Deep within ArcelorMittal's Q4 2023 earnings transcript [source](https://seekingalpha.com/symbol/MT) lies a hidden gem, a subtle shift in strategy that could redefine their future and unlock a treasure trove of value for investors. While analysts fixate on the obvious – the share buybacks, the Kazakhstan divestiture, and the growth prospects in India and North America – a quiet revolution is brewing in the form of their newly defined 'Sustainable Solutions' segment. This, I believe, is the sleeping giant, poised to become a $10 billion EBITDA behemoth within the next decade, and yet, it's receiving barely a whisper of attention.

This new segment isn't about selling green steel – that's already handled within their existing regional divisions. Instead, Sustainable Solutions aggregates a collection of seemingly disparate businesses, all possessing a unique combination of high-growth potential, niche positioning, capital-light structures, and a strong connection to climate action. Think of it as ArcelorMittal's internal incubator for future-proof, ESG-aligned ventures, meticulously curated to deliver consistent earnings and outsized returns.

The segment encompasses downstream operations like their construction business, focused on manufacturing innovative building systems; project engineering, supplying specialized steel products for vital energy infrastructure; and Industeel, their EAF-based facility catering to niche demands for high-quality plates from industries like nuclear and low-carbon industrial applications.

Also within this segment lies their recycled steel operations (scrap and metallics) and, crucially, their renewable energy investments. This is where things get truly interesting. While these businesses currently contribute a relatively modest EBITDA, ArcelorMittal has explicitly stated their intention to **double** this segment based on existing plans. [source](https://seekingalpha.com/symbol/MT)

Projected Growth of Sustainable Solutions

The following chart illustrates the projected growth of ArcelorMittal's Sustainable Solutions segment, based on their stated goal of doubling EBITDA and the anticipated growth of the renewables market.

Now, let's connect the dots and do some back-of-the-envelope math. ArcelorMittal aims to double their Sustainable Solutions EBITDA, which currently stands at around $400 million (based on their disclosed full-year 2023 results). That implies a target of $800 million within the next few years. [source](https://seekingalpha.com/symbol/MT)

But remember, their green steel ambitions and renewable energy expansion are intertwined. As they invest billions in decarbonizing their steelmaking processes, they'll need a readily available source of low-cost, low-carbon energy. This creates a powerful internal demand engine for their renewables segment, fueling its growth far beyond what's currently anticipated.

Furthermore, the global push for decarbonization is creating a voracious appetite for sustainable solutions across industries. ArcelorMittal, with its global footprint, brand recognition, and proven track record in developing and scaling these ventures, is uniquely positioned to capture a significant share of this burgeoning market.

My Hypothesis

ArcelorMittal's Sustainable Solutions segment, fueled by the synergistic growth of renewables and green steel, could reach an annual EBITDA of $10 billion within the next decade. This is based on several factors: [source](https://seekingalpha.com/symbol/MT)

- **Conservative Doubling:** The initial target of doubling EBITDA to $800 million seems highly achievable within the next 3-5 years.

- **Renewables Boom:** The global renewable energy market is projected to surpass $2 trillion by 2030, providing a massive tailwind.

- **Internal Demand:** ArcelorMittal's own decarbonization efforts will drive significant internal demand for renewable energy.

- **Global Reach & Expertise:** Their global footprint, brand recognition, and technology leadership position them to capitalize on the global demand for sustainable solutions.

While the current market may be overlooking this potential, investors who recognize the significance of this strategic shift could reap significant rewards. ArcelorMittal isn't just a steel giant anymore; they're quietly transforming into a global leader in sustainable solutions, and this silent revolution could be the key to unlocking their true value in the years to come.

"Fun Fact: Did you know that ArcelorMittal's production of steel is equivalent to building roughly 120 Eiffel Towers every day? That's a lot of steel, and it highlights their immense scale and global impact. As they pivot towards Sustainable Solutions, they're bringing this same level of commitment and innovation to addressing climate change and building a more sustainable future."