Investor Day 2013:Backing our franchises AACIS – Focussing on improvement
15 March 2013 Gonzalo Urquijo, GMB
DisclaimerForward-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 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, 2012 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 MeasuresThis 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
Overview13:30 / 09.30 “Focussing on value creation” Lakshmi Mittal
14:00 / 10.00 “Balance sheet and capital allocation” Aditya Mittal14:30 / 10.30 Q&A
15:15 / 11:15 - Break for 15 mins -
15:30 / 11:30 “Creating value from our Mining franchise” Peter Kukielski
16:00 / 12:00 “Protecting and growing our Automotive franchise” Brian Aranha
16:30 / 12:30 - Break for 15 mins -
16:45 / 12:45 “AACIS – Focussing on improvement” Gonzalo Urquijo17:15 / 13:15 “Enhancing our competitive position” Lou Schorsch
17:45 / 13:45 - Close -
2
231
780
242
570
898
29
Non Steel
EBITDA 2012
Forex One time
items**
8
PCSVolEBITDA 2009
AACIS challenges
3
Focus is to improve competitivenessFocus is to improve competitiveness
* EBITDA/tonne figures for 2012 shown excluding gain on Paul Wurth divestment of $242 million ** Relates to gain on Paul Wurth investment
26
9986
76
2010 2011 2012*2009
AACIS Steel EBITDA*/tonne (US$/t)
• Continue improving safety performance
• Address operational instability issues
• Address cost issues in captive mines
• Improve productivity and energy utilization
• Improved supply to freight friendly markets
• Manpower optimization and Employee retention/development
EBITDA* bridge between 2009-2012 ($mn)
Costs have increased
significantly
11%
Energy and fuel
6%25%
19%
Manpower costs
Other fixed costs
Purchased raw material
19%Other costs
Captive raw material
19%
Breakdown of cost increase 2009-2012Inflation
Improvement in safety performanceAMSA 2010 2011 2012
LTIFR 1.57 1.24 0.58
Severity Rate 0.07 0.04 0.02
Absenteeism Rate 1.38 0.96 1.32
• Best results ever with 53% reduction in LTIFR • To maintain & improve current shop floor practices• Higher focus on contractor management
AMKR 2010 2011 2012
LTIFR 0.76 0.53 0.51
Severity Rate 0.06 0.04 0.04
Absenteeism Rate 5.27 4.53 4.08
AMT 2010 2011 2012
LTIFR 0.36 0.17 0.44
Severity Rate 0.02 0.02 0.03
Absenteeism Rate 4.27 3.53 3.22
• Performance deteriorated due to Sinter Plant Accident in 2012 and higher LTIs
• Target to achieve next level on total compliance with all global standards
• Higher focus on contractor management
AACIS 2010 2011 2012
LTIFR* 0.92 0.68 0.51
Severity Rate** 0.05 0.04 0.03
Absenteeism Rate*** 4.10 3.39 3.19
• 25% improvement in LTIFR vs last year• Continue focus on shop floor & plant audits • Target for FPS next level in all units • Focus on contractor management and training
• 2012 performance same level as 2011
• Target to achieve next level of FPS standard
• HIRA procedures to be further improved• Focus on reduction of Absenteeism rate
* (LTIFR) Lost time injury frequency defined as Lost time Injuries per 1.000.000 worked hours; based on own personnel and contractors** Severity rate defined as number of days lost for LTI per 1.000.000 worked hours***Absenteeism rate defined as total illness/leave lost time hours as a % of theoretical available work hours; FPS: Fatality prevention standards 4
Safety is the No.1 priority - AACIS has shown sustai ned improvement in safetySafety is the No.1 priority - AACIS has shown sustai ned improvement in safety
AACIS operational overview
• 6 production facilities in 3 business units:
• ArcelorMittal South Africa in South Africa (4 locations)
• ArcelorMittal Kriviy Rih in Ukraine
• ArcelorMittal Temirtau in Kazakhstan
• Segment produces flat and long products
+0.9
2012
14.3
2011
14.6
2010
14.9
2009
13.4
+1.1
2012
12.8
2011
12.5
2010
13.3
2009
11.8
+2.59.7
2010
10.8
2011
10.1
20122009
7.6
2010
-0.61.10.9
20112009
0.3
2012*
1.2
Revenue (US$ billions)
EBITDA (US$ billions)
52012 was impacted by declining raw material prices and competition in CIS2012 was impacted by declining raw material prices and competition in CIS
Crude steel production (million tonnes)
Steel shipments (million tonnes)
* EBITDA figures for 2012 shown excluding gain on Paul Wurth divestment of $242 million
6
CIS finished steel demand (million tonnes)*
CAGR
CIS net trade - exports (million tonnes)*
CIS market outlook
• GDP in the CIS region forecast to continue growing strongly through 2018 averaging 4.3% per annum
• CIS steel consumption peaked in mid 1980s at over 110 million tonnes before falling sharply after 1990-driven by a fall in vehicle manufacturing and industrial machinery
• Domestic finished steel consumption in the CIS region is expected to grow on average at a rate of 4.2% pa up to approximately 72 million tonnes in 2018
• Steel production in the region is expected to remain above demand levels until 2018 with oversupply being exported mainly to MENA, Europe and South-East Asia regions (40 million tonnes expected in 2018)
• Even though CIS profitability is expected to remain positive, margins can be challenged in the near future if international raw material prices erode and domestic costs, such as freight, labor and energy inflate further
