Tmk · RUS:TRMK
Tmk — Q1 2015 Earnings Presentation
19 slides from Tmk's earnings presentation, 2015
Slide 1: TMK Financial Presentation 1Q 2015 IFRS Results
PROPRIETARY & CONFIDENTIAL TMK Financial Presentation 1Q 2015 IFRS Results
Slide 2: Disclaimer
Disclaimer No representation or warranty (express or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein and, accordingly, none of the Company, or any of its shareholders or subsidiaries or any of such person's offic
Slide 3: 1Q 2015 vs 4Q 2014 Summary Financial Highlights
1Q 2015 vs 4Q 2014 Summary Financial Highlights Sales decreased QoQ mainly due to the lower volumes across Revenue fell QoQ as a result of lower pipe sales and a all pipe segments negative effect of currency translation -19% QoQ -24% QoQ 1,250 1,600 1,000 1,200 Thousand tonnes U.S.$ mln 750 1,237 80
Slide 4: 1Q 2015 vs 1Q 2014 Summary Financial Highlights
1Q 2015 vs 1Q 2014 Summary Financial Highlights Sales declined YoY mostly as a result of lower Revenue fell YoY mainly as a result of a negative volumes of OCTG and industrial pipe effect of currency translation -2% YoY -23% YoY 1,200 1,500 1,200 900 Thousand tonnes U.S.$ mln 900 600 1,466 1,026 1,0
Slide 5: Recent Developments
Recent Developments Contracts awarded In March 2015, TMK and Gazprom Burenie, one of Russia’s largest drilling companies, signed a strategic three-year contract, under which TMK acts as a leading supplier of drill pipe to the company. Launching new production In March 2015, TMK launched producti
Slide 6: Russian Market Overview
Russian Market Overview Growing oil drilling market in Russia Key considerations 12 In 1Q2015, the Russian pipe market decreased by 15% 11 compared to the prior quarter, mainly as a result of stock 10 Non-Energy adjustments made by the majority of consumers on the 9 back of uncertain economic situ
Slide 7: U.S. Market Overview
U.S. Market Overview Drop in rig count followed drop in oil prices Key Considerations Oil Gas Crude Oil WTI Spot 2,400 120 In 1Q2015, drilling activity both for oil and natural gas was significantly affected by the drop in energy commodity prices. Crude Oil Price ($/Bbl) 2,000 100 According to Bak
Slide 8: 1Q 2015 Sales by Division and Group of Product
1Q 2015 vs 4Q 2014 Sales by Division and Group of Product Sales by Division 1,000 -16% Russian division sales decreased QoQ mainly due to lower 800 industrial and line pipe volumes. Thousand tonnes 600 American division sales fell QoQ due to lower OCTG and line pipe volumes. 912 400 770 -34% E
Slide 9: 1Q 2015 Revenue by Division
1Q 2015 vs 4Q 2014 Revenue by Division Revenue Revenue per Tonne* -21% 1,000 2,000 0.1% 800 1,600 -5% U.S.$ / tonne -7% U.S.$ mln 600 -34% 1,200 948 1,775 1,778 400 800 748 1,240 1,180 492 1,040 971 200 -2% 400 327 60 59 0 0 Russia America Europe Russia America Europe 4Q2014 1Q2015 4Q2014 1Q2015 * R
Slide 10: 1Q 2015 Adjusted EBITDA by Division
1Q 2015 vs 4Q 2014 Adjusted EBITDA by Division Adjusted EBITDA Adjusted EBITDA Margin 180 -11% 21% 19% 20% 18% 17% 150 15% 120 12% U.S.$ mln 12% 11% % 90 162 9% -52% 9% 145 60 6% 59 83% 30 3% 28 6 12 0 0% Russia America Europe Russia America Europe 4Q2014 1Q2015 4Q2014 1Q2015 Russian division Adju
Slide 11: 1Q 2014 Sales by Division and Group of Product
1Q 2015 vs 1Q 2014 Sales by Division and Group of Product Sales by Division 840 6% 720 Russian division sales increased YoY mostly due to higher LDP volumes, as well as stronger sales of seamless line pipe. Thousand tonnes 600 480 American division sales fell YoY due to lower volumes across all
Slide 12: 1Q 2014 Revenue by Division
1Q 2015 vs 1Q 2014 Revenue by Division Revenue Revenue per Tonne* -24% 1,000 2,000 7% 800 1,600 -28% -9% U.S.$ / tonne U.S.$ mln 600 1,200 981 -22% 1,778 400 800 1,665 748 1,297 1,350 1,180 971 200 418 -12% 400 327 67 59 0 0 Russia America Europe Russia America Europe 1Q2014 1Q2015 1Q2014 1Q2015 * R
Slide 13: 1Q 2014 Adjusted EBITDA by Division
1Q 2015 vs 1Q 2014 Adjusted EBITDA by Division Adjusted EBITDA Adjusted EBITDA Margin -5% 160 21% 20% 19% 18% 16% 120 15% U.S.$ mln 12% 11% % 80 153 145 9% 9% 6% 15% 6% 40 56% 3% 24 28 7 12 0 0% Russia America Europe Russia America Europe 1Q2014 1Q2015 1Q2014 1Q2015 Russian division Adjusted EBITD
Slide 14: Seamless – Core to Profitability
Seamless – Core to Profitability U.S.$ mln QoQ, YoY, 1Q 2015 Gross Profit Breakdown 1Q 2015 (unless stated otherwise) % % Other Volumes- Pipe, kt 630 -10% -2% operations 2% Revenue 697 -21% -29% Welded SEAMLESS 23% Gross Profit 189 -7% -20% Margin, % 27% Avg Revenue / Tonne (U.S.$) 1,107 -12% -28% S
Slide 15: Working Capital Position as of March 31, 2015
Working Capital Position as of March 31, 2015 Inventories (Days) Accounts Payable (Days) 120 100 105 97 96 100 91 90 89 75 77 80 73 73 64 66 80 60 60 40 40 20 20 0 0 2010 2011 2012 2013 2014 1Q 2015 2010 2011 2012 2013 2014 1Q 2015 Accounts Receivable (Days) Cash Conversion Cycle (Days) 80 100 97 69
Slide 16: Debt Maturity Profile as of March 31, 2015
Debt Maturity Profile as of March 31, 2015 As of March 31, 2015, total financial 700 debt amounted to U.S.$3,087 mln 600 84% of total financial debt is long- term 500 Weighted average nominal interest 400 rate totalled 9.04% U.S.$ mln 688 300 As of March 31, 2015, borrowings 527 500 with a f
Slide 17: Debt Profile as of March 31, 2015
Debt Profile as of March 31, 2015 More than U.S.$600 mln of undrawn committed credit lines to Debt Breakdown by Source of Borrowings cover short-term debt 600 Utilized Credit Facilities 500 Unutilized Credit Facilities Bonds 33% 400 U.S.$ mln 300 200 Bank Loans 67% 100 0 Year 2015 Year 2016 Year 201
Slide 18: Outlook
Outlook For the full year of 2015, TMK expects demand for LD pipe to be the main driver in the Russian pipe market offsetting lower consumption in other market segments. The Company expects the Russian OCTG pipe market to remain relatively stable throughout 2015 and TMK’s OCTG market share in Russia
Slide 19: Thank You
Thank You TMK Investor Relations 40/2a, Pokrovka Street, Moscow, 105062, Russia +7 (495) 775-7600 IR@tmk-group.com 19