Cleveland-cliffs Inc. · NYSE:CLF

Cleveland-cliffs — Merger or Acquisition (July 2024)

19 slides from Cleveland-cliffs's merger presentation, Jul 15, 2024

  1. Slide 1: Cleveland-Cliffs Announces the Acquisition of Stelco

    CLEVELAND-CLIFFS ANNOUNCES THE ACQUISITION OF STELCO Investor Presentation July 15th, 2024 © 2024 Cleveland-Cliffs Inc. All Rights Reserved.

  2. Slide 2: Forward-Looking Statements

    FORWARD-LOOKING STATEMENTS This presentation contains statements that constitute "forward-looking statements" within the meaning of the U.S. federal securities laws and applicable Canadian securities laws. All statements other than historical facts, including, without limitation, statements regardin

  3. Slide 3: Cleveland-Cliffs to Acquire Stelco

    CLEVELAND-CLIFFS TO ACQUIRE STELCO Confirms Cliffs’ commitment and leadership in integrated steel production ✓ in North America and strengthens Cliffs’ cost position by incorporating one of the lowest cost flat-rolled steelmaking assets in North America ✓ Maintains Canadian national interests by pro

  4. Slide 4: Transaction Overview

    TRANSACTION OVERVIEW • Cleveland-Cliffs to acquire Stelco for per share consideration of CAD$60.00 in cash and an exchange rate of 0.454 (or CAD$10.00 per share) in Cleveland-Cliffs common stock, representing total consideration of CAD$70.00 per share as of July 12, 2024 Transaction Structure and Ow

  5. Slide 5: Growing Our USW Partnership

    GROWING OUR USW PARTNERSHIP Supporting Statement from USW Leadership On behalf of our entire membership, I am excited for this transaction and proud to support a deal that is great for the resilience of manufacturing and Union jobs in North America. Cleveland-Cliffs has a proven track record of maki

  6. Slide 6: A Premier, Low-Cost Canadian Steel Producer

    A PREMIER, LOW-COST CANADIAN STEEL PRODUCER 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 $650M+ invested since 2017 $200M+ invested since 2017 $480 • One of the lowest cost steelma

  7. Slide 7: 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

  8. Slide 8: Highly Efficient Operational Footprint

    HIGHLY EFFICIENT OPERATIONAL FOOTPRINT Vertically integrated operations support efficiency and high margin profile Coal Iron Ore & Limestone Scrap Slabs 1 3 4 5 Coke Slabs Molten Hot- Iron Rolled Coil Lake Erie Coke Battery Blast Furnace Basic oxygen Furnace and Twin Casters Hot Strip Mill Pickle Li

  9. Slide 9: Combined Footprint Bolsters Canadian Presence

    COMBINED FOOTPRINT BOLSTERS CANADIAN PRESENCE Nearby operating locations in the Great Lakes region United Taconite Hibbing Northshore Minorca Tilden MI MN Ontario WI Hamilton Works MI NY Lake Erie Windsor & Ontario Works FPT FPT Ontario Cleveland-Cliffs Headquarters (Cleveland)Hibbing Taconite Mine

  10. Slide 10: Premier and Dynamic North American Steel Producer

    PREMIER AND DYNAMIC NORTH AMERICAN STEEL PRODUCER 2023 US & Canada Shipments – Top Steel Producers (million net tons) Includes flat and long products 23.3 19.0 16.4 12.8 11.6 (1) 6.5 5.0 3.0 2.9 2.6 2.2 1.7 (2) Pro Forma Source: Company Filings | Note: (1) Based on AM NA total shipments of 11.6 mill

  11. Slide 11: Further Enhances Scale and Margin

    FURTHER ENHANCES SCALE AND MARGIN Highly strategic transaction enhances Cliffs’ scale and margin profile LTM Sales and Steel Shipments LTM Adj. EBITDA* and Margin 16.3 NT 2.6 NT 18.9 NT 9.5% 18.6%(1) 10.8% $2,207(2) $24,107 Synergies $120 $2,611 Shipments and Sales In Millions (2) $21,900 $2,082 $40

  12. Slide 12: Improves Diversification Across End Markets

    IMPROVES DIVERSIFICATION ACROSS END MARKETS Enhance customer diversification across construction and industrial end markets 2023 End Market Mix by Revenue 14% 2% 14% Steel 13% Direct Steel Producers Producers Other Automotive & Other 35% 32% Direct Direct Automotive Automotive Pro 25% Forma Distribu

  13. Slide 13: Increases Volume of Spot Sales in the Mix

    INCREASES VOLUME OF SPOT SALES IN THE MIX 2023 Flat-Rolled Spot/Non-Contractual Sales Volume Highlights ~27% 5.1MT Doubles Cliffs’ exposure to the North American spot market of Total PF Sales Volume Net Tons (In Millions) Gives Cliffs further insight into spot 2.5M (1) market dynamics Further divers

  14. Slide 14: Strong Pro Forma Balance Sheet

    STRONG PRO FORMA BALANCE SHEET Pro forma company will continue to have a very solid balance sheet with low leverage, strong liquidity, and will prioritize reducing leverage post-acquisition Net Debt / Adjusted EBITDA Highlights 3.5x 3.6x Lowest initial leverage in Cliffs’ three major steel acquisiti

  15. Slide 15: Substantial Cost Synergy Opportunities

    SUBSTANTIAL COST SYNERGY OPPORTUNITIES ~$120 million in annual savings with no impact to union jobs Primary Opportunities ✓ Increased throughput at low-cost Lake Erie Works with HBI use in BF & BOF ✓ Optimization of overlapping capabilities and material flows ✓ Use of excess low-cost coke within U.S

  16. Slide 16: Best in Class Integrated Emissions Profile

    BEST IN CLASS INTEGRATED EMISSIONS PROFILE Stelco to further leverage Cliffs’ industry leading technology to continue to reduce emissions 2023 Average Intensity of Integrated Mills (Scope 1 & 2) 1.54 1.57 1.98 Global Average 2.15(1) Metric tons CO2e / metric ton crude steel Note: (1) CRU as of 2/22/

  17. Slide 17: Transaction Benefits to Canada

    TRANSACTION BENEFITS TO CANADA Expanding on Cliffs’ existing Canadian footprint and building on Stelco’s progress Cliffs’ Current Canadian Involvement Stronger Together ✓ ~1,000 employees across 8 operating locations in ✓ Stelco’s historic name and legacy to be preserved with Canada (7 Tooling & Sta

  18. Slide 18: LTM 3/31/24 Adjusted EBITDA Reconciliation

    LTM 3/31/24 ADJUSTED EBITDA RECONCILIATION Cliffs and Stelco LTM Adjusted EBITDA Reconciliation ($ in millions) (C$ in millions) Net Income (loss) $439 Net Income (loss) C$223 Income Tax Expense 153 Depreciation 125 Interest Expense, net 276 Finance Costs 117 Depreciation, Depletion & Amortization 9

  19. Slide 19: © 2024 Cleveland-Cliffs Inc. All Rights Reserved.

    © 2024 Cleveland-Cliffs Inc. All Rights Reserved.

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