ArcelorMittal reports second quarter 2023 and half year 2023 results

Health and safety – Own personnel and contractors lost time injury frequency rate²

Our priority in all that we do is to protect the safety, health and wellbeing of all our employees. We aspire to become a fatality free and severe injury free company.

The lost time injury frequency rate (“LTIFR”) was 0.73x in the second quarter of 2023 (“2Q 2023”) as compared to 0.64x in the first quarter of 2023 (“1Q 2023”) and 0.67x in the second quarter of 2022 (“2Q 2022”). Health and safety performance in the first six months of 2023 ("1H 2023") was 0.70x as compared to 0.68x in the first six months of 2022 ("1H 2022").

The Company is moving to a ‘predict-and-prevent’ culture which involves focusing its attention on proactive rather than reactive KPIs, with a particular focus on proactively detecting and identifying the Potential for Serious Injuries or Fatalities (“PSIF”). PSIFs are precursors of severe accidents: unsafe situations or events, that we detect proactively, before they could lead to a fatality or injury. This approach enables us to provide a deeper understanding of how near- miss incidents arise and can be avoided.

Own personnel and contractors – Lost Time Injury Frequency rate

Sustainable development highlights:

• On July 20, 2023, The European Commission approved €850 million for Dunkirk (2.5Mt DRI and 2 new EAFs). This follows the European Commission approval on June 22, 2023, of the €280 million state aid which the Belgian authorities will provide to our DRI – EAF decarbonization project in Belgium (2.5Mt DRI and 2 new EAFs). The overall support that we will receive from the Belgian and French authorities is inline with our broader ask to our host governments for our decarbonization projects.

• On June 14, 2023, ArcelorMittal and John Cockerill announced plans to construct an industrial- scale low temperature, direct electrolysis plant. The Volteron™ plant is targeting in a first phase to produce between 40,000 and 80,000 tonnes a year of iron plates and to start production in 2027. Once the technology has been proven at this scale, the intention is to increase the plant’s annual capacity to between 300,000 and 1 million tonnes. Direct electrolysis is one of three decarbonization technology pathways ArcelorMittal is working on to make net zero steelmaking a reality. The cold direct electrolysis process extracts iron from iron ore using electricity. The iron plates are then converted into steel in an electric arc furnace.

• On June 7, 2023, ArcelorMittal North America announced a supply agreement with General Motors for XCarb^® recycled and renewably produced steel, offering significantly reduced CO2 emissions compared to much of the automotive steel available in North America. ArcelorMittal North America’s XCarb^® recycled and renewably produced steel is made via the EAF route using renewable energy and contains a stated minimum of 70% scrap, with up to 90% scrap, and does not use carbon offsets to achieve the reduced carbon intensity.
  

Analysis of results for the six months ended June 30, 2023 versus results for the six months ended June 30, 2022

Total steel shipments for 1H 2023 were 28.7 million metric tonnes (Mt), a decrease of -3.6% as compared to 29.7Mt in 1H 2022. Excluding the shipments of ArcelorMittal Pecém⁶ (consolidated from March 9, 2023) and Ukraine, steel shipments in 1H 2023 declined by -5.5% as compared to 1H 2022 (impacted by outages in Europe and lower demand in Brazil, including exports).

Sales for 1H 2023 decreased by -15.6% to $37.1 billion as compared with $44.0 billion for 1H 2022, primarily due to lower steel shipments and -14.7% lower average steel selling prices (prices in the comparison period benefited from restocking demand, following the outbreak of war in Ukraine).

Depreciation was stable at $1.3 billion for 1H 2023 as compared to 1H 2022. The Company continues to expect 12M 2023 depreciation of approximately $2.6 billion.

Operating income for 1H 2023 of $3.1 billion was lower as compared to $8.9 billion in 1H 2022 primarily driven by negative price-cost effect (predominantly on account of lower average steel selling prices, with prices in the comparison period benefiting from restocking demand) and lower steel shipments.

