Sunday , August 1 2021

Severstal will announce an updated strategy during the Investor Day 2018


PAO Severstal, one of the world's leading vertically integrated steel and mining companies, today is holding the annual investor day in London. During the event, the top management will announce an updated strategy of the company in order to further increase the financial results, as well as to create maximum value and return on investment to shareholders.

Prior to the meeting, PAO Severstal provides the following information to market participants:

  • Severstal remains the world leader in the industry in terms of efficiency, showing the world's largest EBITDA margin among steel manufacturing companies, creating a positive free cash flow throughout the cycle and achieving set goals;
  • In order to provide additional indicator growth, the company renewed its proven efficiency strategy, retaining its core strengths, but adding new elements. The company's new vision is to become the leader of future metallurgy and the company of the first choice for customers, employees and partners.
  • In order to achieve this, we have identified new strategic priorities for ourselves, which will help us to distinguish ourselves from our competitors, which are excellent client experience, leadership spending and new opportunities. These strategic priorities will be implemented based on the company's unique corporate culture.

Within the priorities of "excellent customer experience", we intend to offer our customers unique offers on all our target markets.

As part of the "cost management" priority, our goal is to achieve significant benefits in terms of producing basic products compared to competitors. Part of our "smart cap" will be focused on the realization of this goal, including investments in increasing the volume of raw materials extraction, as well as the production of iron and steel, which will lead to further cost savings.

As part of the strategic priority of "new opportunities", our task is to approach and successfully use advanced technologies and new business models that appear on the market.

The introduction of this set of initiatives will enable us to achieve the previously announced financial goal – to increase EBITDA by 10-15% per year in the next five years (excluding prices / macro factors).

The company's financial strategy will be implemented in accordance with the previously announced goals:

  1. In 2012 – 2018 The investment program of the company amounted to about 800 million dollars. As previously announced, we are launching a program to renew the first redeployment capacities, which will require significant investments. In 2019, our investment program will be about $ 1.4 billion, of which a significant part is development projects (~ 75%). The cost of maintaining existing capacity remains at $ 358 million in 2019. After 2022, when our key projects are realized, the investment program will gradually normalize to 900 million, and by 2023 it will decrease to around 750 million. Severstal will continue to adhere to the "smart caps" our projects should exceed 20%. Key investment projects, effects on EBITDA, and IRR for each of them will be presented in the presentation of the company's financial director.
  2. The dividend policy of the company remains unchanged. However, in order to maximize the value creation for investors, for the period of the intensive phase of the investment program, Severstal will use the indicator of "normalized free cash flow" for the calculation of dividends. This means that investments that exceed the "base" level of previous years to $ 800 million will be excluded from the calculation of the dividend base.
  3. Our goal is to maintain a comfortable debt burden of the company: the ratio of net debt to EBITDA will not exceed the previously announced target of 1.5k.

"As a global leader in efficiency and continuous improvement of our results in the history of the company's development, we are looking for new growth points and we see significant opportunities for ourselves. We have developed a growth strategy with very clear points of growth and a financial goal – to add 10-15% EBITDA annually. At the same time, we will strive to maintain a cautious approach to investment, and we expect that the temporary growth of our capital will not affect the company's "dividend" history, which together with promising development projects will enable us to create additional value t for our shareholders, "Severstal Company Alekander Shevelev.

The presentation of the presentation of the presentation, during which the team of the top managers of Severstal will comment in more detail on the above statements, starts at 12:00 in the morning (15:00 Moscow time) and will be available on the company's website at http: // / eng / ir / cmd /

This disclosure of PJSC Severstal contains certain statements about the future regarding the company's production activities and expected results, economic indicators, financial condition, projects and development perspectives. Anything that is not achieved at the time of publication of this information relates to statements concerning the future. The words "can", "will," "expect," "evaluate," "predict," "presume," "continue," "try," "consider," and other words or expressions similar to them or negative positive) forms indicate the predictive nature of the statement made on the basis of assumptions and estimates that a company considers reasonable at the time of disclosure. These promising future statements are linked to uncertainties, assumptions, and inherent risks, both general and private. There is a possibility that the assumptions, intentions and other statements in the future can not be realized. The company warns that actual results may differ from prospect statements that apply only at the time of this annual report. The company does not approve and does not guarantee that the results of activities expressed in prospective statements will be achieved, and should not be considered as most likely

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