presentation title second line - arcelormittal · this presentation may contain forward-looking...
TRANSCRIPT
19 November 2013
German Conference
Hetal Patel, General Manager of Investor Relations
Valérie Mella, Investor Relations Specialist
Disclaimer Forward-Looking Statements
This presentation may contain forward-looking information and statements about ArcelorMittal and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements may be identified by the words “believe,” “expect,” “anticipate,” “target” or similar expressions. Although ArcelorMittal’s management believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of ArcelorMittal’s securities are cautioned that forward-looking information and statements are subject to numerous risks and uncertainties, many of which are difficult to predict and generally beyond the control of ArcelorMittal, that could cause actual results and developments to differ materially and adversely from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified in the filings with the Luxembourg Stock Market Authority for the Financial Markets (Commission de Surveillance du Secteur Financier) and the United States Securities and Exchange Commission (the “SEC”) made or to be made by ArcelorMittal, including ArcelorMittal’s Annual Report on Form 20-F for the year ended December 31, 2012 filed with the SEC. ArcelorMittal undertakes no obligation to publicly update its forward-looking statements, whether as a result of new information, future events, or otherwise.
Non-GAAP Financial Measures This presentation may contain supplemental financial measures that are or may be non-GAAP financial measures. Definitions of such supplemental financial measures and a discussion of the most directly comparable IFRS financial measures can be found on ArcelorMittal's website at http://www.arcelormittal.com/corp/investors/presentations/.
1
Takeaways
• ArcelorMittal retains the core attributes to deliver value through
the cycle
• The balance sheet is repositioned
• Our West European business is optimised and delivering
improved results
• We are focussed on protecting our global cost position with a
new $3bn Management Gains program by end 2015
• Mining growth capex now delivering growth volumes
• Concentrating our investments to protect and expand our
“franchise businesses” such as Global autos, Mining and Brazil
• We have a roadmap to normalised EBITDA of $150/t
2
ArcelorMittal: the industry leader with a global presence backed by raw materials
3
Progress
Focus
Outlook
• Safety improvement
• Balance sheet repositioned
• Footprint optimisation
• Cost improvement
• Franchise development
• Roadmap to $150/t EBITDA
4
Quarterly Health & Safety frequency rate* for mining & steel
• Further safety improvement: LTIF rate
improved to 0.8x in 3Q’13
• Leading the industry: Across the World
Steel Association (WSA) members, 176 sites
have a LTIF rate of <1;
…. 114 out of these sites belong to
ArcelorMittal
• Sustainability remains a priority:
ArcelorMittal maintained its membership in
the Dow Jones Sustainability Index Europe
Our goal is to be the safest Metals & Mining company
* WSA: LTIF = Lost time injury frequency defined as Lost Time Injuries per 1.000.000 worked hours; based on own personnel and contractors
2013
Target
1.0
3Q
2013
0.8
2Q
2013
0.9
1Q
2013
0.9
2012
1.0
2011
1.4
2010
1.8
2009
1.9
2008
2.5
2007
3.1
Progress Continued improvement in safety
Year end FY13 net debt expected to be ~$17bn medium term target of $15bn
Net debt progression $billion
25
20
15
10
5
0
-7.1
Medium
term
target
15.0
4Q’13F 3Q’13
17.8
2Q’13
16.2
1Q’13
18.0
4Q’12
21.8
3Q’11
24.9
•Ratio of Net debt/LTM EBITDA is based on last twelve months reported EBITDA. Figures based on recast EBITDA as per new accounting standards adopted. •Note: Net debt refers to long-term debt, plus short term debt, less cash and cash equivalents, restricted cash and short-term investments (including those held as part of asset/liabilities held for sale). At September 30, 2013 cash included $42 million and debt included $202 million held at Annaba, which has since been classified as asset/liabilities held for sale.
Net debt/LTM
EBITDA* 2.8x 2.5x
5
2.3x 2.6x 2.7x
~17
Progress Balance sheet repositioned
•Note: Note: *Bloomberg Consensus on 11/11/13 is for 2013 EBITDA of $6697mn (based on mean of 33 estimates)
We continue to believe that the 2H’12 will mark the low-point in AM EBITDA cycle
Comparable EBITDA (US$mn)
6
Progress Profitability is recovering
0
200
400
600
800
1000
1200
1400
1600
1800
3Q'12A 3Q'13A
0
500
1000
1500
2000
2500
3000
3500
4000
2H'12A 1H'13A 2H'13Con*
5500
5700
5900
6100
6300
6500
6700
6900
FY'12A FY'13Con*
Q3’13 EBITDA
24% higher than
comparable
Q3’12
Consensus* forecasting
an 8% increase in
comparable EBITDA in
2013
7
Progress
Focus
Outlook
• Safety improvement
• Balance sheet repositioned
• Footprint optimisation
• Cost improvement
• Franchise development
• Roadmap to $150/t EBITDA
Footprint optimisation
creates value
• We responded quickly to the
deepening crisis in Europe
• We responded appropriately by
seeking to remove unproductive
capacity through Asset
Optimization
• We have maintained our
course, taking those actions
necessary to protect our
business
• $1bn targeted savings achieved
8
Management responded quickly and decisively to the deepening crisis in Europe
30
35
40
45
50
55
60
Ma
r-0
7
Jul-
07
No
v-0
7
Ma
r-0
8
Jul-
08
No
v-0
8
Ma
r-0
9
Jul-
09
No
v-0
9
Ma
r-1
0
Jul-
10
No
v-1
0
Ma
r-1
1
Jul-
11
No
v-1
1
Ma
r-1
2
Jul-
12
No
v-1
2
Signs that Europe was
returning to “crisis”
prompted internal re-
assessment
Asset Optimisation
announced
German IFO reading
Focus
Western Europe Footprint now
Optimised
• Concentrated slab production in 5
coastal sites:
– Dunkirk
– Ghent
– Bremen
9
Post optimization: FCF positive in current market environment
New “Footprint” in Western Europe*:
2011 2013
# Blast furnaces 15 11
# Hot strip mills 8 7
# Cold rolling mills 18 16
• Idled least competitive rolling & coating lines
• Asset optimization ensures FCE achieves:
– Savings through fixed cost removal
– Well loaded assets with stable working points
Lower variable cost
Lower and more stable working capital requirements
Better service and quality
Reduce capex requirements Tra
nsfo
rmation c
osts
Work
ing C
ap n
ee
ds
* Note: this is the prospective footprint once all proposals implemented
– FOS
– Asturias
Focus
Gap analysis completed in 2012 defined the priorities for 2013-2015 plan
10
1.0
2014F
2.0
0.2 2.0
0.8
2013F 2015F
3.0
3.0
New $3bn management gains program ($ billion)
Annualized savings
9M 13 achieved
Savings targets
Bottom up plan across the group
Leveraging extensive
benchmarking opportunities within
the group
Improvements in reliability, fuel
rate, yield, productivity, etc.
