Презентация для инвесторов, ноябрь - декабрь 2012

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Презентация для инвесторов, ноябрь - декабрь 2012

  1. 1. Investor PresentationNovember - December 2012
  2. 2. EVRAZ in brief One of the largest vertically integrated steel and mining companies in the world Leader in the Russian and CIS construction and railway product markets One of the leading producers in the global vanadium market Top-20 steel producer in the world based on crude steel production of 16.8 million tonnes in 2011 15.5 million tonnes of steel products sold in 2011 2011 consolidated revenue of US$16.4 billion, EBITDA of US$2.9 billion; H1 2012 revenue of US$7.6 billion, EBITDA of US$1.2 billion Total debt as at 30 June 2012 of US$7.8 billion, net debt/LTM EBITDA of 2.5x Re-domiciliation in the UK and share listing in the Premium segment of the London Stock Exchange since 7 November 2011 Constituent of FTSE 100 index since December 2011 and the only steel stock in UK FTSE All-Share index In May 2012 EVRAZ was included in MSCI UK and MSCI World IndicesInvestor Presentation, November - December 2012 1
  3. 3. Global operating model 150 Russia/CIS 1,313 100 3,730 529 Europe 122 580 1,717 North America Asia 231 H1 2012 steel sales volume South America Africa H1 2012 steel sales volume by geography by product Africa and RoW Other 4% Tubular 4% 5% Semi- finished Russia & Asia CIS Steel mills 22% 22% Flat-rolled 48% Iron ore mining 18% Coal mining Vanadium Americas Railway Construction 17% Sea ports 14% 37% Europe 8% Mezhegey coal mine in development # Third party steel products sales* (Kt), H1 2012 # Internal supply of slabs and billets from Russian steel mills (Kt) * Excluding routes with sales volumes below 50kt each, together totalling 93ktInvestor Presentation, November - December 2012 2
  4. 4. H1 2012 summaryUS$ million unless otherwise stated H1 2012 H1 2011 Change Revenue 7,619 8,380 (9)% EBITDA1 1,175 1,629 (28)% EBITDA margin 15.4% 19.4% (21)% Net profit/(loss) (50) 263 (119)% Dividends for the period (cents/ordinary share) 11c 6.7c 64% Operating cash flow 1,089 1,594 (32)% Capex 565 462 22% Net debt2 6,070 6,442 (6)% Short-term debt2 1,550 626 148% Steel sales volumes3 (‘000 t) 7,713 7,946 (3)%1 EBITDA represents profit from operations plus depreciation, depletion and amortisation, impairment of assets, foreign exchange loss (gain) and loss (gain) on disposal of property, plant and equipment and intangible assets2 As at 30 June 2012 and 31 December 2011 respectively; short-term debt includes current portion of finance lease liabilities, including lease liabilities directly associated with disposal groups classified as held for sale3 Here and throughout this presentation segment sales data refer to external sales unless otherwise statedInvestor Presentation, November - December 2012 3
  5. 5. H1 2012 financial highlights Consolidated revenue by segment, $m The major factor of the decrease in revenue was reduced steel sales volumes and prices 8,380 482 Decrease in revenues and EBITDA was also 320 541 7,619 2,040 263 a result of lower Mining segment contribution 1,383 Other operations because of lower raw materials volumes and Vanadium prices 7,492 Mining 7,019 Steel Eliminations (1,954) (1,587) H1 2011 H1 2012Revenue drivers, $m Consolidated EBITDA by segment*, $m 1,629 8,380 80 7,619 1,175 (437) Vanadium & Other 962 (324) 98 operations Mining 417 Steel Unallocated & 744 699 Eliminations (157) (39) H1 2011 Revenue Volumes Prices H1 2012 Revenue H1 2011 H1 2012 * Vanadium & Other operations consists in H1 2011 of $(3)m Vanadium segment EBITDA and $83m of Other operations EBITDA and in H1 2012 of $4m and $94m respectivelyInvestor Presentation, November - December 2012 4
