Luxembourg, July 28, 2022 - ArcelorMittal
(referred to as “ArcelorMittal” or the “Company”) (MT (New York,
Amsterdam, Paris, Luxembourg), MTS (Madrid)), the world’s leading
integrated steel and mining company, today announced results1,2 for
the three-month and six-month periods ended June 30, 2022.
Key highlights:
- Health and safety performance: Protecting the
health and wellbeing of employees is the Company’s overarching
priority; LTIF rate of 0.67x in 2Q 20223 and 0.68x in 1H 2022
- Steel spreads offsetting lower shipments in 2Q
2022: positive price-cost effect offset a -6.3% sequential
decrease in steel shipments to 14.4Mt primarily due to the lower
shipments in ACIS and Europe
- Operating income: 2Q 2022 operating income of
$4.5bn (vs. $4.4bn in 1Q 2022); 1H 2022 operating income of $8.9bn
(vs. $7.1bn in 1H 2021)
- EBITDA increased to $5.2bn in 2Q 2022, the
fifth successive quarter above the $5bn level; 1H 2022 EBITDA of
$10.2bn is +23.5% higher than the same period of 2021
- Strong net income: $3.9bn in 2Q 2022 (vs.
$4.1bn in 1Q 2022) includes share of JV and associates net income
of $0.6bn (vs. $0.6bn in 1Q 2022); 1H 2022 net income of $8.0bn
(vs. $6.3bn in 1H 2021)
- Enhanced share value: 2Q 2022 basic EPS of
$4.25/sh; last 12 months ROE16 of 34%; book value per share13
increased to $60/sh following the repurchase of 46.8m shares during
the quarter (65.1m in 1H’22)
- Financial strength: Net debt $4.2bn and gross
debt of $8.8bn at the end of June 2022
- Continued strong FCF generation: The Company
generated $1.7bn of free cash flow (FCF) in 2Q 2022 ($2.6bn net
cash provided by operating activities less capex of $0.7bn and
dividends paid to minorities) despite a $1.0bn investment in
working capital on account of higher prices
Strategic update and
outlook:• Proposed acquisition
of CSP in Brazil for $2.2bn, presents opportunity for new low
carbon steelmaking hub:
- Well invested, world-class assets, access to large-scale deep
water port
- Highest quality and low cost 3Mt slab producer in Northeast
Brazil
- Attractive synergies and optionality, including the potential
for highly competitive low-CO2 steel
- Normalized EBITDA per year of $330 million
• Texas HBI plant: a key element of
ArcelorMittal’s 12Mt, low CO2 steel, unmatched high quality NAFTA
franchise including automotive capabilities:
- Acquisition of voestalpine’s world-class Hot Briquetted Iron
(‘HBI’) plant located in Texas now completed; potential to generate
> $130 million EBITDA per year
- A key to decarbonizing NAFTA franchise: will supply high
quality metallics to EAF - Calvert (a cornerstone of ArcelorMittal
NAFTA franchise). Dofasco is transforming to fully DRI-EAF; Mexico
Flat is already DRI-EAF
• Balanced capital
allocation:
- The Company generated $3.2bn of FCF in 1H 2022; $2.3bn was
returned to shareholders (via share buybacks and base dividends)
and $1.0bn was committed to M&A (primarily the Texas HBI
facility)
- Net debt at the end of June 2022 of $4.2bn remained essentially
stable compared to 2021 year end at $4.0bn
• New buyback:
- The Company announces a new buyback program of 60m shares
(~$1.4bn at current share price23) to be completed by the end of
May 2023
Financial highlights (on the basis of
IFRS1,2):
(USDm) unless otherwise shown |
2Q 22 |
1Q 22 |
2Q 21 |
1H 22 |
1H 21 |
Sales |
22,142 |
21,836 |
19,343 |
43,978 |
35,536 |
Operating income |
4,494 |
4,433 |
4,432 |
8,927 |
7,073 |
Net
income attributable to equity holders of the parent |
3,923 |
4,125 |
4,005 |
8,048 |
6,290 |
Basic
earnings per common share (US$) |
4.25 |
4.28 |
3.47 |
8.53 |
5.40 |
|
|
|
|
|
|
Operating income/ tonne (US$/t) |
313 |
289 |
276 |
300 |
217 |
EBITDA |
5,163 |
5,080 |
5,052 |
10,243 |
8,294 |
EBITDA/
tonne (US$/t) |
359 |
331 |
314 |
345 |
255 |
|
|
|
|
|
|
Crude
steel production (Mt) |
14.6 |
16.3 |
17.8 |
30.9 |
35.4 |
Steel
shipments (Mt) |
14.4 |
15.3 |
16.1 |
29.7 |
32.6 |
Total
group iron ore production (Mt) |
12.0 |
12.0 |
11.2 |
24.0 |
24.5 |
Iron
ore production (Mt) (AMMC and Liberia only) |
7.3 |
6.9 |
4.9 |
14.2 |
12.2 |
Iron
ore shipment (Mt) (AMMC and Liberia only) |
7.5 |
6.7 |
4.6 |
14.2 |
12.0 |
|
|
|
|
|
|
Number
of shares outstanding (issued shares less treasury shares)
(millions)22 |
847 |
893 |
1,019 |
847 |
1,019 |
Commenting, Aditya Mittal, ArcelorMittal
Chief Executive Officer, said:"The Company had a strong
first half with market conditions supporting a fifth consecutive
quarter of EBITDA of over $5 billion. This enabled us to progress
against our strategic objectives and continue to transform our
business for the net zero economy. We have completed a number of
targeted acquisitions reflecting the changing energy and metallic
inputs required for low-carbon emissions steelmaking and are also
seeking to strengthen our presence in regions that have the ability
to produce low-cost green hydrogen such as Brazil where we have
today announced the proposed acquisition of one of the country’s
lowest-cost slab producers.
The period, however, was overshadowed by the outbreak of war in
Ukraine, where we have steel and mining operations, bringing
instability and suffering to the country and our 26,000 employees.
Globally the conflict is impacting growth and adding further
inflationary pressure, which is spilling over into weakening of
demand. Despite the more uncertain global macro outlook, our
business is well positioned to effectively manage through the
cycle. The long-term outlook for steel demand also remains
positive, underpinned by the scale of opportunity related to the
energy transition and the continuing growth of developing
economies."
Sustainable development and safety
performance
Health and safety - Own personnel and
contractors lost time injury frequency rateProtecting the
health and wellbeing of employees is the Company’s overarching
priority with ongoing strict adherence to World Health Organization
guidelines (in respect of COVID-19), and specific government
guidelines have been followed and implemented.
Health and safety performance based on own personnel and
contractors lost time injury frequency ("LTIF") rate was 0.67x in
the second quarter of 2022 ("2Q 2022") as compared to 0.69x in the
first quarter of 2022 ("1Q 2022) and 0.89x in the second quarter of
20213 ("2Q 2021"). Health and safety performance in the first six
months of 2022 (“1H 2022”) was 0.68x as compared to 0.83x in the
first six months of 2021 (“1H 2021”).
A concerted effort is underway to improve health and safety
across the group and strengthen our safety culture. We have
completed a comprehensive review of our efforts to eradicate
accidents and fatalities, and have started 2022 with a refreshed
company-wide commitment to put this fully into action.
Corporate oversight of safety has been strengthened, our Global
Health & Safety Council is sharing and promoting best practice,
peer-to-peer mentoring between sites has been introduced, training
(which was reduced as a necessary precaution during COVID-19) has
been strengthened and we are prioritizing support for
underperforming units.
The Company is also tightening guidelines for mandatory
leadership shop floor presence (which similar to training was
reduced as a necessary precaution during COVID-19). All leaders
must now spend a certain minimum time on the shop floor every week
– when they must carry out a safety layered evaluation. While the
Company policy has always specified leaders to regularly spend time
on the shop floor, setting out a higher minimum accepted level for
senior leaders will help reinforce the culture of visible felt
leadership which we know has weakened in some regions as a result
of COVID-19.
Furthermore reporting of proactive KPIs such as potential
serious injury frequency (PSIF) will also be strengthened. Every
segment is required to put in place a quality assessment process
for PSIFs. Understanding clearly why PSIFs happen is vitally
important to tightening processes, improving behaviours and
preventing fatalities. Widespread use of what we call
‘quarantining’ is now in place across all operations where plants
are put into ‘quarantine’ if a seriously unsafe incident takes
place or the plant is deemed to be at risk of a serious incident or
fatality.
A change to the Company’s executive remuneration policy has been
made to reflect this focus21.
Own personnel and contractors -
Frequency rate
Lost time injury frequency rate |
2Q 22 |
1Q 22 |
2Q 21 |
1H 22 |
1H 21 |
NAFTA |
0.28 |
0.19 |
0.17 |
0.28 |
0.43 |
Brazil |
0.14 |
0.10 |
0.26 |
0.12 |
0.22 |
Europe |
0.99 |
1.13 |
1.41 |
1.07 |
1.16 |
ACIS |
0.81 |
0.61 |
1.03 |
0.71 |
1.02 |
Mining |
0.30 |
2.19 |
0.71 |
1.23 |
0.68 |
Total |
0.67 |
0.69 |
0.89 |
0.68 |
0.83 |
Sustainable development highlights –
leading the decarbonization of the steel
industry:Developing standards that will support
the decarbonization of our industry:
- On June 14, 2022, ArcelorMittal published a concept for a
low-carbon emissions steel standard to help incentivize the
decarbonization of steelmaking globally and support the creation of
market demand for physical steel products which would be classified
as lower, and ultimately near-zero, carbon emissions steel.
