Delphine Bastien Corporate responsibility & SRI manager Valérie Mella Investor relations specialist. 27 th November 2013

Transcription

1 Delphine Bastien Corporate responsibility & SRI manager Valérie Mella Investor relations specialist 27 th November 2013 ArcelorMittal s company update and its approach to Corporate Responsibility - a strategic focus on social and environmental performance in support of business objectives The ArcelorMittal Orbit

2 Disclaimer Forward-Looking Statements This presentation may contain forward-looking information and statements about ArcelorMittal and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements may be identified by the words believe, expect, anticipate, target or similar expressions. Although ArcelorMittal s management believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of ArcelorMittal s securities are cautioned that forward-looking information and statements are subject to numerous risks and uncertainties, many of which are difficult to predict and generally beyond the control of ArcelorMittal, that could cause actual results and developments to differ materially and adversely from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified in the filings with the Luxembourg Stock Market Authority for the Financial Markets (Commission de Surveillance du Secteur Financier) and the United States Securities and Exchange Commission (the SEC ) made or to be made by ArcelorMittal, including ArcelorMittal s Annual Report on Form 20-F for the year ended December 31, 2012 filed with the SEC. ArcelorMittal undertakes no obligation to publicly update its forward-looking statements, whether as a result of new information, future events, or otherwise. Non-GAAP Financial Measures This presentation may contain supplemental financial measures that are or may be non- GAAP financial measures. Definitions of such supplemental financial measures and a discussion of the most directly comparable IFRS financial measures can be found on ArcelorMittal's website at 1

3 Content Who we are Company presentation Heath and safety: our number 1 priority Key figures and markets Position in the industry and brand strategy Corporate responsibility strategy Company governance structure Transparent governance Where we are going Demand Outlook, profitability and balance sheet Cost focus Energy efficiency management Asset Optimization Social Dialogue Focussed capital allocation Climate change: short-term and long-term investments Mining growth stakeholder engagement Franchise steel development Research and Development on products with environmental credentials Steel recyclability and life cycle analysis 2

4 The world s leading steel and mining company ArcelorMittal is the world's number one steel and mining company, with around 246,000 employees in more than 60 countries. ArcelorMittal is the leader in all major global steel markets, including automotive, construction, household appliances and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks. An industrial presence in 20 countries exposes the company to all major markets, from emerging to mature. ArcelorMittal values geographical breadth, product diversity and raw materials security. Approximately 39% of our steel is produced in the Americas, 44% in Europe and 17% in other countries such as Kazakhstan, South Africa and Ukraine. Underpinning all our operations is a philosophy to produce safe, sustainable steel 3

5 Health & Safety is our number 1 priority and we have delivered continuous progress over the past years H&S performance is reported every quarter as part of the company s earnings release Senior management remuneration: 20% of bonus dependent on the group s H&S performance Lost Time Injury Frequency rate* (mining & steel, employees & contractors) Lost Time Injury Frequency rate target of 1.0x maintained for 2013 Added focus on further reducing the rate of severe injuries and on fatality prevention Dedicated improvement programmes Journey to Zero programme: aims at achieving zero fatalities, accidents and occupational illnesses 2013 Health & Safety Day: Stop, think and act safely theme Mining s Courageous leadership set of values: everyone has the authority, responsibility and accountability to courageously speak up when someone is thought to be at risk H&S standards applicable throughout the Group where local regulations are less stringent Training and involvement of all employees and contractors Systematic investigation of all incidents and knowledge sharing of the causes to prevent any future occurrence 95% of operations OHSAS certified to international H&S management standards Health and Safety: our no.1 priority * worldsteel-standard: Fr = Lost Time Injuries per worked hours; based on own personnel and contractors 4

