Q2 2025 ArcelorMittal SA Earnings Call

Good afternoon, everyone. This is Daniel Fagor from the ArcelorMittal investor relations team.

Thank you for joining this. Call to discuss Alpha, Mitchell's performance and progress during the first half of 2025.

Leading today's call will be our Senior Vice President, 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 in detail, but we published it this morning on our website for your information, I do want to draw your attention to the disclaimers that are on, slide number 25 of that presentation.

As normal and we know we'll make some opening remarks before moving directly to the Q&A session. So to ask a question, please do Press Start 1 1 on your keypad to join the queue.

Genuino Christino: Thanks, Daniel, and welcome, everyone, and thanks for joining today's call. As usual, I will keep my remarks brief. Beginning with safety, a core value for our company. We are less than one year into what we know will be at least a three-year transformation to implement the six core safety recommendations post-decoded last year. Already, our enhanced safety assurance model has improved oversight and consistency. I'm encouraged by the progress we are making and the determination that I see in my colleagues to drive lasting change and achieve our targets as quickly as possible. Now, I want to focus this quarter on three key points. First and foremost, our results continue to show structural improvements. Second quarter EBITDA increased as expected, and at $135 per ton, our margin continues to show that the benefits of our asset optimization and growth strategy are delivering structurally higher margins.

Over to you, Gemini.

Uh, thanks Daniel, and welcome everyone, and thanks for joining today's call.

As usual, I will keep my remarks brief.

Beginning with safety. The core value for our company.

We are less than 1 year into what we know will be. At least a 3 years transformation to implement the 6. Core safety recommendations, post the audit last year. Already our enhanced safety assurance model has improved oversight and consistency.

I'm encouraged by the progress. We are making.

To drive lasting change, and Achieve our targets as quickly as possible.

Now I I want to focus this quarter on 3 key points.

First and foremost, our results continue to show structural improvements.

Genuino Christino: Our strategic projects have good momentum. Liberia posted a record volume quarter. Our India renewables project is delivering all the performance that was expected and more. And the commissioning of our new value-added capacity at Hasira is underway. Our strategic projects, together with the impacts of recently completed M&A, are an important support to our EBITDA profile. Compared to 2024 base, the impact on future normalized EBITDA is now expected to be $2.1 billion, a third of which is due to be captured in the current financial year. ArcelorMittal has a unique asset portfolio, and this creates significant optionality for high-return strategic investments. So I'm confident that we can maintain our growth momentum. My second point is that full ownership of Calvert is a very positive development for ArcelorMittal. Calvert is the premier steelmaking facility in the United States and a cornerstone of our North America franchise.

Second quarter, betta increased as expected and at 135 dollars per ton, our margin continues to show that the benefits of our asset optimization and growth strategy are delivering, structurally higher margins.

Our strategic projects have good momentum. Liberia posted a record volume quarter.

our India Renewables project is delivering, all the performance that was expected and more

and the commissioning of our new value added capacity at Heiser is underway.

Our strategic projects together. With the impacts of recently, completed m&a are an important support through our ibitta profile.

Compared to 2024 Bass the impact on future normalized beta is now expected to be 2.1 billion, a third of which is due to be captured in The Current financial year.

Has a unique asset portfolio, and this creates significant optionality for high return, strategic Investments.

So, I'm confident that we can maintain our growth momentum.

My second point is that full on a ship of covert is a very positive development for Asylum.

Genuino Christino: Calvert achieved a new shipment record in the second quarter, 10% higher than the first quarter and 10% above the same period last year. Since 2014, Calvert has invested over $2 billion in improving its asset base and product portfolio. The biggest investment has been the new state-of-the-art EAF, which is ramping up right now and could not have been better timed. Along with the new seven-year domestic supply contract, Calvert's highest quality finished steel will meet US melted and poured requirements. And we will continue to invest in the US. Our project to build a new world-class non-grain-oriented electrical steel facility in Alabama is well underway. This will be a billion-dollar investment over the next few years, with first production anticipated in 2027. And then, of course, we have the second EAF at Calvert, a decision on which will be taken as part of our next capital allocation cycle.

Covert is the Premier still making facility in the United States and the Cornerstone of our North American franchise.

Covered achieved a new shipment record in the second quarter. 10% higher than the first quarter and 10% above the same period last year.

Since 2014.

Co has invested over 2 billion in improving its asset base and product portfolio.

The biggest investment has been the new state of the art EF, which is ramping up right now and could not have been better. Timed

Along with the new 7-year, the massive slab Supply contract.

Kurutz. Highest quality finished field will meet us melted and pulled requirements.

And we will continue to invest in the US.

our project to build a new world class, non-grain oriented electrical steel, facility in Alabama is well underway,

This will be a billion dollar investment.

Over the next few years. With first production, anticipated in 2027

Genuino Christino: My final point is on Europe, where we are transitioning to a more favorable market structure. We have the promise of a trade defense mechanism that protects the domestic industry and a carbon border that truly delivers a level playing field. A lot still needs to be actioned over the second half of this year. But if the European Commission delivers, then our business should be in a far better position to deliver the margins and returns on capital it is capable of when not suppressed by unfair trade. Added to this, a more favorable mix is the prospect of demand support from low interest rates and higher investment in defense and infrastructure. Our market position and product capabilities place ArcelorMittal favorably to capitalize on the opportunities these trends should create. Putting this all together, ArcelorMittal is in a strong position both operationally and financially.

And then, of course, we have the second a decision on which will be taken as part of our next Capital location cycle.

My final point is on Europe where we are transitioning to a more favorable Market structure.

We have the promise of a trade defense mechanism, that protects the domestic industry and a carbon border that truly delivers a Level Playing Field.

A lot, it still needs to be action over the second half of this year.

But its European commission, delivers.

Then on a then all our business should be in a far better position to deliver the margins and Returns on Capital. It is capable of

when not suppressed by unfairy.

Added to this more favorable. Mix is the prospect of demand support from low interest rates and higher investment in Defence and infrastructure.

Our Market position and product capabilities, Place us favorably to capitalize on the opportunities. The strengths should create

Putting this all together.

Genuino Christino: Our optimized asset portfolio is delivering structurally higher margins. And with the outlook supported by our strategic growth projects, this should continue. The value we are creating is being compounded by our share buybacks. Over the past four and a half years, we have bought back 38% of our equity. Each ArcelorMittal share now represents a greater proportion of our capacity, a bigger share of our leading franchise businesses, a larger stake in our growth projects, and a greater ownership of our unique business in India. With that, Daniel, I believe we can start the Q&As.

Is in a strong position. Both operationally and financially. Our optimized asset portfolio is delivering structurally. Higher margins.

And with the Outlook supported by our strategic growth projects.

This should continue.

The, the value we are creating is being compounded by our share BuyBacks.

Over the past 4 and a half years, we have bought back 38% of our equity.

It's just allowed me to share. Now we present a greater proportion of our capacity, a bigger share of our leader franchise businesses, a larger stake in our growth projects, and a greater ownership of our unique business in India.

Daniel Fairclough: Great. Thank you, Genuino. Just to remind everybody, if you do want to join the queue to ask a question, please do press star one, one on your telephone keypad. We do have a good queue in front of us already, and we will take the first question, please, from Alan at Morgan Stanley. Hi, Alan. Please go ahead and ask your question.

With that Daniel. Uh, I believe we can uh, start the Q&A.

Alan Gabriel: Hi. Hi. Thank you for taking my questions. I have two questions, if I may. The first one is on the EBITDA building blocks into Q3 25. Can you walk us through the different moving parts, including the ASP in Europe and North America, the dollar impact of tariffs on North America, and the power outage impact on Lazaros Cardenas in Mexico, if you don't mind? That's my first question. Thanks.

Great. Thank you. Jeremy now, just a reminder, everybody. If you do want to join the queue to ask a question. Please do Press Start 1 1 on your telephone keypad, we do have a good queue in front of us already. Uh, and we will take the first question please from Alan at Morgan Stanley.

Thailand. Please go ahead and ask your question.

Hi. Thank you for taking my questions. I have 2 questions. If I may, uh, the first 1 is on the iPad that building blocks into Q3 25. Can you walk us through the different moving Parts, including the ASP, and in Europe and North America, the dollar impact of tariffs on North America and the power outage impact on uh Lazaro Cardenas in Mexico if you don't mind. That's my first question. Thanks.

Genuino Christino: Thank you, Alan. So I will start with your second question on Mexico, and then, as usual, Daniel will walk you through the moving blocks. So in quarter two, as you can see, and as highlighted in our earnings, Alan, we faced operational issues with one of our transformers. So that impacted the production of our EAF. That has been restored. The EAF, as you know, that's our most important part of the business, that's the flat business. So that is up and running again. Nevertheless, as we disclosed in our MDA of our NAFTA segment, we experienced $40 million of losses because of the operational issues in quarter two. We have subsequently taken the decision to bring down the furnace that is producing for the long business for maintenance.

