Macquarie Global Iron Ore Conference Strategic progress Mining exploiting our potential Bill Scotting, CEO Mining 27 June 2014
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 forwardlooking 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, 2013 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 http://www.arcelormittal.com/corp/investors/presentations/. 1
Continued improvement in safety Health & Safety Lost time injury frequency (LTIF) rate* Mining & steel, employees and contractors 3.1 2.5 1.9 1.8 1.4 1.0 0.85 0.85 2007 2008 2009 2010 2011 2012 2013 1Q 14 Our goal is to be the safest Metals & Mining company * LTIF = Lost time injury frequency defined as Lost Time Injuries per 1.000.000 worked hours; based on own personnel and contractors 2
Global scale, regional leadership NAFTA Brazil* Europe Mining ACIS Revenues ($bn) 19.6 10.1 40.5 5.8 8.4 % Group** 25% 13% 51% 7% 11% EBITDA ($bn) 1.4 1.9 1.6 2.0 0.3 % Group** 20% 28% 23% 29% 4% Shipments (M mt) 22.5 9.8 38.3 59.6*** 12.4 % Group 27% 12% 46% 15% 232,000 employees serving customers in over 170 countries Global scale delivering synergies The presentation in this slide reflects the reporting segments that the Company intends to adopt as from its first quarter 2014 results. The change in segments results from the Company s organizational and management restructuring announced in December 2013. * Brazil includes neighboring countries ** Figures for others and eliminations are not shown; 3
Non-Franchise Franchise Focussed capital allocation We are backing our franchise businesses with capital Steel shipment split: Capital priority Other steel Approximate EBITDA split: Franchise steel 55% of steel shipments from businesses identified as Franchise e.g. Global Autos, Brazil long, Sheet Piles Invest to protect and expand Other steel Mining Franchise businesses contribute 80% of steel EBITDA Focus on cost cutting and optimization Franchise steel Franchise businesses are receiving the required capital to protect and expand 4
A World-Class Iron Ore Business Target 84MTcapacity in 2015 Solid performance and targets 2013 EBITDA of $2.0bn; ~29% of group Iron ore marketable shipments of 35.1MT in 2013; target of 15% growth in 2014 Targeting 84Mt iron ore capacity by 2015 with key expansions in Liberia and Canada Iron ore stretch target identified to grow by further 11Mt to 95Mt Mining strengths Iron ore production/ capacity* (Million Mt) 95 Production Capacity 84 70 58 54 56 49 Strong leadership team Significant reserve and resource base with tier 1 bias Scalable infrastructure Competitive position in terms of cost and product quality World class project control and management Knowledge from operating in diverse political & geographical environments 2010 2011 2012 2013 2014F 2015F Stretch Focus on value and growth * Capacity for Baffinland, ArcelorMittal Mines Canada, Algeria and Liberia on 100% basis 5
Liberia growing to 15Mt with further stretch potential Liberia iron ore capacity forecast (MMt) 20 2014 DSO Phase 2 Sinter feed DSO (Stretch) 5 15 5 15 2014 DSO Revised phase 2 project: Product analysis and additional mine planning have identified potential to supply 15Mtpa high quality sinter feed at significantly lower cost than concentrate for first 8-10yrs Investment capex estimate of circa $1.7 billion Stretch opportunity: Phase 2 - Sinter feed Better definition of ore body and mine plan confirmed potential to continue DSO phase for additional 6 years Expansion to 20Mtpa capacity* Stretch Incremental investments enable benefits of scale on rail, port and SGA Stretching existing assets with limited capex to maximize potential value 6 * subject to final approvals
AMMC expanded to 24Mt with potential to stretch to 30Mt AM Mines Canada Iron ore production/ capacity (MMt) Production Completed expansion Potential further debottleneck Incremental debottlenecking Concentrator and spirals expansion complete 15 1 8 24 Potential 6MT expansion - low capex intensity 30 2012 2014F Stretch potential Daily records show potential in system First sustain 24Mt and chase the shifting bottleneck to maximize system potential Incremental investments for debottlenecking as required: Mt Wright mine optimization, Fire Lake expansion (richer ore) and crusher debottlenecking Rail winter reclaim capability, long train capability, additional sidings Additional conveyor capacity at port Significant cost benefits from scale Potential to expand beyond 30Mt at low capital intensity Stretching existing assets with limited capex to maximize potential value 7