6 ArcelorMittal key figures Sales (US$ billion) Allocation of employees in 2012, according to geographic location (fulltime equivalent) Ebitda (US$ billion) Operating income / (loss) (US$ billion) (2.6) 5.2 Net income / (loss) (US$ billion) (3.4) 2.4 Shipments (million tonnes) Steel production (million tonnes) % 16% 14% 8% EU27 37% Other European countries North America South America Asia Middle East and Africa 16% Own iron ore production (million tonnes)* Own coal production (million tonnes)* Around 246,000 employees in more than 60 countries Leader in the metals and mining sector - 61 blast furnaces and 46 electric arc furnaces *Own iron ore and coal production excluding strategic long-term contracts. 5

7 Geographical reach Market position by region Leader in North America Leader in Latin America* No 1 in Europe Leader in Africa Major producer in the CIS ArcelorMittal Others Emerging markets continue to offer the best organic growth potential for ArcelorMittal Superior demand growth potential We have the platform and experience: Already the steel market leader in the Americas, Europe and Africa and topfour producer in the CIS Brazil is one of our franchise businesses We also have JV projects in the Middle East and China Industrial and commercial network focus on our franchise businesses * Latin America includes Mexico. 6

8 Positioned for industry-leading returns and value Our primary focus is on the safety of our employees Our responsive strategy ensures that ArcelorMittal retains the core attributes to deliver value through the cycle and the management team are incentivised as owners While the balance sheet has been repositioned, the net debt target of $15bn medium term remains a priority We are focussed on protecting our cost position with a new $3bn management gains programme by end 2015 We are concentrating our investments to protect and expand our franchise businesses such as global automotive, mining and Brazil Together with a constructive medium term outlook on shipments, we have a roadmap to normalised Ebitda of $150/t ArcelorMittal: the industry leader with a global presence backed by raw materials 7

9 ArcelorMittal main markets Automotive ArcelorMittal is the leading automotive steelmaker with a worldwide presence, delivering a large spectrum of innovative products, solutions and services to automotive customers No. 1 supplier of flat carbon steels for the global automotive sector, including advanced and ultra high strength, galvanised and coated steels for the global automotive sector Construction Globally, the largest single market for steel: a 715 million tonne steel consumption market comprised of diversified products Emerging markets represent more than 50% of the square meters constructed each year globally. ArcelorMittal is a world leader with over 27 million tonnes of products delivered to the building and construction sector in 2012 Packaging New packaging concepts constantly designed to achieve differentiation by steel solution Complementary industrial network in Europe with production plants and service centers near customers' can making facilities The leader in automotive steels 8

10 ArcelorMittal brand strategy Our brand strategy defines what we stand for and how we are different from our competitors. transforming tomorrow As the world's leading steel and mining company, we have unique responsibilities. With the needs of future generations in mind, we continue to expand the potential of steel. ArcelorMittal brand values: Sustainability We are guiding the evolution of steel and mining to secure the best future for the up and downstream industry and for generations to come. Our commitment to the world we live in extends beyond the bottom line to include the safety and wellbeing of our people and the communities of which we are a part. This longterm approach is central to our business philosophy. Quality We look beyond today to imagine the steel of tomorrow. Through the talent of our people and our cuttingedge products, we create world-class solutions for both our steel and minerals customers. Leadership We are bold thinkers with a clear vision for the future of steel: the fabric of life. We are proud of our achievements and our entrepreneurial spirit, which brought us to the forefront of our industries. Our brand strategy underpins everything we say and do 9

11 Our corporate responsibility strategy aims to support the achievement of ArcelorMittal Safe, Sustainable Steel and Mining by: Investing in our people Making each and every person working on our behalf feel valued Making steel more sustainable Using our expertise in steel to develop cleaner processes and greener products Enriching our communities Ensuring our presence plays an important role in all the communities where we operate operated through transparent governance A dedicated governance structure underpins the strategy to drive performance 10

