• Earnings Release - EN - PDF
• Analysts slides – EN – PDF
• Analyst slides appendix - EN - PDF
• Analyst model - XLS
• Analysts webcast replay – Link

Key Highlights:

• Health and safety performance: Protecting the health and wellbeing of employees remains the Company’s overarching priority; LTIF rate³ of 0.89x in 2Q 2021 and 0.83x in 1H 2021
• Significantly improved operating performance in 2Q 2021, with the continuing demand recovery supporting a further positive evolution of steel spreads and 2.4% sequential increase in steel shipments to 16.1Mt (vs. scope adjusted⁴ 6Mt in 1Q 2021)
• 2Q 2021 operating income of $4.4bn compares to $2.6bn in 1Q 2021; 1H 2021 operating income of $7.1bn
• EBITDA of $5.1bn in 2Q 2021, the strongest quarter since 2008 and 55.8% higher than 1Q 2021; 1H 2021 EBITDA of $8.3bn represents the strongest half year performance since 2008
• Share of JV and associates net income in 2Q 2021 further improved to $0.6bn, reflecting continued strong performance at AMNS India⁸ and AMNS Calvert⁹; 1H 2021 share of JV and associates net income $1.0bn
• Net income of $4.0bn in 2Q 2021 vs. $2.3bn in 1Q 2021; 1H 2021 net income of $6.3bn (vs. adjusted net loss in 1H 2020 of $0.9bn)⁷ represents the strongest half year performance since 2008
• Free cash flow¹⁸ of $1.7bn generated in 2Q 2021 ($2.3bn net cash provided by operating activities less capex of $0.6bn) includes a further $1.9bn investment in working capital on account of higher market prices; this brings the 1H 2021 free cash flow generated to $2.0bn ($3.3bn net cash provided by operating activities less capex of $1.2bn less minority dividends $0.1bn) despite a total $3.5bn investment in working capital
• Gross debt declined to $9.2bn (vs. $11.4bn as end of 1Q 2021 and $12.3bn as end of 2020) and net debt declined to $5.0bn (vs. $5.9bn as end of 1Q 2021 and $6.4bn as end of 2020)
• Since April 1, 2021, the Company returned $1.6bn to shareholders through share buybacks and the payment of the annual base dividend. Total returns to shareholders since September 2020 now total $2.8bn

Strategic update and outlook:

• Leadership on decarbonization: New Group CO2 reduction target of 25% by 2030; new Europe CO2 reduction target of 35% (previously 30%) by 2030 includes the acceleration of DRI-EAF investments and the world’s first full scale zero carbon-emissions steel plant at Sestao, Spain; the new group decarbonization plan requires an estimated gross investment (pre-government funding) of $10bn
• Capex update: FY 2021 capex is expected to increase to $3.2bn from previous guidance of $2.9bn to reflect the impacts of higher volumes and capacity utilization – the Company’s operating plan (including the number of tools utilized) has changed to reflect the strength of the demand environment
• Demand outlook improving: The Company has upgraded its global apparent steel consumption (ASC) forecast in 2021 vs. 2020 from +7.5% to +8.5% (from previous growth estimate of +4.5% to +5.5%)
• New $2.2bn share buy-back program: The Company will return the $1.2bn proceeds from the redeemed Cleveland Cliffs preference shares and has decided to advance $1bn as part of its prospective 2022 capital return to shareholders (equivalent to 50% of 1H 2021 FCF) as a share buy back program to be completed by the end of 2021

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

Note: As previously announced, effective 2Q 2021, ArcelorMittal has amended its presentation of reportable segment to report the operations of AMMC and Liberia within the Mining segment. The results of each other mine are accounted for within the steel segments that it primarily supplies; As from 2Q 2021 onwards ArcelorMittal Italia is deconsolidated and shown as a joint venture.

Commenting, Mr. Aditya Mittal, ArcelorMittal Cheif Executive Officer, said:

“In addition to our half year results, we have today also published our second group Climate Action Report, which sets out our intent to be at the forefront of the transition to net zero in our sector. This intent is reflected in the new targets announced in the report – a new group-wide target of a 25% reduction in carbon emissions by 2030, and an increase in the target for our European business, to 35% by 2030. These targets are the most ambitious in our sector and build on the progress we have already made this year. In recent weeks we announced plans for ArcelorMittal to have the world’s first full-scale zero carbon-emissions steel plant. Earlier this year we launched XCarb™, our new brand for all low-carbon initiatives including green steel certificates¹³, low carbon products, and the XCarb™ innovation fund which is investing in new technologies associated with the decarbonization of the steel industry. To achieve net zero by 2050, accelerating progress in the next decade is vital and ArcelorMittal is committed to seeing how we can move faster, working collaboratively with stakeholders in the regions we operate.”

