ArcelorMittal Q3 2026 Earnings Call Transcript

ArcelorMittal (NYSE:MT) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

ArcelorMittal reported a 34% year-on-year increase in Q3 EBITDA to $2 billion, with EBITDA per ton rising to $155, driven by portfolio optimization and strategic execution.

The company is seeing a decrease in steel imports by 50% in Europe, leading to higher domestic shipments and the restart of idle capacities, with expectations of accelerated shipment growth and double-digit year-on-year improvement in Q4.

ArcelorMittal is optimistic about 2027, expecting higher earnings and stronger returns due to ramping up capacity in India, new shipment records in North America, and improved trade protections.

Operational highlights include bringing European blast furnaces back online and resolving issues in North America, with expected higher utilization supporting profitability.

Management highlights a disciplined capital allocation framework, continued investment in high-return projects, and potential for increased shareholder value through buybacks, given a strong cash flow outlook.

Full Transcript

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

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 third quarter of 2026. Leading today’s call will be our CFO, Mr. Genuino Christino. 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 do want to draw your attention to the disclaimers on slide 24 of that presentation. Following some opening remarks from Genuino, we will move directly to the Q&A session. So if you’d like to ask a question, then please do press star-one on your keypad to join the queue.

And with that, I will hand the call over to Genuino.

Genuino Christino (Chief Financial Officer)

Thanks, Daniel. Welcome everyone and thanks for joining today’s call. As usual, I will keep my remarks brief. Let me begin with safety, which remains our highest priority. We are now approaching the end of the second year of our safety transformation. Through disciplined execution of our safety roadmaps, we are seeing more consistent performance across the group. This is encouraging and we remain firmly focused on our ambition of achieving zero fatalities and zero serious injuries as quickly as possible.

Turning now to the business, I would like to focus on three key points. First, our results continue to demonstrate the structural improvements in margins. Third quarter EBITDA was $2 billion, up 34% year on year. EBITDA per ton increased to $155, which is $44 higher than a year ago and well above historical averages. This demonstrates that our portfolio optimization and strategic execution are delivering results and I believe there is significantly more to come.

Importantly, these results do not yet reflect the full benefit of the new European trade framework which is restoring sustainability to the European steel industry. And given the length of our order book, the increases in steel prices flow through to earnings with a lag. In addition, around 25% of our European flat product volumes remain under annual contracts that have yet to reset. This brings me to my second point. As imports normalize, customers are increasingly looking to domestic supply and we are responding. The TRQ framework provides the opportunity for recently idle capacities to restart, restoring employment and providing direct benefits to the local and regional economy. During the quarter, imports of flat steel products were approximately 50% lower than a year ago and, as expected, our European flat product shipments were higher in the third quarter against the second quarter, which is counter to the normal seasonal pattern.

As inventories normalize, we expect more of this reduction in imports to translate into higher domestic shipments. Our order book continues to strengthen and we expect shipments growth to accelerate in the fourth quarter and show a double digit year on year improvement. This momentum is expected to continue to build into 2027 as customers shift back towards domestic steel supply. We will see higher, more sustainable capacity utilization. With Dąbrowa, Asturias and Fos back in operation, all of our European blast furnaces are now running and we are well placed to serve our customers reliably and efficiently.

High utilization should support a return to healthy and sustainable levels of profitability and returns on capital across the industry. My third and final point is that ArcelorMittal is exceptionally well positioned to deliver higher earnings, stronger returns on capital and continued value creation for shareholders. An increasingly regionalized steel market provides a stronger foundation for sustainable profitability throughout the cycle. I have already talked about the significantly improved outlook for our business in Europe. Our business in India continues to perform well. We are ramping up our higher added value capacity and the year to September we presented a new shipment record in North America.

We are seeing positive momentum across our franchise. Better import protections are a common theme and lean inventories alongside growing demand from data centers and energy infrastructure investment create a positive outlook for 2027. Against this improved backdrop, ArcelorMittal is well positioned to succeed. Our scale, our leadership positions in key markets and our strong track record of product and process innovation will continue to set us apart from the competition. We are proud of the entrepreneurial culture which promotes accountability and a relentless focus on continuous improvement. A more supportive industry structure gives us an even greater opportunity to convert disadvantages into higher earnings and stronger returns.

Over the past four years, we have invested consistently in high return strategic growth projects that are increasing our earnings capacity. Importantly, many of these projects have not yet reached their full potential, providing a further source of earnings growth as we move into 2027 and beyond. The value created through these investments is further enhanced by our buyback program. This has been a powerful driver of shareholder value and, given the positive outlook for free cash flow this year and beyond, I expect this to continue.

With that, Daniel, I believe we can start the Q&As.

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Great. Thank you, Genuino. We know we have quite a long list of questions to get through, but we’ll start with a question from Alain at Morgan Stanley. Hi Alain.

