Slide 1: Supplying the world with quality iron ore pellets
Supplying the world with QUALITY iron ore pellets for over 35 YEARS
Slide 2: Disclaimer
Disclaimer This document is being supplied to you solely for your information and does not constitute or form any governmental or regulatory body without the prior written consent of the Company. part of any offer or invitation or inducement to sell or issue, or any solicitation of any offer to Cert
Slide 3: Introduction
Introduction Michael Abrahams
Slide 4: Chris Mawe, Chief Financial Officer
Chris Mawe, Chief Financial Officer 4
Slide 5: 2015: strong performance & continues into January & February 2016
2015: strong performance & continues into January & February 2016 – Record operational performance US$M (unless otherwise stated) 2015 2014 % Change • Record production volumes Total production (kt) 11,662 11,021 5.8% • Record output of 65% Fe pellets, c. 80% of output Sales volumes (kt) 11,330 11,1
Slide 6: Stable pellet premiums, higher quality & strong cost reduction partially offset lower prices
Stable pellet premiums, higher quality & strong cost reduction partially offset lower prices EBITDA waterfall 2014 vs. 2015 US$M – Platts 62% Fe price declined 42% reducing turnover by 496 467 US$467M – Compensated by US$336M of savings • Reduced seaborne freight costs 17 48 61 • Increased volume an
Slide 7: Continued strong cost management
Continued strong cost management 30% reduction in 2015 C1 cash cost US$ per tonne Steadily improved competitiveness 45.9 8.0 US$2BN investment, rigorous & continual cost management since IPO have steadily increased 2.7 37.9 4.1 competitiveness 0.8 0.8 31.9 Cost ranking (from lowest to highest) of se
Slide 8: Good cashflow generation in low iron ore price environment
Good cashflow generation in low iron ore price environment Movement in net debt US$M 47 45 78 693 678 206 33 11 32 65 Opening net debt (1 Net CF before Interest Tax Sustaining capex Project capex Dividends paid Translation & other Ferrous disposal Net debt 1 Jan 2015) interest & tax proceeds – US$20
Slide 9: Active management of debt maturity profile & gearing level
Active management of debt maturity profile & gearing level Cash movement as of 31 December 2015 – Successfully moved bond maturity from 2016 to 2018 & 2019 US$M – Repaid US$240M of debt 76 206 65 42 78 – Repaid US$154M of April 2016 bonds – Sold stake in Ferrous Resources for US$42M 394 – Significan
Slide 10: Ferrexpo is a strong business capable of remaining profitable & cash generative
Ferrexpo is a strong business which is CONCLUSION FINANCIAL REVIEW capable of remaining profitable & cash Strong financial performance underpinned by: generative through the business cycle. – Production We continue to develop the asset over • Increased volumes the long term. • Higher quality • Lower
Slide 11: Kostyantin Zhevago, Chief Executive Officer
Kostyantin Zhevago, Chief Executive Officer 11
Slide 12: Capital investment reflects strategy to increase quality & reduce costs
Capital investment reflects strategy to increase quality & reduce costs Over US$2BN invested since IPO 31% increase in Fe output & 29% increase in volumes US$M FYM capex, development of new FPM capex, incl 12,000 11,662 135 mine & facilities, total modernisation & quality +31% US$595M upgrade progra
Slide 13: Supplier to world's top steel mills
Supplier to world’s top steel mills Sales volume by region 2015 shipments by product 49% 49% 100% 50% 2015 2014 80% 40% 60% 30% 40% 25% 22% 20% 20% 0% 12% 11% Central & China North East Western Turkey, Middle % of volume 10% Eastern Asia Europe East & India 10% 8% 8% 6% Europe Ferrexpo Basic Pellets
Slide 14: Estimated breakdown between blast furnace & DR pellets
Estimated breakdown between blast furnace & DR pellets Direct Reduction Blast Furnace n/c 10.3 Vale 16.5 23.9 (+45%) 5.7 LKAB 11.3 (+5%) 6.0 13.7 (+21%) 11.6 11.6 (-2%) 11.4 Samarco 12.1(+4%) 11.0 Ferrexpo 11.7 (+6%) Metalloinvest 4.7 7.4 (+57%) 3.7 Cliffs 7.6 7.1 (-7%) 1.7 (+29%) 2.2 IOC 6.6 6.8 (+
Slide 15: Ferrexpo is the lowest cost pellet producer in the world
Ferrexpo is the lowest cost pellet producer in the world & 3rd largest pellet exporter Lowest cost pellet producer Ferrexpo has a long-life asset, well invested production FOB cost curve, pellets, 2016 Y-axis: Cost ($/t) facilities, a competitive cost base, integrated logistics Cliffs X-axis: Cumula
Slide 16: Ukraine
Ukraine – 2015 GDP declined for second year in a row, economy starting to show signs of stabilisation – IMF rescue package contingent on reforms being passed in parliament – Situation remains fragile in east of country, Russia filed lawsuit against Ukraine over US$3BN bond – BUT: – Exporters benefit
Slide 17: Ferrexpo a world class iron ore pellet producer
Ferrexpo a world class iron ore pellet producer Summary – Ferrexpo is a world class operator with a well invested asset base – It has c. 10% market share of the world pellet market – It’s product is in demand from premium steel mills around the world – Prudent investment of past delivering benefits
Slide 18: Questions
ro | l fh q Questions e cae FERREXPO
Slide 19: Appendix
Appendix 19
Slide 20: 2015 income statement
2015 income statement Before Before Special Year-ended Special Year-ended US$M special special items 31.12.15 items 31.12.14 items items Revenue 961 - 961 1,388 - 1,388 Cost of sales (447) - (447) (648) - (648) Gross profit 514 - 514 740 - 740 Selling and distribution expenses (226) - (226) (311) -
Slide 21: A well invested established asset with a high quality customer portfolio
A well invested established asset with a high quality customer portfolio Largest resource base in Europe World class asset – Consistent performer & increasing quality PRODUCTION over us$2bn invested since IPO 12,000 Total pellet production 100% DEVELOPMENT % of 65% Fe pellet production LICENCE MAINT