presentation of the q4/2020 and fy 2020 results

Presentation of the Q4/2020 and FY 2020 resultsMartin Lindqvist, President & CEOHåkan Folin, CFO

January 29, 2021

Agenda

2

►Q4 and FY 2020

►Financials

►Outlook and summary

►Q&A

Q4 and FY 2020 in brief

3

SSAB concludes IJmuiden discussions with Tata Steel

4

► After deeper analysis and discussions – limited possibilities to integrate IJmuiden into the framework of SSAB’s strategies

► Acquisition would be difficult for technical reasons. Synergies would not fully justify the costs for our desired transformation to fossil free – transaction would not meet our financial expectations

► Discussions have now ended

Photo connected to sustainability

Solid performance in a volatile yearSummary of 2020

5

Managing downturn Actions to limit Covid-19 Improved safety performance First in fossil-free steel

4.2

2019 2020

LTIF

3.7

-12% ► Safeguard the health and safety of our personnel

► Production and other critical operations have been running according to plan

► All measures continue in 2021

► Good flexibility in adjusting production level and manning to volatile demand

► Fixed costs reduced by more than SEK 1.6bn compared to FY2019

► Strong cash flow and reduced net debt

► World unique HYBRIT pilot plant started in Aug 2020

► Fossil-free products in the market in 2026

► SSAB's climate goals approved by the Science Based Targets initiative

Q4/20 – Better capacity utilization and higher shipments

6

Crudeproduction

Shipments

EBIT

Ktonnes

SEK million

Net cash flow

► Market recovered during autumn

► Better capacity utilization− Idled BF in Raahe started end of Sep

− Stable production in Oxelösund

► EBIT SEK 557m (-1,131m) in Q4

► Strong net cash flow supported by release of working capital

1,976 1,9022,1002,0001,621

2,0811,779 1,519

2,156

+42%

1,744 1,6141,7221,634 1,4791,787

1,422 1,4721,779

+21%

300 343

-251

-973

5571,035

1,6741,316

-1,131

503 398 387

-751

48 27

19Q418Q4 19Q219Q1 20Q3

2,856

19Q3 20Q1

-1,577

20Q2 20Q4

1,585

Operating profit/loss by divisionSEK million

7

-72

678

544

358

-126

458 485

73

491

18Q4 19Q419Q1 20Q219Q2 19Q3 20Q320Q1 20Q4

SSAB Special Steels

SSAB Europe

SSAB Americas

733

347

66

-480-609 -566 -631

83

18Q4 19Q219Q1 20Q119Q419Q3 20Q320Q2 20Q4

0

553

956 872

522

-222

106

-10

-435

45

20Q219Q118Q4 19Q2 19Q3 19Q4 20Q320Q1 20Q4

Tibnor2838

29

2

-39

1229

6

48

20Q119Q419Q3 20Q218Q4 19Q1 19Q2 20Q3 20Q4

Ruukki Construction78

-14

95 13467

1186

14572

18Q4 20Q219Q419Q1 19Q2 20Q119Q3 20Q3 20Q4

SSAB Special SteelsImproved margin for FY2020 despite Covid-19

8

► Shipments recovered in Q4

− Up 15% vs. Q3/20 and 19% vs. Q4/19

► Q4 EBIT increased to SEK 491m (-126m)

− Better capacity utilization and higher volumes

− No maintenance in Q4/20

► FY2020

− Shipments decreased to 1.1 (1.2) Mtonnes

− EBITDA margin improved to 13.2% (11.3%)

− Fixed costs reduced by around SEK 480m vs. 2019 and stable production performance

536

-72

678

544

358

-126

458 485

73

491

19Q118Q3 20Q219Q418Q4 20Q119Q2 19Q3 20Q3 20Q4

145

89

145130 134

83

151 156

60

117

Q3/18 Q3/20Q2/19Q4/18 Q1/19 Q3/19 Q4/19 Q1/20 Q2/20 Q4/20

Operating profit/loss, SEK million

Rolling production Oxelösund, ktonnes

SSAB EuropeWeak market conditions impacted 2020, recovery in Q4

9

► Demand was negatively impacted by Covid-19 in Q2-Q3, demand and shipments recovered in Q4

− Up 22% vs. Q3/20 and 21% vs. Q4/19

► Q4 EBIT rose to SEK 83m (-609m)


