Longbow Basic Materials Conference March 211
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 Annual Report on Form 2-F for the year ended December 31, 21 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. 1
Agenda A brief update Safety Prospects for 211 Focus on Growth Unlocking value for shareholders Supplementary slides: 4Q1 results Liquidity Mining disclosure 2
Safety is our primary focus Annual Lost Time Injury Frequency rate* for mining & steel 2.8 2.4 2. 1.6 1.2.8.4 3.1 2.5 1.9 1.8 Safety is the No.1 priority of ArcelorMittal Since the merger there has been a significant improvement in LTIF rates but we still have a long way to go along our journey to zero In January 211 ArcelorMittal held a Health & Safety summit to instil this core value Our goal is to be the safest Metals & Mining company. 27 28 29 21 ArcelorMittal s Health and Safety performance improved again in 21 * IISI-standard: Fr = Lost Time Injuries per 1.. worked hours; based on own personnel and contractors 3
Financial results EBITDA: Full year EBITDA of $8.5 billion (excl. $.4 billion for Aperam), 52% higher than 29 4Q 21 EBITDA of $1.9 billion, including $.1 billion from sale of CO 2 credits Shipments: Full year shipments of 85. Mt, 22% higher than 29 4Q 21 shipments of 21.1 Mt up 3% vs. 3Q 21 Strong cash flow generation: Cash flow from continuing operations of $3.3 billion in 4Q 21 ($3.8 billion for 21) Full year capex of $3.3 billion, 22% higher than 29 Net Debt reduced: $2.3 billion reduction in net debt to $19.7 billion compared to $22.1 billion at 3Q 21 21 EBITDA 52% higher than 29 Note: Successful spin off of the stainless steel business (Aperam) following shareholders approval on January 25, 211. Accordingly, results of the stainless steel operations in 4Q 21 are shown as discontinued operations. Prior periods results and operational KPIs presented have been recast to reflect the new presentation. 4
Operating environment Global Apparent Steel Consumption (ASC) (million tonnes per month) US and European Apparent Steel Consumption (million tonnes per month) 5 45 4 Developing ex China China Developed 2 18 16 14 EU27 USA 35 12 3 1 25 8 6 2 4 15 2 Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Global ASC +1% in 4Q1 vs. 3Q1 (+14.7% in 21 vs. 9) China ASC +1.6% in 4Q1 vs. 3Q1 (+6.% in 21 vs. 9) EU ASC +3.7% in 4Q1 vs. 3Q1 (+22% in 21 vs. 9) US ASC -5% in 4Q1 vs. 3Q1 (+38% in 21 vs. 9) Global ASC rose ~15% in 21 but momentum slowed in second half 5
Contraction Expansion Demand indicators are positive Regional PMI data (>5 is expansionary) 65 After the temporary slowdown in H2 1, leading indicators in N.America & N.Europe have surprised positively 6 55 Labour market appears to be gradually improving, though unemployment will remain high by historical levels. 5 45 China growth momentum off to a strong start in 211 with industrial production accelerating 13.5% y-o-y for Dec. 4 35 3 Jan-6 Jul-6 China Euro Area USA Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jan-11 China PMI slipped in Feb. but remains above 5 policy tightening likely to impact growth in H2 11 World GDP growth projected to increase 4% (annualised rate) in H1 11 from 3% in H2 1. Leading indicators point to solid economic conditions in 211 6
Contraction Expansion Construction the only drag US ABI and Eurozone construction PMI 65 USA Architecture Billings Index Eurozone Construction PMI 6 55 In Europe: Construction remains anaemic outside of Germany and its linked economies Construction PMI >5 for first time since Feb 8 5 In the US 45 4 Construction has reached a bottom The ABI suggests a healthier nonresidential construction in H2 11 35 Housing should also be higher off a very low base 3 Jan-6 Jul-6 Jan-7 Jul-7 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jan-11 Risks to public funded construction Overall US construction spending should increase in 211 vs. 21 Developed World Construction is the remaining weak spot 7
