Thank you. Hi, good afternoon and good morning, everybody. This is Daniel Fairclough from the ArcelorMittal Investor Relations team. This morning, we published our results for the fourth quarter and full year 2019 alongside the Q&A document and a detailed presentation with speaker notes. So the intention of today's call is not to go through that presentation again, but move directly to your questions that you may have. So the whole call today should last about 45 minutes. [Operator Instructions]. With that brief opening, I will hand over to our Chairman and CEO, Mr. Mittal.

Thank you, Daniel. Good day and welcome, everyone. I'm joined on today's call by Adit Mittal, President and CFO; Simon Wandke Head of Mining; Genuino, Head of Finance; and Daniel, of course you know. Before we answer your questions, I would like to begin with a few remarks. As always, I will start by commenting on our health and safety performance. Our lost time injury frequency rate in 2019 was 1.21x, a deterioration compared with 2018, predominantly due to the inclusion of ArcelorMittal Italia. Excluding ArcelorMittal Italia, the rate was 0.75x. Our aim is continuous progress, and we will be further strengthening our safety training and initiatives to further improve our performance. Turning to the financials. 2019 was a challenging year. We faced the headwinds of softening global economic growth, weak automotive demand and supply chain destocking. Demand in our core markets declined, putting pressure on prices and spreads. That we were able to achieve $2.4 billion of free cash flow in 2019 demonstrates the progress we have made in recent periods on our Action2020 plan. And this will continue as we have identified a further $1 billion of cost improvement opportunities to be captured in the year ahead. We ended 2019 with net debt of $9.3 billion, its lowest-ever level, and are now focused on reaching our target of $7 billion by end of this year. 2019 also marked the culmination of a 15-year journey to establish a meaningful presence in India. In December, we completed the acquisition of Essar Steel India in partnership with Nippon Steel. Now the new business is named as ArcelorMittal Nippon Steel India, AMNS, provides us with a large and quality presence in the world's fastest-growing steel market. It is already a well-run, profitable business, but one which we feel we can add value…

Thanks, Mr. Mittal.

[Operator Instructions]. And we'll take the first question from Jason at Bank of America.

Just on Essar - and it looks like a very exciting opportunity. And I'm just wondering how should we think about the time frame for this new joint venture to actually generate a cash return for shareholders. Is this a 5-year cycle of deleveraging and capitalization? Or is this actually a multi-decade thing where we're not going to see any cash flow at all?

Aditya here, Jason, and thank you for your question. In terms of Essar, maybe just the big picture first. As you heard, we visited it in December again and have been in constant touch with the team. And everything we have seen has impressed us. The company is on the right track. I mean in January, it has set production records. It's run rating at 7.4 million tonnes. When we started the due diligence, it was run rating at 5.2 million tonnes. So that's a 40% increase in production with minimal CapEx. Run rate EBITDA is $600 million, which is also higher than December, so above our expectations. And we see some easy wins this year. There's some commercial synergies that we can achieve in the first year of operations and perhaps increase from the record level that we have in January. On a medium- to long-run basis, the growth story is intact. I know the headlines around India was negative, such as automotive demand declining sharply. But apparent steel consumption India actually grew by about 4% in 2019, and we believe it will grow even stronger in 2020. As you know, India has the largest - has the second largest population, fastest-growing steel market. So we see opportunity to not only improve the value-add capability of our facility, i.e., automotive, but also in doing brownfield and - brownfield expansions at Hazira and potentially at Parati. In terms of how you should think about it, it's all a deleveraging story. It's a story in which we want to grow as the market grows in India and capture the value that is created. And so I would think of it as value that is embedded in ArcelorMittal in owning a 60% equity interest in a world-class facility in the world's fastest-growing steel market.

And so - just to come back to the question, Aditya, if I can push a little, in terms of cash returns to Mittal and then ultimately to the Mittal shareholders, it's not a cash story at all. It's just a growth story.

Every story has cash at the end, right? So I don't think no cash to it at all. But I think it's just a matter of balancing, "Do you take the cash and return to shareholders? Or do you take the cash and invest in growth?" And as long as the growth story remains intact, then - and the returns are better than I would think that to maintain the quality of the business and the franchise of the business, the focus would be to invest to grow the business.

