tmk ir presentation · tmk market exposure 6 octg consumption in russia and the us global e&p...

August 2019

TMK IR PRESENTATION

Contents

Company Overview………………………………………………………... 3

TMK Russian Division: Market Overview……………………………….. 10

TMK American Division: Market Overview……………………………… 18

Strategic Overview………………………………………………………… 26

Environmental, Social & Governance…………………………………… 29

Summary Financial Results………………………………………………. 33

Appendix – Summary Financial Accounts………………………………. 40

Appendix – Capital Structure……………………………………………... 45

Appendix – TMK Products………………………………………………... 47

Appendix – Other Materials……………………………………………..... 52

2

3

Company Overview

TMK– Global Supplier of Full Range of Pipes for Oil and Gas Industry

4

Source: Company data

Note: Percentages and other figures included in this presentation are subject to rounding adjustments. Totals therefore do not always add up to exact arithmetic sums

(a) Spears & Associates. Excluding China and Central Asia. Onshore and offshore drilling

(b) Calculated as Net cash flows from operating activities plus Net cash flows used in investing activities

TMK sales by region (2018) TMK sales by product (2018)

(US$mln) 2014 2015 2016 2017 2018

Revenue 6,009 4,127 3,338 4,394 5,099

Adj. EBITDA 829 651 530 605 700

Adj. EBITDA

Margin (%) 14% 16% 16% 14% 14%

FCF(b) 252 498 395 77 256

Net Profit (Loss) (217) (368) 166 30 0

Net Debt 2,969 2,496 2,539 2,688 2,437

Key financials

Seamless OCTG43%

Seamless Line Pipe

12%

Seamless Industrial

13%

Welded Industrial

8%

Welded OCTG

5%

Welded Line Pipe

10%

Welded LD8%

Oil & Gas = 78%

2018 global drilling activity

by geography(number of wells drilled)(a)

USA47%

Russia20%

Canada15%

MANAGEMENT

PRODUCTION

SALES

OIL AND GAS SERVICES

RESEARCH & DEVELOPMENT

Russia:

11 production facilities

1 trade house

1 R&D centre

Kazakhstan:

1 production facility

1 trade house Romania:

• 2 production facilities

• 1 trade house

USA:

10 production facilities

1 trade house

1 R&D centre

Canada:

1 production facility

1 trade office

More than 20 production sites in Russia, the USA, Canada, Romania and Kazakhstan, with trade offices in 10 countries

Russia54%Americas

32%

Europe6%

ME & Gulf Region

4%

C.Asia & Caspian Region

4%

TMK Today – Key Investment Highlights

5


Notes:(a) Company estimates for FY 2018

(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

1

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 2017-2018

TMK - dominant player in Russian oil & gas with 33%(a) market share for pipes used in the oil and gas industry,

63%(a) market share in seamless OCTG

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

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)

2

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

3

5

4

Superior governance practices and uniquely stable and experienced management team

Core management team unchanged since IPO in 2006

5 Independent Directors on the Board

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

TMK Market Exposure

6

OCTG consumption in Russia and the US Global E&P investments

Source: Rystad Energy

2.0 1.9 1.8 1.92.3 2.3

5.76.5

3.8

2.5

4.65.4

7.6

8.4

5.6

4.4

6.9

7.7

0

2

4

6

8

10

2013 2014 2015 2016 2017 2018

Russia US

(m tonnes)

Source: Metal Expert for Russian OCTG consumption, Preston Pipe & Tube Report for US

statistics

0

100

200

300

400

500

600

700

800

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18E

20

19E

20

20E

(US$ bn nominal)

North America

Middle East

Russia

Asia

South America

Africa

EuropeAustralia

TMK – Superior Earnings Resilience Through the Cycle

7

2,323

1,411 1,281

2,256 2,364

1,176

2014 2015 2016 2017 2018 1H 2019

2,560 2,410 2,412 2,671 2,743

1,375

1,842 1,461

1,046 1,113 1,246

634

4,402 3,871

3,458 3,784

3,989

2,009

2014 2015 2016 2017 2018 1H 2019

Total

pipes sales

volume

(ths. tonnes)

Adjusted

EBITDA

margin(a), %

Cash

conversion(b)

Seamless Welded Seamless Welded Total sales

14% 16% 16% 14% 14% 14%

2014 2015 2016 2017 2018 1H 2019

26%

18%14%

18% 20% 20%

2014 2015 2016 2017 2018 1H 2019

15%

(2%)

(7%)

0.1% 4%

8%

2014 2015 2016 2017 2018 1H 2019

65% 68% 67% 61% 61%73%

2014 2015 2016 2017 2018 1H 2019

60%

7%

(32%)

41%

77% 76%

2014 2015 2016 2017 2018 1H 2019

Source: Companies’ public reporting

Note: (a) 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

(b) Calculated as (Adjusted EBITDA – Capex) / Adjusted EBITDA

55%

n.m. n.m. n.m.14%

79%

2014 2015 2016 2017 2018 1H 2019

2,790 2,028 1,635

2,157 2,694

1,314

885

605

355

461

877

357

3,675

2,633

1,990

2,618

3,571

1,671

2014 2015 2016 2017 2018 1H 2019

Vertically Integrated Model Ensuring Margin Stability

8

Scrap, HBI

Refractories,

ferroalloys and

other

consumables

Steel products price volatility Operating in one of the lowest cost regions for steel

production globally

Fully vertically integrated seamless pipe production (upstream

and downstream) across all regional divisions

Ability to pass through increases in the cost of steel products

to end-customers

Resilient margin throughout the cycle of high and low steel

prices

In 2016, an agreement with Metalloinvest for supply of hot-

briquetted iron (“HBI”) was signed

27%24% 25% 26%

24% 23% 24%

11% 12% 13%

8%10%

2%

8%

2013 2014 2015 2016 2017 2018 1H 2019

Seamless Welded

543 531

347387

500

551

485

2013 2014 2015 2016 2017 2018 1H 2019

HRC (FOB, Black Sea) Column2

TMK gross margin by product segments Production

of billets

Steel coil/

plate

Bending of steel coil or plate followed

by welding the seam at the wedges

Piercing, elongation,

reduction of billets;

pipe finishing

EAFsPipe making

facilities

Seamless pipe – simplified value chain

Welded pipe – simplified value chain

Perimeter of TMK operations in the value chain

Pipe making facilities

Source: Metal Expert

(US$/t)

