#1TMK OOO TMK Investor Presentation December 2013#2Disclaimer 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 officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this presentation. TMK This presentation contains certain forward-looking statements that involve known and unknown risks, uncertainties and other factors which may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. OAO TMK does not undertake any responsibility to update these forward-looking statements, whether as a result of new information, future events or otherwise. This presentation contains statistics and other data on OAO TMK's industry, including market share information, that have been derived from both third party sources and from internal sources. Market statistics and industry data are subject to uncertainty and are not necessarily reflective of market conditions. Market statistics and industry data that are derived from third party sources have not been independently verified by OAO TMK. Market statistics and industry data that have been derived in whole or in part from internal sources have not been verified by third party sources and OAO TMK cannot guarantee that a third party would obtain or generate the same results. 2#3Growing Confidence ☐ ☐ TMK Strong demand in key Russian domestic market driven by upstream capex growth US volumes likely to improve amid signs that prices are stabilising - Coal/Gas switching in power generation - - - Export of LNG starting Economic recovery US manufacturing renaissance as companies "on-shore" investment ■ Clear programme of net debt reduction post capex and M&A expansion ◉ Improved investor access to help improve liquidity ◉ Aspire to best in class Corporate Governance 3#4TMK- Global Supplier of Full Range of Pipes for Oil and Gas Industry Steel Tubular Industry Leader TMK TMK's strategic positioning made it the steel tubular industry leader, with over 4 million tonnes sold in 2012. Truboplast Pipe Maintenance Department ●Sinarsky Seversky❤ Moscow OROSNITI *Central Pipe Yard •Orsky OEdmonton •Calgary Cologne • Astana Zurich Resita Volzhsky❤ Tagmet Kaztrubprom Lecco Artrom Baku Camanche Brookfield •Ashgabat Geneva⚫ Wilder Koppel Tulsa ●Ambridge Odessa❤ ●Blytheville Baytown Dubai Houston Abu Dhabi Sohar Management Production O Oil & Gas Services O Scientific and Technical Center Sales and Marketing Beijing ⚫Singapore Capacity (tons) North America Europe Russia and CIS * Total Steelmaking •Cape Town 450,000 450,000 2,450,000 3,350,000 Seamless Pipes 300,000 220,000 2,486,000 3,006,000 Welded Pipes 1,000,000 2,120,000 3,120,000 Heat Treat 441,000 1,500,000 1,941,000 Threading 1,230,000* 1,560,000 2,790,000 Note: *Including ULTRA Premium connections of 240,000 tons and OFS capacity of 700 000 joints Source: TMK data 4#5Leading Global Supplier of Pipes for Oil and Gas Industry A world leading tube producer by sales volumes in 2012 and last 3 years Sales Volumes (thousand tonnes) 3,962 4,186 4,237 TMK 1,843 2,119 2010 1,844 2,342 2011 1,743 ■Seamless pipes Welded pipes 2,494 2012 Source: TMK data ☐ Local producer in countries which account for 66% of global drilling activity ☐ High exposure to the oil and gas industry: approximately 75% of sales volumes went to the oil and gas sector in 2012 2012 Global Drilling Activity by Geography (Number of Wells Drilled) Focus on Oil & Gas Industry 2012 Sales Volumes by Industry (%) SE Asia Middle East 3% 2% Africa 2% South America 6% Russia 7% Canada 10% China 24% Source: Spears & Associates US + Russia + Public Utilities US 46% Middle East + Canada: 66% Other (Machine Building, Constructing & etc.) 25% Source: TMK data Oil & Gas 75% 5#6Diversified Business Model Diversified Product Portfolio and Customer Base Sales Volumes by Product (2012) Welded OCTG Welded LD 9% 10% Welded Line Pipe 10% Source: TMK data Welded Industrial 13% Seamless Industrial 13% Diversified Geographical Reach Seamless OCTG 32% Seamless Line Pipe 14% TMK Revenues by Country (2012) & Gulf Region 3% Central Asia & Caspian Region 5% Europe 7% Middle East Other 1% Key Considerations High degree of diversification enabling earnings resilience. TMK Geographical diversification seeking to mitigate swings in geographical demand (Russian division 55% and American division 30% of 2012 revenues). Diversified product portfolio, including full range of seamless and welded pipes. Focus on higher value added products, including seamless pipes and OCTG. Diversified customer base covering end users in oil and gas and industrial sectors (top 5 customers represented 26% of sales volumes in 2012). Long-term relationships with Russian oil and gas majors (Rosneft, Surgutneftgas, Lukoil, TNK-BP and Gazprom). Americas 30% Russia 55% Source: TMK data 9#7Group Wide Confidence Based on Solid Industry Fundamentals ■ Complex unconventional drilling in both US and Russia forecast to grow, Russian horizontal drilling forecast to grow by CAGR 14% in 2012-15 Forecast horizontal drilling in Russia TMK 2012-2015 CAGR 14% 4,500 4,400 4,000 4,000 3,600 3,500 3,000 3,000 2,500 2,235 2,000 1,475 1,549 1,649 1,795 1,387 1,500 1,184 1,000 500 0 2005 2006 2007 Source: RenergyCO 2012 2008 2009 2010 2011 2012 2013E 2014E 2015E Premium connections volumes expected to double over same period TMK's premium products sales