Severstal to announce strategy update at its 2018 Capital Markets Day (742437)

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 PAO Severstal (SVST) 
Severstal to announce strategy update at its 2018 Capital Markets Day 
 
07-Nov-2018 / 14:55 MSK 
Dissemination of a Regulatory Announcement that contains inside information 
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
   Severstal to announce strategy update at its 2018 Capital Markets Day 
 
   PAO Severstal, one of the world's leading vertically-integrated steel and 
mining companies, is hosting its annual Capital Markets Day in London today. 
         The Company's top-management will announce an update to Severstal's 
         strategy, aimed at further strengthening its financial performance, 
                maximising value creation and enhancing shareholder returns. 
 
      Ahead of the event, PAO Severstal provides the following update to the 
                                                                     market: 
 
? Severstal remains a global leader in efficiency, with the highest EBITDA 
margin in the steel industry globally, positive free cash flow generation 
throughout the cycle and a track record of achieving its targets. 
 
? To deliver additional growth, the Company has updated its already proven 
strategy - retaining its fundamental advantages but adding new elements. 
Severstal's new vision is to be a leader of the steel industry of the 
future and the first choice for its customers, employees and partners. 
 
? To achieve this, the Company is setting out new strategic priorities to 
distance itself further from its competitors. These are: superior client 
experience, cost leadership and embracing new opportunities. All three 
will be supported by Severstal's advanced corporate culture. 
 
   Superior client experience - Severstal aims to offer our customers unique 
                                 selling propositions on each target market. 
 
         Cost leadership - Severstal's goal is to achieve a significant cost 
        advantage in basic steel products. Part of the Company's smart-capex 
   programme will focus on achieving this, including investments to increase 
mining volumes and pig iron and steel volumes and to further reduce costs in 
                          both the Company's steel and resources businesses. 
 
     New opportunities - Severstal's objective is to access and consequently 
              benefit from the use of global cutting-edge technology and new 
                                                            business-models. 
 
? Implementing this set of objectives will support the Company in reaching 
its financial target of increasing EBITDA by 10-15% annually for the next 
5 years. (This excludes pricing/macro factors.) 
 
? Severstal's previously announced capital allocation framework will 
remain intact: 
 
    - In 2012-2018 the Company's investment program amounted to c. $800m per 
 year, on average. As previously announced, Severstal is launching a hot-end 
            modernisation programme which will require a certain increase in 
  investments. In 2019 Severstal's capex will stand at around $1.4bn, with a 
  high proportion (c.75%) of this committed to development projects. Planned 
maintenance capex will stand at c.$358 million for 2019. The Company's capex 
      will normalise after 2022 when the key projects are completed and will 
    decline in 2023 to approximately $750m. Several will maintain its "smart 
    capex" approach which requires a minimum of 20% IRR for every investment 
  project. Key project investments, EBITDA impact and IRRs will be presented 
       by Severstal's Chief Financial Officer during the Capital Markets Day 
                                                               presentation. 
 
- The Company remains committed to its dividend policy. However, in order to 
         maximise value for its investors, during the intensive stage of the 
        investment programme, Severstal will be using "Adjusted FCF" for the 
  dividend calculation. Any capex which exceeds the base-line level of $800m 
 will not be taken into consideration when determining the level of dividend 
                                                                     payout. 
 
         - The Company will aim to maintain a comfortable level of debt, not 
     exceeding its previous Net debt/EBITDA ratio target level of 1.5 times. 
 
                            Alexander Shevelev, CEO of Severstal, commented: 
 
     "As a global efficiency leader with a strong track record for progress, 
  today we are striving for further growth, and see growth opportunities. We 
     have shaped a growth story with very clear drivers and commit to adding 
    10-15% average EBITDA growth per year. At the same time, we will seek to 
      maintain our strict approach to capital allocation. We expect that our 
       temporary CAPEX increase will not affect our dividend story which, in 
   combination with our development projects, will allow us to deliver value 
                                               growth for our shareholders." 
 
 Severstal's top management team will provide more detail and comment on the 
 above statements during the Capital Markets Day presentation, which will be 
      webcast live from 12:00pm GMT and will be accessible via the Company's 
                        website at: http://www.severstal.com/eng/ir/cmd/ [1] 
 
Forward-looking statements 
 
  This announcement may include statements that are, or may be deemed to be, 
       "forward-looking statements". These forward-looking statements may be 
   identified by the use of forward-looking terminology, including the terms 
     "believes", "estimates", "plans", "projects", "anticipates", "expects", 
    "intends", "may", "will" or "should" or, in each case, their negative or 
  other variations or comparable terminology, or by discussions of strategy, 
      plans, objectives, goals, future events or intentions. Forward-looking 
      statements may and often do differ materially from actual results. Any 
  forward-looking statements reflect the Company's current view with respect 
     to future events and are subject to risks relating to future events and 
other risks, uncertainties and assumptions relating to the Group's business, 
  results of operations, financial position, liquidity, prospects, growth or 
   strategies. Forward-looking statements speak only as of the date they are 
                                                                       made. 
 
For further information, please contact: 
 
Investor Relations 
Evgeny Belov 
T: [phone] 
[e-mail] 
 
Public Relations 
Anastasia Mishanina 
T: [phone] 
[e-mail] 
 
                                    *** 
 
 P?? Severstal is one of the world's leading vertically-integrated steel and 
   steel related mining companies, with assets in Russia, Latvia and Poland. 
   Severstal is listed on RTS and MICEX and the company's GDRs are traded on 
  the LSE. Severstal reported revenue of $7,848 million and EBITDA of $2,577 
    million in 2017. Severstal's crude steel production in 2017 reached 11.7 
                                       million tonnes. www.severstal.com [2] 
 
ISIN:          US8181503025 
Category Code: UPD 
TIDM:          SVST 
LEI Code:      213800OKDPTV6K4ONO53 
Sequence No.:  6457 
EQS News ID:   742437 
 
End of Announcement EQS News Service 
 
 
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2: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=4b15f91445f21bf7bba524c68c1bddc7&application_id=742437&site_id=vwd&application_name=news 
 

(END) Dow Jones Newswires

November 07, 2018 06:56 ET (11:56 GMT)