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 in the first quarter of 2026. 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 presentation that was published on our website this morning. However, I do want to draw your attention to the disclaimers on slide 20 of that presentation. Following opening remarks from Jen Wino, we will move directly to the Q&A session. So if you would like to ask a question, then please do press star 11 on your keypad to join the queue.

And with that, I will hand the call over to Jeremy now. Thanks, Daniel. Welcome, everyone, and thanks for joining today's call.

As usual, I will keep my remarks brief, and much of what I say will echo the messages from recent quarters. That reflects the consistency of our performance the clarity of our focus and the discipline with which we continue to execute our strategy. What we are delivering at the bottom of the cycle positions us very well for the near future, particularly as more favorable policy conditions translate into a stronger operating environment with improving margins and returns. Alongside the impact of our growth strategy, this supports the free cash flow outlook and the delivery of consistent capital returns to shareholders. But first, I want to address safety. Our multi-year safety transformation program is now delivering more consistent and improved outcomes across our organization. Leadership expectations are clearly defined, risk management practices are being applied more uniformly, and our focus on process safety has expanded across installation. Advanced analytics, including AI, are strengthening these efforts. For example, enabling early identification of workers entering hazardous areas and triggering path alerts and interventions that humans monitoring alone. Most importantly, this sustained focus on safety is translating to tangible improvements in performance across the group. We provide a more detailed account of this progress in the sustainability report published last week, which I encourage you to review for a fuller picture of how we are advancing our safety objectives. Now I want to focus this quarter on three key points. First and foremost, our results consistently demonstrate clear structural improvements. In the first quarter, we delivered a beta of $131 per ton. up $15 per tonne year-on-year and around 50% higher than our historical average margins. This clearly demonstrates the strengthening of our underlying earnings power over recent years. Importantly, this performance does not yet reflect the significantly stronger price environment seen in recent months, which we expect to be more fully evident in our second quarter results. Underlying free cash flow performance was robust. Excluding the seasonal working capital investment and in strategic group CapEx, underlying free cash flow was running at an annualized rate of over $2 billion. Again, considering where we are in the cycle, this represents a strong outcome. Consistent and disciplined execution of our strategy is driving improved performance and providing the capacity to continually invest with discipline and focus, and materially enhance the future earnings potential of Arsenal Midtown. This brings me to my second point, our compelling growth opportunities, which clearly set us apart from our peers. We are allocating capital to the highest return opportunities. This includes projects that are actively enabling the energy transition. expanding our iron ore mining capacity and adding new value added capabilities we recently approved an eaf investment in dunkirk the decision was enabled by the more supportive policy backdrop the cost visibility from a competitive long-term energy contract and the support of the french government our eaf projects are expected to deliver incrementally higher beta to provide an acceptable return on the capital deploy. So we have reflected Dunkirk together with the previously announced EIF projects in Sestal and Guihong into the expected EBITDA impact from strategic projects. This now stands at an incremental 1.8 billion from 2026 onwards. My final point is on the positive outlook, which is underpinned by trade policy. Given the change to trade policy, the steel sector today offers much more defensive characteristics, particularly in Europe, than it did in the past. More effective trade protections are leading to increasingly regionalized market structures, enabling domestic producers to recapture market share from unfairly subsidized imports. The biggest shift occurring in Europe. We are very pleased with the agreement achieved in the new tariff rate quota tool in Europe. As a result, we can expect this to be in effect from 1st of July, 2026. Together with Cibam, this underpins our positive outlook for our European business. We are seeing stronger customer engagement, higher order inquiries, and customers shifting more towards domestic supplies. This is apparent in the material improvement in steel prices and spreads since the start of the year. As a result, despite the volatility of energy markets caused by the conflicting era, we continue to expect our production and shipments to improve across all regions in 2026. And we should see a clear improvement in our EBITDA in all steel segments next quarter. As I conclude, the message is simple. We are consistently delivering structurally improved results while executing our strategy with discipline. Our high return growth opportunities differentiate us from our peers, as does our track record of capital returns through the consistent application of our policy. That framework has already delivered a 38% reduction in our share count and a doubling of the dividend over the past five years. At the same time, we have advanced the business strategically, enhancing resilience and structurally improving returns on capital, all achieved while maintaining a strong investment-grade balance sheet.