Global Metals, Mining & Materials Conference

Transcription

1 Global Metals, Mining & Materials Conference Sudhir Maheshwari, GMB Member 14 November 2012

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. 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, 2011 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 Safe Sustainable Steel Quarterly Health & Safety frequency rate* for mining & steel 2013 Target M12 Health and safety performance with lost time injury frequency rate of 1.0x in 3Q 12 and 9M 12 in line with target The Company continues its efforts to keep group performance below 1.0x for 2013 working on continuous improvements Despite the encouraging recent performance in lost time injury frequency rate there is still more work to be done, in particular improving the safety performance of the contractors who work at our sites ArcelorMittal leads the steel sector in the 2012 Dow Jones Sustainability Index (DJSI). The improved score resulted from improvements in disclosure, human rights, and the Company's responsible sourcing programme. Our goal is to be the safest Metals & Mining company * IISI-standard: Fr = Lost Time Injuries per worked hours; based on own personnel and contractors 2

4 Industry leader World s No1 steel producer (~ 6% of world crude steel output) Largest steel producers Broad range of high-quality finished and semi-finished carbon steel products; Outstanding distribution networks 4th largest iron ore producer; low 2nd-quartile cash cost for iron ore; World-class iron ore reserve and resource ArcelorMittal Hebei I&S Angang Group Baosteelel Wuhan Posco Nippon Steelel Jiangsu Shagang Largest iron ore producers Shougang JFE Shandong I&S Tata Steelel US Steelel Gerdau Bohai I&S ThyssenKrupp Nucor Evraz Maanshan Riva Global presence unrivalled knowledge base and benchmarking Vale Rio Tinto BHP ArcelorMittal Fortesque Anglo Metinvest Evraz 3

5 Geographically diversified ArcelorMittal is the leader in all major global steel markets, including automotive, construction, household appliances and packaging Leading R&D and technology, as well as sizeable captive supplies of raw materials and distribution networks 2011 EBITDA by geography Mining: 31% AACIS: 13% Long South America 10% Flat South America 5% Flat North America 17% Flat Europe: 15% Long North America 1% Long Europe 5% Distribution Solutions 3% 2011 EBITDA of US$10.1bn; only ~40% generated from steel business in Europe and North America Balanced portfolio of costcompetitive assets in both developed and developing markets (No1: EU; North America; Africa, LatAm, CIS) 2011 Steel shipments by geography Long Europe 15% Asia, CIS & Other 9% Africa 5% Long South America 7% Long North America 5% Flat North America 20% Flat Europe 32% Flat South America 6% 4

6 Cost leadership Strong track record of management gains Achieved $4.8bn of savings since 2008; largely SG&A, fixed costs and operational improvements Plan achieved ahead of schedule Further plans under development Fixed cost per tonne below 2008 levels despite significantly lower volumes and inflation leverage to volume recovery Fixed cost per ton (index 100 = 2008)* shipments Fixed cost per ton 9M 12** Asset Optimization Plan Focus on core assets will ensure lowest cost footprint achieved and yield significant savings; target $1bn by end-2012 Closure of liquid phase of Liege, Belgium agreed Announced intention to launch a project to permanently close the liquid phase at the Florange site in France Asset optimisation plan 1,200 1, * On actual dollar basis and excludes mining; ** Annualized 9M

7 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) 2011 auto shipment by geography Europe 59% Nafta 34% Relative stability of margin: 20-30% of average selling price is attributable to the value added nature of the product South America 6% South Africa 1% 40% market share in our core markets Strong and consistent investment in R&D 6

8 Fast-growing mining assets Key management bench strength to execute on the development options we have via our extensive reserve base and scalable infrastructure already in place Growth plan to reach 84mt by 2015 with key growth projects in Canada and Liberia underway Competitive position in terms of cost and product quality We are investing in our lower cost operations Iron growth plan Operational efficiencies 5 Brazil / Canada 11 Liberia Iron ore production and operating unit cost (Index base 100=2011)* plan Our projects have attractive returns based on conservative long-term prices with rapid paybacks on these investments Iron ore production Operating unit cost * Excluding planned greenfield projects (such as Baffinland) and investment in expanding the pellet plant at AMMC which has not yet been committed to. Note: Operating unit costs shown are on an FOB basis 7

9 Balance sheet structurally improved Net debt ($billion) -29% 32.5 Average maturity (years) Q Q Q Q 2012 Liquidity ($billion) Bank debt as component of total debt* (%) 84% % 3Q Q Q Q 2012 Financial covenant** applies only to our liquidity lines (currently undrawn) * ArcelorMittal estimates; **Financial covenant is 3.5x net Debt to last 12 months EBITDA and is tested semi-annually 8

