ArcelorMittal SA Q3 FY2025 earnings call

• Safety: Completing the first year of a 3-year transformation program, with improvement in serious injuries and fatalities observed, but more work needed.
• Results: Third quarter EBITDA per tonne at $111, 25% above historical average; on track to capture $0.7 billion structural EBITDA improvement in 2025 with medium-term impact of $2.1 billion unchanged.
• Free Cash Flow: Underlying business generated ~$0.5 billion positive free cash flow excluding working capital, with expectation of working capital unwinding positively for year-end.
• Positive Outlook: European trade tool proposal supports sustainable steel sector; advanced product offering and market franchises position to seize opportunities; actively enabling energy transition with investments in electrical steels and renewable energy.

The transcript does not provide detailed breakdown of product segments by revenue contribution. However, it mentions third quarter EBITDA per tonne was $111, which is 25% above historical average margin. Underlying business generated approximately $0.5 billion positive free cash flow excluding working capital after investing close to $1 billion in strategic growth projects.

• 2026 EBITDA bridge: Non-recurrence of Mexico costs ($200 million), contribution from projects ($800 million), and expected demand recovery.
• CapEx: Reference range of $4.5 billion to $5 billion for 2026 and beyond, including strategic sustaining maintenance.
• Working Capital: Hoping for working capital outflows in 2026 due to strong EBITDA, moving in line with EBITDA.

• Mexico: Past issues like illegal blockades, outages, but confident in resolving operational issues with SOP reviews.
• Europe: Uncertainties around CBAM implementation, import pressure in Brazil and India, energy costs in Ukraine.
• North America: Trade negotiations and tariff uncertainties, impact of government policies on demand.

Q: Looking forward to 2026, what are the unusual or exceptional costs to consider while building the EBITDA bridge?

A: Mentioned non-recurrence of Mexico costs ($200 million), contribution from projects ($800 million), and expected demand recovery.

Q: In Europe, how much can production be flexed if imports decline dramatically?

A: Confident in capturing market share as capacity in Europe is excess of current production.

Q: Q4 by division, color on realized pricing, volumes?

A: Seasonal improvement in Europe, higher iron ore shipments from Liberia expansion, normal seasonality in North America with offset from Mexico improvement.

Q: CapEx profile medium term?

A: Reference range $4.5B-$5B for 2026 and beyond.

Q: Capital allocation in Europe with safeguard replacements?

A: Encouraged by framework, but implementation gradual, multiyear journey.

Q: Mitigating tariff costs with automakers at Dofasco?

A: Renewing OEM contracts, cooperation with customers.

Q: Working capital release in Q4?

A: Seasonal, receivables and payables impact, confident in significant release.

Q: Mexico asset recovery?

A: Confident in resolving operational issues with SOP reviews.

Q: Import pressure in Brazil and India?

A: Antidumping measures expected to impact, bullish on Brazil long term.

Q: Ukraine production?

A: Running at capacity, high energy costs, engaging with government.

Q: Europe CO2 emissions and free allocation?

A: Ballpark 20% of production pays CO2 costs, gradual reductions with CBAM.

Q: Canada auto tariffs?

A: Negotiations suspended, hope for resumption.

Q: European trade proposals adoption?

A: Accelerated approval possible, but process ongoing.

Q: China production cuts?

A: No significant changes seen in China's export and production levels.