12 1 - Investing in our people Workplace safety is an everyday focus and the number one priority. We also work to make ArcelorMittal a place where people can fulfil their potential and feel that their views are taken into account. Health and safety Our Journey to Zero campaign targets a fatality and injury free workplace. In 2012 the lost time injury frequency rate (LTIFR) reduced for a 5 th year in a row. 95% of our steel and mining operations are certified to OHSAS Training and development More than 27,000 of our employees participated in 200,000+ hours of training at ArcelorMittal University. LTIFR Diversity and inclusion We launched a women in leadership programme in Employee relations We believe in open and continuous dialogue aligned with ILO principles. 85% of our employees are covered by collective bargaining agreements. Making each and every person working on our behalf feel valued (1) Lost time injury frequency rate per million hours worked. 11

13 2 - Making steel more sustainable Steel is at the heart of the modern world and offers extensive sustainability benefits to society. That said, we recognise that steelmaking is resource intensive and are taking steps to improve this. Investments $285m invested in research & development $321m invested in environmental & energy capital expenditure Environmental management 98% of our steel production and finishing facilities are certified to ISO We recycled 29mt of steel in 2012, saving 36mt of CO 2 CO 2 per tonne of Total CO 2 emitted steel produced 1 (million tonnes, steel only) Tackling climate change We are committed to reducing our CO 2 per tonne of steel produced by 8% by 2020 We work closely with our customers to support their environmental ambitions e.g. our S-in motion uses lightweight steels, to reduce a vehicle s CO2 emissions by 14% Biodiversity: extensive biodiversity surveys undertaken in Canada and Liberia Using our expertise in steel to develop more resource efficient processes and products (1) Progress has been made in reducing CO2 /per tonne of steel produced, however some cyclical fluctuations occur depending on utilisation rates of our plants 12

14 3 - Enriching our communities Every ArcelorMittal site is an integral part of its local community and environment. We place great value on our engagement with local communities and ensure on open dialogue with relevant stakeholders. Community engagement 30 stakeholder engagement plans have been developed covering all our major operations Local grievance mechanisms are in place in 26 of our units Local reporting to provide annual reviews: 16 reports published in 2012 Economic contribution In 2012, we made an estimated financial contribution 1 to society of $71.3bn ArcelorMittal Foundation We invested $41.2m in projects and grants in employees participated in solidarity holidays 2 ArcelorMittal Foundation projects (number) Our presence plays an important role in all the communities where we operate (1) Reported economic contribution is based on wages and salaries, supplier and contractor payments, corporate income tax and local taxes, capex, dividends, R&D and ArcelorMittal Foundation projects. It does not include all areas where ArcelorMittal contributes to the economy, such as through indirect job creation through the supply chain, and therefore is not exhaustive. (2) Solidarity holidays give employees the opportunity to dedicate a portion of their annual leave to development work in another country. 13

15 4 - Transparent governance Our governance framework underpins how our company is led, managed and structured, from the composition of our board of directors, to the way we expect each employee to behave. Code of business conduct sets our standards of behaviour, and covering the way we deal with suppliers, business partners and individuals Specific guidelines on anti-trust, anti-corruption, insider-dealing, conflicts of interest and nondiscrimination By the end of 2012, over 80% of our employees had completed their training Quarterly compliance certification for each subsidiary We were ranked 4 th out of 105 multinational companies in the 2012 study from Transparency International for transparency in reporting Since 2009, ArcelorMittal supports the Extractive Industries Transparency Initiative EITI board member, representing the mining industry Member of the multi-stakeholder group of Liberia EITI Supporting the implementation of EITI in Kazakhstan Detailed guidelines on anti-corruption and bribery policy complement our code of business conduct since 2009: This covers in particular: Bribes in any form Direct or indirect political contributions Charitable contributions and sponsorship 94% of the target population completed the training in 2012 ArcelorMittal company-wide human rights policy launched in 2010 More than 205,000 employees trained at the end of 2012 With a supplier spend of $50bn+ we have a unique opportunity to promote sustainable practices along our supply chain Code for responsible sourcing launched in major suppliers assessed against the code in 2012 Our governance framework underpins how our company is structured 14