− Both BFs in operation in Raahe in Q4/20

− Lower steel prices had a negative impact

► FY2020

− Automotive AHSS decreased to 539 (578) ktonnes

− Premium share of 38% (39%)

− EBIT was SEK -1,114m (-677m)

− Fixed costs reduced by around SEK 620m vs. 2019

810 850 907 909794 752

955

695 751913

19Q319Q218Q3 18Q4 19Q1 20Q219Q4 20Q1 20Q3 20Q4


Shipments, ktonnes

460

733

347

66

-480-609 -566 -631

83

19Q318Q3 19Q419Q218Q4 19Q1 20Q1 20Q2 20Q3 20Q4

0

SSAB AmericasWeak market conditions impacted FY2020, recovery in Q4

10

► Demand was negatively impacted by Covid-19 in Q2-Q3, demand and shipments recovered in Q4

− Up 23% vs. Q3/20 and 19% vs. Q4/19



− Maintenance in Q4/19

− Lower steel prices and higher scrap cost

► FY2020

− EBIT was SEK -293m (2,128m)

− Significantly lower margins

− Fixed costs reduced by around SEK 270m

− Premium share 30% (33%)

790553

956 872

522

-222

106

-10

-435

45

19Q118Q3 18Q4 19Q2 20Q119Q3 20Q219Q4 20Q3 20Q4

25

3931

10

-14

-26 -30 -27-22

-11

18Q3 20Q118Q4 19Q219Q1 19Q3 19Q4 20Q2 20Q3 20Q4

Change in realized prices y/y, %


TibnorRestructuring program improved margins

11

► The market recovered in Q4, especially in Sweden and Finland

► Revenue was up by 16% vs. Q3/20


− Higher volumes

− Cost savings from the restructuring program

► FY2020

− EBIT improved to SEK 96m (30m)

− Positive effects from the restructuring program

53

2838

29

2

-39

12

29

6

48

19Q118Q3 19Q418Q4 20Q119Q2 19Q3 20Q2 20Q3 20Q4

1,92,2 2,3

2,52,2 2,2

2,42,0

1,82,0

19Q4 20Q318Q3 18Q4 20Q419Q1 19Q2 20Q219Q3 20Q1


Revenue, SEK billion

Ruukki ConstructionStable construction market in 2020, positive margin trend

12

► Comparable revenue on stable level, seasonally lower vs. Q3/20

► Q4 EBIT improved to SEK 72m (67m)

− Better volumes in Roofing

► FY2020

− EBIT increased to SEK 314m (283m)

− Focus on product business improved margin, Building Systems was divested in Q2/20

10378

-14

95

134

67

11

86

145

72

19Q419Q118Q3 19Q218Q4 19Q3 20Q1 20Q2 20Q3 20Q4

1,8 1,7

1,3

1,7 1,8 1,81,5 1,4 1,4

1,2

20Q218Q3 18Q4 19Q1 19Q419Q2 19Q3 20Q1 20Q3 20Q4


Revenue, SEK billion

Financials

13

Better capacity utilization and higher shipments improved the result

14

Sales

EBITDA and EBITDA margin2

Shipments1

EBITDA per tonne delivered steel2

1) Including the steel operations: Special Steels, Europe and Americas

2) Excluding items affecting comparability

0

5 000

10 000

15 000

20 000

25 0001

6Q

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2016 2017 2018 2019 2020

SEK

mill

ion

0200400600800

1 0001 2001 4001 6001 8002 000

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2016 2017 2018 2019 2020

kto

ns

-2,0 %

0,0 %

2,0 %

4,0 %

6,0 %

8,0 %

10,0 %

12,0 %

14,0 %

-500

0

500

1 000

1 500

2 000

2 500

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16

Q1

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2016 2017 2018 2019 2020

SEK

mill

ion

EBITDA EBITDA %

-2000

200400600800

10001200140016001800

16

Q1

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Q2

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2016 2017 2018 2019 2020SE

K/t

on

ne

Change in operating profit/loss Q4/2020 vs. Q4/2019

SEKm

15Note: Excluding items affecting comparability

Lower raw material costs, better capacity utilization, less maintenance

Higher capacity utilization, less maintenance

-1 131

557

-1 110

2019 Q4 Var COGSVolumePrice

1 510

600

210

Fixed costs

-80

FX

820

Unabsorption

-262

Other 2020 Q4

Prices decreased y-on-y in all steel divisions

Change in operating profit/loss Q4/2020 vs. Q3/2020

SEKm

16 Note: Excluding items affecting comparability

Seasonally low fixed cost level in Q3, less temporary layoffs and short-time working

