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  1. 1 Moscow, 07 August 2014 Q2 AND H1’14 US GAAP CONSOLIDATED FINANCIAL RESULTS
  2. This document is confidential and has been prepared by NLMK (the “Company”) solely for use at the presentation of the Company and may not be reproduced, retransmitted or further distributed to any other person or published, in whole or in part, for any other purpose. This document does not constitute or form part of any advertisement of securities, any offer or invitation to sell or issue or any solicitation of any offer to purchase or subscribe for, any shares in the Company or Global Depositary Shares (GDSs), nor shall it or any part of it nor the fact of its presentation or distribution form the basis of, or be relied on in connection with, any contract or investment decision. No reliance may be placed for any purpose whatsoever on the information contained in this document or on assumptions made as to its completeness. No representation or warranty, express or implied, is given by the Company, its subsidiaries 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 this presentation or its contents. The distribution of this document in other jurisdictions may be restricted by law and any person into whose possession this document comes should inform themselves about, and observe, any such restrictions. This document may include forward-looking statements. These forward-looking statements include matters that are not historical facts or statements regarding the Company’s intentions, beliefs or current expectations concerning, among other things, the Company’s results of operations, financial condition, liquidity, prospects, growth, strategies, and the industry in which the Company operates. By their nature, forwarding-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The Company cautions you that forward-looking statements are not guarantees of future performance and that the Company’s actual results of operations, financial condition and liquidity and the development of the industry in which the Company operates may differ materially from those made in or suggested by the forward-looking statements contained in this document. In addition, even if the Company’s results of operations, financial condition and liquidity and the development of the industry in which the Company operates are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in future periods. The Company does not undertake any obligation to review or confirm analysts’ expectations or estimates or to update any forward-looking statements to reflect events that occur or circumstances that arise after the date of this presentation. By attending this presentation you agree to be bound by the foregoing terms. 2 DISCLAIMER
  3. CONTENT  1. Strategy implementation 2. Key results 3. Financial highlights 4. Segment results 3
  4. STRATEGY 2017: SECURING FUTURE LEADERSHIP o Increase market share in Russia/CIS o Improve utilization rates at the US and European facilities o Scale up efficient iron ore mining platform o Reduce consumption of expensive resources o Minimize environmental footprint o Promote safe operating practices o Develop motivated and engaged workforce Leading positions in strategic markets World-class resource base Leadership in sustainability & safety o Achieve best-in-class operational efficiency standards across production chain Leadership in operational efficiency 1 2 3 4 [4]
  5. 65% 9% 16% 10% Process technology Energy efficiency Procurement Labor productivity and headcount $133 m • OPERATIONAL EFFICIENCY PROGRAMS o 6M’14 cost saving reached $133 m - over 50% of the Strategy 2017 target o Q2’14 effect totaled $63 m (compared to 2013) • STEEL SEGMENT o Decrease in c/coal costs while maintaining coke quality and lower coal yields for coke production o Higher blast furnace productivity – up to 10% o Reduction of conversion yields and lower share of non- conforming product output at BOF operations o Technological materials substitution with cheaper ones • MINING SEGMENT o Iron ore concentrate capacity at Stoilensky was increased by 0.5 m tpa through enhanced productivity of the equipment • FOREIGN