ArcelorMittal reports first quarter 2023 results
Luxembourg, May 4, 2023 - 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 ended March 31, 2023.
1Q 2023 Key highlights:
- Health and safety focus: Protecting the health
and wellbeing of the employees remains an overarching priority of
the Company. Moving to a ‘predict-and-prevent’ culture with a
particular focus on proactively reporting – and responding to –
instances with the specific potential for serious injuries or
fatalities (proactive PSIFs)2; LTIF2 rate of 0.64x in 1Q 2023
- Operating performance improved: 1Q 2023
operating income of $1.2bn (vs. operating loss of $0.3bn3,4 in 4Q
2022); EBITDA of $1.8bn in 1Q 2023 (vs. $1.3bn in 4Q 2022) and
EBITDA/t of $126/t in 1Q 2023 (vs. $100/t in 4Q 2022)
- Enhanced share value: 1Q 2023 basic EPS of
$1.28/sh vs. $0.30/sh in 4Q 2022, rolling twelve month ROE5 of
14.2%; 1Q 2023 book value per share6 of $64/sh
- Net income: $1.1bn in 1Q 2023 (vs. $0.3bn7 in
4Q 2022) includes share of JV and associates net income of $0.3bn
(vs. $0.1bn in 4Q 2022)
- Financial strength: The Company ended March
2023 with net debt of $5.2bn (vs. $2.2bn at the end of December
2022) primarily due to M&A outflow (mainly the $2.2bn
acquisition of ArcelorMittal Pecém formerly known as CSP18), share
buyback ($0.5bn) and seasonal investment in working capital
($0.8bn). Gross debt of $11.5bn and cash and cash equivalents of
$6.3bn as of March 31, 2023 (compared to $11.7bn and $9.4bn,
respectively, as of December 31, 2022)
- A platform for investment and consistent capital
returns:
- Recent acquisitions (ArcelorMittal
Pecém (Brazil) and ArcelorMittal Texas HBI) and completed strategic
capex projects (Mexico hot strip mill) performing well relative to
assumed normalized levels of profitability
- Capex in 1Q 2023 of $0.9bn is in
line with our full year guidance of within the range of
$4.5bn-$5.0bn
- The Company has repurchased 19.1m
shares so far in 2023, completing its previously announced buyback
program and bringing the total reduction in diluted share count
since September 30, 20208 to 31%
- Following the approval granted by
shareholders at the 2023 AGM, the Company announces its intention
to repurchase up to 85 million shares through May 2025. The level
of repurchases will reflect (and is subject to) the level of
post-dividend FCF generated over the period. The Company’s capital
return policy defines that a minimum 50% of post-dividend annual
FCF is returned to shareholders through buybacks.
- $0.44/sh base dividend to be paid in
2 equal instalments of $0.22/share in June 2023 and December
2023
- Continued progress in climate action: In April
2023, the Company announced that ArcelorMittal Brasil will form a
renewable energy joint venture partnership with Casa dos Ventos to
develop a 554MW wind power project in northeast Brazil
Financial highlights (on the basis of
IFRS1):
|
(USDm) unless otherwise shown |
1Q 23 |
4Q 22 |
3Q 22 |
2Q 22 |
1Q 22 |
|
Sales |
18,501 |
16,891 |
18,975 |
22,142 |
21,836 |
|
Operating income(loss) |
1,192 |
(306) |
1,651 |
4,494 |
4,433 |
|
Net income attributable to equity holders of the parent |
1,096 |
261 |
993 |
3,923 |
4,125 |
|
Basic earnings per common share (US$) |
1.28 |
0.30 |
1.11 |
4.25 |
4.28 |
|
|
|
|
|
|
|
|
Operating income(loss) /tonne (US$/t) |
82 |
(24) |
122 |
313 |
289 |
|
EBITDA |
1,822 |
1,258 |
2,660 |
5,163 |
5,080 |
|
EBITDA /tonne (US$/t) |
126 |
100 |
196 |
359 |
331 |
|
|
|
|
|
|
|
|
Crude steel production (Mt) |
14.5 |
13.2 |
14.9 |
14.6 |
16.3 |
|
Steel shipments (Mt) |
14.5 |
12.6 |
13.6 |
14.4 |
15.3 |
|
Total group iron ore production (Mt) |
10.8 |
10.7 |
10.6 |
12.0 |
12.0 |
|
Iron ore production (Mt) (AMMC and Liberia only) |
6.7 |
7.5 |
6.9 |
7.3 |
6.9 |
|
Iron ore shipment (Mt) (AMMC and Liberia only) |
7.4 |
6.9 |
6.9 |
7.5 |
6.7 |
|
|
|
|
|
|
|
|
Number of shares outstanding (issued shares less treasury shares)
in millions |
787 |
805 |
816 |
847 |
893 |
Commenting, Aditya Mittal, ArcelorMittal
Chief Executive Officer, said:
“Market conditions improved as anticipated in the first quarter,
with the end of customer destocking supporting apparent steel
consumption growth and a rebound in steel spreads. This, alongside
better general economic sentiment, resulted in good growth in first
quarter profits as well as higher EBITDA per tonne. The
improvements we have seen in market conditions are not yet fully
reflected in our results due to pricing lags, and we expect a
further increase in profitability in the second quarter.
We remain confident in our ability to generate healthy free cash
flow this year and have therefore announced a new share buyback
today, while continuing to invest in growth and the energy
transition. During the first quarter we completed the acquisition
of CSP and, also in Brazil, announced a new renewable energy joint
venture, which aims to secure and decarbonize a considerable
proportion of ArcelorMittal Brazil’s future electricity needs.
Improving group safety performance remains the highest priority.
We continue to intensify efforts to improve our results, including
evolving towards a “predict and prevent” culture centered around
the recorded number of accidents that have the potential to result
in serious injuries. I am cautiously optimistic we will be able to
demonstrate the progress expected of us this year.
To conclude, the first quarter has unfolded as we expected.
Geopolitical and economic uncertainty remains, but ArcelorMittal
continues to demonstrate its ability to perform in all market
conditions which bodes well for the remainder of this
year.”Sustainable development and safety
performanceHealth and safety – Own personnel and
contractors lost time injury frequency rate2
Our priority in all that we do is to protect the safety, health
and wellbeing of all our employees. We aspire to become a fatality
free and severe injury free company.
The lost time injury frequency rate (“LTIFR”) was 0.64x in the
first quarter of 2023 (“1Q 2023”) as compared to 0.86x in the
fourth quarter of 2022 (“4Q 2022”) and 0.69x in the first quarter
of 2022 (“1Q 2022”).
