SSS 2020: Cleveland-Cliffs predicts 2021 revenue of $17bln

Cleveland-Cliffs expects that its pro-forma annual revenue in 2021 will total $17 billion, from which it plans to invest in self-improvements, according to the iron and steelmaker’s top executive.

“We should expect to have at least 12% Ebitda [earnings before interest, taxes, depreciation and amortization] margin in this new company,” chairman, president and chief executive officer Lourenco Goncalves said, referencing Cliffs’ recent deal to acquire ArcelorMittal USA. “And 12% of $17 billion will give you $2 billion Ebitda every year.”

“We need this return-on-invested capital,” he said during a keynote presentation at Fastmarkets’ Steel Success Strategies Online conference on Monday October 26. “Without capital, there will be no investment in new technologies and new ways of producing steel or new equipment. Return-on-invested capital is crucial, and this acquisition plays exactly on that - on creating the critical mass to be self-sufficient and to be able to continue to grow.”

The Cleveland-based iron and steelmaker’s new product line will include pellet, hot-briquetted iron (HBI), high-end rolled steel - particularly galvanized - and automotive parts and components, according to Goncalves.

“We absolutely believe manufacturing in the United States - and particularly automotive manufacturing - has a very bright future,” he said.

The next phase of the company’s evolution will focus on environmentally friendly and socially conscious steelmaking, he added.

Goncalves also noted that Cliffs’ new HBI plant in Toledo, Ohio, is just “weeks away” from starting production.

He believes the company’s HBI will be an attractive alternative to imported pig iron because it will be more environmentally friendly and available on shorter lead times without significant freight costs.

Sign up here for Fastmarkets’ free webinar on November 4, 2020, beginning at 9am GMT: European flat steel market - on the mend after the Covid-19 fallout?
- Overview of EU flat steel price developments in 2020 so far
- Suppliers’ response to the drop in demand
- Fortress Europe? Toughening of trade defense measures
- The survival of European steelmakers facing high raw material costs
- Demand contraction and a slow path to recovery
- Near-term price outlook

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