ArcelorMittal Ramps Up, Dividend Doubles as Steel Policies Shift

Date of Call: Feb 5, 2026

Guidance:

• Higher steel production and shipments across all regions in 2026 supported by operational improvements and strengthened trade protections.
• Confident in generating positive free cash flows in 2026 and beyond.
• Capital return policy remains disciplined, with 50% of free cash flow returned to shareholders and 50% allocated to growth.
• Proposed base dividend of $0.60 per share, doubling over the past 5 years.
• CapEx guidance of $4.5 billion to $5 billion for going-forward basis.

Business Commentary:

Safety Performance and Transformation:

• ArcelorMittal achieved measurable improvements in safety, particularly in fatality prevention, in 2025.
• The progress was driven by a 3-year safety transformation plan and custom safety road maps aimed at strengthening safety culture and risk management.

Trade Policy and Market Conditions:

• The European Commission's introduction of a carbon border adjustment mechanism (CBAM) and tariff-rate quota (TRQ) trade measures significantly limited steel imports into Europe.
• These policies are expected to create a more level playing field and restore profitability to the European steel industry.

Financial Performance and Growth Strategy:

• ArcelorMittal reported an EBITDA of $6.5 billion for 2025, which is almost double the margin at previous cyclical low points.
• This improvement was due to an optimized asset base, diversified footprint, and contributions from strategic projects like the expansion in Liberia and the U.S. footprint.

Capital Allocation and Shareholder Returns:

• The company generated $1.9 billion in investable cash in 2025 and has consistently returned cash to shareholders, with a proposed base dividend of $0.60 per share.
• This reflects the company's confidence in its outlook and its strategy to balance high-return strategic growth projects with shareholder returns.

Decarbonization Efforts in Europe:

• ArcelorMittal is evaluating economically viable decarbonization projects in Europe, starting with the potential setup of an electric arc furnace in Dunkirk, France.
• The decision is based on the new carbon pricing landscape created by the CBAM, aiming to achieve economic decarbonization without overburdening capital or resources.

Sentiment Analysis:

Overall Tone: Positive

• CEO states 'the outlook is positive' and that 'policy developments are creating the foundations for a fairer and more balanced market.' He also notes 'progress we are making and the confidence we have in the road ahead,' with investments delivering 'tangible returns and positioning us for long-term value creation.'

Q&A:

• Question from Alain Gabriel (Morgan Stanley): What signposts are you looking for before bringing new European capacity online, and how quickly can you bring it online?
  Response: CEO: Can bring idle capacity online quickly (by latest estimate, 1st July 2026) if customer demand signals and if it earns a healthy return on capital employed.

• Question from Alain Gabriel (Morgan Stanley): What is the profit bridge from Q4 to Q1 and Q2, including any restart costs in Europe?
  Response: CFO: In Q1, North America will see volume recovery and higher prices post-Mexican operational issues. Europe shipments and prices will improve in Q2, with costs rising; restarting capacity involves minimal meaningful costs.

• Question from Tristan Gresser (BNP Paribas): What are the next steps and timeline for European decarbonization projects, and could the previous CapEx maximum be increased?
  Response: CEO: Economic decarbonization preconditions (energy contract, CBAM) are met. Starting with Dunkirk EAF sequentially; CapEx guidance of $4.5-$5B remains as projects are economically attractive and will be executed one at a time.

• Question from Tristan Gresser (BNP Paribas): What is your view on the potential extension of the ETS free allowance phaseout past 2034?
  Response: CEO: Believes ETS should adapt to reflect high European energy costs and slower global decarbonization pace; CBAM already creates a level playing field, so ETS review should consider these realities.

• Question from Ephrem Ravi (Citigroup): Is further expansion at Hazira beyond 15M tonnes planned?
  Response: CEO: Current expansion to 15M tonnes by 2027; additional greenfield facility (~8M tonnes) in Rajayyapeta under study; long-term vision is over 40M tonnes.

• Question from Ephrem Ravi (Citigroup): Are you capped out in Brazil from an acquisition perspective given high market share?
  Response: CEO: Comfortable with existing business; focused on growing downstream capabilities (e.g., Vega facility), mining projects, and long business in Brazil.

