FREE WRITING PROSPECTUS
Filed pursuant to Rule 433
Registration Statement No.
333-202409
Strengthening our balance sheet, repositioning the opportunity
IBDROOTPROJECTSIBD-LNFRACTION2015585460_16. Presentations2016.02.08Roadshow PresentationProjectRose_investorpresentation_V7 160204 speakernotes.pptx
General disclaimer
For readers in the European Economic Area
This
presentation does not constitute an offer to sell, or the solicitation of an offer to buy or subscribe for, any securities of ArcelorMittal within the meaning of Luxembourg law and/or the laws
of any other member state of the European Economic Area. This document does not constitute a prospectus within the meaning
of EC Directive 2003/71/EC of the European Parliament and of
the Council dated 4 November 2003, as
amended (the _Prospectus Directive_), which expression includes any relevant implementing measure in the member state concerned, and should not
be the basis for any agreement or decision to invest. The Company has not made any final decision whether to proceed with any offering of securities or to admit new securities to trading
on a
regulated market. Any such offering or new admission will be based exclusively on a prospectus prepared
for that purpose. Further, ArcelorMittal has not authorized any offer to the public of
securities in any
member state of the European Economic Area that has implemented the Prospectus Directive, other than Luxembourg, the Netherlands, France and Spain, (each, a
_Relevant Member State_). With respect to each Relevant Member State, no action has been undertaken or will be undertaken to make an offer to the public of securities requiring publication
of a prospectus in any Relevant Member State. Should an offering or new admission of subscription rights and
new shares be conducted, as is currently planned, in Luxembourg, the
Netherlands, France and Spain, a
securities prospectus will be produced, which is to be published following its approval by the Luxembourg supervisory authority for the financial sector
(Commission de Surveillance du Secteur Financier CSSF) and after it has been passported into the Netherlands, France and Spain subsequent to notification having been given to the
competent regulatory authorities in those jurisdictions. Any decision to purchase, subscribe for or otherwise
acquire any subscription rights or new shares of the Company must be made only
on the basis of the information
in a securities prospectus (if published in due course by the Company), which will then be available for download on the internet site of ArcelorMittal
(www.arcelormittal.com). Copies of the prospectus will then also be readily available upon request and free of charge at 24-26, boulevard dAvranches, L-1160 Luxembourg, Grand-Duchy
of
Luxembourg.
In each Relevant Member State this communication is only addressed to, and directed at, qualified investors in that Relevant Member State within the meaning of the Prospectus Directive.
This presentation contains advertising materials in connection with the Offer as referred to in the Market
Abuse Directive 2003/6/EC and implementing laws and regulations.
For readers in the United Kingdom
This communication is only being distributed to, and is only directed at, (i) persons who are outside the United
Kingdom or (ii) investment professionals falling within Article 19(5) of the
Financial Services and
Markets Act 2000 (Financial Promotion) Order 2005 (the _Order_) or (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling
within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as _relevant persons_). The subscription rights and new shares are only available to, and any
invitation,
offer or agreement to subscribe for, purchase or otherwise acquire such subscription rights or new
shares will be engaged in only with, relevant persons. Any person who is not a relevant
person should not act
or rely on this document or any of its contents.
For readers in the United States
ArcelorMittal has filed a registration statement (including a prospectus) with the United States Securities and Exchange
Commission (the _SEC_) for the offering to which this communication
relates. Before you invest, you should
read the prospectus in that registration statement, the supplement to that prospectus ArcelorMittal expects to file with the SEC and other documents
ArcelorMittal has filed and will file with the SEC for more complete information about ArcelorMittal and this offering. You may get these documents, once filed, free of charge by visiting
EDGAR
on the SEC Web site at www.sec.gov. Alternatively, ArcelorMittal, any underwriter or any dealer
participating in the offering will arrange to send you the prospectus after filing if you request it
by
writing or telephoning ArcelorMittal at ArcelorMittal USA LLC, 1 South Dearborn Street, 19th Floor, Chicago, IL 60603, Attention: Ms. Lisa M. Fortuna, Manager, Investor Relations,
telephone number: (312) 899-3985.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR INTO CANADA, AUSTRALIA, JAPAN OR ANY OTHER JURISDICTION IN WHICH TO DO SO WOULD BE PROHIBITED BY APPLICABLE LAW
1
IBDROOTPROJECTSIBD-LNFRACTION2015585460_16. Presentations2016.02.08Roadshow PresentationProjectRose_investorpresentation_V7 160204 speakernotes.pptx
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 ArcelorMittals management believes that the
expectations reflected in
such forward-looking statements are reasonable, investors and holders of ArcelorMittals 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 supervisory authority for the financial sector (Commission de Surveillance du
Secteur Financier CSSF) and the United States Securities and Exchange Commission (the _SEC_) made or to be made by ArcelorMittal,
including ArcelorMittals latest Annual Report on Form 20-F 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.
