ANNUAL REPORT ARCELOR 2003 - paperJam

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Financial highlights for the GroupIn million of euros2003 2002 2002Proforma(unaudited)Revenues 25,923 26,594 24,533Change (1) (2.5%) - -Gross operating result 2,228 1,978 1,811Operating result (OR) 738 780 680Net result (Group share) 257 (121) (186)Net result per share (in euros) 0.54 (0.25) (0.38)(1) Change from 2002 proforma (unaudited)The Group had consolidated revenues of 25,923 millioneuros in 2003 compared with 26,594 million in 2002*, adecline of 2.5% (a 0.6% decline at comparable consolidation).The financial year was characterised by a risein steel prices that was only partly dampened by thevolume reductions made during the year, and by a currencyeffect due to the appreciation of the euro.The consolidated gross operating result posted bythe Group, amounting to 2,228 million euros in 2003compared with 1,978 million in 2002*, includes (75) millionin non-recurring items (essentially restructuringcosts net of capital gains from the sale of PUM Plastiques).The effect of cost cutting, synergies from themerger, and the recovery of steel prices by and largeoffset the impact of the business slowdown and thedecline in volume – mainly in flat carbon products.The consolidated operating result posted by theGroup, standing at 738 million euros in 2003 comparedwith 780 million in 2002, included (543) million euros innon-recurring charges; the Group reflected in its booksthe strategies announced during the first half of 2003 forthe Flat Carbon Steels sector and particularly for theStainless Steels, Alloys and Specialty Plates sector.After net financial charges of 321 million euros, a positivecontribution from the associated companies of 140 million,a tax charge of 141 million, and taking into account159 million in minority interests, consolidated net result(Group share) was 257 million euros compared with aloss of 121 million for the 2002 financial year*.Changes in Net Financial DebtSubstantially surpassing its goals and undertakings, theGroup reduced its net financial debt by more than 1.5 billioneuros in the 2003 financial year (4,464 million euros as atDecember 31, 2003 compared with 5,993 million as atDecember 31, 2002*). Cash generation accelerated substantiallyover the second part of the year. The programmeto reduce working capital requirements instituted shortlyafter the merger has borne fruit and the special attentiongiven to inventory reduction has paid off. The Group alsopursued a policy to control investment costs whilecollecting the proceeds from the sale of PUM Plastiquesat the end of 2003. The financial structure of the Groupis, therefore, significantly reinforced and the net financialdebt/equity ratio is now close to the 0.5 target set for2004.* Figures for 2002 proforma (unaudited)68ANNUAL REPORT ARCELOR 2003
Net financial debt / Equity ratioIn million of euros2003 2002 2002Proforma(unaudited)Interest-bearing liabilities (long-term) 4,871 4,594 4,594Interest-bearing liabilities (short-term) 1,551 3,821 3,821Net financing linked to securitisation - (1,097) (1,097)Cash and cash equivalents (1,890) (1,239) (1,239)Revaluation of financial instruments (68) (86) (86)(short-term & long-term)Net financial debt 4,464 5,993 5,993Shareholders’ equity (Group share) 6,733 6,768 6,732Minority interests 730 663 661Total equity 7,463 7,431 7,393Net negative goodwill 676 627 627Equity 8,139 8,058 8,020Net financial debt / Equity 0.55 0.75 0.75business report > group consolidated management reportBreakdown of Working capital requirementIn million of euros2003 2002 and2002 Proforma(unaudited)Inventories 5,497 6,091Customers 3,253 4,320Other debtors 1,378 1,333Other liabilities (long-term) (163) (205)Suppliers (4,348) (4,111)Other creditors (2,194) (2,023)Net financing linked to securitisation - (1,097)Revaluation of financial instruments (short-term) - (1)Working capital requirement 3,423 4,307ANNUAL REPORT ARCELOR 2003 69
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ANNUAL REPORT ARCELOR 2003ANNUAL RE
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Message from the Chairman ofthe Boa
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Message from the Chairman ofthe Man
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Does this mean that the Group is en
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8ANNUAL REPORT ARCELOR 2003
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Portrait of the GroupArcelor was bo
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The Arcelor/Nippon Steel Corporatio
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Key Figures for 2003Revenues (1) Re
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2003 highlightsOn January 24, 2003,
Page 20 and 21: Corporate GovernanceBoard of Direct
Page 22 and 23: Report of the Chairman of the Board
Page 24 and 25: Role and authority of the Board of
Page 26 and 27: 4.2. The Audit Committee andthe App
Page 28 and 29: AuthorityThe powers of the Manageme
Page 30 and 31: B. Internal Control Procedures1. GO
Page 32 and 33: 3.3. Internal control procedures go
Page 34 and 35: Information regarding capital, mark
Page 36 and 37: Market informationListingArcelor sh
Page 38 and 39: Information policyArcelor intends t
Page 40 and 41: 38ANNUAL REPORT ARCELOR 2003
Page 42 and 43: table of contents >Flat Carbon Stee
Page 44 and 45: Within this context, and in order t
Page 46 and 47: 3.3. Packaging steelsThe packaging
