Release Date: January 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SSAB AB (SSAAF, Financial) maintained a strong market position in special and premium steels, with record sales to the automotive industry.
- The company is leading the green steel transition, with significant customer interest in green steel for electric vehicles.
- SSAB AB (SSAAF) achieved a strong safety performance, ending the year with a safety level of 0.75, reflecting a robust safety culture.
- The company has a strong balance sheet, maintaining a stable net cash position similar to the previous year.
- Strategic investments in Luleå and Oxelösund are expected to significantly reduce CO2 emissions and reposition SSAB Europe as a premium steel producer.
Negative Points
- Operating results for 2024 were lower than the previous year, primarily due to price decreases in the American market.
- Q4 volumes in special steels were lower than expected, partly due to shipment issues and maintenance delays.
- The construction and automotive segments faced weaker demand, impacting overall sales.
- The company is facing ongoing strikes in Finland, which could negatively impact Q1 earnings.
- The market environment remains challenging, with sensitivity to supply and demand fluctuations, particularly in the Americas.
Q & A Highlights
Q: Could you provide an update on the strike situation in Finland and its potential impact on Q1 earnings?
A: The strike in Finland is ongoing and is planned to last six days. We are trying to minimize its impact, similar to previous strike incidents. However, it is likely to have some effect on Q1 earnings, comparable to past strikes.
Q: Is there a possibility to postpone or scale down the Luleå investment if the market environment remains weak?
A: While the Luleå investment is strategically important, we have the flexibility to postpone or delay it if necessary due to market conditions. However, our intention is to proceed with the plans as they are crucial for our strategic goals.
Q: Can you explain the rationale behind building two electric arc furnaces with a combined capacity of 2.5 million tonnes in Luleå?
A: The system is designed for 2.5 million tonnes, with half sent to Borlänge for processing and the other half used for the Cold Mill complex. This setup allows us to produce specialty and premium grades, which are in high demand, especially in the automotive segment.
Q: How do you view the current market situation for special steels, and do you expect to grow volumes in 2025?
A: There is a seasonal effect, but we have maintained our market share despite higher prices than competitors. If interest rates decrease and the construction segment recovers, we are optimistic about volume growth in 2025.
Q: What is the expected return on investment for the Luleå project, and how does it compare to maintaining the current system?
A: The investment in Luleå is attractive when considering the avoided costs of maintaining the current system, which would require significant investment. The new system offers modern, efficient technology and positions SSAB Europe as a supplier of unique customer value, making the investment decision sensible.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
