Luxembourg, July 29, 2021 - 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 and six-month periods ended June 30, 2021.
Key highlights:
- Health and safety performance: Protecting the health and
wellbeing of employees remains the Company’s overarching priority;
LTIF rate3 of 0.89x in 2Q 2021 and 0.83x in 1H 2021
- Significantly improved operating performance in 2Q 2021, with
the continuing demand recovery supporting a further positive
evolution of steel spreads and 2.4% sequential increase in steel
shipments to 16.1Mt (vs. scope adjusted4 15.6Mt in 1Q 2021)
- 2Q 2021 operating income of $4.4bn compares to $2.6bn in 1Q
2021; 1H 2021 operating income of $7.1bn
- EBITDA of $5.1bn in 2Q 2021, the strongest quarter since 2008
and 55.8% higher than 1Q 2021; 1H 2021 EBITDA of $8.3bn represents
the strongest half year performance since 2008
- Share of JV and associates net income in 2Q 2021 further
improved to $0.6bn, reflecting continued strong performance at AMNS
India8 and AMNS Calvert9; 1H 2021 share of JV and associates net
income $1.0bn
- Net income of $4.0bn in 2Q 2021 vs. $2.3bn in 1Q 2021; 1H 2021
net income of $6.3bn (vs. adjusted net loss in 1H 2020 of $0.9bn)7
represents the strongest half year performance since 2008
- Free cash flow18 of $1.7bn generated in 2Q 2021 ($2.3bn net
cash provided by operating activities less capex of $0.6bn)
includes a further $1.9bn investment in working capital on account
of higher market prices; this brings the 1H 2021 free cash flow
generated to $2.0bn ($3.3bn net cash provided by operating
activities less capex of $1.2bn less minority dividends $0.1bn)
despite a total $3.5bn investment in working capital
- Gross debt declined to $9.2bn (vs. $11.4bn as end of 1Q 2021
and $12.3bn as end of 2020) and net debt declined to $5.0bn (vs.
$5.9bn as end of 1Q 2021 and $6.4bn as end of 2020)
- Since April 1, 2021, the Company returned $1.6bn to
shareholders through share buybacks and the payment of the annual
base dividend. Total returns to shareholders since September 2020
now total $2.8bn
Strategic update and
outlook:
- Leadership on decarbonization: New Group CO2
reduction target of 25% by 2030; new Europe CO2 reduction target of
35% (previously 30%) by 2030 includes the acceleration of DRI-EAF
investments and the world’s first full scale zero carbon-emissions
steel plant at Sestao, Spain; the new group decarbonization plan
requires an estimated gross investment (pre-government funding) of
$10bn
- Capex update: FY 2021 capex is expected to
increase to $3.2bn from previous guidance of $2.9bn to reflect the
impacts of higher volumes and capacity utilization – the Company’s
operating plan (including the number of tools utilized) has changed
to reflect the strength of the demand environment
- Demand outlook improving: The Company has
upgraded its global apparent steel consumption (ASC) forecast in
2021 vs. 2020 from +7.5% to +8.5% (from previous growth estimate of
+4.5% to +5.5%)
- New $2.2bn share buy-back program: The Company
will return the $1.2bn proceeds from the redeemed Cleveland Cliffs
preference shares and has decided to advance $1bn as part of its
prospective 2022 capital return to shareholders (equivalent to 50%
of 1H 2021 FCF) as a share buy back program to be completed by the
end of 2021
Financial highlights (on the basis of
IFRS1,2):
(USDm) unless otherwise shown |
2Q 21 |
1Q 21 |
2Q 20 |
1H 21 |
1H 20 |
Sales |
19,343 |
|
16,193 |
|
10,976 |
|
35,536 |
|
25,820 |
|
Operating income / (loss) |
4,432 |
|
2,641 |
|
(253) |
|
7,073 |
|
(606) |
|
Net income / (loss) attributable to equity holders of the
parent |
4,005 |
|
2,285 |
|
(559) |
|
6,290 |
|
(1,679) |
|
Basic earnings / (loss) per common share (US$) |
3.47 |
|
1.94 |
|
(0.50) |
|
5.40 |
|
(1.57) |
|
|
|
|
|
|
|
Operating income/ (loss) / tonne (US$/t) |
276 |
|
160 |
|
(17) |
|
217 |
|
(18) |
|
EBITDA |
5,052 |
|
3,242 |
|
707 |
|
8,294 |
|
1,674 |
|
EBITDA/ tonne (US$/t) |
314 |
|
197 |
|
48 |
|
255 |
|
49 |
|
|
|
|
|
|
|
Crude steel production (Mt) |
17.8 |
17.6 |
14.4 |
35.4 |
35.5 |
Steel shipments (Mt) |
16.1 |
16.5 |
14.8 |
32.6 |
34.3 |
Total group iron ore production (Mt) |
11.2 |
|
13.3 |
|
13.5 |
|
24.5 |
|
27.9 |
|
Iron ore production (Mt) (AMMC and Liberia only) |
4.9 |
|
7.3 |
|
6.7 |
|
12.2 |
|
13.5 |
|
Iron ore shipment (Mt) (AMMC and Liberia only) |
4.6 |
|
7.4 |
|
6.8 |
|
12.0 |
|
13.3 |
|
Note: As previously announced, effective 2Q 2021, ArcelorMittal
has amended its presentation of reportable segment to report only
the operations of AMMC and Liberia within the Mining segment. The
results of every other mine is accounted for within the steel
segments that it primarily supplies. As from 2Q 2021 onwards,
ArcelorMittal Italia is deconsolidated and accounted as a joint
venture.
Commenting, Mr. Aditya Mittal,
ArcelorMittal Chief Executive Officer, said:“In addition
to our half year results, we have today also published our second
group Climate Action Report, which sets out our intent to be at the
forefront of the transition to net zero in our sector. This intent
is reflected in the new targets announced in the report – a new
group-wide target of a 25% reduction in carbon emissions by 2030,
and an increase in the target for our European business, to 35% by
2030. These targets are the most ambitious in our sector and build
on the progress we have already made this year. In recent weeks we
announced plans for ArcelorMittal to have the world’s first
full-scale zero carbon-emissions steel plant. Earlier this year we
launched XCarb™, our new brand for all low-carbon initiatives
including green steel certificates13, low carbon products, and the
XCarb™ innovation fund which is investing in new technologies
associated with the decarbonization of the steel industry. To
achieve net zero by 2050, accelerating progress in the next decade
is vital and ArcelorMittal is committed to seeing how we can move
faster, working collaboratively with stakeholders in the regions we
operate.”
“On the financial side, the second quarter has seen a continued
strong recovery backdrop alongside a sustained lean inventory
environment. This resulted in even healthier spreads in our core
markets than in the first three months of the year, supporting the
best quarterly and half year result we have reported since 2008.
This has enabled us to further improve our balance sheet and
deliver on our commitment to return cash to shareholders. Our
performance is clearly very welcome after the unprecedented
disruption the business and our people faced in 2020. I would like
to thank all our employees again for the way in which they managed
this volatility and have been able to quickly bring production back
online to maximize the opportunity from the current extraordinary
market conditions."
“Looking forward, we see the demand outlook further improving
into the second half and have therefore upgraded our steel
consumption forecasts for the year.”
Sustainable development and safety
performance
Health and safety - Own personnel and
contractors lost time injury frequency rateProtecting 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. We continue to
ensure extensive monitoring, with stringent sanitary practices and
social distancing measures at all operations and have implemented
remote working wherever possible and provided essential personal
protective equipment to our people.
Health and safety performance based on own personnel and
contractors lost time injury frequency (LTIF) rate was 0.89x in the
second quarter of 2021 ("2Q 2021") as compared to 0.78x for the
first quarter of 2021 ("1Q 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 first six months of 2021
(“1H 2021”) was 0.83x as compared to 0.63x in the first six months
of 2020 (“1H 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 eradicating fatalities.
A change to the Company’s executive remuneration policy has been
made to reflect the renewed safety focus. This includes a
substantial increase in the proportion of the short-term incentive
plan that is linked to safety, as well as a tangible link to
broader ESG topics in the long-term incentive plan.