Better capacity utilization, less maintenance

-973

557

-150

-460

Fixed costsVolume2020 Q3 Price

470

Var COGS

600 80

FX

990

Unabsorption 2020 Q4

Volumes increased significantly in all steel divisions

Higher capacity utilization, less maintenance

SEKm Q4/2020 Q4/2019 Q3/2020 2020 2019

EBITDA 1,439 -174 -66 3,364 6,177

Change in working capital 2,036 2,187 699 1,570 896

Maintenance expenditure -606 -666 -332 -1,622 -1,875

Other 61 -25 11 147 -4

Operating cash flow 2,930 1,321 313 3,460 5,194

Financial items -84 -50 -164 -545 -432

Taxes 122 -97 3 -56 -1,315

Cash flow from current operations 2,967 1,175 151 2,859 3,447

Strategic capital expenditure -115 -456 -75 -582 -1,035

Acquisitions of shares and operations -35 -448 -43 -231 -1,221

Divestments of shares and operations 39 118 -1 143 118

Cash flow before dividend 2,856 389 32 2,189 1,309

Dividend paid to shareholders - - - - -1,545

Dividend, non-controlling interest -1 -1 -4 -9 -7

Acquisition, non-controlling interest - -1 - - -46

Net cash flow 2,856 387 27 2,180 -289

Strong cash flow in Q4

0

5000

10000

15000

20000

25000

Cash andback-upfacilities

2021 2022 2023 2024 2025 2026+

Well-balanced maturity profile

SEKm

SEK 9.5bn

Cash

Back-upfacilities

18

Maturity profile Q4/2020

►Duration of the loan portfolio was 4.7 (7.1) years

►Liquid assets and committed credit lines at comfortable level of SEK 21.5bn –corresponds to 33% of rolling 12 month revenue

►Most maturities in 2021 refer to commercial papers

Significant reduction of net debt since Ruukki-merger

19

►Net debt decreased to SEK 10,278m (11,696m) at the end of 2020

►Net gearing was 19% (19%)

►2014-2017 excluding IFRS 16 (impact of around SEK 2bn)

0

5 000

10 000

15 000

20 000

25 000

30 000

2014 2015 2016 2017 2018 2019 20200

10

20

30

40

50

60

Net interest bearing debt, SEKm Net gearing ratio, %

Cash needs of the business

20

2021F

2.2Capex (maintenance and strategic)

0.5

2020

0.1

3.0-3.5

Net interest

Taxes and other

2.8

4.8-5.3►Total cash needs* estimated at SEK 4.8-5.3

billion in 2021

►Higher strategic capex:− 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 starting point, will depend on earnings in 2021

Higher prices for iron ore, lower for coking coal

►Average coking coal purchase price in Q4/20 was 2% lower in terms of SEK (1% in USD) vs. Q3/20

►Coal spot prices decreased during the quarter

Coking coal

Iron ore

► Average pellet purchase price in Q4/20 was 6% higher in terms of SEK (+9% in USD) vs. Q3/20

► Iron ore spot prices increased sharply during Q4, will impact SSAB in Q1/21

SSAB’s purchase price, coking coal and iron ore

Indexed

21

0

20

40

60

80

100

120

140

160

180

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20

Iron ore (SSAB purchase price, indexed) Coal (SSAB purchase price, indexed)

0

50

100

150

200

250

300

350

400

450

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8M

ay-1

8Ju

n-1

8Ju

l-1

8A

ug

18

Sep

18

Oct

18

No

v 1

8D

ec

18

Jan

19

Feb

19

Mar

19

Ap

r 1

9M

ay 1

9Ju

n 1

9Ju

l 19

Au

g 1

9Se

p 1

9 O

ct 1

9N

ov

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De

c 1

9Ja

n 2

0Fe

b 2

0M

ar 2

0A

pr

20

May

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Jun

e 2

0Ju

ly 2

0A

ug

20

Sep

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Oct

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No

v 2

0D

ec

20

Jan

21

Chicago #1HM Scrap (AMM) [USD/gross ton]

Scrap spot prices increased in Q4

Scrap spot price

USD/gross ton

Source: AMM22

►SSAB’s average purchase price for scrap in Q4/20 was 14% higher (in terms of USD) vs. Q3/20

►Scrap spot prices in US increased sharply in Dec-20 and Jan-21

Major planned maintenance outages in 2021

SEKm Q1/21 Q2/21 Q3/21 Q4/21 2021 2020 2019

SSAB Special Steels

- - 320 - 320 250 300

SSAB Europe - - 300 145 445 335 420

SSAB Americas

- - - 435 435 220 415

Total - - 620 580 1,200 805 1,135

Note: The estimates shown in table includes direct maintenance cost and cost of lower capacity utilization (under absorption), but excludes lost margins.

