In construction and railway product markets in Russia.
The largest coking coal producer in Russia.
In production of rails and large diameter pipes in North America.
This annual report ("the Report") presents the results for EVRAZ plc and its subsidiaries for 2020 divided into segments: Steel; Steel, North America; and Coal. It details the Group's operational and financial results and corporate social responsibility activities in 2020.
The Report has been prepared in accordance with the disclosure requirements of the United Kingdom and the Financial Conduct Authority:
the Companies Act 2006, the Listing Rules, the Disclosure Guidance and Transparency Rules, and the Competition and Market Authority. The Report has also been prepared taking into account the International Integrated Reporting Framework,
and sustainability reporting best practices.
→ Meet EVRAZ
→ EVRAZ in figures
→ Strategic report
Chief executive officer's letter
EVRAZ' business model
EVRAZ business system
Key performance indicators
Impact of COVID-19
Corporate Social Responsibility
Principal risks and uncertainties
Statement in accordance with S172 of the Companies Act
→ Corporate governance
Board of Directors
Corporate governance report
Audit Committee report
Nominations Committee report
Health, Safety and Environment Committee
Directors responsibility statement
London Office •
• Moscow Office
→ Steel segment
→ Steel, North America segment
→ Coal segment
→ Financial statements
Independent Auditors report to members of EVRAZ plc
Consolidated financial statements
Separate financial statements
→ Additional information
Stock performance indicators and shareholder information
Definitions of selected alternative performance measures
Data on mineral reserves
Short summary of relevant anti-corruption policies
Terms and abbreviations
Annual report & accounts 2020
2 | 3
EVRAZ in figures
EVRAZ IN FIGURES
Consolidated revenues by segment, US$ million
Consolidated EBITDA by segment, US$ million
Read more on page 32→
Read more on page 32→
↓ 3% year-on-year
↓ 14% year-on-year
↑ 2.4x year-on-year
2. Including payments on deferred terms recognised
in financing activities.
Crude steel output, kt
Steel products output1, kt
Iron ore products output, kt
Raw coking coal production, kt
Coking coal concentrate production, kt
Gross vanadium slag production,3 mtV
Net of re-rolled volumes.
Production by Coal segment
3. In tonnes of pure vanadium.
Production by Steel segment
LTIFR (excluding fatalities), per million hours Key air emissions, ktEVRAZ GHG emissions, MtCO2eFresh water consumption, million m3
Read more on page 58→
Read more on page 60→
Read more on page 64→
Read more on page 62→
Diversity, % (number of people)
Read more on page 69→
Employees by region
Russia and CIS 95%
North America 4%
Read more on page 69→
Geographic dispersion of institutional shareholders, % of voting rights
Ultimate beneficial owners, % of voting rights4
Europe (excl. UK, Russia)
4. The number of shares per dealing notification dated 20 June 2019.
The number of shares is as per TR-1 Form: Notification of major interest in shares dated 6 February 2013. For Mr Kozovoy, includes shares held directly.
Annual report & accounts 2020
4 | 5
EVRAZ in figures
of the COVID-19 pandemic
Despite the unpredictable challenges
diligently implemented new workplace
in 2020, EVRAZ's response was
for a Better Future
robust. The Group's employees
on the health and wellbeing
safety measures while also focusing
of the broader communities in which they
and their families live and work. Thanks
to the dedication and commitment of its
people, EVRAZ maintained operational
continuity and made further progress
on its environmental agenda despite
the unique challenges of 2020.
