ArcelorMittal reports fourth quarter 2018 and full year 2018
results
Luxembourg, February 7, 2019 - 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-month and twelve-month periods ended December 31,
2018.
2018 highlights:
- Health and safety performance improved in FY 2018 with annual
LTIF rate of 0.69x vs. 0.78x in FY 2017
- FY 2018 operating income of $6.5bn (+20.3% YoY); operating
income of $1.0bn in 4Q 2018 (-15.6% YoY)
- FY 2018 EBITDA of $10.3bn (+22.1% YoY); EBITDA of $2.0bn in 4Q
2018 (-8.9% YoY)
- FY 2018 net income of $5.1bn, +12.7% higher as compared to
$4.6bn for FY 2017
- FY 2018 steel shipments of 83.9Mt (-1.6% YoY); 4Q 2018 steel
shipments of 20.2Mt (-3.6% YoY)
- FY 2018 crude steel production of 92.5Mt (-0.6% YoY); 4Q 2018
crude steel production of 22.8Mt (stable YoY)
- FY 2018 iron ore shipments of 58.3Mt (+0.7% YoY), of which
37.6Mt shipped at market prices (+5.5% YoY); 4Q 2018 iron ore
shipments of 15.7Mt (+9.8% YoY), of which 10.0Mt shipped at market
prices (+18.2% YoY)
- Gross debt of $12.6bn as of December 31, 2018. Net debt of
$10.2bn as of December 31, 2018, lower as compared to $10.5bn as of
September 30, 2018 and broadly stable as compared to $10.1bn as of
December 31, 2017
- FY 2018 cash flow from operating activities of $4.2bn less
capex of $3.3bn for free cash flow (FCF) of $0.9bn despite working
capital investment of $4.4bn, premium to repay bonds ($0.1bn) and
litigation fines ($0.1bn)4
Strategic progress in 2018:
- Improved asset portfolio through the completed acquisitions of
Votorantim in Brazil and Ilva in Italy, as well as being selected
as the successful bidder for Essar Steel India Limited (ESIL) in
partnership with Nippon Steel & Sumitomo Metal Corporation
Group (NSSMC), which subject to completion, would provide
improvement potential and growth optionality
- Continued progress as the leader in innovation including the
LanzaTech carbon capture and conversion project at Gent,
Steligence® and new products and solutions to address the
automotive platforms of the future
- Improvement in leverage ratio: FY 2018 net debt/EBITDA of 1.0x
vs.1.2x in FY 2017
- Cash needs of the business in 2018 were limited to $5.0bn,
below the guidance of $5.8bn provided in mid-year. Capex of $3.3bn
was below our guidance of $3.7bn due to timing of payments which
will therefore be carried over to 2019. Net interest of $0.6bn was
in line with our guidance. “Taxes, pension and others” came in at
$1.1bn, below our guidance of $1.5bn, due to the combined effects
of: certain cash tax settlements being deferred from 2018 to 2019;
higher than anticipated dividends received from our investments in
associates; and net gains on other accounts
- Achieved the primary financial objective of an investment grade
rating with all 3 credit rating agencies
- Limited Action 2020 progress in 2018, with ongoing cost/mix
gains (+$0.4bn) offset in part by volumes losses (-$0.3bn)
following operational disruptions during the year. As a result,
cumulative savings 2016-2018 of $1.6bn achieved; ongoing focus and
execution to deliver target of $3bn savings by 2020
Capital allocation: Continued focus on
deleveraging and investment in high return projects
- An investment grade credit rating remains ArcelorMittal’s
financial priority, with a target to reduce net debt to below $6bn,
to support solid investment grade metrics at all points of the
cycle
- The Company is capitalizing on opportunities to invest which
will enhance future returns, including Ilva (asset revitalization),
Mexico hot strip mill (mix improvement) and Vega HAV (Brazil mix
improvement)
- ArcelorMittal intends to progressively increase the base
dividend paid to its shareholders, and, on attainment of the net
debt target, return a percentage of free cash flow annually.
Accordingly, the Board proposes an increase in the base dividend
for 2019 (paid from 2018 earnings) to $0.20 per share which will be
proposed to the shareholders at the AGM in May 2019
Outlook and guidance:
- ArcelorMittal expects global steel demand to slightly expand in
FY 2019 as compared to FY 2018
- Steel shipments are expected to increase, supported by improved
operational performance
- The Company expects certain cash needs of the business
(including capex, interest, cash taxes, pensions and certain other
cash costs but excluding working capital changes) to increase in
2019 to approximately $6.4bn. Capex is expected to increase to
$4.3bn (versus $3.3bn in FY 2018) including $0.4bn carried over
from 2018, the impact of Ilva ($0.4bn) and the continued investment
in high returns projects in Mexico and Brazil. Interest is expected
to be stable at $0.6bn while cash taxes, pensions and other cash
costs are expected to increase by $0.4bn primarily on account of
certain cash tax settlements deferred from 2018 and non-recurrence
of certain gains on other accounts
Financial highlights (on the basis of
IFRS1):
(USDm)
unless otherwise shown |
4Q 18 |
3Q 18 |
4Q 17 |
12M 18 |
12M 17 |
Sales |
18,327 |
|
18,522 |
|
17,710 |
|
76,033 |
|
68,679 |
|
Operating income |
1,042 |
|
1,567 |
|
1,234 |
|
6,539 |
|
5,434 |
|
Net income attributable to equity holders of the parent |
1,193 |
|
899 |
|
1,039 |
|
5,149 |
|
4,568 |
|
Basic earnings per share (US$)2 |
1.18 |
|
0.89 |
|
1.02 |
|
5.07 |
|
4.48 |
|
|
|
|
|
|
|
Operating income/ tonne (US$/t) |
51 |
|
76 |
|
59 |
|
78 |
|
64 |
|
EBITDA |
1,951 |
|
2,729 |
|
2,141 |
|
10,265 |
|
8,408 |
|
EBITDA/ tonne (US$/t) |
96 |
|
133 |
|
102 |
|
122 |
|
99 |
|
Steel-only EBITDA/ tonne (US$/t) |
79 |
|
119 |
|
89 |
|
107 |
|
82 |
|
|
|
|
|
|
|
Crude steel production (Mt) |
22.8 |
23.3 |
22.7 |
92.5 |
93.1 |
Steel shipments (Mt) |
20.2 |
20.5 |
21.0 |
83.9 |
85.2 |
Own iron ore production (Mt) |
14.9 |
14.5 |
14.4 |
58.5 |
57.4 |
Iron ore shipped at market price (Mt) |
10.0 |
8.5 |
8.4 |
37.6 |
35.7 |
Commenting, Mr. Lakshmi N. Mittal,
ArcelorMittal Chairman and CEO, said:
“2018 was a year of positive momentum for ArcelorMittal
characterized by important strategic and financial
progress. Operating in a healthy market environment, the
Company enjoyed a strong financial performance, delivering
substantial profitability improvement. Having considerably
strengthened our balance sheet in recent years, we also regained
our investment grade credit rating.
With an established leadership position in many regions,
ArcelorMittal targets specific growth opportunities to complement
our existing global presence. The acquisitions of Votorantim
and Ilva, both completed in 2018, provide us with enhanced
leadership positions in key markets. Meanwhile our bid for
Essar can provide us with a quality, scalable presence in the
rapidly expanding India steel market.
Delivery against our Action 2020 targets is an important focus
for the Group in 2019. We did not perform at an optimum level
operationally in 2018 and will seek to minimize operational
disruption this year to ensure we meet our volume targets.
Although the issue of global overcapacity persists and there are
well publicised macro-economic risks, we expect further, moderate
global steel demand growth this year. Having considerably
strengthened the Company in recent years, we are in a strong
position to generate healthy levels of free cash and prosper
through the cycle.”
Sustainable development and safety
performance
Health and safety - Own personnel and
contractors lost time injury frequency rate
Health and safety performance (excluding the impact of the Ilva
acquisition), based on own personnel figures and contractors lost
time injury frequency (LTIF) rate was 0.70x in the fourth quarter
of 2018 (“4Q 2018”) as compared to 0.62x for the third quarter of
2018 (“3Q 2018”) and 0.87x for the fourth quarter of 2017 (“4Q
2017”).
Health and safety performance (excluding the impact from the
acquisition of Ilva) improved to 0.69x in the twelve months of 2018
(“12M 2018” or "FY 2018") as compared to 0.78x for the twelve
months of 2017 (“12M 2017” or "FY 2017").
Health and safety performance inclusive of Ilva (as consolidated
from November 1, 2018) was 0.91x for 4Q 2018 and 0.73x for FY
2018.
The Company’s efforts to improve its Health and Safety record
remain focused on both further reducing the rate of severe injuries
and preventing fatalities. The figures presented in the table below
exclude the Ilva acquisition.
