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 Group S.A. 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.
2
3. Evraz Highlights
Vertically integrated steel and mining business, among the 15 largest
steel producers in the world
2006 Production of 16.1 million tonnes of crude steel and 14.5 million
tonnes of rolled products
1H06 Revenue grew 5.3% y-o-y to $3,825 mln reflecting 23% increase
in sales volumes to 8.3 million tonnes
1H06 EBITDA flat y-o-y at $1.1 bn, EBITDA margin remains strong at
29%
Leader in Russian long products market with 30-100% market share
High level of vertical integration and self-sufficiency in iron ore and
coal
One of the lowest cost producers of steel in Russia and CIS with mines
located close to steel production sites
Strong commitment to high standards of corporate governance
3
4. EVRAZ GROUP’S MAIN LOCATIONS
KGOK VGOK Raspadskaya
YKU Neryungriugol OSM
Moscow Mine 12
London Luxembourg EvrazRuda OSM
NTMK NKMK
ZapSib
Vitkovice Steel
Nakhodka Stratcor
OSM
Sea Port
Palini e Bertoli
Stratcor Highveld (24.9%)
Steel mills Iron ore mining
Vanadium Coal mining Sea port Main export countries
4
5. VISION AND STRATEGIC GOALS
Our Vision is to be a world class steel and mining company
and one of the Top 5 most profitable steelmakers globally by
ROCE and EBITDA margin through:
Leadership in CIS construction and railway steel product
markets
Strengthened positions in global flat product markets
Lowest costs secured by superior efficiency and 100% self-
sufficiency in raw materials
Growing vanadium business
5
6. 1H 2006 HIGHLIGHTS*
Revenue grew y-o-y 5.3% to $3,825 mln backed by sales volumes
increase of 23%
23% growth in Russian construction products sales volumes
Favourable domestic steel pricing environment
5.0x y-o-y increase in non-Russian sales to mature European and US markets to
$714 mln
EBITDA flat y-o-y at $1.1 bn, EBITDA margin remains strong at 29%
Consolidated cash cost per tonne increased y-o-y by 6.8% to $235
$262 mln capital investment to improve efficiency
*Excluding Oregon Steel Mills operations
6
7. STRONG BALANCE SHEET (excluding OSM)
Current credit ratings (reaffirmed after OSM tender offer): BB by Fitch;
Ba3 by Moody’s; BB- by S&P
Well-capitalised balance sheet to fund future growth
Net Debt-to-EBITDA Ratio Total Assets
3,000 1.2 8,000 80%
1.0 $ mln
$ mln 7,000 67% 70%
2,500 0.9 1
7,317
2,394
2,652 6,000 60%
6,663
2,000 0.8
5,000 50%
1,883
0.5 4,000 40%
1,500 1,736 0.6
4,253
1,374 3,000 27% 30%
1,000 0.4
1,094
2,000 20% 20%
500 0.2
1,000 10%
0 0 0 0%
2 2004 2005 LTM 2
2004 2005 LT M
3
1 Total Assets ROCE
Total Debt Net Debt Net Debt/EBITDA
1Net debt equals total debt less cash & cash equivalents and short-term bank deposits
2Evraz have not prepared audited or reviewed financial statements for the 12 month period ended 30 June 2006. Financial indicators presented under LTM (last twelve months)
are calculated as a sum of 1H06 financial results and FY05 less 1H05 financial results
