Q2 2025 ArcelorMittal SA Earnings Call

Speaker #2: Good after, good noon, everyone. This is Daniel Fairclough from the ArcelorMittal Investor Relations team. Thank you for joining this call to discuss ArcelorMittal's performance and progress during the first half of 2025.

Speaker #2: 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 in detail, but we published it this morning on our website for your information.

Speaker #2: I do want to draw your ention to the disclaimers that are on slide number 25 of that presentation. As normal, Genuino will make some opening remarks before moving directly to the Q&A session.

Speaker #2: So, to k a question, please do press Start, 1, 1 on your keypad to join the queue. Over to you, Genuino.

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 the audit 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.

Speaker #3: 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.

Speaker #3: 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 the audit last year.

Speaker #3: 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.

Speaker #3: Now, I want to focus this quarter on three key points. First and foremost, our results continue show structural improvements. Second quarter data increased as expected and at 135 dollars per tonne, our margin continues to show that the benefits of our asset optimization and growth strategy are delivering structurally higher margins.

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.

Speaker #3: Our strategic projects have good momentum. Liberia posted a record volume quarter, our India renewable project is delivering all the performance that was expected and more.

Speaker #3: And the commissioning of our new value-added capacity at Hazira is underway. Our strategic projects together with the impacts of recently completed M&A are an important support to our EBITDA profile.

Speaker #3: 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.

Speaker #3: AscelorMittal 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.

Speaker #3: My second point is that full ownership of Calvert is a very positive development for AscelorMittal. Calvert is the premier steel-making facility in the United States and a cornerstone of our North America franchise.

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.

Speaker #3: 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.

Speaker #3: 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 flood supply contract, Calvert's highest quality finished steel will meet US melted and poor requirements.

Speaker #3: 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.

Speaker #3: 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 we'll taking as part of our next capital location cycle.

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 the strengths should create. Putting this all together, ArcelorMittal is in a strong position both operationally and financially.

Speaker #3: 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 our bon border that truly delivers the level playing field.

Speaker #3: 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.

Speaker #3: Added to this, 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 AscelorMittal favorably to capitalize on the opportunities these trends should create.

Speaker #3: Putting this all together, AscelorMittal is in a strong position both operationally and financially. Our optimized asset portfolio is delivering a structurally higher margins. And with the outlook supported by our strategic growth projects, this should continue.

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&A.

Speaker #3: 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.

Speaker #3: Each AscelorMittal share now represents a greater proportion of our capacity, a bigger share of our leading franchise businesses, a larger stake in our growth projects.

Speaker #3: And a greater ownership of our unique business in India. With that, Daniel, I believe we can start the Q&As.

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.

Speaker #2: Great. Thank you, Genuino. 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.

Speaker #2: We do have a good queue in front of us already. And we will take the first question, please, from Allan at Morgan Stanley. Hi, Allan.

Speaker #2: Please go ahead and ask your estion.

Daniel Fairclough: 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 Lazaro Cardenas in Mexico, if you don't mind? That's my first question. Thanks.

Speaker #3: Hi. Hi. Thank you taking my questions. I have two questions, if I may. The first one is on the EBITDA building blocks into Q3 25.

Speaker #3: Can you walk us through the different moving parts, including the ASB in Europe and North America? The dollar impact of tariffs on North America?

Speaker #3: And the power outage impact on Lázaro Cárdenas 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.

Speaker #4: Thank you a lot. So, I will start with your second question on Mexico and then as usual, Daniel will walk you through the moving blocks.

Speaker #4: So, in quarter two, as you can see, and as highlighted in our earnings alone, we faced operational issues. With one of our transformers, so that impacted the production of our EAF.

Speaker #4: That has been restored. The EAF, and as you know, that's our most important part of the business as the flat business. So, that is up and running again.

Speaker #4: Nevertheless, as we disclosed in our NDA of our NAFTA segment, we experienced $40 million of losses because of the operational issues in quarter two.

Speaker #4: We have subsequently taken the decision to bring down the finance that is producing for the long business. For maintenance. And this finance will most likely continue to be down for the next couple of months as we perform this maintenance.

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?

