ArcelorMittal results for the first quarter 2015
ArcelorMittal comes ‘Together for safety’ to hold employee Health and Safety Day
ArcelorMittal publishes 2014 annual review and fact book
At ArcelorMittal, we are committed to enriching the communities where we have a presence. Making a positive impact on the environmental and economic conditions in these regions is close to our hearts.
ArcelorMittal releases 2014 sustainability report
May 7, 2015 - 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 results
for the three month period
ended March 31, 2015.
Outlook and guidance:
highlights (on the basis of IFRS):
Lakshmi N. Mittal, ArcelorMittal Chairman and CEO, said:
faced a number of headwinds in the first quarter, including a declining
iron-ore price, a stronger dollar and surge of imports in the United States.
As a result of which EBITDA declined to US$1.4 billion, although the underlying
performance of our steel business remained similar to the first quarter of
2014. The performance in Europe was of particular note, with EBITDA improving
15% year-on-year. Off-setting the impact of these headwinds is a priority
and we are focused on achieving a 15% reduction in mining costs and improving
the competitive position of our US operations. Importantly, we still
expect to remain free cash flow positive and further reduce net debt over the
course of the year.”
First quarter 2015 earnings analyst conference call
ArcelorMittal management will host a
conference call for members of the investment community to discuss the first
quarter period ended March 31, 2015 on:
conference call will include a brief question and answer session with senior
management. The presentation will be available via a live video webcast on
This 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 (
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 Annual Report on Form 20-F for the year ended December 31, 2014
filed 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.
is the world's leading steel and mining company, with a presence in 60
countries and an industrial footprint in 19
countries. Guided by a philosophy to produce safe, sustainable steel, we are
the leading supplier of quality steel in the major global steel markets
including automotive, construction, household appliances and packaging, with
world-class research and development and outstanding distribution networks.
Through our core values of sustainability, quality and leadership,
we operate responsibly with respect to the health, safety and wellbeing of our
employees, contractors and the communities in which we operate.
For us, steel is the fabric of life, as it is at the heart of the
modern world from railways to cars and washing machines. We are actively
researching and producing steel-based technologies and solutions that make many
of the products and components people
everyday lives more energy efficient.
We are one of the world’s five largest producers of iron ore and
metallurgical coal and our mining business is an essential part of our growth
strategy. With a geographically diversified portfolio of iron ore and coal
assets, we are strategically positioned to serve our network of steel plants
and the external global market. While our steel operations are important
customers, our supply to the external market is increasing as we grow.
In 2014, ArcelorMittal had revenues of US$79.3 billion and crude
steel production of 93.1 million tonnes, while own iron ore production reached
63.9 million tonnes.
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:
Corporate responsibility and
and safety - Own personnel and contractors lost time injury frequency rate
and safety performance, based on own personnel figures and contractors lost
time injury frequency (LTIF) rate, remained stable at 0.88x in the first
quarter of 2015 (“1Q 2015”) as compared to 0.89x for the fourth quarter of 2014
(“4Q 2014”) and deteriorated as compared to 0.85x for the first quarter of 2014
(“1Q 2014”). During 1Q 2015, significant improvements in the Mining, NAFTA and
Brazil segment performance relative to 4Q 2014, were partially offset by
deterioration in the Europe and ACIS segment.
Company’s effort to improve the Group’s Health and Safety record continues and
remains focused on both further reducing the rate of severe injuries and
personnel and contractors - Frequency rate
corporate responsibility highlights for 1Q 2015:
Analysis of results for 1Q 2015
versus 4Q 2014 and 1Q 2014
Total steel shipments for 1Q 2015 were 2%
higher at 21.6 million metric tonnes as compared with 21.2 million metric
tonnes for 4Q 2014, and 3% higher as compared to 21.0 million metric tonnes for
Sales for 1Q 2015 were $17.1 billion as
compared to $18.7 billion for 4Q 2014 and $19.8 billion for 1Q 2014. Sales in
1Q 2015, were 8.6% lower as compared to 4Q 2014 primarily due to lower average
steel selling prices (-9.2%), seasonally lower market priced iron ore shipments
(-5.7%) and lower iron ore reference prices (-16%), partially offset by higher
steel shipments (+2.0%).
was lower at $807 million for 1Q 2015 as compared to $982 million in 4Q 2014
primarily on account of foreign exchange impact due to depreciation of all
major currencies (Brazilian real, Euro and Canadian dollar) against the US
in 1Q 2015 was significantly lower than $1,080 million for 1Q 2014 on account
of these impacts discussed above, as well as increases in the useful lives of
plant and equipment. Assuming a similar foreign exchange translation impact for
the remainder of 2015, full year depreciation is expected to be approximately
charges for 1Q 2015 and 1Q 2014 were nil. Impairment charges for 4Q 2014 of
$264 million included $114 million primarily related to the idling of the steel
shop and rolling facilities of Indiana Harbor Long carbon operations in the US
(NAFTA); $63 million related to write-down of the Volcan iron ore mine in
Mexico (Mining); and $57 million related to the closure of mill C in Rodange,
Operating income for 1Q 2015 was $571
million, as compared to $569 million in 4Q 2014 and $674 million in 1Q 2014.
