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

Key highlights:

• Health and safety performance: Protecting the health and wellbeing of employees is the Company’s overarching priority; LTIF rate of 0.67x in 2Q 2022³ and 0.68x in 1H 2022
• Steel spreads offsetting lower shipments in 2Q 2022: positive price-cost effect offset a -6.3% sequential decrease in steel shipments to 14.4Mt primarily due to the lower shipments in ACIS and Europe
• Operating income: 2Q 2022 operating income of $4.5bn (vs. $4.4bn in 1Q 2022); 1H 2022 operating income of $8.9bn (vs. $7.1bn in 1H 2021)
• EBITDA increased to $5.2bn in 2Q 2022, the fifth successive quarter above the $5bn level; 1H 2022 EBITDA of $10.2bn is +23.5% higher than the same period of 2021
• Strong net income: $3.9bn in 2Q 2022 (vs. $4.1bn in 1Q 2022) includes share of JV and associates net income of $0.6bn (vs. $0.6bn in 1Q 2022); 1H 2022 net income of $8.0bn (vs. $6.3bn in 1H 2021)
• Enhanced share value: 2Q 2022 basic EPS of $4.25/sh; last 12 months ROE¹⁶ of 34%; book value per share¹³ increased to $60/sh following the repurchase of 46.8m shares during the quarter (65.1m in 1H’22)
• Financial strength: Net debt $4.2bn and gross debt of $8.8bn at the end of June 2022
• Continued strong FCF generation: The Company generated $1.7bn of free cash flow (FCF) in 2Q 2022 ($2.6bn net cash provided by operating activities less capex of $0.7bn and dividends paid to minorities) despite a $1.0bn investment in working capital on account of higher prices

Strategic update and outlook:

Proposed acquisition of CSP in Brazil for $2.2bn, presents opportunity for new low carbon steelmaking hub:

• Well invested, world-class assets, access to large-scale deep water port
• Highest quality and low cost 3Mt slab producer in Northeast Brazil
• Attractive synergies and optionality, including the potential for highly competitive low-CO2 steel
• Normalized EBITDA per year of $330 million

Texas HBI plant: a key element of ArcelorMittal’s 12Mt, low CO2 steel, unmatched high quality NAFTA franchise including automotive capabilities:

• Acquisition of voestalpine’s world-class Hot Briquetted Iron (‘HBI’) plant located in Texas now completed; potential to generate > $130 million EBITDA per year
• A key to decarbonizing NAFTA franchise: will supply high quality metallics to EAF - Calvert (a cornerstone of ArcelorMittal NAFTA franchise). Dofasco is transforming to fully DRI-EAF; Mexico Flat is already DRI-EAF

Balanced capital allocation:

• The Company generated $3.2bn of FCF in 1H 2022; $2.3bn was returned to shareholders (via share buybacks and base dividends) and $1.0bn was committed to M&A (primarily the Texas HBI facility)
• Net debt at the end of June 2022 of $4.2bn remained essentially stable compared to 2021 year end at $4.0bn

New buyback:

• The Company announces a new buyback program of 60m shares (~$1.4bn at current share price²³) to be completed by the end of May 2023

Financial highlights (on the basis of IFRS^1,2):

Commenting, Aditya Mittal, ArcelorMittal Chief Executive Officer, said:

"The Company had a strong first half with market conditions supporting a fifth consecutive quarter of EBITDA of over $5 billion. This enabled us to progress against our strategic objectives and continue to transform our business for the net zero economy. We have completed a number of targeted acquisitions reflecting the changing energy and metallic inputs required for low-carbon emissions steelmaking and are also seeking to strengthen our presence in regions that have the ability to produce low-cost green hydrogen such as Brazil where we have today announced the proposed acquisition of one of the country’s lowest-cost slab producers.

The period, however, was overshadowed by the outbreak of war in Ukraine, where we have steel and mining operations, bringing instability and suffering to the country and our 26,000 employees. Globally the conflict is impacting growth and adding further inflationary pressure, which is spilling over into weakening of demand. Despite the more uncertain global macro outlook, our business is well positioned to effectively manage through the cycle. The long-term outlook for steel demand also remains positive, underpinned by the scale of opportunity related to the energy transition and the continuing growth of developing economies."

Second quarter and half year 2022 earnings analyst conference call

ArcelorMittal management 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, 2022 on: Thursday July 28, 2022 at 9.30am US Eastern time; 14.30pm London time and 15.30pm CET.

