Luxembourg, May 7, 2015 -
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 results[1] for the
three month period ended March 31, 2015.
Highlights:
- Health and safety: LTIF rate of 0.88x in 1Q 2015
as compared to 0.89x in 4Q 2014
- EBITDA of $1.4 billion in 1Q 2015 (including $0.1
billion onerous contract provision)[2], versus
$1.8 billion in 1Q 2014
- Despite significant forex headwinds, 1Q 2015
underlying steel-only EBITDA stable versus 1Q 2014[3]
- Net loss of $0.7 billion in 1Q 2015 (primarily
forex driven) as compared to a net loss of $0.2 billion in 1Q
2014
- Steel shipments of 21.6Mt, an increase of 3% as
compared to 21Mt in 1Q 2014
- 15.6 Mt own iron ore production, an increase of
5% as compared to 14.8 Mt in 1Q 2014; 9.4 Mt shipped and reported
at market prices as compared to 9.3 Mt in 1Q 2014
- Iron ore unit cash costs down 13% YoY; FY 2015
cost reduction target increased to 15% (from 10%
previously)
- Net debt of $16.6 billion as of March 31, 2015 as
compared to $18.5 billion at March 31, 2014
Outlook and guidance:
-
Whilst steel markets have evolved largely as per
expectations, the subsequent deterioration of iron ore prices as
well as a weaker U.S. market results in a headwind to
guidance. Although the Company expects to benefit from further
improvement in costs, both in mining and steel segments (including
lower raw material costs), the Company now expects 2015 EBITDA
within the range of $6.0 - $7.0 billion
-
Due to the benefits of foreign exchange as well
as the postponement of some investment projects the Company has
further reduced the FY 2015 capital expenditure budget to
approximately $3.0 billion
-
The Company continues to expect positive free
cash flow in 2015 and to achieve progress towards the medium term
net debt target of $15 billion
-
The Company expects net interest expense of
approximately $1.4 billion in 2015
Financial highlights (on the
basis of IFRS1):
(USDm) unless otherwise shown |
1Q 15 |
4Q 14 |
3Q 14 |
2Q 14 |
1Q 14 |
Sales |
17,118 |
18,723 |
20,067 |
20,704 |
19,788 |
EBITDA |
1,378 |
1,815 |
1,905 |
1,763 |
1,754 |
Operating
income |
571 |
569 |
959 |
832 |
674 |
Net (loss)
/ income attributable to equity holders of the parent |
(728) |
(955) |
22 |
52 |
(205) |
Basic
(loss) /earnings per share (USD) |
(0.41) |
(0.53) |
0.01 |
0.03 |
(0.12) |
|
|
|
|
|
|
Own iron
ore production (Mt) |
15.6 |
16.7 |
15.8 |
16.6 |
14.8 |
Iron ore
shipped at market price (Mt) |
9.4 |
9.9 |
10.0 |
10.5 |
9.3 |
Crude steel
production (Mt) |
23.7 |
23.2 |
23.9 |
23.1 |
23.0 |
Steel
shipments (Mt) |
21.6 |
21.2 |
21.5 |
21.5 |
21.0 |
EBITDA/tonne (US$/t) |
64 |
86 |
89 |
82 |
84 |
Steel-only
EBITDA/tonne (US$/t) |
59 |
75 |
76 |
64 |
63 |
Commenting, Mr. Lakshmi N. Mittal,
ArcelorMittal Chairman and CEO, said:
"We faced a number of headwinds in the first
quarter, including a declining iron-ore price, a stronger dollar
and surge of imports in the United States. As a result of
which EBITDA declined to US$1.4 billion, although the underlying
performance of our steel business remained similar to the first
quarter of 2014. The performance in Europe was of particular
note, with EBITDA improving 15% year-on-year. Off-setting the
impact of these headwinds is a priority and we are focused on
achieving a 15% reduction in mining costs and improving the
competitive position of our US operations. Importantly, we
still expect to remain free cash flow positive and further reduce
net debt over the course of the year."
First quarter 2015 earnings
analyst conference call
ArcelorMittal management will host
a conference call for members of the investment community to
discuss the first quarter period ended March 31, 2015 on:
Date |
US Eastern time |
London |
CET |
Thursday
May 7, 2015 |
9.30am |
2.30pm |
3.30pm |
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The dial in
numbers: |
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Location |
Toll free dial in numbers |
Local dial in numbers |
Participant |
UK
local: |
0800 051
5931 |
+44 (0)203
364 5807 |
46266261# |
USA
local: |
186 6719
2729 |
+1 24
06450345 |
46266261# |
France: |
0800
9174780 |
+33 17071
2916 |
46266261# |
Germany: |
0800 965
6288 |
+49 692
7134 0801 |
46266261# |
Spain: |
90 099
4930 |
+34
911 143436 |
46266261# |
Luxembourg: |
800
26908 |
+352 27 86
05 07 |
46266261# |
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A replay of the conference call will be
available for one week by dialing: |
Number |
Language |
Access code |
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+49
(0) 1805 2043 089 |
English |
446929# |
|
The conference call will include a brief question
and answer session with senior management. The presentation will be
available via a live video webcast on www.arcelormittal.com.
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 Annual Report on Form 20-F
for the year ended December 31, 2014 filed 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 ArcelorMittal
ArcelorMittal is the world's leading steel and
mining company, with a presence in 60 countries and an industrial
footprint in 19 countries. Guided by a philosophy to produce safe,
sustainable steel, we are the leading supplier of quality steel in
the major global steel markets including automotive, construction,
household appliances and packaging, with world-class research and
development and outstanding distribution networks.
Through our core values of sustainability, quality
and leadership, we operate responsibly with respect to the health,
safety and wellbeing of our employees, contractors and the
communities in which we operate.
For us, steel is the fabric of life, as it is at
the heart of the modern world from railways to cars and washing
machines. We are actively researching and producing steel-based
technologies and solutions that make many of the products and
components people use in their everyday lives more energy
efficient.
We are one of the world's five largest producers
of iron ore and metallurgical coal and our mining business is an
essential part of our growth strategy. With a geographically
diversified portfolio of iron ore and coal assets, we are
strategically positioned to serve our network of steel plants and
the external global market. While our steel operations are
important customers, our supply to the external market is
increasing as we grow.
In 2014, ArcelorMittal had revenues of US$79.3
billion and crude steel production of 93.1 million tonnes, while
own iron ore production reached 63.9 million tonnes.
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/
Enquiries
ArcelorMittal Investor Relations |
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Europe |
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Tel: +352
4792 2652 |
Americas |
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Tel: +1 312
899 3985 |
Retail |
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Tel: +352
4792 3198 |
SRI |
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Tel: +44
207 543 1128 |
Bonds/Credit |
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Tel: +33 1
71 92 10 26 |
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ArcelorMittal Corporate Communications |
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E-mail: press@arcelormittal.com
Tel: +44 0207 629 7988 |
Paul
Weigh |
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Tel: +44
203 214 2882 |
Laura
Nutt |
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Tel: +44
207 543 1125 |
Isabelle
Cornelis |
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Tel: +44
203 214 2453 |
France |
Image
7 |
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Tel: +33
153 70 94 17 |
United
Kingdom |
Maitland
Consultancy |
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Tel: +44 20
7379 5151 |
Corporate
responsibility and safety performance
Health and safety - Own personnel
and contractors lost time injury frequency rate
Health and safety performance, based on own
personnel figures and contractors lost time injury frequency (LTIF)
rate, remained stable at 0.88x in the first quarter of 2015 ("1Q
2015") as compared to 0.89x for the fourth quarter of 2014 ("4Q
2014") and deteriorated as compared to 0.85x for the first quarter
of 2014 ("1Q 2014"). During 1Q 2015, significant improvements in
the Mining, NAFTA and Brazil segment performance relative to 4Q
2014, were partially offset by deterioration in the Europe and ACIS
segment.
