Corporate Presentation. May 2015

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Corporate Presentation

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138 154 156 169 179 208 209 223 310 320 Erdemir Evraz Ternium NLMK Posco Severstal ThyssenKrupp China Steel CSN Kobe Steel 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 16.0% 16.9% 17.8% 17.9% 17.9% 20.2% 21.3% 22.9% 23.4% 26.6% Hyundai Steel Ternium Evraz China Steel JSW Steel MMK Erdemir NLMK CSN Severstal _1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 2.0 1.6 1.4 1.3 1.3 1.2 0.7 0.7 0.5 -0.3 Voestalpine Nucor ThyssenKrupp US Steel MMK Ternium Severstal NLMK Erdemir Salzgitter 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th

Further progress in efficiency and financial stability

Page 6

Source: Bloomberg, company data

For the Russian, European and Latin American companies EBITDA is calculated by the companies themselves and converted in USD at average rate for the period; for others - EBITDA is operating income + D&A

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Page 7

Financial priorities remain



Continuous improvement at

all levels; non-stop

benchmarking to best

practice



Smart capex



Working capital optimization



Liquidity management



Prudent cash allocation



Ongoing debt reduction with increased dividend

payment (50% payout)



Declining interest expense



Capex traditionally fully covered by operating cash

flow



Improved working capital turnover



Cash at hand covers almost 3 years of debt

maturities; additional availability

of committed credit lines



Cash in utilization at historically record levels



Investment Grade is our next step

Financial priorities

The effect

Key financial goal: Sizable FCF generation for growing dividend payments and

proactive debt reduction

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Highlights:



Over recent years Severstal has consistently delivered meaningful positive FCF*



Capex is traditionally covered with operational cash flow



FCF being used for dividend payments and further deleveraging

1,728 1,377 1,930 (1,297) 129 (1,084) 88 (779) 81

OCF 2012 Capex 2012 Other adj. to FCF FCF 2012 OCF 2013 Capex 2013 Other adj. to FCF FCF 2013 OCF 2014 Capex 2014 Other adj. to FCF FCF 2014

* Free cash flow is determined as an aggregate amount of the following lines: Net cash from operating activities – continuing operations, CAPEX, proceeds from disposal of PPE, interest received and dividends received

Free cash flow*

generation in FY2012**

Positive FCF of $560m

Free cash flow*

generation in FY2013**

**Free cash flow* generation in**

FY2014

Positive FCF of $1,232m

Page 8

FCF is our key focus

Positive FCF of $381m

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Debt Structure

As at 31.03.2015 the debt structure was dominated by public debt (90% of total) and the US

dollar (89.9% of total).

Page 9

**Debt Maturity Schedule*, $m**

Notes:

Debt represents the principal amount of debt. Debt for 2015 represents amount of debt as at 31 March 2015 * Figures exclude accrued interest and unamortized balance of transactional costs.

** Repayment of Convertible Bond in line with Put Option in September 2015 assuming Put Option realized *** Redeemed in February 2015 9 521 627 575 2 703 452** 137*** 84*** 2015 2016 2017 2018 2019 2020+

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3,695 2,924 3,528 775 3,429 1,532 2,899 1,376 3,860 3,080 1.3x 1.5x 0.4x 0.7x 0.6x

Total debt, $m Net debt, $m Net debt/EBITDA, x Net debt/EBITDA ex-SNA, x

Q2 14 Q3 14 Q4 14 Q1 15 SNA portion, $m 1,522 4 456 1 4 688 Liquidity 2Q 2015 3Q 2015 4Q 2015 1Q 2016

Cash Short-term Debt to be Repaid Unused Committed Credit Lines

Robust Liquidity and Sustainable Leverage

Strong liquidity position:

 Severstal gross debt reduced by 15.5% since the end of Q4 14 to $2,899m

 Total of $221m of bond issues redeemed during a public tender offer to buy back the Company’s 2016 and 2017 Eurobonds

 Committed unused credit lines returned to $688m after $300m of short-term debt raised in Q4 14 via committed facilities was repaid during Q1 15

 Solid liquidity position at the end of Q1 15 with $1,522m in cash and cash equivalents and committed unused credit lines of $688m, more than covering short-term debt of $465m*

 Net Debt/EBITDA ratio further decreased q/q to 0.6x at the end of Q1 15 (Q4 14: 0.7x), one of the lowest amongst steel companies globally

* Represents principal amount of debt including repayment of Convertible Bond in line with Put Option in September 2015 assuming Put Option realized

Page 10

Total Short-term Debt to be Repaid of $465m*

Q1 2015 debt currency mix _{Q1 2015 cash currency mix}

USD 89.9% EUR 0.8% RUB 9.3% RUR 25% USD 68% EUR 7%

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Since 2010 Severstal has been regaining ratings agencies’ confidence and seeing consistent upgrades at a faster pace compared to its key peers

 Since February 2015, Moody’s has Severstal’s rating at Ba1/Negative from Stable (in light of more challenging

macroeconomic conditions in Russia), while affirmed its rating (drivers: implemented cost efficiencies and liquidity)

 Since February 2015, S&P has Severstal’s rating at BB+/Negative from Stable (in light of more challenging macroeconomic conditions in Russia), while affirmed its rating (drivers: implemented cost efficiencies and deleveraging)