Operating results for 1Q 2015 were negatively impacted by a $69 million provision
primarily related to onerous hot rolled and cold rolled contracts in the US
(NAFTA). Operating results for 4Q 2014 were negatively impacted by a $76
million provision related to onerous annual tin plate contracts at Weirton in
the US (NAFTA), offset by the positive impact from the $79 million gain on
disposal of Kuzbass coal mines in Russia (Mining).
from investments in associates, joint ventures and other investments in 1Q 2015
was $2 million as compared to loss in 4Q 2014 of $380 million and income of $36
million in 1Q 2014. Loss from investments in associates, joint ventures and
other investments in 1Q 2015 was
negatively impacted by foreign exchange
effects on various investees, partially offset by improved performance by
Spanish and German investees.
Loss from investments in associates, joint
ventures and other investments in 4Q 2014 was negatively impacted by
million impairment loss on China Oriental following a revision of business
partially offset by a $193 million gain on sale of Gallatin as well as improved
performance of European investees and the share of profits of Calvert
in 1Q 2014 was primarily the result of improved performance of Spanish
interest expense (including interest expense and interest income) in 1Q 2015
was stable at $323 million as compared to 4Q 2014. Increased interest expense
due to the issuance of €750 million of bonds in January 2015 and “step up”
clauses in most of the Company’s outstanding bonds, triggered by the S&P
downgrade in February 2015 was offset by savings following the repayments of bonds in 4Q
2014 ($500 million and $750 million repaid early in October 2014 and €360
million repaid in November 2014). The decrease in 1Q 2015 relative to $426
million in 1Q 2014 is attributable to both lower gross debt outstanding and
lower average cost, following the repayments of convertible bonds in 2Q 2014
(€1.25 billion and $800 million) and the repayments of bonds in 4Q 2014. The
Company continues to expect full year 2015 net interest expense of
approximately $1.4 billion.
Foreign exchange and other net financing
costs were $756 million for 1Q 2015 as compared to $549 million for 4Q 2014 and
$380 million for 1Q 2014. Foreign exchange and other net financing costs for 1Q
2015 include foreign exchange losses of $538 million as compared to a loss of
$316 million for 4Q 2014 mainly on account of USD appreciation of 11.4% against
the Euro (versus 3.5% in 4Q 2014) and 17.2% against BRL (versus 7.7% in 4Q
2014). This foreign exchange loss is largely non-cash and primarily relates to
the impact of the USD appreciation on Euro denominated deferred tax assets
partially offset by foreign exchange gain on euro debt.
ArcelorMittal recorded income tax expense of
$210 million for 1Q 2015, as compared to an income tax expense of $258 million
for 4Q 2014 and income tax expense of $61 million for 1Q 2014.
interests for 1Q 2015 and 4Q 2014 represent a charge primarily related to
minority shareholders’ share of net income recorded in ArcelorMittal Mines
Canada and Belgo Bekaert Arames in Brazil. Non-controlling interests for 1Q
2014 represent a charge primarily related to minority shareholders’ share of
net income recorded in ArcelorMittal Mines Canada and South Africa.
a net loss for 1Q 2015 of $728 million, or $0.41 loss per share, as compared to
net loss of $955 million, or $0.53 loss per share for 4Q 2014, and a net loss
of $205 million, or $0.12 loss per share for 1Q 2014.
Capital expenditure projects
The following tables
summarize the Company’s principal growth and optimization projects involving
significant capital expenditures.
projects in most recent quarters
a) The Liberia phase 2
project to invest $1.7 billion to construct 15 million tonnes of concentrate
capacity and associated infrastructure has been delayed. This follows the
contractor’s declaration of force majeure on August 8, 2014 due to the Ebola
virus outbreak in West Africa. Given the project delays and ensuing rapid
deterioration of iron ore prices, the Company is assessing its options to
progress with this project. ArcelorMittal remains fully committed to Liberia.
Phase 1 operations are continuing as normal at this time and to date have not
been affected by the Ebola situation in Liberia.
of segment operations
NAFTA segment crude steel production
decreased by 3.8% to 5.9 million tonnes in 1Q 2015 as compared to 4Q 2014 to
align with weaker demand.
Steel shipments in 1Q 2015 decreased by 5.9%
to 5.5 million tonnes as compared to 4Q 2014, primarily driven by a 7.9%
flat product steel shipment volumes due to weaker demand resulting in
particular from a strong inventory destock.
Sales in 1Q 2015 decreased by 7.5% to $4.8
billion as compared to 4Q 2014, due to lower steel shipments as discussed
above, and lower average steel selling prices (-3.5%) primarily due to lower
domestic prices impacted by weak demand and import pressures. Average steel selling
price for flat products and long products declined -3.1% and -8.0%,
EBITDA in 1Q 2015 decreased to $53 million as
compared to $341
million in 4Q 2014. EBITDA for 1Q 2015 was negatively impacted by a $69 million provision
primarily related to onerous hot rolled and cold rolled contracts in the US. EBITDA for 4Q 2014
was negatively impacted by a $76 million provision related to onerous annual
tin plate contract at Weirton,
US. EBITDA in 1Q 2015 was lower as compared to 4Q 2014 due to lower average steel
selling prices and steel shipment volumes as discussed above.
