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		Q3/2018	2017	2016	2015	2014	2013
Net debt	SEK million	10,192	11,574	17,887	23,156	24,674	14,833
Net debt/equity ratio	%	17	22	34	52	56	55
Average term on the loan portfolio	years	6.1	5.5	5.1	4.6	3.9	4.1
Averaged fixed interest term	years	1.3	1.1	0.8	1.1	1.2	0.9
Non-utilized credit facilities	SEK million	7,025	8,263	7,096	8,308	8,714	7,319
Cash and cash equivalents	SEK million	4,148	4,249	3,879	2,711	3,014	2,124

Cash flow, financing and liquidity (from Q3/2018 report)

Operating cash flow for the first nine months of 2018 was SEK 4,008 (3,535) million. Cash flow was positively impacted by operating profit but negatively impacted primarily by higher working capital resulting from increased sales, as well as higher maintenance capital expenditures.

Net cash flow amounted to SEK 1,850 (2,467) million. Net cash flow was impacted, among other things, by payments for strategic expenditure, including acquisitions of operations and businesses, of SEK 211 (163) million as well as by a dividend totaling SEK 1,030 (-) million to shareholders. Total capital expenditure was SEK 1,394 (966) million. Net debt decreased by SEK 1,382 million during the nine months of the year and at September 30, 2018 amounted to SEK 10,192 million. The net debt/equity ratio was 17% (27%).

The term to maturity of the total loan portfolio at September 30 averaged 6.1 (4.9) years, with an average fixed interest period of 1.3 (1.1) years.

Cash and cash equivalents were SEK 4,148 (4,865) million and non-utilized credit facilities were SEK 7,025 (7,747) million, which combined corresponds to 15% (20%) of rolling 12 months’ sales.

Debt structure on (at Sep 30, 2018)

Net debt and net debt/equity ratio (at Sep 30, 2018)

Debt maturity (at Sep 30, 2018)

Debt cost and duration

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 June 25, 2018, S&P Global Ratings raised its long-term corporate credit rating on SSAB to 'BB' from 'BB-'.
At the same time, S&P affirmed the 'B' short-term corporate credit rating. The outlook is positive.

Standard & Poors' Ratings Direct, Research update 2018-06-25

Standard & Poors' Ratings Direct, Research update 2018-02-15

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' Ratings Direct, Research Update 2016-02-22

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

Standard & Poors' RatingsDirect, Research Update 2015-05-29

Standard & Poors' RatingsDirect, Bulletin 2014-01-22

Standard & Poors' RatingsDirect, Research Update 2013-11-12