Own personnel and contractors -
Frequency rate
Lost time injury frequency rate |
4Q 18 |
3Q 18 |
4Q 17 |
12M 18 |
12M 17 |
Mining |
0.64 |
|
0.63 |
|
0.86 |
|
0.61 |
|
0.77 |
|
NAFTA |
0.37 |
|
0.56 |
|
0.76 |
|
0.53 |
|
0.73 |
|
Brazil |
0.28 |
|
0.39 |
|
0.46 |
|
0.36 |
|
0.43 |
|
Europe |
1.11 |
|
0.76 |
|
1.00 |
|
0.93 |
|
1.03 |
|
ACIS |
0.59 |
|
0.61 |
|
0.97 |
|
0.61 |
|
0.61 |
|
Total Steel |
0.71 |
|
0.62 |
|
0.88 |
|
0.70 |
|
0.78 |
|
Total (Steel and Mining) |
0.70 |
|
0.62 |
|
0.87 |
|
0.69 |
|
0.78 |
|
Key sustainable development highlights
for 4Q 2018:
- ArcelorMittal reaffirmed its commitment to ResponsibleSteelTM,
the steel industry's first multi-stakeholder global certification
initiative. The Company has taken a leading role in forming the
initiative with customers, NGOs, banks as well as other steel and
mining companies.
- ArcelorMittal received a ‘B’ grade in CDP Climate for 2018, up
from ‘C’ in 2017, and regards this improvement as the result of its
first disclosures in line with the recommendations of the Task
Force on Climate-related Financial Disclosures ("TCFD").
- ArcelorMittal was included for the first time in the 2019
Bloomberg Gender Equality index, which distinguishes companies
committed to transparency in gender reporting and advancing women’s
equality in the workplace.
Analysis of results for the twelve
months ended December 31, 2018 versus results for the twelve months
ended December 31, 2017
Total steel shipments for 12M 2018 were 83.9 million metric
tonnes representing a decrease of 1.6% as compared to 12M 2017,
primarily due to lower steel shipments in ACIS (-10.3%, including
unplanned maintenance in Ukraine and operational issues in
Kazakhstan/Ukraine) offset in part by improvement in Brazil (+5.8%,
including the impact of the Votorantim acquisition), NAFTA (+1.0%)
and Europe (+0.2%, including the impact from the Ilva acquisition
offset by impact of a flood in Asturias (Spain), power outage in
Fos (France) and slower ramp-up after blast furnace reline in
Poland).
Total steel shipments for 12M 2018 excluding the impact of
Votorantim acquisition (in 2Q 2018) and Ilva acquisition (in 4Q
2018) were 82.5 million metric tonnes representing a decrease of
3.0% as compared to 12M 2017, driven by lower steel shipments in
ACIS (-10.3%) and Europe (-1.2%), offset in part by improvement in
Brazil (+0.5%) and NAFTA (+1.0%).
Sales for 12M 2018 increased by 10.7% to $76.0 billion as
compared with $68.7 billion for 12M 2017, primarily due to higher
average steel selling prices (+13.5%) offset in part by lower steel
shipments (-1.6%).
Depreciation of $2.8 billion for 12M 2018, stable as compared
with 12M 2017 (marginally below 12M 2018 guidance of $2.9
billion).
Impairment charges net of purchase gains14 for 12M 2018 were
$810 million and include $0.7 billion primarily related to Ilva
and the remedy asset sales for the Ilva acquisition and the
agreed remedy package required for the approval of the Votorantim
acquisition3. Impairment charges for 12M 2017 were $206 million in
South Africa.
Exceptional items for 12M 2018 were charges of $117 million
primarily consisting of $113 million in charges related to a blast
furnace dismantling in Florange (France), $60 million in charges
related to the new collective labour agreement in the US (including
a signing bonus), a $146 million provision taken in 1Q 2018 in
respect of a litigation case that was paid in 3Q 20184 offset in
part by PIS/Cofins tax credits13 related to prior periods
recognized in Brazil of $202 million. Exceptional charges for 12M
2017 were nil.
Operating income for 12M 2018 was higher at $6.5 billion as
compared to $5.4 billion in 12M 2017 primarily driven by improved
operating conditions (positive price-cost effect in the steel
segments) offset in part by the impact of lower market priced iron
ore prices. Operating results for 12M 2018 and 12M 2017 were
impacted by impairment charges net of purchase gains and
exceptional items as discussed
above.
Income from associates, joint ventures and other investments for
12M 2018 were $652 million as compared to $448 million for 12M
2017. Income in 12M 2018 included dividend income from Erdemir of
$87 million as compared to $45 million in 12M 2017. Income in 12M
2017 included a gain from disposal of ArcelorMittal USA’s 21% stake
in the Empire Iron Mining Partnership5 ($133 million), offset in
part by a loss on dilution of the Company’s stake in China Oriental
($44 million)6 and the recycling of cumulative foreign exchange
translation losses incurred following the disposal of the 50% stake
in Kalagadi7 ($187 million).
Net interest expense was lower at $615 million for 12M 2018, as
compared to $823 million for 12M 2017, driven by debt repayment and
lower cost of debt. The Company expects full year 2019 net interest
expense of approximately $0.6 billion.
Foreign exchange and other net financing losses8 were $1.6
billion for 12M 2018 as compared to losses of $52 million for 12M
2017. 12M 2018 includes foreign exchange losses of $235 million (as
compared to foreign exchange gains of $546 million in 12M 2017) and
includes non-cash mark-to-market losses related to the mandatory
convertible bond call option totalling $0.5 billion (as compared to
gains of $0.8 billion in 12M 2017). These also include $0.1 billion
premium expense on the early redemption of bonds in 12M 2018 (as
compared to $0.4 billion in 12M 2017). In addition, 12M 2017
included mark-to-market losses on a derivative relating to a pellet
purchase agreement in the US of $0.3 billion12.
ArcelorMittal recorded an income tax benefit of $349 million for
the 12M 2018 as compared to income tax expense of $432 million for
12M 2017. The current income tax expense of $928 million for 12M
2018 as compared to $583 million for 12M 2017 is primarily driven
by improved results in a number of countries. The deferred tax
benefit of $1,277 million in 12M 2018 as compared with a deferred
tax benefit of $151 million for 12M 2017 includes $1.4 billion
deferred tax benefit recorded mainly in Luxembourg, due to the
expectation of higher future profits. For the 12M 2017 a deferred
tax asset of $0.3 billion was recorded in Luxembourg.
Non-controlling interests income were $181 million for 12M 2018
as compared to $7 million for 12M 2017. The difference is primarily
due to the improved operating performance of ArcelorMittal South
Africa. In addition, 12M 2017 was also impacted by impairment that
was proportionately allocated to minority shareholders of
ArcelorMittal South Africa.
ArcelorMittal’s net income for 12M 2018 was $5.1 billion, or
$5.07 basic earnings per share, as compared to a net income in 12M
2017 of $4.6 billion, or $4.48 basic earnings per share.
Analysis of results for 4Q 2018 versus
3Q 2018 and 4Q 2017
Total steel shipments in 4Q 2018 were 1.5% lower at 20.2Mt as
compared with 20.5Mt for 3Q 2018 primarily due to lower steel
shipments in ACIS (-10.6%, impacted by operational issues in
Temirtau, Kazakhstan), NAFTA (-6.2%) and Brazil (-1.4%), offset in
part by a 4.0% improvement in Europe (due to the Ilva acquisition
following its consolidation on November 1, 2018). Excluding the
impacts of Ilva, steel shipments were 4.2% lower as compared to 3Q
2018.
Total steel shipments in 4Q 2018 were 3.6% lower as compared
with 21.0Mt for 4Q 2017 primarily due to lower steel shipments in
ACIS (-18.0%, impacted by operational issues in Temirtau,
Kazakhstan) and Europe (down -0.5% impacted by slower demand in
automotive and a weak export market, compensated in part by
consolidation of Ilva), offset in part by higher shipments in NAFTA
(+0.4%).
Sales in 4Q 2018 were $18.3 billion as compared to $18.5 billion
for 3Q 2018 and $17.7 billion for 4Q 2017. Sales in 4Q 2018 were
1.0% lower as compared to 3Q 2018 primarily due to lower steel
shipments (-1.5%), lower average steel selling prices (-1.4%),
offset in part by higher market-priced iron ore shipments (+16.8%).
Sales in 4Q 2018 were 3.5% higher as compared to 4Q 2017 primarily
due to higher average steel selling prices (+8.2%) and higher
market-priced iron ore shipments (+18.2%), offset in part by lower
steel shipments (-3.6%).
Depreciation for 4Q 2018 was higher at $723 million as compared
to $653 million for 3Q 2018 (primarily due to the Ilva acquisition)
and lower than $747 million in 4Q 2017.
Impairment charges net of purchase gains for 4Q 2018 and 3Q 2018
were $215 million and $509 million, respectively, and primarily
relate to Ilva and the remedy asset sales for the Ilva acquisition.
Impairment charges for 4Q 2017 of $160 million related to
ArcelorMittal South Africa.
Exceptional net gains for 4Q 2018 were $29 million primarily
related to $202 million for PIS/Cofins tax credits related to prior
periods recognized in Brazil, offset in part by $113 million in
charges related to a blast furnace dismantling in Florange
(France), and $60 million related to the new collective labour
agreement in the US (including a signing bonus). Exceptional items
for 3Q 2018 and 4Q 2017 were nil.
Operating income for 4Q 2018 was $1.0 billion as compared to
$1.6 billion in 3Q 2018 and $1.2 billion in 4Q 2017. Operating
results for 4Q 2018, 3Q 2018 and 4Q 2017 were impacted by
impairment charges net of purchase gains and exceptional charges as
discussed above.
Income from associates, joint ventures and other investments for
4Q 2018 was $227 million as compared to $183 million for 3Q 2018
and $125 million for 4Q 2017. 4Q 2018 was positively impacted by
$0.1 billion in currency translation gains following the disposal
of ArcelorMittal’s investment in MacSteel (South Africa), offset in
part by reduced results from our Chinese investee.
