AnnualReport2009_Arcelor_Mittal

8/8/2019 AnnualReport2009_Arcelor_Mittal

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Annual Report 2009

Management Report


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Disclaimer

In this Annual Report, ArcelorMittal has made, and will continue to make,forward-looking statements with respect to, amongst other things, its nancialposition, business strategy, projected costs, projected savings, and the plansand objectives of its management. Such statements are identied by the useof forward-looking words or phrases such as anticipates, intends, expects,plans, believes, or estimates, or words or phrases with similar meaning. Theactual results may differ materially from those implied by such forward-lookingstatements on account of known and unknown risks and uncertainties, including,without limitation, the risks described in this Annual Report.

ArcelorMittal does not make any representation, warranty or prediction that theresults anticipated by such forward-looking statements will be achieved. Such

forward-looking statements represent, in each case, only one of many possiblescenarios and should not be viewed as the most likely or standard scenario.ArcelorMittal undertakes no obligation to publicly update its forward-lookingstatements, whether as a result of new information, future events or otherwise.

Unless indicated otherwise, or the context otherwise requires, referencesherein to ArcelorMittal, the Group and the Company or similar terms are toArcelorMittal, socit anonyme, having its registered ofce at 19, avenue dela Libert, L-2930 Luxembourg, Grand Duchy of Luxembourg, and, where thecontext requires, its consolidated subsidiaries.

Financial Information 2009 Contents

01 Chief Executive Ofcer and Chief Financial Ofcers Responsibility Statement02 2009 Consolidated Financial Statements87 2009 Annual Accounts100 Proposed Allocation of Results for 2009

Management Report 2009 Contents

01 OurPhilosophy02 FinancialHighlights04 MessagefromtheChairmanandCEO08 QuestionsfortheGroupManagementBoard

14 2009Highlights16 BoardofDirectors20 SeniorManagement24 BusinessStrategy28 CorporateResponsibility42 GlobalPresence48 OperationalReview58 Liquidity62 MarketInformation66

CorporateGovernance76 ShareCapitalandVotingRights78 GroupStructure80 AdditionalInformationaboutArcelorMittal


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ArcelorMittals core philosophyis to produce Safe, Sustainable, Steel.Safety is the Companys top priority.Our safety performance has improvedconsistently over the last three years,most recently by 25% in 2009,and we will continue to target ourultimate goal of zero accidents.

The Companys leadership position in thesteel industry is the result of a consistentmanagement strategy that focuses onproduct diversity, geographic reach andvertical integration both into raw materialproduction, designed to minimize riskcaused by economic cycles, anddownstream distribution, providingvalue-added and customized steel solutionsthrough further processing to meet speciccustomer requirements. Our customers arethe heart of our business. We collaborateclosely with them to ensure that we evolveand develop our products in line with their

continually changing needs.ArcelorMittal is committed to its promiseof transforming tomorrow and the threevalues that underpin it Sustainability,Quality and Leadership. These values shapeour behavior. We recognize that theCompany has a duty to its stakeholdersto operate in a responsible and transparentmanner and to safeguard the wellbeingof all its stakeholders, including employees,contractors and the communities in whichit operates.

That is why we have a strong focus onCorporate Responsibility. This is evidencedin numerous areas, for example theCompanys efforts to develop breakthroughsteelmaking technologies, our leadership ofthe steel industrys Ultra Low Carbon Steel(ULCOS) program and the global activitiesof the ArcelorMittal Foundation.

No discussion of the Groups philosophywould be complete without reference toour employees. The Company is only asgood as its people, and our journey throughthe crisis was helped by their efforts,exibility and understanding.

Our Philosophy

In 2009, ArcelorMittal had saleso approximately $65.1 billion1,steel shipments o approximately71 million tonnes and crudesteel production o approximately73 million tonnes.

ArcelorMittal Annual Report 2009

OurPhilosophy 01

1 US$, $, dollars, USD or U.S.dollars refers to United Statesdollars, the ofcial currencyof the United States of America.


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FinancialHighlights02

Financial Highlights

Shipments (million tonnes)

Net Income1 ($ million)

Basic Earnings per Share ($)

71.1

118

0.08

101.7

9,4462

6.842

2009

2009

2009

Sales ($ million)

65,110

124,936

2009

2008

2008

2008

2008

1 Excluding non-controlling interests.2 As required by IFRS, the 2008 information has been

adjusted retrospectively for the nalization in 2009

of the allocation of purchase price of acquisitionsmade in 2008 (see Note 3 to ArcelorMittalsconsolidated nancial statements).

3 Shipments originating from a geographical location.4 Includes tubular business.5 Full Time Equivalent.

6 EU15 includes Austria, Belgium, Denmark,Finland, France, Germany, Greece, Ireland,Italy, Luxembourg, the Netherlands, Portugal,

Spain, Sweden and the United Kingdom.7 EU27 includes the EU15 countries plus Bulgaria,Cyprus, Czech Republic, Estonia, Hungary,Latvia, Lithuania, Malta, Poland, Romania,Slovakia and Slovenia.


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FinancialHighlights 03

2009 Steel shipments by geographic location (in thousand of tonnes)3

Flat Carbon Americas: 16,121

1 North America 10,751

2 South America 5,370

Flat Carbon Europe: 21,797

3 Europe 21,797

Long Carbon: 19,937

4 North America 3,862

5 South America 4,486

6 Europe 10,753

7 Other4 836

Asia, Africa and CIS (AACIS): 11,7698 Africa 4,417

9 Asia, CIS and other 7,352

Stainless Steel: 1,447

Allocation of employees5 at December 31, 2009 according to geographic location

1 EU156 68,527 24.3

2 Rest EU (EU27)7 40,923 14.5

3 Other European countries 47,997 17.0

4 North America 34,809 12.4

5 South America 24,803 8.86 Asia 45,594 16.2

7 Middle East 135 0.1

8 Africa 18,915 6.7

Total 281,703 100

Number of employees5 at December 31, 2009 according to segments

Segment Total %

1 Flat Carbon Americas 29,248 10.4

2 Flat Carbon Europe 58,965 20.9

3 Long Carbon Americas and Europe 63,693 22.6

4 AACIS 92,910 33.0

5 Stainless Steel 11,135 3.96 Steel Solutions and Services 17,409 6.2

7 Other activities 8,343 3.0

Total 281,703 100

1

2

3

4

5

67

1

2

3

4

5

6

78

9

1

2

34

5

6

7 8


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Dear Shareholders,It will come as no surprise to you that

2009 was not only the most challengingyear since the creation o ArcelorMittalbut also the most dicult period thatmany o us will have experienced inour business lives. Enough has beenwritten on the causes o the globalnancial crisis that there is little pointin elaborating urther here. Suce to saythat what started with problems in the

nancial sector sparked a chain reactionthat spilled over into the global economy,resulting in considerable challengesor our Company a number o whichI outlined to you in last years report.

Message rom the Chairman and CEO


MessagefromtheChairmanandCEO04


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The fundamental issue for ArcelorMittalwas the substantial drop in steeldemand, further exacerbated by a periodof considerable de-stocking throughoutthe steel supply chain. At the bottomof the cycle these combined factorsresulted in a drop in apparent demand

of approximately 50%.Clearly this impacted the nancialresults for the year. Revenues droppedto $65.1 billion and net income droppedto $0.1 billion.

Whilst these numbers are disappointing particularly when compared with resultsof the preceding years it is a testamentto the Company and its stakeholdersthat we recorded a marginal net incomeduring such a difcult year. After a verychallenging rst half, we returned toprotability in the third quarter and

subsequently improved on this in thefourth quarter as inventories stabilized,customers resumed buying and pricesbegan to rise albeit from low levels.

I am also pleased with the progressin Health and Safety that we achievedin 2009. Health and Safety has remainedthe absolute priority for the Company andis a critical component of our philosophyto produce Safe, Sustainable, Steel. OurLost Time Injury Frequency Rate (LTIFR),which is the most important statistic wetrack to assess our progress in this area,continued to improve, falling from 2.5 per

million hours worked in 2008 to 1.9 in2009 for both steel and mining. This isgood progress, but we will not be satiseduntil we have reached our ultimate goalof Journey to Zero. To leverage bestpractices and improve the Health andSafety performance across the Group,we initiated in 2009 a program to commitadditional resources for the developmentof specic programs to improve safetyperformance at 12 top priority sites.We have set ourselves a further LTIFRreduction target for 2010.

In general, whilst none of us would wishto go through a similar period again,I am pleased with the way in whichArcelorMittal weathered the crisis.Within the rst few weeks after thecollapse of Lehman Brothers, our Companyrallied around a crisis strategy that focusedon what we called the three Cs: Cash, Costand Customers. Our ability to implementthis strategy swiftly and decisively wasunderpinned not only by our global scaleand scope, but also by the spirit and cultureof the Company. A well-known challengefor fast-growing businesses is to hold

on to the qualities that drove their successin the rst place. The managementof this Company has always placed greatemphasis on maintaining the entrepreneurialspirit that enabled us to become the worldsleading steel company. Therefore, we haveboth the scale to optimize production

through temporary curtailments andthe agility to respond quickly to changingcircumstances. The ability to executerapidly is as important as the actualdecision. Cutting production approximately50% at the worst point of the crisis as our Company did - was unprecedentedand very painful. However, it acceleratedthe required de-stocking period andalso resulted in xed cost savings of$9.4 billion. Out of this, sustainablemanagement gains savings reached$2.7 billion by close of the fourth quarterof 2009, due to industrial optimization.

