Resources create opportunities

Resources create opportunities

2017 IFRS Financial Results 15 March 2018

2

Disclaimer

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The following USD/RUB exchange rates were used for the presentation of those financial results:

Average over the period*: 2015 – 60.9579; Q1 2016 – 74.6283; Q2 2016 – 65.8833; Q3 2016 – 64.6245; Q4 2016 – 63.0685;

Q1 2017 – 58.8442; Q2 2017 – 57.1451; Q3 2017 – 59.0195; Q4 2017 – 58.4080.

End of the period: 2015 – 72.8827; 2016 – 60.6569; 2017 –57.6002.

This presentation of Metalloinvest’s financial results for FY 2017 (the “Presentation”) contains certain forward-looking statements, particularly those relating to anticipated

demand and consumption, global economic conditions, commodity prices, management aims and objectives, strategy, production, anticipated investments and

anticipated completion of previously announced transactions. Metalloinvest will not update these statements to reflect events and circumstances occurring after the date

hereof. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the

future. Actual results may differ from those expressed in such statements depending on a variety of factors, including future levels of industry product supply, demand and

pricing, operational problems, general economic conditions, political stability and economic growth in relevant areas of the world, changes in laws and governmental

regulations, exchange rate fluctuations, development and use of new technology, changes in public expectations and other changes in business conditions, the actions of

competitors, natural disasters and adverse weather conditions, wars and acts of terrorism or sabotage, other factors discussed elsewhere in this document, as well as

other risks affecting Metalloinvest and its operations.

The contents of this Presentation do not constitute or form part of any advertisement of securities, any offer or invitation to issue, sell, purchase, exchange or transfer or

any solicitation of any offer to purchase or subscribe for, any securities of Metalloinvest in any jurisdiction, nor shall this Presentation nor any part of it nor the fact of its

presentation, communication or distribution form the basis of, or be relied on in connection with, any contract or investment decision. Any foreign securities which are

mentioned in this Presentation are not and will not be registered in the Russian Federation by any state authority responsible for registration of such securities and such

securities shall not be admitted to subscription nor shall be publicly available in the Russian Federation and cannot be the subject of any offer in the Russian Federation,

except in the cases permitted by the law of the Russian Federation. No representation or warranty, express or implied, is given by Metalloinvest, its affiliates or any of their

respective advisers, officers, employees or agents, as to the accuracy of the information or opinions or for any loss howsoever arising, directly or indirectly, from any use of

these materials or their contents.

Notes:

*Income and expenses for the years ended 31 December 2016 and 31 December 2017 were translated to

presentation currency at quarterly average exchange rates

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Content

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I. Key Highlights………...….……….………………..…………………………………........................... 4

II. Operational Results..…….....………………………………………………………………………………... 8

III. Financial Results …...…………………………………………………………………........................... 12

IV. Debt & Credit Ratings…………………………………………………….….................................. 16

V. Subsequent Events……………………………………………………………………………………………... 19

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KEY HIGHLIGHTS

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Highlights

Key financials USD mn 2017 2016 Change

Revenue 6,231 4,261 46.2%

Gross profit 3,161 2,050 54.2%

EBITDA* 2,120 1,258 68.5%

EBITDA margin 34.0% 29.5% 4.5 p.p.

Net Income 1,406 1,153 21.9%

Capex 489 290 68.6%

USD mn, eop 31.12.2017 31.12.2016 Change

Total Debt 4,446 4,183 6.3%

Short-term debt 413 91 -

Cash & equivalents 390 989 -60.6%

Net Debt 4,056 3,194 27.0%

Net Debt / EBITDA LTM 1.9х 2.5х (0.6х)

Notes:

*Hereinafter EBITDA stands for EBITDA adjusted according to IFRS requirements. For more details please refer

to IFRS Statements

Net Debt / EBITDA LTM is calculated based on EBITDA for the last 12 months; the indicator has

an informational character and does not contain adjustments as per loan documentation

35

55

75

95

Jan 2015 Jan 2016 Jan 2017 Jan 2018

Iron ore index (62% Fe, CFR China)

