2. 1
EVRAZ in Brief
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 (unchanged from 2010)
102% self-covered in iron ore and 56% in coking coal (2010: 96% and 58% respectively)
2011 consolidated revenue of US$16.4 billion; EBITDA of US$2.9 billion
Total debt as at 31 December 2011 of US$7.2 billion, net debt/LTM adjusted EBITDA of 2.2x (2010:
US$7.9 billion and 3.1x)
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 Indices
Resumption of dividend payments with US$491 million of interim and special dividends in October 2011
and announced final dividend for 2011 of US$228 million
3. 2
Global Operating Model
79
227 Russia/CIS
2,640 314 7,568
1,243
Europe
131 570
2,958
North America
Asia
530
2011 Steel Sales Volume South America Africa 2011 Steel Sales Volume
by Geography by Product
Africa Other
Europe 4% Tubular 4%
10% 6% Construction
Russia &
Steel Mills Railway 36%
CIS
14%
Americas 49% Iron Ore Mining
18% Coal Mining
Vanadium Flat-
rolled
Sea Ports 19% Semi-
Asia
finished
19% Mezhegey Coal Mill in Development 22%
# Third Party Steel Products Sales* (Kt), 2011 # Internal Supply of Slabs and Billets from Russian Steel Mills (Kt)
* Excluding routes with sales volumes below 50kt each, together totalling 160kt
4. 3
2011 Summary
US$ m unless otherwise stated 2011 2010 Change
Revenue 16,400 13,394 22%
Gross profit 3,927 3,075 28%
Adjusted EBITDA 1 2,898 2,350 23%
Adjusted EBITDA margin 18% 18% 0%
Net Profit 453 470 (4)%
EPS (US$) 0.36 0.39 (8)%
Dividends for the period (US$ per share) 2 0.24 --
Net Debt 3 6,442 (10)%
7,184
Short-term Debt 3 626 733 (15)%
Steel sales volumes 4 (’000 tonnes) 15,492 15,506 0%
1 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.36 for reconciliation of profit (loss) from operations to Adjusted EBITDA
2 The total dividend for the period of $0.24 consists of a final dividend of $0.17 to be paid by EVRAZ plc and an interim dividend equivalent to $0.07paid by Evraz Group S.A.,
but excludes a special dividend equivalent to $0.3 paid by Evraz Group S.A.
3 As at the end of the reporting period; short –term debt includes current portion of finance lease liabilities
4 Here and throughout this presentation segment sales data refers to external sales unless otherwise stated
5. 4
2011 Financial Highlights
Consolidated Revenue by Segment
◦ Growth in revenues and adjusted EBITDA as a result of
US$ m
improved market environment 16,400
◦ 92% of the revenue growth is attributable to price
20 000 13,394 966
3 784
665
increases 15 000 823
566
◦
2 507
Increased contribution to Group EBITDA from the Mining
10 000
segment as a result of higher iron ore and coking coal 14 717
prices 5 000
12 123
◦ The change in shipment terms by EVRAZ’s Russian mills
0
to domestic customers (except for sales of rails to (2,625) (3,732)
Russian Railways) from ExWorks to CPT (Carriage paid -5 000
2010 2011
to) Incoterms from April 2011 slightly contributed to the
price increases Steel Mining Vanadium Other operations Eliminations
Revenue Drivers Consolidated Adjusted EBITDA
US$ m US$ m
20 000 3 600 2,898
2,350 197
18 000 2 800 22
16 400 144
2 526 248 53
16 000 2 000 1 628
935
13 394
232
14 000 1 200
1 485 1 262
12 000
400
10 000 (267) (211)
2010 Revenue Volumes Prices CPT effect in 2011 Revenue -400
Russia 2010 2011
Steel Mining Vanadium Other operations Unallocated & Eliminations
6. 5
Q1 2012 Highlights
In Q1 2012 coking coal production increased by 13% against Q1 2011
◦ Iron ore production increased by 5% in Q1 2012 vs. Q1 2011
◦ Total steel product sales for the first quarter of 2012 amounted to 3.9 million tonnes, unchanged y-o-y
◦ Revenue for the first quarter of 2012 remained in line with the same period in 2011 and Q4 2011 as
prices and sales volumes were broadly flat
◦ The Q1 2012 financial performance was broadly in line with the Q4 2011 performance
7. 6
Group Cost Dynamics
Cash Cost*, Slabs & Billets
◦ In 2011, EVRAZ’s high level of vertical integration in
US$/t
