Q3 2025 ArcelorMittal SA Earnings Call

Daniel Fairclough: Hi, good afternoon, everyone. This is Daniel Fairclough from the ArcelorMittal Investor Relations team. Thank you for joining this call to discuss ArcelorMittal's performance and progress during Q3 2025. Leading today's call will be our group CFO, Mr. Genuino Christino. Before we begin, I would like to mention a few housekeeping items. As usual, we will not be going through the results presentation, which was published this morning on our website. However, I do want to draw your attention to the disclaimers on slide number 20 of that presentation. As usual, Genuino Christino will make some opening remarks before we move directly to the Q&A session. If you would like to ask a question, then do please press star 11 on your keypad to join the queue. Over to you, Genuino Christino.

Speaker #2: Hi . Good afternoon everyone . This is Daniel Fairclough from the ArcelorMittal Investor Relations team . Thank you for joining this call to discuss Arcelormittal's performance and progress during the third quarter of 2025 , leading today's call will be our group CFO , Mr. Genuino Christino .

Speaker #2: Before we begin , I would like to mention a few housekeeping items . As usual , we will not be going through the results presentation , which was published this morning on our website .

Speaker #2: However , I do want to draw your attention to the disclaimers on slide number 20 of that presentation . As usual . We will make some opening remarks before we move directly to the Q&A session .

Speaker #2: So if you would like to ask a question , then do please press star one . One on your keypad to join the queue .

Speaker #2: Over to you Jemina .

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. The company is completing the first year of its three-year transformation program, supporting ArcelorMittal's journey to be a zero fatality and serious injury company. The first year has focused on building the foundations for improvement across the business, and I'm encouraged by the progress we are making. We are already observing an improvement in the frequency of serious injuries and fatalities compared to last year. There is more to be done, and there is clear determination across the entire company to implement the bespoke safety roadmaps that have been developed to drive lasting change. Now, I want to focus this quarter on three key points. First and foremost, our results continue to demonstrate structural improvements.

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 .

Speaker #3: A core value for our company . The company is completing the first year of its three year transformation program , supporting ArcelorMittal SA journey to be a zero fatality and serious injury company .

Speaker #3: The first year has focused on building the foundations for improvement across the business , and I'm encouraged by the progress we are making .

Speaker #3: We are already observing an improvement in the frequency of serious injuries and fatalities compared to last year . But there is more to be done and there is clear determination across the entire company to implement the both safety roadmaps that have been developed to drive lasting change .

Speaker #3: Now I want to focus this quarter on three key points . First and foremost , our results continue to demonstrate a structural improvements .

Genuino Christino: Q3 EBITDA per ton was $111. This is 25% above our historical average margin. To be achieving such improved margins at what we believe to be the bottom of the cycle demonstrates the positive impact that our asset optimization and growth strategy is having. Our strategic projects, together with the impacts of recently completed M&A, will support structurally higher margins and returns on capital employed through the cycle. We remain on track to capture $0.7 billion structural EBITDA improvement this year, and the expected medium-term impact of $2.1 billion remains unchanged. My second point is on free cash flow. Our underlying business continues to generate healthy cash flows. Excluding working capital, 9 months free cash flow was approximately +$0.5 billion. Remember, this is after having invested close to $1 billion in our strategic growth projects.

Speaker #3: Third quarter EBITDA per tonne was $111 . This is 25% above our historical average margin to be achieving such improved margins at what we believe to be the bottom of the cycle demonstrates the positive impact that our asset optimization and growth strategy is having .

Speaker #3: Our strategic projects , together with the impacts of recently completed M&A , will support structurally higher margins and returns on capital employed through the cycle .

Speaker #3: We remain on track to capture 0.7 billion structural EBITDA improvement this year , and the expected medium term impact of 2.1 billion remains unchanged .

Speaker #3: My second point is on free cash flow . Our underlying business continues to generate healthy cash flows , excluding working capital . Nine months free cash flow was approximately $0.5 billion positive .

Speaker #3: Remember , this is after having invested close to 1 billion in our strategic growth projects as we head into end , I expected working capital investment will unwind as it normally does .

Genuino Christino: As we head into year-end, I expect that working capital investment will unwind as it normally does. This supports a positive outlook for free cash flow and lower net debt. My final point is on the positive outlook for our business. Relative to where we were 3 months ago, the outlook for our business has clearly improved. We welcome the new trade tool proposed by the European Commission. They will support a more sustainable European steel sector, returning the industry to healthier capacity utilization levels. The proposal must now be transposed into legislation as fast as possible. Together with an effective CBAM, this can provide a solid foundation for European business to earn its cost of capital, as we have been achieving in other regions.

Speaker #3: This supports a positive outlook for free cash flow and lower net debt. And then my final point is on the positive outlook for our business relative to where we were three months ago.

Speaker #3: The outlook for our business has clearly improved . We welcome the new trade tool proposed by the European Commission . They will support a more sustainable European steel sector , returning the industry to healthier capacity utilisation levels .

Speaker #3: The proposal must now be transposed into legislation as fast as possible and together with an effective cbam . This can provide a solid foundation for European business to earn its cost of capital .

Speaker #3: As we have achieved in other regions with our advanced product offering and strong market franchises, we are well equipped to seize new structural opportunities and translate them into profitable growth.

Genuino Christino: With our advanced product offering and strong market franchises, we are well equipped to seize new structural opportunities and translate them into product growth. As a company, ArcelorMittal is actively enabling the energy transition. We are supplying the steel required for new energy and mobility systems and the steel required for infrastructure development. We are investing in high quality, high margin electrical steels and building a competitive renewable energy portfolio. Putting this all together, ArcelorMittal is in a strong position, both operationally and financially. We have a unique, diversified asset base across geographies and end markets. We are delivering structurally higher margins supported by an optimized asset portfolio and execution of our strategic growth projects. We have momentum, and our growth will continue. We will continue to implement our clearly defined capital return policies.

Speaker #3: As a company . ArcelorMittal SA is actively enabling the energy transition we are supplying the skill required for new energy and mobility systems , and is still required for infrastructure development .

Speaker #3: We are investing in high quality , high margin electrical steels and building a competitive renewable energy portfolio . Putting this all together , ArcelorMittal is in a strong position both operationally and financially .

Speaker #3: We have a unique , diversified asset base across geographies and end markets . We are delivering structurally high margins , supported by an optimised asset portfolio and execution of our strategic growth projects .

Speaker #3: We have momentum and our growth will continue . We will continue to implement our clearly defined capital return policies . It is working well , allowing us over the past five years to grow our dividend at a compound rate of 16% , as well as repurchase 38% of our equity each ArcelorMittal SA share .

Genuino Christino: It is working well, allowing us over the past five years to grow our dividend at a compound rate of 16% as well as repurchase 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, let's move to Q&As.

Speaker #3: 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 .

Speaker #3: With that , Daniel , let's move to Q&A .

Daniel Fairclough: Great. Thank you, Genuino. We have a good queue of questions in front of us, but just to remind anybody who wants to join that queue, please do press star one one on your keypad. We will take the first question, please, from Alain at Morgan Stanley. Hi, Alain. Please go ahead and ask your question.

Speaker #2: Great . Thank you Jim . We know we have a good queue of questions in front of us , but just to remind anybody who wants to join that queue , please do press star one .

Speaker #2: One on your keypad . But we will take the first question please , from Alain at Morgan Stanley . Hi . Please go ahead .

Alain Gabriel: Hi, Daniel. Hi, everyone. Hi, Genuino Christino. I have two questions. I'll ask them one at a time. The first one is looking forward to 2026, and before we take into account any impact from CBAM or the new safeguards, what are the unusual or exceptional costs that we need to consider while building our EBITDA bridge into next year? I'm thinking here more the incurred US tariff costs here today, the stoppages in Mexico, et cetera. That's my first question.

Speaker #4: Hi , everyone . Hi , Genuino . I have two questions . I'll ask them one at a time . So the first one is looking forward to 2026 .

Speaker #4: And before we take into account any impact from Cbam or the new safeguards , what are the unusual or exceptional costs that we need to consider while building our EBITDA bridge into next year ?

Speaker #4: And I'm thinking here more the incurred US tariff costs year to date . The stoppages in Mexico , etc. . That's my first question .

Genuino Christino: Okay. Sure, Alain. Well, thinking about 2026 in terms of exceptionals. Right now, I cannot really point to you when we, when it comes to tariffs, that we are seeing change. We will see, of course, in 2026, as we know, we have the USMCA, and I'm sure the negotiations between Canada, US, Mexico will continue. Of course, we have to wait and see how what comes out of the negotiations. Clearly we have the losses in Mexico, and we do expect that will not reoccur in 2026. That's really in terms of exceptionals, that's what I see.

Speaker #3: Okay , sure . Alan . Well , thinking about 2027 times of exceptionals . So right now I cannot really point to you when when it comes to tariffs that we we are seeing change , right ?

Speaker #3: We will see of course , in 2026 , 26 , as we know we have the Usmca . And I'm sure the negotiations between Canada , US and will continue .

Speaker #3: But of course , we have to wait and see how what comes out of the of the negotiations right then . Clearly we have the losses in Mexico and we do expect that that will not reoccur in 2026 .

Speaker #3: And that's really in terms of exceptionals . That's what I see . Of course , when you think about the bridge for 2026 , there are many positives that we could potentially talk about , right ?

Genuino Christino: Of course, when you think about the bridge for 2026, there are many positives that we could potentially talk about, right? One is the contribution from our projects. We have around $800 million coming in 2026. We just saw also the first forecast of the World Steel Association in terms of demand for next year. I think we will start to see some of the benefits of the lower interest rates impacting the economies. We are seeing PMIs in Europe recovering. As we know, demand has been just moving sideways in most of our core regions. I think there is hope that we might see a better picture next year also in terms of demand.

