16 November 2011 NLMK Group

9M 2011 NLMK Group Consolidated Financial Results under US GAAP


In Q3, the EU and US rolling assets, formerly part of the NLMK/Duferco JV, were consolidated on the Group’s balance sheet for the first time. The newly acquired assets, with approximately 6 million tonnes of rolling capacity, enabled the Company to improve its sales mix with a bigger share of finished rolled products, as well as ensuring a greater geographic diversification of NLMK’s business operating segments. At the same time, the consolidation of the relatively lower margin rolling assets in the EU and US in the weak market had a negative impact on profitability. Despite the fact that the Group’s revenue totaled $3.3 billion, up 12% quarter-on-quarter, the EBITDA was $537 million ($478 including the unrealized profit adjustment related to the sale of slabs to Steel Invest and Finance rolling assets in Q2, for more details on roll back effect see page 8). The EBITDA margin contracted to 16%; 14% including the unrealized profit adjustment related to the sale of slabs to Steel Invest and Finance rolling assets in Q2. Net income amounted to $225 million.

Steel production costs at the Lipetsk site (75% of the Group’s total steelmaking capacity) were in line with Q2 at approximately $405 per tonne (-$1 quarter-on-quarter).


Тhe Group’s Q4 sales volumes will be approximately 3.5 million tonnes. The pricing environment in the domestic market will remain mostly stable. Prices in the export market are still under pressure due to the weaker economic conditions, as well as seasonal factors. The Company reconfirms its full year production outlook in the range of 12 million tonnes of steel. In Q4 we expect steel production output to grow 7%, as well as sales, following the launch of the new blast furnace. We expect Q4 profitability to be in the range of 15%.

NLMK is pleased to invite the investment community to a conference call with the management of NLMK followed by Q&A session.

Conference call will take place on Wednesday, 16 November 2011
09:00 (New York)
14:00 (London)
18:00 (Moscow)

To join the conference call, please, register on-line:

or dial
International Call-in Number: +44 (0) 20 7162 0025
US Call-in Number: +1 334 323 6201
Conference ID: 907218

NLMK will be represented by:
Galina Aglyamova, CFO
Anton Bazulev, Director, External Communications
Sergey Takhiev, Head of Investor Relations
*We recommend that participants register on-line to avoid waiting in a queue or to start dialing in 5-10 minutes prior to ensure a timely start to the conference call.

It is recommended that participants download presentation in advance on NLMK’s web-site

The conference call replay will be available through November 22, 2011
to download the media please use the link
International Replay Number: +44 (0) 20 7031 4064
US Replay Number: +1 954 334 0342
Replay Access Code: 907218