in the US grew significantly and are now larger than in Russia Thousand tonnes 300 285 250 208 145 200 138 100 150 41 100 140 50 97 108 0 2010 2011 2012 ■Russia ■ US Source: TMK Estimates 7#8TMK Group Wide Confidence Based on Solid Industry Fundamentals ☐ Growing requirement for customer specific solutions plays to TMK strengths Arctic steel High temperature SAGD Corrosion resistance Premium connections "fit for purpose" Pricing improvement anticipated in US when trade case is settled - but volume growth comes first ■ Increased demand for technical solutions based on R&D integrated approach across all product lines and divisions - . E.G. our 3 year technical cooperation programs with Gazprom on Development of Hydrogen Sulphide resistant casings • Integration of dopeless pipes Integration of Cr13 OCTG etc. Or Gazprom Neft • Integration of streamlined joints Development of specific anti-corrosion materials etc. 8#9Russian Market Overview Our Goals is to extract even more value from our market leading position TMK enjoys market leading position in the Russian market of Seamless OCTG TMK's focus on seamless pipes is reflected in its market shares in Russia TMK's market shares in the Russian market (%), as of 1H13 60% 50% 40% 30% 59% 54% 20% 33% 28% 10% 21% 10% 0% Seamless line Seamless OCTG pipe pipe Seamless industrial pipe Source: TMK estimates Welded line pipe Large diameter Welded industrial pipe Russian oil majors forecast to increase upstream capex circa 25% in 2014 pipe U.S.$ bn 40 35 32 31 30 30 27 26 21 24 19 20 20 10 0 2008 2009 ■LUKoil ■ Rosneft 2010 Source: Citi equity research 2011 37 34 2012 2013 ■TNK-BP 2014 2015 ■ Tatneft ■ Bashneft 2016 TOTAL ■Gazprom Neft ■ SurgutNG TMK#10Russian Market Overview And TMK Continued investment in technology solutions, R&D and oil field services enhancing our position Demand is growing particularly for solutions in complex, unconventional drilling where our product suite provides clear market advantages Russian oil production 11,300 In addition Thousand barrels per day 10,300 Northern Timan Pechora fields*** Prirazlomnoye Yamal fields Gazprom, SE, NOVATEK, Rospan condensate Caspian TNK-Uvat 9,300 Vankor, Talakan, Verkhnechonsk PSA 8,300 7,300 2007 2011 Source: Sberbank CIB Brownfield 2015E Other East Siberia 2019E More traditional markets require servicing with enhanced solutions, e.g. a wider range of products 10#11Solutions, not Product, the Differentiator ☐ Increase in unconventional drilling requires a different approach TMK Increase in usage of seamless pipe Horizontal drilling increasing demand for premium threads, heat treated pipe and connections Differentiation through both R&D and working on solutions for specific customised product An example is TMK PF premium connections and the innovative coating that were used for assembling casing columns run into the wells at Rosneft's Vankorskoye field. Main benefits: - Pipe is ready for making-up No cleaning on the yard is needed Pipe thread is already protected from corrosion Saving cost and time of operators - Core product for the offshore Also growing our oil field service offering - Repairs and maintenance - Cleaning - Threading and running pipe. - Storage and services. 11#12Changing approach to product mix Traditional approach of supplying conventional product at market prices ☐ Focus now on supplying higher value, higher margin product Seamless OCTG sales now account for 35% of Russian sales, 5yr CAGR 6% However, LDP demand is underpinned by multiple construction projects eg. South Stream Pipeline Gross margin, % 30% 28% 65% 27% 26% 26% 25% 20% 15% 10% 5% 53% 0% 2010 Source: TMK data 60% 62% 55% 59% 58% 2011 Share of seamless tubes in revenues 2012 50% 3Q 2013 Seamless tubes gross margin Share of seamless product in revenues (%) TMK 12#13Low Cost Vertically Integrated Producer Key Considerations Structural cost advantages over major international competitors: Russia is one of the lowest cost regions for steel production. Fully vertically integrated seamless pipe production (upstream and downstream operations) in all divisions. Almost self-sufficient in steel billets. Both Russia and North American businesses have benefitted from significant synergies and complementarily during the past three years since the acquisition of IPSCO. Ability to generally pass cost of steel increase to customers albeit with some time lag. Vertical Integration in Seamless Business Raw Materials Costs can Generally be Passed Through to Customers Cost of Sales Structure (2012) Repairs and Other maintenance Energy and utilities 8% Staff costs 14% 3% Note: Excluding depreciation and amortisation Source: TMK IFRS accounts 7% Raw materials and consumables 68% TMK Source: TMK • Preparation scrap 1. Melting 2. Treatment of steel in ladle furnance 3. Vacuum degassing (applicable for high grades of steel) 4. Continuous steel casting. Production of billets 5. Cutting of billets + Preparation of deoxidizers, materials and ferroalloys Charging of steel making furnance 6. Cooling and marking of billets 7. Billet heating 8. Cross-rolling piercing 9. Hydrodescaling 10. Elongating 11. Stretch. reducing mill 12. Cooling 13. Batch sawing in circular furnance 14. Heat treatment 15. Quality control 16. Threading, thread inspection 17. Coupling