Income from associates, joint ventures and other investments for 1H 2023 was lower at $711 million as compared to $1.1 billion for 1H 2022 primarily due to lower contributions from AMNS Calvert and European investees (which experienced similar dynamics to those discussed above). 1H 2022 included the annual dividend from Erdemir of $117 million with no such dividend received in 1H 2023.

Net interest expense in 1H 2023 of $111 million was broadly stable as compared to $104 million in 1H 2022 reflecting the issuance, at the end of 3Q 2022 and in 4Q 2022, of new notes bearing higher interest rates offset in part by higher interest income.

Foreign exchange and other net financing loss were $250 million for 1H 2023 as compared to loss of $323 million for 1H 2022. Foreign exchange loss for 1H 2023 was $29 million as compared to a loss of $198 million in 1H 2022.

ArcelorMittal recorded an income tax expense of $420 million for 1H 2023 (including $178 million deferred tax benefit) as compared to $1,381 million for 1H 2022 (including $214 million deferred tax benefit) reflecting overall lower taxable profits.

ArcelorMittal’s net income for 1H 2023 was $2,956 million as compared to $8,048 million for 1H 2022.

ArcelorMittal’s basic earnings per common share for 1H 2023 was $3.47, as compared to $8.53 for 1H 2022.

Analysis of results for 2Q 2023 versus 1Q 2023 and 2Q 2022

Total steel shipments in 2Q 2023 were -1.7% lower at 14.2Mt as compared with 14.5Mt for 1Q 2023. Steel shipments in NAFTA decreased by -8.4% (due to lower slab shipments sourced from Group companies (mainly Brazil) sold to the Calvert JV and lower Mexico shipments) and by -6.2% in Europe (following outages in France and Spain), offset in part by a +22.0% increase in Brazil (mainly due to the ArcelorMittal Pecém acquisition). Excluding the impact of ArcelorMittal Pecém, steel shipments in 2Q 2023 were -5.4% lower as compared to 1Q 2023.

Total steel shipments in 2Q 2023 were -1.2% lower as compared with 14.4Mt for 2Q 2022 primarily due to a -8.7% decline in Europe offset in part by higher shipments in NAFTA (+6.2%, mainly higher sourced slabs for Calvert), Brazil (+19.3%, due to the consolidation of ArcelorMittal Pecém as from March 9, 2023) and a +22.9% increase in ACIS (2Q 2022 had been more severely impacted by the war in Ukraine and there had been labor actions and logistics issues in South Africa). Excluding the impacts of ArcelorMittal Pecém and Ukraine, steel shipments in 2Q 2023 were -7.0% lower as compared to 2Q 2022.

Sales in 2Q 2023 were stable at $18.6 billion as compared to $18.5 billion in 1Q 2023 and lower than $22.1 billion for 2Q 2022. As compared to 1Q 2023, the sales were impacted by lower steel shipment volumes (as discussed above) offset in part by higher average steel selling prices (+4.2%). Sales in 2Q 2023 were -16.0% lower as compared to 2Q 2022 primarily due to lower average steel selling prices (-16.1%) and lower steel shipments (-1.2%).

Depreciation for 2Q 2023 was higher at $680 million as compared to $630 million for 1Q 2023 (due to the full quarter contribution of ArcelorMittal Pecém) and $669 million in 2Q 2022.

Operating income for 2Q 2023 was $1.9 billion as compared to $1.2 billion in 1Q 2023 and $4.5 billion in 2Q 2022. The improvement in operating income compared to 1Q 2023 reflected improving steel spreads (and the benefit of lagged prices) and lower costs (including energy), offset in part by lower steel shipments.

Income from associates, joint ventures and other investments for 2Q 2023 was $393 million as compared to $318 million in 1Q 2023 and $578 million in 2Q 2022. 2Q 2023 results improved as compared to 1Q 2023 with a higher contribution from AMNS India (including $0.1 billion income arising from recognition of a deferred tax asset). 2Q 2022 included a higher contribution from European investees.

