Slide 1: 2011 Full Year Results March 2012
2011 Full Year Results March 2012 Producing iron ore pellets for over 30 years
Slide 2: Introduction
Introduction Michael Abrahams, Chairman 1
Slide 3: 2011 Financial Results
2011 Financial Results Chris Mawe, CFO 2
Slide 4: Strong Financial Performance in 2011
Strong Financial Performance in 2011 > Record production own ore US$m (unless otherwise stated) 2011 2010 Change > Record sales volumes EBITDA 801 585 +37% Diluted eps (cents per share) 97.0 72.2 +34% > Strong cash flow generation Cash flow from operations 503 380 +32% > Stable finance – US$500m Eur
Slide 5: Increased Efficiency and Profitability
Increased Efficiency and Profitability US$m (unless otherwise stated) 2011 2010 Change Pellet production from own ore 9,063 9,033 0.3% > Highest production from own ore (000’ tonnes) since 1990 Production of Premium 65% Fe pellets 4,256 4,061 5% (000’ tonnes) > Better quality Pellet sales (000’ tonn
Slide 6: Revenue – 2011 vs. 2010
Revenue – 2011 vs. 2010 US$m 2,000 49 6 1,788 70 349 1,500 19 1,295 1,000 500 0 1 2 2010 Sales volume Sales price CIF/CFR sales Helogistics 3rd Other 2011 party 1. Sales price on DAP/FOB basis excluding impact of international freight. 2. Includes delivery of pellets to customers by barge 5
Slide 7: EBITDA – 2011 vs. 2010
EBITDA – 2011 vs. 2010 1,000 60 323 101 4.9 50.7 50 1.4 0.6 6.1 900 C1 cash cost per tonne 2.3 1.8 39.7 8 3 26 801 40 800 30 700 20 29 600 585 10 0 500 US$m commodities Total 2010 C1 Electricity tariffs Gas tariffs Fuel 2011 C1 Steel inputs personnel, other Total Commodities Maintenance, 400 300 200
Slide 8: Cash Flow – Strong Profit Conversion
Cash Flow – Strong Profit Conversion US$m (unless otherwise stated) 2011 2010 Change > Working cap reflects VAT & increased EBITDA 801 585 37% trade receivables Working capital movements (111) (137) > Capex more than doubled to US$378m Interest, tax and other (187) (69) Net cash flow from operating
Slide 9: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity Credit Metrics – High Liquidity 31 Dec 31 Dec > Minimal debt repayments in 2012 and 2013 US$m 2011 2010 > Average maturity profile 4 years Cash and Equivalents 890 319 Total Gross Debt 970 424 > Approved projects fully funded Net Debt (80) (104) Total Equity 1,393
Slide 10: Operations
Operations Kostyantin Zhevago, CEO 9
Slide 11: Ferrexpo Poltava Mining (‘FPM’)
Ferrexpo Poltava Mining (‘FPM’) 10
Slide 12: Ferrexpo Poltava Mining (FPM)
Ferrexpo Poltava Mining (FPM) Consistent Production at Full Capacity C1 cost (2011 US$50.7/t vs. 2010 US$39.7t) Electricity 2% 10,000 Fuel +51% 8,000 12% 000’ tonnes 26% Gas 6,000 65% Grinding media +5% 4,000 17% 62% Explosives 2,000 10% Other materials 0 8% 2007 2008 2009 2010 2011 Maintenance & 13
Slide 13: Set to Deliver Volume Growth and Cost Benefits
Set to Deliver Volume Growth and Cost Benefits Total Cost Project Approved Status US$m Production Schedule Capacity Upgrade / On track Sustaining CapEx to 134 Increase production to End of 2013 Modernisation Programme ensure 12mtpa of 12mtpa; processing capacity. improve productivity of Upgrade of c
Slide 14: Ferrexpo Yeristovo Mining (‘FYM’)
Ferrexpo Yeristovo Mining (‘FYM’) 13
Slide 15: FYM 2011 Achievements on Target to Deliver 1st Ore in 2012
FYM 2011 Achievements on Target to Deliver 1st Ore in 2012 > 60% of stripping to first ore complete > 2011 stripping volume is 16 m3 total, only 15m3 meters of pre-stripping remain to first ore > Construction of permanent mine infrastructure is well under way > 5 Draglines, 16 CAT 789 trucks, 5 CAT
Slide 16: FYM: Phase Two Concentrator Development
