Continued earnings improvement Presentation of the Q2/2017 result Martin Lindqvist, President & CEOHåkan Folin, CFO
July 20, 2017
Agenda
Q2/2017 and performanceby division
Financials
Summary & outlook
Q&A
2
Q2/2017 and performance by division
3
Stable market situation both in Europe and North America
4
Spot price development: Hot Rolled Coil (HRC) in Northern Europe, Plate in US, HRC in China
Indexed (Jan 2015 =100)
Q2
Northern Europe/HRC
US/Plate
Stable demand, lower imports,
low inventories, plate spot prices
decreased slightly
Good demand, higher imports,inventories somewhat high, spot
prices decreased
50
60
70
80
90
100
110
120
130
140
150
Jan
15Fe
b 15
Mar
15
Apr 1
5M
ay 1
5Ju
n 15
Jul 1
5Au
g 15
Sep
15O
ct 1
5No
v 15
Dec 1
5Ja
n 16
Feb
16M
ar 1
6Ap
r 16
May
16
Jun
16Ju
l 16
Aug
16Se
p 16
Oct
16
Nov
16De
c 16
Jan
17Fe
b 17
Mar
17
Apr 1
7M
ay 1
7Ju
n 17
Jul 1
7
Northern Europe HRC US Plate China HRC
Summary of Q2/2017Significant earnings improvement
EBIT of SEK 1,205m, upSEK 503m compared with Q1/17+ Higher prices+ Improved capacity utilization- Higher costs of raw materials
EBIT up SEK 613m vs. Q2/16
Operating cash flow at SEK 1,069m
Gearing down to 30% (32%)
SEKm Q2/2017 Q2/2016 Q1/2017 FY 2016
Sales 17,115 14,471 15,739 55,354
EBITDA 2,167 1,509 1,627 4,951
EBIT 1,205 592 702 1,213
Operating cash flow
1,069 1,151 876 3,207
Key figures
5
Sales and EBITDA marginSEKm
1) Excluding depreciation/amortization on surplus values on intangible and tangible fixed assets related to the acquisition of Rautaruukki
6
SSAB Special SteelsBetter capacity utilization and growing volumes
Shipments increased 10% vs. Q1/17 • Growing demand especially in
Heavy Transport and Construction Machinery segments
EBIT was SEK 362m, up SEK 119m vs. Q1/17+ Higher volumes+ Better capacity utilization- Production issues in steel mill
and higher cost for logistics
SEKm Q2/2017 Q2/2016 Q1/2017 2016
Sales 4,133 3,398 3,925 12,582
EBITDA 495 437 377 1,453
EBIT1 362 303 243 902
Shipments,ktonnes 304 256 277 1,008
0%
5%
10%
15%
20%
25%
-500
500
1,500
2,500
3,500
4,500
5,500
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2015 2016 2017
Sales EBITDA %
SEKm
7
SSAB Europe Continued strong profitability improvement
Shipments +1% vs. Q1/17• Strong demand in
Construction Material• Automotive premium
continued at good levelEBIT in Q2 was SEK 1,022m, up SEK 196m vs. Q1/17+ Higher prices+ Better mix- Higher raw material costs
7 1) Excluding depreciation/amortization on surplus values on intangible and tangible fixed assets related to the acquisition of Rautaruukki
SEKm Q2/2017 Q2/2016 Q1/2017 2016
Sales 8,378 6,668 7,657 25,831
EBITDA 1,381 728 1,182 2,458
EBIT1 1,022 366 826 1,000
Shipments,ktonnes 991 946 982 3,720
Sales and EBITDA margin
0%2%4%6%8%10%12%14%16%18%
01,0002,0003,0004,0005,0006,0007,0008,0009,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2015 2016 2017
Sales EBITDA %
SSAB Americas Profitability improved due to higher prices
Demand was stable during Q2• Steel Service Centers in wait-
and-see modeShipments were down 7% vs. Q1/17 due to Mobile outageEBIT was SEK 39m, up SEK 196m from Q1/17+ Higher prices- Maintenance outage- Lower volumes
SEKm
8 1) Excluding depreciation/amortization on surplus values on intangible and tangible fixed assets related to the acquisition of IPSCO
SEKm Q2/2017 Q2/2016 Q1/2017 2016
Sales 3,138 2,841 3,019 10,639
EBITDA 201 309 8 737
EBIT1 39 162 -157 110
Shipments,ktonnes 452 475 486 1,924
Sales and EBITDA margin
0%2%4%6%8%10%12%14%16%18%20%
0
1000
2000
3000
4000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2015 2016 2017
Sales EBITDA %
TibnorResult improved year-on-year, but was lower than in Q1/17
Shipments at the same level as in Q1/17Sales increased 2% vs. Q1/17EBIT was SEK 67m, down SEK 32m vs. Q1/17- Lower marginsEBIT improved by SEK 25m vs. Q2/16
9
SEKm
SEKm Q2/2017 Q2/2016 Q1/2017 2016
Sales 2,057 1,820 2,019 6 879
EBITDA 88 63 118 191
EBIT1 67 42 99 106
1) Excluding depreciation/amortization on surplus values on intangible and tangible fixed assets related to the acquisition of Rautaruukki
Sales and EBITDA margin
-3%-2%-1%0%1%2%3%4%5%6%7%
0