Net interest expense in 4Q 2018 was $140 million as compared to
$152 million in 3Q 2018 and lower than $188 million in 4Q 2017,
primarily due to debt repayments and lower cost of debt.
Foreign exchange and other net financing losses in 4Q 2018 were
$556 million as compared to $475 million for 3Q 2018 and $261
million in 4Q 2017. Foreign exchange loss for 4Q 2018 was $7
million as compared to a gain of $9 million in 3Q 2018 and a gain
of $83 million in 4Q 20178. 4Q 2018 includes non-cash
mark-to-market losses of $443 million related to the mandatory
convertible bonds call option as compared to losses of $114 million
in 3Q 2018 and non-cash mark-to-market gains of $174 million in 4Q
2017. 3Q 2018 also included premium expenses on the early
redemption of bonds of $0.1 billion. In addition, 4Q 2017 included
mark-to-market losses on a derivative relating to a pellet purchase
agreement in the US of $0.3 billion.
ArcelorMittal recorded an income tax benefit of $711 million for
4Q 2018 as compared to an income tax expense of $178 million for 3Q
2018 and an income tax benefit of $119 million in 4Q 2017. The
income tax benefit for 4Q 2018 includes a $0.8 billion deferred tax
benefit recorded mainly in Luxembourg resulting from the
expectation of higher future profits.
Non-controlling interests income was $91 million for 4Q 2018 as
compared to $46 million for 3Q 2018. Non-controlling interests
income increased in 4Q 2018 primarily in ArcelorMittal South Africa
where the result was positively impacted by a currency translation
gain from the disposal of MacSteel as discussed above.
ArcelorMittal recorded a net income for 4Q 2018 of $1.2 billion,
or $1.18 basic earnings per share, as compared to a net income for
3Q 2018 of $0.9 billion, or $0.89 basic earnings per share, and a
net income for 4Q 2017 of $1.0 billion, or $1.02 basic earnings per
share.
Analysis of segment operations
NAFTA
(USDm)
unless otherwise shown |
4Q 18 |
3Q 18 |
4Q 17 |
12M 18 |
12M 17 |
Sales |
4,857 |
|
5,367 |
|
4,296 |
|
20,332 |
|
17,997 |
|
Operating income |
310 |
|
612 |
|
155 |
|
1,889 |
|
1,185 |
|
Depreciation |
(127 |
) |
(132 |
) |
(137 |
) |
(522 |
) |
(518 |
) |
Exceptional charges |
(60 |
) |
— |
|
— |
|
(60 |
) |
— |
|
EBITDA |
497 |
|
744 |
|
292 |
|
2,471 |
|
1,703 |
|
Crude steel production (kt) |
5,026 |
|
5,723 |
|
5,598 |
|
22,559 |
|
23,480 |
|
Steel shipments (kt) |
5,173 |
|
5,512 |
|
5,150 |
|
22,047 |
|
21,834 |
|
Average steel selling price (US$/t) |
882 |
|
896 |
|
748 |
|
852 |
|
742 |
|
NAFTA segment crude steel production decreased by 12.2% to 5.0Mt
in 4Q 2018 as compared to 5.7Mt in 3Q 2018 primarily due to market
slowdown and blast furnace reline delay in Mexico.
Steel shipments in 4Q 2018 decreased by 6.2% to 5.2Mt as
compared to 5.5Mt in 3Q 2018, primarily due to seasonality and weak
market conditions in the US.
Sales in 4Q 2018 decreased by 9.5% to $4.9 billion as compared
to $5.4 billion in 3Q 2018, primarily due to lower steel shipments
(-6.2%) and lower average steel selling prices -1.5% (flat products
down -0.7% and long products down -4.0%).
Exceptional charges for 4Q 2018 were $60 million related to the
new collective labour agreement in the US (which included a signing
bonus).
Operating income in 4Q 2018 of $310 million was lower as
compared to $612 million in 3Q 2018 and higher as compared to $155
million in 4Q 2017. Operating results for 4Q 2018 were impacted by
the exceptional charges as discussed above.
EBITDA in 4Q 2018 decreased by 33.2% to $497 million as compared
to $744 million in 3Q 2018 primarily due to lower steel shipment
volumes and negative price-cost effect. EBITDA in 4Q 2018 increased
by 70.0% as compared to $292 million in 4Q 2017 primarily due to a
significant positive price-cost impact.
Brazil
(USDm)
unless otherwise shown |
4Q 18 |
3Q 18 |
4Q 17 |
12M 18 |
12M 17 |
Sales |
2,429 |
|
2,103 |
|
2,252 |
|
8,711 |
|
7,755 |
|
Operating income |
398 |
|
374 |
|
266 |
|
1,356 |
|
697 |
|
Depreciation |
(84 |
) |
(71 |
) |
(75 |
) |
(298 |
) |
(293 |
) |
Impairment |
— |
|
— |
|
— |
|
(86 |
) |
— |
|
Exceptional income |
202 |
|
— |
|
— |
|
202 |
|
— |
|
EBITDA |
280 |
|
445 |
|
341 |
|
1,538 |
|
990 |
|
Crude steel production (kt) |
3,191 |
|
3,158 |
|
2,989 |
|
12,264 |
|
11,210 |
|
Steel shipments (kt) |
3,053 |
|
3,097 |
|
3,052 |
|
11,464 |
|
10,840 |
|
Average steel selling price (US$/t) |
687 |
|
714 |
|
685 |
|
719 |
|
667 |
|
Brazil segment crude steel production increased by 1.0% to 3.2Mt
in 4Q 2018 as compared to 3Q 2018.
Steel shipments in 4Q 2018 decreased by 1.4% to 3.1Mt as
compared to 3Q 2018, driven by seasonally weak domestic demand.
Sales in 4Q 2018 increased by 15.5% to $2.4 billion as compared
to $2.1 billion in 3Q 2018, due to the negative impact of
hyperinflation accounting in Argentina in 3Q 2018 (recorded as a
nine-month year-to-date accumulated impact), offset in part by
lower average steel selling prices (-3.7%) and lower steel
shipments (-1.4%).
Exceptional gain for 4Q 2018 was $202 million related to
PIS/Cofins tax credits related to prior periods recognized in
Brazil.
Operating income in 4Q 2018 was slightly higher at $398 million
as compared to $374 million in 3Q 2018 and higher than $266 million
in 4Q 2017. Operating results for 4Q 2018 were impacted by the
exceptional gain as discussed above.
EBITDA in 4Q 2018 decreased by 37.2% to $280 million as compared
to $445 million in 3Q 2018 primarily due to a negative price-cost
effect. 4Q 2018 includes a one-time provision of $17 million for
employee related charges in Brazil. EBITDA in 4Q 2018 was 17.9%
lower as compared to $341 million in 4Q 2017 primarily due to
foreign exchange translation impact and hyperinflation in
Argentina.
Europe
(USDm)
unless otherwise shown |
4Q 18 |
3Q 18 |
4Q 17 |
12M 18 |
12M 17 |
Sales |
9,761 |
|
9,559 |
|
9,610 |
|
40,488 |
|
36,208 |
|
Operating income |
98 |
|
100 |
|
525 |
|
1,632 |
|
2,359 |
|
Depreciation |
(323 |
) |
(262 |
) |
(336 |
) |
(1,195 |
) |
(1,201 |
) |
Impairment charges net of purchase gains |
(215 |
) |
(509 |
) |
— |
|
(724 |
) |
— |
|
Exceptional charges |
(113 |
) |
— |
|
— |
|
(259 |
) |
— |
|
EBITDA |
749 |
|
871 |
|
861 |
|
3,810 |
|
3,560 |
|
Crude steel production (kt) |
11,580 |
|
10,841 |
|
10,311 |
|
44,693 |
|
43,768 |
|
Steel shipments (kt) |
10,098 |
|
9,709 |
|
10,151 |
|
41,020 |
|
40,941 |
|
Average steel selling price (US$/t) |
771 |
|
776 |
|
736 |
|
787 |
|
702 |
|
Europe segment crude steel production increased by 6.8% to
11.6Mt in 4Q 2018 as compared to 10.8Mt in 3Q 2018 due primarily to
the consolidation of Ilva, as from November 1, 2018.
Steel shipments in 4Q 2018 increased by 4.0% to 10.1Mt as
compared to 9.7Mt in 3Q 2018, primarily on account of the
consolidation of Ilva offset in part by weak market conditions,
particularly in long products. Steel shipments declined by 1.7%
excluding the impact of Ilva on account of a weaker long products
export market.
Sales in 4Q 2018 were $9.8 billion, 2.1% higher as compared to
$9.6 billion in 3Q 2018, with higher steel shipments, as discussed
above, offset in part by 0.6% lower average steel selling
prices.
Impairment charges net of purchase gains for 4Q 2018 and 3Q 2018
were $215 million and $509 million, respectively, primarily related
to Ilva and the remedy asset sales for the Ilva acquisition.
Impairment charges net of purchase gains for 4Q 2017 were nil.
Exceptional charges for 4Q 2018 were $113 million related to a
blast furnace dismantling in Florange (France).
Operating income in 4Q 2018 was stable at $98 million as
compared to $100 million in 3Q 2018 and lower as compared to $525
million in 4Q 2017. Operating results for 4Q 2018 and 3Q 2018 were
impacted by impairments charges net of purchase gains and
exceptional items as discussed above.
