ArcelorMittal Q3 Earnings Call Highlights

Key Points

• ArcelorMittal’s third-quarter EBITDA rose 34% year over year to $2 billion, while EBITDA per ton increased to $155, reflecting portfolio changes and improved execution.
• European flat-steel imports fell about 50% year over year and shipments increased sequentially; the company expects European shipments to grow by a double-digit percentage in Q4, with the full benefits of new trade protections and contract repricing expected in 2027.
• ArcelorMittal expects seasonal working-capital releases to support Q4 free cash flow and debt reduction, and is considering returning more than its policy’s 50% of free cash flow to shareholders, potentially through additional buybacks.

ArcelorMittal NYSE: MT reported third-quarter earnings before interest, taxes, depreciation and amortization of $2 billion, up 34% from a year earlier, and said lower European steel imports and improving shipments could support further earnings growth in 2027.

EBITDA per ton rose to $155, an increase of $44 from a year earlier and well above historical averages, Chief Financial Officer Genuino Christino said on the company’s earnings call. He attributed the improvement to portfolio changes and execution of the company’s strategy.

Christino said the results had yet to reflect the full benefits of Europe’s new tariff-rate quota framework. Steel price increases take time to flow through the company’s order book, while approximately 25% of its European flat-product volumes remain on annual contracts that have yet to reset.

European shipments expected to accelerate

European flat steel imports fell approximately 50% from a year earlier in the third quarter, Christino said. ArcelorMittal’s European flat-product shipments increased from the second quarter, contrary to the usual seasonal pattern.

The company expects European flat-product shipment growth to accelerate in the fourth quarter and rise by a double-digit percentage from a year earlier. Christino said customer inventories have cushioned the effect of lower imports on domestic shipments, but he expects destocking to largely end in the fourth quarter.

“We will really see the full benefits of the new framework, of course, in 2027,” Christino said. He added that European real demand was relatively stable, automotive demand remained resilient and the company was fully booked for the fourth quarter.

Investor relations executive Daniel Fairclough said most of the European annual flat-product contracts are with automotive customers and that a significant majority follow the calendar year, making them due for repricing at the start of 2027.

ArcelorMittal has restarted blast furnaces in Dąbrowa, Poland; Asturias, Spain; and Fos, France. Christino said the Polish furnace had largely completed its ramp-up, the Spanish furnace was running well and Fos was still ramping up. The company is bringing back capacity in response to stronger order books, he said.

Higher European energy costs remain a headwind. Fairclough said the fourth-quarter earnings outlook includes higher costs alongside generally higher steel prices and volumes, although pricing in Brazil could be more stable because of product mix.

North America and growth projects

In North America, Christino said a strike affecting the Canadian long-products business and reliability problems at a direct reduced iron facility in Mexico had been resolved. He put third-quarter volume losses from the two events at approximately 150,000 tons.

Despite recovery from those disruptions, Christino expects North American shipments to be flat in the fourth quarter because of normal seasonality and maintenance.

The ramp-up of the electric arc furnace at Calvert is progressing more slowly than expected, he said, but the company expects to exit the year at a good run rate. Producing more steel locally should reduce the need for imported slabs subject to tariffs and support North American profitability in 2027, he added.

In India, Christino said the company expects higher volumes from its Hazira expansion in 2027, particularly in the second half. The downstream cold mill and automotive finishing lines have been commissioned, while work continues on the upstream facilities.

At the Liberia mining project, the company shipped approximately 10.5 million tons in the first nine months and is guiding for 16 million tons for the year, Christino said. He expects the project to operate at capacity for the first time in the fourth quarter, with rail and port capacity in place to reach 20 million tons in 2027.

Cash flow and capital allocation

ArcelorMittal expects a seasonal release of working capital to support fourth-quarter free cash flow and reduce debt. Christino said the company would continue to apply its capital allocation policy but would seriously discuss deploying more than the 50% called for under that policy, given its business outlook.

Fairclough said using free cash flow for share buybacks beyond the minimum 50% would appear appropriate. Christino also said the company’s existing annual capital expenditure range of $4.5 billion to $5 billion remains a good reference for spending going forward.

About ArcelorMittal (NYSE:MT)

ArcelorMittal is a global steel and mining company that produces steel products for customers across industries including automotive, construction, energy, appliances and packaging. Its offerings include flat and long steel products, as well as iron ore and metallurgical coal used in steelmaking.

The company operates across the Americas, Europe and other regions, combining mining and steelmaking activities with research and product development. ArcelorMittal was formed in 2006 through the merger of Arcelor and Mittal Steel.

Aditya Mittal is the company's chief executive officer, and Lakshmi N.

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