Speaker #3: One is the contribution from our projects . So we have another , another , another 800 million coming in 20 2026 . We just saw also the the the first forecast of the World Steel Association in terms of demand for next year .

Speaker #3: I think we will start to see some of the benefits of the lower interest rates impacting the economies. We are seeing PMIs in Europe recovering. As we know, the demand has been just moving sideways in most of our core regions, and I think there is hope that we might see a better picture next year.

Speaker #3: Also , in terms of demand , I don't know that maybe I'm missing something . If you want to compliment .

Genuino Christino: I don't know, Daniel, if I'm missing something, if you want to complement.

Daniel Fairclough: Thanks, Genuino. All I was going to do was perhaps just add the numbers for Mexico. If you recall back to the Q2 conference call, Q2 results, we talked about a $40 million impact from costs and operational costs in Q2. In our release today, you will see a number for Mexico of $90 million. In Q4, things should improve, but there will still be a cost in Q4 of maybe $60 to 65 million. As Genuino said, that shouldn't recur in 2026.

Speaker #2: Thanks . So all I was going to do was perhaps just add the add in the numbers for Mexico . So if you recall back to the Q2 conference call at Q2 results , we talked about a 40 million impact from costs and operational costs in Q2 .

Speaker #2: In our release today , you will see a number for Mexico of of 90 million . And then in Q4 , things should improve .

Speaker #2: But but there will still be a cost in Q4 of maybe 60 , 65 million . So as Jim said , that shouldn't recur in 2026 .

Daniel Fairclough: When you think about the bridge from 2025 to 2026, there's close to about $200 million there from non-recurrence of Mexico.

Speaker #2: So then, when you think about the bridge from 2025 to 2026, there's close to about $200 million there from the non-recurrence of Mexico.

Alain Gabriel: Thanks. Thanks, Daniel and Genuino Christino. That's very clear. The second question is, in Europe, you currently ship around 30 million tons of finished steel. If the safeguards work next year as intended or designed and imports dramatically reduce, how much can you flex your production in the near and medium terms after taking into account the restart costs, the purchase of CO2 allowances, et cetera? In other words, what is your achievable blue sky shipments in Europe if we go into that scenario where imports decline dramatically? Thank you.

Speaker #4: Thanks . Thanks , Daniel . That's very clear . And the second question is in Europe , you currently ship around 30 million tons of finished steel .

Speaker #4: If the safeguards work next year , as intended or designed , and imports dramatically reduce , how much can you flex your production in the near and medium terms after taking into account the restart costs , the purchase of CO2 allowances , etc.

Speaker #4: ? So in other words , what is your achievable blue sky shipments in Europe ? If we go into that scenario where imports decline dramatically ?

Speaker #4: Thank you .

Genuino Christino: The way we see it, I mean, we do expect to be able to supply the market. I mean, as we all know, the expectation, looking at the numbers, I mean, there is an expectation that imports will come down by about 40% in flat as we saw, right? It's not a secret that our market share is about 30%. We don't see any problems to make sure that we can capture that part of our market share. You know, I mean, you have that also in our textbooks. Our capacity in Europe is way in excess of 30 million that we are currently producing.

Speaker #3: The way we see it , I mean , we we do expect to be able to supply the market . I mean , as we all know , the station looking at the numbers , I mean , there is an expectation that imports will come down by about 40% in flat as as we as we saw .

Speaker #3: Right . And it's not a secret that our markets , it's about 30% . So we don't see any problems to make sure that we can capture that part of our , of our , of our market share .

Speaker #3: So and you know , I mean , you have that also in our effect books or our capacity in Europe is way in excess of , of 31 of 30 million that we are currently producing .

Genuino Christino: We feel very comfortable here to be in a position to supply the market when these new measures are in place.

Speaker #3: So we feel very comfortable here to be in a position to supply the market when this new measures are in place .

Alain Gabriel: Thank you.

Speaker #4: Thank you .

Daniel Fairclough: Great. Thanks, Alain. We will move now to the next question, which we're gonna take from Tom at Barclays. Hi, Tom. Go ahead.

Speaker #2: Great . Thanks , Alan . So we will move now to the next question , which we're going to take from Tom at Barclays .

Speaker #2: Hi , Tom . Go ahead .

Tom Zhang: Hi, Genuino Christino, Daniel Fairclough. Thanks. Two for me as well. The first one, just the usual one on the kind of moving parts, maybe please into Q4, by division and any color around realized pricing, volumes, that kind of stuff. Thank you.

Speaker #5: Hi , Daniel . Thanks . Two for me as well . The first one just just the usual one on on the kind of moving parts maybe please into Q4 by division and any color around realized pricing volumes .

Speaker #5: That kind of stuff . Thank you .

Genuino Christino: You wanna take it, Daniel?

Speaker #3: You want to take it, Daniel?

Daniel Fairclough: Yeah, sure, Genuino Christino. Thanks. You know, when we look at the bridge from Q3 to Q4, I think it's pretty simple. I think there are really three key building blocks for you to be thinking about. The first, of course, is the normal seasonal improvement in European volumes. The second factor or the second building block would be higher iron ore shipments. As Genuino Christino was talking about, we have good momentum in our strategic projects. We're well on track to achieve the targeted 10 million tons of shipments in Liberia. That will be a nice increment in Q4. The third building block would be North America.

Speaker #2: Yeah , sure . Thanks . So , you know , when when we look at the bridge from the third quarter to the fourth quarter , I think it's pretty simple .

Speaker #2: I think there are really three key building blocks for you to be thinking about . The first , of course , is the normal seasonal improvement in European volumes .

Speaker #2: The second factor or the second building block would be higher . Iron ore shipments . So as Jim , we know was talking about we have good momentum in our strategic projects .

Speaker #2: So we're well on track to achieve the targeted 10 million tons of shipments in Liberia . So that will be a nice increment in the fourth quarter .

Speaker #2: And then the third building block would be North America . So we would expect normal seasonality and volumes there . So we do have two holidays in the fourth quarter .

Daniel Fairclough: We would expect normal seasonality and volumes there. We do have 2 holidays in Q4. Normally, volumes are seasonally weaker in the NAFTA segment. If you look at pricing, if you know, just purely on a sort of a 2-month lagged basis, pricing should be lower in Q4 than Q3. That's going to be slightly offset by the improvement in our Mexican operations, which we just talked about in Alain's question. Those would be the 3 key building blocks: seasonally higher volumes in Europe, higher shipments in mining from the Liberia expansion, and seasonally lower volumes and lower lagged prices in the North America segment.

Speaker #2: So normally volumes are seasonally weaker in the NAFTA segment . If you look at pricing and if you you know , just purely on a on a sort of a two month lagged basis , pricing should be lower in the fourth quarter than the third quarter .

Speaker #2: And but that's going to be slightly offset by the improvement in our Mexican operations , which which we just talked about in Alan's question .

Speaker #2: So those would be the three key building blocks , seasonally higher volumes in Europe , higher shipments in mining from the Liberia expansion and seasonally lower volumes and lower leg prices in the North America segment .

Tom Zhang: Great. Thank you. Maybe just following up on North America. I mean, is there anything else that you guys would call out for the print in Q3, which I guess was very strong despite the sort of additional Mexico outages? I know you've added Calverts, I guess on the consolidation numbers you've given before, that was maybe sort of $60 million a quarter of incremental EBITDA contribution. Maybe that offsets the hit from Mexico. You know, US spot pricing has been drifting. There's obviously extra tariff costs. Was there anything on either the cost side, the mix side, that you'd flag for North America? Thanks.

Speaker #5: Great . Thank you . And then maybe just following up on North America , I mean , is there anything else that you guys would call out for the print in Q3 , which I guess was very strong despite the the the sort of additional Mexico outages ?

Speaker #5: I know you've added Calvert's , but I guess on the consolidation numbers you've given before , that was maybe sort of 60 million , a quarter of incremental contribution .

Speaker #5: So maybe that that offsets the hit from Mexico . But you know , US spot pricing has been drifting . There's obviously extra tariff costs .

Speaker #5: Was there anything on either the cost side the mix side that you flag for North America . Thanks .

Genuino Christino: Yeah, Tom. First of all, we had a record level of shipments at Calvert. Calvert doing extremely well. I would suggest that the contribution was a bit higher than what you referred to. Our Canadian team is also doing a very good job in managing what they can. Costs, there's a very high focus on making sure that we take costs out. That is also supporting the results in Q3. You have the strong operations in Calvert, you have strong operations in Canada, in both of the facilities, in the long facility as well. We have also a good contribution from some of the other business.

Speaker #3: Yeah . So so first of all , we we had a record level of shipments at Calvert . Calvert doing extremely well . So I would suggest that the contribution was a bit higher than what you , what you referred to our Canadian team is also doing a very good job in , in managing what they can costs .

Speaker #3: There is a very high focus on making sure that we take costs out . So that is that is also supporting the results in quarter three .

Speaker #3: So you have a strong operations in Calvert . You have strong operations in Canada in both of the facilities in the long facility as well .

Speaker #3: So we have also a good contribution from some of the other businesses. Some of our dry plants in Texas are also performing well.

Genuino Christino: Our HBI, VRI plant in Texas also performing well. I think we have, except for, of course, the problems in Mexico, we have our franchise business in North America operating quite well.

Speaker #3: So I think we have , except for of course , the problems in Mexico , we have our franchise business in North America operating quite , quite well .

Tom Zhang: Okay. That's clear. Thank you. I'll turn it back.

