ArcelorMittal reports first quarter 2021 results
Luxembourg, May 6, 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 for
the three-months ended March 31, 2021.
1Q 2021 Key highlights:
- Health and safety performance: Protecting the health and
wellbeing of employees remains the Company’s overarching priority;
LTIF rate of 0.78x in 1Q 20212
- Significantly improved operating performance in 1Q 2021,
reflecting the continued demand recovery which supported a 6.5%
sequential increase in steel shipments (to 16.5Mt vs. scope
adjusted3 15.5Mt in 4Q 2020), the continued positive evolution of
steel spreads, and the benefits of iron ore vertical
integration
- 1Q 2021 operating income of $2.6bn vs. $2.0bn4 in 4Q 2020.
EBITDA of $3.2bn in 1Q 2021, 88% higher than 4Q 2020 EBITDA of
$1.7bn (vs. $1.0bn in 1Q 2020), represents the strongest quarter in
a decade
- Share of JV and associates net income of $0.5bn19 reflects
strong performance at AMNS India and AMNS Calvert
- Net income of $2.3bn in 1Q 2021 as compared to net income of
$1.2bn and adjusted net income of $0.2bn in 4Q 20205
- The Company delivered $0.3bn of free cash flow ($1.0bn net cash
provided by operating activities less capex of $0.6bn less $0.1bn
dividends paid to minorities) despite a $1.6bn investment in
working capital, reflecting seasonal as well as market factors
- Gross debt declined to $11.4bn (vs. $12.3bn end 2020) and net
debt declined to $5.9bn (vs. $6.4bn end 2020)
- XCarb™ launched, bringing 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. Additionally, during the quarter
ArcelorMittal detailed concept plans to dramatically reduce CO2
emissions in Germany and in France, utilizing hydrogen-DRI and EAF
steel-making technologies
- Following the formation of a public-private partnership with
Invitalia, ArcelorMittal Italia will be deconsolidated as of 2Q
2021. The new company, "Acciaierie d’Italia" will operate
independently, with its own funding plans
- The Company completed a $650m share buyback in 1Q 2021
following the partial sell-down of its equity stake in Cleveland
Cliffs. Per its new policy21, a further $570m of capital is being
returned to shareholders through a further share buyback program
linked to free cash flow generated in 2020 (ongoing and to be
completed by year end) and a $0.30/share base dividend will be paid
in June 2021, subject to the approval of shareholders at the
AGM
Financial highlights (on the basis of
IFRS1):
(USDm) unless otherwise shown |
1Q 21 |
4Q 20 |
3Q 20 |
2Q 20 |
1Q 20 |
Sales |
16,193 |
|
14,184 |
|
13,266 |
|
10,976 |
|
14,844 |
|
Operating income / (loss) |
2,641 |
|
1,998 |
|
718 |
|
(253) |
|
(353) |
|
Net income / (loss) attributable to equity holders of the
parent |
2,285 |
|
1,207 |
|
(261) |
|
(559) |
|
(1,120) |
|
Basic earnings / (loss) per common share (US$) |
1.94 |
|
1.01 |
|
(0.21) |
|
(0.50) |
|
(1.11) |
|
|
|
|
|
|
|
Operating income/ (loss) / tonne (US$/t) |
160 |
|
116 |
|
41 |
|
(17) |
|
(18) |
|
EBITDA |
3,242 |
|
1,726 |
|
901 |
|
707 |
|
967 |
|
EBITDA/ tonne (US$/t) |
197 |
|
100 |
|
52 |
|
48 |
|
50 |
|
Steel-only EBITDA/ tonne (US$/t) |
131 |
|
58 |
|
23 |
|
21 |
|
34 |
|
|
|
|
|
|
|
Crude steel production (Mt) |
17.6 |
18.8 |
17.2 |
14.4 |
21.1 |
Steel shipments (Mt) |
16.5 |
17.3 |
17.5 |
14.8 |
19.5 |
Own iron ore production (Mt) |
13.3 |
15.3 |
14.8 |
13.5 |
14.4 |
Iron ore shipped at market price (Mt) |
9.8 |
10.6 |
9.8 |
9.2 |
8.6 |
Commenting, Mr. Aditya Mittal,
ArcelorMittal Chief Executive Officer, said:
“The first quarter of this year has been our strongest in a
decade. While this is naturally a very welcome development
following a highly challenging 2020, we are mindful that Covid
continues to be a health challenge across the world especially in
developing economies. Nowhere is this more obvious at present than
in India, where we have our AM/NS India JV with Nippon Steel. Our
colleagues in India are sending support wherever we can, including
providing daily amounts of oxygen from our sites to local hospitals
and setting up temporary medical facilities. Our thoughts are with
the people of India as they strive to bring this situation under
control.”
"Operationally, we have had a very positive start to the
year. We are seeing a continuation of the positive market
dynamics of the fourth quarter and have been steadily bringing back
production in-line with the demand recovery, which is supported by
low inventory levels through the value chain. Our priorities
for the remainder of the year and beyond are clear: to maintain a
competitive cost advantage; to strategically grow through
high-return projects in high-growth markets, whilst leveraging
existing infrastructure to develop our iron-ore resource; to
consistently return cash to shareholders via a defined capital
return policy; and to lead on sustainable development.”
“Progress on our decarbonization journey continued with the
launch of our XCarbTM initiative, our first significant step to
create a market for low-carbon steel. We are already seeing an
encouraging response from our customers. Looking to our wider
sustainability commitments, we are very focused on improving our
safety performance. Our global health and safety council has been
reconfigured and tasked with implementing the changes required to
drive a step change in our results. We have also announced a new
target to double the amount of women in management to 25% by 2030,
which will ensure that we have a rich and diverse workforce ready
to take full advantage of future opportunities.”
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, and specific government
guidelines have been followed and implemented. We continue to
ensure extensive monitoring, with stringent sanitary practices and
social distancing measures at all operations, and have implemented
remote working wherever possible and provided essential personal
protective equipment to our people.
Health and safety performance (inclusive of ArcelorMittal Italia
(previously known as Ilva)), based on own personnel and contractors
lost time injury frequency (LTIF) rate was 1.17x in the first
quarter of 2021 ("1Q 2021"). Excluding the impact of ArcelorMittal
Italia, the LTIF was 0.78x for 1Q 2021. Prior period figures have
not been recast for the ArcelorMittal USA disposal. LTIF figures
for fourth quarter of 2020 ("4Q 2020") are 0.65x and 0.72x for the
first quarter of 2020 ("1Q 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 eradicating fatalities.
Own personnel and contractors - Frequency
rate
Lost time injury frequency rate |
1Q 21 |
4Q 20 |
3Q 20 |
2Q 20 |
1Q 20 |
Mining |
1.22 |
|
0.68 |
|
0.35 |
|
0.54 |
|
0.79 |
|
NAFTA |
0.76 |
|
0.44 |
|
0.32 |
|
0.46 |
|
0.56 |
|
Brazil |
0.18 |
|
0.17 |
|
0.36 |
|
0.15 |
|
0.45 |
|
Europe |
0.91 |
|
1.35 |
|
1.04 |
|
0.96 |
|
1.04 |
|
ACIS |
0.77 |
|
0.59 |
|
0.66 |
|
0.48 |
|
0.82 |
|
Total Steel |
0.71 |
|
0.65 |
|
0.60 |
|
0.50 |
|
0.72 |
|
Total (Steel and Mining) excluding ArcelorMittal
Italia |
0.78 |
|
0.65 |
|
0.56 |
|
0.50 |
|
0.72 |
|
ArcelorMittal Italia |
9.25 |
|
9.16 |
|
12.15 |
|
9.14 |
|
7.93 |
|
Total (Steel and Mining) including ArcelorMittal
Italia |
1.17 |
|
0.93 |
|
0.95 |
|
0.77 |
|
1.01 |
|
Key sustainable development highlights
for 1Q 2021:
During 1Q 2021, the Company
highlighted:
- ArcelorMittal has committed to doubling the representation of
women in management positions (manager level and above) by 2030,
bringing the proportion to 25%.
- During 1Q 2021, the Company announced a number of initiatives,
plans and proposals on further CO2 reduction plans (including
concept projects in Germany and in France and Spain to support its
decarbonization efforts. These are summarized below and see recent
development section for further details.
- On March 29, 2021, ArcelorMittal announced conceptual plans to
build a large-scale industrial plant for the direct reduction of
iron ore (DRI) and electric arc furnace (EAF)-based steelmaking at
its site in Bremen, as well as an innovative DRI pilot plant in
addition to an electric arc furnace (EAF) in Eisenhüttenstadt,
following the announcement of the planned expansion of Germany’s
hydrogen infrastructure.
- On March 17, 2021, Air Liquide and ArcelorMittal signed a
memorandum of understanding (MoU) with the objective of
implementing solutions to produce low-carbon steel in Dunkirk.