Business units plans rolled out and
key personnel accountable for
delivery
Relentless cost focus – new $3bn
cost improvement underway Focus
Steel capex must be disciplined in
order to create value
• The economics of building new steel
capacity have not changed
– Typical Greenfield capacity would require
$250 EBITDA/t to deliver 15% post tax ROI
– Margins need to improve before new
capacity is built outside China
– As a result we expect ex-China capacity
growth to lag growth in demand
• We must be disciplined in allocating
capital to growth in steel
• Our focus is to back our franchise
businesses to protect our developed
market position and expand in new
markets e.g. Autos and Brazil
11
ArcelorMittal growth capex split
We continue to have options to invest in steel growth and create value
Focus
2012A 2011A 2013F 2010A
Mining Steel
• Dofasco (NAFTA auto) – Restarted project to expand and upgrade galvanizing capacity by 2015
– New line #6 (660ktpy capacity) to serve growing NAFTA automotive market
– Older and smaller galvanizing line #2 (400ktpy capacity) will be closed
– Increased shipment of galvanized sheet (260ktpy), improved mix and cost
• Acindar (Argentina long products) – Project to optimize and expand downstream capacity by 2016
– Installation of a new rolling mill with capacity of 400ktpy bars
– Improved productivity and lower costs
• Monlevade*/Juiz de Fora (Brazil long products) restart
approved in 2Q 2013; completion expected in 2015 – Expansion of downstream facilities with a new wire rod mill in Monlevade
(additional capacity of 1,050ktpy of coils)
– Juiz de Fora rebar capacity increase from 50 to 400ktpy (replacing some
wire rod production capacity) and meltshop capacity increase by 200ktpy
• VAMA (China automotive steel JV) proceeding well – Phase 1: capacity to supply 1.5mt for automotive applications in China
– State-of-the-art pickling tandem CRM, continuous annealing line and HDG
– Project is proceeding well; first coil now targeted in 2H’14
12
Dofasco: #6 Galvanize Line foundations
Dofasco: tension reel for new #6 line
* Investment decision on Phase 2 of Monelvade project to focus on the upstream facilities (sinter plant, blast furnace and melt shop with additional crude steel
capacity of 1.2mtpa) will be taken in the future
Restart of some steel investment in franchise businesses
VAMA: S2 mill housing construction
Focus Franchise steel development
Automotive steel is a franchise
business: we will invest
• ArcelorMittal is the leading
supplier to the automotive
industry
• We will continue to invest
in R&D to stay ahead of
the product development
curve
• We will increase
participation in emerging
markets to maintain global
market share
13
We will continue to invest to protect and grow our Automotive steel franchise
Market share* – Automotive Steel (indexed 2008 = 100)
Market share* – Advanced High Strength Steels (indexed 2008 = 100)
80
90
100
110
120
2008 2009 2010 2011 2012
US EU
80
90
100
110
120
130
2008 2009 2010 2011 2012
US EU
Overall market share growing in US
and stable in EU
Share of fast-growing HSS market has
increased since 2008
* Based on ArcelorMittal estimates; Regional ArcelorMittal Auto market intelligence; LMC auto/CSM ** Source: LMC auto
Focus
Mining expansions now
delivering growth and value
• The growth plan to 84Mt own
capacity is on track
• AMMC expansion from 16Mt to
24Mt ramping up
• Sale of 15% stake in AMMC for
crystallizes value that is to be
re-invested in the growth plan
• $1.1bn represents ~75% of
required capex to add 15Mt of
concentrate capacity in Liberia
• Liberia Phase 1 achieving
production and shipment
records in 2013
14
49 54 56
Own iron ore growth plan – production and capacity (Mt)
CA
PA
CIT
Y
2015 2013 2012 2011 2010
Capex investments made in 2011/12 now driving shipment growth in 2013/14
The Group’s progress on
deleveraging has not come at
the expense of the Group’s
Mining growth plans
Focus
15
Progress
Focus
Outlook
• Safety improvement
• Balance sheet repositioned
• Footprint optimisation
• Cost improvement
• Franchise development
• Roadmap to $150/t EBITDA
16
• Global PMI indicates developed manufacturing growing above trend for the first time in two years
• US manufacturing grew q-o-q in 3Q’13 and up over 2.5% y-o-y. October PMI remained >50 near recent highs despite the impact of US government shutdown
• In Europe, manufacturing output still down y-o-y but in 3m to August is up over 3% annualised from previous 3m
• Eurozone PMI above 50 for four consecutive months. Strong readings for Czech Republic, Poland and UK PMI confirm EU27 PMI at highest since 1H’11
• Chinese industrial output growth has rebounded to 10.1% y-o-y in 3Q’13 the best quarter since 1Q’12 supported by strong auto and a pick-up in the PMI>50
Global indicators signal continued growth in developed markets in 4Q’13, and
confirm a rebound of Chinese growth since the summer
Source: *Markit. ArcelorMittal estimates
ArcelorMittal weighted global manufacturing PMI*
Demand prospects improving Outlook
Roadmap back to normalised
profitability
• If steel shipments increase by ~15% then we
believe $150/t EBITDA is achievable
• Driven by:
– Leverage to incremental volumes ($200-
250/t margin on incremental tonne given
limited additional fixed cost)
– Cost benefits from Asset Optimisation
(completed $1bn sustainable savings)
– Cost benefit from new $3bn Management
gains 2013-2015
– Execution of mining growth plan (+28MT
new production capacity by 2015)
– Offsetting impact of lower iron ore price
– Improved industry utilization rates driving
higher margins and profitability
17
We believe EBITDA/tonne of $150 is an achievable normalized target
* Note: EBITDA is underlying number excluding one-time items, CO2 gains and DDH
$90/t
$150/t
Mining Volume
Growth
Steel Volume
Recovery
Management
Gains (cost
cutting)
Asset
Optimization
Average EBITDA/tonne
2010-2012*
Outlook
ArcelorMittal is in a position of strength to
capitalise on opportunities & deliver value
18
Industry leading returns
Cost competitive
assets
World-class mining
business
Leading supplier to automotive
industry
Exposed to fastest
growing markets
Components are in place to deliver industry leading returns and value
19
Q&A
20
Appendix
21
3Q 2013 highlights
• EBITDA 24% higher than underlying EBITDA in 3Q’12*
• Steel shipments increased 6% vs. 3Q’12
• Own iron ore production 4.5% higher than 3Q’12
• Iron ore shipped at market price 32% higher than 3Q’12
• Net debt temporarily increased to $17.8bn at Sept 30, 2013, inline with expectations
• $4bn reduction in gross debt since early June 2013 leads to $62mn (13%) lower net interest expense in 3Q’13 vs. 2Q’13
• $0.8bn annualized management gains achieved during 9M’13
24% improvement in underlying EBITDA 3Q’13 vs. 3Q’12 *Reported EBITDA in 3Q 2012 of $1,445 million included the positive impact from $131 million for DDH income offset by a $72 million charge related to a one-time
signing bonus and post retirement benefit costs following entry into a new labor contract in the U.S. As a result underlying EBITDA for 3Q 2012 is $1,386 million.
