United States Steel Corporation · NYSE:X
United States Steel — Q2 2021 Earnings Presentation
36 slides from United States Steel's earnings presentation, Jul 29, 2021
Slide 1: Second Quarter 2021 Earnings Presentation
Second Quarter 2021 Earnings Presentation www.ussteel.com July 29, 2021
Slide 2: Forward-looking statements
2 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 as of and for the second quarter of 2021. They should be read in conjunction with the consolidated financia
Slide 3: Non-GAAP measures notice
3 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 enhance the understanding of our operating
Slide 4: Transitioning to a Best for All Future
TRANSITIONING TO A BEST FOR ALLSM FUTURE
Slide 5: Transitioning to a Best for All future
5 Transitioning to a Best for All future Best of BothSM delivering Best for All 5 Providing customers with profitable steel solutions for people and planet Creating a more sustainable future for all our stakeholders
Slide 6: Enhancing disclosures on our progress: 2020 Sustainability Report
6 Transitioning to a Best for All future Enhancing disclosures on our progress 2020 Sustainability Report 6 Sustainability Investor Presentation Expanding our reporting framework for investors
Slide 7: Sustainability-linked financing
Transitioning to a Best for All future Sustainability-linked financing Reinforcing our commitment to sustainability Added sustainability-linked financing goals: Lower GHG emissions Strong safety performance ResponsibleSteel2 site certification 1 Asset-based loan (ABL). 2 ResponsibleSteel is the indu
Slide 8: Strategy Execution Update
STRATEGY EXECUTION UPDATE
Slide 9: Operating the industry's leading mini mill
Continued progress towards Best for All Operating the industry’s leading mini mill Mini Mill segment generated 2Q EBITDA of $324M and 36% margin Closed on sale of Transtar on July 28 Delivering immediate incremental value for stockholders ✓ ✓ Becoming the leader in non-grain oriented (NGO) electrica
Slide 10: BRS is outperforming the competition
Continued progress towards Best for All BRS is outperforming the competition Well-timed acquisition of Big River Steel 36% 23% 26% 2Q 2021 EBITDA margin % Mini mill competitor #1 Mini mill competitor #2 Note: Big River Steel statistics calculated based off their April 1 – June 30 results, as reflect
Slide 11: Becoming the leader in NGO electrical steel
Continued progress towards Best for All Becoming the leader in NGO electrical steel Electrical steel line at Big River Steel Expected annual production capability 200,000 tons 3Q 2023 First coil expected in September 2023 Funded from cash generated at Big River Steel 11 Investment highlights:
Slide 12: Becoming the leader in NGO electrical steel: unmatched capabilities
By 2027, over 90% of NGO consumption is expected to be 0.25 – 0.50mm product1 Pursuing LEED certification for new NGO line and expanding our sustainable verdeXTM steel brand Opportunities to partner on broader decarbonization goals 0.10 – 0.50 millimeters Competitor thinner gauges not widely availab
Slide 13: NGO investment capex and expected EBITDA
Opportunity to accelerate some NGO investment into 2021; full year 2021 enterprise capex now ~$800M$85M $240M $105M $20M 20242021 2022 2026+20252023 $60M $120M $140M 20232021 20242022 2026+2025 Expected CAPEX: ~$450 million Expected EBITDA: ~$140 million per year Permitting already in place 1 400 ba
Slide 14: Closed on sale of Transtar on July 28
1 ~10x multiple based on latest 12 months (April 2020 – March 2021) EBITDA, referenced in our June 8, 2021 investor presentation. ~$640M cash purchase price of Transtar Premium valuation to historical U. S. Steel multiple1 Divestiture structure provides for same high-quality service to continue with
Slide 15: Balance Sheet Actions
BALANCE SHEET ACTIONS
Slide 16: Capital allocation priorities
16 Balance sheet actions Capital allocation priorities 16 Organic growth medium-term Non-grain oriented electrical steel line Investing in existing competitive advantages with strong strategic fit Investing in Best for All longer-term Identifying investments that drive lower capital and carbon inten
Slide 17: Manageable combined maturity profile
Balance sheet actions Manageable combined maturity profile Call provisions increase flexibility to proactively manage our debt maturity profile 1 The 6.875% Sr Notes due 2025 were called for redemption and will be redeemed in full on August 16, 2021. No significant notes maturities until 2026 U. S.