Uh, thank you VA. So uh, I will start with your second question on mass. And then as usual, then you will uh, walk you through the uh the moving blocks.

So um in in in quarter 2 as you can see and and as highlighted in our earnings allow we uh we Face uh uh operational issues with 1 of our Transformers. So that in fact, the production of our e

That has been restored uh the AF as and as you know, that's our more most important uh part of part of the business as the flat business. So that is up and running again.

Genuino Christino: And this furnace will most likely continue to be down for the next couple of months as we perform this maintenance. So that's why, and Daniel will comment, we will continue to see shipments at the same level as you see in quarter two coming from Mexico. So we will get back the shipments from flat, but then you will see a reduction in shipments because the furnace is down. But quarter on quarter, then shipments should be relatively stable for Mexico. Daniel, do you want to talk about the moving parts?

Uh, nevertheless, as as we disclosed in our MDA of, uh, of our and after uh, segment, uh, we experience 40 million dollars of losses because of the operational issues, uh, imported to you. Uh, we have subsequently taken the decision to bring down, uh, the, uh, the partners that is producing for the long business for, uh, maintenance. And this balance will most likely continue to be down for the next couple of months as we perform. Uh, this maintenance

Uh, so that's why. Uh, and then it will comment, uh, we uh, we will continue to see shipments uh at same level as you see in uh in in quarter 2, coming from Mexico. So we will get back to shipments from Flats, but then you will see a reduction in shipments because the furnace is down. But, uh, quarter of quote, unquote quarter, then, uh, shipments should be relatively stable for uh, for Mexico.

Daniel Fairclough: Yeah, sure. Thanks, Genuino. So I think what I'd like to do is just focus on the key moving parts, and we can get into any of these in more detail as you wish, Alan. But I think as we look from the second quarter to the third quarter and the bridge between the two quarters, I think the first thing to be anticipating is the impact of normal seasonally lower volumes in the Europe segment. I think that's going to be the key driver for Europe performance quarter to quarter, normal seasonality of volumes. Second factor to look out for is in the North America segment. Yes, we will see marginally higher tariff costs, Section 232 tariff costs, but that will be more than offset by the impacts of the Calvert consolidation.

Uh, Daniel, do you want to talk about the moving Parts? Yeah, sure. Thanks gemino. So, I I think what I'd like to do is just just focus on the, on the key moving parts and we can get into any of these in, in, in more detail As You Wish. Uh, Alan. But um, I think, as we look from the second quarter to the third quarter and the bridge between the 2, the 2 quarters, I think the first thing to be anticipating is the impact of uh, normal uh, seasonally lower volumes in in the Europe segment.

I think that's going to be the key driver for, uh, for Europe performance quarter to quarter: normal seasonality of volumes.

Daniel Fairclough: And then the third factor I would be looking out for in the Q2 to Q3 bridge is the impact of lower volumes in the mining segment because we did see some volume catch-up in the second quarter, and that went then repeats into Q3. So mining volumes will sort of come down a little bit in Q3, but that should be the main impact in mining because so far, quarter to date, pricing is a little bit higher than last quarter. So those are the main three factors I would be thinking about in terms of the bridge from Q2 to Q3.

Uh second factor to to look out for is um in in the North America segment. Yes, we will see marginally higher uh tariff costs section, 232 tariff costs. Uh but that will be more than offset by the impacts of the Calbert consolidation and then the third factor, I would be looking out for in the Q2 to Q3 Bridge, um, is the, uh, impact of, of lower volumes in the mining segment, uh, because we did see some, uh, volume catch up in the second quarter. Um, and that would then repeat into Q3 so mining volumes, uh, will sort of come down a little bit in, in, in Q3. Um, uh, but that should be the main impact in in mining because so far, uh, quarter to date pricing is a little bit higher than, than, than last quarter. So those are the, the the, the main 3 factors I would be

Alan Gabriel: Thank you. And the cost at Mexico should be assumed still the same cost Q on Q, or is there going to be an increase in the cost run rate because of the stoppage?

thinking about, uh, in terms of the bridge from Q2 to Q3

Thank you and the cost at at Mexico should be assumed still um same cost Q on Q or there's is there going to be an increase in the cost, run rate because of the stoppage?

Genuino Christino: That's a good reference, Alan. So the $40 million is a good reference.

Alan Gabriel: Thank you. Thank you. And my second question is on Calvert. So we can see the path to being slab self-sufficient in the US at Calvert in the medium term, but in the short term, you're still highly dependent on imported material for your slabs. How do you plan to mitigate the risk of tariffs should the current 50% level remain unchanged versus Mexico and Brazil? Will you be changing the flows? How will you change the mechanics of the business? Thank you.

That's uh that's a good reference seller. Uh, so the 40 million uh is a good. Uh, it's a good reference.

Genuino Christino: Well, I think what is important, Alan, as you know well, I mean, we have the EAF that is ramping up, right? And then the new agreement that was signed with Nippon Steel and US Steel for a new slab supply agreement that will guarantee Calvert what it needs in terms of melted and poured materials in the United States. And then, of course, Calvert will still need to be importing slabs from either Brazil or Mexico, so we don't see that changing in the near future. But as you can see, I mean, a lot of the tariffs impact is kind of already captured in our Q2 results, right? So as Daniel said, going forward, the increase, the incremental impact of tariffs is also significant. And as you can see in the results of Calvert, it's really exceptional, right?

Thank you, thank you. And my second question is on Calvert. So we can see the path to being slab self-sufficient in the US at Calvert in the medium term, but in the short term, you're still highly dependent on imported material for your slabs. How do you plan to mitigate the risk of tariffs should the current 50% level remain unchanged. Um versus Mexico and Brazil will you be changing the flows? How will you change the? The mechanics of the business? Thank you.

Genuino Christino: So the run rate is getting very close to $900 million. So Calvert is doing extremely well, record levels of shipments in quarter two. So where we really, Calvert is not really the concern. I think the concern at this point is really the flows from Canada to the US, right? That's where we see the biggest impact today.

That is ramping up, right? And then uh the new agreement that was signed between points still uh and you are still a new slab Supply agreement that will guarantee coverage what it needs in terms of murder and poor materials, uh, in in the United States. And, and then, of course, the coverage will still need to be, uh, importing in slabs, uh, from, uh, either Brazil or Mexico. So we don't see that changing in the near near future. But as you can see, I mean, uh, a lot of the tariffs impact is kind of already captured in our Q2 results, right? So as Daniel said, uh, uh, going forward, the, the increase the incremental impact of thyroids. It's, it's also significant and as you can see in the results of Cal, it's really uh, ex exceptional, right? So, uh, the Run rate is getting very close to 900 million dollars. So coverage has been extremely well, a record levels of shipments in quarter 2

Alan Gabriel: Thank you. Very clear.

Uh, so, um, where we really, uh, covered is not really the concern. I think the concern at this point is really the flows from left from Canada to the US, right. That's where we see the biggest impact. Uh, today.

Daniel Fairclough: Great. Thanks, Alan. So we'll move to the next question, which we will take from Efrem at City. Hi, Efrem. Please go ahead.

Thank you very clear.

Great. Thanks a lot.

Ephrem Ravi: Thanks. On the Calvert second EAF, you said, you know, in the next capital allocation cycle, you would be considering, could you be a bit more specific with the time of that? Is it 2026, or is it second half of 2025? And the second question regarding your comment on record iron ore shipments from Liberia, I think it should be doing about $5 million per quarter for a ramp-up. And it looks like you're doing close to $3 million tons in the second quarter. Is that correct? And how should we think about the contribution margin of the additional tons? I suppose at a $100 benchmark iron ore, you'll be getting about $80 per ton additional contribution margin given the cost base is relatively fixed. Thank you.

So we'll move to the next question. Uh, which we will take from Ephraim at City? Please go ahead.

Genuino Christino: Yeah. So Efrem, the first part of your question, the second EAF, I think we have been very clear that that is something that we see as natural for the next step for Calvert. We are advancing our studies, and I'm sure we're going to be in a position to update you more. Most likely, I would say, in our quarter four results. I'm not saying that there will be a decision at that point in time, but we are progressing our studies, and this is something that just makes a lot of sense for us given everything that we are seeing. And then, of course, as we have been discussing, a lot of investments have already been made in anticipation of the second EAF, right? So context-wise, it should also make sense to move forward with this.

Uh, thanks. Um, on the Cal work, uh, second year, as you said, um, you know, in the next CapEx, uh, capital allocation cycle, you would be considering, could you be a bit more specific with the time of that? Is it 2026 or is it the second half of 2025? Um, and the second question, um, regarding your comment, uh, on record, I know shipments from Liberia. Um, I think it should be doing about 5 million per quarter at full ramp-up. So it's, and it looks like you're doing close to 3 million tons in the second quarter, is that correct? Um, and how should we think about the contribution margin of the additional tons? Um, I suppose at a $100 benchmark, I know you'll be getting about $80 per ton additional contribution margin given the cost basis relatively fixed. Thank you.