Source: TMK data

Strong Position in Multiple End-Markets for Pipes Beyond Oil & Gas

9

Energy and Chemicals

Civil ConstructionAutomotive

Diversified Hi-Tech Solutions

Galvanised pipe for the outer steel frame of the Otkritie

Arena stadium in Moscow

Impact resistant seamless pipe shipped for the construction

of Zenit Arena stadium retractable roof in St Petersburg

Structural steel pipe for the stadium roof in Samara

TMK-ARTROM is qualified as an authorised supplier for

such companies as Dacia (a subsidiary of Renault)

Supplier for Toyota

Pipe shipments to energy and petrochemical businesses TMK-INOX stainless pipe of 8–114 mm diameter, used in

nuclear, aircraft, automotive, aerospace and energy

industries

10

TMK Russian Division: Market Overview

10.6

10.9

11.2

11.5

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2016 2017 2018 2019

Oil Production in Russia Remains Strong and This Creates Long-term Demand for High-End Oil & Field Services Annual average oil production in 1H 2019 increased 2.5% YoY and came to 11.2 MMbd in 1H 2019

Gradual stagnation of oil production from brownfields is accompanied by development of greenfield projects

Source: Interfax, Info TEK

Russian total oil output, MMbpd

Source: RPI

Oil production structure, %

Source: Interfax, Info TEK, Spears & Associates, TMK estimates

OCTG demand is strong supported by existing level of production and development of greenfields

11

4954 57 53

6068 76 76 73

12%14%

21%30%

33% 36%41%

48%52%

0%

10%

20%

30%

40%

50%

60%

70%

0

20

40

60

80

2011 2012 2013 2014 2015 2016 2017 2018 1H2019

km

/d

Total drilling % of horizontal drilling (RHS)

Russian drilling, kmpd

1% 4% 6% 9% 11% 14% 15% 17% 19% 20%

8% 8% 8% 8% 8% 8% 9% 9% 9% 10%

0%

20%

40%

60%

80%

100%

2017 2018 2019F 2020F 2021F 2022F 2023F 2024F 2025F 2026F

Brownfields production Greenfields production

Offshore production Hard to recover reserves

1.0

1.4

1.8

2.2

2.6

3.0

3.4

0

8

16

24

32

2010 2012 2014 2016 2018 2020F 2022F

Tonnes (m

ln)M

ete

rs (

mln

)

Meters drilled (LHS) OCTG demand (RHS)

Attractive Portfolio of Premium OCTG Projects

12

TMK’s Home Market is One of the Lowest Cost Oil Producing Regions

13

Global oil production supply curve

Even with oil at 5 year lows, the low cost Russian and Caspian region is able to remain profitable unlike the majority of its

international counterparts. In 2015 and 2016, Russia was the only region globally to maintain healthy drilling activity and stable

OCTG demand.

Source: IEA World Energy Outlook; EIA International Energy Outlook; EIA Annual Energy Outlook; Morgan Stanley

Notes: (1) Breakeven price assumes a 10% return, and NPV of zero; *includes Azerbaijan, Kazakhstan, Turkmenistan and Uzbekistan; (2) Enhanced oil recovery; (3) Deep Water

4020 60

Eu

rop

e

Asia

Conv.

Asia DW(3)

Gas to Liquid

Coal to Liquid

NA

conv.

Aus. and Pacific

EO

R(2

)

Arc

tic

Ca

na

dia

n

Oil

Sa

nd

s

VZ

extr

a h

eavy

NA

DW

(3)

Eagle

Ford

Permian tight

Bakken

SA

DW

(3)

(prim

arily

Bra

zil)

Production (MBD)

Afr

ica

Off

sh

ore

OPEC, Middle East and

Africa

Russia,

Caspian region*

Asia

conv.

S.

Am

erica

(No

n-O

PE

C)

Bre

akeven p

rice (

U.S

.$/B

oe)(

1)

Low-cost supply completely in the money at current Brent price

Brent Crude 5 Year Low

0

25

50

75

100

125

80

Brent 2019 YTD

0

2

4

6

8

10

12

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19F

20

20F

20

21F

20

22F

mln

tonnes

Russian Tube and Pipe Market

14

33% market share of energy pipe demandNo.1 on the Russian tube and pipe market

Source: TMK estimates, based on 1H 2019 numbers Source: TMK estimates, based on 1H 2019 numbers

1H 20191H 2019

Non-Energy

Energy

TMK23%

Source: TMK estimates

TMK33%

Strong Position on the Domestic Market

15

TMK share of seamless OCTG remains high

Seamless OCTG market share, %

Strong drilling market in Russia

Development of conventional and unconventional

reserves will require the use of non-conventional

drilling techniques and reliable OCTG products

Russian seamless OCTG market is stable in 1H 2019

TMK is a leader in the seamless OCTG production

on the Russian market with a more than 60% market

share for 1H 2019

Source: TMK estimates, based on 1H 2019 numbers

Source: Spears & Associates

64%11%

25%

TMK Import Other local producers

14.3

14.4

16.5

18.7

20.5

22.2

20.8

22.0 24.9 27.6

27.6

01,0002,0003,0004,0005,0006,0007,0008,0009,00010,000

0

5

10

15

20

25

30

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

Units

Mln

mete

rs

Annual development drilling volume

Total new wells drilled (rhs)

