ArcelorMittal S.A. (MT) | The Buildout — AI Infrastructure
The Verdict
ArcelorMittal is one of the world's leading integrated steel and mining companies, the largest steel producer in Europe and among the largest in the Americas, with a growing presence in Asia including India through its AMNS India joint venture. It makes semi-finished and finished steel — slabs, plate, hot- and cold-rolled coil, galvanised sheet, bars, rails, pipe and tube — and sells to a diverse customer base in about 126 countries. Its link to the AI buildout is indirect: electrical steels, heavy plate and other steels used in power generation, transmission and grid equipment. The source material discloses no AI-specific revenue, segment or capital spending, and the AI-exposure assessment calls the exposure embedded or second-derivative at most.
| Market Cap | — |
| Revenue (TTM) | $62.8B |
| Revenue Growth | +3.6% |
| EBITDA Margin (TTM) | 9.2% |
| Net Debt | $9.5B |
| Earnings Beats | 5 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Group EBITDA per tonne rose from $131 in Q1 FY2026 to $155 in Q2 FY2026, and Europe reached $98 per tonne, a three-year high — before the tariff-rate quota took effect on 1 July 2026.
- CBAM has been in place since 1 January 2026 and the EU tariff-rate quota since 1 July 2026; management says the results do not yet reflect the TRQ benefit.
- On the 20-F figures of about 74.6 Mt of achievable crude steel capacity against 55.6 Mt produced (41.2 Mt BOF plus 14.4 Mt EAF), roughly 19 Mt of capacity sits unused, and each European furnace is described as 2-plus million tonnes. The full European blast-furnace suite runs from Q3 2026.
- The strategic-project target was raised from $1.6bn to $1.8bn of incremental EBITDA from 2026 onwards, reflecting Dunkirk together with the previously announced EAF projects in Sestao and Gijón.
What We’re Watching
- Q3 2026 shipments are guided stable to higher than Q2, which management calls counterseasonal against Q3-versus-Q2 declines of mid-to-high single digits in both 2024 and 2025. It tests whether the EU tariff-rate quota is displacing imports.
- About 10 Mt of iron ore must ship from Liberia in H2 2026 to reach the 18 Mt guidance, after rainy-season delays; management says the port, rail and infrastructure are in place.
- After saying on the Q1 2026 call that it was 'close to restart' buybacks, management gave no specific buyback update on the Q2 2026 call.
- A writ of summons from Acciaierie d'Italia's Extraordinary Commissioners is disclosed as a 20-F subsequent event; the source material gives no amount, provision or management view. Net debt was $9,523M at 30 June 2026.
The thesis is strengthening on the operating side and unproven on the policy side. Group EBITDA per tonne rose from $131 to $155 between Q1 and Q2 FY2026, Europe reached a three-year high of $98 per tonne, and management says those figures do not yet include the tariff-rate quota benefit that took effect on 1 July 2026. Against that, European real demand is described as stable rather than recovering, reported free cash flow is negative, and the U.S. Section 232 headwind of roughly $150M per quarter is unchanged, with no tariff relief today. The open question is whether the policy benefit reaches realised European prices — management has declined to give a European margin target.
Earnings Beat
ArcelorMittal reported Q2 FY2026 revenue of $16,761M against $15,457M in Q1 FY2026, with EBITDA of $1,835M and a 10.9% EBITDA margin; gross margin was 6.3%. On management's own per-tonne measure, group EBITDA was $155 per tonne, up from $131 in Q1, and European EBITDA was $98 per tonne, a three-year high. Management said the quarter's results do not yet reflect the benefits of the EU tariff-rate quota in force since 1 July 2026.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $16.8B | $15.5B | $15.9B | +5.2% |
| Gross margin | 6.3% | 9.7% | 100.0% | -9370bps |
| EBITDA | $1.8B | $1.5B | $2.6B | −30.2% |
| EPS | $0.89 | $0.75 | $2.33 | −61.6% |
| EBITDA per tonne (company measure) | $155/t | $131/t | n/a | — |
| Europe EBITDA per tonne | $98/t | $70/t | n/a | — |
Importantly, these results do not yet reflect the benefits of the new TRQ trade tool, which are becoming increasingly evident.— Genuino Christino, Group CFO, 2026-07-30
Management tone: Management moved from describing the EU tariff-rate quota as an expectation on the Q1 2026 call to describing its benefits as 'increasingly evident' on the Q2 2026 call. It confirmed European blast-furnace restarts in Spain, Poland and France and said the full European suite runs from Q3 2026. It also described European demand as stable rather than recovering, deferred DRI as not part of its near-term plans, and gave no specific buyback restart update after the Q1 call's 'close to restart.'
