exposé d'aditya mittal à paris ce lundi 5 octobre
TRANSCRIPT
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%
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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
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Strategy to protect and grow our
European business
Proactive action to ensure a sustainable, profitable European business
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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