2004 Third Quarter Results: Arcelor Shows Strong Quarterly Performance.LUXEMBOURG Luxembourg, province, Belgium Luxembourg, Du. Luxemburg, province (1991 pop. 232,813), 1,706 sq mi (4,419 sq km), SE Belgium, in the Ardennes, bordering on the Grand Duchy of Luxembourg in the east and on France in the south. -- Arcelor This article appears to contradict the article Arcelor Mittal. Please see discussion on the linked talk page. Arcelor S.A. (Euronext: LOR) is the world's largest steel producer in terms of turnover and the second largest in terms of steel output, with a turnover of (CELR.PA) --Strong generation of cash flow --Reinforced Balance Sheet --Expansion in Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. --Positive outlook for Q4 Third quarter results confirmed the positive trend in revenues and profits despite the traditional summer slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). . World steel
consumption continues to grow at a healthy pace, driven by continuous
strong demand from China despite government efforts to avoid an
overheating OverheatingAn economy that is growing very quickly, with the risk of high inflation. of the economy. Arcelor results were mainly driven by contributions from the Long Carbon Steel and Distribution Sectors. For the first nine months of the year, price increases for Flat Carbon Steel general industry shipments and constant prices for contract business hardly offset increased raw material and energy costs, so that margin improvement was mainly due to better performance of operations and continuous implementation of synergies. Finally, a strong cash flow generation and the successful rights issue (for financing the acquisition of Brazilian assets) allowed a reduction of financial net debt. Since last summer, Arcelor has successfully closed several agreements allowing the Group to fully consolidate CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. as from October October: see month. 1st, 2004. The board of directors of Arcelor met on November November: see month. 12, 2004 under the chairmanship of Joseph Kinsch and reviewed the Group consolidated accounts for the third quarter of 2004. Consolidated net result, Group share for the third quarter of 2004, was EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 629 million, compared to EUR 101 million for the same period of last year. Consolidated revenues for the Group for the first nine months of 2004 amounted to EUR 21,745 million compared to EUR 19,451 million for the same period last year (+ 15.2% on a comparable basis). Net consolidated result, Group share, was EUR 1,494 million for the first nine months of 2004, compared with EUR 459 million at September September: see month. 30, 2003. At EUR 7,152 million for the third quarter of 2004 compared to EUR 5,869 million for the same period last year, consolidated revenues increased by 21.9% (25.6% on a comparable basis, mainly following the disposal of the tube business and Thainox). This evolution translates the increase of average selling prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. for steel, specifically for flat carbon steels (excluding annual and multi-year contracts) since July July: see month. and for long carbon steels since the beginning of the year (mainly due to the scrap surcharge An overcharge or additional cost. A surcharge is an added liability imposed on something that is already due, such as a tax on tax. It also refers to the penalty a court can impose on a fiduciary for breaching a duty. introduced for most products), but also an increase in shipped volumes for flat carbon steels compared to the low volumes of third quarter of 2003. Consolidated gross operating result for the third quarter amounted to EUR 1, 098 million compared to EUR 416 million for the third quarter 2003, or a 15.35% margin against a 7.09% margin for the same period of 2003. Gross operating results incorporate several non-recurring items (capital gains and losses on minor disposals as well as EUR 100 million of exceptional charges for restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of the Spanish Spanish, river, c.150 mi (240 km) long, issuing from Spanish Lake, S Ont., Canada, NW of Sudbury, and flowing generally S through Biskotasi and Agnew lakes to Lake Huron opposite Manitoulin island. There are several hydroelectric stations on the river. facilities, the net amounting to EUR -163 million). Consolidated gross operating result for the nine months up to September 30th amounted to EUR 2,877 million compared to EUR 1,692 million for the same period of last year. Quarterly consolidated operating result was EUR 835 million for the third quarter of 2004 versus EUR 169 million for the equivalent period last year, which corresponds to an 11.7% margin versus 2.9% respectively. After a financial result of EUR -37 million, a contribution from associates of EUR 158 million (including EUR 65 million for CST) and income tax of EUR 201 million, consolidated net result, Group share was EUR 629 million compared to EUR 101 million for the same period last year. Key Figures
