Luxembourg, August 1,
2024 - ArcelorMittal (referred to as
“ArcelorMittal” or the “Company” or the "Group") (MT (New York,
Amsterdam, Paris, Luxembourg), MTS (Madrid)), the world’s leading
integrated steel and mining company, today announced results1 for
the three-month and six-month periods ended June 30, 2024.
2Q 2024 key highlights:
Health and safety focus: Protecting employee
health and safety remains the overarching priority of the Company;
the Company-wide audit of safety by dss+ remains on track for
completion by 3Q 2024 and will support our pathway to zero serious
injuries and fatalities; LTIF2 rate of 0.57 in 2Q 2024 and 0.59 in
1H 2024
Resilient operating results: Benefits of
diversification were apparent in the second quarter, with higher
steel shipments (+3.2% vs. 1Q 2024) and lower costs helping to
offset the impact of lower steel prices; 2Q 2024 EBITDA3 of $1.9bn
(vs. $2.0bn in 1Q 2024) with EBITDA/t of $134/t in 2Q 2024 ($140/t
in 1H 2024) continuing to reflect structural improvements
Net income impacted by non-cash items: $0.5bn
in 2Q 2024 vs. $0.9bn in 1Q 2024 largely explained by the impact of
the non-cash mark-to-market on Vallourec shares10
Financial strength: Net debt of $5.2bn at the
end of the quarter (gross debt of $11.1bn and cash and cash
equivalents of $5.9bn as of June 30, 2024) remains a strong
foundation for continued growth investment and capital returns
Cash flow being reinvested for growth and shareholder
returns: over the past 12 months, the Company has
generated investable cash flow18 of $2.6bn with $1.5bn invested on
strategic growth projects and $1.8bn returned to ArcelorMittal
shareholders
Key developments towards strategic
objectives:
Organic growth: As expected the Vega CMC
(Brazil) project is ramping up and the 1GW renewables project in
India has begun commissioning. Further projects nearing completion
include: Calvert EAF (US), Serra Azul (Brazil), electrical steel
(France) and capacity expansion in Liberia. Strategic growth
projects are estimated to add $1.8 billion to the Company's EBITDA
potential by the end of 20265
Asset portfolio: The Sustainable Solutions
segment is making progress towards the targeted doubling of EBITDA
in the next 5 years. The Company has acquired Italpannelli’s
Italian and Spanish businesses, building on ArcelorMittal’s
exposure to insulation panels for low carbon emissions buildings.
Together with Vallourec (which will be reported within India and JV
segment), these acquisitions are estimated to add a further $0.2bn
to EBITDA potential in 2025
Consistent shareholder returns: In addition to
its growing base dividend ($0.50/sh in 2024, of which the first
$0.25/sh installment was paid in June 2024), the Company will
continue to return a minimum 50% of post-dividend FCF to
shareholders through its share buyback programs. The Company
repurchased 1.5% of its outstanding shares during 2Q 2024 (4.2%
during the 1H 2024)11 bringing the total reduction in fully diluted
share count to 36% since September 20206
Outlook
Company believes current market conditions are
unsustainable: China’s excess production relative to
demand is resulting in very low domestic steel spreads and
aggressive exports; steel prices in both Europe and US are below
the marginal cost. The Company expects apparent demand to be higher
in 2H’24 vs. 2H’23 (which was impacted by destocking particularly
in Europe). As absolute inventory levels remain low, particularly
in Europe, the Company remains optimistic that restocking activity
will occur once real demand begins to recover
Disciplined capex investment: Capex in 2024
continues to be expected within the range of $4.5bn-$5.0bn range,
including $1.4-1.5bn on our strategic growth projects4,9. A
capital-efficient decarbonization strategy is essential to
achieving appropriate returns on investment. ArcelorMittal
continues to optimize its decarbonization pathway, with the
objective of achieving its targets within the established
budget
Positive free cash flow outlook in 2024 and
beyond: The Company expects the $1.6bn investment in
working capital in 1H’24 to reverse by year end, supporting the
outlook for free cash flow generation. The completion of the
Company’s strategic growth projects is expected to support
structurally higher EBITDA and investable cash flow in the coming
periods
Financial highlights (on the basis of
IFRS1):
|
(USDm) unless otherwise shown |
2Q 24 |
1Q 24 |
2Q 23 |
1H 24 |
1H 23 |
|
Sales |
16,249 |
16,282 |
18,606 |
32,531 |
37,107 |
|
Operating income |
1,046 |
1,072 |
1,925 |
2,118 |
3,117 |
|
Net income attributable to equity holders of the parent |
504 |
938 |
1,860 |
1,442 |
2,956 |
|
Basic earnings per common share (US$) |
0.63 |
1.16 |
2.21 |
1.80 |
3.47 |
|
|
|
|
|
|
|
|
Operating income/tonne (US$/t) |
75 |
80 |
136 |
77 |
109 |
|
EBITDA3 |
1,862 |
1,956 |
2,998 |
3,818 |
5,138 |
|
EBITDA /tonne (US$/t) |
134 |
145 |
211 |
140 |
179 |
|
|
|
|
|
|
|
|
Crude steel production (Mt) |
14.7 |
14.4 |
14.7 |
29.1 |
29.2 |
|
Steel shipments (Mt) |
13.9 |
13.5 |
14.2 |
27.3 |
28.7 |
|
Total Group iron ore production (Mt) |
9.5 |
10.2 |
10.5 |
19.7 |
21.3 |
|
Iron ore production (Mt) (AMMC and Liberia only) |
5.9 |
6.5 |
6.4 |
12.4 |
13.1 |
|
Iron ore shipment (Mt) (AMMC and Liberia only) |
6.2 |
6.3 |
6.6 |
12.5 |
14.0 |
|
|
|
|
|
|
|
|
Weighted average common shares outstanding (in millions) |
794 |
809 |
842 |
802 |
851 |
Commenting, Aditya Mittal, ArcelorMittal
Chief Executive Officer, said:
“The Company continued to make good progress in the first half
of the year. Starting with safety, the comprehensive dss+ audit of
all matters safety related is nearing completion. There has been
excellent engagement at all levels across the Group and no doubt
the learnings and recommendations will be instrumental in helping
us achieve our safety goals.
“Our pipeline of attractive strategic growth projects, which
combined with recent acquisitions, have the estimated potential to
increase EBITDA by $2.0 billion, are starting to come on-line. The
Vega CMC is ramping up and the 1GW renewables project in India has
now started commissioning, with several other projects due to
complete this year.
“Demand continues to grow for our XCarb recycled and renewably
produced steels, which are currently shining brightly on the Eiffel
Tower and Arc de Triomphe in the form of the Olympic “Spectacular”
rings and Paralympic “Agitos”. As important as our low carbon steel
products, are our climate solutions. We have recently launched the
new HyMatch® brand for hydrogen transport pipelines supporting the
implementation of hydrogen infrastructure globally and the recent
acquisition of Italpannelli’s Italian and Spanish businesses,
builds our exposure to the attractive insulation panels market for
low carbon emissions buildings. We also continue to progress our
decarbonization agenda, with groundbreaking having taken place on
the new 1.1 million tonne electric arc furnace in Gijon.
“Financially, performance in the second quarter was broadly
similar to the first, reflecting the continued subdued economic
sentiment. Inventories are at a low level which will support
apparent steel demand growth ex-China of between 2.5% and 3% this
year. The Company enjoys a healthy balance sheet, from which it can
continue to invest for growth and market share and consistently
return cash to shareholders."
