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  • 1Q 2013 Results

    10 May 2013 Lakshmi N Mittal, Chairman and Chief Executive Officer Aditya Mittal, Chief Financial Officer

  • 1

    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 ArcelorMittals management believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of ArcelorMittals 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 ArcelorMittals 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.

  • 2

    Agenda

    Results overview and recent developments

    Market outlook

    Results analysis

    Outlook and guidance

  • 3

    Continued improvement in safety

    Health and safety performance improved with Lost Time Injury Frequency Rate of 1.0x in 1Q13.

    Improvements in performance in Flat Carbon Americas partially offset by deterioration in the Mining division. All other segment performance remained relatively constant quarter on quarter.

    Governance, people, community and sustainability initiatives

    For the 6th consecutive year, ArcelorMittal USA has been awarded the 2013 ENERGY STAR by the U.S. Environmental Protection Agency (EPA), for its sustained efforts in energy efficiency improvement. Best practice applications and targeted investments helped achieve an annual 1.87% reduction in energy intensity during 2012.

    ArcelorMittal Florange, France, launched the worlds first production line for Usibor extra-wide sheets up to 1,850mm. Usibor steel meets in a cost effective way the automotive customer requirements to reduce the weight of vehicles, thus cutting tailpipe emissions and CO2 in particular, whilst also improving their safety performance in use.

    ArcelorMittal was presented gold class within the steel sector in the 2013 RobecoSAM Sustainability Yearbook. This annual assessment benchmarks the performance of the worlds largest 2,500 companies in ethics, the environment and social areas. It is also the basis for the Dow Jones Sustainability Index (DJSI).

    In April 2013, ArcelorMittal hosted its 7th annual Health and Safety Day at its sites globally. The theme, Stop, think and act safely, is continued this year to reflect the importance of this message.

    Quarterly Health & Safety frequency rate* for mining & steel

    Health and safety performance with LTIF rate of 0.9x in 1Q13 and 1.1x in 4Q12

    The Companys effort to improve the groups Health and Safety record will continue.

    Whilst the LTIF target of 1.0x is maintained for 2013, the Company is focused on further reducing the rate of severe injuries and fatality prevention

    Our goal is to be the safest Metals & Mining company * WSA: LTIF = Lost time injury frequency defined as Lost Time Injuries per 1.000.000 worked hours; based on own personnel and contractors

    2013 Target

    0.91.01.4

    1.81.9

    2.5

    3.1

    1.0

    2011 2010 2009 2008 2007 2012 1Q 2013

  • 4

    1Q 2013 highlights EBITDA of $1.6bn in 1Q13 compared to $1.6bn in 4Q12* Steel shipments of 20.9Mt, an increase of 4.7% vs. 4Q12 Own iron ore production 13.1Mt; 7.3Mt of iron ore shipped at market price compared to

    6.8Mt in 1Q12 (on track for ~20% growth in 2013) Net debt at end of 1Q13 of $18bn as compared to $21.8bn at end of 4Q12 Liquidity of $18bn at end of 1Q13 and average debt maturity of 6.0 years Cost improvement: $1bn asset optimization savings run-rate target achieved; $0.2bn

    management gains achieved during 1Q13, inline with the new plan to achieve $3bn of improvement by the end of 2015

    Sequential improvement in underlying EBITDA and significant net debt reduction * On January 1, 2013, in accordance with IFRS as issued by the international Accounting Standards Board, ArcelorMittal adopted IFRS 10 (Consolidated Financial Statements), IFRS 11 (Joint Arrangements), IFRS 12 (Disclosure of Interests in Other Entities), IFRS 13 (Fair Value Measurement), the revision of IAS 19 (Employee Benefits) and IFRIC 20 (Stripping Costs in the Production Phase of a Surface Mine). 2012 information has been adjusted retrospectively for the mandatory adoption of these new standards and interpretations except for IFRS 13 which is applied prospectively. The impact on 4Q 2012 was $234 million, including the reversal of the $110 million charge relating to the recognition of additional actuarial losses which is now recognised through equity under IAS 19. EBITDA 4Q 2012 included $0.5 billion of gains from asset disposal and CO2 credit sales. EBITDA in 1Q 2013 was positively impacted by a $47 million fair valuation gain relating to the acquisition of an additional ownership interest DJ Galvanizing in Canada.

