Producing iron ore pellets for over 35

years

1 H 2 0 1 4 I N T E R I M R E S U LT S

D I S C L A I M E R

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I N T R O D U C T I O N

M I C H A E L A B R A H A M S C B E D L , C H A I R M A N

3

1 H 2 0 1 4 F I N A N C I A L R E S U LT S

C H R I S M AW E , C F O

4

1 H 2 0 1 4 : S O L I D O P E R AT I O N A L A N D F I N A N C I A L

P E R F O R M A N C E

US$M (unless otherwise stated) 1H 2014 1H 2013 Change 2013

Pellet production (000’ tonnes) 5,369 5,246 2% 10,813

Pellet sales (000’ tonnes) 5,498 5,324 3% 10,689

Revenue 759 775 (2%) 1,581

C1 cost (per tonne) 47.8 61.8 (23%) 59.8

EBITDA 321 244 32% 506

Profit for the period 208 126 65% 264

Diluted eps 34.7 21.4 62% 44.7

Dividend – ordinary & special (cents) 3.3 3.3 - 9.9

Net cash flow from operating activities 138 83 66% 233

Capital investment 132 147 (10%) 278

Net debt 694 566 23% 639

Net debt to LTM EBITDA 1.2x 1.4x (14%) 1.3x

Shareholders’ funds 1,155 1,595 (28%) 1,713

― Increase in production & sales volumes

― Market price declines partly mitigated by higher

pellet premiums & improved marketing performance

― Lower costs due to efficiency improvements & UAH

devaluation

― EBITDA reflects a US$47M one-off non-cash gain

― Profit for the period increased 65%, diluted EPS up

62%

― Strong cash flow from operating activities, up 66%

― Net debt reflects increase in working capital

― Prudent balance sheet metrics, sufficient liquidity

― Shareholders’ equity reflects devaluation

5

R E V E N U E 1 H 2 0 1 4 V S . 1 H 2 0 1 3U

S$M

775

140

17 22

6029

30

759

0

100

200

300

400

500

600

700

800

900

Revenue, 1H 2013 Global iron oreprices

Freight cost toChina

Volume, own ore Pellet premium Pricing terms &mix

CFR sales &other

Revenue, 1H 2014

6

E B I T D A 1 H 2 0 1 4 V S . 1 H 2 0 1 3

US

$M

– Not including FX losses on VAT & prepaid CPT of US$139M or non- cash FX losses on other assets of US$573M, all of which are recorded in reserves

244 218 321

6

37

40

16

47

68

1

0

50

100

150

200

250

300

350

EBITDA, 1H2013

Sales price Volume, own ore C1 / constantcurrency

Other costs /constantcurrency

EBITDA,constantcurrency

C1 / forex effect Other costs /forex effect

Forex one-offnon-cash gain

EBITDA, 1H2014

7

L O W E R C O S T S D U E TO F Y M & D E VA L U AT I O N

― US$14 decline in C1 costs to US$47.8/t

― US$6.8/t due to FYM ore & higher volumes (constant currency)

― US$7.2/t due to UAH 29% devaluation, 55% of costs in UAH

― 8% increase in electricity tariffs

― 1H 2014 royalties US$1.45 per tonne

C1 cash cost evolution

61.8

47.8

30

35

40

45

50

55

60

65

1H 2013 1H 2014

Reported C1 Cost Constant Currency C1 Cost

7.2

US

$ C

1 C

ash

cost

Breakdown of C1 cash cost

Electricity, 25%

Materials, 16%

Gas, 15%Fuel, 11%

Personnel costs, 10%

Grinding media, 7%

Maintenance & consumables, 6%

Spare parts, 4%

Explosives, 3% Royalties, 3%

30 June 2014 1 January 2014 Change Avg. 1H 2014 Avg. 1H 2013 Change

UAH vs. US dollar 11.823 7.993 (47.9%) 10.276 7.993 (28.6%)

8

C A S H F L O W 1 H 2 0 1 4 V S . 1 H 2 0 1 3

US$M (unless otherwise stated) 1H 2014 1H 2013 Change 2013

EBITDA 321 244 32% 506

FX non-cash gain (47) - - (1)

Interest paid (28) (28) - (57)

