AM/NS Calvert Investor Relations Event Brian Aranha, EVP Automotive Worldwide March 6-7, 2017 - ArcelorMittal
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AM/NS Calvert Investor Relations Event Brian Aranha, EVP Automotive Worldwide March 6-7, 2017
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, 2016 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
• The market opportunity
• Challenges
• Solutions
• Industry leadership
2
Key automotive industry requirements
• Regulation: Shift in product needs to
• ArcelorMittal offers the
meet regulatory targets for fuel
specific solutions to
economy as well as passenger safety
address these
during crash events
challenges
• Global platforms: Carmakers
• ArcelorMittal maintains
demand that the same products be
both its geographical
delivered to their production facilities
and its technological
worldwide, to support global platforms
leadership in the
that are designed centrally. The
automotive market
percentage of vehicles built on global
platforms will increase from 54% in
2016 to 60% in 2021*
ArcelorMittal well positioned to meet automotive industry requirements
* Source ArcelorMittal Marketing 3
Automotive growth in developed world
USA / Canada and EU28 + Turkey vehicles production
million units
• USA and Canadian automotive
23
20.16 production forecast to stabilize at
21
~14m units level
19
17 • Stability supported by
14.36
15
replacement (avg. age of fleet
13
11.5Yrs), continued economic
11
and population growth
9
7 • EU28 and Turkey production
5
recovered in 2016 with further
growth potential
USA+CANADA (LMC) USA+CANADA (IHS) EU28+Turkey (LMC)
USA/Canadian production stable, EU28 & Turkey continue to recover
4
Automotive emerging market growth
China vehicle production (‘000s)
33,255
35,000
30,000
China 26,975 • China production to grow steadily by
25,000
+6mvh in 2007 to ~33mvh by 2024
20,000
15,000
10,000
• India production to increase ~ 80% by
5,000
2024 (from 4.2mvh in 2014 to 7.6mvh in
0
2024)
Brazil, India, Russia & Mexico vehicle production (‘000’s) • Mexico production is expected to
8,000
Russia India Brazil Mexico
7,564 increase by 35% between 2016-2024
7,000
6,000 • Brazil production is expected to have a
5,000 4,171 4,695
4,000 slow recovery
3,487 3,166
3,000
2,129
2,000
2,365
• Russia production is expected to
1,000
1,193
0 recover and reach 2013 level in 2022
Strong growth expected in China, Mexico and India
Source: IHS 5
EU and US CO2 emission targets
EU and US emissions performance 2007-2025
Europe: On track to achieve the regulatory
CO2 emissions targets
250
Historical performance • EU regulation on new car fleet average
C02 (g/km)
CO2 emissions of 130 g/km by 2015 has
been met in 2015 (achieved average of 119
200 2007 2015 g/km) rapid progress in recent years
(210) Target 170
• New standards post 2021 under review
2015 expected to be lower than 95g/km
150 2007 (165)
2015 2021
increase the challenge
(159) Target 130 Target 124
2025
(101*)
2015
US: 2025 target is more challenging
100 (119)
• Maximum CO2 emissions target of 170g/km
2021
Target 95
for 2015 (achieved 165g/km) further
* 101 g/km of CO2 = 54.5 mpg
improvements required to meet the 2025
50 target of 101g/km
• The US fleet is composed of larger cars
Europe USA Regulatory targets making the CO2 target much harder to
achieve
10 kg of weight saved reduces ~1g of CO2 per km**
2015 emissions targets met greater challenge ahead
* Average emissions of new passenger cars sold in these years; ** Market consensus ( eg PSA, Renault, McKinsey) ; Source: European Federation for Transport and Environment
(T&E), EPA, ArcelorMittal Corporate Strategy analysis, Automotive Worldwide update 6
Technologies to meet US 2025 fuel
economy mandate
US fuel economy breakdown (MPG)
60
54.5 MPG
50 • A range of technologies are being
implemented by automakers to
Fuel Economy (MPG)
40 reach the 54.5 MPG target
• Power train, electrification,
30 25 MPG aerodynamics and rolling
7% resistance are the largest
8%
20 15% contributors
58%
• Weight reduction is necessary to
10 12% close the gap and compensate for
under achievement by other
0
technologies
20% BIW weight reduction is required to meet the 54.5 MPG target
Source: NHTSA Volpe Transportation Research Center CAFE Compliance and Effects Model 7
Recent US political developments
2012-2025 US CAFE* rules (MPG)
70
Cars
62.1 • In January 2017, the Obama
60 Truck administration moved forward 2025 fuel-
Average 54.5 economy standards
50
• Some US automakers are challenging the
40 41.5 early adoption of the 2025 rule,
requesting until April 2018 for mid-term
30 review
20 • While recent fuel economy gains have
been impressive, additional gains may be
10 difficult to achieve
0 • Final outcomes are still difficult to predict
1970 1980 1990 2000 2010 2020 2030
Focus remains on environmentally-responsible advanced steel light weighting
* CAFE refers to Corporate Average Fuel Economy. Figures for 2012-2025 represent sales volume-weighted averages of actual or predicted future fleet composition. 8
Four pillar automotive strategy
New products and solutions
• Develop new products and solutions to meet OEM targets for weight
reduction and crash performance
Downstream network
• Pursue downstream technology solutions through partnerships and
wholly owned subsidiaries.
