UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Dated May 28, 2024
Commission File Number: 001-35788
ARCELORMITTAL
(Translation of registrant’s name into English)
24-26, Boulevard d’Avranches
L-1160 Luxembourg
Grand Duchy of Luxembourg
(Address of principal executive office)
Indicate by check mark whether
the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
The following report on Form
6-K has been provided for the purpose of incorporation by reference. It includes the Company’s results for the first quarter of
2024 as Exhibit 99.1.
Exhibit Index
| Exhibit No. |
Description |
| Exhibit 99.1 |
ArcelorMittal’s Results for the First Quarter of 2024 |
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ARCELORMITTAL
Date 28 May 2024
| By: | /s/ Henk Scheffer |
|
|
| Name: | Henk
Scheffer |
|
| Title: | Company Secretary & Group Compliance & Data Protection Officer |
|
ARCELORMITTAL 6-K
Exhibit 99.1
ArcelorMittal reports first quarter 2024 results
On May 2, 2024
- ArcelorMittal (referred to as “ArcelorMittal” or the “Company”
or the "Group") (MT (New York, Amsterdam, Paris, Luxembourg), MTS (Madrid)), the world’s leading integrated steel and
mining company, announced results1 for the three-month period ended March 31,
2024 (“1Q 2024”).
1Q
2024 key highlights:
| ● | Health and safety focus: Protecting employee health and wellbeing remains the overarching priority of the Company; the Company-wide
audit of safety by dss+ is progressing and will support our pathway to zero serious injuries and fatalities; LTIF2 rate of
0.61x in 1Q 2024 |
| ● | Recovering volumes and higher steel spreads supporting improved results: Scope adjusted steel shipments13 increased
+5.0% in 1Q 2024 vs. the three-month period ended December 31, 2023 (“4Q 2023”); Operating income of $1.1 billion in 1Q 2024
vs operating loss of $2.0 billion in 4Q 2023; Net income of $0.9 billion in 1Q 2024 vs. net loss of $3.0 billion in 4Q 2023 |
| ● | Cash flow impacted by seasonal working capital needs: seasonal working capital investment ($1.7 billion of which $0.8 billion,
$0.2 billion and $0.7 billion of trade accounts receivable, inventories and trade & other accounts payable, respectively) together
with capital expenditures ($1.2 billion) in support of strategic growth projects15 |
| ● | Financial strength: Gross debt of $10.2 billion (which includes long-term debt of $8.3 billion and short-term debt of $1.9
billion) and cash and cash equivalents of $5.4 billion9 compares to gross debt of $10.7 billion (which includes long-term debt
of $8.4 billion and short-term debt of $2.3 billion) and cash and cash equivalents of $7.8 billion at December 31, 2023. Net debt, defined
as long-term debt plus short-term debt less cash and cash equivalents) of $4.8 billion as of March 31, 2024 |
Key
developments towards strategic objectives:
| ● | Organic growth: Capital expenditures in 1Q 2024 includes $0.4 billion on strategic growth projects17; strategic
projects to commence operations in the first half of 2024 (“1H 2024”) include Vega CMC (Brazil) and the 1GW renewables project
in India; second half of 2024 (“2H 2024”) projects include Calvert EAF (US), Serra Azul and Barra Mansa in Brazil, electrical
steel in Europe and mine expansion in Liberia |
| ● | Asset portfolio: The Company has agreed to acquire a 28% stake in Vallourec for ~$1.1 billion, increasing its exposure to the
downstream value-added tubular market; targeting premium segments in the America's market, including a focus on energy transition
solutions (CCS and hydrogen); transaction closing is subject to regulatory approvals and currently expected in 2H 2024 |
| ● | Consistent shareholder returns: The Company has repurchased a further 22.5 million shares7 in 1Q 2024, bringing
the total reduction in diluted shares to 35% since September 30, 20205. The Company will continue to return a minimum 50% of
post-dividend free cash flow to shareholders through its share buyback programs. The $0.50/sh base dividend for 2023 will be paid in 2
equal installments in June 2024 and December 2024 |
Financial highlights
(on the basis of IFRS1):
| (USDm) unless otherwise shown |
1Q 24 |
4Q 23 |
3Q 23 |
2Q 23 |
1Q 23 |
| Sales |
16,282 |
14,552 |
16,616 |
18,606 |
18,501 |
| Operating income/(loss) |
1,072 |
(1,980) |
1,203 |
1,925 |
1,192 |
| Net income/(loss) attributable to equity holders of the parent |
938 |
(2,966) |
929 |
1,860 |
1,096 |
| Basic earnings/(loss) per common share (US$) |
1.16 |
(3.57) |
1.11 |
2.21 |
1.28 |
| |
|
|
|
|
|
| Operating income/(loss)/tonne (US$/t) |
80 |
(149) |
88 |
136 |
82 |
| |
|
|
|
|
|
| Crude steel production (Mt) |
14.4 |
13.7 |
15.2 |
14.7 |
14.5 |
| Steel shipments (Mt) |
13.5 |
13.3 |
13.7 |
14.2 |
14.5 |
| Total Group iron ore production (Mt) |
10.2 |
10.0 |
10.7 |
10.5 |
10.8 |
| Iron ore production (Mt) (AMMC and Liberia only) |
6.5 |
6.2 |
6.7 |
6.4 |
6.7 |
| Iron ore shipment (Mt) (AMMC and Liberia only) |
6.3 |
6.1 |
6.3 |
6.6 |
7.4 |
| |
|
|
|
|
|
| Weighted average common shares outstanding (in millions) |
809 |
830 |
838 |
842 |
859 |
Commenting, Aditya Mittal, ArcelorMittal Chief
Executive Officer, said:
“Across the Company our people are galvanized to improve safety
performance. The 3rd party safety audit, which started at the end of December, is now well underway and on target to be completed
in September. We expect this to make valuable recommendations that, combined with the considerable efforts already underway, will enable
us to deliver the safety results we are striving for.
