Tmk · RUS:TRMK
Tmk — FY2015 Earnings Presentation
22 slides from Tmk's earnings presentation, Mar 4, 2016
Slide 1: Financial Presentation: 4Q and FY 2015 IFRS Results
Financial Presentation 4Q and FY 2015 IFRS Results March 4, 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: 4Q and FY 2015 Summary Financial Results and Market Update
4Q and FY 2015 Summary Financial Results and Market Update 3
Slide 4: 4Q 2015 vs 3Q 2015 Summary Financial Highlights
4Q 2015 vs 3Q 2015 Summary Financial Highlights Revenue remained nearly flat compared to 3Q2015. A Sales decreased QoQ, mainly due to weaker sales in the negative effect of currency translation was largely offset American division coupled with lower welded line and by favorable product mix of seamle
Slide 5: FY 2015 vs FY 2014 Summary Financial Highlights
FY 2015 vs FY 2014 Summary Financial Highlights Sales decreased YoY, due to lower pipe volumes in Revenue fell YoY, mainly due to a sharp decline of the American division, caused by unfavorable market sales in the American division and a negative effect conditions of currency translation -12 % YoY -
Slide 6: Recent Developments
Recent Developments New contracts and cooperation In January 2016, TMK and Rosneft signed a partnership memorandum on the implementation of the program of pipe import substitution for offshore projects. Within the framework of their cooperation, the parties intend to consider possible use of TMK’s
Slide 7: Russian Market Overview
Russian Market Overview Oil drilling market in Russia Key considerations 11 4Q 2015 vs. 3Q2015 In 4Q 2015, the Russian pipe market decreased by 7% QoQ, 10 mainly due to seasonally weaker welded industrial pipe 9 demand. Non-Energy 8 Drilling in Russia marginally increased by 1% QoQ. At the same
Slide 8: 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 4Q 2015 vs. 3Q2015 2,000 100 According to Baker Hughes, the average number of rigs in 4Q 2015 fell by 13% QoQ, following a continued decline in oil Crude oil price ($/Bbl) US
Slide 9: 4Q 2015 vs 3Q 2015 Results
4Q 2015 vs 3Q 2015 Results 9
Slide 10: 4Q 2015 vs 3Q 2015 Sales by Division and Group of Product
4Q 2015 vs 3Q 2015 Sales by Division and Group of Product Sales by division -2% 850 Russian division sales slightly decreased QoQ, due to seasonally lower industrial pipe volumes, which were not fully 680 offset by higher LD pipe sales. Thousand tonnes 510 American division sales dropped by 24%
Slide 11: 4Q 2015 vs 3Q 2015 Revenue by Division
4Q 2015 vs 3Q 2015 Revenue by Division Revenue Revenue per tonne* 5% -2% 800 1,600 600 -17% 1,200 7% US$ mln US$/tonne 400 761 800 722 1,547 1,510 1,094 908 200 -26% 875 937 -7% 400 152 113 43 39 0 0 Russia America Europe Russia America Europe 3Q2015 4Q2015 3Q2015 4Q2015 Revenue for the Russian di
Slide 12: 4Q 2015 vs 3Q 2015 Adjusted EBITDA by Division
4Q 2015 vs 3Q 2015 Adjusted EBITDA by Division Adjusted EBITDA Adjusted EBITDA margin 180 30% 25% 23% 20% 18% 17% 150 15% 120 10% 6% US$ mln 5% 90 % 172 0% 60 132 -5% -10% -7% 30 156% 7 -15% 3 0 -20% -10 -24 Russia America Europe -25% -21% -30 Russia America Europe 3Q2015 4Q2015 3Q2015 4Q2015 Russ
Slide 13: FY 2015 vs FY 2014
FY 2015 vs FY 2014 13
Slide 14: FY 2015 vs FY 2014 Sales by Division and Group of Product
FY 2015 vs FY 2014 Sales by Division and Group of Product Sales by division 2% 3,500 Russian division sales grew by 2% YoY, driven mainly by high 3,000 LDP demand. Thousand tonnes 2,500 American division sales dropped by 57% YoY, mainly due to 2,000 lower volumes in the OCTG segment and unfavora
Slide 15: FY 2015 vs FY 2014 Revenue by Division
FY 2015 vs FY 2014 Revenue by Division Revenue Revenue per tonne* -20% -3% 4,000 1,800 3,200 1,500 -17% -21% 1,200 2,400 US$/tonne US$ mln 3,973 -58% 900 1,733 1,686 1,600 3,189 600 1,242 1,286 980 1,073 800 1,766 -27% 300 742 196 270 0 0 Russia America Europe Russia America Europe FY2014 FY2015 FY2
Slide 16: FY 2015 vs FY 2014 Adjusted EBITDA by Division
FY 2015 vs FY 2014 Adjusted EBITDA by Division Adjusted EBITDA Adjusted EBITDA margin 690 3% 20% 20% 600 17% 15% 15% 510 14% 12% 420 11% US$ mln 9% 330 % 614 629 8% 240 5% 150 -7% 2% 60 159 32 30 -1% -23 Russia America Europe -30 Russia America Europe -4% -3% FY2014 FY2015 FY2014 FY2015 Russian di
Slide 17: Seamless – Core to Profitability
Seamless – Core to Profitability U.S.$ mln QoQ, YoY, FY 2015 gross profit breakdown 4Q 2015 FY 2015 (unles s s tated otherwis e) % % Other Volumes- Pipes, kt 604 6% 2,410 -6% operations 2% Revenue 606 3% 2,598 -31% Welded 20% SEAMLESS Gross profit 161 2% 657 -28% Margin, % 26% 25% Avg revenue/tonne
Slide 18: Working Capital and Debt Maturity Profile
Working Capital and Debt Maturity Profile 18
Slide 19: Working Capital Position as of December 31, 2015
Working Capital Position as of December 31, 2015 Changes in working capital 160 For FY 2015, release of working capital in the amount of US$105 mln: 120 80 150 − Improved payment discipline of the major clients; US$ mln 40 82 58 0 -30 − Inventory management; -67 -59 -68 -40 -119 -80 − Enhancement
Slide 20: Debt Maturity Profile as of December 31, 2015
Debt Maturity Profile as of December 31, 2015 Debt maturity profile as of December 31, 2015 As of December 31, 2015, total loan portfolio amounted to US$2,740 mln based on management accounts 600 compared to US$3,148 mln as of December 31, 2014. EUR 562 RUB More than 90% of total bank loans are
Slide 21: 1Q 2016 and FY 2016 Outlook
1Q 2016 and FY 2016 Outlook In Russia, TMK anticipates its 1Q 2016 sales to be in line with 1Q 2015. For FY 2016, TMK plans to sustain its OCTG volumes year-on-year, provided Russian majors’ demand continues to be stable. Overall, the Russian division margin is expected to be in line with the level
Slide 22: Thank you
Thank you TMK Investor Relations 40/2a, Pokrovka Street, Moscow, 105062, Russia +7 (495) 775-7600 IR@tmk-group.com