презентация для инвесторов, ноябрь декабрь 2011

Corporate PresentationCorporate PresentationCorporate PresentationCorporate Presentation

November-December 2011

1

This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or

acquire securities of EVRAZ plc (“EVRAZ”) or any of its subsidiaries in any jurisdiction (including, without limitation, EVRAZ Group S.A.) (collectively,

the “Group”) or an inducement to enter into investment activity. No part of this document, nor the fact of its distribution, should form the basis of,

or be relied on in connection with, any contract or commitment or investment decision whatsoever. No representation, warranty or undertaking,

express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or

the opinions contained herein. None of EVRAZ or any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence

or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with the document.

This document contains “forward-looking statements”, which include all statements other than statements of historical facts, including, without

limitation, any statements preceded by, followed by or that include the words “targets”, “believes”, “expects”, “aims”, “intends”, “will”, “may”,

“anticipates”, “would”, “could” or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks,

uncertainties and other important factors beyond EVRAZ’s control that could cause the actual results, performance or achievements of EVRAZ to

be materially different from future results, performance or achievements expressed or implied by such forward-looking, including, among others,

the achievement of anticipated levels of profitability, growth, cost and synergy of recent acquisitions, the impact of competitive pricing, the ability

to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment,

DisclaimerDisclaimerDisclaimerDisclaimer

to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment,

volatility in stock markets or in the price of the Group’s shares or GDRs, financial risk management and the impact of general business and global

economic conditions.

Such forward-looking statements are based on numerous assumptions regarding EVRAZ’s present and future business strategies and the

environment in which the Group will operate in the future. By their nature, forward-looking statements involve risks and uncertainties because they

relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speak only as at the

date as of which they are made, and EVRAZ expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any

forward-looking statements contained herein to reflect any change in EVRAZ’s expectations with regard thereto or any change in events, conditions

or circumstances on which any such statements are based.

Neither EVRAZ, nor any of its agents, employees or advisors intends or has any duty or obligation to supplement, amend, update or revise any of

the forward-looking statements contained in this document.

The information contained in this document is provided as at the date of this document and is subject to change without notice.

EVRAZ in BriefEVRAZ in BriefEVRAZ in BriefEVRAZ in Brief

◦ One of the largest vertically integrated steel and mining companies in the world

◦ Leader in the Russian and CIS construction and railway products markets

◦ A lead player in the European and North American plate and large diameter pipe markets

◦ One of the world’s lowest cost steel producers due to production efficiency and high level of vertical integration

2

level of vertical integration

◦ One of the leading producers in the global vanadium market

◦ In 2010, EVRAZ produced 16.3 million tonnes of crude steel and sold 15.5 million tonnes of steel rolled products

◦ 2010 consolidated revenue amounted to US$13.4 billion; EBITDA was US$2.4 billion

◦ GDRs listed on London Stock Exchange since June 2005, shares listed in the Premium segment of the LSE since 7 November 2011

◦ #15 steel producer by volume globally and #1 in Russia

◦ Low cost operations driven by vertically integrated business model

◦ Exposure to growing construction and infrastructure markets globally

◦ Strong position in growing Russian market

InvestmentInvestmentInvestmentInvestment HighlightsHighlightsHighlightsHighlights3

◦ Strong position in growing Russian market

◦ Successful track record of strategic acquisitions

◦ Multiple opportunities to drive growth

◦ Focus on HSE

North AmericaNorth AmericaNorth AmericaNorth America

EuropeEuropeEuropeEurope

Russia/CISRussia/CISRussia/CISRussia/CIS

6,4206,4206,4206,420402402402402

4,2084,2084,2084,208

1,0541,0541,0541,0542,6072,6072,6072,607

Global Operating ModelGlobal Operating ModelGlobal Operating ModelGlobal Operating Model

240240240240

400400400400 590590590590

4

South AmericaSouth AmericaSouth AmericaSouth America AfricaAfricaAfricaAfrica

AsiaAsiaAsiaAsia

410410410410

110110110110

110110110110

Sea Ports

Vanadium

Coal Mining

Iron Ore Mining

Steel Mills

Mezhegey Coal Mill in Development

Third Party Steel Products Sales (Kt), 2010#### Internal Supply of Slabs and Billets from Russian Steel Mills (Kt)####

Russia &

CIS

42%

Africa

3%

Asia

29%

North

America

17%

Europe

9%

2010 Steel Sales Volume2010 Steel Sales Volume2010 Steel Sales Volume2010 Steel Sales Volume

by Geographyby Geographyby Geographyby Geography

Tubular

6%

Other

4%

Semi-

finished

29%

Flat-

rolled

17%

Railway

12%

Construction

32%

2010 Steel Sales Volume2010 Steel Sales Volume2010 Steel Sales Volume2010 Steel Sales Volume

by Productby Productby Productby Product

5

Cost LeadershipCost LeadershipCost LeadershipCost Leadership

◦ Increased costs in 1H 2011 reflected mostly growth in raw materials prices

◦ High level of vertical integration into iron ore and coking coal helped to partially mitigate negative impact of escalating prices

