UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
—————————
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
—————————
Dated February 5, 2016
Commission File Number: 001-35788
ARCELORMITTAL
(Translation of registrant’s name into
English)
24-26, Boulevard d’Avranches
L-1160 Luxembourg
Grand Duchy of Luxembourg
(Address of principal executive offices)
Indicate by check mark whether the registrant
files or will file annual reports under cover Form 20-F or Form 40-F.
Form
20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is
submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): _____
Indicate by check mark if the registrant is
submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): _____
Indicate by check mark whether the registrant
by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule
12g3-2(b) under the Securities Exchange Act of 1934.
Yes ☐ No
☒
If “Yes” marked, indicate below
the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-________
On February 5, 2016, ArcelorMittal
issued the press releases attached hereto as Exhibits 99.1, 99.2, 99.3 and 99.4 hereby incorporated by reference into this report
on Form 6-K.
Exhibit List
Exhibit No. |
Description |
Exhibit 99.1 |
Press release dated February 5, 2016, reporting that ArcelorMittal Europe has announced an operating profit of €145 million for 2015. |
Exhibit 99.2 |
Press release dated February 5, 2016,
reporting that ArcelorMittal has announced strategic initiatives, including rights offering. |
Exhibit 99.3 |
Press release dated February 5, 2016, reporting that ArcelorMittal has announced fourth quarter 2015 and full year 2015 results. |
Exhibit 99.4 |
Press release dated February 5, 2016, reporting that ArcelorMittal has announced the sale of its 35% stake in Gestamp Automoción for €875 million. |
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: February 5, 2016
By: /s/
Henk Scheffer
Exhibit Index
Exhibit No. |
Description |
Exhibit 99.1 |
Press release dated February 5, 2016, reporting that ArcelorMittal Europe has announced an operating profit of €145 million for 2015. |
Exhibit 99.2 |
Press release dated February 5, 2016, reporting that ArcelorMittal has announced strategic initiatives, including rights offering. |
Exhibit 99.3 |
Press release dated February 5, 2016, reporting that ArcelorMittal has announced fourth quarter 2015 and full year 2015 results. |
Exhibit 99.4 |
Press release dated February 5, 2016, reporting that ArcelorMittal has announced the sale of its 35% stake in Gestamp Automoción for €875 million. |
ArcelorMittal Europe reports €145m operating profit
for 2015
5 February 2016
ArcelorMittal Europe today announced its results for the full
year 2015 and the fourth quarter ended 31 December 2015.
For the full year 2015, the Europe segment reported an operating
profit of €145m. This compares with an operating profit of €549m in 2014, reflecting the impact of lower steel prices
on the business. Full-year Ebitda for 2015 was €2,158m, compared with €1,730m in 2014.
For the fourth quarter of 2015, ArcelorMittal Europe recorded
an operating loss of €465m, compared with a profit of €122m for the same quarter in 2014. However the Q4 2015 performance
was impacted by impairments of €366m, primarily in connection with the temporary idling of ArcelorMittal Sestao in Spain,
as well as €316m of inventory write-downs following the rapid decline of steel prices.
Ebitda in Q4 2015 improved by 12.5% year-on-year, mainly due
to lower costs and efficiency improvements partly offset by lower average steel selling prices (-10.2%) and lower steel shipments
(-1.4%).
In terms of production, crude steel production fell by 8.2%
to 10 million tonnes in the final quarter of 2015, compared with the previous quarter, primarily due to lower demand and maintenance
works including the reline of a blast furnace in Dunkirk, France, and repairs to a blast furnace in Gent, Belgium.
The business’ 2015 performance has been significantly
impacted by the drop in steel prices in Europe, as a result of lower demand in China which has caused record levels of unfairly
priced imports into the European Union.
ArcelorMittal, together with all steel producers in Europe,
has been consistently calling for the European Union to use trade defence instruments to impose tariffs on unfairly priced steel
imports, in order to ensure a long-term future for the steel industry in Europe.
Page 1 of 2
Commenting, Aditya Mittal, CEO ArcelorMittal Europe, said:
“ArcelorMittal Europe has today reported an operating
profit of €145m for 2015, but we recorded an operating loss of €465m for the fourth quarter of the year, which included
€316m of exceptional charges relating to the write-down of inventories following the rapid decline of steel prices. We have
now recorded two consecutive quarterly losses as a result of this price deterioration in the second half of the year, following
six consecutive quarters of profit. It is now widely known that the steel industry in Europe is suffering as a result of record
levels of low-priced unfair imports.”
In terms of the economic outlook, ArcelorMittal expects the
modest European economic recovery to continue in 2016, with EU28 GDP growth up to 1.9% year-on-year from 1.8% in 2015. Real steel
consumption is expected to continue to grow in 2016, but a build-up of stocks has led to a lower apparent steel consumption (ASC)
forecast, of below 1%.
Forward-Looking Statements
This press release 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 supervisory authority for
the financial sector (Commission de Surveillance du Secteur Financier – CSSF) 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 filed 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.
Page 2 of 2
NOT
FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR INTO CANADA, AUSTRALIA, JAPAN OR ANY OTHER JURISDICTION
IN WHICH TO DO SO WOULD BE PROHIBITED BY APPLICABLE LAW
ArcelorMittal
reduces net debt by US$4 billion
| - | US$3.0
billion capital raise |
| - | US$1.0
billion from sale of Gestamp |
| - | Pro
forma net debt below US$12 billion |
Luxembourg,
5 February, 2016 - ArcelorMittal (the “Company”) today announces a proposed1
capital raise of US$3.02
billion which, alongside the sale of its minority stake in Gestamp for approximately US$1 billion also announced today, would
reduce pro forma net debt as of 31 December 2015 by US$4 billion to below US$12 billion.
The Company
separately announces today a five-year strategic roadmap, the ArcelorMittal Action 2020 plan, which sets out improvement
plans for each of its five business segments and aims to improve Ebitda and free cash flow performance.
Features of the c.US$3.0 billion share
capital increase, expected to be completed in H1 2016, include:
| o | Capital increase by way
of a rights issue for ArcelorMittal shareholders3. |
| o | The Mittal family has
committed to take up its pro-rata entitlement corresponding to approximately US$1.1 billion. |
| o | ArcelorMittal has entered
into a standby underwriting commitment with Goldman Sachs International, BofA Merrill Lynch and Crédit Agricole Corporate
and Investment Bank, acting as Joint Global Coordinators, pursuant to which the Joint Global Coordinators undertook to underwrite
the capital increase for the remaining amount, subject to customary conditions. |
Additionally, the Company will receive approximately
US$1 billion from today’s separately announced sale of its 35% shareholding in Gestamp, which is expected to be closed by
the end of June 2016.
________________________
1
Subject to shareholder approval. An extraordinary general meeting of shareholders will be called in this respect.
2 As
the subscription price will be denominated in euros, the capital increase amount will correspond to the euro equivalent of
$3 billion upon the rights offering launch. The actual amount of the capital increase in USD will depend on f/x at
closing.
3
Structured as non-statutory preferential subscription rights.
ArcelorMittal will continue its supply
relationship with Gestamp through its 35% shareholding in Gonvarri, a sister company of Gestamp.
Assuming completion of the rights issue
and factoring in the Gestamp sale proceeds, the Company’s net debt at 31 December 2015 would be less than $12bn representing
2.2x 2015 Ebitda.
Mr. Lakshmi Mittal, chairman and CEO
of ArcelorMittal, commented:
“This capital raise, combined with
the sale of our minority shareholding in Gestamp, will accelerate the company’s debt reduction plans and enable us to reduce
net debt to less than US$12 billion. This will help ensure that the business is resilient in any market environment and puts
ArcelorMittal in a position of strength from which to further improve performance.
“The Company had already announced
plans to reduce the cash requirements of the business and improve Ebitda in 2016. A more detailed long-term strategic review has
now been completed, setting out the performance improvement potential for the five year period to 2020.
“Looking ahead it is clear that those
steel companies with a combination of the right assets, the right strategy and the right balance sheet will prosper. We are confident
ArcelorMittal has this combination and that we are in a strong position to deliver on the targets identified and cement our position
as the world’s leading steel company.”
The Board of Directors has proposed that
an Extraordinary General Meeting will be held to pass the resolutions necessary for the capital increase. The exact date, expected
to be in the first half of March, will be confirmed in due course. Further details can be found in the presentation published on
the Company’s website www.arcelormittal.com.
ArcelorMittal management will host a conference call for members of the investment community to discuss these strategic initiatives
on:
Date |
US Eastern time |
London |
CET |
Friday February 5, 2016 |
8am |
1pm |
2pm |
|
|
|
|
The dial in numbers: |
|
|
Location |
Toll free dial in numbers |
Local dial in numbers |
Participant |
UK local: |
0800 051 5931 |
+44 (0)203 364 5807 |
33346616# |
France: |
0800 914780 |
+33 1 7071 2916 |
33346616# |
Germany: |
0800 965 6288 |
+49 692 7134 0801 |
33346616# |
Spain: |
90 099 4930 |
+34 911 143436 |
33346616# |
Luxembourg: |
800 26908 |
+352 27 86 05 07 |
33346616# |
US: |
1 866 7192 729 |
+1 240 6450345 |
33346616# |
There will be an accompanying presentation via a live video
webcast that can be accessed here.
Forward-Looking Statements
This press release 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 supervisory authority for the
financial sector (Commission de Surveillance du Secteur Financier – CSSF) 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 filed 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.
For readers in the European Economic Area
This press release does not constitute an offer to sell, or
the solicitation of an offer to buy or subscribe for, any securities of ArcelorMittal within the meaning of Luxembourg law and/or
the laws of any other member state of the European Economic Area. This document does not constitute a prospectus within the meaning
of EC Directive 2003/71/EC of the European Parliament and of the Council dated 4 November 2003, as amended (the “Prospectus
Directive”), which expression includes any relevant implementing measure in the member state concerned, and should not be
the basis for any agreement or decision to invest. The Company has not made any final decision whether to proceed with any offering
of securities or to admit new securities to trading on a regulated market. Any such offering or new admission will be based exclusively
on a prospectus prepared for that purpose. Further, ArcelorMittal has not authorized any offer to the public of securities in any
member state of the European Economic Area that has implemented the Prospectus Directive, other than Luxembourg, the Netherlands,
France and Spain, (each, a “Relevant Member State”). With respect to each Relevant Member State, no action has been
undertaken or will be undertaken to make an offer to the public of securities requiring publication of a prospectus in any Relevant
Member State. Should an offering or new admission of subscription rights and new shares be conducted, as is currently planned,
in Luxembourg, the Netherlands, France and Spain, a securities prospectus will be produced, which is to be published following
its approval by the Luxembourg supervisory authority for the financial sector (Commission de Surveillance du Secteur Financier
– CSSF) and after it has been passported into the Netherlands, France and Spain subsequent to notification having been given
to the competent regulatory authorities in those jurisdictions. Any decision to purchase, subscribe for or otherwise acquire any
subscription rights or new shares of the Company must be made only on the basis of the information in a securities prospectus (if
published in due course by the Company), which will then be available for download on the internet site of ArcelorMittal (www.arcelormittal.com).
Copies of the
prospectus will then also be readily available upon request
and free of charge at 24-26, boulevard d’Avranches, L-1160 Luxembourg, Grand-Duchy of Luxembourg.
In each Relevant Member State, this communication is only addressed
to, and directed at, qualified investors in that Relevant Member State within the meaning of the Prospectus Directive.
This press release contains regulated information within the
meaning of the Transparency Directive 2004/109/EC and implementing laws and regulations, which must be made publicly available
pursuant to Luxembourg law.
This press release contains advertising materials in connection
with the Offer as referred to in the Market Abuse Directive 2003/6/EC and implementing laws and regulations.
