Severstal to announce strategy update at its 2018 Capital Markets Day (742437)
07 November 2018 - 10:56PM
UK Regulatory
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release.
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: +7 (495) 926-77-66
evgenii.belov@severstal.com
Public Relations
Anastasia Mishanina
T: +7 (495) 926-77-66
anastasia.mishanina@severstal.com
***
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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(END) Dow Jones Newswires
November 07, 2018 06:56 ET (11:56 GMT)
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