ArcelorMittal reports fourth quarter 2021 results
ArcelorMittal reported strong financial results for FY 2021, achieving an operating income of $17.0 billion and EBITDA of $19.4 billion, sharply up from $2.1 billion and $4.3 billion in 2020. The company's net income reached $15.0 billion, significantly improving from a loss of $733 million in the prior year. EPS increased to $13.53, while gross debt decreased to $8.4 billion. ArcelorMittal focuses on sustainability, targeting a 25% reduction in CO2e intensity by 2030 and announcing significant investments in decarbonization projects in France and other locations.
- Operating income rose to $17.0 billion in FY 2021 from $2.1 billion in FY 2020.
- EBITDA increased to $19.4 billion from $4.3 billion in the previous year.
- Net income surged to $15.0 billion compared to a loss of $733 million in FY 2020.
- Basic EPS improved to $13.53 from a loss of $0.64 in FY 2020.
- Gross debt decreased to $8.4 billion, down from $12.3 billion in 2020.
- The company returned $6.7 billion to shareholders, reducing shares outstanding by 19%.
- LTIF rate increased to 0.79x in 2021 from 0.61x in 2020, indicating a decline in safety performance.
- Net debt rose slightly to $4.0 billion as of December 31, 2021, from $3.9 billion in the previous quarter.
Luxembourg, February 10, 2022 - ArcelorMittal (referred to as “ArcelorMittal” or the “Company”) (MT (New York, Amsterdam, Paris, Luxembourg), MTS (Madrid)), the world’s leading integrated steel and mining company, today announced results1,2 for the three-months and twelve-months period ended December 31, 2021.
2021 Key highlights:
- Health and safety focus: Protecting the health and wellbeing of employees remains the Company’s overarching priority; LTIF rate of 0.79x in FY 2021 vs. 0.61x in FY 20203
- Robust financial performance: FY 2021 operating income of
$17.0b n4 (vs.$2.1b n4,5 in FY 2020) and EBITDA of$19.4b n (vs.$4.3b n in FY 2020) - Enhanced share value: Basic EPS of
$13.53 /sh. Equity book value per share22 increased to$51 /sh (from$32 /sh in FY 2020) - Financial strength: The Company ended 2021 with gross debt of
$8.4b n (vs.$12.3b n at the end of 2020), net debt of$4.0b n (vs.$6.4b n at the end of 2020) and returned to investment grade; pension/OPEB declined20% to$3.7b n in Dec'21 vs.$4.6b n in Dec'20 - Healthy net income:
$15.0b n6 in FY 2021 includes share of JV and associates net income of$2.2b n (vs.$0.2b n in FY 2020) largely reflecting performance at AMNS India, AMNS Calvert and other investees - Strong FCF generation:
9.2% higher steel shipments YoY on scope adjusted basis21 led to a working capital investment of$6.4b n in FY 2021; despite this the Group generated$6.6b n free cash flow (FCF)17 in FY 2021 ($9.9b n net cash provided by operating activities less capex of$3.0b n less minority dividends of$0.3b n) - Significant returns to shareholders: The Company returned
$6.7b n of capital to shareholders in FY 2021, reducing the fully diluted shares outstanding by19% ; 165m shares cancelled (120m shares in 2021 and 45m shares in Jan 2022)
Priorities & Outlook:
- Global leadership on addressing climate change:
- The Company is progressing its plans to reduce the CO2e intensity of its global production by
25% by 2030 (including a35% reduction in CO2e intensity in Europe) with a net investment of$0.3b n forecast in 2022 - 1st Smart Carbon projects to be commissioned in Ghent (Belgium) by end 2022
- 1st Hydrogen reduction project in Hamburg to start production 2024-2025; Further decarbonization projects announced during the year in Spain, Canada, Belgium and France
- New
€1.7b n investment in Fos-sur-Mer & Dunkirk (France), enabling a reduction of ~40% or 7.8Mtpa CO2 emissions in France by 2030 - XCarbTM Innovation Fund investments12 in five technology partnerships during 2021 totaling
$180m - Sales of XCarb® green steel certificates targeted to increase to 0.6Mt run rate by end 2022
- The Company is progressing its plans to reduce the CO2e intensity of its global production by
- New 3 year
$1.5b n Value plan to deliver commercial and business improvements - Delivering strategic growth in support of higher sustainable returns
- New
$0.3b n pellet plant investment at Kryvyi Rih (Ukraine) to ensure sustainability, environmental compliance and improve productivity; new$0.2b n section mill in Barra Mansa (Brazil) to produce higher value added products and enhance the product mix $3.1b n strategic capex envelope to be spent between 2021-2024 (of which$0.2b n has been spent to date)23 is estimated to add$1.1b n to future EBITDA24- 1st coils from the Mexico HSM produced in December 2021; strategic capex to increase in 2022 as growth projects in Brazil (Monlevade, Vega and Barra Mansa) and Ukraine, as well as Iron Ore mining (Liberia, Las Truchas, Serra Azul) advance
- New
- Building a track record of consistently returning capital to shareholders:
$7.2b n of capital returned to shareholders since September 2020- The Board proposes to increase the annual base dividend to shareholders to
$0.38 /sh (to be paid in June 2022, subject to the approval of shareholders at the AGM in May 2022) - The Company has announced a new
$1.0b n capital return for 1H'22. Further authorization to repurchase shares will be sought from shareholders at the 2022 AGM
- Market outlook is favorable
- World ex-China apparent steel consumption ("ASC") in 2022 vs. 2021 is expected to grow 2.5
-3% ; the Company expects its steel shipments in 2022 to grow by3% vs. 202121 - The Company expects strong EBITDA and FCF generation in 2022
- World ex-China apparent steel consumption ("ASC") in 2022 vs. 2021 is expected to grow 2.5
Financial highlights (on the basis of IFRS1,2):
| (USDm) unless otherwise shown | 4Q 21 | 3Q 21 | 4Q 20 | 12M 21 | 12M 20 |
| Sales | 20,806 | 20,229 | 14,184 | 76,571 | 53,270 |
| Operating income | 4,558 | 5,345 | 1,998 | 16,976 | 2,110 |
| Net income / (loss) attributable to equity holders of the parent | 4,045 | 4,621 | 1,207 | 14,956 | (733) |
| Basic earnings / (loss) per common share (US$) | 3.93 | 4.17 | 1.01 | 13.53 | (0.64) |
| Operating income/ tonne (US$/t) | 289 | 366 | 116 | 270 | 31 |
| EBITDA | 5,052 | 6,058 | 1,726 | 19,404 | 4,301 |
| EBITDA/ tonne (US$/t) | 320 | 414 | 100 | 308 | 62 |
| Crude steel production (Mt) | 16.5 | 17.2 | 18.8 | 69.1 | 71.5 |
| Steel shipments (Mt) | 15.8 | 14.6 | 17.3 | 62.9 | 69.1 |
| Total group iron ore production (Mt) | 13.4 | 13.0 | 15.3 | 50.9 | 58.0 |
| Iron ore production (Mt) (AMMC and Liberia only) | 7.2 | 6.8 | 7.6 | 26.2 | 28.3 |
| Iron ore shipment (Mt) (AMMC and Liberia only) | 7.1 | 6.9 | 7.9 | 26.0 | 28.4 |
| Number of shares outstanding (issued shares less treasury shares) (millions) | 911 | 971 | 1,081 | 911 | 1,081 |
Note: As previously announced, effective 2Q 2021, ArcelorMittal has amended its presentation of reportable segments to report the operations of AMMC and Liberia within the Mining segment. The results of each other mine are accounted for within the steel segments that it primarily supplies; as from 2Q 2021 onwards, ArcelorMittal Italia is deconsolidated and accounted for as a joint venture.
