Key figures for 3Q 2024

3Q 2024 key highlights:

  • Safety focus: The Company-wide audit of safety by dss+ is now complete. It has provided the Group with a clear set of 6 recommendations which the Company is committed to implement. LTIF2 rate of 0.88x in 3Q 2024 and 0.68x in 9M 2024
  • Structurally higher margins and resilient operating results: Despite the challenging market environment, the Company continues to demonstrate resilient performance benefiting from regional diversification. Operating income of $0.7bn in 3Q 2024 (vs $1.0bn in 2Q 2024); EBITDA of $1.6bn in 3Q 2024 (vs. $1.9bn in 2Q 2024) with EBITDA/t of $118/t in 3Q 2024 ($133/t in 9M 2024) and well above the Group's long-term historical average18, reflecting structural improvements
  • Financial strength: Following the acquisition of c.28.4% stake in Vallourec6 for $1.0bn and $0.3bn share buybacks, net debt increased to $6.2bn at the end of the quarter (gross debt of $11.3bn and cash and cash equivalents of $5.1bn as of September 30, 2024) from $5.2bn as of June 30, 2024
  • Cash flow being reinvested for growth and shareholder returns: Over the past 12 months, the Company has generated investable cash flow7 of $2.8bn with a net $0.6bn allocated to M&A, $1.5bn invested on strategic growth capex projects8 and $2.0bn returns to ArcelorMittal shareholders while maintaining a strong balance sheet
  • Consistent shareholder returns: The Company will continue to return a minimum 50% of post-dividend FCF to shareholders through its share buyback programs. The Company repurchased 1.5% of its outstanding shares during 3Q 2024 (5.7% during the 9M 2024) bringing the total reduction in fully diluted share count to 37% since September 20209. To date, 73m shares from the current 85m share buy-back program have been repurchased

Outlook:

  • Positive free cash flow outlook in 2024 and beyond: FY 2024 capex is expected to be within the previously communicated guidance range ($4.5bn-$5.0bn). The Company expects the year to date investment in working capital to reverse by year end, supporting the outlook for free cash flow generation. The completion of the Company’s strategic growth projects is expected to generate additional EBITDA and investable cash flow in the coming periods10,16. ArcelorMittal continues to optimize its decarbonization pathway to ensure that the Company can remain competitive and achieve an appropriate return on investment
  • Company believes current market conditions are unsustainable: China’s excess production relative to demand is resulting in very low domestic steel spreads (with the majority of producers loss making) and aggressive exports; steel prices particularly in Europe are well below the marginal cost curve. The Company expects apparent demand in our aggregate markets to be higher in 2H 2024 vs. 2H 2023 (reflecting no repeat of the destock that impacted Europe ASC in 2H 2023 and YoY demand growth in India and Brazil). As absolute inventory levels remain low, particularly in Europe, the Company remains optimistic that restocking activity will occur once real demand begins to recover
  • Positive on medium/long term outlook: Through its global asset portfolio, ArcelorMittal is uniquely positioned to capture the anticipated growth in steel demand over the medium/long-term; the Company’s strategic focus is on safety, delivering its growth projects, and consistently returning capital to shareholders whilst maintaining a strong balance sheet
  • Recently completed strategic projects are performing well: The Group‘s portfolio of approved strategic growth projects is estimated to increase EBITDA potential (relative to historical normalized levels) by $1.8bn10
    • Vega CMC (Brazil): Increase galvanized and cold rolled coil capacity: 1st continuous annealed commercial coil delivered in June 2024; 1st coated coil produced in July 2024 and Magnelis® coil in September 2024
    • India renewables: Project combining solar and wind power (1GW) began commissioning in June 2024, and commenced supply of power to AMNS India as of September 2024, with the JV benefiting from green power at a lower cost than accessing the grid
    • Mexico HSM is performing well and expected to achieve targeted profitability in 2024 ($0.3bn EBITDA), despite the disruptions caused by the illegal blockade that impacted 2Q/3Q 2024 operations

 

Financial highlights (on the basis of IFRS1)

“A key milestone during Q3 was the completion of the comprehensive dss+ workplace safety audit. We are now working to define the implementation plan for the six recommendations in an accelerated manner and will provide updates on the progress.

"Economic sentiment remains subdued, but we have delivered a resilient financial performance, reinforcing the structural strength of the Group. Apparent demand is expected to be stronger in the second half of this year compared with 2023, and inventory levels are low, indicating that re-stocking will occur when real demand recovers. The increased level of imports into Europe is a concern and stronger trade measures are urgently required to address this. Similarly, the CBAM needs further strengthening to ensure it fulfills its aim of ensuring European steelmakers can remain competitive versus higher-emissions imports.

“Our free cash flow generation enables us to continue to invest in the business for strategic growth and return capital to shareholders. Our first renewables project is now operating and started supplying power to AMNS India in September. The Vega CMC project is also fully up and running and produced its first Magnelis® coil in September.

“Globally, the medium to long-term outlook for steel is positive, and we are confident that ArcelorMittal will continue to harness its unique geographic presence and strong research and development capability to meet our stakeholders needs and produce smarter steels for people and planet.” Mr Aditya Mittal, ArcelorMittal Chief Executive Officer