Luxembourg, February 13, 2015 – ArcelorMittal (referred to as “ArcelorMittal” or the “Company”) (MT (New York, Amsterdam, Paris, Luxembourg), MTS (Madrid)), the world’s leading integrated steel and mining company, today announced results[1] for the three and twelve-month periods ended December 31, 2014.
Highlights:
- Health and safety performance remained stable in FY 2014 with annual LTIF rate of 0.85x
- FY 2014 EBITDA of $7.2 billion, 8.5% higher than FY 2013 on an underlying basis[2]; underlying steel-only EBITDA/t up 23.6% or $14/t versus FY 2013
- 4Q 2014 EBITDA of $1.8 billion; notable improvements versus 4Q 2013 in Europe (+36.6%) and ACIS (+173.6%) segments were more than offset by the negative impact of iron ore prices on the Mining segment (-73.7%)[3] on an underlying basis
- FY 2014 net loss of $1.1 billion as compared to FY 2013 net loss of $2.5 billion. Excluding China Oriental impairment ($0.6 billion), other impairments and other non-recurring items, net income would have been positive in FY 2014
- Free cash flow positive in FY 2014; $3.9 billion of cash flow from operations and capital expenditure of $3.7 billion
- Net debt lower at $15.8 billion as of December 31, 2014 as compared to $17.8 billion as of September 30, 2014 due largely to working capital release of $1.0 billion, asset disposal proceeds of $0.6 billion and forex impacts of $0.2 billion
- FY 2014 steel shipments of 85.1Mt (+3.0 YoY); 4Q 2014 steel shipments of 21.2Mt up +3.4% versus 4Q 2013
- FY 2014 iron ore shipments of 63.7Mt (+6.9% YoY), of which 39.8Mt shipped at market prices (+13.2% YoY); 4Q 2014 iron ore shipments of 16.3Mt (-1.4% YoY), of which 9.9Mt shipped at market prices (-3.4% YoY)
- Annualized management gains improvement of $2.1 billion achieved at end of 2014. On course to reach $3 billion target by the end of 2015
- Dividend maintained at $0.20/share, subject to shareholders’ approval
Strategic progress in 2014:
The Company has made notable progress on its strategic objectives during 2014, including:
- Increased steel volumes by 3% given improved demand in its core steel markets
- Expanded steel margins by $14/t through continued focus on cost optimization: leveraging benefits of European restructuring, improved performance of ACIS operations as well as lower raw material costs
- Expanded mining volumes (including a 4Q 2014 annualized production rate of 26Mt at ArcelorMittal Mines Canada (AMMC)) whilst further reducing mining costs (4Q 2014 AMMC concentrate unit cost 25% lower than FY 2013 average)
- Further developed its automotive steel franchise including new capacity (Calvert, VAMA) and new product launches
- Net debt declined to its lowest level since the ArcelorMittal merger which together with lower average cost of debt reduced net interest expense by $0.3 billion
Outlook and guidance:
- The Company expects Group EBITDA to be within the range of $6.5 billion to $7 billion for 2015
- Steel segments: Overall, steel markets continue to grow, in particular for our high value-added products; a forecast 4-5% increase in shipment volumes (approximately half of which follows the Newcastle reline completion and full year impact of the restart of BF#3 in Tubarao, Brazil) together with improved cost performance are expected to offset the impact of lower transaction prices and the impacts of translation
- Mining segment: Assuming current market conditions, in excess of one-third of the impact of lower iron ore prices on revenues will be offset by improved cost performance including the benefits of foreign exchange, energy and freight as well as higher volumes
- Additionally, the Company expects net interest expense to decline to approximately $1.4 billion and capital expenditure to decline to approximately $3.4 billion in 2015
- As a result, at the bottom end of the guidance range the Company would expect to be free cash flow positive. While net debt is expected to follow a normal seasonal pattern, overall progress towards the medium term net debt target of $15 billion is anticipated during the course of 2015
