alexandra henze - arcelormittal - managing key strategic challenges for a sustainable future

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Managing key strategic challenges for a sustainable futureAlexandra Henze – Corporate Strategy

IMM EU Iron OreOctober 2nd, 2014

1

Disclaimer

9th Annual EU IRON ORE

Forward-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’sAnnual Report on Form 20-F for the year ended December 31, 2013 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/.

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Agenda


• Historical context

• Outlook reflecting challenges, uncertainties and risks

• ArcelorMittal’s strategic response

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Steel consumption growth over the past decade has been driven by China and other Developing markets; Developed world demand remains far below its peak

138 170 206 259 295 333 393 441 453565 612 667 688 735

234 248256

270307

322357

399 399

352407

436 457474

467 431440

439

473454

493

492 469 309

391

413403

401

839 849902

968

1075 1109

12431332 1321

1226

1410

1516 15481609

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

17.2%

Crude steel consumption by region(million tonnes)

China

8.2%

2.2%

CAGR ’01-’07

9.0%

2.8%

-4.0%

CAGR ’07-’13

* EU15, US, Canada, Japan, South Korea, Taiwan, Australia and New ZealandSources: Worldsteel; ArcelorMittal Corporate Strategy analysis

Developed world*

Developing world

5.2% CAGR5.2% CAGR 7.8% 2.9%


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Steel demand growth rates in China have trended downChina annual GDP growth rate (%)

Sources: Havor, ArcelorMittal Corporate Strategy analysis9th Annual EU IRON ORE

China annual growth rates of GDP and ASC (apparent crude steel consumption), (%)

7.5%

11.3%

12.7%

14.2%

9.6%9.2%

10.5%

7.0%

9.3%

7.8% 7.7%7.3%

11thplan

2005 2006 2007 2008 2009 2010 12thplan

2011 2012 2013 2014F0.0

5.0

10.0

15.0

20.0

25.0

30.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2001 2002 2003 2004 2005 2006 2007 '08/09 2010 2011 2012 201320143F

Ratio ASC/GDP Growth (LHS)

ASC growth (RHS)

Real GDP growth (RHS)

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The ex-China BRICS have disappointed in terms of growth after a strong recovery

Sources: Global Insight; ArcelorMittal Corporate Strategy analysis9th Annual EU IRON ORE

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0Sep'10

Sep'11

Sep'12

Sep'13

Sep'14

BRICS ex-China - evolution of GDP growth projection and actuals (%)

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Apparent steel consumption (Finished, 2007 = 100)

Sources: Haver Analytics, US Bureau of Labor Statistics, Eurostat, Haver Analytics, Federal Reserve Board, European Central Bank

Stronger steel demand recovery in NAFTA compared to Europe


50

60

70

80

90

100

110

120

130

140

150

160

170

180

2007 2008 2009 2010 2011 2012 2013 2014f

China +74%

Other Europe +25%Asia ex-China +13%

NAFTA -5%

EU28 -29%

World +26%

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Start of declining raw material prices after period of high prices driven by tight supply1990 -YTD 2014 Raw materials price index (1990 real values***) Indexed at 1990 =100

*1990-2003 McCloskey, 2004-2014 Morgan Stanley **1990-1999 WSD, 2000-2014 SBB (since 2010 it is spot)***Used USA CPI as deflatorSource: Morgan Stanley, Citi group, McCloskey, NSW.gov, Inflationdata.com, WSD, SBB, ArcelorMittal analysis


0

50

100

150

200

250

300

350

400

450

500HCC: Benchmark FOB Australia*

Iron ore: Benchmark FOB Brazil, Vale sinter feed**

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Agenda





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AM delivery weighted PMI*

* Markit. Purchasing Managers indices (PMI) for over 40 countries weighted by share of ArcelorMittal finished steel deliveries in each year.Sources: ArcelorMittal Calculations, Haver Analytics and Markit

PMI indicates continued demand growth


35

40

45

50

55

60

2006 2007 2008 2009 2010 2011 2012 2013 2014

Expansion

Contraction

Global apparent steel consumption (ASC) growth forecast in 2014** (v 2013)

Global 3.0-3.5%

CIS -2.0 to 0%

Brazil -1.0 to 0%

China 3.0-3.5%

EU28 3.0-4.0%

US 5.0-6.0%

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Unemployment rate, percent

Sources: Haver Analytics, US Bureau of Labor Statistics, Eurostat, Haver Analytics, Federal Reserve Board, European Central Bank

Improving labour market and credit conditions are driving growth in the US


4

5

6

7

8

9

10

11

2006 2007 2008 2009 2010 2011 2012 2013 2014

European Union

United States

-10%

-5%

0%

5%

10%

15%

20%

2006 2007 2008 2009 2010 2011 2012 2013 2014

Eurozone

United States

Bank credit to the private sector, percent change year-on-year

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Apparent crude steel consumption, million tonnes(base case)

Sources: Haver Analytics, China National Bureau of Statistics, and China Index Academy - China Real Estate Index System (CREIS)

Building sales are a leading indicator of construction starts in China


-40%

-20%

0%

20%

40%

60%

80%

100%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2009 2010 2011 2012 2013 2014

Commodity buildings sold (+6months lag)Newly started construction (RHS)

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Apparent crude steel consumption, million tonnes(base case)

