presentation of the q3/2021 results
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Presentation of the Q3/2021 resultsMartin Lindqvist, President & CEOHåkan Folin, CFO
Oct 25, 2021
Agenda
2
►Q3/2021 in brief
►Financials
►Outlook and summary
►Q&A
Nytt foto
Q3/2021 in brief
3
Another record quarter for SSABSolid internal performance in a strong market
4
Improved safety performance SSAB Special Steels growth
Improved product mix, SSAB Europe Record high earnings
6.14.7 4.0
1.9
18Q3 19Q3 21Q320Q3
LTIF
1,600300
-973
5,800
18Q3 19Q3 21Q320Q3
Shipments (ktonnes)
Operating profit (SEK m)
Premium share
320 299259
348
20Q318Q3 21Q319Q3
43%
2018
39%
2019 2020
38%
2021 YTD
36%
Leading force in the green transitionProven fossil-free value chain
5
Fossil-free steel to Volvo Group –load carrier for mining and quarrying
World’s first fossil-free plates rolled in Oxelösund
A number of new strategic agreements
Foto Ox
Operating profit by division – Record levelsSEK million
6
717528
352
-290
450 469
34
518
914
1,1751,006
20Q319Q1 19Q2 20Q119Q419Q3 20Q2 20Q4 21Q1 21Q2 21Q3
SSAB Special Steels
SSAB Europe
SSAB Americas
34766
-480 -609 -566 -631
83
758
1,512
2,524
20Q419Q1 19Q419Q2 19Q3 20Q320Q1 20Q2 21Q1 21Q2 21Q3
0
917 888528
-58
115 6
-395
18258
1,084
1,871
20Q1 20Q319Q1 19Q319Q2 19Q4 20Q2 20Q4 21Q1 21Q2 21Q3
Tibnor38 29 2
-39
12 29 6 48
218
449515
20Q319Q1 20Q219Q319Q2 20Q119Q4 20Q4 21Q1 21Q2 21Q3
Ruukki Construction
-14
95 134 67 1186 145
72 48162 229
19Q1 19Q2 20Q219Q3 19Q4 20Q1 20Q3 20Q4 21Q1 21Q2 21Q3
SSAB Special SteelsHigh level of shipments and earnings
7
► Strong underlying demand – planned maintenance and seasonal slowdown in Europe in Q3
► Shipments at 348 ktonnes – record for a Q3
− Up 34% vs. Q3/20 but -10% vs. Q2/21
► EBIT of SEK 1,006m (34m) and EBIT margin rose to 17% (1%)
− Better prices and higher volumes
− Stable production
► SSAB Special Steels assumed responsibility for the Mobile steel mill in Q3 to increase focus on high-strength steels
717528
352
-290
450 469
34
518
9141,175
1,006
19Q319Q1 19Q2 20Q319Q4 20Q420Q1 20Q2 21Q1 21Q2 21Q3
Operating profit/loss, SEK million
Shipments, ktonnes
338 339 299249
305 266 259 297376 388 348
20Q1 21Q319Q319Q219Q1 19Q4 20Q2 20Q3 21Q220Q4 21Q1
SSAB EuropeStrong market conditions, seasonal slowdown in Q3
8
► Higher share of premium
− Shipments up 6% vs. Q3/20 but -19% vs. Q2/21
− Premium share of 43% YTD and 45% in Q3
► EBIT rose to SEK 2,524m (-631m) – record level
− Higher prices
− Higher volume and better capacity utilization
− Planned maintenance
► EBIT margin increased to 23% (-10%)
Operating profit/loss, SEK million
Good development for Automotive AHSS strategy (y/y growth in %)
34766
-480 -609 -566 -631
83
758
1,512
2,524
20Q219Q1 21Q119Q2 20Q3 20Q419Q419Q3 20Q1 21Q2 21Q3
0
-8-14
40
5
-8
44
20202019 1-8/21
European industry volume, Automotive strip (Eurofer data)
SSAB European volume, Automotive AHSS
SSAB AmericasSignificantly higher prices
9
► Controlled order intake enables good price realization
► Good demand, higher shipments
− Up 5% vs. Q3/20 but down 2% vs. Q2/21
► EBIT rose to SEK 1,871m (-395m) – record level
− Significantly higher prices
► EBIT margin increased to 31% (-15%)
917 888528
-58
115 6
-395
18258
1,084
1,871