ROLLED PRODUCTS SEGMENT o Personnel optimization by 2% o Change in salary schemes • INVESTMENT AIMED AT LEADERSHIP IN EFFICIENCY o In June 2014 - launch of new generator at the Lipetsk site increased captive generating capacity by 50 MW to 482 MW o Self-sufficiency in electricity went up from 52% to 58%. Effect on EBITDA of $15 m pa 5 LEADERSHIP IN OPERATIONAL EFFICIENCY 6M’14 OPERATIONAL EFFICIENCY GAINS BY SEGMENT 62% 5% 13% 8% 12% Steel segment Long products segment Mining segment Foreign rolled products segment NLMK Belgium Holdings $133 m * Including operational efficiency programs at NBH assets. Not including effect from new generator launch at Lipetsk site 6М’14 OPERATIONAL EFFICIENCY GAINS BY FUNCTIONAL AREA 1
  6. 0% 8% 31% 40% 100% 2012 2013 2014 2015E 2018E 0% 20% 40% 60% 80% 100% Share of blast furnace operations with PCI Share of blast furnace operations without PCI • STOILENSKIY MINE DEVELOPMENT: PELLETIZING PLANT o Contractor selection and beginning of active construction stage – May 2014 o Project status at the end of Q2’14: ◦ Zero cycle activities completed – 100% ◦ Building steelwork erection – 13% ◦ Invested into the project as at June 2014: $185 m o Commissioning – September 2016 • PULVERISED COAL INJECTION TECHNOLOGY (PCI) o Apr-14: PCI installed at BF#4 drove total BF capacity equipped with PCI technology from 8% to 31% o PCI integration at BF#6-7 in 2016-2017 o Technology effects: ◦ Reduction of coke consumption by 20% ◦ Reduction of natural gas consumption by 60% • OPTIMIZATION OF COKING TECHNOLOGY o Reduction of coal imports down to zero in 2014 (0.3 m t of imported coal in 2013) 6 WORLD CLASS RESOURCE BASE PELLETIZING PLANT CONSTRUCTION AT STOILENSKY PCI TECHNOLOGY AT LIPETSK SITE Photo July 2014 0 m t 0.9 m t 3.9 m t 4.7 m t 12.4 m t 2
  7. 0,74 0,74 0,81 0,84 0,74 0,77 0,90 0,77 0,77 0,87 0,36 0,45 0,43 0,39 0,42 0,45 0,52 0,52 0,52 0,621,10 1,20 1,26 1,32 1,32 1,41 1,60 1,46 1,55 1,74 0% 10% 20% 30% 40% 50% 0,0 0,5 1,0 1,5 2,0 2,5 3,0 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Semi-finished products Flat products Long products TOTAL Russian market share (r.h.) • STRENGTHENING OF MARKET POSTIONS IN RUSSIA o Record sales in Russia in Q2’14: 1.74 m t o Share of sales to the domestic market: 45% o Increased sales across all products: ◦ Flat steel, including HVA* products (+8.3% H1’14/H1’13) ◦ Long products driven by NLMK Kaluga (+31.2% H1’14/H1’13) ◦ Semi-finished products (+45% H1’14/H1’13) on the back of the significant increase in slab sales to the Russian market • INTERNATIONAL MARKETS DEVELOPMENTS o International assets sales growth by 204,000 t in H1’14 (+10.7% H1’14/H1’13) o Targeted segment sales development in accordance with the Strategy 2017 ◦ NLMK EU Strip: sales of flat products for automotive in Europe went up to 0.234 m t (+33% H1’14/H1’13, 46% of sales in H1’14) ◦ NLMK EU Plates: sales of niche plates went up to 97,000 t (+39% H1’14/H1’13, 17% of sales in H1’14) 7 LEADERSHIP IN STRATEGIC MARKETS FOREIGN ASSETS SALES ** m t NLMK SALES IN RUSSIA Total sales 37% 45% *HVA - high value added products. HVA includes cold-rolled, galvanized, pre-painted and electrical steel ** Sales of foreign assets include sales of NBH companies 905 999 0 200 400 600 800 1000 1200 H1'13 H1'14 Flat steel 65% 54% 35% 46% 500 524 0 100 200 300 400 500 600 H1'13 H1'14 Automotive Other industries NLMK EU STRIP 000’ t NLMK USA 000’ t 86% 83% 14% 17% 497 583 0 100 200 300 400 500 600 H1'13 H1'14 Q&T / niche thick plates Ordinary grades Итого NLMK EU PLATE 000’ t 3
  8. • PROGRESS IN OCCUPATIONAL HEALTH & SAFETY o LTIFR* reduced by 37% compared to 2013 o Current LTIFR is below the industry average and at best practice level • NEW STAGE OF ENVIRONMENTAL PROGRAM o Reduction of atmospheric emissions by 4% compared to 2013 o Large-scale environmental projects implemented at the Lipetsk site ($87 mln capex invested as at the end of Q2’14 – 70% completion) ◦ Biological treatment of waste water at coke-chemical operations ◦ Infrastructure facility upgrade in the refractory workshop ◦ Upgrade of central aspiration system at sintering operations 8 LEADERSHIP IN SUSTAINABILITY AND SAFETY LOST TIME INJURY FREQUENCY RATE (LTIFR) * LTIFR – Lost Time Injury Frequency Rate 0,86 0,87 0,83 0,52 0,60 0,60 0,0 0,2 0,4 0,6 0,8 1,0 2011 2012 2013 H1'14 Target for 2017 Best practice (globally) AIR EMISSIONS, KG/T OF STEEL 37,0 28,5 21,9 21,0 19,4 2007 2010 2013 H1'14 Target 2020 4 -37% -4%