Additionally, we conserved cash byreducing capital expenditures, temporarilyputting almost all growth projects on holdand aggressively reducing working capital.

Regrettably, we also had to implementa Voluntary Separation Scheme acrossthe Group. This is not a decision thatmanagement took lightly, but we arepleased that we were able to achievethe necessary reductions in our workforcewithout implementing forced redundancies.I would like to take this opportunityto thank our employees and trade unionsacross the world for understanding

the severity of the situation, engagingwith us in frank and open discussionsand enabling us to nd the right solutionsat our plants.

As part of our three Cs strategy duringthe crisis, we also set ourselves a numberof key nancial targets:

A $10 billion reduction of net debt1by the end of 2009 from the debt levelat the end of the third quarter of 2008;

Management gains of $5 billion overfour years including selling, general andadministrative savings with $2 billion

to be achieved by the end of 2009;A reduction of the working capital rotation

to a targeted range of 75-85 days.


MessagefromtheChairmanandCEO 05

Looking ahead to the remainderof 2010, I am certainly more optimisticthan I was 12 months ago.The crisis has been very difcultfor all of us. But it has also actedas a catalyst to make many positiveand necessary changes that willsee us emerge as a stronger,leaner and more robust organization.

1 Net debt is dened as long-term debt plusshort-term debt less cash and cash equivalentsand restricted cash.


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We have outperformed on all threeaspects. $2.7 billion of management gainshave already been achieved by year endwith the target of $5 billion over four yearsstill being relevant. Net debt by the endof 2009 was $18.8 billion a reductionof $13.7 billion from $32.5 billion at the

end of the third quarter of 2008.This reduction was achieved througha combination of cash ow generatedby working capital release, the equityportion ($3.9 billion) of the $13.1 billionraised by our successful fundraisingsin the capital markets, and a numberof other non-recurring factors. In regardto working capital, rotation days improvedfrom 96 days in December 2008 to63 days in December 2009. These areexcellent achievements, particularly in sucha difcult year. We therefore ended theyear not only with the worst of the crisis

behind us but with a much strengthenedbalance sheet and strong liquidity.

Writing to you now, I can say with someconviction that we are through the worst.Whilst this is very welcome, we must notmislead ourselves that there will be a swiftreturn to the buoyant levels of growththat we had become accustomed to inrecent years. Although the major developedeconomies have now formally emergedfrom recession and manufacturing is againshowing signs of growth, the reality is thatactual growth and growth forecasts for thecoming year remain low. It will be some

time until we return to pre-crisis levels.

Perhaps the most interesting outcomefrom the recent crisis is the increasingimportance the developing economieshave in the global economy. The growinginuence of these economies is of coursenot a new trend; we have been talkingabout the rise of the so-called BRICs1

and other emerging economies for someyears now. Nevertheless their resiliencein the face of nancial crisis and the speedat which they have resumed their growthpaths took many by surprise evidenceof the signicant role they now occupyin the global economy. Whilst per capitaGDP2 in these economies still considerablylags that of their more developedcounterparts, the massive populationsin countries such as India and China implythat these countries will at some stagein this century be rivals for the positionof the largest economy in the world.

That they still have a long journey to makeonly further conrms their considerablelong-term potential.

This bodes well for ArcelorMittal, whichhas long embraced growth in thedeveloping economies as a cornerstoneof its strategy. We have a signicantpresence in Brazil, South Africa and EasternEurope, including Ukraine and Kazakhstan.And our largest and most ambitiousexpansion projects are our potentialgreeneld plants in India. As we start toresume growth expenditure once again,this will also be focused on these

economies. Two notable examples are SaudiArabia where we signed in 2007 a jointventure agreement with the Bin JarallahGroup for the design and constructionof a seamless tube mill, and Brazil wherewe plan to expand capacity at theMonlevade plant with the constructionof a second blast furnace. Also, in 2008,we started two joint venture projects inChina with Hunan Valin Iron & Steel Group,related to electrical steel (ValinArcelorMittal Electrical Steel) andautomotive steel (Valin ArcelorMittalAutomotive Steel). These are the regions

from which long-term steel demand

will emanate, and we will remain focusedon these markets as the principal growthregions for our Companys strategy.

Although growth will come from thedeveloping economies, our operationsin the developed markets will always bean essential core of our Group, not leastbecause they are the innovative heartof the Company and have a key role to playin expanding the possibilities of steel.Innovation has always played a critical rolein the development of the steel industry -and never more so than in todaysincreasingly environmentally-focusedworld. Every business faces pressureto reduce its CO2 emissions and thisis particularly true for the steel industry,which relies on carbon to reduce iron orein a fundamental chemical processfor which no alternative currently exists.Nevertheless, steel is by nature the

most sustainable of all materials andArcelorMittal intends to play a leading rolein further strengthening the future of steelby improving the characteristics of theproduct. Our Company is very activein addressing this challenge, both in termsof researching new breakthroughsteelmaking processes such as ULCOSand through developing new and moreenergy-efcient products therebycontinually broadening the product scopethat is a second pillar of our Companysstrategy. To contribute to CO2 emissionsreduction through lighter vehicles, we

continue to develop innovative ultrahigh-strength steels that will bring majorenvironmental benets in reducing theweight of some automotive parts up to30%. Our expertise in Advanced HighStrength Steels (AHSS) is being furtherapplied in our S-in motion project toproduce new solutions that will reduce theweight of a 2008 reference vehicle by20%, while maintaining the safety andperformance that only steel can provide.Such continuous innovation is alsodemanded by our customers, with whomwe maintain a regular and close dialogue to

ensure we are able to meet their


MessagefromtheChairmanandCEO06

1 BRICs refers to Brazil, Russia, India and China.2 GDP refers to Gross Domestic Product.3 Effective January 1, 2010.


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challenging requirements like thedevelopment of industrial gas cylinderswith 30% weight reduction. In spite of thecrisis, we did not reduce Research andDevelopment (R&D) spending, and in 2009we invested $253 million into this area.

The other strategic component of ourbusiness which has been reinforced throughthe crisis is the importance of our miningoperations. ArcelorMittal has long favoredan integrated business model and we rmlybelieve that self-sufciency in key rawmaterials provides a competitive advantagethat will continue to be enhanced over time.In 2009, our self-sufciency was 64%in iron ore and 21% in metallurgical coal,although these numbers also reect theimpact of signicantly lower steel productionduring the year because of the crisis.But we have ambitious plans to continueto expand in this area and increase our own

levels of production. As a sign of theincreasing importance of this side of thebusiness, we have appointed Peter Kukielskito join3 the Group Management Boardas Senior Executive Vice President andHead of Mining. His extensive experienceand leadership will further strengthen thefoundations to become a truly integratedglobal steel production and mining business.

Even as we focus on improving our businessperformance, it is critical that we continueto live up to the responsibility we haveas a leading global company. This means

continuing to implement and improve ourCorporate Responsibility program in allcountries where we operate. During 2009we published our second full CorporateResponsibility report, How will we achievesafe sustainable steel? I am pleased thatthis report, which documented ourresponsibilities in four distinct areas anddened targets for which we will holdourselves accountable, has been wellreceived by our stakeholders. This actsas a benchmark against which we will holdourselves accountable. The follow-upreport, Our progress towards SafeSustainable Steel will be published shortly.

Looking ahead to the remainder of 2010,I am certainly more optimistic than Iwas 12 months ago. The crisis has beenvery difcult for all of us. But it has also actedas a catalyst to make many positive andnecessary changes that will see us emergeas a stronger, leaner and morerobust organization.

Finally, I would like to take this opportunityto thank all our stakeholders for the loyaltythey have shown us during these difculttimes. A company cannot thrive and growwithout the support of its stakeholders;and this year has reinforced not only thispoint but also the importance of stakeholder

dialogue. I would also like to take theopportunity to welcome LuxembourgEconomy and Foreign Trade Minister JeannotKreck to the Board of Directors, who bringsalong his extensive knowledge in economicand European Union matters.

To our employees, customers,suppliers, the trade unions, shareholders,my colleagues on the Group

Management Board and ManagementCommittee and o course the Boardo Directors thank you or yourunderstanding, support and loyalty.The Company has come througha very dicult period; but the worstis now behind us and, as the recoverytakes shape, we will continue

to urther dene ourselves as theworlds leading steel company.

Lakshmi N. MittalChairman and CEO


MessagefromtheChairmanandCEO 07


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Questionsor theGroup

ManagementBoard


QuestionsfortheGroupManagementBoard08


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When ArcelorMittal was created,the Company characteristicallymade some bold statementsabout what it wanted to stand for.Coming out of the crisis, does theCompany still hold the same values?

Aditya Mittal: The purpose of our valuesis to set standards that the Companyshould maintain during all aspects of theeconomic cycle. This is not always easyto do, particularly in the midst of the worstcrisis for many years, but we have workedhard to maintain our values and ensurethey are still relevant to the business andour people. That doesnt mean that wehavent had to take some very toughdecisions to adapt. And as a result of thesedecisions some things have changed. Forexample we are leaner, more cost focusedand more targeted on our growth projects.

Change is always difcult, but weveshown leadership, and as a result I believewere now a better and stronger company.

