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    EVR   GB00B71N6K86

EVRAZ PLC

(EVR)
  Report
Delayed Quote. Delayed London Stock Exchange - 12/03 11:35:26 am
585.8 GBX   -0.75%
12/01EVRAZ Appoints Elena Samsonova as Vice President, Human Resources
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EVRAZ : Annual report 2020

10/21/2021 | 04:05am EST

For a Better Future

Annual report & accounts 2020

Annual report & accounts 2020

MEET EVRAZ

For our

For our

For our

PARTNERS

PEOPLE

COMMUNITY

14

69,619

US$ 31

million tonnes

employees

million

steel products sales

as of 31 December 2020

Social and social infrastructure

maintenance expenses

LEADER

  • 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.

Report boundaries

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.

CONTENTS

Meet EVRAZ

EVRAZ in figures

Strategic report

4

Chairman's introduction

5

Chief executive officer's letter

7

EVRAZ' business model

10

Operational model

12

Sustainable development

14

EVRAZ business system

16

Market review

20

Strategic priorities

24

Key performance indicators

28

Impact of COVID-19

30

Financial review

32

Business review

44

Corporate Social Responsibility

56

Customer-centric R&D

84

Digital transformation

88

Principal risks and uncertainties

90

Viability statement

96

Statement in accordance with S172 of the Companies Act

97

Non-financial reporting

98

Corporate governance

100

Board of Directors

101

Management

104

Corporate governance report

106

Stakeholder Engagement

116

Audit Committee report

118

Nominations Committee report

124

Health, Safety and Environment Committee

126

Remuneration report

128

Directors report

140

Directors responsibility statement

145

Global footprint

Canada

London Office

Moscow Office

Russia

Czech

Kazakhstan

Switzerland

Steel segment

Republic

Steel, North America segment

USA

Coal segment

Financial statements

146

Independent Auditors report to members of EVRAZ plc

147

Consolidated financial statements

158

Separate financial statements

236

Additional information

250

Stock performance indicators and shareholder information

251

Definitions of selected alternative performance measures

253

Data on mineral reserves

256

Short summary of relevant anti-corruption policies

257

Terms and abbreviations

258

Contact details

262

Annual report & accounts 2020

2 | 3

Meet EVRAZ

EVRAZ in figures

Strategic report

Corporate governance

Financial statements

Additional information

EVRAZ IN FIGURES

FINANCIAL HIGHLIGHTS

Consolidated revenues by segment, US$ million

Consolidated EBITDA by segment, US$ million

8,879

8,143

6,969

2,337

2,021

1,490

2,583

2,500

1,779

472

483

410

(1,435)

(1,242)

(894)

12,836

11,905

9,754

2,672

1,795

1,930

1,218

843

400

14

38

(28)

17

18

15

(145)

(93)

(105)

3,777

2,601

2,212

Steel

Coal

Steel, NA

Other

Eliminations

Total

Steel

Coal

Steel, NA

Other

Eliminations

Total

operations

operations

and unallocated

subsidiaries

2018

2019

2020

2018

2019

2020

Read more on page 32

Read more on page 32

Net debt

CAPEX2

Net profit

US$

US$

US$

3,356

657

858

million

million

million

↓ 3% year-on-year

↓ 14% year-on-year

↑ 2.4x year-on-year

2. Including payments on deferred terms recognised

in financing activities.

OPERATING HIGHLIGHTS

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

2020

13,630

2020

12,768

2020

14,205

2020

20,653

13,598

1,930

15,528

2020

19,533

2020

2019

13,814

2019

13,230

2019

13,765

2019

26,140

13,975

1,947

2019

18,380

2019

15,923

2018

13,019

2018

12,376

2018

13,515

2018

24,188

2018

14,130

2,057

16,188

2018

17,052

1.

Net of re-rolled volumes.

Production by Coal segment

3. In tonnes of pure vanadium.

Production by Steel segment

CSR HIGHLIGHTS

LTIFR (excluding fatalities), per million hours Key air emissions, ktEVRAZ GHG emissions, MtCO2eFresh water consumption, million m3

2020

1.58

2020

121.30

2020

43.57

2020

206.20

2019

2.04

2019

127.69

2019

43.35

2019

205.32

2018

1.91

2018

128.24

2018

38.79

2018

226.49

Read more on page 58

Read more on page 60

Read more on page 64

Read more on page 62

Diversity, % (number of people)

2

104

18,951

22%

26%

27%

78%

74%

73%

7

298

50,266

Board

Senior

Employees

Management

Men

Women

Read more on page 69

Employees by region

Russia and CIS 95%

North America 4%

Europe 1%

Read more on page 69

SHAREHOLDER STRUCTURE

Geographic dispersion of institutional shareholders, % of voting rights

Ultimate beneficial owners, % of voting rights4

United Kingdom

Russia

9.50%

2.22%

28.68

19.35

9.66

5.75

33.80

Europe (excl. UK, Russia)

North America

6.35%

Roman Abramovich4

Alexander Abramov4

Alexander Frolov4

Gennady Kozovoy5

Free-float

10.87%

Asia&Pacific

Other

4. The number of shares per dealing notification dated 20 June 2019.

1.72%

1.15%

5.

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.

STRATEGIC

Annual report & accounts 2020

4 | 5

Meet EVRAZ

EVRAZ in figures

Strategic report

Corporate governance

Financial statements

Additional information

REPORT CHAIRMAN'S

INTRODUCTION

Sustainable

of the COVID-19 pandemic

foundation

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.

Alexander Abramov

Non-Executive Chairman

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

expectations.

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-

Environment

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

6

| 7

Meet EVRAZ

EVRAZ in figures

Strategic report

Corporate governance

Financial statements

Additional information

CEO LETTER

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.

Discover more in the Climate Change Report:

https://www.evraz.com/en/sustainability/ data-center/climate-change-reports/

Governance

The EVRAZ Board of Directors

and management team are focused

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.

Dividends

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.

Dear shareholder,

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.

Alexander Frolov

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.

Our people

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 pages 68-73 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.

Alexander Abramov

Non-Executive Chairman

Sustainability

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 pages 30-31.

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 pages 14-15, 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

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Evraz plc published this content on 21 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 October 2021 08:03:11 UTC.


© Publicnow 2021
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Net income 2021 3 144 M - -
Net Debt 2021 2 507 M - -
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Yield 2021 26,7%
Capitalization 8 545 M 11 298 M -
EV / Sales 2021 0,81x
EV / Sales 2022 0,88x
Nbr of Employees 69 619
Free-Float 29,5%
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