Alain (Analyst)

Hi. Thank you for taking my question. Hi. Hi. Two questions from my side. I’ll start with the first one which is the usual one if you don’t mind discussing the profit bridge into Q4 and specifically around Europe where we are seeing many moving parts, including shipment growth, spot prices moving higher, but also elevated or sticky energy costs. And perhaps the same question applies to the other divisions as well. So if you don’t mind starting with the bridge.

Thank you.

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Yes, sure. Thank you, Alain. So thanks Alain. Looking at the major components, you know, the building blocks, the major themes into the fourth quarter, I think it’s clear from Genuino’s comments and the release that we expect higher volumes in the fourth quarter. That’s a common theme, but in particular we would expect that from Europe where we’ve guided to flat volumes being accelerating in the fourth quarter and increasing year on year at a double digit rate.

Second component would be generally higher steel prices across the segments, with Brazil perhaps a slight exception to that, just given mix effects. So that’s probably going to be a little bit more stable quarter to quarter. The third bucket or theme would be higher costs. You know you talk about that in your question, the way you posed it. But I think everybody can appreciate the evolving cost dynamics, particularly in Europe as energy prices have continued to evolve through the quarter.

So we’ll have to see how energy prices continue over the next six weeks or so. So it’s difficult to be specific there on the guidance, but that will clearly be a theme. The last component would be mining. You know, we’ve guided to a stronger quarter to end the year from our mining segment given the continued progress at Liberia and our expectation that that should be operating at capacity in the fourth quarter. So it should be a good quarter from a shipment standpoint. And then, you know, it’s difficult to be specific on the iron ore and freight factors, but I’m sure you can accommodate that in your expectations as they become apparent.

And then I think just my final comment would be on free cash flow. If you look at our release, if you look at the presentation, we are expecting a good free cash flow performance in the fourth quarter and that will be in substantial part driven by an expected seasonal release of working capital.

Alain (Analyst)

Thank you, Daniel. Thank you. And my second question is if we stay with Europe into 2027, you talked about the annual contract resets. Do you mind reminding us how many tonnes will be up for repricing on the first of Jan and how quickly this will feed through your ASP? And then in Europe as well, in your presentation you talk quite extensively about the benefits of the TRQ framework which hasn’t fully yet fed through your profits and margins. What do you expect to see as we head into early 2027 that will drive the margin upside for your European division?

And thank you.

Genuino Christino (Chief Financial Officer)

Okay, so thank you. Let me take your second question. So first of all, I think it’s important to say that TRQ. Q3, of course, was the first quarter in which we could see the benefits of the new framework. We are, of course, very, very happy with what we have seen as we were guiding at the time of quarter two. We see high achievements in flat, despite the seasonality and despite the fact that we were going through a destock during the quarter. So it’s really working as initially designed, which would then allow us to bring back the capacity that I also talked about at the beginning in my opening remarks.

And we will really see the full benefits of the new framework, of course, in 2027. And also what it does, and we believe it should really be extremely helpful, it allows the industry now to pass on higher costs. Right. So we are seeing now we were in a positive trend in terms of recovering our margins. Of course we were hit by higher energy costs, but we are in the process of recovering that. So when I look at the pricing guidelines that we have already for January, I’m sure you have seen it, it’s already significantly higher than what you see at the moment coming from index.

So that’s all very positive. And we’re going to be working through the destocking. Our expectation is that destocking should largely end in Q4. So when I look at the business and the moving parts, I think we can be very optimistic for 2027.

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Thanks, Genuino. And then just coming to your question on contracts, Alain. So I think in our release, in the presentation you can see, and you already know it, that approximately 25% of our flat volumes in Europe are annual contract. That’s predominantly with the automotive customers. And the significant majority of those contracts follow the calendar year. So a significant majority of that 25% of our flat volumes is set to reprice as we start 2027, which is another significant component of your positive bridge, I think, into the first quarter and for 2027 as a whole.

Alain (Analyst)

Thank you. Thank you very much.

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Great. Thanks Alain. So we’ll move now to take a question from Reinhart at Bank of America. Hi Reinhart.

Reinhart (Analyst)

Afternoon Genuino and Daniel. Thank you very much for the time. Just want to ask about the European furnace restart so far. Can you give us an update on where exactly they are in their ramp up process and when you think they’re going to hit steady state production? And I guess related to that, it would be good to get your thoughts on when you think there will be enough demand in Europe for you to actually start bringing some slabs in, perhaps.

Genuino Christino (Chief Financial Officer)

Yeah, right, sure. So first of all, we are bringing capacity as we see demand, right? I think that’s number one, I would say. So we are not bringing capacity unless, of course, we see that. We can see that in our order books. And that’s why we feel confident to bring back the capacity, because we are seeing order books strengthening. So in terms of the ramp ups, as you know, I mean, it’s not easy to bring back capacity, especially when the furnaces have been idle for some time, which was clearly the case here. So Poland, we are now up and running since end of September. So we have basically completed the ramp up. The furnace is running well. Fos, we are still going through the ramp up phase. Not yet where we wanted to be, but progressing there. And in Spain we are up and running.

