Severstal amends the dividend policy

Severstal's Board of Directors approves amendment

to the dividend policy

April, 16, 2018, Moscow - The Board of Directors of PAO Severstal (MICEX-RTS: CHMF; LSE: SVST), one of the world's leading vertically integrated steel and steel-related mining companies, has approved an amendment to the Group's dividend policy.

The new policy provides for annual payment in the form of dividends of 100% of the Group's (Severstal and its subsidiaries) Free Cash Flow for the respective reporting period as long as the Net debt/EBITDA ratio remains below 1.0х. Free Cash Flow is determined based on the Group's consolidated financial statements prepared in accordance with International Financial Reporting Standards. The Company reserves the right to make adjustments to reflect seasonal fluctuations in working capital.

Should the Net debt/EBITDA ratio fall below 0.5х, the amount paid out in dividends could exceed 100% of free cash flow for the respective reporting period.

If the net debt/EBITDA ratio is higher than 1.0х, the Company will revert to a policy of paying dividends on a quarterly basis, in an average amount equivalent to 50% of Free Cash Flow for the respective reporting period, until such time as the Net debt/EBITDA ratio returns to 1.0х or below.

Alexander Shevelev, Chief Executive Officer of Severstal, said:

"Severstal has been paying up to 100% of Free Cash Flow in dividends to shareholders for quite. The new dividend policy formalizes this practice and reflects our commitment to maximizing value for Severstal's shareholders. Severstal has low debt, a smart approach to investments and one of the highest dividend yields in Russia. This makes the Company a highly attractive investment proposition at any point of the steel industry cycle. Our internal target is to maintain Net debt/EBITDA in the range of 0.5x - 1.0x to support stable dividend payments".

For further information, please contact:

Evgeny Belov

T: +7 (495) 926-77-66

evgenii.belov@severstal.com

Severstal Public Relations

Anastasia Mishanina

T: +7 (495) 926-77-66

anastasia.mishanina@severstal.com

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PАО Severstal is one of the world's leading vertically-integrated steel and steel related mining companies, with assets in Russia, Latvia and Poland. Severstal is listed on RTS and MICEX and the company's GDRs are traded on the LSE. Severstal reported revenue of $7,848 million and EBITDA of $2,577 million in 2017. Severstal's crude steel production in 2017 reached 11.7 million tonnes. www.severstal.com