2
Overview
$4bn net debt reduction through $3bn
capital increase and $1bn
asset sale
All segments of the business FCF positive at current spot steel
spreads
Pro forma net debt at December 31,
2015 reduced to <$12bn / 2.2x
2015 EBITDA
Opportunities to deliver c.$3bn EBITDA improvement and >$2bn free
cash flow at current steel spreads by 2020
Executing strategy to deliver value to shareholders
3
Global presence, industry leading product portfolio and
continuous investment
Worlds leading steel and
mining company
Developed markets are core
Low cost assets
. well positioned on global cost curve
Optimized asset base in Europe
next comes the US footprint optimization
Primary
position in premium grades & global automotive
supported by industry leading R&D capability with
12 major research
centres globally
Capacity to capitalize on demand recovery
Roadmap
to achieve annual FCF of $2bn by 2020 (at current spreads)
ArcelorMittal is the world leading global steel
company positioned to deliver value to shareholders
4
Cost competitive assets capable of generating positive FCF through the cycle
Reduced by $6.1bn since year end 2012¹; reduction is $10.1bn post todays
Net Debt announcements
Interest expense reduced
by $0.6bn since 2012
$2.5bn² of proceeds from non-core asset disposals and strategic partnerships
Portfolio Closure / idling of non-performing assets (e.g. South Africa, Spain, US)
Optimization
Highgrading assets in core markets including acquisition of Calvert
Successfully implemented capacity rationalization program in Europe,
Cost Cutting delivering savings of >$1bn per annum
$3bn management gains program completed
Capex Cut
by $2.0bn since 2012
Dividends Suspended in 2015
Significant actions to de-lever and optimize the portfolio prior to todays announcement
¹ Reported net debt at year end 2015 of $15.7 billion.
² Since end 2012; total asset sales proceeds since 4Q11 total $5.2 billion; this excludes $1 billion proceeds from
the sale of Gestamp announced February 5, 2016.
5
Positive industry signals
Supply side reforms in
China
Capacity is finally exiting in 2015
New _Industry Structure Reform Fund_ to provide social
support
Supply side reform will continue given unsustainability
Steel price recovery
Stabilization of price
environment brings an end to
destocking cycle
Steel spreads currently recovering in all key markets
Encouraging demand outlook
Positive real demand growth in core developed markets
continues
US ASC in 2016 will likely be boosted
by end of destocking
cycle
European demand remains positive
Policy actions
in China combined with improving market conditions support medium term outlook
China steel spreads ($/t)1
159
146
132 +34%
125
117
87 93
2013 2014 1Q15 2Q15 3Q15 4Q15 Current*
US steel
demand: Apparent (ASC)2 vs. Real (RSC)
ASC RSC 108 104 100
96
2013 2014 2015 2016F
Policy actions in China
combined with improving market conditions support medium term outlook
Source: Mysteel, CU Steel, Broker
Research, Factiva
1. $/t differential between China HRC domestic price ex VAT and international Raw Material
Basket (Raw Material Basket for HRC = 1.6 X IO (delivered to China)+ 0.6 X HCC (delivered to China)+ 0.15 X Scrap ( HMS 1/2 80:20 / East Asia import); *Current data Jan 29
2. ASC refers to apparent steel consumption; RSC refers to real steel consumption the difference between ASC and RSC represents the change in inventory
6
2015 performance highlights
EBITDA: FY15 EBITDA
of $5.2bn vs. $7.2bn in FY14
Steel performance: primarily impacted by low steel selling prices
Mining costs performance exceeding targets: FY15 unit cash costs reduced by 20% YoY;
exceeding the 15% target for 2015
Net loss¹driven by impairments, exceptional charges and non-cash forex
Liquidity improved: $10.1bn as of December 31, 2015
Deleveraging targets on track: Year end net debt of $15.7bn lowest level post merger