10 Deleveraging plan Organic deleveraging EBITDA to benefit from management gains, asset optimisation and mining expansion Dividend cut to save $860 million annually Capex plans under scrutiny with savings targeted in 2013 Asset disposal program Asset sales of $2.7 billion* since September 2011: Erdemir: 1/4 of 25% stake sold raising $264 million cash in 1Q 12 Skyline: Agreed sale to Nucor of 100% ArcelorMittal s stake in Skyline Steel s operations in NAFTA/Caribbean for $684 million in 2Q 12 Enovos: Agreed sale to AXA of 23.5% interest for 330 million (Initial 50% payment received in 3Q 12 with balance (+ interest) over subsequent periods Paul Wurth - Agreed sale to SMS Holding of 48.1% interest for 300 million Further asset sales targeted in coming months Ongoing management initiatives to deleverage in a challenging environment * Includes Macarthur, Boasteel-NSC/Arcelor (BNA) Automotive, Erdemir, Skyline, Enovos and Paul Wurth. ** Paul Wurth divestment will have minimal impact on ArcelorMittal net debt as sale cash proceeds will be offset by the deconsolidation of Paul Wurth s cash balance. Paul Wurth s cash balance primarily represents customer advances held by customers of Paul Wurth. 9

11 2012 demand environment challenging China (ASC) EU27 (ASC) +55.6% 2-2.5% -28.8% -8% F F NAFTA (ASC) -7.6% 8% Rest of World (ASC) 7.6% 2.5-3% F F Estimated global apparent steel consumption growth of +2.0% 2012 ArcelorMittal estimates: 2011 ASC growth revised up due to under reporting of steel production. 10

12 But prospects improving Expansion Regional Manufacturing PMI Global leading indicators have improved over the past few months but still point to weak growth in developing markets US manufacturing stable, but automotive remains strong and purchasing managers index >50 Contraction Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 China (Composite) Euro Area USA Global Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 In Europe, manufacturing output has stabilised as destocking at end-users ends and sentiment improves However, eurozone PMI remains below 50, consumer confidence is poor and incoming orders weak suggesting no rebound in output likely Recent indicators in China show signs of a pick-up with both investment and manufacturing stronger (PMI back to 50 in Oct) Global leading indicators turning up; but eurozone uncertainty remains the key risk Source: Markit and ISM; Global Manufacturing PMI is weighted average of regional PMI and combination of China HSBC and official China figures. 11

13 Global Inventory levels are supportive Europe Service Centre Inventories (000 MT) EU (EASSC) Months Supply US Service Centre Total Steel Inventories (000 MT) USA (MSCI) Months Supply Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 1,400 1,300 1,200 1,100 1, Brazil Service Centre Inventories (000 MT) Fl at stocks at service centres Months of supply China service centre inventories (Mt/mth) with ASC% Flat and Long % of ASC (rhs) 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Absolute global inventories have declined during 3Q Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12

14 In Summary Operating environment is very challenging but signs of improvement ArcelorMittal s business model is strong Diversified steel exposure Auto industry leadership Mining development Company s focus remains on Deleveraging Cost improvement Asset optimisation progressing towards $1bn annual savings target Management gains program continues to deliver Executing low-cost growth Applying core strengths to deliver sustainable returns through the cycle 13

15 Appendix 14

16 Outlook and guidance Guidance - Previous expectations for group profitability in 2H 2012 are no longer valid due to Q fall in iron ore pricing and weaker global economic backdrop - adversely impacted steel prices and steel volumes - clear impacts on the profitability of the mining segment The Company now expects to achieve FY 2012 EBITDA of approximately $7 billion Mining: - Iron ore shipments remain on track to increase by ~10% in FY 2012 compared to FY Capex: capex is expected to be approximately $4.5 billion - Continued focus on core growth capex (mining) - ArcelorMittal Mines Canada expansion to 24mtpa on track for ramp up during 1H 2013 Debt: - Net debt is expected to be approximately $22 billion by year end excluding impacts from asset sales - Deleveraging is a priority as the Company continues to target an investment grade credit rating The Company expects to achieve FY 2012 EBITDA of approximately $7 billion 15

