Published on October 4, 2007
Leading the specialty steel industry Michel Wurth – Member of GMB 11-13 September 2007 - Investor Day - Paris 0
Disclaimer Forward-Looking Statements This document may contain forward-looking information and statements about ArcelorMittal S.A. including Arcelor S.A. 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 Netherlands Authority for the Financial Markets, the Commission de Surveillance du Secteur Financier (“CSSF”), the Luxembourg securities regulator and the U.S. Securities and Exchange Commission (“SEC”) made or to be made by ArcelorMittal or previously made by its predecessor, Mittal Steel Company N.V. (“Mittal Steel”). ArcelorMittal undertakes no obligation to publicly update its forward-looking statements, whether as a result of new information, future events, or otherwise. Additional Information In connection with the proposed merger of ArcelorMittal with Arcelor, Mittal Steel, ArcelorMittal and Arcelor have filed and will file important documents with the relevant securities regulatory authorities, including the filing with the U.S. Securities and Exchange Commission of a registration statement that will include a proxy statement/prospectus. The proxy statement/prospectus will contain important information about the merger and related matters. ArcelorMittal and Arcelor will make public such proxy statement/prospectus and mail the proxy statement/prospectus to the ArcelorMittal U.S. shareholders. Additionally, a proxy statement/prospectus will be filed with the CSSF for European shareholders. Investors and security holders are urged to read the applicable proxy statement/prospectus, and any other relevant documents filed with the relevant securities regulatory authorities, when they become available and before making any investment decision. U.S. shareholders will be able to obtain a free copy of the U.S. proxy statement/prospectus (when available) and other related documents filed with the SEC by ArcelorMittal (and Mittal Steel as its predecessor) and Arcelor at the SEC’s web site at www.sec.gov and from ArcelorMittal and Arcelor at www.arcelormittal.com. European shareholders will be able to obtain the European proxy statement/prospectus (when available) and the related documents at the registered office of Arcelor and ArcelorMittal and at www.arcelormittal.com. 1
Agenda • Specialty steel business model • Heavy & Special Plates • Automotive • Special Flat & Long products • Conclusion 2
Specialty steel business model 10/09/2007 Confidential 3
The leading and most diversified speciality steel producer ArcelorMittal Specialty steel producers in 2006 Shipments in 2006 110.5mt 32.5mt Lo ng pro ducts specialities 5% P ipes & Tubes 4% Wire drawing 8% Stainless 7% Tinplate 9% P lates A uto mo tive 14% Value added >60% 54% Specialities 29% 2006 ArcelorMittal Company 1 Company 2 Company 3 Company 4 Company 5 More than 32mt of specialty steel shipments in 2006 *Source company reports and ArcelorMittal estimates 4
Characteristics of speciality steels within ArcelorMittal AM Prices AM Volume evolution (HRC base 100 - (H1 ’07 vs H1 ‘06) average H1 ‘07) AM -2.1% Growth Auto 3.6% Plates 8.8% Turnover AM EBITDA evolution 200 (indexed H1 ’07 vs H1 ‘06) 180 Auto EBITDA 160 Plates Evolution 140 AM 120 HRC AHSS Heavy Wire Special Stain 100 Plates Plates less H1 '06 H1 '07 A growing, profitable segment with excellent prospects 5
ArcelorMittal key success factors in the specialty steel industry Global Only truly global specialty player enabling us to serve customers worldwide footprint Product A broad range of specialties allowing a complete offering of advanced solutions and products to demanding customers diversity R&D The largest R&D capability of the industry allowing us to launch more new products than anyone and more rapidly Size ArcelorMittal: a unique player in the specialty steel industry 6
ArcelorMittal superior R&D expertise … strongly supporting specialties ArcelorMittal R&D … • 86% of R&D is focussed on the further • Over 1300 full time researchers development of specialty products • Budget of more than USD 200 million • R&D spending by product • #1 R&D in the industry • Working on all development axes 14% (Spending by finality) 2% 2% 5% Product 30% 37% 6% Process Application 64% 7% 33% Automotive Stainless • Expanding worldwide network of laboratories Tinplate Plates (currently 12 labs in Europe, North America, Wiredrawing Long Special and South America) Other The technological pillar of ArcelorMittal helping to transform tomorrow 7
