ArcelorMittal SA Q3 FY2022 earnings call

Genuino Christino's opening remarks included: 1. Current market situation: Real demand is facing headwinds due to destocking through the value chain, but confidence that apparent demand will improve once destocking matures. 2. Response: Adapting capacity for Q4 and reducing fixed costs on impacted tonnes; variable costs (raw materials and energy per tonne) expected to decline in Q4. 3. Outlook: Significant working capital investment at peak, expected working capital unwind to support free cash flow, and balance sheet strength underpinning the strategy to grow in low carbon steel and capture growth opportunities in faster growing markets.

Expectation of working capital unwind supporting free cash flow in a lower EBITDA environment. Balance sheet strength and expectation of consistently positive free cash flow underpin the continued execution of the strategy. No specific quantitative EBITDA guidance provided.

1. Uncertainty in the duration of the destocking phase. 2. Volatility in energy prices and spot steel prices. 3. Challenges related to labor agreements and potential impact on costs.

Q: On profit bridges for Q4, less obvious moving parts and divisional overview?

A: Genuino mentioned destocking continuing, shipments lower in Europe, raw materials and energy costs declining, but volatility in prices.

Q: Working capital release and buyback program?

A: Expect working capital release in Q4, significant release expected in 2023, balance sheet strength supports buyback.

Q: Guidance for Q4 EBITDA?

A: Daniel said no specific quantitative guidance given.

Q: Update on Kazakhstan, Ukraine, South Africa operations?

A: Kazakhstan did well, Ukraine facing challenges but stable, South Africa improving; Kazakhstan strategic, investment ongoing.

Q: Order books and destocking duration?

A: Order books okay, destocking worst in Q4, hope for improvement in 2023.

Q: Iron ore Liberia expansion and Ukraine iron ore export?

A: Liberia project conservative, Ukraine mine running at 30%, iron ore transferred to Poland.

Q: Inventory write-downs and US business shipments?

A: Inventory write-downs due to market conditions, US shipments expected stable quarter-on-quarter.

Q: Impact of energy costs on Europe prices and margins?

A: Energy crisis European phenomenon, industry responding, rebalancing supply to demand.

Q: Capacity cuts and CO2 certificates?

A: Capacity cuts to match demand, CO2 certificates bought quarterly to cover shortages.

Q: CapEx guidance and labor agreements?

A: CapEx revised due to timing and FX, labor agreements important for balancing costs and competitiveness.