2016 IFRS Financial Results 16 March 2017

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1 Resources create opportunities 2016 IFRS Financial Results 16 March 2017

2 Disclaimer This presentation of financial results of Metalloinvest for 2016 (the Presentation ) contains certain forward-looking statements, particularly those relating to anticipated demand and consumption, global economic conditions, commodity prices, management aims and objectives, strategy, production, anticipated investments and anticipated completion of previously announced transactions. Metalloinvest will not update these statements to reflect events and circumstances occurring after the date hereof. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future. Actual results may differ from those expressed in such statements depending on a variety of factors, including future levels of industry product supply, demand and pricing, operational problems, general economic conditions, political stability and economic growth in relevant areas of the world, changes in laws and governmental regulations, exchange rate fluctuations, development and use of new technology, changes in public expectations and other changes in business conditions, the actions of competitors, natural disasters and adverse weather conditions, wars and acts of terrorism or sabotage, other factors discussed elsewhere in this document, as well as other risks affecting Metalloinvest and its operations. The contents of this Presentation do not constitute or form part of any advertisement of securities, any offer or invitation to issue, sell, purchase, exchange or transfer or any solicitation of any offer to purchase or subscribe for, any securities of Metalloinvest in any jurisdiction, nor shall this Presentation nor any part of it nor the fact of its presentation, communication or distribution form the basis of, or be relied on in connection with, any contract or investment decision. Any foreign securities which are mentioned in this Presentation are not and will not be registered in the Russian Federation by any state authority responsible for registration of such securities and such securities shall not be admitted to subscription nor shall be publically available in the Russian Federation and cannot be subject of any offer in the Russian Federation, except in the cases permitted by the law of the Russian Federation. No representation or warranty, express or implied, is given by Metalloinvest, its affiliates or any of their respective advisers, officers, employees or agents, as to the accuracy of the information or opinions or for any loss howsoever arising, directly or indirectly, from any use of these materials or their contents. The following RUB/USD exchange rates were used for the presentation of these financial results: Average over the period: ; ; Q ; Q ; Q ; Q *. End of the period: ; ; *Due to significant RUB/USD exchange rates fluctuations income and expenses for the year ended 31 December 2016 were translated to presentation currency at quarterly average exchange rates 2

3 Content I. Key Highlights II. Operational Results III. Financial Results IV. Corporate Governance & Ratings V. Capital Expenditure Programme. 21 VI. Subsequent Events. 24 VII. Appendices

4 KEY HIGHLIGHTS 4

5 Record production volumes in Iron ore * mn t +3% 40.7 Record 26.0 Pellets mn t 25.2 Record 5.8 HBI/DRI +6% +5% mn t 5.7 Record Hot metal mn t +20% 3.0 Record 5.0 Crude steel mn t % % 1.1 OEMK Record % ** OEMK URAL STEEL * Iron ore refers to iron ore concentrate and sintering ore ** Reconfiguration of Ural Steel in (shut-down of loss-making OHF facilities) 5

6 Highlights FULL-YEAR FINANCIALS 6,367 4,393 4,261 Revenue USD mn 2.1x 2.5x 2.5x 1,961 1,432 1,258 EBITDA Net Debt/EBITDA* Global iron ore prices Iron ore index (62% Fe, CFR China) USD/ t Jan 2014 Jan 2015 Jan 2016 Jan 2017 HALF-YEAR FINANCIALS 1,955 1,931 2, x 3.3x x Global iron ore prices Iron ore index (62% Fe, CFR China) 65 USD/ t Revenue H H H USD mn EBITDA H H H Net Debt/EBITDA LTM* Jul 2015 Jan 2016 Jul 2016 Jan 2017 Notes: Hereinafter EBITDA stands for EBITDA adjusted according to IFRS requirements. For more details, please refer to IFRS Statements *The indicator has an informational character and does not contain adjustments as per loan documentation 6 Source: Bloomberg data as of 31 December 2016

