ArcelorMittal reports third quarter 2021 results
Luxembourg, November 11, 2021 - ArcelorMittal
(referred to as “ArcelorMittal” or the “Company”) (MT (New York,
Amsterdam, Paris, Luxembourg), MTS (Madrid)), the world’s leading
integrated steel and mining company, today announced results1,2 for
the three-months and nine-months period ended September 30,
2021.
Highlights:
- Health and safety performance: Protecting the health and
wellbeing of employees remains the Company’s overarching priority;
LTIF rate3 of 0.76x in 3Q 2021 as compared to 0.89x in 2Q 2021;
0.80x in 9M 2021
- Improved operating results in 3Q 2021, with a positive
evolution of steel spreads more than offsetting 8.4% lower steel
shipments17 (vs. 2Q 2021) due to weaker demand (in particular
automotive order cancellations) as well as production constraints
and order shipment delays which are expected to reverse in 4Q
2021
- 3Q 2021 operating income of $5.3bn compares to $4.4bn in 2Q
2021
- EBITDA of $6.1bn in 3Q 2021, the strongest quarter since 2008
and 19.9% higher than 2Q 2021
- Share of JV and associates net income in 3Q 2021 of $0.8bn
including solid performance at AMNS India4 and AMNS Calvert5
- Net income of $4.6bn in 3Q 2021 is the highest level since 2008
(vs. $4.0bn in 2Q 2021)6
- Lower steel shipments and price impacts led to $2.9bn
investment in working capital during 3Q 2021
- Free cash flow (FCF)14 of $1.6bn generated in 3Q 2021 ($2.4bn
net cash provided by operating activities less capex of $0.7bn less
minority dividends $0.2bn); Company expects a working capital
release to support higher FCF in 4Q 2021
- Gross debt declined by $1bn to $8.2bn (vs. $9.2bn as end of 2Q
2021 and $12.3bn as end of 2020); net debt declined to $3.9bn, the
lowest level since the merger (vs. $5.0bn as end of 2Q 2021 and
$6.4bn as end of 2020)
Strategic update:
- Consistently returning capital:
- Based on strong 3Q 2021 cash flow, share buyback increased by a
further $1.0bn, bringing the capital returns announced since
September 2020 to $6bn
- Continued leadership on decarbonization:
- Post 2Q 2021 results, ArcelorMittal and the Government of
Canada announced a plan to invest CAD$1.8bn in order to reduce CO2
emissions at Dofasco by 2.9Mt; finalizing Government of Canada
support and in discussions with Government of Ontario
- ArcelorMittal Mines Canada (AMMC) to invest CAD$205m in its
Port-Cartier pellet plant, enabling this facility to convert its
entire 10Mtpa annual pellet production to DRI pellets by the end of
2025
- The Company signed a letter of intent with the governments of
Belgium and Flanders, supporting €1.1bn investment in
decarbonization technologies at its flagship Gent plant
- ArcelorMittal joined Breakthrough Energy’s Catalyst program as
an anchor partner
- The Company contributed to the development of the Mission
Possible Partnership’s Net Zero Steel Strategy, published in
October 2021 with Energy Transitions Commission and the Rocky
Mountain Institute
- Strategic growth:
- ArcelorMittal has signed on September 10, 2021, with the
Government of the Republic of Liberia an amendment to its Mineral
Development Agreement which, upon ratification, will lead to the
acceleration of construction of the 15Mtpa concentrator plant
project ("phase 2 expansion"); with further expansion opportunities
to 30Mtpa
- AMNS India completed construction of a 6Mtpa pellet plant in
Odisha taking its pellet capacity up to 20Mtpa and commenced
operations at the Ghoraburhani-Sagasahi iron ore mine in Odisha
with 7.2Mtpa capacity
- During the quarter, the Company approved strategic investments
to strengthen its Long products businesses in Brazil (Monlevade
expansion, previously “on hold”) and further vertically integrate
its Mexico operations through investments at Las Truchas (Mexico)
and Serra Azul (Brazil) iron ore mines
Financial highlights (on the basis of
IFRS1,2):
(USDm) unless otherwise shown |
3Q 21 |
2Q 21 |
3Q 20 |
9M 21 |
9M 20 |
Sales |
20,229 |
|
19,343 |
|
13,266 |
|
55,765 |
|
39,086 |
|
Operating income |
5,345 |
|
4,432 |
|
718 |
|
12,418 |
|
112 |
|
Net income / (loss) attributable to equity holders of the
parent |
4,621 |
|
4,005 |
|
(261) |
|
10,911 |
|
(1,940) |
|
Basic earnings / (loss) per common share (US$) |
4.17 |
|
3.47 |
|
(0.21) |
|
9.52 |
|
(1.73) |
|
|
|
|
|
|
|
Operating income/ (loss) / tonne (US$/t) |
366 |
|
276 |
|
41 |
|
263 |
|
2 |
|
EBITDA |
6,058 |
|
5,052 |
|
901 |
|
14,352 |
|
2,575 |
|
EBITDA/ tonne (US$/t) |
414 |
|
314 |
|
52 |
|
304 |
|
50 |
|
|
|
|
|
|
|
Crude steel production (Mt) |
17.2 |
17.8 |
17.2 |
52.6 |
52.7 |
Steel shipments (Mt) |
14.6 |
16.1 |
17.5 |
47.2 |
51.8 |
Total group iron ore production (Mt) |
13.0 |
|
11.2 |
|
14.8 |
|
37.5 |
|
42.7 |
|
Iron ore production (Mt) (AMMC and Liberia only) |
6.8 |
|
4.9 |
|
7.2 |
|
19.0 |
|
20.7 |
|
Iron ore shipment (Mt) (AMMC and Liberia only) |
6.9 |
|
4.6 |
|
7.2 |
|
18.9 |
|
20.5 |
|
|
|
|
|
|
|
Number of shares outstanding (issued shares less treasury shares)
(millions) |
971 |
|
1,019 |
|
1,089 |
|
971 |
|
1,089 |
|
Note: As previously announced, effective 2Q 2021, ArcelorMittal
has amended its presentation of reportable segments to report the
operations of AMMC and Liberia within the Mining segment. The
results of each other mine are accounted for within the steel
segments that it primarily supplies; as from 2Q 2021 onwards,
ArcelorMittal Italia is deconsolidated and accounted for as a joint
venture.
Commenting, Aditya Mittal, ArcelorMittal
Chief Executive Officer, said:
“Our third quarter results were supported by the
continuing strong price environment, resulting in the highest net
income and lowest net debt since 2008. However, this success has
been outweighed by our safety results. Improving the group’s safety
performance is of the highest priority. We have already this year
significantly strengthened our safety procedures and will be
analyzing what further interventions can be introduced to ensure we
eliminate all fatalities.
“At the beginning of the quarter, we announced an ambitious 2030
CO2 reduction target, backed by plans to invest in various
decarbonization initiatives. It is our stated aim to lead the steel
industry’s important role in ensuring the global economy achieves
net zero. That is why we joined Breakthrough Energy Catalyst, are
collaborating with the Science Based Targets initiative on a new
methodology for the steel sector and are supporting the Industrial
Deep Decarbonization Initiative’s campaign for green public
procurement, which was launched at COP26 this week.
“Despite the volatility we continue to see as a result of the
ongoing presence and repercussions of COVID-19, this has been a
very strong year for ArcelorMittal. We have re-positioned our
balance sheet, re-set ourselves for the transition to a low-carbon
economy, we are growing strategically through high-quality,
high-return projects and we are returning capital to shareholders.
We are aware of the challenges but excited by the opportunities
that will exist for steel in the coming years and beyond.”
“The outlook remains positive: underlying demand is expected to
continue to improve; and, although marginally off the recent record
highs, steel prices remain at elevated levels, something which will
be reflected in the annual contracts for 2022.”
Sustainable development and safety
performance
Health and safety - Own personnel and
contractors lost time injury frequency rate
Protecting the health and wellbeing of employees remains the
Company’s overarching priority with ongoing strict adherence to
World Health Organization guidelines (in respect of COVID-19), and
specific government guidelines have been followed and
implemented.
Health and safety performance based on own personnel and
contractors lost time injury frequency (LTIF) rate was 0.76x in the
third quarter of 2021 ("3Q 2021") as compared to 0.89x for the
second quarter of 2021 ("2Q 2021"). Prior period figures have not
been recast for the ArcelorMittal USA disposal which took place in
December 2020 and exclude ArcelorMittal Italia (which is now
accounted for under the equity method) for all periods.
Health and safety performance in the first nine months of 2021
(“9M 2021”) was 0.80x as compared to 0.60x in the first nine months
of 2020 (“9M 2020”).
The Company’s efforts to improve its health and safety record
aim to strengthen the safety of its workforce with an absolute
focus on eliminating fatalities. A change to the Company’s
executive remuneration policy has been made to reflect this
focus.
Own personnel and contractors - Frequency
rate
Lost time injury frequency rate |
3Q 21 |
2Q 21 |
3Q 20 |
9M 21 |
9M 20 |
NAFTA |
0.48 |
|
0.17 |
|
0.58 |
|
0.45 |
|
0.60 |
|
Brazil |
0.10 |
|
0.26 |
|
0.35 |
|
0.17 |
|
0.32 |
|
Europe |
1.38 |
|
1.41 |
|
1.02 |
|
1.23 |
|
0.97 |
|
ACIS |
0.80 |
|
1.03 |
|
0.53 |
|
0.94 |
|
0.64 |
|
Mining |
— |
|
0.71 |
|
0.36 |
|
0.44 |
|
0.25 |
|
Total |
0.76 |
|
0.89 |
|
0.56 |
|
0.80 |
|
0.60 |
|
Key sustainable development highlights
during the quarter:
- Further
projects announced to meet the Company's 2030
CO2 reduction target by
2030
- ArcelorMittal announced with the
Government of Canada its intention for a CAD$1.765 billion
investment in decarbonization technologies at ArcelorMittal
Dofasco’s plant in Hamilton. The intended investments would reduce
annual CO2 emissions at ArcelorMittal’s Hamilton, Ontario
operations by approximately 3Mt within the next seven years.
- The Company signed a letter of
intent with the Governments of Belgium and Flanders, supporting a
€1.1 billion project to build a 2.5Mt direct reduced iron (DRI)
plant at its site in Gent, as well as two new electric
furnaces.
- On November 3, 2021, ArcelorMittal
and the government of Quebec announced a CAD$205 million investment
by AMMC in its Port-Cartier pellet plant, enabling this facility to
convert its entire 10Mt annual pellet production to DRI pellets by
the end of 2025. The investment, in which the Quebec government
will contribute through an electricity rebate of up to CAD$80
million, will enable the Port-Cartier plant to become one of the
world’s largest producers of DRI pellets, the raw material
feedstock for ironmaking in a DRI furnace. The project will deliver
a direct annual CO2e reduction of approximately 200,000 tonnes at
AMMC’s Port-Cartier pellet plant, equivalent to over 20% of the
pellet plant’s total annual CO2e emissions.