In millions of euros 3rd Quarter 3rd Quarter 9 months 9 months
2003 2004 2003 2004
---------------------------- ----------- ----------- -------- --------
Revenue 5,869 7,152 19,451 21,745
---------------------------- ----------- ----------- -------- --------
Gross Operating Result 416 1,098 1,692 2,877
---------------------------- ----------- ----------- -------- --------
Operating Result 169 835 914 2,072
============================ =========== =========== ======== ========
Net Result, Group share 101 629 459 1,494
---------------------------- =========== =========== ======== ========
Earnings per Share (in EUR ) 0.21 1.09(a) 0.96 2.87(b)
---------------------------- ----------- ----------- -------- --------
(a) taking into account an average number of 608.9 million of outstanding shares and excluding 29 million treasury shares over the period. (b) taking into account an average number of 557.6 million of outstanding shares and excluding 36.6 million treasury shares over the period. Net Financial Debt At EUR 2,372 million, net financial debt decreased by EUR 1,155 million at the end of Q3 compared to EUR 3,527 million at June June: see month. 30. Net financial debt accounted for respectively EUR 4,027 million at March 31, and 4,464 million at December December: see month. 31, 2003. The net debt-to-equity ratio debt-to-equity ratio The relationship between long-term funds provided by creditors and funds provided by owners. A firm's debt-to-equity ratio is calculated by dividing long-term debt by owners' equity. Both items are shown on the balance sheet. (including minority interests) decreased to 0.21 from 0.38 at June 30, 0.46 at March 31, and 0.55 at December 31, 2003. The impact of the capital increase (July 22, 2004) was EUR 1,136 million, out of which USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 415 million was cashed out for the acquisition of CST shares as of July 29. Cash-flow from operations amounted to EUR 1,847 million for the first nine months of the year to be compared with EUR 1,309 million for the first six months and 2,502 million for the full year 2003. This favourable evolution is explained by margin improvements and control of working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. , mainly through management of inventory levels despite price increases. Capital expenditures at EUR 821 million (intangible & tangible) remain in line with depreciation at EUR 805 million.
In millions of euros December June 30, September
31, 2003 2004 30, 2004
----------------------------------------- --------- -------- ---------
Shareholders' equity(c) 8,139(d) 9,271 11,136
----------------------------------------- --------- -------- ---------
Net financial debt 4,464 3,527 2,372
========================================= ========= ======== =========
Net financial debt/Shareholders' equity 0.55 0.38 0.21
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(c) Including minority interests (d) including residual negative goodwill Flat Carbon Steel Revenue for the Flat Carbon Steel sector at EUR 3,769 million compares to 3,165 million during Q3 2003 (+ 19.5% on a comparable basis). Shipments of finished products increased by 6.7% to 6,031 kt (essentially in the general industry segments) from 5,651 kt during the third quarter 2003. Shipments to the auto industry increased by 6% year on year. Average selling prices were globally up by 14.8% quarter on quarter (4.7% higher year on year) despite the price increases implemented both on second and third quarter 2004 for general industry, limited by the large amount of contracts with fixed prices. At EUR 507 million, compared to EUR 256 million for the third quarter 2003, gross operating result almost doubled, generating a margin of 13.5% compared to a 2003 margin of 8.1%. Sharp increases of raw materials starting on the second quarter had a strong negative impact on operating costs operating costs npl → gastos mpl operacionales offsetting the price increases achieved over the last nine months. A continuous cost cutting program (including synergies) as well as a favourable Euro/US dollar exchange rate barely helped containing the increase in the cost of inputs year to date. At gross operating result and operating result level, stated margin includes restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of EUR 90 million related to operations in Spain Spain, Span. España (āspä`nyä), officially Kingdom of Spain, constitutional monarchy (2005 est. pop. 40,341,000), 194,884 sq mi (504,750 sq km), including the