On an underlying basis, EBITDA in 1Q 2015 was
52.9% lower as compared to 1Q 2014 primarily due to lower steel shipments
(-2.7%) and lower average steel selling prices (5.3%).
income for 4Q 2014 was also impacted by impairment charges of $114 million
primarily related to the idling of the steel shop and rolling facilities of
Indiana Harbor Long carbon operations in the US.
Brazil segment crude steel
production increased by 4.3% to 2.9 million tonnes in 1Q 2015 as compared to 4Q
shipments in 1Q 2015 decreased by 6.5% to 2.7 million tonnes as compared to 4Q
2014, driven by a 7.8% decline in flat product steel shipment volumes (primarily due to
decreased slab exports from Brazil), and 4.8% decline in long product steel
shipment volumes primarily due to weak domestic demand in Brazil and Argentina.
Sales in 1Q 2015 decreased by 16.6% to $2.1
billion as compared to 4Q 2014, due to lower steel shipments as discussed above, and
lower average steel selling prices (-10%). Average steel selling prices for flat and
long products decreased by 11.2% and 5.2%, respectively, negatively impacted by
a weaker Brazilian real and a decline in international slab prices.
EBITDA in 1Q 2015 decreased by 30.9% to $377
million as compared to $546
million in 4Q 2014 primarily on account of lower steel shipment volumes and
average steel selling prices, as well as lower profitability in our tubular
EBITDA in 1Q 2015 was lower as compared to 1Q
2014 by 11.1% due to lower average steel selling prices offset in part by
higher steel shipments
(following the restart of Tubarao furnace in July 2014).
Europe segment crude steel production
increased by 5.6% to 11.3 million tonnes in 1Q 2015, as compared to 4Q 2014.
Steel shipments in 1Q 2015 increased by 10.9%
to 10.7 million tonnes as compared to 4Q 2014. Flat product shipment volumes
increased by 12.9% and long product shipment volumes increased by 6.4%, both
benefiting from seasonality and improved demand.
Sales in 1Q 2015
decreased by 4.7% to $8.6 billion as compared to 4Q 2014, primarily due to
lower average steel selling prices (-12.2%), partially offset by higher steel
shipments as discussed above. Average steel selling prices for flat and long
products decreased by 11.8% and 13.0%, respectively, largely due to exchange
rate effects. Local average steel prices declined marginally, partially reflecting
lower raw material costs.
EBITDA in 1Q 2015 increased by 10.6% to $616
million as compared to $557 million in 4Q 2014, reflecting improved market conditions
offset in part by negative translation impacts.
EBITDA in 1Q 2015 was 15% higher than 1Q
2014, reflecting improved market conditions as well as the benefits of cost
Operating performance for 4Q 2014 was impacted
by impairment charges of $57 million, related to the closure of mill C in
ACIS segment crude steel production in 1Q
2015 increased by 2.4% to 3.6 million tonnes as compared to 4Q 2014. This
reflects increased production in South Africa following the ramp up at
Newcastle blast furnace post the completion in December of the reline works.
Steel shipments in 1Q 2015 decreased by 3.4%
to 3.0 million metric tonnes as compared to 4Q 2014, primarily due to
seasonally lower shipments in our CIS operations offset in part by higher
volumes in South Africa.
Sales in 1Q 2015 decreased by 12.5% to $1.7
billion as compared to 4Q 2014. This decline was primarily due to lower steel
shipment volumes and average steel selling prices (-7.8%). Average steel selling
prices were lower in Ukraine (-13.7%) and Kazakhstan (-10%) impacted by weaker
CIS prices, as well as lower prices in South Africa following a 4.5%
depreciation of the South African Rand.
EBITDA in 1Q 2015 decreased to $133 million
as compared to $147 million in 4Q 2014, due to lower average steel selling prices
partially offset by lower costs in Ukraine (due to currency devaluation) and
EBITDA in 1Q 2015 was 21.7% higher as
compared to 1Q 2014 due to lower costs, offset by lower steel shipments (-5.7%)
and lower average steel selling prices (-10.6%).
Own iron ore and coal production not including strategic long-term contracts
Iron ore and coal shipments of market-priced based materials include the
Company’s own mines, and share of production at other mines, and exclude
supplies under strategic long-term contracts
Own iron ore production (not including
supplies under strategic long-term contracts) in 1Q 2015 decreased by 7.0% to
15.6 million metric tonnes as compared to 4Q 2014. This reflects seasonally
weaker performance in Canada and Brazil offset in
part by improved production in Liberia.
