ArcelorMittal reports fourth quarter 2021 results
Luxembourg, February 10, 2022 - 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 results1,2 for
the three-months and twelve-months period ended December 31,
2021.
2021 Key highlights:
- Health and safety focus: Protecting the health
and wellbeing of employees remains the Company’s overarching
priority; LTIF rate of 0.79x in FY 2021 vs. 0.61x in FY 20203
- Robust financial performance: FY 2021
operating income of $17.0bn4 (vs. $2.1bn4,5 in FY 2020) and EBITDA
of $19.4bn (vs. $4.3bn in FY 2020)
- Enhanced share value: Basic EPS of $13.53/sh.
Equity book value per share22 increased to $51/sh (from $32/sh in
FY 2020)
- Financial strength: The Company ended 2021
with gross debt of $8.4bn (vs. $12.3bn at the end of 2020), net
debt of $4.0bn (vs. $6.4bn at the end of 2020) and returned to
investment grade; pension/OPEB declined 20% to $3.7bn in Dec'21 vs.
$4.6bn in Dec'20
- Healthy net income: $15.0bn6 in FY 2021
includes share of JV and associates net income of $2.2bn (vs.
$0.2bn in FY 2020) largely reflecting performance at AMNS India,
AMNS Calvert and other investees
- Strong FCF generation: 9.2% higher steel
shipments YoY on scope adjusted basis21 led to a working capital
investment of $6.4bn in FY 2021; despite this the Group generated
$6.6bn free cash flow (FCF)17 in FY 2021 ($9.9bn net cash provided
by operating activities less capex of $3.0bn less minority
dividends of $0.3bn)
- Significant returns to shareholders: The
Company returned $6.7bn of capital to shareholders in FY 2021,
reducing the fully diluted shares outstanding by 19%; 165m shares
cancelled (120m shares in 2021 and 45m shares in Jan 2022)
Priorities & Outlook:
- Global leadership on addressing climate
change:
- The Company is progressing its plans to reduce the CO2e
intensity of its global production by 25% by 2030 (including a 35%
reduction in CO2e intensity in Europe) with a net investment of
$0.3bn forecast in 2022
- 1st Smart Carbon projects to be commissioned in Ghent (Belgium)
by end 2022
- 1st Hydrogen reduction project in Hamburg to start production
2024-2025; Further decarbonization projects announced during the
year in Spain, Canada, Belgium and France
- New €1.7bn investment in Fos-sur-Mer & Dunkirk (France),
enabling a reduction of ~40% or 7.8Mtpa CO2 emissions in France by
2030
- XCarbTM Innovation Fund investments12 in five technology
partnerships during 2021 totaling $180m
- Sales of XCarb® green steel certificates
targeted to increase to 0.6Mt run rate by end 2022
- New 3 year $1.5bn Value plan to deliver commercial and
business improvements
- Delivering strategic growth in support of higher
sustainable returns
- New $0.3bn pellet plant investment at Kryvyi Rih (Ukraine) to
ensure sustainability, environmental compliance and improve
productivity; new $0.2bn section mill in Barra Mansa (Brazil) to
produce higher value added products and enhance the product
mix
- $3.1bn strategic capex envelope to be spent between 2021-2024
(of which $0.2bn has been spent to date)23 is estimated to add
$1.1bn to future EBITDA24
- 1st coils from the Mexico HSM produced in December 2021;
strategic capex to increase in 2022 as growth projects in Brazil
(Monlevade, Vega and Barra Mansa) and Ukraine, as well as Iron Ore
mining (Liberia, Las Truchas, Serra Azul) advance
- Building a track record of consistently returning
capital to shareholders:
- $7.2bn of capital returned to shareholders since September
2020
- The Board proposes to increase the annual base dividend to
shareholders to $0.38/sh (to be paid in June 2022, subject to the
approval of shareholders at the AGM in May 2022)
- The Company has announced a new $1.0bn capital return for
1H'22. Further authorization to repurchase shares will be sought
from shareholders at the 2022 AGM
- Market outlook is favorable
- World ex-China apparent steel consumption ("ASC") in 2022 vs.
2021 is expected to grow 2.5-3%; the Company expects its steel
shipments in 2022 to grow by 3% vs. 202121
- The Company expects strong EBITDA and FCF generation in
2022
Financial highlights (on the basis of
IFRS1,2):
|
(USDm) unless otherwise shown |
4Q 21 |
3Q 21 |
4Q 20 |
12M 21 |
12M 20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
20,806 |
20,229 |
14,184 |
76,571 |
53,270 |
|
Operating income |
4,558 |
5,345 |
1,998 |
16,976 |
2,110 |
|
Net income / (loss) attributable to equity holders of the
parent |
4,045 |
4,621 |
1,207 |
14,956 |
(733) |
|
Basic earnings / (loss) per common share (US$) |
3.93 |
4.17 |
1.01 |
13.53 |
(0.64) |
|
|
|
|
|
|
|
|
Operating income/ tonne (US$/t) |
289 |
366 |
116 |
270 |
31 |
|
EBITDA |
5,052 |
6,058 |
1,726 |
19,404 |
4,301 |
|
EBITDA/ tonne (US$/t) |
320 |
414 |
100 |
308 |
62 |
|
|
|
|
|
|
|
|
Crude steel production (Mt) |
16.5 |
17.2 |
18.8 |
69.1 |
71.5 |
|
Steel shipments (Mt) |
15.8 |
14.6 |
17.3 |
62.9 |
69.1 |
|
Total group iron ore production (Mt) |
13.4 |
13.0 |
15.3 |
50.9 |
58.0 |
|
Iron ore production (Mt) (AMMC and Liberia only) |
7.2 |
6.8 |
7.6 |
26.2 |
28.3 |
|
Iron ore shipment (Mt) (AMMC and Liberia only) |
7.1 |
6.9 |
7.9 |
26.0 |
28.4 |
|
|
|
|
|
|
|
|
Number of shares outstanding (issued shares less treasury shares)
(millions) |
911 |
971 |
1,081 |
911 |
1,081 |
Note: As previously announced, effective 2Q 2021, ArcelorMittal
has amended its presentation of reportable segments to report the
operations of AMMC and Liberia within the Mining segment. The
results of each other mine are accounted for within the steel
segments that it primarily supplies; as from 2Q 2021 onwards,
ArcelorMittal Italia is deconsolidated and accounted for as a joint
venture.
Commenting, Aditya Mittal, ArcelorMittal Chief Executive
Officer, said:
“2021 was a strong year in which we accelerated progress on many
fronts. The global economic rebound post initial COVID-19
restrictions being lifted supported buoyant demand in all markets
delivering very high levels of profitability. This further
strengthened our balance sheet and enabled the delivery of
consistent returns for shareholders as well as targeted investment
in our business. Recent investments, both organic and acquisitive,
have long-term strategic value – with the Mexico hot strip mill set
to ramp up this year, the construction of the Calvert EAF underway,
and the AM/NS India joint venture performing well and poised to
capture further opportunity in this fast-growing market.
The one area where we are not satisfied is safety. We want to do
better and we have to do better. Across the organization all our
efforts are focused on this most important outcome.
Perhaps most critically we intensified our commitments to
decarbonize, recognizing that steel can and must make a significant
contribution to achieving net zero. We stated an ambition to reduce
our CO2e intensity by 25% by 2030 and continue to invest in
multiple technology routes that will help us succeed. We launched
our XCarb vision which includes an investment fund into the clean
energy technologies that support this transformation. Working in
collaboration with stakeholders, we were able to accelerate
progress at a number of our plants in Europe and also in Canada.
Our aim is to demonstrate what is possible by having the world’s
first near zero-emissions steel plant.
We start 2022 ready to build on the progress already achieved
for long-term sustainability and success. Industry fundamentals
remain positive, supported by re-negotiated automotive contracts.
Our balance sheet strength enables us to invest in the most
compelling organic growth opportunities and continue our transition
towards low emissions steelmaking. We see increasing evidence of
stakeholder understanding and support for the transition to
zero-carbon steel-making. We look forward to further building on
this progress achieved, in 2022.”
Sustainable development and safety
performance
Health and safety - Own personnel and
contractors lost time injury frequency rate
Protecting the health and wellbeing of employees remains the
Company’s overarching priority with ongoing strict adherence to
World Health Organization guidelines (in respect of COVID-19), and
specific government guidelines have been followed and
implemented.
Health and safety performance based on own personnel and
contractors lost time injury frequency ("LTIF") rate was 0.74x in
the fourth quarter of 2021 ("4Q 2021") as compared to 0.76x for the
third quarter of 2021 ("3Q 2021"). Prior period figures have not
been recast for the ArcelorMittal USA disposal which took place in
December 2020 and exclude ArcelorMittal Italia (which is now
accounted for under the equity method) for all periods.
Health and safety performance in the twelve months of 2021 (“12M
2021”) was 0.79x as compared to 0.61x in the twelve months of 2020
(“12M 2020”).
The Company’s efforts to improve its health and safety record
aim to strengthen the safety of its workforce with an absolute
focus on eliminating fatalities. A change to the Company’s
executive remuneration policy has been made to reflect this
focus.
Own personnel and contractors - Frequency
rate
|
Lost time injury frequency rate |
4Q 21 |
3Q 21 |
4Q 20 |
12M 21 |
12M 20 |
|
NAFTA |
0.25 |
0.48 |
0.49 |
0.40 |
0.57 |
|
Brazil |
0.30 |
0.10 |
0.16 |
0.22 |
0.28 |
|
Europe |
1.09 |
1.38 |
1.35 |
1.19 |
1.07 |
|
ACIS |
0.92 |
0.80 |
0.64 |
0.94 |
0.64 |
|
Mining |
— |
— |
0.34 |
0.32 |
0.27 |
|
Total |
0.74 |
0.76 |
0.65 |
0.79 |
0.61 |
Key sustainable development
highlights:
- On November 3, 2021, ArcelorMittal and the government of Quebec
announced a CAD$205 million investment by ArcelorMittal Mining
Canada (‘AMMC’) in its Port-Cartier pellet plant, enabling this
facility to convert its entire 10 million tonne annual pellet
production to direct reduced iron ("DRI") pellets by the end of
2025. The investment, in which the Quebec government will
contribute through an electricity rebate of up to CAD$80 million,
will enable the Port-Cartier plant to become one of the world’s
largest producers of DRI pellets, the raw material feedstock for
ironmaking in a DRI furnace and reduce the plant's CO2e by ~20% per
annum. The project includes the implementation of a flotation
system that will enable a significant reduction of silica in the
iron ore pellets, facilitating the production of a very
high-quality pellet.
- ArcelorMittal announced on December 9, 2021 a US$30 million
investment in carbon recycling company, LanzaTech through its
XCarb™ innovation fund, the fourth investment the Company has made
through the fund since its launch in March 2021. The investment
further expands ArcelorMittal’s relationship with LanzaTech, which
commenced in 2015 when the Company first announced plans to utilise
LanzaTech’s carbon capture and re-use technology at its plant in
Ghent, Belgium. The €180 million Carbalyst® plant – ArcelorMittal’s
flagship carbon capture and re-use technology project - is
currently under construction, with commissioning expected before
the end of 2022.