LDP Demand in Russia

16

LDP demand in Russia, 2013–2022E

Source: TMK estimates

Booming market

For the next three years we expect the LDP market to be at approximately 2.0 mln tonnes

Major projects planned: Power of Siberia (GAZP), Bovanenkovo-Ukhta 3 (GAZP), Power of

Siberia-2 (GAZP), Sakhalin-Khabarovsk-Vladivostok GTS (GAZP), maintenance needs of

Transneft and Gazprom

54%44%

54%

65%

59%58%

64% 60%58%

69% 69%

14% 26%

26%

20%

15%

12%

11% 15%

12%

9% 9%31% 30%

20%

15%

26%

30%

25% 25%

30%

22% 22%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2012 2013 2014 2015 2016 2017 2018 2019E 2020F 2021F 2022F

'000

tonnes

Gazprom Transneft Others

Strategic Cooperation Supporting Growth

17

Strategic cooperation with key customers

Partnership Memorandum

Scientific and Technological Cooperation

Technology

Partnership

Program

Long-term agreements with key customers to develop and supply innovative premium products

with related services will strengthen TMK’s position

Import substitution programs guarantee purchase of tubular products and related services

TMK’s innovative products are able to considerably improve the energy efficiency of wells, as well

as safety and environmental impact

18

TMK American Division:

Market Overview

Improving Oil & Gas Market Fundamentals Drive U.S. Shale Production…

19

Improved sentiment and price in 2018

Source: EIA

U.S. crude oil production

U.S. shale oil production(1) is growing

Notes: (1) Includes total oil production from Anadarko, Appalachia, Bakken, Eagle Ford,

Haynesville, Niobrara, Permian

0

2

4

6

8

Jan-0

7Jul-0

7Jan-0

8Jul-0

8Jan-0

9Jul-0

9Jan-1

0Jul-1

0Jan-1

1Jul-1

1Jan-1

2Jul-1

2Jan-1

3Jul-1

3Jan-1

4Jul-1

4Jan-1

5Jul-1

5Jan-1

6Jul-1

6Jan-1

7Jul-1

7Jan-1

8Jul-1

8Jan-1

9Jul-1

9

Source: EIA

U.S

. shale

oil

pro

duction

(1)(M

Mbpd)

5.1 5.0 5.4 5.5 5.76.5

7.58.8

9.48.8 9.4

10.9

12.3

0

2

4

6

8

10

12

14

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19E

Source: EIA

MM

bpd

Supply cuts from OPEC+ have brought the market

into balance and stabilized prices

Capex spending in oil and gas continues to focus

on US shale drilling efforts rather than long-term

and more expensive projects

Growth in natural gas exports coupled with an

increasing supply of associated gas maintain a

balanced and stable pricing picture for natural gas

0

1

2

3

4

40

45

50

55

60

65

70

75

80

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

2017 2018 2019E

US

Natu

ral G

as (

$/M

MB

tu)

WT

I C

rude O

il ($

/bbl)

WTI Crude Oil HH

… Which is Sustainable in the Long Term at Current Oil Price Levels

20

0 1 2 3 4 5 6 7 8

0

20

40

60

80

100

120

Bre

akeven U

.S.$

/bbl B

rent equiv

ale

nt

Cumulative liquids production 2026E (MMbpd)

Other

Bone Spring

(Permian)Wolfcamp

(Permian)

Eagle Ford

Mid-

continent

Bakken

Niobrara

Weighted average breakeven price based on 2026E production

2019 YTD

WTI average

price

Source: Wood Mackenzie

Continental U.S. tight oil cost curve

During the past 2 years, U.S. shale players managed to decrease production costs

─ Drilling technology has evolved, driven by efficiency requirements

─ Key changes included higher intensity of drilling, longer laterals, significantly higher usage of proppants and equipment and well

string standardization

Despite a wide variation between plays, many U.S. shale producers are profitable at oil prices in the U.S.$50-60/bbl range in the long

term

─ A number of shale plays, incl. Permian and Eagle Ford basins as well as Mid-continent region of the U.S., are profitable at around

U.S.$45-50/bbl

Increasing Unconventional Horizontal Drilling…

21

Source: Spears & Associates

13 11 10 13 10 9 9 7 7 7

56 58 63 65 73 79 81 86 87 87

32 31 27 22 17 13 11 7 6 6

0

25

50

75

100

2010 2011 2012 2013 2014 2015 2016 2017 2018 1H2019

Directional Horizontal Vertical

Source: Baker Hughes

Wolfcamp C

Wolfcamp B

Up Wolfcamp A

Lw Wolfcamp A

3rd Bone Spring

2nd Bone Spring

1st Bone Spring

Avalon

Number of

benches

increased

250%

2010 2017

Source: Spears & Associates, Drilling Production Report as of September 2018

Horizontal and directional drilling represented 94%

of all US drilling activity in 2018 and 95% in 1H 2019

According to Spears & Associates estimates, 2018

U.S. drilling and completion spending was 20%

above 2017

Growing number of available productive benches

means that for any drilled well there is the potential

for additional drilling activity further down the line

U.S. drilling and completion spending

U.S. active rig count by type of drilling

Potential for additional drilling activity:

Permian basin (Delaware sub-basin) example

% a

s o

f period e

nd

93

123

152 156

187

133

73

105

142 135 142 150

$0

$50

$100

$150

$200

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9E

202

0E

202

1E

US

D&

C s

pe

nd

ing

($

bn

)

169 174 191

211 217

284

314

262 281 283

100

150

200

250

300

350

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019E

…Higher Lateral Length and Footage Drilled per Rig…

22

Source: Baker Hughes, Spears & Associates, Inc. Source: Spears & Associates, Inc.