Gonzalo Urquijo: We continue to liveand work by our values, but we havehad to adapt. Before the crisis, we sawleadership in terms of growth and size.Now the emphasis is on cost leadership,quality and customer service. Our targetis still to be the most admired steelcompany. We have had to make difcultdecisions in the past year but we have beencareful to make them in accordance withour values, maintaining a social partnership

with our workforce. And we improvedthe sustainability of our business and of all our stakeholders going forward.

Sudhir Maheshwari: Our experienceof navigating through the most challengingbusiness environment has reinforced morethan ever the signicance of ArcelorMittalsbrand values, Sustainability, Qualityand Leadership. Focusing on customerservice, the quality of our products and

services, and still being prepared to leadwith bold strategic thinking, we wereable to take the right decisions and emergestronger from the crisis. I believe wehave lived by the ArcelorMittal values.

How is the Companys businessmodel evolving? Is it still a global,diversified, integrated model?

Davinder Chugh: We continue withour three-dimensional business strategyof geographical and product diversication,as well as expanding our footprint alongthe value chain. Going forward, our growth

projects will be more focused towardsclear long-term growth markets suchas the BRICs, as well as enlarging ourfootprint on the steel value chain throughfurther backward integration and enhancingour distribution solutions. Our policyof backward integration was vindicatedas captive raw material sources helpedus sustain the business through the crisis.

Michel Wurth: The importance of a globalmodel was demonstrated in the crisis.We did not abandon any single marketor country where we have production.It remains the key going forward. In 2010,

it is clear that developing countries willdo best, and we want to tap into thatgrowth. As for integration, we continue tomake our value chain as long as possible from upstream integration to downstreamdistribution and steel processing. The abilityto source a lot more of our raw materialsin-house gives us a distinct advantageover the competition.

Since January 1st, 2010, the GroupManagement Board (GMB) hasbeen comprised o eight members:Lakshmi N. Mittal, Aditya Mittal,Michel Wurth, Gonzalo Urquijo,

Christophe Cornier, Sudhir Maheshwari,Davinder Chugh and Peter Kukielski.Here, the members give theirthoughts on the Company, its strategyand priorities.


QuestionsfortheGroupManagementBoard 09

GMB members from left to right:Peter KukielskiSudhir MaheshwariAditya MittalGonzalo UrquijoLakshmi N. MittalChristophe CornierMichel Wurth

Davinder Chugh


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Christophe Cornier: The Companysglobal thrust remains as importantas ever. The difference today is thatthe regions from which growth willcome have changed, with Asia and theemerging markets becoming increasinglyimportant. So we do have to adaptthe model to the reality of the marketplace and rebalance our objectives.Diversication and integration remainkey tenets of the model.

What are the priorities right now?

Davinder Chugh: Our critical focus area

is to further improve our Health and Safetyperformance. We are working on contractorsafety through training programs andactive collaboration. Other critical areasinclude the improvement of our costcompetitiveness by sustainable reductionin variable and xed costs. To support this,our efforts are directed towardsestablishing strong relationships withour suppliers, full implementation ofthe TCO (Total Cost of Ownership)approach across the Groups supply chainand transforming our internal processesto smart and effective solutions.

Sudhir Maheshwari: The Companyis today more battle-hardened thanbattle-weary and we aim to leveragethat momentum to achieve the highestefciency in our operations in termsof costs, processes, etc. Also, efcientallocation of capital remains a top priority.This requires us to be more selectivewhen we evaluate opportunities asthere will be limited capital available.Finally, we will need to continually developour people so that the best continueto work for us to build a more sustainableand brighter future.

Peter Kukielski: Our top prioritiesstart and nish with safety. We havea workforce of employees and contractorsthat is over 300,000 strong and spans60-odd countries. While our safetymetrics continue to show an improvement,and some of our mining operationsproduced outstanding safety results,it is tragic that we still had to reportfatalities in 2009. The task for 2010is to replicate the standards of the verybest sites everywhere else. BeyondHealth and Safety, the priority is todeliver value to our shareholders in terms

of much enhanced prot and quickly.What did the Company learn fromthe crisis?

Michel Wurth: One of the major lessonswas that our people are key. We shouldpay a tribute to all of them. It is downto them their efforts and in some casesthe sacrices they made that we gotthrough the crisis. It was a painful exercisebut we have come out stronger than whenwe went in. The other big lesson is thatwe need to think the unthinkable.Nobody anticipated the crisis: now we

need to be prepared for anything.Peter Kukielski: In general terms,we learned that cost is king. Cost drivescash and our ability to get our productsprotably to our customers. Without ourdrive on costs last year, we would not havesurvived as well as we did. More specicallyfrom my vantage point, we learned thevalue of de-linking mining operationsfrom captive customers. With the captiveapproach, when a mill shuts downso does the mine. By contrast, mineswith external customers can still thrivein a downturn. ArcelorMittal Mines Canada

was a case in point, extending its salesto external customers in Europe, the MiddleEast and even China. As we build ourmining operations, the focus must beon world-scale ore bodies with accessto both internal and external customers.


QuestionsfortheGroupManagementBoard10


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QuestionsfortheGroupManagementBoard 11

Aditya Mittal: Whilst none o uswould wish to go through 2009 again,it has served to reinorce the strongestparts o our business and strategy

and highlight those areas wheresome element o change was needed.We have always been an entrepreneurialcompany and the crisis demonstratedthat we had maintained our sense

o entrepreneurship that enabled usto respond switly. But we also learnedthat we need to be as productiveand as lean as possible at all times.

We eected some considerablechanges during the crisis and ourability to make these changes wasmade possible only because o theoutstanding team o people we

have at ArcelorMittal.


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Bernard FontanaExecutive Vice President of ArcelorMittal, Head of Human Resources


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2009 Highlights


2009Highlights14

1 For information about additionalexchanges where ArcelorMittal is listed,please refer to the Market Informationsection in this Annual Report.

In January 2009, ArcelorMittalbegan trading on a single orderbook in Paris, Amsterdam and

Brussels, under the symbol MT.ArcelorMittal remains amember o key NYSE-Euronextindices, including the CAC40

and the AEX.1


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January

Transactionwith SotegArcelorMittal contributed its76.9% stake in Saar FerngasAG to Luxembourg-basedutility Soteg, in which it helda minority ownership stake.Upon completion, ArcelorMittalsstake in Soteg increased rom20% to 26.2%. ArcelorMittalthen sold 2.48% o Soteg to theGovernment o Luxembourgand SNCI (Socit Nationalede Crdit et dInvestissement),

a Luxembourg government-controlled investment. ArcelorMittalretains a 25.3% stake in Soteg,renamed Enovos.

April

European WorksCouncil talksArcelorMittal met with itsEuropean Works Council to provide

an update on the temporarysuspension o productionat sites in Europe. In lighto the ongoing exceptionaleconomic environment,it was necessary to continueto suspend and optimizeproduction to ensure theCompany was well adaptedto the market reality.All production suspensionswere temporary and reviewed

on a regular basis.

May

Agreementwith Czech

GovernmentArcelorMittal and the CzechGovernment agreed to resolveall pending arbitration and litigationregarding the privatization oNova Hut and Vtkovice Steel.ArcelorMittal agreed to an amicablesettlement o all pending litigationand arbitration cases againstthe Czech Government and itsrelated entities. In addition,

ArcelorMittal increased its stakein ArcelorMittal Ostrava toapproximately 83%.As a part o the overall settlementagreement, ArcelorMittalOstrava concluded a long-termsupply agreement or hot metalwith Evraz Vtkovice Steel.

October

DisposalArcelorMittal signed a denitiveagreement to divest its minorityinterest in Wabush Mines, Canada,pursuant to which it will receive$34.28 million or its 28.6%stake. Ater the disposal,ArcelorMittal continued to havesignicant mining operations andresources in Canada includingArcelorMittal Mines Canada.

November

Increaseo stakeArcelorMittal acquired an additional13.9% stake in ArcelorMittalOstrava, increasing its staketo approximately 96.4%.The transaction was completedin January 2010.

December

InternationalVolunteer

Work DayArcelorMittal held its secondannual International VolunteerWork Day organized by theArcelorMittal Foundation.It consisted o a set o actionsimplemented by the Groupslocal units to encourageemployees to invest time andexpertise or the beneto local communities.

Recent Developments

Increase ostake; jointventure andArcelorMittalFoundationFollowing the closing of a tender offeron January 7, 2010, ArcelorMittal acquireda 28.8% stake in Uttam Galva Steels Limited(Uttam Galva), a leading producer ofcold rolled steel, galvanized products andcolor coated coils and sheets based inWestern India that is listed on the major stockexchanges of India. The Company expectsto purchase an additional 4.9% from thePromoter R.K. Miglani family in due course.

ArcelorMittal entered into initial discussionswith BHP Billiton to potentially combinetheir respective iron ore mining and

infrastructure interests in Liberia andGuinea within a joint venture.

ArcelorMittal, through the ArcelorMittalFoundation, donated $1 million to helpthe relief efforts in Port-au-Prince, Haiti,following the earthquake that struckthe island on January 12, 2010.


2009Highlights 15


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BoardofDirectors16

ArcelorMittal continues to place a strong emphasison corporate governance. ArcelorMittal has eight independentdirectors on its 11-member Board o Directors. ArcelorMittals

Audit Committee and Appointments, Remunerationand Corporate Governance Committee are each comprisedo three independent directors and hal o the memberso ArcelorMittals Risk Management Committee are requiredto be independent.