Thanks, Jason. So we'll move to the next question, please, from Alain at Morgan Stanley.

My question is on the Q1 EBITDA and the building blocks if we were to look at the profit bridge. Do you mind giving us a bit of a qualitative guidance on the individual items that could move your EBITDA into Q1 and a general overview of the market in Europe, given that one of your competitors today said that they have seen a very aggressive restock into Q1? Do you see the same thing? Or should we think about it differently? Genuíno Christino: This is Genuino. Let me try to walk you through the major blocks that we have seen for quarter 1. So starting with shipments, so we will see, typically - as you know, seasonally, our quarter 1 shipments, they are higher quarter-on-quarter. We will continue to see that. In most segments, with the exception maybe of Brazil - in Brazil, as you know, typically, in quarter 1, we also restock in our Flat business. So I would not expect to see an increase in shipments in Brazil. But in NAFTA and Europe, we will see an increase in shipments quarter-on-quarter. And in CIS, we would expect shipments to be relatively flat as we had some higher shipments coming from Kryvyi Rih this quarter. As we talked about last quarter, we had some cutoff issues, so that will have an impact in quarter 1. In terms of prices, so prices - as you know, prices are moving up recently. So the segments more exposed to spot business, we will - they will see an increase faster. And that's the case of Brazil. That's the case of CIS. Our European business, you need to take into account the lag impact. And in NAFTA, we would expect our selling prices should be relatively flat quarter-on-quarter. And then - maybe just to finish, in terms of costs, the raw material basket, we would expect our costs to continue to move down as we work through the higher cost inventories that we still carry in our books. So costs should continue to go down as well.

Just quickly on the European market, we - as you know, we had announced a 4.2 million tonne production cut in the second half. That was complete. As we start 2020, we have restarted furnaces in Germany at Bremen and Asturias in Spain. And last Friday, we announced the restart of Krakow. So you're right. We are seeing a restock or the end of the destock. I think there was a significant destock that I heard in the second half of 2019. So I'd like to characterize it as the end of the destock of 2019 in terms of what we're seeing in the marketplace at the beginning of 2020 in Europe.

Okay. Thanks, Alain. So we'll take the next question from Luke at JPMorgan.

Just on your target to reach the $7 billion of net debt by the end of this year, can you quantify how much of that delta versus the year-end '19 level is from M&A? And also whether you assume the $4 billion - $1 billion of working capital to be released in that estimate?

Sure. So let's start with free cash flow. As you know, we have reduced our cash requirements from $5 million to $4.5 billion. So any EBITDA in excess of $4.5 billion will work towards reducing our net debt. The second impact is improved efficiency in our working capital. Assuming current market conditions, we are expecting a release of $1 billion. And there should be some progress in terms of portfolio optimization. As you know, we did about $0.5 billion in 2019. We have $100 million of that optimization in Q1, and the rest is work in progress. Our $2 billion plan is - was - when it was announced in the second half or the end of second quarter '19, is a 2-year plan. So it's not necessary that we achieve the full plan in 2020 for us to achieve our $7 billion net debt target.

Thanks, Luke. So we'll take the next question from Carsten at Credit Suisse.

One question's with regard to the Asian situation at the moment. We all know that the coronavirus is currently a big discussion point. Do you see any risk to your outlook statement based on the outbreak there? And here, I refer specifically to iron ore, which weakened in recent weeks in a period where we usually see iron ore price increase. What is the risk for your business here particular? And could there be a risk on the steel prices going forward?

In terms of coronavirus, clearly the human cost is very significant. We have employees in China. Thankfully, all of our employees are safe. When I look at the level of production in January, it was more or less on plan. Clearly, February will be more difficult month because we can't produce. We can produce, but there's some concern on outbound logistics. And there will be more clarity, I think, as the Chinese New Year ends. In terms of outlook, you were specifically asking regarding iron ore. With last year, iron ore prices moved up. Markets were weaker. It was hard for us to pass on the cost increase. There's no reason to think that the opposite could not happen in 2020. So looking at the marketplace, clearly, spreads are already compressed. So to the extent that there's some relief on the raw material basket, that will not be such a bad thing.

