презентация для инвесторов, август 2011

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презентация для инвесторов, август 2011

  1. 1. 1Corporate PresentationAugust 2011
  2. 2. 2Evraz Group 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◦ 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; market capitalisation approx. US$12 billion
  3. 3. 3Evraz’s Global Business
  4. 4. 4 2010 SummaryUS$ mln unless otherwise stated 2010 2009 ChangeRevenue 13,394 9,772 37%Gross profit 3,075 1,648 87%Adjusted EBITDA* 2,350 1,237 90%Adjusted EBITDA margin 18% 13%Net Profit/(Loss)* 532 (292)EPS (US$ per GDR) 1.32 (0.73)Net Debt** 7,127 7,230 (1.4)%Short-term Debt** 714 1,992 (64)%Steel sales volumes*** (’000 tonnes) 15,506 14,282 9%* Adjusted EBITDA represents profit from operations plus depreciation and amortisation, impairment of assets, revaluation deficit, 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** As at the end of the reporting period*** Here and throughout this presentation segment sales data refers to external sales unless otherwise stated
  5. 5. 5 2010 Financial Highlights Consolidated Revenue by Segment ◦ Significant growth in revenues and EBITDA as a result US$ mln of strong market recovery 18,000 13,394 ◦ Both prices and volumes contributed to revenue 15,000 9,772 815 566 2,507 growth 12,000 765 363 ◦ Steel products remain the predominant source of 9,000 1,456 revenue, but EBITDA is increasingly generated by 6,000 8,978 12,123 mining segment due to higher relative growth of iron 3,000 ore and coking coal prices 0 (1,790) (2,617) -3,000 2009 2010 Steel Mining Vanadium Other operations Eliminations Revenue Drivers Consolidated Adjusted EBITDAUS$ mln US$ mln16,000 2,800 2,350 13,394 19014,000 2,266 2,400 5312,000 1,356 2,000 93510,000 1,237 1,600 8,000 1,200 167 6,000 279 9,772 800 4,000 1,439 400 927 2,000 0 0 (12) (124) (267) 2009 Revenue Volumes Prices 2010 Revenue -400 2009 2010 Steel Mining Vanadium Other operations Unallocated & Eliminations
  6. 6. 6 1Q 2011 Performance◦ 1Q11 Steel Segment revenue amounted to US$3,128 Consolidated Revenue and EBITDA million, Mining Segment - US$262 million, Vanadium US$ mln Segment – US$133 million and Other revenues 4,500 3,894 4,000 3,665 reached US$371 million (incl. US$83 mln from 3,500 3,409 3,350 2,970 rendering of services) 3,000◦ Iron ore sales (incl. intersegment shipments) totalled 2,500 2,000 5.2 mt vs 4.2mt in 1Q10 1,500 1,000 730 612 584 740◦ Coal sales (incl. intersegment shipments) were 2.1 mt, 500 424 0 including 0.6 mt of raw coking coal and 1.2 mt of 1Q10 2Q10 3Q10 4Q10 1Q11 coking coal concentrate, compared to 2.5mt, 0.9 mt Revenue EBITDA and 0.9 mt respectively Steel Sales Volumes Steel Sales ‘000 tonnes US$ mln4,500 3,870 3,870 3500 3,1284,000 116 158 189 3000 1353,500 200 282 645 743 2,3683,000 2500 69 455 6822,500 508 255 20002,000 437 447 1,200 15001,500 1,289 336 1000 1,0031,000 706 500 1,265 972 500 565 579 0 0 1Q10 1Q11 1Q10 1Q11 Semi-finished products Construction products Railway products Semi-finished products Construction products Railway products Flat-rolled products Tubular products Other steel products Flat-rolled products Tubular products Other steel products
  7. 7. 72Q 2011 Operational Results ◦ Steel product mix shifted more in favour of finished goods ◦ Prices for almost all product groups increased as a result of stronger demand and higher raw materials prices ◦ Coking coal production decreased compared to the previous quarter due to the ongoing operational issues at some of the Yuzhkuzbassugol mines ‘000 tonnes Production of Rolled Products by Quarters 1,400 1,200 1,000 800 600 400 200 0 Semi-f inished Construction Railw ay products Flat-rolled Tubular products Other steel products products products products 2Q10 3Q10 4Q10 1Q11 2Q11