- Further investments in the
Company's XCarbTM Innovation
fund10: ArcelorMittal
has become an anchor partner in Breakthrough Energy’s Catalyst
program, committing to an equity investment of $100 million over
the next five years. Catalyst, launched earlier this year, is a new
model for how companies, governments and private philanthropy can
finance, produce, and ensure widespread adoption of next-generation
clean technologies. The program will initially focus on four
decarbonization technologies: direct air capture (DAC); green
hydrogen; long-duration energy storage (LDS); and sustainable
aviation fuel (SAF).
- Industry recognition for
excellence: On October 13, 2021, ArcelorMittal was
announced as a Supplier Sustainability Award winner at Ford Motor
Company’s virtual event. Ford’s World Excellence Awards recognize
companies that exceed expectations and achieve the highest levels
of excellence in quality, cost, performance and delivery.
- Net Zero Steel
Strategy: as a member of the Energy Transitions
Commission, ArcelorMittal participated in the development of the
Mission Possible Partnership’s Net Zero Steel Strategy, published
in October 2021 with Energy Transitions Commission and the Rocky
Mountain Institute. The report elaborates two net zero scenarios
for steel by 2050, differentiated by the level of coordinated
global action to support the transition this decade.
Analysis of results for 3Q 2021 versus 2Q 2021 and 3Q
2020Total steel shipments in 3Q 2021 were 14.6Mt, 9.0%
lower as compared with 16.1Mt in 2Q 2021 due to weaker demand (in
particular automotive) as well as production constraints and order
shipment delays which are expected to reverse in 4Q 2021. Adjusted
for the change in scope (i.e. excluding the shipments of
ArcelorMittal Italia11, deconsolidated as from April 14, 2021)
steel shipments in 3Q 2021 decreased 8.4% as compared to 2Q 2021:
ACIS -15.5%, NAFTA -12.0%, Europe -7.7% (scope adjusted) and Brazil
-4.6%.
Adjusted for the change in scope (i.e. excluding the shipments
of ArcelorMittal USA, sold to Cleveland Cliffs on December 9, 2020,
and ArcelorMittal Italia11, deconsolidated as from April 14, 2021),
steel shipments in 3Q 2021 increased 1.6% as compared to 3Q 2020:
Brazil +16.6%; Europe +3.2% (scope adjusted); NAFTA +2.3% (scope
adjusted); offset in part by ACIS -5.3%.
Sales in 3Q 2021 were $20.2 billion as compared to $19.3 billion
for 2Q 2021 and $13.3 billion for 3Q 2020. As compared to 2Q 2021,
the 4.6% increase in sales was primarily due to higher realized
average steel selling prices (+15.7%) and higher mining revenue
primarily due to higher shipment volumes (recovery in ArcelorMittal
Mines Canada (AMMC7) following the resolution of labour strike
action that had affected operations in 2Q 2021). Sales in 3Q 2021
were +52.5% higher as compared to 3Q 2020 primarily due to
significantly higher average steel selling prices (+75.5%) as well
as higher iron ore reference prices (+38.4%).
Depreciation for 3Q 2021 was $590 million as compared to $620
million for 2Q 2021, and significantly lower than $739 million in
3Q 2020 (due in part to the deconsolidation of ArcelorMittal Italia
as from mid-April 2021 and sale of ArcelorMittal USA from December
2020). The FY 2021 depreciation expense is expected to be
approximately $2.6 billion (based on current exchange rate).
There were no impairment items for 3Q 2021 and 2Q 2021. Net
impairment gains in 3Q 2020 amounted to $556 million, consisting of
the partial reversal of impairment charges recorded following the
announced sale of ArcelorMittal USA ($660 million), and an
impairment charge of $104 million related to the permanent closure
of a blast furnace and steel plant in Krakow (Poland).
Exceptional items for 3Q 2021 of $123 million relate to expected
costs for the decommissioning of the dam at the Serra Azul mine in
Brazil. There were no exceptional items for 2Q 2021 or 3Q 2020.
Operating income for 3Q 2021 was $5.3 billion as compared to
$4.4 billion in 2Q 2021 and $718 million in 3Q 2020 (impacted by
the exceptional and impairment items as discussed above). The
increased operating income for 3Q 2021 as compared to 2Q 2021
reflects a positive price-cost effect in the steel business which
more than offset lower steel shipments, as well as improved Mining
segment performance (driven by higher iron ore shipments offset in
part by lower iron ore reference prices).
Income from associates, joint ventures and other investments for
3Q 2021 was $778 million as compared to $590 million for 2Q 2021
and $100 million in 3Q 2020. 3Q 2021 is significantly higher on
account of improved results from Canadian, Calvert5, and Chinese
investees12.
Net interest expense in 3Q 2021 was lower at $62 million as
compared to $76 million in 2Q 2021 and $106 million in 3Q 2020,
mainly due to savings following the repayment of bonds.
Foreign exchange and other net financing losses in 3Q 2021 were
$339 million as compared to losses of $233 million in 2Q 2021 and
$150 million in 3Q 2020. 3Q 2021 includes foreign exchange gain of
$22 million (compared to $29 million loss in 2Q 2021 and $17m gain
in 3Q 2020), and $68 million non-cash mark-to-market loss related
to the mandatory convertible bonds call option (gain of $33 million
in 2Q 2021). 3Q 2021 additionally includes i) an $82 million charge
in connection with a revised valuation of the put option granted to
Votorantim18; and ii) a $153 million loss (primarily consisting of
interest and indexation charges, with a financial impact net of
taxes and expected recoveries of less than $50 million) relating to
a legal claim (currently on appeal) at ArcelorMittal Brasil from
the Votorantim acquisition18. 2Q 2021 was impacted by early bond
redemption premium expenses of $130 million.
ArcelorMittal recorded an income tax expense of $882 million in
3Q 2021 as compared to an income tax expense of $542 million
(including deferred tax benefit of $226 million) in 2Q 2021 and
$784 million (including deferred tax expense of $580 million) for
3Q 2020.
ArcelorMittal recorded net income for 3Q 2021 of $4,621 million
($4.17 basic earnings per common share), as compared to net income
of $4,005 million for 2Q 2021 ($3.47 basic earnings per common
share), and a net loss of $261 million for 3Q 2020 ($0.21 basic
loss per common share).
Analysis of segment
operations2, 15
NAFTA
(USDm) unless otherwise shown |
3Q 21 |
2Q 21 |
3Q 20 |
9M 21 |
9M 20 |
Sales |
3,423 |
|
3,242 |
|
3,335 |
|
9,201 |
|
10,464 |
|
Operating income |
925 |
|
675 |
|
629 |
|
1,861 |
|
177 |
|
Depreciation |
(70) |
|
(71) |
|
(143) |
|
(212) |
|
(435) |
|
Impairment items |
— |
|
— |
|
660 |
|
— |
|
660 |
|
Exceptional items |
— |
|
— |
|
— |
|
— |
|
(462) |
|
EBITDA |
995 |
|
746 |
|
112 |
|
2,073 |
|
414 |
|
Crude steel production (kt) |
1,994 |
|
2,272 |
|
4,432 |
|
6,441 |
|
13,633 |
|
Steel shipments (kt) |
2,280 |
|
2,590 |
|
4,435 |
|
7,381 |
|
13,768 |
|
Average steel selling price (US$/t) |
1,303 |
|
1,062 |
|
701 |
|
1,064 |
|
698 |
|
NAFTA segment crude steel production decreased by 12.2% to 2.0Mt
in 3Q 2021, as compared to 2.3Mt in 2Q 2021 primarily due to
operational disruptions (including the impact of hurricane Ida) in
Mexico. Adjusted for scope (excluding the impact of ArcelorMittal
USA which was sold in December 2020), crude steel production
declined -0.5% year on year.
Steel shipments in 3Q 2021 decreased by 12.0% to 2.3Mt, as
compared to 2.6Mt in 2Q 2021 primarily due to lower production as
explained above. Adjusted for scope, steel shipments were +2.3%
higher year on year.
Sales in 3Q 2021 increased by 5.6% to $3.4 billion, as compared
to $3.2 billion in 2Q 2021, primarily due to a 22.7% increase in
average steel selling prices offset in part by a decrease in steel
shipments (as discussed above).
Impairments for 3Q 2021 and 2Q 2021 were nil. 3Q 2020 operating
income included a $660 million gain related to the partial reversal
of impairments recorded in ArcelorMittal USA following the
announced sale.
Operating income in 3Q 2021 was $925 million as compared to $675
million in 2Q 2021 and $629 million in 3Q 2020 which was positively
impacted by impairment items noted above offset by the COVID-19
pandemic.
EBITDA in 3Q 2021 of $995 million was 33.3% higher as compared
to $746 million in 2Q 2021, primarily due to a positive price-cost
effect offset in part by lower shipment volumes as noted above.
EBITDA in 3Q 2021 was higher as compared to $112 million in 3Q 2020
mainly due to a significant positive price-cost effect.
Brazil
(USDm) unless otherwise shown |
3Q 21 |
2Q 21 |
3Q 20 |
9M 21 |
9M 20 |
Sales |
3,606 |
|
3,263 |
|
1,624 |
|
9,404 |
|
4,431 |
|
Operating income |
1,164 |
|
1,028 |
|
209 |
|
2,906 |
|
481 |
|
Depreciation |
(59) |
|
(56) |
|
(55) |
|
(168) |
|
(177) |
|
Exceptional items |
(123) |
|
— |
|
— |
|
(123) |
|
— |
|
EBITDA |
1,346 |
|
1,084 |
|
264 |
|
3,197 |
|
658 |
|
Crude steel production (kt) |
3,112 |
|
3,150 |
|
2,300 |
|
9,296 |
|
6,671 |
|
Steel shipments (kt) |
2,829 |
|
2,964 |
|
2,425 |
|
8,661 |
|
6,835 |
|
Average steel selling price (US$/t) |
1,196 |
|
1,038 |
|
625 |
|
1,023 |
|
608 |
|
Brazil segment crude steel production decreased 1.2% to 3.1Mt in
3Q 2021 as compared to 3.2Mt in 2Q 2021, and was significantly
higher as compared to 2.3Mt in 3Q 2020 when production was adapted
to match the reduced demand levels driven by the COVID-19
pandemic.
Steel shipments in 3Q 2021 decreased by 4.6% to 2.8Mt as
compared to 3.0Mt in 2Q 2021, primarily due to lower domestic
demand not fully offset by export shipments due to order shipment
delays at the end of the quarter. Steel shipments were 16.6% higher
in 3Q 2021 as compared to 2.4Mt in 3Q 2020 due to higher flat
products (+45.4%, driven by higher exports).
Sales in 3Q 2021 increased by 10.5% to $3.6 billion as compared
to $3.3 billion in 2Q 2021, following a 15.2% increase in average
steel selling prices offset in part by lower steel shipments.