Thanks, Carsten. So we'll move to Phil at KeyBanc.

When I look at contracts, automotive or fixed-price contracts for Europe and the U.S. this year, how should I think about those in terms of being margin-accretive or margin-dilutive or holding the course? Just trying to understand because those are big assumptions for you all this year.

Sure. So in terms of automotive, clearly the pricing of automotive has to also reflect what is happening in the broader marketplace in terms of steel. Nevertheless, as you appreciate, we have a very strong franchise in terms of the products that we sell and the capability that we provide. Overall, I would expect that the profitability of automotive would depend primarily on what happens to the raw material basket because especially in Europe, it's a spread. So to the extent that the raw material basket is weaker, then profitability would be similar. To the extent that raw material prices are at present levels, then overall spreads would be weaker than 2019.

Thanks, Phil. So we'll move to Seth of Exane.

Just to get a little more color with regards to working capital, obviously, you strongly beat in Q4. Can you give us a little bit more color on what ultimately drove the outperformance versus your own guidance from just last quarter and perhaps dividing that split between seasonal and more structural elements? And then going ahead to 2020, you're talking another $1 billion release. Is that achievable if your guidance for recovering apparent demand is ultimately realized and if recent price trends persist?

So in terms of the results, so the 2.6 releasing in quarter 4, I think it's important to say that we never really provided a guidance on working capital, other than to say that we would return the $1 billion that we overspent in 2018, right? So we were not surprised with the level of release in quarter 4, given how selling prices evolved during the quarter. So that's - so that's regarding the overall performance, let's say. So we believe that it's sustainable, and that's why we are guiding for further release. So we believe that there is further potential to optimize our position. So in terms of this, we are still a little bit ahead of where we were at the end of '17 and '16. So there is still some potential, and that's what we are guiding to right now. And also clearly, we are seeing how the raw material basket is going. And so we are confident that should raw material basket remain as it is, there should be some upside coming from that as well, from optimization, from days and the evolution of the raw material basket right now.

Thanks, Seth. So I'll move to Alan at Jefferies.

Turning to the mining division, could you please share with us your expectations around volumes for 2020? And also, just on the costs there, if you're seeing any pressures, whether inflationary or deflationary?

Thanks, Alan. Yes, look, essentially, we're saying same guidance for '19 to '20. We're obviously pushing hard in the current pricing outlooks that we saw last year, which have only just started to collapse in recent days. But there's enough on the supply side to suggest that there may be some shortages, particularly around higher-grade products that would force us to see what we can push harder in terms of productivity outputs in 2020. So volume guidance is flat, but if it's there to push hard where we can, particularly in the higher-grade marketable assets, of course. In terms of costs, not a significant influx in the uncontrollables that we're seeing, are rather typical oil-based in other parts, which are coming from - typically from steel side in terms of consumption in coal plants, et cetera. Not too much above normal, and efforts continue. I mean we're working hard as usual, continuous improvement in productivity gains and squeezing capacity. And then - that's basically what our goal is as an integrated business with the steel group is that we run full throughout the cycles and run above installed capacity where we can.

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

Briefly on Europe, I guess you mentioned that your curtailment plans for European steel production has ended, and some of the blast furnaces, which were previously idled, had already restarted. How do you think about the market balance going forward? Clearly, we have some restocking now and probably other competitors who are going to follow in the same direction. So how should we think about the market balance over the course of the year?

I can't specifically comment on what our competitors would do or in terms of market balance. I can just repeat what we're seeing. Clearly, in 2019, there was a significant destock. We see that destock ending. We see - as you know, we have published our numbers, 1% to 2% growth in apparent steel consumption in Europe. And to achieve that level of demand in - for 2020, we felt it was appropriate to restart the furnaces that I had mentioned. We also recognize that we do have a large reline in 2020. We have one of our furnaces in Gent, which is undergoing a reline. So some of this blast furnace production, specifically Krakow, some of that can be used to build slabs for the upcoming reline in the second half of 2020.

