Slide 1: TMK Financial Presentation 1Q 2013 IFRS Results
PROPRIETARY & CONFIDENTIAL TMK Financial Presentation 1Q 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: 1Q 2013 Summary Financial Highlights
1Q 2013 Summary Financial Highlights Sales were down QoQ due to weaker demand for welded industrial pipe, Revenue was up QoQ on higher volumes and improved product mix but increased YoY driven by higher consumption of LDP seamless line of seamless pipe. YoY growth was due to increased LDP and welded
Slide 4: Recent Developments
Recent Developments New Products Development In January 2013, casing with TMK PF premium connections was run in the onshore and offshore portions of one of the wells in NOVATEK’s Yurkharovskoye field. ТМК supplied the casing column and supervised its running into the well. In March 2013, TMK shi
Slide 5: Russian Market Overview
Russian Market Overview Growing Drilling Market in Russia Oil Companies’ Upstream Capex is Expected to Increase 50,000 25,000 7,000 6,000 40,000 20,000 CAGR 10% 5,000 U.S.$ mln 30,000 15,000 4,000 Units km 3,000 20,000 10,000 2,000 5,000 10,000 1,000 0 0 0 2004 2005 2006 2007 2008 2009 2010 2011 201
Slide 6: US Market Overview
US Market Overview Growing Oil Drilling Activity Supported by High Crude Oil Key Considerations Prices US Oil and Gas Rig Count In 1Q 2013, US total rig count amounted on average to 1,758 rigs, down 3% QoQ and 12% YoY. 2,100 Gas rig count remained almost flat QoQ but fell by more than 40% YoY. 1
Slide 7: 1Q 2013 Sales by Division and Group of Product
1Q 2013 Sales by Division and Group of Product 1Q 2013 Sales by Division -5% 840 Russian division sales decreased QoQ mainly due to weaker 720 demand for welded industrial pipe in 1Q2013. Thousand tonnes 600 American division sales increased QoQ due to higher welded 480 OCTG pipe volumes. 826 78
Slide 8: 1Q 2013 Revenue by Division
1Q 2013 Revenue by Division 1Q 2013 Revenue 1Q 2013 Revenue per Tonne* +5% +16% 1,400 1,800 -3% +11% 1,200 1,500 U.S.$ / tonne 1,000 U.S.$ mln 1,200 800 900 1,720 1,212 1,277 1,624 1,670 1,618 600 1,480 +5% 1,468 600 400 +19% 200 300 352 369 67 79 0 0 Russia Americas Europe Russia Americas Europe**
Slide 9: 1Q 2013 Adjusted EBITDA by Division
1Q 2013 Adjusted EBITDA by Division 1Q 2013 Adjusted EBITDA 1Q 2013 Adjusted EBITDA Margin +31% 250 19% 20% 200 16% 15% U.S.$ mln 13% 150 % 247 10% 7% 100 188 7% 5% 5% 50 -13% -30% 23 20 8 6 0 0% Russia Americas Europe Russia Americas Europe 4Q2012 1Q2013 4Q2012 1Q2013 Russian division Adjusted EB
Slide 10: Seamless – Core to Profitability
Seamless – Core to Profitability U.S.$ mln QoQ, YoY, 1Q 2013 (unless stated otherwise) % % Sales of seamless pipe generated Volumes- Pipes, kt 627 +1% +3% 63% of total Revenue in 1Q 2013 compared to 61% in 4Q 2012 and Net Sales 1,084 +9% +2% 64% in 1Q 2012. SEAMLESS no Gross Profit 306 +24% change
Slide 11: No Major Changes in Working Capital Position in 1Q 2013
No Major Changes in Working Capital Position in 1Q 2013 Inventories (Days) Accounts Payable (Days) 140 132 120 107 120 100 97 100 91 90 86 75 73 80 64 64 80 60 60 40 40 20 20 0 0 2009 2010 2011 2012 3m2013 2009 2010 2011 2012 3m2013 Accounts Receivable (Days) Cash Conversion Cycle (days) 100 94 120
Slide 12: Debt Maturity Profile as of March 31, 2013
Debt Maturity Profile as of March 31, 2013 1,200 As of March 31, 2013, total financial debt amounted to U.S.$3,849 mln 1,051 1,000 73% of total financial debt is long-term 413* 800 776 Weighted average nominal interest rate 22 totalled 7.02% 658 U.S.$ mln 600 11 501 As of March 31, 2013, bor
Slide 13: Debt Profile as of March 31, 2013
Debt Profile as of March 31, 2013 Around U.S.$1 bn of Undrawn Committed Credit Lines to Cover Debt Breakdown by Source of Borrowings Short-term Debt 1,200 Investment Utilized Credit Facilities Loans 1,000 Unutilized Credit Facilities Bonds 2% 28% 800 U.S.$ mln 600 400 200 Bank 0 Loans 2013 2014 2015
Slide 14: Outlook
Outlook In 2013, the Russian division expects strong demand from oil and gas companies, particularly for OCTG, line pipe and LDP, supported by growing investments and E&P activity by Russian oil and gas majors as well as further pipeline construction. While maintaining its positive long term U.S
Slide 15: Appendix – Summary Financial Accounts
Appendix – Summary Financial Accounts 15
Slide 16: Income Statement
Income Statement U.S.$ mln 2012 2011 2010 2009 2008 Revenue 6,688 6,754 5,579 3,461 5,690 Cost of Sales (5,204) (5,307) (4,285) (2,905) (4,252) Gross Profit 1,483 1,446 1,293 556 1,438 Selling and Distribution Expenses (433) (411) (403) (313) (344) General and Administrative Expenses (293) (283) (23
Slide 17: Statement of Financial Position
Statement of Financial Position U.S.$ mln 31-Dec-12 31-Dec-11 31-Dec-10 31-Dec-09 31-Dec-08 ASSETS Cash and Bank Deposits 225 231 158 244 143 Accounts Receivable 914 772 720 580 758 Inventories 1,346 1,418 1,208 926 1,176 Prepayments 180 200 172 223 213 Other Financial Assets 4 4 4 4 4 Total Current
Slide 18: Cash Flow
Cash Flow U.S.$ mln 2012 2011 2010 2009 2008 Profit / (Loss) before Income Tax 405 544 185 (427) 308 Adjustments for: Depreciation and Amortisation 326 336 301 313 248 Net Interest Expense 275 271 412 406 263 Others 34 (101) 44 36 228 Working Capital Changes (34) (156) (527) 558 (81) Cash Generated
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