Form 20-F ☒
|
Form 40-F ☐
|
Exhibit No.
|
Description
|
Exhibit 99.1
|
Press release dated May 7, 2020, ArcelorMittal reports first quarter 2020 results.
|
Exhibit No.
|
Description
|
Press release dated May 7, 2020, ArcelorMittal reports first quarter 2020 results.
|
ARCELORMITTAL
|
|||
Date 7 May 2020
|
|||
By:
|
/s/ Henk Scheffer
|
||
Name:
|
Henk Scheffer
|
||
Title:
|
Company Secretary & Group Compliance & Data Protection Officer
|
• |
Faced with a significant humanitarian challenge from the COVID-19 pandemic, the Company’s first priority has been to take all the necessary actions to safeguard the
wellbeing of our people and to provide support to the extent required in the communities in which we operate
|
• |
Economic activity and steel market conditions have significantly deteriorated since measures were introduced by governments worldwide to contain the COVID-19 pandemic
|
• |
The Company has responded swiftly: aligning production to a lower order book, and taking measures to reduce all costs in line with exceptionally low capacity
utilization levels
|
• |
Health and safety performance: LTIF rate2 of 1.01x in 1Q 2020
|
• |
Improved operating performance in 1Q 2020 reflects the positive market developments prior to the escalation of the COVID-19 pandemic in
March; operating loss of $0.4bn (vs. loss of $1.5bn in 4Q 2019); EBITDA increased to $1.0bn (4.5% higher than 4Q 2019)
|
• |
Net loss of $1.1bn in 1Q 2020 (adjusted net loss of $0.6bn, excluding impairment and exceptional items)3
|
• |
Strong cash management during the quarter, including a working capital investment limited to $0.1bn; gross debt of $13.8bn and a marginal increase in net debt to
$9.5bn (down $1.7bn vs 1Q 2019)
|
• |
Liquidity at the end of 1Q 2020 stood at $9.8bn (consisting of cash and cash equivalents of $4.3bn and $5.5bn of available credit lines5); further supplemented by a recently signed new $3bn credit facility5
|
• |
The Company has moved swiftly to secure its assets and match production to the evolving orderbook, with steel shipments for 2Q 2020 expected within the range of 13.5Mt to 14.5Mt; the actions taken to reduce
all costs in line with reduced operating rates is expected to yield a reduction in fixed costs10 by 25%-30% in 2Q 2020, essentially maintaining fixed costs per-tonne at the 1Q 2020 level; EBITDA for 2Q 2020 is expected to be within the range of $0.4bn to $0.6bn
|
• |
Certain cash needs of the business are now expected to be approximately $3.5bn in 2020 (vs. $4.5bn previous guidance), due to lower planned capex (reduced to $2.4bn from $3.2bn previous guidance) and lower
taxes
|
• |
Annual working capital needs will be determined by the extent market conditions recover in 2H 2020, but the Company still expects to release the $1bn in working capital previously targeted
|
• |
The Company’s $2 billion asset portfolio optimization program continues to progress. Given suitable and viable buyers have expressed serious interest in
certain assets, the Company remains confident in completing the program by mid-2021
|
• |
While the impacts of COVID-19 have introduced unanticipated challenges, the Company continues to target achievement of its $7bn net debt objective in the near term
|
• |
Against the backdrop of significant cost savings measures being taken across the business, the Board determined it both appropriate and prudent to suspend dividend payments until such a time as
the operating environment normalizes.