Commenting, Aditya Mittal, ArcelorMittal Chief Executive Officer, said:
“2021 was a strong year in which we accelerated progress on many fronts. The global economic rebound post initial COVID-19 restrictions being lifted supported buoyant demand in all markets delivering very high levels of profitability. This further strengthened our balance sheet and enabled the delivery of consistent returns for shareholders as well as targeted investment in our business. Recent investments, both organic and acquisitive, have long-term strategic value – with the Mexico hot strip mill set to ramp up this year, the construction of the Calvert EAF underway, and the AM/NS India joint venture performing well and poised to capture further opportunity in this fast-growing market.
The one area where we are not satisfied is safety. We want to do better and we have to do better. Across the organization all our efforts are focused on this most important outcome.
Perhaps most critically we intensified our commitments to decarbonize, recognizing that steel can and must make a significant contribution to achieving net zero. We stated an ambition to reduce our CO2e intensity by
We start 2022 ready to build on the progress already achieved for long-term sustainability and success. Industry fundamentals remain positive, supported by re-negotiated automotive contracts. Our balance sheet strength enables us to invest in the most compelling organic growth opportunities and continue our transition towards low emissions steelmaking. We see increasing evidence of stakeholder understanding and support for the transition to zero-carbon steel-making. We look forward to further building on this progress achieved, in 2022.”
Sustainable development and safety performance
Health and safety - Own personnel and contractors lost time injury frequency rate
Protecting the health and wellbeing of employees remains the Company’s overarching priority with ongoing strict adherence to World Health Organization guidelines (in respect of COVID-19), and specific government guidelines have been followed and implemented.
Health and safety performance based on own personnel and contractors lost time injury frequency ("LTIF") rate was 0.74x in the fourth quarter of 2021 ("4Q 2021") as compared to 0.76x for the third quarter of 2021 ("3Q 2021"). Prior period figures have not been recast for the ArcelorMittal USA disposal which took place in December 2020 and exclude ArcelorMittal Italia (which is now accounted for under the equity method) for all periods.
Health and safety performance in the twelve months of 2021 (“12M 2021”) was 0.79x as compared to 0.61x in the twelve months of 2020 (“12M 2020”).
The Company’s efforts to improve its health and safety record aim to strengthen the safety of its workforce with an absolute focus on eliminating fatalities. A change to the Company’s executive remuneration policy has been made to reflect this focus.
Own personnel and contractors - Frequency rate
| Lost time injury frequency rate | 4Q 21 | 3Q 21 | 4Q 20 | 12M 21 | 12M 20 |
| NAFTA | 0.25 | 0.48 | 0.49 | 0.40 | 0.57 |
| Brazil | 0.30 | 0.10 | 0.16 | 0.22 | 0.28 |
| Europe | 1.09 | 1.38 | 1.35 | 1.19 | 1.07 |
| ACIS | 0.92 | 0.80 | 0.64 | 0.94 | 0.64 |
| Mining | — | — | 0.34 | 0.32 | 0.27 |
| Total | 0.74 | 0.76 | 0.65 | 0.79 | 0.61 |
Key sustainable development highlights:
- On November 3, 2021, ArcelorMittal and the government of Quebec announced a CAD
$205 million investment by ArcelorMittal Mining Canada (‘AMMC’) in its Port-Cartier pellet plant, enabling this facility to convert its entire 10 million tonne annual pellet production to direct reduced iron ("DRI") pellets by the end of 2025. The investment, in which the Quebec government will contribute through an electricity rebate of up to CAD$80 million , will enable the Port-Cartier plant to become one of the world’s largest producers of DRI pellets, the raw material feedstock for ironmaking in a DRI furnace and reduce the plant's CO2e by ~20% per annum. The project includes the implementation of a flotation system that will enable a significant reduction of silica in the iron ore pellets, facilitating the production of a very high-quality pellet. - ArcelorMittal announced on December 9, 2021 a US
$30 million investment in carbon recycling company, LanzaTech through its XCarb™ innovation fund, the fourth investment the Company has made through the fund since its launch in March 2021. The investment further expands ArcelorMittal’s relationship with LanzaTech, which commenced in 2015 when the Company first announced plans to utilise LanzaTech’s carbon capture and re-use technology at its plant in Ghent, Belgium. The€180 million Carbalyst® plant – ArcelorMittal’s flagship carbon capture and re-use technology project - is currently under construction, with commissioning expected before the end of 2022. - ArcelorMittal announced on January 25, 2022 a
$5 million investment in H2Pro through its XCarb™ innovation fund, bringing the fund’s total investment commitments to$180 million since its launch. H2Pro is developing a disruptive way of producing hydrogen from water, which offers superior energy efficiency to traditional water electrolysis technologies. - ArcelorMittal was announced as a Supplier Sustainability Award winner by Ford Motor Company in their World Excellence Awards. The awards recognise companies that exceed expectations and achieve the highest levels of excellence in quality, cost, performance and delivery. ArcelorMittal’s commitment to IRMA (Initiative for Responsible Mining Assurance) was particularly acknowledged by Ford in making this award.
- On January 27, 2022, ArcelorMittal published its second Climate Advocacy Alignment Report which maps the policy positions of the 61 associations of which the Company is a member, against the objectives of the Paris agreement and the five policy priorities ArcelorMittal outlined in its second Climate Action Report.
Analysis of results for the twelve months ended December 31, 2021 versus results for the twelve months ended December 31, 2020
Adjusted for the change in scope (i.e. excluding the shipments of ArcelorMittal USA, sold on December 9, 2020, and ArcelorMittal Italia13, deconsolidated as from April 14, 2021), steel shipments in 12M 2021 were 61.9 million metric tonnes (Mt),
Sales for 12M 2021 increased by
Depreciation of
Impairment gain for 12M 2021 amounted to
Exceptional items for 12M 2021 of
Operating income for 12M 2021 of
Income from associates, joint ventures and other investments14 for 12M 2021 was
Net interest expense in 12M 2021 was lower at
Foreign exchange and other net financing losses were
ArcelorMittal recorded an income tax expense of
ArcelorMittal’s net income for 12M 2021 was
Analysis of results for 4Q 2021 versus 3Q 2021 and 4Q 2020
Total steel shipments in 4Q 2021 were 15.8Mt,
Adjusted for the change in scope (i.e. excluding the shipments of ArcelorMittal USA and ArcelorMittal Italia21), steel shipments in 4Q 2021 increased
Sales in 4Q 2021 were
Depreciation for 4Q 2021 was
Impairment gain for 4Q 2021 amounted to
Exceptional items for 4Q 2021 were nil. Exceptional charges for 3Q 2021 of
Operating income for 4Q 2021 was
Income from associates, joint ventures and other investments for 4Q 2021 was
Net interest expense in 4Q 2021 was lower at
Foreign exchange and other net financing losses in 4Q 2021 were
ArcelorMittal recorded an income tax expense of
ArcelorMittal recorded net income for 4Q 2021 of
Analysis of segment operations2, 18
NAFTA
| (USDm) unless otherwise shown | 4Q 21 | 3Q 21 | 4Q 20 | 12M 21 | 12M 20 |
| Sales | 3,329 | 3,423 | 3,204 | 12,530 | 13,668 |
| Operating income | 939 | 925 | 1,507 | 2,800 | 1,684 |
| Depreciation | (113) | (70) | (102) | (325) | (537) |
| Impairment items | — | — | — | — | 660 |
| Exceptional items | — | — | 1,460 | — | 998 |
| EBITDA | 1,052 | 995 | 149 | 3,125 | 563 |
| Crude steel production (kt) | 2,046 | 1,994 | 4,180 | 8,487 | 17,813 |
| Steel shipments (kt) | 2,205 | 2,280 | 4,134 | 9,586 | 17,902 |
| Average steel selling price (US$/t) | 1,341 | 1,303 | 714 | 1,128 | 702 |
NAFTA segment crude steel production increased by
Steel shipments in 4Q 2021 decreased by
Sales in 4Q 2021 decreased by
Operating income in 4Q 2021 was
EBITDA in 4Q 2021 of
Brazil
| (USDm) unless otherwise shown | 4Q 21 | 3Q 21 | 4Q 20 | 12M 21 | 12M 20 |
| Sales | 3,452 | 3,606 | 1,905 | 12,856 | 6,336 |
| Operating income | 892 | 1,164 | 296 | 3,798 | 777 |
| Depreciation | (60) | (59) | (51) | (228) | (228) |
| Exceptional items | — | (123) | — | (123) | — |
| EBITDA | 952 | 1,346 | 347 | 4,149 | 1,005 |
| Crude steel production (kt) | 3,117 | 3,112 | 2,868 | 12,413 | 9,539 |
| Steel shipments (kt) | 3,034 | 2,829 | 2,575 | 11,695 | 9,410 |
| Average steel selling price (US$/t) | 1,049 | 1,196 | 702 | 1,030 | 634 |
Brazil segment crude steel production was stable at 3.1Mt in 4Q 2021 and in 3Q 2021, and higher as compared to 2.9Mt in 4Q 2020.