7259
50
+3.4%
+4.2%
404349
201820132008
20132008 2018
CIS market outlook
* ArcelorMittal estimates
7
• Projected GDP growth in the Middle East and North Africa region, averaging 4.1% per annum, indicates a limited impact of the economic crisis on the regional economies
• Strong steel demand growth in the MENA region expected to add nearly 19 million tonnes of new steel demand through 2018. Although about 80% of this new demand is expected to be in the Middle East, North Africa has a large upside in the longer term due to its low steel intensity
• New capacity to be added in the region until 2018 is expected to only marginally reduce the requirement for imports – resulting in about 37 million tonnes of imports by 2018 compared to 48 million tonnes in 2008
Middle East & North Africa (MENA)market outlook
* ArcelorMittal estimates
MENA finished steel demand (million tonnes)*
MENA net trade – imports (million tonnes)*
9071
61
+4.9%
+3.1%
201820132008
CAGR
374348
201820132008
MENA market outlook
8
Sub-Sahara Africa finished steel demand(million tonnes)*
CAGR
Sub Sahara Africa market outlook
• Robust GDP growth in most of Sub-Sahara Africa, averaging more than 5% per annum, is expected to continue till 2018
• Finished steel demand in the region is expected to grow at average rate of 5.5% per annum and reach approximately 19 million tonnes in 2018
• Steel production in the region is expected to remain below demand levels with imports reaching 10 million tonnes in 2018
+3.3%
+5.5%
20182013
20132008 2018
Sub-Sahara Africa market outlook
* ArcelorMittal estimates
Sub-Sahara Africa net trade – imports(million tonnes)*
2008
ArcelorMittal South Africa (AMSA)
Overview• The largest steelmaker in South Africa producing
both flat and long products• Four production units located in Newcastle,
Vanderbijlpark, Saldanha and Vereeniging• Additional coke and chemical business in Pretoria
Main advantages• Iron ore available at contracted terms• World class manufacturing facilities• Core markets with growth potential (South Africa
and sub-saharan Africa)• Diversified product portfolio with good domestic
market share
Challenges• Maintain competitiveness against high inflation
and weak international raw material prices• Increasing energy prices, freight rates, labour and
tightening environmental legislation • Continue improved operational performance
Vanderbijlpark
Newcastle
9
AMSA industrial performance
10
Major achievements 2012
• Saldanha was one of the lowest cost producer in the group
• Improved management gains � better availability and quality performance of rolling mills in Vanderbijlpark (lower non prime ratio)
• Progressive increase of DRI in BF at Vanderbijlpark reducing coke rate
• Adapting footprint to align capacity with domestic and freight friendly markets
• EAF shutdown in Vanderbijlpark• Implementation of profit management process in all
AMSA sites• 60% dust emission reduction in Gauteng area in
last 5 years
5.1 5.5 5.3 4.9
-6%
2009 201220112010
ArcelorMittal South Africa crude steel production (million tonnes)
Ongoing strategic priorities:
� Operational stability � High capacity utilization through further footprint optimization � Deliver productivity and cost improvement� Capex primarily focused on upcoming blast furnace reline in Newcastle in 2014 and environmental
compliance projects
Adapted as per market condition
AMSA commercial performance
11
ArcelorMittal South Africa product range
7%
11%
10%6%
49%13%
CRC
Billets + rebars
Tin plate
HRC
Sections
Wire rods
HDG/EG+Organic coating
4%
27%
73%
Domestic Market
Export Market
ArcelorMittal South Africa markets
Performance 2012
• Recovery of domestic market share• Increased sales to Africa overland through
systematic market development (freight friendly)• Good customer service performance in domestic
and export markets
Ongoing strategic priorities:
� Further improvement in quality and customer service
� Defend domestic market share and grow in Africa overland
� Product development in line with market demand� Upcoming opportunities from infrastructure
projects
ArcelorMittal Kriviy Rih (AMKR)
Overview• Largest producer of long rolled products
including rebar and wire rods among the CIS countries
• 2012 production of 6.4 million tonnes
Main advantages• 100% self sufficiency in iron ore• Core markets with growth potential (Ukraine,
CIS, Russia, Iraq, Near East, Turkey)• Access close to European and CIS markets
through well developed rail lines and close proximity to the Black Sea ports
Challenges• Maintain competitiveness against high inflation
and weak international raw material prices• Intensified competition and new capacities• Increasing energy prices, labor cost and freight
rates• Continue improving operational performance
Blast Furnace 9
Blooming 1 – Soaking pits bay
12
AMKR industrial performance
13
Major achievements 2012
• Turnaround in operational performance:• 13% improvement in crude steel
production vs 2011• Record production level in last 5 years
• New billet caster to enhance product capability (designed capacity achieved)