Speaker #5: Okay . That's clear . Thank you . I'll turn it back .

Daniel Fairclough: Great. Thanks. We will move now to the next question, which we're gonna take from Cole Hathorn at Jefferies. Hi, Cole Hathorn, please go ahead.

Speaker #2: Great . Thanks . So we will move now to the next question , which we're going to take from Cole at Jefferies . Hi , Cole .

Speaker #2: Please go ahead .

Cole Hathorn: Good afternoon. Thanks for taking my question.

Speaker #6: Good afternoon . Thanks for taking my question . Thanks for taking my question . I'd just like to to ask on the CapEx profile , medium term and the envelope that you're thinking about , because you do have a number of strategic projects in the pipeline , how should we think about , you know , broad buckets for for CapEx , you know , 25 , 26 , 27 , any any broad based guidance you can provide and then following up on working capital , it's a strong improvement into the fourth quarter , coming back .

Daniel Fairclough: Hi, Cole Hathorn.

Cole Hathorn: Afternoon, thanks for taking my question. I'd just like to ask on the CapEx profile, medium term and the envelope that you're thinking about, because you do have a number of strategic projects in the pipeline. How should we think about, you know, broad brackets for CapEx, you know, 2025, 2026, 2027? Any broad-based guidance you can provide? Following up on working capital, it's a strong improvement into Q4, coming back. I imagine as you look into 2026, you hopefully will benefit from a stronger pricing environment. I'm just wondering how you're thinking about working capital into 2026. Are you hoping for kind of working capital outflows and, you know, stronger pricing and demand environment for 2026? Thank you.

Speaker #6: But I imagine if as you look into to 2026 , hopefully we'll benefit from a stronger pricing environment . And I'm just wondering how you're thinking about working capital into 2026 .

Speaker #6: Are you hoping for kind of working capital outflows and stronger pricing and demand environment for 2026 ? Thank you .

Genuino Christino: Well, so in terms of CapEx, what we have been seeing is. Of course, we're gonna be starting our budget discussions for 2026 and beyond. What we have been seeing is that the range that we have been using over the last couple of years between $4.5 and $5, including strategic, sustaining maintenance, that is a good reference for now. I would encourage you to keep that as your reference. I'm sure in Q4, we will be updating with more details. That is a good, it's a good reference. In terms of working capital, I hope you're right.

Speaker #3: So in terms of CapEx , what we have been seeing is and then of course , we are . Now we're going to be actually just we're going to be starting our budget discussions for for 2026 .

Speaker #3: And beyond . But what we have been seeing is that the range that you have , that we have been using over the last couple of years between 4.5 and five , including strategic sustaining maintenance , that is a good reference for now .

Speaker #3: So I would encourage you to keep that as as your reference . And then I'm showing Q4 we will be updating with more details , but that is a good it's a good , good reference in terms of working capital .

Speaker #3: I hope you're right . And I hope that in 2026 , we we have to deploy working capital because then it means that the business is strong , it's performing well , prices are moving in the right direction .

Genuino Christino: I mean, I hope that in 2026, we have to deploy working capital because then it means that the business is strong, it's performing well, prices are moving the right direction, volumes as well. What we try to encourage is you should think about working capital moving in line with our EBITDA, right. If you believe that if you have for 2026, high EBITDA numbers, then it would be fair to expect that there will be potential investments in working capital, which is something that we would see as positive.

Speaker #3: Volumes as well . What we try to encourage is you should think about working capital , moving in line with our EBITDA . Right ?

Speaker #3: So if you believe that if you have for 2026 high beta numbers , then it would be fair to expect that there will be potential investments in in working capital , which is something that we would see as , as positive .

Cole Hathorn: Maybe just as a follow-up, have you seen any changes in order books or, you know, how are you managing your order book for the start of 2026? You know, are you keeping some availability for higher prices or, you know, how are you seeing your order book develop into 2026? Thank you.

Speaker #3: .

Speaker #6: And then maybe just as a follow up , have you seen any changes in in order books or , you know , how are you managing your order book for the start of 2026 ?

Speaker #6: You know , are you keeping some availability for for higher prices or you know , how you seeing your order book develop into 2026 ?

Speaker #6: Thank you .

Genuino Christino: Yeah. Well, as we talked about, Cole Hathorn, the demand has been moving sideways, right? We and our order book remains relatively stable, right? We have segments doing better than others. The order books are relatively stable across the group. We are not doing anything special to try to anticipate a stronger 2026 other than making sure that we allow the business to keep the working capital that they need so that they can benefit from a stronger 2026 that we hope will materialize. That's really how we are planning. And, yeah, that's how we are seeing it so far.

Speaker #3: Yeah . Well , as we talked about the demand has been moving sideways . Right . So we and our book remains relatively stable .

Speaker #3: Right . So we we have segments doing better than , than others . The order books are relatively stable across across across the group .

Speaker #3: We are not doing anything special to try to anticipate a stronger 2026 , other than making sure that we allow the business to keep the working capital that they need so that they can .

Speaker #3: Benefit from a stronger 2026 that we hope will materialize . So that's that's really how we we are planning . And yeah , that's that's how we are seeing it so far .

Cole Hathorn: Thank you.

Speaker #6: Thank you .

Daniel Fairclough: Great. Thanks, Cole. We're gonna move to the next question, which we'll take from Reinhardt at Bank of America. Hi, Reinhardt.

Speaker #2: Great . Thanks , Carl . So we're going to move to the next question , which will take from Reinhart at Bank of America .

Speaker #2: Hi , Reinhart .

Reinhardt van der Walt: Hi there. Can you hear me?

Speaker #7: Hi there. Can you hear me?

Daniel Fairclough: Yes, we can. Go ahead.

Speaker #2: Yes, we can. Go ahead.

Reinhardt van der Walt: Thanks, Daniel. Hi, Genuino. Thanks for taking my question. I just wanna ask on capital allocation. If the safeguard replacements in Europe come through in their proposed form, how would you think about Europe from a capital allocation point of view? I'm don't wanna necessarily draw into discussion about sort of decarbonization investment and CBAM. Just from a purely economic perspective, you know, you talk about organic growth. Do you think Europe could be a home for capital in the future if we get this framework?

Speaker #7: Thanks , Dan . Hi . Thanks for taking my question . I just want to ask on capital allocation . So if these safeguard replacements in Europe come through in their proposed form , how would you think about Europe from a capital allocation point of view ?

Speaker #7: And I'm don't want to necessarily draw in to a discussion about sort of decarbonization investment and cbam , but just from a purely economic perspective , you know , you talk about organic growth .

Speaker #7: Do you think Europe could be a home for capital in the future if we get this framework?

Genuino Christino: I think you touched on it. I mean, this is an important framework, right? What we are talking about is that this framework should allow the industry to be sustainable to earn its cost of capital. When you achieve that, you are in a position to consider then investments. That's exactly where we are. So we are encouraged by these new measures. Of course, still waiting for the implementation. We still need to hear more about CBAM as we all know. The last piece of the equation is of course energy cost. I think once we have that framework very clear, then we're gonna be in a position to move forward. As we discussed before, this will happen gradually, right?

Speaker #3: I think you touch on it . I mean , this is an important framework , right ? And then what we are talking about is that this framework should allow the industry to be sustainable , to earn its cost of capital .

Speaker #3: And when you achieve that , then you are in a position to consider . Then investments . And that's exactly where we are .

Speaker #3: And so we are encouraged by this new measures . Of course , still waiting for the implementation . We still need to hear more about Cbam as we all know .

Speaker #3: And then the last piece of the equation is of course energy , energy cost . So I think once we have that , that , that framework very clear , then we're going to be in a position to move forward .

Speaker #3: And as we discussed before, this will happen gradually. Right? So you should not expect a launch in a number of simultaneous projects.

Genuino Christino: You should not expect ArcelorMittal launching a number of simultaneous projects. It will happen gradually. This is going to be a multi-year journey.

Speaker #3: You will happen gradually . This is going to be a multi-year journey .

Reinhardt van der Walt: Understood. That's very helpful. Thank you. Could you just remind me, I mean, you mentioned the business in Europe could potentially return to its cost of capital. Could you just remind us what exactly is the installed capital base of the European business?

Speaker #7: Understood . That's very helpful . Thank you . And could you just remind me I mean , you mentioned the business in Europe could potentially return to its cost of capital .

Speaker #7: Could you just remind us what exactly is the installed capital base of the European business ?

Genuino Christino: Well, I don't think this is something that we are very specifically disclosing, Daniel.

Speaker #3: Well , I don't think this is something that we are very specifically disclosing . Daniel .

Daniel Fairclough: No, you're right, Genuino M. Christino. No, it's not something that's broken out in our financials.

Speaker #2: No , you're right . Jimmy . No , it's not it's not something that's that's broken out in our financials .

Reinhardt van der Walt: Okay. No, that's fine. Maybe just one last quick one. Genuino, you mentioned that you've got the capacity to be able to deliver effectively your share of the, of the 10 million tons. Can I just see what kind of costs you might need to incur in order to bring that capacity to market? I appreciate it.

Speaker #7: Okay . No that's fine . Maybe just one last quick one . Janine , you mentioned that you've got the capacity to be able to deliver effectively your share of the of the 10 million tons .

Speaker #7: Can I just see what kind of costs you might need to incur in order to bring that capacity to market ? I appreciate it's there , but could you just maybe talk us through some of the costs that you'd need to incur to actually get that utilization up ?

Genuino Christino: Yeah

Reinhardt van der Walt: it's there, but could you just maybe talk through some of the costs that you'd need to incur to actually get that utilization up?