“On financial performance, the improved pricing environment combined
with recovering volumes resulted in sequentially stronger quarterly results, which also now reflect the value contributed by our joint
ventures.
“We have an exciting pipeline of growth projects underway, including
the 1GW renewables project in India and Vega CMC in Brazil, both of which are expected to commence operations in the first half. Meanwhile
the strategic stake in Vallourec will enhance our exposure to the attractive North American market in the value-added tubular market.
We continue to progress with our decarbonization projects, conscious of the need to ensure these investments create value as well as reduce
emissions.
“Maintaining our position as the lead supplier of low carbon
steels is a clear priority and the planned ramp-up at Sestao, along with the new EAF in Gijon which will break ground imminently, will
both have an important role to play. Meanwhile our XCarb® recycled and renewably produced steel will be on show to the
world during the Paris Olympics, in both the Olympic and Paralympic torches and also the Spectacular which will be erected on the Eiffel
Tower.
“Although overall economic sentiment remains subdued, we expect
apparent steel demand ex-China to grow between +3% and +4% this year and are well positioned to benefit from this improvement.”
Safety and sustainable development
Health and safety
The Company- wide audit of safety by dss+ is progressing
and will support our pathway to zero serious injuries and fatalities. The audit will encompass the three pillars of fatality prevention
standards, process risk management and governance. Key updates on the progress of the audit include:
| ● | 30% Fatality Prevention Standards (FPS) audit are complete of sites above 150 full time equivalents (employees and contractors). Audits
cover the three main occupational risks (injured by a machine that was not properly isolated or turned off, crushed by vehicle or moving
machine, and falling from height) leading to serious injuries and fatalities |
| ● | 47% of process safety risk management assessments are complete. dss+ will observe and assess our Group CTO led assessments of the
highest priority countries and assets. |
| ● | 83% of interviews held as part of top-to-bottom health and safety governance review. dss+ will assess all health and safety systems,
processes, structures and capabilities; governance and assurance processes and systems and data management. |
Key recommendations are due to be published in
September 2024 when the audit is complete.
Own personnel and contractors – Lost
Time Injury Frequency rate
| |
1Q 24 |
4Q 23 |
3Q 23 |
2Q 23 |
1Q 23 |
| North America |
— |
0.40 |
0.09 |
0.25 |
0.09 |
| Brazil |
0.08 |
0.18 |
0.22 |
0.30 |
0.34 |
| Europe |
1.28 |
1.50 |
1.50 |
1.51 |
1.19 |
| Sustainable Solutions |
0.89 |
0.59 |
0.65 |
1.10 |
0.81 |
| Mining |
0.16 |
— |
0.19 |
— |
0.24 |
| Others |
0.76 |
3.08 |
1.45 |
0.60 |
0.61 |
| Total |
0.61 |
1.34 |
0.94 |
0.73 |
0.64 |
Sustainable
development highlights:
| ● | Progressing the engineering of our DRI/ EAF decarbonization projects, across Europe and Canada, which is expected to be completed
by the end of this year. For these projects, the Company is also working with country governments to have visibility of the energy costs
and capacity. At the same time, the Company is piloting CCS projects in Belgium and France. All the steps that the Company is taking today
support our strategy to achieve competitive decarbonization, aiming for our technology choices at each asset to maximize our competitive
advantage and deliver an acceptable return on investment. |
| ● | In Brazil, ArcelorMittal and Petrobras have signed a memorandum of understanding to assess potential business models for low-carbon
fuels, hydrogen and its products, renewable energy production and CCS (carbon capture and storage). This follows a joint study to develop
a CCS hub in the state of Espirito Santo. |
| ● | The Company has demonstrated the ability to produce a wide variety of different grades and types of XCarb® recycled
and renewably produced8 products for a multitude of customer applications. Sales of our XCarb® product, which
can have a carbon footprint of as low as 300kg CO2/t, reached 229 thousand tons in 2023, and are expected to more than double in 2024. |
Analysis of results for 1Q 2024 versus 4Q 2023
Sales in 1Q 2024 were +11.9% higher at $16.3 billion as compared to
$14.6 billion in 4Q 2023, reflecting higher average steel selling prices (+4.8%) and higher steel shipment volumes (+1.4%). On a scope
adjusted basis (i.e., excluding Kazakhstan operations that were sold on December 7, 2023) 1Q 2024 steel shipments were +5.0% higher as
compared to 4Q 2023.
The improvement in operating income in 1Q 2024 to $1.1 billion reflects
higher steel shipments and a recovery in steel spreads (primarily due to an increase in steel prices) and improved results in North America,
Brazil and Europe offset by lower Mining segment results. ArcelorMittal recorded net income in 1Q 2024 of $0.9 billion as compared to
a net loss of $3.0 billion in 4Q 2023 (which includes the impacts of non-cash impairments and charges related to the sale of Kazakhstan
operations in 4Q 2023). 1Q 2024 net income was, however, impacted by higher income tax expenses offset in part by the non-cash mark-to-market
gain of $181 million on the Vallourec share price19.