• Question from Ephrem Ravi (Citigroup): When is a realistic timeframe for approving the second EAF at Calvert?
  Response: CEO: Expect it in the short term, not medium-term; will update when next steps are announced.

• Question from Cole Hathorn (Jefferies): How much can ArcelorMittal ramp up in Europe to meet displaced import needs, and what's the trigger?
  Response: CFO: To maintain ~30% market share against 8M tonne flat product import reduction, minimal additional CapEx is needed as idle capacity exists; focus is on economic return and customer demand/order book.

• Question from Reinhardt van der Walt (BofA Securities): Is the dividend increase a mix shift from buybacks or an absolute increase in capital return?
  Response: CFO: No change to capital allocation framework (50% to shareholders, 50% to growth). Buybacks remain preferred, but dividend increased to $0.60 per share due to confidence in the business and positive feedback from shareholders.

• Question from Bastian Synagowitz (Deutsche Bank): Is there still scope for European market consolidation, and would you aim to play a role?
  Response: CEO: No significant benefits seen from further consolidation at this time; comfortable with current footprint and latent capacity for growth at minimal CapEx.

• Question from Matthew Greene (Goldman Sachs): Can you clarify the shortfall in strategic CapEx spend and its impact on EBITDA uplift?
  Response: CFO: The ~$200M shortfall was due to timing of $200M Liberia MDA extension payment in Q1 2026; EBITDA uplift target remains intact with no project delays.

• Question from Matthew Greene (Goldman Sachs): What triggers expansion beyond 20M tonnes at Liberia, and what are the limitations?
  Response: CEO: The rail can handle up to 30M tonnes with minimal additional infrastructure. The study is focused on exploring mining licenses to increase production to 30M tonnes at low capital cost and attractive returns; not expected in the short term.

• Question from Timna Tanners (Wells Fargo): Given trade measures in Canada, Brazil, etc., is there increased risk to those regions, and are they doing enough?
  Response: CEO: Heightened risk exists, but governments are reacting to support domestic steel for resilience/security reasons; in India, growth offsets some trade policy concerns, and the industry remains profitable.

• Question from Timna Tanners (Wells Fargo): What is your perspective on substitution risk/opportunity in Europe (e.g., steel vs. aluminum)?
  Response: CEO: No significant demand disruption seen historically from trade measures. Focus is on growing with customer base; downstream industries may get future TRQ/CBAM support. Automotive steel remains competitive due to lightweighting and cost.

• Question from Philip Gibbs (KeyBanc): What are current operating rates at Calvert EAF, and how much incremental volume returns in Mexico?
  Response: CFO: Calvert EAF ramping up, with meaningful improvement in Q1 and expected to be at capacity by end of H2 2026. Mexico: ~2.8M tonnes incremental volume in Q1 from longs (2 months) and flats (1 month).

• Question from Philip Gibbs (KeyBanc): What should be modeled for D&A for 2026?
  Response: CFO: D&A guidance of $2.9B-$3B for 2026, including depreciation from new projects; Q4 North America D&A was typical year-end correction, not the run rate.

• Question from Maxime Kogge (ODDO BHF): What are the next milestones for Ilva, and will there be a financial impact?
  Response: CFO: No provisions for Ilva; legal process may last a couple of years; updates will be provided as developments occur.

• Question from Maxime Kogge (ODDO BHF): What is your initial feedback on CBAM implementation, and is front-loading imports affecting pricing?
  Response: CEO: CBAM front-loading seen as imports produced before 1/1/2026 had no CBAM cost; now import offers include CBAM, affecting spot prices. No significant circumvention seen yet; legislation is tightening.

• Question from Maxime Kogge (ODDO BHF): How should we think about financing for the India greenfield?
  Response: CEO: Focused on minimizing funding costs; will report on capital structure (including potential equity injections) once key milestones are achieved.

Contradiction Point 1

European Capacity Flexibility and Restart Costs

Contradiction on whether idle capacity is sufficient or if restarting requires significant costs, impacting operational flexibility and cost structure.

