Tmk · RUS:TRMK

Tmk — H1 2012 Earnings Presentation

20 slides from Tmk's earnings presentation, Aug 31, 2012

  1. Slide 1: TMK Financial Presentation 2Q and 1H 2012 IFRS Results

    PROPRIETARY & CONFIDENTIAL TMK Financial Presentation 2Q and 1H 2012 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: 2Q 2012 Sales by Segment and Group of Product

    2Q 2012 Sales by Segment and Group of Product Russia Americas Europe Total Thousand 2Q 2012 QoQ, % 2Q 2012 QoQ, % 2Q 2012 QoQ, % 2Q 2012 QoQ, % Tonnes Seamless Pipe 546 9% 69 11% 48 9% 663 9% OCTG 319 21% 62 13% - n/a 381 20% Line Pipe 129 -7% 4 100% 8 14% 141 -4% Industrial Pipe 98 -4% 3 -40% 40 8%

  4. Slide 4: 1H 2012 Sales by Segment and Group of Product

    1H 2012 Sales by Segment and Group of Product Russia Americas Europe Total Thousand 1H 2012 YoY, % 1H 2012 YoY, % 1H 2012 YoY, % 1H 2012 YoY, % Tonnes Seamless Pipe 1,049 6% 131 -10% 92 -3% 1,272 3% OCTG 582 18% 117 -9% - n/a 699 12% Line Pipe 267 -6% 6 -40% 15 15% 288 -6% Industrial Pipe 200 -8% 8

  5. Slide 5: 2Q 2012 and 1H 2012 Summary Financial Highlights

    2Q 2012 and 1H 2012 Summary Financial Highlights Revenue 2Q12: +7% QoQ 1H12: -3% YoY 1,800 3,600  2Q 2012 revenue increased QoQ primarily due to both 1,500 3,000 seamless OCTG pipe and large-diameter (LD) pipe sales U.S.$ mln U.S.$ mln 1,200 2,400 growth 900 1,659 1,781 1,800 3,547 3,439 600 1,200

  6. Slide 6: 2Q 2012 Revenue by Division

    2Q 2012 Revenue by Division 2Q 2012 Revenue 2Q 2012 Revenue per Tonne* 1,400 +9% 2,400 +2% 1,200 +4% 2,000 -4% 1,000 1,600 U.S.$ mln U.S.$ 800 1,200 600 1,237 +2% 1,133 1,963 1,997 1,824 1,889 800 1,573 1,516 400 200 440 448 +11% 400 86 96 0 0 Russia Americas Europe Russia Americas Europe 1Q2012 2Q2

  7. Slide 7: 1H 2012 Revenue by Division

    1H 2012 Revenue by Division 1H 2012 Revenue 1H 2012 Revenue per Tonne* 2,800 -8% -2% 2,100 +6% 2,400 1,800 -2% 2,000 1,500 U.S.$ mln U.S.$ 1,600 1,200 2,589 2,028 1,980 1,200 2,370 +16% 900 1,755 1,856 1,571 1,543 800 600 887 -5% 400 765 300 193 182 0 0 Russia Americas Europe Russia Americas Europe

  8. Slide 8: 2Q 2012 Revenue Growth by Segments and Groups of Products

    2Q 2012 Revenue Growth by Segments and Groups of Products Revenue growth in the Russian division was driven primarily by higher welded volumes, due to large- diameter business, and pricing. Increasing seamless volumes were virtually offset by declining welded volumes in the American division. The Eu

  9. Slide 9: 1H 2012 Revenue Growth by Segments and Groups of Products

    1H 2012 Revenue Growth by Segments and Groups of Products Revenue growth in the Russian division was driven by better pricing and product mix and higher sales volumes in the seamless business, while lower large-diameter pipe volumes offset those gains. In the American division, revenue was up primar

  10. Slide 10: 2Q 2012 Adjusted EBITDA by Division vs. Prior Quarter

    2Q 2012 Adjusted EBITDA by Division vs. Prior Quarter 2Q 2012 Adjusted EBITDA 2Q 2012 Adjusted EBITDA per Tonne +16% 210 -19% +7% 400 180 350 150 300 +2% U.S.$ mln 120 250 U.S.$ -20% 204 200 90 176 357 362 338 150 289 60 245 250 86 +17% 100 30 68 50 15 17 0 0 Russia Americas Europe Russia Americas E

