2Q 2014 Results
1 August 2014
Lakshmi N Mittal, Chairman and Chief Executive Officer
Aditya Mittal, Chief Financial Officer
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 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, 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.
1
Agenda
• Results overview and recent developments
• Market outlook
• Results analysis
• Outlook and guidance
2
0.870.850.85
1Q’14 2013 2012
1.0
2011
1.4
2010
1.8
2009
1.9
2008
2.5
2007
3.1
2Q’14
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
Safety focus
Our goal is to be the safest Metals & Mining company
Health and safety performance
• Safety:
• LTIF rate of 0.87x in 2Q’14 vs 0.85x in
1Q’14 and 0.90x in 2Q’13
• The Company’s effort to improve the Group’s
Health and Safety record will continue
• The Company is focused on further reducing
the rate of severe injuries and fatality
prevention
• In 2014, specific attention will be on contractor
performance and on the main causes for fatal
accidents
4
• 9% underlying improvement in EBITDA vs. 2Q’13*
• Steel shipments up 2.5% YoY
• Market-priced iron ore shipments up 28.8% YoY
• Net income of $0.1bn in 2Q’14 vs. net loss of $0.8bn in 2Q’13
• Net debt of $17.4bn at end of June 30, 2014
* EBITDA in 2Q’14 of $1,763 million was negatively impacted by $90 million following the settlement of US antitrust litigation; EBITDA in 1H’13 of $3,265 million included the positive
impact of a $47 million fair valuation gain relating to the acquisition of an additional ownership interest in DJ Galvanizing in Canada and $92 million of DDH income.
.
Improved YoY profitability
2Q’14 EBITDA 9% improvement in underlying performance YoY
(USDm) unless otherwise shown 2Q'14 1Q'14 2Q'13 1H'14 1H'13
Iron ore shipments at market price (Mt) 10.5 9.3 8.2 19.8 15.5
Steel Shipments (Mt) 21.5 21.0 20.9 42.4 41.4
Sales 20,704 19,788 20,197 40,492 39,949
EBITDA 1,763 1,754 1,700 3,517 3,265
Net income / (loss) 52 (205) (780) (153) (1,125)
5
Recap
Profitability of the steel business in developed markets clearly improving
• Steel only EBITDA/t increased $7/t vs. 2Q’13 on underlying basis
• Europe $19/t improvement YoY – benefiting from lower cost and higher volume
• NAFTA $11/t improvement on underlying basis - despite negative costs impact
from severe weather and higher energy cost
• ACIS $6/t improvement – in particular in CIS operations
• Brazil segment lower – impacted by lower volumes and higher fixed costs
Brazil** Europe ACIS NAFTA*
Steel Segment EBITDA per tonne (US$) on underlying basis*
4635
2Q’14 2Q’13
+31% -16%
2Q’14
179
2Q’13
214 6849
+39%
2Q’14 2Q’13
4741
2Q’14 2Q’13
+15%
Steel margin expansion
* Underlying EBITDA in 2Q’14 excludes $90 million relating to settlement of US antitrust litigation ** Brazil includes Brazil and neighbouring countries
10.59.310.39.4
8.2
2Q’14 1Q’14 4Q’13 3Q’13 2Q’13
+29%
Market priced iron ore shipment growth
(million Mt)
Improvement
6
Market priced iron ore shipment growth
2010 – 2014F (million Mt)
352928
25
2013
+15%
2014F 2012 2011 2010
On track to achieve 15% market priced iron ore shipment growth in 2014
• 29% YoY improvement in market priced iron ore shipments; seasonal pickup in 2Q’14 following harsh weather in 1Q’14
• AMMC: Shipping at full capacity
– 24Mt production rate achieved in Dec 2013
