European Select Conference, Napa California. June 19-20, 2014

Transcription

1 European Select Conference, Napa California June 19-20, 2014

2 Disclaimer Forward-Looking Statements This document 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. Forwardlooking 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, 2013 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. 1

3 Global scale, regional leadership NAFTA Brazil* Europe Mining ACIS Revenues ($bn) % Group** 25% 13% 51% 7% 11% EBITDA ($bn) % Group** 20% 28% 23% 29% 4% Shipments (M mt) *** 12.4 % Group 27% 12% 46% 15% 232,000 employees serving customers in over 170 countries Global scale delivering synergies The presentation in this slide reflects the reporting segments that the Company intends to adopt as from its first quarter 2014 results. The change in segments results from the Company s organizational and management restructuring announced in December * Brazil includes neighboring countries ** Figures for others and eliminations are not shown; *** Iron ore shipments only 2013 data 2

4 Largely exposed to the developed markets of NAFTA and EU Sales as % of total Group CANADA 4% MEXICO 3% USA 20% NAFTA 26% EU 39% BELGIUM 2% FRANCE 6% GERMANY 9% ITALY 3% SPAIN 5% Others 6% EU 15 30% CZECH REPUBLIC 2% POLAND 4% ROMANIA 1% Others 2% Rest EU 9% EU 39% Africa, 7% BRAZIL 8% ARGENTINA 2% Others 3% LATAM 13% LATAM 13% Africa 7% Approximately 2/3 of sales to developed markets 2013 data 3

5 Focus Safety Mining growth Auto franchise Cost optimization Progress Volumes and margins Balance sheet Outlook Market outlook $150/t normalized profitability 4

6 Continued improvement in safety Health & Safety Lost time injury frequency (LTIF) rate* Mining & steel, employees and contractors Q 14 Our goal is to be the safest Metals & Mining company * LTIF = Lost time injury frequency defined as Lost Time Injuries per worked hours; based on own personnel and contractors 5

7 Iron ore capacity development Marketable iron ore shipments growth (Mt) Reinforced Management New CEO Bill Scotting In place since mid % 35 ~ +15% Delivering on Volumes 10Mt capacity added in 2013 Marketable shipments +22% F Delivering on Cost Average iron ore concentrate cash costs maintained in 2013 But projected to decline 7% in 2014 Iron ore production capacity (Mt) Identifying Growth Stretch production beyond 84Mt at minimal additional capex Opportunities identified at Liberia and AMMC F Stretch Leveraging infrastructure to bring resources to market and reduce costs 6

8 Liberia growing to 15Mt with further stretch potential Liberia iron ore capacity forecast (MMt) 2014 DSO 20 5 Phase 2 Sinter feed DSO (Stretch) DSO Revised phase 2 project: Product analysis and additional mine planning have identified potential to supply 15Mtpa high quality sinter feed at significantly lower cost than concentrate for first 8-10yrs Investment capex estimate of circa $1.7 billion Stretch opportunity: Phase 2 - Sinter feed Better definition of ore body and mine plan confirmed potential to continue DSO phase for additional 6 years Expansion to 20Mtpa capacity* Stretch Incremental investments enable benefits of scale on rail, port and SGA Stretching existing assets with limited capex to maximize potential value * subject to final approvals 7

9 AMMC expanded to 24Mt with potential to stretch to 30Mt AM Mines Canada Iron ore production/ capacity (MMt) Production Incremental debottlenecking Potential further debottleneck Concentrator and spirals expansion complete Potential 6MT expansion - low capex intensity F Daily records show potential in system Stretch potential Incremental investments for debottlenecking as required: Mt Wright mine optimization, Fire Lake expansion (richer ore) and crusher debottlenecking Rail winter reclaim capability, long train capability, additional sidings Additional conveyor capacity at port Significant cost benefits from scale Potential to expand beyond 30Mt at low capital intensity Incremental steps to maximize the demonstrated potential of the system * subject to final approvals 8