For readers in the United Kingdom
This communication is only being distributed to, and is only
directed at, (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth companies,
and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons
together being referred to as “relevant persons”). The subscription rights and new shares are only available to, and
any invitation, offer or agreement to subscribe for, purchase or otherwise acquire such subscription rights or new shares will
be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any
of its contents.
For readers in the United States
ArcelorMittal has filed a registration statement (including
a prospectus) with the United States Securities and Exchange Commission (the “SEC”) for the offering to which this
communication relates. Before you invest, you should read the prospectus in that registration statement, the supplement to that
prospectus ArcelorMittal expects to file with the SEC and other documents ArcelorMittal has filed and will file with the SEC for
more complete information about ArcelorMittal and this offering. You may get these documents, once filed, free of charge by visiting
EDGAR on the SEC Web site at www.sec.gov. Alternatively, ArcelorMittal, any underwriter or any dealer participating in the offering
will arrange to send you the prospectus after filing if you request it by writing or telephoning ArcelorMittal at ArcelorMittal
USA LLC, 1 South Dearborn Street, 19th Floor, Chicago, IL 60603, Attention: Ms. Lisa M. Fortuna, Manager, Investor Relations, telephone
number: (312) 899-3985.
ArcelorMittal reports fourth quarter 2015
and full year 2015 results
Luxembourg, February 5, 2016 - 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 resultsi
for the three and twelve month periods ended December 31, 2015.
Highlights:
| Ø | Health and safety performance improved in FY 2015 with annual LTIF rate of 0.81x as compared to
0.85x in FY 2014 |
| Ø | FY 2015 EBITDA of $5.2 billion; EBITDA of $1.1 billion in 4Q 2015, 18.4% lower as compared with
3Q 2015 |
| Ø | FY 2015 net loss of $7.9 billion including $4.8 billion of impairments (primarily due to mining
impairments) and $1.4 billion of exceptional charges (primarily related to the write-down of inventory following the rapid decline
of international steel pricesii) |
| Ø | Excluding these exceptional and non-cash items, FY 2015 adjusted net loss was $0.3 billion as compared
to adjusted net income of $0.4 billion in FY 2014 |
| Ø | Net debt lower at $15.7 billion as of December 31, 2015 as compared to $16.8 billion as of September
30, 2015; net debt was $0.1 billion lower as compared to December 31, 2014 |
| Ø | Liquidity stood at $10.1 billion as of December 31, 2015 as compared to $9.6 billion as of September
30, 2015 |
| Ø | Giving effect to the announced sale of ArcelorMittal’s stake in Gestamp for €875 million,
liquidity would be $11.1 billion as of December 31, 2015 and net debt $14.7 billion |
| Ø | FY 2015 steel shipments of 84.6Mt (-0.6% YoY); 4Q 2015 steel shipments of 19.7Mt down -6.8% versus
4Q 2014 |
| Ø | FY 2015 iron ore shipments of 62.4Mt (-2.0% YoY), of which 40.3Mt shipped at market prices (+1.4%
YoY); 4Q 2015 iron ore shipments of 15.6Mt (-4.2% YoY), of which 9.9Mt shipped at market prices (-0.5% YoY) |
| Ø | FY 2015 iron ore unit cash costs reduced by 20% YoY, exceeding the 15% target for 2015 |
Strategic
progress in 2015:
The Company has continued to make progress
on its strategic objectives during 2015, including:
| § | Europe: Continued focus on cost optimization and leveraging benefits of restructuring |
| § | NAFTA: North American asset optimization underway; Calvert ramp up progressing well with automotive
certifications ongoing and increased capacity utilisation |
| § | ACIS: Capturing benefits of continued currency devaluation and overall good operational performance
in CIS; good government cooperation, tariff support and renegotiation of iron ore supply agreement in South Africa |
| § | Mining: Expanded mining volumes at ArcelorMittal Mines Canada (AMMC); FY 2015 iron ore production
up +10.9% to 25.9Mt whilst further reducing mining cash costs (4Q 2015 AMMC concentrate FOB cash cost below $25/t) |
| § | Further developed its automotive steel franchise including: investment approval to increase HRC
and HDG capacity in Krakow, Poland; commercial automotive coils produced in VAMA, China; new product launches i.e. Fortiform®
being used by selected car manufacturers; and S-in motion® roll out for pickup trucks |
| § | Further reduced cash requirements: FY 2015 capex reduced to $2.7 billion from $3.7 billion in FY
2014; FY 2015 net interest reduced to $1.3 billion from $1.5 billion in FY 2014 |
| § | As a result, despite challenging market conditions, the Company was able to achieve its objective
of making progress on net debt in 2015; net debt declined to its lowest level since the ArcelorMittal merger |
Action
2020 plan:
The Company has today published details
of its Action 2020 plan. The Action 2020 plan represents a strategic roadmap for each of ArcelorMittal’s main business segments.
The Action 2020 plan is over and above the Company’s ongoing management gains plan and seeks to deliver real structural improvements
unique to ArcelorMittal’s business. The Action 2020 plan targets a return to >$85/t EBITDA absent any recovery in steel
spreads and raw materials prices from current levels. The Action 2020 plan targets a further structural EBITDA improvement of approximately
$3.0 billion. Upon full achievement of the plan, the Company would expect to deliver free cash flow in excess of $2.0 billion annually.
Outlook
and guidance:
As indicated at 3Q 2015 results, a combination
of Company actions and known developments is expected to support EBITDA in 2016 by $1.0 billion relative to the 4Q 2015 annual
run-rate level. Due to order book and the time lag required for lower raw material costs to positively impact cost of sales, EBITDA
is expected to sequentially decline in 1Q 2016. Based on the assumption of prevailing raw material costs and spot steel spreads,
the Company expects FY 2016 EBITDA to be in excess of $4.5 billion. This guidance does not capture any upside to current market
conditions.
Reducing the cash requirements
of the business:
The Company targets a reduction of the
cash requirements of the business in 2016 by in excess of $1.0 billion as compared to 2015. The components of this reduction include:
| § | lower capex spend (FY 2016 capex is expected to be approximately $2.4 billion as compared to $2.7
billion in FY 2015); |
| § | lower interest expenses (FY 2016 net interest is expected to be approximately $1.1 billion as compared
to $1.3 billion in FY 2015); |
| § | no dividend payment in respect of the 2015 financial year; and |
As a result, the level of EBITDA required
for free cash flow breakeven would reduce to $4.5 billion, thus helping to ensure that the Company continues to generate positive
free cash flow, reduce net debt and maintain strong liquidity.
Financial highlights (on the basis of IFRSi):
(USDm) unless otherwise shown |
4Q 15 |
3Q 15 |
4Q 14 |
12M 15 |
12M 14 |
Sales |
13,981 |
15,589 |
18,723 |
63,578 |
79,282 |
EBITDA |
1,103 |
1,351 |
1,815 |
5,231 |
7,237 |
Operating (loss) / income |
(5,331) |
20 |
569 |
(4,161) |
3,034 |
Net loss attributable to equity holders of the parent |
(6,686) |
(711) |
(955) |
(7,946) |
(1,086) |
Basic loss per share (US$) |
(3.72) |
(0.40) |
(0.53) |
(4.43) |
(0.61) |
|
|
|
|
|
|
Own iron ore production (Mt) |
15.5 |
15.4 |
16.7 |
62.8 |
63.9 |
Iron ore shipped at market price (Mt) |
9.9 |
10.3 |
9.9 |
40.3 |
39.8 |
Crude steel production (Mt) |
21.6 |
23.1 |
23.2 |
92.5 |
93.1 |
Steel shipments (Mt) |
19.7 |
21.1 |
21.2 |
84.6 |
85.1 |
EBITDA/tonne (US$/t) |
56 |
64 |
86 |
62 |
85 |
Steel-only EBITDA/tonne (US$/t) |
51 |
57 |
75 |
56 |
69 |
Commenting, Mr. Lakshmi N. Mittal, ArcelorMittal
Chairman and CEO, said:
“2015 was a very difficult year for the steel and mining
industries. Although demand in our core markets remained strong, prices deteriorated significantly during the year as a result
of excess capacity in China. Throughout the year we have rigorously focused on implementing a series of measures aimed at
reducing costs and ensuring the business is adapted for these tough market conditions. As a result of these measures we succeeded
in ending the year with net debt slightly below the end of 2014 despite significantly lower EBITDA.
“Regrettably we have announced a disappointing net loss
which includes non-cash impairment charges on our mining assets as a result of the very considerable fall in the iron-ore price.
Our mining business is fully focused on adapting to this low price environment and has reduced cash costs by 20% compared with
an initial target of 15%. A further 10% is targeted for 2016.
“Looking ahead, although we have started to see a recovery
in Chinese steel spreads from 2015 lows, 2016 will be another difficult year for our industries. It is clear that China has
a challenge to restructure its steel industry for a lower growth economy but we are somewhat encouraged by recent comments concerning
capacity closures. Until this situation is fully addressed the effective and swift implementation of trade defence instruments
will be critical and we expect to see more positive rulings in this regard during the year.
“Our priority is to ensure we deliver on our financial
targets and strategic projects. We have today announced a new strategic plan for the period to 2020 following a detailed
analysis of performance improvement potential across the group. “Action 2020” sets out specific targets for each
business segment which combined aim to achieve a further $3.0 billion of EBITDA improvement potential and enable the business to
generate $2.0 billion of annual free cash flow.
“Reducing net debt remains an important priority and given
market conditions it is prudent to take proactive steps to accelerate progress. We have today announced the sale of our minority
shareholding in Gestamp, and are taking further steps to reduce net debt.
“In conclusion, there is no doubt these are challenging
times but we are confident that ArcelorMittal is taking all the right actions and has the right assets, the right strategy and
the right balance sheet to deliver on the targets identified and cement our position as the world’s leading steel company.”
Fourth quarter 2015 earnings press conference
call and webinar
ArcelorMittal management will host a conference call
and web presentation for members of the media outside the US to discuss the three and twelve-month periods ended December 31, 2015
on:
Date |
|
London |
CET |
Friday February 5, 2016 |
|
10.30am |
11:30am |
|
|
|
|
The dial in numbers: |
|
|
Location |
Toll free dial in numbers |
Local dial in numbers |
Participant |
UK local: |
0800 051 5931 |
+44 (0)203 364 5807 |
83982718# |
France: |
0800 914780 |
+33 1 7071 2916 |
83982718# |
Germany: |
0800 965 6288 |
+49 692 7134 0801 |
83982718# |
Spain: |
90 099 4930 |
+34 911 143436 |
83982718# |
Luxembourg: |
800 26908 |
+352 27 86 05 07 |
83982718# |
|
|
|
|
For participants in countries not listed, you can reach the
conference by dialling +49 69271340801
The conference call will include a brief question and answer
session with senior management. The presentation will be available via a live video webcast on www.arcelormittal.com.
Fourth quarter 2015 earnings analyst conference call
A pre-recorded audio of the
results presentation is available to listen to at the following link: http://interface.eviscomedia.com/player/1085/index.html
ArcelorMittal management will host a Q&A
session for members of the investment community to discuss the three and twelve-month periods ended December 31, 2015 on:
Date |
US Eastern time |
London |
CET |
Friday February 5, 2016 |
9.15am |
2.15pm |
3.15pm |
|
|
|
|
The dial in numbers: |
|
|
Location |
Toll free dial in numbers |
Local dial in numbers |
Participant |
UK local: |
0800 051 5931 |
+44 (0)203 364 5807 |
94077451# |
US local: |
1 86 6719 2729 |
+1 24 0645 0345 |
94077451# |
US (New York) |
1 86 6719 2729 |
+ 1 64 6663 7901 |
94077451# |
France: |
0800 914780 |
+33 1 7071 2916 |
94077451# |
Germany: |
0800 965 6288 |
+49 692 7134 0801 |
94077451# |
Spain: |
90 099 4930 |
+34 911 143436 |
94077451# |
Luxembourg: |
800 26908 |
+352 27 86 05 07 |
94077451# |
|
|
|
|
|
A replay of the conference call will be available for one week by dialing: |
|
Number |
Language |
Access code |
|
|
+49 (0) 1805 2047 088 |
English |
480406# |
|
|
|
|
|
|
|
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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.