◦ Approx. 60% of consolidated operating costs are rouble denominated

◦ EVRAZ enjoys a position on the global cost curve well within the first quartile

294

349371 355

200179

216

271 280

333356 369

395

438401

354

441 459

364

246 256 265

317298

350378

411437 446479

100

200

300

400

500

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11

Slab Billet

Cash Cost*, Slabs & BilletsCash Cost*, Slabs & BilletsCash Cost*, Slabs & BilletsCash Cost*, Slabs & BilletsUS$/t

*Average for Russian steel mills, integrated cash cost of production, EXW

Source: World Steel Dynamics

Consolidated Cost of Revenues by Cost ElementsConsolidated Cost of Revenues by Cost ElementsConsolidated Cost of Revenues by Cost ElementsConsolidated Cost of Revenues by Cost Elements

1H 2011, 1H 2011, 1H 2011, 1H 2011, % % % %

of of of of total total total total CoRCoRCoRCoR

1H 2010, 1H 2010, 1H 2010, 1H 2010, % % % %

of of of of total total total total CoRCoRCoRCoR

Raw materials, including 39% 37%

Iron ore 7% 6%

Coking coal 12% 11%

Scrap 14% 13%

Other raw materials 6% 7%

Semi-finished products 7% 4%

Transportation 5% 6%

Staff costs 12% 12%

Depreciation 7% 8%

Electricity 5% 5%

Natural gas 4% 4%

Other costs 21% 24%

Sep’11 Average Steel Slab Cash Cost by Region (EXW)Sep’11 Average Steel Slab Cash Cost by Region (EXW)Sep’11 Average Steel Slab Cash Cost by Region (EXW)Sep’11 Average Steel Slab Cash Cost by Region (EXW)

Cash Cost ($/metric tonne)

0

120

240

360

480

600

720World Average: 597

Cumulative Capacity

Mid

. E

ast

Mexi

co

Russia

&

CIS

India

Bra

zil

Canada

US

A

E. E

uro

pe

Austr

alia

South

Kore

a

Asia

W. E

uro

pe

(3)

Japan

S.A

merica

Afr

ica

Chin

a

*Average for Russian steel mills, integrated cash cost of production, EXW

6.27.9

8.6

0

5

10

15

2009 2010 2011(f)

Construction Steel Consumption in RussiaConstruction Steel Consumption in RussiaConstruction Steel Consumption in RussiaConstruction Steel Consumption in Russia

MMt

◦ EVRAZ is the leading producer of long products in

Russia

◦ Market share of 86% in H-beams, 66% in

channels, 89% in rails and 36% in wheels as of

H1 2011

◦ Russian construction steel demand expected to reach

pre-crisis levels in 2012

◦ Expected robust growth in the railway steel market

◦ We expect construction steel demand to reach

approximately 11 MMt in 2015

Exposure to Growth in Construction and Exposure to Growth in Construction and Exposure to Growth in Construction and Exposure to Growth in Construction and

InfrastructureInfrastructureInfrastructureInfrastructure

6

32

26

13

0

20

40

2009 2010 2011(f)

Consumption of Construction Steel in Russia

Russian Government Capital InvestmentsRussian Government Capital InvestmentsRussian Government Capital InvestmentsRussian Government Capital Investments

US$ bn

(1) RUB 895 bn

approximately 11 MMt in 2015

◦ Over US$30 bn of capital investments by the Russian

Government planned for 2011

◦ Key programs include construction related to the Sochi

2014 Winter Olympics, infrastructure development for

the APEC 2012 summit in Vladivostok, Skolkovo

innovation centre

◦ Russia committed to invest over $US50 bn in

preparation for the 2018 FIFA World Cup (estimated

steel requirement of 2.0-2.5 MMt)

◦ Russian Railways approved investment programme for

2011-2013 of $US18.4 bn

(1)

Source: Russian Government, press

Move to Premium ListingMove to Premium ListingMove to Premium ListingMove to Premium Listing

EVRAZ’s redomiciliation to the UK from Luxembourg and a premium share listing and admission to trading on the

Main Market of the LSE since 7 November 2011

◦ Transaction effected by way of a Share Exchange Offering (the “SEO”) by EVRAZ plc (UK entity) for the shares,

including the shares represented by GDRs, of Evraz Group S.A. (Luxembourg entity) with 9 new shares for each

Existing Share tendered and 3 new shares for each Existing GDR tendered (1)

◦ Existing GDR listing and trading will be cancelled following termination on 8 February 2011 of the deposit

agreement with The Bank of New York Mellon

◦ No change to the Company’s business operations, assets or strategy as a result of the SEO

7

(1) Three GDRs represents one Existing Share

◦ Expected benefits of the premium listing :