Tax paid (45) (63) (29%) (108)

Working capital movements & other (63) (70) (10%) (107)

Net cash flow from operating activities

138 83 66% 233

Capex (132) (147) (10%) (278)

Cash balance at end of period 359 446 (20%) 390

Net debt (694) (566) 23% (639)

Net debt to LTM EBITDA 1.2x 1.4x (14%) 1.3x

― EBITDA increased by 32% to US$321M

― Working capital reflects stocking of FPM lean ore & concentrate

― 5 VAT repayments received in 1H 2014

― % of prepaid CPT declined from 50% in January to 25% in June

― VAT bonds received 2 July c. US$115M

― US$89M corporate profit tax (CPT) balance at 30 June 2014

― Growth projects near completion

― Prudent credit metrics

9

C A P E X : O N T R A C K TO I N C R E A S E V O L U M E & Q U A L I T Y

Delivering benefits to consumption norms

Electricity consumption (kWh/t)

FPM

Sustaining

US$11.4M

FPM Capacity

Upgrade

US$28.3M

FPM Mine

Life Extension

US$4.6M

FYM Mining

and

Infrastructure

US$36.8M

FYM ph. II

(concentrator)

US$6.4M

FBM,

Logistics and

Other

US$17.7M

Expenditure reduced reflecting large past

investments

Delivery of 1 Metso Medium & Fine Crushing

Line / 3 in process

Beneficiation plant sections upgrade

2 million m³ of overburden removed

Mining: 6 milion m³ of overburden removed

Mine infrastructure : service centre and mine

working complex complete

Order for LLI placed with Weir minerals

(HPGR’s)

First pilings for concentrator building

New 300 railcars ordered (will bring fleet to

2,500 units)

Design and engineering works continue at

Belanovo

FPM Quality

Upgrade

US$26.5M

New flotation unit 2 commissioned in March

2014 / new flotation unit 3 expected to be

completed in Q3

Design works on press filtration plant

8

10

12

14

16

18

20

1H 2

011

2H 2

011

1H 2

012

2H 2

012

1H 2

013

2H 2

013

1H 2

014

Gas (m3/t)

140

150

160

170

180

190

1H 2

011

2H 2

011

1H 2

012

2H 2

012

1H 2

013

2H 2

013

1H 2

014

0

1

2

3

4

5

6

1H 2

011

2H 2

011

1H 2

012

2H 2

012

1H 2

013

2H 2

013

1H 2

014

Diesel (t/th.t)

3

4

5

6

1H 2

011

2H 2

011

1H 2

012

2H 2

012

1H 2

013

2H 2

013

1H 2

014

Grinding bodies (t/th.t)

10

Credit Metrics – High Liquidity

L I Q U I D I T Y A N D F I N A N C I N G 1 H 2 0 1 4 V S . 1 H 2 0 1 3

– Increase in net debt due to higher working capital

– Secured long dated US$40M ECA financing, avg maturity of

5.6 years

– Undrawn committed PXF of US$350M, maturing 2018

– Diversified sources of funding (bond, PXF, ECA/leasing)

– No material unfunded debt repayments in 2014 & 2015

Pro forma Gross Debt Maturity Profile at 30 June 20141

US

$M

1. Ferrexpo secured a PXF facility in 2013 for US$350M maturing in 2018. This facility will be drawn in August 2014 to repay a US$420M bank

facility which commences a two year amortization period in September 2014 maturing on 31 August 2016.

0

100

200

300

400

500

600

2014 2015 2016 2017 2018 2019 2020 2021

PXF's ECA Leasing Bond

Net debt Gross debt

Opening net debt - 1 January 2014 (639) (1,029)

Operating cash flow 213 -

Capital expenditure (132) -

Income tax paid (45) -

Net interest paid (28) -

2013 final & special dividend (58) -

Debt facilities repaid - 15

New debt facilities - (40)

Other (5) 1

Closing net debt - 30 June 2014 (694) (1,053)

US

$M

Pro forma Liquidity Headroom at 30 June 2014

0

100

200

300

400

500

Jan-13 Jan-14

Cash

June 2014June 2013

11

C O N C L U S I O N TO F I N A N C I A L R E V I E W

Market weakness mitigated by:

• Higher volume

• Improved pellet premiums

• Index based pricing

• Improved efficiency

• Currency devaluation

Solid financial results

Growth projects remain on track

Devaluation impacted carrying value of VAT & prepaid CPT

Maintained healthy credit metrics

12

B U S I N E S S U P D AT E

K O S T YA N T I N Z H E VA G O

M A R K E T I N G & L O G I S T I C S

I R O N O R E P E L L E T S T R A D I N G AT A P R E M I U M

– Pellet prices reflect:

lack of material new supply,

structure of pellet cost curve,

demand for higher grade product to offset increase in lower grade fines

– Ferrexpo realised net FOB price in 1H 2014 -9% vs -19% for 62% Fe fines

50%

60%

70%

80%

90%

100%

110%

% c

hang

e in

iron

ore

pric

e (r

ebas

ed to

Jan

20

13)

Iron ore fines (62% Fe) Iron ore fines (58% Fe) Metal Bulletin Pellet Index (65% Fe)

15

M A R K E T I N G E X PA N S I O N W I T H F O C U S

O N C R I S I S R E S I S TA N T C L I E N T S

– Not reliant on any one region for demand, optionality to divert volume to strongest regional market

– In 1H 2014: continued to expand long term contract volumes into Japan & Western Europe

– As of 1 January 2014, all long term contracts based on an index with increased pricing transparency

– Freight to Far East in line with C3

Sales Volume by Contract Type

Diversified sales portfolio to high quality steel mills

Sales Volume by Country

0% 20% 40% 60% 80% 100%

Monthly index

Spot fixed

Lagging 3 month index

Current quarter index

Quarterly negotiated

1H 2014 0% 0% 1H 2013 0% 0%

0%

10%

20%

30%

40%

50%

60%

Eastern &Central Europe

China North East Asia WesternEurope

Turkey

1H 2014 1H 2013

16

Pelletising Cost Curve

1. Only reflects costs incurred at the pelletising stage of the production process (i.e. does not include mining, concentration and beneficiation costs) and as such should not be

considered as a cost curve for total cost of pellets production. Site costs are defined as cash operating costs plus share of local overhead and sustaining capital

Source: CRU, January 20130

14

28

42

56

70

US

c/dm

tu

Ferrexpo

0.2 Bnt

ENRC

Metalloinvest

IOC

Metinvest Metinvest

LKABLKABVale

ValeSamarco

Vale

CLIFFS

I N D U S T RY P E L L E T I S I N G C O S T C U RV E :

F E R R E X P O I S W E L L P L A C E D

35% China

10% Russia/Kazak10% Other

7% Vale

7% India

5% Ferrexpo

5% LKAB

5% Cliffs

5%Iran

4% Samarco3% IOC

2% ArcelorM2% GIIC

– Ferrexpo is a significant seaborne supplier

– Ferrexpo is competitively placed on pellet cost curve

– Pellet cost curve is well supported at higher end

– Geographically Ferrexpo is well placed to supply 4/5 major importing regions

Pellet Suppliers

Supply & Demand

Source: Wood Mackenzie, Macquarie Research, June 2014

Source: Customs Statistics, Macquarie Research, June 2014

Source: CRU1

17

O P E R AT I O N S & I N V E S T M E N T S

18

S T R O N G P E R F O R M A N C E F R O M F P M

– Significant increase in processing yields

– Mined ore volumes in 1H 2014 -4.7%

– Pellet output in 1H 2014 +2.5%

– Major repair & maintenance programme, whilst maintaining day to day

activities

– Commissioning of flotation 2

– Allows more concentrate to be floated, increasing 65% Fe pellet

production

– 2H 2014: commissioning of flotation 3, upgrading of flotation 1

– Commissioning of flotation section 3 will allow FPM to process tails

from flotation 1 & 2, increasing concentrate volumes

– Increase to 100% 65% Fe pellet will open up new markets

2014 production exit rate: 12 million tonnes per annum

2015 production exit rate: 100% 65% Fe pelletsNew flotation section number 2, May 2014

