7:00 | 07.02.2012
ArcelorMittal Reports Fourth Quarter 2011 and Full Year 2011 Results
Regulatory News:
ArcelorMittal (referred to as “ArcelorMittal” or the “Company”) (MT (New
York, Amsterdam, Paris, Luxembourg), MTS (Madrid)), the world’s leading
steel company, today announced results1 for the three and
twelve month periods ended December 31, 2011.
Highlights:
Health and safety performance improved in 2011 with an annual LTIF rate2
of 1.4x as compared to 1.8x in 2010; marked improvement shown in 4Q
2011 with an LTIF rate of 1.2x
FY 2011 EBITDA3 of $10.1 billion (+18.7% y-o-y); 4Q 2011
EBITDA of $1.7 billion (including positive $0.1 billion from sale of CO2
credits) in challenging market conditions
FY 2011 net income of $2.3 billion or $1.46 per share; 4Q 2011 net
loss of $1.0 billion due in part to $1.3 billion of non-cash charges
(reduction of deferred tax assets ($0.9 billion), together with asset
impairments ($0.2 billion) and restructuring charges associated with
asset optimization ($0.2 billion))
4Q 2011 steel shipments of 20.6Mt down 2.5% vs. 3Q 2011 driven mainly
by destocking in Europe
Mining production targets achieved: FY 2011 iron ore production of
54.1Mt (+10.5% y-o-y), of which 28.0Mt shipped at market prices4
(+11.5% y-o-y); FY 2011 coal production of 8.3Mt (+ 20% y-o-y), of
which 4.9Mt shipped at market prices (+45% y-o-y)
Net debt5 reduced by $2.4 billion during 4Q 2011 to $22.5
billion as of December 31, driven by improved cash flow from
operations of $2.9 billion, inflow of $0.8 billion from MacArthur Coal
divestment and foreign exchange gains
The Board proposes to maintain the annual dividend at $0.75 per share,
subject to AGM approval
Outlook and guidance:
1H 2012 EBITDA likely to be lower than the comparable period of 2011
and above 2H 2011 level; supported by continued progress on management
gains and asset optimization plans
Overall steel shipment volumes in 1H 2012 are expected to be at a
similar level as in 1H 2011; Mining production volumes expected to be
higher than 1H 2011 in line with plans to increase own iron ore and
coal production in FY 2012 by approximately 10%
2012 Capex expected to be approximately $4-4.5 billion
Further reduction in net debt anticipated with a focus on working
capital management and non-core asset divestments, per the Company’s
stated objective to retain its investment grade credit rating
Financial highlights (on the basis of IFRS1,
amounts in USD):
Quarterly comparison
Semi-annual comparison
Annual comparison
(USDm) unless otherwise shown
4Q 11
3Q 11
4Q 10
2H 11
1H 11
2H 10
12M 11
12M 10
Sales
$22,449
$24,214
$20,699
$46,663
$47,310
$40,443
$93,973
$78,025
EBITDA
1,714
2,408
1,853
4,122
5,995
4,015
10,117
8,525
Operating income
47
1,168
397
1,215
3,683
1,425
4,898
3,605
Net income / (loss)
(1,000)
659
(780)
(341)
2,604
570
2,262
2,916
Basic earnings / (loss) per share (USD)
(0.65)
0.43
(0.51)
(0.22)
1.68
0.38
1.46
1.93
Continuing operations
Own iron ore production (Mt)
15.1
14.1
12.6
29.2
24.9
25.6
54.1
48.9
Iron ore shipped internally and externally at market price (Mt)4
8.5
6.7
6.7
15.1
12.9
12.8
28.0
25.2
Crude steel production (Mt)
21.7
22.4
21.6
44.0
47.9
43.8
91.9
90.6
Steel shipments (Mt)
20.6
21.1
21.1
41.7
44.1
41.7
85.8
85.0
EBITDA/tonne (US$/t)
83
114
88
99
136
96
118
100
Commenting, Mr. Lakshmi N. Mittal, Chairman and CEO, ArcelorMittal,
said:
“The progressive recovery that we have been experiencing was impacted in
the second half of the year by the growing uncertainty over the economic
situation in Europe, which particularly affected sentiment and
performance in the fourth quarter. Nevertheless, against this backdrop
ArcelorMittal delivered an improved underlying performance compared with
2010 and met our expectation of a higher EBITDA in the second half
compared with the previous year. The Company continues to benefit from
its diverse geographic presence and growing mining business, which
delivered on its targets to increase iron-ore and coal production by 10%
and 20% respectively. I must also remark on our health and safety
performance, which showed an improvement in the injury frequency rate to
1.2x in the fourth quarter.
Looking ahead to 2012, the situation in Europe remains a live concern.
Despite the continued uncertainty in this market, however, we are seeing
an improvement in sentiment compared with the fourth quarter. Steel
shipment volumes for the first six months are expected to be similar to
the first half of 2011 and we are again targeting increased production
from our mining business.”
FOURTH QUARTER 2011 EARNINGS ANALYST CONFERENCE CALL
Additionally, ArcelorMittal management will host a conference call for
members of the investment community to discuss the fourth quarter 2011
financial performance at:
Date
New York
London
Luxembourg
Tuesday February 7, 2012
9.30am
2.30pm
3.30pm
The dial in numbers:
Location
Dial in numbers
Replay numbers
Participant
UK local:
+44 (0)207 970 0006
+44 (0)20 7111 1244
696578#
UK toll free
0800 169 3059
696578#
USA local:
+1 215 599 1757
+1 347 366 9565
696578#
USA free phone:
1800 814 6417
696578#
A replay of the conference call will be available for one week by
dialing
Language
English
+49 (0) 1805 2043 089
Access code
421168#
The conference call will include a brief question and answer session
with senior management. The presentation will be available via a live
video webcast on www.arcelormittal.com.
Forward-Looking Statements
This document may contain forward-looking information and statements
about ArcelorMittal and its subsidiaries. These statements include
financial projections and estimates and their underlying assumptions,
statements regarding plans, objectives and expectations with respect to
future operations, products and services, and statements regarding
future performance. Forward-looking statements may be identified by the
words “believe,” “expect,” “anticipate,” “target” or similar
expressions. Although ArcelorMittal’s management believes that the
expectations reflected in such forward-looking statements are
reasonable, investors and holders of ArcelorMittal’s securities are
cautioned that forward-looking information and statements are subject to
numerous risks and uncertainties, many of which are difficult to predict
and generally beyond the control of ArcelorMittal, that could cause
actual results and developments to differ materially and adversely from
those expressed in, or implied or projected by, the forward-looking
information and statements. These risks and uncertainties include those
discussed or identified in the filings with the Luxembourg Stock Market
Authority for the Financial Markets (Commission de Surveillance du
Secteur Financier) and the United States Securities and Exchange
Commission (the “SEC”) made or to be made by ArcelorMittal, including
ArcelorMittal’s Annual Report on Form 20-F for the year ended December
31, 2011 to be filed with the SEC. ArcelorMittal undertakes no
obligation to publicly update its forward-looking statements, whether as
a result of new information, future events, or otherwise.
About ArcelorMittal
ArcelorMittal is the world’s leading steel company, with presence in
more than 60 countries.
ArcelorMittal is the leader in all major global steel markets, including
automotive, construction, household appliances and packaging, with
leading R&D and technology, as well as sizeable captive supplies of raw
materials and outstanding distribution networks. With an industrial
presence in over 20 countries spanning four continents, the Company
covers all of the key steel markets, from emerging to mature.
Through its core values of sustainability, quality and leadership,
ArcelorMittal commits to operating in a responsible way with respect to
the health, safety and well-being of its employees, contractors and the
communities in which it operates. It is also committed to the
sustainable management of the environment. It takes a leading role in
the industry’s efforts to develop breakthrough steelmaking technologies
and is actively researching and developing steel-based technologies and
solutions that contribute to combat climate change.
In 2011, ArcelorMittal had revenues of $94 billion and crude steel
production of 91.9 million tonnes, representing approximately 6 percent
of world steel output.
ArcelorMittal is listed on the stock exchanges of New York (MT),
Amsterdam (MT), Paris (MT), Luxembourg (MT) and on the Spanish stock
exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS).
For more information about ArcelorMittal visit: www.arcelormittal.com.