Corporate responsibility
and safety performance
Health and safety - Own personnel and
contractors lost time injury frequency rate
Health and safety performance based on own personnel figures
and contractors lost time injury frequency (LTIF) rate, improved to 0.81x for the twelve months of 2015 (“12M 2015”)
as compared to 0.85x for the twelve months of 2014 (“12M 2014”), with improvements within NAFTA, Brazil and Europe
segments, offset by deterioration in the ACIS and Mining segments.
Health and safety performance deteriorated to 0.83x in the fourth
quarter of 2015 (“4Q 2015”) as compared to 0.78x for the third quarter of 2015 (“3Q 2015”) but improved
as compared to 0.89x for the fourth quarter of 2014 (“4Q 2014”). Between 4Q 2015 and 3Q 2015, deterioration in the
health and safety performance of the Brazil, Europe and ACIS segments relative to 3Q 2015, was partially offset by improvements
in the Mining and NAFTA segments.
The Company’s effort to improve the Group’s Health
and Safety record continues and remains focused on both further reducing the rate of severe injuries and preventing fatalities.
During 4Q 2015, ArcelorMittal launched a new flagship programme
for health and safety performance improvement in Europe segment “Take Care” training, to be rolled out 60,000
employees. Following the successful adoption of the “Courageous Leadership” training programme in the Mining segment,
a similar program was launched in the ACIS segment to improve health and safety performance.
Own personnel and contractors - Frequency
rate
Lost time injury frequency rate |
4Q 15 |
3Q 15 |
4Q 14 |
12M 15 |
12M 14 |
Mining |
0.72 |
0.99 |
0.75 |
0.74 |
0.56 |
|
|
|
|
|
|
NAFTA |
0.95 |
0.99 |
1.42 |
1.02 |
1.13 |
Brazil |
0.73 |
0.57 |
1.14 |
0.62 |
0.89 |
Europe |
1.01 |
0.88 |
0.90 |
0.99 |
1.09 |
ACIS |
0.58 |
0.52 |
0.47 |
0.54 |
0.49 |
Total Steel |
0.84 |
0.75 |
0.92 |
0.82 |
0.91 |
|
|
|
|
|
|
Total (Steel and Mining) |
0.83 |
0.78 |
0.89 |
0.81 |
0.85 |
Key corporate responsibility highlights
for 4Q 2015:
| · | In response to the growing trend towards global supply chain standards for steel, ArcelorMittal joined two initiatives on
steel and on mining that are working towards developing third party sustainability certification schemes for our sector, the
Initiative for Responsible Mining Assurance and Responsible Steel initiative. |
| · | ArcelorMittal hosted its inaugural sustainability media day in Paris on October 5, 2015, an event well attended by national
and international journalists. |
| · | ArcelorMittal has been recognized for its sustainability leadership with a World Steel Association “Steelie” award
at a ceremony held during the 49th worldsteel conference in Chicago on October 12, 2015. The Company was honoured with the “Excellence
in sustainability” award for its 10 Sustainable Development Outcomes – a key foundation for its sustainability framework
launched in 2015. |
Analysis of results
for the twelve months ended December 31, 2015 versus results for the twelve months ended December 31, 2014
Total steel shipments for 12M 2015 were 0.6% lower at 84.6 million
metric tonnes as compared with 85.1 million metric tonnes for 12M 2014.
Sales for 12M 2015 decreased by 19.8% to $63.6 billion as compared
with $79.3 billion for 12M 2014, primarily due to lower average steel selling prices (-19.7%), lower steel shipments (-0.6%) and
lower seaborne iron ore reference prices (-43%), offset in part by higher market priced iron ore shipments (+1.4%).
Depreciation of $3.2 billion for 12M 2015 was lower as compared
to $3.9 billion for 12M 2014 primarily due to the impact of the US dollar appreciation against all major currencies.
Impairment charges for 12M 2015 were $4.8 billion relating to:
| · | Mining segment ($3.4 billion): consisting of $0.9
billion with respect to goodwill and $2.5 billion primarily related to fixed assets mainly due to a downward revision of cash flow
projections relating to the expected persistence of a lower raw material price outlook at: |
| o | ArcelorMittal Liberia ($1.4 billion); |
| o | Las Truchas in Mexico ($0.2 billion); |
| o | ArcelorMittal Serra Azul in Brazil ($0.2 billion);
and |
| o | ArcelorMittal Princeton coal mining operations in
the United States ($0.7 billion). |
| · | Steel segments ($1.4 billion): consisting of fixed
asset impairment charges of $0.2 billion related to the intended sale of the Long Carbon facilities in the US (ArcelorMittal La
Place, Steelton and Vinton within the NAFTA segment), $0.4 billion primarily in connection with the idling for an indefinite time
of the ArcelorMittal Sestao plant in Spain (Europe segment), and $0.8 billion related to: |
| o | NAFTA: Deployment of asset optimization programs at
Indiana Harbor East and West in the United States ($0.3 billion); |
| o | Brazil: ArcelorMittal Point Lisas in Trinidad and
Tobago ($0.2 billion) currently idled; and |
| o | ACIS: Saldanha plant in South Africa as a result of
its revised competitive outlook ($0.3 billion) |
Impairment charges for 12M 2014 were $264 million which included
$114 million primarily related to the idling of the steel shop and rolling facilities of Indiana Harbor Long carbon operations
in the US (NAFTA); $63 million related to the write-down of the Volcan iron ore mine in Mexico (Mining); and $57 million related
to the closure of mill C in Rodange, Luxembourg (Europe).
Exceptional charges for 12M 2015 were $1.4 billion primarily
including $1.3 billion inventory related charges following the rapid decline of international steel prices and litigation and other
costs in South Africa ($0.1 billion). Exceptional charges for 12M 2014 were nil.
Operating loss for 12M 2015 was $4.2 billion as compared to
operating income of $3.0 billion in 12M 2014. Operating results for 12M 2015 were primarily negatively impacted by the lower average
steel selling prices, the $4.8
billion impairment charges and $1.4 billion exceptional charges
discussed above. Operating results for 12M 2014 were negatively impacted by $90 million following the settlement of US antitrust
litigation (NAFTA) and a $76 million provision related to onerous annual tin plate contracts at Weirton in the US (NAFTA), offset
by the positive impact from the $79 million gain on disposal of Kuzbass coal mines in Russia (Mining).
Loss from investments in associates, joint ventures and other
investments in 12M 2015 was $502 million, as compared to a loss of $172 million in 12M 2014. The loss in 12M 2015 was primarily
due to write-downs totalling $565 million primarily related to the Company’s investments in the Kalagadi Manganese mining
project in South Africa ($0.3 billion) and Indian investee ($0.1 billion), in each case due to downward revisions in projected
cashflows and $0.1 billion related to the decrease in market value of the investment in Erdemir, partially offset by income ($0.1
billion) generated from the share swap with respect to Gerdau, Braziliii.
Loss from investments in associates, joint ventures and other investments in 12M 2014 was primarily due to a $621 million impairment
loss on China Oriental following a revision of business assumptions, partially offset by a $193 million gain from the sale of Gallatin
and improved performance of European investees and the share of profits of Calvert operations.
Net interest expense was lower at $1.3 billion in 12M 2015 as
compared to $1.5 billion in 12M 2014. The reduction is attributable to lower average cost resulting from debt repaid and raised
during the year, partially offset by increased interest costs following the ratings downgrades that occurred during 2015.
Foreign exchange and other net financing costs were lower at
$1.6 billion for 12M 2015 as compared to $1.9 billion for 12M 2014. Foreign exchange and other net financing costs for 12M 2015
include foreign exchange loss of $697 million as compared to a loss of $620 million for 12M 2014, mainly on account of a further
10% of USD appreciation against the Euro (versus 12% appreciation in 12M 2014), a 32% appreciation against the Brazilian Real (versus
12% appreciation in 12M 2014) and a 46% devaluation of the tenge currency in Kazakhstaniv.
This foreign exchange loss is largely non-cash and primarily relates to the impact of the USD appreciation on Euro denominated
deferred tax assets partially offset by foreign exchange gain on euro debt. Costs for 12M 2014 include expenses related to the
termination of the Senegal greenfield projectv,
non-cash gains and losses on convertible bonds and hedging instruments that matured during the period as well as charges related
to the federal tax amnesty plan in Brazil linked with the Siderbras casevi.
ArcelorMittal recorded an income tax expense of $902 million
for 12M 2015 as compared to income tax expense of $454 million for 12M 2014. The 12M 2015 income tax expense is negatively influenced
by impairments of deferred tax assets stemming from revisions to future taxable result forecasts in some jurisdictions. Following
the impairments of fixed assets and goodwill in the mining and steel segments, as well as investments in associates and joint ventures,
the Company has potential tax benefits of $1.3 billion (of which $0.1 billion is recognized immediately and $1.2 billion is recognizable
in future periods upon availability of positive taxable income projections above the already recorded level of group deferred tax
assets).
Non-controlling interests for 12M 2015 were an income of $477
million, as compared to a charge of $112 million for 12M 2014. Non-controlling interests for 12M 2015 primarily related to losses
generated by ArcelorMittal South Africa and Liberia resulting from the impairment of assets as described above. Non-controlling
interests charges for 12M 2014 primarily relate to minority shareholders’ share of net income recorded in ArcelorMittal Mines
Canada and Belgo Bekaert Arames in Brazil.
ArcelorMittal’s net loss for 12M 2015 was $7.9 billion,
or $4.43 loss per share, as compared to net loss for 12M 2014 of $1.1 billion, or $0.61 loss per share. Adjusted net loss for 12M
2015 was $0.3 billion as compared to adjusted net income in 12M 2014 of $0.4 billion.
Analysis of results
for 4Q 2015 versus 3Q 2015 and 4Q 2014
Total steel shipments for 4Q 2015 were 6.3% lower at 19.7 million
metric tonnes as compared with 21.1 million metric tonnes for 3Q 2015 (primarily due to lower shipments in NAFTA (-18.5%)), and
6.8% lower as compared to 21.2 million metric tonnes for 4Q 2014 (primarily due to lower volumes in NAFTA (-21.1%)).
Sales for 4Q 2015 were $14.0 billion as compared to $15.6 billion
for 3Q 2015 and $18.7 billion for 4Q 2014. Sales in 4Q 2015, were 10.3% lower as compared to 3Q 2015 primarily due to lower average
steel selling prices (-7.2%), lower steel shipments (-6.3%), lower iron ore reference prices (-15%) and lower market priced iron
ore shipments (-4.3%). Sales in 4Q 2015 were 25.3% lower as compared to 4Q 2014 due to lower average steel selling prices (-22.6%),
lower steel shipments (-6.8%) and lower iron ore references prices (-37%).
Depreciation was $807 million for 4Q 2015 as compared to $777
million in 3Q 2015, and was lower as compared to $982 million for 4Q 2014, primarily on account of foreign exchange impact following
the appreciation of the US dollar against major currencies.
