MMK CORPORATE PRESENTATION
Introduction
1 2 3 4
2
Strategic update
Financial update
Supporting documents
3
ММК position in global Metals & Mining universe
Source: ММК, World Steel, Bloomberg
MMK rating in global steel by financials
Item Value Position
Revenue, m $ 5,630 26
EBITDA, m $ 1,641* 12
EBITDA margin, % 29,1% 2
Net debt / EBITDA 0,1 4
FCF yield 12,1% 6
Russian market share 18% 1
TOP10 steel-making countries (2016), m T
Steel production
China 807,3
Japan 104,8
India 94,8
USA 78,9
Russia 70,8
S. Korea 68,7
Germany 42,1
Turkey 33,3
Brazil 30,2
Ukraine 24,1
Beneficiary shareholder Chairman of BD
Victor Rashnikov Age: 68 / Education: Engineer
84.3%
Free Float (FF) 15.7%
Company origination 1929
Location of main asset Central Russia, Urals
Steel-making capacity, m T 16
MMK positioning by Mcap as of 22.09.2017…
Global Steel, bn $ Russian Public Co, bn $
1 Arcelor-Mittal 26.5 1 Sberbank 75.1
2 Baoshan 24.1 2 Rosneft 58.3
3 Posco 23.6 3 Gazprom 49.7
7 NLMK 13.3 12 NLMK 13.3
8 Severstal 12.7 13 Severstal 12.7
13 MMK 8.2 20 MMK 8.2
20 Evraz 5.7 27 Evraz 5.7
MMK positioning by steel production (2016), mln T
1 Arcelor-Mittal 95.5
2 China Baowu Group 63.8
3 HBIS Group 46.2
16 NLMK 16.6
28 Evraz 13.5
29 MMK 12.5
31 Severstal 11.6
10 years as a public company, continuous implementation of our Growth Strategy
4
2000
2007
2008
2009
2011
2012
2013
2015
2016
2010
2014
2006
2005
2002
2001
2004
MMK acquires Belon (coal asset)
Thick-plate Mill 5000 is launched
Start of the first phase of the 2000-2007-2013 Strategy: creating a new image for the Company
Successful implementation of investment projects until 2007
Construction of a steelmaking facility in Turkey with capacity of 2.3 million tonnes per year is completed
Two lines of Mill 2000 for cold-rolled products are launched
New Growth Strategy through 2025 is adopted
Purpose: to raise share capital to implement the second stage of the 2000-2007-2013 Strategy
Launch of the galvanizing unit and modernization of Mill 2000 for hot-rolled products
Listing on the London Stock Exchange
2000
2007
2008
2009
2011
2012
2015
The Company presented its 2013 Growth Strategy as part of a roadshow
In conducting its business, MMK is guided by Russian and international corporate governance standards
The principles of our corporate governance are:
protecting the rights and interests of shareholders and investors
equal treatment of all shareholders
mutual trust and respect for all stakeholders
transparency and timely disclosure of information on strategy and current activities
management practice aimed at MMK’s long-term prosperity
minimisation of the Company's environmental impact
High corporate governance standards
5
Structure of MMK’s Board of Directors
30%
50%
Executive
Dependent
50% Independent
Strategic update
2 3 4
Introduction
1
6
Financial update
Supporting documents
$200
$300
$400
$500
0 100 200 300 400 500 600
Cumulative volume of production, mln t
MMK retains its position as a low-cost producer 7
Cost curve for slab production in 2016 (USD/t)
Slab price FOB Black Sea
USD373/t (2016)
MMK slab cash-cost USD235/t (Q4 2016) $235
$373
MMK remains one of the lowest-cost producers in the world
Source: CRU, Metal Courier, ММК
13.7%
17.9% 16.7% 16.5%
2000 2005 2010 2015
70.7%
80.6%
86.9% 82.6%
2000 2005 2010 2015
Low consolidation of world steel industry results in intense competition and reduces steel prices
Global Top-5
Consolidation in Russia is much more substantial, resulting in higher prices than in global markets
