ArcelorMittal Société Anonyme 24
Transcription
ArcelorMittal Société Anonyme 24
ArcelorMittal Société Anonyme 24-26, boulevard d’Avranches, L-1160 Luxembourg Grand-Duchy of Luxembourg R.C.S. Luxembourg B 82.454 (the “Company”) ______________________________________________________ MINUTES OF THE ANNUAL GENERAL MEETING (The "General Meeting" or “AGM”) HELD ON TUESDAY MAY 5, 2015 from 2:00 PM (CET) at the Company’s offices at 24-26, boulevard d’Avranches, L-1160 Luxembourg, Grand-Duchy of Luxembourg ______________________________________________________ The Chairman and CEO, Mr. Lakshmi N. Mittal, welcomed the shareholders to the General Meeting of ArcelorMittal. Mr. Lakshmi N. Mittal announced that the following persons had taken place on the podium: Mr. Aditya Mittal, CFO and Member of the Group Management Board, CEO of ArcelorMittal Europe with additional responsibility for Investor Relations; Mr. Michel Wurth member of the Board of Directors (the “Board”); Davinder Chugh, Member of the Group Management Board, CEO of ArcelorMittal Africa and CIS; Mr. Henk Scheffer, Company Secretary, Mr. Lewis B. Kaden, Lead Independent Director; Mr. Lou Schorsch, Member of the Group Management Board, CEO of ArcelorMittal Americas; Mr. Genuino Christino, Vice President Group Finance; and Mr. Henri Blaffart, Executive Vice President Human Resources and Shared Services. The Chairman pointed out the presence of Mrs. Karyn Ovelmen proposed for election to the Board and the following members of the Board in the first row of the audience: Mr. Narayanan Vaghul, Mr. Wilbur Ross, Mrs. Vanisha Mittal, Mrs. Suzanne Nimocks, Mr. Antoine Spillmann, Mr. Tye Burt, Mr. Jeannot Krecké and Mr. Bruno Lafont. Also present were Mr. Larry Koch and Mr. Vafa Moayed from Deloitte, ArcelorMittal’s independent auditor, who had examined the 2014 financial statements submitted to the General Meeting. Mr. Lakshmi N. Mittal, in his capacity as Chairman of the General Meeting, suggested appointing Mr. Antoine Spillmann and Mr. Jeannot Krecké as scrutineers and Mr. Henk Scheffer as secretary of the meeting, to which there was no objection from the shareholders present so that the scrutineers and secretary were appointed. Mr. Lakshmi N. Mittal drew the attention of the participants to the fact that shareholders must own at least one share of ArcelorMittal in order to attend the General Meeting and that they must have followed the procedures described in the convening notice published on April 3, 2015. The Chairman requested Mr. Scheffer to explain technical points about the General Meeting. Mr. Scheffer pointed out that members of the press were authorised to attend the General Meeting but that the General Meeting were private. Hencehe informed them that they were not allowed to make any audio or video 1 recordings. He requested the participants to keep their mobile phones switched off for the duration of the meeting. Mr. Scheffer explained that the processing and counting of votes would be carried out by the external service provider, IML. The General Meeting would validly deliberate on the resolutions regardless of the number of shareholders present and the number of shares represented, and that the resolutions on the agenda would be adopted by a simple majority of the votes validly cast by the shareholders present or represented. The publications required by law had been deposited with the bureau. The documents and information required by law had been sent or made available to the shareholders in a timely manner. The convening notice for this General Meeting had been published in Luxembourger Wort, a Luxemburg local newspaper, on April 3, 2015 and in the Luxembourg official gazette Mémorial C on April 3, 2015, as well as on the Company’s website, www.arcelormittal.com. Copies of these publications can be consulted at the registration table. Thereafter, the Chairman confirmed that the General Meeting had been convened in accordance with Luxembourg law, was validly constituted and could validly deliberate and resolve on all their respective agenda items. The Chairman read out the agenda of the General Meeting: he indicated that items 1 to 5 and item 7 of the agenda were routine items for any annual general shareholders meeting and that after presenting the 2014 results and commenting on trends for 2015, the non-routine agenda items will be reviewed in more detail. The secretary drew attention to the pack with the ArcelorMittal logo which shareholders had received and that contained special cards on which shareholders could write questions, should they wish to raise any question during the Questions & Answers sessions, and explained that it also contained a French version of the presentation. He also reminded the meeting of the fact that only the shareholders present in person or proxy holders were entitled to ask questions. Questions from shareholders would be answered following the presentation of the 2014 accounts and the non-routine agenda items of the General Meeting. Presentation of 2014 results Mr. Lakshmi N. Mittal presented the 2014 results of ArcelorMittal and made specific highlights on the Company’s operations and strategy, as attached hereto as Annex A AGM Thereafter, the Chairman turned his attention to the review of the General Meeting agenda items 6, 7, and 9. He proposed Mr. Narayanan Vaghul for re-election, the Company’s non-executive and Independent Director in order to ensure the right balance between knowledge, skills and experience and the need for renewal and continuity in the Board. The Chairman then explained the rationale behind the proposal for the election of Mrs. Karyn Ovelmen as a member of the ArcelorMittal Board for a three-year term. The Board is convinced that her skills and extensive knowledge of the financial aspects of running