Impairment charges for 4Q 2015 were $4.7 billion including $0.9
billion with respect to the Mining segment goodwill and $3.8 billion primarily related to fixed assets as discussed above. Impairment
charges for 3Q 2015 were $27 million relating to the closure of Vereeniging meltshop in South Africa. Impairment charges for 4Q
2014 of $264 million included $114 million primarily related to the idling of the steel shop and rolling facilities of Indiana
Harbor Long carbon operations in the US (NAFTA); $63 million related to write-down of the Volcan iron ore mine in Mexico (Mining);
and $57 million related to the closure of mill C in Rodange, Luxembourg (Europe).
Exceptional charges for 4Q 2015 were $0.9 billion. These primarily
include $0.8 billion inventory related charges following the rapid decline of international steel prices and litigation and other
costs in South Africa ($0.1 billion). Exceptional charges for 3Q 2015 were $527 million, including $0.5 billion related to the
write-down of inventory and $27 million of retrenchment costs in South Africa. Exceptional charges for 4Q 2014 were nil.
Operating loss for 4Q 2015 was $5.3 billion, as compared to
operating income of $20 million in 3Q 2015 and operating income of $569 million in 4Q 2014. Operating results for 4Q 2015 and 3Q
2015 were impacted by impairments and exceptional charges discussed above. Operating results for 4Q 2014 were negatively impacted
by a $76 million provision related to onerous annual tin plate contracts at Weirton in the US (NAFTA), offset by the positive impact
from the $79 million gain on disposal of Kuzbass coal mines in Russia (Mining).
Loss from investments in associates, joint ventures and other
investments for 4Q 2015 was $655 million as compared to income in 3Q 2015 of $30 million. The loss in 4Q 2015 was primarily due
to write-downs totalling $608 million primarily related to the Company’s investments in the Kalagadi Manganese mining project
in South Africa ($0.3 billion) and Indian investee ($0.1 billion) due to downward revisions in projected cash flows, and $0.1 billion
related to the decrease in market value of the investment in
Erdemir. Loss from investments in associates, joint ventures and other investments in 4Q 2014 was negatively impacted by a $621
million impairment loss on China Oriental following a revision of business assumptions, partially offset by a $193 million gain
on the sale of Gallatin as well as improved performance of European investees and the share of profits of Calvert operations.
Net interest expense in 4Q 2015 was stable at $312 million as
compared to $318 million in 3Q 2015 and $322 million in 4Q 2014.
Foreign exchange and other net financing costs were $342 million
for 4Q 2015 as compared to $409 million for 3Q 2015 and $549 million for 4Q 2014. Foreign exchange and other net financing costs
for 4Q 2015 include a foreign exchange loss of $104 million as compared to a loss of $170 million for 3Q 2015 mainly on account
of a further 2.8% USD appreciation against the Euro, a 20.3% devaluation of tenge currency in Kazakhstaniv and a 27.7%
devaluation of Argentine pesos after currency controls lifted. This foreign exchange loss is largely non-cash and primarily relates
to the impact of the USD appreciation on Euro denominated deferred tax assets partially offset by foreign exchange gain on euro
debt. Foreign exchange and other net financing costs for 4Q 2014 includes foreign exchange losses of $316 million.
ArcelorMittal recorded an income tax expense of $441 million
for 4Q 2015, as compared to an income tax expense of $127 million for 3Q 2015 and income tax expense of $258 million for 4Q 2014.
The higher tax expense in 4Q 2015 results mainly from impairments of deferred tax assets stemming from lower future taxable result
forecasts.
Non-controlling interests for 4Q 2015 were an income of $395
million as compared to income of $93 million in 3Q 2015, and charge of $15 million in 4Q 2014. Non-controlling interests for 4Q
2015 primarily related to South Africa and Liberia resulting from the impairment of the assets as described above.
ArcelorMittal recorded net loss for 4Q 2015 of $6.7 billion,
or $3.72 loss per share, as compared to a net loss of $711 million, or $0.40 loss per share for 3Q 2015, and net loss of $955 million,
or $0.53 loss per share for 4Q 2014.
ArcelorMittal recorded adjusted net loss for 4Q 2015 of $0.4
billion, as compared to an adjusted net loss of $0.1 billion for 3Q 2015 and adjusted net income of $0.1 billion for 4Q 2014.
Capital expenditure projects
The following tables summarize the Company’s principal
growth and optimization projects involving significant capital expenditures.
Completed projects in most recent quarters
Region |
Site |
Project |
Capacity / particulars |
Actual completion |
Brazil |
Monlevade (Brazil) |
Wire rod production expansion |
Increase in capacity of finished products by 1.1mt / year |
4Q 2015(a)
|
Canada |
Baffinland |
Early revenue phase |
Production capacity 3.5mt / year (iron ore) |
3Q 2015(b) |
NAFTA |
ArcelorMittal Dofasco (Canada) |
Phase 1: Construction of a heavy gauge galvanizing line#6 to optimize galvanizing operations |
Optimize cost and increase shipment of galvanized products by 0.3mt / year |
2Q 2015
|
China |
Hunan Province |
VAMA auto steel JV |
Capacity of 1.5mt pickling line, 1.0mt continuous annealing line and 0.5mt of hot dipped galvanizing auto steel |
1Q 2015 |
USA |
AM/NS Calvert |
Continuous coating line upgrade to Aluminize line#4 |
Increased production of Usibor by 0.1mt / year |
1Q 2015 |
Brazil |
Juiz de Fora (Brazil) |
Rebar expansion |
Increase in rebar capacity by 0.4mt / year
|
1Q 2015(a)
|
Ongoing projects
Region |
Site |
Project |
Capacity / particulars |
Forecast completion |
USA |
AM/NS Calvert |
Slab yard expansion |
Increase coil production level up to 5.3mt/year coils. |
2H 2016 |
NAFTA |
ArcelorMittal Dofasco (Canada) |
Phase
2: Convert the current galvanizing line #4 to a Galvalume line |
Allow
the galvaline #4 to produce 160kt galvalume and 128kt galvanize |
2016
|
Europe |
ArcelorMittal Krakow (Poland) |
HRM extension |
Increase HRC capacity by 0.9mt / year |
2016(c) |
|
|
HDG increase |
Increasing HDG capacity by 0.4mt / year |
2016(c)
|
Brazil |
Acindar (Argentina) |
New rolling mill |
Increase in rolling capacity by 0.4mt / year for bars for civil construction |
2016 |
Brazil |
ArcelorMittal Vega Do Sul (Brazil) |
Expansion project |
Increase hot dipped galvanizing (HDG) capacity by 0.6mt / year and cold rolling (CR) capacity by 0.7mt / year |
On hold |
Brazil |
Juiz de Fora (Brazil) |
Meltshop expansion |
Increase in meltshop capacity by 0.2mt / year |
On hold(a)
|
Brazil |
Monlevade (Brazil) |
Sinter plant, blast furnace and meltshop |
Increase in liquid steel capacity by 1.2mt / year;
Sinter feed capacity of 2.3mt / year |
On hold |
Mining |
Liberia |
Phase 2 expansion project |
Increase production capacity to 15mt / year (high grade sinter feed) |
On hold(d) |
| a) | Though the Monlevade wire rod expansion project and Juiz de Fora rebar expansion were completed in 2015, and Juiz de Fora meltshop
is expected to be completed in 2017, the Company does not expect to increase shipments until domestic demand improves. |
| b) | First production in Baffinland was in 4Q 2014, with first shipments taking place during 3Q 2015 following the completion of
shiploader and port infrastructure. |
| c) | On July 7, 2015, ArcelorMittal Poland announced it will restart preparations for the relining of blast furnace No. 5 in Krakow,
which is coming to the end of its lifecycle in mid-2016. Total investments in the primary operations in the Krakow plant will amount
to PLN 200 million (more than €40 million), which also includes modernization of the basic oxygen furnace No. 3. Additional
projects in the downstream operations will also be implemented. These include the extension of the hot rolling mill capacity by
0.9 million tons per annum and increasing the hot dip galvanizing capacity by 0.4 million tons per annum. The capex value of those
two projects exceeds PLN 300 million (€90 million) in total. In total, the group will invest more than PLN 500 million (more
than €130 million) in its operations in Krakow, including both upstream and downstream installations. |
| d) | ArcelorMittal remains committed to Liberia where it operates a full value chain of mine, rail and port. It has been operating
the mine on a DSO basis since 2011 and produced 4.3Mt in 2015. In the current initial DSO phase, significant cost reduction and
re-structuring has continued to ensure competitiveness at current prices. Drilling for DSO resource extension recently commenced
and in 2016 the operation has been right sized to 3mtpa to focus on its ‘natural’ Atlantic markets. This repositioning
for size and competitiveness also extends the life of the DSO phase as ArcelorMittal considers the appropriate next phase of development. |
ArcelorMittal had previously announced a Phase 2
project that envisaged the construction of 15 million tonnes of concentrate sinter fines capacity and associated infrastructure.
The phase 2 project was initially delayed due to
the declaration of force majeure (FM) by contractors
in August 2014 due to the Ebola virus outbreak in West Africa. Whilst rapid price declines over the period since force majeure
have led to a reassessment of the project, ArcelorMittal is considering transitioning production to a higher grade sinter fines
product but now in a phased approach as opposed to a major step up from 15 to 20mtpa as originally envisaged in phase 2. Extensive
tonnage of concentrator feed material is already exposed in readiness for a concentrated sinter fines, and ArcelorMittal also has
options in its concession to mine higher grade, lower gangue DSO ores. Work continues in 2016 to define the best business option.
Analysis of segment operations
NAFTA
(USDm) unless otherwise shown |
4Q 15 |
3Q 15 |
4Q 14 |
12M 15 |
12M 14 |
Sales |
3,600 |
4,371 |
5,166 |
17,293 |
21,162 |
EBITDA |
273 |
340 |
341 |
891 |
1,206 |
Depreciation |
154 |
151 |
178 |
616 |
706 |
Impairment |
507 |
- |
114 |
526 |
114 |
Exceptional charges |
353 |
101 |
- |
454 |
- |
Operating (loss) / income |
(741) |
88 |
49 |
(705) |
386 |
|
|
|
|
|
|
Crude steel production (kt) |
5,136 |
5,976 |
6,142 |
22,795 |
25,036 |
Steel shipments (kt) |
4,581 |
5,620 |
5,805 |
21,306 |
23,074 |
Average steel selling price (US$/t) |
706 |
698 |
824 |
732 |
843 |
NAFTA segment crude steel production decreased 14.1% to 5.1
million tonnes in 4Q 2015 as compared to 6.0 million tonnes for 3Q 2015.
Steel shipments in 4Q 2015 decreased 18.5% to 4.6 million tonnes
as compared to 5.6 million tonnes in 3Q 2015, primarily driven by a 19.6% decrease in flat product steel shipments (mainly Mexico
and US) and 13.0% decrease in long product shipment volumes.
Sales in 4Q 2015 decreased by 17.6% to $3.6 billion as compared
to 3Q 2015, primarily due to lower steel shipment volumes as discussed above, offset by higher average steel selling prices (due
to a mix effect a lower percentage of slab shipments from the Mexican operations).
EBITDA in 4Q 2015 decreased 19.6% to $273 million as compared
to $340 million in 3Q 2015 primarily due to lower steel volumes partially offset by a better product mix of sales (noted above),
lower costs and improved performance in Calvert. EBITDA in 4Q 2015 declined 20% as compared to 4Q 2014 primarily due to a negative
price-cost squeeze resulting from significantly lower average steel selling prices (-14.3%) with declines in both flat (-13.4%)
and long products (-23.2%), as well as lower steel shipment volumes (-21.1%) for both flat (-21.9%) and long products (-15.1%).
