analyst day — moscow

Presentation

Analyst day

29 November 2005

1

Disclaimer

This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of Evraz Group S.A. (Evraz) or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity. No part of this document, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of the Evraz or any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with the document.

This document contains “forward-looking statements”, which include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or that include the words “targets”, “believes”, “expects”, “aims”, “intends”, “will”, “may”, “anticipates”, “would”, “could” or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond Evraz’s control that could cause the actual results, performance or achievements of Evraz to be materially different from future results, performance or achievements expressed or implied by such forward-looking, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or GDRs, financial risk management and the impact of general business and global economic conditions.

Such forward-looking statements are based on numerous assumptions regarding Evraz’s present and future business strategies and the environment in which Evraz will operate in the future. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speak only as at the date as of which they are made, and Evraz expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in Evraz’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

Neither Evraz, nor any of its agents, employees or advisors intend or have any duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this document.

The information contained in this document is provided as at the date of this document and is subject to change without notice.

2

Agenda

n Evraz Highlights

n Strategic Overview

n Financial Overview

n Recent Corporate Developments

n Palini e Bertoli

n Vitkovice Steel

n Neryungri Ugol

n Eurobond

n Corporate Governance

Evraz Highlights

Section 1

4

Evraz Highlights

n Among the 15 largest steel producers in the world

n Russia’s largest producer of steel and steel products

n Vertically integrated steel and mining business

n Recent acquisitions of Palini e Bertoli and Vitkovice Steel

n Produced 13.7 mt of crude steel in 2004 and 7.0 mt in 1H05

n Consolidated revenues of US$5.9 billion in 2004 and US$3.6 billion in 1H05

n EBITDA of US$2.0 billion in 2004 and US$1.1 billion in 1H05

n Successful IPO on LSE in June 2005 placing 8.3% stake for US$422m

n Multiple upgrades in the last six months from Fitch and Moody's

n Ba3 by Moody's, BB- by Fitch and B+/Positive Outlook by S&P

Strategic Overview

Section 2

6

Our strategy

n Enhance margin profile

n Achieve superior growth

n Expand mining platform

n

STRATEGY ACTIONS

n Realisation of synergies from recent acquisitions and continued capex-driven efficiency improvements

n Enhance product mix to expand Evraz’s position as a competitive exporter of semi-finished products

n Continue to capture domestic growth

n Further develop markets outside Russia

n Enhance profitability and security of supply through vertical integration

n Drive growth through increased sales of mining products to third parties

7

Top Russian steel producer

Evraz’s main locations Top Russian steel producers

Output1 (million tons) Russian

ranking Company 2003 2004 1H05 Main products

1 Evraz Group 13.9 13.7 7.0 Long

2 MMK 11.5 11.3 5.5 Flat/long 3 Severstal 9.9 10.4 5.1 Flat/long 4 NLMK 8.9 9.1 4.1 Flat 5 Mechel 4.6 5.5 2.7 Long/flat

Source: Chermet, Evraz Note: Crude steel output

NTMKVGOK

KGOK

NKMK ZapSib

Evrazruda

Mine 12

Moscow

NakhodkaSea Port

Lipetsk

Stary OskolPerm

St. Petersburg

Penza

Nizhny Novgorod

SamaraChelyabinsk Omsk

Novosibirsk

TomskKemerovo

Novokuznetsk

Bratsk

Irkutsk

Surgut

Yekaterinburg

Krasnoyarsk

Yuzhkuzbassugol Raspadskaya

NeryungriUgol

Iron ore mining Coal miningService Centres Sea portsSteel mills

8

An integrated steel and mining platform

NTMK84.4%

NakhodkaSea Port

93.0%

Yuzhkuzbassugol50% under

common controlbut

not consolidated

Coking Coal

Ferrotrade100%

Dis

trib

uti

on

Note:1. Actual ownership interests representing Evraz’s control2. Accounted for on the equity basis.

Raspadskaya47.8%(2)

THEvrazHolding

100%

Evraztrans76%

NeryungriUgol100%

Mastercroft 100%

KGOK97.6%

Evrazruda100%

VGOK87.4%

(1)

Iron

Ore

Coal

Ste

el

Zapsib95.4%

NKMK100%

Palini e Bertoli75%+1

Vitkovice Steel99%

Mine 12100%

9

561485

959

338

198

390 404

0

200

400

600

800

1000

Russ

ia

Germ

any

EU

-15

Avera

ge

US

Cze

chR

epublic

Japan

S.