Genuino Christino: Well, it's a good point. I would break it down into two components or two parts, right? First is, you have the fixed cost part. In a number of facilities, we're gonna be able to leverage the fixed costs that we have, right? You're just gonna be running at a higher capacity, you benefit on the fixed cost side. In such cases, normally what you're gonna see also, it's an increase in your variable costs, including CO2 costs, right? If you want to improve your productivity, you might need to charge higher quality materials, pellets, more pellets. That will be you should expect that to have an impact as well.

Speaker #3: Yeah . Well , it's a good point . And I would I would break it down into two components , of two parts .

Speaker #3: Right . First is so you have the fixed cost part . So in in a number of facilities we're going to be able to leverage the fixed costs that that we have .

Speaker #3: Right . So you're just going to be running at a higher capacity . So you benefit on the fixed cost side . But then in such cases normally what you're going to see also is an increase in neo variable costs , including then CO2 costs .

Speaker #3: Right . If you want to improve your productivity , you might need to charge higher quality materials pallets , more pellets . So that will be you should expect that to to have an impact as well .

Genuino Christino: I would just encourage you to think about the two components.

Speaker #3: So I would just encourage you to think about did you the two components .

Reinhardt van der Walt: Perfect. Thank you very much, Genuino Christino.

Speaker #7: Perfect. Thank you very much, Janina.

Daniel Fairclough: Thanks, Reinhard. We'll move now to a question from Timna at Wells Fargo. Hi, Timna.

Speaker #2: Thanks , Ryan . So we'll move now to a question from Timna at Wells Fargo . Hi , Timna .

Timna: Yeah. Hey, everyone, wanted to ask two things. One, just kind of probing a little bit more your efforts to mitigate the tariff costs and specifically how you're approaching the annual contract negotiations with automakers at Dofasco. Separate question, just if I missed it, I apologize. I'm just wondering if you commented on why not, why there weren't any buybacks in the quarter. Thanks.

Speaker #8: Yeah . Hey , everyone wanted to ask two things . One , just kind of probing a little bit more . Your efforts to mitigate the tariff costs and specifically how you're approaching the annual contract negotiations with automakers at De Fasco and then separate question .

Speaker #8: Just if I missed it , I apologize . I'm just wondering if you commented on why not , why there weren't any buybacks in the quarter .

Speaker #8: Thanks .

Genuino Christino: Hi, Timna. Yeah. We continue to renew our contracts, our AM contracts. We basically almost done now for part of H1 or of next year, so signing even more than a 1-year contract. I think fundamentally, our customers, they like the product. They like what they get from Dofasco. I think there is very good cooperation between us and our customers there. We don't expect really here significant change in terms looking at our North America business, you know. In terms of volumes going to automotive, of course, other than if we have lower production next year, which we are not talking about.

Speaker #3: Hi . Yeah . So we we continue to . Renew our contracts . OEM contracts . So we just we basically almost done now for for part of first half for of next year .

Speaker #3: So signing even more than a one year contract . So I think fundamentally our customers so they like to they like the product .

Speaker #3: They like what they get from from the fasco . So I think there is very good cooperation between us and our customers there .

Speaker #3: So so we don't expect really here significant change in terms , looking at our North America business . You know , in terms of volumes going to automotive , of course , other than if we have lower production next year , which we are not talking about , but just because of renegotiations , we are not really expecting significant change in the overall volumes going to automotive .

Genuino Christino: Just because of renegotiations, we are not really expecting significant change in the overall volumes going to automotive. In terms of buybacks, there is not really much more I have to say. I mean, as you know, we have a very clear policy, and we believe that is a differential. I mean, not all of our competitors will have a very clear policy. I think we were in a way lucky. We did a lot of buybacks at the very beginning of the year when the share price was still low.

Speaker #3: And in terms of buybacks , there is not really much more . I have to to say . I mean , as you know , we have a very clear policy and we believe that it's a differential .

Speaker #3: I mean , not all of our competitors will have a very clear policy . And I think we will , you know , we're lucky we we did a lot of buybacks at the very beginning of the year when the share price was still low and all I would I would say is that you should expect that the company will honor that policy , that 50% of the free cash , after paying dividends will be distributed to , to , to shareholders .

Genuino Christino: All I would say is that you should expect that the company will honor that policy that 50% of the free cash after paying dividends will be distributed to shareholders. I would just also add that the policy is working quite well. I mean, we talked about 38%. We did 9 million shares this year already. We have a very low average price. We are really creating a lot of value to our shareholder. Daniel, if you want to complement.

Speaker #3: I would just also add that the policy is working quite well . I mean , we talked about 38% . We did 9 million shares this year already .

Speaker #3: And and we have a very low average price . So we are really creating a lot of value to our to our shareholders .

Speaker #3: Anyway . If you want to compliment .

Daniel Fairclough: No. Thank you, Genuino Christino. I think that was very complete.

Speaker #2: Thank you . I think that was was very complete .

Timna: Okay, great. Thank you.

Speaker #8: Okay . Great . Thank you .

Daniel Fairclough: Thanks so much. We will move to the next question, which we will take from Tristan at BNP. Hi, Tristan. Please go ahead.

Speaker #2: Thanks , Timna . So we will move to the next question , which we will take from Tristan at BNP . Hi Tristan .

Speaker #2: Please go ahead .

Tristan: Yes. Hi, thank you for taking my questions. First one is on working capital. Just wanted to see how confident you are on the almost $2 billion of release that you expect in Q4, and what should be driving that. Is there any impact, you know, from outages at Fos or Mexico? Isn't there a risk of reducing inventories a bit too much and missing the recovery in Q1? If you can discuss that as well. Is that not your base case that notably in Europe you'll see a bit of a pickup in Q1? Also, if you can comment on the CBAM uncertainty, and does that have any impact on your order book in Europe and pushing more buyers towards local producer? That's my first question.

Speaker #5: Yes .

Speaker #9: Hi . Thank you for taking my questions . First one is on working capital . I just wanted to see how confident you are on on the almost 2 billion of release that you expect in Q4 .

Speaker #9: And what should be driving that ? Is there any impact from outages at force or Mexico ? And isn't there a risk of reducing inventories a bit too much ?

Speaker #9: Much and missing the recovery in Q1 ? And if you can discuss that as well , is that not your base case that notably in Europe , you you'll see a bit of a pickup in Q1 ?

Speaker #9: And also, if you can comment on the sebum and certainty, does that have any impact on your order book in Europe and pushing more buyers towards local producers?

Speaker #9: And that's my first question .

Genuino Christino: Yeah. The working capital release in Q4 to some extent is seasonal, right? I mean, as we know, we have just less working days in December, that will have an impact on how much receivables we carry at the end of the year, right? If you look also, we had a reduction in payables. As we prepare actually for potentially a stronger 2026, we start also increasing, and that should also start to normalize. You're right. There are a couple of one-offs, such as the fact that we are not producing as per standard in Mexico, some accumulation of raw materials that should also start to normalize, right?

Speaker #3: Yeah . So we it's it's the working capital release in Q4 to some extent . It's seasonal , right ? I mean , as we know , we have just less working days in December .

Speaker #3: So that will have an impact on on how much receivables we carry at the end of of the year . Right . And then if you look , if you look also , we had a reduction in payables .

Speaker #3: So as we prepare actually for potentially a stronger 2026 . So we start also increasing . That should also start to to normalize .

Speaker #3: And you're right . So there are a couple of one offs such as the fact that we are not able we are not producing as per standard in Mexico .

Speaker #3: Some accumulation of raw materials that should also start to normalize . Right ? We had the reline of our Dunkirk furnace , which is also then in the process now of we are normalizing the inventory of slabs .

Genuino Christino: We had the relining of our Dunkerque blast furnace, which is also then in the process for now of we are normalizing the inventory of slabs. We are very confident that you're gonna see a significant release of working capital. As was also the case last year. If you go back to 2024, you're gonna see something very, very similar. You're right. We have a concern here not to squeeze a working capital that is available to the business. That's why what you're gonna really see is more on the receivables side than payables side, not so much in terms of inventories.

Speaker #3: So yeah , we are very confident that you're going to see a significant release of working capital , as was also the case last year .

Speaker #3: So if you go back to 20 , 2024 , you're going to see something very , very similar . So and you're right .

Speaker #3: So, we have a concern here not to squeeze the working capital that is available to the business. And that's why what you're going to really see is more on the receivable side.

Speaker #3: And payable side . Not so much in terms of inventories .

Tristan: Okay. No, that's clear. Just following up then on Europe and with the steel action plan, do you believe that there is a possibility of seeing the new quotas implemented before July next year? To go back to my earlier question, what kind of market environment do you see in Q1 if the quotas are not implemented in January, April, but in July? Do you see a risk of input surging? If you could comment a little bit on your order books in Europe, if you're starting to see a bit more activity there, that'd be helpful. Thank you.

Speaker #9: Okay , okay . No that's that's clear . And just for following up then on Europe and with the steel action plan , do you believe that there is a possibility of seeing the new quotas implemented before July next year .

Speaker #9: And to go back to my earlier question , what kind of environment do you see in Q1 if the quotas are not implemented in January , April , but in July , do you see a risk of import surging ?

Speaker #9: Yeah . And if you could comment a little bit on your order books in in Europe , if you're starting to see a bit more activity , there , that would be helpful .

Speaker #9: Thank you .

Genuino Christino: Well, in terms of timing of implementation, I, when we discuss internally, I think there is still hope that we might actually see it earlier. I think that's quite important, and that's really all the efforts in terms of making sure that the parliament, the council, they understand the urgency of having these measures implemented as soon as possible. Even though it's challenging, I think there is still hope that we may see this implemented earlier. Of course, we have to wait and see. One thing is for sure, though, I mean, of course, we don't yet know for sure all the details of CBAM, but CBAM for sure is effective already from 1st of January, right? We'll see what are the final terms.