500
1000
1500
2000
2500
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2015 2016 2017
Sales EBITDA %
Ruukki ConstructionResult below last year’s level due to lower margins
Seasonally higher demandSales +6% vs. Q2/16• Growth in Building
ComponentsEBIT was SEK 63m, down SEK 12m vs. Q2/16 - Lower margins due to higher
input costs
10
SEKm
1) Excluding depreciation/amortization on surplus values on intangible and tangible fixed assets related to the acquisition of Rautaruukki
SEKm Q2/2017 Q2/2016 Q1/2017 2016
Sales 1,531 1,444 1,131 5,304
EBITDA 97 114 8 322
EBIT1 63 75 -29 171
Sales and EBITDA margin
-5%
0%
5%
10%
15%
20%
25%
0
500
1000
1500
2000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2015 2016 2017
Sales EBITDA %
Financials
Profitability continued to improveEBITDA margin above 12%
12
Sales
EBITDA and EBITDA margin
Shipments1
EBITDA per tonne delivered steel
1) Including the steel operations: Special Steels, Europe and Americas
0200400600800
1,0001,2001,4001,6001,8002,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2015 2016 2017
kton
s
02,0004,0006,0008,000
10,00012,00014,00016,00018,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2015 2016 2017
SEK
mill
ion
0 %2 %4 %6 %8 %10 %12 %14 %
0
500
1,000
1,500
2,000
2,500
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2015 2016 2017
SEK
mill
ion
EBITDA EBITDA %
0
200
400
600
800
1,000
1,200
1,400
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2015 2016 2017
SEK/
tonn
e
Change in operating profit Q2/2017 vs. Q2/2016
SEKm
13
592
2017 Q2
1,205
Other
58
FX
85
Fixed cost
-20
Var COGS
-1,280
Volume
-120
Price
1,890
2016 Q2
Change in operating profit Q2/2017 vs. Q1/2017
SEKm
14
805
115
164
701
90
FXFixed cost
-185
Var COGS
-485
VolumePrice2017 Q1
1,205
Other 2017 Q2
Cash flow - Improved earnings offset by higher working capitalSEKm Q2/2017 Q2/2016 Q1/2017 2016
Operating profit before depreciation/amortization 2,167 1,509 1,627 4,951
Change in working capital -869 -66 -526 -661
Maintenance expenditure -242 -263 -215 -1,053
Other 13 -29 -10 -30
Operating cash flow 1,069 1,151 876 3,207
Financial items -344 -359 -222 -994
Taxes -73 -50 -21 80
Cash flow from current operations 652 742 633 2,293
Strategic capital expenditure in plant and machinery -40 -69 -44 -273
Acquisitions of shares and operations -11 -14 0 -46
Divestments of shares and operations 0 0 0 -
Cash flow before dividend 601 659 589 1,974
15
Net debt and gearing continued to decrease
16
Net gearing ratio decreased from 32% at the end of Q1/17 to 30%
Net debt decreased by SEK 1.3bn and amounted to SEK 15.7bn
%SEKbn
Net debt and net debt/equity ratio
0
10
20
30
40
50
60
2012 2013 2014 2015 2016 Q2/20170
5,000
10,000
15,000
20,000
25,000
30,000
Net interest bearing debt, SEKm Net gearing ratio, %
Net debt reduction according to planSEK 10 bn between the end of Q1/16 and the end of 2017
SEK bn
10.0
4.9
8.3
TargetRemaining in 2017
1.7
3.4
Realized so farRights issue (net) Net cash flow Q2/16-Q2/17
17
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Cash andback-upfacilities
2017 2018 2019 2020 2021 2022-
Balanced maturity profile in coming years
18
Loans maturing in 2017-2018 amounts to SEK 5.4bnOf the total maturities in 2017, commercial paper accounts for SEK 0.6bnBond issue of SEK 1bn and buy-back of 1.2bn outstanding bonds 2017 and 2019, effective in Q2
SEKm
Q2/2017
5.4bn
Debt cost and duration
%
Duration on debt portfolio and interest rate
19
Duration of the loan portfolio was 5.2 years (4.9 at the end of Q1)Averaged fixed interest term was 0.8 years (0.7) Average interest rate was 3.27% (3.19 % in Q1)
Years
4.0
4.2
4.4
4.6
4.8
5.0
5.2
5.4
Q1 Q2 Q3 Q4 Q1 Q2
2016 2017
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Avg. duration (rhs) Avg. interest rate
Higher raw material prices
20
Coking coal
Iron ore
Average coking coal purchase price in Q2 was 9% higher in SEK vs. Q1/17
Average pellet purchase price in Q2 was 1% higher in SEK vs. Q1/17Contract with LKAB for the period Apr 2017-Mar 2018
• Prices are adjusted on monthly basis
SSAB’s purchase price, coking coal and iron ore
Index
50
100
150
200
250
300
