Arcelormittal SA

Good afternoon and good morning, everybody. This is Daniel Fairclough from the ArcelorMittal Investor Relations team. Thank you very much for joining today's call. The focus is to discuss the results of the first half 2021 and the strategic progress we're making at ArcelorMittal. This was covered in depth in a detailed presentation published alongside our results this morning. So as usual, the format of this call will be some opening remarks from Mr. Mittal and Aditya, followed directly by a Q&A session. So as such, we should be able to complete this call in about 45 minutes to an hour. First, some housekeeping. If you would like to join the Q2 Ask a Question, please do press star one on your telephone keypad. I'd also like to remind you of the disclaimers in our presentation and also the fact that this call is being recorded. And with that very brief opening, I'll hand over to Mr. Mittal.

Thank you, Daniel. Good day, everyone. Thank you for joining today's call. I hope you are all keeping safe and well. I am joined on this call by Adit Mittal, our CEO, Genvino CFO, and our head of mining, Simon Wanke. Today is an important day. We have reported our best set of results since 2008, even keeping in mind the reduced scope, which is very satisfying to see. We have also announced a new target for the group to reduce our carbon emissions by 25% by 2030. These targets are very important. Turning first to our financial performance, as I mentioned, this was the best quarter since 2008 by some margin. Performance improved in all the steel segments. Net income for the first half was $6.3 billion, and includes a billion-dollar contribution from JVs, highlighting strong performance at R. Sumitra Lipan Steel India and R. Sumitra Lipan Steel Calvert. Now I'll hand over the floor now to Adit. Adit?

Great. Thank you, and good day to everyone. I hope you're all keeping safe and well. Before I turn to our second announcement of the day, which is the carbon report, Let me first address our health and safety performance. In the first six months of the year, we have reinvigorated our Global Health and Safety Council, which provides leadership and guidance to all our segments. We have done this because, although we compare favorably with the industry, we are not satisfied with our safety performance. All segments are adopting new initiatives, and I'm hopeful we will see improvement in our safety performance as time progresses. Despite the COVID-related turbulence of the last 18 months, our actions to streamline and optimize our business and balance sheet puts Arswar Mittal on the strongest footing it has been for many years and positions us well to address one of the biggest challenges the global economy has faced, decarbonization. As we talked about at the time of our 2020 results in February, our ambition is to lead our industry's efforts to decarbonize. This, I hope, is reflected in our second group climate action report, which we have published today. The report details a new group-wide target of a 25% reduction in carbon emissions by 2030. We have also increased our European target to 35%. These are ambitious targets, and it will be a big challenge, but there's a lot of positive engagement across the company to show the world what steel is capable of. As you know, engineers love a good challenge and there is arguably no greater than this. We estimate capital investments of $10 billion to achieve these targets. Given the technologies that will enable these reductions are not yet competitive, we're looking for equal support through targeted policy that takes into account both the initial capital spend and the higher operating costs during the transition period. We're continuing to base our transition plans on the two technology routes we've talked about previously, i.e., innovative DRI and smart carbon. But as it stands today, the 2030 target will lead more towards innovative DRI, particularly in Europe, where national governments are prioritizing the availability of green hydrogen at competitive prices. This underpins our recent exceptional announcement that Ars Vermittal Sestao will become the world's first full-scale, zero-carbon emission steel plant by 2025. There is a lot of information in the report about how ArcelorMittal will decarbonize, which I hope you will find useful. Steel is already the material of choice due to its lower carbon footprint and infinite recyclability. The world will continue to need ever-increasing amounts of steel. That won't change, but the way steel is made will. We hope to be at the forefront of this change. So in summary, we continue to enjoy strong market conditions and are doing all that we can to ensure that we take maximum benefit from them while simultaneously transitioning for longer-term success. Thank you. We're happy to take your questions.