6 March 2017

Q4 and 12M 2016 NLMK Group consolidated financial results under IFRS

NLMK Group, a leading global steel company (MICEX and LSE: NLMK) is pleased to announce an EBITDA margin expansion to 25% and a 9% y-o-y growth in free cash flow to $1.1 bn in 2016

FY2016 highlights

  • Revenue totalled $7.64 bn on strong sales volumes
  • EBITDA was flat at $1.94 bn
  • EBITDA margin expanded to 25% (24% in 2015)
  • Capex decreased by 6% to $559 m
  • Free cash flow increased by 9% to $1.1 bn
  • Net debt decreased to $0.69 bn
  • Net debt/EBITDA decreased to 0.4х
  • 2016 declared dividends were RUB 9.22/per share, or 83% of free cash flow

Q4 2016 highlights

  • Revenue grew by 20% YoY to $1.97 bn
  • EBITDA grew by 61% YoY to $518 m
  • EBITDA margin grew to 26% (+6 p.p. YoY)
  • Capex grew to $175 m against the backdrop of the launch of Stoilensky Pelletizing Plant
  • Q4 2016 dividends are recommended at RUB 3.38/per share

Comment from NLMK Group CFO Grigory Fedorishin:

“NLMK’s business model, which is based on operational efficiency, a world-class resource base, and leading positions in key markets, has delivered strong operational and financial results.

“Our proximity to end consumers in the markets where we operate and our well-oiled supply chain from Russia supported high capacity utilization and sales growth to an all-time record 15.9 million tonnes.

“The gradual recovery of prices from the early 2016 bottom along with the increased productivity and operational efficiency emerged as the main factors driving EBITDA margin expansion to 25%.

“In 2016, a pelletizing plant was launched at Stoilensky mine. It will ensure NLMK’s self-sufficiency in iron ore and push our steel costs further down.

“Increasing profitability and restrained investment have led to a free cash flow of $1.1 billion and a reduction of net debt to $0.7 billion. This strengthening of the Company’s financial standing has enabled NLMK to increase the dividend payout above our Dividend Policy targets.”


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