SOURCE: Arcelor

February 16, 2006 05:45 ET

ARCELOR : 2005 annual results:

La Défense Cedex -- (MARKET WIRE) -- February 16, 2006 -- Arcelor pursues global growth and delivers excellent results: EUR 3.85 billion net profit

- Dividend :1.2 euros per share, 85% increase per share

- Earnings per share of 6.26 euros

- ROCE : 26.5 (return on capital employed)

- Successful global growth

- Outstanding management gains

- Strong cash-flow generation

- Demonstrated increased resilience to industry cycle

In the fourth year since its creation, Arcelor reports outstanding results with a gross operating result of EUR 5.6 billion and a net result, group share of EUR 3.8 billion. Strong cash generation allowed further debt reduction of 1.3 billion in 2005.

At 1,252 million euros, net profit, group share, for the fourth quarter, shows excellent resilience of results despite adverse market conditions added to year end seasonal effects.

Resolutely profitable and growth oriented: 2005 highlights

- EUR 1.9 billion cumulated management gains on an annual basis since the creation of Arcelor in 2002. Target of EUR 700 million merger related synergies achieved one year ahead of schedule;

- Continuous improvement of profitability - through cost cutting and restructuring of its European base and Brazilian expansion;

- Margins protected by production levels adaptation to market needs in Europe;

- Active portfolio management;

- Continuous improvement of safety ratios at group level: accident frequency rates divided by four since 2002;

- Number one steelmaker in Latin America with the creation of Arcelor Brasil and the acquisition of a majority stake in Acesita.

These structural enhancements have improved the Group's risk profile which benefits now from an enhanced portfolio of products and a broadened, highly competitive global industrial base. The addition of Canadian steelmaker Dofasco will further strengthen Arcelor's global industry leadership position

Luxembourg, February 16th, 2006 - The Board of Directors meeting on February 15th, 2006 under the chairmanship of Joseph Kinsch reviewed the financial elements of the Group and the Company for 2005.

The Board of Directors will propose to the shareholders' meeting a gross dividend of 1.20 euros per share (0.65 euros in 2004). Dividend will be paid on May 28th, 2006, subject to General Assembly.

At December 31st, 2005, net result, group share, amounted to 3,846 million euros compared to 2,314 million for the year 2004.

For the fourth quarter 2005, net profit group share amounted to 1,252 million euros.

Consolidated revenue for the Group in 2005 was 32,611 million euros compared to 30,176 million for 2004, or an increase of 8.1 percent (3.9 percent on a comparable basis). The fiscal year has been characterized by a severe drop on spot prices along the third quarter leading to significant reduction of shipments (-3.4percent on total and -12.9 percent in Europe) and production cuts (-11.4 percent in Europe).

Consolidated revenue for the fourth quarter was 8,352 million euros compared to 8,431 million for the fourth quarter of 2004. Consolidated revenue include Acesita, consolidated as of October 1st, 2005.

Geographical breakdown of sales was as follows: 71.2 percent in the EU (25), 9.1 percent in North America, 10.8 percent in South America and 8.9 percent in the rest of the world. Growth in South America is mainly due to the consolidation of Acindar (Long Carbon Steel, Argentina) and CST (Flat Carbon Steel, Brazil) for the full year.

Consolidated gross operating result amounts to 5,641 million euros in 2005, compared to 4,341 million in 2004 and comprises 106 million of non recurring items. Management gains and the full consolidation of CST (Brazil) and Acindar (Argentina) added to average selling prices (except for stainless) have contributed to this excellent performance despite a strong increase in raw materials prices.

Consolidated gross operating profit amounted to 1,136 million euros for the fourth quarter compared to 1,464 million for the fourth quarter 2004, reflecting lower volumes and full effect of raw materials cost impact.

Consolidated operating result was 4,376 million euros in 2005 against 3,194 million in 2004 including 198 million of non recurring items.

Consolidated operating profit for the last quarter 2005 was 933 million euros, to be compared with 1,122 million for the equivalent period of 2004.

After net financial charges of 254 million euros, a positive contribution from associates of 317 million, taxes of 161 million and minority interests for 432 million, consolidated net result, group share, was 3,846 million euros, compared to 2,314 million in 2004.