16 A strong, transparent and accountable governance structure to lead to sustainable achievements from the company Our Board of Directors has formal ownership and accountability for corporate responsibility (CR), and plays an active part in overseeing how such issues are managed, measured, and improved Responsibility & review Performance quarterly review by the Board of Directors Group Management Board (GMB) member G. Urquijo is responsible for CR Other GMB members have a responsibility for CR-specific items such as environment, health and safety, and research and development 20% of senior management bonus dependent on the group s H&S performance Local CEOs responsible for CR issues in their own operation A strong independent Board 8 out of 11 directors are independent Good experience of and in industry 18% female members on the board today; an aspirational target of 30% Combination of the roles of CEO and Chairman balanced by a Lead Independent Director Implementation Corporate CR team supported by the senior managers expertise through the Corporate Responsibility Coordination Group: 9 meetings in 2012 Network of local CR coordinator at all main production sites: policy implementation, stakeholder engagement, local reporting Transparency Timely & quality reporting Top management and operating units are directly engaged in Corporate Responsibility 15

17 Our corporate responsibility programme and reporting respond to issues important to our stakeholders and material for the company As part of our commitment to transparent governance, we undertake an annual group-wide materiality assessment to identify the issues that are important to our stakeholders This insight informs our corporate responsibility programme and reporting We have published the resulting materiality matrix since 2009 In 2013 we published our 6 th corporate responsibility (CR) report. It adheres to the Global Reporting Initiative and is assured by an external provider Our latest reports can be found at: e-responsibility/ ArcelorMittal lobbies in an open and transparent way on important policies, such as environment, climate change, trade, social policy, and research & development Signed up to the European Commission s Register of Interest Representatives: information on the work done with European institutions, and the money we spend on lobbying and other public policy work Report quarterly to the USA Congress Lobbying Disclosure Report on the company s federal lobbying activities: total amount spent on lobbying, and issues and agencies lobbied Key topics of interest to our investors: Health & safety Climate change Environmental management & investments Local disputes and controversies Social Dialogue & industrial footprint restructuring product innovation Management of risks Our commitment to transparent governance drives our disclosure on material issues 16

18 Content Who we are Company presentation Heath and safety: our number 1 priority Key figures and markets Position in the industry and brand strategy Corporate responsibility strategy Company governance structure Transparent governance Where we are going Demand Outlook, profitability and balance sheet Cost focus Energy efficiency management Asset Optimization Social Dialogue Focussed capital allocation Climate change: short-term and long-term investments Mining growth stakeholder engagement Franchise steel development Research and Development on products with environmental credentials Steel recyclability and life cycle analysis 17

19 Demand prospects improving Global PMI indicates developed manufacturing growing above trend for the first time in two years ArcelorMittal weighted global manufacturing PMI* US manufacturing grew q-o-q in 3Q 13 and up over 2.5% y-o-y. October PMI remained >50 near recent highs despite the impact of US government shutdown In Europe, manufacturing output still down y-o-y but in 3m to August is up over 3% annualised from previous 3m Eurozone PMI above 50 for four consecutive months. Strong readings for Czech Republic, Poland and UK. EU27 PMI at highest since 1H 11 Chinese industrial output growth has rebounded to 10.1% y-o-y in 3Q 13, the best quarter since 1Q 12 supported by strong auto and a pick-up in the PMI>50 Global indicators signal continued growth in developed markets in 4Q 13, and confirm a rebound of Chinese growth since the summer Source: *Markit. ArcelorMittal estimates

20 Profitability is recovering Comparable EBITDA (US$mn) Q3 13 EBITDA 24% higher than comparable Q3 12 3Q'12A 3Q'13A H'12A 1H'13A 2H'13Con* Consensus* is forecasting an improvement in comparable EBITDA FY'12A FY'13Con* We continue to believe that the 2H 12 will mark the low-point in AM EBITDA cycle Note: *Bloomberg Consensus on 11/11/13 is for 2013 EBITDA of $6697mn (based on mean of 33 estimates) 19 19