Steel shipments in 4Q 2021 increased by
Sales in 4Q 2021 decreased by
Operating income in 4Q 2021 of
EBITDA in 4Q 2021 decreased by
Europe
| (USDm) unless otherwise shown | 4Q 21 | 3Q 21 | 4Q 20 | 12M 21 | 12M 20 |
| Sales | 12,079 | 11,228 | 7,604 | 43,334 | 28,071 |
| Operating income /(loss) | 1,886 | 1,925 | (444) | 5,672 | (1,439) |
| Depreciation | (353) | (284) | (356) | (1,252) | (1,418) |
| Impairment items | 218 | — | (331) | 218 | (527) |
| Exceptional items | — | — | (146) | — | (337) |
| EBITDA | 2,021 | 2,209 | 389 | 6,706 | 843 |
| Crude steel production (kt) | 8,621 | 9,091 | 9,110 | 36,795 | 34,004 |
| Steel shipments (kt) | 8,325 | 7,551 | 8,569 | 33,182 | 32,873 |
| Average steel selling price (US$/t) | 1,110 | 1,098 | 695 | 986 | 655 |
Europe segment crude steel production was
Steel shipments in 4Q 2021 increased by
Sales in 4Q 2021 increased
Impairment gain for 4Q 2021 amounted to
Exceptional items for 4Q 2021 and 3Q 2021 were nil. Exceptional items for 4Q 2020 were
Operating income in 4Q 2021 was
EBITDA in 4Q 2021 of
ACIS
| (USDm) unless otherwise shown | 4Q 21 | 3Q 21 | 4Q 20 | 12M 21 | 12M 20 |
| Sales | 2,539 | 2,419 | 1,553 | 9,854 | 5,737 |
| Operating income | 439 | 808 | 233 | 2,705 | 209 |
| Depreciation | (118) | (112) | (133) | (450) | (492) |
| Exceptional items | — | — | — | — | (21) |
| EBITDA | 557 | 920 | 366 | 3,155 | 722 |
| Crude steel production (kt) | 2,694 | 3,014 | 2,673 | 11,366 | 10,171 |
| Steel shipments (kt) | 2,597 | 2,367 | 2,373 | 10,360 | 9,881 |
| Average steel selling price (US$/t) | 810 | 864 | 511 | 780 | 464 |
ACIS segment crude steel production in 4Q 2021 was
Steel shipments in 4Q 2021 increased by
Sales in 4Q 2021 increased by
Operating income in 4Q 2021 was
EBITDA of
Mining
| (USDm) unless otherwise shown | 4Q 21 | 3Q 21 | 4Q 20 | 12M 21 | 12M 20 |
| Sales | 824 | 1,153 | 937 | 4,045 | 2,785 |
| Operating income | 343 | 741 | 502 | 2,371 | 1,247 |
| Depreciation | (57) | (56) | (60) | (228) | (243) |
| EBITDA | 400 | 797 | 562 | 2,599 | 1,490 |
| Iron ore production (Mt) | 7.2 | 6.8 | 7.6 | 26.2 | 28.3 |
| Iron ore shipment (Mt) | 7.1 | 6.9 | 7.9 | 26.0 | 28.4 |
Given the sale of ArcelorMittal USA in December 2020, the Company is no longer presenting coal production and shipments in its earnings releases.
Iron ore production (AMMC and Liberia only) increased in 4Q 2021 by
Iron ore shipments increased in 4Q 2021 by
Operating income in 4Q 2021 decreased to
EBITDA in 4Q 2021 decreased by
Joint ventures
ArcelorMittal has investments in various joint ventures and associate entities globally. The Company considers the Calvert (
Calvert8
| (USDm) unless otherwise shown | 4Q 21 | 3Q 21 | 4Q 20 | 12M 21 | 12M 20 |
| Production ( | 1,068 | 1,239 | 1,057 | 4,802 | 4,038 |
| Steel shipments ( | 1,052 | 1,203 | 1,005 | 4,547 | 3,912 |
| EBITDA ( | 270 | 397 | 62 | 1,091 | 197 |
* Production: all production of the hot strip mill including processing of slabs on a hire work basis for ArcelorMittal group entities and third parties, including stainless steel slabs.
** Shipments: including shipments of finished products processed on a hire work basis for ArcelorMittal group entities and third parties, including stainless steel products.
*** EBITDA of Calvert presented here on a
Calvert’s hot strip mill ("HSM") production during 4Q 2021 totaled 1.1Mt as compared to 1.2Mt in 3Q 2021. 4Q 2021 HSM production was
Steel shipments in 4Q 2021 were
EBITDA*** during 4Q 2021 of
AMNS India7
| (USDm) unless otherwise shown | 4Q 21 | 3Q 21 | 4Q 20 | 12M 21 | 12M 20 |
| Crude steel production ( | 1,847 | 1,891 | 1,888 | 7,393 | 6,616 |
| Steel shipments ( | 1,731 | 1,765 | 1,779 | 6,914 | 6,261 |
| EBITDA ( | 435 | 551 | 274 | 1,996 | 697 |
Crude steel production in 4Q 2021 decreased by
AMNS India EBITDA of
Liquidity and Capital Resources
Net cash provided by operating activities for 4Q 2021 was
Capex of
Net cash used in other investing activities in 4Q 2021 was
Net cash used in financing activities in 4Q 2021 was
During 4Q 2021, ArcelorMittal repurchased 59.2 million shares for a total value of
During 4Q 2021 and 4Q 2020, the Company paid dividends of
Outflows from lease payments and other financing activities were
Gross debt increased by
As of December 31, 2021 and September 30, 2021, the Company had liquidity of
Key recent developments
- On February 4, 2022, ArcelorMittal announced plans for the acceleration of its decarbonization plan with a
€1.7 billion investment in its Fos-sur-Mer and Dunkirk sites in France (while maintaining equivalent production capacities), supported by the Government. This investment will enable a transformation of steelmaking in France and a total reduction of close to40% or 7.8Mtpa in ArcelorMittal’s CO2 emissions in France by 2030. Specifically, in Fos-sur-Mer, ArcelorMittal will build an Electric Arc Furnace (EAF). This new unit will complement the ladle furnace announced last March and supported by France’s recovery plan, ‘France Relance’. In Dunkirk, ArcelorMittal will build a 2.5Mt Direct Reduction of Iron (DRI) unit to transform iron ore using hydrogen instead of coal. This DRI will be coupled with an innovative technology electric furnace and complemented by an additional Electric Arc Furnace (EAF). Other investments are already under way to continue to increase the proportion of scrap steel used. The new industrial facilities will be operational starting in 2027 and will gradually replace 3 out of 5 of ArcelorMittal’s blast furnaces in France by 2030 (2 out of 3 in Dunkirk, 1 out of 2 in Fos-sur-Mer). - On January 14, 2022, ArcelorMittal announced that 45 million treasury shares had been cancelled to keep the number of treasury shares within appropriate levels. As a result of this cancellation, ArcelorMittal now has 937,809,772 shares in issue (compared to 982,809,772 before the cancellation). Details on share buyback programs can be found at: https://corporate.arcelormittal.com/investors/equity-investors/share-buyback-program.
