ArcelorMittal reports first quarter 2022 results
ArcelorMittal (MT) reported its 1Q 2022 results with an operating income of $4.4 billion and net income of $4.1 billion, reflecting resilience despite ongoing challenges from the Ukraine conflict. Free cash flow reached $1.5 billion, and EPS increased by 9% to $4.28. Although steel shipments declined 2.7% to 15.3 million tonnes, sales surged 5% year-over-year to $21.8 billion due to higher average steel prices. The company announced a $2 billion buyback program and ongoing investment in decarbonization projects, including renewable energy initiatives.
- Operating income of $4.4 billion and net income of $4.1 billion in 1Q 2022.
- Basic EPS increased by 9% to $4.28.
- Free cash flow reached $1.5 billion despite a $2 billion investment in working capital.
- Announced a $2 billion share buyback program for 2022.
- Steel shipments decreased by 2.7% to 15.3 million tonnes.
- Anticipated contraction in global apparent steel consumption in 2022, contradicting previous growth forecasts.
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
$4.4b n (vs.$4.6b n4 in 4Q 2021) and EBITDA of$5.1b n in 1Q 2022 (vs.$5.1b n in 4Q 2021) - Enhanced share value: 1Q 2022 basic EPS of
$4.28 /sh increased +9.0% vs. 4Q 2021, representing an ROE19 of36% ; book value per share16 increased to$57 /sh - Financial strength: Gross debt of
$8.7b n at the end of 1Q 2022; net debt declined to$3.2b n (vs.$4.0b n end of 2021) - Higher net income:
$4.1b n in 1Q 2022 (vs.$4.0b n in 4Q 2021) includes share of JV and associates net income of$0.6b n (vs.$0.4b n in 4Q 20215) - Strong FCF generation: The Company delivered
$1.5b n of free cash flow (FCF) in 1Q 2022 ($2.0b n net cash provided by operating activities less capex of$0.5b n and dividends paid to minorities) despite a$2.0b n 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
$2.0b n (of which$1.0b n 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
$0.6b n investment to build 975MW of Solar/Wind capacity
- In April 2022, signed an agreement to acquire an
- 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
$3.65b n to be spent between 2021-2024 (of which$0.25b n 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 cutting18% 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
$5.6 million in total has been donated in this way.
- ArcelorMittal Kryvyi Rih made a
- The Company operated a program of voluntary evacuation to Poland and western Ukraine for family members of ArcelorMittal Kryvyi Rih employees, in response to demand. To date, approximately 1,000 individuals have been safely evacuated.
Analysis of results for 1Q 2022 versus 4Q 2021 and 1Q 2021
Total steel shipments in 1Q 2022 were 15.3Mt, -
Sales in 1Q 2022 were
Depreciation for 1Q 2022 was lower at
There were no impairment items for 1Q 2022 or 1Q 2021. Impairment reversal gain for 4Q 2021 amounted to
Operating income for 1Q 2022 was
Income from associates, joint ventures and other investments11 for 1Q 2022 was
Net interest expense in 1Q 2022 was
Foreign exchange and other net financing losses in 1Q 2022 were
ArcelorMittal recorded an income tax expense of
ArcelorMittal recorded net income for 1Q 2022 of
Analysis of segment operations2, 14
NAFTA
| (USDm) unless otherwise shown | 1Q 22 | 4Q 21 | 3Q 21 | 2Q 21 | 1Q 21 |
| Sales | 3,760 | 3,329 | 3,423 | 3,242 | 2,536 |
| Operating income | 1,054 | 939 | 925 | 675 | 261 |
| Depreciation | (93) | (113) | (70) | (71) | (71) |
| EBITDA | 1,147 | 1,052 | 995 | 746 | 332 |
| Crude steel production (kt) | 2,077 | 2,046 | 1,994 | 2,272 | 2,175 |
| Steel shipments * (kt) | 2,456 | 2,205 | 2,280 | 2,590 | 2,511 |
| Average steel selling price (US$/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 +
Steel shipments in 1Q 2022 increased by +
Sales in 1Q 2022 increased by +
Operating income in 1Q 2022 was
EBITDA in 1Q 2022 of
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$/t) | 1,039 | 1,049 | 1,196 | 1,038 | 837 |
Brazil segment crude steel production declined by -
Steel shipments were stable at 3.0Mt in 1Q 2022 and 4Q 2021, and +
Sales in 1Q 2022 decreased by -
Operating income in 1Q 2022 of
EBITDA in 1Q 2022 decreased by -
Europe
| (USDm) unless otherwise shown | 1Q 22 | 4Q 21 | 3Q 21 | 2Q 21 | 1Q 21 |
| Sales | 13,043 | 12,079 | 11,228 | 10,672 | 9,355 |
| Operating income | 2,081 | 1,886 | 1,925 | 1,262 | 599 |
| Depreciation | (326) | (353) | (284) | (316) | (299) |
| Impairment items | — | 218 | — | — | — |
| EBITDA | 2,407 | 2,021 | 2,209 | 1,578 | 898 |
| Crude steel production (kt) | 8,689 | 8,621 | 9,091 | 9,386 | 9,697 |
| Steel shipments (kt) | 8,334 | 8,325 | 7,551 | 8,293 | 9,013 |
| Average steel selling price (US$/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 -
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 +
Sales in 1Q 2022 increased by +
Impairment charges for 1Q 2022 and 1Q 2021 were nil. Impairment reversal gain for 4Q 2021 amounted to