Our ability to monitor and analyse potential severe injuries and
fatalities is key as it provides a deeper understanding of how
near-miss incidents arise and can be avoided. The Company is moving
to a ‘predict-and-prevent’ culture which involves focusing its
attention on proactive rather than reactive KPIs, with a particular
focus on proactively detecting and identifying the Potential for
Serious Injuries or Fatalities (“PSIF”). PSIFs are precursors of
severe accidents: unsafe situations or events, that we detect
proactively, before they could lead to a fatality or injury. We are
analyzing the quality of the investigations and corresponding
actions, identifying trends and risk, and sharing any learnings
across the Company.Own personnel and contractors – Lost
Time Injury Frequency rate
|
Lost time injury frequency rate |
1Q 23 |
4Q 22 |
3Q 22 |
2Q 22 |
1Q 22 |
|
NAFTA |
0.09 |
0.18 |
0.27 |
0.28 |
0.19 |
|
Brazil |
0.34 |
0.14 |
0.05 |
0.14 |
0.10 |
|
Europe |
1.03 |
1.14 |
1.03 |
0.99 |
1.13 |
|
ACIS |
0.63 |
1.07 |
0.50 |
0.81 |
0.61 |
|
Mining |
0.24 |
0.61 |
0.30 |
0.30 |
2.19 |
|
Total |
0.64 |
0.86 |
0.54 |
0.67 |
0.69 |
Sustainable development highlights – driving the
decarbonization of the steel
industry16:
- On April 18, 2023, ArcelorMittal announced that its Brazilian
entity, ArcelorMittal Brasil, will form a joint venture partnership
(‘JV’) with Casa dos Ventos, one of Brazil’s largest developers and
producers of renewable energy projects, to develop a 554 MW wind
power project. ArcelorMittal Brasil will hold a 55% stake in the
JV, with Casa dos Ventos holding the remaining 45%. The c. $0.8
billion project aims to secure and decarbonise a considerable
proportion of ArcelorMittal Brazil’s future electricity needs,
pursuant to a 20-year power purchase agreement to be entered into
with the JV for the supply of electricity. It is estimated it will
provide 38% of ArcelorMittal’s Brasil’s total electricity needs in
2030. The JV will be equity accounted and ArcelorMittal’s total
equity investment will be c. $0.15 billion.
- On February 17, 2023, the European Commission approved funding
of €450 million to build a DRI-EAF facility in Spain and €55
million for the production of near zero- emission steel with green
hydrogen in a demonstration plant at ArcelorMittal Hamburg.
Analysis of results for 1Q 2023 versus 4Q 2022 and 1Q
2022Following the end of destocking, total steel shipments
in 1Q 2023 were +14.4% higher at 14.5Mt as compared with 12.6Mt for
4Q 2022. Steel shipments in NAFTA increased by +21.6%, in Europe
increased by +14.0%, in Brazil increased by +11.3% (in part due to
ArcelorMittal Pecém acquisition following its consolidation on
March 9, 2023) and ACIS increased by +6.1% (although still impacted
by the ongoing war in Ukraine). Excluding the impacts of
ArcelorMittal Pecém, steel shipments were +12.7% higher as compared
to 4Q 2022.
Total steel shipments in 1Q 2023 were -5.8% lower as compared
with 15.3Mt for 1Q 2022 primarily due to lower steel shipments in
ACIS (-27.5%, impacted by ongoing effects of the Ukraine war),
Europe (-7.0%), Brazil (-3.3%, including the benefit of the
consolidation of ArcelorMittal Pecém from March 9, 2023), offset by
an improvement in NAFTA (+15.8%). Excluding the impacts of
ArcelorMittal Pecém and Ukraine, steel shipments were -4.1% lower
as compared to 1Q 2022.
Sales in 1Q 2023 were $18.5 billion as compared to $16.9 billion
for 4Q 2022 and $21.8 billion for 1Q 2022. As compared to 4Q 2022,
the +9.5% increase in sales was primarily due to higher steel
shipment volumes (as discussed above) offset in part by lower
average steel selling prices (-2.7%). Sales in 1Q 2023 were -15.3%
lower as compared to 1Q 2022 primarily due to lower average steel
selling prices (-13.3%) and lower steel shipments (-5.8%).
Depreciation for 1Q 2023 was $630 million as compared to $636
million for 4Q 2022 and $647 million in 1Q 2022. Full year 2023
depreciation is expected at ~$2.6 billion.
Impairment charges for 1Q 2023 and 1Q 2022 were nil. Impairment
charges for 4Q 2022 of $1.0 billion related to ArcelorMittal Kryvyi
Rih3.
Exceptional items for 1Q 2023 and 1Q 2022 were nil. Exceptional
items for 4Q 2022 of $0.1 billion related to a gain following the
settlement of a claim by ArcelorMittal for a breach of a supply
contract.
Operating income for 1Q 2023 was $1.2 billion as compared to an
operating loss in 4Q 2022 of $0.3 billion (impacted by impairment
charges as discussed above) and operating income of $4.4 billion in
1Q 2022. The improvement in operating income compared to 4Q 2022
reflected improving steel shipment volumes and lower costs
(including energy) and improved mining performance.
Income from associates, joint ventures and other investments for
1Q 2023 was $318 million as compared to $121 million in 4Q 2022 and
$559 million in 1Q 2022. 1Q 2023 results improved as compared to 4Q
2022 with higher contributions from AMNS India, Calvert and
European investees. 1Q 2022 included a $117 million Erdemir annual
dividend income.
Net interest expense in 1Q 2023 was $64 million as compared to
$72 million in 4Q 2022 and higher than $51 million in 1Q 2022,
reflecting higher interest income offset in part by the issuance,
at the end of 3Q 2022 and in 4Q 2022, of new notes bearing higher
interest rates.
Foreign exchange and other net financing loss in 1Q 2023 was
$117 million as compared to a gain of $449 million in 4Q 2022 and a
loss of $140 million in 1Q 2022. 1Q 2023 included a foreign
exchange gain of $31 million as compared to a foreign exchange gain
of $497 million in 4Q 2022 (following the -9.4% depreciation of the
US dollar vs. the euro during that quarter) and a loss of $46
million in 1Q 2022.
ArcelorMittal recorded an income tax expense of $189 million
(including deferred tax benefit of $93 million) in 1Q 2023, as
compared to an income tax benefit of $35 million (including
deferred tax benefit of $126 million) in 4Q 2022 and an income tax
expense of $555 million (including deferred tax benefit of $140
million) in 1Q 2022.
ArcelorMittal recorded a net income in 1Q 2023 of $1,096 million
as compared to $261 million7 in 4Q 2022 and $4,125 million for 1Q
2022.