The fiscal charge amounts to 161 million euros, i.e. an effective tax rate of 3.9 percent. The current charge of 396 million euros (360 million for 2004) has been reduced by a deferred tax income of 235 million euros. This has been essentially generated by the capitalization, according to IFRS, of tax losses carried forward, valued on a yearly basis, and following the positive outlook of the Group's business plans.

Net profit, group share for the fourth quarter 2005 was 1,252 million euros compared to 820 million for the fourth quarter of 2004. This profit includes 113 million of financing costs, compared to 196 for 2004, 445 million of tax income compared to a tax expense of 17 million for 2004 and 75 million for minority interests compared to 156 million for 2004.

Key figures of the Group

+-------------------------+------+--------+
|In millions of euros     |2004* |2005*** |
+-------------------------+------+--------+
|Revenues                 |30,176|  32,611|
+-------------------------+------+--------+
|Gross Operating Result   | 4,341|   5,641|
+-------------------------+------+--------+
|Operating Result         | 3,194|   4,376|
+-------------------------+------+--------+
|Net Result, Group share  | 2,314|   3,846|
+-------------------------+------+--------+
|Earnings per Share (in   |4.26**|6.26****|
|euro)                    |      |        |
+-------------------------+------+--------+
*CST consolidated as of October 1st, Acindar consolidated as of May 1s

* *Including 106,629,054 new shares issued on July 27th2004, and excluding treasury shares

***Acesita consolidated as of October 1st, 2005

****Excluding treasury shares

Evolution of net financial debt

Net financial debt was reduced by 1 255 million euros during the fiscal year 2005 (1,257 million euros at December 31st, 2005 against 2,512 million at December 31st, 2004).

Cash generation was strong through working capital requirements management, with a tight control over inventories and despite high cost of raw materials impact. Total capital expenditures amounting to 2 billion euros reflect expansion in Brazil (increase of production of 2.5 million tons at CST) and were kept at an optimized level in Europe (1.1 billion euros).

Net financial debt/shareholders' equity ratio, including minority interests was 0.07 at December 31, 2005 compared to 0.20 at December 31, 2004, thus much lower than 0.35 to 0.50 target over the cycle.

+-------------------------+------+------+
|In millions of euros     | 2004 | 2005 |
+-------------------------+------+------+
|Shareholders' equity*    |12,317|17,633|
+-------------------------+------+------+
|Net financial debt       | 2,512| 1,257|
+-------------------------+------+------+
|Net financial            |  0.20|  0.07|
|debt/Shareholders’ equity|      |      |
+-------------------------+------+------+
* Including minority interests and residual negative goodwill

Flat Carbon Steel

At 18,060 million euros for 2005 compared to 16,139 million for 2004, revenue of the flat carbon steel increased by 3.3 percent on a comparable basis, due to both price increase effect (+12.7% percent) and despite a negative volume effect (-9.4 percent). The decrease in volumes which affected most notably general industry (-1.3 million tons) translated into a positive mix effect.

At 28.1 million tons in 2005 (including 4.4 million tons from CST ) compared to 28.5 million tons in 2004 (Brazil: 1.7 million ton), shipments of flat carbon products have decreased in Europe by 11.4 percent, mostly in the spot related, general industry products, while remaining stable in Brazil.

Revenue of flat carbon steel was 4,520 million euros for the last quarter of 2005, compared to 4,680 million for the same period 2004, reflecting negative effects for spot selling prices and volumes, while total price effect remained positive due to contracts.

Despite this voluntary reduction of shipments adjusting the Group's supply to a negative apparent consumption during the second and third quarter, and despite a sharp increase of costs due to raw materials Gross operating result amounted to 3,634 million euros compared to 2,299 million for 2004. This performance is attributable to higher average selling prices but also to continuous management gains through cost reductions, restructuring implementation and very tight control of metal inventories.

At 609 million euros for the fourth quarter 2005 compared to 908 million for the last quarter 2004, gross operating profit reveals more difficult pricing conditions for spot prices coupled with the full impact of very high raw materials costs as well as seasonal year end effects.

Operating result amounted to 2,773 million euros in 2005 against 1,666 million in 2004.

Operating result was 381 million euros for the fourth quarter 2005 compared to 726 million for the equivalent period of 2004.

Crude steel production amounted to 32.9 million tons in 2005 (CST: 4.9) compared to 31.9 million tons in 2004 (CST: 1.2 million tons as consolidated fully in October 1st, 2004).

