Investor Presentaiton

Changing Approach to Product Mix ☐ Traditional approach: supplying conventional product at market prices Focus now on supplying higher value, higher margin product In 2Q 2014 Seamless OCTG sales accounted for 39% of Russian sales Gross margin, % 28% 27% 28% 26% 26% 70% 24% 24% 24% 65% 20% 16% 60% 12% 67% 64% 8% 62% 62% 55% 58% 4% 53% 0% 2010 2011 2012 2013 Share of seamless tubes in revenues 1Q 2014 Seamless tubes gross margin 50% 2Q 2014 Source: TMK data 10 Share of seamless product in revenues (%) TMK

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