Key figures for 3Q 2020

Highlights

  • Health and safety: LTIF rate2 of 0.95x in 3Q 2020 as compared to 0.77x in 2Q 2020; 0.92x in 9M 2020
  • Improved operating performance in 3Q 2020 reflects a gradual recovery in steel end markets (in particular automotive) following the severe impacts of COVID-19 lockdowns on economic activity in 2Q 2020 as well as stronger mining segment performance
  • Operating income of $0.7bn in 3Q 2020 (including $0.6bn net reversal of impairments3) as compared to an operating loss of $0.3bn in 2Q 2020 (which included $0.2bn exceptional items3)
  • EBITDA of $0.9bn in 3Q 2020, 27.4% higher as compared to $0.7bn in 2Q 2020, primarily reflects: the impacts on the steel business of 17.5% higher shipments and an improved sales mix (proportionally more sales to automotive customers), offset in part by a negative price-cost effect; and the impacts of higher marketable iron ore prices (+26.2%) and market priced iron ore shipments (+7.5%) driving improved mining segment results
  • Net loss of $0.3bn in 3Q 2020 as compared to net loss of $0.6bn in 2Q 2020; excluding impairment items partially offset by deferred tax expense (each related to the agreed sale of ArcelorMittal USA3), adjusted net loss in 3Q 2020 was $0.2bn as compared to adjusted net loss of $0.3bn in 2Q 2020 (which excluded exceptional items)
  • Free cash inflow of $1.3bn in 3Q 2020 (net cash provided by operating activities of $1.8bn less $0.5bn capex) includes a working capital release of $1.1bn. 9M 2020 working capital release of $0.6bn with full year 2020 guidance of between $0.6bn - $1.0bn
  • Gross debt of $13.7bn and net debt of $7.0bn as of September 30, 2020; net debt reduced by $0.9bn during the quarter primarily driven by positive free cash flow offset in part by forex impacts; net debt lower by $3.7bn as compared to $10.7bn as of September 30, 2019

Strategic update:

  • Deleveraging complete: The Company has long prioritized its $7bn net debt target; having now achieved this level, the Company will now prioritize cash returns to shareholders, starting with the $500m share buyback program initiated on September 28, 2020 (subsequently completed on October 30, 2020); the Company intends to present an updated distribution policy at the time of full year 2020 results
  • $2bn asset portfolio optimization program complete: The agreed sale of 100% of the shares of ArcelorMittal USA (which is expected to close within 4Q 2020) completes the Company’s asset portfolio optimization target 9 months ahead of schedule
  • Strategic repositioning of North American platform: The Company maintains a strong presence in the NAFTA market with cost competitive assets in Canada/Mexico, state of the art finishing assets at Calvert (with the announced intention to build an EAF), and technology leading R&D capabilities
  • Green Steel: The Company will offer its customers green steel9 by way of a certification system linked to CO2 savings, achieved through investment in decarbonization technologies, starting in 2020, with plans to scale up this offer to 600kt by 2022

Financial highlights (on the basis of IFRS[1]):

“The third quarter marked an improved operating performance for the Group with steel markets recovering gradually from the very challenging second quarter after the ending of lockdowns. All steel segments saw improved demand with Brazil and ACIS showing particularly encouraging profitability improvement. Our mining segment also delivered a strong performance taking advantage of the higher iron-ore price environment and outperforming production targets." Mr. Lakshmi N. Mittal, ArcelorMittal Chairman and CEO