Operating income in 3Q 2021 of $1,164 million was higher as
compared to $1,028 million in 2Q 2021 and $209 million in 3Q 2020
(impacted by COVID-19 pandemic). Operating income in 3Q 2021 was
impacted by exceptional items of $123 million related to expected
costs for the decommissioning of the dam at the Serra Azul mine in
Brazil.
EBITDA in 3Q 2021 increased by 24.2% to $1,346 million as
compared to $1,084 million in 2Q 2021, primarily due to a positive
price-cost effect offset in part by lower steel shipments. EBITDA
in 3Q 2021 was significantly higher as compared to $264 million in
3Q 2020 primarily due to a positive price-cost effect and higher
steel shipments.
Europe
(USDm) unless otherwise shown |
3Q 21 |
2Q 21 |
3Q 20 |
9M 21 |
9M 20 |
Sales |
11,228 |
|
10,672 |
|
7,013 |
|
31,255 |
|
20,467 |
|
Operating income /(loss) |
1,925 |
|
1,262 |
|
(341) |
|
3,786 |
|
(995) |
|
Depreciation |
(284) |
|
(316) |
|
(358) |
|
(899) |
|
(1,062) |
|
Impairment items |
— |
|
— |
|
(104) |
|
— |
|
(196) |
|
Exceptional items |
— |
|
— |
|
— |
|
— |
|
(191) |
|
EBITDA |
2,209 |
|
1,578 |
|
121 |
|
4,685 |
|
454 |
|
Crude steel production (kt) |
9,091 |
|
9,386 |
|
7,908 |
|
28,174 |
|
24,894 |
|
Steel shipments (kt) |
7,551 |
|
8,293 |
|
8,187 |
|
24,857 |
|
24,304 |
|
Average steel selling price (US$/t) |
1,098 |
|
948 |
|
651 |
|
945 |
|
641 |
|
Europe segment crude steel production was 3.1% lower at 9.1Mt in
3Q 2021 as compared to 9.4Mt in 2Q 2021. Following the formation of
a public-private partnership between Invitalia and ArcelorMittal
Italia renamed Acciaierie d’Italia Holding (ArcelorMittal’s
subsidiary party to the lease and purchase agreement for the ILVA
business), ArcelorMittal has deconsolidated the assets and
liabilities as from mid-April 2021. Adjusted for this change of
scope, crude steel production decreased by 1.6% in 3Q 2021 as
compared to 2Q 2021 and increased by 26.5% in 3Q 2021 as compared
to 3Q 2020.
Steel shipments in 3Q 2021 decreased by 8.9% to 7.6Mt as
compared to 8.3Mt in 2Q 2021 ( -7.7% on a scope adjusted basis) and
lower as compared to 8.2Mt in 3Q 2020 (+3.2% on a scope adjusted
basis). Steel shipments in 3Q 2021 were impacted by weaker demand,
including lower automotive sales (driven by the late cancellation
of orders), as well as logistic constraints partly linked to the
severe floods in Europe in July 2021.
Sales in 3Q 2021 increased 5.2% to $11.2 billion, as compared to
$10.7 billion in 2Q 2021, primarily due to 15.8% higher average
selling prices (flat products +16.2% and long products +17.0%).
Impairment charges for 3Q 2021 and 2Q 2021 were nil. Impairment
charges for 3Q 2020 were $104 million related to the closure of the
blast furnace and the steel plant in Krakow (Poland).
Operating income in 3Q 2021 was $1,925 million as compared to
$1,262 million in 2Q 2021 and an operating loss of $341 million in
3Q 2020 (impacted by the COVID-19 pandemic and impairments
discussed above).
EBITDA in 3Q 2021 of $2,209 million was higher as compared to
$1,578 million in 2Q 2021, primarily due to a positive price-cost
effect offset in part by lower steel shipments. EBITDA in 3Q 2021
increased significantly as compared to $121 million in 3Q 2020
primarily due to a positive price-cost effect.
ACIS
(USDm) unless otherwise shown |
3Q 21 |
2Q 21 |
3Q 20 |
9M 21 |
9M 20 |
Sales |
2,419 |
|
2,768 |
|
1,452 |
|
7,315 |
|
4,184 |
|
Operating income / (loss) |
808 |
|
923 |
|
68 |
|
2,266 |
|
(24) |
|
Depreciation |
(112) |
|
(110) |
|
(120) |
|
(332) |
|
(359) |
|
Exceptional items |
— |
|
— |
|
— |
|
— |
|
(21) |
|
EBITDA |
920 |
|
1,033 |
|
188 |
|
2,598 |
|
356 |
|
Crude steel production (kt) |
3,014 |
|
2,975 |
|
2,544 |
|
8,672 |
|
7,498 |
|
Steel shipments (kt) |
2,367 |
|
2,801 |
|
2,499 |
|
7,763 |
|
7,508 |
|
Average steel selling price (US$/t) |
864 |
|
806 |
|
465 |
|
770 |
|
449 |
|
ACIS segment crude steel production in 3Q 2021 was 1.3% higher
at 3.0Mt as compared to 2Q 2021. Crude steel production in 3Q 2021
was 18.5% higher as compared to 2.5Mt in 3Q 2020 primarily due to
increased Ukrainian production during 3Q 2021 and COVID-19 related
lockdown measures implemented in South Africa during the second and
third quarter of 2020.
Steel shipments in 3Q 2021 decreased by 15.5% to 2.4Mt as
compared to 2.8Mt as at 2Q 2021, mainly due to lower shipments in
Kazakhstan driven by weaker market conditions in the CIS and export
order shipment delays at the end of the quarter.
Sales in 3Q 2021 decreased by 12.6% to $2.4 billion as compared
to $2.8 billion in 2Q 2021, primarily due to lower steel shipments
(-15.5%) offset in part by higher average steel selling prices
(+7.2%).
Operating income in 3Q 2021 was $808 million as compared to $923
million in 2Q 2021 and $68 million in 3Q 2020.
EBITDA of $920 million in 3Q 2021 was 10.9% lower as compared to
$1,033 million in 2Q 2021, primarily due to lower steel shipments
offset in part by a positive price-cost effect. EBITDA in 3Q 2021
was significantly higher as compared to $188 million in 3Q 2020,
primarily due to positive price-cost effects offset in part by
lower steel shipments.
Mining
(USDm) unless otherwise shown |
3Q 21 |
2Q 21 |
3Q 20 |
9M 21 |
9M 20 |
Sales |
1,153 |
|
889 |
|
717 |
|
3,221 |
|
1,848 |
|
Operating income |
741 |
|
508 |
|
330 |
|
2,028 |
|
745 |
|
Depreciation |
(56) |
|
(56) |
|
(57) |
|
(171) |
|
(183) |
|
EBITDA |
797 |
|
564 |
|
387 |
|
2,199 |
|
928 |
|
|
|
|
|
|
|
Iron ore production (Mt) |
6.8 |
4.9 |
7.2 |
19.0 |
20.7 |
Iron ore shipment (Mt) |
6.9 |
4.6 |
7.2 |
18.9 |
20.5 |
Given the sale of ArcelorMittal USA in December 2020, the
Company is no longer presenting coal production and shipments in
its earnings releases.
Iron ore production (AMMC and Liberia only) increased in 3Q 2021
by 40.7% to 6.8Mt as compared to 4.9Mt in 2Q 2021 and was 4.2%
lower as compared to 3Q 2020. Higher production in 3Q 2021 was
primarily due to the recovery to normal operations at AMMC
following the impact of a 4 week labour strike action in 2Q 2021,
offset in part by lower Liberia production due to the impact of
locomotive incidents and heavy seasonal monsoon rains.
Iron ore shipments increased in 3Q 2021 by 53.5% as compared to
2Q 2021, primarily driven by AMMC as discussed above, and decreased
by 3.7% as compared to 3Q 2020.
Operating income in 3Q 2021 increased to $741 million as
compared to $508 million in 2Q 2021 and $330 million in 3Q
2020.
EBITDA in 3Q 2021 increased by 41.3% to $797 million as compared
to $564 million in 2Q 2021, reflecting the positive impact of
higher iron ore shipments (+53.5%) offset in part by lower iron ore
reference prices (-18.5%) and higher freight costs. EBITDA in 3Q
2021 was significantly higher as compared to $387 million in 3Q
2020, primarily due to higher iron ore reference prices
(+38.4%).
Joint venturesArcelorMittal has
investments in various joint ventures and associate entities
globally. The Company considers the Calvert (50% equity interest)
and AMNS India (60% equity interest) joint ventures to be of
particular strategic importance, warranting more detailed
disclosures to improve the understanding of their operational
performance and value to the Company.
Calvert
(USDm) unless otherwise shown |
3Q 21 |
2Q 21 |
3Q 20 |
9M 21 |
9M 20 |
Production (100% basis) (Mt)* |
1,239 |
|
1,234 |
|
1,102 |
|
3,734 |
|
2,981 |
|
Steel shipments (100% basis) (Mt)** |
1,203 |
|
1,155 |
|
1,012 |
|
3,495 |
|
2,907 |
|
EBITDA (100% basis)*** |
397 |
|
270 |
|
73 |
|
821 |
|
136 |
|
* Production: all production of the hot strip mill including
processing of slabs on a hire work basis for ArcelorMittal group
entities and third parties, including stainless steel slabs.
** Shipments: all shipments including shipments of finished
products processed on a hire work basis for ArcelorMittal group
entities and third parties, including stainless steel products.
*** EBITDA of Calvert presented here on a 100% basis as a
stand-alone business and in accordance with the Company's policy,
applying the weighted average method of accounting for
inventory.
Calvert’s hot strip mill production during 3Q 2021 totaled 1.2Mt
as compared to 1.2Mt in 2Q 2021. Hot strip mill reliability and
productivity continue to progress with monthly production record
achieved in July (455Kt).
EBITDA*** during 3Q 2021 of $397 million (100% basis) was higher
as compared to $270 million in 2Q 2021, largely reflecting the
improved market prices.
AMNS India4
(USDm) unless otherwise shown |
3Q 21 |
2Q 21 |
3Q 20 |
9M 21 |
9M 20 |
Crude steel production (100% basis) (Mt) |
1,891 |
|
1,831 |
|
1,767 |
|
5,546 |
|
4,728 |
|
Steel shipments (100% basis) (Mt) |
1,765 |
|
1,721 |
|
1,779 |
|
5,191 |
|
4,482 |
|
EBITDA (100% basis) |
551 |
|
607 |
|
176 |
|
1,561 |
|
423 |
|
Despite the onset of further lockdowns related to a second wave
of the COVID-19 pandemic negatively impacting domestic demand, AMNS
India was able to maintain robust production levels and utilize its
coastal location and divert tonnes from the domestic to the export
market. As a result, crude steel production in 3Q 2021 increased to
1.9Mt as compared to 1.8Mt 2Q 2021.