“On the financial side, the second quarter has seen a continued strong recovery backdrop alongside a sustained lean inventory environment. This resulted in even healthier spreads in our core markets than in the first three months of the year, supporting the best quarterly and half year result we have reported since 2008. This has enabled us to further improve our balance sheet and deliver on our commitment to return cash to shareholders. Our performance is clearly very welcome after the unprecedented disruption the business and our people faced in 2020. I would like to thank all our employees again for the way in which they managed this volatility and have been able to quickly bring production back online to maximize the opportunity from the current extraordinary market conditions."

“Looking forward, we see the demand outlook further improving into the second half and have therefore upgraded our steel consumption forecasts for the year.”

Second quarter and half year 2021 earnings analyst conference call

ArcelorMittal management including Aditya Mittal, Chief Executive Officer and Genuino Christino, Chief Financial Officer will host a conference call for members of the investment community to present and comment on the three-month and six-month period ended June 30, 2021 on: Thursday July 29, 2021 at 9.30am US Eastern time; 14.30pm London time and 15.30pm CET.

The dial in numbers are:

To listen to the earnings release webcast live, please visit the results section on our website here. 

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 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 income / (loss) as it believes it is a useful measure for the underlying business performance excluding impairment items, exceptional items and derecognition of deferred tax assets on disposal of ArcelorMittal USA. 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 has revised the definition of free cash flow to include dividends paid to minority shareholders in order to reflect the measure it will use to determine dividends that will be paid under its new dividend policy. 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. Such non-GAAP/alternative performance measures may not be comparable to similarly titled measures applied by other companies. 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.

[2] New segmentation reporting: Following the Company’s steps to streamline and optimize the business, primary responsibility for captive mining operations have been moved to the Steel segments (which are primary consumers of the mines' output). The Mining segment will retain primary responsibility for the operation of ArcelorMittal Mines Canada (AMMC) and Liberia and will continue to provide technical support to all mining operations within the Group. As a result, effective 2Q 2021, ArcelorMittal has retrospectively amended its presentation of reportable segments to reflect this organizational change, as required by IFRS. Only the operations of AMMC and Liberia are reported within the Mining segment. The results of each other mine are accounted for within the steel segment that it primarily supplies. Summary of changes: NAFTA: all Mexico mines (for 2020 and 2021 onwards) and Hibbing, Minorca, Princeton mines (each quarter of 2020, as they were included in the ArcelorMittal USA assets sold to Cliffs in Dec 2020); Brazil: Andrade and Serra Azul mines; Europe: ArcelorMittal Prijedor mine (Bosnia and Herzegovina); ACIS: Kazakhstan and Ukraine mines; and Mining: to include only AMMC and Liberia iron ore mines.

[3] LTIF figures presented for 2Q 2021 of 0.89x excludes ArcelorMittal Italia (deconsolidated as from 2Q 2021 onwards) and ArcelorMittal USA (no longer in scope as sold to Cleveland Cliffs on December 9, 2020) and compares with 0.78x in 1Q 2021.

[4] 2Q 2021 steel shipments of 16.1Mt as compared to 15.6Mt in 1Q 2021 (which excludes 0.9Mt of steel shipments for ArcelorMittal Italia).

[7] See Appendix 5 for reconciliation of adjusted net income /(loss).

[8] AMNS India has plans to debottleneck operations (steel shop and rolling parts) and achieve capacity of 8.6Mt per annum and medium-term plans to expand and grow to 14Mt per annum. The newly acquired Thakurani mines is now operating at full 5.5Mtpa capacity since 1Q 2021, while the second Odisha pellet plant is expected for completion early 3Q 2021, adding 6Mtpa for a total 20Mtpa of pellet capacity. AM/NS India signed a Memorandum of Understanding (MoU) with the Government of Odisha to set-up an integrated steel plant with a 12Mtpa capacity in Kendrapara district of state Orissa. Prefeasibility studies are at an advanced stages and expected to be submitted to Odisha government in 3Q 2021.

[9] Calvert has plans to construct a new 1.5Mt EAF & caster to be completed 1H 2023. The JV is to invest $775 million.

[18] The Company has revised the definition of free cash flow to include dividends paid to minority shareholders in order to reflect the measure it will use to determine dividends that will be paid under its new dividend policy. The comparative figures for free cash flow under the prior definition of cash flow from operations less capex were inflows in 2Q 2021 of $1,743 million, $378 million for 1Q 2021, $(99) million for 2Q 2020, $2,121 million for 1H 2021 and $(355) million for 1H 2020.

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.