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

2019 key highlights:

• Against a challenging market backdrop in 2019, ArcelorMittal generated $2.4bn free cash flow (net cash provided by operating activities of $6.0bn less capex of $3.6bn) and reported a net loss of $2.5bn (adjusted net income of $0.3bn, excluding impairment and exceptional items)[2]
• Ended the year with gross debt of $14.3bn and net debt of $9.3bn (the lowest level since the merger); targeting achievement of the $7bn net debt objective by end of 2020
• Achieved further $0.4bn of Action2020 gains, with identified new cost improvement opportunities totalling $1bn to be targeted in 2020
• Completed the acquisition of Essar Steel India in partnership with Nippon Steel

Outlook for 2020:

• There are signs that the real demand slowdown is beginning to stabilise, and the supportive inventory environment means that we expect apparent steel consumption in our core markets to grow in 2020
• Certain cash needs of the business expected to be approximately $4.5bn (vs. $5.0bn in 2019, primarily due to lower planned capex)

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

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

“2019 was a very tough year, clearly reflected in our significantly reduced profitability. However, our cash generation remained strong helping to reduce net debt to the lowest ever level. This demonstrates the contribution of our Action2020 programme which was designed to ensure ArcelorMittal can be cash flow positive through all aspects of the steel cycle. We expect to make further deleveraging progress this year.

“Maintaining a strong balance sheet and reaching our net debt target is a clear priority for ArcelorMittal. Having now completed the acquisition of Essar Steel India in partnership with Nippon Steel, we have also secured a new opportunity for the group in the fast-growing Indian market. The asset is performing well and offers considerable brownfield potential aligned with the country’s ambition to triple crude steel production over the next ten years.

“We also continue to invest strategically in research and development, including lower carbon steel-making processes and low carbon products. Steel has the potential to significantly reduce its carbon emissions, but new policy will be vital. In this regard we are encouraged by the position adopted by the new European Commission, including their support for a carbon border equalisation.

“Although market conditions remain challenging, there are encouraging early signs of improvement particularly in our core markets of US, Europe and Brazil. With inventory levels having reached a very low level following a period of de-stocking, we are seeing customers return to the market, supporting an improved pricing environment.”

Fourth quarter 2019 earnings analyst conference call

ArcelorMittal management (including CEO and CFO) will host a conference call for members of the investment community to present and comment on the three-month and twelve-month periods ended December 31, 2019 on: Thursday February 6, 2020 at 9.30am US Eastern time; 14.30pm London time and 15.30pm CET.

The dial in numbers are:

To listen to the webcast recording, please visit the results section on our website once the event has finished.

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. Segment information presented in this press release are prior to inter-segment eliminations and certain adjustments made to operating result of the segments to reflect corporate costs, income from non-steel operations (e.g., logistics and shipping services) and the elimination of stock margins between the segments. 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 Adjusted net (loss) / income as it believes it is a useful measure for the underlying business performance excluding impairment and exceptional items. 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 last twelve-month period, 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] Impairment charges for 12M 2019 were $1.9 billion related to impairment of the fixed assets of ArcelorMittal USA ($1.3 billion) following impairment assessments performed in the second and fourth quarters of 2019, primarily resulting from decreases in the near-term average selling prices assumptions, remedy asset sales for the ArcelorMittal Italia acquisition ($0.5 billion) and $0.1 billion impairment costs in South Africa. Impairment charges net of purchase gains for 12M 2018 were $810 million and included $0.7 billion primarily related to Ilva and the remedy asset sales for the Ilva acquisition and the agreed remedy package required for the approval of the Votorantim acquisition5. Impairment charges for 4Q 2019 were $830 million and related to impairment of the fixed assets of ArcelorMittal USA ($0.7 billion) following impairment assessments performed during the fourth quarter of 2019, primarily resulting from a further decrease in the near-term average selling price assumption and $0.1 billion in South Africa. Impairment charges for 3Q 2019 were nil. Impairment charges net of purchase gains for 4Q 2018 of $0.2 billion include $0.4 billion impairment expenses for ArcelorMittal Italia remedies and $0.2 billion purchase gains on the ArcelorMittal Italia acquisition. Exceptional items for FY 2019 were charges of $828 million as compared to charges of $117 million for FY 2018. Exceptional items for FY 2019 primarily include inventory related charges in NAFTA and Europe following a period of exceptionally weak steel pricing. Exceptional items for FY 2018 primarily consisted of $113 million in charges related to a blast furnace dismantling in Florange (France), $60 million in charges related to the new collective labour agreement in the US (including a signing bonus), a $146 million provision taken in 1Q 2018 in respect of a litigation case that was paid in 3Q 20186 offset in part by PIS/COFINS tax credits13 related to prior periods recognized in Brazil of $202 million. Exceptional items for 4Q 2019 of $828 million primarily include inventory related charges in NAFTA and Europe following a period of exceptionally weak steel pricing. Exceptional items for 4Q 2018 were $29 million primarily related to income of $202 million for PIS/COFINS tax credits related to prior periods recognized in Brazil, offset in part by $113 million in charges related to a blast furnace dismantling in Florange (France), and $60 million related to the new collective labour agreement in the US (including a signing bonus).