ArcelorMittal fourth quarter 2011 results and full year 2011 results
ArcelorMittal, the world’s leading steel company, today announced
results for the three and twelve month periods ended December 31, 2011.
Corporate social responsibility and safety performanceHealth and safety – Own personnel and contractors lost time injury
frequency rate2
Health and safety performance, based on own personnel figures and
contractors lost time injury frequency rate, improved to 1.4x for the
year 2011 from 1.8x for the year 2010 with significant improvement in
Mining operations, Flat Carbon Europe, Long Carbon Americas and Europe
and Asia Africa and CIS operations only partially offset by
deterioration in the Flat Carbon Americas and the Distribution Solutions
segments. Safety performance improved to 1.2x in the fourth quarter of
2011 as compared to 1.5x in the third quarter of 2011, with improvements
in the safety performance of all our operating segments with the
exception of Flat Carbon Americas.
Own personnel and contractors – Frequency Rate
Lost time injury frequency rate
4Q 11
3Q 11
4Q 10
12M 11
12M 10
Total Mines
0.5
1.2
1.1
1.2
1.5
Lost time injury frequency rate
4Q 11
3Q 11
4Q 10
12M 11
12M 10
Flat Carbon Americas
1.9
1.7
2.0
1.9
1.8
Flat Carbon Europe
1.5
1.6
2.3
1.6
2.3
Long Carbon Americas and Europe
1.1
1.7
1.7
1.4
2.0
Asia Africa and CIS
0.6
0.9
0.9
0.7
0.9
Distribution Solutions
2.2
4.4
2.8
3.2
2.7
Total Steel
1.3
1.6
1.7
1.5
1.8
Lost time injury frequency rate
4Q 11
3Q 11
4Q 10
12M 11
12M 10
Total (Steel and Mines)
1.2
1.5
1.6
1.4
1.8
Key corporate social responsibility highlights for the three months
ended December 31, 2011
ArcelorMittal was recently named in global human resources firm Aon
Hewitt’s list of top companies for leaders and ranked in the top seven
companies in Europe. Winners were chosen by an expert panel of
independent judges based on criteria including strength of leadership
practices and culture; examples of leader development on a global
scale; alignment of business and leadership strategy and business
performance and company reputation.
On December 2, 2011 ArcelorMittal celebrated its 4th annual
International Volunteer Work Day. Within the programme, thousands of
ArcelorMittal employees volunteer in different activities that are
carried out to improve the lives of the people in the community.
On October 13, 2011, ArcelorMittal was given the “Life Cycle
Assessment Leadership” award by The Worldsteel Association, which
recognizes the quality of the work performed by the life cycle
analysis (LCA) team of global research and development, based in
Maizieres. It also supports the way in which ArcelorMittal uses LCA to
develop new steel solutions, new steel grades and new production
processes and to position them on the market.
Analysis of results for the twelve months ended December 31, 2011
versus results for the twelve months ended December 31, 2010
ArcelorMittal’s net income for the twelve months ended December 31, 2011
was $2.3 billion, or $1.46 per share, as compared to net income for the
twelve months ended December 31, 2010 of $2.9 billion, or $1.93 per
share.
Total steel shipments for the twelve months ended December 31, 2011
increased by 0.9% to 85.8 million metric tonnes as compared with 85.0
million metric tonnes for the twelve months ended December 31, 2010.
Sales for the twelve months ended December 31, 2011 increased 20.4% to
$94.0 billion as compared with $78.0 billion for the twelve months ended
December 31, 2010 primarily due to higher average steel selling prices
(+17.7%) and marginally higher steel shipments (+0.9%).
Depreciation for the twelve months ended December 31, 2011 was higher at
$4.7 billion as compared with depreciation of $4.4 billion for the
twelve months ended December 31, 2010.
Impairment charges for the twelve months ended December 31, 2011 were
$331 million, including $151 million related to the extended idling of
the Madrid electric arc furnace (Long Carbon Europe) and $141 million
related to assets within the Flat Carbon Europe perimeter (including $85
million relating to Liege, Belgium) This is compared to impairment
charges of $525 million for the twelve months ended December 31, 2010,
including $305 million relating to the Company’s coal mines in Russia
(including the disposal of the Anzherskaya mine), $113 million relating
to the Distribution Solutions segment and $107 million primarily
relating to idle downstream assets in the European business.
Restructuring charges for the twelve months ended December 31, 2011
totalled $219 million and consisted of costs associated with the
implementation of the Asset Optimisation Plan primarily impacting Flat
Carbon Europe and Long Carbon Europe operations, as well as various
Distribution Solution entities. There were no such restructuring charges
in the twelve months ended December 31, 2010.
Operating income for the twelve months ended December 31, 2011 was $4.9
billion, compared with operating income of $3.6 billion for the twelve
months ended December 31, 2010.
Operating performance for the twelve months ended December 31, 2011 was
positively impacted by $600 million of dynamic delta hedge (“DDH”) income6
recognised during the year, a net gain of $93 million recorded on the
sale of carbon dioxide credits, the proceeds of which will be
re-invested in energy saving projects, and by $104 million related to
reversal of provisions for litigation. Operating performance for the
twelve months ended December 31, 2010 was positively impacted by DDH
income of $354 million and a net gain of $140 million recorded on the
sale of carbon dioxide credits.
Income from equity method investments and other income for the twelve
months ended December 31, 2011 was $620 million, as compared to $451
million for the twelve months ended December 31, 2010. Income for the
twelve months ended December 31, 2011 included an impairment charge of
$107 million as a result of the Company’s withdrawal from the joint
venture with Peabody Energy to acquire ownership of Macarthur Coal.7
This charge reflects a higher carrying value of the investment in
Macarthur, which included accrued share of net income. After considering
dividends received and changes in exchange rate through October 25, 2011
(date of the divestiture announcement) the transaction was essentially
cash neutral.
Net interest expense (including interest expense and interest income)
for the twelve months ended December 31, 2011 was higher at $1.8
billion, as compared to $1.4 billion for the twelve months ended
December 31, 2010, primarily due to the higher level of borrowing and
the higher cost of bond financing compared to bank loans.
Mark-to-market gains on the mandatorily convertible bond issued in
December 2009 were $42 million in the twelve months ended December 31,
2011. During the twelve months ended December 31, 2010, the Company had
recorded a non-cash gain of $427 million as a result of mark-to-market
adjustments with respect to embedded derivatives in its convertible
bonds issued in the Spring of 2009. As a result of hedging transactions
undertaken by the Company in December 2010, the mark-to-market impact
from the convertible bonds issued in the Spring of 2009 has been
minimized8.
Foreign exchange and other net financing costs9 were $1.1
billion for the twelve months ended December 31, 2011, as compared to
$1.2 billion for the twelve months ended December 31, 2010.
ArcelorMittal recorded an income tax expense of $882 million for the
twelve months ended December 31, 2011, as compared to an income tax
benefit of $1.5 billion for the twelve months ended December 31, 2010.
The full year 2011 income tax expense of $882 million increased
primarily due to lower recognition of deferred taxes following improved
results, dividend upstreaming in the fourth quarter preventing interest
deductibility in Luxembourg, partial reversal of deferred taxes in our
Belgian operations triggered by changes in local tax legislation, and
reversal of deferred tax assets in Spain imposed by time limitations for
compensation of tax losses.
Losses attributable to non-controlling interests for the twelve months
ended December 31, 2011 was $4 million as compared with gain
attributable to non-controlling interests for the twelve months ended
December 31, 2010 of $89 million.
Discontinued operations (i.e. the Company’s stainless steel operations,
which were spun-off into a separate company, Aperam) in the twelve
months ended on December 31, 2011 amounted to a gain of $461 million,
including $42 million of the post-tax net results contributed by the
stainless steel operations prior to their spin-off. The balance of $419
million represents a one-time non-cash gain from the recognition through
the income statement of gains/losses relating to the demerged assets
previously held in equity. Discontinued operations for the twelve months
ended on December 31, 2010 amounted to a loss of $330 million.
Analysis of results for the three months ended December 31, 2011
versus the three months ended September 30, 2011 and the three months
ended December 31, 2010
ArcelorMittal recorded a net loss for the three months ended December
31, 2011 of $1.0 billion, or $0.65 loss per share, as compared with net
income of $0.7 billion, or $0.43 per share, for the three months ended
September 30, 2011, and a net loss of $0.8 billion, or $0.51
loss per share, for the three months ended December 31, 2010.
