Algoma Steel Group Inc. · NASDAQ:ASTL
Algoma Steel — Jefferies Industrials Conference (September 2023)
30 slides from Algoma Steel's conference presentation, September 2023
Slide 1: Investor Presentation
NASDAQ:ASTL Investor Presentation TSX: ASTL September 2023 in Canadian dollars unless otherwise noted
Slide 2: Disclaimer
Disclaimer 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 (collectivel
Slide 3: Key Highlights
Key Highlights Premier Canadian Steel Producer and one of the 1 Leading Flat Steel Producers in North America Today’s Presenters: 2 Continuing to build on a track record of success Strong Financial Results and a focus on 3 operational stability Michael Garcia Chief Executive Officer Key Strategic In
Slide 4: Premier Canadian Steel Producer
Premier Canadian Steel Producer… Leading North American Flat-Rolled Producer Located in the Great Lakes Region in Sault Ste. Marie, Ontario • Raw steel capacity of 2.8mm tons (with incremental 0.9mm tons from idled blast furnace capacity) per year • Broad range of high-quality finished sheet and pla
Slide 5: Proximity to Customers and Suppliers
Strategically Located on the Great Lakes in Close Proximity to Customers and Suppliers Attractive Access to Key Suppliers and Customers Across The Great Lakes Minorca Canada North American EAF’s are Concentrated in Midwest and Southern Cleveland- Minntac US Steel Cliffs Superior Geographic proximity
Slide 6: Record of Success
Committed to our Path Forward, Creating a Track Record of Success Strategic Direction Operational & Capital DSPC Automation Ladle Met Furnace #2 Project Aurora EAF Approval PMM Phase 1 LSP Power Plant EAF Project PMM Phase 2 Improvements Upgrade debottlenecks $50M annualized Received board Enhancing
Slide 7: First Quarter Financial Highlights
First Quarter Financial Highlights Q1 FY2024 Q1 FY2023 Change Q4 FY2023 Change Shipping volume (‘000s tons) 569 538 ↑ 6% 572 ↓ -0.4% Net Sales Realization per ton ($/ton) 1,323 1,632 ↓ -19% 1,066 ↑ 24% Steel Revenue($ million) 755 877 ↓ -14% 609 ↑ 24% Cost of Steel Products Sold ($/NT) 950 920 ↑ 3%
Slide 8: Full Year Financial Highlights
Full Year Financial Highlights FY 2023 FY 2022 % YoY Shipping volume (‘000s tons) 2,003 2,297 -13% Net Sales Realization per ton ($/ton) 1,273 1,545 -18% Steel Revenue($ million) 2,550 3,549 -28% Cost of Steel Products Sold ($/NT) 1,004 857 17% Adjusted EBITDA ($ million) 452 1,503 -70% Net Income (
Slide 9: Algoma's EAF Conversion Project: a generational transformation
Algoma’s EAF Conversion Project: a generational transformation Raw Materials Materials Ironmaking Steelmaking Preparation Expected Benefits of EAF ✓ ~Adds ~700kt of finished steel Iron Ore capacity aligning steelmaking Blast Furnace Mill (Algoma Today) capacity to rolling capacity Capacity ✓ Reduced
Slide 10: Proposed Operational Transition to EAF
Proposed Operational Transition to EAF 9
Slide 11: Construction Update
Construction Update Future home of Algoma’s new EAF facility1: Project Statistics2: • Concrete poured: est. > 15,000m3 • EAF Building Foundations est. 100% complete • EAF Equipment Piling - 95% complete • EAF Equipment Foundations - Underway • Fume Treatment Plant excavation and piling complete • Fu
Slide 12: Critical Equipment Arriving on Site
Critical Equipment Arriving on Site Delivery of Critical Equipment 11
Slide 13: Plate Mill Modernization Update
Plate Mill Modernization Update Algoma’s Path to Higher Plate Production Automated Cooling Beds Heavy Gauge Inline Shear Plate Piler Robotic Plate Marking System 12
Slide 14: Supplemental Information
Supplemental Information 13
Slide 15: Market Update
Market Update North American HRC price declining / Plate pricing remains strong Historical Hot Rolled Coil (HRC) and As Rolled Plate Prices (ARP) (US$/ton) Key Market Drivers $2,200 • HRC steel prices have decreased $340/NT since April CRU Index HRC / ARP 2023, peak of $1,203. As rolled plate spread
Slide 16: Safety Without Compromise
Safety Without Compromise Continued Focus and Improvement in Lost Time Injury Frequency Rate (LTIFR)1 Health & Safety Performance • Ongoing commitment to superior Health & Safety performance has 1.30 led to sustained improvement of safety metrics over time • Health & safety remains our highest prior
