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Tuloskausietkot 25.4. - SSAB:n esitys

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CFO Håkan Folinin esitys

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Tuloskausietkot 25.4. - SSAB:n esitys

  1. 1. Text Text SSAB – Global leader in high-strength steels Håkan Folin, CFO April 25, 2018 Nordnet Bank Helsinki PUBLIC
  2. 2. Agenda 2 SSAB in brief Strategy and targets 2020 Highlights in Q1/2018 and outlook for Q2/2018 More sustainable SSAB Q&A PUBLIC
  3. 3. SSAB in brief 66BILLION SEK Net sales in 2017 Steel making since 1878 15,000professionals in 50 countries 8.8MILLION TONNES Annual steel production capacity: OUR BUSINESSES: SSAB Special Steels, SSAB Europe, SSAB Americas, Tibnor, Ruukki Construction 3 PUBLIC
  4. 4. Our businesses – Leaders in their respective sectors TIBNOR Leading Nordic supplier of steel, other metals and processing services SSAB AMERICAS Market-leading North American producer of quality steel plate and coil SSAB SPECIAL STEELS Global steel and service partner in Quenched & Tempered Steels (Q&T) and Advanced High-Strength Steels (AHSS) SSAB EUROPE Leading Nordic-based steel producer of high-quality strip, plate and tube products RUUKKI CONSTRUCTION Sustainable building and construction products and services in Europe PUBLIC
  5. 5. Strong globally and locally SSAB main production sites SSAB production sites SSAB tubes production Sales coverage Luleå, Sweden Raahe, Finland Hämeenlinna, Finland Borlänge, Sweden Oxelösund, Sweden Montpelier, Iowa, USA Mobile, Alabama, USA Tube production in the Nordics PUBLIC
  6. 6. Plate North America Special Steels (Q&T) Globally Flat carbon steels Nordic region Automotive premium (AHSS) Globally # 1 # 1 ~# 5 # 1 SSAB’s four focus areas 2017 market position (#) and shipment volumes (#1 Martensitic) 6 1,691 537 1,971 1,192 Ktonnes Ktonnes KtonnesKtonnes PUBLIC
  7. 7. The high-strength, high-performance steel The renowned hard and tough steel for aggressive environments The premium engineering and tool steel Hardest steel for maximum protection For harsh weather and greener living SSAB DOMEX / BORON FORM / WEATHERING LASER® PLUS Optimized families Safety for automotive Strong brands and unique product portfolio PUBLIC
  8. 8. Strategy and targets 2020 PUBLIC
  9. 9. Taking the Lead! strategy as a foundation 9 Global leadership in high-strength steels Leading home market positions Leading value-added services Superior customer experience Most flexible operations High-performing organization Taking the Lead! PUBLIC
  10. 10. 2020 - Targets Grow Special Steels 1.35 MTON 2016 2017 Target 1.35 1.0 Enhance premium mix in SSE Develop SSAB Services Hardox Wearparts members Leader North American plate Market share (over time) Automotive premium 750 KTON 2016 2017 Target KTON 1 2 3 4 5 442 750 MTON Share of Premium products 40% 32 % in 2017 (30%)2016 2017 Target 265 >500 10 1.2 537 360 30% 28 % in 2017 PUBLIC
  11. 11. SSAB Special Steels Focus on growth in high-strength steels and related services 11 ktonShipments 2013-2016 were impacted by low activity in mining, construction machinery and lifting segments Improved growth rate in 2017 and Q1/2018 Upgrading applications to high-strength steel Cyclical recovery Solid demand trend 0% 2% 4% 6% 8% 10% 12% 14% 0 200 400 600 800 1,000 1,200 1,400 2013 2014 2015 2016 2017 Q1/2018, Rolling 12 months Shipments EBITDA margin Shipments and EBITDA-margin PUBLIC
  12. 12. SSAB Special Steels - Growth target 1,350 kton by 2020 World leading products Flexible production capacity Continuous improvements Upgrading Battlefield X-days Creating the market Global market coverage Sustainability Productivity Infrastructure 12 2016 2017 Target 1.35 1.0 1.2 MTON PUBLIC
