Ssab Ab Class A · OMXSTO:SSAB_A
Ssab Ab Class A — Q2 2023 Earnings Presentation
29 slides from Ssab Ab Class A's earnings presentation, Jul 21, 2023
Slide 1: Presentation of the Q2/2023 report
SSAB Presentation of the Q2/2023 report Martin Lindqvist, President & CEO Leena Craelius, CFO July 21, 2023
Slide 2: Agenda
Agenda − Q2/23 in brief − Financials − Outlook and summary − Q&A 2
Slide 3: Q2/23 in brief
Q2/23 in brief SSAB
Slide 4: Highlights in Q2
Highlights in Q2 Somewhat higher Focus on actions Good trend in Strong earnings vs. Q1/23 to lower costs safety balance sheet 10,395 4.20 14.3 3.70 11.7 +5% 6,742 2.3 4,733 4,963 1.80 3,768 1.06 1.01 -10.3 -11.7 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 2019 2020 2021 2022 Q2/23 2019 2020 2021 2022 Q2/23 Operat
Slide 5: SSAB Special Steels
SSAB Special Steels Earnings on good Shipments improving level from Q1/23 +4% 2,373 2,390 2,094 2,003 396 336 349 364 305 1,369 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 Operating result (adj), SEK m Shipments, ktonnes − Q4/22 impacted by − European market weaker planned maintenanc
Slide 6: SSAB Americas
SSAB Americas Earnings on Shipments Stable market good level somewhat lower prices during H1 -5% 3,511 -1% 476 476 120 451 3,034 416 418 100 2,725 2,675 2,642 80 60 40 20 0 2112 2203 2206 2209 2212 2303 2306 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 Operating result (adj), SEK m Sh
Slide 7: SSAB Europe
SSAB Europe Higher result vs. Stable production Shipments Market prices previous quarter during H1 stable decreased in Q2 -1% 4,069 1,049 1,068 905 1,141 1,142 912 907 160 838 778 140 713 120 100 1,446 80 764 60 0 40 20 -229 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 0 Q2/22 Q3/22 Q
Slide 8: Tibnor and Ruukki Construction
Ruukki Tibnor Construction Inventory losses Further actions to Lower shipments continue Weak market reduce cost -15% 242 608 2,020 +17% 209 229 212 206 1,739 183 1,534 1,559 156 1,329 1 -50 -181 10 -408 -1 -9 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 Q
Slide 9: Leading the green transformation – Q2 summary
Leading the green transformation – Q2 summary Photo − Ramp-up of SSAB Zero − Investment decision in Oxelösund − Study to explore possibilities for DRI in Raahe − High-level TTC meeting in Luleå 9
Slide 10: Plan to fossil-free production on track
Plan to fossil-free production on track Stepwise transformation 1 2 3 4 Zero Steel Oxelösund EAF 1st Mini-Mill 2nd Mini-Mill • Produce Zero steel • Replace current • First mini-mill • Second mini-mill in Iowa, USA blast furnaces and operational – either operational – either • Continue fossil-free co
Slide 11: Luleå mini-mill and Raahe mini-mill
Luleå mini-mill Raahe mini-mill − Policy decision in Jan 2022 − Policy decision in Jan 2022 − Dependent on grid connection and electricity − Positive signals on grid connections and – discussions on-going with relevant electricity authorities − Close blast furnace, coke plant and strip mill − Integr
Slide 12: Financials
Financials SSAB
Slide 13: Some improvement in Q2/23 vs. Q1/23
Some improvement in Q2/23 vs. Q1/23 Revenue (SEK million) Steel shipments (ktonnes) 40,000 2,000 35,000 30,000 1,500 25,000 20,000 1,000 15,000 10,000 500 5,000 0 0 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1 23Q2 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 22Q2 22Q3 22Q4 23Q1
Slide 14: Change in operating result (adj) Q2/23 vs. Q1/23
Change in operating result (adj) Q2/23 vs. Q1/23 Weaker SEK impacted raw material. Inventory adjustments and higher CO2 cost -105 -645 1,270 -420 4,963 4,733 40 90 Mainly SSAB Summer temps and Europe higher repair & maintenance Q1/23 Price Volume Variable Fixed costs FX Capacity Q2/23 COGS utilizati
Slide 15: Change in operating result (adj) Q2/23 vs. Q2/22