Yeah, so absent, the uh, the first part of your question, the second? Yeah, I think we have been very clear that that is something that we see as as as as natural for the next step for covert.

Uh we are advancing our studies and uh and I'm sure we're going to be in a position to update you more. Uh most likely I would say uh in our a quarter 4 results, I'm not I'm not saying that there will be a decision at that point in time but uh uh, we are progressing our studies and uh and this is something that just makes a lot of sense for us giving everything that we are seeing

Genuino Christino: But timing-wise, you're going to need to bear with us for a little longer. In Liberia, our guidance for Liberia this year is 10 million tons of shipments. So you can see that the run rate in H1 is about 8 million tons. So we have commissioned the first line. So it's the first line of the concentrate. It's running. That's about 5 million tons. And we're going to be commissioning the other two lines as we progress now in the second half. So in quarter three, the level of shipments that you're going to see is going to be largely the same. You're not going to see an increase in shipments in quarter three, but you're going to see already a changing mix. So you're going to see more synthetic concentrate being shipped out of Liberia and less DSO.

And then, of course, as we have been discussing a lot of Investments have already been made in anticipation of the second year, right? So context wise, you should also make sense, uh, to move forward with this, uh, the timing wise you're going to need to bear with us. Uh,

Uh, for a little longer. Um a Liberia uh our guidance for Liberia this year is 10 million tons of shipments.

So you can see that the Run rate in uh H1, it's about 8 million tons.

So we have commissioned the first line. Uh, so it's the the first line of the concentrate. It's it's running

That's about 5 million tons. So and we're going to be commissioning this the other 2 lines as as we progress now in the in the second half.

So in quarter 3, uh the level of shipments that you're going to see, uh, it's going to be largely the same.

Genuino Christino: And then in quarter four, with the three lines running, then we're going to be at the higher levels of shipments. And we are comfortable at this point that we're going to be achieving our 10 million tons guidance. And then, of course, with the new product, you should also expect that profitability will increase, and we will detail that more as we talked about quarter three.

Uh, you're not going to see an increase in shipments in quarter in quarter 3, but you're going to see already a changing mix. So you're going to see more uh uh uh center field, concentrate being shipped out of Liberia and less DSO and then in quarter 4 with the 3 lines running then we're going to be at a higher higher levels of uh of shipments and uh and and we are comfortable at this point that we're going to be uh achieving our 10 million tons guidance.

and then, of course, with the new, uh, product, uh, you should also expect a profitability will increase, and we will be there that more, uh, uh,

Daniel Fairclough: Thank you. Great. Thanks, Efrem. So we will move now to take the next question from Boris at Capital Chabreau. Please go ahead, Boris.

uh, as uh, as we talked about quarter 3,

Thank you.

Matt Greene: Hi. Hello. Thank you for taking my question. The first question would be on tariffs. I've read a headline where you were quoting estimating the impact of tariffs to $150 million. That means there is something like $50 million of mitigating measures. Can you share the way you mitigate those impacts and just confirm that the impact in Q1 was around $130 million already? And regarding CapEx, just back to that question on the second EAF, how confident are you to maintain your CapEx envelope of 4.5 to 5 billion over time? Thank you.

Hi. Um, hello. Thank you for taking my question. Um, the first question would be on tariffs. Uh, I've read the headline where, uh, you were quoting, um, uh, estimating the impact of tariffs to 150 million. Um, that means there is, uh, something like 5 0 8.

Genuino Christino: Yeah, sure. Yeah, I can confirm, Boris. So in quarter two, we incurred about $140 million in costs with Section 232 tariffs. As we discussed in Q1, the expectation was for this number to be lower, about $100 million. But of course, we had the increase in tariffs impacting us from the beginning of June. And what we have been doing really is, as you can imagine, the whole organization, the whole Canadian team, they have been doing a tremendous job looking for opportunities to mitigate the impacts. And that's why we're confident here to guide for a number that is lower than otherwise we would have expected when we reported Q2 numbers. So that's the $150 million. So the net net from one quarter to the other is in the range of $10 million, right?

And regarding capex. Uh, just back to that question on the second EF. Um, how how confident are you uh to to maintain your capex envelope of 4.5 to 5 billion of the time? Thank you.

Yeah, sure. Yeah, I can I can confirm Boris. Um

So, in quarter 2.

Uh, we incurred about 140 million, uh, dollars.

in costs with section 2, 2332 there is

Uh, as we discussed in Q1, the expectation was for this number to be lower by about $100 million. But, of course, we had the increase in tires impacting us from the beginning of June. So, what we have been doing really is, as you can imagine, the whole organization, the whole Canadian team, they have been doing a tremendous job looking for opportunities to mitigate the impacts.

Genuino Christino: And what we have been doing is, of course, discussing with our customers on sharing tariffs, looking at our cost base. So a significant amount of work being done there to make sure that we can continue to supply the OEMs. As you know, what we sell into the US is high-value-added materials, important not only for us but also for our customers. And that's our focus, to make sure that we can maintain our market share with the OEMs and make sure that we can also generate big profit with these volumes. Yeah. And then, sorry, there is a second part of your question, Boris. With the second EAF, how are we comfortable that we can manage? Look, I mean, we are finishing this year a number of projects, right? So we guided for this year to spend between $1.3 and $1.5 billion with growth projects.

And that's why we we confident here to, uh, guide for a number that is uh, lower than otherwise we would have expected when we reported, uh, Q2 numbers. So that's the 150 million dollars. So, uh, the net, net from 1 quarter to the order. It's, uh, it's, uh, in the range of 10 million dollars, right? So, and, and uh, uh, what we have been, uh, doing is, of course,

Discussing, uh, with our customers, uh, on sharing sharing, uh, Taris looking at our cost base. Uh, so, uh, significant amount of work being done there to make sure that we can continue to supply the uas. And, and we, as you know, uh, what we sell into the US is high value, added materials, uh, important. Not only for us but also for our customers

And, uh, and that's all focused to make sure that we can, uh, maintain our market share with the OEMs and, uh, make sure that we can also generate big profit with these volumes.

Uh, and then, uh, sorry I I there is a second part of your question, Loris. Um,

Genuino Christino: But you should not forget that we're going to be completing this year Liberia, which has consumed a significant amount of the envelope. So we'll be completing some other smaller projects in Brazil as well. So we're going to be making room for new projects that I'm sure we're going to be in a position to discuss together with our results in quarter four.

Uh, with the second EF. How we how are we uh, comfortable that we can manage? Look? I mean, we are finishing this year, a number of projects, right? So we guided for this year to spend between 1.3 and 1.5 billion with growth projects,

But you should not forget that, we're going to be completing this year.

um, uh, Liberia

Which has consumed a significant amount of the envelope.

So we'll be completing some more smaller projects in Brazil as well.

Uh so we're going to be making a room uh for new projects that I'm sure we're going to be in a position to discuss.

um, uh,

together with our, uh,

Results in in quarter 4.

Daniel Fairclough: Great. Thanks, Boris. So I think we'll move to the next question, which we'll be taking from Tom at Barclays.

Dominic O'kane: Yes. Hi. Thanks for taking the question.

Great. Thanks Boris. So uh, I think we'll move to the next question. Uh, which will be taking from, uh, Tom at Buckley's?

Daniel Fairclough: Yeah, hi.

Dominic O'kane: Sorry, I'm going to have to come back to it. Just on tariff formal time. Could you just, it's just to sort of check our understanding on why there's so little increase, I suppose, into Q3, even though, you know, from June, you've only had one month, basically, of 50% tariffs. And you then had, you know, the consolidation of Calvert. So as I understand, you used to be sending about 2 million tons of slab every year from mostly Brazil into the Calvert JV. Those costs used to be shared with Nippon, but now you're basically absorbing 100% of those costs. You know, are you basically just saying most of the tariff costs have just been passed on to customers, and that's why you're not absorbing any more? And is that true out of Calvert as well? That's the first question.

Yes. Hi thanks for taking my questions.

Hi. Um,

I'm gonna have to come back to it, just on, just on tariffs 1, more time. Um,

Our understanding on why? There's so little increase I suppose into Q3 even though you know from June you, you've only had 1 month basically 50% tariffs.

And you then had, you know, the consolidation of Calvert. So as I understand, you used to be sending about 2 million tons of slab, every year, from Mostly Brazil into the Calvin JV, those costs used to be shared with nipon, but now you're, you're basically resorbing 100% of those costs.

um,

You know, are you basically just saying most of these tariff costs of just being passed on to customers? And that's why you're not absorbing any more and is is that true out of Calbert as well?