Okay. Got it. And maybe just briefly on - what is your view on the current review of the European safeguard measures? What kind of improvements shall we expect in the coming months here?

So in terms of our European safeguards and overall trade, as everyone is aware, the market share of imports continues to rise. So as we have said before, we felt that the safeguards were largely ineffective in Europe because they had - the quota is rising in spite of a decline in apparent steel consumption. I think there's some review scheduled on further increase of that. We would expect that to reflect current market reality. And as we know more and as these developments become definitive, we would update you.

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

Great. Maybe just on your CO2 reduction plan that was announced in December. So you're targeting a 30% reduction by 2030 and turning carbon-neutral by 2050. Is this an aspirational plan? Or is there a clear detail that kind of supports that - those targets? And what does it mean in terms of your met coal consumption by 2030? Is that 30% reduction driven by technologies that reduce the amount of met coal? Is it driven by carbon capture? Or how should we think about how this plays out? And also, what sort of CapEx is needed to achieve that 30% reduction in CO2?

Okay. So maybe just a quick, broad brush comments, and then I'll get into the specifics of your question. So this applies to our European business. It's a target that we have to reduce our CO2 by 30% by 2030, and the ambition is to be carbon neutral in Europe by 2050. I think ArcelorMittal is very well positioned to achieve this. As you know, we are the technology leader and the industrial leader. And we have a large R&D budget, and 2/3 of our researchers are here positioned in Europe. It's a two pronged approach. I won't go into detail because we have published an extensive report, which covers exactly how we want to achieve this, but the headlines are at circular carbon. It's smart carbon, which is - circular carbon or smart carbon; and then it is clean energy, which is using hydrogen or renewables; and then obviously, the third is carbon capture and storage. We have a lot of CapEx in different facilities on pilot stages or development stages to see how we can make further progress. To achieve real success here, you need a combination of a level playing field. And that's why we have been talking a lot to the European Commission about a border adjustment. I'd like to call it border equalization, and so that - we - the cost that we have in Europe is the same cost for any one who wants to trade with us in Europe. And that would provide a basis to enhance the level of CapEx. Simultaneously, there is a green fund, as you know, that the EU has announced and that would support. Fundamentally, as you know, the steel industry is capital short, so there has to be appropriate incentives created for us to invest this CapEx to achieve our target.

What kind of level of CapEx are we talking about in - on a gross basis before any subsidies from the green fund?

Yes. It's a complex question to answer because it's linked quite directly to the level of support or subsidies that are received from green funds. Today, in Europe, for new technologies, you can get up to 70% or 80% of funding. So at this point in time, I don't want to get into that detail. I think, clearly, it's a - it's work in progress. And as we have more clarity on border equalization and how the green fund will actually work, we can provide you with more updates.

Thanks, Myles. So we'll move to Christian at SocGen.

On Ilva - and I know you're obviously negotiating at the moment on the subject, but when you give us your estimates for net debt in 2020 at $7 billion year-end, do you assume that the amount of losses at EBITDA level from Ilva, which I think are around €800 million, are these, I mean, equal next year? Or do you assume they disappear? And just more - same question on Liberia, is the investment in the mining and the port and the railway in Liberia part of your CapEx guidance?

Yes. So just very quickly on Ilva, clearly, the $7 billion net debt target assumes Ilva - the continued operation of Ilva. I think your loss amount is larger than what we have for 2019. And clearly, in 2019, there were one-off events, which had a significant impact on the profitability of Ilva. I think there was uncertainty on blast furnace 2. We also had the Pier 4 seizure, which prevented full raw material discharge, so the level of output at Ilva was lower than what we would have liked. We see recovery already in January. And as you may know, in January of this year, we've got a positive ruling on blast furnace 2, which is good news. And we should be able to increase raw material discharge also by Q1 of this year. So the level of our forecast, at least for the level of loss of - of Ilva, is reduced. And yes, the level of CapEx assumes, in case we were to go ahead with Liberia, it's part of our $3.2 billion forecast.

Thanks, Christian. So we'll move to the next question, please, from Bastian at Deutsche Bank.