Kore

a

Indexed to 100 as of 1 January 1999

Growth Gap

’04-’08F Construction Output CAGR: 6.7%’04-’08F GDP CAGR: 5.0%

50

100

150

200

250

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

GDP Growth Construction Growth

Russia’s growing construction industry

Uniquely positioned to benefit from rapid Russian economic growth

n Russian steel consumption remains below global benchmarks

n Construction sector output is forecasted to exceed GDP growth by 37% between 2004 and 2008

n Significant downstream capacity flexibility to capture migration to higher margin products for domestic market

2004 Steel Consumption per Capita (kg)

Source: CRU, Metal Expert, Global Insight (steel consumption), Global Insight (population)

Construction Output Forecast to Exceed GDP Growth

Source: Global Insight

10

457

600

717 717

0

200

400

600

800

Evraz Italy Poland Germany Austria

Notes: 1. Rail prices as of 1H05

2.5

3.4

4.5 4.6

0.71.0

2.52.0

1.11.00.90.8

0

1

2

3

4

5

2004 2005 2006 2007

Infrastucture capex Rolling stock capexOther capex

Unique position in rail products

Uniquely positioned to benefit from RZD asset modernisation programme

n Railway products contributed 13% to Evraz’s revenues in 1H05

n RZD, Evraz’s major customer, is among the biggest railway operators globally

n Evraz accounted for nearly 100% of sales of rails in Russia

n Significant RZD capex required and planned

n Large backlog in rail replacement due to under-investment in 1990s

n Approximately US$21bn in capex planned for 2005-2007 period

The Russian Railways (RZD) opportunity

Source: RZD, S&P (October 2004)

RZD infrastructure & rolling stock capex (US$ bn)

Source: RZD

Evraz Prices vs. international export benchmarks (US$/t)(1)

Source: Company data, UN Statistics Division

11

Growing self-sufficiency in raw materials

Security of supply and reduced exposure to price fluctuations

Global iron ore and coking coal prices ($/t)(2)

0

20

40

60

80

100

120

140

2000 2002 2004 2006F 2008F 2010FIron ore fines Iron ore pelletsCoking coal

Notes:1. Including supplies from Yuzhkuzbassugol2. CVRD – FOB for iron ore, Australian HCC – FOB for coking coal

Source: World Steel Dynamics, April 2005

100

64

22

787586

6170

0%

20%

40%

60%

80%

100%

Evra

z

Mech

el

NLM

K

Severs

tal

MM

K

CSN

Arc

elo

r

PO

SCO

Iron ore Coking coal

Internal raw materials sourcing(3)

3. Including related parties. Evraz data for 1H05, data for the peer group for 2004

Source: Evraz, Rudprom, OOO Rasmin, FGUP VUKhIN

n Approximately 75% of iron ore and 70%(1) of coking coal are sourced internallyn Evraz has access to a large proportion of its raw materials supplyn Limited exposure to high and variable raw material prices

12

Flexibility in Semis

-20

406080

100120140160

180200

Jan Mar May July Sept-

100

200

300

400

500

600

SlabsBilletsSlab price, RHS *Billet price, RHS *

k t

Evraz has flexible asset base allowing to benefit from the most attractive spot markets in semis

Source: Evraz, Metall Expert* FOB Far East

$/tonne

1.2

2.7

5.2

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

2003 2004 2005Е

Slab capacitySteel production

m t

Evraz slab capacity Sales volumes and prices in 2005

Financial overview

Section 3

14

0%

20%

40%

60%

80%

100%

1H04 2004 1H05

Steel segment Mining segment Other

Magnitude and quality of transformation

Growing profitable business Increasingly diversified EBITDA

Note: 1. Evraz have not prepared audited or reviewed financial statements for the 12 month period ended 30 June 2005. Financial indicators

presented under LTM (last twelve months) are calculated as a sum of 1H05 financial results and FYE 2004 less 1H04 financial results.