and overseeing a substantial industrial business will contribute to the effective functioning of the Board of Directors. Continuing, he also commented on the proposals to re-elect Mr. Wilbur Ross and Mr. Tye Burt. Based on the individual qualifications, experience and their contributions to the Board, the Board concluded that these gentlemen should be re-elected and Mrs Ovelmen elected as members of the Board for a three-year 2 mandate that will automatically expire on the date of the annual general meeting of shareholders to be held in 2018. The Chairman pointed out the fact that the biographical information of the directors proposed for election or re-election had been made available on the Company’s website by the time of the publication of the convening notice Mr. Scheffer commented on item 7 of the Agenda, relating to the renewal of the authorisation of the Board and to the corporate bodies of other companies in the ArcelorMittal group to acquire shares in the Company. The Board proposed the cancellation of the current authorisation granted to the Board by the General Meeting of shareholders held in 2010 and to authorise, effective immediately after the General Meeting, the Board and the corporate bodies of other companies in ArcelorMittal to acquire and sell shares of the Company. This authorisation will allow the Company to hold or repurchase shares not exceeding 10% of the Company’s issued share capital. The purpose of this authorisation is for the Company to have flexibility and this authority can be used to minimize dilution from employee’s share plans, to fund share exchange offers for acquisitions and to improve the efficiency of the balance sheet. Thereafter, Mr. Scheffer commented item 9 relating to the authorisation of grants to the Board of share based incentives to enhance the long term performance of the Company and align the members of the Leadership Team to the Company’s objectives. Since there were no changes on the plan in comparison to the previous year, he highlighted the most relevant information on this, reminding the participants that a detailed explanatory information had been made available on the Company’s website by the time of the publication of the convening notice. The main objective of the GMB PSU Plan is to be an effective performance-enhancing scheme for Group Management Board members based on the achievement of ArcelorMittal’s strategy aimed at creating measurable long-term shareholder value. Awards under the GMB PSU Plan are subject to the fulfillment of cumulative performance criteria over a three-year period compared to a peer group of companies based on Total Shareholder Return and Earnings Per Share. The 2015 Cap for the number of PSUs that may be allocated to the Group Management Board members and other retention based grants below the Group Management Board level, if any, was proposed to be set at a maximum of 5,000,000 (five million) shares representing less than 0.28% of the outstanding share capital on a diluted basis. Questions & Answers (“Q&A”) session At the request of the Chairman, the Secretary introduced the Q&A session with an explanation of the procedure. A summary of the Q&A is attached hereto as Annex B. The Q&A session lasted approximately thirty (30) minutes. Vote The Chairman then closed the Q&A session and stated that, according to the attendance list that had been communicated to him, it showed that the shareholders present or represented at today’s meeting own a total of shares of 996,521,991 shares, corresponding to 59, 84 % of the outstanding voting rights. The Chairman announced that he would first submit the proposed resolutions related to items 1 to 9 of the agenda to the vote. 3 He asked the secretary to inform the shareholders about the procedure to be followed for the voting process. The secretary explained that the shareholders will vote on each of the resolutions by using an electronic voting device that had been handed to the shareholders upon registration. In addition, he detailed the functioning of the electronic voting device to the shareholders. The shareholders vote on the resolutions after the reading out loud of each resolution. AGM RESOLUTIONS 1. Report of the Board of Directors and the Auditors Reports on the annual accounts and the consolidated financial statements for the 2014 financial year No vote was required for this item. 2. Approval of the Consolidated Financial Statements for the 2014 financial year Resolution I The General Meeting, after having reviewed the management report of the Board and the report of the independent auditor, approved the Consolidated Financial Statements for the financial year 2014 in their entirety, showing a consolidated net loss of USD 974 million. The resolution was approved with 99, 98% of the votes casts ‘for’ and 0, 02% ‘against’. 3. Approval of the Parent Company Annual Accounts for the 2014 financial year Resolution II The General Meeting, after having reviewed the management report of the Board and the report of the independent auditor, approved the Parent Company Financial Statements for the financial year 2014 in their entirety, showing a profit for the Company as parent company of the ArcelorMittal group of USD 488 million. The resolution was approved with 99,98% of the votes casts ‘for’ and 0, 02% ‘against’. 