17 Liquidity and debt maturity profile Liquidity at September 30, 2012 (US$ billion) Debt maturities (US$ billion) Unused credit lines Cash Liquidity at 30/9/ Commercial Paper 2014 Other 2015 Convertibles 2016 Bonds >2016 Liquidity lines*: $4bn syndicated credit facility matures 06/05/15 $6bn syndicated credit facility matures 18/03/16 Debt maturity: Continued strong liquidity Average debt maturity 6.2 years Ratings S&P BB+, negative outlook Moody Ba1, negative outlook Fitch BBB-, negative outlook Continued strong liquidity position and average debt maturity of 6.2 years * During 3Q 2012 the Company cancelled the $0.3 billion bilateral facility was maturing 30/06/13 16

18 3Q 12 apparent demand growth slowed Global Apparent Steel Consumption (ASC)* (million tonnes per month) US and European Apparent Steel Consumption (ASC)** (million tonnes per month) Developing ex China China Developed EU27 USA Global ASC -3.3% in 3Q 12 vs. 2Q 12 [+0.4% y-o-y] Global ASC +0.8% in 9M 12 vs. 9M 11 China ASC -1.3% in 3Q 12 vs. 2Q 12 [+0.9% y-o-y] China ASC -0.2% in 9M 12 vs. 9M 11 US ASC -4.8% in 3Q 12 vs. 2Q 12 [+4.6% y-o-y] US ASC +10.4% in 9M 12 vs. 9M 11 EU ASC -11.9% in 3Q 12 vs. 2Q 12 [-8.4% y-o-y] EU ASC -9.6% in 9M 12 vs. 9M 11 Global ASC declined during the seasonally weak third quarter * ArcelorMittal estimates ** AISI, Eurofer and ArcelorMittal estimates 17

19 China has bottomed China infrastructure investment 3mma* yoy 75% 60% Recent data shows industrial output growth stabilised around 9% in Q % 30% Newly started construction remains lower y-o-y 15% 0% -15% Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 But, property transactions are rising y-o-y, meaning that developers are reducing inventory levels which should precede a mild pick up in construction in 2013 Crude steel finished production and inventory (mmt) 90 Steel inventory at warehouses (RHS) 80 Finished steel production (LHS) 70 Steel inventory at mills (RHS) Steel inventories at mills remain high, but traders faced with a liquidity squeeze have cut stocks aggressively Steel production peaked in April at 737mt annualised to 705mt in Sept and we expect production to remain around 700mt through 4Q Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 China ASC is expected to grow 2 2.5% in 2012 * Mma refer to months moving average 18

20 Developed construction generally weak US Residential and Non-Residential construction indicators (SAAR) $bn* Jan-02 Jul-02 Jan-03 Jul-03 Residential Non-Residential Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Eurozone and US construction indicators** Expansion Contraction Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Eurozone construction PMI Jan-12 Jul-12 USA Architectural Billings Index Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Developed construction still at low levels Modest pickup in USA continues US residential construction to grow strongly off a low base, as home sales improve and permits rise to their highest level since H1 08 Private non-residential output stabilising after relatively strong growth around the turn of the year; Architectural Billings index just back above 50 suggesting only modest pickup in 2013 In Europe, debt crisis drives falling investment Construction PMI continues to indicate contraction German construction market supported by strong labour market and low interest rates Construction markets in South to extend decline in 2012, with Greece, Italy, Portugal and Spain, down on average 10% Encouraging signs in US residential construction, but European construction remains depressed * Source: US Census Bureau ** Source: Markit and The American Institute of Architects 19

21 Raw material prices have bottomed Spot iron ore, coking coal and scrap price (index IH 2008=100) Regional Steel price HRC ($/t) Iron ore Coking coal Scrap China domestic Shanghai (Inc 17% VAT) N.America FOB Midwest N.Europe domestic ex-works Jan 08 Apr 08 Jul 08 Oct 08 Jan 09 Apr 09 Jul 09 Oct 09 Jan 10 Apr 10 Jul 10 Oct 10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan 08 Apr 08 Jul 08 Oct 08 Jan 09 Apr 09 Jul 09 Oct 09 Jan 10 Apr 10 Jul 10 Oct 10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Falling raw material prices in early 3Q 12 impacted steel sentiment, but iron ore prices have rebounded 20