7 OPERATIONAL RESULTS 7

8 Production volumes Iron ore* Pellets HBI/DRI Hot metal Crude steel mn t key developments Growth in iron ore production* of 3.1% y-o-y largely due to increased productivity and scheduled decrease in maintenance works at LGOK Increase in pellet production of 5.9% following the launch of Pellet Plant #3 at MGOK Increase in HBI/DRI production of 4.8% y-o-y mainly due to higher productivity of DRI units at OEMK Hot metal production increase of 20.2% y-o-y mostly due to the launch of Blast Furnace #4 and Pig Iron Casting Machine #5 at Ural Steel at the end of 2015 Crude steel production increased by 3.6% y-o-y mainly as a result of the higher productivity of electric arc furnaces, following the modernisation of the gas purification system at OEMK and higher capacity utilisation of Continuous Casting Machine #1 at Ural Steel, following increased cast billet demand Note: * Iron ore refers to iron ore concentrate and sintering ore 8

9 Shipment structure Mining Segment mn t Steel Segment mn t 2016 Russia Europe Asia MENA Others* Shipments to Russia accounted for 61% of total sales; a decrease of 7.9% was driven by a reallocation of volumes to European customers Shipments to Europe grew by 33.5% mainly as a result of increased supplies to customers in the Netherlands, Slovakia and Italy Shipments to Asia declined by 23.8% due to higher sales to the European market Shipments to Russia fell by 5.0% due to a reallocation of shipments to export markets Shipments to MENA grew by 9.8% mostly due to an increase in steel product shipments to steel companies in the UAE and Morocco Shipments to other countries increased by 47.2% mainly due to a growth in pig iron supplies to the USA Data on major plants: LGOK, MGOK, OEMK, Ural Steel * Others includes shipments to the Americas and CIS countries, Americas share of Steel Segment shipments 82% 9

Steel Segment Mining Segment Major new long-term

contract period) Contract term Industrial

year ChelPipe First HBI contracts with Russian

Round cast billets (for railway wheels) 10 years

10 Steel Segment Mining Segment Major new long-term supply contracts Producer Customer Shipments (for contract period) Contract term Industrial Metallurgical Holding high-grade iron ore concentrate for RUB 6.8 bn 2 years TMK Group 220,000 t MMK HBI 200,000 t 1 year ChelPipe First HBI contracts with Russian companies 150,000 t United Metallurgical Company* Round cast billets (for railway wheels) 10 years Longest ever contract Aktobe Rail and Section Works > 1 mn t of rail and shaped billets 5 Years * The contract was signed in January

11 FINANCIAL RESULTS 11

12 Revenue composition 2016 Revenue: USD 4,261 mn Revenue by region Iron ore HBI Steel products Pellets Pig iron Other revenue Russia USD mn 1,876 1,688 3% 11% Europe 967 1,019 41% 41% 4% 12% 11% 12% 12% 20% 21% 12% 2016 outer circle 2015 inner circle Asia MENA Other countries Export share 60% in 2016 vs. 57% in

13 EBITDA composition 2016 EBITDA: USD 1,258 mn Y-o-y EBITDA dynamics In H2 2016, both Mining and Steel Segments demonstrated a strong recovery in EBITDA on the back of operational improvements, change in the product USD mn EBITDA , % mix and positive price dynamics in the Company s major markets Revenue (132) H EBITDA growth by segment 574 Cost of sales Distribution expenses G&A expenses 6 USD mn Other EBITDA 2016 (118) 1, % Mining Steel H H H EBITDA margin Notes: EBITDA stands for EBITDA adjusted according to IFRS requirements. For more details please refer to IFRS Statements 13

14 EBITDA Interest Taxes Chg. in NWC Capex FCF EBITDA Interest Taxes Chg. in NWC Capex FCF Disposal of financial assets* FCF after disposal of financial assets Positive free cash flow 1, (284) (90) 45 (417) 686 1,258 (315) (83) (6) (290) USD mn Notes: EBITDA stands for EBITDA adjusted according to IFRS requirements. For more details, please refer to IFRS Statements *Proceeds from the disposal of ADRs in MMC Norilsk Nickel s (as of 31 December 2016, Metalloinvests s stake had decreased from 3.2% to 1.8%) 14

developments February: Issue of RUB 5 bn bonds (series

90%, call option in 7 years, maturity in 10 years 99% 84%

of up to USD 450 mn from a club of banks with maturities in

BO-02, BO-08), with a coupon rate of 10.