- On March 17, 2021, ArcelorMittal announced the launch of its
first three XCarb™ initiatives, as part of the Company’s journey to
deliver on its 2050 net zero commitment. XCarb™ will ultimately
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.
- On February 17, 2021 ArcelorMittal announced that Asturias had
completed its coke-oven gas injection project for Blast Furnace B
in its Gijón plant, a strategic step to reduce CO2 emissions and
operational costs, thanks to lower coke consumption.
- On April 30, 2021, ArcelorMittal amended its $5.5bn Revolving
Credit Facility ("RCF") to align with its sustainability and
climate action strategy.
- With India currently battling the second wave of COVID-19, and
the number of cases rising each day, medical facilities have seen
critical shortages in oxygen supplies. To help combat this, AM/NS
India is providing emergency oxygen supplies, currently supplying
210 metric tonnes of liquid oxygen per day to the State of Gujarat
from the company’s oxygen plant in Hazira, operated in partnership
with INOX Air Products. AM/NS India has also undertaken a
vaccination drive for all medical and paramedical staff near the
plant in Gujarat, and a new programme to vaccinate all employees of
AM/NS India is now underway. In addition, the Company has set up a
1000-bed COVID hospital near its Gujarat plant.
Analysis of results for 1Q 2021 versus 4Q 2020 and 1Q
2020
Total steel shipments in 1Q 2021 were 16.5Mt, 4.6% lower as
compared with 17.3Mt in 4Q 2020 (or 6.5% higher as compared with
15.5Mt in 4Q 20203 on a scope adjusted basis (i.e., excluding the
shipments of ArcelorMittal USA, which was sold to Cleveland Cliffs
on December 9, 2020), as economic activity continued to gradually
recover. All segments experienced quarter-on-quarter shipment
growth: Europe +5.2%, Brazil +11.4%, ACIS +9.3% and NAFTA +7.3%
(scope adjusted basis). Total steel shipments in 1Q 2021 of 16.5Mt
were similar to 1Q 2020 on a scope adjusted basis but with some
clear regional differences: Europe -3.1%; NAFTA -0.8% (scope
adjusted); ACIS -0.7%; Brazil +22.0%.
Sales in 1Q 2021 were $16.2 billion as compared to $14.2 billion
for 4Q 2020 and $14.8 billion for 1Q 2020. As compared to 4Q 2020,
the 14.2% increase in sales was primarily due to higher realized
average steel selling prices (+17.8%) (continuing to capture the
significant increase in global steel pricing with lag effects), and
increased mining sales revenue (+12.8%) due to higher seaborne iron
ore reference prices (+25.5%) offset in part by seasonally lower
market-priced iron ore shipments (-7.6%) and by the impact of the
ArcelorMittal USA disposal. Sales in 1Q 2021 were 9.1% higher as
compared to 1Q 2020 primarily due to higher average steel selling
prices (+24.8%), significantly higher seaborne iron ore reference
prices (+86.1%) and higher market-priced iron ore shipments
(+14.1%) offset by the impact of the AM USA disposal.
Depreciation for 1Q 2021 was lower at $601 million as compared
to $711 million for 4Q 2020 and $771 million in 1Q 2020. The
FY 2021 depreciation expense is now expected to be approximately
$2.6 billion (based on current exchange rates) down from the
previous guidance of $2.7 billion.
Impairment expenses in 1Q 2021 were nil. Impairment expenses in
4Q 2020 were $331 million following the revised future cashflow
expectations of plate assets in Europe. Impairment charges for 1Q
2020 were $92 million and related to the permanent closure of the
coke plant in Florange (France), at the end of April 2020.
Exceptional items for 1Q 2021 were nil. Exceptional items in 4Q
2020 of $1.3 billion related to gain on the sale of ArcelorMittal
USA6 partially offset by site restoration and termination charges
related to the closure of the steel shop and blast furnace at
Krakow (Poland). Exceptional items of $457 million for 1Q 2020
primarily included inventory related charges in NAFTA and
Europe.
Operating income for 1Q 2021 was $2.6 billion as compared to
$2.0 billion in 4Q 2020 and an operating loss of $353 million in 1Q
2020 (impacted by the impairments and exceptional items as
discussed above). The increased operating income for 1Q 2021 as
compared to 4Q 2020 reflects a positive price-cost effect in the
steel business, improved steel shipments (on a scope adjusted
basis) and improved mining performance driven by higher iron ore
prices.
Income from associates, joint ventures and other investments15
for 1Q 2021 was $453 million as compared to $7 million for 4Q 2020
and $142 million in 1Q 2020. 1Q 2021 is significantly higher on
account of improved results from AMNS India7, AMNS Calvert22 and
other European investees. Additionally, 1Q 2021 includes dividend
income from Erdemir of $89 million. Income in 4Q 2020 was affected
by $211 million impairment of the Company's investment in DHS
(Germany).
Net interest expense in 1Q 2021 was broadly stable at $91
million as compared to $88 million in 4Q 2020 and lower as compared
to $115 million in 1Q 2020, mainly due to savings following the
repayments of bonds. The Company continues to expect full year 2021
net interest expense to be approximately $0.3 billion.
Foreign exchange and other net financing losses in 1Q 2021 were
$194 million as compared to losses of $270 million in 4Q 2020 and
losses of $451 million in 1Q 2020. Foreign exchange loss in 1Q 2021
of $118 million as compared to $78 million gain in 4Q 2020 and $111
million loss for 1Q 2020. 1Q 2021 includes immaterial non-cash
mark-to-market gain related to the mandatory convertible bonds call
option as compared to a gain of $59 million in 4Q 2020 and a loss
of $118 million in 1Q 2020. 4Q 2020 also included $178 million
non-cash expenses related to the extension of the mandatory
convertible bond. 1Q 2020 also included early bond redemption
premium expenses of $66 million.
ArcelorMittal recorded an income tax expense of $404 million in
1Q 2021 as compared to $358 million for 4Q 2020 and $340 million
for 1Q 2020.
ArcelorMittal recorded net income for 1Q 2021 of $2,285 million
($1.94 basic earnings per common share), as compared to net income
of $1,207 million for 4Q 2020 ($1.01 basic earnings per common
share), and a net loss of $1,120 million for 1Q 2020 ($1.11 basic
loss per common share).
Analysis of segment
operations
Following the Company’s steps to streamline and optimize the
business, primary responsibility for captive mining operations will
be moved to the Steel segments. The Mining segment will retain
primary responsibility for the operation of the seaborne oriented
operations at ArcelorMittal Mines Canada (AMMC)8 and Liberia, and
will continue to provide technical support to all mining operations
within the Group.
As a result, effective 2Q 2021, ArcelorMittal will amend its
presentation of reportable segments to reflect this organizational
change, as required by IFRS. Only the seaborne-oriented operations
of AMMC and Liberia will be reported within the Mining segment to
be renamed Seaborne Iron Ore. The results of the other mines will
be henceforth accounted for within the steel segments that the
mines supply.
NAFTA
(USDm) unless otherwise shown |
1Q 21 |
4Q 20 |
3Q 20 |
2Q 20 |
1Q 20 |
Sales |
2,536 |
|
3,196 |
|
3,329 |
|
2,768 |
|
4,304 |
|
Operating income / (loss) |
176 |
|
1,507 |
|
607 |
|
(327) |
|
(120) |
|
Depreciation |
(57) |
|
(61) |
|
(126) |
|
(136) |
|
(126) |
|
Impairment items |
— |
|
— |
|
660 |
|
— |
|
— |
|
Exceptional items |
— |
|
1,460 |
|
— |
|
(221) |
|
(241) |
|
EBITDA |
233 |
|
108 |
|
73 |
|
30 |
|
247 |
|
Crude steel production (kt) |
2,175 |
|
4,180 |
|
4,432 |
|
3,698 |
|
5,503 |
|
Steel shipments (kt) |
2,511 |
|
4,134 |
|
4,435 |
|
3,797 |
|
5,536 |
|
Average steel selling price (US$/t) |
850 |
|
714 |
|
701 |
|
670 |
|
715 |
|
NAFTA segment crude steel production decreased by 48.0% to 2.2Mt
in 1Q 2021, as compared to 4.2Mt in 4Q 2020 following the sale of
ArcelorMittal USA to Cleveland Cliffs on December 9, 2020. On a
scope adjusted basis (i.e. excluding ArcelorMittal USA), crude
steel production increased by 5.5% to 2.2Mt as compared to 2.1Mt in
4Q 2020 following the improvement in demand.
Steel shipments in 1Q 2021 decreased by 39.3% to 2.5Mt, as
compared to 4.1Mt in 4Q 2020, on account of the sale of
ArcelorMittal USA. On a scope adjusted basis, steel shipments in 1Q
2021 increased by 7.3% to 2.5Mt as compared to 2.3Mt in 4Q 2020
following the improvement in demand. Steel shipments were 54.7%
lower in 1Q 2021 as compared to 5.5Mt in 1Q 2020 but stable on a
scope adjusted basis.