19

F Y M P I T M AY 2 0 1 4

20

F Y M P R O D U C I N G , L O W E R I N G C O S T S

& O P E R AT I O N A L R I S K P R O F I L E

– FYM ore and higher volumes reduced C1 costs by US$6.8/t in 1H 2014 vs. 1H 2013

– Lower operational risk through two operating mines

10%

20%

30%

40%

Jan-

13

Feb

-13

Mar

-13

Apr

-13

May

-13

Jun-

13

Jul-1

3

Aug

-13

Sep

-13

Oct

-13

Nov

-13

Dec

-13

Jan-

14

Feb

-14

Mar

-14

Apr

-14

May

-14

Jun-

14

Conc Pellets

% of FYM Concentrate & pellet production of total Group production

20%

25%

30%

35%

40%

45%

50%

Dec

-12

Jan-

13

Feb

-13

Mar

-13

Apr

-13

May

-13

Jun-

13

Jul-1

3

Aug

-13

Sep

-13

Oct

-13

Nov

-13

Dec

-13

Jan-

14

Feb

-14

Mar

-14

Apr

-14

May

-14

Jun-

14

Yield (pellets/ore) Yield (concentrate/ore)

FYM ore

35%

40%

45%

50%

55%

60%

Jan-

13

Feb

-13

Mar

-13

Apr

-13

May

-13

Jun-

13

Jul-1

3

Aug

-13

Sep

-13

Oct

-13

Nov

-13

Dec

-13

Jan-

14

Feb

-14

Mar

-14

Apr

-14

May

-14

Jun-

14

Proportion of 65%Fe production from own ore increasing

2.5

3

3.5

4

4.5

Jan-

11

Mar

-11

May

-11

Jul-1

1

Sep

-11

Nov

-11

Jan-

12

Mar

-12

May

-12

Jul-1

2

Sep

-12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-1

3

Sep

-13

Nov

-13

Jan-

14

Mar

-14

May

-14

Tonnes of ore per tonne of pellets

21

F Y M A W O R L D C L A S S O P E R AT I O N , C A N A D D F U RT H E R

TO N N A G E

Pilings for concentrator?? Main workshop service bay

Wash centre

Pilings for concentrator

FYM offices

22

U K R A I N E

23

U K R A I N E

Uncertain operating environment but progress has been made:

• Introduction of flexible exchange rate

• VAT refunds reintroduced

• VAT bonds issued for VAT accumulated prior to 2014

But still some difficulties:

• Prepaid corporate profit tax

• Royalties

• Inflation

Strong international financial support

• IMF US$17 billion loan package

The Board continues to monitor the situation closely

24

O U T L O O K

F E R R E X P O A W O R L D C L A S S

I R O N O R E P E L L E T P R O D U C E R

Outlook:

Iron ore price lower due to increased supply but market remains strong for pellets

Costs have benefitted from FYM investment and higher volumes as well as UAH devaluation

Future inflation could offset devaluation impact

Projects on track to deliver 12 million tonnes of pellets per annum and to increase average pellet quality

To date, operations have not been directly impacted by conflict in the East but economy remains fragile

Committed to deliver value to all stakeholders

26

T H A N K Y O U

27

A P P E N D I X

28

G R O U P VAT R E C O N C I L I AT I O N

321

185

115

103

30

3

0

50

100

150

200

250

300

350

1 January 2014 Devaluation loss Anticipated discount onbonds

Net VAT recovered in 1H2014

Net VAT recoverable asof 30 June 2014

1st VAT bonds receivedin July

US

$M

29

I M PA C T O F U A H D E VA L U AT I O N O N F I N A N C I A L

S TAT E M E N T S

US$M 1H 2014

Revaluation of fixed assets (471.7)

Revaluation of gross VAT receivable (103.1)

Revaluation of VAT discount 19.0

Revaluation of prepaid corporate profit tax (35.7)

Revaluation of other net assets (120.5)

Total exchange losses on translating foreign operations (712.0)

Operating foreign exchange gains 47.4

Non-operating foreign exchange losses (3.0)

Total reflected in the income statement 44.4

Total opex benefits per tonne 10.4

30

31

Ferrexpo

Group Investor Relations

Ingrid McMahon – i.mcmahon@ferrexpo.ch

+44 207 389 8304 www.ferrexpo.com