Balearic and Canary islands, SW Europe. (ARCO ar·co adv. & adj. Music With a bow. Used chiefly as a direction to indicate the resumption of bowing after a pizzicato passage. Adj. 1. plan). Gross operating result for the nine months up to September 30th, 2004 amounted to EUR 1,391 million compared with EUR 1,099 million for the same period of last year. Operating result for the quarter amounted to EUR 348 million compared to 112 million for the same period of 2003 or respectively margins of 9.2% and 3.5%. Long Carbon Steel Revenues for the Long Carbon Steel sector reached EUR 1,644 million, compared with EUR 1, 064 million for the third quarter of 2003, +40.5% (on a comparable basis). Strong demand, essentially in Brazilian and Southern Europe Southern Europe or sometimes Mediterranean Europe is a region of the European continent. There is no clear definition of the term which can vary depending on whether geographic, cultural, linguistic or historical factors are taken into account. construction markets, contributed largely to this situation with increased shipments (3,275 kt compared to 2,932 kt for the same period in 2003). Those include additional shipments from the newly consolidated Acindar plant (Argentina Argentina (ärjəntē`nə, Span. ärhāntē`nä), officially Argentine Republic, republic (2005 est. pop. 39,538,000), 1,072,157 sq mi (2,776,889 sq km), S South America. ) and the recently acquired Pallanzeno Pallanzeno is a comune (municipality) in the Province of Verbano-Cusio-Ossola in the Italian region Piedmont, located about 120 km northeast of Turin and about 25 km northwest of Verbania. As of 31 December 2004, it had a population of 1,200 and an area of 4.4 km². (Italy). Gross Operating result increased to EUR 409 million against 141 million for the same period last year. Margins rose from 13.3% in 2003 to 24.9% in 2004. Higher prices, good cost control and the implementation of scrap surcharges on sections and beams, generally accepted since their introduction in November 2003, protected the sector against margin erosions due to strong increases of costs of inputs. Gross operating result up to September 30th, 2004 amounted to EUR 947 million compared with EUR 390 million for the same period of last year Operating result reached EUR 379 million or a margin of 23.1% compared to EUR 104 million, or a margin of 9.8% for the same period last year. Stainless Steel stainless steel: see steel. stainless steel Any of a family of alloy steels usually containing 10–30% chromium. The presence of chromium, together with low carbon content, gives remarkable resistance to corrosion and heat. , Alloys This is a list of alloys for which an article exists in Wikipedia (or is proposed but not yet written). They are grouped by base metal, in order of increasing atomic number. Within these headings they are in no particular order. and Specialty Plates Revenues for the Stainless Steels, Alloys and Specialty Plates sector were EUR 1,017 million to be compared with 916 million for the third quarter of 2003 (+26.8% on a comparable basis). Base selling prices were slightly up compared to the same period last year. Gross operating result, despite non recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. items of EUR -24 million, was EUR 51 million compared to zero for the third quarter last year essentially due to progress in cost reduction plans. Gross operating result up to September 30th, 2004 amounted to EUR 160 million compared with EUR 86 million for the same period of last year. The operating result came in at EUR 8 million for the third quarter of 2004, compared to a negative 42 million for the same period last year. Distribution, Transformation, Trading Revenues for the DTT DTT Deloitte Touche Tohmatsu (Deloitte & Touch Global Operations) DTT Dithiothreitol (cytology reagent) DTT Digital Terrestrial Television DTT Discrete Trial Training sector were EUR 1,905 million for the third quarter compared to 1,743 million for the third quarter last year, or an increase of 22.1% on a comparable basis, driven by excellent activity, increased average selling prices and improved costs. Gross operating result, at EUR 128 million (6.7% margin) represents an excellent performance and compares with 29 million for the same period last year (1.7% margin). In parallel, operating result amounted to EUR 106 million, or a 5.6% margin compared to 12 million (0.7% margin), for the same period last year. There was a positive inventory effect and all units performed very well. Gross operating result up to September 30th, 2004 amounted to EUR 375 million compared with EUR 120 million for the same period of last year. Revenue, Gross Operating Result and Operating Result by business sector
In millions of euros 3rd quarter 2003
-----------------------------------
Revenue Gross Op.