Management Guidance
For 2026, management guides iron ore shipments of 18 Mt, with about 10 Mt to ship in H2, and positive free cash flow 'this year and beyond.' It guides $700M of strategic-project EBITDA in 2026 — $300M captured in H1 and $400M expected in H2 — toward a $1.8bn target from 2026 onwards. For Q3 2026 it guides steel shipments stable to higher than Q2 and sequential EBITDA improvement in all steel segments, with higher shipments and higher average selling prices partly offset by higher carbon costs.
Trajectory
Revenue has risen for two consecutive quarters, from $14,971M in Q4 FY2025 to $15,457M in Q1 FY2026 and $16,761M in Q2 FY2026. EBITDA followed, from $1,183M in Q4 FY2025 to $1,502M and then $1,835M, with the EBITDA margin moving from 7.9% to 9.7% to 10.9%. The code-computed signals call revenue accelerating and operating and EBITDA margins expanding while gross margin compresses. Management attributes the improvement to trade policy and reduced imports, not to demand, and says the tariff-rate quota benefit is not yet in the numbers.
The Model
The model projects FY+1 revenue of $66,400M and EBITDA of $7,370M, an 11.1% EBITDA margin, then FY+2 revenue of $69,000M and EBITDA of $8,280M, a 12.0% margin. The near-term anchor is the price and mix recovery management attributes to European trade policy, plus the $700M of strategic-project EBITDA guided for 2026. FY+2 depends on those projects converting further: the Calvert first EAF reaching full capacity later in H2 2026, Mardyck electrical steels completing by the end of the year, and the Liberia and Serra Azul expansions completing in 2026.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $61.4B | $66.4B | $69.0B |
| YoY Growth | — | +8.2% | +3.9% |
| EBITDA | $6.6B | $7.4B | $8.3B |
| EBITDA Margin | 10.7% | 11.1% | 12.0% |
Projections are the median of 5 independent model runs. The model’s revenue sits 0.5% above analyst consensus.
For 2026, management guides iron ore shipments of 18 Mt, with about 10 Mt to ship in H2, and positive free cash flow 'this year and beyond.' It guides $700M of strategic-project EBITDA in 2026 — $300M captured in H1 and $400M expected in H2 — toward a $1.8bn target from 2026 onwards. For Q3 2026 it guides steel shipments stable to higher than Q2 and sequential EBITDA improvement in all steel segments, with higher shipments and higher average selling prices partly offset by higher carbon costs.
What Could Go Right — and Wrong
- Realised European prices reflect the CBAM and tariff-rate quota benefit management says is not yet in results, lifting Europe EBITDA per tonne above the $98 reached in Q2 2026.
- Slabs are added to the EU tariff-rate quota, which management says is 'probably just a question of time,' removing a possible import-parity ceiling on European prices.
- U.S. Section 232 relief arrives, reducing the roughly $150M per quarter headwind and improving the economics of a second Calvert EAF.
- Strategic-project EBITDA lands at the guided $700M in 2026, and management says there is more to come.
- Sustainable Solutions closes the gap from a run rate above $500M to the $750M medium-term target, and India grows from a run rate of about 8 Mt toward the 40 Mt per annum long-term plan.
- The tariff-rate quota benefit never reaches realised prices and import parity sets European pricing in a region that was 47% of segment sales in 2025.
- Carbon costs rise faster than the fixed-cost absorption management says will more than outweigh them as European furnaces restart, and the 2030 emissions target stands at −10% from −30%.
- Project execution slips together: Calvert first-EAF full capacity, Liberia's roughly 10 Mt H2 shipment requirement, Gijón completion and the Dunkirk build land in overlapping windows.
- The ADI writ of summons disclosed as a 20-F subsequent event — unquantified in the source material — sits against a balance sheet with $9,523M of net debt and $4,898M of cash at 30 June 2026.
- Reported free cash flow stays negative — trailing-twelve-month free cash flow is negative $1,921M — and the buyback restart stays silent after the Q1 2026 signal.
Looking Ahead
Over the next twelve months the tests are operational and policy-driven. All European blast furnaces are running from Q3 2026, and management guides counterseasonal Q3 shipments and sequential improvement in every steel segment. The Calvert first EAF is guided to full capacity later in H2 2026, Mardyck electrical steels is due to complete by the end of the year, and the Liberia and Serra Azul expansions complete in 2026. Policy questions sit alongside: whether slabs enter the EU tariff-rate quota, whether U.S. Section 232 relief arrives, and whether China restructures capacity — a line management added to its presentation without giving timing.
- Q3 2026Q3 shipments versus Q2 — Tests the counterseasonal guide and tariff-rate quota import displacement.