What key indicators would trigger a decision to scale up capacity in Europe, and how quickly can that capacity be deployed? - Alain Gabriel (Morgan Stanley)

2025Q4: ArcelorMittal is well-positioned with idle capacity that can be brought online relatively quickly, without the need for reline or rehiring permanently laid-off workers... - Aditya Mittal(CEO)

Is existing European capacity sufficient to capture additional market share from import reductions, or must idle capacity be restarted? - Bastian Synagowitz (Deutsche Bank)

2025Q3: Will depend on the specific location in Europe. Some areas may need to restart idle capacity, which would incur higher costs (less fixed cost leverage)... - Genuino Christino(CFO)

Contradiction Point 2

Timing/Readiness of the Calvert EAF Ramp-up

Contradiction on the expected timeline for achieving full capacity at the Calvert EAF, affecting strategic growth projections.

What is the expected timeline for approval of the second EAF's start-up at Calvert? - Ephrem Ravi (Citigroup)

2025Q4: The company expects the next phase of expansion (doubling EAF capacity at Calvert) to occur in the short term, not the medium term. Specific timelines will be announced later. - Aditya Mittal(CEO) & Genuino Christino(CFO)

Calvert EAF ramp progress and inclusion in 2026 strategic EBITDA growth bridge? - Philip Gibbs (KeyBanc Capital Markets)

2025Q3: Calvert is ramping up, targeting a 40–50% run rate by year-end [2025]. - Genuino Christino(CFO)

Contradiction Point 3

Capital Expenditure Guidance and Project Inclusion

Contradiction on whether new projects like the second EAF at Calvert will fit within the existing CapEx envelope, affecting financial planning and investment confidence.

Given increased visibility on European returns, what are the next steps and timeline for the previously announced decarbonization projects, and could the prior $5 billion CapEx maximum be raised due to higher structural margins? - Tristan Gresser (BNP Paribas)

2025Q4: The existing CapEx guidance of $4.5 billion to $5 billion remains appropriate. - Aditya Mittal(CEO)

How confident are you in maintaining the $4.5–$5 billion CapEx range, particularly the second EAF? - Boris (Kepler Cheuvreux)

2025Q2: Room will be made for new projects, including potential new EAFs, to be discussed in Q4. - Genuino Christino(CFO)

Contradiction Point 4

Tariff Impact and Mitigation at Calvert

Contradiction on the significance of ongoing tariff impacts and the effectiveness of mitigation measures, influencing risk assessment and strategic decision-making.

In light of Europe's evolving industry structure and your capacity to scale production, what key indicators would trigger scaling up, and how quickly can you activate additional capacity? - Alain Gabriel (Morgan Stanley)

2025Q4: The decision to bring capacity online will be driven by clear signposts of customer demand and the requirement to achieve a healthy and sustainable return on capital employed. - Aditya Mittal(CEO)

How will Calvert mitigate tariff risks if the 50% level remains unchanged with Mexico and Brazil? - Alan (Morgan Stanley)

2025Q2: Most tariff impact is already reflected in Q2 results; incremental future impact is not significant given Calvert’s strong performance. - Genuino Christino(CFO)

Contradiction Point 5

Restarting European Steel Capacity and Timeline

Contradiction on the speed and ease of restarting European steelmaking capacity, impacting capacity planning and market responsiveness.

In light of Europe's evolving industry structure, what indicators would trigger scaling up capacity, and how quickly can you scale up? - Alain Gabriel (Morgan Stanley, Research Division)

2025Q4: ArcelorMittal is well-positioned with idle capacity that can be brought online relatively quickly, without the need for reline or rehiring permanently laid-off workers, and is capable of meeting the projected deadline of **July 1, 2026, for the TRQ**. - Aditya Mittal(CEO)

How is the European market developing, can you leverage healthy order books to increase volumes, and how might competitors respond to improved spreads? - Cole Hathorn (Jefferies)

2025Q1: Idle capacity is difficult to restart due to high CO2 costs under the DTS system. - Genuino Christino(CFO)