Top-5 in Russia
Market trends:
8
Over the past 10 years, consumption of rolled steel products in Russia, has remained stable; a temporary decline in 2015-2016 was partially offset by a reduction in imports
Consumption of HVA productions in Russia is more stable during periods of economic recession
The reduction of metal imports in Russia is associated with growth in domestic production of HVA products and the high competitiveness of Russian metals companies
Consumption of rolled steel in Russia (million tonnes)
45 46 45 42 40 41
2013 2014 2015 2016 2017E
2013 2014 2015 2016 2017E
2012
2012
+3.5%
Imports of rolled steel in Russia, (million tonnes)
7.2 6.9
5.5
4.0 3.6 3.3 -1%
Consumption of HVA products in Russia (million tonnes)
9.1 9.4 9.2 8.2 8.1 8.3 +1.8%
Source: Metal-Courier, ММК
Consumption of rolled steel in Russia will return to growth in 2017; imports will continue to decline
Market trends:
2013
9 Pipe production, construction and automotive industries will be the main drivers of growth in steel consumption in 2017
Increase in real incomes and government investments into infrastructure projects will support the construction sector and thus increase demand for construction steel
High levels of deferred demand for new cars will spur the automotive industry as consumers return to the market
Higher global oil prices will lead to an increase in investments in pipeline construction projects
Sources: Metal-Courier, ММК
2.1%
-1.8%
-7.8%
-4.0%
3.5%
6.4%
13.4%
0.7%
-11.7%
8.6%
Automotive industry
Pipe production industry
Construction industry
In 2017 major industries are expected to increase their consumption of steel products in Russia
2013 2014 2015 2016 2017Е
2014 2015 2016 2017Е
-17.0% -14.9%
-20.4%
10.8%
4.6%
Market trends:
MMK has proved to be a stable company throughout the price cycle
10
High price volatility in global markets
is typical for a cyclical industry and
does not pose a critical threat to
MMK’s business
Sources: Platts, MMK
MMK maintains a sufficient price
corridor to keep its EBITDA margin
above 20%
147 169
130 135
97
56 58
229
308
206
161 126
95
146
589
678
571 539 527
340 373
-100
100
300
500
700
0
100
200
300
400
500
2010 2011 2012 2013 2014 2015 2016
258
294
268 226
238
222 236
0
100
200
300
400
500
600
700
2010 2011 2012 2013 2014 2015 2016
Changes in global prices for iron ore, coking coal and hot-rolled products (USD/t)
Changes in the price corridor (the difference between the selling price of MMK’s hot-rolled coils in the Russian market and the cost of MMK’s raw materials basket*) (USD/t)
MMK raw materials basket
Price range
MMK’s raw materials basket is calculated as the sum of the average procurement prices of iron ore, coal concentrate for coking and scrap metal used for the production of 1 tonne of steel
*
Iron ore index, CFR China Coking coal index, CFR China HRC, FOB Black Sea
Market trends:
Sustainable EBITDA margin
11
In
tern
al
Facto
rs
Exte
rn
al
Facto
rs
MMK has structural advantages at almost all stages of the business process:
Reasons for long-term sustainability of EBITDA margin
Historic EBITDA (USD million)
Sourc
e:
Blo
om
berg
, М
МК
2,407
2,204
1,309
1,606
1,336 1,363 1,223
1,607 1,668 1,641
0
500
1 000
1 500
2 000
2 500
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
29.4%
20.9%
25.8%
20.8%
14.4% 14.6% 14.9%
20.2%
28.6% 29.1%
22.6%
20.9%
11.5%
14.7%
12.6%
10.0% 10.6%
12.9% 12.3%
11.3%
30%
25%
20%
15%
10%
5%
0%
MMK EBITDA margin
Average EBITDA margin, top-30 producers