(USDm) unless otherwise shown 4Q15 3Q15 4Q14 FY15 FY14
Iron ore shipments market price (Mt) 9.9 10.3 9.9 40.3 39.8
Steel shipments (Mt) 19.7 21.1 21.2 84.6 85.1
Sales 13,981 15,589 18,723 63,578 79,282
EBITDA 1,103 1,351 1,815 5,231 7,237
Net (loss) /
income(6,686)(711)(955)(7,946)(1,086)
Adjusted net (loss) / income(375)(75) 142(333) 372
EBITDA impacted by low steel selling prices
1 FY 2015 net loss of $7.9 billion includes $4.8 billion of impairments and $1.4 billion of exceptional charges primarily related to the write-down of inventory following the rapid decline
of international steel prices. 7
Further reduction in cash requirements expected in 2016
$1bn reduction in cash requirements
expected in
2016 vs. 2015:
Capex: $0.3bn saving1
Cash taxes: $0.1bn saving
Dividend suspended:
$0.4 saving
Cash interest: $0.2bn saving2
Capex (US$bn)
-2.3
4.7
3.5 3.7
2.7 2.4
2012 2013 2014 2015 2016F
Net interest expense (US$bn)
-0.8
1.9 1.8
1.5 1.3 1.1
2012 2013 2014 2015
2016F
All segments FCF positive at current spot steel and raw material prices
1 At spot FX rates
2 From net debt reduction and lower cash interest costs following maturity of Mandatory Convertible Notes on January 15, 2016
These statements are forward-looking, are subject to significant business, economic, regulatory and competitive
uncertainties and contingencies, many of which are beyond the control of the Company and its management, and are based upon assumptions with respect to future decisions, which are subject to change. Actual results will vary and those variations may
be material. For discussion of some of the important factors that could cause these variations, please consult the _Risk Factors_ section of the Companys latest Annual Report on Form 20-F on file with SEC. Nothing in this presentation should be
regarded as a representation by any person that these objectives will be achieved and the Company undertakes no duty to update its objectives.
8
Gestamp sale unlocks c.$1bn of value
Sale of 35%
stake in Gestamp for €875 million to the majority shareholder,
the Riberas family
Gestamp is a privately held entity involved in stamping, assembly and
welded blanks for automotive original equipment manufacturers (OEMs)
The sale of our stake in Gestamp unlocks substantial value for
ArcelorMittals shareholders and is consistent with our stated strategy of
stated strategy of portfolio optimization
Our strategic and preferred supplier relationship with Gonvarri and
Gestamp is unaffected and we will continue to work together to supply
automotive OEMs with world-class automotive steel products
ArcelorMittal will continue to have a board presence in Gestamp,
collaborate in automotive R&D and remain its major steel supplier
This sale has no impact on Group EBITDA; share of JV and associates
income will decline by ~$50m per annum and we will no longer receive a
dividend (~$15m in 2015)
Gestamp sale proceeds of
c.$1bn with zero EBITDA impact and de minimis cashflow impact
9
Actions to right-size the balance sheet
Near-term
actions to reduce net debt¹ to <$12bn Liquidity remains strong
Net debt /
EBITDA 3.0x 2.8x 2.2x
2015A 15.7 14.1
14.7 1.0 Gestamp proceeds
3.0 Capital
(1.0) 11.7 raise
7.6
(3.0) Unutilized
6.0 credit lines
5.0
Cash on
4.1 balance 2015YE sheet
as of
2015A c.$1bn 2015A Net debt $3.0bn Capital 2015A Net debt Liquidity 20162018 Debt 2019-2020 Debt
Net debt Gestamp pro-forma raise pro-forma capital Maturities 2 Maturities
proceeds Gestamp raise and
proceeds Gestamp
proceeds
Capital raise right-sizes balance sheet; pro-forma leverage substantially reduced
1 Net long-term debt, plus short term debt, less cash and cash equivalents, restricted cash and short-term investments
(including those held as part of asset/liabilities held for sale)
2 Includes $2.3bn debt maturing in 2016,
$2.7bn maturing in 2017 and $2.6bn of debt maturing in 2018.