Long Carbon Steel

At 6,618 million euros for 2005 compared to 6,221 million for 2004, revenue of the Long Carbon Steel sector increased by 6.4 percent (or 12 percent on a comparable basis) benefiting from a scrap surcharge mechanism, and the strong appreciation of the Brazilian Real On a comparable basis the increase of the turnover is due to price effect (10.7 percent), total volumes remaining stable (1.4 percent).

Total shipments in 2005, amounted to 12.3 million tons compared to 13.4 million tons in 2004. Europe accounted for 7.8 million tons shipments compared to 9.5 million tons in 2004, -17.5% (-7.1 percent on a comparable basis) when Brazil and Argentina shipped 4.5 million tons in 2005 compared to 3.9 million tons in 2004 (eight months of Acindar consolidated as of May 1st 2004).

Revenue for the fourth quarter for long carbon products amounted to 1,674 million euros compared to 1,650 million for the same period in 2004. At comparable scope, revenue increase by 13.9 percent, largely through the appreciation of the Brazilian Real and a positive volume effect partially offset by lower prices in some commodity products (sections, bars and rods).

At 1,371 million euros in 2005 compared to 1,287 million in 2004, gross operating result at comparable scope slightly decreased (-1.5 percent). In Europe the decrease is the net result of negative volume effect partially offset by higher margins over factor costs and management gains. In Americas, operating result strongly increased despite an unfavourable geographical sales mix. At 20.7 percent the gross operating margin of the sector remains stable at historical levels (20.7 percent in 2004).

Gross operating results at 335 million euros for the last quarter 2005 compared to 340 million for the equivalent period of 2004 shows great stability thanks to management gains and improved mix largely offsetting lower selling prices.

Operating result amounted to 1,111 million euros in 2005 compared to 1,078 million in 2004or a 16.8 percent margin compared to 17.3 percent for 2004. Operating result includes 113 million euros of non-recurring items (of which 96 million from the sale of Corrugados in Spain).

For the fourth quarter operating result was 280 million euros, to be compared with 259 million for the fourth quarter 2004.

Crude steel production at 6,7 million tons, compared to 8.5 million tons in 2004, was down 20.7 percent in Europe, while Latin America was up 12 percent with 4.5 million tons produced in 2005 compared to a production of 4.1 million tons for 2004 (eight months of Acindar).

Stainless Steels & Alloys

At 4,028 million euros for 2005 compared to 4,577 million in 2004, revenues for the Stainless Steel & Alloys decreased by -12 percent (-0.4 percent on a comparable basis) due to both a positive price impact of 4.6 percent and a negative mix/volume impact of -5.1 percent). Positive price effect is explained by a strong increase in alloy surcharges during the three first quarters compensating the decline in volumes due to poor demand and base price erosion.

Shipments of 1.6 million tons (Acesita accounts for 171 thousand tons) compared to 1.7 million tons (Acesita not consolidated) decreased by 14.8 percent in Europe.

Revenues for stainless and alloys activities were 1,199 million euros for the fourth quarter 2005 against 1,159 million for the equivalent period of 2004 reflecting positive volume effect while selling prices effect were negative due to significant decrease on base price.

At 173 million euros in 2005 or a 4.3 percent gross margin, compared to 258 million in 2004 or 5.6 percent gross margin, gross operating result reflects negative impact of rising costs due to nickel prices (+15 percent for the 304) and to low production, incurred because of poor demand and high inventories situation. Good management gains and slightly higher prices on a yearly basis did not offset the rising cost situation.

Gross operating results of 8 million euros for the fourth quarter 2005 compared to 98 million for the fourth quarter 2004 translate negative price effects as mentioned added to very high costs due to nickel price evolution. This evolution also takes into account the commissioning of the new steel shop at Carinox (Belgium).

Following the full consolidation of Acesita as at October 1st 2005, the balance sheet of the company was stated at its fair value in accordance with IFRS. As a result, net assets of the company increased by 425 million of euros. The sale of inventories stated at market value in the same context of acquisition had a negative impact of 53 million of euros on the gross operating result of the last quarter 2005.

Operating result was 93 million euros compared to 117 million in 2004, respectively margins of 2.3 and 2.6 percent. Production at Carinox (Belgium) has started during the last quarter, the decommissioning of the steel shop at Isbergues (France) being planned for the summer.