Safety and sustainable development
Health and Safety focus:
Protecting employee health and safety remains the overarching
priority of the Company. LTIF rate of 0.57 in 2Q 2024 (vs 0.61 in
1Q 2024 and 0.73 in 2Q 2023).
The Company-wide safety audit by dss+, which encompasses the
three pillars of fatality prevention standards, process risk
management, and policies, processes and governance, is progressing
on schedule. The groundwork was completed at the end of July and
included:
- 155 onsite audits of the fatality
prevention standards covering the company’s three main occupational
risks (injured by a machine that was not properly isolated or
turned off, crushed by a vehicle or moving machine, and falling
from height);
- Process safety risk management
assessments of 14 of our highest priority countries and assets
(including JVs);
- ~300 interviews with the
ArcelorMittal Board, senior leadership, health and safety personnel
and unions;
- ~100 focus groups on practical
perception of safety issues (>70 took place onsite in 12
plants);
- Over 100 observations of key
meetings to understand how health and safety is discussed at all
levels e.g. the Board Sustainability Committee to production
meetings; and
- Review of policies and other
documentation to understand how effectively health and safety is
governed and communicated.
Key recommendations will be published following completion of
the audit. There is a clear engagement and full support from
leadership across the organization to make ArcelorMittal a better,
safer Company.
Own personnel and contractors – Lost
Time Injury Frequency rate
|
|
2Q 24 |
1Q 24 |
2Q 23 |
1H 24 |
1H 23 |
|
North America |
0.31 |
0.00 |
0.25 |
0.14 |
0.18 |
|
Brazil |
0.15 |
0.08 |
0.30 |
0.13 |
0.32 |
|
Europe |
1.06 |
1.28 |
1.51 |
1.14 |
1.38 |
|
Sustainable Solutions |
1.09 |
0.89 |
1.10 |
0.98 |
0.95 |
|
Mining |
0.15 |
0.16 |
0.00 |
0.16 |
0.11 |
|
Others |
0.47 |
0.76 |
0.60 |
0.60 |
0.62 |
|
Total |
0.57 |
0.61 |
0.73 |
0.59 |
0.70 |
Sustainable development
highlights14:
- The Company is progressing the decarbonization projects
globally to ensure we maximize our competitive advantage and
deliver an acceptable return on investment.
- The construction of the 1.1Mt EAF at the Gijón plant has
started, representing the first in ArcelorMittal Europe’s
decarbonization program. The €0.2 billion investment in
state-of-the-art technology will enable ArcelorMittal to produce
high added value rails and wire rod (expected EBITDA $50
million)
- The 1GW India renewables project has begun commissioning. Power
evacuation (substations and transmission lines) are largely
complete. The $0.7 billion capex project with an expected $0.1
billion of EBITDA (including equity share of the net income benefit
to AMNS India JV) will provide cost competitive and stable supply
of round-the-clock renewable power for AMNS India, representing
over 20% of AMNS India’s Hazira plants energy requirements.
- ArcelorMittal continues to engage with Country Governments to
access low carbon energy for ArcelorMittal group at competitive
prices for its DRI EAF projects. In Belgium, we have signed a
letter of intent for low-carbon electricity supply which follows a
similar agreement in France with EDF.
- ArcelorMittal has been expanding its low carbon solutions
offering to capture demand for low carbon steel, which builds on
solutions already available across the group, such as low carbon
emissions buildings (e.g. Steligence brand) and renewables (e.g.
Magnelis® coating for solar).
- ArcelorMittal launched the HyMatch® steel brand for hydrogen
transport pipelines supporting the implementation of hydrogen
infrastructure globally
- The recent acquisition of Italpannelli’s Italian and Spanish
businesses, with a capacity of 13 million m2 of sandwich panels a
year, builds on ArcelorMittal’s exposure to insulation panels for
low carbon emissions buildings
- ArcelorMittal continues to increase its XCarb® recycled and
renewably produced (RRP) low-carbon emissions product range and
sales. XCarb® products are on track to double sales in 2024 (vs.
2023). In addition, ArcelorMittal Europe Flat Products has the
capability to produce 80% of its industry steel grades and
dimensions in XCarb® RRP, with the potential to expand.
Analysis of results for the six months ended June 30,
2024 versus results for the six months ended June 30,
2023
Sales for 1H 2024 decreased by -12.3% to $32.5 billion as
compared with $37.1 billion for 1H 2023, primarily due to -7.5%
lower average steel selling prices and a -4.6% decline in steel
shipments. On a scope adjusted basis (i.e. excluding Kazakhstan
operations that were sold on December 7, 2023 and ArcelorMittal
Pecem consolidated on March 9, 20237), 1H 2024 steel shipments were
-1.1% lower as compared to 1H 2023.
Operating income for 1H 2024 of $2.1 billion was -32.1% lower as
compared to $3.1 billion in 1H 2023 primarily driven by negative
price-cost effect (predominantly on account of -7.5% lower average
steel selling prices) and lower steel shipment volumes.
EBITDA in 1H 2024 decreased by -25.7% to $3,818 million as
compared to $5,138 million in 1H 2023, primarily due to a negative
price-cost effect, lower steel shipments including impacts of an
illegal blockade at our Mexican operations (that resulted in loss
of volume in 2Q 2024 of ~0.4Mt and negatively impacted EBITDA by
approximately ~$0.1 billion).
ArcelorMittal’s net income for 1H 2024 declined to $1,442
million as compared to $2,956 million for 1H 2023, largely due to
lower operating results, lower income from equity method
investments and higher foreign exchange loss and financing costs
(largely due to the US$ appreciation against most currencies)
partially offset by lower net interest expense. ArcelorMittal’s
basic earnings per common share for 1H 2024 was $1.80, as compared
to $3.47 for 1H 2023.
Net cash provided by operating activities in 1H 2024 was $1.0
billion as compared to $3.0 billion in 1H 2023. Free cash outflow
during 1H 2024 of $1.3 billion8 includes a working capital
investment of $1.6 billion and capex of $2.2 billion (including
strategic growth projects9). The free cash outflow together with
ongoing shareholder returns of $1.1 billion during the period, led
to an increase in net debt to $5.2 billion on June 30, 2024, as
compared to $2.9 billion on December 31, 2023. Gross debt of $11.1
billion on June 30, 2024, as compared to $10.7 billion on December
31, 2023.
Analysis of results for 2Q 2024 versus 1Q
2024
Sales in 2Q 2024 were stable at $16.2 billion as compared to
$16.3 billion in 1Q 2024.
Operating income of $1.0 billion in 2Q 2024 was -2.4% lower as
compared 1Q 2024 largely reflecting the impacts of an illegal
blockade at our Mexican operations offset in part by higher steel
shipments (+3.2%).
EBITDA in 2Q 2024 decreased by -4.8% to $1,862 million as
compared to $1,956 million in 1Q 2024, primarily due to weaker
results in North America (impacted by an illegal blockade in
Mexico), India and JVs segment (planned maintenance in India) and
Mining segment (lower iron ore prices) offset in part by an
improvement in the Europe segment primarily due to lower costs.
ArcelorMittal recorded net income in 2Q 2024 of $504 million,
lower as compared to $938 million in 1Q 2024 largely due to
non-cash mark-to-market on Vallourec shares10 (gain of $181 million
as of March 31, 2024, was then reversed by $173 million as of June
30, 2024).
ArcelorMittal's basic earnings per common share for 2Q 2024 was
$0.63 as compared to $1.16 in 1Q 2024.
