Nlmk · RUS:NLMK
Nlmk — VTB Capital Investment Forum "Russia Calling!" 2011
11 slides from Nlmk's conference presentation, Oct 5, 2011
Slide 1: NLMK Corporate Presentation
NLMK CORPORATE PRESENTATION VTB CAPITAL INVESTMENT FORUM “RUSSIA CALLING!” VLADIMIR LISIN CHAIRMAN OF THE BOARD OF DIRECTORS Moscow, 5 October 2011
Slide 2: Disclaimer
Disclaimer This document is confidential and has been prepared by NLMK (the “Company”) solely for use at the investor presentation of the Company and may not be reproduced, retransmitted or further distributed to any other person or published, in whole or in part, for any other purpose. This documen
Slide 3: NLMK's Strategic Objectives for 2000-2011
NLMK’s STRATEGIC OBJECTIVES FOR 2000 – 2011 • LAY THE FOUNDATION FOR LONG-TERM GROWTH • RETAIN COST LEADERSHIP AND ENHANCE OPERATIONAL STABILITY • ENSURE SUSTAINABLE GROWTH AND REDUCE DEPENDENCE ON MARKET CYCLES • IMPROVE OPERATING PERFORMANCE AND DEVELOP HIGH SOCIAL RESPONSIBILITY STANDARDS 3
Slide 4: Growth Based on Investments
GROWTH BASED ON INVESTMENTS • C. $10 billion invested into Russian asset PRODUCTION CAPEX development has delivered: $2.5 $ billion mln t 2.0 19 1.9 $2.0 17 • X2.5 increase in labor efficiency 1.5 15 $1.5 1.1 13 1.0 $1.0 11 0.6 0.6 • 30% lower fixed asset depreciation 9 $0.5 0.2 0.2 0.3 0.1 0.2 7 $0
Slide 5: Acquisitions for Sustainable Growth
ACQUISITIONS FOR SUSTAINABLE GROWTH • Timely investments into high quality VERTICAL INTEGRATION AND DIVERSIFICATION assets 100% 100% 100% – Stoilensky, Altai‐Koks 80% 80% – VIZ‐Stal, DanSteel, NLMK Indiana, Steel 50% Invest and Finance 40% – NLMK Long Products 20% 0% 0% – Coal deposits Iron ore Scra
Slide 6: Expanding Opportunities to Finance Growth
EXPANDING OPPORTUNITIES TO FINANCE GROWTH • NLMK’s IPO (2005) created an efficient CAPITALIZATION FOR TOP-30 STEEL MANUFACTURERS* financial tool for the company $/t of liquid steel $1,200 • Favorable leverage and investment grade credit ratings $800 $400 • Stable dividend payments support attractive
Slide 7: Environmental and Social Responsibility – A Bedrock for Long-Term Stability
ENVIRONMENTAL AND SOCIAL RESPONSIBILITY – A BEDROCK FOR LONG-TERM STABILITY REDUCED ENVIRONMENTAL FOOTPRINT • C. $700 mln in environmental investments Air emission and water discharge trends in 2000 ‐ 2010 50 kg/t of steel m3/t 10 45 8 • 23% average annual salary growth 40 6 supported 100% improveme
Slide 8: Further Strategic Initiatives
FURTHER STRATEGIC INITIATIVES • HIGHER SALES VOLUMES AND IMPROVED QUALITY GLOBALLY – Higher output and improved quality for the long products division – Develop rolling assets in the EU and USA – Expand presence in niche segments (autosteel, metalware, transformer steel, plates) • FULL VERTICAL INTE
Slide 9: Higher Output and Quality Improvements
HIGHER OUTPUT AND QUALITY IMPROVEMENTS • Russian assets continue to drive growth GROWTH IN SLABS CAPACITY MATCHED WITH ROLLING 8 mln t – 3.4 mln t (+36%) increase in capacity 7 EU assets at the Lipetsk site 6 3.4 – 1.5 mln t (+70%) Kaluga mini‐mill 5 Output growth in Russia 4 – Rolling capacity expa
Slide 10: Upstream Vertical Integration – A Top Priority Investment
UPSTREAM VERTICAL INTEGRATION – A TOP PRIORITY INVESTMENT • Retain full self‐sufficiency in iron ore in IRON ORE OUTPUT GROWTH 2014 ‐ over $1 bn 20 mln t 15 6 • Over 50% self‐sufficiency in coking coal from the development of Zhernovskoye 10 and Usinskoye deposits – about $2.5 bn 12 14 12 5 • C.80%
Slide 11: Results Prove Efficiency of Chosen Strategy
RESULTS PROVE EFFICIENCY OF CHOSEN STRATEGY • Margins shifting away from steelmaking COST OF RAW MATERIALS PER TONNE OF STEEL AND HRC – considered in NLMK’s upstream $1,000 development plans $/t $800 12% $600 • Expanded rolling base in developed markets to significantly increase sales $400 35% oppor
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