On May 12, 2009, the expirations o the mandates o Sergio Silvade Freitas, Michel Angel Marti and Jean-Pierre Hansen were

accepted by the annual general meeting. Narayanan Vaghul,Wilbur L. Ross and Franois Pinault were re-elected as memberso the Board o Directors. Ater the annual general meetingheld on May 12, 2009, Ignacio Fernandez Toxo resigned romthe Board o Directors. On September 1, 2009, Malay Mukherjeeresigned rom the Board o Directors.

Georges Schmit resigned rom the Board o Directorseective December 31, 2009. In replacement o Mr. Schmit,the Board appointed Jeannot Kreck as an interim boardmember starting January 1, 2010. Mr. Krecks ull appointmentto the Board o Directors will be proposed to the shareholdersat the Companys annual general meeting on May 11, 2010.Like Mr. Schmit, Mr. Kreck will serve on ArcelorMittals Boardo Directors as a shareholder representative.

Board o Directors


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Lakshmi N. Mittal, 59, is the Chairmanand CEO of ArcelorMittal. Mr. Mittal foundedMittal Steel Company (formerly the LNMGroup) in 1976 and guided its strategicdevelopment, culminating in the mergerwith Arcelor, agreed in 2006, to found the

worlds largest steelmaker. Since the merger,Mr. Mittal has led a successful integration,establishing ArcelorMittal as one of theworlds foremost industrial companies.He is widely recognized for the leading rolehe has played in restructuring the steelindustry towards a more consolidated andglobalized model. Mr. Mittal is an activephilanthropist and a member of various trustsand boards, including the boards of directorsof Goldman Sachs, EADS and ICICI BankLimited. He is also a member of the ForeignInvestment Council in Kazakhstan, theInternational Investment Council in South

Africa, the Investors Council to the Cabinetof Ministers of Ukraine, the World EconomicForums International Business Council,the World Steel Associations ExecutiveCommittee and the Presidential InternationalAdvisory Board of Mozambique. He alsosits on the Advisory Board of the KelloggSchool of Management in the United States.

Mr. Mittal began his career workingin the familys steelmaking business in India,and has over 30 years of experience workingin steel and related industries. In additionto forcing the pace of industry consolidation,he has also championed the development

of integrated mini-mills and the use of DRIas a scrap substitute for steelmaking.Following the transaction combining IspatInternational and LNM Holdings to formMittal Steel in December 2004, togetherwith the simultaneous announcementof the acquisition of International SteelGroup in the United States to form the worldsthen-leading steel producer, Mr. Mittalwas awarded Fortunemagazines EuropeanBusinessman of the Year 2004.

In 1996, Mr. Mittal was awarded Steelmakerof the Year by New Steelin the UnitedStates and the Willy Korf Steel Vision Awardby World Steel Dynamicsin 1998 foroutstanding vision, entrepreneurship,leadership and success in global steeldevelopment. Following the creationof ArcelorMittal, Mr. Mittal was awardedBusiness Person of 2006 by theSunday Times, International Newsmakerof the Year 2006 by Time Magazineand Person of the Year 2006 by theFinancial Timesfor his outstanding businessachievements. In January 2007, Mr. Mittalwas presented with a fellowship fromKings College London, the collegeshighest award. He also received the 2007

Dwight D Eisenhower Global LeadershipAward, the Grand Cross of Civil Merit fromSpain and was named AIST Steelmakerof the Year. In January 2008, Mr. Mittal wasawarded the Padma Vibhushan, Indias secondhighest civilian honor, by the President of India.

In September 2008, Mr. Mittal was chosenfor the third Forbes Lifetime AchievementAward, which honors heroes of entrepreneurialcapitalism and free enterprise.

Mr. Mittal was born in Sadulpur in Rajasthan,

India on June 15, 1950. He graduatedfrom St Xaviers College in Kolkata wherehe received a Bachelor of Commerce degree.Mr. Mittal is married to Usha Mittal,and has a son, Aditya Mittal and a daughter,Vanisha Mittal Bhatia.

Lewis B. Kaden, 67, is the Lead IndependentDirector of ArcelorMittal. He has approximately40 years of experience in corporategovernance, nancial services, disputeresolution and economic policy. He iscurrently Vice Chairman of Citigroup.Prior to that, he was a partner of the lawrm Davis Polk & Wardwell, and served

as Counsel to the Governor of New Jersey,as a Professor of Law at ColumbiaUniversity and as director of ColumbiaUniversitys Center for Law and EconomicStudies. He has served as a directorof Bethlehem Steel Corporation for tenyears and is currently Chairman of theBoard of Directors of the MarkleFoundation. He is a member of the Councilon Foreign Relations and has been amoderator of the Business-Labor Dialogue.Mr. Kaden is a magna cum laude graduateof Harvard College and of Harvard LawSchool. He was the John Harvard Scholar

at Emmanuel College, CambridgeUniversity. Mr. Kadens principal dutiesand responsibilities as Lead IndependentDirector are as follows:


BoardofDirectors 17

Lakshmi N. Mittal Lewis B. Kaden Vanisha Mittal Bhatia


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Co-ordination of activitiesof the other Independent Directors;

Liaison between the Chairmanand the other Independent Directors;

Calling meetings of the IndependentDirectors when necessary and

appropriate; and Such other duties as are assigned

from time to time by the Boardof Directors.

Vanisha Mittal Bhatia, 29, was appointedas a member of the LNM Holdings Boardof Directors in June 2004. Mrs. VanishaMittal Bhatia was appointed to MittalSteels Board of Directors in December2004. She has a Bachelor of Arts degreein Business Administration from theEuropean Business School and hascompleted corporate internships atMittal Shipping Ltd., Mittal Steel HamburgGmbH and an Internet-based venturecapital fund. She is the daughter ofMr. Lakshmi N. Mittal.

Narayanan Vaghul, 73, has over 50 yearsof experience in the nancial sector.He was the Chairman of ICICI Bank Limitedbetween 2002 and April 2009. Previously,he served as the Chairman of the IndustrialCredit and Investment Corporation of India,

a long-term credit development bankfor 17 years and, prior to that, servedas Chairman of the Bank of India andExecutive Director of the Central Bankof India. He was chosen as Businessmanof the Year in 1992 by Business Indiaandhas served as a consultant to the WorldBank, the International Finance Corporationand the Asian Development Bank. Mr. Vaghulwas also a visiting Professor at the SternBusiness School at New York University.Mr. Vaghul is Chairman of the Indian Instituteof Finance Management & Research andis also a Board member of various other

companies, including Wipro, Mahindra &Mahindra, Nicholas Piramal India, ApolloHospitals and Himatsingka Seide. NarayananVaghul was awarded the Padma Bhushan,the third highest civilian honor in India.The award will be formally conferred inApril 2010 by the President of India.

Wilbur L. Ross, Jr., 72, has served asthe Chairman of the ISG Board of Directorssince ISGs inception. Mr. Ross is theChairman and Chief Executive Ofcerof WL Ross & Co. LLC, a merchant bankingrm, a position that he has held sinceApril 2000. Mr. Ross is also the Chairman

and Chief Executive Ofcer of WLRRecovery Fund L.P., WLR Recovery Fund IIL.P., Asia Recovery Fund, Asia RecoveryFund Co-Investment, Nippon InvestmentPartners and Absolute Recovery HedgeFund. Mr. Ross is also Chairman of Invesco

Private Capital, Ohizumi ManufacturingCompany in Japan, International TextileGroup, International Coal Group and ofAmerican Home Mortgage Servicing Inc.Mr. Ross is a Board member of theTurnaround Management Association,

Nikko Electric in Japan, Clarent HospitalCorp. and International AutomotiveComponents. He also serves as a Directorto Compagnie Europenne de Wagons SARL(Luxembourg), Wagon PLC (UK), the JapanSociety, the Whitney Museum of AmericanArt and the Yale School of Management.Previously, Mr. Ross served as theExecutive Managing Director at Rothschild,the investment banking rm, from October1974 to March 2000 and as Chairman ofthe Smithsonian Institution National Board.

Franois Pinault, 73, set up his rst companyin 1963, in the timber business.In 1988, the Pinault Group was listed on theParis stock exchange. Renamed PPR, thecompany founded by Franois Pinaultis today led by his son Franois Henri Pinault,has two major activities:

Retail business with CFAO, a leadingdistributor of household goods,La Redoute, a leader in mail order trading,La FNAC, a leading retailer of culturalproducts in Europe, and Puma, a leader insports products;

Luxury goods business with Gucci Group,the second biggest luxury group in the

world with famous brands suchas Gucci, Yves Saint-Laurent, BottegaVeneta, Sergio Rossi, Boucheron,Stella McCartney, Alexander McQueen,Bedat & Co and Balenciaga.


BoardofDirectors18

Narayanan Vaghul Wilbur L. Ross, Jr Franois Pinault Jos Ramn lvarez Rendueles


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At the same time, Franois Pinault set upa separate structure in order to investin companies with strong growth potential,but in sectors distinct from that of PPR.Founded in 1992 and fully controlledby Franois Pinault and his family, Artemis

controls the famous French vineyardChateau-Latour, the news magazineLe Point, the auction house Christies,as well as part of the share capital of Vinci.Franois Pinault also owns the RennesFootball Club and the Marigny Theatre.As one of the largest collectors ofcontemporary art, Franois Pinault acquiredthe Palazzo Grassi in Venice in May 2005to display its art collection and to organizecultural events. He also acquired La PuntaDella Dogana in Venice to set up acontemporary art center. His collectionis also displayed outside Venice.