 Since May 2015, Fitch has Severstal’s rating at BB+/Positive from Stable (drivers: improved profitability; successful deleveraging; enhancing production efficiency; comfortable credit metrics)

B+/B1 BB-/Ba3 BB/Ba2 BB+/Ba1

Credit ratings evolution

Page 11

Feb-04 Dec-04 Oct-05 Aug-06 Jun-07 Apr-08 Feb-09 Dec-09 Oct-10 Aug-11 Jun-12 Apr-13 Feb-14 Dec-14

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Page 12

The dividend policy: further enhancing cash returns



Severstal is committed to predictable quarterly dividends



The Company’s robust performance in 2014 and confidence in the

outlook prompted the Board of Directors to modify Severstal’s

existing dividend policy



Previous dividend policy assumes quarterly payments of not less than

25% of the net profit for the reporting period



Following the Board resolution on 9 October 2014, Severstal is now

committed to paying of not less than 50% of the net profit for the

reporting period provided that Net debt/EBITDA is below 1.0x



Should the ratio increase to higher than 1.0x, Severstal would return

to its previous dividend payout of 25% of net profit

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Relentless focus on

cost-reduction and

operational enhancements

since 2010

1 Three key pillars behind the delivery against the plan

Page 13

Fundamental strengths

of our vertically

integrated business

model

Disposal of non-core

assets to make the

business more focused

and streamlined

2 ₃

Strong FCF and one of highest EBITDA margins globally

throughout the cycle

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4% 32% 1%

46%

37%

54%

50% 31% 45%

Semi-finished Hot-rolled HVA



Market opportunities:



Proximity to export ports allows to maximize steel

sales earnings



Benefiting from the construction of the Power of

Siberia gas pipelines



Just launched a new service center near St.

Petersburg to supply stampings for the auto and

machinery industries



Launch of the Balakovo Mini-Mill in Q3 2014:



Adding 1 mtpa of long products for the construction

market



No major competition around, high import

substitution opportunities



Efficiencies and cost reduction:



Scheduled upgrade of the HR mill at the Cherepovets

Steel Mill (the Mill-2000)



Increasing use of higher-grade pellets from Karelsky

Okatysh (66% Fe content)

by Destination Russia by Industry

Source: Severstal, Brokers’ reports, Companies data

Notes: High value-added products comprise plates, large diameter pipes, cold-rolled sheet, metalware, galvanised sheet, colour coated sheet, tubes and pipes, formed shapes

2014 Highlights

Sales Breakdown (FY 2014)

Highest Share (by Volume) of HVA Products

Among Russian Peers

1

_{(FY 2014)}

(1) Shares calculated based on companies’ Russian assets

Leading steel producer & supplier to local markets

Other 1% Americas 7% Asia 3% Europe 15% Russia 67% Other 18% Oil & gas 7% Automotive 4%

Machinery 6% Pipe & tubes 9% Construction 56%

Severstal NLMK MMK

Page 15

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358 389 378 329 337 344 336 348 342 324 299 279 272 318 280 203 169 484 559 537 472 457 457 432 401 418 409 370 377 350 361 327 255 214 $0 $100 $200 $300 $400 $500 $600 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15

Contribution of Severstal Resources division to the integrated costs Cash cost of slab on an integrated basis

Vertical Integration1 _{Global Cost Competitiveness}

Leading Position in Iron Ore Integration, %

Leading Position in Coking Coal Integration, %

(1)Vertical integration – percent of self-sufficiency in terms of its own generation and consumption (2014 data) Sources: Company reports, Severstal analysis

Vertically integrated, low-cost steelmaker

Page 16 Q1 15 non-integrated cash cost of slab down $41/t q/q Q1 15 integrated cash cost of slab down $34/t q/q

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Page 17

Room for efficiency improvements

Purchasing process redesign



Single purchasing organization



Category management revision

Efficiency of hot metal production



With the new pellets quality, upgraded coke

battery and increased spread between pig iron

and scrap we are returning back coke quality –

coke hot strength



Higher usage of recycled slag in BF, sinter output

increase

BOF process optimization



BOF yield target is 91% (+1%) through improved

blowing and slag stopping. FeO content in slag is

already declining

Total target effect of

around $200 mln*

in 2014-2015

* The actual figure of gains can be either higher or lower depending on the FX fluctuations.

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Page 18

Investments in HVA production

Modernization of

the 4-stand CR Mill

New HDG/Coating

lines

Effects

:

• CRC capacity to increase

by 200 kt

• Cost reduction and

quality improvement

CAPEX

: RUB 2.5bn

Launch

: Q2 2016

Current capacity (increase):

2.8mnt per annum (+7%)

Effects

:

• HDG capacity to increase by

400 kt

• Coating capacity to increase

by 200 kt

CAPEX

: RUB 6.0 bn

Launch

: 2017

Current capacity (increase):

HDG @ 1.2mnt per annum

(+33%)

Color coated @ 400kt per annum

(+50%)

Upgrade of HR

Mill-2000

Effects

:

• HRC capacity to increase

by 290 kt

• Cost reduction

CAPEX

: RUB 0.8bn

Launch

: Q4 2014

Current capacity (increase):

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Balakovo Mini-Mill

Scrap yard in place and functioning Balakovo Electric Arc Furnace



Ramping up since Q3 2014



Total capex in the project is ~ 23 bln RUB (or ~$700 mln)