4. Allocation of results, determination of dividend, and determination of compensation to be allocated to the members of the Board of Directors in relation to the financial year 2014 Resolution III The General Meeting acknowledged the net profit of USD 488 million and the fact that no allocation to the legal reserve or to the reserve for treasury shares was required. On this basis, the General Meeting upon the proposal of the Board, decided to pay a dividend out of profit brought forward, and to allocate the results of ArcelorMittal based on the Parent Company Financial Statements for the financial year 2014 as follows: 4 Profit for the year USD 487,722,806 Profit brought forward (Report à nouveau) USD 36,586,319,860 Results to be allocated and distributed USD 37,074,042,666 Transfer to reserve of treasury shares -- Allocation to the legal reserve USD 81,432,993 Directors’ remuneration for financial year 2014 (as per Resolution IV, below) USD 2,031,092 Dividend of USD 0.20 (gross) per share relating to financial year 2014* USD 332,879,413 Profit carried forward USD 36,657,699,168 * On the basis of 1,664,397,066 shares in issue at 31 December 2014 net of treasury shares held by the Company. Dividends will be paid on 15 June 2015, resulting in a total annualized cash dividend per share of USD 0.20. The General Meeting acknowledged that the dividend of USD 0.20 (gross) per share will be paid on 15 June 2015. The proposal was approved with 99,87% of the votes casts ‘for’ and 0, 13% ‘against’. Resolution IV Given the third resolution above, the General Meeting set the amount of total remuneration for the Board in relation to the financial year 2014 at USD 2,031,092, based on the annual fees set out in the convening notice. The resolution was approved with 96,68% of the votes casts ‘for’ and 3,32% ‘against’. 5. Discharge of the directors Resolution V The General Meeting decided to grant discharge to the directors for the financial year 2014. The resolution was approved with 98,2% of the votes casts ‘for’ and 1,91% ‘against’. 6. Election of members of the Board of Directors The mandate of each of the three following directors has come to an end on the date of the General Meeting: Mr. Narayanan Vaghul, Mr. Wilbur Ross and Mr. Tye Burt. The Board proposed the re-election of Mr. Narayanan Vaghul, Mr. Wilbur Ross and Mr. Tye Burt and the election of Mrs. Karyn Ovelmen as members of the Board for a three-year term. 5 Resolution VI The General Meeting re-elects Mr. Narayanan Vaghul as director of ArcelorMittal for a three-year mandate that will automatically expire on the date of the annual general meeting of shareholders to be held in 2018. The resolution was approved with 97,14% of the votes casts ‘for’ and 2,86% ‘against’. Resolution VII The General Meeting re-elects Mr. Wilbur Ross as director of ArcelorMittal for a three-year mandate that will automatically expire on the date of the annual general meeting of shareholders to be held in 2018. The resolution was approved with 90,77 % of the votes casts ‘for’ and 9,23% ‘against’. Resolution VIII The General Meeting re-elects Mr. Tye Burt as director of ArcelorMittal for a three-year mandate that will automatically expire on the date of the annual general meeting of shareholders to be held in 2018. The resolution was approved with 99,17 % of the votes casts ‘for’ and 0,82% ‘against’. Resolution IX The General Meeting elects Mrs. Karyn Ovelmen as director of ArcelorMittal for a three-year mandate that will automatically expire on the date of the annual general meeting of shareholders to be held in 2018. The resolution was approved with 99,97 % of the votes casts ‘for’ and 0,03% ‘against’. 7. Renewal of the authorisation of the Board of Directors of the Company and of the corporate bodies of other companies in the ArcelorMittal group to acquire shares in the Company Resolution X The General Meeting decides to renew the authorisation of the Board of the Company and of the corporate bodies of other companies in the ArcelorMittal group to acquire shares in the Company. The resolution was approved with 97,88% of the votes casts ‘for’ and 2,12% ‘against’. 8. Appointment of an independent company auditor in relation the Parent Company Financial Statements and the Consolidated Financial Statements for the financial year 2015 Resolution XI The General Meeting decided to appoint Deloitte Audit S.à r.l., with registered office at 560, rue de Neudorf, L-2220 Luxembourg, as independent auditor for the audit of the Parent Company Annual Accounts and the Consolidated Financial Statements for the financial year 2015. The resolution was approved with 99,92% of the votes casts ‘for’ and 0,07% ‘against’. 6 9. Authorisation of grants of shares based incentives Resolution XII The General Meeting acknowledged the background information provided earlier in the meeting about the GMB PSU Plan and other retention based grants and authorised the Board to allocate up to 5,000,000 shares under the 2015 plan and to adopt any rules and measures to implement the GMB PSU Plan and other retention based grants below the level of the Group Management Board. The resolution was approved with 96,22% of the votes casts ‘for’ and 3,78% ‘against’. * * * * * CLOSING OF THE MEETING The Chairman thanked the shareholders for their participation to the General Meeting and expressed his wish to see them again at the Company’s next annual general meeting of shareholders. He then closed the General Meeting at 3:00 p.m. (CET). Signed by: Lakshmi N. Mittal (Chairman) Henk Scheffer (Secretary) Tye Burt (Scrutineer) Jeannot Krecké (Scrutineer) 7 Annex A ArcelorMittal 2015 AGM 5 May 2015 2:00 p.m. CET AGM 5 May 2015 Thank you 1 Agenda AGM 5 May 2015 AGM 1- 23456789- Presentation of the management report of the Board of Directors and the reports of the independent company auditor on the financial statements of the parent company (the “Parent Company Financial Statements”) and the consolidated financial statements of the ArcelorMittal group (the “Consolidated Financial Statements”) for the financial year 2013 in each case prepared in accordance with the International Financial Reporting Standards as adopted by the European Union Approval of the Consolidated Financial Statements for the financial year 2013 - (AGM Resolution