Speaker #4: So, that's why and then it will comment we will continue to see shipments at the same level as you see in quarter two coming from Mexico.

Speaker #4: So, will get back the shipments from flat, but then you will see a reduction in shipments because the finance is down. But quarter on quarter, then shipments should be relatively stable for Mexico.

Speaker #4: Daniel, do you want talk about the moving parts?

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.

Speaker #2: 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, Allan.

Speaker #2: But I think, as we look from the second quarter to 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.

Speaker #2: I ink 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.

Speaker #2: But that will be more than offset by the impacts of the Calvert consolidation. And then the third factor I would be looking out for in Q2 to Q3 bridge is the impact of lower volumes in mining segment.

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.

Speaker #2: Because we did see some volume catch-up in the second quarter. And that won't then repeat into Q3. So, mining volumes will sort of come down a little bit in Q3.

Speaker #2: 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 in terms of the bridge from Q2 to Q3.

Daniel Fairclough: 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?

Speaker #3: Thank you. And the cost at Mexico should be assumed still same cost, Q on Q, is there going to be an increase in cost run rate because of the stoppage?

Speaker #4: That's a good reference, Allan. So, the $40 million is a good reference.

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

Daniel Fairclough: 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.

Speaker #3: 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.

Speaker #3: But in short term, you're still highly dependent on imported material for your slabs. How do you plan to mitigate risk of tariffs should the current 50% level remain unchanged versus Mexico and Brazil?

Speaker #3: Will you be changing the flows? How will you change the mechanics of the business? Thank you.

Genuino Christino: Well, I think what is important, Alan, is 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, it's not so significant. And as you can see in the results of Calvert, it's really exceptional, right?

Speaker #4: Well, I think what is important 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 poor materials in the United States.

Speaker #4: 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.

Speaker #4: But as you can see, I an, 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 remental impact of tariffs is not so significant.

Speaker #4: And as you can see in the results of Calvert, it's really exceptional, right? So, the run rate is getting very close to 900 million dollars.

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.

Speaker #4: So, Calvert is doing extremely well. A 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?

Speaker #4: That's where we see the biggest impact today.

Daniel Fairclough: Thank you. Very clear.

Speaker #3: Thank you very clear.

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.

Speaker #2: Allan. So, we'll move to the next question. Which we'll take from Efrem at Citi. Hi, Efrem. Please go head.

Various Analysts: Thanks. On the Calvert second EAF, you said, you know, in the next CapEx 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. So it's, 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.

Speaker #5: Thanks. On the Calvert second year, as you said, you know, in the next CapEx capital allocation cycle, you would be considering, could you be a bit more specific at the time of that?

Speaker #5: 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 at full ramp-up.

Speaker #5: o, it's and it looks like ou'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?

Speaker #5: I suppose at $100 benchmark iron ore, you'll be getting about $80 per ton additional contribution margin given the cost basis relatively fixed. Thank you.

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 CapEx-wise, it should also make sense to move forward with this.

Speaker #4: Yeah. So, as in 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.

Speaker #4: 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.

Speaker #4: 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.

Speaker #4: 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, CapEx-wise, you should also make sense to move forward with this the timing-wise, you're going to ed to bear with us for a ittle longer.

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 concentrated 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.

Speaker #4: And 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.

Speaker #4: So, we have commissioned the first line. So, it's the first line of the concentrated. It's running. That's about $5 million tons. So, and we're going to be commissioning the other two lines as we progress now in the second half.

Speaker #4: So, in quarter three, the level of shipments that you're going see, it's going to be largely the same. You're not going to see an increase in shipments in quarter three.

Speaker #4: But you're going to see already a change in mix. So, you're going to see more synthetic feed concentrate being shipped out of Liberia and less DSO.

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.

Speaker #4: And then in quarter four, with the three lines running, then we're ing to be at a higher levels of shipments. And we are comfortable at this point that we're going to be achieving our $10 million tons guidance.

Speaker #4: And then, of course, with the new product, you should also expect that profitability will increase and we will be tailored more as we talked about quarter three.

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

Speaker #3: Thank you.

Speaker #2: Great. Thanks, Efrem. So, we will move now to take the next question. From Boris. At a CapEx Europe. Please go ahead, Boris.

