Creating a sustainable European business Aditya Mittal, CEO ArcelorMittal Europe and Group CFO

ArcelorMittal Europe 2015 press event 5 October 2015

Steel industry‟s differentiating factors

• Local markets structure counts key regional markets have

consolidated

• Steel is not a homogenous commodity but a vast range of

products with varying degrees of technicality

• Steel consumers value (and reward) service, quality and innovation

• Zero incentive to build new capacity value of installed capacity

will increase with demand

Steel presents a differentiated opportunity to pure “commodity” metals

1

ArcelorMittal is the industry leader

• Safety is the No1 priority

• Steel is the primary driver of profitability

• Supported by a sustainable iron ore business

• Developed markets are core

• Capacity to capitalise on demand recovery

• Optimised asset base in Europe…

… with developing plans for the US

• Primary position in global automotive

• Balance sheet repositioned

ArcelorMittal positioned to benefit from demand recovery and own actions

2

Europe & NAFTA

Rest of World

Steel shipments 2014

Continued improvement in safety

• LTIF rate showing clear downward trend. Q2

2015 our best ever at 0.68

• Our effort to improve the group‟s Health and

Safety record will continue

• Reinforcing the implementation of our fatality

prevention standards, conducting more pro-

active assessments of risks and hazards and

intensifying our efforts to instil a safety culture

among our contractors remain proprieties for

2015.

• Of 366 sites reporting to the WSA, 107 had

no LTIs in 2014 (29.7%). For ArcelorMittal

this figure was 93 out of 192 sites (48.4%)

Our goal is to be the safest metals and mining company

3

Health & Safety Lost time injury

frequency (LTIF) rate*

Mining & steel, employees and contractors

* LTIF = Lost time injury frequency defined as Lost Time Injuries per 1,000,000 worked hours; based on own personnel and contractors

0

0.5

1

1.5

2

2.5

3

3.5

ArcelorMittal Europe today

4 Europe’s leading metals and mining company

4

39,552, 47%

21,162, 25%

10,037, 12%

8,268, 10%

4,970, 6%

Europe

NAFTA

Brazil

ACIS

Mining

2014 Group revenue

by segment - $mn

2,304, 32%

1,206, 17%

1,845, 25%

620, 8%

1,331, 18%

Europe

NAFTA

Brazil

ACIS

Mining

2014 Group EBITDA

by segment - $mn

• 100,000 employees, across 400 sites, with

an industrial footprint in 17 countries

• Delivers technically sophisticated products

to sectors including automotive,

construction, infrastructure, home

appliances, transport, energy and packaging

• Significantly improved financial performance

since the Euro crisis; today, the most

profitable segment within the group‟s

portfolio

• Re-orientated operating profile with a focus

on coastal primary steelmaking facilities and

inland located finishing facilities / centres of

excellence

• Total investment of nearly €5bn since 2010,

demonstrating our commitment to Europe

Austria

Czech

Republic

France

Belgium

Netherlands

Germany

Luxembourg

Poland

United

Kingdom

Spain Portugal

Italy

Hungary Romania

Sweden

Slovakia

Serbia Bulgaria

Croatia

Turkey

Switzerland

Russia

Bosnia

Herz.

Morocco

Denmark

Norway

Finland

Estonia

Greece

Macedonia

Mills

Sales

R&D

Latvia

Lithuania

Cyprus

Montenegro

Albania

Slovenia

ArcelorMittal Europe – Our footprint

5

Flat Products:

• 39 production sites in 11 countries

• 62,000 employees

• 27m t shipments

Long Products:

• 23 production sites in 10 countries

• 10,700 employees

• 12m t shipments

DistributionSolutions:

• 300 sites in more than 30 countries

• 15,000 employees

• 10m t shipments

• Principle was to maintain market share whilst orientating capacity to most competitive sites

• Focus on “core assets” to ensure lowest cost footprint achieved

• Savings from higher asset utilisation and through fixed cost removal

Lower variable cost

Lower and more stable working capital requirements

Better service and quality

Reduce capex requirements

• >$1bn savings achieved through European footprint optimisation

6

Footprint optimisation has

delivered results

European asset optimisation yielded $1 billion cost savings

1,163

893

696

Improving spreads are translating into improving profitability

ArcelorMittal Europe EBITDA (€mn)

1,730

1,227

+41%

2014 2013 1H

2014

1H

2013

1H

2015

+67%

7

Profitability has improved

EU28 Apparent steel consumption (Mt)

Steel demand in Europe is recovering but remains well below pre-crisis levels

144

148

146

150

142

0

2013 2014 2015F

+6%

Demand has improved

8

2012 2013 2014 2015 2016 2017 2018

150

155

145

0

160

140

April 2013 forecast

April 2015 forecast

EU28 Medium term ASC forecast

European market recovery to continue...