I) Approval of the Parent Company Financial Statements for the financial year 2013 - (AGM Resolution II) Allocation of results and determination of the dividend and the remuneration of the members of the Board of Directors in relation to the financial year 2013 - (AGM Resolution III and IV) Discharge of the directors – (AGM Resolution V) Election of members of the Board of Directors: Mr Narayanan Vaghul, Mr. Wilbur Ross, Mr. Tye Burt and Mrs. Karyn Ovelmen – (AGM Resolutions VI, VII, VIII, IX) Renewal of the authorisation of the Board of Directors of the Company and of the corporate bodies of other companies in the ArcelorMittal group to acquire shares in the Company (AGM Resolution X) Appointment of an independent company auditor in relation to the Parent Company Financial Statements and the Consolidated Financial Statements for financial year 2014 – (AGM Resolution XI) Authorisation of grants of share based incentives – (AGM Resolution XII) 2 AGM 2015 Lakshmi Mittal, Chairman and CEO Luxembourg, 5 May 2015 © ThyssenKrupp Steel USA, LLC 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. Forwardlooking 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, 2014 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 http://www.arcelormittal.com/corp/investors/presentations/. 4 2014 Strategic Report Card 2013 Investor Day Targets EBITDA Shipments Medium term target $150/t Increase to 95Mt medium term 2014 Performance Underlying EBITDA up 8.5% Steel only EBITDA/t up $14/t Medium Term Target Update Medium term remains $150/t Shipments increased 3.0% to following expansion of core markets Increase to 95Mt medium term Net debt declined $0.2bn in 2014 despite $0.7bn perpetual repayment Medium term remains $15bn 85Mt Net Debt Medium term target $15bn Mgt Gains 2013-15 target $3bn $2.1bn achieved at end of 2014 2015 target remains $3bn Iron Ore Expand capacity to 84Mtpa by end 2015 run rate achieved at AMMC 24MT ↔ Liberia expansion delayed Medium term capacity target remains >84Mt given stretch potential at Liberia and AMMC Solid progress relative to targets 5 Safety focus Health & Safety Lost time injury frequency (LTIF) rate* Mining & steel, employees and contractors 3.1 2.5 1.9 1.8 1.4 1.0 2007 2008 2009 2010 2011 2012 0.85 0.85 2013 2014 Our goal is to be the safest Metals & Mining company * LTIF = Lost time injury frequency defined as Lost Time Injuries per 1.000.000 worked hours; based on own personnel and contractors 6 Recap Improved EBITDA despite lower iron ore price Better Steel offset weaker Mining performance in 2014 EBITDA per tonne (US$/t) on underlying basis* 150 Underlying* EBITDA $m +8.5% 6,749 Including $350m for NAFTA weather 7,324 +27.3% 6,098 74 Steel 4,343 4,769 82 90 4 6,072 86 -36.8% Mining 1,755 1,980 2012 2013 1,252 2014 2012 2013 2014 Midterm Target Steady progress towards $150/t medium term target * Underlying basis; FY 2014 includes the negative impact of $90m following the settlement of US antitrust litigation and a $76m provision related to onerous annual tin plate contracts at Weirton in the US, offset by the $79m gain on disposal of Kuzbass coal mines in Russia. In addition $350m from weather related costs impacting the US operations in 1H’14; ** FY 2013 included the positive impact of a $47m fair valuation gain relating to the acquisition of an additional ownership interest in DJ 7 Galvanizing in Canada and $92m of DDH income. FY 2012 includes one-time gains totalling $1.6bn 7 Cost savings on target $3bn management gains program ($ billion) Annualized savings Run-rate of Asset Optimization savings at year end ($ million) Savings targets Residual costs 1,200 Running total Realised savings 1,000 800 3.0 2.1 600 400 1.1 200 0 2013 • • • • • 2014 2015F 3 year Management Gains plan: Annualized savings of $2.1bn achieved by end of 2014. On target to achieve $3bn by end of 2015 Bottom up plan across the group 2/3 variable cost and 1/3 fixed cost focussed Improvements in reliability, fuel rate, yield, productivity etc Leveraging extensive benchmarking opportunities within the Group 2011 • • 2012 2013 2014 2015F Including “residual costs”, the targeted runrate savings of $1bn has been clearly exceeded Further incremental EBITDA impact in 2015 as residual costs disappear from the system Ongoing focus on cost reduction 8 Mining volumes driving lower costs • Volume and growth: FY14 market priced iron ore shipments +13.2%. Expect +5% growth in 2015 AMMC: Successful completion to 24Mtpa Liberia: Phase 1 DSO 5Mt complete; Phase 2 currently delayed due to Ebola Baffinland JV: Early revenue phase to target 3.5Mt production run-rate in 2H’ 15 • Costs: overall mining costs reduction of 7% in 2014 vs. 2013; a further 10% reduction in average unit costs are expected in 2015 Iron ore marketable shipments (MMt) AMMC concentrate cost index* Kazakhstan coal cost index* +13% 25 28 29 35 40 42 2010 2011 2012 2013 2014 2015F -13% -30% +5% 2013 2014 2015F 2013 2014 2015F Continued mining volume growth and cost progress * Index calculated with base 100=2013 9 Auto developments capturing growth • Global demand growth favors ArcelorMittal exposure* – ArcelorMittal is the No.1 supplier of flat carbon steels to the global automotive sector – ArcelorMittal provides >13Mt of steel to the ~87m vehicles produced worldwide • AM/NS Calvert progress update – Integration of ArcelorMittal Tubarao and ArcelorMittal Mexico as slab suppliers to JV continued into 4Q’14. Trials in process to qualify these slab sources with our customers • VAMA China automotive steel JV – Global market expected to grow to 103 million vehicles in 2018* (19% above 2014) – Inauguration of the cold mill complex during 2Q’14; first automotive coils expected 1Q’15 – EU28 auto production expected to grow by 2.1 million units over the next 4 years – – NAFTA