ArcelorMittal's basic earnings per common share for 1Q 2023 was
higher at $1.28 as compared to $0.307 in 4Q 2022 and $4.28 in 1Q
2022.
Analysis of segment
operations
NAFTA
|
(USDm) unless otherwise shown |
1Q 23 |
4Q 22 |
3Q 22 |
2Q 22 |
1Q 22 |
|
Sales |
3,350 |
2,923 |
3,438 |
3,653 |
3,760 |
|
Operating income |
455 |
331 |
616 |
817 |
1,054 |
|
Depreciation |
(126) |
(127) |
(114) |
(93) |
(93) |
|
Exceptional items |
— |
98 |
92 |
— |
— |
|
EBITDA |
581 |
360 |
638 |
910 |
1,147 |
|
Crude steel production (kt) |
2,176 |
2,025 |
2,126 |
2,043 |
2,077 |
|
Steel shipments* (kt) |
2,843 |
2,338 |
2,339 |
2,453 |
2,456 |
|
Average steel selling price (US$/t) |
994 |
1,021 |
1,191 |
1,317 |
1,322 |
* NAFTA steel shipments include shipments sourced by NAFTA from
Group subsidiaries and sold to the Calvert JV that are eliminated
on consolidation.
NAFTA segment crude steel production increased by +7.4% to 2.2Mt
in 1Q 2023, as compared to 2.0Mt in 4Q 2022, mainly due to recovery
following planned maintenance in the prior quarter and increased by
+4.7% as compared to 1Q 2022 which was impacted by labor actions in
Long Products Canada.
Steel shipments in 1Q 2023 increased by +21.6% to 2.8Mt, as
compared to 2.3Mt in 4Q 2022 due to improved demand in the flat
operations (both Mexico and Canada) as well as higher volumes of
slabs sourced for Calvert. Shipments increased by +15.8% as
compared to 1Q 2022, primarily due to higher steel shipments in
Mexico.
Sales in 1Q 2023 increased by +14.6% to $3.4 billion, as
compared to $2.9 billion in 4Q 2022 primarily on account of higher
steel shipments offset in part by lower average steel selling
prices (-2.7%). Sales declined by -10.9% in 1Q 2023 as compared to
1Q 2022 primarily on account of lower average steel selling prices
(-24.8%) offset in part by higher steel shipment volumes
(+15.8%).
Exceptional items for 4Q 2022 of $0.1 billion related to a gain
following the settlement of a claim by ArcelorMittal for a breach
of a supply contract.
Operating income in 1Q 2023 increased by +37.7% to $455 million
as compared to $331 million in 4Q 2022 (which benefited from an
exceptional gain following a legal settlement) and -56.8% lower as
compared to $1,054 million in 1Q 2022.
EBITDA in 1Q 2023 of $581 million was +61.3% higher as compared
to $360 million in 4Q 2022, primarily due to the benefit of higher
steel shipment volumes, positive price-cost effect and improved
contribution from ArcelorMittal Texas HBI. EBITDA in 1Q 2023 was
-49.3% lower as compared to $1,147 million in 1Q 2022 mainly due to
a negative price-cost effect offset in part by higher volumes
(+15.8%).
Brazil13,18
|
(USDm) unless otherwise shown |
1Q 23 |
4Q 22 |
3Q 22 |
2Q 22 |
1Q 22 |
|
Sales |
3,068 |
2,894 |
3,486 |
3,986 |
3,366 |
|
Operating income |
323 |
302 |
598 |
1,201 |
674 |
|
Depreciation |
(72) |
(60) |
(57) |
(71) |
(58) |
|
EBITDA |
395 |
362 |
655 |
1,272 |
732 |
|
Crude steel production (kt) |
3,052 |
2,783 |
2,969 |
3,085 |
3,040 |
|
Steel shipments (kt) |
2,937 |
2,639 |
2,837 |
3,003 |
3,037 |
|
Average steel selling price (US$/t) |
978 |
1,036 |
1,137 |
1,234 |
1,039 |
Brazil segment crude steel production increased by +9.7% to
3.1Mt in 1Q 2023 as compared to 4Q 2022, primarily due to
ArcelorMittal Pecém following its consolidation from March 9, 2023.
On a scope adjusted basis excluding the impact of ArcelorMittal
Pecém 1Q 2023 crude production was marginally higher by +1.1% as
compared to 4Q 2022 and -7.4% lower as compared to 1Q 2022 due to
lower demand from export markets.
Steel shipments of 2.9Mt in 1Q 2023 were +11.3% higher as
compared to 2.6Mt in 4Q 2022, in part due to ArcelorMittal Pecém,
and -3.3% lower as compared to 1Q 2022. On a scope adjusted basis
(i.e. excluding ArcelorMittal Pecém), steel shipments increased by
+3.0% as compared to 4Q 2022 and decreased by -10.5% as compared to
1Q 2022, due to lower exports.
Sales in 1Q 2023 increased by +6.0% to $3.1 billion as compared
to $2.9 billion in 4Q 2022, primarily due to an +11.3% increase in
steel shipments offset in part by -5.6% decrease in average steel
selling prices. Sales in 1Q 2023 were -8.8% lower than $3.4 billion
at 1Q 2022 primarily on account of -3.3% decline in shipments
(primarily exports) and lower average steel selling prices
(-5.9%).
Operating income in 1Q 2023 of $323 million was +6.9% higher as
compared to $302 million in 4Q 2022 and -52.0% lower than $674
million in 1Q 2022.
EBITDA in 1Q 2023 increased by +9.3% to $395 million as compared
to $362 million in 4Q 2022, due to higher steel shipments, a
positive price-cost effect and contribution from ArcelorMittal
Pecém, partially offset by a non-cash charge of $60 million related
to an update of a previously recorded provision. EBITDA in 1Q 2023
was -46.0% lower than $732 million in 1Q 2022 primarily due to
negative price-cost effect and lower steel shipments as described
above.
