ArcelorMittal North America and AM/NS Calvert Robrecht Himpe, Chief Executive Officer March 6-7, 2017
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Safety performance AM/NS Calvert vs. industry average (TRIR*) 6.2 5.2 5.2 5.1 5.1 2.44 1.53 0.74 0.94 0.47 2012 2013 2014 2015 2016 BLS Average AM/NS Calvert Linear (AM/NS Calvert) Safety performance significantly better than industry average * Total reportable injury rate. BLS (U.S. Bureau of Labor Statistics) Industry Average 2
Joint venture partnership #1 world leader in steel production with presence in 60 countries Approximately 210,000 employees 28 operations in U.S., including I/N Tek & I/N Kote Market leader in all major global steel segments Globally recognized for leading R&D and technology and outstanding distribution networks #2 world leader in steel production Approximately 84,000 employees in 15 countries 5 operations in the U.S., including I/N Tek & I/N Kote Market leader in automotive, energy, civil engineering, construction and rail Respected leader in steel technology with focus on product development and process innovation ArcelorMittal and NSSMC have a long-standing relationship 3
AM/NS Calvert World s most advanced steel finishing facility Largest newly built facility in the U.S. in 40 years Acquisition price* of $1,550m in 2014 (50:50 JV with NSSMC) $200m in completed or planned strategic investments 5.3Mt production capacity 1,600 team members (includes technical experts from both parent companies) Capabilities and geographic location position the facility well for meeting needs in auto and energy Strengthens existing auto steel franchise and ability to supply energy market * On February 26, 2014, the Company together with Nippon Steel & Sumitomo Metal Corporation ( NSSMC ) completed the acquisition of ThyssenKrupp Steel USA, a steel processing plant in Calvert, Alabama, USA, for a total consideration of $1,550m financed through a combination of debt at the joint venture level and equity, of which $258m was paid by ArcelorMittal. 4
Efficient production flow Learning Center Shipping Finishing HDGL 2 & 4 CPL Coil Storage Hot Strip Mill Slab Yard HDGL 1 & 3 PLTCM River Terminal A 2,500 acre whiteboard design allows for optimal product flow and room to expand 5
Production capacity AM/NS Calvert is now integrated with ramp up to full production and target market position is on track Hot Strip 5.3Mt Ramp up proceeding SAP fully integrated in all business processes ISO/TS 16949: 2009 Certified ISO 14001: 2015 Certified ISO/IEC 17025: 2005 Accredited Pickling & Cold Rolling CPL: 1.1Mt PLTCM: 2.5Mt Technology partnership with NSSMC Finishing Line #1: 0.5Mt (HDG) Line #2: 0.6Mt (CAL) Line #3: 0.5Mt (HDG) Line #4: 0.5Mt (HDG) Continuous hot-dip galvanising line 5.3Mt production capacity 6
Slab supply - Brazil ArcelorMittal Tubarão Vitoria, Brazil Companhia Siderúrgica do Atlantico (CSA) Sepetiba, Brazil 66 km south of Rio de Janeiro Joint venture ThyssenKrupp and Vale 7
Slab supply - North America ArcelorMittal Indiana Harbor, Indiana ArcelorMittal Lázaro Cárdenas, Mexico 8
Alabama State Port Authority AM/NS Calvert dedicated port terminal: $100m+ investment by the State 10
Since the acquisition Addressed activities identified during due diligence process Expansion of slab yard to improve throughput of the hot mill Business process upgrades Implemented strategy to grow in targeted markets of automotive and energy Investments/upgrades based on ArcelorMittal and NSSMC technologies to serve key markets Leveraged value of ArcelorMittal s existing commercial presence to ensure one face to the customer Increased capacity utilization in all areas Process improvements to maximize AM/NS Calvert s potential 10
Location advantage Non Auto Auto Calvert AM/NS strategically located near steel customers in target markets 11
