Ssab Ab Class A · OMXSTO:SSAB_A
Ssab Ab Class A — Q2 2021 Earnings Presentation
32 slides from Ssab Ab Class A's earnings presentation, Jul 21, 2021
Slide 1: Presentation of the Q2/2021 results
Presentation of the Q2/2021 results Martin Lindqvist, President & CEO Håkan Folin, CFO July 21, 2021
Slide 2: Agenda
Agenda ►Q2/2021 ►Financials Nytt foto ►Outlook and summary ►Q&A 2
Slide 3: Q2/2021 in brief
Q2/2021 in brief 3
Slide 4: A historical quarter for SSAB
A historical quarter for SSAB Solid internal performance in a strong market Improved safety performance High and stable production rate in Q2 5.7 5.1 2,050 4.3 1,941 1,926 2.3 Rolling 1,573 production LTIF (ktonnes) 18Q2 19Q2 20Q2 21Q2 18Q2 19Q2 20Q2 21Q2 Efficiency improved over time Record high ea
Slide 5: Leading force in the green transition
Leading force in the green transition Strategic cooperation Reduction of iron ore using Sustainability-linked bond issued with established with Volvo Cars hydrogen at a pilot scale – first great interest from investors and AB Volvo time ever 5
Slide 6: Operating profit by division – record level of earnings
Operating profit by division – record level of earnings SEK million 1,109 904 678 1,512 544 491 458 485 SSAB SSAB 358 758 Special Europe 73 Steels 347 66 0 83 -126 19Q1 19Q2 19Q3 19Q4 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 -480 -609 -566 -631 19Q1 19Q2 19Q3 19Q4 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 1,151 956 872 44
Slide 7: Order intake continues at a high level
Order intake continues at a high level SSAB Europe example SSAB Europe, monthly order intake, tonnes 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 Feb-20 Oct-20 Feb-21 Mar-20 Apr-20 Mar-21 Apr-21 Sep-20 Aug-20 Dec-20 Jan-20 May-20 Jul-20 Nov-20 Jan-21 May-21 Jun-20 Jun-21 7
Slide 8: SSAB Special Steels
SSAB Special Steels Record shipments and earnings Operating profit/loss, SEK million ► High and stable production 1,109 904 ► Shipments at 388 ktonnes – highest level 678 544 458 485 491 ever 358 73 − Up 46% vs. Q2/20 and 3% vs. Q1/21 -126 ► EBIT of 1,109m (485m) and EBIT-margin rose 19Q1 19Q2 19Q3
Slide 9: SSAB Europe
SSAB Europe Strong market conditions – record level of Automotive AHSS shipments Operating profit/loss, SEK million ► High and stable production, fixed cost at low 1,512 level 758 347 83 ► Shipments at good level and high share of 66 0 premium -480 -609 -566 − Up 41% vs. Q2/20 and unchanged vs. Q1/2
Slide 10: SSAB Americas
SSAB Americas Significantly higher prices Operating profit/loss, SEK million ► High and stable production, fixed cost at low level 1,151 956 872 522 268 106 ► Good demand, higher shipments 45 -10 − Up 7% vs. Q2/20 and up 3% vs. Q1/21 -222 -435 19Q1 19Q2 19Q3 19Q4 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 ► EBIT
Slide 11: Tibnor
Tibnor Improved margins Operating profit/loss, SEK million ► Competitive position improved sigificantly 449 through completed efficiency program – SEK 200 million on annual basis 218 38 29 29 48 2 12 6 ► Increased market share in a strong market -39 19Q1 19Q2 19Q3 19Q4 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2
Slide 12: Ruukki Construction
Ruukki Construction Continued improvement of operating profit Operating profit/loss, SEK million ► Solid performance with full focus on product business 162 134 145 95 86 67 72 ► Revenue increased by 11% vs. Q2/20 48 11 -14 ► EBIT improved to SEK 162m (86m), EBIT- 19Q1 19Q2 19Q3 19Q4 20Q1 20Q2 20Q3
Slide 13: Financials
Financials 13
Slide 14: Better prices and higher shipments improved the result
Better prices and higher shipments improved the result Sales Shipments1 2,000 25,000 1,800 1,600 20,000 1,400 SEK million 1,200 ktons 15,000 1,000 800 10,000 600 400 5,000 200 0 0 18Q1 18Q2 18Q3 18Q4 19Q1 19Q2 19Q3 19Q4 20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 18Q1 18Q2 18Q3 18Q4 19Q1 19Q2 19Q3 19Q4 20Q1 20Q2
Slide 15: Change in operating profit Q2/2021 vs. Q2/2020
Change in operating profit Q2/2021 vs. Q2/2020 SEKm Mainly SSAB Higher raw Europe and SSAB material cost Special Steels Mainly SSAB Europe and SSAB Americas 1,550 -1,630 4,083 44 150 650 -540 Higher than 4,110 Q2/20, but clearly lower than Q2/19 -251 2020 Q2 Price Volume Var COGS Fixed costs FX Capa
Slide 16: Change in operating profit Q2/2021 vs. Q1/2021
Change in operating profit Q2/2021 vs. Q1/2021 SEKm Mainly SSAB Mainly Ruukki Construction Higher raw Europe and material cost SSAB Americas 210 -890 4,083 -290 50 30 120 2,860 1,993 2021 Q1 Price Volume Var COGS Fixed costs FX Capacity Other 2021 Q2 16 utilization