Net interest expense in 2Q 2023 was $47 million as compared to $64 million in 1Q 2023 and $53 million in 2Q 2022, with the benefit of higher interest income more than offsetting the impact of higher interest rates.

Foreign exchange and other net financing loss in 2Q 2023 was $133 million as compared to a loss of $117 million in 1Q 2023 and a loss of $183 million in 2Q 2022. 2Q 2023 included a foreign exchange loss of $60 million as compared to a foreign exchange gain of $31 million in 1Q 2023 and a loss of $152 million in 2Q 2022.

ArcelorMittal recorded an income tax expense of $231 million (including deferred tax benefit of $85 million) in 2Q 2023, as compared to an income tax expense of $189 million (including deferred tax benefit of $93 million) in 1Q 2023 and an income tax expense of $826 million (including deferred tax benefit of $74 million) in 2Q 2022.

ArcelorMittal recorded net income in 2Q 2023 of $1,860 million as compared to $1,096 million in 1Q 2023 and $3,923 million for 2Q 2022.

ArcelorMittal's basic earnings per common share for 2Q 2023 was higher at $2.21 as compared to $1.28 in 1Q 2023 and lower compared to $4.25 in 2Q 2022.

Analysis of segment operations

NAFTA

* NAFTA steel shipments include slabs sourced by the segment from Group companies (mainly the Brazil segment) and sold to the Calvert JV (eliminated in the Group consolidation). These shipments can vary between periods due to slab sourcing mix and timing of vessels. 2Q'23 360kt; 1Q'23 474kt; 2Q'22 183kt; 1H'23 834kt and 1H'22 660kt

NAFTA segment crude steel production increased by +3.1% to 2.2Mt in 2Q 2023, as compared to 1Q 2023, and increased by +9.8% as compared to 2Q 2022 which had been impacted by labor actions in Mexico and maintenance in Canada.

Steel shipments in 2Q 2023 declined by 0.2Mt to 2.6Mt as compared to 2.8Mt in 1Q 2023 primarily due to lower slab shipments sourced from Group companies (mainly the Brazil segment and sold to the Calvert JV) and lower Mexico shipments. Steel shipments in 2Q 2023 were +6.2% higher than 2Q 2022.

Sales in 2Q 2023 increased by +4.4% to $3.5 billion, as compared to $3.4 billion in 1Q 2023 primarily on account of higher average steel selling prices (+12.3%) offset in part by lower steel shipments. Sales declined by -4.2% in 2Q 2023 as compared to 2Q 2022 primarily on account of lower average steel selling prices (-15.3%) offset in part by higher steel shipment volumes (+6.2%), and the impact of the consolidation of ArcelorMittal Texas HBI.

Operating income in 2Q 2023 increased by +45.4% to $662 million as compared to $455 million in 1Q 2023 and was -18.9% lower as compared to $817 million in 2Q 2022.

EBITDA in 2Q 2023 of $789 million was +35.8% higher as compared to $581 million in 1Q 2023, primarily due to a positive price-cost effect. EBITDA in 2Q 2023 was -13.3% lower as compared to $910 million in 2Q 2022 mainly due to a negative price-cost effect offset in part by higher steel shipments (+6.2%) and contribution from ArcelorMittal Texas HBI.

Brazil⁶

Brazil segment crude steel production increased by +22.3% to 3.7Mt in 2Q 2023 as compared to 3.1Mt in 1Q 2023, primarily due to the consolidation of ArcelorMittal Pecém as from March 9, 2023. On a scope adjusted basis excluding the impact of ArcelorMittal Pecém, 2Q 2023 crude production was higher by +6.0% as compared to 1Q 2023 and lower by -3.3% as compared to 3.1Mt in 2Q 2022.

