United States Steel Corporation · NYSE:X
United States Steel — Q1 2023 Earnings Presentation
37 slides from United States Steel's earnings presentation, Apr 28, 2023
Slide 1: Earnings Call First Quarter 2023
1 EARNINGS CALL FIRST QUARTER 2023 David Burritt President and Chief Executive Officer Jessica Graziano SVP and Chief Financial Officer Rich Fruehauf SVP, Chief Strategy and Sustainability Officer Kevin Lewis VP, Finance
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 first quarter 2023. Financial results as of and for the periods ended March 31, 2023 prov
Slide 3: Explanation of Use of Non-GAAP Measures
3 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 believ
Slide 4: Advancing Towards Our Best for All Future
4 ADVANCING TOWARDS OUR BEST FOR ALL® FUTURE Current Landscape Confident in our ability to execute our Best for All strategy, SAFELY Bullish on U. S. Steel’s future Challenges Transitioning to a less cost- / capital- and carbon- intensive business model while becoming the best steel competitor Solut
Slide 5: Today's Discussion
5 TODAY’S DISCUSSION Progressing on our Best for All® strategy Healthy market backdrop Balanced and diverse order book Providing a strategic update Supporting strategy execution Serving end-market demand across industries
Slide 6: Progressing on Our Best for All Strategy: Big River 2
6 PROGRESSING ON OUR BEST FOR ALL STRATEGY ON-TRACK On-budget and on-time for a 2024 start-up ~85% Budget committed; equipment ordered / delivered and scheduled for installation MILESTONES Water systems, electrical substation, and critical foundations BIG RIVER 2
Slide 7: Big River Water Systems and Electrical Substation
7 BIG RIVER 2 Water Systems BIG RIVER 2 Electrical Substation PROGRESSING ON OUR BEST FOR ALL STRATEGY
Slide 8: Big River ECR1 Foundations
8 BIG RIVER 2 ECR1 Foundations PROGRESSING ON OUR BEST FOR ALL STRATEGY 1Endless casting and rolling
Slide 9: NGO Electrical Steel On-Track
9 NGO ELECTRICAL STEEL ON-TRACK On-budget and on-time for a Q3 ’23 start-up IN DEMAND Significant customer interest in reserving time on the new line MILESTONES Cold commissioning critical components ahead of start-up PROGRESSING ON OUR BEST FOR ALL STRATEGY
Slide 10: NGO Hydraulic Systems and Cleaning Section
10 NGO Hydraulic Systems NGO Cleaning Section PROGRESSING ON OUR BEST FOR ALL STRATEGY
Slide 11: Pig Iron Caster Completed
11 PIG IRON CASTER COMPLETED Delivering EBITDA benefits in 2023; run-rate by 2024 INSOURCING Displacing 3rd party ore-based metallics with internally sourced metallics DE-RISKING De-risking the Mini Mill segment’s supply chain by displacing imported raw materials PROGRESSING ON OUR BEST FOR ALL STRA
Slide 12: Healthy Market Backdrop
12 HEALTHY MARKET BACKDROP Improved market dynamics Increased prices supported by raw material input costs & healthy customer demand Stronger domestic steel market Diverse capabilities; strong bi-partisan support for manufacturing Diverse U. S. Steel order book Diverse end-market exposure provides f
Slide 13: Balanced Order Book
13 BALANCED ORDER BOOK Automotive Appliance Energy Service Centers Light vehicle sales SAAR in millions of units AHAM6 shipments in millions of units Rig count Quarter-end United States rigs MSCI shipments in millions of tons 42 40 40 43 46 Q4 2022 Q1 2022 Q3 2022 Q2 2022 Q1 2023 Stable pull rates U
Slide 14: Q1 2023 Financial Performance