1,546

1,879 1,919 1,761

1,862

978

509

876 1,032 1,016

0

500

1,000

1,500

2,000

2,500

2010 2011 2012 2013 2014 2015 2016 2017 2018 1H2019

Footage drilled per rigU.S. average annual rig count

(000’s)

Source: BTU Analytics

Average U.S. lateral length

(Feet)

2,500

5,000

7,500

10,000

Bakke

n

E. F

ord

Mid

land

De

law

are

Ha

yn

esvill

e

Okla

hom

a

No

rth

east

Nio

bra

ra

Oth

er

2013 2014 2015 2016 2017 2018

Drilling times have fallen sharply in most regions

resulting in fewer rigs needed to perform the same

work

As producers continue to innovate, well lengths

increased, frac stages rose and proppant usage

increased

Increased lateral lengths and greater drilling

complexity are driving greater spending on

technologically advanced drilling consumables, such

as OCTG with premium and semi-premium

connections

OCTG consumption per rig has nearly doubled

since January 2013, allowing for significant

recovery in the sector despite having fewer than

half of the rigs in operation

Seamless pipe has increased its share of total U.S.

pipe volume as the result of increased horizontal

and directional drilling as well as longer laterals

According to Preston Pipe, seamless pipe

represented approximately 56% of total U.S.

OCTG shipments in 1H 2019

… Resulting in OCTG Consumption Growth Per Rig…

23

Source: Preston Pipe, Baker Hughes

200

250

300

350

400

450

500

550

0

500

1,000

1,500

2,000

2,500

Jan-1

3

Jul-1

3

Jan-1

4

Jul-1

4

Jan-1

5

Jul-1

5

Jan-1

6

Jul-1

6

Jan-1

7

Jul-1

7

Jan-1

8

Jul-1

8

Jan-1

9

Jul-1

9

U.S. Rig Count

OCTG Consumption per Rig (tonnes/month)

Con

su

mp

tio

n p

er

rig

(to

nn

es/m

on

th)

U.S

. ri

g c

ou

nt

OCTG consumption per rig

OCTG shipments mix

Source: Preston Pipe

52% 49% 47% 45% 46% 52%63%

53% 58% 56%

48% 51% 53% 55% 54% 48%37%

47% 42% 44%

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013 2014 2015 2016 2017 2018 1H2019

Seamless Welded

… Inventory Normalization, Higher Efficiency …

24

Increased shipment levels bring months-of-inventory

back to pre-downturn levels

Source: Preston Pipe & Tube Report

Despite months of inventory having reached 2014

levels, the monthly absolute inventory is

meaningfully below pre-crisis levels due to higher

industry efficiency:

Design has standardized resulting in more

obsolete inventory

E&P investment has spilled over into the

management of inventory: the amount of pipe on

the ground that was typically required to maintain

a certain rig level has decreased from previous

cycles

Standardized diameters of OCTG piping


Chevron Permian Cabot Northeast

13 3/8"

9 5/8"

5 1/2"

9 5/8”

13 3/8"

5 1/2"

20"

Total Weight per well:

492 NT


323 NT


267 NT

XTO Bakken

2 7/8" 2 7/8" 2 7/8"

4 1/2"

9 5/8”

7"

0

3

6

9

12

15

1.0

1.4

1.8

2.2

2.6

3.0

3.4

Jan-1

2

Jan-1

3

Jan-1

4

Jan-1

5

Jan-1

6

Jan-1

7

Jan-1

8

Jan-1

9

Month

s o

f In

vento

ry

Absolu

te invento

ry,

mln

tonnes

Monthly absolute inventory

Months of inventory (rhs)

400

600

800

1,000

1,200

1,400

1,600

1,800

0200400600800

1,0001,2001,4001,6001,8002,0002,200

Welded OCTG price HRC price

200400600800

1,0001,2001,4001,6001,8002,000

… and Growth of OCTG Prices

25

U.S. distributor welded OCTG vs. HRC prices(U.S.$/tonne, monthly average)

U.S. distributor seamless OCTG vs. scrap prices(U.S.$/tonne, monthly average)

Source: Pipe Logix, AMM

0200400600800

1,0001,2001,4001,6001,8002,0002,2002,400

Seamless OCTG price Scrap price

Welded and seamless OCTG prices have

rallied from the low in 2016. Since then, the

average prices increased by more than 30% in

2017 and by more than 15% in 2018.

Following the implementation of Section 232,

HRC prices grew by almost $300/tn until

August 2018 when they stared a downward

trend

Source: Pipe Logix, AMM

26

Strategic Overview

Key Strategic Pillars

27

Strengthen

financial

performance and

investment appeal

Maximize operating cash flow

Monetize international assets, strategic alliances and joint ventures in all regions of presence

Reduce leverage to 3.0x Net Debt(a)/ EBITDA(b) as of FY2019

Reduce leverage to 2.5x Net Debt(a)/ EBITDA(b) as of FY2020

Focus on

innovation and

digitalisation

Enhance leadership

in key segments

and enter new

product niches

Dominate the Russian OCTG and line pipe markets

Remain in the TOP 3 leading OCTG producers in the USA

Increase the share of high-tech products in the Russian division’s revenue to 50% by 2022 and

maintain a leading position in the Russian market for premium connections

Enhance the sales

platform and

leverage TMK’s

global scale

Expand commercial footprint of TMK’s products and services

Develop strategic partnerships with major customers and global consumers

Focus on offering products that have a global market and stable demand outlook, i.e.high-tech seamless

pipes and premium connections

Optimise vertical

integration

Increase capacity utilization of steelmaking facilities through higher production volumes of steel billets

and other products, and maximize the financial impact

Expand presence in further processing of tubular products (drill pipe, coating)

