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Arcelormittal presentation investors_roadshow Presentation Transcript

  • 1. Q411 and FY 2011Post Results RoadshowInvestor Relations February 2012
  • 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 Annual Report on Form 20-F for the year ended December 31, 2010 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
  • 3. Agenda• Core strengths, performance and guidance• Market update• Q4 financials• Balance sheet• Segment performance• Appendix2
  • 4. Core strengths Quality core assets Leader in auto Steel Consistent World-class Mining Sustainable Strategy Returns Cost Improvement Stronger Balance Sheet ArcelorMittal in a strong position to respond to evolving markets 3
  • 5. Safety performance Annual Health & Safety frequency rate* for mining & steel Key corporate social responsibility highlights: 3.2 2.8 • ArcelorMittal was recently named in global 2.4 human resource firm Aon Hewitt’s list of Top 2.0 Companies for Leaders. ArcelorMittal was ranked in the top seven companies in Europe. 1.6 3.1 1.2 2.5 1.9 1.8 0.8 1.4 • On December 2, 2011 ArcelorMittal 0.4 1.0 celebrated its 4th annual International Volunteer Work Day. Within this event, thousands of 0.0 ArcelorMittal employees volunteer in one of the 2007 2008 2009 2010 2011 2013 different activities that are carried out in its units Quarterly Health & Safety frequency rate* for mining & steel to improve the lives of the people in the community. 1.6 1.2 • On October 13, 2011 ArcelorMittal was given the "Life Cycle Assessment Leadership" award 0.8 1.6 1.5 by The Worldsteel Association, which 1.4 1.5 1.2 recognises the quality of the work performed by 0.4 the Life Cycle Analysis team of Global Research and Development, based in Maizieres. 0.0 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 ArcelorMittal’s Health and Safety performance improved again in Q411 and FY11* IISI-standard: Fr = Lost Time Injuries per 1.000.000 worked hours; based on own personnel and contractors
  • 6. Snapshot 1H• FY’11 EBITDA of $10.1bn, 18.7% higher Group EBITDA (US$mn) than FY’10 12000• FY’11 Net income of $2.3bn, with Q4 10000 negatively impacted by non-cash charges 8000 2H 2H 6000• Own iron ore production 15.1Mt in 4Q’11 taking FY’11 to 54.1Mt (+10.5% y-o-y) 4000 2H 1H 2000 1H• Net debt at December 31, 2011 of $22.5 1H billion as compared to $24.9bn at 0 September 30, 2011; reduction of $2.4bn 2009 2010 2011 during 4Q’11 Net Debt 30.0 3.2 3.5x• Dividend proposed at $0.75 per share for 25.0 3.0x FY 2012 20.0 2.3 2.5x 2.2 2.0x 15.0 1.5x• Guidance: 1H’12 EBITDA likely to be lower 10.0 1.1 ` 1.0x than the 1H’11 but above 2H’11 levels 5.0 0.5x 0.0 0.0x 2008 2009 2010 2011 Net Debt (USDbn) - LHS Net Debt / Average EBITDA - RHS 1H’12 EBITDA is likely to be lower than the 1H’11 but above 2H’11 levels 5
  • 7. Global apparent steel consumption 1400 1200 RoW: +5.7% YoY RoW: +3.8% YoY 6.5-7% 1000 NAFTA: +9.7% YoY NAFTA: +5.5% YoY* 800 6.5-7% EU27: +/- 1% YoY* EU27: +6.1% YoY 600 400 China: 7.7% YoY China: +5% YoY 200 6.5-7% 0 2008 2009 2010 2011 2012 China EU27 NAFTA ROW Apparent steel consumption growth of +6.3% in 2011; we estimate growth ~4.5-5%* in 2012* Base case assumption is low single-digit growth in developed world apparent steel consumption (ASC); a consumer-sentiment driven technical recession in EU and US could lead to a lowsingle-digit decline in developed world ASC; a deeper Euro-debt crisis with negative YoY GDP growth could see low double-digit decline in developed world ASC 6
