June 5, 2019

Severstal to develop its own digital businesses

PAO Severstal, one of the world's leading vertically integrated steel and mining companies, has established a new unit that will be focused on the development of digital businesses. The team will be headed by Sergey Khabarov, previously investment director at Genome Ventures, an innovative human capital development business.

The new unit will be part of Severstal’s Business Development and Corporate Venture Projects department, which is headed by Andrey Laptev, and will focus on developing platform solutions and online products and services (such as market places) for end users of Severstal products. Over the past year, Severstal has already launched several pilots of digital businesses aimed at better understanding its customers and creating additional services and sales channels for its target consumer industries, including construction and building materials. Severstal will continue to maintain a cautious approach to investment, with investments in digital businesses initially amounting to several million dollars a year.

Andrey Laptev, Director of Business Development and Corporate Venture Projects at Severstal, said:

“We are convinced that the future of industry is for those companies that can learn to use innovative business models. Severstal has already developed significant internal expertise in creating services based on digital solutions, for example, our innovative online store. Now we will employ these skills to develop and incubate digital projects within Severstal that can eventually become independent businesses. Our focus will be on digital solutions that are directly related to our industry and those industries that consume our products, such as construction. This will also support the Company's marketing strategy.

“We expect that digital projects will offer additional services to Severstal’s clients, and, once these have become full-fledged businesses, will open up additional revenue streams to support Severstal’s ambitious goal of achieving 10-15% EBITDA growth annually.”

Notes:

Sergey Khabarov graduated from the Moscow Finance and Law Academy with a degree in Finance. He studied at the School of Business of the Open University of Great Britain under the Effective Manager program and at the Russian Academy of National Economy and Public Administration under the President of the Russian Federation under the Corporate Governance program. Previously, Sergey worked for Genome Ventures, Net Element (NETE: NASDAQ), Rocket Internet, Fastlane Ventures, Marsh and PriceWaterhouseCoopers. At Genome Ventures, he held the position of investment director, responsible for developing a portfolio of technology projects, internal incubation and organising collaboration with startups.