Global Metals, Mining & Steel Conference 2015
Agenda Leadership Europe Strategic progress Outlook 1
Steel industry s differentiating factors Local markets structure counts key regional markets have consolidated Steel is not a homogenous commodity but a vast range of products with varying degrees of technicality Steel consumers value (and reward) service, quality and innovation Zero incentive to build new capacity value of installed capacity will increase with demand China exports peaked? negative for iron ore but positive for non- Chinese steel producers Has sentiment bottomed? a free option on improvement Steel presents a differentiated opportunity to pure commodity metals 2
ArcelorMittal is the industry leader Safety is the No1 priority Steel is the primary driver of profitability Steel shipments 2014 Supported by a sustainable iron ore business Developed markets are core Rest of World Capacity to capitalise on demand recovery Optimized asset base in Europe with developing plans for the US Europe & NAFTA Primary position in global automotive Balance sheet repositioned ArcelorMittal positioned to benefit from demand recovery and own actions 3
Leader in steel for automotive ArcelorMittal is the leading global steel solution provider to the global automotive industry Unrivalled reputation for quality and innovation Steel set to remain material of choice for automotive Continued investment in R&D producing award winning Automotive solutions Focused investment to capture growth opportunities: Calvert acquisition a break-through for NAFTA automotive franchise JV VAMA in China Dofasco S-In-Motion for Pickup Trucks: Launched 2014 2015 Kia Carnival 76% advanced high strength steel The leading provider of steel solutions to the global automotive sector 4
Footprint optimization delivering results European footprint optimization launched in 2011 Principal was to maintain market share whilst orientating capacity to most competitive sites Focus on core assets to ensure lowest cost footprint achieved Savings through fixed cost removal with well loaded assets with stable working points Lower variable cost Lower and more stable working capital requirements Better service and quality Reduce capex requirements >$1bn savings achieved through European footprint optimization Similar plans under development for US asset base European asset optimization yielded $1 billion cost savings 5
Demand has improved EU28 Apparent steel consumption (Mt) 150 148 +6% 146 144 142 0 2013 2014 2015F Steel demand in Europe is recovering but remains well below pre-crisis levels 6
Spreads have improved Spread between North Europe domestic HRC price and international RM Basket*, /t 178 +24% 208 220 2013 2014 1Q15 Steel prices have increased relative to underlying raw materials * RM Basket in HRC = 1.6 X IO (delivered to China)+ 0.6 X HCC (delivered to China)+ 0.15 X Scrap ( HMS 1/2 80:20 / East Asia import) Source: Platts, SBB, ArcelorMittal Corporate Strategy team analysis 7
Profitability has improved ArcelorMittal Europe segment EBITDA ($mn) +42% 2,304 535 +15% 616 1,621 420 2013 2014 1Q 13 1Q 14 1Q 15 Improving spreads are translating in to improving profitability 8
Sustainable iron ore business Centred around Mines Canada a tier one operation AMMC iron ore production (MMt) AMMC concentrate cost index +72% -38% 15 18 23 26 30 2012 2013 2014 2015F Stretch target 2013 2014 2015F ArcelorMittal Mining business to remain FCF positive at <50$/t iron ore 9
Improved cash conversion Capex down $1.7bn Net interest down $0.5bn Capex expense (US$bn) Net interest expense (US$bn) 4.7-36% 1.9 1.8-25% 3.5 3.7 3.0 1.5 1.4 2012 2013 2014 2015F 2012 2013 2014 2015F Cash breakeven level transformed FCF can improve rapidly with EBITDA 10
Balance sheet repositioned Net debt (US$bn) 23.6 18.0-6.9 18.5 16.6 15.0 $2.8bn cash on hand at end Q1 plus additional Eur400m and Eur500m bond issued in April $6bn of committed undrawn liquidity lines $2.5bn due April 2018 $3.5bn due April 2020 1Q 12 1Q 13 1Q 14 1Q 15 Medium term target Significantly reduced net debt and strong liquidity 11
Core market recovery to continue EU28 Medium term ASC forecast USA Medium term ASC forecast 160 April 2015 forecast 116 April 2015 forecast April 2013 forecast April 2013 forecast 155 112 150 108 145 104 100 140 0 2012 2013 2014 2015 2016 2017 2018 0 2012 2013 2014 2015 2016 2017 2018 Capacity to capture share of continued demand recovery in core markets 12
Takeaways ArcelorMittal is the leader in the differentiated steel industry ArcelorMittal is the leader in steel for automotive and will continue to invest to capture the opportunities The learning's of footprint optimisation in Europe will be applied to the US asset base The demand recovery in Europe is driving improved steel spreads and profitability Clear progress has been achieved on mining costs, cash conversion and repositioning the balance sheet Positive outlook for core developed markets 13
Q&A
New ArcelorMittal IR app and contacts Daniel Fairclough Global Head Investor Relations daniel.fairclough@arcelormittal.com +44 207 543 1105 Hetal Patel UK/European Investor Relations hetal.patel@arcelormittal.com +44 207 543 1128 Valérie Mella European/Retail Investor Relations valerie.mella@arcelormittal.com +44 207 543 1156 Maureen Baker Fixed Income/Debt Investor Relations maureen.baker@arcelormittal.com +33 1 71 92 10 26 Lisa Fortuna US Investor Relations lisa.fortuna@arcelormittal.com +312 899 3985 We have released a new ArcelorMittal investor relations app. You should be able to download the app from itunes or on an android device (link below). Here're the 2 links to download the product: Android: https://play.google.com/store/apps/details?id=com.arcelormittal.ir ios: https://itunes.apple.com/in/app/arcelormittal-ir-app/id988354136?mt=8