Own iron ore production (not
including supplies under strategic long-term contracts) was 5.0% higher than 1Q
2014, primarily due to higher production at Mines Canada due to “efficiency gains” and
improvement at Liberia offset in part by lower production in Ukraine and
price iron ore shipments in 1Q 2015 decreased by 5.7% to 9.4 million metric tonnes as compared to 4Q 2014, primarily driven by
seasonally lower shipments Mines Canada driven by weather related issues.
Market price iron ore shipments in 1Q 2015 were stable as compared
to 1Q 2014 primarily due to lower shipments in Mexico and Ukraine offset by
increased shipments in Mines Canada following operational efficiency gains.
Own coal production (not including
supplies under strategic long-term contracts) in 1Q 2015 decreased 8.0% to 1.6
million metric tonnes as compared to 4Q 2014, primarily due to seasonally lower
production at our US operations impacted by adverse weather.
Own coal production (not
including supplies under strategic long-term contracts) in 1Q 2015 decreased
12.1% as compared to 1Q 2014, primarily due lower production at our US
operations and scope change following the disposal of the Kuzbass coal mines in
Russia during the fourth quarter of 2014.
in 1Q 2015 decreased to $114 million as compared to $232 million in 4Q 2014.
EBITDA for 4Q 2014 was positively impacted by a $79 million gain on the
disposal of Kuzbass coal mines. Therefore on an underlying basis, 1Q 2015
EBITDA decreased by 25.8% primarily due to lower seaborne iron ore market
prices (-16%) and lower market price shipment volumes, offset in part by
improved cost performance.
EBITDA in 1Q 2015 was 73.8% lower as compared
to 1Q 2014, primarily due to lower seaborne iron ore market prices (-48%),
partially offset by lower unit production costs, the benefits of lower freight,
foreign exchange and restructuring of our coal operations including the sale of
performance for 4Q 2014 was impacted by a $63 million impairment charge related
to costs associated with the write-down of the Volcan iron ore mine in Mexico.
and Capital Resources
For 1Q 2015, net cash used in operating
activities was $915 million, as compared to net cash provided by operating
activities of $2,292 million in 4Q 2014. Cash used in operating activities in
1Q 2015 included a $1,206 million investment of operating working capital as
compared to a $994 million release of operating working capital in 4Q 2014.
Despite the cash investment in working capital, due to foreign exchange
movements, the amount reflected in the balance sheet remains largely unchanged.
Rotation days during 1Q 2015 increased to 54 days as compared to 51 days in 4Q
Net cash provided by other operating
activities in 1Q 2015 was $119 million (including several items such as,
onerous contact provision, unrealised forex, employee benefits and VAT). This
compares to net cash provided by other operating activities in 4Q 2014 of $889
million (including the adjustment of non-cash items related to unrealized forex
losses, income tax accruals, impairment on China Oriental partially offset by
adjustments of gains from disposal of Gallatin and Kuzbass). Net cash used by
other operating activities in 1Q 2014 was $393 million (including adjustment of
non-cash items such as income from associates and forex and changes in other
payables, such as employee benefits, payment of provisions and VAT).
Net cash used in
investing activities during 1Q 2015 was $456 million as compared to net cash
used in investing activities during 4Q 2014 of $492 million. Capital
expenditure decreased significantly to $745 million in 1Q 2015 as compared to
$1,067 million in 4Q 2014. Due to the benefits of foreign exchange as well as
the postponement of some investment projects, the Company has reduced the FY
2015 capital expenditure budget to approximately $3.0 billion.
Cash flow from other investing
activities in 1Q 2015 of $289 million primarily included a $108 million inflow
from the exercise of the fourth put option on Hunan Valin shares, cash
received from the Kiswire divestment
and proceeds from the sale of tangible assets. Cash flow from other investing
activities in 4Q 2014 of $575 million primarily included the cash inflow from
the divesture of Gallatin for $389 million, a $108 million inflow from the
exercise of the third put option on Hunan Valin shares
proceeds from the sale of tangible assets. Other investing activities in 1Q
2014 of $215 million primarily includes $258 million associated with the AM/NS
part by proceeds from the exercise of the second put option in Hunan
Net cash provided by financing
activities for 1Q 2015 was $313 million as compared to net cash used in
financing activities of $1,926 million for 4Q 2014. Net cash provided by
financing activities for 1Q 2015 includes inflow related to issuance of $877
million (€750 million) 3.125% Notes due January 14, 2022, under the Company’s
Euro Medium Term Notes Programme, $339 million of short term financing and
proceeds from a 4-year €75 million term loan, offset in part by a repayment of
a $1.0 billion loan.
