ArcelorMittal 2024 Results: Operational Excellence and Sustainability at the Forefront
ArcelorMittal, the world's leading integrated steel and mining company, has posted strong financial results for the fiscal year 2024, closing out a year marked by structural business improvements and continued focus on sustainability. The company’s performance is especially noteworthy given the challenging global market conditions. With strategic investments in key projects, improved operational efficiency, and a focus on decarbonization, ArcelorMittal is positioning itself for long-term success in a competitive industry.
Safety Commitment and Employee Well-Being
One of the core pillars of ArcelorMittal’s operations is a commitment to protecting employee health and safety. The company continues to focus on minimizing workplace risks with an overall Lost Time Injury Frequency (LTIF) rate of 0.70x for FY 2024, marking a significant improvement from the previous year's rate of 0.92x. As part of this ongoing commitment, business-specific safety plans have been developed and implemented following recommendations from a company-wide safety audit led by dss+.
Financial Performance: Resilience Amidst Market Volatility
Despite facing numerous challenges in the market, ArcelorMittal reported strong financial results in FY 2024. The company posted an EBITDA of $7.1 billion, with an EBITDA per tonne of $130. This reflects a resilient operating performance, driven by structural business improvements and diversification of product offerings across different regions.
However, the net income for FY 2024 was $1.3 billion, which was impacted by non-cash and exceptional items totaling $1.0 billion, including impairments, restructuring costs, and one-time tax charges. Despite these charges, the adjusted net income for FY 2024 came to $2.3 billion, with an adjusted basic EPS of $2.95, highlighting the underlying strength of ArcelorMittal's core operations.
Cash Flow Generation and Strategic Capital Allocation
ArcelorMittal has demonstrated its ability to generate substantial cash flow, with net cash provided by operating activities totaling $4.9 billion over the past 12 months. Of this, the company allocated $2.8 billion for maintenance and normative capital expenditures (Capex), while generating $2.0 billion in investable cash flow. A significant portion of this investable cash flow was directed towards strategic growth projects ($1.3 billion), shareholder returns ($1.7 billion), and mergers and acquisitions ($0.6 billion). This approach has allowed the company to reinvest in its business, reward shareholders, and maintain a strong balance sheet.
ArcelorMittal has also made notable progress with share repurchases. In 2024, the company repurchased 52 million shares, reducing the number of shares outstanding by 6.3%. This is part of a broader strategy to enhance shareholder value, which has seen a 37% reduction in the fully diluted share count since September 2020. As of the end of 2024, the company’s book value per share stood at $64.
Strategic Growth Initiatives and Key Project Updates
ArcelorMittal’s strategy revolves around high-return growth projects that will contribute to the company’s long-term success. Key updates on strategic initiatives include:
• Liberia Iron Ore Expansion: The company is expanding its iron ore production in Liberia, with a revised plan to produce 20 million metric tons (Mt) of marketable material annually. The revised capex for this expansion has increased to $1.8 billion, up from the previous estimate of $1.4 billion. The project is expected to deliver $450 million in EBITDA potential, with $200 million of that expected to be realized in 2025.
• New Electric Arc Furnace (EAF) in the US: ArcelorMittal is completing a new 1.5 million metric ton EAF at its AMNS Calvert facility in the United States. This new EAF will be capable of producing high-quality steel grades for the automotive industry and marks a significant technological leap for the company, making it the first in North America capable of producing domestically melted and poured automotive-grade steel.
• Electrical Steel Plant in Calvert: ArcelorMittal is building a new electrical steel plant at its Calvert facility, with a capacity to produce 150,000 metric tons of premium non-grain-oriented electrical steel annually. The estimated capex for this plant is $0.9 billion, and production is expected to begin in 2027. This will have a significant impact on the company’s EBITDA, with a projected annual contribution of $200 million at full capacity.
• Decarbonization Projects: ArcelorMittal continues to focus on its decarbonization pathway to meet future climate goals. Large-scale decarbonization projects, including the expansion of Electric Arc Furnaces at Gijón and Sestao in Spain, are advancing, although at a slower pace than originally anticipated due to insufficient policy and market developments. These efforts are critical in expanding the company’s XCarb® low-carbon steel offering and improving its competitiveness in the green steel market.
Shareholder Returns and Capital Discipline
The company’s commitment to capital discipline is clear, as evidenced by the completion of 92% of its $85 million share buyback program by the end of 2024. In addition, the Board has proposed an increase in the annual base dividend for FY 2025, raising it from $0.50 per share in FY 2024 to $0.55 per share, which will be paid in two equal installments in June and December 2025, pending shareholder approval at the 2025 Annual General Meeting.
ArcelorMittal’s commitment to shareholder returns includes a robust plan to continue returning at least 50% of post-dividend free cash flow to shareholders via share buybacks, ensuring ongoing shareholder value.
2025 Outlook: Optimism for Increased Demand and Sustained Growth
Looking ahead to FY 2025, ArcelorMittal expects increased demand, with the company predicting higher apparent demand in FY 2025 compared to FY 2024. The company is optimistic that restocking activity, particularly in Europe where inventory levels are currently low, will help drive demand.
ArcelorMittal has outlined its capital expenditure plans for 2025, projecting between $4.5 billion and $5.0 billion in Capex. Of this, approximately $1.4 billion to $1.5 billion will be directed towards strategic growth projects, while $0.3 billion to $0.4 billion will be spent on decarbonization-related initiatives.
The company’s free cash flow outlook for 2025 is positive, supported by working capital optimization. The completion of ongoing strategic growth projects is expected to result in structurally higher EBITDA and investable cash flow, which will help ensure the company’s financial strength and ability to reward shareholders in the future.
Conclusion: Positioned for Long-Term Growth
ArcelorMittal’s 2024 financial performance reflects its resilient business model and strategic initiatives, which have allowed the company to navigate challenging market conditions. With a focus on sustainability, decarbonization, and key growth projects, ArcelorMittal is well-positioned for continued success in 2025 and beyond. The company’s efforts to enhance operational efficiency, increase shareholder value, and maintain a strong balance sheet ensure that ArcelorMittal remains a leader in the global steel and mining industry.