  6. 6. Group cost dynamics EVRAZ benefits from high level of vertical integration in iron ore and coking coal Costs were positively impacted by rouble devaluation in H1 2012 (more than 50% of the costs are rouble- denominated) In H1 2012 steel segment costs benefited from lower raw materials prices: costs of raw materials accounted for 45% of Steel segment revenues in H1 2012 vs. 51% in H1 2011 Implementation of cost saving technologies (e.g. PCI), further development of own power generation, progress of Lean project are expected to help mitigate negative impact of growing energy, transportation and labour costsConsolidated cost of revenues by cost elements Cash Cost*, Slabs & Billets, $/t H1 2012, % H1 2011, % of total CoR of total CoR 479 437 448 426 410Raw materials, including 35% 40% 403 401 Iron ore 6% 8% 438 395 415 401 Coking coal 9% 12% 379 372 368 Scrap 14% 14% Slabs Other raw materials 6% 6% BilletsSemi-finished products 4% 6%Transportation 6% 7%Staff costs 14% 13%Depreciation 10% 7% Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12Electricity 5% 5%Natural gas 4% 4%Other costs 22% 18% * Average for Russian steel mills, integrated cash cost of production, EXW Source: Management accountsInvestor Presentation, November - December 2012 5
  7. 7. Liquidity and debt maturity profile Total debt of $7,833m as of 30 June 2012, having increased as a result of drawing on available credit lines to increase the cash balance Cash and cash equivalents totalled $1,763m ($801m as at 31 December 2011) $600m 5-year notes issued in April 2012 at 7.4% rate Net debt - $6,070m (6% decrease vs. 31 December 2011) Amendments to financial covenants in syndicated loan facilities provide greater financial flexibility Mid-term target net leverage ratio of below 2xDebt cost* and average maturity Debt** maturities schedule (as at 30 June 2012), $m 8 5 7.8 4.8 2,000 1,875 7.6 4.6 7.4 4.4 1,400 Q4 7.2 4.2 1,500 1,373 Q3 7 4 1,124 981 Q2 6.8 3.8 1,000 630 Q1 6.6 3.6 500 414 6.4 3.4 6.2 3.2 36 6 3 0 31/12/2010 31/03/2011 30/06/2011 30/09/2011 31/12/2011 31/03/2012 30/06/2012 2012 2013 2014 2015 2016 2017 2018 2019- 2023 % Years* Weighted average cost of debt** Principal debt (excl. interest payments)Investor Presentation, November - December 2012 6
  8. 8. FCF generation Free cash flow generation of $362m in H1 2012 Further release of working capital achieved 1,175 91 $m 1,132 1,089 (43) (134) (233) 92 362 (21) (565) EBITDA H1 Non-cash items EBITDA (excl. Changes in Income tax paid Cash flows from Net interest paid Capex CF from Collateral under Free cash flow 2012 non-cash items) working capital operating (incl. realised investing swaps (excl. income activities gain on swaps & activities tax) covenants reset (excl.capex and costs) interest received)* Free cash flow comprises cash flows from operating activities less interest paid and cash flows used investing activitiesInvestor Presentation, November - December 2012 7
  9. 9. Q3 2012 steel production EVRAZ’s overall production of crude steel decreased by 3% against both Q2 2012 and Q3 2011, mainly due to decreased steel production levels at EVRAZ steel mills in the Czech Republic and South Africa Consolidated production of finished steel goods decreased by 8% compared to the same period last year and by 4% compared to the previous quarter of this year due to lower output of flat-rolled products in Russia and Europe and lower production of rails in Russian and American millsProduction of steel products, Kt Share of finished products in product mix1,4001,2001,000 27% 800 600 Semi-finished products Finished products 400 200 0 73% Semi-finished Construction Railway Flat-rolled Tubular Other steel products products products products products products Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012Investor Presentation, November - December 2012 8
