Slide 1: 4Q 2021 and FY 2021 Financial Results and Strategic update
4Q 2021 and FY 2021 Financial Results and Strategic update February 10th 2022 Lakshmi Mittal, Executive Chairman Aditya Mittal, Chief Executive Officer Genuino Christino, Chief Financial Officer Mexico: Hot Strip mill complex 1
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements • This 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 expectation
Slide 3: Contents
Contents 4Q’21 and FY 2021 EXECUTIVE SUMMARY | page 4 SUSTAINABLE DEVELOPMENT | page 8 COST | page 13 STRATEGIC GROWTH | page 16 CAPITAL ALLOCATION| page 27 APPENDIX| page 34 Page 3 3
Slide 4: Safety is our priority: committed to reach zero harm
Safety is our priority: committed to reach zero harm Health and Safety is paramount Health and safety performance (LTIF)* Board and senior management priority – renewed focus, redoubling of H&S training, focus on shop floor and promotion 3.5 H&S performance has of safety first culture deteriorat
Slide 5: 2021 a year of excellent performance and strategic progress
2021 a year of excellent performance and strategic progress The key figures: Decarbonization leadership: Strategic growth: Capital returns: $19.4bn EBITDA 2030 targets set (25% CO2e First coils from Mexico HSM $6.7bn capital returned to reduction globally, 35% for Europe) shareholders in 2021 $6
Slide 6: Unique global presence
Unique global presence Europe*** JV & Assoc. (100% basis) Group 4.4 CIS NAFTA Calvert 50%. Includes hot strip mill shipments Includes:; Asia AMNS India 60% VAMA 50% 33.2 1.5 7.9 China Oriental 37% 4.5 2.5 6.7 Shipments EBITDA Total group & key 9.6 1.1 15.9 JV/Associates 3.1 Shipments EBITDA 2.8 (100
Slide 7: Market conditions remain supportive
Market conditions remain supportive 2021 categorised by recovering real demand and ArcelorMittal weighted PMI* chart restocking leading to tight supply / demand 60 Jan’22 54.9: down from 58.5 balance and record spread environment 58 peak in Jul’21 but still at high expansionary level Inventories
Slide 8: Sustainable leadership
Sustainable leadership 8
Slide 9: Global strategic leadership on decarbonization
Global strategic leadership on decarbonization Plans aligned to company CO2e targets – net zero by 2050* Plans Ambitious plans where policy is supportive: Spain, Canada, Belgium & France Broad innovation portfolio of smart carbon and hydrogen-DRI technologies 1st Smart Carbon projects to start produ
Slide 10: Climate Leadership: Successful first year for initial two XCarb offers and innovation funding
Climate Leadership: Successful first year for initial two XCarb™ offers and innovation funding Growth of XCarb® green steel certificates (Mt) XCarb green steel certificates enable customers to reduce their Scope 3 emissions’ 0.6 XCarb recycled and renewably produced offers customers steel with an ex
Slide 11: $300m decarbonization capex in 2022
$300m decarbonization capex in 2022 (net of Government funding support)* Europe decarbonization underway: Smart Carbon Adapting existing tools to increase use of scrap and enable gas injection Targeted completion of 2 smart carbon initiatives in Gent by end 2022 DRI-EAF footprint transformat
Slide 12: Carbalyst and Torero projects on track for completion by end 2022
Carbalyst and Torero projects on track for completion by end 2022 Carbalyst: Technologies involving gas-fermentation using microbes to convert waste gases into advanced bioethanol for use in transport and to make plastics Continued progress in plant installation Distillation Bioreactors Construc
Slide 13: Cost focus
Cost focus 13
Slide 14: Focussed on achieving full potential of refocussed asset base
