Feb. 7, 2019 - 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 for the three-month and twelve-month periods ended December 31, 2018.
2018 highlights:
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1. Health and safety performance improved in FY 2018 with annual LTIF rate of 0.69x vs. 0.78x in FY 2017
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2. FY 2018 operating income of $6.5bn (+20.3% YoY); operating income of $1.0bn in 4Q 2018 (-15.6% YoY)
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3. FY 2018 EBITDA of $10.3bn (+22.1% YoY); EBITDA of $2.0bn in 4Q 2018 (-8.9% YoY)
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4. FY 2018 net income of $5.1bn, +12.7% higher as compared to $4.6bn for FY 2017
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5. FY 2018 steel shipments of 83.9Mt (-1.6% YoY); 4Q 2018 steel shipments of 20.2Mt (-3.6% YoY)
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6. FY 2018 crude steel production of 92.5Mt (-0.6% YoY); 4Q 2018 crude steel production of 22.8Mt (stable YoY)
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7. FY 2018 iron ore shipments of 58.3Mt (+0.7% YoY), of which 37.6Mt shipped at market prices (+5.5% YoY); 4Q 2018 iron ore shipments of 15.7Mt (+9.8% YoY), of which 10.0Mt shipped at market prices (+18.2% YoY)
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8. Gross debt of $12.6bn as of December 31, 2018. Net debt of $10.2bn as of December 31, 2018, lower as compared to $10.5bn as of September 30, 2018 and broadly stable as compared to $10.1bn as of December 31, 2017
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9. FY 2018 cash flow from operating activities of $4.2bn less capex of $3.3bn for free cash flow (FCF) of $0.9bn despite working capital investment of $4.4bn, premium to repay bonds ($0.1bn) and litigation fines ($0.1bn)
Strategic progress in 2018:
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1. Improved asset portfolio through the completed acquisitions of Votorantim in Brazil and Ilva in Italy, as well as being selected as the successful bidder for Essar Steel India Limited (ESIL) in partnership with Nippon Steel & Sumitomo Metal Corporation Group (NSSMC), which subject to completion, would provide improvement potential and growth optionality
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2. Continued progress as the leader in innovation including the LanzaTech carbon capture and conversion project at Gent, Steligence® and new products and solutions to address the automotive platforms of the future
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3. Improvement in leverage ratio: FY 2018 net debt/EBITDA of 1.0x vs.1.2x in FY 2017
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4. Cash needs of the business in 2018 were limited to $5.0bn, below the guidance of $5.8bn provided in mid-year. Capex of $3.3bn was below our guidance of $3.7bn due to timing of payments which will therefore be carried over to 2019. Net interest of $0.6bn was in line with our guidance. “Taxes, pension and others” came in at $1.1bn, below our guidance of $1.5bn, due to the combined effects of: certain cash tax settlements being deferred from 2018 to 2019; higher than anticipated dividends received from our investments in associates; and net gains on other accounts
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5. Achieved the primary financial objective of an investment grade rating with all 3 credit rating agencies
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6. Limited Action 2020 progress in 2018, with ongoing cost/mix gains (+$0.4bn) offset in part by volumes losses (-$0.3bn) following operational disruptions during the year. As a result, cumulative savings 2016-2018 of $1.6bn achieved; ongoing focus and execution to deliver target of $3bn savings by 2020
Commenting, Mr. Lakshmi N. Mittal, ArcelorMittal Chairman and CEO, said:
“2018 was a year of positive momentum for ArcelorMittal characterized by important strategic and financial progress. Operating in a healthy market environment, the Company enjoyed a strong financial performance, delivering substantial profitability improvement. Having considerably strengthened our balance sheet in recent years, we also regained our investment grade credit rating.
With an established leadership position in many regions, ArcelorMittal targets specific growth opportunities to complement our existing global presence. The acquisitions of Votorantim and Ilva, both completed in 2018, provide us with enhanced leadership positions in key markets. Meanwhile our bid for Essar can provide us with a quality, scalable presence in the rapidly expanding India steel market.
Delivery against our Action 2020 targets is an important focus for the Group in 2019. We did not perform at an optimum level operationally in 2018 and will seek to minimize operational disruption this year to ensure we meet our volume targets.
Although the issue of global overcapacity persists and there are well publicised macro-economic risks, we expect further, moderate global steel demand growth this year. Having considerably strengthened the Company in recent years, we are in a strong position to generate healthy levels of free cash and prosper through the cycle.”
AD