Health and safety
the work of the EVRAZ crisis management
climate risks, applying best environmental
centre and senior executives to mitigate
practices and working to meet stakeholder
The EVRAZ Board of Directors remains
the operational, commercial and financial
committed to its long-term goal
impact on the Group. Thanks to the safety
of achieving zero injuries and fatalities
measures that EVRAZ enacted to protect its
For more about the Group's environmental
in the workplace. While the Group's
people and ensure operational continuity,
performance, see sections Environmental
health and safety efforts led to significant
the COVID-19 pandemic has had a relatively
management and GHG emissions on pages 60-65→
improvements in this area, there were still
limited impact on the Group's business.
five tragic employee fatalities in 2020,
Throughout the year, the Board strove
which is five too many. As part of its
The Board also understands that
to better understand the potential longer-
efforts to improve the safety culture,
the unprecedented measures undertaken
term climate-related risks and opportunities
EVRAZ focused on a new approach
to prevent the spread of COVID-19
facing EVRAZ. The first step was
to engage employees in the process
and the mental impact this may have
to conduct a qualitative analysis of three
of identifying and mitigating risks. This
on many people in these trying times
climate scenarios envisaging global
and other initiatives helped to bring
requires careful attention to the possible
average temperature increases of ~1.5°C,
the lost-time injury frequency rate -
health repercussions of the pandemic.
~2.0°C and ~4.5°C by the year 2100. This
a key health and safety metric - down
analysis drew on insight into the global
to 1.58, which is a sign of considerable
For more about the support given to employees
physical climate impacts under various
progress in the Group's overriding priority
during this time, see section Impact of COVID-19
climate scenarios developed by the UN's
of safeguarding its people. In addition,
on pages 30-31→
Intergovernmental Panel on Climate
EVRAZ spared no effort in its COVID-
Change, as well as Shared Socioeconomic
19 response to provide safe working
Pathways, which provide outlooks
conditions for employees while also
for socioeconomic factors corresponding
supporting local hospitals and communities.
In 2020, the Board of Directors approved
to the different climate scenarios. The Group
the Group's new Environmental Strategy,
used this research to prepare its first
From the outbreak of the pandemic,
which serves as a roadmap for improving
Climate Change Report, which serves
the Board of Directors closely monitored
environmental performance by assessing
Annual report & accounts 2020
EVRAZ in figures
as a foundation to continue improving climate risk management at EVRAZ.
The Climate Change Report was prepared following the recommendations of the Task Force on Climate-related Financial Disclosures and outlines the principles underpinning the approach that
EVRAZ takes to climate change while providing greater insight for stakeholders on the Group's mitigation actions.
The initial findings are summarised in this report and the Group intends to update the Climate Change Report periodically.
on ensuring that all aspects of the business are conducted in the best interests
independent non-executive directors have been recruited in recent years to enhance the depth and breadth of the Board's experience. In 2020, the Nominations Committee began searching for suitable candidates to replace those independent non-executive directors who will have served terms of nine years and will be required
to stand down at the Annual General Meetings in 2021 and 2022.
Having both served nine years
as non-executive directors, and in line with the UK Corporate Governance Code's recommendations on director independence, neither Sir Michael Peat nor Karl Gruber will seek re-election at the forthcoming Annual General Meeting.
In 2020, the Board engaged in an externally facilitated annual evaluation of its conduct, after having undertaken internally evaluated reviews in 2018 and 2019.
The Nominations Committee initiated and took part in the review, during which
EVRAZ uses an annual, organisation- wide employee survey as a guide
for aligning the Group's culture with its purpose and values, as described
on pages 72-73 of the Strategic Report. The Board receives a summary of this survey for review and closely follows
the implementation of management efforts undertaken as a result of the survey.
In 2020, the Board approved two interim dividend payments: US$0.40 per ordinary share, totalling US$581 million, on 27 March 2020; and US$0.20 per share, totalling US$291 million, on 2 October 2020. Prior to each distribution, the Board ensured that the level of distributable reserves within the balance sheet was sufficient
to enable the dividend to be paid, in line with the established EVRAZ dividend policy. The Board also considered the impact
of COVID-19 on the Group's going concern and cash flow position.