- Dual scoring system which provides customers with a life cycle
assessment (LCA) value alongside a rating system which measures
progress towards near-zero
- Designed to incentivize the decarbonization of both primary and
secondary steelmaking
- Provides transparency and consistency across steel products for
customers
- Supports the development of markets for low-carbon emissions
steel
The creation of clear definitions for low-carbon emissions
physical steel is an important component of ‘demand pull’ and
‘supply push’ mechanisms that are required to support the steel
industry in its transition to net zero by 2050. Clear definitions
will also help inform targeted policy to support the scale-up and
commercialization of these near-zero technologies.
At the heart of the concept are three core principles:
- It must include a dual score system comprising a LCA value for
finished products (EPD for construction products) alongside a
decarbonisation rating system which categorizes low and near-zero
carbon emissions per tonne of hot rolled steel and rewards
producers as they decarbonize from their starting point.
- It must be designed in such a way that incentivizes the
decarbonisation of all methods of steel production through
technology shifts, rather than simply through increasing scrap
rates using existing technology. This can be done by using a
sliding scale based on the percentage of scrap used in production,
a system which is also at the heart of the ResponsibleSteel™ and
International Energy Agency (‘IEA’) low-carbon emissions steel
models.
- It must include a clearly defined boundary from which carbon
emissions are counted for the decarbonization rating system.
The concept is designed to be complementary to methods for
rewarding virtual low-carbon steel, at least until significant
amounts of physical low-carbon steel are available.
Analysis of results for the six months ended June 30,
2022 versus results for the six months ended June 30,
2021Total steel shipments for 1H 2022 were 29.7 million
metric tonnes (Mt), a decrease of -8.7% as compared to 32.6Mt in 1H
2021. Steel shipments on a scope adjusted basis (i.e. excluding the
shipments of ArcelorMittal Italia12,17, deconsolidated as from
April 14, 2021), decreased by -5.8%. Year on year shipment
declines: ACIS -39.0% (primarily due to Russia/Ukraine conflict)
and NAFTA -3.7%, offset in part by increased shipments in Brazil
+3.6% while Europe remained stable on a scope adjusted basis.
Sales for 1H 2022 increased by 23.8% to $44.0 billion as
compared with $35.5 billion for 1H 2021, primarily due to higher
average steel selling prices (+37.7%), partly offset by lower steel
shipments.
Depreciation of $1.3 billion for 1H 2022 as compared with $1.2
billion in 1H 2021 was broadly stable.
Operating income for 1H 2022 of $8.9 billion was higher as
compared to 1H 2021 of $7.1 billion primarily driven by positive
price-cost effect offset in part by lower iron ore reference prices
(-24.0%).
Income from associates, joint ventures and other investments9
for 1H 2022 was $1.1 billion as compared to $1.0 billion for 1H
2021. 1H 2022 includes higher contribution from European investees
(including $0.1 billion income for Acciaierie d'Italia arising from
recognition of a deferred tax asset in 2Q 2022) offset in part by
lower contributions from AMNS India4 and AMNS Calvert5.1H 2022
includes the annual dividend from Erdemir of $117 million (vs. $89
million received in 1H 2021).
Net interest expense in 1H 2022 of $104 million was lower as
compared to $167 million in 1H 2021 following debt repayments and
liability management.
Foreign exchange and other net financing losses were $323
million for 1H 2022 as compared to losses of $427 million for 1H
2021. Foreign exchange loss for 1H 2022 was $198 million as
compared to a loss of $147 million in 1H 2021. 1H 2021 includes
early bond redemption premium expenses of $130 million.
ArcelorMittal recorded an income tax expense of $1,381 million
for 1H 2022 (including $214 million deferred tax benefit) as
compared to $946 million for 1H 2021 (which included $391 million
deferred tax benefit).
ArcelorMittal’s net income for 1H 2022 was $8,048 million as
compared to $6,290 million for 1H 2021.
ArcelorMittal’s basic earnings per common share for 1H 2022 was
$8.53 basic earnings per common share, as compared to $5.40 basic
earnings per common share for 1H 2021.
Analysis of results for 2Q 2022 versus 1Q 2022 and 2Q
2021Total steel shipments in 2Q 2022 were 14.4Mt, -6.3%
lower as compared with 15.3Mt in 1Q 2022, largely reflecting the
impact of the conflict in Ukraine (ACIS down -41.2%) and weaker
shipments in Europe (-4.4%). Comparing to 2Q 2021, and adjusting
for the change in scope (i.e. excluding the shipments of
ArcelorMittal Italia12,17 deconsolidated as from April 14, 2021),
steel shipments in 2Q 2022 decreased by -9.9%: primarily due to
ACIS -56.5%, Europe -2.6% (scope adjusted), and NAFTA -5.3% offset
in part by Brazil +1.3%.
Sales in 2Q 2022 were $22.1 billion as compared to $21.8 billion
for 1Q 2022 and $19.3 billion for 2Q 2021. As compared to 1Q 2022,
the +1.4% increase in sales was primarily due to higher average
steel selling prices (+7.7%), offset in part by lower steel
shipment volumes. Sales in 2Q 2022 were +14.5% higher as compared
to 2Q 2021 primarily due to higher average steel selling prices
(+30.8%) offset in part by lower iron ore reference prices
(-31.2%).
Depreciation for 2Q 2022 was $669 million as compared to $647
million for 1Q 2022 and higher than $620 million in 2Q 2021.
Depreciation was higher than 2Q 2021 due to changes in the useful
lives estimates for certain assets in Europe and Canada due to
decarbonization projects, partially offset by foreign exchange
benefit.
Operating income for 2Q 2022 was $4.5 billion as compared to
$4.4 billion in 1Q 2022 and 2Q 2021, respectively.
Income from associates, joint ventures and other investments9
for 2Q 2022 was $578 million as compared to $559 million for 1Q
2022 and $590 million in 2Q 2021. 2Q 2022 includes improved
contribution from European investees (including $0.1 billion income
for Acciaierie d'Italia arising from recognition of a deferred tax
asset) offset by a lower contribution from AMNS Calvert5 and AMNS
India4 .1Q 2022 also included the annual dividend from Erdemir in
the amount of $117 million.
Net interest expense in 2Q 2022 was $53 million as compared to
$51 million in 1Q 2022 and lower than $76 million in 2Q 2021,
reflecting savings following the repayment of bonds and liability
management.
Foreign exchange and other net financing losses in 2Q 2022 were
$183 million as compared to losses of $140 million in 1Q 2022 and
$233 million in 2Q 2021. 2Q 2022 includes foreign exchange loss of
$152 million compared to $46 million in 1Q 2022 and $29
million in 2Q 2021. 2Q 2021 included $130 million related to
premium paid for early redemption of bonds.
ArcelorMittal recorded an income tax expense of $826 million
(including deferred tax benefit of $74 million) in 2Q 2022 as
compared to an income tax expense of $555 million (including
deferred tax benefit of $140 million) in 1Q 2022. Income tax
expense was higher in 2Q 2022 as compared to 1Q 2022 due to
different geographical mix of income, with higher profitability in
Brazil and NAFTA regions where tax rates are high. Income tax
expense in 2Q 2021 was $542 million (including deferred tax benefit
of $226 million).
ArcelorMittal recorded net income for 2Q 2022 of $3,923 million
as compared to net income for 1Q 2022 of $4,125 million, as
compared to net income of $4,005 million for 2Q 2021.
ArcelorMittal's basic earnings per common share for 2Q 2022 was
stable at $4.25 as compared to $4.28 in 1Q 2022 and +22.3% higher
than $3.47 in 2Q 2021 due to ongoing share buyback programs.
Analysis of segment operations2,
11
NAFTA
(USDm) unless otherwise shown |
2Q 22 |
1Q 22 |
2Q 21 |
1H 22 |
1H 21 |
Sales |
3,653 |
3,760 |
3,242 |
7,413 |
5,778 |
Operating income |
817 |
1,054 |
675 |
1,871 |
936 |
Depreciation |
(93) |
(93) |
(71) |
(186) |
(142) |
EBITDA |
910 |
1,147 |
746 |
2,057 |
1,078 |
Crude
steel production (kt) |
2,043 |
2,077 |
2,272 |
4,120 |
4,447 |
Steel
shipments * (kt) |
2,453 |
2,456 |
2,590 |
4,909 |
5,101 |
Average
steel selling price (US$/t) |
1,317 |
1,322 |
1,062 |
1,319 |
957 |
* NAFTA steel shipments reported figures include shipments
sourced by NAFTA from Group subsidiaries and sold to the Calvert JV
that are eliminated on consolidation.
NAFTA segment crude steel production decreased by -1.6% to 2.0Mt
in 2Q 2022, as compared to 2.1Mt in 1Q 2022. As compared to 2Q
2021, crude steel production in 2Q 2022 declined -10.1% due to the
impact from labour actions in Mexico and maintenance in Canada.
Steel shipments in 2Q 2022 were stable at 2.5Mt, as compared 1Q
2022, and declined by -5.3% as compared to 2Q 2021.
Sales in 2Q 2022 decreased by -2.8% to $3.7 billion, as compared
to $3.8 billion in 1Q 2022. Sales increased by +12.7% in 2Q 2022 as
compared to $3.2 billion in 2Q 2021 primarily on account of higher
average steel selling prices (+24.1%) offset in part by lower steel
shipment volumes.
Operating income in 2Q 2022 declined -22.5% to $817 million as
compared to $1,054 million in 1Q 2022 and +20.9% higher as compared
to $675 million in 2Q 2021.