iron ore and coking coal helped to partially mitigate the 600
negative impact of escalating prices of inputs on 550
479
steelmakers’ costs 500
437 448
426
◦ Some impact from rouble appreciation (approx. 55% of
450
400 350
378
411
438
410
cost of revenue in 2011 was rouble-denominated) 350 395 415
298 401 379
◦ Expected future growth of natural monopolies tariffs is 300 333
356 369
to be mitigated by the implementation of cost saving 250 280
technologies (PCI), own power generation, purchase of 200
Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12
railcars, development of Lean project Slabs Billets
*Average for Russian steel mills, integrated cash cost of production, EXW
Consolidated Cost of Revenues Feb’12 Average Steel Slab Cash Cost
by Cost Elements by Region (EXW)
Cash Cost ($/metric tonne)
2011, % 2010, % 720
of total CoR of total CoR World Average: 526
600
Raw materials, including 39% 37%
Iron ore 7% 7% 480
Coking coal 12% 11% 360
Scrap 13% 13%
240
Other raw materials 7% 6%
Semi-finished products 6% 6% 120
Transportation 5% 7%
0
Staff costs 13% 12%
South Korea
Brazil
Mexico
Mid. East
Africa
S.America
China
Australia
Asia
Russia & CIS
USA
India
E. Europe
W. Europe
Japan
Canada
Depreciation 8% 7%
Electricity 5% 5%
Natural gas 3% 4% Cumulative Capacity
Other costs 21% 22%
Sources: World Steel Dynamics
8. 7
Coal Mining
Quarterly Raw Coal Production
◦ Volumes of raw coking coal recovered in Q1 2012 after a
decrease in the first three quarters of 2011 due to longwall ‘000 tonnes
repositionings and temporary mine stoppages for additional
3 000
safety improvements
◦ Cash cost of washed coking coal increased in the first three
2 500
712 768 47
quarters of 2011 due to fixed cost impact on lower volumes. As 2 000
889 596
the volumes recovered, cash costs decreased to the normal level 1 500
by Q1 2012 2 078
1 000 1 839 1 756
◦ Steam coal volumes are impacted by longwall repositionings at 500 1 237
1 470
both existing coal mines in Q1 2012. One of the two mines,
0
Kusheyakovskaya, resumed operations in April 2012, another Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12
one, Gramoteinskaya, in mid-May
Coking coal Steam coal
Washed Coking Coal (Concentrate) Self-Coverage* Cash Cost, Russian Washed Coking Coal
‘000 tonnes
US$/t
100% 78% 54% 62% 62% 49%
6 000 100
5 000 80
4,218 3,499 4 021 3 850 3 775
4 000 3 501 3,499 3 299
60
444 234
3 000 2 506 2 404
2 191
1 834 40
2 000 246
1 000 20
3,055 3,065 1,945
0
0
H1 2009 H2 2009 H1 2010 H2 2010 H1 2011 H2 2011 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12
Consumption Production Excl. Production by
Closed and Closed and
Disposed Mines Disposed Mines
* Self-coverage, %= total production divided by total steel segment consumption
9. 8
Iron Ore Mining
Quarterly Production of Iron Ore Products*
◦ Iron ore production in 2011 increased by 7% vs.
‘000 tonnes
2010 6 000 5 396 5 436 5 379 5 204
◦ Cash costs increase in line with general cost inflation 5 000
4 960
and appreciation of Russian rouble 4 000
◦ Self-coverage in iron ore is maintained at around 3 000
100% 2 000
◦ Planned investments in mine development is 1 000
supposed to improve self-coverage 0
Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12
* Includes production of saleable concentrate, sinter and pellets in Russia,
lumpy ore in Ukraine, fines and lumpy ore in South Africa
Iron Ore Self-Coverage* Cash Cost, Russian Iron Ore Products (Fe 58%)
‘000 tonnes US$/t
99% 96% 90% 102% 99% 106%
80
12 500
70
10 000 60
10 397 10 635 10 455 10 232
9 981
8 859 50
7 500
40
5 000 9 955 10 191 10 355 10 814
8 809 9 608 30
20
2 500
10
0 0
H1 2009 H2 2009 H1 2010 H2 2010 H1 2011 H2 2011 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12
Consumption Production
* Self-coverage, %= total production divided by total steel segment consumption
10. 9
Steel Production
◦ In Q1 2012 consolidated crude steel production remained broadly flat vs. Q1 2011 and increased by 5% vs.
