United States Steel Corporation · NYSE:X
United States Steel — Q1 2019 Earnings Presentation
27 slides from United States Steel's earnings presentation, May 2, 2019
Slide 1: First Quarter 2019 Earnings Presentation
First Quarter 2019 Earnings Presentation May 2, 2019 www.ussteel.com
Slide 2: Forward-looking Statements
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 for the first quarter and full year of 2019. They should be read in conjunction with the consolidated financi
Slide 3: Explanation of Use of Non-GAAP Measures
Explanation of Use of Non-GAAP Measures 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 enhan
Slide 4: First Quarter Update
FIRST QUARTER UPDATE
Slide 5: First Quarter 2019 Financial Highlights
First Quarter 2019 Financial Highlights Reported Net Earnings $ Millions Adjusted Net Earnings $ Millions $592 $321 $324 $262 $291 $214 $57 $81 $18 $54 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 Profit Adjusted 1% 6% 8% 16% 2% 2% 7% 9% 9% 2% Margin: Profit Margin
Slide 6: Flat-rolled Segment
Flat-rolled Segment Key Segment Statistics Select End – Market Indicators1 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 Automotive Shipments: 2,534 2,584 2,659 2,733 2,725 March light vehicle sales are up month-over-month (m-o-m) in 000s, net tons and year-over-year (y-o-y), beating expectations, and alm
Slide 7: U. S. Steel Europe Segment
U. S. Steel Europe Segment Key Segment Statistics Select End – Market Indicators1 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 Automotive Shipments: 1,127 1,156 1,101 1,073 1,064 EU car production expected to decline 1.7% y-o-y in 2019, in 000s, net tons however the V4 region2 is projected to grow 0.7% o
Slide 8: Tubular Segment
Tubular Segment Key Segment Statistics Select End – Market Indicators1 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 Oil Prices Shipments: 179 201 184 216 207 West Texas Intermediate Oil Price at ~$65/barrel, up ~45% in 000s, net tons since the end of 2018. Imports Imports of OCTG remain high. During 1Q,
Slide 9: First Quarter Segment EBITDA Bridges 1Q 2018 vs 1Q 2019
First Quarter Segment EBITDA Bridges 1Q 2018 vs 1Q 2019 Flat-rolled $ Millions Commercial: The favorable impact is primarily the result of higher $218 average realized prices and increased volumes. Raw Materials: The unfavorable impact is primarily the result of ($67) higher costs for coal and outsi
Slide 10: Financial Flexibility
FINANCIAL FLEXIBILITY
Slide 11: Cash and Liquidity Positions
Cash and Liquidity Positions Cash from Operations $ Millions Cash and Cash Equivalents $ Millions $29 $938 $1,515 $1,553 $826 $754 $1,372 $1,000 $755 $360 $676 ($99) YE 2015 YE 2016 YE 2017 YE 2018 1Q 2018 1Q 2019 YE 2015 YE 2016 YE 2017 YE 2018 1Q 2018 1Q 2019 Total Estimated Liquidity $ Millions N
Slide 12: Proactively De-Risked Our Debt Maturity Profile
Proactively De-Risked Our Debt Maturity Profile MaturityReduction profile in Reduction in near-term significantlycontrollableDebt overheadextended Maturity~$150M2025 maturities ~$1.8B next significant EBITDA opportunity Reduction in near-term Profile debt maturity maturities March 2019: $317M $752M
Slide 13: Strategy Update
STRATEGY UPDATE
Slide 14: Building a Solid Foundation for Our Future
Building a Solid Foundation for Our Future OUR STRATEGY CRITICAL SUCCESS FACTORS ▪ Enhance operational excellence: 1 safe, environmentally Move Down the Cost Curve responsible, reliable and cost effective operations 2 ▪ Create operating leverage: revitalized steelmaking assets Win in Attractive Mark
Slide 15: Our Critical Success Factors
Our Critical Success Factors Move Down the Cost Curve Win in Attractive Markets Move Up the Talent Curve Improve through-cycle Increase capabilities to Attract, develop, and retain profitability: grow share in attractive top talent: markets where we can: ̶ Continue investments in ̶ Earn outsized mar
