ArcelorMittal reports first quarter 2022 results
Luxembourg, May 5, 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-month period ended March 31, 2022.
1Q 2022 Key highlights:
- Health and safety focus: Protecting the health
and wellbeing of employees remains the Company’s overarching
priority; LTIF rate of 0.69x in 1Q 2022
- Ukraine update: At the onset of the war in
Ukraine, the Company announced the suspension of operations to
protect its people and assets. Since then we have slowly restarted
operations, and are currently operating one of three blast
furnaces18
- Operating income: 1Q 2022 operating income of
$4.4bn (vs. $4.6bn4 in 4Q 2021) and EBITDA of $5.1bn in 1Q 2022
(vs. $5.1bn in 4Q 2021)
- Enhanced share value: 1Q 2022 basic EPS of
$4.28/sh increased +9.0% vs. 4Q 2021, representing an ROE19 of 36%;
book value per share16 increased to $57/sh
- Financial strength: Gross debt of $8.7bn at
the end of 1Q 2022; net debt declined to $3.2bn (vs. $4.0bn end of
2021)
- Higher net income: $4.1bn in 1Q 2022 (vs.
$4.0bn in 4Q 2021) includes share of JV and associates net income
of $0.6bn (vs. $0.4bn in 4Q 20215)
- Strong FCF generation: The Company delivered
$1.5bn of free cash flow (FCF) in 1Q 2022 ($2.0bn net cash provided
by operating activities less capex of $0.5bn and dividends paid to
minorities) despite a $2.0bn investment in working capital,
reflecting seasonal as well as market factors (higher selling and
raw material prices)
- A platform for consistent capital returns: The
Company announces an increase in its 2022 buyback program to $2.0bn
(of which $1.0bn was completed on April 25, 2022) in addition to
the $0.38/share base dividend which will be paid in June 2022
- Continued progress in leading the industry in Climate
Action:
- In April 2022, signed an agreement to acquire an 80%
shareholding in voestalpine’s world-class Hot Briquetted Iron
(‘HBI’) plant located in Texas
- Established strategic renewable energy partnership with Greenko
Group in India and announced a $0.6bn investment to build 975MW of
Solar/Wind capacity
- Delivering strategic growth in support of higher
sustainable returns
- Ramp up of the 2.5Mt Mexico hot strip mill is progressing
well
- Strategic capex envelope (including renewables project in
India) increased to $3.65bn to be spent between 2021-2024 (of which
$0.25bn has been spent to date)17; FY 2022 capex guidance remains
unchanged at $4.5 billion
Financial highlights (on the basis of
IFRS1,2):
|
(USDm) unless otherwise shown |
1Q 22 |
4Q 21 |
3Q 21 |
2Q 21 |
1Q 21 |
|
Sales |
21,836 |
20,806 |
20,229 |
19,343 |
16,193 |
|
Operating income |
4,433 |
4,558 |
5,345 |
4,432 |
2,641 |
|
Net income attributable to equity holders of the parent |
4,125 |
4,045 |
4,621 |
4,005 |
2,285 |
|
Basic earnings per common share (US$) |
4.28 |
3.93 |
4.17 |
3.47 |
1.94 |
|
|
|
|
|
|
|
|
Operating income/ tonne (US$/t) |
289 |
289 |
366 |
276 |
160 |
|
EBITDA |
5,080 |
5,052 |
6,058 |
5,052 |
3,242 |
|
EBITDA/ tonne (US$/t) |
331 |
320 |
414 |
314 |
197 |
|
|
|
|
|
|
|
|
Crude steel production (Mt) |
16.3 |
16.5 |
17.2 |
17.8 |
17.6 |
|
Steel shipments (Mt) |
15.3 |
15.8 |
14.6 |
16.1 |
16.5 |
|
Total group iron ore production (Mt) |
12.0 |
13.4 |
13.0 |
11.2 |
13.3 |
|
Iron ore production (Mt) (AMMC and Liberia only) |
6.9 |
7.2 |
6.8 |
4.9 |
7.3 |
|
Iron ore shipment (Mt) (AMMC and Liberia only) |
6.7 |
7.1 |
6.9 |
4.6 |
7.4 |
|
|
|
|
|
|
|
|
Number of shares outstanding (issued shares less treasury shares)
(millions) |
893 |
911 |
971 |
1,019 |
1,054 |
Note: As previously announced, effective 2Q 2021, ArcelorMittal
has amended its presentation of reportable segments to report the
operations of ArcelorMittal Mines Canada ("AMMC")8 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 Italia20 is deconsolidated
and accounted for as a joint venture.
Commenting, Aditya Mittal, ArcelorMittal
Chief Executive Officer, said:"Our first quarter
performance was overshadowed by the war in Ukraine. Our focus has
been on providing support to our 26,000 colleagues and their
communities at a time of tragedy and hardship.
Notwithstanding this backdrop, further aggravated by rising
inflationary pressures across the world, ArcelorMittal produced a
strong first quarter performance. This is testimony to the
resilience of our business model, characterized by diversity of
geography, product category and vertical integration.
Our performance continues to be supported by consistent
execution against our strategy. We have approved targeted
investments in support of our decarbonization plans and continue to
fund high-return projects in growth markets. This is achieved
without compromising our balance sheet strength or returns to
shareholders.
Market conditions are currently strong although we are now
anticipating apparent steel consumption to contract slightly this
year compared with 2021. Nevertheless, it is clear that the
longer-term fundamental outlook for steel is positive. China’s
focus on decarbonization and removal of VAT-rebates on steel
exports are encouraging; so too are the actions taken by
governments to protect against the threats of unfair trade. And we
know that steel will play a critical and vital role in the
transition to a decarbonized and circular economy – there is no
substitute.”
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 0.69x in
the first quarter of 2022 ("1Q 2022”) as compared to 0.74x in the
fourth quarter of 2021 ("4Q 2021") and 0.78x in the first quarter
of 20213 ("1Q 2021").
A concerted effort is underway to improve health and safety
across the group and strengthen our safety culture. We have
completed a comprehensive review of our efforts to eradicate
accidents and fatalities, and have started 2022 with a refreshed
company-wide commitment to put this fully into action.
Corporate oversight of safety has been strengthened, our Global
Health & Safety Council is sharing and promoting best practice,
peer-to-peer mentoring between sites has been introduced, training
(which was reduced as a necessary precaution during COVID-19) has
been strengthened and we are prioritizing support for
underperforming units.
The Company is also tightening guidelines for mandatory
leadership shop floor presence (which similar to training was
reduced as a necessary precaution during COVID-19). All leaders
must now spend a certain minimum time on the shop floor every week
– when they must carry out a safety layered evaluation. While the
Company policy has always specified leaders to regularly spend time
on the shop floor, setting out a higher minimum accepted level for
senior leaders will help reinforce the culture of visible felt
leadership which we know has weakened in some regions as a result
of COVID-19.
Furthermore reporting of proactive KPIs such as potential
serious injury frequency (PSIF) will be also be strengthened. Every
segment is required to put in place a quality assessment process
for PSIFs. Understanding clearly why PSIFs happen is vitally
important to tightening processes, improving behaviours and
preventing fatalities. Widespread use of what we call
‘quarantining’ will also now be in place across all operations
where plants are put into ‘quarantine’ if a seriously unsafe
incident takes place or the plant is deemed to be at risk of a
serious incident or fatality.
A change to the Company’s executive remuneration policy has been
made to reflect this focus.