Global steel consumption growing 14 ASC growth 211: 12 1 - RoW: 6.5-7% +7% 8 6 - NAFTA: +9-1% 6.5-7% - EU27: +5-5.5% 4 2 - China: +7% 6.5-7% 27 28 29 21 211 China EU27 NAFTA ROW We expect global Apparent Steel Consumption growth of +6.5-7% in 211 8
Prices are rising to reflect higher costs Raw material prices (Indexed to Jan 28) Regional HRC prices (US$/t) 14 13 12 11 Iron Ore Coking Coal Scrap 13 12 11 China domestic Shanghai N.America FOB Midwest N.Europe domestic ex-works 1 1 9 9 8 8 7 7 6 5 6 4 5 3 4 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jan-11 Jan-8 Jul-8 Jan-9 Jul-9 Jan-1 Jul-1 Jan-11 Price increases since Nov 21 reflect higher raw spot raw materials costs 9
Jan-1 Feb-1 Mar-1 Apr-1 May-1 Jun-1 Jul-1 Aug-1 Sep-1 Oct-1 Nov-1 Dec-1 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Our costs will likely be higher in the H2 11 We purchase iron ore under contract with a 4 month price lag Due to weighted average costing there is a further lag (or smoothing) to our costs Theoretical illustration of lag Q1 11 Q2 11 2 18 16 14 12 1 8 6 4 2 Iron Ore Spot (CFR China, US$/t) Vale contract reference Wighted Average COGS impact Unless spot prices fall precipitously then Q3 and Q4 costs will likely be higher than Q2 levels There is a lag between spot raw material prices and our costs 1
Current guidance 1Q 11 Production and shipments: Group shipment volumes are expected to increase in from 4Q 21, capacity utilization expected to rise to ~76% (vs. 69% in 4Q 21) 1Q 11 Selling prices: Average steel selling prices are expected to increase from 4Q 21 as they adjust to rapid raw material increases 1Q 11 Margin: EBITDA/tonne expected to increase from 4Q 21 1Q 211 EBITDA expected to be between $2. 2.5 billion Working capital: to increase in 1Q 211 due to increased activity levels Other: cash out to include acquisition of Baffinland Capex: full year capex to be $5.bn, including $1.4bn in mining Net debt to increase in 1Q 211 Note: starting effective 1Q 211 we will begin reporting Mining as a separate segment 1Q11 EBITDA expected to improve with better market conditions despite higher costs 11
Growth focus: our steel footprint Latin-American Asia Venezuela Colombia Monlevade Pakistan China Ecuador Peru Brazil Bolivia Paraguay Juiz de Fora Cariacica Jharkhand 1 Chile Argentina Uruguay Tubarao Vega Du sol 3 Western India JV 4 potential Karnataka 2 Orissa Major steel markets Brazilian long products capacity expansions: 21: Monlevade project from 12 ktpy to 24 ktpy (US$1.2 billion capex) 211*: AM Cariacica from 6 to 8 ktpy (under evaluation) 213*: AM Juiz de Fora from 1 ktpy to 22 ktpy (under evaluation) Brazilian flat products business has excess primary capacity so the rolling mill at Tubarao will be expanded, or a new rolling mill built In India we now plan smaller steps: 1.5-3 Mtpa modules In areas with easier access to land (and proximity to strong consumption Expertise of local partner is invaluable. Uttam Galva stake gives us: Access to downstream network (we are already largest importer of steel into India) Partner in developing service centres for auto/appliances JV partner for potential greenfield in Western India GSTEEL is a low-cost entry in to Thailand and ASEAN Our steel footprint expansion is focused on high-growth markets 12
Growth focus: and our Mining output Existing Plans for Iron Ore Development will take our production to 1Mt by 215 Baffinland is a cornerstone asset for growth beyond 1Mt 12 1 15-4 8 8 12 6 84 4 49 Own production 2 2 Strategic contracts 16 21 Efficiency Brow nfield Improvements** expansion Greenfield Cleveland Cliff expansion contract 215 plan Acquisition of Baffinland demonstrates our commitment to building a world-class mining business 13