Free cash flow during 2Q 2024 of $0.1 billion was impacted by
capex of $1.0 billion, including strategic growth projects4, offset
in part by a working capital release of $0.1 billion. This together
with ongoing share buy backs ($0.3 billion) and dividends to
ArcelorMittal shareholders ($0.2 billion) led to an increase in net
debt to $5.2 billion on June 30, 2024, as compared to $4.8 billion
on March 31, 2024. Due to the seasonality of working capital needs,
the Company believes that a year-on-year comparison of net debt is
more useful. Over the past 12 months net debt increased by $0.7
billion as the Company funded strategic growth capex of $1.5
billion and returned $1.8 billion to ArcelorMittal shareholders
(dividends $0.4 billion and share buy backs $1.4 billion).
Analysis of
operations3
North America
|
(USDm) unless otherwise shown |
2Q 24 |
1Q 24 |
2Q 23 |
1H 24 |
1H 23 |
|
Sales |
3,162 |
3,347 |
3,498 |
6,509 |
6,848 |
|
Operating income |
338 |
585 |
662 |
923 |
1,117 |
|
Depreciation |
(129) |
(120) |
(127) |
(249) |
(253) |
|
EBITDA |
467 |
705 |
789 |
1,172 |
1,370 |
|
Crude steel production (Kt) |
1,823 |
2,180 |
2,244 |
4,003 |
4,420 |
|
- Flat shipments (Kt) |
1,865 |
2,245 |
2,046 |
4,110 |
4,254 |
|
- Long shipments (Kt) |
719 |
666 |
667 |
1,385 |
1,358 |
|
Steel shipments* (Kt) |
2,468 |
2,796 |
2,604 |
5,264 |
5,447 |
|
Average steel selling price (US$/t) |
1,040 |
1,042 |
1,116 |
1,041 |
1,052 |
* North America steel shipments include slabs
sourced by the segment from Group companies (mainly the Brazil
segment) and sold to the Calvert JV (eliminated in the Group
consolidation). These shipments can vary between periods due to
slab sourcing mix and timing of vessels: 2Q'24 476kt; 1Q'24 481kt,
2Q'23 360kt; 1H'24 957kt and 1H'23 834kt.
Sales in 2Q 2024 decreased by -5.5% to $3.2
billion, as compared to $3.3 billion in 1Q 2024 primarily on
account of a -11.7% decrease in steel shipments, primarily flat
products, impacted by an illegal blockade at our Mexican
operations.
Since May 24, 2024, ArcelorMittal Mexico steel
plant in Lazaro Cardenas and mine located in the Tenencia La Mira
in the state of Michoacán was impacted by an illegal blockade by a
group of workers due to their dissatisfaction with the distribution
of profit sharing by the Company. In order to maintain safety
within and outside the plant, the Company halted the blast furnace
and mining operations, and has undertaken mitigation actions to
continue to serve customers. The impact is an estimated loss of
~0.4Mt volume and $0.1 billion EBITDA in 2Q 2024. On July 19, 2024,
ArcelorMittal Mexico announced that it had reached a settlement
with unions with an agreement to end the strike leading to a
gradual restart of production/shipments.
Operating income in 2Q 2024 decreased by -42.1%
to $338 million as compared to $585 million in 1Q 2024, primarily
due to the impact of the illegal blockade (as discussed above) and
a negative price-cost impact.
EBITDA in 2Q 2024 of $467 million was -33.7%
lower as compared to $705 million in 1Q 2024.
Brazil7
|
(USDm) unless otherwise shown |
2Q 24 |
1Q 24 |
2Q 23 |
1H 24 |
1H 23 |
|
Sales |
3,243 |
3,051 |
3,826 |
6,294 |
6,894 |
|
Operating income |
325 |
302 |
553 |
627 |
876 |
|
Depreciation |
(88) |
(94) |
(105) |
(182) |
(177) |
|
EBITDA |
413 |
396 |
658 |
809 |
1,053 |
|
Crude steel production (Kt) |
3,607 |
3,564 |
3,732 |
7,171 |
6,784 |
|
- Flat shipments (Kt) |
2,441 |
2,137 |
2,363 |
4,578 |
4,103 |
|
- Long shipments (Kt) |
1,215 |
1,061 |
1,234 |
2,276 |
2,451 |
|
Steel shipments (Kt) |
3,637 |
3,180 |
3,583 |
6,817 |
6,520 |
|
Average steel selling price (US$/t) |
826 |
886 |
1,001 |
854 |
991 |
Sales in 2Q 2024 increased by +6.3% to $3.2 billion as compared
to $3.1 billion in 1Q 2024, primarily due to a +14.4% increase in
steel shipments (including a seasonal recovery in demand in Brazil
and shipments timing delays from 1Q 2024) offset in part by a -6.7%
decline in average steel selling prices.
Operating income in 2Q 2024 of $325 million was +7.7% higher as
compared to $302 million in 1Q 2024, due to higher shipments offset
in part by a negative price-cost effect (lower selling prices more
than offsetting lower costs).
EBITDA in 2Q 2024 increased by +4.3% to $413 million as compared
to $396 million in 1Q 2024.
Europe
|
(USDm) unless otherwise shown |
2Q 24 |
1Q 24 |
2Q 23 |
1H 24 |
1H 23 |
|
Sales |
7,822 |
7,847 |
8,686 |
15,669 |
17,766 |
|
Operating income |
194 |
69 |
436 |
263 |
744 |
|
Depreciation |
(268) |
(274) |
(270) |
(542) |
(533) |
|
EBITDA |
462 |
343 |
706 |
805 |
1,277 |
|
Crude steel production (Kt) |
8,041 |
7,604 |
6,827 |
15,645 |
14,507 |
|
- Flat shipments (Kt) |
5,206 |
5,302 |
5,049 |
10,508 |
10,517 |
|
- Long shipments (Kt) |
2,204 |
1,939 |
2,068 |
4,143 |
4,216 |
|
Steel shipments (Kt) |
7,407 |
7,236 |
7,114 |
14,643 |
14,727 |
|
Average steel selling price (US$/t) |
929 |
945 |
1,048 |
937 |
1,026 |
Sales in 2Q 2024 were stable at $7.8 billion, as compared to 1Q
2024, primarily due to improved steel shipment volumes
(particularly long products which improved +13.7%) offset by a
-1.7% decline in average steel selling prices.
Operating income in 2Q 2024 was $194 million as compared to $69
million in 1Q 2024 primarily due to a positive price-cost effect
(lower costs more than offsetting lower average steel selling
prices) and higher steel shipments.
EBITDA in 2Q 2024 of $462 million increased by +34.8% as
compared to $343 million in 1Q 2024.
India and JVs
Income from associates, joint-ventures and other
investments (excluding impairments and exceptional items, if any)
for 2Q 2024 was $181 million as compared to $242 million in 1Q
2024, primarily due to lower contributions from AMNS India and
Calvert investees.
ArcelorMittal has investments in various joint
ventures and associate entities globally. The Company considers
Calvert (50% equity interest) and AMNS India (60% equity interest)
joint ventures to be of particular strategic importance, warranting
more detailed disclosures to improve the understanding of their
operational performance and value to the Company.
AMNS India
|
(USDm) unless otherwise shown |
2Q 24 |
1Q 24 |
2Q 23 |
1H 24 |
1H 23 |
|
Production (Kt) (100% basis) |
1,867 |
1,984 |
1,792 |
3,851 |
3,557 |
|
Shipments (Kt) (100% basis) |
1,892 |
2,016 |
1,679 |
3,908 |
3,509 |
|
Sales (100% basis) |
1,580 |
1,815 |
1,606 |
3,395 |
3,318 |
|
EBITDA (100% basis) |
237 |
312 |
563 |
549 |
904 |
Sales in 2Q 2024 declined by -12.9% to $1.6
billion as compared to $1.8 billion in 1Q 2024, primarily due to
planned maintenance impacts on production and shipments (-6.2%) as
well as lower average steel selling prices.
