Tmk · RUS:TRMK
Tmk — Q1 2016 Earnings Presentation
21 slides from Tmk's earnings presentation, May 19, 2016
Slide 1: Financial Presentation 1Q 2016 IFRS Results
Financial Presentation 1Q 2016 IFRS Results May 19, 2016
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 2016 Summary Financial Results and Market Update
1Q 2016 Summary Financial Results and Market Update 3
Slide 4: Summary Financial Highlights vs. 4Q 2015
1Q 2016 vs. 4Q 2015 Summary Financial Highlights Revenue was down QoQ due to a further decline in sales Sales decreased QoQ, due to lower pipe sales at the at the American division and a negative effect of currency Russian and American division translation -8% QoQ -17% QoQ 1,000 1,000 800 Thousand t
Slide 5: Summary Financial Highlights vs. 1Q 2015
1Q 2016 vs. 1Q 2015 Summary Financial Highlights Revenue fell YoY, a result of weaker sales at the Sales decreased YoY, due to drop of volumes at the American division due to falling US drilling activity American division, caused by unfavorable market and lower E&P spending, and a negative effect of
Slide 6: Russian Market Overview
Russian Market Overview Oil drilling market in Russia Key considerations 11 10 1Q 2016 vs. 4Q2015 9 In 1Q 2016, the Russian pipe market remained Non-Energy 8 almost flat compared to the previous quarter, with 7 1% growth QoQ in OCTG, where TMK is the market Mln tonnes 6 leader. 5 4 Against a 7%
Slide 7: U.S. Market Overview
U.S. Market Overview Drop in rig count followed drop in oil prices Key considerations 2,400 Oil Gas Crude Oil WTI Spot 120 1Q 2016 vs. 4Q2015 2,000 100 In the US, the average number of rigs in 1Q 2016 fell Crude oil price ($/Bbl) US Rig count 1,600 80 by 27% compared to the prior quarter (Baker Hu
Slide 8: 1Q 2016 vs. 4Q 2015 Results
1Q 2015 vs. 4Q 2015 Results 8
Slide 9: Sales by Division and Group of Product
1Q 2016 vs. 4Q 2015 Sales by Division and Group of Product Sales by division -6% Russian division sales decreased QoQ, partially due to 850 decreased LD pipe sales against the record-high consumption of LDP pipe in 4Q 2015. 680 Thousand tonnes 510 American division sales continued to decline, pr
Slide 10: Revenue by Division
1Q 2016 vs. 4Q 2015 Revenue by Division Revenue Revenue per tonne* 800 -14% -13% 1,600 600 1,200 -8% 5% US$/tonne US$ mln 400 761 800 1,510 655 1,309 954 937 862 908 200 -42% 400 5% 113 39 41 65 0 0 Russia America Europe Russia America Europe 4Q2015 1Q2016 4Q2015 1Q2016 * Revenue /tonne for the Russ
Slide 11: Adjusted EBITDA by Division
1Q 2016 vs. 4Q 2015 Adjusted EBITDA by Division Adjusted EBITDA Adjusted EBITDA margin 200 -16% 25% 23% 22% 17% 15% 160 120 0% US$ mln 80 172 146 % -9% 40 7 6 -25% -21% 0 -32 -24 -40 Russia America Europe -50% -48% Russia America Europe 4Q2015 1Q2016 4Q2015 1Q2016 Russian division Adjusted EBITDA
Slide 12: 1Q 2016 vs. 1Q 2015 Results
1Q 2016 vs. 1Q 2015 Results 12
Slide 13: Sales by Division and Group of Product
1Q 2016 vs. 1Q 2015 Sales by Division and Group of Product Sales by division -1% 800 Russian division sales decreased, affected mainly by lower seamless line pipe and LD pipe volumes. 600 Thousand tonnes A dramatic YoY decrease in rig count combined with E&P spending cuts in the North American m
Slide 14: Revenue by Division
1Q 2016 vs. 1Q 2015 Revenue by Division Revenue Revenue per tonne* -12% 750 -26% 1,800 600 1,500 -19% 1,200 -11% 450 US$/tonne US$ mln -80% 748 900 1,778 655 300 600 1,180 971 1,309 954 327 -29% 862 150 300 41 65 59 0 0 Russia America Europe Russia America Europe 1Q2015 1Q2016 1Q2015 1Q2016 * Revenu
Slide 15: Adjusted EBITDA by Division
1Q 2016 vs. 1Q 2015 Adjusted EBITDA by Division Adjusted EBITDA Adjusted EBITDA margin 150 23% 22% 19% 20% 20% 120 17% 15% 90 14% US$ mln 145 146 11% 9% 60 % 8% -48% 30 5% 28 12 2% 6 0 -1% -32 -48% -30 -4% Russia America Europe Russia America Europe 1Q2015 1Q2016 1Q2015 1Q2016 Russian division Adj
Slide 16: Seamless – Core to Profitability
Seamless – Core to Profitability U.S.$ mln QoQ, YoY, 1Q 2016 gross profit breakdown 1Q 2016 (unless stated otherwise) % % Other Sales - Pipes, kt 568 -6% -10% operations Welded 2% 6% Revenue 523 -14% -25% SEAMLESS Gross profit 141 -12% -22% Margin, % 27% Avg revenue/tonne (US$) 920 -8% -17% Seamless
Slide 17: Working Capital and Debt Maturity Profile
Working Capital and Debt Maturity Profile 17
Slide 18: Working Capital Position as at March 31, 2016
Working Capital Position as at March 31, 2016 Changes in working capital 160 120 In 1Q 2016, there was a working 80 capital build-up in the amount of 150 US$56 mln. US$ mln 40 82 0 For FY 2016 the Company expects -59 -68 -56 some working capital release. -40 -80 -120 1Q2015 2Q2015 3Q2015 4Q2015
Slide 19: Debt Maturity Profile as at April 30, 2016
Debt Maturity Profile as at April 30, 2016 Debt maturity profile as at April, 2016 As at April 30, 2016, total loan portfolio amounted to US$2,775 mln based on management accounts 600 compared to US$2,740 mln as at December 31, 2015. EUR 559 RUR Weighted average interest rate slightly decreased
Slide 20: Outlook
Outlook In Russia, TMK anticipates 2Q 2016 sales to be in line with the previous quarter, as seasonally lower OCTG consumption will be offset by higher demand for industrial pipe. For FY 2016, TMK reiterates its previous guidance that OCTG sales will remain flat year-on-year, provided demand from
Slide 21: Thank you
Thank you TMK Investor Relations 40/2a, Pokrovka Street, Moscow, 105062, Russia +7 (495) 775-7600 IR@tmk-group.com