10 Global automotive Award winning Automotive solutions ArcelorMittal s R&D efforts continue to generate cost-competitive solutions for the automotive industry's light-weighting requirements Industry s first laser-welded, hot-stamped door ring provides exceptional passenger safety performance improvement with 4Kg saving in weight At the same time, we are now promoting our solution for an all steel door that is very close to an aluminium door in weight; evaluation is currently underway at various OEMs. Volkswagen is using high strength steels in increasing amounts. It is a very cost effective way of reducing weight. Using new innovations in steel engineering it is possible to reduce weight without the use for more costly materials such as aluminium and carbon fibre. Armin Plath, VW s Head of Materials Research and Manufacturing The door ring enhances the safety performance of the MDX to meet today s stringent roof crush and side impact standards, as well as the rigorous new IIHS small overlap front crash test. Ultimately, the cost effective, strong yet lightweight door ring helps deliver better fuel economy and improved overall performance to our customers. James A. Keller, vice president, auto development strategy, Honda R&D Americas, Inc Committed to producing innovative steel solutions for our automotive customers 9

11 Auto franchise developments AM/NS Calvert acquisition complete Well placed to serve growth markets of SE US and Mexico State of the art plant capable of producing Advanced High Strength Steels Integration process underway; Steel operations ~80% utilized; AM/NS Calvert EBITDA positive in March, inline with expectation of EBITDA positive Yr1 and free cash flow positive in Yr2 Calvert: Cold rolling mill VAMA project nearing completion VAMA China automotive steel JV State-of-the art facility to serve the fast-growing China automotive industry; production has started in June 2014 Initial capacity of 1.5 million tons expandable up to 2.3 million tons should support ~10% share of the market We are investing in our footprint to capture growth in expanding markets 10

12 Cost savings ahead of schedule Run-rate of Asset Optimization savings at year end ($ million) $3bn management gains program ($ billion) Annualized savings Residual Costs Realised Savings Savings targets FY13 annualized savings achieved F 2015F Asset optimisation program essentially complete Including residual costs, the targeted run-rate savings of $1bn has been clearly exceeded Further incremental EBITDA impact in 2014 as residual costs disappear from the system 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 optimisation is an ongoing effort 11

13 Steel and Mining volume growth 23% underlying improvement in EBITDA vs. 1Q 13* Steel shipments up 2.4% YoY Market priced iron ore shipments up 28% YoY Iron ore marketable shipments 28% Steel shipments 2.4% Q 13 1Q 14 1Q 13 1Q 14 Our growing volumes and cost progress are driving improved results * EBITDA in 1Q 2013 of $1,565 million included the positive impact of a $47 million fair valuation gain relating to the acquisition of an additional ownership interest in DJ Galvanizing in Canada and $92 million of DDH income 12

14 Steel margin expansion Steel only EBITDA/t increased $14/t vs. 1Q 13 on underlying basis NAFTA segment negatively impacted by severe weather and higher energy costs All other geographic segments delivered improved EBITDA vs. 1Q 13 Steel Segment EBITDA per tonne (US$) on underlying basis* NAFTA Brazil** Europe ACIS*** -25% +20% +56% > 300% Q 13 1Q 14 1Q 13 1Q 14 1Q 13 1Q 14 1Q 13 1Q 14 Profitability of the steel business is clearly improving *Underlying EBITDA in 1Q 13 excludes positive impact of $47m fair valuation gain relating to the acquisition of an additional ownership interest in DJ Galvanizing in Canada (NAFTA) and $92m of DDH income (Europe); ** Brazil includes Brazil and neighbouring countries; *** ACIS: 1Q 13 was negatively impacted by a $67m loss resulting from afire at Vanderbijlpark (South Africa). Excluding this impact YoY improvement was 19% 13

15 Stronger balance sheet Net debt* progression ($bn) Pension/OPEB net liability ($bn) reduced >20% in Pension (0.2) -2.6 (1.7) (0.7) OPEB 6.0 ER 0.6 3Q 11 1Q 14 Medium term target Net deficit 2012 Cash contribution net of P&L charges** DBO*** reduction Assets return Net deficit 2013 Lower net debt (lower interest) and lower pension liabilities (lower financing costs) * 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); ** Including pension, other post employment benefits (OPEB) and early retirement (ER); *** DBO refers to Defined Benefit Obligation (weighted average interest rate increase from 4.5% in 2012 to 5.1% in 2013) 14

