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 July 31, 2015
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 July 31, 2015, ArcelorMittal
issued the press releases attached hereto as Exhibit 99.1 and 99.2 hereby incorporated by reference into this report on Form 6-K.
Exhibit List
Exhibit No. |
Description |
Exhibit 99.1
|
Press release dated July 31, 2015, announcing that ArcelorMittal
has reported second quarter and half year 2015 results.
|
Exhibit 99.2 |
Press release dated July 31, 2015, announcing that AcerlorMittal
Europe has reported operating profit of €352 million for Q2 2015. |
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: July 31, 2015
By: /s/
Henk Scheffer
Exhibit Index
Exhibit No. |
Description |
Exhibit 99.1
|
Press release dated July 31, 2015, announcing that ArcelorMittal
has reported second quarter and half year 2015 results.
|
Exhibit 99.2 |
Press release dated July 31, 2015, announcing that AcerlorMittal
Europe has reported operating profit of €352 million for Q2 2015. |
ArcelorMittal reports second quarter 2015 and
half year 2015 results
Luxembourg, July 31, 2015 - ArcelorMittal (referred to as “ArcelorMittal”
or the “Company”) (MT (New York, Amsterdam, Paris, Luxembourg), MTS (Madrid)), the world’s leading integrated
steel and mining company, today announced results1 for the three and six month periods ended June 30, 2015.
Highlights:
| § | Health and safety: LTIF rate of 0.68x
in 2Q 2015, lower as compared to 0.88x in 1Q 2015 and 0.87x in 2Q 2014 |
| § | EBITDA of $1.4 billion in 2Q 2015, stable as compared
to 1Q 20152 |
| § | Net income of $0.2 billion in 2Q 2015 as compared
to a net loss of $0.7 billion in 1Q 2015 |
| § | Steel shipments of 22.2Mt in 2Q 2015, an increase
of 3.4% YoY |
| § | 16.4Mt own iron ore production as compared to 16.6Mt
in 2Q 2014; 10.8Mt shipped and reported at market prices, an increase of 2.7% as compared to 10.5Mt in 2Q 2014 |
| § | Iron ore unit cash costs reduced by 14% YoY; FY 2015
cost reduction target at 15% |
| § | Net debt of $16.6 billion as of June 30, 2015, stable
as compared to March 31, 2015 mainly due to positive free cash flow of $0.5 billion offset by negative forex ($0.2 billion) and
dividends ($0.3 billion); Net debt lower by $0.9 billion YoY |
Key developments:
| § | Record health and safety LTIF performance in 2Q 2015 |
| § | Record 7Mt iron ore shipped from flagship AMMC operations
in Canada during 2Q 2015 |
| § | MOU signed with Sail for India automotive steel joint
venture |
| § | Investment approved to increase HRC and HDG capacity
in Krakow, Poland |
| § | Signed intention to construct Europe’s first-ever
commercial scale production facility at Ghent, Belgium to create bioethanol from waste gases produced during the steelmaking process |
Outlook
and guidance:
| § | The Company’s guidance remains unchanged and
continues to expect: 2015 EBITDA within the range of $6.0 - $7.0 billion; 2015 capital expenditures of approximately $3.0 billion;
and 2015 net interest expense of approximately $1.4 billion |
| § | The Company continues to expect positive free cash
flow in 2015 and to achieve progress toward the medium term net debt target of $15 billion |
Financial highlights (on the basis of IFRS1):
(USDm) unless otherwise shown |
2Q 15 |
1Q 15 |
2Q 14 |
1H 15 |
1H 14 |
Sales |
16,890 |
17,118 |
20,704 |
34,008 |
40,492 |
EBITDA |
1,399 |
1,378 |
1,763 |
2,777 |
3,517 |
Operating income |
579 |
571 |
832 |
1,150 |
1,506 |
Net income / (loss) attributable to equity holders of the parent |
179 |
(728) |
52 |
(549) |
(153) |
Basic income / (loss) per share (US$) |
0.10 |
(0.41) |
0.03 |
(0.31) |
(0.09) |
|
|
|
|
|
|
Own iron ore production (Mt) |
16.4 |
15.6 |
16.6 |
31.9 |
31.4 |
Iron ore shipped at market price (Mt) |
10.8 |
9.4 |
10.5 |
20.1 |
19.8 |
Crude steel production (Mt) |
24.0 |
23.7 |
23.1 |
47.8 |
46.1 |
Steel shipments (Mt) |
22.2 |
21.6 |
21.5 |
43.8 |
42.4 |
EBITDA/tonne (US$/t) |
63 |
64 |
82 |
63 |
83 |
Steel-only EBITDA/tonne (US$/t) |
58 |
59 |
64 |
58 |
64 |
Commenting, Mr. Lakshmi N. Mittal, ArcelorMittal Chairman
and CEO, said:
“Despite continued pressure on both steel and iron-ore prices, we have
delivered a consistent set of operating results compared with the first quarter. Europe continues to be a bright spot, with
EBITDA again improving by 10.5% compared with the first quarter of 2015. Mining has also performed robustly against the backdrop
of a lower iron-ore price, with ArcelorMittal Mines Canada reporting record shipment levels and improved costs. We remain concerned
by the high level of imports. Whilst we are somewhat encouraged by recent actions on potential trade defence measures from
both the US and Europe, we are also taking action to adapt our own business. More positively, even against such a challenging backdrop,
we have delivered a small net income for the second quarter, reduced net debt year on year and we still expect to be cash flow
positive for the year.”
Second quarter 2015 earnings analyst conference
call
ArcelorMittal management will host a conference call
for members of the investment community to discuss the second quarter period ended June 30, 2015 on:
Date |
US Eastern time |
London |
CET |
Friday July 31, 2015 |
9.30am |
2.30pm |
3.30pm |
|
|
|
|
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 |
18485400# |
USA local: |
186 6719 2729 |
+1 24 06450345 |
18485400# |
France: |
0800 9174780 |
+33 17071 2916 |
18485400# |
Germany: |
0800 965 6288 |
+49 692 7134 0801 |
18485400# |
Spain: |
90 099 4930 |
+34 911 143436 |
18485400# |
Luxembourg: |
800 26908 |
+352 27 86 05 07 |
18485400# |
|
|
|
|
A replay of the conference call will be available for one week by dialing: |
Number |
Language |
Access code |
|
+49 (0) 1805 2047 088 |
English |
467409# |
|
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.
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 Annual Report on Form 20-F for the
year ended December 31, 2014 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.
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 0.68x in the second quarter of 2015 (“2Q 2015”) as compared to
0.88x for the first quarter of 2015 (“1Q 2015”) and improved as compared to 0.87x for the second quarter of 2014 (“2Q
2014”). Significant improvement in health and safety performance was made across all segments during 2Q 2015.