Speaker #3: Yeah . Well , in terms of timing of implementation , I so when we discuss internally , I think there is still hope that we might actually see it earlier .

Speaker #3: And I think that's quite important . And that's really how the efforts in terms of making sure that the Parliament and the Council , the understand the urgency of having this measures implemented as soon as possible .

Speaker #3: So, even though it's challenging, I think there is still hope that we may see this implemented earlier. But, of course, we have to wait and see.

Speaker #3: One thing is for sure , though . I mean , of course we don't even don't yet know for sure all the details of Cbam , but for sure is effective already from 1st of June , right ?

Speaker #3: And then I will see what are the final terms . But that alone should already at least bring the make the imports less , less competitive .

Genuino Christino: That alone should already at least make the imports less competitive. In terms of order book, I think we discussed. I mean, order books are at they are not higher than normal. I think it's just because, as we have seen, demand for now at least kind of moving sideways. Demand, the order book is relatively stable.

Speaker #3: So and in terms of order book , I think we discussed I mean other books at they are not higher than , than than normal .

Speaker #3: I think it's just before , as we have seen , demand for now at least kind of moving sideways demand . The order book is relatively stable .

Tristan: All right. Thank you.

Speaker #9: All right . Thank you .

Daniel Fairclough: Great. Thanks, Tristan. We'll move now to take a question from Max at Oddo. Hi, Max.

Speaker #2: Great . Thanks , Tristan . So we'll move now to take a question from Max at Otto . Hi , Max .

Max: Yeah, good morning. Good afternoon. Sorry, Daniel and Genuino Christino. My first question is on Mexico. This is an asset where you have had a number of issues over the recent past. There was this illegal blockade last year. There was the hotel on the EAF earlier this year, and now there's this problem on the DRI plan. How confident are you basically that the asset can return to a normalized productivity and performance and that on a recurring basis from next year?

Speaker #9: Yeah . Good morning .

Speaker #10: Good afternoon . Sorry , Daniel . No . So my first question is on Mexico . So this is an asset where you have had a number of issues over the recent past .

Speaker #10: So there was this illegal blockade last year . There was the hotel on the EAF earlier this year . And now there's this problem on the dry plant .

Speaker #10: So how confident are you basically that the asset can , can return to a normalized productivity and performance and that on a recurring basis from , from next year ?

Genuino Christino: Yeah. That's a fair question. Then, of course, we are not pleased. Some of the problems that we are facing this year, they are still the result of the illegal blockade that happened last year. What we are doing right now is really reviewing all of our SOPs. We have our engineers, we have our CTO group, going through all the procedures, making sure that we avoid repetition of some of these issues. I'm very confident that with the support of group CTO and local team also very engaged, we're not gonna have a repetition of some of these operational issues in Mexico.

Speaker #3: Yeah , that's that's a that's a fair question . And and then of course we are not pleased . Some of the problems that we are facing this year , they are still still the result of the legal blockade that happened last year .

Speaker #3: So and and what we are doing right now is really reviewing all of our sop's . So we have our engineers , we have our CTO group going through all the procedures , making sure that we .

Speaker #3: We avoid repetition of some of these issues . So I'm very confident that with the support of of group CTO and local team , also , very engaged , we're not going to have a repetition of some of these operational issues in Mexico .

Max: Okay. The second question is on the import pressure in Brazil and India, which seems to be quite high at the moment, and it is reflected in very low prices. It seems that the authorities there are not really willing to tackle the situation at this stage. Are you confident that this will be the case? Would you be ready to scale back your investments in Brazil if that is not the case, given that I think one of your competitor has done such a move and Brazil is still the biggest region where you invest at the moment, if we, if we leave aside Liberia?

Speaker #10: Okay . And then a second question is on the import pressure in Brazil and India , which seems to be quite high at the moment .

Speaker #10: And it's related in , in very low prices . So it seems that the authorities are not really willing to tackle the situation at this stage or are you confident that this will be the case ?

Speaker #10: And would you be ready to to scale back your investments in Brazil , if that's not the case , given that I think one of your competitors has done such a move and Brazil is still the biggest region where you invest at the moment , if we if we leave aside the Liberia .

Genuino Christino: Yeah. Look, I mean, mid to long term, we continue to be bullish on Brazil. We will continue to invest. You're right that we have seen imports rising in Brazil. And there is also a very close dialogue with the government showing what other governments are doing around the globe, right? And what is encouraging is we have a number of anti-dumping measures that should start to have an impact, we believe, by end of this year or beginning of next year. We have anti-dumping against China on cold-rolled, galvanized, which of course are products that we are selling domestically. That should have a positive impact.

Speaker #3: Yeah . Look , I mean mid to long term , we continue to be bullish on Brazil . We will continue to invest .

Speaker #3: You're right that we have seen imports rising in Brazil . And there is also a very close dialogue with the government showing what other governments are doing around the globe .

Speaker #3: Right . And and what is encouraging is we have a number of anti-dumping measures that should start to have an impact . We believe , by the of this year or beginning of next year .

Speaker #3: So we have anti-dumping against China on coral , Galva , which of course are products that we are selling domestically . So that should have a positive impact .

Genuino Christino: I think the system, the way it is designed today, it also allows for if we see surges in other products, that we can also then look to add them to the quota systems that we have in place today. We have seen a reduction of imports already in Q3 compared to Q2. We'll see, I think the fact that we have the anti-dumping is important. It's showing that the government is also concerned. Local mills, as we know, announced price increase as well, beginning of the quarter. We will see how it plays out. India, I would say that demand continues to be extremely good, strong, rising, strong economic performance. You're right that prices are low.

Speaker #3: I think the system , the way it is designed today , it also allows for if we see surges in other products that we can also then look to add them to the quota systems that we have in place today .

Speaker #3: We have seen a reduction of imports already in quarter three compared to quarter two . So we'll see . But I think the fact that we have the anti-dumping is it's important .

Speaker #3: It's showing that the government is also concerned . Local news as we know announced price increases as well . Beginning of of the quarter .

Speaker #3: We will see how it how it all plays plays out . And India would say that demand continues to be extremely good . Strong rising , strong economic performance .

Speaker #3: You're right . That price are low . That I would say there is also the impact of the new capacity that normally takes a while to be absorbed .

Genuino Christino: I would say, that is also the impact of the new capacity that normally takes a while to be absorbed. We are going through that process right now, but I think we can also be optimistic for the near term.

Speaker #3: So we are going through that process right now . But I think we can also be optimistic for for the near term .

Max: Okay. Just perhaps the last one is on Ukraine. It seems that the challenges there have gone bigger in recent months, in terms of railways, in terms of electricity costs. Is there a point where you will consider shutting down production entirely, or are you still committed to maintaining production as it is for the time being?

Speaker #10: Okay . And just perhaps the last one is on Ukraine , it seems that the challenges there have grown bigger in recent months in terms of railways , in terms of electricity costs .

Speaker #10: So is there a point where you will consider shutting down production entirely , or are you still committed to to to maintaining production as it is for the time being ?

Genuino Christino: Yeah. The situation in Ukraine, you're right. We are running today at basically a capacity that is available to us. We are running 2 furnaces. The plant is a bit positive. We are not yet free cash flow neutral, as we discussed before, right? The key issue for us remains the high energy costs. Again, here, we are trying to engage in discussions with the government to show the importance to bring that to levels that will allow the industry to be sustainable even in this very challenging conditions of the war. We'll see. For now, the plan is to continue to produce.

Speaker #3: Yeah , the situation in Ukraine , you're right . So we are running today at basically at capacity . That is available to us .

Speaker #3: So we are running two finances . So the , the , the plant is a bit positive . We are not we are not yet free cash flow neutral as we discussed before .

Speaker #3: Right . And and the key issue for us remains the high energy costs . So again here we are trying to engage in discussions with the government to show the importance to bring that to levels that are that will allow the industry to be sustainable even in this very challenging conditions of the war .

Speaker #3: We will see . But for now , the plan is to continue to to to produce . We have the mining operations that are also close to capacity .

Genuino Christino: We have the mining operations that are also close to capacity, so we are able to sell the iron ore to our own mills, either in Europe or to third parties outside. Yeah, I think it's for now, we are managing through a very challenging situation.

Speaker #3: So we are able to sell the iron ore to our own mills at in Europe or to third parties outside , outside . So yeah , I think it's for now we are managing through a very challenging situation .

Bastian Synagowitz: Okay. Thank you.

Speaker #10: Okay . Thank you .

Daniel Fairclough: Thanks, Max. We'll move now to take the next question, which is gonna be from Bastian at Deutsche Bank. Hi, Bastian.

Speaker #2: Thanks , Max . So we'll move now to take the next question , which is going to be from Bastian at Deutsche Bank .

Speaker #2: Hi , Bastian .

Bastian Synagowitz: Yeah. Hi, good afternoon, and thanks for taking my questions. My first one is on Europe and can I please come back on the situation here in the context of the policy plans. When you look at the European capacity landscape, do you believe that the current capacity, which is in operation, would be enough to pick up the additional market share which the domestic industry would likely absorb from the imports? Would this 10 million tons, which you referred to in the charts, require idle capacity to restart? Maybe just as a quick add-on to that, are you generally more positive on the volume or the price leverage for your business from the policy which has been laid out? Those are my first questions.

Speaker #11: Yeah . Hi . Good afternoon and thanks for taking my questions . My first one is on European and can I please come back on the situation here in the context of the of the policy plans .