Various Analysts: Hi. Hello. Thank you for taking my question. The first question would be on tariffs. I 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.

Speaker #6: Hi. Hello. Thank you for taking my question. The first question would be on tariffs. I've read headline where you were quoting estimating the impact of tariffs to $150 million.

Speaker #6: That means there is something like $50 million of mitigating measures. Can you share the way ou mitigate those impacts? And just confirm that the impact in Q1 was around $130 million already.

Speaker #6: And regarding CapEx, just back to that question on the second EAF. How confident are ou to maintain your CapEx envelope of $4.5 to $5 billion over time?

Speaker #6: Thank you.

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?

Speaker #4: 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.

Speaker #4: But, course, we had the increase in tariffs impacting us from the beginning of June. So, 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 impacts.

Speaker #4: 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.

Speaker #4: o, that's the $150 million dollars. So, the net net from one quarter to the other, it's in the range of $10 million dollars. Right?

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. And we, 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.

Speaker #4: So, 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 re that we can continue supply the OEMs.

Speaker #4: And we as you know, what we sell into the US is high value-added materials. Important not only for us, but also for our customers.

Speaker #4: And that's our ocus, to make sure that we can maintain our market share with the OEMs. And make sure that we can also generate big profit with this volumes.

Speaker #4: 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 an, we are finishing this year a number of projects.

Speaker #4: 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 Liberia.

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 of the 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.

Speaker #4: Which has consumed a significant amount of the envelope. So, we'll be completing some of the smaller projects in Brazil as well. So, 're going to be making a room for new projects that I'm sure we're going to be in position to discuss together with our results in quarter four.

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

Speaker #2: Great. Thanks, Boris. So, I think we'll move to the next question. Which will be taking from Tom at Barclays.

Various Analysts: Yes. Hi. Thanks for taking the questions.

Speaker #6: Yes. Hi. Thanks for taking my questions.

Daniel Fairclough: Yeah, hi.

Speaker #2: Yeah, hi.

Various Analysts: Sorry, I'm going to have to come back to it. Just on tariff formal time. Could you just 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 are just being 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.

Speaker #6: Sorry, I'm going to have to come back to it. on tariffs one more time. Could ou just to sort of ck 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?

Speaker #6: And you've had you know the consolidation of Calvert. So, as I understand, you used to sending about $2 million tons slab every year from mostly Brazil into the Calvert JV.

Speaker #6: 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 these tariff costs have just been passed on to customers and that's why you're not absorbing anymore?

Speaker #6: And is that true out of Calvert as well? 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.

Speaker #4: Yeah. Look, Tom, as I said, I mean, I would just reiterate. I think we have been working on mitigating this impacts, right? And as you can imagine, a lot initiatives a lot of discussions with our customers.

Speaker #4: So, we are ing to be sharing tariffs with customers as well. So, that's why net net the increase should not be so significant. That is not what you do.

Various Analysts: And that's not what you 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.

Speaker #2: And now, 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?

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 facilities. 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, and you see when you see the performance of Calvert, then you can see that it's actually the profitability of that facility is actually increasing. 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.

Speaker #4: 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 U.S. Steel facility.

Speaker #4: So, that is has nothing to do. It's a 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.

Speaker #4: But then, as you can see, I mean, as we talked about, and you see when you see the performance of Calvert, then you can see that it's it's actually the profitability of that facility is actually it's actually increasing.

Speaker #4: And I should remind you that even before the costs that of the slabs that were being supplied to Calvert they were under our responsibility, under AscelorMittal's responsibility.

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.

Speaker #4: 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 that is clear.

Various Analysts: 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 coking 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.

Speaker #2: Yeah. Okay. Fair enough. And then second one, maybe just moving on to Europe. You know, we've seen some attempted price hikes through Q3. We're seeing little bit of raw material cost inflation with iron, ore, and coke and coal.

Speaker #2: 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?

Speaker #2: Or are you seeing still quite a slow market? Just curious, yeah, how you see prices sort of developing in the second half. Thank ou.

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 course, 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?

Speaker #4: 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 to be low.