EBITDA during 2Q 2024 declined to $237 million
as compared to $312 million in 1Q 2024, driven by a negative
price-cost effect and lower shipments.
Calvert12
|
(USDm) unless otherwise shown |
2Q 24 |
1Q 24 |
2Q 23 |
1H 24 |
1H 23 |
|
Production (Kt) (100% basis) |
1,202 |
1,216 |
1,198 |
2,418 |
2,424 |
|
Shipments (Kt) (100% basis) |
1,145 |
1,131 |
1,157 |
2,276 |
2,327 |
|
Sales (100% basis) |
1,244 |
1,236 |
1,328 |
2,480 |
2,551 |
|
EBITDA (100% basis) |
166 |
188 |
142 |
354 |
179 |
Production, shipments and sales in 2Q 2024 were stable as
compared to 1Q 2024.
Calvert EBITDA during 2Q 2024 of $166 million declined -11.6% as
compared to $188 million in 1Q 2024, primarily due to negative
price-cost effect.
Sustainable
Solutions13
|
(USDm) unless otherwise shown |
2Q 24 |
1Q 24 |
2Q 23 |
1H 24 |
1H 23 |
|
Sales |
2,891 |
2,889 |
3,218 |
5,780 |
6,330 |
|
Operating income |
55 |
26 |
120 |
81 |
189 |
|
Depreciation |
(40) |
(44) |
(39) |
(84) |
(70) |
|
EBITDA |
95 |
70 |
159 |
165 |
259 |
Sales in 2Q 2024 were stable at $2.9 billion as compared to 1Q
2024.
Operating income in 2Q 2024 was higher at $55 million as
compared to $26 million in 1Q 2024, driven by seasonally improved
Construction business and improved margins in the Projects
business.
EBITDA in 2Q 2024 of $95 million was +36.6% higher as compared
to $70 million in 1Q 2024.
The 1GW India renewables project in Andhra Pradesh, Southern
India has begun commissioning. The $0.7 billion strategic project
will combine solar and wind power and be supported by Greenko’s
hydro pumped storage project, which helps to overcome the
intermittent nature of wind and solar power generation. AMNS India
also entered into a 25 year off-take agreement with ArcelorMittal
to purchase 250MW of renewable electricity annually from the
project with >20% of the electricity requirement at AMNS India’s
Hazira plant coming from renewable sources. In total, the project
is expected to add $0.1 billion to Group EBITDA following full
ramp-up.
On May 31, 2024, ArcelorMittal Construction completed the
acquisition of Italpannelli Srl in Italy and Italpannelli Iberica
in Spain (following the earlier purchase of Italpannelli Germany in
March 2023). The acquisition adds considerable strategic value to
ArcelorMittal Construction’s business, which now has 45 production
and commercial sites across Europe and 5 in other continents,
including c. 20 panel lines and c. 80 profile lines. Italpannelli
doubles ArcelorMittal Construction’s panel capacity, adds new
product capabilities, provides access to new markets, and
significant synergies.
Mining
|
(USDm) unless otherwise shown |
2Q 24 |
1Q 24 |
2Q 23 |
1H 24 |
1H 23 |
|
Sales |
641 |
729 |
680 |
1,370 |
1,584 |
|
Operating income |
150 |
246 |
225 |
396 |
599 |
|
Depreciation |
(66) |
(65) |
(56) |
(131) |
(112) |
|
EBITDA |
216 |
311 |
281 |
527 |
711 |
|
Iron ore production (Mt) |
5.9 |
6.5 |
6.4 |
12.4 |
13.1 |
|
Iron ore shipment (Mt) |
6.2 |
6.3 |
6.6 |
12.5 |
14.0 |
Note: Mining segment comprises iron ore operations of
ArcelorMittal Mines Canada (AMMC) and ArcelorMittal Liberia.
Sales in 2Q 2024 declined by -12.1% to $641 million as compared
to $729 million in 1Q 2024 primarily due to lower iron ore prices
(-9.5%).
Iron ore production was impacted by wildfires in the Port
Cartier region, which disrupted rail operations at ArcelorMittal
Mines Canada during the last few weeks of June, as well as
maintenance.
Operating income in 2Q 2024 was -39.2% lower at $150 million as
compared to $246 million in 1Q 2024 driven by lower iron ore
reference prices and lower AMMC shipment volumes.
EBITDA in 2Q 2024 of $216 million was -30.4% lower as compared
to $311 million in 1Q 2024.
Other recent developments
-
On June 17, 2024, ArcelorMittal announced the closing of its
offering of US$500 million aggregate principal amount of 6.00%
notes due 17 June 2034 and US$500 million aggregate principal
amount of 6.35% notes due 17 June 2054.
-
On May 29, 2024, ArcelorMittal signed an agreement for a $5.5
billion revolving credit facility, replacing the $5.5 billion
revolving credit facility dated December 19, 2018, which was
amended on April 27, 2021. The agreement incorporates a single
tranche maturing on May 29, 2029, with two one-year extension
options. As of June 30, 2024, the $5.5 billion revolving credit
facility was fully available. Liquidity at the end of June 30, 2024
of $11.4 billion consisted of cash and cash equivalents of $5.9
billion and $5.5 billion of available credit lines.
Outlook
Overall economic sentiment remains subdued with customers
maintaining a “wait and see” approach with no restocking yet
apparent.
Nevertheless, given the low inventory environment (particularly
Europe) as soon as real demand begins to gradually improve,
apparent demand is expected to rebound.
Despite continued headwinds to real demand,
World ex-China apparent steel consumption ("ASC") in 2024 is
expected to grow by +2.5% to +3.0% as compared to 2023 (versus
previous guidance of +3.0% to +4.0%).
ArcelorMittal expects the following demand
dynamics by key region:
- In the US, although real demand growth is expected to remain
lackluster due to the lagged impact of higher interest rates, the
destocking that impacted apparent demand in 2023 is not expected to
continue in 2024. As a result, apparent steel consumption of flat
products is expected to grow by +1.0% to +3.0% (compared to
previous expectation of +1.5% to +3.5%);
- In Europe, whilst the Company assumes a decline in real demand,
both automotive and machinery, the destocking that impacted
apparent demand in 2023 is not expected to continue in 2024. As a
result, apparent demand for flat products is expected to grow only
marginally within the range of +0.0% to +2.0% (compared to previous
expectation of growth within a range of +2.0% to +4.0%);
- In Brazil, the Company continues to expect a gradual recovery
in real steel consumption to support an ASC growth within a range
of +1.0% to +3.0% (compared to previous expectation of +0.5% to
+2.5% growth);
- In India, the Company continues to expect another strong year
with apparent steel consumption growth within the range of +7.5% to
+9.5% (compared to previous expectation of +6.5% to +8.5%);
- In China, economic growth is expected to weaken. The continued
weakness in real estate, and the lack of a significant stimulus
means limited offsetting demand support from infrastructure
spending. As a result, steel consumption is expected to be
relatively stable in the range of -1.0% to +1.0% (compared to
previous guidance of +0.0% to +2.0%).
The Company remains positive on the medium/long-term steel
demand outlook and believes that it is optimally positioned to
execute its strategy of growth with capital returns.
Capex in 2024 is expected within the $4.5-$5.0 billion range (of
which $1.4-$1.5 billion is expected as strategic growth capex).
