While SZG provides attractive leverage to the improving European strip steel market, we remain concerned by headwinds from leading oil and gas end market exposure and take a more cautious view than management on the speed of recovery. Although earnings should grow in Q4, FCF remains negative, further impairing SZG''s once best-in-class balance sheet. Q4 guidance conservative with upside driven by property sale gain While SZG''s revised FY20 EBT guidance ostensibly implied an upgrade vs prior (though still modestly lower than consensus), disclosure on the earnings call that guidance incorporates a EUR ~50m property sale gain implies underlying operations have disappointed. Management has a track record of guiding conservatively with hopes to subsequently beat, and we think Q4 is no exception. On our updated estimates, we forecast FY20 EBT up +22% YoY vs guidance stable. Strip Steel benefitting from market tailwinds, autos recovery Beating many industry peers, SZG saw Q3 Strip Steel shipments surge +38% QoQ, and with order intake back at pre-COVID levels and lead times extending we have confidence SZG should see deliveries remain robust into Q1. SZG''s generally shorter-term contract structure than peers should drive a strong sequential margin recovery starting in Q4, though we note guidance for Q4 EBT close to break-even is not yet particularly compelling. Even with demand recovering, SZG retains an idled blast furnace, preferring instead to insource semis from JV HKM, providing optionality into 2021 and/or a sign of caution should the recent restocking cycle begin to fade. Oil and gas remains a meaningful drag Poor demand from oil and gas customers remains a significant drag on SZG''s plate, Mannesmann and EuroPipe businesses, and we have a slightly more cautious outlook for 2021 than SZG management as industry capex is likely to remain depressed. Interestingly, SZG has a more optimistic outlook for line pipe over plate and for the US over Europe....