Speaker #11: So when you look at the European capacity landscape , do you believe that the current capacity , which is in operation would be enough to pick up the additional market share , which the domestic industry would likely absorb from the imports ?

Speaker #11: Or would this 10 million tonnes , which you refer to in the charts , require idled capacity to restart , and then maybe just as a quick add on to that , are you generally more positive on the volume or the price leverage for your business from from the policy , which has been laid out ?

Speaker #11: Those are my first questions .

Genuino Christino: Yeah. Well, I think in terms of As we know, I mean, and that was also made very clear by Europe there, by the Commission. As we know, the capacity utilization in Europe today is low, and that's the whole idea behind some of these trade actions to allow the industry to regain a level that is more sustainable, right? So, I think, Bastian, it will depend on where you are in Europe, right? So, there can be cases where you're gonna need to bring some idle capacity and then of course, costs are going to be also higher because you're not gonna have the benefit of the fixed cost, right?

Speaker #3: Yeah . Well , I think in terms of as we know , I mean . And that was also made very clear by , by Europe , by , by the Commission , as we know , the capacity realization in Europe today is , is low .

Speaker #3: And that's the whole idea behind some of these trade actions to allow the industry to regain a level that is more sustainable . Right .

Speaker #3: So and I think it will it will depend on , on where you are in Europe . Right . So that can be a cases where you're going to need to bring some idle capacity .

Speaker #3: And then of course , costs are going to be also higher because you're not going to have the benefit of the fixed cost .

Genuino Christino: It's difficult to be very precise on that. For us, I think it's Well, I guess what is important here is really to make sure that the industry can run at a decent level of capacity utilization, right? I think that's the whole idea. Because then you can earn your cost of capital. You can optimize your fixed cost base, your cost base, et cetera, et cetera. That's how we are seeing it.

Speaker #3: Right . So it's difficult to be very precise on that . And for us , I think it's . Well , I guess what is important here is really to make sure that the industry can run at a decent level of capacity utilisation , right .

Speaker #3: I think that's the whole idea because then you can you can earn your your cost of capital . You , you can optimize your fixed cost , pays your cost base , etc.

Speaker #3: , etc. . So , so that's how we are seeing .

Bastian Synagowitz: Okay. Just in terms of the leverage for your own business, when you look at the gives and takes, are you more positive on the price effect or are you more positive on the volume impact on your earnings contribution?

Speaker #11: Okay . And just in terms of the leverage for your own business , when you look at the geosynthetics , are you more positive on the price effect or are you more positive on the volume impact on on your earnings contribution ?

Genuino Christino: Well, I don't want to be drawn on that. I think for us, as I said, what is important is that we can run our facilities at a higher capacity utilization, right? That should be then if you have less imports, which as we know today, the cost or the price of imports is so low, right? Just Daniel Fairclough, do you wanna add anything to this question?

Speaker #3: Well , I don't want to be to be drawn on that . I think for us is , as I said , what is important is that we can run our facilities at a higher capacity utilization right .

Speaker #3: And that's that should that should be then if you have less imports , which as we know today , the costs or the price of imports is so low , right .

Speaker #3: Then if you want to add anything , this question .

Daniel Fairclough: Yeah. Thanks, Genuino. I think, like you're saying, it's very difficult to isolate the sort of contribution of the fixed cost absorption, the sort of operating leverage, or the impact of just higher industry utilization on spreads. I think, you know, I'm sure you've analyzed this in the past, that Bastian, you know, there's a good correlation between spreads and utilization. There should be two factors, and those two factors should contribute to what Genuino is talking about. Our business in Europe, the industry in Europe, being in a position to cover its cost of capital, and that's ultimately the objective here.

Speaker #2: Yeah . Thanks , Jimmy . So I think like you're saying , it's very difficult to isolate the , the the the sort of contribution of the fixed cost absorption , the sort of operating leverage all the impact of just higher industry utilization on spreads .

Speaker #2: But I think , you know , I'm sure you've you've analyzed this in the past that Bastian , you know , there's a good correlation between spreads and utilization .

Speaker #2: So there should be two factors . And those two factors should contribute to what Jemina is talking about . Our business in Europe , the industry in Europe , being in a position to cover its cost of capital and and that that's ultimately the the objective here .

Bastian Synagowitz: Okay. Sounds good. My next question is on North America. I guess one of your Canadian peers here is heavily loss-making. Could you maybe give us a bit of color on how ArcelorMittal Dofasco is actually performing on a single entity basis? Are you still making money there?

Speaker #11: Okay . Sounds good . Then my next question is on North America . And I guess one of your Canadian peers here is heavily , heavily loss making .

Speaker #11: Could you maybe give us a bit of color on how Dofasco is actually performing on a single entity basis ? And are you still making money there ?

Genuino Christino: Yes, absolutely. Dofasco is one of the best facilities in the world and so it's still very much profitable.

Speaker #3: Yes , absolutely . The first quiz is is one of the best facilities in the world . And so it's still very much profitable .

Bastian Synagowitz: Okay. Great. Very last question, just on your expansion strategy in Hazira. Is that on track? Just I guess given what you discussed earlier in terms of the capacity which has been brought on already this year, do you think the market is ready for the ramp up next year as you're planning it?

Speaker #11: Okay , great . And then very last question , just on on your expansion strategy in Hazira , is that on track and just I guess given what you discussed earlier in terms of the capacity which has been brought on already this year , do you think the market is ready for the ramp up next year as you're planning it ?

Genuino Christino: I think, first of all, our projects are ongoing and going well. We're gonna be, as we discussed, commissioning some of the finishing lines still later this year, beginning of next year. During 2026, we're gonna be completing the upstream, building coke batteries. A lot of the new capacity has just come now. I think we're gonna be in a good position to ramp up our own capacity, allowing some time so the market can absorb that. I think in terms of timing, it looks, it looks, it looks good, Massimo.

Speaker #3: Yeah , I think first of all , our projects are ongoing and going well . So we're going to be , as we discussed , commissioning some of the finishing lines .

Speaker #3: Still later this year , beginning of next year . And then during 2026 , we're going to be completing the the upstream floating Coke batteries .

Speaker #3: And a lot of the new capacity is just come down . So I think we're going to be in a good position to ramp up our own capacity .

Speaker #3: So allowing some time for the market can absorb that . So I think in terms of timing , it looks it looks it looks good .

Speaker #3: Nothing .

Bastian Synagowitz: Sounds good. Okay. Thank you.

Speaker #11: Sounds good . Okay . Thank you .

Daniel Fairclough: Great. Thanks, Bastian. We still have a few more questions to take, Genuino, we know. The first of those we'll take from Dominic at JPMorgan. Hi, Dominic.

Speaker #2: Great . Thanks , Bastian . So we still have a few more questions to take , Jim . We know . So the first of those will take from Dominik at JP Morgan .

Speaker #2: Hi , Dominik .

Dominic: Hi, guys. Just a couple of quick questions on, again, sort of real-time indicators of demand. You obviously have a seasonal slowdown in the North American market. Are you seeing any visible signs of kind of new pockets of weakness in the US, particularly given the government shutdown? My second question is relates to Europe and the auto segment. Do you have any insight you can share with regards to how you're approaching contracts moving into January?

Speaker #12: Hi , guys . Just a couple of quick questions on again , real time indicators of demand . You you obviously have a seasonal slowdown in in the in the North American market .

Speaker #12: But are you seeing any visible signs of kind of new pockets of weakness in the US , particularly given the government shutdown . And then my second question is relates to Europe and the auto segment .

Speaker #12: Do you do you have any any insight you can share with regards to how you're approaching contracts , moving into January ?

Genuino Christino: Yeah. To start with the US, you're right. I think overall, we all know the numbers, right? The demand moving sideways. But I would say that when I look at our business, Calvert is running absolutely full. We had record levels of production shipments, right? The two segments where we are very much focused, the energy, automotive, doing relatively well. And then when it comes to Canada and Mexico, I think that's where we also see some potential because, of course, the demand domestically, let's forget tariffs for a moment, also significantly impacted, right, with all the uncertainties created by the change in the relationship between the various governments within North America.

Speaker #3: Yeah . So starting with the US , you're right . So I think overall we all know the numbers , right . So the demand moving sideways .

Speaker #3: But I would say that when I look at our business , Calvert is running absolutely full . We had we had record levels of production shipments .

Speaker #3: Right . So the two segments where we are very much focused , their energy automotive doing relatively well . And then when it comes to Canada and Mexico , I think that's where we also see some potential , because of course , the demand domestically .

Speaker #3: Let's forget tariffs for a moment . Also significantly impacted . Right . With all the uncertainties created by the change in in the relationship between the various governments within North America .

Genuino Christino: I think we see potential for stabilization there that should also support the shipments domestically in Canada and Mexico. Coming to the auto contracts, I mean, it's going to be as always is. I think we have a lot to offer to the automakers. In some cases, in North America, as we know, the negotiations will happen gradually during the year. In Europe, it's, there is a headway to beginning of the year. This process is ongoing, and I expect that it will be as always is. We have an agreement that is, that should be a win-win, so for both companies.

Speaker #3: So I think we see potential for for stabilization there . That should also support the shipments domestically in in Canada and Mexico . Coming to the auto contracts .

Speaker #3: I mean , it's going to be as always , this . So I think we have a lot to offer to the automakers in some cases in , in , in North America , as we know , the negotiations will happen gradually during the year .

Speaker #3: And in Europe , it's there is a have a way to begin of the year . So this is this process is is ongoing .

Speaker #3: And I expect that it will be , as always , this we have an agreement that is that should be a win win .

