What is NLMK?
NLMK Group is the largest vertically integrated steelmaker in Russia and one of the most efficient in the world.
NLMK Group’s steel products are used in various industries, from construction and machine building to the manufacturing of power-generation equipment and offshore wind turbines.
NLMK operates production facilities in Russia, Europe and the United States. The Company’s steel production capacity exceeds 17 million tonnes per year.
NLMK has the most competitive cash cost among global manufacturers and one of the highest profitability levels in the industry. In 12M 2018, the Company generated $12 billion in revenue and $3.6 billion in EBITDA. Net debt/EBITDA stood at 0.25х. The Company has investment grade credit ratings from S&P, Moody’s, Fitch and RAEX (Expert RA).
NLMK’s ordinary shares with a 16% free-float are traded on the Moscow Stock Exchange (ticker "NLMK") and its global depositary shares are traded on the London Stock Exchange (ticker "NLMK:LI"). The share capital of the Company is divided into 5,993,227,240 shares with a par value of RUB1. For more details on NLMK shareholder capital please follow the link.
Is NLMK self-sufficient in raw materials?
Yes, NLMK Group is self-sufficient in the main raw materials and resources for steel production:
What is NLMK's strategy?
NLMK Group is pleased to announce the launch of its new Strategy 2022 and changes to its dividend policy.
Strategy 2022 targets net gains of +$1.25 bn to EBITDA* pa, with $0.5 bn pa from operational efficiency programmes that require no additional capex.
Strategy 2022 is based on enhancing NLMK Group’s competitive advantages. Through operational efficiency initiatives and investment projects, as well as debottlenecking our steelmaking operations, steel output at our Lipetsk site will increase by 1 m tpa. Steel output growth will be 100% covered by captive iron ore from Stoilensky.
What are NLMK's competitive strengths?
NLMK benefits from the following principal competitive strengths:
What is NLMK's latest M&A?
NLMK is proceeding with the restructuring of its European assets to further improve efficiency and optimize costs with an investment by SOGEPA (Société Wallonne de Gestion et de Participations S.A.), a Belgian state-owned company, in NLMK Europe.
In a further phase of restructuring announced today, SOGEPA has acquired a 20.5% stake in NLMK Belgium Holdings S.A. (NBH), which comprises NLMK Europe’s operating and trading companies, excluding NLMK Dansteel, for a purchase price of EUR 91.1 million.
What is NLMK's sales structure?
In 2018, Group sales grew by 7% yoy to 17.6 m t, against the backdrop of the growth in demand for semi-finished products and higher long product sales in Russia.
Finished rolled product sales of finished products remained flat yoy at 10.8 m t. HVA sales grew by 3% yoy to 5 m t. HVA share in total sales dropped by 1 p.p. to 29%, due to the outstripping growth of semi-finished product sales amid intensified demand for slabs and pig iron, and planned hotrolling equipment upgrades at the Lipetsk site.
Sales in Russia decreased by 4% yoy (to 5.8 m t), as sales were shifted to export markets. US and EU sales increased by 16% and 10%, respectively. Sales to the Middle East (including Turkey) grew by 7% yoy. The highest growth rates were achieved in Asian and Oceanian markets (+89% yoy), driven by the increase in slab sales to Taiwan and Indonesia.
Sales to home markets decreased to 10.56 m t (-1% yoy), as semi-finished product sales were shifted to export following the uptick in demand in Q4 2018. Home sales accounted for 61% (-4 p.p. yoy). Sales to export markets grew by 17% yoy to 6.86 m t, driven by higher sales of slabs and pig iron.
Where are NLMK's companies?
NLMK enjoys a favourable geographic position. Our production capacities are strategically located in regions with a well-developed transport infrastructure. Our main steelmaking and rolling facility is located in Lipetsk, in the centre of European Russia. Our suppliers of iron ore are in close proximity to the main production site in Lipetsk. Two export ports (on the Black Sea and the Baltic Sea) are easily accessible. Most of our Russian consumers are within 1,000 km of our main production site which helps to minimise logistics costs.
The Company's iron ore supplier Stoilensky is located in the Kursk Magnetic Anomaly (KMA), the world's largest iron ore deposit, only 350 km from the main steel-making facilities of the Company, minimising iron ore delivery costs. Altai-Koks Corp., one of Russia's largest and most efficient coke producers, is located close to major coal deposits in the Kuznetsk Coal Basin. VIZ-Stal, an electrical steel producer, and the production facilities of the Long Products Division (NLMK Long Products), acquired in late 2007, are located in the Urals Region of Russia. International operations of the Group are represented by NLMK Europe and NLMK USA divisions with about 6m tpa of flat steel capacity.
NLMK Europe comprises two business units, Strip Products and Plate Products. Strip Products (Associated companies) unit has an annual production capacity of 1.7 million tonnes with three production sites, NLMK La Louvière, NLMK Strasbourg, and a network of service centres. The products are sold predominantly to the manufacturing sector including automotive segment. Plate Product unit has an annual production capacity of 1.8 million tonnes with three production sites, NLMK Clabecq (Associated company), NLMK Verona (Associated company), NLMK DanSteel offering a full range of plates. The products are sold to the manufacturing and energy sectors.
NLMK USA has a diversified base of flat steel producing assets comprising three production sites at NLMK Indiana, NLMK Pennsylvania (formerly, Duferco Farrell) and NLMK Sharon Coating, manufacturing slabs, hot-rolled, cold-rolled and galvanized products. It has an electric arc furnace (EAF) steelmaking capacity of approximately 0.8 million tonnes and rolling capacities of 2.9 million tonnes, which produce slabs, hot-rolled, cold-rolled and galvanized flat products.
What are NLMK's main financial figures?
NLMK Group is one of the most financially and operationally efficient steel companies in the world. In 2018, the Company reported an EBITDA margin of 30% and consolidated revenue of $12 billion.