16 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Contraction Expansion PMI indicates continued demand growth ArcelorMittal weighted global manufacturing PMI* 60 Global apparent steel consumption (ASC) growth forecast in 2014** (v 2013) 55 US % 50 EU % 45 China % 40 Brazil % 35 (latest data point: May'14) (latest data point: Apr 14) CIS -2.0% to 0% Global % The demand outlook for core markets in 2014 continues to indicate growth Source: * Markit. Purchasing managers indices for over 40 countries weighted by share of ArcelorMittal finished steel deliveries. ** ArcelorMittal estimates 15

17 Q4 13 Asset Optimization Steel investments Impact of incremental volumes (assuming 95Mt steel shipments) Impact from normalization of iron ore prices Impact of management gains program Impact of ACIS turnaround Impact of Industry profitability at higher utilization rates TARGET Roadmap to normalized profitability If our markets expand by ~15% (i.e. global shipments back to >95mt) then we believe $150/t EBITDA is achievable 15 $138/t $150/t 22 Stretch 9 6 $91/t 3 4 Plan 13 Significant portion of EBITDA recovery plan is controllable 16

18 Consistent improvement in health and safety Strong focus on mining growth plan, automotive franchise and advanced high strength steel solutions Significant progress in cost optimization and balance sheet strength Steel and mining volume improvement, steel margin expansion Positive outlook for ArcelorMittal core markets Roadmap to normalized profitability $150/t EBITDA Improvement, focus and growth in core markets to drive profitability 17

19 Appendix 18

20 Strategy 19 19

21 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 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 operations, achieve bestin-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) 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 Enablers A clear licence to operate A strong balance sheet An effective organisational structure Active portfolio management The best talent 20

22 Recap 2013 Strategic Report Card EBITDA 2013 Investor Day Targets 2013 Performance Medium term target $150/t Underlying EBITDA up 10.7% 2013 EBITDA/t = $82 Q4 13 EBITDA/t = $91 Medium Term Target Update Medium term remains $150/t Shipments Increase to 95Mt medium term (5yr CAGR 2.5%) Shipments increased 0.6% due to contraction of core markets Increase to 95Mt medium term (5yr CAGR 2.5%) Net Debt Mid year 2013 target $17bn Medium term target $15bn Mid year 2013 NFD = $16.2bn Year end NFD = $16.1bn Medium term remains $15bn Mgt Gains target $3bn $1.1bn achieved at end target remains $3bn Iron Ore Expand capacity to 84Mtpa by end 2015 Capacity expanded 10Mt in 2013 Medium term capacity target now >84Mt given stretch potential at Liberia and AMMC Progress relative to targets 21

23 Focused on developing franchises Dofasco (NAFTA auto) 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 Dofasco: #6 Galvanize Line foundations Dofasco: tension reel for new #6 line VAMA: S2 mill housing construction VAMA (China automotive steel JV) started production in June 2014 Phase 1: capacity to supply 1.5mt for automotive applications in China State-of-the-art pickling tandem CRM, continuous annealing line and HDG We have restarted some steel investments in franchise businesses * Investment decision on Phase 2 of Monlevade 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 22

24 M&A: Calvert will create value Focussed capital allocation Backing our franchise business State-of-the art facility Cements ArcelorMittal s position as the NAFTA market leader AM/NS Calvert: Pickling line Quantified synergies $60mn annual synergies of which: $40mn higher slab realization $20mn SG&A/customer freight Additional benefits Places additional 2Mt of ArcelorMittal slab, allowing FCA to run at higher utilization Benefits of optimising the product flow i.e. putting the right product in the right facility Positive FCA EBITDA impact Success of the JV will determine the price at which slab is supplied by ArcelorMittal to the JV Long-run, annual EBITDA benefit to ArcelorMittal expected to be greater than initial equity contribution Annual EBITDA benefit to AM expected to be greater than equity contribution 23

25 ACIS turnaround underway Reinforced Management New CEO Davinder Chugh NEW COO Mark Vereecke 22/50 top management changes Temirtau: Bar mill productivity, tn/h +27% Operational Reliability Focus is ops, ops, ops WCM program with focus on Maintenance Transformation Visible impact at Termitau F Invest Exchange Rates Capex budget raised Investing in skills development FX weakness boosts export competitiveness Reduces competitiveness of importers Kryviy Rih: Overall equipment efficiency (OEE) of LFCC* +34% F Focus on improving operations 24