EBITDA in 2Q 2022 of $910 million was -20.7% lower as compared
to $1,147 million in 1Q 2022, primarily due to a negative
price-cost effect and impact from the labour action in Mexico ($0.1
billion). EBITDA in 2Q 2022 was higher as compared to $746 million
in 2Q 2021 mainly due to a positive price-cost effect offset in
part by lower steel shipments.
Brazil18
(USDm) unless otherwise shown |
2Q 22 |
1Q 22 |
2Q 21 |
1H 22 |
1H 21 |
Sales |
3,986 |
3,366 |
3,263 |
7,352 |
5,798 |
Operating income |
1,201 |
674 |
1,028 |
1,875 |
1,742 |
Depreciation |
(71) |
(58) |
(56) |
(129) |
(109) |
EBITDA |
1,272 |
732 |
1,084 |
2,004 |
1,851 |
Crude
steel production (kt) |
3,085 |
3,040 |
3,150 |
6,125 |
6,184 |
Steel
shipments (kt) |
3,003 |
3,037 |
2,964 |
6,040 |
5,832 |
Average
steel selling price (US$/t) |
1,234 |
1,039 |
1,038 |
1,136 |
939 |
Brazil segment crude steel production increased by +1.5% to
3.1Mt in 2Q 2022 as compared to 3.0Mt in 1Q 2022 and 3.2Mt in 2Q
2021.
Steel shipments of 3.0Mt in 2Q 2022 were broadly stable as
compared to 1Q 2022, but with higher domestic mix, and +1.3% higher
as compared to 2Q 2021.
Sales in 2Q 2022 increased by +18.4% to $4.0 billion as compared
to $3.4 billion in 1Q 2022, primarily due to +18.7% increase in
average steel selling prices, with prices higher in both domestic
and export markets. Sales in 2Q 2022 were 22.1% higher than $3.3
billion at 2Q 2021 primarily on account of higher average steel
selling prices (+18.9%).
Operating income in 2Q 2022 of $1,201 million was higher as
compared to $674 million in 1Q 2022 and $1,028 million in 2Q
2021.
EBITDA in 2Q 2022 increased by +73.8% to $1,272 million as
compared to $732 million in 1Q 2022, primarily due to a positive
price-cost effect as well as a gain of $0.2 billion related to
Pis/Cofins tax credits from prior years for scrap purchases20.
EBITDA in 2Q 2022 was higher than $1,084 million in 2Q 2021.
Europe
(USDm) unless otherwise shown |
2Q 22 |
1Q 22 |
2Q 21 |
1H 22 |
1H 21 |
Sales |
13,449 |
13,043 |
10,672 |
26,492 |
20,027 |
Operating income |
2,063 |
2,081 |
1,262 |
4,144 |
1,861 |
Depreciation |
(326) |
(326) |
(316) |
(652) |
(615) |
EBITDA |
2,389 |
2,407 |
1,578 |
4,796 |
2,476 |
Crude
steel production (kt) |
8,261 |
8,689 |
9,386 |
16,950 |
19,083 |
Steel
shipments (kt) |
7,967 |
8,334 |
8,293 |
16,301 |
17,306 |
Average
steel selling price (US$/t) |
1,292 |
1,218 |
948 |
1,254 |
878 |
Europe segment crude steel production declined by -4.9% to 8.3Mt
in 2Q 2022 as compared to 8.7Mt in 1Q 2022 and -12.0% lower as
compared to 2Q 2021. Production was down 2Q 2022 as compared to 1Q
2022 on account of a planned reline in Eisenhüttenstadt and an
adjustment of production to lower demand. These same factors and
the additional impact of responses to higher energy prices led to a
-10.6% decline in 2Q 2022 as compared to 2Q 2021 on a scope
adjusted basis17.
Steel shipments declined by -4.4% to 8.0Mt in 2Q 2022 as
compared to 8.3Mt in 1Q 2022 and was -3.9% lower as compared to
8.3Mt in 2Q 2021 primarily due to a slowdown in demand. Adjusted
for the ArcelorMittal Italia deconsolidation, shipments in 2Q 2022
were -2.6% lower as compared to 2Q 2021.
Sales in 2Q 2022 increased by +3.1% to $13.4 billion, as
compared to $13.0 billion in 1Q 2022, primarily due to +6.1% higher
average selling prices. Sales were significantly higher than 2Q
2021, and includes the positive impact of automotive contract price
resets.
Operating income in 2Q 2022 was $2,063 million as compared to
$2,081 million in 1Q 2022 and higher than $1,262 million in 2Q
2021.
EBITDA in 2Q 2022 of $2,389 million decreased by -0.8%, as
compared to $2,407 million in 1Q 2022, with the impacts of lower
steel shipments and a negative translation effect due to USD
appreciation largely being offset by a positive price-cost effect.
EBITDA in 2Q 2022 increased significantly as compared to $1,578
million in 2Q 2021 primarily due to a positive price-cost effect,
including the impact of contract pricing resets, offset in part by
lower steel shipment volumes and a negative translation effect, as
above.
ACIS
(USDm) unless otherwise shown |
2Q 22 |
1Q 22 |
2Q 21 |
1H 22 |
1H 21 |
Sales |
1,484 |
2,086 |
2,768 |
3,570 |
4,896 |
Operating income |
43 |
280 |
923 |
323 |
1,458 |
Depreciation |
(106) |
(105) |
(110) |
(211) |
(220) |
EBITDA |
149 |
385 |
1,033 |
534 |
1,678 |
Crude
steel production (kt) |
1,261 |
2,452 |
2,975 |
3,713 |
5,658 |
Steel
shipments (kt) |
1,218 |
2,071 |
2,801 |
3,289 |
5,396 |
Average
steel selling price (US$/t) |
925 |
855 |
806 |
881 |
729 |
ACIS segment crude steel production in 2Q 2022 was -48.6% lower
at 1.3Mt as compared to 2.5Mt in 1Q 2022 primarily due to the
ongoing reduction of production in Ukraine15 and the impacts from a
2-week labour action and logistic issues in South Africa.
One of the three blast furnaces in Ukraine, blast furnace No.6
which is approximately 20% of Kryvyi Rih capacity, was restarted on
April 11, 2022. Iron ore production has been steadily increased to
~55% capacity in 2Q 2022.
Steel shipments in 2Q 2022 decreased by -41.2% to 1.2Mt as
compared to 2.1Mt in 1Q 2022 and were lower by -56.5% as compared
to 2Q 2021, mainly due to lower production as discussed above.
Sales in 2Q 2022 decreased by -28.9% to $1.5 billion as compared
to $2.1 billion in 1Q 2022, primarily due to lower steel shipments
offset in part by +8.2% higher average steel selling prices.
Operating income in 2Q 2022 was significantly lower at $43
million (impacts discussed above) as compared to $280 million in 1Q
2022 and $923 million in 2Q 2021.
EBITDA of $149 million in 2Q 2022 was -61.3% lower as compared
to $385 million in 1Q 2022, primarily due to lower steel shipments
and higher costs including labour action and logistic issues in
ArcelorMittal South Africa ($0.1 billion). EBITDA in 2Q 2022 was
lower as compared to $1,033 million in 2Q 2021 due to lower steel
shipments (down 1.6Mt).
Mining
(USDm) unless otherwise shown |
2Q 22 |
1Q 22 |
2Q 21 |
1H 22 |
1H 21 |
Sales |
1,005 |
933 |
889 |
1,938 |
2,068 |
Operating income |
463 |
511 |
508 |
974 |
1,287 |
Depreciation |
(64) |
(56) |
(56) |
(120) |
(115) |
EBITDA |
527 |
567 |
564 |
1,094 |
1,402 |
|
|
|
|
|
|
Iron
ore production (Mt) |
7.3 |
6.9 |
4.9 |
14.2 |
12.2 |
Iron
ore shipment (Mt) |
7.5 |
6.7 |
4.6 |
14.2 |
12.0 |
Note: Mining segment comprises iron ore operations of
ArcelorMittal Mines Canada and ArcelorMittal Liberia.
Iron ore production increased in 2Q 2022 by +5.2% to 7.3Mt as
compared to 6.9Mt in 1Q 2022 and was +49.3% higher as compared to
2Q 2021. Higher production in 2Q 2022 was primarily due to recovery
of production in AMMC following seasonally lower production driven
by severe weather conditions in the prior quarter. 2Q 2021
production was significantly lower primarily due to the impact of a
4-week labour action at AMMC6.
Iron ore shipments increased in 2Q 2022 by +12.5% to 7.5Mt as
compared to 6.7Mt in 1Q 2022, primarily driven by improved
shipments at AMMC (following seasonality and associated logistics
issues in 1Q 2022). 2Q 2022 iron ore shipments increased by +66.3%
as compared to 2Q 2021 for the reasons discussed above.
Operating income in 2Q 2022 was $463 million as compared to $511
million in 1Q 2022 and $508 million in 2Q 2021.
EBITDA in 2Q 2022 decreased by -7.0% to $527 million as compared
to $567 million in 1Q 2022, largely reflecting the effect of lower
iron ore reference prices (-2.7%), lower market premia for higher
quality products, and higher freight costs offset in part by higher
shipments (+12.5%). EBITDA in 2Q 2022 was lower as compared to $564
million in 2Q 2021, primarily due to lower iron ore reference
prices (-31.2%), and higher freight costs offset in part by higher
shipments (+66.3%).
Joint venturesArcelorMittal has
investments in various joint ventures and associate entities
globally. The Company considers the 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.
