ANNUAL REPORT ARCELOR 2003 - paperJam

Message from the Chairman ofthe Management Board: a conversation withthe CEOAre the results for 2003 in line withyour expectations?Yes, even better than projected, given the difficulteconomic environment in the European Union. In termsof safety, we were actually able to reduce the accidentrate by 40% across all our business units, but whatreally matters here is the “zero accidents” goal. Anyserious accident is intolerable, and we can reduce thenumber of serious accidents only by reducing the totalnumber of accidents, incidents and risk situations. Westill have to make a special effort when it comes to subcontractors,whose accident rate* is still too high. Wecannot accept a two-tier safety system for our Group.With 405 million euros in synergies on an annualisedbasis, we have far surpassed our goal for the year2003 and we are well on our way to reach our goalof 700 million euros per year by the end of 2006. Weare one year ahead of schedule in our goal for debtreduction and for strengthening our balance sheetstructure. The new purchasing organisation hasallowed us to achieve significant synergies thanks tothe introduction of the Total Cost of Ownership conceptin all purchasing segments, resulting in substantialsavings throughout the supply chain. This is a verypositive sign of the efficacy and speed of the mergereffects. This is also true for our sales policy of givingpriority to price over volume which, in the context ofan overall depressed economy in Europe during 2003,allowed us to maintain a satisfactory operating resultbefore exceptional items.We must perform better in terms of innovation, cost andentrepreneurial development. These are the challenges forthe transformation of Arcelor* See glossary.4ANNUAL REPORT ARCELOR 2003