  • 8. Operational optimisation is a key to ourcompetitive advantageManagement gains plan (USD billion annualized) Asset optimization (USD million annualized) 5.0 1000 4.5 Target of $4.8bn by end of 2012 900 4.0 800 3.5 700 3.0 600 2.5 500 2.0 400 1.5 300 1.0 200 0.5 100 0.0 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2012 2011 2012 2013 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 Target• Strong track record of management gains • Focus on “Core” assets will ensure lowest cost – During crisis plans were accelerated footprint achieved and yield significant savings; – Achieved $4.0bn of gains by Q411; largely target $1bn by end-2012 SG&A and fixed costs related – Announced intention to close 2 blast furnace, sinter – Target of $4.8bn by end of 2012; next set of plant , steel shop and continuous casters in Liege, savings are largely variable cost and based on Belgium operational improvements Management gains to contribute to group EBITDA in 2011 and 2012 7
  • 9. Outlook and guidanceSteel: EBITDA progression 2009 to 1H 2012E ($million)- Steel shipments in 1H’12 are expected to be similar to 1H’11 levelsMining: 1 20 0 0- Mining volumes in 1H’12 are expected to be higher than 1H’11 1 00 0 0- FY 2012 own iron ore and coal production is expected to increase by approximately 10% over 80 0 0 2H 2011 levels 2H 60 0 0Capex:- Continued focus on core growth capex (mining) 40 0 0 2H- FY 2012 capex expected to be ~$4-4.5 billion 1H 1H 20 0 0 1HDebt and working capital: 1H- Further reduction in net debt anticipated with focus 0 on working capital management and non-core asset 2 00 9 2010 2 0 11 1 H 20 1 2 divestments- Consistent with stated objective to retain investment grade credit rating 1H’12 Group EBITDA expected to show improvement over 2H’11 but lower than 1H’11 8
  • 10. Capex and Growth Plans• Steel growth capex has been temporarily suspended• Focus remains on core growth capex in Mining: – Liberia: phase 1 complete and running at 4MT pa; phase 2 to 15Mt pa Upgrade railway line linking mine to port in Liberia remains under study – Andrade Mines (Brazil) - iron ore expansion to 3.5MT pa (expected completion in 2012) – AMMC: Replacement of spirals for enrichment to increase iron ore production by 0.8MT pa (expected 2013) – AMMC: Expansion from 16MT iron ore to 24MT pa by 2013 underway AMMC: Mont-Wright Mining Complex2011 capex of $4.8bn vs. planned $5-5.5bn; FY 2012 capex expected to be approximately $4-4.5bn 9
  • 11. Market update 10
  • 12. Apparent demand recovery driving pricereboundSpot iron ore, coking coal and scrap price Regional Steel price HRC ($/t)(index IH 2008=100) 130 Iron Ore 1300 Coking Coal China domestic Shanghai 120 Scrap N.America FOB Midw est 1200 N.Europe domestic ex-w orks 110 1100 100 1000 90 900 80 800 70 60 700 50 600 40 500 30 400 08 09 10 11 12 8 9 0 1 l-0 l-0 l-1 l-1 08 09 10 11 12 8 9 0 1 n- n- n- n- n- l-0 l-0 l-1 l-1 Ju Ju Ju JuJa Ja Ja Ja Ja n- n- n- n- n- Ju Ju Ju Ju Ja Ja Ja Ja Ja Steel prices rebounding since late Q4 11
  • 13. Apparent demand receded in 4Q’11 Global Apparent Steel Consumption (ASC)* US and European Apparent Steel Consumption (ASC)** (million tonnes per month) (million tonnes per month) 55 17 Developing ex China EU27 China USA 50 Developed 15 45 13 40 11 35 9 30 7 25 5 20 15 3 07 7 08 8 09 9 10 0 11 1 07 08 09 10 11 7 8 9 0 1 l-0 l-0 l-0 l-1 l-1 l-0 l-0 l-0 l-1 l-1 n- n- n- n- n- n- n- n- n- n- Ja Ju Ja Ju Ja Ju Ja Ju Ja Ju Ju Ju Ju Ju Ju Ja Ja Ja Ja Ja • Global ASC -5.2% in 4Q11 vs. 3Q11 [+2% y-o-y] • EU ASC -3.4% in 4Q11 vs.3Q11 [-4.9% y-o-y] • China ASC -10.2% in 4Q11 vs. 3Q11 {+0.2% y-o-y] • US ASC -4.2% in 4Q11 vs. 3Q11 [+13.6% y-o-y] Global ASC fell in 4Q 2011 v 3Q 2011* ArcelorMittal estimates** AISI, Eurofer and ArcelorMittal estimates 12
