Good afternoon, and good morning, everybody. Welcome to ArcelorMittal's Third Quarter Analyst and Investor Call. This is Daniel Fairclough from the ArcelorMittal Investor Relations team. I'm joined on this call by our CFO, Genuino Christino. Before I hand over to Genuino, I would like to mention a few housekeeping items.

Firstly, I want to refer everybody to the disclaimers that are on Slide 2 of the results presentation that we published on our website this morning. I'd also like to remind everyone that this call is being recorded and it's scheduled to last up to 45 minutes.

Finally, if you would like to ask a question, then please do press star one on your telephone keypad, and we will answer the questions in the order in which they received. With that, I would like to hand over the call to Genuino for some opening remarks..

Thank you, Daniel, and thank you, and good afternoon, everybody. I will make some very brief remarks before we move to your questions. I have basically three main points to make. Firstly, on the current market situation. So, real demand headwinds are being exacerbated by destocking through the value chain.

The destocking impact on the apparent demand is very significant, but we know from experience that it won't last. This gives us confidence that the apparent demand conditions will improve once the destocking phase reaches maturity. My second point is on our response.

We are responding effectively by adapting our capacity for quarter four and reducing fixed costs on the impacted tonnes. At current spot levels, variable costs and by that, I mean, raw materials and energy on a per tonne basis are expected to decline in Q4.

The improvements we have made in recent periods are being tested by this difficult market environment, but results should demonstrate that our business is stronger and more resilient. My final point is on the outlook. Significant cash has been allocated to working capital investment in recent quarters.

This is now at peak, we believe, and the expected working capital unwind should support free cash flow in a lower EBITDA environment.

Our balance sheet strength and expectation of consistently positive free cash flow underpin the continued execution of our strategy to grow and develop the business to be a safe leader in low carbon and steel and capture the growth opportunities in faster growing markets. With that brief opening, we are now ready, Daniel to take the questions..

Great. Thank you, Genuino. We will take that for the first question, please, from Alain at Morgan Stanley..

Thanks, Daniel. Hi, Genuino. Thank you. Two questions from my side. The first one is on the profit bridges for Q4.

So besides the price indicators that we can see on our screens, what are the less obvious moving parts that we need to consider if we're thinking about the EBITDA bridges into next quarter? And perhaps an overview by division would be most helpful. That's my first question. Thank you..

Thank you, Alain. Alain, I think as I see quarter four right now, we're going to continue to see, to some extent, some of the same factors that we saw in quarter three. Probably the most important aspect of the quarter will be the destocking that we expect will continue and probably accelerate.

As a result, we will continue to see shipments being at the reduced levels that we saw in quarter three. On a divisional basis, we should be slightly lower in Europe and not really much, but slightly low in Europe. And in the other divisions, my expectation is that we're going to be relatively flat, which I think it's a good sign.

So prices, we know spot prices have declined during the quarter. It will impact our realized prices in quarter four. But more on the positive side, of course, raw materials are also coming down. We saw iron ore prices down. We saw our coking price is quite significantly down during quarter three.

And in Europe, as we know, energy prices have come down quite significantly from big levels that we saw in August. So that should help profitability, of course, in Q4. And then, of course, we have to see what happens beyond that. It has been very volatile. We have seen, as you know, price is reaching at big levels.

Yes, price is more than €350 per megawatt. And during a few days recently, we saw prices as low as €7. So we'll see. But we have a combination of destocking impacting the apparent steel demand. And I would also like to say that in Europe, the real demand up to Q3 has actually been okay, has not really been the problem.

The problem has really been the destock that really started in Q3, and we expect to accelerate in Q4. I will stop here and see if you have any follow-ups..

Thank you. That's my first question. The second question is on working capital and capital returns.

If we assume that the current spot prices persist, how much do you think you will be able to release in working capital in Q4 and throughout the balance of next year, out of the €10 billion that you built? And if your free cash flow consisted entirely of working capital release next year, would that give you enough confidence to continue your buyback program after May?.