Sales in 1Q 2021 decreased by 20.6% to $2.5 billion, as compared
to $3.2 billion in 4Q 2020, primarily due to the decrease in steel
shipments (as discussed above including the scope impact) offset in
part by a 19.1% increase in average steel selling prices.
Operating income in 1Q 2021 was $176 million as compared to
$1,507 million in 4Q 2020 and an operating loss of $120 million in
1Q 2020. 4Q 2020 operating income included a $1.5 billion
exceptional gain6 related to the sale of ArcelorMittal USA.
Operating loss in 1Q 2020 included exceptional items of $241
million primarily due to inventory related charges recorded due to
a weaker steel pricing outlook driven by COVID-19 impacts.
EBITDA in 1Q 2021 of $233 million was higher as compared to $108
million in 4Q 2020, primarily due to a positive price-cost effect
and +7.3% higher shipment volumes (on a scope adjusted basis,
excluding ArcelorMittal USA shipments from the prior period).
EBITDA in 1Q 2021 was also negatively impacted primarily by
disruption in our Mexican operations linked to the severe weather
experienced in Texas in February. EBITDA in 1Q 2021 was slightly
lower as compared to $247 million in 1Q 2020 with the impact of the
sale of ArcelorMittal USA largely offset by a positive price-cost
effect.
Brazil
(USDm) unless otherwise shown |
1Q 21 |
4Q 20 |
3Q 20 |
2Q 20 |
1Q 20 |
Sales |
2,510 |
|
1,884 |
|
1,603 |
|
1,192 |
|
1,592 |
|
Operating income |
698 |
|
290 |
|
197 |
|
117 |
|
150 |
|
Depreciation |
(52) |
|
(49) |
|
(55) |
|
(51) |
|
(69) |
|
EBITDA |
750 |
|
339 |
|
252 |
|
168 |
|
219 |
|
Crude steel production (kt) |
3,034 |
|
2,868 |
|
2,300 |
|
1,692 |
|
2,679 |
|
Steel shipments (kt) |
2,868 |
|
2,575 |
|
2,425 |
|
2,059 |
|
2,351 |
|
Average steel selling price (US$/t) |
837 |
|
702 |
|
625 |
|
550 |
|
642 |
|
Brazil segment crude steel production increased by 5.8% to 3.0Mt
in 1Q 2021 as compared to 2.9Mt for 4Q 2020 with increases in both
flat (following the restart of BF#3 at ArcelorMittal Tubarao in 4Q
2020) and long products given the continued recovery in demand.
Steel shipments in 1Q 2021 increased by 11.4% to 2.9Mt as
compared to 2.6Mt in 4Q 2020, with a 14.3% increase in flat product
shipments (both domestic and exports), and higher long products
shipments (up +8.1%). Steel shipments were 22.0% higher in 1Q 2021
as compared to 2.4Mt in 1Q 2020 due to both higher flat and long
products.
Sales in 1Q 2021 increased by 33.2% to $2.5 billion as compared
to $1.9 billion in 4Q 2020, following a 11.4% increase in steel
shipments and a 19.2% increase in average steel selling prices.
Operating income in 1Q 2021 of $698 million was higher as
compared to $290 million in 4Q 2020 and $150 million in 1Q
2020.
EBITDA in 1Q 2021 increased by 121% to $750 million as compared
to $339 million in 4Q 2020, primarily due to a positive price-cost
effect and higher steel shipments. EBITDA in 1Q 2021 was
significantly higher as compared to $219 million in 1Q 2020
primarily due to a positive price-cost effect and higher steel
shipments.
Europe
(USDm) unless otherwise shown |
1Q 21 |
4Q 20 |
3Q 20 |
2Q 20 |
1Q 20 |
Sales |
9,355 |
|
7,604 |
|
7,013 |
|
5,800 |
|
7,654 |
|
Operating income /(loss) |
599 |
|
(447) |
|
(342) |
|
(229) |
|
(426) |
|
Depreciation |
(299) |
|
(355) |
|
(356) |
|
(355) |
|
(347) |
|
Impairment items |
— |
|
(331) |
|
(104) |
|
— |
|
(92) |
|
Exceptional items |
— |
|
(146) |
|
— |
|
— |
|
(191) |
|
EBITDA |
898 |
|
385 |
|
118 |
|
126 |
|
204 |
|
Crude steel production (kt) |
9,697 |
|
9,110 |
|
7,908 |
|
7,074 |
|
9,912 |
|
Steel shipments (kt) |
9,013 |
|
8,569 |
|
8,187 |
|
6,817 |
|
9,300 |
|
Average steel selling price (US$/t) |
813 |
|
695 |
|
651 |
|
633 |
|
638 |
|
Europe segment crude steel production increased by 6.4% to 9.7Mt
in 1Q 2021 as compared to 9.1Mt in 4Q 2020 as demand and activity
levels improved, including automotive, industrial production and
manufacturing activity. In March 2021, the Company restarted BF#B
at Ghent, Belgium following a planned major reline.
Steel shipments in 1Q 2021 improved by 5.2% to 9.0Mt as compared
to 8.6Mt in 4Q 2020 driven by higher flat steel shipments (+6.5%)
and long products (+2.0%). Steel shipments were 3.1% lower in 1Q
2021 as compared to 9.3Mt in 1Q 2020 (with lower flat steel
shipments offset in part by higher long steel products).
Sales in 1Q 2021 were $9.4 billion, 23.0% higher as compared to
$7.6 billion in 4Q 2020, primarily due to higher shipment volumes
(as discussed above) and 17.0% higher average selling prices (flat
products +17.4% and long products +17.2%).
Impairment charges for 1Q 2021 were nil. Impairment charges of
$331 million in 4Q 2020 related to the revised future cash flow
expectations of plate assets and impairment charges of $92 million
in 1Q 2020 related to the permanent closure of the coke plant in
Florange, France, which closed in April 2020.
Exceptional items for 1Q 2021 were nil. Exceptional items for 4Q
2020 were $146 million related to site restoration and termination
charges following the closure of the blast furnace and the steel
plant in Krakow (Poland). Exceptional items for 1Q 2020 of $191
million primarily included inventory related charges due to a
weaker steel pricing outlook driven by COVID-19 impacts.
Operating income in 1Q 2021 was $599 million as compared to an
operating loss in 4Q 2020 of $447 million and an operating loss of
$426 million in 1Q 2020. Results for 4Q 2020 and 1Q 2020 were
impacted by impairment and exceptional items as discussed
above.
EBITDA in 1Q 2021 of $898 million was significantly higher as
compared to $385 million in 4Q 2020, primarily due to a positive
price-cost effect and higher steel shipment volumes. EBITDA in 1Q
2021 increased significantly as compared to $204 million in 1Q 2020
primarily due to a positive price-cost effect offset in part by
lower steel shipments.
ACIS
(USDm) unless otherwise shown |
1Q 21 |
4Q 20 |
3Q 20 |
2Q 20 |
1Q 20 |
Sales |
2,009 |
|
1,477 |
|
1,400 |
|
1,184 |
|
1,446 |
|
Operating income / (loss) |
472 |
|
177 |
|
37 |
|
(70) |
|
(60) |
|
Depreciation |
(74) |
|
(89) |
|
(82) |
|
(75) |
|
(86) |
|
Exceptional items |
— |
|
— |
|
— |
|
— |
|
(21) |
|
EBITDA |
546 |
|
266 |
|
119 |
|
5 |
|
47 |
|
Crude steel production (kt) |
2,683 |
|
2,673 |
|
2,544 |
|
1,956 |
|
2,998 |
|
Steel shipments (kt) |
2,595 |
|
2,373 |
|
2,499 |
|
2,395 |
|
2,614 |
|
Average steel selling price (US$/t) |
647 |
|
511 |
|
465 |
|
408 |
|
471 |
|
ACIS segment crude steel production in 1Q 2021 was stable at
2.7Mt as compared to 4Q 2020. Crude steel production in 1Q 2021 was
10.5% lower as compared to 3.0Mt in 1Q 2020 primarily in South
Africa, including the scope impact of the permanent closure of the
Saldanha facility (in 1Q 2020).
Steel shipments in 1Q 2021 increased by 9.3% to 2.6Mt as
compared to 2.4Mt as at 4Q 2020, mainly due to the recovery in
demand in South Africa and improved Kazakhstan volume, primarily
due to timing of export shipments postponed from 4Q 2020.
Sales in 1Q 2021 increased by 36% to $2.0 billion as compared to
$1.5 billion in 4Q 2020, primarily due to higher average steel
selling prices (+26.6%) and higher steel shipments (+9.3%).