26 Free cash flow: Consistent FCF generation Net debt bridge from year-end 2010 to year-end 2013 ($billion) Non core & strategic divestments and capital increase funded highly attractive growth projects (3.6) (1.2) (0.4) 16.1 (11.7) Over the past 3 years, cash generated by the business has exceeded maintenance capex requirements by ~$3bn Net debt Dec 31, 2010 Operating cash flow ex working capital Working capital Maintenance capex Growth capex Asset sales Capital increase / dividends Other* Net debt Dec 31, 2013 ArcelorMittal is cash generative - even at the bottom of the cycle Note: Free cash flow refers to net cash provided by operating activities less purchases of property, plant and equipment and intangibles; * Includes perpetual bonds and MCB proceeds offset by other strategic M&A 25

27 Disciplined capex Capex split ($ billions) Growth capex split ($ billions, % of spend) % % 2012 was peak mining capex % % 75% 87% 35% 65% F F Growth Maintenance Focus on average capex level as there is some carry over of maintenance spend from 2013 into 2014 Steel growth Mining growth Growth capex continues to decline; lower mining capex frees up capital for steel 26

28 Active portfolio management Including: Additionally: $3.6bn cash raised from asset sales since 3Q 2011 MacArthur Coal stake BNA stake Erdemir (½ of interest sold) Skyline Enovos Paul Wurth AMMC stake Reduced ownership of Baffinland to 50% with Nunavut Iron ore increasing its share of funding Annaba: diluted stake to 49% to facilitate expansion of capacity Optimized the portfolio of subsidiaries, JVs and investments 27

29 Deployment of free cash flow Priority #1 Reduce Net Financial Debt to $15bn Future options Reduce NFD Increase dividends Growth Board will determine uses of FCF only after key shareholder s consultation 28

30 Continued focus on value drivers $3bn management gains plan Cost Leadership Product Leadership Best-in-class service Portfolio Optimization Focussed investment Improved EBITDA/tonne ($150/t normalized target) Capital Efficiency Returns > WACC Focussing on Franchise businesses All levels of ArcelorMittal aligned with one goal improved returns on capital 29

31 Europe refocused Streamlined Formerly 3 business lines in Europe, now just one Faster decision making Stronger identity Internal benefits including talent retention (part of bigger operation ) External relations easier to manage FLAT Distribution External impacts Capture customer opportunities Deeper supplier relationships, in tune with the operations LONG Other benefits Potential for productivity/efficiency gains Optimize capital allocation across the European organization Streamlined and refocused European business 30

32 Mining Mont Wright, Canada 31

33 Relentless focus on cost reduction delivering real savings Cost per ton analysis F (Base 100=2012) AMMC Concentrate -20% Liberia DSO -17% Kazakhstan Coal -16% F F F Relentless focus on costs and capex monitoring 32

34 Savings from multiple cost reduction levers Volume improvement - Gaining economies of scale from debottlenecking - Share and apply best practice leveraging internal and external benchmarks Organizational levers - Zero based analysis of organization and overhead - Delayering the organization Efficiency improvement - Optimize mine plans with focus on grade control and recoveries - Improving maintenance planning and reliability - Operational excellence, rigour and discipline underway across assets Procurement benefit - Procurement focus on key category management, shared services and centres of excellence - Targeted y-o-y reductions in spares and materials inventories through improved warehouse practices Relentless focus on costs and capex monitoring 33

35 Baffinland Early Revenue Phase Targeting 3.5Mt production rate by 2H 2015 Proposed Early Revenue Phase rationale - ERP commenced in 1Q 13 (budget ~$730m) - Enables an early mining phase that requires less capital investment than full project, creating training, employment, business opportunities for local region - ERP to demonstrate product quality/ ability to operate - High grade: 66%+ Fe iron direct shipping pellet and fine ore (no processing or pelletization required); products expected to achieve full premium value ERP components - Trucking of ore to Milne Inlet, loading of ore in Milne Inlet, and shipping of ore from Milne Inlet to markets - Upgrades of road connecting Milne Inlet and mine site - Mining and trucking of 3.5Mtpa from Deposit 1 to Milne Inlet throughout the year - Open water season shipping of ore from Milne Inlet - First ore to be shipped in 2H 15 product tonnage targeted for Europe * Financing at JV level ERP on track for first shipments in 2H 15 during open water season 34

