Slide 1: Financial Presentation 3Q / 9M 2017 IFRS Results
Financial Presentation 3Q / 9M 2017 IFRS Results November 16, 2017
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: 3Q / 9M 2017 Summary Financial Results and Market Update
3Q / 9M 2017 Summary Financial Results and Market Update
Slide 4: 3Q 2017 vs. 2Q 2017 Summary Financial Highlights
3Q 2017 vs. 2Q 2017 Summary Financial Highlights Sales were up QoQ, driven by higher OCTG sales at the American division and stronger LDP volumes at the Russian Revenue increased QoQ, due to higher prices and stronger division pipe sales at the American division 2% QoQ 3% QoQ 1,000 1,200 Thousand to
Slide 5: 9M 2017 vs 9M 2016 Summary Financial Highlights
9M 2017 vs 9M 2016 Summary Financial Highlights Sales were up YoY, driven by strong volumes at the American Revenue increased YoY supported by a positive currency division translation effect and strong sales at the American division 9% YoY 31% YoY 3,000 3,200 Thousand tonnes 2,400 US$ mln 2,000 1,60
Slide 6: Russian Market Overview
Russian Market Overview Pipe market in Russia Key considerations 12 3Q 2017 vs 2Q 2017 10 In 3Q 2017, the Russian pipe market grew 7% QoQ, mainly Non-Energy driven by increased demand for industrial pipe, due to a strong 8 construction season, and for LD pipe, resulting largely from the ramp-up in
Slide 7: US Market Overview
US Market Overview Rising oil prices driving improvement in rig count Key considerations 2,400 Oil Gas Crude Oil WTI Spot 120 3Q 2017 vs 2Q 2017 2,000 100 In the US, the average number of rigs in 3Q 2017 increased by 6% compared to the prior quarter (Baker Hughes) Crude oil price ($/Bbl) US Rig co
Slide 8: 3Q 2017 vs. 2Q 2017 Results
3Q 2017 vs. 2Q 2017 Results
Slide 9: 3Q 2017 vs 2Q 2017 Sales by Division and Product Group
3Q 2017 vs 2Q 2017 Sales by Division and Product Group Sales by division -1% Russian division sales decreased slightly QoQ, mostly as a 800 result of lower seamless pipe volumes due to a planned upgrade and maintenance works at key mills, while LDP sales were stronger QoQ Thousand tonnes 600 Ame
Slide 10: 3Q 2017 vs 2Q 2017 Revenue by Division
3Q 2017 vs 2Q 2017 Revenue by Division Revenue Revenue per tonne* 6% 900 -2% 1,600 -1% 1,200 16% 600 US$/tonne US$ mln 800 1,555 811 797 1,466 24% 300 1,067 1,054 1,058 -13% 909 400 288 232 64 56 0 0 Russia America Europe Russia America Europe 2Q2017 3Q2017 2Q2017 3Q2017 * Revenue /tonne for the Rus
Slide 11: 3Q 2017 vs 2Q 2017 Adjusted EBITDA by Division
3Q 2017 vs 2Q 2017 Adjusted EBITDA by Division Adjusted EBITDA Adjusted EBITDA margin 150 20% 12% 15% 120 15% 15% 13% 13% US$ mln 90 % 10% 9% 9% 2.0x 60 120 107 42 31% 5% 30 21 6 7 0 0% Russia America Europe Russia America Europe 2Q2017 3Q2017 2Q2017 3Q2017 Russian division Adjusted EBITDA increas
Slide 12: 9M 2017 vs. 9M 2016 Results
9M 2017 vs. 9M 2016 Results
Slide 13: 9M 2017 vs 9M 2016 Sales by Division and Product Group
9M 2017 vs 9M 2016 Sales by Division and Product Group Sales by division -3% 2,500 Russian division sales decreased YoY, mainly affected by 2,000 lower LDP volumes Thousand tonnes 1,500 YoY, a substantial increase in drilling activity combined with higher E&P spending in the North American marke
Slide 14: 9M 2017 vs 9M 2016 Revenue by Division
9M 2017 vs 9M 2016 Revenue by Division Revenue Revenue per tonne* 2,500 13% 13% 1,500 2,000 1,200 17% -1% 1,500 US$/tonne 900 US$ mln 1,463 2,335 1,000 2,057 600 1,297 2.8x 1,066 913 961 950 24% 500 300 690 134 166 246 0 0 Russia America Europe Russia America Europe 9M2016 9M2017 9M2016 9M2017 * Rev
Slide 15: 9M 2017 vs 9M 2016 Adjusted EBITDA by Division
9M 2017 vs 9M 2016 Adjusted EBITDA by Division Adjusted EBITDA Adjusted EBITDA margin -18% 500 24% 21% 20% 400 16% 15% 14% 300 12% 11% US$ mln 10% 434 % 200 355 8% 100 72 4% 18 18 0 0% -26% -63 -100 -4% Russia America Europe Russia America Europe 9M2016 9M2017 9M2016 9M2017 Russian division Adjust
Slide 16: Seamless – Core to Profitability
Seamless – Core to Profitability U.S.$ mln QoQ, YoY, 9M 2017 gross profit breakdown 3Q2017 9M2017 (unless stated otherwise) % % Other Sales - Pipes, kt 624 -10% 1,977 11% operations Welded 3% Revenue 744 -7% 2,258 32% 13% SEAMLESS Gross profit 197 4% 554 25% Margin, % 26% 25% Avg revenue/tonne (US$)
Slide 17: Debt Maturity Profile as of September 30, 2017
Debt Maturity Profile as of September 30, 2017 700 As of September 30, 2017, Net Debt amounted EUR 658 to US$2,711 mln RUB Over US$1bn reduction in Net Debt over the 600 past 3 years USD In April 2017, TMK placed a RUB 5 billion 10- year bond with a 9.75% coupon rate 500 In June 2017, TMK pl
Slide 18: Outlook
Outlook In Russia, in 4Q 2017 TMK anticipates marginal growth in pipe sales compared to the previous quarter, resulting from the start of the seasonal stock up period by oil and gas majors. Margins at the Russian division could remain under some pressure reflecting a peak in raw materials prices i
Slide 19: TMK Investor Relations
TMK Investor Relations 40/2a, Pokrovka Street, Moscow, 105062, Russia +7 (495) 775-7600 IR@tmk-group.com