AMNS India EBITDA of $551 million (100% basis) was lower as
compared to $607 million in 2Q 2021 primarily due to a negative
price-cost impact due to higher iron ore and energy prices.
Liquidity and Capital
Resources
Net cash provided by operating activities for 3Q 2021 was $2,442
million as compared to $2,312 million in 2Q 2021 and $1,770 million
in 3Q 2020. Net cash provided by operating activities in 3Q 2021
includes a working capital investment of $2,896 million due to
higher pricing levels and production held in inventory due in part
to lower than expected shipments, as compared to a working capital
investment of $1,901 million in 2Q 2021 and a working capital
release of $1,072 million in 3Q 2020.
Working capital needs in 2021 will be determined by the
operating conditions towards the end of the year. Inventory volumes
are expected to normalize in 4Q 2021, allowing working capital
rotation days to return to levels consistent with the end of 2020
(scope adjusted). This normalization should support a working
capital release in 4Q 2021 and support a further reduction in net
debt.
Capex of $675 million in 3Q 2021 compares to $569 million in 2Q
2021 and $520 million in 3Q 2020. The FY 2021 capex guidance is
maintained at $3.2 billion16.
Net cash provided by other investing activities in 3Q 2021 of
$1,184 million as compared to $687 million in 2Q 2021 and $34
million in 3Q 2020. 3Q 2021 cash inflow primarily relates to $1.3
billion cash received from the redemption of preferred shares (the
equivalent of 58.3 million common shares) of Cleveland Cliffs
following a final review of the notice of the redemption, partially
offset by other investments including those as part of the XCarbTM
Innovation fund. 2Q 2021 cash inflow primarily relates to $0.7
billion cash received from the sale of 38.2 million Cleveland
Cliffs common shares.
Net cash used in financing activities in 3Q 2021 was $2,740
million as compared to $3,780 million in 2Q 2021 and $401 million
in 3Q 2020. In 3Q 2021, net cash used in financing activities
includes an outflow of $0.8 billion primarily related to an early
repayment of a Schuldschein loan of $0.5 billion and $0.2 billion
from movement in commercial paper. In 2Q 2021, net cash used in
financing activities includes an outflow of $2.2 billion primarily
related to various EU and US bond repurchases. Net cash used in
financing activities in 3Q 2020 primarily includes bond
repayments.
As of September 30, 2021, ArcelorMittal had repurchased
42,299,224 shares for a total value of $1.4 billion out of the
total $2.2 billion share buyback program that was announced on July
29, 2021. In addition, $323 million was paid during 3Q 2021
relating to part of the $750 million share buyback commenced on
June 18, 2021 and was completed in early July 2021. In 2Q 2021,
ArcelorMittal had repurchased 35,100,157 shares.
On November 11, 2021, based on the strong 3Q 2021 cash flow, the
Company added $1 billion to its share buyback program under the
authorization given by the annual general meeting of shareholders
held on June 8, 2021. This brings the total advance as part of its
prospective 2022 capital return to shareholders (to be funded from
2021 surplus cash flow under the capital return policy announced
February 2021) to $2 billion. The new program (the “Program”) will
be effective as from the date of the publication of the press
release announcing the completion of the share buyback program
announced on July 29, 2021 and the specific terms and conditions of
the Program. The Program is expected to be completed by February
2022, subject to market conditions.
During 3Q 2021, the Company paid total dividends of $185 million
of which $28 million was withholding taxes paid on dividends to
ArcelorMittal shareholders in 2Q 2021 and $157 million mainly paid
to the minority shareholders of ArcelorMittal Mines Canada7 (AMMC)
and ArcelorMittal Kryvyi Rih which compares to $301 million in 2Q
2021 ($284 million was paid to ArcelorMittal shareholders and $17
million paid to minority shareholders), and $55 million to minority
shareholders of AMMC and Bekaert (Brazil) in 3Q 2020.
Outflows from lease payments and other financing activities
(net) were $46 million in 3Q 2021. Outflows from lease payments and
other financing activities (net) were $250 million in 2Q 2021 ($63
million for 3Q 2020) including $199 million related to cash on
deconsolidation of ArcelorMittal Italia.
Gross debt decreased by $1.0 billion to $8.2 billion as of
September 30, 2021, as compared to $9.2 billion as of June 30,
2021, $12.3 billion as of December 31, 2020. As of September 30,
2021, net debt decreased to $3.9 billion as compared to $5.0
billion as of June 30, 2021, primarily driven by free cash
flows.
As of September 30, 2021, the Company had liquidity of $9.9
billion, consisting of cash and cash equivalents of $4.4 billion
($4.2 billion as of June 30, 2021 and $6.0 billion as of December
31, 2020) and $5.5 billion of available credit lines8.
As of September 30, 2021, the average debt maturity was 6.0
years.
Key recent developments
- On November 11, 2021, based on the strong 3Q 2021 cash flow,
ArcelorMittal added $1 billion to its share buyback program under
the authorization given by the annual general meeting of
shareholders held on June 8, 2021. This brings the total advance as
part of its prospective 2022 capital return to shareholders (to be
funded from 2021 surplus cash flow under the capital return policy
announced February 2021) to $2 billion. The new program (the
“Program”) will be effective as from the date of the publication of
the press release announcing the completion of the share buyback
program announced on July 29, 2021 and the specific terms and
conditions of the Program. The Program is expected to be completed
by February 2022, subject to market conditions.
- On November 3, 2021, ArcelorMittal and the government of Quebec
announced a CAD$205 million investment by AMMC in its Port-Cartier
pellet plant, enabling this facility to convert its entire 10Mt
annual pellet production1 to direct reduced iron (‘DRI’) pellets by
the end of 2025. The investment, in which the Quebec government
will contribute through an electricity rebate of up to CAD$80
million, will enable the Port-Cartier plant to become one of the
world’s largest producers of DRI pellets, the raw material
feedstock for ironmaking in a DRI furnace. The project includes the
implementation of a flotation system that will enable a significant
reduction of silica in the iron ore pellets, facilitating the
production of a very high-quality pellet. The project will deliver
a direct annual CO2e reduction of approximately 200,000 tonnes at
AMMC’s Port-Cartier pellet plant, equivalent to over 20% of the
pellet plant’s total annual CO2e emissions. This reduction in CO2e
emissions will be achieved through a reduction in the energy
required during the pelletizing process. [1] AMMC’s pellet plant
currently produces 10Mt of pellets annually, of which 7Mt are blast
furnace pellets and 3Mt are direct reduced iron pellets.
- On September 28, 2021, ArcelorMittal announced that it had
signed a letter of intent with the Governments of Belgium and
Flanders, supporting a €1.1 billion project to build a 2.5Mt direct
reduced iron (DRI) plant at its site in Gent, as well as two new
electric furnaces. Project implementation would result in a
reduction of around 3Mt of CO2 emissions each year. The support of
both the national and the Flanders governments in this project is
crucial given the significant cost associated with the transition
to carbon-neutral steelmaking.
- On September 23, 2021, Fitch Ratings agency upgraded
ArcelorMittal S.A.'s (AM) Long-Term Issuer Default Rating (LT IDR)
and senior unsecured rating to 'BBB-' from 'BB+'. The Outlook on
the LT IDR was Stable.
- On September 22, 2021, in line with the authorization granted
by the Extraordinary General Meeting of Shareholders held on June
8, 2021, the Board of ArcelorMittal decided to cancel 50 million
treasury shares to keep the number of treasury shares within
appropriate levels. This cancellation takes into account the shares
already purchased under the US$2.2 billion share buyback announced
on July 29, 2021. As a result of this cancellation, ArcelorMittal
has 982,809,772 shares issued (compared to 1,032,809,772 before the
cancellation). Details on share buyback programs can be found at:
https://corporate.arcelormittal.com/investors/equity-investors/share-buyback-program.
This follows the Board's earlier decision on August 4, 2021 to
cancel 70 million treasury shares to keep the number of treasury
shares within appropriate levels (which had resulted in
ArcelorMittal having 1,032,809,772 shares in issue, compared to
1,102,809,772 before this cancellation).
- On September 10, 2021, the Government of the Republic of
Liberia and ArcelorMittal, signed an amendment to the Mineral
Development Agreement (‘MDA’), for the expansion of the Company’s
mining and logistics operations in Liberia. Upon ratification,
ArcelorMittal Liberia will accelerate construction of the 15Mtpa
concentrator plant project ("phase 2 expansion") project and
significantly ramp up production of premium iron ore, generating
significant new jobs and wider economic benefits for Liberia. The
concentrator phase, to be constructed in modules, will transition
ArcelorMittal Liberia to a premium product category (high grade
concentrate) asset while achieving a low FOB and CIF-China cost
position (with the economies of scale projected to more than offset
the cost of concentration). The expansion project - which
encompasses processing, rail and port facilities - will be one of
the largest mining projects in West Africa. The capital required to
finalize the project is expected to be approximately $0.8 billion,
as it is effectively a brownfield expansion, with the first
concentrate expected in late 2023, ultimately ramping up to 15Mtpa.
Under the agreement, the Company has further expansion
opportunities up to 30Mtpa. Other users may be allowed to invest
for additional rail capacity.
- On September 9, 2021, ArcelorMittal Nippon Steel India
announced the commencement of operations at the Ghoraburhani-
Sagasahi iron ore mine in the district of Sundargarh in Odisha. The
captive mine is set to produce 2Mtpa of high-quality iron ore in
2021 and gradually ramp up production to a rated capacity of 7.2
Mtpa. The iron ore will be supplied to the beneficiation plant in
Dabuna from where the feed will reach the pellet plant at Paradeep
and contribute significantly to meeting AMNS India’s long-term raw
material requirements.
- On September 7, 2021, the German Federal Government expressed
its intention to provide €55 million of funding support towards the
construction of ArcelorMittal’s Hydrogen DRI plant, (which is half
of the €110 million total capital expenditure required). The plant
will become Germany’s first industrial scale hydrogen-based direct
reduced iron (DRI) plant. The next step is for the European
Commission to approve the Federal Government's intention to provide
funding before the installation of the new plant can begin.
Production is scheduled to start in 2025 with the intention to
produce 100,000 tonnes of DRI for steel production using hydrogen
as early as 2025.
- On September 2, 2021, ArcelorMittal Nippon Steel India (AMNS
India) announced the commissioning of a second 6Mtpa iron ore
pelletizing plant at the port city of Paradeep in Odisha. The plant
doubles production capacity at AMNS India’s Paradeep complex to
12Mtpa, making it the largest single-location pelletization complex
in India and taking AMNS India’s pelletization capacity to
20Mtpa.
- On August 9, 2021, Moody's rating agency upgraded
ArcelorMittal's rating to Baa3 from Ba1.
- On July 31, 2021, ArcelorMittal announced that ArcelorMittal
Tubular Products Jubail (AMTPJ) - its Saudi Arabian joint venture
with the Public Investment Fund (PIF) - had completed the
acquisition of Jubail Energy Services Company (JESCO) from TAQA
Industrialization and Energy Services Company. Jesco has a
nameplate capacity of 400ktpa of seamless tubes which will increase
AMTPJ's capacity to 1Mtpa following the acquisition.
