Afternoon, everybody. Good morning. Welcome to ArcelorMittal's 1st quarter 2023 analyst investor call. As Francine said, this is Daniel Fairclough from the ArcelorMittal Investor Relations team. As usual, I'm joined on this call today by Genuino Christino, our Chief Financial Officer. Before I hand over to Genuino, I'd like to mention a few housekeeping items. Firstly, I want to refer everybody to the disclaimers on slide 2 of the results presentation that we published on our website this morning. I'd also like to remind everybody that today's call is being recorded, and it's scheduled to last up to 45 minutes. Finally, I'd just like to reiterate Francine's instructions. If you would like to ask a question, then please do press star one on your telephone keypad, and we will take the questions in the order that we receive them. With that, I'd like to hand over to Genuino for his opening remarks. Thank you, Daniel, and welcome everyone. My remarks today will be brief and focus on three points only. The results. Our results continue to demonstrate improved profitability relative to prior cycles. Growth. The capital we have allocated to growth is delivering and supporting higher normalized profitability for ArcelorMittal. The third point I will address is capital returns. The positive outlook for the business and for a free cash flow generation, we are launching a new buyback program. Firstly, on results. As expected, at the end of the stock has supported a strong recovery in our shipment volumes. This has underpinned the sequential improvement in profitability. EBITDA per ton improved to 126 the first quarter, comparing very favorably with prior cycles. This further highlights the benefits of our cost actions and portfolio upgrades in recent periods. On growth. This quarter, we completed the acquisition of CSP in Brazil, adding 3 million tons of highest quality capacity at the bottom of the cost curve. You will see the full impact on shipments and profitability in the second quarter. Together with the Texas HBI plant we acquired last year and the contribution from the new hot strip mill in Mexico, our investments are clearly supporting high normalized profitability. Our investments continue. We have this quarter announced the formation of a JV with Casa dos Ventos to develop 554 MW wind power project in Brazil. With a modest EP Contribution, this project can supply up to 38% of our electricity needs in the country. On capital returns. Our capital location and return policy is working very well. We are growing the earnings power of the business through our strategic CapEx in M&A, and we are gearing the benefits of this to shareholders by buying back shares and reducing the share count. We have now bought back 31% of our equity since September 2020 and still developing the business strategically and maintaining a strong balance sheet. Given our positive outlook for the business and for free cash flow, we have today announced that we will buy back up to a further 85 million shares over the next two years. We see our shares as fundamentally undervalued, and our buybacks represent the best way for us to capitalize on the disconnect between our view on the outlook for ArcelorMittal and what is being priced today by the markets. With this, brief opening remarks, then I think we can then, move to the Q&A. Great. Thank you, Genuino Christino. We have a queue formed of questions, and we'll take the first question, please, from Alain at Morgan Stanley. Go ahead, Alain. From my side. Firstly, the usual question, can you share with us the usual building blocks of your Q2 EBITDA, including prices and shipments by region, also including those items such as the CSP contributions and the impact of the fires in Europe? Just thinking about the building blocks into Q2. That's the first question. Thanks. Hi, Alain. Yeah, thank you for the first question. Let me walk you through the moving parts. Let's start with Brazil. That's where we have the consolidation of CSP. In Q1, you only have, like, 20 days of contribution, so it's not much. The asset is performing extremely well, as we have in our slide deck. You can see actually providing what is the run rate in terms of EBITDA in the second quarter. You can see that we are guiding for a run rate annualized Q2 of about $600 million, which is way above what we believe to be the normalized levels for profitability for this business. Q2, we will have the full consolidation, so you will see a meaningful impact in our shipments. Also, our flat facility, Tubarão, will be producing more as we have seen a recovery of the pricing, especially for high-quality slabs. Shipments improving quite nicely in Brazil. We will see prices in Brazil relatively at segment level, relatively stable. Cost is coming down. That's Brazil. If we move to NAFTA. NAFTA, as you can see in our shipments in Q1, we had higher shipments through our JV in Calvert. Quarter-on-quarter, that's about 250 KT more. In the second quarter, our forecast for the demand in U.S. continues to improve the