My question is on the updated Action2020 plan and then also a quick follow-up on your line at Conde. Could you please let us know how much contribution you have been baking in for Ilva into the Action2020 plan? And then also, in that context and without going into detail on things like equity contribution, I think - if I understood you right, the annualized EBITDA loss at Ilva has been around $800 million, at least, in the last quarter. And if we put on top obviously CapEx and rent, we're looking at a cash burn of around $1.3 billion on that basis. Now there's no doubt that you, as a company, and as well as shareholders cannot be financing such a cash drain. There seems to be more quick fix to reverse, at least, all of that even if you get to an agreement with the Italian government and obviously change some of the parameters. Is there a red line which you have drawn for yourself where you're saying whatever happens, we won't accept that cash drain to exceed a certain level? And maybe give us any color on what that red line is.

So you asked the right question. Clearly, in our minds, that's on the cash drain because in Q4, there were exceptional events that I spoke about in terms of Pier 4 and blast furnace 2. If you remember, we were taking down that furnace because we cannot operate that furnace. It was under various core processes, and that got clarified in January. Other than that, also, the market situation is better in terms of spreads as well as demand environment. But I think that - so I don't agree with the overall cash drain amount. Clearly, that's not something we - I can provide guidance on just on areas where that would be changing. Simultaneously, clearly, we are in discussions and negotiations with Italian government to find a more sustainable solution. And that may also have a positive impact on the level of cash drain that you are forecasting. As we mentioned at the beginning of the call, we are in the middle of these negotiations. So it's very difficult to comment further, but that's how I would think about it too.

Okay. But could you give us any color on like how much is - you baked at least into the 2020 number in terms of cost-cutting other than the exceptional events and so on?

Yes. Yes, that I can. That's easy. So out of the $1 billion in terms of Action2020, 1/3 is fixed costs and 2/3 is variable. Without giving you a breakdown of how much of Ilva is fixed and variable, about 25% of the $1 billion of Action2020 is coming from Ilva, so about $250 million.

Got it. And the variable costs improvements, which are the larger part as you said, is that basically just the assumption that raw material prices will keep coming down? Or is it actually the efficiency improvement on raw materials, i.e., better use, better mix, and not just basically following the market trend of commodity price deflation?

Exactly, it's the latter, which is improved efficiency, consumption factors, yield, quality and all the processes that we have to improve the efficiency of our operations.

So we'll move to the next question, please, from Francisco at Banco Sabadell. Francisco José Rodríguez Sánchez: Coming back to working capital, the [indiscernible] was impressive obviously. And I would like to - well, one would think that when you restart facilities and the restocking comes back, this should increase. But at the same time, you've given quite a good number even for next year potentially. So just to understand, if there's any specific issue that you have worked on or anything else that you could give us some color on to understand the good performance you're having. Then just a quick one, in your $7 billion net debt guidance, is this linked to any assets in - during 2020 or not? Genuíno Christino: Yes. So maybe talk a little bit more about Q4 performance. So you can see that it's very clear if you look at our balance sheet, you will see and look at our average selling price, as you can see a significant decline in selling prices this quarter. You can see also that we have reduced shipments were also lower. So that of course helped with our working capital. And on top of that, we also did better in terms of collection, particularly in NAFTA. So collect more - so we reduced also the number of trade receivables. So that is on account of selling prices, lower shipments and better collection and then, of course also, the decline of our overall courses with the raw material basket. So going forward - so I think I did not address at this point in the first question on working capital. So we are forecasting for improvement in apparent steel consumption, and that is part of our guidance today. And that's our assumption that as demand improves, we'll keep our market share. And that is part of guidance today. And then, of course, the improvements or increases in production that we talked about already, they are also part of our $1 billion guidance.

Perhaps there was a question on the net debt target. So yes, the net debt target has 3 components as I mentioned earlier: free cash flow; the working capital; plus proceeds from portfolio optimization.

So I think we're going to move now to follow-up questions. So thanks, guys, for those that limited themselves to one initially. And we'll go back to Carsten at Credit Suisse.

Thanks very much, Daniel, but all my questions have been answered.

Okay. Thanks, Carsten. So Alain at Morgan Stanley?

