Investor day 2016

Investor Day
New York, 21 March 2016
London, 23 March 2016
Disclaimer
The information contained herein has been prepared for the use in this Presentation (the “Presentation”) and has not been independently verified. Such information is confidential
and is being provided to you solely for your information and may not be reproduced, retransmitted, further distributed to any other person or published, in whole or in part, for any
purpose.
The opinions presented herein are based on general information gathered at the time of writing and are subject to change without notice. Certain industry, market and competitive
position data contained in this Prospectus come from official or third party sources believed to be reliable but ALROSA does not guarantee its accuracy or completeness.
This Presentation contains statements about future events and expectations that are forward-looking statements. Any statement in this Presentation that is not a statement of
historical fact is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause the ALROSA’s actual results, performance
or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Past performance
should not be taken as an indication or guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance. ALROSA
assumes no obligation to update, supplement or revise forward-looking or any other statements contained herein to reflect actual results, changes in assumptions or changes in
factors affecting these statements. ALROSA does not intend or have any duty or obligation to update or to keep current any information contained in this Presentation.
The diamond resources and reserves estimates provided in this Presentation have been prepared and presented in accordance with the standards and classifications of the
JORC Code (the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves as promulgated by the Australasian Joint Ore Reserves
Committee), which differ in significant respects from the standards and classifications applicable to the disclosure of mineral resources and reserves under the laws and
regulations of certain other jurisdictions, including the regulations of the U.S. Securities Exchange Commission (the “SEC”) with respect to registration statements and other
documents filed with the SEC. Among other things, in accordance with the JORC Code, this Presentation provides certain mineral resources estimates classified as “inferred”,
“indicated” or “measured”, which differ in significant respects from “probable” and “proven” mineral reserves estimates and are not disclosed in certain jurisdictions, including in
SEC filings. There can be significant uncertainty as to whether mineral resources can ever be feasibly and commercially mined. For further explanation of the JORC Code, see
the JORC website at www.jorc.org.
This Presentation does not constitute an offer to sell, or any solicitation of any offer to subscribe for or purchase, any securities. No part of this Presentation, nor the fact of its
distribution, should form any basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever.
The information in this Presentation is subject to verification, completion and change. No representation or warranty or undertaking, express or implied, is made as to, and no
reliance should be placed on, the accuracy or completeness of the information or opinions contained in this Presentation. None of ALROSA nor any of its shareholders, directors,
officers or employees, affiliates, advisors, representatives nor any other person accepts any liability whatsoever for any loss howsoever arising from any use of this Presentation
or its contents or otherwise arising in connection therewith.
This Presentation is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other
jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such
jurisdiction.
This Presentation is not for distribution, directly or indirectly, to the public in the United States (including its territories and possessions, any State of the United States and the
District of Columbia). These materials are not an offer or solicitation to purchase or subscribe for securities in the United States or any other jurisdiction. Securities may not be
offered or sold in the United States absent registration with the U.S. Securities and Exchange Commission or an exemption from registration under the U.S. Securities Act of
1933, as amended. ALROSA does not intend to register any part of any offering in the United States or to conduct a public offering of any of its securities in the United States.
By attending a meeting where this Presentation is made or reviewing this Presentation you acknowledge and agree to be bound by the foregoing.
2
Presenting team
Andrey Zharkov
Igor Sobolev
CEO
First Vice-President –
Chief Operating Officer
Igor Kulichik
Andrey Rodionov
CFO, Vice President
Advisor to CEO
3
Contents
1
ALROSA Today and Tomorrow
5