light vehicle production expected to grow by 1.8 million units by 2018 Initial capacity of 1.5Mt expandable up to 2.3Mt support ~10% share of the fast-growing China automotive industry – Robust Chinese automotive market: > 34% growth to 29.9 million vehicles by 2018 • Steel to remain the material of choice for auto – ArcelorMittal’s AHSS offering allows for significant weight savings while improving safety – Helps customers meet their sustainability requirements in order to meet future regulations on tailpipe emissions – Recent information released by major OEMs supports the case for steel remaining the material of choice Steel to remain the material of choice for auto * source LMC Auto Jan 2015 10 Solid cash flow performance in 2014 Net debt bridge FY13 v FY14 ($bn) Net debt* (“NFD”) progression ($bn) Includes Senegal payment $150m and $90m US litigation costs 0.7 16.1 0.5 (0.6) (0.6) 15.8 15.8 (3.9) 3.7 2013 FY Cashflow Capex Dividend Perpetual M&A Forex & 2014 FY from bond proceeds Others operations • Improved cash flow through lower capex, working capital efficiency and reduced net interest • $1.1bn total dividends / perpetual bond repayment in 2014 22.5 26.5 18.8 19.7 22.5 21.8 16.1 15.8 2007 2008 2009 2010 2011 2012 2013 2014 • Lowest level of net debt since the merger in 2006 • Medium term net debt target remains $15bn Recovering the investment grade credit rating remains a strategic priority * Net debt refers to long-term debt, plus short term debt, less cash and cash equivalents, restricted cash and short-term investments (including those held as part of asset/liabilities held for sale) 11 Lower net debt remains a priority Net debt* (“NFD”) progression ($bn) -9.1 Lowest level since the merger • Lowest level of net debt since the merger in 2006 • $10bn of liquidity (cash and undrawn credit lines) at end 2014 • Medium term net debt target of $15bn remains • Current commitments until $15bn NFD achieved: 24.9 15.8 15.0 - No increase in growth capex - No net outflow M&A 3Q’11 4Q’14 Medium term target • Once $15bn NFD reached, board will determine best use of surplus FCF: - Increase dividends? - Invest for growth? - Reduce NFD further? Recovering the investment grade credit rating remains a strategic priority * Net debt refers to long-term debt, plus short term debt, less cash and cash equivalents, restricted cash and short-term investments (including those held as part of asset/liabilities held for sale) 12 ArcelorMittal Consolidated Statements of Operations In m illions of U.S. dollars Sales Depreciation Impairment Restructuring charges Operating income Operating margin % Loss from, associates, joint ventures and other investments 2013 2014 79,440 (4,695) (444) (552) 79,282 (3,939) (264) - 1,197 1.5% 3,034 3.8% (442) (172) Net interest expense Foreign exchange and other financing costs (1,777) (1,338) (1,469) (1,913) Loss before taxes and non-controlling interests (2,360) (520) (215) (454) (2,575) (974) Income tax expense Net loss including non-controlling interests Non-controlling interests Net loss attributable to owners of the parent EBITDA (1) EBITDA Margin % 30 Figures based on International Financial Reporting Standards (IFRS) • • • • (112) (2,545) (1,086) 6,888 8.7% 7,237 9.1% (1) EBITDA is defined as operating income plus depreciation, impairment expenses and exceptional items 2014 v. 2013 • • • Sales decreased marginally mainly due to lower steel and iron ore selling prices Impairment charges totalled US$ 264 million in 2014 Restructuring charges were nil in 2014 EBITDA increased by 5% from US$ 6.9 billion in 2013 to US$ 7.2 billion in 2014 Operating income amounted to US$ 3.0 billion in 2014 Income tax expense of US$ 454 million in 2014 Net loss amounted to US$ 1.1 billion in 2014 compared to net loss of US$ 2.5 billion in 2013 13 ArcelorMittal Consolidated Statements of Cash Flows In millions of U.S. Dollars 2013 Operating activities Net income (loss) attributable to owners of the parent Adjustments to reconcile net income (loss) to net cash provided by operations Non-controlling interest Depreciation and impairment Restructuring charges Deferred income tax Change in operating workling capital Other operating activities Net cash provided by operating activities Investing activities Purchase of property, plant and equipment and intangibles Other investing activities (net) Net cash used in investing activities Financing activities (Payments) proceeds relating to payable to banks and longterm debt Dividends paid Combined equity offering Repayment of subordinated perpetual capital securities Disposal / (Acquisition) of non-controlling interests Other financing activities (net) Net cash (used in) provided by financing activities Net (decrease) increase in cash and cash equivalents 2014 v. 2013 2014 (2,545) (1,086) • (30) 5,139 552 (90) 764 506 4,296 112 4,203 (90) 368 363 3,870 (3,452) 575 (2,877) (3,665) 588 (3,077) (4,294) (1,553) (415) 3,978 1,100 (128) 241 (458) (657) (17) (65) (2,750) 1,660 (1,957) Cash and cash equivalents transferred to assets held for sale (9) Effects of exchange rate changes on cash 19 (230) 1,670 (2,179) Changes in cash and cash equivalents Figures based on International Financial Reporting Standards (IFRS) • • • Net cash provided by operations decreased from US$ 4.3 billion to US$ 3.9 billion CAPEX was higher at US$ 3.7 billion in 2014 compared to US$ 3.5 billion in 2013 Cash dividend was stable at US$ 0.4 billion in 2013 and US$ 0.5 billion in 2014 Cash outflow of US$ 2.3 billion in 2014 including US$ 1.6 billion of debt repayment and US$ 0.7 billion from repayment of subordinated perpetual capital securities 8 14 ArcelorMittal S.A. Parent Company Statements of Operations 2014 v. 2013 In m illions of U.S. dollars 2013 2014 General and administrative expenses (37) (614) Operating