2015 operational and financial...

2015 FINANCIAL RESULTS PRESENTATION

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which were prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) and include the financial results of the

Company and its subsidiaries.

DISCLAIMER

2

2015 OPERATIONAL AND FINANCIAL RESULTS

3

Operational results, mln t. Financial indicators, RUB mln

Margin indicators, %

* Coke 6% moisture content including metallurgical coke, foundry coke, coke nut, coke breeze, coke dust

47 233

(30 616)

11 492

(7 701) (6 204)

53 550

(36 437)

11 044

(3 358) (6 476)

Revenue Cost of Sales EBITDA Net loss Capex*

2014

2015

* Purchase of property, plant and equipment

29

10

15

24

7

13

28

4

15

35

17

24

32

15

21

Gross profit margin Operating margin EBITDA margin

2011 2012 2013 2014 2015

Source: IFRS consolidated financial statements for the year ended 31 December 2015

• Gross production of pig iron at PAO Tulachermet decreased by 6% from 2,18

to 2,06 million tonnes y-o-y mainly due to the scheduled maintenance of blast

furnace №3 in July 2015 and also because of higher volume of premium

grade pig iron production.

• IMH Coal division increased its output by 8% y-o-y to 1,89 million tonnes of

coking coal. Butovskaya coal mine production achieved 1 million tonnes

(+16%). Uchastok Koksovy open pit production remained at the same level y-

o-y – 0,89 million tonnes.

• OAO Koks increased production of coke by 5% y-o-y from 2,60 to 2,73 million

tonnes due to increased demand on global markets.

• OAO Kombinat KMAruda in 2015 increased iron ore concentrate output by

2% y-o-y to 2,23 million tons. Production of iron ore rose by 2% to 4,96 million

tonnes.

Production 2014 2015 15/14,%

Pig iron 2,18 2,06 -6%

Coke, 6% moisture 2,60 2,73 5%

Iron ore concentrate 2,18 2,23 2%

Iron ore 4,89 4,96 1%

Coking coal 1,75 1,89 8%

2015 FINANCIAL RESULTS REVIEW (1/2)

4

EBITDA bridge, RUB mln

Operating cost structure in 2015, %


*As of 31 December 2014 and 2015 respectively.

**Adjusted EBITDA is calculated as earnings before income tax, interest expense, exchange gain/loss,

depreciation, amortization, impairment and other non-cash items.

2014 2015 15/14,%

Revenue 47 233 53 550 13%

Cost of sales (30 616) (36 437) 19%

EBITDA 11 492 11 044 -4%

% Margin 24 21

Loss for the period (7 701) (3 358) -56%

Net debt* 38 697 51 996 34%

Adjusted EBITDA** 12 587 13 385 6%

Financial highlights, RUB mln

11 04411 492

4 172

16 018

31 3641 996

25 276

9 295 1 197

3 9672 771

Costs

*Changes in finished goods and work in progress included

**Wages and salaries including administrative salaries and associated taxes

Raw materials and supplies

55%

Wages and salaries including associated taxes

13%

Energy3%

Distribution costs9%

Depreciation and amortisation

7%

General and administrative

expenses10%

Impairment of PPE and goodwill

0%

Taxes other than income tax

1%

Other2%

Revenues

7 085

9 797

12 34212 787

2012 2013 2014 2015

Net cash from operations, RUB mln

6 651 7 016

12 58713 385

15% 16%

27% 25%

2012 2013 2014 2015

Loan covenant EBITDA margin, %

Loan covenant EBITDA, RUB mln

2015 FINANCIAL RESULTS REVIEW (2/2)

5

45 70443 036

47 233

53 550

2012 2013 2014 2015

Revenue, RUB mln

34 765

30 842 30 616

36 437

2012 2013 2014 2015

COGS, RUB mln

1 997

(2 436)

(7 701)

(3 358)

2012 2013 2014 2015

Net Income / Loss, mln RUB

Net Income / (loss), RUB mln

8 776

6 779 6 8577 489

2012 2013 2014 2015

CAPEX (1), RUB mln

(1) Capital expenditures comprise additions to property, plant and equipment and intangible assets, including acquisitions resulting from business combinations


GLOBALLY DIVESIFIED CUSTOMER BASE

6

30 2932

33

49 46

38

8 10

147

8

18

2522

44

47

46

3629 29

40

17

713

7 8 8

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2009 2010 2011 2012 2013 2014 2015

US Turkey & Middle East Europe Asia

Source: Company’s and traders’ data, IFRS consolidated financial statements for the year ended 31 December 2015

Geographical breakdown of pig iron export sales, %

Export Sales, RUB mln

REVENUE BY PRODUCTS

7

Export & Domestic sales, RUB mln

Domestic Sales, RUB mln

21 572

13 213 12 559

31 978

34 02030 477

0

10 000

20 000

30 000

40 000

50 000

60 000

2015 2014 2013

Export

Domestic

Total:

43,036

Total:

47,233

Total:

53,550

10 072

5 892 5 981

5 055

3 361 3 784

4 167

2 093 1 092

2 291

1 570 1 702

0

5 000

10 000

15 000

20 000

25 000

2015 2014 2013

Coke & coking products Pig iron & pig iron products Coal & concentrate Other

Total:

12,916Total:

12,559

Total:

21,585

5 852 4 394 4 616

25 074 28 90524 136

1 052721

1 725

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

2015 2014 2013

Coke & coking products Pig iron & pig iron products Other

Total:

30,477

Total:

34,020Total:

31,978


Iron ore and pig iron

61%

Coke31%

Coal8%

SEGMENT RESULTS OVERVIEW

8

2 288

3 681

7 467

3 353

8%13%

22%

11%

2012 2013 2014 2015

Adjusted EBITDA margin, %

1 9881 570

2 838

5 158

8% 8%

14%

19%

2012 2013 2014 2015


1 310 1 097

859

2 904

16%16%

10%

27%

2012 2013 2014 2015


25 46927 651

33 10331 364

2012 2013 2014 2015

11 638

10 016 10 474

16 018

2012 2013 2014 2015

1 734 1 778

2 170

4 172

2012 2013 2014 2015

(1) (1) (1)

Key segments performance – External revenue, RUB mln

Revenue structure, RUB mln

Key segments performance – Adjusted EBITDA, RUB mln

Coal Coke Iron ore and pig iron

Coal Coke Iron ore and pig iron

By segment(2), 2015

Total

51 554

(1) Adjusted EBITDA margin calculated as Adjusted EBITDA / total revenue (including intra-segment sales)

(2) IMH Coal, Coke, Iron and pig iron divisions


2 241 2 201 2 181 2 227

4 800 4 828 4 885 4 962

2012 2013 2014 2015

Iron ore concentrate Iron ore

2 121 2 098

2 184

2 059

2012 2013 2014 2015

OPERATING RESULTS REVIEW

9

1 592 1 661 1 7471 889

2 1612 403 2 412

2 201

2012 2013 2014 2015

Coking coal Coal concentrate

2 5952 552

2 601

2 727

2012 2013 2014 2015

Pig iron production, x000 t.

Coking coal and coal concentrate production, x000 t.

Coke production, x000 t.

Iron ore and ore concentrate production, x000 t.

Source: Company data, IFRS consolidated financial statements for the year ended 31 December 2015

29,01 30,24 30,48 32,20 30,37 32,73

56,26 55,52

72,88

USD exchange rate

632 612697

798898

829705

858782

794727

2008 2009 2010 2011 2012 2013 2014 30.06.201531.12.2015

Liabilities Net debt

18 333 18 509 21 24525 705 27 279 27 146

39 65147 660

57 018

44 10652 984

2008 2009 2010 2011 2012 2013 2014 30.06.201531.12.2015

Liabilities Net debt

DEBT PORTFOLIO

10

IMH debt portfolio(1), RUB mln IMH debt portfolio(1), USD mln

29,01 30,24 30,48 32,20 30,37 32,73

56,26 55,52

72,88

USD exchange rate

Debt portfolio(1) by banks, % Debt maturity profile(2), RUB mln

(1) as of 31.12.2015 (management accounting report)

(2) as of 01.04.2016 (management accounting report)

Source: Company data, Bloomberg

Eurobond39%

Sberbank28%Bank Rossiya

10%

MKB9%

Gazprombank9%

Absolut Bank5%

978912309

3649

3336

2638

32762080

942 652

18348

2016 2017 2018 2019 2020 2021 2022

Eurobonds Credit facilities Refinanced*

* Revolver credit facilities & available unwithdrawn credit limits

OVERVIEW OF KEY FINANCIALS

11

Income statement highlights Balance sheet highlights

Cash flow highlights

RUB mln 2014 2015

Revenue 47 233 53 550

Cost of sales (30 616) (36 437)

Gross profit 16 617 17 113

Gross profit margin, % 35% 32%

Operating profit 8 019 8 027

Operating profit margin, % 17% 15%

Loss 7 701 3 358

Adjusted EBITDA 12 587 13 385

RUB mln Dec. 31, 2014 Dec 31, 2015

Total assets 62 311 79 356

Total liabilities 51 328 71 585

Total equity 10 983 7 771

PP&E 38 125 41 567

Total debt 39 552 56 121

Cash & cash equivalents 855 4 125

Net debt 38 697 51 996

RUB mln 2014 2015

Loss before income tax (8 802) (4 660)

Operating cash flows before working

capital changes

11 824 11 340

Net cash from operating activities 12 342 12 787

Net cash used in investment activities (4 494) (12 584)

Net cash used in financing activities (7 449) 2 602


2015 operational and financial...

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