|
(USDm) unless otherwise shown
|
1Q 20
|
4Q 19
|
3Q 19
|
2Q 19
|
1Q 19
|
Sales
|
14,844
|
15,514
|
16,634
|
19,279
|
19,188
|
Operating (loss) / income
|
(353)
|
(1,535)
|
297
|
(158)
|
769
|
Net (loss)/income attributable to equity holders of the parent
|
(1,120)
|
(1,882)
|
(539)
|
(447)
|
414
|
Basic (loss)/earnings per common share (US$)
|
(1.11)
|
(1.86)
|
(0.53)
|
(0.44)
|
0.41
|
Operating (loss) / income / tonne (US$/t)
|
(18)
|
(78)
|
15
|
(7)
|
35
|
EBITDA
|
967
|
925
|
1,063
|
1,555
|
1,652
|
EBITDA/ tonne (US$/t)
|
50
|
47
|
53
|
68
|
76
|
Steel-only EBITDA/ tonne (US$/t)
|
34
|
32
|
34
|
43
|
56
|
Crude steel production (Mt)
|
21.1
|
19.8
|
22.2
|
23.8
|
24.1
|
Steel shipments (Mt)
|
19.5
|
19.7
|
20.2
|
22.8
|
21.8
|
Own iron ore production (Mt)
|
14.4
|
14.8
|
13.6
|
14.6
|
14.1
|
Iron ore shipped at market price (Mt)
|
8.6
|
9.6
|
8.4
|
9.9
|
9.2
|
Lost time injury frequency rate
|
1Q 20
|
4Q 19
|
3Q 19
|
2Q 19
|
1Q 19
|
Mining
|
0.79
|
1.27
|
1.53
|
0.64
|
0.38
|
NAFTA
|
0.56
|
0.63
|
0.54
|
0.46
|
0.58
|
Brazil
|
0.45
|
0.32
|
0.21
|
0.43
|
0.48
|
Europe
|
1.04
|
1.06
|
1.18
|
1.00
|
0.85
|
ACIS
|
0.82
|
0.83
|
0.59
|
0.58
|
0.75
|
Total Steel
|
0.72
|
0.78
|
0.71
|
0.69
|
0.71
|
Total (Steel and Mining) excluding ArcelorMittal Italia
|
0.72
|
0.84
|
0.82
|
0.68
|
0.66
|
ArcelorMittal Italia
|
7.93
|
10.61
|
13.45
|
13.73
|
11.05
|
Total (Steel and Mining) including ArcelorMittal Italia
|
1.01
|
1.25
|
1.36
|
1.26
|
1.14
|
• |
The Company is preparing a report on its 2030 target to reduce CO2
in Europe by 30%, laying out the constituent elements of its roadmap to 2030, including supportive policy frameworks to enable the roll out of technology. A second Group wide Climate Action report, with a new global CO2
target, is expected in 2H 2020.
|
• |
The Company’s 2019 sustainability performance was published in the Factbook (the full Integrated Annual Review will be published in mid-May). Highlight includes:
|
◦ |
In 2019 the Company avoided the emission of over 11 million tonnes CO2 in the cement industry through the sale of 15 million tonnes of blast furnace slag for use as cement – 19% more than in 2018.
ArcelorMittal’s own CO2 footprint from its steelmaking operations fell by over 4.4% year on year.
|
• |
The Company’s programme to certify 100% of its integrated sites in Europe against the ResponsibleSteel™ site standard started in 1Q 2020, and has been subsequently delayed due to COVID-19.
|
(USDm) unless otherwise shown
|
1Q 20
|
4Q 19
|
3Q 19
|
2Q 19
|
1Q 19
|
Sales
|
4,304
|
4,020
|
4,395
|
5,055
|
5,085
|
Operating (loss) / income
|
(120)
|
(912)
|
(24)
|
(539)
|
216
|
Depreciation
|
(126)
|
(152)
|
(147)
|
(137)
|
(134)
|
Impairment
|
—
|
(700)
|
—
|
(600)
|
—
|
Exceptional items
|
(241)
|
(200)
|
—
|
—
|
—
|
EBITDA
|
247
|
140
|
123
|
198
|
350
|
Crude steel production (kt)
|
5,503
|
5,261
|
5,658
|
5,590
|
5,388
|
Steel shipments (kt)
|
5,536
|
5,029
|
5,135
|
5,438
|
5,319
|
Average steel selling price (US$/t)
|
715
|
731
|
792
|
836
|
874
|
(USDm) unless otherwise shown
|
1Q 20
|
4Q 19
|
3Q 19
|
2Q 19
|
1Q 19
|
Sales
|
1,592
|
1,902
|
1,929
|
2,126
|
2,156
|
Operating income
|
150
|
177
|
196
|
234
|
239
|
Depreciation
|
(69)
|
(63)
|
(62)
|
(79)
|
(70)
|
Exceptional items
|
—
|
—
|
—
|
—
|
—
|
EBITDA
|
219
|
240
|
258
|
313
|
309
|
Crude steel production (kt)
|
2,679
|
2,489
|
2,669
|
2,830
|
3,013
|
