ArcelorMittal(MT) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The third quarter EBITDA per ton was $111, which is 25% above the historical average margin, indicating structural improvements in the company's financial performance [3][4] - The underlying business generated approximately $0.5 billion in free cash flow for the first nine months, despite investing close to $1 billion in strategic growth projects [4][5] - The company expects to capture $0.7 billion in structural EBITDA improvement this year, with a medium-term impact of $2.1 billion remaining unchanged [3][4] Business Line Data and Key Metrics Changes - The company reported record levels of shipments at its Calvert facility, contributing positively to North American operations [20] - In Europe, the expectation is that imports will decrease by about 40%, allowing the company to capture a larger market share [14] Market Data and Key Metrics Changes - The outlook for the business has improved compared to three months ago, with new trade tools proposed by the European Commission expected to support a more sustainable steel sector [4][5] - The demand in Europe is currently moving sideways, with stable order books across the group [28][50] Company Strategy and Development Direction - The company is focused on enabling the energy transition by supplying steel for new energy and mobility systems, as well as investing in high-quality electrical steels [5] - The company aims to maintain a diversified asset base across geographies and markets, with a clear capital return policy that has allowed for a 16% compound growth in dividends over the past five years [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business outlook, citing improvements in trade conditions and the potential for higher capacity utilization in Europe [4][32] - The company is actively engaging with governments to address high energy costs in Ukraine and is committed to maintaining production under challenging conditions [58][59] Other Important Information - The company has a clear policy for capital allocation and is focused on ensuring that the European business can earn its cost of capital [32] - The company is confident in the recovery of its Mexican operations and does not expect the operational issues faced this year to recur in 2026 [10][54] Q&A Session Summary Question: What unusual or exceptional costs should be considered for 2026? - Management indicated that there are no significant changes expected regarding tariffs, and operational losses in Mexico are not anticipated to recur in 2026 [10][12] Question: How much can production be flexed in Europe if imports decline? - The company expects to capture a larger market share as imports decrease, with production capacity in Europe exceeding current output levels [14] Question: What is the CapEx profile for the medium term? - The company plans to maintain a CapEx range of $4.5 billion to $5 billion, including strategic and maintenance investments [24] Question: How is the company managing order books for 2026? - The order book remains stable, with no significant changes anticipated, and the company is preparing for a stronger 2026 [28] Question: How confident is the company about the release of working capital in Q4? - Management expressed confidence in a significant release of working capital, driven by seasonal factors and operational normalizations [46][47] Question: What is the company's stance on the situation in Brazil and India? - The company remains bullish on Brazil and continues to invest, while in India, demand is strong despite low prices due to new capacity [56][57] Question: What is the company's approach to CO2 emissions and free allocations? - The company does not expect to lose free emissions meaningfully and anticipates that CBAM will create a level playing field for costs [82][86] Question: How is the Calvert EAF ramp progressing? - The ramp-up is on track, with expectations to end the year at a run rate of 40% to 50% [91] Question: What is the company's view on the European trade policy proposals? - Management is hopeful for the swift implementation of trade measures to support the domestic industry [97]