Stainless steel production amounted to 1.7 million tons (Acesita: 190 thousand tons) million tons compared to 1.9 million tons in 2004, a decrease of 16.8 percent in Europe.

Operating result for the last quarter of 2005 was 43 million euros compared to 67 million for the equivalent period of 2004.

Arcelor Steel Solutions and Services

At 8,656 million euros for 2005 compared to 8,267 million for 2004, revenue of the distribution activities increases 4.7 percent (3.4 percent on a comparable basis) due to higher average selling prices and despite a sharp drop in volumes, mainly during the third quarter. Net scope effect due to small disposals and newly consolidated construction units amounted to 109 million euros, as A3S pursues a very active management portfolio.

At 2,211 million euros, revenue for distribution activities for the fourth quarter of 2005 compare with 2,365 million euros for the fourth quarter of 2004. Aside from a scope effect of 133 million the difference lies in negative selling prices and volumes effects. Nevertheless, the last quarter shows improvement compared to the third quarter of 2005 due to improved volumes.

Gross operating result amounted to 328 million euros in 2005 compared to 513 million in 2004, reflecting a squeeze due to increased cost of metal and the air pocket in shipments experienced from the end of second quarter through the fourth quarter. Management gains represent more than 10 percent of gross operating result.

Gross operating result for the last quarter of 2005 was 98 million euros compared to 138 million for the last quarter of 2004. This evolution essentially translates much higher averages costs of metal but sound management gains.

Operating result for the full year 2005 was 254 million euros compared to 395 million in 2004.

For the fourth quarter of 2005, operating result was 96 million euros to be compared with 101 million for the same period last year.

Total volume sold for 2005 amounted to 13.7 million tons million tons compared to 15.0 million tons for 2004. Around 19 percent of total shipments were based on purchases from third parties.

