The world’s number one steel company

The creation of ArcelorMittal brings together two companies with a common vision and a shared philosophy. Both Arcelor and Mittal Steel led the industry towards greater consolidation. Both understood that scale, geographic reach and product breadth are vital ingredients in steel industry success. Both invested heavily in research and development to produce the next-generation steels that would give customers a competitive edge. Above all, the two companies had highly complementary footprints in the world’s major markets.

The ArcelorMittal signatureJust as an individual’s handwritten signature is unique to them, the ArcelorMittal signature is unique to the company. Designed to suggest the transformational energy that characterises ArcelorMittal, the signature’s dynamic and iconic form reflects our leadership position in the steel industry.

Today, ArcelorMittal is unique. It is the only truly global steelmaker, with 320,000 employees in more than 60 countries and an industrial presence in 27 countries. It combines market leadership in the developed markets of Europe and America with a competitive production base in developing economies. It enjoys a leadership position in technically advanced products. And it benefits from a high level of vertical integration – from iron ore mining at one end of the value chain to steel service centres and distribution at the other.

As ArcelorMittal continues on this path, it will build not only on the enormous strengths created by the merger but help to establish a more sustainable steel company – maintaining profitability throughout the variable steel cycles – to the benefit of all its stakeholders.

A unique profile, a clear strategy

Message from Lakshmi Mittal, President and CEO

“ A new era has dawned for the world steel industry. The consolidation process of recent years, which was led in large part by ArcelorMittal and its predecessor companies, has transformed the steelmaking landscape – creating a more stable and sustainable market environment. We are proud to have played our role in this process.

We have long believed that size and scale are vital, both to compete in a global marketplace and to manage supply and demand through the economic cycle. A strong, sustainable industry benefits all its stakeholders – employees, customers and investors alike.

Today, ArcelorMittal exhibits not just size and scale, but resilience, strength and growth. Above all, we have a unique profile and a clear strategy.

Our strategy is to build a sustainable and stable business, creating value through the cycle, through scale and diversification.

At the same time, we want to set the standard in areas such as health and safety and career development. We want to engage positively with the communities in which we operate and demonstrate our commitment to good environmental practise. Our position as the industry leader demands no less.”

Sincerely,

– We are the only truly global steel producer, with a leadership position on four continents. A quarter of our production comes from plants that figure among the lowest-cost producers in the world. Together with a high degree of exposure to stable markets and long-term contracts, this leaves us well placed to deliver sustained profitability and high cash-flow generation.

– We are the only producer offering and developing the full range of steel products and services. High-end and specialty products account for more than 60% of shipments. The breadth of our product range and the diversity of our customer base help insulate us from shifting demand patterns.

– We are not just a steel producer. At one end of the value chain, we are an integrated metals and mining business. At the other, we operate a significant service and distribution business that transforms finished products and delivers a bespoke service to customers. Wherever opportunities arise, we are able to capture them.

“ Today, ArcelorMittal exhibits not just size and scale, but resilience, strength and growth.”

Transforming tomorrow: Our philosophy, our values

We know that our position in the steel industry brings unique responsibilities. We are committed to setting globally recognized standards with the needs of future generations in mind.

Our goal is to provide the leadership that will transform tomorrow’s steel industry.

We have a clear vision of the future, underpinned by a consistent set of values.

Sustainability

We are guiding the evolution of steel to secure the best future for the industry and for generations to come…

…Our commitment to the world around us extends beyond the bottom line, to include the people in which we invest, the communities we support and the world in which we operate. This long-term approach is central to our business philosophy.

We look beyond today to envision the steel of tomorrow…

Quality

…Because quality outcomes depend on quality people, we seek to attract and nurture the best people to deliver superior solutions to our customers.

Leadership

We are visionary thinkers, creating opportunities every day…

…This entrepreneurial spirit brought us to the forefront of the steel industry. Now, we are moving beyond what the world expects of steel.

To maintain and enhance the critical importance of health and safety among our 320,000 employees, a worldwide Health and Safety Day is held every year. The purpose of the event is to mobilise the Group’s entire workforce – including subcontractors – to improve risk awareness, identify best practice and promote knowledge sharing in the health and safety arena.

Safety comes first: the wellbeing of our workforce and contractors is our number one priority. A strong health and safety culture is instilled at every level of the company and is supported by a robust set of safety standards. A continuous reduction in the frequency rate of accidents is targeted year-on-year.