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017
Coal (SSAB's purchase price, indexed)
Iron ore (SSAB's purchase price, indexed)
0
50
100
150
200
250
300
350
Jan-
15Fe
b-15
Mar
-15
Apr-
15M
ay-1
5Ju
n-15
Jul-1
5Au
g-15
Sep-
15O
ct-1
5N
ov-1
5De
c-15
Jan-
16Fe
b-16
Mar
-16
Apr-
16M
ay-1
6Ju
n-16
Jul-1
6Au
g-16
Sep-
16O
ct-1
6N
ov-1
6De
c-16
Jan-
17Fe
b-17
Mar
-17
Apr-
17M
ay-1
7Ju
n-17
Chicago #1HM Scrap (AMM) [USD/gross ton]
Scrap spot prices decreased during Q2
21
Scrap spot priceUSD/gross ton Q2
Source: AMM
Scrap spot prices in US at the end of Q2/17 were:
2% lower vs. Q1/1719% higher vs. Q2/16
Outlook
SSAB’s outlook for Q3/2017In North America, demand for heavy plate is expected to be relatively stable, although with some seasonal slowdown
In Europe, demand is expected to be good, although with normal seasonal slowdown
Demand for high-strength steels is expected to continue to develop positively
Overall, SSAB’s shipments are expected to be seasonally somewhat lower than during Q2/17
Overall, realized prices are expected to be relatively stable vs. Q2/17
Maintenance outage in SSAB Special Steels and SSAB Europe
23
24
Develop SSAB Services
2016 Target
Strategic direction – Taking the lead!2020-targets presented at CMD in June
Grow Special Steels 1.35 MTON
2016 Target
1.35
1.0
Enhance premium mix in SSE
Wearpartsmembers
Leader North American plate
30%
Market share(over time)
Automotive premium 750 KTON
2016 Target
KTON
442
750MTONShare of Premium products
40%265
>500
24
1 2 3 4 5
Questions & Answers
Appendix
Anti-dumping measures are in placeand under preparation in EU and the US
Cold-rolled carbon steels (China, Russia)Hot-Rolled flat carbon steels (China) • Final AD duties for strip 18%-36% in April
2017• Final AD duties 65%-74% for plate in Feb
2017
Under preparationIn place
Europe
US
Hot-rolled sheet and coils (China, Russia, India, Ukraine, Indonesia, Taiwan, Thailand)Hot-rolled sheet and coils (Australia, Brazil, Japan, Korea, Netherlands, Turkey)Heavy plate (China, India, Indonesia, Russia, Ukraine)
Heavy plate (China, Austria, Belgium, Taiwan, France, Germany, Italy, Japan, South Korea)• Final AD decision for the 8 countries in
March 2017 – increased duties vs. preliminary duties
• Final AD and CVD decision on Chinese plate AD margin of 68% and a subsidy (CVD) margin of 251%
Hot-Rolled flat carbon steels (Brazil, Russia, Iran, Serbia and Ukraine)• EU decided not impose preliminary
duties, final decision expected in Oct 2017
Corrosion Resistant Steel (China)
Cold-rolled sheet and coils (Brazil, India, Korea, Russia, United Kingdom)Heavy plate (Turkey, Brazil, South Africa)
Preliminary AD decision in place for Turkey, Brazil, South Africa
27
Maintenance outages in 2017
28
Costs were SEK 280m for Q2/17 (incl. direct costs and under absorption)SSAB Americas SEK 230m, SSAB Europe SEK 50m
Q3/17 costs are estimated to be SEK 350m - SSAB Special Steels SEK 230m, SSAB Europe SEK 120m
SEKm Q1/2017 Q2/2017 Q3/2017 Q4/2017 2017 2016
SSAB Special Steels 230 230 250
SSAB Europe 20 50 120 170 360 300
SSAB Americas 160 230 390 290
Total 180 280 350 170 980 840
Major, planned maintenance outages 2017
Note: The estimates shown in table includes direct maintenance cost and cost of lower capacity utilization (under absorption), but excludes lost margins.
SSAB’s key customer segments – outlook Segment Outlook for
Q3 vs. Q2 Comments on outlook
Heavy TransportGrowth in demand expected in Europe
Railcar production in US is expected to continue to decline
Automotive Automotive is expected to remain at high level in Europe
Construction Machinery
Demand in the main European markets is expected to continue at good level
Demand in US is showing some signs of recovery from low level
MiningHigher repair and maintenance activity in the Mining sector
First signs of pick-up also in investments of new machinery
EnergyContinued solid demand in wind energy segment expected
Oil-related segments are expected to pick-up
Construction Material Demand expected to continue at seasonally high level
Service Centers (US) Demand from Service Centers is expected to be fairly stable in Q3, although inventories are still low
2929