  13. 13. SSAB Europe Focus on improving product mix and growing in automotive segment 13 kton Challenging market situation during 2013-2015 Chinese imports peaked in 2015 Synergies, cost savings, improved market conditions (anti-dumping) and better product-mix has lifted profitability Continuous improvements and further strengthening of the product-mix in focus Solid demand trend 0% 2% 4% 6% 8% 10% 12% 14% 16% 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 2013 2014 2015 2016 2017 Q1/2018, Rolling 12 months Shipments EBITDA-margin Shipments and EBITDA-margin PUBLIC
  14. 14. n/a n/a n/a n/a Increase premium product share to 40% by 2020 32% in 2017 14 30% 40% 70% 60% 100% 2016 100% Premium products Standard products 2020 Share of SSAB Europe volumes, % Focus areas for profitable mix growth Nordic Rest of EU RoW Automotive premium Other premium products Tubular products Processed products (CTL / Slitted) Standard hot rolled coils and other standard products PUBLIC
  15. 15. Automotive - growth of AHSS will outperform the overall market AHSS 11.6mt 148 410 50 Total AHSS use car body (kg) AHSS MILD OTHERS 187 195 80 Total AHSS use in car body (kg) AHSS MILD OTHERS 157 320 60 Total AHSS use in car body (kg) AHSS MILD OTHERS Others 8.8mt AHSS 20.5mt AHSS 15.7mt 2017 2020 2025 Mild steel 32.1 mt Mild steel 32.0mt Mild steel 21.4 mt Others 6.0 mtOthers 3.9 mt 15 PUBLIC
  16. 16. SSAB automotive focuses on five strategic applications % of total volume Bumpers 11% Car seats 20% Side impact beams 9% Structural details 57% Chassis, wheels & powertrain 3% 16 PUBLIC
  17. 17. SSAB Americas Focus on maintaining the leading position and growing market share to 30% 17 kton Higher import volumes and lower demand resulted in weak pricing in 2016 Anti-dumping duties introduced for heavy plate from 12 countries Improved market situation since beginning of Q4 2017 Good activity in Energy, Heavy Machinery, Steel Service Centers Tariff of 25% to be imposed on steel imports into the US (Section 232) – uncertainty around possible exceptions 0% 2% 4% 6% 8% 10% 12% 14% 0 500 1,000 1,500 2,000 2,500 2013 2014 2015 2016 2017 Q1/2018, Rolling 12 months Shipments EBITDA margin Shipments and EBITDA-margin PUBLIC
  18. 18. SSAB Americas’ five key strategic cornerstones Industry Leadership in Safety Leading Home Market Position Superior Customer Experience Low Cost/High Flexibility Strategy Market Diversification The safest steelmaking operations in all of North America, striving for zero accidents Number one in the American plate market in terms of EBITDA margin and market share Number one in customer service against our peers based on quarterly third-party surveys The best cost position versus our peer competitors and aggressively pursue continuous improvement projects Increase our premium product offering and geographic footprint, both by expanding existing customers and winning new ones 18 PUBLIC
  19. 19. Financial targets * ArcelorMittal, AK Steel, Nucor, Salzgitter, Tata Steel Europe, ThyssenKrupp, US Steel Profitability SSAB aims for an industry- leading profitability measured as EBITDA-margin among comparable peers* The objective is that the net debt/equity ratio will not normally exceed 35% Capital Structure Dividend target is 30-50% of profit after tax Dividends #3 (in 2017) 22% (at the end of 2017) Dividend of SEK 1.00 per share (45% of profit after tax) 19 PUBLIC
  20. 20. Highlights in Q1/2018 and outlook for Q2/2018 PUBLIC
  21. 21. Q1/2018 – In summary 21 Generally good demand Good growth in strategic areas Positive outlook – volume and price Improved earnings despite operational headwinds HYBRIT takes the next step AGM approved dividend of SEK 1.00 per share PUBLIC