Structural surplus of key raw materials in the local market
Customer proximity and low transport costs
Low prices for energy inputs
Economies of scale
High capacity utilisation
Low energy efficiency
Low productivity
High share of HVA products
Proximity of sales markets
Natural hedge due to low transportation costs upon sale
Increasing operating efficiency
12
1
2
3
4
5
6
7
8
9
10
Source: MMK
Sales: Just-in-time Baby Capex and Lean Transaction digitisation, IoT Supplies: Just-in-time Resource management personalisation Non-core asset divestiture Zero tolerance for safety violations Improving employees’ health Clean city programme Solving “single-factory town” issues
Strategic projects
Basic and raw materials
Industrial services
Ancillary materials
Energy inputs
Labour costs
SG&A
TOTAL REDUCTION:
112
14
20
5
23
18
32
The structure of the Group’s cost reduction in 2016 (USD
million)
Activities to improve operational efficiency are expected to reduce costs on average
2-3% per year
Between 2014 and 2016 the average cost reduction was in line with targets at
3% per year
In 2016 the efficiency programme helped the Company achieve reduction in costs of
2.8%
Increasing operational efficiency: Impact on MMK slab cash-cost
13
474
403 378
304
208 203
0
100
200
300
400
500
2011 2012 2013 2014 2015 2016
Change in MMK slab cash-cost
(USD/t)
Change in MMK slab cash-cost in 2016
(USD/t)
Slab cash-cost, 2015
Cost of raw materials and other inputs
USD exchange rate
Reduction in flexible costs
Reduction in fixed costs
Slab cash-cost, 2016
-10.2
Increase in production efficiency
Organisational and technical measures Baby CAPEX Rational proposals Energy-efficiency measures TOTAL
7.2
1.0
1.5
0.5
10.2
USD/t
Source: ММК
203 208
22 -17
-5.7
-4.5
150
160
170
180
190
200
210
220
230
240
14
Virtual and augmented reality
Accumulation of technical data on the production process, technology and equipment
Control and monitoring of material flows
Process modelling
Centralised storage and processing of data in the corporate storage facility (Big Data)
Strategic IT projects Industry 4.0
15 Strategic IT projects Industry 4.0
Sniper
Energy Optimisation Model —
Energy Steel Goal: To find optimal energy use regimes in terms of economic impact of development and consumption of energy resources
Implementation: Automated regulation of the steam boilers of the Central Electricity Station introduced based on minimising use of natural gas
Results:
Target saving will amounted to
around USD 5 million per
year
Development:
Development and introduction of automated systems at PВЕС and heat-and-power plant
Modelling of all of MMK’s energy systems
Big Data — Optimisation of the
first processing stage Implementation: Coal charge/ iron ore optimisation model from the start of purchases up to the production of coke/agglomerate and pig iron
“Optimum pig iron” automated information system
Operational management model of the domain process
Results:
Savings of up to USD 40 million a year by reducing costs,
stabilising quality and improving forecast accuracy
Energy Steel
Big Data Yandex —
Project Sniper Goal:
Reducing cost of expensive materials (annual consumption of c. USD300 million)
Implementation:
A mathematical model has been developed that forms recommendations for the optimal amount of materials for each smelter
Results:
Saving of up to 10% on
test smelting
Estimated applicability of recommendations 20-25%
Development:
Increase applicability of recommendations to 80%