◦ Broader shareholder base

◦ Improvement in long-term access to capital

◦ Improved liquidity

◦ Expected FTSE 100 inclusion and the only steel stock in UK FTSE All-Share index (following FTSE Committee Quarterly Review on 7 December 2011)

◦ Committed to high standards of corporate governance

646 609730

3Q 2010 2Q 2011 3Q 2011

1,2291,299 1,351

3Q 2010 2Q 2011 3Q 2011

448 550 517

3Q 2010 2Q 2011 3Q 2011

Steel ProductsSteel ProductsSteel ProductsSteel Products(1)(1)(1)(1)

kt

SemiSemiSemiSemi----Finished ProductsFinished ProductsFinished ProductsFinished Productskt

Construction ProductsConstruction ProductsConstruction ProductsConstruction Productskt

Flat Rolled ProductsFlat Rolled ProductsFlat Rolled ProductsFlat Rolled Productskt

Railway ProductsRailway ProductsRailway ProductsRailway Productskt

3,5373,780 3,670

3Q 2010 2Q 2011 3Q 2011

805780 767

3Q 2010 2Q 2011 3Q 2011

3Q 2011 Production Volumes3Q 2011 Production Volumes3Q 2011 Production Volumes3Q 2011 Production Volumes8

Railway

Construction

Semi-Finished

Flat Rolled Products

Other

Iron OreIron OreIron OreIron Orekt

CoalCoalCoalCoalkt

VanadiumVanadiumVanadiumVanadiumkt

(1) Net of re-rolled volumes

(2) Calculated as 40% of total Raspadskaya production

4,9815,396 5,435

3Q 2010 2Q 2011 3Q 2011

3,032 3,197

2,611

3Q 2010 2Q 2011 3Q 2011

Coking Coal

Steam Coal Raspadskaya

8,696

10,490 10,108

3Q 2010 2Q 2011 3Q 2011

Vanadium in Slag

Vanadium in Final Products

(2)

9

Trading Update for 3Q and 9M 2011Trading Update for 3Q and 9M 2011Trading Update for 3Q and 9M 2011Trading Update for 3Q and 9M 2011

(US$ million) 3Q 2011 9M 2011 9M 20109M 2011/9M 2010,

change, %

Revenue 4,157 12,537 9,729 28.9%

EBITDA 772 2,401 1,766 36.0%

Interest expense 164 551 547 0.7%

CAPEX 483 945 584 61.8%

Steel product sales * 3,390 10,094 7,862 28.4%Steel product sales * 3,390 10,094 7,862 28.4%

Iron ore product sales * 134 488 230 112.2%

Coal product sales * 102 308 263 17.1%

Vanadium product sales * 160 462 393 17.6%

Other revenues * 371 1,185 981 20.8%

As of 30 Sep As of 30 Sep As of 30 Sep As of 30 Sep

2011201120112011

As of 31 Dec As of 31 Dec As of 31 Dec As of 31 Dec

2010201020102010

Change, %Change, %Change, %Change, %

Total debt 7,214 7,811 -7.6%

Cash and cash equivalents 578 683 -15.4%

* External sales

◦ We are observing resilient demand across major

product groups in our markets

◦ Current steelmaking capacity utilisation:

◦ Russia – 100%

◦ Ukraine – 70%

◦ Czech Republic – 70%

◦ North America –100%

◦ South Africa – 100%

EVRAZ Selling PricesEVRAZ Selling PricesEVRAZ Selling PricesEVRAZ Selling Prices

US$/t

400

600

800

1,000

1,200

Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11

Recent Market Developments UpdateRecent Market Developments UpdateRecent Market Developments UpdateRecent Market Developments Update

Slabs, Russia, export (1)

Billets, Russia, export (1)Rebars, Russia, FCA

Plate, North America, FCA

10

◦ South Africa – 100%

◦ We continue to enjoy vertical integration model

advantages which mitigate the effects of raw

materials prices volatility

◦ Global steel inventories significantly below mid-2008

levels decreasing to 2.5 months in August, a level

slightly below the 5-year average

◦ EVRAZ order book (external sales) currently stands at

approx. US$300 mln representing 2.5 months’

production

Raw Material Prices (Domestic Markets)Raw Material Prices (Domestic Markets)Raw Material Prices (Domestic Markets)Raw Material Prices (Domestic Markets)Raw Material Prices (Domestic Markets)Raw Material Prices (Domestic Markets)Raw Material Prices (Domestic Markets)Raw Material Prices (Domestic Markets)

Source: Company data

Source: Metall Expert

(1) Weighted average contract prices

0

100

200

300

400

500

Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11

US$/t

Scrap, Russia, CPT

Scrap, USA, CPTIron ore concentrate, Russia, ExW

Coking coal concentrate, Russia, FCA

11

Growth ProjectsGrowth ProjectsGrowth ProjectsGrowth Projects

Projects in ProgressProjects in ProgressProjects in ProgressProjects in Progress

◦ Construction of Yerunakovskaya VIII mine, 2 mtpa of coking coal

◦ Exploration of Sobstvenno-Kachkanarskoye iron ore deposit to increase KGOK production to 55 mtpa