ArcelorMittal’s shareholding in AMTPJ, which will operate under the
joint management control of ArcelorMittal and PIF, will reduce to
approximately one-third (from 41%) with PIF’s shareholding
correspondingly increasing to approximately two-thirds.
- On July 30, 2021, ArcelorMittal announced alongside the
Government of Canada, its intention to invest CAD$1.765 billion in
decarbonization technologies at ArcelorMittal Dofasco’s plant in
Hamilton. The intended investments will reduce annual CO2 emissions
at ArcelorMittal’s Hamilton, Ontario operations by approximately
3Mt, within the next seven years. This means the Hamilton plant
will transition away from the blast furnace-basic oxygen furnace
steelmaking production route to the Direct Reduced Iron (DRI) –
Electric Arc Furnace (EAF) production route, which carries a
significantly lower carbon footprint. ArcelorMittal will introduce
new manufacturing processes that contribute to a considerable
reduction of CO2 emissions and deliver other positive environmental
impacts including the elimination of emissions and flaring from
coke making and ironmaking operations. On the same day, the
Government of Canada announced it will invest CAD$400 million in
the project and the Company is in discussions with the Government
of Ontario regarding its support.
Outlook
Based on year-to-date growth and the outlook for
the remainder of the year, ArcelorMittal expects world ex-China
apparent steel consumption (“ASC”) to grow within the +12% to +13%
range presented at the half year results in July 2021.
Due to weakening real demand in China, primarily due to real
estate, our China ASC estimate is weaker than previously forecast.
ArcelorMittal now expects a slight contraction in Chinese apparent
steel demand in 2021. However, the impact on ex-China steel markets
is expected to be limited given that strict production constraints
are expected to lead to lower Chinese net exports in the second
half of 2021 overall as compared to the first half of 2021.
ArcelorMittal Condensed Consolidated Statement of
Financial Position1
In millions of U.S. dollars |
Sept 30,2021 |
Jun 30,2021 |
Dec 31,2020 |
ASSETS |
|
|
|
Cash and cash equivalents and restricted funds |
4,381 |
|
4,184 |
|
5,963 |
|
Trade accounts receivable and other |
5,572 |
|
5,586 |
|
3,072 |
|
Inventories |
18,806 |
|
16,286 |
|
12,328 |
|
Prepaid expenses and other current assets |
4,421 |
|
3,344 |
|
2,281 |
|
Asset held for sale9 |
— |
|
— |
|
4,329 |
|
Total Current Assets |
33,180 |
|
29,400 |
|
27,973 |
|
|
|
|
|
Goodwill and intangible assets |
4,309 |
|
4,557 |
|
4,312 |
|
Property, plant and equipment |
29,599 |
|
30,229 |
|
30,622 |
|
Investments in associates and joint ventures |
10,134 |
|
9,090 |
|
6,817 |
|
Deferred tax assets |
7,787 |
|
7,824 |
|
7,866 |
|
Other assets13 |
3,082 |
|
4,324 |
|
4,462 |
|
Total Assets |
88,091 |
|
85,424 |
|
82,052 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Short-term debt and current portion of long-term debt |
1,796 |
|
2,639 |
|
2,507 |
|
Trade accounts payable and other |
14,108 |
|
14,076 |
|
11,525 |
|
Accrued expenses and other current liabilities |
7,527 |
|
6,201 |
|
5,596 |
|
Liabilities held for sale9 |
— |
|
— |
|
3,039 |
|
Total Current Liabilities |
23,431 |
|
22,916 |
|
22,667 |
|
|
|
|
|
Long-term debt, net of current portion |
6,453 |
|
6,589 |
|
9,815 |
|
Deferred tax liabilities |
1,953 |
|
1,958 |
|
1,832 |
|
Other long-term liabilities |
6,933 |
|
7,636 |
|
7,501 |
|
Total Liabilities |
38,770 |
|
39,099 |
|
41,815 |
|
|
|
|
|
Equity attributable to the equity holders of the parent |
47,116 |
|
44,165 |
|
38,280 |
|
Non-controlling interests |
2,205 |
|
2,160 |
|
1,957 |
|
Total Equity |
49,321 |
|
46,325 |
|
40,237 |
|
Total Liabilities and Shareholders’ Equity |
88,091 |
|
85,424 |
|
82,052 |
|
ArcelorMittal Condensed Consolidated Statement of
Operations1
|
Three months ended |
Nine months ended |
In millions of U.S. dollars unless otherwise
shown |
Sept 30, 2021 |
Jun 30, 2021 |
Sept 30, 2020 |
Sept 30, 2021 |
Sept 30, 2020 |
Sales |
20,229 |
|
19,343 |
|
13,266 |
|
55,765 |
|
39,086 |
|
Depreciation (B) |
(590) |
|
(620) |
|
(739) |
|
(1,811) |
|
(2,249) |
|
Impairment items (B) |
— |
|
— |
|
556 |
|
— |
|
464 |
|
Exceptional items (B) |
(123) |
|
— |
|
— |
|
(123) |
|
(678) |
|
Operating income (A) |
5,345 |
|
4,432 |
|
718 |
|
12,418 |
|
112 |
|
Operating margin % |
26.4 |
% |
22.9 |
% |
5.4 |
% |
22.3 |
% |
0.3 |
% |
|
|
|
|
|
|
Income from associates, joint ventures and other investments |
778 |
|
590 |
|
100 |
|
1,821 |
|
227 |
|
Net interest expense |
(62) |
|
(76) |
|
(106) |
|
(229) |
|
(333) |
|
Foreign exchange and other net financing loss |
(339) |
|
(233) |
|
(150) |
|
(766) |
|
(565) |
|
Income / (loss) before taxes and non-controlling
interests |
5,722 |
|
4,713 |
|
562 |
|
13,244 |
|
(559) |
|
Current tax expense |
(938) |
|
(768) |
|
(204) |
|
(2,275) |
|
(466) |
|
Deferred tax benefit / (expense) |
56 |
|
226 |
|
(580) |
|
447 |
|
(842) |
|
Income tax expense |
(882) |
|
(542) |
|
(784) |
|
(1,828) |
|
(1,308) |
|
Income / (loss) including non-controlling
interests |
4,840 |
|
4,171 |
|
(222) |
|
11,416 |
|
(1,867) |
|
Non-controlling interests income |
(219) |
|
(166) |
|
(39) |
|
(505) |
|
(73) |
|
Net income / (loss) attributable to equity holders of the
parent |
4,621 |
|
4,005 |
|
(261) |
|
10,911 |
|
(1,940) |
|
|
|
|
|
|
|
Basic earnings / (loss) per common share ($) |
4.17 |
|
3.47 |
|
(0.21) |
|
9.52 |
|
(1.73) |
|
Diluted earnings / (loss) per common share ($) |
4.16 |
|
3.46 |
|
(0.21) |
|
9.49 |
|
(1.73) |
|
|
|
|
|
|
|
Weighted average common shares outstanding (in millions) |
1,109 |
|
1,154 |
|
1,228 |
|
1,147 |
|
1,120 |
|
Diluted weighted average common shares outstanding (in
millions) |
1,112 |
|
1,157 |
|
1,228 |
|
1,150 |
|
1,120 |
|
|
|
|
|
|
|
OTHER INFORMATION |
|
|
|
|
|
EBITDA (C = A-B) |
6,058 |
|
5,052 |
|
901 |
|
14,352 |
|
2,575 |
|
EBITDA Margin % |
29.9 |
% |
26.1 |
% |
6.8 |
% |
25.7 |
% |
6.6 |
% |
|
|
|
|
|
|
Total group iron ore production (Mt) |
13.0 |
|
11.2 |
|
14.8 |
|
37.5 |
|
42.7 |
|
Crude steel production (Mt) |
17.2 |
|
17.8 |
|
17.2 |
|
52.6 |
|
52.7 |
|
Steel shipments (Mt) |
14.6 |
|
16.1 |
|
17.5 |
|
47.2 |
|
51.8 |
|
ArcelorMittal Condensed Consolidated
Statement of Cash flows1
|
Three months ended |
Nine months ended |
In millions of U.S. dollars |
Sept 30, 2021 |
Jun 30, 2021 |
Sept 30, 2020 |
Sept 30, 2021 |
Sept 30, 2020 |
Operating activities: |
|
|
|
|
|
Income /(loss) attributable to equity holders of the
parent |
4,621 |
|
4,005 |
|
(261) |
|
10,911 |
|
(1,940) |
|
Adjustments to reconcile net income/ (loss) to net cash provided by
operations: |
|
|
|
|
|
Non-controlling interests income |
219 |
|
166 |
|
39 |
|
505 |
|
73 |
|
Depreciation and impairment items |
590 |
|
620 |
|
183 |
|
1,811 |
|
1,785 |
|
Exceptional items |
123 |
|
— |
|
— |
|
123 |
|
678 |
|
Income from associates, joint ventures and other investments |
(778) |
|
(590) |
|
(100) |
|
(1,821) |
|
(227) |
|
Deferred tax (benefit) / expense |
(56) |
|
(226) |
|
580 |
|
(447) |
|
842 |
|
Change in working capital |
(2,896) |
|
(1,901) |
|
1,072 |
|
(6,431) |
|
571 |
|
Other operating activities (net) |
619 |
|
238 |
|
257 |
|
1,100 |
|
884 |
|
Net cash provided by operating activities (A) |
2,442 |
|
2,312 |
|
1,770 |
|
5,751 |
|
2,666 |
|
Investing activities: |
|
|
|
|
|
Purchase of property, plant and equipment and intangibles (B) |
(675) |
|
(569) |
|
(520) |
|
(1,863) |
|
(1,771) |
|
Other investing activities (net) |
1,184 |
|
687 |
|
34 |
|
2,758 |
|
166 |
|
Net cash provided by / (used in) investing
activities |
509 |
|
118 |
|
(486) |
|
895 |
|
(1,605) |
|
Financing activities: |
|
|
|
|
|
Net payments relating to payable to banks and long-term debt |
(806) |
|
(2,232) |
|
(270) |
|
(3,662) |
|
(889) |
|
Dividends paid to ArcelorMittal shareholders |
(28) |
|
(284) |
|
— |
|
(312) |
|
— |
|
Dividends paid to minorities (C) |
(157) |
|
(17) |
|
(55) |
|
(239) |
|
(165) |
|
Share buyback |
(1,703) |
|
(997) |
|
(13) |
|
(3,350) |
|
(13) |
|
Common share offering |
— |
|
— |
|
— |
|
— |
|
740 |
|
Proceeds from Mandatorily Convertible Notes |
— |
|
— |
|
— |
|
— |
|
1,237 |
|
Lease payments and other financing activities (net) |
(46) |
|
(250) |
|
(63) |
|
(345) |
|
(181) |
|
Net cash (used in) / provided by financing
activities |
(2,740) |
|
(3,780) |
|
(401) |
|
(7,908) |
|
729 |
|
Net increase / (decrease) in cash and cash equivalents |
211 |
|
(1,350) |
|
883 |
|
(1,262) |
|
1,790 |
|
Cash and cash equivalents transferred from / (to) assets held for
sale |
— |
|
10 |
|
(70) |
|
3 |
|
(70) |
|
Effect of exchange rate changes on cash |
(9) |
|
47 |
|
73 |
|
(68) |
|
(71) |
|
Change in cash and cash equivalents |
202 |
|
(1,293) |
|
886 |
|
(1,327) |
|
1,649 |
|
|
|
|
|
|
|
Free cash flow (D=A+B+C)14 |
1,610 |
|
1,726 |
|
1,195 |
|
3,649 |
|
730 |
|
Appendix 1: Product shipments by
region(1)
(000'kt) |
3Q 21 |
2Q 21 |
3Q 20 |
9M 21 |
9M 20 |
Flat |
1,613 |
|
1,896 |
|
3,779 |
|
5,331 |
|
11,960 |
|
Long |
770 |
|
794 |
|
746 |
|
2,349 |
|
2,077 |
|
NAFTA |
2,280 |
|
2,590 |
|
4,435 |
|
7,381 |
|
13,768 |
|
Flat |
1,523 |
|
1,599 |
|
1,047 |
|
4,635 |
|
3,398 |
|
Long |
1,325 |
|
1,381 |
|
1,393 |
|
4,076 |
|
3,472 |
|
Brazil |
2,829 |
|
2,964 |
|
2,425 |
|
8,661 |
|
6,835 |
|
Flat |
5,333 |
|
5,751 |
|
6,025 |
|
17,697 |
|
17,697 |
|
Long |
2,121 |
|
2,404 |
|
2,080 |
|
6,815 |
|
6,304 |
|
Europe |
7,551 |
|
8,293 |
|
8,187 |
|
24,857 |
|
24,304 |
|
CIS |
1,684 |
|
2,097 |
|
1,914 |
|
5,816 |
|
5,773 |
|
Africa |
679 |
|
703 |
|
585 |
|
1,942 |
|
1,732 |
|
ACIS |
2,367 |
|
2,801 |
|
2,499 |
|
7,763 |
|
7,508 |
|
Note: “Others and eliminations” are not presented in the
table
Appendix 2a: Capital
expenditures(1,2)
(USDm) |
3Q 21 |
2Q 21 |
3Q 20 |
9M 21 |
9M 20 |
NAFTA |
118 |
|
73 |
|
96 |
|
265 |
|
445 |
|
Brazil |
102 |
|
91 |
|
49 |
|
241 |
|
150 |
|
Europe |
231 |
|
235 |
|
222 |
|
809 |
|
714 |
|
ACIS |
139 |
|
120 |
|
102 |
|
353 |
|
342 |
|
Mining |
78 |
|
43 |
|
42 |
|
175 |
|
94 |
|
Total |
675 |
|
569 |
|
520 |
|
1,863 |
|
1,771 |
|
Note: “Others” are not presented in the table
Appendix 2b: Capital expenditure projects
The following tables summarize the Company’s principal growth
and optimization projects involving significant capex.
