Evraz PLC · LSE:EVR
Evraz — BCP Securities Investor Conference, Moscow 2006
26 slides from Evraz's conference presentation, July 2006
Slide 1: BCP Securities Investor Conference Moscow
BCP SECURITIES INVESTOR CONFERENCE MOSCOW JULY, 2006
Slide 2: Disclaimer
Ii] . Disclaimer This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of Evraz Group S.A. (Evraz) or any of its subsidiaries in any jurisdiction or an inducement to enter into investme
Slide 3: Evraz Highlights
Evraz Highlights = Vertically integrated steel and mining business, among the 15 largest steel producers in the world = 2005 Production of 13.9 million tonnes of crude steel and 12.1 million tonnes of rolled products = 2005 EBITDA Margin of 28.6% is in the Top 10 globally = Leader in Russian long pr
Slide 4: Top Russian Steel Producer
Chios. Top Russian Steel Producer Evraz Group’s main locations Top Russian steel producers Output of Russian assets Russian —_(mt) Main Vitkovice Steel ats . 0 ; tanking Company 2003 2004 2005 products a BR ° 5 1 EvrazGroup 13.9 43.743.8 Long A Aes 2 MMK 11.5 11.311.3 Flat/long Stratcor 3 Severstal
Slide 5: Vision and Strategic Goals
a =a Vision and Strategic Goals Evraz Group’s Vision is to be a world class steel and mining Company and one of the Top 5 most profitable steelmakers globally by ROCE and EBITDA margin Leader in the construction and railway steel product markets in Russia and CIS Global player with strong position i
Slide 6: Vision and Strategic Goals
Ii] Vision and Strategic Goals Evraz Group’s Vision is to be a world class steel and mining Company and one of the Top 5 most profitable steelmakers globally by ROCE and EBITDA margin Leader in the construction and railway steel product markets in Russia and CIS Global player with strong position in
Slide 7: Well-positioned in High Growth Domestic Market
Well-positioned in High Growth Domestic Market Exposed to high growth markets Russian and CIS steel consumption remains below global benchmarks Key sectors have shown very robust demand growth in 2005 Russian sales remain high at more than 60% in volume Stable favorable domestic pricing environment
Slide 8: Capitalising on the Growing Construction Market
Capitalising on the Growing Construction Market = Reinforcing long product leadership in Russia and CIS = Construction growth in Russia and CIS continues to outperform GDP Construction Output Forecast to Exceed GDP Growth 400 - 2002 =100% Russian Sales Product Mix 2005, '000 tonnes = 9 350 — GDP ; e
Slide 9: Strengthening strategic partnership with Russian Railways
—w =e 8 ay Lares. NOU g Strengthening strategic partnership with Russian Railways = Rail product growth driven by US$21 billion investment in railway infrastructure and rolling stock Increasing market share in commercial segment of Russia and CIS Penetrating export markets Steel Consumption Growth S
Slide 10: Vision and Strategic Goals
Ii] Vision and Strategic Goals Evraz Group’s Vision is to be a world class steel and mining Company and one of the Top 5 most profitable steelmakers globally by ROCE and EBITDA margin Leader in the construction and railway steel product markets in Russia and cISs Global player with strong position i
Slide 11: Export Markets
Export Markets Non - Russian Sales Product Mix 2005 2005 Non-Russian Revenue Mix \ Others ‘000 tonnes 4,680 15% Taiwan 50 109 Thailand 431 1,252 18% BSemi-finished steel_@ Railway sector D Construction sector OPlates @ Other Philippines Tran Vietnam 8% ae B% Slab/Billet Portfolio Flexibility Portfol
Slide 12: Establishing Presence in Flat Markets
Establishing Presence in Flat Markets = Expand presence in the attractive flat product markets through selective M&A = Build a flexible world-class semis export business reaching 100% penetration in key clients segments and 50% long-term contracts share of slab sales Palini e Bertoli Vitkovice Steel
Slide 13: Global Player With Growing Focus on Flat Markets
Global Player With Growing Focus a on Flat Markets = Semis export markets remain volatile = Flat product market presence provides exposure to the benefits and a possible platform for regional consolidation process = Strong position in growing Central and South European plate markets Slab pricing vs.