- On December 29, 2021, ArcelorMittal announced that it had completed the fifth share buyback program announced on November 17, 2021 under the authorization given by the annual general meeting of shareholders of June 8, 2021 (the "2021 AGM Authorization"). By market close on December 28, 2021, ArcelorMittal had repurchased 34,080,049 shares for a total value of
€885,729,034.96 (equivalent to$999,999,819.63) at an approximate average price per share of€25.99 . This brought the total advance as part of its prospective 2022 capital return to shareholders (to be funded from 2021 surplus cash flow under the capital return policy announced February 2021) to$3.2 billion including$2 billion of share buy backs completed and$1.2 billion payments related to the MCN as described below. - On December 22, 2021, ArcelorMittal announced that it had determined the final repurchase price for its previously announced repurchases of
$395 million of its5.50% Mandatorily Convertible Subordinated Notes due 2023 (the "Notes"). The aggregate repurchase price that ArcelorMittal paid for those Notes was$1,196 million . The transactions closed on December 23, 2021. The repurchase of this aggregate principal amount of Notes is equivalent to repurchasing approximately 36.6 million shares of ArcelorMittal common stock that would otherwise be issuable at maturity under the Notes (at the minimum conversion ratio). Pursuant to the purchase agreements the repurchased Notes have been cancelled and therefore will not convert into common shares of the Company. Following completion of the repurchases, approximately$608 million aggregate principal amount of the Notes remain outstanding. - On December 9, 2021, the Company announced it had made a
$30 million investment in carbon recycling company, LanzaTech through its XCarb™ innovation fund, the fourth investment the Company has made through the fund since its launch in March 2021. The investment further expands ArcelorMittal’s relationship with LanzaTech, which commenced in 2015 when the Company first announced plans to utilise LanzaTech’s carbon capture and re-use technology at its plant in Ghent, Belgium. - On November 17, 2021, ArcelorMittal announced that it had completed the fourth share buyback program announced on July 29, 2021 under the 2021 AGM Authorization. By market close on November 16, 2021, ArcelorMittal had repurchased 67,404,066 shares for a total value of
€1,881,270,528.80 (equivalent to US$2,199,999,614.74) at an approximate average price per share of€27.91 . On the same day, the Company commenced a new share buyback program in the amount of$1 billion under the 2021 AGM Authorization.
Cost improvement
In 2021, the Company achieved
The Company is now announcing a new 3-year
Capital return
In line with the Company's capital return policy, the Board recommends an increase of the base annual dividend to
Given the favorable outlook for free cashflow in 2022, the Company has initiated a new
The remaining surplus cash has accrued to the balance sheet in 2021. This headroom to our balance sheet targets provides strategic optionality to consider M&A in support of our strategic targets or further additional returns to shareholders in the future.
Financial calendar for 2022
- General meeting of shareholders: May 4, 2022: ArcelorMittal Annual General Meeting ("AGM")
- Earnings results announcements: May 5, 2022: Earnings release 1Q 2022; July 28, 2022: Earnings release 2Q and half year 2022; November 10, 2022: Earnings release 3Q and nine-months 2022
Outlook
Based on the current economic outlook, ArcelorMittal expects global apparent steel consumption (“ASC”) in 2022 to grow between +
Economic activity improved in 2021 as lockdown measures eased and the global steel industry benefiting from a favorable supply demand balance, supporting increasing utilization and improve demand. Although there is some moderation of the tight market conditions (and subject to pandemic-related macroeconomic uncertainties), the Company expects overall ASC to grow in 2022 versus 2021 with regional differences highlighted below:
- In the US, ASC is expected to grow within a range of +
1.0% to +3.0% in 2022 (versus an estimated +20% growth in 2021). Automotive is expected to grow strongly as semi-conductor shortages ease and manufacturing sectors are supported by strong order backlogs and low inventory of finished goods. Infrastructure expected to grow due to beginnings of support from the$1.2 trillion infrastructure plan. - In Europe, ASC is expected to grow within a range of +
0% to +2% in 2022 (versus an estimated +14% growth in 2021), automotive expected to grow strongly, with moderate growth in infrastructure and construction to support underlying demand. - In Brazil, ASC is expected to decline in 2022 in the range of -8 to -
10% (versus a healthy +23.0% estimated growth in 2021). While ASC is expected to decline due to destocking, real demand is expected to increase moderately in 2022 with a recovery in automotive output offset by weakness in other steel-consuming sectors. - In the CIS, ASC in 2022 is expected to grow within a range of +
0% to +2% (versus a +3.0% estimated growth in 2021). - In India, ASC in 2022 is expected to grow within a range of +
6% to +8% (versus +17.0% estimated growth in 2021). - As a result, overall World ex-China ASC in 2022 is expected to grow within the range of +2.5 to +
3.0% (versus +11% in 2021) supported by mild growth in our core developed markets and stronger growth in India offset by weakness in Brazil. - In China, overall demand is expected to continue to decline in 2022 to -
2% to +0% (versus an estimated decline of -2% in 2021) weak real estate is partially offset by a mild pick-up in infrastructure.
Given the mild growth anticipated in ex-China ASC in 2022 vs. 2021 (+2.5 to +
In addition, capex is expected to increase from
Based on current market conditions (including support from automotive contract resets that have already occurred) the Company expects strong cash flow generation in 2022 and has announced a proposed increase in the base annual dividend to
ArcelorMittal Condensed Consolidated Statement of Financial Position1
| In millions of U.S. dollars | Dec 31, 2021 | Sept 30, 2021 | Dec 31, 2020 |
| ASSETS | |||
| Cash and cash equivalents and restricted funds | 4,371 | 4,381 | 5,963 |
| Trade accounts receivable and other | 5,143 | 5,572 | 3,072 |
| Inventories | 19,858 | 18,806 | 12,328 |
| Prepaid expenses and other current assets | 5,567 | 4,421 | 2,281 |
| Asset held for sale11 | — | — | 4,329 |
| Total Current Assets | 34,939 | 33,180 | 27,973 |
| Goodwill and intangible assets | 4,425 | 4,309 | 4,312 |
| Property, plant and equipment | 30,075 | 29,599 | 30,622 |
| Investments in associates and joint ventures | 10,319 | 10,134 | 6,817 |
| Deferred tax assets | 8,147 | 7,787 | 7,866 |
| Other assets16 | 2,607 | 3,082 | 4,462 |
| Total Assets | 90,512 | 88,091 | 82,052 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||