apparent steel consumption in U.S. quarter-on-quarter. We will continue to do well in terms of shipments in after. Prices, as we know, will be up given the lags, and costs is slightly lower. Moving to Europe. Europe it's, let me address the two incidents that we had in Spain and France. We have two furnaces that are down, as you can see in our release. We are working relentless to mitigate the impacts of the two incidents. Looking at our production in Q2, crude steel production, even though we're gonna be slightly lower, I think we're gonna be mitigating it to a large extent, the impacts of the two shutdowns. We have brought one furnace up in Fos. The furnace in Spain was only operating for about 30 days in Q1. I think we're gonna be able to mitigate. We are ramping up the stove. We are bringing materials from different parts of the group, slabs from Brazil, from India. Even though the headline production number will be slightly down, our ability to produce will be at par with Q1. However, as you can also see in our results, and you can see that we have de-stocked in Europe in quarter one. You can see that the production numbers and shipment numbers are similar. We have de-stocked, and we're not gonna be in a position to repeat the de-stock that you see in quarter one. The headline number, shipments number for Europe will be down. Prices will be higher and costs will be down. Overall, we believe that profitability of Europe should go up nicely as well. CIS, we should be doing better. We should be doing better in terms of shipments. Our prices should be relatively stable and our costs should be down. It's a long answer, but walking through all the moving parts here. Thank you. That's very clear. The second question is on the buyback. The announcement this morning extends through May 2025, which is quite unusual in terms of time frames. Granted, that it doesn't really impact your buyback potential for 2023 because it's quite formulaic. Why not keep things simple and commit to a smaller buyback, but with a more defined and shorter time frame? Yeah, look, I think, with this announcement today, really, we have two key messages. One is that, look, we continue to believe that the business will continue to generate good levels of free cash flow, right? Second, we want to continue to do what we have been doing, which is to return 50% of the free cash flow to our shareholders. We are not changing the policy. That's, the policy is unchanged. I think what we saw before was that by doing announcements for short periods of time, people were taking that as a kind of an implied guidance for free cash flow. That's not something that was not clearly our intention. I think the key message is really, look, the company will continue to generate free cash. We will continue to distribute 50%. If you look at Q1 results, we have free cash flow neutral, but after investing more than $800 million in working capital, right? We are guiding for a release of working capital for the year. If you were to strip out the working capital investments in Q1, the company would be generating close to $1 billion of free cash, which is quite strong. We are still in recovery mode as we discussed. Thank you. Thanks, Alan. We'll move to the next question, please, from Tristan at BNP. Yes. Hi. Thank you for taking my question. The first one is maybe just a little bit more on Europe. Can you discuss a bit the timeline for the restart and the on-ongoing repair works taking place at Dunkirk and Gijón? More specifically in Spain, I believe you had to use explosives to remove the solidified pig iron. My first question is the integrity of the furnace at risk? Also, you've maintained your group shipment guidance despite those significant shutdowns. How confident are you that you'll be able to mitigate that and catch up the volume loss in Europe? I think you mentioned staff from CSP, but is there any other part of the groups will do better in terms of shipments? Tristan, as says, in terms of the timing, I think what you have in our release is everybody's, of course, trying to get the furnaces back as soon as possible. We are giving June as a date for the restart of the furnaces, both Spain and Dunkirk. You're right. This is a complex process, and it's progressing well. The procedures that are being used, they are standard in such cases. I think we were also very pleased that despite the incidents, we had no injuries. Everybody was safe. That's what we are trying also to keep doing this, the repairs of the two furnaces, right? As I said, I think when it comes to our shipments guidance, and as I was telling Alain, I think we are doing everything we can to mitigate the impacts, right? We had, of course, a strong first quarter because of the destock that we sold more from stocks. We remain at this point optimistic that we're gonna be able to achieve our targets. Of course, depend on how it progresses, we will update you. At this point in time, we don't see anything, you know, when I compared to what we discussed at the time of our earnings, Q4 