Develop a service offering of ready-to use comprehensive engineering solutions for customers

Note: (a) Net Debt represents interest bearing loans and borrowings plus liability under finance lease less cash and cash equivalents and short-term financial investments

(b) Adjusted EBITDA 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

Enhance

operational

excellence

Develop e-commerce across all divisions via TMKe Trade, the first tubular goods Internet shop in Russia

Use cutting-edge digital technology to improve product quality and cut costs

Foster a culture of continuous operational improvements and production cost cutting

Ensure consistent product quality through increasing the sustainability of technologies and personnel

qualification

Debt Maturity Profile as at June 30, 2019

28

Source: TMK management accounts (figures based on non-IFRS measures), TMK estimates

Note: Certain 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.

Debt currency structure

Net debt increased from $2,437 million as atDecember 31, 2018 to $2,641 million as at June30, 2019, as a result of the Rouble appreciationagainst the US dollar

The weighted average nominal interest rate wasdown by 2 bps compared to the end of 2018 to7.27% as at the end of 2Q 2019

Credit Ratings confirmed:

S&P B+, Stable (CreditWatch Positive)

Moody’s B1, Stable

USD 40%

RUB 55%

EUR 5%

26 21 25

166 111

24

186

7572

20

178138 157

200

23

284

422

15

500

135

265

181

73

179159

41

707

8397

163

451

145165

208 211

286

74

1 1 1 3 30

100

200

300

400

500

600

700

800

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 3Q

2020 2021 2022 2023 2025

US

$ m

ln

EUR

RUB

USD

2019

29

Environmental, Social & Governance

ESG rating upgraded to «BB» from «B»

in May 2019

Governance….

Environment…

Social..............

2 ( in August 2019)

4 (■ in August 2019)

6 ( in August 2019)

Corporate Governance

30

DMITRY PUMPYANSKIY

Chairman

Non-Executive Director

Directors

Independent Directors

The Board of Directors

ALEXANDER SHIRYAEV

Executive Director

ANDREY KAPLUNOV

Executive Director

ALEXANDER

PUMPYANSKIY


MIKHAIL KHODOROVSKY


ANATOLY CHUBAIS


SERGEY KRAVCHENKO

Chairman of the

Nomination and

Remuneration Committee

NATALIA CHERVONENKO

Chairman of the

Audit Committee

ALEKSANDER SHOKHIN

Chairman of the

Strategy Committee

VENDE FRANK-DETLEF

Independent Director

YAROSLAV KUZMINOV

Independent Director

Corporate Governance ratings

5 Independent Directors

4 Non-Executive Directors

2 Executive Directors

11

The Board of Directors has three standing

committees chaired by independent

directors:

Nomination and Remuneration Committee

Audit Committee

Strategy Committee

Chairman of the Committee

Committees

TMK ranks in the Top-20 companies in

Russia with the best disclosure of

corporate governance information,

according to the annual survey “National

Corporate Governance Index” in 2018.

NEW

NEWNEW

Focus on Environmental Protection as a Foundation for Business Sustainability

31

Environmental monitoringAll Russian division plants have

accredited chemical-analytical

laboratories with the necessary

modern equipment

>20 CAPEX projects Key areas of investment: water

basin protection, air protection

and soil protection

11 TMK’s plants confirmed their

compliance with ISO

14001:2005

Environmental management system Key results in 2018

~$40 mlnEnvironmental expenditure

+5% YoY in 2018

Flat YoYtotal water

consumption

95.32%water supply

is recycled

-1% YoYtotal pollutant emissions

into atmosphere

55%of total waste was

reused at TMK facilities

817 employees passed external

education on

environmental protection

Ecology for non-ecologistsE-learning program was developed

and launched at the Corporate

University platform TMK2U

Investment into environmental protection

Environmental education program

32

Focus on Health & Safety and Social Responsibility as a Foundation For Business Sustainability

Comprehensive charity

program

Through sponsorship and charity,

TMK seeks to foster a favourable

social climate in the regions where

we operate

Health & Safety – key results in 2018

80 non-profit

organisations

Receive financial support from

TMK, including 19 through

various grant competitions

$11 mln

Health & safety expenditure

+14% YoY in 2018

Zero fatalities

Steel Safety Day-2018

83% of production capacities audited

>42* thousand employees participated

Corporate social responsibility

4 key areas of

social initiatives: Health

Sport

Education

Culture

Focus on best practicePotential projects:

“Conscious safety” system

Electronic system of pre-shift

inspections

Digital technology in labour

protection

1.37xInjury frequency rate in 2018

(1.52x injury frequency rate in 2017)

* Including 7 th. employees from contractors

33

Summary Financial Results

FY Consolidated Results Snapshot

34

Revenue Volumes and realised prices

Adjusted EBITDA(b) Net profit

2,560 2,410 2,412 2,671 2,743

1,842 1,461 1,046

1,113 1,246

4,4023,871

3,4583,784 3,989

0

1,000

2,000

3,000

4,000

5,000

2014 2015 2016 2017 2018

Th

ou

sa

nd

to

nn

es

Seamless Welded

US$1,464Average

revenue/ tonne

US$1,078 US$970

US$1,085 US$921 US$796

37.97 60.66 66.90

6,009

4,127 3,338

4,394 5,099

0

1,000

2,000

3,000

4,000

5,000

6,000

2014 2015 2016 2017 2018

US

$ m

ln

Average

USD/RUB rate(a)

(217)

(368)

166

30

(0)

(300)

(200)

(100)

0

100

200

US

$ m

ln829

651 530

605 700

14%

16% 16%

14% 14%

0%

3%

6%

9%

12%

15%

18%

0

100

200

300

400

500

600

700

800

2014 2015 2016 2017 2018

Adj. E

BIT

DA

marg

in, %

US

$ m

ln

Adjusted EBITDA margin, %Source: TMK data

Note: (a) Average nominal USD/RUB exchange rate as published by the Central Bank of Russia.