Yeah. On working capital, I mean, for sure, our expectation is to release working capital in quarter four. And actually in quarter three, looking only at inventories, we have destocked as well.

The only reason why you still see an investment in Q3, is because the loss in payables was greater than the reduction in inventories, which is natural when you are at this point of the cycle where we are adjusting production, as you know, adjusting also our procurement, purchases. So we have that initial impact on payables.

And then moving into quarter four, our expectation is that we will see significant release of working capital. And then in 2023, I think based on what we know today, looking at all the key lead indicators that we have, I think it's a fair assumption that we're going to also be releasing working capital in 2023.

I think it's early days to say to try to quantify how much. But you know very well. So up to now, in the last seven quarters, we have invested $10 billion, so that is there. It's money that it's on our balance sheet.

And if market conditions remain challenging and we are in an environment of lower prices, then I think it's a fair expectation that the company will release our working capital next year should provide a good cushion to free cash flow as we have been saying consistently. And our intention is to keep our capital allocation policy.

So to the extent that we generate the free cash flow next year, then I think you should expect that the company will just continue apply a policy that’s so far we see has been very successful..

Thank you..

Thanks Alain. So we'll move to the next question please from Tristan at BNP Paribas. Go ahead Tristan..

Yes, hi. Thank you for taking my questions. Maybe the first one, I think, pushing a bit on the guidance. Last time during COVID, we also had volumes falling significantly in a high level of uncertainty. And at the time you provided some helpful EBITDA guidance range.

Is there may be a range you could share for Q4, or maybe if you could tell us if you feel comfortable with current consensus for the full year at $14 billion? Thank you..

Yes, I think as you know, we don't really provide that quantitive guidance for EBITDA, the circumstances are very, very different. I don't think we can compare what we have today, what we had back in 2020. So, I will not be running to providing very specific guidance, sorry for that..

All right. Fair enough. So, the second question maybe on the Kazakhstan operations. First, can you give us an update on the situation. I've seen in the release that volumes have picked up.

So, how is the split between profitability between Ukraine, Kazakhstan South Africa in Q3? How you expect moving that forward? And more long-term question, given your focus on sustainability and safety and especially now given the context in the CIS region, how do you view your operation in Kazakhstan? How strategic are they? And is the objective to invest more there, or at some point, maybe consider other options? Thank you..

Yes. So, I would say that the Kazakhstan operations did well. We had a good quarter. So, we have basically in terms of the order book, in terms of production, the company was able to achieve its goals. So, we had a good quarter performance from a shipment point of view, profitability point of view, exporting materials from out of Kazakhstan.

Ukraine, unfortunately, the situation, even though on the ground, nothing has really changed. The office continues to be safe, our people continue to be safe. As we know, market conditions have deteriorated. We are facing more now blackouts in terms of power availability.

But we continue to run the operations at a reduced capacity still running on blast furnace at about 20% of the capacity. And so far, also recovering from some of the labor issues that we faced in quarter two. So, I would say that stability in Ukraine and improvement in Kazakhstan and South Africa.

Regarding the strategic importance of Kazakhstan, I think we are investing. We have been investing, and we will continue to invest to bring this facility up to the mark.

There are challenges, of course, but we believe that with the energy that the team is put on this, the investments behind, we're going to be able to bring this facility to the level that it has used to be..

Okay. Thank you..

Thanks Tristan. So, we'll move to the next question, please, from Myles at UBS. Go ahead Myles..

Thank you. Maybe just a couple of things.

First of all, on order books, how weak are they? As you look into 2023, what's the best case in terms of the length of this destocking as you look at the market today?.

Myles, the order book is -- it's okay, taking into account our forecast for the apparent steel consumption, right? Of course, they are not as high as they were before, but in line with our expectations for apparent steel consumption that, as we discussed, it's going to be, again, weak as a result of the destocking.