  10. 10. Steel: CIS Full economic utilisation of Russian steelmaking capacity Steel product sales, domestic vs. export, Kt maintained Rail sales volumes are negatively affected by planned 5- 5,541 5,586 month stoppage of the ZSMK rail mill for modernisation since April (the mill is expected to resume production in Q4 2012) 32% 33% In Q3 2012 prices for most steel product groups reduced due to ongoing uncertainty in global steel markets and Export decreasing prices of iron ore and coking coal Domestic Production and prices for construction steel in the domestic 68% 67% market are expected to decrease in Q4 2012 due to usual seasonal trends H1 2011 H1 2012Steel product sales volumes, Kt Steel product revenues 5,541 5,586 512 539 Products Revenue, $m Revenue, $/tonne 813 788 H1 2011 H1 2012 H1 2011 H1 2012 Other Semi-finished 1,159 1,028 630 607 2,378 2,566 Railway Construction 1,833 1,933 771 753 Construction Semi-finished Railway 734 720 903 914 1,838 1,693 Other 422 410 824 761 Total 4,148 4,091 749 732 H1 2011 H1 2012Investor Presentation, November - December 2012 9
  11. 11. Steel: North America North American steel mills operate at high utilisation levels We have successfully expanded into high value added products (head hardened rails, premium connection OCTG tubes, heat treated seamless pipe) The rail mill is fully utilised as rail demand remains strong; record high steel output and sales of rails in H1 2012 The expansion to the heat treatment facility in Calgary Overall demand for OCTG drilling activity remains stable with some slight signs of temporary weakness in OctoberSteel product sales volumes, Kt Steel product revenues 1,321 1,314 Products Revenue, US$m Revenue, $/tonne 403 371 H1 2011 H1 2012 H1 2011 H1 2012 Tubular Construction & other steel products 153 140 927 909 534 Flat-rolled 511 Railway 249 266 1,029 1,043 Railway Flat-rolled 578 571 1,131 1,069 242 255 Construction & other steel Tubular 589 579 1,461 1,561 165 154 Total 1,569 1,556 1,188 1,184 H1 2011 H1 2012Investor Presentation, November - December 2012 10
  12. 12. Steel: Europe, South Africa H1 2012 EBITDA of European operations was $6m despite Steel product sales volumes, the weak economic environment European operations, Kt In October the crude steel production at EVRAZ Vitkovice 740 Steel was temporarily closed due to low demand and the 109 companys plan to reduce its inventory 543 38 EVRAZ Highveld launched an optimisation programme to reduce fixed costs Other 631 Improved working shift schedules in South Africa are 505 Flat-rolled expected to result in increased workplace safety, reduced overtime and higher productivity H1 2011 H1 2012 Steel product sales volumes,Steel product revenue South African operations, Kt Products Revenue, $m Revenue,$/tonne 343 H1 2011 H1 2012 H1 2011 H1 2012 52 270 European operations 35 Flat-rolled 598 398 948 788 183 Other Other 104 37 954 974 145 Total 702 435 949 801 Flat-rolled South African operations Construction Construction 89 71 824 789 108 90 Flat-rolled 159 121 869 834 Other 36 23 692 657 H1 2011 H1 2012 Total 284 215 828 796Investor Presentation, November - December 2012 11
  13. 13. Mining: Coal Sales of coal products in H1 2012 decreased vs. H1 2011 Coal product sales, Kt due to lower steam coal volumes mined as a result of longwall 4,175* repositionings at both steam coal mines in Q1 2012 1,295 3,014 decreased volumes of external raw coal and increased 834 consumption of own coal in production of coal External sales concentrate 2,880 Intersegment sales 2,179 A debottlenecking programme at Yuzhkuzbassugol was launched to stabilise and improve mine production Coal mine projects (Yerunakovskaya VIII and Mezhegey H1 2011 H1 2012 Phase 1) are proceeding as planned * For comparability the number excludes 767 Kt of raw coal purchased by Trading Company EvrazHolding from market and Raspadskaya for supply to EVRAZ steel millsWashed coking coal (concentrate) self-coverage, Kt Cash cost, Russian washed coking coal, $/t 90% 80% 88% 71% 96% 98 4,053 4,021 3,850 3,775 3,868 3,642 3,722 3,229 3,402 81 79 1,066 1,451 723 998 2,665 73 69 70 67 831 246 2,506 2,404 1,834 2,656 1,945 H1 2010 H2 2010 H1 2011 H2 2011 H1 2012 Consumption Production excl. Production by Raspadskaya closed and closed and production Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 disposed mines disposed minesNote. (1) Self-coverage, %= total production (plus 40% of Raspadskaya production on pro rata basis) divided by total steel segment consumption(2) Self-coverage excl. 40% Raspadskaya share: H1 2010 – 54%, H2 2010 – 62%, H1 2011 – 62%, H2 2011 – 49%, H1 2012 – 69%Investor Presentation, November - December 2012 12