Operating income in 1Q 2022 was
EBITDA in 1Q 2022 of
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 -
Steel shipments in 1Q 2022 decreased by -
Sales in 1Q 2022 decreased by -
Operating income in 1Q 2022 was significantly lower at
EBITDA of
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 -
Iron ore shipments decreased in 1Q 2022 by -
Operating income in 1Q 2022 increased to
EBITDA in 1Q 2022 increased by +
Joint ventures
ArcelorMittal has investments in various joint ventures and associate entities globally. The Company considers the Calvert (
Calvert7
| (USDm) unless otherwise shown | 1Q 22 | 4Q 21 | 3Q 21 | 2Q 21 | 1Q 21 |
| Production ( | 1,124 | 1,068 | 1,239 | 1,234 | 1,261 |
| Steel shipments ( | 1,171 | 1,052 | 1,203 | 1,155 | 1,137 |
| EBITDA ( | 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
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 -
Steel shipments in 1Q 2022 were +
EBITDA*** during 1Q 2022 of
AMNS India6
| (USDm) unless otherwise shown | 1Q 22 | 4Q 21 | 3Q 21 | 2Q 21 | 1Q 21 |
| Crude steel production ( | 1,730 | 1,847 | 1,891 | 1,831 | 1,824 |
| Steel shipments ( | 1,732 | 1,731 | 1,765 | 1,718 | 1,700 |
| EBITDA ( | 470 | 435 | 551 | 607 | 403 |
Crude steel production in 1Q 2022 decreased by -
Steel shipments in 1Q 2022 were stable as compared to 4Q 2021 and 1Q 2021.
AMNS India EBITDA of
Liquidity and Capital Resources
Net cash provided by operating activities for 1Q 2022 was
Capex of
Net cash used in other investing activities in 1Q 2022 was
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
Gross debt increased to
As of March 31, 2022, and December 31, 2021, Company had liquidity of
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 than75% 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 a20% interest in the plant - with a corresponding offtake agreement - ArcelorMittal would own100% 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 over20% 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 at36.3% as of January 31, 2022) increased to37.53% 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 approximately60% 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
The Company is now announcing an increase in its 2022 buyback program to
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 -
- 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% to0% ); - 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
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 >
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 >
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 ~
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
f) ArcelorMittal Mexico is investing ~
g) Approximately
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
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
j) New ~
k) This
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 shareholders
Gross 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 income
On-going projects: refer to projects for which construction has begun (excluding various projects that are under development), even if such projects have been placed on hold pending improved operating conditions.
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
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$5.5b n 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 a37% 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 of34% 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 a38% 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 to60% , with ArcelorMittal to invest up to€70 million to retain a40% 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 call
ArcelorMittal 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 Statements
This document may contain forward-looking information and statements about ArcelorMittal and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements may be identified by the words “believe”, “expect”, “anticipate”, “target” or similar expressions. Although ArcelorMittal’s management believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of ArcelorMittal’s securities are cautioned that forward-looking information and statements are subject to numerous risks and uncertainties, many of which are difficult to predict and generally beyond the control of ArcelorMittal, that could cause actual results and developments to differ materially and adversely from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified in the filings with the Luxembourg Stock Market Authority for the Financial Markets (Commission de Surveillance du Secteur Financier) and the United States Securities and Exchange Commission (the “SEC”) made or to be made by ArcelorMittal, including ArcelorMittal’s 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
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
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