  • 14. Economic squeeze but sentiment up Regional Manufacturing PMI • Global leading indicators have rebounded 65 • US energy, equipment investment and 60 automotive remain strong as manufacturing rebounds from the summer slowdown 55 • In Northern Europe, uncertainty over the euro debt crisis and falling demand in the 50 South are acting as a drag on growth. Latest indicators (German Jan’12 PMI>50) are 45 China more encouraging Euro Area 40 USA • Southern Europe in recession as austerity measures are extended, consumers cut 35 back and construction weakens • Output in China in Q4’11 slowed on tight 30 credit and weak external demand with HSBC 06 07 08 09 10 11 12 6 7 8 9 0 1 PMI staying below 50 (official PMI 50.5) l-0 l-0 l-0 l-0 l-1 l-1 n- n- n- n- n- n- n- Ju Ju Ju Ju Ju Ju Ja Ja Ja Ja Ja Ja Ja Global leading indicators have rebounded somewhat over the past couple of monthsSource: Markit and ISM 13
  • 15. Mixed signs in construction end markets US construction indicators (SAAR) $bn* 800 Residential • Developed world construction at low levels 700 Non-Residential 600 • Encouraging signs in the US, 500 – Private non-res construction slowly picking up; 400 Architectural Billings Index above 50 (52 in Dec) 300 for last two months suggesting recovery H2’12 200 – US residential construction likely to recover (from a very low level) as home sales and construction 02 03 04 05 06 07 08 09 10 11 n- n- n- n- n- n- n- n- n- n- permits rise Ja Ja Ja Ja Ja Ja Ja Ja Ja Ja Eurozone and US construction indicators** Eurozone construction PMI • In Europe, uncertainty caused by the debt 65 crisis is delaying investmentExpansion USA Architectural Billings Index 60 55 – Construction PMI falling further below 50 50 – German construction market the only one with 45 solid fundamentals as it missed the pre-crisis boom.Contraction 40 35 – Mild weather providing temporary boost to most 30 markets 06 07 08 09 10 11 n- n- n- n- n- n- Ja Ja Ja Ja Ja Ja Encouraging signs in US construction, but European construction remains depressed * Source: US Census Bureau ** Source: Markit and The American Institute of Architects 14
  • 16. China slowing but steel output to rebound China Construction Indicator (Million Metre sq.) • Soft landing still expected in China but the 350 Floor Space under construction (12mma) government is only loosening policy slowly 310 New ly Started Construction (SA, 3mma) putting off the recovery until Q2’12 270 230 • Construction slowed rapidly toward year end 190 with newly started construction very weak in Dec’11. However, the slowdown is exacerbated 150 by the Nov’11 deadline to start 10m public 110 housing units 70 • Risk of a hard landing as controls on private 05 06 07 08 09 10 11 n- n- n- n- n- n- n- Ja Ja Ja Ja Ja Ja Ja real estate market cause distress among Net Exports of Finished Steel (Mt per month) developers but we expect central government to ensure this is offset by increasing public 6.5 housing 5.5 4.5 • Steel production was very weak in Q4’11 but 3.5 we still expect a pick-up through Q1’12 to peak 2.5 levels in Q2’12 and ASC growth of 5% in 2012 1.5 0.5 • As expected exports averaged less than 4mmt -0.5 in Q4’11 compared to a 4.9mmt peak in Mar’11 06 07 08 09 10 11 6 7 8 9 0 1 l-0 l-0 l-0 l-0 l-1 l-1 n- n- n- n- n- n- Ju Ju Ju Ju Ju JuJa Ja Ja Ja Ja Ja China ASC grew 7.7% in 2011; Expected to grow 5% in 2012 15
  • 17. Destocking has ended in major markets Europe Service Centre Inventories (000 MT) US Service Centre Total Steel Inventories (000 MT)2600 3.4 14000 USA (MSCI) 3.6 3.22400 EU (EASSC) 12000 3.4 3 Months Supply2200 Months Supply 3.2 2.8 100002000 3 2.6 80001800 2.8 2.4 60001600 2.6 2.2 4000 2.41400 2 2000 2.21200 1.8 0 21000 1.6 07 08 09 10 11 7 8 9 0 1 l-0 l-0 l-0 l-1 l-1 n- n- n- n- n- 07 08 09 10 11 7 8 9 0 1 Ju Ju Ju Ju Ju l-0 l-0 l-0 l-1 l-1 Ja Ja Ja Ja Ja n- n- n- n- n- Ju Ju Ju Ju JuJa Ja Ja Ja Ja Brazil Service Centre Inventories (000 MT) China Inventories in 25 Major Cities (Mn MT) Flat stocks at service centres 1,400 4.5 20 Months of supply 1,300 18 Flat Long 1,200 4 16 1,100 14 3.5 1,000 12 900 3 10 800 8 2.5 6 700 600 2 4 500 2 400 1.5 7 8 9 0 1 07 08 09 10 11 12 l-0 l-0 l-0 l-1 l-1 n- n- n- n- n- n- Ju Ju Ju Ju Ju Ja Ja Ja Ja Ja Ja 07 08 09 10 11 7 8 9 0 1 l-0 l-0 l-0 l-1 l-1 n- n- n- n- n- Ju Ju Ju Ju Ju Ja Ja Ja Ja Ja Inventory levels are now considered normal; there had been a sharp destock in Europe Q4’11 16