screw-on 18. Hydrostatic Testing and drifting 19. Protectors screw-on and coating application 20. Storage 13#14Competition TMK faces competition from variety of sources but no dominant player ☐ Ukraine manufacturers constrained by new duty implications ☐ ChelPipe and Interpipe constrained by financial positions TMK's has capacity in place for thread premium connections and more seamless unlike competitors But our approach is to be: ☐ ☐ ☐ Customer focused service and technology approach delivering results Investment in R&D maintain competition advantage With our capex programme generating significant cost and capacity advantage Main Investment Projects Russia Construction of EAF at Tagmet Project Launched: 2013 Total capacity: 1 million tonnes Capacity Increase: 600 thousand tonnes Construction of FQM Mill at Seversky Pipe Plant Project Launch: 2014 Total capacity: 600 thousand tonnes Capacity increase: 250 thousand tonnes USA Source: TMK data Threading Period: 2012-2017 Additional Capacity: 230kt Heat Treatment Period: 2012-2017 Additional Capacity: 280kt Seamless margins increasing from 26% in 2010 to 27% in 3Q 2013 TMK 14#15Our take on the US market ☐ Pricing of natural gas is key demand driver ☐ By 2016 US will start exporting LNG Gas/coal switching for electricity generation already happening with additional catalysts from improving air standards (MATS) and CO2 emission reductions (US EPA) Domestic demand rises as economic recovery gathers momentum We are forecasting a 300 rig increase over next three years Our OCTG products are key - Best premium connections - - Best gas-tightness in the industry - key for gas TMK products carry premium pricing advantage US Electricity Generation by Fuel 1991 - 2015E 4,500 Million kW per year 3,600 1993 2,700 4% 153% 1,800 19% 900 11% 13% 0+ 1991 1993 1995 1997 1999 2001 2003 2005 ■Natural Gas ■Renewables* ■Nuclear Source: EIA short term energy outlook October 2012 2007 2009 ■ Coal 2011 2012 i 1% 38% 19% 13% 30% 2013E 2015E ■Oil and other liquids 15 TMK#16US Rig Count US Market Stabilising TMK US market has been difficult with low rig utilisation and low gas pricing suppressing drilling activity Premium tubular content increasing with unconventional drilling activity US Oil and Gas Rigs by Type of Drilling Increasing long laterals drive growth Footage drilled per rig, '000 feet 400 2,100 1,800 1,500 1,200 900 600 300 350 300 Vertical -24% 250 200 Horizontal - 64% 150 100 50 Directional - 12% 0 0 Jan-09 Sep-09 May-10 Jan-11 Oct-11 Source: Baker Hughes Jun-12 Feb-13 Nov-13 Source: Baker Hughes 2006 2007 ☐ Growing sign of LNG export market developing driving both pipeline and further drilling growth Trade case pending, whilst delayed, a more favorable pricing regime may follow 16#17Increasing Complexity of Lateral Drilling Fuelling Demand The "Octopus" Structure . 1 pad, 50 wells - a whole lot of pipe RCD2 Taken from Brian Hicks article "The Strangest Looking Octopus You'll ever see" December 13th 2012 Energy and Capital TMK 17#18TMK Our New Approach Driving Growth TMK strength lies in its diversity ☐ Group has full range of products for conventional and unconventional markets US wide presence- being close to the customer TMK strength lies in its technology Deliberate move from commodity product to technology lead solutions Fit for purpose applications Creating long term customer partnerships benefiting from our technical and commercial knowhow - No inventory risk for the end user - Prices are negotiated based on transparent indexes Joint Product Development program Approach yielding results Increasingly moving to long term contracts (1-3 years) with International Oil Companies 70% of OCTG output currently contracted with a target of 90% by 2014 We benefit from improved planning, procurement and production efficiencies that deliver higher margins Introduction of new higher value, higher margin technology driven products – replacing lower margin more basic products As well as our unique products.... 18#19Premium Solutions: TMK UP ULTRA-SF 2003 ULTRA-FJ 2003 ULTRA-FX 2003 ULTRA CX ULTRA QX ULTRA DQX 2008 2009 2011 Cal IV Cal IV Cal II пикал Cal IV Cal II TMK Ultra Premium Connections TMK Global Supplies & Services Unique range of Premium products Onshore/offshore Sour gas Thermal Arctic Horizontal and extended reach Drilling with casing TMK Steam-Assisted Gravity Drainage (SAGD) Connections are available with «Greenwell»> environment friendly technology TMK 1 2004 2005 TMK FMC TMK CS TMK TTL 01 2005 2005 TMK GF 2005 TMK PF 2007 TMK FMT 2008 TMK PF ET 2008 TMK TDS TMK CWB 2010 2011 TMK PF Tubing 2012 Greenwell 2013 Cal II Cal IV Cal II Cal IV Implementation of new technologies and services according to regional conditions US expertise gives significant growth opportunities in Russia CaMV 19#20New Product Development and New Customer Focus in US Whilst volumes are increasing marginally, New Year launch of higher margin/value solutions will further drive revenue growth Moving up the value chain CO2 partial pressure (atm) Severe Duplex Stainless Steel High Ni Alloy 13Cr Super 13Cr Value Chain Carbon Steel Low Alloy Steel Alloy Steel for Sour Service H2S partial pressure (atm) Source: TMK data Severe Customer fulfilment key - offering integrated solutions to their complex drilling