2
Production Overview
16
3
Financial Overview
24
4
ALROSA
Today and Tomorrow
5
ALROSA Today and Tomorrow
ALROSA is a global leader in rough diamond production with a strong financial profile
Financial summary
Revenue, RUB bn
EBITDA margin, %
• ALROSA is a public diamond mining company with 23%
free-float on the Moscow Exchange
1.9x
• ALROSA’ production totalled 38.3 mln cts in 2015
revenue growth to RUB 225 bn, 25% y-o-y EBITDA
growth to RUB 118 bn and EBITDA margin of 53%
• Robust free cash flow generation of RUB 41 bn and
Free Cash Flow
1.9x
1.7x
225
representing 29% in global diamond output
• Strong financial performance resulting in 8% y-o-y
EBITDA, RUB bn
Net debt/EBITDA
207
200
53%
169
150
118
45%
100
strong balance sheet with leverage reduction to 1.7x
94
41%
69
42
50
41
17
0
2013
ALROSA’s shareholder structure
2014
2015
Global diamond production
44% The Russian Federation
29% ALROSA
25% The Republic of Sakha
26% De Beers
(Yakutia)
129
mln cts
8% Yakutian municipal districts
11% Rio Tinto
23% Free float
34% Others
6
ALROSA Today and Tomorrow
In 2015, global luxury goods market continued to grow, albeit at a slower rate, due to lower
demand in Asia-Pacific
Global luxury goods market by main regions
$ bn
272
5%
20%
6%
9%
288
4%
5%
5%
21%
3%
8%
9%
302
World
5%
2%
5%
Other
21%
(6%)
19%
Asia-Pacific
8%
9%
9%
Japan
31%
North and South
America
35%
Europe
7%
9%
(8%)
31%
7%
31%
4%
34%
6%
35%
2%
2012
1-2%
298
2013
32%
34%
2014
0%
5%
2015
7
ALROSA Today and Tomorrow
Jewelry segment followed luxury goods market dynamics, slowing down after solid growth in
2013-2014
Global luxury goods market by main segments
$ bn
272
4%
20%
24%
6%
4%
8%
7%
26%
4%
298
4%
0%
4%
20%
2%
288
24%
2%
25%
2%
3%
27%
2012
6%
27%
2013
8%
1-2%
302
1%
4%
Other
20%
Beauty
23%
Jewelry and watches
25%
Apparel
28%
Accessories
20%
1%
24%
0%
25%
2%
28%
3%
2014
World
2015
8
ALROSA Today and Tomorrow
In 2015, polished diamond sales from accumulated inventory surplus amounted to $2.6 bn, reducing
excess inventories to a minimum level
Inventories in polishing segment
$ bn
19.4
17.8
17.7
18.6
3.1
0.7
1.8
13.2
14.7
17.0
16.8
16.7
2010
2011
2012
2013
2014
16.3
3.1
14.2
2.7
0.1
Technological inventories
14.1
2015
Accumulated inventory excess
Sales of India-produced polished diamonds
$ bn
2.6
20.6
Polished diamond sales from
inventories
Polished diamond export from India
in 2015
18.0
13.5
Rough diamond import to India in
2015
Rough diamond polishing
Source: Gem Jewellery Export Promotion Council, Company estimation
9
ALROSA Today and Tomorrow
Declining demand for rough diamonds in 2015 impacted diamond prices and sales volumes
ALROSA rough diamond price index under long-term agreements and sales on spot
+46%
+7%
(20%)
0%
(15%)
+21%
2010
2011
2012
2013
2014
2015
ALROSA rough diamond sales and production
mln cts
2010
2011
2012
2013
2014
2015
Sales
39.4
32.9
33.2
38.0
39.6
30.0
Production
34.3
34.6
34.4
36.9
36.2
38.3
5.1
(1.7)
(1.2)
1.1
3.4
(8.3)
Sales above/(below) production from
inventories
10
ALROSA Today and Tomorrow
Demand for diamond jewelry is expected to grow at ~2-4% annually in 2016-2025
Global diamond jewelry sales dynamics forecast
y-o-y, CAGR
2-7%
2013
0%
2014
2015
~2-4%
2016
2017
Luxury goods sales in 2015,
breakdown by region
Other countries
5%
Japan
9%
Europe
35%
2018
2019
2020
2021
2022
2023
2024
2025
Major assumptions of global diamond jewelry
demand forecast
The Americas
31%
Asia-Pacific Region
19%
USA
moderate growth of 3-4% annually
Asia
4-6% annual growth with volatility in short-term
Europe
conservative growth of 1% annually
Japan
growth of less than 1% annually
11
ALROSA Today and Tomorrow
Despite production increases announced by mining companies in the recent years global
rough diamond production has remained relatively flat
Global rough diamond production historical data
mln cts
176
169 mln cts
168
163
128
120
2006
2007
2008
2009
2010
123
128
2011
2012
130
129
125
126 mln cts
2013
2014
2015
Global diamond production (based in Companies’ plans and life of mines periods)
mln cts, y-o-y CAGR
~2%
156
129
2015
2016
Existing mines
2017
2018
2019
2020
2021
2022
2023
2024
2025
New mines
12
ALROSA Today and Tomorrow
Rough diamonds market is expected to be balanced in the mid-term; demand is expected to
exceed supply after 2019
Major diamond mining companies accumulated inventories in 2015, which may become an additional source of
supply for the diamond market in the mid-term
Demand-supply imbalance is expected after 2019
Global demand and supply imbalance
$ bn
Imbalance emerge
The market is balanced
20
Rough diamonds demand: 0-2% annually
Rough diamonds demand: 2-4% annually
Rough diamonds demand
Rough diamonds deliveries to
the market in the amount of
production
15
Rough diamonds deliveries to
the market including sales from
inventories
Rough diamonds deliveries to the market: 0-2%
annually
Rough diamonds sales from
inventories