Steel shipments (kt)
|
2,351
|
2,717
|
2,810
|
2,785
|
2,880
|
Average steel selling price (US$/t)
|
642
|
628
|
676
|
705
|
704
|
(USDm) unless otherwise shown
|
1Q 20
|
4Q 19
|
3Q 19
|
2Q 19
|
1Q 19
|
Sales
|
7,654
|
8,035
|
8,796
|
10,396
|
10,494
|
Operating (loss) / income
|
(426)
|
(649)
|
(168)
|
(301)
|
11
|
Depreciation
|
(347)
|
(323)
|
(311)
|
(313)
|
(309)
|
Impairment charges
|
(92)
|
(28)
|
—
|
(347)
|
(150)
|
Exceptional items
|
(191)
|
(456)
|
—
|
—
|
—
|
EBITDA
|
204
|
158
|
143
|
359
|
470
|
Crude steel production (kt)
|
9,912
|
9,030
|
10,432
|
12,079
|
12,372
|
Steel shipments (kt)
|
9,300
|
9,290
|
9,698
|
11,811
|
11,553
|
Average steel selling price (US$/t)
|
638
|
654
|
686
|
704
|
729
|
(USDm) unless otherwise shown
|
1Q 20
|
4Q 19
|
3Q 19
|
2Q 19
|
1Q 19
|
Sales
|
1,446
|
1,632
|
1,654
|
1,906
|
1,645
|
Operating (loss) / income
|
(60)
|
(238)
|
35
|
114
|
64
|
Depreciation
|
(86)
|
(105)
|
(93)
|
(85)
|
(81)
|
Impairment
|
—
|
(102)
|
—
|
—
|
—
|
Exceptional items
|
(21)
|
(76)
|
—
|
—
|
—
|
EBITDA
|
47
|
45
|
128
|
199
|
145
|
Crude steel production (kt)
|
2,998
|
2,973
|
3,450
|
3,252
|
3,323
|
Steel shipments (kt)
|
2,614
|
2,985
|
2,718
|
3,182
|
2,662
|
Average steel selling price (US$/t)
|
471
|
460
|
532
|
536
|
541
|
(USDm) unless otherwise shown
|
1Q 20
|
4Q 19
|
3Q 19
|
2Q 19
|
1Q 19
|
Sales
|
990
|
1,105
|
1,182
|
1,423
|
1,127
|
Operating income
|
168
|
185
|
260
|
457
|
313
|
Depreciation
|
(129)
|
(116)
|
(112)
|
(113)
|
(107)
|
EBITDA
|
297
|
301
|
372
|
570
|
420
|
Own iron ore production (Mt)
|
14.4
|
14.8
|
13.6
|
14.6
|
14.1
|
Iron ore shipped externally and internally at market price (a) (Mt)
|
8.6
|
9.6
|
8.4
|
9.9
|
9.2
|
Iron ore shipment - cost plus basis (Mt)
|
4.8
|
5.8
|
6.2
|
5.6
|
4.6
|
Own coal production (Mt)
|
1.3
|
1.4
|
1.4
|
1.5
|
1.2
|
Coal shipped externally and internally at market price (a) (Mt)
|
0.8
|
0.7
|
0.7
|
0.7
|
0.7
|
Coal shipment - cost plus basis (Mt)
|
0.6
|
0.7
|
0.8
|
0.7
|
0.7
|
• |
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”). The Credit
Facility further enhances the Company's already strong liquidity position of $9.8 billion as of March 31, 2020, including a $5.5 billion revolving credit facility, which remains undrawn and is available until December 2024. The New Credit
Facility has a maturity of 12 months and can be used for general corporate purposes. While the Company has no immediate need to draw on this New Credit Facility, it provides additional financial flexibility in the current extraordinary
circumstances.
|
• |
On March 17, 2020, AMNS Luxembourg Holding S.A. (“AMNS”), the parent company of the AMNS India joint venture in partnership with Nippon Steel Corporation (“NSC”), entered into a $5.146
billion ten-year term loan agreement with Japan Bank for International Cooperation (“JBIC”) and MUFG BANK, LTD., SUMITOMO MITSUI BANKING CORPORATION, MIZUHO BANK EUROPE N.V., and SUMITOMO MITSUI TRUST BANK, LIMITED (LONDON BRANCH). The
proceeds of the loan have been used to refinance in full the amounts borrowed by AMNS in connection with the acquisition of ArcelorMittal Nippon Steel India Limited (formerly known as Essar Steel India Limited), including the
amounts borrowed under the $7 billion bridge term facilities agreement guaranteed by ArcelorMittal. ArcelorMittal is the guarantor of the debt in proportion to its ownership interest (60%).