- ArcelorMittal announced on January 25, 2022 a $5 million
investment in H2Pro through its XCarb™ innovation fund, bringing
the fund’s total investment commitments to $180 million since its
launch. H2Pro is developing a disruptive way of producing hydrogen
from water, which offers superior energy efficiency to traditional
water electrolysis technologies.
- ArcelorMittal was announced as a Supplier Sustainability Award
winner by Ford Motor Company in their World Excellence Awards. The
awards recognise companies that exceed expectations and achieve the
highest levels of excellence in quality, cost, performance and
delivery. ArcelorMittal’s commitment to IRMA (Initiative for
Responsible Mining Assurance) was particularly acknowledged by Ford
in making this award.
- On January 27, 2022, ArcelorMittal published its second Climate
Advocacy Alignment Report which maps the policy positions of the 61
associations of which the Company is a member, against the
objectives of the Paris agreement and the five policy priorities
ArcelorMittal outlined in its second Climate Action Report.
Analysis of results for the twelve months ended December
31, 2021 versus results for the twelve months ended December 31,
2020Adjusted for the change in scope (i.e. excluding the
shipments of ArcelorMittal USA, sold on December 9, 2020, and
ArcelorMittal Italia13, deconsolidated as from April 14, 2021),
steel shipments in 12M 2021 were 61.9 million metric tonnes (Mt),
9.2% higher as compared to 56.7Mt in 12M 2020 driven by the broad
based recovery in demand following the impacts of COVID-19 in 2020.
Adjusted for the change in scope, all segments experienced year on
year shipment growth: Europe +8.9%, Brazil +24.3%, ACIS +4.8% and
NAFTA +8.0%.
Sales for 12M 2021 increased by 43.7% to $76.6 billion as
compared with $53.3 billion for 12M 2020, primarily due to higher
average steel selling prices (+54.2%) and higher iron ore prices
which more than offset the changes in scope.
Depreciation of $2.5 billion for 12M 2021 was lower as compared
with $3.0 billion in 12M 2020 largely due to the change of scope.
The FY 2022 depreciation expense is expected to be approximately
$2.7 billion (based on current exchange rates) primarily driven by
changes in the useful lives estimates for certain assets in Europe
and Canada due to decarbonization projects.
Impairment gain for 12M 2021 amounted to $218 million following
improved cash flow projections in the context of decarbonization
plans in Sestao (Spain) (partially reversing the impairment
recognized in 2015). Whilst 12M 2020 included a net impairment gain
of $133 million4.
Exceptional items for 12M 2021 of $123 million relate to
expected costs for the decommissioning of the dam at the Serra Azul
mine in Brazil. Exceptional items for 12M 2020 were net gains of
$636 million related to the gain on disposal of ArcelorMittal USA
($1.5 billion) partially offset by site restoration and termination
charges following the permanent closure of a blast furnace and
steel plant in Krakow (Poland) totaling $146 million and inventory
related charges in NAFTA and Europe ($0.7 billion).
Operating income for 12M 2021 of $17.0 billion was primarily
driven by positive steel price-cost effects and higher iron ore
reference prices. Operating income for 12M 2020 of $2.1 billion was
positively impacted by impairment and exceptional net gains
totaling $0.8 billion as discussed above and negatively impacted in
particular by the effects of the COVID-19 pandemic.
Income from associates, joint ventures and other investments14
for 12M 2021 was $2.2 billion as compared to $234 million for 12M
2020. 12M 2021 income is significantly higher on account of
improved contribution from AMNS India7 and AMNS Calvert (Calvert)8
and other equity and joint-ventures investments as well as the
annual dividend received from Erdemir of $89 million. 12M 2020
income from associates included a $211 million impairment of the
Company's investment in DHS (Germany).
Net interest expense in 12M 2021 was lower at $278 million as
compared to $421 million in 12M 2020 following debt repayments and
liability management.
Foreign exchange and other net financing losses were $877
million for 12M 2021 as compared to losses of $835 million for 12M
2020.
ArcelorMittal recorded an income tax expense of $2.5 billion for
12M 2021 (including $493 million deferred tax benefit) as compared
to $1.7 billion for 12M 2020 (which included $827 million deferred
tax expense).
ArcelorMittal’s net income for 12M 2021 was $14,956 million, or
$13.53 basic earnings per common share, as compared to a net loss
in 12M 2020 of $733 million, or $0.64 basic loss per common
share.
Analysis of results for 4Q 2021 versus 3Q 2021 and 4Q
2020Total steel shipments in 4Q 2021 were 15.8Mt, 7.9%
higher as compared with 14.6Mt in 3Q 2021 following the reversal of
the production constraints and order shipment delays which impacted
3Q 2021: Europe +10.3%, Brazil +7.2% and ACIS +9.7%, although NAFTA
was down -3.3%.
Adjusted for the change in scope (i.e. excluding the shipments
of ArcelorMittal USA and ArcelorMittal Italia21), steel shipments
in 4Q 2021 increased 8.5% as compared to 4Q 2020: Europe +9.4%,
Brazil +17.8% and ACIS +9.4% offset in part by NAFTA (-5.8%).
Sales in 4Q 2021 were $20.8 billion as compared to $20.2 billion
for 3Q 2021 and $14.2 billion for 4Q 2020. As compared to 3Q 2021,
the 2.8% increase in sales was primarily due to higher steel
shipment volumes (+7.9%) offset in part by lower average steel
selling prices (-2.4%), and lower mining revenue primarily due to
lower iron ore reference prices (-32.3%). Sales in 4Q 2021 were
+46.7% higher as compared to 4Q 2020 primarily due to significantly
higher average steel selling prices (+60.1%) offset in part by
lower iron ore reference prices (-17.1%) and the impacts of scope
changes.
Depreciation for 4Q 2021 was $712 million as compared to $590
million for 3Q 2021 primarily driven by changes in the useful lives
estimates for certain assets in Europe and Canada due to
decarbonization projects, and stable as compared to $711 million in
4Q 2020.
Impairment gain for 4Q 2021 amounted to $218 million following
improved cash flow projections in the context of decarbonization
plans in Sestao (Spain) (partially reversing the impairment
recognized in 2015). There were no impairment items for 3Q 2021.
Impairment expenses in 4Q 2020 were $331 million related to the
revised future cashflow expectations of plate assets in Europe.
Exceptional items for 4Q 2021 were nil. Exceptional charges for
3Q 2021 of $123 million related to expected costs for the
decommissioning of the dam at the Serra Azul mine in Brazil.
Exceptional items in 4Q 2020 of $1.3 billion related to gain on the
sale of ArcelorMittal USA5 offset by site restoration and
termination charges related to the closure of the steel shop and
blast furnace at Krakow (Poland).
Operating income for 4Q 2021 was $4.6 billion as compared to
$5.3 billion in 3Q 2021 and $2.0 billion in 4Q 2020 (impacted by
the exceptional and impairment items as discussed above). The
decreased operating income for 4Q 2021 as compared to 3Q 2021
reflects a negative price-cost effect which more than offset higher
shipments in steel segments and the impacts of lower iron ore
reference prices which more than offset higher iron ore shipments
in the Mining segment.
Income from associates, joint ventures and other investments for
4Q 2021 was $383 million as compared to $778 million for 3Q 2021
and $7 million in 4Q 2020. 4Q 2021 is significantly lower on
account of weaker results from AMNS India7, AMNS Calvert8, and
Chinese investees14.
Net interest expense in 4Q 2021 was lower at $49 million as
compared to $62 million in 3Q 2021 and $88 million in 4Q 2020,
mainly due to savings following the repayment of bonds.
Foreign exchange and other net financing losses in 4Q 2021 were
$111 million as compared to losses of $339 million in 3Q 2021 and
$270 million in 4Q 2020. 4Q 2021 includes foreign exchange loss of
$30 million (compared to $22 million gain in 3Q 2021) and $13
million non-cash mark-to-market loss related to the mandatory
convertible bonds call option (loss of $68 million in 3Q 2021 and
gain of $59 million in 4Q 2020). 4Q 2021 also includes a charge of
$61 million related to the repurchase of approximately $395 million
in aggregate principal amount of the Mandatorily Convertible
Subordinated Notes ("MCN") on December 23, 2021. 3Q 2021 included
an $82 million charge in connection with a revised valuation of the
put option granted to Votorantim20 and a $153 million loss
(primarily consisting of interest and indexation charges) relating
to a legal claim (for which the Company is exploring its legal
options, including an action to set aside the decision) at
ArcelorMittal Brasil from the Votorantim acquisition20.
ArcelorMittal recorded an income tax expense of $632 million in
4Q 2021 as compared to $882 million in 3Q 2021 and $358 million for
4Q 2020.
ArcelorMittal recorded net income for 4Q 2021 of $4,045 million
($3.93 basic earnings per common share), as compared to net income
of $4,621 million for 3Q 2021 ($4.17 basic earnings per common
share), and a net income of $1,207 million for 4Q 2020 ($1.01 basic
earnings per common share).
Analysis of segment
operations2, 18
NAFTA
|
(USDm) unless otherwise shown |
4Q 21 |
3Q 21 |
4Q 20 |
12M 21 |
12M 20 |
|
Sales |
3,329 |
3,423 |
3,204 |
12,530 |
13,668 |
|
Operating income |
939 |
925 |
1,507 |
2,800 |
1,684 |
|
Depreciation |
(113) |
(70) |
(102) |
(325) |
(537) |
|
Impairment items |
— |
— |
— |
— |
660 |
|
Exceptional items |
— |
— |
1,460 |
— |
998 |
|
EBITDA |
1,052 |
995 |
149 |
3,125 |
563 |
|
Crude steel production (kt) |
2,046 |
1,994 |
4,180 |
8,487 |
17,813 |
|
Steel shipments (kt) |
2,205 |
2,280 |
4,134 |
9,586 |
17,902 |
|
Average steel selling price (US$/t) |
1,341 |
1,303 |
714 |
1,128 |
702 |
NAFTA segment crude steel production increased by 2.6% to 2.0Mt
in 4Q 2021, as compared to 3Q 2021 primarily due to recovery post
operational disruptions (including the impact of hurricane Ida) in
Mexico during 3Q 2021. Adjusted for scope (excluding the impact of
ArcelorMittal USA which was sold in December 2020), crude steel
production declined 0.7% year on year.
Steel shipments in 4Q 2021 decreased by 3.3% to 2.2Mt, as
compared to 2.3Mt in 3Q 2021 primarily due to weaker demand in
North America. Adjusted for scope, steel shipments were 5.8% lower
year on year.
