Investment case
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 Investment case 5. Focus on shareholder returns +34.3% ALROSA Luxury segment¹ +85.3% Accumulated total shareholder return in USD post IPO in 2013, % 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. Oct-2013 Oct-2014 Oct-2015 Oct-2016 Oct-2017 Oct-2018 Oct-2019 Oct-2020