23

► Total maintenance costs for 2021 expected to be SEK 1,200m, compared to SEK 805m in 2020

► 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 lines

Outlook and summary

24

SSAB Americas

Covid-19 impacted steel markets in 2020Strategic targets moved from 2022 to 2023

25

Premium share

SSAB Europe – supported by Tibnorand Ruukki ConstructionSSAB Europe

Automotive AHSS

PremiumShipments(ktonne)

SSAB Special Steels

Shipments(million tonnes)

1.6

2020 2023

1.1

SSAB Services

Sales(SEK billion)

2020

2.0Organic

2023

3.0

1.5 Acquistions

4.5

40-45%

Market share in the Nordics(over time)

30% (2020)

39%

SSAB Europe

Premium share

38% (2020)

46% 37% in 2020

539

800

2020 2023

719900

20232020

Firmly on track for a more sustainable SSAB

26

► SSAB’s overarching goal to be fossil-free in 2045

► SSAB’s aims to be the first to offer the market fossil-free steel in 2026

► The world unique HYBRIT pilot plant was started up in Luleå, Sweden in Aug 2020

► Sustainability strategy was updated in 2020 and SSAB's climate goals were approved by the Science Based Targets initiative

Outlook for Q1 for SSAB’s key customer segments

Segment Q4/2020 Comments

Heavy Transport Heavy truck production at high level

Rail cars in the US still low

Automotive Recovery in production

Underlying structural growth in AHSS

Construction Machinery Production levels recovering in main markets

Material Handling Mining operations continue at a good level

Energy Low activity in oil and gas

Good activity within wind power and transmission

Construction Stable underlying demand, seasonal slow down

Service Centers Restocking expected in Europe and the US27

WeakHealthyStrong

SSAB’s outlook for main customer segments Q1/2021

SSAB’s outlook for Q1/2021

Business segmentVolume trend Q1/21

vs. Q4/20

SSAB Special Steels

SSAB Europe

SSAB Americas

► In Q1/21 demand for steel is expected to be good, driven both by underlying demand and by customer restocking− Still uncertainty as to how Covid-19 will affect demand mid-

term

− Global demand for high-strength steel is estimated to be good

►Prices realized during (vs. Q4/20) are expected to:− SSAB Special Steels: increase

− SSAB Europe: increase significantly

− SSAB Americas: increase significantly

►Costs for raw material (vs. Q4/20) will increase

28

Volume outlook

Demand driven both by underlying demand and by customer restocking

Shipments in Q4/20 for SSAB Americas were high, and slab balance low into Q1

Summary

►Good flexibility in 2020 to manage downturn

►Strong cash flow and reduced net debt

►Fixed costs reduced by over SEK 1.6bn

►Market recovery in Q4, succesful ramp-upof production

►Good demand expected in Q1/21

►Discussions with Tata Steel have now ended

►Target to be first in fossil-free steel

29

Questions & Answers

30

Appendix

31

Debt cost and duration

%

Debt portfolio duration and interest rate

►Duration of the loan portfolio was 4.7 (7.1) years

►Averaged fixed interest term was 0.9 (1.1) years

►Average interest rate was 1.82% (3.08%)

Years

32

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2

2018Q3

2018Q4

2019Q1

2019Q2

2019Q3

2019Q4

2020Q1

2020Q2

2020Q3

2020Q4

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

Avg. duration (rhs) Avg. interest rate

SSAB's climate goals approved by the Science Based Targets initiative

33

►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

►SSAB's aims to be the first to offer the market fossil-free steel in 2026

►The world unique pilot plant for fossil-free steel, producing sponge iron (DRI/HBI), was started up in Luleå, Sweden

►First using natural gas and then hydrogen to be able to compare production results

►The Swedish Energy Agency granted the joint venture SEK 22m for a study to establish the prerequisites for the demonstration plant

34

Hybrit: Start up of world unique pilot plant

presentation of the q4/2020 and fy 2020 results

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