Operating performance in 4Q 2015 was impacted by impairments
totalling $507 million with respect to the intended sale of Long Carbon facilities in the US (ArcelorMittal LaPlace, Steelton and
Vinton) ($0.2 billion), and following planned asset optimization at Indiana Harbor East and West in the US ($0.3 billion). In addition,
operating performance in 4Q 2015 and 3Q 2015 was impacted by exceptional inventory related charges of $353 million and $101 million,
respectively, following the rapid decline of steel prices. Operating performance in 4Q 2014 was impacted by impairments of $114
million primarily related to the idling of the steel shop and rolling facilities of Indiana Harbour Long carbon operations in the
US.
Brazil
(USDm) unless otherwise shown |
4Q 15 |
3Q 15 |
4Q 14 |
12M 15 |
12M 14 |
Sales |
2,092 |
2,125 |
2,543 |
8,503 |
10,037 |
EBITDA |
181 |
313 |
546 |
1,231 |
1,845 |
Depreciation |
87 |
78 |
99 |
336 |
457 |
Impairment |
176 |
- |
- |
176 |
- |
Exceptional charges |
52 |
39 |
- |
91 |
- |
Operating (loss) / income |
(134) |
196 |
447 |
628 |
1,388 |
|
|
|
|
|
|
Crude steel production (kt) |
2,850 |
2,953 |
2,758 |
11,612 |
10,524 |
Steel shipments (kt) |
2,873 |
3,125 |
2,895 |
11,540 |
10,376 |
Average steel selling price (US$/t) |
565 |
622 |
792 |
647 |
867 |
Brazil segment crude steel production decreased 3.5% to 2.9
million tonnes in 4Q 2015 as compared to 3.0 million tonnes in 3Q 2015.
Steel shipments in 4Q 2015 decreased by 8.1% to 2.9 million
tonnes as compared to 3Q 2015, primarily due to a 4.5% decrease in flat steel shipments and a 13.5% decrease in long product shipments
due to a continued slowdown in demand.
Sales in 4Q 2015 decreased by 1.6% to $2.1 billion as compared
to 3Q 2015, due to lower average steel selling prices (-9.3%), and lower steel shipments discussed above.
EBITDA in 4Q 2015 declined by 42.1% to $181 million as compared
to $313 million in 3Q 2015 on account of lower average steel selling prices (primarily flat steel products -11.2%) and lower steel
shipment volumes. EBITDA in 4Q 2015 was 66.8% lower as compared to 4Q 2014 primarily due to lower average steel selling prices
(-28.7%) and lower steel shipments (-0.7%).
Operating performance in 4Q 2015 was impacted by impairment
of $176 million related to Point Lisas (Trinidad and Tobago) currently idled, and exceptional charges of $52 million relating to
inventory write down in Point Lisas. Operating performance in 3Q 2015 was impacted by exceptional charges of $39 million relating
to the write-down of inventories following the rapid decline of steel prices.
Europe
(USDm) unless otherwise shown |
4Q 15 |
3Q 15 |
4Q 14 |
12M 15 |
12M 14 |
Sales |
7,075 |
7,671 |
9,023 |
31,893 |
39,552 |
EBITDA |
544 |
553 |
557 |
2,393 |
2,304 |
Depreciation |
307 |
293 |
343 |
1,192 |
1,510 |
Impairment |
398 |
- |
57 |
398 |
57 |
Exceptional charges |
345 |
287 |
- |
632 |
- |
Operating (loss) / income |
(506) |
(27) |
157 |
171 |
737 |
|
|
|
|
|
|
Crude steel production (kt) |
9,988 |
10,880 |
10,742 |
43,853 |
43,419 |
Steel shipments (kt) |
9,473 |
9,646 |
9,610 |
40,676 |
39,639 |
Average steel selling price (US$/t) |
568 |
614 |
721 |
609 |
773 |
Europe segment crude steel production decreased by 8.2% to 10.0
million tonnes in 4Q 2015, as compared to 3Q 2015.
Steel shipments in 4Q 2015 decreased by 1.8% to 9.5 million
tonnes as compared to 3Q 2015, primarily due to a 4.5% decrease in flat product shipment volumes, offset in part by a 4.8% increase
in long steel shipment volumes.
Sales in 4Q 2015 declined 7.8% to $7.1
billion as compared to 3Q 2015, primarily due to lower average steel selling prices (noted below) and lower steel shipments as
discussed above. Average steel selling prices declined by 7.4% during 4Q 2015, as flat and long products declined 5.9% and 11.4%,
respectively.
EBITDA in 4Q 2015 decreased by 1.6% to $544 million as compared
to $553 million in 3Q 2015, mainly driven by lower steel shipment volumes and lower average steel selling prices offset in part
by lower raw material costs, lower maintenance costs and continuing cost reduction efforts. EBITDA in 4Q 2015 declined by 2.3%
as compared to 4Q 2014 primarily on account of lower average steel selling prices (-21.2%) and lower steel shipments (-1.4%), offset
in part by lower costs and efficiency improvements.
Operating performance in 4Q 2015 was impacted by impairments
of $398 million primarily in connection with the idling for an indefinite time of the ArcelorMittal Sestao plant in Spain. Operating
performance in 4Q 2015 and 3Q 2015 was also impacted by exceptional charges of $345 million and $287 million, respectively, relating
to the write-down of inventories following the rapid decline of steel prices. Operating performance in 4Q 2014 was impacted by
impairment charges of $57 million related to the closure of mill C in Rodange, Luxembourg.
ACISvii
(USDm) unless otherwise shown |
4Q 15 |
3Q 15 |
4Q 14 |
12M 15 |
12M 14 |
Sales |
1,250 |
1,508 |
1,967 |
6,128 |
8,268 |
EBITDA |
61 |
35 |
147 |
317 |
620 |
Depreciation |
90 |
104 |
135 |
408 |
525 |
Impairment |
267 |
27 |
- |
294 |
- |
Exceptional charges |
159 |
80 |
- |
239 |
- |
Operating (loss) / income |
(455) |
(176) |
12 |
(624) |
95 |
|
|
|
|
|
|
Crude steel production (kt) |
3,663 |
3,257 |
3,519 |
14,219 |
14,148 |
Steel shipments (kt) |
3,078 |
3,196 |
3,111 |
12,485 |
12,833 |
Average steel selling price (US$/t) |
356 |
416 |
550 |
432 |
576 |
ACIS segment crude steel production in 4Q 2015 increased by
12.5% to 3.7 million tonnes as compared to 3Q 2015 primarily driven by increased production in Ukraine following the repair of
blast furnace #9 during the fourth quarter of 2015.
Steel shipments in 4Q 2015 decreased by 3.7% to 3.1 million
tonnes as compared to 3Q 2015. Lower steel shipments in South Africa and Kazakhstan were offset in part by higher Ukrainian shipments.
Sales in 4Q 2015 decreased by 17.1% to $1.3 billion as compared
3Q 2015, primarily due to lower average steel selling prices (-14.4%) and lower steel shipments as discussed above. Average steel
prices were lower following the fall in international prices and currency devaluations in the region.
EBITDA in 4Q 2015 of $61 million was higher as compared to $35
million in 3Q 2015, reflecting improvement primarily in Kazakhstan following the devaluation of the Kazakhstan tenge. EBITDA in
4Q 2015 of $61 million was lower as compared to $147 million in 4Q 2014, primarily due to lower average steel selling prices (-35.2%)
with weaker performance in South Africa and Ukraine offset in part by improvement in Kazakhstan following currency devaluation.
Operating performance in 4Q 2015 was impacted by impairments
of $267 million primarily with respect to the Saldanha plant in South Africa due to its revised competitive outlook, and exceptional
charges of $159 million primarily relating to a deferred stripping prepaymentviii,
a provision in relation to competition cases in South Africaix
and the write-down of inventories following the rapid decline of steel prices. Operating performance in 3Q 2015 was impacted by
impairment charges of $27 million related to the closure of Vereeniging meltshop in South Africa, and exceptional charges of $80
million relating to the write-down of inventories following the rapid decline of steel prices and to retrenchment costs in Thabazimbi
and Tshikondeni in South Africa for $27 million.
Mining
(USDm) unless otherwise shown |
4Q 15 |
3Q 15 |
4Q 14 |
12M 15 |
12M 14 |
Sales |
757 |
908 |
1,059 |
3,387 |
4,970 |
EBITDA |
90 |
143 |
232 |
462 |
1,331 |
Depreciation |
162 |
145 |
219 |
614 |
703 |
Impairment |
3,370 |
- |
63 |
3,370 |
63 |
Operating (loss) / income |
(3,442) |
(2) |
(50) |
(3,522) |
565 |
|
|
|
|
|
|
Own iron ore production (a) (Mt) |
15.5 |
15.4 |
16.7 |
62.8 |
63.9 |
Iron ore shipped externally and internally at market price (b) (Mt) |
9.9 |
10.3 |
9.9 |
40.3 |
39.8 |
Iron ore shipment - cost plus basis (Mt) |
5.8 |
5.9 |
6.4 |
22.1 |
23.9 |
|
|
|
|
|
|
Own coal production(a) (Mt) |
1.4 |
1.6 |
1.7 |
6.1 |
7.0 |
Coal shipped externally and internally at market price(b) (Mt) |
0.8 |
0.8 |
0.8 |
2.8 |
3.9 |
Coal shipment - cost plus basis (Mt) |
0.8 |
0.7 |
0.9 |
3.2 |
3.3 |
(a) Own iron ore and coal production not including strategic
long-term contracts.
(b) Iron ore and coal shipments of market-priced based materials
include the Company’s own mines, and share of production at other mines, and exclude supplies under strategic long-term contracts.
Own iron ore production (not including supplies under strategic
long-term contracts) in 4Q 2015 increased by 1.1% to 15.5 million metric tonnes as compared to 3Q 2015, due to higher production
in Canada (following planned maintenance in the third quarter) offset in part by lower production at both Las Truchas and Volcan
Mines in Mexico. Own iron ore production (not including supplies under strategic long-term contracts) was lower by 7.2% as compared
to 4Q 2014 primarily due to lower production in Mexico and Liberia.
Market priced iron ore shipments in 4Q 2015 decreased by 4.3%
to 9.9 million metric tonnes as compared to 3Q 2015 primarily driven by lower shipments in Mexico. Market priced iron ore shipments
in 4Q 2015 decreased by 0.5% as compared to 4Q 2014 driven by decreased shipments in Mexico and Liberia offset in part by higher
shipments in Canada (following operational efficiency gains).
Own coal production (not including supplies under strategic
long-term contracts) in 4Q 2015 decreased 12.1% to 1.4 million metric tonnes as compared to 3Q 2015, primarily due to lower production
in both US and Kazakhstan
operations. Own coal production (not including supplies under
strategic long-term contracts) in 4Q 2015 decreased 15.9% as compared to 4Q 2014, primarily due to lower production at both US
and Kazakhstan operations.
EBITDA in 4Q 2015 decreased to $90 million as compared to $143
million in 3Q 2015 primarily due to lower market priced iron ore shipment volumes (-4.3%) and to lower seaborne iron ore market
prices (-15%), offset in part by improved costs performance. EBITDA in 4Q 2015 was 61.4% lower as compared to 4Q 2014, primarily
due to lower seaborne iron ore market prices (-37%), partially offset by lower unit iron ore cash costs and restructuring of our
coal operations, including the sale of Kuzbass mines.
Operating performance in 4Q 2015 was impacted by impairments
of $3.4 billion including $0.9 billion with respect to goodwill and $2.5 billion primarily related to fixed assets, in respect
of iron ore mining operations at ArcelorMittal Liberia ($1.4 billion), Las Truchas in Mexico ($0.2 billion), ArcelorMittal Serra
Azul in Brazil ($0.2 billion) and coal mining operations at ArcelorMittal Princeton in the United States ($0.7 billion) mainly
due to a downward revision of cash flow projections relating to the expected persistence of a lower raw material price outlook.