Europe
|
(USDm) unless otherwise shown |
1Q 23 |
4Q 22 |
3Q 22 |
2Q 22 |
1Q 22 |
|
Sales |
10,903 |
10,077 |
10,694 |
13,449 |
13,043 |
|
Operating income(loss) |
377 |
(10) |
158 |
2,063 |
2,081 |
|
Depreciation |
(294) |
(316) |
(300) |
(326) |
(326) |
|
Exceptional items |
— |
— |
(473) |
— |
— |
|
EBITDA |
671 |
306 |
931 |
2,389 |
2,407 |
|
Crude steel production (kt) |
7,779 |
6,956 |
7,998 |
8,261 |
8,689 |
|
Steel shipments (kt) |
7,752 |
6,802 |
7,079 |
7,967 |
8,334 |
|
Average steel selling price (US$/t) |
1,055 |
1,085 |
1,150 |
1,292 |
1,218 |
Europe segment crude steel production increased by +11.8% to
7.8Mt in 1Q 2023 as compared to 7.0Mt in 4Q 2022. As apparent
demand conditions have improved following the aggressive destock in
2H 2022, the Company has gradually restarted previously curtailed
capacity during the quarter to meet demand. Crude steel production
was -10.5% lower as compared to 8.7Mt in 1Q 2022 mainly due to
weaker demand.
In late March 2023, the Company was impacted by incidents that
temporarily disabled a blast furnace at Gijon, Spain and a blast
furnace at Dunkirk, France. No injuries were reported, and the
Company is focused on ensuring the furnaces are restored and
restarted in a safe and measured manner, with production not
expected to return to normal levels until June 2023. The Company is
making every effort to supply customers from its mills across
Europe, including the sourcing of materials from the Group's
operations in Brazil, South Africa and India.
Steel shipments increased by +14.0% to 7.8Mt in 1Q 2023 as
compared to 6.8Mt in 4Q 2022 due to improved activity following the
end of destocking. Shipments declined by -7.0% as compared to 8.3Mt
in 1Q 2022 primarily due to weaker demand.
Sales in 1Q 2023 increased by +8.2% to $10.9 billion, as
compared to $10.1 billion in 4Q 2022, due to a +14.0% increase in
steel shipments offset in part by -2.7% lower average selling
prices. Sales declined by -16.4% as compared to $13.0 billion in 1Q
2022 primarily due to lower steel shipments (-7.0%) and lower
average steel selling prices (-13.4%).
Operating income in 1Q 2023 was $377 million as compared to an
operating loss of $10 million in 4Q 2022 and operating income of
$2,081 million in 1Q 2022.
EBITDA in 1Q 2023 of $671 million increased as compared to $306
million in 4Q 2022, mainly due to higher steel shipments (+14.0%)
and lower energy costs. EBITDA in 1Q 2023 decreased by -72.1% as
compared to $2,407 million in 1Q 2022 due to a negative price-cost
effect, lower shipments (-7.0%) and a negative translation
effect.
ACIS
|
(USDm) unless otherwise shown |
1Q 23 |
4Q 22 |
3Q 22 |
2Q 22 |
1Q 22 |
|
Sales |
1,445 |
1,229 |
1,569 |
1,484 |
2,086 |
|
Operating (loss)income |
(176) |
(1,198) |
(55) |
43 |
280 |
|
Depreciation |
(72) |
(65) |
(93) |
(106) |
(105) |
|
Impairment items |
— |
(1,026) |
— |
— |
— |
|
EBITDA |
(104) |
(107) |
38 |
149 |
385 |
|
Crude steel production (kt) |
1,483 |
1,394 |
1,842 |
1,261 |
2,452 |
|
Steel shipments (kt) |
1,500 |
1,414 |
1,675 |
1,218 |
2,071 |
|
Average steel selling price (US$/t) |
741 |
720 |
773 |
925 |
855 |
ACIS segment crude steel production in 1Q 2023 was +6.4% higher
at 1.5Mt as compared to 1.4Mt in 4Q 2022 mainly due to higher
production in Ukraine following improved electricity availability.
Crude steel production in 1Q 2023 was -39.5% below 2.5Mt in 1Q 2022
primarily due to lower steel production in Ukraine driven by the
ongoing war.
Steel shipments in 1Q 2023 increased by +6.1% to 1.5Mt as
compared to 1.4Mt in 4Q 2022 primarily due to recovery of shipments
in South Africa after the holiday season. Shipments were -27.5%
lower as compared to 2.1Mt in 1Q 2022, primarily due to lower
production in Ukraine driven by the ongoing war.
Sales in 1Q 2023 increased by +17.5% to $1.4 billion as compared
to $1.2 billion in 4Q 2022, primarily due to higher steel shipments
and higher average steel selling prices.
Impairment losses for 4Q 2022 of $1.0 billion relate to the
ArcelorMittal Kryvyi Rih’s assets3.
Operating loss in 1Q 2023 of $176 million compared to an
operating loss in 4Q 2022 of $1,198 million (impacted by impairment
as discussed above) and an operating income of $280 million in 1Q
2022.
EBITDA loss of $104 million in 1Q 2023 was broadly stable as
compared to EBITDA loss of $107 million in 4Q 2022, due to higher
steel shipments offset by a negative price-cost effect (primarily
related to coal purchases). EBITDA loss of $104 million in 1Q 2023
compared to an EBITDA gain of $385 million in 1Q 2022 primarily due
to the impact of the war in Ukraine and lower average steel selling
prices.
Mining
|
(USDm) unless otherwise shown |
1Q 23 |
4Q 22 |
3Q 22 |
2Q 22 |
1Q 22 |
|
Sales |
904 |
716 |
742 |
1,005 |
933 |
|
Operating income |
374 |
255 |
254 |
463 |
511 |
|
Depreciation |
(56) |
(57) |
(57) |
(64) |
(56) |
|
EBITDA |
430 |
312 |
311 |
527 |
567 |
|
|
|
|
|
|
|
|
Iron ore production (Mt) |
6.7 |
7.5 |
6.9 |
7.3 |
6.9 |
|
Iron ore shipment (Mt) |
7.4 |
6.9 |
6.9 |
7.5 |
6.7 |
Note: Mining segment comprises iron ore operations of
ArcelorMittal Mines Canada and ArcelorMittal Liberia.
Iron ore production decreased in 1Q 2023 by -9.9% to 6.7Mt as
compared to 7.5Mt in 4Q 2022 and was -3.3% lower than 6.9Mt in 1Q
2022. This primarily reflected lower iron ore production in
ArcelorMittal Mines Canada (AMMC)10 in 1Q 2023 as compared to 4Q
2022.
Iron ore shipments were +6.9% higher at 7.4Mt in 1Q 2023 as
compared to 6.9Mt in 4Q 2022 primarily due to recovery of port
operations in Canada impacted by severe storms during December
2022. 1Q 2023 iron ore shipments were +11.3% higher as compared to
6.7Mt at 1Q 2022 which was impacted by severe weather conditions at
AMMC and a rail incident in Liberia.
Operating income in 1Q 2023 was higher at $374 million as
compared to $255 million in 4Q 2022 and lower by -26.8% as compared
to $511 million in 1Q 2022.