Jos Ramn lvarez Rendueles, 69,has extensive experience in the nancial,economic and industrial sectors.He is a former Governor of the Bank ofSpain and President of the BankZaragozano. He is the President of theBoard of Directors of ArcelorMittalEspaa, Peugeot Espaa and Sanitas.He is also a retired full professor of publicnance at the Universidad Autnomade Madrid and a Director of GestevisinTelecinco S.A., and Generali Espaa.

Jeannot Kreck, 59, started his universitystudies at the Universit Libre de Bruxellesin 1969, from which he obtaineda degree in physical and sports education.He decided in 1983 to changeprofessional direction. His interests led

him to retrain in economics, accountingand taxation. Following the Luxembourglegislative elections of June 13, 2004,Jeannot Kreck was appointed Ministerof the Economy and Foreign Trade as wellas Minister of Sports on July 31, 2004.Upon the return of the coalitiongovernment formed by the ChristianSocial Party (CSV) and the LuxembourgSocialist Workers Party (LSAP) as a resultof the legislative elections of June 7,2009, Jeannot Kreck retained theportfolio of Minister of the Economyand Foreign Trade on July 23, 2009.

From July 2004, Jeannot Kreckrepresented the Luxembourg governmenton the Council of Ministers of theEuropean Union in the Internal Market andIndustry sections of its Competitivenessconguration as well as on the Economicand Financial Affairs Council andin the Energy section of its Transport,Telecommunications and Energyconguration. He was also a memberof the Eurogroup from July 2004to June 2009.

John O. Castegnaro, 65, serves asa representative of the employees

of ArcelorMittal. He is a memberof the Luxembourg Parliament andHonorary Chairman of the OnhofhngegeGewerkschaftsbond Ltzebuerg(OGB-L) trade union.

Antoine Spillmann, 46, worked for leadinginvestment banks in London from1986 to 2000. He is an asset managerand executive partner at the rmBruellan Wealth Management, anindependent asset management company

based in Geneva. Mr. Spillmann studiedin Switzerland and London and holdsdegrees from the London BusinessSchool in Investment Management andCorporate Finance.

H.R.H. Prince Guillaume de Luxembourg,46, worked for six months at theInternational Monetary Fund inWashington, DC, and spent two yearsworking for the Commission of EuropeanCommunities in Brussels. He studiedat the University of Oxford in theUnited Kingdom, and GeorgetownUniversity in Washington, DC, from whichhe graduated in 1987.


BoardofDirectors 19

John O. Castegnaro Antoine Spillmann H.R.H. Prince Guillaume de Luxembourg Jeannot Kreck


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Senior ManagementGroup Management Board


SeniorManagement20

The strategic direction o the businessis the responsibility o the GMB under

the supervision o the Board o Directors.The GMB members are appointed bythe Board o Directors and the GMB isheaded by Lakshmi N. Mittal as ChieExecutive Ocer. On January 1, 2010,Peter Kukielski joined the GMB as Heado Mining, bringing a wealth o strategy,operations, project development andinternational experience to the

Company. The senior managementteam continues to enjoy the relevanttalent and expertise it needs to continueto deliver the best possible perormanceto all stakeholders.


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Aditya Mittal, CFO, Responsiblefor Flat Americas, M&A, Investor Relations,Strategy and Communications

Aditya Mittal, 33, is Chief FinancialOfcer of ArcelorMittal with additional

responsibility for M&A Business & ProjectDevelopment, Flat Americas, Strategy,Investors Relations and Communications.Prior to the merger to create ArcelorMittal,Aditya Mittal held the position of Presidentand CFO of Mittal Steel Companyfrom October 2004 to 2006. He joinedMittal Steel in January 1997 and hasheld various nance and managementroles within the company. In 1999,he was appointed Head of Mergersand Acquisitions for Mittal Steel. In thisrole, he led the companys acquisitionstrategy, resulting in Mittal Steelsexpansion into Central Europe, Africaand the United States. Besides the M&Aresponsibilities, Aditya Mittal was involvedin post-integration, turnaround andimprovement strategies.

This led to Mittal Steel emergingas the worlds largest and most globalsteel producer, growing its steelmakingcapacities fourfold. As CFO of MittalSteel, he also initiated and led Mittal Steelsoffer for Arcelor to create the rst 100

million tonne plus steel company.In 2008, Aditya Mittal was awardedEuropean Business Leader of the Futureby CNBC Europe. In 2009, he wasalso ranked 4th in the 40-under-40 listofForbesmagazine. He is a memberof the World Economic Forums YoungGlobal Leaders Forum, the YoungPresidents Organization, a Board Memberat the Wharton School, a Board Memberat Bennett, Coleman & Co., a BoardMember at PPR and a member ofCitigroups International Advisory Board.Aditya Mittal holds a Bachelors degree

of Science in Economics withconcentrations in Strategic Managementand Corporate Finance from the WhartonSchool in Pennsylvania. Aditya Mittalis the son of Mr. Lakshmi N. Mittal.

Michel Wurth, Responsible for Flat Europe,Steel Solutions and Services, ProductsDevelopment and R&D, Global Customers

Michel Wurth, 55, was previouslyVice President of the Group Management

Board of Arcelor and Deputy CEO,with responsibility for Flat Carbon SteelEurope and Auto, Flat Carbon Steel Brazil,Coordination Brazil, CoordinationHeavy Plate, R&D, NSC Alliance. The mergerof Aceralia, Arbed and Usinor leadingto the creation of Arcelor in 2002 ledto Michel Wurths appointment as SeniorExecutive Vice President and CFO ofArcelor, with responsibility over Finance andManagement by Objectives. Michel Wurthjoined Arbed in 1979 and held a variety offunctions including Secretary of the Boardof Directors, head of the Arbed subsidiaryNovar and Corporate Secretary, beforejoining the Arbed Group ManagementBoard and becoming its Chief FinancialOfcer in 1996. He was named ExecutiveVice President in 1998. Michel Wurth holdsa law degree from the University ofGrenoble, a degree in Political Science fromthe Institut dtudes Politiques de Grenobleand a Master of Economics degree fromthe London School of Economics.


Senior Management 21

Aditya Mittal Gonzalo UrquijoLakshmi N. Mittal Michel Wurth


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Senior Management22

Gonzalo Urquijo, Responsible for LongProducts, China, Stainless, TubularProducts, Corporate Responsibility:ArcelorMittal Foundation, InvestmentAllocation Committee (IAC) Chairman

Gonzalo Urquijo, 48, previously memberof the Group Management Boardand Senior Executive Vice President andChief Financial Ofcer of Arcelor,held the following responsibilities:Finance, Purchasing, IT, Legal Affairs,Investor Relations, Arcelor Steel Solutionsand Services, and other activities.Gonzalo Urquijo also held several otherpositions within Arcelor, including DeputySenior Executive Vice President andHead of the functional directoratesof distribution. Until the creation of Arcelorin 2002, when he became ExecutiveVice President of the Operational UnitSouth of the Flat Carbon Steel sector,Mr. Urquijo was CFO of Aceralia. Between1984 and 1992, he held a varietyof positions at Citibank and Crdit Agricolebefore joining Aristrain in 1992 as CFOand later Co-CEO. Gonzalo Urquijo is agraduate in Economics and Political Scienceof Yale University and holds an MBAfrom the Instituto de Empresa in Madrid.

Sudhir Maheshwari, Responsible forCorporate Finance, M&A and BusinessDevelopment including India, and RiskManagement; Alternate Chairman ofthe Corporate Finance and Tax Committeeand Chairman of the Risk Management

Committee (reporting to CFO)Mr. Maheshwari, 46, was previouslya Member of the Management Committeeof ArcelorMittal, Responsible for Financeand M&A. Prior to this, he was ManagingDirector, Business Development and Treasuryat Mittal Steel from January 2005 untilits merger with Arcelor in 2006 and ChiefFinancial Ofcer of LNM Holdings N.V.from January 2002 until its merger withIspat International in December 2004.Mr. Maheshwari has over 23 years ofexperience in the steel and related industries.He has played an integral and leading rolein all acquisitions in recent years includingthe ArcelorMittal merger and turnaroundand integration thereof. He also plays a keyleading role in various corporate nance,funding and capital market projects,including the initial public offering in 1997and the various banking and public marketnancing transactions since then.

Over a 21-year career with ArcelorMittal,he also held the positions of Chief FinancialOfcer at Mittal Steel Europe S.A.,Mittal Steel Germany and Mittal Steel PointLisas, and Director of Finance and M&A

at Mittal Steel. Mr Maheshwari alsoserves on the Board of various subsidiariesof ArcelorMittal. Mr. Maheshwari is an honorsgraduate in accounting and commercefrom St. Xaviers College, Calcuttaand a fellow of The Institute of CharteredAccountants and The Institute of CompanySecretaries in India.