Sales in 4Q 2021 decreased by 2.8% to $3.3 billion, as compared
to $3.4 billion in 3Q 2021, primarily due a decrease in steel
shipments (as discussed above) offset in part by a 2.9% increase in
average steel selling prices. Sales increased in 4Q 2021 compared
to $3.2 billion in 4Q 2020.
Operating income in 4Q 2021 was $939 million as compared to $925
million in 3Q 2021 and $1,507 million in 4Q 2020 which was
positively impacted by the $1.5 billion exceptional gain5 on the
sale of ArcelorMittal USA.
EBITDA in 4Q 2021 of $1,052 million was 5.8% higher as compared
to $995 million in 3Q 2021, primarily due to a positive price-cost
effect offset in part by lower shipment volumes as noted above.
EBITDA in 4Q 2021 was higher as compared to $149 million in 4Q 2020
mainly due to a significant positive price-cost effect.
Brazil
|
(USDm) unless otherwise shown |
4Q 21 |
3Q 21 |
4Q 20 |
12M 21 |
12M 20 |
|
Sales |
3,452 |
3,606 |
1,905 |
12,856 |
6,336 |
|
Operating income |
892 |
1,164 |
296 |
3,798 |
777 |
|
Depreciation |
(60) |
(59) |
(51) |
(228) |
(228) |
|
Exceptional items |
— |
(123) |
— |
(123) |
— |
|
EBITDA |
952 |
1,346 |
347 |
4,149 |
1,005 |
|
Crude steel production (kt) |
3,117 |
3,112 |
2,868 |
12,413 |
9,539 |
|
Steel shipments (kt) |
3,034 |
2,829 |
2,575 |
11,695 |
9,410 |
|
Average steel selling price (US$/t) |
1,049 |
1,196 |
702 |
1,030 |
634 |
Brazil segment crude steel production was stable at 3.1Mt in 4Q
2021 and in 3Q 2021, and higher as compared to 2.9Mt in 4Q
2020. Steel shipments in 4Q 2021 increased by 7.2% to 3.0Mt as
compared to 2.8Mt in 3Q 2021, primarily due to delivery of
shipments that had been delayed at the end of the previous quarter.
Steel shipments were 17.8% higher in 4Q 2021 as compared to 2.6Mt
in 4Q 2020.
Sales in 4Q 2021 decreased by 4.3% to $3.5 billion as compared
to $3.6 billion in 3Q 2021, following a 12.3% decrease in average
steel selling prices offset in part by higher steel shipments.
Sales in 4Q 2020 were $1.9 billion impacted by the COVID-19
pandemic.
Operating income in 4Q 2021 of $892 million was lower as
compared to $1,164 million in 3Q 2021 and higher as compared to
$296 million in 4Q 2020. Operating income in 3Q 2021 was impacted
by exceptional items of $123 million related to expected costs for
the decommissioning of the dam at the Serra Azul mine in
Brazil.
EBITDA in 4Q 2021 decreased by 29.3% to $952 million as compared
to $1,346 million in 3Q 2021, primarily due to a negative
price-cost effect and a negative currency translation effect offset
in part by higher steel shipments. EBITDA in 4Q 2021 was
significantly higher as compared to $347 million in 4Q 2020
primarily due to a positive price-cost effect and higher steel
shipments.
Europe
|
(USDm) unless otherwise shown |
4Q 21 |
3Q 21 |
4Q 20 |
12M 21 |
12M 20 |
|
Sales |
12,079 |
11,228 |
7,604 |
43,334 |
28,071 |
|
Operating income /(loss) |
1,886 |
1,925 |
(444) |
5,672 |
(1,439) |
|
Depreciation |
(353) |
(284) |
(356) |
(1,252) |
(1,418) |
|
Impairment items |
218 |
— |
(331) |
218 |
(527) |
|
Exceptional items |
— |
— |
(146) |
— |
(337) |
|
EBITDA |
2,021 |
2,209 |
389 |
6,706 |
843 |
|
Crude steel production (kt) |
8,621 |
9,091 |
9,110 |
36,795 |
34,004 |
|
Steel shipments (kt) |
8,325 |
7,551 |
8,569 |
33,182 |
32,873 |
|
Average steel selling price (US$/t) |
1,110 |
1,098 |
695 |
986 |
655 |
Europe segment crude steel production was 5.2% lower at 8.6Mt in
4Q 2021 as compared to 9.1Mt in 3Q 2021 (due to planned
maintenance) and was lower by 5.4% compared to 4Q 2020. Following
the formation of a public-private partnership between Invitalia and
AM InvestCo Italy renamed Acciaierie d’Italia Holding
(ArcelorMittal’s subsidiary party to the lease and purchase
agreement for the ILVA business), ArcelorMittal has deconsolidated
the assets and liabilities as from mid-April 2021. Adjusted for
this change of scope, crude steel production increased by 5.1% in
4Q 2021 as compared to 4Q 2020.
Steel shipments in 4Q 2021 increased by 10.3% to 8.3Mt as
compared to 7.6Mt in 3Q 2021 and were lower as compared to 8.6Mt in
4Q 2020 (+9.4% on a scope adjusted basis). Steel shipments in 4Q
2021 include delivery of orders delayed last quarter and logistic
constraints partly linked to the severe floods in Europe in July
2021.
Sales in 4Q 2021 increased 7.6% to $12.1 billion, as compared to
$11.2 billion in 3Q 2021, primarily due higher shipments and 1.1%
higher average selling prices. Sales in 4Q 2020 were $7.6 billion
impacted by the COVID-19 pandemic.
Impairment gain for 4Q 2021 amounted to $218 million following
improved cash flow projections in the context of decarbonization
plans in Sestao (Spain) (partially reversing the impairment
recognized in 2015). Impairment charges for 3Q 2021 were nil.
Impairment charges for 4Q 2020 were $331 million following the
revised future cashflow expectations of plate assets.
Exceptional items for 4Q 2021 and 3Q 2021 were nil. Exceptional
items for 4Q 2020 were $146 million related to site restoration and
termination charges following the closure of the blast furnace and
the steel plant in Krakow (Poland).
Operating income in 4Q 2021 was $1,886 million as compared to
$1,925 million in 3Q 2021 and an operating loss of $444 million in
4Q 2020 (impacted by impairments/exceptional items as discussed
above).
EBITDA in 4Q 2021 of $2,021 million decreased 8.5%, as compared
to $2,209 million in 3Q 2021, primarily due to a negative
price-cost effect including higher energy prices and one-time $55
million provision related to an early retirement scheme in Spain,
offset in part by higher steel shipments. EBITDA in 4Q 2021
increased significantly as compared to $389 million in 4Q 2020
primarily due to a positive price-cost effect.
ACIS
|
(USDm) unless otherwise shown |
4Q 21 |
3Q 21 |
4Q 20 |
12M 21 |
12M 20 |
|
Sales |
2,539 |
2,419 |
1,553 |
9,854 |
5,737 |
|
Operating income |
439 |
808 |
233 |
2,705 |
209 |
|
Depreciation |
(118) |
(112) |
(133) |
(450) |
(492) |
|
Exceptional items |
— |
— |
— |
— |
(21) |
|
EBITDA |
557 |
920 |
366 |
3,155 |
722 |
|
Crude steel production (kt) |
2,694 |
3,014 |
2,673 |
11,366 |
10,171 |
|
Steel shipments (kt) |
2,597 |
2,367 |
2,373 |
10,360 |
9,881 |
|
Average steel selling price (US$/t) |
810 |
864 |
511 |
780 |
464 |
ACIS segment crude steel production in 4Q 2021 was 10.6% lower
at 2.7Mt as compared to 3.0Mt in 3Q 2021 due to planned and
unplanned maintenance in Ukraine and South Africa. Crude steel
production in 4Q 2021 was broadly stable at 2.7Mt as compared to 4Q
2020.
Steel shipments in 4Q 2021 increased by 9.7% to 2.6Mt as
compared to 2.4Mt as at 3Q 2021, mainly due to delivery of exports
delayed at the end of the previous quarter. 4Q 2020 steel shipments
were 2.4Mt.
Sales in 4Q 2021 increased by 5.0% to $2.5 billion as compared
to $2.4 billion in 3Q 2021, primarily due to higher steel shipments
offset in part by 6.3% lower average steel selling prices. Sales in
4Q 2020 were $1.6 billion impacted by the COVID-19 pandemic.
Operating income in 4Q 2021 was $439 million as compared to $808
million in 3Q 2021 and $233 million in 4Q 2020.
EBITDA of $557 million in 4Q 2021 was 39.5% lower as compared to
$920 million in 3Q 2021, primarily due to a negative price-cost
effect, including higher energy prices and maintenance costs,
offset in part by higher steel shipments. EBITDA in 4Q 2021 was
higher as compared to $366 million in 4Q 2020, primarily due to
positive price-cost effects and higher steel shipments.
Mining
|
(USDm) unless otherwise shown |
4Q 21 |
3Q 21 |
4Q 20 |
12M 21 |
12M 20 |
|
Sales |
824 |
1,153 |
937 |
4,045 |
2,785 |
|
Operating income |
343 |
741 |
502 |
2,371 |
1,247 |
|
Depreciation |
(57) |
(56) |
(60) |
(228) |
(243) |
|
EBITDA |
400 |
797 |
562 |
2,599 |
1,490 |
|
|
|
|
|
|
|
|
Iron ore production (Mt) |
7.2 |
6.8 |
7.6 |
26.2 |
28.3 |
|
Iron ore shipment (Mt) |
7.1 |
6.9 |
7.9 |
26.0 |
28.4 |
Given the sale of ArcelorMittal USA in December 2020, the
Company is no longer presenting coal production and shipments in
its earnings releases.
Iron ore production (AMMC and Liberia only) increased in 4Q 2021
by 4.3% to 7.2Mt as compared to 6.8Mt in 3Q 2021 and was 6.1% lower
as compared to 4Q 2020. Higher production in 4Q 2021 was primarily
due to higher Liberia production following recovery due to the
impact of locomotive incidents and heavy seasonal monsoon rains in
the prior quarter.
Iron ore shipments increased in 4Q 2021 by 2.8% as compared to
3Q 2021, primarily driven by improvement in Liberia offset in part
by lower shipments at AMMC, and decreased by 10.2% as compared to
4Q 2020 (due to lower shipments in both AMMC and Liberia).
Operating income in 4Q 2021 decreased to $343 million as
compared to $741 million in 3Q 2021 and $502 million in 4Q
2020.
EBITDA in 4Q 2021 decreased by 49.8% to $400 million as compared
to $797 million in 3Q 2021, largely reflecting the negative impact
of lower iron ore reference prices (-32.3%) offset in part by
higher iron ore shipments (+2.8%). EBITDA in 4Q 2021 was lower as
compared to $562 million in 4Q 2020, primarily due to lower iron
ore reference prices (-17.1%) and lower shipments.
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.
