2. Disclaimer
This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an
offer to buy or acquire securities of Evraz Group S.A. (Evraz) or any of its subsidiaries in any jurisdiction or an inducement to enter
into investment activity. No part of this document, nor the fact of its distribution, should form the basis of, or be relied on in
connection with, any contract or commitment or investment decision whatsoever. No representation, warranty or undertaking,
express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the
information or the opinions contained herein. None of the Evraz or any of its affiliates, advisors or representatives shall have any
liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or
otherwise arising in connection with the document.
This document contains “forward-looking statements”, which include all statements other than statements of historical facts,
including, without limitation, any statements preceded by, followed by or that include the words “targets”, “believes”, “expects”,
“aims”, “intends”, “will”, “may”, “anticipates”, “would”, “could” or similar expressions or the negative thereof. Such forward-
looking statements involve known and unknown risks, uncertainties and other important factors beyond Evraz’s control that could
cause the actual results, performance or achievements of Evraz to be materially different from future results, performance or
achievements expressed or implied by such forward-looking, including, among others, the achievement of anticipated levels of
profitability, growth, cost and synergy of recent acquisitions, the impact of competitive pricing, the ability to obtain necessary
regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility
in stock markets or in the price of our shares or GDRs, financial risk management and the impact of general business and global
economic conditions.
Such forward-looking statements are based on numerous assumptions regarding Evraz’s present and future business strategies
and the environment in which Evraz will operate in the future. By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These
forward-looking statements speak only as at the date as of which they are made, and Evraz expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in
Evraz’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are
based.
Neither Evraz, nor any of its agents, employees or advisors intend or have 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.
1
3. Agenda
n Evraz Highlights
n Strategic Overview
n Financial Overview
n Recent Corporate Developments
n Palini e Bertoli
n Vitkovice Steel
n Neryungri Ugol
n Eurobond
n Corporate Governance
2
5. Evraz Highlights
n Among the 15 largest steel producers in the world
n Russia’s largest producer of steel and steel products
n Vertically integrated steel and mining business
n Recent acquisitions of Palini e Bertoli and Vitkovice Steel
n Produced 13.7 mt of crude steel in 2004 and 7.0 mt in 1H05
n Consolidated revenues of US$5.9 billion in 2004 and US$3.6 billion in
1H05
n EBITDA of US$2.0 billion in 2004 and US$1.1 billion in 1H05
n Successful IPO on LSE in June 2005 placing 8.3% stake for US$422m
n Multiple upgrades in the last six months from Fitch and Moody's
n Ba3 by Moody's, BB- by Fitch and B+/Positive Outlook by S&P
4
7. Our strategy
STRATEGY ACTIONS
n Enhance margin profile n Realisation of synergies from recent
acquisitions and continued capex-driven
efficiency improvements
n Enhance product mix to expand Evraz’s
position as a competitive exporter of semi-
finished products
n Achieve superior growth n Continue to capture domestic growth
n Further develop markets outside Russia
n Expand mining platform n Enhance profitability and security of supply
through vertical integration
n
n Drive growth through increased sales of mining
products to third parties
6
8. Top Russian steel producer
Evraz’s main locations Top Russian steel producers
Output1
(million tons)
Russian Main
ranking Company 2003 2004 1H05 products
1 Evraz Group 13.9 13.7 7.0 Long
2 MMK 11.5 11.3 5.5 Flat/long
3 Severstal 9.9 10.4 5.1 Flat/long
4 NLMK 8.9 9.1 4.1 Flat
5 Mechel 4.6 5.5 2.7 Long/flat
St. Petersburg
Source: Chermet, Evraz
Note: Crude steel output
Moscow
Nizhny Novgorod
Lipetsk KGOK
VGOK Surgut
Stary Oskol
Perm NeryungriUgol
Penza NTMK
Yekaterinburg
Samara
Chelyabinsk Omsk Tomsk Bratsk
Kemerovo
Novosibirsk Krasnoyarsk
Novokuznetsk
Mine 12
Raspadskaya Nakhodka
Yuzhkuzbassugol Irkutsk
ZapSib Sea Port
NKMK
Evrazruda
Iron ore mining Coal mining
Service Centres Steel mills Sea ports
7
9. An integrated steel and mining platform
(1)
Mastercroft
100%
Steel
NTMK Zapsib NKMK Palini e Bertoli Vitkovice Steel
84.4% 95.4% 100% 75%+1 99%
Neryungri
Coal
Raspadskaya Mine 12
Ugol Yuzhkuzbassugol
47.8%(2) 100%
100% 50% under
common control
but
not consolidated
Iron Ore
KGOK Evrazruda VGOK Coking Coal
97.6% 100% 87.4%
Distribution
Nakhodka Ferrotrade TH
Evraztrans
Sea Port 100% EvrazHolding
76%
93.0% 100%
Note:
1. Actual ownership interests representing Evraz’s control
2. Accounted for on the equity basis.
8
10. Russia’s growing construction
industry
n Russian steel consumption remains below global benchmarks
n Construction sector output is forecasted to exceed GDP growth by 37%
between 2004 and 2008
n Significant downstream capacity flexibility to capture migration to higher
margin products for domestic market
Construction Output Forecast
2004 Steel Consumption per Capita (kg)
to Exceed GDP Growth
1000 959 250
Indexed to 100 as of 1 January 1999
800
200
561
600
485
390 404 150
400 338 Growth Gap
198 100
200 ’04-’08F Construction Output CAGR: 6.7%
’04-’08F GDP CAGR: 5.0%
0 50
1999
2000
2001
2002
2003
2008
2009
2010
2007
2004
2005
2006
Germany
S. Korea
Average
US
Japan
Republic
Russia
EU-15
Czech
GDP Growth Construction Growth
Source: CRU, Metal Expert, Global Insight (steel consumption), Global Insight Source: Global Insight
(population)
Uniquely positioned to benefit from rapid Russian economic growth
9
11. Unique position in rail products
The Russian Railways (RZD) opportunity
n Railway products contributed 13% to Evraz’s revenues in 1H05
n RZD, Evraz’s major customer, is among the biggest railway operators globally
n Evraz accounted for nearly 100% of sales of rails in Russia
n Significant RZD capex required and planned
n Large backlog in rail replacement due to under-investment in 1990s
n Approximately US$21bn in capex planned for 2005-2007 period
Source: RZD, S&P (October 2004)
Evraz Prices vs. international export RZD infrastructure & rolling stock capex
benchmarks (US$/t)(1) (US$ bn)
800 717 717 4.6
5 4.5
600
600 4 3.4
457
3 2.5 2.5
400 2.0
2
1.0 0.9 1.0 1.1
200 0.7 0.8
1
0 0
Evraz Italy Poland Germany Austria
2004 2005 2006 2007
Source: Company data, UN Statistics Division Infrastucture capex Rolling stock capex
Notes: 1. Rail prices as of 1H05 Source: RZD Other capex
Uniquely positioned to benefit from RZD asset modernisation programme
10
12. Growing self-sufficiency in raw
materials
n Approximately 75% of iron ore and 70%(1) of coking coal are sourced internally
n Evraz has access to a large proportion of its raw materials supply
n Limited exposure to high and variable raw material prices
Global iron ore and coking coal prices ($/t)(2) Internal raw materials sourcing(3)
100
140 100%
86
120 78
75
80% 70
100 64 61
80 60%
60 40%
40 22
20%
20
0 0%
MMK
Evraz
NLMK
CSN
Arcelor
POSCO
Mechel
Severstal
2000 2002 2004 2006F 2008F 2010F
Iron ore fines Iron ore pellets
Coking coal
Notes:
Iron ore Coking coal
1. Including supplies from Yuzhkuzbassugol 3. Including related parties. Evraz data for 1H05, data for the peer group
2. CVRD – FOB for iron ore, Australian HCC – FOB for coking coal for 2004
Source: World Steel Dynamics, April 2005 Source: Evraz, Rudprom, OOO Rasmin, FGUP VUKhIN
Security of supply and reduced exposure to price fluctuations
11
13. Flexibility in Semis
Evraz slab capacity Sales volumes and prices in 2005
mt kt $/tonne
200 600
16.0 180
14.0 500
160
12.0 140 400
10.0 120
100 300
8.0
80
6.0 5.2 200
60
4.0 2.7 40
100
2.0 1.2 20
- - -
2003 2004 2005Е Jan Mar May July Sept
Slabs
Slab capacity Billets
Steel production
Slab price, RHS *
Source: Evraz, Metall Expert
Billet price, RHS * * FOB Far East
Evraz has flexible asset base allowing to benefit from the most attractive spot
markets in semis
12
15. Magnitude and quality of
transformation
Growing profitable business Increasingly diversified EBITDA
8,000 40% 100%
7,000 6,709
34% 80%
32%
6,000 30%
5,000 60%
(US$m)
22%
4,000 20%
40%
3,000
14%
2,168
2,000 10%
1,413 20%
1,000
0 0% 0%
2002 2003 2004 LTM№ 1H04 2004 1H05
Net income EBITDA Steel segment Mining segment Other
Sales EBITDA margin (rhs)
Note:
1. Evraz have not prepared audited or reviewed financial statements for the 12 month period ended 30 June 2005. Financial indicators
presented under LTM (last twelve months) are calculated as a sum of 1H05 financial results and FYE 2004 less 1H04 financial results.