(USDm) unless otherwise shown 3Q 2013 2Q 2013 3Q 2012 9M 2013 9M 2012
Iron ore shipments at market price (Mt) 9.4 8.2 7.1 24.9 22.1
Steel Shipments (Mt) 21.1 21.3 19.9 63.4 63.8
Sales 19,643 20,197 19,723 59,592 64,904
EBITDA 1,713 1,700 1,445 4,978 6,122
Net income / (loss) (193) (780) (652) (1,318) 456
22
Upgrade railway line linking mine to port in Liberia
2008 2009 2010 2011 Q112 Q212 Q312 Q412 2012 Q113 Q213 Q313
Crude Steel FCA 26,476 16,556 23,101 24,215 6,249 6,014 5,726 5,933 23,922 6,197 5,589 6,343
Production FCE 34,338 22,752 30,026 29,510 7,182 7,143 6,718 6,375 27,418 7,279 7,481 7,438
(thousands of Long 25,198 18,901 22,550 23,558 5,785 5,885 5,713 5,240 22,623 5,722 5,742 5,771
metric tonnes) AACIS 15,118 13,411 14,906 14,608 3,615 3,691 3,721 3,241 14,268 3,245 3,681 3,710
Total Continuing operations 101,130 71,620 90,583 91,891 22,831 22,733 21,878 20,789 88,231 22,443 22,493 23,262
Steel FCA 25,810 16,121 21,028 22,249 5,672 5,735 5,351 5,533 22,291 5,559 5,407 5,759
Shipments* FCE 33,512 21,797 27,510 27,123 7,461 6,771 5,837 5,957 26,026 6,890 7,065 6,579
(thousands of Long 27,115 19,937 23,148 23,869 5,738 5,839 5,508 5,543 22,628 5,394 5,772 5,599
metric tonnes) AACIS 13,296 11,769 13,266 12,516 3,353 3,321 3,178 2,978 12,830 3,104 3,062 3,187
Total Continuing operations 99,733 69,624 84,952 85,757 22,224 21,666 19,874 20,011 83,775 20,947 21,306 21,124
Revenue FCA 25,761 12,310 17,684 21,035 5,270 5,359 4,840 4,683 20,152 4,859 4,788 4,921
(US$ millions) FCE 38,300 19,981 25,550 31,062 7,719 7,223 6,108 6,142 27,192 6,834 6,903 6,334
Long 32,230 16,741 21,315 25,165 5,763 5,698 5,189 5,232 21,882 5,103 5,420 5,133
AACIS 13,047 7,577 9,706 10,779 2,787 2,677 2,457 2,130 10,051 2,129 2,115 2,112
AMDS 23,126 13,524 15,744 19,055 4,431 4,292 3,716 3,855 16,294 3,553 3,597 3,425
Mining 3,557 2,573 4,380 6,268 1,271 1,576 1,288 1,255 5,390 1,199 1,351 1,595
Holding & service co's and eliminations (19,080) (11,685) (16,354) (19,391) (4,538) (4,347) (3,875) (3,988) (16,748) (3,925) (3,977) (3,877)
Total 116,942 61,021 78,025 93,973 22,703 22,478 19,723 19,309 84,213 19,752 20,197 19,643
FCA 4,800 685 1,555 2,109 632 474 236 93 1,435 443 293 547
FCE 6,448 1,946 2,015 1,500 130 381 191 307 1,009 300 341 193
Long 6,635 1,647 2,075 1,866 437 564 330 402 1,733 419 556 463
AACIS 3,866 898 1,135 1,238 160 120 70 220 570 19 120 105
AMDS 1,103 (97) 457 271 35 385 11 (24) 407 15 29 16
Mining 1,468 656 2,263 3,063 478 541 391 315 1,725 433 432 533
Holding & service co's and eliminations (668) (135) (975) 70 100 (18) 107 10 199 (65) (71) (144)
Total 23,652 5,600 8,525 10,117 1,972 2,447 1,336 1,323 7,078 1,564 1,700 1,713
FCA 186 43 74 95 111 83 44 17 64 80 54 95
FCE 192 89 73 55 17 56 33 52 39 44 48 29
Long 245 83 90 78 76 97 60 73 77 78 96 83
AACIS 291 76 86 99 48 36 22 74 44 6 39 33
Total** 229 73 85 81 63 89 42 50 62 57 63 63
Average Steel
EBITDA/tonne
(US$/tonne)
EBITDA (US$
millions)
The 2012 information has been adjusted retrospectively for the mandatory adoption of new accounting standards
Key operational data overview
Flat North America, 15%
Long North America, 3%
Flat Europe, 16%
Long Europe, 6%
Flat South America, 9%
Long South America, 16%
Africa, 3%
Asia, 2%
Other Steel, 4%
Mining, 27%
* Figures exclude shipments from Distribution Solutions which are fully eliminated on consolidation and Mining division
Flat Nth America, 21%
Long Nth America, 5%
Flat Europe, 32%
Long Europe, 13%
Flat Sth America, 5%
Long Sth America, 7%
Africa, 5%
Asia, 10% Others, 1%
23
Steel shipments by region* – 9M 2013
EBITDA breakdown – 9M 2013
EBITDA and shipment breakdown
24
Strategy
24
In steel, capture a leading
position in attractive businesses
by leveraging our technical
capabilities and global scale
and scope
• Be the supplier of choice for
customers who value
distinctive products and
services
• Grow in markets with attractive
structures
• Minimize costs in commodity
businesses to lower risks and
capture boom-market potential
In mining, grow a world-class
business utilizing our financial
strength and diverse portfolio of
assets and businesses
• Invest to expand output at Tier I
and Tier II assets
• Optimize the value proposition
associated with our products’
value in use
• Be the supplier of choice for a
balanced mix of internal and
external customers
• Provide a natural hedge against
market volatility and potential
oligopolies
A clear
licence to
operate
The
best
talent
A strong
balance
sheet
An effective
organisational
structure
Active
portfolio
management
ArcelorMittal’s strategy
Our strategy is to leverage our distinctive attributes that enable us to achieve a
leading position in the most attractive components of the steel value chain
In operations, achieve best-
in-class competitiveness by
leveraging our technical
capabilities and diverse
portfolio of assets and
businesses
• Be the safest
• Concentrate production
at the best assets and run
them well
• Be cost competitive by
benchmarking, sharing best
practices, and investing to
optimize our multi-site footprint
• Innovate (product/process)
Enablers
25
Positioned for industry-leading returns
and value
• A global champion well positioned for new market opportunities
and servicing globalising customer industries
26
ArcelorMittal: the industry leader with a global presence backed by raw materials
Leading market
position in
developed world
Access to high
growth markets
Ability to service
global customers
Access to own
raw materials
Diversified
Leading supplier to
premium markets
Leading supplier to
high-growth markets
Significant self-
sufficiency in raw
materials
Higher and
more stable
returns
through the
cycle
Focussing on value drivers
27
Improved
EBITDA/tonne
($150/t normalised
target)
Capital
Efficiency
Returns > WACC
Cost
Leadership
Product
Leadership
Best-in-class
service
Portfolio
Optimisation
Focussed
investment
All levels of ArcelorMittal aligned with one goal improved returns on Capital
New $3bn management gains plan
Focussing on “Franchise” businesses
Focussed capital allocation
• We are backing our franchise businesses with capital
28
Franchise businesses are receiving the required capital to protect and expand
Approximate EBITDA split:
Steel shipment split:
Capital priority
Invest to protect
and expand
Focus on cost
cutting and
optimisation
Fra
nchis
e
Non
-Fra
nchis
e
55% of steel shipments
from businesses identified
as “Franchise” e.g.