Own personnel and contractors - Frequency
rate
Lost time injury frequency rate |
2Q 21 |
1Q 21 |
2Q 20 |
1H 21 |
1H 20 |
NAFTA |
0.17 |
|
0.71 |
|
0.51 |
|
0.43 |
|
0.60 |
|
Brazil |
0.26 |
|
0.17 |
|
0.14 |
|
0.22 |
|
0.31 |
|
Europe |
1.41 |
|
0.94 |
|
0.93 |
|
1.16 |
|
0.94 |
|
ACIS |
1.03 |
|
1.02 |
|
0.48 |
|
1.02 |
|
0.70 |
|
Mining |
0.71 |
|
0.62 |
|
— |
|
0.68 |
|
0.19 |
|
Total |
0.89 |
|
0.78 |
|
0.50 |
|
0.83 |
|
0.63 |
|
Key sustainable development highlights
for 2Q 2021:
During 2Q 2021, the Company highlighted:
- New
Climate action report published July 2021: New Group CO2
reduction target of 25% by 2030 which includes an acceleration of
the Europe CO2 reduction target to 35% by 2030 (from 30% by 2030
previously); the new targets will require an estimated gross
investment (pre-government support) of $10 billion through
203022
- The world’s first full scale
zero carbon-emissions steel plant announced: In line with
its new accelerated targets, the Company has announced the first
full scale zero carbon-emissions (scopes 1+2) steel plant at Sestao
(Spain)
- ArcelorMittal has agreed to
partner with the Science-Based Targets initiative (SBTI) to support
their development of a 1.5OC
methodology for the steel industry: A key input to this
process will be the work of the Net Zero Steel Pathway Methodology
Project, established and led by four steel companies including
ArcelorMittal over the past 15 months, alongside Worldsteel and
ResponsibleSteel™. The SBTI project is expected to be completed in
2022
- Investments in the Company's
recently launched XcarbTM
Innovation fund: On June 8, 2021, ArcelorMittal
announced the completion of its first investment since the launch
of the fund with an initial $10 million investment in Heliogen, a
renewable energy technology company which focuses on ‘unlocking the
power of sunlight to replace fossil fuels’. Heliogen’s technology
will harness solar energy by using a field of mirrors which will
act as a multi-acre magnifying glass to concentrate and capture
sunlight. The sunlight will then be subsequently converted into
heat (HelioHeat™), electricity (HelioPower™) or clean fuels
(HelioFuel™). All three Heliogen products have the potential to be
applicable to the steelmaking process and support the steel
industry’s transition to carbon-neutrality.
On July 21, 2021, ArcelorMittal announced it has completed its
second investment in the Company’s recently launched XCarb™
innovation fund, serving as lead investor in Form Energy’s $200
million Series D financing round, with a $25 million equity
injection. Form Energy, which was founded in 2017, is working to
accelerate the development of its breakthrough low-cost energy
storage technology to enable a reliable, secure, and
fully-renewable electric grid year-round. Alongside the $25 million
investment, ArcelorMittal and Form Energy have signed a joint
development agreement to explore the potential for ArcelorMittal to
provide iron, tailored to specific requirements, to Form Energy as
the iron input into their battery technology.
- ResponsibleSteel™ site
certification in Belgium, Germany and Luxembourg: On July
20, 2021 ArcelorMittal announced that it has achieved
ResponsibleSteel™ site certification in Belgium (Geel, Genk, Gent
and Liège), Luxembourg (Belval, Differdange and Rodange) and
Germany (Bremen and Eisenhüttenstadt). These are the first steel
plants globally to be independently audited and found to meet the
standards required for ResponsibleSteel, the industry’s first
global multi-stakeholder standard and certification initiative,
having met rigorously defined standards across a broad range of
social, environmental and governance criteria including: Climate
change and greenhouse gas emissions; Water stewardship and
biodiversity; Human rights and labour rights; Community relations
and business integrity. ArcelorMittal Europe Flat Products plans to
achieve full certification of all sites by the end of 2022.
- Further investments to
progress its digital transformation in Dunkirk: On July 6,
2021, ArcelorMittal inaugurated its first Digital Lab, located in
Dunkirk (Nord), near its largest steel production site in Europe,
with the support of local, regional and national public
authorities. The Digital Lab will bring together other
manufacturers, start-ups, universities and local digital players,
with the aim of bringing the best of digital innovation to the
steel industry and accelerating ArcelorMittal's digital
transformation.
- New highly sustainable
product launched for use in extreme climates: On May 2021,
ArcelorMittal launched a new product designed for use in extreme
climates. Granite® HDXtreme is the latest pre-painted steel in
ArcelorMittal’s organic coated Granite® range. It has a coating
system that provides high levels of protection against UV and
corrosion, designed for roofs and façades on buildings near the
sea, and its performance is guaranteed for up to 40 years.
Chromates and heavy metals-free, and 100% recyclable, Granite®
HDXtreme is highly sustainable: it has a lower CO2 footprint
compared with alternative solutions such as aluminum.
Analysis of results for the six months ended June 30,
2021 versus results for the six months ended June 30,
2020Total steel shipments for 1H 2021 were 32.6 million
metric tonnes (Mt) representing a decrease of 5.2% as compared to
34.3Mt in 1H 2020. Steel shipments on a scope adjusted basis (i.e.
excluding the shipments of ArcelorMittal USA, sold to Cleveland
Cliffs on December 9, 2020, and ArcelorMittal Italia14,
deconsolidated as from April 14, 2021), increased by 13.4% as
economic activity continued to recover. All segments experienced
year on year shipment growth: Europe +11.5% (scope adjusted basis),
Brazil +32.3%, ACIS +7.7% and NAFTA +18.4% (scope adjusted
basis).
Sales for 1H 2021 increased by 37.6% to $35.5 billion as
compared with $25.8 billion for 1H 2020, primarily due to higher
average steel selling prices (41.5%) partly offset by lower steel
shipments (5.2%) following the disposal of ArcelorMittal USA and
the deconsolidation of ArcelorMittal Italia.
Depreciation of $1.2 billion for 1H 2021 as compared with $1.5
billion in 1H 2020 was broadly stable on a scope adjusted basis.
The FY 2021 depreciation expense is expected to be approximately
$2.6 billion (based on current exchange rates).
There were no impairment charges for 1H 2021. Impairment charges
for 1H 2020 were $92 million and related to the permanent closure
of the coke plant in Florange (France), at the end of April
2020.
There were no exceptional items for 1H 2021. Exceptional items
for 1H 2020 were $678 million due to inventory related charges in
NAFTA and Europe.
Operating income for 1H 2021 of $7.1 billion was primarily
driven by positive steel price-cost effects (due to improved
demand, which coupled with lean inventories supported significant
increases in steel spreads and which, due to order book lags, are
not yet fully reflected in results) and improved iron ore reference
prices (+100.6%). The operating loss for 1H 2020 of $0.6 billion
was primarily driven by the impairment and exceptional items
discussed above, and lower steel spreads and iron ore market
prices.
Income from associates, joint ventures and other investments for
1H 2021 was $1.0 billion as compared to $127 million for 1H 2020.
1H 2021 income is significantly higher on account of improved
contribution from AMNS India8 , AMNS Calvert (Calvert)9 and other
investees as well as the annual dividend received from Erdemir of
$89 million. 1H 2020 income from associates, joint ventures and
other investments was negatively impacted by COVID-19.
Net interest expense in 1H 2021 was lower at $167 million as
compared to $227 million in 1H 2020 following debt repayments and
liability management. The Company continues to expect full year
2021 net interest expense to be approximately $0.3 billion.
Foreign exchange and other net financing losses were $427
million for 1H 2021 as compared to losses of $415 million for 1H
2020.
- Foreign exchange loss for 1H 2021
was $147 million as compared to a gain of $12 million in 1H
2020.
- 1H 2021 includes non-cash
mark-to-market gains of $37 million related to the mandatory
convertible bonds call option following the market price increase
of the underlying share while 1H 2020 included a loss of $117
million.
- 1H 2021 and 1H 2020 also include
early bond redemption premium expenses of $130 million and $66
million, respectively.
- 1H 2021 pension expenses are lower
by $0.1 billion following the disposal of ArcelorMittal USA.
ArcelorMittal recorded an income tax expense of $946 million for
1H 2021 (including $391 million deferred tax benefit) as compared
to $524 million for 1H 2020 (which included $262 million deferred
tax expense).
ArcelorMittal’s net income for 1H 2021 was $6,290 million, or
$5.40 basic earnings per common share, as compared to a net loss in
1H 2020 of $1,679 million, or $1.57 basic loss per common
share.
Analysis of results for 2Q 2021 versus 1Q 2021 and 2Q
2020Adjusted for the change in scope (i.e., excluding the
shipments of ArcelorMittal Italia14), steel shipments in 2Q 2021
increased 2.4% as compared with 15.6Mt in 1Q 20214, as economic
activity continued to recover. All segments experienced
quarter-on-quarter shipment growth: Europe +1.0% (scope adjusted
basis), Brazil +3.3%, ACIS +8.0% and NAFTA +3.2%. Total steel
shipments in 2Q 2021 of 16.1Mt were +30.6% higher than 2Q 2020 on a
scope adjusted basis (excluding ArcelorMittal Italia and
ArcelorMittal USA): Europe +32.4% (scope adjusted); NAFTA +45.7%
(scope adjusted); ACIS +17.0%; Brazil +43.9%.