EBITDA in 4Q 2018 decreased by 14.0% to $749 million as compared
to $871 million in 3Q 2018 primarily due to negative price-cost
effect. EBITDA in 4Q 2018 decreased by 13.0% as compared to $861
million in 4Q 2017, primarily due to lower steel shipment
volumes.
ACIS
(USDm)
unless otherwise shown |
4Q 18 |
3Q 18 |
4Q 17 |
12M 18 |
12M 17 |
Sales |
1,763 |
|
1,989 |
|
2,039 |
|
7,961 |
|
7,621 |
|
Operating income |
121 |
|
371 |
|
182 |
|
1,094 |
|
508 |
|
Depreciation |
(77 |
) |
(76 |
) |
(81 |
) |
(311 |
) |
(313 |
) |
Impairment |
— |
|
— |
|
(160 |
) |
— |
|
(206 |
) |
EBITDA |
198 |
|
447 |
|
423 |
|
1,405 |
|
1,027 |
|
Crude steel production (kt) |
2,975 |
|
3,560 |
|
3,832 |
|
13,022 |
|
14,678 |
|
Steel shipments (kt) |
2,669 |
|
2,986 |
|
3,254 |
|
11,741 |
|
13,094 |
|
Average steel selling price (US$/t) |
561 |
|
597 |
|
546 |
|
598 |
|
515 |
|
ACIS segment crude steel production in 4Q 2018 decreased by
16.4% to 3.0Mt as compared to 3.6Mt in 3Q 2018 primarily due to an
explosion at a gas pipeline at Temirtau (Kazakhstan).
Steel shipments in 4Q 2018 decreased by 10.6% to 2.7Mt as
compared to 3.0Mt in 3Q 2018, primarily due to lower steel
shipments in Kazakhstan following the incident discussed above.
Sales in 4Q 2018 decreased by 11.3% to $1.8 billion as compared
to $2.0 billion in 3Q 2018 primarily due to lower average steel
selling prices (-6.0%) and lower steel shipments (-10.6%).
Operating income in 4Q 2018 was lower at $121 million as
compared to $371 million in 3Q 2018 and $182 million in 4Q
2017.
EBITDA in 4Q 2018 decreased by 55.7% to $198 million as compared
to $447 million in 3Q 2018 primarily due to a negative price-cost
effect and lower steel shipments. EBITDA in 4Q 2018 was lower as
compared to $423 million in 4Q 2017, primarily due to lower steel
shipments (-18.0%) and negative price-cost effect.
Mining
(USDm)
unless otherwise shown |
4Q 18 |
3Q 18 |
4Q 17 |
12M 18 |
12M 17 |
Sales |
1,114 |
|
1,008 |
|
959 |
|
4,211 |
|
4,033 |
|
Operating income |
241 |
|
179 |
|
159 |
|
860 |
|
991 |
|
Depreciation |
(102 |
) |
(102 |
) |
(108 |
) |
(418 |
) |
(416 |
) |
EBITDA |
343 |
|
281 |
|
267 |
|
1,278 |
|
1,407 |
|
|
|
|
|
|
|
Own iron ore production (a) (Mt) |
14.9 |
|
14.5 |
|
14.4 |
|
58.5 |
|
57.4 |
|
Iron ore shipped externally and internally at market price (b)
(Mt) |
10.0 |
|
8.5 |
|
8.4 |
|
37.6 |
|
35.7 |
|
Iron ore shipment - cost plus basis (Mt) |
5.7 |
|
5.6 |
|
5.8 |
|
20.6 |
|
22.2 |
|
Own coal production (a) (Mt) |
1.3 |
|
1.5 |
|
1.5 |
|
5.9 |
|
6.3 |
|
Coal shipped externally and internally at market price (b)
(Mt) |
0.7 |
|
0.7 |
|
0.6 |
|
2.5 |
|
2.8 |
|
Coal shipment - cost plus basis (Mt) |
0.7 |
|
0.9 |
|
0.9 |
|
3.3 |
|
3.5 |
|
(a) Own iron ore and coal production not including strategic
long-term contracts.(b) Iron ore and coal shipments of
market-priced based materials include the Company’s own mines and
share of production at other mines, and exclude supplies under
strategic long-term contracts.
Own iron ore production in 4Q 2018 increased by 3.4% to 14.9Mt
as compared to 14.5Mt in 3Q 2018, due to higher volumes in AMMC9,
Kazakhstan and Liberia (impacted by heavy rains in 3Q 2018) offset
by lower production in Mexico. Own iron ore production in 4Q 2018
increased by 3.5% as compared to 4Q 2017 primarily due to higher
production in Liberia and AMMC offset in part by lower production
in Mexico. Own iron ore production for 12M 2018 increased by 1.9%
as compared to 12M 2017 primarily due to Liberia (production of
4.6Mt in 12M 2018 which, although above the 12M 2017 level, was
slightly below the approximate 5Mt full year 12M 2018 guidance),
offset in part by lower production in AMMC (lower yield from a new
mix of ore bodies following a pit wall instability issue which
first occurred in 4Q 2017) and Mexico.
Market-priced iron ore shipments in 4Q 2018 increased by 16.8%
to 10.0Mt as compared to 8.5Mt in 3Q 2018, primarily driven by
higher market-priced iron ore shipments in Liberia (recovery
following handling/logistic constraints impacting 3Q 2018 volume
for the new Gangra product during the wet season) and AMMC.
Market-priced iron ore shipments in 4Q 2018 increased by 18.2% as
compared to 4Q 2017 driven by higher shipments in Liberia, AMMC and
Ukraine offset in part by lower shipments in Mexico. Market-priced
iron ore shipments for 12M 2018 grew in line with expectations at
5.5% as compared to 12M 2017.
Own coal production in 4Q 2018 decreased by 11.8% to 1.3Mt as
compared to 1.5Mt in 3Q 2018 primarily due to lower Kazakhstan
production. Own coal production in 4Q 2018 decreased by 11.2% as
compared to 4Q 2017 primarily due to lower production in
Kazakhstan.
Market-priced coal shipments in 4Q 2018 were stable at 0.7Mt as
compared to 3Q 2018. Market-priced coal shipments in 4Q 2018
increased by 21% as compared to 4Q 2017 primarily due to increased
shipments in Kazakhstan.
Operating income in 4Q 2018 increased to $241 million as
compared to $179 million in 3Q 2018 and $159 million in 4Q
2017.
EBITDA in 4Q 2018 increased by 22.0% to $343 million as compared
to $281 million in 3Q 2018, primarily due to the impact of higher
market-priced iron ore shipments (+16.8%) and higher seaborne iron
ore reference prices (+7%). EBITDA in 4Q 2018 was higher as
compared to $267 million in 4Q 2017, primarily due to the combined
effects of higher market-priced iron ore shipments (+18.2%), and
higher market-priced coal shipments (+21%) and higher seaborne iron
ore reference prices (+9.2%).
Liquidity and Capital Resources
For 4Q 2018 net cash provided by operating activities was $2,170
million as compared to $634 million in 3Q 2018 and $2,885 million
in 4Q 2017. The higher net cash provided by operating activities
during 4Q 2018 reflects in part a working capital release of $430
million (largely on account of lower steel shipment volumes and
prices in a weaker demand environment, partially offset by higher
inventory) as compared to a working capital investment of $1,713
million in 3Q 2018. The 12M 2018 working capital investment of $4.4
billion largely reflects the price effect of improved market
conditions experienced (which impacted working capital through
higher inventories and higher trade receivables) during 12M 2018.
The 12M 2017 working capital investment was $1.9 billion.
Net cash used in investing activities during 4Q 2018 was $1,926
million as compared to $601 million during 3Q 2018 and $931 million
in 4Q 2017. Capital expenditures increased to $1,156 million in 4Q
2018 as compared to $781 million in 3Q 2018 and $1,036 million in
4Q 2017. FY 2018 capital expenditure was $3.3 billion as compared
to $2.8 billion in FY 2017 (versus FY 2018 initial guidance of $3.8
billion). FY 2018 capex was lower than expected due to delayed
spending as well as lower spend at Ilva due to the acquisition only
being completed in November 2018. Capex in 2019 is expected to
increase to $4.3 billion reflecting carry over from underspend in
2018, the impact of Ilva and the continued projected high return
investments in Mexico and Brazil and other strategic projects
(largely cost optimization).
Cash used in other investing activities in 4Q 2018 of $770
million primarily includes $1.0 billion investment for the Uttam
Galva and KSS Petron debts (India), quarterly lease payment for
Ilva acquisition ($52 million) offset in part by MacSteel (South
Africa) disposal proceeds ($220 million). Cash provided by other
investing activities in 3Q 2018 of $180 million primarily includes
cash received from Enerfos JV and the second instalment of disposal
proceeds from ArcelorMittal USA’s 21% stake in the Empire Iron
Mining Partnership ($44 million). Cash provided by other investing
activities in 4Q 2017 of $105 million primarily included tangible
asset disposals and disposal proceeds of US long products
(Georgetown).