Expected savings of 3-5% of basic oxidising and alloying materials
MMK
Implicit equipment diagnostics
Mobile MRO
IT platform – Energy management
Augmented reality for equipment repair
ММК
MMK
MMK
Financial update
Supporting documents 3 4
Introduction
1
16
Strategic update
2
Key highlights for MMK Group
Revenue USD 1,926 mln up 16.0% on Q1 2017
Cost of sales USD 1,389 mln up 18.6% on Q1 2017
EBITDA USD 455 mln up 0.7% on Q1 2017
EBITDA margin 23.6% down 3.6 p.p. on Q1 2017
Net profit USD 297 mln up 23.2% on Q1 2017
Cash-cost of slab USD 290 per tonne down 3.7% on Q1 2017
Free cash flow (FCF) USD 203 mln up 13.5 times on Q1 2017
CAPEX USD 163 mln up 34.7% on Q1 2017
Q2 2017 financial results
* Adjusted to the effect from Fortescue Metals Group (FMG) stake sale
Source: ММК
Revenue USD 3,586mln up 37.8% on H1 2016
Cost of sales USD 2,560mln up 41.1% on H1 2016
EBITDA* USD 907 mln up 29.2% on H1 2016
EBITDA margin 25.3% down 1.6 p.p. on H1 2016
Net profit USD 538 mln up 10.7% on H1 2016
Free cash flow (FCF) USD 218 mln down 33.7% on H1 2016
CAPEX USD 284 mln up 71.1% on H1 2016
H1 2017 financial results
17
2 946 2 683 2 890 2 668 2 788 3 003 2 861 2 918 2 723 2 882
46,3% 48,3%
46,7% 45,5% 44,8% 47,3% 45,5% 45,5% 48,2%
44,7%
0,0%
20,0%
40,0%
60,0%
0
1 000
2 000
3 000
4 000
Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17
Steel products HVA Products Share
High capacity utilisation
* - including made from ММК steel
Key production indicators, ths tonnes
MMK Group finished products dynamics, ths tonnes Key capacities utilization rates, Q2 2017, %
Source: ММК
Q2’17 Q1’17 % H1’17 H1’16 %
Pig iron 2,578 2,372 8.7% 4,950 4,859 1.9%
Crude steel 3,182 3,066 3.8% 6,248 6,208 0.6%
ММК 3,182 3,066 3.8% 6,248 6,208 0.6%
Finished products incl. 2,882 2,723 5.9% 5,605 5,791 -3.2%
ММК 2,780 2,675 4.0% 5,455 5,644 -3.4%
ММК-Меtiz* 111 104 6.9% 215 199 7.9%
ММК Metalurji* 253 210 20.7% 463 415 11.4%
HVA products 1,287 1,313 -1.9% 2,600 2,669 -2.6%
Coking coal concentrate 699 609 14.8% 1,308 1,423 -8.1%
96%
77%
97%
100%
55%
100%
100%
0% 25% 50% 75% 100%
Coated steelproducts
CRC
HRC
Long Steel
Steel EAF
Steel BOF
Blast Furnace
18
-81 -96
-121
-148 -162 -161
Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17
973
1 474 1 427 1 473
1 587
1 822
Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17
MMK Group revenue for Q2 2017
amounted to USD 1,926 mln, up
16.0% on Q1 2017. This was
primarily due to the growth in
finished products sales, stronger
rouble to US dollar, and changes
in finished products stocks in
traders’ warehouses.
Coal segment
Consolidation
Steel segment
(Russia)
Source: ММК
19
Q1 ‘16 Q2 ‘16 Q3 ‘16 Q4 ‘16 Q1 ‘17
MMK Group Revenue by Segments, mln USD Q2 ‘17
Steel segment
(Turkey)
Q1 ‘16 Q2 ‘16 Q3 ‘16 Q4 ‘16 Q1 ‘17 Q2 ‘17
43 41 47
76 85
78
Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17
115 133 125
149 150
187
Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17
MMK Group key financial highlights
423
11 24
-6
416
9 26 4
-20
180
380
Steel (Russia) Steel (Turkey) Coal Mining Eliminations
Q1 17 Q2 17
645
34 23 0
839
20 50
-2 -10
240
490
740
990
Steel (Russia) Steel (Turkey) Coal Mining Eliminations
H1 16 H1 17
311 345 299 294
242 291 305
352 414 409
153 178
143 96
82
157 165 148
159 147
0
200
400
600
Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17
COGS EBITDA/tonne
MMK Group key financial highlights
Average sales price in Q2 2017
decreased q-o-q due to correction in
global steel prices and the domestic
market prices.