Calvert8
|
(USDm) unless otherwise shown |
4Q 21 |
3Q 21 |
4Q 20 |
12M 21 |
12M 20 |
|
Production (100% basis) (kt)* |
1,068 |
1,239 |
1,057 |
4,802 |
4,038 |
|
Steel shipments (100% basis) (kt)** |
1,052 |
1,203 |
1,005 |
4,547 |
3,912 |
|
EBITDA (100% basis)*** |
270 |
397 |
62 |
1,091 |
197 |
* 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 4Q 2021
totaled 1.1Mt as compared to 1.2Mt in 3Q 2021. 4Q 2021 HSM
production was 13.8% lower than 3Q 2021 mainly driven by a planned
maintenance outage in November.
Steel shipments in 4Q 2021 were 12.6% below 3Q 2021 due to HSM
maintenance outage and weak demand.
EBITDA*** during 4Q 2021 of $270 million (100% basis) was lower
as compared to $397 million in 3Q 2021, largely due to lower steel
shipments, unfavorable sales mix and higher slab weighted average
cost partially offset by higher sales prices.
AMNS India7
|
(USDm) unless otherwise shown |
4Q 21 |
3Q 21 |
4Q 20 |
12M 21 |
12M 20 |
|
Crude steel production (100% basis) (Kt) |
1,847 |
1,891 |
1,888 |
7,393 |
6,616 |
|
Steel shipments (100% basis) (Kt) |
1,731 |
1,765 |
1,779 |
6,914 |
6,261 |
|
EBITDA (100% basis) |
435 |
551 |
274 |
1,996 |
697 |
Crude steel production in 4Q 2021 decreased by 2.3% to 1.8Mt as
compared to 1.9Mt in 3Q 2021. Steel shipment in 4Q 2021 decreased
1.9% to 1.7Mt as compared to 1.8Mt in 3Q 2021.
AMNS India EBITDA of $435 million (100% basis) was 21% lower as
compared to $551 million in 3Q 2021 primarily due lower steel
selling prices and higher costs (including coking coal and power
costs).
Liquidity and Capital
Resources
Net cash provided by operating activities for 4Q 2021 was $4,154
million as compared to $2,442 million in 3Q 2021 and $1,416 million
in 4Q 2020. Net cash provided by operating activities in 4Q 2021
includes a working capital release of $22 million as compared to a
working capital investment of $2,896 million in 3Q 2021 and a
working capital release of $925 million in 4Q 2020. 4Q 2021 did not
see anticipated working capital release due to relatively robust
finished steel prices, elevated raw material prices and lower than
anticipated inventory reduction. Based on current market conditions
together with impacts from higher automotive contract price resets,
the Company expects a further working capital investment in 1Q
2022. The 2022 full year working capital requirements will be
determined by market dynamics and are expected to be consistent
with EBITDA evolution (with the aim to return working capital
rotation days to targeted levels by year-end).
Capex of $1,145 million in 4Q 2021 compares to $675 million in
3Q 2021 and $668 million in 4Q 2020. Capex of $3.0 billion19 in FY
2021 is below the previous guidance of $3.2 billion.
Net cash used in other investing activities in 4Q 2021 was $90
million as compared to net cash provided by other investing
activities of $1,184 million in 3Q 2021 and $262 million in 4Q
2020. 4Q 2021 cash outflow primarily relates to the $45 million
investment through the XCarb™ innovation fund (including carbon
recycling company, LanzaTech). 3Q 2021 cash inflow primarily
relates to $1.3 billion cash received from the redemption of
preferred shares (the equivalent of 58.3 million common shares) of
Cleveland Cliffs following a final review of the notice of the
redemption, partially offset by other investments including those
as part of the XCarbTM Innovation fund. 4Q 2020 cash inflow relates
to $0.5 billion proceeds from the sale of ArcelorMittal USA offset
in part by an investment in short term deposits related to such
sale.
Net cash used in financing activities in 4Q 2021 was $2,990
million as compared to $2,740 million in 3Q 2021 and $2,227 million
in 4Q 2020. In 4Q 2021, net cash used in financing activities
includes an inflow of $0.1 billion from commercial paper portfolio.
Net cash used in financing activities includes an outflow of $0.8
billion in 3Q 2021 and $1.5 billion in 4Q 2020 mainly due to bond
repayments.
During 4Q 2021, ArcelorMittal repurchased 59.2 million shares
for a total value of $1.8 billion. In addition, the Company
repurchased $395 million in aggregate principal amount of its 5.50%
Mandatorily Convertible Subordinated Notes ("MCN") due 2023 for an
aggregate repurchase price of $1,196 million. The MCN repurchase
was equivalent to repurchasing approximately 36.6 million shares
(based on the minimum conversion ratio).
During 4Q 2021 and 4Q 2020, the Company paid dividends of $21
million and $16 million, respectively, to minority shareholders.
During 3Q 2021, the Company paid total dividends of $185 million of
which $28 million was withholding taxes paid on dividends to
ArcelorMittal shareholders in 2Q 2021 and $157 million mainly paid
to the minority shareholders of ArcelorMittal Mines Canada9 (AMMC)
and ArcelorMittal Kryvyi Rih.
Outflows from lease payments and other financing activities were
$53 million in 4Q 2021 and $46 million in 3Q 2021. Outflows from
lease payments and other financing activities were $218 million for
4Q 2020 and included $135 million paid to Banca Intesa15.
Gross debt increased by $152 million to $8.4 billion as of
December 31, 2021, as compared to $8.2 billion as of September 30,
2021 and $12.3 billion as of December 31, 2020. As of December 31,
2021, net debt increased to $4.0 billion as compared to $3.9
billion as of September 30, 2021, primarily driven by returns to
shareholders offset by free cash flows.
As of December 31, 2021 and September 30, 2021, the Company had
liquidity of $9.9 billion, consisting of cash and cash equivalents
of $4.4 billion and $5.5 billion of available credit lines10. As of
December 31, 2021, the average debt maturity was 5.8 years.
Key recent developments
- On February 4, 2022, ArcelorMittal announced plans for the
acceleration of its decarbonization plan with a €1.7 billion
investment in its Fos-sur-Mer and Dunkirk sites in France (while
maintaining equivalent production capacities), supported by the
Government. This investment will enable a transformation of
steelmaking in France and a total reduction of close to 40% or
7.8Mtpa in ArcelorMittal’s CO2 emissions in France by 2030.
Specifically, in Fos-sur-Mer, ArcelorMittal will build an Electric
Arc Furnace (EAF). This new unit will complement the ladle furnace
announced last March and supported by France’s recovery plan,
‘France Relance’. In Dunkirk, ArcelorMittal will build a 2.5Mt
Direct Reduction of Iron (DRI) unit to transform iron ore using
hydrogen instead of coal. This DRI will be coupled with an
innovative technology electric furnace and complemented by an
additional Electric Arc Furnace (EAF). Other investments are
already under way to continue to increase the proportion of scrap
steel used. The new industrial facilities will be operational
starting in 2027 and will gradually replace 3 out of 5 of
ArcelorMittal’s blast furnaces in France by 2030 (2 out of 3 in
Dunkirk, 1 out of 2 in Fos-sur-Mer).
- On January 14, 2022, ArcelorMittal announced that 45 million
treasury shares had been cancelled to keep the number of treasury
shares within appropriate levels. As a result of this cancellation,
ArcelorMittal now has 937,809,772 shares in issue (compared to
982,809,772 before the cancellation). Details on share buyback
programs can be found at:
https://corporate.arcelormittal.com/investors/equity-investors/share-buyback-program.
- On December 29, 2021, ArcelorMittal announced that it had
completed the fifth share buyback program announced on November 17,
2021 under the authorization given by the annual general meeting of
shareholders of June 8, 2021 (the "2021 AGM Authorization"). By
market close on December 28, 2021, ArcelorMittal had repurchased
34,080,049 shares for a total value of €885,729,034.96 (equivalent
to $999,999,819.63) at an approximate average price per share of
€25.99. This brought the total advance as part of its prospective
2022 capital return to shareholders (to be funded from 2021 surplus
cash flow under the capital return policy announced February 2021)
to $3.2 billion including $2 billion of share buy backs completed
and $1.2 billion payments related to the MCN as described
below.
- On December 22, 2021, ArcelorMittal announced that it had
determined the final repurchase price for its previously announced
repurchases of $395 million of its 5.50% Mandatorily Convertible
Subordinated Notes due 2023 (the "Notes"). The aggregate repurchase
price that ArcelorMittal paid for those Notes was $1,196 million.
The transactions closed on December 23, 2021. The repurchase of
this aggregate principal amount of Notes is equivalent to
repurchasing approximately 36.6 million shares of ArcelorMittal
common stock that would otherwise be issuable at maturity under the
Notes (at the minimum conversion ratio). Pursuant to the purchase
agreements the repurchased Notes have been cancelled and therefore
will not convert into common shares of the Company. Following
completion of the repurchases, approximately $608 million aggregate
principal amount of the Notes remain outstanding.
- On December 9, 2021, the Company announced it had made a $30
million investment in carbon recycling company, LanzaTech through
its XCarb™ innovation fund, the fourth investment the Company has
made through the fund since its launch in March 2021. The
investment further expands ArcelorMittal’s relationship with
LanzaTech, which commenced in 2015 when the Company first announced
plans to utilise LanzaTech’s carbon capture and re-use technology
at its plant in Ghent, Belgium.
- On November 17, 2021, ArcelorMittal announced that it had
completed the fourth share buyback program announced on July 29,
2021 under the 2021 AGM Authorization. By market close on November
16, 2021, ArcelorMittal had repurchased 67,404,066 shares for a
total value of €1,881,270,528.80 (equivalent to
US$2,199,999,614.74) at an approximate average price per share of
€27.91. On the same day, the Company commenced a new share buyback
program in the amount of $1 billion under the 2021 AGM
Authorization.
Cost improvement
In 2021, the Company achieved $0.6 billion of fixed cost savings
relating to its previously announced $1 billion structural
improvement plan. Savings were achieved through productivity gains
and footprint optimization (following closures at Krakow, coke
plant in Florange, and Saldanha); and SGA savings including a 20%
reduction in corporate office costs including headcount reduction.
The Company did not make progress against its plan related to
repairs and maintenance ("R&M") spend following the decision
taken to maintain R&M spend at higher levels to ensure
operational reliability.
The Company is now announcing a new 3-year $1.5 billion value
plan focused on creating value through well-defined commercial and
operational initiatives. This plan does not include the impact of
strategic projects (which will be followed separately). The plan
includes commercial initiatives, including volume/mix improvements
and operational improvements (primarily in variable costs). The
plan aims at protecting the EBITDA potential of the business from
rising inflationary pressures; improving its relative competitive
position vis-a-vis its peers and supporting sustainably higher
profits.
Capital return
In line with the Company's capital return
policy, the Board recommends an increase of the base annual
dividend to $0.38/share (from $0.30/share paid in 2021) to be paid
in June 2022, subject to the approval of shareholders at the AGM in
May 2022.