Net cash used in financing activities in 4Q 2018 was $411
million as compared to $597 million and $2,167 million in 3Q 2018
and 4Q 2017, respectively. In 4Q 2018, $406 million primarily
includes repayment of short term facilities. In 3Q 2018, $543
million primarily include payments relating to bond repurchases
pursuant to cash tender offers ($0.6 billion). Net cash used in
financing activities in 4Q 2017 includes $1.2 billion of bonds
repurchased in October pursuant to cash tender offers, $0.6 billion
(€540 million) repayment at maturity of the euro 4.625% Notes due
November 17, 2017, $644 million used to early redeem in December
the 6.125% Notes due June 1, 2018 and partial repayment of
borrowings offset in part by a $0.4 billion (€300 million)
Schuldschein loan in October and $0.6 billion (€500 million) euro
0.95% bond due January 17, 2023 issued in December.
During 4Q 2018, the Company paid dividends of $32 million
primarily to minority shareholders in Bekaert (Brazil). During 3Q
2018, the Company paid dividends of $37 million primarily to
minority shareholders in ArcelorMittal Mines Canada. During 4Q
2017, the Company paid dividends of $21 million primarily to
minority shareholders in Bekaert (Brazil).
As of December 31, 2018, the Company’s cash and cash equivalents
amounted to $2.4 billion as compared to $2.5 billion at September
30, 2018 and $2.8 billion at December 31, 2017.
Gross debt decreased to $12.6 billion as of December 31, 2018,
as compared to $13.0 billion at September 30, 2018 and $12.9
billion in December 31, 2017.
As of December 31, 2018, net debt declined to $10.2 billion as
compared to $10.5 billion as of September 30, 2018, largely due to
positive free cashflow of $1.0 billion (including working capital
release ($0.4 billion)), disposal proceeds from MacSteel sale ($0.2
billion) and foreign exchange gain ($0.1 billion), offset in part
by the investment for the Uttam Galva and KSS Petron debts ($1.0
billion). Net debt as of December 31, 2017 was $10.1 billion.
As of December 31, 2018, the Company had liquidity of $7.9
billion, consisting of cash and cash equivalents of $2.4 billion
and $5.5 billion of available credit lines10. The $5.5 billion
credit facility contains a financial covenant not to exceed 4.25x
Net debt / EBITDA (as defined in the facility). As of December 31,
2018, the average debt maturity was 4.0 years.
Action 2020 progress
The Company is approximately two-thirds of the way along the
Action 2020 journey, but made limited progress in 2018 on its
strategic Action 2020 plan due to operational disruptions.
We made $0.4 billion in cost and product mix improvements in
2018 including: South Africa savings with improved cost performance
driven by better mix following restart of coke oven battery and
higher PCI usage; further optimization savings through digital
transformation in Europe and saving in Ukraine at the coke oven
battery; and Brazil cost and mix improvements. This progress was
however limited by operational disruptions, which resulted in a
volume loss of $0.3 billion, effectively reversing the cumulative
volume gains achieved in 2017. This brings the cumulative savings
from the Action 2020 plan to $1.6 billion.
The Company remains focussed on achieving its 2020 targets.
Volume is a key component of Action 2020 (5Mt volume improvement)
and we expect to see more progress in this area in 2019 and beyond,
assuming market conditions remain favorable.
Key recent developments
- On February 7, 2019, ArcelorMittal announced a share buyback
program under the authorization given by the annual general meeting
of shareholders held on May 5, 2015 (the “Program”). The shares
acquired under this Program are intended to meet ArcelorMittal’s
obligations arising from employee share programs. ArcelorMittal
intends to repurchase for an aggregate maximum amount of 4 million
shares.
- On January 17, 2019, ArcelorMittal issued €750 million 2.250%
Notes due 2024. The Notes were issued under ArcelorMittal’s €10
billion wholesale Euro Medium Term Notes Programme. The proceeds
from the issuance will be used for general corporate purposes of
the ArcelorMittal group.
- On December 19, 2018, ArcelorMittal signed a $5,500,000,000
Revolving Credit Facility (the "Facility"), with a five-year
maturity plus two one-year extension options. The Facility will
replace the $5,500,000,000 revolving credit facility agreement
signed April 30, 2015 and amended December 21, 2016, and will be
used for the general corporate purposes of the ArcelorMittal group.
The Facility gives ArcelorMittal considerably improved terms over
the former facility, and extends the average maturity date by
approximately three years.
- On November 20, 2018, ArcelorMittal entered into a $7 billion
term facilities agreement with a group of lenders in connection
with the acquisition of ESIL. The agreement has a term of one year
(i.e., until November 20, 2019), subject to ArcelorMittal’s option
to extend the term by six months. The facility may be used for
certain payments by ArcelorMittal as well as by the joint venture
through which the Company expects jointly to own and operate ESIL
in partnership with Nippon Steel & Sumitomo Metal Corporation
(“NSSMC”) (the “Joint Venture”).
- On October 12, 2018 and November 2, 2018, ArcelorMittal
received two binding offers from Liberty House Group for the
acquisition of the Ilva remedy assets consisting of ArcelorMittal
Ostrava (Czech Republic), ArcelorMittal Galati (Romania),
ArcelorMittal Skopje (Macedonia), ArcelorMittal Piombino (Italy),
ArcelorMittal Dudelange (Luxembourg) and several finishing lines at
ArcelorMittal Liège (Belgium). On January 23, 2019, the Company
submitted to the European Commission a revised offer from Liberty
House Group in respect of the same package of assets. Transaction
closing is conditional on European Commission approval and the
conclusion of consultations with local and European Works
Councils.
Financial calendar for 2019
- General Meeting of Shareholders:
- May 7, 2019: ArcelorMittal General Annual Meeting
- Earnings results announcements:
- May 9, 2019: earnings release 1Q 2019
- August 1, 2019: earnings release 2Q 2019 and half year
2019
- November 7, 2019: earnings release 3Q 2019
Outlook and guidance
The following global apparent steel consumption (“ASC”) figures
reflect the latest Company’s estimates.
Based on the current economic outlook, ArcelorMittal expects a
slight expansion in global ASC in 2019 by +0.5% to +1% (versus
growth of +2.8% in 2018). By region: ASC in US is expected to grow
+0.5% to +1.5% in 2019, with automotive demand to remain broadly
stable, growth is driven by continued albeit weaker demand in
machinery and construction (a moderation of growth versus +1.7% in
2018). In Europe, continued strength in construction is balanced by
stable automotive demand and slower growth in machinery and is
expected to support ASC growth of approximately +0.5% to +1.0% in
2019 (a moderation of growth versus +2.9% in 2018). In Brazil,
ASC growth in 2019 is forecasted in the range of +3.5% to +4.5% (a
moderation of growth versus +7.3% in 2018) as growth in automotive
and machinery slows but construction activity grows for the first
time since 2013. In the CIS, ASC is expected to grow +1.0% to +2.0%
in 2019 (versus +1.8% in 2018). Overall, World ex-China ASC is
expected to grow by approximately +2.0% to +3.0% in 2019, slight
stronger than in 2018 due to stabilization in Turkey after a
significant decline in 2018 (versus +2.1% in 2018). In China,
overall demand is expected to decline by between -0.5% to -1.5% in
2019 (versus growth of +3.5% in 2018) as relatively stable demand
from automotive and construction is offset by declining machinery
output. Given these demand expectations, as well as the expectation
that operational disruptions (both controllable and uncontrollable)
that negatively impacted 2018 shipments will not recur, the Group's
steel shipments are expected to increase in 2019 vs 2018.
Market-priced iron ore shipments for FY 2019 are expected to be
broadly stable as compared to FY 2018 with increases in Liberia and
AMMC to be offset by lower volume in Mexico (in part due to the end
of life of Volcan mine).
The Company expects certain cash needs of the business
(including capex, interest, cash taxes, pensions and certain other
cash costs but excluding working capital changes) to increase in
2019 to approximately $6.4 billion from $5.0 billion in 2018. Capex
is expected to increase by $1.0 billion to $4.3 billion (versus
$3.3 billion in FY 2018) including $0.4 billion carried over from
2018, the impact of Ilva ($0.4 billion) and the continued
investment in high returns projects in Mexico and Brazil. Interest
is expected to be stable at $0.6 billion while cash taxes, pensions
and other cash costs are expected to increase by $0.4 billion to
$1.5 billion primarily on account of certain cash tax settlements
deferred from 2018 and non-recurrence of certain gains on other
accounts.
Due to a smaller than anticipated release in the final quarter,
the Group invested more in working capital than expected in 2018
($4.4 billion versus guidance of $3.0-3.5 billion). The Group
expects this additional investment to be released over the course
of 2019. The extent of any further changes in working capital in
2019 will be dictated by market conditions, particularly the price
and volume environment in the final weeks.