Um, that's the first question.

Genuino Christino: Yeah. Look, Tom, as I said, I mean, I would just reiterate, I think we have been working on mitigating these impacts, right? And as you can imagine, a lot of initiatives, a lot of discussions with our customers. So we're going to be sharing tariffs with customers as well. So that's why net net, the increase should not be so significant. That is not.

That's right. And as you can imagine, uh, a lot of uh, uh initiatives.

A lot of discussions with our customers. So uh, we are we're going to be sharing tariffs with customers as well, so that's why net net. Uh, the increase should not be so significant.

Daniel Fairclough: And our thought process around the slab movement, that's correct as well, right? You're now basically absorbing all of those slab tariff costs instead of sharing it with Nippon?

That is not.

Genuino Christino: That's right, because now we have to, so there are two things, but just make sure that we don't mix them, right? One is the supply agreement with the US steel facility. So that has nothing to do with supply within the United States. So there is no tariffs there, right? And then the tariffs, of course, will be applicable for imports from either Brazil or Mexico. But then, as you can see, I mean, as we talked about, when you see the performance of Calvert, then you can see that it's actually the profitability of that facility is actually increased. And I should remind you that even before the costs of the slabs that were being supplied to Calvert, they were under our responsibility, under ArcelorMittal's responsibility.

And our thought process around the slab movement, that, that's correct as well, right? You're now basically resolving, all of those slab, tariff costs, instead of sharing it with Nippon.

That's right, because now we have to. So, there are two things that just make sure that we don't mix them. Write 1 is the supply agreement with, uh, uh, U.S. Steel, uh, uh, facilities. So, that has nothing to do; it's a supply within the United States. So, there are no paras there, right? And then, uh, the target is, of course, will uh, be applicable for imports from Awe or Mexico. But then, as you can see, I mean, as we talked about again, you see, uh,

uh, when you see the, um,

Uh, the performance of cover, then you can see that. It's, uh, it's actually the profitability of that facility is actually increasing. And I should remind you that even before.

Genuino Christino: And that's why we were capturing already part of the EBITDA in our segment, right, as we explained in our meeting, just to make sure that it's clear.

Daniel Fairclough: Yeah. Okay. Fair enough. And then the second one, maybe just moving on to Europe. You know, we've seen some attempted price hikes through Q3. We're seeing a little bit of raw material cost inflation with iron ore and cooking coal. Maybe just some color in general on what you're seeing in the European market at the moment. Are you seeing any sort of inventory build ahead of CBAM and safeguard replacements, or are you seeing still quite a slow market? Just curious, yeah, how you see prices sort of developing in the second half. Thank you.

Uh, the costs, uh, that of these Labs that were being supplied to uh, covered they were under our responsibility under Salam responsibility. And that's why uh we were capturing already part of the beta in our segment, right? As as we explained in our just to to make sure that it's uh that is clear.

Genuino Christino: Yeah. Well, the dynamics, I mean, we talked about the fact that demand in Europe at best has been moving sideways. We feel that, and that remains a positive aspect, that inventory levels in the system that we believe they continue to be low. What is interesting, of course, is the fact that we're going to have CBAM in whatever form it can end from GEM and the promise of revised safeguards. So that creates different dynamics as well, right? Because if you are importing material and given the long lead times, so you're going to start to worry about some of these factors, right? So that is positive for the domestic news. But right now, because of some of what activities are slow, but I think we are about to see in Europe, as I said at the beginning of my opening remarks, Tom, important developments, right?

Yeah. Okay, fair enough and then um, second 1, maybe just moving on to Europe. Um you know we've seen some attempted price hikes through Q3 we're seeing a little bit of raw material cost inflation with iron ore and cooking coal um maybe just some color in general and what you're seeing in the European Market, at the moment, are you seeing any sort of inventory, build a head of sea and Safeguard Replacements or are you seeing still quite a slow Market? Um, just curious, yeah, how how you see prices, um, sort of developing in the second half, thank you.

Yeah. Well uh, the Dynamics, I mean uh we talked about uh the fact that uh demand in Europe uh at best has been moving. Uh sideways.

Uh, we feel that. And, and that is that remains a positive aspect that inventory levels in the system that we believe, they continue to be to be low.

Uh, what is interesting, of course, is the fact that we're going to have sebum in whatever form, picking in from Jen, and the promise of revised safeguards.

So that creates different Dynamics as well, right? Because if you are important material and given the lonely times, so you're going to start to worry about some of these factors, right? So that is uh, that is positive for the domestic news.

Right now, because of some of what's happening.

Genuino Christino: So we are all waiting to see really the actions that the commission will pass into legislation. And it's encouraging. And also the agreement between the US and Europe with regard to coming together to find ways to ring-fence the industry against the biggest issue that we face today, that is, of course, the overcapacity in China, right? I think that is also something that, of course, we don't have yet the details, but the fact that the problem is acknowledged and there is a goodwill to try to address it, that should be extremely positive for our business.

Daniel Fairclough: Okay. Clear. Thank you. Well done, Evet.

Slow. Uh, but I think we are about to see in Europe. As, as I said at the beginning, my opening remarks, uh, that's on, uh, important developments, right? So we are all waiting to see really the actions that the commission will, uh, pass into legislation. And it's encouraging, uh, and and and also the agreement between, um, uh, us and and Europe with regard to coming together, to find ways to ring fence, uh, the industry against the biggest issue that we face today. That is, of course the over capacity in China, right? I think that is also something that, of course, we don't have yet the details, but the fact that the problem is acknowledged and there is it could we also try to address it? That should be extremely positive, uh, for our, for our business.

Genuino Christino: Thanks, Tom.

Daniel Fairclough: So we'll move now to the next question, which we'll take from Dominic at JPMorgan. Hi, Dominic. Please go ahead.

Okay. Clear, thank you. I'll turn it back.

Thanks Tom.

Dominic O'kane: Thanks for taking my question. My questions also relate to Europe. So I just wondered if I could maybe push you a little bit more on safeguards in terms of, you know, what you would think would be acceptable for the industry as a whole. And I guess I'm also interested in the timing of the European Commission announcement with your recent indication that you're going to restart the volumes at Dunkirk. So could you just maybe give us some timing? Is that an expression of confidence in the market in the second half? And again, just really interested in a bit more detail on how you think about safeguards evolving in the months ahead.

So, we'll move now to the next question, which will take from Dominic at JP Morgan. Hi Dominic. Please go ahead.

Genuino Christino: Yeah. Well, regarding safeguards, we, and by we, I mean the industry to Europe fair, the request is that we limit through our quarters the level of imports to a market share that is more consistent with prior years, which is about 15% of the market share, right? And that is the request. And as we know, last year in 2024, the market share of imports were as high as 27%, right? So that is a significant, if implemented, it will be a significant boost to utilization rates of the steel industry in Europe. And it will allow investments to happen. So that's going to be extremely positive for the industry in Europe. And then, of course, above the quarter, then we believe that we should have also 50% of tariffs during what we have under Section 232.

Um, confidence in the market in the second half and and again just really interested in a bit more detail on how you think about safeguards um evolving in the months ahead.

Yeah.

Well, uh, regarding safeguards, uh, we, uh, and, and by, we, I, I mean, the industry to Euro Fair. The request is that, uh, uh, we limit, uh, through hard quarters.

The level of imports to a market share. That is more consistent with prior years, which is about 15% of the market share, right? So and and that is, that is the request. And as we know last year, in 2024, the market share of imports, were as high as 20 27%, right? So, that is a significant deep implemented. It will be a significant boost

Genuino Christino: Coming to Dunkirk, Dunkirk was just a normal reline, which we completed during the second quarter. We had built slab inventories before. So you should not read into it. So we just completed the reline. We brought the furnace up and we are running again. So nothing really, just normal business there.

To utilization rates of the steel industry in Europe and will allow Investments to happen so that that's going to be extremely positive for for the industry, anything in Europe. And then of course, above um, the quarter. Uh, then, uh, we believe that we should have also 50% of of dollars during what we we have under Section 232, right? Uh, coming to dunk. Um, dunk was just a normal Reliant, uh, which we uh, completed during uh, during the second quarter.

So, we have built a slab inventories before.

Daniel Fairclough: Okay. And then just a second question, really helpful on the CapEx reiteration at the $4.5 to $5 billion. But I guess in light of the question and your comments, could you maybe just give us, again, an updated comment on how you're thinking about decarbonization CapEx longer term in Europe at the present moment?

So you should not read into it. Uh so we just completed the re line. We we brought the furnace up and we are running again. So nothing really uh uh just normal normal business there.