10
_Action 2020_ plan to achieve significant improvement1
(EBITDA/T)
Includes $1bn2 transformation plan
which involves _clustering_ sites to 90Mt
gains further optimise, HAV mix and volume >85/t1 shipments
1
Includes US footprint optimisation
($250mn)2 ,
Calvert ramp-up
($250mn)2 and HAV mix 12
Brazil Value plan including
HAV mix, and domestic
volumes recovery
9
Improved competitiveness of CIS
operations 4
AMSA competiveness plan including 8
new iron ore supply agreement
4 4
Action 2020 plan is incremental to
continuing management gains efforts
which seek to
offset inflation and
industry improvement efforts
2016 ACIS BANC NAFTA Europe Mining 2020
Action 2020 plan designed to take annual FCF generation to >$2bn
with further upside potential through spread recovery
1 At current prevailing steel spreads; 2 Indicative amounts constituting management objectives. Subject to forward looking statements note below. Note: HAV refers to higher value added
These statements are forward-looking, are subject to significant business, economic, regulatory and
competitive uncertainties and contingencies, many of which are beyond the control of the Company and its management, and
are based upon assumptions with respect to future decisions, which are subject to change. Actual results will vary and those variations may be material. For discussion of some of the
important factors that could cause these
will variations, be achieved please and consult the Company the _Risk
undertakes Factors_ section no duty of to the update Companys its objectives. latest Annual Report on Form 20-F on file with SEC. Nothing in this presentation should be regarded as a representation by any person that these objectives 11
Summary
4bn net debt reduction through $3bn
capital and $1bn asset sale augments
previous actions to reduce cash flow requirements to below $4.5bn per
annum
All segments of the business FCF positive at current spot steel spreads
Pro forma net debt at 31/12/15 reduced to <$12bn / 2.2x 2015 EBITDA. Company
will restart dividend distribution once ND/EBITDA is <2x
New opportunities to deliver c.$85/t EBITDA and >$2bn free cash flow at current
steel spreads by 2020
Executing strategy to deliver value to shareholders
12
Indicative terms of the proposed rights offering
Capital increase with preferential subscription rights (structured as a non-statutory rights offering) to ArcelorMittal
shareholders
Structure of the offering Oversubscription privilege to ArcelorMittal shareholders
Rump placement for remaining unsubscribed new shares
Offer size c.$3.0bn (will correspond to the value in Euros of such amount at time of launch)
Terms Issue price (in Euro) and subscription ratio to be determined upon launch
Public offering in Luxembourg, the Netherlands, France, Spain and in the US
Distribution SEC registered offering in the US
International offering to qualified investors elsewhere
Equity issuance and asset sale. (Gestamp) proceeds would reduce net debt to below $12bn at 31/12/15 representing 2.2x 2015 pro forma
Use of proceeds EBITDA
Investment vehicles held by the Mittal Family will take up their pro-rata entitlement (c.$1.1bn)
Subscription undertaking
and underwriting
ArcelorMittal has entered into a standby underwriting commitment with Goldman Sachs International, BofA Merrill Lynch and Credit Agricole
Corporate and Investment Bank, acting as Joint Global Coordinators, for the remaining c.$1.9bn, subject to customary conditions
Lock-up 180 days for ArcelorMittal and the Mittal Family from closing
Board of Directors held on February 3, 2016
Legal authorizations and
timing The Company will
convene an EGM (30-day notice) to obtain the necessary authorisations.
The rights offering will be launched on
the back of the EGM, subject to market conditions
Preferential subscription rights and new shares expected to
be admitted to trading on the Luxembourg Stock Exchange, Euronext Paris,
Trading Euronext Amsterdam, the
Spanish Stock Exchanges and the NYSE
13
Grafico Azioni Arcelor Mittal (NYSE:MT)
Storico
Da Set 2024 a Ott 2024
Grafico Azioni Arcelor Mittal (NYSE:MT)
Storico
Da Ott 2023 a Ott 2024