Own personnel and contractors - Frequency
rate3
|
Lost time injury frequency rate |
1Q 22 |
4Q 21 |
3Q 21 |
2Q 21 |
1Q 21 |
|
NAFTA |
0.19 |
0.25 |
0.48 |
0.17 |
0.71 |
|
Brazil |
0.10 |
0.30 |
0.10 |
0.26 |
0.17 |
|
Europe |
1.13 |
1.09 |
1.38 |
1.41 |
0.94 |
|
ACIS |
0.61 |
0.92 |
0.80 |
1.03 |
1.02 |
|
Mining |
2.19 |
— |
— |
0.71 |
0.62 |
|
Total |
0.69 |
0.74 |
0.76 |
0.89 |
0.78 |
Key sustainable development
highlights:
Developments in support of our decarbonization plans:
- Announced the agreement to acquire
an 80% shareholding in voestalpine’s world-class Hot Briquetted
Iron (‘HBI’) plant located in Corpus Christi, Texas
- Established a strategic partnership
with Greenko Group, India’s leading energy transition company, and
announced a $0.6 billion project to build 975MW of renewable energy
capacity
- Announced the acquisition of
Scottish recycling business John Lawrie Metals Ltd
- Received confirmation that the
Government of Ontario would invest CAD$500 million of the total
planned CAD$1.8 billion investment in decarbonization technologies
at ArcelorMittal Dofasco’s plant in Hamilton. This follows the
previous announcement that the Government of Canada would invest
CAD$400 million to the project
- Inaugurated a combined heat and
power plant at ArcelorMittal Zenica, cutting sulphur dioxide and
dust emissions by 80% and also cutting 18% of ArcelorMittal
Zenica’s total CO2 emissions
- Announced that it has successfully
tested the use of green hydrogen in the production of direct
reduced iron (“DRI”) at its steel plant in Contrecoeur, Quebec
Developments in support of humanitarian aid:
- ArcelorMittal has been actively
supporting the humanitarian relief efforts in Ukraine with $7.6
million donated so far:
- ArcelorMittal Kryvyi Rih made a $1.0
million donation to humanitarian relief efforts in the city of
Kryvyi Rih for the provision of food stocks, medical supplies and
equipment for local hospitals.
- ArcelorMittal Kryvyi Rih has also
donated a further $1.0 million to the Ukrainian government’s
humanitarian efforts which are focused on providing food, shelter,
medicine and clothing to refugees.
- In addition, ArcelorMittal is
channeling donations from ArcelorMittal employees worldwide via the
United Nations humanitarian effort UNICEF, with the Company
matching donations made by employees. To date, over $5.6 million in
total has been donated in this way.
- The Company operated a program of voluntary evacuation to
Poland and western Ukraine for family members of ArcelorMittal
Kryvyi Rih employees, in response to demand. To date, approximately
1,000 individuals have been safely evacuated.
Analysis of results for 1Q 2022 versus 4Q 2021 and 1Q
2021Total steel shipments in 1Q 2022 were 15.3Mt, -2.7%
lower as compared with 15.8Mt in 4Q 2021 largely reflecting the
impact of the war in Ukraine (ACIS down -20.3%) offset in part by
improved NAFTA shipments +11.4%. Comparing to 1Q 202115, and
adjusting for the change in scope (i.e. excluding the shipments of
ArcelorMittal Italia20 deconsolidated as from April 14, 2021),
steel shipments in 1Q 2022 decreased by -1.6%: Europe +2.9% (scope
adjusted), Brazil +5.9% offset in part by ACIS -20.2% and NAFTA
-2.2%.
Sales in 1Q 2022 were $21.8 billion as compared to $20.8 billion
for 4Q 2021 and $16.2 billion for 1Q 2021. As compared to 4Q 2021,
the 5.0% increase in sales was primarily due to higher average
steel selling prices (+7.5%, supported by positive automotive
contract resets), and higher mining revenue primarily due to higher
iron ore reference prices (+28.2%), offset in part by lower steel
shipment volumes (-2.7%). Sales in 1Q 2022 were +34.8% higher as
compared to 1Q 2021 primarily due to significantly higher average
steel selling prices (+46.0%) offset in part by lower iron ore
reference prices (-15.3%) and the impacts of scope changes.
Depreciation for 1Q 2022 was lower at $647 million as compared
to $712 million for 4Q 2021 including impacts from foreign exchange
but higher as compared to $601 million in 1Q 2021 driven by changes
in the useful lives estimates for certain assets in Europe and
Canada due to decarbonization projects, partially offset by foreign
exchange benefit.
There were no impairment items for 1Q 2022 or 1Q 2021.
Impairment reversal 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.
Operating income for 1Q 2022 was $4.4 billion as compared to
$4.6 billion in 4Q 2021 and $2.6 billion in 1Q 2021.
Income from associates, joint ventures and other investments11
for 1Q 2022 was $559 million as compared to $383 million for 4Q
2021 and $453 million in 1Q 2021. 1Q 2022 is higher than 4Q 2021 on
account of results of AMNS Calvert7 and AMNS India6 and includes
$117 million Erdemir annual dividend received (as compared to $89
million dividend received in 1Q 2021).
Net interest expense in 1Q 2022 was $51 million as compared to
$49 million in 4Q 2021 and significantly lower than $91 million in
1Q 2021, reflecting savings following the repayment of bonds.
Foreign exchange and other net financing losses in 1Q 2022 were
$140 million as compared to losses of $111 million in 4Q 2021 and
$194 million in 1Q 2021. 1Q 2022 includes foreign exchange loss of
$46 million compared to $30 million in 4Q 2021 and $118 million in
1Q 2021. 4Q 2021 included 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.
ArcelorMittal recorded an income tax expense of $555 million
(including deferred tax benefit of $140 million) in 1Q 2022 as
compared to $632 million (including deferred tax benefit of $46
million) in 4Q 2021 and $404 million (including deferred tax
benefit of $165 million) for 1Q 2021.
ArcelorMittal recorded net income for 1Q 2022 of $4,125 million
($4.28 basic earnings per common share), as compared to net income
of $4,045 million for 4Q 2021 ($3.93 basic earnings per common
share), and a net income of $2,285 million for 1Q 2021 ($1.94 basic
earnings per common share).
Analysis of segment operations2,
14
NAFTA
|
(USDm) unless otherwise shown |
1Q 22 |
4Q 21 |
3Q 21 |
2Q 21 |
1Q 21 |
|
Sales |
3,760 |
3,329 |
3,423 |
3,242 |
2,536 |
|
Operating income |
1,054 |
939 |
925 |
675 |
261 |
|
Depreciation |
(93) |
(113) |
(70) |
(71) |
(71) |
|
EBITDA |
1,147 |
1,052 |
995 |
746 |
332 |
|
Crude steel production (kt) |
2,077 |
2,046 |
1,994 |
2,272 |
2,175 |
|
Steel shipments * (kt) |
2,456 |
2,205 |
2,280 |
2,590 |
2,511 |
|
Average steel selling price (US$/t) |
1,322 |
1,341 |
1,303 |
1,062 |
850 |
* NAFTA steel shipments include steel shipments sourced by the
NAFTA segment from Group subsidiaries and sold to the Calvert JV
that are eliminated on consolidation.
NAFTA segment crude steel production increased by +1.5% to 2.1Mt
in 1Q 2022, as compared to 2.0Mt in 4Q 2021 despite the impact of
the labour actions at ArcelorMittal Long Products Canada that
negatively impacted 1Q 2022. As compared to 1Q 2021, crude steel
production in 1Q 2022 declined -4.5% on account of these labour
actions at ArcelorMittal Long Products Canada.
Steel shipments in 1Q 2022 increased by +11.4% to 2.5Mt, as
compared to 2.2Mt in 4Q 2021, but declined by -2.2% as compared to
1Q 2021.
Sales in 1Q 2022 increased by +13.0% to $3.8 billion, as
compared to $3.3 billion in 4Q 2021, primarily due to an increase
in steel shipments offset in part by a -1.4% decrease in average
steel selling prices (despite the positive impact of automotive
contract resets). Sales increased by +48.2% in 1Q 2022 as compared
to $2.5 billion in 1Q 2021 primarily on account of higher average
steel selling prices (+55.5%).
Operating income in 1Q 2022 was $1,054 million as compared to
$939 million in 4Q 2021 and $261 million in 1Q 2021.
EBITDA in 1Q 2022 of $1,147 million was +9.0% higher as compared
to $1,052 million in 4Q 2021, primarily due to higher shipment
volumes. EBITDA in 1Q 2022 was higher as compared to $332 million
in 1Q 2021 mainly due to a significant positive price-cost
effect.