Now the duration is really, very hard to say when it ends. In our view, it really started in Q3 already. It's visible in Q3, of course, and especially in Europe. So we believe that probably we are going through the worst of the destocking now in quarter four.

So I think the teams are hopeful that we can start to see some improvement in terms of at least closing the gap between the apparent steel consumption and real demand from quarter one onwards. But again, it's very hard, we need to be precise on that..

Okay. That's helpful. Maybe just on the iron ore side, a couple of things we could clarify. What's the latest with the Liberia expansion, now that iron ore prices have fallen, does that become a more marginal project? And then also, when we think about Ukraine, I presume there is no temptation to export iron ore, while the blast furnaces are down.

But I just wanted to double check that, that was the case..

In Ukraine, start with your second question. In Ukraine, we have been operating the mines, so they were stopped during quarter three for some time, more really to help with the cash flows and destock. The mine is running again. So we are running at about 30%.

And this iron ore, what has not been consumed locally then it's been transferred to our operations in Poland, primarily. So that has been the case already now for quite some time.

And Liberia, as you can imagine, when we run these projects, our long-term assumptions are quite conservative, right? So we never really – we will see what happens, but we don't run our -- when we go through the approval process for the -- for these projects, we have a very conservative assumption.

So what we are seeing now in the market, prices are not coming down, it doesn't really change the prospects for this project. We continue to see it quite strategic for us. We have invested, as you know, heavily on the infrastructure in the past. So it just makes sense to complete this project as fast as we can..

Okay.

But when is the best case in terms of seeing the new tons ramp up?.

Well, we are -- so we are on target with our – for the first phase. It's 2024, I believe. So then you can double check here for me, but I think it's Q4 2024..

Thank you..

Daniel? We can double check, Myles..

Okay. Thank you..

Sorry, I was just mixing my papers up there. But in the meantime, we'll just move to the next question from Patrick at Bank of America. Please go ahead, Patrick..

Thanks, Daniel. Hi, Genuino. Two questions, please. The first is just about the inventory charges that you've taken out of EBITDA.

Can you just talk about the thinking of what adjusted EBITDA? Can you just talk about the thinking there because it kind of feels then that we're only counting positive margin sales in the EBITDA, right? Because we write down inventory taken out of adjusted EBITDA, put it in as an exceptional item.

And then when you sell then for recoverable value in the fourth quarter, it's going to come through at sort of zero margin or maybe slightly positive margin. So is that the right way to treat that amount? And then the second question is just on working capital. I think as a follow-up from Alan's question. So we've spoken about the $10 billion build.

I mean is that all excess or high working capital because prices and volumes were good. I mean how much of that 10 billion should we expect to reverse in short? Is it the full $10 billion, or is there a portion that's kind of structural? Thanks..

Yes. Patrick, first one, on the inventory write-down. I think what we are trying to do, and this is consistent what we have done in the past when the cycle turn as it is the case now.

And IFRS, you have to basically mark your inventories at cost or net realizable values if that's net realizable very slowly, right? So at the end of the quarter when we have this significant change, we go through all of our inventories and basically even raw materials, we convert that into finished goods and then we look at the prices that we believe we're going to be able to sell.

And to the extent that we believe that we're not going to be able to recover the cost of inventory, then we write it down. We have these evaluations. So that's really what happened this quarter. And so it doesn't really belong in the operations of quarter three.

And that's why and given the size, we are showing it separately so that you guys can have a good sense of the true underlying performance of the business during the quarter. And then going forward, you are right.

So to the extent that we were right with our assumptions in terms of prices, then these tons, when we sell it, they will have zero contribution to our EBITDA going forward..

I suppose the point is that if we only did this at the end of the year, right your EBITDA would be $500 million less. But writing it down now and then excluding it from EBITDA and then selling it at zero margin next quarter. It never goes through EBITDA, if that makes sense.

But yes, I mean, I understand what you're saying in terms of write-downs are typically exclude it.