Redemption of debut Eurobond issue for a nominal amount of

finance facilities in the amount of ~ USD 600 mn ahead of

currency Breakdown by source 56% 73% 38% 23% 4% 6% USD RUB

15 Debt profile as of 31 December 2016 Total Debt: USD 4,150 mn The lowest level in the last 5 years 2016 key developments February: Issue of RUB 5 bn bonds (series BO-07) with a coupon rate of 11.90%, call option in 7 years, maturity in 10 years 99% 84% 16% 1% Long-term Short-term March: Dual-tranche PXF* loan of up to USD 450 mn from a club of banks with maturities in 5 and 7 years March: Issue of RUB 15 bn bonds (series BO-02, BO-08), with a coupon rate of 10.95%, put option in 5 years, maturity in 10 years July: Redemption of debut Eurobond issue for a nominal amount of USD 750 mn July: Partial repayment of several pre-export finance facilities in the amount of ~ USD 600 mn ahead of the scheduled maturity dates in Breakdown by currency Breakdown by source 56% 73% 38% 23% 4% 6% USD RUB EUR 2016 outer circle 2015 inner circle 22% 16% 7% PXF 13% 31% 29% 16% 6% 36% 24% Eurobonds RUB bonds Sberbank Other *Pre-export financing 15

16 Liquidity and maturity Maturity schedule was improved significantly during 2016 Basic sources of debt repayment: Cash fully covers debt repayments due in Positive FCF generation through the cycle Debt maturity schedule as of 31 December RUB USD, EUR Undrawn committed credit lines* USD bn Cash Liquidity After 2022 Notes: Management accounts as of 31 December 2016 * Undrawn committed credit lines represent only long-term lines (>12 months as of 31 December 2016) 16

17 CORPORATE GOVERNANCE & RATINGS 17

Board of Directors Name Category Company Ivan Streshinsky Galina Aglyamova Valery Kazikaev Nikolai Krylov Pavel Mitrofanov New member since June 2016 Irina Lupicheva Ivan Tavrin New member since June

18 Board of Directors Name Category Company Ivan Streshinsky Galina Aglyamova Valery Kazikaev Nikolai Krylov Pavel Mitrofanov New member since June 2016 Irina Lupicheva Ivan Tavrin New member since June 2016 Dmitry Tarasov Chairman Non-executive Independent Non-executive Non-executive Audit C Committees Finance, Budgeting & Strategy Incr. of independent director role in strategic issues C Remuneration C In June 2016, the General Meeting of Shareholders elected the new BoD members Pavel Mitrofanov and Ivan Tavrin joined the Board as Non-Executive Directors Sergey Soldatenkov and Natalia Chumachenko resigned from their positions In Jun.-Aug. 2016, BoD approved the new composition of the committees Pavel Mitrofanov joined the Finance, Budgeting and Strategy Committee as Chairman Galina Aglyamova joined the Finance, Budgeting and Strategy Committee Ivan Tavrin took on the post of the Chairman of the Remuneration Committee, replacing Ivan Streshinsky Chairman of the Board of Directors of CTC Media LLC, JSC Kommersant, UTH Russia Andrey Varichev Executive Ivan Tavrin 1998 Graduated from the international law faculty of MGIMO Committee member C Chairman of the Committee 18

19 Change in shareholder structure Ivan Streshinsky, Chairman of the BoD: The consolidation of 100% of the shares on the balance sheet of USM Metalloinvest marks the final stage of the process to transfer the Company s shares to the Russian Federation. The aim of these measures is to simplify the shareholder structure and improve the quality of corporate governance. Before After USM Holdings Cyprus USM Investments Cyprus USM Metalloinvest LLC 22.1% 4.5% 54.25% Metalloinvest 15.96% 3.19% Russia Russian-based entity with direct control USM Metalloinvest LLC 100% Metalloinvest Russia OEMK Russia LGOK Russia 19