14 Q1 2023 FINANCIAL PERFORMANCE Rewarding shareholders with continued direct returns ~$5.3B Strong Liquidity Including ~$2.8B of cash $427M Adjusted EBITDA Performance Delivering 10% EBITDA margin $25M Investable Free Cash Flow Supporting $582 million of strategic capex in the quarter Note: For rec
Slide 15: Mini Mill Segment: Value Creation Framework
15 Value creation framework E N H A N C E D G R O W T H & R E T U R N S + + + + B E T T E R C A P I T A L I N T E N S I T Y B E T T E R C A R B O N I N T E N S I T Y B E T T E R E A R N I N G S R E S I L I E N C Y B E T T E R F C F C O N V E R S I O N B E T T E R P R O D U C T M I X ~$15/ton sustain
Slide 16: Operating Segment Overview
16 OPERATING SEGMENT OVERVIEW FLAT-ROLLED MINI MILL USSE TUBULAR
Slide 17: Recap
17 RECAP Progressing on our Best for All strategy Healthy market backdrop Balanced order book Best for All footprint is taking shape Further financial upside expected in Q2 2023 Supported by strategic end-market
Slide 18: @ vnsswiesenicapon |
@ vnsswiesenicapon | 18
Slide 19: U. S. Steel Delivers Strong First Quarter 2023; Best for All On-Track
19 U. S. STEEL DELIVERS STRONG FIRST QUARTER 2023; BEST FOR ALL STRATEGY ON-TRACK 2023 F I R S T Q U A R T E R U P D A T E
Slide 20: Improving on Record Safety Performance
20 IMPROVING ON RECORD SAFETY PERFORMANCE 0.07 0.06 0.05 0.02 2020 2021 2022 YTD 2023 OSHA Days Away from Work 2 SAFETY FIRST BLS - Iron & Steel: 0.90 Benchmark 1 : Multiple years of record-setting performance 1 Bureau of Labor Statistics – Iron & Steel 2021 data. 2 Occupational Safety and Health Ad
Slide 21: Financial Updates
21 FINANCIAL UPDATES Reported Net Earnings Adjusted Net Earnings Segment EBIT1 Adjusted EBITDA2 Profit Margin: 17% 16% 9% 4% 4% $ Millions $ Millions $ Millions $ Millions 17% 18% 10% 5% 4% 22% 23% 13% 6% 5% Adjusted Profit Margin2: 26% 26% 17% 10% 10% Adjusted Profit Margin1: Note: For reconciliati
Slide 22: Key Operating Statistics Trends by Segment
22 KEY OPERATING STATISTICS TRENDS BY SEGMENT Flat-Rolled Operating Statistics Mini Mill Operating Statistics USSE Operating Statistics Tubular Operating Statistics Shipments: in 000s, net tons Production: in 000s, net tons Average Selling Price $ / net ton Q1 2022 2,205 1,947 $1,368 Q2 2022 2,424 2
Slide 23: EBITDA Trends by Segment
23 EBITDA TRENDS BY SEGMENT EBITDA Margin: 22% 24% 19% 11% 5% 38% 31% 6% (5%) 8% 23% 22% (1%) (7%) (1%) EBITDA Margin: 29% 31% 39% 44% 48% EBITDA Margin: Note: For reconciliation of non-GAAP amounts see Appendix. EBITDA Margin: $652 $918 $644 $296 $140 Q1 2022 Q4 2022Q2 2022 Q3 2022 Q1 2023 $318 $30
Slide 24: EBITDA Change Analysis – Flat-Rolled Segment
24 EBITDA CHANGE ANALYSIS – FLAT-ROLLED SEGMENT Commercial: The unfavorable impact is primarily the result of lower average realized prices partially offset by higher shipment volumes. Raw Materials: The unfavorable impact is primarily the result of higher coal costs. Operating Costs: The favorable
Slide 25: EBITDA Change Analysis – Mini Mill Segment
25 EBITDA CHANGE ANALYSIS – MINI MILL SEGMENT Commercial: The unfavorable impact is primarily the result of lower average realized prices partially offset by higher shipment volumes. Raw Materials: The favorable impact is primarily the result of lower metallics costs. Operating Costs: No change. $31
Slide 26: EBITDA Change Analysis – U. S. Steel Europe Segment
26 EBITDA CHANGE ANALYSIS – U. S. STEEL EUROPE SEGMENT Commercial: The unfavorable impact is primarily the result of lower average realized prices. Raw Materials: The unfavorable impact is primarily the result of inventory revaluation. Operating Costs: The change is not material. $287 $3 Q1 2023 Q1
