ANNUAL REPORT ARCELOR 2003 - paperJam

Long Carbon SteelsIn million of eurosAt 4,381 million euros as at December 31, 2003 versus4,256 million for the 2002* financial year, revenues forthe Long Carbon Steels sector increased by 2.9% (2.2%on a comparable basis). In the context of the generallyweak demand in Europe, its position as market leaderallowed the sector to hold on to its sales positions. Itwas also able to take advantage of strong non-Europeanmarkets, even though the rise in the value of the euroblunted the effect of the price increases seen in SouthAmerica and in worldwide exports.At 493 million euros versus 613 million in 2002*, grossoperating result declined by almost 20%. However,at over 11%, the sector’s gross operating marginremained satisfactory, despite the significant increase inthe cost of scrap and the impact of the depreciation ofthe Brazilian real on the contribution made by Belgo-Mineira in Brazil, excellent as it was.Operating result amounted to 311 million euros in 2003versus 430 million in 2002*.As a result of the significant increase in scrap prices, theLong Carbon Steels sector made every effort to pass therepeated raw material price increases through to salesprices by introducing in November a “scrap surcharge”linked automatically to scrap price movements inEurope.2003 2002 2002Proforma(unaudited)Revenues 4,381 4,256 3,605Change (1) 2.9% - -Gross operating result 493 613 484% of revenues 11.3% 14.4% 13.4%Shipments (in kT) 12,221 11,930 10,104(1) Change from 2002 is proforma (unaudited)Shipments increased by 2.4% in 2003 to 12.2 milliontonnes compared with 11.9 million tonnes in 2002*.In terms of sales and marketing, trends in the sectordiffered depending on the products and the markets.In the beams market, 2003 saw a further erosion ofapparent demand in Europe, particularly in the EuropeanUnion (EU15), where it decreased by about 7%compared to 2002*. Economic activity in the IberianPeninsula slowed down in the course of the year, notablyin Portugal. Arcelor shipments in that area suffered adecline from the previous financial year as a result ofincreased competition due to the creation of additionalcapacities in Spain. Arcelor chalked up solid growth inthe other countries of the European Union and continuedits growth policy in the countries of Central and EasternEurope. Worldwide export shipments outside NorthAmerica increased substantially in 2003 as a resultof the economic recovery recorded, mainly in Asia,fuelled above all by strong growth in China and also theMiddle East. Sales in the United States, despite somepositive economic signals, were noticeably down fromthe previous year as a result of the commissioning ofadditional capacity and the desire on the part of localproducers to limit imports.business report > group consolidated management report* Numbers for 2002 are proforma (unaudited)ANNUAL REPORT ARCELOR 2003 73