Total steel shipments for the three months ended December 31, 2011 were
20.6 million metric tonnes as compared with 21.1 million metric tonnes
for the three months ended September 30, 2011 and December 31, 2010,
respectively.
Sales for the three months ended December 31, 2011 decreased by 7.3% to
$22.4 billion as compared with $24.2 billion for the three months ended
September 30, 2011, and were up 8.5% as compared with $20.7 billion for
the three months ended December 31, 2010. Sales were lower during the
fourth quarter of 2011 as compared to the third quarter of 2011
primarily due to lower average steel selling prices (-6.2%) and lower
steel shipment volumes (-2.5%).
Depreciation amounted to $1.2 billion for the three months ended
December 31, 2011, flat compared to the three months ended September 30,
2011 and slightly higher than depreciation of $1.1 billion for the three
months ended December 31, 2010.
Impairment charges for the three months ended December 31, 2011 totaled
$228 million, including $151 million related to the extended idling of
the Madrid electric arc furnace (Long Carbon Europe) and $56 million
relating to assets within the Flat Carbon Europe perimeter. Impairment
charges for the three months ended September 30, 2011 totaled $85
million relating to costs associated with the announced intention to
close two blast furnaces, sinter plant, steel shop and continuous
casters in Liege, Belgium. Impairment charges for the three months ended
December 31, 2010 totaled $381 million, and included $186 million
relating to the Company’s coal mines in Russia, $113 million relating to
certain subsidiaries in the Distribution Solutions segment (primarily
reflecting construction market weakness at that time) and $82 million
primarily relating to idle downstream assets in the European business.
Restructuring charges for the three months ended December 31, 2011
totalled $219 million and consisted of costs associated with the
implementation of the Asset Optimisation Plan primarily impacting Flat
Carbon Europe and Long Carbon Europe operations, as well as various
Distribution Solution entities. There were no such restructuring charges
for the three months ended September 30, 2011 or December 31, 2010.
Operating income for the three months ended December 31, 2011 was $47
million, as compared with operating income of $1.2 billion for the three
months ended September 30, 2011 and operating income of $0.4 billion for
the three months ended December 31, 2010. The drop in operating income
resulted from the weaker market environment particularly in Europe, with
lower steel selling prices in general for the quarter, as well as
impairment and restructuring charges.
Operating performance for the three months ended December 31, 2011 was
positively impacted by $163 million of dynamic delta hedge (DDH) income
recognised during the quarter and by a net gain of $93 million recorded
on the sale of carbon dioxide credits, the proceeds of which will be
re-invested in energy saving projects. Operating performance for the
three months ended September 30, 2011 was positively impacted by $129
million of DDH income. Operating performance for the three months ended
December 31, 2010 was positively impacted by a net gain of $140 million
recorded on the sale of carbon dioxide credits and the recognition of
$88 million of DDH income.
Income from equity method investments and other income for the three
months ended December 31, 2011 was $177 million, as compared to $6
million for the three months ended September 30, 2011 and $74 million
for the three months ended December 31, 2010. Income for the three
months ended September 30, 2011 included a charge of $119 million as a
result of the impairment of the Company’s investment in Macarthur Coal7.
The charge reflected a higher carrying value of the investment in
Macarthur Coal, which included accrued share of net income. After
considering dividends received and changes in exchange rate through
October 25, 2011 (date of the divestiture announcement) the transaction
was essentially cash neutral.
Net interest expense (including interest expense and interest income)
declined to $429 million for the three months ended December 31, 2011
from $477 million for the three months ended September 30, 2011. Net
interest expense for the three months ended December 31, 2010 was $413
million.
Mark-to-market loss on the mandatorily convertible bond issued in
December 2009 during the fourth quarter of 2011 were $13 million
compared to mark-to-market gain of $59 million for the third quarter of
2011. During the three months ended December 31, 2010, the Company had
recorded a non-cash loss of $293 million as a result of mark-to-market
adjustments relating to its convertible bonds issued in the Spring of
2009; no mark-to-market gains or losses were recorded in 2011 in respect
of such bonds due to hedging transactions entered into in December 2010.
Foreign exchange and other net financing gains were $26 million for the
three months ended December 31, 2011 and September 30, 2011. Foreign
exchange and other net financing losses for the three months ended
December 31, 2010 were $494 million.
ArcelorMittal recorded an income tax expense of $833 million for the
three months ended December 31, 2011, as compared to an income tax
expense of $154 million for the three months ended September 30, 2011,
and an income tax benefit of $450 million for the three months ended
December 31, 2010. The fourth quarter 2011 income tax expense of $833
million increased primarily due to lower recognition of deferred taxes
following dividend upstreaming in the fourth quarter preventing interest
deductibility in Luxembourg, partial reversal of deferred taxes in our
Belgian operations triggered by changes in local tax legislation, and
reversal of deferred tax assets in Spain imposed by time limitations for
compensation of tax losses.
Losses attributable to non-controlling interests for the three months
ended December 31, 2011 was $25 million as compared with losses
attributable to non-controlling interests of $31 million and $46 million
for the three months ended September 30, 2011 and December 31, 2010,
respectively.
Capital expenditure projects
The following tables summarize the Company’s principal growth and
optimization projects involving significant capital expenditures.
Completed Projects in Most Recent 4 QuartersSegment
Site
Project
Capacity / particulars
Actual Completion
Mining
Princeton Coal (USA)
Underground mine expansion
Capacity increase by 0.7mt / year
1Q 11
Mining
Liberia mines
Greenfield Liberia
Iron ore production of 4mt / year (Phase 1)
3Q 11(a)
Ongoing (b) ProjectsSegment
Site
Project
Capacity / particulars
Forecasted Completion
Mining
Andrade Mines (Brazil)
Andrade expansion
Increase iron ore production to 3.5mt / year
2012
Mining
ArcelorMittal Mines Canada
Replacement of spirals for enrichment
Increase iron ore production by 0.8mt / year
2013
Mining
ArcelorMittal Mines Canada
Expansion Project
Increase concentrator capacity by 8mt/year (16 to 24mt/y)
2013
FCA
ArcelorMittal Dofasco (Canada)
Optimization of galvanizing and galvalume operations
Optimize cost and increase galvalume production by 0.1mt / year
On hold
FCA
ArcelorMittal Vega Do Sul (Brazil)
Expansion Project
Increase HDG capacity by 0.6mt / year and CR capacity by 0.7mt / year
On hold
LCA
Monlevade (Brazil)
Wire rod production expansion
Increase in capacity of finished products by 1.15mt / year
On hold
a) Iron ore mining production commenced in 2011 with 1 million tonnes
produced. The targeted iron ore production in 2012 is 4 million tonnes.
As previously announced, the Company is considering a Phase 2 expansion
that would lead to annual production of 15 million tonnes by 2015. This
would require substantial investment in a concentrator, the approval
process of which remains in the final stages.
b) Ongoing projects refer to projects for which construction has begun
(excluding various projects that are under development), or have been
placed on hold pending improved operating conditions.
Analysis of segment operations
As from January 1, 2011 the Company’s mining operations are reported as
a separate operating segment. This change in segmentation reflects the
changes in ArcelorMittal’s approach to managing its mining operations,
i.e. a dedicated mining management team. Accordingly, as required by
IFRS, prior periods have been recast to reflect this new segmentation.
All raw materials consumed from ArcelorMittal mines that could
practically be sold outside the Company are now reported at market
prices. Production from “captive” mines (limited by logistics or
quality) continues to be reported at cost-plus to the steel facilities.
The principal impact of this change has been to increase the costs of
raw materials consumed by the FCA and AACIS segments.
Flat Carbon Americas
(USDm) unless otherwise shown
4Q 11
3Q 11
4Q 10
12M 11
12M 10
Sales
$5,030
$5,499
$4,573
$21,035
$17,684
EBITDA
237
420
158
2,109
1,555
Operating Income / (Loss)
1
193
(67)
1,198
691
Crude Steel Production (’000t)
6,009
5,866
5,636
24,215
23,101
Steel Shipments (’000t)
5,458
5,708
5,432
22,249
21,028
Average Steel Selling Price (US$/t)
868
910
769
892
781
EBITDA/tonne (US$/t)
43
74
29
95
74
Operating Income (loss) /tonne (US$/t)
0
34
(12)
54
33
Flat Carbon Americas crude steel production increased 2.4% to 6.0
million tonnes for the three months ended December 31, 2011, as compared
to 5.9 million tonnes for the three months ended September 30, 2011, due
in part to normalised North American production following downtime
during the third quarter of 2011, offset by lower production primarily
in South America operations.