(b) Adjusted EBITDA 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

US$1,152

US$976

58.35

2014 2015 2016 2017 2018

US$1,294

US$1,021

62.71

693

524

437

544 518

0

200

400

600

800

2014 2015 2016 2017 2018

US

$ m

ln

Gross Margin, SG&A and Cash Conversion

35

Gross margin SG&A and corporate overheads(a)

Capex and cash conversion(b) Key considerations

24% 25%26%

24% 23%

12% 13%

8% 10%

5%

0%

10%

20%

30%

2014 2015 2016 2017 2018

%

Seamless Welded

293

208 175

236 273

65%68% 67%

61% 61%

10%

30%

50%

70%

0

100

200

300

2014 2015 2016 2017 2018

Cash C

onvers

ion,

%

US

$ m

ln

Source: TMK data

Note: (a) Based on IFRS financial statements. Calculated as Gross Profit less Operating profit

(b) Calculated as (Adjusted EBITDA – Capex) / Adjusted EBITDA. Adjusted EBITDA 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

Seamless segment accounting for 90% of consolidated

gross profit and demonstrates consistently superior

margins

Major reduction in SG&A in response to the revenue

decline in 2015-16

Relatively high share of fixed costs in seamless segment

provides strong leverage to volume growth

Significantly optimized lean cost structure due to stringent

efficiency measures

Segmental Quarterly Performance Dynamics

36

48 42 50 47 53 48 52 51 48

2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

Sales

volume

(ths.tonnes)

Adjusted

EBITDA

margin(a), %

13%15% 13% 14% 14% 13%15% 16% 17%

2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

Source: TMK data

Note: (a) Adjusted EBITDA 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 item

Russian division European divisionAmerican division

9%

15%13%9%

14%13%12%10%

8%

2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

Adjusted

EBITDA(a),

US$ mln

107 120 111124

132

105106

137166

2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

2142 39

2649 45 43 30

21

2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

6 7 11 10 16 13 12 8 8

2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

760 756 734 740812

687 745 757833

2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

158 185 199 199 210 190 205168 150

2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

9%13%14%14%

19%17%16%

12%13%

2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

2Q 2019 vs. 1Q 2019 Summary Financial Highlights

37

Sales were up QoQ, mainly due to higher sales at the Russian

division

Revenue was higher QoQ, mainly due to a stronger

performance at the Russian division

+5% QoQ +4% QoQ

Adjusted EBITDA was up QoQ, mainly due to stronger EBITDA

at the Russian division Net profit was up QoQ

+11% QoQ

175195

14%15%

0%

3%

6%

9%

12%

15%

18%

0

50

100

150

200

1Q2019 2Q2019

EB

ITD

A m

arg

in,

%

US

$ m

ln

Source: TMK data

4759

0

20

40

60

80

1Q2019 2Q2019

US

$ m

ln

+26% QoQ

978 1,031

0

300

600

900

1,200

1Q2019 2Q2019

Thousand t

onnes

1,257 1,307

0

500

1,000

1,500

1Q2019 2Q2019

US

$ m

ln

1H 2019 vs. 1H 2018 Summary Financial Highlights

38

Sales declined YoY, mainly due to lower sales at the American

division, which was partially compensated by higher sales at

the Russian division

Revenue declined YoY, mainly due to a lower revenue at the

American division. This was partially compensated by higher

revenue at the Russian division, despite a negative effect of

currency translation

-3% YoY -2% YoY

Adjusted EBITDA increased YoY, due to a stronger EBITDA at

the Russian division, which was partially offset by weaker

performance at the American division

Net profit increased YoY, mainly due to a foreign exchange

gain recorded in 1H 2019

+4% YoY +2.8x YoY

28

105

0

20

40

60

80

100

120

1H2018 1H2019

US

$ m

ln

Source: TMK data

357

370

14% 14%

0%

3%

6%

9%

12%

15%

18%

0

50

100

150

200

250

300

350

400

1H2018 1H2019

EB

ITD

A m

arg

in, %

US

$ m

ln

2,062 2,009

0

600

1,200

1,800

2,400

1H2018 1H2019

Thousand t

onnes

2,628 2,564

0

500

1,000

1,500

2,000

2,500

3,000

1H2018 1H2019

US

$ m

ln

Seamless – Core to Profitability

39

1H 2019 gross profit breakdown

Source: Consolidated IFRS financial statements, TMK data

Note: Certain 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.

US$ mln(unless stated otherwise)

2Q2019QoQ,

%1H2019

YoY,

%

Sales - Pipes, kt 690 1% 1,375 -2%

Revenue 906 1% 1,804 0%

Gross profit 217 2% 429 5%

Margin, % 24% 24%

Avg revenue/tonne (US$) 1,314 0% 1,313 2%

Avg gross profit/tonne (US$) 314 1% 312 6%

Sales - Pipes, kt 341 16% 634 -4%

Revenue 350 14% 657 -5%

Gross profit 31 36% 54 24%

Margin, % 9% 8%

Avg revenue/tonne (US$) 1,026 -2% 1,036 0%

Avg gross profit/tonne (US$) 92 17% 86 30%

SE

AM

LE

SS

WE

LD

ED

Sales of seamless pipe generated 70% of total

revenues in 1H 2019

Gross profit from seamless pipe sales

represented 89% of 1H 2019 total gross profit

Gross profit margin from seamless pipe sales

amounted to 24% in 1H 2019

Seamless89%

Welded11%

40

Appendix – Summary Financial Accounts

Key Consolidated Financial Highlights

41

Source: TMK Consolidated Financial Statements for 2018, 2017, 2016, 2015 and 2014

(a) IFRS financials figures were rounded for the presentation’s purposes. Minor differences with FS may arise due to rounding

(b) Adjusted EBITDA 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.