Health and safety performance was improved at 0.79x in the first six months
of 2015 (“1H 2015”) as compared to 0.86x for the first six months of 2014 (“1H 2014”), with improvements
within Brazil, Europe and ACIS, offset by deterioration 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.
Own personnel and contractors - Frequency rate
Lost time injury frequency rate |
2Q 15 |
1Q 15 |
2Q 14 |
1H 15 |
1H 14 |
Mining |
0.57 |
0.60 |
0.84 |
0.59 |
0.54 |
|
|
|
|
|
|
NAFTA |
0.71 |
1.13 |
0.88 |
0.97 |
0.95 |
Brazil |
0.42 |
0.71 |
0.47 |
0.59 |
0.72 |
Europe |
0.97 |
1.15 |
1.25 |
1.05 |
1.23 |
ACIS |
0.39 |
0.56 |
0.51 |
0.47 |
0.51 |
Total Steel |
0.69 |
0.93 |
0.87 |
0.82 |
0.92 |
|
|
|
|
|
|
Total (Steel and Mining) |
0.68 |
0.88 |
0.87 |
0.79 |
0.86 |
Key corporate responsibility highlights for 2Q 2015:
| · | ArcelorMittal retained its listing in the FTSE4GOOD. ArcelorMittal is proud to
have been a member of the FTSE4Good Index since 2007 and continuously uses the series as a reference standard. |
| · | ArcelorMittal joined IDH multi-stakeholder working group on sustainable tin production
in Indonesia, demonstrating commitment to improving the economic, social and environmental sustainability of tin in its supply
chain. |
| · | Local corporate responsibility reports published in Brazil, Belgium, Luxembourg,
Germany and the USA highlighting operations’ sustainability achievements. |
Analysis of results for the
six months ended June 30, 2015 versus results for the six months ended June 30, 2014
Total steel shipments for 1H 2015 were 3.2% higher at 43.8 million metric
tonnes as compared with 42.4 million metric tonnes for 1H 2014.
Sales for 1H 2015 decreased by 16% to $34.0 billion as compared with $40.5
billion for 1H 2014, primarily due to lower average steel selling prices (-18.1%) and lower seaborne iron ore prices (-46%), offset
in part by higher steel shipments (+3.2%) and marketable iron ore shipments (+1.5%).
Depreciation of $1.6 billion for 1H 2015 was lower as compared to $2.0 billion
for 1H 2014 primarily due to the impact of depreciation of all major currencies (Brazilian real, Euro and Canadian dollar) against
the US dollar. Full year depreciation is expected to be approximately $3.5 billion as compared to $3.9 billion in 2014.
Impairment charges for 1H 2015 were $19 million relating to the closure of
the Georgetown facility in the US, compared to nil in 1H 2014.
Operating income for 1H 2015 was $1.2 billion as compared to $1.5 billion
in 1H 2014. Operating results for 1H 2015 were negatively impacted by a $69 million provision primarily related to onerous hot
rolled and cold rolled contracts in the US (NAFTA). Operating results for 1H 2014 were negatively impacted by a $90 million charge
following the settlement of US antitrust litigation.
Income from investments
in associates, joint ventures and other investments in 1H 2015 was $123 million
as compared to income in 1H 2014 of $154 million. Income from investments in associates, joint ventures and other investments in
1H 2015 and 1H 2014 includes the annual dividend received from Erdemir.
Net interest expense (including interest expense and interest income) was
lower at $648 million in 1H 2015, as compared to $809 million in 1H 2014. The reduction is attributable to both lower gross debt
outstanding and lower average cost. The Company continues to expect full year 2015 net interest expense of approximately $1.4 billion.
Foreign exchange and other net financing costs were $829 million for 1H 2015
as compared to costs of $707 million for 1H 2014. Foreign exchange and other net financing costs for 1H 2015 include foreign exchange
loss of $423 million as compared to a gain of $11 million for 1H 2014, mainly on account of USD appreciation of 7.8% against the
Euro (versus 1.0% appreciation in 1H 2014) and 14.4% appreciation against BRL (versus 6.4% depreciation in 1H 2014). 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. In addition, foreign exchange and other net financing costs for
1H 2014 include a payment following the termination of the Senegal greenfield project3 and non-cash gains and losses
on convertible bonds and hedging instruments which matured during 2Q 2014.
ArcelorMittal recorded an income tax expense of $334 million for 1H 2015 as
compared to an income tax expense of $217 million for 1H 2014.
Non-controlling interests for 1H 2015 were a charge of $11 million, as compared
to a charge of $80 million for 1H 2014. Non-controlling interests for 1H 2015 and 1H 2014 represent a charge primarily related
to minority shareholders’ share of net income recorded in ArcelorMittal Mines Canada and Belgo Bekaert Arames in Brazil.
ArcelorMittal’s net loss for 1H 2015 was $549 million, or $0.31 loss
per share, as compared to net loss for 1H 2014 of $153 million, or $0.09 loss per share.
Analysis of results for 2Q
2015 versus 1Q 2015 and 2Q 2014
Total steel shipments for 2Q 2015 were 2.7% higher at 22.2 million metric
tonnes as compared with 21.6 million metric tonnes for 1Q 2015, and 3.4% higher as compared to 21.5 million metric tonnes for 2Q
2014.
Sales for 2Q 2015 were $16.9 billion as compared to $17.1 billion for 1Q 2015
and $20.7 billion for 2Q 2014. Sales in 2Q 2015, were 1.3% lower as compared to 1Q 2015 primarily due to lower
average steel selling prices (-5%) and lower iron ore reference prices (-6.4%),
partially offset by higher steel shipments (+2.7%) and seasonally higher market priced iron ore shipments (+15.3%). Sales in 2Q
2015 were 18.4% lower as compared to 2Q 2014 due to lower average steel selling prices (-20.5%) and lower iron ore references prices
(-43%), offset in part by higher steel shipments (+3.4%) and higher market priced iron ore shipments (+2.7%).
Depreciation remained stable at $801 million for 2Q 2015 as compared to $807
million in 1Q 2015, and was lower as compared to $931 million for 2Q 2014, primarily on account of foreign exchange impact due
to depreciation of all major currencies (Brazilian real, Euro and Canadian dollar) against the US dollar.
Impairment charges for 2Q 2015 were $19 million relating to the closure of
the Georgetown facility in the US, compared to nil in both 1Q 2015 and 2Q 2014.
Operating income for 2Q 2015 was $579 million, as compared to $571 million
in 1Q 2015 and $832 million in 2Q 2014. Operating results for 1Q 2015 were negatively impacted by a $69 million provision primarily
related to onerous hot rolled and cold rolled contracts in the US (NAFTA). Operating results for 2Q 2014 included a $90 million
charge following the settlement of US antitrust litigation.
