Key figures for 2Q 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 IFRS 1,2)

"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." Mr Aditya Mittal, ArcelorMittal Chief Executive Officer