Brazil
|
(USDm) unless otherwise shown |
1Q 22 |
4Q 21 |
3Q 21 |
2Q 21 |
1Q 21 |
|
Sales |
3,366 |
3,452 |
3,606 |
3,263 |
2,535 |
|
Operating income |
674 |
892 |
1,164 |
1,028 |
714 |
|
Depreciation |
(58) |
(60) |
(59) |
(56) |
(53) |
|
Exceptional items |
— |
— |
(123) |
— |
— |
|
EBITDA |
732 |
952 |
1,346 |
1,084 |
767 |
|
Crude steel production (kt) |
3,040 |
3,117 |
3,112 |
3,150 |
3,034 |
|
Steel shipments (kt) |
3,037 |
3,034 |
2,829 |
2,964 |
2,868 |
|
Average steel selling price (US$/t) |
1,039 |
1,049 |
1,196 |
1,038 |
837 |
Brazil segment crude steel production declined by -2.5% to 3.0Mt
in 1Q 2022 as compared to 3.1Mt in 4Q 2021 primarily due to planned
maintenance in Acindar (Argentina). Production was stable as
compared to 3.0Mt in 1Q 2021.
Steel shipments were stable at 3.0Mt in 1Q 2022 and 4Q 2021, and
+5.9% higher as compared to 2.9Mt in 1Q 2021 due to higher export
volumes.
Sales in 1Q 2022 decreased by -2.5% to $3.4 billion as compared
to $3.5 billion in 4Q 2021, primarily due to a 0.9% decrease in
average steel selling prices (-4.4% in local currency). Sales in 1Q
2021 were lower at $2.5 billion on account of lower average steel
selling prices and lower steel shipments.
Operating income in 1Q 2022 of $674 million was lower as
compared to $892 million in 4Q 2021 and $714 million in 1Q
2021.
EBITDA in 1Q 2022 decreased by -23.1% to $732 million as
compared to $952 million in 4Q 2021, primarily due to a negative
price-cost effect. EBITDA in 1Q 2022 was $732 million as compared
to $767 million in 1Q 2021 primarily due to higher costs offset in
part by higher steel shipments and average steel selling
prices.
Europe
|
(USDm) unless otherwise shown |
1Q 22 |
4Q 21 |
3Q 21 |
2Q 21 |
1Q 21 |
|
Sales |
13,043 |
12,079 |
11,228 |
10,672 |
9,355 |
|
Operating income |
2,081 |
1,886 |
1,925 |
1,262 |
599 |
|
Depreciation |
(326) |
(353) |
(284) |
(316) |
(299) |
|
Impairment items |
— |
218 |
— |
— |
— |
|
EBITDA |
2,407 |
2,021 |
2,209 |
1,578 |
898 |
|
Crude steel production (kt) |
8,689 |
8,621 |
9,091 |
9,386 |
9,697 |
|
Steel shipments (kt) |
8,334 |
8,325 |
7,551 |
8,293 |
9,013 |
|
Average steel selling price (US$/t) |
1,218 |
1,110 |
1,098 |
948 |
813 |
Europe segment crude steel production was stable at 8.7Mt in 1Q
2022 as compared to 8.6Mt in 4Q 2021, but lower by -10.4% as
compared to 1Q 2021 due to the change in scope. 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)20, ArcelorMittal has deconsolidated the assets and
liabilities as from mid-April 2021. Adjusted for this change of
scope, crude steel production was stable in 1Q 2022 as compared to
1Q 2021.
Steel shipments in 1Q 2022 were stable at 8.3Mt as compared to
4Q 2021 and lower as compared to 9.0Mt in 1Q 2021. Adjusted for
scope, shipments in 1Q 2022 were +2.9% higher as compared to 1Q
2021.
Sales in 1Q 2022 increased by +8.0% to $13.0 billion, as
compared to $12.1 billion in 4Q 2021, primarily due to +9.7% higher
average selling prices (supported by positive automotive price
resets). Sales were higher than 1Q 2021 with the impacts of higher
prices offsetting the change in scope, as discussed above.
Impairment charges for 1Q 2022 and 1Q 2021 were nil. Impairment
reversal 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).
Operating income in 1Q 2022 was $2,081 million as compared to
$1,886 million in 4Q 2021 (including impairment reversal gain as
discussed above) and $599 million in 1Q 2021.
EBITDA in 1Q 2022 of $2,407 million increased by +19.1%, as
compared to $2,021 million in 4Q 2021, primarily due to a positive
price-cost effect with higher contract pricing more than offsetting
higher raw material prices. 4Q 2021 was impacted by one-time
charges of $55 million related to an early retirement scheme in
Spain. EBITDA in 1Q 2022 increased significantly as compared to
$898 million in 1Q 2021 primarily due to a positive price-cost
effect.
ACIS
|
(USDm) unless otherwise shown |
1Q 22 |
4Q 21 |
3Q 21 |
2Q 21 |
1Q 21 |
|
Sales |
2,086 |
2,539 |
2,419 |
2,768 |
2,128 |
|
Operating income |
280 |
439 |
808 |
923 |
535 |
|
Depreciation |
(105) |
(118) |
(112) |
(110) |
(110) |
|
EBITDA |
385 |
557 |
920 |
1,033 |
645 |
|
Crude steel production (kt) |
2,452 |
2,694 |
3,014 |
2,975 |
2,683 |
|
Steel shipments (kt) |
2,071 |
2,597 |
2,367 |
2,801 |
2,595 |
|
Average steel selling price (US$/t) |
855 |
810 |
864 |
806 |
647 |
ACIS segment crude steel production in 1Q 2022 was -9.0% lower
at 2.5Mt as compared to 2.7Mt in 4Q 2021 primarily due to
suspension of production in Ukraine18. At the onset of the war in
Ukraine, the Company announced the suspension of operations to
protect its people and assets. Since then we have slowly restarted
operations, and are currently operating one of three blast
furnaces. Blast furnace No.6 (approximately 20% of Kryvyi Rih
capacity), was restarted on April 11, 2022 (to resume low levels of
pig iron production). Iron ore production is currently running at
about 50-60% capacity.
Steel shipments in 1Q 2022 decreased by -20.3% to 2.1Mt as
compared to 2.6Mt in 4Q 2021 and were lower by -20.2% as compared
to 1Q 2021, mainly due to the impacts of Ukraine.
Sales in 1Q 2022 decreased by -17.9% to $2.1 billion as compared
to $2.5 billion in 4Q 2021, primarily due to lower steel shipments
offset in part by +5.6% higher average steel selling prices.
Operating income in 1Q 2022 was significantly lower at $280
million (due to the factors as discussed above) as compared to $439
million in 4Q 2021 and $535 million in 1Q 2021.
EBITDA of $385 million in 1Q 2022 was -30.8% lower as compared
to $557 million in 4Q 2021, primarily due to lower steel shipments
and higher costs. EBITDA in 1Q 2022 was lower as compared to $645
million in 1Q 2021 due to higher costs and lower steel shipments
offset in part higher average steel selling prices.
Mining
|
(USDm) unless otherwise shown |
1Q 22 |
4Q 21 |
3Q 21 |
2Q 21 |
1Q 21 |
|
Sales |
933 |
824 |
1,153 |
889 |
1,179 |
|
Operating income |
511 |
343 |
741 |
508 |
779 |
|
Depreciation |
(56) |
(57) |
(56) |
(56) |
(59) |
|
EBITDA |
567 |
400 |
797 |
564 |
838 |
|
|
|
|
|
|
|
|
Iron ore production (Mt) |
6.9 |
7.2 |
6.8 |
4.9 |
7.3 |
|
Iron ore shipment (Mt) |
6.7 |
7.1 |
6.9 |
4.6 |
7.4 |
Note: Mining segment includes iron ore operations of
ArcelorMittal Mines Canada and ArcelorMittal Liberia.
Iron ore production decreased in 1Q 2022 by -3.2% to 6.9Mt as
compared to 4Q 2021 and was -4.8% lower as compared to 1Q 2021.
Lower production in 1Q 2022 was primarily due to seasonally lower
production driven by severe weather conditions in AMMC.
Iron ore shipments decreased in 1Q 2022 by -6.3% to 6.7Mt as
compared to 7.1Mt in 4Q 2021, primarily driven by seasonally lower
shipments at AMMC (severe weather and associated logistics issues)
and a rail incident in Liberia. 1Q 2022 iron ore shipments
decreased by -10.2% as compared to 1Q 2021 primarily due to lower
rail haulage and port shipments driven by severe weather conditions
at AMMC and the rail incident in Liberia.
