United States Steel Corporation · NYSE:X
United States Steel — Q1 2019 Earnings Presentation
19 slides from United States Steel's earnings presentation, May 3, 2019
Slide 1: First Quarter 2019 Earnings Call
First Quarter 2019 Earnings Call David Burritt – President and Chief Executive Officer Kevin Bradley – Executive Vice President and Chief Financial Officer Sara Greenstein – Senior Vice President, Consumer Solutions Kevin Lewis – General Manager, Investor Relations May 3, 2019 www.ussteel.com
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 first quarter and full year of 2019. They should be read in conjunction with the consolidated financi
Slide 3: Explanation of Use of Non-GAAP Measures
Explanation of Use of Non-GAAP Measures 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 enhan
Slide 4: Today's Highlights
Today’s Highlights Endless Casting and Rolling Investment First Quarter 2019 Results ▪ $1.2 Billion investment1 ▪ 1Q adjusted EBITDA: $285 million ▪ First state-of-the-art endless ▪ 1Q adjusted EPS: $0.47 casting and rolling line in the U.S. ▪ Balance sheet and capital structure ▪ $35/ton reduction
Slide 5: Building a Solid Foundation for Our Future
Building a Solid Foundation for Our Future OUR STRATEGY CRITICAL SUCCESS FACTORS ▪ Enhance operational excellence: 1 safe, environmentally responsible, reliable and cost effective Move Down the Cost Curve operations ▪ Create operating leverage: 2 revitalized steelmaking assets with Win in Attractive
Slide 6: Positions the Mon Valley to Compete and Win
Positions the Mon Valley to Compete and Win Expands Structural Cost Greater Footprint Optionality Advantage at Mon Valley by $35/ton Improves yields significantly Expands ability to serve a broader range of markets and customers Requires less externally Facilitates improved product loading purchased
Slide 7: A Cogen Improves Our Environmental Performance and Energy Efficiency
A Cogen Improves Our Environmental Performance and Energy Efficiency Cogeneration Facility Environmental Benefits Improves the energy efficiency of the Mon Valley Works Complex Significantly reduces air emissions and significantly improves overall ▪ environmental performance of our A cogeneration fa
Slide 8: Creating New Boundaries Through Dimensions and Differentiation
Creating New Boundaries Through Dimensions and Differentiation Investment: Asset Revitalization Endless Casting and Rolling New Boundaries: More Automotive Line Pipe HRC AHSS Industrial HRC Ability to to Ability HRC Differentiate Less Going thinner Going thicker Thin Steel Gauge Thick 8
Slide 9: Proactively De-Risked Our Debt Maturity Profile
Proactively De-Risked Our Debt Maturity Profile MaturityReduction profile in Reduction in near-term significantlycontrollableDebt overheadextended Maturity~$150M2025 maturities ~$1.8B next significant EBITDA opportunity Reduction in near-term Profile Debt maturity maturities March 2019: $317M $752M
Slide 10: A Compelling Investment Supported by Flexible Financing
A Compelling Investment Supported by Flexible Financing ~$1.2B 15+% capital return on investment1 investment Opportunistically optimize financing with a combination of the following: 2019 2020 2021 2022 ▪ Vendor-supported financing ~$60M ~$400M ~$650M ~$90M ▪ Senior unsecured notes ▪ Cash / ABL ----
Slide 11: Technology investments expected to drive significant EBITDA accretion
Technology investments expected to drive significant EBITDA accretion USSK Dynamo Line EBITDA benefits from technology investments ~$390M 3-4 years out EBITDA opportunity USSK Dynamo Line ~$130M Capex ~$390M 2021 EBITDA ~$35M Completion of ~$80M Tubular EAF Endless Casting ~$280M1 Capex Tubular EAF
Slide 12: First Quarter 2019 Financial Highlights
First Quarter 2019 Financial Highlights Flat-rolled Adjusted EBITDA1 $ Millions $199 • Total first quarter adjusted EBITDA1 of $123 $285 million 1Q 2018 1Q 2019 Adjusted 1 6% 8% EBITDA 1 Margin: • Year-over-year adjusted EBITDA U. S. Steel Europe Adjusted EBITDA1 $ Millions improvement of $30 millio
Slide 13: Recap
Recap • Strong 1Q financial performance • Game changing investment at the Mon Valley • Other technology investments expected to drive a significant expansion in margins 13
Slide 14: Q & A
Q & A
Slide 15: Closing Remarks
Closing Remarks
Slide 16: Reconciliation of reported and adjusted diluted EPS
Reconciliation of reported and adjusted diluted EPS ($ / share ) 1Q 2018 1Q 2019 Reported diluted EPS $0.10 $0.31 Clairton coke making facility fire ─ 0.16 Loss on debt extinguishment and other related costs 0.27 ─ Granite City Works temporary idling charges (0.05) ─ Adjusted earnings per diluted sh
Slide 17: Reconciliation of segment EBITDA
Reconciliation of segment EBITDA Segment EBITDA – Flat-Rolled 1Q 2018 1Q 2019 ($ millions) Segment earnings before interest and income taxes $33 $95 Depreciation 90 104 Flat-Rolled Segment EBITDA $123 $199 Segment EBITDA – U. S. Steel Europe 1Q 2018 1Q 2019 ($ millions) Segment earnings before inter
Slide 18: Reconciliation of adjusted EBITDA
Reconciliation of adjusted EBITDA ($ millions) 1Q 2018 1Q 2019 Reported net earnings attributable to U. S. Steel $18 $54 Income tax provision 1 8 Net interest and other financial costs 118 49 Reported earnings before interest and income taxes $137 $111 Depreciation, depletion and amortization expens
Slide 19: Investor Relations
INVESTOR RELATIONS Kevin Lewis General Manager 412-433-6935 klewis@uss.com Eric Linn Manager 412-433-2385 eplinn@uss.com www.ussteel.com