Operating income in 1Q 2021 was $472 million as compared to $177
million in 4Q 2020 and an operating loss of $60 million in 1Q
2020.
EBITDA was $546 million in 1Q 2021 as compared to $266 million
in 4Q 2020, primarily due to positive price-cost effect and higher
steel shipments. EBITDA in 1Q 2021 was significantly higher as
compared to $47 million in 1Q 2020, primarily due to positive
price-cost effects.
Mining
(USDm) unless otherwise shown |
1Q 21 |
4Q 20 |
3Q 20 |
2Q 20 |
1Q 20 |
Sales |
1,690 |
|
1,499 |
|
1,200 |
|
1,064 |
|
990 |
|
Operating income |
964 |
|
579 |
|
382 |
|
282 |
|
168 |
|
Depreciation |
(110) |
|
(148) |
|
(114) |
|
(109) |
|
(129) |
|
EBITDA |
1,074 |
|
727 |
|
496 |
|
391 |
|
297 |
|
|
|
|
|
|
|
Own iron ore production (Mt) |
13.3 |
|
15.3 |
|
14.8 |
|
13.5 |
|
14.4 |
|
Iron ore shipped externally and internally at market price (a)
(Mt) |
9.8 |
|
10.6 |
|
9.8 |
|
9.2 |
|
8.6 |
|
Iron ore shipment - cost plus basis (Mt) |
3.8 |
|
5.2 |
|
5.0 |
|
4.8 |
|
4.8 |
|
(a) Iron ore shipments of market-priced based materials include
the Company’s own mines and share of production at other
mines.Given the sale of ArcelorMittal USA, the Company is no longer
presenting coal production and shipments in its earnings
releases.
Own iron ore production in 1Q 2021 decreased by 13.2% to 13.3Mt
as compared to 15.3Mt in 4Q 2020 primarily due to the sale of
Hibbing and Minorca iron ore mines which were sold as part of the
ArcelorMittal USA disposal to Cleveland Cliffs on December 9, 2020.
On a scope adjusted basis, own iron ore production decreased 4.5%
primarily due to lower production at ArcelorMittal Mines Canada
(AMMC)8. Own iron ore production in 1Q 2021 decreased by 7.8% to
13.3Mt as compared to 14.4Mt in 1Q 2020. Adjusted for the scope
effect of the ArcelorMittal USA sale, own iron ore production in 1Q
2021 of 13.3Mt increased by 5.6% as compared to 12.6Mt in 1Q 2020
primarily due to higher production at AMMC.
Market-priced iron ore shipments in 1Q 2021 decreased by 7.6% to
9.8Mt as compared to 10.6Mt in 4Q 2020, primarily driven by lower
shipments in Liberia and a seasonal decline in AMMC. Market-priced
iron ore shipments in 1Q 2021 were 14.1% higher as compared to 1Q
2020 reflecting higher production and shipment levels in particular
at AMMC which were impacted by COVID-19 restrictions in March 2020.
FY 2021 market priced iron ore shipments are expected to increase
to approximately 39Mt.
Operating income in 1Q 2021 increased to $964 million as
compared to $579 million in 4Q 2020 and $168 million in 1Q
2020.
EBITDA in 1Q 2021 increased by 47.7% to $1,074 million as
compared to $727 million in 4Q 2020, reflecting the positive impact
of higher seaborne market prices (+25.5%) and higher quality premia
offset in part by seasonally lower market-priced iron ore shipments
(-7.6%). EBITDA in 1Q 2021 was significantly higher as compared to
$297 million in 1Q 2020, primarily due to higher market-priced iron
ore shipments (+14.1%), and higher seaborne iron ore reference
prices (+86.1%).
Liquidity and Capital
Resources Net cash provided by operating
activities for 1Q 2021 was $997 million as compared to $1,416
million in 4Q 2020 and $594 million in 1Q 2020. Net cash provided
by operating activities in 1Q 2021 includes a working capital
investment of $1,634 million reflecting the seasonal effect, as
well as higher activity and pricing levels, as compared to a
working capital release of $925 million in 4Q 2020 and small
investment of $109 million in 1Q 2020 (which was low due to cash
conservation measures taken plus a reduction in activity levels
with the onset of the COVID-19 pandemic). Working capital needs in
2021 will be determined by the operating conditions towards the end
of the year. We remain focused on maintaining the working capital
efficiencies achieved in recent periods and keeping rotation days
consistent with the levels in 2020.
Net cash provided by investing activities during 1Q 2021 was
$268 million as compared to net cash used in investing activities
of $406 million during 4Q 2020 and $755 million in 1Q 2020. Capex
of $619 million in 1Q 2021 compares to $668 million in 4Q 2020 and
$850 million in 1Q 2020.
The delay in the first investment by Invitalia under the
investment agreement resulted in the Company consolidating the
capex of ArcelorMittal Italia longer than previously anticipated.
As a result, the Company expects FY 2021 capex to be $2.9 billion
(vs. the original FY 2021 capex guidance of $2.8 billion).
Net cash provided by other investing activities in 1Q 2021 of
$887 million as compared to $262 million in 4Q 2020 and $95 million
in 1Q 2020. 1Q 2021 cash inflow primarily relates to $645 million
cash received from the sale of 40 million Cleveland Cliffs shares
and the recovery of the cash collateral (short-term deposits) for
the TSR receivables retained in ArcelorMittal USA after its
disposal. 4Q 2020 cash inflow relates to $0.5 billion proceeds from
the sale of ArcelorMittal USA offset in part by an investment in
short term deposits as discussed above. Net cash provided by other
investing activities in 1Q 2020 of $95 million included $127
million from the sale of the 50% stake in Global Chartering Limited
(GCL)9 offset in part by the revised quarterly lease payment under
the amended ArcelorMittal Italia agreement signed in March
2020.
Net cash used in financing activities in 1Q 2021 was $1,388
million as compared to $2,227 million in 4Q 2020 and $386 million
in 1Q 2020. In 1Q 2021, net cash used in financing activities
includes an outflow of $0.6 billion primarily related to $0.3
billion decrease of commercial paper portfolio. In 4Q 2020, net
cash used in financing activities included an outflow of $1.5
billion primarily related to: bonds repurchased, reimbursement of
the Schuldschein, and a decrease of commercial paper portfolio. Net
cash used in financing activities in 1Q 2020 included a net outflow
primarily related to the make whole redemption of the remaining
outstanding amount ($659 million) of its 6.250% Notes due February
25, 2022.
On March 4, 2021, ArcelorMittal announced that it had completed
the $650 million share buyback program launched on February 15,
2021 using the proceeds from the partial sell down of its common
equity stake in Cleveland Cliffs and by market close of March 3,
2021 had repurchased 27,113,321 shares for a total value of
approximately €537 million (equivalent to $650 million) at an
average price per share of €19.79. All details are available on the
Company’s website at:
https://corporate.arcelormittal.com/investors/equity-investors/share-buyback-program.
At the same time, the Company also announced the commencement of a
second share buyback program for an aggregate amount of $570
million, in-line with the Company’s new capital returns policy
published on February 11, 2021 linked to surplus free cash flow
generated in 2020. This share buyback program is ongoing and will
be completed by December 31, 2021.
During 1Q 2021 the Company paid dividends of $65 million to
minority shareholders of AMMC and Bekaert (Brazil) as compared to
$16 million in 4Q 2020 to minority shareholders in Bekaert (Brazil)
and $103 million mainly to minority shareholders of AMMC in 1Q
2020.
Outflows from lease payments and other financing activities
(net) were $49 million in 1Q 2021 and $218 million for 4Q 2020
(which included $135 million paid to Banca Intesa17).
Gross debt decreased by $0.9 billion to $11.4 billion as of
March 31, 2021, as compared to $12.3 billion as of December 31,
2020 and $13.8 billion as of March 31, 2020. As of March 31, 2021,
net debt decreased to $5.9 billion as compared to $6.4 billion as
of December 31, 2020, driven by free cash flows and a $0.2 billion
foreign exchange impact following a 4.4% appreciation of USD versus
EUR and was $3.6 billion lower than net debt of $9.5 billion as of
March 31, 2020.
As of March 31, 2021, the Company had liquidity of $11.0
billion, consisting of cash and cash equivalents of $5.5 billion
($6.0 billion as of December 31, 2020 and $4.3 billion as of March
31, 2020) and $5.5 billion of available credit lines11.
As of March 31, 2021, the average debt maturity was 5.3
years.