– Unit costs benefiting from higher volumes
– 6Mt shipped in 2Q’14 vs. 4.1Mt in 2Q’13
• Liberia: Another strong quarter
– Phase 1: Shipments running at the ~5Mtpa run rate
– Phase 2: Project underway for 15Mtpa premium sinter feed to replace DSO by end of 2015
– 1.3Mt shipped in 2Q’14 vs. 1.2Mt in 2Q’13
Record iron ore volumes
7
• AM/NS Calvert progress update
– Hot mill running at 83% utilization in June
– Integration of ArcelorMittal Tubarao and ArcelorMittal Mexico as
slab suppliers to JV continues with initial slab shipments received
in 2Q’14. Trials in process to qualify these slab sources with our
customers
– Approved on 143 of 163 identified automotive qualification
packages
• VAMA China automotive steel JV
– State-of-the art facility to serve the fast-growing China automotive
industry
– Inauguration of the cold mill complex during 2Q’14; first automotive
coils expected in 2H’14
– Initial capacity of 1.5 million tons expandable up to 2.3 million tons
support ~10% share of the market
Committed to producing innovative steel solutions for our automotive customers
Auto franchise developments
Calvert: Continuous hot-dip galvanising line
8
Global apparent steel consumption (ASC)
growth forecast in 2014** (v 2013)
Source: * Markit. Purchasing managers indices for over 40 countries weighted by share of ArcelorMittal finished steel deliveries. ** ArcelorMittal estimates
ArcelorMittal weighted global manufacturing PMI*
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%
Outlook for core markets in 2014
Improving demand indicators
35
40
45
50
55
60
Jan-0
6
May-0
6
Sep
-06
Jan-0
7
May-0
7
Sep
-07
Jan-0
8
May-0
8
Sep
-08
Jan-0
9
May-0
9
Sep
-09
Jan-1
0
May-1
0
Sep
-10
Jan-1
1
May-1
1
Sep
-11
Jan-1
2
May-1
2
Sep
-12
Jan-1
3
May-1
3
Sep
-13
Jan-1
4
May-1
4
Exp
ansio
nC
ontr
actio
n
(latest data point: Jun’14)
Financial results
10 * Consists of $90 million charge following the settlement of antitrust litigation in the United States
EBITDA bridge from 1Q’14 to 2Q’14
248
753
241
3,413
2,582
61
Q1'11 EBITDA Volume & Mix Selling Price / Cost Non Steel EBITDA* Others** Q2'11 EBITDA
($million)
90
25
131
Others* Underlying
2Q’14
EBITDA
1,853
US
litigation*
2Q’14
EBITDA
1,763
(70)
Non-steel
EBITDA
(8)
Price /
Cost -
Mining
(70)
Volume
& Mix -
Mining
Price /
Cost -
Steel
1
Volume &
Mix - Steel
1Q’14
EBITDA
1,754
Excluding litigation costs EBITDA improved 6% 2Q’14 vs. 1Q’14
Mining impact Steel impact
11
EBITDA to net results 2Q
201
4
($ million) Depreciation decreased
following an increase in the
useful lives of plant and
equipment
240
832
1,763
Net income/
(loss)
52
Taxes and
non-controlling
interest
(188)
Pre-tax
income/(loss)
Forex and
other Fin. Cost
(327)
Net interest
expense
(383)
Income from
equity
118
Operating
Income
D&A
(931)
EBITDA
Weighted Avg No of shares: 1,791
EPS = $ 0.03/share
($ million)
2Q’14 net income of $0.1 billion
1Q 2
014 1,754
674
(109) (205) (96) (380)
(426) 36
(1,080) Weighted Avg No of shares: 1,790
EPS = $ (0.12)/share
12
EBITDA to free cash flow
2Q 2014 free cash flow waterfall ($ million)
1,7631,548
774
856
Free cashflow
(774)
Cashflow from
operations
(1,071)
EBITDA
Change in
working
capital Net financial
cost, tax
expense, and
others*
Capex
* Includes pension expense, non cash items etc.