Given the favorable outlook for free cashflow in 2022, the
Company has initiated a new $1 billion share buy-back program for
1H 2022. This is the maximum based on the authorization provided by
shareholders at the AGM in June 2021. Additional authorization to
repurchase shares will be sought from shareholders at the 2022 AGM
(subject to cash generation).
The remaining surplus cash has accrued to the balance sheet in
2021. This headroom to our balance sheet targets provides strategic
optionality to consider M&A in support of our strategic targets
or further additional returns to shareholders in the future.
Financial calendar for 2022
- General meeting of shareholders: May 4, 2022: ArcelorMittal
Annual General Meeting ("AGM")
- Earnings results announcements: May 5, 2022: Earnings release
1Q 2022; July 28, 2022: Earnings release 2Q and half year 2022;
November 10, 2022: Earnings release 3Q and nine-months 2022
OutlookBased on the current
economic outlook, ArcelorMittal expects global apparent steel
consumption (“ASC”) in 2022 to grow between +0% to +1.0% (versus
growth of +4% in 2021).
Economic activity improved in 2021 as lockdown measures eased
and the global steel industry benefiting from a favorable supply
demand balance, supporting increasing utilization and improve
demand. Although there is some moderation of the tight market
conditions (and subject to pandemic-related macroeconomic
uncertainties), the Company expects overall ASC to grow in 2022
versus 2021 with regional differences highlighted below:
- In the US, ASC is expected to grow within a range of +1.0% to
+3.0% in 2022 (versus an estimated +20% growth in 2021). Automotive
is expected to grow strongly as semi-conductor shortages ease and
manufacturing sectors are supported by strong order backlogs and
low inventory of finished goods. Infrastructure expected to grow
due to beginnings of support from the $1.2 trillion infrastructure
plan.
- In Europe, ASC is expected to grow within a range of +0% to +2%
in 2022 (versus an estimated +14% growth in 2021), automotive
expected to grow strongly, with moderate growth in infrastructure
and construction to support underlying demand.
- In Brazil, ASC is expected to decline in 2022 in the range of
-8 to -10% (versus a healthy +23.0% estimated growth in 2021).
While ASC is expected to decline due to destocking, real demand is
expected to increase moderately in 2022 with a recovery in
automotive output offset by weakness in other steel-consuming
sectors.
- In the CIS, ASC in 2022 is expected to grow within a range of
+0% to +2% (versus a +3.0% estimated growth in 2021).
- In India, ASC in 2022 is expected to grow within a range of +6%
to +8% (versus +17.0% estimated growth in 2021).
- As a result, overall World ex-China ASC in 2022 is expected to
grow within the range of +2.5 to +3.0% (versus +11% in 2021)
supported by mild growth in our core developed markets and stronger
growth in India offset by weakness in Brazil.
- In China, overall demand is expected to continue to decline in
2022 to -2% to +0% (versus an estimated decline of -2% in 2021)
weak real estate is partially offset by a mild pick-up in
infrastructure.
Given the mild growth anticipated in ex-China ASC in 2022 vs.
2021 (+2.5 to +3.0% as described above), the Company expects steel
shipments in 2022 to grow by approximately +3% vs. 2021 levels
(including some mix benefits and recovery post logistics issues in
2021).
In addition, capex is expected to increase from $3.0 billion in
2021 to $4.5 billion in 2022. Including $0.2 billion of carry-over
from 2021, capex outside of strategic capex is expected to be $3.1
billion in 2022. Decarbonization capex is expected to be $0.3
billion in 2022 (net of government support). Capex on strategic
envelope projects is expected to be $1.1 billion, including: the
mix/growth investments at Vega and Monlevade in Brazil; iron ore
projects at Liberia, Serra Azul and Las Truchas; and the pellet
plant project in Ukraine and new section mill in Barra Mansa
(Brazil).
Based on current market conditions (including support from
automotive contract resets that have already occurred) the Company
expects strong cash flow generation in 2022 and has announced a
proposed increase in the base annual dividend to $0.38/share from
$0.30/share to be paid in June 2022, (subject to the approved of
shareholders at the AGM in May 2022) and a new $1.0 billion capital
return program by 1H 2022.
ArcelorMittal Condensed Consolidated Statement of
Financial Position1
|
In millions of U.S. dollars |
Dec 31,2021 |
Sept 30,2021 |
Dec 31,2020 |
|
ASSETS |
|
|
|
| Cash and
cash equivalents and restricted funds |
4,371 |
4,381 |
5,963 |
| Trade
accounts receivable and other |
5,143 |
5,572 |
3,072 |
|
Inventories |
19,858 |
18,806 |
12,328 |
| Prepaid
expenses and other current assets |
5,567 |
4,421 |
2,281 |
| Asset
held for sale11 |
— |
— |
4,329 |
|
Total Current Assets |
34,939 |
33,180 |
27,973 |
|
|
|
|
|
| Goodwill
and intangible assets |
4,425 |
4,309 |
4,312 |
| Property,
plant and equipment |
30,075 |
29,599 |
30,622 |
|
Investments in associates and joint ventures |
10,319 |
10,134 |
6,817 |
| Deferred
tax assets |
8,147 |
7,787 |
7,866 |
| Other
assets16 |
2,607 |
3,082 |
4,462 |
|
Total Assets |
90,512 |
88,091 |
82,052 |
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
Short-term debt and current portion of long-term debt |
1,913 |
1,796 |
2,507 |
| Trade
accounts payable and other |
15,093 |
14,108 |
11,525 |
| Accrued
expenses and other current liabilities |
7,161 |
7,527 |
5,596 |
|
Liabilities held for sale11 |
— |
— |
3,039 |
|
Total Current Liabilities |
24,167 |
23,431 |
22,667 |
|
|
|
|
|
| Long-term
debt, net of current portion |
6,488 |
6,453 |
9,815 |
| Deferred
tax liabilities |
2,369 |
1,953 |
1,832 |
| Other
long-term liabilities |
6,144 |
6,933 |
7,501 |
|
Total Liabilities |
39,168 |
38,770 |
41,815 |
|
|
|
|
|
| Equity
attributable to the equity holders of the parent |
49,106 |
47,116 |
38,280 |
|
Non-controlling interests |
2,238 |
2,205 |
1,957 |
|
Total Equity |
51,344 |
49,321 |
40,237 |
|
Total Liabilities and Shareholders’ Equity |
90,512 |
88,091 |
82,052 |
ArcelorMittal Condensed Consolidated Statement of
Operations1
|
|
Three months ended |
Twelve months ended |
|
In millions of U.S. dollars unless otherwise
shown |
Dec 31, 2021 |
Sept 30, 2021 |
Dec 31, 2020 |
Dec 31, 2021 |
Dec 31, 2020 |
|
Sales |
20,806 |
20,229 |
14,184 |
76,571 |
53,270 |
|
Depreciation (B) |
(712) |
(590) |
(711) |
(2,523) |
(2,960) |
|
Impairment items (B) |
218 |
— |
(331) |
218 |
133 |
|
Exceptional items (B) |
— |
(123) |
1,314 |
(123) |
636 |
|
Operating income (A) |
4,558 |
5,345 |
1,998 |
16,976 |
2,110 |
| Operating
margin % |
21.9 % |
26.4 % |
14.1 % |
22.2 % |
4.0 % |
|
|
|
|
|
|
|
| Income
from associates, joint ventures and other investments |
383 |
778 |
7 |
2,204 |
234 |
| Net
interest expense |
(49) |
(62) |
(88) |
(278) |
(421) |
| Foreign
exchange and other net financing loss |
(111) |
(339) |
(270) |
(877) |
(835) |
|
Income before taxes and non-controlling
interests |
4,781 |
5,722 |
1,647 |
18,025 |
1,088 |
|
Current tax expense |
(678) |
(938) |
(373) |
(2,953) |
(839) |
|
Deferred tax benefit / (expense) |
46 |
56 |
15 |
493 |
(827) |
| Income
tax expense |
(632) |
(882) |
(358) |
(2,460) |
(1,666) |
|
Income / (loss) including non-controlling
interests |
4,149 |
4,840 |
1,289 |
15,565 |
(578) |
|
Non-controlling interests income |
(104) |
(219) |
(82) |
(609) |
(155) |
|
Net income / (loss) attributable to equity holders of the
parent |
4,045 |
4,621 |
1,207 |
14,956 |
(733) |
|
|
|
|
|
|
|
|
Basic earnings / (loss) per common share ($) |
3.93 |
4.17 |
1.01 |
13.53 |
(0.64) |
|
Diluted earnings / (loss) per common share ($) |
3.92 |
4.16 |
1.00 |
13.49 |
(0.64) |
|
|
|
|
|
|
|
|
Weighted average common shares outstanding (in millions) |
1,030 |
1,109 |
1,199 |
1,105 |
1,140 |
|
Diluted weighted average common shares outstanding (in
millions) |
1,033 |
1,112 |
1,204 |
1,108 |
1,140 |
|
|
|
|
|
|
|
|
OTHER INFORMATION |
|
|
|
|
|
|
EBITDA (C = A-B) |
5,052 |
6,058 |
1,726 |
19,404 |
4,301 |
| EBITDA
Margin % |
24.3 % |
29.9 % |
12.2 % |
25.3 % |
8.1 % |
|
|
|
|
|
|
|
| Total
group iron ore production (Mt) |
13.4 |
13.0 |
15.3 |
50.9 |
58.0 |
| Crude
steel production (Mt) |
16.5 |
17.2 |
18.8 |
69.1 |
71.5 |
| Steel
shipments (Mt) |
15.8 |
14.6 |
17.3 |
62.9 |
69.1 |
ArcelorMittal Condensed Consolidated Statement of Cash
flows1
|
|
Three months ended |
Twelve months ended |
|
In millions of U.S. dollars |
Dec 31, 2021 |
Sept 30, 2021 |
Dec 31, 2020 |
Dec 31, 2021 |
Dec 31, 2020 |
|
Operating activities: |
|
|
|
|
|
|
Income /(loss) attributable to equity holders of the
parent |
4,045 |
4,621 |
1,207 |
14,956 |
(733) |
|
Adjustments to reconcile net income/ (loss) to net cash provided by
operations: |
|
|
|
|
|
|
Non-controlling interests income |
104 |
219 |
82 |
609 |
155 |
|
Depreciation and impairment items |
494 |
590 |
1,042 |
2,305 |
2,827 |
|
Exceptional items |
— |
123 |
(1,314) |
123 |
(636) |
| Income
from associates, joint ventures and other investments |
(383) |
(778) |
(7) |
(2,204) |
(234) |
| Deferred
tax (benefit) / expense |
(46) |
(56) |
(15) |
(493) |
827 |
| Change in
working capital |
22 |
(2,896) |
925 |
(6,409) |
1,496 |
| Other
operating activities (net) |
(82) |
619 |
(504) |
1,018 |
380 |
|
Net cash provided by operating activities (A) |
4,154 |
2,442 |
1,416 |
9,905 |
4,082 |
|
Investing activities: |
|
|
|
|
|
| Purchase
of property, plant and equipment and intangibles (B) |
(1,145) |
(675) |
(668) |
(3,008) |
(2,439) |
| Other
investing activities (net) |
(90) |
1,184 |
262 |
2,668 |