  11. Slide 11: 1H 2012 Adjusted EBITDA by Division vs. Prior Year

    1H 2012 Adjusted EBITDA by Division vs. Prior Year 1H 2012 Adjusted EBITDA 1H 2012 Adjusted EBITDA per Tonne -12% -12% -5% 450 400 360 350 300 -5% 300 240 U.S.$ mln 250 U.S.$ 430 -4% 367 370 200 380 180 350 323 150 261 120 248 100 160 154 -8% 50 60 35 32 0 0 Russia Americas Europe Russia Americas Eu

  12. Slide 12: Seamless – Core to Profitability

    Seamless – Core to Profitability U.S.$ mln QoQ, YoY, 2Q 2012 1H 2012 (unless stated otherwise) % %  Sales of seamless pipes Volumes- Pipes, kt 663 +9% 1,272 +3% generated 61% of total Revenue in Net Sales 1,084 +2% 2,143 +6% 2Q 2012 and 62% of total Revenue in 1H 2012 SEAMLESS Gross Profit 285 -7%

  13. Slide 13: Working Capital Position

    Working Capital Position Accounts Receivable (days) Accounts Payable (days) 100 94 120 107 80 100 80 75 60 56 56 64 50 52 63 60 50 40 40 20 20 0 0 2008 2009 2010 2011 1H 2012 2008 2009 2010 2011 1H 2012 LTM LTM Inventories (days) Cash Conversion Cycle (days) 140 132 119 120 120 100 90 100 91 95 84 9

  14. Slide 14: Debt Profile

    Debt Profile TMK Continues to Optimize its Capital Structure and Develop a Flexible, Cost-effective Debt Portfolio Maturity Profile as of 30 June 2012  As of 30 June, 2012, Total Debt accounted for U.S.$3,710 mln 800  73% of Total Debt is long-term 714 699  29% of Total Debt is represented by Eur

  15. Slide 15: Investment Projects

    Investment Projects Russia USA Construction of EAF at Tagmet R&D Center in Houston Total Investment: U.S.$ 247 mln Investment: U.S.$26 mln Remaining Investment: U.S.$ 120 mln Timing: Building Completed in 2011 The in-house R&D Center Project Launch: 2013 Final test equipment will allow for significa

  16. Slide 16: Appendix – Summary Financial Accounts

    Appendix – Summary Financial Accounts 16

  17. Slide 17: TMK Income Statement

    TMK Income Statement U.S.$ mln 2011 2010 2009 2008 2007 Revenue 6,754 5,579 3,461 5,690 4,179 Cost of Sales (5,307) (4,285) (2,905) (4,252) (2,891) Gross Profit 1,446 1,293 556 1,438 1,288 Selling and Distribution Expenses (411) (403) (313) (344) (238) General and Administrative Expenses (283) (232)

  18. Slide 18: TMK Statement of Financial Position

    TMK Statement of Financial Position U.S.$ mln 31-Dec-11 31-Dec-10 31-Dec-09 31-Dec-08 31-Dec-07 ASSETS Cash and Bank Deposits 231 158 244 143 89 Accounts Receivable 772 720 580 758 541 Inventories 1,418 1,208 926 1,176 782 Prepayments 200 172 223 213 238 Other Financial Assets 4 4 4 4 - Total Curren

  19. Slide 19: TMK Cash Flow

    TMK Cash Flow U.S.$ mln 2011 2010 2009 2008 2007 Profit / (Loss) before Income Tax 544 185 (427) 308 699 Adjustments for: Depreciation and Amortisation 336 301 313 248 140 Net Interest Expense 271 412 406 263 90 Others (101) 44 36 228 (9) Working Capital Changes (156) (527) 558 (81) (386) Cash Gener

  20. Slide 20: Thank You

    Thank You TMK Investor Relations 40/2a, Pokrovka Street, Moscow, 105062, Russia +7 (495) 775-7600 [email protected] 20

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