Delivering value to shareholders Aperam demerger demerger has been a success Investment community has appreciated Aperam s Brazil growth story, its charcoal integration story, its European restructuring story and the valuation story Dilution management program Its is highly likely that holders of the convertibles due in 214 will exercise their option to convert which will lead to 88.2mn shares being issued In Dec. we bough options to buy shares at the exercise price (effectively hedged) financed through transfer of treasury shares This dilution management has increased the number of shares outstanding by 2.6% but now avoids a 6% increase in 214 i.e. we have saved issuing additional new shares equivalent to 3.4% of existing This dilution management has also removed the volatility in on our P&L (net financial income (expense) line) from the quarterly mark-to-market of the call options. We continue to seek and pursue options to create sustainable value for shareholders 14
Recap The outlook for underlying demand continues to improve we expect ASC growth of 6.5-7% in 211 A recovery in Construction is the key to higher utilisation levels Prices are rising to reflect higher raw material costs; this will support better margins and profitability ArcelorMittal costs will continue to rise due to weighted-average accounting presenting a risk to margins in H2 11 We continue to focus on growing our steel footprint in the highgrowth markets and expanding our mining output We will continue to seek all opportunities to deliver value to our shareholders 211 should be a better year than 21 15
Appendix 16 ArcelorMittal Dofasco, Hamilton Port and Steel works ArcelorMittal Dofasco, Hamilton Port and Steel works
Steel production and shipments ArcelorMittal quarterly crude steel production and steel shipments ( t) 35, 3, Steel production (' t) Steel shipment (' t) 25, 2, 15, 1, 5, 1Q 8 2Q 8 3Q 8 4Q 8 1Q 9 2Q 9 3Q 9 4Q 9 1Q 1 2Q 1 3Q 1 4Q 1 While our steel production declined 3% in 4Q1 v 3Q1, our steel shipments increased by 3% Note: In a steady state environment, finished steel shipments will be lower than crude steel production due to the yield loss between crude steel and finished steel of typically ~1% depending on the product 17
Mining production Annual iron ore production* (Mt) 5 Annual coal production* (Mt) 8. 4 6. 3 2 43.8 37.7 48.9 4. 5.9 7.1 7. 1 2. 28 29 21 Quarterly iron ore production* (Mt). 28 29 21 Quarterly coal production* (Mt) 14 2. 12 1 1.6 8 1.2 6 4 2 1 1.6 12.8 13. 12.6.8.4 1.7 1.6 1.7 1.8 1.8 4Q 29 1Q 21 2Q 21 3Q 21 4Q 21. 4Q 29 1Q 21 2Q 21 3Q 21 4Q 21 Own iron ore production of 48.9 Mt in 21, up 29.9% as compared to 29 * Excluding strategic agreement and long-term supply contracts 18
P&L highlights 4Q1 EBITDA to Net Loss (USD million) Net income/ (loss) (USD billion) Depreciation & impairment 1.1.6 1.7 1.4 1,853 1,456 397 Income from equity +74 Net Interest, FOREX & other -1,2 Income Tax Benefit Discontinued Operations and Noncontrolling interest Earnings/ (loss) per share (USD) -.8 4Q 29 1Q 21 2Q 21 3Q 21 4Q 21-729 -279-279 +45-51 -78.73.42 1.13.89 EBITDA Operating income Pre-tax Income/(Loss) from continuing operations Net loss -.51 4Q 29 1Q 21 2Q 21 3Q 21 4Q 21 Lower EBITDA and impairment charges resulted in a net loss of $.8 billion for 4Q 1 In accordance with IFRS the Company has adjusted the 29 financial information retrospectively for the finalization in 21 of the allocation of purchase price for certain business combinations carried out in 29. The adjustments have been reflected in the Company s consolidated financial statements for the year ended December 31, 29 19
Cash flow highlights 4Q 1 Free cash flow (USD million) Capex (USD million) -424 2,139 Net financials, tax expenses and others -1,379 1,379 773 787 518 623 4Q 29 1Q 21 2Q 21 3Q 21 4Q 21 Change in w orking capital 3,568 Capex Net acquisition spending (USD million) 1,853-85 2,189 499 EBITDA Cash flow from operations Free cash flow 237 127 52 Q4 29 Q1 21 Q2 21 Q3 21 Q4 21 $3.6 billion cash provided from operations in 4Q 1 2