FYM: Phase Two Concentrator Development > Approval of design from Ukrainian & international engineering institutes > Ferrexpo Board approval > Orders for long lead equipment > Commencement of site preparation and civil works > Commissioning of primary crusher – 2H 2015 > 1st stage of concentrator co
Slide 17: Logistics
(0S a Logistics
Slide 18: Sales Breakdown by Market
Sales Breakdown by Market 53% > Diversifying sales – expanding sales to high quality customers 66% in key pellet regions 7% 40% 7% 27% > Establishing index linked pricing contracts – ensures prices inline with international peers > 52% of sales managed through Ferrexpo’s supply chain (2010: 14%) Tra
Slide 19: Evolution of Ferrexpo Contract Structure
Evolution of Ferrexpo Contract Structure % of sales volume 60% 50% 40% 2010 30% 2011 2012/13 (best estimate) 20% 10% 0% % quarterly fixed % half yearly fixed % quarterly & monthly indexed > Moved from fully fixed annual contracts in 2008 & 2009 to quarterly & monthly indexed contracts > Aim to sell
Slide 20: Logistics Infrastructure
Logistics Infrastructure Project Approved Status US$mn Comment Schedule Rail Cars Ordered 712 rail wagons 47 100% of current 1H 2012 (final delivery May 2012) production capacity Barges 143 barges purchased 38 Delivery capability to Complete customers in Europe > Capitalising on geographic proximity
Slide 21: Strategy and Outlook
Strategy Strategyand andOutlook Outlook 20
Slide 22: Business Strategy and Outlook
Business Strategy and Outlook > Further develop significant resource base and improve quality > Remain in the lowest quartile of the global pellet cost curve > Expand logistics capabilities to provide better service to customers > Open and develop new markets and customers > Maintain a strong balanc
Slide 23: Corporate Governance
Ps | Corporate Governance
Slide 24: Setting the Standards for Best Practice
Setting the Standards for Best Practice > Business as usual in a volatile political environment, no disruptions to operations > High standards of corporate governance and transparency > Comply fully with the UK Corporate Governance Code since listing on main market in 2007 > Attracting new investmen
Slide 25: Fact File
2 LL — (S) (4) LL
Slide 26: 6 Year Financial Performance
6 Year Financial Performance US$m (unless otherwise stated) 2011 2010 2009 2008 2007 2006 Total pellet production (‘000 tonnes) 9,811 10,031 8,767 9,035 9,072 8,550 - Premium 65% Fe pellets 4,799 4,879 4,304 4,014 3,701 3,121 - Basic 62% Fe pellets 5,012 5,152 4,463 5,021 5,371 5,429 Pellet producti
Slide 27: Ferrexpo Fact File
Ferrexpo Fact File Ferrexpo – access to Resources as of 1 January 2012 China (average) seaborne markets Proved Measured Fe Sailing days Nautical miles and and grade Seven Islands (IOC) 60 14,446 probable Fe grade indicated (total) Inferred Fe grade Lulea (LKAB) 49 11,866 Deposit (Mt) (total) % (Mt)
Slide 28: Key Investment Highlights
Key Investment Highlights 1. Premium iron ore product producer (pellets) 6. Strong corporate governance and 2. Low cost producer with consistent experienced management team production track record 5. Strong balance sheet to support 3. Significant resource base to support investment projects producti
Slide 29: Disclaimer
Disclaimer This document is being supplied to you solely for your information and does not of confidentiality in relation to the contents of this presentation. You agree that constitute or form part of any offer or invitation or inducement to sell or issue, or any you will not at any time have any d
Slide 30: Ferrexpo Group Investor Relations
Ferrexpo Group Investor Relations Ingrid McMahon – i.mcmahon@ferrexpo.ch Emma Villiers – e.villiers@ferrexpo.ch 0207 389 8304 www.ferrexpo.com 29