The Company's effort to improve the Group's Health
and Safety record continues and remains focused on both further
reducing the rate of severe injuries and preventing fatalities.
Own personnel and contractors -
Frequency rate
Lost time injury frequency rate |
1Q 15 |
4Q 14 |
3Q 14 |
2Q 14 |
1Q 14 |
Mining |
0.60 |
0.75 |
0.29 |
0.84 |
0.26 |
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|
|
|
|
|
NAFTA |
1.13 |
1.42 |
1.03 |
0.88 |
1.00 |
Brazil |
0.71 |
1.14 |
0.98 |
0.47 |
0.98 |
Europe |
1.15 |
0.90 |
1.00 |
1.25 |
1.19 |
ACIS |
0.56 |
0.47 |
0.52 |
0.51 |
0.54 |
Total Steel |
0.93 |
0.92 |
0.87 |
0.87 |
0.96 |
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|
|
|
|
|
Total (Steel and Mining) |
0.88 |
0.89 |
0.78 |
0.87 |
0.85 |
Key corporate responsibility
highlights for 1Q 2015:
-
ArcelorMittal 2014 sustainability report,
"Steel: the sustainability challenge" was released on April 20,
2015. With the release of the sustainability report the
Company launched a new framework focusing on 10 sustainable
development outcomes it will work to achieve.
-
ArcelorMittal named a finalist for the Corporate
Social Responsibility Award from Platts Global Metals, with the
winner to be announced in May 2015.
-
Launch of our #ilovesteel #ilovescience Twitter
campaign to motivate young people's interest in science,
technology, engineering and math and attract top talent to continue
cutting edge innovation for steel and mining.
Analysis of
results for 1Q 2015 versus 4Q 2014 and 1Q 2014
Total steel shipments for 1Q 2015 were 2% higher
at 21.6 million metric tonnes as compared with 21.2 million metric
tonnes for 4Q 2014, and 3% higher as compared to 21.0 million
metric tonnes for 1Q 2014.
Sales for 1Q 2015 were $17.1 billion as compared
to $18.7 billion for 4Q 2014 and $19.8 billion for 1Q 2014. Sales
in 1Q 2015, were 8.6% lower as compared to 4Q 2014 primarily due to
lower average steel selling prices (-9.2%), seasonally lower market
priced iron ore shipments (-5.7%) and lower iron ore reference
prices (-16%), partially offset by higher steel shipments
(+2.0%).
Depreciation was lower at $807 million for 1Q 2015
as compared to $982 million in 4Q 2014 primarily on account of
foreign exchange impact due to depreciation of all major currencies
(Brazilian real, Euro and Canadian dollar) against the US dollar.
Depreciation in 1Q 2015 was significantly lower than $1,080 million
for 1Q 2014 on account of these impacts discussed above, as well as
increases in the useful lives of plant and equipment. Assuming a
similar foreign exchange translation impact for the remainder of
2015, full year depreciation is expected to be approximately $3.5
billion.
Impairment charges for 1Q 2015 and 1Q 2014 were
nil. Impairment charges for 4Q 2014 of $264 million included $114
million primarily related to the idling of the steel shop and
rolling facilities of Indiana Harbor Long carbon operations in the
US (NAFTA); $63 million related to write-down of the Volcan iron
ore mine in Mexico (Mining); and $57 million related to the closure
of mill C in Rodange, Luxembourg (Europe).
Operating income for 1Q 2015 was $571 million, as
compared to $569 million in 4Q 2014 and $674 million in 1Q 2014.
Operating results for 1Q 2015 were negatively impacted by a $69
million provision primarily related to onerous hot rolled and cold
rolled contracts in the US (NAFTA). Operating results for 4Q
2014 were negatively impacted by a $76 million provision related to
onerous annual tin plate contracts at Weirton in the US (NAFTA),
offset by the positive impact from the $79 million gain on disposal
of Kuzbass coal mines in Russia (Mining).
Loss from investments in associates, joint
ventures and other investments in 1Q 2015 was $2 million as
compared to loss in 4Q 2014 of $380 million and income of $36
million in 1Q 2014. Loss from investments in associates, joint
ventures and other investments in 1Q 2015 was negatively impacted
by foreign exchange effects on various investees, partially offset
by improved performance by Spanish and German investees.
Loss from investments in associates, joint
ventures and other investments in 4Q 2014 was negatively impacted
by a $621 million impairment loss on China Oriental following a
revision of business assumptions, partially offset by a $193
million gain on sale of Gallatin as well as improved performance of
European investees and the share of profits of Calvert operations.
Income in 1Q 2014 was primarily the result of improved performance
of Spanish investees.
Net interest expense (including interest expense
and interest income) in 1Q 2015 was stable at $323 million as
compared to 4Q 2014. Increased interest expense due to the issuance
of €750 million of bonds in January 2015 and "step up" clauses in
most of the Company's outstanding bonds, triggered by the S&P
downgrade in February 2015 was offset by savings following the
repayments of bonds in 4Q 2014 ($500 million and $750 million
repaid early in October 2014 and €360 million repaid in November
2014). The decrease in 1Q 2015 relative to $426 million in 1Q 2014
is attributable to both lower gross debt outstanding and lower
average cost, following the repayments of convertible bonds in 2Q
2014 (€1.25 billion and $800 million) and the repayments of bonds
in 4Q 2014. The Company continues to expect full year 2015 net
interest expense of approximately $1.4 billion.
Foreign exchange and other net financing costs
were $756 million for 1Q 2015 as compared to $549 million for 4Q
2014 and $380 million for 1Q 2014. Foreign exchange and other net
financing costs for 1Q 2015 include foreign exchange losses of $538
million as compared to a loss of $316 million for 4Q 2014 mainly on
account of USD appreciation of 11.4% against the Euro (versus 3.5%
in 4Q 2014) and 17.2% against BRL (versus 7.7% in 4Q 2014). This
foreign exchange loss is largely non-cash and primarily relates to
the impact of the USD appreciation on Euro denominated deferred tax
assets partially offset by foreign exchange gain on euro debt.
ArcelorMittal recorded income tax expense of $210
million for 1Q 2015, as compared to an income tax expense of $258
million for 4Q 2014 and income tax expense of $61 million for 1Q
2014.
Non-controlling interests for 1Q 2015 and 4Q 2014
represent a charge primarily related to minority shareholders'
share of net income recorded in ArcelorMittal Mines Canada and
Belgo Bekaert Arames in Brazil. Non-controlling interests for 1Q
2014 represent a charge primarily related to minority shareholders'
share of net income recorded in ArcelorMittal Mines Canada and
South Africa.
ArcelorMittal recorded a net loss for 1Q 2015 of
$728 million, or $0.41 loss per share, as compared to net loss of
$955 million, or $0.53 loss per share for 4Q 2014, and a net loss
of $205 million, or $0.12 loss per share for 1Q 2014.
