Morgan Stanley | Arcelor’s conference call focused on the outlook for the business, on Q4 results, on the dynamics of the working capital and returns on capital. Our economist Alain Gabriel highlights the following issues:
- The problems surrounding demand are worsening due to a persistent de-stocking in Europe, which Alain expects to further exacerbate in Q4.
- EBITDA 4Q: fewer deliveries and lower prices are offset (partly) by lower variable costs.
- Energy coverage and the impact on costs: the company has already fixed a large part of its energy consumption in Q1/Q2 at competitive prices.
- Arcelor expects an increase in working capital in Q4, but did not provide any details on the size. With regard to the distribution to shareholders, the company is aiming to maintain its buybacks programme.
- Changes in CAPEX guidance. The firm reiterated that it is not making changes to its strategic investments. These include spending on decarbonisation, although it will offer more clarity on 2023capital spending with the Q4 results.
