Slide 1: 4Q 2022 and FY 2022 Financial Results and Strategic update
4Q 2022 and FY 2022 Financial Results and Strategic update February 9, 2023 Lakshmi Mittal, Executive Chairman Aditya Mittal, Chief Executive Officer Genuino Christino, Chief Financial Officer © ArcelorMittal 2022 - All rights reserved for all countries Cannot be disclosed, used, or reproduced witho
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 expectations
Slide 3: Contents
Contents 4Q 2022 and FY 2022 EXECUTIVE SUMMARY | page 4 SUSTAINABLE LEADERSHIP | page 8 COST FOCUS | page 11 STRATEGIC GROWTH | page 14 CAPITAL ALLOCATION| page 20 APPENDIX| page 26 Page 3
Slide 4: Safety is our priority: committed to reach zero harm
Safety is our priority: committed to reach zero harm Health and safety performance (LTIF)* ▪ Following full review of every aspect of safety a multi-pronged action plan has been deployed, building on and supporting the 3.5 considerable policies and processes already in place 3.0 ▪ Global H&S team st
Slide 5: 2022 another year of strategic progress
2022 another year of strategic progress Key FY’22 figures: Decarbonization leadership: Strategic growth: Capital returns: ▪ $14.2bn EBITDA 2030 targets set (25% CO2e reduction Recent acquisitions estimated to add 2022 share buy backs completed globally, 35% for Europe) normalized EBITDA of ~$0.5bn,
Slide 6: Our results demonstrate greater resilience
Our results demonstrate greater resilience Despite the acute destocking environment, energy prices and specific challenges faced by the CIS operations in 4Q 2022, the Group profitability is higher than previous crisis environments, demonstrating the benefits of our strengthened asset portfolio and i
Slide 7: Market conditions showing early signs of improvement
Market conditions showing early signs of improvement ArcelorMittal weighted PMI* chart 60 58 ▪ 2022 a year of two halves – a strong 1H’22 followed by a weaker 56 2H’22 due inflationary pressures and negative sentiment leading 54 52 to slowing real demand exacerbated by destocking 50 48 ▪ During 4Q’2
Slide 8: Sustainable leadership
Sustainable leadership
Slide 9: We are leading the industry in providing low-carbon solutions to our customers
We are leading the industry in providing low-carbon solutions to our customers ▪ Plans aligned with the Company’s 2030 CO2e targets + net zero by 2050* ▪ Texas HBI plant acquired, securing high-quality metallics for low-carbon steelmaking ▪ 1st smart carbon CCU project inaugurated in Ghent (Belgium)
Slide 10: XCarb: Investing in innovation and supporting our customers
XCarb: Investing in innovation and supporting our customers Providing customer solutions Investing in innovative technologies ▪ Strong customer appetite for XCarb® green ▪ Applies to products made via the EAF route using ▪ A strategic investment fund to accelerate our steel certificates from a wide
Slide 11: Cost focus
Cost focus
Slide 12: 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 Refocussed asset asset base base ▪ Current strategic envelope of • Supply response: Permanent projects estimated to add $1.3bn to capacity cuts in China •Streamlined
Slide 13: Value plan: Progress in a challenging year
Value plan: Progress in a challenging year $1.5bn 3Yr value plan* (2022-2024) Additional temporary actions taken in 2022 ▪ Focussed on creating value through well defined initiatives: Commercial (vol & mix in response to energy crisis improvements) and operational improvements (primarily in variable
