Acknowledging that a combination of structural issues and macroeconomic conditions will continue to challenge returns in our sector, we have adapted our footprint to the new demand realities, intensified our efforts to control costs and repositioned our operations to outperform our competitors.
Against this backdrop, our strategy is to leverage four distinctive attributes that will enable us to capture leading positions in the most attractive areas of the steel industry value chain, from mining at one end to distribution and first-stage processing at the other:
- Global scale and scope
- Unmatched technical capabilities
- Diverse portfolio of steel and related businesses, particularly mining
- Financial capability
A clear licence to operate
Many of ArcelorMittal's businesses are located in regions that are in the early stages of economic development. Practically all are resource-intensive. We recognise that we have an obligation to act responsibly towards all stakeholders. ArcelorMittal's commitment to sustainability is outlined in the sustainability section. Sustainability is a core value that underlies our efforts to be both the world’s safest steel and mining company and a responsible environmental steward.
A strong balance sheet
In recent years we have made significant progress in reducing debt. Post its most recent actions, the Company now has a solid balance sheet and a platform to deliver on its strategic plans. In the currently foreseen environment the Company’s priority for free cash deployment will be further strengthening the balance sheet until such time that the ratio of net debt to Ebitda declines to less than 2x, at which point the Board will consider restarting dividends to shareholders.
A decentralised organisational structure
ArcelorMittal's scale and scope are defining characteristics that give us a competitive advantage. They also introduce complexity and the risks of inefficiency, bureaucracy and diffuse accountability. To manage these risks, we favour a structure in which the responsibility for profit and loss is focused on business units aligned with markets.
Active portfolio management
Throughout our history, we have sought to grow and strengthen the business through acquisition. That remains the case. The acquisition of existing assets and businesses is typically seen as a more attractive growth path than greenfield investment. But we are also willing to dispose of businesses that cannot meet our performance standards or that have more value to others.
The best talent
ArcelorMittal’s success will depend on the quality of our people, and our ability to engage, motivate and reward them. As explained in outcomes 1 and 9, we are committed to investing in our people and ensuring a strong leadership pipeline. We will continue to improve our processes to attract, develop and retain the best talent.
On February 5, 2016, we announced our Action 2020 plan, which represents a strategic roadmap for each of our main business segments. The Action 2020 plan is over and above our ongoing management gains plan (which targets cost savings relating to reliability, fuel rate, yield and productivity) and seeks to deliver real structural improvements unique to our business. The plan targets an improvement in our operating results of $3 billion by 2020, based on current steel spreads and raw materials prices. We expect to generate improvements through a combination of cost optimisation, volume gains and product mix enhancement.
Find out more
Our 10 sustainable development outcomes
As the world’s leading steel and mining company, we have a major contribution to make towards a more sustainable future. Our 10 sustainable development outcomes are a compelling, practical and demanding way to do this, from the way we make steel and use resources, to how we develop new products, and support our people and our communities.
Find out more