  • 18. Q4 financials 17
  • 19. EBITDA analysis 3Q11 v 4Q11 EBITDA bridge 3Q’11 to 4Q’11 ($million) (127) (673) 18 88 2,408 1,714 Q311 EBITDA Volume & Mix Selling Price / Non Steel Others** Q411 EBITDA Cost EBITDA* EBITDA decreased by 28.8% in 4Q’11 v 3Q’11 primarily due to price/cost squeeze * Non Steel EBITDA variance primarily represents the gain/loss through sale of by- products** Others primarily represents delta impact from provisions, DDH income and forex (net impact on revenue and costs) 18
  • 20. Group P&L($million) Depreciation: (1220) Interest: (429) impairment: (228) Forex and other: 13 Weighted Avg No of shares: 1549 Restructuring (219) Current tax: (185) Diluted Weighted Avg No of shares: 1549 Deferred tax: (648) 4Q 2011 Non-controlling 25 EPS = $ -0.65/share Diluted EPS = $ -0.65/share 1714 -1667 177 -416 47 0 -192 -1000 -1000 -808 (0) and restructuring charges Depreciation impairment Net income/ (loss) Income from Equity Continuing Ops controlling Interest Pre-tax Profit Taxes and non- Net income / Finance Cost Discontinued Operating (Ioss) from Operations EBITDA Income($million) Depreciation: (1155) Interest: (477) impairment: (85) Forex and other 85 Weighted Avg No of shares: 1549 Current tax: (209) Diluted Weighted Avg No of shares: 1611 Deferred tax: 55 -1,240 3Q 2011 Non-controlling 31 EPS = $ 0.43/share 2,408 Diluted EPS = $ 0.19/share 6 -392 -123 1,168 782 659 659 (0) Net loss from continuing operations was $1 billion during 4Q’11 19
  • 21. Free Cash flow($million) Change in w orking capital (679) Capex Net 1,843 financials, tax expenses (1,475) and others 2,878 1,714 1,403 Cash flow from EBITDA operations Free cash flow Free cash flow primarily driven by working capital release 20
  • 22. Group Cash flow and net debt ($million) 1403 24,887 830 289 332 98 22,513 Net Debt at 30 Free Cash Net M&A Dividends Forex Others Net Debt at 31 September 2011 Flow December 2011Net debt decreased primarily due to improved operating cash flow and cash inflow from Macarthur deal 21
  • 23. Balance sheet 22
  • 24. Strong balance sheet focusInvestment grade remains a strategic priorityNet Debt ($billion) Average maturity (years) 6.0 35 32,5 5.2 30 5.0 25 22,5 4.0 20 3.0 2.6 15 2.0 10 5 1.0 0 0.0 Q308 Q411 Q308 Q411Liquidity ($billion) Bank debt component of total debt (%) 16.0 90 85 12.0 12.5 80 12.0 70 60 8.0 50 40 4.0 30 20 15 0.0 10 Q308 Q411 0 Q308 Q411 Strong balance sheet and liquidity – investment grade strategic priority 23
  • 25. Balance Sheet highlights OWC and rotation days* (USD billion) Net Debt (USD billion) & Net Debt/Average EBITDA** Ratio (x) 28 140 35 2.0x 1.6x 24 120 30 67 days 1.5x 20 100 25 16 80 20 1.0x 12 60 15 10 ` 8 40 0.5x 4 20 5 0 0.0x 0 0 2Q 7 3Q 7 4Q 07 1Q 7 2Q 8 08 4Q 8 1Q 8 2Q 9 09 4Q 9 1Q 9 2Q 0 3Q 0 4Q 0 1Q 0 2Q 11 3Q 1 4Q 1 11 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 2Q 07 3Q 07 4Q 07 1Q 07 2Q 8 3Q 08 4Q 08 1Q 08 2Q 09 3Q 9 4Q 09 1Q 09 2Q 10 3Q 10 4Q 0 1Q 10 2Q 11 3Q 11 4Q 11 11 1Q 3Q 3Q 0 0 1 1Q Net Debt (USDbn) - LHS Net Debt / Average EBITDA - RHS Working capital (USDbn) - LHS Rotation day - RHS Rotation days decreased to 67 days during 4Q’11 from 73 days in 3Q’11* Rotation days are defined as days of accounts receivable plus days of inventory minus days of accounts payable. Days of accounts payable and inventory are a function of costof goods sold. Days of accounts receivable are a function of sales. 24** Based on yearly average EBITDA since January 1, 2004.
