Slide 1: 22 July 2021 Magnitogorsk, Russia
22 JULY 2021 Magnitogorsk, Russia
Slide 2: Notes
Executive summary Market overview Key results Outlook Financial Results Appendix These materials are provided for information purposes only. This presentation includes the statements related to the future, which Notes reproduce the intentions, opinions and current expectations of the This presentati
Slide 3: Executive summary: key results
Executive summary Market overview Key results Outlook Financial Results Appendix 3,320 2,904 Finished products sales, Change quarter-on-quarter ths tonnes 2,223 (q-o-q) Revenue 51.8% 39.7% 41.9% Premium products, % Q2 ‘20 Q1 ‘21 Q2 ‘21 EBITDA margin Revenue, USD mln 1,268 2,185 3,255 p.p. EBITDA mar
Slide 4: Market overview
ON oa SNA 4 TIN Fai 2 nes Bi ee es Sar: ee era VV ‘MARKET OVERVIEW
Slide 5: China macro overview
Executive summary Market overview Key results Outlook Financial Results Appendix 51.3% 49.4% Activity expansion China’s GDP growth moderately PMI Activity decline slowed down, increasing by 7.9% y- (manufacturing)(1) 18.3% o-y in Q2 2021 6.5% 7.9% To provide further support to the 4.9% Changes in GD
Slide 6: Steel production in China in H1 grew by 11.8% y-o-y
Executive summary Market overview Key results Outlook Financial Results Appendix 33.8% Demand for metal products, y-o-y(1) 18.7% 17.2% 19.1% 14.4% 14.5% 15.0% 13.3% 13.1% 12.2% 10.1% 7.9% 3.8% 5.6% 3.0% -5.1% (3) Steel production in China in H1 grew (estimate) by 11.8% y-o-y to 563 mln tonnes, (fore
Slide 7: Russia macro overview
Executive summary Market overview Key results Outlook Financial Results Appendix 51.5% PMI (manufacturing)(1) 49.4% 50.4% 49.2% Activity expansion Compensatory GDP growth in Russia is Activity decline expected to reach 4-6% y-o-y in Q2, 31.3% reflecting recovery in business activity in the country C
Slide 8: Demand for metal products increased by 22.7% y-o-y in Q2
Executive summary Market overview Key results Outlook Financial Results Appendix The demand for metal products(1) The demand for steel products(1) in Q2 In Q2, the Government continued to implement its increased by 22.7% y-o-y in Q2 was mainly supported by strong national projects.(2) Traditionally,
Slide 9: Prices for metal products and key commodities
Executive summary Market overview Key results Outlook Financial Results Appendix Prices for metal products and key commodities USD per tonne Hot-rolled products In the second quarter, demand for rolled steel in key world regions continued to outstrip supply, 968 with prices rising steadily. In May,
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Slide 11: Total air emissions and LTIFR
Executive summary Market overview Key results Outlook Financial Results Appendix Total air Specific air emissions in emissions 17.8 17.6 17.4 18.0 H1 2021 decreased by 7.3% 17.2 -7.3% y-o-y, driven by an increase in Specific emissions, kg/t of metal products 15.1 the share of scrap in the 201.8 199.
Slide 12: Key production indicators and capacity utilisation rates
Executive summary Market overview Key results Outlook Financial Results Appendix Key production indicators Key capacity → Quarterly dynamics, 2019–2021 +3.1% utilisation rates ths tonnes Driven by a +2.6% favourable market Q2 2021, % environment Improved blast Coking coal concentrate Pig iron furnac
Slide 13: MMK Group finished products sales dynamics
Executive summary Market overview Key results Outlook Financial Results Appendix MMK Group finished products sales dynamics ths tonnes Steel Turkey Steel Russia Consolidated sales increased +14.3% by 14.3% q-o-q driven by high demand for metal products Consolidated sales by products Share of premium
Slide 14: Sales share by market, sector and region
Executive summary Market overview Key results Outlook Financial Results Appendix MMK Group's sale share Russia and CIS market sales International market sales by market by sector by region % ths tonnes ths tonnes 1,651 2,099 2,583 640 805 737 0% 4% 10% +6 Other(2) 16% 17% 17% 0 Other(1) 16% 26% 22%
Slide 15: Strategic projects update
Executive summary Market overview Key results Outlook Financial Results Appendix Blast furnace No. 9 Cold-Rolling Mill 1700 reconstruction Coke and by-product plant Production capacity 3,900 tonnes per day, 0.7 mln t effective addition of CRC Replacement of five batteries, reduction in dust emission
Slide 16: Q3 2021 outlook
Executive summary Market overview Key results Outlook Financial Results Appendix Q3 2021 The Group’s performance will be further boosted by: Finished products output Seasonal recovery of demand in Russia and continued favourable • Operational excellence initiatives conditions in global markets will
Slide 17: Financial results
FINANCIAL RESULTS
Slide 18: Key revenue drivers
Executive summary Market overview Key results Outlook Financial Results Appendix Key revenue drivers q-o-q, USD mln The Russian steel segment’s +49.0% revenue grew by % 107 3,255 77 Reflecting continued strong demand and 746 +28.3 Coal mining Other factors growing global prices 236 +42.2 Steel Turke
