Investor Presentaiton
TMK TMK Today - Key Investment Highlights
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Industry-leading market position and large modern asset base
Dominant #1 player in seamless OCTG industry in Russia and Top-3 in the US
State-of-the-art underutilised production base with major investments completed over 10 years in 2004-14
Established longstanding relationships with major oil & gas upstream and midstream players
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Combined exposure to some of the most attractive and dynamic regional oil & gas markets
Russia - large low-cost oil producing region; a major market with increased drilling activity in 2017
TMK - dominant player in Russian oil & gas with 38% (a) market share for pipes used in the oil and gas industry,
64% (a) market share in seamless OCTG
TMK
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US OCTG market is at the recovery stage, following a c.75% demand contraction in 2014-2016 - with shale industry
supported by OPEC agreement and conducive political environment under new administration
TMK - Top-3 US OCTG producer with its market share at 10% in 2017
Low-cost position and stability of margins underpinned by significant vertical integration
High degree of vertical integration in the seamless business due to in-house steel production
Ability to pass through costs of steel products - demonstrated by stable margins throughout the cycle
Substantial improvement in the global competitive positioning on the back of Ruble devaluation in 2014-16
Cost-cutting discipline and consistent focus on de-leveraging
Cost-cutting programs with Adjusted EBITDA (b) effect of US$100m+ in the each of the past 3 years; disciplined capex
Continuous reduction in net debt (US$1bn+ reduction in net debt since 2013)
Superior governance practices and uniquely stable and experienced management team
Core management team unchanged since IPO in 2006
5 Independent Directors on the Board with vast diversified international and domestic experience
Source: Company data
Notes: (a) Company estimates for FY 2017
(b) Adjusted EBITDA for TMK represents profit/(loss) for the period excluding finance costs and finance income, income tax (benefit)/expense, depreciation and amortisation, foreign exchange (gain)/loss,
impairment/ (reversal of impairment) of non-current assets, movements in allowances and provisions (except for provisions for bonuses), (gain)/loss on disposal of property, plant and equipment, (gain)/loss
on changes in fair value of financial instruments, share of (profit)/loss of associates and other non-cash, non-recurring and unusual items
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