| Short-term debt and current portion of long-term debt | 1,913 | 1,796 | 2,507 |
| Trade accounts payable and other | 15,093 | 14,108 | 11,525 |
| Accrued expenses and other current liabilities | 7,161 | 7,527 | 5,596 |
| Liabilities held for sale11 | — | — | 3,039 |
| Total Current Liabilities | 24,167 | 23,431 | 22,667 |
| Long-term debt, net of current portion | 6,488 | 6,453 | 9,815 |
| Deferred tax liabilities | 2,369 | 1,953 | 1,832 |
| Other long-term liabilities | 6,144 | 6,933 | 7,501 |
| Total Liabilities | 39,168 | 38,770 | 41,815 |
| Equity attributable to the equity holders of the parent | 49,106 | 47,116 | 38,280 |
| Non-controlling interests | 2,238 | 2,205 | 1,957 |
| Total Equity | 51,344 | 49,321 | 40,237 |
| Total Liabilities and Shareholders’ Equity | 90,512 | 88,091 | 82,052 |
ArcelorMittal Condensed Consolidated Statement of Operations1
| Three months ended | Twelve months ended | ||||
| In millions of U.S. dollars unless otherwise shown | Dec 31, 2021 | Sept 30, 2021 | Dec 31, 2020 | Dec 31, 2021 | Dec 31, 2020 |
| Sales | 20,806 | 20,229 | 14,184 | 76,571 | 53,270 |
| Depreciation (B) | (712) | (590) | (711) | (2,523) | (2,960) |
| Impairment items (B) | 218 | — | (331) | 218 | 133 |
| Exceptional items (B) | — | (123) | 1,314 | (123) | 636 |
| Operating income (A) | 4,558 | 5,345 | 1,998 | 16,976 | 2,110 |
| Operating margin % | 21.9 % | 26.4 % | 14.1 % | 22.2 % | 4.0 % |
| Income from associates, joint ventures and other investments | 383 | 778 | 7 | 2,204 | 234 |
| Net interest expense | (49) | (62) | (88) | (278) | (421) |
| Foreign exchange and other net financing loss | (111) | (339) | (270) | (877) | (835) |
| Income before taxes and non-controlling interests | 4,781 | 5,722 | 1,647 | 18,025 | 1,088 |
| Current tax expense | (678) | (938) | (373) | (2,953) | (839) |
| Deferred tax benefit / (expense) | 46 | 56 | 15 | 493 | (827) |
| Income tax expense | (632) | (882) | (358) | (2,460) | (1,666) |
| Income / (loss) including non-controlling interests | 4,149 | 4,840 | 1,289 | 15,565 | (578) |
| Non-controlling interests income | (104) | (219) | (82) | (609) | (155) |
| Net income / (loss) attributable to equity holders of the parent | 4,045 | 4,621 | 1,207 | 14,956 | (733) |
| Basic earnings / (loss) per common share ($) | 3.93 | 4.17 | 1.01 | 13.53 | (0.64) |
| Diluted earnings / (loss) per common share ($) | 3.92 | 4.16 | 1.00 | 13.49 | (0.64) |
| Weighted average common shares outstanding (in millions) | 1,030 | 1,109 | 1,199 | 1,105 | 1,140 |
| Diluted weighted average common shares outstanding (in millions) | 1,033 | 1,112 | 1,204 | 1,108 | 1,140 |
| OTHER INFORMATION | |||||
| EBITDA (C = A-B) | 5,052 | 6,058 | 1,726 | 19,404 | 4,301 |
| EBITDA Margin % | 24.3 % | 29.9 % | 12.2 % | 25.3 % | 8.1 % |
| Total group iron ore production (Mt) | 13.4 | 13.0 | 15.3 | 50.9 | 58.0 |
| Crude steel production (Mt) | 16.5 | 17.2 | 18.8 | 69.1 | 71.5 |
| Steel shipments (Mt) | 15.8 | 14.6 | 17.3 | 62.9 | 69.1 |
ArcelorMittal Condensed Consolidated Statement of Cash flows1
| Three months ended | Twelve months ended | ||||
| In millions of U.S. dollars | Dec 31, 2021 | Sept 30, 2021 | Dec 31, 2020 | Dec 31, 2021 | Dec 31, 2020 |
| Operating activities: | |||||
| Income /(loss) attributable to equity holders of the parent | 4,045 | 4,621 | 1,207 | 14,956 | (733) |
| Adjustments to reconcile net income/ (loss) to net cash provided by operations: | |||||
| Non-controlling interests income | 104 | 219 | 82 | 609 | 155 |
| Depreciation and impairment items | 494 | 590 | 1,042 | 2,305 | 2,827 |
| Exceptional items | — | 123 | (1,314) | 123 | (636) |
| Income from associates, joint ventures and other investments | (383) | (778) | (7) | (2,204) | (234) |
| Deferred tax (benefit) / expense | (46) | (56) | (15) | (493) | 827 |
| Change in working capital | 22 | (2,896) | 925 | (6,409) | 1,496 |
| Other operating activities (net) | (82) | 619 | (504) | 1,018 | 380 |
| Net cash provided by operating activities (A) | 4,154 | 2,442 | 1,416 | 9,905 | 4,082 |
| Investing activities: | |||||
| Purchase of property, plant and equipment and intangibles (B) | (1,145) | (675) | (668) | (3,008) | (2,439) |
| Other investing activities (net) | (90) | 1,184 | 262 | 2,668 | 428 |
| Net cash (used in) / provided by investing activities | (1,235) | 509 | (406) | (340) | (2,011) |
| Financing activities: | |||||
| Net proceeds / (payments) relating to payable to banks and long-term debt | 100 | (806) | (1,506) | (3,562) | (2,395) |
| Dividends paid to ArcelorMittal shareholders | — | (28) | — | (312) | — |
| Dividends paid to minorities (C) | (21) | (157) | (16) | (260) | (181) |
| Share buyback | (1,820) | (1,703) | (487) | (5,170) | (500) |
| Common share offering | — | — | — | — | 740 |
| (Payments) / proceeds from Mandatorily Convertible Notes | (1,196) | — | — | (1,196) | 1,237 |
| Lease payments and other financing activities (net) | (53) | (46) | (218) | (398) | (399) |
| Net cash used in financing activities | (2,990) | (2,740) | (2,227) | (10,898) | (1,498) |
| Net (decrease) / increase in cash and cash equivalents | (71) | 211 | (1,217) | (1,333) | 573 |
| Cash and cash equivalents transferred from / (to) assets held for sale | — | — | 67 | 3 | (3) |
| Effect of exchange rate changes on cash | 13 | (9) | 234 | (55) | 163 |
| Change in cash and cash equivalents | (58) | 202 | (916) | (1,385) | 733 |
| Free cash flow (D=A+B+C)17 | 2,988 | 1,610 | 732 | 6,637 | 1,462 |
Appendix 1: Product shipments by region(1)
| (000'kt) | 4Q 21 | 3Q 21 | 4Q 20 | 12M 21 | 12M 20 |
| Flat | 1,548 | 1,613 | 3,462 | 6,879 | 15,422 |
| Long | 739 | 770 | 807 | 3,088 | 2,884 |
| NAFTA | 2,205 | 2,280 | 4,134 | 9,586 | 17,902 |
| Flat | 1,790 | 1,523 | 1,324 | 6,425 | 4,722 |
| Long | 1,256 | 1,325 | 1,268 | 5,332 | 4,740 |
| Brazil | 3,034 | 2,829 | 2,575 | 11,695 | 9,410 |
| Flat | 5,788 | 5,333 | 6,210 | 23,485 | 23,907 |
| Long | 2,421 | 2,121 | 2,246 | 9,236 | 8,550 |
| Europe | 8,325 | 7,551 | 8,569 | 33,182 | 32,873 |
| CIS | 2,067 | 1,684 | 1,912 | 7,883 | 7,685 |
| Africa | 531 | 679 | 458 | 2,473 | 2,190 |
| ACIS | 2,597 | 2,367 | 2,373 | 10,360 | 9,881 |
Note: “Others and eliminations” are not presented in the table
Appendix 2a: Capital expenditures(1,2)
| (USDm) | 4Q 21 | 3Q 21 | 4Q 20 | 12M 21 | 12M 20 |
| NAFTA | 104 | 118 | 82 | 369 | 527 |
| Brazil | 171 | 102 | 67 | 412 | 216 |
| Europe | 473 | 231 | 326 | 1,282 | 1,040 |
| ACIS | 266 | 139 | 134 | 619 | 476 |
| Mining | 127 | 78 | 46 | 302 | 140 |
| Total | 1,145 | 675 | 668 | 3,008 | 2,439 |
Note: “Others” are not presented in the table
Appendix 2b: Capital expenditure projects
The following tables summarize the Company’s principal growth and optimization projects involving significant capex.
For projects in which the targeted addition to EBITDA is indicated, such amount is based on numerous assumptions as to selling prices and input costs in particular, and for projects relating to Mining / iron ore mines, conservative long term iron ore prices.