Location: Town of Balakovo, Saratov region, Volga area



Full capacity: 1 mtpa of long products: rebar, angles,

channels



Equipment: EAF (Siemens VAI), rolling mills (Danieli)

Balakovo Mini-Mill

Favorable Market Environment



Rapidly developing steel market (Southern Russia) with

proximity to customers and river logistics



Scrap surplus of about 3 mtpa in the Volga region



Excess electricity capacity in the region



Environment-friendly technology: 99.5% gas cleaning system

and closed-loop water recirculation



Well-developed transport infrastructure

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Balakovo Mini-Mill: Ramping-up

Page 20



Severstal is not new in the Volga and Southern regions as a steel seller, while before it was selling

flat products



All sales from Balakovo are being realized via our sales team at the Russian Steel Division in

Cherepovets, thus allowing access to federal steel traders and our established clients (rebar,

angles, sections are typically sold to steel traders, rather than to end customers directly)



Balakovo will prioritize having long-term contracts (annual) with the clients (up to 70% of the

portfolio). This allows Balakovo to have stable demand through the year



Most of the products from Balakovo will be delivered to customers by auto. Longer distances

(beyond 700 km from the mill) will be covered by rail. River transportation options might be

considered as well



In addition to residential construction, an upside in demand in the region will be coming from

construction of new production facilities by large companies

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Severstal is a unique Russian producer of

large-diameter pipes on a fully integrated basis

 Severstal’s Izhora Pipe Plant is located in the Kolpino Industrial Area just 30 km from St. Petersburg (proximity to port). Employs around 1,100 people. Was built from scratch by Severstal and launched in 2006. Ongoing modernization to meet tough customers’ requirements and international certification

 Producing a wide range of large-diameter pipes (from 813mm to 1420mm) for the oil & gas industry with nominal capacity of 600kt per annum (actual output varies and depends on the product mix)

 Plate for Izhora comes from Mill-5000 is located in the same Kolpino Area. Slabs for making plate are delivered from the Cherepovets Steel Mill. Having both Izhora Pipe Plant and Mill-5000 allows Severstal to flexibly operate on both markets – selling plate to 3rd_party

pipe producers and selling large-diameter pipes to oil & gas companies as an end product

 Key customers: Gazprom, Transneft. Recently Izhora has supplied pipes for the following oil & gas projects: Bovanenkovo-Ukhta (the main supplier), North-European pipeline, Eastern Siberia - Pacific Ocean (ESPO), Ukhta-Torzhok, South Stream, Power of Siberia

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 Major supplier to Russian Steel – feedstock security and a driver behind leading industry cost / margin positions

 High quality and scarcity of produced coking coal – favorable positioning on both local and export markets

 Portfolio of new prospective projects with prudent approach towards development

 Continuous focus on safety, operational efficiency and volumes

Highlights

#2 by Iron Ore Concentrate Production in

Russia (2014)*

#2 by Coking Coal Concentrate Production in

Russia (2014)

Iron Ore and Coking coal Sales by Customers

(2014)

Source: Severstal data, Metal Expert

*Iron ore concentrate produced at Karelsky Okatysh is further reprocessed in pellets production cycle

Internal consumption 57,5% Domestic market 18,1% Export market 24,3% 22.1 mt

Market positioning

Severstal Resources 16%* Metalloinvest 38% Other 9% NLMK 14% Evraz 13% Kovdor 6% Mechel 4% Yakutugol 12% Other 29% Yuzhny Kuzbass 8% Severstal Resources 11% KRU 10% Yuzhkuzbassugol 10% Sibuglemet 10% Raspadskaya 11% Page 23

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Vorkutaugol (coking coal)

Completed to date



Production back on the rise since Q3 2014. The causes for

the decline in 2013 – 1H2014 have been managed



Headcount reduced from 14,000 to 8,000 people over last

5 years



Inclined shaft at Vorgashorskaya completed



First Russian power station on coal methane launched

In progress



Further production growth



Inclined shaft at Zapolyarnaya in 2015



The 2

nd

_{section upgrade of the Pechorskaya}

Washing Plant is scheduled for 2015

Page 24

Coking coal total cash costs (TCC)

TCC declined to $33/t (Q4 14: $40/t) on efficiency improvements and RUB devaluation

2012 2013 2014 2015F

Raw coal output, mt

13.0 12.2 11.4 12.4

Hard coking coal (2Zh

grade) concentrate

production, mt

4.0

4.3

4.0

4.3 Hard coking coal (2Zh

grade) concentrate

total cash cost, $/t

102

97

96

Subject _{to FX}

Vorkutaugol operational highlights

75 99 127 72 86 105 87 85 96 101 81 ₇₉ 93 125 87 40 33

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Karelsky Okatysh (iron ore pellets)

Completed to date



Volume reached 10.6 mt (annualized volume run

rate) and will remain broadly at this level



Headcount reduced to 4,700 people in 2013



4.5 mt of fluxed pellets produced with

Fe content increased from 63.7% to 66.0%



Production and stripping ratio are constant and

according to the mine plan

In progress



A new stream of projects (total capex of

$30 mln) launched in 2014 to yield a $4/t improvement from

the beginning of 2016

Page 25

Iron ore pellets total cash costs (TCC)

TCC further improvement on RUB devaluation and fluxed pellets production share increase