Baffinland Early Revenue Phase Targeting 3.5Mt production rate by 2H 2015 Proposed Early Revenue Phase rationale ERP commenced in 1Q 13 (budget ~$730m)* Enables an early mining phase that requires less capital investment than full project, creating training, employment, business opportunities for local region ERP to demonstrate product quality/ ability to operate High grade: 66%+ Fe iron direct shipping pellet and fine ore (no processing or pelletization required); products expected to achieve full premium value ERP components Trucking of ore to Milne Inlet, loading of ore in Milne Inlet, and shipping of ore from Milne Inlet to markets Upgrades of road connecting Milne Inlet and mine site Mining and trucking of 3.5Mtpa from Deposit 1 to Milne Inlet throughout the year Open water season shipping of ore from Milne Inlet First ore to be shipped in 2H 15 product tonnage targeted for Europe ERP on track for first shipments in 2H 15 during open water season * Includes consideration from JV partner (Nunavut Iron Ore) for additional equity stake increase from 30% to 50%. 8
US$ FOB Cost per ton Relentless focus on cost reduction delivering real savings Illustrative cash cost curve (marketable tonnes) post expansion Post capex FOB cash cost Positioning key assets low on the cost curve Cost per ton 2012-2014F (Base 100=2012) AMMC Concentrate -20% 2012 2013 2014F Focus on quality Focus on value and OEE initiatives Liberia DSO -17% 1st 2nd 3rd 4th ArcelorMittal Liberia AMMC Relentless focus on cost control Quartile Operational excellence, rigour and discipline underway across assets Share and apply best practice leveraging internal and external benchmarks Key focal points: Labour productivity; Maintenance and reliability; Mining plan optimization Kazakhstan Coal 2012 2012 2013-16% 2013 2014F 2014F Relentless focus on costs 9
Marketing/commercial strategy targets future volumes, customer needs and products Global sales reach* Commercial strategy Domestic AMMC Belo Horizonte, Brazil Luxembourg ArcelorMittal Liberia Kazakhstan coal and iron ore Shanghai, China Sales office Developing the right products and mix by planning changes to ore and coal grades to ensure long run demand Developing the right customers through strategic trials, logistics requirements, and potential blend optimisation Sth Korea Japan Taiwan Current/proposed material flow Average grade in international market is changing: Fe down, and level of gangue up Higher grade sinter fines in demand Opportunity in Liberia to launch sinter feed sized product early and before concentrate benefit ArcelorMittal Europe Bundling Liberia DSO + sinter fines for higher value/offtake bundling options with other AM iron ores Competitive supply of low gangue concentrate to China/Asia expected to fit well with expected trend of higher gangue ore supply from Australia and reduced domestic China supply Achieving the right price (value in use) for our products: Grow product streams with lower risk brownfield expansions in growth markets: Leveraging steel group R&D knowledge; New blends of product have opened new markets; Targeted product specifications E.g AM Kazakhstan high quality coking coal now developing new growth markets in West China via rail Optimizing logistics to market for margin expansion: Liberia (trans-shipment); AMMC (potential for larger cape size vessels) Targeted niche marketing and commercial strategy * Focus on AMMC and ArcelorMittal Liberia as our largest marketable tonnes assets 10
Q4 13 Asset Optimization Steel investments Impact of incremental volumes (assuming 95Mt steel shipments) Impact from normalization of iron ore prices Impact of management gains program Impact of ACIS turnaround Impact of Industry profitability at higher utilization rates TARGET Roadmap to normalized profiability If our markets expand by ~15% (i.e. global shipments back to >95mt) then we believe $150/t EBITDA is achievable Expanding iron ore capacity to 84Mt (Plan) and 95Mt (Stretch) is a key component of AM plan to achieve normalised EBITDA $150/t 15 $138/t $150/t 6 22 Stretch 9 $91/t 3 4 Plan 13 Significant portion of EBITDA recovery plan is controllable 11
Recap GROUP Consistent improvement in health and safety Profitability improving and Balance sheet repositioned Continued focus on cost optimization Franchise development with further investments in steel and mining Mining We are exploiting our potential: Trending toward World Class Safety outcomes Assessing and optimizing our global asset base Plan and stretch targets to grow iron ore mining production to 95MT Developing a niche marketing strategy that guides our product and mine development Delivering year-on-year cost reductions in key assets GROUP Roadmap to normalized profitability $150/t EBITDA ArcelorMittal is focussing on value and growth 12
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 Thomas A McCue US Investor Relations thomas.mccue@arcelormittal.com +312-899-3927 Lisa Fortuna US Investor Relations lisa.fortuna@arcelormittal.com +312-899-3985 Valérie Mella European and 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 13