Rough diamonds deliveries to the market: 1-2%
annually
10
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
13
13
ALROSA Today and Tomorrow
While 2015 ALROSA’s diamond sales in 2015 decreased by 30%, in line with diamond
market, preliminary sales results for January-February 2016 point to a market rebound
ALROSA rough diamond sales
$ mln
+25%
4,901
4,793
3,437
1,021
776
701
620
568
527
2013
2014
January February
2015
March 2015
Q2 2015
Q3 2015
Q4 2015
2015
January February
2016
14
ALROSA Today and Tomorrow
Strategic directions for development
Focus on diamond mining
Operational efficiency
ALROSA
IS
ABOUT
Geological exploration
Marketing and brand
Non-core assets divestment
15
Production Overview
16
Production Overview
ALROSA’ diamond production is well-diversified among divisions and types of mining
Geography of ALROSA’ production assets
32%
Aikhal Division
20%
Nyurba Division
12.3
Aikhal pipe
Jubilee pipe
mln cts
Komsomolskaya pipe
Nyurbinskaya pipe
Botuobinskaya pipe
Alluvial deposits (1)
18%
Arkhangelsk
region
Republic of Sakha
(Yakutia)
11%
ALROSA Total
55%
25%
Share of underground mining
from 4 mines in 2015 production
21%
Share of alluvial mining
from 16 alluvial placers in 2015 production
3.3
Total resources,
incl. reserves
608 mln cts
Total reserves
Source: Company data, JORC as of 01 July 2013 (Micon)
Note: percentage and absolute figures indicate the share of division in 2015 ALROSA diamond production
5%
mln cts
Nizhne-Lenskoe
Alluvial deposits (3)
973 mln cts
4.3
mln cts
Almazy Anabara
Alluvial deposits (7)
5%
6.9
mln cts
Udachny Division
Udachny pipe
Zarnitsa pipe
Alluvial deposits (2)
9%
Share of open-pit mining
from 7 mines in 2015 production
Mirny Division
Mir pipe
International pipe
Alluvial deposits (3)
Russian Federation
7.5
mln cts
2.0
mln cts
Severalmaz
Arkhangelskaya pipe 2.0
Karpinskogo-1 pipe mln cts
17
Production Overview
ALROSA intends to increase diamond production to over 41 mln cts by 2019
Severalmaz and Udachny are the key production growth drivers
ALROSA production forecast
mln cts
1.03
1.05
1.00
0.97
0.94
0.91
0.90
Grade (ct/t)
CAGR 15–21F
38.3
2.0
3.9
32.4
2015
39.0
2.0
3.3
33.7
2016F
Severalmaz
Udachny pipe
39.9
39.9
2.4
3.2
5.5
4.6
41.5
41.2
41.3
4.3
4.6
5.1
17%
5.5
5.7
5%
30.4
(1%)
5.4
32.0
32.1
31.7
31.0
2017F
2018F
2019F
2020F
1%
2021F
Others *
Source: Company data
* others include Mirny division, Nyurba division, Aikhal division, Almazy Anabara, Nizhne-Lenskoye and Udachny division excluding Udachny pipe production
18
Production Overview
In 2015, ALROSA continued to develop its core growth projects
Udachny underground mine
Severalmaz
On June 27, 2014 ALROSA started to mine ore from
Udachny underground mine
On March 14, 2014 processing plant with annual capacity
of 3 mln tons of ore was put into operation, having increased
total capacity up to 4 mln tons of ore a year
2014
2015
target
capacity
Ore processed, mln t
0.1
0.3
4.0
Diamond production, mln cts
0.1
0.4
5.4
2014
2015
target
capacity
Ore processed, mln t
3.3
4.0
4.0
Diamond production, mln cts
1.6
2.0
4.3
19
Production Overview
Economic efficiency of Udachny underground mine will be fostered
by block caving mining method
Traditional cut-and-fill mining
Mir underground
mine
International
underground mine
Aikhal underground
mine
Block caving method
Udachny underground mine
Production level
Backfilled production level
Next production level
Next production
level
20
Production Overview
ALROSA’s operational results in 2015 are in line with its long-term strategy
21
Diamond production
+6%
2015
38.3 mln cts
2014
37.1 mln t
1.03 cpt
36.2 mln cts
35.9 mln t
1.01 cpt
Diamonds produced (mln cts)
Ore and gravels processed (mln t)
Grade (cpt)
8.0
7.9
9.7
10.6
8.4
9.6
11.6
8.6
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Q1 2015
Q2 2015
Q3 2015
Q4 2015
5.4
10.3
13.0
7.3
5.5
10.8
13.5
7.4
1.47
0.78
0.75
1.45
1.52
0.89
0.86
1.17
2015 diamond production totalled 38.3 million carats, an increase of 6% y-o-y
Production results were driven by the following factors:
-
launch of Botuobinskaya pipe,
-
growth in diamond production at the Mir underground mine as a result of measures to stabilize its hydrogeological conditions,
diamond output growth at Karpinskogo-1 pipe of Lomonosov deposit (Severalmaz),
the Udachny underground mine development
21
Production Overview
ALROSA continues to streamline its operations to focus on diamond mining
Number of subsidiaries
70
39
34
25
01.01.2009
01.01.2015
Prior to 2015, ALROSA sold 31 non-core
assets with total proceedes of more than
RUB 7 bn, incl.:
• Timir iron ore project
• Irelyakhneft oil project
• ALROSA Insurance
Company
01.01.2016
In 2015, ALROSA sold 5 non-core
assets with total proceeds of
RUB 0.3 bn , incl.:
•
•
•
•
•
ALROSA-VGS
MAK-Bank
Nikonovka
M&Diamond
Suntarceolit
20
01.01.2017
01.01.2020
In 2016, ALROSA is planning to sell
9 non-core assets, incl.:
• Viluiskaya-3 HPP
• HIDROCHICAPA
• Arcos Ltd.