Focussed on achieving full potential of refocussed asset base Cost focus: Strategic growth: Structurally improved market: Refocussed asset base Current strategic envelope of China VAT rebate removal projects estimated to add $1.1bn to Streamlined corporate office EBITDA* Jurisdictions addressing unf
Slide 15: New 3Yr Value plan to maintain cost position
New 3Yr Value plan to maintain cost position 2021 $1bn structural improvement plan New $1.5bn 3Yr value plan (2022-2024) Fixed costs savings of $0.6bn achieved in 2021 (vs. 2019) through Focussed on creating value through well defined productivity gains, footprint optimization and SGA reduction
Slide 16: Strategic growth
Strategic growth 16
Slide 17: Capex in 2022 to fund strategic growth and decarbonization
Capex in 2022 to fund strategic growth and decarbonization Capex ($bn) FY 2021 capex of $3.0bn ($0.2bn below Decarbonization guidance) 4.5 Strategic envelope FY 2022 capex includes anticipated Carry over of normative from 2021 0.3 $0.3bn spend on decarbonization Base / normative projects 1.1 3.2
Slide 18: Strategic capex projects to create significant value
Strategic capex projects to create significant value Strategic capex 2021 – 2024 ($bn) Potential EBITDA impacts** ($bn) 3.1 1.1 0.50 0.20 0.80 0.25 0.30 Outstanding spend 2.9 0.10 Completed 0.10 4Q’21: Ramp 0.15 0.25 0.05 up in 2022 0.10 0.35 0.10 0.35 0.25 0.35 Spent to date 0.20 Mexico Vega Serra
Slide 19: Mexico hot strip mill - 1st coils produced Dec'21
Mexico hot strip mill - 1st coils produced Dec’21 New HSM project to optimize capacity and improve mix First coil produced in Dec’21; HSM ramp up now underway Hot skin pass mill (HSPM) expected to be completed in 2H’22 Investment rationale 2.5Mt Hot strip mill (HSM) to capture additional margi
Slide 20: Barra Mansa (Brazil) - New sections mill #2 to capture share of HAV products
Barra Mansa (Brazil) - New sections mill #2 to capture share of HAV products Additional 0.4Mtpy capacity of Special Bar Quality (SBQ), Merchant Bar Quality (MBQ) and Sections Improve productivity and reduce cost by updating the steelmaking and rolling mill processes Increase shipments of HAV pro
Slide 21: Kryvyi Rih – New Pellet Plant
Kryvyi Rih – New Pellet Plant Kryvyi Rih investments to ensure sustainability, environmental compliance and improve productivity LF&CC #3 Modernization of sinter plant #2 and a new 5.0Mtpa pellet plant to be commissioned 4Q’23 Objective: Improved environmental base Closure of old sinter shop
Slide 22: Other strategic envelope projects underway
Other strategic envelope projects underway Expansion to increase wire rod capacity by 1Mtpa (to 2.25Mtpa) to gain share in Monlevade HAV products in this high growth market. Basic engineering being finalized. (Brazil) Commencement of hiring of civil works and piling companies Vega Increase coated /
Slide 23: Growth through our JV and Associates
Growth through our JV and Associates EBITDA of key JV/Associates (100% basis) ($bn) EBITDA of key JV & associates of $5.6bn in 2021 Income from associates, JVs and other investments for 5.6 represented ~15% of group net income 0.2 1.5 JV & Associates book value (including other investments) 0.
Slide 24: AMNS India debottlenecking underway; further expansion planned
AMNS India debottlenecking underway; further expansion planned Record production, shipments and EBITDA in 2021 Crude steel production (Mt) Steel shipments (Mt) Strongly cash generative asset (cash needs of $0.3bn excluding growth capex) Net debt declined by $0.8bn despite investment in +11.7%
Slide 25: Calvert: construction of 1.5Mt EAF on track for 1H'23
Calvert: construction of 1.5Mt EAF on track for 1H’23 Construction of new 1.5Mt EAF & caster on track for 1H’23 HSM production (Mt) Steel shipments (Mt) JV to invest $775m for an on-site steelmaking facility (produce slabs for the existing operations, replacing part of purchased slabs) +18.9% +16.