Slide 17: Key Performance Highlights
Key Performance Highlights Q1 FY2024 - Ended June 30th, 2023 • Shipping volume was 569K NT in Q1 FY2024, down 0.4% from 572K NT in Q4 FY2023 and up 6% from 538K NT in Q1 FY2023. • Steel Revenue was $755 million in Q1 FY2024, up 24% from $609 million in Q4 FY2023 and down 14% from $877 million in Q1
Slide 18: Overview of Net Working Capital Seasonality
Overview of Net Working Capital Seasonality Net Working Capital $M1 $ 573 $ 589 $ 588 $ 568 $ 641 $ 687 $ 762 $ 623 $ 633 $ 825 $ 926 $ 875 $ 815 $1,250 $1,050 $850 ($ millions) $650 $616 $486 $866 $912 $759 $450 $480 $638 $723 $470 $415 $250 $489 $490 $525 $409 $435 $389 $259 $313 $311 $277 $272 $1
Slide 19: Flexible, Low-Cost Operations Facilitates Optimization Across High Value Products
Algoma’s Flexible, Low-Cost Operations Facilitates Optimization Across High Value Products ✓ Algoma produces a wide variety of products to serve diverse end-markets ✓ Algoma is the only plate producer in Canada with current capacity of 350-400kt and potential capacity of 700kt per year once debottle
Slide 20: EAF Transition Will Materially Improve Algoma's Environmental Footprint
EAF Transition Will Materially Improve Algoma’s Environmental Footprint… Environmental Strategy • EAF production would unlock significant Improving Algoma’s Environmental Profile Provides environmental benefits – EAF steelmaking Long-Term Advantages generates substantially less CO2 and other air pol
Slide 21: Our ESG Framework
Environment Lead the Canadian steel industry's transition to a low carbon economy and minimize our environmental impact. Social. 4 ) Generate stared and sustainable for our employees, stakeholders, and Indigenous communities. Governance Enhance governance structures for the robust and effective over
Slide 22: Capital Allocation
Capital Allocation Value Enhancing Uses of Capital: • Strong Balance Sheet: Low leverage / solid cash position • Electric Arc Furnace (EAF) Project: $825-875 million, 2+year project to transition Algoma to EAF steelmaking, resulting in 3.7 million tons/year of liquid steel capacity and a roughly 70%
Slide 23: Canadian Government to Provide Attractive Green Steel Financing
Canadian Government to Provide Attractive “Green Steel Financing” to Support the EAF Investment Algoma Secures C$420M of Federal Government Financing for EAF Investment Canada Infrastructure Bank C$220M SIF1 Financing C$200 • On November 29, 2021 Algoma entered • C$200 million through the Net Zero i
Slide 24: High-Quality Products and Diversified Blue Chip Customer Base
High-Quality Products and Diversified Blue Chip Customer Base in Attractive End Markets • Product width and strength flexibility allows Algoma to serve a broad customer base across various end markets • Operational flexibility to adjust product mix to align with market pricing and customer demand, a
Slide 25: Canada's Only Plate Mill with Potential to Ship 700,000 NT per year
Canada’s Only Plate Mill with Potential to Ship 700,000 NT per year Algoma’s plate mill modernization project is expected to enhance the capacity and quality of one of Algoma’s key products and sources of competitive advantage Key Highlights Phase I - Quality Focus Phase II - Productivity Focus • Ov
Slide 26: Annex: Revenue and Cost of Sales
Annex: Revenue and Cost of Sales Source: Company Q1 FY2024 Management's Discussion and Analysis 25
Slide 27: Annex: Adjusted EBITDA Reconciliation
Annex: Adjusted EBITDA Reconciliation Source: Company Q1 FY2024 Management's Discussion and Analysis 26
Slide 28: Annex: Selected Quarterly Information
Annex: Selected Quarterly Information Source: Company Q1 FY2024 Management's Discussion and Analysis 27
Slide 29: Algoma's Manufacturing Capabilities
Algoma’s Manufacturing Capabilities Technical specifications Year of Start-Up Competitive advantage Highlights • Comprises 3 batteries: • #7 battery: 1959 • On-site coke production caters to • Annualized production capability of Coke Making – #7 battery (60 ovens) • #8 battery: 1968 ~90% of total co
Slide 30: NASDAQ:ASTL TSX: ASTL
NASDAQ:ASTL TSX: ASTL 57
Algoma Steel Group — Jefferies Industrials Conference (September 2023) on 6ix