Sources: ArcelorMittal Corporate Strategy team analysis

Despite declining real estate, other sectors support steel demand growth


2008 2009 2010 2011 2012 2013 2014f 2015f 2016f 2017f 2018f 2019f 2020f

Ship Building

Auto

Light industry

Machinery

Infrastructure

Real estate

Other

7.5% CAGR7.5% CAGR

2.0% CAGR2.0% CAGR

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Infrastructure still far behind the US, implying further potentialKey development parameters China vs USA

* Airport of USA is for paved runways > 1524 to 2437 mSources: China National Bureau of Statistics; Macquarie Research, ArcelorMittal Corporate Strategy


0.70

521

4.3

14.1

23

0.45

469

2.3

11.9

19

0.35

448

1.7

10.7

18

1.45

658

3.9

23

78

Airport transportpassenger carried (bln)

Total road (km per 1000 sqkm)

Subway per 1000 capita(m)

Railway (km per 1000 sqkm)

Urban residential floorspace (m2 per capita)

Absolute levels

USA, 2008

China, 2018f

Per capita/Per land area

China, 2013

252

5298

7.8

142

34.3

238

4798

4.7

129

29.3

197

4308

2.4

103

24.1

1452

6466

1.2

227

23.8

Airport (units)

Total road (thousand km)

Subway (thousand km)

Railway (thousand km)

Urban residential floorspace (billion m2)

*

Equal to 33, 35, 37 m2 per urban

residential

China, 2023f


Global growth has improved, but downside risks remain elevated

Source: ArcelorMittal Corporate Strategy analysis

Elevated Risks

China hard

landing

Energy

price

shock

Eurozone deflation

Emerging Market

structural bottlenecks

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Agenda





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ArcelorMittal Strategy


In steel, capture a leading position in attractive businesses by leveraging our technical capabilities and global scale and scope• Be the supplier of choice for

customers who value distinctive products and services

• Grow in markets with attractive structures

• Minimize costs in commodity businesses to lower risks and capture boom-market potential

In mining, grow a world-class business utilising our financial strength and diverse portfolio of assets and businesses• Invest to expand output at Tier I

and Tier II assets• Optimize the value proposition

associated with our products’ value in use

• Be the supplier of choice for a balanced mix of internal and external customers

• Provide a natural hedge against market volatility and potential oligopolies

A clear licence to operate

The best talent

A strong balance sheet

An effective organisational structure

Active portfoliomanagement

Our strategy is to leverage our distinctive attributes that enable us to achieve a leading position in the most attractive components of the steel value chain

In operations, achieve best-in-class competitiveness by leveraging our technical capabilities and diverse portfolio of assets and businesses• Be the safest• Concentrate production

at the best assets and run them well

• Be cost competitive by benchmarking, sharing best practices, and investing to optimize our multi-site footprint

• Innovate (product/process)

Enablers

17Source: ArcelorMittal Mining

Iron ore strategic objectives

Leveraging infrastructure to bring resources to market and reduce costs


• 10Mt capacity added in 2013• Marketable shipments +22%

• Average iron ore concentrate cash costs maintained in 2013

• Projected to decline in 2014 with increasing volume

• “Stretch” production beyond 84Mt at minimal additional capex

• Opportunities identified at Liberia and AMMC

Marketable iron ore shipments growth (Mt)

29 35

~ +15%+22%

2014F20132012

Iron ore production capacity (Mt)

60 70

84 95

2015F20132012 Stretch

Delivering on volumeDelivering on volume

Delivering on CostDelivering on Cost

Identifying GrowthIdentifying Growth

Reinforced ManagementReinforced Management

• New CEO Bill Scotting• In place since mid 2013

18Source: ArcelorMittal Mining

Liberia growing to 15Mt with further stretch potential


Revised phase 2 project:• Product analysis and additional mine planning have

identified potential to supply 15Mtpa high quality sinter feed at significantly lower cost than concentrate for first 8-10yrs

• Investment capex estimate of circa $1.7 billionStretch opportunity:• Better definition of ore body and mine plan confirmed

potential to continue DSO phase for additional 6 years• Expansion to 20Mtpa capacity*• Incremental investments enable benefits of scale on rail,

port and SGA

15

5

15

5

Stretch

20

Phase 2 -Sinter feed

2014 DSO

DSO (Stretch)

2014 DSO

Phase 2 Sinter feed

Liberia iron ore capacity forecast (MMt)

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AMMC expanded to 24Mt with potential to stretch to 30Mt


1

8 2

2 2

Stretch potential

30

2014F

24

201320132012

15

Concentrator andspirals expansion

complete

Incremental debottlenecking

Potential 6MT expansion -low capex intensity

Potential further debottleneck

Production

Daily records show potential in systemIncremental investments for debottlenecking as requ ired:• Mt Wright mine optimization, Fire Lake expansion (richer ore)

and crusher debottlenecking• Rail winter reclaim capability, long train capability, additional

sidings• Additional conveyor capacity at port• Significant cost benefits from scale• Potential to expand beyond 30Mt at low capital intensity

AM Mines Canada Iron ore production/ capacity (MMt)

Source: ArcelorMittal Mining

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Thank You

IMM EU Iron Ore - Oct 2013

alexandra henze - arcelormittal - managing key strategic challenges for a sustainable future

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