Strategy 2017 target of $1 billion annual EBITDA gains has been achieved – Strategy 2017 delivered structural annual EBITDA gain of $1,019 million.
Management initiatives contributed around $740 million (over 70%) to the result. The company expects additional gains of around $160 million in 2018 generated by recently completed investment projects. Full self-sufficiency in iron ore and pellets has been achieved with positive NPV on the investments.
NLMK sales grew faster than respective markets across all group divisions.
NLMK is currently finalizing the development of Strategy 2022 to be presented in 2018. Strategy 2022 aims to maintain a balance between investments in growth projects, a conservative financial policy and high returns to NLMK shareholders.
Oleg Bagrin, NLMK Group CEO, said: “NLMK Group has successfully completed this strategic cycle. Over these past years, we have consolidated NLMK’s leadership as one of the most efficient steel companies in the world. Last year’s results showed net gains from Strategy 2017 projects exceeded $1 billion, with over 70% generated by management initiatives. This was not driven by the markets or pricing, this came about through the group’s structural transformation. Over the last five years, we have implemented over 100 investment projects and over 3,000 operational efficiency projects. We’ve grown steel output to an all-time high, while boosting profitability. Decreased leverage and structural increase in profitability enabled higher dividends. This would not have been possible without concerted effort of NLMK Group’s employees, all of our 55,000 people, working towards a common goal across 12 time zones. One of the most important outcomes of Strategy 2017 is clearly a step forward in developing NLMK as a single and committed team. NLMK has regained its leadership among Russian peers in terms of market value, and I am grateful to our shareholders for their trust. 2018 sees the beginning of a new five-year strategic cycle. NLMK’s technology, the quality of our team, the scale of our business and, most importantly, the unique potential for growth and efficiency our company enjoys within the industry will open up a many new opportunities.” (NLMK/Ukrainian metal)