Quality and service leadership
• Make existing products and solutions available wherever we have
automotive production facilities
Geographical expansion
• Expand our geographic footprint into emerging markets
Four pillars to answer key challenges and capture opportunities
9Key differentiating new products
Fortiform® MartINsite®
A family of cold rolled fully
Fortiform® S Third-generation UHSS for cold martensitic steels with current
stamping. Fortiform® HS/HF steel
(HF/HSHF) allows OEMs to realize lightweight
tensile strengths from 900 to
1700 MPa. MartINsite®
high-strength structural elements Is perfect for anti-intrusion parts
using cold forming methods such as such as bumper and door beams.
stamping. Currently available in New higher tensile strength
Europe; to be available in NAFTA in grades will be available for OEM
2017 (Calvert). qualification testing in mid-2017.
Press hardenable steels (PHS) /
Usibor® hot stamping steels offer strengths iCARe®
up to 2000 MPa. Usibor® and
Ductibor® Ductibor® can also be combined A family of electrical steels for
thanks to laser welded blanks electrified power train optimization
(LWB) to reduce weight while and enhanced machine
achieving optimal crash behavior. performance, Save, Torque and
Both currently available in Europe; Speed are specifically designed
Usibor ® 2000 to be ready for OEM for a typical electric automotive
qualification testing in NAFTA in application.
early 2017, Ductibor ® 1000 .
currently ready for qualification
testing in NAFTA.
Widest offering of AHSS steel grades which can be implemented into production vehicles
10ArcelorMittal’s S-in motion®
Demonstrating the weight saving potential of new products
ArcelorMittal generic steel solutions includes body-in-white, closures, and chassis parts
From steel provider to global automotive solutions provider
11Video
+
12S-in motion® Mid-size SUV achievements
Baseline Representative of NAFTA Mid-size SUV market
Total Mass
Component
(Steel sheets)
Vehicle weight 2046 kg
33% BIW + CMS 445 kg
AHSS Front Doors 20 kg (x2)
Rear Doors 18 kg (x2)
BIW + CMS + DIW 522 kg
Current Grades Solution Total Mass
Component Weight savings
(Steel sheets)
Vehicle weight 1944 kg 5%
53% BIW + CMS 359 kg 19%
AHSS Front Doors 16 kg (x2) 20%
Rear Doors 15 kg (x2) 17%
BIW + CMS+ DIW 420 kg 20%
102 kg weight reduction
Emerging Grades Solution Component
Total Mass
Weight savings
(Steel sheets)
Vehicle weight 1934 kg 5%
51% BIW + CMS 349 kg 21%
AHSS Front doors 16 (x2) 20%
Rear doors 15 kg (x2) 17%
BIW + CMS + DIW 410 kg 21%
112 kg weight reduction
Further weight reduction potential; value based pricing
13S-in motion® solutions for Mid-size Sedan:
Press Hardened Steels combine Laser Welded Blanks
Baseline Solution
37.2 kg per side Module weight: 24.4 kg per side
Mass savings: 12.8 kg (34%)
DP590 1.25 mm
0.9 mm
LWB
DP590 1.45 mm Usibor® 1500
DP590 1.75 mm
DP780 1.0 mm 1.4 mm
0.7 mm DP590 1.5 mm LWB
Usibor®1500
DP590
1.45 mm DP590 1.65 mm 0.7 mm
0.9 mm
Tensile strength values 1.3 mm
CR340LA 1.6 mm
0.9 mm 1.2 mm
Usibor®1500 1.4 mm
1.0 mm
1.5 mm
DP590 1.25 mm
DP780
1.85
0.7 mm
mm
DP590 1.0 mm
DP590 1.65 mm 1.3 mm
1.3 mm
DP590 1.6 mm
DP980 1.5 mm
One piece LWB Usibor®1500 - Ductibor®500
CR340LA 1.3 mm
26 kg per vehicle can be saved on the bodyside structure due to extensive use of AHSS,
Press Hardenable Steels (PHS), MartINsite® and Laser Welded Blank solutions
14Technology leadership ranking by
customers
2015
Ford 2015 #1 Global
GM 2015 Supplier of the Year PSA Peugeot Citroën 2015 Best Technology Ranking for Toyota 2016 #1 Global
for the 3rd consecutive year Supplier Award – Value Creation 7th Consecutive Year Technology Rating
2012 2013 2014
Volkswagen 2012 Business
Excellence Award
Fiat Chrysler South Amercia 2013
Supplier of the Year
2014 Automotive News PACE Award
– Acura MDX Door Ring
Majority of OEMs in Europe and NAFTA rank ArcelorMittal #1 in Technology
15ArcelorMittal preferred AHSS supplier
AHSS evolution* ArcelorMittal market share**
40%
AHSS share of total steel
35%
30%
25%
demand
20%
15%
10%
5%
NAFTA
0%
2005 2010 2015 2020 2025
• ArcelorMittal is maintaining overall market share
in Europe, and increasing in NAFTA
• Our AHSS share is higher than overall market
share
• As the technology requirements to develop and
produce new AHSS like Fortiform® are higher, our Europe
share in these products has further growth
potential
Market share in AHSS exceeds overall share
* Source: Ducker **Source: Regional ArcelorMittal Marketing Intelligence 16Steel to remain material of choice for auto
North American Utility of the Year 2017 Chrysler Pacifica
• Volvo
New TheXC-90
all-new Pacifica body structure is made up of 72% advanced steels and 250 lbs.