Slide 18: 2021 Outlook
2021 OUTLOOK
Slide 19: Stronger for longer steel market environment
2021 outlook Stronger for longer steel market environment Continued strong customer demand Sustained consumer- oriented demand keeping mill lead times longer than average Planned industry outages in 2H ’21 Several planned industry outages in the back half of the year keep market conditions balanced
Slide 20: Stronger for longer steel market environment by market
2021 outlook Stronger for longer steel market environment U .S . fl a t- ro ll e d m a rk e t T u b u la r m a rk e t E u ro p e f la t- ro ll e d m a rk e t Automotive Construction Appliance Automotive Construction Appliance Oil & gas June auto sales at 15.4 million SAAR were impacted by the low ve
Slide 21: Global operating footprint
Operating Idled Indefinitely Idled N o rt h A m e ri c a n F la t- ro 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 Lakes BF ‘D4’BF ‘B2’BF ‘A1’ 3.8 3.8 Mon Valley BF #1 BF #3
Slide 22: Second Quarter 2021 Update
SECOND QUARTER 2021 UPDATE
Slide 23: Safety performance
Second quarter 2021 update Safety performance Safety First 0.14 0.10 0.07 0.08 20202018 2019 YTD 2021 BLS - Iron & Steel: 0.60 Benchmark 1 : OSHA Days Away from Work 2 Record-setting performance 1 BLS – Iron & Steel 2019 data. 2 Occupational Safety and Health Administration (OSHA) Days Away from Wor
Slide 24: Financial updates
Reported Net Earnings (Loss) $ Millions Profit Margin: ($469) ($268) ($60) $283 $964 2Q 20213Q 20202Q 2020 4Q 2020 1Q 2021 Adjusted Net Earnings (Loss) $ Millions Adjusted Profit Margin: ($423) ($211) ($75) $362 $1,084 4Q 20203Q 20202Q 2020 1Q 2021 2Q 2021 Segment EBIT1 $ Millions Segment EBIT Margi
Slide 25: Flat-rolled segment results
Shipments: in 000s, net tons Production: in 000s, net tons EBITDA Bridge $ Millions, 1Q 2021 vs. 2Q 2021 EBITDA Margin: (13%) 3%(2%) ($203) ($33) $50 $266 $703 3Q 20202Q 2020 4Q 2020 1Q 2021 2Q 2021 11% $266 $703 $536 ($12)($18) 1Q 2021 ($69) Commercial Raw Materials Maintenance & Outage Other 2Q 20
Slide 26: Mini Mill segment
Segment EBITDA $ Millions EBITDA Margin: Shipments: in 000s, net tons Production: in 000s, net tons Average Selling Price $ / net ton 2Q 2020 - - - 3Q 2020 - - - 4Q 2020 - - - 1Q 2021 510 447 $967 2Q 2021 747 616 $1,207 Operating Statistics EBITDA Bridge $ Millions, 2Q 2020 vs. 2Q 2021 Mini Mill seg
Slide 27: U. S. Steel Europe segment
Segment EBITDA $ Millions EBITDA Margin: (1%) 11%8% ($3) $39 $61 $130 $232 1Q 20213Q 20202Q 2020 2Q 20214Q 2020 16% 22% Shipments: in 000s, net tons Production: in 000s, net tons Average Selling Price $ / net ton 2Q 2020 645 610 $632 3Q 2020 873 790 $608 4Q 2020 966 840 $652 1Q 2021 1,197 1,043 $748
Slide 28: Tubular segment
EBITDA Margin: (22%) (20%)(46%) ($40) ($44) ($21) ($17) $11 4Q 20203Q 2020 1Q 20212Q 2020 2Q 2021 (12%) 6% Shipments: in 000s, net tons Production: in 000s, net tons Average Selling Price $ / net ton 2Q 2020 - 132 $1,288 3Q 2020 - 71 $1,230 4Q 2020 16 74 $1,267 1Q 2021 93 89 $1,372 2Q 2021 114 105 $
Slide 29: Cash and liquidity
Cash and liquidity $826 $938 $682 $138 $1,103 YE 2017 YE 2018 YE 2019 1H 2021YE 2020 Cash from Operations $ Millions Cash and Cash Equivalents $ Millions Total Estimated Liquidity $ Millions Net Debt $ Millions $1,553 $1,000 $749 $1,985 $1,329 YE 2017 1H 2021YE 2020YE 2018 YE 2019 $3,350 $2,830 $2,2
Slide 30: Appendix
APPENDIX
Slide 31: Additional Big River Steel summary data
Additional Big River Steel 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 2021 Intersegment Sales Net Sales EBIT1 $759M $142M $901M $284M Total Assets $4,246M Depreciation and Amortization Capital Expenditures $40M $20M 1 Earnings before interest and
Slide 32: Segment EBITDA reconciliation
Flat-rolled ($ millions) 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 Segment (loss) earnings before interest and income taxes ($329) ($159) ($73) $146 $579 Depreciation 126 126 123 120 124 Flat-rolled Segment EBITDA ($203) ($33) $50 $266 $703 U. S. Steel Europe ($ millions) 2Q 2020 3Q 2020 4Q 2020 1Q 20
Slide 33: Reconciliation of net debt
Net Debt ($ millions) YE 2017 YE 2018 YE 2019 YE 2020 1H 2021 Short-term debt and current maturities of long-term debt $3 $65 $14 $192 $763 Long-term debt, less unamortized discount and debt issuance costs 2,700 2,316 3,627 4,695 4,803 Total Debt $2,703 $2,381 $3,641 $4,887 $5,566 Less: Cash and cas
Slide 34: Reconciliation of reported and adjusted net earnings
Reconciliation of reported and adjusted net earnings ($ millions) 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 Reported net (loss) earnings attributable to U. S. Steel ($589) ($234) $49 $91 $1,012 Debt extinguishment ─ ─ ─ 255 ─ Asset impairment ─ ─ ─ ─ 26 Restructuring and other charges 82 ─ 8 6 30 Gain
Slide 35: Reconciliation of adjusted EBITDA
Reconciliation of adjusted EBITDA ($ millions) 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 Reported net (loss) earnings attributable to U. S. Steel ($589) ($234) $49 $91 $1,012 Income tax provision (benefit) (5) (24) (94) 1 (37) Net interest and other financial costs 62 47 88 333 59 Reported (loss) earn
Slide 36: 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