(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 loans and borrowings less interest payable; Net Debt represents Total debt less cash and cash equivalents and short-term financial investments

(US$mln)(a) 2018 2017 2016 2015 2014 2013

Revenue 5,099 4,394 3,338 4,127 6,009 6,432

Adjusted EBITDA(b) 700 605 530 651 829 986

Adjusted EBITDA Margin(b)(%) 14% 14% 16% 16% 14% 15%

Profit (Loss) 0 30 166 -368 -217 215

Net Profit Margin (%) 0% 1% 5% n/a n/a 3%

Pipe Sales ('000 tonnes) 3,989 3,784 3,458 3,871 4,402 4,287

Average Net Sales/tonne (US$)(c) 1,278 1,162 965 1,066 1,365 1,500

Cash Cost per tonne (US$)(d) 981 862 692 783 1,030 1,108

Cash Flow from Operating Activities 510.3 312 476 684 595 703

Capital Expenditure(e) 273.1 236 175 208 293 397

Total Debt(f) 2,867 3,239 2,836 2,801 3,223 3,694

Net Debt(f) 2,437 2,688 2,479 2,471 2,939 3,568

Short-term Debt/Total Debt 31% 18% 9% 21% 24% 11%

Net Debt/Adjusted EBITDA 3.48x 4.4x 4.7x 3.7x 3.5x 3.6x

Adjusted EBITDA/Finance Costs 2.9x 2.3x 2.0x 2.3x 3.6x 3.9x

Income Statement

42



(a) Calculated as Finance income less Finance costs

(US$ mln) 2018 2017 2016 2015 2014 2013

Revenue 5,099 4,394 3,338 4,127 6,009 6,432

Cost of sales (4,183) (3,521) (2,634) (3,282) (4,839) (5,074)

Gross Profit 916 872 704 845 1,169 1,358

Selling and Distribution Expenses (231) (261) (220) (260) (350) (379)

General and Administrative Expenses (250) (231) (196) (207) (278) (317)

Adverstising and Promotion Expenses (7) (7) (6) (8) (14) (12)

Research and Development Expenses (7) (11) (11) (13) (15) (13)

Other Operating Expenses, Net (22) (34) (4) (35) (35) (34)

Foreign Exchange Gain / (Loss) (72) 28 130 (141) (301) (49)

Finance Costs, Net (232) (268) (263) (269) (226) (245)

Other (50) (10) 35 (354) (150) 5

Income / (Loss) before Tax 45 78 169 -443 -201 312

Income Tax (Expense) / Benefit (45) (48) (4) 75 (15) (98)

Net Income / (Loss) (0) 30 165 (368) (217) 215

Statement of Financial Position

43



(US$ mln) 2018 2017 2016 2015 2014 2013

ASSETS

Cash and Cash Equivalents 392 491 277 305 253 93

Accounts Receivable 878 871 689 512 728 995

Inventories 1,066 1,121 769 785 1,047 1,324

Prepayments 101 139 107 113 113 148

Other Financial Assets 13 0 42 0 1 0

Total Current Assets 2,450 2,624 1,883 1,715 2,142 2,561

Total Non-current Assets 2,554 2,913 2,853 2,697 3,508 4,857

Total Assets 5,004 5,537 4,736 4,412 5,649 7,419

LIABILITIES AND EQUITY

Accounts Payable 744 950 735 682 831 1,111

ST Debt 906 610 268 600 764 398

Other Liabilities 345 178 48 41 48 62

Total Current Liabilities 1,995 1,738 1,051 1,323 1,643 1,571

LT Debt 1,978 2,725 2,650 2,201 2,459 3,296

Deferred Tax Liability 92 82 90 110 206 298

Other Liabilities 121 59 47 64 71 125

Total Non-current Liabilities 2,191 2,866 2,786 2,374 2,735 3,718

Equity 818 933 899 715 1,271 2,130

Including Non-Controlling Interest 47 50 55 53 66 96

Total Liabilities and Equity 5,004 5,537 4,736 4,412 5,649 7,419

Net Debt 2,437 2,688 2,479 2,471 2,969 3,600

Cash Flow

44

Source: TMK Consolidated Financial Statements for 2018, 2017, 2016, 2015 and 2014Note: Certain 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

(a) Calculated as Finance costs less Finance income

(US$ mln) 2018 2017 2016 2015 2014 2013

Profit / (Loss) before Income Tax 45 78 169 (443) (201) 312

Adjustments for:

Depreciation and Amortisation 268 263 242 251 304 326

Net Finance Cost 232 268 263 269 226 245

Others 137 (260) (154) 552 479 61

Working Capital Changes (145) (253) (13) 105 (159) (159)

Cash Generated from Operations 537 349 506 734 648 786

Income Tax Paid (27) (38) (31) (51) (53) (82)

Net Cash from Operating Activities 510 312 476 684 595 703

Capex (273) (236) (175) (208) (293) (397)

Acquisitions - 1 (11) (2) (60) (38)

Others 18 - 106 25 10 12

Net Cash Used in Investing Activities (255) (235) (81) (185) (343) (423)

Net Change in Borrowings (46) 318 (53) (193) 154 (93)

Others (305) (197) (365) (187) (206) (313)

Net Cash Used in Financing Activities(351) 121 (418) (381) (53) (407)

Net Foreign Exchange Difference (4) 17 (5) (65) (40) (5)