22 Snapshot 3Q 12 EBITDA of $1.3bn (including negative $0.1bn employee benefit charges) vs $2.4bn in 2Q 12 (which included positive $0.3bn impact from divestment proceeds) EBITDA (US$mn, LHS) and EBITDA/t (US$, RHS) progressions* 1H Steel shipments of 19.9 Mt, a decrease of 8.3% compared to 2Q 12 and 5.7% below 3Q M 12 own iron ore production +7.5% YoY; 9M 12 iron ore shipments +12.7% YoY Net debt at end 3Q 12 was $23.2bn as compared to $22.0bn at end of 2Q 12 2,408 1,714 1,972 3Q11 4Q11 1Q12 Net debt progression (US$bn) 2,449 1,336 2Q12 3Q12 +$1.2bn Liquidity of $13.4bn at end of 3Q 12 and average debt maturity of 6.2 years Deleveraging remains a priority with investment grade credit rating the target 2012 proposed dividend cut to $0.20/share Profitability and cash flow generation declined in 3Q relative to 2Q with seasonal slowdown and weaker market conditions * Including one time items EBITDA/t is defined at Total EBITDA divided by steel shipments. ** ArcelorMittal s Board of Directors recommends reducing the annual dividend payment to $0.20/share from 2013 (from $0.75/sh in 2012). Subject to shareholder approval at the next annual general meeting in May 2013, this dividend will be paid in July Q11 4Q11 1Q12 2Q12 3Q12 21

23 EBITDA bridge from 2Q 12 to 3Q 12 ($million) 2,449 (339) Steel impact (515) 2,110 (465) Mining impact (50) (46) (151) (105) Includes $72 million one time impact from new US labor contract (21) (87) 1,336 2Q 12 EBITDA Skyline Underlying 2Q 12 EBITDA Volume & Mix - Steel Price / Cost - Steel Volume & Mix - Mining Price / Cost - Mining Non Steel EBITDA Others* 3Q 12 EBITDA EBITDA decreased in 3Q 12 due to seasonally lower volumes and falling iron ore prices * Others primarily represents DDH income and forex (net impact on revenue and costs) 22

24 EBITDA to Net Income ($million) Depreciation: (1,157) Impairment: (130) Interest: (479) Restructuring: (98) Forex and other: (103) Current tax: (101) Deferred tax: 58 Non-controlling: 20 3Q 2012 (1,385) (55) (49) (582) (686) Weighted Avg No of shares: 1,549 Diluted Weighted Avg No of shares: 1,549 EPS = $ (0.46)/share Diluted EPS = $ (0.46)/share (23) (709) 2Q 2012 EBITDA ($million) 2,449 Depreciation impairment and restructuring charges (1,348) Operating Income Finance Cost Income/ (loss) from Equity Depreciation: (1,158) Interest: (456) Restructuring: (190) Forex and other: (32) 1, (488) Pre-tax Profit /loss) Current tax: (171) Deferred tax: 390 Non-controlling: Taxes and non-controlling Interest Net income / (Ioss) Weighted Avg No of shares: 1,549 Diluted Weighted Avg No of shares:1, EPS = $ 0.62/share Diluted EPS = $ 0.56/share 959 Net loss of $0.7bn during 3Q 12 23

25 EBITDA to Free Cash flow Q free cashflow waterfall ($million) (318) Change in working capital (1,366) Net financial cost, tax expense, and others* (348) (1,208) Ebitda Cashflow from operations Capex (1,556) Free Cashflow Low EBITDA and investment in working capital resulted in negative free cashflow * Others include: $0.1 billion DDH income 24

26 Net debt bridge Q net debt analysis ($million) ,204 1,556 22,013 Net Debt at 2Q12 Free Cashflow M&A Dividends Forex and others Perpetual securities Net debt at 3Q12 Negative free cash flow and forex effects partially offset by perpetual securities issue 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). As at September 30, 2012 cash included $441 million and debt included $17 million held at Paul Wurth, which has since been classified as asset/liabilities held for sale). 25

27 Net debt Net Debt (USD billion) & Net Debt/LTM EBITDA* Ratio (x) Covenant apply only to liquidity lines of which zero drawn at end 3Q 2012 Covenant is 3.5x Net Debt / Last twelve months EBITDA 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 Net Debt (USDbn) - LHS Net Debt / LTM EBITDA Covenant applies to liquidity lines only * Based on last twelve months (LTM) EBITDA. 26

28 Working capital focus OWCR and rotation days* (USD billion) 72 Days 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 Working capital (USDbn) - LHS Rotation day - RHS Rotation days increased to 72 days during 3Q 12 from 61 days in 2Q 12 * 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. 27

29 China s steel demand following precedents Economic development is characterised by strong, early phase steel demand growth China is no different Cumulative crude steel apparent consumption (kg/capita) Germany USA France S. Korea China China s steel demand growth is sustainable near term Note: Between 1900 and 1949 crude steel production per capita as approximation for demand as no data available Sources: WSA for crude steel ASC; Global Insight and UN Data statistics for population; ArcelorMittal Corporate Strategy team analysis 28