Calvert5
(USDm) unless otherwise shown |
2Q 22 |
1Q 22 |
2Q 21 |
1H 22 |
1H 21 |
Production (100% basis) (kt)* |
1,127 |
1,124 |
1,234 |
2,251 |
2,495 |
Steel shipments (100% basis)
(kt)** |
1,123 |
1,171 |
1,155 |
2,294 |
2,292 |
EBITDA (100% basis)*** |
261 |
327 |
270 |
588 |
424 |
* Production: 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.
Calvert’s hot strip mill ("HSM") production during 2Q 2022
totaled 1.1Mt, stable as compared to 1.1Mt in 1Q 2022 and -8.7%
lower than 1.2Mt in 2Q 2021.
Steel shipments in 2Q 2022 were -4.1% below 1Q 2022 due to
weaker demand.
EBITDA*** during 2Q 2022 of $261 million was -20.2% lower than
$327 million in 1Q 2022 primarily on account of lower pricing with
the falling CRU index prices in February and March 2022 impacting
non-contract volumes of 2Q 2022.
AMNS India4
(USDm) unless otherwise shown |
2Q 22 |
1Q 22 |
2Q 21 |
1H 22 |
1H 21 |
Crude
steel production (100% basis) (kt) |
1,668 |
1,730 |
1,831 |
3,398 |
3,655 |
Steel shipments (100% basis)
(kt) |
1,511 |
1,732 |
1,718 |
3,243 |
3,418 |
EBITDA (100% basis) |
365 |
470 |
607 |
835 |
1,010 |
Crude steel production in 2Q 2022 decreased by -3.6% to 1.7Mt as
compared to 1Q 2022. Crude steel production in 2Q 2022 decreased by
-8.9% as compared to 1.8Mt in 2Q 2021 on account of
maintenance.
Steel shipments in 2Q 2022 declined by -12.8% to 1.5Mt as
compared to 1.7Mt in 1Q 2022 and 2Q 2021 on account of lower
production as well as lower demand.
EBITDA during 2Q 2022 of $365 million was -22.3% lower compared
to $470 million in 1Q 2022, due to lower shipments and lower pellet
contribution following the introduction of the export duty during
the quarter.
Liquidity and Capital
Resources
Net cash provided by operating activities for 2Q 2022 was $2,554
million as compared to $2,034 million in 1Q 2022 and $2,312 million
in 2Q 2021. Net cash provided by operating activities in 2Q 2022
includes a working capital investment of $1,008 million as compared
to investments of $2,047 million in 1Q 2022 and $1,901 million in
2Q 2021. 2Q 2022 working capital requirements were driven by
relatively robust finished steel prices and elevated raw material
prices. Based on current market conditions, the Company expects a
working capital release in 2H 2022.
Capex in 2Q 2022 of $655 million compared with $529 million in
1Q 2022 and $569 million in 2Q 2021. FY 2022 capex guidance has
been reduced by $0.3 billion to $4.2 billion (from $4.5 billion
previous guidance) implying 2H 2022 capex of ~$3.0 billion. The
reduction in capex guidance reflects timing of cash capex, with
slightly delayed capex on strategic projects14 in Brazil and lower
activity including Ukraine.
Net cash used in other investing activities in 2Q 2022 was $886
million (primarily related to the acquisition of an 80%
shareholding in voestalpine’s world-class Hot Briquetted Iron
(‘HBI’) plant located in Corpus Christi, Texas), as compared to $77
million in 1Q 2022 and compared to net cash provided by other
investing activities of $687 million in 2Q 2021 primarily related
to $0.7 billion cash received from the sale of 38.2 million
Cleveland Cliffs shares.
Net cash used in financing activities in 2Q 2022 was $1,651
million as compared to $185 million in 1Q 2022 and $3,780 million
in 2Q 2021. In 2Q 2022, ArcelorMittal signed a Schuldschein loan
agreement for a total amount of €725 million, which was more than
offset by a reduction in commercial paper outstanding, the
repurchase of 46.8 million shares for a total value of $1.5 billion
and total dividends of $498 million ($332 million paid to
ArcelorMittal shareholders and $166 million primarily paid to
minority shareholders of AMMC). In 1Q 2022, net cash used in
financing activities included an inflow from commercial paper
portfolio offset by the reimbursement of an outstanding bond paid
at maturity and repurchase of 18.3 million shares for a total value
of $569 million (of which $65 million was settled in early April
2022). In 2Q 2021, net cash used in financing activities included
an outflow of $2.2 billion primarily related to various bond
repurchases, share buybacks and dividends.
Gross debt increased to $8.8 billion as of June 30, 2022, as
compared to $8.7 billion as of March 31, 2022 and $8.4 billion as
of December 31, 2021. Net debt increased by $1.0 billion to $4.2
billion as of June 30, 2022 as compared to $3.2 billion as of March
31, 2022 and increased by $0.2 billion from $4.0 billion as of
December 31, 2021.
As of June 30, 2022, and March 31, 2022, the Company had
liquidity of $10.1 billion and $11.1 billion, respectively. June
30, 2022 liquidity consisted of cash and cash equivalents of $4.6
billion (March 31, 2022 cash and cash equivalents of $5.6 billion)
and $5.5 billion of available credit lines7. As of June 30, 2022,
the average debt maturity was 5.8 years.
Key recent developments
• On July 28, 2022,
ArcelorMittal announced it has signed an agreement with the
shareholders of Companhia Siderúrgica do Pecém (‘CSP’) to acquire
CSP for an enterprise value of approximately $2.2 billion.
Transaction closing is subject to certain corporate and regulatory
approvals, including CADE (Brazilian antitrust) approval which is
expected by late 2022.
CSP is a world-class operation, producing high-quality slab at a
globally competitive cost. CSP’s state-of-the-art steel facility in
the state of Ceará in northeast Brazil was commissioned in 2016 and
produced its first slabs in June of that year. It operates a three
million tonne capacity blast furnace and has access via conveyors
to the Port of Pecém, a large scale, deep water port located 10
kilometers from the plant. CSP operates within Brazil’s first
Export Processing Zone, and benefits from various tax incentives
including a low corporate income tax rate.
The acquisition brings several strategic benefits to
ArcelorMittal, including the potential to:
- Expand the Company’s position in the high-growth Brazilian
steel industry.
- Capitalise on the significant planned third-party investment to
form a clean electricity and green hydrogen hub in Pecém.
- Add 3 million tonnes of high-quality and cost-competitive slab
capacity, with the potential to supply slab intra-group or to sell
into North and South America.
- Allow for further expansions by the Company, such as the option
to add primary steelmaking capacity (including direct reduced iron)
and rolling and finishing capacity.
- Capture over $50 million of identified synergies, including
SG&A, procurement and process optimization.
The state of Ceará has ambitions to develop a low-cost green
hydrogen hub. The Pecém Green Hydrogen Hub, a partnership between
the Pecém Complex and Linde, a leading global industrial gases and
engineering company, is a large-scale green hydrogen project at the
Port of Pecém which is targeting to produce up to 5GW of renewable
energy and 900 kt/y of green hydrogen in a series of phases. The
first phase, which the partnership currently expects to be
completed over the course of the next five years, targets the
construction of 100-150MW of renewable energy capacity.
- On July 21, 2022, ArcelorMittal and automotive supplier Gestamp
announced that they have successfully trialed the use of low-carbon
emissions steel for use in car parts that will ultimately be used
in the production of vehicles in Europe. The two companies have
signed an agreement to strengthen cooperation on sustainability,
specifically in the production of low-carbon emissions steel parts
and are working closely to ensure that ArcelorMittal’s steel meets
all Gestamp’s technical requirements. Using Usibor® 1500 made with
XCarb® recycled and renewably produced substrate, Gestamp has
successfully trialed the first parts (such as a car’s tunnel, and
seat reinforcements) in press-hardenable steel, which is ultra
high-strength and therefore enables car manufacturers to achieve
excellent weight reductions across the vehicle. XCarb® recycled and
renewably produced is a decarbonized product made with a very high
proportion of recycled steel in an EAF and 100% renewable
electricity. The steel used by Gestamp has a carbon footprint that
is almost 70% lower than the same product made without XCarb®
recycled and renewable steel.
- On July 1, 2022, ArcelorMittal announced that following receipt
of customary regulatory approvals, it had completed the acquisition
of an 80% shareholding in voestalpine’s Hot Briquetted Iron (‘HBI’)
plant located near Corpus Christi, Texas on June 30, 2022. The
acquisition, announced in April 2022, values the Corpus Christi
operations at $1 billion. The state-of-the-art plant is one of the
largest of its kind in the world. It has an annual capacity of two
million tonnes of HBI, which is a premium, compacted form of Direct
Reduced Iron (‘DRI’) developed to overcome issues associated with
shipping and handling DRI. The transaction enhances ArcelorMittal’s
ability to produce the high-quality input materials required for
low-carbon emissions steelmaking, and reinforces the Company’s
position as a world leader in DRI production. In parallel with the
transaction, ArcelorMittal signed a long-term offtake agreement
with voestalpine to supply an annual volume of HBI commensurate to
voestalpine’s equity stake. Any future development of the site will
be 100% owned by ArcelorMittal. The remaining balance of production
will be delivered to third parties, and to ArcelorMittal
facilities, including to AM/NS Calvert in Alabama, upon the
commissioning of its 1.5 million tonne EAF.
- On June 9, 2022, ArcelorMittal announced that it had completed
the US$1 billion share buyback program it had announced on May 5,
2022 under the authorization given by the annual general meeting of
shareholders of May 4, 2022. By market close on 8 June 2022,
ArcelorMittal had repurchased 33,349,597 shares for a total value
of €942,577,580.32 (equivalent to $1 billion at an approximate
average price per share of €28.26. All details are available on the
Company’s website at:
https://corporate.arcelormittal.com/investors/equity-investors/share-buyback-program.
