Investment case

1.

Investment case
1.
Global leader in diamond mining
ALROSA is the world’s largest producer of diamonds with a 28% share of the global market.
Rough diamond mining in 2020, m ct
30
ALROSA
Company 1
Company 2
Company 3
Company 4
Others
Source: companies’ reports, Kimberley Process
2.
The largest owner of diamond resources globally
ALROSA boasts 1,064 m ct in resources, including 628 m ct of reserves. Given the limited global resource base, the company has sufficient rough diamond resources to sustain
production for 30 years.
Resources of the largest rough diamond miners, m ct
628
ALROSA
Top 3 competitors
246
494
1

2.

Investment case
3. A company with best in class operational standards and a focus on best manufacturing practices
A culture of continuous improvement
Highly motivated workforce
Digital strategy to attain operational excellence and safety
Large-scale improvements in operational efficiency
An experienced management team, world-class experts
Industry leadership in profitability and free cash flow generation
Average profitability of about 50%, 2х higher than the industry average
A robust free cash flow generation through the cycle, cash returned to shareholders
4. a transparent financial policy and industry highest credit ratings
0.4х net debt / EBITDA in 2020
Investment-grade ratings from all the key rating agencies
TOP3 the most creditworthy companies in Russia according to S&P Global Ratings
5. Focus on shareholder returns
Leadership among global rough diamond producers as regards growth of total shareholder return since 2013
Up to 100% of cash flow paid as dividends semi-annually
Average dividend yield at 11%
6. Sustainable business with high-quality corporate governance practices
Compliance with high corporate governance standards as a strategic priority
The National Corporate Governance Rating confirmed at 8 (Advanced Corporate Governance Practices) by the Russian Institute of Directors in 2020
Adherence to sustainability principles and international standards of corporate social responsibility: ALROSA features in the ratings of MSCI ESG, Sustainalytics, CDP, S&P
Global CSA, FTSE4Good and WWF Russia, and contributes towards the United Nations Sustainable Development Goals
2

3.

Investment case
5. Focus on shareholder returns
Accumulated total shareholder return in USD post IPO in 2013, %
210%
+85.3%
Luxury segment¹
+34.3%
ALROSA
(7.9)%
Mining companies, including other
rough diamond producers²
(24.1)%
MICEX Index
170%
130%
90%
50%
10%
окт-2013
Oct-2013
окт-2014
Oct-2014
окт-2015
Oct-2015
окт-2016
Oct-2016
окт-2017
Oct-2017
окт-2018
Oct-2018
окт-2019
Oct-2019
окт-2020
Oct-2020
Source: Bloomberg as of 15 October 2020.
1. Luxury goods manufacturers: LVMH, Hermès, Richemont, Kering, Swatch, Prada, Tiffany, Tapestry, Burberry, Ralph Lauren, Capri, Moncler, Tod‘s.
2. Mining companies, including other rough diamond producers: Anglo American, Rio Tinto, BHP, Glencore, Vale, Gem Diamonds, Petra Diamonds, Lucara Diamond, Firestone Diamonds, Mountain Province Diamonds,
Stornoway Diamonds.
All indices are weighted by daily capitalisation.
3