22 0 0 -5,000 -10 -10,000 -20 -15,000 -30 -20,000 -40 2016 2017 2018 2019 2020 2021 Q3 2022 NetNet debt (-) interest / Net cash bearing debt,(+) SEKm Net gearing
Slide 19: Increasing purchase price for coking coal
Increasing purchase price for coking coal SSAB’s purchase price, year over year changes ► The purchase prices of iron ore affect the result after a lag of 96% around one quarter, while coking coal has a lag of around one and a Iron ore 5% 2% 6% half quarters -19% Q3/21 Q4/21 Q1/22 Q2/22 Q3/22 349% 2
Slide 20: Scrap prices
Scrap prices Scrap spot price ►SSAB’s average purchase price for scrap in Q3/22 was 25% lower (in terms of USD/gross ton USD) vs. Q2/22 600 ►Spot prices continued down in October 500 400 300 200 100 0 Jan-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Source: AMM 20
Slide 21: Major planned maintenance outages in 2022
Major planned maintenance outages in 2022 ► Total maintenance costs for 2022 expected to be SEK 1,590 m (1,270) ► SSAB Europe: Outage of one blast furnace in Raahe brought forward (start mid-November) Note: The estimates shown in table includes direct maintenance cost and cost of lower capacity util
Slide 22: Outlook and summary
Outlook and summary 22
Slide 23: SSAB's outlook for main customer segments Q4/2022
SSAB’s outlook for main customer segments Q4/2022 Segment Demand Comments Strong Neutral Weak Outlook for Q1 for SSAB’s key customer segments Heavy Transport Risk of further production stops in EU heavy-duty trucks, due to component shortages Stable demand in the US (Rail and Marine) Risk of f
Slide 24: SSAB's outlook for Q4/2022
SSAB’s outlook for Q4/2022 ► Weak European market Volume and pricing outlook ► Relatively stable heavy plate market in North Q4 2022 vs. Q3 2022 America Shipments Realized prices ► Impact from planned maintenance outages: − Lower shipments in SSAB Special Steels and SSAB Europe SSAB Special Steels S
Slide 25: Summary
Summary ► Strong earnings for Special Steels and Americas ► Continued good trend in safety ► Release of working capital in Q4 ► Uncertain market outlook − Structurally improved ability to manage downturn ► Plan for fossil-free steel production on track − Pilot shipments to partner customers on-going
Slide 26: Questions & Answers
Questions & Answers 26
Slide 27: Appendix
Appendix 27
Slide 28: Order intake
Order intake SSAB Europe, monthly order intake, tonnes 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 2101 2102 2103 2104 2105 2106 2107 2108 2109 2110 2111 2112 2201 2202 2203 2204 2205 2206 2207 2208 2209 28
Slide 29: Cash needs of the business
Cash needs of the business ►Total cash needs1) estimated at around SEK 11bn in 2022 (previously 8.5bn) ~11 ►Higher cash needs estimate due to higher taxes, as a result of earnings growth ~5 ►Higher strategic capex vs. 2021: − Oxelösund conversion 4.7 − Mobile Q&T expansion Capex (maintenance and str
Slide 30: Pilot shipments of fossil-free steel to partner customers
Pilot shipments of fossil-free steel to partner customers Unique value chain Pilot for hydrogen Construction storage Machinery Fossil-free pellet production at Mining LKAB HBI Fossil-free steel production at production at SSAB Automotive HYBRIT pilot plant 30
Slide 31: Debt portfolio duration and interest rate
Debt portfolio duration and interest rate Debt cost and duration ►Duration of the loan portfolio was 6.1 (6.7) years Years % ►Averaged fixed interest term was 1.0 (1.2) 8.0 4.00 years 7.0 3.50 6.0 3.00 ►Average interest rate was 3.0% (2.2%) 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
Slide 32: Maturity profile
Maturity profile Maturity profile Q3/2022 ►Liquid assets and committed credit lines at SEK 27.7 bn SEKm 30000 25000 Back-up 20000 facilities 15000 SEK 3.8bn 10000 Cash 5000 0 Cash and 2022 2023 2024 2025 2026+ back-up facilities 32
Slide 33: Strong result for SSAB Special Steels and SSAB Americas
Strong result for SSAB Special Steels and SSAB Americas EBIT, SEK million EBIT EBIT margin margin 2,411 28.6% 2,524 12.1% 1,447 995 SSAB SSAB 460 Europe 536 Special 352 34 Steels Q3/18 Q3/19 Q3/20 Q3/21 Q3/22 -480 -631 Q3/18 Q3/19 Q3/20 Q3/21 Q3/22 EBIT margin 3,036 36.6% 515 1,882 790 528 SSAB 53 2
Slide 34: A stronger, lighter and more sustainable world
A stronger, lighter and more sustainable world