Op. Result
Result % %
--------------------------------- ------- ------- ----- ------- -----
Flat Carbon Steel 3,165 256 8.1% 112 3.5%
--------------------------------- ------- ------- ----- ------- -----
Long Carbon Steel 1,064 141 13.3% 104 9.8%
--------------------------------- ------- ------- ----- ------- -----
Stainless, Alloys & Specialty
Plates 916 0 0% -42 -4.6%
--------------------------------- ------- ------- ----- ------- -----
Distribution, Transformation,
Trading 1,743 29 1.7% 12 0.7%
================================= ======= ======= ===== ======= =====
Others 187 -8 n.a. -15 n.a.
--------------------------------- ------- ------- ----- ------- -----
Intra-Group -1,206 -2 n.a. -2 n.a.
================================= ======= ======= ===== ======= =====
Total 5,869 416 7.1% 169 2.9%
--------------------------------- ------- ------- ----- ------- -----
In millions of euros 3rd Quarter 2004
-----------------------------------
Revenue Gross Op.
Op. Result
Result % %
--------------------------------- ------- ------- ----- ------- -----
Flat Carbon Steel 3,769 507 13.5% 348 9.2%
--------------------------------- ------- ------- ----- ------- -----
Long Carbon Steel 1,644 409 24.9% 379 23.1%
--------------------------------- ------- ------- ----- ------- -----
Stainless, Alloys & Specialty
Plates 1,017 51 5.0% 8 0.8%
--------------------------------- ------- ------- ----- ------- -----
Distribution, Transformation,
Trading 1,905 128 6.7% 106 5.6%
================================= ======= ======= ===== ======= =====
Others 267 7 n.a -2 n.a
--------------------------------- ------- ------- ----- ------- -----
Intra-Group -1,450 -4 n.a -4 n.a
================================= ======= ======= ===== ======= =====
Total 7,152 1,098 15.4% 835 11.7%
--------------------------------- ------- ------- ----- ------- -----
Prospects Economic growth remains sustained since the beginning of the year and while some adjustments have been observed in Asia last summer, demand in China stays strong. Real consumption is expected to continue to grow during the next months as inventory levels can be considered normal. European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. spot selling prices for flat carbon steels continue to be lower than those achieved in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. despite price increases for the third quarter that aimed at aligning a·lign v. a·ligned, a·lign·ing, a·ligns v.tr. 1. To arrange in a line or so as to be parallel: align the tops of a row of pictures; aligned the car with the curb. prices to world levels. If this gap tends to narrow through additional price adjustments for the fourth quarter it is without negative consequences for volumes. Inventories remain at normal levels despite slight restocking. In a context of strong global demand and reduced imports into Europe and despite more attractive prices in US dollars, especially in North America, Arcelor remains committed to serve its historic European customers. Raw material and freight costs are expected to increase further starting from very high levels despite a possible volatility of apparent consumption next year. These increases should nevertheless be transferred, within the frame of long term contract renegotiations with the automotive, packaging and appliances industries. Thanks to the implementation of strong cost reduction programs, Arcelor takes the best advantage of the current economic environment and pursues its transformation. CST (Flat Carbon Steel, Brazil) will be fully consolidated as of October 1st, 2004, therefore confirming a first step of a larger exposure of the Group to higher growth areas. Arcelor is a leading force in the transformation of the global steel industry. With a turnover of 25.9 billion euros and shipments of 40.2 million tonnes of steel in 2003, the company is a major player in all its main markets: automotive, construction, household appliances and packaging as well as general industry. Arcelor employed 98,000 employees at the end of 2003 in over 60 countries. The company places its commitment to sustainable development Sustainable development is a socio-ecological process characterized by the fulfilment of human needs while maintaining the quality of the natural environment indefinitely. The linkage between environment and development was globally recognized in 1980, when the International Union at the heart of its strategy and ambitions to become a benchmark for economic performance, labour relations labour relations (US), labor relations npl → relations fpl dans l'entreprise labour relations labour npl → Beziehungen pl and social responsibility in the world of steel. This press release contains certain forward looking statements regarding anticipated market evolution and the future prospects of Arcelor. While these statements are based on the Company's best estimations as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" , actual results will vary as a function of market conditions, the action of competitors, consumer demand, steel prices, economic conditions and other factors. |
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