Capital expenditure
projects
The following tables summarize the Company's
principal growth and optimization projects involving significant
capital expenditures.
Completed projects in most recent
quarters
Region |
Site |
Project |
Capacity / particulars |
Actual completion |
China |
Hunan Province |
VAMA auto steel JV |
Capacity of 1.5mt pickling line, 0.9mt continuous annealing
line and 0.5mt of hot dipped galvanizing auto steel |
1Q 2015 |
USA |
AM/NS Calvert |
Continuous coating line upgrade to Aluminize line#4 |
Increased production of Usibor by 0.1mt / year |
1Q 2015 |
Brazil |
Juiz de Fora (Brazil) |
Rebar and meltshop expansion |
Increase in rebar capacity by 0.4mt / year;
|
1Q 2015
|
Ongoing projects
Segment |
Site |
Project |
Capacity / particulars |
Forecast completion |
Mining |
Liberia |
Phase 2 expansion project |
Increase production capacity to 15mt/ year (high grade sinter
feed) |
Initial forecast of 2015 / Currently delayed (a) |
NAFTA |
ArcelorMittal Dofasco (Canada) |
Construction of a heavy gauge galvanizing line#6 to optimize
galvanizing operations |
Optimize cost and increase shipment of galvanized products by
0.3mt / year |
2Q 2015 |
Brazil |
ArcelorMittal Vega Do Sul (Brazil) |
Expansion project |
Increase hot dipped galvanizing (HDG) capacity by 0.6mt /
year and cold rolling (CR) capacity by 0.7mt / year |
On hold |
Brazil |
Monlevade
(Brazil) |
Wire rod
production expansion |
Increase
in capacity of finished products by 1.1mt / year |
2015 |
|
Juiz de Fora (Brazil) |
Rebar and meltshop expansion |
Increase in meltshop capacity by 0.2mt / year |
2016
|
Brazil |
Monlevade (Brazil) |
Sinter plant, blast furnace and meltshop |
Increase in liquid steel capacity by 1.2mt / year;
Sinter feed capacity of 2.3mt / year |
On hold |
Brazil |
Acindar (Argentina) |
New rolling mill |
Increase in rolling capacity by 0.4mt / year for bars for
civil construction |
2016 |
Joint venture projects
Region |
Site |
Project |
Capacity / particulars |
Forecast completion |
Canada |
Baffinland |
Early revenue phase |
Production capacity 3.5mt/ year (iron ore) |
2H 2015 |
USA |
AM/NS Calvert |
Slab yard expansion |
Increase coil production level up to 5.3mt/year coils. |
2H 2016 |
-
The Liberia phase 2 project to invest
$1.7 billion to construct 15 million tonnes of concentrate capacity
and associated infrastructure has been delayed. This follows the
contractor's declaration of force majeure on August 8, 2014 due to
the Ebola virus outbreak in West Africa. Given the project delays
and ensuing rapid deterioration of iron ore prices, the Company is
assessing its options to progress with this project. ArcelorMittal
remains fully committed to Liberia. Phase 1 operations are
continuing as normal at this time and to date have not been
affected by the Ebola situation in Liberia.
Analysis of segment
operations
NAFTA
(USDm) unless otherwise shown |
1Q 15 |
4Q 14 |
3Q 14 |
2Q 14 |
1Q 14 |
Sales |
4,777 |
5,166 |
5,645 |
5,423 |
4,928 |
EBITDA |
53 |
341 |
429 |
177 |
259 |
Depreciation |
156 |
178 |
169 |
170 |
189 |
Impairments |
- |
114 |
- |
- |
- |
Restructuring charges |
- |
- |
- |
- |
- |
Operating
(loss) / income |
(103) |
49 |
260 |
7 |
70 |
|
|
|
|
|
|
Crude steel
production (kt) |
5,908 |
6,142 |
6,485 |
6,153 |
6,256 |
Steel
shipments (kt) |
5,463 |
5,805 |
5,866 |
5,790 |
5,613 |
Average
steel selling price (US$/t) |
796 |
824 |
853 |
856 |
840 |
NAFTA segment crude steel production decreased by
3.8% to 5.9 million tonnes in 1Q 2015 as compared to 4Q 2014 to
align with weaker demand.
Steel shipments in 1Q 2015 decreased by 5.9% to
5.5 million tonnes as compared to 4Q 2014, primarily driven by a
7.9% decline in flat product steel shipment volumes due to weaker
demand resulting in particular from a strong inventory destock.
Sales in 1Q 2015 decreased by 7.5% to $4.8 billion
as compared to 4Q 2014, due to lower steel shipments as discussed
above, and lower average steel selling prices (-3.5%) primarily due
to lower domestic prices impacted by weak demand and import
pressures. Average steel selling price for flat products and long
products declined -3.1% and -8.0%, respectively.
EBITDA in 1Q 2015 decreased to $53 million as
compared to $341 million in 4Q 2014. EBITDA for 1Q 2015 was
negatively impacted by a $69 million provision primarily related to
onerous hot rolled and cold rolled contracts in the US.
EBITDA for 4Q 2014 was negatively impacted by a $76 million
provision related to onerous annual tin plate contract at Weirton,
in the US. EBITDA in 1Q 2015 was lower as compared to 4Q 2014 due
to lower average steel selling prices and steel shipment volumes as
discussed above.
On an underlying basis, EBITDA in 1Q 2015 was
52.9% lower as compared to 1Q 2014 primarily due to lower steel
shipments (-2.7%) and lower average steel selling prices
(5.3%).
Operating income for 4Q 2014 was
also impacted by impairment charges of $114 million primarily
related to the idling of the steel shop and rolling facilities of
Indiana Harbor Long carbon operations in the US.
Brazil
(USDm) unless otherwise shown |
1Q 15 |
4Q 14 |
3Q 14 |
2Q 14 |
1Q 14 |
Sales |
2,119 |
2,543 |
2,707 |
2,431 |
2,356 |
EBITDA |
377 |
546 |
460 |
414 |
425 |
Depreciation |
86 |
99 |
111 |
109 |
138 |
Impairments |
- |
- |
- |
- |
- |
Restructuring charges |
- |
- |
- |
- |
- |
Operating
income |
291 |
447 |
349 |
305 |
287 |
|
|
|
|
|
|
Crude steel
production (kt) |
2,875 |
2,758 |
2,971 |
2,382 |
2,413 |
Steel
shipments (kt) |
2,707 |
2,895 |
2,844 |
2,312 |
2,325 |
Average
steel selling price (US$/t) |
713 |
792 |
866 |
934 |
895 |
Brazil segment crude steel production increased by
4.3% to 2.9 million tonnes in 1Q 2015 as compared to 4Q 2014.
Steel shipments in 1Q 2015 decreased by 6.5% to
2.7 million tonnes as compared to 4Q 2014, driven by a 7.8% decline
in flat product steel shipment volumes (primarily due to decreased
slab exports from Brazil), and 4.8% decline in long product steel
shipment volumes primarily due to weak domestic demand in Brazil
and Argentina.
Sales in 1Q 2015 decreased by 16.6% to $2.1
billion as compared to 4Q 2014, due to lower steel shipments as
discussed above, and lower average steel selling prices (-10%).