Completed projects
| Segment | Site / unit | Project | Capacity / details | Key date / forecast completion |
| NAFTA | Mexico | New hot strip mill | Production capacity of 2.5Mt/year | 2021 (a) |
Ongoing projects
| Segment | Site / unit | Project | Capacity / details | Key date / forecast completion |
| NAFTA | ArcelorMittal Dofasco (Canada) | Hot strip mill modernization | Replace existing three end of life coilers with two state of the art coilers and new runout tables | 1H 2022 (b) |
| NAFTA | ArcelorMittal Dofasco (Canada) | #5 CGL conversion to AluSi® | Addition of up to 160kt/year Aluminum Silicon (AluSi®) coating capability to #5 Hot-Dip Galvanizing Line for the production of Usibor® steels | 2H 2022 (c) |
| Brazil | ArcelorMittal Vega Do Sul | Expansion project | Increase hot dipped / cold rolled coil capacity and construction of a new 700kt continuous annealing line (CAL) and continuous galvanising line (CGL) combiline | 4Q 2023 (d) |
| Mining | Liberia mine | Phase 2 premium product expansion project | Increase production capacity to 15Mt/year | 4Q 2023 (e) |
| NAFTA | Las Truchas mine (Mexico) | Revamping and capacity increase to 2.3MT | Revamping project with 1Mtpa pellet feed capacity increase (to 2.3 Mt/year) with DRI concentrate grade capability | 2H 2023 (f) |
| Brazil | Serra Azul mine | 4.5Mtpa direct reduction pellet feed plant | Facilities to produce 4.5Mt/year DRI quality pellet feed by exploiting compact itabirite iron ore | 2H 2023 (g) |
| Brazil | Monlevade | Sinter plant, blast furnace and melt shop | Increase in liquid steel capacity by 1.0Mt/year; Sinter feed capacity of 2.3Mt/year | 2H 2024 (h) |
| ACIS | ArcelorMittal Kryvyi Rih (Ukraine) | New Pellet Plant | Facilities to produce 5.0 Mtpa pellets, replacing two existing sinter plants ensuring environmental compliance and improving productivity | 4Q 2023 (i) |
| Brazil | Barra Mansa | New section mill | Increase capacity of HAV bars and sections by 0.4Mt/pa | 1Q 2024 (j) |
a) On September 28, 2017, ArcelorMittal announced a major
b) Investment in ArcelorMittal Dofasco (Canada) to modernize the hot strip mill. The project is to install two new state of the art coilers and runout tables to replace three end of life coilers. The strip cooling system will be upgraded and include innovative power cooling technology to improve product capability. The project is estimated to be completed in 1H 2022. The project is estimated to add >
c) Investment to replace #5 Hot-Dip Galvanizing Line Galvanneal coating capability with 160kt/year Aluminum Silicon (AluSi®) capability for the production of ArcelorMittal’s patented Usibor® Press Hardenable Steel for automotive structural and safety components. With the investment, ArcelorMittal Dofasco will become the only Canadian producer of AluSi® coated Usibor®. This investment complements additional strategic North America developments, including a new EAF and caster at Calvert in the US and a new hot strip mill in Mexico, and will allow to capitalize on increasing Auto Aluminized PHS demand in North America. The project is expected to be completed in 2022, with the first coil planned for 2H 2022. The project is estimated to add >
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. Final detailed engineering is in progress, whilst site preparation and tenders for key construction contracts and remaining equipment are underway. Under this project, first concentrate product is expected in late 2023, ramping up to 15Mtpa thereafter. The capex required to conclude the project, estimated at approximately
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. Basic engineering is being finalized and hiring of civil works and piling companies has started. The project is estimated to be completed in 2H 2024 with a capex requirement of approximately
i) Investment in ArcelorMittal Kryvyi Rih to build a new 5.0Mtpa pellet plant which, together with the ongoing modernization of Sinter Plant 2, will ensure that all sinter operations in Kryvyi Rih are compliant with dust emissions environmental regulations and will enable cost reduction, quality and productivity improvement. In addition, the project will enable a CO2 footprint improvement by 750kt CO2/yr. First pellet is expected to be produced in 4Q 2023 with a capex requirement of approximately
j) New ~
Appendix 3: Debt repayment schedule as of December 31, 2021
| (USD billion) | 2022 | 2023 | 2024 | 2025 | 2026 | >2026 | Total |
| Bonds | 0.6 | 1.3 | 0.9 | 1.0 | 0.4 | 1.6 | 5.8 |
| Commercial paper | 0.5 | — | — | — | — | — | 0.5 |
| Other loans | 0.8 | 0.3 | 0.2 | 0.2 | 0.1 | 0.5 | 2.1 |
| Total gross debt | 1.9 | 1.6 | 1.1 | 1.2 | 0.5 | 2.1 | 8.4 |
Appendix 4: Reconciliation of gross debt to net debt as of December 31, 2021
| (USD million) | Dec 31, 2021 | Sept 30, 2021 | Dec 31, 2020 |
| Gross debt (excluding that held as part of the liabilities held for sale) | 8,401 | 8,249 | 12,322 |
| Gross debt held as part of the liabilities held for sale | — | — | 24 |
| Gross debt | 8,401 | 8,249 | 12,346 |
| Less: Cash and cash equivalents and restricted funds | (4,371) | (4,381) | (5,963) |
| Less: Cash and cash equivalents and restricted funds held as part of the assets held for sale | — | — | (3) |
| Net debt (including that held as part of assets and the liabilities held for sale) | 4,030 | 3,868 | 6,380 |
| Net debt / LTM EBITDA | 0.2 | 0.2 | 1.5 |
Appendix 5: Adjusted net income / (loss) as of December 31, 2021
| (USD million) | 4Q 21 | 3Q 21 | 4Q 20 | 12M 21 | 12M 20 |
| Net income / (loss) | 4,045 | 4,621 | 1,207 | 14,956 | (733) |
| Impairment items | 218 | — | (331) | 218 | 133 |
| Exceptional items | — | (123) | 1,314 | (123) | 636 |
| Derecognition of deferred tax assets on disposal of ArcelorMittal USA | — | — | — | — | (624) |
| Adjusted net income / (loss) | 3,827 | 4,744 | 224 | 14,861 | (878) |
Appendix 6: Terms and definitions
Unless indicated otherwise, or the context otherwise requires, references in this earnings release report to the following terms have the meanings set out next to them below:
Adjusted net income / (loss): refers to reported net income/(loss) less impairment items, exceptional items and derecognition of deferred tax assets on disposal of ArcelorMittal USA.
Apparent steel consumption: calculated as the sum of production plus imports minus exports.
Average steel selling prices: calculated as steel sales divided by steel shipments.
Cash and cash equivalents and restricted funds: represents cash and cash equivalents, restricted cash, restricted funds and short-term investments.
Capex: represents the purchase of property, plant and equipment and intangibles.
Crude steel production: steel in the first solid state after melting, suitable for further processing or for sale.
EPS: refers to basic or diluted earnings/loss per share.
EBITDA: operating results plus depreciation, impairment items and exceptional items.
EBITDA/tonne: calculated as EBITDA divided by total steel shipments.
Exceptional items: income / (charges) relate to transactions that are significant, infrequent or unusual and are not representative of the normal course of business of the period.
Foreign exchange and other net financing (loss): include foreign currency exchange impact, bank fees, interest on pensions, impairment of financial assets, revaluation of derivative instruments and other charges that cannot be directly linked to operating results.
Free cash flow (FCF): refers to net cash provided by operating activities less capex less dividends paid to minority 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 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 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 (for 2020 and 2021 onwards) and Hibbing, Minorca, Princeton mines (for each of the periods of 2020, as they were included in the ArcelorMittal USA assets sold in December 2020). The Brazil segment includes the Flat, Long and Tubular operations of Brazil and its neighboring countries including Argentina, Costa Rica, Venezuela; and also includes Andrade and Serra Azul captive iron ore mines. The Europe segment includes the Flat, Long and Tubular operations of the European business, as well as Downstream Solutions, and also includes Bosnia and Herzegovina capital iron ore mines. The ACIS segment includes the Flat, Long and Tubular operations of Kazakhstan, Ukraine and South Africa; and also includes the captive iron ore mines in Ukraine and iron ore and coal mines in Kazakhstan). Mining segment includes iron ore operations of ArcelorMittal Mines Canada and ArcelorMittal Liberia.
Own iron ore production: includes total of all finished production of fines, concentrate, pellets and lumps and includes share of production.
