14 February 2018Reading time: 2 minutes

ArcelorMittal is a world’s leading steel and mining company headquartered in Luxemburg. ArcelorMittal is the product from the merger of Arcelor with Mittal Steel in 2006. The company has steelmaking facilities in over 19 countries and is leader in all the main steel markets.

On 31 January 2018 ArcelorMittal released its yearly result. According to the report performance was strong in 2017 with a soaring EBITDA of $8.4bn (+34.4% vs 2016), which correlate with a Net Income of $4.6bn (+156.7% vs 2016) driven by lower tax impact and positive currency effects. The production of the company is on a good way to recovery with higher steel and marketable iron ore shipments respectively +1.6% and +6.1% compared to last year. Increasing shipments reflect the growing global demand toward steel as well as in iron ore.

At the beginning of 2016 ArcelorMittal started its 5 Year strategy Action 2020 consisting of a structurally improve of the performance of the company. Main target is to have an EBITDA of $85 per ton of ore. Action 2020 should improve cumulated EBITDA by $3.0bn by 2020. Action 2020 impacted EBITA by $0.6bn in 2017 mostly generated by volume ($0.3 bn) and cost/mix improvement ($0.3bn). As improving Volume appears to be a key component as the company see an acceleration in the volume in 2018 assuming market conditions stay favourable.

ArcelorMittal has a high level of exposure to developed market where Europe and North America account for 75% of the shipments. Because company has an important footprint in the automotive industry helping auto manufacturer to reduce weigh of their chassis. Even if the company faced challenge in recent, it never ceased to fund R&D to develop pioneer technology such as JVD (Jet Vapor Deposition) process for the coating of steel. According to the company, JVD offers significant advantage improving the adhesion of coating on steel independently of the steel grade.

At the moment ArcelorMittal shares are traded at EUR 81.80 (12.02.2018). 19 analysts rated ArcelorMittal on Buy, 7 on Hold and 1 on Sell. The 12-months target price is estimates with EUR 30.68. ArcelorMittal current market capitalization equals EUR 27,443 million.

Vontobel products on ArcelorMittal are tradable at DEGIRO, Lynx and Interactive Brokers.

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22/04/2021 19:58:12