3ROCE represents profit from operations plus profit from equity investments less income tax over total equity plus interest bearing loans and lease average for the period 7
8. STEEL SEGMENT*
Consolidated steel products sales volume up 23% to 8.3 mln tonnes
Excellent performance of the Russian construction market (sales volumes
grew by 23%)
Sales into attractive European and US markets increased by a factor of 5
Steel Segment Sales by Regions Prices for Main Steel Products
$/tonne
North and
South CIS
600
America 3%
Russia Non-Russia
3%
500
Europe
16%
400
1H04
2H04
300 1H05
Russia 2H05
50% 1H06
200
100
Asia
28%
0
Rebars Sections Rails Billets Slabs
*Excluding Oregon Steel Mills operations
8
9. STEEL SALES BY PRODUCT*
21% increase in semi-finished sales volumes driven by organic growth and
world steel market demand
Strong plates sales growth due to acquisitions of premium Vitkovice Steel and
Palini e Bertoli plate mills
(in volume terms)
Products (‘000 tonnes) 1H 2006 1H 2005 %
Semi-finished 4,164 3,443 21%
Construction 2,197 2,106 4%
Plates 830 194 328%
Railway 789 828 (5)%
Mining 139 123 13%
Other** 181 56 223%
Total 8,300 6,750 23%
*Excluding Oregon Steel Mills operations
**Includes rounds, cut shapes, strips and other products
9
10. WELL-POSITIONED
IN DOMESTIC MARKET
Construction growth in Russia and Russian market share by volume, 2005
CIS continues to outperform GDP 100% 100%
84%
Russian and CIS steel consumption 80% #1
#1
remains below global benchmarks 60%
49%
Enhanced leadership position in the 40% #1
30% 28%
rapidly growing construction market 20% #1
#2
with estimated market share of 38% 0%
Rails H-beams Chanels Rebars Rail-wheels
Construction Output Forecast
Steel Consumption Growth Structure
to Exceed GDP Growth
400
39,9
2002 =100% 100% 37,3
350 35,1
33,4 18%
GDP 80 30,5 31,6
300 Construction: Pipes
Rebar consumption 21%
250 60 43%
200 40
42% Long Products
150 39%
20
38% Flat Products
100
0
2002
2008
2009
2004
2006
2010
2003
2005
2007
2005 2006 2007 2008 2009 2010
Source: Evraz, EIU, Chermet, Metall Expert
10
11. RUSSIAN AND CIS MARKETS
Russia remains key market contributing 50% to total steel segment revenue
Total sales volumes increased by 13.8% to 3.65 million tonnes
Favourable pricing environment set to continue in 2H 2006 and beyond
Sales Mix Average Market Prices*
‘000 tonnes $/tonne
714 1,000
+20%
597
850
-1% 871
879 700
+8% 541
550
499
+18%
784 400
663
+30% 250
573 744
100
1H05 1H06
04
04
05
05
06
06
04
05
06
03
3
04
4
05
5
06
6
3
4
5
6
-0
-0
-0
-0
-0
-0
-0
-0
r-
r-
r-
g-
g-
g-
g-
n-
n-
n-
b-
b-
b-
ec
ec
ec
ec
ct
ct
ct
ct
Ap
Ap
Ap
Rebars Sections Rails Other finished Semis
Au
Fe
Ju
Au
Fe
Ju
Au
Fe
Ju
Au
O
O
O
O
D
D
D
D
H-beams Channels Angles Rebars
Source: Metall Courier * On FCA basis
11
12. NON-RUSSIAN SALES*
1H06 steel sales volumes increased by 31.8% to 4.65 million tonnes
European assets (Vitkovice Steel and Palini e Bertoli) successfully integrated
and contributed $454 mln to consolidated revenue while plates sales