Change in operating result (adj) Q2/23 vs. Q2/22 Lower prices in SSAB Europe and 10,395 SSAB Americas -2,895 Weaker SEK impacted raw material. Inventory adjustments and higher CO2 cost -300 -2,055 4,963 -365 58 125 Q2/22 Price Volume Variable COGS Fixed costs FX Capacity Q2/23 utilization 15
Slide 16: Solid cash flow
Solid cash flow Q2/23 Q2/22 2022 SEK millions FY EBITDA 5,871 11,234 32,340 Change in working capital 1,094 -3,396 -8,279 Maintenance capital expenditures -473 -429 -2,196 Other -211 -286 828 Operating cash flow 6,281 7,124 22,693 Financial items 91 -42 -17 Income taxes -1,672 -1,636 -5,947 Cash flo
Slide 17: Strong financial position
Strong financial position − Net cash of SEK 11.7bn at the end of SEK m Q2/23 15,000 14,287 − Net debt/equity ratio -17% (-8%) 11,707 10,000 − Dividend paid in Q2 (SEK 8.70 per share), corresponding to a total of 5,000 SEK 9bn 2,346 0 − Sustainability linked bond in Q2 – strong interest from the fina
Slide 18: Raw material
Raw material SSAB’s purchase price, year over year changes Market prices (AMM) Iron ore Coking coal Scrap USD/gross ton 21% 349% 450 400 5% 6% 211% 350 2% 300 120% 128% 250 -4% 200 44% 150 100 -19% -6% 50 -24% -37% 0 Q4/21 Q1/22 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 Q4/21 Q1/22 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23
Slide 19: Cash needs of the business
Cash needs of the business − Total cash needs1) in 2023 estimated at around SEK 11bn (unchanged) ~11 − Higher strategic capex vs. 2022 due to ramp-up of Oxelösund conversion 10.0 Capex − As a starting point, a stable taxes paid has been assumed. It (maintenance ~5 will, however, depend on the level
Slide 20: Expected maintenance costs
Expected maintenance costs − SSAB’s total maintenance costs for 2023 are expected to be SEK 1,550 (1,540) million, unchanged to previous forecast SEK million Q1/23 Q2/23 Q3/23 Q4/23 FY − Most maintenance to be carried out in Q4 2023 SSAB Special Steels - - 75 600 675 SSAB Europe - - 350 200 550 SSAB
Slide 21: Outlook and summary
Outlook and summary SSAB
Slide 22: SSAB's outlook for main customer segments Q3/2023
SSAB’s outlook for main customer segments Q3/2023 Segment Demand Comments Strong Neutral Weak - Signs of slowdown in heavy trucks in Europe Heavy Transport - Healthy demand from rail car and shipbuilding in the US - Structurally growing AHSS market Automotive - Signs of slowdown of car demand (infla
Slide 23: SSAB's outlook for Q3/2023
SSAB’s outlook for Q3/2023 - Demand in Europe weakened during Q2 and there is a risk of a more pronounced downturn than normal in Q3 Volume and pricing outlook - Demand on the heavy plate market in North America is expected to continue at Q3/23 vs. Q2/23 Shipments Realized prices a good level SSAB S
Slide 24: Summary
Summary − Continued good trend in safety − Weaker European market – measures to reduce cost − Good cash flow generation − Strong financial position − Leading the green transition − Investment decision for Oxelösund − Ramp-up of SSAB Zero − Exploring possibilities for DRI in Raahe 24
Slide 25: Questions and Answers
Questions and Answers SSAB
Slide 26: Appendix
Appendix SSAB
Slide 27: Debt portfolio duration and interest rate
Debt portfolio duration and interest rate − Duration of the loan portfolio was 5.6 (6.2) years 8.0 4.50 − Averaged fixed interest term was 1.3 7.0 4.00 3.50 (1.1) years 6.0 3.00 5.0 − Average interest rate was 4.2% (2.3%) 2.50 4.0 2.00 3.0 1.50 2.0 1.00 1.0 0.50 0.0 0.00 2018 Q1 2018 Q2 2018 Q3 2018
Slide 28: Maturity profile
Maturity profile − Liquid assets and committed credit SEK m lines at SEK 33.3 bn 40,000 35,000 30,000 Back-up 25,000 facilities 20,000 15,000 10,000 Cash 5,000 0 Cash and 2023 2024 2025 2026 2027+ back-up facilities 28
Slide 29: SSAB
SSAB