United States Steel Corporation · NYSE:X
United States Steel — Q2 2022 Earnings Presentation
37 slides from United States Steel's earnings presentation, Jul 28, 2022
Slide 1: Second Quarter 2022 Earnings Presentation
Second Quarter 2022 Earnings Presentation www.ussteel.com July 28, 2022
Slide 2: Legal disclaimers
Legal disclaimers 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 second quarter 2022. Financial results as of and for the periods ended June 30, 2022 provided herein
Slide 3: Explanation of use of non-GAAP measures
Explanation of use of non-GAAP measures We present adjusted net earnings, earnings before interest, income taxes, depreciation and amortization (EBITDA) and adjusted EBITDA, which are non-GAAP measures, as additional measurements to enhance the understanding of our operating performance. We believe
Slide 4: Bullish for 2022 and advancing towards our Best for All future
CURRENT LANDSCAPE CHALLENGES SOLUTION PATH FORWARD Bullish for 2022 and advancing towards our Best for All future Delivering on Best for All Transitioning to a less capital- and carbon- intensive business model while becoming the best steel competitor Expanding competitive advantages Balanced capita
Slide 5: Advancing towards our Best for All future
ADVANCING TOWARDS OUR BEST FOR ALL FUTURE
Slide 6: Delivering for all our stakeholders
6 6 Advancing towards our Best for All future Delivering for all our stakeholders Providing customers with profitable steel solutions for people and planet Delivering profitable solutions ✓ ✓ ✓ Growing competitive advantages Improving through-cycle performance Developing quality products & customer
Slide 7: Growing competitive advantages
7 7 Advancing towards our Best for All future Growing competitive advantages LOW-COST IRON ORE MINI MILL STEELMAKING BEST-IN-CLASS FINISHING CAPABILITIES U. S. Steel’s Competitive Advantages:
Slide 8: Expanding our iron ore capability: advantaged pig iron strategy
8 8 Advancing towards our Best for All future Expanding our iron ore capability Advantaged pig iron strategy Annual production of up to 500k tons Realizing efficiency synergies at Gary Works Excess iron production at Gary Works to feed pig machine Unique solution to supply Big River Steel Expected t
Slide 9: Investing in DR-grade pellet capability
9 9 Advancing towards our Best for All future Expanding our iron ore capability Investing in DR-grade pellet capability Enabling Keetac to create DR-grade pellets while maintaining flexibility to produce blast furnace-grade pellets Maintaining optionality while serving the growing EAF market Optiona
Slide 10: Progressing towards pig iron at Granite City Works
10 10 Advancing towards our Best for All future Expanding our iron ore capability Mutually beneficial transaction structure Non-binding letter of intent with SunCoke to acquire Granite City’s blast furnaces; producing pig iron for USS Increasing self-sufficiency of EAF1 metallics Working towards 40%
Slide 11: Progressing towards pig iron at Granite City
11 11 Advancing towards our Best for All future Progressing towards pig iron at Granite City U P D A T E U. S. Steel:SunCoke: Acquiring Granite City blast furnaces Building 2 million tons of pig iron capability supplying Expected to be operational in 2H 2024 100% Access to pig iron production $0 No
Slide 12: Increasing self-sufficiency of Mini Mill metallics
12 12 Advancing towards our Best for All future Increasing self-sufficiency of Mini Mill metallics ~35% ~25% ~10% ~20% ~10% ~5% ~40% ~35% ~15% ~5% Sourced internally~10% Sourced internally~40% Metallics needs of Mini Mill segment: TODAY1: 20242: illustrativePrime Scrap (internally sourced) Pig Iron
Slide 13: Expanding our mini mill steelmaking advantage