ArcelorMittal Condensed Consolidated Statements of
Financial Position1
|
In millions of U.S. dollars |
Jun 30, 2024 |
Mar 31, 2024 |
Dec 31, 2023 |
|
ASSETS |
|
|
|
|
Cash and cash equivalents |
5,903 |
5,437 |
7,783 |
|
Trade accounts receivable and other |
4,186 |
4,403 |
3,661 |
|
Inventories |
17,690 |
18,372 |
18,759 |
|
Prepaid expenses and other current assets |
3,229 |
3,462 |
3,037 |
|
Total Current Assets |
31,008 |
31,674 |
33,240 |
|
|
|
|
|
|
Goodwill and intangible assets |
4,947 |
5,016 |
5,102 |
|
Property, plant and equipment |
33,142 |
33,477 |
33,656 |
|
Investments in associates and joint ventures |
10,168 |
10,141 |
10,078 |
|
Deferred tax assets |
9,563 |
9,521 |
9,469 |
|
Other assets |
2,019 |
2,118 |
2,372 |
|
Total Assets |
90,847 |
91,947 |
93,917 |
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
Short-term debt and current portion of long-term debt |
2,357 |
1,873 |
2,312 |
|
Trade accounts payable and other |
12,493 |
12,674 |
13,605 |
|
Accrued expenses and other current liabilities |
5,456 |
5,890 |
5,852 |
|
Total Current Liabilities |
20,306 |
20,437 |
21,769 |
|
|
|
|
|
|
Long-term debt, net of current portion |
8,770 |
8,348 |
8,369 |
|
Deferred tax liabilities |
2,270 |
2,330 |
2,432 |
|
Other long-term liabilities |
5,202 |
5,175 |
5,279 |
|
Total Liabilities |
36,548 |
36,290 |
37,849 |
|
|
|
|
|
|
Equity attributable to the equity holders of the parent |
52,204 |
53,591 |
53,961 |
|
Non-controlling interests |
2,095 |
2,066 |
2,107 |
|
Total Equity |
54,299 |
55,657 |
56,068 |
|
Total Liabilities and Shareholders’ Equity |
90,847 |
91,947 |
93,917 |
ArcelorMittal Condensed Consolidated Statements of
Operations1
|
|
Three months ended |
Six months ended |
|
In millions of U.S. dollars unless otherwise
shown |
Jun 30, 2024 |
Mar 31, 2024 |
Jun 30, 2023 |
Jun 30, 2024 |
Jun 30, 2023 |
|
Sales |
16,249 |
16,282 |
18,606 |
32,531 |
37,107 |
| Depreciation (B) |
(635) |
(642) |
(680) |
(1,277) |
(1,310) |
|
Operating income (A) |
1,046 |
1,072 |
1,925 |
2,118 |
3,117 |
| Operating margin
% |
6.4% |
6.6% |
10.3% |
6.5% |
8.4% |
| |
|
|
|
|
|
| Income from associates, joint ventures and other investments
(excluding impairments) (C) |
181 |
242 |
393 |
423 |
711 |
|
Net interest expense |
(7) |
(63) |
(47) |
(70) |
(111) |
| Foreign exchange and
other net financing loss |
(260) |
(261) |
(133) |
(521) |
(250) |
| Non-cash
mark-to-market (loss)/gain until acquisition of 28.4% Vallourec
shares10 |
(173) |
181 |
— |
8 |
— |
| Income before
taxes and non-controlling interests |
787 |
1,171 |
2,138 |
1,958 |
3,467 |
| Current tax
expense |
(179) |
(321) |
(316) |
(500) |
(598) |
| Deferred tax
(expense)/benefit |
(96) |
124 |
85 |
28 |
178 |
| Income tax expense
(net) |
(275) |
(197) |
(231) |
(472) |
(420) |
| Income
including non-controlling interests |
512 |
974 |
1,907 |
1,486 |
3,047 |
| Non-controlling
interests income |
(8) |
(36) |
(47) |
(44) |
(91) |
| Net income
attributable to equity holders of the parent |
504 |
938 |
1,860 |
1,442 |
2,956 |
|
|
|
|
|
|
|
| Basic
earnings per common share ($) |
0.63 |
1.16 |
2.21 |
1.80 |
3.47 |
| Diluted
earnings per common share ($) |
0.63 |
1.16 |
2.20 |
1.79 |
3.46 |
| |
|
|
|
|
|
|
Weighted average common shares outstanding (in millions) |
794 |
809 |
842 |
802 |
851 |
| Diluted
weighted average common shares outstanding (in millions) |
797 |
811 |
845 |
804 |
853 |
|
|
|
|
|
|
|
| OTHER
INFORMATION |
|
|
|
|
|
| EBITDA
(A-B+C) |
1,862 |
1,956 |
2,998 |
3,818 |
5,138 |
| EBITDA Margin % |
11.5% |
12.0% |
16.1% |
11.7% |
13.8% |
|
|
|
|
|
|
|
| Total Group iron ore
production (Mt) |
9.5 |
10.2 |
10.5 |
19.7 |
21.3 |
| Crude steel production
(Mt) |
14.7 |
14.4 |
14.7 |
29.1 |
29.2 |
| Steel shipments
(Mt) |
13.9 |
13.5 |
14.2 |
27.3 |
28.7 |
ArcelorMittal Condensed Consolidated Statements of Cash
flows1
|
|
Three months ended |
Six months ended |
|
In millions of U.S. dollars |
Jun 30, 2024 |
Mar 31, 2024 |
Jun 30, 2023 |
Jun 30, 2024 |
Jun 30, 2023 |
| Operating
activities: |
|
|
|
|
|
| Income
attributable to equity holders of the parent |
504 |
938 |
1,860 |
1,442 |
2,956 |
| Adjustments to
reconcile net income to net cash provided by operations: |
|
|
|
|
|
| Non-controlling
interests income |
8 |
36 |
47 |
44 |
91 |
| Depreciation |
635 |
642 |
680 |
1,277 |
1,310 |
| Income from associates,
joint ventures and other investments |
(181) |
(242) |
(393) |
(423) |
(711) |
|
Deferred tax expenses/(benefit) |
96 |
(124) |
(85) |
(28) |
(178) |
| Change in working
capital |
84 |
(1,719) |
178 |
(1,635) |
(597) |
| Other operating
activities (net) |
(73) |
369 |
(200) |
296 |
165 |
| Net cash
provided (used) by operating activities (A) |
1,073 |
(100) |
2,087 |
973 |
3,036 |
| Investing
activities: |
|
|
|
|
|
| Purchase of property,
plant and equipment and intangibles (B) |
(985) |
(1,236) |
(1,060) |
(2,221) |
(1,998) |
| Other investing
activities (net)16 |
(57) |
274 |
45 |
217 |
(1,886) |
| Net cash used
in investing activities |
(1,042) |
(962) |
(1,015) |
(2,004) |
(3,884) |
| Financing
activities: |
|
|
|
|
|
| Net proceeds
(payments) relating to payable to banks and long-term debt |
1,007 |
(334) |
(1,011) |
673 |
(1,401) |
| Dividends paid to
ArcelorMittal shareholders |
(200) |
— |
(185) |
(200) |
(185) |
| Dividends paid to
minorities (C) |
(7) |
(77) |
(12) |
(84) |
(65) |
| Share buyback |
(293) |
(597) |
(227) |
(890) |
(704) |
|
Lease payments and other financing activities (net) |
7 |
(52) |
(55) |
(45) |
(484) |
| Net cash
provided (used) by financing activities |
514 |
(1,060) |
(1,490) |
(546) |
(2,839) |
| Net increase (decrease) in cash and cash equivalents |
545 |
(2,122) |
(418) |
(1,577) |
(3,687) |
|
Effect of exchange rate changes on cash |
(81) |
(190) |
64 |
(271) |
212 |
| Change in cash
and cash equivalents |
464 |
(2,312) |
(354) |
(1,848) |
(3,475) |
|
|
|
|
|
|
|
| Free cash flow
(A+B+C) |
81 |
(1,413) |
1,015 |
(1,332) |
973 |
Appendix 1: Capital
expenditures1
|
(USDm) |
2Q 24 |
1Q 24 |
2Q 23 |
1H 24 |
1H 23 |
|
North America |
100 |
111 |
122 |
211 |
237 |
|
Brazil |
211 |
203 |
215 |
414 |
382 |
|
Europe |
275 |
443 |
312 |
718 |
633 |
|
Sustainable Solutions |
80 |
160 |
84 |
240 |
139 |
|
Mining |
262 |
235 |
204 |
497 |
372 |
|
Others |
57 |
84 |
123 |
141 |
235 |
|
Total |
985 |
1,236 |
1,060 |
2,221 |
1,998 |
Appendix 1a: Strategic growth projects completed during
the last 4 quarters
|
Segment |
Site / unit |
Capacity / details |
Impact on EBITDA * |
Key date |
|
Brazil |
ArcelorMittal Vega Do Sul |
Increase hot dipped / cold rolled coil capacity and construction of
a new 700kt continuous annealing line (CAL) and continuous
galvanizing line (CGL) combiline |
$0.1bn |
2Q 2024 (first coil) |
|
Sustainable Solutions |
Andhra Pradesh (India) |
Renewable energy project: 1GW of nominal capacity solar and wind