  14. 14. Mining: Iron ore In H1 2012 total sales (intersegment and external) of iron ore products were 9.3 mt (-7.6% vs H1 2011) due to decreased use of external raw iron ore in concentrate production in 2012 and destocking at Sukha Balka in H1 2011 Cash costs decreased in line with rouble depreciation In H1 2012 EVRAZ Russian iron ore operations achieved total $17.5m positive economic effects through operational improvements The project to increase EVRAZ KGOK’s capacity to 55 Mtpa of raw ore is expected to be completed in December 2012 Feasibility study and project documentation were completed to develop the Sobstvenno-Kachkanarskoye ore deposit at EVRAZ KGOK and the project is proceeding as planned Major reconstruction of Sheregesh mine at Evrazruda was launched to increase production 2.5 times to 4.8 Mtpa by 2016 Iron ore self-coverage*, Kt Cash cost, Russian iron ore products (Fe 58%), $/t 90% 102% 99% 106% 101% 80 10,635 10,455 10,232 10,389 9,981 75 73 71 72 10,191 10,355 10,814 10,462 70 9,608 69 H1 2010 H2 2010 H1 2011 H2 2011 H1 2012 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Consumption Production* Self-coverage, %= total production divided by total steel segment consumptionInvestor Presentation, November - December 2012 13
  15. 15. Vanadium EVRAZ’s external sales of vanadium products decreased vs. Ferrovanadium prices (FeV), $/kg contained V H1 2011 by 17% to $251m, primarily due to lower prices As a result of operational improvements EVRAZ Vanady-Tula 31.1 achieved record productivity levels of 40 tonnes of V2O5/day 30.4 29.5 during H1 2012, a 15% improvement compared to production 30.2 30.9 28.6 30.0 rates in 2010 28.9 27.5 28.1 26.0 26.1 EVRAZ Stratcor vanadium plant in Arkansas launched use 24.6 25.7 24.5 of EVRAZ’s own vanadium slag, to increase synergy levels 25.3 25.6 25.6 within EVRAZ 24.2 24.3 23.7 23.0 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Source: LMBFinished Vanadium product sales volumes, t Vanadium product revenues by region, $m 4 23 9,624 9,599 24 Russia & CIS Europe Americas 117 83 Asia Africa & RoW H1 2011 H1 2012Investor Presentation, November - December 2012 14
  16. 16. Key Investment Projects Cumulative CAPEX by CAPEX in CAPEX in Total CAPEX 30.06. 2012 H1 2012 H2 2012,Project $m $m $m $m Project Targets Project Targets Project targetsCoal ore & coalIron & iron ore o Coal production of 2 mtpaYerunakovskava VIII mine construction 390 81 47 150 o Start in Q1 2013, full capacity to be reached in Q1 2014 o Maintaining self-sufficiency in high-quality hard coking coal afterDevelopment of Mezhegey coal deposit depletion of existing deposits 190 23 18 25(Tyva, Russia) o On-stream Q4 2013, reaching full capacity by Q4 2014 o Iron ore production to be increased to 55 mtpaExpansion of Kachkanar mine 76 60 13 14 o On-stream by end 2012Steel o Capacity of 950k tonnes of high-speed rails, including 450kReconstruction of rail mill at EVRAZ ZSMK 490 366 84 113 tonnes of 100 metre rails(former NKMK) o On-stream in Q4 2012, fully operational since Q2 2013 o Production of higher-quality railsReconstruction of rail mill at EVRAZ NTMK 60 60 4 0 o 550k tonnes capacity o On-stream in Q2 2012, fully operational since Q2 2013 o 20% lower coke consumption o Save annually up to 650 mcm of natural gas at NTMK and up toPulverised coal injection (PCI) 600 mcm at ZSMK 320 218 55 79at EVRAZ NTMK and EVRAZ ZSMK o On-stream by Q4 2012 and Q1 2013, fully operational since Q1 2013 and Q2 2013 respectivelyReconstruction of mechanical area at o Production of higher-quality wheels 40 25 3 8EVRAZ NTMK wheel & tyre mill o Start production in Q1 2013; full capacity in Q2 2013Construction of Yuzhny and Kostanay o Capacity: 450 ktpa of construction products each mill 260 93 34 60rolling mills o On-stream by mid-2013 Final stage of completion In progress Under considerationInvestor Presentation, November - December 2012 15