  • 26. Liquidity and debt maturity profileLiquidity position at December 31, 2011 Debt maturities(US$ billion) (US$ billion) 12 9.7 12.5 10 8 6 4.2 4.0 3.7Unused 4 2.8 2.0credit lines 8.6 2 0 2012 2013 2014 2015 2016 >2016 Bonds Convertibles Long term debt facility Other Commercial Paper 2.8Cash & 0.6equivalent 3.9 Commercial paper Liquidity lines: 2.2 Short term debt & – $4bn syndicated credit facility matures 06/05/15 Others – $6bn syndicated credit facility matures 18/03/16 Liquidity at 31/12/11 Debt due in 2012 – $0.3bn bilateral facility matures 30/06/13 Continued strong liquidity position and lengthening of debt maturities 25
  • 27. Investments in Associates &Joint Ventures USD Million Investee Location Stake 31.12.11 31.12.10 Erdemir Turkey 26% 1378 1596 China Oriental China 47% 1475 1337 DHS Group Germany 33% 1149 1190 Hunan Valin China 30% 691 686 Enovos Luxembourg 23% 597 614 Kalagadi Manganese South Africa 50% 397 496 Gestamp Spain 35% 506 468 Gonvarri Industrial Spain 35% 408 384 Others 2440 2473 Total 9041 9244 McArthur 0 908 As per 20F 9041 10152 Investment in associates and joint ventures ~$9bn 26
  • 28. Mining growth 27
  • 29. Iron ore growth 2010-2015, target 100MTincluding strategic contracts Own iron ore growth target (million metric tonnes) (Excluding strategic contracts) 100 Liberia Phase 1&2 Canada 80 • On track for 10% Brazil 14 growth in iron ore in Liberia 2011. Canada Phase 1 11 60 • Strategic contracts 5 1 1 forecast of 16Mt by 3 2015* 40 84 • Target iron ore at ~100MT by 2015 54 (including strategic 49 contracts) 20 0 2010 Operational Brow nfield Greenfield 2011F Operational Brow nfield Greenfield 2015 plan efficiency efficiency 2015 iron ore target growth plan on track* Strategic contracts include the Kumba (currently under dispute) and Cleveland Cliffs contracts** Includes the US$0.9 billon investment in expanding the pellet plant at AMMC which has not yet been committed to
  • 30. Liberia progressLiberia greenfield progress Industrial location of mine• Phase 1: DSO complete – 240km rail rehabilitation completed Guinea – Upgrade of Buchanan port and material handling facilities completed – First direct shipping ore (“DSO”) product shipped in September 2011 Sierra Leone – Now producing at 4mtpa rate Atlantic Yekepa Ivory Coast Ocean• Phase 2: 15mtpa concentrate from Buchanan 2015 Railway link from Yekepa Liberia to Buchanan (240km) – Expansion to 15mtpa requires investment in a concentrator and Liberia greenfield planned expansion (Million MT) remains under study 16 All marketable tonnes 12 8 15 • Total project capex (Phase 1 and 2) US$2 billion ` • Capex of US$0.7 billion by end of 2011 4 4 0 1 2011 2012F 2015F Liberia expansion on track 29
  • 31. Baffinland represents future growth Baffin Island overview• In partnership with Nunavut, ArcelorMittal has acquired a controlling Baffin Bay interest in Baffinland; ArcelorMittal Mary River mine site holding is 70% Proposed railway Baffin alignment Island• Baffinland owns the Mary River project, Steensby inlet camp a tier-1 iron ore resource in northern and proposed Canada port Foxe Basin• In-situ Fe grades of 64.7%, high-quality product, significant and scalable resource• ArcelorMittal already has a significant iron ore presence in Canada through ArcelorMittal Mines Canada, operating 2 Steensby Rotterdam = 3100 nautical miles iron ore mining operations, concentrator and pellet plant miles tical 0 nau = 500 rdam Rotte il Braz Acquisition of Baffinland demonstrates ArcelorMittal’s commitment to building a world-class mining business 30
  • 32. Segment performance 31
  • 33. Segment HighlightsSegmental EBITDA (US$mn) • FCA: EBITDA + 50% y-o-y; $43 EBITDA/t1000 – Weaker prices in all markets; ASP -$42/t compared to 3Q’11 900 – Shipments 0.5% marginally higher than 4Q’10 800 700 600 • FCE: EBITDA -95.2% y-o-y; $4 EBITDA/t 500 400 – ASP -67/t compared to 3Q’11 300 – Shipments 6.1% lower than 4Q’10 200 100 0 • Long: EBITDA +7.3% y-o-y; $58 EBITDA/t-100 FCA FCE Long AACIS AMDS Mining – ASP -$61/t compared to 3Q’11 Q410 Q111 Q211 Q311 Q411 – Shipments 2.6% higher than 4Q’10 • AACIS: EBITDA +10.7% y-o-y; $78 EBITDA/t Steel Segment EBITDA/tonne (US$) – ASP -$58/t compared to 3Q’11 – Shipments -9.6% lower than 4Q’10 175 150 • AMDS: EBITDA loss -$19 million 125 – ASP -$62/t compared to 3Q’11 100 75 – Shipments 4.3% higher than 4Q’10 50 25 • Mining: EBITDA +36.7% y-o-y 0 – Sales +47.8% higher than 4Q’10 -25 – Own iron ore production +20.2% y-o-y; Q410 Q111 Q211 Q311 Q411 – Own coal production +24.5% y-o-y FCA FCE Long AACIS AMDS Q4’11 saw underlying EBITDA decline versus Q3’11 in all business segments reflecting weak operating conditions 32