USD/ t

Source: Bloomberg

56 59

72

Global iron ore prices

4,393 4,261

6,231

Revenue

2015 2016 2017

1,432 1,258

2,120

EBITDA2015 2016 2017

2.5x 2.5x 1.9x

Net Debt/EBITDA LTM

USD mn

6

Market review

• Recovery of demand for steel products in the USA, Europe and Russia in 2017

• Inventories in the major markets remain respectively low, supporting steel product prices

Iro

n o

re a

nd

p

ell

ets

M

eta

llic

s

(pig

iro

n a

nd

HB

I)

Ste

el

pro

du

cts

Key drivers of changes

• Closure of high-cost facilities in China has a positive impact on the way to achieve a balance in the market

• Largest market players (Australia and Brazil) demonstrate a balanced approach to investing in new capacities

• Significant increase in premium for iron ore and pellets quality

• Chinese quality control and environmental protection measures (closure of ‘illegal’ furnaces and reduction of installed capacities of up to 170 mn t in 2017)

• Deficit of high-quality iron ore raw materials (pellets, HBI) in the Chinese domestic market

1.99 2.00 2.07

2.03 2.04 2.10

1.6

1.8

2.0

2.2

2015 2016 2017Demand Supply

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Market trends

82.0 85.6 94.4

13.1 12.8 12.2 8.5 7.3 10.3

103.6 105.7 116.9

0

50

100

150

2015 2016 2017Scrap Pig iron HBI/DRI

0.67 0.68 0.77

0.83 0.84 0.86

1.50 1.52 1.62

0.0

0.7

1.4

2.1

2015 2016 2017China RoW

Price dynamics

Trade of metallics, mn t

Steel product consumption, bn t

40

70

100

130

Pellets, 65% Iron ore, 62% Iron ore, 65%2015 2016 2017

USD/t, CFR China

150

240

330

420

HBI, import Italy Pig iron, FOB Black Sea

USD/t

2015 2016 2017

150

300

450

600

Steel billet, FOB Black Sea

USD/t

2015 2016 2017

Source: data provided by analytical industry agencies, ISSB, WSA

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Metalloinvest market position Ir

on

ore

an

d

pe

lle

ts

Me

tall

ics

(p

ig i

ron

an

d H

BI)

S

tee

l p

rod

uct

s

Segment development

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Prospective development Global position (in 2017)

• >50% of merchant HBI production

• #1 pig iron exporter

• Increase of high value-added SBQ production (by 23% since 2015)

• Increase of high value-added semis production (by 67% since 2015)

• >75% of bridge steel market in Russia is supplied by Ural Steel

• #5 iron ore producer

• #2 pellet producer • Production of iron ore concentrate

with the unique Fe content up to 70.4%

• Modernisation of HBI-1,2 Plants to increase HBI production up to 4.5 mn t

• Complex programme for blast furnaces and electric arc furnaces modernisation at Ural Steel

• Develop a complex development programme of steel segment to increase high value-added production volumes

• Obtain new certificates, confirming the compliance of Metalloinvest steel products with best quality standards

• Launch of stack sizers at MGOK

• Construction of in-pit crushing and conveyor complexes to increase the efficiency of iron ore extraction at LGOK and MGOK

• Launch of Derrick stack sizers at LGOK to produce iron ore concentrate with Fe content up to 70.4%

• Pellets with Fe content 65-67% produced from LGOK and MGOK iron ore concentrates

• Pellet Plant #3 launch at MGOK with a total capacity of 5 mn t in 2015

• Launch of HBI-3 Plant at LGOK with a total capacity of 1.8 mn t in July 2017

• Launch of Blast Furnace #4 at Ural Steel after large-scale maintenance works accompanied with modernisation in 2016

• Launch of Pig Iron Casting Machine #5 at Ural Steel in 2015

• Construction of precision sizing unit at OEMK (+67 th t/year of high quality billets)

• Modernisation of four-strand continuous casting machine (CCM #1) at Ural Steel (round billets for railway wheels and square billets for rail production)

• Construction of Roller Treatment Furnace #1 and Heat Treatment Machine #1 at Ural Steel

