Tmk · RUS:TRMK
Tmk — H1 2014 Earnings Presentation
19 slides from Tmk's earnings presentation, 2014
Slide 1: TMK Financial Presentation: 2Q and 1H 2014 IFRS Results
PROPRIETARY & CONFIDENTIAL TMK Financial Presentation 2Q and 1H 2014 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: 2Q 2014 vs 1Q 2014 Summary Financial Highlights
2Q 2014 vs 1Q 2014 Summary Financial Highlights Sales increased QoQ mainly due to higher sales in Russia across all types of welded pipe, and Revenue grew QoQ mainly as a result of higher especially LDP volumes welded pipe sales in the Russian division +5% QoQ +3% QoQ 1,200 1,600 Thousand tonnes 900
Slide 4: 1H 2014 vs 1H 2013 Summary Financial Highlights
1H 2014 vs 1H 2013 Summary Financial Highlights Revenue declined YoY mainly due to lower LDP Sales decreased YoY mostly due to lower LDP sales sales in the Russian division and a negative effect in Russia of currency translation -3% YoY -12% YoY 2,400 3,500 2,000 Thousand tonnes 2,800 1,600 U.S.$ ml
Slide 5: Recent Developments
Recent Developments Dividends On June 19, 2014, the annual shareholders’ meeting approved a final dividend for 2013 in the amount of 731 million Russian roubles ($21 million at the exchange rate at the date of approval) or 0.78 Russian roubles ($0.02) per ordinary share. Total dividend amount for
Slide 6: Russian Market Overview
Russian Market Overview Share of Horizontal Drilling is Growing Key Considerations 29% 29% 30% In 2Q 2014, the Russian pipe market increased by 10% from 25% the prior quarter mainly as a result of a seasonal growth of 21% the welded industrial pipe market. In 1H 2014, the Russian 20% 18% pipe mark
Slide 7: US Market Overview
US Market Overview Growing Oil Drilling Activity Supported by Steadily High Crude Oil Prices Key Considerations US Oil and Gas Rig Count 2,100 According to Backer Hughes, the average number of rigs in 2Q Gas 2014 increased by 73 rigs over the prior quarter and by 56 rigs 1,800 Oil in 1H 2014 over
Slide 8: 2Q 2014 vs 1Q 2014 Sales by Division and Group of Product
2Q 2014 vs 1Q 2014 Sales by Division and Group of Product Sales by Division 8% 840 Russian division sales increased QoQ mainly due to higher 720 LDP and welded industrial pipe volumes. 600 Thousand tonnes American division sales fell QoQ due to lower welded OCTG 480 and seamless and welded indus
Slide 9: 2Q 2014 vs 1Q 2014 Revenue by Division
2Q 2014 vs 1Q 2014 Revenue by Division Revenue Revenue per Tonne* 3% 1,200 1,800 5% 12% -3% 1,000 1,500 800 1,200 U.S.$ / tonne U.S.$ mln 600 900 1,713 -1% 1,665 1,030 1,565 981 1,401 1,350 1,308 400 600 7% 200 418 415 300 67 71 0 0 Russia America Europe Russia America Europe 1Q2014 2Q2014 1Q2014 2Q
Slide 10: 2Q 2014 vs 1Q 2014 Adjusted EBITDA by Division
2Q 2014 vs 1Q 2014 Adjusted EBITDA by Division Adjusted EBITDA Adjusted EBITDA Margin -3% 160 18% 16% 14% 120 12% U.S.$ mln 12% 11% 80 8% % 153 147 6% 39% 6% 40 21% 34 24 7 9 0 0% Russia America Europe Russia America Europe 1Q2014 2Q2014 1Q2014 2Q2014 Russian division Adjusted EBITDA declined due
Slide 11: 1H 2014 vs 1H 2013 Sales by Division and Group of Product
1H 2014 vs 1H 2013 Sales by Division and Group of Product Sales by Division -6% Russian division sales declined YoY mostly due to lower LDP 1,700 volumes as well as lower seamless line and seamless 1,360 industrial pipe sales. Thousand tonnes American division sales increased YoY due to higher 1
Slide 12: 1H 2014 vs 1H 2013 Revenue by Division
1H 2014 vs 1H 2013 Revenue by Division Revenue Revenue per Tonne* -18% -16% 4% 2,500 1,800 -13% 1,500 2,000 1,200 U.S.$ / tonne U.S.$ mln 1,500 2,440 900 1,688 1,761 6% 1,618 1,000 2,011 1,519 1,481 1,328 600 833 -9% 500 782 300 151 138 0 0 Russia America Europe Russia America Europe 1H2013 1H2014 1
Slide 13: 1H 2014 vs 1H 2013 Adjusted EBITDA by Division
1H 2014 vs 1H 2013 Adjusted EBITDA by Division Adjusted EBITDA Adjusted EBITDA Margin 500 -34% 20% 19% 400 16% 15% U.S.$ mln 12% 300 12% 10% % 455 200 8% 7% 7% 300 100 9% 12% 4% 53 58 15 16 0 0% Russia America Europe Russia America Europe 1H2013 1H2014 1H2013 1H2014 Russian division Adjusted EBITD
Slide 14: Seamless – Core to Profitability
Seamless – Core to Profitability U.S.$ mln QoQ, YoY, 2Q 2014 Gross Profit Breakdown 2Q 2014 1H 2014 (unless stated otherwise) % % Other Volumes- Pipes, kt 634 -1% 1,273 0% operations Welded 2% 15% Revenue 970 -1% 1,948 -8% SEAMLESS Gross Profit 236 0% 473 -20% Margin, % 24% 24% Avg Revenue / Tonne (
Slide 15: Working Capital Position as of June 30, 2014
Working Capital Position as of June 30, 2014 Inventories (Days) Accounts Payable (Days) 120 80 101 75 97 96 73 73 100 91 90 69 80 64 60 60 40 20 0 40 2010 2011 2012 2013 6m2014 2010 2011 2012 2013 6m2014 Accounts Receivable (Days) Cash Conversion Cycle (days) 80 120 68 100 63 100 60 56 56 86 50 76 8
Slide 16: Debt Maturity Profile as of June 30, 2014
Debt Maturity Profile as of June 30, 2014 1,000 965 As of June 30, 2014, total financial debt amounted to U.S.$3,753 mln 800 80% of total financial debt is long- term 600 Weighted average nominal interest 527 515 494 500 rate totalled 7.04% U.S.$ mln 965 399 400 328 As of June 30, 2014, borr
Slide 17: Debt Profile as of June 30, 2014
Debt Profile as of June 30, 2014 U.S.$1 bn of Undrawn Committed Credit Lines to Cover Short- Debt Breakdown by Source of Borrowings term Debt 800 Utilized Credit Facilities 700 Unutilized Credit Facilities 600 Bonds U.S.$ mln 500 36% 400 300 Bank Loans 200 64% 100 0 2014 2015 2016 2019 Unlimited Not
Slide 18: Outlook
Outlook For the second half of 2014, the Company observes an increase of the pipe market in Russia mainly due to higher consumption of LD pipe as a result of the commencement of Gazprom’s Power of Siberia project. In the U.S. TMK expects commodity prices to further support robust drilling activity t
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