Steel shipments for the three months ended December 31, 2011 were 5.5
million tonnes, 4.4% lower than the three months ended September 30,
2011. Shipments declined in all operations with the exception of the US
operations.
Sales in the Flat Carbon Americas segment were $5.0 billion for the
three months ended December 31, 2011, a decline of 8.5% as compared to
$5.5 billion for the three months ended September 30, 2011. Sales
decreased primarily due to lower average steel selling prices (-4.6%)
and steel shipment volumes.
EBITDA in the fourth quarter of 2011 declined by 43.6%, to $237 million
as compared to $420 million in the third quarter of 2011, driven
primarily by price cost squeeze in North America on account of lower
average steel selling prices and steel shipment volumes.
Flat Carbon Europe
(USDm) unless otherwise shown
4Q 11
3Q 11
4Q 10
12M 11
12M 10
Sales
$7,003
$7,696
$6,817
$31,062
$25,550
EBITDA
26
367
543
1,500
2,015
Operating Income / (Loss)
(569)
(106)
142
(324)
534
Crude Steel Production (’000t)
6,619
7,390
7,006
29,510
30,026
Steel Shipments (’000t)
6,188
6,385
6,593
27,123
27,510
Average Steel Selling Price (US$/t)
954
1,021
907
982
821
EBITDA/tonne (US$/t)
4
57
82
55
73
Operating Income (loss) /tonne (US$/t)
(92)
(17)
22
(12)
19
Flat Carbon Europe crude steel production amounted to 6.6 million tonnes
for the three months ended December 31, 2011, a decrease of 10.4% as
compared to 7.4 million tonnes for the three months ended September 30,
2011. Production decreased reflecting very weak market sentiment in
Europe and the reduction of inventories accumulated in the third quarter.
Steel shipments for the three months ended December 31, 2011 were 6.2
million tonnes, a decrease of 3.1% as compared to 6.4 million tonnes for
the three months ended September 30, 2011. Steel shipments decreased
during the fourth quarter of 2011 due to weaker market conditions and
strong destocking activity.
Sales in the Flat Carbon Europe segment were $7.0 billion for the three
months ended December 31, 2011, a decrease of 9.0% as compared to $7.7
billion for the three months ended September 30, 2011. Sales decreased
primarily due to lower steel shipment volumes and lower average steel
selling prices (-6.6%) impacted by base prices and currency effects.
EBITDA for the three months ended December 31, 2011 was $26 million, as
compared to $367 million for the three months ended September 30, 2011,
primarily driven by lower steel shipment volumes and significant price
cost squeeze.
Operating performance in the fourth quarter of 2011 was negatively
impacted by impairment charges of $56 million relating to various idled
facilities and restructuring costs totalling $143 million associated
with the implementation of the Asset Optimisation Plan primarily
relating to Spanish entities. These charges were offset however, by
several positive items: a DDH income $163 million recognized during the
quarter and a net gain of $93 million recorded on the sale of carbon
dioxide credits, the proceeds of which will be re-invested in energy
saving projects. Operating results in the third quarter of 2011 included
a DDH income of $129 million and $85 million in impairment charges
relating to costs associated with the announced intention to close the
two blast furnaces, sinter plant, steel shop and continuous casters in
Liege, Belgium.
For the comparable fourth quarter of 2010, operating results were
positively impacted by DDH income of $88 million and a gain of $140
million recorded on the sale of carbon dioxide credits, which were
partly offset by a $37 million impairment charge primarily relating to
idled downstream assets.
Long Carbon Americas and Europe
(USDm) unless otherwise shown
4Q 11
3Q 11
4Q 10
12M 11
12M 10
Sales
$5,936
$6,676
$5,567
$25,165
$21,315
EBITDA
338
438
315
1,866
2,075
Operating Income / (Loss)
(107)
185
28
646
1,004
Crude Steel Production (’000t)
5,474
5,611
5,325
23,558
22,550
Steel Shipments (’000t)
5,846
5,984
5,698
23,869
23,148
Average Steel Selling Price (US$/t)
906
967
837
937
802
EBITDA/tonne (US$/t)
58
73
55
78
90
Operating Income (loss) /tonne (US$/t)
(18)
31
5
27
43
Long Carbon Americas and Europe crude steel production amounted to 5.5
million tonnes for the three months ended December 31, 2011, a decrease
of 2.4% as compared to 5.6 million tonnes for the three months ended
September 30, 2011. Production was lower in the Americas due to drawdown
of inventory and overall weaker market demand.
Steel shipments for the three months ended December 31, 2011 were 5.8
million tonnes, a decrease of 2.3% as compared to 6.0 million tonnes for
the three months ended September 30, 2011, particularly due to the
summer holiday period in Brazil and lower demand in North America and
Europe.
Sales in the Long Carbon Americas and Europe segment were $5.9 billion
for the three months ended December 31, 2011, a decrease of 11.1%, as
compared to $6.7 billion for the three months ended September 30, 2011.
Sales decreased primarily due to lower steel shipments and lower average
selling prices (-6.3%).
EBITDA for the three months ended December 31, 2011 was $338 million, a
22.8% decrease as compared to $438 million for the three months ended
September 30, 2011, primarily due to lower steel shipment volumes and
lower average steel selling prices primarily reflecting currency effects.
Operating result in the fourth quarter of 2011 was negatively impacted
by impairment charges of $160 million of which $151 million related to
the extended idling of the ArcelorMittal Madrid electric arc furnace.
Asia Africa and CIS (“AACIS”)
(USDm) unless otherwise shown
4Q 11
3Q 11
4Q 10
12M 11
12M 10
Sales
$2,733
$2,619
$2,544
$10,779
$9,706
EBITDA
238
284
215
1,238
1,135
Operating Income
93
162
92
721
681
Crude Steel Production (’000t)
3,579
3,493
3,611
14,608
14,906
Steel Shipments (’000t)
3,065
3,005
3,392
12,516
13,266
Average Steel Selling Price (US$/t)
713
771
621
736
608
EBITDA/tonne (US$/t)
78
95
63
99
86
Operating Income / tonne (US$/t)
30
54
27
58
51
AACIS segment crude steel production was 3.6 million tonnes for the
three months ended December 31, 2011, an increase of 2.5% as compared to
3.5 million tonnes for the three months ended September 30, 2011. The
increase in the fourth quarter of 2011 was primarily due to improved
production in Ukrainian operations.
Steel shipments for the three months ended December 31, 2011 amounted to
3.1 million tonnes, an increase of 2% as compared to 3.0 million tonnes
for the three months ended September 30, 2011.
Sales in the AACIS segment were $2.7 billion for the three months ended
December 31, 2011, an increase of 4.4% as compared to $2.6 billion for
the three months ended September 30, 2011 primarily due to marginally
higher steel shipments, offset by lower average steel selling prices.
EBITDA for the three months ended December 31, 2011 was $238 million,
16.2% lower as compared to $284 million for the three months ended
September 30, 2011. EBITDA during the fourth quarter of 2011 declined
primarily due to lower average selling prices only partially offset by a
slight steel shipment volume increase.
Distribution Solutions10
(USDm) unless otherwise shown
4Q 11
3Q 11
4Q 10
12M 11
12M 10
Sales
$4,876
$4,899
$4,276
$19,055
$15,744
EBITDA / (loss)
(19)
48
87
271
456
Operating (Loss) / Income
(109)
8
(64)
52
166
Steel Shipments (’000t)
4,957
4,607
4,751
18,360
18,173
Average Steel Selling Price (US$/t)
948
1,010
864
993
832
Shipments in the Distribution Solutions segment for the three months
ended December 31, 2011 were 5.0 million tonnes, an increase of 7.6% as
compared to 4.6 million tonnes for the three months ended September 30,
2011.
Sales in the Distribution Solutions segment were $4.9 billion
essentially flat for the three months ended December 30, 2011, as
compared to the three months ended September 30, 2011, due primarily to
higher steel shipment volumes (+7.6%) partly offset by lower average
steel selling prices (-6.1%).
EBITDA loss for the three months ended December 31, 2011 was $(19)
million, as compared to EBITDA of $48 million for the three months ended
September 30, 2011, primarily due to price cost squeeze.