Slide 26: Growth through JV: China
Growth through JV: China VAMA (50%): Produces steel for high-end applications in the automobile industry State-of-the-art facility; 1.5Mt capacity serving growing auto market (running at designed capacity) Plans to increase 40% capacity by 2023 to 2Mt; expansion capex of $165m (self funded) PLTC
Slide 27: Capital allocation
Capital allocation 27
Slide 28: Strong balance sheet supports equity returns
Strong balance sheet supports equity returns Net debt ($bn) Interest cost ($bn) 32.5 26.5 22.5 1.9 1.8 21.8 18.8 19.7 1.5 16.1 15.8 15.7 1.3 1.1 11.1 10.1 10.2 9.3 0.8 6.4 4.0 0.6 0.6 0.4 0.3 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 3Q’08 2012 2013 2014 2015 2016 2017 20
Slide 29: Capital allocation priorities
Capital allocation priorities Returns to shareholders + $5.7bn share buybacks Base dividend provides minimum $7.2bn capital returned since + $1.2bn MCN repurchase return; additional variable return component linked to FCF* Sept 2020 + $0.3bn dividends Strong balance sheet maintain net debt of <$7bn
Slide 30: Capital return policy
Capital return policy $6.6bn FCF* in 2021 $0.3bn Base dividend $0.38/sh to be paid in 2Q 2022 $6.3bn Surplus FCF ~50%** ~50% Balance sheet headroom creates $3.2bn Strategic optionality: returned capital M&A in support of strategic targets Further returns to shareholders Page 30 * Free cash flow
Slide 31: Building a solid track record of consistent returns to shareholders
Building a solid track record of consistent returns to shareholders Clearly defined capital return policy: Shares on fully diluted basis* Dec 2020 - Dec 2021 (millions) -19% Base dividend plus 50% of surplus FCF (returned to 1,189 shareholders) 108 88 967 18 65 52 1 19% reduction of the number o
Slide 32: Positive outlook for EBITDA and FCF in 2022
Positive outlook for EBITDA and FCF in 2022 Ex-China ASC forecast expected to grow by +2.5% to +3% Scope adjusted steel shipments*** (Mt) FY’22 steel shipments are expected be increase ~ +3% vs. FY’21* Revenues and operating performance to be supported by annual auto 67 contract resets now sec
Slide 33: Focussed on sustainable value creation
Focussed on sustainable value creation Global leadership on decarbonization Sustainability Delivering green steel Leadership Driving technology solutions 3Yr $1.5bn Value Plan to support higher normalised EBITDA Cost advantage Leaner, more efficient corporate office Optimized footprint a
Slide 34: Appendix
Appendix 4Q’21 and FY 2021 SUSTAINABLE DEVELOPMENT | page 35 FINANCIAL HIGHLIGHTS | page 37 TRADE | page 50 MACRO HIGHLIGHTS | page 52 STEEL & IRON ORE INVESTMENTS | page 55 JV INVESTMENTS | page 62 Page 34 34
Slide 35: Sustainable Development
Sustainable Development 35
Slide 36: Climate leadership: Transformation plan
Climate leadership: Transformation plan Developing zero emissions plans at integrated sites: MoU signed with govt for €1bn investment > Build ~2Mt new green Hydrogen DRI plant and hybrid-EAF (Gijon) Spain Transfer DRI feedstock from Gijon to Sestao (to use in its 2 EAFs) > enables1.6Mt zero emis
Slide 37: Financial performance
Financial performance 37
Slide 38: 2021 excellent operating results across all segments
2021 excellent operating results across all segments FY 2020 to FY 2021 EBITDA delta by segment ($bn) NAFTA: BRAZIL: 1.1 EBITDA increase to $3.1bn EBITDA +313% to $4.1bn 3.1 Shipments* +8.0% to 9.6Mt Shipments +24.3% to 11.7Mt 5.9 EBITDA/t increase to $326/t EBITDA/t increase to 355/t 2.4 19.4 2.6 A
Slide 39: 4Q'21 operating results
4Q’21 operating results 4Q’21 to 3Q’21 highlights 3Q’21 to 4Q’21 steel shipments (Mt) • NAFTA: EBITDA up +5.8% QoQ (4Q’21 EBITDA/t $477t) 15.8 Primarily due to positive price-cost effect (PCE) offset in part -0.1 0.1 0.2 by lower shipment volumes 0.2 • Brazil: EBITDA down -29.3% QoQ (4Q’21 EBITDA/
Slide 40: Mining segment results
Mining segment results 4Q’21 vs. 3Q’21 highlights Mining EBITDA ($m) EBITDA up +74.5% FY’21 vs. FY’20 highlighting the benefit +74.5% of vertical integration (higher iron ore prices YoY) 4Q’21 EBITDA decreased 49.8% due to the negative impact of lower iron ore reference prices (-32.3%) offset in