20 Credit ratings Rating BB Ba2 BB BBB+ STABLE in Feb.2017* Outlook STABLE STABLE STABLE NEGATIVE Date May 2016 April 2016 February 2016 September 2016 *S&P revised its outlook on Metalloinvest from Negative to Stable in February

21 CAPITAL EXPENDITURE PROGRAMME 21

Strategic investment projects Pellet Plant

22 Strategic investment projects Pellet Plant #3 at MGOK Launched in Sep Capacity (design) 5.0 mtpa Capex ~16 RUB bn HBI-3 Plant at LGOK (one of the largest HBI plants in the world) To be launched in H Total Capex ~650 USD mn Capacity (design) 1.8 mtpa Capex in 2016 ~160 USD mn Shaft furnace Hydroseparator Covered flyover of belt conveyer 22

23 Key focus in decision making on Capex Quantity of HVA products Quality of products and cost cutting measures Pellet Plant #3 at MGOK +5.0 mn t of pellets HBI-3 Plant at LGOK +1.8 mn t of HBI Stack sizer screen classifications Increase in Fe content of high grade iron ore: from 69% to 70.4% Decrease in SiO 2 content of high grade iron ore: from 3.0% to 2.5% realised at LGOK pilot project at MGOK Specific projects to satisfy customer demand Precision sizing unit on Mill 350 at OEMK Modernisation of four-strand continuous casting machine (CCM) at Ural Steel Heat treatment facilities at Ural Steel Expected to be realised in In-pit crushing and conveyor complex Final configuration is subject to BoD approval 23

The contract lasts until the end of 2027 Feb. 2017 Metalloinvest signed an additional loan agreement with ING BANK (EURASIA).

24 SUBSEQUENT EVENTS Jan Metalloinvest and United Metallurgical Company signed a long-term contract for the supply of round cast billets for the production of seamless railway wheels. The contract lasts until the end of 2027 Feb Metalloinvest signed an additional loan agreement with ING BANK (EURASIA). According to the terms of the agreement, the Bank increased the limit of the Company s revolving credit line from USD 100 mn to USD 150 mn and extended the duration of the loan by two years Standard & Poor s Ratings Services revised its outlook on Metalloinvest from Negative to Stable. S&P also affirmed the Company s BB long-term corporate credit rating 24

25 Q&A SESSION 25

26 APPENDICES 26

27 Key financial indicators USD mn H H FY 2015 H H FY 2016 Change Revenue 2,438 1,955 4,393 1,931 2,330 4,261 (3.0%) Gross profit 1, , ,154 2,050 (3.2%) EBITDA , ,258 (12.2%) EBITDA margin 35.8% 30.6% 32.6% 27.6% 31.1% 29.5% (3.1 ppt) Net income 517 (299) , x Capex (30.5%) Total debt 4,207 4,387 4,387 5,357 4,150 4,150 (5.4%) Short-term debt (91.8%) Cash and cash equivalents , % Net debt 3,675 3,563 3,563 3,581 3,161 3,161 (11.3%) Net debt / EBITDA LTM* 2.1x 2.5x 2.5x 3.3x 2.5x 2.5x - Notes: EBITDA stands for EBITDA adjusted according to IFRS requirements. For more details please refer to IFRS Statements Cash and cash equivalents include short-term bank deposits Net Debt / EBITDA is calculated based on EBITDA for the last 12 months *The indicator has an informational character and does not contain adjustments as per loan documentation 27

28 Contacts Investor Relations & Corporate Ratings Department Artem Lavrischev Director of Investor Relations & Corporate Ratings T: +7 (495) , ext

METALLOINVEST ANNOUNCES 2017 IFRS FINANCIAL RESULTS

METALLOINVEST ANNOUNCES 2017 IFRS FINANCIAL RESULTS Moscow, Russia 15 March 2018 Metalloinvest ( the Company ), a leading global iron ore and HBI producer, and one of the regional producers of high-quality