So two out of three furnaces are running well and Fos is still in the process of ramp up.

Reinhard (Analyst at Bank of America)

Got it, that’s clear. And a comment on slabs, if you can.

Genuino Christino (Chief Financial Officer)

Sorry, what was your question on the slabs, Reinhard?

Reinhard (Analyst at Bank of America)

When you expect demand to be sufficient in Europe for it to make sense for you to bring in slabs into the continent?

Genuino Christino (Chief Financial Officer)

Well, I mean, look, I mean, this is something that of course remains a possibility for us. Our focus right now is to ramp up our capacity domestically. Right. So that we can utilize our existing furnaces and tools that we have here. But of course we have that flexibility. We know already what is the potential for higher volumes next year just because of the TRQ and low imports that we expect to materialize. We’re going to see the full benefits in 2027.

But of course we believe that we will have the capacity domestically to take care of that. But as a group, we have optionality, we have flexibility.

Reinhard (Analyst at Bank of America)

That’s very clear. Thank you. And maybe just one more question on developments into 4Q. So you’ve previously called out that some of this new capacity does have higher carbon costs associated with it. So as you’re building volumes into the fourth quarter, how should we think about improved fixed cost absorption and EBITDA per tonne from that volume increase?

Genuino Christino (Chief Financial Officer)

Yeah, our message is the same, right? Yes. So as we bring back capacity, there will be more CO2 costs, but fixed costs, we shouldn’t be really adding much in terms of fixed costs. So profitability of this volume should be at least at par with the existing business, if not a little bit better.

Reinhard (Analyst at Bank of America)

Very clear. Thank you very much, Genuino and Daniel.

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Great. Thanks, Reinhard. So we’ll move now to take a question from Tristan at BNP Paribas. Hi Tristan, how are you?

Tristan (Analyst)

Yes, hi, thank you for taking my questions. I have two. So the first one is on Europe. One of your peers said that the shutdown of ILVA would be a game changer for the market. Do you share that view? And do you see a scenario where southern European prices would trade at a premium to northern prices? And does that mean ultimately that it could be upside risk to the market share gains you initially contemplated? That would be my first question.

Genuino Christino (Chief Financial Officer)

Yeah, Tristan, look, I mean we all know in which levels ILVA was running at, right? So we all know, and it was not running at very high levels. And as a company we feel we are in a good position here to service that market. As you know, we started port. The second one is in Port South. We started also a port in South Spain. So it places us in a very good position to supply the market in the south where prices finally settle. I mean historically, as we know, south has always traded prices at a discount to north because of being more exposed to imports, which as we know now is being corrected by TRQ. So we’ll see where prices finally settle. I wouldn’t expect that to trade at a significant premium but it will depend on freight and other aspects. But again I think for us it’s a good opportunity to service that market from our facilities in the south.

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Yeah, just to round up that comment. So I think, you know, I really, I think as we look out there, I wouldn’t say ILVA is going to have a significant impact, just reinforcing Genuino’s comment that they’ve been operating at very, very low levels. So the fact, you know, if they drop down a little bit further, I don’t think it’s really going to change that supply-demand balance notably. So I wouldn’t expect any significant or material impact on the market.

Tristan (Analyst)

All right, that’s very clear. And my second question is on North America. Could you discuss a little bit the strike impact in Canada and also what happened in Mexico? Is there anything structural at play, given it’s been a couple of quarters with some hiccups, and how much of those, I mean if you could quantify those one-offs and how much you expect to get back into Q4, that’d be great. Thank you.

Genuino Christino (Chief Financial Officer)

Sure. So we had two events in North America. One was a strike in our longs division in Canada that has been addressed. The facilities have been running since the beginning of the quarter, so there shouldn’t be any further impact from the strike. So back to normal levels. And in Mexico we had reliability issues with our DRI facility, which has also been resolved, addressed. So I would expect us to be running at a normal capacity in quarter four.

Tristan (Analyst)

And the negative impact, could you quantify it?

Genuino Christino (Chief Financial Officer)

So we are talking about in Q3, I mean the losses, I would say in the range of 150 kt.

Tristan (Analyst)

All right, thank you.

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Great, thanks, Tristan. So we’ll move now to take a question from Efraim at Citi. Hi Efraim, please.

Efraim (Analyst)

Thanks, Daniel. So, two questions, I’ll just take them in turn. First, I’m just trying to gauge how conservative your guidance for double-digit year-on-year growth in flat products while shipments in Europe is for Q4. Very rough math. I mean you did about 6.5 million tonnes in total last year in Europe. Seventy percent, assume that is flat. So a 10% implies somewhere around a 450,000 tonnes increase year on year for Q4, 2026. But if imports are coming down by two and a half, 3 million tonnes per quarter and you maintain your market share of about 30%, I mean you should be expecting about 700 to 800 or 900,000 tonnes increase.