EBITDA in 1Q 2023 of $430 million was higher as compared to $312
million in 4Q 2022, with the effect of higher iron ore reference
prices (+26.8%), higher iron ore shipments and lower freight costs
partially offset by lower quality premia. EBITDA in 1Q 2023 was
lower as compared to $567 million in 1Q 2022, primarily due to
lower iron ore reference prices (-11.7%) and lower quality premia
partially offset by lower freight costs and higher iron ore
shipments (+11.3%).
Joint venturesArcelorMittal has
investments in various joint ventures and associate entities
globally. The Company considers the Calvert (50% equity interest)
and AMNS India (60% equity interest) joint ventures to be of
particular strategic importance, warranting more detailed
disclosures to improve the understanding of their operational
performance and value to the Company.
Calvert19
|
(USDm) unless otherwise shown |
1Q 23 |
4Q 22 |
3Q 22 |
2Q 22 |
1Q 22 |
|
Production (100% basis) (kt)* |
1,226 |
1,014 |
1,055 |
1,127 |
1,124 |
|
Steel shipments (100% basis) (kt)** |
1,170 |
905 |
1,030 |
1,123 |
1,171 |
|
EBITDA (100% basis)*** |
37 |
(1) |
2 |
261 |
327 |
* Production: all production of the hot strip mill including
processing of slabs on a hire work basis for ArcelorMittal group
entities and third parties, including stainless steel slabs.
** Shipments: including shipments of finished products processed
on a hire work basis for ArcelorMittal group entities and third
parties, including stainless steel products.
*** EBITDA of Calvert presented here on a 100% basis as a
stand-alone business and in accordance with the Company's policy,
applying the weighted average method of accounting for inventory.
Calvert’s hot strip mill (“HSM”) production during 1Q 2023
increased by +20.9% to 1.2Mt, as compared to 1.0Mt in 4Q 2022 which
was lower due to both planned maintenance and weaker demand, and by
+9.1% as compared to 1.1Mt in 1Q 2022.
Steel shipments in 1Q 2023 were +29.4% above 4Q 2022 due to
improved demand.
EBITDA*** during 1Q 2023 of $37 million as compared to EBITDA
loss of $1 million in 4Q 2022 was primarily due to higher steel
shipments and lower slab inventory cost. The impact of higher
weighted average cost of inventories versus replacement cost in 1Q
2023 was approximately $0.1 billion.
AMNS India
|
(USDm) unless otherwise shown |
1Q 23 |
4Q 22 |
3Q 22 |
2Q 22 |
1Q 22 |
|
Crude steel production (100% basis) (kt) |
1,765 |
1,624 |
1,663 |
1,668 |
1,730 |
|
Steel shipments (100% basis) (kt) |
1,830 |
1,593 |
1,634 |
1,511 |
1,732 |
|
EBITDA (100% basis) |
341 |
162 |
204 |
365 |
470 |
Crude steel production in 1Q 2023 increased by +8.6% to 1.8Mt as
compared to 1.6Mt in 4Q 2022. Production was higher by +2.0% as
compared to 1Q 2022.
Steel shipments in 1Q 2023 increased by +14.9% to 1.8Mt as
compared 1.6Mt in 4Q 2022 and +5.7% higher as compared to 1.7Mt in
1Q 2022.
EBITDA during 1Q 2023 of $341 million was higher as compared to
$162 million in 4Q 2022, due to higher steel shipments, higher
average steel selling prices and lower costs (including energy
costs). EBITDA during 1Q 2023 of $341 million was lower as compared
to $470 million in 1Q 2022, due to lower prices offset in part by
higher steel shipments.
Liquidity and Capital
Resources
Net cash provided by operating activities in 1Q 2023 was $949
million as compared to $3,634 million in 4Q 2022 and $2,034 million
in 1Q 2022. Net cash provided by operating activities in 1Q 2023
includes a seasonal working capital investment of $775 million as
compared to a working capital release of $2,412 million in 4Q 2022
and $2,047 million investment in 1Q 2022. Despite the seasonal
build in working capital during 1Q 2023, the Company expects
working capital will follow the normal seasonal patterns with a
release for the full year 2023.
Net cash used in investing activities in 1Q 2023 was $2,869
million, which included capex of $938 million (as compared with
$1,500 million in 4Q 2022), in line with the guidance for the full
year 2023 of $4.5-5.0 billion12. Net cash used in other investing
activities in 1Q 2023 of $1,931 million included the following main
items: $2.2 billion related to the acquisition of ArcelorMittal
Pecém, other acquisitions including Riwald Recycling, Italpannelli
Deutschland and investment in Boston Metal (part of XCarb™
innovation fund)9 and payment of $0.2 billion to Votorantim13 in
Brazil, offset in part by $0.6 billion cash received from the
partial sale of Erdemir shares14 (to fund the partial repurchase of
mandatorily convertible bonds (“MCBs”) as discussed below).
Net cash used in financing activities in 1Q 2023 was $1,349
million which includes euro-denominated bond repayment of $395
million, $53 million dividends mainly paid to the minority
shareholders of AMMC, $477 million related to ArcelorMittal share
buybacks (19.1 million shares for a total value of $555 million of
which $78 million settled early April 2023) and $340 million
related to the partial repurchase of the privately placed MCBs17
using proceeds from the partial sale of Erdemir shares14 (as
discussed above).
As of March 31, 2023, the Company had liquidity of $11.8 billion
as compared to $14.9 billion as of December 31, 2022, consisting of
cash and cash equivalents of $6.3 billion (as of December 31, 2022,
cash and cash equivalents was $9.4 billion) and $5.5 billion of
available credit lines11. As of March 31, 2023, the average debt
maturity was 5.8 years.
Capital return
The Company will pay a $0.44/sh base dividend to shareholders in
2 equal instalments of $0.22/share in June 2023 and December
2023.
Following the approval granted by shareholders at the 2023 AGM,
the Company announces its intention to repurchase up to 85 million
shares through May 2025. The level of repurchases will reflect (and
is subject to) the level of post-dividend FCF generated over the
period. The Company’s capital return policy defines that a minimum
50% of post-dividend annual FCF is returned to shareholders through
buybacks.
Outlook
As anticipated, apparent demand conditions have showed signs of
improvement as the destocking phase ended during 1Q 2023. Despite
continued headwinds to real demand, the absence of any further
destock is expected to support higher apparent demand in 2023 as
compared to 2022. The Company’s world ex-China apparent steel
consumption ("ASC") growth forecast in 2023 as compared to 2022
(provided in February 2023) is for growth of +2.0% to +3.0%. The
Company maintains its previous guidance of steel shipments in 2023
to grow by ~5% vs. 202215.