20Q119Q319Q1 20Q419Q2 19Q4 20Q2 20Q3 21Q1 21Q2 21Q3
3110
-14-26 -30 -27 -22
-11
16
62
121
19Q4 20Q319Q319Q1 19Q2 20Q1 20Q2 20Q4 21Q1 21Q2 21Q3
Change in realized prices y/y, %
Operating profit/loss, SEK million
TibnorAnother strong quarter, despite seasonal slowdown
10
► Competitive position improved significantlythrough completed efficiency program – SEK 200m on annual basis
► Revenue was up by 75% vs. Q3/20
► EBIT rose to SEK 515m (6m), EBIT margin 17% (0%)
− Higher volumes
− Better prices
− Inventory gains
38 29 2
-39
12 29 648
218
449515
20Q4 21Q119Q1 19Q2 19Q3 20Q219Q4 20Q1 20Q3 21Q2 21Q3
2.3 2.52.2 2.2 2.4
2.0 1.8 2.0
2.73.2 3.1
19Q4 21Q319Q1 19Q2 20Q319Q3 20Q1 20Q2 20Q4 21Q1 21Q2
Operating profit/loss, SEK million
Revenue, SEK billion
Ruukki ConstructionContinued improvement of operating profit
11
► Solid performance with full focus on productbusiness
► Revenue increased by 27% vs. Q3/20
► EBIT improved to SEK 229m (145m), EBIT margin 13% (10%)
− Better volumes in both Roofing and Envelopes
-14
95134
67
11
86
145
7248
162
229
21Q119Q419Q1 19Q2 20Q2 20Q319Q3 20Q420Q1 21Q2 21Q3
1.3
1.7 1.8 1.81.5 1.4 1.4
1.2 1.1
1.61.8
20Q2 20Q419Q419Q219Q1 19Q3 20Q1 20Q3 21Q1 21Q2 21Q3
Operating profit/loss, SEK million
Revenue, SEK billion
Financials
12
Strong earnings despite planned maintenance and seasonality
13
Sales
EBITDA and EBITDA margin2
Shipments1
EBITDA per tonne delivered steel21) Including the steel operations: Special Steels, Europe and Americas
2) Excluding items affecting comparability
0
5,000
10,000
15,000
20,000
25,000
30,000
18Q
1
18Q
2
18Q
3
18Q
4
19Q
1
19Q
2
19Q
3
19Q
4
20Q
1
20Q
2
20Q
3
20Q
4
21Q
1
21Q
2
21Q
3
2018 2019 2020 2021
SEK
mill
ion
-5.0 %
0.0 %
5.0 %
10.0 %
15.0 %
20.0 %
25.0 %
30.0 %
-1,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
18Q
1
18Q
2
18Q
3
18Q
4
19Q
1
19Q
2
19Q
3
19Q
4
20Q
1
20Q
2
20Q
3
20Q
4
21Q
1
21Q
2
21Q
3
2018 2019 2020 2021
SEK
mill
ion
EBITDA EBITDA %
-5000
5001,0001,5002,0002,5003,0003,5004,0004,5005,000
18Q
1
18Q
2
18Q
3
18Q
4
19Q
1
19Q
2
19Q
3
19Q
4
20Q
1
20Q
2
20Q
3
20Q
4
21Q
1
21Q
2
21Q
3
2018 2019 2020 2021SE
K/t
on
ne
0
500
1,000
1,500
2,000
18Q
1
18Q
2
18Q
3
18Q
4
19Q
1
19Q
2
19Q
3
19Q
4
20Q
1
20Q
2
20Q
3
20Q
4
21Q
1
21Q
2
21Q
3
2018 2019 2020 2021
kto
ns
Change in operating profit Q3/21 vs. Q3/20
SEKm
14
-973
590
-2,150
Var COGS
-120
8,660
2020 Q3 Price Volume
-850
Fixed costs FX
585
2021 Q3Capacity utilization
58
Other
5,800
Mainly SSAB Europe and
SSAB Americas
Higher rawmaterial costMainly Special
Steels
Higheractivity level
Change in operating profit Q3/21 vs. Q2/21
SEKm
15
4,083
5,8004,680 -30
Var COGS
32
-1,510
Price
-790
2021 Q2 Volume Fixed costs FX
-620
Capacity utilization
Other 2021 Q3
-45
Mainly SSAB Europe and
SSAB AmericasHigher raw
material cost
Mainly SSAB Europe
Plannedmaintenance
Effect from vacationreserve counteracted by
higher performancerelated wages
2021 2020 2021 2020 2020
SEK millions Q3 Q3 Jan-Sep Jan-Sep Full-year
Operating profit before depreciation/amortization 6,582 -66 14,341 1,925 3,364
Change in working capital -2,693 699 -4,458 -465 1,570
Maintenance expenditures -461 -332 -1,030 -1,016 -1,622
Other 49 11 -35 87 147
Operating cash flow 3,478 313 8,817 530 3,460
Financial items -125 -164 -302 -460 -545
Taxes -322 3 -712 -178 -56