36 Business Portfolio Key assets and projects Canada Baffinland 50% (1) Bosnia Iron Ore 51% Ukraine Iron Ore 95.13% Russian Coal 98.64% Canada AMMC 100% (2) Kazakhstan Iron Ore 4 mines 100% USA Iron Ore Minorca 100% Hibbing 62.31%* USA Coal 100% Algeria Iron Ore 70% Kazakhstan Coal 8 mines 100% Non ferrous mine Iron ore mine Mexico Iron Ore Las Truchas & Volcan 100%; Pena 50%* Mauritania Iron Ore exploration license Liberia Iron Ore 70% Indian Iron Ore & Coal exploration license Coal mine Existing mines Brazil Iron Ore 100% South Africa Manganese 50% (3) Coal of Africa 15.75% New projects / exploration South Africa Iron Ore** Geographically diversified mining assets * 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. 35

37 Iron ore reserve and resource estimates Strong reserve basis to support sustainable growth 2013 vs 2012 Iron ore reserves (million metric tonnes) As of December 31, 2013 As of December 31, 2012 Region Proven Ore Reserves Probable Ore Reserves Total Ore Reserves Total Ore Reserves Millions of Tonnes % Fe Millions of Tonnes % Fe Millions of Tonnes % Fe Millions of Tonnes % Fe Canada (AMMC) 2, , , Canada (Baffinland) USA Central America South America West Africa Eastern Europe Central Asia Total Highlights of 2013: Reserves additions exceeded mining depletion to provide a net increase of ~278Mt in iron ore reserves The average Fe grade increased by 0.8% due to the addition of higher grade iron ore reserves from the Fire Lake deposit in Canada. Reserve estimates are 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 In addition, a large resource base with potential for economic extraction supports reserves additions and replacement and future potential growth Iron ore reserves of 4.6 bn metric tonnes 36

38 Coal business Key assets and projects for coal business Coal mine Existing mines USA Coal 100% Russian Coal 98.64% New projects Kazakhstan Coal 8 mines 100% 2012 vs 2013 Coal reserves (Million metric tonnes) As of December 31, 2013 As of December 31, 2012 Region Proven Ore Probable Ore Total Ore Total Ore Reserves Reserves Reserves Reserves Millions of Millions of Millions of Millions of Tonnes Tonnes Tonnes Tonnes Princeton - USA Kuzbass - Russia Kazakhsta n Indian Iron Ore & Steam Coal Coal of Africa 15.75% interest Total Highlights of 2013: Reserves additions have entirely offset mining depletion Large resource base with potential for economic extraction supports reserves additions and replacement Coal asset geographically diversified 318 million tonnes of reserves 37

39 Auto 38

40 Our automotive strategy Built around five key pillars 1. Continue to provide high levels of service and quality in core markets 2. Develop and produce high-strength steels that enable OEMs to meet weight targets without turning to alternative materials 3. Find economically attractive means to follow OEMs as they invest in emerging markets 4. Continue to collaborate with Tier I suppliers that enable us to offer complete solutions and thus accelerate the utilization of our product innovations 5. Leverage our strong position in automotive sheet to increase our volumes and value generation in long products Unmatched and unique combination of technical capabilities and global scope that we bring to our automotive customers 39

41 Commitment to innovation Continuous investment in R&D drives innovation Usibor 1500P: first serial use of hot stamping of coated boron steels, patented by ArcelorMittal I II III Generation 1, phase 2 AHSS: Dual Phase, TRIP Steels, Martensitic etc. Generation 1, phase 1: HSLA, HSS Generation 2: TWIP, X-IP Generation 1, phase 3: Usibor for hot stamping Generation 3: 3rd Gen AHSS ArcelorMittal R&D program is global 1,300 full time researchers Broad, comprehensive portfolio and programmes addressing business needs Worldwide network of laboratories (11 labs in Europe and North America) Contribution to ULSAB/ULSAC industry-wide lightweight effort ArcelorMittal s ABC lightweight project S-in motion demonstrate s the potential of AHSS S-in motion electric vehicles Lightweight steel door Committed funding throughout the crisis R&D budget increase in 2014 S-in Motion: a catalogue of 60 steel solutions Savings of up to 73 kg or 19% of a typical C-segment vehicle s Body In White and chassis weight A 13.5% reduction in CO2 equivalent (eq) emissions during the vehicle s use-phase Increased collaboration with OEMs on co-engineering activities Contribution to significant growth of Advanced High Strength Steels and increase of our patented solutions (e.g. Usibor and Laser Welded Blanks) Through constant innovation, steel remains the material of choice 40