The dial in numbers are:

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. Segment information presented in this press release is 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. This press release also includes certain non-GAAP financial/alternative performance measures. ArcelorMittal presents EBITDA and EBITDA/tonne, free cash flow (FCF) and ratio of net debt/EBITDA which are non-GAAP financial/alternative performance measures as additional measures to enhance the understanding of its operating performance and evaluate the strength of its cash generating capacity and ability to service debt. The Company’s EBITDA objectives for certain capital expenditure projects are based on the same accounting policies as those applied in the Company’s financial statements prepared in accordance with IFRS. ArcelorMittal also presents Equity book value per share and ROE, calculated as shown in footnotes to this press release. ArcelorMittal believes such indicators are relevant to provide management and investors with additional information. 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 is no longer presenting adjusted net income / (loss) because there have been no adjustments in recent periods. 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. Effective 2Q 2021, ArcelorMittal retrospectively amended its presentation of reportable segments. The results of each mine are accounted for within the steel segment that it primarily supplies. Summary of changes: NAFTA: all Mexico mines; Brazil: Andrade and Serra Azul mines; Europe: ArcelorMittal Prijedor mine (Bosnia and Herzegovina); ACIS: Kazakhstan and Ukraine mines; and Mining: only AMMC and Liberia iron ore mines.
3. LTIF figures presented for 2Q 2022 of 0.67x, 1Q 2022 of 0.69x, and 0.89x for 2Q 2021 exclude ArcelorMittal Italia (which was deconsolidated as from 2Q 2021 onwards).
4. AMNS India has plans to debottleneck operations (steel shop and rolling parts) and achieve capacity of 8.8Mt per annum and medium-term plans to expand and grow to 14Mt per annum and then to 18Mt per annum. The Thakurani mine is operating at full 5.5Mtpa capacity since 1Q 2021, while the second Odisha pellet plant was commissioned and started in September 2021, adding 6Mtpa for a total 20Mtpa of pellet capacity. In addition, in September 2021, AMNS India commenced operations at Ghoraburhani - Sagasahi iron ore mine in Odisha. The mine is set to produce 5.0Mtpa of high-quality iron ore in 2022 and gradually ramp up production to a rated capacity of 7.2Mtpa and contribute significantly to meeting AMNS India’s long-term raw material requirements. In March 2021, AMNS India signed a Memorandum of Understanding ("MoU") with the Government of Odisha in view of building an integrated steel plant with a 12Mtpa capacity in Kendrapara district of state Odisha. A pre-feasibility study report was submitted to the state government in 3Q 2021, and AMNS India is currently engaging with the government for further studies and clearances.
5. AMNS Calvert ("Calvert") has plans to construct a new 1.5Mt EAF and caster to be completed 1H 2023. The joint venture is to invest $775 million. Option to add a further 1.5Mt EAF is being studied
6. ArcelorMittal Mines Canada, otherwise known as ArcelorMittal Mines and Infrastructure Canada.
7. On December 19, 2018, ArcelorMittal signed a $5.5 billion Revolving Credit Facility, with a five-year maturity plus two one-year extension options. During the fourth quarter of 2019, ArcelorMittal executed the option to extend the facility to December 19, 2024. The extension was completed for $5.4 billion of the available amount, with the remaining $0.1 billion remaining with a maturity of December 19, 2023. In December 2020, ArcelorMittal executed the second option to extend the facility, and the new maturity is now extended to December 19, 2025. On April 30, 2021, ArcelorMittal amended its $5.5 billion RCF to align with its sustainability and climate action strategy. As of June 30, 2022, the $5.5 billion revolving credit facility was fully available.
8. XCarb™ is designed to bring together all of ArcelorMittal’s reduced, low and zero-carbon products and steelmaking activities, as well as wider initiatives and green innovation projects, into a single effort focused on achieving demonstrable progress towards carbon neutral steel. Alongside the new XCarb™ brand, we have launched three XCarb™ initiatives: the XCarb™ innovation fund, XCarb™ green steel certificates and XCarb™ recycled and renewably produced for products made via the Electric Arc Furnace route using scrap. The Company is offering green steel using a system of certificates (XCarb® green certificates). These will be issued by an independent auditor to certify tonnes of CO2 savings achieved through the Company’s investment in decarbonization technologies in Europe. Net-zero equivalence is determined by assigning CO2 savings certificates equivalent to CO2 per tonne of steel produced in 2018 as the reference. The certificates will relate to the tonnes of CO2 saved in total, as a direct result of the decarbonization projects being implemented across a number of its European sites.
9. In addition to the AMNS India and Calvert joint ventures, the Company has important investments in China that provide valuable dividend streams and growth optionality. VAMA, our 50:50 joint venture with Hunan Valin, is a state-of-the-art facility focused on rolling steel for high-demanding applications in particular automotive. The business is performing well and plans to expand the current capacity by 40% to 2Mtpa over the next 2 years, financed from its own resources. The investment will allow VAMA to broaden its product portfolio and further enhance its competitiveness. This will in turn enable VAMA to meet the growing demand of high value add solutions from the Chinese automotive / new energy vehicle (NEV) market and propel it to be among the top automotive steel players in China by 2025. ArcelorMittal also owns a 37% interest in China Oriental, one of the largest H-Beam producers in China which has recently upgraded its asset portfolio and benefits from a strong balance sheet position.