Christophe Cornier, Responsible for Asia,Africa, Technology and Projects

Christophe Cornier, 57, was previouslya Member of the Management Committeeof ArcelorMittal, Responsible for

Flat Carbon Western Europe. Prior to that,Christophe Cornier was responsiblefor Arcelors at products activitiesin Europe and for its worldwide automotivesector since December 2005, when hewas appointed a member of the ArcelorsManagement Committee. In June 2005,he was appointed head of Arcelors ClientValue Team. Upon the creation of Arcelorin 2002, he was named ExecutiveVice-President of FCS Commercial Auto.Before that, he was CEO of SollacMediterrane. In 1998, he was appointedCEO of La Magona, after joining SollacPackaging as Managing Director in 1993.In 1985 he joined Usinor, where hewas Business Development Directorand Chief Controller of Sollac. He beganhis career with the French Ministryof Industry, which he left as a DeputyDirector. Mr. Cornier is a graduateof the cole Polytechnique and the coledes Mines in Paris.

Sudhir Maheshwari Peter Kukielski Christophe Cornier Davinder Chugh


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SeniorManagement 23

Davinder Chugh, Responsiblefor Shared Services (reporting to CEO),IAC Member

Davinder Chugh, 53, has over 30 yearsof experience in the steel industry ingeneral management, materials purchasing,marketing, logistics, warehousing andshipping. Davinder Chugh was previouslya Senior Executive Vice Presidentof ArcelorMittal responsible for SharedServices until 2007. Before becominga Senior Executive Vice Presidentof ArcelorMittal, he served as the CEOof Mittal Steel South Africa until 2006.Mr. Chugh also worked in South Africafrom 2002 after the acquisition of MittalSteel South Africa (ISCOR) and wasinvolved in the turnaround andconsolidation of the South Africanoperations of ArcelorMittal. He also servedas Director of Commercial and Marketingat Mittal Steel South Africa, among otherpositions. Mr. Chugh was Vice Presidentof Purchasing in Mittal Steel Europeuntil 2002, where he consolidatedprocurement and logistics across plantsin Europe. Prior to this, he held severalsenior positions at the Steel Authority

India Limited in New Delhi, India. He holdsdegrees in science and law and hasa Master of Business Administration.

Peter Kukielski, Senior Executive VicePresident, Head of Mining

On December 15, 2008, Peter Kukielski,53, was appointed Senior ExecutiveVice President and Head of Miningof ArcelorMittal. Mr. Kukielski willbe responsible for the Companys miningbusiness and for driving its development.Mr. Kukielski was most recently ExecutiveVice President and Chief OperatingOfcer at Teck Cominco Limited. Priorto joining Teck Cominco, he was ChiefOperating Ofcer of Falconbridge Limitedbefore which he held senior engineeringand project management positionswith BHP Billiton and Fluor Corporation.Mr. Kukielski holds a Bachelor of Sciencedegree in civil engineering from theUniversity of Rhode Island and a Masterof Science degree in civil engineeringfrom Stanford University. Effectiveas of January 1, 2010, Peter Kukielskiwas appointed member of theGroup Management Board.

Management CommitteeName Age1 PositionBhikam Agarwal 57 Executive Vice President, Head of FinanceVijay Bhatnagar 62 Executive Vice President, CEO IndiaPhilippe Darmayan 57 Executive Vice President, CEO Steel Solutions and ServicesPhil du Toit 57 Executive Vice President, Head of Mining Projects and ExplorationBernard Fontana 48 Executive Vice President, Head of Human Resources

Jean-Yves Gilet 53 Executive Vice President, CEO StainlessPierre Gugliermina 58 Executive Vice President, Chief Technology OfficerRobrecht Himpe 51 Executive Vice President, CEO Flat EuropeGerson Alves Menezes 60 Executive Vice President, CEO Long Carbon Americas (LCA)Michael Pfitzner 60 Executive Vice President, Head of Marketing and Commercial CoordinationArnaud Poupart-Lafarge 44 Executive Vice President, CEO Africa and Commonwealth of Independent States (CIS)Gerhard Renz 62 Executive Vice President, CEO Long EuropeMichael Rippey 52 Executive Vice President, CEO USALou Schorsch 60 Executive Vice President, CEO Flat AmericasBill Scotting 51 Executive Vice President, Head of Strategy

1 Age as of December 31, 2009


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ArcelorMittals successhas been built upona consistent strategy that

emphasizes size and scale,vertical integration, productdiversity, continuous growth

in higher value productsand a strong customer ocus.The Group intends tocontinue to be the globalleader in the steel industry,in particular through itsthree-dimensional strategy

or sustainability and growth.

Business Strategy


BusinessStrategy24


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ArcelorMittal has unique geographicaland product diversication,coupled with upstream and downstreamintegration that reduces exposureto risk and cyclicality. This strategycan be broken down into its threemajor elements:

Geography: ArcelorMittal is the largestproducer of steel in Europe, Northand South America, Africa, the secondlargest steel producer in the CIS region,and has a growing presence in Asia,particularly in China. ArcelorMittal hassteelmaking operations in 20 countrieson four continents, including 65 integrated,mini-mill and integrated mini-millsteelmaking facilities which providea high degree of geographic diversication.Approximately 35% of its steel is producedin the Americas, approximately 47%

is produced in Europe and approximately

18% is produced in other countries,such as Kazakhstan, South Africa andthe Ukraine. ArcelorMittal is ableto improve management and spread itsrisk by operating in six segments(Flat Carbon Americas, Flat Carbon Europe,Long Carbon Americas and Europe,AACIS, Stainless Steel and Steel Solutionsand Services), reecting its geographicand product diversity.

Worldwide steel demand in recent yearshas been driven by growth in developingeconomies, in particular in the BRICET1countries. The Companys expansionstrategy in recent years has givenit a leading position in Africa, Centraland Eastern Europe, South America andCentral Asia. The Company is also buildingits presence in China and India and recentlymade its rst strategic investmentin India in Uttam Galva.

Products: As a global steel producer,ArcelorMittal is able to meet the needsof diverse markets. Steel consumptionand product requirements are differentin mature economy markets and developingeconomy markets. Steel consumptionin mature economies is weighted towards

at products and a higher value-added mix,while developing markets utilize a higherproportion of long products and commoditygrades. As these economies develop,local customers will require increasinglyadvanced steel products as market needsevolve. To meet these diverse needs,ArcelorMittal maintains a high degreeof product diversication and seeksopportunities to increase the proportionof its product mix consisting of highervalue-added products. The Companyproduces a broad range of high-qualitynished, semi-nished carbon steel

products and stainless steel products.

Value chain: ArcelorMittal has accessto high-quality and low-cost raw materialsthrough its captive sources and long-termcontracts. ArcelorMittal plans to continueto develop its upstream and downstreamintegration in the medium-term, followinga return to a more favorable marketenvironment. Accordingly, the Companyintends in the medium term to increaseselectively its access to and ownershipof low-cost raw material supplies,

particularly in locations adjacent to oraccessible from its steel plant operations.

Downstream integration is a key elementof ArcelorMittals strategy to builda global customer franchise. In high-valueproducts, downstream integration allowssteel companies to be closer to thecustomer and capture a greater shareof value-added activities. As its key

customers globalize, ArcelorMittal intendsto invest in value-added downstreamoperations, such as steel service centersand building and construction supportservices for the construction industry.In addition, the Company intendsto continue to develop its distributionnetwork in selected geographic regions.ArcelorMittal believes that thesedownstream and distribution activitiesshould allow it to benet from bettermarket intelligence and better manageinventories in the supply chain to reducevolatility and improve working capital

management. Furthermore, ArcelorMittalwill continue to expand its productionof value-added products in developingmarkets, leveraging off its experiencein developed markets.

Growth Prospects

Notwithstanding the difcult marketconditions of 2008 and 2009,ArcelorMittals management believesthat there will be strong global steeldemand growth in the medium to longterm. The Company will continueto invest opportunistically in expanding

the production capacity of its existingfacilities depending on market conditionsand projected global and regionaldemand trends.

Mergers and acquisitions have historicallybeen a key pillar of ArcelorMittalsstrategy to which it brings uniqueexperience, particularly in termsof integration. Instead of creating newcapacity, mergers and acquisitions increaseindustry consolidation and create synergies.ArcelorMittal has also placed strongemphasis on growth in emerging economiesthrough greeneld developments. In light

of the difcult economic and marketconditions prevailing in late 2008and 2009, ArcelorMittal curtailed mergersand acquisitions and greeneld investmentactivity. To the extent market conditionscontinue to improve, however,the Company gradually expects toresume mergers and acquisitionsand other investment activity in orderto take advantage of selected growthopportunities, mainly in emerging markets.In addition the Company remainsfocused on pursuing its greeneldgrowth opportunities.


BusinessStrategy 25

1 BRICET refers to the countries of Brazil,Russia, India, China, Eastern Europe and Turkey.

Worldwide steel demand in recentyears has been driven by growthin developing economies, in particularin the BRICET1 countries.


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Nicola DavidsonVice President of ArcelorMittal, Head of Corporate Communications


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The Groups Corporate Responsibility(CR) approach plays an important rolein helping it address key issues both localand global affecting its operations.Key impact areas are addressed throughits dedicated CR strategy. By operatingin a responsible and transparent manner

and establishing good relationships withstakeholders, ArcelorMittal is better ableto attract and retain top talent, managerisk and enhance value creation.