Operating performance in 4Q 2014 was impacted by impairments of $63 million related to the Volcan mine.
Liquidity and Capital Resources
For 4Q 2015, net cash provided by operating activities was $1,574
million as compared to $473 million in 3Q 2015. Net cash provided by operating activities in 4Q 2015 included a $919 million release
of operating working capital as compared to a $136 million investment in operating working capital in 3Q 2015. Rotation days during
4Q 2015 decreased to 50 days as compared to 54 days in 3Q 2015.
Other operating activities in 4Q 2015 for $900 million primarily
included the reversal of the non-cash impairments and losses recorded on the company’s investments and unrealized foreign
exchange losses. Other operating activities in 4Q 2014 was $889 million (including the reversal of non-cash items related to unrealized
forex losses, income tax accruals, impairment on China Oriental partially offset by reversals of gains from disposal of Gallatin
and Kuzbass).
Net cash used in investing activities during 4Q 2015 was $646
million as compared to $649 million in 3Q 2015 and $492 million in 4Q 2014.
Capital expenditure increased to $736 million in 4Q 2015 as
compared to $684 million in 3Q 2015, but was lower as compared to $1,067 million in 4Q 2014. FY 2015 capital expenditure was $2.7
billion which was significantly lower than $3.7 billion for FY 2014.
Cash flow from other investing activities in 4Q 2015 of $90
million primarily consisted of proceeds from the partial disposal of the Company’s stake in Stalprodukt and disposal of tangible
assets. Cash flow from other investing activities in 3Q 2015 of $35 million primarily includes proceeds from the Gerdau share swapiii
and sale of tangible assets offset by a $39 million outflow relating to the final instalment of the acquisition price of
an additional 11% stake in Ostrava acquired in 2009. Cash flow from other investing activities in 4Q 2014 of $575 million primarily
included the cash inflow from the divesture of Gallatin for $389 million and a $108 million inflow from the exercise of the 3rd
put option on Hunan Valin sharesx
and proceeds from the sale of tangible assets.
Net cash used in financing activities for 4Q 2015 was $367 million
as compared to $835 million in 3Q 2015 and $1,926 million for 4Q 2014. Net cash used in financing activities in 4Q 2015 primarily
included the early redemption of the $500 million 3.75% notes due March 2016. Net cash used in financing activities in 3Q 2015
primarily included debt repayment of a $1 billion loan partially offset by issuance of CHF 225 million 2.50% Notes due July 3,
2020, under ArcelorMittal’s Euro Medium Term Notes Programme. Net cash used in financing activities for 4Q 2014 primarily
included debt repayment totalling $1.25 billion of the 9.0% Notes due February 15, 2015 ($750 million) and 3.750% Notes due February
25, 2015 ($500 million) prior to their scheduled maturity and €360 million bond repayment.
During 4Q 2015, the Company paid $11 million in dividends primarily
to minority shareholders in Brazil (Bekaert). During 3Q 2015, the Company paid $21 million in dividends primarily to minority shareholders
in ArcelorMittal Mines Canada. During 4Q 2014, the Company paid $15 million in dividends primarily to minority shareholders in
Brazil (Bekaert).
At December 31, 2015, the Company’s cash and cash equivalents
(including restricted cash and short-term investments) amounted to $4.1 billion as compared to $3.6 billion at September 30, 2015.
Gross debt of $19.8 billion at December 31, 2015, decreased
from $20.4 billion at September 30, 2015 and was lower than $19.9 billion at December 31, 2014.
As of December 31, 2015, net debt decreased to $15.7 billion
as compared with $16.8 billion in September 30, 2015, and lower as compared to $15.8 billion as December 31, 2014.
The Company had liquidity of $10.1 billion at December 31, 2015,
consisting of cash and cash equivalents (including restricted cash and short-term investments) of $4.1 billion and $6.0 billion
of available credit lines. The $6 billion credit facility contains a financial covenant of 4.25x Net debt / EBITDA. On December
31, 2015, the average debt maturity was 6.2 years.
3-year $3 billion management gains program
During the investor day held on March 15, 2013, the Company
announced a management gains improvement target of $3 billion by the end of 2015. Action plans and detailed targets had been set
at the various business units targeting cost savings related to reliability, fuel rate, yield and productivity with two thirds
of costs targeted being variable costs. The Company has achieved its $3 billion target of annualized cost improvement by the end
of 2015.
Key recent developments
| · | ArcelorMittal today announces it has sold its 35%
stake in Gestamp Automoción ("Gestamp") to the majority shareholder, the Riberas family, for a total cash consideration
of €875 million. The transaction is unconditional and payment is expected to be made to ArcelorMittal within six months.
In addition to the cash consideration, ArcelorMittal will receive a payment of €10 million as a 2015 dividendxi.
ArcelorMittal will continue its supply relationship with Gestamp through its 35% shareholding in Gonvarri, a sister company of
Gestamp. ArcelorMittal |
sells coils to Gonvarri for processing before they
pass to Gestamp and other customers. Further, ArcelorMittal will continue to have a board presence in Gestamp, collaborate in automotive
R&D and remain its major steel supplier.
| · | On January 15, 2016, ArcelorMittal South Africa closed
a rights offering. The total cash proceeds amounted to R4.5 billion. ArcelorMittal subscribed to the capital increase through repayment
of an outstanding intragroup loan of R3.2 billion and an additional cash injection of approximately R 460 million. The intragroup
loan is being repaid in two tranches; the first has been repaid and the second is expected to be paid in 2016. As a result of the
rights issue, ArcelorMittal’s shareholding in ArcelorMittal South Africa increased from 52% to 71%. |
| · | On January 13, 2016, ArcelorMittal announced the issue of 137,967,116 new ordinary shares of the Company upon conversion of
the 88,182,131 outstanding 6% Mandatorily Convertible Subordinated Notes due January 15, 2016. Following this issuance, the share
capital of the Company amounts to EUR 7,453,441,006.98 represented by 1,803,359,338 Shares. For the 1,817,869 Notes previously
converted at the option of their holders, the Company has delivered a total of 2,275,026 treasury shares. The debt/equity
ratio and earnings per share of the Company remain unchanged following such conversion since the Notes qualified as equity under
IFRS. The retirement of the mandatory convertible note will generate cash interest savings of $0.1 billion in 2016. |
| · | On December 16, 2015, ArcelorMittal announced that Lou Schorsch, 66, senior executive vice president, member of the Group Management
Board and CEO of ArcelorMittal Americas will retire from the company, effective end of February 2016. Mr Schorsch joined the company
in 2003 as CEO of Ispat Inland. Going forward it has been decided to structure the Americas business with dedicated leadership
for four distinct business areas. |
ArcelorMittal will also take the opportunity to simplify
the management structure in-line with the ongoing drive to promote a performance-driven culture, empowering the segments to deliver
optimum business results. As a result the Group Management Board, which was established to ensure a smooth integration following
the creation of ArcelorMittal, will be replaced with a more flexible structure. The CEO office - comprising the CEO and CFO - will
work directly with a team of seven executive officers, who collectively encompass the key regions and corporate functions.
The executive officers are as follows:
Senior executive vice president | |
Davinder Chugh | |
Senior executive vice president, CEO of Africa and the CIS |
Executive vice president | |
Brian Aranha | |
Head of strategy, CTO, R&D, CCM and global automotive |
Executive vice president | |
Jim Baske | |
CEO ArcelorMittal Nafta Flat Rolled |
Executive vice president | |
Henri Blaffart | |
Group head of HR and corporate services |
Executive vice president | |
Jefferson de Paula | |
CEO of ArcelorMittal South America Long |
Executive vice president | |
Geert van Poelvoorde | |
CEO of ArcelorMittal Europe Flat |
Executive vice president | |
Simon Wandke | |
CEO of ArcelorMittal Mining |
·
On November 23, 2015, ArcelorMittal announced the
extension of the conversion date for the $1 billion privately placed mandatory convertible bond (MCB) issued on December 28, 2009
by one of its wholly-owned Luxembourg subsidiaries. This amendment to the MCB, which is mandatorily convertible into preferred
shares of such subsidiary, was executed on November 20, 2015. The mandatory conversion date of the bond has been extended to January
31, 2018. The other main features of the MCB remain unchanged. The bond was placed privately with a Luxembourg affiliate of Credit
Agricole Corporate and Investment Bank and is not listed.
Outlook and guidance
According to ArcelorMittal’s estimates, global apparent
steel consumption (“ASC”) declined by 2.2% in 2015 as compared to 2014. ArcelorMittal expects stabilization in 2016.
By region: Driven by a significant destock, ASC in the US declined by 9.6% in 2015. However, underlying demand continues to expand
and due to the expected absence of a further destock in 2016, ASC in the US is expected grow by +3% to 4% above 2015 levels, despite
an expected further decline in Oil Country Tubular Goods demand. ArcelorMittal expects the pick-up in underlying European demand
to continue but apparent demand is expected to be modest at +0% to +1% in 2016 (versus growth of 3.4% in 2015) as the high level
of imports in 4Q 2015 have raised inventory levels particularly in Southern Europe. Despite declining 15.6% in 2015, Brazil ASC
is expected to decline further, albeit slower at -6% to -7% in 2016 as the economy remains mired in recession. With the ongoing
recession in Russia impacted by weak oil prices, CIS demand is expected to decline -5% to -6% (versus a decline of 8.0% in 2015).
In China, we expect ongoing weakness in the real estate sector to have a negative impact, and expect steel demand decline of around
-1% (from -4.3% decline in 2015).
As indicated at 3Q 2015 results, a combination of Company actions
and known developments is expected to support EBITDA in 2016 by $1.0 billion relative to the 4Q 2015 annual run-rate level. Due
to order book and the time lag required for lower raw material costs to positively impact cost of sales, EBITDA is expected to
sequentially decline in 1Q 2016. Based on the assumption of prevailing raw material costs and spot steel spreads, the Company expects
FY 2016 EBITDA to be in excess of $4.5 billion. This guidance does not capture any upside to current market conditions.
The Company also targets reducing the cash requirements of the
business in 2016 in excess of $1 billion as compared to 2015. The components of this reduction are: lower capex spend (FY 2016
capex is expected to be approximately $2.4 billion as compared to $2.7 billion in FY 2015), lower interest expenses (FY 2016 net
interest is expected to be approximately $1.1 billion as compared to $1.3 billion in FY 2015); no dividend in respect of the 2015
financial year; and lower cash taxes.
As a result, the level of EBITDA required for free cash flow
breakeven would reduce to $4.5 billion, thus helping to ensure that the Company continues to generate positive free cash flow,
reduce net debt and maintain strong liquidity.
