3Q 12 Results Conference Call

Transcription

1 3Q 12 Results Conference Call Lakshmi N Mittal, Chairman and Chief Executive Officer Aditya Mittal, Chief Financial Officer 31 October 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 Agenda Results overview and recent developments Market outlook Results analysis Outlook and Guidance 2

4 Safe Sustainable Steel Quarterly Health & Safety frequency rate* for mining & steel Governance, people, community and sustainability initiatives 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 Target 1.0 ArcelorMittal Hamburg has been recognised as the flagship project for the city s European Green Capital 2011 Award. This accolade builds on the recent ISO50001 certification for energy management. The generation of CO2 has been reduced by 60,000 tonnes at this plant since 2007 through energy efficiency improvements 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 in Kazakhstan is pioneering the reuse of coal-bed mine waste gas methane for power generation. In addition to removing potentially dangerous methane from the coal mine, the project inaugurated in July 2012 is expected to generate an annual 1.4MW of electricity that will meet ~20% of the mine s power needs and reduce CO2 emissions significantly. 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 3

5 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 4

6 Management actions underway EBITDA maximisation Management gains program: $4.8 billion savings rate achieved Asset Optimization Plan continues to make progress 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 Further plans under development Deleveraging plan Continue to target investment grade credit rating Asset sales of $2.7 billion since September 2011; plans for additional disposals on track Dividend cut: board proposes a dividend of $0.20/share to be paid out of 2012 earnings (compared to $0.75/share in 2011) with intention to progressively increase once deleveraging plan complete Capex plans under scrutiny with savings targeted in 2013 Ongoing management initiatives to remain cost competitive and deleverage in a challenging environment 5

7 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 6

8 Market outlook 7

9 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 8

10 Slowdown in global indicators but signs of stability emerging 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 > In Europe, manufacturing output has stabilised as destocking at end-users ends and sentiment improves Contraction Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 China (HSBC) Euro Area USA Global Jan-11 Jul-11 Jan-12 Jul-12 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 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. 9

11 Developed construction generally weak US Residential and Non-Residential construction indicators (SAAR) $bn* Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Residential Non-Residential Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Eurozone and US construction indicators** Expansion Contraction Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-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 10

12 Chinese industrial growth bottoms in 3Q 12 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 11

13 Inventory levels have declined during 3Q Europe Service Centre Inventories (000 MT) EU (EASSC) Months Supply US Service Centre Total Steel Inventories (000 MT) USA (MSCI) Months Supply ,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% 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 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 Flat and Long % of ASC (rhs) 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 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 Global apparent steel consumption China EU % 2-2.5% -28.8% -8% F F NAFTA -7.6% 8% Rest of World 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. 13

15 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 14

16 Financial Results 15

17 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) 16

18 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) ($million) 2,449 2Q 2012 EBITDA Depreciation impairment and restructuring charges (1,348) Operating Income/ (loss) Depreciation: (1,158) Restructuring: (190) 1,101 Income from Equity 121 Finance Cost Interest: (456) Forex and other: (32) (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 $0.7 billion during 3Q 12 17

19 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 18

20 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). 19

21 Outlook and Guidance 20

22 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 21

23 Questions 22

24 Appendix

25 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. 24

26 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 25

27 Capex and Growth Plans Steel growth capex remains temporarily suspended Focus remains on core growth capex in Mining: Liberia: Phase 1 complete and running at 4MT pa; commercial rampup underway Andrade Mines (Brazil): Iron ore expansion to 3.5MT pa (expected completion in 4Q 2012) AMMC: Expansion from 16MT iron ore to 24MT pa by 2013 underway AMMC: Further expansion to 30MT pa iron ore under study Upgrade railway line linking mine to port in Liberia AMMC: Mont-Wright Mining Complex 9M 2012 capex spend of $3.6bn; FY 2012 capex expected at approximately $4.5bn 26

28 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 27

29 ArcelorMittal Mines Canada (AMMC): expansion underway Canadian industrial location ArcelorMittal Mines Canada overview Expansion of our Mont Wright mine at AMMC and concentrate capacity to 24Mtpa due 2013 (from 16Mtpa post operational improvements) approved Expansion capitalising on existing infrastructure, product quality and experienced workforce Wholly-owned 420-km railway infrastructure Port Cartier s pellet plant has the capacity to produce 9.3Mtpa of iron ore pellets Infrastructure capacity capable of supporting future expansion scenarios Ability to handle cape-size vessels year round and to handle 30Mtpa without significant additional capex Capex C$1.2bn for mine and concentrator plant expansion* Post expansion cash cost are forecast circa US$38/tonne Advantageously located with easy access to European and US markets AMMC expansion plan (concentrate) Million Mt Expansion to 30Mtpa under study F 2015F Under study Brownfield expansion Canada base Strategic advantage from exclusive use of own rail and port facilities * Total scheme investment of US$2.1 billion includes investment in expanding the pellet plant which has not yet been committed ** AMMC 2013 brownfield expansion includes 1mt increase for spirals 28