• Improved management gain performance• Improvement in logistics management
6.1 5.7 6.45.0
+13%
2012201120102009
ArcelorMittal Kriviy Rih crude steel production (million tonnes)
Ongoing strategic priorities:
� Maintain operational stability with improved efficiencies� Footprint optimization whilst maintaining current production level� Rebuild coke oven battery to maintain self sufficiency level� Deployment of best practices regarding maintenance and World Class Manufacturing� Capex focused on upcoming blast furnace reline and ecology projects
Turnaround with new organization
AMKR commercial performance
14
ArcelorMittal Kriviy Rih product range
5%
25%
49%
22%
Wire Rod
Sections
Billets
Rebar
66%
20%
14%
Export Market
CIS Market
Domestic Market
ArcelorMittal Kriviy Rih markets
Performance 2012
• Maintained domestic market share• Strengthening position within other markets in
the CIS region• Good customer service performance through
improved order turnaround time• Improved supply to freight friendly markets• Expansion of customer base
Ongoing strategic priorities:
� Continue improving supply in core and strategic markets (freight friendly markets)
� Further improvement in quality and customer service
� Value creation through topline initiatives and product development
ArcelorMittal Temirtau (AMT)Overview• The largest steelmaker in Kazakhstan• Producer of flat and long products• 2012 crude steel production of 2.9 million tonnes
Main advantages• 100% self-sufficient in coal, 75% in iron ore and
60% in electricity• Low cost steel production• Core markets with growth potential (Kazakhstan,
Russia and other CIS)• Flexibility of producing flat and long products• Caspian sea port (Aktau): Access to regional
markets
Challenges• Maintain competitiveness against high inflation
and weak international raw material prices• Increasing freight rates and labor cost• Regain operational stability• Deploy best practices in maintenance
Blast Furnace 4
New Billet Caster
15
AMT industrial performance
16
Major achievements 2012
• BF2 major reline with best in class technology• Startup of new billet caster with improving
performance• Setting up of new oxygen plant - near completion• Breakthrough in maximum use of low cost, low Fe
iron ore• Successful repair of downstream facilities
2.9
3.63.33.3
2012201120102009
-19%
ArcelorMittal Temirtau crude steel production (million tonnes)
Ongoing strategic priorities:
� Recover operational stability� Deliver productivity and cost improvement� Deliver energy improvement targets (boiler performance, internal gas utilization)� Capex primarily focused on blast furnace reline, assets reliability and ecology compliance projects
Mainly due to Sinter plant accident, BF and BOF issues
AMT commercial performance
17
ArcelorMittal Temirtau product range
Coated Products 23%
Cold Rolled
2%
Others
13%
Billet and Rebar
22%
Hot Rolled40%
40%
Domestic Market
23%Other CIS Markets
37%
Export Market
ArcelorMittal Temirtau markets
Performance 2012
• Good acceptance of newly launched long products (offers more flexibility)
• Improved supply to freight friendly markets• Coated products size range expanded• Better customer service
Ongoing strategic priorities:
� Improve CIS market share with increased supply in freight friendly markets
� Increase in long market share� Continue improvement in quality and customer
service� Deliver against top line initiatives and product
development
Productivity and skill development
18
21.5 20.5 19.9 18.7
32.1 29.8 27.4 25.7
9.9 10.0 10.69.2
-7%
2012
53.7
2011
57.8
2010
60.3
2009
63.4
-16%ArcelorMittal AACIS FTE* (in thousands)
Human resource focus:
� Continue productivity improvements and enhancement of competitiveness through workforce optimization i.e. reducing and flexibilizing external labor
� Improvement of staff engagement in challenging employee retention market� Building partnership with trade unions� Skills building through graduate recruitment initiatives and tailored management training
* FTE: Full time equivalent** TCOE: Total cost of employment
TermirtauKriviy RihSouth Africa
Productivity, competitiveness and skill development initiatives in 2012
• Workforce optimization to improve productivity, in line with changed footprint
• Optimum level of contractors. Assure efficient supply contracts
• Maintain/reduce TCOE** with good labour relations dialogue
• Continue efforts on training and development• Development of functional skills through
tailored future leaders programs
Recap
19
• Safety as priority no 1
• Operational reliability and excellence through deployment of best operational practices and better maintenance program
• Potential challenge from raw material price decrease
• Productivity improvement and improved energy utilizatio n
• Maintain good labor relation dialogue
• Improved supply to freight friendly markets
• Value gain through topline initiatives, product development and better customer service
• Employee retention and development through training and graduate recruitment programs
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