ArcelorMittal Condensed Consolidated Statements
of Financial Positioni
|
|
|
Dec 31, |
Sep 30, |
Dec 31, |
In millions of U.S. dollars |
|
|
2015 |
2015 |
2014 |
ASSETS |
|
|
|
|
|
Cash and cash equivalents including restricted cash |
|
|
4,102 |
3,636 |
4,016 |
Trade accounts receivable and other |
|
|
2,679 |
3,687 |
3,696 |
Inventories |
|
|
13,424 |
14,352 |
17,304 |
Prepaid expenses and other current assets |
|
|
1,859 |
2,046 |
2,627 |
Assets held for salexii |
|
|
262 |
44 |
414 |
Total Current Assets |
|
|
22,326 |
23,765 |
28,057 |
|
|
|
|
|
|
Goodwill and intangible assets |
|
|
5,592 |
6,779 |
8,104 |
Property, plant and equipment |
|
|
35,780 |
40,480 |
46,593 |
Investments in associates and joint ventures |
|
|
4,911 |
5,472 |
5,833 |
Deferred tax assets |
|
|
6,625 |
7,193 |
7,962 |
Other assets |
|
|
1,612 |
1,901 |
2,630 |
Total Assets |
|
|
76,846 |
85,590 |
99,179 |
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
Short-term debt and current portion of long-term debt |
|
|
2,308 |
2,455 |
2,522 |
Trade accounts payable and other |
|
|
8,977 |
9,455 |
11,450 |
Accrued expenses and other current liabilities |
|
|
6,536 |
5,754 |
6,994 |
Liabilities held for salexii |
|
|
220 |
37 |
157 |
Total Current Liabilities |
|
|
18,041 |
17,701 |
21,123 |
|
|
|
|
|
|
Long-term debt, net of current portion |
|
|
17,478 |
17,932 |
17,275 |
Deferred tax liabilities |
|
|
2,496 |
2,417 |
3,004 |
Other long-term liabilities |
|
|
11,261 |
11,481 |
12,617 |
Total Liabilities |
|
|
49,276 |
49,531 |
54,019 |
|
|
|
|
|
|
Equity attributable to the equity holders of the parent |
|
|
25,272 |
33,275 |
42,086 |
Non–controlling interests |
|
|
2,298 |
2,784 |
3,074 |
Total Equity |
|
|
27,570 |
36,059 |
45,160 |
Total Liabilities and Shareholders’ Equity |
|
|
76,846 |
85,590 |
99,179 |
ArcelorMittal Condensed Consolidated Statement
of Operationsi
In millions of U.S. dollars unless otherwise shown |
Three months ended |
Twelve months ended |
|
Dec 31,
2015 |
Sept 30,
2015 |
Dec 31,
2014 |
Dec 31 ,
2015 |
Dec 31,
2014 |
Sales |
13,981 |
15,589 |
18,723 |
63,578 |
79,282 |
Depreciation |
(807) |
(777) |
(982) |
(3,192) |
(3,939) |
Impairment |
(4,718) |
(27) |
(264) |
(4,764) |
(264) |
Exceptional charges |
(909) |
(527) |
- |
(1,436) |
- |
Operating (loss) / income |
(5,331) |
20 |
569 |
(4,161) |
3,034 |
Operating margin % |
(38.1%) |
0.1% |
3.0% |
(6.5%) |
3.8% |
|
|
|
|
|
|
(Loss) / income from associates, joint ventures and other investments |
(655) |
30 |
(380) |
(502) |
(172) |
Net interest expense |
(312) |
(318) |
(322) |
(1,278) |
(1,469) |
Foreign exchange and other net financing loss |
(342) |
(409) |
(549) |
(1,580) |
(1,913) |
Loss before taxes and non-controlling interests |
(6,640) |
(677) |
(682) |
(7,521) |
(520) |
Current tax |
(39) |
(113) |
(155) |
(331) |
(544) |
Deferred tax |
(402) |
(14) |
(103) |
(571) |
90 |
Income tax expense |
(441) |
(127) |
(258) |
(902) |
(454) |
Loss including non-controlling interests |
(7,081) |
(804) |
(940) |
(8,423) |
(974) |
Non-controlling interests |
395 |
93 |
(15) |
477 |
(112) |
Net loss attributable to equity holders of the parent |
(6,686) |
(711) |
(955) |
(7,946) |
(1,086) |
|
|
|
|
|
|
Basic loss per common share ($) |
(3.72) |
(0.40) |
(0.53) |
(4.43) |
(0.61) |
Diluted loss per common share ($) |
(3.72) |
(0.40) |
(0.53) |
(4.43) |
(0.61) |
|
|
|
|
|
|
Weighted average common shares outstanding (in millions) |
1,795 |
1,796 |
1,793 |
1,795 |
1,791 |
Adjusted diluted weighted average common shares outstanding (in millions) |
1,795 |
1,796 |
1,793 |
1,795 |
1,791 |
|
|
|
|
|
|
EBITDA |
1,103 |
1,351 |
1,815 |
5,231 |
7,237 |
EBITDA Margin % |
7.9% |
8.7% |
9.7% |
8.2% |
9.1% |
|
|
|
|
|
|
OTHER INFORMATION |
|
|
|
|
|
Own iron ore production (million metric tonnes) |
15.5 |
15.4 |
16.7 |
62.8 |
63.9 |
Crude steel production (million metric tonnes) |
21.6 |
23.1 |
23.2 |
92.5 |
93.1 |
Total shipments of steel products (million metric tonnes) |
19.7 |
21.1 |
21.2 |
84.6 |
85.1 |
ArcelorMittal Condensed Consolidated Statements
of Cash flowsi
In millions of U.S. dollars |
Three months ended |
Twelve months ended |
|
Dec 31,
2015 |
Sept 30,
2015 |
Dec 31,
2014 |
Dec 31,
2015 |
Dec 31,
2014 |
Operating activities: |
|
|
|
|
|
Loss attributable to equity holders of the parent |
(6,686) |
(711) |
(955) |
(7,946) |
(1,086) |
Adjustments to reconcile net loss to net cash provided by operations: |
|
|
|
|
|
Non-controlling interest |
(395) |
(93) |
15 |
(477) |
112 |
Depreciation and impairment |
5,525 |
804 |
1,246 |
7,956 |
4,203 |
Exceptional charges |
909 |
527 |
- |
1,436 |
- |
Deferred income tax |
402 |
14 |
103 |
571 |
(90) |
Change in operating working capital |
919 |
(136) |
994 |
(31) |
368 |
Other operating activities (net) |
900 |
68 |
889 |
642 |
363 |
Net cash provided by operating activities |
1,574 |
473 |
2,292 |
2,151 |
3,870 |
Investing activities: |
|
|
|
|
|
Purchase of property, plant and equipment and intangibles |
(736) |
(684) |
(1,067) |
(2,707) |
(3,665) |
Other investing activities (net) |
90 |
35 |
575 |
537 |
588 |
Net cash used in investing activities |
(646) |
(649) |
(492) |
(2,170) |
(3,077) |
Financing activities: |
|
|
|
|
|
Net (payments) / proceeds relating to payable to banks and long-term debt |
(363) |
(804) |
(1,868) |
808 |
(1,553) |
Dividends paid |
(11) |
(21) |
(15) |
(416) |
(458) |
Payments for subordinated perpetual securities |
- |
- |
- |
- |
(657) |
Disposal / (acquisition) of non-controlling interests |
- |
- |
(17) |
- |
(17) |
Other financing activities (net) |
7 |
(10) |
(26) |
3 |
(65) |
Net cash (used in) / provided by financing activities |
(367) |
(835) |
(1,926) |
395 |
(2,750) |
Net increase / (decrease) in cash and cash equivalents |
561 |
(1,011) |
(126) |
376 |
(1,957) |
Cash and cash equivalents transferred to assets held for sale |
- |
- |
- |
- |
8 |
Effect of exchange rate changes on cash |
(89) |
(70) |
(32) |
(267) |
(230) |
Change in cash and cash equivalents |
472 |
(1,081) |
(158) |
109 |
(2,179) |
Appendix 1: Product shipments by region
(000'kt) |
4Q 15 |
3Q 15 |
4Q 14 |
12M 15 |
12M 14 |
Flat |
3,782 |
4,701 |
4,844 |
17,502 |
18,907 |
Long |
929 |
1,068 |
1,094 |
4,372 |
4,670 |
NAFTA |
4,581 |
5,620 |
5,805 |
21,306 |
23,074 |
Flat |
1,760 |
1,844 |
1,643 |
6,722 |
4,942 |
Long |
1,085 |
1,254 |
1,229 |
4,687 |
5,363 |
Brazil |
2,873 |
3,125 |
2,895 |
11,540 |
10,376 |
Flat |
6,447 |
6,749 |
6,680 |
28,210 |
27,592 |
Long |
2,983 |
2,847 |
2,890 |
12,277 |
11,948 |
Europe |
9,473 |
9,646 |
9,610 |
40,676 |
39,639 |
CIS |
2,160 |
2,013 |
2,099 |
8,346 |
8,578 |
Africa |
917 |
1,207 |
982 |
4,131 |
4,157 |
ACIS |
3,078 |
3,196 |
3,111 |
12,485 |
12,833 |
Note: Others and eliminations line are not presented in the
table
Appendix 2: Capital
expenditures
(USDm) |
4Q 15 |
3Q 15 |
4Q 14 |
12M 15 |
12M 14 |
NAFTA |
120 |
85 |
127 |
392 |
505 |
Brazil |
95 |
98 |
138 |
422 |
497 |
Europe |
320 |
293 |
303 |
1,045 |
1,052 |
ACIS |
81 |
105 |
188 |
365 |
573 |
Mining |
112 |
101 |
290 |
476 |
993 |
Total |
736 |
684 |
1,067 |
2,707 |
3,665 |
Note: Others and eliminations line are
not presented in the table
Appendix 3: Debt repayment schedule as of
December 31, 2015
Debt repayment schedule (USD billion) |
2016 |
2017 |
2018 |
2019 |
2020 |
>2020 |
Total |
Bonds |
1.1 |
2.5 |
2.5 |
2.3 |
2.4 |
6.9 |
17.7 |
LT revolving credit lines |
|
|
|
|
|
|
|
- $2.5bn tranche of $6bn revolving credit facility |
- |
- |
- |
- |
- |
- |
- |
- $3.5bn tranche of $6bn revolving credit facility |
- |
- |
- |
- |
- |
- |
- |
Commercial paper |
0.1 |
- |
- |
- |
- |
- |
0.1 |
Other loans |
1.1 |
0.2 |
0.1 |
0.2 |
0.1 |
0.3 |
2.0 |
Total gross debt |
2.3 |
2.7 |
2.6 |
2.5 |
2.5 |
7.2 |
19.8 |
Appendix 4: Credit lines available as of
December 31, 2015
Credit lines available (USD billion) |
|
|
Maturity |
Commitment |
Drawn |
Available |
- $2.5bn tranche of $6bn revolving credit facility |
|
|
30/04/2018 |
2.5 |
0.0 |
2.5 |
- $3.5bn tranche of $6bn revolving credit facility |
|
|
30/04/2020 |
3.5 |
0.0 |
3.5 |
Total committed lines |
|
|
|
6.0 |
0.0 |
6.0 |
Appendix 5: Reconciliation of net loss to
adjusted net (loss) / income
(USDm) |
4Q 15 |
3Q 15 |
4Q 14 |
12M 15 |
12M 14 |
Net loss |
(6,686) |
(711) |
(955) |
(7,946) |
(1,086) |
Adjustments: |
|
|
|
|
|
Onerous contract provision in US (NAFTA) |
- |
- |
(76) |
(69) |
(76) |
Gain on disposal of Kuzbass mines in Russia (Mining) |
- |
- |
79 |
- |
79 |
US antitrust litigation (NAFTA) |
- |
- |
- |
- |
(90) |
Impairment |
(4,718) |
(27) |
(264) |
(4,764) |
(264) |
Exceptional charges |
(909) |
(527) |
- |
(1,436) |
- |
Loss from associates, joint ventures and other investments (impairments/disposal gains) |
(608) |
43 |
(428) |
(565) |
(428) |
Foreign exchange and other financial charges* |
(104) |
(170) |
(316) |
(697) |
(781) |
Deferred tax benefit / (expense) |
(402) |
(14) |
(103) |
(571) |
90 |
Adjustment of non-controlling interests (mainly impairments and exceptional charges) |
430 |
47 |
11 |
477 |
11 |
Adjusted net (loss) / income |
(375) |
(63) |
142 |
(321) |
373 |
* Adjustment of foreign exchanges net charges and other financials
charges for 12M 2015 of $697 million as described earlier in the analysis of results. Adjustment of foreign exchanges net charges
and other financials charges of 12M 2014 also includes the charges related to the federal tax amnesty plan in Brazil linked with
the Siderbras casevi.