|
• |
On March 9, 2020, ArcelorMittal redeemed all of the outstanding $659 million of its 6.250% Notes due February 25, 2022 for a total aggregate purchase price including
accrued interest and premium on early repayment of $725 million.
|
• |
On March 4, 2020, ArcelorMittal announced that AM InvestCo and the Ilva Commissioners had signed an amendment (the ‘Amendment Agreement’) to the original lease and purchase
agreement for Ilva. The Amendment Agreement outlines the terms for a significant investment by Italian state-sponsored entities into AM InvestCo, thereby forming the basis for an important new partnership between ArcelorMittal and the
Italian government. The equity investment by the Italian Government in Ilva, to be captured in an agreement (the ‘Investment Agreement’) to be executed by November 30, 2020, will be at least equal to AM InvestCo’s remaining liabilities
against the original purchase price for Ilva. The Amendment Agreement is structured around a new industrial plan for Ilva, which involves investment in lower-carbon steelmaking technologies. In the event that the Investment Agreement is
not executed by November 30, 2020, AM InvestCo has a withdrawal right, subject to an agreed payment. Final closing of the lease and purchase agreement is now scheduled by May 2022, subject to various conditions precedent.
|
• |
On March 3, 2020, ArcelorMittal published its annual report for the year ended December 31, 2019. The report has been filed with the electronic database of the Luxembourg
Stock Exchange (www.bourse.lu) and is available on corporate.arcelormittal.com under "Investors > Financial reports > Annual reports".
|
• |
On March 3, 2020, ArcelorMittal filed its Annual Report for 2019 on Form 20-F with the U.S. Securities and Exchange Commission (SEC). The report is now available on
ArcelorMittal's website. ArcelorMittal will send a hard copy of the Annual Report for 2019 on Form 20-F, which includes the audited financial statements, to shareholders free of charge upon request.
|
In millions of U.S. dollars
|
Mar 31,
2020
|
Dec 31,
2019
|
Mar 31,
2019
|
ASSETS
|
|||
Cash and cash equivalents
|
4,298
|
4,995
|
2,246
|
Trade accounts receivable and other
|
3,456
|
3,569
|
5,131
|
Inventories
|
15,626
|
17,296
|
20,583
|
Prepaid expenses and other current assets
|
2,551
|
2,756
|
3,000
|
Assets held for sale6
|
—
|
—
|
1,950
|
Total Current Assets
|
25,931
|
28,616
|
32,910
|
Goodwill and intangible assets
|
4,911
|
5,432
|
5,549
|
Property, plant and equipment
|
33,522
|
36,231
|
36,647
|
Investments in associates and joint ventures
|
6,334
|
6,529
|
5,000
|
Deferred tax assets
|
8,669
|
8,680
|
8,318
|
Other assets
|
1,961
|
2,420
|
4,236
|
Total Assets
|
81,328
|
87,908
|
92,660
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||
Short-term debt and current portion of long-term debt
|
3,147
|
2,869
|
2,739
|
Trade accounts payable and other
|
11,968
|
12,614
|
14,232
|
Accrued expenses and other current liabilities
|
5,645
|
5,804
|
5,699
|
Liabilities held for sale6
|
—
|
—
|
828
|
Total Current Liabilities
|
20,760
|
21,287
|
23,498
|
Long-term debt, net of current portion
|
10,650
|
11,471
|
10,591
|
Deferred tax liabilities
|
2,075
|
2,331
|
2,337
|
Other long-term liabilities
|
11,820
|
12,336
|
11,945
|
Total Liabilities
|
45,305
|
47,425
|
48,371
|
Equity attributable to the equity holders of the parent
|
34,249
|
38,521
|
42,286
|
Non-controlling interests
|
1,774
|
1,962
|
2,003
|
Total Equity
|
36,023