- On June 1, 2022, ArcelorMittal and the government of Spain
signed an agreement in which the government has pledged its
financial support for the decarbonization of the company’s
steelmaking sites in Asturias and in Sestao, in the Basque Country.
The funding, which is part of the government’s Recovery and
Resilience Plan, will support the construction of an electric arc
furnace and DRI plant in Gijón, which are crucial to the cmpany’s
CO2 emissions reduction goals in Europe. The implementation of this
project represents the first step of the company’s decarbonization
journey in Asturias. In order to implement the described
transformation of the site in Asturias, an application has been
submitted under the EU’s CEEAG framework, and is awaiting approval
from the European Commission before the project can
proceed.
- On May 25, 2022, ArcelorMittal launched the XCarb™ Accelerator
Programme to support breakthrough technology start-up and drive
decarbonization. Breakthrough technology start-ups worldwide have
been invited to submit applications to compete for investment from
ArcelorMittal’s XCarb™ Innovation Fund, which aims to invest up to
$100 million annually in such transformative technologies, and
access to ArcelorMittal’s advice and expertise in innovation,
research and development, technology commercialization and business
mentorship.
- On May 24, 2022, ArcelorMittal announced that it had achieved
ResponsibleSteel™ certification for its Asturias Cluster in Spain
and ArcelorMittal Méditerranée in France – the company’s first
sites to be certified in both France and Spain.
- On May 18, 2022, ArcelorMittal announced that 60 million
treasury shares had been cancelled to keep the number of treasury
shares the Company holds within appropriate levels. As a result of
this cancellation, ArcelorMittal has 877,809,772 shares in issue
(compared to 937,809,772 before the cancellation).
Cost improvement plan
In February 2022, the Company had announced a new 3-year $1.5
billion value plan focused on creating value through well-defined
commercial and operational initiatives (excluding the impact of
strategic projects which are followed separately). The plan
includes commercial initiatives, including volume/mix improvements
and operational improvements (primarily in variable costs). The
plan is of strategic importance and aims at protecting the EBITDA
potential of the business from the rising inflationary pressures
that are being faced by the Company. The Company believes that
improving its relative competitive position vis-a-vis its peers can
support sustainably higher profits.
Capital return
Following the completion of its previously announced buyback
plans, the Company announces a new buyback program to purchase a
further 60 million shares (~$1.4 billion at current share price) to
be completed by the end of May 2023. This is the maximum shares
purchasable under current shareholder authorization.
Outlook
Inflationary pressures have escalated during 1H 2022 presenting
significant headwinds to economic activity. The impacts on consumer
and business confidence are leading to a slowdown in real demand,
which has been exacerbated by destocking activity, resulting in
apparent demand below real demand levels and a normalization of
steel spreads.
The potential for energy supply restrictions presents a clear
but, as yet, uncertain risk to economic activity in Europe.
The Company highlights the potential downside risks to the
demand forecasts presented at 1Q 2022 results, particularly to the
forecast demand for Europe, given gas supply risks, and China given
the impact of COVID-related lockdowns. ArcelorMittal is well
positioned to navigate the uncertainties around European gas supply
given its predominantly blast furnace based capacity across
multiple sites in 9 EU countries.
The longer-term fundamental outlook for steel is positive.
China’s focus on decarbonization and removal of VAT-rebates on
steel exports are encouraging; so too are the actions taken by
governments to protect against the threats of unfair trade. And we
know that steel will play a critical and vital role in the
transition to a decarbonized and circular economy – there is no
substitute.
ArcelorMittal Condensed Consolidated Statement of
Financial Position1
In millions of U.S. dollars |
Jun 30,2022 |
Mar 31,2022 |
Dec 31,2021 |
ASSETS |
|
|
|
Cash and cash
equivalents |
4,565 |
5,570 |
4,371 |
Trade accounts
receivable and other |
5,931 |
6,353 |
5,143 |
Inventories |
23,303 |
22,171 |
19,858 |
Prepaid expenses and other current assets |
7,189 |
6,487 |
5,567 |
Total Current Assets |
40,988 |
40,581 |
34,939 |
|
|
|
|
Goodwill and
intangible assets |
4,307 |
4,564 |
4,425 |
Property, plant and
equipment |
29,542 |
30,161 |
30,075 |
Investments in
associates and joint ventures |
10,992 |
10,888 |
10,319 |
Deferred tax
assets |
7,974 |
8,018 |
8,147 |
Other assets10 |
3,223 |
3,287 |
2,607 |
Total
Assets |
97,026 |
97,499 |
90,512 |
|
|
|
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY |
|
|
|
Short-term debt and
current portion of long-term debt |
2,719 |
2,413 |
1,913 |
Trade accounts payable
and other |
16,736 |
16,200 |
15,093 |
Accrued expenses and other current liabilities |
6,514 |
7,491 |
7,161 |
Total Current Liabilities |
25,969 |
26,104 |
24,167 |
|
|
|
|
Long-term debt, net of
current portion |
6,069 |
6,309 |
6,488 |
Deferred tax
liabilities |
2,489 |
2,494 |
2,369 |
Other long-term
liabilities |
6,053 |
6,397 |
6,144 |
Total
Liabilities |
40,580 |
41,304 |
39,168 |
|
|
|
|
Equity attributable to
the equity holders of the parent |
53,992 |
53,798 |
49,106 |
Non-controlling
interests |
2,454 |
2,397 |
2,238 |
Total
Equity |
56,446 |
56,195 |
51,344 |
Total
Liabilities and Shareholders’ Equity |
97,026 |
97,499 |
90,512 |
ArcelorMittal Condensed Consolidated Statement of
Operations1
|
Three months ended |
Six months ended |
In millions of U.S. dollars unless otherwise
shown |
Jun 30, 2022 |
Mar 31, 2022 |
Jun 30, 2021 |
Jun 30, 2022 |
Jun 30, 2021 |
Sales |
22,142 |
21,836 |
19,343 |
43,978 |
35,536 |
Depreciation (B) |
(669) |
(647) |
(620) |
(1,316) |
(1,221) |
Operating income (A) |
4,494 |
4,433 |
4,432 |
8,927 |
7,073 |
Operating margin
% |
20.3 % |
20.3 % |
22.9 % |
20.3 % |
19.9 % |
|
|
|
|
|
|
Income from
associates, joint ventures and other investments |
578 |
559 |
590 |
1,137 |
1,043 |
Net interest
expense |
(53) |
(51) |
(76) |
(104) |
(167) |
Foreign exchange and
other net financing (loss) |
(183) |
(140) |
(233) |
(323) |
(427) |
Income before
taxes and non-controlling interests |
4,836 |
4,801 |
4,713 |
9,637 |
7,522 |
Current tax
expense |
(900) |
(695) |
(768) |
(1,595) |
(1,337) |
Deferred tax
benefit |
74 |
140 |
226 |
214 |
391 |
Income tax expense
(net) |
(826) |
(555) |
(542) |
(1,381) |
(946) |
Income
including non-controlling interests |
4,010 |
4,246 |
4,171 |
8,256 |
6,576 |
Non-controlling
interests income |
(87) |
(121) |
(166) |
(208) |
(286) |
Net income
attributable to equity holders of the parent |
3,923 |
4,125 |
4,005 |
8,048 |
6,290 |
|
|
|
|
|
|
Basic
earnings per common share ($) |
4.25 |
4.28 |
3.47 |
8.53 |
5.40 |
Diluted
earnings per common share ($) |
4.24 |
4.27 |
3.46 |
8.51 |
5.39 |
|
|
|
|
|
|
Weighted average common shares outstanding (in millions) |
924 |
964 |
1,154 |
944 |
1,165 |
Diluted
weighted average common shares outstanding (in millions) |
926 |
966 |
1,157 |
946 |
1,168 |
|
|
|
|
|
|
OTHER
INFORMATION |
|
|
|
|
|
EBITDA (C =
A-B) |
5,163 |
5,080 |
5,052 |
10,243 |
8,294 |
EBITDA Margin % |
23.3 % |
23.3 % |
26.1 % |
23.3 % |
23.3 % |
|
|
|
|
|
|
Total group iron ore
production (Mt) |
12.0 |
12.0 |
11.2 |
24.0 |
24.5 |
Crude steel production
(Mt) |
14.6 |
16.3 |
17.8 |
30.9 |
35.4 |
Steel shipments
(Mt) |
14.4 |
15.3 |
16.1 |
29.7 |
32.6 |
ArcelorMittal Condensed Consolidated Statement of Cash
flows1
|
Three months ended |
Six Months ended |
In millions of U.S. dollars |
Jun 30, 2022 |
Mar 31, 2022 |
Jun 30, 2021 |
Jun 30, 2022 |
Jun 30, 2021 |
Operating
activities: |
|
|
|
|
|
Income
attributable to equity holders of the parent |
3,923 |
4,125 |
4,005 |
8,048 |
6,290 |
Adjustments to
reconcile net income to net cash provided by operations: |
|
|
|
|
|
Non-controlling
interests income |
87 |
121 |
166 |
208 |
286 |
Depreciation |
669 |
647 |
620 |
1,316 |
1,221 |
Income from associates, joint ventures and other investments |
(578) |
(559) |
(590) |
(1,137) |
(1,043) |
Deferred tax
benefit |
(74) |
(140) |
(226) |
(214) |
(391) |
Change in working
capital |
(1,008) |
(2,047) |
(1,901) |
(3,055) |
(3,535) |
Other operating
activities (net) |
(465) |
(113) |
238 |
(578) |
481 |
Net cash
provided by operating activities (A) |
2,554 |
2,034 |
2,312 |
4,588 |
3,309 |
Investing
activities: |
|
|
|
|
|
Purchase of property,