Price-cost effect: a lack of correlation or a lag in the corollary relationship between raw material and steel prices, which can either have a positive (i.e., increased spread between steel prices and raw material costs) or negative effect (i.e., a squeeze or decreased spread between steel prices and raw material costs).
Iron ore reference prices: refers to iron ore prices for
Shipments: information at segment and group level eliminates intra-segment shipments (which are primarily between Flat/Long plants and Tubular plants) and inter-segment shipments respectively. Shipments of Downstream Solutions are excluded.
Working capital change (working capital investment / release): Movement of change in working capital - trade accounts receivable plus inventories less trade and other accounts payable.
Footnotes
- The financial information in this press release has been prepared consistently with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and as adopted by the European Union. The interim financial information included in this announcement has also been prepared in accordance with IFRS applicable to interim periods, however this announcement does not contain sufficient information to constitute an interim financial report as defined in International Accounting Standard 34, “Interim Financial Reporting”. The numbers in this press release have not been audited. The financial information and certain other information presented in a number of tables in this press release have been rounded to the nearest whole number or the nearest decimal. Therefore, the sum of the numbers in a column may not conform exactly to the total figure given for that column. In addition, certain percentages presented in the tables in this press release reflect calculations based upon the underlying information prior to rounding and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers. Segment information presented in this press release is prior to inter-segment eliminations and certain adjustments made to operating result of the segments to reflect corporate costs, income from non-steel operations (e.g., logistics and shipping services) and the elimination of stock margins between the segments. This press release also includes certain non-GAAP financial/alternative performance measures. ArcelorMittal presents EBITDA, and EBITDA/tonne, Equity book value per share, which are non-GAAP financial/alternative performance measures and calculated as shown in the Condensed Consolidated Statement of Operations, as additional measures to enhance the understanding of operating performance. ArcelorMittal believes such indicators are relevant to describe trends relating to cash generating activity and provide management and investors with additional information for comparison of the Company’s operating results to the operating results of other companies. The Company’s EBITDA objectives for certain capital expenditure projects are based on the same accounting policies as those applied in the Company’s financial statements prepared in accordance with IFRS. ArcelorMittal also presents net debt and change in working capital as additional measures to enhance the understanding of its financial position, changes to its capital structure and its credit assessment. ArcelorMittal also presents adjusted net income / (loss) as it believes it is a useful measure for the underlying business performance excluding impairment items, exceptional items and derecognition of deferred tax assets on disposal of ArcelorMittal USA. ArcelorMittal also presents free cash flow (FCF), which is a non-GAAP financial/alternative performance measure calculated as shown in the Condensed Consolidated Statement of Cash Flows, because it believes it is a useful supplemental measure for evaluating the strength of its cash generating capacity. The Company has revised the definition of free cash flow to include dividends paid to minority shareholders in order to reflect the measure it will use to determine dividends that will be paid under its new dividend policy. The Company also presents the ratio of net debt to EBITDA for the last twelve-month period, which investors may find useful in understanding the Company's ability to service its debt. Such non-GAAP/alternative performance measures may not be comparable to similarly titled measures applied by other companies. Non-GAAP financial/alternative performance measures should be read in conjunction with, and not as an alternative for, ArcelorMittal's financial information prepared in accordance with IFRS.
- New segmentation reporting: Following the Company’s steps to streamline and optimize the business, primary responsibility for captive mining operations has been moved to the Steel segments (which are primary consumers of the mines' output). The Mining segment will retain primary responsibility for the operation of ArcelorMittal Mines Canada ("AMMC") and Liberia and will continue to provide technical support to all mining operations within the Company. As a result, effective 2Q 2021, ArcelorMittal has retrospectively amended its presentation of reportable segments to reflect this organizational change, as required by IFRS. Only the operations of AMMC and Liberia are reported within the Mining segment. The results of each other mine are accounted for within the steel segment that it primarily supplies. Summary of changes: NAFTA: all Mexico mines (for 2020 and 2021 onwards) and Hibbing, Minorca, Princeton mines (each quarter of 2020, as they were included in the ArcelorMittal USA assets sale in December 2020); Brazil: Andrade and Serra Azul mines; Europe: ArcelorMittal Prijedor mine (Bosnia and Herzegovina); ACIS: Kazakhstan and Ukraine mines; and Mining: only AMMC and Liberia iron ore mines.
- LTIF figures presented for FY 2021 of 0.79x excludes ArcelorMittal Italia (deconsolidated as from 2Q 2021 onwards) and ArcelorMittal USA (no longer in scope as sold on December 9, 2020) and compares with 0.61x in FY 2020.
- Impairment gain for 12M 2021 amounted to
$218 million following improved cash flow projections in the context of decarbonization plans in Sestao (Spain) (partially reversing the impairment recognized in 2015). Net impairment gain for 12M 2020 amounted to$133 million included the partial reversal of impairment charges (recorded in 2019) following the sale of ArcelorMittal USA ($660 million ), offset in part by impairment charges of$331 million related to revised future cashflows of plate assets in Europe, charges of$104 million following the permanent closure of a blast furnace and steel plant in Krakow (Poland) and charges related to the permanent closure of the coke plant in Florange (France) of$92 million . - Exceptional items for 12M 2020 were net gains of
$636 million related to the gain on disposal of ArcelorMittal USA ($1.5 billion ) partially offset by site restoration and termination charges following the permanent closure of a blast furnace and steel plant in Krakow (Poland) totaling$146 million and inventory related charges in NAFTA and Europe ($0.7 billion ). - See Appendix 5 for reconciliation of adjusted net income /(loss).
- AMNS India has plans to debottleneck operations (steel shop and rolling parts) and achieve capacity of 8.8Mt per annum and medium-term plans to expand and grow to 14Mt per annum and then to 18Mt per annum. The Thakurani mines is now operating at full 5.5Mtpa capacity since 1Q 2021, while the second Odisha pellet plant has been commission and started in September 2021, adding 6Mtpa for a total 20Mtpa of pellet capacity. In addition, in September 2021, AMNS India commenced operations at Ghoraburhani - Sagasahi iron ore mine in Odisha. The mine is set to produce 2Mtpa of high-quality iron ore in the current year and gradually ramp up production to a rated capacity of 7.2Mtpa and contribute significantly to meeting AMNS India’s long-term raw material requirements. AMNS India signed a Memorandum of Understanding ("MoU") with the Government of Odisha to set-up an integrated steel plant with a 12Mtpa capacity in Kendrapara district of state Odisha. Pre-feasibility study report was submitted to the state government in 3Q 2021, and AMNS India is currently engaging with them for further studies and clearances.
- AMNS Calvert ("Calvert") has plans to construct a new 1.5Mt EAF and caster to be completed 1H 2023. The joint venture is to invest
$775 million . - ArcelorMittal Mines Canada, otherwise known as ArcelorMittal Mines and Infrastructure Canada.
- On December 19, 2018, ArcelorMittal signed a
$5,500,000,000 Revolving Credit Facility, with a five-year maturity plus two one-year extension options. During the fourth quarter of 2019, ArcelorMittal executed the option to extend the facility to December 19, 2024. The extension was completed for$5.4 billion of the available amount, with the remaining$0.1 billion remaining with a maturity of December 19, 2023. In December 2020, ArcelorMittal executed the second option to extend the facility, and the new maturity is now extended to December 19, 2025. As of December 31, 2021, the$5.5 billion revolving credit facility was fully available. - Assets and liabilities held for sale as of December 31, 2020 included the assets and liabilities of ArcelorMittal Italia and plate assets in Europe.
- XCarb™ is designed to bring together all of ArcelorMittal’s reduced, low and zero-carbon products and steelmaking activities, as well as wider initiatives and green innovation projects, into a single effort focused on achieving demonstrable progress towards carbon neutral steel. Alongside the new XCarb™ brand, we have launched three XCarb™ initiatives: the XCarb™ innovation fund, XCarb™ green steel certificates and XCarb™ recycled and renewably produced for products made via the Electric Arc Furnace route using scrap. The Company is offering green steel using a system of certificates (XCarb® green certificates). These will be issued by an independent auditor to certify tonnes of CO2 savings achieved through the Company’s investment in decarbonization technologies in Europe. Net-zero equivalence is determined by assigning CO2 savings certificates equivalent to CO2 per tonne of steel produced in 2018 as the reference. The certificates will relate to the tonnes of CO2 saved in total, as a direct result of the decarbonization projects being implemented across a number of its European sites.