ArcelorMittal's basic earnings per common share for 1Q 2024 was $1.16
as compared to a loss per common share of $3.57 in 4Q 2023.
1Q 2024 net cash used in operating activities of $100 million including
a working capital investment of $1.7 billion (of which $0.8 billion, $0.2 billion and $0.7 billion was trade accounts receivable, inventories
and trade & other accounts payable, respectively). 1Q 2024 net cash used in investing activities includes capital expenditures of
$1.2 billion in support of strategic growth projects15,16. This together with the $0.6 billion share buybacks offset in part
by the sale of the 4.23% remaining stake in Erdemir (generating proceeds of $0.2 billion) mainly led to an increase in net debt to $4.8
billion at March 31, 2024 as compared to $2.9 billion at December 31, 2023. Over the past 12 months, net debt declined by $0.4 billion,
despite investments in capital expenditures and returns to shareholders (dividends paid to ArcelorMittal shareholders for $0.4 billion
and share buybacks of $1.3 billion) totaling $1.7 billion during the period.
Analysis of operations10
North America
| (USDm) unless otherwise shown |
1Q 24 |
4Q 23 |
3Q 23 |
2Q 23 |
1Q 23 |
| Sales |
3,347 |
2,942 |
3,188 |
3,498 |
3,350 |
| Operating income |
585 |
280 |
520 |
662 |
455 |
| Depreciation |
(120) |
(157) |
(125) |
(127) |
(126) |
| Crude steel production (Kt) |
2,180 |
2,185 |
2,122 |
2,244 |
2,176 |
| - Flat shipments (Kt) |
2,245 |
2,028 |
1,938 |
2,046 |
2,208 |
| - Long shipments (Kt) |
666 |
709 |
667 |
667 |
691 |
| Steel shipments* (Kt) |
2,796 |
2,590 |
2,527 |
2,604 |
2,843 |
| Average steel selling price (US$/t) |
1,042 |
948 |
1,043 |
1,116 |
994 |
* North America steel shipments include slabs
sourced by the segment from Group companies (mainly the Brazil segment) and sold to the Calvert JV (eliminated in the Group consolidation).
These shipments can vary between periods due to slab sourcing mix and timing of vessels. 1Q'24 481kt, 4Q'23 432kt, 3Q'23 393kt, 2Q'23
360kt and 1Q'23 474kt.
Sales in 1Q 2024 increased by +13.8% to $3.3 billion, as compared to
$2.9 billion in 4Q 2023 primarily on account of higher average steel selling prices +9.9% and +8.0% increase in steel shipments, driven
primarily by improved demand for flat products.
Operating income in 1Q 2024 increased by +108.9%
to $585 million as compared to $280 million in 4Q 2023, due to a positive price-cost effect, primarily due to higher average steel selling
prices and higher steel shipments.
Brazil6
| (USDm) unless otherwise shown |
1Q 24 |
4Q 23 |
3Q 23 |
2Q 23 |
1Q 23 |
| Sales |
3,051 |
2,709 |
3,560 |
3,826 |
3,068 |
| Operating income |
302 |
171 |
414 |
553 |
323 |
| Depreciation |
(94) |
(77) |
(87) |
(105) |
(72) |
| Crude steel production (Kt) |
3,564 |
3,533 |
3,669 |
3,732 |
3,052 |
| - Flat shipments (Kt) |
2,137 |
2,402 |
2,328 |
2,363 |
1,740 |
| - Long shipments (Kt) |
1,061 |
1,171 |
1,283 |
1,234 |
1,217 |
| Steel shipments (Kt) |
3,180 |
3,562 |
3,599 |
3,583 |
2,937 |
| Average steel selling price (US$/t) |
886 |
852 |
932 |
1,001 |
978 |
Sales in 1Q 2024 increased by +12.6% to $3.1 billion as compared to
$2.7 billion in 4Q 2023, primarily due to a +4.0% increase in average steel selling prices and offset in part by -10.7% decline in steel
shipments, impacted by shipment timing delays, a seasonal inventory build and lower domestic demand in Argentina. 4Q 2023 sales were impacted
by translation impacts from the devaluation of the Argentinian peso.
Operating income in 1Q 2024 of $302 million was +76.7% higher as compared
to $171 million in 4Q 2023, which had been impacted by the devaluation of the Argentinian peso. The improvement in operating income also
reflected a positive price-cost effect (higher selling prices and lower costs), offset in part by lower steel shipments. 4Q 2023 was also
negatively impacted by the devaluation of the Argentinian peso (approximately $80 million).
Europe
| (USDm) unless otherwise shown |
1Q 24 |
4Q 23 |
3Q 23 |
2Q 23 |
1Q 23 |
| Sales |
7,847 |
6,627 |
7,302 |
8,686 |
9,080 |
| Operating income/ (loss) |
69 |
(4) |
139 |
436 |
308 |
| Depreciation |
(274) |
(287) |
(278) |
(270) |
(263) |
| Crude steel production (Kt) |
7,604 |
6,540 |
7,398 |
6,827 |
7,680 |
| - Flat shipments (Kt) |
5,302 |
4,570 |
4,483 |
5,049 |
5,468 |
| - Long shipments (Kt) |
1,939 |
1,840 |
1,945 |
2,068 |
2,148 |
| Steel shipments (Kt) |
7,236 |
6,407 |
6,425 |
7,114 |
7,613 |
| Average steel selling price (US$/t) |
945 |
935 |
980 |
1,048 |
1,008 |
Sales in 1Q 2024 increased by +18.4% to $7.8 billion, as compared to
$6.6 billion in 4Q 2023, primarily due to improved shipment volumes, following the end of destocking which impacted the prior quarter.