earnings. If anything, the situation has improved. At this point, we remain optimistic that we can deliver on that. All right. That's, that's very clear. If I could follow up on another question, maybe bigger picture there on the energy strategy. Could you discuss a bit your strategy when it comes to vertical integration towards energy? I think you have announced projects in India and Brazil, but Europe is probably the region which will see first the higher needs for green power. So, could you give us an update on the current projects? I think you signed an MOU in Germany, and you're part of a consortium in Spain. When you look at those projects, the [RIES] projects in Belgium, France, et cetera, how do you plan to solve the energy side of the equation in continental Europe? Yeah, Tristan. Look, I think, we continue to look at the projects in Europe as well, and I can tell you we have gone through several of them. Far we have not yet come to a point where we feel, we can, we can go ahead, right? It's not like in Brazil or in India, where you can clearly see that you can achieve good levels of returns. But we continue to explore, the projects in Europe, the options, right? The good thing is that we are seeing a normalization, right? We are seeing, gas prices normalizing, coming back now to levels that are close to pre-war levels. We are seeing the power costs also coming down. I think the European governments, they understand the importance to keep the costs to levels that then can keep the competitiveness of the European industry. I think we will continue to explore the possibilities. As we discussed in a couple of quarters ago, I think we're gonna engage and sign contracts when they make economic sense. So far we have not yet been able to find good projects in Europe where we can justify the investments. Then, of course, we continue to look for PPAs, ways to secure the energy needs of the footprint. All right. Thank you. Great. Thank you, Tristan. We'll move to the next question, please, from, Patrick at Bank of America. Thank you very much. Just wanted to ask if you could give us your outlook for steel spreads and margins, and prices maybe for the rest of the year. We've, you know, we've seen the end of destocking, prices move up and spreads open up. Prices, especially in Europe, seem to have kind of stalled in the last month or so. I mean, when you look at the market outlook from here for the remainder of the year, what are you expecting, or what do you think are the key things that you're monitoring? Thanks very much. Yeah, Patrick. Patrick, as you know, I mean, we don't really comment on, on evolution of prices. I think, but I mean, looking at the evolution of the indexes today, I mean, as you rightly said, we have the European prices relatively stable now for a couple of weeks, at good levels. Of course, we have prices in U.S. as holding up quite well. We have seen raw materials coming down, right? We are seeing coal prices down quite significantly. I don't know prices as well. If anything, at this point, what we see is that spreads are improving. I think I would also point that what is probably quite relevant in this discussion is the level of inventories that we see in the system today, right? Even though we have seen a recovery in volumes in quarter one, we don't believe that it is really being driven by restocking. When we look at the data, we look at inventory levels in Europe, in U.S., across the regions where we operate, we actually believe that inventory levels are quite low, which should then continue to support the apparent steel consumption going forward, which is a good sign, something that should continue to support the business. Thanks. Maybe just related to that, what are you seeing on imports? We have seen kind of increased exports out of China in particular. What are you seeing as imports into your key regions? Yeah. Well, so far they have come down, right? I mean, imports in Europe, in U.S., they remain, of course, elevated in Europe, but below in terms of looking at the market share of imports in Europe, they are below what they were in Q1 of last year. We have seen also a decline in the U.S., also some decline in Brazil. So far it's not visible, right? That's of course, always a point for us to be watching. Thank you very much. Thanks, Patrick. We'll move now to a question from Tom at Barclays. Go ahead, Tom. Afternoon. Thanks very much for taking my questions. Just the first one. With Calvert, I saw you raised the CapEx guidance slightly highlighting enlarged scope and inflation. Could you just confirm what the enlarged scope is, and then whether or not we should think about read across from inflation into your sort of other CapEx budgets, in particular, the $10 billion decarbonization budget? That's the first question. Thanks. Yeah. Sure, Thomas. Yeah. Yeah, we have updated the CapEx, so from the $100 to about $1 billion. As you know, I mean, this is, this is a project that is being designed for 3 million tons. As we go ahead and execute the first