• Global Autos,
• Brazil long,
• Sheet Piles
“Franchise” businesses
contribute 80% of “steel
EBITDA
Other steel
Franchise steel
Franchise steel
Other steel
Mining
Gap analysis completed in 2012 defined the priorities for 2013-2015 plan
Gap Analysis for Cost Savings by Process
34%
25%
20%
10%
11% Sinter & BF
Steel shop
Hot strip mill
Cold rolling mill & HDG
Others
29
Gap Analysis for Cost Savings per Main Drivers
Yield
Productivity
Others
Energy
29%
22% 21%
28%
2015F
3.0
3.0
2014F
2.0
2.0
2013F
1.0
0.8
0.2
New $3bn management gains program ($ billion)
Annualized savings
9M’13 achieved
Savings targets
• Bottom up plan across the group
• 2/3 variable cost and 1/3 fixed cost focussed
• Improvements in reliability, fuel rate, yield, productivity etc
• Business units plans rolled out and key personnel
accountable for delivery
• Leveraging extensive benchmarking opportunities within
the group
Cost improvement underway
Asset Optimization delivering
• Including “residual costs”, the targeted
run-rate savings of $1bn has been
exceeded
• Residual costs should disappear from the
system by 2014
• Savings are tangible and apparent in
improved reported results
30
Asset Optimization savings achieved ($ million)
Essential components have been announced: 1.200
1.000
200
400
0
800
600
3Q
’13
2Q
’13
1Q
’13
4Q
’12
3Q
’12
2Q
’12
1Q
’12
4Q
’11
Run Rate-Savings
Residual Costs
EBITDA showing clear benefits from Asset Optimization
4Q 2011: Extended idling of EAF in Madrid; Restructuring
costs at other Spanish, Czech Republic & AMDS
operations
1Q 2012: Extended idling of EAF & continuous caster at
Schifflange; further optimization in Poland and Spain
4Q 2012: Closure of 2 BF, sinter plant, steel shop and
continuous casters in Liege, Belgium decided; long term
idling of liquid phase at the Florange site
1Q 2013: Announced intention to permanently close the
coke plant & six finishing lines, in Liege; mothballing
Florange
3Q 2013: Industrial phase now complete and mothballing
of facilities underway. Now proceeding to the social plan
negotiations
31
Market outlook
32
Global apparent steel consumption (ASC)
growth forecast in 2013** (v 2012)
Global ASC expected to grow by ~ +3.5% in 2013
Source: * Markit. Purchasing managers indices for over 40 countries weighted by share of ArcelorMittal finished steel deliveries. ** ArcelorMittal estimates
ArcelorMittal weighted global manufacturing PMI*
Demand indicators have improved
+6.5% to +7.5%
Global
CIS
Brazil
China
EU27
US
~ +3.5%
+2.5% to +3.5%
+3% to +4%
-1.0% to 0%
-1.5% to -2.5%
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
400
500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
Jan-0
7A
pr-
07
Jul-07
Oct-
07
Jan-0
8A
pr-
08
Jul-08
Oct-
08
Jan-0
9A
pr-
09
Jul-09
Oct-
09
Jan-1
0A
pr-
10
Jul-10
Oct-
10
Jan-1
1A
pr-
11
Jul-11
Oct-
11
Jan-1
2A
pr-
12
Jul-12
Oct-
12
Jan-1
3A
pr-
13
Jul-13
Flat stocks at service centres
Months of supply (RHS)
End to destocking in US and China in 3Q’13
German inventories (000 MT)*
33
China service centre inventories (Mt/mth) with ASC%
* German inventory data available on quarterly basis since 2007
Brazil service centre inventories (000 MT)
End to Inventory drawdown in US and China during 3Q’13
US service centre total steel Inventories (000 MT)
2.0
2.2
2.4
2.6
2.8
3.0
3.2
3.4
3.6
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Jan-0
7
Ap
r-07
Jul-07
Oct-
07
Jan-0
8
Ap
r-08
Jul-08
Oct-
08
Jan-0
9
Ap
r-09
Jul-09
Oct-
09
Jan-1
0
Ap
r-10
Jul-10
Oct-
10
Jan-1
1
Ap
r-11
Jul-11
Oct-
11
Jan-1
2
Ap
r-12
Jul-12
Oct-
12
Jan-1
3
Ap
r-13
Jul-13
USA (MSCI)Months Supply
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2
4
6
8
10
12
14
16
18
20
22
Ja
n-0
7
Ap
r-0
7
Ju
l-0
7
Oct-
07
Ja
n-0
8
Ap
r-0
8
Ju
l-0
8
Oct-
08
Ja
n-0
9
Ap
r-0
9
Ju
l-0
9
Oct-
09
Ja
n-1
0
Ap
r-1
0
Ju
l-1
0
Oct-
10
Ja
n-1
1
Ap
r-1
1
Ju
l-1
1
Oct-
11
Ja
n-1
2
Ap
r-1
2
Ju
l-1
2
Oct-
12
Ja
n-1
3
Ap
r-1
3
Ju
l-1
3
Flat and Long
% of ASC (RHS)
34
Global apparent steel consumption China
NAFTA
EU27
Rest of World
700
600
500
400
300
200
100
0
2010 2009 2008 2007
+2%
+6.5% to +7.5%
+55%
2013F 2012 2011
ArcelorMittal estimates
200
180
60
160
40
100
140
80
120
-9% -1.5% to -2.5%
-30%
2013F 2012 2011 2010 2009 2008 2007
160
140
120
100
80
60
40
+7% -1%
-8%
2013F 2012 2011 2010 2009 2008 2007
550
500
450
400
350
300
250
200
150
100
50
+4% +2% +9%
2013F 2012 2011 2010 2009 2008 2007
Estimated 2013 ASC growth of ~ +3.5%
35
3Q’13 return to growth in world ex-China
demand
Global apparent steel consumption (ASC)*
(million tonnes per month) US and European apparent steel consumption (ASC)**
(million tonnes per month)
* ArcelorMittal estimates
** AISI, Eurofer and ArcelorMittal estimates
• China ASC +0.1% in 3Q’13 vs. 2Q’13
• China ASC 7.7% in 3Q’13 vs. 3Q’12 • EU ASC -9.5% in 3Q’13 vs. 2Q’13
• EU ASC +1.4% in 3Q’13 vs. 3Q’12
• Global ASC -1.1% in 3Q’13 vs. 2Q’13
• Global ASC +4.4% in 3Q’13 vs. 3Q’12
• US ASC +3.8% in 3Q’13 vs. 2Q’13
• US ASC +4.6% in 3Q’13 vs. 3Q’12
Back to Y-o-Y growth in 3Q’13; growth expected to continue in 2014
3
5
7
9
11
13
15
17
Jan-0
7
May-0
7
Sep
-07
Jan-0
8
May-0
8
Sep
-08
Jan-0
9
May-0
9
Sep
-09
Jan-1
0
May-1
0
Sep
-10
Jan-1
1
May-1
1
Sep
-11
Jan-1
2
May-1
2
Sep
-12
Jan-1
3
May-1
3
Sep
-13
EU27
USA
15
20
25
30
35
40
45
50
55
60
Jan-0
7
May-0
7
Sep
-07
Jan-0
8
May-0
8
Sep
-08
Jan-0
9
May-0
9
Sep
-09
Jan-1
0
May-1
0
Sep
-10
Jan-1
1
May-1
1
Sep
-11
Jan-1
2
