ArcelorMittal(US:MT)2023-03-07 16:00Financial Performance - ArcelorMittal reported sales of $79.8 billion for the year ended December 31, 2022, a 4.3% increase from $76.6 billion in 2021, driven by a 16.6% rise in average steel selling prices despite an 11.2% decrease in steel shipments [906]. - Operating income for the year ended December 31, 2022 was $10.3 billion, down from $17.0 billion in 2021, primarily due to higher coal and energy costs and lower steel shipments [914]. - ArcelorMittal's net income attributable to equity holders was $9.3 billion for the year ended December 31, 2022, down from $15.0 billion in 2021 [989]. - Net income attributable to non-controlling interests decreased to $236 million in 2022 from $609 million in 2021, primarily due to decreased operating performance [987]. - The statutory income tax expense totaled $2.8 billion in 2022, compared to $4.1 billion in 2021 [986]. Sales and Shipments - Steel shipments totaled 55.9 million tonnes in 2022, down 11.2% from 62.9 million tonnes in 2021, with a comparable decrease of 4.5% when excluding ArcelorMittal Italia and Ukraine shipments [899]. - The Mining segment reported sales of $3.4 billion in 2022, down from $4.0 billion in 2021, with operating income of $1.5 billion compared to $2.4 billion in the previous year [897]. - The Europe segment generated sales of $47.3 billion in 2022, an increase from $43.3 billion in 2021, but with a decrease in operating income from $5.7 billion to $4.3 billion [897]. - Sales in the NAFTA segment were $13.8 billion for the year ended December 31, 2022, representing a 9.9% increase compared to 2021 [925]. - Sales in the Brazil segment increased 6.8% to $13.7 billion for the year ended December 31, 2022, primarily due to 8.1% higher average steel selling prices [938]. Average Steel Selling Prices - Average steel selling prices increased by 16.6% in 2022 compared to 2021, with a notable 37.7% increase in the first half of 2022, followed by a 1.9% decrease in the second half [904]. - Average steel selling prices in the NAFTA segment increased by 7.8% for the year ended December 31, 2022 compared to 2021, with a 37.8% increase in the first half of 2022 [923]. - Average steel selling prices increased 8.1% for the year ended December 31, 2022, compared to the year ended December 31, 2021 [936]. - Average steel selling prices in the Europe segment increased 20.8% for the year ended December 31, 2022, compared to the year ended December 31, 2021 [945]. Costs and Expenses - Cost of sales for 2022 was $67.3 billion, up from $57.3 billion in 2021, primarily due to higher raw material and energy costs, including a $1.0 billion impairment charge related to operations in Ukraine [908]. - Energy costs represented 14% of cost of sales in 2022, up from 12% in 2021, with total energy costs amounting to $9.6 billion [909]. - SG&A expenses were $2.3 billion for the year ended December 31, 2022, unchanged from 2021, but as a percentage of sales decreased to 2.8% from 2.9% [913]. - Depreciation for the year ended December 31, 2022 was $2.6 billion, slightly higher than $2.5 billion in 2021 [912]. Segment Performance - The ACIS segment experienced a significant decline in sales, reporting $6.4 billion in 2022, down from $9.9 billion in 2021, with an operating loss of $930 million [897]. - Crude steel production for the Brazil segment decreased by 4.3% to 11.9 million tonnes for the year ended December 31, 2022 compared to 12.4 million tonnes in 2021 [930]. - Operating income for the Brazil segment was $2.8 billion for the year ended December 31, 2022, representing a 26.9% decrease compared to the year ended December 31, 2021 [941]. - Operating income for the Europe segment was $4.3 billion for the year ended December 31, 2022, compared to $5.7 billion for the year ended December 31, 2021 [945]. - Operating loss for the ACIS segment was $0.9 billion for the year ended December 31, 2022, compared to an operating income of $2.7 billion in 2021 [957]. Debt and Cash Flow - As of December 31, 2022, ArcelorMittal's total debt was $11.7 billion, an increase from $8.4 billion in 2021 [991]. - Cash and cash equivalents amounted to $9.4 billion as of December 31, 2022, compared to $4.4 billion in 2021 [991]. - The company had a net debt of $2.2 billion as of December 31, 2022, down from $4.0 billion in 2021 [991]. - ArcelorMittal's gearing ratio (net debt divided by total equity) was 4% as of December 31, 2022, down from 8% in 2021 [991]. - The company reported net cash used in investing activities of $4.5 billion for the year ended December 31, 2022, compared to $0.3 billion in 2021 [15]. Capital Expenditures and Investments - Capital expenditures for 2022 were $3.5 billion, up from $3.0 billion in 2021 [15]. - The company expects 2023 capital expenditures to increase to a range of $4.5 to $5.0 billion, reflecting project timing and market uncertainty [1016]. - Capital expenditures related to decarbonization projects are projected to rise to $0.4 billion in 2023, up from $0.2 billion in 2022, primarily due to the ArcelorMittal Dofasco DRI/EAF project [1016]. - The strategic pipeline for 2021-2024 has increased by $0.5 billion to $4.2 billion, including a new production unit for electrical steels in France [1016]. Future Outlook - In 2023, ArcelorMittal expects steel shipments to grow by approximately 5% compared to 2022 [1047]. - The company anticipates apparent demand recovery in 2023, with global apparent steel consumption (ASC) expected to increase by 2.0% to 3.0% after a contraction of 2.0% to 2.5% in 2022 [1047]. - In the US, ASC is projected to grow by 1.5% to 3.5% in 2023, despite lackluster real demand growth due to interest rate impacts [1048]. - In Europe, apparent demand is expected to recover by 0.5% to 2.5% in 2023 following a contraction of 7.0% to 7.5% in 2022 [1048]. - In India, ASC is expected to grow between 6.0% to 8.0% in 2023, indicating strong demand [1048]. Leadership and Governance - ArcelorMittal's management team includes family members of Lakshmi N. Mittal, ensuring continuity in leadership and strategic vision [1060][1062]. - The board of directors includes experienced professionals from diverse backgrounds, enhancing corporate governance and strategic oversight [1069][1071]. - ArcelorMittal's leadership is actively involved in various global councils and organizations, reflecting its commitment to industry standards and practices [1060][1062]. - The company emphasizes sustainability and corporate governance in its strategic initiatives, as highlighted by its board composition [1076]. Sustainability and Corporate Responsibility - ArcelorMittal's CEO Aditya Mittal emphasizes climate change as the top strategic issue, aiming to lead the decarbonization of the steel industry [1062]. - The company has a strong commitment to philanthropy, particularly in child health and education, as demonstrated by the contributions of its executives [1062].