Average steel selling prices for flat and long products decreased
by 11.2% and 5.2%, respectively, negatively impacted by a weaker
Brazilian real and a decline in international slab prices.
EBITDA in 1Q 2015 decreased by 30.9% to $377
million as compared to $546 million in 4Q 2014 primarily on account
of lower steel shipment volumes and average steel selling prices,
as well as lower profitability in our tubular operations.
EBITDA in 1Q 2015 was lower as compared to 1Q 2014
by 11.1% due to lower average steel selling prices offset in part
by higher steel shipments (following the restart of Tubarao furnace
in July 2014).
Europe
(USDm) unless otherwise shown |
1Q 15 |
4Q 14 |
3Q 14 |
2Q 14 |
1Q 14 |
Sales |
8,600 |
9,023 |
9,689 |
10,518 |
10,322 |
EBITDA |
616 |
557 |
523 |
689 |
535 |
Depreciation |
299 |
343 |
357 |
355 |
455 |
Impairments |
- |
57 |
- |
- |
- |
Restructuring charges |
- |
- |
- |
- |
- |
Operating
income |
317 |
157 |
166 |
334 |
80 |
|
|
|
|
|
|
Crude steel
production (kt) |
11,341 |
10,742 |
10,837 |
10,941 |
10,899 |
Steel
shipments (kt) |
10,662 |
9,610 |
9,829 |
10,191 |
10,009 |
Average
steel selling price (US$/t) |
633 |
721 |
760 |
799 |
808 |
Europe segment crude steel production increased by
5.6% to 11.3 million tonnes in 1Q 2015, as compared to 4Q 2014.
Steel shipments in 1Q 2015 increased by 10.9% to
10.7 million tonnes as compared to 4Q 2014. Flat product shipment
volumes increased by 12.9% and long product shipment volumes
increased by 6.4%, both benefiting from seasonality and improved
demand.
Sales in 1Q 2015 decreased by 4.7%
to $8.6 billion as compared to 4Q 2014, primarily due to lower
average steel selling prices (-12.2%), partially offset by higher
steel shipments as discussed above. Average steel selling prices
for flat and long products decreased by 11.8% and 13.0%,
respectively, largely due to exchange rate effects. Local average
steel prices declined marginally, partially reflecting lower raw
material costs.
EBITDA in 1Q 2015 increased by 10.6% to $616
million as compared to $557 million in 4Q 2014, reflecting improved
market conditions offset in part by negative translation
impacts.
EBITDA in 1Q 2015 was 15% higher than 1Q 2014,
reflecting improved market conditions as well as the benefits of
cost optimization efforts.
Operating performance for 4Q 2014 was impacted by
impairment charges of $57 million, related to the closure of mill C
in Rodange, Luxembourg.
ACIS[4]
(USDm) unless otherwise shown |
1Q 15 |
4Q 14 |
3Q 14 |
2Q 14 |
1Q 14 |
Sales |
1,721 |
1,967 |
1,994 |
2,300 |
2,007 |
EBITDA |
133 |
147 |
208 |
156 |
109 |
Depreciation |
108 |
135 |
130 |
131 |
129 |
Impairments |
- |
- |
- |
- |
- |
Restructuring charges |
- |
- |
- |
- |
- |
Operating
income / (loss) |
25 |
12 |
78 |
25 |
(20) |
|
|
|
|
|
|
Crude steel
production (kt) |
3,603 |
3,519 |
3,616 |
3,600 |
3,413 |
Steel
shipments (kt) |
3,006 |
3,111 |
3,229 |
3,306 |
3,187 |
Average
steel selling price (US$/t) |
507 |
550 |
594 |
592 |
567 |
ACIS segment crude steel production in 1Q 2015
increased by 2.4% to 3.6 million tonnes as compared to 4Q 2014.
This reflects increased production in South Africa following the
ramp up at Newcastle blast furnace post the completion in December
of the reline works.
Steel shipments in 1Q 2015 decreased by 3.4% to
3.0 million metric tonnes as compared to 4Q 2014, primarily due to
seasonally lower shipments in our CIS operations offset in part by
higher volumes in South Africa.
Sales in 1Q 2015 decreased by 12.5% to $1.7
billion as compared to 4Q 2014. This decline was primarily due to
lower steel shipment volumes and average steel selling prices
(-7.8%). Average steel selling prices were lower in Ukraine
(-13.7%) and Kazakhstan (-10%) impacted by weaker CIS prices, as
well as lower prices in South Africa following a 4.5% depreciation
of the South African Rand.
EBITDA in 1Q 2015 decreased to $133 million as
compared to $147 million in 4Q 2014, due to lower average steel
selling prices partially offset by lower costs in Ukraine (due to
currency devaluation) and South Africa.
EBITDA in 1Q 2015 was 21.7% higher as compared to
1Q 2014 due to lower costs, offset by lower steel shipments (-5.7%)
and lower average steel selling prices (-10.6%).
Mining
|
1Q 15 |
4Q 14 |
3Q 14 |
2Q 14 |
1Q 14 |
Sales |
758 |
1,059 |
1,272 |
1,383 |
1,256 |
EBITDA |
114 |
232 |
278 |
388 |
433 |
Depreciation |
150 |
219 |
170 |
155 |
159 |
Impairments |
- |
63 |
- |
- |
- |
Restructuring charges |
- |
- |
- |
- |
- |
Operating
income / (loss) |
(36) |
(50) |
108 |
233 |
274 |
|
|
|
|
|
|
Own iron ore production (a) (Mt) |
15.6 |
16.7 |
15.8 |
16.6 |
14.8 |
Iron ore shipped externally and internally at market price
(b) (Mt) |
9.4 |
9.9 |
10.0 |
10.5 |
9.3 |
Iron ore
shipment - cost plus basis (Mt) |
4.1 |
6.4 |
7.1 |
6.2 |
4.2 |
|
|
|
|
|
|
Own coal production(a) (Mt) |
1.6 |
1.7 |
1.8 |
1.8 |
1.8 |
Coal shipped externally and internally at market
price(b) (Mt) |
0.6 |
0.8 |
1.1 |
1.1 |
1.0 |
Coal
shipment - cost plus basis (Mt) |
0.8 |
0.9 |
0.8 |
0.8 |
0.8 |
(a) Own iron ore and coal production not
including strategic long-term contracts
(b) Iron ore and coal shipments of market-priced based
materials include the Company's own mines, and share of production
at other mines, and exclude supplies under strategic long-term
contracts
Own iron ore production (not including supplies
under strategic long-term contracts) in 1Q 2015 decreased by 7.0%
to 15.6 million metric tonnes as compared to 4Q 2014. This reflects
seasonally weaker performance in Canada and Brazil offset in part
by improved production in Liberia.
Own iron ore production (not including supplies
under strategic long-term contracts) was 5.0% higher than 1Q 2014,
primarily due to higher production at Mines Canada due to
"efficiency gains" and improvement at Liberia offset in part by
lower production in Ukraine and Brazil.
Market price iron ore shipments in 1Q 2015
decreased by 5.7% to 9.4 million metric tonnes as compared to 4Q
2014, primarily driven by seasonally lower shipments Mines Canada
driven by weather related issues.
Market price iron ore shipments in 1Q 2015 were
stable as compared to 1Q 2014 primarily due to lower shipments in
Mexico and Ukraine offset by increased shipments in Mines Canada
following operational efficiency gains.