Karelsky Okatysh operational highlights

2012 2013 2014 2015F

Pellet output, mt

10.3

10.6

10.6 Stripping ratio, m3/t 1.22

1.17

1.10

1.10 Pellet cash cost, $/t

59.0

55.2

37.2 Subject

to FX

61 62 59 68 60 55 57 64 62 56 49 54 42 45 37 25 22

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Olkon (iron ore concentrate)

Completed to date



Quality more stable after Derrick screens

installation



The mine plan reviewed. At current price levels

life of mine is 9 years @ 3.9 mt production



The highest cost open pit was idled in August

2014

In progress



Capex and maintenance optimization to match

the new mine plan



Stripping ratio passed its peak in 2013 and will

be further declining



High-angle conveyor will be launched in

November 2014

Page 26

Iron ore concentrate total cash costs (TCC)

TCC declined to $23/t on solid production volumes and

RUB devaluation

Olkon operational highlights

2012 2013 2014 2015F

Concentrate

production, mt

4.8

4.6

4.4

3.9 Stripping ratio, m3/t

1.26 1.49 1.26

1.23 Concentrate cash cost,

$/t

50.0 44.6 39.1

Subject

to FX

52 48 43 50 51 47 44 60 53 43 40 44 46 39 37 32 23

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Page 28

Summary

 Primarily reflecting a combination of ongoing efficiency improvements as well as lower input costs with RUB devaluation mitigating the impact of lower selling prices Severstal posted further EBITDA* margin expansion by 6.4 ppts q/q to 38.5% (Q4 14: 32.1%).

 This represents the highest level in Severstal’s history as a public company amidst challenging market conditions

 Q1 15 Group revenue decreased 18.5% q/q to $1,531m (Q4 14: $1,878m) largely reflecting a decline in global steel prices and steelmaking raw materials price. However, Group EBITDA decreased a negligible 2.0% q/q to $590m (Q4 14: $602m)

 Free cash flow of $209m (Q4 14: $425m) generated in line with our key strategic focus. Q/q decline of 50.8% primarily reflects an increase in stock to normalized level after divesting inventories during Q4 2014 against strong demand

 Q1 15 net profit** of $343m (Q4 14: net loss ** of $795m) was marginally impacted by FX translation losses of continuing operations of $31m. Adjusting for those non-cash items, Severstal would have posted a net profit of $374m (Q4 14: net profit of $534m excluding impairments)

 Net Debt/EBITDA ratio further decreased q/q to 0.6x at the end of Q1 15 (Q4 14: 0.7x). This represents one of the lowest levels among steel companies globally

 Q1 15 capex *** of $103 million, 34.4% lower q/q (Q4 14: $157 million) reflecting our prudent approach to investments as well as the completion of most large-scale development projects

 Recommended dividend payment of 12.81 roubles per share for the three months ended 31 March 2015

Q1 2015 Highlights:

* EBITDA represents profit/(loss) from operations plus depreciation and amortization of productive assets (including the Group’s share in depreciation and amortization of associates and joint ventures) adjusted for gain/(loss) on disposals of PPE and intangible assets and for share in associates’ and joint ventures’ non-operating income/(expenses)

** Net profit/ (loss) attributable to shareholders of PAO Severstal. *** Represents cash outflow on capex in the period

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Revenue Dynamics and Breakdown

Q1 2015 Revenue: $1,531m

(Q4 2014: $1,878m; -18.5%)

Group revenue decreased q/q despite solid

demand and the Company’s flexibility to shift its

sales between domestic and export markets

coupled with number of successful attempts to

increase RUB-denominated selling prices in

order to mitigate sharp RUB devaluation

Page 29

Q1 2015 Revenue: $1,531m

(Q1 2014: $1,991m*; -23.1%)

Primarily impacted by lower realized prices

effect, which has been partially mitigated by

sizable increase in sales volumes at the Russian

Steel division, Group revenue decreased y/y

* These amounts reflect adjustments made in connection with the presentation of the discontinued operation ** Divisional results for the respective previous periods were restated following a change in the Group’s management structure in January 2015 -154 289 1,396 -193** 356** 1,715** -400 0 400 800 1,200 1,600 2,000 Intersegment Severstal Resources Severstal Russian Steel

Q4 2014 Q1 2015 -154 289 1,396 -305** 567** 1,729** -400 0 400 800 1,200 1,600 2,000 Intersegment Severstal Resources Severstal Russian Steel

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EBITDA Dynamics and Breakdown

Q1 2015 EBITDA: $590m

(Q4 2014: $602m; -2.0%)

While Group EBITDA decreased marginally q/q,

EBITDA margin* expanded further driven by

combination of ongoing efficiency improvements

at both Russian Steel and Resources as well as

lower input costs and the RUB devaluation

mitigating the impact of lower selling prices

Q1 2015 EBITDA: $590m

(Q1 2014: $459m**; +28.5%)

EBITDA improvement y/y reflects a strong result

at Russian Steel on the back of operational

enhancements, lower input costs and RUB

devaluation, more than offsetting lower

deliveries at Resources

Page 30

* The Group Q1 2015 EBITDA margin was 38.5%

** These amounts reflect adjustments made in connection with the presentation of the discontinued operation *** Divisional results for the respective previous periods were restated following a change in the Group’s management structure in January 2015

-4 118 476 3*** 134*** 465*** -100 0 100 200 300 400 500 Intersegment Severstal Resources Severstal Russian Steel