22
Production Overview
ALROSA continues optimization and increase in efficiency of selected non-core businesses
Restructuring of airline operations
1
2
3
Reduction of losses by ~RUB300 mln as a result of transferring of 6 airports to federal
ownership
Restructuring of kindergarten education centres
Subsidies ~RUB450 mln
Restructuring of housing services and utilities
Subsidies from Yakutian budget for housing and utilities, agriculture
RUB mln
1,728
1,741
1,854
2014
2015
2016
23
Financial Overview
24
Financial Overview
Financial results
RUB mln
2015
2014
2015
vs.
2014
38.3
30.0
19.7
10.3
36.2
39.6
27.7
11.9
6%
(24%)
(29%)
(13%)
224,524
(93,240)
118,498
53%
32,192
14%
4.17
207,159
(99,334)
93,857
45%
(16,832)
(2.44)
8%
(6%)
26%
-
20,503
223,159
202,656
1.7х
151,742
21,693
197,160
175,467
1.9х
137,051
(5%)
13%
15%
11%
119,980
(10,345)
(34,094)
75,541
(34,241)
41,300
27%
94,840
(12,379)
(4,346)
78,115
(36,056)
42,059
22%
27%
(16%)
7.8x
(3%)
(5%)
(2%)
-
Operating performance
Production, mln cts
Sales, mln cts, incl.:
gem quality diamonds sales, mln cts
industrial quality diamonds sales, mln cts
IFRS income statement of profit or loss and other comprehensive income
Revenue
Cost of sales
EBITDA
EBITDA margin
Net profit / (loss)
Net profit margin
EPS, RUB
IFRS statement of financial position
Cash and cash equivalents
Total debt
Net debt
Net debt / EBITDA
Equity attributable to owners of PJSC ALROSA
IFRS statement of cash flows
Cash inflow from operating activities before changes in working capital
Income tax paid
Changes in working capital
Net cash inflow from operating activities
Purchase of property, plant and equipment
Free cash flow
ROIC
25
Financial Overview
ALROSA’s financial results are impacted by foreign exchange rates fluctuations
Sensitivity analysis
RUB mln
Revenue
-10 RUB/USD
2015
+10 RUB/USD
191,716
224,524
257,332
(14.61%)
Cost of sales
(90,330)
88,601
(93,240)
(96,150)
(33,794)
20%
are driven by USD
70%
linked to USD
<10%
USD-denominated
+3.12%
118,498
148,395
(25.23%)
Capital expenditures
received in USD
+14.61%
(3.12%)
EBITDA
90%
as diamond prices are set in USD
as MET is calculated on USD diamond prices
+25.23%
(34,241)
(34,688)
(1.30%)
+1.30%
Exchange rate
RUB/USD
72%
30%
(4%)
average 76.61
min
70.15
max
83.59
average 61.32
min
49.18
max
72.88
average 38.60
min
32.66
max
67.79
72.88
70.15
56.26
32.73
31.12.2013
31.12.2014
31.12.2015
15.03.2016
26
Financial Overview
Ruble depreciation offset decreases in volumes and prices, resulting in growth of gem-quality
rough diamond sales in 2015
Gem-quality rough diamond revenue analysis
RUB mln
Gem-quality rough diamond average price, $/ct
66,523
169
171
(49,265)
185,876
+9%
169,928
Gem-quality
rough diamond sales
in 2014
(1,310)
Ruble depreciation
Sales volume
decrease
Decrease in average price of gemquality diamonds
Gem-quality
rough diamond sales
in 2015
27
Financial Overview
Cost of production increase was impacted by extraction tax, wages, salaries and other staff
costs and fuel and energy costs
Cost of production
Cash costs by mining method
RUB mln
RUB/ct
2015
2014
2015
vs.