Positive free cash flow during 2Q’14
13
Net debt analysis
2Q 2014 net debt analysis ($ million)
228
774
-1,071
Net debt at 2Q’14
17,430
Forex & others
69
M&A* Free cashflow Net debt at 1Q’14
18,501
Net debt refers to long-term debt, plus short term debt, less cash and cash equivalents, restricted cash and short-term investments. *M&A includes net proceeds from ATIC and
Steel cord business divestments
Net debt decreased due to working capital release and M&A proceeds
14
Outlook and guidance framework
- Steel shipments are expected to increase by approximately 3% in 2014 vs
2013
- Marketable iron ore shipments are expected to increase by approximately
15%
- FY Iron ore price assumption adjusted to an average of ~$105/t (for 62%
Fe CFR China) down from previous ~$120/t assumption
- An improvement in steel margins despite weather related impacts on the
NAFTA segment’s first half performance
- 2014 capex is expected to be approximately $3.8-4.0bn
- Medium term net debt target of $15 billion maintained
Post revision of iron ore assumption, Company expects 2014 EBITDA in excess of $7 billion
Steel
Mining
Pricing
Margins
Capex
Debt
Appendix
Monlevade expansion project in Brazil restarted:
• Phase 1 (approved) focuses on downstream facilities and
consists of:
– a new wire rod mill in Monlevade with additional capacity of
1,050ktpy of coils with capital expenditure of $280m;
– Juiz de Fora rebar capacity increase from 50 to 400ktpy
(replacing some wire rod production capacity) and meltshop
capacity increase by 200ktpy
• Expected completion in 2015
• A decision whether to invest in Phase 2 of the project, focusing on
the upstream facilities in Monlevade (sinter plant, blast furnace
and meltshop), will be taken at a later date
16 16
Selective steel projects: Monlevade (Brazil segment)
Expansion supported by strong market for long products in Brazil
Vertical stands Hangar of the rolling mill # 3
Intermediate mill
Wire rod mill /3
Billet charging table
New rolling mill at Acindar (Argentina)
• New rolling mill (Huatian) in Santa Fe province to
increase rebar capacity by 0.4mt/year for civil
construction market:
– New rolling mill will also enable Acindar to
optimize production at its special bar quality
(SBQ) rolling mill in Villa Constitución, which in
future will only manufacture products for the
automotive and mining industries
• Estimated capital expenditure of ~$100m and
completion in 2016
Progress update
• Equipment import: Rolling mill Huatian received at
Acindar
• Disassembly of the existing rolling mill (from
March to July): electrical disassembly at 65%,
mechanical disassembly at 35%.
17 17
Selective steel projects: Acindar (Brazil segment)
Expansion supported by strong construction market in Argentina and exports
Selective steel projects: Dofasco (NAFTA)
Cost optimization, mix improvement and increase of
shipments of galvanized products:
• Phase 1: New heavy gauge galvanize line (#6 Galvanize Line):
– Restart construction of heavy gauge galvanizing line #6 (cap. 660ktpy)
and closure of line #2 (cap. 400ktpy) increased shipments of
galvanized sheet by 260ktpy, along with improved mix and optimized
cost
– Line #6 will incorporate AHSS capability part of program to improve
Dofasco’s ability to serve customers in the automotive, construction,
and industrial markets
– Expected completion in 2015
• Phase 2: Approved Galvanized line conversion:
– Restart conversion of #4 galvanize line to dual pot line (capacity
160ktpy of galvalume and 128ktpy of galvanize products) and closure
of line #1 galvanize line (cap.170ktpy of galvalume) increased
shipments of galvanized sheet by 128ktpy, along with improved mix
and optimized cost.
– Expected completion in 2016
18 18
Expansion supported by strong market for galvanized products
Selective steel projects: VAMA-JV with Hunan Valin
• VAMA: JV between ArcelorMittal and Hunan Valin which
will produce steel for high-end applications in the
automobile industry, supplying international automakers and
first-tier Chinese car manufacturers as well as their supplier
networks for rapidly growing Chinese market
• Construction of automotive facility, the main components
which are:
– State of the art pickling tandem CRM (1.5mt)
– Continuous annealing line (0.9mt), and
– Hot dip galvanizing line (0.5mt)
• Capital expenditure of ~$832 million (100% basis)
• First automotive coils targeted for 2H 2014
19 19
Robust Chinese automotive market: > 50% growth to 25 million vehicles by 2018
20
Continued growth in developed markets
Global apparent steel consumption (ASC)*
(million tonnes per month) US and European apparent steel consumption (ASC)**
(million tonnes per month)
* ArcelorMittal estimates; ** AISI, Eurofer and ArcelorMittal estimates
• China ASC +1.6% in 2Q’14 vs. 1Q’14
• China ASC +2.3% in 2Q’14 vs. 2Q’13 • EU ASC -1.1% in 2Q’14 vs. 1Q’14
• EU ASC +4.3% in 2Q’14 vs. 2Q’13
• Global ASC +2.4% in 2Q’14 vs. 1Q’14
• Global ASC +2.8% in 2Q’14 vs. 2Q’13
• US ASC +5.4% in 2Q’14 vs. 1Q’14
• US ASC +10.2% in 2Q’14 vs. 2Q’13
ArcelorMittal core market growth continued in 2Q’14
15
20
25
30
35
40
45
50
55
60
65
Jan-0
7
May-0
7
Sep
-07
Jan-0
8
May-0
8
Sep
-08
Jan-0
9
May-0
9
Sep
-09
Jan-1
0
May-1
0
Sep
-10
Jan-1
1
May-1
1
Sep
-11
Jan-1
2
May-1
2
Sep
-12
Jan-1
3
May-1
3
Sep
-13
Jan-1
4
May-1
4
Developing ex China
China
Developed
(latest data point: May & June’14) 3
5
7
9
11
13
15
17
19
Jan-0
7
May-0
7
Sep
-07
Jan-0
8
May-0
8
Sep
-08
Jan-0
9
May-0
9
Sep
-09
Jan-1
0
May-1
0
Sep
-10
Jan-1
1
May-1
1
Sep
-11
Jan-1
2
May-1
2
Sep
-12
Jan-1
3
May-1
3
Sep
-13
Jan-1
4
May-1
4
EU28
USA
(latest data point: May’14)
21
• Global manufacturing output has continued to expand in our key markets, but manufacturing PMIs suggest the pace of expansion has moderated.