Income from investments in associates, joint ventures and other investments
in 2Q 2015 was $125 million as compared to a loss in 1Q 2015 of $2 million. 2Q 2015 includes the annual dividend received from
Erdemir and improved performance by Spanish investees. 1Q 2015 was negatively impacted by foreign exchange effects on various investees.
Income from investments, associates, joint ventures and other investments in 2Q 2014 of $118 million mainly included the annual
dividend received from Erdemir.
Net interest expense (including interest expense and interest income) in 2Q
2015 was stable at $325 million as compared to $323 million in 1Q 2015, and lower as compared to $383 million in 2Q 2014.
Foreign exchange and other net financing costs were $73 million for 2Q 2015
as compared to $756 million for 1Q 2015 and $327 million for 2Q 2014. Foreign exchange and other net financing costs for 2Q 2015
include a foreign exchange gain of $115 million as compared to a loss of $538 million for 1Q 2015 mainly on account of USD depreciation
of 4% against the Euro (versus 11.4% appreciation in 1Q 2015) and 3.4% depreciation against BRL (versus 17.2% appreciation in 1Q
2015). This foreign exchange gain is largely non-cash and primarily relates to the gain from the impact of the USD depreciation
on Euro denominated deferred tax assets, partially offset by foreign exchange loss on euro debt. Foreign exchange and other net
financing costs for 2Q 2014 include non-cash gains and losses on convertible bonds and hedging instruments which matured during
the quarter.
ArcelorMittal recorded income tax expense of $124 million for 2Q 2015, as
compared to an income tax expense of $210 million for 1Q 2015 and income tax expense of $156 million for 2Q 2014.
Non-controlling interests for 2Q 2015 and 1Q 2015 represent a charge primarily
related to minority shareholders’ share of net income recorded in ArcelorMittal Mines Canada and Belgo Bekaert Arames in
Brazil. Non-controlling interest charges for 2Q 2014 primarily related to minority shareholders’ share of net income recorded
in ArcelorMittal Mines Canada, partially offset by losses generated in ArcelorMittal South Africa.
ArcelorMittal recorded net income for 2Q 2015 of $179 million, or $0.10 earnings
per share, as compared to a net loss of $728 million, or $0.41 loss per share for 1Q 2015, and net income of $52 million, or $0.03
earnings per share for 2Q 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 / segment |
Site |
Project |
Capacity / particulars |
Actual completion |
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
|
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
|
Ongoing projects
Segment |
Site |
Project |
Capacity / particulars |
Forecast completion |
NAFTA |
ArcelorMittal Dofasco (Canada) |
Phase 2: Convert the current galvanizing line #4 to a Galvalume line |
Allow the galvaline #4 to produce 160kt for galvalume and 128kt for galvanize |
2016
|
Europe |
ArcelorMittal Krakow (Poland) |
HRM extension |
Increase HRC capacity by 0.9mt/ year |
2016 |
|
|
HDG increase |
Increasing HDG capacity by 0.4mt/ year |
2016
|
Brazil |
Acindar (Argentina) |
New rolling mill |
Increase in rolling capacity by 0.4mt / year for bars for civil construction |
2016 |
Mining |
Liberia |
Phase 2 expansion project |
Increase production capacity to 15mt/ year (high grade sinter feed) |
Initial forecast of 2015 / Currently delayed(a) |
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 |
Monlevade (Brazil) |
Wire rod production expansion |
Increase in capacity of finished products by 1.1mt / year |
On hold(b) |
|
Juiz de Fora (Brazil) |
Meltshop expansion |
Increase in meltshop capacity by 0.2mt / year |
On hold(b)
|
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 |
Joint venture projects
Region |
Site |
Project |
Capacity / particulars |
Forecast completion |
Canada |
Baffinland |
Early revenue phase |
Production capacity 3.5mt/ year (iron ore) |
2H 2015 |
USA |
AM/NS Calvert |
Slab yard expansion |
Increase coil production level up to 5.3mt/year coils. |
2H 2016 |
| a) | The Liberia phase 2 project to invest $1.7 billion to construct 15 million tonnes
of concentrate capacity and associated infrastructure has been delayed. This follows the contractor’s declaration of force
majeure on August 8, 2014 due to the Ebola virus outbreak in West Africa. Given the project delays and recent deterioration of
iron ore prices, the Company is assessing its options to progress with this project. ArcelorMittal remains fully committed to Liberia.
Phase 1 operations are continuing as normal at this time and to date have not been affected by the Ebola situation in Liberia.
|
| b) | Though the Monlevade wire rod expansion project and Juiz de Fora meltshop expansion
are expected to be completed in 2H 2015 and 2016 respectively, the Company does not expect to increase shipments until domestic
demand improves. |
Analysis of segment operations
NAFTA
(USDm) unless otherwise shown |
2Q 15 |
1Q 15 |
2Q 14 |
1H 15 |
1H 14 |
Sales |
4,545 |
4,777 |
5,423 |
9,322 |
10,351 |
EBITDA |
225 |
53 |
177 |
278 |
436 |
Depreciation |
155 |
156 |
170 |
311 |
359 |
Impairments |
19 |
- |
- |
19 |
- |
Operating income / (loss) |
51 |
(103) |
7 |
(52) |
77 |
|
|
|
|
|
|
Crude steel production (kt) |
5,775 |
5,908 |
6,153 |
11,683 |
12,409 |
Steel shipments (kt) |
5,642 |
5,463 |
5,790 |
11,105 |
11,403 |
Average steel selling price (US$/t) |
726 |
796 |
856 |
760 |
848 |
NAFTA segment crude steel production declined 2.3% to 5.8 million tonnes in
2Q 2015 as compared to 5.9 million tonnes for 1Q 2015.
Steel shipments in 2Q 2015 increased by 3.3% to 5.6 million tonnes as compared
to 1Q 2015, primarily driven by a seasonal 2.3% increase in flat product steel shipments and a 5.1% increase in long product shipment
volumes.
Sales in 2Q 2015 decreased by 4.9% to $4.5 billion as compared to 1Q 2015,
due to lower average steel selling prices (-8.8%) offset in part by higher steel shipments as discussed above. Average steel selling
price for flat products and long products declined –8.8% and –6.9%, respectively.
EBITDA in 2Q 2015 increased to $225 million as compared to $53 million in
1Q 2015. EBITDA for 1Q 2015 was negatively impacted by a $69 million provision primarily related to onerous hot rolled and cold
rolled contracts in the US. EBITDA in 2Q 2015 was higher as compared to 1Q 2015 due to lower costs (including the benefit of inventory
written-down in 1Q 2015) and higher steel shipment volumes, offset in part by lower average steel selling prices.