lighter than the model it replaced.
• The Pacifica is the lightest minivan on the road and the only to earn NHTSA’s five-star
safety rating.
• The Pacifica features ArcelorMittal’s S-in motion® five-piece laser-welded door ring.
Chrysler Pacifica uses 72% AHSS
17Value of co-engineering: Chrysler Pacifica
1. Crash Analysis Co-engineering
helped save
10kg/vehicle on
Roof
the Door Ring
crush
Narrow Usibor® 1500
offset Ductibor® 500
impact
(SORB) Side
impact
Pole
impact
2. Forming Analysis 3. Final Part 4. Vehicle Assembly
After 36-months, 2,000 engineering hours and approximately 300 design iterations, the team agreed
on one central concept – the world’s first five-piece hot-stamped laser-welded door ring and b-pillar
18Global presence and reach
Automotive production facilities
Alliances & JV
Commercial Teams
R&D Centers
Vehicle production 2016
> 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
Global supplier with increasing emerging market exposure
Source: LMC figures for Western and Eastern Europe and Russia; IHS figures for all other regions; personal cars and light commercial vehicles < 6t
19NAFTA automotive landscape
• Decline in Canadian production
• US and Mexico expected to grow
• Mexico’s growth may moderate due to recent political and policy trends, but lack of assembly
capacity in the US will make dramatic change difficult
Canadian, US, and Mexican automotive production change 2016 to 2025F
Canada 2016 2025F
-530,399 units
14% 10%
USA
+435,697 units 19% 25%
67% 65%
Mexico AM/NS
+1,309,364 units Calvert Canada USA Mexico
AM/NS Calvert ideally located to serve growing markets
Source: LMC
20NAFTA business integrates into Global
automotive strategy
New products solutions
– Our new products and solutions provide lightweighting & improve crash performance
– Keep developing the key breakthrough products (Usibor®,Ductibor®,…)
– Investment to offer the 3rd Generation AHSS at AM/NS Calvert
– To keep developing co-engineering activities with our customer
Downstream network, quality and service leadership
– AM/NS Calvert ideally located to serve growing markets in USA and Mexico
– A strong presence with AMTB plants and JV
Concord, Ontario
Woodstock, Ontario (new plant)
Pioneer, Ohio
Detroit, Michigan(project)
Murfeesboro, Tennessee
Delaco Tonawanda, NY (JV)
Delaco Dearborn, Michigan (JV)
Delaco Montezuma, Iowa (JV)
Silao, Mexico
San Luis Potosi, Mexico
– Investment to develop Laser Welded Blanks as a mainstream light-weighting solution
NAFTA initiatives aligned with Global Automotive strategy
21Capital investments to support
existing and new products
Selection of further investments:
• Investments at AM/NS Calvert to upgrade finishing facilities to produce 3rd Generation
AHSS
• ~ €200 million of investments at ArcelorMittal Gent and ArcelorMittal Liège to enable
production of Fortiform®, our family of 3rd Generation AHSS
• €63 million investment on Jet Vapor Deposition (JVD) line in Liège (Belgium). JVD is a
breakthrough coating technology developed by ArcelorMittal. The line will produce
Jetgal®, a new coating for AHSS steels for automotive industry
• Investments at AMTB Americas to support the development of Laser Welded Blanks as
a mainstream light-weighting solution
Capital investments to fund franchise business
22Current and future material mix
Light weighting trend to continue:
• Carbon fibre not expected to be an imminent threat due to high cost
• Aluminium still too expensive to play a role in mass market segment
• Steel remains the most recyclable metal (100% recyclable / environmentally
friendly)
• Advanced High Strength Steels (cold & hot stamping) to be dominant
• Emerging grades have potential to substitute aluminium parts
Steel to remain material of choice with greater share of AHSS
23Takeaways
Regulatory targets and trend towards global platforms created needs for
the automotive industry
• Continuous improvements to simultaneously meet fuel efficiency and safety
targets
• Procure same materials across different regions
ArcelorMittal is investing to deliver responses to these needs
• S-in motion® demonstrated that a body-in-white reduction of 20% can be