Net cash used in financing
activities for 4Q 2014 primarily included debt prepayment totalling $1.25
9.0% Notes due February 15, 2015 ($750 million) and 3.750% Notes due February
25, 2015 ($500 million) prior to their scheduled maturity and €360 million bond
Net cash provided by financing
activities for 1Q 2014 was $557 million and includes inflow of $1.3 billion
relating to the proceeds from the issuance of a €750 million 3.0% Notes due 25
March 2019, under the Company’s Euro Medium Term Notes Programme and proceeds
from new 3-year $300 million financing provided by EDC (Export Development
Canada), offset in part by the early redemption of perpetual securities of
During 1Q 2015, the Company paid
$53 million in dividends primarily to minority shareholders in Arcelormittal
Mines Canada , as compared to $15 million dividends paid to minority
shareholders in 4Q 2014. During 1Q 2014, the Company paid $57 million in
dividends to minority shareholders including those in ArcelorMittal Mines
Canada and payments to perpetual securities holders.
At March 31, 2015, the
Company’s cash and cash equivalents (including restricted cash and short-term
investments) amounted to $2.8 billion as compared to $4.0 billion at December
Gross debt of $19.4
billion at March 31, 2015, decreased from $19.9 billion at December 31, 2014
and $23.6 billion at March 31, 2014. Gross debt was lower at March 31, 2015
following the net repayment of loans and positive impact of foreign exchange
As of March 31, 2015,
net debt was $16.6 billion as compared with $15.8 billion at December 31, 2014, primarily driven by
the investment of operating working capital of $1.2 billion, partially offset
by asset disposal proceeds ($0.3 billion)
and forex effects ($0.6 billion).
The Company had liquidity of $8.8 billion at March
31, 2015, consisting of cash and cash equivalents (including restricted cash
and short-term investments) of $2.8 billion and $6.0 billion of available
credit lines. On March 31, 2015, the average debt maturity was 6.4 years.
Outlook and guidance
on the current economic outlook, ArcelorMittal expects global apparent steel
consumption (“ASC”) to increase by approximately +0.5% to +1.5% in 2015.
ArcelorMittal expects the pick-up in European manufacturing activity to
continue and support ASC growth of approximately +1.5% to +2.5% in 2015 (versus
a growth of 3.5% in 2014). Driven by robust underlying steel demand and
significant restocking, ASC in the US grew by over 11% in 2014. Whilst
underlying demand continues to expand, due to a destock in the 1H 2015, ASC in
the US is expected to decline -2% to -3%. Due to the weak macro backdrop both
in the CIS and Brazil, ASC is expected to decline by -5% to -7% in both regions
in 2015. In China, we see signs of stabilization due to the government’s
targeted stimulus, however real estate market remains weak and expect steel
demand growth in the range of +0.5% to +1.5% for 2015. While there remain risks
to the global demand picture, given ArcelorMittal’s specific geographical and
end market exposures, the Company expects its steel shipments to increase by
between +3% to 5% in 2015 as compared to 2014.
Whilst steel markets have evolved largely as
per expectations, the subsequent deterioration of iron ore prices as well
as a weaker U.S. market results in a headwind to guidance. Although the
Company expects to benefit from further improvement in costs, both in mining
and steel segments (including lower raw material costs), the Company now
expects 2015 EBITDA within the range of $6.0 - $7.0 billion.
to the benefits of foreign exchange as well as the postponement of some
investment projects the Company has further reduced the FY 2015 capital
expenditure budget to approximately $3.0 billion.
Company expects net interest expense of approximately $1.4 billion in 2015.
Importantly, the Company continues to expect
positive free cash flow in 2015 and to achieve progress towards the medium term
net debt target of $15 billion.
ArcelorMittal Condensed Consolidated Statements of Financial
ArcelorMittal Condensed Consolidated Statement of Operations
ArcelorMittal Condensed Consolidated Statements of Cash flows
Appendix 1: Product shipments by region
Others and eliminations line are not presented in the table
Appendix 2: Capital expenditures
Note: Others and eliminations line are not
presented in the table
Appendix 3: Debt repayment schedule as of March 31, 2015
Appendix 4: Credit lines available as of March 31, 2015
Appendix 5: EBITDA bridge from 4Q 2014 to1Q 2015
a) The volume variance
indicates the sales value gain/loss through selling a higher/lower volume
compared to the reference period, valued at reference period contribution
(selling price–variable cost). The mix variance indicates sales value
gain/loss through selling different proportions of mix (product, choice,
customer, market including domestic/export), compared to the reference period
b) The price-cost
variance is a combination of the selling price and cost variance. The selling
price variance indicates the sales value gain/loss through selling at a
higher/lower price compared to the reference period after adjustment for mix,
valued with the current period volumes sold. The cost variance indicates
increase/decrease in cost (after adjustment for mix, one-time items and
others) compared to the reference period cost. Cost variance includes the
gain/loss through consumptions of input materials at a higher price/lower
price, movement in fixed cost, changes in valuation of inventory due to
movement in capacity utilization etc.
c) “Other” includes a
$69 million provision primarily related to onerous hot rolled and cold rolled
contracts in the US and foreign exchange translation impact.
Appendix 6: Terms and definitions
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:
Lost time injury
frequency rate equals lost time injuries per 1,000,000 worked hours, based on
own personnel and contractors.
plus depreciation, impairment expenses and exceptional items.
