ArcelorMittal Flat Europe Europe s leading steel franchise

Transcription

1 ArcelorMittal Flat Europe Europe s leading steel franchise - Geert van Poelvoorde, CEO ArcelorMittal Europe Flat Products Jet Vapor Deposition (JVD) line in Liège (Belgium) Investor Visit Ghent, 3-4 July 2017

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 latest Annual Report on Form 20-F on file 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 Safety is our priority Health & Safety Lost time injury frequency (LTIF) rate* ArcelorMittal Europe Own employees and contractors % Our goal is to be the safest Metals & Mining company * LTIF = Lost time injury frequency defined as Lost Time Injuries per worked hours; based on own personnel and contractors; 2011 and 2012 presented on a comparable basis 2

4 Improvement ArcelorMittal Flat Europe ArcelorMittal Europe Flat geographical footprint (BFs *) Asturias Dunkirk Bremen Ghent Fos Eisenhuttenstad Dabrowa Krakow Ostrava Galati Europe steel shipments by product 2016 Other HR Bars 13% 24% 6% WR 9% 9% CR 8% Sections 3% Semis 29% Coated Europe HRC, CR and Coated shipments (Mt) EUROPE Facilities Primary Flat (BFs), including Ostrava The map shows primary BF Facilities in Flat Europe including 2 BF in Ostrava but excluding 2 BF at Florange and 2 EAFs at Spain (Sestao). HRC CR Coated Others 28 70% of total Europe shipments We are close to our customers Europe wide (*) Excludes 2BF s in Florange. 3

5 Demand recovery continues Encouraging: End market growth prospects in EU28 (2007=100) Sustained progress in Safety Construction Machinery Auto Good real demand in Europe with encouraging economic outlook (Apr 17 EU PMI 56.1) Challenges: High volatility on raw materials and price/spread on international markets China steel overcapacity and supply-demand balance Progress in restoring a level playing field for the European steel industry Auto: light vehicle production in units rebased to 2007 = 100 Machinery and Construction: industrial output series rebased to 2007 = 100 European demand recovery is anticipated to continue 4

6 Optimized footprint driving productivity gains Following Asset optimization Highest possible production with lowest number of installations Improved balance of supply, allows us to run all of our facilities on a consistent basis which maximises efficiency drives excellent fixed cost performance Well loaded assets with stable working points (lower variable cost, better service and quality, reduced capex) ArcelorMittal Europe Flat ArcelorMittal Europe Flat productivity rate Number BFs operating Hot-rolled coil equivalent production (t) / full-time employee (#) Crude steel production (MT) -25% % % Q17 Annualized Asset Optimization has re-established ArcelorMittal's competitive position in Europe 5

7 Maintenance excellence delivering improved reliability Implementation of a converged and simplified SAP back office landscape ( Agile and Converged Europe project) to support all maintenance related activities 65 ArcelorMittal Europe Flat composite reliability indicator (CRI) (working ratio %) Integration of common purchasing organization and IT tools, which covers all maintenance related contracts and spare parts 60 Deployment of a structured business system (asset reliability and maintenance program), providing an exhaustive description of how maintenance activities need to be carried out, to improve and align local maintenance organizations 55 Digitalization to further enhance reliability (e.g. early detection of failure; predictive maintenance training etc) Q 17 Reliability improvements providing good support to transformation program 6

8 Continuous shift towards higher added value Shipment increase inline with demand recovery; increasing finishing and value added products Improved product capabilities and competitiveness ArcelorMittal Europe Flat steel Shipments (Mt) +9% 29.5 ArcelorMittal Europe Flat Coated products* evolution (Mt) +22% Q 17 Annualized Q 17 Annualized * includes HDG; EG and Organic Coated Improved product capabilities and further development of AHSS/UHSS 7

9 Our R&D delivering cutting edge solutions Partnership with the R&D teams and steelmaking operations 3 rd Gen steels commercially available to European OEMS Emerging grades to meet ever changing customer needs New Automotive grades: Fortiform 1050 Steel most sustainable, versatile affordable material carmakers can use to produce safer, lighter vehicles. Fortiform is the 3rd gen AHSS for cold stamping developed to complement Usibor & Ductibor offer for hot stamping Increasing HAV: Magnelis - now produced in Asturias Magnelis is an exceptional metallic coating which provides a breakthrough in corrosion protection 3x better than galvanized steel (based on outdoor tests) Self-healing effect ensures excellent edge protection Audi A8 moving back to Steel Investing to improve the quality and range of products to ensure we remain #1 supplier 8