Operating income in 1Q 2022 increased to $511 million as
compared to $343 million in 4Q 2021 but was lower as compared to
$779 million in 1Q 2021.
EBITDA in 1Q 2022 increased by +41.8% to $567 million as
compared to $400 million in 4Q 2021, largely reflecting the
positive impact of higher iron ore reference prices (+28.2%),
higher quality premia and lower freight costs offset in part by
lower iron ore shipments (-6.3%). EBITDA in 1Q 2022 was lower as
compared to $838 million in 1Q 2021, primarily due to lower iron
ore reference prices (-15.3%) and lower shipments (-10.2%).
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.
Calvert7
|
(USDm) unless otherwise shown |
1Q 22 |
4Q 21 |
3Q 21 |
2Q 21 |
1Q 21 |
|
Production (100% basis) (kt)* |
1,124 |
1,068 |
1,239 |
1,234 |
1,261 |
|
Steel shipments (100% basis) (kt)** |
1,171 |
1,052 |
1,203 |
1,155 |
1,137 |
|
EBITDA (100% basis)*** |
327 |
270 |
397 |
270 |
154 |
* Production: all production of the hot strip mill including
processing of slabs on a hire work basis for ArcelorMittal group
entities and third parties, including stainless steel slabs; **
Shipments: including shipments of finished products processed on a
hire work basis for ArcelorMittal group entities and third parties,
including stainless steel products; *** EBITDA of Calvert presented
here on a 100% basis as a stand-alone business and in accordance
with the Company's policy, applying the weighted average method of
accounting for inventory.
Calvert’s hot strip mill ("HSM") production during 1Q 2022
totaled 1.1Mt, higher as compared to 4Q 2021 (impacted by a planned
shutdown) and -10.9% lower than 1.3Mt in 1Q 2021.
Steel shipments in 1Q 2022 were +11.3% above 4Q 2021 due to
improved automotive demand as well as non-auto recovering from the
seasonally weak 4Q 2021.
EBITDA*** during 1Q 2022 of $327 million (100% basis) was +21.1%
higher than $270 million in 4Q 2021, largely due to higher steel
shipments.
AMNS India6
|
(USDm) unless otherwise shown |
1Q 22 |
4Q 21 |
3Q 21 |
2Q 21 |
1Q 21 |
|
Crude steel production (100% basis) (kt) |
1,730 |
1,847 |
1,891 |
1,831 |
1,824 |
|
Steel shipments (100% basis) (kt) |
1,732 |
1,731 |
1,765 |
1,718 |
1,700 |
|
EBITDA (100% basis) |
470 |
435 |
551 |
607 |
403 |
Crude steel production in 1Q 2022 decreased by -6.3% to 1.7Mt as
compared to 1.8Mt in 4Q 2021 primarily due to planned maintenance.
Crude steel production in 1Q 2022 decreased by 5.2% as compared to
1.8Mt in 1Q 2021.
Steel shipments in 1Q 2022 were stable as compared to 4Q 2021
and 1Q 2021.
AMNS India EBITDA of $470 million (100% basis) was +8.0% higher
as compared to $435 million in 4Q 2021, with the contribution from
external sale of pellets from the newly commissioned Odisha plant
offset in part by a negative price cost impact.
Liquidity and Capital
Resources
Net cash provided by operating activities for 1Q 2022 was $2,034
million as compared to $4,154 million in 4Q 2021 and $997 million
in 1Q 2021. Net cash provided by operating activities in 1Q 2022
includes a working capital investment of $2,047 million as compared
to working capital release of $22 million in 4Q 2021 and a working
capital investment of $1,634 million in 1Q 2021. 1Q 2022 working
capital requirements were driven by relatively robust finished
steel prices including positive automotive contract price resets
and elevated raw material prices. Based on current market
conditions, the Company expects a further working capital
investment in 2Q 2022.
Capex of $529 million in 1Q 2022 compares to $1,145 million in
4Q 2021 and $619 million in 1Q 2021. Capex for FY 2022 is still
expected to total $4.5 billion. Capex outside of strategic capex
and decarbonization projects is now expected to be $2.9 billion in
2022, having been lowered by $0.2 billion due to reduced activity
in Ukraine. Decarbonization capex is expected to be $0.3 billion in
2022 (net of government support). Capex on strategic envelope
projects has been increased by $0.2 billion to $1.3 billion to
include the renewables project in India. The pellet plant project
in Ukraine has been temporarily suspended.
Net cash used in other investing activities in 1Q 2022 was $77
million as compared to $90 million in 4Q 2021 as compared to net
cash provided by other investing activities of $887 million in 1Q
2021. 1Q 2022 cash outflow primarily relates to the acquisition of
the Scottish scrap recycling business John Lawrie Metals Ltd. 4Q
2021 cash outflow primarily relates to the $45 million investment
through the XCarb™ innovation fund10 (including carbon recycling
company, LanzaTech). 1Q 2021 cash inflow primarily relates to $0.6
billion cash received from the sale of 40 million Cleveland Cliffs
shares and the recovery of the cash collateral (short-term
deposits) for the TSR receivables retained in ArcelorMittal USA
after its disposal.
Net cash used in financing activities results from movements in
debt (including commercial paper) issuance and repayments, share
buy backs, dividends and lease payments. Net cash used in financing
activities in 1Q 2022 was $185 million as compared to $2,990
million in 4Q 2021 and $1,338 million in 1Q 2021. In 1Q 2022, net
cash used in financing activities includes an inflow from
commercial paper portfolio offset by the reimbursement of an
outstanding bond paid at maturity. In 4Q 2021, net cash used in
financing activities includes an inflow of $0.1 billion from
commercial paper portfolio. In 1Q 2021, net cash used in financing
activities includes an outflow of $0.6 billion primarily related to
$0.3 billion decrease of commercial paper portfolio. During 1Q
2022, ArcelorMittal repurchased 18.3 million shares for a total
value of $569 million of which $504 million was paid by the end of
March 2022 with $65 million settled in early April 2022. 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, equivalent to repurchasing
approximately 36.6 million shares (based on the minimum conversion
ratio). During 1Q 2022, 4Q 2021 and 1Q 2021, the Company paid
dividends of $12 million, $21 million and $65 million,
respectively, to minority shareholders. Outflows from lease
payments and other financing activities were $48 million in 1Q 2022
as compared to $53 million in 4Q 2021 and $49 million in 1Q
2021.
Gross debt increased to $8.7 billion as of March 31, 2022, as
compared to $8.4 billion as of December 31, 2021 and $11.4 billion
as of March 31, 2021. Net debt declined by $878 million to $3.2
billion as of March 31, 2022 as compared to $4.0 billion as of
December 31, 2021 and $5.9 billion as of March 31, 2021.
As of March 31, 2022, and December 31, 2021, Company had
liquidity of $11.1 billion and 9.9 billion, respectively. March 31,
2022 liquidity consisted of cash and cash equivalents of $5.6
billion (December 31, 2021 cash and cash equivalents of $4.4
billion) and $5.5 billion of available credit lines9 . As of March
31, 2022, the average debt maturity was 5.7 years.
Key recent developments
- On May 2, 2022, ArcelorMittal announced
that it has successfully tested the use of green hydrogen in the
production of direct reduced iron (“DRI”) at its steel plant in
Contrecoeur, Quebec. ArcelorMittal’s ambition is to lead the
decarbonization of the steel industry and this test is an important
milestone in the Company’s journey to produce zero carbon emissions
steel via the DRI-based steelmaking route using green hydrogen as
an input. The objective of the test was to assess the ability to
replace the use of natural gas with green hydrogen in the iron ore
reduction process. During this first test, 6.8% of natural gas was
replaced with green hydrogen during a 24-hour period, which
contributed to a measurable reduction in CO2 emissions. The green
hydrogen used in the test was produced by a third-party owned
electrolyser (device that produces green hydrogen from electricity
and water) and was then transported to Contrecoeur. This is a major
step forward since the iron ore reduction process alone contributes
to more than 75% of ArcelorMittal Long Products Canada’s (“AMLPC”)
overall CO2 emissions. AMLPC is evaluating the possibility of
carrying out further tests in the coming months by increasing the
use of green hydrogen at the DRI plant, which could eventually
reduce CO2 emissions in Contrecoeur by several hundred thousand
tonnes per year. The potential use of electrolysers to produce
green hydrogen in Contrecoeur will depend on certain criteria,
particularly the availability of sufficient electricity to power
the units.