◦ Construction of Yuzhny and Kostanay rolling mills in regions where demand is growing (South Russia and Kazakhstan): total 900,000 tpa of construction products

Projects in Final Stage of CompletionProjects in Final Stage of CompletionProjects in Final Stage of CompletionProjects in Final Stage of Completion

◦ Rail mill modernisation enabling production of high value-added products

◦ PCI installation at Russian steel mills

Projects under ConsiderationProjects under ConsiderationProjects under ConsiderationProjects under Consideration

◦ Mezhegey coking coal deposit development

◦ Joint venture with Alrosa to develop Timir iron ore deposit in Yakutia

◦ Construction of 2nd converter shop at EVRAZ NTMK: steel capacity increase of 1-1.5 mtpa

800

1,000

1,200

12

CAPEX DynamicsCAPEX DynamicsCAPEX DynamicsCAPEX Dynamics

1,1031,1031,1031,103

832832832832

◦ Return to investment in modernisation projects and mine development in 2010

◦ FY 2011 budgeted CAPEX of US$1.2 billion

◦ CAPEX over the next several years expected at the level of 2011

US$ mln

-

200

400

600

800

2008 2009 2010 1H 2011

Maintenance, Steel and other operations Coal mine development **

Iron ore mine development Investment projects*

441441441441462462462462

* In 2010 includes US$70 million acquisition of Mezhegey and Mezhegey East licences

** Investment into maintaining and developing mining volumes, such as preparation of coal seams

2011 Budget 2011 Budget 2011 Budget 2011 Budget

CAPEXCAPEXCAPEXCAPEX

Iron ore & coalIron ore & coalIron ore & coalIron ore & coal

ProjectProjectProjectProject

Total CAPEXTotal CAPEXTotal CAPEXTotal CAPEX

$$$$US US US US mmmmlnlnlnln

Cum CAPEX by 30.06. Cum CAPEX by 30.06. Cum CAPEX by 30.06. Cum CAPEX by 30.06.

2011201120112011

$$$$USUSUSUS mlnmlnmlnmln

2011 Planned CAPEX2011 Planned CAPEX2011 Planned CAPEX2011 Planned CAPEX

$$$$USUSUSUS mlnmlnmlnmln (1)(1)(1)(1) Project TargetsProject TargetsProject TargetsProject Targets

Expansion of Kachkanar Mine

� Capacity of 950k tonnes of high-speed rails, including 450k

tonnes of 100 metre rails

� On-stream by 2013

� Production of higher-quality rails

� 550k tonnes capacity


80 19 54

TBD 71 (2) 16

Update on Key Investment ProjectsUpdate on Key Investment ProjectsUpdate on Key Investment ProjectsUpdate on Key Investment Projects13

SteelSteelSteelSteel

Iron ore & coalIron ore & coalIron ore & coalIron ore & coal

Yerunakovskava Mine Construction 590 4 52� Coal production of 2 mtpa

� On-stream by mid-2013





2011201120112011




� Iron ore production to be increased to 55 mtpa


Development of Mezhegey and Eastern Field Coal

Deposits (Tyva, Russia)

� Maintaining self-sufficiency in high-quality hard coking coal

after depletion of existing deposits

� On-stream by 2015 and 2021 respectively





2011201120112011




(1) Total 2011 planned capex is ca. $US1.2 bn

(2) Acquisition of Mezhegey and Mezhegey East licences

SteelSteelSteelSteel

Construction of Yuzhny and Kostanay

Rolling Mills

� Capacity: 450 ktpa of construction products each mill

� On-stream by mid-2013

Reconstruction of Rail Mill at United ZSMK

(Former NKMK)

� Capacity of 950k tonnes of high-speed rails, including 450k

tonnes of 100 metre rails


Reconstruction of Rail Mill at NTMK

� Production of higher-quality rails

� 550k tonnes capacity


Pulverised Coal Injection (PCI)

at NTMK and ZSMK

� 20% lower coke consumption

� Save annually up to 650 mcm of natural gas at NTMK and up

to 600 mcm at ZSMK

� On-stream by end-2012

Reconstruction of Mechanical Area at

NTMK Wheel & Tyre Mill

� Production of higher-quality wheels


260 12 73

485 259 146

60 46 14

320 88 182

40 21 19

14

OutlookOutlookOutlookOutlook

Global economy and the steel industry continue to face challenges and remain very volatile

EVRAZ retains a strong order book and high capacity utilisation

Inventories at traders and at our mills and ports are very low

4Q 2011 trading is being impacted by the seasonal change in the product mix in favour of lower-margin 4Q 2011 trading is being impacted by the seasonal change in the product mix in favour of lower-margin

semi-finished products and slightly lower prices for main product groups due to volatile global economic

environment

EVRAZ continuously assesses the market environment and has significant flexibility in CAPEX plans

