SSAB’s strategy aims to secure the company’s long-term development to create value for shareholders and other stakeholders. SSAB’s main financial objective is to reach industry leading profitability and to generate solid cash flows, enabling further debt reduction and shareholder dividends.
Strong offering and leading market positions
SSAB has four core markets:
1. Flat carbon steel and tubes in the Nordics
2. Heavy plate in North America
3. Automotive premium steel (Advanced High-Strength Steel, AHSS) globally
4. Special steels (Quenched and Tempered, Q&T and AHSS) globally
SSAB has leading positions in its Nordic and North American home markets. SSAB has an overall market share of 40-45% for flat carbon steels in the Nordic region. In North America, SSAB is the largest producer of heavy plate, with market share approaching 30%.
With its leading products, brands, knowledge and well-invested asset base, SSAB also holds the number one position in the global market for Quenched and Tempered (Q&T) plate and strip and in selected Advanced High-Strength Steels (AHSS) segments. Demand for higher productivity and improved energy efficiency are important drivers in the use of high-strength steels, which provide advantages in the form of stronger, lighter and more durable steel applications. Growth in high-strength steels, services and other premium grades will mean better returns for SSAB since profitability is relatively higher in these areas compared to more standardized products.
Strategic growth targets for 2020
• SSAB Special Steels aims to deliver 1.35 million tonnes of high-strength steels in 2020. In 2018, shipments were 1.3 million tonnes compared to 1.0 million tonnes in 2016
• SSAB Europe aims to improve the product mix to 40% of premium products in 2020. In 2018, premium products constituted 36% of the total volume compared to 30% in 2016
• As part of the mix improvement, SSAB Europe aims to deliver 750 thousand tonnes of Automotive premium products in 2020. In 2018, shipments amounted to 562 thousand tonnes compared to 442 thousand tonnes in 2016
• SSAB Americas aims for a market share of 30% over time on the North American plate market. SSAB estimates that in 2018 its market share was around 28%
• For services, SSAB aims to grow the number of members in the Hardox Wearparts network to more than 500 in 2020. At the end of 2018, the network had 483 members compared to 265 at the end of 2016
Strong balance sheet
During 2016-2018, SSAB significantly strengthened its balance sheet. A combination of the 2016 rights issue and strong cash flow generation has resulted in a gearing ratio of 14% at the end of 2018. SSAB has a well-invested production system with capacity to reach the strategic growth targets for 2020. The reduction in debt will have a positive impact on interest costs and enable future strategic initiatives.
Efficiency efforts are driven through continuous improvement using the SSAB One management philosophy. This includes smaller daily improvements as well as larger projects. SSAB has a yearly process with target setting for continuous improvement efforts as well as an ongoing follow-up process.
Realization of the strategic growth targets combined with the improved efficiency as a result of continuous improvement is the platform to achieve our financial target of industry-leading profitability. This is defined as the highest EBITDA margin compared to the following peers; ArcelorMittal, AK Steel, Nucor, Salzgitter, Tata Steel Europe, Thyssenkrupp and US Steel. The improvement potential in profitability, a balanced investment level and a strong balance sheet create a solid foundation for cash flow generation during the coming years.
SSAB’s objective is to become one of the world’s most sustainable steel companies. We are convinced that by managing our business in a sustainable way we will increase the possibilities to deliver strong financial and operational results. Our plan is to eliminate all of our CO2 emissions by 2045.
Read more about sustainability in SSAB.