Sales in 2Q 2021 were $19.3 billion as compared to $16.2 billion
for 1Q 2021 and $11.0 billion for 2Q 2020. As compared to 1Q 2021,
the 19.5% increase in sales was primarily due to higher realized
average steel selling prices (+20.3%), offset in part by lower
mining revenue due to lower shipment volumes (primarily due to the
impact of a 4 week labour strike action and subsequent ramp up to
full operations) at AMMC. Sales in 2Q 2021 were +76.2% higher as
compared to 2Q 2020 primarily due to higher average steel selling
prices (+61.3%), higher steel shipments (+8.1%), and significantly
higher iron ore reference prices (+114%), partially offset by the
impact of lower iron ore shipments (-33.5%).
Depreciation for 2Q 2021 was $620 million as compared to $601
million for 1Q 2021, and significantly lower than $739 million in
2Q 2020 (due in part to the deconsolidation of ArcelorMittal Italia
as from mid-April 2021 and sale of ArcelorMittal USA from December
2020).
There were no exceptional items for 2Q 2021 and 1Q 2021.
Exceptional items in 2Q 2020 of $221 million consisted of inventory
related charges in NAFTA.
Operating income for 2Q 2021 was $4.4 billion as compared to
$2.6 billion in 1Q 2021 and an operating loss of $253 million in 2Q
2020 (impacted by the exceptional item as discussed above). The
increased operating income for 2Q 2021 as compared to 1Q 2021
reflects a positive price-cost effect in the steel business,
improved steel shipments (on a scope adjusted basis) offset in part
by weaker Mining segment performance (driven by lower iron ore
shipments volumes offset in part by higher iron ore reference
prices).
Income from associates, joint ventures and other investments for
2Q 2021 was $590 million as compared to $453 million for 1Q 2021
and loss of $15 million in 2Q 2020. 2Q 2021 is significantly higher
on account of improved results from AMNS India8, Calvert9 and
Chinese investees15, whilst 1Q 2021 also included dividend income
from Erdemir of $89 million.
Net interest expense in 2Q 2021 was lower at $76 million as
compared to $91 million in 1Q 2021 and $112 million in 2Q 2020,
mainly due to savings following the repayments of bonds.
Foreign exchange and other net financing losses in 2Q 2021 was
$233 million as compared to losses of $194 million in 1Q 2021 and
gains of $36 million in 2Q 2020.
- Foreign exchange loss in 2Q 2021 of
$29 million, compares to $118 million loss in 1Q 2021 and $123
million gain for 2Q 2020, and includes non-cash mark-to-market gain
of $33 million related to the mandatory convertible bonds call
option (such impacts in 1Q 2021 and in 2Q 2020 were not
material).
- 2Q 2021 also included early bond
redemption premium expenses of $130 million.
ArcelorMittal recorded an income tax expense of $542 million
(including deferred tax benefit of $226 million) in 2Q 2021 as
compared to $404 million (including deferred tax benefit of $165
million) for 1Q 2021 and $184 million (including deferred tax
expense of $84 million) for 2Q 2020.
ArcelorMittal recorded net income for 2Q 2021 of $4,005 million
($3.47 basic earnings per common share), as compared to net income
of $2,285 million for 1Q 2021 ($1.94 basic earnings per common
share), and a net loss of $559 million for 2Q 2020 ($0.5 basic loss
per common share).
Analysis of segment operations
As previously announced, following the Company’s steps to
streamline and optimize the business, primary responsibility for
captive mining operations have been moved to the Steel segments
(which are primary consumers of the mines' output). The Mining
segment will retain primary responsibility for the operation of
ArcelorMittal Mines Canada (AMMC) and Liberia, and will continue to
provide technical support to all mining operations within the
Group. As a result, effective 2Q 2021, ArcelorMittal has amended
its presentation of reportable segments to reflect this
organizational change, as required by IFRS. Only the operations of
AMMC and Liberia are reported within the Mining segment. The
results of each other mine are accounted for within the steel
segments that it primarily supplies.
NAFTA
(USDm) unless otherwise shown |
2Q 21 |
1Q 21 |
2Q 20 |
1H 21 |
1H 20 |
Sales |
3,242 |
|
2,536 |
|
2,793 |
|
5,778 |
|
7,129 |
|
Operating income / (loss) |
675 |
|
261 |
|
(342) |
|
936 |
|
(452) |
|
Depreciation |
(71) |
|
(71) |
|
(151) |
|
(142) |
|
(292) |
|
Exceptional items |
— |
|
— |
|
(221) |
|
— |
|
(462) |
|
EBITDA |
746 |
|
332 |
|
30 |
|
1,078 |
|
302 |
|
Crude steel production (kt) |
2,272 |
|
2,175 |
|
3,698 |
|
4,447 |
|
9,201 |
|
Steel shipments (kt) |
2,590 |
|
2,511 |
|
3,797 |
|
5,101 |
|
9,333 |
|
Average steel selling price (US$/t) |
1,062 |
|
850 |
|
670 |
|
957 |
|
697 |
|
NAFTA segment crude steel production increased by 4.5% to 2.3Mt
in 2Q 2021, as compared to 2.2Mt in 1Q 2021 following an
improvement in demand and the recovery of Mexican operations post
disruptions due to severe weather in the prior quarter.
Steel shipments in 2Q 2021 increased by 3.2% to 2.6Mt, as
compared to 2.5Mt in 1Q 2021. Adjusted for scope (excluding the
impact of ArcelorMittal USA which was sold in December 2020), steel
shipments were +45.7% higher in 2Q 2021 as compared to 1.8Mt in 2Q
2020 which was impacted by COVID-19.
Sales in 2Q 2021 increased by 27.8% to $3.2 billion, as compared
to $2.5 billion in 1Q 2021, primarily due to a 24.9% increase in
average steel selling prices and increase in steel shipments (as
discussed above).
Exceptional items for 2Q 21 and 1Q 21 were nil. Exceptional
items for 2Q 2020 of $221 million related to inventory charges.
Operating income in 2Q 2021 was $675 million as compared to $261
million in 1Q 2021 and an operating loss of $342 million in 2Q 2020
which was impacted by exceptional items noted above and by the
COVID-19 pandemic.
EBITDA in 2Q 2021 of $746 million was higher as compared to $332
million in 1Q 2021, primarily due to a positive price-cost effect
and higher shipment volumes as noted above, as well as the impacts
of severe weather on our Mexican operations in the prior period.
EBITDA in 2Q 2021 was higher as compared to $30 million in 2Q 2020
mainly due to a significant positive price-cost effect.
Brazil
(USDm) unless otherwise shown |
2Q 21 |
1Q 21 |
2Q 20 |
1H 21 |
1H 20 |
Sales |
3,263 |
|
2,535 |
|
1,204 |
|
5,798 |
|
2,807 |
|
Operating income |
1,028 |
|
714 |
|
119 |
|
1,742 |
|
272 |
|
Depreciation |
(56) |
|
(53) |
|
(52) |
|
(109) |
|
(122) |
|
EBITDA |
1,084 |
|
767 |
|
171 |
|
1,851 |
|
394 |
|
Crude steel production (kt) |
3,150 |
|
3,034 |
|
1,692 |
|
6,184 |
|
4,371 |
|
Steel shipments (kt) |
2,964 |
|
2,868 |
|
2,059 |
|
5,832 |
|
4,410 |
|
Average steel selling price (US$/t) |
1,038 |
|
837 |
|
550 |
|
939 |
|
599 |
|
Brazil segment crude steel production increased 3.8% to 3.2Mt in
2Q 2021 as compared to 3.0Mt in 1Q 2021, and was significantly
higher as compared to 1.7Mt in 2Q 2020 when production was adapted
to match the reduced demand levels driven by the COVID-19
pandemic.
Steel shipments in 2Q 2021 increased by 3.3% to 3.0Mt as
compared to 2.9Mt in 1Q 2021, primarily due to a 5.6% increase in
flat product shipments (with increased exports), and higher long
products shipments (up +0.8%). Steel shipments were 44% higher in
2Q 2021 as compared to 2.1Mt in 2Q 2020 due to both higher flat and
long products.
Sales in 2Q 2021 increased by 28.7% to $3.3 billion as compared
to $2.5 billion in 1Q 2021, following a 24.1% increase in average
steel selling prices and a 3.3% increase in steel shipments.
Operating income in 2Q 2021 of $1,028 million was higher as
compared to $714 million in 1Q 2021 and $119 million in 2Q 2020
(impacted by COVID-19 pandemic).