Key recent developments
- On April 30, 2021, ArcelorMittal amended its $5.5bn Revolving
Credit Facility ("RCF") to align with its sustainability and
climate action strategy. Under the amended RCF – the largest ESG
linked facility of its kind in the metals and mining sector - the
margin payable will be increased or decreased depending on
ArcelorMittal’s performance against certain metrics related to its
environmental and sustainability performance. The metrics measured
include the CO2 intensity of ArcelorMittal’s European operations
and the number of ArcelorMittal facilities globally which have been
certified by ResponsibleSteel™ by the end of each year.In addition,
it has been agreed that the leverage ratio financial covenant
currently contained in the RCF will fall away in the event that
ArcelorMittal obtains an investment grade long-term credit rating
(with a stable outlook) from two rating agencies. The RCF was
signed on December 18, 2018 and remains undrawn and available for
the Group’s general corporate purposes. Crédit Agricole Corporate
and Investment Bank acted as ESG coordinator.
- On April 14, 2021, pursuant to the investment agreement of
December 10, 2020 forming a public-private partnership between
Invitalia, an Italian state-owned company, and AM InvestCo Italy
(ArcelorMittal’s subsidiary party to the lease and purchase
agreement for the Ilva business), Invitalia invested $400 million
of new equity into AM InvestCo Italy, providing it with a 38%
shareholding with equal governance rights over the company10, 14.
Going forward, Acciaierie d’Italia Holding (the new name of AM
InvestCo Italy) will operate independently, and as such will have
its own funding plans. As a result, ArcelorMittal will
deconsolidate the assets and liabilities (including the remaining
lease and purchase liability of €1.0 billion ($1.2 billion) and a
cash balance of $0.2 billion) of Acciaierie d’Italia Holding from
its consolidated statement of financial position and will account
for its interest in the company under the equity method from 2Q
2021 onwards.
- On March 29, 2021, ArcelorMittal announced conceptual plans to
build a large-scale industrial plant for the direct reduction of
iron ore (DRI) and electric arc furnace (EAF)-based steelmaking at
its site in Bremen, as well as an innovative DRI pilot plant in
addition to an electric arc furnace (EAF) in Eisenhüttenstadt,
following the announcement of the planned expansion of Germany’s
hydrogen infrastructure. Using green hydrogen, up to 3.5Mt of steel
could be produced by the Bremen and Eisenhüttenstadt sites by 2030,
with significantly lower CO2 emissions. Depending on the amount of
hydrogen available, CO2 savings of more than 5Mt could be possible.
The technology conversion requires investments in the range of
€1-1.5 billion. In Germany, the group already operates Europe’s
only DRI-EAF plant in Hamburg, where the switch to using hydrogen
instead of natural gas in the iron ore reduction process is being
prepared. The objective is to reach industrial commercial maturity
of the technology by 2025, initially producing 100,000 tonnes of
sponge iron a year.
- On March 26, 2021, Fitch Ratings announced that it had revised
ArcelorMittal's Outlook to Positive from Negative while affirming
the Company's Long-Term Issuer Default Rating (IDR) and senior
unsecured ratings at 'BB+'.
- On March 17, 2021, Air Liquide and ArcelorMittal signed a
memorandum of understanding (MoU) with the objective of
implementing solutions to produce low-carbon steel in Dunkirk. The
two companies are joining forces to transform the steel production
process through the development of innovative solutions involving
low-carbon hydrogen and CO2 capture technologies. This partnership
is the first step towards the creation of a new low-carbon hydrogen
and CO2 capture technologies ecosystem in this major industrial
basin. The project will reduce yearly CO2 emissions from
ArcelorMittal’s steel-making facilities in Dunkirk by 2.85Mt by
2030. Air Liquide and ArcelorMittal have jointly applied for large
projects funding under the Important Project of Common European
Interest (IPCEI) scheme for hydrogen. Funding from European and/or
French schemes supporting decarbonization is key to the
implementation of the project.
- On March 17, 2021, ArcelorMittal announced the launch of its
first three XCarb™ initiatives, as part of the Company’s journey to
deliver on its 2050 net zero commitment. XCarb™ will ultimately
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. To
support its launch, ArcelorMittal announced three XCarb™ branded
initiatives:
- ‘XCarb™ green steel certificates’, which will
enable us to support our customers as they seek to reduce their
Scope 3 emissions. CO2 savings achieved through technology
investments at ArcelorMittal Europe - Flat Products operations are
aggregated, independently assured, and then converted into XCarb™
green steel certificates13 which customers can attach to their
physical orders of steel, enabling them to report a reduction in
their Scope 3 carbon emissions in accordance with the GHG Protocol
Corporate Accounting and Reporting Standard. The Company
anticipates it will have 600,000 tonnes of equivalent green steel
tonnes available by the end of 2022.
- ‘XCarb™ recycled and renewably produced’ has
been designed for products made via the Electric Arc Furnace
(‘EAF’) route using scrap steel. Recycled and renewably produced
means that the physical steel was made with recycled material
(scrap) using renewable electricity, giving it an extremely low CO2
footprint that can be as low as approximately 300kg of CO2 per
tonne of finished steel when the metallics are 100% scrap. This
customer offer is for both flat and long products. The electricity
used in the steelmaking process is independently verified, with a
‘Guarantee of Origin’ given that it is from renewable sources.
- ‘XCarb™ innovation fund’: ArcelorMittal has
launched an innovation fund which will invest up to $100 million
annually in groundbreaking companies developing pioneering or
breakthrough technologies that will accelerate the steel industry’s
transition to carbon neutral steelmaking. To be eligible for
funding, companies will have to be developing commercially
scaleable technologies which support ArcelorMittal on its journey
to decarbonise. The ‘XCarb™ innovation fund’ will invest in a
diversified portfolio of companies to ensure it captures the best
and most important technologies under development.
- On February 17, 2021, ArcelorMittal announced that Asturias had
completed its coke-oven gas injection project for Blast Furnace B
in its Gijón plant, a strategic step to reduce CO2 emissions and
operational costs, thanks to lower coke consumption. This smart
carbon approach, allows gases from various sources to be injected
into the blast furnace. The injection of coke-oven gas, with high
hydrogen content, is an effective and cost-efficient method that
enables steel producers to reduce CO2 emissions immediately.
ArcelorMittal Asturias has completed the most advanced project in
the Company, linked to the use of coke-oven gas, and has initiated
the injection of grey hydrogen (hydrogen recovered from various
gases, including natural gas and coke-oven gas) into Blast Furnace
B.
- On February 11, 2021, S&P Ratings agency announced that it
had revised ArcelorMittal's outlook to stable on likely strong
recovery in 2021; 'BBB-/A-3' Ratings Affirmed.
Outlook
Economic activity has progressively improved during 1Q 2021,
with a favorable supply demand balance and a low inventory
environment following a period of prolonged destocking, supporting
increased utilization levels and healthy steel spreads (currently
at multi-year high), and the Company now expects apparent steel
consumption (“ASC”) in 2021 to be at or above the upper end of the
ranges presented at time of the 4Q 2021 results in February
2021.
ArcelorMittal expects global apparent steel consumption (“ASC”)
in 2021 to grow between +4.5% to +5.5%. By region:
- In the US, ASC is expected to grow within a range of +10.0% to
+12.0% in 2021, with stronger ASC in flat products particularly
automotive while construction demand (non-residential) remains
weak.
- In Europe, ASC is expected to grow within a range of +7.5% to
+9.5% in 2021; with strong automotive demand expected to recover
from low levels and continued support for infrastructure and
residential demand.
- In Brazil, ASC is expected to continue to expand in 2021 with
growth expected in the range of +6.0% to +8.0% supported by ongoing
construction demand and recovery in the end markets for flat steel.
In the CIS, ASC growth in 2021 is expected to recover to within a
range of +4.0% to +6.0%.
- In India, ASC growth in 2021 is expected to recover to within a
range of +16% to +18%.
- As a result, overall World ex-China ASC in 2021 is expected to
grow within the range of +8.5% to +9.5% supported by a strong
rebound in India.
- In China, overall demand is expected to continue to grow in
2021 to +1.0% to +3.0% (supported by ongoing stimulus).