21 Balance sheet repositioned Net debt progression $billion ~ Q 11 3Q 13 4Q 13F Medium term target Net debt/ltm EBITDA* 2.3x 2.7x Year end FY13 net debt expected to be ~$17bn medium term target of $15bn Ratio of Net debt/ltm EBITDA is based on last twelve months reported EBITDA. Figures based on recast EBITDA as per new accounting standards adopted. Note: Net debt refers to long-term debt, plus short term debt, less cash and cash equivalents, restricted cash and short-term investments (including those held as part of asset/liabilities held for sale). At September 30, 2013 cash included $42 million and debt included $202 million held at Annaba, which has since been classified as asset/liabilities held for sale

22 Roadmap back to normalised profitability Management Gains (cost cutting) Steel Volume Recovery Mining Volume Growth Asset Optimization Average EBITDA/tonne * $150/t $90/t If steel shipments increase by ~15% then we believe $150/t EBITDA is achievable Driven by: Leverage to incremental volumes ($ /t margin on incremental tonne given limited additional fixed cost) Cost benefits from Asset Optimisation (completed $1bn sustainable savings) Cost benefit from new $3bn Management gains Execution of mining growth plan (+28MT new production capacity by 2015) Offsetting impact of lower iron ore price Improved industry utilization rates driving higher margins and profitability We believe EBITDA/tonne of $150 is an achievable normalized target * Note: EBITDA is underlying number excluding one-time items, CO2 gains and DDH

23 Relentless cost focus new $3bn cost improvement underway New $3bn management gains program ($ billion) Annualized savings Gap Analysis for Cost Savings per Main Drivers Savings targets 9M 13 achieved 3.0 Others 28% 29% Yield Energy 21% 22% Productivity 0.8 Gap Analysis for Cost Savings by Process 2013F 2014F Bottom up plan across the group 2015F 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 Cold rolling mill & HDG Hot strip mill Gap analysis completed in 2012 defined the priorities for plan 10% 20% Others 11% Sinter & BF 25% 34% Steel shop 22

24 Energy efficiency improvement will deliver most of the CO 2 emission reductions in the short to medium term and is essential to our productivity Our targets on energy efficiency Group: $200m annual energy savings by 2020 vs (improved practices + investment) Flat Carbon Europe (FCE): 10% energy cost reduction by 2016 Steel energy intensity is linked to the consumption of coking coal (as chemical reducing agent, not for heating), electricity, natural gas (production & heating), and process gases (Coke Oven, Blast Furnace, Basic Oxygen Furnace) In some locations up to 20% of the operating cost is linked to energy We work on 3 dimensions to improve our performance: behavioural - information sharing, training technical - investment, technical best-practices organisational - energy management best-practices Achievements are supported by a network of managers & specialists: energy manager at each plant (day-to-day operations and performance improvement) supported by corporate functions (technical support and coordination, energy efficient processes research and development, and energy purchasing contracts) In 2008 ArcelorMittal published its energy policy Primary energy consumption (GJ / tonne crude steel) % of the energy consumption relates to 7 upstream processes Energy efficiency to drive CO 2 emission improvements and cost reductions Copyright ArcelorMittal 12/2/

25 Western Europe Footprint now Optimised Concentrated slab production in 5 coastal sites: Dunkirk Ghent Bremen FOS Asturias New Footprint in Western Europe*: # Blast furnaces # Hot strip mills 8 7 # Cold rolling mills Idled least competitive rolling & coating lines Asset optimization ensures FCE achieves: Savings through fixed cost removal Well loaded assets with stable working points Lower variable cost Lower and more stable working capital requirements Better service and quality Reduce capex requirements Transformation costs Working Cap needs Post optimization: FCF positive in current market environment 24 * Note: this is the prospective footprint once all proposals implemented