4Q 2011 EBITDA is expected to be in the range of US$500-600 million

15

SummarySummarySummarySummary

Strong 1H 2011 results reflecting the recovery of steel and raw material markets

Obtaining benefits from enhanced raw material prices due to the Group’s high level of vertical

integration

Improved liquidity position and reduced debt level following continuous refinancing in 1H2011

Renewed investment into enhancing the mining base, production modernisation and product quality will

enable to achieve positive results in 2012 and beyond enable to achieve positive results in 2012 and beyond

No significant deterioration of the market at the moment

The premium share listing in London and potential FTSE 100 inclusion to improve liquidity and

shareholder base

Company now on sound footing to achieve further growth and is well prepared to efficiently operate

even in the prolonged period of market uncertainty

1H 2011 Operating and Financial Results Overview

17

Revenue 8,380 6,379 31313131%%%%

Gross profit 2,197 1,460 50505050%%%%

1,154 41414141%%%%Consolidated adjusted EBITDA* 1,629

Adjusted EBITDA margin 19.4% 18.1%

0.42EPS (US$ per GDR) 0.62

1H 20111H 20111H 20111H 2011 1H 20101H 20101H 20101H 2010US$ mln unless otherwise stated ChangeChangeChangeChange

1H 2011 Summary1H 2011 Summary1H 2011 Summary1H 2011 Summary

176Net Profit** 263 49494949%%%%

48484848%%%%

* Consolidated adjusted EBITDA represents profit from operations plus depreciation and amortisation, impairment of assets, foreign exchange loss (gain) and loss (gain) on disposal of

PP&E. See appendix on p.30 for reconciliation of profit (loss) from operations to Adjusted EBITDA

** Net profit in 1H 2011 was negatively affected by one-off items. Without one-off losses of US$231 million relating to the conversion and early repurchase of debts the 1H 2011 net profit would have been US$494 million

*** Here and throughout the presentation steel sales volumes to external customers only if not stated otherwise

0.42EPS (US$ per GDR) 0.62

Steel sales volumes*** (’000 tonnes) 7,946 7,714 3333%%%%

48484848%%%%

Interim Dividend (US$ per GDR)

Short-term Debt 604

Net Debt 6,042 7,127

714

(15)%

(15)%

0.2 0

As of As of As of As of

30 June 201130 June 201130 June 201130 June 2011

As of As of As of As of

31 Dec 201031 Dec 201031 Dec 201031 Dec 2010 ChangeChangeChangeChange

18

1H 2011 Financial Highlights1H 2011 Financial Highlights1H 2011 Financial Highlights1H 2011 Financial Highlights

Consolidated Revenue byConsolidated Revenue byConsolidated Revenue byConsolidated Revenue by SegmentSegmentSegmentSegment Consolidated AdjustedConsolidated AdjustedConsolidated AdjustedConsolidated Adjusted EBITDAEBITDAEBITDAEBITDA

◦ Significant growth in revenues and EBITDA in 1H 2011 vs. 1H 2010 as a result of market recovery

◦ Revenue growth was driven primarily by prices increases as EVRAZ operated at high capacity utilisation levels in 1H

2011

◦ EVRAZ benefits from high level of vertical integration

◦ Major share of revenues coming from Steel segment, while more than half of EBITDA generated in Mining segment

803 744

390

96255

(3)

83

62

(157)(156)

-300

0

300

600

900

1,200

1,500

1,800

1H 2010 1H 2011

Steel Mining Vanadium Other operations Unallocated & Eliminations

5,7967,492

1,120

2,040

290

320

414

482

(1,241) (1,954)

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

1H 2010 1H 2011

Steel Mining Vanadium Other operations Eliminations

Consolidated Revenue byConsolidated Revenue byConsolidated Revenue byConsolidated Revenue by SegmentSegmentSegmentSegment

US$ mln

Consolidated AdjustedConsolidated AdjustedConsolidated AdjustedConsolidated Adjusted EBITDAEBITDAEBITDAEBITDA

6,3796,3796,3796,379

8,3808,3808,3808,380

1,1541,1541,1541,154

1,6291,6291,6291,629

US$ mln

19

FCF GenerationFCF GenerationFCF GenerationFCF Generation

◦ Substantial free cash flow generation in 1H 2011

◦ Release of working capital in spite of higher level of activity and higher prices

◦ Major uses of FCF in 1H2011 were: US$402 million increase in cash, US$275 million net repayment of loan

principals, US$51 million purchase of non-controlling interests (Evraztrans)

US$ mln

1,6701,629 41

(210)

1,594

134

1400

1600

1800

2000

*Free cash flow comprises cash flows from operating activities less interest paid, costs of early repurchase of debts and cash flows from

investing activities

(386)

(462)

5 751

0

200

400

600

800

1000

1200

EBITDA 1H

2011

Non-cash

items

EBITDA (excl.

non-cash

items)