9

Capacity to capture share of continued demand recovery in European markets

• The economic recovery in Europe is broadening

driven by quantitative easing, the weak Euro, low oil

prices, improving confidence and credit conditions:

– Strengthening wage growth and rising employment is feeding through into consumer spending

– Credit conditions are also beginning to improve which should help business investment pickup

• Positive indicators:

– EU28 manufacturing output has reached its highest level since 2008, and we saw a 12 month high in the Eurozone Manufacturing PMI in June

– New car registrations in the EU28 countries rose to 13.4 million seasonally adjusted annual rate (SAAR) in the Q2 2015, the highest level for four years

– We also saw construction output grow last year (up 2.8 per cent y-o-y), and we are now beginning to see further growth after a relatively weak start to the year

• We forecast ASC growth in Europe for 2015 of

between +1.5 and 2.5%

…but unrealistic to expect demand

to return to pre-crisis levels

EU Apparent steel consumption, million tonnes

Source: ArcelorMittal

100

120

140

160

180

200

1980 1985 1990 1995 2000 2005 2010 2015

10

• The 2007 pre-crisis peak of ~200Mt in EU28

ASC is misleading as it was inflated by an

unsustainable bubble/ consumption boom.

Instead, average ASC 1995-2005 provides

a more realistic baseline for comparison.

• Italy, Spain and other now-vulnerable

Eurozone economies saw ASC grow rapidly

after the creation of the euro in 1999. it then

jumped even higher in 2006/7, fed by an

unsustainable consumption boom.

• Germany and EU countries in Eastern

Europe experience particularly strong

demand in 2006/7 on top of more sustainable

demand growth, with ASC post-crisis

recovering to this underlying trend.

• The UK, France, Nordics and Benelux

countries did not see particularly strong

demand growth or much of a bubble pre-

crisis, however they were still hit by the crisis

and their ASC is still well below pre-crisis

levels.

• We are committed to further enhancing our position in Europe

• We continue to invest in people and hire talent – we estimate that we will hire about 1200 people in Europe over each of the next three years.

• Ongoing investment programme focussed on:

– Further strengthening our position in high, value-added product sectors

– Significant investment focus on sustainability and environmental improvements

• A commitment to innovation; Europe is the centre of our global R&D operations

11

Strategy to protect and grow our

European business

Proactive action to ensure a sustainable, profitable European business

12

Almost €5bn of investments

in Europe since 2010

Targeted investment programme to strengthen position in high-value added

product sectors and deliver environmental improvement

19%

41%

37%

3%

Safety, Health & EnvironmentGrowthRenewalsOther

ArcelorMittal Europe total CAPEX

cash out 2010 – 2015

Belgium

• ArcelorMittal Gent €140m investment to enable production of 3rd Generation AHSS, Fortiform®,

Czech Republic

• €74m environmental investment in sinter plant, blast furnace and coke plant to reduce dust

emissions

• €55m investment in a new fluidised bed boiler, significantly increasing efficiency and reducing

emissions

France

• €180m investment plan in Lorraine - approx. €150m already invested – which facilitated the

switch in focus from primary steelmaking to high value added automotive focused end products

• €54m investment in coke plant at Fos-sur-Mer

Germany

• €135m investment in new wire rod mill in Duisburg for production of high quality wire rod for

auto industry and mechanical engineering

Luxembourg

• €35m - upgrade to Belval rolling mill to facilitate production of extra-wide sheet piles

Poland

• €130m investment to reline blast furnace #5, expand capacity of hot rolling mill capacity and hot

dip galvanising and modernise BOF. €37m rail mill upgrade

Romania

• €100m investment to revamp blast furnace in order to improve energy efficiency

Spain

• In excess of €100m for reconstruction of Gijon coke plant

Canada

Hamilton

USA

East Chicago

France

Gandrange

Le Creusot

Maizières

Montataire

Forbach (*)

Spain

Asturias

Basque Country

Luxembourg

Esch-sur-Alzette

Belgium

Gent

Liège (*)