428 |
|
Net cash (used in) / provided by investing
activities |
(1,235) |
509 |
(406) |
(340) |
(2,011) |
|
Financing activities: |
|
|
|
|
|
| Net
proceeds / (payments) relating to payable to banks and long-term
debt |
100 |
(806) |
(1,506) |
(3,562) |
(2,395) |
| Dividends
paid to ArcelorMittal shareholders |
— |
(28) |
— |
(312) |
— |
| Dividends
paid to minorities (C) |
(21) |
(157) |
(16) |
(260) |
(181) |
| Share
buyback |
(1,820) |
(1,703) |
(487) |
(5,170) |
(500) |
|
Common share offering |
— |
— |
— |
— |
740 |
|
(Payments) / proceeds from Mandatorily Convertible Notes |
(1,196) |
— |
— |
(1,196) |
1,237 |
| Lease
payments and other financing activities (net) |
(53) |
(46) |
(218) |
(398) |
(399) |
|
Net cash used in financing activities |
(2,990) |
(2,740) |
(2,227) |
(10,898) |
(1,498) |
| Net
(decrease) / increase in cash and cash equivalents |
(71) |
211 |
(1,217) |
(1,333) |
573 |
| Cash and
cash equivalents transferred from / (to) assets held for sale |
— |
— |
67 |
3 |
(3) |
| Effect of
exchange rate changes on cash |
13 |
(9) |
234 |
(55) |
163 |
|
Change in cash and cash equivalents |
(58) |
202 |
(916) |
(1,385) |
733 |
|
|
|
|
|
|
|
|
Free cash flow (D=A+B+C)17 |
2,988 |
1,610 |
732 |
6,637 |
1,462 |
Appendix 1: Product shipments by
region(1)
|
(000'kt) |
4Q 21 |
3Q 21 |
4Q 20 |
12M 21 |
12M 20 |
| Flat |
1,548 |
1,613 |
3,462 |
6,879 |
15,422 |
| Long |
739 |
770 |
807 |
3,088 |
2,884 |
|
NAFTA |
2,205 |
2,280 |
4,134 |
9,586 |
17,902 |
| Flat |
1,790 |
1,523 |
1,324 |
6,425 |
4,722 |
| Long |
1,256 |
1,325 |
1,268 |
5,332 |
4,740 |
|
Brazil |
3,034 |
2,829 |
2,575 |
11,695 |
9,410 |
| Flat |
5,788 |
5,333 |
6,210 |
23,485 |
23,907 |
| Long |
2,421 |
2,121 |
2,246 |
9,236 |
8,550 |
|
Europe |
8,325 |
7,551 |
8,569 |
33,182 |
32,873 |
| CIS |
2,067 |
1,684 |
1,912 |
7,883 |
7,685 |
|
Africa |
531 |
679 |
458 |
2,473 |
2,190 |
|
ACIS |
2,597 |
2,367 |
2,373 |
10,360 |
9,881 |
Note: “Others and eliminations” are not presented in the
table
Appendix 2a: Capital
expenditures(1,2)
|
(USDm) |
4Q 21 |
3Q 21 |
4Q 20 |
12M 21 |
12M 20 |
|
NAFTA |
104 |
118 |
82 |
369 |
527 |
|
Brazil |
171 |
102 |
67 |
412 |
216 |
|
Europe |
473 |
231 |
326 |
1,282 |
1,040 |
|
ACIS |
266 |
139 |
134 |
619 |
476 |
|
Mining |
127 |
78 |
46 |
302 |
140 |
|
Total |
1,145 |
675 |
668 |
3,008 |
2,439 |
Note: “Others” are not presented in the table
Appendix 2b: Capital expenditure projects
The following tables summarize the Company’s principal growth
and optimization projects involving significant capex.
For projects in which the targeted addition to EBITDA is
indicated, such amount is based on numerous assumptions as to
selling prices and input costs in particular, and for projects
relating to Mining / iron ore mines, conservative long term iron
ore prices.
Completed projects
|
Segment |
Site / unit |
Project |
Capacity / details |
Key date / forecast completion |
|
NAFTA |
Mexico |
New hot strip mill |
Production capacity of 2.5Mt/year |
2021 (a) |
Ongoing projects
|
Segment |
Site / unit |
Project |
Capacity / details |
Key date / forecast completion |
|
NAFTA |
ArcelorMittal Dofasco (Canada) |
Hot strip mill modernization |
Replace existing three end of life coilers with two state of the
art coilers and new runout tables |
1H 2022 (b) |
|
NAFTA |
ArcelorMittal Dofasco (Canada) |
#5 CGL conversion to AluSi® |
Addition of up to 160kt/year Aluminum Silicon (AluSi®) coating
capability to #5 Hot-Dip Galvanizing Line for the production of
Usibor® steels |
2H 2022 (c) |
|
Brazil |
ArcelorMittal Vega Do Sul |
Expansion project |
Increase hot dipped / cold rolled coil capacity and construction of
a new 700kt continuous annealing line (CAL) and continuous
galvanising line (CGL) combiline |
4Q 2023 (d) |
|
Mining |
Liberia mine |
Phase 2 premium product expansion project |
Increase production capacity to 15Mt/year |
4Q 2023 (e) |
|
NAFTA |
Las Truchas mine (Mexico) |
Revamping and capacity increase to 2.3MT |
Revamping project with 1Mtpa pellet feed capacity increase (to 2.3
Mt/year) with DRI concentrate grade capability |
2H 2023 (f) |
|
Brazil |
Serra Azul mine |
4.5Mtpa direct reduction pellet feed plant |
Facilities to produce 4.5Mt/year DRI quality pellet feed by
exploiting compact itabirite iron ore |
2H 2023 (g) |
|
Brazil |
Monlevade |
Sinter plant, blast furnace and melt shop |
Increase in liquid steel capacity by 1.0Mt/year; Sinter feed
capacity of 2.3Mt/year |
2H 2024 (h) |
|
ACIS |
ArcelorMittal Kryvyi Rih(Ukraine) |
New Pellet Plant |
Facilities to produce 5.0 Mtpa pellets, replacing two existing
sinter plants ensuring environmental compliance and improving
productivity |
4Q 2023 (i) |
|
Brazil |
Barra Mansa |
New section mill |
Increase capacity of HAV bars and sections by 0.4Mt/pa |
1Q 2024 (j) |
a) On September 28, 2017, ArcelorMittal announced a major $1.0
billion investment programme at its Mexican operations, which is
focused on building ArcelorMittal Mexico’s downstream capabilities,
sustaining the competitiveness of its mining operations and
modernizing its existing asset base. The programme is designed to
enable ArcelorMittal Mexico to meet the anticipated increased
demand requirements from domestic customers, realize in full
ArcelorMittal Mexico’s production capacity of 5.3Mt and
significantly enhance the proportion of higher added-value products
in its product mix. The main investment will be the construction of
a new hot strip mill. Upon completion, the project will enable
ArcelorMittal Mexico to produce c.2.5Mt of flat rolled steel, long
steel c.1.5Mt and the remainder made up of semi-finished slabs.
Coils from the new hot strip mill will be supplied to domestic,
non-auto, general industry customers. The hot strip mill project
commenced late 4Q 2017, and the first coils were produced at the
end of 2021 with ramp up expected to full capacity during 2022. The
hot skin pass mill (HSPM) is expected to be completed in 2H 2022.
In addition to the HSM project, a push pull pickling line (PPPL) is
to be constructed to capture additional domestic volume through hot
rolled pickled and oiled products. The PPPL has a capacity of up to
0.75Mtpa, and the first pickled and oiled coils are expected to be
produced by 2H 2024.
b) Investment in ArcelorMittal Dofasco (Canada) to modernize the
hot strip mill. The project is to install two new state of the art
coilers and runout tables to replace three end of life coilers. The
strip cooling system will be upgraded and include innovative power
cooling technology to improve product capability. The project is
estimated to be completed in 1H 2022. The project is estimated to
add >$25 million in EBITDA on full completion and post ramp
up.
c) Investment to replace #5 Hot-Dip Galvanizing Line Galvanneal
coating capability with 160kt/year Aluminum Silicon (AluSi®)
capability for the production of ArcelorMittal’s patented Usibor®
Press Hardenable Steel for automotive structural and safety
components. With the investment, ArcelorMittal Dofasco will become
the only Canadian producer of AluSi® coated Usibor®. This
investment complements additional strategic North America
developments, including a new EAF and caster at Calvert in the US
and a new hot strip mill in Mexico, and will allow to capitalize on
increasing Auto Aluminized PHS demand in North America. The project
is expected to be completed in 2022, with the first coil planned
for 2H 2022. The project is estimated to add >$40 million in
EBITDA on full completion and post ramp up.
d) In February 2021, ArcelorMittal announced the resumption of
the Vega Do Sul expansion to provide an additional 700kt of
cold-rolled annealed and galvanized capacity to serve the growing
domestic market. The ~$0.35 billion investment programme to
increase rolling capacity with construction of a new continuous
annealing line and CGL combiline (and the option to add a ca. 100kt
organic coating line to serve construction and appliance segments),
and upon completion, will strengthen ArcelorMittal’s position in
the fast growing automotive and industry markets through Advanced
High Strength Steel products. The investments will look to
facilitate a wide range of products and applications whilst further
optimizing current ArcelorMittal Vega facilities to maximize site
capacity and its competitiveness, considering comprehensive digital
and automation technology. Equipment delivery is progressing in
accordance with plan. Civil works and erection of acid regeneration
plant and repair and inspection line is well advanced. The project
is estimated to be completed in 4Q 2023 and potentially add
>$0.1 billion in EBITDA on full completion and post ramp up.
e) ArcelorMittal Liberia has been operating a 5Mt direct
shipping ore (DSO) since 2011 (Phase 1). In 2013, the Company had
started construction of a Phase 2 project that envisaged the
construction of 15Mtpa of concentrate sinter fines capacity and
associated infrastructure; this project was then suspended due to
the onset of Ebola in West Africa and the subsequent force-majeure
declaration by the onsite contracting companies. On September 10,
2021, ArcelorMittal signed with the Government of the Republic of
Liberia an amendment to its Mineral Development Agreement which is
currently under the legislative ratification process. Final
detailed engineering is in progress, whilst site preparation and
tenders for key construction contracts and remaining equipment are
underway. Under this project, first concentrate product is expected
in late 2023, ramping up to 15Mtpa thereafter. The capex required
to conclude the project, estimated at approximately $0.8 billion,
is under review given impacts of inflation and enlarged scope.