So -- and just on the working capital, the quantity to expect to reverse?.

Well, I think a lot of the investments that were made as a result of the higher prices, selling prices, raw material prices. And in terms of volumes, quantities are relatively limited, Patrick.

So my expectation is, given where prices are and my expectation is that we should be able to recover a large majority to the $10 billion as we move as we move into 2023 and beyond..

Got it. Thank you. Those are my questions. Thanks..

Thank you..

Thanks, Patrick. So we'll move now to Tom at Barclays..

Good afternoon, guys. Thanks very much for taking our questions. The first one, just a sort of slight follow-up to Patrick, on the inventory write-downs. I'm slightly surprised that there weren't any taken in -- especially the US, but to an extent, also ASUS in Brazil, given spot prices have been pretty weak in those areas as well.

Is that a risk of further write-downs to come in Q4, or were those just not large enough for you to report as an exceptional item and actually those are included in the EBITDA numbers. That's my first question..

So I think that's a good question, and I think it shows the change, because if you look back in previous cycles, when we also had to take rebel inventories, you're right, at that point in time, we had also large amounts of revaluation in NAFTA, primarily because of oUS business that, as you know, we sold, if you look at the profitability of the businesses in NAFTA in Q3, you see that it's different from what we enjoyed in Europe, in Brazil as well.

And we have to -- I hope it's clear that in Europe, that's really where you have the very high energy costs. So costs are higher you don't really have the same issues in some other parts of the world. So that's why you really see this being in Europe and not in some other parts of the group.

Can we have more right now this is our best estimate, right? So we would need to record more write-downs only to the extent that selling prices continue to move down. So we'll see. But for now, this is our best estimate..

Right. Okay. So there might be some in there, but it's not reported as exceptional, because if I sort of look at ASUs, for example, I see a similar issue, but – in any case, maybe just moving on to the US business.

I mean, you mentioned earlier, you see volumes stable in all areas except Europe into Q4, which is kind of surprising from my side, if I look at your slides, let's say, US flat apparent fuel consumption down 10% year-on-year for H2. And I mean, your Q3 shipments were still okay up a little bit year-on-year.

So, that my very rough math implies sort of down 15% to 20% decline in NAFTA shipments for Q4, which is obviously not what you were saying earlier. I mean, are you taking market share from other mills in –.

Perhaps just to clarify. So, when I say relatively stable, saying quarter-on-quarter....

Yes..

Right. So quarter-on-quarter, our expectations that shipments in NAFTA should be relatively stable. Just keep in mind that we have different businesses in NAFTA. So we have our Mexican operations, Canadian operations, right? So our expectation is relatively stable volumes there as it is also the case in Brazil and also in CIS..

Right. But if I just say, stable NAFTA shipments in Q4, that means it's up 4% year-on-year, and you're saying the US will be down 10% in terms of steel consumption.

So is that you taking market share, or are you saying Canada and Mexico is going to be stronger? How do I fit those two statements together?.

Yeah, I think that's the case. So our expectation is to do a little bit better in Mexico, Canada. And yeah, so that's – so I would not suggest that we are taking market share, but I think we will be doing that in some of the other parts of the business..

Okay. Thank you. I'll turn it back..

Thanks, Tom. So we'll move to the next question from Rochus at Kepler..

Yes. Hi. Good afternoon. Thanks for taking the questions. A couple from my side. One is on your remarks at the beginning about -- that there will be, maybe, early next year a point -- where from where apparent steel demand could trend better when the destocking is complete.

When we look at the whole year of 2023, and we think about a reversal of working capital for stock movements against the decline in real demand, I would like to see what your view is on the moving parts on net imports in Europe? We have been seeing structural decrease in exports over the last decade and also, kind of, growth in imports over the last 10 years.

So what would you -- what is your thinking from where you know now how net imports are most likely trending in 2023?.