30 Steel demand growth rates in China have trended down China annual growth rates of GDP and ASC (apparent crude steel consumption), (%) The announced slowing of China s GDP growth rate is consistent with 12th 5-Year Plan Ratio ASC/GDP Growth (LHS) ASC growth (RHS) Real GDP growth (RHS) % 12.7% 14.2% 9.6% 9.2% 10.3% 9.2%* % 7.0% 7.5%* / e 2012f 0 11th plan th plan f China s steel demand growth have trended down Source: Global Insight, MIIT, ArcelorMittal Corporate Strategy team analysis 29

31 China still has some way to go on its infrastructure development path Key development parameters China vs USA USA, 2008 China, 2008 China, 2011 Absolute levels Per capita/per land area Urban residential floor space (billion m2) Railway (thousand km) Urban residential floor 16 space (m2 per capita) Equal to 30, 19 33m 2 per urban residential 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 30

32 China demand growth remains solid Steel consumption per capita in 2011 (kg) Western China (288 kg) Central China (475 kg) Coastal China (629kg) Development and growth potential Population migration Solid Chinese steel demand Sources: WSA, SBB and ArcelorMittal estimates 31

33 China will keep global raw material supplies tight China steel demand growth is expected to continue to absorb new supply of iron ore, keeping global supply/demand tight Global iron ore supply/demand outlook (Mn tonnes) Iron Ore Demand/Produ uction World Iron Ore Demand World Iron Ore Production Supply/Demand projections Iron ore supply forecast to keep pace with demand, with no significant excess Source: ArcelorMittal Corporate Strategy 32

34 But it s not just a China story Outside China there is significant, broad-based growth in steel consumption Developing world ex-china: Over 4 billion people Large populations in India, MENA, CIS, Brazil, parts of SE Asia Many of these countries are well engaged on the path of industrialisation and urbanization growth Over 400m tonnes steel consumption 5.6% CAGR Crude steel consumption per capita 2010 (kg) India 102 Other China Developed developing world World* Developed world: Ca. 1bn people Low population growth Post-industrial service based economies Declining steel consumption We expect continued growth in steel consumption in the developing world * US, Canada, EU-15, Japan, Korea, Taiwan, Oceania; Sources: WSA, ArcelorMittal Corporate Strategy analysis 33

35 Brazil to benefit from tax incentives Government measure to stimulate economy Brazilian auto incentives in form of reduction of tax on industrial products has been extended to Oct 2012 Import tax tariff increase the International Trade Affair Chamber - CAMEX, approved new import duties for 10 steel products, including HRC, to increase from 12 to 25% implementation expected to be effective within 30 days, after approval from the Mercosul Countries Increased tariff will impact ~65% of AM domestic HRC sales Removal of state tax incentives The abolition of VAT rebate on imports is valid from all products (with a net impact of 8-9%) The end of state tax incentives from certain regions like Santa Catarina effective from Jan 1, 2013 Impact of measures The end of state tax incentives and higher import duties (with a net impact of ~22%) should contribute to consolidate current pricing policy and increase shipments in the domestic market, displacing imported material Historical participation of imports ~6%-7% of consumption had risen approx 20-25% in 2010 and back to 15%-20% in 2012 Brazilian operations to benefit from government incentives 34

36 Mining business portfolio Key assets and projects Canada Baffinland 70% Bosnia Iron Ore 51% Ukraine Iron Ore 95% Russian Coal 98.3% USA Iron Ore Minorca 100% Hibbing 62%* Non ferrous mine Iron ore mine Mexico Iron Ore Las Truchas & Volcan 100%; Pena 50%* USA Coal 100% Canada AMMC 100% Mauritania Iron Ore exploration license Liberia Iron Ore 70% Algeria Iron Ore 70% Kazakhstan Coal 8 mines 100% Indian Iron Ore & Coal exploration license Kazakhstan Iron Ore 4 mines 100% Coal mine Existing mines New projects / exploration Brazil Iron Ore 100% South Africa Manganese 50% South Africa Iron Ore** Coal of Africa 15.98% Geographically diversified mining assets * Includes share of production ** Includes purchases made under July 2010 interim agreement with Kumba (South Africa) 35