ArcelorMittal Condensed Consolidated Statement of
Financial Position1
In millions of U.S. dollars |
Mar 31,2021 |
Dec 31,2020 |
Mar 31,2020 |
ASSETS |
|
|
|
Cash and cash equivalents and restricted funds |
5,474 |
|
5,963 |
|
4,298 |
|
Trade accounts receivable and other |
3,783 |
|
3,072 |
|
3,456 |
|
Inventories |
13,228 |
|
12,328 |
|
15,626 |
|
Prepaid expenses and other current assets |
3,160 |
|
2,281 |
|
2,551 |
|
Asset held for sale12 |
4,854 |
|
4,329 |
|
— |
|
Total Current Assets |
30,499 |
|
27,973 |
|
25,931 |
|
|
|
|
|
Goodwill and intangible assets |
4,212 |
|
4,312 |
|
4,911 |
|
Property, plant and equipment |
29,498 |
|
30,622 |
|
33,522 |
|
Investments in associates and joint ventures |
7,205 |
|
6,817 |
|
6,334 |
|
Deferred tax assets |
7,831 |
|
7,866 |
|
8,669 |
|
Other assets16 |
4,404 |
|
4,462 |
|
1,961 |
|
Total Assets |
83,649 |
|
82,052 |
|
81,328 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Short-term debt and current portion of long-term debt |
2,813 |
|
2,507 |
|
3,147 |
|
Trade accounts payable and other |
12,231 |
|
11,525 |
|
11,968 |
|
Accrued expenses and other current liabilities |
5,729 |
|
5,596 |
|
5,645 |
|
Liabilities held for sale12 |
3,271 |
|
3,039 |
|
— |
|
Total Current Liabilities |
24,044 |
|
22,667 |
|
20,760 |
|
|
|
|
|
Long-term debt, net of current portion |
8,552 |
|
9,815 |
|
10,650 |
|
Deferred tax liabilities |
1,812 |
|
1,832 |
|
2,075 |
|
Other long-term liabilities |
7,259 |
|
7,501 |
|
11,820 |
|
Total Liabilities |
41,667 |
|
41,815 |
|
45,305 |
|
|
|
|
|
Equity attributable to the equity holders of the parent |
40,000 |
|
38,280 |
|
34,249 |
|
Non-controlling interests |
1,982 |
|
1,957 |
|
1,774 |
|
Total Equity |
41,982 |
|
40,237 |
|
36,023 |
|
Total Liabilities and Shareholders’ Equity |
83,649 |
|
82,052 |
|
81,328 |
|
ArcelorMittal Condensed Consolidated Statement of
Operations1
|
Three months ended |
In millions of U.S. dollars unless otherwise
shown |
Mar 31, 2021 |
Dec 31, 2020 |
Sept 30, 2020 |
Jun 30, 2020 |
Mar 31, 2020 |
Sales |
16,193 |
|
14,184 |
|
13,266 |
|
10,976 |
|
14,844 |
|
Depreciation (B) |
(601) |
|
(711) |
|
(739) |
|
(739) |
|
(771) |
|
Impairment items4(B) |
— |
|
(331) |
|
556 |
|
— |
|
(92) |
|
Exceptional items4,6 (B) |
— |
|
1,314 |
|
— |
|
(221) |
|
(457) |
|
Operating income / (loss) (A) |
2,641 |
|
1,998 |
|
718 |
|
(253) |
|
(353) |
|
Operating margin % |
16.3 |
% |
14.1 |
% |
5.4 |
% |
(2.3) |
% |
(2.4) |
% |
|
|
|
|
|
|
Income / (loss) from associates, joint ventures and other
investments |
453 |
|
7 |
|
100 |
|
(15) |
|
142 |
|
Net interest expense |
(91) |
|
(88) |
|
(106) |
|
(112) |
|
(115) |
|
Foreign exchange and other net financing (loss) / gain |
(194) |
|
(270) |
|
(150) |
|
36 |
|
(451) |
|
Income / (loss) before taxes and non-controlling
interests |
2,809 |
|
1,647 |
|
562 |
|
(344) |
|
(777) |
|
Current tax expense |
(569) |
|
(373) |
|
(204) |
|
(100) |
|
(162) |
|
Deferred tax benefit / (expense) |
165 |
|
15 |
|
(580) |
|
(84) |
|
(178) |
|
Income tax expense |
(404) |
|
(358) |
|
(784) |
|
(184) |
|
(340) |
|
Income / (loss) including non-controlling
interests |
2,405 |
|
1,289 |
|
(222) |
|
(528) |
|
(1,117) |
|
Non-controlling interests income |
(120) |
|
(82) |
|
(39) |
|
(31) |
|
(3) |
|
Net income / (loss) attributable to equity holders of the
parent |
2,285 |
|
1,207 |
|
(261) |
|
(559) |
|
(1,120) |
|
|
|
|
|
|
|
Basic earnings / (loss) per common share ($) |
1.94 |
|
1.01 |
|
(0.21) |
|
(0.50) |
|
(1.11) |
|
Diluted earnings / (loss) per common share ($) |
1.93 |
|
1.00 |
|
(0.21) |
|
(0.50) |
|
(1.11) |
|
|
|
|
|
|
|
Weighted average common shares outstanding (in millions) |
1,178 |
|
1,199 |
|
1,228 |
|
1,119 |
|
1,012 |
|
Diluted weighted average common shares outstanding (in
millions) |
1,183 |
|
1,204 |
|
1,228 |
|
1,119 |
|
1,012 |
|
|
|
|
|
|
|
OTHER INFORMATION |
|
|
|
|
|
EBITDA20 (C =
A-B) |
3,242 |
|
1,726 |
|
901 |
|
707 |
|
967 |
|
EBITDA Margin % |
20.0 |
% |
12.2 |
% |
6.8 |
% |
6.4 |
% |
6.5 |
% |
|
|
|
|
|
|
Own iron ore production (Mt) |
13.3 |
|
15.3 |
|
14.8 |
|
13.5 |
|
14.4 |
|
Crude steel production (Mt) |
17.6 |
|
18.8 |
|
17.2 |
|
14.4 |
|
21.1 |
|
Steel shipments (Mt) |
16.5 |
|
17.3 |
|
17.5 |
|
14.8 |
|
19.5 |
|
ArcelorMittal Condensed Consolidated Statement of Cash
flows1
|
Three months ended |
In millions of U.S. dollars |
Mar 31, 2021 |
Dec 31, 2020 |
Sept 30, 2020 |
Jun 30, 2020 |
Mar 31, 2020 |
Operating activities: |
|
|
|
|
|
Income /(loss) attributable to equity holders of the
parent |
2,285 |
|
1,207 |
|
(261) |
|
(559) |
|
(1,120) |
|
Adjustments to reconcile net income/ (loss) to net cash provided by
operations: |
|
|
|
|
|
Non-controlling interests income |
120 |
|
82 |
|
39 |
|
31 |
|
3 |
|
Depreciation and impairment items4 |
601 |
|
1,042 |
|
183 |
|
739 |
|
863 |
|
Exceptional items4,6 |
— |
|
(1,314) |
|
— |
|
221 |
|
457 |
|
(Income) / loss from associates, joint ventures and other
investments |
(453) |
|
(7) |
|
(100) |
|
15 |
|
(142) |
|
Deferred tax (benefit) / expense |
(165) |
|
(15) |
|
580 |
|
84 |
|
178 |
|
Change in working capital |
(1,634) |
|
925 |
|
1,072 |
|
(392) |
|
(109) |
|
Other operating activities (net) |
243 |
|
(504) |
|
257 |
|
163 |
|
464 |
|
Net cash provided by operating activities (A) |
997 |
|
1,416 |
|
1,770 |
|
302 |
|
594 |
|
Investing activities: |
|
|
|
|
|
Purchase of property, plant and equipment and intangibles (B) |
(619) |
|
(668) |
|
(520) |
|
(401) |
|
(850) |
|
Other investing activities (net) |
887 |
|
262 |
|
34 |
|
37 |
|
95 |
|
Net cash provided by / (used in) investing
activities |
268 |
|
(406) |
|
(486) |
|
(364) |
|
(755) |
|
Financing activities: |
|
|
|
|
|
Net (payments) relating to payable to banks and long-term debt |
(624) |
|
(1,506) |
|
(270) |
|
(395) |
|
(224) |
|
Dividends paid to minorities (C) |
(65) |
|
(16) |
|
(55) |
|
(7) |
|
(103) |
|
Share buyback |
(650) |
|
(487) |
|
(13) |
|
— |
|
— |
|
Common share offering |
— |
|
— |
|
— |
|
740 |
|
— |
|
Proceeds from Mandatorily Convertible Notes |
— |
|
— |
|
— |
|
1,237 |
|
— |
|
Lease payments and other financing activities (net) |
(49) |
|
(218) |
|
(63) |
|
(59) |
|
(59) |
|
Net cash (used in) / provided by financing
activities |
(1,388) |
|
(2,227) |
|
(401) |
|
1,516 |
|
(386) |
|
Net (decrease) / increase in cash and cash equivalents |
(123) |
|
(1,217) |
|
883 |
|
1,454 |
|
(547) |
|
Cash and cash equivalents transferred (to) / from assets held for
sale |
(7) |
|
67 |
|
(70) |
|
— |
|
— |
|
Effect of exchange rate changes on cash |
(106) |
|
234 |
|
73 |
|
(13) |
|
(131) |
|
Change in cash and cash equivalents |
(236) |
|
(916) |
|
886 |
|
1,441 |
|
(678) |
|
|
|
|
|
|
|
Free cash flow (D=A+B+C)18 |
313 |
|
732 |
|
1,195 |
|
(106) |
|
(359) |
|
Appendix 1: Product shipments by
region(1)
(000'kt) |
1Q 21 |
4Q 20 |
3Q 20 |
2Q 20 |
1Q 20 |
Flat |
1,822 |
|
3,462 |
|
3,779 |
|
3,328 |
|
4,853 |
|
Long |
785 |
|
807 |
|
746 |
|
485 |
|
846 |
|
NAFTA |
2,511 |
|
4,134 |
|
4,435 |
|
3,797 |
|
5,536 |
|
Flat |
1,513 |
|
1,324 |
|
1,047 |
|
1,074 |
|
1,277 |
|
Long |
1,370 |
|
1,268 |
|
1,393 |
|
994 |
|
1,085 |
|
Brazil |
2,868 |
|
2,575 |
|
2,425 |
|
2,059 |
|
2,351 |
|
Flat |
6,613 |
|
6,210 |
|
6,025 |
|
4,649 |
|
7,023 |
|
Long |
2,290 |
|
2,246 |
|
2,080 |
|
2,054 |
|
2,170 |
|
Europe |
9,013 |
|
8,569 |
|
8,187 |
|
6,817 |
|
9,300 |
|
CIS |
2,035 |
|
1,912 |
|
1,914 |
|
2,032 |
|
1,827 |
|
Africa |
560 |
|
458 |
|
585 |
|
361 |
|
786 |
|
ACIS |
2,595 |
|
2,373 |
|
2,499 |
|
2,395 |
|
2,614 |
|
Note: “Others and eliminations” are not presented in the
table
Appendix 2a: Capital
expenditures(1)
(USDm) |
1Q 21 |
4Q 20 |
3Q 20 |
2Q 20 |
1Q 20 |
NAFTA |
58 |
|
66 |
|
81 |
|
107 |
|
205 |
|
Brazil |
46 |
|
64 |
|
48 |
|
29 |
|
67 |
|
Europe |
342 |
|
326 |
|
222 |
|
168 |
|
323 |
|
ACIS |
70 |
|
88 |
|
68 |
|
46 |
|
122 |
|
Mining |
97 |
|
111 |
|
92 |
|
46 |
|
121 |
|
Total |
619 |
|
668 |
|
520 |
|
401 |
|
850 |
|
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.
