• Analyst & investor call registration - link
• Earnings Release - EN - PDF
• Analysts slides – EN – PDF
• Analyst model - XLS

Key highlights:

• Health and safety focus: Protecting employee health and wellbeing remains an overarching priority of the Company; LTIF² rate of 0.73x in 2Q 2023 and 0.70x in 1H 2023
• Improved operating results: A positive price-cost effect, offset in part by a marginal sequential decline in steel shipments to 14.2Mt, drove an improvement in 2Q 2023 operating income to $1.9bn (vs. $1.2bn in 1Q 2023); 1H 2023 operating income of $3.1bn vs. $1.3bn in 2H 2022⁵
• Robust per-tonne profitability: EBITDA increased to $2.6bn in 2Q 2023 (vs. $1.8bn in 1Q 2023) with 2Q 2023 EBITDA/t rising to $183/t (vs. $126/t in 1Q 2023); 1H 2023 EBITDA of $4.4bn vs. $3.9bn in 2H 2022⁵
• Higher net income: $1.9bn in 2Q 2023 (vs. $1.1bn in 1Q 2023) includes share of JV and associates net income of $0.4bn (vs. $0.3bn in 1Q 2023); 1H 2023 net income of $3.0bn (vs. $1.3bn in 2H 2022)⁵
• Enhanced share value: 2Q 2023 basic EPS of $2.21/sh; last 12 months rolling ROE³ of 10.3%; book value per share⁴ now $66/sh following the repurchase of 5.7m shares during the quarter
• Financial strength: The Company ended June 30, 2023 with net debt of $4.5bn, $0.7bn lower than the end of March 31, 2023, despite ongoing share buyback ($0.2bn) and dividends ($0.2bn). Gross debt of $10.5bn and cash and cash equivalents of $5.9bn as of June 30, 2023 (compared to $11.5bn and $6.3bn, respectively, as of March 31, 2023)
• Continued strong FCF generation: The Company generated $1.0bn of free cash flow (FCF) in 2Q 2023 ($2.1bn net cash provided by operating activities less capex of $1.1bn and dividends paid to minorities)

Strategic update and outlook:

• Progress in climate action gathering momentum:
  • Funding support: received European Commission (EC) approvals of the government funding support for our Spain, Belgium and France decarbonization projects; awaiting EC approvals for German government funding support
  • Projects advancing: >200 dedicated employees; Pre-FEED stage for DRI-EAF projects ongoing/near completion; preparing to move to FEED in DRI/EAF projects and commitments with core process equipment suppliers to lock schedule for supply
  • Technology advancements: plans announced between ArcelorMittal and John Cockerill to construct an industrial-scale low temperature, direct electrolysis plant (Volteron™) targeted to produce in phase 1 between 40-80ktpa of iron plates, starting in 2027
  • XCarb® progress: Our XCarb® recycled and renewably produced steel⁹ offering is gaining momentum, and will be produced by ArcelorMittal North America to supply General Motors
• Focused on executing our growth plans and consistently applying our capital allocation and return policy:
• In addition to paying in June 2023 the first installment of the $0.44/sh base dividend, the Company has repurchased 24.8 million shares so far in 2023
• Recent acquisitions (ArcelorMittal Pecém⁶ (Brazil) and ArcelorMittal Texas HBI) and completed strategic capex projects (Mexico hot strip mill) are performing at levels above assumed normalized profitability¹³
• Planned expansion of the AMNS India Hazira plant to ~15Mt capacity by 2026 progressing well; CGL4 on track for completion in 3Q 2023 to provide platform to launch our Magnelis product in the Indian market for the growing renewables and solar sectors

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

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

“We have delivered a strong set of financials in the first half of the year, which reflect the improved market conditions and also the positive impact of recent strategic acquisitions. Both ArcelorMittal Pecém in Brazil and ArcelorMittal Texas HBI in the United States are making a valuable contribution, generating above expected EBITDA. Meanwhile organic growth projects that will enhance our ability to produce higher added-value products in high-growth markets, as well as investments in our lower-carbon supply chains, are starting to demonstrate their potential.

“We are making further strategic progress on our decarbonization agenda. Encouragingly, we have now received funding approval from the European Commission for our transformation projects in Belgium, Spain and France. This is an important milestone and we are now engaged in discussions with governments on the cost and availability of the clean energy needed to make these projects viable. On the technology front, we are encouraged by the progress in direct electrolysis which has enabled us to commit to building the world’s first low-temperature iron electrolysis pilot plant. We continue to see growing demand from customers for our XCarb products and earlier this week the design for the Paris 2024 Olympic and Paralympic torch was unveiled, which is being made with our reduced-carbon steel. The torch has a beautiful, intricate design and reflects the admirable ambition of Paris 2024 to halve the carbon footprint compared with previous games.