Our health and safety management system lays particular emphasis on local health and safety leadership and behaviour. A structure of Group-level and regional health and safety committees is designed to improve the flow of new initiatives and support the sharing of best practices throughout the Group.

Health and safety

We work hard to ensure the health and safety of our people – and minimise our impact on the environment.

Above:Child’s drawing taken from the Health and Safety Day in Kazakhstan.

A worldwide presence

With 320,000 employees in 60 countries, ArcelorMittal spans the globe as no other steelmaker. It is the industry leader on four continents, ranking number one in all major customer segments.

Our huge reserves of raw materials – iron ore and coal – span five continents. Many are located close to our steelworks, improving supply logistics. At the other end of the value chain, our worldwide network of distribution and steel service centres provides a powerful complement to our diversified production base.

Allied to our product breadth, our global presence gives us unrivalled capacity to deliver what our customers require.

The merger of Arcelor and Mittal Steel brought together the leading steelmaker in Western Europe and Latin America with its counterpart in North America, Eastern Europe and the CIS, and Africa. That natural fit is now reflected in a worldwide operation with leadership on four continents and an industrial presence in 27 different countries.

That global footprint brings numerous benefits. Most importantly, it gives us a unique platform from which to serve our multi-national customers. With plants sited close to theirs, we are in a position to support their developments wherever they arise. We can also deliver to them standard solutions around the globe, assuring them consistent quality.

The scale and scope of our operations enhance our ability to compete effectively. Our business units support one another by generating product synergies and sharing know-how. All benefit from the enhanced purchasing power that comes from being part of the expanded Group. All share in the fruits of our continuous investment in research and product development. And all enjoy access to world markets through a unified export organisation and a global sales and marketing network.

Our global production

22%US and Canada

Percentages indicate geographical breakdown of ArcelorMittal production in 2006

US $88.6 billion

09%Latin America

sales in 2006

10%CIS and Central Asia

07%Africa

118million tonnes of steel produced worldwide

18%Central and Eastern Europe

34%Western Europe

The drive for operational excellenceWith our unmatched scale and diversity, we benefit from a rich storehouse of technical know-how. This is deployed in a systematic manner to get the best out of every plant, every process, every function.

The knowledge-sharing process is coordinated at corporate level, allowing key skills to be transferred around the Group quickly and efficiently. Where possible, the processes and tools that underlie these skills are becoming standard throughout the Group and consequently in training programmes at the ArcelorMittal University.

To stimulate the exchange of best practice at shop floor level, a number of plants with the similar characteristics – such as production route or product mix – have been twinned. The interaction between them is constant and systematic.

The company’s performance enhancement programme exists to lift the bar on future performance – not now and again, but continuously.

The drive for operational excellence is no one-off activity. At ArcelorMittal, we believe that performance enhancement is a continuous process. When we achieve one goal, we set ourselves another.

Our global presence and the scope of our operations have given us access to a unique knowledge base. It has been both deepened and enriched by the ArcelorMittal merger.

Sharing that knowledge lies at the heart of the Group’s management approach. The company’s Knowledge Management Programme is designed to speed the flow of best practices and techniques around the Group. The ability to call on the very best steelmaking skills and deploy them wherever they are needed has been a major contributor to our success.

Case Study: Twinning

Once plants are twinned, inter-plant visits of operational and technical managers are organised. The managers undertake detailed benchmarking of key performance indicators (kpis), compare operating and maintenance practices, and review the technological needs of the facilities. By sharing best practices, ideas for improvement are generated and the local management then prepare action plans to implement.

For example, at Galati, the actions cover many areas, ranging from cycle time improvements in the BOF shop arising from changes in converter blowing practice; to cost reduction; and to yield and quality improvement from changing the design of the converter lance.

We encourage an ongoing support and interaction program to be developed between the twinned operations. This ensures that implementation is followed, problems are addressed, and improvement continues in a structured manner.

Quality in depth: An unrivalled product rangeAll steels, all grades, all applications… ArcelorMittal offers an unrivalled breadth of products and supports it with a range of technically advanced services that can deliver a tailor-made solution wherever it is needed in the world.

Quality lies at the heart of our product development. The world energy industry relies on our pipes and tubes. We are the biggest provider of the high-strength steels needed for wind turbines. Shipbuilders turn to us for the steels that will survive the ultra-low temperatures aboard a liquid nitrogen gas (LNG) carrier. The household appliance industry is a big consumer of our stainless steels. We are a world leader in packaging.