May-1
2
Sep
-12
Jan-1
3
May-1
3
Sep
-13
Developing ex China
China
Developed
US construction improving; Europe stabilising
• USA non-residential beginning to pick-up
– US residential construction grows strongly, although growth rates beginning to slow (+20% y-o-y Jan-Aug’13). Home sales continue to improve, while permits stabilise
– Public non-residential output declining, but private slowly improving; Architectural Billings index (ABI) remains above 50 supporting expected pickup in 2014
• In Europe, construction still weak but no longer declining
– Eurozone construction PMI rebounded to almost 50 output still down y-o-y but up q-o-q
– German construction output is up y-o-y in 3Q’13, supported by strong labour market and increased purchasing activity
– Construction in Poland & UK seeing a rebound but markets in the South continue to be remain weak. However, 1H’13 seems to be the bottom with output up slightly in July and August
US residential and non-residential construction indicators
(SAAR) $bn*
36 * Source: US Census Bureau
** Source: Markit and The American Institute of Architects
Eurozone and US construction indicators**
200250300350400450500550600650700750
Jan-0
2
Jul-02
Jan-0
3
Jul-03
Jan-0
4
Jul-04
Jan-0
5
Jul-05
Jan-0
6
Jul-06
Jan-0
7
Jul-07
Jan-0
8
Jul-08
Jan-0
9
Jul-09
Jan-1
0
Jul-10
Jan-1
1
Jul-11
Jan-1
2
Jul-12
Jan-1
3
Jul-13
Residential
Non-residential
Exp
ansio
nC
ontr
actio
n
30
35
40
45
50
55
60
65
Jan-0
6A
pr-
06
Jul-06
Oct-
06
Jan-0
7A
pr-
07
Jul-07
Oct-
07
Jan-0
8A
pr-
08
Jul-08
Oct-
08
Jan-0
9A
pr-
09
Jul-09
Oct-
09
Jan-1
0A
pr-
10
Jul-10
Oct-
10
Jan-1
1A
pr-
11
Jul-11
Oct-
11
Jan-1
2A
pr-
12
Jul-12
Oct-
12
Jan-1
3A
pr-
13
Jul-13
Eurozone construction PMI
USA Architectural Billings Index
US residential construction improving, end to decline in Europe
Chinese industrial growth improving
• Industrial output has improved in the 3Q’13 up 10.1% y-o-y the best qtr since 1Q’12
• The turnaround is underpinned by strong growth in public investment, with Infrastructure growing by over 26% y-o-y in 3Q’13. We expect growth to slow but not significantly until mid-2014.
• Continued strong housing price rises and transactions have supported demand for constructional steel, as housing starts rebound, up over 17% y-o-y in 3Q’13.
• Flat products demand continues to be supported by robust growth in automotive production, up 13% y-o-y in 3Q’13
• While steel production remained high in 3Q’13 (782mt annualized), steel inventory continued to fall as is seasonal.
• Inventories have stabilized through Sept/Oct and are now up y-o-y, supporting our expectation of a small q-o-q decline in steel production during Q3’13
37
Crude steel finished production and inventory (mmt)
* Mma refer to months moving average
China infrastructure investment 3mma* (Y-o-Y)
0
3
6
9
12
15
18
21
0
10
20
30
40
50
60
70
80
90
100
Jan-0
7
Ap
r-07
Jul-07
Oct-
07
Jan-0
8
Ap
r-08
Jul-08
Oct-
08
Jan-0
9
Ap
r-09
Jul-09
Oct-
09
Jan-1
0
Ap
r-10
Jul-10
Oct-
10
Jan-1
1
Ap
r-11
Jul-11
Oct-
11
Jan-1
2
Ap
r-12
Jul-12
Oct-
12
Jan-1
3
Ap
r-13
Jul-13
Steel inventory at warehouses (RHS)
Finished steel production (LHS)
Steel inventory at mills (RHS)
Underlying demand robust in China, led by rebound in property market
-15%
0%
15%
30%
45%
60%
75%
Jan-0
7
May-0
7
Sep
-07
Jan-0
8
May-0
8
Sep
-08
Jan-0
9
May-0
9
Sep
-09
Jan-1
0
May-1
0
Sep
-10
Jan-1
1
May-1
1
Sep
-11
Jan-1
2
May-1
2
Sep
-12
Jan-1
3
May-1
3
Sep
-13
38
Balance Sheet
Cash flow priorities
39
Maintain competitive
position
Fund Mining
growth plan
Reduce NFD to
target level
Strong operations
with sustainable
balance sheet
Increase
Dividends
Increase
CAPEX Further
reduce
NFD
Dividends and growth capex will only be increased further once NFD ≤$15bn
40
Net debt ($ billion) Average maturity (years)
Liquidity ($ billion) Bank debt as component of total debt** (%)
Balance sheet structurally improved
17.8
-45%
3Q 2013* 3Q 2008
32.5
3Q 2013
6.4
3Q 2008
2.6
3Q 2013*
14.5
3Q 2008
12.0
* At September 30, 2013 cash included $42 million and debt included $202 million held at Annaba, which has since been classified as asset/liabilities held for sale.
** ArcelorMittal estimates
3Q 2013
10%
3Q 2008
84%
Balance sheet fundamentals improved
41
Liquidity and debt maturity profile
Debt maturities ($ billion) Liquidity at September 30, 2013 ($ billion)
Liquidity lines:
• $4bn syndicated credit facility matures 06/05/15
• $6bn syndicated credit facility matures 18/03/16
• Continued strong liquidity
• Average debt maturity 6.4 years
Debt maturity: Ratings
• S&P – BB+, negative outlook
• Moody’s – Ba1, negative outlook
• Fitch – BB+, stable outlook
12
10
8
6
4
2
0
>2017
10.3
2017
2.9
2016
2.4
2015
2.5
2014
3.7
2013
0.5
Bonds Convertibles Other Commercial Paper
Commercial paper
Short term & others Cash
Unused credit lines
Debt due
in 2013
0.5 0.1 0.4
Liquidity
at 30/9/13
14.5
10.0
4.5
Continued strong liquidity position and average debt maturity of 6.4 years
Working capital
42
OWCR and rotation days* ($ billion and days)
Business will invest in working capital as conditions necessitate
* Rotation days are defined as days of accounts receivable plus days of inventory minus days of accounts payable. Days of accounts payable and inventory are a function
of cost of goods sold of the quarter on an annualized basis. Days of accounts receivable are a function of sales of the quarter on an annualized basis.