30 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 29

31 Segment Highlights Segmental EBITDA (US$mn) FCA FCE Long AACIS AMDS Mining 3Q11 4Q11 1Q12 2Q12 3Q12 Segmental EBITDA/tonne (US$/t) 3Q11 4Q11 1Q12 2Q12 3Q12 FCA: EBITDA -43.8% y-o-y; $44 EBITDA/t ASP -$31/t compared to 2Q 12 Shipments -6.3% lower than 3Q 11 FCE: EBITDA -48.0% y-o-y; $33 EBITDA/t ASP -$28/t compared to 2Q 12 Shipments -8.6% lower than 3Q 11 Long: EBITDA -24.7% y-o-y; $60 EBITDA/t ASP -24$/t compared to 2Q 12 Shipments -8.0% lower than 3Q 11 AACIS: EBITDA -75.4% y-o-y; $22 EBITDA/t ASP -$29/t compared to 2Q 12 Shipments +5.8% higher than 3Q 11 AMDS: EBITDA -77.1% y-o-y ASP -$51/t compared to 2Q 12 Shipments -10.6% lower than 3Q 11 Mining: EBITDA -53.6% y-o-y Sales -18.3% lower than 2Q 12 Own iron ore production +1.3% y-o-y; Own coal production -2.6% y-o-y FCA FCE Long AACIS AMDS 3Q 12 EBITDA declined Vs 2Q 12 across all segments with lower steel pricing and volumes 30

32 Flat Carbon Americas (FCA) EBITDA (US$mn, LHS) and ASP (US$/t, RHS) -4% EBITDA decreased to $236 million from $474 million in 2Q 12 and from $420 million in Q Q11 4Q11 1Q12 2Q12 Flat Carbon Americas Steel Shipments (000 t) -50% 236 3Q12 Crude steel production decreased by 4.8% to 5.7 million tonnes for 3Q 12, as compared to 6.0 million tonnes for 2Q 12, driven primarily by lower production in North America and in South America following blast furnace #1 maintenance work in Tubarao, Brazil. Steel shipments for 3Q 2012 were 5.4 million tonnes, 6.7% lower than 2Q 2012, primarily driven by lower slab demand and pricing as well as lower slab availability in Brazil following blast furnace #1 maintenance 5,800 5,700 5,600 5,500 5, ,708 Q311 5,458 Q411 5,672 Q112 5,735 Q212-7% 5,351 Q312 ASP decreased 3.5% to $850/t from $881/t in 2Q 12. Lower profitability was primarily driven by North American operations due to lower selling prices and one time labor cost ($72 million impact related to one-time signing bonus and post retirement benefit costs following the new US labor contract) combined with lower steel shipment volume. FCA profitability declined Vs 2Q 12 31

33 Flat Carbon Europe (FCE) EBITDA (US$mn, LHS) and ASP (US$/t, RHS) -3% EBITDA decreased to $191 million in 3Q 12 from $381 million in 2Q 12 and $367 million in 3Q 11-50% Crude steel production decreased by 5.9% to 6.7 million tonnes in 3Q 12 as compared to 2Q 12. Production decreased significantly reflecting weaker market sentiment and seasonal demand patterns Q11 4Q11 1Q12 2Q12 Flat Carbon Europe Steel Shipments (000 t) 191 3Q12 Lower profitability was primarily driven by lower steel shipment volumes as the effects of lower average steel selling prices was offset in part by lower costs. EBITDA for 3Q 12 includes $131 million of DDH income recognized during the quarter as compared to $136 million DDH income for 2Q 12. 7,500 7,000 6,500 6, ,385 3Q11 6,188 4Q11 7,461 1Q12 6,771 2Q12-14% 5,837 3Q12 Operating result in 3Q 12 included impairment expenses relating to the intention to launch a project to permanently close the liquid phase at the Florange site in France of $130 million and restructuring costs totaling $90 million associated primarily with the decision to close two blast furnaces, sinter plant, steel shop and continuous casters in Liege, Belgium. FCE profitability declined Vs 2Q 12 due to weak demand and seasonal slowdown 32

34 Long Carbon Americas & Europe (LCAE) EBITDA (US$mn, LHS) and ASP (US$/t, RHS) 6,000 5,900 5,800 5,700 5, Q11 5, Q Q12 Long Carbon Steel Shipments (000 t) 564 2Q12 5,846 5,839 5,738-3% -41% -6% 330 3Q12 EBITDA decreased to $330 million from $564 million in 2Q 12 and $438 million in 3Q 11 Crude steel production amounted to 5.7 million tonnes for 3Q 12, a decrease of 2.9% as compared to 5.9 million tonnes for 2Q 12. Production was lower in Europe primarily due to weak market sentiment and seasonal effects. Steel shipments for 3Q 12 were 5.5 million tonnes, a decrease of 5.7% as compared to 5.8 million tonnes for 2Q 12, particularly due to seasonal slowdown in Europe offset by improved Brazilian market. ASP decreased 2.7% to $861/t from $885/t in 2Q 12. EBITDA for 3Q 12 was $330 million, a 41.5% decrease as compared to $564 million for 2Q 12. Lower profitability was primarily driven by reduced steel shipment volumes and average steel selling prices particularly in the European operations due to weak market sentiment and seasonal slowdown as well as a reduction of shipment volumes in the Tubular business. 0 3Q11 4Q11 1Q12 2Q12 5,508 3Q12 Long Carbon profitability declined versus 2Q 12 33

