Arcelormittal SA

Good afternoon, everyone. This is Daniel Fairclough from the ArcelorMittal Ambassador Relations team. Thank you for joining this call to discuss ArcelorMittal's performance and progress over the first half of 2024. Leading today's call will be our Group CFO, Mr. Germino Cristina. Before we begin, I would like to mention a few housekeeping items. As usual, we will not be going through the results presentation, which was published this morning on our website. However, I do want to draw your attention to the disclaimers on slide number two of that presentation. As normal, Gemina will make some opening remarks before moving directly to the Q&A session. So if you would like to ask a question, then please do press star 1 1 on your telephone keypad to join the queue. And if you want to exit the queue, just repeat that step, star 1 1. Over to you, Gemina.

Thanks, Daniel, and welcome, everyone. I will, as usual, keep my remarks brief and focus on the theme of strategic progress. Beginning first with safety. Across Asela-Mittal, our people are galvanized to improve safety and achieve our goals of being a fatality-free organization as quickly as we can. The third-part safety audit, which started at the end of December, is on schedule to be finalized this quarter. All the groundwork has been completed and DSS Plus are now developing their actions and recommendations. Combined with the considerable efforts already underway, this will enable us to deliver the safe results we are striving for. Moving to our financial performance, we have faced our challenges, both macro and micro, during the first half of 2024. But our results have shown good resilience and continue to reflect the positive actions we have taken to optimize our business and high-grade our asset portfolio. The beta pattern of $140 in the first half of 2024 compares well with our long-term history. Our operating results for the second quarter were broadly stable with the first quarter, despite the challenges faced in certain segments. This really highlights the benefits of our DDS-5 exposure. Pre-cash flow during the quarter was slightly positive, but let me remind you that this is after investment in our strategic growth projects. Stripping that out, the annualized run rate investable cash flow was about 1.7 billion. Our resilient financial performance and strong balance sheet enables to be fully focused on the strategic execution. And by strategic execution, I mean delivering on our growth projects, realizing the potential of acquired assets, and consistently returning capital to shareholders. Over the past three and a half years, we have invested almost $3 billion in our strategic growth projects. We are developing our upstream resources, including metallics, renewables. We are adding capacity in high-growth markets, including India. And we are developing our capabilities to produce higher margin products and solutions. We recently completed new code, new complex at Vega in Brazil and begun commissioning our one gigawatt renewables project in India. Our organic growth has good momentum with many projects should be commissioned in the coming periods. The new assets we have acquired in recent periods continue to perform well. We expect to conclude the acquisition of our 28% stake in Valrec very soon. We have added Italpaneli to support the growth of our construction business within sustainable solutions. The fact that we have been able to maintain our growth strategy despite the challenging macro climate means that we will enjoy the benefits to EBITDA on top of any cyclical recovery. Finally, I want to highlight once again our consistent return to shareholders. Over the first half of 2024, we have returned $1.1 billion through buybacks and dividends. This is over 6% of our current market cap. We have now bought back 36% of our equity in less than four years. Given valuation disconnects, our shares remain the best opportunity in the market, so buybacks will continue. To conclude my opening remarks, we are delivering resilient results, and our performance continues to provide evidence that ArcelorMittal can deliver value through all aspects of the field cycle. We are maintaining a very strong balance sheet. Our strategic growth projects have good momentum and will provide significant structural upside to EBITDA and cash flows on top of any cyclical recovery. And the benefits to our shareholders have been compounded by our continued share buybacks. With that, Daniel, we are ready now to go to the Q&As.

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