37 Extensive iron ore reserve and resource base Iron ore reserves as at December 31, 2011 Iron ore reserves and resources as at December 31, 2011 Liberia 0% Brazil 3% Mexico 8% Bosnia 1% Ukraine 8% Kazakshtan 5% USA 14% Canada 61% Total proven and probable ore reserves Millions of %Fe tonnes Measured + indicated resources Millions of %Fe tonnes Inferred resources Millions of tonnes Canada (Excluding Baffinland) 1, , , Baffinland - Canada Minorca - USA Hibbibng - USA Mexico (Excluding Pena Colorada) Pena Colorada - Mexico Brazil Liberia , Algeria Bosnia Ukraine Open Pit Ukraine Underground Kazakhstan Open Pit , Kazakhstan Underground Total 3, , , %Fe These reserves constitute the foundation of our life of mine plans including our planned growth strategy A very significant resource base that will constitute the basis for additional potential growth and ensure the sustainability of our operations Total iron ore reserves of 3.8 billion metric tonnes (1) Iron ore reserve estimates for Eastern Europe (Bosnia) and CIS (Ukraine and Kazakhstan) are reported only as aggregated proven and probable reserves as the methodology used in these countries (CIS standards) to estimate the exact degree of assurance and delimitation between the two categories cannot be fully defined. 36

38 Comparable margin to peers Mining EBITDA (US$mn) 3500 Iron Ore EBITDA margin FY2011* 80% % % % 500 0% Producer 1 Producer 2 Producer 3 Producer 4 Producer 5 ArcelorMittal* ArcelorMittal Mining is competitive on cost and quality * 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. 37

39 Industry leading iron ore growth pipeline ArcelorMittal iron ore growth plan (MT) ArcelorMittal iron ore production growth plan (KT) Cost plus tonnage Marketable tonnage Operational efficiency Canada / Brazil Liberia Phase 1 & % Growth Marketable production Cost-plus production 41% Grow th F F 2013F 2014F 2015F Significant increase in iron ore volumes targeted; focus on expanding market-priced tonnes 38

40 Liberia progress Liberia greenfield progress Industrial location of mine Phase 1: DSO complete 240km rail rehabilitation completed Upgrade of Buchanan port and material handling facilities completed First direct shipping ore ( DSO ) product shipped in September 2011 Now producing at 4Mtpa rate Phase 2: 15Mtpa concentrate Expansion to 15Mtpa requires investment in a concentrator and remains under study Atlantic Ocean Guinea Sierra Leone Buchanan Railway link from Yekepa to Buchanan (240km) Liberia Yekepa Ivory Coast Liberia greenfield planned expansion (Million MT) All marketable tonnes Total project capex (Phase 1 and 2) US$2 billion Capex of US$0.7 billion spent on phase F Phase 2 Liberia phase 2 expansion will leverage existing infrastructure 39

41 Potential growth beyond current plan Planned and potential iron ore growth targets (million metric tonnes) (Excluding strategic contracts) iron ore target of 84MT (excluding potential projects and strategic contracts) Potential brownfield and greenfield projects under study Base Planned efficiciency gains Planned Brownfield Planned Greenfield Potential efficiency gains Potential Brownfield Potential Greenfield Potential internal growth supported by pipeline of brownfield and greenfield projects 40

42 Beyond 2015 Baffinland project: feasibility study progressing Product: High Grade: Fe 66%, Phos 0.03, SiO2 2.4%, Al2O3 1.2% Significant and scalable resource Outstanding chemical, metallurgical and handling characteristics No washing, concentrating, jigging; crushing and screening only 75% of output to be DSP: Direct Shipping Pellet (naturally occurring lump pellet type properties) and 25% Premium Sinter Fines ore Baffin Island overview Proposed railway alignment Steensby inlet camp and proposed port Foxe Basin Mary River mine site Baffin Island Baffin Bay Commercial Strategy: Build customer base in Atlantic and Pacific growth markets Optimise customer and market mix based on logistics and value in use for stable long term demand Price products to reflect full value in use premia Steensby Rotterdam = 3100 nautical miles Acquisition of Baffinland demonstrates ArcelorMittal s commitment to building a world-class mining business 41

43 Coal business Key assets and projects for coal business Coal mine USA Coal 100% Russian Coal 100% Existing mines New projects Kazakhstan Coal 8 mines 100% Coal reserves and resources as at December 31, 2011 Total proven and probable reserves Millions of tonnes Wet recoverable million tonnes Measured + indicated resources ROM millions of tonnes Wet recoverable million tonnes Inferred resources Millions of tonnes Wet recoverable million tonnes Princeton - USA Kazakhstan Kuzbass - Russia Total Coal of Africa 15.98% interest Indian Iron Ore & Steam Coal Coal expansion 2015 (Mt) ` F Geographically diversified 42

44 Our Leadership in automotive steel ArcelorMittal s industrial and commercial network Automotive production facilities Alliances & JV Commercial Teams Automotive steel strengths Global automotive manufacturing presence through own facilities, alliances and JVs Proximity to the customer by global presence of commercial teams Global distribution network Unique product offerings to meet OEMs demand for safety, fuel economy and reduced CO 2 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 40% market share in our core markets Strong investment in R&D Barriers of entry due to technical knowhow requirements for value-added products and customer relationships We are serving globally while developing industrial assets in emerging markets 43