So my question is on the CO2 impact on 2021. As we move into the ETS phase, the final phase basically, how should we think about the P&L and the cash flow impact given your position on CO2 allowances for '21 and '22 basically?

So Alain - so we don't expect any significant impact coming from Phase 4. I mean as you know, there is a progressive decline, but - so for Phase 3 - so we have of course our hedges in place. And we do not expect any significant impact in - from 2021 compared to 2020 at this stage. Of course, Aditya talked about the - our targets, our reduction targets, so we are focused on achieving that. So initially, we do not expect any significant impact.

Thanks, Alain. And back to Phil at KeyBanc.

Out of the $1 billion in incremental savings from Action2020, you mentioned 25% of that is related to Ilva. Any color in terms of the rest of the 75% in terms of where we may see the segment split?

I don't want to get down into that bunch of detail. But fundamentally, a large majority of it on the variable costs side is in our Europe and NAFTA business, and the fixed costs side is on a global basis.

That's helpful. And one more, if I could, just for clarity. With your $7 billion net debt target kind of in sight here in the next several months, how much of that - this is predicated on asset sales? I know you've got $1.4 billion left, but how much of that - out of that $1.4 billion are you suggesting you need to hit to get to that $7 billion? Is it all? Is it part? That's it for me.

Sure. As I said earlier, we don't need all of it to hit the $7 billion net debt target, but it is part of our calculation to achieve the $7 billion net debt target. I'm afraid I can't get into more detail than that. But as I mentioned earlier, there are 3 components: free cash flow; working capital use of $1 billion; plus proceeds from portfolio optimization.

Every story has cash at the end.

Yes.

Thanks, Phil. So we'll go back to Jason at Bank of America.

Maybe just a little bit of a philosophical one. And I guess Mr. Mittal started the call talking about the challenges of the year, and Ilva figure is a big part of the challenges. As an organization, have you done any kind of introspection or self-analysis on how you've got Ilva so wrong? And I guess any learnings from Ilva that we might expect to be applied to Essar or indeed to any future acquisitions that you might be considering?

I'll give you context that in the last couple of years, we have made 4 acquisitions: one, in Votorantim; Calvert; Ilva; and Essar. I must say that all 3 of them have been excellent acquisition. It helped to improve our values, improve the value of the company, bring strength to our business in the region, like Brazil market share in case of Calvert. We not only got the volume, but we also got the quality. And we are the leader - and we remain the leader in terms of quality for this deal. Then look - Essar, Adit just explained to you the opportunity, growth opportunities in the market and the country as a whole. So everything has been - so far, this all are positive side. Ilva, we definitely started with very positive assumptions that we have great assets on largest market, the largest single-site production with the modern assets. Then on top of this, it is on the port, and it has a market. So all these things are right. Then we got into some of the situations, which were not anticipated, like the change in the government, government changing the law on immunity, which was never expected in a developed market like Europe. Then there has been some old legal case, which we were confronted of, like seizing of blast furnace 2 in the sense of closing down the furnace. Then we got into some accident due to unexpected typhoon and everything. So we got into a situation where - and the market spread squeezed much larger than we anticipated in 2019. So now we are in a situation where we are - we understand these issues, and we are trying to address some - we cannot address the market issue, but definitely, we can create an ecosystem, which would be very positive. And we believe that, that should bring the sustainability, including our discussions, one thing which I can - said - I said in my speech, including the state participation in our business going forward. So we believe that all these actions should help us to bring sustainability to future of Ilva. I must say it is a good asset, but we need to create an ecosystem which will help us to bring sustainability and create value. Clearly, you do not anticipate those kind of external situations or the macro situation certainly come at one point and in one year to see certainly that there is a big loss in Ilva.

So we'll move to take a follow-up from Seth at Exane.

A question with regards to the European portfolio. As you move to restarting these assets, can you comment on how that will impact your fixed costs base in the region? Obviously, some of the facilities you took down were higher-cost assets relative to peers within the EU. How do you expect that to progress moving forward, recognizing at the same thing you do have a cost-saving program? Similarly, what would be the impact on your mix? Is there risk this is ultimately degrading your mix on a relative basis as you reenter the commodity grade spot market?