Steel shipments in 2Q 2023 increased by +22.0% to 3.6Mt as compared to 2.9Mt in 1Q 2023 and +19.3% higher as compared to 3.0Mt in 2Q 2022 primarily due to the impact of ArcelorMittal Pecém. On a scope adjusted basis (i.e. excluding ArcelorMittal Pecém), steel shipments in 2Q 2023 increased by +4.5% as compared to 1Q 2023, mainly due to exports, and decreased by -5.4% as compared to 2Q 2022, due to lower demand.

Sales in 2Q 2023 increased by +24.7% to $3.8 billion as compared to $3.1 billion in 1Q 2023, primarily due to a +22.0% increase in steel shipments (including ArcelorMittal Pecém). Sales in 2Q 2023 were -4.0% lower than $4.0 billion at 2Q 2022 primarily on account of the -18.9% decline in average steel selling prices offset in part by higher steel shipments.

Operating income in 2Q 2023 of $553 million was +71.0% higher as compared to $323 million in 1Q 2023 and -53.9% lower than $1,201 million in 2Q 2022.

EBITDA in 2Q 2023 increased by +66.5% to $658 million as compared to $395 million in 1Q 2023, due to higher steel shipments, a positive price-cost effect and contribution from ArcelorMittal Pecém. EBITDA in 2Q 2023 was -48.2% lower than $1,272 million in 2Q 2022 primarily due to negative price-cost effect.

Europe

Europe segment crude steel production decreased by -10.8% to 6.9Mt in 2Q 2023 as compared to 7.8Mt in 1Q 2023 primarily due to outages of blast furnaces, in Gijon, Spain (BF A) and Dunkirk, France (BF4) in late March 2023. These blast furnaces were restarted in mid-July 2023. Crude steel production was -16.0% lower as compared to 8.3Mt in 2Q 2022.

Steel shipments decreased by -6.2% to 7.3Mt in 2Q 2023 as compared to 7.8Mt in 1Q 2023 primarily due to lower production as discussed above. Shipments declined by -8.7% as compared to 8.0Mt in 2Q 2022 primarily due to lower production as discussed above.

Sales in 2Q 2023 declined by -3.5% to $10.5 billion, as compared to $10.9 billion in 1Q 2023, as the +4.0% increase in average steel selling prices was offset in part by a -6.2% decline in steel shipments. Sales declined by -21.8% as compared to $13.4 billion in 2Q 2022 primarily due to lower steel shipments (-8.7%) and lower average steel selling prices (-15.0%).

Operating income in 2Q 2023 was $556 million as compared to $377 million in 1Q 2023 and $2,063 million in 2Q 2022.

EBITDA in 2Q 2023 of $865 million increased by +28.9% as compared to $671 million in 1Q 2023, mainly due to an increase in average steel selling price and lower energy costs, offset in part by lower steel shipments. EBITDA in 2Q 2023 decreased by -63.8% as compared to $2,389 million in 2Q 2022 due to a negative price-cost effect and lower shipments (-8.7%), offset partly by lower energy costs.

ACIS

ACIS segment crude steel production in 2Q 2023 was 1.8Mt, an increase of +19.2% as compared to 1Q 2023 and +40.2% higher than 2Q 2022 primarily due to higher production in Ukraine and South Africa.

Steel shipments in 2Q 2023 were stable at 1.5Mt as compared to 1Q 2023 and were +22.9% higher as compared to 1.2Mt in 2Q 2022 (impacted by the Ukraine war).

Sales in 2Q 2023 decreased by -3.9%% to $1.4 billion as compared to 1Q 2023, primarily due to lower average steel selling prices (-1.8%).

Operating loss in 2Q 2023 totalled $64 million as compared to an operating loss in 1Q 2023 of $176 million and an operating income of $43 million in 2Q 2022.