Operating income in 1Q 2024 was $69 million as compared to an operating
loss of $4 million in 4Q 2023 primarily due to higher steel shipment volumes offset in part by higher costs.
India and JVs
Income from associates, joint-ventures and other
investments (excluding impairments and exceptional items, if any) for 1Q 2024 was higher at $242 million as compared to $188 million in
4Q 2023, primarily due to higher contributions from Calvert, European and American investees partially offset by the reduced income from
AMNS India.
ArcelorMittal has investments in various joint
ventures and associate entities globally. The Company considers 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.
AMNS India
| (USDm) unless otherwise shown |
1Q 24 |
4Q 23 |
3Q 23 |
2Q 23 |
1Q 23 |
| Production (Kt) (100% basis) |
1,984 |
1,964 |
1,942 |
1,792 |
1,765 |
| Shipments (Kt) (100% basis) |
2,016 |
1,868 |
1,874 |
1,679 |
1,830 |
| Sales (100% basis) |
1,815 |
1,712 |
1,680 |
1,606 |
1,712 |
AMNS India recorded 2.0Mt of crude steel production
in 1Q 2024 reaching an 8.1Mt annual run-rate in March 2024 (close to 8.6Mt capacity debottlenecking target).
Record steel shipments in 1Q 2024 of 2.0Mt, an increase of +7.9% as
compared to 4Q 2023, and includes higher exports.
During 1Q 2024, AMNS India experienced a negative price-cost effect
including a lower impact from natural gas hedges, offset in part by higher shipments.
Calvert12
| (USDm) unless otherwise shown |
1Q 24 |
4Q 23 |
3Q 23 |
2Q 23 |
1Q 23 |
| Production (Kt) (100% basis) |
1,216 |
1,052 |
1,178 |
1,198 |
1,226 |
| Shipments (Kt) (100% basis) |
1,131 |
1,079 |
1,063 |
1,157 |
1,170 |
| Sales (100% basis) |
1,236 |
1,114 |
1,195 |
1,328 |
1,223 |
Calvert production in 1Q 2024 improved +15.6% following planned maintenance
in 4Q 2023.
During 1Q 2024, Calvert benefited from higher average selling prices
and an improved mix with higher share of automotive shipments.
Sustainable Solutions18
| (USDm) unless otherwise shown |
1Q 24 |
4Q 23 |
3Q 23 |
2Q 23 |
1Q 23 |
| Sales |
2,889 |
2,457 |
2,680 |
3,218 |
3,112 |
| Operating income |
26 |
15 |
21 |
120 |
69 |
| Depreciation |
(44) |
(38) |
(35) |
(39) |
(31) |
Sales in 1Q 2024 was higher at $2.9 billion as
compared to $2.5 billion in 4Q 2023 due to higher activity levels.
Operating income in 1Q 2024 was higher at $26
million as compared to $15 million in 4Q 2023. Operating income in 1Q 2024 benefited from improved margins in the Projects business and
higher activity levels in Distribution & Service Centers, offset in part by a seasonally weaker Construction business.
Mining
| (USDm) unless otherwise shown |
1Q 24 |
4Q 23 |
3Q 23 |
2Q 23 |
1Q 23 |
| Sales |
729 |
764 |
729 |
680 |
904 |
| Operating income |
246 |
270 |
275 |
225 |
374 |
| Depreciation |
(65) |
(69) |
(57) |
(56) |
(56) |
| Iron ore production (Mt) |
6.5 |
6.2 |
6.7 |
6.4 |
6.7 |
| Iron ore shipment (Mt) |
6.3 |
6.1 |
6.3 |
6.6 |
7.4 |
Note: Mining segment comprises iron ore operations of ArcelorMittal
Mines Canada (AMMC) and ArcelorMittal Liberia.
Operating income in 1Q 2024 was -9.0% lower at $246 million as compared
to $270 million in 4Q 2023 driven by lower iron ore reference prices (-3.8%) and higher freight costs offset in part by higher iron ore
shipments despite Liberia rail not operating at capacity.