Completed projects in the past year
Segment |
Site / unit |
Project |
Capacity / details |
Completion |
ACIS |
ArcelorMittal Kryvyi Rih (Ukraine) |
New LF&CC 2 |
Facilities upgrade to switch from ingot to continuous caster route.
Additional billets of up to 145kt over ingot route through yield
increase |
1Q 2020 |
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 |
Phase 2 premium product expansion project |
Increase production capacity to 15Mt/year |
4Q 2023 (e) |
Brazil |
Juiz de Fora |
Melt shop expansion |
Increase in melt shop capacity by 0.2Mt/year |
On hold (f) |
Brazil |
Monlevade |
Sinter plant, blast furnace and melt shop |
Increase in liquid steel capacity by 1.2Mt/year; |
On hold (f) |
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 5.3 million tonnes
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. 2.5 million tonnes
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 (with capex of approximately $0.2
billion in 2021).
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
now 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 AM/NS 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 15 million tonnes 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 Liberia has now completed the revised
detailed feasibility study (which was updated in 2019 to apply best
available technology and replace wet with dry stack tailings
treatment) for the modular build of a 15 million tonne concentrator
(Phase 2), with aligned mine, concentrator, rail and port capacity.
The plan is now to recommence the project in 2021. Subject to a
timely restart, first concentrate is expected in 4Q 2023. 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 85% of the procurement has already been done (with the
equipment on site) and 60% of the civil construction complete.
f) Although the Monlevade wire rod expansion project and Juiz de
Fora rebar expansion were completed in 2015, both the melt shop
expansion (in Juiz de Fora) and the sinter plant, blast furnace and
meltshop (in Monlevade) projects are currently on hold, but are
being presently re-evaluated.
Appendix 3: Debt repayment schedule as of March 31,
2021
(USD billion) |
2021 |
2022 |
2023 |
2024 |
2025 |
>2025 |
Total |
Bonds |
0.3 |
0.6 |
1.3 |
1.9 |
1.1 |
2.4 |
7.6 |
Commercial paper |
0.8 |
— |
|
— |
|
— |
|
— |
|
— |
|
0.8 |
Other loans |
1.0 |
0.3 |
0.7 |
0.2 |
0.2 |
0.6 |
3.0 |
Total gross debt |
2.1 |
0.9 |
2.0 |
2.1 |
1.3 |
3.0 |
11.4 |
Appendix 4: Reconciliation of gross debt to net
debt
(USD million) |
Mar 31, 2021 |
Dec 31, 2020 |
Mar 31, 2020 |
Gross debt (excluding that held as part of the liabilities
held for sale) |
11,365 |
|
12,322 |
|
13,797 |
|
Gross debt held as part of the liabilities held for sale |
23 |
|
24 |
|
— |
|
Gross debt |
11,388 |
|
12,346 |
|
13,797 |
|
Less: Cash and cash equivalents and restricted funds |
(5,474) |
|
(5,963) |
|
(4,298) |
|
Less: Cash and cash equivalents and restricted funds held as part
of the assets held for sale |
(10) |
|
(3) |
|
— |
|
Net debt (including that held as part of assets and the
liabilities held for sale) |
5,904 |
|
6,380 |
|
9,499 |
|
|
|
|
|
Net debt / LTM EBITDA |
0.9 |
|
1.5 |
|
2.1 |
|
Appendix 5: Adjusted net income / (loss)
(USD million) |
1Q 21 |
4Q 20 |
3Q 20 |
2Q 20 |
1Q 20 |
Net income / (loss) |
2,285 |
|
1,207 |
|
(261) |
|
(559) |
|
(1,120) |
|
Impairment items4 |
— |
|
(331) |
|
556 |
|
— |
|
(92) |
|
Exceptional items4,6 |
— |
|
1,314 |
|
— |
|
(221) |
|
(457) |
|
Derecognition of deferred tax assets on disposal of ArcelorMittal
USA |
— |
|
— |
|
(624) |
|
— |
|
— |
|
Adjusted net income / (loss) |
2,285 |
|
224 |
|
(193) |
|
(338) |
|
(571) |
|
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.Market-priced tonnes: represent
amounts of iron ore 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.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).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 USA. The Brazil segment includes the Flat, Long and Tubular
operations of Brazil and its neighbouring countries including
Argentina, Costa Rica and Venezuela. The Europe segment comprises
the Flat, Long and Tubular operations of the European business, as
well as Downstream Solutions. The ACIS segment includes the Flat,
Long and Tubular operations of Kazakhstan, Ukraine and South
Africa. Mining segment primarily includes iron ore
operations.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 an abnormal 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).Seaborne 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.Steel-only
EBITDA: calculated as EBITDA total less Mining segment
EBITDA.Steel-only EBITDA/tonne: calculated as
steel-only EBITDA divided by total steel shipments.Working
capital change (working capital investment / release):
Movement of change in working capital - trade accounts receivable
plus inventories less trade and other accounts
payable.YoY: refers to year-on-year.