  9. CONTENT 1. Strategy implementation  2. Key results 3. Financial highlights 4. Segment results 9
  10. Average world rate 0% 20% 40% 60% 80% 100% 120% Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 Lipetsk site PRODUCTION RESULTS • Q2’14 STEEL OUTPUT: o 3.8 m t, -3% qoq due to repairs at the Lipetsk site • Q2’14 UTILIZATION RATES: o NLMK Group: 94% (+2 p.p. qoq) o Steel segment: 98% (adjusting to repairs) o NLMK Long Products segment: 92% at NSMMZ and 77% of EAF and 100% of rolling capacity at NLMK Kaluga o NLMK Indiana: 81% • H1’14 STEEL OUTPUT: o 7.7 m t, +3% yoy (driven by increased run rates at NLMK Kaluga) 10 3,0 3,1 3,1 3,2 3,1 2,9 0,5 0,5 0,6 0,7 0,7 0,7 0,2 0,2 0,2 0,2 0,2 0,2 3,7 3,8 3,9 4,1 3,9 3,8 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Steel segment Long products segment Foreign rolled product segment * NLMK Verona production volumes excluded from total since Q4’13 STEEL OUTPUT* m t 88% 73% 98% 92% 81% 86% 98% 94% 50% 60% 70% 80% 90% 100% NLMK USA NLMK Long products Lipetsk site NLMK Group Q1'14 Q2'14 UTILIZATION RATES BY SITE Sources: utilization rates as per WSA data STEELMAKING CAPACITIES UTILIZATION RATES
  11. SALES STRUCTURE 11 • Q2’14: SHARE OF ROLLED STEEL 72% (+8 P.P.) o Rolled steel sales increased to 2.8 m t (+12% qoq) o Higher long product and metalware sales +15% qoq o Higher electrical steel sales +22% qoq • SLAB SALES +10% YOY – SLAB SALES TO NBH RECOGNIZED AS EXTERNAL SALES SINCE Q4’13 • LONG PRODUCT SALES +41% YOY DRIVEN BY NLMK KALUGA LAUNCH SALES STRUCTURE BY PRODUCT REVENUE BY PRODUCTSALES MIX CHANGE BY PRODUCT 13% 13% 15% 6% 6% 6% 14% 13% 14% 19% 22% 25% 34% 34% 25% Q4'13 Q1'14 Q2'14 Pig iron Slabs Billets HRC Thick plates CRC Galvanised Pre-painted Electrical Long products Metalware 3,57 3,87 m t 3,84 11% 10% 12% 7% 7% 7% 14% 13% 14% 16% 19% 21% 26% 27% 20% 10% 9% 9% Q4'13 Q1'14 Q2'14 0% 20% 40% 60% 80% 100% Other products* Pig iron Slabs Billets HRC Thick plates CRC Galvanized Pre-painted Electrical Long products Metalware $2.64 bn$2.50 bn $2.81 bn -25% -6% -3% 4% 9% 11% 12% 13% 16% 22% -30% -20% -10% 0% 10% 20% 30% Slabs Pre-painted Billets Thick plates Galvanized CRC Metallware HRC Long products Electrical Sales change q/q
  12. KEY HIGHLIGHTS 12 • Q2’14 FINANCIAL RESULTS o Revenue $2,808 m (+6% qoq) o EBITDA $594 m (+27% qoq) o EBITDA margin 21.2% (+3.5 p.p.) o Net debt $2,103 m (-9% qoq) o Net debt/12M EBITDA 1.14х • ONGOING PROFITABILITY GROWTH • H1’14 FINANCIAL RESULTS o Revenue $5,446 m (-4% yoy) o EBITDA $1,063 m (+48% yoy) o EBITDA margin 19.5% (+6.9 p.p. yoy) REVENUE AND EBITDA $ bn 2,9 2,8 2,7 2,5 2,6 2,8 0,3 0,4 0,4 0,4 0,5 0,6 - 0,5 1,0 1,5 2,0 2,5 3,0 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Revenue EBITDA EBITDA MARGIN, % 11% 14% 14% 16% 18% 21% 0% 5% 10% 15% 20% 25% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14
  13. CONTENT 1. Strategy implementation 2. Key results  3. Financial highlights 4. Segment results 13
  14. PROFITABILITY 14 • EBITDA Q2’14: $594 M (+27% QOQ) • EBITDA MARGIN 21.2% o (+) Efficiency improvement programs o (+) Sales structure optimization o (-) Insignificant reduction in sales o (+) Increase in prices in the domestic market o (-) Insignificant reduction in export prices o (+) Lower prices for iron ore o (-) Higher prices for scrap EBITDA CHANGE BY SEGMENT (QOQ) SEGMENT CONTRIBUTION TO Q2’14 EBITDA 353 19 52 185 14 594 0 100 200 300 400 500 600 700 Steelsegment Foreignrolled products segment Longproducts segment Miningsegment Otheroperations and intersegmental Q2'14 468 90 4 45 23 19 594 300 400 500 600 700 Q1'14 Steelsegment Foreignrolled products segment Longproducts segment Miningsegment Otheroperations and intersegmental Q2'14 $ m $ m