Shipmnts (kt) ASP (US$/t) EBITDA (US$mn) EBITDA/t (US$) Shipmnts (kt) ASP (US$/t) EBITDA (US$mn) EBITDA/t (US$) Segmental highlights 56 54 Shipments ASP 84 82 8 12 1 EBITDA EBITDA/t 25 2 FCA 52 5 48 46 78 76 74 72 7 68 8 6 4 2 15 1 5 44 4Q 29 1Q 21 2Q 21 3Q 21 4Q 21 66 4Q 29 1Q 21 2Q 21 3Q 21 4Q 21 Shipments higher 9.1% Average Selling Price (ASP) down 6.9% Costs higher in Latam Ebitda down 29.8% 78 Shipments ASP 95 8 EBITDA EBITDA/t 12 FCE 75 72 69 66 63 6 9 85 8 75 7 7 6 5 4 3 2 1 1 8 6 4 2 57 4Q 29 1Q 21 2Q 21 3Q 21 4Q 21 65 4Q 29 1Q 21 2Q 21 3Q 21 4Q 21 Shipments marginally higher 1.1% ASP higher 6.1% Note: Percentage comparison provided for 4Q 21 versus 3Q 21 Costs higher EBITDA up 18.3%; 4Q1 incl. $14M CO2 gain 21
Shipmnts (kt) ASP (US$/t) EBITDA (US$mn) EBITDA/t (US$) Shipmnts (kt) ASP (US$/t) EBITDA (US$mn) EBITDA/t (US$) Segmental highlights LONG 62 6 58 56 54 52 5 48 Shipments ASP 4Q 29 1Q 21 2Q 21 3Q 21 4Q 21 86 84 82 8 78 76 74 72 7 68 66 8 7 6 5 4 3 2 1 EBITDA EBITDA/t 4Q 29 1Q 21 2Q 21 3Q 21 4Q 21 14 12 1 8 6 4 2 Shipments marginally lower 1.3% ASP stable Costs higher in Latam Ebitda down 45.8% AACIS 35 34 33 32 31 3 29 Shipments ASP 4Q 29 1Q 21 2Q 21 3Q 21 4Q 21 64 62 6 58 56 54 52 5 6 5 4 3 2 1 EBITDA EBITDA/t 4Q 29 1Q 21 2Q 21 3Q 21 4Q 21 16 14 12 1 8 6 4 2 Shipments higher 4%; improving CIS market ASP down 1.4%; weak S.African domestic market Domestic market in South Africa weak EBITDA down 21.9% vs. 3Q 1 Note: Percentage comparison provided for 4Q 21 versus 3Q 21 22
Our balance sheet is a strong platform Net Debt (USD billion) & Net Debt/Average EBITDA** Ratio (x) 35 3 25 2 15 1 5 1Q 7 2Q 7 3Q 7 Net Debt (USDbn) - LHS 4Q 7 1Q 8 2Q 8 3Q 8 4Q 8 1Q 9 2Q 9 ` 3Q 9 4Q 9 1Q 1 2Q 1 3Q 1 4Q 1 1.4x Net Debt / Average EBITDA - RHS 2.x 1.5x 1.x.5x.x Since the crisis, over $16bn of debt has been refinanced in the capital markets ArcelorMittal has diversified away from a reliance on bank debt towards the bond market Recent $3bn issue in February was a tremendous success Our debt maturity now averages 5.6 years vs. 2.1 pre-crisis following the recent bond We will protect the strength of the balance sheet and do not expect to significantly increase leverage Capital allocation is now key. We will only spend what we generate Investment grade rating is a strategic asset and will be protected 23
Liquidity and debt maturity profile Debt structure December 31, 21 Debt maturities (US$ billion) 1 8.5 17.6 8 6.7 Unused credit lines 11.3 6 4 2 1.3 4. 3.5 2. Cash & equivalent 6.7 2.2 Commercial paper 6.3 1.3 Other debt due in 211 3.2 Term loan Liquidity Debt due in 211 211 212 213 214 215 > 215 Bonds Term Loans Convertibles Other Commercial Paper Approximately $13.1 billion of successful capital markets refinancing in 29 Successful extension of the maturity profile from 2.6 years at end Q3 28 to 5.1 years at the end of 21 Continued emphasis on strong liquidity position and lengthening of debt maturities 24
Mining disclosure - Effective from 1Q11 Basic objective of the mining as a separate segmentation: Create world class mining operations for AM Price externally marketable Iron Ore and Coal to steel units at market price Ensure appropriate capital allocation for mining business for long term sustainability and growth Focus on mine safety, mine planning, MRMR, quality, expansion, capex and logistics Ensuring world class project control and management systems Basic Principles that will be applied for mining as a separate segmentation: Iron Ore: Iron ore not considered currently marketable due to quality and/or logistic constraints will continue to be transferred at cost (Andrade, Kazakhstan, Bosnia, Algeria, Ukraine Opencast & Underground, Hibbing and Minorca). Simultaneously work on addressing the issues of logistic, quality and market for these mines. Marketable ores from other mines to be priced with reference to market prices. Coal: Kuzbass and Princeton coal to be priced with reference to the relevant market price. Kazakhstan coal Shippable volume to be priced with reference to market price. Starting effective 1Q 211 we will begin reporting Mining as a separate segment 25