2014
Wages, salaries and other staff costs
40,253
34,279
17%
Extraction tax
23,323
14,697
59%
Depreciation
19,096
18,452
3%
Fuel and energy
17,610
13,686
29%
Materials
12,098
9,569
26%
Services
5,748
5,138
12%
Transport
2,118
2,474
(14%)
Other
1,568
1,058
48%
Cost of production
121,814
99,353
23%
Movement in inventory of diamonds, ores and
concentrates
(29,832)
(898)
33.2x
1,258
879
43%
93,240
99,334
(6%)
Cost of diamonds for resale
Cost of sales
2014
2015
2,477
2,431
2,139
2,191
2,132
1,879
1,733
1,420
ALROSA
Underground
Open-pit
Alluvial
ALROSA has already implemented certain saving initiatives in 2016 and has cut cost for operating activities by RUB3.4
bn, for investing activities by RUB5.0 bn and for financial activities by RUB3.5 bn – totaled RUB11.9 bn
–3.4
–5.0
–3.5
–11.9
RUB bn
RUB bn
RUB bn
RUB bn
Operating activities
Investing activities
Financing activities
28
Financial Overview
In 2015, EBITDA increased primarily due to growth in gross profit from diamond sales
EBITDA analysis
RUB mln
EBITDA margin
23,844
671
297
53%
272
(443)
45%
118,498
+26%
93,857
EBITDA
2014
Note: (1)
Increase in
gross profit (1)
gross profit net of depreciation
Increase in other
profits
Decrease in
social costs
Decrease in exploration
costs
Increase in SG&A
EBITDA
2015
29
Financial Overview
ALROSA’s long-term capital expenditure forecast
Planned vs Actual Capex
RUB bn
38.5
-2.5
36.0
2.6
35.6
38.9
0.4
0,4
-1.4
34.2
6.8
1.5
33.3
32.0
31.4
1.0
1,0
7.9
28.5
6.5
5.6
2.4
1.5
2.1
1,2
1.2
3.0
4.6
20.9
0.5
0,5
25.6
5.1
18.4
27.2
20.0
20.5
20.7
20.8
3.1
3.6
3.6
2018F
2019F
2020F
12.2
7.8
5.0
2014
2015
Industrial and social infrastructure
6.1
2016F
5.4
2017F
Mining operations
Udachny division
Severalmaz
2.5
2021F
Actual vs estimated capex
30
Financial Overview
ALROSA’s debt structure
Loans and borrowings
Loans and borrowings breakdown
$ mln
As at 31 December 2015
Total
debt/
EBITDA
6.1x
2.9x
1.5x
2.0x
2.0x
2.1x
1.9x
67% Bank loans
3,871
3,496
3,130
4,127
2,866
3,505
33% Eurobonds
3,040
100% US dollar-denominated debt
Average
interest rate
2009
2010
2011
2012
2013
2014
2015
12.6%
7.8%
7.8%
7.1%
5.7%
6.1%
5.8%
88% Long-term debt
12% Short-term debt
Maturity profile of loans and borrowings
$ mln
Bank loans
Eurobonds
1,090
1,000
600
350
0
2016
.
2017
2018
2019
2020
31
Financial Overview
ALROSA has a track record of strong cash flows and dividends
Operating cash flow, capital expenditures, free cash flow and dividends
Dividends per share, RUB
(36,056)
(34,241)
(38,165)
(30,050)
78,115
53,533
1.47
1.47
42,007
75,541
1.11
42,059
15,368
11,957
10,826
8,175
OCF
2012
CapEx
2012
FCF
2012
Dividends
2012
OCF
2013
CapEx
2013
FCF
2013
Dividends
2013
41,300
10,826
OCF
2014
CapEx
2014
FCF
2014
Dividends
2014
OCF
2015
CapEx
2015
FCF
2015
32
Appendix
33
Management team overview
Mirny division
Udachny division
Aikhal division
Yuri Okoyomov
Vice-president for sales
• Joined the Company in 1993
• Vice-president of ALROSA for marketing and sales since August 2009
Ravil Sanatulov
Director, Aikhal mining and processing division
• Joined the Company in 1986
• Over 29 years of industry experience
Nyurba division
CFO
Igor Kulichik
Vice-president - chief financial officer
• Joined the Company in 2002
• Vice-president and CFO of ALROSA since August 2009
Sales
Igor Sobolev
First vice-president – chief operating officer
• Joined the Company in 2007
• Head of Capital construction division, mining & metallurgical directorate,
Norilsk Nickel (2000-2007)
Alexander Makhrachev
Director, Udachny mining and processing division
• Joined the Company in 1979
• Over 36 years of industry experience
Igor Uvarov
Director, Nyurba mining and processing division
• Joined the Company in 1989
• Over 26 years of industry experience
Almazy Anabara
Ilya Ryashchin
First vice-president for finance and economy
• Joined the Company in 2012
• Head of planning and budgeting department at Russian Railways (since
2006)
• Deputy Head of finance department, Ministry of Railways of Russia (since
2001)
Mikhail Lopatinsky
Director, Mirny mining and processing division
• Joined the Company in 1992
• Over 23 years of industry experience
Matvey Yevseev
CEO Almazy Anabara
• Joined the Company in 1997
• Over 18 years of industry experience
Severalmaz
Andrey Zharkov
President - chief executive officer
• Joined the Company in 2015
• Deputy head of Gokhran (2010–2015)
• Chief commercial officer at Prioksky non-ferrous metals plant (2009–2010)
