Alexander Shevelev explained why Severstal is growing faster than the market

According to the newspaper, over the year the capitalization of Severstal has more than doubled. Therefore, the first question is whether metallurgists expect further growth.

Alexander Shevelev:

– It is obvious that the growth of shares largely depends on the situation on the world market. We see how the world prices for steel and ore have grown – and this has pulled the capitalization of metallurgical companies up. But our key goal is to lead in total return for shareholders relative to competitors with whom we play on the same field. The rise in steel prices cannot continue indefinitely. There is a famous saying by Oscar Wilde: “You cannot change the direction of the wind, but you can always raise the sails to reach your goal.” For us, this sail is our strategy.

Severstal is fundamentally a very attractive company for institutional and retail investors. We have a clear strategy that allows us to increase EBITDA annually regardless of market factors. We set a goal to grow EBITDA by 10-15% annually excluding macro factors – and we are achieving it. Our dividend yield has consistently exceeded 10%. We have a comfortable debt burden and have a number of levers to increase the company’s value. This is a growth strategy through volumes, a strategy to increase internal efficiency and a focus on revenue growth by changing the share of high-margin products and moving into new niches. These factors allow us to grow above the market. At the same time, I am sure that our strategy has potential. Over the past three years, we have earned $ 880 million of additional EBITDA due to it. In the next three years, we plan to earn another $ 1.2 billion.

Another promising area is focused work with retail investors: this is both communications and special channels of communication with them. We see that retail investors have an interest in our company’s shares. The recent GameStop story, when retail investors broke up shares in the company, showed their strength to the stock market. This should be borne in mind and should not be underestimated.

As specified “Vedomosti”, This year steel prices on the world market reached their maximum in 12 years. Russian builders complain about the rise in prices for metal products. Since 2020, the government has been trying to stabilize prices in various ways. And a few days ago, First Deputy Prime Minister Andrei Belousov threatened metallurgists with a tax withdrawal of 100 billion rubles. super profits received, in his opinion, in 2020. The next day, June 1, a special meeting was held in the Ministry of Industry and Trade, after which the Ministry confirmed that, together with the heads of metallurgical companies, they would agree on discounts on metal products required for government orders.