ArcelorMittal(MT) - 2025 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Second quarter EBITDA increased to $135 per ton, indicating structural improvements and higher margins due to asset optimization and growth strategy [5][10] - Compared to the 2024 base, future normalized EBITDA is expected to be $2.1 billion, with one-third of this to be captured in the current financial year [6] Business Line Data and Key Metrics Changes - Calvert achieved a new shipment record in the second quarter, 10% higher than the first quarter and 10% above the same period last year [7] - Liberia posted record volume in the second quarter, with guidance for 10 million tonnes of shipments for the year [30] Market Data and Key Metrics Changes - The North American segment is expected to see marginally higher tariff costs, but this will be offset by the impacts of Calvert consolidation [18] - In Europe, the market is transitioning to a more favorable structure with the promise of trade defense mechanisms and carbon border adjustments [9][10] Company Strategy and Development Direction - Full ownership of Calvert is viewed as a positive development, enhancing the North American franchise [7] - The company is investing in a new world-class non-grain oriented electrical steel facility in Alabama, with a billion-dollar investment expected over the next few years [8] - The company aims to maintain growth momentum through strategic projects and an optimized asset portfolio [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining growth momentum and highlighted the importance of strategic projects in supporting EBITDA [6][10] - The company is optimistic about the European market's potential, contingent on the European Commission's actions regarding trade defense mechanisms [9][10] Other Important Information - The company has bought back 38% of its equity over the past four and a half years, enhancing shareholder value [11] - The company is focused on returning capital to shareholders while continuing to invest in growth [122] Q&A Session Summary Question: Can you walk us through the different moving parts for EBITDA in Q3 2025? - Management discussed operational issues in Mexico impacting production, resulting in $40 million losses in Q2, but expected stable shipments moving forward [14][15][17] Question: How do you plan to mitigate the risk of tariffs on slab imports? - Management highlighted a new slab supply agreement with US Steel and indicated that tariff impacts have been largely captured in Q2 results [20][21] Question: What is the expected contribution margin from Liberia's increased shipments? - Management confirmed guidance for Liberia at 10 million tonnes for the year, with expected profitability increases as new products are introduced [30][31] Question: What is the company's strategy regarding M&A in the US? - Management stated that the US remains a key market, with ongoing plans for growth, but did not comment on specific M&A targets [65] Question: How does the company view the potential for capacity restructuring in China? - Management acknowledged the need for capacity reform in China and expressed cautious optimism based on recent statements from Chinese authorities [100][101] Question: What are the expectations for the European market regarding safeguards? - Management indicated that the industry is advocating for limits on imports to boost domestic utilization rates and investments [54][56]