needs New approach to customer mirrors changes to approach in Russia - moving up value chain, offering tailored solutions and increase in services 20 TMK#21US Outlook ☐ Management increasingly confident of meeting sales growth targets Better visibility from being on major programmes Better margins/mix following new product launches EBITDA margin bottomed in Q1 2013 and rose to 10% in 3Q 2013 100 90 70 60 50 21% Adjusted EBITDA, US$ mln ON WAS 1Q 2012 Source: TMK data 14% 25% 20% 15% 10% 10% 9% 8% 7% 5% 2Q 2012 3Q 2012 4Q 2012 Adjusted EBITDA, US$ mln 5% 0% 1Q 2013 2Q 2013 EBITDA Margin, % 3Q 2013 EBITDA Margin, % Improving outlook on demand side with four LNG terminals so far approved (with more seeking approval), plus exports to Mexico through new pipelines, Coal-to-Gas switching and the CO2 kicker in the power market. Plus industrial demand for the next 5 years could go beyond the historical 1.4% GAGR of the last 5 years. 21 TMK#22TMK Other US Challenges to Address Market expects positive outcome to trade case But benefits may be competed away and Maybe less significant than expected Deep water offshore is an attractive area we are looking to address having already pre- qualified Already qualified to operate in shallow water 222#23Other Investor Issues Addressed Recognise that with a free float of 30% liquidity is limited Active IR programme being stepped up with recently introduced Capital Market days - London 8th October - New York 10th October Non deal/non result road shows being undertaken - 5th -20th November ☐ ☐ ☐ Increasing sell-side analyst coverage Aspire to highest quality corporate governance Truly independent non-executive directors appointed High degree of transparency across the business TMK 23 23#24Deleveraging and Capex Plan Group wide $1.1bn capex programme over next 3 years with circa $800m on expansion and circa $300mln on maintenance capex 840 US$mln TMK 2008 445 395 402 387 314 2009 2010 2011 2012 2013E Source: TMK data Focus of capex programme has been seamless pipes and facility modernisation in Russia and US 15 Key Production Facilities mln tonnes 12 2.50 • 5 EAFs • 7 Continuous Casters • 11 Hot-Rolled Seamless Mills 2.09 ■Threading ■ Heat Treatment • 6 3.46 ■ Welded pipe 0.77 ■Seamless pipe • 0.73 CO ■Steelmaking • 1.78 2.98 • 2.03 3 3.70 2.37 0 2004 2014 pro-forma Source: TMK data 76 Cold-Rolled Seamless Mills 29 Welded Rolling Mills 37 Heat-Treatment Lines 48 Threading Lines 10 Coating Lines R&D Centres Ten manufacturing plants are ISO 14001:2004 certified and are audited annually All plants are certified with OHSAS 18001:2007 (Occupational Safety and Health Management System) 24#259M 2013 Summary Financial Highlights Sales increased YoY mainly due to higher consumption of LDP in Russia and welded OCTG pipe in the American division Thousand tonnes 3,200 2,400 1% YoY 1,600 3,156 3,197 800 0 9m2012 9m2013 TMK Revenue declined YoY due to weaker results of the American and European divisions and a negative effect of currency translation 5,400 4,500 €3,600 $92,700 S -4% YoY 5,056 4,861 1,800 900 0 9m2012 9m2013 Adjusted EBITDA declined YoY due to weaker pricing and an unfavorable sales mix mostly in the American and European divisions Net income declined YoY as a result of a decrease in gross profit partially offset by lower operating expenses and finance costs -13% YoY 900 20% 16% 750 14% 16% U.S.$ mln 600 12% 450 809 705 8% 300 EBITDA Margin, % 4% 150 0 0% 9m2012 9m2013 Source: TMK data U.S.$ mln -36% YoY 300 250 200 150 250 100 160 50 0 9m2012 9m2013 25#26Thousand tonnes 9M 2013 Sales by Division and Group of Product 9M 2013 Sales by Division -0.4% 2,400 2,000 1,600 1,200 2,333 2,325 +8% 800 Thousand tonnes -4% 400 692 746 131 126 0 Russia Americas Europe ■ 9m2012 ■ 9m2013 9M 2013 Sales by Group of Product -4% 2,000 1,600 +9% 1,200 1,876 1,805 800 1,392 1,280 400 0 Seamless Welded ■ 9m2012 ■ 9m2013 Source: TMK data TMK Russian division sales remained almost flat YoY as decrease in seamless pipe sales was mostly offset by higher LD and welded line pipe volumes. American division sales increased YoY due to higher seamless and welded OCTG pipe volumes, though partially offset by lower welded line pipe sales. European division sales declined YoY due to lower seamless pipe volumes. Seamless pipe decreased YoY due to lower volumes in the Russian and European divisions. ■ Welded pipe sales increased YoY due to growth of LDP and welded OCTG pipe volumes. ■ Total OCTG sales increased by 2% YoY supported by higher volumes for the American division offset by weaker sales for the Russian division. 26#27U.S.$ mln 9M 2013 Revenue by Division 9M 2013 Revenue -2% 3,600 3,000 2,400 1,800 3,501 3,439 -7% 1,200 U.S.