phase, it makes sense for us to prepare parts of the second phase. That's the scope. There is a component here of inflation as well. When it comes to the big number, the $10 billion, that's our best estimate at this point. We are... Where we are right now in this process is, we are going through the Pre-FEED of the projects in Europe, the Canadian project as well. Our intention is to release the next climate report where we will provide an update on the status of our forecasts. I would expect this process to be completed and released by end of this year or beginning of next year. Perfect. Thank you. Just quickly on Brazil. You mentioned CSP is running, you know, more than double normalized profitability right now. I guess the export slab demand is quite strong. If I sort of piece that together with the earnings, I get a conclusion that maybe the domestic market is a little bit softer. Do you think that's a fair assessment? If so, any thoughts on sort of mixed changes in the coming quarters in Brazil? Thanks. Yeah. Look, I think we remain comfortable with the guidance that we provided at the time of our Q4 results. We are seeing apparent steel consumption in Brazil improving this year, both flat and longs. Also driven by the end of the destock that also impacted the Brazilian business last year. I think domestically, when I look at our volumes, quarter-on-quarter, they have moved up. Also relatively stable year-on-year. I think there is, I would say, the start of the year in Brazil, maybe not as strong as we had hoped, when we look at the performance of the business, it has been good, we remain. We are not changing our guidance. Okay. And no changes to sort of, mix in Q2 versus Q1 as well? Well, I think in terms of the mix, I mean, what you can expect, of course, is more exports. Right. We're gonna be exporting more slabs because that's the product with the highest prices in Q2, especially high quality slabs. You're gonna have the contribution from CSP. In Q1, you have about 200 KT of shipments from CSP, and then we are running at full capacity. It's a 3 million ton facility. You can see what is the impact in terms of shipments coming from CSP. As I said at the beginning, we should also be ramping up production in Tubarão for more slab exports. I think what you will see is a mix that is more geared towards exports. In Q2, in particular, the exports of slabs, they will enjoy. If you look at the Brazilian slab prices, FOB, we will, they are quite profitable. Understood. Thank you very much. I'll turn it back. Thanks, Tom. We'll move now to a question from Myles at UBS. Great. Yeah. A couple of questions. Could you just give us a sense of what the larger scope is in Liberia? Is it more tons or, is there another phase to the expansion that you're preparing for that? Yeah. Myles, thank you. Thank you for the question. We are really looking at the product. That's one. Also looking at the infrastructure, the port. I would say it's basically the quality of the product, the infrastructure. I would say those are probably the main scope of changes that we are contemplating. Okay. In terms of timing, is it still on track? And, you know, I presume the size is unchanged in terms of the total expansion. Yeah. The size is, at this point is, it's unchanged, 15 million tons, and we are on track for end of 2024. Okay. We talked a little bit about inventories earlier. What about your order books? Have you seen a meaningful change in the length of the order books in any region over the last sort of few months? I mean, I guess given the prices are stagnating and starting to drift down, I presume that there's been a little bit of a shortening to order books in certain regions. Not really. Myles, the order books are strong. They are good. when looking at Europe, they have increased during the quarter. we are looking at. You know, I think we have good visibility now, at least end of August. we are well advanced with our bookings for quarter three. I think that's good. in US, as you know, lead times extended above what would be considered normal levels. I think the order books they are looking good. Okay. That's helpful. Thank you. Thanks, Myles. We'll take the next question from Phil at KeyBank. Go ahead, Phil. Thanks very much. Very substantial pickup in NAFTA volumes, year on year. Can you isolate how much of that was due to the new Mexican hot strip mill and, you know, perhaps some more volume off of that? Well, Phil, we are running at about 60% of capacity, right? In Mexico. We are running at, you know, it's 350 KT more or less per quarter now. Of course, year before we were more producing these slabs, right? We were just at the beginning of the ramp up. That's one. I think when you look at the volumes year-on-year in NAFTA, we are doing better year-on-year in Canada and in Mexico, right? We had a very good strong production levels in Mexico, which is supporting the ramp up of the hot strip mill. Also as I discussed maybe at the beginning, we have also more shipments of slabs from NAFTA to Calvert, our