So it’s almost a 20% increase in shipments unless volumes have gone down or you are losing market share. So would that be a right math or please point me where I’m wrong in terms of the amount of volume increase in flats you could expect.

Genuino Christino (Chief Financial Officer)

Well, I think you’ve got all the moving parts right. I think the only one that I would also point to you, and as we discussed before as well, so we are still going through what we believe is a dip in Europe, which as I said should normalize now during the quarter in Q4, which then should of course help us as we start 2027. So I think that’s the only missing piece that I would point to you. Anything else here you want to highlight?

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Yeah, it’s a good question, Efraim, and thanks for putting it forward because, as Genuino says, you’re picking up the moving parts there because inventories are really providing a cushion over the second half period as we transition into this new mechanism. So we saw the reduction in imports in Q3, we’re going to see, we expect to see, that similar reduction in imports in Q4, but because inventories are being consumed through that period, it’s not fully translating yet into our shipments, into our volumes.

But as soon as those inventories are consumed, as soon as they’re at normal levels, and as Genuino said in an earlier response, we expect that by the end of the year, then all of that will be translating into our shipments and our production. So we’re ready for that, we’re primed for that. We’re going to see progress and evidence of it in Q4, but then that momentum is going to continue. So it’s going to provide a good foundation for the bridge into Q1 and 2027 as a whole as well.

Efraim (Analyst)

Thank you. Sorry, my second question is on India and Hazira. Obviously now you’re seeing a ramp up or start in 2027, which was obviously flat a little bit earlier. But should we kind of realistically expect any shipments from the incremental new capacity in ’27 or is it really a ’28 story in terms of more volumes? And could you kind of give us a sense as to where we are in the completion of construction process and ramp-up process in terms of the incremental 6 million capacity there?

Genuino Christino (Chief Financial Officer)

Yeah, sure. So I can maybe comment on that. As you know, we have already commissioned the downstream, so the new cold mill, automotive lines for the finishing. We are testing now the coke oven, the new coke oven batteries. We are making good progress with the upstream, the furnaces, and we do expect to see already in 2027 higher volumes coming from the project. Our expectation is that in the first half of 2027 we will start to see already some action there.

We will of course provide you guys with some more guidance on that as part of our Q4 results. But we should definitely see already some improvements in 2027, especially in the second half.

Efraim (Analyst)

Thank you.

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Thanks everyone. So we’re going to move now to take a question from Timna at Wells Fargo. Hi Timna.

Timna (Analyst)

Yeah, hey, good afternoon. I wanted to switch gears to the Americas if I could. And beginning with Brazil, the investments you’re making there are pretty notable. How do you get comfortable with the outlook there given smaller trade protections? The recent election and at least one of your other competitors there was sounding a bit more cautious than you were. So if you could elaborate on the Brazilian strategy, please.

Genuino Christino (Chief Financial Officer)

Daniel, to be honest, I could not hear well the question. Have you heard it?

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Yes, I have. So perhaps I can start. Genuino, and I’m sure you will complement, but it was basically Timna was asking around the outlook for Brazil given the election results, what our plans are for investments, would we reconsider them given the election outcome, given the relative lack of trade protection, and noting that one of the competitors, I think on the long side of things, was giving a more somber outlook for the market.

Genuino Christino (Chief Financial Officer)

Yeah, okay. No, thank you. Great. So look, I mean I think we have to differentiate between long and flat in Brazil. I mean when we look at the flat business, we do believe that at least for steel, I mean we have already good levels of trade protection. So we had recently anti-dumping on cold rolled, galva, painted, which is of course a significant part of what we produce locally. So we have seen imports coming down to normal levels. So they were quite high in 2025, coming down now to more normalized levels.

We have more to come. So we have anti-dumping now also coming on HRC against China. So we feel that the government has taken steps to support the business on the flat side. In longs we also have some protection, maybe not as much as we would like to see, and we continue to engage with the government. And where you see us investing right now in Brazil is in the capex side of the business with more downstream, which the country is short, so it’s important. Exactly that. And we feel that it will make a lot of sense for us to convert exports into more domestic volumes. And that’s exactly what we are trying to do.

Timna (Analyst)

Okay, thanks. Sorry if it wasn’t clear I was referring to a flat rolled producer. But your results in Brazil were quite strong. So maybe a different perspective. Switching gears if I could, to the North American market. You also have some repricing I would assume there. So would like to hear on the repricing and the perhaps benefit from any lower CRU discounts we’ve been hearing about. And then on the Calvert performance, been hearing some challenges maybe on the ramp up there.

What could that look like when fully optimized, I guess.

Genuino Christino (Chief Financial Officer)

Yeah. So we continue to make progress with the ramp up in Calvert, Timna. I mean, of course, to be honest, it’s moving a little bit slower than what we were expecting. But our expectation is to exceed the—it’s a very good run rate. As you know, with this facility we expect to produce very demanding— for many applications, exposed automotive. But it’s progressing. It should provide good support for 2027 because of course each ton that we can produce locally, it’s one ton of slab that we’re not going to need to pay tariffs on.