13 13 Advancing towards our Best for All future Expanding our mini mill steelmaking advantage Capital Spending Tons of Raw Steel Capability Run-rate EBITDA by ‘26 BR2 MINI MILL STEELMAKING Comprehensive suite of finishing assets AHSS galvanizing / hot-roll galvanizing / painting / slitting Expanding
Slide 14: Capturing strategic market growth: NGO steel
14 14 Advancing towards our Best for All future Capturing strategic market growth ~$450M Capital Spending ~200k Tons of Finishing Capability Run-rate EBITDA by ‘26 NGO STEEL BEST-IN-CLASS FINISHING CAPABILITY ~$140M Meeting the growing electric vehicle demand Non-grain oriented (NGO) electrical stee
Slide 15: Capturing strategic market growth: coating line
15 15 Advancing towards our Best for All future Capturing strategic market growth ~$280M Capital Spending ~325k Tons of Finishing Capability Run-rate EBITDA by ‘26 COATING LINE BEST-IN-CLASS FINISHING CAPABILITY ~$60M Expanding our presence in value-add construction Galvalume steel for exposed build
Slide 16: Growing competitive advantages: strategic investment timeline
16 16 Advancing towards our Best for All future Growing competitive advantages 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) BR2 (1H ‘22 – ‘24) Strategic investment timeline: Low-cost iron ore Ga
Slide 17: Unlocking future earnings power
17 17 Advancing towards our Best for All future Unlocking future earnings power BR2 MINI MILL STEELMAKING $650M Run-rate EBITDA by ‘26 NGO STEEL BEST-IN-CLASS FINISHING $140M Run-rate EBITDA by ‘26 COATING LINE BEST-IN-CLASS FINISHING $60M Run-rate EBITDA by ‘26 2022 20242023 2025 $830M 2026+ $880M
Slide 18: Balanced capital allocation approach
18 18 Advancing towards our Best for All future Balanced capital allocation approach INVESTING: Unlocking future earnings power with strategic projects Disciplined and efficient approach to value creation REWARDING: Returning excess capital to stockholders
Slide 19: Returning excess capital to stockholders
19 19 Advancing towards our Best for All future Returning excess capital to stockholders $800M $300M stock buyback (announced Oct. ’21) $500M stock buyback (announced Jan. ’22) $150M Completed in 4Q 2021 $123M Completed in 1Q 2022 $0.05 per share Quarterly dividend Quarterly dividend is part of an e
Slide 20: Progressing towards a more sustainable future
20 20 Advancing towards our Best for All future Progressing towards a more sustainable future U. S. Steel’s 2021 Sustainability Report access the complete document HERE Reducing greenhouse gas emissions intensity Building ESG leadership Reinforcing our “Safety First” culture; consecutive years of re
Slide 21: Second Quarter 2022 Update
SECOND QUARTER 2022 UPDATE
Slide 22: Improving on record safety performance
Second quarter 2022 update Improving on record safety performance 0.10 0.07 0.06 0.03 YTD 20222019 2020 2021 BLS - Iron & Steel: 0.70 Benchmark 1 : OSHA Days Away from Work 2 Safety first: Consecutive years of record-setting performance 221 BLS – Iron & Steel 2020 data. 2 Occupational Safety and Hea
Slide 23: Financial updates
Reported Net Earnings (Loss) $ Millions Profit Margin: $964 $1,543 $1,038 $891 $1,104 3Q 20212Q 2021 4Q 2021 1Q 2022 2Q 2022 Adjusted Net Earnings (Loss) $ Millions Adjusted Profit Margin: $1,084 $1,831 $1,524 $1,139 $1,422 2Q 2021 3Q 2021 1Q 20224Q 2021 2Q 2022 Segment EBIT1 $ Millions Segment EBIT
Slide 24: EBITDA Bridge: Flat-Rolled segment
EBITDA Bridge $ Millions, 1Q 2022 vs. 2Q 2022 EBITDA Margin: 23% 30%32% $703 $1,135 $1,017 $636 $902 2Q 20223Q 20212Q 2021 4Q 2021 1Q 2022 21% $636 $902 $284 1Q 2022 Commercial ($85) $32 Raw Materials $35 Operating Costs Other 2Q 2022 Commercial: The favorable impact is primarily the result of highe
Slide 25: Mini Mill segment EBITDA and key statistics