14
16. Summary financials
US$m 2002 2003 2004 1H05
Income statement
Revenues 1,540 2,168 5,933 3,632
Gross Profit 205 559 2,447 1,381
Margin (%) 13.3% 25.8% 41.2% 38.0%
Adjusted EBITDA (1) 209 476 2,017 1,119
Margin (%) 13.6% 22.0% 34.0% 30.8%
Net income 1 253 1,345 729
Balance sheet
Total assets 1,222 2,232 4,253 5,504
Net debt (2) 128 479 1,025 736
Equity (4 ) 367 1,609 2,857
Minority interest 223 193 358 299
Cashflow statement
Cashflow from operations 117 43 946 727
Cashflow from investing (117) (359) (817) (657)
Capex (75) (217) (524) (280)
Cashflow from financing 7 462 (36) 316
Notes:
1. Adjusted EBITDA represents profit from operations plus depreciation and amortisation, impairment of assets and loss (gain) on dispositions of
property plant and equipment
2. Net debt equals total debt less cash & equivalents
15
17. Robust credit fundamentals
Net debt / capital (%) Net debt / EBITDA (x)
50% 46% 1.5
36% 1.0
34% 1.0
30% 0.6
0.5
19% 0.5 0.3
10% 0.0
1 1
2002 2003 2004 LTM№ 2002 2003 2004 LTM№
EBITDA(2) net interest coverage (x) FFO(3) / Capex (x)
25 4
21.0
18.2 3.0 2.9
20
3
15 2.0
10.3 2 1.7
10
5 3.7 1
0 0
1 1
2002 2003 2004 LTM№ 2002 2003 2004 LTM№
Source: Company data
Notes:
1. Evraz have not prepared audited or reviewed financial statements for the 12 month period ended 30 June 2005. Financial indicators
presented under LTM (last twelve months) are calculated as a sum of 1H05 financial results and FYE 2004 less 1H04 financial results.
2. Adjusted EBITDA represents profit from operations plus depreciation and amortisation, impairment of assets and loss (gain) on dispositions of property
plant and equipment.
3. FFO (funds from operations) - net cash flow from operating activities before changes in operating assets and liabilities.
16
20. Price dynamics: coal
Coking coal concentrate (RUR/tonne)
3000
2500
2000
1500
1000
500
0
Jan March May July Sept
Average price in Russia for coking coal
concentrate, FCA
Note: Price for average quality coking coal concentrate
Source: OOO Rasmin, VGUP Vukhin, Evraz
19
21. Price dynamics: steel products
Rebars (RUR/tonne) H-beams (RUR/tonne)
24 000
16000 20 000
16 000
12000
12 000
8000
8 000
4000 4 000
0 0
Jan Feb March April May June July Aug Sept Oct Jan Feb M arc h A pril M ay June July A ug S ept O ct
Export price, FOB Export price, FOB
Russian price index, FCA Russian price index, FC A
Source: Evraz, Metalltorg (domestic prices), Metal Bulletin (export prices).