• US manufacturing output surged 6.7% annualized in 2Q’14 and composite manufacturing PMI** increased to 56.3.
• Eurozone manufacturing growth softened in 2Q’14 and manufacturing PMI eased to 51.8 in June still indicate expansion.
• In China, composite manufacturing PMI** picked up to a seven-month high of 50.9 and auto production increased to 10% y-o-y in June.
• Both Brazil and Russia face significant headwinds and manufacturing PMIs below 50 indicate contraction.
Global indicators remain positive
Source: *Markit. ArcelorMittal estimates
** Composite manufacturing PMIs is an average of the Markit and ISM for the US and Markit and China Federation of Logistics and Purchasing for China
Global indicators signal continued growth in developed markets in 2Q’14
35
40
45
50
55
60
Jan-0
6
May-0
6
Sep
-06
Jan-0
7
May-0
7
Sep
-07
Jan-0
8
May-0
8
Sep
-08
Jan-0
9
May-0
9
Sep
-09
Jan-1
0
May-1
0
Sep
-10
Jan-1
1
May-1
1
Sep
-11
Jan-1
2
May-1
2
Sep
-12
Jan-1
3
May-1
3
Sep
-13
Jan-1
4
May-1
4
Exp
ansio
nC
ontr
actio
n(latest data point: Jun’14)
US construction growth continues;
Europe improving • USA non-residential picks up in Q2’14
– Construction spending grew 0.7% in May (8.8% y-o-y) and growth is expected to accelerate since activity is still near historically low levels.
– The recovery in residential construction has eased back over 1H’14, but non-residential construction has now started to pick up, with a positive outlook as the Architecture Billings Index (ABI) was up substantially to 53.5 in June from 49.6 in April.
• European construction easing back
– Eurozone construction PMI weakened to 43.3 in June, as the boost from good weather in 1Q’14 dissipates.
– Eurozone construction output fell 1.5% m-o-m in May, bringing the y-o-y growth rate down to 3.5%.
– Output in 2014 expected to be higher than 2013, led by growth in Germany, Poland and the UK. Construction in Southern Europe remains weak despite a pick up from low levels in Spain.
US residential and non-residential construction indicators
(SAAR) $bn*
22 * Source: US Census Bureau; ** Source: Markit and The American Institute of Architects
Eurozone and US construction indicators**
Construction gradually improving
200
250
300
350
400
450
500
550
600
650
700
750
Jan-0
2
Jul-02
Jan-0
3
Jul-03
Jan-0
4
Jul-04
Jan-0
5
Jul-05
Jan-0
6
Jul-06
Jan-0
7
Jul-07
Jan-0
8
Jul-08
Jan-0
9
Jul-09
Jan-1
0
Jul-10
Jan-1
1
Jul-11
Jan-1
2
Jul-12
Jan-1
3
Jul-13
Jan-1
4
Residential
Non-residential
(latest data point: May’14)
(latest data point: Jun’14)
0
3
6
9
12
15
18
21
0
20
40
60
80
100
120
Jan-0
7A
pr-
07
Jul-07
Oct-
07
Jan-0
8A
pr-
08
Jul-08
Oct-
08
Jan-0
9A
pr-
09
Jul-09
Oct-
09
Jan-1
0A
pr-
10
Jul-10
Oct-
10
Jan-1
1A
pr-
11
Jul-11
Oct-
11
Jan-1
2A
pr-
12
Jul-12
Oct-
12
Jan-1
3A
pr-
13
Jul-13
Oct-
13
Jan-1
4A
pr-
14
Steel inventory at warehouses (RHS)
Finished steel production (LHS)
Steel inventory at mills (RHS)
Chinese industrial growth stable
• Industrial output growth accelerated to 9.2% y-o-y in
June, from 8.7% in 1Q’14
• Infrastructure investment continues to grow, up
25% y-o-y in 2Q’14, supported by recent
government measures and a rebound in rail.