Changes in

working

capital, excl

income tax

Income tax

paid

CF from

operating

activities

Interest paid

and costs of

early

repurchase of

debts

Capex CF from

investing

activities

(excl. capex)

Free cash

flow*

20

◦ On 10 October 2011 the EVRAZ Board approved a new dividend policy and the payment of interim and special

dividends for 1H 2011

◦ First dividend payment since 2008

◦ The Company believes that the new policy and dividend payment creates a balanced approach towards return on

shareholder equity whilst retaining sufficient capital for the Group’s investment growth

Dividend PolicyDividend PolicyDividend PolicyDividend Policy

◦ Under the revised dividend policy EVRAZ will target to maintain a long-term average dividend payout ratio of at least 25 % of the consolidated net profit calculated in accordance with IFRS and adjusted for non-recurring items, for the relevant period. Dividends are expected to be paid semi-annually

Revised Dividend Revised Dividend Revised Dividend Revised Dividend

PolicyPolicyPolicyPolicy

Dividends are expected to be paid semi-annually

◦ In addition to the regular dividend payments the Company may also employ special

dividends from time to time at the discretion of the EVRAZ Board to return surplus capital

to shareholders

◦ Interim dividend: US$0.2 per GDR

◦ Special dividend: US$0.9 per GDR

◦ Record date: 28 October 2011

◦ Paid in November 2011

Key Parameters of Key Parameters of Key Parameters of Key Parameters of

Dividend Dividend Dividend Dividend

AnnouncementAnnouncementAnnouncementAnnouncement

21

Liquidity and Debt Maturity ProfileLiquidity and Debt Maturity ProfileLiquidity and Debt Maturity ProfileLiquidity and Debt Maturity Profile

◦ Refinancing steps significantly strengthened the Group’s liquidity profile:

◦ In April 2011, EVRAZ issued US$850m bonds due 2018 at 6.75%, the lowest ever coupon for EVRAZ Eurobond

issues

◦ Part of the proceeds from the issue was used to purchase approx. US$622m in aggregate principal amount of

the outstanding bonds due 2013

◦ In June 2011, Evraz issued a 20 billion 5-year rouble bond (approx. US$715m) at 8.40%, and incentivised

conversion of US$648 million in principal amount of convertible bonds due 2014

◦ In October 2011, the 5-year US$500 million unsecured credit facility with Gazprombank was used to prepay the

existing US$300 million secured loan

◦ EVRAZ’s total debt was US$7.2 billion as of 30 June 2011, including US$4.9 billion of public debt and US$2.3

billion of bank loans

Debt* Maturities Schedule (as of 30 June 2011)Debt* Maturities Schedule (as of 30 June 2011)Debt* Maturities Schedule (as of 30 June 2011)Debt* Maturities Schedule (as of 30 June 2011)Debt* Maturities Schedule (as of 30 June 2011)Debt* Maturities Schedule (as of 30 June 2011)Debt* Maturities Schedule (as of 30 June 2011)Debt* Maturities Schedule (as of 30 June 2011)

* Principal debt (excl. interest payments)

US$ mln

billion of bank loans

◦ EVRAZ had unutilised credit facilities of approx. US$1.4 billion, incl. US$788 million of committed facilities, as of 30

June 2011, compared with US$923 million and US$430 million respectively as of 30 June 2010.

◦ Targeting net debt/EBITDA ratio below 2.5x

0

500

1000

1500

2000

2011 2012 2013 2014 2015 2016 2017 2018 2019-2022

Public debt Bank loans

22

Improved Business FundamentalsImproved Business FundamentalsImproved Business FundamentalsImproved Business Fundamentals

31 December

2009

30 June

2011

Net Debt US$7,230m US$6,042m

Leverage (Net Debt/LTM

EBITDA)5.8x 2.1x

Average Maturity 3.4 years 3.8 years

Short-term Debt US$1,992m US$604m

◦ EBITDA and EBITDA margin progression

◦ Focus on financial management

◦ Reduction of total debt level

◦ Significant improvement of leverage

◦ Successful refinancing of short-term debt using debt

instruments with longer term maturities

◦ EVRAZ credit ratings upgraded: S&P to B+, Stable;

Moody’s to B1, Positive; Fitch to BB-, Stable

1,6291,1961,154

769468

19%17%18%

15%

10%

0

500

1,000

1,500

2,000

1H2009 2H2009 1H2010 2H2010 1H2011

0%

5%

10%

15%

20%

EBITDA and EBITDA Margin PerformanceEBITDA and EBITDA Margin PerformanceEBITDA and EBITDA Margin PerformanceEBITDA and EBITDA Margin Performance

US$ MM

EBITDA EBITDA Margin (RHS)

%

23

2011 vs 20082011 vs 20082011 vs 20082011 vs 2008----2009200920092009

End 2008-beginning 2009 30 September 2011

Very few forward sales on export contracts Export contracts are sold 2.5 months in advance