Slide 17: Strong net cash flow in Q2
Strong net cash flow in Q2 2021 2020 2021 2020 2020 SEK millions Q2 Q2. Jan-Jun Jan-Jun Full-year Operating profit before depreciation/amortization 4,899 705 7,759 1,991 3,364 Change in working capital -586 237 -1,766 -1,164 1,570 Maintenance expenditures -359 -381 -569 -684 -1,622 Other -43 68 -84
Slide 18: Significant reduction of net debt
Significant reduction of net debt 25,000 60 ►Net debt decreased to SEK 6.5bn (12.8bn) at the end of Q2/21 20,000 50 40 15,000 ►Net gearing was 11% (21%) 30 10,000 20 ►2015-2017 excluding IFRS 16 (impact of 5,000 around SEK 2bn) 10 0 0 2015 2016 2017 2018 2019 2020 2021 Q2 Net interest bearing debt,
Slide 19: Well-balanced maturity profile
Well-balanced maturity profile Maturity profile Q2/2021 ►Duration of the loan portfolio was 6.1 (5.3) SEKm years 18000 ►Liquid assets and committed credit lines at 16000 14000 SEK 16.6bn – corresponds to 22% of rolling 12 12000 Back-up month revenue 10000 facilities ►Most maturities in 2021 refer to
Slide 20: Cash needs of the business
Cash needs of the business ►Total cash needs* estimated at SEK 4.8-5.3 billion in 2021 – unchanged compared to 4.8-5.3 previous forecast ►Higher strategic capex: 3.0-3.5 − Capacity expansion of Q&T in Mobile 2.8 − Start of Oxelösund conversion ►Interest paid expected to be relatively stable Capex (m
Slide 21: Higher prices for iron ore and coking coal
Higher prices for iron ore and coking coal Iron ore SSAB’s purchase price, coking coal and iron ore ► Average pellet purchase price in Q2/21 was 18% higher in terms of SEK (+17% in Indexed USD) vs. Q1/21 – will impact result in 250 Q3/21 200 ► Iron ore spot prices have stabilized so far in July 150
Slide 22: Scrap spot prices increased in Q2
Scrap spot prices increased in Q2 ►SSAB’s average purchase price for scrap Scrap spot price in Q2/21 was 7% higher (in terms of USD/gross ton USD) vs. Q1/21 500 450 400 ►Stable development in July 350 300 250 200 150 100 50 0 AMM Chicago #1HM Source: AMM 22
Slide 23: Major planned maintenance outages in 2021
Major planned maintenance outages in 2021 ► Total maintenance costs for 2021 expected to be SEK 1,210m ► Costs in 2020 were lower than normal – more use of our own resources, due to a lower level of production ► SSAB Americas maintenance take place at SSAB’s mill in Mobile in 2021, including Q&T lin
Slide 24: Outlook and summary
Outlook and summary 24
Slide 25: SSAB's outlook for main customer segments Q3/2021
SSAB’s outlook for main customer segments Q3/2021 Segment Demand Comments Good Neutral Weak Outlook for Q1 for SSAB’s key customer segments Heavy Transport Heavy truck production at high level – shortage of semi-conductors Positive signs from rail car production in the US Good production level
Slide 26: SSAB's outlook for Q3/2021
SSAB’s outlook for Q3/2021 ►Demand for steel is estimated to be strong, Volume and pricing outlook driven both by underlying demand and by customer restocking Q3 2021 vs. Q2 2021 − Global demand for high-strength steel is also Shipments Realized prices estimated to be very strong SSAB Special Steel
Slide 27: Summary
Summary ►Solid internal performance in a strong market ►Positive outlook ►Continued strong cash flow generation ►Significant reduction of net debt ►Leading position in fossil-free steel − Strategic cooperation with AB Volvo and Volvo Cars − Shipments of fossil-free steel for concept vehicles already
Slide 28: Questions & Answers
Questions & Answers 28
Slide 29: Appendix
Appendix 29
Slide 30: Debt portfolio duration and interest rate
Debt portfolio duration and interest rate Debt cost and duration ►Duration of the loan portfolio was 6.1 (5.3) years Years % ►Averaged fixed interest term was 1.2 (0.9) 8.0 4.00 years 7.0 3.50 6.0 3.00 ►Average interest rate was 2.06% (1.93%) 5.0 2.50 4.0 2.00 3.0 1.50 2.0 1.00 1.0 0.50 0.0 0.00 201
Slide 31: SSAB's climate goals approved by the Science Based Targets initiative
SSAB's climate goals approved by the Science Based Targets initiative ►SSAB is committed to reducing its greenhouse gas (CO2e) emissions by 35% by 2032 (based on 2018 figures). − The goal applies to both direct and indirect emissions (Scope 1 and 2) − In line with the objective of keeping global war
Slide 32: A stronger, lighter and more sustainable world
A stronger, lighter and more sustainable world