Ongoing projects
Segment |
Site / unit |
Project |
Capacity / details |
Key date / forecast completion |
NAFTA |
Mexico |
New Hot strip mill |
Production capacity of 2.5Mt/year |
2021 (a) |
NAFTA |
ArcelorMittal Dofasco (Canada) |
Hot strip mill modernization |
Replace existing three end of life coilers with two state of the
art coilers and new runout tables |
1H 2022 (b) |
NAFTA |
ArcelorMittal Dofasco (Canada) |
#5 CGL conversion to AluSi® |
Addition of up to 160kt/year Aluminum Silicon (AluSi®) coating
capability to #5 Hot-Dip Galvanizing Line for the production of
Usibor® steels |
2H 2022 (c) |
Brazil |
ArcelorMittal Vega Do Sul |
Expansion project |
Increase hot dipped / cold rolled coil capacity and construction of
a new 700kt continuous annealing line (CAL) and continuous
galvanising line (CGL) combiline |
4Q 2023 (d) |
Mining |
Liberia mine |
Phase 2 premium product expansion project |
Increase production capacity to 15Mt/year |
4Q 2023 (e) |
Mexico |
Las Truchas mine |
Revamping and capacity increase to 2.3MT |
Revamping project with 1Mtpa pellet feed capacity increase (to 2.3
Mt/year) with DRI concentrate grade capability |
2H 2023 (f) |
Brazil |
Serra Azul mine |
4.5Mtpa direct reduction pellet feed plant |
Facilities to produce 4.5Mt/year DRI quality pellet feed by
exploiting compact itabirite iron ore |
2H 2023 (g) |
Brazil |
Monlevade |
Sinter plant, blast furnace and melt shop |
Increase in liquid steel capacity by 1.0Mt/year; Sinter feed
capacity of 2.3Mt/year |
2H 2024 (h) |
Brazil |
Juiz de Fora |
Melt shop expansion |
Increase in melt shop capacity by 0.2Mt/year |
On hold (i) |
a) On September 28, 2017, ArcelorMittal announced a major $1.0
billion investment programme at its Mexican operations, which is
focused on building ArcelorMittal Mexico’s downstream capabilities,
sustaining the competitiveness of its mining operations and
modernizing its existing asset base. The programme is designed to
enable ArcelorMittal Mexico to meet the anticipated increased
demand requirements from domestic customers, realize in full
ArcelorMittal Mexico’s production capacity of 5.3Mt and
significantly enhance the proportion of higher added-value products
in its product mix. The main investment will be the construction of
a new hot strip mill. Upon completion, the project will enable
ArcelorMittal Mexico to produce c.2.5Mt of flat rolled steel, long
steel c.1.5Mt and the remainder made up of semi-finished slabs.
Coils from the new hot strip mill will be supplied to domestic,
non-auto, general industry customers. The hot strip mill project
commenced late 4Q 2017 and is expected to be completed at the end
of 2021. In addition to the HSM, a push pull pickling line (PPPL)
is to be constructed to capture additional domestic volume through
hot rolled pickled and oiled products. The PPPL has a capacity of
up to 0.75Mtpa, and the first pickled and oiled coils are expected
to be produced by 2H 2024.
b) Investment in ArcelorMittal Dofasco (Canada) to modernize the
hot strip mill. The project is to install two new state of the art
coilers and runout tables to replace three end of life coilers. The
strip cooling system will be upgraded and include innovative power
cooling technology to improve product capability. The project is
expected to be completed in 1H 2022.
c) Investment to replace #5 Hot-Dip Galvanizing Line Galvanneal
coating capability with 160kt/year Aluminum Silicon (AluSi®)
capability for the production of ArcelorMittal’s patented Usibor®
Press Hardenable Steel for automotive structural and safety
components. With the investment, ArcelorMittal Dofasco will become
the only Canadian producer of AluSi® coated Usibor®. This
investment complements additional strategic North America
developments, including a new EAF and caster at Calvert in the US
and a new hot strip mill in Mexico, and will allow to capitalize on
increasing Auto Aluminized PHS demand in North America. The project
is expected to be completed in 2022, with the first coil planned
for 2H 2022.
d) In February 2021, ArcelorMittal announced the resumption of
the Vega Do Sul expansion to provide an additional 700kt of
cold-rolled annealed and galvanized capacity to serve the growing
domestic market. The ~$0.35 billion investment programme to
increase rolling capacity with construction of a new continuous
annealing line and CGL combiline (and the option to add a ca. 100kt
organic coating line to serve construction and appliance segments),
and upon completion, will strengthen ArcelorMittal’s position in
the fast growing automotive and industry markets through Advanced
High Strength Steel products. The investments will look to
facilitate a wide range of products and applications whilst further
optimizing current ArcelorMittal Vega facilities to maximize site
capacity and its competitiveness, considering comprehensive digital
and automation technology. The project is expected to be completed
in 4Q 2023.
e) ArcelorMittal Liberia has been operating a 5Mt direct
shipping ore (DSO) since 2011 (Phase 1). In 2013, the Company had
started construction of a Phase 2 project that envisaged the
construction of 15Mtpa of concentrate sinter fines capacity and
associated infrastructure; this project was then suspended due to
the onset of Ebola in West Africa and the subsequent force-majeure
declaration by the onsite contracting companies. ArcelorMittal has
signed on September 10, 2021, with the Government of the Republic
of Liberia an amendment to its Mineral Development Agreement which,
upon ratification, will lead to the acceleration of construction of
the 15Mtpa concentrator plant project ("phase 2 expansion"). Final
detailed engineering is in progress, whilst site preparation and
tenders for key construction contracts and remaining equipment are
underway. Under this project, first concentrate product is expected
in late 2023, ramping up to 15Mtpa thereafter. The capex required
to conclude the project is expected to total approximately $0.8
billion as the project is effectively a brownfield opportunity
given that more than 85% of the procurement and 60% of civil
construction had already been completed. Under the agreement, the
Company has further expansion opportunities up to 30Mtpa. Other
users may be allowed to invest for additional rail capacity.
f) ArcelorMittal Mexico is investing ~$150 million to increase
pellet feed production by 1Mtpa to 2.3Mtpa and improve concentrate
grade in Las Truchas. This project will enable concentrate
production to the blast furnace (BF) route (1.9Mtpa) and direct
reduced iron (DRI) route (0.4Mtpa) for a total of 2.3Mtpa. Primary
target is to supply ArcelorMittal Mexico steel operations with high
quality feed. Production start up expected in 2H 2023.
g) Approximately $350 million investment at Serra Azul (Brazil)
to construct facilities to produce 4.5Mtpa of DRI quality pellet
feed to primarily supply ArcelorMittal Mexico steel operation. The
project will allow to mine the compact itabirite iron ore. Project
start up expected in 2H 2023.
h) The Monlevade upstream expansion project consisting of the
sinter plant, blast furnace and meltshop is to recommence in 4Q
2021, following the anticipated improvement in Brazil domestic
market. The project is expected to be completed in 2H 2024 with
capex requirement of approximately $0.5 billion.
i) Although the Juiz de Fora rebar expansion was completed in
2015, the melt shop expansion project is currently on hold.