No new orders Normal flow of orders

Up to 5 months of stocks at traders Low stocks

Risk of non-payments No sales on credit – risk of bad debts is minimal

Some production is inefficient Inefficient production lines are closed

Low capacities utilisation Nearly 100% capacities utilisation

Short-term debt of almost US$4 billion Short-term debt of US$604 million as of 30 June 2011

(US$300 million to be paid till 2011 year-end as of 30

September 2011)

10.00

15.00

20.00

25.00

30.00

35.00

40.00

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

2008 2009 2010 2011

USD/RUB Exchange RatesUSD/RUB Exchange RatesUSD/RUB Exchange RatesUSD/RUB Exchange RatesUSD/RUB Exchange RatesUSD/RUB Exchange RatesUSD/RUB Exchange RatesUSD/RUB Exchange Rates

24

53%68%

47%32%

0

1,000

2,000

3,000

4,000

5,000

6,000

1H 2010 1H 2011

Domestic Export

Steel: CISSteel: CISSteel: CISSteel: CIS

5,5325,5325,5325,532 5,5415,5415,5415,541

Steel Product Sales, Domestic vs. ExportSteel Product Sales, Domestic vs. ExportSteel Product Sales, Domestic vs. ExportSteel Product Sales, Domestic vs. Export

‘000 tonnes◦ Full utilisation of Russian and Ukrainian steelmaking

capacities maintained in 2011

◦ In 1H 2011 domestic steel sales accounted for 68% of

EVRAZ’s Russian and Ukrainian mills’ steel sales

compared to 53% in 1H 2010, reflecting improving

demand in the CIS market and the shift to sales of higher

margin products

◦ High market share in domestic sales through own

distribution network

◦ Prices of key products strengthened in response to

demand recovery and growth in raw material prices

2,260 1,838

2,1002,378

785 813

387 512

0

1,000

2,000

3,000

4,000

5,000

6,000

1H 2010 1H 2011

Semi-finished Construction Railway Other

Steel Product RevenuesSteel Product RevenuesSteel Product RevenuesSteel Product RevenuesSteel Product Sales VolumesSteel Product Sales VolumesSteel Product Sales VolumesSteel Product Sales Volumes

5,5325,5325,5325,532 5,5415,5415,5415,541

‘000 tonnes

ProductsProductsProductsProductsRevenue,Revenue,Revenue,Revenue,

US$mUS$mUS$mUS$m

Revenue per tonne,Revenue per tonne,Revenue per tonne,Revenue per tonne,

US$US$US$US$

1H 20101H 20101H 20101H 2010 1H 20111H 20111H 20111H 2011 1H 20101H 20101H 20101H 2010 1H 20111H 20111H 20111H 2011

Semi-finished 1,112 1,1591,1591,1591,159 492 630630630630

Construction 1,275 1,8331,8331,8331,833 607 771771771771

Railway 541 734734734734 689 903903903903

Other steel 247 422422422422 638 824824824824

TotalTotalTotalTotal 3,175 4,1484,1484,1484,148 574 749749749749

demand recovery and growth in raw material prices

25

Steel: North AmericaSteel: North AmericaSteel: North AmericaSteel: North America

◦ Gradual recovery in demand

◦ Sales volumes of steel products increased by 4% in 1H 2011 vs. 1H 2010

◦ Flat-rolled steel volumes increased by 11%; railway products by 34%

◦ Average prices of all product categories increased with the largest increase in flat-rolled products (+US$266/t)

◦ Pricing of steel products generally follows scrap price trends

197 165

181 242

462511

436403

0

200

400

600

800

1,000

1,200

1,400

1H 2010 1H 2011

Construction & other steel Railway Flat-rolled Tubular

1,2761,2761,2761,276 1,3211,3211,3211,321 ProductsProductsProductsProductsRevenue,Revenue,Revenue,Revenue,

US$mUS$mUS$mUS$m


US$US$US$US$


Construction

and other 154 153153153153 782 927927927927

Railway 172 249249249249 950 1,0291,0291,0291,029

Flat-rolled 400 578578578578 866 1,1311,1311,1311,131

Tubular 601 589589589589 1,378 1,41,41,41,461616161

TotalTotalTotalTotal 1,327 1,5691,5691,5691,569 1,040 1,1,1,1,188188188188

Steel Product RevenuesSteel Product RevenuesSteel Product RevenuesSteel Product RevenuesSteel Product Sales VolumesSteel Product Sales VolumesSteel Product Sales VolumesSteel Product Sales Volumes

‘000 tonnes

26

511631

92

109

0

100

200

300

400

500

600

700

800

1H 2010 1H 2011

Steel: Europe, South AfricaSteel: Europe, South AfricaSteel: Europe, South AfricaSteel: Europe, South Africa

‘000 tonnes

603603603603

740740740740

Steel Product Sales Volumes, Steel Product Sales Volumes, Steel Product Sales Volumes, Steel Product Sales Volumes,

European OperationsEuropean OperationsEuropean OperationsEuropean Operations◦ EVRAZ’s European mills sales volumes increased by