Genuino Christino: Yeah. Well, our expectation is that this is going to happen gradually, Dominic. This is a transition that will take decades to be completed. What we have indicated is that provided that we have the right policies in place, and by that we mean we have CBAM, we have effective trade protection, we have competitive power prices, then we are ready to invest. And we have indicated that we are prepared to move ahead with a significant investment at Dunkirk with a large EAF. And that's what we would see going forward, that we will progressively provide that we have the conditions to keep then investing in new EAFs. And I would remind you that so we are investing today. So we are spending about $300 million in decarb projects. It happened, we invested this amount in 2024, and we have a similar amount this year.

Okay, and then and then just second question. Um, really helpful on the capex reiteration at the 4.5 to 5 billion dollars? But I guess in in light of the question and your comments, could you maybe just give us a again? An updated comment on how you're thinking about decarbonization capex longer term in Europe. If the person moment

yeah, well uh, I would, I would um,

our our expectation is that this is going to happen gradually, um, and Dominic this is a transition that will take the case, uh, to, uh, to be completed. What we have indicated is that provided that we have

The right policies in place. And, and by that, we mean

Uh, we have sebum. We have a effective trade protection. We have, uh, competitive power prices. Then we are ready, uh, to invest and we have indicated that we are prepared to move ahead with a significant investment at DAC with a large EF.

Genuino Christino: So we are executing or building a new EAF in Spain, Gijón. We are investing in STAL, so that's 1.6 million tons EAF flat business. So we are progressing. And then, of course, we should not forget the renewable investments. And I think as a company, we are well-placed. We have the DRI facilities. We are one of the largest producers in the world. So I think we believe that we are progressing quite well.

And and that's what we would see going forward. That we will progressively provided that we have the conditions to keep them investing in the new EFS and I would remind you that. Uh, so uh, we we are investing today. So we are spending about 300 million dollars in Dakar projects. Uh, it happened. We invested this amount in 2024 and we have a similar amount this year. So we are, uh, executing or building a new app. In in, in Spain, the home we are investing in style so that's 1.6 million tons. Yeah.

Uh flat um, uh business.

Uh, so we are progressing and then, of course, we should not forget the renewable Investments.

Daniel Fairclough: Thank you. Thanks, Dominic. So we'll move now to the next question, which we're going to take from Max at Otto. Please go ahead, Max.

Uh, and uh, and and I think as a company we are well placed. Uh, we have the dri facilities, we are 1 of the largest producers in the world. So I think we, uh, we believe that we are, uh, progressing quite well.

Thank you.

Thanks Dominic.

Matt Greene: Yeah, good afternoon. Thanks for taking my question. So I have a first question. It's on the HBI unit in Texas. Can you shed more light on your procurement there? Because I understand a lot comes from Brazil, and it's not taxed at 50%. So are you able to shift the sourcing, or are you facing some extra costs there?

So we'll move now to uh the next question, which we're going to take from uh Max at Auto. Please go ahead Max.

Genuino Christino: Thank you, Max. Well, we have the flexibility marks because we can also bring materials from our own mines in Canada, right? But I believe that, to be honest, I believe that it has been included on the list of exceptions. But I have to double-check to be 100% sure. But that was my reading. It came out yesterday, right? So I need to confirm that. But I think that was because pig iron is now for sure not. And I think, I don't know, it's also excluded. Daniel, unless you have some more.

Yeah, good afternoon. Thanks for taking my question. So I have a first question. It's on the hbi unit in Texas. Can you shed more light on your procurement there? Because I understand a lot comes from Brazil and it's no taxed at 50%. So are you able to shift the sourcing or or you facing some extra costs there?

We we I need to confirm that but I think that that was because Big Iron is now uh for sure. Not.

Daniel Fairclough: Yeah, no, you're right. That's the case, Genuino. But I think also, you know, these things can change. So it's important that your first point to have that flexibility that should something change that we can source from a different mine within our own system, and that would be Canada.

Uh and I think I don't know. It's also excluded Daniel unless you have some more. No no, yeah no you're right that that's that's the case, you know? So. But I think also, you know, these things can can change. So it's important that your first point to have that flexibility. Uh, that should something change uh, that we can uh, we can Source from uh, uh

Matt Greene: Okay. So that's clear. Second question is on M&A. So Cleveland Cliffs has put up a foresight sign in its latest results call. So I know you don't like to comment on specific targets, but how are you thinking of further expansion in the US, notably to address the mismatch you currently have in terms of organic versus M&A?

Ah ah ah Source from um, um a different, a different mind within our own system and that would be Canada.

Okay, so that's clear. So 1 question is on m&a. Um, so Cleveland kids has put up for sale sign in its latest result call. So I know you don't like to comment on specific targets but um how are you thinking of further expansion in the US? Not able to address the mismatch you currently have in terms of organic versus m&a?

Genuino Christino: But yes, you're right. So we don't really comment on M&A. I would just say that the US is and has always been a very important market for the company, right? And as you can see, our investments at Calvert, the new electrical steels plant that we are investing. So we do have the ambition to keep growing in the United States, and we have plans in place and being developed. But more specifically on M&A, I'm not going to be able to comment.

But yes you're right. So we don't really comment on m&a. I would just say that us is and has always been a very important market for the company, right? And as you can see our investments covered,

The new um, electrical steals plant that we are investing. Uh so we do have the ambition to keep growing the United States and and and we have plans uh in place and being developed

Matt Greene: Okay. Fair enough. And just the last one, it's on India. So you're flagging again your ambitions there to grow even more, notably through a new wind field facility. But at the same time, we are seeing prices in India quite depressed at just a few tens of dollars of premium to the Chinese market. So wouldn't it be wiser to wait to have, I mean, a better trade defense system there to potentially start new investments? Because clearly, the 12% of safeguard tariffs we've had for a few months are not enough.

but more specifically on m&a, I'm I'm not going to be able to to comment

Okay, sorry nothing because the last 1, it's on India. So your your, your flagging, again your Ambitions there to, to, to grow even more notably through a new green fit facility. But at the same time, we are seeing, um, prices in India, quite depressed at at just, um, a few tens of dollars of Premium to the Chinese market. So wouldn't it be wiser to wait to have? Um, I mean a better, um,

Genuino Christino: Yeah, I think the industry would agree with you, and I think the views are mobilized. But look, I mean, we have to look beyond this, right? And structurally, the Indian market is very attractive, right? So it's highly concentrated. It's a market that is growing 7%, 8% every year. And if you want to continue to be relevant in that market and you want to keep your market share, increase your market share, you have to grow with the market. And as you can see now in results this quarter as well, the results already double. So back to 200 plus million. You can argue that yet not enough, but it's, and we have not yet seen the benefits of some of these investments that we talked about, the downstream.

Try different system there, uh, to to, to potentially start new Investments because clearly the 12% of, uh, of safe quarters, we we've had for a few months are not enough.

yeah, I I think the industry would agree with you and I think they uh,

the views are mobilized. Um,

Have a look. I mean we have to look Beyond this, right? And structurally uh the Indian market is very attractive. Right? So it's it's highly concentrated. It's it's a market that is growing 78% every year.

Uh, and uh, and, and if you want to, uh, continue to be relevant in that market, and you want to, uh, uh, keep your mortgage increase your mortgage. So you have to grow with the market,

Genuino Christino: So our automotive complex is going to be commissioned part of it now and towards the second half of the year. So we'll continue to improve the mix of products that we're going to be able to offer in the Indian market. So we remain very excited about the opportunities provided by the Indian market. And right now, the focus is on completing the expansion in Azera, and of course, prepare the ground for future expansions. As you know, this is a long process in India, and it's important that we continue to work so that we can, when the moment is right, to move forward.

And uh, and and as you can see in our results, this quarter as well, uh, the results already doubled. So back to 200 plus million. Uh, you can argue that yet not enough but uh, uh, it's, uh, and we have not yet seen the benefits of some of these Investments that we talked about the, the downstream. So our Automotive complex is going to be commissioned um part of it now and uh towards the the the second half of the year. So we'll continue to improve the mix.

Uh, of of products that we going to be able to offer in the Indian market. So we remain very, uh, excited about the opportunities. Uh, uh, provided by dividing the market. And uh, and right now, the focus is

on completing the expansion in Azure and of course, prepare the ground for future. Uh, expansions as you know, this is a long process in India.

Matt Greene: Okay. Very clear. Thanks. Thank you.

And it's important that we, uh, we continue to work so that we, we can, uh, when the, when the moment is right to, uh, to move forward.

Daniel Fairclough: Thanks, Max. So we'll move now to take the next question from Andy at UBS. Hi, Andy. Please go ahead.

Okay. Very clear. Thanks. Thank you.

Thanks. Bye.

So, we'll move now to take the next question, uh, from Andy at UBS.

Andy Jones: Thank you. Can you hear me okay?

Hi Andy. Please go ahead.

Daniel Fairclough: Yes.