$/tonne 9M 2013 Revenue per Tonne* -14% 2,000 -14% -1% 1,600 1,200 1,964 1,875 1,693 800 1,619 1,501 1,479 -17% 400 600 1,298 1,208 257 214 0 Russia Americas ■9m2012 ■ 9m2013 Europe Revenue for the Russian division decreased mainly due to a negative effect of currency translation and lower seamless pipe sales. A decline was partially offset by higher LD pipe sales. Revenue for the American division decreased mainly due to the deterioration of the pricing environment in the U.S. following an increase in import volumes. Revenue for the European division decreased as a result of a weaker pricing and an unfavorable sales mix. Source: Consolidated IFRS Financial Statements, TMK data NNote: 0 Russia Americas ■ 9m2012 ■ 9m2013 ** Europe** * Revenue per tonne for all three divisions includes other revenue ** Revenue for the European Division includes revenue from steel billets sales Russian division revenue per tonne slightly decreased as a result of unfavorable sales mix (lower volumes of seamless pipe) and a negative effect of currency translation. American division revenue per tonne declined as a result of weaker pricing. European division revenue per tonne declined as a result of lower pricing. CCertain monetary amountsppercentages and other figures included in this presentation are subject to rounding adjustments. Totals therefore do not always add up to exact arithmetic sums. 27 TMK#28U.S.$ mln 9M 2013 Adjusted EBITDA by Division 9M 2013 Adjusted EBITDA 9M 2013 Adjusted EBITDA Margin +3% 600 500 400 20% 17% 17% 16% 15% 16% 12% 000 300 588 571 10% 8% -51% 8% 200 -51% 4% 100 195 95 21 43 0 Russia Americas ■ 9m2012 ■9m2013 0% Russia Americas Europe Europe ■ 9m2012 ■9m2013 TMK Russian division Adjusted EBITDA increased, mainly driven by lower SG&A. ■ American division Adjusted EBITDA decreased primarily due to significantly weaker pricing of welded and seamless pipe, not fully offset by lower raw materials prices. European division Adjusted EBITDA declined as falling average selling prices of pipe products outpaced falling scrap prices. Russian division Adjusted EBITDA margin improved largely due to lower SG&A as a percentage of revenue. ■ American division Adjusted EBITDA margin fell mainly due to weaker pricing across all product lines. European division Adjusted EBITDA margin declined due to low average selling prices. Source: TMK Consolidated IFRS Financial Statements, TMK data NNote: CCertain monetary amountsppercentages and other figures included in this presentation are subject to rounding adjustments. Totals therefore do not always add up to exact arithmetic sums. 28#29Deleveraging and Capex Plan ☐ Maintenance capex anticipated to be lower than depreciation post 2013 Benefits of capex programme reflected in growing confidence for future years EBITDA growth Dividend distribution set at minimum 25% of net income Commitment to reduce Net Debt/EBITDA from current level to 2.5x within 3 years Debt maturity profile as of September 30, 2013 U.S.$ mln 900 750 600 897 413 450 515 494 368 500 345 290 291 300 155 500 485 494 500 368 150 290 291 191 15 0 4Q 2013 2014 2015 2016 2017 2018 2019 2020 ■ Bank Loans ■ Bonds Source: TMK Management Accounts, figures based on non-IFRS measures, estimates from TMK management 86% of debt is unsecured ☐ More than $1bn of undrawn commetted credit lines facilities 29 TMK#30Improving Debt Structure 84% of total financial debt is long-term Net Debt and Short-term Debt Share Net Debt, US$ mln 4,000 3,711 3,552 3,656 3,698 30% 3,500 25% 27% 3,000 18% 20% 2,500 16% 14% 2,000 15% 1,500 10% 1,000 5% 500 0 + 0% 2010 2011 2012 9m2013 Net Debt, US$ mln Share of Short-term Debt, % Source: TMK data Over US$1 bln committed credit lines maturing up to 2016 Only 14% of debt is secured with assets and mortgages More than US$1bln of undrawn committed credit lines to cover short-term Debt 1,200 U.S.$ mln ■ Utilized Credit Facilities 1,000 ■ Unutilized Credit Facilities 800 600 400 200 0 2014 2015 Source: TMK Management Accounts, figures based on non-IFRS measures, estimates from TMK management 2016 Unlimited Share of ST Debt, % 30 TMK#31Strategy for Future Growth Leverage our new capacity to sell more high margin seamless pipes into our existing markets Improve our product mix through our technology advancements which will feed through from early 2014 TMK Improve the financial performance by focusing on profitable work rather than just low margin high volume pipe. Capex investment in enhancing facilities mainly completed with free cash flow reducing debt Continue to develop and sell more premium products for challenging, harsh environments such as the Arctic and Caspian sea. Expand our Oil Field Services to a more "one-stop shop" approach to greater fulfil customers' needs 31#32Conclusion EBITDA growth expected - Net Debt reduction follows. Excellent fundamentals underpin Russian market growth Leveraging relationships with Gazprom and Rosneft Importing our shale expertise to Russia from US ■ US market turning for TMK as product launches raise margins and revenues Longer term US outlook more favourable - key KPI to watch is gas price and demand 32 32 TMK#33Appendix - Summary Financial Accounts TMK 33#34Key Consolidated Financial Highlights (US$mln)(a) Revenue Adjusted EBITDA (b) Adjusted EBITDA Margin (%) Profit (Loss) Net Profit Margin (%) 2012 2011 2010 6,688 6,754 5,579 1,028 1,047 921 15% 15% 17% 282 385 104 4% 6% 2% Pipe Sales ('000 tonnes) 4,238 4,185 3,962 Average Net Sales/tonne (US$)(c) 1,578 1,614 1,408 Cash Cost per tonne (US$) (d) 1,168 1,207 1,027 Cash Flow from Operating Activities 787 386 929 Capital Expenditure(e) 402 314 445 Total Debt(f) 3,787 3,872 3,885 Net Debt(f) 3,552 3,711 3,656 Short-term Debt/Total Debt 16% 18% 27% Net Debt/Adjusted EBITDA 3.4x 4.0x 3.6x Adjusted EBITDA/Finance Costs 3.5x 3.5x 2.1x TMK (a) IFRS financials figures were rounded for