  • 34. Flat Carbon Americas (FCA)FCA - EBITDA (US$mn, LHS) and ASP (US$/t, RHS) 1000 1000 800 900 • EBITDA decreased to $237m from $420m 600 800 in Q3’11 and increased from $158m in Q4’10 400 700 200 600 • Crude steel production increased 2.4% to 0 500 6.0Mt from 5.9Mt in Q3’11 primarily due to return to normal production following Q410 Q111 Q211 Q311 Q411 downtime in North America operations in Q3’11 offset by lower production primarilyFCA Steel shipments (000t) in South America operations. 5800 5600 • Steel shipments decreased 4.4% to 5.5Mt 5400 from 5.7Mt in Q3’11 primarily due to 5200 weaker market condition in South America 5000 offset by improved auto market demand in 4800 North America 4600 4400 4200 • ASP decreased 4.6% to $868/t from $910/t 4000 in Q3’11 Q410 Q111 Q211 Q311 Q411 FCA EBITDA decreased sharply from Q3’11 primarily due to price cost squeeze 33
  • 35. Flat Carbon Europe (FCE)FCE - EBITDA (US$mn, LHS) and ASP (US$/t, RHS) • EBITDA decreased to $26m from $367m in Q3’11 and $543m in Q4’10 700 1050 600 1000 500 950 • Crude steel production decreased 10.4% to 400 900 6.6Mt from 7.4Mt in Q3’11 primarily due to 300 850 weaker market sentiment primarily in Europe 800 200 750 100 700 • Steel shipments decreased 3.1% to 6.2Mt 0 650 from 6.4Mt in Q3’11 due to weaker market Q410 Q111 Q211 Q311 Q411 conditions and strong destocking activityFCE Steel shipments (000t) • ASP decreased 6.6% to $954/t from $1021/t 8000 in Q3’11 7500 7000 • Operating performance in Q4’11 was 6500 negatively impacted by impairment charges 6000 of $56 million relating to various idled 5500 facilities, offset by non-cash gains of $163 5000 million relating to dynamic delta hedge 4500 (DDH) income and $93 million recorded on 4000 the sale of carbon dioxide credits. Q410 Q111 Q211 Q311 Q411 FCE profitability declined with price cost squeeze amidst weak operating conditions 34
  • 36. Long Carbon Americas & Europe (LCAE)Long - EBITDA (US$mn, LHS) and ASP (US$/t, RHS) • EBITDA decreased to $338m from $438m in Q3’11 and from $315m in Q4’10 700 600 950 • Crude steel production decreased 2.4% to 500 850 5.5Mt from 5.6Mt in Q3’11. 400 300 750 200 • Seasonally production was lower in the 650 Americas due to drawdown of inventory 100 0 550 mainly in Brazil and the weaker market demand. Q410 Q111 Q211 Q311 Q411 • Steel shipments decreased 2.3% to 5.9MtLong Steel shipments (000t) from 6.0Mt in Q3’11 due to the summer holiday period in Brazil and lower demand in 6500 North America and Europe 6000 5500 • ASP decreased 6.3% to $906/t from $967/t in Q3’11 5000 4500 • Q4’11 operating performance was negatively impacted by impairment charges of $160m 4000 primarily relating $151m for extension of Q410 Q111 Q211 Q311 Q411 idling at ArcelorMittal Madrid electric arc furnace Long Carbon profitability declined due to lower volumes and lower prices 35
  • 37. Asia, Africa and CIS (AACIS)AACIS - EBITDA (US$mn, LHS) and ASP (US$/t, RHS) • EBITDA decreased to $238m from 500 800 $284m in Q3’11 and increased 400 750 from $215m in Q4’10 700 300 650 200 600 • Crude steel production increased 100 550 2.5% to 3.6Mt from 3.5Mt in Q3’11, 0 500 primarily due to improved Q410 Q111 Q211 Q311 Q411 production in Ukrainian operations AACIS Steel shipments (000t) • Steel shipments increased 2.0% to 3.1Mt from 3.0Mt in Q3’11 3500 3400 3300 • ASP declined 7.5% to $713/t from 3200 $771/t in Q3’11 3100 3000 2900 2800 Q410 Q111 Q211 Q311 Q411 AACIS profitability declined primarily due to price cost squeeze 36
  • 38. Distribution Solutions (AMDS)AMDS - EBITDA (US$mn, LHS) and ASP (US$/t, RHS) 140 1100 • EBITDA decreased to ($19m) 120 100 1000 EBITDA loss from $48m in Q3’11 80 and $86m in Q4’10 900 60 40 • Steel shipments increased 7.6% to 800 20 5.0MT in Q4’11 as compared to 0 700 4.6MT in Q3’11 -20 Q410 Q111 Q211 Q311 Q411 -40 600 • ASP declined 6.1% to $948/t from $1010/t in Q3’11AMDS Steel shipments (000t) 5200 5000 4800 4600 4400 4200 4000 3800 Q410 Q111 Q211 Q311 Q411 AMDS profitability declined due to lower margins from European operations due to weak market 37
  • 39. Mining Mining EBITDA (US$mn) • EBITDA was lower at $779m as compared to 900 $842m in Q311 and higher than $570m in Q410 800 • Own iron ore production 15.1Mt increased 7.2% 700 600 as compared to 14.1Mt in Q3’11 primarily due to 500 Liberia and Mexico 400 • Total iron ore shipments increased 12.8% to 300 200 15.3Mt (vs. 13.5Mt in Q3’11) of which 8.5mt at 100 “market” prices (vs. 6.7Mt in Q3’11) and 6.8Mt on 0 “cost-plus” basis (vs. 6.9Mt in Q3’11) Q410 Q111 Q211 Q311 Q411 • Own coal production increased 5.6% to 2.2Mt in Q4’11 (vs. 2.1Mt in Q3’11) Iron Ore (million tonnes) Coal (million tonnes) Own Production Shipped at "Market price" Shipped at "Cost-plus" Own Production Shipped at "Market price" Shipped at "Cost-plus" 2.5 20.0 2.0 15.0 1.5 10.0 1.0 5.0 0.5 0.0 0.0 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 Mining benefited from higher overall production volumes offset by lower average selling prices following the change to the seaborne benchmark pricing systemDefinitions: “Market priced” tonnes represent amounts of iron ore or other raw materials from ArcelorMittal mines that could be sold to third parties on the open market. Market priced tonnes that are not sold to third partiesare transferred from the Mining segment to the Company’s steel producing segments at the prevailing market price. Shipments of raw materials that do not constitute market price tonnes are transferred internally on a 38cost-plus basis.
