Slide 1: Financial Presentation 1Q 2014 IFRS Results
PROPRIETARY & CONFIDENTIAL TMK Financial Presentation 1Q 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: 1Q 2014 vs 4Q 2013 Summary Financial Highlights
1Q 2014 vs 4Q 2013 Summary Financial Highlights Sales decreased QoQ mainly due to lower volumes of welded Revenue declined QoQ mainly due to lower welded pipe sales pipe and a negative effect of currency translation -6% QoQ -7% QoQ 1,200 1,800 1,500 Thousand tonnes 900 U.S.$ mln 1,200 600 900 1,090
Slide 4: 1Q 2014 vs 1Q 2013 Summary Financial Highlights
1Q 2014 vs 1Q 2013 Summary Financial Highlights Revenue declined YoY mainly due to lower LDP Sales decreased YoY mainly due to lower volumes as well as a negative effect of currency consumption of LDP translation -3% YoY -15% YoY 1,200 1,800 1,500 Thousand tonnes 900 U.S.$ mln 1,200 600 900 1,725 1,
Slide 5: Recent Developments
Recent Developments Contracts awarded In March 2014, TMK and Baker Hughes Incorporated announced their intention to jointly develop integrated well completion solutions. Targeted at both onshore and offshore fields, the solutions will provide turnkey well completions based on the technical and man
Slide 6: Russian Market Overview
Russian Market Overview Share of Horizontal Drilling is Growing Key Considerations In 1Q 2014, the Russian pipe market decreased by 3% from 30% 28% the prior quarter as a result of seasonal decline of the welded 26% industrial pipe market. Russian pipe market decreased YoY by 25% 21% 2% mainly dri
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 data, in 1Q 2014, the U.S. total 1,800 rig count averaged 1,779 up 1% both QoQ and YoY. 1,500 Gas - 18% US Rig Count Average o
Slide 8: 4Q 2013 Sales by Division and Group of Product
1Q 2014 vs 4Q 2013 Sales by Division and Group of Product Sales by Division 840 -4% Russian division sales decreased QoQ mainly due to lower 720 welded industrial and line pipe volumes, as well as weaker 600 consumption of LDP. Thousand tonnes 480 American division sales fell QoQ due to lower we
Slide 9: 4Q 2013 Revenue by Division
1Q 2014 vs 4Q 2013 Revenue by Division Revenue Revenue per Tonne* 1,200 1,800 2% -6% 1,000 1,500 -2% 7% 800 1,200 U.S.$ / tonne U.S.$ mln 600 -8% 900 1,044 1,627 1,665 981 1,374 1,350 400 600 1,208 1,296 457 -5% 200 418 300 70 67 0 0 Russia America Europe Russia America Europe 4Q2013 1Q2014 4Q2013 1
Slide 10: 4Q 2013 Adjusted EBITDA by Division
1Q 2014 vs 4Q 2013 Adjusted EBITDA by Division Adjusted EBITDA Adjusted EBITDA Margin 210 20% -19% 18% 180 16% 15% 14% 150 U.S.$ mln 11% 11% 120 10% % 90 188 153 -51% 6% 60 -24% 5% 30 50 10 24 7 0 0% Russia America Europe Russia America Europe 4Q2013 1Q2014 4Q2013 1Q2014 Russian division Adjusted
Slide 11: 1Q 2013 Sales by Division and Group of Product
1Q 2014 vs 1Q 2013 Sales by Division and Group of Product Sales by Division -8% 840 Russian division sales declined YoY mostly due to lower LDP 720 volumes. Thousand tonnes 600 American division sales increased YoY due to higher 480 seamless and welded OCTG volumes. 786 10% 360 727 European di
Slide 12: 1Q 2013 Revenue by Division
1Q 2014 vs 1Q 2013 Revenue by Division Revenue Revenue per Tonne* 1,400 -23% 2,000 3% -17% 1,200 1,600 24% 1,000 U.S.$ / tonne 1,200 U.S.$ mln 800 1,277 600 13% 800 1,624 1,617 1,665 981 1,350 1,296 400 1,042 -15% 400 200 369 418 79 67 0 0 Russia America Europe Russia America Europe 1Q2013 1Q2014 1Q
Slide 13: 1Q 2013 Adjusted EBITDA by Division
1Q 2014 vs 1Q 2013 Adjusted EBITDA by Division Adjusted EBITDA Adjusted EBITDA Margin 300 20% 19% -38% 250 16% 16% 200 U.S.$ mln 12% 11% % 150 8% 7% 247 100 5% 6% 153 21% 26% 4% 50 20 24 6 7 0 0% Russia America Europe Russia America Europe 1Q2013 1Q2014 1Q2013 1Q2014 Russian division Adjusted EBIT
Slide 14: Seamless – Core to Profitability
Seamless – Core to Profitability U.S.$ mln QoQ, YoY, 1Q 2014 Gross Profit Breakdown 1Q 2014 (unless stated otherwi se) % % Other Volumes- Pipes, kt 640 4% 2% operations 2% Welded Revenue 977 0% -10% 14% SEAMLESS Gross Profit 236 -6% -23% Margin, % 24% Avg Revenue / Tonne (U.S.$) 1,528 -4% -12% Seaml
Slide 15: Working Capital Position as of March 31, 2014
Working Capital Position as of March 31, 2014 Inventories (Days) Accounts Payable (Days) 100 99 80 97 75 96 73 73 70 64 91 90 90 60 80 40 2010 2011 2012 2013 1Q 2014 2010 2011 2012 2013 1Q 2014 Accounts Receivable (Days) Cash Conversion Cycle (days) 80 120 67 96 63 100 56 56 86 60 76 80 50 80 72 40
Slide 16: Debt Maturity Profile as of March 31, 2014
Debt Maturity Profile as of March 31, 2014 1,000 0 As of March 31, 2014, total financial 923 debt amounted to U.S.$3,594 mln 800 80% of total financial debt is long- term 0 594 600 Weighted average nominal interest U.S.$ mln 515 500 rate totalled 6.58% 494 923 400 401 0 As of March 31, 2014,
Slide 17: Debt Profile as of March 31, 2014
Debt Profile as of March 31, 2014 U.S.$1.1 bn of Undrawn Committed Credit Lines to Cover Debt Breakdown by Source of Borrowings Short-term Debt 900 800 Utilized Credit Facilities 700 Unutilized Credit Facilities 600 Bonds U.S.$ mln 40% 500 400 Bank Loans 300 60% 200 100 0 2014 2015 2016 Unlimited No
Slide 18: Outlook
Outlook For the full year 2014, the Company observes an increase of the pipe market in Russia mainly due to higher consumption of oil and gas pipe grades as a result of horizontal drilling growth and further development of unconventional oil and gas reserves. Moreover, possible commencement of Gazpr
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