Investor Day 2013: Backing our franchises Protecting and growing our Automotive franchise

Transcription

1 Investor Day 2013: Backing our franchises Protecting and growing our Automotive franchise Brian Aranha, VP Automotive Worldwide 15 March 2013

2 Disclaimer 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 s 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. Non-GAAP Financial Measures This 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 1

3 Overview 13:30 / Focussing on value creation Lakshmi Mittal 14:00 / Balance sheet and capital allocation Aditya Mittal 14:30 / Q&A 15:15 / 11:15 - Break for 15 mins - 15:30 / 11:30 Creating value from our Mining franchise Peter Kukielski 16:00 / 12:00 Protecting and growing our Automotive franchise Brian Aranha 16:30 / 12:30 - Break for 15 mins - 16:45 / 12:45 AACIS Focussing on improvement Gonzalo Urquijo 17:15 / 13:15 Enhancing our competitive position Lou Schorsch 17:45 / 13:45 - Close - 2

4 Key topics of discussion 2 key challenges facing the automotive industry: Geographical car production shifts to China, India and Russia Shift in product needs from automotive industry Emission/weight saving challenges Passenger safety challenges ArcelorMittal offers the specific answers and solutions to address these challenges ArcelorMittal maintains both its geographical and its technological leadership on the automotive market ArcelorMittal response to automotive industry challenges 3

5 Growth of auto demand in emerging markets 15/03/2013 Author 4

6 Regional market evolution and dynamics US and Western Europe light vehicles sales (thousands)* China light automotive sales (thousands)* USA Western Europe Global vehicle sales forecast (2017F v 2007)* US vehicle sales of 16.9m units in 2017, up 4.6% vs Western Europe vehicle sales of 15.3m units in 2017, down -9.1% vs China vehicle sales of 31.5m in 2017; market x4 since 2007 Brazil vehicle sales of 5.1m units in 2017, up 117% vs India market expected to double in size between 2012 and 2017 Brazil, India and Russia light automotive sales (thousands)* Russia India Brazil Auto sales are expected to grow in NAFTA, more than Europe and grow strongly in Asia * Source for both historical and forecast data is LMC Automotive 5

7 Worldwide car production vs ArcelorMittal presence 2012 Production in 000 units / Forecast % for 2017* Automotive production facilities Alliances & JV Commercial Teams Eastern Europe 4.28 Mv / + 40% Russia 2.1 Mv / % NAFTA Mv / % Western Europe Mv / +5% Middle East / North Africa** 1.48 Mv / % China Mv / +51.8% Korea 4.50 Mv / (4)% Japan 9.44 Mv / (13.9)% Vehicle production 2012 > 20 M veh > 15 M veh & < 20 M veh > 10 M veh & < 15 M veh > 5 M veh & < 10 M veh > 2.5 M veh & < 5 M veh > 1 M veh & < 2.5 M veh < 1 M veh South America 4.29 Mv / % Global car production between ( ) is expected to increase by 24% (>100m cars). South Africa 0.53 Mv / % India 3.79 Mv / + 61% **: Middle east / North Africa = Morocco + Iran + Uzbekistan + Kazahkstan ***: South Asia = Malaysia + Indonesia + Philippines + Thailand + Vietnam + Pakistan South East Asia*** 4.6 Mv / % ArcelorMittal to increase emerging region exposure to maintain global market share *Sources: LMC forecasts ( ) for Western & Eastern Europe & Russia; IHS forecasts ( ) for all other regions. Personal cars and light commercial vehicles < 6 t 6

8 VAMA greenfield joint venture facility in China: Strategically positioned to reach growing target markets China Automotive industrial network VAMA: ArcelorMittal JV partnership in China Auto steel consumption accessible to VAMA target products (market size in MT) VAMA: Valin ArcelorMittal Automotive Target areas and markets BYD, Changan, Suzuki, CFMA & FAW-VW Loudi Daimler & Nissan Beijing VAMA SAIC, Toyota, GM, Honda, Nissan & BYD FAW-VW & BMW Geely, VW, GM, KIA, SAIC & Chery Shanghai Changfeng, Fiat, DPCA, Dongfeng, Honda, JMC & Suzuki Guangzhou Capex: US$850 million, 1.5 MT state-of-the-art production facilities Located in Loudi City, Hunan, well-positioned to serve growing automotive market Local presence of commercial and technical teams Scheduled to start production in 2015 Expansion capability up to 2.5 MT VAMA strategically positioned to capture growth 7

