Slide 1: Financial Presentation 4Q and FY 2013 IFRS Results
PROPRIETARY & CONFIDENTIAL TMK Financial Presentation 4Q and FY 2013 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: 4Q Summary Financial Highlights
4Q Summary Financial Highlights Sales increased QoQ mainly due to the growth of Revenue increased QoQ mainly due to higher sales OCTG and line pipe sales in Russia in the Russian and American divisions 7% QoQ 6% QoQ 1,200 1,800 Thousand tonnes 900 1,500 U.S.$ mln 1,200 600 900 1,022 1,090 1,487 1,57
Slide 4: FY 2013 Summary Financial Highlights
FY 2013 Summary Financial Highlights Revenue declined YoY mainly due to lower sales of Sales increased YoY mainly due to higher volumes seamless pipe in the Russian division and a of welded OCTG pipe negative effect of currency translation 4,500 1% YoY -4% YoY 7,200 3,600 Thousand tonnes 5,400 U.S.$
Slide 5: Recent Developments
Recent Developments Premium connections In November 2013, TMK united its two premium connections families TMK Premium and ULTRA under a single brand – TMK Ultra Premium (TMK UP). Bringing the two premium connections lines under the single brand will help expand bidding opportunities for the Compan
Slide 6: Russian Market Overview
Russian Market Overview Share of Horizontal Drilling is Growing Key Considerations 25% In 4Q 2013, the Russian pipe market decreased by 5% Share of horizontal wells, % 21% from the prior quarter mainly as a result of a seasonal 20% decline of industrial pipe market. For 2013, the Russian pipe mark
Slide 7: US Market Overview
US Market Overview Growing Oil Drilling Activity Supported by Steadily High Crude Oil Prices Key Considerations US Oil and Gas Rig Count 2,100 In 2013, the U.S. rig count averaged 1,761 compared to 1,919 in 2012. In 4Q 2013, average rig count remained relatively flat 1,800 compared to the prior qu
Slide 8: 4Q 2013 Sales by Division and Group of Product
4Q 2013 Sales by Division and Group of Product 4Q 2013 Sales by Division 6% 840 Russian division sales increased QoQ mainly due to higher seamless OCTG and line pipe volumes. 720 American division sales grew QoQ due to higher welded Thousand tonnes 600 OCTG and line pipe volumes. 480 7% 360 719
Slide 9: 4Q 2013 Revenue by Division
4Q 2013 Revenue by Division 4Q 2013 Revenue 4Q 2013 Revenue per Tonne* 1,200 0.4% 1,800 -8% 5% -1% 1,000 1,500 U.S.$ mln U.S.$ / tonne 800 1,200 600 7% 900 1,044 1,621 1,627 1,549 998 1,430 1,389 1,374 400 600 12% 200 426 457 300 63 70 0 0 Russia America Europe Russia America Europe** 3Q2013 4Q2013
Slide 10: 4Q 2013 Adjusted EBITDA by Division
4Q 2013 Adjusted EBITDA by Division 4Q 2013 Adjusted EBITDA 4Q 2013 Adjusted EBITDA Margin 210 41% 20% 18% 180 15% 13% 14% 150 U.S.$ mln 11% 11% 120 10% 10% % 90 188 20% 134 60 45% 5% 42 50 30 7 10 0 0% Russia America Europe Russia America Europe 3Q2013 4Q2013 3Q2013 4Q2013 Russian division Adjust
Slide 11: FY 2013 Sales by Division and Group of Product
FY 2013 Sales by Division and Group of Product FY 2013 Sales by Division -2% 3,200 Russian division sales declined YoY mostly due to lower 2,800 OCTG and line pipe volumes. Thousand tonnes 2,400 2,000 American division sales increased YoY due to higher welded 1,600 and seamless OCTG pipe volumes
Slide 12: FY 2013 Revenue by Division