- The Investment Agreement stipulates a second equity injection by Invitalia, of up to
€680 million , to fund the completion of the purchase of Ilva’s business by Acciaierie d’Italia, subject to certain conditions precedent to be met by May 2022. At this point, Invitalia’s shareholding in Acciaierie d’Italia would increase 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 conditions precedent are not met, then the Acciaierie d’Italia Holding would not be required to complete the purchase of Ilva’s assets and its capital invested would be returned. - In addition to the AMNS India and Calvert joint ventures, the Company has important investments in China that provide valuable dividend streams and growth optionality. VAMA, our 50:50 joint venture with Hunan Valin, is a state-of-the-art facility focused on rolling steel for high-demanding applications in particular automotive. The business is performing well and plans to expand the current capacity by
40% to 2Mtpa over the next 2 years, financed from its own resources. The investment will allow VAMA to broaden its product portfolio and further enhance its competitiveness. This will in turn enable VAMA to meet the growing demand of high value add solutions from the Chinese automotive / new energy vehicle (NEV) market and propel it to be among the top automotive steel players in China by 2025. ArcelorMittal also owns 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. - On November 1, 2018, ArcelorMittal Investco Italy Srl completed the acquisition of Ilva Spa (former name of ArcelorMittal Italia) and its subsidiaries. ArcelorMittal was the principal partner in AM Investco with
94.45% equity stake in the consortium, with Banca Intesa Sanpaolo holding5.55% . ISP interest was subject to put and call option arrangement. The put option was exercised in December 2020 simultaneous to the signing of an investment agreement with Invitalia. - Other assets include the main listed investment of Erdemir (
12% ) at market value of$885 million and$792 million as of December 31, 2021 and September 30, 2021, respectively. As of December 31, 2020, other assets included amongst others the listed investment of Cleveland Cliffs (16% ) at market value of$1,988 million and Erdemir (12% ) at market value of$850 million . - During 3Q 2021, the Company revised the definition of free cash flow to include dividends paid to minority shareholders in order to reflect the measure it will use to determine dividends that will be paid under its new dividend policy. The comparative figures for free cash flow under the prior definition of cash flow from operations less capex were inflows in 4Q 2021 of
$3,009 million ,$1,767 million for 3Q 2021,$748 million for 4Q 2020,$6,897 million for 12M 2021 and$1,643 million for 12M 2020. - Segment “Other & eliminations” EBITDA result was an income of
$70 million in 4Q 2021 as compared to a loss of$209 million in 3Q 2021 and to a loss of$87 million in 4Q 2020 principally due to the decrease of the stock margin eliminations driven by the decrease during the quarter of the iron ore market price on intra-group stock sales between steel and mining businesses. - FY 2021 figures include
$0.1 billion capex related to ArcelorMittal Italia which has been deconsolidated from 2Q 2021 onwards). - On April 1, 2018, ArcelorMittal completed the acquisition of Votorantim Siderurgia (subsequently renamed ArcelorMittal Sul Fluminense "AMSF"), Votorantim S.A.'s long steel business in Brazil pursuant to which Votorantim Siderurgia became a wholly-owned subsidiary of ArcelorMittal Brasil. The acquisition was completed through the issuance of preferred shares to Votorantim S.A. representing a
2.99% interest in ArcelorMittal Brasil. Pursuant to the shareholders' agreement, such preferred shares are subject to put and call option arrangements exercisable by Votorantim S.A. and ArcelorMittal Brasil between July 1, 2019 and December 31, 2022 and between January 1, 2023 and December 31, 2024, respectively. The Company determined that it has a present ownership interest in the preferred shares subject to the put option. In 3Q 2021, the Company recognized a$82 million charge in connection with the put option granted to Votorantim partially reversed in 4Q 2021, and for which ArcelorMittal recognized a liability corresponding to the net present value of the redemption amount based on past and future EBITDA projections subject to certain adjustments. - Total steel shipments for 12M 2021 were 62.9 million metric tonnes ("Mt"), lower as compared to 69.1Mt in 12M 2020 due to the reduced scope following the sale of ArcelorMittal USA on December 9, 2020 and ArcelorMittal Italia, deconsolidated as from April 14, 2021. Adjusted for scope, steel shipments increased by
9.2% driven by the broad based recovery in demand following the impacts of COVID-19 on 2020. Adjusted for scope, all segments experienced year on year shipment growth: Europe +8.9% , Brazil +24.3% , ACIS +4.8% and NAFTA +8.0% . - Equity book value per share is calculated as the Equity attributable to the equity holders of the parent divided by diluted number of shares at the end of the period. FY 2021 equity of
$49.1b n divided by 967 million shares equals$51 /sh. FY 2020 equity of$38.3b n divided by 1,189 million shares equals$32 /sh. - Strategic capex envelope of
$3.1 billion represents total to be spent on strategic project in the period from 2021 to 2024. Specifically,$0.2 billion of the$3.1 billion has been spent through the end of 2021. $1.1 billion estimate of additional contribution to EBITDA, is based on assumptions as to selling prices and input costs in particular. Mining EBITDA assumptions are based on conservative long term iron ore prices
Fourth quarter 2021 earnings analyst conference call
ArcelorMittal management will host a conference call for members of the investment community to present and comment on the three-month and twelve-month periods ended December 31, 2021 on: Thursday February 10, 2022 at 9.30am US Eastern time; 14.30pm London time and 15.30pm CET.
| The dial in numbers are: | ||||
| Location | Toll free dial in numbers | Local dial in numbers | Participant | |
| UK local: | 0808 238 0676 | +44 (0)203 057 6900 | 7995055# | |
| US local: | +1 866 220 1433 | +1 347 903 0960 | 7995055# | |
| France: | 0805 101 469 | +33 1 7070 6079 | 7995055# | |
| Germany: | 0800 588 9185 | +49 69 2222 2624 | 7995055# | |
| Spain: | 900 828 532 | +34 914 144 464 | 7995055# | |
| Luxembourg: | 800 23 023 | +352 2786 0311 | 7995055# | |
Join the call via telephone using the participant code 7995055# or alternatively use the live audio webcast link.
https://interface.eviscomedia.com/player/1141/
Please visit the results section on our website to listen to the reply once the event has finished https://corporate.arcelormittal.com/investors/results
Forward-Looking 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 an industrial footprint in 18 countries. Guided by a philosophy to produce safe, sustainable steel, we are the leading supplier of quality steel in the major global steel markets including automotive, construction, household appliances and packaging, with world-class research and development and outstanding distribution networks.
Through our core values of sustainability, quality and leadership, we operate responsibly with respect to the health, safety and wellbeing of our employees, contractors and the communities in which we operate. For us, steel is the fabric of life, as it is at the heart of the modern world from railways to cars and washing machines. We are actively researching and producing steel-based technologies and solutions that make many of the products and components people use in their everyday lives more energy efficient.
We are one of the world’s largest producers of iron ore. With a geographically diversified portfolio of iron ore assets, we are strategically positioned to serve our network of steel plants and the external global market. While our steel operations are important customers, our supply to the external market is increasing as we grow. In 2021, ArcelorMittal had revenues of
ArcelorMittal is listed on the stock exchanges of New York (MT), Amsterdam (MT), Paris (MT), Luxembourg (MT) and on the Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS). For more information about ArcelorMittal please visit: https://corporate.arcelormittal.com/
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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FAQ
What was ArcelorMittal's operating income for FY 2021?
How did ArcelorMittal's net income change in FY 2021?
What is ArcelorMittal's strategy for reducing carbon emissions?
What was the basic EPS for ArcelorMittal in FY 2021?
How much capital did ArcelorMittal return to shareholders in FY 2021?