• Property market is being helped by a loosening of
purchase restrictions in many cities, with the decline
in new housing sales improving.
– However, the real estate market remains
oversupplied, with the ratio of vacant floor
space to sales at record levels.
– New starts declined by -16.5% y-o-y in H1’14
and together with faster completions, the stock
of real estate under construction is likely to
remain weak into 2015.
• Flat products demand continues to be supported by
strong demand from auto, a pick-up in
manufacturing generally and stabilising shipbuilding
after two years of decline.
• Steel production data indicates that output continued
to grow in 2Q’14 (837mt annualized) supported by
exports.
• Warehouse inventories to historical lows in days of
supply, driven by lack of finance but partially offset
by still high inventory at mills.
23
Crude steel finished production and inventory (mmt)
*Mma refer to months moving average
Source: NBS, CISA, WSA, Mysteel, ArcelorMittal Strategy estimates
China infrastructure investment 3mma* (Y-o-Y)
Chinese economy growth picks-up, but steel demand impacted by weak real estate
(latest data point: Jun’14)
-15%
0%
15%
30%
45%
60%
75%
Jan-0
7
May-0
7
Sep
-07
Jan-0
8
May-0
8
Sep
-08
Jan-0
9
May-0
9
Sep
-09
Jan-1
0
May-1
0
Sep
-10
Jan-1
1
May-1
1
Sep
-11
Jan-1
2
May-1
2
Sep
-12
Jan-1
3
May-1
3
Sep
-13
Jan-1
4
May-1
4
(latest data point: Jun’14)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2
4
6
8
10
12
14
16
18
20
22
Ja
n-0
7A
pr-
07
Ju
l-0
7O
ct-
07
Ja
n-0
8A
pr-
08
Ju
l-0
8O
ct-
08
Ja
n-0
9A
pr-
09
Ju
l-0
9O
ct-
09
Ja
n-1
0A
pr-
10
Ju
l-1
0O
ct-
10
Ja
n-1
1A
pr-
11
Ju
l-1
1O
ct-
11
Ja
n-1
2A
pr-
12
Ju
l-1
2O
ct-
12
Ja
n-1
3A
pr-
13
Ju
l-1
3O
ct-
13
Ja
n-1
4A
pr-
14
Flat and Long
% of ASC (RHS)
2.0
2.2
2.4
2.6
2.8
3.0
3.2
3.4
3.6
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Jan-0
7A
pr-
07
Jul-07
Oct-
07
Jan-0
8A
pr-
08
Jul-08
Oct-
08
Jan-0
9A
pr-
09
Jul-09
Oct-
09
Jan-1
0A
pr-
10
Jul-10
Oct-
10
Jan-1
1A
pr-
11
Jul-11
Oct-
11
Jan-1
2A
pr-
12
Jul-12
Oct-
12
Jan-1
3A
pr-
13
Jul-13
Oct-
13
Jan-1
4A
pr-
14
USA (MSCI)
Months Supply
Growth in developed market inventory slows German inventories (000 MT)
24
China service centre inventories* (Mt/mth) with ASC% Brazil service centre inventories (000 MT)
US service centre total steel Inventories (000 MT)
(latest data point: Jun’14)
(latest data point: Jun’14)
Source: WSA, Mysteel, ArcelorMittal Strategy estimates
0.0
1.0
2.0
3.0
4.0
5.0
0
500
1,000
1,500
2,000
2,500
Jan-0
7A
pr-
07
Jul-07
Oct-
07
Jan-0
8A
pr-
08
Jul-08
Oct-
08
Jan-0
9A
pr-
09
Jul-09
Oct-
09
Jan-1
0A
pr-
10
Jul-10
Oct-
10
Jan-1
1A
pr-
11
Jul-11
Oct-
11
Jan-1
2A
pr-
12
Jul-12
Oct-
12
Jan-1
3A
pr-
13
Jul-13
Oct-
13
Jan-1
4A
pr-
14
Germany Flat Stocks
Months Supply (RHS)