volumes increased 843%
Construction steel export volumes shifted to attractive Russian market
Non-Russian Sales Product Mix Non-Russian Prices for Slabs & Billets
‘000 tonnes $/tonne
110
669 600
42 416 500
71 -28%
580 617
60% 400
380
1,342
300
27%
1,053
200
6%
1,412 1,491 100
0
1H05 1H06 3
Ju 4
04
4
Ju 5
Au 5
5
Ju 6
Au 6
6
03
Fe 3
O 4
4
O 5
Fe 5
O 6
6
Ap 4
Ap 5
Ap 6
0
0
0
-0
0
-0
0
0
-0
0
0
-0
-0
-0
-0
-0
0
0
0
r-
n-
r-
n-
r-
n-
g-
g-
g-
g-
b-
b-
b-
ct
ct
ct
ct
ec
ec
ec
ec
Au
Au
Billets Slabs Other semis
Fe
O
D
D
D
D
Construction Plates Other finished Bille t (FOB, Fa r Eas t) Sla b (FO B, Fa r Eas t)
Source: SBB
*Excluding Oregon Steel Mills operations
12
13. MINING SEGMENT
1H06 Mining segment revenues decreased y-o-y by 19.2% to $480 mln
Iron ore sales volumes flat y-o-y at 8.4 mln tonnes
Decline in average prices of iron ore and coal
Iron ore self-sufficiency remains strong at 78%
Mining Segment Performance Iron Ore Production
$ mln ‘000 tonnes
1,397 1,181
594
2,898 2,794
480
253 4,418
4,198
41 133 10
1H05 1H06
1H05 1H06
Kachkanarsky GOK Evraz ruda Vysokogo rsky GOK
Revenues EBIT DA Profit from assoc iates
13
14. NATURE OF VANADIUM MARKET
Best strength to weight ratio of common engineering materials
With 0.1% addition of vanadium in structured steel, strength can be increased by 10 to 20%;
structures’ weight can be reduced by 15 to 25%
Steel industry (90%)
High strength low alloy (HSLA) Steels
World Vanadium Market
Full Alloy Steels
Tool Steels / Stainless Steel Chemicals,
3%
Carbon Steels Alloys, 7%
Sheet,
Airspace industry (7%) Bars, 9% 27%
Titanium alloys for jet engine parts, airframes,
rockets, nuclear
New alloys for modern aircrafts and jets totals
20% of the weight (A380 and B787) Sections,
14%
Chemicals and Batteries (3%)
Catalyst for sulphuric acid and plastics
Dietary, glasses, pigments
Plate, 40%
Source: CRU
14
15. Stratcor
In April 2006, Evraz purchased a 73% economic interest in Stratcor, one of the
world’s leading producers of vanadium products
Acquisition adds vanadium processing capabilities, significant technical know-
how, and allows Evraz to capitalise on strong trends in vanadium market
Stratcor acquisition will markedly improve Evraz’s integration in vanadium
products, and will allow the company to extract higher margins and cash flows
from vanadium products
Income Statement (USD thousands) Production Highlights
2005 2005
Sales 258,112 000 lbs
Vametco (South Africa) V2O5
Gross Profit 131,932
Nitrovan 9,480
Gross margin %% 51%
Profit from Operations 105,642 FeV 980
Operations margin %% 44% V2O5 656
EBITDA 112,660 Stratcor Inc. (USA)
EBITDA margin %% 44% Production Feed
(different vanadium products) 8,733
Interest income 1,664
Interest expense (2,553)
Income Tax (39,516)
Net profit 69,407
15
16. Highveld Steel and Vanadium
In July 2006 Evraz purchased 24.9% of Highveld Steel and Vanadium Corp.
Ltd., a leading vanadium producer
Evraz benefits from a call-option allowing an increase in ownership up to 79%.