• Held various management positions in Russian metals and mining
companies, such as Norilsk Nickel and RUSAL (2001–2009)
COO
CEO
Operational Team
Finance
and economy
Executive Team
Andrey Pismenny
CEO Severalmaz
• Joined the Company in 1997
• Over 18 years of industry experience
• Chief engineer of ALROSA in 2010-2015
34
Supervisory Board overview (1/2)
1
5
Anton Siluanov
2
Yegor Borisov
3
Alexander Galushka
Finance Minister of the
Russian Federation
President of the Republic of
Sakha (Yakutia)
Minister for the Development
of the Russian Far East
Chairman of the Board of
directors
First Deputy Chairman of the
Supervisory Board
Deputy Chairman of the
Supervisory Board
4
Andrey Zharkov
President (CEO) of ALROSA
Nominated by: Russian Federation
Nominated by: Republic of Sakha (Yakutia)
Nominated by: Russian Federation
Nominated by: Russian Federation
Previously held positions include
• 2005 – 2011 – Deputy Minister of
Finance of the Russian Federation
• Since 2011 – Minister of Finance of the
Russian Federation
Previously held positions include
• 2003 – 2010 – Chairman of the
Government of the Republic of Sakha
(Yakutia)
• 2010 – 2014 – President of the
Republic of Sakha (Yakutia)
• Since 2014 – Head of the Republic of
Sakha (Yakutia)
Previously held positions include:
• 2004 – 2010 – President of Non-Profit
Partnership “Russian Collegium of
Appraisers”
• 2010 – 2012 – President, Co-chairman
of All-Russian public organisation
Delovaya Rossiya
• 2011 – 2012 – member of state
commission on the socio-economic
development of the Far East, the
Republic of Buryatia, the Zabaikalye
and Irtutsk regions
• Since 2013 – Minister of the Russian
Federation for the Development of the
Far East
Previously held positions include
• 2009 – 2010 – Сhief Commercial
Officer at Prioksky Non-Ferrous Metals
Plant
• 2010 – 2015 – Deputy Head of
Gokhran under the Russian Ministry of
Finance
• Since 2015 – President (CEO) of
ALROSA
Oleg Fedorov
Adviser to the Head of the
Federal Agency for State
Property Management
6
Sergey Barsukov
Director, Financial Policy
Department, Ministry of Finance
of the Russian Federation
7
Maria Gordon
Chief portfolio manager at
Pacific Investment
Management Co. (PIMCO)
until 2014
8
Alexey Chekunkov
CEO of Far East and Baikal
Region Development Fund
Nominated by: Russian Federation
Nominated by: Russian Federation
Nominated by: minority shareholders
Nominated by: Russian Federation
Previously held positions include:
• 2009 – 2012 – Head, Department for
cooperation with governmental
authorities and companies with
government participation, department of
investment and banking on global
markets, VTB Capital
• Since 2012 – Adviser to the Head of the
Federal Agency for State Property
Management
Previously held positions include
• 2007 – 2008 – First Deputy General
Director, Agency for Housing Mortgage
Lending (AHML)
• 2008 – 2010 – Assistant to Vice
Chairman of the Russian Federation
Government – Russian Federation
Minister of Finance
• Since 2010 – Director, Financial Policy
Department, Ministry of Finance of the
Russian Federation
Previously held positions include
• 1998 – 2010 – Goldman Sachs,
investment activity
• 2010 – 2014 – PIMCO, investment
activity
Previously held positions include
• 2009 – 2011 – Head of New Nations
Capital Investment Company
• 2011 – 2013 – Director, member of the
board, member of investment
committee of the Russian Direct
Investment Fund
• Since 2014 – Director of the Far East
Development Fund
35
Supervisory Board overview (2/2)
9
Oleg Grinko
10
Chairman of the Board of
Directors at Sberinvest Asset
Management
Pavel Ulyanov
11
Head of Energy Division at
RUSAL Global
Management B.V.
Valentin Nikiforov
12
Galina Danchikova
Head of representative office
of Nyurbinsky district in
Yakutsk
Chairwoman of the Government
of the Republic of Sakha
(Yakutia)
Nominated by: Russian Federation as an
independent director
Nominated by: Russia Federation as an
independent director
Nominated by: minority shareholders as an
independent director
Nominated by: Republic of Sakha (Yakutia)
Previously held positions include
• Since 2004 – Chairman of the Board of
Directors at Sberinvest Asset
Management
• Since 2006 – Adviser to Director of
investment and external
communications in Peresvet-Invest
group
Previously held positions include
• Since 2007 – Head of Energy Division
at RUSAL Global Management B.V.