42 Selective steel projects: VAMA-JV with Hunan Valin VAMA: JV between ArcelorMittal and Hunan Valin which has started to 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) Production started in June 2014 Robust Chinese automotive market: > 50% growth to 25 million vehicles by

43 Case study: 2013 Ford Fusion Ford s challenge: Replace conventional design for roof rails and b-pillars, two critical safety structures, in the 2013 Ford Fusion to achieve significant weight reduction and cost while improving safety performance ArcelorMittal s solution: Recommended first-ever use of hydro-formed tubes using DP980/550, an ultra high strength steel grade, for roof rails and b-pillars Three year development process in partnership with Ford and its hydro-forming partners Proven results: 12 lb. weight savings/vehicle over previous design, reducing 2013 fleet by nearly 5 million lbs. - Weight savings translated to a significant cost reduction, according to Ford Improved fuel economy: 23/33 MPG for 2013 (FWD, 2.0 liter engine) vs. 17/25 MPG for 2012 Enhanced structural performance over prior design, earning Insurance Institute for Highway Safety (IIHS) Top Safety Pick+: - tubular structure provides a continuous closed section that optimizes sectional properties due to lack of weld flanges and eliminates joints - intrusion at the roof rail was about 2.5 inches less than baseline vehicle 42

44 Case study: 2014 Acura MDX Honda s challenge: Replace conventional multi-piece spot-welded door ring, a significant body structure component, with Honda s single-piece door ring design Protect passengers from the new IIHS small offset overlap crash test while optimizing weight, cost and safety ArcelorMittal/ArcelorMittal Tailored Blanks solution: Indiana Harbor s patented Usibor 1500, an aluminum siliconcoated advanced high strength steel, undergoes a proprietary laser ablation technology prior to welding the blanks together, with 100 percent non-destructive inspection The laser-welded blank is then hot stamped by Magna s Cosma International, creating the industry s first single-piece, laserwelded, hot-stamped door ring 43

45 Case study: 2014 Acura MDX Proven results: 8.6 lbs. weight reduction per vehicle, reducing 2014 fleet by 602,000 lbs. Improved fuel economy: 18/27 MPG for 2014 Acura MDX (AWD, V6) vs. 16/21 MPG for 2013 Received the highest available safety ratings: - IIHS Top Safety Pick+, including a top rating for the new small overlap crash test - 5-Star Overall Vehicle Score by the National Highway Traffic Safety Administration (NHTSA) Offers improved energy management through uninterrupted joints for smooth load path and improved fit and finish by controlling front and rear door hinges on one part We had to rethink how could we redistribute these even more concentrated loads in a way that we keep people safe. One of the ways we did this was with the new hot-stamped door ring. The entire structure around the doors are made with this super strong high-strength steel. To our knowledge, we are the first and only people that apply hot stamping in this way. Weight was one of the ways to improve fuel economy. Taking weight out of a car and making a car stronger is not an easy thing. In spite of being a much stronger, safer car, it is 275 pounds lighter than the outline car. - Jim Keller, 2014 Acura MDX Chief Engineer* * Source: Honda Acura website video: 44

46 Case study: 2014 Acura MDX Small offset crash performance comparison IIHS 2013 Other OEM Design without hot-stamped door ring IIHS 2014 Acura MDX Design with hot-stamped door ring Note deformations in the door opening area on comparison vehicle; ability to open the driver side door after the crash event in 2014 Acura MDX 45

47 What Volkswagen says about steel solutions 2013 Volkswagen GOLF 7 chassis According to an interview with Volkswagen for Truth About Cars, VW found that new high strength steels are: Six times stronger than conventional steels they replace Instrumental in achieving a weight reduction of 100 lbs. in the 2013 VW Golf Volkswagen replaces aluminum with steel to save weight and money, by Bertel Schmitt, Truth About Cars, Jan Volkswagen is using high strength steels in increasing amounts. It is a very cost effective way of reducing weight. Using new innovations in steel engineering it is possible to reduce weight without the use for more costly materials such as aluminum and carbon fiber. Armin Plath, Head of Materials Research and Manufacturing, Volkswagen 46