Speaker #4: What is interesting, of course, is the fact that we're going to have CBAM in whatever form kicking in from Jen. And the promise of revised Safeguards so that creates different dynamics as well, right?

Speaker #4: Because if you are importing material, and given the long lead times, so ou're going to start to worry some of these factors, right? So that is that is positive for the domestic meals.

Speaker #4: 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?

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.

Speaker #4: 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 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?

Speaker #4: I think that is also something. But, 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.

Various Analysts: Okay. Clear. Thank you. I'll turn it back.

Speaker #2: Okay. Clear. Thank you a ot, . Thanks, Tom. So, 'll move now to the next question, which will take from Dominic at JP Morgan.

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

Speaker #2: Hi, Dominic. Please go head.

Various Analysts: 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.

Speaker #7: Thanks. Take my question. My question's also related to Europe. So, I just ondered if I could maybe push you a ittle bit more on Safeguards.

Speaker #7: 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.

Speaker #7: So, could you just maybe give us some timing? Is that an expression confidence in the market in the second half? And again, just really interested in a bit more detail on how you think Safeguards evolving in the ths 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.

Speaker #4: Yeah. Well, regarding Safeguards, we and by we, I mean the industry, the Eurofair, 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.

Speaker #4: Right? And that is the request. And as we know, last year, in 2024, the market share of imports was as high as 27%, right?

Speaker #4: So, that is a significant if implemented, it will be a significant boost to utilization rates of the steel industry in Europe. And it allow investments to happen.

Speaker #4: So, that's going to be extremely positive for the industry in 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.

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.

Speaker #4: Right? Coming to Dunkirk, Dunkirk was just a normal realigned which we completed during the second quarter. We had built a slab inventories before. So, you should not read into it.

Speaker #4: So, we just completed the realign. We brought the finance up and we are running again. So, nothing really just normal normal business there.

Various Analysts: Okay. And then just 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?

Speaker #7: Okay. And then just second question. Really helpful on the CapEx reiteration at the 4.5 to $5 billion dollars. 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?

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.

Speaker #4: Yeah. Well, our expectation is that this is going to happen gradually. And Dominic, this is a transition that will take the case 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.

Speaker #4: And that's what we would see going forward that we will progressively provided that we have the conditions to keep that investing in the new EAFs.

Speaker #4: 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.

Speaker #4: And we have a similar amount this year. So, we are executing or building a new EAF in Spain, Gijon, we are investing in Sestao.

Genuino Christino: So we are executing or building a new EAF in Spain, Gijon. We are investing in Sestao, 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.

Speaker #4: 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 ink as a company, we are well placed.

Speaker #4: We have the DRI facilities. We are one of the largest producers in the world. So, I ink we believe that we are progressing quite well.

Various Analysts: Thank you.

Speaker #7: Thank ou.

Daniel Fairclough: 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.

Speaker #2: 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.

Various Analysts: 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 now taxed at 50%. So are you able to shift the sourcing, or are you facing some extra costs there?

Speaker #8: Yeah. Good afternoon. Thanks 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?

Speaker #8: 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?

Genuino Christino: Thanks so much. Well, we have the flexibility amounts 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.

Speaker #4: 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 in the list of exemptions.

Speaker #4: 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.

Speaker #4: But I think that was because pig iron is now for sure not and I think I don't know is also excluded. Daniel, unless you have some more?

Speaker #2: No, yeah. No, you're that's the case here we know. So, but I ink also, you know, these things can change. So, it's important that your first point to have that flexibility that should something change.

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.

Speaker #2: That we can we can source from a different mine within our own system. And that would be Canada.

Various Analysts: Okay. So that's clear. Second question is on M&A. So Cleveland Cliffs has put up a foresale 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?

Speaker #8: Okay. So, that's clear. Second question is on M&A so Cleveland Cliffs has put up a for sale sign in its latest results call. So, I know you don't like to comment on specific targets.

Speaker #8: But how you thinking of further expansion in the US, notably to address a mismatch you currently have in terms 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.

Speaker #4: Max, 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.

Speaker #4: Right? And as you can see, our investments, Calvert, the new electrical steels plant that we are investing, so we do have the ambition to keep growing the States and we have plans in place and being developed.