20
22. CAPEX Programme
Presented at IPO Current status
n Steel capex programme focused primarily on n New slab caster at ZapSib
revamping the front-end commissioned on time
n More than $700 million invested to date with n Review projects to confirm
approximately $1 billion planned by 2010 to high returns
complete programme
n No new large projects to be
n Replacement of inefficient production facilities
started next year
(remaining OHF) with modern equipment
n Steel capex benefits include: n 2006 budget capex to be
substantially lower than 2005
n Enhanced product mix
n Confirm capex target levels at
– Move to continuous casting facilitating depreciation levels
production of quality slabs
n No major capex plans at
n Mining capex programme
newly acquired plants
n $460 million planned by 2010 including $180
million in 2005
n Increase in iron ore output at KGOK and
Evrazruda
n Development of Neryungri Ugol coking coal site
21
24. Recent Corporate Developments
Palini e Bertoli
n Palini e Bertoli is a rolling mill operator
in northern Italy producing steel plate
products
n Target markets - Southern Europe and
the Mediterranean
n 2004 output - 356,000 tonnes of rolled
products, revenues - €183m under 198 - 2002 003 - Present
Italian GAAP 2004
Integrated Structure
n Evraz acquired 75% interest in Palini 2000 and Expansion into
on 12 August 2005 Mining
n The deal is in line with Evraz’s strategy
of acquiring high-quality re-rolling
facilities worldwide
23
25. Recent Corporate Developments
Vitkovice Steel
n Vitkovice Steel in the north-east of
the Czech Republic is a leading
European producer of hot-rolled
steel products
n Target markets – the Czech
Republic and Central Europe
003 - Present
n Total sales in 2004 - 870,000
tonnes of rolled products, 2004
revenues - €425m
n Evraz acquired 98.96% of
Vitkovice Steel for c. €240m on
15 November 2005
24
26. Neryungri Ugol – Project on track
n Highlights
n 2.4 m tpy coking coal mine
n Extractable reserves are estimated at 70-85 million tonnes of high grade
hard coking coal
n Production to start in 2H06, expected to reach full production during
2008
n Current stage
n Evraz – Mitsui JV agreement signed, Mitsui becomes a co-investor with
30%
n Parties are in talks with financing institutions (JBIC, ECAs)
n Underground mine development is ongoing, 7500 m developed
n Mining equipment for Phase 1 ordered and major personnel hired
n Surface construction is in the active phase
n Project presented to prospective customers and preliminary coal tests
successfully completed (JSM, Posco, NTMK)
25
27. Eurobond’15
n Issuer Evraz Group S.A.
n Guarantor Mastercroft Limited
n Maturity 10 years
n Yield 8.5%
n Amount US$750 million
n Structure Reg S / 144A
n Ratings S&P = B+ (Positive)
Moody’s = Ba3/B2 (Stable)
Fitch = BB- (Stable)
n Listing London
n Use of proceeds Re-finance existing debt as well as to
support company growth via further
investment in expanding operations
26
29. Corporate Governance
n Management
n Board of Directors decision on management changes based on necessity
to separate the roles of chief executive officer and of chairman of the
Board:
n New structure to become effective since January 1, 2006:
– Mr. Valery Khoroshkovsky, Managing Director Operations, appointed new CEO
with effect from January 1, 2006
– Mr. Alexander Frolov, Managing Director Corporate, appointed new Chairman
of the Board, effective May 1, 2006
n Dividends
n Interim dividends for 1H2005 in line with the company’s dividend policy
n Total payout of c.$193m, or $1.65 per share ($0.55 per GDR) payable
to shareholders of record as of November 24, 2005
n 31.5% of net profit and more than 6% annualised dividend yield
28
30. Key investment highlights
Robust macro
Robust macro
Russia’s leading
Russia’s leading fundamentals and
fundamentals and
steel producer with
steel producer with strong position in high
strong position in high
global scale
global scale growth steel markets
growth steel markets
Continuously
Continuously Vertically integrated
Vertically integrated
improving financial
improving financial low-cost steel and
low-cost steel and
performance
performance mining business
mining business
Experienced
Experienced Growing
Growing
management
management self-sufficiency
self-sufficiency
team
team in raw materials
in raw materials
29
31. Contacts
Alexander Frolov Corporate Affairs and Investor Relations:
Managing Director Corporate
Irina Kibina
Vice President
Pavel Tatyanin
Chief Financial Officer
Nikolay Arutyunov
Director
Timur Yanbukhtin
Director, Corporate Finance Irina Dubitskaya
Senior Manager
Irina Osadchaya
Manager
Tel. +7-095-2321370
Fax +7-095-2321359
ir@evraz.com
30