Cash flow from current operations 3,031 151 7,803 -108 2,859
Strategic expenditures in plants and machinery -218 -75 -526 -467 -582
Acquisitions of shares and operations - -43 -103 -196 -231
Divestments of shares and operations - -1 - 105 143
Cash flow before dividend 2,812 32 7,174 -667 2,189
Dividend, non-controlling interest -2 -4 -9 -8 -9
Acquisitions of shares, non-controlling interest - - -127 - -
Net cash flow 2,810 27 7,039 -675 2,180
Net debt at beginning of period -6,461 -12,782 -10,278 -11,696 -11,696
Net cash flow 2,810 27 7,039 -675 2,180
Revaluation of liabilities against equity 1) -19 168 -219 177 778
Other 2) 300 -340 88 -731 -1,540
Net debt at the end of period -3,370 -12,926 -3,370 -12,926 -10,278
Strong net cash flow
Significant reduction in net debt
17
►Net debt decreased to SEK 3.4bn (12.9bn) at the end of Q3/21
►Net gearing was 5% (22%)
►2015-2017 excluding IFRS 16 (impact of around SEK 2bn)
0
5,000
10,000
15,000
20,000
25,000
2015 2016 2017 2018 2019 2020 2021 Q3
0
10
20
30
40
50
60
Net interest bearing debt, SEKm Net gearing ratio, %
Well-balanced maturity profile
SEKm
SEK 3.4bn
Cash
Back-upfacilities
18
Maturity profile Q3/2021
►Duration of the loan portfolio was 6.7 (4.9) years
►Liquid assets and committed credit lines at SEK 18.1bn – corresponds to 21% of rolling 12-month revenue
►Most maturities in 2021 refer to commercial papers
►Sustainability-linked bond of SEK 2bn issued in Q2
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Cashand
back-upfacilities
2021 2022 2023 2024 2025 2026+
Cash needs of the business
19
0.5
2.2
2.8
Capex (maintenance and strategic)
3.0-3.5
0.1
2020 2021F
Net interest
Taxes and other
4.8-5.3►Total cash needs* estimated at SEK 4.8-5.3bn
in 2021 – unchanged compared to previousforecast
►Higher strategic capex vs. 2020:
− Capacity expansion of Q&T in Mobile
− Start of Oxelösund conversion
► Interest paid expected to be relatively stable
►Taxes paid will normalize**
*Cash needs defined as capex, interest paid and taxes paid. Excluding working capital
**2019-level used as reference point, will depend on earnings in FY 2021
Higher purchase prices for iron ore and coking coal
►Average coking coal purchase price in Q3/21 was 34% higher in terms of SEK (31% in USD) vs. Q2/21
Coking coal
Iron ore
► Average pellet purchase price in Q3/21 was 13% higher in terms of SEK (+9% in USD) vs. Q2/21
SSAB’s purchase price, coking coal and iron ore
Indexed
20
0
50
100
150
200
250
300
Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Q3/21
Iron ore (SSAB purchase price, indexed) Coal (SSAB purchase price, indexed)
Scrap spot prices stable
Scrap spot price
USD/gross ton
Source: AMM21
►SSAB’s average purchase price for scrap in Q3/21 was 1% higher (in terms of USD) vs. Q2/21
►Slight decrease in October
0
50
100
150
200
250
300
350
400
450
500
AMM Chicago #1HM
Major planned maintenance outages in 2021
SEKm Q1/21 Q2/21 Q3/21 Q4/21 2021 2020 2019
SSAB Special Steels
- - 440 150 590 250 300
SSAB Europe - - 270 140 410 335 420
SSAB Americas
- - - 265 265 220 415
Total - - 710 555 1,265 805 1,135
Note: The estimates shown in table includes direct maintenance cost and cost of lower capacity utilization (under absorption), but excludes lost margins.