0
4
120
90
60
30
0
28
24
20
16
12
8
3Q
10
2Q
10
1Q
10
3Q
09
2Q
09
1Q
09
4Q
08
3Q
12
2Q
08
1Q
08
4Q
07
2Q
13
3Q
08
1Q
13
4Q
12
2Q
12
1Q
12
4Q
11
3Q
11
2Q
11
1Q
11
4Q
10
4Q
09
3Q
07
2Q
07
1Q
07
3Q
13
62
Rotation days - RHS Working capital ($ billion) - LHS
43
Net debt
Net Debt ($ billion) & Net Debt/LTM reported EBITDA* Ratio (x)
* Based on last twelve months (LTM) reported EBITDA. Figures prior to 1Q’12 have not been recast on quarterly basis for adoption of new accounting standards implemented from 1.1.13
35
30
25
20
15
10
5
0 0.0
4.0
3.0
2.0
1.0
2Q
12
1Q
12
4Q
11
3Q
11
2Q
11
1Q
11
4Q
10
3Q
10
2Q
10
1Q
10
4Q
09
3Q
09
2Q
09
1Q
09
4Q
08
3Q
08
2Q
08
1Q
08
2Q
13
3Q
07
2Q
07
1Q
07
3Q
13
4Q
07
1Q
13
4Q
12
3Q
12
2.7
Net Debt / LTM EBITDA Net Debt ($ billion) - LHS
Net debt increased $1.6bn to $17.8bn due to negative cashflow from operations
(including working capital investment), offset in part by disposal proceeds
44
• Asset sales of $4.5 billion* since Sept 2011; $3.4 billion cash
received at end of 3Q 2013 (non-comprehensive list): MacArthur Coal and BNA stake disposals, $0.9 billion in 4Q’11
Erdemir: 1/4 of 25% stake sold raising $264 million cash in 1Q’12
Skyline: sale to Nucor of 100% of ArcelorMittal’s stake in Skyline Steel’s operations in
NAFTA/Caribbean for $676 million in 2Q’12
Enovos: sale to AXA of 23.5% interest for €330 million (Initial 50% payment received in 3Q’12 with
balance (+ interest) over subsequent periods) ; Total of $410 million
Paul Wurth**: sale to SMS Holding of 48.1% interest for €300 million ($388m)
Kalagadi: agreed sale of 50% stake for R3.9 billion (approximately $460 million)
AMMC: agreed sale of 15% stake with off take agreement to Posco and China Steel for $1.1 billion
Reduced ownership of Baffinland to 50% with Nunavut Iron ore increasing its share of funding for
the project
Annaba: Reduced stake to 49% from 70%, Government increased stake to 51%; No cash but
instead to facilitate expansion of capacity
Sale of additional stake in Erdemir: Sale of 233,169,183 shares to $267 million to be recognized in
4Q 2013. Following completion of sale, ArcelorMittal will hold approximately 12.08% of Erdemir’s
share capital
* Includes Macarthur, Boasteel-NSC/Arcelor (BNA) Automotive, Erdemir, Skyline, Enovos, Kalagadi, AMMC and Paul Wurth .
** Paul Wurth divestment had $70 million impact on ArcelorMittal net debt as sale cash proceeds were more than offset by the deconsolidation of Paul Wurth’s cash balance minus its debt
on balance sheet . Paul Wurth’s cash balance primarily represented customer advances held by customers of Paul Wurth.
Asset disposal program
Asset sales of $4.5 billion since September 2011
China’s steel demand following
precedents
46 Note: Between 1900 and 1949 crude steel production per capita as approximation for demand as no data available
Sources: WSA for crude steel ASC; IHS Global Insight and UN Data statistics for population; ArcelorMittal Corporate Strategy team analysis
0
5000
10000
15000
20000
25000
30000
35000
40000
1900
1905
1910
1915
1920
1925
1930
1935
1940
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
China
S. Korea
France
USA
Germany
Economic development is characterized by strong, early phase steel demand
growth – China is no different
Cumulative crude steel apparent consumption (kg/capita)
China steel demand growth is sustainable near term
Steel demand growth rates in China
have trended down
0
5
10
15
20
25
30
35
0
0.5
1
1.5
2
2.5
3
3.5
2001 2002 2003 2004 2005 2006 2007 '08/09 2010 2011 2012 2013F
Ratio ASC/GDP Growth (LHS) ASC growth (RHS) Real GDP growth (RHS)
Source: GDP: IHS Global Insight, ASC: ArcelorMittal Corporate Strategy estimates (Q2’2012)
China annual growth rates of GDP and
ASC (apparent crude steel consumption), (%)
7.5%
11.3%
12.7%
14.2%
9.6% 9.2%
10.5%
7.0%
9.3%
7.8% 7.8%
11th plan
2005 2006 2007 2008 2009 2010 12th plan
2011 2012 2013F
The announced slowing of China’s GDP
growth rate is consistent with 12th 5-Year Plan
China’s steel demand growth have trended down
47
China net export data
48
Chinese imports decreased y-o-y in September but still up 15% YTD
• China net exports of 4.9mt In September 2013 (lowest since Feb ‘13)
• 2013 YTD exports of 60mn tonnes as compared to 55mn for same period in 2012
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
China trade data, NSA, mt Exports Imports Net-trade
49
Mining
Mont Wright, Canada
South Africa
Iron Ore**
* Includes share of production
** Includes purchases made under July 2010 interim agreement with Kumba (South Africa)
(1) Following an agreement signed off in December 2012, on February 20th, 2013, Nunavut Iron Ore subscribed for new shares in Baffinland Iron Mines Corporation which diluted AM’s stake to 50%
(2) January 2nd, 2013 AM entered into an agreement to sell 15% of its stake in AM Mines Canada to a consortium lead POSCO and China Steel Corporation (CSC).
(3) In November 2012, ArcelorMittal signed a share purchase agreement with Mrs. Mashile-Nkosi providing, subject to various conditions, for the acquisition by her or her nominee of ArcelorMittal’s 50% interest in
Kalagadi Manganese.
Mining business portfolio
Key assets and projects
USA Iron Ore
Minorca 100%
Hibbing 62.31%*
Mexico Iron Ore
Las Truchas &
Volcan 100%;
Pena 50%* Liberia
Iron Ore 70%
Algeria
Iron Ore
70%
Brazil
Iron Ore
100%
New projects /
exploration
Existing mines
Mauritania
Iron Ore
exploration
license
Canada
AMMC 100% (2)
Bosnia
Iron Ore
51%
USA Coal
100%
South Africa
Manganese
50% (3)
Indian Iron
Ore & Coal
exploration
license
Ukraine
Iron Ore
95.13%
Kazakhstan
Coal
8 mines 100%
Kazakhstan
Iron Ore
4 mines 100%
Russian Coal
98.64%
Iron ore mine
Non ferrous mine
Coal mine Coal of Africa
15.75%
Canada
Baffinland 50%(1)
50
Geographically diversified mining assets
51
Iron ore reserve and resource estimates Strong reserve and resource basis to support sustainable growth
• Highlights of 2012:
– Resource to Reserve conversion exceeded mining depletion to provide a net increase of ~500Mt in iron ore reserves
– Resource to reserve conversion was largely offset by resource additions due to exploration and re-evaluation of known mineralization
• Resource and reserve estimates supported by internal technical reports
• Updated life of mine plans with discounted cash flows to support demonstration of economic viability for all ore reserve estimates
• All resource estimates have potential for economic extraction to support future potential growth
2012 Iron ore reserves and resources (million metric tonnes)
Region
Proven &
probable
reserves
Measured &
indicated
resources
Inferred
resources
Mtonnes %Fe Mtonnes %Fe Mtonnes %Fe
Canada (AMMC) 1,952 28 4,931 29 1,082 29
Canada (Baffinland) 375 65 41 65 444 66
USA 473 20 421 20 92 23
Central America 395 26 146 26 78 27
South America 121 58 321 38 131 36
West Africa 526 48 39 44 2,061 41
Eastern Europe 301 36 866 38 0 0
Central Asia 188 40 1,455 40 123 34
TOTAL 4,331 35 8,219 32 4,010 39
9%
9%
7%
Canada (Baffinland)
12%
USA
11%
Central America
3% South America
West Africa
45%
Eastern Europe Central Asia
4%
Canada (AMMC)
2012 Geographical breakdown of iron ore reserves & resources
2012 Iron ore reserves of 4.3bn metric tonnes
52
Comparable margin to peers
* Notes: ArcelorMittal EBITDA margin based on market-priced tonnes (i.e. excludes cost-plus tonnes from Revenue and EBITDA); “Producers” include BHP, Fortescue, Kumba, Rio Tinto
and Vale. Competitor data sourced from public information and has been prepared on a comparable periodic basis.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Arc