Segment EBITDA $ MillionsOperating Statistics EBITDA Bridge $ Millions, 2Q 2021 vs. 2Q 2022 Mini Mill segment Key statistics EBITDA Bridge $ Millions, 1Q 2022 vs. 2Q 2022 $318 $309 $57 Operating Costs Commercial1Q 2022 ($45) Raw Materials ($25)$4 Other 2Q 2022 Commercial: The favorable impact is pri
Slide 26: U. S. Steel Europe segment
Other: The unfavorable impact is primarily the result of increased energy costs and the weakening of the Euro vs. the U.S. dollar. Segment EBITDA $ MillionsOperating Statistics EBITDA Bridge $ Millions, 2Q 2021 vs. 2Q 2022 $232 $302 $430 ($109) Raw Materials 2Q 2021 Commercial ($221) ($30) Operating
Slide 27: Tubular segment EBITDA bridge
EBITDA Bridge $ Millions, 2Q 2021 vs. 2Q 2022 $119 $133 ($17) 2Q 2021 $2 $11 Commercial Raw Materials Operating Costs ($10) Other 2Q 2022 Commercial: The favorable impact is primarily the result of higher average realized prices and higher volumes, partially offset by continued low-priced imports. R
Slide 28: Utilization rate impacted by planned outages
Second quarter 2022 update Utilization rate impacted by planned outages ~89% Adjusted Raw Steel Utilization NA Flat-Rolled segment Adjusted for Gary Works #8 blast furnace planned outage and indefinitely idled Granite City ‘A’ blast furnace capacity 28
Slide 29: Global operating footprint
Operating Indefinitely Idled N o rt h A m e ri c a n F la t- R o ll e d T u b u la r E u ro p e MinntacIron ore pellets Keetac – 22.4 Cokemaking Clairton – 4.3 Gary BF #4 BF #6 BF #8 BF #14 – 7.5 Granite City BF ‘A’ BF ‘B’ 1.4 2.8 Great Lakes2 – – Mon Valley BF #1 BF #3 – 2.9 Košice BF #3BF #2BF #1
Slide 30: Cash and liquidity
Cash and liquidity $938 $682 $138 $4,090 $1,676 YE 2019 YE 2021YE 2020 1H 2022YE 2018 Cash from Operations $ Millions Cash and Cash Equivalents $ Millions Total Estimated Liquidity $ Millions Net Debt $ Millions $1,000 $749 $1,985 $2,522 $3,035 YE 2019 YE 2020 YE 2021 1H 2022YE 2018 $2,830 $2,284 $3
Slide 31: Appendix
APPENDIX
Slide 32: Additional Big River Steel LLC summary data
Additional Big River Steel LLC1 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 2Q 2022 Intersegment Sales Net Sales EBIT2 $838M $147M $985M $270M Total Assets $3,718M Depreciation Capital Expenditures4 $35M $87M 2029 senior secured notes $720M Environmen
Slide 33: Segment EBITDA reconciliation
Flat-Rolled ($ millions) 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 Segment earnings before interest and income taxes $579 $1,015 $890 $513 $777 Depreciation and amortization 124 120 127 123 125 Flat-Rolled Segment EBITDA $703 $1,135 $1,017 $636 $902 U. S. Steel Europe ($ millions) 2Q 2021 3Q 2021 4Q 2
Slide 34: Reconciliation of net debt
Net Debt ($ millions) YE 2019 YE 2020 YE 2021 1H 2022 Short-term debt and current maturities of long-term debt $14 $192 $28 $54 Long-term debt, less unamortized discount and debt issuance costs 3,627 4,695 3,863 3,869 Total Debt $3,641 $4,887 $3,891 $3,923 Less: Cash and cash equivalents 749 1,985 2
Slide 35: Reconciliation of reported and adjusted net earnings
Reconciliation of reported and adjusted net earnings ($ millions) 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 FY 2021 Reported net earnings attributable to U. S. Steel $1,012 $2,002 $1,069 $882 $978 $4,174 Debt extinguishment ─ 26 10 ─ ─ 290 Asset impairment charges 28 ─ 245 6 151 273 Restructuring and
Slide 36: Reconciliation of adjusted EBITDA
Reconciliation of adjusted EBITDA ($ millions) 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 Reported net earnings attributable to U. S. Steel $1,012 $2,002 $1,069 $882 $978 Income tax provision (benefit) (37) 260 (54) 246 284 Net interest and other financial costs 59 80 130 (10) (8) Reported earnings bef
Slide 37: 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 @USS_Investors