The extension of the production cut agreement by OPEC and non-OPEC countries last year had a positive effect on major oil and gas regions around the world, helping to improve the market environment and partially stabilize hydrocarbon prices. Oil and gas companies worldwide continued to increase their drilling activity and upstream budgets, with the largest growth recorded in North America. Activity in the global market followed North America’s lead and supported demand for tubular products in Russia as well as in our other significant export markets such as the CIS, Europe, Middle East, and Asia Pacific.
At the same time, there were a number of major global challenges in 2018, including a lack of accelerated global growth, an unprecedented surge in protectionist sentiment and heightened trade tensions between certain countries. Despite these challenges, TMK increased its sales of tubular products by 5% year-on-year to 4 million tonnes. Sales of OCTG pipe, TMK’s core product, were up 10% year-on-year, while sales of premium threaded connections increased by 33% year-on-year, reflecting growing demand for our unique premium product line, as hydrocarbon production projects across the globe became increasingly complex.
All of these factors helped significantly strengthen TMK’s financial position in 2018. Revenue and adjusted EBITDA increased by 16% year-on-year, facilitated by a stronger performance across all TMK divisions. TMK continued to deleverage, with the net debt-toEBITDA ratio at less than 3.5x at the end of the year.
The stable demand for tubular products in TMK’s home markets supports our unparalleled competitive advantage on a global scale. We continued to improve our customer relations by expanding our range of high-tech products and services as well as building further strategic partnerships with oil and gas majors aimed at jointly developing innovative technologies and services.
In 2018, TMK launched its new Strategy to 2027. One of its key elements is to reinforce TMK’s leadership in our key segments — seamless OCTG and premium connections. To date, the Strategy has yielded positive results. We have been the world’s largest pipe manufacturer for 10 consecutive years, with TMK’s share of the global OCTG market increasing from 12% in 2017 to 13% at the end of 2018. TMK remains the dominant manufacturer of tubular products for the Russian oil and gas industry: at the end of the reporting year, our share in the seamless OCTG segment amounted to 63%.
TMK ran a number of projects during the reporting year aimed at improving product quality and increasing the share of valueadded products in the product mix. A new heat treatment facility for seamless pipe was launched at TMK-ARTROM, Romania, and an external coating facility was built in the USA. In Russia, construction continued on both our R&D facility in Skolkovo and the heat treatment facility at Seversky Pipe Plant.
Last year, TMK took major steps towards digital transformation. We are convinced that in order to ensure effective solutions to changing customer needs, we must remain at the forefront of innovation, in oil and gas technology. We believe that business transformation encompasses more than simply implementing individual projects based on digital technology. Primarily, our business transformation involves creating a continuous chain of improvements to existing processes across all aspects of our business, from customer and supplier relations, to adopting innovative production management approaches, as well as standardizing and digitizing company-wide processes based on a new level of employee engagement.
We have already made definitive steps toward this goal. In 2018, we developed and approved our comprehensive digital transformation program, established a transformation committee, and set up a project management office. We are implementing multiple projects dealing directly with production processes and other activities. New approaches and ideas are actively integrated into our existing business structure in a consistent and focused manner.
An important element of our Strategy is TMK’s contribution to maintaining an environmental balance across its footprint and our commitment to improving working conditions and enhancing occupational safety. TMK’s efforts during the year, as in previous years, were focused on improving the environmental performance of production processes, reducing our consumption of water resources, and minimizing landfill volumes. With more than 20 projects implemented, our total environmental expenditure in 2018 amounted to $40 million, up 5% year-on-year.
As for occupational health and safety, comprehensive efforts taken in 2018 across the Company’s plants drove a major reduction in occupational injury rates; no fatalities or mass accidents were recorded.
Looking ahead, TMK remains confident while improving its operating and financial performance, and is ready to respond flexibly to external challenges by adapting its Strategy to the changing market environment.