Andy Jones: Cool. Excellent. Just to follow up on M&A, no specific targets, but obviously, the net debt after Calvert's now back above 8 billion, you used to sort of talk about a 7 billion target, albeit, you know, obviously, the business is very different now. I mean, how are you thinking about leverage more broadly around the potential for further M&A? I mean, does this rule out large-scale M&A, things like Balarec or, you know, I mean, the close, I mean, without being specific? I mean, are you thinking you can do something larger, or are we talking like potentially small incremental stuff from here, or, you know, just focusing on some of the organic growth projects, which are obviously pretty numerous in your portfolio? How are you thinking about that more big picture?

Thank you. Can you hear me? Okay? Yeah.

Cool. Excellent. Follow up on m&a. No specific targets but obviously the net data to calve. That's now, you know, back above 8 billion used to sort of talk about our 7 billion Target. Albeit. You know, obviously the business is very different now. Um, I mean, how are you thinking about leverage more broadly around the potential for further Revenue? I mean, does this rule out large scale m&a? Things like Valor or you know, I mean the clothes, I mean, well, being specific. I mean, are you thinking you can do something large? Or are we talking like potentially small incremental

Genuino Christino: Yeah. Well, I mean, I can say that we have a good pipeline of projects that we can execute organically, right? So that has been the focus, continues to be the focus. And specifically on, and I should also say that our message on Balarec, we made the same, right? So we are not, we are happy with the performance of the company. We are happy with our stake. We have no intention there to increase it. When it comes to the debt, 8 billion. So first of all, I think we feel very comfortable. As I'm sure you have seen, we were just upgraded by S&P, right? To triple B flat. So showing the progress or the progress that we have been discussing, acknowledged by the rating agencies as well.

Portfolio. How are you thinking about that more big picture?

Yeah, well I I can see that we have uh uh a good pipeline of projects um that we can execute.

Uh, organically, right? Uh so uh, that that has been the focus continues to be the focus.

Um and specifically on um and and I should also say that uh, our message on parak, we make the same, right? So we are not

We are happy with the, uh, the performance of the company. We are happy with our state, we have no intention, that's true, uh, to increase it. Um,

uh, when it comes to the debt, uh, 8 billion, uh uh, so

uh, first of all, I think we it's, uh, we feel very comfortable, uh, as as I'm sure you have seen

We were just upgraded by by S&P.

Right, uh, the Triple B flat.

Genuino Christino: And we should not forget that with these investments, M&A, we are adding a significant amount of extra EBITDA to the business, right? You see in our bridge, in our debt. So this year, $700 million of extra EBITDA coming from projects, but also M&A. So that's how we are looking at, feel very comfortable with the capital structure of the company.

So showing, uh, the progress of the progress that we have been discussing, uh, acknowledged by by the rating agencies as well.

Uh and we should not forget that with this uh Investments m&a. We are adding significant amount of extra a betta to the business, right?

Uh, you see in our bridge, in our debt. Uh, so this year, 700 million of extra

betta coming from uh projects but also MMA

Andy Jones: Okay. And just one other follow-up on the settlement that you put into one of the one-offs for the EBIT in the quarter, this Voto-Antin. When do you actually expect to make sort of cash payments on that settlement, and how is that phased?

Um, so that's how we are looking at. Uh, so very comfortable with the, uh, uh, the capital structure of the company.

okay, and just 1 of the follow-up on the um, the settlement that you put into 1 of the 1 Ops for the

Genuino Christino: It will happen over three years, Andy.

For the bit in the quarter. This uh bottom. Um what when do you actually expect to make sort of cash payments on that settlement? And how's that phased?

It will happen over um uh 3 years. Uh,

Andy Jones: Okay. And it's almost.

uh, uh, and it

Genuino Christino: So there is one down payment, and then so you divide it by four. You have one on signing and three other payments in three years. So it's going to happen over three years.

Okay? And didn't know, it's almost. So there is 1 down payment and then uh so you divide it by 4 it's it's uh you have 1 on signing and and 3 order payments in 3 years so it's going to

Andy Jones: Okay. And that's in line with the EBIT loss that you booked on that settlement, right, in cash?

Uh, to happen over uh 3 years.

Genuino Christino: EBITDA loss. Well, actually, if you look at the footnote, you're going to see that the amount is 500, right? And then what you see in our P&L is the difference because we had already some provisions. So that's why you see a delta between the P&L and the footnote. But that's about $100 million. So the settlement is 500 million.

Okay. And that's in line with the the ebit loss that you booked on that uh, settlement right in cash.

Uh, I'm a bit at a loss. Uh, well, actually if you look at the footnote, you're going to see that the amount is $500.

Mhm. Alright, and then, uh, what you see in our pnl is, uh, the difference uh, because we had already some provisions.

Andy Jones: Okay. That's clear. Thank you.

Uh so that that's why you see a Delta between the pnl and uh, and the footnote, but that's about 100 million dollars. So the the settlement is 500 million.

Okay, that's clear.

Thank you.

Daniel Fairclough: Great. Thanks, Andy. So we have time for, I think, two, three more questions. So the first we're going to take from Bastian at Deutsche Bank. Hi, Bastian.

Bastian Synagowitz: Yeah. Hey, good afternoon. Thanks for taking my questions. My first one is actually on your project pipeline. I saw in the footnotes that there are some projects which are delayed, and I was wondering if this is purely due to permitting. Is this also a response to the current environment? And are there any further shifts or delays which you're currently at least looking at? Maybe you could also give us an update on the EBITDA cadence. I think the chart here in the presentation deck seems to be changed. So there must be something which is compensating for the delay there. That's my first one.

Great. Thanks Andy. Um, so we have uh time for uh 2 3, more questions. So, the first we're going to take from Bastion at Deutsche Bank

Augustine.

Yeah. Hey good afternoon. Thanks for taking my questions. Um, my first 1 is actually on on your project pipeline as well, and the food notes that there are some projects which are, which are delayed. Um, and I was wondering if this purely due to permitting is this also a response to the current environment and are there any further shifts or delays? Which you currently at least look looking at. Maybe you could also give us an update on, um, on the abda Cadence. Um, I think the chart here in the presentation decks

Seems to be changed. So there must be something which is compensating for the delay. There, that's my first 1.

Genuino Christino: Yeah. So we basically, you have a MAGIC in the north of France. That's the electrical steel project there, Bastian. And as we write there, it's every time you have a brownfield, you always face, you know, the risk that you can, you may find out something that you could not have anticipated. That's one of the reasons. And then in Massip, when one of the mines was sutured, so the delay is primarily because of licenses that delayed some of the moving of the equipment.Things.

yeah so uh we uh basically you have a mic uh in north of France at the electrical Still project there uh Bastion and uh as as we as we write there it's uh it's uh every time you have a brown field you you always you you face

Daniel Fairclough: But these are not very significant movements, I would say. They are quite minor. So that's why you don't really see a significant, any important change in the beta bridge coming from Projects and M&A. Daniel, anything further?

Um, you know, there is that you can you may find out something that you could not have anticipated. That's that's 1 of the reasons and then uh, in massive, when 1 of the Mind Constitution. So you were the delay is primarily because of uh uh licenses that today, some of the moving uh, of the equipments.

um,

um, so that's why you don't really see a significant, any, any important change in the, uh, uh, the

The beta Bridge coming from projects and Emily.

Genuino Christino: No, I would only reinforce those points Genuino said. Yeah, no further additional comments.

Daniel.

Alan Gabriel: And no other projects which you're currently looking to move just given the current economic environment, I guess?

No, I would only reinforce those points and we know, so yeah, no no further additional comments.

Daniel Fairclough: No, not at all. And I think that's a good point because despite the challenging market conditions, we feel that the company is very well positioned, right, to move forward with the projects. And as we talked about, it's going to be completing a number of projects, right? And then, as you can see, then we're going to have another significant pickup in EBITDA also in 2026. So we want just to keep that momentum. And so on the contrary, you should see us announcing more projects as we talked about in our Q4 results.

And and no other projects which you're currently looking to move just given the current economic environment I guess.

No, not at all and and I think that's, that's good point. Because despite the the challenging market conditions, we feel that the companies very well positioned, right? To move forward with the projects and as as we as we talked about this year, we're going to be completing

Alan Gabriel: Okay. Got you. Then my second one is on your Brazilian slab strategy. I guess a few years ago, you obviously bought CSP, which is basically a slab business. And you still have Sierra Vitória, which is basically long slabs used to supply both, I guess, into Calvert or into the US and North American market. Now, given that there is obviously a pretty long list of capacity projects in the US at the moment, I mean, you've just built like the one and a half million ton a year. If you're talking about a second one, what's going to be your strategy here for the Brazilian slab capacity where you're still long?

A a number of projects, right? And then, uh, as you can see, then we're going to have another significant pick up in uh, aita also in 20126. So we want just to keep that momentum. And and, and uh, so on the contrary, you should see us announcing more projects as we talked about in in our Q4 results.