26 Asset Focus Optimization delivering Essential components have been announced: 4Q 2011: Extended idling of EAF in Madrid; Restructuring costs at other Spanish, Czech Republic & AMDS operations 1Q 2012: Extended idling of EAF & continuous caster at Schifflange; further optimization in Poland and Spain 4Q 2012: Closure of 2 BF, sinter plant, steel shop and continuous casters in Liege, Belgium decided; long term idling of liquid phase at the Florange site Asset Optimization savings achieved ($ million) Residual Costs Run Rate-Savings 1Q 2013: Announced intention to permanently close the coke plant & six finishing lines, in Liege; mothballing Florange 3Q 2013: Industrial phase now complete and mothballing of facilities underway. Now proceeding to the social plan negotiations 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 Including residual costs, the targeted run-rate savings of $1bn has been exceeded Residual costs should disappear from the system by Q 13 Savings are tangible and apparent in improved reported results EBITDA showing clear benefits from Asset Optimization 25 * Note: this is the prospective footprint once all proposals implemented

27 When restructuring is unavoidable, the focus is on ensuring the continuous operation of the group whilst limiting the social impact Regional and national regulations as the minimum standard applicable Social dialogue is facilitated at its most appropriate level (local, national, regional) Good relationships with our employees is essential to ensuring our company s continued success Open and continuous dialogue with employees, both informally and through trade unions and our European Works Council s 24 formal consultations in 2012; we cultivate productive partnerships based on trust and mutual respect A group-wide climate survey takes place every two years, to identify areas where we can improve Unit level assessments of the ArcelorMittal employee relations policy implementation, involving workers and management To limit the impact of reorganisation, we use: Reduction of working hours Early retirement Internal mobility programme Internalisation of previously outsourced activities Support towards job conversion: support team, training, personal project development Voluntary separation scheme Absenteeism rate Number of strikes* Good relationships with our employees is essential to ensuring our company s continued success * exceeding one week in duration 26

28 Focussed capital allocation We are backing our franchise business with capital Franchise businesses are receiving the required capital to protect and expand 27

29 ArcelorMittal continues its short term and long term climate change related investments Our short to medium term solution aims at improving energy efficiency 8% CO 2 emission reduction target by 2020 vs. 2007, i.e. 170kg of CO 2 per tonne of steel Examples of investments completed in 2012 CO2 saving Value Energy recovery and reuse project at Indiana Harbor, USA 340ktpa $63m Refurbishment of the electricity generator at Cleveland, USA 160ktpa $6.5m Underground coal mine methane extraction and valorisation for electricity generation in Karaganda, Kazakhstan 76ktpa $1.6m Boiler upgrades in Galati, Romania 66ktpa $16m Steel reheating at ArcelorMittal Atlantique, France 11ktpa $6.5m Hot strip mill roll cooling at low pressure at Fos/Mer, France 5.6ktpa $0.5m Lighting efficiency project at Burns Harbour, USA 1.6ktpa $0.4m CO2 footprint (million tonnes, steel only) European Union Emissions Trading System 21.8mt CO2 credits sold in 2012, worth $220 million; revenues have been used to support processes efficiency improvements with an impact on energy efficiency From 2013 our annual allocation will not cover our production needs; therefore historical credits will from now on serve to postpone the financial impact Beyond 2020, the long-term solution requires breakthrough technologies Participation in ULCOS consortium since 2004 New research programme to develop low carbon technologies: Low Impact Steelmaking (LIS), a consortium of French industries supported by the French energy and environment agency (ADEME); ArcelorMittal s commitment of 13m out of the total 32m budget; ArcelorMittal R&D centre at Maizières-Les-Metz, France, will coordinate the research CO 2 emissions per tonne of steel in Europe is 50% lower than 30 years ago; further reductions are a major challenge 28

30 Mining expansions on track Own iron ore growth plan production and capacity (Mt) CAPACITY On track to achieve 84mt own iron ore capacity in 2015; ~20% increase in marketable shipments in 2013 vs

