Annual Report 2007 - Severstal

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Business review Dividends, 2007 Dividends Starting Record Ex- dividend per share date for Period date date (roubles) payments Interim dividends 18 May 18 May 5 July for 3 months 2007 2007 2007 2.6 2007 Interim dividends 20 August 20 August 3 October for 6 months 2007 2007 2007 10.0 2007 Interim dividends 14 November 14 November 20 December for 9 months 2007 2007 2007 2.5 2007 Dividends 15 May 15 May 3 July for 12 months 2007 2008 2008 4.0 2008 Dividend policy: – Dividend payments are made on a quarterly basis – Satisfactory annual profits are the preliminary condition for dividend payment – In determining the size of annual dividends we take into account the cyclical characteristics of the industry. The size of dividends can change depending on the volume of net profits and the company’s cash flow – In the medium term, the company foresees dividend payments of no less than 25% of net profits received at the end of the reporting period, calculated under IFRS – In the long term, the company has the right to increase the size of the dividend payments provided that the condition that capital expenditure requirements are met – The company has the right to decide to pay out interim dividends, provided that it is in a financially stable condition at the time. Bonds In 2007, Severstal fully redeemed its first rouble-denominated bond issue, worth 3 billion roubles, which was placed in 2003. There are currently two 2004 Eurobond issues on the market, and the Eurobonds profitability tracks the market. In the first half of 2007, yield to maturity declined slightly, reflecting the growth of the issuer’s reliability. In the second half of the year, the trend reversed, as the capital markets in general (and the debt markets in particular) became more unstable. Eurobond credit ratings During 2007, the principal rating agencies upgraded the credit ratings of Severstal bonds, confirming the company’s high level of reliability. Standard & Poor’s upgraded Severstal Eurobonds to BB (with a stable forecast), while Moody’s upgraded the bonds to Ba2 (stable forecast). Fitch did not review ratings in 2007. Standard Fitch Moody’s & Poor’s Severstal-2009 BB – Ba2 Severstal-2014 BB BB– Ba2 58 Severstal Annual Report 2007
Eurobond issues Interest Date Date of Sum of issue, Lead Form Issue rate of issue redemption US$ manager of issue Citigroup Loan 24 February 24 February Global Markets Participation Severstal-2009 8.625% 2004 2009 325 million Limited Notes Citigroup Loan 19 April 19 April Global Markets Participation Severstal-2014 9.25% 2004 2014 375 million Limited Notes Severstal versus RTS Index % 25 20 SVST RTS Index US$23.2 US$22.65 US$ 15 10 US$11.05 2,291 RTS Index 2,064 RTS Index 5 1,779 RTS Index 0 02.01.07 01.02.07 01.03.07 02.04.07 01.05.07 01.06.07 02.07.07 01.08.07 03.09.07 01.10.07 01.11.07 03.12.07 02.01.08 01.02.08 03.03.08 01.04.08 Share price and turnover on MICEX 700 Severstal (CHMF), roubles Turnover, roubles mln 1,200 600 1,000 500 400 300 200 800 600 400 100 200 0 0 09.01.07 01.02.07 01.03.07 02.04.07 02.05.07 01.06.07 02.07.07 01.08.07 03.09.07 01.10.07 01.11.07 03.12.07 09.01.08 01.02.08 03.03.08 01.04.08 roubles roubles millions Severstal Annual Report 2007 59
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Annual Report 2007
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We are a leading international stee
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Sales by delivery destination 2007
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Corporate structure In April 2008,
Page 9 and 10: Dividend payments were 40.1% of 200
Page 11 and 12: Our strategy for growth is to: - Re
Page 13 and 14: Principal events of 2007 January Ch
Page 15 and 16: Reconstructed in 1996 using steel p
Page 17 and 18: The mining area of Vorkutaugol cons
Page 19 and 20: Severgal, Cherepovets is equipped w
Page 21 and 22: A process technician at Spartan Ste
Page 23 and 24: Severstal Annual Report 2007 21
Page 25 and 26: Severstal Annual Report 2007 23
Page 27 and 28: In 2007, Izhora Pipe Mill produced
Page 29 and 30: Crude steel production Million tonn
Page 31 and 32: Pipe industry In 2007, the steel co
Page 33 and 34: Risks Operational risks Investment
Page 35 and 36: Severstal revenue by segments,* 200
Page 37 and 38: Mining Severstal’s Mining segment
Page 39 and 40: Mining segment, sales by products,
Page 41 and 42: Mining segment, export sales, FCA b
Page 43 and 44: Russian Steel Crude steel productio
Page 45 and 46: Sales by products 2007 2006 Change
Page 47 and 48: Costs 2007 2006 US$ % of US$ % of C
Page 49 and 50: Key performance indicators 2007 200
Page 51 and 52: SNA revenues by industries Automoti
Page 53 and 54: Sales by products 2007 2006 Change
Page 55 and 56: Metalware Sales by industry in Russ
Page 57 and 58: Izhora Pipe Mill Production of larg
Page 59: Severstal on the capital markets Sh
Page 63 and 64: Corporate social responsibility Our
Page 65 and 66: Clockwise from above: We have spons
Page 67 and 68: Christopher Clark Independent Chair
Page 69 and 70: When joining the Board, Directors a
Page 71 and 72: OAO Severstal and subsidiaries Cons
Page 73 and 74: Independent Auditors’ Report Boar
Page 79 and 80: OAO Severstal and subsidiaries Note
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OAO Severstal and subsidiaries Note
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Shareholder information and financi
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Annual Report 2007 - Severstal

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