Speaker #3: So for for for both companies .

Dominic: Is there any sense that the price tension that we've seen over the last two years could alleviate this time around?

Speaker #12: Is there any sense that the the the price tension that we've seen over the last two years could alleviate this time round ?

Genuino Christino: Yeah. As you know, I mean, we don't comment on specifically on prices as you can imagine. These negotiations are possible. They are specific. We don't comment on prices. Of course, the spot price is always a reference, right? A starting point. You see prices are moving higher in Europe already. They are also coming up again in North America. We talked about prices in Brazil also. Higher prices being announced. I think the environment is in that sense positive.

Speaker #3: Yeah , as you know , I mean , we don't comment on specifically on prices . As you can imagine . So this negotiations , the possible they are they are specific .

Speaker #3: They are . And so we don't comment on on prices . I would just of course the spot price is always a reference right .

Speaker #3: Starting point . Is prices are moving higher in Europe already . The are also coming up again in North America . We talked about prices in Brazil also higher prices being announced .

Speaker #3: So I think the the environment is is it's in that sense is positive .

Dominic: Thank you. Thanks.

Speaker #12: Thank you . Thanks .

Daniel Fairclough: Thanks, Dominic. We will move now to Andy at UBS.

Speaker #2: Thanks , Dominic . So we will move now to Andy at UBS .

Andy: Hello. Can you hear me okay?

Speaker #11: Hello . Can you hear .

Speaker #5: Me okay . Yeah . Hey . Excellent . So just to go back to the European question about the CO2 , can you just remind us what your emissions are likely to finish up in 2025 if we assume the normal seasonal uptick in for Q and how that compares to your free allocation levels this year , and going into 2026 with the reduction of Reallocations and I guess at some of your sites , you you produce less .

Daniel Fairclough: Hi. Yeah.

Andy: Hey. Excellent. Just to go back to the European question about the CO2, can you just remind us what your emissions are likely to finish at in 2025 if we assume the normal seasonal uptick in Q4, and how that compares to your free allocation levels this year? Going into 2026 with the re-reduction of free allocations, and I guess at some of your sites, you've produced less in recent years, so you may lose some free allocation because of lower production. Can you give an idea by how much you expect your free allocation to change next year? You know, maybe as a follow-on to that, are there any assets which are kind of emitting less than their free allocations where, you know, the uplift in production would have minimal cost on the CO2 side?

Speaker #5: In recent years . So you may lose some reallocation because of lower production . Can you give us an idea by how much you expect your free allocation to change next year ?

Speaker #5: And maybe as a follow on to that , are there any assets which are kind of emitting less from their free allocations ? Were , you know , the uplift in production would have minimal cost on the CO2 side ?

Andy: Just to give us an idea for how much you could ramp production easily. Thank you.

Speaker #5: Just to give us an idea for how much you could ramp production easily . Thank you .

Genuino Christino: Andy, this is, there are many, many moving parts, right? When it comes to ETS system, it is complex. I would just say that as we know in Europe, most players, if not all players, they are short, right? They don't meet the benchmarks. I would say a good rule of thumb is it's about you're paying CO2 costs for about 20% of your production. Right? That's the ballpark, which should give you an idea. I think when we look at our. It's always based on an average. You have your. It's highly technical.

Speaker #3: Andy . I mean , this is I mean , there are many , many moving parts , right ? When it comes to DTS system .

Speaker #3: It is complex . I would just say that as we know in Europe , most players , if not all players , they are short , right ?

Speaker #3: So they don't meet the the benchmarks and I , I would say a good rule of thumb is it's about you . You are paying CO2 costs for about 20% of your of your production .

Speaker #3: Right . That's the ballpark should give you an idea . I think when we look at our and it's always based on an average , you have your how so it's highly technical .

Genuino Christino: We don't really expect going forward in 2026 that we're gonna be losing free emissions meaningfully because of levels of operation, right? As we know, there are reductions, gradual reductions that will happen with the implementation of CBAM. You need to take that into account. There are also revisions to the benchmarks, right? That's the situation.

Speaker #3: So we don't really expect going forward in 2026 that we're going to be losing free emissions meaningfully because of levels of operation . Right .

Speaker #3: But as we know , there are reductions , gradual reductions that will happen with implementation of carbon . You need to take that into account .

Speaker #3: And there are also revisions to the benchmarks . Right . So . That's . The situation .

Andy: Yeah. You don't have a number of credits reduction that you expect for next year?

Speaker #5: Yeah . But you don't you don't have a number of credits reduction that you expect for next year .

Genuino Christino: Well, I mean, we all know what's going to happen in terms of reductions in, there is a 2% reduction in the ETS system, the free allowances, right? We have to see what happens now with the benchmarks. It's too early to talk about it.

Speaker #3: Well I mean we all know what's going to happen in terms of reductions in there is a 2% reduction in the the ETS system .

Speaker #3: The free allowances , right . And then and then we have to see what happens now with the the benchmarks . So it's too early to to talk about it .

Andy: Mm-hmm. Okay.

Genuino Christino: I would just add that, what is important here also is now with CBAM. To the extent that CBAM is effective, then at least, on par with imports, they will be paying the same costs. I think I would encourage you also to see, to the extent that costs increase in Europe, but you have at least the same cost being applied to imports, then at least there is a level playing field in that regard.

Speaker #5: Okay .

Speaker #3: I would I would just add that what is important here also is now with Cbam . Right . And to the extent that Cbam is effective , then at least you are at par with with imports .

Speaker #3: So there will be paying the same costs , right ? I think I would encourage you also to see to the extent that costs increase in Europe , but you have at least the same costs being applied to imports , then at least that is a level playing field in that regard .

Speaker #3: Right ? Which is I guess , what the whole industry in has been advocating .

Genuino Christino: Which is, I guess what the whole industry in Europe has been advocating.

Andy: Okay. That's clear. Just a second question on Canada. There was a recent document about medium and heavy vehicles, you know, a proclamation on the auto industry from the White House, which had a paragraph in it talking about potential carve-outs for auto-grade steel from Canada, where the tariff would drop by, from 50% to 25%, conditional on some conditions around like investments in the US and things like that. I was wondering how you interpreted that, because it seemed slightly unclear to me. If you've got an asset in the US that you're clearly investing in, do you see potential to use that recent proclamation to reduce the tariff on the fast going to the US?

Speaker #5: Okay , that's clear and just second question on Canada , the there was a recent document about medium and light . Medium and heavy vehicles proclamation on the auto industry from the white House , which had a paragraph in it talking about potential carve outs for auto grade steel from Canada , where the tariff would drop by from 50% to 25 .

Speaker #5: Conditional on some some conditions around like investments in the US and things like that . I was wondering how you interpreted that , because it seemed slightly unclear to me , but if you've got an asset in the US that you're clearly investing in , do you see ?

Speaker #5: Potential for to use that recent proclamation to reduce the tariff on the go into the US ?

Genuino Christino: My understanding is that the negotiations at this point in time, as we all know, they are suspended, right? We are hoping that they will resume the negotiations, and then we'll see finally what comes out of this discussions. I don't have anything else really to add.

Speaker #3: Well , my understanding is that negotiations at this point in time , as we all know , they are suspended , right . And we are hoping that they will resume the the negotiations and then we'll see .

Speaker #3: Finally what comes out . Of of this discussions . I don't have anything else really to add .

Andy: Okay. Sure. No worries. Thank you.

Speaker #5: Okay . Sure . No worries . Thank you .

Daniel Fairclough: Great. Thanks, Andy. Two questions left. We're going to take the first of those from Phil at KeyBanc. Hi, Phil.

Speaker #2: Great . Thanks , Andy . So two questions left . So we're going to take the first of those from Phil at KeyBanc .

Speaker #2: Hi Phil .

Phil: Hey, thank you. Regarding North America, how is the Calvert EAF ramp going? Is that part of your incremental 2026 strategic EBITDA growth bridge as you look in the next year, is that comes up to the levels you expect?

Speaker #13: Hey . Thank you . Regarding North America , how how is the Calvert ramp going ? And and is that part of your incremental 2026 strategic EBITDA growth bridge ?

Speaker #13: As you look into next year ? Is that comes up to the levels you expect ?

Genuino Christino: Well, Phil, we are ramping up. Our expectation now, latest expectation, is to end the year with a run rate between 40% and 50%. It's progressing. We started also the qualification process. You're right. When you look at our bridge that is on slide 10 and the EUR 800 million there, you're gonna have contribution from Calvert in two buckets. One is, of course, we're gonna be consolidating Calvert for the full year. As you know, we started consolidation in end of Q2. You're gonna have an extra contribution from Calvert consolidation, which is in our M&A bucket. You're gonna have the contribution from the EAF, especially in this environment, right?

Speaker #3: Yeah . Well , we are ramping up . So our expectation now , latest expectation is to end the year with the run rate between 40 and 50% .

Speaker #3: So it's progressing. We started also the qualification process. And you're right. So when you look at our bridge that is on Flight 10 and the $800 million that you're going to have as a contribution from Calvert in two buckets, one is, of course, we're going to be consolidating Calvert for the full year.

Speaker #3: So and as you know , we started the consolidation in in end of quarter two . So you're going to have an extra contribution from Calvert consolidation which is you know M&A bucket .

Speaker #3: And you're going to have the contribution from the . Especially in this environment right . When we are when Covid is also paying for the tariffs on the slabs .

Genuino Christino: When Calvert is also paying for tariffs on the slabs. That is also part of the EUR 600 million that you see from projects. Calvert next year, it's in the 2 buckets there.