loss (37) (614) Income from subsidiaries and associates Impairment of investments Financing costs - net 2,792 (6,647) (1,375) 2,031 (99) (1,436) Income (loss) before taxes Income tax benefit Net income (loss) (5,267) 654 (4,613) (118) 606 488 Figures based on International Financial Reporting Standards (IFRS) • • Net result of the Parent Company in 2014 was a net income of US$ 488 million compared to a net loss of US$ 4,613 million in 2013. Net income in 2014 included US$ 2 billion of income from subsidiaries and associates and tax benefit of US$ 0.6 billion partly offset by financing costs of US$ 1.4 billion and general and administrative expenses of US$ 0.6 billion 15 ANNEX B Questions and Answers session at the May 5, 2015 General Meeting Below is a summary of the questions and answers raised during the General Meeting. Question: Share price: why do you perform better or under perform more than your peers? Answer: To a great extent the decline of our share price in 2014 was driven by factors beyond our control: the economic slowdown in China, increased steel exports and a significant fall in the iron ore price, political risks in Russia/Ukraine and economic uncertainty in Brazil. Clearly these factors are beyond our control but will impact on our performance. Considering our stock on a total shareholder return basis, which combines share price movement and dividends, in 2013 we performed well relative to our peer group, ranking at the top of the second quartile. But in 2014 we did underperform. The worst performers from our peer group (and we compare ourselves to steel and mining peers) were those companies with exposure to Brazil. Clearly the markets reassessment of the fundamental outlook for Brazilian steel and iron ore materially impacted our share price performance in 2014. What are we doing to turn this share price performance around? We will continue to execute our strategy; we are focussed on: capturing our share of improved demand, operational efficiency to reduce costs (both in steel and mining), invest with focus and discipline (including capital investment and research & development investment), and continue to reduce our net debt. We believe this strategy will maximise returns in the medium term. Question: One of your most loyal supporters, Goldman Sachs, is forecasting a share price decline to €7.3 with a SELL recommendation. How do you explain this surprising turn of event? Answer: To our view, the Goldman Sachs analyst is negative for the main following reasons: • Goldman Sachs internal long term view on iron ore price FOB at $39/t (see report of 16 April 2015) is particularly negative and the market consensus on long term iron ore price is not quite that negative (2017forecast in the range of $50/t to $71/t); • He’s not giving us any benefit for our cost cuttings programs (AOP, Management gains) and assumed that all of the cost savings are passed on to the customers; His poorly worded statement “lower iron ore price does not have to mean higher steel margins” shows a one-sided view on steel margins in a declining raw materials environment, i.e. for 2014 • 1 when iron ore price dropped by 28%, we did expand our steel margins (steel margins $14/t year on year). As a conclusion, his sell recommendation with a 12 months price target (€) at 7.3 is very bearish; as an example, he refers to higher net debt on lower FCF generation for 2015 which is contrary to our guidance th announced during our 4 Quarter 2014 results (progress towards net debt and positive FCF at the end of 2015). Question: What are your long term iron ore long term price assumptions? Answer: As both a major producer and consumer of iron ore, it is not in our commercial interest to comment publicly on the iron ore price. However, the reality is that the iron ore price is expected to stay at lower levels, so we must accept it and adjust our businesses accordingly. Driving out further cost and increasing production will be crucial in mitigating the impact of the iron ore price. This is a key area of focus for 2015 and we are targeting in excess of one-third of the impact of lower iron ore prices on mining revenues being offset by improved cost performance including the benefits of foreign exchange, lower energy and freight costs as well as higher volumes. Question: Corporate often highlights the most flattering numbers when it comes to results, and often using ratios which are not understood by non-specialists. Would you agree on the settlement of international norms which would force corporates to publish some of the most significant numbers to ease the comparison of results between companies, and in particular to establish a comparison between net incomes. Answer: ArcelorMittal reports its consolidated financial information in accordance with International Financial Reporting Standards (IFRS) norms as issued by the International Accounting Standards Board (IASB), the independent, accounting standard-setting body of the IFRS Foundation. IFRS are designed as a common global language for business affairs so that company accounts are understandable and comparable across international boundaries. They are a consequence of growing international shareholding and trade and are particularly important for companies that have dealings in several countries. Question: You recently affirmed that your ambition is to make steel one of the most sustainable materials. Previously your corporate responsibility approach was based on 4 pillars; now you choose to communicate about 10 outcomes. Why and what are your numerical targets? What are your principal challenges? Answer: The 10 outcomes form the new framework for our group corporate responsibility strategy and have evolved from our previous approach which was based on four pillars. We made this change