  15. EBITDA Working capital changes Other non-cash operations Income tax Net interest * NET OPERATING CASH FLOW Capital expenditures ** FREE CASH FLOW TO THE FIRM Net repayments of borrowings/attraction of funds FREE CASH FLOW TO EQUITY Change in deposits and financial investment Dividends FX rate change CHANGE IN CASH CASH FLOW 15 Q2‘14 CASH FLOW BRIDGE• FREE CASH FLOW TO THE FIRM: $467 M IN Q2’14 (+72% QOQ) o EBITDA $594 m (+27% qoq) o Investment $151 m (+15% qoq) o Cash release from working capital +$144 m driven by inventory reduction $ m 109 18 111 131 333 135 467 151 618 12 66 43 144 594 107 99 151 92 271 467 0 100 200 300 400 500 Q1'13 Q2'13 Q3'13*** Q4'13 Q1'14 Q2'13 $ m FREE CASH FLOW TO THE FIRM CHANGE * Including interest paid (w/o capitalized interest) of $19 m and interest received of $9 m ** Including capitalized interest of $18 m *** 3Q 2013 cash flow does not Include $123 m, received for sale of 20.5% NBH stake
  16. 2,74 2,68 1,14 0,13 0,08 1,16 0 1 2 3 4 5 31 Mar '14 Net settlements of debt FX rate change impact 30 Jun '14 ST debt LT debt DEBT POSITION 16 • CONSISTENT REDUCTION OF NET DEBT AND LIQUIDITY GROWTH o Net debt $2.10 bn (-9% qoq) o Gross debt $3.83 bn (-1% qoq) o Cash and equivalents* $1.73 bn (+9% qoq) o Net debt / 12M EBITDA 1.14х (-0.25 p.p.) CHANGE IN DEBT POSITION IN Q2’14 NET DEBT CHANGE IN Q2’14MATURITY AND NET DEBT/EBITDA $ bn Weighted average maturity 1,93 2,15 1,87 1,80 1,39 1,14 0,0 0,5 1,0 1,5 2,0 2,5 3,0 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Net debt/EBITDA 3,3 3,4 3,6 3,3 3,2 3,0 2,4 2,8 3,2 3,6 4,0 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 * Cash and equivalents and short term investments 2,30 0,62 0,15 0,11 0,16 2,10 1,0 1,5 2,0 2,5 31 Mar '14 Operating cash flow Capex Dividends FX rate and other factors 30 Jun '14 $ bn
  17. $0 $200 $400 $600 $800 $1 000 2014 2015 2016 2017 2018 2019 and onward Other debt Revolving credit lines for working capital financing Eurobonds (USD) ECA financing and investment credits Ruble bonds 792 685 421 362 917 594 LIQUIDITY AND DEBT SETTLEMENT 17 • STRONG LIQUIDITY POSITION • COMFORTABLE MATURITY SCHEDULE o Short term deb $1.16 bn ◦ Ruble bonds ◦ Revolving credit lines for working capital financing ◦ ECA financing o Long term debt $2.68 bn ◦ Eurobonds and ruble bonds ◦ Long term part of ECA financing TOTAL DEBT MATURITY CHEDULE***INTEREST EXPENSES** $ m 1 731 1 108 2 911 199 593 199 118 $0 $1 000 $2 000 $3 000 $4 000 $5 000 Liquid assets Q3 '14 Q4 '14 Q1 '15 Q2 '15 12M $ m Undrawn committed credit lines Cash and equivalents LIQUID ASSETS AND SHORT-TERM DEBT MATURITY* 31 27 22 33 32 33 33 35 35 22 21 17 0% 5% 10% 15% 20% 25% 0 10 20 30 40 50 60 70 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Non-capitalized interest expense (lhs) Capitalized interest expense (lhs) Interest expense to EBITDA (rhs) * ST maturity payments without interest accrued ** Quarterly figures are derived by computational method on the basis of quarterly reports *** Maturity payments do not include interest payments $ m
  18. INVESTMENT PROGRAM 2014 922 1126 810 643 375 380 281 ~570 0 200 400 600 800 1000 1200 H1 2011 H2 2011 H1 2012 H2 2012 H1 2013 H2 2013 H1 2014 H2 2014P 18 INVESTMENT DYNAMICS INVESTMENT STRUCTURE IN 2014 $ m ~$850 m in 2014 • OVERALL INVESTMENTS IN 2014 – $850 M o Investments into Strategy 2017 projects: 35% of total investments ◦ Active phase of pelletizing plant construction at Stoilensky to start in H2 2014 ◦ Steel segment – PCI integration, steelmaking capacities development o Payments for projects realized in 2007-2012: 30% of total investments ◦ NLMK Kaluga ◦ All payments for projects 2007-2012 to be made in 2014 o Maintenance capex – 35% • SOURCE OF INVESTMENT FINANCING – OPERATING CASH FLOW 35% 30% 35% Столбец1 Maintenance capex 2007 - 2012 projects Strategy 2017 $850 m 49% 37% Столбец1 Foreign rolled products segment Mining segment Long products segment Steel segment $850 m
  19. Q3’14 OUTLOOK • MARKET o Russia and the USA – relatively stable demand and prices for steel products o Europe – seasonal slowdown in demand • STEEL PRODUCTION o Group crude steel production to grow by 5% q-o-q to 4.0 m t • FINANCIAL RESULTS o Financial results are expected at a level comparable to or marginally better than Q2 19
  20. CONTENT 1. Strategy implementation 2. Key results 3. Financial highlights  4. Segment results 20