Slide 27: EBITDA Change Analysis – Tubular Segment
27 EBITDA CHANGE ANALYSIS – TUBULAR SEGMENT Commercial: The favorable impact is primarily the result of higher average realized prices. Raw Materials: The favorable impact is primarily the result of lower scrap costs. Operating Costs: The unfavorable impact is primarily the result of increased costs
Slide 28: Global Operating Footprint
28 GLOBAL OPERATING FOOTPRINT Minntac M I N I M I L L T U B U L A R Clairton Keetac BF #4 BF #6 BF #8 BF #14 BF ‘A’ BF ‘B’ N O R T H A M E R I C A N F L A T - R O L L E D BF #1 BF #2 EAF #1 EAF #2 BF #1 BF #3BF #2 Seamless Pipe #1 ERW #2 ERW EAF Steelmaking / Seamless Pipe Indefinitely Idled Operati
Slide 29: Cash and Liquidity
29 CASH AND LIQUIDITY Note: For reconciliation of non-GAAP amounts see Appendix. $682 $138 $4,090 $3,505 $181 FY 2021FY 2019 FY 2020 FY 2022 Q1 2023 $749 $1,985 $2,522 $3,504 $2,837 FY 2022FY 2021FY 2019 FY 2020 Q1 2023 $2,284 $3,153 $4,971 $5,925 $5,275 FY 2022FY 2019 FY 2020 Q1 2023FY 2021 $2,892
Slide 30: Reconciliation Table
30 RECONCILIATION TABLE Flat-Rolled ($ millions) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Segment earnings (loss) before interest and income taxes $529 $793 $518 $171 ($7) Depreciation 123 125 126 125 147 Flat-Rolled Segment EBITDA $652 $918 $644 $296 $140 Tubular ($ millions) Q1 2022 Q2 2022 Q3 2022
Slide 31: Reconciliation Table: Big River Steel LLC
31 RECONCILIATION TABLE Big River Steel LLC1 Summary Table Customer Sales Intersegment Sales Net Sales EBIT2 $554M $69M $623M $14M Income Statement $ Millions Q1 2023 Cash and cash equivalents Total Assets 2029 Senior secured notes Environmental revenue bonds Financial leases and all other obligatio
Slide 32: Reconciliation Table: Net Debt
32 RECONCILIATION TABLE Short-term debt and current maturities of long-term debt Long-term debt, less unamortized discount and debt issuance costs Net Debt $ millions Q1 2023YE 2022YE 2021YE 2020 $14 $3,627 YE 2019 $192 $4,695 $28 $3,863 $63 $3,914 $91 $3,901 Total Debt $3,992$3,977$3,891$4,887$3,64
Slide 33: Reconciliation Table: Free Cash Flow
33 RECONCILIATION TABLE Net cash provided by operating activities Net cash used in investing activities Investable free cash flow $ millions Q1 2023 $181 (738) Free cash flow ($557) Strategic capital expenditures 582 Investable free cash flow $25 Free Cash Flow / Investable Free Cash Flow
Slide 34: Reconciliation Table: Adjusted Net Earnings
34 RECONCILIATION TABLE $ Millions Adjusted net earnings Note: The reported net earnings attributable to U. S. Steel for the three months ended March 31, 2022 includes an income tax benefit of $7 million from the reversal of net valuation allowances. The item was presented as an adjustment to arrive
Slide 35: Reconciliation Table: Adjusted EBITDA
35 RECONCILIATION TABLE $ Millions Adjusted EBITDA Adjusted EBITDA Q1 2023Q4 2022Q3 2022Q2 2022Q1 2022 $427$443$861$1,636$1,353 $882 246 (10) $1,118 198 $1,316 6 17 - 16 - - (2) Reported net earnings attributable to U. S. Steel Income tax expense Net interest and other financial costs Reported earni
Slide 36: Investor Relations
36 Kevin Lewis VP – Finance klewis@uss.com 412-433-6935 Eric Linn Director – Investor Relations eplinn@uss.com 412-433-2385 INVESTOR RELATIONS
Slide 37: United States Steel Corporation
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