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[1] for the three-month period ended March 31, 2019.

  • Analysts slides – EN – PDF
  • Press release – EN – FR – PDF
  • Analysts Webcast – 15.30 CET – English
  • Q&A – EN – PDF

Highlights:

  • Health and safety: LTIF rate[2] of 1.14x in 1Q 2019
  • Operating income decreased to $0.8bn in 1Q 2019 as compared to $1.0bn in 4Q 2018 and $1.6bn in 1Q 2018
  • EBITDA of $1.7bn in 1Q 2019, 15.3% lower as compared to $2.0bn in 4Q 2018, primarily reflecting a negative price-cost effect; 1Q 2019 EBITDA down 34.2% YoY
  • Steel shipments of 21.8Mt in 1Q 2019, up 7.9% vs. 4Q 2018 and up 2.2% vs. 1Q 2018
  • 1Q 2019 iron ore shipments of 13.8Mt (stable YoY), of which 9.2Mt shipped at market prices (+0.4% YoY)
  • Gross debt of $13.4bn as of March 31, 2019 as compared to $12.6bn as of December 31, 2018. Net debt increased to $11.2bn as of March 31, 2019 due to impact of IFRS 16[3] lease accounting ($1.2bn). Excluding IFRS 16 Leases impact, net debt would be $10.0bn as of March 31, 2019 as compared to $10.2bn as of December 31, 2018
  • Maintaining an investment grade credit rating through the cycle remains ArcelorMittal’s financial priority, with a target to reduce net debt to below $7bn (previous target of $6bn adjusted to reflect the impact of IFRS 16

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

(USDm) unless otherwise shown 1Q 19 4Q 18 3Q 18 2Q 18 1Q 18
Sales 19,188 18,327 18,522 19,998 19,186
Operating income 769 1,042 1,567 2,361 1,569
Net income attributable to equity holders of the parent 414 1,193 899 1,865 1,192
Basic earnings per share (US$) 0.41 1.18 0.89 1.84 1.17
           
Operating income/ tonne (US$/t) 35 51 76 109 73
EBITDA 1,652 1,951 2,729 3,073 2,512
EBITDA/ tonne (US$/t) 76 96 133 141 118
Steel-only EBITDA/ tonne (US$/t) 56 79 119 127 101
           
Crude steel production (Mt) 24.1 22.8 23.3 23.2 23.3
Steel shipments (Mt) 21.8 20.2 20.5 21.8 21.3
Own iron ore production (Mt) 14.1 14.9 14.5 14.5 14.6
Iron ore shipped at market price (Mt) 9.2 10.0 8.5 10.0 9.1

Commenting, Mr. Lakshmi N. Mittal, ArcelorMittal Chairman and CEO, said:

"Our first quarter results reflect the challenging operating environment the industry has faced in recent months. Profitability has been impacted by lower steel pricing due to weaker economic activity and continued global overcapacity, as well as rising raw material costs as a result of supply-side developments in Brazil.

"We continue to face a challenge from high levels of imports, particularly in Europe, where safeguard measures introduced by the European Commission have not been fully effective. Although we are somewhat encouraged by the firmer price environment in China, this is not being reflected in Europe where in order to adapt to the current market environment we have recently announced annualized production cuts of three million tonnes in our flat steel operations. It is important there is a level playing field to address unfair competition, and this includes a green border adjustment to ensure that imports into Europe face the same carbon costs as producers in Europe.

"We remain focussed on our own initiatives to improve performance through delivery of our Action2020 plan. Generating positive free cash flow, demonstrating progress in our efforts to further strengthen our balance sheet and improve shareholder returns are the priority.”

First quarter 2019 earnings analyst conference call

ArcelorMittal will hold a conference call hosted by Heads of Finance and Investor Relations for members of the investment community to discuss the three-month period ended March 31, 2019 on: Thursday May 9, 2019 at 9.30am US Eastern time; 2.30pm London time and 3.30pm CET.

The dial in numbers are:

Location Toll free dial in numbers Local dial in numbers Participant
UK local: 0800 0515 931 +44 (0)203 364 5807 48013763#
US local 1 86 6719 2729 +1 24 0645 0345 48013763#
US (New York): 1 86 6719 2729 + 1 646 663 7901 48013763#
France: 0800 914780 +33 1 7071 2916 48013763#
Germany: 0800 965 6288 +49 692 7134 0801 48013763#
Spain: 90 099 4930 +34 911 143436 48013763#
Luxembourg: 800 26908 +352 27 86 05 07 48013763#

A replay of the conference call will be available for one week by dialing: +49 (0) 1805 2047 088; Access code 2523725#

Forward-Looking Statements

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 (Commission 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 latest Annual Report on Form 20-F on file 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.