4Q 2012 after completion of maintenance works at EVRAZ ZSMK steel mill in Russia, EVRAZ Pueblo and
Regina in North America
◦ The share of finished products in the consolidated steel product mix increased from 74% in Q1 2011 to 80%
in Q1 2012 due to the market recovery
‘ Production of Steel Products
‘000 tonnes ‘000 tonnes
1 400 5 000
1 200 3 974
4 000 3 780 3 697 3 781 3 741
1 000
800 3 000
74%
600 79% 79% 76% 80%
2 000
400
1 000
200
26% 21% 21% 24% 20%
0 0
Semi-finished Construction Railway Flat-rolled Tubular Other steel Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12
products products products products products products
Semi-finished products Finished products
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012
11. 10
Recent Market Developments
EVRAZ Selling Prices
◦ Full utilisation of Russian steel making capacities US$/t
since mid-2009 1 200
◦ Current steel making capacity utilisation of non-
1 100
1 000
Russian mills: 900
◦ Czech Republic – 100%
800
700
◦ North America – 90% 600
500
◦ South Africa – 70% 400
Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12
◦ Inventories remain low Slabs, Russia, export*
Rebars, Russia, FCA
Billets, Russia, export*
Plate, North America, FCA
◦ EVRAZ order book (external sales) currently stands at * Weighted average contract prices
approx. US$170 million, representing 1.5 months
production* Raw Material Prices (Domestic Markets)
US$/t
◦ Prices for steel products are generally flat since Q4
450
2011 400
◦ Iron ore and coking coal concentrate prices in Russia
350
300
slightly decreased compared to Q4 2011 and have 250
200
been broadly flat since the beginning of the year.
150
◦ Vanadium prices** stood at the area of 25-26$/kg V 100
50
and remained unchanged since the beginning of 0
2011 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12
* Calculated on contract prices and June & July volumes Scrap, Russia, CPT Scrap, USA, CPT
Iron ore concentrate, Russia, ExW Coking coal concentrate, Russia, FCA
** LMB, FeV
Source: Metall Expert
12. 11
Liquidity and Debt Maturity Profile
◦ Improved liquidity profile due to a number of refinancing activities in 2011 and first four months of 2012:
◦ In April 2011, EVRAZ issued US$850m bonds due 2018 at 6.75%, using part of the proceeds to purchase approx. US$622m in
aggregate principal amount of the outstanding bonds due 2013
◦ In June 2011, EVRAZ issued a 20bn 5-year Rouble bond (approx. US$715m) at 8.40%, and decreased debt by US$553m with
incentivised conversion of convertible bonds due 2014
◦ In October 2011, the 5-year US$500m unsecured credit facility with Gazprombank was used to prepay the existing US$300m
secured loan
◦ In December 2011, a US$610m 5-year committed revolving credit facility for EVRAZ NA was agreed at 1.5-2% over LIBOR. It was
used to refinance US$225m and CAD300m facilities at 3.25-4.25% over LIBOR
◦ In April 2012, US$600m 5-year bonds were issued at a coupon rate of 7.40% per annum
Total debt as of 31 March 2012 - US$7.3 billion, including US$4.9 billion of public debt and US$2.4 billion of bank loans
Cash and cash equivalents at 31 March of US$453m (US$801m as of 31 December 2011), mainly due to an increase in
working capital which is expected to be reversed by the end of Q2 2012
2011 net debt/LTM EBITDA ratio of 2.2x
◦ Rating upgrades by Moody’s, Standard & Poor’s and Fitch to “Ba3”, “B+” and “BB-“ respectively
Debt* Maturities Schedule (as at 31 March 2012)
US$ m
1600 1 456 1 412
1 336 1 340 1 374
1200
Q4
800
Q3
400 306 Q2
32 37 Q1
0
2012 2013 2014 2015 2016 2017 2018 2019-2023
* Principal debt (excl. interest payments)
13. 12
CAPEX Dynamics
◦ CAPEX in 2012 and over the next few years expected to be around the 2011 level
◦ In Q1 2012 CAPEX amounted to US$310 million
◦ Major investment projects remain on schedule and within budget
US$ mln
1 400 1,281
~1,200
1,103
1 200
1 000 832
800
600
441
400
200
-
2008 2009 2010 2011 2012F
Maintenance, Steel and other operations* Iron ore mine development Coal mine development ** Investment projects***
* In 2011 includes US$114 million for EVRAZ new Moscow office and difference between IFRS and management accounting
** Investment into maintaining and developing mining volumes, such as preparation of coal seams
*** In 2010 includes US$70 million acquisition of Mezhegey and Mezhegey East licences; in 2011 – US$3 million investments in Yerunakovskaya mine
14. 13
Key Investment Projects
Cum CAPEX by 30.06.