45 S-in motion program offers 20% weight reduction Using currently and globally available Advanced High Strength Steel (AHSS) grades Involving unique industrial partner network High tech solutions (Tailored blanks, ) Catalogue of worldwide solutions adapted to meet recent and most stringent crash requirements Cost neutral Roll out to all automotive customers in the world with significant interest (more than 80% of OEMs involved with S- in motion roll out) Trigger partnerships with customers on future platforms (already successful results) LWB Ductibor 500P / Usibor LWB 1500P Usibor 1500P / Usibor 1500P - For the lightest BiW concept, 29 parts (~69 kg) use hot stamping offering high mechanical resistance for complex geometries without spring back effect Target Perimeter = Body in White (BiW), Closures and Chassis Worldwide ArcelorMittal R&D involving automotive suppliers and industrial partners (Gestamp and Magnetto Automotive) 44

46 Strong Automotive market share maintained and increasing on high added value products NAFTA Europe AHSS Market share overall Market share AHSS Market share overall Market share Strong market share maintained on Auto Strengthening position in Advanced High Strength Steels - stronger increase than average in ALL regions - above average market share Recognised leadership from key customers Sources : AM deliveries ; JD Power/CSM 45

47 Management gains program complete Management gains savings plan achieved since 2008 (USD billion annualized) Variable cost savings breakdown 4.8 Variable cost Fixed cost Other 35% 37% Yield 3.4 Fixed cost per ton (index 100 = 2008)* Energy 9% 19% Productivity M 12** Strong track record of cost improvements Achieved $4.8bn of savings since 2008; largely SG&A, fixed costs and operational improvements Plan achieved ahead of schedule Fixed cost per tonne below 2008 levels despite significantly lower volumes and inflation leverage to volume recovery shipments Fixed cost per ton Management Gains target achieved; focus now on development of new programs * On actual dollar basis and excludes mining ** Annualized 9M 12 46

48 Permanent capacity closures: Asset optimisation Asset optimisation progress to date October 2011 Intention to close two blast furnaces, sinter plant, steel shop and continuous casters in Liege, Belgium Legal procedures with employee representatives are ongoing 4Q 2011 Extended idling of electric arc furnace in Madrid Restructuring costs at certain other Spanish, Czech Republic and AMDS operations 1Q 2012 Extended idling of electric arc furnace and continuous caster at the Schifflange site (Luxembourg) Further optimisation in Poland and Spain In October 2012 Closure of liquid phase of Liege, Belgium agreed Intention to launch a project to permanently close the liquid phase at the Florange site in France Continued progress on re-sizing the operating footprint 47

49 Deleveraging: Progress on non-core asset sales Erdemir 1/4 of 25% stake sold raising $264 million cash in 1Q 12 1/4 of 25% stake tied to warrants potential for a further approximate $93 million in cash Skyline Agreed sale to Nucor of 100% of ArcelorMittal s stake in Skyline Steel s operations in NAFTA and the Caribbean for $684 million The transaction was completed in 2Q 12 Enovos Agreed sale to AXA of 23.48% interest for 330 million Transaction has now closed and initial 50% payment ($189 million net of dividends) received in 3Q 12 with balance (+ interest) over subsequent periods Paul Wurth Agreed sale to SMS Holding of 48.1% interest for 300 million Cash proceeds will have minimal impact on net debt** Including sale of Macarthur stake, ArcelorMittal has sold $2.7bn* non-core assets since September 2011 Further disposals expected to be made in coming quarters * Includes Macarthur, Boasteel-NSC/Arcelor (BNA) Automotive, Erdemir, Skyline, Enovos and Paul Wurth. ** Paul Wurth divestment will have minimal impact on ArcelorMittal net debt as sale cash proceeds will be offset by the deconsolidation of Paul Wurth s cash balance. Paul Wurth s cash balance primarily represents customer advances held by customers of Paul Wurth. 48