Yes. But I think that's a good question, Rochus. And, as you know, we have seen imports rising in Europe, right, taking more market share from domestic mills. And probably one of the reasons we were -- of course, the selling price premiums in Europe were high as a result of the strong demand that we enjoyed for most of the last two years.

More recently, we have seen a decline in imports, which pretty much is the function of the arbitrage that existed for importers, they’re basically disappeared, right? So when you look at Asian prices and you add all the logistic costs to get the materials into Europe, then I think that the incentive for imports are greatly reduced.

So that is -- that's how -- what we are seeing right now. So we'll see how it evolves, but that's the dynamics that we are seeing right now..

All right. And linked with that, what -- how should we think about the impact of energy costs? Would that, overall, lead to somewhat higher prices in Europe, or shall we assume that, if that persists next year and beyond that industry margins will be overall lower..

Well, I mean the -- Rochus, as you know, the energy crisis, call it, it's really a European phenomenon right now, right? So -- and the whole industry in Europe is exposed to the same dynamics, some mills more than others. And that's why you see the industry as a whole responding.

And if you look at the data in September, you can see that there is a significant reduction in production in Europe. So the industry is responding to that. And that's probably also an important factor here, because I think the market will start to see more the impact of the cuts going forward.

So that should also help in terms of rebalancing supply to demand. Right? So I don't really want to speculate, because as we were discussing, the spot prices for natural gas, at least for some time, were extremely low.

When you look at the average prices that we have right now in Q4, prices are, of course, not yet back to far from levels that we had back before the war, but it has come down quite a lot, right? So we'll see what happens next year. But I think this is not specific to any particular company. It's an industry problem.

It's -- I would even say, it's a European problem. And it's something that we believe that the governments will need to address. I think it's extremely important for the industry, not only for the steel industry but for the entire industry in Europe..

Okay.

And yeah, on -- can you know, just -- if I got that right, what you said before, technically, when -- during the signs of higher energy costs, when you put steel on inventory, it means the higher energy costs are baked into the cost valuation in your books in the end of the day, yeah?.

Correct. Correct..

Okay..

Yeah. So the revaluation, it's always done, because taking to account everything fixed costs, everything. So it's the full EBITDA cost..

Okay, great. Thank you..

Thanks, Rochus. So we'll move now to Bastian at Deutsche Bank. Go ahead, Bastian..

Hi. Thanks. Good afternoon all. I just only have two quick questions, please. Just first of all, on volumes and also your volume outlook, from what I understand, you take out another blast furnace and force in France, if I understand that correctly, that will happen towards the end of the fourth quarter.

And then, I would obviously suggest that you expect Q1 to be potentially flat or worse. And if I understood you correctly, you're expecting de-stocking to ease in the first quarter.

So I'm wondering, could you maybe help us to reconcile this? Are there any plans, that you may actually bring back capacity at other places? That would be my first question..

Yeah. No, Bastian, we -- I think it's important also to put in perspective, right? So the -- some of the finances that we brought down, I think there is a combination here of maintenance that would happen regardless. So that's the case of one of our finances in Idling that is down for about six weeks.

So that financial will be back towards the end of end of the quarter, right? And then, some of the other Idling finance, it's really as a response to the current very weak apparent steel demand that we are seeing.

And we are also doing it, to some extent, to control and make sure that we don't end up ourselves with more inventories than what we needed.

And the company as a company, we will retain a lot of flexibility because we can bring back the finances relatively quickly in case our expectation of better parent steel consumption of demand next year really materialize. We're going to be in a position to do that.

I think what is important and the message is that we are also, of course, focused on making sure that we retain our market share. So I would not like in this call that you guys walk away with the idea that we are taking more pain than the rest of the industry. So a lot of focus on making sure that we retain our market share..

Okay. Thank you. Thanks for clarifying. Then my second question is on CO2 certificates. If we look at your shipment volumes, they've obviously been trending weak already. And then, I guess, with your production cuts, you will potentially be left with some excess CO2 certificates.