Under the agreement, the Company has further expansion
opportunities up to 30Mtpa. Other users may be allowed to invest
for additional rail capacity. The project is estimated to add
approximately $250 million in EBITDA on full completion and post
ramp up.
f) ArcelorMittal Mexico is investing ~$150 million to increase
pellet feed production by 1Mtpa to 2.3Mtpa and improve concentrate
grade in Las Truchas. This project will enable concentrate
production to the blast furnace (BF) route (2.0Mtpa) and direct
reduced iron (DRI) route (0.3Mtpa) for a total of 2.3Mtpa. Primary
target is to supply ArcelorMittal Mexico steel operations with high
quality feed. Procurement of long lead time items (mills and pumps)
and early works have started. Detailed engineering is ongoing. Road
works are in progress. Production start-up is estimated in 2H 2023
and estimated to add approximately $50 million in EBITDA on full
completion and post ramp up.
g) Approximately $350 million investment at Serra Azul (Brazil)
to construct facilities to produce 4.5Mtpa of DRI quality pellet
feed to primarily supply ArcelorMittal Mexico steel operation. The
project will allow to mine the compact itabirite iron ore.
Environmental and operations licenses have been cleared. Detailed
engineering is ongoing, hiring of drilling companies and
procurement of main equipment is initiated. Project start-up is
estimated in 2H 2023. The project is estimated to add ~$100 million
in EBITDA on full completion and post ramp up.
h) The Monlevade upstream expansion project consisting of the
sinter plant, blast furnace and meltshop has recommenced in late
2021, following the anticipated improvement in Brazil domestic
market. Basic engineering is being finalized and hiring of civil
works and piling companies has started. The project is estimated to
be completed in 2H 2024 with a capex requirement of approximately
$0.5 billion. The project is estimated to add >$0.2 billion in
EBITDA on full completion and post ramp up.
i) Investment in ArcelorMittal Kryvyi Rih to build a new 5.0Mtpa
pellet plant which, together with the ongoing modernization of
Sinter Plant 2, will ensure that all sinter operations in Kryvyi
Rih are compliant with dust emissions environmental regulations and
will enable cost reduction, quality and productivity improvement.
In addition, the project will enable a CO2 footprint improvement by
750kt CO2/yr. First pellet is expected to be produced in 4Q 2023
with a capex requirement of approximately $0.3 billion. The project
is estimated to add approximately $70 million in EBITDA on full
completion and post ramp up.
j) New ~$0.25 billion investment in sections mill at Barra Mansa
(Brazil) with 400ktpa production capacity. The aim of the project
is to deliver higher added value products (HAV) (Merchant Bar and
Special Bars) to increase domestic market share in HAV products and
to enhance profitability. The project is expected to commence in
2022 and be completed by 1Q 2024. The project is estimated to
generate $0.1 billion EBITDA on full completion and post ramp
up.
Appendix 3: Debt repayment schedule as of December 31,
2021
|
(USD billion) |
2022 |
2023 |
2024 |
2025 |
2026 |
>2026 |
Total |
|
Bonds |
0.6 |
1.3 |
0.9 |
1.0 |
0.4 |
1.6 |
5.8 |
|
Commercial paper |
0.5 |
— |
— |
— |
— |
— |
0.5 |
|
Other loans |
0.8 |
0.3 |
0.2 |
0.2 |
0.1 |
0.5 |
2.1 |
|
Total gross debt |
1.9 |
1.6 |
1.1 |
1.2 |
0.5 |
2.1 |
8.4 |
Appendix 4: Reconciliation of gross debt to net debt as
of December 31, 2021
|
(USD million) |
Dec 31, 2021 |
Sept 30, 2021 |
Dec 31, 2020 |
|
Gross debt (excluding that held as part of the liabilities
held for sale) |
8,401 |
8,249 |
12,322 |
|
Gross debt held as part of the liabilities held for sale |
— |
— |
24 |
| Gross
debt |
8,401 |
8,249 |
12,346 |
|
Less: Cash and cash equivalents and restricted funds |
(4,371) |
(4,381) |
(5,963) |
|
Less: Cash and cash equivalents and restricted funds held as part
of the assets held for sale |
— |
— |
(3) |
|
Net debt (including that held as part of assets and the
liabilities held for sale) |
4,030 |
3,868 |
6,380 |
|
|
|
|
|
|
Net debt / LTM EBITDA |
0.2 |
0.2 |
1.5 |
Appendix 5: Adjusted net income / (loss) as of December
31, 2021
|
(USD million) |
4Q 21 |
3Q 21 |
4Q 20 |
12M 21 |
12M 20 |
|
Net income / (loss) |
4,045 |
4,621 |
1,207 |
14,956 |
(733) |
|
Impairment items |
218 |
— |
(331) |
218 |
133 |
|
Exceptional items |
— |
(123) |
1,314 |
(123) |
636 |
|
Derecognition of deferred tax assets on disposal of ArcelorMittal
USA |
— |
— |
— |
— |
(624) |
|
Adjusted net income / (loss) |
3,827 |
4,744 |
224 |
14,861 |
(878) |
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:Adjusted net
income / (loss): refers to reported net income/(loss) less
impairment items, exceptional items and derecognition of deferred
tax assets on disposal of ArcelorMittal USA.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 and restricted
funds: represents cash and cash equivalents, restricted
cash, restricted funds 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.EPS: refers to
basic or diluted earnings/loss 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 (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 (including that held as part of the liabilities
held for sale).Impairment items: refers to
impairment charges net of reversals. Liquidity:
cash and cash equivalents and restricted funds 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 and restricted funds
(including those held as part of assets and liabilities held for
sale).Net debt/LTM EBITDA: refers to Net debt
divided by EBITDA (as used in the Company’s financial reporting)
over the last twelve months.Net interest expense:
includes interest expense less interest incomeOn-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.Operating results: refers to
operating income/(loss).Operating segments: NAFTA
segment includes the Flat, Long and Tubular operations of Canada,
Mexico; and also includes all Mexico mines (for 2020 and 2021
onwards) and Hibbing, Minorca, Princeton mines (for each of the
periods of 2020, as they were included in the ArcelorMittal USA
assets sold in December 2020). 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 capital 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). Iron ore reference
prices: refers to iron ore prices for 62% Fe CFR
China.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 result of the segments to
reflect corporate costs, income from non-steel operations (e.g.,
logistics and shipping services) and the elimination of stock
margins between the segments. This press release also includes
certain non-GAAP financial/alternative performance measures.
ArcelorMittal presents EBITDA, and EBITDA/tonne, Equity book value
per share, which are non-GAAP financial/alternative performance
measures and calculated as shown in the Condensed Consolidated
Statement of Operations, as additional measures to enhance the
understanding of operating performance. ArcelorMittal believes such
indicators are relevant to describe trends relating to cash
generating activity and provide management and investors with
additional information for comparison of the Company’s operating
results to the operating results of other companies. The Company’s
EBITDA objectives for certain capital expenditure projects are
based on the same accounting policies as those applied in the
Company’s financial statements prepared in accordance with IFRS.
ArcelorMittal also presents 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) as it believes it is a useful measure for the underlying
business performance excluding impairment items, exceptional items
and derecognition of deferred tax assets on disposal of
ArcelorMittal USA. ArcelorMittal also presents free cash flow
(FCF), which is a non-GAAP financial/alternative performance
measure calculated as shown in the Condensed Consolidated Statement
of Cash Flows, because it believes it is a useful supplemental
measure for evaluating the strength of its cash generating
capacity. The Company has revised the definition of free cash flow
to include dividends paid to minority shareholders in order to
reflect the measure it will use to determine dividends that will be
paid under its new dividend policy. The Company also presents the
ratio of net debt to EBITDA for the last twelve-month period, which
investors may find useful in understanding the Company's ability to
service its debt. Such non-GAAP/alternative performance measures
may not be comparable to similarly titled measures applied by other
companies. Non-GAAP financial/alternative performance measures
should be read in conjunction with, and not as an alternative for,
ArcelorMittal's financial information prepared in accordance with
IFRS.
- New segmentation reporting: Following the Company’s steps to
streamline and optimize the business, primary responsibility for
captive mining operations has been moved to the Steel segments
(which are primary consumers of the mines' output). The Mining
segment will retain primary responsibility for the operation of
ArcelorMittal Mines Canada ("AMMC") and Liberia and will continue
to provide technical support to all mining operations within the
Company. As a result, effective 2Q 2021, ArcelorMittal has
retrospectively amended its presentation of reportable segments to
reflect this organizational change, as required by IFRS. Only the
operations of AMMC and Liberia are reported within the Mining
segment. The results of each other mine are accounted for within
the steel segment that it primarily supplies. Summary of changes:
NAFTA: all Mexico mines (for 2020 and 2021 onwards) and Hibbing,
Minorca, Princeton mines (each quarter of 2020, as they were
included in the ArcelorMittal USA assets sale in December 2020);
Brazil: Andrade and Serra Azul mines; Europe: ArcelorMittal
Prijedor mine (Bosnia and Herzegovina); ACIS: Kazakhstan and
Ukraine mines; and Mining: only AMMC and Liberia iron ore
mines.
- LTIF figures presented for FY 2021 of 0.79x excludes
ArcelorMittal Italia (deconsolidated as from 2Q 2021 onwards) and
ArcelorMittal USA (no longer in scope as sold on December 9, 2020)
and compares with 0.61x in FY 2020.
- Impairment gain for 12M 2021 amounted to $218 million following
improved cash flow projections in the context of decarbonization
plans in Sestao (Spain) (partially reversing the impairment
recognized in 2015). Net impairment gain for 12M 2020 amounted to
$133 million included the partial reversal of impairment charges
(recorded in 2019) following the sale of ArcelorMittal USA ($660
million), offset in part by impairment charges of $331 million
related to revised future cashflows of plate assets in Europe,
charges of $104 million following the permanent closure of a blast
furnace and steel plant in Krakow (Poland) and charges related to
the permanent closure of the coke plant in Florange (France) of $92
million.
- Exceptional items for 12M 2020 were net gains of $636 million
related to the gain on disposal of ArcelorMittal USA ($1.5 billion)
partially offset by site restoration and termination charges
following the permanent closure of a blast furnace and steel plant
in Krakow (Poland) totaling $146 million and inventory related
charges in NAFTA and Europe ($0.7 billion).
- See Appendix 5 for reconciliation of adjusted net income
/(loss).