plant and equipment and intangibles (B) |
(655) |
(529) |
(569) |
(1,184) |
(1,188) |
Other investing
activities (net) |
(886) |
(77) |
687 |
(963) |
1,574 |
Net cash (used
in) / provided by investing activities |
(1,541) |
(606) |
118 |
(2,147) |
386 |
Financing
activities: |
|
|
|
|
|
Net proceeds /
(payments) relating to payable to banks and long-term debt |
389 |
379 |
(2,232) |
768 |
(2,856) |
Dividends paid to
ArcelorMittal shareholders |
(332) |
— |
(284) |
(332) |
(284) |
Dividends paid to
minorities (C) |
(166) |
(12) |
(17) |
(178) |
(82) |
Share buyback |
(1,496) |
(504) |
(997) |
(2,000) |
(1,647) |
Lease payments and other financing activities (net) |
(46) |
(48) |
(250) |
(94) |
(299) |
Net cash used
in financing activities |
(1,651) |
(185) |
(3,780) |
(1,836) |
(5,168) |
Net (decrease) /
increase in cash and cash equivalents |
(638) |
1,243 |
(1,350) |
605 |
(1,473) |
Cash and cash
equivalents transferred from assets held for sale |
— |
— |
10 |
— |
3 |
Effect of exchange
rate changes on cash |
(367) |
4 |
47 |
(363) |
(59) |
Change in cash
and cash equivalents |
(1,005) |
1,247 |
(1,293) |
242 |
(1,529) |
|
|
|
|
|
|
Free cash flow
(D=A+B+C) |
1,733 |
1,493 |
1,726 |
3,226 |
2,039 |
Appendix 1: Product shipments by region1
(000'kt) |
2Q 22 |
1Q 22 |
2Q 21 |
1H 22 |
1H 21 |
Flat |
1,800 |
1,811 |
1,896 |
3,611 |
3,718 |
Long |
748 |
657 |
794 |
1,405 |
1,579 |
NAFTA |
2,453 |
2,456 |
2,590 |
4,909 |
5,101 |
Flat |
1,643 |
1,747 |
1,599 |
3,390 |
3,112 |
Long |
1,380 |
1,309 |
1,381 |
2,689 |
2,751 |
Brazil |
3,003 |
3,037 |
2,964 |
6,040 |
5,832 |
Flat |
5,705 |
5,953 |
5,751 |
11,658 |
12,364 |
Long |
2,146 |
2,275 |
2,404 |
4,421 |
4,694 |
Europe |
7,967 |
8,334 |
8,293 |
16,301 |
17,306 |
CIS |
730 |
1,405 |
2,097 |
2,135 |
4,132 |
Africa |
492 |
667 |
703 |
1,159 |
1,263 |
ACIS |
1,218 |
2,071 |
2,801 |
3,289 |
5,396 |
Note: “Others and eliminations” are not presented in the
table
Appendix 2a: Capital expenditures1,2
(USDm) |
2Q 22 |
1Q 22 |
2Q 21 |
1H 22 |
1H 21 |
NAFTA |
115 |
87 |
73 |
202 |
147 |
Brazil |
123 |
90 |
91 |
213 |
139 |
Europe |
211 |
187 |
235 |
398 |
578 |
ACIS |
107 |
90 |
120 |
197 |
214 |
Mining |
92 |
70 |
43 |
162 |
97 |
Total |
655 |
529 |
569 |
1,184 |
1,188 |
Note: “Others” are not presented in the table
Appendix 2b: Capital expenditure
projects14,19
The following tables summarize the Company’s principal growth
and optimization projects involving significant capex.
For projects in which the targeted addition to EBITDA is
indicated, such amount is based on numerous assumptions as to
selling prices and input costs in particular.
Completed projects
Segment |
Site / unit |
Project |
Capacity / details |
Key date / completion |
NAFTA |
ArcelorMittal Mexico |
New hot
strip mill |
Production capacity of 2.5Mt/year |
2021 (a) |
NAFTA |
ArcelorMittal Dofasco (Canada) |
Hot
strip mill modernization |
Replace
existing three end of life coilers with two state of the art
coilers and new runout tables |
1H 2022 (b) |
Ongoing projects
Segment |
Site / unit |
Project |
Capacity / details |
Key date / forecast completion |
NAFTA |
ArcelorMittal Dofasco (Canada) |
#5 CGL
conversion to AluSi® |
Addition of up to 160kt/year Aluminum Silicon (AluSi®) coating
capability to #5 Hot-Dip Galvanizing Line for the production of
Usibor® steels |
2H 2022 (c) |
Brazil |
ArcelorMittal Vega Do Sul |
Expansion project |
Increase hot dipped / cold rolled coil capacity and construction of
a new 700kt continuous annealing line (CAL) and continuous
galvanising line (CGL) combiline |
4Q 2023 (d) |
Mining |
Liberia
mine |
Phase 2
premium product expansion project |
Increase production capacity to 15Mt/year |
4Q 2023/under review (e) |
NAFTA |
Las
Truchas mine (Mexico) |
Revamping and capacity increase to 2.3MT |
Revamping project with 1Mtpa pellet feed capacity increase (to 2.3
Mt/year) with DRI concentrate grade capability |
2H 2023 (f) |
Brazil |
Serra
Azul mine |
4.5Mtpa
direct reduction pellet feed plant |
Facilities to produce 4.5Mt/year DRI quality pellet feed by
exploiting compact itabirite iron ore |
2H 2023 (g) |
Brazil |
Monlevade |
Sinter
plant, blast furnace and melt shop |
Increase in liquid steel capacity by 1.0Mt/year; Sinter feed
capacity of 2.25Mt/year |
2H 2024 (h) |
ACIS |
ArcelorMittal Kryvyi Rih(Ukraine) |
Pellet
Plant |
Facilities to produce 5.0Mtpa pellets, replacing two existing
sinter plants ensuring environmental compliance and improving
productivity |
On hold/ under review (i) |
Brazil |
Barra
Mansa |
Section
mill |
Increase capacity of HAV bars and sections by 0.4Mt/pa |
1Q 2024 (j) |
Others |
Andhra
Pradesh (India) |
Renewable energy project |
975 MW
of nominal capacity solar and wind power |
1H 2024 (k) |
a) On September 28, 2017, ArcelorMittal announced a major $1.0
billion investment program at its Mexican operations, which is
focused on building ArcelorMittal Mexico’s downstream capabilities,
sustaining the competitiveness of its mining operations and
modernizing its existing asset base. The program is designed to
enable ArcelorMittal Mexico to meet the anticipated increased
demand requirements from domestic customers, realize in full
ArcelorMittal Mexico’s production capacity of 5.3Mt and
significantly enhance the proportion of higher added-value products
in its product mix. The main investment is the construction of a
new hot strip mill which will (after full ramp up) enable
ArcelorMittal Mexico to produce c.2.5Mt of flat rolled steel, long
steel c.1.5Mt and the remainder made up of semi-finished slabs.
Coils from the hot strip mill are supplied to domestic, non-auto,
general industry customers. The hot strip mill project commenced
late 4Q 2017, and the first coils were produced at the end of 2021.
Ramp up now underway and on track to reach ca. 60% capacity in
2H’22. Current expected EBITDA benefit in 2022 of ~$0.1 billion.
The project is estimated to add approximately $250 million in
EBITDA on full completion and post ramp up. The hot skin pass mill
(HSPM) first coil was produced at the end of 1H 2022. In addition
to the HSM project, a push pull pickling line (PPPL) is to be
constructed to capture additional domestic volume through hot
rolled pickled and oiled products. The PPPL will have a capacity of
up to 0.75Mtpa, and the first pickled and oiled coils are expected
to be produced by 2H 2024.
b) Investment in ArcelorMittal Dofasco (Canada) to modernize the
hot strip mill. The project is to install two new state of the art
coilers and runout tables to replace three end of life coilers. The
strip cooling system was upgraded and includes innovative power
cooling technology to improve product capability. The project was
completed in 1H 2022 with all equipment fully operating. The
project is estimated to add >$25 million of EBITDA on full
completion and post ramp up.
c) Investment to replace #5 Hot-Dip Galvanizing Line Galvanneal
coating capability with 160kt/year Aluminum Silicon (AluSi®)
capability for the production of ArcelorMittal’s patented Usibor®
Press Hardenable Steel for automotive structural and safety
components. With the investment, ArcelorMittal Dofasco will become
the only Canadian producer of AluSi® coated Usibor®. This
investment complements additional strategic North America
developments, including a new EAF and caster at Calvert in the US
and a new hot strip mill in Mexico, and will allow to capitalize on
increasing Auto Aluminized PHS demand in North America. The project
is expected to be completed in 2022, with the first coil planned
for 2H 2022. The project is estimated to add >$40 million of
EBITDA on full completion and post ramp up.
d) In February 2021, ArcelorMittal announced the resumption of
the Vega Do Sul expansion to provide an additional 700kt of
cold-rolled annealed and galvanized capacity to serve the growing
domestic market. The ~$0.35 billion investment programme to
increase rolling capacity with construction of a new continuous
annealing line and CGL combiline (and the option to add a ca. 100kt
organic coating line to serve construction and appliance segments),
and upon completion, will strengthen ArcelorMittal’s position in
the fast growing automotive and industry markets through Advanced
High Strength Steel products. The investments will look to
facilitate a wide range of products and applications whilst further
optimizing current ArcelorMittal Vega facilities to maximize site
capacity and its competitiveness, considering comprehensive digital
and automation technology. Civil and steel structure erection works
at Combiline building is ongoing. Equipment erection at Acid
Regeneration Plant #2 is progressing. The project is expected to be
completed in 4Q 2023 and estimated to add >$0.1 billion of
EBITDA on full completion and post ramp up.