50 Overview of financial results Q111 Q211 Q311 Q Q112 Q212 Q312 Crude Steel FCA 26,476 16,556 23,101 6,063 6,277 5,866 6,009 24,215 6,249 6,014 5,726 Production FCE 34,338 22,752 30,026 7,631 7,870 7,390 6,619 29,510 7,182 7,143 6,718 (thousands of Long 25,198 18,901 22,550 6,059 6,414 5,611 5,474 23,558 5,785 5,885 5,713 metric tonnes) AACIS 15,118 13,411 14,906 3,706 3,830 3,493 3,579 14,608 3,615 3,691 3,721 Total Continuing operations 101,130 71,620 90,583 23,459 24,391 22,360 21,681 91,891 22,831 22,733 21,878 Steel FCA 25,810 16,121 21,028 5,563 5,520 5,708 5,458 22,249 5,672 5,735 5,351 Shipments* FCE 33,512 21,797 27,510 7,384 7,166 6,385 6,188 27,123 7,461 6,771 5,837 (thousands of Long 27,115 19,937 23,148 5,872 6,167 5,984 5,846 23,869 5,738 5,839 5,508 metric tonnes) AACIS 13,296 11,769 13,266 3,142 3,304 3,005 3,065 12,516 3,353 3,321 3,178 Total Continuing operations 99,733 69,624 84,952 21,961 22,157 21,082 20,557 85,757 22,224 21,666 19,874 Revenue FCA 25,761 12,310 17,684 4,939 5,567 5,499 5,030 21,035 5,270 5,359 4,840 (US$ millions) FCE 38,300 19,981 25,550 7,812 8,551 7,696 7,003 31,062 7,719 7,223 6,108 Long 32,230 16,741 21,315 5,889 6,664 6,676 5,936 25,165 5,763 5,698 5,189 AACIS 13,047 7,577 9,706 2,570 2,857 2,619 2,733 10,779 2,787 2,677 2,457 AMDS 23,126 13,524 15,744 4,261 5,019 4,899 4,876 19,055 4,431 4,292 3,716 Mining 3,557 2,573 4,380 1,128 1,657 1,678 1,805 6,268 1,271 1,576 1,288 Holding & service co's and eliminations (19,080) (11,685) (16,354) (4,415) (5,189) (4,853) (4,934) (19,391) (4,538) (4,347) (3,875) Total 116,942 61,021 78,025 22,184 25,126 24,214 22,449 93,973 22,703 22,478 19,723 EBITDA (US$ millions) FCA 4, , , FCE 6,448 1,946 2, , Long 6,635 1,647 2, , AACIS 3, , , AMDS 1,103 (97) (19) Mining 1, , , Holding & service co's and eliminations (668) (135) (975) 115 (169) (18) 107 Total 23,652 5,600 8,525 2,582 3,413 2,408 1,714 10,117 1,972 2,447 1,336 Average Steel EBITDA/tonne (US$/tonne) FCA FCE Long AACIS Total** * As from January 1, 2010 the Steel Solutions and Services segment has been renamed ArcelorMittal Distribution Solutions (AMDS). ArcelorMittal Distribution Solutions shipments are eliminated in consolidation as they primarily represent shipments originating from other ArcelorMittal operating subsidiaries. ** Average Steel EBITDA/tonne excludes mining and holding and service companies and eliminations. Comparative figures exclude Stainless division 49

51 Steel shipments, EBITDA and Revenue analysis 2011 EBITDA by region 2011 Steel shipment by region* Long Carbon North America 5% Long Carbon South America 7% Flat Carbon Europe 32% Long Carbon Europe 15% Others 1% Africa 5% Flat Carbon South America 6% Asia CIS 9% Flat Carbon North America 20% Long Carbon South America 13% Long Carbon North America 2% Flat Carbon Europe 22% Flat Carbon South America 7% Long Carbon Europe 7% Others Long 4% Africa 3% CIS 14% Flat Carbon North America 24% Distribution Solutions 4% Poland 5% Germany 10% Spain 5% Italy 4% Turkey 3% France 6% 2011 Revenue by country Others Americas 4% Others Europe 15% Mexico 3% Brazil 8% South Africa 4% Canada 4% China 1% Other Asia Africa 11% United States 17% * Figures exclude shipments from Distribution Solutions which are fully eliminated on consolidation and Mining division 50

52 Steel shipments by product type/ segment 2011 FLAT CARBON AMERICAS 2011 FLAT CARBON EUROPE Coated Products 20% Slabs 18% Other Products 9% Coated Products 37% Slabs 4% Other Products 11% Cold Rolled Products 16% Hot Rolled Products 37% Cold Rolled Products 13% Hot Rolled Products 35% 2011 LONG CARBON 2011 ASIA, AFRICA AND CIS Sections 16% Semis 7% Other Products 18% Bars & Rebars 22% Wire Products 14% Sections 4% Semis 7% Other Products 6% Wire Rod / Wire Products 28% Bars & Rebars 31% Coated Products 9% Cold Rolled Products 9% Hot Rolled Products 29% Extensive geographical and product diversification 51

53 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