Other recent developments
| ● | On April 22, 2024, ArcelorMittal Calvert, wholly owned by ArcelorMittal, announced that it is planning
for an advanced manufacturing facility in Calvert, Alabama that could deliver 150,000 metric tons (Mt) of domestic production capacity
of non-grain-oriented electrical steel (NOES) annually. The U.S. Department of Energy (DOE) defined electrical steel as a critical material
for energy as part of its 2023 Critical Materials Assessment. In support of this clean energy project, ArcelorMittal Calvert has been
awarded $280.5 million in investment tax credits from the U.S. Internal Revenue Service (IRS) as part of the Qualifying Advanced Energy
Project Credit (48C) program, funded by the Inflation Reduction Act of 2022 (IRA). The 48C program, which provides a tax credit of up
to 30% for investments in advanced energy projects, is designed to support secure and resilient domestic clean energy supply chains. |
| ● | On March 19, 2024, ArcelorMittal announced that Kleber Silva to be the new Chief Executive Officer of the Mining segment. Kleber is
re-joining ArcelorMittal after leaving the group in 2017. Kleber has an extensive experience of 35 years in mining and metal industries,
with great achievements in safety, value creation, growth, turnaround, and operational excellence. He began his career in 1988 at MBR
and Vale. Since then, he has held various senior operation responsibilities within Eramet, Vale Brazil and at Québec Cartier Mining
Company in Canada (later ArcelorMittal Mines Canada). |
Outlook
Overall economic sentiment remains subdued with customers maintaining
a “wait and see” approach with no restocking yet apparent. Nevertheless, sentiment appears to have reached a floor and given
the low inventory environment (particularly Europe) as soon as real demand begins to gradually improve, apparent demand is expected to
rebound. The Company continues to forecast World ex-China apparent steel consumption ("ASC") to grow +3.0% to +4.0% in 2024,
including: +1.5% to +3.5% in US; +2.0% to +4.0% in Europe; +0.5% to +2.5% in Brazil and +6.5% to +8.5% in India.
The Company remains positive on the medium/long-term steel demand outlook
and believes that it is optimally positioned to execute its strategy of growth with capital returns.
Capital expenditures in 2024 are expected to remain within the $4.5-$5.0
billion range (of which $1.4-$1.5 billion is expected as strategic growth capital expenditures).
ArcelorMittal
Condensed Consolidated Statements of Financial Position1
| In millions of U.S. dollars |
Mar 31, 2024 |
Dec 31, 2023 |
Mar 31, 2023 |
| ASSETS |
|
|
|
| Cash and cash equivalents |
5,437 |
7,783 |
6,290 |
| Trade accounts receivable and other |
4,403 |
3,661 |
4,989 |
| Inventories |
18,372 |
18,759 |
19,820 |
| Prepaid expenses and other current assets |
3,462 |
3,037 |
4,655 |
| Total Current Assets |
31,674 |
33,240 |
35,754 |
| |
|
|
|
| Goodwill and intangible assets |
5,016 |
5,102 |
5,023 |
| Property, plant and equipment |
33,477 |
33,656 |
32,900 |
| Investments in associates and joint ventures |
10,141 |
10,078 |
10,904 |
| Deferred tax assets |
9,521 |
9,469 |
8,571 |
| Other assets |
2,118 |
2,372 |
2,108 |
| Total Assets |
91,947 |
93,917 |
95,260 |
| |
|
|
|
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
| Short-term debt and current portion of long-term debt |
1,873 |
2,312 |
2,827 |
| Trade accounts payable and other |
12,674 |
13,605 |
13,312 |
| Accrued expenses and other current liabilities |
5,890 |
5,852 |
6,687 |
| Total Current Liabilities |
20,437 |
21,769 |
22,826 |
| |
|
|
|
| Long-term debt, net of current portion |
8,348 |
8,369 |
8,650 |
| Deferred tax liabilities |
2,330 |
2,432 |
2,596 |
| Other long-term liabilities |
5,175 |
5,279 |
5,067 |
| Total Liabilities |
36,290 |
37,849 |
39,139 |
| |
|
|
|
| Equity attributable to the equity holders of the parent |
53,591 |
53,961 |
53,974 |
| Non-controlling interests |
2,066 |
2,107 |
2,147 |
| Total Equity |
55,657 |
56,068 |
56,121 |
| Total Liabilities and Shareholders’ Equity |
91,947 |
93,917 |
95,260 |
ArcelorMittal
Condensed Consolidated Statements of Operations1
| |
Three months ended |
| In millions of U.S. dollars unless otherwise shown |
Mar 31, 2024 |
Dec 31, 2023 |
Sept 30, 2023 |
Jun 30, 2023 |
Mar 31, 2023 |
| Sales |
16,282 |
14,552 |
16,616 |
18,606 |
18,501 |
| Depreciation |
(642) |
(703) |
(662) |
(680) |
(630) |
| Impairment items3, 4 |
— |
(1,038) |
— |
— |
— |
| Result on disposal of Kazakhstan operations4 |
— |
(1,663) |
— |
— |
— |
| Operating income(loss) |
1,072 |
(1,980) |
1,203 |
1,925 |
1,192 |
| Operating margin % |
6.6% |
(13.6)% |
7.2% |
10.3% |
6.4% |
| |
|
|
|
|
|
| Income from associates, joint ventures and other investments (excluding impairments) |
