In 2018, demand for steel continued to recover, coupled with a rise in protectionism in key markets.

“In this context, NLMK Group’s flexible business model that helped it secure its presence in key sales markets, enabled the company to grow its sales by 7% YoY, or by 1.1 million tons, to 17.6 million tons, hitting an all-time high for the company. NLMK Group retained its leadership on the Russian market in terms of steel output, and consolidated its positions on global markets. Revenue grew by 20%, to $12 billion; EBITDA increased by 35%, to $3.6 billion, while its EBITDA margin grew to 30% (+4%),” NLMK Group CFO Shamil Kurmashov declared.

In 2018, NLMK Group persisted with its consistent operational efficiency efforts. EBITDA gains from the operational efficiency program totaled $189 million to the 2017 cost base. The impact of capex projects executed as part of Strategy 2017 totaled an additional $121 million. Total gains from Strategy 2017 in 2014-2018 were $1,348 million, which was significantly in excess of the $1 billion target.

EBITDA growth and the decrease in cash outflow to finance working capital supported a 60% increase in the group’s free cash flow, to $2 billion. Total debt decreased by 9%, while the cost of financing reduced from 3.8% to 3.4%. The company’s debt is at an all-time low: Net debt/EBITDA decreased to 0.25x by the end of 2018. Growth of free cash flow and low debt enabled the company to keep dividends high despite the growth in capex. (NLMK/Ukrainian metal)

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