JV, right? Year-on-year, the number is not that different, so it doesn't really explain the improvements in shipments year-on-year. When you think about it quarter-on-quarter, we have increased by about 250 KT shipments of slabs from our segment to Calvert JV. Thanks. Just as a follow-up, I think you may have given some color on what you think CSP might contribute earlier in your script. If so, can you reiterate that? Thanks so much. Yeah. I think we are very pleased with the, with the acquisition. As I said, we shipped, we consolidated 20 days of the business in Q1. That's about 200 KT of shipments. The company is running full. We are in the process of integrating with our existing Brazilian operations. You have in our deck, we are providing what is the run rate, annualized run rate in Q2, which is at EBITDA level, about $600 million. That's the annualized quarter two run rate. Doing extremely well. Thank you. Thank you. Thanks, Phil. We'll move to the next question please from Rochus at Kepler. Yes. Sorry. Thanks for taking the question. Maybe one question on working capital. I think the Q1 build was less than what we have seen in previous Q1s. Can you probably provide a little bit of a breakdown on the moving parts, why it was more limited? Is this already a reflection of the production issues in Europe that you ship more from inventory? Maybe referring to that point, can you give us directionally some indication how we shall think about the second quarter working capital? You know, we see prices up, raw mats down, maybe a further drawing down inventory. Yeah, that would be my first part of the question. Yeah. Rochus, look, it has been impacted by the incidents that we talked about in Spain and in Dunkirk. As we discussed, clearly we were in a recovery mode, demand strong. We did the stock from especially from Europe. You can see that, right? I mean, you look at the production numbers in Q1, shipment numbers in Q1, it's very visible that we destocked. That was just to make sure that we could follow the market, right? Maybe that's why you don't see a more meaningful impact in working capital. The main driver really was the higher shipments. We remain confident at this point that we're gonna be able to release working capital in 2023. For Q2, look, I think we are seeing, this more really neutral. We are not seeing a significant investment in Q2. For full year, our expectation is still to release, especially as we still continue to work through, the costs, high energy costs in our. It's still impacting the costs of our metal stock. As we work through that, our expectation is that our costs on the balance sheet should continue to come down, and that should provide support to working capital release. Of course, but as we know, this is really driven by what happens in the last weeks of the year to some extent. We know we have the holidays in December. We'll see. At this point, we still believe that we should see a working capital release at the end of the year. Yeah. Okay. That makes sense. The second question is around ACIS. If I got it correctly on your release this morning, obviously Ukraine is now back to crude steel making. I think previously it was more pig iron only. Can you provide an update on, you know, the main utilization rates on the mine on the steel part? Yeah. As obviously there's a bit of a step towards a bit more normality, when shall we think about the break even in the Ukraine and also maybe Kazakhstan, which also probably is still not where it has been before? If you can walk through these two elements of ACIS would be great. Yeah. Sure, Rochus. Well, as we discussed, Q4 was extremely challenging for Ukraine, right? Because of the lack of energy power. Production was quite low. We have since seen an improvement of availability of power in the country. We have actually restarted a second furnace now. We are actually running now and we will run for some time at least, two furnaces. We have increased the crude steel capacity of Ukraine from about 20% to about 40%. That's a good development. We will continue to sell pig iron, so you're not gonna see all of that in our crude steel numbers because the intention is to continue to sell pig iron. It's a good product for us at the moment. You will see an improvement also in crude steel and shipments as a result of the second furnace, so about 40%. Then we have, the mines also run quite well in Q1. We also increased production. We all back to levels close to 40%. I think good developments in Ukraine so far, touch wood. The company is not very far from being breakeven at EBITDA level. It was actually positive in Q4 in terms of free cash, and it's only marginally negative in Q1. I think the teams have been doing a great job in not only keeping the assets, running production, but also making sure that they keep what they can under control. In Kazakhstan, I think we are going through maintenance with one of our washeries. You can see in our release that we mentioned that costs have gone up because we are forced to buy some external