9 VAMA overview LYS Hot Strip Mill Hot Rolled Coils VAMA PLTCM 1.5 M tonnes Coupled pickling / tandem Capacity extension to 2.3 M tonnes possible 2 x walking beam reheat furnaces, reversing rougher, coil-box, 7 stand finishing with advanced laminar flow cooling. Dimensions: mm thickness range, width range mm Capacity: rated at 4.5 M tonnes Facility commissioned in Q Certified ISO/TS VAMA Mixed CAL 1 M tonnes Thickness mm Width up to 1,850 mm Coil weight 30t Includes AlSi pot, exposed capable TS up to 1200 MPa VAMA CGL 0.5 M tonnes Thickness mm Width up to 1,850 mm Coil weight 30t Includes GI and GA pot, exposed capable TS up to 1000 MPa VAMA is well-positioned with competitive local HR supply, state-of-the-art finishing facilities and local presence of commercial and technical teams. Note: VAMA facilities pictures are only indicative and they are from reference plants of equipment suppliers 8

10 VAMA milestones Completed Planned Basic design complete Beginning of equipment construction Detailed design complete Completion of hot run testing Start cold testing Jun 2012 Mar 2013 Dec Dec 2012 Jun 2013 Jun 2014 Equipment contracts and Share Transfer Agreement signed February 2013: Civil work and piling foundation in progress Construction of main workshop steel structure Completion of training at ArcelorMittal sponsor plants Commercial production VAMA currently on plan and within budget, market entry planned for

11 Technology challenges 15/03/2013 Author 10

12 Global regulation remains stringent ArcelorMittal meeting these challenges Regulation is evolving in automotive industry. 1) Industry-wide initiatives 2) S-in motion (ArcelorMittal) 3) Beyond 2017 New breakthrough ArcelorMittal solutions OEMs main actions to meet challenges: Weight reduction: Affordable and safe Conventional powertrain vehicles Electric and hybrid vehicles Productivity: Global platforms G ram s CO 2 /Km (Equivalent) I II III Australia China Europe USA Japan Source: International Council on Clean Transportation ArcelorMittal continues to respond to demanding regulations offering affordable and safe lightweight solutions 11

13 Through innovation, steel remains material of choice I II III Usibor 1500P: first serial use of hot stamping of coated boron steels, patented by ArcelorMittal Generation 2: TWIP, X-IP Generation 1, phase 3: Usibor for hot stamping Generation 3: AHSS solutions Generation 1, phase 2 AHSS: Dual Phase, TRIP Steels, Martensitic etc. Generation 1, phase 1: HSLA, HSS Contribution to ULSAB/ULSAC industry-wide lightweight effort ArcelorMittal s ABC lightweight project S-in motion demonstrates the potential of AHSS S-in motion electric vehicles ArcelorMittal s leadership as solution provider recognized by EU/ North America OEMs 12

14 S-in motion key figures and impact S-in motion project roll-out in Catalogue of solutions for weight/cost savings: Up to 20% weight savings Reduction in Green House Gas (GHG) emissions during the phase of the whole vehicle => -6.2 g CO 2 / km 31 customer events held in Europe, Asia, North America and South America at main car makers and Tier 1 suppliers 8,500 registered visitors (275 on average per event, incl. top management, purchasing, design engineers etc) Events at major European truck makers scheduled for main impacts on market Increased collaboration with OEMs on co-engineering activities Contribution to significant growth of Advanced High Strength Steels in the car industry Increase of our patented solutions (e.g. Usibor and Laser Welded Blanks) S-in motion was the single largest initiative of this kind worldwide 13

15 S-in motion weight savings promote ArcelorMittal patented solutions For the lightest Body-in-White concept: 16 parts are made with laser welded blanks Usibor /Ductibor 35% of S-in motion solutions include Laser Welded Blanks (LWBs) LWBs offer the most effective way to optimize part weight and crash performances LWB Ductibor 500P / Usibor 1500P LWB Usibor 1500P / Usibor 1500P 14 *PHS= Press Hardening Steel 14