power |
$0.1bn (incl.our share of net income in AMNS India) |
Commissioning has begun |
Appendix 1b: Ongoing strategic growth
projects17
|
Segment |
Site / unit |
Capacity / details |
Impact on EBITDA * |
Key date / forecast completion |
|
Brazil |
Serra Azul mine |
Facilities to produce 4.5Mt/year DRI quality pellet feed by
exploiting compact itabirite iron ore |
$100m |
2H 2024 |
|
Brazil |
Barra Mansa |
Increase capacity of HAV bars and sections by 0.4Mt/pa |
$70m |
1H 202515 |
|
Brazil |
Monlevade |
Increase in liquid steel capacity by 1.0Mt/year; Sinter feed
capacity of 2.25Mt/year |
$200m |
2H 2026 |
|
Europe |
Mardyck (France) |
New Electrical Steels. Facilities to produce 170kt NGO Electrical
Steels (of which 145kt for Auto applications) consisting of
annealing and pickling line (APL), reversing mill (REV) and
annealing and varnishing (ACL) lines |
$100m |
2H 2024 (ACL) |
|
Europe |
Gijon (Spain) |
Construction of a new 1.1Mt EAF to enable the production of low
carbon-emissions steel for the long products sector, specifically
rails and wire rod |
$50m |
1H 2026 |
|
North America |
Las Truchas mine (Mexico) |
Revamping project with 1Mtpa pellet feed capacity increase (to
2.3Mt/year) with DRI concentrate grade capability |
$50m |
2H 2025 |
|
AMNS Calvert (US) |
Calvert** |
New 1.5Mt EAF and caster |
$85m (our 50% share of net income) |
2H 2024 |
|
AMNS India |
Hazira** |
Debottlenecking existing assets; AMNS India medium-term plans are
to expand and grow initially to ~15Mt by early 2026 in Hazira
(Phase 1A); ongoing downstream projects; Phase 1B to 20Mt planned;
plans for expansion to 24Mt (including 1.5Mt long capacity) under
preparation; additional greenfield opportunities under
development |
$0.4bn (our 60% share of net income for Phase 1A and ongoing
downstream projects) |
2H 2026 |
|
Mining |
Liberia mine |
Phase 2 premium produce expansion: Increase production capacity to
15Mt/year |
$350m |
4Q 2024 (first concentrate) |
* Estimate of additional EBITDA based on full capacity and
assuming prices/spreads generally in line with the averages of the
2015-2020 period; ** AMNS India and Calvert are share of net
income
Appendix 2: Debt repayment schedule as of June 30,
2024
|
(USD billion) |
2024 |
2025 |
2026 |
2027 |
≥2028 |
Total |
|
Bonds |
0.3 |
1.0 |
1.0 |
1.2 |
3.7 |
7.2 |
|
Commercial paper |
0.9 |
— |
— |
— |
— |
0.9 |
| Other
loans |
0.4 |
0.8 |
0.3 |
0.7 |
0.8 |
3.0 |
|
Total gross debt |
1.6 |
1.8 |
1.3 |
1.9 |
4.5 |
11.1 |
As of June 30, 2024, the average debt maturity is 6.9 years.
Appendix 3: Reconciliation of gross debt to net
debt
|
(USD million) |
Jun 30, 2024 |
Mar 31, 2024 |
Dec 31, 2023 |
|
Gross debt |
11,127 |
10,221 |
10,681 |
|
Less: Cash and cash equivalents |
(5,903) |
(5,437) |
(7,783) |
|
Net debt |
5,224 |
4,784 |
2,898 |
|
|
|
|
|
|
Net debt / LTM EBITDA |
0.7 |
0.6 |
0.3 |
Appendix 4: Terms and
definitions
Unless indicated otherwise, or the context otherwise requires,
references in this earnings release to the following terms have the
meanings set out next to them below:
Apparent steel consumption: calculated as the
sum of production plus imports minus exports.Average steel
selling prices: calculated as steel sales divided by steel
shipments.Cash and cash equivalents: represents
cash and cash equivalents, restricted cash and short-term
investments.Capex: represents the purchase of
property, plant and equipment and intangibles.Crude steel
production: steel in the first solid state after melting,
suitable for further processing or for
sale.Depreciation: refers to amortization and
depreciation.EPS: refers to basic or diluted
earnings per share. EBITDA: defined as operating
result plus depreciation, impairment items and exceptional items
and result from associates, joint ventures and other investments
(excluding impairments and exceptional items if
any).EBITDA/tonne: calculated as EBITDA divided by
total steel shipments.Exceptional items: income /
(charges) relate to transactions that are significant, infrequent
or unusual and are not representative of the normal course of
business of the period.Free cash flow (FCF):
refers to net cash provided by operating activities less capex less
dividends paid to minority shareholders.Foreign exchange
and other net financing income(loss): include foreign
currency exchange impact, bank fees, interest on pensions,
impairment of financial assets, revaluation of derivative
instruments and other charges that cannot be directly linked to
operating results.Gross debt: long-term debt and
short-term debt.Impairment items: refers to
impairment charges net of reversals. Income from
associates, joint ventures and other investments: refers
to income from associates, joint ventures and other investments
(excluding impairments and exceptional items if
any).Investable cash flow: refers to cashflow from
operating activities less maintenance capex.Iron ore
reference prices: refers to iron ore prices for 62% Fe CFR
China.Kt: refers to thousand metric
tonnes.Liquidity: cash and cash equivalents plus
available credit lines excluding back-up lines for the commercial
paper program.LTIF: refers to lost time injury
frequency rate equals lost time injuries per 1,000,000 worked
hours, based on own personnel and contractors.Maintenance
capex: refers to recurring expenditures required for a
company to continue operating and sustain its
growth.Mt: refers to million metric
tonnes.Net debt: long-term debt and short-term
debt less cash and cash equivalents.Net debt/LTM
EBITDA: refers to Net debt divided by EBITDA for the last
twelve months.Net interest expense: includes
interest expense less interest income.On-going
projects: refer to projects for which construction has
begun (excluding various projects that are under development), even
if such projects have been placed on hold pending improved
operating conditions.Operating results: refers to
operating income(loss).Operating segments: North
America segment includes the Flat, Long and Tubular operations of
Canada and Mexico; and also includes all Mexico mines. The Brazil
segment includes the Flat, Long and Tubular operations of Brazil
and its neighboring countries including Argentina, Costa Rica,
Venezuela; and also includes Andrade and Serra Azul captive iron
ore mines. The Europe segment includes the Flat, Long and includes
Bosnia and Herzegovina captive iron ore mines; Sustainable
Solutions division includes Downstream Solutions and Tubular
operations of the European business. The Others segment includes
the Flat, Long and Tubular operations of Kazakhstan (till December
7, 2023), Ukraine and South Africa; and also includes the captive
iron ore mines in Ukraine and iron ore and coal mines in Kazakhstan
(till December 7, 2023). Mining segment includes iron ore
operations of ArcelorMittal Mines Canada and ArcelorMittal Liberia.