Slide 41: 4Q'21 EBITDA to net result
4Q’21 EBITDA to net result ($ million) BASIC EPS 4Q’21 Includes results from AMNS Weighted Av. No. of shares (millions) 1,030 India, Calvert, and European investees Earnings per share $3.93 383 (49) (111) (712) 218 (736) Related to improved cash 5,052 flow projections in the Includes forex loss of $
Slide 42: FY'21 EBITDA to net result
FY’21 EBITDA to net result ($ million) Related to improved cash flow BASIC EPS FY’21 projections in the context of decarbonization plans in Sestao Weighted Av. No. of shares (millions) 1,105 (Spain) (partially reversing the Earnings per share $13.53 impairment recognized in 2015) (2,523) 2,204 (278)
Slide 43: 4Q'21 EBITDA to free cashflow
4Q’21 EBITDA to free cashflow ($ million) 22 (920) (1,145) (21) 5,052 4,154 2,988 EBITDA Change in Net financial cost, Cash flow from Capex Minority dividends Free cash flow** working capital* tax and others operations Page 43 * Change in working capital: trade accounts receivable plus inventories l
Slide 44: FY'21 EBITDA to free cashflow
FY’21 EBITDA to free cashflow ($ million) (6,409) Mainly to the minority shareholders of AMMC (3,090) 19,404 (3,008) (260) 9,905 6,637 EBITDA Change in Net financial cost, Cash flow from Capex Minority dividends Free cash flow** working capital* tax and others operations Page 44 * Change in working
Slide 45: 4Q'21 net debt analysis
4Q’21 net debt analysis ($ million) Company repurchased 59.2m shares (completing share buy backs announced July 29, 96 2021 and Nov 11, 2021) 1,196 (2,988) XCarb investments: 3,868 LanzaTech 4,030 & Heliogen 1,820 38 Net debt at Free cash flow* M&A Share buyback Partial repurchase Forex and other Ne
Slide 46: FY'21 net debt analysis
FY’21 net debt analysis ($ million) Investments primarily through the XCarbTM Innovation fund and $0.2bn cash on deconsolidation of ArcelorMittal Italia $6.7bn capital return (103) 1,196 6,380 (6,637) 312 4,030 2,570 392 (2,680) 2,600 Net debt at Free cash M&A outlay M&A: Cliffs SBB: from SBB: Other
Slide 47: Mitigating the impact of inflationary cost pressures in the steel industry
Mitigating the impact of inflationary cost pressures in the steel industry TTF natural gas (€/Mwh) and Power Germany (€/Mwh) ArcelorMittal is relatively well placed vs. competition 250 Portfolio: 80% integrated capacity (off gases can TTF NatGas Eur Power Germany Baseload Cal+1 Eur be recycled) 20
Slide 48: Working capital investment providing fuel for the business
Working capital investment providing fuel for the business Working capital needs driven by market 4Q’21 working capital drivers ($bn) No working capital release in 4Q’21 due to relatively robust WC release of $0.6bn from activity/ efficiencies finished steel prices, elevated raw material prices, a
Slide 49: Strong balance sheet
Strong balance sheet Liquidity* at December 31, 2021 ($bn) Debt maturities at December 31, 2021 ($bn) Other loans Commercial paper Bonds 9.9 0.5 Cash 4.4 0.8 0.3 0.2 0.2 0.5 1.6 Unused credit lines 5.5 1.3 1.0 0.9 0.1 0.6 0.4 Liquidity 2022 2023 2024 2025 2026 ≥2026 Liquidity lines Debt**: Ratings:
Slide 50: Trade
Trade 50
Slide 51: Trade policy in core markets EU/NA to provide protection
Trade policy in core markets EU/NA to provide protection ArcelorMittal continue to support action to address unfair trade Europe: United States: Anti-dumping (AD) duties in place since 2017 HRC against China, Brazil, Russia, Iran, • All key flat rolled steel products AD/CVD measures have been Uk
Slide 52: Macro highlights
Macro highlights 52
Slide 53: Regional inventory
Regional inventory German inventories (000 Mt)* US service centre steel inventories (000 Mt) Germany Stocks (latest data point: Dec‐2021) USA (MSCI) (latest data point: Dec‐2021) Months supply (RHS) 5.0 Months Supply (RHS) 1,400 4.0 12,000 1,200 4.0 1,000 10,000 3.0 3.0 8,000 800 600 2.0 6,000 2.0 4
Slide 54: China net exports
China net exports China net trade exports* million Mt 12 Dec’21 finished steel net exports of 4.0Mt vs. Exports of finished steel products (latest data point: Dec‐2021) 2.9Mt Nov’21 (+37.1% MoM) Imports of finished steel products 10 Net-trade Dec’21 finished steel net exports of 4.0Mt vs. 3.5Mt
