Key highlights:
- Health and safety focus: Protecting employee health and wellbeing remains an overarching priority of the Company; LTIF2 rate of 0.73x in 2Q 2023 and 0.70x in 1H 2023
- Improved operating results: A positive price-cost effect, offset in part by a marginal sequential decline in steel shipments to 14.2Mt, drove an improvement in 2Q 2023 operating income to $1.9bn (vs. $1.2bn in 1Q 2023); 1H 2023 operating income of $3.1bn vs. $1.3bn in 2H 20225
- Robust per-tonne profitability: EBITDA increased to $2.6bn in 2Q 2023 (vs. $1.8bn in 1Q 2023) with 2Q 2023 EBITDA/t rising to $183/t (vs. $126/t in 1Q 2023); 1H 2023 EBITDA of $4.4bn vs. $3.9bn in 2H 20225
- Higher net income: $1.9bn in 2Q 2023 (vs. $1.1bn in 1Q 2023) includes share of JV and associates net income of $0.4bn (vs. $0.3bn in 1Q 2023); 1H 2023 net income of $3.0bn (vs. $1.3bn in 2H 2022)5
- Enhanced share value: 2Q 2023 basic EPS of $2.21/sh; last 12 months rolling ROE3 of 10.3%; book value per share4 now $66/sh following the repurchase of 5.7m shares during the quarter
- Financial strength: The Company ended June 30, 2023 with net debt of $4.5bn, $0.7bn lower than the end of March 31, 2023, despite ongoing share buyback ($0.2bn) and dividends ($0.2bn). Gross debt of $10.5bn and cash and cash equivalents of $5.9bn as of June 30, 2023 (compared to $11.5bn and $6.3bn, respectively, as of March 31, 2023)
- Continued strong FCF generation: The Company generated $1.0bn of free cash flow (FCF) in 2Q 2023 ($2.1bn net cash provided by operating activities less capex of $1.1bn and dividends paid to minorities)
Strategic update and outlook:
- Progress in climate action gathering momentum:
- Funding support: received European Commission (EC) approvals of the government funding support for our Spain, Belgium and France decarbonization projects; awaiting EC approvals for German government funding support
- Projects advancing: >200 dedicated employees; Pre-FEED stage for DRI-EAF projects ongoing/near completion; preparing to move to FEED in DRI/EAF projects and commitments with core process equipment suppliers to lock schedule for supply
- Technology advancements: plans announced between ArcelorMittal and John Cockerill to construct an industrial-scale low temperature, direct electrolysis plant (Volteron™) targeted to produce in phase 1 between 40-80ktpa of iron plates, starting in 2027
- XCarb® progress: Our XCarb® recycled and renewably produced steel9 offering is gaining momentum, and will be produced by ArcelorMittal North America to supply General Motors
- Focused on executing our growth plans and consistently applying our capital allocation and return policy:
- In addition to paying in June 2023 the first installment of the $0.44/sh base dividend, the Company has repurchased 24.8 million shares so far in 2023
- Recent acquisitions (ArcelorMittal Pecém6 (Brazil) and ArcelorMittal Texas HBI) and completed strategic capex projects (Mexico hot strip mill) are performing at levels above assumed normalized profitability13
- Planned expansion of the AMNS India Hazira plant to ~15Mt capacity by 2026 progressing well; CGL4 on track for completion in 3Q 2023 to provide platform to launch our Magnelis product in the Indian market for the growing renewables and solar sectors