Presentation of the OJSC MMK Group 4Q and FY2008 IFRS Financial - PowerPoint PPT Presentation

Presentation of the OJSC MMK Group 4Q and FY2008 IFRS Financial Statements The presentation contains selected data from the financial statements of MMK Group. Detailed information is provided in the financial statements of the Group 2008 prepared according to IFRS.

MMK Group Operations and Income Statement 2008 2007 Change Revenue 10,550 8,197 2,353 Operating income 1,174 1,453 -279 Revenue margin 11,1% 17,7% Profit before income tax 1,106 1,626 -520 Revenue margin 10,5% 19,8% Profit for the period 1,081 1,306 -225 Revenue margin 10,2% 15,9% EBITDA* 2,204 2,407 -203 EBITDA margin 20,9% 29,4% * EBITDA = Operating income + Depreciation of assets + Loss on disposal of fixed assets +/- Operations with affiliates Presentation of the OJSC MMK Group 4Q and FY2008 2

MMK Group Key Performance Indicators Sales proceeds, USD m Operating income, USD m 10550 2000 10000 1453 8197 1500 8000 1174 6000 1000 4000 500 2000 0 0 2007 2008 2007 2008 EBITDA, USD m Net income, USD m 3000 1500 1306 2407 2500 2204 1081 2000 1000 1500 1000 500 500 0 0 2007 2008 2007 2008 Presentation of the OJSC MMK Group 4Q and FY2008 3

MMK Group’s Key Financial Indicators MMK Group’s Sales MMK Group’s Sales in USD 2008 10% 2008 2007 Change % 34% 56% OJSC MMK’s 5,896 4,677 1,219 26,1% proceeds Group’s steel traders’ 3,572 2,711 861 31,8% proceeds OJSC MMK Steel traders* Group’s other 1,082 809 273 33,7% Other companies companies’ proceeds Total proceeds 10,550 8,197 2,353 28,7% 2007 10% 33% 57% * ММК Steel Trade AG ММК Trading AG UralSib Traid MAGMA Traid Presentation of the OJSC MMK Group 4Q and FY2008 4

MMK Group’s Key Financial Indicators (continued) Proceeds by type of product Proceeds by type of product in USD 10% 12% 4Q 2008 2008 25% 1Q 2Q 3Q 4Q Billets and slabs 185 278 121 142 46% 7% Flat products 1,135 2,037 2,053 622 Billets and slabs Long products 252 284 313 95 Flat products Long Products Downstream 430 610 769 349 Downstream products products Other products and services Other products 3Q 2008 3% 167 275 272 161 8% and services 22% Total proceeds 2,169 3,484 3,529 1,368 9% 58% Presentation of the OJSC MMK Group 4Q and FY2008 5

MMK Group’s Key Financial Indicators (continued) Proceeds by type of product Proceeds by type of product in USD 7% 8% 2008 2008 2007 Change % 20% Billets and slabs 726 472 254 53,8% Flat products 5,847 4,555 1,292 28,4% 9% Long products 944 833 111 13,3% 56% Billets & Slabs Downstream Flats 2,158 1,741 417 24,0% products Longs Downstream products Other products and services Other products and 875 596 279 46,8% services 2007 7% 6% Total proceeds 10,550 8,197 2,353 28,7% 21% 56% 10% Presentation of the OJSC MMK Group 4Q and FY2008 6

MMK Group’s Operating Costs’ Structure MMK Group’s operating costs MMK Group’s operating costs in USD 4% 2008 5% 7% 2008 2007 Change Cost of products sold 7,835 5,710 2,125 84% COGS Selling and distribution 650 551 99 expenses Selling and distr. expenses General and administrative expenses Other operating income and loss General and administrative 513 452 61 7% expenses 0% 2007 8% Other operating income and loss 378 31 347 Total operating costs 9,376 6,744 2,632 85% Presentation of the OJSC MMK Group 4Q and FY2008 7