|
40,483
|
44,289
|
Total Liabilities and Shareholders’ Equity
|
81,328
|
87,908
|
92,660
|
Three months ended
|
||||||||||
In millions of U.S. dollars unless otherwise shown
|
Mar 31,
2020
|
Dec 31,
2019
|
Sept 30,
2019
|
Jun 30,
2019
|
Mar 31,
2019
|
|||||
Sales
|
14,844
|
15,514
|
16,634
|
19,279
|
19,188
|
|||||
Depreciation (B)
|
(771)
|
(802)
|
(766)
|
(766)
|
(733)
|
|||||
Impairment charges (B)
|
(92)
|
(830)
|
—
|
(947)
|
(150)
|
|||||
Exceptional items3 (B)
|
(457)
|
(828)
|
—
|
—
|
—
|
|||||
Operating (loss) / income (A)
|
(353)
|
(1,535)
|
297
|
(158)
|
769
|
|||||
Operating margin %
|
(2.4)
|
%
|
(9.9)
|
%
|
1.8
|
%
|
(0.8)
|
%
|
4.0
|
%
|
Income from associates, joint ventures and other investments
|
142
|
20
|
25
|
94
|
208
|
|||||
Net interest expense
|
(115)
|
(140)
|
(152)
|
(154)
|
(161)
|
|||||
Foreign exchange and other net financing loss
|
(451)
|
(117)
|
(524)
|
(173)
|
(231)
|
|||||
(Loss) / income before taxes and non-controlling interests
|
(777)
|
(1,772)
|
(354)
|
(391)
|
585
|
|||||
Current tax expense
|
(162)
|
(260)
|
(121)
|
(225)
|
(180)
|
|||||
Deferred tax (expense) / benefit
|
(178)
|
135
|
(64)
|
211
|
45
|
|||||
Income tax expense
|
(340)
|
(125)
|
(185)
|
(14)
|
(135)
|
|||||
(Loss) / income including non-controlling interests
|
(1,117)
|
(1,897)
|
(539)
|
(405)
|
450
|
|||||
Non-controlling interests income / (loss)
|
(3)
|
15
|
—
|
(42)
|
(36)
|
|||||
Net (loss) / income attributable to equity holders of the parent
|
(1,120)
|
(1,882)
|
(539)
|
(447)
|
414
|
|||||
Basic (loss) / earnings per common share ($)
|
(1.11)
|
(1.86)
|
(0.53)
|
(0.44)
|
0.41
|
|||||
Diluted (loss) / earnings per common share ($)
|
(1.11)
|
(1.86)
|
(0.53)
|
(0.44)
|
0.41
|
|||||
Weighted average common shares outstanding (in millions)
|
1,012
|
1,012
|
1,012
|
1,014
|
1,014
|
|||||
Diluted weighted average common shares outstanding (in millions)
|
1,012
|
1,012
|
1,012
|
1,014
|
1,017
|
|||||
OTHER INFORMATION
|
||||||||||
EBITDA (C = A-B)
|
967
|
925
|
1,063
|
1,555
|
1,652
|
|||||
EBITDA Margin %
|
6.5
|
%
|
6.0
|
%
|
6.4
|
%
|
8.1
|
%
|
8.6
|
%
|
Own iron ore production (Mt)
|
14.4
|
14.8
|
13.6
|
14.6
|
14.1
|
|||||
Crude steel production (Mt)
|
21.1
|
19.8
|
22.2
|
23.8
|
24.1
|
|||||
Steel shipments (Mt)
|
19.5
|
19.7
|
20.2
|
22.8
|
21.8
|
Three months ended
|
|||||
In millions of U.S. dollars
|
Mar 31,
2020
|
Dec 31,
2019
|
Sept 30,
2019
|
Jun 30,
2019
|
Mar 31,
2019
|
Operating activities:
|
|||||
(Loss)/income attributable to equity holders of the parent
|
(1,120)
|
(1,882)
|
(539)
|
(447)
|
414
|
Adjustments to reconcile net income to net cash provided by operations:
|
|||||
Non-controlling interests (income) / loss
|
3
|
(15)
|
—
|
42
|
36
|
Depreciation and impairment
|
863
|
1,632
|
766
|
1,713
|
883
|
Exceptional items3
|
457
|
828
|
—
|
—
|
—
|
Income from associates, joint ventures and other investments
|
(142)
|
(20)
|
(25)
|
(94)
|
(208)
|
Deferred tax expense / (benefit)
|
178
|
(135)
|
64
|
(211)
|
(45)
|
Change in working capital
|
(109)
|
2,600
|
(203)
|
353
|
(553)
|
Other operating activities (net)
|
464
|
(76)
|
265
|
430
|
444
|
Net cash provided by operating activities (A)
|
594
|
2,932
|
328
|
1,786
|
971
|
Investing activities:
|
|||||
Purchase of property, plant and equipment and intangibles (B)
|
(850)
|
(815)
|
(941)
|
(869)
|
(947)
|
Other investing activities (net)
|
95
|
(936)
|
125
|
305
|
254
|
Net cash used in investing activities
|
(755)
|
(1,751)
|
(816)
|
(564)
|
(693)
|