(latest data point: May’14)
1.5
2
2.5
3
3.5
4
4.5
5
0100200300400500600700800900
1,0001,1001,2001,3001,400
Jan-0
7A
pr-
07
Jul-0
7O
ct-
07
Jan-0
8A
pr-
08
Jul-0
8O
ct-
08
Jan-0
9A
pr-
09
Jul-0
9O
ct-
09
Jan-1
0A
pr-
10
Jul-1
0O
ct-
10
Jan-1
1A
pr-
11
Jul-1
1O
ct-
11
Jan-1
2A
pr-
12
Jul-1
2O
ct-
12
Jan-1
3A
pr-
13
Jul-1
3O
ct-
13
Jan-1
4A
pr-
14
Flat stocks at service centres
Months of supply (RHS)
Slow rebound in inventory is supporting demand growth in developed market
(latest data point: Jun’14)
25
Global apparent steel consumption China
NAFTA
EU28
Rest of World*
0
100
200
300
400
500
600
700
800
2012 2010 2008 2009 2011
+7%
2013 2014F
+67%
2007
+3 - 3.5%
ArcelorMittal estimates; * World ex. China, NAFTA and EU28
40
60
80
100
120
140
160+6%
-9%
-2%
2012 2013 2014F 2011 2010 2009 2008 2007
50
100
150
200
250
300
350
400
450
500
550
2011 2010 2009
+3% +2.5 +11%
2014F 2013 2012 2008 2007
2013 ASC growth of +3.5%; Estimated 2014 ASC growth of 3.0-3.5%
40
60
80
100
120
140
160
180
200
220
2007 2014F 2013 2012 2009 2008
+1% +3- 4%
-32%
2011 2010
400
500
600
700
800
900
1000
1100
1200
1300
Jan 0
8A
pr 08
Jul 08
Oct 08
Jan 0
9A
pr 09
Jul 09
Oct 09
Jan 1
0A
pr 10
Jul 10
Oct 10
Jan 1
1A
pr 11
Jul 11
Oct 11
Jan 1
2A
pr 12
Jul 12
Oct 12
Jan 1
3A
pr 13
Jul 13
Oct 13
Jan 1
4A
pr 14
Jul 14
China domestic Shanghai (Inc 17% VAT)
N.America FOB Midwest
N.Europe domestic ex-works
Raw material prices have stabilized
Spot iron ore, coking coal and scrap price (index IH 2008=100)*
Regional steel price HRC ($/t)
26
Scrap and coking coal stable during the quarter; iron ore declined early 2Q
* Source data: ArcelorMittal estimates; Platts
20
30
40
50
60
70
80
90
100
110
120
130
Jan 0
8A
pr 08
Jul 0
8O
ct 08
Jan 0
9A
pr 09
Jul 0
9O
ct 09
Jan 1
0A
pr 10
Jul 1
0O
ct 10
Jan 1
1A
pr 11
Jul 1
1O
ct 11
Jan 1
2A
pr 12
Jul 1
2O
ct 12
Jan 1
3A
pr 13
Jul 1
3O
ct 13
Jan 1
4A
pr 14
Jul 1
4
Spot Iron OreCoking CoalScrap
(latest data point: Jul’14) (latest data point: Jul’14)
27
Segment highlights
0
100
200
300
400
500
600
700 -10%
+23%
+41%
-22%
-7%
Mining ACIS Europe Brazil NAFTA
1Q’14 4Q’13 3Q’13 2Q’13 2Q’14
Segmental EBITDA* (US$mn)
0
50
100
150
200
250
1Q’14 4Q’13 3Q’13 2Q’13 1Q’13 Q2’14
ACIS Europe Brazil NAFTA
Segmental EBITDA/tonne (US$/t)
* 2Q’14: Improving ACIS/Europe segments offset by weaker NAFTA/Mining segments
* Segmental figures shown above include one time adjustments; NAFTA EBITDA in 2Q 2014 of $177 million included the negative impact from settlement of US litigation $90 million;
excluding this adjustment EBITDA improved 3.6% QoQ
0
2,000
4,000
6,000
8,000
10,000
12,000
+7%
+2%
-7%
+7%
ACIS Europe Brazil NAFTA
Segmental shipments (kt)
6.5 6.8 6.34.2
6.2
8.2 9.4 10.3
9.3
10.5
0
5
10
15
20
0
5
10
15
20
1Q’14 2Q’14 4Q’13 3Q’13 2Q’13
Shipped at cost plus