EBITDA for the Russian steel
segment in H1 2017 grew 30.1% y-
o-y. This was mainly due to an
increase in the average sales price
by 47.1% and higher share of HVA
products amid an insignificant
decrease in finished product sales
volumes.
EBITDA for the coal segment in H1
2017 more than doubled y-o-y and
amounted to USD 50 mln. This
growth was due to a significant
increase in coking coal prices on the
global markets.
EBITDA/t vs metal sale price USD/t
Annual EBITDA* dynamics mln USD
Quarterly EBITDA dynamics mln USD
Source: ММК
MMK Group’s EBITDA for Q2 2017 amounted to USD 455 mln, up 0.7% on Q1 2017
MMK Group’s EBITDA in H1 2017 grew 29.2% y-o-y and amounted to USD 907 mln
324
556
464 523
442 390
448 470 500
573
* Adjusted to the effect from FMG stake sale
20
301 290
-16 -3 8
100
200
300
Slab cash-costQ1 2017
Raw materialsprice
Raw materialsstructure
Other factors Slab cash-costQ2 2017
Analysis of key financial highlights
Cash-cost of slab performance USD/t
Net profit mln USD
Q2 vs Q1 2017 revenue mln USD
The main factors that impacted
revenue in Q2 2017 were lower prices
for steel, higher sales volumes and
decrease of stocks held by traders
which are a part of MMK Group.
Cash cost of slab in Q2 2017 declined
USD 11 per tonne, or 3.7% q-o-q.
The key reason for the decline (USD
16 per tonne) was lower prices for key
raw materials.
In Q2 2017, the Company’s profit
amounted to USD 297 mln, up 23.2%
q-o-q.
Source: ММК
1 627 1 730 1 887 1 925 1 660
-94 61 16 87 157
38
0
1 000
2 000
Q1
20
17
Reven
ue
Pric
e c
han
ge
eff
ect
Pro
du
cts
vo
lum
es
FX
Oth
er S
teel
(R
ussia
)S
eg
men
tC
om
pan
ies
Q1
20
17
Reven
ue
MM
KM
eta
lurji
+C
oal M
inin
g
Q2
20
17
Reven
ue
196 272
78
-125
157
329 417
208 241 297
-130
-30
70
170
270
370
Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17
21
Depreciation & CAPEX
Quarterly CAPEX mln USD
Smart CAPEX mln USD
Depreciation mln USD
In Q2 2017, MMK Group CAPEX
amounted to USD 163 mln. The
growth on the previous quarter is in
line with the investment projects
schedule and is in part connected to
the stronger rouble rate.
In 2017, CAPEX is expected to
amount to RUB 38-39 bln. Since the
investments are mainly made in
roubles, CAPEX in US dollar terms will
be affected by high FX rate volatility.
Source: ММК
2 209
1 154
674 622 497 348 463
≈600
0
500
1 000
1 500
2 000
2 500
2010 2011 2012 2013 2014 2015 2016 2017
64 91 85
108 78 88
112
185
121
163
0
100
200
Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 17 Q2 17
123
142 127
143
94
123 130
132
130 137
0
50
100
150
Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17
22
1 031
1 203
748 812 815
902
767
977
1 239 1206
Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17
Effective WoC management & Sustainable FCF generation
Free Cash Flow (FCF), mln USD
Source: ММК
As of Q2 2017, the working capital/revenue ratio was 15.6%
907
502
218
-216
-189
-284
0
250
500
750
1 000
EBITDA WoC Net financial cost, tax,etc.
FFO PPE FCF H1 17
23
Net working capital mln USD
Solid Free cash flow (FCF)generation mln USD
267
181
1 615
0
500
1 000
1 500
2 000
Liquidity sources Short-term Debt
Cash Credit lines
64
79
179
11
14
59
29 44
27
0
50
100
150
200
2017 2018 2019 2020 2021 andbeyond
Q1 Q2 Q3 Q4
137 182
89 30
80 53
2 2
0
100
200
300
400
31.12.2016 30.06.2017
USD EUR RUB Other
210
4
125
334
165 168
0
200
400
600
31.12.2016 30.06.2017
USD EUR RUB
MMK Group Debt profile
High level of liquidity mln USD
Debt maturity schedule mln USD
Debt and cash funds structure by currency mln USD
Net debt of MMK Group in Q2 2017
was USD 239 mln, with Net debt /
EBITDA ratio of 0.12x.