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OPERATIONAL RESULTS

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2017 key developments

• Iron ore production decreased by 1.0%*, due to

a change in ore mixture

• Pellet production fell by 0.4% as a result of scheduled

major maintenance works and a change in the pellet

assortment in the product structure to meet the

requirements of HBI-3 Plant, contributed to total HBI

production 1.1 mn t

• HBI/DRI production rose by 22.6%, mostly due to

the launch of HBI-3 Plant at LGOK

• Hot metal production decreased by 9.3% as a result of

maintenance and repair works

• Crude steel production grew by 2.1%, mainly

due to long-term contracts with Russian customers

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Production volumes

39.5

23.8

5.4

2.5

4.5

40.7

25.2

5.7

3.0

4.7

40.3

25.1

7.0

2.7

4.8

Iron ore

Pellets

HBI/DRI

Hot metal

Crude steel

2015 2016 2017

mn t

Notes:

Data on major plants: LGOK, MGOK, OEMK, Ural Steel

Iron ore refers to iron ore concentrate and sintering ore

*Hereinafter comparison with 2016

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2.3 2.2

0.2 0.3

0.9 1.0 0.2 0.3 0.6 0.6

4.3 4.4

2016 2017

Plate HVA

Plate

SBQ HVA

Semi-finished product HVA

Semi-finished product

2.1 1.4

6.9 6.7

16.8 16.2

2016 2017

Russia

Europe

Asia

MENA

Others

27.8 26.8

1.8 2.1

1.9 1.5

1.2 0.9

1.6 1.8

2016 2017

Shipment structure

Data on major plants: LGOK, MGOK, OEMK, Ural Steel

10.7 10.4

14.5 12.8

2.5 3.6

27.8 26.8

2016 2017

Other

HBI/DRI

Pellets

Iron ore

Shipment of iron ore products by region

Shipment of iron ore products

6.7 6.5

Mining Segment Steel Segment

Shipment of steel products

Shipment of pig iron and steel products by region

mn t

mn t

mn t

mn t

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Capital expenditure breakdown in 2017

417

290

489 ~500

2015 2016 2017 2018F

USD mn

Industry 4.0

The Company launched its Industry 4.0 business

transformation programme to:

• improve the efficiency of its entire management system

• ensure accounting transparency and timely decision-making

• reduce costs • boost margins

USD 31 mn

Mining Segment

Construction of HBI-3 Plant at LGOK

Steel Segment

USD 117 mn +1.8 mn t of HBI

New high productivity mining vehicles at LGOK and MGOK

USD 44 mn

Construction of concentrate intake facility at MGOK USD 20 mn

Technical re-equipping of DRI unit #2 at OEMK

USD 48 mn

CCM* #1 at Ural Steel modernisation

USD 10 mn

Construction of Roller Treatment Furnace #1 and Heat Treatment Machine #1 at Ural Steel USD 14 mn

Notes:

Capex data on the graph for 2015, 2016, 2017 refers to IFRS Statements, all the rest

figures reflect management accounting

*Continuous Casting Machine

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FINANCIAL RESULTS

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13

1,688

1,019

217

651

685

2,525

1,409

247

853

1,197

Russia

Europe

Asia

MENA

Other

countries*

2016

2017

Revenue composition

2017 Revenue: USD 6,231 mn

USD mn

11%

21%

12% 12%

41%

3%

11%

20%

14%

12%

40%

3%

Iron ore Pellets

HBI Pig iron

Steel products Other revenue

2017 – outer circle 2016 – inner circle

Revenue by region

Export share 59% in 2017

vs. 60% in 2016

* Others include Americas and CIS countries

14

872

392

967

301

1,742

406

Mining Steel

2015 2016 2017

1,258

2,120

1,970

(858)

(198)

(51)

(1)

EBITDA 2016

Revenue

Cost of sales

Distribution

expenses

G&A expenses

Other

EBITDA 2017

EBITDA y-o-y dynamics

EBITDA composition

2017 EBITDA: USD 2,120 mn

USD mn Improving market conditions as well as growth in HVA

products output (HBI and high-quality steel) resulted

in the increase of the Company’s EBITDA by 68.5% to

USD 2,120 mn in 2017

EBITDA by segment dynamics

34.0%

29.5%

EBITDA margin

USD mn

15

564

906 821

1,232 1,258

342

2,120

411 (315)