Own iron ore prod
Shipped at market price Iron ore (mt)
28
Net debt ($ billion) Average maturity (years)
Liquidity ($ billion) Bank debt as component of total debt (%)
Balance sheet structurally improved
17.4
32.5
-46%
2Q 2014 3Q 2008
6.2
2.6
2Q 2014 3Q 2008
10.4
12.0
2Q 2014 3Q 2008 2Q 2014
10%
3Q 2008
84%
Balance sheet fundamentals improved
Working capital
29
OWCR and rotation days* ($ billion and days)
Business will invest in working capital as conditions necessitate
* Rotation days are defined as days of accounts receivable plus days of inventory minus days of accounts payable. Days of accounts payable and inventory are a function
of cost of goods sold of the quarter on an annualized basis. Days of accounts receivable are a function of sales of the quarter on an annualized basis.
54
0
4
8
12
16
20
24
28
0
30
60
90
120
2Q
14
1Q
14
4Q
13
3Q
13
2Q
13
1Q
13
4Q
12
3Q
12
2Q
12
1Q
12
4Q
11
3Q
11
2Q
11
1Q
11
4Q
10
3Q
10
2Q
10
1Q
10
4Q
09
3Q
09
2Q
09
1Q
09
4Q
08
3Q
08
2Q
08
1Q
08
4Q
07
3Q
07
2Q
07
1Q
07
Rotation days - RHS Working capital ($ billion) - LHS
30
Net debt
Net Debt ($ billion) & Net Debt/LTM reported EBITDA* Ratio (x)
* Based on last twelve months (LTM) reported EBITDA. Figures prior to 1Q’12 have not been recast on quarterly basis for adoption of new accounting standards
implemented from 1.1.13
2.4
0
5
10
15
20
25
30
35
0.0
1.0
2.0
3.0
4.0
2Q
14
1Q
14
4Q
13
3Q
13
2Q
13
1Q
13
4Q
12
3Q
12
2Q
12
1Q
12
4Q
11
3Q
11
2Q
11
1Q
11
4Q
10
3Q
10
2Q
10
1Q
10
4Q
09
3Q
09
2Q
09
1Q
09
4Q
08
3Q
08
2Q
08
1Q
08
4Q
07
3Q
07
2Q
07
1Q
07
Net Debt / LTM EBITDA Net Debt ($ billion) - LHS
Net debt decreased by $1.1bn largely due to $0.9bn working capital release
31
Liquidity and debt maturity profile
Debt maturities ($ billion) Liquidity at June, 30, 2014 ($ billion)
Liquidity lines:
• $3.6bn syndicated credit facility matures 18/03/16
• $2.4bn syndicated credit facility matures 06/11/18
• Continued strong liquidity
• Average debt maturity 6.2 years
Debt maturity: Ratings
• S&P – BB+, negative outlook
• Moody’s – Ba1, negative outlook
• Fitch – BB+, stable outlook
0
1
2
3
4
5
6
7
8
9
3.5
2014
1.3
>2018
9.0
2018
2.3
2017
2.9
2016
2.8
2015
Bonds Other Commerical
0.60.6
4.4
6.0
Other loans
Commercial paper Cash
Bonds
Unused credit lines
Debt due
in 2014
1.3
0.1
Liquidity
at 30/6/14
10.4
Continued strong liquidity position and average debt maturity of 6.2 years
Contacts
Daniel Fairclough – Global Head Investor Relations
+44 207 543 1105
Hetal Patel – UK/European Investor Relations
+44 207 543 1128
Valérie Mella – European and Retail Investor Relations
+44 207 543 1156
Maureen Baker – Fixed Income/Debt Investor Relations
+33 1 71 92 10 26
Lisa Fortuna – US Investor Relations
+312 899 3985
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