the presentation's purposes. Minor differences with FS may arise due to rounding (b) Adjusted EBITDA is calculated as profit before tax plus finance costs minus finance income plus depreciation and amortisation adjusted for non-operating and non-recurrent items. In 1Q 2013 management amended its definition of Adjusted EBITDA to include accruals of bonuses to management and employees into the calculation of Adjusted EBITDA instead of actual cash payments. Management believes such an approach better reflects the Group's quarterly performance and eliminates fluctuations during the year. The comparative information in this presentation was adjusted accordingly. (c) Sales include other operations and is calculated as Revenue divided by sales volumes tonnes (d) Cash Cost per Tonne is calculated as Cost of Sales less Depreciation & Amortisation divided by sales volumes (e) Purchase of PP&E investing cash flows (f) Total debt represents interest bearing loans and borrowings plus liability under finance lease; Net debt represents Total debt less cash and cash equivalents and short-term financial investments Source: TMK Consolidated IFRS Financial Statements 34#35Income Statement TMK US$ mln Revenue 2012 2011 2010 2009 2008 6,688 6,754 5,579 3,461 5,690 Cost of Sales (5,204) (5,307) (4,285) (2,905) (4,252) Gross Profit 1,483 1,446 1,293 556 1,438 Selling and Distribution Expenses (433) (411) (403) (313) (344) General and Administrative Expenses (293) (283) (232) (204) (268) Advertising and Promotion Expenses (11) (9) (11) (5) (10) Research and Development Expenses (17) (19) (13) (10) (15) Other Operating Expenses, Net (57) (40) (34) (17) (45) Foreign Exchange Gain / (Loss), Net 23 (1) 10 14 (100) Finance Costs, Net (275) (271) (412) (404) (263) Other (16) 132 (12) (46) (85) Income (Loss) before Tax 405 544 185 (427) 308 Income Tax (Expense) / Benefit (123) (159) (81) 103 (110) Net Income (Loss) 282 385 104 (324) 198 Source: Consolidated IFRS Financial Statements CCertain monetary amountsp percentages and other figures included in this presentation are subject to rounding adjustments. Totals therefore do not always add up to exact arithmetic sums. NNote: 35#36Statement of Financial Position TMK US$ mln 2012 2011 2010 2009 2008 ASSETS Cash and Bank Deposits 225 231 158 244 143 Accounts Receivable 914 772 720 580 758 Inventories 1,346 1,418 1,208 926 1,176 Prepayments 180 200 172 223 213 Other Financial Assets 4 4 4 4 4 Total Current Assets 2,670 2,625 2,262 1,977 2,294 Assets Classified as Held for Sale 8 Total Non-current Assets 4,930 4,507 4,592 4,704 4,774 Total Assets 7,600 7,132 6,862 6,681 7,068 LIABILITIES AND EQUITY Accounts Payable 1,132 1,053 878 1,057 808 ST Debt 1,068 599 702 1,537 2,216 Dividends Other Liabilities 74 53 94 28 716 Total Current Liabilities 2,275 1,705 1,674 2,622 3,740 LT Debt 2,817 3,188 3,170 2,214 994 Deferred Tax Liability 302 305 300 272 371 Other Liabilities 124 110 110 83 52 Total Non-current Liabilities 3,243 3,602 3,580 2,569 1,417 Equity 2,082 1,825 1,607 1,490 1,910 Including Non-Controlling Interest 96 92 95 74 97 Total Liabilities and Equity 7,600 Net Debt 3,656 7,132 3,552 6,862 6,681 7,068 3,710 3,503 3,063 Source: Consolidated IFRS Financial Statements NNote: CCertain monetary amounts percentages and other figures included in this presentation are subject to rounding adjustments. Totals therefore do not always add up to exact arithmetic sums. 36#37Cash Flow TMK 326 275 US$ mln 2012 2011 2010 2009 2008 Profit/ (Loss) before Income Tax 405 544 185 (427) 308 Adjustments for: Depreciation and Amortisation Net Interest Expense 336 301 313 248 271 412 406 263 Others Working Capital Changes 34 (101) 44 36 228 (34) (156) (527) 558 (81) Cash Generated from Operations 1,006 894 415 886 966 Income Tax Paid (77) (107) (29) (33) Net Cash from Operating Activities 929 787 386 852 Capex (445) (402) (314) (395) Acquisitions (33) (510) (227) 740 (840) (1,185) Others 23 25 43 14 1 Net Cash Used in Investing Activities (455) (377) (271) (891) (2,024) Net Change in Borrowings Others (148) 4 103 582 1,780 (341) (339) (289) (447) (443) Net Cash Used in Financing Activities (489) (335) (186) 135 1,337 Net Foreign Exchange Difference 10 (2) (15) 4 2 Cash and Cash Equivalents at January 1 231 158 244 143 89 Cash and Cash Equivalents at YE 225 231 158 244 143 Source: Consolidated IFRS Financial Statements CCertain monetary amounts percentages and other figures included in this presentation are subject to rounding adjustments. Totals therefore do not always add up to exact arithmetic sums. NNote: 37#38WELDED SEAMLESS Seamless Core to Profitability - U.S.$ mln QoQ, YoY, 3Q 2013 9M 2013 (unless stated otherwise) % % Volumes- Pipes, kt 534 -17% 1,805 -4% Net Sales 872 -15% 2,982 -5% Gross Profit 233 -18% 826 -2% Margin, % 27% 28% Avg Net Sales / Tonne (U.S.$) 1,632 +3% 1,652 -1% Avg Gross Profit / Tonne (U.S.$) 437 -1% 457 +2% Volumes- Pipes, kt Net Sales 488 +3% 1,392 +9% 553 -1% 1,674 -1% Gross Profit 42 -31% 161 -41% Margin, % 7% 10% Avg Net Sales / Tonne (U.S.$) 1,135 -4% 1,202 -9% Avg Gross Profit / Tonne (U.S.