Just to confirm, do you hold on to any excess allocations here, just given the relevance of those, also for, I guess, the next couple of years or have been -- as you’ve been possibly selling some into the market as you used to do at some point over the last couple of years..

Bastian, what we have been doing and that was also done last year. So the business -- as we know, everybody is short in Europe, right? So companies have different hedging strategies, different hedging books, we have ours.

And last year, what we did was, every quarter, depending on the shortage; we were just going out and buying the certificates for -- to cover that shortage. And that's exactly what we continue to do this year. So on a quarterly basis, we measure, we see, what is the shortage, we go and buy. So we are not touching on our hedging position.

We have been, to some extent, lucky because, as you know, given the volatility with the energy markets, the new prices have come down. We took advantage of that. So I think we had -- we are achieving this year a relatively good average price for CO2 to cover the shortage of the year. But that's it..

Okay. Thank you..

Thanks, Bastian. So we'll move now to the next question from Max at Oddo. Go ahead, Max..

Yes. Good afternoon. So, I think, the question was already partly answered, but some clarification is always helpful, I guess. So it seems that you are much more aggressive than your competitors in terms of curtailing capacity. Also, big players in Europe have not announced such plans to multiple furnaces.

So, yes, isn't there the risk that you, I mean, decline now much more significantly in the quarters ahead than competitors? And isn't there a risk to that you're late on any potential upturn in demand? And related to that, how much time would you need to bring back those idled furnaces back into operation if demand picked up.

So that would be my question..

Max, I mean, as I was saying, the organization is, of course, focused on matching production to demand, focused on maintaining our market share, right? And then when you look at the production that for September for Europeans, you can see that on average, September was down by about 17%, and that's what we are guiding also for quarter four in terms of production cuts.

So I think the industry overall seems to be -- again, I cannot speak for the competition. But looking at that, it suggests that the industry is doing the same. There can be different types of announcements.

In our case, given the size of the operational footprint, we have the flexibility to bring down entire furnace, and then work on reducing the associated fixed costs. And if you don't have the flexibility, then you can run your tools at lower levels without necessarily bringing it completely down.

So, I think that's probably what is happening, looking to data that is available. So I think we're going to be in a position to continue to service the market primarily and again, very much focusing on our market share..

Okay. And just going back to your CapEx guidance, it has been significantly trend down from $4.2 billion to $3.5 billion. So excluding FX that is $0.5 cut.

So I mean can you give a bit more specific on the delays you have identified in your presentation? And what's the share of these delays in explaining the revised guidance? I mean the downward adjustment versus some, I mean, voluntary cuts that you're undertaking due to the more difficult background?.

Yeah. Thank you, Mark. I think that's a very good question. And I think the first message is that we are not changing or slowing down any of our strategic CapEx. Given the -- in my opening remarks, I was making the comments on strength of the balance sheet. So the change to our CapEx forecast or guidance, it's really linked to mostly timing, really.

I mean you talked about the FX. There is an FX component here, and that's about €200 million that we have identified. And as we know, we have seen significant FX streams during the quarter. So it's more timing. It's really about ability to mobilize contractors. But I think we are gaining speed, and that's why you see our guidance for quarter four.

There is an acceleration. We are guiding for about €1.5 billion to be spent in Q4. And then when you look at the second half of 2022, we are giving us an indication that it's probably a good number for 2023.

Of course, we are in early stage of our budget cycle, and we will provide more clarity and guidance on 2023 CapEx as we report results -- Q4 results, but I think that is a good reference at the moment. So some of the reduction in strategic CapEx, it's really spread out in some projects. In Brazil, we faced some delays in Monlevade and Serra Azul.

Again, as I've said, mobilization of contractors primarily and also in our project in India. But we don't believe that it should cause delays at this point in time. We are assessing that, but we believe that we should be able to catch up..

Okay. That’s great. Thank you..