  21. 83 214 187 153 262 353 20 23 40 12 7 52 215 227 190 228 209 185 26 -2 -2 -14 -33 -14 -26 -62 -35 30 23 19 -$100 $100 $300 $500 $700 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Foreign rolled product segment Other operations including intersegmental Mining segment Long products segment Steel segment SEGMENT RESULTS OVERVIEW 21 • STEEL SEGMENT o Strong market environment in the domestic market o Maintained spreads between prices for steel and raw materials o Efficiency improvement programs • LONG PRODUCTS SEGMENT o Seasonal growth in demand and prices for steel • MINING SEGMENT o Decline in iron ore prices • FOREIGN ROLLED PRODUCTS SEGMENT o Narrower spreads between prices for finished products and slabs o Higher sales volumes REVENUE FROM THIRD PARTIES BY SEGMENTSEGMENT RESULTS CHANGE $ m $ m 409 379 400 318 594 468 EBITDA BY SEGMENT 2013-2014 1 742 1 728 337 430 88 117 471 533 0 500 1 000 1 500 2 000 2 500 3 000 Q1'14 Q2'14 Steel segment Long products segment Mining segment Foreign rolled products segment 8% -3% 17% 13% 24% 35% -7% -2%Steel segment Mining segment Revenue Production expenses Revenue Revenue Revenue Production expenses Production expenses Production expenses Long products segment Foreign rolled products segment
  22. 1,66 1,68 1,53 1,60 1,74 1,73 0,35 0,37 0,47 0,21 0,30 0,27 0,08 0,21 0,19 0,15 0,26 0,35 0,0 0,5 1,0 1,5 2,0 2,5 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Revenue from intercompany sales Revenue from sales to third parties EBITDA 4,2% 10,4% 9,3% 8,5% 12,9% 17,6% EBITDA margin 23% 17% 6%5%5% 5% 5% 9% 15% 10% Iron ore materials Coke and coal Scrap Ferroalloys Other raw materials Electricity Natural gas Other energy resources Personnel costs Other expenses and changes in inventories Depreciation STEEL SEGMENT • INSIGNIFICANT Q2’14 TOTAL REVENUE DECLINE QOQ o Seasonal recovery in demand and price improvement in the domestic market o Lower sales volumes (-8% qoq) on the back of lower slab sales (-25% qoq) o Sales structure improvement: sales of rolled products increased by 9% qoq to 1.49 m t • EBITDA MARGIN INCREASED TO 18% o Widened spreads between prices for steel and raw materials o Efficiency improvement programs COST OF SALES, Q2’14SEGMENT REVENUE AND EBITDA SALES AND REVENUE FROM THIRD PARTIES $ bn 22 8% 7%7% 5% 8% 6% 16% 14% 15% 13% 26% 22% 21% 18% 39% 49% 33% 40% 6% 6% 0% 20% 40% 60% 80% 100% Sales Q2'14 Sales Q1' 14 Revenue Q2' 14 Revenue Q1' 14 Income from other operations* Pig iron Slabs HRC CRC Galvanized Pre-painted Dynamo Transformer 2.459 m t $1,728 m * Revenue from other products sales 2.665 m t $1,742 m
  23. 288 314 355 371 337 430 59 113 114 102 57 101 20 23 40 12 7 52 0 70 140 210 280 350 420 490 560 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Revenue from intra-group sales Revenue from third parties EBITDA 6% 5% 8% 3% 2% 10% EBITDA margin 62% 2% 1% 7% 8% 13% 6% Scrap Ferroalloys Other raw materials Electricity Personnel Other expenses Depreciation LONG PRODUCTS SEGMENT • SALES GROWTH BY 13% o Seasonal demand growth in the domestic market • EXTERNAL REVENUE GROWTH BY 28% o Sales volume growth o Favorable pricing environment • INTERSEGMENT REVENUE GROWTH o Intragroup scrap sales: increase in volumes and prices • EBITDA MARGIN UP TO 10% o Higher capacity utilization rates o Widened spreads between finished steel and scrap SEGMENT REVENUE AND EBITDA THIRD PARTIES SALES AND REVENUE STRUCTURE $ m 23 COST OF SALES IN Q2 ‘14 * Revenue from intra-group sales is represented mostly by ferrous scrap deliveries to the Lipetsk site 12% 12% 13% 14% 11% 12% 8% 10% 78% 76% 76% 75% 0% 20% 40% 60% 80% 100% Sales volume Q2'14 Sales volume Q1'14 Revenue Q2'14 Revenue Q1'14 Other operations* Long products Billets Metalware 644 k t $337 m * Revenue from other products $430 m732 k t
