The fourth quarter
- Revenue was SEK 16,988 (16,973) million
- EBITDA was SEK 1,439 (-127) million
- Operating profit/loss was SEK 557 (-1,131) million
- Earnings per share were SEK 0.33 (-1.21)
- The Board proposes that no dividend will be paid for 2020
Comments by the CEO
The year 2020 was affected by a weak market as a consequence of Covid-19, and SSAB’s operating result fell to SEK -325 (2,159) million. The market picked up during the autumn and SSAB’s shipments and capacity utilization improved. This lifted earnings for the fourth quarter of 2020 to SEK 557 (-1,131) million. Operating cash flow was strong during the quarter and amounted to SEK 2,930 (1,321) million. The net debt decreased to SEK 10.3 (11.7) billion and SSAB has a strong financial position.
All three steel divisions increased operating profit as a result of better capacity utilization and higher shipments. SSAB Special Steels’ operating profit rose to SEK 491 (-126) million compared with the fourth quarter of 2019. SSAB Europe’s earnings rose to SEK 83 (-609) million and SSAB Americas’ to SEK 45 (-222) million.
Health and safety are top priorities and our efforts delivered results in 2020. Lost time injury frequency (LTIF) decreased to 3.7 (4.2). Several measures were put in place to limit the spread of Covid-19 and production and maintenance could be carried out without any major disruptions. The greatest impact of Covid-19 on SSAB in 2020 was from weaker steel markets, therefore we decided to push back the timing of achieving our strategic targets from 2022 to 2023. We introduced several cost savings measurements to counteract the negative effects of weak demand and cut fixed costs by a total of more than SEK 1.6 billion compared with full-year 2019. Market conditions have improved, and we expect good activity during the first quarter of 2021. Temporary layoffs and short-time work ended at the turn of the year.
SSAB’s primary goal is to be fossil free by 2045, and we continue work on being the first to market, in 2026, with fossil-free steel. The world unique HYBRIT pilot plant was inaugurated during 2020 and it was decided to bring forward the start of the demonstration plant by three years. SSAB’s climate goals were approved by the Science Based Targets initiative during the fourth quarter.
During the fourth quarter of 2020, SSAB announced that it was in discussions with Tata Steel concerning a possible acquisition of the IJmuiden steel mill. After deeper analysis and discussions, it became clear that there were limited possibilities to integrate IJmuiden into the framework of SSAB’s strategies. We have carefully evaluated Tata Steel IJmuiden and have concluded that an acquisition would be difficult for technical reasons. We cannot be sufficiently certain that we could implement our industrial plan with the preferred technical solutions as quickly as we would wish. We cannot align Tata Steel Ijmuiden with our sustainability strategy in the way desired. Furthermore, the synergies that we saw in the transaction would not fully justify the costs required for transformation. This means that overall, the transaction would not meet our financial expectations. Discussions with Tata Steel have therefore concluded.
Invitation to SSAB’s year-end report 2020 briefing
SSAB invites you to a presentation of the year-end report 2020 at 9.30am CET on Friday, January 29, 2021. The briefing will take place by conference call that will also be webcast on SSAB’s website.
The year-end report 2020 will be presented by SSAB’s President and CEO Martin Lindqvist, and CFO Håkan Folin. The briefing will be held in English.