Slide 14: Strategic growth
Strategic growth
Slide 15: Capex in 2023 to fund strategic growth and decarbonization
Capex in 2023 to fund strategic growth and decarbonization ▪ Capex of $3.5bn in FY 2022 is in line with the latest guidance Capex ($bn) and compares with $3.0bn in FY 2021 5.0 ▪ FY 2023 capex guidance in the range of $4.5bn-$5.0bn 0.4 4.5 ▪ Decarbonization project spend to increase by $0.2bn to 0.4
Slide 16: Strategic capex envelope to drive significant incremental value
Strategic capex envelope → to drive significant incremental value Strategic capex* 2021 – 2024 ($bn) Potential EBITDA impacts***** ($bn) 4.2 0.10 1.3 0.20 0.5 0.5 0.25 Completed 0.8 4Q’21: Ramp 3.3 0.07 0.07 up progressing 0.6 0.07 Outstanding spend 0.05 0.3 0.10 0.3 0.10 0.2 0.25 0.4 0.4 Spent up t
Slide 17: New 170kt Electrical Steels capacity project in France (Mardyck)
New 170kt Electrical Steels capacity project in France (Mardyck) Reinforcing ArcelorMittal’s leadership in Automotive sector; New capacity 170kt of electrical steels: accompanying our customers in the fast development of e-mobility of which 145kt for automotive applications ▪ E-mobility is developin
Slide 18: Strategic capex in renewables and mining
Strategic capex in renewables and mining India: Renewable energy project: Pumped Hydro Storage Project - Upper Basin Reservoir • $0.6bn investment combining solar and wind power (~1.0GW nominal capacity), supported by Greenko’s hydro pumped storage project • Necessary allotment of land has been rece
Slide 19: Growth through our main JVs
Growth through our main JVs ▪ EBITDA of JVs of $2.8bn* in 2022 EBITDA of JVs (ArcelorMittal ≥ 50% interest) 100% basis ($bn) ▪ FY’22 income from associates, JVs and other investments of $1.3bn (~14% of group net income) 0.1 ▪ JV & Associates book value (including other investments**) of $11.9bn as o
Slide 20: Capital allocation
Capital allocation
Slide 21: Our balance sheet is a strong foundation for growth and shareholder returns
Our balance sheet is a strong foundation for growth and shareholder returns Balance sheet has never been as strong Debt adjusted FCF* ($billion) (Net debt, $bn) 7.0 FCF 6.0 Debt-adjusted FCF** 5.0 4.0 $2.6bn 32.5 average 21.8 3.0 adjusted FCF 10.1 2.2 2.0 3Q’08 2012 2017 2022 1.0 0.0 -1.0 2012 2013
Slide 22: Progressive steps in base dividend
Progressive steps in base dividend ▪ Having achieved its balance sheet targets, ArcelorMittal adopted a prudent and flexible capital allocation and return policy ▪ Fixed component: Conservative base dividend to be progressively increased over time ▪ Variable component: 50% of post-dividend free cash
Slide 23: Post dividend FCF split between strategic investment and returns
Post dividend FCF split between strategic investment and returns 50% of post-dividend FCF provides basis for strategic ~50% returned to shareholders investments ▪ SBB totalling $2.9bn returned in 2022 ▪ CSP in Brazil: World class asset, producing the highest quality slab at a ▪ 106.4m shares repurch
Slide 24: Constructive outlook for 2023
Constructive outlook for 2023 ▪ Demand: World ex-China ASC is expected to recover in 2023 by +2.0% to +3.0% as Forecast ASC growth 2023F vs. 2022*** compared to 2022 ▪ Shipment growth: ArcelorMittal FY’23 steel shipments are expected to increase ~+5% vs. FY’22* US**** +1.5% to +3.5% ▪ Positive FCF g
Slide 25: Focussed on sustainable per share value creation