  • 40. Strong Automotive market share maintained and increasing on high added value products NAFTA Europe 2008 2009 2010 2011 2008 2009 2010 2011 AHSS Market share overall Market share AHSS Market share overall Market share → Strong market share maintained on Auto → Strengthening position in Advanced High Strength Steels - stronger increase than average in ALL regions - above average market share Recognised leadership from key customersSources : AM deliveries ; JD Power/CSM 39
  • 41. Our Leadership in automotive steel Automotive segment attributes ArcelorMittal indexed average auto steel prices and spot HRC USA domestic fob midwest • Solution-driven segment with high US$/s.ton (Base 100=Q406) value proposal for Original Equipment 200 Manufacturers (OEM) 180 160 • Relative stability of margin: 20-30% of 140 average selling price is attributable to 120 the value added nature of the product 100 • High volumes, around 15% of the 80 group’s total, and stable product mix 60 • Lower price pressure when overall 40 Average auto steel price 20 demand declines due to value-added Spot HRC USA domestic fob midwest US$/s.ton 0 products and contract-selling Q 6 Q 7 07 Q 7 07 Q 8 08 Q 8 Q 8 09 09 Q 9 09 Q 0 Q 0 Q 0 10 Q 1 Q 1 11 0 0 0 0 0 0 0 1 1 1 1 1 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 • Barriers of entry due to technical know- Q Q Q Q Q Q Q Q how requirements for value-added ArcelorMittal automotive steel ArcelorMittal automotive steel products and customer relationships production by region in 2010 shipments by product in 2010 • Opportunities and drivers for NAFTA Hot Rolled innovation, improvement, development 33% Coated Coil 24% (Electrogalva & growth nised) 8% • Global customers Europe 60% Mercosur* 6% Coated Cold Rolled South Africa (hot dip) 15% 1% 53% Global auto steel market ~65mt in 2010; ArcelorMittal holds market share of ~20% globally (approx. 40% in our “domestic” markets) and is a leader for high value-added productsSources: JD Power forecasts (08-2011) 40
  • 42. S-in motion program offers 20% weight reduction → Using currently and globally available Advanced High Strength Steel (AHSS) grades → Involving unique industrial partner network → High tech solutions (Tailored blanks, …) Catalogue of worldwide solutions adapted to meet recent LWB and most stringent crash requirements Ductibor® 500P / Usibor® 1500P • Cost neutral LWB Usibor® 1500P / Usibor® • Roll out to all automotive customers in the world with 1500P significant interest (more than 80% of OEMs involved with S- - For the lightest BiW concept, 29 parts in motion roll out) (~69 kg) use hot stamping offering high • Trigger partnerships with customers on future platforms mechanical resistance for complex (already successful results) geometries without spring back effect Worldwide ArcelorMittal R&D involving automotive suppliers and industrial partners (Gestamp and Magnetto Automotive)Target Perimeter = Body in White (BiW), Closures and Chassis 41
  • 43. China’s steel demand following precedents • Economic development is characterised by strong, early phase steel demand growth – China is no different Cumulative crude steel apparent consumption (kg/capita) 40000 35000 Germany 30000 USA 25000 20000 France S. Korea 15000 10000 5000 China 0 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 China’s steel demand growth is sustainable near termNote: Between 1900 and 1949 crude steel production per capita as approximation for demand as no data availableSources: WSA for crude steel ASC; Global Insight and UN Data statistics for population; ArcelorMittal Corporate Strategy team analysis 42
  • 44. China demand growth remains solid Steel consumption per capita in 2009e (kg) Chinese steel apparent demand (mt) 700 600 500 Western Central 400 China China 300 Coastal (210 kg) (285 kg) China 200 100 (615kg) 0 P P 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 Development and Population growth potential migration Chinese steel industry running at full capacitySources: WSA, SBB and ArcelorMittal estimates 43