23% in 1H 2011 vs. 1H 2010

◦ European flat-rolled product sales volumes increased

by 23%, which largely reflected the increased

demand picture in the European market

◦ Sales of EVRAZ Highveld’s steel products were

effectively flat as domestic demand in the South

African market remained weak

Flat-rolled Other

97 108

183

52

195

10

-

50

100

150

200

250

300

350

400

1H 2010 1H 2011

Construction Flat-rolled Other

‘000 tonnes

302302302302

343343343343

ProductsProductsProductsProductsRevenue,Revenue,Revenue,Revenue,

US$mUS$mUS$mUS$m


US$US$US$US$


European European European European OOOOperationsperationsperationsperations

Flat-rolled 345 598598598598 675 948948948948

Other 74 104104104104 804 954954954954

TotalTotalTotalTotal 419 702702702702 695 949949949949

South African South African South African South African OOOOperationsperationsperationsperations

Construction 70 89898989 721 824824824824

Flat-rolled 138 159159159159 708 869869869869

Other 7 36363636 700 692692692692

TotalTotalTotalTotal 215 284284284284 712 828828828828

Steel Product Sales Volumes, Steel Product Sales Volumes, Steel Product Sales Volumes, Steel Product Sales Volumes,

South African OperationsSouth African OperationsSouth African OperationsSouth African Operations

Steel Product RevenuesSteel Product RevenuesSteel Product RevenuesSteel Product Revenues

◦ As of 1H 2011 EVRAZ was 99% self-sufficient in iron ore and

62% in coking coal (88% including 40% share of production

from Raspadskaya)

◦ Cash cost of washed coking coal went up in 3Q 2011 due to

drop in production volumes and increased repair costs

◦ EVRAZ’s strategy is to expand its mining division increasing

self-sufficiency

◦ The company is developing a number of projects including

the Mezhegey and Yerunakovsky VIII coal deposits and the

Kachkanar iron ore deposit

Mining:Mining:Mining:Mining: Integrated Portfolio of Iron Ore and Integrated Portfolio of Iron Ore and Integrated Portfolio of Iron Ore and Integrated Portfolio of Iron Ore and

Coking CoalCoking CoalCoking CoalCoking Coal

27

20

30

40

50

60

70

80

90

100

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11

Cash Cost, Russian Iron Ore Products and CoalCash Cost, Russian Iron Ore Products and CoalCash Cost, Russian Iron Ore Products and CoalCash Cost, Russian Iron Ore Products and Coal

US$/t

8,859

10,397 10,6359,981

10,455

8,8099,955

9,60810,191 10,355

0

4,000

8,000

12,000

H1 2009 H2 2009 H1 2010 H2 2010 H1 2011

99%99%99%99% 96%96%96%96% 90%90%90%90% 102%102%102%102% 99%99%99%99%

(1) Self-coverage, %= total production divided by total steel segment consumption

(2) Self-coverage, %= total production (plus 40% of Raspadskaya production on pro rata basis) divided by total steel segment consumption

(3) Self-coverage excl. 40% Raspadskaya share

Kachkanar iron ore deposit

‘000 tonnes

Iron Ore SelfIron Ore SelfIron Ore SelfIron Ore Self----CoverageCoverageCoverageCoverage (1)(1)(1)(1), 2009, 2009, 2009, 2009----H1 2011H1 2011H1 2011H1 2011Iron Ore SelfIron Ore SelfIron Ore SelfIron Ore Self----CoverageCoverageCoverageCoverage (1)(1)(1)(1), 2009, 2009, 2009, 2009----H1 2011H1 2011H1 2011H1 2011

Consumption Production Consumption Production Excl. Raspadskaya Raspadskaya Production

4,0533,850

3,2993,4992,4042,5062,191

4,021

3,4023,642

5,288

4,218

4,795

3,5013,229

0

3,000

6,000

Washed Coking Coal (Concentrate) SelfWashed Coking Coal (Concentrate) SelfWashed Coking Coal (Concentrate) SelfWashed Coking Coal (Concentrate) Self----Coverage Coverage Coverage Coverage (2)(2)(2)(2)Washed Coking Coal (Concentrate) SelfWashed Coking Coal (Concentrate) SelfWashed Coking Coal (Concentrate) SelfWashed Coking Coal (Concentrate) Self----Coverage Coverage Coverage Coverage (2)(2)(2)(2)

‘000 tonnes

137%137%137%137% 125%125%125%125% 90%90%90%90% 80%80%80%80% 88%88%88%88%

78%(3)100%(3)54%(3) 62%(3) 62%(3)

H1 2009 H2 2009 H1 2010 H2 2010 H1 2011

‘000 tonnes‘000 tonnes‘000 tonnes

Iron ore products (Fe 58%) Washed coking coal (concentrate)

29

+7 495 232-13-70

[email protected]@evraz.com

www.evraz.com

Documents

презентация для инвесторов, ноябрь декабрь 2011