Arcelormittal South Africa Limited · JSE:ACL
Arcelormittal South Africa — H1 2024 Earnings Presentation
33 slides from Arcelormittal South Africa's earnings presentation, June 2024
Slide 1: Financial Results for the six months ended 30 June 2024
Financial Results June 2024 FINANCIAL RESULTS for the six months ended 30 June 2024
Slide 2: Disclaimer
Disclaimer Forward-looking statements This presentation includes forward-looking information and statements about ArcelorMittal South Africa and its subsidiaries that express or imply expectations of future events or results. Forward-looking statements are not historical facts. These statements incl
Slide 3: Contents
Contents KEY MESSAGES AND SALIENT FEATURES 01 Kobus Verster SAFETY, ENVIRONMENT, SOCIAL AND GOVERNANCE 02 Tami Didiza OPERATIONS AND MARKET REVIEW 03 Kobus Verster FINANCIAL REVIEW AND CAPITAL ALLOCATION 04 Gavin Griffiths SUSTAINABILITY AND GROWTH 05 Kobus Verster CONCLUSION AND OUTLOOK 06 Kobus Ve
Slide 4: Key messages and salient features
Financial Results 2024 Key messages and salient features Kobus Verster
Slide 5: Overview and Salient Features
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK OVERVIEW AND SALIENT FEATURES • With the Longs Business continuing to operate, saving 3 500 direct jobs and over 80 000 more across the value chain,
Slide 6: Overview and Salient Features (cont.)
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK OVERVIEW AND SALIENT FEATURES (cont.) INTERNATIONAL SPREAD INTERNATIONAL CHINA HRC (FOB) vs. INT. RMB ($/t) • Global growth expected to stabilise at
Slide 7: Overview and Salient Features (cont.)
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK OVERVIEW AND SALIENT FEATURES (cont.) INTERNATIONAL HRC1 AND REBAR2 ($/t) INTERNATIONAL IRON ORE ($/t) Average $775/t Average $683/t Average $118/t
Slide 8: Safety, Environment, Social and Governance
Financial Results 2024 Safety, Environment, Social and Governance Tami Didiza
Slide 9: Safety
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK SAFETY • Safety is the Company’s highest priority as it remains committed to Zero Harm - 100% of operations certified to the health and safety manag
Slide 10: Environmental
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK ENVIRONMENTAL Steel making • Continued environmental expenditure despite financial challenges EAF at NC, transformation Midrex on • 100% of operatio
Slide 11: Socio Economic Footprint
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK SOCIO ECONOMIC FOOTPRINT • Science centres provide educational support to less fortunate schools in local communities. Curriculum Support reached 27
Slide 12: Governance, Stakeholders and Policy Issues
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK GOVERNANCE, STAKEHOLDERS AND POLICY ISSUES FAIR TRADE PRACTICES GAS • Most steel producing countries and regions implemented trade remedies and non-
Slide 13: Operations and Market Review
Financial Results 2024 Operations and Market Review Kobus Verster
Slide 14: Steel Environment - Global
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK STEEL ENVIRONMENT - GLOBAL GLOBAL CRUDE STEEL PRODUCTION (million tonnes) CRUDE STEEL PRODUCTION 1 028 • Global production flat at 955 million tonne
Slide 15: Steel Environment - South Africa
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK STEEL ENVIRONMENT - SOUTH AFRICA • South Africa’s 2024 GDP growth rate1 expected at 0,7% APPARENT STEEL CONSUMPTION (‘000 tonnes) • SADC and Sub-Sah
Slide 16: Steel Environment - ArcelorMittal South Africa
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK STEEL ENVIRONMENT - ARCELORMITTAL SOUTH AFRICA VOLUMES • 10% decrease in crude steel production to 1,2 million tonnes • 2% decrease in sales volumes