Slide 55: Steel and mining investments
Steel and mining investments 55
Slide 56: Brazil: Monlevade expansion to increase capacity to gain share in HAV products
Brazil: Monlevade expansion to increase capacity to gain share in HAV products ArcelorMittal has a leading position in the Brazil longs market with 5.1Mt of crude steel capacity following its acquisition of Votorantim’s 1.7Mt finished product capacity in 2018 Lighting of HRC Yard Monlevade expansi
Slide 57: Brazil: Vega high added value capacity expansion
Brazil: Vega high added value capacity expansion HAV expansion project to improve mix. High return mix improvement in one of the most promising developing markets Investment to expand rolling capacity → increase Coated / CRC capacity and construction of a new 700kt continuous annealing Completion
Slide 58: Brazil: Serra Azul mine production capacity increase to 4.5Mtpa
Brazil: Serra Azul mine production capacity increase to 4.5Mtpa Construct facilities to produce 4.5Mtpa DRI quality pellet feed (itabirite mining currently 1.6Mtpa capacity) Supply ArcelorMittal Mexico steel operations with high quality feed and reduce reliance on 3rd party suppliers Capex: ~$0.
Slide 59: Mexico: Las Truchas expansion project
Mexico: Las Truchas expansion project Investment to increase pellet feed production from 1.3Mtpa to 2.3Mtpa and improve concentrate grade Primary target: to supply ArcelorMittal Mexico steel operations with high quality feed and reduce reliance on third party suppliers Capex: ~$150m will enable co
Slide 60: Dofasco: Hot strip mill modernization
Dofasco: Hot strip mill modernization Investments to modernize strip cooling & coiling - flexibility to produce full range of target products Replace existing three end of life coilers with two state of New #4 and #5 Coilers the art coilers, new coil inspection, new coil evacuation and replace runou
Slide 61: Dofasco: #5 CGL Conversion to AluSi
Dofasco: #5 CGL Conversion to AluSi Investments to replace Galvanneal coating capability with AluSi coating Investments to replace Galvanneal coating capability with AluSi coating upgrades to furnace, snout chute, coating pot (including installation of premelter), pot equipment, wiping equipment &
Slide 62: JV investments
JV investments 62
Slide 63: AM/NS India strategically located in high growth market
AM/NS India strategically located in high growth market Modern integrated steel making facilities 1 3 Access to high quality iron ore Among India’s largest single fines and proximity to large location flat steel producer quantities of low grade fines 2 4 Raw material security with largest Complete b
Slide 64: AM China automotive JVs
AM China automotive JVs Best in class solutions into China, with many breakthroughs and innovations ArcelorMittal’s high end and lightweight steel solutions are widely welcomed by major carmakers in China First ever delivery of Usibor2000® in China market – Door Ring supplied for Haval H6 model, t
Slide 65: VAMA: Automotive JV adding 40% capacity by year 2023 to reach 2Mtpa
VAMA: Automotive JV adding 40% capacity by year 2023 to reach 2Mtpa To meet growing demand of high value add solutions Current operations running well Phase 1 operations being running at its designed capacity Healthy balance sheet and financials VAMA operates with a healthy balance sheet with pl
Slide 66: China Oriental: Asset upgrade completed
China Oriental: Asset upgrade completed Well placed to capture the market growth evolving from infrastructure projects ArcelorMittal owns 37% of China Oriental Group (listed on HKEX) Leading long steel producer of H-beam/sheet piles in China - largest long product producer in Asia CO Jinxi plant
Slide 67: ArcelorMittal contacts
ArcelorMittal contacts Daniel Fairclough – Global Head Investor Relations Maureen Baker – Fixed Income/Debt IR daniel.fairclough@arcelormittal.com +44 207 543 1105 maureen.baker@arcelormittal.com +33 1 71 92 10 26 Hetal Patel – UK/European Investor Relations Chanelle George – Investor Relations Assi