Example: Continuous innovative flow for future products and solutions • Ductile ultra-high strength steels • Ultrafine grain steels Breakthrough products proposed in coming years (2008-2011) • Low density steels • Steel matrix composites • Material modelling Rm (Strength) 1600 Mechanical Recyclability 1400 With enhanced in use properties Properties 1200 1000 Weldability 800 In-Use Properties 600 Composite 400 HSLA 200 DP 600 Fatigue EDDQ 0 Composite Steel 0 10 20 30 40 50 Low Density A% Elongation E 1/ρ Formability Crash 8
Example: Modelling for efficient industrial operations & product development Process Reverse Efficiency 1 engineering (Cost, Energy & Environment) In-use properties Steel • crash Process • fatigue 2 Pr ro • corrosion • global route oc bu • appearance es stn •… Predic ties s/ prope pr ess Pr 4 od od uc uc t in-us Metal t r td 3 es processing Material ig e • forming n • microstructure & • joining mechanical • cutting characteristics • painting •surfaces •… •defects Predict processing behavior 3 9
Heavy & Special Plates 10/09/2007 Confidential 10
Heavy & Special Plates … and tomorrow: Heavy Plates today … • Shipments: 4.4mt* in 2006, 4.8mt* foreseen • Reopening of Gary Plate Mill in October 2007 in 2008 will add up to 500,000t of capacity • 14 plate mills on 3 continents • 150 M$ investment plan in Galati to improve • Full range of products quality and increase production from 1.5 to –Grades – Dimensions 2.4mt annually • Full range of alloy • Up to 950 mm thick • Gijon Plate mill to go to 800,000t (450,000t grades • Up to 5 m wide today) in 2009/2010 • HSLA • Up to 90 tons weight • Addition of 100,000t of heat treatment • Over 1mt/year of heat treatment capacity capacity in 2008 • Own worldwide distribution network • Total production target in 2010 is 6.8mt – • In addition, 51% ownership in Dillingen 40% growth over 2007 ! (2.4mt) and 37% in Hunan Valin (1.5mt) A strong worldwide player with ambitious growth plans 11 * excluding Dillingen and Hunan Valin
Example 1: Cryogenic Plates Market Evolution Applications • Increasing international gas trade (and • LNG storage tanks consumption), with an increasing share of (9% Ni plates) LNG 6.8% annual growth rate • Ethylene transportation ships (5% Ni plates) 1400 LNG Trade 1200 Pipe Trade 1000 Key points 800 • Low residual grade 600 • Difficult and very specific transformation with 400 severe surface condition requirement 200 • Project management 0 2004 2010 2020 Market structure for 9% Ni plate Production Routes • Global leader: ArcelorMittal: • ArcelorMittal Industeel Belgium • Competitors: ThyssenKrupp, Posco, JFE, Nippon • ArcelorMittal USA Coatesville and Steel, Sumitomo Metals, Kobe, others Coshohocken 12
Example 2: Armor & Navy Plates Applications Market Evolution • Armor steels for military and civilian vehicle protection. • Increasing defense spending worldwide has • Structural steel for submarine led to a sharply growing market since 2001 hulls • Projects concentrate on key geographic zones: 10 countries represented 81% of the 2005 world military defense expenditure, the Key points USA representing 70% • Process know-how: guarantee low thickness and flatness without residual stress. • Metallurgical know-how: guarantee ballistic protection characteristics (impact resistance) conform to specifications Market structure for Armor & Navy Plates • European leader: ArcelorMittal • US leader: ArcelorMittal Production Routes • ArcelorMittal Industeel Loire and Creusot • Competitors: Evraz, Essar, SSAB, ThyssenKrupp, others • ArcelorMittal USA Coatesville and Coshohocken 13
Automotive 10/09/2007 Confidential 14