EBITDA in 2Q 2014 included a $90 million charge following the settlement of
antitrust litigation in the United States and the residual costs resulting from the severe weather disruption in United States
during 1Q 2014. EBITDA in 2Q 2015 improved year-on-year due to non-recurrence of the above mentioned items but was severely impacted
by lower average steel selling prices (-15.2%) and lower steel shipments (-2.6%).
Brazil
(USDm) unless otherwise shown |
2Q 15 |
1Q 15 |
2Q 14 |
1H 15 |
1H 14 |
Sales |
2,167 |
2,119 |
2,431 |
4,286 |
4,787 |
EBITDA |
360 |
377 |
414 |
737 |
839 |
Depreciation |
85 |
86 |
109 |
171 |
247 |
Operating income |
275 |
291 |
305 |
566 |
592 |
|
|
|
|
|
|
Crude steel production (kt) |
2,934 |
2,875 |
2,382 |
5,809 |
4,795 |
Steel shipments (kt) |
2,835 |
2,707 |
2,312 |
5,542 |
4,637 |
Average steel selling price (US$/t) |
695 |
713 |
934 |
704 |
914 |
Brazil segment crude steel production was stable at 2.9 million tonnes in
2Q 2015 and 1Q 2015.
Steel shipments in 2Q 2015 increased by 4.7% to 2.8 million tonnes as compared
to 1Q 2015, primarily driven by increased slab exports from Brazil and higher tubular shipment volumes.
Sales in 2Q 2015 increased by 2.2% to $2.2 billion as compared to 1Q 2015,
due to higher steel shipments as discussed above, offset in part by lower average steel selling prices (-2.5%).
EBITDA in 2Q 2015 declined by 4.7% to $360 million as compared to $377 million
in 1Q 2015. EBITDA declined on account of lower average steel selling prices offset partially by higher steel shipment volumes
and the improvement in our tubular operations.
EBITDA in 2Q 2015 was lower as compared to 2Q 2014 by 13.2% due to lower average
steel selling prices (-25.6%) offset in part by higher steel shipments (+22.6%) following the restart of the furnace in Tubarao,
Brazil, in July 2014.
Europe
(USDm) unless otherwise shown |
2Q 15 |
1Q 15 |
2Q 14 |
1H 15 |
1H 14 |
Sales |
8,547 |
8,600 |
10,518 |
17,147 |
20,840 |
EBITDA |
680 |
616 |
689 |
1,296 |
1,224 |
Depreciation |
293 |
299 |
355 |
592 |
810 |
Operating income |
387 |
317 |
334 |
704 |
414 |
|
|
|
|
|
|
Crude steel production (kt) |
11,644 |
11,341 |
10,941 |
22,985 |
21,840 |
Steel shipments (kt) |
10,895 |
10,662 |
10,191 |
21,557 |
20,200 |
Average steel selling price (US$/t) |
617 |
633 |
799 |
625 |
804 |
Europe segment crude steel production increased by 2.7% to 11.6 million tonnes
in 2Q 2015, as compared to 1Q 2015.
Steel shipments in 2Q 2015 increased by 2.2% to 10.9 million tonnes as compared
to 1Q 2015, primarily due to 9.7% increase in long product shipment volumes benefiting from seasonality and improved demand.
Sales in 2Q 2015 remained stable at $8.5 billion as compared
to 1Q 2015, with lower average steel selling prices (-2.5%), being offset by higher steel shipments as discussed above. Average
steel selling prices for flat and long products decreased by 2.1% and 1.9%, respectively, largely due to exchange rate effects.
Local average steel prices declined marginally, partially reflecting lower raw material costs.
EBITDA in 2Q 2015 increased by 10.5% to $680 million as compared to $616 million
in 1Q 2015, reflecting improved market conditions offset in part by negative translation impacts.
EBITDA in 2Q 2015 was 1.3% lower than 2Q 2014 primarily on account of translation
loss. EBITDA in Euro terms increased by 22.7% reflecting improved steel shipment volumes (+6.9%) as well as the benefits of cost
optimization efforts.
ACIS4
(USDm) unless otherwise shown |
2Q 15 |
1Q 15 |
2Q 14 |
1H 15 |
1H 14 |
Sales |
1,649 |
1,721 |
2,300 |
3,370 |
4,307 |
EBITDA |
88 |
133 |
156 |
221 |
265 |
Depreciation |
106 |
108 |
131 |
214 |
260 |
Operating income / (loss) |
(18) |
25 |
25 |
7 |
5 |
|
|
|
|
|
|
Crude steel production (kt) |
3,696 |
3,603 |
3,600 |
7,299 |
7,013 |
Steel shipments (kt) |
3,205 |
3,006 |
3,306 |
6,211 |
6,493 |
Average steel selling price (US$/t) |
450 |
507 |
592 |
477 |
580 |
ACIS segment crude steel production in 2Q 2015 increased by 2.6% to 3.7 million
tonnes as compared to 1Q 2015 driven by higher production in Kazakhstan offset in part by lower production in South Africa on account
of weak domestic market conditions.
Steel shipments in 2Q 2015 increased by 6.6% to 3.2 million metric tonnes
as compared to 1Q 2015, primarily due to seasonally higher shipments in our CIS operations offset in part by lower volumes in South
Africa as explained above.
Sales in 2Q 2015 decreased by 4.2% to $1.6 billion as compared to 1Q 2015.
This decrease was primarily due to lower average steel selling prices (-11.3%) offset in part by higher steel shipment volumes.
Average steel selling prices were lower in Ukraine (-5.9%) and Kazakhstan (-8.6%) impacted by weaker CIS prices, and in South Africa
(-12.7%).
EBITDA in 2Q 2015 decreased by 33.8% to $88 million as compared to $133 million
in 1Q 2015, due to lower average steel selling prices partially offset by higher volumes in the CIS operations and continued cost
reduction efforts.
EBITDA in 2Q 2015 was 43.4% lower as compared to 2Q 2014 primarily due to
lower average steel selling prices (-24%) and lower steel shipments (-3.1%). EBITDA declined primarily in our CIS operations.
Mining
(USDm) unless otherwise shown |
2Q 15 |
1Q 15 |
2Q 14 |
1H 15 |
1H 14 |
Sales |
964 |
758 |
1,383 |
1,722 |
2,639 |
EBITDA |
115 |
114 |
388 |
229 |
821 |
Depreciation |
157 |
150 |
155 |
307 |
314 |
Operating income / (loss) |
(42) |
(36) |
233 |
(78) |
507 |
|
|
|
|
|
|
Own iron ore production (a) (Mt) |
16.4 |
15.6 |
16.6 |
31.9 |
31.4 |
Iron ore shipped externally and internally at market price (b) (Mt) |
10.8 |
9.4 |
10.5 |
20.1 |
19.8 |
Iron ore shipment - cost plus basis (Mt) |
6.4 |
4.1 |
6.2 |
10.5 |
10.4 |
|
|
|
|
|
|
Own coal production(a) (Mt) |
1.5 |
1.6 |
1.8 |
3.1 |
3.6 |
Coal shipped externally and internally at market price(b) (Mt) |
0.7 |
0.6 |
1.1 |
1.3 |
2.1 |
Coal shipment - cost plus basis (Mt) |
0.9 |
0.8 |
0.8 |
1.7 |
1.6 |
(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 2Q 2015 increased by 5.1% to 16.4 million metric tonnes as compared to 1Q 2015 on account of seasonally higher production
in Canada. Own iron ore production (not including supplies under strategic long-term contracts) was 1.3% lower than 2Q 2014 primarily
due to lower production in Liberia and Brazil partially offset by higher production in Canada due to efficiency gains.