1,413

2,168

6,709

22%

34%

14%

32%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2002 2003 2004 LTM№

(US$m

)

0%

10%

20%

30%

40%

Net income EBITDASales EBITDA margin (rhs)

15

Summary financials

Notes:1. Adjusted EBITDA represents profit from operations plus depreciation and amortisation, impairment of assets and loss (gain) on dispositions of

property plant and equipment2. Net debt equals total debt less cash & equivalents

(280)(524)(217)(75)Capex

2,857 1,609 367 (4 )Equity

Cashflow statement72794643117Cashflow from operations

(657)(817)(359)(117)Cashflow from investing

316(36)4627Cashflow from financing

Income statement3,6325,9332,1681,540Revenues1,3812,447559205Gross Profit

38.0%41.2%25.8%13.3%Margin (%)1,1192,017476209Adjusted EBITDA (1)

30.8%34.0%22.0%13.6%Margin (%)7291,3452531Net income

Balance sheet

358

1,025 4,253

2004

299193223Minority interest

736 479 128 Net debt (2)

5,504 2,232 1,222 Total assets

1H0520032002US$m

16

Robust credit fundamentals

Net debt / EBITDA (x)Net debt / capital (%)

Source: Company dataNotes: 1. Evraz have not prepared audited or reviewed financial statements for the 12 month period ended 30 June 2005. Financial indicators

presented under LTM (last twelve months) are calculated as a sum of 1H05 financial results and FYE 2004 less 1H04 financial results.2. Adjusted EBITDA represents profit from operations plus depreciation and amortisation, impairment of assets and loss (gain) on dispositions of property

plant and equipment.3. FFO (funds from operations) - net cash flow from operating activities before changes in operating assets and liabilities.

36%

46%

34%

19%

10%

30%

50%

2002 2003 2004 LTM№

0.6

1.0

0.50.3

0.0

0.5

1.0

1.5

2002 2003 2004 LTM№

3.7

10.3

21.018.2

0

5

10

15

20

25

2002 2003 2004 LTM№

2.01.7

3.0 2.9

0

1

2

3

4

2002 2003 2004 LTM№

1

EBITDA(2) net interest coverage (x)

1

FFO(3) / Capex (x)

1 1

17

Cost Structure

Steel division costs Mining division costs

Note: Breakdown based on consolidated cost of revenues.

58%

8%

10%

7%10%

3%5%

6% 8%

8% 10%

67%

0%

20%

40%

60%

80%

100%

1H05 1H04

Raw materials TransportationStaff costs Depreciation

Energy Other

76%18%

10%

8%

3%

27%

6%12%5%

35%

0%

20%

40%

60%

80%

100%

1H05 1H04

US$2,566m US$1,683m US$325m US$192m

18

Price dynamics: iron ore

100

200

300

400

500

600

700

Jan-05 Mar-05 May-05 Jul-05 Sep-05

Stoilensky GOK (53 % Fe) Mikhailovsky GOK(52,3 % Fe)

Ore (RUR/tonne)

0

500

1 000

1 500

2 000

2 500

3 000

Jan-05 Mar-05 May-05 Jul-05 Sep-05Vysokogorsky GOK (53,5% Fe) Kachkanarsky GOK (52,3% Fe)

400

800

1 200

1 600

2 000

2 400

2 800

3 200

Jan-05 Mar-05 May-05 Jul-05 Sep-05Karelsky Okatysh (65% Fe) Mikhailovsky GOK (62% Fe)

Lebedinsky GOK (65,5% Fe) Kachkanarsky GOK (60,3% Fe)

Pellets (RUR/tonne) Sinter (RUR/tonne)

0

500

1 000

1 500

2 000

2 500

Jan-05 Mar-05 May-05 Jul-05 Sep-05

Lebedinsky GOK (68% Fe) Stoilensky GOK (66,7% Fe)Mikhailovsky GOK (66% Fe)

Concentrate (RUR/tonne)

Source: Evraz, Metall Kurier

19

Price dynamics: coal

Note: Price for average quality coking coal concentrateSource: OOO Rasmin, VGUP Vukhin, Evraz

Coking coal concentrate (RUR/tonne)

0

500

1000

1500

2000

2500

3000

Jan March May July Sept

Average price in Russia for coking coalconcentrate, FCA

20

Price dynamics: steel products

Source: Evraz, Metalltorg (domestic prices), Metal Bulletin (export prices).