Breakdown of revenue, gross operating result and operating result by sector

+-------------------------+--------+----------------+-----+----------+-----+
|In millions of euros     |  2004  |                |     |          |     |
+-------------------------+--------+----------------+-----+----------+-----+
|                         |Revenues|Gross Op. Result|    %|Op. Result|    %|
+-------------------------+--------+----------------+-----+----------+-----+
|Flat Carbon Steel        |  16,139|           2,299|14.2%|     1,666|10.3%|
+-------------------------+--------+----------------+-----+----------+-----+
|Long Carbon Steel        |   6,221|           1,287|20.7%|     1,078|17.3%|
+-------------------------+--------+----------------+-----+----------+-----+
|Stainless &Alloys        |   4,577|             258| 5.6%|       117| 2.6%|
+-------------------------+--------+----------------+-----+----------+-----+
|Arcelor Steel Solutions  |   8,267|             513| 6.2%|       395| 4.8%|
|and Services             |        |                |     |          |     |
+-------------------------+--------+----------------+-----+----------+-----+
|Others                   |   1,081|             -16| n.a.|       -62| n.a.|
+-------------------------+--------+----------------+-----+----------+-----+
|Intra-Group              |  -6,109|               0| n.a.|         0| n.a.|
+-------------------------+--------+----------------+-----+----------+-----+
|Total                    |  30,176|           4,341|14.4%|     3,194|10.6%|
+-------------------------+--------+----------------+-----+----------+-----+
+-------------------------+-------+----------------+-----+----------+-----+
|In millions of euros     | 2005  |                |     |          |     |
+-------------------------+-------+----------------+-----+----------+-----+
|                         |Revenue|Gross Op. Result|    %|Op. Result|    %|
+-------------------------+-------+----------------+-----+----------+-----+
|Flat Carbon Steel        |  18,06|           3,634|20.1%|     2,773|15.4%|
+-------------------------+-------+----------------+-----+----------+-----+
|Long Carbon Steel        |  6,618|           1,371|20.7%|     1,111|16.8%|
+-------------------------+-------+----------------+-----+----------+-----+
|Stainless &Alloys        |  4,028|             173| 4.3%|        93| 2.3%|
+-------------------------+-------+----------------+-----+----------+-----+
|Arcelor Steel Solutions  |  8,656|             328| 3.8%|       254| 2.9%|
|and Services             |       |                |     |          |     |
+-------------------------+-------+----------------+-----+----------+-----+
|Others                   |  1,961|             132| n.a.|       142| n.a.|
+-------------------------+-------+----------------+-----+----------+-----+
|Intra-Group              | -6,712|               3| n.a.|         3| n.a.|
+-------------------------+-------+----------------+-----+----------+-----+
|Total                    | 32,611|           5,641|17.3%|     4,376|13.4%|
+-------------------------+-------+----------------+-----+----------+-----+
+-------------------------+--------+----------------+-----+----------+-----+
|In millions of euros     |Q4 2004 |                |     |          |     |
+-------------------------+--------+----------------+-----+----------+-----+
|                         |Revenues|Gross Op. Result|    %|Op. Result|    %|
+-------------------------+--------+----------------+-----+----------+-----+
|Flat Carbon Steel        |    4,68|             908|19.4%|       726|15.5%|
+-------------------------+--------+----------------+-----+----------+-----+
|Long Carbon Steel        |    1,65|             340|20.6%|       259|15.7%|
+-------------------------+--------+----------------+-----+----------+-----+
|Stainless &Alloys        |   1,159|              98| 8.5%|        67| 5.8%|
+-------------------------+--------+----------------+-----+----------+-----+
|Arcelor Steel Solutions  |   2,365|             138| 5.8%|       101| 4.3%|
|and Services             |        |                |     |          |     |
+-------------------------+--------+----------------+-----+----------+-----+
|Others                   |     282|             -20| n.a.|       -31| n.a.|
+-------------------------+--------+----------------+-----+----------+-----+
|Intra-Group              |  -1,705|              0 | n.a.|         0| n.a.|
+-------------------------+--------+----------------+-----+----------+-----+
|Total                    |   8,431|           1,464|17.4%|     1,122|13.3%|
+-------------------------+--------+----------------+-----+----------+-----+
+-------------------------+-------+----------------+-----+----------+-----+
|In millions of euros     |Q4 2005|                |     |          |     |
+-------------------------+-------+----------------+-----+----------+-----+
|                         |Revenue|Gross Op. Result|    %|Op. Result|    %|
+-------------------------+-------+----------------+-----+----------+-----+
|Flat Carbon Steel        |   4,52|             609|13.5%|       381| 8.4%|
+-------------------------+-------+----------------+-----+----------+-----+
|Long Carbon Steel        |  1,674|             335|20.0%|       280|16.7%|
+-------------------------+-------+----------------+-----+----------+-----+
|Stainless &Alloys        |  1,199|               8| 0.7%|        43| 3.6%|
+-------------------------+-------+----------------+-----+----------+-----+
|Arcelor Steel Solutions  |  2,211|              98| 4.4%|        96| 4.3%|
|and Services             |       |                |     |          |     |
+-------------------------+-------+----------------+-----+----------+-----+
|Others                   |    470|              84| n.a.|       131| n.a.|
+-------------------------+-------+----------------+-----+----------+-----+
|Intra-Group              | -1,722|               2| n.a.|         2| n.a.|
+-------------------------+-------+----------------+-----+----------+-----+
|Total                    |  8,352|           1,136|13.6%|       933|11.2%|
+-------------------------+-------+----------------+-----+----------+-----+
Sustainable Development

In the area of sustainable development Arcelor strengthened its actions plans in 2005 and made significant progress. The occupational accident frequency rate further decreased from 3.7 in 2004 down to 2.4 accidents with work interruption per million of hours worked in 2005. This evolution confirms the steady improvement that had been initiated since 2002 through a strong implication of the management and an intensive cooperation with the employees representatives.

The Group has pursued the implementation of its environmental policy (at the end of 2005, 97 percent of Arcelor production plans were ISO 14001 certified), while monitoring legal and regulatory evolutions. Arcelor has decreased the total volume of its non-valorized residuals by 25% over the last three years and now scores a 95% valorization rate. Furthermore, 6 out the 33 steel making sites owned by Arcelor can be considered as zero effluents plants.

Arcelor has cut its total CO2 emissions by 18 percent since 1990 in Europe. For the period of 2005-2007 Arcelor has been granted a sufficient quantity of CO2 emission credits under the various national allocation plans in relevant European countries to cover its anticipated steel production level.

To prepare the future and to further reduce the greenhouse gas emissions, Arcelor is coordinating the efforts of 48 corporations and universities in the context of an ambitious research program called ULCOS: Ultra Low CO2 Steelmaking. This project aiming to develop breakthrough technologies is supported by the European Commission.