ArcelorMittal Condensed Consolidated Statement of
Financial Position1
In millions of U.S. dollars |
Dec 31,2018 |
Sept 30,2018 |
Dec 31,2017 |
ASSETS |
|
|
|
Cash and cash equivalents |
2,354 |
|
2,482 |
|
2,786 |
Trade accounts receivable and other |
4,432 |
|
4,561 |
|
3,863 |
Inventories |
20,744 |
|
18,380 |
|
17,986 |
Prepaid expenses and other current assets |
2,834 |
|
2,799 |
|
1,931 |
Assets held for sale11 |
2,111 |
|
2,587 |
|
179 |
Total Current Assets |
32,475 |
|
30,809 |
|
26,745 |
|
|
|
|
Goodwill and intangible assets |
5,728 |
|
5,329 |
|
5,737 |
Property, plant and equipment |
35,638 |
|
34,027 |
|
36,971 |
Investments in associates and joint ventures |
4,906 |
|
4,863 |
|
5,084 |
Deferred tax assets |
8,287 |
|
7,487 |
|
7,055 |
Other assets |
4,215 |
|
3,288 |
|
3,705 |
Total Assets |
91,249 |
|
85,803 |
|
85,297 |
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Short-term debt and current portion of long-term debt |
3,167 |
|
4,662 |
|
2,785 |
Trade accounts payable and other |
13,981 |
|
11,797 |
|
13,428 |
Accrued expenses and other current liabilities |
5,486 |
|
4,864 |
|
5,147 |
Liabilities held for sale11 |
821 |
|
722 |
|
50 |
Total Current Liabilities |
23,455 |
|
22,045 |
|
21,410 |
|
|
|
|
Long-term debt, net of current portion |
9,316 |
|
8,280 |
|
10,143 |
Deferred tax liabilities |
2,374 |
|
2,483 |
|
2,684 |
Other long-term liabilities |
11,996 |
|
10,405 |
|
10,205 |
Total Liabilities |
47,141 |
|
43,213 |
|
44,442 |
|
|
|
|
Equity attributable to the equity holders of the parent |
42,086 |
|
40,590 |
|
38,789 |
Non-controlling interests |
2,022 |
|
2,000 |
|
2,066 |
Total Equity |
44,108 |
|
42,590 |
|
40,855 |
Total Liabilities and Shareholders’ Equity |
91,249 |
|
85,803 |
|
85,297 |
ArcelorMittal Condensed Consolidated Statement of
Operations1
|
Three months ended |
Twelve months ended |
In millions of U.S. dollars unless otherwise
shown |
Dec 31,2018 |
Sep 30,2018 |
Dec 31,2017 |
Dec 31,2018 |
Dec 31, 2017 |
Sales |
18,327 |
|
18,522 |
|
17,710 |
|
76,033 |
|
68,679 |
|
Depreciation (B) |
(723 |
) |
(653 |
) |
(747 |
) |
(2,799 |
) |
(2,768 |
) |
Impairment charges net of purchase gains (B) |
(215 |
) |
(509 |
) |
(160 |
) |
(810 |
) |
(206 |
) |
Exceptional items (B) |
29 |
|
— |
|
— |
|
(117 |
) |
— |
|
Operating income (A) |
1,042 |
|
1,567 |
|
1,234 |
|
6,539 |
|
5,434 |
|
Operating margin % |
5.7 |
% |
8.5 |
% |
7.0 |
% |
8.6 |
% |
7.9 |
% |
|
|
|
|
|
|
Income from associates, joint ventures and other investments |
227 |
|
183 |
|
125 |
|
652 |
|
448 |
|
Net interest expense |
(140 |
) |
(152 |
) |
(188 |
) |
(615 |
) |
(823 |
) |
Foreign exchange and other net financing loss |
(556 |
) |
(475 |
) |
(261 |
) |
(1,595 |
) |
(52 |
) |
Income before taxes and non-controlling
interests |
573 |
|
1,123 |
|
910 |
|
4,981 |
|
5,007 |
|
Current tax expense |
(198 |
) |
(206 |
) |
(134 |
) |
(928 |
) |
(583 |
) |
Deferred tax benefit |
909 |
|
28 |
|
253 |
|
1,277 |
|
151 |
|
Income tax (expense) / benefit |
711 |
|
(178 |
) |
119 |
|
349 |
|
(432 |
) |
Income including non-controlling interests |
1,284 |
|
945 |
|
1,029 |
|
5,330 |
|
4,575 |
|
Non-controlling interests (income) / loss |
(91 |
) |
(46 |
) |
10 |
|
(181 |
) |
(7 |
) |
Net income attributable to equity holders of the
parent |
1,193 |
|
899 |
|
1,039 |
|
5,149 |
|
4,568 |
|
|
|
|
|
|
|
Basic earnings per common share ($)2 |
1.18 |
|
0.89 |
|
1.02 |
|
5.07 |
|
4.48 |
|
Diluted earnings per common share ($)2 |
1.17 |
|
0.88 |
|
1.01 |
|
5.04 |
|
4.46 |
|
|
|
|
|
|
|
Weighted average common shares outstanding (in millions)2 |
1,014 |
|
1,014 |
|
1,020 |
|
1,015 |
|
1,020 |
|
Diluted weighted average common shares outstanding (in
millions)2 |
1,020 |
|
1,019 |
|
1,024 |
|
1,021 |
|
1,024 |
|
|
|
|
|
|
|
OTHER INFORMATION |
|
|
|
|
|
EBITDA (C = A-B) |
1,951 |
|
2,729 |
|
2,141 |
|
10,265 |
|
8,408 |
|
EBITDA Margin % |
10.6 |
% |
14.7 |
% |
12.1 |
% |
13.5 |
% |
12.2 |
% |
|
|
|
|
|
|
Own iron ore production (Mt) |
14.9 |
14.5 |
14.4 |
58.5 |
57.4 |
Crude steel production (Mt) |
22.8 |
23.3 |
22.7 |
92.5 |
93.1 |
Steel shipments (Mt) |
20.2 |
20.5 |
21.0 |
83.9 |
85.2 |
ArcelorMittal Condensed Consolidated Statement of Cash
flows1
|
Three months ended |
Twelve months ended |
In millions of U.S. dollars |
Dec 31,2018 |
Sep 30,2018 |
Dec 31,2017 |
Dec 31,2018 |
Dec 31,2017 |
Operating activities: |
|
|
|
|
|
Income attributable to equity holders of the parent |
1,193 |
|
899 |
|
1,039 |
|
5,149 |
|
4,568 |
|
Adjustments to reconcile net income to net cash provided by
operations: |
|
|
|
|
|
Non-controlling interests income/ (loss) |
91 |
|
46 |
|
(10 |
) |
181 |
|
7 |
|
Depreciation and impairment charges net of purchase gains |
938 |
|
1,162 |
|
907 |
|
3,609 |
|
2,974 |
|
Exceptional items4 |
(29 |
) |
— |
|
— |
|
117 |
|
— |
|
Income from associates, joint ventures and other investments |
(227 |
) |
(183 |
) |
(125 |
) |
(652 |
) |
(448 |
) |
Deferred tax (benefit) |
(909 |
) |
(28 |
) |
(253 |
) |
(1,277 |
) |
(151 |
) |
Change in working capital |
430 |
|
(1,713 |
) |
1,657 |
|
(4,384 |
) |
(1,873 |
) |
Other operating activities (net) |
683 |
|
451 |
|
(330 |
) |
1,453 |
|
(514 |
) |
Net cash provided by operating activities (A) |
2,170 |
|
634 |
|
2,885 |
|
4,196 |
|
4,563 |
|
Investing activities: |
|
|
|
|
|
Purchase of property, plant and equipment and intangibles (B) |
(1,156 |
) |
(781 |
) |
(1,036 |
) |
(3,305 |
) |
(2,819 |
) |
Other investing activities (net) |
(770 |
) |
180 |
|
105 |
|
(454 |
) |
(11 |
) |
Net cash used in investing activities |
(1,926 |
) |
(601 |
) |
(931 |
) |
(3,759 |
) |
(2,830 |
) |
Financing activities: |
|
|
|
|
|
Net payments relating to payable to banks and long-term debt |
(406 |
) |
(543 |
) |
(2,131 |
) |
(212 |
) |
(1,527 |
) |
Dividends paid |
(32 |
) |
(37 |
) |
(21 |
) |
(220 |
) |
(141 |
) |
Share buyback |
— |
|
— |
|
— |
|
(226 |
) |
— |
|
Other financing activities (net) |
27 |
|
(17 |
) |
(15 |
) |
(31 |
) |
(63 |
) |
Net cash used in financing activities |
(411 |
) |
(597 |
) |
(2,167 |
) |
(689 |
) |
(1,731 |
) |
Net (decrease) / increase in cash and cash equivalents |
(167 |
) |
(564 |
) |
(213 |
) |
(252 |
) |
2 |
|
Cash and cash equivalents transferred from/(to) assets held for
sale |
13 |
|
— |
|
— |
|
(10 |
) |
13 |
|
Effect of exchange rate changes on cash |
3 |
|
(56 |
) |
16 |
|
(140 |
) |
58 |
|
Change in cash and cash equivalents |
(151 |
) |
(620 |
) |
(197 |
) |
(402 |
) |
73 |
|
|
|
|
|
|
|
Free cash flow (C=A+B) |
1,014 |
|
(147 |
) |
1,849 |
|
891 |
|
1,744 |
|
Appendix 1: Product shipments by region
(000'kt) |
4Q 18 |
3Q 18 |
4Q 17 |
12M 18 |
12M 17 |
Flat |
4,406 |
|
4,885 |
|
4,414 |
|
19,113 |
|
18,926 |
|
Long |
890 |
|
774 |
|
872 |
|
3,554 |
|
3,530 |
|
NAFTA |
5,173 |
|
5,512 |
|
5,150 |
|
22,047 |
|
21,834 |
|
Flat |
1,832 |
|
1,695 |
|
1,950 |
|
6,421 |
|
6,762 |
|
Long |
1,232 |
|
1,415 |
|
1,108 |
|
5,087 |
|
4,100 |
|
Brazil |
3,053 |
|
3,097 |
|
3,052 |
|
11,464 |
|
10,840 |
|
Flat |
7,398 |
|
6,855 |
|
7,298 |
|
29,510 |
|
29,255 |
|
Long |
2,666 |
|
2,798 |
|
2,821 |
|
11,367 |
|
11,494 |
|
Europe |
10,098 |
|
9,709 |
|
10,151 |
|
41,020 |
|
40,941 |
|
CIS |
1,645 |
|
1,879 |
|
2,209 |
|
7,251 |
|
8,837 |
|
Africa |
1,023 |
|
1,102 |
|
1,044 |
|
4,491 |
|
4,256 |
|
ACIS |
2,669 |
|
2,986 |
|
3,254 |
|
11,741 |
|
13,094 |
|
Note: “Others and eliminations” are not presented in the
table
Appendix 2a: Capital expenditures
(USDm) |
4Q 18 |
3Q 18 |
4Q 17 |
12M 18 |
12M 17 |
NAFTA |
244 |
|
155 |
|
184 |
|
669 |
|
466 |
|
Brazil |
102 |
|
59 |
|
72 |
|
244 |
|
263 |
|
Europe |
499 |
|
298 |
|
430 |
|
1,336 |
|
1,143 |
|
ACIS |
159 |
|
141 |
|
165 |
|
534 |
|
427 |
|
Mining |
143 |
|
116 |
|
179 |
|
485 |
|
495 |
|
Total |
1,156 |
|
781 |
|
1,036 |
|
3,305 |
|
2,819 |
|
Note: “Others and eliminations” 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 capital
expenditures.