  17. 17. Capex dynamics $m 1,400 1,281 1,200 1,103 1,000 H2 2012 capex 832 800 expected in the range of 600 565 $650-750m 441 400 200 - 2008 2009 2010 2011 H1 2012 Maintenance, Steel and other operations Iron ore mine development Coal mine development * Investment projects * Investment into maintaining and developing mining volumes, such as preparation of coal seamsInvestor Presentation, November - December 2012 16
  18. 18. Recent market developments Full utilisation of Russian steel making capacities continues EVRAZ selling prices, $/t Utilisation of non-Russian steelmaking capacities in 1,200 October: 1,100 1,000 ◦ EVRAZ North America: 90% 900 800 ◦ EVRAZ Highveld: 60% 700 600 ◦ EVRAZ Vitkovice Steel: temporarily closed due to low 500 demand and the companys plan to reduce its inventory 400 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Low inventories across EVRAZ operations Slabs, Russia, export* Billets, Russia, export* EVRAZ order book (external sales) currently stands at Rebars, Russia, FCA Plate, North America, FCA approx. US$140 mln, representing 1.2 months production* Construction product prices were flat in July-September due Raw material prices (domestic markets), $/t to seasonal improvement in the Russian construction market and are expected to decrease in Q4 2012 due to slowdown 450 in the construction activity 400 350 In Q3 2012 export prices of semi-finished products 300 250 decreased vs. Q2 2012 200 150 Ferrovanadium prices in Q3 2012 are at the level of 24.3 100 $/kg of contained Vanadium vs. 24.6 $/kg in September 50 0 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Scrap, Russia, CPT Scrap, USA, CPT Iron ore concentrate, Russia, ExW Coking coal concentrate, Russia, FCA* The calculation is based on contract prices and November & December volumesInvestor Presentation, November - December 2012 17
  19. 19. Acquisition of Raspadskaya EVRAZ has agreed to increase its indirect stake in Raspadskaya from 41% to 82%, purchasing a further 50% interest in Corber Enterprises Limited Remaining 18% of Raspadskaya shares will remain listed on the Russian Stock Exchange, MICEX-RTS The completion of the deal is expected to occur in Q4 2012 subject to customary regulatory approvals and other conditions Raspadskaya assets Calculation of net leverage Facilities Three underground coking coal Company Net debt LTM EBITDA Net leverage mines as of 30 ratio Open-pit coking coal mine June 2012 Raspadskaya coal concentrate preparation plant EVRAZ 6,070 2,447 2.48 Coking coal reserves 1, 314 million tonnes Corber 330 235 1.40 (IMC, 31/12/2011) 6.3 mt of raw coking coal Combined 6,400 2,682 2.39 3.8 mt of coking coal concentrate entity Production in 2011Investor Presentation, November - December 2012 18
  20. 20. Outlook Global markets remain volatile resulting in ongoing uncertainty and low visibility in EVRAZ’s key markets Capacity utilisation remains high, finished goods inventories at our mills and sales network are low In Q4 2012 we expect to be subject to usual seasonal trends, including slowdown in the construction activity in Russia Capex in H2 2012 is expected at $650-750m but we retain flexibility EVRAZ continues to expect its net leverage ratio to increase at the end of 2012 versus 30 June 2012 (but within the limits set by our covenants)Investor Presentation, November - December 2012 19
  21. 21. Appendix