Cash and Cash Equivalents at January 1 491 277 305 253 93 225

Cash and Cash Equivalents at YE 392 491 277 305 253 93

45

Appendix – Capital Structure

Capital Structure

46

Source: TMK

Capital structure

TMK Steel Holding Ltd, incl. affiliates

65.06%

TMK subsidiaries

0.06%

Free float34.89%

**

*

Key considerations

TMK’s securities are listed on the London Stock

Exchange and the Moscow Exchange

As of June 30, 2019, 35% of TMK ordinary shares

were in free float

Total shares outstanding amount to 1,033,135,366

One GDR represents four ordinary shares

*The beneficiary is Dmitry Pumpyanskiy, Chairman of the Board of Directors of

TMK. Includes shares owned by TMK Steel Holding Ltd and subsidiaries of TMK

**Including Rusnano (5.3%)

47

Appendix – TMK Products

Wide Range of Products

48

Well equipment precision manufacturing,

tools’ rental, supervising, inventory

management, threading and coating services.

Oilfield Services

Premium

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.

Premium

Connections

(TMK UP)

Welded

Threaded pipes for the oil

and gas industry including

drill pipe, casing and

tubing.

OCTG

The short-distance

transportation of crude oil,

oil products and natural

gas.

Line Pipe

Construction of trunk

pipeline systems for the

long distance

transportation of natural

gas, crude oil and

petroleum products.Large-

Diameter

Wide array of applications

and industries, including

utilities and agriculture.

Industrial

Seamless

Threaded pipes for the oil

and gas industry including

drill pipe, casing and

tubing.

OCTG

The short-distance

transportation of crude oil,

oil products and natural

gas.

Line Pipe

Automotive, machine

building, and power

generation sectors.

Industrial

TMK Premium Product Offering

49

Source: TMK data

TMK connections series Premium products and services

TMK to maintain its share of premium connections

market with greater focus on sales of 2nd and 3rd

generation premium connections to improve sales

efficiency and enhance competitive advantage

TMK is actively developing HI-TECH products for

unconventional reserves, including offshore deposits:

OCTG: with Premium threading, Cr13,

GreenWell technology, alloy OCTG (L80,

С90, Т95, Р110) mostly with Premium

threading

Stainless steel pipe

Pipe with increased corrosion resistance

Vacuum insulated tubing

LDP

Pipes with premium connections are designed for O&G wells developed in challenging exploration and production conditions,

including offshore, deep-sea and Far North locations, as well as for horizontal and directional wells

Extreme torsional resistance

for high operational torque

Ability to withstand high

tension, compression and

bending loads at excessive

internal and external pressure

Easy and reliable make-up

Comprises connections with

metal-to-metal seals and

positive torque stops that

provide gas tightness and

ensure reliability in difficult

well conditions

Higher resistance to torque

for casing while drilling and

rotating

A comprehensive line of

semi-premium connections

designed to outperform

standard API connections

Lite

Series

Classic

Series

Pro Series Torq Series

Premium Solutions: TMK UP

50

ULTRA QX

2009

ULTRA CX

2008

ULTRA FX

2003

ULTRA FJ

2003

Cal IV

ULTRA DQX

2011

Cal IICal IVCal IV Cal II

ULTRA DQXHT

2013

Cal II

ULTRA SFII

2013TMK BPN

2013

TMK-2S

2013

ULTRA GX

2016

TWCCEPCal IV

SXC

2009ULTRA QX

TORQ2016

ULTRA SF

2003

TMK GF

2005

TMK PF

2007

Cal IV

TMK FMC

2005

TMK TTL 01

2005

TMK CS

2005

ТМК 1

2004

TMK FMT

2008

TMK PF ET

2008

TMK TDS

2010

TMK CWB

2011

Cal IV

TMK PF Tubing

2012

Cal IVCal II Cal IICal IV

TMK UP Magna2013

TMK UPCentum

2017

• Horizontal and extended reach

• Drilling with casing

• Steam-Assisted Gravity Drainage (SAGD)

• Connections are available with GreenWell

environment friendly technology

Unique range of Premium products

• Onshore/offshore

• Sour gas

• Thermal

• Arctic

Utilisation of TMK Pipe Products in Oil and Gas Industry

51

OCTG – Oil Country Tubular Goods (drilling, casing, tubing) used for oil & gas exploration, well fixing and oil & gasproduction (48% of total sales in 1H 2019)

Line pipe – used for short distance transportation of crude oil, oil products and natural gas (19% of total sales in 1H 2019)

LDP - large diameter pipe used for construction of trunk pipeline systems for long distance transportation of natural gas,crude oil and petroleum products (12% of total sales in 1H 2019)

52

Appendix – Other Materials

TMK’s Undisputed Market Leading Position in Russia

53

Source: TMK estimates, based on 1H 2019 numbers

Premium

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

Welded

Short-distance

transportation of O&G

and oil products

Construction of trunk

pipeline systems for long

distance transportation of

O&G and petroleum

products

Wide array of applications

and industries, including

utilities and agriculture

Seamless

Threaded pipes for O&G

industry including drill

pipe, casing and tubing

Short-distance transport

of crude oil, oil products

and natural gas

Automotive, machine

building, and power

generation sectors

OCTG

Large Diameter

Industrial

Line Pipe

Line Pipe

Industrial

Premium

Connections

(TMK UP)

#1 in the Russian Tube and Pipe

Market

TMK64%

TMK15%

TMK8%

TMK23%

TMK56%

TMK34%

TMK27%

TMK73%

TMK Investor Relations

40/2a, Pokrovka Street, Moscow, 105062, Russia

+7 (495) 775-7600

[email protected]

tmk ir presentation · tmk market exposure 6 octg consumption in russia and the us global e&p...

Documents