Rebars (RUR/tonne) H-beams (RUR/tonne)

0

4000

8000

12000

16000

Jan Feb March April May June July Aug Sept Oct

Export price, FOB

Russian price index, FCA

0

4 000

8 000

12 000

16 000

20 000

24 000

Jan Feb March A pril May June July A ug Sept O ct

Export price, FOBRussian price index, FCA

21

CAPEX Programme

n Steel capex programme focused primarily on revamping the front-end

n More than $700 million invested to date with approximately $1 billion planned by 2010 to complete programme

n Replacement of inefficient production facilities (remaining OHF) with modern equipment

n Steel capex benefits include:

n Enhanced product mix

– Move to continuous casting facilitating production of quality slabs

n Mining capex programme

n $460 million planned by 2010 including $180 million in 2005

n Increase in iron ore output at KGOK and Evrazruda

n Development of Neryungri Ugol coking coal site

Presented at IPO Current status

n New slab caster at ZapSibcommissioned on time

n Review projects to confirm high returns

n No new large projects to be started next year

n 2006 budget capex to be substantially lower than 2005

n Confirm capex target levels at depreciation levels

n No major capex plans at newly acquired plants

Recent Corporate Developments

Section 4

23


n Palini e Bertoli is a rolling mill operator in northern Italy producing steel plate products

n Target markets - Southern Europe and the Mediterranean

n 2004 output - 356,000 tonnes of rolled products, revenues - €183m under Italian GAAP

n Evraz acquired 75% interest in Palini on 12 August 2005

n The deal is in line with Evraz’s strategy of acquiring high-quality re-rolling facilities worldwide

2000

2004

003 - Present

Integrated Structure and Expansion into

Mining

198 - 2002

Palini e Bertoli

24


n Vitkovice Steel in the north-east of the Czech Republic is a leading European producer of hot-rolled steel products

n Target markets – the Czech Republic and Central Europe

n Total sales in 2004 - 870,000 tonnes of rolled products, revenues - €425m

n Evraz acquired 98.96% of Vitkovice Steel for c. €240m on 15 November 2005

2004

003 - Present

Vitkovice Steel

25

Neryungri Ugol – Project on track

n Highlights

n 2.4 m tpy coking coal mine

n Extractable reserves are estimated at 70-85 million tonnes of high grade hard coking coal

n Production to start in 2H06, expected to reach full production during 2008

n Current stage

n Evraz – Mitsui JV agreement signed, Mitsui becomes a co-investor with 30%

n Parties are in talks with financing institutions (JBIC, ECAs)

n Underground mine development is ongoing, 7500 m developed

n Mining equipment for Phase 1 ordered and major personnel hired

n Surface construction is in the active phase

n Project presented to prospective customers and preliminary coal tests successfully completed (JSM, Posco, NTMK)

26

Eurobond’15

n Issuer Evraz Group S.A.

n Guarantor Mastercroft Limited

n Maturity 10 years

n Yield 8.5%

n Amount US$750 million

n Structure Reg S / 144A

n Ratings S&P = B+ (Positive)Moody’s = Ba3/B2 (Stable)Fitch = BB- (Stable)

n Listing London

n Use of proceeds Re-finance existing debt as well as to support company growth via further investment in expanding operations

Corporate Governance

Section 5

28

Corporate Governance

n Management

n Board of Directors decision on management changes based on necessity to separate the roles of chief executive officer and of chairman of the Board:

n New structure to become effective since January 1, 2006:

– Mr. Valery Khoroshkovsky, Managing Director Operations, appointed new CEO with effect from January 1, 2006

– Mr. Alexander Frolov, Managing Director Corporate, appointed new Chairman of the Board, effective May 1, 2006

n Dividends

n Interim dividends for 1H2005 in line with the company’s dividend policy

n Total payout of c.$193m, or $1.65 per share ($0.55 per GDR) payable to shareholders of record as of November 24, 2005

n 31.5% of net profit and more than 6% annualised dividend yield

29

Key investment highlights

Russia’s leading steel producer with

global scale

Russia’s leading steel producer with

global scale

Continuously improving financial

performance

Continuously improving financial

performance

Robust macro fundamentals and

strong position in high growth steel markets

Robust macro fundamentals and

strong position in high growth steel markets

Experienced management

team

Experienced management

team



Vertically integrated low-cost steel and mining business

Vertically integrated low-cost steel and mining business

30

Contacts

Alexander Frolov

Managing Director Corporate

Pavel Tatyanin

Chief Financial Officer

Timur Yanbukhtin

Director, Corporate Finance

Corporate Affairs and Investor Relations:

Irina Kibina

Vice President

Nikolay Arutyunov

Director

Irina Dubitskaya

Senior Manager

Irina Osadchaya

Manager

Tel. +7-095-2321370

Fax +7-095-2321359

[email protected]

mailto:[email protected]

analyst day — moscow

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