Daniel Fairclough: Yeah. Well, I think that's a good question, Valciano. And we are very well positioned in the Brazilian market. So first of all, I think it's important to acknowledge that Brazil is growing, right? So the flat demand is growing, and it will continue to grow. And we are well positioned because we have the crude steel capacity, right? So we don't need to invest in developing or building a new upstream. So we have. And if you look at some of our competitors there, that's the real differential that we have to grow with that market, right? So that's one of the possibilities that we have. And we should not forget also that the SEN and TUPARAM, they produce some of the highest quality slabs in the world, right? You're not going to find that quality of slab everywhere.

Okay, got you. Then my second 1 is um, on your Brazilian slap strategy. I guess a few years ago you already bought CSP which is basically a slap business. Uh, you still have, you know, Victoria. Um, which is basically long slaps used to supply both I guess into Calvin or into into the into the US and North American Market. Um, now given that there is obviously a pretty long list of capacity projects um, in the US at the moment I mean you've just built like the 1 and a half million tonne. EF, you're talking about a second 1. What's what's going to be your strategy here for the Brazilian slab capacity where you're still long.

Yeah, well I think that's a good good question. Uh uh Russian and uh and I and we are very well positioned in the Brazilian market. So first of all, uh I think it's important to acknowledge that Brazil is is growing, right? So the flat

Um uh, demand is is growing and it will continue to grow.

uh, and we are, well, positioned because we have uh, uh,

The growth still capacity, right? So we don't need to invest and developing or building a new uh, stream. So we have. So if you look at some of our competitors there, that's that's a real differential that we have.

To grow with that market, right? Um, so that's 1 of the possibilities that we have.

And, uh, and we should not forget also that uh, the sin and and do around. They they produce some of the highest quality slabs in the world.

Daniel Fairclough: So we feel that we're going to be always in a position to market the volumes that we have from there.

Alan Gabriel: Okay. Very clear. Thanks so much.

Right? You're not going to find that quality of slab everywhere. So uh, so we we uh, we uh, we feel that we're going to be, uh, always in a position to Market, uh, uh, uh, the volumes that we have from their

Genuino Christino: Thanks, Valciano. So we'll move now to the next question, which we're going to take from Tristan at BMP Exxon. Hi, Tristan.

Break you. Thanks so much.

Thanks B.

Ephrem Ravi: Yes. Hi. Thank you for squeezing me in. Just the first one on China. What is your take on the recent official commentary on potential capacity restructuring? I mean, do you believe significant capacity cuts like in 2015, '16 are really on the table? And also, you kept a stable demand outlook for the year in China despite what I think was pretty weak H1. So what are you baking into H2 and why would you have a more constructive setup for H2? That'd be my first question.

So we'll move now to um the next question, which we're going to take from Tristan at BMP accent?

Hi Tristan.

Daniel Fairclough: Do you want to take that one, Daniel?

Yes. Hi, thank you for squeezing me in just uh, 2. The first 1 on China. What is your take on the recent, uh, official commentary on potential capacity restructuring? I mean, do you believe a significant capacity Cuts like in 2015 16 are are really on the table. And also you kept the stable, uh, demand outlook for the year in China. Despite what I think was pretty weak H1. So what what are you baking in into H2? And why would you have a more constructive, uh, setup for for H2, that that'd be my first question.

Genuino Christino: Yeah, absolutely. So I think relative to our, it's all about the relative to our expectations at the beginning of the year. So yes, in China, they're obviously seeing some export impacts from the reciprocal tariffs environment, but they are finding opportunities, obviously new export opportunities. And then domestically, demand is being supported by the infrastructure spend and the efforts to stimulate domestic consumption. So that's the reason why we've not significantly changed our projections for Chinese demand relative to what we'd published back in February. I think on the prospect of capacity reform, obviously, this is something that we have been championing, something that it's very obvious that this needs to occur. China has a capacity imbalance. It's leading to very depressed profitability within the domestic industry. It's leading to aggressive exports at very low pricing.

Do you wanna take that 1? Daniel

Yeah, absolutely. So I I think relative to our, it's, it's all about the, uh, relative to our expectations at the beginning of the year. So yes, in China, um, the they're obviously seeing some, uh, export impacts from, uh, the uh, the the reciprocal tariffs environment, but they are finding opportunities, obviously, new new export opportunities. Um, and then domestically demand is being supported by the, um, by the uh, infrastructure spend and the, and the efforts to, uh, stimulate domestic consumption. So, uh, that, that, that's the reason why we've not, uh, significantly changed our, uh, our our projections for uh, Chinese demand, uh, relative to what we'd uh uh, published back in February.

uh, we have been

Genuino Christino: And as we talked about in previous questions, it is a significant source of unfair competition for the rest of the global industry. So reform needs to happen. And your question, obviously, is, will it happen and over what sort of timeframe? And all the statements that we've read over the last couple of months would give you encouragement that things will improve. I think if you look at the recent production statistics, it would suggest that things can improve. However, exports do remain very elevated. And so I think the only thing that we can really be really looking out for is this ring fencing that Genuino talked about previously. That's what's required. We can't assume that China will reform its industry in due course.

Championing. Something that it's, you know, it's very obvious that this needs to occur. Uh, China has a capacity and balance. Um, it's leading to very depressed, uh, profitability within the, the domestic industry. Um, it's leading to aggressive exports at very low pricing. And and, and and as we talked about in previous questions, it is uh, a significant source of, uh, unfair, uh, uh competition for for the rest of the global industry. Um, so reform needs to happen um and and and your question obviously is uh uh, will it happen and and over what, what sort of time frame? And uh, all the statements that we've read over the last couple of months have have would give you encouragement, uh, that, uh,

Things will improve. I think if you look at the recent production statistics, uh, it would suggest that that things can improve. Um, however, exports do remain very elevated. Uh, and so, um, you know, I, I think the only thing that we, we can really be, um, uh, really

Genuino Christino: And therefore, the other regions need to appropriately ring fence their industries to make sure that they're not damaged by that excess capacity and unfair trade.

Ephrem Ravi: All right. That's helpful. Thank you. And my second question is just going back to the steel action plan. There's been a specific proposal to cut quotas by 40, 50 percent. Do you think there's a real probability that the European Commission will take such action and how confident are you? Basically, what is different this time in your conversation with the Commission? For instance, if we look at it, I mean, the fact that Germany was not part of the recent proposal could indicate that there is not a united front from all the member states. So any color there, that'd be great.

Uh, looking out for is, uh, uh, is this ring fencing that, uh, that Jim we know talked about previously? Um, that's what's required. We can't assume that China will reform its its industry and due course, and therefore, uh, the, the the other regions, uh, need to appropriately, ring ring fence their Industries. Uh, to make sure that they're not damaged by that excess capacity and unfair trade.

All right. That's a that's helpful. Thank you. And um, my second question is just going back to the Steel action plan. There's been a specific proposal to cut quotas by 40. 50%, do do you think there's a real problem that the European commission will take such action? And how confident are you basically what, what is different? This time, uh, in your conversation with with the commission? For instance, if we look at it I mean the fact that Germany was not part of the recent proposal could indicate that there is not a united front uh from all the member states. So any color there that that that'd be great.

Daniel Fairclough: Tristan, I think we can only wait, right, and see finally what comes out of us. We are engaged through our association. So we are in very close dialogue with the authorities, governments, the Commission, encouraging. France published recently a position paper in which they also defend these levels of quotas, right? But I agree with you. It's in Europe, it's challenging. That's why we have to really wait and see and see what finally gets converted into legislation, right? And I guess we will know very soon. I mean, the promise is to deliver the new proposal after summer. So I think we should know relatively soon.

Uh, Tristan, I think we can only wait, right? And see. Uh, finally, what is uh,

What comes out? Of course we are engaged, uh, uh, through the soc our association. So we are in in very close dialogue, with uh, with the authorities governments, the commission,

uh, encouraging France published recently a position paper in which they, they also defend, uh, this levels of of quotas, right? Um, but I agree with you. It's in Europe, it's it's challenging. That's why. Um,

Ephrem Ravi: All right. Thank you.

We have to, uh, really wait and see and uh, uh and see what finally gets, uh, converted into legislation, right? And, uh, I guess we will know very soon. I mean, I the promise is to deliver the, uh, the new proposal after the summer. So I think our we should know relatively soon.

Genuino Christino: Thanks, Tristan. So we'll move to our last question, which we will take from Matt at Goldman Sachs. Hi, Matt. Please go ahead.

All right. Thank you.

Matt Greene: Hey, good afternoon. Thanks for squeezing me in there. My first question is just on India. Encouraging to see those tariffs in April positively contribute to your margins. And I have to say the quarter uplift was quite impressive. So my question is just, what was the exit margin at the end of the quarter on a per ton basis, if you happen to have that to hand? And how should we think about it to go forward in light of both the tariffs and commissioning of the downstream value-added products?