Market priced iron ore shipments in 2Q 2015 increased by 15.3% to 10.8 million
metric tonnes as compared to 1Q 2015 driven by seasonally improved shipments in Canada offset in part by lower Liberia shipments.
Market priced iron ore shipments in 2Q 2015 increased by 2.7% as compared to 2Q 2014 driven by Canada following operational efficiency
gains offset in part by lower Brazil and Liberian shipments.
Own coal production (not including supplies under strategic long-term contracts)
in 2Q 2015 decreased 3.0% to 1.5 million metric tonnes as compared to 1Q 2015, primarily due to lower
production in Kazakhstan. Own coal production (not including supplies under
strategic long-term contracts) in 2Q 2015 decreased 14.3% as compared to 2Q 2014, primarily due to lower production at US operations
and the disposal of the Kuzbass coal mines in Russia during the fourth quarter of 2014.
EBITDA in 2Q 2015 increased marginally to $115 million as compared to $114
million in 1Q 2015 primarily due to higher market priced iron ore shipment volumes and improved cost performance offset in part
by lower seaborne iron ore market prices (-6.4%).
EBITDA in 2Q 2015 was 70.3% lower as compared to 2Q 2014, primarily due to
lower seaborne iron ore market prices (-43%), partially offset by higher market priced iron ore shipment volumes (+2.7%), lower
cost (unit iron ore cash costs down 14% year-on-year) and restructuring of our coal operations, including the sale of Kuzbass mines.
Liquidity and Capital Resources
For 2Q 2015, net cash provided by operating activities was $1,019 million,
as compared to net cash used in operating activities of $915 million in 1Q 2015. Cash provided by operating activities in 2Q 2015
included a $392 million release of operating working capital as compared to a $1,206 million investment in operating working capital
in 1Q 2015. Rotation days during 2Q 2015 increased to 55 days as compared to 54 days in 1Q 2015.
Net cash used in other operating activities in 2Q 2015 was $445 million (including
several items such as income from associates, joint ventures and other investments, employee remuneration, income taxes and VAT).
This compares to net cash provided by other operating activities in 1Q 2015 of $119 million and net cash used in other operating
activities in 2Q 2014 of $384 million.
Net cash used in investing activities during 2Q 2015 was $419 million as compared
to net cash used in investing activities during 1Q 2015 of $456 million. Capital expenditure decreased to $542 million in 2Q 2015
as compared to $745 million in 1Q 2015. The Company expects FY 2015 capital expenditures to be approximately $3.0 billion.
Cash flow from other
investing activities in 2Q 2015 of $123 million primarily included a $47
million inflow from cash received from the Kiswire divestment5 and proceeds related to the sale of certain European
distribution assets. Cash flow from other investing activities in 1Q 2015 of $289 million primarily included a $108 million inflow
from the exercise of the fourth put option on Hunan Valin shares6, cash received from the Kiswire divestment5
and proceeds from the sale of tangible assets. Cash flow from other investing activities in 2Q 2014 of $167 million primarily included
cash inflow from the divestures of ATIC7 group and Kiswire divestment5.
Net cash provided by financing activities for 2Q 2015 was $1,284 million as
compared to net cash provided by financing activities of $313 million for 1Q 2015. Net proceeds from financing of $1.6 billion
in 2Q 2015 includes the inflow of $1.0 billion relating to the proceeds from the issuance of two series of US dollar denominated
notes, ($500 million aggregate principal amount of its 5.125% notes due 2020 and $500 million aggregate principal amount of its
6.125% notes due 2025). There were additional proceeds of $963 million from the issuance of €400 million Floating Rate Notes
due April 9, 2018, and €500 million 3.00% Notes due April 9, 2021, issued under the Company’s Euro Medium Term Notes
Programme, offset in part by the repayment of $332 million short term financing.
Net cash provided by financing activities for 1Q 2015 includes inflows related
to issuance of $877 million (€750 million) 3.125% Notes due January 14, 2022, under the Company’s Euro Medium Term Notes
Programme, $339 million of short term financing and proceeds from a 4-year €75 million term loan, offset in part by a repayment
of a $1.0 billion loan.
During 2Q 2015, the Company paid $331 million in dividends to ArcelorMittal
shareholders. During 1Q 2015, the Company paid $53 million in dividends primarily to minority shareholders in ArcelorMittal Mines
Canada.
At June 30, 2015, the Company’s cash and cash equivalents (including
restricted cash and short-term investments) amounted to $4.7 billion as compared to $2.8 billion at March 31, 2015.
Gross debt of $21.3 billion at June 30, 2015, increased from $19.4 billion
at March 31, 2015 and was lower than $21.8 billion at June 30, 2014. Gross debt was higher at June 30, 2015 due to the issuances
in April 2015 and June 2015 as detailed above.
As of June 30, 2015, net debt remained stable at $16.6 billion as compared
with March 31, 2015, primarily driven by positive free cash flow of $0.5 billion, offset by forex effects ($0.2 billion) and dividends
($0.3 billion).
During the second quarter of 2015 the Company signed a $6 billion Revolving
Credit Facility (incorporating $2.5 billion three year and $3.5 billion five year tranches). The Facility replaced the $2.4 billion
revolving credit facility agreement dated May 6, 2010 and the $3.6 billion revolving credit facility agreement dated March 18,
2011. The Facility gives ArcelorMittal improved terms over the former facilities, and extends the average maturity date by approximately
two years. The $6 billion credit facility contains a financial covenant of 4.25x Net debt / EBITDA.
The Company had liquidity of $10.7 billion at June 30, 2015, consisting of
cash and cash equivalents (including restricted cash and short-term investments) of $4.7 billion and $6.0 billion of available
credit lines. On June 30, 2015, the average debt maturity was 6.3 years.