Slide 14: Vision and Strategic Goals
Ii] Vision and Strategic Goals Evraz Group’s Vision is to be a world class steel and mining Company and one of the Top 5 most profitable steelmakers globally by ROCE and EBITDA margin Leader in the construction and railway steel product markets in Russia and cISs Global player with strong position i
Slide 15: ROCE vs EBITDA Margin Global Peers 2005
Ii] 50% 40% 30% 20% 10% 0% -10,0% 8, _, ROCE, % Y2005 Global EBITDA Margin Target zone Nucor SAIL ° oe and ; SSAB ra Evraz RUUKKI ¢ MME Group 4 — @China Steel Steel Dynamics BlueScope * %Igoma POSCO. ° Salzgitter Gerdau @Severstal us Steel Mittal ve Ternium Thyssenkrupp ?¢ Nippon Steel Kobe Steel 5
Slide 16: Cost Structure and Self-sufficiency
» Cost Structure and Self-sufficiency = One of the lowest cost producers of steel in Russia and CIS = Substantial level of vertical integration and self-sufficiency in iron ore and coal = Mines located close to steel production sites Benefit of Vertical Integration Steel division costs, US$m 300, $/
Slide 17: Vision and Strategic Goals
Ii] Vision and Strategic Goals Evraz Group’s Vision is to be a world class steel and mining Company and one of the Top 5 most profitable steelmakers globally by ROCE and EBITDA margin Leader in the construction and railway steel product markets in Russia and cISs Global player with strong position i
Slide 18: Vision and Strategic Goals
Ii] Vision and Strategic Goals Evraz Group’s Vision is to a be world class steel and mining Company and one of the Top 5 most profitable steelmakers globally by ROCE and EBITDA margin Leader in the construction and railway steel product markets in Russia and cISs Global player with strong position i
Slide 19: Financial Results 2003 - 2005
Financial Results 2003 - 2005 = Proven Ability to Generate Strong Free Cash Flows = Internally-generated cash flows and liquidity steadily improving Growing profitable business Cash Flow Generation us$m 6,508 40% 5,933 6,000 2.5 2.0 4,500 a 15 22% 1.0 3,000) 9 168 0.5 3 0.0 1,500 476 953 (0.5) ol (1
Slide 20: Projected Capex Programme
70 600 500 400 300 200 100 —w =e ] 8 ay Lares. NOU g Projected Capex Programme = Capex to increase the share of higher margin products = Capex programme to reduce costs, improve process flows and expand the product range 2006B 2007 2008 m Steel Segment 2009 2010 Mining Segment 2011 450 400 350 300 2
Slide 21: Stronger Financial Position
“ Stronger Financial Position = Low-levered company with Net Debt/EBITDA below 1.0x = Share of Unsecured Debt increased to 60% in 2005 vs. 48% in 2004 = Multiple upgrades: = Ba3 by Moody’s = BB- by Fitch = BB-/Stable Outlook by S&P Significantly Improved Debt Maturity Profile us$m 900 | 3,000 1.0 1
Slide 22: Q2 2006 Trading update
Ii] Product Steel division Pig iron Steel Rolled products! Mining division? Iron ore (saleable products) Concentrate Sinter Pellets Coal (mined) Coking coal Steam coal Equity investments? Coking coal (Raspadskaya) Coking and steam coal (Yuzhkuzbassugol)? Q2 Y2006 Trading update Q2 2006, thousand ton
Slide 23: Strong Commitment to High Standards in Corporate Governance
Objectives Strong Commitment to High Standards in Corporate Governance Evraz initiatives Transparency Integrity of P&L Shareholder rights protection and compliance Efficient capital allocation Minimization of infrastructure risks = = = = = KAN XN <q International audits by EXY Commitment to higher l
Slide 24: Environmental Initiatives
Aho g. Environmental Initiatives = Introduction of new technologies to reduce energy consumption and to meet environmental protection programme Equipment upgrade in order to reduce emissions Within the 6 year period 2004 —- 2010, Evraz is intending to spend approximately $134 million on replacing ou
Slide 25: Corporate Social Responsibility
Corporate Social Responsibility Evraz goes well beyond regular working practices in CSR — Every site of the Group has developed a health programme for employees, including additional health services provided by both local and the Group’s medical centres — The Company established an pension fund for
Slide 26: Evraz Group contact
=) EVRAZ GROUP +7 495 232-1370 IR@evraz.com www.evraz.com
Evraz Group — BCP Securities Investor Conference, Moscow 2006 on 6ix