The share of debt which is
denominated in foreign currencies
(USD, EUR) as of 30.06.2017
amounted to approx. 67%.
The volume of cash funds and short-
term deposits on MMK Group’s balance
sheet (USD 267 mln) fully covers MMK
Group’s short-term debt.
MMK Group’s debt maturity schedule
does not presume any significant one-
off payments.
103
133
1 882
Source: ММК
Debt
500 506
C&CE and Deposits
267 308
24
25
0
0,5
1
1,5
2
2,5
2012 2013 2014 2015 2016*
Board of Directors approved new dividend policy, increasing dividend payouts to 50% of FCF
New dividend policy is approved – no less than 30% of FCF based on H1 and FY results
MMK dividend payments, RUB/share While making significant capital
investments (2000-2013) MMK
reinvested a significant part of its
cash flow into developing production
capacity
New growth points were identified to
help the Company successfully
navigate this period of economic
turbulence and progress to a stage of
financial stabilisation
This fundamentally new Company
has many more opportunities to
increase shareholder value and to
grow dividend payments in the long
term
* The recommended amount of payments for H2 2016 will be RUB 1.242 per share, subject to approval by the Annual
General Shareholders' Meeting
A new dividend story for a rejuvenated Company
Board of Directors recommended EGM to pay 75% of FCF as dividend for H1 2017
Supporting documents
Financial update 4 3
Introduction
1
26
Strategic update
2
27
Overview of high-potential investment projects 2016-2025
Project Description Timeframe Approximate CAPEX,
USD mln
New galvanising unit №3 Increase in output of galvanised products by 370 thousand tonnes per year 2016-2017 100
Reconstruction of hot-rolled products Mill 2500 New product line; reduction of consumption ratios 2017-2020 300
New sinter plant №5 Replacement of plant №4; increase in quality of agglomerate; reduction of pig iron production costs; reduced environmental impact
2017-2019 350
New coke battery Replacement of batteries №1 and №2; increase in coke quality; reduced environmental impact 2019-2021 300
New blast furnace Replacement of blast furnaces №7 and №8; increase in pig iron production volume; reduction of costs; reduced environmental impact
2022-2024 550
Co
sts
P
ro
du
cts
Environmental policy: focus on reducing environmental impact
28
25.5 25.2 24.3
22.0 20.5
18.0
6.5
2.1 2.0 2.0
1.8 1.6
1.4
0.5
0,0
1,0
2,0
3,0
0
6
12
18
24
30
2015 2016 2017 2018 2019 2020 2025
Atmospheric
emissions Effluent discharges
Between 2007 and 2025
Investments in
environmental activities Processing of slag heap
volumes
Dust emissions, thsd. t Per unit dust emissions, kg/tonnes of metal products
Total discharge, thsd. t Per unit discharges, kg/tonnes of metal products
77.2
62.9 62.2 58.2
30.8 28.0
20.7
7.0
5.6 5.4 4.9
2.6 2.3
1.7
0,0
3,0
6,0
9,0
12,0
0,0
20,0
40,0
60,0
80,0
100,0
2015 2016 2017 2018 2019 2020 2025
12.7
7.1
3.1
0.5
0
2
4
6
8
10
12
14
2015 2016 2017 2018 2019 2020 2025
Reduction in slag heap volumes, (million tonnes)
Reclamation of up to
2.1 million m2
of land
10.9 19.2
5.5
35.6 billion roubles
Waste recycling and reclamation activities
Air protection projects
Source: MMK
Water conservation projects
Occupational safety strategy: Safety is not work – it’s a way of life
29
Leadership from MMK’s management in occupational safety matters
Raising employee awareness
Responsiveness in occupational safety matters
Zero tolerance for rule violations
Continuous improvement of safety systems
Tools for achieving our goal:
Total elimination of fatal accidents
Goal:
DISCLAIMER
•THIS PRESENTATION IS FOR INFORMATION ONLY.