Key recent developments
| · | On July 13, 2015, ArcelorMittal, LanzaTech, the carbon recycling company, and
Primetals Technologies, a leading technology and service provider to the iron and steel industry announced they have entered into
a letter of intent to construct Europe’s first-ever commercial scale production facility to create bioethanol from waste
gases produced during the steelmaking process. The resulting use of bioethanol can cut greenhouse gas emissions by over 80 per
cent compared with conventional fossil fuels. Construction of the €87 million flagship pilot project, which will be located
at ArcelorMittal’s steel plant in Ghent, Belgium, is anticipated to commence later this year, with bioethanol production
expected to start mid-2017. |
| · | On July 10, 2015, ArcelorMittal announced that Simon Wandke has been nominated
Executive Vice President of ArcelorMittal and promoted to Chief Executive Officer of ArcelorMittal Mining, with immediate effect.
Simon replaces Bill Scotting, who is leaving the company to pursue other opportunities. |
| · | 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 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. |
| · | On July 3, 2015, ArcelorMittal announced the issuance of CHF 225 million 2.50%.
Notes due 3 July 2020 (the "Notes"). The Notes were issued under ArcelorMittal’s €6 billion wholesale Euro
Medium Term Notes Programme, pursuant to a separate Swiss Prospectus. The proceeds of the issuance will be used to repay or
prepay existing indebtedness. |
| · | On July 2, 2015, ArcelorMittal redeemed its $1 billion 4.5% Unsecured Notes due
August 5, 2015, prior to their scheduled maturity for a total amount of $1,022 million, including premium and accrued interest. |
| · | On July 1, 2015, ArcelorMittal was recognized as a premium supplier to the automotive
industry, receiving awards from PSA Peugeot Citroën and Dana Reinz for its breakthrough products and service. The Company
was named best supplier in global carmaker PSA Peugeot Citroën’s “Value Creation” category at its 2015 Best
Supplier Awards. The accolade recognizes the introduction of ArcelorMittal’s Fortiform® family of high-strength steels
for |
cold stamping, which has enabled the carmaker to reuse its existing
conventional stamping presses while achieving weight savings of between 10 and 20 percent.
| · | On May 27, 2015, ArcelorMittal completed the pricing of two series of US dollar
denominated notes, consisting of $500 million aggregate principal amount of its 5.125% notes due 2020 and $500 million aggregate
principal amount of its 6.125% notes due 2025. ArcelorMittal will use the net proceeds (after fees and expenses) to repay existing
indebtedness in particular the early redemption (through the exercise of the make-whole option) of bonds maturing in August 2015. |
| · | On May 22, 2015, ArcelorMittal and the Steel Authority of India Limited (‘SAIL’),
India’s leading steel company, signed a Memorandum of Understanding (‘MoU’) to set up an automotive steel manufacturing
facility under a Joint Venture (‘JV’) arrangement in India. The MoU is the first step of a process to establish
a JV between the two companies. The proposed JV will construct a state-of-the-art cold rolling mill and other downstream finishing
facilities in India that will offer technologically advanced steel products to India’s rapidly growing automotive sector.
|
Outlook and guidance
Based on the current economic outlook, ArcelorMittal expects global apparent
steel consumption (“ASC”) to be stable in 2015 as compared to 2014. ArcelorMittal expects the pick-up in European manufacturing
activity to continue and support ASC growth of approximately +1.5% to +2.5% in 2015. Whilst underlying demand continues to expand
in the US, due to the destock that occurred during the first six months of the year, ASC is expected to decline by -3% to -4% in
2015; nevertheless, ASC in the US in the 2H 2015 is expected to be approximately +2% to +3% above the 1H 2015 level. The outlook
for emerging markets remains weak and we have revised our ASC forecasts accordingly: In Brazil, particularly due to a weaker construction
market, ASC is expected to decline by -11% to -13%; for the CIS we expect a decline in ASC of -8% to -10%. In China, we see signs
of stabilization due to the government’s targeted stimulus, however the real estate market remains weak and we expect a slight
decline of up to -1% in apparent steel consumption in 2015. While risks remain to the global demand picture, given ArcelorMittal’s
specific geographical and end market exposures, the Company expects its steel shipments to increase by between +3% to +5%
in 2015 as compared to 2014.
Assuming current market conditions persist into 2H 2015, and given an improvement
is expected in the US due to the ongoing end of destocking and improved Calvert operations, as well as actions taken to improve
the cost base, the Company’s guidance for 2015 remains unchanged and we continue to expect 2015 EBITDA to be within the range
of $6.0 - $7.0 billion. Furthermore, the Company expects 2015 capital expenditures of approximately $3.0 billion and 2015 net interest
expense of approximately $1.4 billion.
Importantly, the Company continues to expect positive free cash flow in 2015
and to achieve progress towards the medium term net debt target of $15 billion.
ArcelorMittal Condensed Consolidated Statements
of Financial Position1
In millions of U.S. dollars |
|
|
2015 |
2015 |
2014 |
ASSETS |
|
|
|
|
|
Cash and cash equivalents including restricted cash |
|
|
4,712 |
2,779 |
4,016 |
Trade accounts receivable and other |
|
|
4,283 |
4,253 |
3,696 |
Inventories |
|
|
15,466 |
15,537 |
17,304 |
Prepaid expenses and other current assets |
|
|
2,402 |
2,492 |
2,627 |
Assets held for sale8 |
|
|
24 |
- |
414 |
Total Current Assets |
|
|
26,887 |
25,061 |
28,057 |
|
|
|
|
|
|
Goodwill and intangible assets |
|
|
7,279 |
7,104 |
8,104 |
Property, plant and equipment |
|
|
42,648 |
41,694 |
46,593 |
Investments in associates and joint ventures |
|
|
5,532 |
5,394 |
5,833 |
Deferred tax assets |
|
|
7,214 |
6,982 |
7,962 |
Other assets |
|
|
2,372 |
2,282 |
2,630 |
Total Assets |
|
|
91,932 |
88,517 |
99,179 |
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
Short-term debt and current portion of long-term debt |
|
|
3,239 |
2,441 |
2,522 |
Trade accounts payable and other |