e) ArcelorMittal Liberia has been operating 5Mt direct shipping
ore (DSO) since 2011 (Phase 1). In 2013, the Company had started
construction of a Phase 2 project that envisaged the construction
of 15Mtpa of concentrate sinter fines capacity and associated
infrastructure; this project was then suspended due to the onset of
Ebola in West Africa and the subsequent force-majeure declaration
by the onsite contracting companies. On September 10, 2021,
ArcelorMittal signed with the Government of the Republic of Liberia
an amendment to its Mineral Development Agreement which is
currently under the legislative ratification process. Detailed
construction design is well advanced. Main civil works contract
progressing to plan, whilst tenders for key construction contracts
and remaining equipment are underway. Under this project, first
concentrate product is expected in late 2023, ramping up to 15Mtpa
thereafter. The capex required to conclude the project, previously
estimated at approximately $0.8 billion, is under review given
impacts of inflation and enlarged scope. Under the agreement, the
Company has further expansion opportunities up to 30Mtpa. Other
users may be allowed to invest for additional rail capacity. The
project is estimated to add approximately $250 million of EBITDA on
full completion and post ramp up.
f) ArcelorMittal Mexico is investing ~$150 million to increase
pellet feed production by 1Mtpa to 2.3Mtpa and improve concentrate
grade in Las Truchas. This project will enable concentrate
production to the blast furnace (BF) route (2.0Mtpa) and DRI route
(0.3Mtpa) for a total of 2.3Mtpa. Primary target is to supply
ArcelorMittal Mexico steel operations with high quality feed. All
equipment purchase orders were placed and construction phase in
approval process to start with civil construction of main
buildings. Production start-up is estimated in 2H 2023 and
estimated to add approximately $50 million of EBITDA on full
completion and post ramp up.
g) Approximately $350 million investment at Serra Azul (Brazil)
to construct facilities to produce 4.5Mtpa of DRI quality pellet
feed to primarily supply ArcelorMittal Mexico steel operation. The
project will allow to mine the compact itabirite iron ore.
Environmental and operations licenses have been cleared. Detailed
engineering is ongoing, earthworks have begun and procurement of
main equipment is nearing completion. Civil works of auxiliary
buildings completed. Project start-up is estimated in 2H 2023. The
project is estimated to add ~$100 million of EBITDA on full
completion and post ramp up.
h) The Monlevade upstream expansion project consisting of the
sinter plant, blast furnace and meltshop has recommenced in late
2021, following the anticipated improvement in Brazil domestic
market. Detailed engineering is ongoing. Piling, civil works and
erection to be started. The project is estimated to be completed in
2H 2024 with a capex requirement of approximately $0.5 billion. The
project is estimated to add >$0.2 billion of EBITDA on full
completion and post ramp up.
i) Investment in ArcelorMittal Kryvyi Rih to build a 5.0Mtpa
pellet plant which, together with the ongoing modernization of
Sinter Plant 2, will ensure that all sinter operations in Kryvyi
Rih are compliant with dust emissions environmental regulations and
will enable cost reduction, quality and productivity improvement.
In addition, the project will enable a CO2 footprint improvement by
750kt CO2/yr. First pellet was initially expected to be produced in
4Q 2023 with a capex requirement of approximately $0.3 billion;
however the project is on hold and has been suspended with the
revised completion date and budget dependent on when the project
can be effectively resumed due to the Russian invasion of Ukraine.
The project is estimated to add approximately $70 million in EBITDA
on full completion and post ramp up.
j) ~$0.25 billion investment in sections mill at Barra Mansa
(Brazil) with 400ktpa production capacity. The aim of the project
is to deliver higher added value products (HAV) (Merchant Bar and
Special Bars) to increase domestic market share in HAV products and
to enhance profitability. Main equipment is contracted,
disassembling of old mill to open space for the new equipment
ongoing. The project commenced in 2022 and is expected to be
completed by 1Q 2024. The project is estimated to add $0.1 billion
of EBITDA on full completion and post ramp up.
k) This $0.6 billion investment, combining solar and wind power,
will be supported by Greenko’s hydro pumped storage project, which
helps to overcome the intermittent nature of wind and solar power
generation. The project is owned and funded by ArcelorMittal.
Greenko will design, construct and operate the facilities in Andhra
Pradesh, Southern India. AMNS India will enter into a 25 year
off-take agreement with ArcelorMittal to purchase 250 MW of
renewable electricity annually from the project, resulting in over
20% of the electricity requirement at AMNS India’s Hazira plant
coming from renewable sources, reducing carbon emissions by
approximately 1.5Mt per year. The project commissioning is expected
by mid-2024 and estimated to add $70 million of EBITDA (excluding
savings at AMNS India) upon completion. The Company is studying the
option to develop a second phase which would double the installed
capacity.
Appendix 3: Debt repayment schedule as of June 30,
2022
(USD billion) |
2022 |
2023 |
2024 |
2025 |
2026 |
>2026 |
Total |
Bonds |
— |
1.2 |
0.8 |
0.9 |
0.4 |
1.7 |
5.0 |
Commercial paper |
0.9 |
— |
— |
— |
— |
— |
0.9 |
Other
loans |
0.5 |
0.3 |
0.3 |
0.6 |
0.1 |
1.1 |
2.9 |
Total gross debt |
1.4 |
1.5 |
1.1 |
1.5 |
0.5 |
2.8 |
8.8 |
Appendix 4: Reconciliation of gross debt to net debt as
of June 30, 2022
(USD million) |
Jun 30, 2022 |
Mar 31, 2022 |
Dec 31, 2021 |
Gross
debt |
8,788 |
8,722 |
8,401 |
Less: Cash and cash equivalents |
(4,565) |
(5,570) |
(4,371) |
Net debt |
4,223 |
3,152 |
4,030 |
|
|
|
|
Net debt / LTM EBITDA |
0.2 |
0.1 |
0.2 |
Appendix 5: Terms and definitionsUnless
indicated otherwise, or the context otherwise requires, references
in this earnings release report 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: operating results plus
depreciation, impairment items and if any, exceptional
items.EBITDA/tonne: calculated as EBITDA divided
by total steel shipments.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.Free cash flow (FCF): refers to net cash
provided by operating activities less capex less dividends paid to
minority shareholdersGross debt: long-term debt
and short-term debt.Impairment items: refers to
impairment charges net of reversals. Iron ore reference
prices: refers to iron ore prices for 62% Fe CFR
China.Liquidity: cash and cash equivalents plus
available credit lines excluding back-up lines for the commercial
paper program.LTIF: lost time injury frequency
rate equals lost time injuries per 1,000,000 worked hours, based on
own personnel and contractors.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.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.Operating
segments: NAFTA segment includes the Flat, Long and
Tubular operations of Canada, 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 Tubular operations of the European business, as well
as Downstream Solutions, and also includes Bosnia and Herzegovina
captive iron ore mines. The ACIS segment includes the Flat, Long
and Tubular operations of Kazakhstan, Ukraine and South Africa; and
also includes the captive iron ore mines in Ukraine and iron ore
and coal mines in Kazakhstan. 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.STIP: refers to short term incentive
plan.LTIP: refers to long term incentive
plan.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 result 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. 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/EBITDA which are non-GAAP
financial/alternative performance measures as additional measures
to enhance the understanding of its operating performance and
evaluate the strength of its cash generating capacity and ability
to service debt. The Company’s EBITDA objectives for certain
capital expenditure projects are based on the same accounting
policies as those applied in the Company’s financial statements
prepared in accordance with IFRS. ArcelorMittal also presents
Equity book value per share and ROE, calculated as shown in
footnotes to this press release. 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. ArcelorMittal is no longer
presenting adjusted net income / (loss) because there have been no
adjustments in recent periods. Non-GAAP financial/alternative
performance measures should be read in conjunction with, and not as
an alternative for, ArcelorMittal's financial information prepared
in accordance with IFRS.
- Effective 2Q 2021, ArcelorMittal retrospectively amended its
presentation of reportable segments. The results of each mine are
accounted for within the steel segment that it primarily supplies.
Summary of changes: NAFTA: all Mexico mines; Brazil: Andrade and
Serra Azul mines; Europe: ArcelorMittal Prijedor mine (Bosnia and
Herzegovina); ACIS: Kazakhstan and Ukraine mines; and Mining: only
AMMC and Liberia iron ore mines.
- LTIF figures presented for 2Q 2022 of 0.67x, 1Q 2022 of 0.69x,
and 0.89x for 2Q 2021 exclude ArcelorMittal Italia (which was
deconsolidated as from 2Q 2021 onwards).
- AMNS India has plans to debottleneck operations (steel shop and
rolling parts) and achieve capacity of 8.8Mt per annum and
medium-term plans to expand and grow to 14Mt per annum and then to
18Mt per annum. The Thakurani mine is operating at full 5.5Mtpa
capacity since 1Q 2021, while the second Odisha pellet plant was
commissioned and started in September 2021, adding 6Mtpa for a
total 20Mtpa of pellet capacity. In addition, in September 2021,
AMNS India commenced operations at Ghoraburhani - Sagasahi iron ore
mine in Odisha. The mine is set to produce 5.0Mtpa of high-quality
iron ore in 2022 and gradually ramp up production to a rated
capacity of 7.2Mtpa and contribute significantly to meeting AMNS
India’s long-term raw material requirements. In March 2021, AMNS
India signed a Memorandum of Understanding ("MoU") with the
Government of Odisha in view of building an integrated steel plant
with a 12Mtpa capacity in Kendrapara district of state Odisha. A
pre-feasibility study report was submitted to the state government
in 3Q 2021, and AMNS India is currently engaging with the
government for further studies and clearances.