Speaker #4: But more specifically on M&A, I'm not going to be able to comment.

Various Analysts: 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.

Speaker #8: Okay. Fair enough. And just the last one. It's on India. So, you're flagging again your ambition there to grow even more, notably through a new greenfield facility.

Speaker #8: 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.

Speaker #8: 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 ew months are not enough.

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 and increase your market share, you have to grow with the market. And as you can see in our results this quarter as well, the results already doubled. 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.

Speaker #4: Yeah. I think the industry would agree with you. And I ink the meals are mobilized. But look, I mean, we have to look beyond this, right?

Speaker #4: And the structurally, the Indian market is very attractive. Right? So, it's highly concentrated. It's a market that is growing 7, 8 percent every year.

Speaker #4: 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.

Speaker #4: And as you can see in our results this quarter as well, the results already doubled. So, back to 200 plus million. You can argue that yet not enough.

Speaker #4: But it's and we have not yet seen the benefits of some of these investments that we talked about. The downstream so our automotive complex is going to be commissioned part of it now in towards the second half of the year.

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.

Speaker #4: So, we'll continue to improve the mix of products that we're going to be able offer in the Indian market. So, remain very excited about the opportunities provided by the Indian market.

Speaker #4: And right now, the focus is on completing the expansion in Azura and, of course, prepare the ground for future expansions. As you know, this is a long process in India.

Speaker #4: And it's important that we we continue to work so that we we can when the when the moment is right to to move forward.

Various Analysts: Okay. Very clear. Thanks. Thank you.

Speaker #8: Okay. Very clear. Thanks. Thank you.

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

Speaker #2: Thanks, Max. So, we'll move now to take the next estion. From Andy at UBS. Hi, Andy. Please go head.

Various Analysts: Thank you. Can you hear me okay?

Speaker #9: Thank you. Can you hear me okay?

Daniel Fairclough: Oh, yes.

Speaker #8: Oh.

Speaker #2: Yes.

Various Analysts: 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 cliffs? I mean, without being specific, I mean, are you thinking you can do something large, 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?

Speaker #9: Cool. Excellent. And just as a follow-up on M&A, I know specific targets. But obviously, the net debt after Calvert's now back above $8 billion used to sort of talk about a $7 billion target will be obviously the business is very different now.

Speaker #9: I mean, how are you inking about leverage more broadly around the potential for further M&A? I mean, does this rule out large-scale M&A, things like Valorec or you know I mean, the cliffs.

Speaker #9: I mean, are being specific. I mean, you thinking you can do something large? Or are we talking like potentially small incremental stuff from here?

Speaker #9: 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?

Genuino Christino: Yeah. Well, 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 state. 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? The triple B flat. So showing the progress or the progress that we have been discussing, acknowledged by the rating agencies as well.

Speaker #4: Yeah. Well, I can say that we have a good pipeline of projects that we can execute organically, right? So, that has been the focus, continues be the focus.

Speaker #4: And specifically on and I should also say that our message on Valorec remains the same, right? So, we are not we are happy with the performance of the company.

Speaker #4: We are happy with our state. We have no intention there to increase it. When it comes to the debt, $8 billion so first of all, I ink it's we feel very comfortable as I'm sure you have seen we were just upgraded by S&P.

Speaker #4: Right? The triple B flat. So, showing the progress or the progress that we have been discussing. Acknowledged by the rating agencies as well. And we should not forget that with this investments, M&A, we are adding significant amount of extra EBITDA to the business.

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'll 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. So we're very comfortable with the capital structure of the company.

Speaker #4: Right? You've seen 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.

Various Analysts: 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 Rotarantin. When do you actually expect to make sort of cash payments on that settlement, and how is that phased?

Speaker #8: Okay. And just one other follow-up on the settlement that you put in. So, one of the one-offs for the EBIT in the quarter, this Butter Anthem.

Speaker #8: When do you actually expect to make sort of cash payments on that settlement? And how's that phased?

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

Speaker #4: It will happen over three years. Andy.

Various Analysts: Okay. And it's almost.

Speaker #8: Okay. And it's ost.

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.