Completed projects in most recent
quarter
Segment |
Site / unit |
Project |
Capacity / details |
Actual completion |
NAFTA |
Indiana Harbor (US) |
Indiana Harbor “footprint optimization project” |
Restoration of 80” HSM and upgrades at Indiana Harbor
finishing |
4Q 2018 (a) |
Europe |
ArcelorMittal
Differdange (Luxembourg) |
Modernisation of
finishing of “Grey rolling mill" |
Revamp
finishing to achieve full capacity of Grey mill at 850kt/y |
2Q 2018 |
Europe |
Gent & Liège (Europe Flat Automotive UHSS Program) |
Gent: Upgrade HSM and new furnace Liège: Annealing line
transformation |
Increase ~400kt in Ultra High Strength Steel capabilities |
2Q 2018 |
Ongoing projects
Segment |
Site / unit |
Project |
Capacity / details |
Forecasted completion |
ACIS |
ArcelorMittal
Kryvyi Rih (Ukraine) |
New LF&CC
2&3 |
Facilities
upgrade to switch from ingot to continuous caster route. Additional
billets of 290kt over ingot route through yield increase |
2019 |
Europe |
Sosnowiec (Poland) |
Modernization of Wire Rod Mill |
Upgrade rolling technology improving the mix of HAV products and
increase volume by 90kt |
2019 |
NAFTA |
Mexico |
New Hot strip mill |
Production capacity of 2.5Mt/year |
2020(b) |
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 |
2020(c) |
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 |
2021(d) |
Brazil |
Juiz de Fora |
Melt shop expansion |
Increase in meltshop capacity by 0.2Mt/year |
On hold(e) |
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 |
Mining |
Liberia |
Phase 2 expansion project |
Increase production capacity to 15Mt/year |
Under review(f) |
a) In support of the Company’s Action 2020 program,
the footprint optimization project at ArcelorMittal Indiana Harbor
is now complete, which has resulted in structural changes required
to improve asset and cost optimization. The plan involved idling
redundant operations including the #1 aluminize line, 84” hot strip
mill (HSM), and #5 continuous galvanizing line (CGL) and No.2 steel
shop (idled in 2Q 2017) whilst making further planned investments
totalling ~$200 million including a new caster at No.3 steel shop
(completed in 4Q 2016), restoration of the 80” hot strip mill and
Indiana Harbor finishing. The full project scope was completed in
4Q 2018.
b) On September 28, 2017, ArcelorMittal announced a
major US$1 billion, three-year investment programme at its Mexican
operations, which is focussed on building ArcelorMittal Mexico’s
downstream capabilities, sustaining the competitiveness of its
mining operations and modernising its existing asset base. The
programme is designed to enable ArcelorMittal Mexico to meet the
anticipated increased demand requirements from domestic customers,
realise 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, in-line with the Company’s
Action 2020 plan. 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. 1.8 million tonnes 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 project commenced late 4Q 2017 and is expected to be completed
in the second quarter of 2020.
c) Investment in ArcelorMittal Dofasco (Canada) to
modernise the hot strip mill. The project is to install two new
state of the art coilers and runout tables to replace three end of
life coilers. The strip cooling system will be upgraded and include
innovative power cooling technology to improve product capability.
The project is expected to be completed in 2020.
d) In August 2018, ArcelorMittal announced the
resumption of the Vega Do Sul expansion to provide an additional
700kt of cold-rolled annealed and galvanised capacity to serve the
growing domestic market. The three-year ~$0.3 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.
e) Although the Monlevade wire rod expansion project
and Juiz de Fora rebar expansion were completed in 2015, the
Juiz de Fora melt shop project is currently on hold and is
expected to be completed upon Brazil domestic market recovery.
f) ArcelorMittal had previously announced a
Phase 2 project that envisaged the construction of 15 million
tonnes of concentrate sinter fines capacity and associated
infrastructure. The Phase 2 project was initially delayed due to
the declaration of force majeure by contractors in August 2014 due
to the Ebola virus outbreak in West Africa, and then reassessed
following rapid iron ore price declines over the ensuing period.
ArcelorMittal Liberia is now undertaking the engineering phase of a
feasibility study to identify the optimal concentration solution
for utilising the resources at Tokadeh. The feasibility study is
expected to be completed by mid-2019.
Appendix 3: Debt repayment schedule as of December 31,
2018
(USD billion) |
2019 |
2020 |
2021 |
2022 |
2023 |
>=2024 |
Total |
Bonds |
0.9 |
|
1.9 |
|
1.3 |
|
1.5 |
|
0.5 |
|
1.6 |
|
7.7 |
|
Commercial paper |
1.3 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
1.3 |
|
Other loans |
1.0 |
|
1.3 |
|
0.5 |
|
0.2 |
|
0.3 |
|
0.3 |
|
3.6 |
|
Total gross debt |
3.2 |
|
3.2 |
|
1.8 |
|
1.7 |
|
0.8 |
|
1.9 |
|
12.6 |
|
Appendix 4: Reconciliation of gross debt to net
debt
(USD million) |
Dec 31, 2018 |
Sept 30, 2018 |
Dec 31, 2017 |
Gross
debt (excluding that held as part of the liabilities held for
sale) |
12,483 |
|
12,942 |
|
12,928 |
|
Gross debt held as part of the liabilities held for sale |
77 |
|
79 |
|
— |
|
Gross debt |
12,560 |
|
13,021 |
|
12,928 |
|
Less: |
|
|
|
Cash and cash equivalents |
(2,354 |
) |
(2,482 |
) |
(2,786 |
) |
Cash and cash equivalents held as part of the assets held for
sale |
(10 |
) |
(23 |
) |
— |
|
Net debt (including that held as part of the assets and the
liabilities held for sale) |
10,196 |
|
10,516 |
|
10,142 |
|
|
|
|
|
Net debt / EBITDA |
1.0 |
|
- |
1.2 |
|
Appendix 5: 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:
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.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 income plus depreciation,
impairment expenses and exceptional income/
(charges).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) / gain: include foreign currency
exchange impact, bank fees, interest on pensions, impairments 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 (used in) operating activities less capex.Gross
debt: long-term debt, plus short-term debt (including that
held as part of the liabilities held for
sale).Liquidity: cash and cash equivalents 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 tonnesMarket-priced tonnes:
represent amounts of iron ore and coal 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, plus short-term debt less cash and cash equivalents
(including those held as part of assets and liabilities held for
sale).Net debt/EBITDA: refers to Net debt divided
by last twelve months EBITDA calculation.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 USA, Canada and
Mexico. The Brazil segment includes the Flat, Long and Tubular
operations of Brazil and its neighboring 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 includes iron ore and coal
operations.Own iron ore production: includes total
of all finished production of fines, concentrate, pellets and lumps
and includes share of production (excludes strategic long-term
contracts).PMI: refers to purchasing managers
index (based on ArcelorMittal estimates)Seaborne iron ore
reference prices: refers to iron ore prices for 62% Fe CFR
ChinaShipments: 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 Group
EBITDA 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.
Footnotes
- The financial information in this press release has been
prepared consistently with International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting
Standards Board (“IASB”) and as adopted by the European Union. The
interim financial information included in this announcement has
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 measures. ArcelorMittal presents EBITDA,
and EBITDA/tonne, which are non-GAAP financial measures and defined
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. 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 free cash flow
(FCF), which is a non-GAAP financial measure defined 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 months to show trends
that investors may find useful in understanding the company's
ability to service its debt. Non-GAAP financial 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 measures may not be comparable to similarly
titled measures applied by other companies.
- At the Extraordinary General Meeting held on May 10, 2017, the
shareholders approved a share consolidation based on a ratio 1:3,
whereby every three shares were consolidated into one share (with a
change in the number of shares outstanding and the accounting par
value per share).