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:
LTIF: Lost time injury frequency rate equals
lost time injuries per 1,000,000 worked hours, based on own personnel and contractors.
EBITDA: operating income plus depreciation,
impairment expenses and exceptional items.
Free cash flow: net cash provided by operating activities
less purchases of property, plant and equipment and intangibles.
Net debt: long-term debt, plus short term debt, less
cash and cash equivalents, restricted cash and short-term investments (including those held as part of assets/liabilities held
for sale).
Gross debt: long-term debt, plus short term debt, plus
cash and cash equivalents, restricted cash and short-term investments (including those held as part of assets/liabilities held
for sale).
Market priced tonnes: represent amounts of iron ore and
coal from ArcelorMittal mines that could be sold to third parties on the open market. Market priced tonnes that are not sold to
third parties are transferred from the Mining segment to the Company’s steel producing segments and reported at the prevailing
market price. Shipments of raw materials that do not constitute market priced tonnes are transferred internally and reported on
a cost-plus basis.
Foreign exchange and other net financing costs: include
foreign currency swaps, bank fees, interest on pensions, impairments of financial instruments and revaluation of derivative instruments,
and other charges that cannot be directly linked to operating results.
Average steel selling prices: calculated as steel sales
divided by steel shipments.
Mining segment sales: i) “External sales”:
mined product sold to third parties at market price; ii) “Market-priced tonnes”: internal sales of mined product to
ArcelorMittal facilities and reported at prevailing market prices; iii) “Cost-plus tonnes” - internal sales of mined
product to ArcelorMittal facilities on a cost-plus basis. The determinant of whether internal sales are reported at market price
or cost-plus is whether the raw material could practically be sold to third parties (i.e. there is a potential market for the product
and logistics exist to access that market).
Rotation days: days of accounts receivable plus days
of inventory minus days of accounts payable. Days of accounts payable and inventory are a function of cost of goods sold of the
quarter on an annualized basis. Days of accounts receivable are a function of sales of the quarter on an annualized basis.
Operating working capital: trade accounts receivable
plus inventories less trade accounts payable.
Capex: includes the acquisition of intangible assets
(such as concessions for mining and IT support) and includes payments to fixed asset suppliers.
Seaborne iron ore reference prices: refers to iron ore
prices for 62% Fe CFR China.
Own iron ore production: Includes total of all finished
production of fines, concentrate, pellets and lumps (excludes share of production and strategic long-term contracts).
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.
EBITDA/tonne: calculated as EBITDA divided
by total steel shipments.
Steel-only EBITDA: calculated as EBITDA less
Mining segment EBITDA.
Steel-only EBITDA/tonne: calculated as steel-only
EBITDA divided by total steel shipments.
Iron ore unit cash cost: includes weighted average pellet
and concentrate cost of goods sold across all mines.
Liquidity: includes back-up lines for the commercial
paper program.
Shipments information at the Group level was previously
based on a simple aggregation, eliminating intra-segment shipments and excluding shipments of the Distribution Solutions segment.
The new presentation of shipments information eliminates both inter- and intra–segment shipments which are primarily
between Flat/Long plants and Tubular plants and continues to exclude the shipments of Distribution Solutions.
Operating segments: The NAFTA segment includes the Flat,
Long and Tubular operations of USA, Canada and Mexico. The Brazil segment includes the Flat operations of Brazil, and the Long
and Tubular operations of Brazil and its neighboring countries including Argentina, Costa Rica, Trinidad and Tobago and Venezuela.
The Europe segment comprises the Flat, Long and Tubular operations of the European business, as well as Distribution Solution (AMDS).
The ACIS division includes the Flat, Long and Tubular operations of Kazakhstan, Ukraine and South Africa.
YoY: Refers to year-on-year
Fortifom®: The family of Fortiform®
steels extends ArcelorMittal's range of Ultra High Strength Steels (UHSS). These steels allow the realization of lightweight structural
elements by a cold forming method such as stamping. These Ultra High Strength Steels of third generation are used to provide additional
weight reduction thanks to their higher mechanical properties than conventional Advanced High Strength Steels (AHSS) while keeping
the same formability.
i 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”). The interim financial information included in this announcement
has been also 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 Standards 34, “Interim Financial
Reporting”. The numbers in this press release have not been audited. The financial information and certain other information
presented in a number of tables in this press release have been rounded to the nearest whole number or the nearest decimal. Therefore,
the sum of the numbers in a column may not conform exactly to the total figure given for that column. In addition, certain percentages
presented in the tables in this press release reflect calculations based upon the underlying information prior to rounding and,
accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the
rounded numbers. This press release also includes certain non-GAAP financial measures.
ii The exceptional charge of $909 million
in 4Q 2015 relates to write-down of inventory following the rapid decline of international steel prices. The Company tested the
recoverability of its inventories by comparing the production cost with the estimated selling prices for finished goods. Inventories
under work in progress and raw materials were similarly tested after estimating the completion costs. Net realizable value is the
estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated costs necessary
to complete the sale. The exceptional charge of $527 million in 3Q 2015 includes $27 million of retrenchment costs in South Africa
as well as $0.5 billion related to such write-down of inventory.
iii On July 14, 2015, ArcelorMittal
entered into a share swap agreement with Gerdau, as part of which ArcelorMittal received preferred shares of Gerdau and a cash
consideration of $28 million in exchange for unlisted Gerdau shares. The share swap resulted in a gain of $55 million from equity
method investments and other investments.
iv Kazakhstan devalued its currency
(the tenge) by abandoning a peg to the US dollar.
v In 3Q 2013, ArcelorMittal impaired
the entire amount of the investment that it had made up to September 30, 2013 in connection with a 2007 agreement with the State
of Senegal regarding a mining and infrastructure project, as it viewed project implementation to be improbable in light of an ongoing
arbitration proceeding. The parties subsequently agreed to settle the dispute and on December 12, 2014, the arbitral tribunal issued
a procedural order formally closing the arbitration.
vi ArcelorMittal Brasil S.A (as a successor
of Companhia Siderurgica Tubarao) was party to a legal dispute against Siderbras (an extinguished holding company held by the Government
of Brazil) related to financial debt issued in 1992. In July 2014, the judge in charge requested to replace the guarantee, which
was securing the litigation, with cash so that an appeal of the case could proceed. ArcelorMittal Brasil S.A entered into a federal
amnesty program with the Brazilian tax authorities to settle the debt with Siderbras (application made in August 2014). The payment
under the program was $161 million (original debt $259 million including interest and penalties) and recorded as a financial expense.
Of this amount, $116 million was paid by way of set-off of tax losses and the remaining balance paid in cash. This tax amnesty
program entered into by the Company with the Brazilian tax authorities is only in relation to the Siderbras matter and does not
have any effect or otherwise impact the Company’s other outstanding disputes with the Brazilian tax authorities, which have
been previously disclosed.
vii Effective from January 1, 2015,
the functional currency of Kryvyi Rih was changed to the Ukrainian Hryvnia and the functional currency of Temirtau was changed
to the Kazakhstan tenge due to changes in the regulatory and economic environment and transaction currencies of the operations.
viii Under the draft amended agreement,
between Sishen Iron ore Company Pty) Ltd and ArcelorMittal South Africa the latter will pay market price (EPP) for iron ore and
will therefore no longer contribute towards stripping costs. Accordingly at December 31, 2015, the “deferred stripping pre-payment
asset” was derecognised and written off through profit and loss.
ix As reported in prior periods, and
dating back to 2007, the Competition Commission (“the Commission”) has referred five cases to the Competition Tribunal
and is formally investigating one further complaint against ArcelorMittal South Africa. The Company has since engaged with the
Commission and has made significant progress regarding a possible overall settlement and is in the process of finalizing a detailed
settlement agreement. Whilst the draft settlement agreement is still subject to final approval by the Commission and the Competition
Tribunal, a provision of R1,245 million representing the present value of a proposed administrative penalty of R1,500 million has
been recognized. The Company has, subject to certain conditions being agreed upon with the Commission, proposed to pay the administrative
penalty over a period of 5 years subject to appropriate interest.
x Following the sale of a 5% stake
to Valin Group as a result of the exercise of the third put option on February 2014, the Company’s interest in Hunan Valin
decreased from 20% to 15%. On August 6, 2014, the Company exercised the fourth and final instalment, which subsequently led to
the decrease in its stake in Hunan Valin from 15% to 10%. The Company received cash from the third and fourth instalment of $108
million both in the fourth quarter of 2014 and first quarter of 2015, respectively.
xiFollowing the sale of Gestamp, the
future income from associates, joint ventures and other investments will be reduced by approximately $50 million and the future
dividend income will reduce by approximately $15 million (based on the average income and dividends derived from Gestamp over the
past two years).
xii Assets and liabilities held for
sale as of December 31, 2015 include the carrying value of ArcelorMittal Algeria (investment stake of 49%), ArcelorMittal Tebessa
(investment stake of 49%), ArcelorMittal Pipes and Tubes Algeria (70% control), the USA long product facilities at Steelton, Vinton
and ArcelorMittal LaPlace and some activities of ArcelorMittal downstream solutions in the Europe segment. Assets and liabilities
held for sale as of September 30, 2015 include the carrying value of investments representing our stakes in ArcelorMittal Algeria
(49%), ArcelorMittal Tebessa (49%) and ArcelorMittal Pipes and Tubes Algeria (70%) and include Coza mining assets in South Africa.
Assets and liabilities held for sale as of December 31, 2014 included assets and liabilities held for sale related to distribution
centers in Europe and the disposal of tangible assets.
ArcelorMittal sells
its 35% stake in Gestamp Automoción for €875m
5 February 2016
ArcelorMittal today announces it has sold
its 35% stake in Gestamp Automoción ("Gestamp") to the majority shareholder, the Riberas family, for a total cash
consideration of €875m. The transaction is unconditional and payment is expected to be made to ArcelorMittal within six months.
In addition to the cash consideration, ArcelorMittal will receive a payment of €10m as a 2015 dividend.
ArcelorMittal entered into a joint venture
with the Riberas family in 1998 with the intent of developing, through Gestamp, the business of stamping, assembly and welded blanks
for automotive original equipment manufacturers (OEMs). Over the years, Gestamp has established itself as a global market leader
in the design and manufacture of metal components and assemblies for sale to automotive OEMs, with a leadership position in hot-stamped
technology. Gestamp now operates 95 plants located in 20 countries, supplying body-in-white, chassis structures, opening systems
and mechanisms to all the major car manufacturers from Europe, the Americas and Asia.
ArcelorMittal will continue its supply
relationship with Gestamp through its 35% shareholding in Gonvarri, a sister company of Gestamp. ArcelorMittal sells coils to Gonvarri
for processing before they pass to Gestamp and other customers. Further, ArcelorMittal will continue to have a board presence in
Gestamp, collaborate in automotive R&D and remain its major steel supplier.
Aditya Mittal, CEO of ArcelorMittal Europe
and group CFO, said: "The sale of our stake in Gestamp unlocks substantial value for ArcelorMittal’s shareholders and
is consistent with our stated strategy of portfolio optimisation. Most importantly, our major supplier relationship with Gonvarri
and Gestamp is unaffected by this transaction and we will continue to work together to supply automotive OEMs with world-class
automotive steel products."
Francisco J. Riberas, president and CEO
of Gestamp, said: “Our commitment to growth and market leadership is part of our DNA and we have been proud to have ArcelorMittal
as a loyal and reliable partner in this long-term endeavour. Looking ahead, Gestamp and Gonvarri will continue their strategic
relationship with ArcelorMittal in our common interest”.
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