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 results1 for the three-month and nine-month periods ended September 30, 2020
- Health and safety: LTIF rate2 of 0.95x in 3Q 2020 as compared to 0.77x in 2Q 2020; 0.92x in 9M 2020
- Improved operating performance in 3Q 2020 reflects a gradual recovery in steel end markets (in particular automotive) following the severe impacts of COVID-19 lockdowns on economic activity in 2Q 2020 as well as stronger mining segment performance
- Operating income of $0.7bn in 3Q 2020 (including $0.6bn net reversal of impairments3) as compared to an operating loss of $0.3bn in 2Q 2020 (which included $0.2bn exceptional items3)
- EBITDA of $0.9bn in 3Q 2020, 27.4% higher as compared to $0.7bn in 2Q 2020, primarily reflects: the impacts on the steel business of 17.5% higher shipments and an improved sales mix (proportionally more sales to automotive customers), offset in part by a negative price-cost effect; and the impacts of higher marketable iron ore prices (+26.2%) and market priced iron ore shipments (+7.5%) driving improved mining segment results
- Net loss of $0.3bn in 3Q 2020 as compared to net loss of $0.6bn in 2Q 2020; excluding impairment items partially offset by deferred tax expense (each related to the agreed sale of ArcelorMittal USA3), adjusted net loss in 3Q 2020 was $0.2bn as compared to adjusted net loss of $0.3bn in 2Q 2020 (which excluded exceptional items)
- Free cash inflow of $1.3bn in 3Q 2020 (net cash provided by operating activities of $1.8bn less $0.5bn capex) includes a working capital release of $1.1bn. 9M 2020 working capital release of $0.6bn with full year 2020 guidance of between $0.6bn - $1.0bn
- Gross debt of $13.7bn and net debt of $7.0bn as of September 30, 2020; net debt reduced by $0.9bn during the quarter primarily driven by positive free cash flow offset in part by forex impacts; net debt lower by $3.7bn as compared to $10.7bn as of September 30, 2019
- Deleveraging complete: The Company has long prioritized its $7bn net debt target; having now achieved this level, the Company will now prioritize cash returns to shareholders, starting with the $500m share buyback program initiated on September 28, 2020 (subsequently completed on October 30, 2020); the Company intends to present an updated distribution policy at the time of full year 2020 results
- $2bn asset portfolio optimization program complete: The agreed sale of 100% of the shares of ArcelorMittal USA (which is expected to close within 4Q 2020) completes the Company’s asset portfolio optimization target 9 months ahead of schedule
- Strategic repositioning of North American platform: The Company maintains a strong presence in the NAFTA market with cost competitive assets in Canada/Mexico, state of the art finishing assets at Calvert (with the announced intention to build an EAF), and technology leading R&D capabilities
- Green Steel: The Company will offer its customers green steel9 by way of a certification system linked to CO2 savings, achieved through investment in decarbonization technologies, starting in 2020, with plans to scale up this offer to 600kt by 2022
- 2050 net zero group carbon emissions target: A group-wide commitment focused on Hydrogen-DRI and Smart Carbon technologies which if supported by appropriate policy framework can make carbon-neutral steel making a reality
Financial highlights (on the basis of IFRS):
Commenting, Mr. Lakshmi N. Mittal, ArcelorMittal Chairman and CEO, said:
“The third quarter marked an improved operating performance for the Group with steel markets recovering gradually from the very challenging second quarter after the ending of lockdowns. All steel segments saw improved demand with Brazil and ACIS showing particularly encouraging profitability improvement. Our mining segment also delivered a strong performance taking advantage of the higher iron-ore price environment and outperforming production targets.
The quarter was also characterized by strong cash flow generation and the achievement of some important strategic milestones. In this very tough environment, we take considerable satisfaction from the fact that our deleveraging program and asset disposal program are now complete. Following the agreed sale of ArcelorMittal USA, we can now prioritize returning cash to shareholders.
During the quarter we also announced a Group 2050 net zero target and the launch of a green steel product for the first time. We remain hopeful that we will start to see the introduction of the policy required to unlock potential and deliver real progress in the coming years.
The recent rise in COVID-19 cases worldwide makes it prudent to remain cautious about the outlook and we should be prepared for further volatility. However, our success to date in protecting our people, assets, profitability and cashflow throughout the crisis puts us in a good position to take advantage of further economic recovery. We have also learned valuable lessons in how to work smarter and we are determined to continue these efforts to continuously improve our productivity and profitability on an ongoing basis.
Finally, I would like to take this opportunity to thank all our employees who continue to demonstrate great drive, commitment and resilience to keep ArcelorMittal inventing and producing the ever-smarter steels that will be required for the future.”
Third quarter 2020 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 nine-month periods ended September 30, 2020 on: Thursday November 5, 2020 at 9.30am US Eastern time; 14.30pm London time and 15.30pm CET.
The dial in numbers are:
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.
 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. 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 the full year 2020 is based on the same accounting policies as those applied in the Company’s financial statements prepared in accordance with IFRS. ArcelorMittal also presents Adjusted net (loss) / income as it believes it is a useful measure for the underlying business performance excluding impairment items, exceptional items and derecogniton 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 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.
 Excluding the impact of ArcelorMittal Italia, the LTIF was 0.56x for 3Q 2020 as compared to 0.50x for 2Q 2020 and 0.82x for 3Q 2019.
 Impairment items for 3Q 2020 were gains of $556 million, consisted of partial reversal of previously recorded impairment charges following the announced sale of ArcelorMittal USA ($660 million) and an impairment charge of $104 million related to the permanent closure of a blast furnace and steel plant in Krakow (Poland). In accordance with IFRS, immediately before the initial classification as held for sale, the Company ensured that the carrying amount of the divested business is measured in accordance with the applicable IFRS as of September 30, 2020. Therefore, the Company determined the recoverable amount of tangible assets based on the Fair Value Less Cost of Disposal (“FVLCD”), which was calculated using the market approach. As a result, the Company identified a reversal of $660 million of impairment losses recognized in the prior fiscal year. Exceptional items for 3Q 2020 and 3Q 2019 were nil. Exceptional items in 2Q 2020 of $221 million include inventory related charges in NAFTA. Impairment net reversals for 9M 2020 were $464 million and primarily relate to the partial reversal of previously recorded impairment charges following the announced sale of ArcelorMittal USA ($660 million), offset in part by impairment charges of $104 million following of permanent closure of a blast furnace and steel plant in Krakow (Poland) and the permanent closure of the coke plant in Florange (France), at the end of April 2020 ($92 million). Impairment charges for 9M 2019 were $1.1 billion related to the remedy asset sales for the ArcelorMittal Italia acquisition ($0.5 billion) and impairment of the fixed assets of ArcelorMittal USA ($0.6 billion).
 The Company is offering green steel using a system of 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.
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/http://corporate.arcelormittal.com/