242 |
188 |
285 |
393 |
318 |
| Impairments of associates, joint ventures and other investments11 |
— |
(1,405) |
— |
— |
— |
| Net interest expense |
(63) |
(3) |
(31) |
(47) |
(64) |
| Foreign exchange and other net financing (loss) |
(80) |
(240) |
(224) |
(133) |
(117) |
| Income(loss) before taxes and non-controlling interests |
1,171 |
(3,440) |
1,233 |
2,138 |
1,329 |
| Current tax expense |
(321) |
(128) |
(282) |
(316) |
(282) |
| Deferred tax benefit |
124 |
582 |
10 |
85 |
93 |
| Income tax (expense)/benefit (net) |
(197) |
454 |
(272) |
(231) |
(189) |
| Income(loss) including non-controlling interests |
974 |
(2,986) |
961 |
1,907 |
1,140 |
| Non-controlling interests (income)loss |
(36) |
20 |
(32) |
(47) |
(44) |
| Net income/(loss) attributable to equity holders of the parent |
938 |
(2,966) |
929 |
1,860 |
1,096 |
| |
|
|
|
|
|
| Basic earnings/(loss) per common share ($) |
1.16 |
(3.57) |
1.11 |
2.21 |
1.28 |
| Diluted earnings/(loss) per common share ($) |
1.16 |
(3.57) |
1.10 |
2.20 |
1.27 |
| |
|
|
|
|
|
| Weighted average common shares outstanding (in millions) |
809 |
830 |
838 |
842 |
859 |
| Diluted weighted average common shares outstanding (in millions) |
811 |
830 |
841 |
845 |
862 |
| |
|
|
|
|
|
| OTHER INFORMATION |
|
|
|
|
|
| |
|
|
|
|
|
| Total Group iron ore production (Mt) |
10.2 |
10.0 |
10.7 |
10.5 |
10.8 |
| Crude steel production (Mt) |
14.4 |
13.7 |
15.2 |
14.7 |
14.5 |
| Steel shipments (Mt) |
13.5 |
13.3 |
13.7 |
14.2 |
14.5 |
ArcelorMittal
Condensed Consolidated Statements of Cash flows1
| |
Three months ended |
| In millions of U.S. dollars |
Mar 31, 2024 |
Dec 31, 2023 |
Sept 30, 2023 |
Jun 30, 2023 |
Mar 31, 2023 |
| Operating activities: |
|
|
|
|
|
| Income/(loss) attributable to equity holders of the parent |
938 |
(2,966) |
929 |
1,860 |
1,096 |
| Adjustments to reconcile net income to net cash provided by operations: |
|
|
|
|
|
| Non-controlling interests income(loss) |
36 |
(20) |
32 |
47 |
44 |
| Depreciation |
642 |
703 |
662 |
680 |
630 |
| Impairment3,4 |
— |
1,038 |
— |
— |
— |
| Result
on disposal of Kazakhstan operations4 |
— |
1,663 |
— |
— |
— |
| Income from associates, joint ventures and other investments |
(242) |
(188) |
(285) |
(393) |
(318) |
| Impairment of equity-method investments11 |
— |
1,405 |
— |
— |
— |
| Deferred tax benefit |
(124) |
(582) |
(10) |
(85) |
(93) |
| Change in trade accounts receivable (A) |
(810) |
884 |
158 |
311 |
(1,046) |
| Change in inventories (B) |
(196) |
333 |
500 |
(138) |
873 |
| Change in trade and other accounts payable (C) |
(713) |
1,253 |
(927) |
5 |
(602) |
| Other operating activities (net) |
369 |
(195) |
222 |
(200) |
365 |
| Net cash (used) provided by operating activities |
(100) |
3,328 |
1,281 |
2,087 |
949 |
| Investing activities: |
|
|
|
|
|
| Purchase of property, plant and equipment and intangibles |
(1,236) |
(1,450) |
(1,165) |
(1,060) |
(938) |
| Other investing activities (net)14 |
274 |
464 |
187 |
45 |
(1,931) |
| Net cash used in investing activities |
(962) |
(986) |
(978) |
(1,015) |
(2,869) |
| Financing activities: |
|
|
|
|
|
| Net (payments)proceeds relating to payable to banks and long-term debt |
(334) |
(195) |
262 |
(1,011) |
(390) |
| Dividends paid to ArcelorMittal shareholders |
— |
(184) |
— |
(185) |
— |
| Dividends paid to minorities |
(77) |
(31) |
(66) |
(12) |
(53) |
| Share buyback |
(597) |
(466) |
(38) |
(227) |
(477) |
| Lease payments and other financing activities (net) |
(52) |
(53) |
(56) |
(55) |
(429) |
| Net cash (used) provided by financing activities |
(1,060) |
(929) |
102 |
(1,490) |
(1,349) |
| Net (decrease)increase in cash and cash equivalents |
(2,122) |
1,413 |
405 |
(418) |
(3,269) |
| Effect of exchange rate changes on cash |
(190) |
128 |
(85) |
64 |
148 |
| Change in cash and cash equivalents |
(2,312) |
1,541 |
320 |
(354) |
(3,121) |
| |
|
|
|
|
|
| Change in working capital (A + B + C) |
(1,719) |
2,470 |
(269) |
178 |
(775) |
| |
|
|
|
|
|
Appendix 1: Capital expenditures1
| (USDm) |
1Q 24 |
4Q 23 |
3Q 23 |
2Q 23 |
1Q 23 |
| North America |
111 |
117 |
72 |
122 |
115 |
| Brazil |
203 |
292 |
243 |
215 |
167 |
| Europe |
443 |
398 |
367 |
312 |
321 |
| Sustainable Solutions |
160 |
322 |
150 |
84 |
55 |
| Mining |
235 |
205 |
207 |
204 |
168 |
| Others |
84 |
116 |
126 |
123 |
112 |
| Total |
1,236 |
1,450 |
1,165 |
1,060 |
938 |
Appendix 2: Debt repayment schedule as of March 31,
2024
| (USD billion) |
2024 |
2025 |
2026 |
2027 |
2028 |
>2028 |
Total |
| Bonds |
0.3 |
1.0 |
1.0 |
1.2 |
— |
2.7 |
6.2 |
| Commercial paper |
0.8 |
— |
— |
— |
— |
— |
0.8 |
| Other loans |
0.7 |
0.7 |
0.3 |
0.7 |
0.1 |
0.7 |
3.2 |
| Total gross debt |
1.8 |
1.7 |
1.3 |
1.9 |
0.1 |
3.4 |
10.2 |
As of March 31, 2024, the average debt maturity is 5.8 years.
