Slide 1: IFRS financial statements for Q1 2016
IFRS financial statements for Q1 2016 06 May 2016
Slide 2: Key highlights for MMK Group
2 KEY HIGHLIGHTS FOR MMK GROUP Q1 2016 Financial results Revenue USD 1,050 mln down 11.1% q-o-q Cost of sales USD 789 mln down 11.6% q-o-q EBITDA USD 287 mln up 4.4% q-o-q EBITDA margin 27.3% up 4.0 p.p. q-o-q Net loss USD 157 mln as compared to loss of USD 125 mln in Q4 2015 Cash cost of slab USD 1
Slide 3: High capacity utilisation
3 HIGH CAPACITY UTILISATION Key production indicators, ths tonnes Q1 ‘16 Q4 ‘15 % Q1 ‘16 Q1 ‘15 % • MMK Group’s finished steel products output in Q1 2016 was up 4.5% q-o-q. Cast iron 2,403 2,541 -5.4% 2,403 2,357 2.0% Crude steel incl. 3,025 2,897 4.4% 3,025 3,228 -6.3% • MMK Group High Value Added
Slide 4: MMK Group sales structure on the Russian and CIS market
MMK GROUP SALES STRUCTURE ON THE RUSSIAN AND CIS 4 MARKET Sales structure on the Russian and CIS market, ths • Total sales volume on the Russian and CIS market in Q1 2016 was 1,864 ths tonnes, down 93 ths tonnes, or 4.7% q-o-q. This was due to overall seasonal tonnes decline in domestic demand for s
Slide 5: MMK Group position on key international markets
5 MMK GROUP POSITION ON KEY INTERNATIONAL MARKETS Sales structure on international markets, ths tonnes • Sales on international markets in Q1 2016 amounted to 922 ths tonnes, up 212 ths tonnes, or 29.9% q-o-q. This increase demonstrates the Company’s 710 922 flexibility in reorienting the flow of sa
Slide 6: Key financial highlights of MMK Group
6 KEY FINANCIAL HIGHLIGHTS OF MMK GROUP • Revenue for Q1 2016 amounted to USD 1,050 mln, down 11.1% q-o-q. This was primarily due to a decrease in the average sales price in US dollars by 16.8% q-o-q as a result of seasonal weakening of the business and the depreciation of the ruble. Steel segment r
Slide 7: Key financial highlights of MMK Group
7 KEY FINANCIAL HIGHLIGHTS OF MMK GROUP Quarterly EBITDA dynamics, mln USD • A decrease in global steel prices and seasonal weakening of the business on the domestic market in Q1 2016 contributed to decrease in the average sales 264 price. 248 • EBITDA for the steel segment (Russia) in Q1 2016 incre
Slide 8: Analysis of key financial highlights
8 ANALYSIS OF KEY FINANCIAL HIGHLIGHTS Analysis of revenue, Q1 2016 q-o-q, mln USD • The key factors impacting revenue in Q1 2016 were lower steel prices and FX rate fluctuations. -81 44 • In Q1 2016, the Company’s profit amounted to USD 157 mln. Key one-off -78 37 -34 -19 1 000 factors included an
Slide 9: Depreciation and capex dynamics
9 DEPRECEATION AND CAPEX DYNAMICS Quarterly depreciation dynamics, mln USD • MMK Group’s capex in Q1 2016 amounted to USD 78 mln. The decrease on the previous quarter was due to completion of scheduled 250 maintenance at blast furnace no. 9. • The reduction in depreciation in Q1 2016 vs the previous
Slide 10: Sustainable positive free cash flow generation
10 SUSTAINABLE POSITIVE FREE CASH FLOW GENERATION Net working capital dynamics, mln USD Free Cash Flow (FCF), mln USD 1 400 As of the end of Q1 2016 net working capital / revenue ratio amounted to 19.4% 300 24 1 200 1 000 -137 800 200 1 245 600 1 214 1 203 287 -78 1 031 967 400 812 815 100 748 174 2
Slide 11: High operational performance supports efficient decrease of the debt load
HIGH OPERATIONAL PERFORMANCE SUPPORTS EFFICIENT 11 DECREASE OF THE DEBT LOAD, MLN USD • MMK Group’s net debt as of the end of Q1 2016 decreased to USD 929 mln, down by USD 195 mln compared to 31 December 2015. • This decrease supported further reduction in net debt / EBITDA ration to 0.62x — the low
Slide 12: MMK Group's debt profile
12 ММК GROUP’S DEBT PROFILE Debt and cash funds structure by currency, mln USD • The share of debt which is denominated in foreign currencies (USD+EUR) Debt C&CE and Deposits amounted to approx. 86% as of 31 March 2016. 2 000 1,847 723 286 1,606 750 677 • The volume of cash funds and short-term depo
Slide 13: Structure of operating costs and cash costs
13 STRUCTURE OF OPERATING COSTS AND CASH COSTS MMK Group operating costs, mln USD • In Q1 2016, the share of metal scrap significantly increased in the structure of OJSC MMK’s material costs, due to an increase in capacity utilisation of EAFs during maintenance at a blast furnace amid higher product
Slide 14: Comment on market situation
14 COMMENT ON MARKET SITUATION • Currently, early signs of a recovery in domestic demand and a gradual increase in ruble prices on the domestic market towards parity with export prices enable the Company to expect an improvement in its financial metrics in Q2 2016.
Slide 15: Disclaimer
15 DISCLAIMER •THIS PRESENTATION IS FOR INFORMATION ONLY. •THIS PRESENTATION IS FOR DISTRIBUTION IN UK ONLY AMONG THE PEOPLE HAVING PROFESSIONAL SKILL IN THE ISSUES RELATED TO INVESTMENTS WITHIN THE MEANING OF ARTICLE 19(5) OF DIRECTIVE ON FINANCIAL ADVERTISEMENT APPROVED IN 2005 ON THE BASIS OF LAW