coal as we are going through this maintenance work. That should be resolved soon. Our expectation is that Kazakhstan will from now we should continue to see improvements. I think we are optimistic that for quarter two we should see better numbers for CIS. Okay. No, this sounds great. Thank you very much. Thank you. Great. Sorry, Genuino Christino. Thanks, Rochus. We've got one question remaining, Genuino Christino, and it's from Bastian at Deutsche Bank. yeah, good afternoon all. Genuino Christino, I just had a quick follow-up question on Nafta, which I thought was very impressive. Given that prices have dropped obviously in the 1st quarter, and I think you talked about volumes already, but what else has been driving it? Also by when do you expect the new hot rolling mill in Mexico to be fully ramped up, given that the market and also the temporary closure at AHMSA seems very supportive? That is my question. Yeah. No, that's true, Bastian. Look, Bastian, we are, the ramp up is really going as per plan, right? I think the teams are taking time now to develop products, getting the certification. Our expectation is that we will continue to ramp up in the second, in the second half. We'll see, we should be moving from 60 to I hope we're gonna be at least above 70%. I think this is a process that will continue. As I said, the focus remained the same as in Q4. It's product development, so getting the certifications with the existing customers, and continue to increase production. You're right. AHMSA is really, of course, it's not in our, in our control, but helpful. I'm not sure that I got your question, Bastian. Can you maybe elaborate that? Yeah, sure. As I said, I was just very impressed by your strong performance in NAFTA. You obviously had very good volumes, so that's an obvious driver. I guess realized prices probably have still been coming down. I would have thought maybe not that much cost relief. I was wondering, what else other than volumes has been driving that very strong performance in the fourth, first quarter when you actually had the down settlement on realized prices? Has there been any mix effect or what's been driving it? Yeah, I think two things. We had a very good cost performance. Fixed cost performance was excellent. Then, of course, you also have a better contribution from our Texas facility, the higher shipments, including the shipments to our JV. I would say really, the cost performance was extremely good in after during the quarter. Also, of course, the contribution from the hot strip mill. You really start to see the benefits of that, right? As running at these levels of 606% capacity. That is really starting to be more and more visible in the results. Okay, perfect. Just on the fixed cost side, do you expect to retain that cost performance in the second quarter? Well, yes, we do. Okay, excellent. Thank you. Thank you very much. Great. Thanks, Bastian. We actually have one last question that's come in from Max at Oddo. Please go ahead, Max. Yeah, good afternoon. Just a quick question on mining, where costs have increased quite significantly in Q1 versus 2022. I wondered whether this was somehow isolated or if you expected this cost inflation to continue in the coming quarters in that segment. Max, you're looking at, what is your reference? Is it quarter-on-quarter or? Yeah, quarter-on-quarter. Yeah. I think that sales have increased $200 million. EBITDA increased just $100 million because of increasing costs. Max, I think there are a couple of moving parts there. Okay. I would say costs are not really the main driver. I would say it's more, we have seen pellet premiums down, right, quite significantly quarter-on-quarter. As you know, a lot of our shipments from Mines Canada is pellets. We lose on that. I think those, when I look at the evolution of the profitability there, really, there can be maybe some impacts on coming from costs, but I would not say that they are the main drivers there. Okay. Okay, now that's clear. Thank you. Thank you. Genuino, perhaps just on that last question, it's just worth emphasizing that it's within our mining segment, it's not necessarily a good idea to take sort of revenues, less EBITDA, divide that by tons and see that as the cost performance of the business, because there can be changes from quarter to quarter on the sales on a delivered basis versus an FOB basis. Some quarters, you know that there can be a revenue increase because we're selling on a delivered basis, but then there's a matching cost increase 'cause we have to accommodate the freight cost as well. I think, always the, the best thing is more just to look at the EBITDA and the EBITDA evolution, relative to, like you said, how the iron ore price and the pellet premium has evolved, rather than just taking revenue less EBITDA, as your benchmark for costs. That was our last question. Just to hand back to you now, Genuino Christino. Well, that's great. Just wanted to thank everybody, and hope to see you soon in our quarter two results. Thank you very much, guys.