Resilience and potential in emerging markets - Africa & CIS (ACIS) case study

Transcription

1 Resilience and potential in emerging markets - & CIS (ACIS) case study Christophe Cornier - Member of the Group Management Board 16 September 2009 Investor day London & New York

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, 2008 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 Resilience to the crisis Potential demand in emerging markets 2

4 Resilience to the crisis 3

5 and CIS economies have been hit severely by the global crisis Russia quarterly GDP Crude steel production (Q4 08 vs Q3 08) % Ukraine % Kazakstan Q 01 3Q 01 1Q 02 3Q 02 1Q 03 3Q 03 1Q 04 3Q 04 1Q 05 3Q 05 1Q 06 3Q 06 1Q 07 3Q 07 1Q 08 3Q 08 1Q 09 ACIS economy has been negatively impacted by the financial crisis and credit crunch -38% -31% Russia Source: Bloomberg and WSA 4

6 Swift and sharp production cut combined with raw material optimization ACIS quarterly crude steel production (million tonnes) ACIS Raw material self-sufficiency (%) 5 4 Production reduced by 50% in Q Coal Iron ore Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q H09 We reacted to falling market demand with sharp production cuts while sourcing a greater portion of raw materials internally 5

7 Capturing new marketing opportunities in resilient emerging markets ArcelorMittal ACIS division industrial presence Emerging markets steel production (base 100) Ukraine CIS Middle East Kazakhstan India, China and South East Asia South Iron Ore mines Coal mines Steel Plants Q 06 2Q 06 3Q 06 4Q 06 CIS & Middle East & India China 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 Middle East, India, South East Asia and China, which are traditional export markets for ArcelorMittal ACIS division, have shown strong resilience during the crisis 6

8 Successful volume shift to resilient and high growth markets Geographic breakdown of ACIS shipments in 2008 Geographic breakdown of ACIS shipments in H % China 1% South East Asia 2% Middle East 22% Europe 5% 41% China 6% India 4% South East Asia 3% Middle East 25% CIS 25% CIS 18% Europe 3% Middle East, India, South East Asia and China now represent 38% of ACIS total shipments 7

9 Potential demand in emerging markets 8

10 Recovery well underway Industry crude steel production in CIS (000 t) 13,000 ArcelorMittal ACIS crude steel production (base 100) ,000 9, % * , ,000 Jan 05 Jan 06 Jan 07 Jan 08 Jan Q Q Q Industry crude production in (000 t) CIS production (base 100) production (base 100) 2, % * 1,500 1, Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Continuing active and flexible marketing actions to capture growth Cautious production restart in line with demand Maintaining focus on cost control and progressing further in sustainable cost reduction ArcelorMittal ACIS operations recovering at the right pace Source WSA * Since crisis trough 9

11 CIS demand to recover over time World crude steel production in 2008 Developed World* 1% Rest of the World Middle East 1% India CIS 9% CIS prospects ArcelorMittal is number 2 in the region with a significant industrial presence in Kazakhstan and Ukraine CIS markets have been severely impact by credit crisis resulting from credit bubble Recovery in the market will be gradual and may take until 2012 to recover to pre-crisis levels Long term growth to remain solid due to global needs for energy and commodities China CIS steel consumption (Mt) 60 Credit bubble Steel consumption per capita (kg/year) Text??? CIS recovery to be gradual and progressive but long term fundamentals remain solid Developed world includes US, Canada, EU15, Japan and Korea Source WSA and ArcelorMittal estimates 2010P 2012P 0 48 Other CIS Ukraine Russia China Developed World 10 10

12 Strong demand potential in World crude steel production in 2008 prospects Developed World* 1% China Rest of the World Middle East 1% India CIS 9% ArcelorMittal is number 1 in with a significant industrial presence in South, Algeria and Morocco n market expected to come back to precrisis level in 2010 Long term growth to remain solid due to high population growth and global needs for energy and commodities n steel consumption (Mt) Steel consumption per capital (kg/year) Developed world includes US, Canada, EU15, Japan and Korea Source: WSA and ArcelorMittal estimates P 2012P Text??? Market to normalise in 2010 and to expand again thereafter Other 85 Egypt 125 South Middle East China 11 11

13 Middle East demand World crude steel production in 2008 Middle East prospect Developed World* 34% 1% Rest of the World Middle East 1% India CIS 9% ArcelorMittal is the largest exporter of steel to the Middle East primarily through its ACIS operations Market largely unaffected by crisis due to credit availability Long term growth to remain solid due to population growth and global needs for energy China 39% Middle East steel consumption (Mt) Steel consumption per capita (kg/year) P 2012P Text??? Strong demand expected to continue in Middle East region Developed world includes US, Canada, EU15, Japan and Korea; Other Middle East includes Syria, Iraq, Dubai and Adu Dhabi. Source: WSA and ArcelorMittal estimates Egypt 253 Middle East Turkey Other Middle East 462 Developed World 12 12

14 Sufficient capacity to meet demand until 2011/2012, Middle East, CIS and India total steel consumption (Mt) ArcelorMittal ACIS capex (Billion USD) P 2010P 2011P 2012P Text??? Underlying demand potential expected to be satisfied from existing capacity for next 2 years Source WSA and ArcelorMittal estimates e Maintenance Capex Growth Capex 13 13

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