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1. Company Snapshot

1.a. Company Description

SSAB AB (publ) produces and sells steel products in the United States, Sweden, Finland, Germany, Denmark, and internationally.It operates through five segments: SSAB Special Steels, SSAB Europe, SSAB Americas, Tibnor, and Ruukki Construction.The SSAB Special Steels segment offers quenched and tempered steels, and hot-rolled advanced high-strength steel products.


The SSAB Europe segment provides strip, plate, and tubular products.The SSAB Americas segment offers heavy steel plates.The Tibnor segment distributes a range of steel and non-ferrous metals in the Nordic region and the Baltics.


The Ruukki Construction segment produces and sells building and construction products and services for residential and non-residential construction.The company markets its steel products under the Strenx, Hardox, Docol, GreenCoat, Toolox, Armox, Duroxite, SSAB Boron, SSAB Domex, SSAB Form, SSAB Laser, SSAB Weathering and Cor-Ten, and SSAB Multisteel brands.It serves the heavy transport, construction, automotive, industrial, construction machinery, energy, material handling, and service center industries.


The company has a collaboration agreement with Faurecia S.E. to deliver fossil-free steel for automotive seat structures.SSAB AB (publ) was founded in 1878 and is headquartered in Stockholm, Sweden.

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1.b. Last Insights on SSAB

SSAB AB's recent performance was negatively impacted by tariff uncertainty, leading to production cuts and staffing reductions. The steelmaker's customers have adopted a wait-and-see approach, contributing to weak demand and pricing pressure. Additionally, the company faces intense competition, as evidenced by its recent crackdown on counterfeit goods in India. Furthermore, SSAB's quarterly earnings were affected by chaotic US trade policy, adding to costs and upending supply chains.

1.c. Company Highlights

2. SSAB's Q3 Earnings: Stable Performance Amidst Challenging Market Conditions

SSAB's Q3 revenue came in at just below SEK 23 billion, representing a reduction of SEK 2.7 billion from the previous quarter and SEK 1.4 billion from the previous year's Q3. EBITDA was SEK 2.9 billion, and the operating result was SEK 1.9 billion, with a positive impact from prices, particularly in the Europe division. The company's EPS came in at SEK 1.49, significantly higher than the estimated SEK 0.4773. The net cash position was SEK 10.8 billion, with a stable net gearing of minus 16%.

Publication Date: Oct -27

📋 Highlights
  • Stable Q3 Operating Results: Despite challenging European markets, SSAB's Q3 operating results remained stable with a 22% operating margin in the Special Steel division and a financial result of SEK 1.4 billion.
  • Revenue Decline: Revenue fell to just below SEK 23 billion, a 12% decrease from Q2 (SEK 2.7 billion) and 6% from the prior year’s Q3 (SEK 1.4 billion).
  • Strong Net Cash Position: The company reported a net cash position of SEK 10.8 billion, with net gearing at -16%, reflecting solid liquidity despite lower shipments (1,466 kilotons, down 14% from Q2).
  • Cost Savings and CapEx Progress: Q3 saw SEK 100 million in cost savings (Europe-focused) and 70% of the SEK 2 billion power line CapEx (SEK 700 million paid to date) advanced.

Segment Performance

The Special Steel division's shipments were slightly lower than expected, but prices remained at a good level, with an operating margin of 22% and a financial result of roughly SEK 1.4 billion. SSAB Europe's profitability was pushed down due to a maintenance outage, but prices were maintained slightly better than in Q2. SSAB Americas' shipments were lower, partly due to uncertainties regarding tariffs, but operating results were at an expected level.

Outlook and Guidance

Johnny Sjöström provided the outlook, with a segment approach, expecting Special Steel shipments to be slightly lower due to seasonal effects, with prices remaining the same. However, the company expects lower shipments and prices in SSAB Americas. The transformation projects are progressing according to plan, but planned maintenance in North America and Europe will have a negative impact on Q4 financial performance.

Valuation and Growth Prospects

With a P/E Ratio of 13.12 and an EV/EBITDA of 5.14, the company's valuation appears reasonable. Analysts estimate next year's revenue growth at 4.7%. The company's ROE is 6.58%, and the ROIC is 5.33%, indicating a decent return on equity and invested capital. The dividend yield is 4.38%, making it an attractive option for income-seeking investors.

Trade and Market Dynamics

The European Commission's new quotas may have a positive impact on the utilization of European mills and prices. The company is seeing a stable demand for Special Steel products and is well-positioned in the US plate market. However, demand has decreased due to concerns about the US economy, and the company is cautious about pricing in Q4.