31 Mining growth plan: key projects AMMC: expansion to 24mt on track Ramp-up proceeding well 18.5mt production forecast in 2013 vs. 15mt in mt production rate to be achieved by year-end 2013 Unit costs benefiting from higher volumes Liberia: phase 1 shipments ahead of expectations in 2013; phase 2 underway Phase 1: New production record in 3Q 13; 3.7mt shipped 9M 13 (+89% vs. 9M 12) Phase 2: Project underway for 15mtpa premium sinter feed to replace 4mtpa DSO by 2015 All environmental permits for phase 2 received Major equipment procurement ongoing Civil works commenced at the mine and concentrator sites Baffinland: early revenue phase underway 3.5mtpa of DSO trucked to Milne Inlet for export during openwater season by 2015 $700m project capex in 50:50 JV Summer season open-water sea lift of construction materials and fuel completed in Q3 ahead of plan AMMC: Port Cartier Liberia: Offshore transshipment Baffinland: construction camp Three key projects to achieve 84mt own iron ore capacity in 2015

32 We engage with local groups to help us to prioritise the issues that matter most to them, and invest our time and resources in the best way 30 stakeholder engagement plans have been developed covering all our major operations (2012) Local grievance mechanisms are in place in 26 of our units (2012) ArcelorMittal external stakeholder engagement procedure: All applicable obligations on stakeholder engagement and communication are incorporated into a Stakeholder Engagement Plan (SEP) Stakeholders are identified and their specific concerns are identified and analysis to develop a plan for an effective and regular engagement with them to support the company s development strategy Information is disclosed regularly to them on the company s operations and the related impacts: in an accessible language and format Grievance mechanism: accessible and transparent ways to raise concerns are provided to stakeholders Stakeholder engagement activity is included into the Company s formal management structure; the annual SEP is reviewed by the corporate CR Team 16 local reports published in Dedicated website to follow the progress on the development of our Mary River project, located on North Baffin Island in the Qikiqtani Region of Nunavut, Canada: Stakeholder engagement is embedded into management processes 31

33 Franchise Focus steel development Dofasco (NAFTA auto) Restarted project to expand and upgrade galvanizing capacity by 2015 New line #6 (660ktpy capacity) to serve growing NAFTA automotive market Older and smaller galvanizing line #2 (400ktpy capacity) will be closed Increased shipment of galvanized sheet (260ktpy), improved mix and cost Acindar (Argentina long products) Project to optimize and expand downstream capacity by 2016 Installation of a new rolling mill with capacity of 400ktpy bars Improved productivity and lower costs Monlevade*/Juiz de Fora (Brazil long products) restart approved in 2Q 2013; completion expected in 2015 Expansion of downstream facilities with a new wire rod mill in Monlevade (additional capacity of 1,050ktpy of coils) Juiz de Fora rebar capacity increase from 50 to 400ktpy (replacing some wire rod production capacity) and meltshop capacity increase by 200ktpy Dofasco: #6 Galvanize Line foundations Dofasco: tension reel for new #6 line VAMA: S2 mill housing construction VAMA (China automotive steel JV) proceeding well Phase 1: capacity to supply 1.5mt for automotive applications in China State-of-the-art pickling tandem CRM, continuous annealing line and HDG Project is proceeding well; first coil now targeted in 2H 14 Restart of some steel investment 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

34 In 2012, we spent $285m on R&D among which a minimum of $39m was invested in the development of products with environmental credentials Automotive: development of Advanced High Strength Steels and other applications S in motion: A catalogue of 60 steel solutions generating up to 20% weight savings, reducing the emissions of CO 2 during the use phase of the vehicle (-6.2gCO 2 /km) Lightweight steel door: In the continuation of S in motion, our ultra-lightweight car door solutions use steels and technology currently available to generate a 27% weight and cost saving without compromising safety and structural requirements Construction: continuous development of solutions for energy savings and lesser environmental impact Histar : Jumbo HISTAR beams improve construction performance by cutting cost, weight and CO 2 Higher-grade Beams: ca. 25% cost and CO 2 savings Nature range of organic coated steel providing innovative chromium-free organic coated steels for the construction industry (15 years R&D partnership with paint suppliers) Magnelis : metallic Zinc coating offering ultimate corrosion resistance in aggressive environments at a lower zinc coating mass than traditional products. Applications in civil engineering, construction, solar, agriculture, etc. Energy: steel is key to renewable energy supply Wind: New steel grades used in wind towers and turbines Solar: Steel is part of every solar photovoltaic application: Components of energy efficient building (roofs, car parks) and components for solar farms Phoster (Photovoltaic steel roof) breakthrough R&D project - prototype early stage. Steel will serve as construction material while producing energy at the same time (semi-conductor coatings applied directly on a steel substrate) with additional environmental benefits compared to glass panel solar modules ArcelorMittal steel provides distinctive live cycle features compared to other materials 33