|
|
10,291 |
10,276 |
11,450 |
Accrued expenses and other current liabilities |
|
|
6,023 |
6,211 |
6,994 |
Liabilities held for sale8 |
|
|
- |
- |
157 |
Total Current Liabilities |
|
|
19,553 |
18,928 |
21,123 |
|
|
|
|
|
|
Long-term debt, net of current portion |
|
|
18,031 |
16,986 |
17,275 |
Deferred tax liabilities |
|
|
2,707 |
2,670 |
3,004 |
Other long-term liabilities |
|
|
11,808 |
11,634 |
12,617 |
Total Liabilities |
|
|
52,099 |
50,218 |
54,019 |
|
|
|
|
|
|
Equity attributable to the equity holders of the parent |
|
|
36,813 |
35,452 |
42,086 |
Non–controlling interests |
|
|
3,020 |
2,847 |
3,074 |
Total Equity |
|
|
39,833 |
38,299 |
45,160 |
Total Liabilities and Shareholders’ Equity |
|
|
91,932 |
88,517 |
99,179 |
ArcelorMittal Condensed Consolidated Statement
of Operations1
In millions of U.S. dollars unless otherwise shown |
Three months ended |
Six months ended |
|
June 30,
2015 |
March 31,
2015 |
June 30,
2014 |
June 30,
2015 |
June 30,
2014 |
Sales |
16,890 |
17,118 |
20,704 |
34,008 |
40,492 |
Depreciation |
(801) |
(807) |
(931) |
(1,608) |
(2,011) |
Impairment |
(19) |
- |
- |
(19) |
- |
Operating income |
579 |
571 |
832 |
1,150 |
1,506 |
Operating margin % |
3.4% |
3.3% |
4.0% |
3.4% |
3.7% |
|
|
|
|
|
|
Income / (loss) from associates, joint ventures and other investments |
125 |
(2) |
118 |
123 |
154 |
Net interest expense |
(325) |
(323) |
(383) |
(648) |
(809) |
Foreign exchange and other net financing (loss) |
(73) |
(756) |
(327) |
(829) |
(707) |
Income / (loss) before taxes and non-controlling interests |
306 |
(510) |
240 |
(204) |
144 |
Current tax |
(54) |
(125) |
(95) |
(179) |
(251) |
Deferred tax |
(70) |
(85) |
(61) |
(155) |
34 |
Income tax expense |
(124) |
(210) |
(156) |
(334) |
(217) |
Income / (loss) including non-controlling interests |
182 |
(720) |
84 |
(538) |
(73) |
Non-controlling interests |
(3) |
(8) |
(32) |
(11) |
(80) |
Net income / (loss) attributable to equity holders of the parent |
179 |
(728) |
52 |
(549) |
(153) |
|
|
|
|
|
|
Basic earnings (loss) per common share ($) |
0.10 |
(0.41) |
0.03 |
(0.31) |
(0.09) |
Diluted earnings (loss) per common share ($) |
0.10 |
(0.41) |
0.03 |
(0.31) |
(0.09) |
|
|
|
|
|
|
Weighted average common shares outstanding (in millions) |
1,794 |
1,793 |
1,791 |
1,794 |
1,791 |
Adjusted diluted weighted average common shares outstanding (in millions) |
1,797 |
1,793 |
1,793 |
1,794 |
1,791 |
|
|
|
|
|
|
EBITDA |
1,399 |
1,378 |
1,763 |
2,777 |
3,517 |
EBITDA Margin % |
8.3% |
8.0% |
8.5% |
8.2% |
8.7% |
|
|
|
|
|
|
OTHER INFORMATION |
|
|
|
|
|
Own iron ore production (million metric tonnes) |
16.4 |
15.6 |
16.6 |
31.9 |
31.4 |
Crude steel production (million metric tonnes) |
24.0 |
23.7 |
23.1 |
47.8 |
46.1 |
Total shipments of steel products (million metric tonnes) |
22.2 |
21.6 |
21.5 |
43.8 |
42.4 |
ArcelorMittal Condensed Consolidated Statements
of Cash flows1
In millions of U.S. dollars |
Three months ended |
Six months ended |
|
June 30,
2015 |
March 31,
2015 |
June 30,
2014 |
June 30,
2015 |
June 30,
2014 |
Operating activities: |
|
|
|
|
|
Net income / (loss) attributable to equity holders of the parent |
179 |
(728) |
52 |
(549) |
(153) |
Adjustments to reconcile net income /(loss) to net cash provided by operations: |
|
|
|
|
|
Non-controlling interest |
3 |
8 |
32 |
11 |
80 |
Depreciation and impairment |
820 |
807 |
931 |
1,627 |
2,011 |
Deferred income tax |
70 |
85 |
61 |
155 |
(34) |
Change in operating working capital |
392 |
(1,206) |
856 |
(814) |
(50) |
Other operating activities (net) |
(445) |
119 |
(384) |
(326) |
(777) |
Net cash provided by (used in) operating activities |
1,019 |
(915) |
1,548 |
104 |
1,077 |
Investing activities: |
|
|
|
|
|
Purchase of property, plant and equipment and intangibles |
(542) |
(745) |
(774) |
(1,287) |
(1,649) |
Other investing activities (net) |
123 |
289 |
167 |
412 |
(48) |
Net cash used in investing activities |
(419) |
(456) |
(607) |
(875) |
(1,697) |
Financing activities: |
|
|
|
|
|
Net proceeds / (payments) relating to payable to banks and long-term debt |
1,589 |
386 |
(1,659) |
1,975 |
(373) |
Dividends paid |
(331) |
(53) |
(5) |
(384) |
(62) |
Payments for subordinated perpetual securities |
- |
- |
- |
- |
(657) |
Other financing activities (net) |
26 |
(20) |
(11) |
6 |
(26) |
Net cash provided by (used in) financing activities |
1,284 |
313 |
(1,675) |
1,597 |
(1,118) |
Net increase (decrease) in cash and cash equivalents |
1,884 |
(1,058) |
(734) |
826 |
(1,738) |
Cash and cash equivalents transferred to assets held for sale |
(1) |
1 |
38 |
- |
7 |
Effect of exchange rate changes on cash |
72 |
(180) |
9 |
(108) |
(127) |
Change in cash and cash equivalents |
1,955 |
(1,237) |
(687) |
718 |
(1,858) |
Appendix 1: Product shipments by region
(000'kt) |
2Q 15 |
1Q 15 |
2Q 14 |
1H 15 |
1H 14 |
Flat |
4,560 |
4,459 |
4,699 |
9,019 |
9,227 |
Long |
1,217 |
1,158 |
1,193 |
2,375 |
2,405 |
NAFTA |
5,642 |
5,463 |
5,790 |
11,105 |
11,403 |
Flat |
1,604 |
1,514 |
948 |
3,118 |
1,847 |
Long |
1,179 |
1,169 |
1,336 |
2,348 |
2,755 |
Brazil |
2,835 |
2,707 |
2,312 |
5,542 |
4,637 |
Flat |
7,470 |
7,544 |
7,039 |
15,014 |
14,031 |
Long |
3,373 |
3,074 |
3,123 |
6,447 |
6,120 |
Europe |
10,895 |
10,662 |
10,191 |
21,557 |
20,200 |
CIS |
2,248 |
1,925 |
2,243 |
4,173 |
4,296 |
Africa |
944 |
1,063 |
1,037 |
2,007 |
2,149 |
ACIS |
3,205 |
3,006 |
3,306 |
6,211 |
6,493 |
Note: Others and eliminations line are not presented in the table
Appendix 2: Capital expenditures
(USDm) |
2Q 15 |
1Q 15 |
2Q 14 |
1H 15 |
1H 14 |
NAFTA |
97 |
90 |
116 |
187 |
226 |
Brazil |
86 |
143 |
106 |
229 |
241 |
Europe |
182 |
250 |
209 |
432 |
518 |
ACIS |
86 |
93 |
110 |
179 |
215 |
Mining |
90 |
173 |
220 |
263 |
429 |
Total |
542 |
745 |
774 |
1,287 |
1,649 |
Note: Others and eliminations line are not presented
in the table
Appendix 3: Debt repayment schedule as of
June 30, 20159
Debt repayment schedule (USD billion) |
2015 |
2016 |
2017 |
2018 |
2019 |
>2019 |
Total |
Bonds |
1.0 |
1.6 |
2.5 |
2.5 |
2.3 |
9.2 |
19.1 |
LT revolving credit lines |
|
|
|
|
|
|
|
- $2.5bn tranche of $6bn revolving credit facility |
- |
- |
- |
- |
- |
- |
- |
- $3.5bn tranche of $6bn revolving credit facility |
- |
- |
- |
- |
- |
- |
- |
Commercial paper |
0.2 |
- |
- |
- |
- |
- |
0.2 |
Other loans |
0.3 |
0.9 |
0.2 |
0.1 |
0.2 |