ArcelorMittal aims to adhere tobest-practice guidelines in itsenvironmental, social and governancereporting. While the following pagesprovide an outline of the Groups CRstrategy and performance, more detailedinformation and analysis is available in aseparate CR report published in tandemwith this Annual Report. This is availableat www.arcelormittal.com.

CR Governance

The Board of Directors oversees CRacross the Company. Reports coveringdisclosure, environment, Health and Safety,community and employee engagement,and ArcelorMittal Foundation investmentswere submitted at each of its meetingsduring 2009.

The Group Management Boardrepresentative for CR is Gonzalo Urquijo.Matters of specic relevance to the Group,such as community engagement,human rights and local CR governance,as part of summary CR reports, werediscussed at least every quarter at the

Group Management Board meetings.In parallel, specic presentations weremade on among other subjects:Health and Safety and environment.Key risks and mitigating actions are detailedin subsequent sections of this chapter.

At Group level, the corporate CR teamis supported by the CR CoordinationGroup which acts as an adviser;reviewing standards, examining possiblerisks, monitoring the implementationof the CR strategy, and guidingcommunications. It consists of seniormanagement from other corporate areas,

including Risk, Internal Assurance, CompanySecretary, Communications and Legal.The CR Coordination Group meetsperiodically through formal meetingsand workshops.

At local level, the Group is in the processof establishing a participatory CRgovernance structure to promote effectivecommunity relations and CR management.This is supported by roles andaccountability descriptions for CEOs/plantmanagers and CR Coordinators at all levelswithin the Group.

CR Strategy

ArcelorMittals CR strategy is structuredaround four focus areas that reectthe key priorities of its business and itsstakeholders:

Investing in our people

It is a core tenet of Group policythat each and every person workingfor ArcelorMittal feels valued.

Making steel more sustainable The Group is focused on achievinga continuous improvementin environmental performancethrough the development of cleanerprocesses and greener products.

Enriching our communities ArcelorMittal plays an important rolein all the communities where it operates.

Transparent governance The Groups business strategy, operations

and everyday practices are underpinnedby transparent corporate governance.

The four CR strategy areas aremeasured through 14 measurableKey Performance Indicators (KPIs).These are described in more detailin the stand-alone CR report.

Corporate Responsibility

ArcelorMittal believes the sustainabilityo its business and the creationo long-term shareholder valuego hand-in-hand with the wellbeing

o its people and the communitiesin which it operates.


CorporateResponsibility28


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Health initiatives:Paying more attention to health

ArcelorMittal views the health of itsworkforce as a key element in thesuccess of its operations. Maintaining goodhealth is critical to the CompanysHealth and Safety record. In this respect

a major effort was made to developa check list for all sites to deal with theH1N1 Inuenza.

The network of ArcelorMittal medicalspecialists collaborating globally with theGroup was expanded in 2009, leadingto the creation of Communities of Practice.This will permit the Group to mount astronger campaign of preventative healthmeasures in 2010, targeting such problemsas asbestos and bers, noise, harmfulparticulates, radiation, gasses, stress,ergonomics and respiratory protection.Other, more general areas to be targetedwill include vaccinations, travel, malaria, HIV,addiction and stress management(some of which are non-occupational).

Product Safety initiatives:REACH and Product Stewardship

ArcelorMittal has continued to preparethe registration of all relevant substancesin conformity with the EUs REACHlegislation, concerning the registration,evaluation, authorization and restriction

of chemicals. For some it is assumingthe role of lead registrant and takingan active role with others. Registrationwill be completed by the end ofNovember 2010.

ArcelorMittal

the health o

as a key elesuccess o its

Investing in our People




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The Product Stewardship team hasconrmed that in 2009, all requiredcerticates of products and by-productshave been provided to customers,supporting their selling. This approachleads to cooperation with externalpartners and R&D whenever requiredor appropriate, and will continuethroughout 2010.

views

its workorce

ent in theoperations.


CorporateResponsibility 31


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Human ResourcesThe ArcelorMittal Human Resources (HR)professionals help the Company leadershipattract, develop and retain tomorrowsleaders, enable employees at all levelsto manage their performance, realize theirpotential and build and maintain goodrelations and social dialogue with employeesand their representatives. In 2009,they played a key role in developingthe necessary cost adaptation measuresin response to the economic crisis.

Dialogue with trade unionsand employees

Efforts were stepped up in 2009 to keepemployees informed about the impactof the economic crisis on the businessand to outline the measures takento overcome the global downturn andto position the Company for future growth.

The vast majority of ArcelorMittalemployees are represented by tradeunions. The Group is party to collectivebargaining agreements with many employeeorganizations as part of its commitmentto open dialogue.

Social dialogue structure at all levelsin the Company facilitates regular,constructive discussions betweenmanagement and employee representatives.An intense social dialogue has taken placewhile necessary cost adaptation measureswere designed and deployed. The SelectCommittee of the European Works Councilmet on a monthly basis in order to becontinuously informed of the situationof the Company.

To further enhance dialogue,

ArcelorMittal signed an anticipationof change agreement with the EuropeanMetalworkers Federation. The agreementaims to enhance and support sustainabilityand competitiveness of ArcelorMittaloperations in Europe specically.

Following the signing of a landmarkJoint Global Health and Safety (JG H&S)Agreement with all of its trade unionsa JG H&S Committee comprising bothmanagement and union representativeshas been established and meets quarterly.A Joint Health and Safety Committeein every plant now meet at least monthly.The process is monitored by theJG H&S Committee.

Workforce plans, skills requirementidentication and training

The growth plans and the performance

continuous improvement programsof the Company require the participationand the development of numerousperformers and talents all over the world.

Through the Global ExecutiveDevelopment Program (GEDP),ArcelorMittal aligns the performanceobjectives of employees with the strategicgoals of the Company and regularly assessesits managers, providing them with feedbackand coaching and supporting theirdevelopment needs according to theemployees aspirations, the Companyvalues and core competencies.

Appointments to new challenging jobsand participation in training programsare conrmed in Career Committeesthat cover all units.

In 2009, ArcelorMittal Universitydelivered more than 40,000 daysof training to ArcelorMittal managers.

Since September 2008, ArcelorMittalhas specically followed 1,096 employeesindentied as talents, providing themwith development opportunitiesto participate to internal forums onstrategy, nance, human resources,

as well as contributing to keyCompany projects.

In ArcelorMittals plants, workforceplans are deployed at all levels in orderto identify the future skill gaps andto train ArcelorMittal employees accordingly.Workforce plans for the managementpopulation are consolidated to assessfuture scarce categories for whichspecic resourcing plans are then developed.In 2009, all ArcelorMittal major unitsupdated their workforce plans.

Diversity & Inclusion PolicyArcelorMittal strives to build a modernand exible work environmentwhich unleashes the diversity, talent,and originality of its workforce.The Companys commitment towardsreaching this goal is embedded inits Diversity & Inclusion policy thatwas launched in April 2009.

JobMarketOnline (JMO)

JobMarketOnline, the Companysweb-based e-resourcing solution, allowsfor the managing of internal and external

resourcing across businesses, functionsand within countries. The internal JMO isavailable in ten languages. The usageof JMO, which recorded over 22,000internal unique visitors in 2009, wasconsiderably boosted with the launchof a monthly e-newsletter that promotesa selection of vacancies.

Business Leaders Program

This program targets external recruitmentof MBAs or other functional Mastersdegrees with proven managerial experienceand gives them the opportunity to developinto the Groups future leaders. By the endof 2009, there were 68 individualson the program and six had graduatedafter completing two assignments indeveloped and emerging marketsor by becoming a senior leader withinthe organization.

Group Engineers Program (GEP)

The GEP was developed in order to attractrecently graduated, talented and mobileengineers. Its aim is to create a poolof internationally mobile engineers with strong potential for growth and theability to assume leading positions

in the future. In 2009, 133 GroupEngineers continued the program of which109 completed a one-year trainingand development period.

International mobility

International mobility is a key leverfor the career development of employeesand a key competitive advantagefor ArcelorMittal. Some 220 mobilityplans were nalized in 2009.

Investing in our People




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Training and Development:ArcelorMittal University

ArcelorMittal University plays a lead rolein the training and development of Groupemployees. In 2009, the Universitychanged the way it delivered muchof its training under the motto Growwith us.

Training employees is essential forArcelorMittal. As a consequence,to maintain high levels of trainingin light of the economic environmentin 2009 and cost-saving efforts, a numberof the Universitys programs moved online allowing employees to learn anywhere,anytime at their own pace. Synchronizeddistance learning was introduced,making use of virtual classroomsfor scattered target groups such ascommunities of subject experts based indifferent locations. In 2009, about 10,000employees spent 278,000 hours learningwith online programs. The number of usersof the Online English and the OnlineCampus programs increased during 2009,

showing the success of these learning tools.However, local classroom training remainsthe most cost-effective solution for largergroups and consequently ArcelorMittalUniversity has rolled out its corporateprograms for local delivery. Among the newinitiatives were Lunch & Learn local sessionson key topics for the Company and ULearn,a biweekly e-magazine featuring articles,podcasts and white papers.

The Leadership Academy introduceda specially designed program calledRecognizing Potential. Launched with700 participants from more than40 countries, the program combinede-learning, virtual conferencesand optional project work. A new programof Talent Pipeline training will recommencein spring 2010.

