EVRAZ Corporate Strategy

Business Model


EVRAZ is a global steel and mining company,the leading producer of infrastructure steel products with low-cost production along the value chain

Global steel and mining company

  • Among the top 30 global steel producers
    (in terms of crude steel volumes in 2016)
  • Key assets are in Russia and North America
  • FTSE-100 constituent
  • Sales to more than 70 countries

The leading producer of infrastructure steel products

  • №1 in Russian rail market
  • №1 in Russian beam market
  • №1 in Russian construction steel product market
  • №1 in American rail market
  • №1 in American LDP market

Low-cost production along the value chain

  • Located in the first quartile of the steel cash cost curve
  • Iron ore self-coverage - 81%, Coal - 184%
  • Leader among the metallurgical coal producers in Russia, among the top 5 global coal producers

Success factors

EVRAZ strategy is based on five key success factors, which are crucial in achieving our corporate vision

Health, Safety & Environment

Safe work s minimises the risks for employees and for the production process

Target: LTIFR<=1.0х

Human Capital

Motivated employees achieve higher results and generate more breakthrough ideas

Target: Level of personnel engagement is in line with industry leaders

Customer Focus

Responding to the evolving needs of our customers allows us to develop new products and solutions, thus, creating additional value

Target: Increase the share of value-added products

Asset Development

Application of new technologies and cost efficiency allow to be a leader

Target: Maintain the pace of efficiency improvements at 3% of COGS per annum

EVRAZ Business System

The culture of continuous improvement leads to the long-term competitiveness

Target: 100% coverage with EVRAZ Business system (EBS)

Business segments

EVRAZ has three business segments, which have their own areas of specialization and specific competitive advantages


EVRAZ steel segment is mainly focused on steel production in the CIS from closely located raw materials to serve the domestic infrastructure and construction market while maintaining export flexibility. EVRAZ steelmaking business is self-covered in iron ore by 78%. Processing vanadium slag from steelmaking operations also decreases production cost and is the base for the EVRAZ vanadium business.
2017 results
EBITDA Production of steel products Cash cost of semi-finished products
$1 483m


EVRAZ Coal segment not only supplies own steel mills with necessary raw material but also provides coking coal to major Russian coke and steel producers and serves export markets. Being the largest coking coal producer in Russia EVRAZ is able to capture additional margins due to an attractive product portfolio and a low-cost position.
2017 results
EBITDA Production of raw
coking coal
Production of coking
coal concentrate
Coal coking
concentrate cash cost
$1 226m


The North American steel segment business model serves premium markets of Western United States and Western Canada with high value-added steel products for infrastructure, rails and LD/OCTG pipes. Vertical integration in scrap and re-rolling slab from Russian steel operations also help protect margins.
2017 results
EBITDA Production of steel products

Competitive advantages

EVRAZ competitive advantages provide lasting, group-wide benefits which are critical to our ability to generate, sustain and capture value over the long-term

Leader in infrastructure steel products.

Premium portfolio of railway, construction and tubular products with firm footprint in Russian, North American and global markets.

Strong position in coking coal market.

Largest coking coal producer in Russia with attractive portfolio of hard and semi-hard coking coal grades.

Vertically integrated low-cost operations

Sound base of steel and coal assets in the first quartile of the global cost curve.

Key Priorities

Strong and competitive business model enables EVRAZ to set key priorities that are driven by market conditions and business fundamentals and to successfully accomplish them

Development of product portfolio and customer base:


To improve our product portfolio by increasing the share of finished products, reaching self-sufficiency in all coal grades as well as regaining market shares in North American rail and tube markets

Achievements in 2017

Total EBITDA effect from customer focus initiatives - $104m

Steel Coal ENA
EVRAZ sales of H-beam
in Russia, kt
Internal consumption, % NA Rails marlet
share, %
OCTG market share in
Western Canada,%
490 650 2017 5 years +33%
60% c .100% 2017 5-10 years +40 p.p.
34% 45% 2017 5 years +11 p.p.
28% 50% 2017 5 years +22 p.p.
Domestic market demand
improvement through
promotion of steel
construction and
substitution of welded
Development projects in
low-volatile coal grades
(K, KO, OS, KS) to reach full
Investment projects to regain market

Retention of low-cost position:


To implement annual efficiency improvement programme with the effect of 2-3% from COGS per annum This goal will be achieved via a combination of bottom-up and top-down approaches to initiatives generation

Achievements in 2017

Total EBITDA effect from cost-cutting initiatives - $163m

Examples of initiatives
1 2 3
Wheels production
Higher yield at Raspadskaya
mine due to lower ash content
in raw coal
Energy efficiency initiatives
effect 2017
$30m $17m $10m

Prudent CAPEX:


To pursue selective investments in projects with IRR > 20%
Future investments projects are most likely to be focused on the development of the steel products portfolio in Russia and North America

Achievements in 2017


Regina steelmaking
upgrade and LDP mill

Regular dividends and proactive debt management:


To maintain Net debt / EBITDA level 2.0x through the cycle, To resume regular dividend payouts

Achievements in 2017

  • Net Debt/EBITDA level achieved 1.5x in 2017
  • c.$430m of dividends paid out
EVRAZ Net Leverage
Target 2.0x 2015 2016 2017 5 349 4 804 3966 3.1x 3.7x 1.5x Net debt,$m Net debt/EBITDA, x
EVRAZ dividend payments
Amount of dividends
Dividends per share

Value that we create

EVRAZ will continue to act in accordance with its strategic priorities to make its business model more robust and explore options to maximize value for our shareholders and other involved parties


EVRAZ experienced management team and corporate governance best practices provide the assurance that EVRAZ acts in the very best interest of its shareholders


Development programmes and industry-leading working conditions make EVRAZ one of the most attractive employers in the regions of its operations


An increasing focus on the development of value-added products, improvements of shipping terms and tailored client services provides additional value to our customers around the world.

Suppliers and business partners

As the key buyer of auxiliary materials and services with above-board and transparent tendering processes, EVRAZ supports industries’ growth and continual improvement.

Local communities

EVRAZ sees that business sustainability is ultimately connected with the prosperity of the regions of our operations and the satisfaction of the local communities, which we support through social and improvement programmes.

State bodies

EVRAZ contributes value to the government by providing construction and railway products for the development of infrastructure, and is also one of the largest taxpayers and employers in Russia