Own coal production (not including supplies under
strategic long-term contracts) in 1Q 2015 decreased 8.0% to 1.6
million metric tonnes as compared to 4Q 2014, primarily due to
seasonally lower production at our US operations impacted by
adverse weather.
Own coal production (not including supplies under
strategic long-term contracts) in 1Q 2015 decreased 12.1% as
compared to 1Q 2014, primarily due lower production at our US
operations and scope change following the disposal of the Kuzbass
coal mines in Russia during the fourth quarter of 2014.
EBITDA in 1Q 2015 decreased to $114 million as
compared to $232 million in 4Q 2014. EBITDA for 4Q 2014 was
positively impacted by a $79 million gain on the disposal of
Kuzbass coal mines. Therefore on an underlying basis, 1Q 2015
EBITDA decreased by 25.8% primarily due to lower seaborne iron ore
market prices (-16%) and lower market price shipment volumes,
offset in part by improved cost performance.
EBITDA in 1Q 2015 was 73.8% lower as compared to
1Q 2014, primarily due to lower seaborne iron ore market prices
(-48%), partially offset by lower unit production costs, the
benefits of lower freight, foreign exchange and restructuring of
our coal operations including the sale of Kuzbass.
Operating performance for 4Q 2014 was impacted by
a $63 million impairment charge related to costs associated with
the write-down of the Volcan iron ore mine in Mexico.
Liquidity and Capital
Resources
For 1Q 2015, net cash used in operating activities was $915
million, as compared to net cash provided by operating activities
of $2,292 million in 4Q 2014. Cash used in operating
activities in 1Q 2015 included a $1,206 million investment of
operating working capital as compared to a $994 million release of
operating working capital in 4Q 2014. Despite the cash investment
in working capital, due to foreign exchange movements, the amount
reflected in the balance sheet remains largely unchanged. Rotation
days during 1Q 2015 increased to 54 days as compared to 51 days in
4Q 2014.
Net cash provided by other operating activities in
1Q 2015 was $119 million (including several items such as, onerous
contact provision, unrealised forex, employee benefits and VAT).
This compares to net cash provided by other operating activities in
4Q 2014 of $889 million (including the adjustment of non-cash items
related to unrealized forex losses, income tax accruals, impairment
on China Oriental partially offset by adjustments of gains from
disposal of Gallatin and Kuzbass). Net cash used by other operating
activities in 1Q 2014 was $393 million (including adjustment of
non-cash items such as income from associates and forex and changes
in other payables, such as employee benefits, payment of provisions
and VAT).
Net cash used in investing activities during 1Q
2015 was $456 million as compared to net cash used in investing
activities during 4Q 2014 of $492 million. Capital expenditure
decreased significantly to $745 million in 1Q 2015 as compared to
$1,067 million in 4Q 2014. Due to the benefits of foreign exchange
as well as the postponement of some investment projects, the
Company has reduced the FY 2015 capital expenditure budget to
approximately $3.0 billion.
Cash flow from other investing activities in 1Q
2015 of $289 million primarily included a $108 million inflow
from the exercise of the fourth put option on Hunan Valin
shares[5], cash
received from the Kiswire divestment[6] and
proceeds from the sale of tangible assets. Cash flow from
other investing activities in 4Q 2014 of $575 million primarily
included the cash inflow from the divesture of Gallatin for $389
million, a $108 million inflow from the exercise of the third put
option on Hunan Valin shares5 and proceeds
from the sale of tangible assets. Other investing activities in 1Q
2014 of $215 million primarily includes $258 million associated
with the AM/NS Calvert acquisition[7] offset in
part by proceeds from the exercise of the second put option in
Hunan Valin.
Net cash provided by financing activities for 1Q
2015 was $313 million as compared to net cash used in financing
activities of $1,926 million for 4Q 2014. Net cash provided
by financing activities for 1Q 2015 includes inflow related to
issuance of $877 million (€750 million) 3.125% Notes due January
14, 2022, under the Company's Euro Medium Term Notes Programme,
$339 million of short term financing and proceeds from a 4-year €75
million term loan, offset in part by a repayment of a $1.0 billion
loan.
Net cash used in financing activities for 4Q 2014
primarily included debt prepayment totalling $1.25 billion - 9.0%
Notes due February 15, 2015 ($750 million) and 3.750% Notes due
February 25, 2015 ($500 million) prior to their scheduled maturity
and €360 million bond repayment.
Net cash provided by financing activities for 1Q
2014 was $557 million and includes inflow of $1.3 billion relating
to the proceeds from the issuance of a €750 million 3.0% Notes due
25 March 2019, under the Company's Euro Medium Term Notes Programme
and proceeds from new 3-year $300 million financing provided by EDC
(Export Development Canada), offset in part by the early redemption
of perpetual securities of $657 million.
During 1Q 2015, the Company paid $53 million in
dividends primarily to minority shareholders in Arcelormittal Mines
Canada , as compared to $15 million dividends paid to minority
shareholders in 4Q 2014. During 1Q 2014, the Company paid $57
million in dividends to minority shareholders including those in
ArcelorMittal Mines Canada and payments to perpetual securities
holders.
At March 31, 2015, the Company's cash and cash
equivalents (including restricted cash and short-term investments)
amounted to $2.8 billion as compared to $4.0 billion at December
31, 2014.
Gross debt of $19.4 billion at March 31, 2015,
decreased from $19.9 billion at December 31, 2014 and $23.6 billion
at March 31, 2014. Gross debt was lower at March 31, 2015 following
the net repayment of loans and positive impact of foreign exchange
rate effects.
As of March 31, 2015, net debt was $16.6 billion
as compared with $15.8 billion at December 31, 2014[8], primarily
driven by the investment of operating working capital of $1.2
billion, partially offset by asset disposal proceeds ($0.3
billion)[9] and forex
effects ($0.6 billion).
The Company had liquidity of $8.8 billion at March
31, 2015, consisting of cash and cash equivalents (including
restricted cash and short-term investments) of $2.8 billion and
$6.0 billion of available credit lines. On March 31, 2015, the
average debt maturity was 6.4 years.
Key recent developments
-
On April 30, 2015, ArcelorMittal signed a US$6
billion Revolving Credit Facility (incorporating 3 and 5 year
tranches) (the "Facility"). The Facility will replace the US$2.4
billion revolving credit facility agreement dated May 6, 2010 and
the US$3.6 billion revolving credit facility agreement dated March
18, 2011 and will be used for the general corporate purposes of the
ArcelorMittal group. The Facility gives ArcelorMittal
improved terms over the former facilities, and extends the average
maturity date by approximately two years. ArcelorMittal received
indications of interest far in excess of that which it sought,
demonstrating confidence from the debt markets in ArcelorMittal.
The $6 billion credit facility contains a financial covenant of
4.25x Net debt / EBITDA.
-
On July 29, 2014, ArcelorMittal entered into
agreements with BHPB and Areva to acquire their respective
interests in the Nimba iron ore deposit, subject to the
satisfaction of certain conditions precedent, including
dispensation from the Government of Guinea to transport the Nimba
ore through the ArcelorMittal infrastructure system in Liberia.
ArcelorMittal took the decision to terminate the transaction,
given that this key condition to closing was not met by the agreed
deadline.