  • 18.021.8

    24.9

    0

    5

    10

    15

    20

    25

    Deleveraging process on course

    On track to meet interim target of ~$17 billion net debt by mid-year 2013

    Net debt progression $billion

    Medium term target

    15

    2Q13F

    ~17

    1Q13 4Q12 3Q11

    * Ratio of Net debt/LTM EBITDA is based on last twelve months reported EBITDA. Figures based on recast EBITDA as per new accounting standards adopted.

    Net debt/LTM EBITDA* 2.8x 2.5x

    5

    2.3x

  • Asset Optimization delivering

    Including residual costs, the targeted run-rate savings of $1bn has been achieved

    Residual costs should disappear from the system by 2014

    Savings apparent in improved reported results

    6

    Asset Optimization savings achieved ($ million)

    Targeted $1bn savings run rate achieved; traction apparent in improved results

    2Q1

    2

    3Q1

    2

    4Q1

    2

    1Q1

    3

    4Q1

    1

    1Q1

    2

    Run Rate-Savings Residual Costs

    4Q 2011 Extended idling of electric arc furnace in Madrid Restructuring costs at certain other Spanish, Czech

    Republic and AMDS operations

    1Q 2012 Extended idling of electric arc furnace and

    continuous caster at the Schifflange site (Luxembourg)

    Further optimization in Poland and Spain

    4Q 2012 Closure of 2 blast furnaces, sinter plant, steel shop

    and continuous casters in Liege, Belgium decided Long term idling of liquid phase at the Florange site

    announced

    1Q 2013 Announced intention to permanently close the

    coke plant and six finishing lines in Liege, Belgium

    Mothballing Florange

    Essential components have been announced:

  • Gap analysis completed in 2012 defined the priorities for 2013-2015 plan

    Gap Analysis for Cost Savings by Process

    34%

    25%

    20%

    10%

    11% Sinter & BF

    Steel shop

    Hot strip mill

    Cold rolling mill & HDG

    Others

    7

    Gap Analysis for Cost Savings per Main Drivers

    Yield

    Productivity

    Others

    Energy

    29%

    22% 21%

    28%

    0.8

    2.0

    3.0

    2.0

    2013F 2014F

    3.0

    1.0

    0.2

    2015F

    New $3bn management gains program ($ billion) Annualized savings

    1Q 13 achieved Savings targets

    Bottom up plan across the group 2/3 variable cost and 1/3 fixed cost focussed Improvements in reliability, fuel rate, yield, productivity etc Business units plans rolled out and key personnel

    accountable for delivery Leveraging extensive benchmarking opportunities within

    the group

    Cost improvement underway

  • 8

    CA

    PAC

    ITY

    * Includes consideration from JV partner (Nunavut Iron Ore) for additional equity stake increase from 30% to 50%.

    Growth plan remains on track for 84MT capacity by 2015 Iron ore growth target on track 84MT capacity by 2015

    Liberia Phase 2 project underway (to expand capacity from 4Mt

    DSO to 15Mt premium concentrate) All major equipment procurement complete Civil works at the port are advancing and will be

    completed this year; camp preparation, access roads and environmental control dams near completion

    Phase 1 achieved record shipments in March 2013. AMMC Capacity expansion from 16Mt to 24Mt All electrical rooms are energised, final installation and

    pre-operational verification checks in progress First concentrate due in June 2013 from new Line 7;

    optimization and ramp-up on track Baffinland Early Revenue Phase approved to haul 3.5Mtpa of DSO

    by truck from the mi

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