  8. 8. 8 Group Cost Dynamics Cash Cost*, Slabs & Billets◦ EVRAZ’s high level of vertical integration into iron ore US$/t and coking coal helped to partially mitigate negative 500 441 459 437 479 impact of escalating prices of input materials on 378 411 364 steelmakers’ costs 400 354 317 350 438 298◦ Consolidated cost is approx. 50% Rouble 300 349 371 355 246 256 265 333 356 369 395 denominated. Rouble appreciation largely 200 294 271 280 responsible for cash cost increase in 2009 200 179 216◦ Increased costs in 2010 reflected mostly growth of 100 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 non-controllable costs, such as raw materials and Slab Billet utilities *Average for Russian steel mills, integrated cash cost of production, EXW Consolidated Cost of Revenues by Cost Elements Cost of Revenue, Controllable vs. Non-controllable Costs 2010, % 2009, % US$ mln of total CoR of total CoRRaw materials, including 33% 24% 12,000 565 10,319 Iron ore 6% 3% 10,000 1,630 Coking coal 10% 6% 8,124 Scrap 12% 10% 8,000 Other raw materials 5% 5% 6,000Semi-finished products 6% 6%Transportation 6% 7% 4,000Staff costs 11% 11% 2,000Depreciation 14% 18%Electricity 5% 4% 0Natural gas 3% 3% CoR 2009 Non-controllable Controllable CoR 2010Other costs 22% 27% Controllable: staff costs, purchased semis, auxilliary materials, services Non-controllable: raw materials, energy, transportation, depreciation, movement in stock Source: Management accounts
  9. 9. 9 FCF Generation◦ Positive free cash flow generation despite significant CAPEX◦ Increase in working capital due to higher level of activity and higher pricesUS$ mln 3,0002,500 2,3822,000 (379) 1,6621,500 (341)1,000 (623) 500 75 282 (832) 0 EBITDA (excl. Changes in Income tax paid CF from Interest paid & Capex CF from Free cash flow* non-cash items) WC, excl operating covenant reset investing income tax activities charges activities (excl. capex)*Free cash flow comprises cash flows from operating activities less interest paid, covenant reset charges and cash flows from investing activities
  10. 10. 10 Liquidity and Debt Maturity Profile Total debt of approx. US$7.8 billion as of 31 March 2011 Refinancing steps significantly strengthened liquidity profile and demonstrated EVRAZ’s ready access to debt markets: ○ In April 2011, EVRAZ issued US$850 million bonds due 2018 at an interest rate of 6.75%, the lowest ever coupon for EVRAZ Eurobond issues ○ Part of the proceeds from the issue was used to purchase approx. US$622 million in aggregate principal amount of the outstanding bonds due 2013 ○ In June, Evraz issued a 20 billion 5-year rouble bond (approx. US$710 million) at 8.40% ○ In June, Evraz incentivised conversion of US$648 million in principal amount of convertible bonds due 2014 EVRAZ ratings upgraded: S&P to B+, Stable; Moody’s to B1, Positive; Fitch to BB-, Positive) Refinancing remains a priority; targeting net debt/EBITDA ratio below 2 in the medium term Leverage Debt* Maturities Schedule Debt* Maturities Schedule Leverage xUS$ mln US$ mln (as of end June 2011) (as of end June 2011)12,500 7.0 5.8 9,986 6.0 2,00010,000 8,482 7,873 7,923 7,811 5.0 3.8 1,500 7,500 4.0 3.0 2.4 3.0 5,000 1,000 1.5 2.0 2,500 500 1.0 3,922 3,937 1,992 1,740 714 0 0.0 0 FY08 1H09 FY09 1H10 FY10 2011 2012 2013 2014 2015 2016 2017 2018 Total Debt Short-term Debt IFRS Net Debt/LTM EBITDA •Principal debt (excl. interest accrue) Note. Debt for covenant compliance is calculated differently from IFRS Source: Management accounts
  11. 11. 11 Steel: CIS Steel Product Sales, Domestic vs. Export ◦ Full utilisation of Russian and Ukrainian steelmaking ‘000 tonnes capacities maintained throughout the year 11,084 12,000 ◦ In 2010 domestic steel sales accounted for 58% of EVRAZ’s 10,737 Russian and Ukrainian mills’ steel sales compared to 44% in 10,000 2009, reflecting improving demand in the CIS market and the 8,000 42% 56% shift to sales of higher margin products ◦ Market share increased in domestic sales through own 6,000 distributors 4,000 ◦ Prices of key products strengthened in response to demand 2,000 44% 58% recovery and growth in raw material prices ◦ EVRAZ reached long-term agreement with Russian Railways in 0 2009 2010 2H 2010 to supply rails at price formula based on the scrap Domestic Export price, thereby protecting segment’s margins going forward Steel Product Sales Volumes Steel Product Revenues‘000 tonnes 11,08412,000 Revenue, Revenue per tonne, 10,737 Products 757 796 US$m US$10,000 1,193 1,497 8,000 2009 2010 2009 2010 3,637 4,373 6,000 Semi-finished 1,972 2,307 383 522 4,000 Construction 1,782 2,793 490 639 5,150 4,418 2,000 Railway 737 1,082 618 723 0 2009 2010 Other steel 417 525 551 652 Total 4,908 6,707 457 605 Semi-finished Construction Railway Other steel
