16 May 2016 10:34
MMC Norilsk Nickel / Miscellaneous - High PriorityMMC Norilsk Nickel: hosts Annual Strategy Day - NEW PLATFORM TO DELIVER ONASSETS MODERNIZATION 16-May-2016 / 10:34 CET/CESTDissemination of a Regulatory Announcement, transmitted by EquityStory.RS,LLC - a company of EQS Group AG.The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- NORILSK NICKEL HOSTS ANNUAL STRATEGY DAY - NEW PLATFORM TO DELIVER ONASSETS MODERNIZATION London, May 16, 2016 - MMC Norilsk Nickel (hereinafter, Norilsk Nickel orthe Company), the world's largest refined nickel and palladium producer,hosts today its annual strategy day. The management reports the mainresults of the completed strategic cycle of 2013-2015 and sets key goalsand priorities for the next strategic cycle of 2016-2018. In 2013-2015, a significant progress was achieved in transforming NorilskNickel into a world-class run organization, having built an efficientbusiness platform enabling full development of the Company's best-in-classmining assets. The Company has successfully rolled out stringent investmentgovernance discipline, refocused its asset portfolio on Tier-1 assets andexecuted on a large portion of non-core and non-Tier 1 asset disposals. Over the past 3 years Norilsk Nickel delivered: * 39% reduction of cash nickel-equivalent unit costs in USD terms;* USD 3 billion release of unproductive capital;* Optimization of mandatory capex to industry benchmark levels. Over the same period, despite extremely challenging commodity marketsNorilsk Nickel demonstrated a superior financial performance relative toits global peers, reporting one of the industry's lowest leverage levelsand highest profitability, while also being the only global mining majorgenerating positive total shareholder return. Having realized what the management considers as the 'quick wins', theCompany sets its priorities for the next three years with a focus onfurther downstream modernization, identification of growth opportunities inupstream and a major effort to advance with an improvement of itsenvironmental footprint. HSE - On Top of Strategic Priorities Norilsk Nickel continues to strive for making its production assets cleanand safe operations. An HSE strategy approved by the Board in 2014 hasalready resulted in a major progress in Health and Safety as independentlyverified by an international audit. Full elimination of workforcefatalities remains the key priority for the management. In 2016, the Company is planning to complete the first phase of itsenvironmental programme. The phased out shutdown of Nickel Plant is ontrack and scheduled for the full completion in October, that should resultin a significant reduction of overall SO2 emissions (by 15%) and emissionswithin the Norilsk city boundaries by 35%. The Company has also engaged into the second phase of the environmentalprogram, having launched active preparations for the construction of the'Sulfur project' with an ultimate goal to decrease the overall SO2emissions by 75% at the Polar Division. The Sulphur project design forNadezhda plant has been complete and approved by the Russia's regulatorybody (Rostechnadzor). Construction site preparations have started and oneof the leading engineering and industrial construction firms, SNC Lavalin,has been commissioned to prepare a detailed engineering project. New Configuration for Copper Stream A new reconfiguration concept for copper stream at Polar Division ispresented, that entails the transfer of converting and anode smeltingoperations from Copper Plant to Nadezhda Metallurgical Plant. Themodernization of Copper stream in such a way enables the transfer of themost polluting facilities of Copper plant from the city of Norilsk and fullutilization of the prospective Sulphur dioxide capturing facilities atNadezhda plant. Upstream Strategic Optionality and Investment Governance Update According to the current base case mine plan, mining volumes at Talnakhdeposit developed by Polar Division to grow from 14.8 mtpa to 18 mtpa overthe next decade. This mine output growth will secure stable and highlyprofitable metal production of Norilsk Nickel for the next several decades. In addition, the Company has identified a growth option for Norilsk-1deposit (South Cluster) that could potentially grow mine output to 6 mtpaby 2024. The Company will consider the potential development of the projectalso in a form of potential partnership. The feasibility study for theprоject has been commissioned and due for completion in 2H 2017. All-in CAPEX target for 2016-2018 is forecasted at USD 2 billion per annum,with the base investment program necessary to maintain stable production iscumulatively set at USD 4.4 billion over the period, with the remainderallocated for the completion of Bystrinsky project, the Phase-1 of Sulphurproject and, potentially, growth options. Progress on Bystrinsky Project The construction of Bystrinsky copper-gold project in Chita region is ontime and on budget with 