Cumulative CAPEX by
Total CAPEX 31.12. 2011
2011 2011 Planned CAPEX
2012
Project $US mln
$US m $US mln
$US m $US mln (1)
$US m (1) Project Targets Project Targets
Coal ore & coal
Iron & iron ore
o Coal production of 2 mtpa
Yerunakovskava VIII Mine Construction 390 33 223
o On-stream by mid-2013
o Maintaining self-sufficiency in high-quality hard coking coal
Development of Mezegey and Eastern Field Coal
TBD 7 37 after depletion of existing deposits
Deposits (Tyva, Russia)
o On-stream by 2013 and 2021 respectively
o Iron ore production to be increased to 55 mtpa
Expansion of Kachkanar Mine 80 45 35
o On-stream by 2012
Steel
o Capacity of 950k tonnes of high-speed rails, including 450k
Reconstruction of Rail Mill at United ZSMK
520 307 222 tonnes of 100 metre rails
(Former NKMK)
o On-stream by 2013
o Production of higher-quality rails
Reconstruction of Rail Mill at NTMK 60 56 4 o 550k tonnes capacity
o On-stream by 2012
o 20% lower coke consumption
Pulverised Coal Injection (PCI) o Save annually up to 650 mcm of natural gas at NTMK and up
320 167 113
at NTMK and ZSMK to 600 mcm at ZSMK
o On-stream by end-2012
Reconstruction of Mechanical Area at o Production of higher-quality wheels
40 23 9
NTMK Wheel & Tyre Mill o On-stream by 2012
Construction of Yuzhny and Kostanay o Capacity: 450 ktpa of construction products each mill
260 59 126
Rolling Mills o On-stream by mid-2013
Final stage of completion In progress Under consideration
15. 14
Outlook
The long-term prospects for global infrastructure are attractive, however in the near term global
markets remain volatile
EVRAZ retains high capacity utilisation though rail production in Russia will be lower in May-
September due to ZSMK rail mill modernisation
Inventories at traders and at our mills and ports are low
In Russia steel prices remained broadly flat since Q4 2011, though visibility remains rather low
The Company continues to sufficient liquidity to finance existing operations and growth plans
EVRAZ continuously assesses the market environment and has significant flexibility in CAPEX
plans
16. 15
Summary
2011 results reflect the recovery of steel and raw material markets
Benefits from increased raw material prices due to the Group’s high level of vertical integration
Stable liquidity position and reduced debt level following continuous refinancing
Ongoing investment in enhancing the mining base, production modernisation and product quality
expected to bear fruit starting from 2013
18. 17
Health, Safety and Environmental Initiatives
Health and Safety Environment
Lost Time Incident Frequency Rate /Fatalities Incident Frequency Rate* Emission Dynamics**
(Per 1 million hours worked) (Rebased to 100)
4 0.18 0.20
0.14 0.16
0.13
0.12
2
0.07
0.08
0.04
2.23 2.69 2.40 1.86
0 0.00
2008 2009 2010 2011
LTIFR FIFR
o Health and safety of our employees is of paramount o Total level of air emissions** reduced by more than
importance – Alexander Kruchinin, VP of HSE reports 23% between 2009 and 2011
directly to CEO o The Company is continuously optimising waste
o HSE Committee formed in 2010, comprised of 3 management and developing its old dumps
independent directors reporting to the Board containing metallurgical waste (slag, scale and
o In 2011 the Company demonstrated a 23% reduction sludge). In 2011 109.6%*** of non-mining waste
in LTIFR and a 50% reduction in FIFR and by-products generated by EVRAZs assets were
recycled or used (96.6% in 2010).