16 A quote from Volkswagen Volkswagen is using high strength steels in increasing amounts. It is a very cost effective way of reducing weight. Using new innovations in steel engineering it is possible to reduce weight without the use for more costly materials such as aluminium and carbon fibre. Armin Plath, VW s Head of Materials Research and Manufacturing Source: Article Volkswagen Replaces Aluminium With Steel To Save Weight And Money, written by Bertel Schmitt on January 24, 2013 for the Truth About Cars website. 15

17 Impact of S-in motion on position on AHSS ArcelorMittal Automotive market share* of AHSS and all auto products in NAFTA region NAFTA AHSS Overall ArcelorMittal Automotive market share* of AHSS and all auto products in European region Strong market share maintained for automotive Strengthening position in Advanced High Strength Steels stronger increase than average in ALL regions above average market share Ratio of Advanced High Strength Steel has nearly doubled since 2008 Europe AHSS Overall Adoption of S-in motion solutions increases AHSS usage and ArcelorMittal market share Sources : Regional AM Auto market intelligence; JD Power/CSM * Based on ArcelorMittal estimates 16

18 Electric and hybrid vehicles challenges The two key challenges to help carmakers address the electric and hybrid vehicle challenge are: Lightweight solutions for electric vehicles New high-performance steels for electric motors ArcelorMittal addressing electric and hybrid car challenges 15/03/2013 Author 17 17

19 ArcelorMittal s S-in motion Body-in-White solutions for electric vehicles Redesign Body-in-White (BIW) to accommodate the larger powertrain and create the battery protection Possible through extensive use of AHSS for BIW (58% up from 35%) Achieved additional BIW weight reduction of 30 kg (11%) compared to the baseline vehicle Despite need for extra steel to protect the battery of the electric S-in motion vehicle Coloured parts are in the scope of electric vehicles Body-in-White redesign ArcelorMittal offers light weight solutions for electric vehicles 18

20 New electrical steels for new electric motor demands Launched in June 2012, icare is ArcelorMittal s new range of innovative (i) and environmentally friendly (e) electrical steels for the CAR of tomorrow. 3 main steel types: Save: for very low losses, extending the car s range Torque: for the highest levels of mechanical power output, boosting acceleration Speed: high strength electrical steels for high speed rotors, increasing performance at high speeds This icare offer is supported by 90 million investment on the annealing line in St. Chély d Apcher (France) Volume capacity: 120 kt/year, expandable to 250 kt/year to meet future demand Start production of new line: May 2013 ArcelorMittal is positioning for the next generation of electric cars 19

21 Beyond 2017, new breakthrough ArcelorMittal solutions 15/03/2013 Author

22 Meeting the challenge of 54.5 mpg in US and 95g CO 2 / km in Europe Ongoing developments: 3rd Generation Advanced High Strength Steels (AHSS) to substitute conventional current steel grades with 10 to 20% weight saving potential 2000 MPa hot stamping grades New grades for chassis parts R&D programs are underway to meet the auto industry needs beyond

23 Advertisement published in various NA outlets as of March

24 Overall GHG emissions increase with competing materials Material production average greenhouse gas (GHG) emissions Carbon fibre Magnesium (pigeon) Life cycle greenhouse gas emissions per driven distance. Compact gasoline vehicle (5 l/100km) Magnesium (electrolysis) Aluminium Steel / AHSS 0 Distance (km) 150, ,000 Reference AHSS Aluminium kg CO 2 eq/kg With life cycle analysis, steel and aluminium offer equivalent results for GHG emissions Given equivalent GHG, steel solutions are significantly lower cost than aluminium Full life cycle analysis favours steel over other materials. Awareness is increasing with carmakers and regulators. 23

25 Recap Our Strengths enable us to adapt to a rapidly changing automotive environment Leveraging our flexible organisation in a rapidly changing customer landscape Producing the prime product to face tightening emissions standards and to improve passenger safety Moving into emerging markets and build on competitive advantages Global footprint focusing on each step of vehicle life time Tailored service and vertical integration Innovation through product, R&D and Total Solution (S-in motion) that leads to recognition of ArcelorMittal s technology leadership 24