Severstal announces 2022 capital investment programme

Severstal plans to invest $1,600 mln in 2022, focusing on a key areas of the Company's strategy, namely, excellent customer experience, cost leadership and new opportunities. It implies с. 38% yoy growth comparing to 2021 (CAPEX in 2021 was $1,157 mln).

Thus, new Severstal's 2022 capital investment programme includes:

• $878 mln to be invested in various development projects (including $336 mln to projects that will also improve environmental and climate protection performance);
• $356 mln in maintenance;
• $151 mln in capital overburden;
• $137 mln will be allocated to investments in IT and digital projects, including completion of SAP S/4 HANA project, the automation of supply chain operations and production process as well as to a wide list of IT projects aimed at quality improvement;
• $78 mln will be spent to industrial safety system improvements such as reconstruction of the fire safety system in the hot-rolling shop in line with the requirements of the best available technologies; and ecology and environmental projects such as water treatment, automatic atmospheric emissions monitoring; installation of electrofilters in sinter and crude steel production;

We increased our guidance for total investments in 2022 comparing to last forecast published at the Capital Markets Day by $300 mln. Main factors of growth:

• -$101 mln: Vorkutaugol disposal
• +$150 mln: new projects;
• +$115 mln: unspent CAPEX planned to 2021, reallocated to 2022 financial year;
• +$27 mln: partially rescheduling of preparatory works for BF5 modernization;
• +$20 mln: increase in capital overburden.
• +$89 mln: costs increase for previously guided projects due to inflation and other factors

More details will be published at our Capital Markets in June 2022.

All of these amounts are subject to adjustments dependent on FX changes. The majority of the Company's expenditure in 2022 will be in rubles.

Russian Steel division

Investments in Severstal's Russian Steel division in 2022 will totally amount to $1,123 mln: $675 mln will be allocated to development projects and $246 mln to maintenance. The most important projects are redesigned 13 mln tonnes crude steel capacities project with new technical solutions, long mill 170, 100 MW combined heat and power plant with electric air-blowing station, modernization of crude benzol rectification department, technical modernization of Hot-dip aluminizing continuous line, as well as preparatory works for BF5 modernization.

Resources division

Investments in 2022 will amount to $503 mln: $203 mln of which will be used to develop production. One of the most important development projects will be the main phase of construction of the Cyclic-flow technology complex at Karelsky Okatysh, development of the Pechegubsky field at the Olkon, Yakovlevsky mine and Karelsky Okatysh ramp up.

Alexey Kulichenko, CFO of Severstal, commented:

"We continue to implement our large-scale transformation programme, to ensure our global leadership in the cost of production, create a unique solutions for our customers and improve quality of our products. CAPEX programme 2022 includes very important development projects that will help us to increase our steel production volumes and strengthen Severstal's position in a global market. As a result of continuous monitoring of new opportunities we added some new projects which will help us to increase steel production volumes and improve our environmental performance."

For further information, please contact:

Severstal Investor Relations

Vladimir Zaluzhsky, Nikita Klimantov

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

vladimir.zaluzhsky@severstal.com; na.klimantov@severstal.com

Severstal Public Relations

Anastasia Mishanina

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

anastasia.mishanina@severstal.com