As we increase production, so clearly, there will be - we will see a benefit of a better fixed cost absorption, so that will mitigate some of - bringing back some of the production there, so benefit cost absorption. And of course, as we have discussed before, so we are seeing an improvement in pricings that justify or bring back this capacity. Aditya also mentioned to be in line that is being planned for the second half. So we do not see that this will - of course, we would not do it, if it - of course, if it would reduce our level of profitability. So that is number one. And in terms of the mix, we do not - we are not expecting any significant change to the mix.

We'll move on to Myles at UBS.

Just going back to M&A and the A part of M&A. Over the last few years, when you seem to start getting closer to a net debt target, there's been a super compelling acquisition opportunity. Is it fair to say now that you're comfortable with the current portfolio, those acquisition opportunities aren't there, and it's realistic that we will hit that net debt target by the end of the year? And just in terms of the cash flow from 2020 onwards, should we assume now that the vast majority will be returned from shareholders from this time next year?

Thank you for your question. In terms of M&A, I think what's interesting is the slide that we have posted, which shows that the net M&A spend over 2018 and 2019 is about $200 million, I think it's - I'm not sure exactly which page it is in the presentation. And so in spite of spending $1.6 billion for Essar Steel in India and making the first lease installment, we had various portfolio divestment initiatives, which reduced that M&A spend. Nevertheless, your point is valid. I don't see that much of M&A in the horizon. I think as you know, entering the Indian steel market was something that we were planning for 15 years even though we started about 5 years ago. When I look out in terms of the landscape in terms of the A in M&A, I don't see that much of activity. So it's fair to say that the cash that we generate would be used to delever. The quantum of how much of that cash would be returned to shareholders, clearly, the discussion that we like to have with all of you this year and with our Board so that we can match everyone's aspirations appropriately.

And the slide Aditya was referring to is #11 in the presentation deck. So we'll move to the last couple of follow-up questions, the first from Alan at Jefferies.

Just one more on Ilva. I mean we talked about the one-offs you faced in Q4 and then also kind of the worse safety standards that were recorded there. If you were to remove those one-offs and if Ilva had operated in line with your kind of benchmark safety standards across the rest of the portfolio, do you have a sense how much less of a drag Ilva would have been on EBITDA in 2019?

We have a slide where we wrote about the delta of Ilva's performance, which is about $600 million in 2019 relative to 2018. Does that answer your question?

Well, I'm - what I'm trying to get at is if Ilva had just faced the headwinds from a weakening market last year and not the safety-related issues and the one-offs you mentioned in Q4, what would the drag have been then?

I don't want to come out with an estimate like this. I think it would be inappropriate, but I think perhaps you can come up with some numbers if I provide you with the framework. I think the biggest issue has been that we had a seizure in Pier 4. So that was a main pier, which allows for raw material to discharge. That happened in the - basically in the summer of 2019. And simultaneously, in the fourth quarter, we had issues in terms of blast furnace 2 and its operating capability. The easiest way to think about that impact - there was some variable costs impact because we have to arrange raw materials from other ports. But it's the volume loss. And roughly, I think you have a sense of how much volume loss occurs in Europe and what that drag is. So roughly, it's 1 million, 1.5 million tonnes of volume loss that occurred as a result of this on an annualized basis, obviously concentrated in third and fourth quarter. On top of it, when you're not able to produce at a right level of capacity and throughput, it's harder to implement all of our turnaround plans. And so that also gets impacted. So I would - I don't know if I provided you enough with a framework, but it gives you a sense that there was volume issues, which was the lion's share, some variable costs increases associated with not being able to use our main port, and clearly, a slowdown in our ability to improve the variable costs of that business as our turnaround plan slowed down.

Okay. I think I've got enough to get a rough sense.

And so we're going to move to last three questions now, the first of which we'll take from Christian at Socgen.

In 2019, you had some costs in NAFTA, which were sort of tariffs, which were imposed internally on your shipments from Mexico and Canada. I think these have now been removed. Can you give us a feel for how much benefit that is going to be in 2020 versus 2019 and, in fact, whether there was some impact already in the fourth quarter of 2019? Genuíno Christino: The tariffs, if I remember correctly, they were removed in May. So the impact, you will see some year-on-year. So up to May, we paid about $30 million, $40 million in tariffs, so that's the benefit that you should see.