  22. 22. 2222 Spot price development: Hot Rolled Coil (HRC) in Northern Europe, Plate in US, HRC in China Indexed (Jan 2013 =100) Q1 Northern Europe/HRC US/Plate HRC, NorthernEurope Plate, US HRC, China 0 20 40 60 80 100 120 140 160 Jan 13 Mar 13 May 13 Jul 13 Sep 13 Nov 13 Jan 14 Mar 14 May 14 Jul 14 Sep 14 Nov 14 Jan 15 Mar 15 May 15 Jul 15 Sep 15 Nov 15 Jan 16 Mar 16 May 16 Jul 16 Sep 16 Nov 16 Jan 17 Mar 17 May 17 Jul 17 Sep 17 Nov 17 Jan 18 Mar 18 Northern Europe US China Strong demand both in Europe and North America Good demand continued, low imports, inventories in balance, spot prices increasedStrong demand from both end-users and distributors, low inventories, plate spot prices increased sharply PUBLIC
  23. 23. Strong trend in profitability improvement 23 EBIT of SEK 916m, up SEK 214m compared with Q1/17 Profitability improvement continued in Q1/2018, despite some disruptions in operations and higher raw material costs Net debt reduced to SEK 11.4bn and gearing to 21% (32%) Earnings per share SEK 0.65 (1.49) Dividend of SEK 1.00 paid in Q2 MSEK Operating profit, EBIT -2000 -1000 0 1000 2000 3000 4000 5000 2012 2013 2014 2015 2016 2017 Q1/2018, Rolling 12 months PUBLIC
  24. 24. Cash flow trend Potential to further improve profitability Well-invested Reduction of working capital/sales Lower interest cost Tax rate ~20% 24 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Operating cash flow (Rolling 12 months) SEKm Operating cash flow PUBLIC
  25. 25. Stronger balance sheet Net debt and gearing continued to decrease in Q1/2018 25 SSAB has strengthened its balance sheet remarkably during 2016-2017 In Q1/2018 net gearing ratio decreased from 22% at the end of 2017 to below 21% Net debt decreased by SEK 183m during Q1/18 and amounted to SEK 11.4bn %SEKbn Net debt and net debt/equity ratio 0 10 20 30 40 50 60 2012 2013 2014 2015 2016 2017 Q1/2018 0 5,000 10,000 15,000 20,000 25,000 30,000 Net interest bearing debt, SEKm Net gearing ratio, % PUBLIC
  26. 26. Investments outlook Production capacity in place to reach 2020 growth targets Investments kept below depreciation: SSAB and Ruukki merger Major strategic investments in 2010-2012 Blast furnaces recently relined Areas for strategic CAPEX 2018 and going forward: Automotive high-strength steels Service expansion SEK bn 26 Investments 0 0.5 1 1.5 2 2.5 3 2014 2015 2016 2017 2018 and onwards Strategic Maintenance 2.1 2.5 1.3 1.6 ~2 PUBLIC
  27. 27. SSAB’s outlook for Q2/2018 27 Segment Volume trend Q2 vs. Q1 Comment SSAB Special Steels High level in Q1 SSAB Europe Transport problem resolved SSAB Americas Strong demand In North America, demand for heavy plate is expected to remain strong In Europe, demand for strip and heavy plate is expected to remain good The underlying demand for high-strength steels is anticipated to be good in most markets The prices realized by the three steel divisions are expected to be somewhat higher during the second quarter, particularly for SSAB Americas PUBLIC
  28. 28. More sustainable SSAB PUBLIC
  29. 29. Long-term options for steel production in the Nordics 29 Blast furnace route Relinings, coking coal batteries HYBRIT-route Joint venture with Vattenfall and LKAB Electric arc furnaces PUBLIC
  30. 30. Initiative for fossil-free steel (HYBRIT) Joint venture with Vattenfall and LKAB Successful pre-feasibility study closed in Q1 2018 Planning and designing of a pilot plant in Luleå and the iron ore deposits in Norrbotten 30 PUBLIC
  31. 31. Summary - a strong platform to continue profitable growth 31 Top-line growth will be driven by high-strength steels Home market leadership, growth and mix improvement will continue to support profitability development Several initiatives on-going to improve operational performance Stronger balance sheet and continued strong cash flow generation Well-invested to achieve the 2020 targets Good market situation and outlook HYBRIT takes the next step PUBLIC
  32. 32. Q&A PUBLIC
  33. 33. PUBLIC

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