because we 2 believe the ten outcomes are more tangible for the business and will drive the next level of progress that is required. At this stage we don’t have numerical targets for the company because we are still evaluating our current status and process. We have built a good track record in corporate responsibility over the years, and recognise that the demands and challenges of sustainability are growing and require solutions. Steel is a part of those solutions and the 10 outcomes represent the challenges, the opportunities and where we will focus our efforts. We will develop a way to measure our progress against them, including targets. The intention is that each main operating unit/country (as appropriate) will take ownership of translating what the outcomes mean for them and building appropriate action plans and KPIs. Question: What are your sources of growth? In which countries do you intend to invest? What about Florange and its reconversion? Answer: In 2014 as compared to 2013, Group EBITDA grew by 8.5%; steel margins were up by $14/t on an underlying basis. A key contributor of this improvement was a 3.0% increase in steel shipments. As a general comment, we believe we are well placed to capture our share of continued demand recovery in our core markets. Our investments reflect this focus: (NAFTA flat products) AM/NS Calvert JV; Dofasco newly heavy gauge galvanize line and galvanized line conversion; (Brazil long products) Monlevade expansion; Acindar new rolling mill (Argentina); (China flat products) VAMA JV with the construction of automotive facility (state of the art pickling tandem CRM, continuous annealing line, hot dip galvanizing line). With regard to Florange, we have successfully implemented our industrial plan and commitments, which have been welcomed by President Hollande. The plant has a clear vision to produce value added products. The Florange site employs in excess of 2,000 people and produces amongst the best steels worldwide. The investment plan in Florange, of which 80% (€146m out of the €180m total) has been implemented, enables us to further strengthen and improve the production of steels of exceptional quality. There have been no layoffs or redundancies; we have found a solution for every single employee impacted by the closure of primary steelmaking facilities. The Usibor production in Florange has doubled between 2012 and 2014 (from 300,000 to 600,000 tonnes), a year in advance of the initial development plan. This development, supported by our investments, has helped to enable the recent recruitment of a further 30 persons. Sustained by our investment plan, Florange is today the centre of excellence for the production of the latest generation steel for the automotive industry and packaging such as Usibor. 3 Question: What impact on your results can be expected from the EU application on anti-dumping about EAF steel coming from Russia, US, Korea, China and Japan and are you not fearing some reprisal which would offset the positive effect? Answer: Imports from China and other countries have increased in 2014 (annualised share of finished steel imports from China into EU28 is around 30% in 2015 versus 22% in 2014), which can have a negative impact on local producers. Imports from Russia have increased (net exports surged +19% year on year for January-February 2015) but this has been offset by a fall in shipments from UKR. As a result, imports from the CIS have remained flat. Russia has a very low cost base in $ terms due to currency, so little point competing on price but we compete on quality, speed and continuity of supply. Where we believe such imports to be unfair then we are in support of anti-dumping tariffs being applied. This is in alignment with global trade rules and provided these are fairly applied, we are not unduly concerned about reprisals. We do not comment on potential for future trade cases and continue to strive for a fair trading environment for steel on a global basis. Question: How do you see the outlook on your markets within 5-10 years and in which sectors are you seeing some sources for development/more profitable? Answer: We do not give specific forecasts for 5 years plus. In terms of particular markets, automotive will remain important. Indeed it is future legislation for the auto industry to reduce emissions that has driven our research & development efforts to produce lighter-weight steels such as Usibor, S-in-Motion and Fortiform. While auto is very important and a franchised business for ArcelorMittal, we are also developing highly innovative steel solutions for construction (‘steel envelope’ concept), etc. Question: Do you have a gender pay gap within your multinational company? What do you do at the (European) companies of ArcelorMittal to prevent gender pay gap? How do you provide for transparency in remuneration policies? Answer: The gender pay gap is a challenge for many companies, ArcelorMittal included, and it is something we are actively working to analyse and improve. We are fairly confident that at certain levels in the company, where positions have been externally benchmarked to the market, that we are doing well on eradicating any pay inequality. However ArcelorMittal is a company of over 200,000 employees and we have not yet completed this bench-marking for every position within the company. So we are aware that there is more we need to do more to reduce this 4 disparity particularly at the lower management levels in the company. Our philosophy is to base remuneration on the position and the impact of that position for our business, not on the incumbent. Through our wider approach to inclusion and diversity we are working to identify and understand the barriers to greater diversity in the workplace as part of what can become wider