Thanks Tristan. Uh, so we'll move to our last question. Uh which we will take from Matt at common sacks.

Hi Matt, please go ahead.

Hey, good afternoon, thanks. Thanks for squeezing me in there. Um uh, my first question is just on, on India, um, encouraging to see those tariffs in April positively contribute to your to your margins. And I have to say the quote quarter uplift is quite impressive. So my question is just what was the the exit margin at the end of the quarter on a patan basis if you happen to have that to hand and and how should we think about it to go forward in light of both the tariffs and and commit

Fishing of the downstream value added products.

Daniel Fairclough: So I'm not sure that I got the first part of the question, Daniel.

So, I'm not sure that I got the first part of the question, Daniel.

Genuino Christino: Would you like me to?

Daniel Fairclough: That was just on the, yeah, go ahead. Yeah.

Matt Greene: Would you like me to repeat? Yeah, sure. Okay. My question was just the margins that you've seen, the quarter-on-quarter uplift in India has been quite impressive. So the question is just, what was your exit margin at the end of June? And then how should we think about the go forward, just given the effect of the tariff, but also the commissioning of the downstream? Yeah.

Daniel Fairclough: Yeah. Matt, perhaps I talked about the moving parts there, right, in a little bit more detail. So moving forward, I mean, for quarter three, and I think it will address your first part of your question. So our expectation is for profitability to be largely stable compared to what you see in quarter two, right, which I think addresses some of your points, is stable. And the downstream, really, I mean, of course, there will be a good contribution in terms of extra margin, right, that we're going to be able to print. But more importantly, we'll open up a new avenue in terms of product offering in the Indian market, right? So both us and Nippon, as you know, Auto is a franchise of our companies. And it's a market that we're going to be able then to address strongly once we complete these investments.

So that was just on the yeah, go. Yeah. Would you like me to repeat? Yeah, sure. Okay, I'll just my, my question was just the margins that you've seen the quarter on quarter uplift in India has been quite impressive. So, um, the question is just what was your exit margin at the end of, at the end of June. And then, how should we think about the go forward? Just given, um, you know, the effect of the tower but also the commissioning of the downstream.

Yeah.

Yeah, for sure. I talked about the moving Parts there, right? A little bit more detail. So, um, so moving forward and then for for, for quarter 3, and I think it will address your uh, first part of your question. Uh, so our expectation is for profitability to be largely uh, stable.

Which is, which is, which is which, I think addresses some of your um uh uh points uh stable and um and uh the downstream really, I mean, of course there will be a good contribution in terms of extra margin, right? That we're going to be able to uh print. But more importantly, it will open up a new Avenue in terms of uh uh product offering in the, in the market, right? So both us and the pawn as you know, uh uh out out to is it's it's a franchise of of of our companies.

Daniel Fairclough: And as you know, I mean, these are profitable products. So I will not get into specifics, but just to give you a flavor, the importance of completing these projects for the future of the profitability of AMNSI. Daniel, if you have anything to add because you were there recently as well.

And uh and it's a market that we're going to be able then to uh address strongly uh once we complete this uh Investments. And as you know I mean it is the profitable products.

Uh so I will not get into specifics but just to give you a flavor the importance of uh completing this projects for for the future of the profitability.

uh, of, um

Of amsi.

Genuino Christino: Yeah, absolutely, Genuino. So it is an important part. You know, when we took investors to India to see the expansion of the capacity and the new value-add capacity that you were just talking about, I think this is all a very important part of the transformation of the business. So as we go from the current capacity, as we add the two new blast furnaces, as we add the coke capacity, we add these new finishing capabilities, higher-value product opportunities, this will really transform the profitability of our business in India. So you shouldn't think that the doubling of capacity will double profitability. Really, you should think that the doubling of capacity underway will add 150% to the normalized profitability. And a lot of that additional profitability will come through this higher-added value product mix.

Anyway, if you have anything to add because you were there recently as well.

Yeah, absolutely jurina. So it is a, um, an important part, you know, when, when we took investors to, uh, to uh, India to, to see the, uh, the expansion of the capacity. Um, and the, uh, the the new value add capacity that you were just talking about. I think this is all, um, a very important part of the transformation of the business. So as we go from, uh, the, the current capacity as we add the 2 new blast furnaces, as we, uh, as we have the, the coat capacity. Uh, we had the, the these new finishing capabilities, uh, higher the value product, uh, opportunities. And this will really transform the the, the profitability of our business in India. So, you shouldn't think that, um, the doubling of capacity will will double profitability? Uh, really. You should think about the, the doubling of capacity, uh, underway will add 150% to, uh, the normal

Matt Greene: That's helpful. Thank you. And my last question is just on Calvert. Congrats on the first slab. How should we think about the ramp-up from here to the 1.5 million tons by mid-2026? And if you can give any color sort of on the margin uplift alongside that ramp-up, thanks.

normalized profitability. Uh, and a lot of that additional profitability will will come through this, uh, added value product mix.

That that's helpful. Thank you. And my last question is just on Calvin, congrats on the first um the first slab. How should we think about the ramp up from here? Um to the 1.5 million tons by mid 2026? Um and and and if if you can't give any color sort of on the margin uplift um alongside that ramp up thanks.

Daniel Fairclough: Yeah. I mean, we talked about, I think it was in the previous quarter, Matt. So it should take us about a year to get to full capacity there, right? So we had a couple of weeks of delays to have the first slab casted. So our expectation is to get to the end of the year with a run rate in the range of 60%. And then from there, we will continue to ramp up. So by the end of the second quarter next year, we should be at full capacity.

Yeah. I, I mean, uh, we, we talked about, I think it was in the previous quarter. Um, uh, I met. So it should take us about a year, uh, to get to full capacity there. Right? So, we had a couple of weeks of delays to, uh, to have the first

Uh, uh slab uh, casted. So I our expectations to get to the end of the year, uh, you know, with a run rate in the range of 60%

And, uh, uh, and then from there, we will continue to ramp up.

Matt Greene: That's great. Thank you.

Uh, so by the end of the second quarter next year, we should be at full capacity.

That's great. Thank you.

Genuino Christino: Great. And then what we perhaps just to add in terms of the margin profitability, if you think about the cost of the EAF, it should be very similar to the Brazil slab cost. So when you think about the impact on our business, that should be a pretty good guide for you.

Great. And and then what we

Perhaps, just to add the, in terms of the, the margin profitability. Uh, the if you think about the, uh, the

the cost of of the

eaf.

Matt Greene: Thanks, Daniel.

Be very similar to, um, the Brazil slab cost. So, um, when you think about the impact on on, on our business and that should be a pretty good guide for you.

Genuino Christino: Great. So that was our last question, Genuino. So over back to you.

Thanks Danielle.

Daniel Fairclough: Okay. Thank you, everyone. Before we close, I want to reiterate my messages from the beginning of the call. First and foremost, our results continue to show structural improvements, and this is expected to continue. Secondly, our North American franchise is well positioned. We now own 100% of Calvert, the best steel facility in the US. This is the cornerstone of our franchise and the new EAF, together with the new slab supply agreement, will ensure we meet melted and pool requirements. Third, we are transitioning to a more favorable market structure in Europe. If the European Commission delivers a new trade defense mechanism and an effective CBAM, then our business can flourish. And ArcelorMittal is well positioned to capitalize on the opportunities created by defense and infrastructure investments.

Great. So that was our last question. Jeremy know, so over back to you.

Okay. Uh, thank you, uh, everyone. Uh, before before we close, I want to reiterate my messages from the beginning of the call.

First and foremost, our results continue to show structural improvements and this is expected to continue.

Secondly, our North America franchise is well positioned. We now Own 100% of covert the best deal facility in the US.

This is the cornerstone of our franchise in the new year. I have, together with the Newslab supply agreement, ensured we meet melted and pool requirements.

Third, we are transitioning to a more favorable Market structure in Europe.

Daniel Fairclough: And finally, to repeat what I have said in recent calls, returning capital to shareholders at the bottom of the cycle while continuing to invest in growth is clear evidence of the progress ArcelorMittal has made and demonstrates that our company can deliver value through all aspects of the steel cycle. With that said, I will close today's call. And if you need anything further, please do reach out to Daniel and his team. I look forward to speaking with you soon. Wishing you all a happy summer. Stay safe and keep those around you safe as well. Thank you very much.

Middle is well positioned to capitalize on the opportunities created by defense and infrastructure investments. And finally, to repeat what I have said in recent calls, returning capital to shareholders at the bottom of the cycle while you continue to invest in growth is clear evidence of the progress ArcelorMittal has made and demonstrates that our company can deliver value through all aspects of this cycle.

With that said, I will close with this call and if you need anything further, please do reach out to Daniel and his team. I look forward to speaking with you soon. Wishing you all a happy summer. Stay safe and keep those around you safe as well. Thank you very much.