Slide 19: MMK Group's cost of sales and material costs
Executive summary Market overview Key results Outlook Financial Results Appendix MMK Group's cost of sales USD mln +28.6% mln 1,763 MMK Group’s cost of sales increased due to higher prices for -2% 7% Material costs key commodities on the back of USD mln continuing high output 9% 1,371 1491 2% 0.3% -
Slide 20: Slab cash-cost
Executive summary Market overview Key results Outlook Financial Results Appendix Slab cash-cost, q-o-q, USD/t +15.0% Slab cash cost increased q-o-q 50 -6 1 391 7 USD/t 340 Other Raw material mix FX effect 23% -1 Other(1) 24% Raw material prices 255 14% -1 Metal scrap USD/t 15% as the RUB corrected a
Slide 21: Key EBITDA drivers
Executive summary Market overview Key results Outlook Financial Results Appendix +97.7% Key EBITDA 696 23 5 -15 1,435 drivers Δ Steel Δ Coal mining Eliminations Turkey Key changes Q-o-q, USD mln – Sales volumes 726 – Sales mix Δ Steel – Prices Russia Steel Russia Sales volumes increased amid strong
Slide 22: CAPEX
Executive summary Market overview Key results Outlook Financial Results Appendix +137.3% Q-o-Q increase in CAPEX USD mln 337 % Volume growth, improved 56 +19 product mix in line with the Group’s schedule for implementing and financing investment projects under the Group’s strategy 14 +135 Cost leade
Slide 23: Strong financial profile
Executive summary Market overview Key results Outlook Financial Results Appendix Strong financial profile USD mln Credit rating at or higher than the sovereign rating Debt Net Debt Net Debt / EBITDA Standard & Poor's Our goal <1.0x Moody's 0.1 Fitch Group -0.01 0.00 -0.08 -0.06 -0.13 970 996 Debt st
Slide 24: Available liquidity analysis and debt repayment
Executive summary Market overview Key results Outlook Financial Results Appendix Available liquidity Debt repayment analysis schedule USD mln USD mln 2,260 average cost of debt 1,270 as of 30 June 2021 Available credit lines Significant liquidity cushion and a comfortable repayment schedule Cash and
Slide 25: Free cash flow structure
Executive summary Market overview Key results Outlook Financial Results Appendix Free cash flow structure USD mln Q1 2021 Key factors 726 EBITDA +97.7% Increase amid a favourable market environment Q2 2021 EBITDA 1,435 Increase in sales volumes on Change in -324 the back of high global steel NWC pri
Slide 26: Dividends payout dynamics
Executive summary Market overview Key results Outlook Financial Results Appendix Dividends payout dynamics USD mln Dividends FCF Dividend per share, $ Dividend yield(¹) The Group remains committed to its dividend policy and previous statements. Considering our high margins, the Board of Directors is
Slide 27: Appendix
APPENDIX
Slide 28: 2019-2021 quarter dynamics
Executive summary Market overview Key results Outlook Financial Results Appendix Back to the initial slide 2019-2021 quarter dynamics ths tonnes Coal concentrate Pig iron Steel 3,401 3,312 3,300 3,194 3,091 3,070 3,022 3 mln tonnes 2,882 2,640 2,560 2,604 2,521 2,572 2,452 2,379 2,355 2,358 2,089 2
Slide 29: MMK Group revenue breakdown by segments
Executive summary Market overview Key results Outlook Financial Results Appendix Back to the initial slide MMK Group revenue breakdown by segments USD mln 3,255 77 236 Coal mining 2,185 1,999 2,009 60 Steel Turkey 1,852 166 59 48 136 1,722 Steel Russia 144 1,710 46 59 54 1,565 165 110 113 36 3,179 1
Slide 30: Cash-cost historical dynamics
Executive summary Market overview Key results Outlook Financial Results Appendix Back to the initial slide 406 Cash-cost historical 355 dynamics 336 329 USD/t 319 314 305 301 300 HRC 291 283 278 269 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 2020 2021 Slab cash-cost 18% 17% historical 25% 23%
Slide 31: CAPEX quarterly and yearly dynamics
Executive summary Market overview Key results Outlook Financial Results Appendix Back to the initial slide Quarterly dynamics 337 USD mln 254 229 248 84 Maintenance 176 191 159 164 102 123 104 Development 130 142 87 82 69 76 51 253 69 146 131 125 95 104 79 94 83 73 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2019
Slide 32: Net Working Capital dynamics
Executive summary Market overview Key results Outlook Financial Results Appendix Net Working Capital dynamics USD mln The working capital build-up in 18.8% Q2 2021 was 15.4% Target 14.5% NWC no more than 14-15% 13.8% 12.9% 12.0% of the revenue mln 10.7% 10.5% 10.1% 1,361 due to the increase in sales
Slide 33: Key indicators breakdown by currency
Executive summary Market overview Key results Outlook Financial Results Appendix Back to the initial slide Key indicators breakdown EBITDA Cost of sales by currency sensitivity breakdown Variable USD Rubles Euro Other % Effect on Fixed of change EBITDA, Revenue in price USD mln 60% 40% 90% Cost of s
Slide 34: Investor Relations contacts
Russia, Magnitogorsk Veronika Kryachko Ilya Nechaev Kirova street, 93 Head of Investor Relations Investor Relations manager +7 (915) 380-62-66 +7 (909) 093-08-98 kryachko.vs@mmk.ru nechaev.ia@mmk.ru