Algoma Steel Group Inc. · NASDAQ:ASTL
Algoma Steel — Q2 FY2022 Earnings Presentation
15 slides from Algoma Steel's earnings presentation, Nov 12, 2021
Slide 1: Earnings Call Presentation
Earnings Call Presentation For the Quarter ending September 30, 2021 November 12th, 2021 in Canadian dollars unless otherwise noted
Slide 2: Disclaimer (1/2)
Disclaimer (1/2) CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This presentation contains “forward-looking information” under applicable Canadian securities legislation and “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 (colle
Slide 3: Disclaimer (2/2)
Disclaimer (2/2) . PRESENTATION OF FINANCIAL INFORMATION The Company’s fiscal year runs from April 1st to March 31st. The Company and its subsidiaries’ functional currency is the United States dollar (“US dollar” or “US$”). The US dollar is the currency of the primary economic environment in which t
Slide 4: Earnings Call Agenda
Earnings Call Agenda Safety Performance / COVID-19 Update Today’s Presenters: EAF Update Michael McQuade Debt Reduction / Capital Structure Chief Executive Officer Financial Performance Rajat Marwah Chief Financial Officer Market Update / Guidance Strategic Update Questions & Answers 3
Slide 5: Safety Without Compromise
Safety Without Compromise Continued Focus and Improvement in Lost Time Injury Frequency Rate (LTIFR) Health & Safety Performance • Ongoing commitment to superior Health & Safety performance has led to sustained improvement of safety metrics over time 1.30 • Health & safety remains our highest priori
Slide 6: Algoma's EAF Conversion Project: a generational opportunity
Algoma’s EAF Conversion Project: a generational opportunity Raw Materials Materials Ironmaking Steelmaking Expected Benefits of EAF Preparation ~Adds ~700kt of finished steel capacity aligning steelmaking Iron Ore capacity to rolling capacity Blast Furnace Mill (Algoma Today) Reduced conversion
Slide 7: EAF Investment in Algoma (cont'd)
EAF Investment in Algoma (cont’d) We believe Algoma is Well-Prepared to Integrate the Key Anticipated Benefits for Algoma Proposed EAFs Adds 900kt of incremental liquid steel capacity, or ~700kt of finished steel capacity • Algoma intends to contract with technology suppliers Improves operationa
Slide 8: Targeted Debt Reduction
Targeted Debt Reduction Key benefits: • 100% redeemable at par with no penalty Docks Term Loan Amount: $73M USD Current Balance: $56M • Eliminate approx. USD$8.25M in quarterly interest payments Close Date: 11/30/2018 Tenor: 6.5 Years Rate : L+500 • Active de-leveraging of balance sheet, improving c
Slide 9: Key Performance Highlights
Key Performance Highlights Q2 FY 2022 - Ended September 30, 2021 • Shipment volume was 587 kNT in Q2 FY 2022, down 4% from 610 kNT in Q1 FY 2022 and up 14% from 516 kNT in Q2 FY 2021 • Steel Revenue: was $937 million in Q2 FY 2022, up 30% from $723 million in Q1 FY 2022 and up 179% from $335 million
Slide 10: Second Quarter Financial Highlights
Second Quarter Financial Highlights1 Q2 FY 2022 vs Q2 FY 2021 vs Q1 FY 2022 Shipping volume (‘000s tons) 587 516 14% 610 -4% Net Sales Realization per ton ($/ton) 1,594 649 146% 1,185 35% Steel Revenue($ million) 937 335 179% 723 30% Cost of Steel Products Sold ($/ton) 857 626 37% 695 23% Adjusted E
Slide 11: Market Update
Market Update North American HRC and Plate prices peaked but remain near all-time highs Historical Hot Rolled Coil and As Rolled Plate Prices (US$/ton) Key Market Drivers $2,200 • Infrastructure stimulus spending in North CRU Index HRC / ARP America could boost demand for U.S. steel by $2,000 5 mill
Slide 12: Third Quarter Outlook
Third Quarter Outlook1 Third Quarter FY 2022 directional guidance: Shipments ('000s kNT) 620 Shipments (NT) 590-610K 600 580 Net Sales Realization per ton 560 540 +/- Adjusted EBITDA $450M+ 520 500 Operating Cash Flow 480 460 Q2 Q1 Q2 Q3 FY 2021 FY 2022 Guidance Net Sales Realization per ton ($/ton)
Slide 13: Committed to our path forward, working to create a track record of success
Committed to our path forward, working to create a track record of success Strategic Direction Operational & Capital DSPC Automation Ladle Met Furnace Project Aurora Plate Mill EAF Project Improvements Upgrade #2 $50M expected Modernization Received board approval and 1 Improves grade debottlenecks
Slide 14: Annex: Adjusted EBITDA Reconciliation
Annex: Adjusted EBITDA Reconciliation Algoma Steel Group Inc. Reconciliation of Net Income (Loss) to Adjusted EBITDA July 1 to September 30 April to September 30 millions of dollars FY 2022 FY 2021 FY 2022 FY 2021 Net income (loss) $288.2 ($60.0) $492.1 ($102.7) Amortization of property, plant and e
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