Arcelormittal SA

Good afternoon, everyone. This is Daniel Fairclough from the ArcelorMittal Investor Relations team. Thank you for joining this call to discuss ArcelorMittal's performance and progress during the first quarter of 2025. Leading today's call will be our Group CFO, Mr. Gianmino Cristino. 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 would like to draw your attention to the disclaimers on slide number 19 of that presentation. As normal, Jen Reno will make some opening remarks before we move directly to the Q&A session. So the idea is that the call will last 40, 45 minutes. So if you would like to join the queue to ask a question, please do press star 1 1 on your telephone keypad.

Over to you, Jen Reno. Thanks, Daniel, and welcome, everyone.

and thanks for joining today's call. As usual, I will keep my remarks brief. I want to focus this report on three key points, beginning with safety, which remains paramount for our company. We are now in the implementation phase of the recommendations of the SAIPT audit we completed last year, and early progress has been encouraging. We anticipate that our journey to zero could take three years. The first year will be about setting the foundations for transformational change across the whole group. Years two and three will be about embedding this change and ensure consistency, discipline, and results in every region. I can say with confidence that everyone across the company is working to become a fatality-free and zero serious injuries company as quickly as possible. Moving now to the financial performance, I want to highlight our strong operational performance and cash flows. Our operations are performing well, and they are performing consistently. The standout this quarter was our mining segment. Liberia achieved records for both production and shipment. And this is before the ramp up of new capacity. In Europe, our mills are operating consistently across the cycle, and this is supporting good cost performance. In North America, having resolved the issues that impacted production last year in Mexico, the segment is now back to normalized operating levels. But also, resilient financial performance in a low cycle price environment. EBITDA per ton of 160 in the level compared to critical lows. As we have alluded to multiple times in the recent years, AsselinMittal is a transformed company. We have high graded our asset portfolio by divesting higher cost assets and acquired new assets that are well positioned to create value in all market environments. This has been well demonstrated over the recent quarters with structurally higher margins and greater earnings resilience. Moving to cash flows, the first quarter always sees investments in working capital, and this year has been no different. But excluding the seasonal working capital investment and our discretionary growth cap tax, the underlying free cash flow for the quarter was around $700 million. This shows that even at the bottom of the cycle, we are generating good levels of cash flows. that give us confidence to invest to support our strategic priorities as well as consistently return capital to shareholders. Lastly, I will touch on tariffs and the outlook. We are supportive of our efforts to address the excess capacity in the global steel industry and the unfair trade practices that result from it. As we said last quarter, we expect the impact of Section 232 tariffs on our North America business to be largely neutral. But on the positive side, we have seen other regions respond also. Europe has strengthened its safeguards. India has introduced new safeguards. Ultimately, ArcelorMittal is well positioned to benefit from the continued push to create a level playing field in terms of trade. On the outlook, we said last quarter that the impact of Section 232 tariffs on our North American business should be broadly neutral. And including the benefits of higher prices to our coverage or invention, this remains our expectation. Encouragingly, EU spreads have recovered from unsustainably low levels, and this will be a strong support for results near term. As a result, Q2 EBITDA should be clearly better than the first quarter. What is more uncertainty is the impact that tariffs will have on demand. Customers clearly are asking themselves the same question. What I can say today is that our order book remains healthy, but this is a risk that we are monitoring very closely and our business are prepared to adapt as necessary. So to conclude my opening remarks, ArcelorMittal is in a strong position both operationally and financially. Despite the macro uncertainties, we will be maintaining our strategic course, delivering our strategic growth agenda while simultaneously returning capital to our shareholders. Our growth projects have good momentum. The investments we have been making for the past three years will contribute to structurally higher EBITDA. 1.2 billion of which is expected to be captured over the next few years. The Iberia expansion project is on track and on budget. The commissioning of the new state-of-the-art EIF at Calvert is underway. And the development of our unique exposure to India is progressing to shadow with the phase one expansion at zero on shadow. I'll clearly define capital return policies working well and will continue. we have initiated a new long-term share buyback program through 2013. Returning capital to shareholders at the bottom of the cycle while keen to invest in growth is clear evidence of the progress AcelonMittal has made and demonstrates that our company can deliver value through all aspects of this deal cycle.