EBITDA in 2Q 2021 increased by 41.3% to $1,084 million as
compared to $767 million in 1Q 2021, primarily due to a positive
price-cost effect and higher steel shipments. EBITDA in 2Q 2021 was
significantly higher as compared to $171 million in 2Q 2020
primarily due to a positive price-cost effect and higher steel
shipments.
Europe
(USDm) unless otherwise shown |
2Q 21 |
1Q 21 |
2Q 20 |
1H 21 |
1H 20 |
Sales |
10,672 |
|
9,355 |
|
5,800 |
|
20,027 |
|
13,454 |
|
Operating income /(loss) |
1,262 |
|
599 |
|
(228) |
|
1,861 |
|
(654) |
|
Depreciation |
(316) |
|
(299) |
|
(355) |
|
(615) |
|
(704) |
|
Impairment items |
— |
|
— |
|
— |
|
— |
|
(92) |
|
Exceptional items |
— |
|
— |
|
— |
|
— |
|
(191) |
|
EBITDA |
1,578 |
|
898 |
|
127 |
|
2,476 |
|
333 |
|
Crude
steel production (kt) |
9,386 |
|
9,697 |
|
7,074 |
|
19,083 |
|
16,986 |
|
Steel
shipments (kt) |
8,293 |
|
9,013 |
|
6,817 |
|
17,306 |
|
16,117 |
|
Average
steel selling price (US$/t) |
948 |
|
813 |
|
633 |
|
878 |
|
636 |
|
Europe segment crude steel production was 3.2% lower at 9.4Mt in
2Q 2021 as compared to 9.7Mt in 1Q 2021 and higher as compared to
7.1Mt in 2Q 2020 (which was impacted by weak demand due to the
COVID-19 pandemic). Following the formation of a public-private
partnership between Invitalia and 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 6.5% in
2Q 2021 as compared to 1Q 2021 primarily due to the restart of BF#B
in Ghent, Belgium in March following a major reline where slab
inventory had been built up during the downtime to maintain rolling
utilization. Steel shipments in 2Q 2021 decreased by 8.0% to
8.3Mt as compared to 9.0Mt in 1Q 2021. On a scope adjusted basis
excluding ArcelorMittal Italia, steel shipments increased by +1%.
Steel shipments were 21.6% higher in 2Q 2021 (32.4% on scope
adjusted basis) as compared to 6.8Mt in 2Q 2020 (impacted by
COVID-19), with higher flat and long steel shipments.
Sales in 2Q 2021 increased 14.1% to $10.7 billion, as compared
to $9.4 billion in 1Q 2021, primarily due to 16.6% higher average
selling prices (flat products +17.4% and long products +15.2%).
Operating income in 2Q 2021 was $1,262 million as compared to
$599 million in 1Q 2021 and an operating loss of $228 million in 2Q
2020 (impacted by the COVID-19 pandemic).
EBITDA in 2Q 2021 of $1,578 million almost doubled compared to
$898 million in 1Q 2021, primarily due to a positive price-cost
effect. EBITDA in 2Q 2021 increased significantly as compared to
$127 million in 2Q 2020 primarily due to a positive price-cost
effect and higher steel shipments.
ACIS
(USDm) unless otherwise shown |
2Q 21 |
1Q 21 |
2Q 20 |
1H 21 |
1H 20 |
Sales |
2,768 |
|
2,128 |
|
1,224 |
|
4,896 |
|
2,732 |
|
Operating income / (loss) |
923 |
|
535 |
|
(45) |
|
1,458 |
|
(92) |
|
Depreciation |
(110) |
|
(110) |
|
(113) |
|
(220) |
|
(239) |
|
Exceptional items |
— |
|
— |
|
— |
|
— |
|
(21) |
|
EBITDA |
1,033 |
|
645 |
|
68 |
|
1,678 |
|
168 |
|
Crude
steel production (kt) |
2,975 |
|
2,683 |
|
1,956 |
|
5,658 |
|
4,954 |
|
Steel
shipments (kt) |
2,801 |
|
2,595 |
|
2,395 |
|
5,396 |
|
5,009 |
|
Average
steel selling price (US$/t) |
806 |
|
647 |
|
408 |
|
729 |
|
441 |
|
ACIS segment crude steel production in 2Q 2021 was 10.9% higher
at 3.0Mt as compared to 2.7Mt at 1Q 2021 primarily due to improved
production performance in South Africa. Crude steel production in
2Q 2021 was 52.1% higher as compared to 2.0Mt in 2Q 2020 primarily
due to COVID-19 related lockdown measures implemented in South
Africa in 2Q 2020.
Steel shipments in 2Q 2021 increased by 8.0% to 2.8Mt as
compared to 2.6Mt as at 1Q 2021, mainly due to improved production
performance as described above.
Sales in 2Q 2021 increased by 30.1% to $2.8 billion as compared
to $2.1 billion in 1Q 2021, primarily due to higher average steel
selling prices (+24.6%) and higher steel shipments (+8.0%).
Operating income in 2Q 2021 was $923 million as compared to $535
million in 1Q 2021 and an operating loss of $45 million in 2Q
2020.
EBITDA was $1,033 million in 2Q 2021 as compared to $645 million
in 1Q 2021, primarily due to positive price-cost effect and higher
steel shipments. EBITDA in 2Q 2021 was significantly higher as
compared to $68 million in 2Q 2020, primarily due to positive
price-cost effects and significantly higher steel shipments as
above.
Mining
(USDm) unless otherwise shown |
2Q 21 |
1Q 21 |
2Q 20 |
1H 21 |
1H 20 |
Sales |
889 |
|
1,179 |
|
607 |
|
2,068 |
|
1,131 |
|
Operating income |
508 |
|
779 |
|
268 |
|
1,287 |
|
415 |
|
Depreciation |
(56) |
|
(59) |
|
(55) |
|
(115) |
|
(126) |
|
EBITDA |
564 |
|
838 |
|
323 |
|
1,402 |
|
541 |
|
Iron
ore production (Mt) |
4.9 |
7.3 |
6.7 |
12.2 |
13.5 |
Iron
ore shipment (Mt) |
4.6 |
7.4 |
6.8 |
12.0 |
13.3 |
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 (ArcelorMittal Mines
Canada (AMMC)10 and Liberia only) decreased in 2Q 2021 by 32.9% as
compared to 1Q 2021 and by 27.6% as compared to 2Q 2020. Lower
production was primarily due to the impact of a 4 week labour
strike action (and subsequent three week ramp up to full
operations) at AMMC, and production impacts in Liberia following a
rail accident.
Iron ore shipments decreased in 2Q 2021 by 39.2% as compared to
1Q 2021 and by 33.5% as compared to 2Q 2020, primarily driven by
lower shipments in AMMC and Liberia as discussed above.
Operating income in 2Q 2021 decreased to $508 million as
compared to $779 million in 1Q 2021 and increased as compared to
$268 million in 2Q 2020.
EBITDA in 2Q 2021 decreased by 32.7% to $564 million as compared
to $838 million in 1Q 2021, reflecting the negative impact of lower
iron ore shipments (-39.2%), and higher freight costs offset in
part by higher iron ore reference prices (+19.8%) and higher
quality premia. EBITDA in 2Q 2021 was significantly higher as
compared to $323 million in 2Q 2020, primarily due to higher iron
ore reference prices (+114%) offset in part by lower iron ore
shipments (-33.5%).
Joint venturesArcelorMittal has
investments in various joint ventures and associate entities
globally. The Company considers 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 Group.
Calvert
(USDm) unless otherwise shown |
2Q 21 |
1Q 21 |
2Q 20 |
1H 21 |
1H 20 |
Production (100% basis) (kt)* |
1,234 |
|
1,261 |
|
632 |
|
2,495 |
|
1,879 |
|
Steel shipments (100% basis) (kt)** |
1,155 |
|
1,137 |
|
673 |
|
2,292 |
|
1,895 |
|
EBITDA (100% basis)*** |
270 |
|
154 |
|
(8) |
|
424 |
|
63 |
|
* 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: all 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 as a stand-alone business and in accordance with
group policy, following the weighted average method of accounting
for cost of sales and inventory.
Calvert’s hot strip mill production during 2Q 2021 totaled 1.2Mt
as compared to 1.3Mt in 1Q 2021.
EBITDA*** during 2Q 2021 of $270 million (100% basis) was higher
as compared to $154 million in 1Q 2021, largely reflecting the
improved market prices.
