PROPRIETARY & CONFIDENTIAL TMK 9M 2011 IFRS Results November 2011
Presentation Outline Company Overview 4 Financial Review 8 Russia 17 North America 22 Investments 28 Appendix Summary Financial Accounts 30 Appendix TMK Global Assets 34 Contacts 37 3
Company Overview 4
Investment Highlights One of the largest tubular capacity Global High exposure to the oil & gas industry: approximately 75% of 2010 shipments went to the oil & gas sector Market Leader Leading producer of value-added steel pipes for…
Global Operational and Sales Footprint Steel Tubular Industry Leader TMKs strategic positioning made it the steel tubular industry leader, with nearly 4 million tonnes sold in 2010 and more than 2 million tonnes sold in 1H 2011.…
Russian and North American Synergies Both Russia and North America have benefitted during the past three years since the acquisition of IPSCO Benefits for Russia Benefits for North America Best business practices Russia is implementing…
Financial Review 8
9M 2011 Sales Volumes by Segment and Group of Product Russia Americas Europe Thousand Change, Change, Change, 9M 2011 9M 2010 9M 2011 9M 2010 9M 2011 9M 2010 Tonnes % % % Seamless Pipe 1,421 1,253 13% 205 184 11% 137 125 10% OCTG 689…
9M 2011 Key Consolidated Financial Highlights Summary 9M 2011 Financial Highlights 3Q 2011 Revenue U.S. mln(1) 2,000 (unless stated otherwise) 9M 2011 9M 2010 Y-o-Y, % Net Sales 5,151 3,931 31% 1,500 U.S. mln Adjusted EBITDA (2) 827…
9M 2011 Key Financial Highlights by Division (1) Russia Americas Europe U.S. mln Change, Change, Change, 9M 2011 9M 2010 9M 2011 9M 2010 9M 2011 9M 2010 (unless stated otherwise) % % % Volumes- Pipes, kt 2,384 2,122 12% 647 605 7%…
Revenue Growth by Segments and Groups of Products Both seamless and welded businesses contributed to revenue growth. Revenue growth in the Russian division was driven by better pricing and product mix and higher sales volumes, while in…
Seamless Business Drives EBITDA Growth Seamless Business Remained a Major Contributor to the Net Profit Increased as a Result of Higher EBITDA and EBITDA Growth Lower Finance Costs 1,000 +300 -47 300 +66 -64 -56 +177 -32 +16 278…
9M 2011 Key Financial Highlights by Group of Product U.S. mln 9M 2011 9M 2010 Change, % (unless stated otherwise) Volumes- Pipes, kt 1,763 1,562 13% Core Business Seamless Net Sales 2,942 2,131 38% Sales of seamless pipes generated…
Debt Profile TMK Continues to Optimize its Capital Structure and Develop a Flexible, Cost-effective Debt Portfolio Maturity Profile as of 30 September 2011 As of 30 September 2011, Total Debt accounted for U.S.3,769 mln 800 88% of…
Russia 17
Oil Production and Capex Needs in Russia Deteriorating oil production conditions at mature The average productivity of oil wells in Russia fields, particularly in the Urals and Western Siberia, remains below most of other major oil…
Russian Drilling - Moving East for Growth The Increasing complexity of oil and gas production in Russia is expected to increase demand for higher value-added products CAGR 2007-2012F 5.6% Drilling Activity, km 24 000…
Increasing Complexity of Russian Drilling The Share of Greenfield Production is Projected to Reach 17% Horizontal Drilling is Expected to Double in the Next 5 Years in 2015 Compared to Just 6% in 2010 21 20% 560 18 480 mln…
Russian LDP Demand Drivers Large-diameter pipe demand to remain robust as regions of production continue to move further away from consumption centers Shtokman Bovanenkovo Murmansk Bovanenkovo- Novy Ukhta Urengoy Murmansk-…
North America 22
Shift to Unconventional Drilling Conventional (Vertical) Drilling Unconventional (Horizontal) Drilling (Hydraulic Fracturing) Seamless / Premium Welded Tubing Connections Vertical Horizontal Shale Shale Length, km Up to 5 Up to…
Increasing Drilling Complexity Increasing Service Intensity Service intensity in 2008 multiplied by 3-5 Average Average Field Period Hydraulic Lateral Number of AFE(1) times compared to 2006, and by more than 7 Length (ft) Stages…
U.S. 0 1 2 3 4 5 6 Marcellus Wet (core) 2,8 Pinedale 2,9 Marcellus Dry (core) 3,0 major shales. Fayetteville (3.4 Bcf) 3,0 Granite Wash (Horizontal) 3,1 Huron Shale 3,2 Gas above U.S.4/Mcf Deep Bossier (E.Texas)…
US Drilling Stronger than Ever Drilling Activity Brought Months of OCTG Supply Back to Normal Major U.S. Shale Oil & Gas Plays 16 2 500 Months of Supply 14 US Rig Count 2 000 Bakken 12 Months of Supply U.S. Rig Count 10 1…
Canadian Oil Sands Three Major Oil Sands Deposits Canadian Oil Sands Fast Facts Around 170 billion of Oil Sands reserves Potential for over 100 years of production Mining less than 200 feet deep: 20% of reserves Peace River Deposit…
Investments 28
Investment Projects Russia USA Construction of EAF at Tagmet R&D Center in Houston Investment: U.S. 452 mln Investment: U.S.26 mln Project Launch: 2013 Timing: End 2012 The in-house R&D Center Capacity Increase: + 950 k tonnes will…
Appendix Summary Financial Accounts 30
TMK Income Statement U.S. mln 2010 2009 2008 2007 2006 Revenue 5 578 3 461 5 690 4 179 3 402 Cost of Sales (4 285) (2 905) (4 252) (2 891) (2 353) Gross Profit 1 293 556 1 438 1 288 1 049 Selling and Distribution Expenses (403)…
TMK Statement of Financial Position U.S. mln 31-Dec-10 31-Dec-09 31-Dec-08 31-Dec-07 31-Dec-06 ASSETS Cash and Bank Deposits 158 244 143 89 144 ST Investments 4 4 4 1 175 Accounts Receivable 720 580 761 541 286 Inventories 1,208 926…
TMK Cash Flow U.S. mln 2010 2009 2008 2007 2006 Profit / (Loss) before Income Tax 185 (427) 308 699 622 Adjustments for: Depreciation and Amortisation 301 313 248 140 117 Net Interest Expense 412 406 263 90 58 Others 44 36 228 (9)…
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