Thanks, Max. So we'll move to our last question, actually which is from Moses at JPMorgan. Go ahead, Moses..

Hi. Thank you very much for taking my question. So a few from me. I wanted to start with the energy hedges which you've touched on. So you mentioned you reduced gas consumption 30% year-on-year.

But could you give us some color on, I guess, the absolute impact of your energy hedges sequentially? And what are your plans on energy consumption into Q4 and 2023? And to help with that, could you just provide how much of your energy is purchased on spot?.

Yeah. Moses, that's a good question. And I think we were, to some extent, lucky we were, of course, in this rising market in terms of energy prices. I think we acted fast. We locked a good part of our consumption for quarter one, quarter two to some extent, also quarter three.

And if you see our debt, you can see that in H1, we basically managed to keep our costs, and we have been talking about it. Our cost is relatively stable compared to quarter four of 2021. Of course, we could not keep up as prices continue to rise. And you see the $300 million impact in quarter three.

But the cost prices were rising, our ability to continue to hedge as much as we would like for quarter four. They were not there and was -- and at some point, it became risky because prices were very high So we have not hedged much quarter four, some but not much. As a result, we are benefiting from the very low spot prices that we are seeing.

So my expectation is that the average spot prices that you can see on your screen should basically reflect what we have for quarter four. And then quarter one, I would expect the same. The environment is such today that it's hard because you have the commission in the United States in Europe discussing caps.

So it's unclear really what kind of measures will be in place. And it just makes it harder for you to go out and lock in prices, knowing also that the forward prices, they remain higher than spot prices today..

Yes. Thank you.

And then also, so given your curtailments, what's been the impact on your fixed and variable costs? And how do you expect that to evolve into Q4? Basically, how much of your fixed costs could become variable into Q4 2023?.

Yes. I think that's one of the key aspects of idling some of the capacity you match production to demand. And then you can also focus on variabilizing our fixed costs as much as possible.

We discussed, we don't have the same schemes that we had back in 2020 at the time of COVID, but we do have schemes still available to us in most countries where we operate. So the focus is on working with the unions, work with our employees to have as much of the fixed cost removed for as long as our finances are down. It's a significant percentage.

I'm not going to be specific, but we believe that we can remove a good part of the fixed cost. But on our fixed cost per ton, as we bring down capacity will be impacted. So fixed cost per ton will increase as we reduce capacity, but it's still economically is the right decision..

Thanks. And just as you touched on it just then how some of your labor agreements progressing in Europe and also in Brazil into 2023..

Well, I think, this is a challenge that everybody will face. This is -- as inflation has been high, I think, this is going to be a hot topic not only for us, but for everybody in 2023.

And it's going to be a discussion with the unions, with our employees to find what is the right balance where we -- we attend the needs, but we also make sure that the company remains competitive, remains viable. So it's going to be fine-tuned and trying to find that balance.

And on top of that, as we have discussed at the beginning of the year, our management gain plans that we launched, we continue to track and follow that very closely. We continue to work on productivity.

I think the company historically has always been -- has always done well in working on improving productivity, and I expect us to continue to do that to mitigate some of the cost inflation that is happening, and everybody we need to face..

And are those expectations included in future CapEx assumptions as well?.

Well, yes. Yes. I mean, at this point, because we are working on this strategic CapEx now for some time, right? So we have a good idea of costs associated with these projects. We also saw FX bringing down some of this CapEx. So there are some offsetting aspects as well. It's not only everything is negative.

So there are also some positive effects as well..

Brilliant. Thank you, very much..

Great. Thanks. That was our last question. I will hand the call back to you..

Thank you, Daniel, and thank you to everyone for joining our call today. I think we had a good discussion around how we are responding to the market challenge. But I hope that you take away one message, and this one message is consistency.

Consistency in our focus on safety and industry leadership, consisting our free cash flow generation and consistency between how we allocate our capital to growing and developing ArcelorMittal, while continuously returning capital to our shareholders. Thank you very much..