Free cash flow:
net cash provided by operating activities
less purchases of property, plant and equipment and intangibles.
long-term debt, plus short term debt, less
cash and cash equivalents, restricted cash and short-term investments
(including those held as part of assets/liabilities held for sale).
Market priced tonnes:
represent amounts of iron ore and
coal from ArcelorMittal mines that could be sold to third parties on the open
market. Market priced tonnes that are not sold to third parties are
transferred from the Mining segment to the Company’s steel producing segments
and reported at the prevailing market price. Shipments of raw materials that
do not constitute market priced tonnes are transferred internally and
reported on a cost-plus basis.
exchange and other net financing costs:
include foreign currency swaps, bank
fees, interest on pensions, impairments of financial instruments and
revaluation of derivative instruments, and other charges that cannot be
directly linked to operating results.
steel selling prices:
calculated as steel sales divided by steel shipments.
Mining segment sales:
i) “External sales”: mined product
sold to third parties at market price; ii) “Market-priced tonnes”: internal
sales of mined product to ArcelorMittal facilities and reported at prevailing
market prices; iii) “Cost-plus tonnes” - internal sales of mined product to ArcelorMittal
facilities on a cost-plus basis. The determinant of whether internal sales
are reported at market price or cost-plus is whether the raw material could
practically be sold to third parties (i.e. there is a potential market for
the product and logistics exist to access that market).
days of accounts receivable plus days of
inventory minus days of accounts payable. Days of accounts payable and
inventory are a function of cost of goods sold of the quarter on an
annualized basis. Days of accounts receivable are a function of sales of the
quarter on an annualized basis.
Operating working capital:
receivable plus inventories less trade accounts payable.
includes the acquisition of intangible
assets (such as concessions for mining and IT support) and includes payments
to fixed asset suppliers.
Seaborne iron ore reference prices:
refers to iron ore
prices for 62% Fe CFR China.
Own iron ore production:
Includes total of
all finished production of fines, concentrate, pellets and lumps (excludes
share of production and strategic long-term contracts).
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
EBITDA divided by total steel shipments.
EBITDA less Mining segment EBITDA.
calculated as steel-only EBITDA divided by total shipments
Iron ore unit cash cost:
average pellet and concentrate cost of goods sold across all mines
includes back-up lines for the commercial
information at the Group level was
previously based on a simple aggregation, eliminating intra-segment shipments
and excluding shipments of the Distribution Solutions segment. The new
presentation of shipments information eliminates both inter- and intra–segment
shipments which are primarily between Flat/Long plants and Tubular plants and
continues to exclude the shipments of Distribution Solutions.
information in this press release has been prepared consistently with
International Financial Reporting Standards (“IFRS”) as issued by the
International Accounting Standards Board (“IASB”). While the interim financial
information included in this announcement has been prepared in accordance with
IFRS applicable to interim periods, this announcement does not contain
sufficient information to constitute an interim financial report as defined in
International Accounting Standards 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. This press release also includes certain non-GAAP
EBITDA in 1Q 2015 of
$1,378 million was negatively impacted by a $69 million provision primarily
related to onerous hot rolled and cold rolled in the US. EBITDA in 4Q 2014 of
$1,815 million was negatively impacted by a $76 million provision related to
onerous annual tin plate contracts at Weirton in the US, offset by the positive
impact from the $79 million gain on disposal of Kuzbass coal mines in Russia.
EBITDA in 1Q 2015 of $1,333 million is calculated as EBITDA of $1,378 million plus
$69 million provision for onerous contracts in the US less $114 million Mining
EBITDA. Steel-only EBITDA in 1Q 2014 of $1,321 million is calculated as EBITDA
of 1,754 million less $433 million Mining EBITDA.
Effective from January
1, 2015, the functional currency of Kryvyi Rih was changed to the Ukrainian
Hryvnia due to changes in the regulatory and economic environment and
transaction currencies of the operations.
Following the sale of
a 5% stake to Valin Group as a result of the exercise of the third put option on
February 8, 2014, the Company’s interest in Hunan Valin decreased from 20% to
15%. On August 6, 2014, the Company exercised the fourth and final instalment,
which subsequently led to the decrease in its stake in Hunan Valin from 15% to
10%. The Company received cash from the third and fourth installment of $108
million both in the fourth quarter of 2014 and first quarter of 2015,
On December 9, 2013,
ArcelorMittal signed an agreement with Kiswire Ltd. for the sale of its 50%
stake in the joint venture Kiswire ArcelorMittal Ltd in South Korea and certain
other entities of its steel cord business in the US, Europe and Asia for a
total consideration of $169 million. The net proceeds received in 2Q 2014 are
$39 million being $55 million received in cash during the quarter minus cash
held by steel cord business. Additionally, $28 million of gross debt held by
the steel cord business has been transferred. During 1Q 2015, the Company
received $45 million with the remainder due in 2Q 2015.