* 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 1,000,000
** Including: Nitrogen Oxides NOx, Sulphur Oxides SOx, Dust and Volatile Organic Compounds (VOC)
*** The rate between amount of waste recycled or used vs. annual waste generation, not including mining waste
19. 18
Exposure to Growth in Steel Consumption
Total Steel Consumption in Russia
Mt
◦ EVRAZ is best positioned to benefit from infrastructure
50 development in its key markets
41.5
37.1
40
◦ Leading producer of long products in Russia
26.9
30
◦ In 2011, market share of 85% in H-beams, 61% in
20 channels, 87% in rails and 36% in wheels
10 ◦ The Russian Government has been increasing capital
0 investments each year
2009 2010 2011 ◦ Russian construction steel demand expected to reach
Source: MetalExpert pre-crisis levels in 2012
◦ Key programmes include:
Russian Government Capital Investments ◦ Construction related to the Sochi 2014 Winter
US$ bn Olympics; and
50 ◦ Infrastructure development for the APEC 2012
40 summit in Vladivostok and the Skolkovo
33*
26
innovation centre
30
◦ Russian commitment to invest over US$50 bn in
20 13 preparation for the 2018 FIFA World Cup (estimated
10 steel requirement of 2.0 – 2.5 MMt)
0 ◦ Russian Railways approved investment programme for
2009 2010 2011 2011-2013 of US$18.4 bn
Source: Russian Government
20. 19
Advantages of Vertical Integration
o Vertical integration is a key part of EVRAZ’s strategy
o It allows EVRAZ to control steelmaking costs
o As a result, EVRAZ’s profitability is less volatile than that of lower-integrated peers and its EBITDA has
remained positive throughout the steel cycle
Historical EBITDA margin vs. peers
EBITDA margin (%)
50%
25%
0%
(25%)
(50%)
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011
ThyssenKrupp MMK NLMK EVRAZ
Source: Company results announcements and presentations
21. 20
Revenue: Geographic Breakdown
2011 2010
Other Asia Africa & Other Africa&RoW
Philippines RoW 3%
Taiwan
3% Philippines Asia
1% 3% 2% 4%
2%
Thailand Taiwan
4% 3%
Thailand
China
4%
2%
Middle East Russia
China
3% 34%
3%
Russia
40% Middle East
Europe 5%
11%
Europe
10%
Ukraine
Ukraine 4%
Americas 4% Other CIS
Other CIS Americas
23% 4%
4% 24%
2011 Total revenue: US$16,400 million 2010 Total revenue: US$13,394 million
22. 21
Steel Products: Sales by Market
’000 tonnes US$ mln
8,000 6,000
5,443
7,000
6,722
5,000
6,000
5,543
4,000
5,000 3,641
4,424 3,276
4,000 3,000 2,802
3,020 2,364
3,000
2,662 2,766 1,988
2,000
2,000 1,348
1,562
1,472 1,018
1,000
1,000 872 849 602 716 486
406
533 573
0 0
Russia CIS Europe Americas Asia Africa & Russia CIS Europe Americas Asia Africa &
RoW RoW
2010 2011 2010 2011
23. 22
Steel: CIS
Steel Product Sales, Domestic vs. Export
◦ Full economic utilisation of Russian steelmaking capacity ‘000 tonnes
maintained throughout the year 15,000
◦ In 2011 domestic steel sales accounted for 69%’ steel sales 11,084 10,953
of EVRAZ’s Russian and Ukrainian mills compared to 58% in 12,000
2010, reflecting improving demand in the CIS market and
9,000 31%
the shift to sales of higher margin products 42%
◦ High market share in domestic sales maintained through 6,000
own distribution network EVRAZ Metall Inprom
69%
◦ Prices of key products strengthened in response to demand 3,000 58%
recovery and growth in raw material prices
0
2010 2011
Domestic E xport
Steel Product Sales Volumes Steel Product Revenues
‘000 tonnes
15,000 Revenue, Revenue per tonne,
Products
11,084 10,953 US$m US$
12,000
796 2010 2011 2010 2011
1,096
1,497
9,000 1,587
Semi-finished 2,307 2,163 522 642
4,373 Construction 2,793 3,883 639 793
6,000 4,899
Railway 1,082 1,444 723 910
3,000
4,418
3,371 Other 525 878 660 801
0
Total 6,707 8,368 605 764
2010 2011
S emi-finished C onstruction R ailway O ther
24. 23
Steel: North America
◦ Economic situation stabilised in 2011
◦ Sales volumes of steel products remained at the level of 2010 but prices have grown across all product groups
◦ Flat-rolled steel volumes increased by 7%; rail sales by 23%
◦ Investments in capacity expansion:
◦ The upgrade of Pueblo, Colorado, rail facility, scheduled to be complete by Q1 2013, will increase the mill’s total
capacity by 10%, to almost 525 kt of premium rail annually