AMNS India
(USDm) unless otherwise shown |
2Q 21 |
1Q 21 |
2Q 20 |
1H 21 |
1H 20 |
Crude steel production (100% basis) (kt) |
1,831 |
|
1,824 |
|
1,218 |
|
3,655 |
|
2,961 |
|
Steel shipments (100% basis) (kt) |
1,721 |
|
1,705 |
|
1,234 |
|
3,426 |
|
2,703 |
|
EBITDA (100% basis) |
607 |
|
403 |
|
107 |
|
1,010 |
|
247 |
|
Despite the onset of further lockdowns related to second wave of
the COVID-19 pandemic negatively impacting domestic demand, AMNS
India was able to maintain robust production levels and utilize its
coastal location and divert tonnes from domestic to the export
market. As a result, crude steel production in 2Q 2021 remained
stable at 1.8Mt as compared 1Q 2021.
AMNS India generated EBITDA of $607 million (100% basis) as
compared to $403 million in 1Q 2021.
Liquidity and Capital
Resources
Net cash provided by operating activities for 2Q 2021 was $2,312
million as compared to $997 million in 1Q 2021 and $302 million in
2Q 2020. Net cash provided by operating activities in 2Q 2021
includes a working capital investment of $1,901 million reflecting
higher activity and pricing levels, as compared to a working
capital investment of $1,634 million in 1Q 2021 and $392 million in
2Q 2020. Working capital needs in 2021 will be determined by the
operating conditions towards the end of the year. We remain focused
on maintaining the working capital efficiencies achieved in recent
periods.
Capex of $569 million in 2Q 2021 compares to $619 million in 1Q
2021 and $401 million in 2Q 2020.
The FY 2021 capex guidance has been increased to $3.2 billion21
from previous guidance of $2.9 billion to reflect the impacts of
higher volumes and capacity utilization – the Company’s operating
plan (including the number of tools utilized) has changed to
reflect the strength of the demand environment.
Net cash provided by other investing activities in 2Q 2021 of
$687 million as compared to $887 million in 1Q 2021 and $37 million
in 2Q 2020. 2Q 2021 cash inflow primarily relates to $0.7 billion
cash received from the sale of 38.2 million Cleveland Cliffs
shares. 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 in 2Q 2021 was $3,780
million as compared to $1,388 million in 1Q 2021 and net cash
provided by financing activities of $1,516 million in 2Q 2020. In
2Q 2021, net cash used in financing activities includes an outflow
of $2.2 billion primarily related to bond repurchases as summarized
below.
- On April 9, 2021, at maturity,
ArcelorMittal repaid all of the outstanding €285 million ($342
million) of its €500 million Fixed Rate Notes due 2021;
- On June 29, 2021, pursuant to a cash
tender offer, ArcelorMittal repurchased €471 million ($562 million)
of its EUR denominated 2.25% Notes due 2024 for a total aggregate
purchase price including accrued interest of €501 million ($595
million). Following this purchase, €529 million ($625 million)
principal amount remained outstanding;
- On June 29, 2021, pursuant to a cash
tender offer, ArcelorMittal repurchased $460 million of its U.S.
dollar denominated 3.60% Notes due 2024 for a total aggregate
purchase price including accrued interest of $503 million.
Following this purchase $290 million principal amount remained
outstanding;
- On June 29, 2021, pursuant to a cash
tender offer, ArcelorMittal repurchased $73 million of its U.S.
dollar denominated 6.125% notes due 2025 for a total aggregate
purchase price including accrued interest of $86 million. Following
this purchase, $183 million principal amount remained outstanding;
and
- On June 29, 2021, pursuant to a cash
tender offer, ArcelorMittal repurchased $349 million of its U.S.
dollar denominated 4.55% notes due 2026 for a total aggregate
purchase price including accrued interest of $399 million.
Following this purchase, $401 million principal amount remained
outstanding.
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. Net cash provided by financing
activities in 2Q 2020 includes net proceeds from the $2 billion
offering of common shares and mandatorily convertible notes ($750
million common shares and $1.25 billion mandatorily convertible
notes).
On June 18, 2021, ArcelorMittal announced that it had completed
the second share buyback program announced on March 4, 2021. By
market close on June 17, 2021, ArcelorMittal had repurchased
17,847,057 shares for a total value of approximately €469 million
(equivalent to $570 million) at an approximate average price per
share of €26.27. Furthermore, on July 7, 2021, ArcelorMittal
announced that it had completed the third share buyback program
announced on June 18, 2021 relating to the sale of 38.2 million
Cleveland-Cliffs common stock. By market close on July 5, 2021,
ArcelorMittal had repurchased 24,458,524 shares for a total value
of approximately €630 million (equivalent to $750 million, of which
$427 million was paid in June 2021 with $323 million paid in early
July 2021) at an approximate average price per share of €25.77. All
details are available on the Company’s website at:
https://corporate.arcelormittal.com/investors/equity-investors/share-buyback-program.
During 2Q 2021 the Company paid total dividends of $301 million
of which $284 million was paid to ArcelorMittal shareholders and
$17 million paid to minority shareholders which compares to $65
million in 1Q 2021 related to minority shareholders of AMMC and
Bekaert.
Outflows from lease payments and other financing activities
(net) were $250 million in 2Q 2021 (lease payments were $49 million
for 1Q 2021 and $59 million for 2Q 2020) including $199 million
related to cash on deconsolidation of ArcelorMittal Italia.
Gross debt decreased by $2.2 billion to $9.2 billion as of June
30, 2021, as compared to $11.4 billion as of March 31, 2021 and
$12.3 billion as of December 31, 2020. As of June 30, 2021, net
debt decreased to $5.0 billion as compared to $5.9 billion as of
March 31, 2021, primarily driven by free cash flows offset in part
by share buy backs and dividends.
As of June 30, 2021, the Company had liquidity of $9.7 billion,
consisting of cash and cash equivalents of $4.2 billion ($5.5
billion as of March 31, 2021 and $6.0 billion as of December 31,
2020) and $5.5 billion of available credit lines11.
As of June 30, 2021, the average debt maturity was 5.7
years.
Key recent developments
- On July 29, 2021, ArcelorMittal
announced a new share buyback program in the amount of $2.2 billion
under the authorization given by the annual general meeting of
shareholders held on June 8, 2021. The Company announced that it
will (i) return the proceeds from the redeemed Cleveland Cliffs
preference shares and (ii) advance a 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) by
launching this new $2.2bn share buy-back to be completed by end of
2021. This Program will commence August 2, 2021 and is expected to
be completed by December 31, 2021, subject to market
conditions.
- On July 28, 2021, ArcelorMittal
North America Holding, a wholly owned subsidiary of ArcelorMittal
SA, announced it had received approximately $1.2 billion in cash
from Cleveland-Cliffs Inc. (‘Cliffs’) related to a purported
redemption of Cliffs Series B Participating Redeemable Preferred
Stock. The redemption of the preferred stock by Cleveland Cliffs
brings the total cash proceeds from the sale of ArcelorMittal USA
to $3.1 billion, all of which will have been returned to
ArcelorMittal shareholders via share buybacks17.
- On July 20, 2021, ArcelorMittal
announced that it has achieved ResponsibleSteel™ site certification
in Belgium, Germany and Luxembourg. The Company’s steelmaking sites
in ArcelorMittal Belgium (Geel, Genk, Gent and Liège), Luxembourg
(Belval, Differdange and Rodange) and Germany (Bremen and
Eisenhüttenstadt) are the first steel plants globally to be
independently audited and found to meet the standards required for
ResponsibleSteel, the industry’s first global multi-stakeholder
standard and certification initiative. The ResponsibleSteel audit
process enables each site to prove that its production processes
meet rigorously defined standards across a broad range of social,
environmental and governance criteria including: Climate change and
greenhouse gas emissions; Water stewardship and biodiversity; Human
rights and labour rights; Community relations and business
integrity.
The standard is based on 12 principles with a variety of
criteria and underlying requirements. To be awarded with
ResponsibleSteel certification, each site has to undergo a detailed
third-party audit, with an independent Certification Committee
making the final certification decision. ArcelorMittal worked with
international auditor AFNOR and its German subsidiary GUTcert, both
specialist companies providing certification and assessment
services.