EBITDA totalled $9 million in 2Q 2023 as compared to EBITDA loss of $104 million in 1Q 2023 primarily due to lower costs. EBITDA of $9 million in 2Q 2023 declined as compared to $149 million in 2Q 2022 primarily due to lower average steel selling prices (-21.4%) offset in part by higher steel shipments (+22.9%).

Mining

Note: Mining segment comprises iron ore operations of ArcelorMittal Mines Canada and ArcelorMittal Liberia.

Iron ore production in 2Q 2023 was -4.6% lower at 6.4Mt as compared to 6.7Mt in 1Q 2023 (impacted by a 10-day strike in Liberia) and was -12.3% lower than 7.3Mt in 2Q 2022, primarily impacted by unplanned maintenance in ArcelorMittal Mines Canada (AMMC)⁷.

Iron ore shipments were -12.8% lower at 6.6Mt in 2Q 2023 as compared to 7.4Mt in 1Q 2023. 1Q 2023 iron ore shipments had benefited from the recovery of port operations in Canada impacted by severe storms during December 2022, whilst 2Q 2023 was impacted by lower production in AMMC and Liberia (as discussed above). 2Q 2023 iron ore shipments were -13.7% lower as compared to 7.5Mt in 2Q 2022, primarily due to the lower production at AMMC as mentioned above.

Operating income in 2Q 2023 was lower by -39.8% at $225 million as compared to $374 million in 1Q 2023 and lower by -51.5% as compared to $463 million in 2Q 2022.

EBITDA in 2Q 2023 of $281 million was lower as compared to $430 million in 1Q 2023, with the effect of lower iron ore reference prices (-11.8%), lower shipments (-12.8%) and higher costs including higher freight costs. EBITDA in 2Q 2023 was lower as compared to $527 million in 2Q 2022, primarily due to lower iron ore reference prices (-19.9%), lower iron ore shipments (-13.7%) and lower quality premia partially offset by lower freight costs.

Joint ventures


ArcelorMittal has investments in various joint ventures and associate entities globally. The Company considers the Calvert (50% equity interest) and AMNS India (60% equity interest) joint ventures to be of particular strategic importance, warranting more detailed disclosures to improve the understanding of their operational performance and value to the Company.


Calvert

* Production: all production of the hot strip mill including processing of slabs on a hire work basis for ArcelorMittal group entities and third parties, including stainless steel slabs.

** Shipments: including shipments of finished products processed on a hire work basis for ArcelorMittal group entities and third parties, including stainless steel products.

*** EBITDA of Calvert presented here on a 100% basis as a stand-alone business and in accordance with the Company's policy, applying the weighted average method of accounting for inventory.

Calvert’s hot strip mill (“HSM”) production during 2Q 2023 decreased by -2.3% to 1.2Mt, as compared to 1Q 2023, and increased by +6.3% as compared to 1.1Mt in 2Q 2022.

Steel shipments in 2Q 2023 declined by -1.1% as compared to 1Q 2023 and higher by +3.0% as compared to 2Q 2022.

EBITDA*** during 2Q 2023 of $142 million as compared to $37 million in 1Q 2023 was primarily due to higher sales prices.

AMNS India

Crude steel production in 2Q 2023 was stable at 1.8Mt as compared to 1Q 2023 (following a 85-day Corex furnace shutdown offset by higher production from DRI route) and +7.4% higher as compared to 2Q 2022.

Steel shipments in 2Q 2023 were -8.3% lower at 1.7Mt as compared 1.8Mt in 1Q 2023 (primarily due to planned maintenance of HSM) and +11.1% higher as compared to 1.5Mt in 2Q 2022.

EBITDA during 2Q 2023 of $563 million was higher as compared to $341 million in 1Q 2023, primarily due to higher average steel selling prices and lower costs (including energy costs) offset in part by lower steel shipments. EBITDA during 2Q 2023 of $563 million was higher as compared to $365 million in 2Q 2022, due to higher steels shipments and lower costs.