“Looking ahead, the company is in a good position and focused on delivering further strategic progress in the second half.”

Second quarter 2023 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 period ended June 30, 2023 on: Thursday July 27, 2023, at 9.30am US Eastern time; 14.30pm London time and 15.30pm CET.

Participants will need to pre-register to receive dial-in details and an individual pin-code to access the call using the link below:

https://services.choruscall.it/DiamondPassRegistration/register?confirmationNumber=5379332&linkSecurityString=7019f3968

You can also listen to the live audio webcast via this link: https://interface.eviscomedia.com/player/1151/

Please visit the results section on our website to listen to the reply once the event has finished https://corporate.arcelormittal.com/investors/results

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 results 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/LTM EBITDA which are non-GAAP financial/alternative performance measures, as additional measures to enhance the understanding of its operating performance. ArcelorMittal also presents Equity book value per share and ROE 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 not presenting adjusted net income/(loss) because there have been no adjustments in recent periods. The Company’s guidance as to its working capital release (or the change in working capital included in net cash provided by operating activities) for 2023 is based on the same accounting policies as those applied in the Company’s financial statements prepared in accordance with IFRS. Non-GAAP financial/alternative performance measures should be read in conjunction with, and not as an alternative to, ArcelorMittal's financial information prepared in accordance with IFRS.
2. LTIF refers to lost time injury frequency rate equals lost time injuries per 1,000,000 worked hours, based on own personnel and contractors. LTIF figures: 2Q 2023 0.73; 1Q 2023 0.64x; 2Q 2022 0.67; 1H 2023 0.70 and 1H 2022 0.68.
3. ROE refers to "Return on Equity" which is calculated as trailing twelve-month net income (excluding impairment charges and exceptional items) attributable to equity holders of the parent divided by the average equity attributable to the equity holders of the parent over the period. Twelve months rolling ROE at 2Q 2023 of 10.3% ($5.5 billion / $53.7 billion). Twelve months rolling ROE at 1Q 2023 of 14.2% ($7.6 billion / $53.3 billion).
4. 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 2023 total equity of $55.7 billion divided by 839 million diluted shares outstanding equals $66/sh. 1Q 2023 total equity of $54.0 billion divided by 844 million diluted shares outstanding equals $64/sh.
5. 2H 2022 EBITDA of $3.9 billion is equal to operating income of $1.3 billion plus $1.3 billion of depreciation, plus impairment of $1.0 billion and exceptional items of $0.3 billion.
6. On March 9, 2023, ArcelorMittal announced that following receipt of customary regulatory approvals it has completed the acquisition of Companhia Siderúrgica do Pecém (‘CSP’) in Brazil for an enterprise value of approximately $2.2 billion. CSP has since been renamed ArcelorMittal Pecém and is a world-class operation, producing high-quality slab at a globally competitive cost. Its facility, located in the state of Ceará in northeast Brazil was commissioned in 2016. It operates a three million tonne capacity blast furnace and has access via conveyors to the Port of Pecém, a large-scale, deep-water port located 10 kilometers from the plant. The acquisition offers significant operational and financial synergies and brings with it the potential for further expansions, such as the option to add primary steelmaking capacity (including direct reduced iron) and rolling and finishing capacity. Given its location, ArcelorMittal Pecém also presents an opportunity to create a new low-carbon steelmaking hub, capitalizing on the state of Ceará’s ambition to develop a low-cost green hydrogen hub in Pecém.
7. ArcelorMittal Mines Canada, otherwise known as ArcelorMittal Mines and Infrastructure Canada.
8. For further disclosure on the Company's alignment on EU Taxonomy please review the Integrated annual review published on the group's website: https://annualreview2022.arcelormittal.com/
9. 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 baseline. 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.
10. On March 30, 2022, Votorantim S.A. (“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 long steel business in Brazil in 2018. The value of the put option is currently the subject of arbitration proceeding brought by Votorantim. ArcelorMittal paid Votorantim the undisputed amount of the put option value ($179 million) in January 2023.
11. The Company sold a 7.85% stake in Erdemir starting in late December 2022, continuing into the first quarter of 2023, generating total proceeds of $0.6 billion.
12. On December 19, 2018, ArcelorMittal signed a $5.5 billion Revolving Credit Facility ("RCF"), 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. On December 20, 2022, the RCF was amended as part of the transition from Libor to risk free rates. Loans in USD are now based on Term SOFR instead of Libor. As of June 30, 2023, the $5.5 billion revolving credit facility was fully available.
13. Estimate of additional contribution to EBITDA, based on assumptions including synergies and once ramped up to capacity and assuming prices/spreads generally in line with long term averages.

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.