35 Steel is endlessly recyclable; its CO 2 benefits are proven through life cycle analysis Recyclability is a key parameter for the global CO2 footprint reduction Steel is indefinitely recyclable Steel is being effectively recycled with an estimated collection efficiency of 85% 1 tonne of primary steel is the equivalent of 10 tonnes of steel used* Around 20 billion tonnes of steel is in use worldwide, representing a very large pool of low carbon steel available for the future Dedicated Life cycle Assessment expertise since 2005 Over 40 studies to date: construction, automotive, packaging, general industry, etc. Coexisting steel production routes - electric and blast furnace iron making ArcelorMittal is the World s biggest recycler of steel: 29 million tonnes of steel recycled in 2012, saving 36mt CO 2 1 tonne of steel produced gives 10 tonnes of steel used throughout its successive life cycles* * Assuming a mean recycling rate (RR) at the end of life of 90% and infinite recycling steps 34

36 Key aspects of ArcelorMittal CR strategy supporting ArcelorMittal sustainable growth Our corporate responsibility (CR) strategy aims to achieve Safe, Sustainable Steel and Mining. Our 4 main focus are: investing in our people; making steel more sustainable; enriching our communities and transparent governance. Our CR programmes and reporting respond to the issues of importance to our stakeholders and material for the company. Our most recent online report is available at: H&S is our no.1 priority and we have delivered continuous progress over the past years reaching an LTIF rate of less than 1 in In 2013 we maintained and accentuated our effort on fatalities prevention and contractors management. A strong, transparent and accountable governance structure to support Corporate Responsibility improvement: our board of directors has formal ownership and accountability for corporate responsibility at ArcelorMittal, and plays an active part in overseeing how CR issues are managed, measured, and improved. 20% of senior management bonus dependent on the group s H&S performance. Our code of business conduct is setting our standards of behaviour for all employees, and is covering the way we deal with suppliers, business partners and individuals. It is complemented by our guidelines on anti-corruption and bribery policy and our human rights policy. We are promoting those values as well as our company s other sustainability ones throughout our supply chain following our code for responsible sourcing. CO2 emissions per tonne of steel output in Europe is 50% lower than it was 30 years ago; achieving further reductions is a major challenge. ArcelorMittal s target is an 8% CO2 emission reduction by 2020 compared to 2007, i.e. 170kg of CO2 per tonne of steel. Beyond 2020, the long term solution requires breakthrough technologies and we invest in this research. Energy efficiency improvement will deliver most of the CO2 emission reductions in the medium term and is essential to our productivity. We aim to achieve an overall $200m annual energy saving by 2020 vs. 2007; in Europe our flat products division targets a 10% energy cost reduction by 2016 vs $285m were spent on R&D in 2012 of which a minimum of $39m were invested in products with environmental credentials (automotive, construction, and energy). The CO2 benefits of steel are proven through life cycle analysis. An internal expertise developed since 2005 has enabled to perform to date over 40 product studies. Continuously developing positive relationships with our employees is key to the company s continued success. When restructuring is unavoidable, we focus is on ensuring continuous operation whilst limiting the social impact. ArcelorMittal, achieving Safe Sustainable Steel and Mining 35

37 Contacts Valerie Mella Investor Relations Specialist Europe & Retail T valerie.mella@arcelormittal.com Delphine Bastien Manager SRI and corporate responsibility delphine.bastien@arcelormittal.com