Operating performance in the fourth quarter of 2010 was negatively
impacted by impairment charges of $113 million relating to impairment on
certain subsidiaries, primarily reflecting the weak construction market
at that time.
Mining
USDm unless otherwise shown
4Q 11
3Q 11
4Q 10
12M 11
12M 10
Sales11
$1,805
$1,678
$1,217
$6,268
$4,380
EBITDA
779
842
570
3,063
2,263
Operating income
632
725
377
2,568
1,625
Own iron ore production (a) (Mt)
15.1
14.1
12.6
54.1
48.9
Iron ore shipped externally and internally at market price (b) (Mt)
8.5
6.7
6.7
28.0
25.2
Own coal production(a) (Mt)
2.2
2.1
1.8
8.3
7.0
Coal shipped externally and internally at market price(b) (Mt)
1.3
1.2
0.8
4.9
3.4
(a) Own iron ore and coal production excluding strategic long-term
contracts
(b) Iron ore and coal shipments of market-priced based materials include
the Company’s own mines, and share of production at other mines, and
exclude supply under strategic long-term contracts
Own iron ore production (excluding supplies under strategic long-term
contracts) increased 7.2% to 15.1 million tonnes for the three months
ended December 31, 2011, as compared to 14.1 million tonnes for the
three months ended September 30, 2011, primarily due to increased
production from Liberia and Mexico.
Own coal production for the three months ended December 31, 2011
increased to 2.2 million tonnes as compared to 2.1 million tonnes for
the three months ended September 30, 2011.
EBITDA attributable to the Mining segment for the three months ended
December 31, 2011 was $779 million, 7.5% lower as compared to $842
million for the three months ended September 30, 2011, primarily due to
lower average selling prices following the change to the seaborne
benchmark pricing system impacting a substantial proportion of
marketable volumes. The transition from 4 month lagged pricing to
current quarter average, together with lower market premiums for
Fe.content.
For the comparable fourth quarter of 2010, operating results was
negatively impacted by impairment charges of $186 million relating to
Company’s coal mines in Russia.
Liquidity and Capital Resources
For the three months ended December 31, 2011, net cash provided by
operating activities was $2.9 billion, compared to net cash provided by
operating activities of $0.8 billion for the three months ended
September 30, 2011. Cash flow provided by operating activities for the
fourth quarter of 2011 included a $1.8 billion release of operating
working capital as compared to an investment in operating working
capital of $1.0 billion in the third quarter of 2011. The working
capital release in the fourth quarter of 2011 primarily resulted from
lower inventories. Rotation days12 decreased to 67 days
during the fourth quarter of 2011 from 73 days in the third quarter of
2011.
Net cash used in investing activities for the three months ended
December 31, 2011 was $0.5 billion, as compared to $1.3 billion for the
three months ended September 30, 2011, with an increase in capital
expenditure offset by investment divestiture proceeds. Capital
expenditures increased to $1.5 billion for the three months ended
December 31, 2011 as compared to $1.3 billion for the three months ended
September 30, 2011. Capital expenditures increased to $4.8 billion for
the twelve months ended December 31, 2011 as compared to $3.3 billion
for the twelve months ended December 31, 2010. In light of recent market
uncertainty primarily due to the European debt crisis and its potential
global impact, the Company will continue to calibrate its steel growth
projects to evolving demand situations; at the same time the Company is
focusing on core growth capex in its mining business given their
generally more attractive return profiles. This has resulted in
postponement of some planned steel investments. Accordingly, full year
2012 capital expenditure is expected to be approximately $4-4.5 billion.
Other investing activities in the fourth quarter of 2011 of $941 million
include an inflow of $796 million from the sale of the Company’s stake
in MacArthur Coal and $129 million relating to the sale of the Company’s
12% stake in Baosteel-NSC/Arcelor (BNA) Automotive Co.
Net cash used by financing activities for the three months ended
December 31, 2011 was $1.2 billion, as compared to cash provided by
financing activities of $0.3 billion for the three months ended
September 30, 2011.
During the fourth quarter of 2011, the Company repaid loans for a net
amount of $816 million primarily related to a reduction in commercial
paper and bank loans. Additionally, during the fourth quarter of 2011,
the Company paid dividends amounting to $289 million as compared to $309
million in the third quarter of 2011. Dividends paid during the fourth
quarter of 2011 included $7 million paid to minority shareholders.
During the third quarter of 2011, the Company received a $250 million
cash inflow from the increase in the privately placed mandatorily
convertible bond issued on December 28, 2009 by one of its wholly-owned
Luxembourg subsidiaries.
At December 31, 2011, the Company’s cash and cash equivalents (including
restricted cash and short-term investments) amounted to $3.9 billion as
compared to $2.8 billion at September 30, 2011. During the quarter, net
debt decreased by $2.4 billion to $22.5 billion, as compared with $24.9
billion at September 30, 2011, driven by improved cash flow from
operations, inflow from the Macarthur Coal divestment, and foreign
exchange gains (effect of USD appreciation on euro denominated debt).
The Company will continue to seek to reduce net debt through its focus
on working capital management and potential non-core asset disposals.
The Company had liquidity13 of $12.5 billion at December 31,
2011, an increase of $1.2 billion as compared with liquidity of $11.3
billion at September 30, 2011, consisting of cash and cash equivalents
(including restricted cash and short-term investments) of $3.9 billion
and $8.6 billion of available credit lines.
Dividend maintained at $0.75 per share for 2012
The Board of Directors will submit to a shareholders’ vote, at the next
annual general meeting, a proposal to maintain the quarterly dividend
payment at $0.1875 per share. The dividend payments would occur on a
quarterly basis for the full year 2012, on March 13, 2012, June 14,
2012, September 10, 2012 and December 10, 2012, taking into account that
the first quarter dividend payment to be paid on March 13, 2012 shall be
an interim dividend.
Payment of the final quarterly 2011 dividend of $0.1875 per share was
made on December 12, 2011.
Update on management gains program and asset optimization plan
At the end of the fourth quarter of 2011, the Company’s annualized
sustainable management gains increased to $4.0 billion as compared to
$3.8 billion at September 30, 2011 (excluding Aperam). The Company
maintains its target (based on the revised plan excluding Aperam) to
reach management gains of $4.8 billion from sustainable SG&A, fixed cost
reductions and continuous improvement by the end of 2012.
Progress has been made on the Asset Optimization Plan launched in
September 2011 to generate annualized $1 billion sustainable EBITDA
improvement by the end of 2012:
The Company announced its intention to close two blast furnaces,
sinter plant, steel shop and continuous casters in Liege, Belgium;
negotiations with employee representatives ongoing;
Extended downtime of certain Spanish electric arc furnaces (including
ArcelorMittal Madrid) and further restructuring costs at certain other
Spanish and Czech Republic entities and AMDS operations.
Outlook and guidance
The Company’s EBITDA in 1H 2012 is expected to be lower than 1H 2011 but
above 2H 2011, supported by continued progress on management gains and
asset optimisation plans.
The Company expects steel shipments in the first half of 2012 to be at a
similar level to first half of 2011. Mining production is expected to be
higher than in the first half of 2011 in line with plans to increase
full year 2012 own iron ore and coal production by approximately 10%.
2012 Capex budget is expected to be approximately $4-$4.5 billion
including mining growth plans. A further reduction in net debt is
anticipated due to a continued focus on working capital management and
non-core asset divestments, per the Company’s stated objective to retain
its investment grade credit rating.
