Annual Report 2011 - Magnitogorsk Iron & Steel Works ...

2011 /
ANNUAL REPORT
About Us Sales Markets
Finances
Risks
Social Sphere
Management
Information
Financial review
MMK Group Financial performance
12,000
10,000
8,000
6,000
4,000
2,000
0
Revenue, USD million
Last year the global economy continued its gradual recovery from the recession of 2008–2009.
Thanks to increased demand for durable goods and rising capital investments, demand for steel from
key consuming industries (construction, machine building, automotive, etc.) rose. Implementation of
infrastructure projects initiated during the recession also helped to support demand.
We expect that the global economy will continue growing in 2012, which will have a positive effect on
steel demand. As a result, we believe that the Company’s revenue may approach pre-crisis levels.
Analysis of y-o-y Change in MMK Group Revenue, USD million
10,000
8,000
6,000
4,000
2,000
0
7,719
8,197
2010
Revenue
10,550
2007 2008 2009 2010 2011
251
Change
in sales
volumes
5,081
1,229
Change
in product
prices
7,719
107
Other
factors
9,306
9,306
2011
Revenue
In 2011 revenue from sales stood at USD 9,306 million (up 21 % from 2010). Revenue rose mainly due to
higher sales volumes and prices.
2011 Revenue Structure by Product Type
Revenue Structure by Segment, USD million
Segment 2010 2011 Change Change, %
Steel segment (Russia) 7,425 8,736 1,311 18 %
Steel segment (Turkey) 137 417 280 204 %
Coal segment 157 153 (4) –3 %
Total 7,719 9,306 1,587 21 %
The Russian steel segment accounts for the majority of MMK Group’s revenue (94 %). Significant
progress on ramping up production in Turkey helped revenue from the Turkish steel segment increase
by over 200 %, with the segment’s share of Group revenue reaching 4 %. The coal segment accounts for
just around 2 % of Group revenue due to the fact that the majority of this segment’s output is consumed
within the Group.
34 35
5%
11%
3%
9%
12%
60%
Flat products
Long products
Coated products
Metalware
Cold-formed products
Others