Transaction significantly increases vanadium processing capabilities
Improve Evraz’s integration in vanadium products, and will allow the company
to extract higher margins and cash flows from vanadium products
Income Statement (USD thousands) Production Highlights
2005 2005
Sales 1,133,914 Total steel – tons 735,307
Profit from Operations 439,461 Vanadium pentoxide – kg V2O5 4,406,811
Operations margin %% 39% Ferrovanadium and
Ferrovanadium nitride – kg V 1,749,762
EBITDA 514,739
EBITDA margin %% 45%
Income Tax (180,032)
Net profit 303,645
16
17. COST STRUCTURE
1H06 Cost of revenues up y-o-y 11.9% to $2,520 mln as a result of higher
steel sales volumes, lower raw material prices and acquisitions impact
Consolidation of volumes of European assets contributed $253 mln to cost
increase
SG&A expenses remain flat due to strict cost management
Risk of further cost increase concentrated in energy and labour expenses
Steel Segment Costs Mining Segment Costs
Depreciation SG&A
Energy
3% 11% Raw materials
7%
Staff 20%
8% Other
18%
Other
8%
Raw materials
54% Staff
SG&A 20%
10%
Energy
Transport 24% Depreciation
10% 7%
17
18. CAPEX
Key focus on efficiency improvement at the front end of steel production
Implementation of major projects on track
Capital spending of $262 mln in 1H06 vs. $280 mln in 1H05
FY2006 capex annual budget estimated at $550 mln
Project Status
Revamp of BF5 at NTMK Complete
Revamp of CB5 at NTMK Complete
Reconstruction of converter shop at NTMK On-going
Revamp of EAF at NKMK On-going
Installation of ISSM at Vitkovice Steel On-going
18
19. Successful IPO of Raspadskaya
One of the 10 largest producers of coking coal in
Russian
Financial Highlights leading
the world
781 mln tonnes of high quality coking coal proved
coking coal
and probable reserves in Russia
541 producer
$ mln Evraz interests remains at 40 %
421 Cash cost of concentrate production in the bottom
quartile of the global cash cost curve (19$/t)
322 Efficiency
Operational efficiency on par with global peers
259
Compact integrated operating complex
218
165
Strong EBITDA margin – c. 60% in each of the last two
127 120
financial years
51 performance ROCE in 2005(1) – 31%
Banks-
2004 2005 1H 2006 Credit Suisse, Deutsche UFG, Morgan Stanley
managers
Revenue EBIT DA Net inc ome
Listing 18% of the capital placed on RTS and MICEX
Production Growth $2.25 per share
Pricing Implied market value of $1.76bn
‘mln tonnes
CAGR 2006-2010 - 12% 2.1 times oversubscribed
17.0
Target production volume growth 2006-2010 –
12% CAGR
CAGR 2001-2005 - 10%
Projects under way to further strengthen
9.7 Growth
Raspadskaya’s positions in domestic market
potential
6.7 Growth of market share in Ukraine and Eastern
Europe and access to rapidly growing markets of
2001 2005 2010T South East Asia
Source: Raspadskaya, IMC
19
20. Oregon Steel Mills
In January 2007 Evraz successfully completes tender offer for shares of
Oregon Steel with approximately 91.5% of shares tendered at $63.25 per
share.
The acquisition of Oregon Steel represents a solid platform for Evraz as a
footprint in North America.
Transaction secures an important place on the attractive plate market and
in the expanding pipe business in North America.
The combined company will also be the leading rail producer globally
Financial Highlights Sales, million tons
1,800 $ mln 25%
23%
1,500
1,600 19% 2,000
20%
16% 1,258
1,400 1,185 1,725
350 15% 1,635 1,660
1,200 1,486
229
238
1,000 723 10%
800 5%
9
600
0%
400
-5%
200
-8%
0 -10%
2003 2004 2005 2006E 2003 2004 2005 2006E 2007E
Revenue EBIT DA* EBIT DA Margin
Source: Oregon Steel Mill
20
21. Oregon Steel Mills