  • 45. China will keep global raw material supplies tight • China steel demand growth is expected to continue to absorb new supply of iron ore, keeping global supply/demand tight Global iron ore supply/demand outlook (Mn tonnes) 3300 World Iron Ore Demand World Iron Ore Production 2800 Iron Ore Demand/Production 2300 1800 1300 800 2010 2011 2012 2013 2014 2015 2016 Supply/Demand projections Iron ore supply forecast to keep pace with demand, with no significant excessSource: ArcelorMittal Corporate Strategy 44
  • 46. But it’s not just a China story • Outside China there is significant, broad-based growth in steel consumption Developing world ex-China: Crude steel consumption per capita 2010 (kg) • Over 4 billion people Developed world: • Large populations in India, • Ca. 1bn people MENA, CIS, Brazil, parts • Low population of SE Asia growth • Many of these countries • Post-industrial are well engaged on the service based path of industrialisation economies and urbanization growth 450 • Declining steel • Over 400m tonnes steel 400 consumption consumption • 5.6% CAGR 2000-2010 102 60 India Other China Developed developing World* world We expect continued growth in steel consumption in the developing world* US, Canada, EU-15, Japan, Korea, Taiwan, Oceania; 45Sources: WSA, ArcelorMittal Corporate Strategy analysis
  • 47. ArcelorMittal Mines Canada (AMMC): expansion underway Canadian industrial location ArcelorMittal Mines Canada overview • Expansion of our Mont Wright mine at AMMC and concentrate capacity to 24Mt pa due 2013 (from 16Mtpa post operational improvements) approved • Expansion capitalising on existing infrastructure, product quality and experienced workforce • Capex C$1.2bn for mine and concentrator plant expansion* Bloom Lake • Cash cost is circa US$35/tonne • Advantageously located with easy access to European and US markets Mining expansion plan (concentrate) Million mt 25 Brownfield expansion 20 9 Canada base 15 1 10 14 15 * AMMC 2013 brownfield 5 expansion includes 1mt 2011 2013 increase for spirals Strategic advantage from exclusive use of own rail and port facilities* Total scheme investment of US$2.1 billion includes investment in expanding the pellet plant which has not yet been committed to 46
  • 48. Leading Steel & Mining Company Largest steel producer 4th Largest iron ore producer 2010 Crude steel, mt 2010 Iron ore production, mt 98 298 Steel companies 203 37 35 35 144 31 23 23 22 22 19 18 18 17 16 16 15 14 14 13 13 60 69* 46 36 28 AM Evraz Riva SAIL Hyundai POSCO JFE Nucor Tata Steel Gerdau Wuhan Shougang Nippon Steel US Steel Ansteel Severstal Jiangsu Shagang ThyssenKrupp Baosteel 23 Sumitomo AM Evraz Vale Rio BHP Mitsui US Steel Metinvest FY 2011 EBITDA split by product (geographical area) Flat North • World’s No1 steel producer (~ 6% of world crude steel output) America Mining 17% • 2011 EBITDA of US$10.1bn; only ~40% generated from steel 31% business in Europe and North American Flat Europe • Balanced portfolio of cost-competitive assets in both developed 15% and developing markets (No1: EU; N Am; Africa, LatAm, CIS) ~60% of EBITDA generated • Broad range of high-quality finished and semi-finished carbon OUTSIDE of EU and North steel products ; Outstanding distribution networks America Long North America • 4th largest iron ore producer; low 2nd-quartile cash cost for iron Long Europe 1% ore; World-class iron ore reserve & resource AACIS 5% 13% Distribution • Global presence unrivalled knowledge base and benchmarking Flat South Long South 3% America America 5% 10% Diverse steel business (by product and geography) with rapidly expanding mining operationsNote: *ArcelorMittal iron ore production includes strategic contracts; 2010 production from own mines was 48.9Mt; 47
  • 49. ContactsDaniel Fairclough – Global Head Investor Relations Thomas A McCue – US Investor Relationsdaniel.fairclough@arcelormittal.com thomas.mccue@arcelormittal.com+44 207 543 1105 +312-899-3927Hetal Patel – UK/European Investor Relations Lisa Fortuna – US Investor Relationshetal.patel@arcelormittal.com lisa.fortuna@arcelormittal.com+44 207 543 1128 +312-899-3985Valérie Mella – European and Retail Investor Relationsvalerie.mella@arcelormittal.com+44 207 543 1156Maureen Baker – Fixed Income/Debt Investor Relationsmaureen.baker@arcelormittal.com+33 1 71 92 10 2648