  24. 64% 65% 61% 65% 66% 60% EBITDA margin 92 100 86 94 88 117 245 249 226 259 229 189 215 227 190 228 209 185 0 100 200 300 400 500 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Revenue from intersegmental sales Revenue from third parties EBITDA 7% 21% 5% 26% 23% 17% Raw materials Electricity Natural gas Other energy resources Personnel Other expenses Depreciation MINING SEGMENT • REVENUE DECLINE BY 3% QOQ o Decline in iron ore prices (3-10% qoq) o Iron ore sales growth (3% qoq) to 4 m t ◦ 2.7 m t (-8% qoq) – to the Lipetsk site ◦ 1.3 m t (+39% qoq) – to third parties (63% to Russia and 37% to international markets) • EBITDA MARGIN DECLINE TO 60% o (-) Lower global iron ore prices o (+) Efficiency improvement program SALES AND REVENUE STRUCTURE 24 COST OF SALES IN Q2‘14 68% 76% 60% 69% 32% 24% 36% 25% 0% 20% 40% 60% 80% 100% Sales volumes Q2'14 Sales volumes Q1'14 Revenue Q2'14 Revenue Q1'14 Other operations* Iron ore sales to third parties Iron ore sales to Lipetsk site 3,871 kt $317 m$306 m4,004 kt * Other operations include limestone and dolomite sales SEGMENT REVENUE AND EBITDA $ m
  25. 817 730 750 445 471 533 -26 -62 -35 30 23 19 -3% -9% -5% 7% 5% 4% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% -200 0 200 400 600 800 1 000 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Revenue EBITDA EBITDA margin (r.h.) FOREIGN ROLLED PRODUCTS SEGMENT • SEGMENT SALES UP BY 16% QOQ o NLMK USA sales growth (+18% qoq) driven by favorable market conditions o NLMK Dansteel thick plate sales went up by 4% qoq • REVENUE UP BY 13% QOQ • PROFITABILITY DECLINE o Narrowed spreads between prices for slabs and rolled products NLMK USA SALES AND REVENUE STRUCTURE 25 $ m SEGMENT REVENUE AND EBITDA 56% 55% 48% 47% 29% 29% 30% 29% 14% 16% 16% 17% 6% 7% 0% 20% 40% 60% 80% 100% Sales Q2'14 Sales Q1'14 Revenue Q2'14 Revenue Q1'14 Other operations Pre-painted CRC HRC Semi-finished 458 k t $390 m$449 m540 k t
  26. APPENDICES 26Rate this presentation >>
  27. SALES GEOGRAPHY 27 • SALES IN Q2’14: 3.8 M T (0% QOQ) o Higher sales to the Russian market to 1.74 m t (+12% qoq) ◦ Flat steel sales 0.866 m t (+13% qoq) ◦ Long products sales 0.697 m t (+18% qoq) o Sales to export markets 2.10 m t (-9% qoq) ◦ Sales to Asia increased ◦ Insignificant reduction of sales to Europe and USA • IN H1’14 SALES: 7.70 M T (+2% YOY) o Sales to Russia increased to 3.29 m t (+20% yoy) o Sales to Europe (+14% yoy) and USA (+51% yoy) 1,46 1,55 1,74 0,66 0,74 0,71 0,25 0,24 0,24 0,67 0,75 0,64 0,25 0,07 0,160,28 0,52 0,36 0 1 2 3 4 Q4'13 Q1'14 Q2'14 Others SE Asia S.America M. East* EU Russia 1,05 1,04 1,20 0,40 0,45 0,490,15 0,15 0,150,48 0,51 0,640,15 0,27 0,45 0,28 0 1 2 3 Q4'13 Q1'14 Q2'14 Others SE Asia N. America M. East* EU Russia 2.50 $ bn 2.64 2.81 m t 3,57 3,87 Share in Q2’14 10% 2% 23% 5% 17% 43% * Incl. Turkey 3,84 STEEL PRODUCT SALES BY REGION REVENUE BY REGIONNLMK SALES TO THE RUSSIAN MARKET 74% 14% 12% 0% 20% 40% 60% 80% 100% Sales by industries in Q2'14 Pipe producers Machine building Construction and infrastructure 36% 50% 14% 0% 20% 40% 60% 80% 100% Sales by product type in Q2'14 Semi-finished Flat steel Long products and metalware by sector by product type
  28. 421 -8 450 -26 370 -28 -100 0 100 200 300 400 500 Revenue Q4'13 EBITDA Q4'13 Revenue Q1'14 EBITDA Q1'14 Revenue Q2'14 EBITDA Q2'14 FOREIGN ASSETS PERFORMANCE 28 NBH FINANCIAL RESULTS $ m NLMK USA AND NLMK DANSTEEL ROLLED PRODUCT SALES 0,25 0,25 0,30 0,12 0,13 0,16 0,08 0,07 0,080,09 0,10 0,10 0,54 0,56 0,64 0,00 0,10 0,20 0,30 0,40 0,50 0,60 0,70 0 0,1 0,2 0,3 0,4 0,5 Q4'13 Q1'14 Q2'14 HRC CRC Galvanized Thick plates (NLMK Dansteel) NBH ROLLED PRODUCT SALES 0,20 0,17 0,15 0,02 0,02 0,02 0,09 0,09 0,08 0,15 0,18 0,16 0,46 0,45 0,41 0,00 0,10 0,20 0,30 0,40 0,50 0 0,1 0,2 0,3 Q4'13 Q1'14 Q2'14 HRC CRC Coated Thick plates m t SLAB SALES BY THE STEEL SEGMENT 0,78 0,81 0,54 0,45 0,48 0,43 0,13 0,11 0,12 0,21 0,37 0,32 1,56 1,77 1,41 0,00 0,50 1,00 1,50 2,00 - 0,2 0,4 0,6 0,8 1,0 1,2 1,4 Q4'13 Q1'14 Q2'14 To third parties NBH NLMK Dansteel NLMK USA m t m t
  29. 29 CASH COST OF SLABS SLAB CONSOLIDATED CASH COST STRUCTURE (AT LIPETSK SITE) Cost item Q2’14 Q1’14 ∆,$/t Coke and coking coal $79 $78 -$1 Iron ore $56 $62 -$6 Scrap $32 $29 +$3 Other materials $30 $27 +$3 Electricity $19 $19 $0 Natural gas $20 $22 -$2 Personnel $28 $29 +$1 Other expenses $43 $43 $0 Total $308 $310 -$2 CASH COST OF SLABS (AT LIPETSK SITE), 2012-2014 Period $/t Q1’12 $395 Q2’12 $411 Q3'12 $383 Q4'12 $361 2012 $388 Q1'13 $364 Q2'13 $348 Q3'13 $329 Q4'13 $349 2013 $348 Q1'14 $310 Q2'14 $308