Own iron ore production: includes total of all
finished production of fines, concentrate, pellets and lumps and
includes share of production.Price-cost effect: a
lack of correlation or a lag in the corollary relationship between
raw material and steel prices, which can either have a positive
(i.e. increased spread between steel prices and raw material costs)
or negative effect (i.e. a squeeze or decreased spread between
steel prices and raw material costs). Shipments:
information at segment and Group level eliminates intra-segment
shipments (which are primarily between Flat/Long plants and Tubular
plants) and inter-segment shipments respectively. Shipments of
Downstream Solutions are excluded.Working capital change
(working capital investment / release): Movement of change
in working capital - trade accounts receivable plus inventories
less trade and other accounts payable.
Footnotes
- The financial information in this
press release has been prepared consistently with International
Financial Reporting Standards (“IFRS”) as issued by the
International Accounting Standards Board (“IASB”) and as adopted by
the European Union. The interim financial information included in
this announcement has also been prepared in accordance with IFRS
applicable to interim periods, however this announcement does not
contain sufficient information to constitute an interim financial
report as defined in International Accounting Standard 34, “Interim
Financial Reporting”. The numbers in this press release have not
been audited. The financial information and certain other
information presented in a number of tables in this press release
have been rounded to the nearest whole number or the nearest
decimal. Therefore, the sum of the numbers in a column may not
conform exactly to the total figure given for that column. In
addition, certain percentages presented in the tables in this press
release reflect calculations based upon the underlying information
prior to rounding and, accordingly, may not conform exactly to the
percentages that would be derived if the relevant calculations were
based upon the rounded numbers. Segment information presented in
this press release is prior to inter-segment eliminations and
certain adjustments made to operating results of the segments to
reflect corporate costs, income from non-steel operations (e.g.
logistics and shipping services) and the elimination of stock
margins between the segments.
- LTIF refers to lost time injury frequency rate equals lost time
injuries per 1,000,000 worked hours, based on own personnel and
contractors.
- As announced with ArcelorMittal’s
fourth quarter 2023 financial results, the Company has amended its
presentation of reportable segments and EBITDA. The changes,
applied as from January 1, 2024, are as follows: EBITDA is defined
as operating result plus depreciation, impairment items and
exceptional items and result from associates, joint ventures and
other investments (excluding impairments and exceptional items if
any); The NAFTA segment has been renamed "North America", a core
growth region for the Company; A new ‘Sustainable Solutions’
segment is composed of a number of high-growth, niche, capital
light businesses, playing an important role in supporting climate
action (including renewables, special projects and construction
business). Previously reported within the Europe segment, this is a
growth vector of the Company and represents businesses employing
over 12,000 people at more than 260 commercial and production sites
across 60+ countries. Following the sale of the Company’s
operations in Kazakhstan, the remaining parts of the former ‘ACIS’
segment have been assigned to ‘Others’; there are no changes to the
‘Brazil’ and ‘Mining’ segments. ‘India and JVs’ is now presented
and the share of net income of AMNS India and AMNS Calvert as well
as the other associates, joint ventures and other investments is
included in EBITDA. India is a high growth vector of the Company,
with our assets well-positioned to grow with the domestic market.
These changes have been applied as from January 1, 2024, and the
comparative periods of 2023 shown herein have been retrospectively
recast.
- 2Q 2024 includes decarbonization
capex of $0.1 billion and strategic growth capex of $0.3 billion.
Strategic projects capex in 2Q 2024 primarily include investments
for the Liberia expansion project (first concentrate), Mardyck
electrical steels, Serra Azul and the renewables energy project in
India.
- Estimate of additional contribution
to EBITDA, based on assumptions once ramped up to capacity and
assuming prices/spreads generally in line with the averages of the
2015-2020 period. Out of the total $1.8 billion EBITDA potential,
it is considered that $0.3 billion has been achieved to date from
the completion of the Mexico HSM project on an observed run-rate
basis.
- September 2020 was the inception
date of the ongoing share buyback programs.
- On March 9, 2023, ArcelorMittal
announced that following receipt of customary regulatory approvals
it had completed the acquisition of Companhia Siderúrgica do Pecém
(‘CSP’) in Brazil for an enterprise value of approximately $2.2
billion.
- 1H 2024 net cash provided by
operating activities of $973 million (including working capital
investment of $1,635 million) less capex of $2,221 million and
dividends to minority shareholders of $84 million.
- 1H 2024 includes decarbonization
capex of $0.1 billion and strategic growth capex of $0.7 billion.
Strategic projects capex in 1H 2024 primarily include investments
for the Liberia expansion project (first concentrate), the
renewables energy project in India and Mardyck electrical
steels.
- Vallourec share price increased to
€17.20 as of March 31, 2024, as compared to €14.64 contractually
agreed at the signing of the share price agreement for 65.2 million
shares on March 12, 2024 generating a non-cash mark-to-market gain
of $181 million as of March 31, 2024 and causing a non-cash
mark-to-market loss of $173 million in 2Q 2024 as the Vallourec
share price decreased to €14.76 as of June 30, 2024. In accordance
with IFRS, the Company recognized this net gain as the final fair
value of the investment is unknown until transaction closing.
- The Company has repurchased 34.7
million shares during 1H 2024; totalling 60.9 million shares from
the current 85 million share buyback program.
- Production:
Including all production of the hot strip mill including processing
of slabs on a hire work basis for ArcelorMittal Group entities and
third parties, including stainless steel slabs. Shipments:
including shipments of finished products processed on a hire work
basis for ArcelorMittal Group entities and third parties, including
stainless steel products. EBITDA of Calvert presented here on a
100% basis as a stand-alone business and in accordance with the
Company's policy, applying the weighted average method of
accounting for inventory.