Financial highlights (on the basis of IFRS[1]):
| (USDm) unless otherwise shown | 4Q 14 | 3Q 14 | 4Q 13 | 2H 14 | 1H 14 | 2H 13 | 12M 14 | 12M 13 |
|---|---|---|---|---|---|---|---|---|
| Sales | 18,723 | 20,067 | 19,848 | 38,790 | 40,492 | 39,491 | 79,282 | 79,440 |
| EBITDA | 1,815 | 1,905 | 1,910 | 3,720 | 3,517 | 3,623 | 7,237 | 6,888 |
| Operating income / (loss) | 569 | 959 | (36) | 1,528 | 1,506 | 441 | 3,034 | 1,197 |
| Net income / (loss) attributable to equity holders of the parent | (955) | 22 | (1,227) | (933) | (153) | (1,420) | (1,086) | (2,545) |
| Basic earnings / (loss) per share (USD) | (0.53) | 0.01 | (0.69) | (0.52) | (0.09) | (0.81) | (0.61) | (1.46) |
| Own iron ore production (Mt) | 16.7 | 15.8 | 15.4 | 32.5 | 31.4 | 30.3 | 63.9 | 58.4 |
| Iron ore shipped at market price (Mt) | 9.9 | 10.0 | 10.3 | 19.9 | 19.8 | 19.7 | 39.8 | 35.1 |
| Crude steel production (Mt) | 23.2 | 23.9 | 23.0 | 47.1 | 46.1 | 46.2 | 93.1 | 91.2 |
| Steel shipments (Mt) | 21.2 | 21.5 | 20.5 | 42.7 | 42.4 | 41.2 | 85.1 | 82.6 |
| EBITDA/tonne (US$/t) | 86 | 89 | 93 | 87 | 83 | 88 | 85 | 83 |
Commenting, Mr. Lakshmi N. Mittal, ArcelorMittal Chairman and CEO, said:
“Stronger steel demand, particularly in our core markets of Europe and the US, drove an 8.5% improvement in 2014 underlying EBITDA, despite the lower iron-ore price. The business benefited from a 3% increase in steel shipments, an increase in marketable iron-ore shipments, and the result of cost optimization and restructuring efforts. Net debt reached $15.8 billion, the lowest level since the onset of the economic crisis, demonstrating continued progress towards our medium term target of $15.0 billion. For 2015, although operating conditions remain tough we expect steel markets to continue to improve, particularly for high value-added products such as automotive, where ArcelorMittal is a world leader.”
[1]The financial information in this press release has been prepared consistently with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). While the interim financial information included in this announcement has been prepared in accordance with IFRS applicable to interim periods, this announcement does not contain sufficient information to constitute an interim financial report as defined in International Accounting Standards 34, “Interim Financial Reporting”. The numbers in this press release have not been audited. The financial information and certain other information presented in a number of tables in this press release have been rounded to the nearest whole number or the nearest decimal. Therefore, the sum of the numbers in a column may not conform exactly to the total figure given for that column. In addition, certain percentages presented in the tables in this press release reflect calculations based upon the underlying information prior to rounding and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers. This press release also includes certain non-GAAP financial measures.
[2]EBITDA in FY 2014 of $7,237 million includes the negative impact of $90 million from the settlement of US antitrust litigation and a $76 million provision related to onerous annual tin plate contracts at Weirton in the US, offset by the positive impact from the $79 million gain on disposal of Kuzbass coal mines in Russia; EBITDA in FY 2013 of $6,888 million included the positive impact of a $47 million fair valuation gain relating to the acquisition of an additional ownership interest in DJ Galvanizing in Canada and $92 million of DDH income. For comparative purposes, underlying EBITDA for FY 2014 is $7,324 million as compared to underlying EBITDA of $6,749 million in FY 2013.
[3]EBITDA in 4Q 2014 of $1,815 million was negatively impacted by a $76 million provision related to onerous annual tin plate contracts at Weirton in the US, offset by the positive impact from the $79 million gain on disposal of Kuzbass coal mines in Russia.