Key figures for 3Q 2021

Highlights:

  • Health and safety performance: Protecting the health and wellbeing of employees remains the Company’s overarching priority; LTIF rate3 of 0.76x in 3Q 2021 as compared to 0.89x in 2Q 2021; 0.80x in 9M 2021
  • Improved operating results in 3Q 2021, with a positive evolution of steel spreads more than offsetting 8.4% lower steel shipments17 (vs. 2Q 2021) due to weaker demand (in particular automotive order cancellations) as well as production constraints and order shipment delays which are expected to reverse in 4Q 2021
  • 3Q 2021 operating income of $5.3bn compares to $4.4bn in 2Q 2021
  • EBITDA of $6.1bn in 3Q 2021, the strongest quarter since 2008 and 19.9% higher than 2Q 2021
  • Share of JV and associates net income in 3Q 2021 of $0.8bn including solid performance at AMNS India4 and AMNS Calvert5
  • Net income of $4.6bn in 3Q 2021 is the highest level since 2008 (vs. $4.0bn in 2Q 2021)6
  • Lower steel shipments and price impacts led to $2.9bn investment in working capital during 3Q 2021
  • Free cash flow (FCF)14 of $1.6bn generated in 3Q 2021 ($2.4bn net cash provided by operating activities less capex of $0.7bn less minority dividends $0.2bn); Company expects a working capital release to support higher FCF in 4Q 2021
  • Gross debt declined by $1bn to $8.2bn (vs. $9.2bn as end of 2Q 2021 and $12.3bn as end of 2020); net debt declined to $3.9bn, the lowest level since the merger (vs. $5.0bn as end of 2Q 2021 and $6.4bn as end of 2020)

Strategic update:

  • Consistently returning capital:
    • Based on strong 3Q 2021 cash flow, share buyback increased by a further $1.0bn, bringing the capital returns announced since September 2020 to $6bn
  • Continued leadership on decarbonization:
    • Post 2Q 2021 results, ArcelorMittal and the Government of Canada announced a plan to invest CAD$1.8bn in order to reduce CO2 emissions at Dofasco by 2.9Mt; finalizing Government of Canada support and in discussions with Government of Ontario
    • ArcelorMittal Mines Canada (AMMC) to invest CAD$205m in its Port-Cartier pellet plant, enabling this facility to convert its entire 10Mtpa annual pellet production to DRI pellets by the end of 2025
    • The Company signed a letter of intent with the governments of Belgium and Flanders, supporting €1.1bn investment in decarbonization technologies at its flagship Gent plant
    • ArcelorMittal joined Breakthrough Energy’s Catalyst program as an anchor partner
    • The Company contributed to the development of the Mission Possible Partnership’s Net Zero Steel Strategy, published in October 2021 with Energy Transitions Commission and the Rocky Mountain Institute
  • Strategic growth:
    • ArcelorMittal has signed on September 10, 2021, with the Government of the Republic of Liberia an amendment to its Mineral Development Agreement which, upon ratification, will lead to the acceleration of construction of the 15Mtpa concentrator plant project ("phase 2 expansion"); with further expansion opportunities to 30Mtpa
    • AMNS India completed construction of a 6Mtpa pellet plant in Odisha taking its pellet capacity up to 20Mtpa and commenced operations at the Ghoraburhani-Sagasahi iron ore mine in Odisha with 7.2Mtpa capacity
    • During the quarter, the Company approved strategic investments to strengthen its Long products businesses in Brazil (Monlevade expansion, previously “on hold”) and further vertically integrate its Mexico operations through investments at Las Truchas (Mexico) and Serra Azul (Brazil) iron ore mines

Note: As previously announced, effective 2Q 2021, ArcelorMittal has amended its presentation of reportable segments to report the operations of AMMC and Liberia within the Mining segment. The results of each other mine are accounted for within the steel segments that it primarily supplies; as from 2Q 2021 onwards, ArcelorMittal Italia is deconsolidated and accounted for as a joint venture.

“Our third quarter results were supported by the continuing strong price environment, resulting in the highest net income and lowest net debt since 2008. However, this success has been outweighed by our safety results. Improving the group’s safety performance is of the highest priority. We have already this year significantly strengthened our safety procedures and will be analyzing what further interventions can be introduced to ensure we eliminate all fatalities. “At the beginning of the quarter, we announced an ambitious 2030 CO2 reduction target, backed by plans to invest in various decarbonization initiatives. It is our stated aim to lead the steel industry’s important role in ensuring the global economy achieves net zero. That is why we joined Breakthrough Energy Catalyst, are collaborating with the Science Based Targets initiative on a new methodology for the steel sector and are supporting the Industrial Deep Decarbonization Initiative’s campaign for green public procurement, which was launched at COP26 this week. “Despite the volatility we continue to see as a result of the ongoing presence and repercussions of COVID-19, this has been a very strong year for ArcelorMittal. We have re-positioned our balance sheet, re-set ourselves for the transition to a low-carbon economy, we are growing strategically through high-quality, high-return projects and we are returning capital to shareholders. We are aware of the challenges but excited by the opportunities that will exist for steel in the coming years and beyond.” “The outlook remains positive: underlying demand is expected to continue to improve; and, although marginally off the recent record highs, steel prices remain at elevated levels, something which will be reflected in the annual contracts for 2022.” Mr. Aditya Mittal, ArcelorMittal Chief Executive Officer