Debt financing

SSAB's funding is focused on supporting the Group’s strategy and covering the needs for financing within the framework of the Group's financial policy. The funding is primarily executed through the parent company. In order to minimize the refinancing risk, the objective is that the debt should have an even maturity profile. Short-term funding is primarily obtained through the commercial paper markets in Sweden and Finland. SSAB has a strong and supportive bank group providing committed back-stop facilities to secure the short-term funding and liquidity needs. In order to secure access to competitively priced funding in the relevant markets, SSAB strives to be transparent and informative toward the investor community.

Key figures		Q1/2018	2017	2016	2015	2014	2013
Net debt	SEK million	11,391	11,574	17,887	23,156	24,674	14,833
Net debt/equity ratio	%	21	22	34	52	56	55
Average term on the loan portfolio	years	5.5	5.5	5.1	4.6	3.9	4.1
Averaged fixed interest term	years	1.0	1.1	0.8	1.1	1.2	0.9
Non-utilized credit facilities	SEK million	8,585	8,263	7,096	8,308	8,714	7,319
Cash and cash equivalents	SEK million	3,862	4,249	3,879	2,711	3,014	2,124

Cash flow, financing and liquidity (from Q1/2018 report)

Operating cash flow for the first quarter of 2018 amounted to SEK 761 (876) million. Cash flow was positively impacted by operating profit, which was offset by higher working capital with higher accounts receivables due to increased sales.

Net cash flow amounted to SEK 311 (589) million. Net cash flow was affected, among other things, by payments for strategic expenditures, including acquisitions of operations and businesses, of SEK 73 (44) million. Total capital expenditure was SEK 358 (259) million. Net debt decreased by SEK 183 million during the first quarter and at March 31 amounted to SEK 11,391 million. The net debt/equity ratio was 21% (32%).

The term to maturity of the total loan portfolio at March 31 averaged 5.5 (4.9) years, with an average fixed interest period of 1.0 (0.7) years.
Cash and cash equivalents were SEK 3,862 (3,371) million and non-utilized credit facilities were SEK 8,585 (7,081) million, which combined corresponds to 18% (18%) of rolling 12 months’ sales.

Debt structure on (at March 31, 2018)

Net debt and net debt/equity ratio (at March 31, 2018)

Debt maturity (at March 31, 2018)

Debt cost and duration

Debt cost and duration, SSAB Q1 2018

Debt programs

SSAB’s funding is conducted primarily through the bank market and existing note and commercial paper programs. For borrowing for terms of up to ten years, a European Medium Term Note program (EMTN) is used, while Swedish and Finnish commercial paper programs are used for borrowing for shorter terms. The program limit of the EMTN program is EUR 2,000 million. The Swedish commercial paper program has a limit of SEK 5,000 million and the Finnish commercial paper program has a limit of EUR 500 million.

Main financial arrangements	Total amount
European medium Term Note program (EMTN)	EUR 2,000 million
Swedish commercial paper program	SEK 5,000 million
Finnish commercial paper program	EUR 500 million

Credit ratings

Credit ratings are important for the Group to be able to secure competitively priced funding. The company aims at having at least one rating.
On Oct. 31, 2017, S&P Global Ratings raised its long-term corporate credit rating on SSAB to 'BB-' from 'B+'.
At the same time, S&P affirmed the 'B' short-term corporate credit rating. The outlook is stable.

Standard & Poors' Ratings Direct, Research update 2017-10-31

Standard & Poors' Ratings Direct, Research update 2017-03-22

Standard & Poors' Ratings Direct, Research update 2016-06-08

Standard & Poors's Ratings Direct, Research Update 2016-02-22

Standard & Poors's RatingsDirect, Research Update 2015-12-21

Standard & Poor's RatingsDirect, Research Update 2015-05-29

Standard & Poor's RatingsDirect, Bulletin 2014-01-22

Standard & Poor's RatingsDirect, Research Update 2013-11-12