ArcelorMittal condensed consolidated statements of financial position
December 31,
September 30,
December 31,
In millions of U.S. dollars
2011
2011
201014
ASSETS
Cash and cash equivalents including restricted cash
$3,905
$2,800
$6,289
Trade accounts receivable and other
6,452
8,194
5,725
Inventories
21,689
23,397
19,583
Prepaid expenses and other current assets
3,559
4,246
4,160
Assets held for distribution
-
-
6,918
Total Current Assets
35,605
38,637
42,675
Goodwill and intangible assets
14,053
14,683
14,373
Property, plant and equipment
54,251
54,052
54,344
Investments in affiliates and joint ventures and other assets
17,971
19,956
19,512
Total Assets
$121,880
$127,328
$130,904
LIABILITIES AND SHAREHOLDERS’ EQUITY
Short-term debt and current portion of long-term debt
$2,784
$3,626
$6,716
Trade accounts payable and other
12,836
13,772
13,256
Accrued expenses and other current liabilities
8,204
8,527
8,714
Liabilities held for distribution
-
-
2,037
Total Current Liabilities
23,824
25,925
30,723
Long-term debt, net of current portion
23,634
24,061
19,292
Deferred tax liabilities
3,680
3,678
4,006
Other long-term liabilities
10,265
10,288
10,783
Total Liabilities
61,403
63,952
64,804
Equity attributable to the equity holders of the parent
56,690
59,586
62,430
Non–controlling interests
3,787
3,790
3,670
Total Equity
60,477
63,376
66,100
Total Liabilities and Shareholders’ Equity
$121,880
$127,328
$130,904
ARCELORMITTAL CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended
Twelve months ended
December 31,
September 30,
December 31,
December 31,
December 31,
In millions of U.S. dollars
2011
2011
2010
2011
2010
Sales
$22,449
$24,214
$20,699
$93,973
$78,025
Depreciation
(1,220)
(1,155)
(1,075)
(4,669)
(4,395)
Impairment
(228)
(85)
(381)
(331)
(525)
Restructuring charges
(219)
-
-
(219)
-
Operating income
47
1,168
397
4,898
3,605
Operating margin %
0.2%
4.8%
1.9%
5.2%
4.6%
Income from equity method investments and other income
177
6
74
620
451
Net interest expense
(429)
(477)
(413)
(1,822)
(1,445)
Mark to market on convertible bonds
(13)
59
(293)
42
427
Foreign exchange and other net financing gains (losses)
26
26
(494)
(1,058)
(1,182)
Income (loss) before taxes and non-controlling interest
(192)
782
(729)
2,680
1,856
Current Tax
(185)
(209)
(145)
(1,018)
(821)
Deferred Tax
(648)
55
595
136
2,300
Income tax benefit (expense)
(833)
(154)
450
(882)
1,479
Income / (loss) from continuing operations including non-controlling
interests
(1,025)
628
(279)
1,798
3,335
Non-controlling interests (relating to continuing operations)
25
31
46
4
(89)
Income / (loss) from continuing operations
(1,000)
659
(233)
1,802
3,246
Income / (loss) from discontinued operations, net of tax
0
0
(547)
461
(330)
Net income / (loss) attributable to owners of the parent
$(1,000)
$659
$(780)
$2,262
$2,916
Basic earnings / (loss) per common share
(0.65)
0.43
(0.51)
1.46
1.93
Diluted earnings / (loss) per common share
(0.65)
0.19
(0.51)
1.19
1.72
Weighted average common shares outstanding (in millions)
1,549
1,549
1,515
1,549
1,512
Adjusted diluted weighted average common shares outstanding (in
millions)
1,549
1,611
1,516
1,611
1,600
EBITDA3
$1,714
$2,408
$1,853
$10,117
$8,525
EBITDA Margin %
7.6%
9.9%
9.0%
10.8%
10.9%
OTHER INFORMATION
Total iron ore production15
18.3
17.4
18.9
65.2
68.5
Crude steel production (million metric tonnes)
21.7
22.4
21.6
91.9
90.6
Total shipments of steel products16
20.6
21.1
21.1
85.8
85.0
Employees (in thousands)
261
265
263
261
263
ARCELORMITTAL CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
In millions of U.S. dollars
Three Months Ended
Twelve Months Ended
December 31, 2011
September 30, 2011
December 31, 2010
December 31, 2011
December 31, 2010
Operating activities:
Net income / (loss) from continuing operations
$(1,000)
$659
$(233)
$1,802
$3,246
Adjustments to reconcile net income (loss) to net cash provided
by operations:
Non-controlling interest
(25)
(31)
(46)
(4)
89
Depreciation and impairment
1,448
1,240
1,456
5,000
4,920
Restructuring charges
219
-
-
219
-
Deferred income tax
648
(55)
(595)
(136)
(2,300)
Change in operating working capital17
1,843
(1,013)
2,139
(3,825)
(2,531)
Other operating activities (net)
(255)
(30)
602
(1,089)
346
Net cash provided by operating activities – Continued operations
2,878
770
3,323
1,967
3,770
Net cash (used in) provided by operating activities – Discontinued
operations
-
-
245
(190)
245
Net cash provided by operating activities
2,878
770
3,568
1,777
4,015
Investing activities:
Purchase of property, plant and equipment and intangibles
(1,475)
(1,267)
(1,379)
(4,838)
(3,308)
Other investing activities (net)
941
(31)
235
1,265
(28)
Net cash used in investing activities – Continued operations
(534)
(1,298)
(1,144)
(3,573)
(3,336)
Net cash used in investing activities – Discontinued operations
-
-
(34)
(105)
(102)
Net cash used in investing activities
(534)
(1,298)
(1,178)
(3,678)
(3,438)
Financing activities:
Proceeds relating to payable to banks and long-term debt
(816)
407
991
537
1,992
Dividends paid
(289)
(309)
(335)
(1,194)
(1,257)
Proceeds from mandatorily convertible bond
-
250
-
250
-
Premium paid for call option
-
-
(1,363)
-
(1,363)
Sale of treasury shares
-
-
1,363
-
1,363
Acquisition of non-controlling interest
(10)
(7)
(4)
(108)
(593)
Other financing activities (net)
(37)
(47)
(28)
(17)
(101)
Net cash (used in) provided by financing activities – Continued
operations
(1,152)
294
624
(532)
41
Net cash (used in) financing activities – Discontinued operations
-
-
(12)
(8)
(48)
Net cash (used in) provided by financing activities
(1,152)
294
612
(540)
(7)
Net (decrease) increase in cash and cash equivalents
1,192
(234)
3,002
(2,441)
570
Transferred to held for sale
-
-
(123)
-
(123)
Effect of exchange rate changes on cash
(85)
(178)
(58)
(68)
(159)
Change in cash and cash equivalents
$1,107
$(412)
$2,821
$(2,509)
$288
Appendix 1a: Key financial and operational information – Fourth Quarter
of 2011
USDm unless otherwise shown
Flat Carbon Americas
Flat Carbon Europe
Long Carbon Americas and Europe
AACIS
Distribution Solutions
Mining
FINANCIAL INFORMATION
Sales
$5,030
$7,003
$5,936
$2,733
$4,876
$1,805
Depreciation and impairment
(236)
(452)
(408)
(145)
(50)
(147)
Restructuring charges
-
(143)
(37)
-
(40)
-
Operating income (loss)
1
(569)
(107)
93
(109)
632
Operating margin (as a % of sales)
0.0%
(8.1%)
(1.8%)
3.4%
(2.2%)
35.0%
EBITDA
3
237
26
338
238
(19)
779
EBITDA margin (as a % of sales)
4.7%
0.4%
5.7%
8.7%
(0.4%)
43.2%
Capital expenditure18
228
238
359
126
58
453
OPERATIONAL INFORMATION
Crude steel production (Thousand MT)
6,009
6,619
5,474
3,579
-
-
Steel shipments (Thousand MT)
5,458
6,188
5,846
3,065
4,957
-
Average steel selling price ($/MT)19
868
954
906
713
948
-
MINING INFORMATION (Million Mt)
Iron ore production15
-
-
-
-
-
18.3
Coal production15
-
-
-
-
-
2.4
Iron ore shipped externally and internally at market price4
-
-
-
-
-
8.5
Iron ore shipped internally at cost-plus4
-
-
-
-
-
6.8
Coal shipment shipped externally and internally at market price4
-
-
-
-
-
1.3
Coal shipped internally at cost-plus4
-
-
-
-
-
0.8
Appendix 1b: Key financial and operational information – Twelve Months
of 2011
USDm unless otherwise shown
Flat Carbon Americas
Flat Carbon Europe
Long Carbon Americas and Europe
AACIS
Distribution Solutions
Mining
FINANCIAL INFORMATION
Sales
$21,035
$31,062
$25,165
$10,779
$19,055
$6,268
Depreciation and impairment
(911)
(1,681)
(1,183)
(517)
(179)
(495)
Restructuring charges
-
(143)
(37)
-
(40)
-
Operating income
1,198
(324)
646
721
52
2,568
Operating margin (as a % of sales)
5.7%
(1.0%)
2.6%
6.7%