  12. 12. 12 Steel: North America ◦ Gradual recovery in demand driven by economic improvements and the onset of regional governments’ infrastructure spending ◦ Shale gas exploration projects generate strong demand for small diameter pipe ◦ Sales volumes of steel products increased by 26% ◦ Flat-rolled steel volumes increased by 31%; tubular products by 40% ◦ Pricing of steel products generally follows scrap price trends Steel Product Sales Volumes Steel Product Revenues‘000 tonnes3,000 Revenue, Revenue per tonne, 2,607 Products2,500 US$m US$ 2,075 9232,000 2009 2010 2009 2010 6601,500 Construction 227 302 665 776 9041,000 688 Railway 369 368 957 941 500 386 391 Flat-rolled 553 798 804 883 341 389 0 2009 2010 Tubular 1,004 1,308 1,522 1,417 Construction Railway Flat-rolled Tubular Total 2,153 2,776 1,038 1,065
  13. 13. 13 Steel: Europe, South Africa Steel Product Sales Volumes,◦ EVRAZ’s European mills sales volumes increased by ‘000 tonnes European Operations 36% 1,400◦ Flat-rolled product sales registered 35% volume rise 1,200 1,206 155 and 61% increase, largely reflecting improvement in 1,000 885 the European market 800 109◦ The shutdown of steelmaking at EVRAZ Vitkovice 600 400 776 1,051 Steel in 2H 2010 had no material economic impact 200 on EVRAZ’s production volumes and costs 0◦ Sales of EVRAZ Highveld’s steel products were 2009 2010 Flat-rolled Other effectively flat as domestic demand in the South African market remained weak Steel Product Revenues Steel Product Sales Volumes, South African Operations Revenue, Revenue per tonne, ‘000 tonnesProducts US$m US$ 700 2009 2010 2009 2010 610 586 600 81 European Operations 132 500Flat-rolled 482 778 622 740 400Other 93 129 857 831 338 300 294Total 575 907 650 752 200 South African OperationsConstruction 114 138 712 721 100 160 191Flat-rolled 205 257 695 762 0 2009 2010Other 52 48 397 600 Construction Flat-rolled OtherTotal 371 443 633 727
  14. 14. 14 Coal Mining ◦ Volumes of coking coal mined in 1H 2010 decreased due to lengthy repositioning of longwall at Ulyanovskaya mine ◦ 3Q 2010 volumes were also depressed due to the implementation of additional workplace safety measures; 4Q 2010 volumes returning to normalised levels ◦ Cash cost in 2Q-3Q 2010 higher due to fixed cost impact on lower volumes ◦ Coking coal self-coverage to increase over the next three years by developing existing deposits and reducing coking coal consumption through the implementation of pulverised coal injection technology Washed Coking Coal (Concentrate) Self-Coverage* Washed Coking Coal (Concentrate) Self-Coverage* Cash Cost, Russian Coking Coal‘000 tonnes US$/t 137% 125% 90% 80% 806,000 5,288 4,7955,000 4,218 60 4,053 4,0214,000 3,501 3,642 3,2293,000 402,000 201,000 100%** 78%** 54%** 62%** 0 0 1H09 2H09 1H10 2H10 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 Consumption Production Coking coal concentrate* Self-coverage, %= total production (plus 40% of Raspadskaya production) divided by total steel segment consumption** Self-coverage excl. 40% Raspadskaya share
  15. 15. 15 Iron Ore Mining ◦ Iron ore production increased from 18.8 million tonnes in 2009 to 19.8 million tonnes in 2010 ◦ Self-coverage in iron ore was maintained at around 100% ◦ Cash costs increased in line with general cost inflation ◦ Investment in mine development to maintain or improve self-coverage Iron Ore Self-Coverage* Iron Ore Self-Coverage* Cash Cost, Russian Iron Ore Products‘000 tonnes US$/t 99% 96% 90% 102%12,000 8010,000 60 8,000 6,000 40 8,809 10,397 10,635 9,981 8,859 9,955 9,608 10,191 4,000 20 2,000 0 0 1H09 2H09 1H10 2H10 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 Consumption Production Iron ore products, 58% Fe* Self-coverage, %= total production divided by total steel segment consumption
