ArcelorMittal S.A. (MT) Q3 2022 Earnings Call Transcript

For the period ending September 30, 2022

November 10, 2022 9:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Daniel Fairclough

Good afternoon, and good morning, everybody. Welcome to ArcelorMittal's Third Quarter Analyst and Investor Call. This is Daniel Fairclough from the ArcelorMittal Investor Relations team. I'm joined on this call by our CFO, Genuino Christino.

Before I hand over to Genuino, I would like to mention a few housekeeping items. Firstly, I want to refer everybody to the disclaimers that are on Slide 2 of the results presentation that we published on our website this morning. I'd also like to remind everyone that this call is being recorded and it's scheduled to last up to 45 minutes.

Finally, if you would like to ask a question, then please do press star one on your telephone keypad, and we will answer the questions in the order in which they received.

With that, I would like to hand over the call to Genuino for some opening remarks.

Genuino Christino

Thank you, Daniel, and thank you, and good afternoon, everybody. I will make some very brief remarks before we move to your questions.

I have basically three main points to make. Firstly, on the current market situation. So, real demand headwinds are being exacerbated by destocking through the value chain. The destocking impact on the apparent demand is very significant, but we know from experience that it won't last. This gives us confidence that the apparent demand conditions will improve once the destocking phase reaches maturity.

My second point is on our response. We are responding effectively by adapting our capacity for quarter four and reducing fixed costs on the impacted tonnes. At current spot levels, variable costs and by that, I mean, raw materials and energy on a per tonne basis are expected to decline in Q4. The improvements we have made in recent periods are being tested by this difficult market environment, but results should demonstrate that our business is stronger and more resilient.

My final point is on the outlook. Significant cash has been allocated to working capital investment in recent quarters. This is now at peak, we believe, and the expected working capital unwind should support free cash flow in a lower EBITDA environment. Our balance sheet strength and expectation of consistently positive free cash flow underpin the continued execution of our strategy to grow and develop the business to be a safe leader in low carbon and steel and capture the growth opportunities in faster growing markets.