  22. 22. HSE performance Increase in LTIFR and FIFR vs. H1 2011 Lost Time Injury Frequency Rate (LTIFR)* Safety remains a key priority 0.94 0.81 Key ongoing safety initiatives: Contractor safety management Fall prevention (follow 6S project) PPE (Personal Protective Equipment) Improvement in workplace conditions Tests for drugs and alcoholic intoxication Internal safety training Key ongoing environmental initiatives: H1 2011 H1 2012 Water use: Wastewater dumping reduction programme (ZSMK, NTMK, Yuzhkuzbassugol, Evrazruda, DMZP); Fatal Injury Frequency Rate (FIFR)* Air emissions: Air protection equipment upgrade (ZSMK, DMZ, Claymont); Waste management: Waste recycling and reuse 2.02 programmes (ZSMK,NTMK, Vanady Tula) 1.85 H1 2011 H1 2012 * Calculated as the total number of work-related injuries (which resulted in the loss of work time) – LTIFR or fatalities – FIFR/total number of working hours during the period x 1,000,000Investor Presentation, November - December 2012 21
  23. 23. Revenue: geographic breakdown H1 2011 H1 2012 Africa & Africa & Other RoW Asian RoW 3% Other Asian 3% 7% 9% Thailand 4% China Thailand 1% 3% China Middle East 1% Russia 3% 41% Middle East Russia 2% 40% Europe Europe 13% 10% Ukraine Americas Ukraine Americas 3% 4% 24% 22% Other CIS Other CIS 3% 4%Investor Presentation, November - December 2012 22
  24. 24. Steel products: sales by market Kt $m Kt 3,331 3,331 3,324 3,324 2,661 2,604 1,732 1,732 1,586 1,586 1,652 1,582 1,441 1,441 1,345 1,345 1,015 1,068 858 858 758 632 632 431 406 431 406 492 300 275 300 275 359 336 257 214 Russia Russia CIS CIS Europe Europe Americas Americas Asia Asia Africa & RoW Africa & RoW Russia CIS Europe Americas Asia Africa & RoW H1 2011 H1 2012 H1 2011 H1 2012Investor Presentation, November - December 2012 23
  25. 25. Resilient and profitable asset base EBITDA, EVRAZ Russia, $m EBITDA, EVRAZ North America, $m 1,276 1,051 265 216 H1 2011 H1 2012 H1 2011 H1 2012 EBITDA, EVRAZ Ukraine, $m EBITDA, EVRAZ Europe, $m EBITDA, EVRAZ South Africa, $m 81 87 29 6 (3) H1 2011 H1 2012 (6) H1 2011 H1 2012 H1 2011 H1 2012Note. (1) Consolidated EVRAZ plc EBITDA also includes Unallocated EBITDA of $(109)m in H1 2011 and $(89)m in H1 2012(2) EVRAZ North America includes EVRAZ Inc. NA, EVRAZ Inc. NA Canada, Stratcor; EVRAZ Ukraine includes EVRAZ DMZP, Sukha Balka and coking plants; EVRAZ Europe includes EVRAZ Palini e Bertoli, EVRAZ Vitkovice Steel, Nikom and attributable trading margin Investor Presentation, November - December 2012 24
  26. 26. Cost structure by segmentCost structure of Steel segment, $m Cost structure of Mining segment, $m 6,237 5,749 9% 8% Other 1,177 15% 3% 1,092 Energy 8% 9% 19% 4% 4% Depreciation 23% 6% 9% 11% 7% Staff Other 4% 13% 4% Transportation 5% Energy 17% 30% Semi-finished products 15% 16% Depreciation Other raw materials Staff costs 17% 24% 15% Scrap 23% Transportation Coking coal 13% Raw materials 21% 19% 10% Iron ore 12% 7% H1 2011 H1 2012 H1 2011 H1 2012Cost structure of Vanadium segment, $m 304 242 Other 30% Energy 12% 41% Depreciation 5% 12% Staff costs 6% 13% 5% Transportation 13% 35% Raw materials 28% H1 2011 H1 2012Investor Presentation, November - December 2012 25
  27. 27. EBITDAUS$ million Six months ended 30 June 2012 2011 Consolidated EBITDA reconciliation Profit from operations 430 859 Add: Depreciation, depletion and amortisation 668 501 Impairment of assets 80 32 Loss on disposal of property, plant & equipment 25 17 Foreign exchange (gain) loss (28) 220 Consolidated EBITDA 1,175 1,629Investor Presentation, November - December 2012 26
  28. 28. Net profit reconciliation $m 20 62 12 10 0 -10 -20 -30 -40 -50 (50) -60 Reported Net loss Special item: impairment due to reduced pricing outlook Net profit w/o special itemsInvestor Presentation, November - December 2012 27