Appendix 3: Debt repayment schedule as of September 30,
2021
(USD billion) |
2021 |
2022 |
2023 |
2024 |
2025 |
>2025 |
Total |
Bonds |
— |
|
0.6 |
1.3 |
0.9 |
1.0 |
2.0 |
5.8 |
Commercial paper |
0.5 |
— |
|
— |
|
— |
|
— |
|
— |
|
0.5 |
Other loans |
0.5 |
0.3 |
0.2 |
0.2 |
0.2 |
0.5 |
1.9 |
Total gross debt |
1.0 |
0.9 |
1.5 |
1.1 |
1.2 |
2.5 |
8.2 |
Appendix 4: Reconciliation of gross debt to net debt as
of September 30, 2021
(USD million) |
Sept 30, 2021 |
Jun 30, 2021 |
Dec 31, 2020 |
Gross debt (excluding that held as part of the liabilities
held for sale) |
8,249 |
|
9,228 |
|
12,322 |
|
Gross debt held as part of the liabilities held for sale |
— |
|
— |
|
24 |
|
Gross debt |
8,249 |
|
9,228 |
|
12,346 |
|
Less: Cash and cash equivalents and restricted funds |
(4,381) |
|
(4,184) |
|
(5,963) |
|
Less: Cash and cash equivalents and restricted funds held as part
of the assets held for sale |
— |
|
— |
|
(3) |
|
Net debt (including that held as part of assets and the
liabilities held for sale) |
3,868 |
|
5,044 |
|
6,380 |
|
|
|
|
|
Net debt / LTM EBITDA |
0.2 |
|
0.5 |
|
1.5 |
|
Appendix 5: Adjusted net income / (loss) as of September
30, 2021
(USD million) |
3Q 21 |
2Q 21 |
3Q 20 |
9M 21 |
9M 20 |
Net income / (loss) |
4,621 |
|
4,005 |
|
(261) |
|
10,911 |
|
(1,940) |
|
Impairment items |
— |
|
— |
|
556 |
|
— |
|
464 |
|
Exceptional items |
(123) |
|
— |
|
— |
|
(123) |
|
(678) |
|
Derecognition of deferred tax assets on disposal of ArcelorMittal
USA |
— |
|
— |
|
(624) |
|
— |
|
(624) |
|
Adjusted net income / (loss) |
4,744 |
|
4,005 |
|
(193) |
|
11,034 |
|
(1,102) |
|
Appendix 6: Terms and
definitions
Unless indicated otherwise, or the context otherwise requires,
references in this earnings release report to the following terms
have the meanings set out next to them below:Adjusted net
income / (loss): refers to reported net income/(loss) less
impairment items, exceptional items and derecognition of deferred
tax assets on disposal of ArcelorMittal USA.Apparent steel
consumption: calculated as the sum of production plus
imports minus exports.Average steel selling
prices: calculated as steel sales divided by steel
shipments.Cash and cash equivalents and restricted
funds: represents cash and cash equivalents, restricted
cash, restricted funds and short-term
investments.Capex: represents the purchase of
property, plant and equipment and intangibles.Crude steel
production: steel in the first solid state after melting,
suitable for further processing or for
sale.EBITDA: operating results plus depreciation,
impairment items and exceptional
items.EBITDA/tonne: calculated as EBITDA divided
by total steel shipments.Exceptional items: income
/ (charges) relate to transactions that are significant, infrequent
or unusual and are not representative of the normal course of
business of the period.Foreign exchange and other net
financing (loss): include foreign currency exchange
impact, bank fees, interest on pensions, impairment of financial
assets, revaluation of derivative instruments and other charges
that cannot be directly linked to operating results.Free
cash flow (FCF): refers to net cash provided by operating
activities less capex less dividends paid to minority
shareholdersGross debt: long-term debt and
short-term debt (including that held as part of the liabilities
held for sale).Impairment items: refers to
impairment charges net of reversals. Liquidity:
cash and cash equivalents and restricted funds plus available
credit lines excluding back-up lines for the commercial paper
program.LTIF: lost time injury frequency rate
equals lost time injuries per 1,000,000 worked hours, based on own
personnel and contractors.Mt: refers to million
metric tonnes.Net debt: long-term debt and
short-term debt less cash and cash equivalents and restricted funds
(including those held as part of assets and liabilities held for
sale).Net debt/LTM EBITDA: refers to Net debt
divided by EBITDA (as used in the Company’s financial reporting)
over the last twelve months.Net interest expense:
includes interest expense less interest incomeOn-going
projects: refer to projects for which construction has
begun (excluding various projects that are under development), even
if such projects have been placed on hold pending improved
operating conditions.Operating results: refers to
operating income/(loss).Operating segments: NAFTA
segment includes the Flat, Long and Tubular operations of Canada,
Mexico; and also includes all Mexico mines (for 2020 and 2021
onwards) and Hibbing, Minorca, Princeton mines (for each periods of
2020, as they were included in the ArcelorMittal USA assets sold to
Cleveland-Cliffs group in Dec 2020). The Brazil segment includes
the Flat, Long and Tubular operations of Brazil and its neighboring
countries including Argentina, Costa Rica, Venezuela; and also
includes Andrade and Serra Azul captive iron ore mines. The Europe
segment includes the Flat, Long and Tubular operations of the
European business, as well as Downstream Solutions, and also
includes Bosnia and Herzegovina capital iron ore mines. The ACIS
segment includes the Flat, Long and Tubular operations of
Kazakhstan, Ukraine and South Africa; and also includes the captive
iron ore mines in Ukraine and iron ore and coal mines in
Kazakhstan). Mining segment includes iron ore operations of
ArcelorMittal Mines Canada and ArcelorMittal Liberia.Own
iron ore production: includes total of all finished
production of fines, concentrate, pellets and lumps and includes
share of production.Price-cost effect: a lack of
correlation or a lag in the corollary relationship between raw
material and steel prices, which can either have a positive (i.e.,
increased spread between steel prices and raw material costs) or
negative effect (i.e., a squeeze or decreased spread between steel
prices and raw material costs). Iron ore reference
prices: refers to iron ore prices for 62% Fe CFR
China.Shipments: information at segment and group
level eliminates intra-segment shipments (which are primarily
between Flat/Long plants and Tubular plants) and inter-segment
shipments respectively. Shipments of Downstream Solutions are
excluded.Working capital change (working capital investment
/ release): Movement of change in working capital - trade
accounts receivable plus inventories less trade and other accounts
payable.
Footnotes
- The financial information in this press release has been
prepared consistently with International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting
Standards Board (“IASB”) and as adopted by the European Union. The
interim financial information included in this announcement has
also been prepared in accordance with IFRS applicable to interim
periods, however this announcement does not contain sufficient
information to constitute an interim financial report as defined in
International Accounting Standard 34, “Interim Financial
Reporting”. The numbers in this press release have not been
audited. The financial information and certain other information
presented in a number of tables in this press release have been
rounded to the nearest whole number or the nearest decimal.
Therefore, the sum of the numbers in a column may not conform
exactly to the total figure given for that column. In addition,
certain percentages presented in the tables in this press release
reflect calculations based upon the underlying information prior to
rounding and, accordingly, may not conform exactly to the
percentages that would be derived if the relevant calculations were
based upon the rounded numbers. This press release also includes
certain non-GAAP financial/alternative performance measures.
ArcelorMittal presents EBITDA, and EBITDA/tonne, which are non-GAAP
financial/alternative performance measures and calculated as shown
in the Condensed Consolidated Statement of Operations, as
additional measures to enhance the understanding of operating
performance. ArcelorMittal believes such indicators are relevant to
describe trends relating to cash generating activity and provides
management and investors with additional information for comparison
of the Company’s operating results to the operating results of
other companies. Segment information presented in this press
release is prior to inter-segment eliminations and certain
adjustments made to operating result of the segments to reflect
corporate costs, income from non-steel operations (e.g., logistics
and shipping services) and the elimination of stock margins between
the segments. ArcelorMittal also presents net debt and change in
working capital as additional measures to enhance the understanding
of its financial position, changes to its capital structure and its
credit assessment. ArcelorMittal also presents adjusted net income
/ (loss) as it believes it is a useful measure for the underlying
business performance excluding impairment items, exceptional items
and derecognition of deferred tax assets on disposal of
ArcelorMittal USA. The Company’s guidance as to its working capital
release (or the change in working capital included in net cash
provided by operating activities) for the fourth quarter of 2021 is
based on the same accounting policies as those applied in the
Company’s financial statements prepared in accordance with IFRS.
ArcelorMittal also presents free cash flow (FCF), which is a
non-GAAP financial/alternative performance measure calculated as
shown in the Condensed Consolidated Statement of Cash Flows,
because it believes it is a useful supplemental measure for
evaluating the strength of its cash generating capacity. The
Company has revised the definition of free cash flow to include
dividends paid to minority shareholders in order to reflect the
measure it will use to determine dividends that will be paid under
its new dividend policy. The Company also presents the ratio of net
debt to EBITDA for the last twelve-month period, which investors
may find useful in understanding the Company's ability to service
its debt. Such non-GAAP/alternative performance measures may not be
comparable to similarly titled measures applied by other companies.
Non-GAAP financial/alternative performance measures should be read
in conjunction with, and not as an alternative for, ArcelorMittal's
financial information prepared in accordance with IFRS.
- New segmentation reporting: Following the Company’s steps to
streamline and optimize the business, primary responsibility for
captive mining operations have been moved to the Steel segments
(which are primary consumers of the mines' output). The Mining
segment will retain primary responsibility for the operation of
ArcelorMittal Mines Canada (AMMC) and Liberia and will continue to
provide technical support to all mining operations within the
Company. As a result, effective 2Q 2021, ArcelorMittal has
retrospectively amended its presentation of reportable segments to
reflect this organizational change, as required by IFRS. Only the
operations of AMMC and Liberia are reported within the Mining
segment. The results of each other mine are accounted for within
the steel segment that it primarily supplies. Summary of changes:
NAFTA: all Mexico mines (for 2020 and 2021 onwards) and Hibbing,
Minorca, Princeton mines (each quarter of 2020, as they were
included in the ArcelorMittal USA assets sold to Cliffs in Dec
2020); Brazil: Andrade and Serra Azul mines; Europe: ArcelorMittal
Prijedor mine (Bosnia and Herzegovina); ACIS: Kazakhstan and
Ukraine mines; and Mining: only AMMC and Liberia iron ore
mines.
- LTIF figures presented for 3Q 2021 of 0.76x excludes
ArcelorMittal Italia (deconsolidated as from 2Q 2021 onwards) and
ArcelorMittal USA (no longer in scope as sold to Cleveland Cliffs
on December 9, 2020) and compares with 0.89x in 2Q 2021.
- AMNS India has plans to debottleneck operations (steel shop and
rolling parts) and achieve capacity of 8.6Mt per annum, with
medium-term plans to expand and grow to 14Mt per annum and then to
18Mt per annum. The Thakurani mines is now operating at full
5.5Mtpa capacity since 1Q 2021, while the second Odisha pellet
plant has been commission and started in September 2021, adding
6Mtpa for a total 20Mtpa of pellet capacity. In addition, in
September 2021, AMNS India commenced operations at Ghoraburhani -
Sagasahi iron ore mine in Odisha. The mine is set to produce 2Mtpa
of high-quality iron ore in the current year and gradually ramp up
production to a rated capacity of 7.2Mtpa and contribute
significantly to meeting AMNS India’s long-term raw material
requirements. AMNS India signed a Memorandum of Understanding (MoU)
with the Government of Odisha to set-up an integrated steel plant
with a 12Mtpa capacity in Kendrapara district of state Odisha.