Respecting multiculturalism is an everyday reality in Arcelor with more than 60 nationalities represented in the Group and its Boards.

In 2005, Arcelor was the first company in the steel industry to sign a Worldwide Agreement on Principles of Corporate Social Responsibility with the International Metalworkers Federation (IMF) and the European Metalworkers Federation (EMF). This joint agreement highlights Arcelor's commitment to apply the same social and environmental highest standards in all its entities.

Arcelor complies with the most stringent standards of Corporate Governance :split between Chairman and CEO functions, non-executive Directors, a high majority being independent, two committees and a high quality financial communication with investors and shareholders. ,

In 2005, Arcelor was once again rewarded for its commitment to sustainable development: the Group joined the DowJones Sustainability Index World (where it is one of the three steelmakers with Dofasco), the FTSE4Good Global & FTSE4Good Europe indices and was the only steelmaker to be listed in the Global 100 Most Sustainable Corporations in the World.

Outlook

In 2005 world steel production has grown by 6 percent, apparent consumption representing more than a billion tons. This growth has been very different by regions: excluding China growth was 1 percent negative due to a strong destocking phase in the US and in Europe (25). China showed 23 percent growth, representing 32 percent of world steel demand.

For 2006 at an expected +7 percent, world growth should be more balanced, with apparent consumption in China increasing by 10 percent due to high inventories while the growth in the rest of the world could reach 5 percent, benefiting from apparent consumption growth which could reach 5 percent in EU 25 and of 7 percent in North America boosted by the rebuilding of inventories after a significant depletion at the end of 2005.

Business prospects

After an excellent year in 2005, 2006 should be a good year for the steel industry and a very good year for Arcelor.

Low inventories offer an environment for price increases and increased prices for long term contracts will ensure good results despite remaining tensions which could remain at high levels.

While pursuing active portfolio management to further reduce the volatility of earnings, Arcelor accelerates its transformation plan by on one hand pursuing its cost cutting and restructuring plans announced at the time of the merger and in 2003 and by expanding both in growth and low cost areas, to both lower its break-even point and expand its leadership in global markets. Arcelor has delivered the 700 million euros per year of merger related synergies one year ahead of plan.

Further gains are expected from the implementation of announced plans for the next years. Arcelor's growth goals have been partially implemented with the consolidation of Arcelor's performance in 2006 should be further strengthened thanks to the consolidation of Dofasco and Acesita as well as through continued cost cutting efforts. The expansion of CST is to deliver a further structural improvement to profitability while continuing external projects which are at different stages of maturity should allow to increase Arcelor's exposure to high-growth markets across the globe.

Active portfolio management including divestments of non core or businesses and the implementation of planned closures will be carried out within the Arcelor tradition of sustainability and social responsibility. These actions will not prevent Arcelor to continue to develop its business, investing organically or through targeted acquisitions, protecting its state of the art industrial tools through sound and adapted capital expenditure while progressing on the upper end of added value markets and products in conjunction with sophisticated partnerships, more notably in R&D.

The Arcelor Board of Directors has unanimously rejected the hostile bid of Mittal Steel on January 29, 2006, and mandated the Group Management Board to evaluate all options that are in the best interest of the shareholders and all other stakeholders. Notably this offer strongly undervalues Arcelor which has brilliant development and value perspectives.

Arcelor is the number one steel company in the world with a turnover of 32.6 billion euros in 2005. The company holds leadership positions in its main markets: automotive, construction, household appliances and packaging as well as general industry. The company - number one steel producer in Europe and Latin America - ambitions to further expand internationally in order to capture the growth potential of developing economies and offer technologically advanced steel solutions to its global customers. Arcelor employs 96,000 associates in over 60 countries. The company places its commitment to sustainable development at the heart of its strategy and ambitions to be a benchmark for economic performance, labour relations and social responsibility.

This press release contains certain forward looking statements regarding anticipated market evolution and the future prospects of Arcelor. While these statements are based on the Company's best estimations as of the date hereof, actual results will vary as a function of market conditions, the action of competitors, consumer demand, steel prices, economic conditions and other factors. "

Arcelor prepares its consolidated financial information under International Financial Reporting Standards (" IFRS ") since 2002. Revised IFRS standards have been applicable as from 2005 as a part of the deadline fixed by the European Union to have all listed entities reporting under IFRS. Those changes have had no material impact on the Group 2005 consolidated financial position.

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