Speaker #4: So, that is one down payment. And then so you divide it by four. It's you have one on signing and three order payments in three years.

Speaker #4: So, it's going to happen over three years.

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

Speaker #8: Okay. And that's in line with the EBIT loss that you booked on that settlement, right? In cash?

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.

Speaker #4: 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.

Speaker #4: 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 dollars so the settlement is 500 million.

Various Analysts: Okay. That's clear. Thank you.

Speaker #8: Okay. That's clear. Thank you.

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

Speaker #2: Great. Thanks, Andy. So, we have time for I think two or three more questions. So, the first, we're ing to take from Bastian at Deutsche Bank.

Speaker #2: Hi, Bastian.

Various Analysts: 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, is this 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 now. So there must be something which is compensating for the delay there. That's my first one.

Speaker #10: Yeah. Hey, good afternoon. Thanks for taking my estions. My first one is actually on your project pipeline. I saw in the footnotes that there are some projects which are which are delayed.

Speaker #10: And I was wondering, is this 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?

Speaker #10: 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.

Speaker #10: So, there must be something which is compensating for the delay there. That's my first one.

Genuino Christino: Yeah. So we basically, you have a MADIC in 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 Mexico, in one of the mines, La Sucia, so the delay is primarily because of licenses that delayed some of the moving of the equipments. 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 EBITDA bridge coming from projects and M&A. Daniel, anything further?

Speaker #4: Yeah. So, we basically, you have a Mardik in 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 you face you know there is that you can you may find out something that you could not have anticipated.

Speaker #4: That's one of the reasons. And then in Mexico, in one the mines was Tuscha. So, the delay is primarily because of licenses that delayed some of the moving of the equipments.

Speaker #4: 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 EBITDA bridge coming from projects and M&A.

Speaker #4: Daniel, anything to there?

Daniel Fairclough: No, I would only reinforce those points you made now. So yeah, no further additional comments.

Speaker #2: No, I would only reinforce those points, Genuino. So, yeah, no further additional comments.

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

Speaker #10: And no other projects which you're currently looking to move just given the current economic environment, I ess?

Genuino Christino: 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, this year, we're 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.

Speaker #4: 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.

Speaker #4: And as we talked about, this year, we're going to be completing a number of projects, right? And then as you can see, then we're going to another significant pickup in EBITDA also in 2026.

Speaker #4: 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.

Various Analysts: Okay. Got you. Then my second.One

Speaker #10: 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.

Daniel Fairclough: is, on your Brazilian slab strategy. I guess a few years ago, you obviously bought CSP, which is basically a slab business. you still have Sierra Vitória, which is basically long slabs, used to supply both, I guess, into Calvert or into into the 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 in the EF. You're talking about a second one. What's, what's going to be your strategy here for the Brazilian slab capacity where you're still long?

Speaker #10: And ou still have Sierra Victoria. Which is basically long slabs used to supply both, I guess, into Calvert or into into the into the US and North American market.

Speaker #10: 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 EAF.

Speaker #10: You're talking about a second one. What's going to your strategy here for the Brazilian slab capacity where you're long?

Genuino Christino: Yeah. Well, I think that's a good, good question, and, and we are very well positioned in the Brazilian market. So first of all, I think it's important to acknowledge that Brazil is, it's growing, right? So the flat, demand is, 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, so, and 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? so that's one of the possibilities that we have. And, and we should not forget also that, the same in Tubarão, they, they produce some of the highest quality slabs in the world, right? You're not going to find that quality of slab everywhere.

Speaker #4: Yeah. Well, I think that's a good question. Bastian. And we are very well positioned in the Brazilian market. So, first of all, I ink it's important to acknowledge that Brazil is growing, right?

Genuino Christino: So, so we, we, we, we feel that we're going to be, always in a position to market, the volumes that we have from there.

Daniel Fairclough: Okay. Very clear. Thanks so much.

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

Various Analysts: Yes. Hi. Thank you for, squeezing me in. Just, two, the first one on China. What is your take on the recent, official commentary on potential capacity restructuring? I mean, do you believe a significant capacity cut 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.

Genuino Christino: Yeah. Do you want to take that one, Daniel?