3. NewsRoom

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Taina Kyllönen appointed as eQ’s Chief People and Communications Officer and member of the Management Team

Nov -19

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SSAB earnings top estimates amid "limited" impact from elevated U.S. tariffs

Oct -22

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Steel Producer SSAB Says Direct Tariff Impact Has Been Limited So Far

Oct -22

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Assessing SSAB (OM:SSAB A) Valuation as Momentum Cools After Impressive Five-Year Gains

Sep -09

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European steelmakers warn of pressure on demand and pricing

Jul -31

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Analysis-Out-gunned Europe accepts least-worst US trade deal

Jul -27

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Businesses deliver gloomy results even as markets celebrate Japan trade deal

Jul -23

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Basic Materials Roundup: Market Talk

Jul -23

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (0.96%)

6. Segments

SSAB Europe

Expected Growth: 0.8%

SSAB Europe's 0.8% growth is driven by increasing demand for high-strength steel in the automotive and construction industries, coupled with the segment's focus on premium products and cost savings initiatives. Additionally, the European market's gradual recovery from the pandemic and the segment's strong market position contribute to its growth.

SSAB Special Steels

Expected Growth: 1.2%

SSAB Special Steels' 1.2% growth driven by increasing demand for high-strength steel in automotive and construction industries, coupled with SSAB's focus on premium products and cost savings initiatives. Additionally, the segment benefits from its strong market position and long-term contracts with key customers.

SSAB Americas

Expected Growth: 0.9%

SSAB Americas' 0.9% growth is driven by increasing demand for high-strength steel in the automotive and construction industries, coupled with the company's focus on operational efficiency and cost savings. Additionally, strategic investments in product development and customer relationships have contributed to the segment's growth.

Tibnor

Expected Growth: 1.1%

Tibnor's 1.1% growth is driven by increasing demand for steel products in the Nordic region, supported by infrastructure investments and a recovering construction sector. Additionally, Tibnor's focus on digitalization and e-commerce has improved customer experience, leading to increased sales and market share gains.

Ruukki Construction

Expected Growth: 0.7%

Ruukki Construction's 0.7% growth is driven by increasing demand for sustainable building solutions, strategic partnerships, and expansion into emerging markets. Additionally, investments in digitalization and operational efficiency have improved productivity, contributing to the segment's growth.

7. Detailed Products

High-Strength Steels

SSAB's high-strength steels are designed for demanding applications, offering high strength, good formability, and excellent weldability.

Wear-Resistant Steels

SSAB's wear-resistant steels are designed to withstand harsh environments and heavy wear, offering excellent abrasion resistance and long service life.

Structural Steels

SSAB's structural steels are designed for building and construction applications, offering high strength, good weldability, and excellent durability.

Shipbuilding Steels

SSAB's shipbuilding steels are designed for marine applications, offering high strength, good weldability, and excellent corrosion resistance.

Automotive Steels

SSAB's automotive steels are designed for the automotive industry, offering high strength, good formability, and excellent weldability.

Tubular Products

SSAB's tubular products are designed for oil and gas, construction, and industrial applications, offering high strength, good weldability, and excellent durability.

8. SSAB AB (publ)'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for SSAB AB (publ) is medium due to the availability of alternative materials and products in the market.

Bargaining Power Of Customers

The bargaining power of customers is low due to the company's strong brand reputation and customer loyalty.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the company's dependence on a few key suppliers for raw materials.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the steel industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high due to the competitive nature of the steel industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 11.10%
Debt Cost 9.85%
Equity Weight 88.90%
Equity Cost 9.85%
WACC 9.85%
Leverage 12.49%

11. Quality Control: SSAB AB (publ) passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Rana Gruber

A-Score: 6.9/10

Value: 7.0

Growth: 5.9

Quality: 7.7

Yield: 10.0

Momentum: 3.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
SSAB

A-Score: 6.4/10

Value: 8.5

Growth: 5.8

Quality: 4.4

Yield: 8.8

Momentum: 7.5

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Buzzi Unicem

A-Score: 6.1/10

Value: 6.1

Growth: 7.3

Quality: 7.2

Yield: 3.8

Momentum: 8.0

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
Acerinox

A-Score: 5.9/10

Value: 5.8

Growth: 4.4

Quality: 2.9

Yield: 8.1

Momentum: 7.5

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Vallourec

A-Score: 5.7/10

Value: 7.4

Growth: 3.9

Quality: 6.2

Yield: 5.0

Momentum: 6.5

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Voestalpine

A-Score: 4.8/10

Value: 5.2

Growth: 1.3

Quality: 3.2

Yield: 5.0

Momentum: 9.0

Volatility: 5.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

69.0$

Current Price

69$

Potential

-0.00%

Expected Cash-Flows