Appendix 3: Reconciliation of gross debt to net debt
| (USD million) |
Mar 31, 2024 |
Dec 31, 2023 |
Mar 31, 2023 |
| Gross debt |
10,221 |
10,681 |
11,477 |
| Less: Cash and cash equivalents |
(5,437) |
(7,783) |
(6,290) |
| Net debt |
4,784 |
2,898 |
5,187 |
Appendix 4: Terms and definitions
Unless indicated otherwise, or the context otherwise requires, references
in this earnings release to the following terms have the meanings set out next to them below:
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: represents cash and cash equivalents,
restricted cash and short-term investments.
Capital expenditures: 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.
Depreciation: refers to amortization and depreciation.
EPS: refers to basic or diluted earnings per share.
FEED: Front End Engineering Design, or FEED, is an engineering
and project management approach undertaken before detailed engineering, procurement, and construction. This crucial phase helps manage
project risks and thoroughly prepare for the project's execution. It directly follows the pre-feed phase during which the concept is selected,
and the feasibility of available options is studied.
Foreign exchange and other net financing (loss): (revaluation
of financial instruments, net foreign exchange income/expense (i.e., the net effects of transactions in a foreign currency other than
the functional currency of a subsidiary) and other net financing costs (which mainly include bank fees, accretion of defined benefit and
long-term liabilities, revaluation of derivative instruments and other charges that cannot be directly linked to operating results)).
Gross debt: long-term debt and short-term
debt.
Impairment items: refers to impairment charges net of reversals.
Income from associates, joint ventures and other investments:
refers to income from associates, joint ventures and other investments (excluding impairments and exceptional items if any).
Iron ore reference prices: refers to iron ore prices for 62%
Fe CFR China.
Kt: refers to thousand metric tonnes.
LTIF: refers to 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.
Net interest expense: includes interest expense less interest
income.
On-going projects: refer to projects for which construction
has begun (excluding various projects that are under development), even if such projects have been placed on hold pending improved operating
conditions.
Operating results: refers to operating income(loss).
Operating segments: North America segment includes the Flat,
Long and Tubular operations of Canada, Mexico; and also includes all Mexico mines. 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 includes Bosnia and Herzegovina captive iron ore mines; Sustainable
Solutions division includes Downstream Solutions and Tubular operations of the European business. The Others segment includes the Flat,
Long and Tubular operations of Kazakhstan (till December 7, 2023), Ukraine and South Africa; and also includes the captive iron ore mines
in Ukraine and iron ore and coal mines in Kazakhstan (till December 7, 2023). 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).
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
| 1. | The financial information in this press release has been prepared consistently with International Financial Reporting Standards (“IFRS”)
as issued by the International Accounting Standards Board (“IASB”) and as adopted by the European Union. The interim financial
information included in this announcement has also been prepared in accordance with IFRS applicable to interim periods, however this announcement
does not contain sufficient information to constitute an interim financial report as defined in International Accounting Standard 34,
“Interim Financial Reporting”. The numbers in this press release have not been audited. The financial information and certain
other information presented in a number of tables in this press release have been rounded to the nearest whole number or the nearest decimal.
Therefore, the sum of the numbers in a column may not conform exactly to the total figure given for that column. In addition, certain
percentages presented in the tables in this press release reflect calculations based upon the underlying information prior to rounding
and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded
numbers. Segment information presented in this press release is prior to inter-segment eliminations and certain adjustments made to operating
results 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. |
| 2. | LTIF refers to lost time injury frequency rate equals lost time injuries per 1,000,000 worked hours, based on own personnel and contractors. |
| 3. | Impairment charges included $0.9 billion relating to operations in Kazakhstan (including $0.2 billion goodwill) (see footnote 4) and
$0.1 billion related to the announced closure of the Long business of ArcelorMittal South Africa. Since then, the Company has been in
discussions with government representatives to determine the extent of state support that could be provided to mitigate or prevent the
closure of these operations. |
| 4. | Following the sale of the Company's steel and mining operations in Kazakhstan in 4Q 2023, the Company recorded a $1.7 billion loss
on disposal including mainly $1.5 billion cumulative translation losses previously recorded against equity and reclassified to the consolidated
statements of operations. |
| 5. | September 30, 2020 was the inception date of the ongoing share buyback programs. |
| 6. | On March 9, 2023, ArcelorMittal announced that following receipt of customary regulatory approvals it had completed the acquisition
of Companhia Siderúrgica do Pecém (‘CSP’) in Brazil for an enterprise value of approximately $2.2 billion. |
| 7. | Company has repurchased 22.5 million shares during 1Q 2024, totaling 48.8 million shares from the current 85 million share buyback
program. |
| 8. | XCarb® is designed to bring together all of ArcelorMittal’s reduced, low and zero-carbon products and steelmaking
activities, as well as wider initiatives and green innovation projects, into a single effort focused on achieving demonstrable progress
towards carbon neutral steel. Alongside the new XCarb® brand, we have launched three XCarb® initiatives:
the XCarb® innovation fund, XCarb® green steel certificates and XCarb® recycled and renewably
produced for products made via the Electric Arc Furnace route using scrap. The Company is offering green steel using a system of certificates
(XCarb® green certificates). These will be issued by an independent auditor to certify tonnes of CO2 savings achieved through
the Company’s investment in decarbonization technologies in Europe. Net-zero equivalence is determined by assigning CO2 savings
certificates equivalent to CO2 per tonne of steel produced in 2018 as baseline. 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. |
| 9. | As of March 31, 2024, the $5.4 billion Revolving Credit Facility ("RCF") was fully available. At the end of the quarter,
the Company had cash and cash equivalents of $5.4 billion and $5.4 billion of available credit lines. |
| 10. | As announced with ArcelorMittal’s fourth quarter 2023 financial results, the Company has amended its presentation of reportable
segments. The changes, applied from January 1, 2024, are as follows: The NAFTA segment has been renamed "North America", a core
growth region for the Company; A new ‘Sustainable Solutions’ segment is composed of a number of high-growth, niche, capital
light businesses, playing an important role in supporting climate action (including renewables, special projects and construction business).