- On July 13, 2021, ArcelorMittal
signed a memorandum of understanding (MoU) with the Spanish
Government that will see a €1 billion investment in decarbonization
technologies at ArcelorMittal Asturias’ plant in Gijón and that
ArcelorMittal Sestao will become the world’s first full-scale zero
carbon-emissions steel plant. The investments will reduce CO2
emissions at ArcelorMittal’s Spanish operations by up to 4.8
million tonnes, which represents approximately 50% of emissions,
within the next five years20. At the heart of the plan is a 2.3
million tonne green hydrogen direct reduced iron (DRI) unit,
complemented by a 1.1 million tonne hybrid electric arc furnace
(EAF). This starts the transition of the Gijón plant 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 new DRI - which will be the first of its kind
in Spain - and EAF will be in production before the end of 2025. To
maximize the emissions reduction potential, ultimately green
hydrogen will be used to reduce the iron ore in the DRI, with the
EAF powered by renewable electricity. The support of the national
and regional governments in this project is crucial as it will
enable ArcelorMittal to have access to green hydrogen supplied
through a consortium of companies that will cooperate in the
construction of the infrastructure required in order to produce
hydrogen in the Iberian Peninsula using solar-powered electrolysis
and to transport it directly through a network of pipelines. The
initiative involves the construction of multiple large-scale solar
farms, with hydrogen produced in situ and with the corresponding
impact in terms of employment. The Gijón DRI will also feed the
company’s Sestao plant, situated approximately 250km from Gijón,
where production is already entirely from the electric arc furnace
route. This means that by 2025 ArcelorMittal Sestao will produce
1.6 million tonnes of steel and be the world’s first full-scale
steel plant to achieve zero carbon-emissions.
- On June 18, 2021, ArcelorMittal
North America Holding, a wholly owned subsidiary of ArcelorMittal
SA announced the conclusion of the sale of its remaining 38.2
million common shares in Cleveland-Cliffs Inc.
(‘Cleveland-Cliffs’). The value crystallized from the sale of
Cleveland-Cliffs common shares was subsequently returned to
shareholders via a $750 million share buyback program which was
completed on July 7, 2021.
- On June 8, 2021, the Annual General
Meeting and Extraordinary General Meeting of shareholders of
ArcelorMittal approved all resolutions by a strong majority. Over
73.5% of the voting rights were represented at the General
meeting.
Outlook
Economic activity has progressively improved during 2Q 2021,
with a favorable supply demand balance and a low inventory
environment following a period of prolonged destocking, supporting
increased utilization levels and healthy steel spreads. Based on
year-to-date growth and the current economic outlook, ArcelorMittal
now expects global apparent steel consumption (“ASC”) to grow
further in 2021 by between +7.5% to +8.5% (revised up from previous
expectation of +4.5% to +5.5% growth). By region:
- In the US, ASC is expected to grow
within a range of +16% to +18% in 2021 (up from previous guidance
of +10.0% to +12.0%), with stronger ASC in flat and long products
offset in part by weak pipe and tubes demand due to weak
energy;
- In Europe, ASC is expected to grow
within a range of +13% to +15% in 2021 (up from previous guidance
of +7.5% to +9.5%); with strong manufacturing (especially machinery
and electrical appliances and residential construction) all back to
at least pre-crisis levels, with automotive recovering from low
levels albeit output limited by shortages in semi-conductors;
- In Brazil, ASC is expected to
continue to expand in 2021 with growth expected in the range of
+21% to +23% (up significantly from previous guidance of +6.0% to
+8.0%) supported by ongoing construction demand and recovery in the
end markets for flat steel;
- In the CIS, ASC growth in 2021 is
expected to recover to within a range of +4% to +6% (unchanged from
previous guidance);
- In India, ASC growth in 2021 is
expected to recover to within a range of +15% to +17% (slightly
lower than previous guidance of +16% to +18%);
- As a result, overall World ex-China
ASC in 2021 is expected to grow within the range of +12% to +13%
(up from previous guidance of +8.5% to +9.5%); and
- In China, overall demand is expected
to continue to grow in 2021 to +3% to +5% supported by ongoing
stimulus (up from previous guidance of +1.0% to +3.0%).
ArcelorMittal Condensed Consolidated Statement of
Financial Position1
In millions of U.S. dollars |
Jun 30, 2021 |
Mar 31, 2021 |
Dec 31, 2020 |
ASSETS |
|
|
|
Cash and cash equivalents and restricted funds |
4,184 |
|
5,474 |
|
5,963 |
|
Trade accounts receivable and other |
5,586 |
|
3,783 |
|
3,072 |
|
Inventories |
16,286 |
|
13,228 |
|
12,328 |
|
Prepaid expenses and other current assets |
3,344 |
|
3,160 |
|
2,281 |
|
Asset held for sale12 |
— |
|
4,854 |
|
4,329 |
|
Total Current Assets |
29,400 |
|
30,499 |
|
27,973 |
|
|
|
|
|
Goodwill and intangible assets |
4,557 |
|
4,212 |
|
4,312 |
|
Property, plant and equipment |
30,229 |
|
29,498 |
|
30,622 |
|
Investments in associates and joint ventures |
9,090 |
|
7,205 |
|
6,817 |
|
Deferred tax assets |
7,824 |
|
7,831 |
|
7,866 |
|
Other assets16 |
4,324 |
|
4,404 |
|
4,462 |
|
Total Assets |
85,424 |
|
83,649 |
|
82,052 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Short-term debt and current portion of long-term debt |
2,639 |
|
2,813 |
|
2,507 |
|
Trade accounts payable and other |
14,076 |
|
12,231 |
|
11,525 |
|
Accrued expenses and other current liabilities |
6,201 |
|
5,729 |
|
5,596 |
|
Liabilities held for sale12 |
— |
|
3,271 |
|
3,039 |
|
Total Current Liabilities |
22,916 |
|
24,044 |
|
22,667 |
|
|
|
|
|
Long-term debt, net of current portion |
6,589 |
|
8,552 |
|
9,815 |
|
Deferred tax liabilities |
1,958 |
|
1,812 |
|
1,832 |
|
Other long-term liabilities |
7,636 |
|
7,259 |
|
7,501 |
|
Total Liabilities |
39,099 |
|
41,667 |
|
41,815 |
|
|
|
|
|
Equity attributable to the equity holders of the parent |
44,165 |
|
40,000 |
|
38,280 |
|
Non-controlling interests |
2,160 |
|
1,982 |
|
1,957 |
|
Total Equity |
46,325 |
|
41,982 |
|
40,237 |
|
Total Liabilities and Shareholders’ Equity |
85,424 |
|
83,649 |
|
82,052 |
|
ArcelorMittal Condensed Consolidated Statement of
Operations1
|
Three months ended |
Six months ended |
In millions of U.S. dollars unless otherwise
shown |
Jun 30, 2021 |
Mar 31, 2021 |
Jun 30, 2020 |
Jun 30, 2021 |
Jun 30, 2020 |
Sales |
19,343 |
|
16,193 |
|
10,976 |
|
35,536 |
|
25,820 |
|
Depreciation (B) |
(620) |
|
(601) |
|
(739) |
|
(1,221) |
|
(1,510) |
|
Impairment items5(B) |
— |
|
— |
|
— |
|
— |
|
(92) |
|
Exceptional items6 (B) |
— |
|
— |
|
(221) |
|
— |
|
(678) |
|
Operating income / (loss) (A) |
4,432 |
|
2,641 |
|
(253) |
|
7,073 |
|
(606) |
|
Operating margin % |
22.9 |
% |
16.3 |
% |
(2.3) |
% |
19.9 |
% |
(2.3) |
% |
|
|
|
|
|
|
Income / (loss) from associates, joint ventures and other
investments |
590 |
|
453 |
|
(15) |
|
1,043 |
|
127 |
|
Net interest expense |
(76) |
|
(91) |
|
(112) |
|
(167) |
|
(227) |
|