2020 was an unprecedented year, which changed the world and the way we do business. Intense global uncertainty caused by the outbreak of COVID-19 had a profound effect on economies
and pressured global markets. The restrictive measures imposed by the governments
of various countries to fight against
the COVID-19 pandemic had a significant impact on the level of consumption of steel products around the world, especially
in the first half of the year. However, thanks to the upswing seen on the global markets in the second half of the year, the Group delivered solid operating and financial results while, most importantly, doing everything it could to protect its people during a pandemic.
Chief Executive Offcer
of the Group, its shareholders and other stakeholders, with particular attention being paid to generating long-term shareholder value.
The Board held its meetings via video conferencing to minimise the disruptions to its business amid the pandemic.
The Board received regular updates from management about the impact of COVID-19, as well as the mitigation measures implemented to safeguard people and operations.
While most directors have been serving on the Board since EVRAZ plc's incorporation in October 2011, new
all Board directors received questionnaires for response and comment. The review found the Board's performance in all key areas to be satisfactory.
EVRAZ recognises that its operations can only improve alongside the skills
and qualifications of an engaged workforce. To this end, the Group continued to improve existing professional development programmes and launched several new initiatives in 2020.
See pages68-73 for more details →
In recognition of the solid performance that EVRAZ delivered in 2020, the Group has announced an interim dividend.
On 24 February 2021, the Board of Directors voted to disburse a total of US$437.1 million, or US$0.30 per share, with a record date of 12 March 2021 and payment date
of 7 April 2021.
Management's primary focus was on ensuring safe working conditions and preventing the spread of COVID-
19. EVRAZ went beyond protecting its employees and worked to safeguard local communities.
For more about the Group's COVID-19 response, as well as the effects of the pandemic on EVRAZ, see Impact of COVID-19 on pages30-31.→
The overriding priority of EVRAZ
is the health and safety of its people. Unfortunately, five people lost their lives at the Group's enterprises during the reporting period. The lost time injury frequency rate (LTIFR) reached 1.58, the lowest level for EVRAZ historically and below the target of 1.61 that management set for 2020.
In 2020, the primary focus in the area of health and safety was the roll-out
of a project to enhance risk management across all divisions. After thoroughly reviewing and further developing existing
processes, the Group began training employees to use a new set of tools for identifying and managing risks.
As a result of the COVID-19 pandemic, all training courses have been conducted online since the second quarter of 2020.
Other key aspects of the project include the Risk Hunting initiative and a review of standard operating procedures.
In 2020, EVRAZ worked hard to create a new environmental strategy with environmental impact mitigation goals to be achieved
by 2030. At the Group's steelmaking assets, the goals include reducing greenhouse gas emissions (Scope 1 and 2) per tonne of steel produced by 20%, reducing atmospheric emissions from steel production by 33%, closing the water supply cycle, as well
as recycling 95% of general and metallurgical waste. At the mining assets, they include recycling 50% of mining waste and utilising 75% of the methane released in the process of degassing.
During the reporting period, EVRAZ continued to implement measures aimed
at improving its environmental impact. Among the most important projects of 2020 were construction of a dust and gas cleaning unit for blast furnace no. 6 at EVRAZ NTMK, modernisation of gas cleaning units of the basic oxygen furnace shop at EVRAZ NTMK, modernisation of electrostatic precipitators of Heat and Power Station
at EVRAZ ZSMK and the direction of coke oven gas to the coking chemicals collecting shop no. 3 at EVRAZ NTMK. In 2020,
the Group's specific greenhouse gas intensity ratio remained below 2.0 tonnes of carbon dioxide equivalent (tCO2e) per
tonne of crude steel.
For more about the Group's new environmental strategy, see pages14-15, 60. →
In 2020, EVRAZ management team actively focused on developing the Group's climate change approach at the request of the Board of Directors and its Health, Safety and Environmental Committee.
In March-June, EVRAZ held several sessions with senior management, which included a detailed discussion on climate change. By the end of June, the Group
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