Tmk · RUS:TRMK

Tmk — FY2014 Earnings Presentation

19 slides from Tmk's earnings presentation, March 2015

  1. Slide 1: TMK Financial Presentation: 4Q and FY 2014 IFRS Results

    PROPRIETARY & CONFIDENTIAL TMK Financial Presentation 4Q and FY 2014 IFRS Results

  2. 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

  3. Slide 3: 4Q Summary Financial Highlights

    4Q Summary Financial Highlights Sales increased QoQ as a result of higher LDP volumes along with stronger sales of seamless pipe in the Revenue decreased QoQ mainly due to a negative effect Russian division of currency translation +16% QoQ -2% QoQ 1,250 1,600 1,000 Thousand tonnes 1,200 U.S.$ mln 75

  4. Slide 4: FY 2014 Summary Financial Highlights

    FY 2014 Summary Financial Highlights Sales increased YoY as a result of stronger sales of Revenue fell YoY mainly due to a negative effect of seamless OCTG and line pipe currency translation +3% YoY -7% YoY 4,500 6,600 3,600 5,500 Thousand tonnes U.S.$ mln 4,400 2,700 4,287 4,402 3,300 6,432 6,009 1

  5. Slide 5: Recent Developments

    Recent Developments Seamless capacity addition  In October 2014, TMK put into operation a new FQM pipe rolling mill at Seversky pipe plant with a total production capacity of around 600 thousand tonnes. As a result, incremental increase of the Company’s total seamless pipe capacity will amount to a

  6. Slide 6: Russian Market Overview

    Russian Market Overview Growing oil drilling market in Russia Key considerations 12  In 4Q2014, the Russian pipe market increased by 5% 11 QoQ. For FY2014, the Russian pipe market rose by 9% 10 YoY. Such growth in both periods was mainly the result of Non-Energy 9 higher consumption of LD pipe. 8 M

  7. Slide 7: US Market Overview

    US Market Overview Growing oil drilling activity Key considerations US Oil and Gas Rig Count 2,100 Gas  According to Baker Hughes, in 4Q2014, the average 1,800 Oil rig count remained relatively flat QoQ. For FY2014, the Gas – 22% average rig count increased by 6% YoY from 1,761 for US Rig Count 1,5

  8. Slide 8: 4Q 2014 Sales by Division and Group of Product

    4Q 2014 Sales by Division and Group of Product Sales by division 18% 920  Russian division sales increased QoQ as a result of stronger 805 seamless OCTG and line pipe sales, as well as higher LD 690 pipe volumes. Thousand tonnes 575  American division sales grew QoQ due to higher volumes of 460 91

  9. Slide 9: 4Q 2014 Revenue by Division

    4Q 2014 Revenue by Division Revenue Revenue per tonne* 1,200 1,800 0% -6% 1,000 1,500 -21% -8% 800 1,200 U.S.$ / tonne U.S.$ mln 600 12% 900 1,775 1,775 1,014 948 1,312 1,346 400 600 1,240 1,040 441 492 -17% 300 200 72 60 0 0 Russia America Europe Russia America Europe 3Q2014 4Q2014 3Q2014 4Q2014 *

  10. Slide 10: 4Q 2014 Adjusted EBITDA by Division

    4Q 2014 Adjusted EBITDA by Division Adjusted EBITDA Adjusted EBITDA margin 180 7% 20% 17% 150 15% 15% 13% 120 12% U.S.$ mln 11% % 9% 90 10% 162 151 41% 60 5% 30 -33% 42 59 9 6 0 0% Russia America Europe Russia America Europe 3Q2014 4Q2014 3Q2014 4Q2014  Russian division Adjusted EBITDA went up QoQ

  11. Slide 11: FY 2014 Sales by Division and Group of Product

    FY 2014 Sales by Division and Group of Product Sales by division 4% 3,200  Russian division sales increased YoY mostly due to higher 2,800 seamless OCTG and line pipe volumes, as well as stronger 2,400 LDP sales. Thousand tonnes 2,000  American division sales slightly decreased YoY due to lower 1,

  12. Slide 12: FY 2014 Revenue by Division

    FY 2014 Revenue by Division Revenue Revenue per tonne* -11% 7% 4,800 1,800 -15% 4,000 14% 1,350 3,200 U.S.$ / tonne U.S.$ mln 2,400 900 1,733 4,483 6% 1,621 3,973 1,453 1,600 1,242 1,286 1,127 450 -5% 800 1,665 1,766 284 270 0 0 Russia America Europe Russia America Europe FY2013 FY2014 FY2013 FY2014

  13. Slide 13: FY 2014 Adjusted EBITDA by Division

    FY 2014 Adjusted EBITDA by Division Adjusted EBITDA Adjusted EBITDA margin -21% 800 20% 17% 15% 16% 600 12% U.S.$ mln 12% 11% % 400 776 9% 9% 614 8% 10% 200 3% 4% 145 159 31 32 0 0% Russia America Europe Russia America Europe FY2013 FY2014 FY2013 FY2014  Russian division Adjusted EBITDA decreased Y

  14. Slide 14: Seamless – Core to Profitability

    Seamless – Core to Profitability QoQ, YoY, FY 2014 gross profit breakdown U.S.$ mln 4Q 2014 FY 2014 (unless stated otherwise) % % Other 702 2,560 operations Volumes- Pipes, kt 20% 6% 2% Revenue 883 3,748 Welded -4% -5% 20% SEAMLESS Gross Profit 204 -12% 907 -16% Margin, % 23% 24% Avg Revenue / Tonne

  15. Slide 15: Working Capital Position as of December 31, 2014

    Working Capital Position as of December 31, 2014 Inventories (days) Accounts payable (days) 100 80 97 75 96 73 73 66 64 91 90 90 89 60 80 40 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Accounts receivable (days) Cash conversion cycle (days) 80 120 63 60 100 56 56 86 83 60 80 50 72 76 80 40 60

  16. Slide 16: Debt Maturity Profile as of December 31, 2014

    Debt Maturity Profile as of December 31, 2014  As of December 31, 2014, total 800 financial debt amounted to U.S.$3,223 mln.  76% of total financial debt is long- 600 term. 311  Redeemed Feb 2015 Convertible Bonds using cash accumulated from operating and financial activities, U.S.$ mln 400 inclu

  17. Slide 17: Debt Profile as of December 31, 2014

    Debt Profile as of December 31, 2014 Around U.S.$880 mln of undrawn committed credit lines to cover short-term debt Undrawn credit lines by bank 600 Utilized Credit Facilities 500 Foreign banks Unutilized Credit Facilities 15% 400 U.S.$ mln Russian banks 300 85% 200 100 0 2015 2016 2017 2020 Unlimit

  18. Slide 18: Outlook

    Outlook In 1Q2015, TMK observes a high utilization rate of its production facilities in Russia, due to seasonally stronger demand from the oil and gas majors and greater pipeline construction activity. TMK already increased prices to the most of its customers, to largely offset input cost inflation

  19. Slide 19: Thank You

    Thank You TMK Investor Relations 40/2a, Pokrovka Street, Moscow, 105062, Russia +7 (495) 775-7600 [email protected] 19

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