Daniel Fairclough: 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, the reciprocal tariffs, environment, but they are finding, opportunities, obviously new, new export opportunities. and then domestically, demand is being supported by the, by the, infrastructure spend and the, and the efforts to, stimulate domestic consumption. So, that, that, that's the reason why we've not, significantly changed our, our, our projections for, Chinese demand, relative to what we'd, published back in February. I think on the, on the prospect of, of capacity reform, obviously, this is something that, we have been, championing, something that, it's, you know, it's very obvious that this needs to occur. China has, a capacity imbalance. it's leading to very depressed, profitability within the, the domestic industry.

Daniel Fairclough: it's, leading to, aggressive exports at very low pricing. And, and, and, and as we talked about in previous questions, it is, a significant source of, unfair, competition for, for the rest of the global industry. so reform needs to happen. and, and, and your question obviously is, will it happen, and over what, what sort of time frame? And, all the statements that we've read over the last couple of months have, have, would give you encouragement, that, things, will improve. I think if you look at the recent production statistics, it would suggest that, that things can improve. however, exports do remain very elevated. and so, you know, I, I think the only thing that we, we can really be, really, looking out for is, is this ring fencing that, that Genuino talked about previously. that's what's required.

Daniel Fairclough: we can't assume that China will reform its, its industry in due course. and therefore, the, the, the other regions, need to appropriately ring, ring fence their industries, to make sure that they're not damaged by that, excess capacity and unfair trade.

Various Analysts: All right. That's, 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, do you think there's a real probability that the European Commission will take such, such action? And how confident are you? basically, what, what is different this time, 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, from all the member states. So any color there, that, that, that'd be great.

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

Various Analysts: All right. Thank you.

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

Various Analysts: Hey. Good afternoon. Thanks, thanks for squeezing me in there. my first question is just on, on India. encouraging to see those tariffs in April positively contribute to your, to your margins. and I had to say the quarter, quarter uplift was quite impressive. So my question is just what was the, the exit margin at the end of the quarter on a per-ton 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 commissioning of the downstream value-added products?

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

Daniel Fairclough: Would you like me to?

Genuino Christino: That was just on the yeah. Go, yeah.

Various Analysts: Would you like me to repeat? Yeah. Sure. Okay. I was just my, 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, at the end of June? And then how should we think about the go forward just given, you know, the effect of the tariff, but also the commissioning of the downstream? Yeah.

Genuino Christino: Yes. Yes. And then perhaps I talked about, the moving parts there, right, in a little bit more detail. So, so moving forward, I mean, for, 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 is, which is, which is, which I think addresses some of your, points. stable. And, and, the downstream really, I mean, of course, there will be a, 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, is, is a franchise, of, of, of our companies.

Genuino Christino: And, and it's a market that we're going to be able then to, address, strongly, once we complete this, investments. 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, for the future of the profitability, of, of, AMNSI. Daniel, if you have anything to add because you were there recently as well.

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

Daniel Fairclough: and a lot of that additional, profitability will, will come through this, higher-added value product mix.

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

Genuino Christino: Yeah. I'll, I mean, we, we talked about, I think it was in the previous quarter, that 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, to have the first, slab, cast out. So our, our expectation is to get to the end of the year, with a, with a run rate in the range of, 60 percent. And, 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, we should be at full, capacity.

Various Analysts: That's great. Thank you.

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

Genuino Christino: Thanks, Daniel.

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

Genuino Christino: Okay. thank you, everyone. 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 percent 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.

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

This is the cornestone of our franchise in the new year. I have together with the newslab supply agreement to ensure we meet melted and pool requirements.

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

Genuino Christino: And finally, to repeat what I, 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 this 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.

If the European commission, delivers a new trade, defense mechanism, and an effective siban, then our business can flourish. And acell is, well, positioned to capitalize on the opportunities created by defense and infrastructure Investments. And finally, to repeat, what I, I have said in recent calls, returning care to shareholders, at the bottom of the cycle, while you continue to invest in growth is clear evidence of the progress of our Meto has made and demonstrates that our company can deliver value through all aspects of this Suite.

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. I wish you all a happy summer. Stay safe and keep those around you safe as well. Thank you very much.