Slide 16: Focus on Innovation and Technology To Drive Sustainable Cost Improvements
Focus on Innovation and Technology To Drive Sustainable Cost Improvements Strategic Investment Sustainable Cost Improvements Post Investment Horizon • Reduces rounds cost for seamless production by ~$90/ton Electric Arc • Further strengthens competitive position Furnace to supply most attractive seg
Slide 17: Creating New Boundaries Through Dimensions and Differentiation
Creating New Boundaries Through Dimensions and Differentiation Investment: Asset Revitalization Endless Casting and Rolling New Boundaries: More Automotive Line Pipe HRC AHSS Industrial HRC Ability to to Ability Differentiate HRC Less Going thinner Going thicker Thin Steel Gauge Thick Move Down the
Slide 18: Attract, Develop and Retain Top Talent
Attract, Develop and Retain Top Talent Safety First Move Up the Talent Curve ▪ Trust & Respect Continue to strengthen culture of caring through a shared vision for our future Environmentally Friendly Activities ▪ Accelerate talent upskilling through leadership Ethical Behavior development and capabi
Slide 19: Appendix
APPENDIX
Slide 20: First Quarter Segment EBITDA Bridges 4Q 2018 vs 1Q 2019
First Quarter Segment EBITDA Bridges 4Q 2018 vs 1Q 2019 Flat-rolled $ Millions Commercial: The unfavorable impact is primarily the result of lower average realized prices and unfavorable seasonal impact from lower third party pellet sales. ($114) Raw Materials: The unfavorable impact is primarily th
Slide 21: Total Corporation Adjusted EBITDA Bridges
Total Corporation Adjusted EBITDA Bridges 1Q 2018 vs 1Q 2019 $ Millions 1Q 2018 vs 1Q 2019 $ Millions $255 $76 $35 ($84) ($3) ($56) ($78) ($85) $255 $285 $255 $285 1Q Commercial Raw Maintenance Other 1Q 1Q Flat- U. S. Steel Tubular Other 1Q 2018 Materials & Outage 2019 2018 rolled Europe 2019 4Q 201
Slide 22: Reconciliation of segment EBITDA
Reconciliation of segment EBITDA Segment EBITDA – Flat-Rolled 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 ($ millions) Segment earnings before interest and income taxes $33 $224 $305 $328 $95 Depreciation 90 92 87 98 104 Flat-Rolled Segment EBITDA $123 $316 $392 $426 $199 Segment EBITDA – U. S. Steel Eu
Slide 23: Reconciliation of net debt
Reconciliation of net debt Net Debt YE YE YE YE 1Q 1Q ($ millions) 2015 2016 2017 2018 2018 2019 Short-term debt and current maturities of long- $45 $50 $3 $65 $281 $66 term debt Long-term debt, less unamortized discount and 3,093 2,981 2,700 2,316 2,571 2,326 debt issuance costs Total Debt $3,138 $
Slide 24: Cash Conversion Cycle
Cash Conversion Cycle Cash Conversion Cycle 4Q 2018 1Q 2019 $ $ millions Days millions Days Accounts Receivable, net $1,659 42 $1,729 43 + Inventories $2,092 58 $2,133 60 − Accounts Payable and Other Accrued $2,477 72 $2,478 70 Liabilities = Cash Conversion Cycle 28 33 Accounts Receivable Days is ca
Slide 25: Reconciliation of reported and adjusted net earnings
Reconciliation of reported and adjusted net earnings ($ millions) 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 Reported net earnings attributable to U. S. Steel $18 $214 $291 $592 $54 Clairton coke making facility fire ─ ─ ─ ─ 27 United Steelworkers labor agreement signing bonus and ─ ─ ─ 88 ─ related co
Slide 26: Reconciliation of adjusted EBITDA
Reconciliation of adjusted EBITDA ($ millions) 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 Reported net earnings attributable to U. S. Steel $18 $214 $291 $592 $54 Income tax (benefit) provision 1 12 23 (339) 8 Net interest and other financial costs 118 75 59 60 49 Reported earnings before interest and
Slide 27: Investor Relations
INVESTOR RELATIONS Kevin Lewis General Manager 412-433-6935 klewis@uss.com Eric Linn Manager 412-433-2385 eplinn@uss.com www.ussteel.com