ANNUAL REPORT 2018

LEADERSHIP IN INNOVATIONS

APPROVED
BY THE BOARD OF DIRECTORS OF PAO TMK ON APRIL 25, 2019
(MINUTES NO.23 DATED APRIL 29, 2019)

TMK PROFILE

TMK IS ONE OF THE WORLD’S LEADING PRODUCERS AND SUPPLIERS OF STEEL PIPE FOR THE OIL AND GAS INDUSTRY. THE COMPANY’S SHARES ARE TRADED ON THE LONDON STOCK EXCHANGE AND MOSCOW EXCHANGE.

The Company was founded in 2001 and currently operates over 20 production assets in Russia, the United States, Canada, Romania, and Kazakhstan. TMK’s core business is the production and sales of seamless and welded pipe, including large diameter pipe, pipe with premium connections, combined with an extensive range of services in heat treatment, protective coating, premium connections threading, pipe storage, and repair.

over 20

production assets

№ 1

in Russia and Top 3 in the US market

TMK consists of four Russian production sites — Volzhsky Pipe Plant, Seversky Pipe Plant, Sinarsky Pipe Plant and Taganrog Metallurgical Works; 11 production facilities in the United States and Canada, owned by TMK IPSCO; TMK-ARTROM and TMKRESITA in Romania. The Company also owns four oilfield service assets in Russia, incorporated into TMK Oilfield Services division, TMK-Kaztrubprom (Kazakhstan).

24%

share of the Russian pipe market

~ 70%

share of the Russian premium connections market

TMK’s research efforts are spearheaded by the Russian Research Institute for the Tube and Pipe Industries (RosNITI) located in Chelyabinsk, Russia, and an R&D Center located in Houston, USA. These centers focus on new product design and development, experimental and validation testing, and advanced research. To foster innovation and boost its R&D potential, the Company set up an R&D facility in the Skolkovo Innovation Center located in Moscow, Russia.

4 mln tonne

of pipe sold in 2018,
+ 5 % y-o-y

$700 mln

EBITDA in 2018,
+ 16%y-o-y

The Company has created a modern, vertically integrated industrial group manufacturing and supplying high-tech, competitive pipe products through the consolidation of production assets across the globe, scientific and engineering innovations, and a geographically diversified sales network. TMK’s unique production and service capabilities supply a wide range of customers, offering effective solutions to their operational challenges. In 2018, TMK’s pipe sales totalled 4 million tonnes. TMK supplies products to customers in over 80 countries.

LETTER TO SHAREHOLDERS