ArcelorMittal SA Q4 FY2024 earnings call

• Safety: Completed dss+ group-wide safety audit, with recommendations focusing on risk management and establishing a safety-first culture. - Strategic Progress: Generated $2 billion of investable cash flow, with $1.9 billion structural EBITDA impact from strategic projects; $400M to be captured in 2025 and $600M in 2026. Projects like Vega coal mill in Brazil, Mexico hot strip mill, and India renewable project performing well. Acquisitions such as Pesin in Brazil, Texas HBI facility, and Vallourec stake are performing well. - Dividends and Buybacks: Dividend grew at 16% compound rate over 4 years, reduced share count by 37% in 4 years, returned $1.7 billion to shareholders in 2024. - Decarbonization: Absolute carbon emissions down ~50% since 2018. Invested in EAFs in Gijon and Sestao, and offer XCarb brand for low-carbon solutions.

EBITDA for 2024 was $7.1 billion, translating to $130 of EBITDA per ton shipped. Cash flow: over $2 billion of investable cash flow was generated in 2024, bringing the total to $21 billion since 2021. $1.3 billion was invested in high return strategic growth projects, $1.7 billion was returned to shareholders, and $0.6 billion was invested in M&A. Revenue contribution details weren't explicitly broken down by product segment in a way to list absolute terms and % contribution separately as no specific product segment revenues were detailed beyond general business performance.

• Forecasts slightly positive apparent demand growth. - Confident in generating positive cash flow this year and beyond. - Continued allocation of capital via established capital return policy.

• Uncertainty around potential trade tariffs, e.g., on Canada/Mexico, which could impact costs and revenues. - Project delays in certain regions like Mardyck (equipment and lack of experience), Serra Azul (mining difficulties), Barra Mansa (equipment and lack of experience). - FX volatility in markets like Brazil affecting cost and revenue dynamics. - Regulatory uncertainties in Europe regarding policy environment for decarbonization investments, which could impact decarbonization CapEx and competitiveness.

Q: With the plant non-green steel oriented plant in Calvert to commence end of 2027, does that mean anything for the second year at Calvert, either in terms of accelerating the time line or delaying the terms in terms of project complexity on sequencing, et cetera?

A: Aditya Mittal responded that they are commissioning the first EAF, building an electrical steel facility in Calvert, and will start on the second EAF. Focus remains on CapEx envelope between $4.5 billion to $5 billion.

Q: On CapEx, strategic growth projects and decarbonization CapEx?

A: Aditya Mittal said focus is on CapEx envelope, can modify where CapEx is spent, and decarb CapEx could be more than $300M per year if policy regulation accelerates.

Q: On Liberia, why EBITDA potential only increasing slightly with volume increase?

A: Aditya Mittal explained it's due to quality considerations, as DSO product has lower Fe than cilta-cel product, so revenue uplift from blending offsets some volume growth impact.

Q: Threat of tariffs on Canada and Mexico, impact on Dofasco and Mexico?

A: Aditya Mittal said tariffs were imposed before, costed ~$100M per quarter but offset by revenue, Calvert EAF helps with domestically produced slabs, and focus is on strengthening NAFTA trading block.

Q: Electrical steels market, growth and supply?

A: Aditya Mittal said non-grain-oriented electrical steel market is in deficit, growing due to electric and hybrid vehicles, and their product offering has high quality capability.

Q: Delay in Mardyck, Serra Azul, Barra Mansa projects?

A: Aditya Mittal said delays were due to equipment supply, lack of project experience in some cases, and created global projects team to bring in expertise.

Q: Buyback program next steps?

A: Aditya Mittal said policy of returning capital to shareholders is clear, using free cash flow, subtracting minimum dividend, and returning half remaining to shareholders.

Q: Expansion in Liberia rationale?

A: Aditya Mittal explained new mining team relooked at Liberian project, decided to blend products for 20 million ton cilta-cel product, with investments in infrastructure for 20 million tons.

Q: Ukraine production return?

A: Aditya Mittal said can quickly bring back to cash breakeven at 3 million ton rate, future steps depend on clarity on demand and rebuild plan.

Q: European performance margins?

A: Genuino Christino said strong cost performance, better operations in quarter four contributed to margins.

Q: European footprint, restructuring?

A: Aditya Mittal said need action on trade, energy, and C-band regulation for European competitiveness, will act to restore competitiveness if needed.

Q: Vallourec stake, synergies?

A: Aditya Mittal said Vallourec is a great asset, management doing well, no intentions to increase stake further.

Q: India market trends and margins?

A: Aditya Mittal said India likely to take safeguard action, expected to support growth, and structurally higher margins due to value add projects and vertical integration.

Q: European decarbonization, listened to by commission?

A: Aditya Mittal said need action on trade and C-band regulation, sympathy but need actions.

Q: Q1 EBITDA uptick?

A: Genuino Christino said expect higher shipments in U.S., stable prices and costs; stable shipments in Brazil; slightly lower NRP but higher volumes in Europe, strong mining performance.

Q: Decarbonization in Canada?

A: Aditya Mittal said focus on economic decarb, waiting for appropriate regulatory framework, pace of policy slowed, energy crisis affected decarbonization pace.