  29. 29. Net debtUS$ million 30 June 2012 31 December 2011 Net debt calculation Add: Long-term loans, net of current portion 6,271 6,593 Short-term loans and current portion of long-term loans 1,531 613 Finance lease liabilities, including current portion 31 39 Less: Short-term bank deposit 0 (2) Cash and cash equivalents (1,763) (801) Net debt 6,070 6,442Investor Presentation, November - December 2012 28
  30. 30. Quarterly steel products output by assetsRussia, Kt North America, Kt 3,500 800 3,000 150 700 143 120 137 97 104 138 600 2,500 74 206 211 102 361 445 277 238 194 219 396 84 366 500 2,000 1,127 400 1,500 1,093 1,069 1,089 1,037 236 246 261 254 252 300 1,000 200 500 1,030 1,050 1,122 121 124 117 134 115 915 949 100 81 74 83 79 78 0 0 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Construction products Railway products Flat-rolled products Tubular products Semi-finished products Construction products Railway products Flat-rolled products Other steelEurope, Kt South Africa, Kt 350 160 10 300 8 140 15 15 22 23 120 14 250 4 8 100 70 200 69 80 66 55 150 236 269 4 216 207 60 243 100 35 40 56 32 46 50 20 41 27 32 33 17 26 16 7 12 0 0 3 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Construction products Flat-rolled products Other steel products Semi-finished products Construction products Flat-rolled products Other steelInvestor Presentation, November - December 2012 29
  31. 31. Acquisition of Raspadskaya: Terms and conditions EVRAZ will issue 132.7 million new shares (9.9% of the existing issued share capital of EVRAZ) issue 33.9 million new warrants (2.53% of the existing issued share capital of EVRAZ), and pay an amount, in cash, of $1,949.80 for each of 103,600 ordinary Corber shares, payable in four equal instalments in Q1, Q2, Q3 2013 and Q1 2014 The warrant exercise period will be at any time between 12 months and 15 months after completion of the acquisition. Upon exercise of the Warrants, it is expected that the Sellers would own 11.06% of EVRAZ.Investor Presentation, November - December 2012 30
  32. 32. DisclaimerThis 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 ofEVRAZ plc (“EVRAZ”) or any of its subsidiaries in any jurisdiction (including, without limitation, EVRAZ Group S.A.) (collectively, the “Group”) or an inducement toenter 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 orcommitment 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, the Group or any of its affiliates, advisorsor representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents orotherwise 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, anystatements preceded by, followed by or that include the words “targets”, “believes”, “expects”, “aims”, “intends”, “will”, “may”, “anticipates”, “would”, “could” or similarexpressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond theGroup’s control that could cause the actual results, performance or achievements of the Group to be materially different from future results, performance orachievements expressed or implied by such forward-looking, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergyof recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russianeconomic, 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 ofgeneral business and global economic conditions.Such forward-looking statements are based on numerous assumptions regarding the Group’s present and future business strategies and the environment in whichthe Group will operate in the future. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend oncircumstances 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 each of EVRAZand the Group expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein toreflect any change in EVRAZ’s or the Group’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statementsare based.Neither the Group, 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.Investor Presentation, November - December 2012 31
  33. 33. London +44 207 832 8990Moscow +7 495 232 1370IR@evraz.comwww.evraz.com

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