(83) (6)

(290)

(325)

(372)

(113)

(489)

EB

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WC

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FCF*

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*

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aft

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dis

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fin

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*

FCF

aft

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sal

of

fin

an

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s

Positive free cash flow

USD mn

2016 2017

Notes:

EBITDA stands for EBITDA adjusted according to IFRS requirements. For more details, please refer

to IFRS Statements

*Proceeds from the disposal of ADRs in MMC Norilsk Nickel’s

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DEBT & CREDIT RATINGS

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17

0.1 0.5

0.9

1.6

0.8

0.2 0.1 0.0 0.1

0.3

0.8 0.9 0.8

0.3 0.3

0.9

0.1

2017 2018 2019 2020 2021 2022 2023 2024 After 2024

2017 key developments

• Feb-Apr: increase of ING BANK limit of the Company’s two-year committed revolving credit line from USD 100 mn to USD 200 mn

• May: Tender offer of Eurobonds-2020 and issue of USD 800 mn Eurobonds-2024 with a 4.85% interest rate

• June: Refinancing of USD 1.03 bn and using funds obtained through a new PXF*-2017 with better pricing terms and maturity schedule

• August: Partial repayment of USD 100 mn of PXF-2016 (Tranche B) ahead of the scheduled maturity dates

• October: Signing of two long-term credit facility agreements with ING Bank covered by ECA** for a total amount of EUR 16.7 mn

Debt profile as of 31 December 2017

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Sources: IFRS data, management accounts

* PXF – pre-export finance facility

** ECA -export credit agency

*** Undrawn committed credit lines

Cash

USD bn

Debt maturity schedule

4,387 4,183

4,446

3,563 3,191

4,056

2.5x 2.5x

1.9x

2015 2016 2017

Total Debt Net Debt Net Debt/EBITDA

USD mn

as of 31 December 2016 as of 31 December 2017

18

Credit ratings in 2017–2018

December 2017 February 2017 Date

Rating

POSITIVE

STABLE Outlook

Ba2 BB

BBB+

STABLE

December 2017

STABLE

BB

April 2017

ruAA-

STABLE STABLE

January 2018

19

0.6 0.5 0.5 0.2

0.7

0.3 0.4

0.3

0.7 0.9 0.9

0.5 0.4

0.9

0.3

2018 2019 2020 2021 2022 2023 2024 After 2024

In 2018, Metalloinvest continued to perform in line with its financial policy and executed a number of transactions

to improve the quality of debt portfolio:

• In January 2018, the Company raised a USD 240 mn pre-export finance facility to refinance its existing

USD-denominated debt due in 2018–2019. New PXF has a 5-year tenor with a 4-year grace period and its interest

rate is linked to LIBOR

• In February 2018, the Company executed a put-option on its RUB-denominated bonds series 02 and 03 for a total

amount of RUB 10 bn and kept the issuance’s full amount in the market. The coupon was set at 7.65% per annum

until its maturity in 2023

SUBSEQUENT EVENTS

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Sources: Management accounts

Cash

USD bn

Debt maturity schedule as of February 2018 (USD 4.6 bn of total debt) RUB USD, EUR

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Q&A SESSION

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APPENDIX

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Debt structure as of 31 December 2017

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Sources: IFRS data, management accounts

*Pre-export financing

2017 Total Debt: USD 4,446 mn

Breakdown by currency

23% 38% 37%

72% 56% 55%

2015 2016 2017

USD

RUB

EUR

17% 22% 21% 6%

16% 16%

38% 24% 25%

31% 31% 29%

2015 2016 2017

PXF*

Eurobonds

RUB bonds

Sberbank

Other

Breakdown by source

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Health, Safety & Environment

th t

Health & Safety

Safety is the Company’s top priority

• In 2017, LTIFR decreased by 31% vs. 2016

• The Company aims to ensure a zero fatality rate

Environment

In 2017, the Company implemented several important HSE projects

• Modernised the lighting systems at OEMK, LGOK and MGOK, that enabled the savings of 30.5 mn kWh per year