Financing activities:
|
|||||
Net (payments) / proceeds relating to payable to banks and long-term debt
|
(224)
|
126
|
804
|
468
|
(136)
|
Dividends paid
|
(103)
|
(21)
|
(61)
|
(204)
|
(46)
|
Share buyback
|
—
|
—
|
—
|
—
|
(90)
|
Lease payments and other financing activities (net)
|
(59)
|
(86)
|
(84)
|
(84)
|
(72)
|
Net cash (used in) / provided by financing activities
|
(386)
|
19
|
659
|
180
|
(344)
|
Net (decrease) / increase in cash and cash equivalents
|
(547)
|
1,200
|
171
|
1,402
|
(66)
|
Cash and cash equivalents transferred from/(to) assets held for sale
|
—
|
—
|
—
|
21
|
(11)
|
Effect of exchange rate changes on cash
|
(131)
|
131
|
(155)
|
17
|
(15)
|
Change in cash and cash equivalents
|
(678)
|
1,331
|
16
|
1,440
|
(92)
|
Free cash flow (C=A+B)
|
(256)
|
2,117
|
(613)
|
917
|
24
|
(000'kt)
|
1Q 20
|
4Q 19
|
3Q 19
|
2Q 19
|
1Q 19
|
Flat
|
4,853
|
4,325
|
4,454
|
4,732
|
4,750
|
Long
|
846
|
819
|
847
|
873
|
721
|
NAFTA
|
5,536
|
5,029
|
5,135
|
5,438
|
5,319
|
Flat
|
1,277
|
1,553
|
1,513
|
1,563
|
1,699
|
Long
|
1,085
|
1,176
|
1,312
|
1,236
|
1,194
|
Brazil
|
2,351
|
2,717
|
2,810
|
2,785
|
2,880
|
Flat
|
7,023
|
6,827
|
7,225
|
8,824
|
8,647
|
Long
|
2,170
|
2,323
|
2,333
|
2,883
|
2,821
|
Europe
|
9,300
|
9,290
|
9,698
|
11,811
|
11,553
|
CIS
|
1,827
|
2,087
|
1,657
|
2,064
|
1,617
|
Africa
|
786
|
890
|
1,060
|
1,113
|
1,049
|
ACIS
|
2,614
|
2,985
|
2,718
|
3,182
|
2,662
|
(USDm)
|
1Q 20
|
4Q 19
|
3Q 19
|
2Q 19
|
1Q 19
|
NAFTA
|
205
|
191
|
210
|
144
|
182
|
Brazil
|
67
|
96
|
68
|
80
|
84
|
Europe
|
323
|
273
|
390
|
337
|
353
|
ACIS
|
122
|
108
|
153
|
115
|
137
|
Mining
|
121
|
133
|
107
|
125
|
115
|
Total
|
850
|
815
|
941
|
869
|
947
|
Segment
|
Site / unit
|
Project
|
Capacity / details
|
Actual completion
|
|
Europe
|
Sosnowiec (Poland)
|
Modernization of Wire Rod Mill
|
Upgrade rolling technology improving the mix of HAV products and increase volume by 90kt
|
4Q 2019
|
|
ACIS
|
ArcelorMittal Kryvyi Rih
(Ukraine)
|
New LF&CC 3
|
Facilities upgrade to switch from ingot to continuous caster route. Additional billets of up to 145kt over ingot route through yield increase
|
2Q 2019
|
|
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
|
Segment
|
Site / unit
|
Project
|
Capacity / details
|
Forecasted 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 states of the art coilers and new runout tables
|
2021(b)
|
|
NAFTA
|
Burns Harbor (US)
|
New Walking Beam Furnaces
|
Two new walking beam reheat furnaces bringing benefits on productivity, quality and operational cost
|
2021
|
|
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
|
2023(c)
|
|
Brazil
|
Juiz de Fora
|
Melt shop expansion
|
Increase in meltshop capacity by 0.2Mt/year
|
On hold(d)
|
|
Brazil
|
Monlevade
|
Sinter plant, blast furnace and melt shop
|
Increase in liquid steel capacity by 1.2Mt/year;
Sinter feed capacity of 2.3Mt/year
|
On hold(d)
|
|
Mining
|
Liberia
|
Phase 2 expansion project
|
Increase production capacity to 15Mt/year
|
Under review(e)
|
(USD billion)
|
2020
|
2021
|
2022
|
2023
|
2024
|
≥2024
|
Total
|
Bonds
|
0.5
|
0.3
|
0.8
|
1.4
|
1.8
|
3.7
|
8.5
|
Commercial paper
|
1.1
|
—
|
—
|
—
|
—
|
—
|
1.1
|
Other loans
|
1.4
|
0.7
|
0.5
|
0.8
|
0.2
|
0.6
|
4.2
|
Total gross debt
|
3.0
|
1.0
|
1.3
|
2.2
|
2.0
|
4.3
|
13.8
|
(USD million)
|
March 31, 2020
|
December 31, 2019
|
March 31, 2019
|
Gross debt (excluding that held as part of the liabilities held for sale)
|
13,797
|
14,340
|
13,330
|
Gross debt held as part of the liabilities held for sale