ArcelorMittal Condensed Consolidated Statements of
Financial Position1
|
In millions of U.S. dollars |
Mar 31, 2023 |
Dec 31, 2022 |
Mar 31, 2022 |
|
ASSETS |
|
|
|
| Cash and
cash equivalents |
6,290 |
9,414 |
5,570 |
| Trade
accounts receivable and other |
4,989 |
3,839 |
6,353 |
|
Inventories |
19,820 |
20,087 |
22,171 |
| Prepaid expenses and other current
assets |
4,655 |
3,778 |
6,487 |
|
Total Current Assets |
35,754 |
37,118 |
40,581 |
|
|
|
|
|
| Goodwill
and intangible assets |
5,023 |
4,903 |
4,564 |
|
Property, plant and equipment |
32,900 |
30,167 |
30,161 |
|
Investments in associates and joint ventures |
10,904 |
10,765 |
10,888 |
| Deferred
tax assets |
8,571 |
8,554 |
8,018 |
| Other
assets |
2,108 |
3,040 |
3,287 |
|
Total Assets |
95,260 |
94,547 |
97,499 |
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
Short-term debt and current portion of long-term debt |
2,827 |
2,583 |
2,413 |
| Trade
accounts payable and other |
13,312 |
13,532 |
16,200 |
| Accrued expenses and other current
liabilities |
6,687 |
6,283 |
7,491 |
|
Total Current Liabilities |
22,826 |
22,398 |
26,104 |
|
|
|
|
|
|
Long-term debt, net of current portion |
8,650 |
9,067 |
6,309 |
| Deferred
tax liabilities |
2,596 |
2,666 |
2,494 |
| Other
long-term liabilities |
5,067 |
4,826 |
6,397 |
|
Total Liabilities |
39,139 |
38,957 |
41,304 |
|
|
|
|
|
| Equity
attributable to the equity holders of the parent |
53,974 |
53,152 |
53,798 |
|
Non-controlling interests |
2,147 |
2,438 |
2,397 |
|
Total Equity |
56,121 |
55,590 |
56,195 |
|
Total Liabilities and Shareholders’ Equity |
95,260 |
94,547 |
97,499 |
ArcelorMittal Condensed Consolidated Statements of
Operations1
|
|
Three months ended |
|
In millions of U.S. dollars unless otherwise
shown |
Mar 31, 2023 |
Dec 31, 2022 |
Sept 30, 2022 |
Jun 30, 2022 |
Mar 31, 2022 |
|
Sales |
18,501 |
16,891 |
18,975 |
22,142 |
21,836 |
|
Depreciation (B) |
(630) |
(636) |
(628) |
(669) |
(647) |
|
Impairment items3 (B) |
— |
(1,026) |
— |
— |
— |
|
Exceptional items4 (B) |
— |
98 |
(381) |
— |
— |
|
Operating income(loss) (A) |
1,192 |
(306) |
1,651 |
4,494 |
4,433 |
|
Operating margin % |
6.4 % |
(1.8) % |
8.7 % |
20.3 % |
20.3 % |
|
|
|
|
|
|
|
| Income
from associates, joint ventures and other investments |
318 |
121 |
59 |
578 |
559 |
| Net
interest expense |
(64) |
(72) |
(37) |
(53) |
(51) |
| Foreign
exchange and other net financing (loss) |
(117) |
449 |
(247) |
(183) |
(140) |
|
Income before taxes and non-controlling
interests |
1,329 |
192 |
1,426 |
4,836 |
4,801 |
|
Current tax expense |
(282) |
(91) |
(394) |
(900) |
(695) |
|
Deferred tax benefit |
93 |
126 |
23 |
74 |
140 |
| Income
tax (expense)benefit (net) |
(189) |
35 |
(371) |
(826) |
(555) |
|
Income including non-controlling interests |
1,140 |
227 |
1,055 |
4,010 |
4,246 |
|
Non-controlling interests (income)loss |
(44) |
34 |
(62) |
(87) |
(121) |
|
Net income attributable to equity holders of the
parent |
1,096 |
261 |
993 |
3,923 |
4,125 |
|
|
|
|
|
|
|
|
Basic earnings per common share ($) |
1.28 |
0.30 |
1.11 |
4.25 |
4.28 |
|
Diluted earnings per common share ($) |
1.27 |
0.30 |
1.11 |
4.24 |
4.27 |
|
|
|
|
|
|
|
|
Weighted average common shares outstanding (in millions) |
859 |
865 |
892 |
924 |
964 |
|
Diluted weighted average common shares outstanding (in
millions) |
862 |
868 |
895 |
926 |
966 |
|
|
|
|
|
|
|
|
OTHER INFORMATION |
|
|
|
|
|
|
EBITDA (C = A-B) |
1,822 |
1,258 |
2,660 |
5,163 |
5,080 |
| EBITDA
Margin % |
9.8 % |
7.4 % |
14.0 % |
23.3 % |
23.3 % |
|
|
|
|
|
|
|
| Total
group iron ore production (Mt) |
10.8 |
10.7 |
10.6 |
12.0 |
12.0 |
| Crude
steel production (Mt) |
14.5 |
13.2 |
14.9 |
14.6 |
16.3 |
| Steel
shipments (Mt) |
14.5 |
12.6 |
13.6 |
14.4 |
15.3 |
ArcelorMittal Condensed Consolidated Statements of Cash
flows1
|
|
Three months ended |
|
In millions of U.S. dollars |
Mar 31, 2023 |
Dec 31, 2022 |
Sept 30, 2022 |
Jun 30, 2022 |
Mar 31, 2022 |
|
Operating activities: |
|
|
|
|
|
|
Income attributable to equity holders of the
parent |
1,096 |
261 |
993 |
3,923 |
4,125 |
|
Adjustments to reconcile net income to net cash provided by
operations: |
|
|
|
|
|
|
Non-controlling interests income(loss) |
44 |
(34) |
62 |
87 |
121 |
|
Depreciation and impairments items |
630 |
1,662 |
628 |
669 |
647 |
|
Exceptional items |
— |
(98) |
381 |
— |
— |
| Income
from associates, joint ventures and other investments |
(318) |
(121) |
(59) |
(578) |
(559) |
| Deferred
tax benefit |
(93) |
(126) |
(23) |
(74) |
(140) |
| Change
in working capital |
(775) |
2,412 |
(580) |
(1,008) |
(2,047) |
| Other
operating activities (net) |
365 |
(322) |
579 |
(465) |
(113) |
|
Net cash provided by operating activities (A) |
949 |
3,634 |
1,981 |
2,554 |
2,034 |
|
Investing activities: |
|
|
|
|
|
| Purchase
of property, plant and equipment and intangibles (B) |
(938) |
(1,500) |
(784) |
(655) |
(529) |
| Other
investing activities (net) |
(1,931) |
(33) |
(19) |
(886) |
(77) |
|
Net cash used in investing activities |
(2,869) |
(1,533) |
(803) |
(1,541) |
(606) |
|
Financing activities: |
|
|
|
|
|
| Net
(payments)proceeds relating to payable to banks and long-term
debt |
(390) |
1,923 |
592 |
389 |
379 |
|
Dividends paid to ArcelorMittal shareholders |
— |
— |
— |
(332) |
— |
|
Dividends paid to minorities (C) |
(53) |
(29) |
(124) |
(166) |
(12) |
| Share buyback |
(477) |
(288) |
(649) |
(1,496) |
(504) |
|
Lease payments and other financing activities (net) |
(429) |
(28) |
(38) |
(46) |
(48) |
|
Net cash (used)provided by financing
activities |
(1,349) |
1,578 |
(219) |
(1,651) |
(185) |
| Net (decrease)increase in cash and cash
equivalents |
(3,269) |
3,679 |
959 |
(638) |
1,243 |
|
Effect of exchange rate changes on cash |
148 |