Q4 2014 Q1 2015 -4 118 476 2*** 192*** 265*** -100 0 100 200 300 400 500 Intersegment Severstal Resources Severstal Russian Steel

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Severstal Russian Steel (RSD)

 Severstal Russian Steel increased its steel output in Q1 2% to 2.96mnt with all its rolling facilities at Cherepovets Steel Mill (CherMK) running at almost full capacity. However, steel products sales decreased 4% q/q to 2.56mnt. This allowed the Company to build up its internal stock of high value-added (HVA) products to normal levels following the divestment of inventory against strong demand in Q4 14

 Severstal’s proximity to export markets facilitated a shift from domestic to export deliveries. As a result, in Q1 2015 exports accounted for 38% of sales (Q4 14: 29%)

 Increased exports and increased domestic RUB-denominated sales prices in order to catch up with the USD-denominated parity helped to partially mitigate the negative impact of the sharp RUB devaluation on revenue. That said, revenue decreased 18.6% q/q to $1,396m (Q4 14: $1,715m**)

 RSD has been able to fully mitigate the impact of lower selling prices through lower input prices in conjunction with reductions in production and G&A costs. That said, EBITDA increased 2.4% q/q to $476m (Q4 14: $465m**), while EBITDA margin increased to 34.1% (Q4 14: 27.1%)

 In Q1 Cherepovets total non-integrated cash cost of slab decreased $41/t q/q due to lower raw materials prices as well as a higher crude steel production volumes and the positive impact of RUB devaluation. Q1 integrated cash cost of slab decreased $34/t q/q to $169/t

Share of high-value-added products*** in total steel shipments, %

EBITDA per tonne and average selling price

*All steel products, incl. pipes, etc.; Ex Works price terms.

Steel sales volumes by destination, %

** Divisional results for the respective previous periods were restated following a change in the Group’s management structure in January 2015

*** High-value-added comprises: plate; cold-rolled , galvanized and metallic coated, color coated sheet; metalware; large-diameter and other pipes. **** Excluding foreign exchange effect

EBITDA drivers in Q1 2015, $m Page 31 175 186 108 186 579 490 619 490 Q4 2014 Q1 2015 Q1 2014 Q1 2015 EBITDA per tonne (US$/t) Average Selling Price (US$/t)*

2.6 2.6 2.7 2.3 2.6 2.7 2.6 2.7 2.5 2.7 2.7 2.7 _2.6 40% 43% 46% 46% 43% 45% 50% 49% 47% 47% 52% 52% 46% 0% 20% 40% 60% 80% 100% 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15

Total finished steel, mt (lhs) share of HVA, %

53% 58% 61% 65% 56% 65% 69% _{62% 60% 64%}71% 71% 62% 47% 42% 39% 35% 44% 35% 31% _{38% 40% 36%}29% 29% 38% Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Russia Export 465 476 (85) 76 68 (19) ₍₂₉₎ EBITDA Q4 2014** Sales Volume COGS Volume Sales Price**** COGS Price Other EBITDA Q1 2015

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Severstal Resources

 Severstal Resources has been able to partially mitigate the impact of a 15% q/q drop in the global iron ore benchmark and negative RUB devaluation effect. USD-denominated prices for iron ore pellets and concentrate decreased 4% q/q and 11% q/q, respectively

 Coking coal concentrate price decline of 16% q/q is purely a function of ca. 30% q/q RUB devaluation partially offset by another round of RUB-denominated prices upgrades

 The division’s total coking coal concentrate sales down 13% q/q due to severe weather conditions. The Company expects production volumes to recover in Q2 15. Iron ore pellet sales volumes down 6% q/q against strong comparatives in Q4 14

 Severstal Resources’ revenue decreased 18.8% q/q to $289m (Q4 14: $356m*). Nevertheless, Q1 15 EBITDA decreased 11.9% q/q to $118m (Q4 14: $134m*) with EBITDA margin increasing to 40.8%

 Continuous implementation of efficiency improvement projects to further decrease TCC of production supported by RUB devaluation: TCC at Karelsky Okatysh declined to $22/t ($25/t in Q4 14), while TCC at Vorkutaugol decreased to $33/t ($40/t in Q4 14)

 TCC at Olcon improved substantially to $23/t ($32/t in Q4 14) on solid production

Page 32 Average selling price and cash cost per tonne

V o rk u tau go l ( co kin g co al co n cen tr at e, mix) K ar elsk y Ok at ysh (p elle ts)

* Divisional results for the respective previous periods were restated following a change in the Group’s management structure in January 2015 ** Excluding foreign exchange effect

*** Free carrier price terms

EBITDA drivers in Q1 2015, $m Olc o n ( ir o n o re co n cen tr at e) 40 ₃₃ 93 33 76 64 96 64 Q4 2014 Q1 2015 Q1 2014 Q1 2015 Cost per tonne (US$/t) Average Selling Price (US$/t)***

32 23 46 23 36 32 70 32 Q4 2014 Q1 2015 Q1 2014 Q1 2015 Cost per tonne (US$/t) Average Selling Price (US$/t)***

25 22 42 22

55 ₅₃

107

53

Q4 2014 Q1 2015 Q1 2014 Q1 2015 Cost per tonne (US$/t) Average Selling Price (US$/t)***