- On April 29, 2022, ArcelorMittal
published its 2021 integrated annual review, ‘Smarter steels for
people and planet’. The review underpins the Company’s commitment
to transparent reporting. It has been produced to reflect the
guiding principles of the Value Reporting Foundation and in-line
with the Global Reporting Index (GRI) Sustainability Reporting
Standards, the United Nations Global Compact, and the European
Union’s Directive 2014/95/EU on non-financial reporting. The
Integrated Annual Review is a central element in the Company’s
commitment to engage stakeholders and communicate our financial and
non-financial performance. It provides an overview of the Company’s
performance in 2021, outlines progress against its strategic
priorities, and details its short- and long-term plans.
- On April 26, 2022, ArcelorMittal
announced that it had completed its $1.0 billion share buyback
program announced on February 11, 2022 under the authorization
given by the annual general meeting of shareholders of June 8,
2021. By market close on April 25, 2022, ArcelorMittal had
repurchased 31,751,960 shares for a total value of €911 million
(equivalent to $1.0 billion) at an approximate average price per
share of €28.68.
- On April 14, 2022, ArcelorMittal
announced it had signed an agreement to acquire an 80% shareholding
in voestalpine’s world-class Hot Briquetted Iron (‘HBI’) plant
located in Corpus Christi, Texas. The transaction values the Corpus
Christi operations at $1 billion, with $680 million cash out and
closing is expected in 3Q 2022, subject to customary regulatory
approvals. The state-of-the-art plant, which was opened in October
2016, is one of the largest of its kind in the world. It has an
annual capacity of two million tonnes of HBI, a high-quality
feedstock made through the direct reduction of iron ore which is
used to produce high-quality steel grades in an EAF, but which can
also be used in blast furnaces, resulting in lower coke
consumption. HBI is a premium, compacted form of Direct Reduced
Iron (‘DRI’) developed to overcome issues associated with shipping
and handling DRI. Ideally located with its own deep-water port with
unused land on the site which provides options for further
development. voestalpine has retained a 20% interest in the plant -
with a corresponding offtake agreement - ArcelorMittal would own
100% of any future development. The remaining balance of production
will be delivered to third parties under existing supply contracts,
and to ArcelorMittal facilities, including to AMNS Calvert in
Alabama, upon the commissioning of its 1.5 million tonne EAF,
expected in the second half of 2023.
- On March 30, 2022, Votorantim exercised
its put option right to sell its entire equity interest in
ArcelorMittal Brasil to the Company, following the acquisition of
Votorantim S.A.'s long steel business in Brazil in 2018, which
became a wholly-owned subsidiary of ArcelorMittal Brasil. The
exercise price is calculated pursuant to a contractual formula
which applies a 6x multiple of ArcelorMittal Brasil Longs Business
EBITDA for the trailing four quarters (subject to certain
adjustments, such as the exclusion of any unusual, infrequent or
abnormal events) less an assumed net debt of 6.2 billion reais,
times 15%. ArcelorMittal Brasil’s initial calculations indicate a
value of approximately $0.2 billion to the put option.
ArcelorMittal Brasil is required to deliver to Votorantim its
calculation of the exercise price, along with the proper
documentation, by May 14, 2022.
- On March 22, 2022, ArcelorMittal
announced it had established a strategic partnership with Greenko
Group, India’s leading energy transition company. The $0.6 billion
975 MW project will combine solar and wind power and be supported
by Greenko’s hydro pumped storage project, which helps to overcome
the intermittent nature of wind and solar power generation. The
project provides for 250 MW of uninterrupted renewable power to be
supplied annually to AMNS India (ArcelorMittal’s joint venture
company in India) under a 25-year off-take agreement to be entered
into with AMNS India (starting in mid-2024). The project and land
will be owned and funded by ArcelorMittal. Greenko will design,
construct and operate the renewable energy facilities in Andhra
Pradesh, Southern India. This will result in over 20% of the
electricity requirement at AMNS India’s Hazira plant coming from
renewable sources, reducing carbon emissions by approximately 1.5Mt
per year. The project provides an attractive return on investment
for ArcelorMittal and offers AMNS India the dual benefits of lower
electricity costs and lower CO2 emissions. The Company is studying
the option to develop a second phase which would double the
installed capacity.
- On March 2, 2022, ArcelorMittal
announced its acquisition of Scottish recycling business John
Lawrie Metals Ltd., as part of the company’s strategy of increasing
the use of scrap steel to lower CO2 emissions from steelmaking.
John Lawrie Metals, is a leading consolidator of ferrous scrap
metal, exports to steel producers mainly in western Europe.
Increasing the use of scrap steel in both the EAF and blast furnace
routes of steelmaking, is one of the five key levers of
ArcelorMittal’s decarbonization roadmap.
- On February 25, 2022, ArcelorMittal
announced that its Significant Shareholder had decided not to
further participate in its $1.0 billion share buyback program. In
its announcement of February 11, 2022 regarding a new $1.0 billion
share buyback program, ArcelorMittal had noted the declared
intention of its Significant Shareholder to sell shares to it in
proportion to shares purchased on the market to maintain its
percentage shareholding. ArcelorMittal was subsequently informed by
the Significant Shareholder that it had decided not to make such
sales; accordingly, its percentage holding of issued and
outstanding shares (which stood at 36.3% as of January 31, 2022)
increased to 37.53% as of April 25, 2022, following completion of
the $1.0 billion share buy back program.
- On February 15, 2022, ArcelorMittal
confirmed its plan for a CAD$1.8 billion investment in
decarbonization technologies at ArcelorMittal Dofasco’s plant in
Hamilton, following the announcement on February 15, 2022, that the
Government of Ontario would invest CAD$500 million in the project,
which followed the previous announcement in July 2021 that the
Government of Canada would invest CAD$400 million in the project.
The investment will reduce annual CO2 emissions at ArcelorMittal’s
Hamilton, Ontario operations by approximately 3 million tonnes,
which represents approximately 60% of emissions. This means the
Hamilton plant will transition away from the blast furnace-basic
oxygen furnace steelmaking production route to the DRI – EAF
production route, which carries a significantly lower carbon
footprint. The project is scheduled to be complete by 2028.
Capital return
On April 26, 2022, ArcelorMittal announced the completion of the
$1.0 billion share buyback program it had announced on February 11,
2022.
The Company is now announcing an increase in its 2022 buyback
program to $2.0 billion (of which $1.0 billion has been completed)
and, following shareholder approval at the AGM, the $0.38/share
base dividend will be paid in June 2022.
Outlook
Whilst we have updated our forecasts for apparent steel
consumption (ASC) to reflect developments since 4Q 2021 results,
with the exception of CIS, we have not changed our production plans
and shipment forecasts - i.e. excluding CIS, we expect
scope-adjusted shipments in 2022 to be above 2021 levels.
Based on the current economic outlook, ArcelorMittal now expects
global apparent steel consumption (“ASC”) to contract slightly in
2022 (by up to -1.0%) vs. the previous forecast for slight growth
(of up to +1%). By region:
- In the US, ASC growth in 2022 is
expected to be within the previous forecast range (+1.0% to
+3.0%);
- In Europe, due to the negative impact
of rising inflation, ASC in 2022 is expected to decline by between
-4.0% to -2.0% (vs. the previous forecast of slight positive growth
in the range of +0% to +2.0%);
- In Brazil, our forecast for ASC demand
growth are unchanged (within the range of -10.0% to -8.0%);
- In India, our forecast for ASC demand
growth are unchanged (within the range of +6% to +8%);
- We now forecast a significant
contraction in demand in the CIS region (which includes
Commonwealth of Independent States and Ukraine) by more than -10.0%
(from previous range of +0% to +2%);
- In China, given the temporary economic
weakness caused by COVID-19 restrictions, we now forecast ASC
demand towards the bottom of the previous forecast range (-2.0% to
0%);
- We now forecast Global ex. China ASC to
be broadly in line with 2021 (within the range of -0.5% to +0.5%),
a downgrade from our previous estimate (+2.5% to +3.0%); and
- As a result, global ASC in 2021 is now
forecast to contract by -1.0% to +0% in 2022 (versus +0.0% to +1.0%
forecast previously).