◦ Adding capacity in structural tubing facility in Portland, Oregon, to produce API tubes, scheduled for completion by
August 2012, will bring the mill’s total capacity from 110 kt up to 225 kt of API pipe and structural squares, rounds
and rectangles
Steel Product Sales Volumes Steel Product Revenues
‘000 tonnes
Revenue, Revenue per tonne,
3 000 Products
2,607 2,646 US$m US$
2 400
866 2010 2011 2010 2011
923
1 800 Construction
and other 302 317 776 946
1 200 904 966
Railway 368 494 941 1,031
600 391 479 Flat-rolled 798 1,104 883 1,143
389 335 Tubular 1,308 1,282 1,417 1,480
0
2010 2011 Total 2,776 3,197 1,065 1,208
Tubular Flat-rolled Railway Construction & other steel
25. 24
Steel: Europe, South Africa
Steel Product Sales Volumes,
◦ EVRAZ’s European mills sales volumes increased by
‘000 tonnes
European Operations
8% 1 500
◦ Flat-rolled product sales were up 8% 1 200
1,206 1,296
157
◦
155
Sales of EVRAZ Highveld’s steel products were
900
effectively flat as domestic demand in the South
African market remained weak 600
1 051 1 139
300
0
2010 2011
Other Flat-rolled
Steel Product Revenues Steel Product Sales Volumes,
South African Operations
Revenue, Revenue per tonne, ‘000 tonnes
Products
US$m US$ 800
2010 2011 2010 2011 610 597
640
European Operations 81
108
Flat-rolled 778 1,042 740 915 480
Other 129 152 832 968
338 301
Total 907 1,194 752 921 320
South African Operations
160
Construction 138 158 721 842 191 188
Flat-rolled 257 264 762 877 -
Other 48 77 600 713 2010 2011
C onstruction F lat-rolled O ther
Total 443 499 727 836
26. 25
Cost Structure by Segment
Cost Structure of Steel Segment Cost Structure of Mining Segment
13% 10%
8% 25% 21%
8% 4%
4%
8% 8% 11%
4%
5% 6% 16%
7% 7% 22%
7% 17%
16%
15%
22%
16% 25%
14%
12%
21% 9%
19%
8% 12%
2010 2011 2010 2011
Iron ore Coking coal Scrap Raw materials Transportation Staff costs
Other raw materials Semi-finished products Transportation Depreciation Energy Other
Staff Depreciation Energy
Other
Cost Structure of Vanadium Segment
24% 19%
12%
14% 5%
9% 12%
12%
52%
41%
2010 2011
Raw materials Staff costs Depreciation
Energy Other
28. 27
FCF Generation
◦ Substantial free cash flow generation in 2011
US$ m
3 600
149
2 898 43 2 941
3 000
2 647
2 400
(443)
1 800
(818)
1 200
93 641
600
(1,281)
0
EBITDA 2011 Non-cash items EBITDA (excl. non- Changes in WC, excl Income tax paid CF from operating Interest paid & Capex CF from investing Free cash flow*
cash items) income tax activities conversion activities (excl.
premiums & capex)
premiums on early
repurchase of
bonds
* Free cash flow comprises cash flows from operating activities less interest paid, costs of early repurchase of debts and cash flows from investing activities
29. 28
Net Profit Reconciliation
US$ m
1000
182 886
800
71 704
19 633
161
600
453
400
200
0
Reported Net Conversion of Move to Net profit w/o Early Net profit w/o Increase in Net profit w/o
profit convertible Premium oneoffs repurchase of oneoffs & bond mining extraordinary
bonds due Listing 2013 bonds repurchase depletion items
2014 charge comparable
with 2010
30. 29
Quarterly Steel Products Output by Assets
Russia North America
‘000 tonnes ‘000 tonnes
2,858* 2,813 675 671
2,724
Europe South Africa
‘000 tonnes ‘000 tonnes
369
343
307 157 159 148
284
* Numbers may not add to totals due to rounding
31. 30
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 plc (“EVRAZ”) or any of its subsidiaries in any jurisdiction (including, without limitation, EVRAZ Group S.A.) (collectively,
the “Group”) 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 EVRAZ, the Group 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 the Group’s control that could cause the actual results, performance or achievements of the
Group 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 the Group’s 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 the Group’s present and future business strategies and the
environment in which the Group 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 each of EVRAZ and the Group 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 or the Group’s expectations with regard thereto or
any change in events, conditions or circumstances on which any such statements are 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.