So that should really support the business and profitability in North America in 2027. I’m sorry, your line for me at least is not great. So I think the first part of the question was linked to auto contracts when it resets, Daniel, was—

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Just to pricing dynamics and discounts to index, et cetera. Whether that’s evolving.

Genuino Christino (Chief Financial Officer)

Yeah, look, I mean, as we know, prices in North America, they are strong. The supply-demand is strong. So we are seeing tightness in the market. And what is also very positive for us specifically is the fact that we are also seeing similar dynamics in Canada and in Mexico as well. So you should not forget that we are a North American operations business. At the beginning of the year, we were seeing larger discounts in Canada and in Mexico through CRU.

And now we are kind of back to the normal levels of normal parity that we used to see before the new Section 232 and tariffs against Canada and Mexico. Daniel, please, if I could. Yeah, go ahead. Yeah, I think we’re going to need to wait and see what is agreed. I cannot really comment much on that. We’ll have to wait for the final outcome of the negotiations. You know, what I can say though, is that we are doing well in Canada. Our business is doing well. I mean, we adapted as much as we could, of course, supported also by trade measures from the Canadian government. We see lower levels of imports, as I said, supporting then prices and demand for facilities.

So, yeah, we are doing well. And given where prices are right now, give us also a good level of confidence that 2027 again should be significantly better.

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Great. Thanks, Timna. So we’ll take the next question from Boris Ashura. Hi, Boris. Please, go ahead.

Boris Ashura (Analyst)

Hi. Thank you for taking my question. I have two ones. The first, let’s stay in the U.S., but now that the Trump administration has been defeated in the midterms, do you see a potential impact on Section 232 tariffs, or do you believe things will stay exactly the same? That’s the first question. And the second, on slide 22, you mentioned the increasingly supportive regulation in Europe for the industry. What is the main support you see among those measures that would come on top of the TRQ?

And when do you expect them to have their first impact? Thank you.

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Jaelyn, do you want to take that one?

Jaelyn

Yeah. Thanks, Shamina. So thanks, Boris, for picking this one up from the appendix. It is an important slide. And what we’re showing on slide 22 is that the trade and policy environment in Europe does continue to evolve. So we’re all very pleased to be seeing the impact of CBAM from the beginning of the year. We’ve talked a lot about the new tariff rate quota mechanism kicking in 1st of July and starting to see the effects of this building as we’re moving through the second half of the year.

But we do believe there’s more to come. The policy is evolving, it’s now moving downstream. So I think CBAM and the TRQ is going to be important there. So in terms of CBAM moving downstream to capture intensive goods, that’s going to be very important and that’s something that we’re expecting. We’re expecting to hear that relatively soon, what the outcome of the trilogue discussions there is. So maybe end of this year, early next year, we should see some news on that. But I think moving downstream, capturing the derivative products, that’s very, very important.

And then in terms of the evolution of the tariff rate quota tool, we’ve had a question earlier around slab. So slab imports on a near-term basis, not necessarily something to be concerned about, but on a medium-term basis that is certainly something that we would be concerned about. The scenario where primary steelmaking capacity in Europe gets replaced by imported slab. So that’s clearly very counter to the intentions of the tariff rate quota. The intentions of the tariff rate quota mechanism are to restore the industry to health, to bring idle capacity back into operation, to have all of the jobs and local economy support that, that then will sustain. So slabs on a medium-term basis could put that at risk. So it’s very natural that the tariff rate quota should also capture those slabs. And that’s something that we’re expecting to hear about at the next opportunity, which would be actually the middle of next year.

The review then. Hopefully that’s clear.

Genuino Christino (Chief Financial Officer)

Yeah. So maybe I think there was also a question on Section 232 in the U.S., so let me take this one. So maybe a few comments from us. I believe we have to acknowledge that Section 232 has been a very effective policy addressing the impacts of global excess capacity and unfair trade. And we believe that remains pretty much the direction of travel, not only in the U.S. but in all core markets. In all core markets, I mean steel is strategic, it’s vital to resilient domestic supply chains and needs appropriate protection, we believe.

We have seen U.S. policy work well in reducing imports, promoting that. We have seen of course a number of investments in place. We know that Section 232 was also supported by the Democrats before. And our expectation is that Section 232 will remain. We will of course see. But our expectation is that it remains.

Boris Ashura (Analyst)

Thank you very much.

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Super, thanks Boris. So we’ll move now to take a question from Max at Odo. Hi Max.

Max (Analyst)

Yeah, good afternoon, Glen. So, yeah, first question is on Europe and really zooming in on the long product segment. It seems to be considerably weighing on your—it’s working on EAF, so I guess it’s very much concerned by the higher electricity cost. It doesn’t seem to be as impacted by a TRQ system as flat products. And, yeah, construction is the main end market, so also they are depressed. So do you see some prospects for this business to earn its cost of capital?