How long strong market conditions will prevail remains uncertain
and subject to many factors, but it is clear that the longer-term
fundamental outlook for steel is positive. China’s focus on
decarbonization and removal of VAT-rebates on steel exports are
encouraging; so too are the actions taken by governments to protect
against the threats of unfair trade. And we know that steel will
play a critical and vital role in the transition to a decarbonized
and circular economy – there is no
substitute. ArcelorMittal Condensed Consolidated
Statement of Financial Position1
|
In millions of U.S. dollars |
Mar 31,2022 |
Dec 31,2021 |
Mar 31,2021 |
|
ASSETS |
|
|
|
|
Cash and cash equivalents |
5,570 |
4,371 |
5,474 |
|
Trade accounts receivable and other |
6,353 |
5,143 |
3,783 |
|
Inventories |
22,171 |
19,858 |
13,228 |
|
Prepaid expenses and other current assets |
6,487 |
5,567 |
3,160 |
|
Asset held for sale |
— |
— |
4,854 |
|
Total Current Assets |
40,581 |
34,939 |
30,499 |
|
|
|
|
|
|
Goodwill and intangible assets |
4,564 |
4,425 |
4,212 |
|
Property, plant and equipment |
30,161 |
30,075 |
29,498 |
|
Investments in associates and joint ventures |
10,888 |
10,319 |
7,205 |
|
Deferred tax assets |
8,018 |
8,147 |
7,831 |
|
Other assets12 |
3,287 |
2,607 |
4,404 |
|
Total Assets |
97,499 |
90,512 |
83,649 |
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
Short-term debt and current portion of long-term debt |
2,413 |
1,913 |
2,813 |
|
Trade accounts payable and other |
16,200 |
15,093 |
12,231 |
|
Accrued expenses and other current liabilities |
7,491 |
7,161 |
5,729 |
|
Liabilities held for sale |
— |
— |
3,271 |
|
Total Current Liabilities |
26,104 |
24,167 |
24,044 |
|
|
|
|
|
|
Long-term debt, net of current portion |
6,309 |
6,488 |
8,552 |
|
Deferred tax liabilities |
2,494 |
2,369 |
1,812 |
|
Other long-term liabilities |
6,397 |
6,144 |
7,259 |
|
Total Liabilities |
41,304 |
39,168 |
41,667 |
|
|
|
|
|
|
Equity attributable to the equity holders of the parent |
53,798 |
49,106 |
40,000 |
|
Non-controlling interests |
2,397 |
2,238 |
1,982 |
|
Total Equity |
56,195 |
51,344 |
41,982 |
|
Total Liabilities and Shareholders’ Equity |
97,499 |
90,512 |
83,649 |
ArcelorMittal Condensed Consolidated Statement of
Operations1,5
|
|
Three months ended |
|
In millions of U.S. dollars unless otherwise
shown |
Mar 31, 2022 |
Dec 31, 2021 |
Sept 30, 2021 |
Jun 30, 2021 |
Mar 31, 2021 |
|
Sales |
21,836 |
20,806 |
20,229 |
19,343 |
16,193 |
|
Depreciation (B) |
(647) |
(712) |
(590) |
(620) |
(601) |
|
Impairment items (B) |
— |
218 |
— |
— |
— |
|
Exceptional items (B) |
— |
— |
(123) |
— |
— |
|
Operating income (A) |
4,433 |
4,558 |
5,345 |
4,432 |
2,641 |
|
Operating margin % |
20.3% |
21.9% |
26.4% |
22.9% |
16.3% |
|
|
|
|
|
|
|
|
Income from associates, joint ventures and other investments |
559 |
383 |
778 |
590 |
453 |
|
Net interest expense |
(51) |
(49) |
(62) |
(76) |
(91) |
|
Foreign exchange and other net financing loss |
(140) |
(111) |
(339) |
(233) |
(194) |
|
Income before taxes and non-controlling
interests |
4,801 |
4,781 |
5,722 |
4,713 |
2,809 |
|
Current tax expense |
(695) |
(678) |
(938) |
(768) |
(569) |
|
Deferred tax benefit |
140 |
46 |
56 |
226 |
165 |
|
Income tax expense (net) |
(555) |
(632) |
(882) |
(542) |
(404) |
|
Income including non-controlling interests |
4,246 |
4,149 |
4,840 |
4,171 |
2,405 |
|
Non-controlling interests income |
(121) |
(104) |
(219) |
(166) |
(120) |
|
Net income attributable to equity holders of the
parent |
4,125 |
4,045 |
4,621 |
4,005 |
2,285 |
|
|
|
|
|
|
|
|
Basic earnings per common share ($) |
4.28 |
3.93 |
4.17 |
3.47 |
1.94 |
|
Diluted earnings per common share ($) |
4.27 |
3.92 |
4.16 |
3.46 |
1.93 |
|
|
|
|
|
|
|
|
Weighted average common shares outstanding (in millions) |
964 |
1,030 |
1,109 |
1,154 |
1,178 |
|
Diluted weighted average common shares outstanding (in
millions) |
966 |
1,033 |
1,112 |
1,157 |
1,183 |
|
|
|
|
|
|
|
|
OTHER INFORMATION |
|
|
|
|
|
|
EBITDA (C = A-B) |
5,080 |
5,052 |
6,058 |
5,052 |
3,242 |
|
EBITDA Margin % |
23.3% |
24.3% |
29.9% |
26.1% |
20.0% |
|
|
|
|
|
|
|
|
Total group iron ore production (Mt) |
12.0 |
13.4 |
13.0 |
11.2 |
13.3 |
|
Crude steel production (Mt) |
16.3 |
16.5 |
17.2 |
17.8 |
17.6 |
|
Steel shipments (Mt) |
15.3 |
15.8 |
14.6 |
16.1 |
16.5 |
ArcelorMittal Condensed Consolidated Statement of Cash
flows1
|
|
Three months ended |
|
In millions of U.S. dollars |
Mar 31, 2022 |
Dec 31, 2021 |
Sept 30, 2021 |
Jun 30, 2021 |
Mar 31, 2021 |
|
Operating activities: |
|
|
|
|
|
|
Income attributable to equity holders of the
parent |
4,125 |
4,045 |
4,621 |
4,005 |
2,285 |
|
Adjustments to reconcile net income to net cash provided by
operations: |
|
|
|
|
|
|
Non-controlling interests income |
121 |
104 |
219 |
166 |
120 |
|
Depreciation and impairment items |
647 |
494 |
590 |
620 |
601 |
|
Exceptional items |
— |
— |
123 |
— |
— |
|
Income from associates, joint ventures and other investments |
(559) |
(383) |
(778) |
(590) |
(453) |
|
Deferred tax benefit |
(140) |
(46) |
(56) |
(226) |
(165) |
|
Change in working capital |
(2,047) |
22 |
(2,896) |
(1,901) |
(1,634) |
|
Other operating activities (net) |
(113) |
(82) |
619 |
238 |
243 |
|
Net cash provided by operating activities (A) |
2,034 |
4,154 |
2,442 |
2,312 |
997 |
|
Investing activities: |
|
|
|
|
|
|
Purchase of property, plant and equipment and intangibles (B) |
(529) |
(1,145) |
(675) |
(569) |
(619) |
|
Other investing activities (net) |
(77) |
(90) |
1,184 |
687 |
887 |
|
Net cash (used in) / provided by investing
activities |
(606) |
(1,235) |
509 |
118 |
268 |
|
Financing activities: |
|
|
|
|
|
|
Net proceeds / (payments) relating to payable to banks and
long-term debt |
379 |
100 |
(806) |
(2,232) |
(624) |
|
Dividends paid to ArcelorMittal shareholders |
— |
— |
(28) |
(284) |
— |
|
Dividends paid to minorities (C) |
(12) |
(21) |
(157) |
(17) |
(65) |
|
Share buyback |
(504) |
(1,820) |
(1,703) |
(997) |
(650) |
|
Payments from Mandatorily Convertible Notes |
— |
(1,196) |
— |
— |
— |
|
Lease payments and other financing activities (net) |
(48) |
(53) |
(46) |
(250) |
(49) |
|
Net cash used in financing activities |
(185) |
(2,990) |
(2,740) |
(3,780) |
(1,388) |
|
Net increase / (decrease) in cash and cash equivalents |
1,243 |
(71) |
211 |
(1,350) |
(123) |
|
Cash and cash equivalents transferred from / (to) assets held for
sale |
— |
— |
— |
10 |
(7) |
|
Effect of exchange rate changes on cash |
4 |
13 |
(9) |
47 |
(106) |
|
Change in cash and cash equivalents |
1,247 |
(58) |
202 |
(1,293) |
(236) |
|
|
|
|
|
|
|
|
Free cash flow (D=A+B+C)13 |
1,493 |
2,988 |
1,610 |
1,726 |
313 |
Appendix 1: Product shipments by
region1
|
(000'kt) |
1Q 22 |
4Q 21 |
3Q 21 |
2Q 21 |
1Q 21 |
|
Flat |
1,811 |
1,548 |
1,613 |
1,896 |
1,822 |
|
Long |
657 |
739 |
770 |
794 |
785 |
|
NAFTA |
2,456 |
2,205 |
2,280 |
2,590 |
2,511 |
|
Flat |
1,747 |
1,790 |
1,523 |
1,599 |
1,513 |
|
Long |
1,309 |
1,256 |
1,325 |
1,381 |
1,370 |
|
Brazil |
3,037 |
3,034 |
2,829 |
2,964 |
2,868 |
|
Flat |
5,953 |
5,788 |
5,333 |
5,751 |
6,613 |
|
Long |
2,275 |
2,421 |
2,121 |
2,404 |
2,290 |
|
Europe |
8,334 |
8,325 |
7,551 |
8,293 |
9,013 |
|
CIS |
1,405 |
2,067 |
1,684 |
2,097 |
2,035 |
|
Africa |
667 |
531 |
679 |
703 |
560 |
|
ACIS |
2,071 |
2,597 |
2,367 |
2,801 |
2,595 |
Note: “Others and eliminations” are not presented in the
table
Appendix 2a: Capital
expenditures1,2
|
(USDm) |
1Q 22 |
4Q 21 |
3Q 21 |
2Q 21 |
1Q 21 |
|
NAFTA |
87 |
104 |
118 |
73 |
74 |
|
Brazil |
90 |
171 |
102 |
91 |
48 |
|
Europe |
187 |
473 |
231 |
235 |
343 |
|
ACIS |
90 |
266 |
139 |
120 |
94 |
|
Mining |
70 |
127 |
78 |
43 |
54 |
|
Total |
529 |
1,145 |
675 |
569 |
619 |
Note: “Others” are not presented in the table