On February 26, 2014,
ArcelorMittal, together with Nippon Steel & Sumitomo Metal Corporation
(“NSSMC”), announced that it has completed the acquisition of ThyssenKrupp
Steel USA (“TK Steel USA”), a steel processing plant in Calvert, Alabama,
having received all necessary regulatory approvals. The transaction – a 50/50
joint venture with NSSMC – was completed for an agreed price of $1,550 million
plus working capital and net debt adjustment. ArcelorMittal paid $258 million cash
for the acquisition in 1Q 2014. The Calvert plant has a total capacity of 5.3
million tons including hot rolling, cold rolling, coating and finishing lines.
As at December 31,
2014 net debt included $0.1 billion relating to distribution centers in Europe
held for sale.
During the first
quarter of 2015, the Company generated cash proceeds totalling $0.3 billion
from the proceeds from the exercise of the fourth put option on Hunan Valin
shares of $108 million, cash received from Kiswire divestment and proceeds from
the sale of tangible assets.
Assets and liabilities held for sale as of
December 31, 2014 included assets and liabilities held for sale related to
distribution centers in Europe and the disposal of tangible assets. As of March
31, 2014, assets and liabilities subject to disposal primarily relate to steel
cord business and ATIC classified as asset/liabilities held for sale.
In April 2015, the Company refinanced and
extended $6 billion lines of credit (two tranches: $2.5 billion 3Yr and $3.5
billion 5Yr) with 4.25x Net debt / EBITDA covenant
Contact information ArcelorMittal Investor Relations
Europe: +352 4792 3198
Americas: +1 312 899 3985
Retail: +352 4792 3198
SRI: +44 207 543 1123
Bonds/Credit: +33 1 71 92 10 26
Contact information ArcelorMittal Corporate Communications
Phone: +44 207 629 7988
ArcelorMittal Corporate Communications
Paul Weigh (Head of Media Relations) +44 203 214 2882
Laura Nutt +44 207 543 1125
Isabelle Cornelis +44 203 214 2453
+44 20 7379 5151
Sylvie Dumaine / Anne-Charlotte Creach
+33 (1) 53 70 74 70
28 April 2015 - ArcelorMittal’s core philosophy is to produce safe, sustainable steel, making health and safety the number one priority for the company. As the company celebrates its ninth Health and Safety day around the world, colleagues and contractors are asked to stop, think and reflect on the health and safety of themselves, and their colleagues around them.
Lakshmi Mittal, Chairman and CEO, ArcelorMittal, spoke to employees and contractors today about this year’s theme and what it should mean to them, “There is no other day like this at the company because there is nothing more important than health and safety. To mark the event, tens of thousands of us will today be taking part in special events around the world, based on this year’s theme, ‘Together for safety’. The important word here is ‘together’. It is vital that we pull together to ensure the progress we have made since the creation of the company consistently improves.
“Every single accident is avoidable – we must always believe this. If we work together, if we take care of ourselves and our colleagues, if we promise never to cut corners, if we speak up when we see something that isn’t right, if safety is uppermost in our minds every minute of every day, then we can succeed.”
In 2014, the lost time injury frequency rate (LTIFR) remained stable at 0.85, the same rate achieved in 2013. The company’s effort to improve the group’s Health and Safety record continues and remains focused on both reducing the rate of severe injuries and preventing fatalities; until we reach the ultimate target of zero.
As executive vice president, head of health and safety and chief technology officer for the group, Robrecht Himpe commented, “Our Journey to Zero is of upmost importance to the group. It is the most important aspect of everything we do on a daily basis, and the reason why every single member of the group’s senior management team actively participates in today’s activities at our facilities worldwide. Making sure our employees and contractors around the work get home safely every day is our number one priority. We must all work together to ensure we achieve this goal.”
Want to know more?
Outcome 1 of our 10 Sustainable Outcomes: Safe, healthy, quality working lives for our people
ArcelorMittal, the world’s leading steel and mining company, today publishes its 2014 annual review and fact book on a dedicated website.
The annual review, entitled 'Innovating to success', features up-to-date and detailed information about the company, its strategy, financial highlights for 2014, as well as a message from ArcelorMittal Chairman and CEO, Lakshmi Mittal, who reports on the company’s progress last year: “Over the past seven years, we have focused on adapting ArcelorMittal for a changed world. We have reconfigured our asset base to the new demand realities, particularly in Europe; we have focused investment in attractive markets; reduced costs and net debt; and expanded our range of specialist steels designed to enable our customers to meet their targets and ambitions.
We remain focused on adapting as required to ensure we continue to offer excellent solutions to our customers, develop our product portfolio, improve our performance and bring value to all stakeholders. I fully expect us to make more progress in this regard in 2015.”
The fact book includes interactive information about ArcelorMittal’s steel and mining operations, key financial data, industrial assets as well as details on the company’s main production facilities.
One of the main features of the website is a series of video interviews with senior leaders of the company answering questions on topics ranging from the company’s priorities for this year, the outlook for ArcelorMittal Europe to innovation and steel in the automotive sector.
The site also features a download centre where users can create a customised document by selecting which sections of the annual review or fact book they want to group into one download. This download centre also allows downloading the full documents, as well as the 20F and the legal annual report.