change. Question: Has ArcelorMittal conducted a Social and Environmental Profit and Loss statement (SEP&L account? If so, when should the VBDO expect for ArcelorMittal to issue its first SEP&L account? Answer: We do not currently have plans to conduct an overall SEP&L for the business. However, we have done a similar study in South Africa using the World Business Council for Sustainable Development measuring impact framework to assess the value of our operations and found this to be a successful means of looking at our impacts (both positive and negative) and engaging meaningfully with our stakeholders. We were hoping to use a similar approach in Liberia this year but this had to be delayed due to the Ebola outbreak. To date, we have favoured the World Business Council for Sustainable Development (WBCSD) measuring impact framework, and while this methodology is not identical to SEP&L we are looking at the opportunities it will provide to our business. You may be aware of our new “ten outcome” sustainability approach and outcome ten is directly encouraging units to calculate what value they bring to society, not just limited to financial value. Question: Would ArcelorMittal be willing to set SMART targets on circularity for the next years? If so, would ArcelorMittal be willing to publish and report on these targets next year. If not, why not? Answer: We recognize the importance of the circular economy conversation and believe that steel is the best positioned material for this way of thinking/operating on account of the fact that we are 100% recyclable. This is included with the ten outcomes in outcome number four, where we are working closely with R&D to advance capabilities in modelling the impacts of products, environmental product labelling and research to improve recovery rates. At present, we don’t have SMART targets and we cannot promise that we will have such targets next year. But we acknowledge the relevance of circular economic thinking and believe we have an important role to play. 5 Question: What does this whistleblowing system entail? Why doesn't this system cover every operation of ArcelorMittal? Answer: On whistleblowing, it is important to understand that we have two processes. One is global and covers all sites and can be accessed by external parties. It ensures compliance with the Sarbanes Oxley act. The purpose of the Whistle-blower Process is to identify any serious concerns with regard to irregularities in accounting, auditing or banking matters or bribery at the earliest possible moment. These whistle-blower lines are operated by an independent external company and provide local language support. All complaints are shared with the Internal Assurance and Legal departments for required investigation. See our policy online:http://corporate.arcelormittal.com/investors/corporategovernance/whistleblower. We need to have and do have 100% whistle-blower cover now. The local whistle-blower lines are in place to ensure greater visibility and easier access. They are more an ‘add on’. With regards to the local whistle-blower lines, this is a continuing process – as example we will implement a line win Venezuela this year Question: The Sustainability Report 2014 (p.114) mentions that ArcelorMittal did not conduct in country human rights assessments in 2014. What is the reason behind this? Is ArcelorMittal planning to conduct such assessments in 2015? If not, why not? Answer: Our main objective here is to ensure that we drive performance. Human rights assessments were not done last year but we have budgeted to undertake two of these this year. The way we have been developing the ten outcomes looks at all of our business rather than a deep dive into one section. Our attention focus was on the new wider approach – the ten outcomes have human rights embedded throughout. While our company’s response to the Ebola crisis took a lot of manpower, we did appoint a head of security for mining, which will enable us to further drive forward our commitment to the Voluntary Principles for Security and Human Rights. Human rights considerations are also integrated into security threat and risk assessments and we continue to work closely with other departments such as internal audit to develop our comprehensive approach to human rights. Question: Why did it take you 10 years to hand over an environmental risk assessment prepared by your South African subsidiary to NGOs and other interested parties? Why were you not transparent? 6 Answer: There were issues with the quality of this environmental risk assessment and the report became the subject of litigation in South Africa. As the matter was ‘sub judice’ we were not free to share this information before this matter was concluded. Question: Goodwill/Impartment? Answer: At December 31, 2014, the total goodwill for the mining operations was $868 million. This goodwill relates to both iron ore and coal operations. As a result, any assessment of impairment combines the future cash flow projections of both iron ore and coal. There is not a single break even market price applicable for mining. The cost and revenue structure differs from mine to mine (type of products, ore grade, geographic location, labour cost, freight, etc). The long term price assumptions have further decreased since the beginning of the year but on the other hand there also mitigating impacts for the adverse consequences on the impairment test either on a macroeconomic basis (decrease in freight and fuel prices) or specific to ArcelorMittal (we announced during the presentation of our 4th quarter results last February a global cost reduction of 10% in average as well as a 5% increase in volumes in 2015). The Company will continue to monitor closely all parameters related to the impairment test over the next months. 7