Leading West Coast steel producer with total capacity of 2.3 million tonnes
Leading commodity and specialty plate producer in the Western United States
Leading rail producer in North America
Leading large diameter line pipe producer in North America
2006E Sales by Product
Structural
Tubing 77,000
Ro d and Bar 5%
288,000 17%
Welded Pipe
265,000 16%
Seamless Tube
Camrose
Pipe Mill 65,000 4%
Portland
Plate Mill Plate and Coil
Structural Tube Mill Rail 448,000
516,000 31%
Cut-to-Length Line 27%
Large Diameter Pipe Mill
Pueblo
Steel Mill Rocky Mountain Oregon Steel
Rails Mill
Rod and Bar Mill
Steel Mill Mill Division
Steamless Pipe Mill 801,000 tonnes 858,000 tonnes
48% 52%
Source: Oregon Steel Mill
21
22. OSM US Peers Profitability
Superior profitability of OSM vs most US peers due to high margin product mix
Sales per tonne ratio of $846 in 2005 and $951 in 3Q06
EBITDA per tonne of $155 in 2005 and $249 in 3Q06
Revenue per tonne (US$) EBITDA(1) per tonne (US$)
951 957 294 296
876
846
249
733 740
702 714
608 621 184
167
155
135
121 117
89
Oregon Steel Mill Steel Dynamics Nucor Ipsco US Steel Oregon Steel Mill US Steel Nucor Steel Dynamics Ipsco
2005 Q3 2006 2005 Q3 2006
(1) EBITDA is defined as the sum of net income, depreciation and amortization, interest, and income taxexpense and excludes
fixed and other asset impairment charges,labor dispute settlement charges, settlement of litigationand loss on early
extinguishment of debt
22
23. 1H 2006 Evraz and Oregon
Results Overview
EVRAZ OSM
$ mln unless
otherwise stated 2005 1H 2006 2005 1H 2006
Revenue 6,508 3,825 1,258 704
EBITDA* 1,860 1,096 242 153
EBITDA margin 29% 28.7% 19% 22%
Net Profit** 1,009 571 116 77
Net Profit
margin 16% 14.9% 9% 11%
Sales
volumes***
(‘000 tonnes) 12,200 8,300 1,486 793
*EBITDA represents profit from operations plus depreciation and amortisation, impairment of assets and loss (gain) on disposal of PP&E
** Net profit attributable to equity holders of Evraz Group S.A. *** Steel Segment sales volumes
23
24. Evraz 2006 Production Results*
Pig Iron, ‘000 tonnes Rolled Products, ‘000 tonnes Steel, ‘000 tonnes
12,086 14,457 13,852 16,115
+19.6% +16.3%
11,453 12,754
3,610 4,103
+11.4%
3,218 3,639
3,085
2,955
Q4 Q4
9M 9M
Q4
9M
2005 2006 2005 2006 2005 2006
IRON ORE ‘000 tonnes COAL**, ‘000 tonnes
(5.5)%
16,666 +1.9% 16,989 17085
16137
4,053 4,275
+43.2%
Q4 9160 2005
9M
2006
6395
+43.2%
588 842
2005 2006
Evraz (Mine12) Raspadskaya Yuzhkuzbassugol
**Excluding Oregon Steel Mills operations
*Mine 12 operational results are consolidated into the Group since April 2005. Evraz Group holds 40% beneficial interest in OAO Raspadskaya and 50% interest in
Yuzhkuzbassugol. Operational results of Yuzhkuzbassugol are consolidated into the Group since December 31, 2005, while operational results of OAO Raspadskaya are consolidated
into the Group since March, 2004, and include production by MUK-96 and Razrez Raspadsky since their acquisition in May 31, 2006. 24
25. Average Russian Market Prices for
Long Products*
US$
1,000
850
700
550
400
250
100
04
04
05
Au 5
06
06
04
05
06
03
3
04
Fe 4
05
5
06
6
3
4
5
6
0
-0
-0
-0
-0
-0
-0
-0
-0
r-
r-
r-
g-
g-
g-
g-
n-
n-
n-
b-
b-
b-
ec
ec
ec
ec
ct
ct
ct
ct
Ap
Ap
Ap
Au
Fe
Au
Fe
Au
Ju
Ju
Ju
O
O
O
O
D
D
D
D
H-beams Channels Angles Rebars
* On FCA basis
Source: Evraz market estimates
25
26. Au
0
100
200
300
400
500
600
g-
03
O
US$
ct
-0
Source: Metall-courier
D 3
ec
-0
Fe 3
b-
0
Ap 4
r-
0
Ju 4
n-
0
Au 4
g-
0
O 4
ct
-0
D 4
ec
-0
Fe 4
b-
0
Ap 5
Bille t (FOB, Fa r Ea st)
r-
0
Ju 5
n-
0
Au 5
g-
0
O 5
ct
-0
D 5
ec
-0
Fe 5
b-
Billets
0
Ap 6
r-
0
Ju 6
n-
Sla b (FOB, Fa r Ea st)
0
Au 6
g-
0
O 6
ct
-0
D 6
ec
-0
6
Non-Russian Prices for Slabs &
26