The Management Academy offersa range of programs to improve and enhancepersonal and team effectiveness, businessacumen and interpersonal skills, thusgiving opportunity to every employeeto enhance leadership and managementcapabilities. They were similarly deliveredthrough online modules in 2009. Trainingand specic tools on team effectivenessand cross-cultural awareness will bedeveloped in 2010.

Functional Academies have been set

up to offer learning, development,skill and competency enhancing trainingopportunities. They target each specicfunctional population, including, in 2009,Steel and Mining, Human Resources,Purchasing, Internal Assurance, IT,Sales and Marketing, Finance and R&D.

Steel and Mining Academy

The purpose of the Steel and MiningAcademy is to disseminate an understandingand mastery of steelmaking and relatedactivities. The academy now operatesthe Universitys longstanding programssuch as Steel for Steel People and

Understanding Steel, for which therewas increased participation in 2009.New programs were created in sinteringand wire drawing and modules on metallurgy,blast furnaces and cold rolling weredeveloped at the request of different plants.In all, more than 1,100 people took partin the academys programs, an increaseof more than 20% on the previous year.The Mining Academy, initiated in 2009,will provide a similar offer for the miningactivities in 2010.

New Group programs

The Project Leaders Program aimsto create project management expertswithin the Company who understandthe ArcelorMittal way of managingprojects and who can be quickly deployedto manage existing browneldand upcoming greeneld projects. A totalof 128 participants were nominatedfor the one-year program.

A new 18-month program focusedon talents with a strong nancial background

and interested by key nancial rolesin CIS countries was initiated. The program,titled CIS-Finance Future Leaders Programcommenced with 22 participants fromCIS countries (Ukraine and Kazakhstan),who are interested in transitioning into localleadership positions in nance.

In 2010, ArcelorMittal Universitywill continue to support the strengtheningof ArcelorMittals leadership andmanagement skills. Training is a priorityfor the whole Company, especiallyafter reshufing teams in 2009.The Climate Survey circulated throughout

the Company acknowledged the employeesdesire for a continuous learningenvironment. Programs are designedto facilitate the development of skilledpeople that will lead ArcelorMittal intothe future. As a result, training will bepromoted further throughthe Functional Academies and specicprograms such as Project LeadersProgram and Future Leaders Program.The 2010 programs combine online,distance and classroom training,thus providing an efcient and costeffective learning solution, which proved

successful in 2009.

The purpose o the Steeland Mining Academy is to disseminatean understanding and masteryo steelmaking and related activities.




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Making Steel more Sustainable

Confronting climate changeArcelorMittal recognizes its responsibilitytowards helping reduce greenhouse gasemissions. Steelmaking is a carbon-intensiveprocess. However, the steel industry in Europehas already taken considerable strides to reduceits carbon ootprint, having more than halvedits emissions in the past 30 years. Achievingurther reductions is a major challenge.




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However, the Group is respondingto that challenge with a varietyof initiatives. Some will bear fruit overthe medium term; others are essentiallylong term in nature.

ArcelorMittal is committed to makinga progressive reduction in the amountof CO2 emitted in the steelmakingprocess over the next decade. The Grouphas set a target of reducing emissionsby 170kg per tonne of steel producedby 2020. That is equivalent to an 8%reduction in specic emissions.

The target will be achieved througha combination of process improvementsand increased energy efciency. It isdened for the 2007 perimeter ofindustrial activities applying a rigorousaccounting method taking into accountall the emissions including upstream

and plant emissions. The target excludesthe specic use of scrap or direct reducediron (DRI) as a means to lower thecarbon emission.

While many of the Groups plants inEurope, North America and South Americaare close to the technical limits of whatcan be achieved in emissions reduction,there is still work to be done to bringother plants up to the standards of thebest. To that end, the Group has putin place a benchmarking system thathighlights where improvements can stillbe made. Detailed action plans have

been drawn up that set realistic targetsfor improved efciency and reducedenergy usage. As part of the process,2009 saw an acceleration in the sharingof best practice around the world.

Recycling is an important part in combatingclimate change. Each year, more than25 million tonnes of products arerecovered and recycled, saving around36 million tonnes of CO2. At the sametime, ArcelorMittal has stepped upthe recycling of steelmaking residues.

For instance, at the former steelmakingsite at Isbergues, northern France,residues from other French and Belgianplants are being reprocessed intoferro-alloys iron, road-building slagand zinc oxide dust, from whichother producers extract zinc.

Due to the global economic crisis,the production levels of the Group weredrastically reduced as compared withprevious years. At the same time theemissions of green house gases decreasedaccordingly. Therefore, the emissionswill increase again when the economic

activity picks up. In the meantime,however, plans and actions are beingexecuted to improve the carbon efciencyof the operations in line with thecommitment for 2020.

As part of its longer-term approach,ArcelorMittal is working to developbreakthrough technologies. As a keymember of the EU Ultra Low CO2Steelmaking project (ULCOS), the Groupis developing a technology that combinesCO2 capture through top gas recyclingand a possible storage later on.

A demonstration project includinga small blast furnace at ArcelorMittalEisenhttenstadt in Germany anda full scale blast furnace at the Florangeplant in France is now being studiedby a consortium consisting of mostEuropean steelmakers.

By using pure oxygen instead of airand recycling gas at the top of the blastfurnace, ArcelorMittal expects to achievea 25% reduction in the amount of carbonused. Around half of the CO2 emittedwill then be captured and stored.The technology has the potential

to transform the steel industrys carbonfootprint. For more information,please see www.ulcos.org.

ArcelorMittal receives secondconsecutive ENERGY STAR honor

On March 2, 2009, ArcelorMittalwas selected for the second consecutiveyear as an ENERGY STAR Partnerof the Year for its excellent energymanagement. ArcelorMittal continuesto be the only steel company to achievethis respected distinction granted bythe US Environmental Protection Agencyand the US Department of Energy.Since 2006, ArcelorMittals US facilitieshave focused on improving energyefciency and reducing costs all whileincreasing productivity. To accomplishthese goals, the Company launchedan Energy Reduction Initiative that,over the past three years, has helpedit reach a 4.1% improvement inenergy intensity. This is equivalent to$131 million of annualized savings.Over the past two years, ArcelorMittalsUS facilities have achieved energysavings by reducing use of natural gas,fuel oil and purchased electricity.ArcelorMittal USA has also workedhard to spread the word about energyconservation to its employees,families, suppliers, end users andthe general public.




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EnvironmentThe Group constantly invests to developnew processes and more sustainablepractices, while working in partnershipwith its customers to help themdevelop more sustainable and moreenergy-efcient products.

ArcelorMittal monitors air, water, energyand waste data from all of its facilities andcontinuously reviews all its environmentalimpact worldwide. By the end of 2009,93% of all main production sites hadachieved certication to ISO 14001.

ISO 14001 is the internationally recognizedstandard for environmental managementsystems. Between 2008 and 2009,the plants achieving certication increasedfrom 142 to 168.

Group-wide environmental and energypolicies, together with the Companys energymanagement system, cover every aspectof energy purchase and usage. In 2009,new energy management objectiveswere set for every plant. They target anaverage energy saving of 5% by 2013and are supported by a list of best operationalpractices and technology standards.

Innovations targeted at reducingenvironmental impact

Major advances are already being made.In 2009, ArcelorMittal Kryviy Rih in Ukrainewon three prizes in a national energyefciency competition having implemented179 different energy saving measures overthe previous year. These resulted in savingsof 19,000 tonnes of equivalent fueland more than 15,000 kWh of energy.

ArcelorMittal also works to reduce waterconsumption and is targeting high-prioritysites in areas where there are watershortages. The challenge is to employwater re-use techniques from the Groupstop-performing plants. Eight sites in Brazil,Spain and South Africa currently generatezero efuent.

Reduction of by-products, such as dust,nitrous oxide, sulfur dioxide and volatileorganic compounds, are anotherenvironmental area of the Companysfocus. In Ostrava, in Czech Republic,modernization of sinter plants Northand South is expected to reduce dustemissions by 70% and SO2 emissionsby 60%; the ongoing project will cost$80 million. In Galati, Romania, theinstallation of de-dusting equipment,completed in May 2009 at a costof $20 million, has led to a 95% reductionin dust emissions beyond EU norms.

In the quest for ever more sustainableproducts, a dedicated environment,life-cycle and materials team quantiesthe end-to-end impact of the Groupssteel products, including the evaluationand validation of new products in partnershipwith the Research and Development team.It applies the techniques conformingto the ISO 14040-44 life-cycleanalysis standard.

ArcelorMittal has led in the developmentof stronger steels that enable its customersto create lighter and more energy-efcient

products or reduce the environmentalimpact of their own activities. Its advancedhigh-strength steels can reduce theweight of industrial gas cylinders by 30%and the weight of automotive parts by 30%.The Groups S-in motion project, due fordeployment in mid-2010, uses the Groupsexpertise in Advanced High Strength Steels(AHSS) to produce new materials andpropose solutions that will reduce the weightof a typical automotive component bya further 20%, while maintaining safetyand performance.

In the construction market, the Groups

high-strength HISTAR steel offers anunprecedented combination of strength,safety and weldability, reducing theweight of steel columns by 32%, whichin turn can reduce the CO2 producedin the construction process by as muchas 30%. The Groups range of solar panelsolutions, relaunched under the amheliosTMname, was extended in 2009.Over a 30-year lifetime, am

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AnnualReport2009_Arcelor_Mittal

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