$) 85 -34% 116 -45% Source: Consolidated IFRS Financial Statements, TMK data NNote: Sales of seamless pipe generated 59% of total Revenue in 3Q 2013 and 61% for 9m 2013. Gross Profit from seamless pipe sales represented 83% of 3Q 2013 total Gross Profit and 82% for 9m 2013 total Gross Profit. Gross Profit Margin from seamless pipes sales amounted to 27% in 3Q 2013 and 28% for 9m 2013. CCertain monetary amountsppercentages and other figures included in this presentation are subject to grounding adjustments. Totals therefore do not always add up to exact arithmetic sums. 38 TMK#39Appendix - Capital Structure and Corporate Governance TMK 39#40TMK Capital Structure and Dividend Policy Key Considerations TMK's securities are listed on the London Stock Exchange, the OTCQX International Premier trading platform in the U.S. and on Russia's major stock exchange - MICEX-RTS. As of 31 December 2012, 20.57% of TMK shares were in free float, with approximately 90% of them traded in the form of GDRs on the London Stock Exchange. As of 31 December 2012, the share capital of TMK was comprised of 937,586,094 fully paid ordinary shares or equivalent of 234,396,524 GDRs. One GDR represents four ordinary shares. Dividend Policy At least 25% of annual IFRS net profits is paid out as dividends. Starting 2007, dividends are usually paid semi-annually. ■ TMK resumed dividend payments in 2010 as in 2009 the Company posted a net loss for the year due to global industry crisis. 30% 30% 1.8 1.6 28% TMK shares and GDRs are included into several major Russia indices: MSCI Russia, MICEX M&M, MICEX MC. 1.4 1.2 Source: TMK Capital Structure 1.0 US$ 0.8 0.6 Rockarrow Investments Free float 20.58% 0.4 Ltd. 0.11% TMK Steel 0.2 TMK Bonds Ltd, incl. Net Loss for FY 2009 S.A. 7.63% ** affiliates* 71.68% 0.0 2008 TMK subsidiaries 0.01% 2009 Earnings per GDR *The main beneficiary is Dmitry Pumpyanskiy, Chairman of the Board of Directors of TMK. **TMK Bonds S.A. owns 17,876,489 GDRs of TMK, representing 71,505,956 TMK shares, or 7.63% of the share capital, securing obligations to convert into GDR US$ 412.5 million bonds issued by TMK Bonds S.A. in February 2010 and maturing in 2015. The bonds may be converted at USD 22.137 per GDR. Source: TMK Source: TMK 28% 26% 25% 25% 24% 2010 22% % 20% 2011 2012 ◆Payout ratio, % ■Dividend per GDR 40#41Corporate Governance Key Considerations The corporate governance practices of the Company in 2012 were in full compliance with the Corporate Governance Code. Starting 2011, TMK began publishing quarterly consolidated IFRS reports. The Board of Directors is comprised of 11 members, including 5 independent directors, 4 non-executive directors and 2 executive directors. As of 31 December 2012, members of the Board of Directors held no interests in affiliated companies. The Board of Directors has 3 standing committees, chairman of each committee is an independent director: Audit Committee; Nomination Committee; and Remuneration Strategy Committee. TMK's day-to-day operations are managed by the CEO and the Management Board consists of eight members. Throughout 2012 and to date, the Company has had an operational system of internal control which provides reasonable assurance as regards the efficiency of operations covering all controls. TMK ranks No 6 in S&P rating of corporate governance among Russian companies. Source: TMK DMITRY PUMPYANSKIY, Chairman of the Board of Directors, non-executive director. TMK Born in 1964. Graduated from the Sergey Kirov Urals Polytechnic Institute in 1986. PhD in Technical Sciences, Doctor of Economics. Founder and beneficial owner of TMK Relevant experience: Chairman of the Supervisory Board of Russian Agricultural Bank, Member of the Board of Directors at Rosagroleasing and SKB-Bank, President and Chairman of the Board of Directors of Sinara Group,, member of the Management Board of the Russian Union of Industrialists and Entrepreneurs, CEO at TMK, CEO at Sinara Group, Board member at various industrial and financial companies MIKHAIL ALEKSEEV, Independent director, Chairman of the Nomination and Remuneration Committee Born in 1964. Graduated from the Moscow Finance Institute in 1986. Doctor of Economics. Relevant experience: Chairman of the Management Board of UniCredit Bank, Chairman of the Board and President of "Rossiysky Promyishlenny Bank" (Rosprombank), Senior Vice President and Deputy Chairman of the Management Board of Rosbank, Deputy Chairman of the Management Board of ONEXIM Bank, Deputy Head of the General Directorate of the Ministry of Finance of the USSR. PETER O'BRIEN, Independent director, Chairman of the Audit Committee. Born in 1969. Graduated from Duke University (USA) in 1991 and obtained an MBA from Columbia University Business School in 2000. Took a course in AMP at Harvard Business School in 2011. Relevant experience: Member of the Management Board, Vice President, Head of the Group of Financial Advisors to the President of Rosneft, Co-Head of Investment Banking, Executive Director of Morgan Stanley in Russia, Vice President at Troika Dialog Investment Company, Press Officer at the US Treasury. ALEKSANDER SHOKHIN, Independent director, Chairman of the Strategy Committee. Born in 1951. Graduated from the Lomonosov Moscow State University in 1974. PhD, Doctor of Science, Professor. Relevant experience: President of the Russian Union of Industrialists and Entrepreneurs, President of the Higher School of Economics State University, Board member at