45% completion rate as of May 2016 and thescheduled launch in 4Q 2017. De-risking of the project has progressed wellwith Norilsk Nickel having brought a minority equity investor from Chinaand signed a project financing facility for up to USD 800 million withSberbank. Balanced Model and Superior Shareholder Returns The Company remains committed to maintaining industry-leading dividendyield while protecting its balance sheet during the downturn in commoditymarkets. The new dividend targets, with a variable payout EBITDA ratio(ranging from 60% to 30%) depending on the Company's leverage, will beapplied to dividend distributions for 2016 onwards. The management isconfident that dividend flexibility is sufficient to sustain a balancedfinancial model of the Company, while maintaining its capital investmentprogram and social obligations. Commenting on the strategic update the Company's President Vladimir Potaninsaid, 'Since the adoption of a new corporate strategy in 2013 we have notonly delivered on the industry leading shareholder return, but also on ourcommitments to stakeholders, including our employees, communities and theRussian government. Over the last three years, we feel that operational and financial resultsachieved have been quite remarkable as Norilsk Nickel streamlined its assetportfolio, went through a major capex and opex optimization, release ofexcessive capital and rolled out a stringent investment governancediscipline. We are consistently delivering on all promises regarding the downstreamreconfiguration with upgraded Talnakh concentrator launched, Nickel Plantbeing decommissioned and Kola Division becoming a primary refinery hub. Our management team achievements rely heavily on its constant developmentand continuity. The Company runs a pool of talent, where we bring up youngmanagers, provide them with an opportunity to excel in high priority areasand entrust them with new responsibilities. In this regard, I would like tointroduce the promotions of Sergey Dubovitsky to Vice President, Strategy,and Vladimir Zhukov to Vice President, Investor Relations, both of whichwere leading the efforts in their respective areas of responsibility in theCompany since 2013. Norilsk Nickel has built an efficient operating platform over the lastthree years. Leveraging on this platform we are now to deliver on ourmodernization agenda with a major focus on improvement of Norilskenvironmental footprint. Our current upstream portfolio, which has beenrecently successfully stress-tested at spot commodity prices, provides asolid operation base for the next several decades, additionally we going tostudy new options for growth at our core operations of Polar division. We believe that our financial model is well balanced and we aim to continuedelivering industry leading returns to our shareholders.' Please find the Annual Strategy presentation here: http://www.nornik.ru/investoram/vyistupleniya-i-presentaczii and follow the webcast here: http://webcast.openbriefing.com/norilsk_nickel_capital_markets_day_2016/ For further information, please, contact: Media Relations: Investor Relations: Phone: +7 (495) 785 58 00 Phone: +7 (495) 786 83 20 Email: pr@nornik.ru Email: ir@nornik.ru ABOUT NORILSK NICKEL: Public Joint-Stock Company Mining and Metallurgical Company Norilsk Nickelis a diversified mining and metallurgical company, the world's largestproducer of refined nickel and palladium and a leading producer ofplatinum, cobalt, copper and rhodium. The Company also produces gold,silver, iridium, selenium, ruthenium and tellurium. The production units of Norilsk Nickel include Polar Division, located atthe Norilsk Industrial District on Taymir Peninsula, and Kola Mining andMetallurgical Company located on the Kola Peninsula in Russia as well asHarjavalta nickel refinery in Finland. Norilsk Nickel's shares are listed on the Moscow and on the Saint-Petersburg Stock Exchanges. Norilsk Nickel ADRs trade over the counter inthe US and on the London and Berlin Stock Exchanges. --------------------------------------------------------------------------- 16-May-2016 The EquityStory.RS, LLC Distribution Services include RegulatoryAnnouncements, Financial/Corporate News and Press Releases.Media archive at www.dgap.de/ukreg --------------------------------------------------------------------------- Language: English Company: MMC Norilsk Nickel 1 st Krasnogvardeysky av., 15 123100 Moscow Russia Internet: www.nornik.ru ISIN: US55315J1025 WKN: A140M9 Listed: Regulated Unofficial Market in Berlin, Dusseldorf, Munich, Stuttgart; Open Market in Frankfurt ; London, Nasdaq Category Code: MSCH TIDM: MNOD Sequence Number: 3160 Time of Receipt: 16-May-2016 / 10:34 CET/CEST End of Announcement EquityStory.RS, LLC News Service --------------------------------------------------------------------------- 463871 16-May-2016UK-Regulatory-announcement transmitted by DGAP - a service of EQS Group AG.The issuer is solely responsible for the content of this announcement.