134 118 (25) 1 26 15 (33) EBITDA Q4 2014*

Sales Volume COGS Volume Sales Price** COGS Price Other EBITDA Q1 2015

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Summary Income Statement

$ million, unless otherwise stated Q1 2015 Q4 2014 Q1 2015 Q1 2014*

Revenue 1,531 1,878 1,531 1,991

COGS (812) (1,137) (812) (1,357)

EBITDA 590 602 590 459

EBITDA margin, % 38.5% 32.1% 38.5% 23.1%

Profit from operations 502 453 502 310

Operating margin, % 32.8% 24.1% 32.8% 15.6%

Profit/(loss) before income tax 446 (953) 446 (98)

Net profit/(loss) 343 (795) 343 (100)

Basic EPS, $ 0.42 (0.98) 0.42 (0.12)

Page 33 * These amounts reflect adjustments made in connection with the presentation of the discontinued operation

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Summary Balance Sheet

$ million As at 31 March 2015 As at 31 December 2014 Cash and Cash Equivalents 1,522 1,897

Total Assets: 7,076 7,561 Current Assets 3,297 3,620 Non-current Assets 3,779 3,941 Total Liabilities: 4,093 4,723 Current Liabilities 1,262 1,734 Non-current Liabilities 2,831 2,989 Total Equity 2,983 2,838

Total Equity and Liabilities 7,076 7,561

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Summary Cash Flow Statement

$ million Q1 2015 Q4 2014 Q1 2015 Q1 2014*

Profit before Financing and Taxation 488 290 488 289

Cash Generated from Operations 323 612 323 538

Interest Paid (42) (57) (42) (35)

Income Tax Paid (4) (9) (4) (8)

Net cash from Operating Activities - continuing operations 277 546 277 495

Net cash used in Operating Activities - discontinued operation (14) (15) (14) (7)

Net cash from Operating Activities 263 531 263 488

Net cash used in Investing Activities - continuing operations (68) (101) (68) (237)

Net cash used in Investing Activities - discontinued operation - - - (14)

Total cash used in Investing Activites, incl. (68) (101) (68) (251)

Additions to PP&E and IA (103) (157) (103) (251)

Free Cash Flow** 209 425 209 256

Cash (used in)/from Financing Activities - continuing operations (554) (1,035) (554) 120

Cash from/(used in) Financing Activities - discontinued operation - 1 - (478)

Cash used in Financing Activities (554) (1,034) (554) (358)

Effect of Exchange Rate on Cash and Cash Equivalents (16) (252) (16) (23)

Net decrease in Cash and Cash Equivalents (375) (856) (375) (144)

Cash and Cash Equivalents at beginning of the Period 1,897 2,753 1,897 1,036

Cash and Cash Equivalents at end of the Period 1,522 1,897 1,522 892

Page 35 * These amounts reflect adjustments made in connection with the presentation of the discontinued operation

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Sensitivity to currency

Page 36

Position

Effect*

Revenues

~65% ruble denominated

All-in cost (COGS and SG&A)

~90% ruble denominated

CAPEX

~75% ruble denominated

* Excluding Severstal North America.



Neutral effect of FX on EBITDA due to high share of export shipments with payment

in USD and Euro



Generally benefit from the RUB weakening as a result of the export net back parity

effect on the local pricing

RUB outflow and

inflow broadly

match

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Page 38

Q1 2015 Group Highlights*

Crude steel production increased 2% q/q to 2.96 mln tonnes (Q4 14: 2.89 mln tonnes) with the prior quarter impacted by scheduled maintenance at one of the BOFs. Lower hot metal production (down 1% q/q to 2.31 mln tonnes) reflects short-term maintenance at BF#5.

Consolidated sales of steel products declined 4% q/q as the Company built its internal stock of high value-added (HVA) products to normal levels after divesting inventories against strong demand in Q4.

There has been an increase in profitability for hot-rolled coil (HRC) export deliveries almost throughout the entire quarter on the back of RUB devaluation, which resulted in higher HRC sales volumes.

The abovementioned factors resulted in a 6 ppts decrease of the share of HVA products in the sales portfolio, to 46% (Q4 14: 52%).

Coking coal concentrate sales volumes at Vorkutaugol decreased 13% q/q to 1.27 mln tonnes (Q4 14: 1.47 mln tonnes) due to seasonal severe weather conditions in the region.

Whilst the pricing environment remains challenging, the sharp RUB devaluation triggered a round of RUB-nominated price increases in Q1 in order to catch up with export USD-nominated parity. This has partially mitigated the impacts of both the RUB devaluation and the global steel prices decline.

Production volumes, t Q1 2015 Q4 2014 Change,% Q1 2015 Q1 2014 Change,%

Crude steel (Total output): 2 959 389 2 891 739 2% 2 959 389 2 713 759 9%

Hot metal (Total output): 2 305 312 2 320 277 (1%) 2 305 312 2 246 364 3%

Sales volumes, t Q1 2015 Q4 2014 Change,% Q1 2015 Q1 2014 Change,%

Coking coal concentrate 1 272 642 1 470 621 (13%) 1 272 642 1 391 490 (9%)

Iron ore pellets 2 576 453 2 754 450 (6%) 2 576 453 2 582 560 (0%)

Iron ore concentrate 984 272 980 782 0% 984 272 1 099 297 (10%)

Total steel products (Consolidated) 2 544 868 2 643 552 (4%) 2 544 868 2 405 426 6%