AM USA Footprint - Indiana Harbor Indiana Harbor footprint optimization project : Current configuration uncompetitive structural changes required across all cost elements 84 hot strip mill (HSM), #1 aluminized line, and #5 continuous galvanizing line (CGL) idled; steel shop No.2 to be idled in 2017 Planned investments totalling ~$200m: New caster at No.3 steel shop installed and commissioned in 4Q 16 Restoration of 80 hot strip mill, IH finishing, and logistics Project completion expected in 2018 No. 3SP: New #2 Caster Indiana Harbor Plant 80 HSM: # 5 Walking Beam Furnace reline No. 3SP: New Downcomer No. 3SP: New #2 Caster ArcelorMittal USA progressing with the footprint optimization project at Indiana Harbor 12
Action 2020 - Calvert Current product mix Target product mix 4% 13% 30% Service centre 9% 6% 3% 16% 21% Energy Automotive Stainless tolling 18% 10% Other tolling Other markets 22% 48% Growth in automotive and energy products 13
Action 2020 ongoing progress AM/NS Calvert ramp up and increase in automotive volumes is an integral part of Action 2020 Capacity utilization was nearly 80% in 2016 vs 68% in 2015 Anticipated capacity utilization in 2017 of ~90% Automotive volumes ramped by more than 50% in 2016 vs 2015 and are expected to be 50% higher in 2017 vs 2016 Approved on 284 of 383 automotive qualification packages; nearly 100 more new qualifications targeted by the end of 2018 By 2020, we expect to be qualified on all known specifications required to supply the automotive market Path to achieve targeted growth in automotive 14
Automotive customers 15
Investment projects
Investment projects - slab yard Slab yard expansion to increase Calvert s slab staging capacity and efficiency (capex $40m) To expand the HSM slab yard bays 4 & 5 with overhead cranes and roller table to feed the HSM production up to 5.3mt/year of coils The HSM initially consisted of 3 bays with 335kt capacity for incoming slabs (less than the staging capacity required to achieve 5.3mt target Phase 1 completed 1Q 2016: Slab yard expansion of Bay 4 and minor installations for Bay 5 Increase coil production up to 4.6mt/pa Phase 2: Slab yard expansion Bay 5 to increase coil production from 4.6mt/pa to 5.3mt/pa Completion expected in 1Q 2017 Investment in AM/NS Calvert to further enhance automotive capabilities 17
Investment projects automotive market #1 Line: Hot Dip Galvanizing Line: Exposed Completed in 2Q 2016 Targeted products include exposed GA and exposed GI for automotive #2 Line: Continuous Annealing Line: Q&P Commissioning 1Q 2017 Targeted products include Generation 3 AHSS (Fortiform ) Cold rolled for automotive #3 Line: Hot Dip Galvanizing Line: Q&P Commissioning 1Q 2017 Targeted products include Generation 3 AHSS (Fortiform ) GA and GI for automotive Batch Anneal Phase 1 & Post Weld Treat Equipment to Support Line 2 & 3 Investments #4 Continuous Coating Line: Aluminized Completed in 1Q 2015 Increases ArcelorMittal s North American capacity to produce press hardenable steels one of the strongest steels used in automotive applications, Usibor, a type one aluminum-silicon coated (Al Si) high strength steel Currently developing capability to produce Ductibor, an energy-absorbing high strength steel grade designed specifically to complement Usibor and offer ductility benefits to customers Investments to produce the most advanced high strength steels for automotive 18
Investment projects energy market Slab handling equipment and HSM improvements Completed in 2Q 2016 Increased max weight capability to 40Mt to meet market demands Investments to meet needs of the energy market 19
Takeaways AM/NS Calvert is a state of the art, strategic finishing facility that sets a new reference and positions us well to supply the NAFTA automotive and energy markets Geographic proximity to target markets allows for efficient delivery by vessel, rail or truck Diversity in slab sources secures slab supply and allows for the widest array of product offerings for our target markets Investments made since acquisition equip Calvert to leverage our parent company strengths in supplying leading products to our strategic target markets Higher utilization rates and increase in automotive volumes to support Action 2020 AM/NS Calvert ramp up and growth in HAV products important to Group s Action 2020 objectives 20
Q&A