48 Grams CO²/km normalised to NEDC* Steel grades and process optimization support OEMs effort towards safety, fuel economy and reduced CO² emission Global CO2 (or equivalent) regulation trends No 1 in automotive steel 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 2012 auto shipment by geography Europe 54% Nafta 38% South America 6% Source: ICCT South Africa 2% Worldwide ArcelorMittal R&D involving automotive suppliers / industrial partners *New European Driving Cycle is designed to assess the emission levels of car engines and fuel economy in passenger cars 47

49 New ultra lightweight car door solutions C-segment vehicle Baseline Baseline Front Door S-in motion S1 S1 Lightweight steel door 18.3kg 14.5kg 13.3kg Short term kg Medium term Medium-term steel solutions for C & D-segment cars to get closer to Aluminum 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 1. Door inner AM05 0.8mm /0.6mm 2. Waist beam MS mm & DP Door beam Usibor 1500P 4. Hinge reinforcements Usibor 1500P 5. Outer panel FF280DP (490DP) 0.6mm Short & medium term ULSS show that steel remains the most cost-effective material for automotive applications Source: AM estimates as per annual report 48

50 China 49

51 Steel demand growth rates in China have trended down China annual growth rates of GDP and ASC (apparent crude steel consumption), (%) Ratio ASC/GDP Growth (LHS) ASC growth (RHS) Real GDP growth (RHS) The announced slowing of China s GDP growth rate is consistent with 12th 5-Year Plan 14.2% % % 9.6% 9.2% 10.5% 9.3% % 7.0% 7.8% 7.7% 7.4% '08/ F 0 11th plan th plan F China s steel demand growth have trended down Source: GDP: IHS Global Insight, ASC: ArcelorMittal Corporate Strategy estimates (Q1 2014) 50

52 Driving continuously strong growth in infrastructure with further potential beyond 2020 comparing China with the US Key development parameters China vs USA Absolute levels Per capita/per land area USA, 2008 China, 2013 China, 2015 China, 2020 Urban residential floor space (billion m2) Urban residential floor space (m2 per capita) Equal to 33, 34, 36 m 2 per urban residential Railway (thousand km) Railway (km per 1000 sq km) Subway (thousand km) Subway per 1000 capita (m) Total road (thousand km) Total road (km per 1000 sq km) Airport* (units) Airport transport passenger carried (bln) * Airport of USA is for paved runways > 1524 to 2437 m Sources: China National Bureau of Statistics; Macquarie Research, ArcelorMittal Corporate Strategy Highly Restricted 51

53 Net export data China trade data, NSA, mt Exports Imports Net-trade 8.0 (latest data point: Mar 14) China exports of 6.8MT in Mar. 2014, 29% yoy 2013 exports of around 62MT as compared to 56MT in 2012 Chinese exports increased 12% YoY in 2013 Chinese exports increased 12% y-o-y in

54 Market outlook 53

55 Positive fundamentals in developed markets End market growth prospects in US and EU28 (2007=100) USA EU28 Construction* Machinery** Auto*** Improving market fundamentals in core markets * Weighted by steel demand, i.e. larger weight given to non-residential; ** Industrial output of machinery and equipment (Source:: IHS Global Insight forecasts at Jan 2014); *** Light vehicle assembly (Source: LMC Auto Feb 14) 54

56 US construction growth continues; Europe improving US residential and non-residential construction indicators (SAAR) $bn* (latest data point: Mar 14) USA non-residential stable in 1Q 14 Non residential output stable in early 2014, impacted by severe weather, however, output up 6% yoy compared to weak 1Q 13. Despite the Architectural Billings index (ABI) falling back below 50, we expect a gradual pick up through 2014 and into 2015 US residential construction growth slowing to a more sustainable pace, supported but continuing strength in new home sales. Eurozone and US construction indicators** European construction outlook gradually improving Eurozone construction PMI weakened to 46.2 in March, despite continued strength in German and in particular UK However construction output in EU28 is up >5% (Jan/Feb yoy), supported by mild weather and weak yoy comparatives (latest data point: Mar 14) Overall we expect output in 2014 to be higher than 2013, led by growth in Germany, Poland and the UK. Construction in Southern Europe remains weak despite a pick up from low levels in Spain. * Source: US Census Bureau ; ** Source: Markit and The American Institute of Architects Construction gradually improving 55