  16. 16. 16 Vanadium Vanadium Prices, FeV, LMB ◦ Significant improvement in global demand for US$/kg V vanadium 40 ◦ Acquisition in 2009 of Vanady-Tula, Russia’s largest ferrovanadium producer, signals further expansion of 30 vanadium processing capacity ◦ Sales of finished vanadium products increased vs. 20 2009 by 70% to US$492m ◦ EVRAZ’s vanadium processing capacities are fully 10 utilised Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Vanadium Products Sales Volumes * Vanadium Products Sales Volumes * Vanadium Products Revenues* by Region‘000 tonnes of V US$ mln 25.0 23 19.8 67 20.0 18.1 72 15.0 11.6 16.7 10.0 134 5.0 6.5 236 3.1 0.0 2009 2010 Vanadium in slag Vanadium in alloys and chemicals Russia & CIS Europe Americas Asia Africa & RoW * External sales
  17. 17. 17Growth Strategy Enhancement of raw material base◦ Development of a coal deposit in Yerunakovsky region of Kuzbass◦ Exploration of the Mezhegey coal deposit◦ Increase ‘in-house’ iron ore production and supplementary exploration at existing sitesIncrease in steel production volumes◦ Reconstruction of 4th converter and 3rd slab machine at NTMK increased crude steel output by up to 0.5 mtpa◦ Considering construction of a second converter shop at NTMK with additional crude steel capacity of 1.5-2.0 mtpa◦ Expansion of steel capacity in North America by 0.26 mtpaStrengthening presence in our key markets◦ Construction of new rolling facilities in regions where demand is growing (South Russia and Kazakhstan)◦ Consolidation of our steel distribution network in the CIS◦ Modernisation of rail mills enabling production of high value-added products◦ Upgrade of wheel shops◦ Considering 50% increase in plate mill capacity at EVRAZ Palini e Bertoli from 0.4 mtpa up to 0.6 mtpa Cost-saving measures◦ Implementation of pulverised coal injection projects at Russian steel mills to eliminate use of natural gas in blast furnaces and reduce consumption of coking coal. Additional effect will be an increase in pig iron production volumes and, therefore, crude steel production◦ Implementation of LEAN business principles at all EVRAZ operations◦ Conversion of EVRAZ Highveld furnace into open slag bath in order to decrease energy and coking coal consumption
  18. 18. 18 CAPEX Dynamics ◦ Return to investment in modernisation projects and mine development in 2010 ◦ Further growth budgeted for 2011US$ mln1,500 1,2401,200 1,103 900 832 600 441 300 0 2008 2009 2010 2011F Investment projects* Iron ore mine development Coal mine development ** Maintenance, Steel and other operations* 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
  19. 19. 19 Key Investment ProjectsProject Total Cum CAPEX 2011 Project Targets CAPEX by 31.12.2010 CAPEXReconstruction of rail mill at $485m $225m $130m ◦ Capacity of 950k tonnes of high-speed rails, includingNKMK 450k tonnes of 100 metre rails ◦ On-stream by 2013Reconstruction of rail mill at $60m $40m $20m ◦ Production of higher-quality railsNTMK ◦ 550k tonnes capacity ◦ On-stream by 2012Pulverised coal injection (PCI) $320m $40m $175m ◦ Lower coke consumption from 420 to 320 kg/tonneat NTMK and ZSMK ◦ No need for gas consumption ◦ On-stream by 2013Reconstruction of mechanical $40m $8m $25m ◦ Production of higher-quality wheelsarea at NTMK wheel & tyre ◦ On-stream by 2011millConstruction of Yuzhny and $260m $0m $80m ◦ Capacity: 450 ktpa of construction products each millKostanay rolling mills ◦ On-stream by mid-2013Expansion of Kachkanar mine $80m $0m $50m ◦ Iron ore production to be increased to 55 mtpa ◦ On-stream by 2012Development of Mezhegey TBD $70m* $27m ◦ Maintaining self-sufficiency in high-quality hard cokingand Eastern field coal coal after depletion of existing depositsdeposits (Tyva, Russia) ◦ On-stream by 2015 and 2021 respectively * Acquisition of Mezhegey and Mezhegey East licences
  20. 20. 20 Recent Market Developments Evraz Selling Prices◦ Volumes in key products and markets are stable US$/t 1,200◦ Current steel-making capacity utilisation: 1,100 ◦ Russia and Ukraine - 100% 1,000 900 ◦ North America – 100% 800 700 ◦ Czech Republic - 70% 600 500 ◦ South Africa - 70% 400 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11◦ Steel prices have stabilised or are increasing Slabs, Russia, export* Billets, Russia, export*◦ Iron ore prices have slightly decreased in the recent Rebars, Russia, FCA * Weighted average contract prices Plate, North America, FCA weeks but are still at levels above 2010 average◦ Coking coal concentrate prices in Russia are Raw Material Prices (Domestic Markets) still holding Raw Material Prices (Domestic Markets) US$/t◦ Vanadium prices are at the level of 29 $/kg 500 400 300 200 100 0 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Scrap, Russia, CPT Scrap, USA, CPT Iron ore concentrate, Russia, ExW Coking coal concentrate, Russia, FCA Source: Metall Expert