Focussed on sustainable per share value creation ▪ Global leadership on decarbonization Sustainability ▪ Delivering green steel Leadership ▪ Driving technology solutions ▪ 3Yr $1.5bn Value Plan to support higher normalized EBITDA Cost advantage ▪ Optimized footprint and enhanced productivity ▪ Resul
Slide 26: Appendix
Appendix 4Q 2022 and FY 2022 FINANCIAL PERFORMANCE | page 27 TRADE | page 40 MACRO HIGHLIGHTS | page 42 JV INVESTMENTS | page 45 Page 26
Slide 27: Financial performance
Financial performance
Slide 28: Unique global presence
Unique global presence JV (100% basis) Europe*** Group Calvert 50%. Includes hot strip mill 5.8 CIS NAFTA shipments Includes:; 0.6 Asia AMNS India 60% VAMA 50% 30.2 4.2 0.2 4.2 6.0 0.6 Shipments EBITDA 9.6 Shipments EBITDA 7.6 3.1 1.5 Shipments EBITDA Total group & key JVs Shipments EBITDA (100% bas
Slide 29: 2022 operating results impacted by 2H'22 destock and Ukraine war
2022 operating results impacted by 2H’22 destock and Ukraine war FY 2021 to FY 2022 EBITDA delta by segment ($bn) NAFTA: BRAZIL: EBITDA down -2.2% to $3.1bn EBITDA -27.2% to $3.0bn (0.1) Shipments stable at 9.6Mt Shipments -1.5% to 11.5Mt (2.7) EBITDA/t down -2.2% to $319/t EBITDA/t down -26.1% to 1
Slide 30: 4Q'22 operating results
4Q’22 operating results 4Q’22 to 3Q’22 highlights 3Q’22 to 4Q’22 steel shipments (Mt) • Europe: EBITDA down -67.2% QoQ (4Q’22 EBITDA/t $45/t) → Negative price-cost effect (PCE) and lower shipment volumes offset in 13.6 part by easing of energy costs -0.3 • ACIS: EBITDA loss of $107m → primarily due
Slide 31: 4Q'22 operating result
4Q’22 operating result EBITDA ($bn) ▪ Lower EBITDA: 4Q’22 EBITDA $1.3bn; EBITDA/t of $100/t -27.0% ▪ Weaker steel performance: -52.7% 5.1 19.4 ‒ Negative price-cost effects and lower steel shipments due to 2.7 14.2 1.3 destocking driven by weaker demand 4Q’21 3Q’22 4Q’22 FY’21 FY’22 ▪ Weaker iron or
Slide 32: Mining segment results
Mining segment results FY’22 vs. FY’21 highlights Mining EBITDA ($m) -34.0% ▪ EBITDA down -34.0% YoY ▪ -24.7% lower iron ore price and higher costs offset in part by +7.7% higher iron ore shipments 2,599 400 311 312 1,717 4Q’21 3Q’22 4Q’22 FY’21 FY’22 4Q’22 vs. 3Q’22 highlights ▪ 4Q’22 EBITDA stable
Slide 33: 4Q'22 EBITDA to net result
4Q’22 EBITDA to net result ($ million) BASIC EPS 4Q’22 Weighted Av. No. of shares (millions) 865 Earnings per share $0.30 Relate to ArcelorMittal Kryviy Rih* Includes foreign exchange gain of $497 (636) million (following the -9.4% Gain following the depreciation of the US 1,258 settlement of a clai
Slide 34: FY'22 EBITDA to net result
FY’22 EBITDA to net result ($ million) BASIC EPS FY’22 Weighted Av. No. of shares (millions) 911 Earnings per share $10.21 (2,580) (213) (121) (1,026) 1,317 (283) (1,953) 14,161 Relate to ArcelorMittal 11,255 Kryviy Rih* 10,272 9,302 EBITDA D&A Impairment Exceptional Operating Income from Net intere
Slide 35: 4Q'22 EBITDA to free cash flow
4Q’22 EBITDA to free cash flow ($ million) (36) (1,500) 2,412 (29) 3,634 2,105 1,258 EBITDA Change in Net financial cost, Cash flow from Capex Minority dividends Free cash flow** working capital* tax and others operations Page 35 * Change in working capital: trade accounts receivable plus inventorie
Slide 36: FY'22 EBITDA to free cash flow
FY’22 EBITDA to free cash flow ($ million) (1,223) (2,735) (3,468) 14,161 (331) 10,203 6,404 EBITDA Change in Net financial cost, Cash flow from Capex Minority dividends Free cash flow** working capital* tax and others operations Page 36 * Change in working capital: trade accounts receivable plus in
