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ARCELOR FINANCE ORGANIZATION. November 2005. Martine Hue Senior Vice President Investor Relations. 7 PRINCIPLES. “Cash belongs to ARCELOR” Centralization of financial risks (ARCELOR FINANCE, ARCELOR TREASURY)
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ARCELOR FINANCE ORGANIZATION November 2005 Martine Hue Senior Vice President Investor Relations
7 PRINCIPLES • “Cash belongs to ARCELOR” • Centralization of financial risks (ARCELOR FINANCE, ARCELOR TREASURY) • Global cash pooling organization and finance policy (procedures approved by Audit Committee) • Balanced debt structure: Bank/Market/Institutions • Liquidity risk management with « safety net » credit lines • Gearing (Debt/Equity) under 50% in 2004. Today under 20% • Internal dividend distribution: 100% pay out Ratio with limited exceptions Investment grade rating : S&P : BBB Moody’s : Baa2 / outlook positive
ORGANIZATION M. WURTH CFO, Member of Manager Board INVESTOR RELATIONS CONSOLIDATION TAX, INSURANCE AND LEGAL FINANCE CONTROLLER DESK
FINANCE Organized as a « CORPORATE BANK »
FINANCE • One functional structure CORPORATE BANK ARCELOR FINANCE (Luxembourg) ARCELOR TREASURY (Paris) M&A SUPPORT (Luxembourg) FUNDING GROUP OPERATIONS TREASURY M&A (Finance) • Bank relations • Market operations (Bonds,…) • Structured finance • Rating Agency • Internal Investment Bank • Valuations • Deal structuring • Credit Committee • Balance sheet structure • Internal funding • Internal dividend policy • Cash Pooling • Forex • Commodities • Energy, CO2 Country branches: France, Germany/Luxembourg, Belgium/NL, Spain, Italy, USA, Brazil
Arcelor Corporate Bank Equity Debt Arcelor S.A. 99,99% 99,92% 99,02% 99,56% 95,03% Arbed Investments Services S.A. Arbed Investments S.A. Usinor S.A. Aceralia CS S.A. Arbed S.A. 99.95% 0.008% commandité 99.99 % 0.008% commanditaire 0.01% commandité 0.008% commandité 0.008% commandité Arcelor Arcelor Finance Treasury S.C.A. 0.008% 0.008% SNC commanditaire commanditaire Guaranty Debt Cash Pool Intra-group debt Operational Units Operational Units Banks & Capital Markets Dealing room Banks FINANCE • Specific Legal Structure • Arcelor Treasury Snc and Arcelor Finance ScA: Specific General Partnership structure • Acting partners have jointly and indefinitely unlimited responsibility of Arcelor Finance debt • 80% minimum of Gross debt located at Arcelor Finance level or over to avoid « Structural Subordination »
DEBT STRUCTURE (on checking) 81% Euros, 12% US Dollars, 7% others 2/3 variable rate 1/3 fixed rate
LIQUIDITY MANAGEMENT ASSET MANAGEMENT • No operational lease • True Sale of Receivables program • Syndicated committed Bank facility 3 billions€ + More than 1.5 billion € bilateral Bank facilities + Umbrella lines for Trade Finance all over the world
ARCELOR BALANCE DEBT STRUCTURE (as of September 30, 2005) (Billions €)