ArcelorMittal Automotive … will continue to grow ArcelorMittal Automotive … • Several new coating lines planned to satisfy growing worldwide demand • Shipments: 17.4mt in 2006 • Worldwide automotive steel consumption: Worldwide No 1 supplier for automotive • steels, more than twice as big as nearest Growth: competitor +3% p.a. 90 • Competitors: Nippon Steel, ThyssenKrupp, 80 70 US Steel, JFE and others 60 50 • Worldwide industrial presence via 37 coating 40 77.7 69.3 lines in Europe, North America, South 30 57.8 20 America, Africa 10 • Full range of products with worldwide 0 2000 2006 2010 catalogue availability • Strong R&D and customer support activities to continuously improve our offerings The undisputed leader in automotive steels 15
Example: AHSS Market Evolution Why Advanced High Strength Steels*? • AHSS usage will grow significantly • C02 or Fuel regulations reinforce the need for weight reduction 40 • Improvement of crash resistance requires BIW AHSS Usage (%) Nafta 35 Japan 30 reinforcement of body structure EU 25 EM 20 15 10 Key points 5 • The stringent product properties require the 0 latest steel technology: 2000 2006 2012 2020 – Vaccum degassing, Laddle Metallurgy, • Confirmed trend for all OEM. Continuous Tandem Mill Example of Japanese Carmaker – Continuous annealing and HDG lines with specific annealing equipment and thermal cycle Model New Model – Fully computarized processes, Automatic Surface Inspection Systems Market structure for AHSS • European leader: ArcelorMittal • US leader: ArcelorMittal • Competitors: ThyssenKrupp, US Steel, SSAB, AK Steel, others * AHSS gathers all Multiphase Steels above 450MPa Tensile Strength 16
Example: ArcelorMittal technical support for AHSS implementation • Dedicated technical teams located at customer premises to – Identify customer needs – Steer ArcelorMittal R&D projects – Assess the value of ArcelorMittal support 5.1 Kg [13%] 5.8 Kg 5.1 Kg [16%] [13%] • 4.6 Kg Design concepts proposals: [12%] 22 Kg [59%] Vehicle generic modules leveraging on ArcelorMittal technology • Vehicle engineering support to help the customer extract maximum value from ArcelorMittal product offer • Product industrialization support to facilitate the implementation of ArcelorMittal products into customer processes 17
Special Flat & Long products 10/09/2007 Confidential 18
Example: Special HRC for Energy Pipes The product Market Evolution • Hot rolled coil used to • Energy pipes market is growing fast, driven by produce spiral tubes for Oil & Gas production, and following the growth pipeline construction of worldwide GDP. Key point 35000 Pipeline construction 30000 • Technically demanding segment for “high tech (km) 25000 products”: wide dimension, high gauges, 20000 technical metallurgical properties 15000 10000 ArcelorMittal position 5000 • Continued strong growth thanks to capacity 0 increases 2003 2004 2005 2006 2007e 1000 • Within this market, the Spiral tubes business is 500 rapidly expanding due to its cost competitiveness • ArcelorMittal has doubled its worldwide market 0 2002 2007e 2012P share in this market within the last 5 years • Product mix shifting to higher grades (61% of >X70 grades in 2006) 19
Example: Sheet Piles and Crane Rails SHEET PILES CRANE RAILS The product The product • Sheet piles are used in the construction of • Rails for cranes harbours, bank reinforcement on rivers, • High tensile strength, possibility of online for protection of excavations, as retaining walls, heat-treatment for improved physical properties foundation structures, etc….. Production routes Production routes • ArcelorMittal Esch-Belval, Rodange, and • ArcelorMittal Rodange Dabrowa Market structure for Sheet piles • European leader: ArcelorMittal Market structure for Crane rails • NAFTA leader: ArcelorMittal • Global leader: ArcelorMittal • Competitors: Salzgitter, Nucor, Chaparral, • Competitors: Corus, VoestAlpine, others AM others 20
Conclusion 10/09/2007 Confidential 21
Leading the specialty steel industry The leader of the speciality steel industry with 32mt of shipments The largest R&D capability of the industry in product development bringing a clear competitive advantage An ambitious growth plan in promising specialties Question 3 Which producer do you expect to increase its positions the most in speciality steel over the next years 1 – ArcelorMittal 2 – Nippon Steel 3 – US Steel 4 – ThyssenKrupp 5 – SSAB Transforming tomorrow 22
Q&A 10/09/2007 Confidential 23
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