Slide 37: 4Q'22 Net debt analysis
4Q’22 Net debt analysis ($ million) 10.3m shares at an average price of €22.08/sh** Excludes $2.2bn CSP acquisition due to close (2,105) 1Q’23 116 3,927 288 10 2,236 Net debt at Free cash flow* M&A Share buyback Forex and other Net debt at September 30, 2022 December 31, 2022 Additional leases offse
Slide 38: FY'22 Net debt analysis
FY’22 Net debt analysis ($ million) Primarily related to leases offset in part by forex impacts Excludes $2.2bn CSP acquisition due to close 1Q’23 4,030 337 332 2,236 (6,404) 2,937 1,004 Net debt at Free cash flow* M&A** Share buyback Dividend to Forex and other Net debt at December 31, 2021 Arcelor
Slide 39: Balance sheet a strong foundation for strategic continuity
Balance sheet a strong foundation for strategic continuity Liquidity* at December 31, 2022 ($bn) Debt maturities at December 31, 2022 ($bn) Other loans Commercial paper Bonds 14.9 0.9 0.6 Cash 9.4 0.8 0.5 0.6 0.2 2.5 0.3 Unused credit lines 5.5 1.2 0.9 1.0 1.0 1.2 Liquidity 2023 2024 2025 2026 2027
Slide 40: Trade
Trade
Slide 41: Trade policy in core markets EU/NA to provide protection
Trade policy in core markets EU/NA to provide protection ArcelorMittal continues to support action to address unfair trade Europe: United States: ▪ All key flat rolled steel products AD/CVD measures have been • Anti-dumping (AD) duties in place since 2017 - HRC against China, Ukraine*, implemented;
Slide 42: Macro Highlights
Macro Highlights
Slide 43: Regional inventory
Regional inventory German inventories (000 Mt)* US service centre steel inventories (000 Mt) (latest data point: Dec 2022) 5.0 Germany Stocks in Kt (latest data point: Dec-2022) 3.6 1,400 USA (MSCI) Monthly supply (RHS) 12,000 3.4 1,200 4.0 Months Supply (RHS) 10,000 3.2 1,000 3.0 3.0 8,000 2.8 800
Slide 44: China net exports
China net exports China net trade exports* million Mt (latest data point: Dec-2022) ▪ Dec’22 finished steel net exports of 4.7Mt vs. 12 Exports of finished steel products 4.8Mt Nov’22 (-3% MoM) 10 Imports of finished steel products ▪ 4Q’22 finished steel net exports of 14.0Mt vs Net-trade 15.2Mt 3Q’
Slide 45: JV Investments
JV Investments
Slide 46: Calvert: construction of 1.5Mt EAF
Calvert: construction of 1.5Mt EAF Construction of new 1.5Mt EAF & caster 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) -10% ▪ Secures a reliable slab supply (USMCA comp
Slide 47: AMNS India solid performance; doubling of capacity underway
AMNS India solid performance; doubling of capacity underway FY 2022 performance Crude steel production (Mt) Steel shipments (Mt) ▪ FY’22 EBITDA $1.2bn (vs. $2.0bn in FY’21) impacted by export duties on steel and market slowdown ▪ FY’22 production vs. FY’21 due lower exports following the imposition
Slide 48: Growth through JV and associate: China
Growth through JV and associate: 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) ▪ Vama Phase 2 project ongoing: increase capacity by 40% to 2Mtpa by 2023. Exp
Slide 49: ArcelorMittal contacts
ArcelorMittal contacts Daniel Fairclough – Global Head Investor Relations Maureen Baker – Fixed Income/Debt Investor Relations daniel.fairclough@arcelormittal.com +44 207 543 1105 maureen.baker@arcelormittal.com +33 1 71 92 10 26 Hetal Patel – General Manager Investor Relations Victoria Irving – ESG