•THIS PRESENTATION IS FOR DISTRIBUTION IN UK ONLY AMONG THE PEOPLE HAVING PROFESSIONAL SKILL IN THE ISSUES RELATED TO INVESTMENTS WITHIN THE MEANING OF ARTICLE 19(5) OF DIRECTIVE ON FINANCIAL ADVERTISEMENT APPROVED IN 2005 ON THE BASIS OF LAW ON FINANCIAL SERVICES AND MARKETS 2000, OR THOSE PEOPLE, AMONG WHICH IT MAY BE LAWFULLY DISTRIBUTED. THIS INFORMATION IS CONFIDENTIAL AND PROVIDED TO YOU EXCLUSIVELY FOR YOUR REFERENCE. BY ACCEPTANCE OF THIS INFORMATION THE RECIPIENT HEREOF CONFIRMS THAT HE OR SHE IS A SPECIALIST IN THE SPHERE OF INVESTMENTS WITHIN THE MEANING OF ARTICLE 19(5) OF DIRECTIVE ON FINANCIAL ADVERTISEMENT APPROVED IN 2005 ON THE BASIS OF LAW ON FINANCIAL SERVICES AND MARKETS 2000, ACTING IN HIS OR HER NATURE. •THIS PRESENTATION DOES NOT CONSTITUTE AN OFFER OR A PART THEREOF, OR INVITATION TO SELL OR TO ISSUE, OR TO SUBSCRIBE FOR OR OTHERWISE PURCHASE ANY SHARES IN THE COMPANY OR ANY OTHER SECURITIES AND NOTHING CONTAINED HEREIN SHALL FORM THE BASIS OF ANY CONTRACT OR COMMITMENT WHATSOEVER. •THE INFORMATION CONTAINED HEREIN IS SUBJECT TO VERIFICATION, COMPLETION AND MAY BE SIGNIFICANTLY CHANGED. NONE OF THE PERSONS IS LIABLE TO UPDATE OR MAINTAIN TOPICALITY OF THE INFORMATION CONTAINED HEREIN, AND THIS INFORMATION AND OPINIONS REFLECTED THEREIN COULD BE CHANGED WITHOUT ANY NOTIFICATION THEREABOUT. •THIS INFORMATION DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES TO BE SOLD IN RUSSIA, THE UNITED STATES OR ANY OTHER JURISDICTION. THE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF 1933,AS AMENDED, AND MAY NOT BE OFFERED OR SOLD INTO THE UNITED STATES EXCEPT IN A TRANSACTION REGISTERED UNDER SUCH ACT, OR NOT REQUIRED TO BE REGISTERED THERE UNDER, OR PURSUANT TO AND EXEMPTION FROM REGISTRATION REQUIREMENTS THEREOF. NO OFFERING OF SECURITIES IS BEING MADE INTO THE UNITED STATES. NO SECURITIES WILL BE REGISTERED UNDER THE APPLICABLE SECURITIES ACT OF ANY STATE OR TERRITORIAL ENTITY OF CANADA AND JAPAN. THIS PRESENTATION IS NOT SUBJECT TO MAILING, TRANSFERRING OR OTHER TYPE OF DISTRIBUTION IN THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA AND JAPAN, OR TO THE TERRITORY OR FROM THE TERRITORY OF THE SPECIFIED COUNTRIES TO THE NAME OF ANY ANALYST IN THE SPHERE OF SECURITIES OR OTHER PERSON IN ANY OF THE SPECIFIED JURISDICTIONS. YOU AGREE TO AVOID FROM DISTRIBUTION OF ANY REPORT RESULTING FROM THE SURVEY OR SIMILAR