Foreign exchange and other net financing (loss) / gain |
(233) |
|
(194) |
|
36 |
|
(427) |
|
(415) |
|
Income / (loss) before taxes and non-controlling
interests |
4,713 |
|
2,809 |
|
(344) |
|
7,522 |
|
(1,121) |
|
Current tax expense |
(768) |
|
(569) |
|
(100) |
|
(1,337) |
|
(262) |
|
Deferred tax benefit / (expense) |
226 |
|
165 |
|
(84) |
|
391 |
|
(262) |
|
Income tax expense |
(542) |
|
(404) |
|
(184) |
|
(946) |
|
(524) |
|
Income / (loss) including non-controlling
interests |
4,171 |
|
2,405 |
|
(528) |
|
6,576 |
|
(1,645) |
|
Non-controlling interests income |
(166) |
|
(120) |
|
(31) |
|
(286) |
|
(34) |
|
Net income / (loss) attributable to equity holders of the
parent |
4,005 |
|
2,285 |
|
(559) |
|
6,290 |
|
(1,679) |
|
|
|
|
|
|
|
Basic earnings / (loss) per common share ($) |
3.47 |
|
1.94 |
|
(0.50) |
|
5.40 |
|
(1.57) |
|
Diluted earnings / (loss) per common share ($) |
3.46 |
|
1.93 |
|
(0.50) |
|
5.39 |
|
(1.57) |
|
|
|
|
|
|
|
Weighted average common shares outstanding (in millions) |
1,154 |
|
1,178 |
|
1,119 |
|
1,165 |
|
1,066 |
|
Diluted weighted average common shares outstanding (in
millions) |
1,157 |
|
1,183 |
|
1,119 |
|
1,168 |
|
1,066 |
|
|
|
|
|
|
|
OTHER INFORMATION |
|
|
|
|
|
EBITDA19 (C =
A-B) |
5,052 |
|
3,242 |
|
707 |
|
8,294 |
|
1,674 |
|
EBITDA Margin % |
26.1 |
% |
20.0 |
% |
6.4 |
% |
23.3 |
% |
6.5 |
% |
|
|
|
|
|
|
Total group iron ore production (Mt) |
11.2 |
13.3 |
13.5 |
24.5 |
27.9 |
Crude steel production (Mt) |
17.8 |
17.6 |
14.4 |
35.4 |
35.5 |
Steel shipments (Mt) |
16.1 |
16.5 |
14.8 |
32.6 |
34.3 |
ArcelorMittal Condensed Consolidated Statement of Cash
flows1
|
Three months ended |
Six months ended |
In millions of U.S. dollars |
Jun 30, 2021 |
Mar 31, 2021 |
Jun 30, 2020 |
Jun 30, 2021 |
Jun 30, 2020 |
Operating activities: |
|
|
|
|
|
Income /(loss) attributable to equity holders of the
parent |
4,005 |
|
2,285 |
|
(559) |
|
6,290 |
|
(1,679) |
|
Adjustments to reconcile net income/ (loss) to net cash provided by
operations: |
|
|
|
|
|
Non-controlling interests income |
166 |
|
120 |
|
31 |
|
286 |
|
34 |
|
Depreciation and impairment items5 |
620 |
|
601 |
|
739 |
|
1,221 |
|
1,602 |
|
Exceptional items6 |
— |
|
— |
|
221 |
|
— |
|
678 |
|
(Income) / loss from associates, joint ventures and other
investments |
(590) |
|
(453) |
|
15 |
|
(1,043) |
|
(127) |
|
Deferred tax (benefit) / expense |
(226) |
|
(165) |
|
84 |
|
(391) |
|
262 |
|
Change in working capital |
(1,901) |
|
(1,634) |
|
(392) |
|
(3,535) |
|
(501) |
|
Other operating activities (net) |
238 |
|
243 |
|
163 |
|
481 |
|
627 |
|
Net cash provided by operating activities (A) |
2,312 |
|
997 |
|
302 |
|
3,309 |
|
896 |
|
Investing activities: |
|
|
|
|
|
Purchase of property, plant and equipment and intangibles (B) |
(569) |
|
(619) |
|
(401) |
|
(1,188) |
|
(1,251) |
|
Other investing activities (net) |
687 |
|
887 |
|
37 |
|
1,574 |
|
132 |
|
Net cash provided by / (used in) investing
activities |
118 |
|
268 |
|
(364) |
|
386 |
|
(1,119) |
|
Financing activities: |
|
|
|
|
|
Net (payments) relating to payable to banks and long-term debt |
(2,232) |
|
(624) |
|
(395) |
|
(2,856) |
|
(619) |
|
Dividends paid to ArcelorMittal shareholders |
(284) |
|
— |
|
— |
|
(284) |
|
— |
|
Dividends paid to minorities (C) |
(17) |
|
(65) |
|
(7) |
|
(82) |
|
(110) |
|
Share buyback |
(997) |
|
(650) |
|
— |
|
(1,647) |
|
— |
|
Common share offering |
— |
|
— |
|
740 |
|
— |
|
740 |
Proceeds from Mandatorily Convertible Notes |
— |
|
— |
|
1,237 |
|
— |
|
1237 |
Lease payments and other financing activities (net) |
(250) |
|
(49) |
|
(59) |
|
(299) |
|
(118) |
|
Net cash (used in) / provided by financing
activities |
(3,780) |
|
(1,388) |
|
1,516 |
|
(5,168) |
|
1,130 |
|
Net (decrease) / increase in cash and cash equivalents |
(1,350) |
|
(123) |
|
1,454 |
|
(1,473) |
|
907 |
|
Cash and cash equivalents transferred from / (to) assets held for
sale |
10 |
|
(7) |
|
— |
|
3 |
|
— |
|
Effect of exchange rate changes on cash |
47 |
|
(106) |
|
(13) |
|
(59) |
|
(144) |
|
Change in cash and cash equivalents |
(1,293) |
|
(236) |
|
1,441 |
|
(1,529) |
|
763 |
|
|
|
|
|
|
|
Free cash flow (D=A+B+C)18 |
1,726 |
|
313 |
|
(106) |
|
2,039 |
|
(465) |
|
Appendix 1: Product shipments by
region(1)
(000'kt) |
2Q 21 |
1Q 21 |
2Q 20 |
1H 21 |
1H 20 |
Flat |
1,896 |
|
1,822 |
|
3,328 |
|
3,718 |
|
8,181 |
|
Long |
794 |
|
785 |
|
485 |
|
1,579 |
|
1,331 |
|
NAFTA |
2,590 |
|
2,511 |
|
3,797 |
|
5,101 |
|
9,333 |
|
Flat |
1,599 |
|
1,513 |
|
1,074 |
|
3,112 |
|
2,351 |
|
Long |
1,381 |
|
1,370 |
|
994 |
|
2,751 |
|
2,079 |
|
Brazil |
2,964 |
|
2,868 |
|
2,059 |
|
5,832 |
|
4,410 |
|
Flat |
5,751 |
|
6,613 |
|
4,649 |
|
12,364 |
|
11,672 |
|
Long |
2,404 |
|
2,290 |
|
2,054 |
|
4,694 |
|
4,224 |
|
Europe |
8,293 |
|
9,013 |
|
6,817 |
|
17,306 |
|
16,117 |
|
CIS |
2,097 |
|
2,035 |
|
2,032 |
|
4,132 |
|
3,859 |
|
Africa |
703 |
|
560 |
|
361 |
|
1,263 |
|
1,147 |
|
ACIS |
2,801 |
|
2,595 |
|
2,395 |
|
5,396 |
|
5,009 |
|
Note: “Others and eliminations” are not presented in the
table
Appendix 2a: Capital
expenditures(1,2)
(USDm) |
2Q 21 |
1Q 21 |
2Q 20 |
1H 21 |
1H 20 |
NAFTA |
73 |
|
74 |
|
120 |
|
147 |
|
349 |
|
Brazil |
91 |
|
48 |
|
30 |
|
139 |
|
101 |
|
Europe |
235 |
|
343 |
|
168 |
|
578 |
|
492 |
|
ACIS |
120 |
|
94 |
|
66 |
|
214 |
|
240 |
|
Mining |
43 |
|
54 |
|
12 |
|
97 |
|
52 |
|
Total |
569 |
|
619 |
|
401 |
|
1,188 |
|
1,251 |
|
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.
Ongoing 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) |
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 |
Phase 2 premium product expansion project |
Increase production capacity to 15Mt/year |
4Q 2023 (e) |
Brazil |
Juiz de Fora |
Melt shop expansion |
Increase in melt shop capacity by 0.2Mt/year |
On hold (f) |
Brazil |
Monlevade |
Sinter plant, blast furnace and melt shop |
Increase in liquid steel capacity by 1.2Mt/year; |
On hold (f) |
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 is expected to be completed at the end
of 2021.
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
expected to be completed in 1H 2022.
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.
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. The project is expected to be completed
in 4Q 2023.
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 15 million tonnes 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. Final detailed engineering is in progress, whilst site
preparation and tenders for key remaining equipment are underway.
The plan is now to commence project construction post the monsoon
season late 2021. Subject to a timely restart, first concentrate is
expected in 4Q 2023. The capex required to conclude the project is
expected to total approximately $0.8 billion as the project is
effectively a brownfield opportunity given that more than 85% of
the procurement and 60% of civil construction had already been
completed.
f) Although the Monlevade wire rod expansion project and Juiz de
Fora rebar expansion were completed in 2015, both the melt shop
expansion (in Juiz de Fora) and the sinter plant, blast furnace and
meltshop (in Monlevade) projects are currently on hold, but are
being presently re-evaluated.