Total steel products (Russian Steel) 2 558 524 2 654 466 (4%) 2 558 524 2 453 932 4%

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Severstal Russian Steel Operational Results

Page 39

Total steel products 2 558 524 2 654 466 (4%) 2 558 524 2 453 932 4%

Semi-finished products 106 891 98 612 8% 106 891 119 604 (11%)

Rolled products: 1 985 724 2 010 001 (1%) 1 985 724 1 937 075 3%

Hot-rolled coil 928 150 824 608 13% 928 150 944 129 (2%)

Hot-rolled plate 191 996 196 903 (2%) 191 996 230 355 (17%)

Cold-rolled coil 303 656 350 456 (13%) 303 656 335 082 (9%)

Galvanised and metallic coated coil 134 613 162 614 (17%) 134 613 119 716 12%

Color coated coil 84 459 111 720 (24%) 84 459 77 867 8%

Long products 342 850 363 700 (6%) 342 850 229 926 49%

Downstream products: 465 909 545 853 (15%) 465 909 397 253 17%

Metalware products 138 699 152 274 (9%) 138 699 145 813 (5%)

Large diameter pipes 121 512 150 078 (19%) 121 512 75 844 60%

Other tubes, pipes, formed shapes 205 698 243 501 (16%) 205 698 175 596 17%

Sales price, $/tonne Q1 2015 Q4 2014 Change,% Q1 2015 Q1 2014 Change,%

Semi-finished products 374 454 (18%) 374 423 (12%)

Hot-rolled coil 394 450 (12%) 394 469 (16%)

Hot-rolled plate 486 560 (13%) 486 741 (34%)

Cold-rolled coil 445 492 (10%) 445 579 (23%)

Galvanised and metallic coated coil 570 610 (7%) 570 741 (23%)

Color coated coil 736 825 (11%) 736 909 (19%)

Long products 374 429 (13%) 374 490 (24%)

Metalware products 823 916 (10%) 823 1 099 (25%)

Large diameter pipes 1 196 1 295 (8%) 1 196 1 564 (24%)

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Severstal Russian Steel (RSD)

RSD steel products sales decreased 4% q/q to 2.56 mln tonnes.

HRC sales volumes increased 13% q/q reflecting an uptick in profitability for HRC export deliveries. That said, given Severstal proximity to export markets allowing to flexibly shift between domestic and export deliveries RSD increased share of export to 38% in Q1.

Notwithstanding decrease in sales volumes of HVA products, all the rolling facilities at CherMK were running at almost full capacity in Q1. The latter facilitated an increase in stock to normalized level after divesting inventories during Q4 against strong demand and temporary maintenance of BOF#3.

Sales of LDPs decreased 19% q/q on short-term scheduled maintenance at Izhora Pipe Mill. Nevertheless, in Q1 Severstal continued supplying LDPs for the Southern Corridor and Bovanenkovo-Ukhta pipelines, which resulted in a high utilization rate at Izhora Pipe Mill. In Q1 Severstal has won a tender to supply about 160kt of LDPs for Gazprom's Power of Siberia project.

Following global steel prices downward trend average steel prices for steel products at RSD decreased 7-28% q/q. Nevertheless, RSD was able to proactively increase domestic RUB-nominated sales prices compensating for the RUB devaluation effect and catching up with the USD-nominated parity.

Share of high-value-added products* in total steel shipments, % Steel sales volumes by destination, %

* High-value-added comprises: plate; cold-rolled , galvanized and metallic coated, color coated sheet; metalware; large-diameter and other pipes.

Page 40 Moscow St. Petersburg 53% 58% 61% 65% 56% 65% 69% 62% 60% 64% 71% 71% 62% 47% 42% 39% 35% 44% 35% 31% 38% 40% 36% 29% 29% 38% Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Russia Export 2.6 2.6 2.7 2.3 2.6 2.7 2.6 2.7 _2.5 2.7 2.7 2.7 2.6 40% 43% 46% 46% 43% 45% 50% 49% 47% 47% 52% 52% 46% 0% 20% 40% 60% 80% 100% 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Total finished steel, mt (lhs) share of HVA, %

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Severstal Resources Operational Results

Page 41

Coal: 1 728 145 1 897 345 (9%) 1 728 145 1 869 528 (8%)

Coking coal concentrate: 1 272 642 1 470 621 (13%) 1 272 642 1 391 490 (9%)

Vorkutaugol 1 272 642 1 470 621 (13%) 1 272 642 1 192 711 7%

PBS Coals - - n.a. - 198 779 n.a

Raw coking coal, Vorkutaugol 561 - n.a. 561 32 032 n.a.

Steam coal: 454 942 426 724 7% 454 942 446 006 2%

Vorkutaugol 454 942 426 724 7% 454 942 432 783 5%

PBS Coals - - n.a. - 13 223 n.a.

Iron ore: 3 560 725 3 735 232 (5%) 3 560 725 3 681 857 (3%)

Iron ore pellets 2 576 453 2 754 450 (6%) 2 576 453 2 582 560 (0%)

Iron ore concentrate 984 272 980 782 0% 984 272 1 099 297 (10%)

Sales price, $/tonne Q1 2015 Q4 2014 Change,% Q1 2015 Q1 2014 Change,%

Coking coal concentrate, Vorkutaugol 64 76 (16%) 64 96 (33%)

Coking coal concentrate, PBS Coals n.a. n.a. n.a. n.a. 111 n.a.