Slide 17: Operating Environment - ArcelorMittal South Africa
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK OPERATING ENVIRONMENT - ARCELORMITTAL SOUTH AFRICA • Capacity utilisation of 60%1 (H1 2023: 66%) including unexpected downtime at blast furnaces PLA
Slide 18: Financial Review and Capital Allocation
Financial Results 2024 Financial Review and Capital Allocation Gavin Griffiths
Slide 19: Financial Results - Financial Performance
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK FINANCIAL RESULTS - FINANCIAL PERFORMANCE EBITDA EVOLUTION (Rm) -720 499 716 495 -125 -448 132 -279 -221 EBITDA Sales volume Sales price Variable co
Slide 20: Financial Results - Net Borrowings
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK FINANCIAL RESULTS - NET BORROWINGS • Working capital lower by R626 million due to lower inventories of R2 039 million partly offset by higher receiv
Slide 21: Capital Allocation
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK CAPITAL ALLOCATION • Investment levels • No major relines / rebuilds during H1 CAPITAL ALLOCATION (Rm) H1 2024 H1 2023 Sustaining & Other 236 332 •
Slide 22: Sustainability and Growth
Financial Results 2024 Sustainability and Growth Kobus Verster
Slide 23: Strategic Initiatives and Growth Opportunities
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK STRATEGIC INITIATIVES AND GROWTH OPPORTUNITIES GROWTH FORECAST LOGISTICS (cont.) • “Green shoots” seen in manufacturing (2024 forecast growth of 1,2
Slide 24: Strategic Initiatives and Growth Opportunities
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK STRATEGIC INITIATIVES AND GROWTH OPPORTUNITIES AFRICA CONTINENTAL FREE TRADE AGREEMENT (AfCFTA) HIGH-PAYBACK INVESTMENT PORTFOLIO AND BALANCE SHEET
Slide 25: Conclusion and Outlook
Financial Results 2024 Conclusion and Outlook Kobus Verster
Slide 26: Outlook – H2 2024
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK OUTLOOK – H2 2024 SAFETY OPERATIONS • Safety remains ArcelorMittal South Africa’s highest priority • With the Longs Business continuing to operate,
Slide 27: Appendix
Financial Results 2024 Appendix
Slide 28: Headline Earnings (Rm)
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK HEADLINE EARNINGS (Rm) H1 2024 H1 2023 Revenue per half year H1 2024 H1 2023 Revenue 20 506 21 045 H1 20 506 21 045 EBITDA before impairment (221) 4
Slide 29: Statement of Financial Position (Rm)
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK STATEMENT OF FINANCIAL POSITION (Rm) H1 2024 H1 2023 H1 2024 H1 2023 Non-current assets 9 618 11 318 Shareholders Equity 6 587 11 341 Property, plan
Slide 30: Cash Flow (Rm)
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK CASH FLOW (Rm) H1 2024 H1 2023 Movement in working capital * H1 2024 H1 2023 Cash (utilized in)/generated from operations before Inventories 2 039 (
Slide 31: Reconciliation of profit from operations to EBITDA (Rm)
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK FINANCIAL RESULTS- Reconciliation of profit from operations to earnings before interest, tax, depreciation and amortization (Rm) H1 2024 H1 2023 (Lo
Slide 32: Divisional EBITDA before impairment (Rm)
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK DIVISIONAL EBITDA before impairment (Rm) H1 2024 H1 2023 Steel operations (Rm) (346) 460 EBITDA margin % (1,7) 2,2 Net realised price R/t 15 504 15
Slide 33: Our Value Creation Model
KEY MESSAGES AND OPERATIONS AND FINANCIAL REVIEW AND SUSTAINABILITY CONCLUSION SALIENT FEATURES MARKET REVIEW CAPITAL ALLOCATION AND GROWTH AND OUTLOOK OUR VALUE CREATION MODEL Inputs Our Working Business Model Outputs Natural capital Financial capital Raw materials consumed (kilotonne) Shareholders
ArcelorMittal South Africa — H1 2024 Earnings Presentation on 6ix