|
—
|
—
|
96
|
Gross debt
|
13,797
|
14,340
|
13,426
|
Less:
|
|||
Cash and cash equivalents
|
(4,298)
|
(4,995)
|
(2,246)
|
Cash and cash equivalents held as part of the assets held for sale
|
—
|
—
|
(21)
|
Net debt (including that held as part of the assets and the liabilities held for sale)
|
9,499
|
9,345
|
11,159
|
Net debt / LTM EBITDA
|
2.1
|
1.8
|
1.2
|
(USDm)
|
1Q 20
|
4Q 19
|
3Q 19
|
2Q 19
|
1Q 19
|
Net (loss) / income
|
(1,120)
|
(1,882)
|
(539)
|
(447)
|
414
|
Impairment
|
(92)
|
(830)
|
—
|
(947)
|
(150)
|
Exceptional items
|
(457)
|
(828)
|
—
|
—
|
—
|
Adjusted net (loss) / income
|
(571)
|
(224)
|
(539)
|
500
|
564
|
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 also prepared in accordance with IFRS applicable to interim periods, however this announcement does not contain sufficient
information to constitute an interim financial report as defined in International Accounting 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 (loss) / income as it believes it is a useful measure for the underlying business performance excluding
impairment and exceptional items. 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 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. The Company’s guidance as to the EBITDA range for 2020 is based on the same accounting policies as those applied in the Company’s financial statements prepared in accordance with
IFRS. 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. Such non-GAAP/alternative performance
measures may not be comparable to similarly titled measures applied by other companies.
|
2. |
Excluding the impact of ArcelorMittal Italia, the LTIF was 0.72x for 1Q 2020 as compared to 0.84x for 4Q 2019 and 0.66x for 1Q 2019.
|
3. |
Impairment charges for 1Q 2020 were $92 million and relate to the permanent coke plant closure in Florange, France, at the end of April 2020. Impairment charges for 4Q 2019 were $830 million and related to
impairment of the fixed assets of ArcelorMittal USA ($0.7 billion) following impairment assessments performed during the quarter, resulting from a further decrease in the near-term average selling price assumption and $0.1 billion in South
Africa (primarily related to the fixed assets of Newcastle Works in South Africa following lower domestic volumes). Impairment charges for 1Q 2019 were $150 million related to the remedy asset sales for the ArcelorMittal Italia acquisition.
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. Exceptional items of $828 million for 4Q 2019, primarily included inventory related charges in NAFTA and Europe following a
period of exceptionally weak steel pricing.
|
4. |
ArcelorMittal Mines Canada, otherwise known as ArcelorMittal Mines and Infrastructure Canada.
|
5. |
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 as of March 31, 2020. The facility may
be further extended for an additional year in December 2020. As of March 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”). The Credit Facility further enhances the Company's already strong liquidity position of $9.8 billion as of March 31, 2020, including a $5.5 billion revolving credit facility,
which remains undrawn and is available until December 2024. The New Credit Facility has a maturity of 12 months and can be used for general corporate purposes. While the Company has no immediate need to draw on this New Credit Facility, it
provides additional financial flexibility in the current extraordinary circumstances.