Our steel service and distribution centres finish steels to suit individual applications and provide high-quality and personalised services – adding real value to the steel solutions devised.

Wherever and however steel can play a role, ArcelorMittal is there to provide the skills, expertise and the quality to make a difference.

In flat products, we are the clear leader in coated steels – ranging from hot dip to electro-galvanised and colour coated. We have pioneered new grades of light but high-strength steels for the world automotive industry – helping our customers design safer, more fuel-efficient, corrosion-free vehicles.

In long products, we produce rebars, sections and beams in all sizes and qualities. We are the leader in sheet piles. We produce the biggest plates in the world. The steels we supply to the building industry have expanded the range of construction possibilities. From the new World Financial Center in Shanghai, China, to the Airbus assembly plant in Toulouse, France, we have helped change the shape of the world around us.

Case Study: GlobalFloor® – From design to execution

GlobalFloor® is a flexible universal floor system employing beams and galvanised steel decks whose performance is optimised through the judicious combination of the product offer and a specially design tool.

GlobalFloor® enables performance to be optimised in respect of mechanical strength, speed of erection and incorporation of services from a comprehensive product range:

– steel structure: IPE, ACB (Arcelor Cellular Beams) and asymmetric beams

– steel decks: composite concrete floors decks, prefabricated permanent formwork.

Case Study: From ports to underground car parks

Our leadership in steel sheet piles, allied to our technical expertise in foundation solutions, is world-renowned. We have helped build, extend or deepen ports from Northport, New Zealand to Hamburg, Germany. Our Roxan® sheet pile water tightness system developed for the Venice lagoon rehabilitation project has set new standards for effectiveness. Around the world, our engineers help devise cost-effective solutions for flood protection schemes, tunnels, road works or underground car parks – and provide the design, assembly, technical and logistics support to turn the projects into reality.

Research and development: Our key to the futureResearch and development lies at the heart of ArcelorMittal’s strategy to lead innovation in the world of steel. We employ 1,200 researchers in 13 research centres around the world, developing next-generation steels and solutions that transform the range of options open to our customers.

The research facilities of ArcelorMittal constitute one of the world’s leading industrial research resources, targeting continual product advances for the automotive, household appliances, construction, civil engineering and general industrial sectors.

In the automotive field, we have led the way with advanced high-strength and high-deformability steels. We collaborate closely with our customers. We have engineering teams resident in customers’ plants, working with them at the design stage of new product launches, helping them create vehicles that are lighter, stronger, safer – and also more attractive to the end-purchaser.

In construction and civil engineering, we have developed a range of advanced products – from jumbo beams to the world’s widest sheet piling – that provide new and more cost-effective solutions for our customers. Our light steel solutions reduce the weight of new buildings compared with other materials, making development possible in areas with poor or water-logged soils. We have developed a range of reflecting products that substitute for aluminium in lighting. Our coloured stainless steels for use in architectural applications combine durability with aesthetic appeal.

We work continuously to extend our range of special plates, both stainless and alloyed. For the refining and petrochemicals market, we have developed special thick plates with higher-strength properties. For the power station market, we continue to meet demands for steels with improved performance at high temperatures.

We are the leaders in a variety of industrial applications. We continue to develop new grades of high performance and high durability materials. We have pioneered methods of coating steel in a vacuum to produce steel with anti-bacterial properties for the food industry. Our galvanised steels, coated using E-passivation, eliminate the use of chromates, reducing the impact on the environment.

We also invest heavily in process research and development – to lift productivity, improve quality, develop cleaner production processes and protect the environment through reduced emissions and improved recycling. As a member – and the leader in Europe – of the ULCOS (‘Ultra-Low CO2 Steelmaking’) programme, ArcelorMittal is committed to help find new steel production processes that drastically reduce emissions of CO2 and other greenhouse gases.