elo
rMitta
l*
Pro
du
ce
r 5
Pro
du
ce
r 4
Pro
du
ce
r 3
Pro
du
ce
r 2
Pro
du
ce
r 1
Iron ore EBITDA margin 2012 FY*
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2012 2011 2010 2009 2008
ArcelorMittal Mining EBITDA ($ Millions)
ArcelorMittal Mining is competitive on cost and quality
Mining growth plans on track
• AMMC: expansion to 24mt on track – Ramp-up proceeding well
– 18.5mt production forecast in 2013 vs. 15mt in 2012
– 24mt production rate to be achieved by year-end 2013
– Unit costs benefiting from higher volumes
• Liberia: phase 1 shipments ahead of
expectations in 2013; phase 2 underway – Phase 1: New production record in 3Q’13; 3.7mt shipped
9M’13 (+89% vs. 9M’12)
– Phase 2: Project underway for 15mtpa premium sinter feed
to replace 4mtpa DSO by 2015
– All environmental permits for phase 2 received
– Major equipment procurement ongoing
– Civil works commenced at the mine and concentrator sites
• Baffinland: early revenue phase underway – 3.5mtpa of DSO trucked to Milne Inlet for export during open-
water season by 2015
– $700m project capex in 50:50 JV
– Summer season open-water sea lift of construction materials
and fuel completed in Q3 ahead of plan
53
AMMC: Port Cartier
Liberia: Offshore transshipment
Baffinland: construction camp
On track to achieve 84mt own iron ore capacity in 2015
ArcelorMittal Mines Canada
(AMMC)
• Expansion of Mont Wright mine at AMMC and
concentrate capacity to total 24Mt p.a. (from 16Mtpa
post operational improvements) concentrate and
pellets
• Expansion capitalising on existing infrastructure,
product quality, experienced workforce and
advantageously located with easy access to
European/US markets
• Capex $1.6bn* for mine, concentrator plant
expansion and infrastructure upgrade with cash cost
of circa $38/tonne post expansion
• Potential for future expansion given size of resource
base and existing infrastructure
• Port infrastructure 30-32Mtpa without significant
additional capex
• Ability to expand production capacity beyond
30Mtpa
* Capex of $1.6bn excludes expansion of Pellet line which has not yet been committed to. 54
• Low cost, efficient operations with further
improvement potential
• Ongoing initiatives to continue improving
operating equipment efficiency
• Access to low-cost, long-term hydro electric
generating station
15 8
24 6
30
Potential
Expansion
2013F
1
2012
Spirals
Concentrator
Iron ore production and capacity (million Mt) AMMC expansion from 16Mt to 24Mt complete
Strategic advantage from exclusive use of own rail and port facilities
Expansion
• Commission of new spirals line at concentrator
• New trucks operational
• Additional rail sidings completed
Railway
• Wholly-owned 420-km railway infrastructure
• Longer train with two locomotives commenced
• Linking mining operations to Port-Cartier
Port-Cartier
• One of Canada’s largest private ports
• Handling 160,000+ tonne ships
• Currently running at ~350 vessels per year
• Ability to handle cape-size vessels all year
round
55 55
ArcelorMittal Mines Canada (AMMC) Expansion from 16Mt to 24Mt complete
Expansion supported by captive infrastructure with operating leverage
Liberia Phase 1 completed
56
Industrial location of mine
All marketable tonnes
Guinea
Atlantic Ocean
Liberia
Ivory Coast Yekepa
Buchanan
Sierra Leone
Railway link from Yekepa
to Buchanan (240km)
Phase 1 DSO (‘Direct Shipping Ore’)
• Construction:
• 240km rail rehabilitation completed
• Buchanan port and material handling
facilities initial upgrade completed
• Shipment details
• First DSO product shipped Sept 2011
• 40% to Europe (natural market), 60% to Asia
• Costs
• Competitive cash cost
• Cape size trans-shipment facilities started
• Offshore loader
• Commenced cape size off shore loading Dec
2012 to further increase margins
• Scheduled to load largest cape size in
Western Africa
• Focus on long haul customers
Liberia expansion progress on track
Liberia trans-shipment
Liberia Phase 2 rationale
57
• Expansion to 15mtpa capacity by 2015
• Investment in a concentrator approved
• Project and mine planning currently underway
• Fully utilizing our wholly owned infrastructure
• Managing project implementation to reduce
near term capex without compromising
Phase 2
• Staged approach
• Align product to market
15
4
2015 2012
Phase 1 Phase 2
Production capacity (Million tonnes) Phase 2 – Higher grade material
60% grade
(high silica) DSO
capex $0.7bn
66% grade
(low silica)
concentrate
capex ~$1.5bn
Focus on Phase 2 to develop 15Mt of higher quality sinter feed
60% grade
(high silica) DSO
capex $0.7bn
66% grade
(low silica)
concentrate
capex ~$1.5bn
60% grade
(high silica) DSO
capex $0.7bn
66% grade
(low silica)
concentrate
capex ~$1.5bn
66% grade
(low silica)
Sinter feed
Baffinland Iron Ore Mines expansion
update
Foxe Basin
58
Product
• High grade: 66%+ Fe iron – ‘direct shipping pellet’
and fine ore (no processing or pelletization required)
• Products expected to achieve full premium value
ERP phase underway : Road route
Proposed phase 2: Rail
Background
• In Dec. 2012, ArcelorMittal agreed with
minority shareholder Nunavut Iron Ore (NIO)
to increase NIO’s interest in Baffinland from
30% to 50%
• ArcelorMittal will retain a 50% interest in the
project as well as operator and marketing
rights
Project progress
• In Dec. 2012, completed the environment
assessment process and received approval of
“The Project Certificate”* by the Canadian
government
• Negotiations are progressing with the
Qikiqtani Inuit Assoc. on the completion of the
Inuit Impact and Benefits Agreement (IIBA),
prioritizing Inuit participation in the project
Early Revenue Phase (ERP) has been approved
Early Revenue Phase (ERP) underway:
Road route 3.5MT production capacity p.a. in 2015
* The Project Certificate relates to the full original scope of the Mary River project expansion
Baffinland Early Revenue Phase:
3.5MT production rate in 2015
59
Proposed Early Revenue Phase rationale
• ERP budget approx. US$700m commenced in 1Q 2013
• Enables an early mining phase that requires less capital investment than
full project, creating training, employment, business opportunities for local
region
• ERP will demonstrate quality of product and ability to operate
ERP components and difference between full rail project
• ERP requires trucking of ore to Milne Inlet, loading of ore in Milne Inlet,
and shipping of ore from Milne Inlet to markets
• Requires upgrades of the road connecting Milne Inlet and mine site
• Mining and trucking of 3.5mtpa from Deposit 1 to Milne Inlet throughout
the year
• Shipping of ore from Milne Inlet during “open water season”
• Anticipate first ore to be shipped in 2H 2015, all product tonnage targeted
for Europe
Environment permitting
• Existing permits allow work to commence in 3Q’13
• Planned modification to existing permit to allow further
optimization: doubling of fuel capacity at Milne Inlet in 2013
• Completion of ERP amendments to “The Project Certificate” and licenses
scheduled in 1H 2014
Mary River Project is now a phased project –
ERP underway, Rail Phase to be considered according to market conditions
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
To
nnes
Cost plus tonnage Marketable tonnage Total Potential
Potential growth beyond current plan
Potential brownfield and greenfield projects under study, primarily marketable
2015 iron ore target of 84MT production capacity (excluding “potential” projects and strategic contracts)
60 2010 to 2012 represents actual production. 2013 onwards, capacity is being reflected in the above graph.