|
6. |
Assets and liabilities held for sale, as of March 31, 2019 include the ArcelorMittal Italia remedy package assets (as previously disclosed in the 1Q 2018 earnings release)
and sold in June 2019, and the carrying value of the USA long product facilities at Steelton (“Steelton”). Steelton is no longer held for sale as of March 31, 2020.
|
7. |
Relates to the rollover of the Indian rupee hedge at market price which protects the dollar funds needed for the Essar transaction as per the resolution plan approved by the
Committee of Creditors and the National Company Law Tribunal in Ahmedabad. The hedge was unwound on the closing of the acquisition in 4Q 2019. On October 17, 2018, the Company announced that it had approved a payment of 7,469 crore rupees
(c.$1 billion, subsequently paid) to the financial creditors of Uttam Galva and KSS Petron to clear overdue debts in order that the offer it submitted for ESIL on April 2, 2018 would be eligible and considered by ESIL’s CoC.
|
8. |
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 is part of ArcelorMittal’s commitment to unlock up to $2 billion of value from its asset portfolio by mid-year 2021.
|
9. |
AMNS India key performance indicators for 1Q 2020 are as follows: 1Q 2020 crude steel production of 1.7Mt (7.0Mt annualized run rate) and EBITDA of $140 million (annualized $560 million). AMNS India’s operations have now been impacted by the COVID-19 pandemic and lockdown measures introduced in the country during late 1Q 2020, with the assets currently running at low utilization levels. The cash
needs (i.e. maintenance capex, interest and tax) are less than $250 million per annum. Progress on value chain integration: On March 3, 2020 the Company welcomed judgment by NCLT Cuttack approving AMNS resolution plan for the Odisha Slurry
Pipeline Infrastructure Ltd (OSPIL). The 253km pipeline connects AMNS India’s iron ore beneficiation plant in Dabuna to its pellet plant in Paradip in the state of Odisha. On March 3, 2020, AMNS India announced completion of the acquisition of Bhander Power Plant in Hazira, Gujarat from Edelweiss Asset Reconstruction Company for approximately $70 million. Bhander, a natural gas-based thermal plant with an installed
capacity of 500MW, will remain captive to AMNS India’s steel manufacturing operations at Hazira. In early March 2020, ArcelorMittal India Private Limited (AMIPL) was selected as the preferred bidder for a 5.5Mtpa iron ore mine
license in Odisha following an auction process facilitated by the state government, with an acquisition cost of approximately $15 million. On conclusion of the license award process, AMIPL will seek requisite clearances, as well as mine
development and production agreements, ahead of commencing mining operations. This is consistent with AMNS India’s medium to long term strategy to significantly grow its production capacity in India.
|
10. |
The Company is temporarily reducing fixed cost in line with lower production rates. As a result, 2Q 2020 fixed cost are expected to be 25-30% below 1Q 2020 levels. The steps taken by the Company include: a)
temporary labour cost savings: senior management / Board of Directors salary reduction; utilizing available economic unemployment schemes; temporary layoffs; federal and state subsidy/grants; salary cuts; reduction/elimination of
contractors, overtime reduction etc. b) reduction in repairs and maintenance (R&M) expenses: spend expected to be lower due to lower operating rates; and c) reduced SG&A expenses: Fixed cost savings achieved from countries in which
we operate where the currency has depreciated, as well as reduced SG&A expenses such as IT, travel, sales and marketing expenses, consultancy fees etc.
|
11. |
On April 3, 2020, ArcelorMittal South Africa made an announcement related to the impact of the COVID-19 pandemic. This referred to the critical steps taken during 2019 to ensure the sustainability of ArcelorMittal
South Africa, including the large-scale labour reorganisation concluded at the beginning of the year, the Strategic Asset Footprint Review, which resulted in the decision to place the Saldanha Works into care and maintenance and the review
of the Newcastle Works, which is now primarily focused on servicing the domestic and Africa Overland markets. It announced that the anticipated impact of COVID-19 on the economy has led ArcelorMittal South Africa to consider further
measures to ensure its sustainability. Several temporary interventions have been implemented, including curtailment of expenditure on non-critical goods and services, and salary reductions for all employees with effect from April 2020 for a
likely period of three months.
|
12. |
The Company considered the impact of the COVID-19 outbreak as an impairment indicator as of 1Q 2020 for its main steel operations. Accordingly, it updated future cash flow projections
to reflect latest forecasts available for 2Q 2020 and 3Q 2020 and, as a result, concluded that no impairment charge was required as of March 31, 2020.
|
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#
|