The information disclosed on this website has been prepared in line with the 2014 20F.
A printed version featuring highlights of the annual review will be available in English and French at the company’s annual general meeting which will be held in Luxembourg on Tuesday 5 May 2015. The PDF version can be downloaded here.
Want to know more?
Visit the 2014 annual review and fact book website
That’s why our US team is committed to the long-term sustainability of the iconic Great Lakes – the world’s largest body of fresh water, where 70% of our employees in North America live and work. Spanning the US / Canada border, these world-famous lakes provide drinking water to 35 million people and transport raw materials to steel plants responsible for around 20 million tonnes of steel each year.
The Great Lakes basin is also deeply important for the natural world and provides the rare combination of stream, wetland and coastal habitat for a vast array of flora and fauna.
To help sustain and protect this invaluable habitat, ArcelorMittal teamed up with the National Fish and Wildlife Foundation (NFWF), and a number of public agencies including the US Environmental Protection Agency, to launch the Sustain Our Great Lakes (SOGL) programme in 2007.
Aimed at tackling key ecological issues, the SOGL programme gives out competitive grants for projects that sustain, restore and protect fish, wildlife and habitat in the Great lakes basin.
ArcelorMittal remains the only corporate partner of the programme and sits at the table in all grant-making decisions, working with other programme partners to set project goals and strategy.
And SOGL grantee organisations are producing some great success stories. Key highlights to-date include:
Sediments have been reduced and water quality improved. The result: an increase in the populations of lake sturgeon, brook trout, northern pike, Atlantic salmon, and other species.
"This project is world class”, commented Alan Knight, general manager, corporate responsibility, at ArcelorMittal: “The benefits to the company and community are clear and long lasting”.
But successes don’t stop at supporting the environment. The initiative is also driving key economic and social change. More than 270 jobs were created during 2006-2011, while an investment of $20.7 million, made during the same period, generated an estimated $45 million of additional activity for the local economy. The area has also become more attractive as a leisure and fishing destination.
As the initiative’s sole corporate partner, ArcelorMittal has provided $5.2 million in grants since 2008. Beyond its financial support, ArcelorMittal employees have offered their expertise, resources and personal time to the cause.
Knight added: “The project underscores two things: the power of collaboration with different stakeholders to deliver amazing outcomes, and the importance of holistic approaches to complex systems, which can’t be placed into silos like ‘water’ or ‘nature’ since they’re all part of one system”.
In addition to the environmental and economic benefits for staff, ArcelorMittal’s participation has enabled the company to engage with stakeholders in a way that creates lasting value – raising our visibility as a local corporate leader, and demonstrating our commitment to enriching the communities in which we operate.
This video explains the importance of stakeholder trust, and of research and development, and the need for science and engineering skills for a sustainable economy.
We strive to make steel production more sustainable, minimising its environmental ramifications
ArcelorMittal Tubarão has an inventive approach to recycling
$79 billion direct economic contribution made in 2014
ArcelorMittal, the world’s leading steel and mining company, today publishes its 2014 sustainability report, ‘Steel: the sustainability challenge’. The report launches the company’s 10 new sustainable development outcomes which outlines what the company needs to achieve in order for its steel to be recognised as one of the world’s most sustainable materials. It also details the company’s sustainability highlights, including how ArcelorMittal made an economic contribution to society of $79 billion in 2014.
Chairman and CEO, Lakshmi Mittal, commented: “While we have made good progress on the sustainability agenda over the eight years since the creation of ArcelorMittal, that agenda continues to evolve. We must respond to evolving social and environmental trends, and must do it while also facing lower iron ore prices and increased competition from imported steel. To address this, we have developed a new approach, based on 10 sustainable development outcomes.
“While this format is new, we are not starting from scratch. Some of these ambitions – like health and safety – are well established. Others are more ambitious and will not be achieved overnight.
“We are confident that our 10 sustainable development outcomes provide the right framework to address our material issues and improve performance across the group.”
The 10 sustainable development outcomes, announced in the report, which sit at the core of ArcelorMittal’s sustainable development framework are:
Key highlights of ArcelorMittal’s sustainability progress in 2014 include:
For the first time, the report is aligned with the Global Reporting Initiative’s G4 Sustainability Reporting Guidelines. It is published in an online format and is also fully downloadable.
ArcelorMittal results for the first quarter 2015
ArcelorMittal comes ‘Together for safety’ to hold employee Health and Safety Day
ArcelorMittal publishes 2014 annual review and fact book
Investing in our environment
ArcelorMittal releases 2014 sustainability report
ArcelorMittal is the world’s leading steel and mining company. Guided by a philosophy to produce safe, sustainable steel, it is the leading supplier of quality steel products in all major markets including automotive, construction, household appliances and packaging. ArcelorMittal is present in 60 countries and has an industrial footprint in 19 countries.
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World class landmark and the tallest sculpture in the United Kingdom
ArcelorMittal reported its first quarter 2015 results on May 7.
Visit our annual review 2014 website
Check out our new online sustainability report
Download ArcelorMittal's new investor relations app