Growth supported by pipeline of brownfield and greenfield projects
Growth project pipeline (million tonnes)
Focus on cost as well as growth
61
Relentless focus on cost control
• Operational excellence, rigour and discipline
underway across assets
• Share and apply best practice leveraging internal
and external benchmarks
• Key focal points:
• Labour productivity
• Maintenance and reliability
• Mining plan optimization
Rigorous capex investment management
• Focus on on-time and budget delivery
• Central project management office
• Regular expert project reviews
• Standardised projects controls
• Tracking time/cost divergence and risks 1st
US
$ F
OB
C
ost per
ton
AMMC ArcelorMittal
Liberia
Post capex FOB cash cost
Positioning key assets low on the cost curve
* Focus on AMMC and ArcelorMittal Liberia as our largest marketable tonnes assets. Illustrative for post expansion of AMMC
Illustrative cash cost curve (marketable tonnes)
post expansion
Relentless focus on costs and capex monitoring
2nd 3rd 4th
Quartile
Focus on value
and OEE
initiatives Focus on
quality
Coal business
Key assets and projects for coal business
New projects
Existing mines
USA Coal
100%
Indian
Iron Ore &
Steam Coal
Kazakhstan
Coal
8 mines 100%
Russian Coal
98.64%
Coal mine
Coal of Africa
15.75%
interest
62
New projects
Existing mines
New projects
Coal mine
Existing mines
New projects
Coal mine
Existing mines
New projects
Region
Proven & probable
reserves
Measured &
indicated
resources
Inferred
resources
Mtonnes %Yield Mtonnes Mtonnes
Kazakhstan 173 48 551 8
Kuzbass 29 64 60 38
Princeton 116 59 92 4
TOTAL 318 53 703 50
2012 Coal reserves and resources (Million metric tonnes)
Coal asset geographically diversified 318 million tonnes of reserves
63
Auto
Steel grades and process optimization support OEMs’
effort towards safety, fuel economy and reduced CO²
emission
Source: ICCT
Global CO2 (or equivalent) regulation trends
*New European Driving Cycle is designed to assess the emission levels of car engines and fuel economy in passenger cars
Gra
ms C
O²/
km
no
rma
lise
d to
NE
DC
*
• Global automotive manufacturing presence through own facilities
and JVs
• Global distribution network
• Unique product offerings to meet OEMs demand for safety, fuel
economy and reduced CO2 emission (S-in Motion 20% weight
reduction)
• Relative stability of margin: 20-30% of average selling price is
attributable to the value added nature of the product
• Strong market share in our core markets
• Strong and consistent investment in R&D
No 1 in automotive steel
2012 auto shipment by geography
South Africa 2%
Europe
54%
South America 6%
Nafta
38%
Worldwide ArcelorMittal R&D involving automotive suppliers / industrial partners
New ultra lightweight car door solutions
Short & medium term ULSS show that steel remains the most cost-effective
material for automotive applications
1. Door inner AM05 0.8mm /0.6mm
2. Waist beam MS1500 0.9mm & DP780
3. Door beam Usibor®1500P
4. Hinge reinforcements Usibor®1500P
5. Outer panel FF280DP (490DP) 0.6mm
Thin gauge approach:
• 29% to 34% weight savings for D & C segment doors
• Performance validation of thin gauge outer till 0.5mm thanks to multilayered patch for
stiffness purpose
• New steel grades development identified for outer panel, door beam
New design approach:
• 28% weight savings for D segment door
• Structural holistic load path optimization
• Use of available steel grades
• Accent on manufacturing technologies development
Baseline Front Door S-in motion S1
14.5kg 18.3kg 10.5-12kg
Medium term Short term
C-segment vehicle
13.3kg
Baseline Front Door S-in motion S1 Lightweight steel door
Medium-term steel solutions for C & D-segment cars to get closer to Aluminum
Source: AM estimates as per annual report
66
Franchise steel capex
Monlevade expansion project in Brazil
restarted :
• Phase 1 (approved) focuses on downstream
facilities and consists of:
– a new wire rod mill in Monlevade with
additional capacity of 1,050ktpy of coils with
capital expenditure of $280m with $140m
remaining;
– Juiz de Fora rebar capacity increase from
50 to 400ktpy (replacing some wire rod
production capacity) and meltshop capacity
increase by 200ktpy
• Expected completion in 2015
• A decision whether to invest in Phase 2 of the
project, focusing on the upstream facilities in
Monlevade (sinter plant, blast furnace and
meltshop), will be taken at a later date
67 67
Selective steel projects: Monlevade (LCA)
Expansion supported by strong market for long products in Brazil
New rolling mill at Acindar (Argentina)
• New rolling mill (Huatian) in Santa Fe
province to increase capacity by
0.4mt/year of rebars from 6 to 32mm for
civil construction:
– New rolling mill will also enable
Acindar to optimize production at its
special bar quality (SBQ) rolling mill in
Villa Constitución, which in future will
only manufacture products for the
automotive and mining industries
• Estimated capital expenditure of ~$100
million
• Expected completion in 2016
68 68
Selective steel projects: Acindar (LCA)
Expansion supported by strong construction market in Argentina and exports
Selective steel projects: Dofasco (FCA)
• Optimize cost and increase
shipment of galvanized products
by 0.3mt / year
– Restart construction of heavy gauge
galvanizing line #6 (capacity 660ktpy)
and closure of line #2 (capacity
400ktpy) increased shipments of
galvanized sheet by 260ktpy, along with
improved mix and optimized cost
– Line #6 will incorporate AHSS capability
and is the key element in a broader
program to improve Dofasco’s ability to
serve customers in the automotive,
construction, and industrial markets
• Expected completion in 2015
69 69
Expansion supported by strong market for galvanized products
Selective steel projects: VAMA-JV with Hunan Valin
• VAMA: JV between ArcelorMittal and
Hunan Valin which will produce steel for
high-end applications in the automobile
industry, supplying international
automakers and first-tier Chinese car
manufacturers as well as their supplier
networks for rapidly growing Chinese
market
• Construction of automotive facility, the main
components which are:
– State of the art pickling tandem CRM
(1.5mt)
– Continuous annealing line (0.9mt), and
– Hot dip galvanizing line (0.5mt)
• Estimated capital expenditure of ~$850
million (100% basis)
• First coil to be produced in 2H 2014
70 70
Expansion supported by robust Chinese automotive market: > 50%
growth to 25 million vehicles by 2018
71
Contacts
Daniel Fairclough – Global Head Investor Relations
+44 207 543 1105
Hetal Patel – UK/European Investor Relations
+44 207 543 1128
Valérie Mella – European and Retail Investor Relations
+44 207 543 1156
Maureen Baker – Fixed Income/Debt Investor Relations
+33 1 71 92 10 26
Thomas A McCue – US Investor Relations
+312-899-3927
Lisa Fortuna – US Investor Relations
+312-899-3985