And if not, what is the future of this business within ArcelorMittal?

Genuino Christino (Chief Financial Officer)

Yeah, sure Max, let me take this one. So first of all we like our long business. It’s a franchise business and we have high-quality products that are very important. And just an example, rails, heavy beams that we are exporting to different parts of the world at very good levels of prices. As you know, over the years we have disposed parts of the business that we felt we would not be competitive, the pure commodity business. So the business that we retain is high-quality business.

What you see really in Q3, and I think the dynamics that we are seeing, they are very much similar to what we talked about with flat. We saw also in quarter three for longs a significant reduction of imports, but at the same time that was offset by the destocking that we also talked about in the case of flat. And so that should also normalize, right. And the same dynamics in terms of prices moving up to cover for the high energy cost is happening.

So I would expect the same dynamics that we talked about to impact our long business as well.

Max (Analyst)

Okay, yeah. And the second and last question is on Ukraine. So can you perhaps quantify the residual costs associated with these operations now that they’re run under cold idle format, and more generally production has come to a halt in Ukraine? I mean all other facilities have also stopped. So, yeah. Do you see any impact on the European market, also perhaps on the world iron ore market, given that Ukraine was a significant producer?

Genuino Christino (Chief Financial Officer)

Yeah, so this is all—of course we’re very sad with the developments in Ukraine. I mean as we speak we are in the process, so we are idling the facility, and as we have guided, going forward from a cash flow point of view, our expectation is that it will be very limited in terms of needs to supply cash. So we’re going to be liquidating of course the existing inventories that we have, so that will take care of the needs of the facility for an extended period of time.

And then after that our expectation is that we are talking about a minimal amount just to keep the security of the site. So it should be a low number to just keep the optionality here for the future.

Max (Analyst)

Okay. And in terms of wider impact on the European market,

Genuino Christino (Chief Financial Officer)

I don’t think—look, as we know the capacity in Ukraine was already significantly impacted, right. And there is also—they have also quota. So I wouldn’t expect, to be honest, to see a significant impact on the European market because we ourselves were not really exporting into Europe. So I don’t expect anything.

Max (Analyst)

Okay, no, that’s clear.

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Great. Okay, thanks Max. So we’ll take the next question from Andy at UBS. Hi Andy.

Andy (Analyst)

Hi Daniel. Thanks. Genuine. I just want to ask about the demand support factors in your—with regards to the… Oh, hello, can you hear me?

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

You’re breaking up quite a bit there actually Andy. So can you start your question again?

Andy (Analyst)

Yeah, sorry. Is this clearer?

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Hopefully yes.

Andy (Analyst)

Cool. So I was just going to ask about the demand situation. What are you seeing in terms of your end markets? In terms of demand evolution after the summer lull, has demand recovered as you would have expected? Has it been softer? Any impact from the, obviously, the higher interest rate environment and energy cost? Is that—are you seeing that in your order book or are we making too much of that, given the headlines we see?

Genuino Christino (Chief Financial Officer)

Andy, the real demand in Europe, what we see is it’s relatively stable. I don’t see, to be honest, I don’t see change to what we were seeing before. So what is clear—what the dynamics that we see—so real demand relatively flat. We see automotive resilient. What we are seeing really is the destock, right, that we talked about. So that of course had an impact on the apparent steel consumption in Europe in quarter three. It should continue to be the case in Q4, not to the same extent, less.

And then after that our expectation is that it normalizes, inventories normalize, which again leave us in a good place to start 2027. As we know, I mean I’m sure you have seen PMIs in Europe at expansionary levels. Clearly the energy story doesn’t help, right. But so far I cannot really say that it has had a significant impact in the order books. Order books are strong. So we are fully booked for quarter four. So we’re taking what is now really for next year.

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Yes. And just to make sure, Andy, you’re appropriately sort of noting the specific comments that we’ve given this quarter and also for the fourth quarter that we did see counter-seasonal progress in Q3. The momentum is building, the shipment growth is accelerating. So we expect stronger shipments again in Q4. Efraim was pointing that out on a year-on-year basis, that should digit. But there’s good potential beyond that as the inventories normalize and then all of that reduction in imports will be being seen in our production and shipments.

Andy (Analyst)

That’s good. And just, I guess, a follow up to Ephraim’s question. I mean, if you take Voss plus Poland and the Spanish blast furnace, I mean, between all of those it should probably be about 5 million tonnes of pig iron or more. I mean, on a quarterly basis I’d expect that to be lifting shipments by at least a million tons on a normalized basis compared to what you were doing in the first half, which would put you above 8 million tonnes a quarter.

I mean, once we get through this destocking period, which is obviously weighing on 4Q and the negative seasonality, do you expect shipments to be running at 8.1, 8.2 million tonnes a quarter by the time we’re in 1H27?