-
On April 9, 2015, ArcelorMittal
announced the issuance of €400 million Floating Rate Notes due
April 9, 2018 and €500 million 3.00 per cent. Notes due April 9,
2021. The Notes were issued under ArcelorMittal's Euro Medium Term
Notes Programme. The proceeds of the issuance were used for general
corporate purposes.
Outlook and guidance
Based on the current economic outlook, ArcelorMittal expects global
apparent steel consumption ("ASC") to increase by approximately
+0.5% to +1.5% in 2015. ArcelorMittal expects the pick-up in
European manufacturing activity to continue and support ASC growth
of approximately +1.5% to +2.5% in 2015 (versus a growth of 3.5% in
2014). Driven by robust underlying steel demand and significant
restocking, ASC in the US grew by over 11% in 2014. Whilst
underlying demand continues to expand, due to a destock in the 1H
2015, ASC in the US is expected to decline -2% to -3%. Due to the
weak macro backdrop both in the CIS and Brazil, ASC is expected to
decline by -5% to -7% in both regions in 2015. In China, we see
signs of stabilization due to the government's targeted stimulus,
however real estate market remains weak and expect steel demand
growth in the range of +0.5% to +1.5% for 2015. While there remain
risks to the global demand picture, given ArcelorMittal's specific
geographical and end market exposures, the Company expects its
steel shipments to increase by between +3% to 5% in 2015 as
compared to 2014.
Whilst steel markets have evolved largely as per
expectations, the subsequent deterioration of iron ore prices as
well as a weaker U.S. market results in a headwind to
guidance. Although the Company expects to benefit from further
improvement in costs, both in mining and steel segments (including
lower raw material costs), the Company now expects 2015 EBITDA
within the range of $6.0 - $7.0 billion.
Due to the benefits of foreign exchange as well as
the postponement of some investment projects the Company has
further reduced the FY 2015 capital expenditure budget to
approximately $3.0 billion.
The Company expects net interest expense of
approximately $1.4 billion in 2015.
Importantly, the Company continues to expect
positive free cash flow in 2015 and to achieve progress towards the
medium term net debt target of $15 billion.
ArcelorMittal Condensed
Consolidated Statements of Financial Position1
|
|
|
Mar 31, |
Dec 31, |
Mar 31, |
In millions of U.S. dollars |
|
|
2015 |
2014 |
2014 |
ASSETS |
|
|
|
|
|
Cash and
cash equivalents including restricted cash |
|
|
2,779 |
4,016 |
5,061 |
Trade
accounts receivable and other |
|
|
4,253 |
3,696 |
5,547 |
Inventories |
|
|
15,537 |
17,304 |
18,888 |
Prepaid
expenses and other current assets |
|
|
2,492 |
2,627 |
3,406 |
Assets held
for sale[10] |
|
|
- |
414 |
621 |
Total
Current Assets |
|
|
25,061 |
28,057 |
33,523 |
|
|
|
|
|
|
Goodwill
and intangible assets |
|
|
7,104 |
8,104 |
8,716 |
Property,
plant and equipment |
|
|
41,694 |
46,593 |
50,876 |
Investments
in associates and joint ventures |
|
|
5,394 |
5,833 |
6,907 |
Deferred
tax assets |
|
|
6,982 |
7,962 |
9,075 |
Other
assets |
|
|
2,282 |
2,630 |
2,251 |
Total
Assets |
|
|
88,517 |
99,179 |
111,348 |
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
Short-term
debt and current portion of long-term debt |
|
|
2,441 |
2,522 |
5,336 |
Trade
accounts payable and other |
|
|
10,276 |
11,450 |
12,181 |
Accrued
expenses and other current liabilities |
|
|
6,211 |
6,994 |
7,679 |
Liabilities
held for sale10 |
|
|
- |
157 |
194 |
Total
Current Liabilities |
|
|
18,928 |
21,123 |
25,390 |
|
|
|
|
|
|
Long-term
debt, net of current portion |
|
|
16,986 |
17,275 |
18,226 |
Deferred
tax liabilities |
|
|
2,670 |
3,004 |
3,190 |
Other
long-term liabilities |
|
|
11,634 |
12,617 |
12,478 |
Total
Liabilities |
|
|
50,218 |
54,019 |
59,284 |
|
|
|
|
|
|
Equity
attributable to the equity holders of the parent |
|
|
35,452 |
42,086 |
48,735 |
Non-controlling interests |
|
|
2,847 |
3,074 |
3,329 |
Total
Equity |
|
|
38,299 |
45,160 |
52,064 |
Total
Liabilities and Shareholders' Equity |
|
|
88,517 |
99,179 |
111,348 |
ArcelorMittal Condensed Consolidated Statement of
Operations1
In millions of U.S. dollars |
Three months
ended |
|
Mar 31,
2015 |
Dec 31,
2014 |
Sept 30,
2014 |
Jun 30,
2014 |
Mar 31, 2014 |
Sales |
17,118 |
18,723 |
20,067 |
20,704 |
19,788 |
Depreciation |
(807) |
(982) |
(946) |
(931) |
(1,080) |
Impairment |
- |
(264) |
- |
- |
- |
Restructuring charges |
- |
- |
- |
- |
- |
Operating income |
571 |
569 |
959 |
832 |
674 |
Operating
margin % |
3.3% |
3.0% |
4.8% |
4.0% |
3.4% |
|
|
|
|
|
|
Income /
(loss) from associates, joint ventures and other investments |
(2) |
(380) |
54 |
118 |
36 |
Net
interest expense |
(323) |
(322) |
(338) |
(383) |
(426) |
Foreign
exchange and other net financing (loss) |
(756) |
(549) |
(657) |
(327) |
(380) |
Income / (loss) before taxes and non-controlling
interests |
(510) |
(682) |
18 |
240 |
(96) |
Current
tax |
(125) |
(155) |
(138) |
(95) |
(156) |
Deferred
tax |
(85) |
(103) |
159 |
(61) |
95 |
Income tax
benefit / (expense) |
(210) |
(258) |
21 |
(156) |
(61) |
Income / (loss) including non-controlling
interests |
(720) |
(940) |
39 |
84 |
(157) |
Non-controlling interests |
(8) |
(15) |
(17) |
(32) |
(48) |
Net income / (loss) attributable to equity holders of the
parent |
(728) |
(955) |
22 |
52 |
(205) |
|
|
|
|
|
|
Basic
earnings (loss) per common share ($) |
(0.41) |
(0.53) |
0.01 |
0.03 |
(0.12) |
Diluted
earnings (loss) per common share ($) |
(0.41) |
(0.53) |
0.01 |
0.03 |
(0.12) |
|
|
|
|
|
|
Weighted
average common shares outstanding (in millions) |
1,793 |
1,793 |
1,792 |
1,791 |
1,790 |
Adjusted
diluted weighted average common shares outstanding (in
millions) |
1,793 |
1,795 |
1,795 |
1,793 |
1,792 |
|