- H2 2026Calvert EAF full capacity — First electric-arc furnace guided to reach full capacity later in H2.
- H2 2026$400M project EBITDA — Second-half capture toward the strategic-project target.
- H2 2026Liberia ships 10 Mt — About 10 Mt needed in H2 to reach the 18 Mt guidance for 2026.
- End of 2026Mardyck electrical steels — €500M electrical-steels unit set to complete by the end of the year.
- Medium termSustainable Solutions $750M — Run rate already above $500M EBITDA; medium-term target.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $62.4B | $61.4B | $62.8B | -1.7% |
| Gross Margin | 32.4% | 32.0% | 8.5% | 40bps |
| EBITDA | $6.0B | $6.6B | $5.8B | +10.0% |
| EBITDA Margin | 9.6% | 10.7% | 9.2% | +114bps |
| Net Income | $1.3B | $3.2B | $1.8B | +135.4% |
| Free Cash Flow | −$530M | −$1.3B | −$1.9B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)8.5%
- EBITDA Margin (TTM)9.2%
- Net Margin (TTM)2.9%
- ROIC3.3%
- FCF Conversion-33.1%
- SBC / Revenue0.0%
The Company
ArcelorMittal is one of the world's leading integrated steel and mining companies. The 20-F describes it as the largest steel producer in Europe and among the largest in the Americas, with a growing presence in Asia including India through its AMNS India joint venture. It produces semi-finished flat products such as slabs, finished flat products including plates, hot- and cold-rolled coils and galvanised sheet, semi-finished and finished long products such as blooms, bars, wire-rod, rails and sheet piles, seamless and welded pipe and tube, and iron ore in lump, fines, concentrate, pellet and sinter-feed forms. It sells primarily in local markets to a diverse customer base in approximately 126 countries. In 2025, steel sales were $52,950M of $61,352M of total revenue.
The company is vertically integrated, from iron ore mining through to finished steel, and reports five segments: North America, Brazil, Europe, Sustainable Solutions and Mining. In Europe it is the largest producer in the region, and it ran its full suite of blast furnaces from Q3 2026 after restarts in Spain, Poland and France; each of those furnaces is described as 2-plus million tonnes. In North America it is ramping a first electric-arc furnace at Calvert, Alabama, has a second in detailed engineering and is developing a non-grain-oriented electrical steel unit there. In Brazil it runs all its furnaces at full capacity with a long slab position including Tubarão. Its AMNS India joint venture runs at about 8 million tonnes with a long-term plan of 40 Mt per annum, and its Mining segment includes Liberia, where 2026 shipments are guided at 18 Mt.
Business Segments
Competitive Landscape
Management describes the competitive dynamic as one of increasing regionalisation: markets are becoming more regional, supported by trade measures that promote domestic production, which management says aligns with ArcelorMittal's model of local production to serve local demand. On slabs, management calls its position 'unique to ArcelorMittal,' citing high-quality slabs including Tubarão and the flexibility to move them between regions. Beyond that, the source material treats steel as a commodity position in a regionalised market, where trade policy rather than product differentiation does the work in the 2026 earnings story.
- Cleveland-Cliffs (CLF)Listed as a competitor in cold-rolled and galvanised sheet and heavy plate. A documented slab supply contract between the two ended; Cleveland-Cliffs said the expiration of an 'uneconomic slab supply contract' with ArcelorMittal was one of three factors that had materialised.
- Nucor (NUE)Named in filings as a competitor in flat-rolled steel and heavy plate; also mapped as an inferred supplier of cold-rolled and hot-rolled plate to ArcelorMittal.
- Gerdau (GGB)A documented competitor quote describes the main Gerdau competitors in the long-steel segment as ArcelorMittal, Simec, Sinobrás, Aço Verde do Brasil (AVB) and CSN. Gerdau also says Brazil imports remain high and Ouro Branco is structurally mismatched.
- thyssenkrupp (TKA)Listed as a competitor in heavy plate and specialty steels; jointly called with ArcelorMittal and voestalpine for 'pragmatic ETS reform,' warning that current rules risk destroying Europe's industrial base.
- voestalpine (VOE)Listed as a competitor in heavy plate and specialty steels; joined the same joint call with ArcelorMittal and thyssenkrupp Steel on ETS reform.
Supply Chain
ArcelorMittal sits in the middle of the steel chain: it buys seaborne iron ore and metallurgical coal from named miners, makes steel in owned mills, and sells to industrial and infrastructure customers. No named customer buys a product the source describes as AI-specific.
Related companies
See all Construction companies → · How this layer works: Chapter 4, The Building →
More on MT: Earnings recap