MMK Group’s Balance Sheet, USD m 31.12.2008 31.12.2007 Change % Non-current assets, incl. 10,569 11,614 -1,045 -9,0% Property, plant and equipment 9,751 10,409 -658 -6,3% Other non-current assets 818 1,205 -387 -32,1% Current assets, incl. 3,628 4,273 -645 -15,1% Inventories 996 963 33 3,4% Trade and other receivables 991 945 46 4,9% Bank deposits 17 1,279 -1,262 -98,7% Investments in securities and other financial assets 121 543 -422 -77,7% Cash and cash equivalents 1,106 256 850 332,0% Other receivables and current assets 397 287 110 38,3% Total assets 14,197 15,887 -1,690 -10,6% Equity attributable to shareholders of the parent company 9,663 11,634 -1,971 -16,9% Minority interest 189 152 37 24,3% Non-current liabilities, incl. 1,705 2,149 -444 -20,7% Long-term borrowings and obligations under financial lease 431 231 200 86,6% Other non-current liabilities 1,274 1,918 -644 -33,6% Current liabilities, incl. 2,640 1,952 688 35,2% Accounts payables 1,321 686 635 92,6% Short-term borrowings and current portion of long-term borrowings 1,295 1,225 70 5,7% Other current liabilities 24 41 -17 -41,5% Total liabilities 4,345 4,101 244 5,9% Total equity and liabilities 14,197 15,887 -1,690 -10,6% Presentation of the OJSC MMK Group 4Q and FY2008 8

* Investment activities: (2 136) m USD – purchase of property, plant and equipment and intangible assets; 1 096 m USD – net change in bank deposits 256 Balance at begin. of period 1 081 Profit for the period Adjustments MMK Group’s Cash Flows Presentation of the OJSC MMK Group 4Q and FY2008 643 for non-cash operations Change of cash balance during the 2008, USD m 1 054 Amortization and Loss on disposal of property, plant and equipment -269 Change in working capital Interest and -584 Income tax -979 Investing activities* Financing 62 activities -158 Effect of exchange rate changes 1106 Balance at end of period 9

MMK Group’s Financial Position Indicators Current liquidity Debt / EBITDA 4 2500 1,2 4000 3 2000 3000 0,8 2 1500 2000 1000 1 1000 0,4 500 0 0 2007 2008 0 0 2007 2008 Current assets Current liabilities Current assets/Current liabilities Debt EBITDA Debt/EBITDA EBIT / Interest Total debt / Equity 12000 0,8 1600 24 10000 1400 0,6 20 8000 1200 16 6000 0,4 1000 800 12 4000 0,2 600 2000 8 400 0 0 4 200 2007 2008 0 0 2007 2008 Total debt Equity Total debt/Equity EBIT Interest EBIT/Interest Presentation of the OJSC MMK Group 4Q and FY2008 10

OJSC MMK’s Key Production Indicators thousand tons Description 2008 2007 Change 6% humidity coke 4,994 5,354 -360 Pig iron 8,541 9,482 -941 Crude steel 11,957 13,261 -1,304 Incl. EAF steel 3,118 3,184 -66 BOF steel 8,838 10,077 -1,239 Presentation of the OJSC MMK Group 4Q and FY2008 11

Historical Structure of OJSC MMK’s commercial products’ mix thousand tons Description 2008 2007 Change Billets and slabs 952 976 -24 Long products 1,577 1,788 -211 Flat products 7,023 7,954 -931 Downstream products 1,359 1,483 -124 Commercial products 10,911 12,203 -1,292 Presentation of the OJSC MMK Group 4Q and FY2008 12

OJSC MMK’s Historical Product Mix By Market Domestic sales’ growth in tons Export shipments 100% 2007 4% 4% 2008 20% 13% 14% 25% 34% 40% 46% 51% 50% 0,2% 50% 2% 66% 60% 54% 49% 50% Billets & slabs 56% 62% Longs 0% HRC CRC 2004 2005 2006 2007 2008 Downstream products Domestic market Export Total: 4,876 kt Total: 3,755 kt Changes in shipments’ structure in tons Changes in domestic shipments 12,203 11,346 0,03% 10,911 2007 2008 17% 17% 10,137 10,201 24% 21% 10000 8000 12% 12% 6000 50% 4000 47% 2000 Billets&slabs Longs HRC 0 CRC Downstream products 2004 2005 2006 2007 2008 Total: 7,327 kt Total: 7,155 kt Billets & slabs Longs HRC CRC Downstream products Presentation of the OJSC MMK Group 4Q and FY2008 13

Significant Events After Accounting Date In February 2009, OJSC Sberbank provided a long-term RUB-denominated loan of USD 408 million with maturity in February 2012. February 2009 The funds will be used to finance construction of the Plate mill 5000. In April 2009, Group and Czech Export Bank concluded agreements for the Bank to provide long-term USD-denominated loans of USD 133 million with maturity in 2017, and a long-term USD-denominated loan of USD 22.5 million with maturity in 2010. April 2009 The funds will be used to finance construction of a continuous casting machine and a secondary steel treatment unit as part of Plate mill 5000 complex. Presentation of the OJSC MMK Group 4Q and FY2008 14