Genuino Christino (Chief Financial Officer)

Well, I think we all know the math, right? I mean, we talked about what we expect in terms of decline in imports. That number is not changing. Right. I think what is to be seen is how the real demand in 2027. Right. And to the extent that we are talking now, I mean you could also imagine that at some point in 2027 we may also need to. We may also see some restocking. Right. So then we will have to see and wait. We are not yet providing guidance in terms of apparent steel consumption for 2027.

But if you just look at the World Steel Association, they came out with their forecast. They have 2.3 percent increase for Europe next year, which if it materializes, of course comes on top right of the lower imports that we are expecting. That is all very positive.

Andy (Analyst)

Okay, thanks very much.

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Thanks, Andy. So we’ll move now to take a question from Bastian at Deutsche Bank. Hi, Bastian.

Bastian (Analyst at Deutsche Bank)

Yeah, thanks, Jens. All of my questions have been answered.

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

No problem. Thanks, Bastian. So we’ll move to take a question from Cole at Jefferies. Hi Cole.

Cole (Analyst)

Good afternoon. Thanks for taking my question. Just some clarifications on this side. On the Other division, are you giving any quantification of kind of an estimated EBITDA or progression into the fourth quarter? And then on North America, you talked about the positives into 2027 of higher for longer prices, potential upside from realization of the tariffs. But if I focus specifically on the slab imports into the U.S., is there any kind of cost element that we should be thinking about in the U.S. as you kind of roll over contracts with Cliffs?

Genuino Christino (Chief Financial Officer)

Yeah, so maybe first on segment orders. So typically what we guide for segment orders is an expense of about $200 million for the year. Right. So about $50 million per quarter. This quarter in particular it’s positive, slightly positive, because we have a significant release of intercompany profits. So volumes from our mining division that sits in Europe as and when the profitability of the stunts comes down and iron ore volumes comes down also in Europe, so then that gets released and that’s what you see this quarter and also an improvement in the results in South Africa.

So that’s why it’s positive this quarter, slightly positive, but everything being normal, I mean this would be about $50 million or so negative. In North America specifically for Calvert. So as you know, our contract with Cliffs has already expired. So we have replaced that proportionally with another contract with U.S. Steel that is in place and will continue to be in place for some more years. And then the opportunity for us there, as I said at the beginning, is the ramp up of the electric furnace so that we can reduce the amount of slabs that we import. And that’s the focus. That’s what everybody is trying to achieve, to get the furnace up and running as per nameplate capacity as soon as possible.

Cole (Analyst)

Thanks for the clarification.

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Great, thanks, Cole. So I think we are going to take a question now from Matt at Goldman Sachs. Hi Matt.

Matt (Analyst)

Hi, Daniel. Hi. Just one question from me, just I think maybe more clarification. Your raw materials basket on slide 8, it’s gone up by sort of €40 a tonne since August. Can you just help me reconcile what’s driving that? Because coal prices have increased but iron ore has come off. Is there something else happening there around the restocking for those furnaces, but you don’t yet have the volumes to divide that by? Can you just help me think about how that raw material basket could move if we start to see coal prices ease?

Genuino Christino (Chief Financial Officer)

Well then I believe that what we have in this slide is just a normal… it’s coal, iron ore, and scrap. Right,

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Exactly. Yeah. It’s just a very sort of simplified view of the raw material basket excluding energy, alloys, etc. So, yeah, like you said, we note just the key components and the input factors for scrap, iron ore, and met coal.

Matt (Analyst)

Okay, does that

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

No lags or anything. It’s just the spot evolution.

Matt (Analyst)

All right. Okay. So does this also include the freight of getting those raw materials to Europe? Was that excluded out?

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

No, yeah. No, it’s just the simplified basket.

Matt (Analyst)

Okay. All right, thank you.

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Good stuff. Thanks, Matt. So we’ll take a question now from Dominic at JP Morgan.

Dominic (Analyst)

Hi. Hello. Just two quick follow up questions for me. So, just for avoidance of doubt, when we think about NAFTA for Q4, we should be expecting slightly higher shipments. And specifically I just wanted to know whether Calvert would be seeing any downtime or maintenance aligned with the usual seasonal slowdown for NAFTA. My second question is obviously just given the normal seasonality of the working capital unwind, and as we start to think about deleveraging, how should we think about capital allocation for Q4?

Is the shareholder distribution still just simply within the traditional guardrails of the ordinary dividend and the ordinary free cash flow guidance? Do you just think about how you think about capital availability as we move deeper into Q4?

Genuino Christino (Chief Financial Officer)

Yeah. So maybe first in U.S. North America business. So we talked about some of the impacts we faced in quarter three in terms of shipments in our long side business in Canada and Mexico. So that is not repeating. But at the same time, we do have seasonality, as you pointed out, and we will continue to see that. So all in all, I would expect our shipments in North America to be flat. So we will of course have a recovery of the two events that I talked about.