- On April 20, 2018, following the approval by the Brazilian
antitrust authority - CADE of the combination of ArcelorMittal
Brasil’s and Votorantim’s long steel businesses in Brazil subject
to the fulfilment of divestment commitments, ArcelorMittal Brasil
agreed to dispose of its two production sites of Cariacica and
Itaúna, as well as some wire drawing equipment of ArcelorMittal
Brasil and ArcelorMittal Sul-Fluminense. The sale was completed
early May 2018 to the Mexican Group Simec S.A.B. de CV. A second
package of some wire drawing equipment of ArcelorMittal Brasil and
ArcelorMittal Sul-Fluminense were sold to the company Aço Verde do
Brasil as part of CADE's conditional approval.
- In July 2018, as a result of a settlement process, the Company
and the German Federal Cartel Office agreed to a €118 million ($146
million) fine to be paid by ArcelorMittal Commercial Long
Deutschland GmbH ending an investigation that began in the first
half of 2016 into antitrust violations concerning the ArcelorMittal
entities that were under investigation. The payment was made in
August 2018.
- On August 7, 2017, ArcelorMittal USA and Cliffs Natural
Resources (“Cliffs”) agreed that Cliffs would acquire ArcelorMittal
USA’s 21% ownership interest in the Empire Iron Mining Partnership
for $133 million plus assumptions of all partnership liabilities.
The payment of $133 million will be made in 3 equal installments
with the first payment of $44 million received in August 2017, the
second payment received in August 2018 and the final payment to be
received in 2019.
- On January 27, 2017 China Oriental completed a share placement
to restore the minimum 25% free float as per HKEx listing
requirements. Following the share placement, ArcelorMittal’s
interest in China Oriental decreased from 47% to 39%, as a result
of which ArcelorMittal recorded a net dilution loss of $44
million.
- On August 25, 2017, following a sales agreement signed on
October 21, 2016, ArcelorMittal completed the sale of its 50%
shareholding in Kalagadi Manganese (Proprietary) Limited to
Kgalagadi Alloys (Proprietary) Limited for consideration to be paid
during the life of the mine, which is contingent on the financial
performance of the mine and cash flow availability. The investment
classified as held for sale as of December 31, 2016 had a nil
carrying amount as it was fully impaired in 2015 but the Company
recycled upon disposal accumulated foreign exchange translation
losses of $187 million in income from associates, joint ventures
and other investments.
- Following the May 16, 2018 approval of the Extraordinary
General Meeting to convert the share capital of the ArcelorMittal
parent company from Euro to US dollar, the Euro denominated tax
losses and the related deferred tax asset (DTA) held by the
ArcelorMittal parent company were translated into US dollars. The
Company designated its euro denominated debt as a hedge of certain
euro denominated net investments in foreign operations. Following
this change, periodic revaluations of such external
euro-denominated debt are recorded in other comprehensive income
rather than the statement of operations. The conversion of the euro
denominated DTA was effective as of January 1, 2018, whilst
the impacts on euro denominated debt has been applied prospectively
from April 1, 2018. As a result, the Company’s statement of
operations no longer has foreign exchange exposure to euro
denominated debt and DTA.
- ArcelorMittal Mines Canada, otherwise known as ArcelorMittal
Mines and Infrastructure Canada.
- On December 19, 2018, ArcelorMittal signed a $5,500,000,000
Revolving Credit Facility, with a five-year maturity plus two
one-year extension options (i.e. the options to extend are in the
first and second years, so at end 2019 and at end 2020). The
facility will replace the $5,500,000,000 revolving credit facility
agreement signed April 30, 2015 and amended December 21, 2016, and
will be used for the general corporate purposes of the
ArcelorMittal group. The facility gives ArcelorMittal considerably
improved terms over the former facility, and extends the average
maturity date by approximately three years. As of December 31,
2018, the $5.5 billion revolving credit facility was fully
available.
- Assets and liabilities held for sale, as of December 31, 2018,
include the Ilva remedy package assets, and carrying value of the
USA long product facilities at Steelton (“Steelton”). Assets and
liabilities held for sale, as of September 30, 2018, include the
carrying value of Ilva remedy assets, Macsteel investment (South
Africa) and carrying value of Steelton. Asset and liabilities held
for sale, as of December 31, 2017, include the carrying value of
Steelton and Frydek Mistek assets in Czech Republic (which was sold
in 1Q 2018).
- Effective October 31, 2016, the Company entered into a pellet
purchase agreement in the US including a special payment component
that varies according to the price of steel in the US domestic
market. This feature corresponds to a derivative instrument
recognized at fair value. The charge relates to outstanding minimum
volumes to be purchased over the remaining life of the contract (8
years).
- The PIS (Program of Social Integration) and COFINS
(Contribution for the Financing of Social Security) are Brazilian
federal taxes based on the turnover of companies. The PIS is
intended to finance the unemployment insurance system, and COFINS
to fund Social Security. For over two decades, ArcelorMittal Brasil
has been challenging the basis of the calculation of the COFINS and
PIS, specifically, whether Brazilian ICMS (tax on sales and
services) may be deducted from the base amount on which PIS
and COFINS taxes are calculated. Following the Supreme Court’s
decision in the leading case and certain lower court decisions
applying it, the Court issued final and unappealable judgments in
certain of the cases filed by ArcelorMittal Brasil, thereby
granting ArcelorMittal Brasil the right to exclude ICMS from the
PIS/COFINS’ tax base and the right to recognize the relevant
credits from the past. Accordingly, ArcelorMittal Brasil recognized
$202 million additional PIS/COFINS credits in 4Q 2018 for the
period of 2005 to 2013 and is awaiting the Court’s final judgment
on other pending cases related to the PIS/COFINS topic.
- Impairment charges net of purchase gains for 4Q 2018 include
$0.4 billion impairment expenses for Ilva remedies and $0.2 billion
purchase gains on Ilva acquisition.
Fourth quarter 2018 earnings analyst conference
call
ArcelorMittal management (including CEO and CFO)
will host a conference call for members of the investment community
to discuss the fourth quarter period ended December 31, 2018 on:
Thursday February 7, 2019 at 9.30am US Eastern time; 2.30pm
London time and 3.30pm CET.
The
dial in numbers are: |
|
|
Location |
Toll free dial in numbers |
Local dial in numbers |
Participant |
UK local: |
0800 0515 931 |
+44 (0)203 364 5807 |
12722991# |
US local: |
1 86 6719 2729 |
+1 24 0645 0345 |
12722991# |
US (New York): |
1 86 6719 2729 |
+ 1 646 663 7901 |
12722991# |
France: |
0800 914780 |
+33 1 7071 2916 |
12722991# |
Germany: |
0800 965 6288 |
+49 692 7134 0801 |
12722991# |
Spain: |
90 099 4930 |
+34 911 143436 |
12722991# |
Luxembourg: |
800 26908 |
+352 27 86 05 07 |
12722991# |
A
replay of the conference call will be available for one week by
dialing: +49 (0) 1805 2047 088; Access code 2523083# |
Forward-Looking StatementsThis document may
contain forward-looking information and statements about
ArcelorMittal and its subsidiaries. These statements include
financial projections and estimates and their underlying
assumptions, statements regarding plans, objectives and
expectations with respect to future operations, products and
services, and statements regarding future performance.
Forward-looking statements may be identified by the words
“believe”, “expect”, “anticipate”, “target” or similar expressions.
Although ArcelorMittal’s management believes that the expectations
reflected in such forward-looking statements are reasonable,
investors and holders of ArcelorMittal’s securities are cautioned
that forward-looking information and statements are subject to
numerous risks and uncertainties, many of which are difficult to
predict and generally beyond the control of ArcelorMittal, that
could cause actual results and developments to differ materially
and adversely from those expressed in, or implied or projected by,
the forward-looking information and statements. These risks and
uncertainties include those discussed or identified in the filings
with the Luxembourg Stock Market Authority for the Financial
Markets (Commission de Surveillance du Secteur Financier) and the
United States Securities and Exchange Commission (the “SEC”) made
or to be made by ArcelorMittal, including ArcelorMittal’s latest
Annual Report on Form 20-F on file with the SEC. ArcelorMittal
undertakes no obligation to publicly update its forward-looking
statements, whether as a result of new information, future events,
or otherwise.
About ArcelorMittalArcelorMittal is the world's
leading steel and mining company, with a presence in 60 countries
and an industrial footprint in 18 countries. Guided by a philosophy
to produce safe, sustainable steel, we are the leading supplier of
quality steel in the major global steel markets including
automotive, construction, household appliances and packaging, with
world-class research and development and outstanding distribution
networks.
Through our core values of sustainability, quality and
leadership, we operate responsibly with respect to the health,
safety and wellbeing of our employees, contractors and the
communities in which we operate. For us, steel is the fabric of
life, as it is at the heart of the modern world from railways to
cars and washing machines. We are actively researching and
producing steel-based technologies and solutions that make many of
the products and components people use in their everyday lives more
energy efficient.
We are one of the world’s five largest producers of iron ore and
metallurgical coal. With a geographically diversified portfolio of
iron ore and coal 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 2018, ArcelorMittal
had revenues of $76.0 billion and crude steel production of 92.5
million metric tonnes, while own iron ore production reached 58.5
million metric tonnes.
ArcelorMittal is listed on the stock exchanges of New York (MT),
Amsterdam (MT), Paris (MT), Luxembourg (MT) and on the Spanish
stock exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS).
For more information about ArcelorMittal please visit:
http://corporate.arcelormittal.com/
EnquiriesArcelorMittal investor relations:
Europe: +44 207 543 1128; Americas: +1 312 899 3985; 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
- ArcelorMittal reports fourth quarter 2018 and full year 2018
results
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