Liquidity and Capital Resources

Net cash provided by operating activities in 2Q 2023 was $2,087 million as compared to $949 million in 1Q 2023 and $2,554 million in 2Q 2022. Net cash provided by operating activities in 2Q 2023 includes a working capital release of $178 million as compared to investments of $775 million in 1Q 2023 and $1,008 million in 2Q 2022. The Company expects that working capital will follow the normal seasonal patterns over the remainder of 2023 and continues to expect an overall working capital release for the full year.

Net cash used in investing activities in 2Q 2023 was $1,015 million, which included capex of $1,060 million (as compared with $938 million in 1Q 2023), in line with the guidance for the full year 2023 of $4.5-5.0 billion^8,15.

The previously announced strategic capex envelope has now been revised to reflect change of scope and inflation to the Liberia and Monlevade projects whilst the Ukraine pellet plant project previously on hold has been removed. The strategic envelope has $3.4 billion outstanding to be completed by 2026.¹⁴ (See Appendix 2b: Capital Expenditures for details).

Net cash inflow from other investing activities in 2Q 2023 of $45 million mainly related to sale of non-core assets. Net cash used in other investing activities in 1Q 2023 of $1,931 million included the following main items: $2.2 billion related to the acquisition of ArcelorMittal Pecém, other acquisitions including Riwald Recycling, Italpannelli Deutschland and investment in Boston Metal (part of XCarb™ innovation fund)⁹ and payment of $0.2 billion to Votorantim¹⁰ in Brazil, offset in part by $0.6 billion cash received from the partial sale of Erdemir shares¹¹ (to fund the partial repurchase of mandatorily convertible bonds (“MCBs”)).

Net cash used in financing activities in 2Q 2023 was $1,490 million which included a $812 million note repayment at maturity, ArcelorMittal share buybacks totalling $227 million ($149 million for 5.7 million shares purchased during 2Q 2023 and $78 million related to 1Q 2023 purchases settled early April 2023). Net cash used in financing activities in 1Q 2023 was $1,349 million which included euro-denominated note repayment of $395 million, $53 million dividends mainly paid to the minority shareholders of AMMC, $477 million related to ArcelorMittal share buybacks (19.1 million shares for a total value of $555 million of which $78 million settled early April 2023) and $340 million related to the partial repurchase of the MCBs using proceeds from the sale of Erdemir shares¹¹ (as discussed above).

During 2Q 2023, the Company paid the first installment of its $0.44/sh base dividend to shareholders for $0.22/share in June 2023 ($185 million) with the second installment due in December 2023 and paid $12 million to minority shareholders.

As of June 30, 2023, the Company had liquidity of $11.4 billion consisting of cash and cash equivalents of $5.9 billion and $5.5 billion of available credit lines as compared to liquidity of $11.8 billion in March 31, 2023 (consisting of cash and cash equivalents of $6.3 billion and $5.5 billion of available credit lines¹²). As of June 30, 2023, the average debt maturity was 6.2 years.

Outlook
Based on year-to-date developments and the current economic outlook, ArcelorMittal forecasts global ex-China apparent steel consumption (“ASC”) to grow by between +1.0% to 2.0% (previous estimate of +2.0% to +3.0%) in 2023 as compared to 2022 reflecting the latest estimates by region:

• In the US, as real demand growth is expected to remain lackluster due to the lagged impact of interest rate rises, apparent steel consumption in 2023 is now expected to decline by -2.0% to 0.0% (versus previous guidance of +1.5% to +3.5% growth). US ASC forecasts have been moderated to reflect weakness in long products and pipes & tubes whilst apparent demand for flat products is still forecast to grow;

• In Europe, whilst the Company continues to assume a marginal decline in real demand in 2023, apparent demand is expected to moderate to -0.5% to +1.5% in 2023 (versus previous guidance of +0.5% to +2.5%). The marginal change to European ASC forecasts is largely due to a decline in long products demand forecast due to weak construction activity, whilst apparent demand for flat products is still expected to increase;