Footnotes1. 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 are 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. 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.2. LTIF figures presented for 1Q 2021 of
0.78x excludes ArcelorMittal Italia (to be deconsolidated as from
2Q 2021 onwards) and ArcelorMittal USA (no longer in scope as sold
as part of the sale to Cleveland Cliffs on December 9, 2020). LTIF
figures including the impact of ArcelorMittal Italia and
ArcelorMittal USA, were 0.93x for 4Q 2020 and 1.01x for 1Q
2020.3. 1Q 2021 steel shipments of 16.5Mt as
compared to 17.3Mt in 4Q 2020 (which included 1.8Mt of steel
shipments for ArcelorMittal USA). On a scope adjusted basis 1Q 2021
shipments of 16.5Mt increased by 6.5% vs.15.5Mt in 4Q
2020.4. Impairment expenses in 4Q 2020 were $331
million following the revised future cashflow expectations of
certain assets in Europe. Exceptional items in 4Q 2020 of $1.3
billion related to gain on the sale of ArcelorMittal USA6 offset by
site restoration and termination charges related to the closure of
the steel shop and blast furnace at Krakow (Poland). Impairment
charges for 1Q 2020 were $92 million and relate to the permanent
closure of the coke plant in Florange (France), at the end of April
2020. Exceptional items of $457 million for 1Q 2020 primarily
include inventory related charges in NAFTA and Europe due to a
weaker steel pricing outlook driven by COVID-19
impacts.5. See Appendix 5 for reconciliation of
adjusted net income /(loss).6. Exceptional $1.5
billion gain on AM USA disposal relates to the consideration of
$2.2 billion following the increase of the Cleveland Cliff share
price from $5.88/sh on September 25, 2020 to $13.04/sh on December
8, 2020 against a total carrying value of $0.7 billion of
ArcelorMittal USA, AM Monessen and AM Princeton
companies.7. AMNS India key performance indicators
for 1Q 2021 are as follows: AMNS India’s operations were impacted
by the COVID-19 pandemic during 2Q 2020 with lockdown measures (in
particular impacting April 2020). Since then lock down measures
have been lifted, demand has improved and the assets are currently
running at higher utilization levels. 1Q 2021 crude steel
production was 1.8Mt (vs 1.9Mt in 4Q 2020) and EBITDA was $0.4
billion (vs. $0.3bn in 4Q 2020). AMNS India has plans to
debottleneck operations (steel shop and rolling parts) and achieve
capacity of 8.6Mt per annum and medium term plans to expand and
grow to 14Mt per annum. The newly acquired Thakurani mines is now
operating at full 5.5Mtpa capacity during 1Q 2021, while the second
Odisha pellet plant is expected to be completed in 2Q 2021, adding
6Mtpa for a total 20Mtpa of pellet capacity. AM/NS India signed a
Memorandum of Understanding (MoU) with the Government of Odisha to
set-up an integrated steel plant with a 12 Million Tonnes Per Annum
capacity in Kendrapara district of state
Orissa.8. ArcelorMittal Mines Canada, otherwise
known as ArcelorMittal Mines and Infrastructure
Canada.9. On December 23, 2019, ArcelorMittal,
announced it had signed a share purchase agreement with DryLog Ltd
(DryLog) for the sale of a 50% stake in Global Chartering Limited
(GCL), its wholly owned shipping business, and will subsequently
form a 50:50 shipping joint venture with DryLog. The transaction
closed on December 31, 2019. The stake sale and JV formation
impacted ArcelorMittal’s net debt by $527 million, with $400
million on completion in 4Q 2019 and $127 million received in 1Q
2020. The transaction was part of ArcelorMittal’s commitment to
unlock up to $2 billion of value from its asset portfolio by
mid-year 2021.10. ArcelorMittal Italia crude steel
production in 1Q 2021 of 1.0Mt (vs. 4Q 2020 of 0.9Mt); 1Q 2021
steel shipments of 0.9Mt (vs. 4Q 2020 steel shipments of 1.0Mt).
Capex of approximately $0.3 billion per annum has been invested in
ArcelorMittal Italia in 2019 and 2020.11. On
December 19, 2018, ArcelorMittal signed a $5,500,000,000 Revolving
Credit Facility, with a five-year maturity plus two one-year
extension options. During the fourth quarter of 2019, ArcelorMittal
executed the option to extend the facility to December 19, 2024.
The extension was completed for $5.4 billion of the available
amount, with the remaining $0.1 billion remaining with a maturity
of December 19, 2023. In December 2020, ArcelorMittal executed the
second option to extend the facility, and the new maturity is now
extended to December 19, 2025. As of December 31, 2020, the $5.5
billion revolving credit facility was fully available. On May 5,
2020, ArcelorMittal and a syndicate of banks signed a credit
facility with tranches of $0.7 billion and €2.1 billion (the “New
Credit Facility”). Subsequently, the Company's share offering,
which closed on May 14, 2020, and the mandatorily convertible notes
offering, which closed on May 18, 2020, resulted in the
cancellation of commitments of an equivalent amount under the New
Credit Facility that ArcelorMittal had entered into on May 5, 2020.
Subsequently, on July 17, 2020, ArcelorMittal sent a cancellation
notice for all unused amounts under the New Credit Facility. The
cancellation notice was effective on July 22, 2020. As of such
date, the facility was terminated. 12. Assets and
liabilities held for sale as of March 31, 2021, and December 31,
2020, include the assets and liabilities of ArcelorMittal Italia
and heavy plate assets in Europe.13. 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.14. 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.15. In addition to the AM/NS 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 expend 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 / 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.16. As of March 31, 2021, other assets
include these main listed investments of Cleveland Cliffs (8%) at
market value of $1,941 million and Erdemir (12%) at market value of
$778 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.17. On November 1, 2018, AM Investco
Italy completed the acquisition of Ilva Spa (former name of
ArcelorMittal Italia) and its subsidiaries. ArcelorMittal was the
principal partner in AM Investco Italy with 94.45% equity stake in
the consortium, with Banca Intesa Sanpaolo holding 5.55%. ISP
interest was subject to put and call option arrangement. The put
option was exercised in December 2020 simultaneous to the signing
of an investment agreement with Invitalia.18. 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 4Q 2020 of $748 million and $1,250 million in 3Q
2020; outflows in 2Q 2020 of $99 million and $256 million in 1Q
2020.19. 1Q 2021 also includes $89 million annual
dividend income from Erdemir.20. Segment “Other
& eliminations” EBITDA expenses were higher from a loss of $99
million in 4Q 2020 to a loss of $259 million in 1Q 2021 principally
due to increased stock margin eliminations between steel and mining
businesses for the temporary unrealized profits on iron ore
quantities existing in the steel subsidiaries. As iron ore prices
per ton have continued to rise during the latest quarter, the stock
margin eliminations have also increased. No guidance is provided
for FY2021 expectations as this will be determined by the iron ore
price during the period.21. According to this
policy, the Board recommends a $0.30/share base dividend to be paid
in June 2021, subject to the approval of shareholders at the AGM,
and has approved a $570 million share buyback program which has
commenced in March 2021 and is expected to be completed within the
2021 calendar year. This return is additional to the $650 million
share buyback returned to shareholders from the proceeds of the
partial sell-down of the Company’s equity stake in Cleveland Cliffs
announced on February 9, 2021 and completed in 1Q
2021.22. AMNS Calvert key performance indicators
are as follows: Hot strip mill production during 1Q 2021 of 1.3Mt
was 19.3% higher than 1.1Mt in 4Q 2020, with good operational
performance meeting improved demand. EBITDA during 1Q 2021 of $159
million was higher as compared to $56 million in 4Q 2020,
reflecting the improvement in pricing. Annual maintenance capex and
interest costs currently total ~$90 million.
First quarter 2021 earnings analyst conference
call
ArcelorMittal management including Aditya Mittal, Chief
Executive Officer and Genuino Christino, Chief Financial Officer
will host a conference call for members of the investment community
to present and comment on the three-month period ended March 31,
2021 on: Thursday May 6, 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/1136/
Please visit the results section on our website to listen to the
reply once the event has finished
https://corporate.arcelormittal.com/investors/results
Forward-Looking Statements
This document may contain forward-looking information and
statements about ArcelorMittal and its subsidiaries. These
statements include financial projections and estimates and their
underlying assumptions, statements regarding plans, objectives and
expectations with respect to future operations, products and
services, and statements regarding future performance.
Forward-looking statements may be identified by the words
“believe”, “expect”, “anticipate”, “target” or similar expressions.
Although ArcelorMittal’s management believes that the expectations
reflected in such forward-looking statements are reasonable,
investors and holders of ArcelorMittal’s securities are cautioned
that forward-looking information and statements are subject to
numerous risks and uncertainties, many of which are difficult to
predict and generally beyond the control of ArcelorMittal, that
could cause actual results and developments to differ materially
and adversely from those expressed in, or implied or projected by,
the forward-looking information and statements. These risks and
uncertainties include those discussed or identified in the filings
with the Luxembourg Stock Market Authority for the Financial
Markets (Commission de Surveillance du Secteur Financier) and the
United States Securities and Exchange Commission (the “SEC”) made
or to be made by ArcelorMittal, including ArcelorMittal’s latest
Annual Report on Form 20-F on file with the SEC. ArcelorMittal
undertakes no obligation to publicly update its forward-looking
statements, whether as a result of new information, future events,
or otherwise.
About ArcelorMittal
ArcelorMittal is the world's leading steel and mining company,
with a presence in 60 countries and an industrial footprint in 18
countries. Guided by a philosophy to produce safe, sustainable
steel, we are the leading supplier of quality steel in the major
global steel markets including automotive, construction, household
appliances and packaging, with world-class research and development
and outstanding distribution networks.
Through our core values of sustainability, quality and
leadership, we operate responsibly with respect to the health,
safety and wellbeing of our employees, contractors and the
communities in which we operate. For us, steel is the fabric of
life, as it is at the heart of the modern world from railways to
cars and washing machines. We are actively researching and
producing steel-based technologies and solutions that make many of
the products and components people use in their everyday lives more
energy efficient.
We are one of the world’s largest producers of iron ore. With a
geographically diversified portfolio of iron ore assets, we are
strategically positioned to serve our network of steel plants and
the external global market. While our steel operations are
important customers, our supply to the external market is
increasing as we grow. In 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/
Enquiries
ArcelorMittal investor relations: +44 207 543 1128; Retail: +44
207 543 1156; SRI: +44 207 543 1156 and Bonds/credit: +33 1 71 92
10 26.
ArcelorMittal corporate communications (E-mail:
press@arcelormittal.com) +44 0207 629 7988. Contact: Paul Weigh +44
203 214 2419
- 1Q21 Earnings release Final 060521.pdf
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