Appendix 3: Debt repayment schedule as of June 30,
2021
(USD billion) |
2021 |
2022 |
2023 |
2024 |
2025 |
>2025 |
Total |
Bonds |
— |
|
0.6 |
1.3 |
0.9 |
1.1 |
2.0 |
5.9 |
Commercial paper |
0.7 |
— |
|
— |
|
— |
|
— |
|
— |
|
0.7 |
Other loans |
1.1 |
0.4 |
0.2 |
0.2 |
0.1 |
0.6 |
2.6 |
Total gross debt |
1.8 |
1.0 |
1.5 |
1.1 |
1.2 |
2.6 |
9.2 |
Appendix 4: Reconciliation of gross debt to net debt as
of June 30, 2021
(USD million) |
Jun 30, 2021 |
Mar 31, 2021 |
Dec 31, 2020 |
Gross debt (excluding that held as part of the liabilities
held for sale) |
9,228 |
|
11,365 |
|
12,322 |
|
Gross debt held as part of the liabilities held for sale |
— |
|
23 |
|
24 |
|
Gross debt |
9,228 |
|
11,388 |
|
12,346 |
|
Less: Cash and cash equivalents and restricted funds |
(4,184) |
|
(5,474) |
|
(5,963) |
|
Less: Cash and cash equivalents and restricted funds held as part
of the assets held for sale |
— |
|
(10) |
|
(3) |
|
Net debt (including that held as part of assets and the
liabilities held for sale) |
5,044 |
|
5,904 |
|
6,380 |
|
|
|
|
|
Net debt / LTM EBITDA |
0.5 |
|
0.9 |
|
1.5 |
|
Appendix 5: Adjusted net income / (loss)
(USD million) |
2Q 21 |
1Q 21 |
2Q 20 |
1H 21 |
1H 20 |
Net income / (loss) |
4,005 |
|
2,285 |
|
(559) |
|
6,290 |
|
(1,679) |
|
Impairment items5 |
— |
|
— |
|
— |
|
— |
|
(92) |
|
Exceptional items6 |
— |
|
— |
|
(221) |
|
— |
|
(678) |
|
Adjusted net income / (loss) |
4,005 |
|
2,285 |
|
(338) |
|
6,290 |
|
(909) |
|
Appendix 6: Terms and definitionsUnless
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.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 periods of
2020, as they were included in the ArcelorMittal USA assets sold to
Cleveland-Cliffs group in Dec 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.Total
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.YoY: refers to year-on-year.
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. This press release also includes
certain non-GAAP financial/alternative performance measures.
ArcelorMittal presents EBITDA, and EBITDA/tonne, which are non-GAAP
financial/alternative performance measures and calculated as shown
in the Condensed Consolidated Statement of Operations, as
additional measures to enhance the understanding of operating
performance. ArcelorMittal believes such indicators are relevant to
describe trends relating to cash generating activity and provides
management and investors with additional information for comparison
of the Company’s operating results to the operating results of
other companies. Segment information presented in this press
release are prior to inter-segment eliminations and certain
adjustments made to operating result of the segments to reflect
corporate costs, income from non-steel operations (e.g., logistics
and shipping services) and the elimination of stock margins between
the segments. ArcelorMittal also presents net debt and change in
working capital as additional measures to enhance the understanding
of its financial position, changes to its capital structure and its
credit assessment. 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 have 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 Group. 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.
- LTIF figures presented for 2Q 2021 of 0.89x excludes
ArcelorMittal Italia (deconsolidated as from 2Q 2021 onwards) and
compares with 0.78x in 1Q 2021.
- 2Q 2021 steel shipments of 16.1Mt as compared to
15.6Mt in 1Q 2021 (which excludes 0.9Mt of steel shipments for
ArcelorMittal Italia).
- Impairment charges for 1H 2021 were nil. Impairment
charges for 1H 2020 were $92 million and related to the permanent
closure of the coke plant in Florange (France), at the end of April
2020.
- Exceptional items in 2Q 2020 of $221 million
consisted of inventory related charges in NAFTA. Exceptional items
for 1H 2020 were $678 million due to inventory related charges in
NAFTA and Europe.
- 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 8.6Mt per
annum and medium-term plans to expand and grow to 14Mt per annum.
The newly acquired Thakurani mines is now operating at full 5.5Mtpa
capacity since 1Q 2021, while the second Odisha pellet plant is
expected for completion early 3Q 2021, adding 6Mtpa for a total
20Mtpa of pellet capacity. AM/NS 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. Prefeasibility studies are at an advanced
stages and expected to be submitted to Odisha government in 3Q
2021.
- Calvert has plans to construct a new 1.5Mt EAF &
caster to be completed 1H 2023. The JV 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
June 30, 2021, the $5.5 billion revolving credit facility was fully
available.
- Assets and liabilities held for sale as of March 31,
2021, and December 31, 2020, include the assets and liabilities of
ArcelorMittal Italia and heavy plate assets in Europe.
- The Company is offering green steel using a system
of certificates. These will be issued by an independent auditor to
certify tonnes of CO2 savings achieved through the Company’s
investment in decarbonization technologies in Europe. Net-zero
equivalence is determined by assigning CO2 savings certificates
equivalent to CO2 per tonne of steel produced in 2018 as the
reference. The certificates will relate to the tonnes of CO2 saved
in total, as a direct result of the decarbonization projects being
implemented across a number of its European sites.
- 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, which is expected by May 2022 subject to certain
conditions precedent. 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 AM/NS 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 /
NEV market and propel it to be among the top 3 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.
- As of June 30, 2021, other assets include these main
listed investments of Cleveland Cliffs at market value of $1,258
million (which have since been redeemed) and Erdemir (12%) at
market value of $876 million. As of March 31, 2021, other assets
include these main listed investments of Cleveland Cliffs (8%) at
market value of $1,941 million and Erdemir (12%) at market value of
$778 million. 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.
- ArcelorMittal is reviewing the notice of redemption
and the associated calculation of the amount due, and reserves its
rights to require an adjustment based on the applicable notice
provisions and calculation period provided by the terms of the
Preferred Stock.
- 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 comparative figures for
free cash flow under the prior definition of cash flow from
operations less capex were inflows in 2Q 2021 of $1,743 million,
$378 million for 1Q 2021, $(99) million for 2Q 2020, $2,121 million
for 1H 2021 and $(355) million for 1H 2020.
- Segment “Other & eliminations” EBITDA expenses
were lower from a loss of $238 million in 1Q 2021 to an income of
$47 million in 2Q 2021 principally due to the reduction of the
stock margin eliminations between steel and mining businesses for
the temporary unrealized profits on iron ore quantities existing in
the steel subsidiaries. Despite the rise in iron ore prices per ton
during the latest quarter, the stock margin eliminations have
significantly reduced primarily due to lower iron ore quantities
existing in the steel subsidiaries following the production impacts
at AMMC (strike related) and Liberia (rail accident). No guidance
is provided for FY2021 expectations as this will be determined by
the iron ore price during the period.
- Should green hydrogen not be available at affordable
rates by the end of 2025, natural gas would be used to power the
DRI furnace. This would still result in a very significant
reduction in CO2 emissions, of 4 million tonnes, approximately
45%.
- FY 2021 figures include $0.1 billion capex related
to ArcelorMittal Italia which has been deconsolidated from 2Q 2021
onwards).
- The Company expects 35% of the planned $10 billion
investment to be deployed up to 2025, with the remainder in the
second part of the decade. The expectation is that over time low
carbon technologies will become more competitive as the carbon
price increases (and is applied globally) and technologies mature
and become more efficient. This, however, will take considerable
time. In the interim period, policy support will be essential to
moderate the capital spend burden and ensure operational
competitiveness. The required investments will not generate
sufficient returns in the transition period and the technologies
will require further development and refinement. Additionally, the
costs associated with operating these technologies will likely be
higher in the short-to-medium term than higher carbon-emission
technologies. It is critical therefore there are policies in place
to support regional and global competitiveness of assets that are
first movers in the transition to low carbon steel. Policy
instruments like contracts for difference, which were used to
positive effect in the development a competitive renewable energy
sector, have an important role to play. The Company believes that
funding in the region of 50% of costs would be appropriate.
Second quarter and half year 2021
earnings analyst conference callArcelorMittal management
including Aditya Mittal, Chief Executive Officer and Genuino
Christino, Chief Financial Officer will host a conference call for
members of the investment community to present and comment on the
three-month and six-month period ended June 30, 2021 on:
Thursday July 29, 2021 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/1139/index.en.html
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 2020, ArcelorMittal had revenues of $53.3
billion and crude steel production of 71.5 million metric tonnes,
while own iron ore production reached 58.0 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: http://corporate.arcelormittal.com/
EnquiriesArcelorMittal investor
relations: +44 207 543 1128; Retail: +44 207 543 1156; SRI: +44 207
543 1156 and Bonds/credit: +33 1 71 92 10 26.
ArcelorMittal corporate communications (E-mail:
press@arcelormittal.com) +44 207 629 7988. Contact: Paul Weigh +44
203 214 2
- 2Q21 Earnings release FINAL 290721.pdf
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