ArcelorMittal SA Q1 FY2025 earnings call

• Safety: Focused on implementing recommendations from a safety audit, aiming for a fatality-free and zero serious injuries company within 3 years. The first year will set foundations for transformational change across the group, with years two and three embedding and solidifying this change.
• Financial Performance: Strong operational performance and cash flows were noted. EBITDA per ton was $116 in the quarter, double previous cyclical lows. Excluding seasonal working capital investment and discretionary CapEx, underlying free cash flow for the quarter was around $700 million.
• Asset Portfolio: The company has high-graded its asset portfolio by divesting higher-cost assets and acquiring well-positioned new assets, demonstrating structurally higher margins and greater earnings resilience across market environments.
• Tariffs and Outlook: Supported efforts to address global steel excess capacity and unfair trade practices. The impact of Section 232 tariffs on North America business is largely neutral. EU spreads recovered, supporting Q2 EBITDA, and the order book remains healthy though monitoring tariff impact on demand is ongoing.
• Growth Projects: The Liberia expansion project is on track and budget, Calvert's new EAF is in commissioning, and the India Phase 1 expansion at Hazira is proceeding as scheduled. A new long-term share buyback program through 2030 was initiated.

The Mining segment saw Liberia achieve records in production and shipments prior to new capacity ramp-up. The Europe segment's mills operated consistently, supporting favorable cost performance. The North America segment returned to normalized operating levels after resolving production issues from the previous year. Absolute performance details were highlighted, though revenue contribution percentages were not specified in the transcript.

• Q2 EBITDA: Expected to be clearly better than Q1 due to EU spreads recovery and positive dynamics in Brazil (seasonal recovery) and Ukraine (higher volumes).
• North America: Tariff impact on North America business remains largely neutral, with a healthy order book, stable volumes, and slightly up prices.
• Liberia: Expansion project is on track and budget, with potential upside to the $450 million EBITDA target at capacity if prices hold current levels.

• Tariff Impact: Uncertainty regarding the impact of tariffs on demand, which is being closely monitored.
• India Land Acquisition: Challenges in land acquisition for the new greenfield plant in India.
• Global Steel Market: Excess capacity and unfair trade practices in the global steel industry pose risks.

Q: Alain Gabriel asks about Q2 EBITDA building blocks by division, impact of falling met coal prices, and North America auto component exemptions on steel tariffs.

A: Genuino and Daniel discuss higher volumes in Brazil and Ukraine, a positive price cost effect in Europe, and the neutral tariff impact on North America with a healthy order book.

Q: Ephrem Ravi inquires about India greenfield plant timeline, land acquisition, and Monlevade expansion cancellation.

A: Genuino mentions the early stages of the India plant, challenges in land acquisition, and the Monlevade expansion was canceled due to high costs.

Q: Tom Zhang asks about North America volumes, prices, and Europe job cuts.

A: Genuino and Daniel state stable North America volumes, slightly up prices, and job cuts in Europe not changing the footprint, with positive momentum in Europe.

Q: Matthew Greene asks about met coal acquisition and ArcelorMittal's stance.

A: Genuino states there are no current plans for M&A in met coal.

Q: Patrick Mann asks about share buyback technicals and Liberia margin.

A: Daniel explains the unchanged capital allocation policy and that the Liberia project's $450 million EBITDA at capacity is conservative with potential upside if prices hold.

Q: Cole Hathorn asks about European market, mill volumes, and India JV dynamics.

A: Genuino and Daniel discuss an improving European market with safeguards, potential volume increase, and positive India JV momentum with safeguards and completed maintenance.

Q: Boris Bourdet asks about free cash flow working capital and China stimulus.

A: Genuino mentions seasonal working capital investment and a positive free cash flow outlook, while Daniel discusses uncertain China stimulus and the need for steel industry protection.

Q: Bastian Synagowitz asks about Calvert EAF startup and slab supply tariffs.

A: Genuino states the EAF commissioning is ongoing with a 12-month ramp-up, slabs imported to Calvert with costs in Calvert, and no impact on the Brazilian segment.

Q: Tristan Gresser asks about Calvert U.S. Steel acquisition review.

A: Genuino states waiting for the CFIUS review conclusion.

Q: Maxime Kogge asks about defense exposure and decarbonization triggers.

A: Daniel mentions defense exposure via Industeel and decarbonization triggers including safeguards, CBAM, and energy access.

Q: Andrew Jones asks about energy cost reduction via steel action plan.

A: Genuino discusses the steel action plan addressing import issues and energy access, with focus on details and implementation for energy cost reduction.