  21. 21. 21Consumption of Construction Steel in Russia 12,0 120 11,0 100 10,0 9,0 80 million square meters 8,0 million tpa 7,0 60 11,1 10,7 6,0 10,1 10,2 9,5 9,2 8,3 40 5,0 4,0 6,2 20 3,0 2,0 0 2007 2008 2009 2010 2011(f) 2012(f) 2013(f) 2014(f) Consumption of Construction Steel in Russia (Rebar, Beams, Angles, Channels) Buildings completions, million square metrsRecovery of construction steel product consumption began in 2010Russian demand for construction steel is expected to be more than 10% higher in 2011 than in 2010 Sources: Rosstat, Metal Courier, Rusmet, Management estimates
  22. 22. 22Russian Government Infrastructure SpendingThe Russian Government plans to spend US$30bn on capitalinvestments in 2011, including US$23bn on construction, RF Capital Investments in 2011thereby significantly impacting demand for construction steel US$bn 35Ongoing programmes include: 30 ○ New construction related to Sochi 2014 26 26 ○ Infrastructure development for APEC summit in 20 21 Russian Far East in 2012 18 ○ Academic city in Yekaterinburg 13 11 ○ Russian Far East development programme 9 ○ Transport system development ○ Energy generation plant in Novovoronezhsk 0 2006 2007 2008 2009 2010 2011Confirmed projects expected to start in 2011 include: ○ Highway construction between Moscow and St. Petersburg Construction Spending in 2011 ○ Innovations centre at Skolkovo ○ Fourth motorway ring around Moscow 23% 30%Russia has committed to invest $50bn in preparation for the2018 FIFA World Cup, including $3.8bn on stadiums and$11bn on infrastructure projects. EVRAZ estimates that 2018 5%World Cup steel requirements for construction of stadiums(13 to be built and 3 to be renovated), hotels and localinfrastructure (highways, bridges) may amount to 2-2.5 mt 16% 12%As a premier producer of construction products in Russia, 14%EVRAZ is well positioned to benefit from these extensive Infrastructure Housing for the militaryinfrastructure investments Residential housing Healthcare, education, recreational objects Power objects Other Sources: Federal Capital Investment Programme, Morgan Stanley
  23. 23. 23OutlookHigh input prices and growing demand should provide support for steel prices across our operations2Q 2011 EBITDA is expected to be in the range of US$875-950 millionNet debt/LTM EBITDA expected in the range of 2.18-2.25 on 30 June 2011 – below the threshold imposedby debt covenants, gives greater flexibility in the execution of Company’s strategic plansEVRAZ is considering listing alternatives to its existing GDR programmeAudited 1H 2011 financial results are to be published on or around 12 October 2011
  24. 24. 24SummaryThe markets for our products continues to recover, particularly the Russian constructionsteel marketEVRAZ benefits from enhanced steel prices with limited exposure to rising rawmaterial pricesMuch improved liquidity position following refinancing focus in 2010, further deleveraging expectedRenewed investment in production modernisation and product quality set to bear fruit in 2011and beyondCompany now on sound footing to achieve further growth
  25. 25. 25Appendices
  26. 26. 26 2Q 2011 Rolled Products Output by Assets Russia North America‘000 tonnes ‘000 tonnes3,000 800 149 148 162 158 146 7002,500 71 75 77 75 387 81 430 349 353 421 600 2192,000 259 199 500 216 235 923 1,020 1,0031,500 967 1,034 400 264 2991,000 300 226 215 203 1,281 1,107 1,162 1,231 200 500 1,027 94 94 117 116 129 100 0 94 93 89 80 69 0 2Q10 3Q10 4Q10 1Q11 2Q11 2Q10 3Q10 4Q10 1Q11 2Q11Semi-f inished products Construction products Railw ay products Flat-rolled products Other steel Construction products Railw ay products Flat-rolled products Tubular products Europe South Africa‘000 tonnes ‘000 tonnes 400 200 180 350 36 6 7 160 8 16 300 4 9 7 5 140 7 250 120 79 200 100 71 85 274 302 303 85 90 150 266 247 80 60 100 40 54 40 47 50 49 43 20 49 29 31 32 35 28 17 0 0 7 11 2Q10 3Q10 4Q10 1Q11 2Q11 2Q10 3Q10 4Q10 1Q11 2Q11 Construction products Flat-rolled products Other steel products Semi-f inished products Construction products Flat-rolled products Other steel