But at the same time we will have a normal seasonality and maintenance that will happen. So our expectation is for shipments to be flat. So coming out to the two other questions, working capital, I mean, as we have been guiding, we do expect the large majority of the investment up to now to reverse following normal seasonality of our working capital. That of course will provide strong support to free cash flow generation, will allow the debt to come down, and when it comes to capital allocation, we will continue to apply the policy.

What I would say though is that based on everything that we just talked about, good prospects for the business going forward in 2027, we believe that there is, of course, it’s an opportunity for us to perhaps deploy more than the 50% that the policy would call for. Right. So it is something that we will definitely be discussing very seriously.

Dominic (Analyst)

And is that something that you can do outside of, or do you need an EGM approval to do that type of distribution, or could you do it within your existing authorization?

Genuino Christino (Chief Financial Officer)

Yeah, we have the authorizations, enough authorizations to do it. And as always, when we have the AGMs in May, to the extent that we need, we will get extra approval. But so far we have enough in our authorization. We have plenty of flexibility.

Dominic (Analyst)

Superb. Thank you.

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Thanks, Dominic. So we do have maybe one more minute to take a follow up question from Tristan at BNP Paribas, and then I’m going to hand back to Genuino for closing remarks. But Tristan, last question.

Tristan (Analyst)

Yeah, thank you. Just a quick one on Liberia. If we can calibrate a bit better the volume uptick in Q4, if you can tell us how much volume you shipped in the nine months from Liberia and any comment on the cost outlook? If you think it’s going to be relatively steady quarter on quarter,

Genuino Christino (Chief Financial Officer)

Yeah. So up to now, nine months we shipped about 10.5, 10.5 million tons. So as you know, we are guiding now for 16. But what I would say is important here just to keep in mind is that in Q4 our expectation is to be for the first quarter to be able to run at capacity. Right. So as you know it’s a 20 million tonnes project. So we are ramping up the concentrator lines. So we’re going to be, we see already the capacity in rail and port to get to the 20 million in 2027, which is good.

We are also taking steps to prevent issues as we faced in quarter 3 in future by basically covering the stockyards at the port so that we can continue to ship even under more severe rain conditions. So this is also something that we have been doing. Of course there is still room as we ramp up the project lines to not only improve the mix. Right. We will have a richer product and as we increase capacity also the costs should come down and then it again places well for next year.

Tristan (Analyst)

All right, that’s clear. And maybe if I squeeze one little more just on the two projects you plan to confirm in Q4 in Brazil, the strategic growth project, is that still going to be within the CAPEX framework you discussed now for a number of years, 4.5–5 billion, or could that change a bit the CAPEX framework?

Genuino Christino (Chief Financial Officer)

Yeah, thank you for that. Look, I mean as you know the project in Tubarão, the cold rolling mill and coating. It’s a project that has been approved, it’s being executed as we speak. Orders have been placed so that one is progressing. It’s not yet part of the $1.8 billion in terms of EBITDA that we expect to get from the projects. But we’ll be updating that in Q4 together with our guidance for CapEx. But at this point I can tell you that the $4.5 to $5 billion remains a good reference for the CAPEX angle of the group going forward.

Tristan (Analyst)

All right, perfect. Thank you.

Daniel Fairclough (Vice President, Corporate Finance, Head of Investor Relations)

Perhaps Genuino and I can just add a couple of points to your response because, you know, I think it’s, you’re saying there, no change to our CAPEX spending, our rate of spend still in that $4.5 to $5 billion range. So I think we’ve spoken on this call about the positive outlook for EBITDA in 2027 and various elements that we can look forward to in that bridge. But then if the other components of the cash flow statement are not changing, that does bode well for free cash flow in 2027.

And then going back to the previous question around capital allocation, what are we going to do with that cash? Using that for our share buybacks, given our positive outlook for the business, our view on our share price, buying back more stock with that free cash flow, going beyond the minimum 50%, would seem very appropriate. So I think that’s our last question, or certainly the last we have time for. Genuino, I’m going to hand back to you for any closing remarks.

Genuino Christino (Chief Financial Officer)

Thank you everyone. Before we close, let me briefly reflect on the key message from today’s discussion. First, our third quarter results again demonstrate the improved earnings power of the business. Margins remain well above historical levels and, importantly, the full benefits of the new IQ mechanism are still to come through. Second, we have evidence that the new IQ mechanism is working as intended. Imports are materially lower, our shipments are increasing, and momentum is building as inventories normalize.

And third, ArcelorMittal is exceptionally well positioned as we move into 2027. We have positive momentum across our business. On top of the improving market backdrop, our strategic growth investments provide a further source of earnings growth as projects continue to ramp up. So I leave you with the final message. I’m even more optimistic about the outlook for our business than I was three months ago. We have a strong portfolio, improving market conditions in our key regions, meaningful embedded growth and a disciplined capital allocation framework.

Together, I’m confident in our ability to deliver high earnings, stronger returns on capital and continued value creation for our shareholders. With that, I will close today’s call and if you have any follow up questions, please reach out to Daniel and his team. Thank you again for joining us.

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