Previously held positions include
• Since 2009 – Head of representative
office of Nyurbinsky district in Yakutsk
Previously held positions include:
• 2007 – 2010 – Deputy Chairman of the
Government of the Republic of Sakha
(Yakutia)
• Since 2010 – Chairman of the
Government of the Republic of Sakha
(Yakutia)
14
13
15
Yevgenia Grigoryeva
Valentina Kondratyeva
Peter Alekseyev
Minister of Property and Land
Relations of the Republic of
Sakha (Yakutia)
Head of state autonomous
agency Center for Strategic
Research of the Republic of
Sakha (Yakutia)
CEO of Republican Investment
Company
Nominated by: Republic of Sakha (Yakutia)
Nominated by: Republic of Sakha (Yakutia)
Nominated by: Republic of Sakha (Yakutia)
Previously held positions include
• 2007 – 2011 – First Deputy Minister of
Property Relations of the Republic of
Sakha (Yakutia)
• Since 2011 – Minister of Property and
Land Relations of the Republic of
Sakha (Yakutia)
Previously held positions include
• 2003 – 2013 – First Deputy Minister for
Economic Development of the Republic
of Sakha (Yakutia)
• Since 2013 – Head of state
autonomous agency Center for
Strategic Research of the Republic of
Sakha (Yakutia)
Previously held positions include
• 2009 – 2013 – Deputy Head, Head of
Department of state and legal affairs in
Presidential Administration and the
Government of the Republic of Sakha
(Yakutia)
• Since 2013 – CEO of OJSC Republican
Investment Company
36
Latest operational results
Type of
mining
Aikhal Division
Jubilee pipe
open-pit
Aikhal underground mine
underground
Komsomolskaya pipe
open-pit
Mirny Division
Ore and sands
processing
(‘000 t)
Diamond
production
(‘000 cts)
Grade
(ct/t)
Cash
costs
per ton
of ore,
(RUB)
Cash
costs
per
carat,
(RUB)
1,962
1,480
1.35
2,487
1,845
Grade
(ct/t)
Cash
costs
per
carat,
(RUB)
2014
2015
9,478
9,141
12,565
12,322
1.33
8,506
8,355
9,122
9,405
1.07
1,445
1,347
1.13
2,014
1,789
589
526
2,841
5.59
8,556
1,531
5.40
8,193
1,517
2014
3,292
2014
Cash
costs
per ton
of ore,
(RUB)
2015
2015
383
260
152
77
0.40
3,312
8,360
0.29
6,166
20,915
4,903
5,706
6,088
6,908
1.24
2,857
2,301
1.21
3,342
2,567
International underground mine
underground
445
486
3,862
4,024
8.61
14,047
1,632
8.28
16,303
2,000
Mir underground mine
underground
481
647
1,463
2,198
3.04
12,180
4,002
3.40
10,680
3,143
Alluvial and technogenic deposits
alluvial
3,978
4,574
764
686
0.19
466
2,422
0.15
666
4,043
4,814
5,377
3,679
4,297
0.76
2,163
2,831
0.80
2,714
3,396
3,710
3,250
3,390
3,515
0.91
1,802
1,972
1.08
2,253
2,084
114
413
1.28
21,687
16,970
1.58
14,404
9,142
1,771
10,241
0.23
2,267
10,025
Udachny Division
Udachnaya pipe
open-pit
Udachnaya underground mine
underground
Zarnitsa pipe
open-pit
Alluvial deposits
alluvial
Nyurba Division
89
262
1,015
993
176
225
0.17
-
872
-
145
0.17
1,429
8,573
2,000
2,040
7,363
7,510
3.68
4,776
1,297
3.68
6,371
1,731
-
-
Nyurbinskaya pipe
open-pit
1,255
978
6,542
4,809
5.21
4,776
916
4.92
6,371
1,296
Botuobinskaya pipe
open-pit
-
135
-
942
-
-
-
6.97
6,371
913
Alluvial deposits
alluvial
745
927
821
1,759
1.10
4,776
4,334
1.90
6,371
3,358
3,309
3,988
1,639
1,950
0.50
547
1,105
0.49
1,059
2,166
5,604
5,222
3,059
3,309
0.55
936
1,715
0.63
817
1,290
Lomonosov Division (Severalmaz)
Almazy Anabara
alluvial
Nizhne-Lenskoye
alluvial
ALROSA
5,814
5,640
1,818
1,964
0.31
537
1,718
0.35
937
2,691
35,922
37,114
36,212
38,260
1.01
1,747
1,733
1.04
2,229
2,139
underground
1,607
1,921
8,730
9,476
5.43
11,900
2,191
4.91
11,947
2,431
open-pit
18,178
17,960
21,020
20,921
1.16
1,642
1,420
1.16
2,189
1,879
alluvial
16,141
17,235
6,463
7,863
0.40
854
2,132
0.47
1,158
2,477
37