DOCUMENTS ON THE TERRITORY OF THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA AND JAPAN, SAVE AS IN ACCORDANCE WITH THE FEDERAL LAWS OF THE UNITED STATES ON SECURITIES INCLUDING SECURITIES ACT, AS WELL AS THE APPLICABLE LAWS OF CANADA, AUSTRALIA AND JAPAN, ACCORDINGLY. •THIS PRESENTATION INCLUDES THE STATEMENTS RELATED TO THE FUTURE, WHICH REPRODUCE THE INTENTIONS, OPINIONS AND CURRENT EXPECTATIONS OF THE COMPANY. THE STATEMENTS FOR THE FUTURE INCLUDE ANYTHING, WHICH IS NOT A FACT OCCURED. THE COMPANY TRIED TO HIGHLIGHT SUCH STATEMENTS RELATED TO THE FUTURE BY MEANS OF THE WORDS, SUCH AS “MAY”, “WILL”, “SHOULD”, “EXPECT”, “INTEND”, “EVALUATE”, “ASSUME”, “PLAN”, “TO HAVE AN OPINION”, “TRY”, “FORECAST”, “CONTINUE” AND SIMILAR WORDS OR THEIR NEGATIVE FORMS. SUCH STATEMENTS HAD BEEN DONE BASING ON THE ASSUMPTIONS AND ASSESSMENTS, WHICH MAY OCCUR FAULTY, THOUGH THE COMPANY CONSIDERS THEM REASONABLE AT THE CURRENT MOMENT. •SUCH STATEMENTS RELATED TO THE FUTURE ARE LINKED TO THE RISKS, UNCERTAINTIES AND ASSUMPTIONS, AS WELL AS TO OTHER FACTORS, WHICH MAY LEAD TO THE EVENT THAT ACTUAL RESULTS OF THE COMPANY’S ACTIVITY AND ACTIVITY OF THE MARKETS, ON WHICH IT OPERATES OR INTENDS TO OPERATE IN, THEIR FINANCIAL STATUS, LIQUIDITY, CHARACTERISTICS, PROSPECTS AND ABILITIES COUILD MATERIALLY DIFFER FROM THOSE, WHICH ARE EXPRESSED WITH THE HELP OF SUCH STATEMENTS RELATED TO THE FUTURE. THE IMPORTANT FACTORS, WHICH MAY RESULT IN SUCH DIFFERENCES, INCLUDE, INTER ALIA, CHANGING BUSINESS CONDITIONS AND OTHER MARKET CONDITIONS, COMMON ECONOMIC CONDITIONS IN RUSSIA, EU COUNTRIES, THE UNITED STATES OF AMERICA OR ANYWHERE ELSE, AS WELL AS THE ABILITY OF THE COMPANY TO MEET THE TRENDS IN THE INDUSTRY. THE MATERIAL DIFFERENCE OF THE ACTUAL RESULTS, FEATURES AND ACHIEVEMENTS MAY BE THE RESULT OF ADDITIONAL FACTORS. THE COMPANY AND ALL ITS DIRECTORS, OFFICERS, EMPLOYEES AND ADVISORS HEREWITH STATE THAT THEY ARE NOT OBLIGED TO ISSUE ANY UPDATE OF OR REVISE ANY STATEMENTS RELATED TO THE FUTURE CONTAINED HEREIN, OR DISCLOSE ANY CHANGES IN THE FORECASTS OF THE COMPANY OR EVENTS, CONDITIONS AND CIRCUMSTANCES, WHICH SUCH STATEMENTS RELATED TO THE FUTURE ARE BASED ON, SAVE AS IN THE CASES PROVIDED FOR BY THE APPLICABLE LAWS. •RECEIPT OF ANY COPY OF THIS INFORMATION TESTIFIES THE ACCEPTANCE OF THE ABOVE LIMITATIONS.
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