|
|
|
|
|
EBITDA |
1,378 |
1,815 |
1,905 |
1,763 |
1,754 |
EBITDA
Margin % |
8.0% |
9.7% |
9.5% |
8.5% |
8.9% |
|
|
|
|
|
|
OTHER INFORMATION |
|
|
|
|
|
Own iron
ore production (million metric tonnes) |
15.6 |
16.7 |
15.8 |
16.6 |
14.8 |
Crude steel
production (million metric tonnes) |
23.7 |
23.2 |
23.9 |
23.1 |
23.0 |
Total
shipments of steel products (million metric tonnes) |
21.6 |
21.2 |
21.5 |
21.5 |
21.0 |
ArcelorMittal Condensed
Consolidated Statements of Cash flows1
In millions of U.S. dollars |
Three months
ended
|
|
Mar 31,
2015 |
Dec 31,
2014 |
Sept 30,
2014 |
Jun 30,
2014 |
Mar 31, 2014 |
Operating
activities: |
|
|
|
|
|
Net income
/ (loss) attributable to equity holders of the parent |
(728) |
(955) |
22 |
52 |
(205) |
Adjustments
to reconcile net income /(loss) to net cash provided by
operations: |
|
|
|
|
|
Non-controlling interest |
8 |
15 |
17 |
32 |
48 |
Depreciation and impairment |
807 |
1,246 |
946 |
931 |
1,080 |
Restructuring charges |
- |
- |
- |
- |
- |
Deferred
income tax |
85 |
103 |
(159) |
61 |
(95) |
Change in
operating working capital |
(1,206) |
994 |
(576) |
856 |
(906) |
Other
operating activities (net) |
119 |
889 |
251 |
(384) |
(393) |
Net cash
(used in) provided by operating activities |
(915) |
2,292 |
501 |
1,548 |
(471) |
Investing
activities: |
|
|
|
|
|
Purchase of
property, plant and equipment and intangibles |
(745) |
(1,067) |
(949) |
(774) |
(875) |
Other
investing activities (net) |
289 |
575 |
61 |
167 |
(215) |
Net cash
used in investing activities |
(456) |
(492) |
(888) |
(607) |
(1,090) |
Financing
activities: |
|
|
|
|
|
Net
(payments) proceeds relating to payable to banks and long-term
debt |
386 |
(1,868) |
688 |
(1,659) |
1,286 |
Dividends
paid |
(53) |
(15) |
(381) |
(5) |
(57) |
Combined
capital offering |
- |
- |
- |
- |
- |
Payments
for subordinated perpetual securities |
- |
- |
- |
- |
(657) |
Disposal /
(acquisition) of non-controlling interests |
- |
(17) |
- |
- |
- |
Other
financing activities (net) |
(20) |
(26) |
(13) |
(11) |
(15) |
Net cash
provided by (used in) financing activities |
313 |
(1,926) |
294 |
(1,675) |
557 |
Net
(decrease) increase in cash and cash equivalents |
(1,058) |
(126) |
(93) |
(734) |
(1,004) |
Cash and
cash equivalents transferred to assets held for sale |
1 |
- |
1 |
38 |
(31) |
Effect of
exchange rate changes on cash |
(180) |
(32) |
(71) |
9 |
(136) |
Change in
cash and cash equivalents |
(1,237) |
(158) |
(163) |
(687) |
(1,171) |
Appendix 1: Product shipments by
region
(000'kt) |
1Q 15 |
4Q 14 |
3Q 14 |
2Q 14 |
1Q 14 |
Flat |
4,459 |
4,844 |
4,836 |
4,699 |
4,528 |
Long |
1,158 |
1,094 |
1,171 |
1,193 |
1,212 |
NAFTA |
5,463 |
5,805 |
5,866 |
5,790 |
5,613 |
Flat |
1,514 |
1,643 |
1,452 |
948 |
899 |
Long |
1,169 |
1,229 |
1,379 |
1,336 |
1,419 |
Brazil |
2,707 |
2,895 |
2,844 |
2,312 |
2,325 |
Flat |
7,544 |
6,680 |
6,881 |
7,039 |
6,992 |
Long |
3,074 |
2,890 |
2,938 |
3,123 |
2,997 |
Europe |
10,662 |
9,610 |
9,829 |
10,191 |
10,009 |
CIS |
1,925 |
2,099 |
2,183 |
2,243 |
2,053 |
Africa |
1,063 |
982 |
1,026 |
1,037 |
1,112 |
ACIS |
3,006 |
3,111 |
3,229 |
3,306 |
3,187 |
Note: Others and eliminations line are not
presented in the
table
Appendix 2:
Capital expenditures
(USDm) |
1Q 15 |
4Q 14 |
3Q 14 |
2Q 14 |
1Q 14 |
NAFTA |
90 |
127 |
152 |
116 |
110 |
Brazil |
143 |
138 |
118 |
106 |
135 |
Europe |
250 |
303 |
231 |
209 |
309 |
ACIS |
93 |
188 |
170 |
110 |
105 |
Mining |
173 |
290 |
274 |
220 |
209 |
Total |
745 |
1,067 |
949 |
774 |
875 |
Note: Others and eliminations line
are not presented in the table
Appendix 3: Debt repayment
schedule as of March 31, 2015
Debt repayment schedule (USD billion) |
2015 |
2016 |
2017 |
2018 |
2019 |
>2019 |
Total |
Bonds |
1.0 |
1.5 |
2.5 |
2.1 |
2.3 |
7.4 |
16.8 |
LT
revolving credit lines |
|
|
|
|
|
|
|
- $3.6bn
syndicated credit facility |
- |
- |
- |
- |
- |
- |
- |
- $2.4bn
syndicated credit facility |
- |
- |
- |
- |
- |
- |
- |
Commercial
paper |
0.1 |
- |
- |
- |
- |
- |
0.1 |
Other
loans |
0.7 |
0.9 |
0.2 |
0.1 |
0.2 |
0.4 |
2.5 |
Total gross debt |
1.8 |
2.4 |
2.7 |
2.2 |
2.5 |
7.8 |
19.4 |
Appendix 4: Credit lines
available as of March 31, 2015[11]
Credit lines available (USD billion) |
|
|
|
Maturity |
Commitment |
Drawn |
Available |
- $3.6bn
syndicated credit facility |
|
|
|
18/03/2016 |
3.6 |
0.0 |
3.6 |
- $2.4bn
syndicated credit facility |
|
|
|
06/11/2018 |
2.4 |
0.0 |
2.4 |
Total committed lines |
|
|
|
|
6.0 |
0.0 |
6.0 |
Appendix 5: EBITDA bridge from 4Q
2014 to 1Q 2015
USD millions |
|
EBITDA
4Q 14 |
Volume & Mix - Steel (a) |
Volume & Mix - Mining (a) |
Price-cost - Steel (b) |
Price-cost - Mining (b) |
Other (c) |
EBITDA
1Q 15 |
Group |
|
1,815 |
165 |
(9) |
(365) |
(31) |
(197) |
1,378 |
-
The volume variance indicates the sales value
gain/loss through selling a higher/lower volume compared to the
reference period, valued at reference period contribution (selling
price-variable cost). The mix variance indicates sales value
gain/loss through selling different proportions of mix (product,
choice, customer, market including domestic/export), compared to
the reference period contribution.
-
The price-cost variance is a combination of the
selling price and cost variance. The selling price variance
indicates the sales value gain/loss through selling at a
higher/lower price compared to the reference period after
adjustment for mix, valued with the current period volumes sold.
The cost variance indicates increase/decrease in cost (after
adjustment for mix, one-time items and others) compared to the
reference period cost. Cost variance includes the gain/loss through
consumptions of input materials at a higher price/lower price,
movement in fixed cost, changes in valuation of inventory due to
movement in capacity utilization etc.