Appendix 2b: Capital expenditure
projects21
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.
Completed projects
|
Segment |
Site / unit |
Project |
Capacity / details |
Key date / completion |
|
NAFTA |
ArcelorMittal 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 (under review) (i) |
|
Brazil |
Barra Mansa |
New section mill |
Increase capacity of HAV bars and sections by 0.4Mt/pa |
1Q 2024 (j) |
|
Others |
Andhra Pradesh (India) |
Renewable energy project |
975 MW of nominal capacity solar and wind power |
1H 2024 (k) |
a) On September 28, 2017, ArcelorMittal announced a major $1.0
billion investment program 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 program 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 progressing as per plan. Current potential
EBITDA benefit in 2022 of ~$0.1bn. The project is estimated
potentially to add approximately $250 million in EBITDA on full
completion and post ramp up. 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
potentially add >$25 million of 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 potentially add >$40
million of 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. First equipment arriving on site and
progressing in accordance with plan. Civil works and erection of
acid regeneration plant and repair and inspection line is well
advanced. The project is expected to be completed in 4Q 2023 and
estimated potentially to add >$0.1 billion of 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. Detailed
construction design is well advanced. Main civil works contract
progressing to plan, whilst 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, previously
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 potentially to add approximately $250 million
of 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 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 potentially to add approximately $50 million of 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, earthworks and civil
and procurement of main equipment are ongoing. Auxiliary buildings
civil works has been initiated. Project start-up is estimated in 2H
2023. The project is estimated potentially to add ~$100 million of
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. Detailed engineering is ongoing. Piling and civil works are
under negotiation. Technical discussions have been started with
erection companies. The project is estimated to be completed in 2H
2024 with a capex requirement of approximately $0.5 billion. The
project is estimated potentially to add >$0.2 billion of 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 was initially expected to be produced in
4Q 2023 with a capex requirement of approximately $0.3 billion;
however revised completion date and budget will depend on when the
project can be effectively resumed due to the Russian invasion of
Ukraine. The project is estimated potentially 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. Main equipment is under negotiation with
bidders, contract for disassembling of old mill to open space for
the new equipment has been awarded. The project commenced in 2022
and is expected to be completed by 1Q 2024. The project is
estimated potentially to add $0.1 billion of EBITDA on full
completion and post ramp up.
k) This $0.6 billion investment, combining solar and wind power,
will be supported by Greenko’s hydro pumped storage project, which
helps to overcome the intermittent nature of wind and solar power
generation. The project is owned and funded by ArcelorMittal.
Greenko will design, construct and operate the facilities in Andhra
Pradesh, Southern India. AMNS India will enter into a 25 year
off-take agreement with ArcelorMittal to purchase 250 MW of
renewable electricity annually from the project, resulting in over
20% of the electricity requirement at AMNS India’s Hazira plant
coming from renewable sources, reducing carbon emissions by
approximately 1.5Mt per year. The project commissioning is expected
by mid-2024 and estimated potentially to add $70 million of EBITDA
(excluding savings at AMNS India) upon completion. The Company is
studying the option to develop a second phase which would double
the installed capacity.
Appendix 3: Debt repayment schedule as of March 31,
2022
|
(USD billion) |
2022 |
2023 |
2024 |
2025 |
2026 |
>2026 |
Total |
|
Bonds |
— |
1.2 |
0.9 |
1.0 |
0.4 |
1.6 |
5.1 |
|
Commercial paper |
1.2 |
— |
— |
— |
— |
— |
1.2 |
|
Other loans |
0.7 |
0.3 |
0.3 |
0.2 |
0.1 |
0.8 |
2.4 |
|
Total gross debt |
1.9 |
1.5 |
1.2 |
1.2 |
0.5 |
2.4 |
8.7 |
Appendix 4: Reconciliation of gross debt to net debt as
of March 31, 2022
|
(USD million) |
Mar 31, 2022 |
Dec 31, 2021 |
Mar 31, 2021 |
|
Gross debt (excluding that held as part of the liabilities
held for sale) |
8,722 |
8,401 |
11,365 |
|
Gross debt held as part of the liabilities held for sale |
— |
— |
23 |
|
Gross debt |
8,722 |
8,401 |
11,388 |
|
Less: Cash and cash equivalents |
(5,570) |
(4,371) |
(5,474) |
|
Less: Cash and cash equivalents held as part of the assets held for
sale |
— |
— |
(10) |
|
Net debt (including that held as part of assets and the
liabilities held for sale) |
3,152 |
4,030 |
5,904 |
|
|
|
|
|
|
Net debt / LTM EBITDA |
0.1 |
0.2 |
0.9 |
Appendix 5: Adjusted net income as of March 31,
2022
|
(USD million) |
1Q 22 |
4Q 21 |
3Q 21 |
2Q 21 |
1Q 21 |
|
Net income |
4,125 |
4,045 |
4,621 |
4,005 |
2,285 |
|
Impairment items |
— |
218 |
— |
— |
— |
|
Exceptional items |
— |
— |
(123) |
— |
— |
|
Adjusted net income |
4,125 |
3,827 |
4,744 |
4,005 |
2,285 |
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:Apparent steel
consumption: calculated as the sum of production plus
imports minus exports.Average steel selling
prices: calculated as steel sales divided by steel
shipments.Cash and cash equivalents: represents
cash and cash equivalents, restricted cash, and short-term
investments.Capex: represents the purchase of
property, plant and equipment and intangibles.Crude steel
production: steel in the first solid state after melting,
suitable for further processing or for sale.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 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 (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. 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). ROE: refers to
"Return on Equity" which calculated as trailing twelve-month net
income attributable to equity holders of the parent divided by the
average equity attributable to the equity holders of the parent
over the period. 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, 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 also presents Equity book value per
share and ROE, calculated as shown in footnotes to this press
release. 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 presents
adjusted net income / (loss), as it believes it is a useful measure
for the underlying business performance excluding impairment items
and exceptional items. ArcelorMittal also presents free cash flow
(FCF), which is a non-GAAP financial/alternative performance
measure calculated as shown in the Condensed Consolidated Statement
of Cash Flows, because it believes it is a useful supplemental
measure for evaluating the strength of its cash generating
capacity. The Company also presents the ratio of net debt to EBITDA
for the last twelve-month period, which investors may find useful
in understanding the Company's ability to service its debt. Such
non-GAAP/alternative performance measures may not be comparable to
similarly titled measures applied by other companies. Non-GAAP
financial/alternative performance measures should be read in
conjunction with, and not as an alternative for, ArcelorMittal's
financial information prepared in accordance with IFRS.