  27. 27. 27 Steel Products: Sales by Market’000 tonnes US$ mln 6,000 4,000 5,665 5,543 3,641 3,500 5,000 4,424 3,000 4,123 2,802 4,000 2,364 2,500 2,299 2,147 2,147 3,000 2,000 2,662 1,500 2,073 2,000 1,472 1,018 1,000 1,215 872 602 696 1,000 406 642 500 343 376 563 533 0 0 Russia CIS Europe Americas Asia Africa & Russia CIS Europe Americas Asia Africa & RoW RoW 2009 2010 2009 2010
  28. 28. 28 Revenue: Geographic Breakdown 2009 2010 Other Africa & RoW Other Africa&RoW Asia 3% 4% Philippines Asia Philippines 5% 2% 4% 3% Taiwan Taiwan 3% 2% Thailand Thailand Russia 4% 3% 31% Russia China 34% China 3% 5% Middle East 5%Middle East 8% Europe Ukraine 2% 10% Other CIS Europe 3% Ukraine 9% 4% Other CIS Americas Americas 4% 25% 24%
  29. 29. 29Cost Structure by Segment Cost Structure of Steel Segment Cost Structure of Steel Segment Cost Structure of Mining Segment Cost Structure of Mining Segment 13% 13% 9% 8% 4% 19% 6% 24% 8% 9% 5% 7% 4% 15% 16% 9% 10% 21% 17% 11% 15% 13% 14% 28% 25% 9% 19% 9% 9% 14% 8% 9% 2009 2010 2009 2010Iron ore Coking coal Scrap Raw materials Transportation Staff costsOther raw materials Semi-finished products Transportation Depreciation Energy OtherStaff Depreciation EnergyOther Cost Structure of Vanadium Segment Cost Structure of Vanadium Segment 24% 25% 10% 14% 9% 9% 11% 12% 46% 40% 2009 2010 Raw materials Staff costs Depreciation Energy Other
  30. 30. 30 Domestic Steel Sales and Price Dynamics kt $/t1,600 1,500 1,2001,200 900 800 600 400 300 0 0 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 Flat Products (lhs) Long Products (lhs) HRC Domestic Rebar Domestic Price (rhs) Sources: Metal Courier, Morgan Stanley
  31. 31. 31DisclaimerThis 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 oracquire securities of EVRAZ Group S.A. (EVRAZ) or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity. Nopart 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 orinvestment decision whatsoever. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placedon, 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 thisdocument or its contents or otherwise arising in connection with the document.This communication is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) investmentprofessionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) highnet worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all suchpersons together being referred to as “relevant persons”). Any person who is not a relevant person should not act or rely on this document or anyof its contents.This document contains “forward-looking statements”, which include all statements other than statements of historical facts, including, withoutlimitation, 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 tobe 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 abilityto 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 our shares or GDRs, financial risk management and the impact of general business and globaleconomic conditions.Such forward-looking statements are based on numerous assumptions regarding EVRAZ’s present and future business strategies and theenvironment in which EVRAZ Group S.A. will operate in the future. By their nature, forward-looking statements involve risks and uncertaintiesbecause they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speakonly as at the date as of which they are made, and EVRAZ expressly disclaims any obligation or undertaking to disseminate any updates orrevisions to any forward-looking statements contained herein to reflect any change in EVRAZ’s expectations with regard thereto or any change inevents, 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 ofthe 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.
  32. 32. 32+7 495 232-13-70 IR@evraz.com www.evraz.com

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