Case Study: ULCOS

By taking the lead of the ambitious ULCOS R&D project, ArcelorMittal takes responsibility in the worldwide efforts to further the steel industry’s curb CO2

emissions and fight climate change. The target of the ‘Ultra Low CO2 Steelmaking’ project, which is backed and funded by the European Union, is to develop a breakthrough technology to reduce steel industry CO2 emissions by 30 and 70% respectively. Close to 50 steel companies, universities, R&D labs and other industrial partners participate in the ULCOS program coordinated by ArcelorMittal Research. During the project’s first phase of the ULCOS programme nine project teams studied a broad spectrum of potential solutions ranging from capture and confinement of CO2 from modified blast furnaces to direct electrolysis of iron ore, as well as the possibilities offered by alternative energies such as biomass. The second phase, which looks in depth at the selected candidate processes has just started. Next comes a five-year long pilot phase to finally confirm the technical and economic viability of the project.

Making a difference... globally, locallyAs a global company, we have a clear responsibility to contribute to the wellbeing of the communities in which we operate.

With steelmaking plants in 27 countries, we play an important role in stimulating economic and social progress. Through income generation, training, the establishment of local business linkages and the building of infrastructure, our operations are themselves engines of local development. We recognise, however, that we have a further duty to contribute to the wellbeing of our people, their families and the societies in which they live.

A number of our operations are located in developing countries with pressing social and economic needs. In some of them, we are one of the biggest foreign investors and employers. This brings with it an added responsibility – not only to our employees and their families but to the wider community.

Wherever we have a presence, we engage actively with local bodies – providing support in areas such as education, social development, healthcare, sports, enterprise and cultural activities. Going forward, we intend to provide added focus to this programme through a new initiative, the ArcelorMittal Foundation, which will co-ordinate all of our social projects.

The Foundation will promote the Group’s commitment to society and sustainable development, focusing in particular on the communities where we operate. As part of the process, it will seek to develop partnerships with non-governmental organisations in order to scale up the impact of our project work at a global level.

Case Study: Boosting maths and science in South Africa

To help tackle the critical shortage of engineering skills in South Africa, we worked with the Gauteng Department of Education in the Vaal region to set up a Science Centre of Excellence to teach mathematics and science. The centre is equipped with ultra-modern classrooms, laboratories and an interactive science exhibit centre. The children and their teachers are transported to the centre daily.

The results have been dramatic. After the first 15 weeks of lessons, one school that had scored just 6.8% in the initial assessment obtained a 69.8% mark in the final test. Equally important, the majority of students have developed a genuine interest in the subjects – which bodes well for the future.

Case Study: Encouraging bone marrow donors in Brazil

Our support for bone marrow transplant programmes goes back to 1988. Over the years, we have helped develop stem cell donor registers in France, Spain, Italy, Belgium and Luxembourg.

Most recently, we have focused our efforts on Brazil, where an ambitious target set in 2004 to register 250,000 people on the Government’s REDOME register was exceeded in 2006. By the end of 2006, the number of donors on the REDOME register topped 334,000 – thanks in no small part to volunteering on the part of thousands of employees at the Group’s Brazilian plants.

Case Study: Disaster relief in Mississippi

After Hurricane Katrina, the Group ‘adopted’ the town of Long Beach Mississippi, one of the worst affected communities, and committed $1million to support rebuilding work.

Under the adoption process, we have committed a project team – involving mechanical and structural engineers, logistics and purchasing specialists – who are working with the local authorities engaged in driving the reconstruction effort. The team is both using its project management skills to help rebuild the town and using industry contacts and partners to accelerate the work and conserve the city’s funds.

We have committed ourselves to remaining in Long Beach until the town is fully back on its feet.

Strong, robust and highly cash-generativeThe merger has created a financially strong and cash-generative business, bringing new earnings stability to the steel industry.

Our long-term debt is accorded an investment grade rating by the major debt rating agencies. We are pledged to work to maintain that rating in the years ahead.

The merger of Arcelor and Mittal Steel has created a Group with immense financial strength. In 2006, ArcelorMittal recorded pro-forma sales of over $88 billion and a top-line profit (earnings before interest, tax, depreciation and amortisation) of $15.3 billion. We have a stated target of lifting profits to $20 billion by 2008. Some $1.6 billion of that will come from integration savings and other gains arising out of the ArcelorMittal merger.

20052006

80,171

+10.5% Sales (US $ million)

88,576

20052006

102.9

+7.4% Shipments (million tonnes)

110.5

20052006

14,959

+2.1% EBITDA (US $ million)

15,272

11,824 Operating income (US $ million)

+1.5%

11,648

20062005

20052006

8,263

-3.5% Net income (US $ million)

7,973

ArcelorMittal pro-forma figures (unaudited)

2004 2005 2006

US $16bnUS $14.9bn

Line indicates HRC FOB US Midwest $/s. ton

ArcelorMittal EBITDA pro-forma

Q1 2007: US $4.3bn

US $15.3bn

Environment

Continuous improvement in environmental performance is a key element of our commitment towards sustainable development. Our Group Environment Department works closely with the business units to ensure a consistent and coordinated approach that monitors and measures performance, anticipates regulatory changes and helps develop more environmentally friendly methods of production.