• In Brazil, due to the ongoing high interest rate environment, the Company has moderated its real steel consumption estimate in 2023 and now forecasts an ASC growth of 0.0% to +2.0% (revised down from the previous guidance of +3.0% to +5.0%);

• In the CIS region (which includes Commonwealth of Independent States and Ukraine), the Company forecasts some improvement in steel consumption in Ukraine, and now expects ASC to grow 0.0% to +2.0% (revised up from the previous guidance of -2.0% to 0.0%) for the region;

• In India, the Company continues expects another strong year with apparent steel consumption growth in the range of +6.0% to +8.0% (unchanged from the previous guidance of +6.0% to +8.0%); and

• In China, whilst economic growth is expected to be broadly stable in 2023, steel consumption is expected to stabilize in 2023 to -1.0% to +1.0% (unchanged from the previous guidance) with potential upside dependent on government infrastructure stimulus and production discipline impacts.

Recent developments

• On June 16, 2023, S&P upgraded its outlook on ArcelorMittal to positive on expected strengthening of the business and affirmed the BBB- investment grade rating.

• On May 19, 2023, ArcelorMittal announced that upon mandatory conversion of the 24,290,025 outstanding 5.50% Mandatorily Convertible Subordinated Notes due May 18, 2023, it delivered to holders a total of 57,057,991 shares held in treasury on May 19, 2023.

• On May 5, 2023, following publication of the first quarter 2023 results press release dated May 4, 2023, ArcelorMittal announced the commencement of a new buyback program of up to 85 million shares (the "Program") under the authorization given by the annual general meeting of shareholders of May 2, 2023, to be completed by May 2025. The actual amount of shares that will be repurchased pursuant to this new Program will depend on the level of post-dividend free cash flow generated over the period (the Company’s defined policy is to return a minimum of 50% of post-dividend annual FCF), the continued authorization by shareholders and market conditions. The shares acquired under the Program are intended: i) primarily to reduce ArcelorMittal’s share capital; ii) to meet ArcelorMittal’s obligations arising from employee share programs; and/or iii) to meet ArcelorMittal’s obligations under securities exchangeable into equity securities.
  

ArcelorMittal Condensed Consolidated Statements of Financial Position¹

ArcelorMittal Condensed Consolidated Statements of Operations¹

ArcelorMittal Condensed Consolidated Statements of Cash flows¹

Appendix 1: Product shipments by region¹

Note: “Others and eliminations” are not presented in the table

Appendix 2a: Capital expenditures¹

Appendix 2b: Capital expenditure projects

Completed projects

Ongoing projects

a) Investment to replace #5 Hot-Dip Galvanizing Line Galvanneal coating capability with 160kt/year Aluminum Silicon (AluSi^®) capability for the production of ArcelorMittal’s patented Usibor^® Press Hardenable Steel for automotive structural and safety components. With the investment, ArcelorMittal Dofasco becomes the only Canadian producer of AluSi^® coated Usibor^®. This investment complements additional strategic North America developments, including a new EAF and caster at Calvert in the US and a new hot strip mill in Mexico, and will allow to capitalize on increasing Auto Aluminized PHS demand in North America. The project was completed in 3Q 2022 and is estimated to add $40 million of EBITDA post ramp up (estimated by 2025).

b) In February 2021, ArcelorMittal announced the resumption of the Vega Do Sul expansion to provide an additional 700kt of cold-rolled annealed and galvanized capacity to serve the growing domestic market. The ~$0.35 billion investment programme to increase rolling capacity with construction of a new continuous annealing line and CGL combiline (and the option to add a ca. 100kt organic coating line to serve construction and appliance segments) will upon completion strengthen ArcelorMittal’s position in the fast growing automotive and industry markets through Advanced High Strength Steel products. The project is expected to be completed in 4Q 2023 and estimated to add >$0.1 billion of EBITDA on full completion and post ramp up.

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