- AMNS Calvert ("Calvert") has plans to construct a new 1.5Mt EAF
and caster to be completed 1H 2023. The joint venture is to invest
$775 million. Option to add a further 1.5Mt EAF is being
studied
- ArcelorMittal Mines Canada, otherwise known as ArcelorMittal
Mines and Infrastructure Canada.
- On December 19, 2018, ArcelorMittal signed a $5.5 billion
Revolving Credit Facility, with a five-year maturity plus two
one-year extension options. During the fourth quarter of 2019,
ArcelorMittal executed the option to extend the facility to
December 19, 2024. The extension was completed for $5.4 billion of
the available amount, with the remaining $0.1 billion remaining
with a maturity of December 19, 2023. In December 2020,
ArcelorMittal executed the second option to extend the facility,
and the new maturity is now extended to December 19, 2025. On April
30, 2021, ArcelorMittal amended its $5.5 billion RCF to align with
its sustainability and climate action strategy. As of June 30,
2022, the $5.5 billion revolving credit facility was fully
available.
- 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 will be 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 the reference. The certificates will 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.
- In addition to the AMNS India and Calvert joint ventures, the
Company has important investments in China that provide valuable
dividend streams and growth optionality. VAMA, our 50:50 joint
venture with Hunan Valin, is a state-of-the-art facility focused on
rolling steel for high-demanding applications in particular
automotive. The business is performing well and plans to expand the
current capacity by 40% to 2Mtpa over the next 2 years, financed
from its own resources. The investment will allow VAMA to broaden
its product portfolio and further enhance its competitiveness. This
will in turn enable VAMA to meet the growing demand of high value
add solutions from the Chinese automotive / new energy vehicle
(NEV) market and propel it to be among the top automotive steel
players in China by 2025. ArcelorMittal also owns a 37% interest in
China Oriental, one of the largest H-Beam producers in China which
has recently upgraded its asset portfolio and benefits from a
strong balance sheet position.
- Other assets include the main listed investment of Erdemir
(12%) at market value of $688 million, $935 million and $885
million as of June 30, 2022, March 31, 2022 and December 31, 2021,
respectively.
- Segment “Other & eliminations”, EBITDA result was a loss of
$84 million in 2Q 2022, as compared to loss of $158 million in 1Q
2022 principally due to the decrease of the stock margin
eliminations driven by the decrease during the quarter of the iron
ore market price on intra-group stock sales between steel and
mining businesses.
- Total steel shipments in 1H 2022 were 29.7Mt, -5.8% lower as
compared with 31.5Mt in 1H 2021 on a scope adjusted basis. Total
steel shipments in 2Q 2022 were 14.4Mt, -9.9% lower as compared
with 16Mt in 2Q 2021 on a scope adjusted basis.
- Equity book value per share is calculated as the Equity
attributable to the equity holders of the parent divided by diluted
number of shares at the end of the period. 2Q 2022 total equity of
$54.0 billion divided by 904 million diluted shares outstanding
equals $60/sh. 1Q 2022 total equity of $53.8 billion divided by 949
million diluted shares outstanding equals $57/sh.
- Strategic capex envelope of $3.65 billion represents total to
be spent on strategic projects (listed in Appendix 2b) in the
period from 2021 to 2024. Specifically, $0.40 billion of the $3.65
billion has been spent through June 30, 2022. The various estimates
in this press release of EBITDA benefit of these strategic capex
projects are based on assumptions once projects are ramped up to
capacity and assuming prices/spreads generally in line with the
averages of the period 2015-2020 period.
- Blast furnace No.6 (approximately 20% of total Kryvyi Rih
capacity), was restarted on April 11, 2022 (to resume low levels of
pig iron production). Iron ore production has been steadily
increased to ~55% capacity in 2Q 2022.
- ROE refers to "Return on Equity" which is calculated as
trailing twelve-month net income attributable to equity holders of
the parent divided by the average equity attributable to the equity
holders of the parent over the period. 2Q 2022 ROE of 34% ($16.7
billion / $49.6 billion). 1Q 2022 ROE of 36% ($16.8 billion / $46.8
billion).
- On May 31, 2022, Acciaierie d’Italia Holding and Ilva signed an
amendment to the Ilva lease agreement (with a conditional purchase
obligation) to, among other changes, extend the longstop date for
the fulfillment of the conditions precedent (and, therefore, the
term of the lease of the Ilva business) by 2 years (until May 31,
2024). In parallel, the ArcelorMittal group and Invitalia signed an
amendment to their investment agreement to extend the latest date
for the second equity injection to May 31, 2024 (to coincide with
the latest date for the fulfillment of the conditions precedent for
the purchase of the Ilva business assets) and to reflect certain
other circumstances. This amendment to the investment agreement
confirms Acciaierie d’Italia Holding’s ownership and governance
structure until May 2024.
- On March 30, 2022 Votorantim exercised the put option right it
has under its shareholders’ agreement with the Company to sell its
entire equity interest in ArcelorMittal Brasil to the Company,
following the acquisition of Votorantim S.A.'s long steel business
in Brazil in 2018, which became a wholly-owned subsidiary of
ArcelorMittal Brasil. The exercise price is calculated pursuant to
an agreed formula in the shareholders’ agreement which applies a 6x
multiple of ArcelorMittal Brasil Longs Business EBITDA in the four
immediately preceding calendar quarters from the date of the put
option exercise (subject to certain adjustments, such as the
exclusion of any unusual, infrequent or abnormal events ) less an
assumed net debt of BRL 6.2 billion times 15%. ArcelorMittal Brasil
calculated the put option exercise price in the amount of BRL 840
million, but Votorantim S.A. has indicated that it does not agree
with ArcelorMittal Brasil’s calculation of the exercise price. The
definition of the final put option exercise price will be subject
to the procedure specified in the shareholders' agreement, with
arbitration being the ultimate means.
- On March 17, 2022, ArcelorMittal had announced an investment
(which is in the process of final review and approval), with the
support of the French government, to create a new production unit
for electrical steels at its Mardyck site in the north of France.
This investment will create more than 100 direct jobs. With this
new unit, which will specialize in the production of electrical
steels for the engines of electric vehicles and which complements
ArcelorMittal’s existing electrical steels plant in Saint Chély
d’Apcher, in the south of France, all of the group's electrical
steels will be produced in France, strengthening France’s
electromobility sector.
- Following a favorable and unappealable decision issued in May
2022 with respect to taxpayers’ right to register the Pis/Cofins
credits over scrap purchases, ArcelorMittal Brasil recorded a gain
in the amount of $0.2 billion for the previous periods.
- The Company has introduced a 50% increase in the STI link to
safety performance (with fatalities acting as a circuit breaker);
increased the safety target in STIP to 15%, and LTIP to 10%; and
included ESG objectives in LTIP.
- Shares issued and outstanding as of March 31, 2022 reflected
the cancellation of 45 million treasury shares and an increase of
18.3 million in treasury shares from share buybacks in the first
quarter of 2022. Shares issued and outstanding as of June 30, 2022
reflected the cancellation of 60 million treasury shares and an
increase of 46.8 million in treasury shares from share buybacks in
the second quarter of 2022. In addition, following the dividend
paid in June 2022, the $608 million aggregate principal amount of
the Mandatorily Convertible Notes due 2023 outstanding as of June
30, 2022, divided by the maximum conversion price of $10.64 per
share; equals approximately 57 million shares following
conversion.
- Based on share price as at 26.07.22 of $22.90/sh.
Second quarter and half year 2022
earnings analyst conference callArcelorMittal management
will host a conference call for members of the investment community
to present and comment on the three-month and six-month period
ended June 30, 2022 on: Thursday July 28, 2022 at 9.30am US
Eastern time; 14.30pm London time and 15.30pm CET.
The dial
in numbers are: |
|
|
Location |
Toll free dial in numbers |
Local dial in numbers |
Participant |
UK local: |
0808 238 0676 |
+44 (0)203
057 6900 |
7995055# |
US
local: |
+1 866
220 1433 |
+1 347
903 0960 |
7995055# |
France: |
0805
101 469 |
+33 1
7070 6079 |
7995055# |
Germany: |
0800
588 9185 |
+49 69
2222 2624 |
7995055# |
Spain: |
900 828
532 |
+34 914
144 464 |
7995055# |
Luxembourg: |
800 23
023 |
+352
2786 0311 |
7995055# |
Join the call via telephone using the participant code 7995055#
or alternatively use the live audio webcast link.
https://interface.eviscomedia.com/player/1147/Please visit the
results section on our website to listen to the reply once the
event has finished
https://corporate.arcelormittal.com/investors/results
Forward-Looking StatementsThis
document may contain 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.
About
ArcelorMittalArcelorMittal is one of the world's leading
steel and mining company, with a presence in 60 countries and
primary steelmaking facilities in 16 countries. In 2021,
ArcelorMittal had revenues of $76.6 billion and crude steel
production of 69.1 million metric tonnes, while iron ore production
reached 50.9 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: http://corporate.arcelormittal.com/
EnquiriesArcelorMittal 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
- 2Q22 Earnings release FINAL 280722.pdf
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