0.3%
41.0%
EBITDA
3
2,109
1,500
1,866
1,238
271
3,063
EBITDA margin (as a % of sales)
10.0%
4.8%
7.4%
11.5%
1.4%
48.9%
Capital expenditure18
664
1,004
1,119
613
152
1,269
OPERATIONAL INFORMATION
Crude steel production (Thousand MT)
24,215
29,510
23,558
14,608
-
-
Steel shipments (Thousand MT)
22,249
27,123
23,869
12,516
18,360
-
Average steel selling price ($/MT) 19
892
982
937
736
993
-
MINING INFORMATION (Million Mt)
Iron ore production15
-
-
-
-
-
65.2
Coal production15
-
-
-
-
-
8.9
Iron ore shipped externally and internally at market price4
-
-
-
-
-
28.0
Iron ore shipped internally at cost-plus4
-
-
-
-
-
23.6
Coal shipment shipped externally and internally at market price4
-
-
-
-
-
4.9
Coal shipped internally at cost-plus4
-
-
-
-
-
3.3
Appendix 2a: Steel Shipments by geographical location20
(Amounts in thousands tonnes)
4Q 11
3Q 11
4Q 10
12M 11
12M 10
Flat Carbon America:
5,458
5,708
5,432
22,249
21,028
North America
4,206
4,271
3,877
17,084
15,283
South America
1,252
1,437
1,555
5,165
5,745
Flat Carbon Europe:
6,188
6,385
6,593
27,123
27,510
Long Carbon Americas and Europe:
5,846
5,984
5,698
23,869
23,148
North America
1,134
1,190
1,060
4,584
4,245
South America
1,448
1,471
1,312
5,660
5,280
Europe
2,993
3,037
3,018
12,547
12,656
Other21
271
286
308
1,078
967
AACIS:
3,065
3,005
3,392
12,516
13,266
Africa
980
1,109
1,179
4,624
4,960
Asia, CIS & Other
2,085
1,896
2,213
7,892
8,306
Appendix 2b: Steel EBITDA3 by geographical location
Amounts in USDm
4Q 11
3Q 11
4Q 10
12M 11
12M 10
Flat Carbon America:
$237
$420
$158
$2,109
$1,555
North America
166
366
101
1,615
689
South America
71
54
57
494
866
Flat Carbon Europe:
26
367
543
1,500
2,015
Long Carbon Americas and Europe:
338
438
315
1,866
2,075
North America
11
51
-25
131
65
South America
196
227
184
939
1,394
Europe
58
84
78
518
415
Other21
73
76
78
278
201
AACIS:
238
284
215
1,238
1,135
Africa
9
-7
-34
232
453
Asia, CIS & Other
229
291
249
1,006
682
Distribution Solutions:
-19
48
87
271
456
Appendix 2c: Iron ore production (million metric tonnes)
Million metric tonnes (a)
Type
Product
4Q 11
3Q 11
4Q 10
12M 11
12M 10
North America (b)
Open Pit
Concentrate and Pellets
8.0
7.8
7.1
29.7
27.8
South America
Open pit
Lump and Sinter feed
1.4
1.3
1.4
5.3
4.9
Europe
Open pit
Lump and fines
0.5
0.6
0.3
1.9
1.4
Africa
Open Pit / Underground
Lump and fines
1.3
0.7
0.3
2.6
1.1
Asia, CIS & Other
Open Pit / Underground
Concentrate, lump and fines
3.9
3.7
3.4
14.6
13.8
Own iron ore production
15.1
14.1
12.6
54.1
48.9
North America(c)
Open Pit
Pellets
1.9
1.8
4.6
4.6
12.5
Africa (d)
Open Pit
Lump and Fines
1.3
1.4
1.8
6.5
7.0
Strategic contracts – iron ore
3.2
3.3
6.3
11.1
19.6
Group
18.3
17.4
18.9
65.2
68.5
a) Total of all finished production of fines, concentrate, pellets and
lumps.
b) Includes own mines and share of production from Hibbing (USA-62.30%)
and Pena (Mexico-50%).
c) Includes two long term supply contracts with Cleveland Cliffs for
periods prior to 2011. On April 8, 2011, arcelormittal announced that it
had reached a negotiated settlement with Cliffs Natural Resources Inc.
(“Cliffs”) regarding all pending contract disputes related to the
procurement of iron ore pellets for certain facilities in the U.S. As
part of the settlement, Cliffs and arcelormittal agreed to specific
pricing levels for 2009 and 2010 pellet sales and related volumes and,
beginning in 2011, to replace the previous pricing mechanism in one of
the parties’ iron ore supply agreements with a world market-based
pricing mechanism Accordingly as from the first quarter of 2011, this
excludes the long term supply contract for which settlement was reached.
d) Includes long term lease – prices on a cost-plus basis and purchases
made under the July 2010 interim agreement with Kumba (South Africa).
Appendix 2d: Iron ore shipments (million metric tonnes)
Millions metric tonnes
4Q 11
3Q 11
4Q 10
12M 11
12M 10
External sales – Third party
4.4
2.1
2.4
9.0
7.0
Internal sales – Market-priced
4.1
4.6
4.3
19.0
18.2
Internal sales – Cost-plus basis
6.8
6.9
5.8
23.6
21.6
FCA
2.6
2.6
2.0
7.9
6.1
Long
1.1
1.4
0.9
4.4
3.8
AACIS
3.2
2.9
2.9
11.3
11.6
Total sales
15.3
13.5
12.5
51.6
46.7
Strategic contracts
3.2
3.3
6.3
11.1
19.6
FCA
1.9
1.8
4.6
4.6
12.5
AACIS
1.3
1.4
1.8
6.5
7.0
Total
18.5
16.8
18.9
62.7
66.3
Appendix 2d: Coal production (Million metric tonnes)
Million metric tonnes
4Q 11
3Q 11
4Q 10
12M 11
12M 10
North America
0.69
0.57
0.49
2.43
2.25
Asia, CIS & Other
1.53
1.53
1.29
5.90
4.71
Own coal production
2.22
2.10
1.78
8.32
6.96
North America(a)
0.14
0.05
0.06
0.32
0.22
Africa(b)
0.07
0.07
0.04
0.30
0.21
Strategic contracts – coal(a),(b)
0.21
0.12
0.10
0.62
0.43
Group
2.43
2.22
1.88
8.94
7.39
(a) Includes strategic agreement – prices on a cost-plus basis
(b) Includes long term lease – prices on a cost-plus basis
Appendix 2e: Coal shipment (Million metric tonnes)
Million metric tonnes
4Q 11
3Q 11
4Q 10
12M 11
12M 10
External sales – Third party
0.94
0.80
0.51
3.49
2.12
Internal sales – Market-priced
0.35
0.42
0.29
1.43
1.26
Internal sales (AACIS) – Cost-plus basis
0.82
0.83
0.86
3.31
3.17
Total sales
2.11
2.05
1.67
8.23
6.55
Strategic contracts
0.21
0.12
0.10
0.62
0.43
Total
2.31
2.17
1.77
8.85
6.98
Appendix 3: Debt repayment schedule as of December 31, 2011
Debt repayment schedule ($ billion)
2012
2013
2014
2015
2016
>2016
Total
Term loan repayments
-
– Convertible bonds
-
0.1
2.1
-
-
2.2
– Bonds
-
3.4
1.3
1.7
1.8
9.2
17.4
Subtotal
-
3.5
3.4
1.7
1.8
9.2
19.6
LT revolving credit lines
– $6bn syndicated credit facility
-
-
-
-
1.7
-
1.7
– $4bn syndicated credit facility
-
-
-
-
-
-
-
– $0.3bn bilateral credit facility
-
-
-
-
-
-
-
Commercial paper22
0.6
-
-
-
-
-
0.6
Other loans
2.2
0.5
0.3
0.3
0.7
0.5
4.5
Total Gross Debt
2.8
4.0
3.7
2.0
4.2
9.7
26.4
Appendix 4: Credit lines available as of December 31, 2011
Credit lines available ($ billion)
Maturity
Equiv. $
Drawn
Available
– $6bn syndicated credit facility
18/03/2016
$6.0
$1.7
$4.3
– $4bn syndicated credit facility
06/05/2015
$4.0
-
$4.0
– $0.3bn bilateral credit facility
30/06/2013
$0.3
$0.0
$0.3
Total committed lines
$10.3
$1.7
$8.6
Appendix 5 – Other ratios
Ratios
4Q 11
3Q 11
Gearing23
37%
39%
Net debt to average EBITDA ratio based on yearly average EBITDA from
Jan 1, 2004
1.6X
1.7X
Net debt to EBITDA ratio based on last twelve months EBITDA
2.2X
2.4X
Appendix 6: Earnings per Share
Three months ended
Twelve months ended
Dec 30,
Sept 30,
Dec 30,
Dec 30,
Dec 30,
In U.S. dollars
2011
2011
2010
2011
2010
Earnings per share – Discontinued operations
Basic earnings (loss) per common share
0.00
0.00
(0.36)
0.30
(0.22)
Diluted earnings (loss) per common share
0.00
0.00
(0.36)
0.29
(0.20)
Earnings per share – Continued operations
Basic earnings (loss) per common share
(0.65)
0.43
(0.15)
1.16
2.15
Diluted earnings (loss) per common share
(0.65)
0.19
(0.15)
0.90
1.92
Earnings per share
Basic earnings (loss) per common share
(0.65)
0.43
(0.51)
1.46
1.93
Diluted earnings (loss) per common share
(0.65)
0.19
(0.51)
1.19
1.72
Appendix 7: EBITDA Bridge between 3Q 11 v 4Q 11
USD millions
EBITDA 3Q 11
Volume & Mix (a)
Price-cost (b)
Non -Steel EBITDA (c)
Other (d)
EBITDA 4Q 11
Group
2,408
(127)
(673)
18
88
1,714
a) The volume variance indicates the sales value gain/loss through
selling a higher/lower volume compared to the reference period, valued
at reference period contribution (selling price–variable cost). The
product/shipment mix variance indicates sales value gain/loss through
selling different proportion of mix (product, choice, customer, market
including domestic/export), compared to the reference period
contribution.