Speaker #3: So that is also part of the 600 million that you see from from projects . So Calvert next year it's in the two two buckets there .

Phil: Thank you. As a follow-up, you mentioned in your remarks, in your analyst deck, that Canada is beginning to address, you know, some of the unfairly traded steel or some level of reciprocity for the US tariffs. What have they done specifically? Do you think they're doing enough?

Speaker #13: Thank you . And as a follow up , you mentioned in your remarks and your analyst deck that Canada is beginning to address some of some of the unfairly traded steel or , or some , some level of reciprocity for the for the US tariffs .

Speaker #13: What have they done specifically . And are do you think they're they're doing enough .

Genuino Christino: Well, as we know, we have a very large level of imports into Canada, right? Of course they reduce the quotas for non-FTA countries. That's a good step. It doesn't really address the problem. We believe that Canada should be putting in place a much stronger trade protection to make sure that the industry can again also regain market share vis-a-vis imports. As we know, a lot of the imports also come from the US, right? There we are hopeful again, as we said, that Canada, US, Mexico, as part of the USMCA negotiations, they will also come to an agreement. That would be very, very good, right?

Speaker #3: Well , as we know we have a very large large level of of imports into Canada , right . So . So of course the reduce the quotas for non FTA countries .

Speaker #3: That's that's a good step . But it doesn't really address the problem . So we believe that Canada should be put in place a much stronger trade protection to to make sure that the industry can again also regain market share vis a vis imports .

Speaker #3: As we know , a lot of the imports also come from the US , right ? So and and there we are hopeful again , as we said , that Canada , US , Mexico and maybe as part of the Usmca negotiations , they will also come to an agreement .

Speaker #3: And that would be very , very good . Right ? If you have the whole Usmca with similar rules , similar protection . So that would be extremely positive .

Genuino Christino: If you have the whole USMCA with similar rules, similar protection, so that would be extremely positive. You would expect if you have a common trade block, that the rules would be similar.

Speaker #3: And you would expect if you have a common trade . Bloc , that the rules would be would be similar .

Phil: Thank you.

Speaker #13: Thank you .

Daniel Fairclough: Thanks, Phil. We'll take our final question, and we'll take that from Boris at Kepler Cheuvreux. Hi, Boris.

Speaker #2: Thanks , Phil . So we'll take our final question and we'll take that from Boris at hi Boris .

Boris: Hi. Good afternoon. 2 questions and one technical precision. The first is on Europe. I think you're quite close with politics in talks about those trade barriers to be implemented. What is your take on the fact that those proposals of the European Commission will be adopted in the current state they have been proposed, or whether there could be some dilution? That would be my first question. Then on China, there is a lot of talks about the anti-involution measures. Do you see any chance that China might be moving towards a cut in production as some headlines were referring earlier this year?

Speaker #14: Hi . Good afternoon . To two questions and one technical precision . The first is on Europe . I think you're quite close with politics in in talks about those trade barriers to be implemented .

Speaker #14: What is your take on on the fact that the , those proposals of the European Commission will be adopted in the current state , they have been proposed , or whether there could be some dilution ?

Speaker #14: That would be my first question . Then on China , there is a lot of talks about the pollution measures . Do you see any chance that China might be moving towards a cut in in production as , as some headlines were referring earlier this year ?

Boris: Lastly, just to confirm what you said earlier on the market share in Europe, is it 30% or 20% to 30%? Thank you.

Speaker #14: And lastly , just to confirm what you said earlier on , the on the market share in Europe , is it 30% or or 20 to 30% ?

Speaker #14: Thank you .

Genuino Christino: Okay. Boris, I will take your first question, I will comment on China. Well, I mean, the dilution is coming, there is a process, right? The proposal is now going through the parliament, is going through the council. I think there is a desire expressed by a number of governments, by the Commission to have an accelerated approval process. That is only possible if we don't have significant change. I think that's our request that we have these measures in place as soon as possible. On the market share, I mean, I'm just giving you a reference. Okay.

Speaker #3: Okay , so Boris , I will take your first question and then then I will comment on on China . Well , I mean , the dilution risk , I mean there is a process , right .

Speaker #3: So so the proposal is now going through the Parliament is going through the council , I think there is a desire expressed by a number of governments , by the Commission to have an accelerated approval process .

Speaker #3: And that is only possible if we don't have significant change . So I think that's that's our , our request that we , we have this measures in place as soon as soon as possible .

Speaker #3: And then on the the markets I that's I mean that's it's I'm just giving you a reference . Okay . Then we want to talk about China .

Genuino Christino: You want to talk about, China?

Daniel Fairclough: Yeah, thank you. It's obviously a question that we receive on most of our calls around this theme of China excess capacity. When will they address it? When will they take measures to structurally reform the industry to balance domestic capacity with domestic demand and in an effort to restore the industry to health, to reasonable levels of profitability, reasonable margins, etc., etc. To your question, there have of course been lots of headlines and suggestions that steel could be one of the beneficiaries of the anti-involution theme in China this year.

Speaker #2: Yeah . Yeah . Thank you . So it's obviously a question that we receive on , on most of our calls around this theme of China access capacity .

Speaker #2: When will they address it ? When they when will they take measures to structurally reform the industry , to balance domestic capacity with domestic demand .

Speaker #2: And in an effort to restore the industry to health , to reasonable levels of of profitability , reasonable margins , etc. , etc. .

Speaker #2: So to your question , there are , of course , been lots of headlines and suggestions that steel could be one of the beneficiaries of the anti involution theme in China this year .

Daniel Fairclough: The reality is that we really haven't seen any changes in the impact that China's having in external markets. They continue to have weak prices, very weak margins. Generally, there's a substantial proportion of the industry operating with on a loss-making basis. They continue to export at extremely elevated levels, you know, run rates of 120, 130 million tons annualized. Those negative domestic dynamics have then been translated into other regions through those exports.

Speaker #2: But the reality is that we really haven't seen any any changes in the impact that China's having in external markets . So they continue to have weak prices , very weak margins generally .

Speaker #2: There's a substantial proportion of the industry operating with on on a loss making basis . And they continue to export at extremely elevated levels .

Speaker #2: You know , run rates of 120 , 130 million tons annualized . So those negative domestic dynamics are then being translated into other regions through those exports .

Daniel Fairclough: I guess my answer to your question is until we really see strong evidence of change, and that would be through improved prices, improved margins, improved profitability, and most importantly, through reduced exports, then nothing is really changing. That just puts even more emphasis on the requirement for governments to take appropriate actions to ring-fence those domestic industries from these negative impacts of excess capacity in China. Genuino M. Christino, you know, he was just talking about the progress, the strong progress that we're making in Europe. We talked earlier about what's happening in Brazil.

Speaker #2: So I guess my my answer to your question is , and until we really see strong evidence of change , and that would be through improved prices , improved margins , improved profitability , and most importantly , through reduced exports , then nothing is really changing .

Speaker #2: And that just puts even more emphasis on the requirement for governments to to take appropriate actions to ring fence those domestic industries from from these negative impacts of excess capacity in China .

Speaker #2: So , Jen , we know you know , he was just talking about the progress , the strong progress that we're making in Europe .

Speaker #2: We talked earlier about what's happening in Brazil , but it's clear that that that's the the best way to to deal with this issue is by putting appropriate protections in place .

Daniel Fairclough: It's clear that's the best way to deal with this issue is by putting appropriate protections in place.

Boris: Okay. Thank you.

Speaker #14: Okay . Thank you .

Daniel Fairclough: Great. I think that's our last question, Genuino M. Christino. I'll hand back to you for any closing remarks.

Speaker #2: Great . So I think that's our last question , Jen . We know . So I'll hand back to you for any closing remarks .

Genuino Christino: Thank you, everyone. Before we close, let me briefly reiterate the key messages from the start of the call. First, our results continue to demonstrate structural improvements. The fact that we are posting such improved results at what we believe to be the bottom of the cycle bodes well for when conditions normalize. Secondly, our underlying business continues to generate healthy cash flows. Looking behind seasonal working capital movements shows that we continue to generate good underlying free cash flow, and this is after having invested close to $1 billion in our strategic growth projects. These projects are delivering structurally high EBITDA, and this will continue in 2026. Finally, the outlook for our business has clearly improved over the past three months.

Speaker #3: Thank you everyone . Before before we close , let me briefly reiterate the key messages from the start of the call . First , our results continue to demonstrate structural improvements .

Speaker #3: The fact that we are posting such improved results that what we believe to be the bottom of the cycle falls well , for when conditions normalize .

Speaker #3: Secondly , our underlying business continues to generate healthy cash flows . Looking behind seasonal working capital movements shows that we continue to generate good underlying free cash flow .

Speaker #3: And this is after having invested close to 1 billion in our strategic growth projects . These projects are delivering structurally high EBITDA , and this will continue into 2026 .

Speaker #3: Finally , the outlook for our business has clearly improved over the past three months . The newly proposed trade to , combined with an effective ceba , provides a foundation for our new business to earn its cost of capital together with the actions being taken on regions like Brazil and Canada .

Genuino Christino: The newly proposed trade tool, combined with an effective CBAM, provides a foundation for our new business to earn its cost of capital. Together with the actions being taken in other regions like Brazil and Canada, this continues to point towards a more regionalized and better protected steel industry in which ArcelorMittal can thrive. With that, 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 speak with you soon. Stay safe and keep those around you safe as well. Thank you very much.

Speaker #3: This continues to point towards a more regionalized and better protected steel industry , in which our thrives . With that , I will close today's call and if you need anything further , please do reach out to Daniel and his team .

Speaker #3: I look forward to speaking with you soon . Stay safe and keep those around you safe as well . Thank you very much .