  30. 30 1 as of 30.06.2014 2 as of 31.03.2014 SEGMENT INFORMATION Q2 2014 (million USD) Revenue from external customers 1 728 533 430 117 0 2 808 2 808 Intersegment revenue 271 101 189 561 (561) Gross profit 466 24 74 208 (0) 771 (44) 727 Operating income/(loss) 207 (1) 23 168 (1) 396 (14) 382 as % of net sales 10% (0%) 4% 55% 12% 0% 14% Income / (loss) from continuing operations before minority interest 469 (13) (2) 99 0 555 (336) 219 as % of net sales 23% (2%) (0%) 32% 16% 0% 8% Segment assets including goodwill1 12 737 1 867 2 661 2 337 121 19 724 (3 860) 15 863 Q1 2014 (million USD) Revenue from external customers 1 742 471 337 88 0 2 638 2 638 Intersegment revenue 296 57 229 582 (582) Gross profit 406 32 21 226 (0) 684 (70) 614 Operating income/(loss) 128 3 (22) 193 (1) 301 (32) 269 as % of net sales 6% 1% (5%) 61% 9% 0% 10% Income / (loss) from continuing operations before minority interest 101 (7) (58) 204 (0) 241 (24) 217 as % of net sales 5% (1%) (15%) 65% 7% 0% 8% Segment assets including goodwill2 12 194 1 969 2 508 2 402 115 19 187 (3 981) 15 206 Totals Intersegmental operations and balances Consolidated Steel Foreign rolled products Long products Mining All other Totals Intersegmental operations and balances Consolidated Steel Foreign rolled products Long products Mining All other
  31. QUARTERLY DATA: CONSOLIDATED STATEMENT OF INCOME 31 Consolidated financial results are prepared based on US GAAP. Reporting periods of the Company are 3M, 6M, 9M and 12M. Quarterly figures (with the exception of Q1) are derived by computational method. Q2 2014 Q1 2014 H1 2014 H1 2013 (mln USD) + / - % + / - % Sales revenue 2 808 2 638 170 6% 5 446 5 685 (239) (4%) Production cost (1 869) (1 825) (44) 2% (3 694) (4 183) 488 (12%) Depreciation and amortization (212) (199) (13) 7% (411) (427) 16 (4%) Gross profit 727 614 113 18% 1 341 1 076 265 25% General and administrative expenses (84) (92) 8 (9%) (177) (231) 55 (24%) Selling expenses (225) (212) (13) 6% (437) (484) 47 (10%) Taxes other than income tax (35) (40) 5 (13%) (75) (69) (6) 9% Operating income 382 269 113 42% 651 291 360 124% Gain / (loss) on disposals of property, plant and equipment (3) (0) (3) 595% (4) (6) 2 (33%) Gains / (losses) on investments 4 (0) 4 4 (4) 7 (203%) Interest income 9 7 2 25% 16 22 (6) (29%) Interest expense (33) (32) (1) 3% (65) (58) (7) 12% Foreign currency exchange loss, net (62) 46 (108) (234%) (16) (32) 16 (50%) Other expense, net (11) (7) (5) 70% (18) (18) 0 (2%) Income from continuing operations before income tax 285 283 2 1% 567 195 372 190% Income tax (66) (65) (1) 1% (131) (127) (4) 3% Equity in net earnings/(losses) of associate (60) (44) (16) (105) 0 (105) Net income 159 173 (14) (8%) 331 68 263 384% Less: Net loss / (income) attributable to the non-controlling interest (0) 1 (1) 1 3 (2) (72%) Net (loss) / income attributable to OJSC Novolipetsk Steel stockholders 158 174 (15) (9%) 332 72 261 364% EBITDA 594 468 126 27% 1 063 718 345 48% Q2 2014/Q1 2014 H1 2014/H1 2013
  32. CONSOLIDATED CASH FLOW STATEMENT Consolidated financial results are prepared based on US GAAP. Reporting periods of the Company are 3M, 6M, 9M and 12M 2013. Quarterly figures (with the exception of Q1) are derived by computational method. 28 Q2 2014 Q1 2014 H1 2014 H1 2013 (mln. USD) + / - % + / - % Cash flow from operating activities Net income 159 173 (14) (8%) 331 68 263 384% Adjustments to reconcile net income to net cash provided by operating Depreciation and amortization 212 199 13 7% 411 427 (16) (4%) Loss on disposals of property, plant and equipment 3 0 3 595% 4 6 (2) (33%) (Gain)/loss on investments (4) 0 (4) (4) 4 (7) (203%) Interest income (9) (7) (2) 25% (16) (22) 6 (29%) Interest expense 33 32 1 3% 65 58 7 12% Equity in net ernings of associate 60 44 16 36% 105 (0) 105 Defferd income tax (benefit)/expense 27 (8) 36 (442%) 19 1 19 Loss / (income) on forward contracts (4) 6 (10) (165%) 2 8 (6) (74%) Other movements 7 (6) 13 (216%) 1 62 (61) (98%) Changes in operating assets and liabilities Increase in accounts receivables 72 (228) 300 (132%) (156) (122) (34) 28% Increase in inventories 102 230 (128) (56%) 332 101 231 