- AMNS India has plans to debottleneck operations (steel shop and
rolling parts) and achieve capacity of 8.8Mt per annum and
medium-term plans to expand and grow to 14Mt per annum and then to
18Mt per annum. The Thakurani mines is now operating at full
5.5Mtpa capacity since 1Q 2021, while the second Odisha pellet
plant has been commission and started in September 2021, adding
6Mtpa for a total 20Mtpa of pellet capacity. In addition, in
September 2021, AMNS India commenced operations at Ghoraburhani -
Sagasahi iron ore mine in Odisha. The mine is set to produce 2Mtpa
of high-quality iron ore in the current year and gradually ramp up
production to a rated capacity of 7.2Mtpa and contribute
significantly to meeting AMNS India’s long-term raw material
requirements. AMNS India signed a Memorandum of Understanding
("MoU") with the Government of Odisha to set-up an integrated steel
plant with a 12Mtpa capacity in Kendrapara district of state
Odisha. Pre-feasibility study report was submitted to the state
government in 3Q 2021, and AMNS India is currently engaging with
them for further studies and clearances.
- AMNS Calvert ("Calvert") has plans to construct a new 1.5Mt EAF
and caster to be completed 1H 2023. The joint venture is to invest
$775 million.
- ArcelorMittal Mines Canada, otherwise known as ArcelorMittal
Mines and Infrastructure Canada.
- On December 19, 2018, ArcelorMittal signed a $5,500,000,000
Revolving Credit Facility, with a five-year maturity plus two
one-year extension options. During the fourth quarter of 2019,
ArcelorMittal executed the option to extend the facility to
December 19, 2024. The extension was completed for $5.4 billion of
the available amount, with the remaining $0.1 billion remaining
with a maturity of December 19, 2023. In December 2020,
ArcelorMittal executed the second option to extend the facility,
and the new maturity is now extended to December 19, 2025. As of
December 31, 2021, the $5.5 billion revolving credit facility was
fully available.
- Assets and liabilities held for sale as of December 31, 2020
included the assets and liabilities of ArcelorMittal Italia and
plate assets in Europe.
- XCarb™ is designed to bring together all of ArcelorMittal’s
reduced, low and zero-carbon products and steelmaking activities,
as well as wider initiatives and green innovation projects, into a
single effort focused on achieving demonstrable progress towards
carbon neutral steel. Alongside the new XCarb™ brand, we have
launched three XCarb™ initiatives: the XCarb™ innovation fund,
XCarb™ green steel certificates and XCarb™ recycled and renewably
produced for products made via the Electric Arc Furnace route using
scrap. The Company is offering green steel using a system of
certificates (XCarb® green certificates). These
will be issued by an independent auditor to certify tonnes of CO2
savings achieved through the Company’s investment in
decarbonization technologies in Europe. Net-zero equivalence is
determined by assigning CO2 savings certificates equivalent to CO2
per tonne of steel produced in 2018 as the reference. The
certificates will relate to the tonnes of CO2 saved in total, as a
direct result of the decarbonization projects being implemented
across a number of its European sites.
- The Investment Agreement stipulates a second equity injection
by Invitalia, of up to €680 million, to fund the completion
of the purchase of Ilva’s business by Acciaierie d’Italia,
subject to certain conditions precedent to be met by May 2022. At
this point, Invitalia’s shareholding in Acciaierie d’Italia would
increase to 60%, with ArcelorMittal to invest up to €70 million to
retain a 40% shareholding and joint control over the company. The
conditions precedent include: the amendment of the existing
environmental plan to account for changes in the new industrial
plan; the lifting of all criminal seizures on the Taranto plant;
and the absence of restrictive measures – in the context of
criminal proceedings where Ilva is a defendant – being imposed
against Acciaierie d’Italia Holding or its subsidiaries. In case
conditions precedent are not met, then the Acciaierie d’Italia
Holding would not be required to complete the purchase of Ilva’s
assets and its capital invested would be returned.
- In addition to the AMNS India and Calvert joint ventures, the
Company has important investments in China that provide valuable
dividend streams and growth optionality. VAMA, our 50:50 joint
venture with Hunan Valin, is a state-of-the-art facility focused on
rolling steel for high-demanding applications in particular
automotive. The business is performing well and plans to expand the
current capacity by 40% to 2Mtpa over the next 2 years, financed
from its own resources. The investment will allow VAMA to broaden
its product portfolio and further enhance its competitiveness. This
will in turn enable VAMA to meet the growing demand of high value
add solutions from the Chinese automotive / new energy vehicle
(NEV) market and propel it to be among the top automotive steel
players in China by 2025. ArcelorMittal also owns a 37% interest in
China Oriental, one of the largest H-Beam producers in China which
has recently upgraded its asset portfolio and benefits from a
strong balance sheet position.
- On November 1, 2018, ArcelorMittal Investco Italy Srl completed
the acquisition of Ilva Spa (former name of ArcelorMittal Italia)
and its subsidiaries. ArcelorMittal was the principal partner in AM
Investco with 94.45% equity stake in the consortium, with Banca
Intesa Sanpaolo holding 5.55%. ISP interest was subject to put and
call option arrangement. The put option was exercised in December
2020 simultaneous to the signing of an investment agreement with
Invitalia.
- Other assets include the main listed investment of Erdemir
(12%) at market value of $885 million and $792 million as of
December 31, 2021 and September 30, 2021, respectively. As of
December 31, 2020, other assets included amongst others the listed
investment of Cleveland Cliffs (16%) at market value of $1,988
million and Erdemir (12%) at market value of $850 million.
- During 3Q 2021, the Company revised the definition of free cash
flow to include dividends paid to minority shareholders in order to
reflect the measure it will use to determine dividends that will be
paid under its new dividend policy. The comparative figures for
free cash flow under the prior definition of cash flow from
operations less capex were inflows in 4Q 2021 of $3,009 million,
$1,767 million for 3Q 2021, $748 million for 4Q 2020, $6,897
million for 12M 2021 and $1,643 million for 12M 2020.
- Segment “Other & eliminations” EBITDA result was an income
of $70 million in 4Q 2021 as compared to a loss of $209 million in
3Q 2021 and to a loss of $87 million in 4Q 2020 principally due to
the decrease of the stock margin eliminations driven by the
decrease during the quarter of the iron ore market price on
intra-group stock sales between steel and mining businesses.
- FY 2021 figures include $0.1 billion capex related to
ArcelorMittal Italia which has been deconsolidated from 2Q 2021
onwards).
- On April 1, 2018, ArcelorMittal completed the acquisition of
Votorantim Siderurgia (subsequently renamed ArcelorMittal Sul
Fluminense "AMSF"), Votorantim S.A.'s long steel business in Brazil
pursuant to which Votorantim Siderurgia became a wholly-owned
subsidiary of ArcelorMittal Brasil. The acquisition was completed
through the issuance of preferred shares to Votorantim S.A.
representing a 2.99% interest in ArcelorMittal Brasil. Pursuant to
the shareholders' agreement, such preferred shares are subject to
put and call option arrangements exercisable by Votorantim S.A. and
ArcelorMittal Brasil between July 1, 2019 and December 31, 2022 and
between January 1, 2023 and December 31, 2024, respectively. The
Company determined that it has a present ownership interest in the
preferred shares subject to the put option. In 3Q 2021, the Company
recognized a $82 million charge in connection with the put option
granted to Votorantim partially reversed in 4Q 2021, and for which
ArcelorMittal recognized a liability corresponding to the net
present value of the redemption amount based on past and future
EBITDA projections subject to certain adjustments.
- Total steel shipments for 12M 2021 were 62.9 million metric
tonnes ("Mt"), lower as compared to 69.1Mt in 12M 2020 due to the
reduced scope following the sale of ArcelorMittal USA on December
9, 2020 and ArcelorMittal Italia, deconsolidated as from April 14,
2021. Adjusted for scope, steel shipments increased by 9.2% driven
by the broad based recovery in demand following the impacts of
COVID-19 on 2020. Adjusted for scope, all segments experienced year
on year shipment growth: Europe +8.9%, Brazil +24.3%, ACIS +4.8%
and NAFTA +8.0%.
- 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. FY 2021 equity of
$49.1bn divided by 967 million shares equals $51/sh. FY 2020 equity
of $38.3bn divided by 1,189 million shares equals $32/sh.
- Strategic capex envelope of $3.1 billion represents total to be
spent on strategic project in the period from 2021 to 2024.
Specifically, $0.2 billion of the $3.1 billion has been spent
through the end of 2021.
- $1.1 billion estimate of additional contribution to EBITDA, is
based on assumptions as to selling prices and input costs in
particular. Mining EBITDA assumptions are based on conservative
long term iron ore prices
Fourth quarter 2021 earnings analyst
conference callArcelorMittal management will host a
conference call for members of the investment community to present
and comment on the three-month and twelve-month periods ended
December 31, 2021 on: Thursday February 10, 2022 at 9.30am
US Eastern time; 14.30pm London time and 15.30pm CET.
|
The dial in numbers are: |
|
|
|
Location |
Toll free dial in numbers |
Local dial in numbers |
Participant |
|
UK local: |
0808 238 0676 |
+44 (0)203 057 6900 |
7995055# |
|
US local: |
+1 866 220 1433 |
+1 347 903 0960 |
7995055# |
|
France: |
0805 101 469 |
+33 1 7070 6079 |
7995055# |
|
Germany: |
0800 588 9185 |
+49 69 2222 2624 |
7995055# |
|
Spain: |
900 828 532 |
+34 914 144 464 |
7995055# |
|
Luxembourg: |
800 23 023 |
+352 2786 0311 |
7995055# |
Join the call via telephone using the participant code 7995055#
or alternatively use the live audio webcast link.
https://interface.eviscomedia.com/player/1141/
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 may contain forward-looking information and statements
about ArcelorMittal and its subsidiaries. These statements include
financial projections and estimates and their underlying
assumptions, statements regarding plans, objectives and
expectations with respect to future operations, products and
services, and statements regarding future performance.
Forward-looking statements may be identified by the words
“believe”, “expect”, “anticipate”, “target” or similar expressions.
Although ArcelorMittal’s management believes that the expectations
reflected in such forward-looking statements are reasonable,
investors and holders of ArcelorMittal’s securities are cautioned
that forward-looking information and statements are subject to
numerous risks and uncertainties, many of which are difficult to
predict and generally beyond the control of ArcelorMittal, that
could cause actual results and developments to differ materially
and adversely from those expressed in, or implied or projected by,
the forward-looking information and statements. These risks and
uncertainties include those discussed or identified in the filings
with the Luxembourg Stock Market Authority for the Financial
Markets (Commission de Surveillance du Secteur Financier) and the
United States Securities and Exchange Commission (the “SEC”) made
or to be made by ArcelorMittal, including ArcelorMittal’s latest
Annual Report on Form 20-F on file with the SEC. ArcelorMittal
undertakes no obligation to publicly update its forward-looking
statements, whether as a result of new information, future events,
or otherwise.
About
ArcelorMittalArcelorMittal is the world's leading steel
and mining company, with a presence in 60 countries and an
industrial footprint in 18 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 largest producers of iron ore. With a
geographically diversified portfolio of iron ore 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 2021, ArcelorMittal had revenues of $76.6
billion and crude steel production of 69.1 million metric tonnes,
while own iron ore production reached 50.9 million metric
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: https://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
- 4Q21 Earnings release FINAL 100222.pdf
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