-
"Other" includes a $69 million provision
primarily related to onerous hot rolled and cold rolled contracts
in the US and foreign exchange translation impact.
Appendix 6: Terms and
definitions
Unless indicated otherwise, or the context
otherwise requires, references in this earnings release report to
the following terms have the meanings set out next to them
below:
LTIF: Lost time injury
frequency rate equals lost time injuries per 1,000,000 worked
hours, based on own personnel and contractors.
EBITDA: operating income plus
depreciation, impairment expenses and exceptional items.
Free cash flow: net
cash provided by operating activities less purchases of property,
plant and equipment and intangibles.
Net debt: long-term debt,
plus short term debt, less cash and cash equivalents, restricted
cash and short-term investments (including those held as part of
assets/liabilities held for sale).
Market priced tonnes:
represent amounts of iron ore and coal from ArcelorMittal mines
that could be sold to third parties on the open market.
Market priced tonnes that are not sold to third parties are
transferred from the Mining segment to the Company's steel
producing segments and reported at the prevailing market
price. Shipments of raw materials that do not constitute
market priced tonnes are transferred internally and reported on a
cost-plus basis.
Foreign exchange and other net
financing costs: include foreign currency swaps, bank fees,
interest on pensions, impairments of financial instruments and
revaluation of derivative instruments, and other charges that
cannot be directly linked to operating results.
Average steel selling prices:
calculated as steel sales divided by steel shipments.
Mining segment sales: i)
"External sales": mined product sold to third parties at market
price; ii) "Market-priced tonnes": internal sales of mined product
to ArcelorMittal facilities and reported at prevailing market
prices; iii) "Cost-plus tonnes" - internal sales of mined product
to ArcelorMittal facilities on a cost-plus basis. The determinant
of whether internal sales are reported at market price or cost-plus
is whether the raw material could practically be sold to third
parties (i.e. there is a potential market for the product and
logistics exist to access that market).
Rotation days: days of
accounts receivable plus days of inventory minus days of accounts
payable. Days of accounts payable and inventory are a function of
cost of goods sold of the quarter on an annualized basis. Days of
accounts receivable are a function of sales of the quarter on an
annualized basis.
Operating working
capital: trade accounts receivable plus inventories less
trade accounts payable.
Capex: includes the
acquisition of intangible assets (such as concessions for mining
and IT support) and includes payments to fixed asset suppliers.
Seaborne
iron ore reference prices: refers to iron ore prices for 62% Fe
CFR China.
Own iron ore production:
Includes total of all finished production of fines, concentrate,
pellets and lumps (excludes share of production and strategic
long-term contracts).
On-going projects: Refer to
projects for which construction has begun (excluding various
projects that are under development), even if such projects have
been placed on hold pending improved operating conditions.
EBITDA/tonne: calculated as
EBITDA divided by total steel shipments.
Steel-only EBITDA: calculated
as EBITDA less Mining segment EBITDA.
Steel-only EBITDA/tonne:
calculated as steel-only EBITDA divided by total shipments
Iron ore unit cash cost:
includes weighted average pellet and concentrate cost of goods sold
across all mines
Liquidity: includes back-up
lines for the commercial paper program.
Shipments information at the
Group level was previously based on a simple aggregation,
eliminating intra-segment shipments and excluding shipments of the
Distribution Solutions segment. The new presentation of
shipments information eliminates both inter- and intra-segment
shipments which are primarily between Flat/Long plants and Tubular
plants and continues to exclude the shipments of Distribution
Solutions.
[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"). While the interim financial information included in this
announcement has been prepared in accordance with IFRS applicable
to interim periods, this announcement does not contain sufficient
information to constitute an interim financial report as defined in
International Accounting Standards 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 measures.
[2] EBITDA in
1Q 2015 of $1,378 million was negatively impacted by a $69 million
provision primarily related to onerous hot rolled and cold rolled
in the US. EBITDA in 4Q 2014 of $1,815 million was negatively
impacted by a $76 million provision related to onerous annual tin
plate contracts at Weirton in the US, offset by the positive impact
from the $79 million gain on disposal of Kuzbass coal mines in
Russia.
[3] Underlying
steel-only EBITDA in 1Q 2015 of $1,333 million is calculated as
EBITDA of $1,378 million plus $69 million provision for onerous
contracts in the US less $114 million Mining EBITDA. Steel-only
EBITDA in 1Q 2014 of $1,321 million is calculated as EBITDA of
1,754 million less $433 million Mining EBITDA.
[4] Effective
from January 1, 2015, the functional currency of Kryvyi Rih was
changed to the Ukrainian Hryvnia due to changes in the regulatory
and economic environment and transaction currencies of the
operations.
[5] Following
the sale of a 5% stake to Valin Group as a result of the exercise
of the third put option on February 8, 2014, the Company's interest
in Hunan Valin decreased from 20% to 15%. On August 6, 2014, the
Company exercised the fourth and final instalment, which
subsequently led to the decrease in its stake in Hunan Valin from
15% to 10%. The Company received cash from the third and fourth
installment of $108 million both in the fourth quarter of 2014 and
first quarter of 2015, respectively.
[6] On December
9, 2013, ArcelorMittal signed an agreement with Kiswire Ltd. for
the sale of its 50% stake in the joint venture Kiswire
ArcelorMittal Ltd in South Korea and certain other entities of its
steel cord business in the US, Europe and Asia for a total
consideration of $169 million. The net proceeds received in 2Q 2014
are $39 million being $55 million received in cash during the
quarter minus cash held by steel cord business. Additionally, $28
million of gross debt held by the steel cord business has been
transferred. During 1Q 2015, the Company received $45 million with
the remainder due in 2Q 2015.
[7] On February
26, 2014, ArcelorMittal, together with Nippon Steel & Sumitomo
Metal Corporation ("NSSMC"), announced that it has completed the
acquisition of ThyssenKrupp Steel USA ("TK Steel USA"), a steel
processing plant in Calvert, Alabama, having received all necessary
regulatory approvals. The transaction - a 50/50 joint venture with
NSSMC - was completed for an agreed price of $1,550 million plus
working capital and net debt adjustment. ArcelorMittal paid $258
million cash for the acquisition in 1Q 2014. The Calvert
plant has a total capacity of 5.3 million tons including hot
rolling, cold rolling, coating and finishing lines.
[8] As at
December 31, 2014 net debt included $0.1 billion relating to
distribution centers in Europe held for sale.
[9] During the
first quarter of 2015, the Company generated cash proceeds
totalling $0.3 billion from the proceeds from the exercise of the
fourth put option on Hunan Valin shares of $108 million, cash
received from Kiswire divestment and proceeds from the sale of
tangible assets.
[10] Assets and
liabilities held for sale as of December 31, 2014 included assets
and liabilities held for sale related to distribution centers in
Europe and the disposal of tangible assets. As of March 31, 2014,
assets and liabilities subject to disposal primarily relate to
steel cord business and ATIC classified as asset/liabilities held
for sale.
[11] In April
2015, the Company refinanced and extended $6 billion lines of
credit (two tranches: $2.5 billion 3Yr and $3.5 billion 5Yr) with
4.25x Net debt / EBITDA covenant
Press release (PDF)
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: ArcelorMittal S.A. via Globenewswire
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