35 Asia, Africa and CIS (AACIS) EBITDA (US$mn, LHS) and ASP (US$/t, RHS) -4% EBITDA decreased to $70 million from $120 million in 2Q 12 and $284 million in 3Q 11 Crude steel production was 3.7 million tonnes for 3Q 12, flat compared to 2Q % 70 Steel shipments for 3Q 12 amounted to 3.2 million tonnes, down 4.3% as compared to 3.3 million tonnes for 2Q 12. Steel shipment volumes declined in Kazakhstan due to import pressure and in South Africa due to weak market demand, offset by improved steel volumes in the Ukrainian operations. 3,400 3,350 3Q11 4Q11 1Q12 AACIS Steel Shipments (000 t) 2Q12-4% 3Q12 Sales in the AACIS segment were $2.5 billion for 3Q 12, a decrease of 8.2% as compared to $2.7 billion for 2Q 12, primarily due to lower steel shipments and steel average selling prices (4.2%). 3,300 3,250 3,200 3,150 3,100 3,050 3,065 3,353 3,321 3,178 Lower profitability was primarily due to lower steel shipment volumes as the effects of lower average steel selling prices was offset in part by lower costs. 0 3,005 3Q11 4Q11 1Q12 2Q12 3Q12 AACIS profitability declined versus 2Q 12 34

36 Distribution Solutions (AMDS) EBITDA (US$mn, LHS) and ASP (US$/t, RHS) -6% EBITDA decreased to $11 million from $385 million in 2Q 12 and $48 million in 3Q 11. EBITDA for 3Q 12 includes $339 million one time positive impact from Skyline divestment. Stripping out this gain EBITDA decreased by 76.1% in 3Q 12 as compared to 2Q 12 5, Q11 4Q11 1Q12 2Q12* Distribution Solutions Steel Shipments (000 t) 11 3Q12 Steel shipments decreased 9.0% to 4.1Mt in 3Q 12 as compared to 4.5Mt in 2Q 12 ASP declined 5.5% to $869/t from $920/t in 2Q 12 4,800 4,600-9% 4,400 4,200 4,607 4,957 4,589 4, Q11 4Q11 1Q12 2Q12 4,118 3Q12 AMDS EBITDA declined versus underlying 2Q12 EBITDA * Includes $339 million gain from Skyline divestment 35

37 Mining Mining EBITDA (US$mn) Q11 4Q Q Q12-28% 391 3Q12 EBITDA was lower at $391m as compared to $541m in 2Q 12 and lower as compared to $842m in 3Q 11 Own iron ore production 14.3Mt decreased 1.0% as compared to 14.4Mt in 2Q 12; up 1.3% y-o-y Total iron ore shipments decreased to 14.0Mt (vs. 15.2Mt in 2Q 12) of which 7.1Mt at market prices (vs. 8.2Mt in 2Q 12) and 6.9Mt on cost-plus basis (vs. 7.0Mt in 2Q 12). On a y-o-y basis, market price shipments increased 6.7% from 6.7Mt in 3Q 11 to 7.1Mt in 3Q 12 Own coal production decreased 1.2% from 2Q 12 to 2.0Mt in 3Q 12 Iron ore (million tonnes) Coal (million tonnes) Q11 4Q11 1Q12 2Q12 3Q12 3Q11 4Q11 1Q12 2Q12 3Q12 Own iron ore prod Shipped at market price Shipped at cost plus Own coal prod Shipped at market price Shipped at cost plus EBITDA for 3Q 12 was 28% lower Vs 2Q 12, primarily due to lower marketable shipments and substantially lower iron ore price Definitions: Market priced tonnes represent amounts of iron ore or other raw materials from ArcelorMittal mines that could be sold to third parties on the open market. Market priced tonnes that are not sold to third parties are transferred from the Mining segment to the Company s steel producing segments at the prevailing market price. Shipments of raw materials that do not constitute market price tonnes are transferred internally on a cost-plus basis. 36

38 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. 37

39 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. 38

40 Liquidity and debt maturity profile Liquidity at September 30, 2012 (US$ billion) Debt maturities (US$ billion) Unused credit lines 10.0 Cash Short term & others Commercial paper Liquidity at 30/9/12 Debt due in Commercial Paper Other Convertibles 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 Baa3, 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 39

41 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