• Installed a new purification system to remove dust from the air at the crushing and sorting plant at MGOK. Thus, absorption increased by almost 20% in comparison with the previous system

• OEMK constructed its third waste disposal facility, with a capacity of 1 mn tonnes of fourth and fifth-class waste

• Ural Steel launched an industrial waste landfill facility designed for 25 years of operation

* LTIFR is calculated on the basis of 5 Metalloinvest major plants (LGOK, MGOK, OEMK, Ural Steel and Ural Scrap Company):

(total number of injuries with loss of labour capacity / number of worked man hours) х 1 mn man hours

** Total amount of pollution emission into atmosphere from stationary sources

0.50

0.26 0.30

0.43

0.28

0.45

0.31

2011 2012 2013 2014 2015 2016 2017

LTIFR*

Accidents and fatalities

39

21 24 34

22

36 26

4 1 4 5 0 3 2

2011 2012 2013 2014 2015 2016 2017

Accidents Fatalities 160 157

135 126 124

117 113

80

110

140

170

200

2011 2012 2013 2014 2015 2016 2017

-29%

Atmospheric emissions**

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Key financial indicators

USD mn H1 2016 H2 2016 FY 2016 H1 2017 H2 2017 FY 2017 Change

Revenue 1,931 2,330 4,261 3,032 3,199 6,231 46.2%

Gross profit 896 1,154 2,050 1,556 1,605 3,161 54.2%

EBITDA 533 725 1,258 1,061 1,059 2,120 68.5%

EBITDA margin 28% 31% 29.5% 35% 33% 34.0% 4.5 p.p.

Net Income 428 725 1,153 585 821 1,406 21.9%

Capex 155 135 290 188 301 489 68.6%

Total Debt 4,183 4,183 4,183 4,468 4,446 4,446 6.3%

Short-term Debt 91 91 91 289 413 413 3.5x

Cash and cash equivalents* 989 989 989 866 390 390 -60.6%

Net Debt 3,194 3,194 3,194 3,602 4,056 4,056 27.0%

Net Debt / EBITDA LTM 2.5х 2.5х 2.5х 2.0х 1.9х 1.9х (0.6x)

Notes:

EBITDA stands for EBITDA adjusted according to IFRS requirements. For more details please refer to IFRS Statements

Net Debt / EBITDA LTM is calculated based on EBITDA for the last 12 months; the indicator has

an informational character and does not contain adjustments as per loan documentation

25

Committees

Name Category Company Audit Finance,

Budgeting and Strategy

Remuneration

Ivan Streshinsky Chairman

Non-executive USM

Galina Aglyamova Independent

Non-executive

Valery Kazikaev Independent

Non-executive

Nikolai Krylov Independent

Non-executive

Dmitry Tarasov Independent

Gleb Kostikov Non-executive USM

Irina Lupicheva Non-executive USM

Pavel Mitrofanov Non-executive USM

Andrey Varichev Executive Metalloinvest

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C

C

C Member of a committee Committee Chairman

Board of Directors composition follows best corporate governance practices

C

26

Capital expenditure guidance for 2018-2019

Project Enterprise Overview

Industry 4.0 business transformation programme

Metalloinvest • Create an integrated financial and business management system

• Set up a multifunctional shared service center

In-pit crushing and conveyor complexes

LGOK, MGOK • Primary crushing takes place in the pit. Then crushed material is conveyed to next processing phases

Complex programme for SBQ production development

OEMK • Shift to larger volumes of high-value added products

• Increase SBQ quality • Ensure customer-focused approach

Complex programme for blast furnaces and electric arc furnaces modernisation

Ural Steel • Use pellets as furnace charge • Increase efficiency • Decrease environment impact

27

Investor Relations & Corporate Ratings Department 01 02 03

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Contacts

Artem Lavrischev

Director of Investor Relations & Corporate Ratings

T: +7 (495) 981 55 55, ext. 7243

ir@metalloinvest.com

www.metalloinvest.com