b) The price-cost variance is a combination of the selling price and
cost variance. The selling price variance indicates the sales value
gain/loss through selling at a higher/lower price compared to the
reference period after adjustment for mix, valued with the current
period volumes sold. The cost variance indicates increase/decrease in
cost (after adjustment for mix, one time items, non-steel cost and
others) compared to the reference period cost. Cost variance includes
the gain/loss through consumptions of input materials at a higher
price/lower price, movement in fixed cost, changes in valuation of
inventory due to movement in capacity utilization etc.
c) Non-steel EBITDA variance primarily represents the gain/loss through
the sale of by-products.
d) Other represents the gain/loss through movements in provisions
including write downs, write backs of inventory, onerous contracts,
reversal of provisions, dynamic delta hedge on raw materials, foreign
exchange etc as compared to the reference period.
Appendix 8: Capex18
Capex USD millions
4Q 11
3Q 11
4Q 10
12M 11
12M 10
Flat Carbon Americas
228
173
171
664
574
Flat Carbon Europe
238
266
364
1,004
792
Long Carbon
359
280
293
1,119
687
Asia, Africa and CIS
126
184
171
613
515
Distribution Solutions
58
34
63
152
124
Mining
453
319
260
1,269
525
Note: Table excludes analysis on account of others and eliminations.
Appendix 9: End notes
1 The financial information in this press release has been
prepared in accordance with International Financial Reporting Standards
(“IFRS”) as issued by the International Accounting Standards Board
(“IASB”). While the interim financial information included in this
announcement has been prepared in accordance with IFRS applicable to
interim periods, this announcement does not contain sufficient
information to constitute an interim financial report as defined in
International Accounting Standards 34, “Interim Financial Reporting”.
Unless otherwise noted the numbers in the press release have not been
audited. The financial information and certain other information
presented in a number of tables in this press release have been rounded
to the nearest whole number or the nearest decimal. Therefore, the sum
of the numbers in a column may not conform exactly to the total figure
given for that column. In addition, certain percentages presented in the
tables in this press release reflect calculations based upon the
underlying information prior to rounding and, accordingly, may not
conform exactly to the percentages that would be derived if the relevant
calculations were based upon the rounded numbers.
2 Lost time injury frequency rate equals lost time injuries
per 1,000,000 worked hours, based on own personnel and contractors.
3 EBITDA is defined as operating income plus depreciation,
impairment expenses and exceptional items (i.e. $219 million
restructuring charge in the fourth quarter of 2011 and full year 2011).
4 Market price tonnes represent amounts of iron ore and coal
from ArcelorMittal mines that could be sold to third parties on the open
market. Market priced tonnes that are not sold to third parties are
transferred from the Mining segment to the Company’s steel producing
segments at the prevailing market price. Shipments of raw materials that
do not constitute market price tonnes are transferred internally on a
cost-plus basis.
5 Net debt refers to long-term debt, plus short term debt,
less cash and cash equivalents, restricted cash and short-term
investments.
6 This relates to a transaction (a “dynamic delta hedge”)
designed to hedge U.S. dollar-denominated raw material purchases until
2012 that ArcelorMittal entered into in mid-2008 and unwound in late
2008. The unwind resulted, among other accounting effects, in a deferred
gain of approximately $2.6 billion recorded in equity which, along with
the recording of hedged expenses, is being recycled in the statement of
operations during the 2009-2013 period. Of this amount, $163 million was
recorded as income for the three months ended December 31, 2011 and $600
million was recorded as income for the year ended December 31, 2011.
7 The Company’s investment in Macarthur is accounted for
under the equity method. As a result of the Company’s decision to
withdraw from the joint venture with Peabody Energy to acquire ownership
of Macarthur Coal, the Company recognized an impairment loss of $119
million in the third quarter of 2011. The impairment for the full year
2011 was $107 million reducing since the third quarter 2011 as a result
of the increase in the sale price from AUD16.00 to AUD16.25. This charge
reflects a higher carrying value of the investment in Macarthur, which
included accrued share of net income. After considering dividends
received and changes in exchange rate through October 25, 2011 (date of
the divestiture announcement) the transaction was essentially cash
neutral.
8 On December 14, 2010 and December 18, 2010, respectively,
the Company acquired 61.7 million euro-denominated call options and 26.5
million dollar-denominated call options on its own shares in order to
hedge its obligations under these convertible bonds.
9 Foreign exchange and other net financing costs include
foreign currency swaps, bank fees, interest on pensions, impairments of
financial instruments and revaluation of derivative instruments.
10 As from January 1, 2011 the Steel Solutions and Services
segment has been renamed ArcelorMittal Distribution Solutions (AMDS).
11 There are three categories of sales: 1) “External sales”:
mined product sold to third parties at market price; 2) “Market-priced
tonnes”: internal sales of mined product to ArcelorMittal facilities at
prevailing market prices; 3) “Cost-plus tonnes” – internal sales of
mined product to ArcelorMittal facilities on a cost-plus basis. The
determinant of whether internal sales are transferred at market price or
cost-plus is whether or not the raw material could practically be sold
to third parties (i.e. there is a potential market for the product and
logistics exist to access that market).
12 Rotation days are defined as days of accounts receivable
plus days of inventory minus days of accounts payable. Days of accounts
payable and inventory are a function of cost of goods sold. Days of
accounts receivable are a function of sales.
13 Includes back-up lines for the commercial paper program of
approximately $2.6 billion (€2 billion).
14 In accordance with IFRS the Company has adjusted the 2009
financial information retrospectively for the finalization in 2010 of
the allocation of purchase price for certain business combinations
carried out in 2009. The adjustments have been reflected in the
Company’s consolidated financial statements for the year ended December
31, 2010.
15 Total of all finished production of fines, concentrate,
pellets and lumps (includes share of production and strategic long-term
contracts). (million metric tonnes)
16 ArcelorMittal Distribution Solutions shipments are
eliminated in consolidation as they primarily represent shipments
originating from other ArcelorMittal operating subsidiaries. (million
metric tonnes)
17 Changes in operating working capital are defined as trade
accounts receivable plus inventories less trade accounts payable.
18 Capex includes the acquisition of intangible assets (such
as concessions for mining and IT support).
19 Average steel selling prices are calculated as steel sales
divided by steel shipments.
20 Shipments originating from a geographical location.
21 Includes Tubular products business.
22 Commercial paper is expected to continue to be rolled over
in the normal course of business.
23 Gearing is defined as (A) long-term debt, plus short-term
debt, less cash and cash equivalents, restricted cash and short-term
investments, divided by (B) total equity.
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