0.3 |
2.0 |
Total gross debt |
1.5 |
2.5 |
2.7 |
2.6 |
2.5 |
9.5 |
21.3 |
Appendix 4: Credit lines available as of
June 30, 201510
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: EBITDA bridge from 1Q 2015 to
2Q 2015
USD millions |
|
EBITDA 1Q 15 |
Volume & Mix - Steel (a) |
Volume & Mix - Mining (a) |
Price-cost - Steel (b) |
Price-cost - Mining (b) |
Other (c) |
EBITDA 2Q 15 |
Group |
|
1,378 |
105 |
16 |
(114) |
(15) |
29 |
1,399 |
| a) | The volume variance indicates the sales value gain/loss through selling a higher/lower
volume compared to the reference period, valued at reference period contribution (selling price–variable cost). The mix variance
indicates sales value gain/loss through selling different proportions of mix (product, choice, customer, market including domestic/export),
compared to the reference period contribution. |
| b) | The price-cost variance is a combination of the selling price and cost variance.
The selling price variance indicates the sales value gain/loss through selling at a higher/lower price compared to the reference
period after adjustment for mix, valued with the current period volumes sold. The cost variance indicates increase/decrease in
cost (after adjustment for mix, one-time items and others) compared to the reference period cost. Cost variance includes the gain/loss
through consumptions of input materials at a higher price/lower price, movement in fixed cost, changes in valuation of inventory
due to movement in capacity utilization etc. |
| c) | “Other” includes a $69 million provision primarily related to onerous
hot rolled and cold rolled contracts in the US recorded in 1Q’15 and foreign exchange translation impact. |
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.
1 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”). While the interim financial information included in this announcement
has been prepared in accordance with IFRS applicable to interim periods, 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.
2 EBITDA in 1Q 2015 of $1,378 million
was negatively impacted by a $69 million provision primarily related to onerous hot rolled and cold rolled contracts in the US.
3 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 have since agreed to settle the dispute and on December 12, 2014, the arbitral tribunal issued
a procedural order formally closing the arbitration.
4 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.
5 On December 9, 2013, ArcelorMittal
signed an agreement with Kiswire Ltd. for the sale of its 50% stake in the joint venture Kiswire ArcelorMittal Ltd in South Korea
and certain other entities of its steel cord business in the US, Europe and Asia for a total consideration of $169 million. The
net proceeds received in 2Q 2014 were $39 million being $55 million received in cash during the quarter minus cash held by steel
cord business. Additionally, $28 million of gross debt held by the steel cord business has been transferred. During 1Q 2015, the
Company received $45 million and the final instalment of $47 million received in 2Q 2015.
6 Following the sale of a 5% stake
to Valin Group as a result of the exercise of the third put option on February 8, 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.
7 On April 30, 2014, ArcelorMittal
and H.E.S. Beheer N.V. signed a sale and purchase agreement for the sale of ArcelorMittal’s 78% stake in European port handling
and logistics company ATIC Services S.A. (“ATIC”) to HES Beheer for €155 million ($212 million). The net proceeds
received were $144 million being $212 million cash proceeds minus cash held by ATIC. Additionally, $17 million debt held by ATIC
has been transferred. The transaction is consistent with ArcelorMittal’s stated strategy of selective divestment of non-core
assets. The transaction was completed on June 30, 2014.
8 Assets and liabilities held for sale
as of June 30, 2015 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.
9 On July 2, 2015, ArcelorMittal redeemed
its $1 billion 4.5% Unsecured Notes due August 5, 2015, prior to their scheduled maturity for a total amount of $1,022 million,
including premium and accrued interest.
10 In April 2015, the Company refinanced
and extended $6 billion lines of credit (two tranches: $2.5 billion 3Yr and $3.5 billion 5Yr) with 4.25x Net debt / EBITDA covenant.
ArcelorMittal Europe reports operating profit of €352
million for
Q2 2015
Luxembourg, 31 July 2015 - ArcelorMittal Europe today
announced its results for the second quarter ended 30 June 2015. The segment recorded an operating profit of €352 million,
compared with €245 million for Q2 2014.
Second quarter 2015 Ebitda increased by 22.7 per cent, to €617
million as compared to €503 million in the corresponding quarter of 2014, reflecting improved steel shipment volumes as well
as the benefits of cost optimisation efforts.
Steel shipments in the second quarter increased by 6.9 per cent
to 10.9 million tonnes, compared with Q2 2014, demonstrating the ongoing trend of improving European steel demand.
However, sales in the ArcelorMittal Europe segment remained
stable at €7.7 billion this quarter compared to the corresponding quarter last year, with lower average steel selling prices
(-4.1 per cent) being offset by higher steel shipments. The lower price environment reflects the continuing impact of imports,
particularly from countries such as China and Russia.
Commenting, Aditya Mittal, CEO ArcelorMittal Europe, said:
“I am pleased to be able to report another set of strong results for ArcelorMittal Europe. Our results reflect a combination
of improved market fundamentals and the benefit of our asset and cost optimisation efforts. The outlook for Europe remains positive,
with the economic recovery appearing to be broadening. We continue to forecast apparent steel consumption for Europe in 2015 to
grow within a range of +1.5 to +2.5 per cent.”
The economic recovery in Europe appears to be broadening, despite
ongoing problems in Greece. Factors such as quantitative easing, the weak euro, low oil prices and reduced fiscal headwinds are
still helping. Consumer sentiment remains relatively buoyant and is supported by falling unemployment and very low inflation. Furthermore,
better business sentiment and bank lending should help investment to contribute to the recovery.
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