Raw coking coal, Vorkutaugol 18 n.a. n.a. 18 57 (68%)

Steam coal, Vorkutaugol 21 28 (25%) 21 36 (42%)

Steam coal, PBS Coals n.a. n.a. n.a. n.a. 78 n.a.

Iron ore pellets 53 55 (4%) 53 107 (50%)

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Vorkutaugol (part of Severstal Resources)

 Coking coal concentrate sales volumes decreased 13% q/q to 1.27 mln tonnes (Q4 14: 1.47 mln tonnes) primarily as a result of short-term production disruptions due to severe weather conditions during the period.

 The Company expect more typical production volumes in Q2.

 Steam coal sales at Vorkutaugol increased 7% q/q reflecting seasonally strong domestic demand.

 The coking coal concentrate average selling price decline of 16% q/q is purely a function of the ca. 30% q/q RUB devaluation partially offset by another round of RUB-nominated price upgrades by the Company, which took place in the second half of Q1.

Page 42 Vorkutaugol coking coal concentrate

sales volumes Vorkutaugol average selling price

dynamics, US$/t

Moscow St. Petersburg

ROM coal production

2, 760 3,396 3, 302 2, 465 2, 327 2, 538 _4,030 3, 756 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 R OM c o al p ro d u ction , kt 172 145 152 ₁₄₃ 120 120 119 117 113 101 102 ₉₆ 93 94 76 64 0 20 40 60 80 100 120 140 160 180 200 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Co ki n g c o al p ri ce , US$ /t

Hard coking coal benchmark (FOB Australia) Vorkutaugol ASP

434 ₃₇₄ 273 374 1,037 898 920 898 0 200 400 600 800 1,000 1,200 1,400 1,600 Q4 14 Q1 15 Q1 14 Q1 15 Co ki n g c o al c o n ce n tr ate sal e s vo lu m e s, kt

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Karelsky Okatysh (part of Severstal Resources)

 Iron ore pellets sales declined 6% q/q to 2.58 mln tonnes (Q4 14: 2.75 mln tonnes). Sales volumes to external customers on the domestic market remained solid on restocking activity.

 Moreover, inventories of pellets at CherMk were returned to more normal levels on the back of increased internal procurement of pellets q/q.

 Prices for iron ore pellets at Karelskiy Okatysh decreased only 4% q/q.

Page 43

Iron ore pellets sales volumes Karelsky Okatysh pellets export

structure, Q1 2015 Karelsky Okatysh average selling price (ASP)

dynamics, US$/t 127 134 135 ₁₂₁ 103 90 74 62 112 93 108 107 89 73 55 53 0 20 40 60 80 100 120 140 160 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 US $/t

Iron ore fines (CFR China) Karelsky Okatysh ASP

56% 26%

18%

Europe Middle East Others

1,559 _1,364 _1,483 _1,364 1,195 1,213 1,099 1,213 0 500 1,000 1,500 2,000 2,500 3,000 Q4 14 Q1 15 Q1 14 Q1 15 Ir o n o re p e lle ts sal e s vo lu m e s, k t

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Olkon (part of Severstal Resources)

 Iron ore concentrate sales volumes remained broadly flat q/q.

 At the same time, sharp RUB devaluation supported profitability at Olkon, resulting in higher q/q sales volumes to external customers.

 As a result of Severstal’s successful efforts to increase RUB-nominated prices since the beginning of the year, the Company has been able to partially mitigate the 15% q/q decline in the global iron ore benchmark as well as the negative impact of RUB devaluation. USD-nominated average selling prices for iron ore concentrate decreased 11% q/q.

Page 44 Iron ore concentrate sales volumes

Olkon average selling price (ASP) dynamics, US$/t 127 134 135 121 103 90 74 62 79 63 77 70 63 49 36 ₃₂ 0 20 40 60 80 100 120 140 160 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 US $/t

Iron ore fines (CFR China) Olkon ASP

24 115 45 115 957 869 1,054 869 0 200 400 600 800 1,000 1,200 Q4 14 Q1 15 Q1 14 Q1 15 Ir o n o re c o n ce n tr ate sal e s volum e s, kt

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Disclaimer

These materials are confidential and have been prepared by OAO Severstal (Severstal) solely for your information and may not be reproduced, retransmitted or further distributed to any other person or published, in whole or in part, for any other purpose.

These materials may contain projections and other forward-looking statements regarding future events or the future financial performance of Severstal. You can identify forward-looking statements by terms such as “expect,” “believe,” “estimate,” “intend,” “will,” “could,” “may” or “might”, or other similar expressions. Severstal cautions you that these statements are only predictions and that actual events or results may differ materially. Severstal will not update these statements to reflect events and circumstances occurring after the date hereof. Factors that could cause the actual results to differ materially from those contained in projections or forward-looking statements of Severstal may include, among others, general economic and competitive environment conditions in the markets in which Severstal operates, market change in the steel and mining industries, as well as many other risks affecting Severstal and its operations.

These materials do not constitute or form part of any advertisement of securities, any offer or invitation to sell or issue or any solicitation of any offer to purchase or subscribe for, any securities of Severstal in any jurisdiction, nor shall they or any part of them nor the fact of their presentation, communication or distribution form the basis of, or be relied on in connection with, any contract or investment decision.

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Corporate Presentation. May 2015