achieved via our current portfolio of steel products and solutions
• Further weight reduction will be achieved with our upcoming steel grades
• Our global footprint positions us well to capture market growth
• AM/NS Calvert is strategic for NAFTA automotive
ArcelorMittal and steel will remain the choice of the automotive industry
24ArcelorMittal IR app and contacts
Daniel Fairclough – Global Head Investor Relations
daniel.fairclough@arcelormittal.com
+44 207 543 1105
Hetal Patel – UK/European Investor Relations
hetal.patel@arcelormittal.com
+44 207 543 1128
Valérie Mella – European/Retail Investor Relations
valerie.mella@arcelormittal.com
+44 207 543 1156
Maureen Baker – Fixed Income/Debt Investor Relations
maureen.baker@arcelormittal.com
+33 1 71 92 10 26
Lisa Fortuna – US Investor Relations
lisa.fortuna@arcelormittal.com
+312 899 3985
We have released a new ArcelorMittal investor relations app available for download on IOS or android devicesWhat are laser welded blanks?
• Laser welded blanks are two or more flat steel sheets welded together
by a laser. These sheets can:
• Have different thicknesses
• Be made of different alloys
• Have different coatings
• Using laser welded blanks, automotive engineers can design parts with
the necessary properties where they are needed, optimizing weight and
safety
Laser Pressure
1 part:
- 2 different thicknesses
- 2 different alloys
Laser welding Stamping
Applying the necessary properties where they are needed
26Combining LWB and hot stamping
for maximum weight saving
B-pillar inner Seat cross member
B-pillar
Rear side member
A-pillar
Shotgun
Front side member
Door ring
Front bumper beam
Tunnel
Front rail extension Ductibor® Usibor®
Optimum balance b/w lightweight and strength thanks to Laser Welded Blanks
27ArcelorMittal Tailored Blanks footprint Existing Plants New Plants (
VAMA greenfield JV facility in China
• 1.5 MT state-of-the-art production facilities VAMA: Valin ArcelorMittal Automotive
• Well-positioned to serve growing automotive market target areas and markets
• Central sales and technology support office in Changsha with
satellite offices in proximity to VAMA’s customers FAW-VW &
BMW
• 6 EVI and technology support engineers for advanced DBAIC,
engineering based in Shanghai and in Changsha aimler &
Nissan
• VAMA will represent 10% of Chinese automotive steel market Beijing
• Close cooperation with emerging electrical vehicles
manufacturers
Auto steel consumption accessible to VAMA target products (market size in MT) Geely, VW, GM, KIA,
BYD, Changan, Suzuki,
+29% CFMA & FAW-VW
SAIC & Chery, NextEV
Shanghai
20 22
17 Changfeng, Fiat, DPCA,
Dongfeng, Honda, JMC
VAMA & Suzuki, SVW, BAIC
Loudi
2014 2017F 2020F SAIC, Toyota, GM, Honda,
Nissan & BYD Guangzhou
VAMA well positioned to supply growing Chinese auto market (+35% 2014-2020)
BYD: Build Your Dreams; CFMA: Changan Ford Mazda Automobile; SAIC: Shanghai Automotive Industry Corporation; JMC: Jiangling Motors Corporation
29VAMA: Leveraging ArcelorMittal
Technology
Auto finishing facility fully supported with ArcelorMittal technology
VAMA PLTCM
Valin – Liangang
Hot Strip Mill Hot rolled coil
1.0M tonnes 0.5M tonnes
• ArcelorMittal technology transfer team
permanently detached to Lianyuan Steel:
• Process: Development of automotive grades
to supply substrate to VAMA and coils to
wheels market
JV Shareholder structure: ArcelorMittal Chief Technology Officer team dedicated to
ArcelorMittal owns 49% direct • DesignVAMA Mixed
production CAL
assets & select VAMA CGL
equipment suppliers
51% Valin Steel • Develop metallurgical routes for VAMA scope
• Deploy automotive specific process know how
ArcelorMittal production technology to be deployed through VAMA
30Small offset crash performance comparison
2013 Other OEM 2017 Chrysler Pacifica
Design without Hot Stamped Door Ring Design with Hot Stamped Door Ring
With five-piece laser-welded door ring, 2017 Pacifica showed very low deformations in the door
opening area and the driver’s side door is still opened after the crash event
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