656 |
(451) |
(367) |
4 |
|
Change in cash and cash equivalents |
(3,121) |
4,335 |
508 |
(1,005) |
1,247 |
|
|
|
|
|
|
|
|
Free cash flow (D=A+B+C) |
(42) |
2,105 |
1,073 |
1,733 |
1,493 |
Appendix 1: Product shipments by
region1
|
(000'kt) |
1Q 23 |
4Q 22 |
3Q 22 |
2Q 22 |
1Q 22 |
|
Flat |
2,208 |
1,767 |
1,743 |
1,800 |
1,811 |
|
Long |
691 |
658 |
676 |
748 |
657 |
|
NAFTA |
2,843 |
2,338 |
2,339 |
2,453 |
2,456 |
|
Flat |
1,740 |
1,514 |
1,519 |
1,643 |
1,747 |
|
Long |
1,217 |
1,145 |
1,345 |
1,380 |
1,309 |
|
Brazil |
2,937 |
2,639 |
2,837 |
3,003 |
3,037 |
|
Flat |
5,468 |
4,751 |
4,978 |
5,705 |
5,953 |
|
Long |
2,148 |
1,933 |
1,967 |
2,146 |
2,275 |
|
Europe |
7,752 |
6,802 |
7,079 |
7,967 |
8,334 |
|
CIS |
901 |
916 |
1,170 |
730 |
1,405 |
|
Africa |
600 |
498 |
503 |
492 |
667 |
|
ACIS |
1,500 |
1,414 |
1,675 |
1,218 |
2,071 |
Note: “Others and eliminations” are not presented in the
table
Appendix 2: Capital
expenditures1
|
(USDm) |
1Q 23 |
4Q 22 |
3Q 22 |
2Q 22 |
1Q 22 |
|
NAFTA |
115 |
201 |
97 |
115 |
87 |
|
Brazil |
167 |
341 |
154 |
123 |
90 |
|
Europe |
351 |
564 |
242 |
211 |
187 |
|
ACIS |
106 |
151 |
135 |
107 |
90 |
|
Mining |
168 |
198 |
128 |
92 |
70 |
|
Others |
31 |
45 |
28 |
7 |
5 |
|
Total |
938 |
1,500 |
784 |
655 |
529 |
Appendix 3: Debt repayment schedule as of March 31,
2023
|
(USD billion) |
2023 |
2024 |
2025 |
2026 |
2027 |
>2027 |
Total |
|
Bonds |
0.8 |
0.9 |
1.0 |
1.0 |
1.2 |
2.6 |
7.5 |
|
Commercial paper |
0.8 |
— |
— |
— |
— |
— |
0.8 |
|
Other loans |
0.6 |
0.3 |
0.6 |
0.2 |
0.5 |
1.0 |
3.2 |
|
Total gross debt |
2.2 |
1.2 |
1.6 |
1.2 |
1.7 |
3.6 |
11.5 |
Appendix 4: Reconciliation of gross debt to net
debt
|
(USD million) |
Mar 31, 2023 |
Dec 31, 2022 |
Mar 31, 2022 |
| Gross debt |
11,477 |
11,650 |
8,722 |
|
Less: Cash and cash equivalents |
(6,290) |
(9,414) |
(5,570) |
|
Net debt |
5,187 |
2,236 |
3,152 |
|
|
|
|
|
|
Net debt / LTM EBITDA |
0.5 |
0.2 |
0.1 |
Appendix 5: Adjusted net income and adjusted basic
EPS
|
(USDm) |
1Q 23 |
4Q 22 |
3Q 22 |
2Q 22 |
1Q 22 |
|
Net income attributable to equity holders of the
parent |
1,096 |
261 |
993 |
3,923 |
4,125 |
|
Impairment items 3 |
— |
(1,026) |
— |
— |
— |
| Exceptional
items 4 |
— |
98 |
(381) |
— |
— |
|
Adjusted net income |
1,096 |
1,189 |
1,374 |
3,923 |
4,125 |
|
|
|
|
|
|
|
|
Shares (Basic EPS) million shares |
859 |
865 |
892 |
924 |
964 |
|
|
|
|
|
|
|
|
Adjusted basic EPS $/share |
1.28 |
1.37 |
1.54 |
4.25 |
4.28 |
Appendix 6: Terms and
definitions
Unless indicated otherwise, or the context otherwise requires,
references in this earnings release to the following terms have the
meanings set out next to them below:Adjusted basic
EPS: refers to adjusted net income divided by the weighted
average common shares outstanding.Adjusted net
income: refers to reported net income less impairment
items and exceptional items Apparent steel
consumption: calculated as the sum of production plus
imports minus exports.Average steel selling
prices: calculated as steel sales divided by steel
shipments.Cash and cash equivalents: represents
cash and cash equivalents, restricted cash, and short-term
investments.Capex: represents the purchase of
property, plant and equipment and intangibles.Crude steel
production: steel in the first solid state after melting,
suitable for further processing or for
sale.Depreciation: refers to amortization and
depreciation.EPS: refers to basic or diluted
earnings per share. EBITDA: operating results plus
depreciation, impairment items and exceptional
items.EBITDA/tonne: calculated as EBITDA divided
by total steel shipments.Exceptional items: income
/ (charges) relate to transactions that are significant, infrequent
or unusual and are not representative of the normal course of
business of the period.Foreign exchange and other net
financing income(loss): include foreign currency exchange
impact, bank fees, interest on pensions, impairment of financial
assets, revaluation of derivative instruments and other charges
that cannot be directly linked to operating results.Free
cash flow (FCF): refers to net cash provided by operating
activities less capex less dividends paid to minority
shareholdersGross debt: long-term debt and
short-term debt.Impairment items: refers to
impairment charges net of reversals. Iron ore reference
prices: refers to iron ore prices for 62% Fe CFR
China.Kt: refers to thousand metric
tonnes.Liquidity: cash and cash equivalents plus
available credit lines excluding back-up lines for the commercial
paper program.LTIF: lost time injury frequency
rate equals lost time injuries per 1,000,000 worked hours, based on
own personnel and contractors.Mt: refers to
million metric tonnes.Net debt: long-term debt and
short-term debt less cash and cash equivalents.Net debt/LTM
EBITDA: refers to Net debt divided by EBITDA for the last
twelve months.Net interest expense: includes
interest expense less interest incomeOperating
results: refers to operating
income(loss).Operating segments: NAFTA segment
includes the Flat, Long, HBI and Tubular operations of Canada,
Mexico and United States; and also includes all Mexico mines. The
Brazil segment includes the Flat, Long and Tubular operations of
Brazil and its neighboring countries including Argentina, Costa
Rica, Venezuela; and also includes Andrade and Serra Azul captive
iron ore mines. The Europe segment includes the Flat, Long and
Tubular operations of the European business, as well as Downstream
Solutions, and also includes Bosnia and Herzegovina captive iron
ore mines. The ACIS segment includes the Flat, Long and Tubular
operations of Kazakhstan, Ukraine and South Africa; and also
includes the captive iron ore mines in Ukraine and iron ore and
coal mines in Kazakhstan. Mining segment includes iron ore