The share of underground production will increase from 24% in 2014 to 34% in 2021
ALROSA production forecast, by mining method
mln cts
1.01
Share in
production,
2014
36.2
24%
58%
8,7
1.03
1.05
1.00
0.97
0.94
0.91
41.3
14,8
14,5
13,9
18,4
19,8
19,6
19,5
47%
7,8
19%
39.9
39.9
9,5
12,4
15,1
14,3
19,1
17,5
6,5
7,9
7,4
7,3
7,2
6,9
7,1
2015
2016F
2017F
2018F
2019F
2020F
Underground mining
Open-pit mining
Share in
production,
2021F
41.2
39.0
20,9
2014
Grade (ct/t)
41.5
38.3
21,0
18%
0.90
34%
2021F
Alluvial mining
38
Detailed reserves and resources statement
Resources inclusive of Reserves
Reserves
Deposit
JORC
Category
Tonnage
(kt)
Reserve
Grade
(ct/t)
Reserve
Carats
(kct)
Deposit
Udachny Division
Udachnaya Pipe, ore stockpile
Udachny Division
Udachnaya Pipe, underground mining
Probable
83,017
1.31
108,627
Udachnaya Pipe, open pit mining
Probable
4,267
1.03
4,407
Udachnaya Pipe, ore stockpile
Proven
4,820
1.52
7,329
Zarnitsa Pipe
Probable
58,538
0.20
11,995
Aikhal Division
Udachnaya Pipe, underground mining
Udachnaya Pipe, open pit mining
Udachnaya Remnants above -280 m
Zarnitsa Pipe
Aikhal Division
Jubilee Pipe
Jubilee Pipe
Probable
107,163
0.90
96,982
Aikhal Pipe
Probable
5,217
4.37
22,789
Komsomolskaya Pipe
Probable
4,847
0.37
1,807
Mir Pipe
Probable
29,586
3.29
97,230
International Pipe
Probable
4,555
8.09
36,585
Mirny Division
Aikhal Pipe
Komsomolskaya Pipe
Mirny Division
Mir Pipe
International Pipe
Solur-Vostochnaya
Solur-Vostochnaya Placer
9,348
0.61
5,722
Nyurbinskaya Pipe
Probable
9,875
4.09
40,394
Botuobinskaya Pipe
Probable
13,839
5.13
70,971
Nyurbinskaya Placer
Probable
6,373
1.85
11,813
Botuobinskaya Pipe
Nyurbinskaya Placer
Lomonosov Division (PJSC Severalmaz)
Archangelsky Pipe
Probable
57,087
0.76
43,189
Karpinsky-1 Pipe
Probable
18,438
1.13
20,918
Probable
36,319
0.74
26,749
Almazy Anabara
Ebelyakh and Gusinyy Ruchey Placer
Total OJSC ALROSA
Proven
JORC Reserves
4,820
1.52
7,329
Probable
448,469
1.34
600,178
Total (1)
453,289
1.34
607,507
Resource
Carats
(kct)
Measured
Indicated
Inferred
Indicated
Indicated
Indicated
4,820
75,265
78,305
3,785
3,247
58,554
1.52
1.50
1.25
1.19
1.54
0.21
7,329
112,782
98,157
4,501
4,995
12,007
Indicated
Inferred
Potential
Indicated
Inferred
Indicated
129,017
65,977
8,431
7,729
8,269
4,812
0.84
0.62
0.32
4.68
3.87
0.38
108,166
40,594
2,734
36,159
31,967
1,808
Indicated
Inferred
Indicated
Inferred
29,211
10,913
4,208
1,542
3.55
3.11
8.73
7.98
103,782
33,940
36,739
12,304
Indicated
Inferred
7,527
1,198
0.78
0.72
5,903
865
Indicated
Inferred
Indicated
Inferred
Indicated
Inferred
Inferred
Inferred
12,264
1,192
13,679
2,685
6,176
6,407
1,085
3,841
4.13
5.42
5.19
5.14
1.91
1.66
0.49
2.86
50,661
6,465
71,044
13,790
11,814
10,638
537
10,996
Botuobinskaya Placer
Maiyskoe Kimberlite Body
56,226
39,408
24,988
5,168
0.77
0.98
1.08
1.26
43,406
38,623
26,960
6,512
30,508
6,308
0.88
0.45
26,749
2,848
4,820
467,197
232,298
1.52
1,41
1.33
7,329
657,477
308,235
704,315
1.38
973,041
Lomonosov Division (PJSC Severalmaz)
Indicated
Arkhangelskaya Pipe
Inferred
Indicated
Karpinsky-1 Pipe
Inferred
Almazy Anabara
Indicated
Ebelyakh and Gusinyy Ruchey Placer
Inferred
Total for OJSC ALROSA
Measured
Indicated
JORC Resources inclusive of
Inferred
Reserves
Total
Source: Micon report as at 01 July 2013
* does not include assets outside of JORC perimeter, with total GKZ reserves of 230 mln cts as at 01/01/2013
Resource
Grade
(ct/t)
Nyurba Division
Nyurbinskaya Pipe
Nyurba Division
Tonnage
(kt)
Solur-Vostochnaya
Solur-Vostochnaya Placer
Probable
JORC Category
*
39
Thank you!
Corporate Finance and Analytics
Investor Relations
1-st Kazachy Per., 10-12
Moscow 119017
Russia
Tel.: +7 495 745 5872
ir@alrosa.ru