Footnotes

[1] The financial information in this press release has been prepared consistently with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and as adopted by the European Union. The interim financial information included in this announcement has also been also prepared in accordance with IFRS applicable to interim periods, however this announcement does not contain sufficient information to constitute an interim financial report as defined in International Accounting Standard 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 financial/alternative performance measures. ArcelorMittal presents EBITDA, and EBITDA/tonne, which are non-GAAP financial/alternative performance measures and calculated as shown in the Condensed Consolidated Statement of Operations, as additional measures to enhance the understanding of operating performance. ArcelorMittal believes such indicators are relevant to describe trends relating to cash generating activity and provides management and investors with additional information for comparison of the Company’s operating results to the operating results of other companies. ArcelorMittal also presents net debt and change in working capital as additional measures to enhance the understanding of its financial position, changes to its capital structure and its credit assessment. ArcelorMittal also presents free cash flow (FCF), which is a non-GAAP financial/alternative performance measure calculated as shown in the Condensed Consolidated Statement of Cash flows, because it believes it is a useful supplemental measure for evaluating the strength of its cash generating capacity. The Company also presents the ratio of net debt to EBITDA for the twelve months ended December 31, 2018 which investors may find useful in understanding the company's ability to service its debt. Non-GAAP financial/alternative performance measures should be read in conjunction with, and not as an alternative for, ArcelorMittal's financial information prepared in accordance with IFRS. Such non-GAAP/alternative performance measures may not be comparable to similarly titled measures applied by other companies.

[2] Health and safety performance inclusive of ArcelorMittal Italia and related facilities (“ArcelorMittal Italia”) (consolidated as from November 1, 2018) was 1.14x for 1Q 2019 and 0.91 for 4Q 2018. Health and safety figures excluding ArcelorMittal Italia were 0.66x for 1Q 2019 as compared to 0.70x for 4Q 2018. Previously published 4Q 2018 health and safety performance figures for ArcelorMittal (inclusive of ArcelorMittal Italia) and ArcelorMittal Italia have not been shown in the table for comparative purposes. From 1Q 2019 onwards, the methodology and metrics used to calculate health and safety figures for ArcelorMittal Italia have been harmonized with those of ArcelorMittal.

[3] ArcelorMittal has applied IFRS 16 Leases as of January 1, 2019. Due to the transition option selected, the prior-period data has not been restated. IFRS 16 Leases provides a single lessee accounting model requiring lessees to recognize right-of-use assets and lease liabilities for all non-cancellable leases except for short-term leases and low value assets. The right-of-use assets are recognized as property, plant and equipment and measured on January 1, 2019 at an amount equal to the lease liability recognized as debt (short term $0.3 billion and long term $0.9 billion impact as of January 1, 2019) and measured on the basis of the net present value of remaining lease payments. Net debt increased accordingly by $1.2 billion in 1Q 2019. The recognition of the lease expense in EBITDA for leases previously accounted for as operating leases is replaced by a depreciation expense related to the right-of-use assets and an interest expense reflecting the amortization of the lease liability. IFRS 16 contributed to a positive EBITDA impact of $56 million (majority in segment others) in 1Q 2019. In addition, cash payments relating to the repayment of the principal amount of the lease liability are presented in the consolidated statements of cash flows as outflows from financing activities while lease payments for operating leases were previously recognized as outflows from operating activities.

About ArcelorMittal

ArcelorMittal is the world's leading steel and mining company, with a presence in 60 countries and primary steelmaking facilities in 18 countries. In 2019, ArcelorMittal had revenues of $70.6 billion and crude steel production of 89.8 million metric tonnes, while iron ore production reached 57.1 million metric tonnes. Our goal is to help build a better world with smarter steels. Steels made using innovative processes which use less energy, emit significantly less carbon and reduce costs. Steels that are cleaner, stronger and reusable. Steels for electric vehicles and renewable energy infrastructure that will support societies as they transform through this century. With steel at our core, our inventive people and an entrepreneurial culture at heart, we will support the world in making that change. This is what we believe it takes to be the steel company of the future. 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: http://corporate.arcelormittal.com/

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