10 Backed by continuous investments Recent key investments in ArcelorMittal Europe Flat Belgium: program to enable production of 3rd Generation AHSS, Fortiform, and installation of the JVD new coating line at the Kessales continuous annealing line (Liège). Total investment amount: 185m and 63m, respectively Jet Vapor Deposition (JVD) line in Liège (Belgium) Poland investments in Krakow (blast furnace, BOF, capacity extension in hot rolling and hot dip galvanizing). Total investment amount: 130m Spain refurbishment of ArcelorMittal Asturias coke plant in Gijón. Total investment amount: over 100m HDG2 Krakow *Total group capex less mining capex Well invested assets; operational investments to drive further contribution 9

11 ArcelorMittal All rights reserved for all countries Cannot be disclosed, used, or reproduced without prior written specific authorization by ArcelorMittal CONFIDENTIAL - Privileged Information - ArcelorMittal proprietary information JVD a breakthrough technology Jet Vapor Deposition (JVD) production line in Belgium JVD technology coats moving strips of steel in a vacuum chamber, by vaporizing zinc onto the steel at high speed prevents corrosion and improves durability Multiple advantages including: A lower environmental footprint Ensures exceptionally uniform coating Enhances surface quality and makes welding easier for the customer Guarantees excellent adhesion of the coating, regardless of the steel grade, even for new UHSS steels currently under development Highly flexible process with ability to produce different coating thicknesses and coat a variety of substrates JVD process is unique and is the result of a breakthrough scientific development 10

12 New ILVA a tier 1 steel asset ILVA is the perfect opportunity for ArcelorMittal Italy is the 2nd largest steel consuming country in Europe (Mt) Large scale, underperforming asset requiring turnaround Significant cost improvement potential and synergies identified Opportunity to leverage AM strengths in R&D and product leadership and service Ilva will be re-established as a tier one supplier to European & Italian customers Minimal balance sheet impacts, EBITDA accretive in Year 1 Next step is regulatory approvals Completion is anticipated by year end 2017 Novi Ligure: Cold rolling and hot dip galvanising capacities to serve end-users customers (e.g. white goods) Genova: Cold rolling, hot dip galvanising and tin plate capacities 97Mt Total European Flat Steel demand in 2015 Taranto Taranto: Integrated plant for production and sale of HRC, plates, pipes and tubes ILVA is a strong fit within ArcelorMittal s existing business & strategy SOURCE: World Steel, Steel Statistical Yearbook 2015; Notes: *Iberia defined as Spain + Portugal 11

13 Europe Transformation program - Key to Action 2020 Following success completion of asset optimization, Action 2020 plan launched in 2016 Europe launched the Transformation program to sustainably improve results Axis 1 Optimization of the business division, the cluster leading plants and satellite plants Achieving Excellence Axis 2 Transformation of procurement Axis 3 Development of commercial digitalization Axis 4 Finance optimization 12

14 Pioneering application of digital technology New leadership responsibilities for digitalization and industry 4.0 The most digitalized business areas are procurement, supply chain and commercial Dynamic pricing: moving to effective pricing taking into account different parameters (e.g. bottlenecks, loads, delivery times, etc.) Steeluser: web platform for 24/7 status updates on orders, production / delivery Steel Advisor app: allows steel customers to quickly identify recommended best-inclass products for each application (building & construction, appliances, electric machines, energy, industrial eqt, infrastructure, shipbuilding or yellow & green goods. Track and Trace app: (Gent develop) provide customers with real-time information on their purchases an important service differentiator The smart factory: major opportunities Using drones for inspections, to using virtual reality to train blast furnace engineers Digitalization has the potential to take us to the next level in transformation of our business 13

15 Key takeaways A unique business with a portfolio of cost-competitive, well invested assets Maintenance excellence and optimized asset base delivering improved productivity & reliability Leveraging R&D strength to evolve portfolio towards higher added value products to service more demanding customers ILVA has the potential to be a tier-1 asset and its turnaround represents a unique opportunity to create value for shareholders Transformation plan (and AOP before it) is driving outperformance vs. the peer group The pioneering application of digital technology to drive the next stage of outperformance Comprehensive plans in place to drive continued relative outperformance 14

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17 ArcelorMittal IR app and contacts Daniel Fairclough Global Head Investor Relations Hetal Patel UK/European Investor Relations Valérie Mella European/Retail Investor Relations Maureen Baker Fixed Income/Debt Investor Relations Lisa Fortuna US Investor Relations lisa.fortuna@arcelormittal.com We have released an ArcelorMittal investor relations app available for download on IOS or android devices 16