Magnitogorsk Iron and Steel Works (MMK) took third place in the 2020 Value Creators ranking published by the international consulting company Boston Consulting Group (BCG). The ranking evaluates the world's leading companies by total shareholder return (TSR) generated over the past five years (from 2015-2019). MMK is the leader among Russian steel companies with a 40% TSR.
TSR takes into account the growth of a company's share price and dividend yield over a set period of time. This is an important indicator for investors, as it reflects the true bottom line for a company’s shareholders. MMK's TSR over the past five years was not only the highest among Russian steel companies, but third among all Russian companies and third among steel companies worldwide.
The 2020 Value Creators ranking is prepared by BCG, one of the world's largest consulting companies with a global network of more than 90 offices in 50 countries. The ranking's methodology is based on the results of an analysis of TSR indicators for 2,327 companies from around the world for the period from 2015-2019.
Assessing the high position of Russian steelmakers, including MMK, in the Value Creators ranking, Managing Director and Partner of BCG Moscow Dmitry Golovinski noted that it comes as no surprise: "The largest Russian mining and metallurgical companies have been continuously working to improve efficiency for many years and have launched large optimisation programmes."
Ensuring a high yield for investors is one of MMK's top priorities. Since November 2019, the Company has followed a dividend policy according to which the Company directs at least 100% of its free cash flow to dividends when net debt/EBITDA ratio is below 1.0x.
Currently, due to the COVID-19 pandemic, the decision to pay interim dividends for 2020 has been postponed until autumn of this year. However, as Victor Rashnikov, Chairman of the Board of Directors of MMK, emphasised in an address to shareholders, "the Board of Directors will return to discussions of the interim dividend once the crisis resolves and business activity on MMK Group’s key sales markets resumes.”