Previously reported within the Europe segment, this is a growth vector of the Company and represents businesses employing over 12,000
people at more than 260 commercial and production sites across 60+ countries. Following the sale of the Company’s operations in
Kazakhstan, the remaining parts of the former ‘ACIS’ segment have been assigned to ‘Others’; there are no changes
to the ‘Brazil’ and ‘Mining’ segments. These changes have been applied as from January 1, 2024 and the comparative
periods of 2023 shown herein have been retrospectively recast. |
| 11. | Impairments of equity method investments were $1.4 billion for 4Q 2023 and relate to the impairment of the Company’s investment
in Acciaierie d'Italia (ADI) following downward revisions to the expected future cash flows. On February 20, 2024, the Italian Government
issued a decree placing Acciaierie d’Italia in extraordinary administration subsequent to the request of Invitalia, thereby passing
control of ADI from its current shareholders, ArcelorMittal and Invitalia, to government appointed commissioners. |
| 12. | Production: Including all production of the hot strip mill including processing of slabs on a hire work basis for ArcelorMittal Group
entities and third parties, including stainless steel slabs. Shipments: including shipments of finished products processed on a hire work
basis for ArcelorMittal Group entities and third parties, including stainless steel products. |
| 13. | Excluding impact on disposal of Kazakhstan operations that was sold on December 7, 2023. |
| 14. | The Company sold the remaining 4.23% stake in Erdemir in 1Q 2024, generating total proceeds of $0.2 billion. |
| 15. | 1Q 2024 includes decarbonization capital expenditures of $0.1 billion and strategic growth capital expenditures of $0.4 billion. |
| 16. | Other projects under development include: ArcelorMittal Texas: Plans under development to double capacity and add CCS capability;
Calvert (US): Option to add a second 1.5Mt EAF at lower capital expenditure intensity; Electrical steels US (Alabama): 150kt NGO electrical
steels for automotive; Government support received; engineering studies underway; Liberia further expansion to 30Mt; and India further
expansion: Hazira to 20Mt and Greenfield on the east coast of India. |
| 17. | Strategic projects capital expenditures in 1Q 2024 primarily include investments for the Liberia expansion project (first concentrate),
the renewables energy project in India and Mardyck electrical steels. |
| 18. | Sustainable Solutions is focused on growing niche businesses providing vital added-value support to growing sustainable related applications
from a low-carbon, capital light asset base. These businesses include: a) Construction solutions: Product offerings include sandwich panels
(e.g. insulation), profiles, turnkey pre-fabrication solutions, etc., to assist building in smarter ways and reduce the carbon footprint
of buildings; b) Projects: Product range includes plates, pipes & tubes, wire ropes, reinforced steels, providing high-quality &
sustainable steel solutions for energy projects and supporting offshore wind, energy transition and onshore construction; c) Industeel:
EAF based capacity: High quality steel grades designed to meet demanding customer specifications (e.g. XCarb® for wind
turbines); Supplying wide range of industries; energy, chemicals, mechanical engineering, machinery, infrastructure, defence & security;
d) Renewables: investments in renewable energy projects; e) Metallics: investment and development of the Company’s scrap recycling
and collection capabilities; f) Distribution & service centers: European services processor including slitting, cut-to-length, multi
blanking, and press blanking and operating through an extensive network. |
| 19. | Vallourec share price increased to €17.20 as at the end of March 31, 2024, as compared to €14.64 contractually agreed at
the signing of the share price agreement for 65.2 million shares on March 12, 2024, generating a non-cash mark-to-market gain of $181
million at the end of March 31, 2024. In accordance with IFRS, the Company recognized a gain as the final fair value of the investment
is unknown until transaction closing. |
| 20. | Considering share buy backs of $1.3 billion and dividends paid to ArcelorMittal shareholders of $0.4 billion. |
Forward-Looking
Statements
This document contains 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.
Non-GAAP/Alternative
Performance Measures
This press release also includes certain non-GAAP financial/alternative
performance measures. ArcelorMittal presents net debt and change in working capital, which ArcelorMittal believes to be relevant to enhance
the understanding of its financial position and provides additional information to investors and management with respect to the Company’s
operating cash flows, capital structure and credit assessment. These are additional Non-GAAP financial/alternative performance measures,
which should be read in conjunction with, and not as an alternative to, ArcelorMittal's financial information prepared in accordance with
IFRS. Comparable IFRS measures and reconciliations of non-GAAP financial/alternative performance measures are presented herein. Such non-GAAP
measures may not be comparable to similarly titled measures applied by other companies.
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