Czech

Republic

Ostrava

(*) Strategic partner

- Forbach: CPM

- Liège: CRM

Canada, USA Spain, France, Germany, Italy China, South Korea, Japan

On-site product-portfolio deployment: Product Development Engineers

Automotive Residents, Process Development & Deployment Specialists

Over half of the Group‟s R&D facilities

are located in Europe…

Brazil

Tubarão

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…delivering value in Europe

and beyond

Research & Development core objectives:

• Develop innovative, value-added steel solutions for all markets we supply

• Contribute with solutions for improving company sustainability

• Explore the latest technological trends and emerging breakthrough technologies and apply group-wide in order to deliver environmental, reliability, resource efficiency and safety improvements

Selected project highlights:

• Development of a wide range of advanced high strength steels for the automotive industry:

Usibor ®

, Ductibor ®

, Fortiform ®

• Development of thin-gauge packaging products / solutions and chrome-free surface treatment

• Development of a universal solar steel roofing envelope that actively generates energy: Phoster

project

• Development of a range of environmental and process improvement solutions in areas including

energy consumption, water usage and air emissions (dust emissions reduce by 24% since 2010)

• Innovative low cost solutions that meet all EU regulations for blast furnace discharge waters

• Ongoing work on the re-use of residues from the steelmaking process, and turning waste into re-

usable by-products; 81% of steel production residues re-used in 2014

• Development of innovative control techniques to reduce energy consumption in reheat furnaces

by 5%

14

15

• For more than 20 years, weight saving

solutions have been developed through

the regular increase of tensile strength of

Advanced High Strength Steels

• Increase of strength is generally at the

expense of formability (complex shapes)

• ArcelorMittal has developed two ways to

change the game:

• Usibor® and Ductibor® hot stamping

solutions

• Fortiform® for cold stamping with

outstanding combination of formability

and strength Part stamped with Fortiform®

Steel can provide the weight reduction required to meet the most challenging fuel economy standards

The value of R&D: Next generation

steels for the automotive industry

15

16

• In all Insurance Institute of

Highway Safety crash

tests, the all-new Volvo

XC90 received its highest

possible rating, „good‟, and

its „Top Safety Pick+‟

award. It excelled in both

preventative and protective

safety performance.

• This vehicle contains the

highest percentage of

Usibor in its structure of

any vehicle, globally

• Let‟s see how it behaved in

that crash test….

Award winning innovation delivers

significant customer value

17

18

Challenges – Chinese Imports

EU28 Finished Steel Imports from China - mt

Chinese imports at record levels; anti-dumping cases offer market support

7.5

6.6

3.7

+103%

2015* 2014 2013

* Total volumes from January to July annualised; Source: CCM, NBS, ArcelorMittal Corporate Strategy analysis

• Current ETS system as it is proposed will not reduce global emissions

from steel, but merely shift steel production to non EU regions

– Needs to be a realistic EU emissions benchmark

– EU proposal based on best available technology is wholly unrealistic

– Incentives required to drive innovation across the steel industry that encourage

steelmakers reduce emissions

• We need a global approach to CO2 reductions; without a global approach

there is a serious risk of the European steel industry becoming

uncompetitive and unsustainable

• We believe it is also important to take into account life-cycle analysis in

the application of any tax

• Our hope is that realistic carbon emissions targets emerge from COP 21

that ensure a fair and level playing field

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Challenges – EU ETS

ETS system as it is proposed will not reduce global emissions from steel, but merely

shift steel production to non EU regions

• ArcelorMittal is the global, and European, leader in differentiated, value-

added steel solutions

• The actions that we have taken in addressing our European footprint and

investing to capture future demand trends has led to the European

segment being the most profitable within the ArcelorMittal group

• The scale of our investment programme – and our R&D focus -

demonstrates our commitment to Europe

• We believe the EU economic recovery is broadening, and are well placed

to capture the growth in demand for steel that should result

• The demand recovery is driving improved steel spreads and profitability

• And finally before I finish, an important announcement…

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Conclusion

Introducing the annual ArcelorMittal

award for innovation in France:

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• ArcelorMittal makes a major contribution to the French economy

• Steel manufacturing, R&D, product innovation (eg Usibor)

• To highlight ArcelorMittal‟s contribution to the future of French industry

Why?

How?

When?

€? • €1m over 5 years

• €50,000 for best innovative project in each field

• Based on French State initiative „Innovation 2030‟

• Focus in first year on a) energy storage and b) big data

• Aimed at individual or group young entrepreneurs / students (<30yrs)

• Jury: Representatives from ArcelorMittal, Lorraine local authority,

universities / schools, media

• Launch today

• Entries in by 31st December

• Awards ceremony in Lorraine April 2016

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Q&A