Pre-feasibility study report was submitted to the state government
in 3Q 2021, and we are currently engaging with them for further
studies and clearances.
- AMNS Calvert (Calvert) has plans to construct a new 1.5Mt EAF
and caster to be completed 1H 2023. The joint venture is to invest
$775 million.
- See Appendix 5 for reconciliation of adjusted net income
/(loss).
- ArcelorMittal Mines Canada, otherwise known as ArcelorMittal
Mines and Infrastructure Canada.
- On December 19, 2018, ArcelorMittal signed a $5,500,000,000
Revolving Credit Facility, with a five-year maturity plus two
one-year extension options. During the fourth quarter of 2019,
ArcelorMittal executed the option to extend the facility to
December 19, 2024. The extension was completed for $5.4 billion of
the available amount, with the remaining $0.1 billion remaining
with a maturity of December 19, 2023. In December 2020,
ArcelorMittal executed the second option to extend the facility,
and the new maturity is now extended to December 19, 2025. As of
September 30, 2021, the $5.5 billion revolving credit facility was
fully available.
- Assets and liabilities held for sale as of December 31, 2020
included the assets and liabilities of ArcelorMittal Italia and
heavy plate assets in Europe.
- XCarb™ is designed to bring together all of ArcelorMittal’s
reduced, low and zero-carbon products and steelmaking activities,
as well as wider initiatives and green innovation projects, into a
single effort focused on achieving demonstrable progress towards
carbon neutral steel. Alongside the new XCarb™ brand, we have
launched three XCarb™ initiatives: the XCarb™ innovation fund,
XCarb™ green steel certificates and XCarb™ recycled and renewably
produced for products made via the Electric Arc Furnace route using
scrap. The Company is offering green steel using a system of
certificates. These will be issued by an independent auditor to
certify tonnes of CO2 savings achieved through the Company’s
investment in decarbonization technologies in Europe. Net-zero
equivalence is determined by assigning CO2 savings certificates
equivalent to CO2 per tonne of steel produced in 2018 as the
reference. The certificates will relate to the tonnes of CO2 saved
in total, as a direct result of the decarbonization projects being
implemented across a number of its European sites.
- The Investment Agreement stipulates a second equity injection
by Invitalia, of up to €680 million, to fund the completion
of the purchase of Ilva’s business by Acciaierie d’Italia,
which is expected by May 2022 subject to certain conditions
precedent. At this point, Invitalia’s shareholding in Acciaierie
d’Italia would increase to 60%, with ArcelorMittal to invest up to
€70 million to retain a 40% shareholding and joint control over the
company. The conditions precedent include: the amendment of the
existing environmental plan to account for changes in the new
industrial plan; the lifting of all criminal seizures on the
Taranto plant; and the absence of restrictive measures – in the
context of criminal proceedings where Ilva is a defendant – being
imposed against Acciaierie d’Italia Holding or its subsidiaries. In
case conditions precedent are not met, then the Acciaierie d’Italia
Holding would not be required to complete the purchase of Ilva’s
assets and its capital invested would be returned.
- In addition to the AMNS India and Calvert joint ventures, the
Company has important investments in China that provide valuable
dividend streams and growth optionality. VAMA, our 50:50 joint
venture with Hunan Valin, is a state-of-the-art facility focused on
rolling steel for high-demanding applications in particular
automotive. The business is performing well and plans to expand the
current capacity by 40% to 2Mtpa over the next 2 years, financed
from its own resources. The investment will allow VAMA to broaden
its product portfolio and further enhance its competitiveness. This
will in turn enable VAMA to meet the growing demand of high value
add solutions from the Chinese automotive / new energy vehicle
(NEV) market and propel it to be among the top 3 automotive steel
players in China by 2025. ArcelorMittal also owns a 37% interest in
China Oriental, one of the largest H-Beam producers in China which
has recently upgraded its asset portfolio and benefits from a
strong balance sheet position.
- As of September 30, 2021, other assets include these main
listed investments of Erdemir (12%) at market value of $792
million. As of June 30, 2021, other assets include these main
listed investments of Cleveland Cliffs at market value of $1,258
million (which have since been redeemed) and Erdemir (12%) at
market value of $876 million. As of December 31, 2020, other assets
included amongst others the listed investment of Cleveland Cliffs
(16%) at market value of $1,988 million and Erdemir (12%) at market
value of $850 million.
- The Company has revised the definition of free cash flow to
include dividends paid to minority shareholders in order to reflect
the measure it will use to determine dividends that will be paid
under its new dividend policy. The comparative figures for free
cash flow under the prior definition of cash flow from operations
less capex were inflows in 3Q 2021 of $1,767 million, $1,743
million for 2Q 2021, $1,250 million for 3Q 2020, $3,888 million for
9M 2021 and $895 million for 9M 2020.
- Segment “Other & eliminations” EBITDA result was a loss of
$209 million in 3Q 2021 as compared to an income of $47 million in
2Q 2021 and to a loss of $171 million in 3Q 2020 principally due to
the increase of the stock margin eliminations driven by the
increase of the intra-group stock sales between steel and mining
businesses.
- FY 2021 figures include $0.1 billion capex related to
ArcelorMittal Italia which has been deconsolidated from 2Q 2021
onwards).
- Total steel shipments in 3Q 2021 were 14.6Mt, 9.0% lower as
compared with 16.1Mt in 2Q 2021. Adjusted for the change in scope
(i.e. excluding the shipments of ArcelorMittal Italia,
deconsolidated as from April 14, 2021) steel shipments in 3Q 2021
decreased 8.4% as compared to 2Q 2021.
- On April 1, 2018, ArcelorMittal completed the acquisition of
Votorantim Siderurgia (subsequently renamed ArcelorMittal Sul
Fluminense "AMSF"), Votorantim S.A.'s long steel business in Brazil
pursuant to which Votorantim Siderurgia became a wholly-owned
subsidiary of ArcelorMittal Brasil. The acquisition was completed
through the issuance of preferred shares to Votorantim S.A.
representing a 2.99% interest in ArcelorMittal Brasil. Pursuant to
the shareholders' agreement, such preferred shares are subject to
put and call option arrangements exercisable by Votorantim S.A. and
ArcelorMittal Brasil between July 1, 2019 and December 31, 2022 and
between January 1, 2023 and December 31, 2024, respectively. The
Company determined that it has a present ownership interest in the
preferred shares subject to the put option. In 3Q 2021, the Company
recognized a $82 million charge in connection with the put option
granted to Votorantim, and for which ArcelorMittal recognized a
liability corresponding to the net present value of the redemption
amount based on past and future EBITDA projections subject to
certain adjustments.
Third quarter 2021 earnings analyst
conference callArcelorMittal management will host a
conference call for members of the investment community to present
and comment on the three-month period ended September 30, 2021 on:
Thursday November 11, 2021 at 9.30am US Eastern time;
14.30pm London time and 15.30pm CET.
The
dial in numbers are: |
|
|
Location |
Toll free dial in numbers |
Local
dial in numbers |
Participant |
UK local: |
0808 238 0676 |
+44 (0)203 057 6900 |
7995055# |
US local: |
+1 866 220 1433 |
+1 347 903 0960 |
7995055# |
France: |
0805 101 469 |
+33 1 7070 6079 |
7995055# |
Germany: |
0800 588 9185 |
+49 69 2222 2624 |
7995055# |
Spain: |
900 828 532 |
+34 914 144 464 |
7995055# |
Luxembourg: |
800 23 023 |
+352 2786 0311 |
7995055# |
Join the call via telephone using the participant code 7995055#
or alternatively use the live audio webcast link.
https://interface.eviscomedia.com/player/1140/
Please visit the results section on our website to listen to the
reply once the event has finished
https://corporate.arcelormittal.com/investors/results
Forward-Looking StatementsThis
document may contain forward-looking information and statements
about ArcelorMittal and its subsidiaries. These statements include
financial projections and estimates and their underlying
assumptions, statements regarding plans, objectives and
expectations with respect to future operations, products and
services, and statements regarding future performance.
Forward-looking statements may be identified by the words
“believe”, “expect”, “anticipate”, “target” or similar expressions.
Although ArcelorMittal’s management believes that the expectations
reflected in such forward-looking statements are reasonable,
investors and holders of ArcelorMittal’s securities are cautioned
that forward-looking information and statements are subject to
numerous risks and uncertainties, many of which are difficult to
predict and generally beyond the control of ArcelorMittal, that
could cause actual results and developments to differ materially
and adversely from those expressed in, or implied or projected by,
the forward-looking information and statements. These risks and
uncertainties include those discussed or identified in the filings
with the Luxembourg Stock Market Authority for the Financial
Markets (Commission de Surveillance du Secteur Financier) and the
United States Securities and Exchange Commission (the “SEC”) made
or to be made by ArcelorMittal, including ArcelorMittal’s latest
Annual Report on Form 20-F on file with the SEC. ArcelorMittal
undertakes no obligation to publicly update its forward-looking
statements, whether as a result of new information, future events,
or otherwise.
About
ArcelorMittalArcelorMittal is the world's leading steel
and mining company, with a presence in 60 countries and an
industrial footprint in 18 countries. Guided by a philosophy to
produce safe, sustainable steel, we are the leading supplier of
quality steel in the major global steel markets including
automotive, construction, household appliances and packaging, with
world-class research and development and outstanding distribution
networks.
Through our core values of sustainability, quality and
leadership, we operate responsibly with respect to the health,
safety and wellbeing of our employees, contractors and the
communities in which we operate. For us, steel is the fabric of
life, as it is at the heart of the modern world from railways to
cars and washing machines. We are actively researching and
producing steel-based technologies and solutions that make many of
the products and components people use in their everyday lives more
energy efficient.
We are one of the world’s largest producers of iron ore. With a
geographically diversified portfolio of iron ore assets, we are
strategically positioned to serve our network of steel plants and
the external global market. While our steel operations are
important customers, our supply to the external market is
increasing as we grow. In 2020, ArcelorMittal had revenues of $53.3
billion and crude steel production of 71.5 million metric tonnes,
while own iron ore production reached 58.0 million metric
tonnes.
ArcelorMittal is listed on the stock exchanges of New York (MT),
Amsterdam (MT), Paris (MT), Luxembourg (MT) and on the Spanish
stock exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS).
For more information about ArcelorMittal please
visit: http://corporate.arcelormittal.com/
EnquiriesArcelorMittal investor
relations: +44 207 543 1128; Retail: +44 207 543 1156; SRI: +44 207
543 1156 and Bonds/credit: +33 1 71 92 10 26.
ArcelorMittal corporate communications (E-mail:
press@arcelormittal.com) +44 207 629 7988. Contact: Paul Weigh +44
203 214 2419
- 3Q21 Earnings release Final 111121.pdf
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