FY 2013 Revenue by Division FY 2013 Revenue FY 2013 Revenue per Tonne* -5% -12% 2,000 -11% 4,500 -3% 3,600 1,600 U.S.$ / tonne U.S.$ mln 2,700 1,200 4,714 4,483 1% 1,827 1,840 1,800 800 1,621 1,620 1,492 1,453 900 -12% 400 1,650 1,665 324 284 0 0 Russia America Europe Russia America Europe** FY2012
Slide 13: FY 2013 Adjusted EBITDA by Division
FY 2013 Adjusted EBITDA by Division FY 2013 Adjusted EBITDA FY 2013 Adjusted EBITDA Margin 2% 800 20% 17% 16% 16% 600 16% U.S.$ mln 13% 12% 11% % 400 776 759 9% -34% 8% 200 -40% 4% 218 145 31 0 52 0% Russia America Europe Russia America Europe FY2012 FY2013 FY2012 FY2013 Russian division Adjusted
Slide 14: Seamless – Core to Profitability
Seamless – Core to Profitability QoQ, YoY, FY 2013 Gross Profit Breakdown U.S.$ mln 4Q 2013 FY 2013 (unless stated otherwise) % % Other operations Volumes- Pipes, kt 617 15% 2,422 -3% 3% Welded Revenue 978 12% 3,960 -4% 18% SEAMLESS Gross Profit 251 8% 1,077 -1% Margin, % 26% 27% Avg Revenue / Tonne
Slide 15: Working Capital Position for FY 2013
Working Capital Position for FY 2013 Inventories (Days) Accounts Payable (Days) 140 132 120 107 120 100 97 96 100 91 90 75 80 73 73 80 64 60 60 40 40 20 20 0 0 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Accounts Receivable (Days) Cash Conversion Cycle (days) 100 94 119 120 80 100 86 63 76 80
Slide 16: Debt Maturity Profile as of December 31, 2013
Debt Maturity Profile as of December 31, 2013 As of December 31, 2013, total 1,000 financial debt amounted to 906 U.S.$3,694 mln 800 89% of total financial debt is long- 413 term 600 561 0 Weighted average nominal interest U.S.$ mln 515 500 494 rate totalled 6.72% 400 359 287 As of December
Slide 17: Debt Profile as of December 31, 2013
Debt Profile as of December 31, 2013 More than U.S.$1,6 bn of Undrawn Committed Credit Lines to Debt Breakdown by Source of Borrowings Cover Short-term Debt 1,400 Utilized Credit Facilities 1,200 Unutilized Credit 1,000 Facilities U.S.$ mln 800 Bonds 39% 600 400 Bank Loans 200 61% 0 2014 2015 2016 U
Slide 18: Outlook
Outlook For the full year 2014, the Company observes an increase of the pipe market in Russia mainly due to higher consumption of oil and gas pipe grades. In particular, as a results of horizontal drilling growth and further development of unconventional oil and gas reserves, the Company expects inc
Slide 19: Appendix – Summary Financial Accounts
Appendix – Summary Financial Accounts 19
Slide 20: Income Statement
Income Statement US$ mln 2013 2012 2011 2010 2009 Revenue 6,432 6,688 6,754 5,579 3,461 Cost of Sales (5,074) (5,209) (5,307) (4,285) (2,905) Gross Profit 1,358 1,479 1,446 1,293 556 Selling and Distribution Expenses (379) (433) (411) (403) (313) General and Administrative Expenses (317) (293) (283)
Slide 21: Statement of Financial Position
Statement of Financial Position US$ mln 2013 2012 2011 2010 2009 ASSETS Cash and Bank Deposits 93 225 231 158 244 Accounts Receivable 995 914 772 720 580 Inventories 1,324 1,346 1,418 1,208 926 Prepayments 148 180 200 172 223 Other Financial Assets 0 4 4 4 4 Total Current Assets 2,561 2,670 2,625 2,
Slide 22: Cash Flow
Cash Flow US$ mln 2013 2012 2011 2010 2009 Profit / (Loss) before Income Tax 312 400 544 185 (427) Adjustments for: Depreciation and Amortisation 326 326 336 301 313 Net Interest Expense 245 275 271 412 406 Others 61 39 (101) 45 36 Working Capital Changes (159) (34) (156) (527) 558 Cash Generated fr
Slide 23: Thank You
Thank You TMK Investor Relations 40/2a, Pokrovka Street, Moscow, 105062, Russia +7 (495) 775-7600 IR@tmk-group.com 23