Lukoil, Russian Railways, member of the Public Chamber of the Russian Federation, member of the State Duma, Minister of Labour and Employment and Minister of Economic Affairs, Head of the Russian Agency for International Cooperation and Development, twice appointed as Deputy Head of the Russian Government, Russia's representative to IMF and World Bank. OLEG SCHEGOLEV, Independent director, member of the Strategy Committee. Born in 1962. Graduated from the Moscow Finance Institute in 1984. Relevant experience: First Vice President at Russneft, First Deputy Chairman of the Management Board and First Deputy CEO at Itera, Executive Director at Slavneft, Deputy Head of the Department for Longterm Planning of the Fuel and Energy Complex at the Ministry of Energy of the Russian Federation, chief officer, deputy director, department head at Sibneft. ROBERT MARK FORESMAN, Independent director, member of the Board of Directors since 2012. Born in 1968. Graduated from Bucknell University (USA) in 1990 and Harvard University Graduate School of Arts & Sciences in 1993. Obtained a certificate from the Moscow Power Engineering Institute in 1989. Relevant experience: Head of Barclays Capital in Russia, Deputy Chairman of the Management Board at Renaissance Capital, Chairman of the Management Committee for Russia and CIS at Dresdner Kleinwort Wasserstein, Head of Investment Banking for Russia and CIS at ING Barings. 41#42Appendix - TMK Products TMK 42#43Wide Range of Products, Focus on Oil and Gas Seamless Welded OCTG Line Pipe Industrial Threaded pipes for the oil and gas industry including drill pipe, casing and tubing. The short-distance transportation of crude oil, oil products and natural gas. Automotive, machine building, and power generation sectors. OCTG Line Pipe Appendix 1 TMK Premium Threaded pipes for the oil and gas industry including drill pipe, casing and tubing. The short-distance transportation of crude oil, oil products and natural gas. Premium Connections (TMK UP) Premium connections are proprietary value-added products used to connect OCTG pipes and are used in sour, deep well, off- shore, low temperature and other high-pressure applications. Large- Diameter Construction of trunk pipeline systems for the long distance transportation of natural gas, crude oil and petroleum products. Oilfield Services Well equipment precision manufacturing, tools' rental, supervising, inventory management, threading and coating services. Industrial Wide array of applications and industries, including utilities and agriculture. B 43#44Utilisation of TMK Pipe Products in Oil and Gas Industry Sea platform Tubing Drill pipe Casing Oil field development Large diameter pipe Appendix 2 TMK Premium connections Oil settling tank Line pipe Petroleum refinery Oil storage Consumers F OCTG - Oil Country Tubular Goods (drilling, casing, tubing) used for oil & gas exploration, well fixing and oil & gas production (41% of total sales volumes in 2012); Line pipe - used for short distance transportation of crude oil, oil products and natural gas (24% of total sales volumes in 2012); LDP - large diameter pipe used for construction of trunk pipeline systems for long distance transportation of natural gas, crude oil and petroleum products (10% in total sales volumes in 2012). 44#45Shift to Unconventional Drilling Drives Demand for Seamless and Premium Products Conventional (Vertical) Drilling Unconventional (Horizontal) Drilling (Hydraulic Fracturing) Vertical Horizontal Shale Shale Length, km Up to 5 Up to 10 I % Seamless 35% 60% Fracturing % Premium <5% 30% Connections OCTG Tons 45 190 per Well % Small OD 25% 65% <7" Source: J.P. Morgan, Industry Sources Seamless / Welded Tubing Premium Connections Seamless / Welded Casing TMK Drilling with casing TMK CWB 0000 Drilling 45#46TMK Canadian Oil Sands Three Major Oil Sands Deposits Peace River Deposit Athabasca Deposit Calgary Cold Lake Deposit 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 Drilling more than 200 feet deep: 80% of reserves Canada: 21% of U.S. oil imports in 2009, 37% - in 2035F. About half of the Canadian Crude Oil imports come from Oil Sands. By 2025, production from Canadian Oil Sands is expected to rise from about 1.4 million barrels per day to about 3.5 million barrels per day 0 Most new oil sands projects are thought to be profitable at oil prices U.S.$65 U.S.$75 per barrel Source: Canadian Association of Petroleum Producers, EIA, CERA Drilling - Steam Assisted Gravity Drainage (SAGD) SAGD PROCESS Steam Chamber Steam Injection Oil Production Steam Injection Oil Production Reservoir Source: Canadian Association of Petroleum Producers, World Energy Outlook 2010 Source: Canadian Centre for Energy Information 46#47Appendix - TMK Synergies TMK 47#48TMK Global Synergy. Research & Development To continue leveraging synergies: ☐ Complementary product range Interchanging of technology Sharing best management practices and skills R&D: Research Centers in Chelyabinsk, Russia and Houston, US Initial investment to open a research and development Centre in Moscow R&D Houston Technology, Management US Plants Products Research Russian Plants R&D Chelyabinsk 48#49Thank You TMK Investor Relations 40/2a, Pokrovka Street, Moscow, 105062, Russia +7 (495) 775-7600 [email protected] TMK 49