57 Global apparent steel consumption China % +6.9% % EU % -0.2% % F F NAFTA % -2.7% +5% Rest of World* % +2.8% +3% F F 2013 ASC growth of +3.5%; Estimated 2014 ASC growth of % ArcelorMittal estimates; * World ex. China, NAFTA and EU28 56

58 1Q 14 developed market stock levels rising German inventories (000 MT) (latest data point: Feb 14) US service centre total steel Inventories (000 MT) (latest data point: Mar 14) Brazil service centre inventories (000 MT) (latest data point: Apr 14) China service centre inventories* (Mt/mth) with ASC% (latest data point: Apr 14) Slow rebound in inventory is supporting demand growth in developed market 57

59 Raw material prices declined Spot iron ore, coking coal and scrap price (index IH 2008=100)* Regional steel price HRC ($/t) (latest data point: Mar 14) (latest data point: Apr 14) Raw material prices have declined particularly iron ore and coking coal * Source data: ArcelorMittal estimates; Platts 58

60 Balance Sheet 59

61 Balance sheet structurally improved Net debt ($ billion) 32.5 Average maturity (years) % 2.6 3Q Q Q Q 2014 Liquidity ($ billion) Bank debt as component of total debt (%) % 10% 3Q Q Q Q 2014 Balance sheet fundamentals improved 60

62 Liquidity and debt maturity profile Liquidity at March 31, 2014 ($ billion) Debt maturities ($ billion) Commerical Bonds Other Convertible Unused credit lines Cash Commercial paper convertible Other loans Liquidity at 31/3/14 Debt due in 2Q >2018 Liquidity lines: $3.6bn syndicated credit facility matures 18/03/16 $2.4bn syndicated credit facility matures 06/11/18 Debt maturity: Continued strong liquidity Average debt maturity 5.9 years Ratings S&P BB+, negative outlook Moody s Ba1, negative outlook Fitch BB+, stable outlook Continued strong liquidity position and average debt maturity of 5.9 years 61

63 Key operational data overview KPI Quarterly Segment Analysis NAFTA (USDm) unless otherwise shown 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 Crude steel production (Mt) 6,206 6,230 6,057 5,822 6,379 5,720 6,454 6,361 6,256 Steel shipments (Mt) 5,620 5,803 5,511 5,460 5,565 5,433 5,774 5,728 5,613 EBITDA BRAZIL (USDm) unless otherwise shown 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 Crude steel production (Mt) 2,645 2,408 2,301 2,518 2,400 2,561 2,576 2,450 2,413 Steel shipments (Mt) 2,425 2,507 2,191 2,531 2,407 2,487 2,559 2,344 2,325 EBITDA EUROPE (USDm) unless otherwise shown 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 Crude steel production (Mt) 10,365 10,403 9,800 9,208 10,419 10,531 10,522 10,451 10,899 Steel shipments (Mt) 10,397 9,738 8,602 8,794 9,527 10,011 9,257 9,474 10,009 EBITDA ACIS (USDm) unless otherwise shown 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 Crude steel production (Mt) 3,615 3,692 3,720 3,241 3,245 3,681 3,710 3,726 3,413 Steel shipments (Mt) 3,373 3,350 3,201 2,997 3,118 3,087 3,208 3,009 3,187 EBITDA Mining (USDm) unless otherwise shown 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 EBITDA GROUP Upgrade railway line linking mine to port in Liberia (USDm) unless otherwise shown 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 Crude steel production (Mt) 22,831 22,732 21,880 20,788 22,443 22,493 23,263 22,987 22,981 Steel shipments (Mt) 21,712 21,291 19,455 19,724 20,483 20,924 20,721 20,482 20,968 EBITDA 2,118 2,559 1,445 1,557 1,565 1,700 1,713 1,910 1,754 62

64 Contacts Daniel Fairclough Global Head Investor Relations Hetal Patel UK/European Investor Relations Thomas A McCue US Investor Relations thomas.mccue@arcelormittal.com Lisa Fortuna US Investor Relations lisa.fortuna@arcelormittal.com Valérie Mella European and Retail Investor Relations valerie.mella@arcelormittal.com Maureen Baker Fixed Income/Debt Investor Relations maureen.baker@arcelormittal.com