Page 48 and 49: table of contents >Long Carbon Stee
Page 50 and 51: 3. THE SECTOR’S PRODUCTS ANDMARKE
Page 52 and 53: table of contents >Stainless Steels
Page 54 and 55: The distribution of the UGINE & ALZ
Page 56 and 57: The adaptation plan - industrial re
Page 58 and 59: table of contents >Distribution-Pro
Page 60 and 61: 2. ORGANISATION OF THE SECTORThe ye
Page 62 and 63: Other ActivitiesThe “Other Activi
Page 66 and 67: Group Consolidated Management Repor
Page 68 and 69: Trends in global crude steel produc
Page 72 and 73: Return on capital employed (ROCE) b
Page 74 and 75: BUSINESS BY SECTORFlat Carbon Steel
Page 76 and 77: Even though shipments in 2003 in th
Page 78 and 79: From a financial standpoint, and ex
Page 80 and 81: The Trading and Distribution busine
Page 82 and 83: - in September 2003, the sale of th
Page 84 and 85: The market tightness provoked by th
Page 86 and 87: Risk ManagementGeneral legal risks
Page 88 and 89: Group purchasing performanceIn addi
Page 92 and 93: Implementation of the Sustainable D
Page 94 and 95: Arcelor’s principles Principal ac
Page 96 and 97: Organisation of Sustainable Develop
Page 98 and 99: indicators 2002 2003Principle 4 - O
Page 100 and 101: Group profitabilityObjectives• Av
Page 102 and 103: Arcelor Health and Safety policyArc
Page 104 and 105: Safety certificationsSeveral Arcelo
Page 106 and 107: Arcelor Environmental PolicyArcelor
Page 108 and 109: Implementation of a monitoring plan
Page 110 and 111: Dialogue with all stakeholdersObjec
Page 112 and 113: Dialogue with societyArcelor partic
Page 114 and 115: Development of individual interview
Page 116 and 117: Scientific CouncilChairman:• Marc
Page 118 and 119: Corporate governanceObjectives• E
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SponsorshipEvery year, the various
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Durability: Manufacturers are now a
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GENERAL INFORMATION ABOUTARCELORCor
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Cold-rolled flat products: In 2001,
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Safeguard clause• United States:
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Consolidated financial statementsof
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CONSOLIDATED CASH FLOW STATEMENTIn
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NOTES TO THE CONSOLIDATED FINANCIAL
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Assets intended to be disposed of o
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AmortisationAmortisation is recogni
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13) EquityRepurchase of share capit
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18) Other provisionsA provision is
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The major changes in the consolidat
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NOTE 4 - INTANGIBLE ASSETSGoodwill
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NOTE 5 - PROPERTY, PLANT AND EQUIPM
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NOTE 7 - OTHER INVESTMENTSThe main
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NOTE 13 - EQUITY13.1 Issued capital
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NOTE 15 - MINORITY INTERESTSIn the
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16.6 Detail of main individual long
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17.2.2 Additional pension plansFran
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17.2.3 Leaving indemnities (continu
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18.2 Early retirement plansAn actua
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NOTE 22 - NET FINANCING RESULTIn EU
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NOTE 24 - RELATED PARTY DISCLOSURES
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The portfolio of financial instrume
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NOTE 26 - COMMITMENTS GIVEN AND REC
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27.1 Breakdown by activity (continu
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27.2 Geographical breakdown(Figures
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NOTE 29 - RECONCILIATION OF THE ARC
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Company name Consolidation Country
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Audit31, Allée Scheffer Telephone
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Annual accounts Arcelor S.A.ANNUAL
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INCOME STATEMENT FROM JANUARY 1 TO
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NOTE 3 - STATEMENT OF TANGIBLE FIXE
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NOTE 8 - PROVISIONS FOR LIABILITIES
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NOTE 14 - DIRECTORS’ REMUNERATION
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Arcelor Ordinary General Meeting on
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GlossaryAnnealing:The heat treatmen
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How steel is made?a 3-stage process
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Arcelor’s main steel-manufacturin
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NOTES210ANNUAL REPORT ARCELOR 2003
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Concept and realization133, avenue
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