- Sustainable Solutions is focused on
growing niche businesses providing vital added-value support to
growing sustainable related applications from a low-carbon, capital
light asset base. These businesses include: a) Construction
solutions: Product offerings include sandwich panels (e.g.
insulation), profiles, turnkey pre-fabrication solutions, etc., to
assist building in smarter ways and reduce the carbon footprint of
buildings; b) Projects: Product range includes plates, pipes &
tubes, wire ropes, reinforced steels, providing high-quality &
sustainable steel solutions for energy projects and supporting
offshore wind, energy transition and onshore construction; c)
Industeel: EAF based capacity: High quality steel grades designed
to meet demanding customer specifications (e.g. XCarb® for wind
turbines); Supplying wide range of industries; energy, chemicals,
mechanical engineering, machinery, infrastructure, defence &
security; d) Renewables: investments in renewable energy projects;
e) Metallics: investment and development of the Company’s scrap
recycling and collection capabilities; f) Distribution &
service centers: European services processor including slitting,
cut-to-length, multi blanking, and press blanking and operating
through an extensive network. Sustainable Solutions segment is
making progress towards the targeted doubling of EBITDA in the next
5 years expected to be achieved through organic levers and targeted
M&A with different businesses growing at different rates.
- XCarb® is designed to bring together
all of ArcelorMittal’s reduced, low and zero-carbon products and
steelmaking activities, as well as wider initiatives and green
innovation projects, into a single effort focused on achieving
demonstrable progress towards carbon neutral steel. Alongside the
new XCarb® brand, we have launched three XCarb® initiatives: the
XCarb® innovation fund, XCarb® green steel certificates and XCarb®
recycled and renewably produced for products made via the Electric
Arc Furnace route using scrap. The Company is offering green steel
using a system of certificates (XCarb® green certificates). These
are issued by an independent auditor to certify tonnes of CO2
savings achieved through the Company’s investment in
decarbonization technologies in Europe. Net-zero equivalence is
determined by assigning CO2 savings certificates equivalent to CO2
per tonne of steel produced in 2018 as baseline. The certificates
relate to the tonnes of CO2 saved in total, as a direct result of
the decarbonization projects being implemented across a number of
its European sites.
- Barra Mansa (Brazil)
strategic capex project is now expected to be completed in 1H 2025
(revised from previous 2H 2024 timeframe)
- The Company sold the remaining 4.23%
stake in Erdemir in 1Q 2024, generating total proceeds of $0.2
billion.
- Other projects under
development include: ArcelorMittal Texas: Plans under development
to double capacity and add CCS capability; Calvert (US): Option to
add a second 1.5Mt EAF at lower capex intensity; Electrical steels
US (Alabama): 150kt NGO electrical steels for automotive;
Government support received; engineering studies underway; Liberia
further expansion to 30Mt; and India further expansion: Hazira to
20Mt and Greenfield on the east coast of India.
- Investable cash flow is defined as
cashflow from operating activities less maintenance capex. From
June 30, 2023, to June 30, 2024, cashflow provided by operating
activities totalled $5.6 billion. Total capex during this period
was $4.8 billion of which maintenance capex was $3.0 billion,
strategic capex of $1.5 billion and decarbonization of $0.3
billion.
Second quarter 2024 earnings analyst
conference callArcelorMittal Management will host a
conference call for members of the investment community to present
and comment on the three-month period ended June 30, 2024 on:
Thursday August 1, 2024, at 9.30am US Eastern time; 14.30pm
London time and 15.30pm CET.
To access via the conference call and ask a question during the
Q&A, please register in advance:
https://register.vevent.com/register/BI9f82767e8da148158be3f4cf77dd0e13
Alternatively, the webcast can be accessed live on the day:
https://edge.media-server.com/mmc/p/4p47v6en
Forward-Looking Statements
This document contains forward-looking information and
statements about ArcelorMittal and its subsidiaries. These
statements include financial projections and estimates and their
underlying assumptions, statements regarding plans, objectives and
expectations with respect to future operations, products and
services, and statements regarding future performance.
Forward-looking statements may be identified by the words
“believe”, “expect”, “anticipate”, “target” or similar expressions.
Although ArcelorMittal’s management believes that the expectations
reflected in such forward-looking statements are reasonable,
investors and holders of ArcelorMittal’s securities are cautioned
that forward-looking information and statements are subject to
numerous risks and uncertainties, many of which are difficult to
predict and generally beyond the control of ArcelorMittal, that
could cause actual results and developments to differ materially
and adversely from those expressed in, or implied or projected by,
the forward-looking information and statements. These risks and
uncertainties include those discussed or identified in the filings
with the Luxembourg Stock Market Authority for the Financial
Markets (Commission de Surveillance du Secteur Financier) and the
United States Securities and Exchange Commission (the “SEC”) made
or to be made by ArcelorMittal, including ArcelorMittal’s latest
Annual Report on Form 20-F on file with the SEC. ArcelorMittal
undertakes no obligation to publicly update its forward-looking
statements, whether as a result of new information, future events,
or otherwise.
Non-GAAP/Alternative Performance
Measures
This press release also includes certain non-GAAP
financial/alternative performance measures. ArcelorMittal presents
EBITDA and EBITDA/tonne, free cash flow (FCF) and ratio of net
debt/LTM EBITDA which are non-GAAP financial/alternative
performance measures, as additional measures to enhance the
understanding of its operating performance. As announced
previously, the definition of EBITDA has been revised to include
income from share of associates, JVs and other investments
(excluding impairments and exceptional items if any, of associates,
JVs and other investments) because the Company believes this
information provides investors with additional information to
understand its results, given the increasing significance of its
joint ventures. ArcelorMittal believes such indicators are relevant
to provide management and investors with additional information.
ArcelorMittal also presents net debt and change in working capital
as additional measures to enhance the understanding of its
financial position, changes to its capital structure and its credit
assessment. Investable cashflow is defined as cash flow after
normative (maintenance) capex, and the Company thus believes that
it represents the cashflow that is available for allocation at
management’s discretion. The Company’s guidance as to additional
EBITDA estimated to be generated from certain projects and with
respect to working capital for the second half of 2024, is based on
the same accounting policies as those applied in the Company’s
financial statements prepared in accordance with IFRS.
ArcelorMittal is unable to reconcile, without unreasonable effort,
such guidance to the most directly comparable IFRS financial
measure, due to the uncertainty and inherent difficulty of
predicting the occurrence and the financial impact of items
impacting comparability. For the same reasons, ArcelorMittal is
unable to address the significance of the unavailable information.
Non-GAAP financial/alternative performance measures should be read
in conjunction with, and not as an alternative to, ArcelorMittal's
financial information prepared in accordance with IFRS. Comparable
IFRS measures and reconciliations of non-GAAP financial/alternative
performance measures are presented herein.
About ArcelorMittal
ArcelorMittal is one of the world's leading steel and mining
companies, with a presence in 60 countries and primary steelmaking
facilities in 15 countries. In 2023, ArcelorMittal had revenues of
$68.3 billion and crude steel production of 58.1 million metric
tonnes, while iron ore production reached 42.0 million metric
tonnes.
Our goal is to help build a better world with smarter steels.
Steels made using innovative processes which use less energy, emit
significantly less carbon and reduce costs. Steels that are
cleaner, stronger and reusable. Steels for electric vehicles and
renewable energy infrastructure that will support societies as they
transform through this century. With steel at our core, our
inventive people and an entrepreneurial culture at heart, we will
support the world in making that change. This is what we believe it
takes to be the steel company of the future.
ArcelorMittal is listed on the stock exchanges of New York (MT),
Amsterdam (MT), Paris (MT), Luxembourg (MT) and on the Spanish
stock exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS).
For more information about ArcelorMittal please visit:
https://corporate.arcelormittal.com/
Enquiries
ArcelorMittal investor relations: +44 207 543 1128; Retail: +44
207 543 1156; SRI: +44 207 543 1156 and Bonds/credit: +33 1 71 92
10 26.
ArcelorMittal corporate communications (e-mail:
press@arcelormittal.com) +44 207 629 7988. Contact: Paul Weigh +44
203 214 2419
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