So we'll take the [indiscernible] question from Rochus at Kepler.

On your global shipments, I think you're guiding for higher apparent steel consumption, so I would expect corresponding increase on your own shipments. How should we think about the evolution of crude steel production? Would this be still a bit more flattish in order to get to your $1 billion working capital release you're aiming for in 2020? Genuíno Christino: Rochus, as we said, so there is still potential for some improvements in rotation days and days. So yes - so I would not say flattish, but we're going to be focused on achieving these improvements. And as I said in our guidance, we are forecasting - we agree with you, to the extent that the demand grows, our market, we would expect, at least, to keep our markets stable. So there will be an improvement in shipments, and we would expect that. But then we would - we hope that with our improvements and with the movement of the raw material basket, still, we enter the $1 billion reduction.

Thank you. So we'll take the last question please from Bastian at Deutsche.

I just have a very quick follow-up on Essar. As you said, Essar is definitely a growth case. And I guess there are plenty of resources which are not being run as they should and where you can probably still extract pretty much a lot of growth from those. But still, ultimately, growth needs capital. What is the CapEx budget which is drafted basically for 2020 in the Essar entity? And maybe you can also give us the exit run rate for the net debt at the end of the fourth quarter, please.

Okay. I mean, I don't think by entities, we're giving individual CapEx numbers. I think it's not appropriate from a competitive standpoint, but I can still provide you with some framework numbers. So as you heard perhaps in the beginning of the call, our run rate EBITDA is about $600 million. We see some quick wins, commercial synergies. And potentially, the Indian market will be stronger, both from - primarily from a price perspective and what we're seeing in January. So that's base EBITDA. Maintenance CapEx is quite low in India. So you do see that in the benefit in terms of labor arbitrage. The outstanding CapEx, I should note, that's significant. So you very easily see that this company is cash flow positive on a monthly basis. It has been also in the fourth quarter. And our expectation is that it would be cash flow positive on a monthly basis in 2020. In terms of the growth case, I also want to emphasize that the idea is not to sending cash to the company as well. And we think the company should be able to finance its own growth through its - either through its own balance sheet plus its own earnings. So that is how we want to run the facility. And to the extent that we announce specific investments, we would update you and, obviously, provide you with more color on what exactly is the cash impact on the balance sheet of Essar. Today, Essar balance sheet has some cash because of the equity injection that we have made. And I think you have a sense of the level of net debt as well based on our 2:1 debt-equity ratio.

Let me just follow up and maybe just ask in a different way. If you look at the current balance sheet versus cash flow, as you pointed out, you're positive or you're cash flow generative. I guess still, the net debt level against that is maybe still somewhat elevated. I mean would you - in the initial test, would you accept that, that leverage will go or will continue to go up in the near term because maybe you have to do some initial investments, purchase of the slurry pipeline or something like that? Or would you be able to keep that fairly balanced and really try to keep it balanced and work it down over time, instead of increasing the net position and financial...

Okay. I think that's a good question. I think when we look at the level of net debt, I don't think it's being impacted by slurry pipeline. And we're also in the middle of acquiring a small power plant through bankruptcy court, which is adjacent to the facility, and stuff like that. So all of that is part of the plan. The company started with $1 billion in cash because that's the equity infusion. It generated some cash through this process, so that number actually grew. These small acquisitions that we're doing in terms of the slurry pipeline or the power plant still keep it in a net cash position very close to that number, obviously, not as high as $1 billion, but not that far off as well. So the company still has a good level of cash balance post these deals, and therefore had a potential to deploy some of that in terms of growth or other strategic actions.

There being no other question, thank you for - thank you all for your attention today. I think it is clear from today's call that despite the challenges we faced in 2019, we have, as a company, made significant progress. As a management team, we are all focused on continuing that progress in 2020 and fully achieving the targets we have set ourselves. With that, I will bring this call to a close by wishing you all the very best. And thank you very much.