operations of ArcelorMittal Mines Canada and ArcelorMittal
Liberia.Own iron ore production: includes total of
all finished production of fines, concentrate, pellets and lumps
and includes share of production.Price-cost
effect: a lack of correlation or a lag in the corollary
relationship between raw material and steel prices, which can
either have a positive (i.e. increased spread between steel prices
and raw material costs) or negative effect (i.e. a squeeze or
decreased spread between steel prices and raw material costs).
Shipments: information at segment and group level
eliminates intra-segment shipments (which are primarily between
Flat/Long plants and Tubular plants) and inter-segment shipments
respectively. Shipments of Downstream Solutions are
excluded.Working capital change (working capital investment
/ release): Movement of change in working capital - trade
accounts receivable plus inventories less trade and other accounts
payable.
Footnotes
- 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 also presents
adjusted net income(loss) and adjusted basic earnings per share as
it believes these are useful measures for the underlying business
performance excluding impairment items and exceptional items. The
Company’s guidance as to free cash flow and 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.
- LTIF figures presented for 1Q 2023 of 0.64x and 4Q 2022 of
0.86x. Potential severe injury frequency rate (“PSIF”) is a
proactive measurement of potential injuries. These are precursors
of severe accidents: unsafe situations or events, that we detect
proactively, before they could lead to a fatality or injury.
- In 4Q 2022, the Company recognized a $1,026 million impairment
charge related to property, plant and equipment with respect to
ArcelorMittal Kryvyi Rih (Ukraine) in the ACIS segment, where the
ongoing conflict with Russia resulted in low levels of production,
sales and income and created significant uncertainty about the
timing and ability of operations to return to a normal level of
activity. Attacks against Ukrainian power infrastructures caused
additional operational issues for ArcelorMittal Kryvyi Rih and the
increasing geopolitical tensions resulted in a substantial increase
in the discount rate applied by the Company in its value in use
calculation.
- Exceptional items for 4Q 2022 of $0.1 billion relates to a gain
following the settlement of a claim in favour of ArcelorMittal for
a breach of a supply contract.
- 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 1Q 2023 of
14.2% ($7.6 billion / $53.3 billion).
- 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. 1Q 2023 total equity of
$54.0 billion divided by 844 million diluted shares outstanding
equals $64/sh. 4Q 2022 total equity of $53.2 billion divided by 862
million diluted shares outstanding equals $62/sh.
- See Appendix 5 for reconciliation of adjusted net income and
adjusted basic EPS.
- September 30, 2020 was the inception date of the recent share
buyback programs.
- 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.
- ArcelorMittal Mines Canada, otherwise known as ArcelorMittal
Mines and Infrastructure Canada.
- 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 March 31, 2023, the $5.5 billion revolving credit
facility was fully available.
- Strategic capex excludes the anticipated upward revisions to
Liberia and Monlevade capex, due to be communicated in 1H 2023.
$1.1 billion of the previously announced strategic capex pipeline
(2021-2024) of $4.2 billion has been spent to date.
- 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.
- The Company sold a 7.85% stake in Erdemir starting in late
December 2022 and continuing into the first quarter of 2023,
generating total proceeds of $0.6 billion.
- 12M 2023 steel shipment guidance does not include CSP
acquisition and assumes no change in Ukraine.
- 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/
- Lease payments and other financing activities (net) of $429
million for 1Q 2023 primarily includes the partial repurchase of
the outstanding mandatorily convertible bonds (the “MCBs”) issued
on December 28, 2009 by one of its wholly-owned Luxembourg
subsidiaries. The outstanding principal amount of the MCBs was
reduced from $1.0 billion to $660 million on March 16, 2023. The
maturity date of the MCBs remains January 31, 2024.
- 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.
- AMNS Calvert is constructing a new 1.5Mt EAF and caster. Capex
required to conclude the project has increased to approximately $1
billion due to enlarged scope and inflation.
First quarter 2023 earnings analyst
conference callArcelorMittal management will host a
conference call for members of the investment community to present
and comment on the three-month period ended March 31, 2023 on:
Thursday May 4, 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
Forward-Looking StatementsThis
document contains 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.
About
ArcelorMittalArcelorMittal is one of the world's leading
steel and mining companies, with a presence in 60 countries and
primary steelmaking facilities in 16 countries. In 2022,
ArcelorMittal had revenues of $79.8 billion and crude steel
production of 59 million metric tonnes, while iron ore production
reached 45.3 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/EnquiriesArcelorMittal
investor relations: +44 207 543 1128; Retail: +44 207 543 1156;
SRI: +44 207 543 1156 and Bonds/credit: +33 1 71 92 10 26.
ArcelorMittal corporate communications (e-mail:
press@arcelormittal.com) +44 207 629 7988. Contact: Paul Weigh +44
203 214 2419
- 1Q23 Earnings release Final 040523.pdf
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