22
► Total maintenance costs for 2021 expected to be SEK 1,265m
► As of Q3/21, Mobile is part of SSAB Special Steels and maintenance cost will be shared between SSAB Special Steels and SSAB Americas
► Costs in 2020 were lower than normal – more use of our own resources, due to a lower level of production
Outlook and summary
23
Outlook for Q1 for SSAB’s key customer segments
Segment Demand Comments
Heavy Transport Heavy truck production impacted by shortage of semi-conductors
Improvement in rail car in the US
Automotive Good end-user demand – shortage of semi-conductors
Underlying structural growth in AHSS
Construction Machinery Good level in main markets, except China
Material Handling Strong demand from mining
Energy Modest improvement in oil and gas
Good activity within wind power and transmission
Construction Good underlying demand, seasonal slowdown in Q4
Service Centers Inventory more normal in Europe. Hesitation due to price level24
WeakHealthyGood
SSAB’s outlook for main customer segments Q4/2021
SSAB’s outlook for Q4/2021
►Demand for steel is estimated to be good, however, in Europe demand is expected to be impacted by semiconductor shortage and seasonal slowdown towards the end of the year
− Global demand for high-strength steel is estimated to be strong
25
Volume and pricing outlook
Q4 2021 vs. Q3 2021
Shipments Realized prices
SSAB Special Steel Stable Higher
SSAB Europe Higher Somewhat higher
SSAB Americas Significantly lower Significantly higher
Definitions: Significantly lower (>10%), Lower (5-10%), Somewhat lower (0-5%), Stable (~0%), Somewhat higher (0-5%), Higher (5-10%), Significantly higher (>10%)
Summary
►Solid internal performance in a strong market
►Record earnings
►Continued strong cash flow generation
►Significant reduction in net debt
►Leading position in fossil-free steel
− First steel rolled in Oxelösund
− Shipments to Volvo Group
− Proven fossil-free value chain
26
Questions & Answers
27
Appendix
28
Order intake
29
SSAB Europe, monthly order intake, tonnes
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000O
ct-2
0
Jul-
20
Ap
r-20
May
-20
Jun
-20
Au
g-20
Sep
-20
No
v-20
Dec
-20
Jan
-21
Mar
-21
Feb
-21
Ap
r-21
May
-21
Jun
-21
Jul-
21
Au
g-21
Sep
-21
► Q4/21 is expected to be fully booked
► Some uncertainty regarding the impact of component shortages and the extent of the seasonal slowdown
Debt cost and duration
%
Debt portfolio duration and interest rate
►Duration of the loan portfolio was 6.7 (4.9) years
►Averaged fixed interest term was 1.2 (0.9) years
►Average interest rate was 2.17% (1.85%)
Years
30
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
2018Q1
2018Q2
2018Q3
2018Q4
2019Q1
2019Q2
2019Q3
2019Q4
2020Q1
2020Q2
2020Q3
2020Q4
2021Q1
2021Q2
2021Q3
2018 2019 2020 2021
Avg. interest rate Avg. duration (rhs)
SSAB's climate goals approved by the Science Based Targets initiative
31
►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 warming well below 2°C
►Objective is scientifically based and in line with the Paris Agreement
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