229% Decrease/(increase) in other current assets 3 (11) 13 (126%) (8) 2 (10) (517%) Increase in accounts payable and oher liabilities (23) (3) (20) 686% (26) (35) 9 (26%) Increase/(decrease) in current income tax payable (10) 13 (23) (172%) 4 24 (20) (85%) Cash provided from operating activities 630 1 066 581 485 83% Interest received 9 5 3 60% 14 14 Interest paid (20) (40) 20 (50%) (61) (61) Net cash provided from operating activities* 618 401 217 54% 1 019 581 438 75% Cash flow from investing activities Proceeds from sale of property, plant and equipment 3 4 (1) (21%) 6 1 5 390% Purchases and construction of property, plant and equipment (151) (131) (20) 15% (281) (375) 94 (25%) Proceeds from sale / (purchases) of investments, net 11 (69) 81 (116%) (58) 9 (67) (Placement) / withdrawal of bank deposits, net (139) (183) 44 (24%) (323) 0 (323) Acquisition of additional stake in existing subsidiary (10) 10 (100%) Net cash used in investing activities (276) (380) 104 (27%) (655) (374) (281) 75%0 Cash flow from financing activities Proceeds from borrowings and notes payable 9 2 7 366% 11 1 214 (1 203) (99%) Repayments of borrowings and notes payable (144) (149) 5 (3%) (293) (1 065) 772 (73%) Capital lease payments (6) (6) 0 (2%) (11) (13) 1 (9%) Dividends to shareholders (111) (0) (111) (111) (111) (0) 0% Net cash used in financing activities (252) (152) (99) 65% (404) 26 (430) Net increase / (decrease) in cash and cash equivalents 91 (131) 222 (169%) (40) 232 (273) (117%) Effect of exchange rate changes on cash and cash equivalents 18 (9) 28 (303%) 9 58 (48) (84%) Cash and cash equivalents at the beginning of the period 830 970 (140) (14%) 970 951 19 2% Cash and cash equivalents at the end of the period 939 830 109 13% 939 1 241 (302) (24%) Q2 2014/Q1 2014 H1 2014/H1 2013
  33. 33 CONSOLIDATED BALANCE SHEET as at 30.06.2014 as at 31.03.2014 as at 31.12.2013 as at 30.09.2013 as at 30.06.2013 as at 31.03.2013 as at 31.12.2012 (mln. USD) ASSETS Current assets 5 138 4 966 5 102 4 918 5 537 5 834 5 469 Cash and cash equivalents 939 830 970 835 1 241 1 220 951 Short-term investments 792 753 485 516 121 271 107 Accounts receivable, net 1 561 1 544 1 438 1 540 1 497 1 557 1 491 Inventories, net 1 735 1 731 2 124 1 897 2 530 2 689 2 827 Deferred income tax assets 96 90 78 120 121 71 63 Other current assets, net 16 17 8 9 27 25 30 Non-current assets 10 725 10 241 11 182 11 388 12 101 12 677 12 988 Long-term investments, net 466 443 501 552 17 20 19 Property, plant and equipment, net 9 610 9 162 10 003 10 163 10 981 11 442 11 753 Intangible assets 93 110 116 121 129 136 142 Goodwill 452 428 463 468 753 776 786 Other non-current assets, net 62 39 40 32 31 36 38 Deferred income tax assets 43 58 59 50 189 266 250 Total assets 15 863 15 206 16 284 16 305 17 638 18 510 18 458 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities 2 307 2 242 2 317 1 760 2 647 2 940 3 302 Accounts payable and other liabilities 1 125 1 068 1 176 1 104 1 609 1 412 1 462 Short-term borrowings 1 157 1 141 1 119 616 994 1 484 1 816 Current income tax liability 25 33 22 40 44 45 24 Non-current liabilities 3 329 3 361 3 693 4 147 4 695 4 678 4 065 Long-term borrowings 2 676 2 743 3 038 3 508 3 792 3 459 2 816 Deferred income tax liability 602 566 599 578 746 765 792 Other long-term liabilities 51 52 55 61 157 454 457 Total liabilities 5 635 5 603 6 009 5 906 7 342 7 619 7 367 Stockholders’ equity Common stock 221 221 221 221 221 221 221 Statutory reserve 10 10 10 10 10 10 10 Additional paid-in capital 257 257 257 257 257 257 306 Other comprehensive income (2 159) (2 739) (1 897) (1 772) (1 736) (1 224) (997) Retained earnings 11 873 11 829 11 655 11 676 11 538 11 620 11 582 NLMK stockholders’ equity 10 202 9 579 10 247 10 392 10 290 10 885 11 123 Non-controlling interest 26 25 28 7 6 7 (33) Total stockholders’ equity 10 228 9 603 10 275 10 399 10 296 10 892 11 090 Total liabilities and stockholders’ equity 15 863 15 206 16 284 16 305 17 638 18 510 18 458
  34. NLMK Investor Relations Russia, 115054, Moscow 18, Bakhrushina str, bldg 1 t. +7 495 915 15 75 f. +7 495 915 79 04 www.nlmk.com tahiev_sa@nlmk.com

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