ArcelorMittal(US:MT)2024-02-07 16:00Financial Performance - FY 2023 EBITDA was $7.6 billion, with an EBITDA per tonne of $136, reflecting structural improvements to profitability [2] - FY 2023 free cash flow was $2.9 billion, with Q4 2023 free cash flow of $1.8 billion [2] - Net income for FY 2023 was $0.9 billion, impacted by a $2.4 billion loss from the disposal of Kazakhstan operations and a $1.4 billion impairment of Acciaierie d'Italia [2] - Sales for FY 2023 decreased by 14.5% to $68.3 billion compared to $79.8 billion in FY 2022, primarily due to a 13.5% decline in average steel selling prices [14] - The company recorded an operating loss of $2.0 billion in Q4 2023, compared to an operating income of $1.2 billion in Q3 2023 [22] - ArcelorMittal reported a net loss of $2,966 million in 4Q 2023, compared to a net income of $929 million in 3Q 2023 [24] - The company reported a net loss attributable to equity holders of $2.966 billion for Q4 2023, compared to a net income of $261 million in Q4 2022 [54] - EBITDA for Q4 2023 was $1.266 billion, with an EBITDA margin of 8.7%, down from 11.2% in Q3 2023 [54] - Free cash flow for the twelve months ended December 31, 2023, was $2.870 billion, down from $6.404 billion in 2022 [56] - Adjusted net income for 12M 2023 was $4.87 billion, with adjusted basic EPS of $5.78 per share [64] Shareholder Returns - The company plans to increase the annual base dividend from $0.44 per share in FY 2023 to $0.50 per share, subject to shareholder approval [3] - The company repurchased 45.4 million shares in 2023, reducing fully diluted shares outstanding by 33% since September 2020 [2] - ArcelorMittal repurchased 45.4 million shares during 12M 2023, including 26.3 million shares from the current buyback program [11] Production and Sales - Crude steel production for FY 2023 was 58.1 million tonnes, a slight decrease from 59.0 million tonnes in FY 2022 [4] - Product shipments of flat steel increased to 2.028 million tons in Q4 2023, compared to 1.767 million tons in Q4 2022 [57] - Sales in the NAFTA segment decreased by 7.7% to $2.9 billion in 4Q 2023, primarily due to a 9.1% decline in average steel selling prices [26] - Operating income in the Brazil segment fell by 58.6% to $171 million in 4Q 2023, driven by a negative price-cost effect and currency devaluation [29] - EBITDA in the Europe segment decreased by 28.9% to $336 million in 4Q 2023, mainly due to a negative price-cost effect [34] - The ACIS segment reported an operating loss of $2,689 million in 4Q 2023, significantly impacted by impairment charges and the disposal of Kazakhstan operations [39] - Iron ore production in the Mining segment was 6.2 million tons in 4Q 2023, a decrease from 6.7 million tons in 3Q 2023 [40] - AMNS India achieved record crude steel production of 1,964 kt in 4Q 2023, with a run-rate reaching 8.1 million tons [45] Capital Expenditures and Investments - FY 2023 capital expenditures totaled $4.6 billion, with $1.4 billion allocated to strategic growth projects [60] - Capex for 2024 is expected to remain within the $4.5-$5.0 billion range, with $1.4-$1.5 billion allocated for strategic growth [48] - The company plans to increase production capacity at the Serra Azul mine in Brazil to 4.5 million tonnes per year by 2H 2024 [59] - A renewable energy project in Andhra Pradesh, India, is expected to have a nominal capacity of 975 MW, with an investment of $70 million [59] - Decarbonization capital expenditures are projected to increase to between $0.3 billion and $0.4 billion, up from $0.2 billion in 2023 [60] Future Outlook - Strategic investments are expected to add approximately $1.8 billion to EBITDA growth by the end of 2026, with new projects commencing in 2024 [3] - The company anticipates a 3.0% to 4.0% growth in apparent steel consumption in 2024 compared to 2023 [47] - Apparent steel consumption in the US is expected to grow by +1.5% to +3.5% in 2024, while Europe anticipates growth of +2.0% to +4.0% [51] - In India, apparent steel consumption is projected to grow by +6.5% to +8.5%, indicating a strong market outlook [51] Safety and Sustainability - The Lost Time Injury Frequency rate for FY 2023 was 0.92, an increase from 0.70 in FY 2022, reflecting safety challenges [2] - The company plans to report a new segment for "Sustainable Solutions," focusing on high-growth, niche businesses supporting climate action [52] - ArcelorMittal's new XCarb® initiatives focus on achieving carbon neutrality in steel production through various green innovation projects [12] Debt and Financial Position - Total gross debt as of December 31, 2023, was $10.7 billion, with a net debt of $2.9 billion [63] - The net debt to last twelve months (LTM) EBITDA ratio improved to 0.4 as of December 31, 2023 [63] - The company's total assets as of December 31, 2023, were $93.917 billion, a slight decrease from $94.547 billion in 2022 [53] - The company’s cash and cash equivalents increased to $7.783 billion as of December 31, 2023, from $6.289 billion at the end of Q3 2023 [53] Impairments and Acquisitions - The company recorded an impairment charge of $1.4 billion for associates, joint ventures, and other investments in 12M 2023 [16] - The company completed the acquisition of Companhia Siderúrgica do Pecém in Brazil for an enterprise value of approximately $2.2 billion, enhancing operational and financial synergies [82] Reporting Changes - The company will report EBITDA including its share of joint ventures and associates' net income starting January 1, 2024, to better reflect growth exposures [49] - The company will implement a new segmentation from January 1, 2024, to better reflect its business profile and market exposures [15]