SSAB Ab

we can drive our transformation from a position of strength. The level of earnings during the last years has been record high. We have achieved a 40% global market share in wear-resistance steels. And we have taken the lead in the green transformation of the steel industry. We plan for major investments in the Nordic operations, putting SSAB in a superior cost position The blast furnaces and coking plants will be closed and our CO2 emissions will largely be eliminated. Pilot shipments of fossil-free steel to customers already began in 2021. We will continue to increase the share of high-strength steels and premium steels. This will be done with industry-leading profitability and create value for all stakeholders. Join us when we're transforming the future of steel.

And welcome to the SSAB Q1 presentation. I am Per Hilstrom, I'm responsible for investor relations at SSAB. And presenting today, we have Martin Lindqvist, president and CEO, and Lena Kraelius, CFO. And if we have a look at the agenda, Martin will start here with an overview of the quarter. And then Lena will go into the financial details, and then Martin at the end with outlook and summary. And there will be good times also for questions. So by that, please Martin.

Once again, good morning and welcome to this Q1 presentation of 2023. Some highlights. We saw continued good results in special steels in America. We'll come back to that. We also saw a recovery on the European market where we had a weak second half and I would say also apparent demand-wise a weak fourth quarter. And we used that recovery, we were quick to adopt and adjusted production, started up the blast furnaces, blast furnace we had down for maintenance, planned maintenance in Rohe, and that was successfully started up in Q1, so we could take advantage of that recovery. During the quarter, we saw in all divisions, I would say, high and stable production. And if you compare the production volumes, we were in Q4 impacted by planned maintenance. We continue to improve our safety performance. As you know, one of our important targets is to become the safest steel company in the world. We are not there yet, but when we measure lost time injury frequency per million working hours, including contractors, we are down at 0.92, which is an improvement compared to last year. And we continue to strengthen our balance sheet. Typically, we don't generate so much net cash flow in Q1 because we build some working capital. But we had a net cash flow of almost 2.2 billion in the quarter. And then one have to remember that we yesterday paid out a dividend of approximately 9 billion. But the balance sheet continues to be in a decent shape. if we move into the divisions and start with special steels as said earnings on good levels underlying demand continues to be strong and as we said on the capital markets day we have been improving volumes and taking market shares we have had a volume increase the last 10 years of approximately six percent per year and that will continue can differ a bit between quarters but Q1 quite okay. And remember that Q4 was impacted by the yearly maintenance. And we also saw shipments recovery compared to Q4. And all in all, we made an EBIT margin of almost 25% in special steels. If you move into America's earnings continues on very good levels. We saw spot prices starting to move down a bit in Q4 and we saw on the market price recovery during Q1 and prices moving up slightly still on high levels into Q2. we had generally stable and good demand strong demand and we had maintenance in end of q3 and q4 beginning of q4 in americas but we had good shipments 476 000 tons in the quarter which is in line with the second quarter last year Europe, as said, we saw a weaker market versus one year ago, but sequentially a stronger market and stronger apparent demand in Q1 compared to Q4. And we saw low apparent demand, especially during this last part of Q4, and we saw some restocking also in the supply chain in the beginning of Q1. We had strong and stable production and raw had actually production record for a month in March. So that was good and we increased shipments with 17% compared to Q4 last year. We also saw that the spot prices turned around new year and started to move up and we are guiding for slightly higher prices into Q2. Tibnor also recovery versus Q4, and I would say stable underlying demand with the exception of the construction market, which is still very weak. And the big difference in profitability compared to Q4 is that we had higher negative revaluations in Q4 than in Q1, but we also saw a recovery in profitability. And rookie construction, weak market as expected in Q1, and we saw a more pronounced downturn versus Q4 than we normally see, but that's due to the weaker than normal construction market. We made a zero result of minus 9 million SEC, and we started to see the positive effects from the cost-saving programs we are running in rookie construction, and that will be more visible in the coming quarters. uh on our capital markets day and and during the beginning of q2 or end of q1 we launched in launched a new product family we call it ssab0 it is a steel produced with zero emissions in operations so scope one and scope two that is a third party verified we use we base that on recycled steel or recycled scrap using fossil free electricity biocarbon and biogas and we have that material now available on the market and are aiming for 40,000 tons this year. We have orders from leading companies like Volvo Group, Epiroc and Peab, and more will soon come. So it has been received very well on the market. And this is the first step, I would say, on our stepwise transformation to a fossil-free production system, where we have the zero steel available on the market right now. The next big step will be Oxelösund, the conversion of Oxelösund, It is going to be ready 2026. We will take the formal decision, the RFE, during the first half of this year. And when we do that transformation in Oxelösund, replacing the current blast furnaces and coke oven battery with an electric arc furnace, we will be able to take away 1.5 million tons of our own carbon dioxide emissions. And Oxelösund will be using either hybrid sponge iron or scrap or a combination of that. The next big step is planned to be 2028, when we will have the first mini-mill up and running, either in Luleå or Rae, and at the same time at that site, close the current coal-based system. In order to have that up and running 2028, we need to take a formal decision during 2024, and the first mini-mill will reduce our own carbon dioxide emissions with roughly 4 million tonnes per year. And then 2030, we're planning to have the second mini mill up and running. And in order to do that, we need to take the formal decision during 2026. And that will take away another four million tons of carbon dioxide emissions from SSAB per year. And that is the stepwise plan we have discussed and talked about. And this is just a reminder. So with that,