10. Other assets include the main listed investment of Erdemir (12%) at market value of $688 million, $935 million and $885 million as of June 30, 2022, March 31, 2022 and December 31, 2021, respectively.
11. Segment “Other & eliminations”, EBITDA result was a loss of $84 million in 2Q 2022, as compared to loss of $158 million in 1Q 2022 principally due to the decrease of the stock margin eliminations driven by the decrease during the quarter of the iron ore market price on intra-group stock sales between steel and mining businesses.
12. Total steel shipments in 1H 2022 were 29.7Mt, -5.8% lower as compared with 31.5Mt in 1H 2021 on a scope adjusted basis. Total steel shipments in 2Q 2022 were 14.4Mt, -9.9% lower as compared with 16Mt in 2Q 2021 on a scope adjusted basis.
13. Equity book value per share is calculated as the Equity attributable to the equity holders of the parent divided by diluted number of shares at the end of the period. 2Q 2022 total equity of $54.0 billion divided by 904 million diluted shares outstanding equals $60/sh. 1Q 2022 total equity of $53.8 billion divided by 949 million diluted shares outstanding equals $57/sh.
14. Strategic capex envelope of $3.65 billion represents total to be spent on strategic projects (listed in Appendix 2b) in the period from 2021 to 2024. Specifically, $0.40 billion of the $3.65 billion has been spent through June 30, 2022. The various estimates in this press release of EBITDA benefit of these strategic capex projects are based on assumptions once projects are ramped up to capacity and assuming prices/spreads generally in line with the averages of the period 2015-2020 period.
15. Blast furnace No.6 (approximately 20% of total Kryvyi Rih capacity), was restarted on April 11, 2022 (to resume low levels of pig iron production). Iron ore production has been steadily increased to ~55% capacity in 2Q 2022.
16. ROE refers to "Return on Equity" which is calculated as trailing twelve-month net income attributable to equity holders of the parent divided by the average equity attributable to the equity holders of the parent over the period. 2Q 2022 ROE of 34% ($16.7 billion / $49.6 billion). 1Q 2022 ROE of 36% ($16.8 billion / $46.8 billion).
17. On May 31, 2022, Acciaierie d’Italia Holding and Ilva signed an amendment to the Ilva lease agreement (with a conditional purchase obligation) to, among other changes, extend the longstop date for the fulfillment of the conditions precedent (and, therefore, the term of the lease of the Ilva business) by 2 years (until May 31, 2024). In parallel, the ArcelorMittal group and Invitalia signed an amendment to their investment agreement to extend the latest date for the second equity injection to May 31, 2024 (to coincide with the latest date for the fulfillment of the conditions precedent for the purchase of the Ilva business assets) and to reflect certain other circumstances. This amendment to the investment agreement confirms Acciaierie d’Italia Holding’s ownership and governance structure until May 2024.
18. On March 30, 2022 Votorantim exercised the put option right it has under its shareholders’ agreement with the Company to sell its entire equity interest in ArcelorMittal Brasil to the Company, following the acquisition of Votorantim S.A.'s long steel business in Brazil in 2018, which became a wholly-owned subsidiary of ArcelorMittal Brasil. The exercise price is calculated pursuant to an agreed formula in the shareholders’ agreement which applies a 6x multiple of ArcelorMittal Brasil Longs Business EBITDA in the four immediately preceding calendar quarters from the date of the put option exercise (subject to certain adjustments, such as the exclusion of any unusual, infrequent or abnormal events ) less an assumed net debt of BRL 6.2 billion times 15%. ArcelorMittal Brasil calculated the put option exercise price in the amount of BRL 840 million, but Votorantim S.A. has indicated that it does not agree with ArcelorMittal Brasil’s calculation of the exercise price. The definition of the final put option exercise price will be subject to the procedure specified in the shareholders' agreement, with arbitration being the ultimate means.
19. On March 17, 2022, ArcelorMittal had announced an investment (which is in the process of final review and approval), with the support of the French government, to create a new production unit for electrical steels at its Mardyck site in the north of France. This investment will create more than 100 direct jobs. With this new unit, which will specialize in the production of electrical steels for the engines of electric vehicles and which complements ArcelorMittal’s existing electrical steels plant in Saint Chély d’Apcher, in the south of France, all of the group's electrical steels will be produced in France, strengthening France’s electromobility secto
20. Following a favorable and unappealable decision issued in May 2022 with respect to taxpayers’ right to register the Pis/Cofins credits over scrap purchases, ArcelorMittal Brasil recorded a gain in the amount of $0.2 billion for the previous periods.
21. The Company has introduced a 50% increase in the STI link to safety performance (with fatalities acting as a circuit breaker); increased the safety target in STIP to 15%, and LTIP to 10%; and included ESG objectives in LTIP.
22. Shares issued and outstanding as of March 31, 2022 reflected the cancellation of 45 million treasury shares and an increase of 18.3 million in treasury shares from share buybacks in the first quarter of 2022. Shares issued and outstanding as of June 30, 2022 reflected the cancellation of 60 million treasury shares and an increase of 46.8 million in treasury shares from share buybacks in the second quarter of 2022. In addition, following the dividend paid in June 2022, the $608 million aggregate principal amount of the Mandatorily Convertible Notes due 2023 outstanding as of June 30, 2022, divided by the maximum conversion price of $10.64 per share; equals approximately 57 million shares following conversion.
23. Based on share price as at 26.07.22 of $22.90/sh.

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.