- 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 retains 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
retrospectively amended its presentation of reportable segments to
reflect this organizational change, as required by IFRS. The
results of each other mine are accounted for within the steel
segment that it primarily supplies. Summary of changes: NAFTA: all
Mexico mines; 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 1Q 2022 of 0.69x, 0.74x for 4Q 2021
and 0.78x for 1Q 2021 exclude ArcelorMittal Italia (which was
deconsolidated as from 2Q 2021 onwards).
- Operating income of 4Q 2021, includes an impairment reversal
gain of $218 million following improved cash flow projections in
the context of decarbonization plans in Sestao (Spain) (partially
reversing the impairment recognized in 2015).
- See Appendix 5 for reconciliation of adjusted net income.
- 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 mine is operating at full 5.5Mtpa
capacity since 1Q 2021, while the second Odisha pellet plant was
commissioned 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 5.0Mtpa of high-quality
iron ore in 2022 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. In March 2021, AMNS
India signed a Memorandum of Understanding ("MoU") with the
Government of Odisha in view of building an integrated steel plant
with a 12Mtpa capacity in Kendrapara district of state Odisha. A
pre-feasibility study report was submitted to the state government
in 3Q 2021, and AMNS India is currently engaging with the
government 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. Option to add a further 1.5Mt EAF is being
studied
- 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
March 31, 2022, the $5.5 billion revolving credit facility was
fully available. On April 30, 2021, ArcelorMittal amended its
$5.5bn RCF to align with its sustainability and climate action
strategy.
- 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.
- 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.
- Other assets include the main listed investment of Erdemir
(12%) at market value of $935 million, $885 million and $778
million as of March 31, 2022, December 31, 2021, and March 31, 2021
respectively.
- During 4Q 2020, 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 shareholder returns to
be paid under its capital allocation policy. The comparative
figures for free cash flow under the prior definition of cash flow
from operations less capex were inflows in 1Q 2022 of $1,505
million, 4Q 2021 of $3,009 million, $1,767 million for 3Q 2021,
$1,743 million for 2Q 2021 and $378 million for 1Q 2021.
- Segment “Other & eliminations” EBITDA result was a loss of
$158 million in 1Q 2022, as compared to gain of $70 million in 4Q
2021 as compared to a loss of $238 million in 1Q 2021 principally
due to the increase of the stock margin eliminations driven by the
increase during the quarter of the iron ore market price on
intra-group stock sales between steel and mining businesses.
- Total steel shipments in 1Q 2022 were 15.3Mt, 7.0% lower as
compared with 16.5Mt in 1Q 2021.
- Equity book value per share is calculated as the Equity
attributable to the equity holders of the parent divided by diluted
number of shares at the end of the period. 1Q 2022 total equity of
$53.8 billion divided by 949 million shares outstanding equals
$57/sh.
- Strategic capex envelope of $3.65 billion represents total to
be spent on strategic projects in the period from 2021 to 2024.
Specifically, $0.25 billion of the $3.65 billion has been spent
through March 31, 2022. The various estimates in this press release
of EBITDA benefit of these strategic capex projects are based on
assumptions once projects are ramped up to capacity and assuming
prices/spreads generally in line with the averages of the period
2015-2020 period.
- Blast furnace No.6 (approximately 20% of Kryvyi Rih capacity),
was restarted on April 11, 2022 (to resume low levels of pig iron
production). Iron ore production is currently running at about
50-60% capacity. The Group assessed that there is no going concern
issue as well as no impairment or inventory/accounts receivable
write down adjustments required for 1Q 2022.
- ROE refers to "Return on Equity" which is calculated as the
trailing twelve-month net income attributable to equity holders of
the parent divided by the average equity attributable to the equity
holders of the parent over the period. 1Q 2022 ROE of 36% derived
from the trailing twelve-month net income attributable to equity
holders of the parent ($16.8 billion) divided by the average equity
attributable to the equity holders of the parent over the period
($46.8 billion). 4Q 2021 ROE of 34% derived from the trailing
twelve-month net income attributable to equity holders of the
parent ($15.0 billion) divided by the average equity attributable
to the equity holders of the parent over the period ($43.7
billion).
- Pursuant to the Investment Agreement of December 10, 2020, on
April 14, 2021 Invitalia invested €400 million in Acciaierie
d’Italia Holding for a 38% stake (with equal voting and governance
rights). The Investment Agreement stipulates a second equity
injection into Acciaierie d’Italia Holding by Invitalia of up to
€680 million, to fund the completion of the purchase of Ilva’s
business by Acciaierie d’Italia Holding, subject to certain
conditions precedent (as specified in the lease and purchase
agreement for the Ilva business) to be met by the end of May 2022.
At this point, Invitalia’s shareholding in Acciaierie d’Italia
Holding 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 these conditions precedent are not met, then Acciaierie
d’Italia Holding would not be required to complete the purchase of
Ilva’s assets and a portion of the capital invested by Acciaierie
d’Italia Holding would be returned to it. ArcelorMittal does not
expect these conditions precedent to be met at this stage and is
currently discussing an extension of the May 2022 deadline.
- On March 17, 2022, ArcelorMittal had announced an investment
(which is in the process of final review and approval), with the
support of the French government, to create a new production unit
for electrical steels at its Mardyck site in the north of France.
This investment will create more than 100 direct jobs. With this
new unit, which will specialize in the production of electrical
steels for the engines of electric vehicles and which complements
ArcelorMittal’s existing electrical steels plant in Saint Chély
d’Apcher, in the south of France, all of the group's electrical
steels will be produced in France, strengthening France’s
electromobility sector.
First quarter 2022 earnings analyst conference
callArcelorMittal management will host a conference call
for members of the investment community to present and comment on
the three-month period ended March 31, 2022 on: Thursday
May 5, 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/1142/
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 ArcelorMittal
ArcelorMittal is the world's leading steel and mining company,
with a presence in 60 countries and primary steelmaking facilities
in 16 countries. In 2021, ArcelorMittal had revenues of $76.6
billion and crude steel production of 69.1 million metric tonnes,
while iron ore production reached 50.9 million metric tonnes.
Our goal is to help build a better world with smarter steels.
Steels made using innovative processes which use less energy, emit
significantly less carbon and reduce costs. Steels that are
cleaner, stronger and reusable. Steels for electric vehicles and
renewable energy infrastructure that will support societies as they
transform through this century. With steel at our core, our
inventive people and an entrepreneurial culture at heart, we will
support the world in making that change. This is what we believe it
takes to be the steel company of the future.
ArcelorMittal is listed on the stock exchanges of New York (MT),
Amsterdam (MT), Paris (MT), Luxembourg (MT) and on the Spanish
stock exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS).
For more information about ArcelorMittal please visit:
http://corporate.arcelormittal.com/
Enquiries ArcelorMittal 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
- 1Q22 Earnings release FINAL 050522.pdf
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