Since 1990, our Western European plants have reduced their CO2 emissions per tonne of steel produced by a fifth. That know-how is now being transferred to other plants around the Group. A systematic knowledge-sharing process is in place to spread best practices worldwide.

We invest heavily in process efficiencies to improve the working environment of our people and to reduce the impact of our operations on society at large. Many of these projects have received recognition from public bodies, and many of our operations are accredited to the ISO14001 international standard. Applying for that certification is now mandatory for all facilities in the Group.

In addition, we are a member and the leader in Europe of the Ultra Low CO2 Steelmaking programme (ULCOS) which aims to find new production processes that drastically reduce emissions of greenhouse gases.

Case Study: Collect-a-can

Our Collect-a-can initiative in South Africa shows how an imaginative approach to environmental management can combine with job creation to make a major contribution to sustainability.

Set up in 1993, Collect-a-can encourages people to recover beverage cans and sell them for recycling. More than R300 million ($42 million) has since been paid to 37,000 collectors, who in turn provide jobs for hundreds of people. Almost 700,000 tonnes of steel cans have been recovered over the years – saving the use of non-renewable raw materials.

Allied to the project is a school competition in which young people are educated about environmental welfare and win prizes for recovering cans. The prize money provides much needed funds for often disadvantaged communities.

Making the most of our peopleA career with ArcelorMittal offers unlimited opportunities for advancement.

Harnessing the skills of our 320,000 employees is an integral part of the ArcelorMittal vision. We seek to be the employer of choice in the steel industry – providing full scope for personal development, an international career path and unlimited opportunities for advancement.

Enabling and encouraging employees at all levels to make the most of their talents is a duty on any good employer. We seek to discharge that duty in a number of ways.

Our long-standing leadership development programme combines several tiers of internal and external training with a continuous review process designed to identify and develop a long-term pool of talent. That process not only assesses the quality of leadership within all business units and functions but identifies the potential leaders of tomorrow.

The focus of our internal training and skills development programmes is the ArcelorMittal University. The University constitutes one of the most advanced corporate teaching facilities in the world, encouraging people to acquire new skills, take on new challenges, exchange ideas and share best practice.

From starter courses for young managers to advanced modules on change management, the University is designed to provide development opportunities for everyone with people management responsibilities, spanning professional, functional or technical activities.

Promising talent is also encouraged to attend one of a number of management and leadership programmes at leading business schools in the US and Europe with which we have close associations.

We also seek to encourage international mobility. To that end, we have made our internal job market as transparent as possible. Our Job Market Online Intranet site allows anyone within the new perimeter of the Group to apply for a vacancy in any country, profession or plant.

In addition to fostering internal development, we continue to look beyond the boundaries of the steel industry for future talent. Every year, we recruit a number of MBA graduates from leading business schools in Europe, the US and Asia.

The future

We will continue to play a role in building a more consolidated, sustainable steel industry.

A consistent strategy has driven the Group over many years. We have led the consolidation of the world steel industry and we will continue to do so. In the process, we will not only build on the enormous strengths created by the merger but also help cement the new-found sustainability the industry enjoys.

We now combine a leadership position in high-end, developed markets with extensive low-cost production in developing economies. We are the first steelmaker with the scale to match that of our global customers – and with the geographic reach to support them around the globe.

That reach is key. Many of our customers value a supplier that can deliver the same, high-quality product in multiple markets. We will continue to build a global platform from which we can support them wherever they choose to operate.

That means expanding our presence in developing economies – both to serve our multi-national customers and to participate in the domestic growth that is forecast for many of those markets.

As important as geographical expansion is continued vertical integration. No other steelmaker combines the same wealth of upstream assets – in coal and iron ore mining and low-cost slab production – with the breadth of downstream production and distribution enjoyed by ArcelorMittal.

ArcelorMittal believes this winning strategy has not only created the market leading position enjoyed today, but ideally positions the company to lead the steel industry into a new phase of quality and sustainability.

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www.arcelormittal.com