Slide 1: Fourth Quarter & Full Year 2022 Results
Fourth Quarter & Full Year 2022 Results March 2nd, 2023 2 March, 2023 1
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER Forward-Looking Statements This presentation includes forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms as “believe”, “expect”, “anticipate”, “may”, “assume”, “plan”, “intend”, “will”, “shoul
Slide 3: Today's Agenda
TODAY’S AGENDA 1. Highlights of the Fourth Quarter and Full Year 2022 2. New Vallourec Plan Execution 3. Market Environment and Business Development 4. Q4 2022 Results 5. FY 2023 Outlook and Key Take Aways 3
Slide 4: Highlights of the Fourth Quarter and Full Year 2022
HIGHLIGHTS OF THE FOURTH QUARTER AND FULL YEAR 2022 ➢ Q4 EBITDA of €312 million, +129% year-on-year, and +58% quarter-on-quarter ➢ Strong Q4 Free Cash Flow generation of €266 million and Net Debt reduction of €363 million (a) (b) ➢ Positive trajectory of worldwide Tubes business; U.S. performance re
Slide 5: 2. Strategy Execution: New Vallourec Plan
2. STRATEGY EXECUTION: NEW VALLOUREC PLAN 5
Slide 6: Reminder: Our New Vallourec Plan Objectives
REMINDER: OUR NEW VALLOUREC PLAN OBJECTIVES Cycle-proof: Value over Volume: Positive FCF even at Rationalize portfolio to drive bottom of cycle (a) profitable growth Best-in-class profitability: Close margin gap with peers over the cycle (a) Free Cash Flow defined as EBITDA adjusted for changes in p
Slide 7: 2023 Is a Pivotal Year for the New Vallourec
2023 IS A PIVOTAL YEAR FOR THE NEW VALLOUREC TARGET INDUSTRIAL FOOTPRINT 2024 NEW VALLOUREC PLAN UPDATE NORTH AMERICA ➢ All European social plan agreements finalized in 2022, Steel making capacity: 750,000 tonnes EASTERN HEMISPHERE substantially de-risking the New Vallourec plan Rolling capacity: 75
Slide 8: 3. Market Environment and Business Development
3. MARKET ENVIRONMENT AND BUSINESS DEVELOPMENT 8
Slide 9: Increasingly Favorable Tubes Business Environment Across All Geographies
INCREASINGLY FAVORABLE TUBES BUSINESS ENVIRONMENT ACROSS ALL GEOGRAPHIES US RIG COUNT EVOLUTION OCTG PRICE EVOLUTION 779 +56% 369 +33% $3,880 $3,950 $3,356 $2,840 $2,536 MIDDLE EAST RIG COUNT EVOLUTION $2,207 $2,283 $1,843 $2,008 $1,717 323 251 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Pipelogix - North America
Slide 10: Strong Tubes Business Trajectory
STRONG TUBES BUSINESS TRAJECTORY 2022 TUBES EBITDA PER TONNE (€/tonne) PROFITABLE NEW BUSINESS WINS ➢ 3-year Long Term Agreement with Petrobras 554 • Supply of 110,000 tonnes of Premium OCTG products, associated accessories, and specialized physical and digital services • Including 16” and 18” seaml
Slide 11: Mine and Forest Segment Ramping Production
MINE AND FOREST SEGMENT RAMPING PRODUCTION Q1 2021 – Q1 2023 MINE PRODUCTION SOLD (million tonnes) COMMENTARY ➢ Iron ore production of 1.4 million tonnes in Q4 2022, slightly above prior estimate 2.3 2.2 1.9 ➢ Civil works related to restoration of core Cachoeirinha pile 1.7 finalized, solidity of re
Slide 12: 4. Q4 & FY 2022 Results
4. Q4 & FY 2022 RESULTS Y vallourec 12
Slide 13: Q4 2022 Group Key Figures
Q4 2022 GROUP KEY FIGURES REVENUES (€ million) EBITDA (€ million) 1,541 312 +45% 1,064 +€176m 136 Q4 2021 Q4 2022 Q4 2021 Q4 2022 FREE CASH FLOW (€ million) (a) NET DEBT (€ million) 1,493 266 1,130 €(363)m +€249m 17 Q4 2021 Q4 2022 End Q3 2022 End Q4 2022 Revenues and EBITDA driven by improved profi
Slide 14: Q4 2022 Tubes Production and Revenues
Q4 2022 TUBES PRODUCTION AND REVENUES PRODUCTION SOLD (k tonnes) REVENUES (€ million) AVERAGE SELLING PRICE (€ per tonne) 1,467 2,853 510 514 +1% 986 +49% 1,936 +47% Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2021 Q4 2022 Q4 2022 REVENUES BY GEOGRAPHY (€ million) Q4 2022 REVENUES BY SEGMENT (€ million) 2% N
Slide 15: Q4 2022 Tubes Performance
Q4 2022 TUBES PERFORMANCE EBITDA (€ million and % of revenues) EBITDA PER TONNE (€/tonne) 285 554 +€199m +€385/t 19.4% 86 169 8.7% Q4 2021 Q4 2022 Q4 2021 Q4 2022 Improving profitability in the Tubes business 15
Slide 16: Q4 2022 Mine and Forest Performance
Q4 2022 MINE AND FOREST PERFORMANCE PRODUCTION SOLD (million tonnes) EBITDA (€ million and % of revenues) 1.7 41 1.4 (13)% €(19)m 22 56% 31% Q4 2021 Q4 2022 Q4 2021 Q4 2022 REVENUES (€ million) IRON ORE PRICES (CFR China 62% Fe $/tonne) 73 70 $160 (3)% $120 Q4 2021 Q4 2022 Iron ore mine profitabilit
Slide 17: Q4 2022 Group Financial Highlights
Q4 2022 GROUP FINANCIAL HIGHLIGHTS SG&A (€ million and % of revenues) Q4 2021 – Q4 2022 REVENUES BRIDGE (€ million) 89 335 (9) 1,541 142 9 83 +€6m 1,064 7.8% 5.8% Q4 2021 Q4 2022 Q4 2021 Forex Volume Price/Mix Mine and Q4 2022 Forest Q4 2021 – Q4 2022 EBITDA BRIDGE (€ million) ➢ Financial income at
Slide 18: Group Free Cash Flow and Working Capital
GROUP FREE CASH FLOW AND WORKING CAPITAL Q4 2022 EBITDA TO FREE CASH FLOW BRIDGE (€ million) PROGRESSION OF WORKING CAPITAL (€ million) 1,660 183 (78) 1,471 1,349 (15) (62) 312 1,190 (51) 266 985 (23) Q4 2022 Provisions Interest Tax Change in Capex Restructuring Q4 2022 FY2021 Q1 2022 Q2 2022 Q3 202
Slide 19: Net Debt and Liquidity
NET DEBT AND LIQUIDITY € million ➢ Asset disposals/other of €98 million: Net Debt Net Debt (End of (End of • €45 million non-cash items including accrued interest Q3 2022) Q4 2022) and fair-value adjustments on debt • €53 million change in cash items, including €26 million disposal on assets and oth
Slide 20: 5. FY 2023 Outlook and Key Takeaways
5. FY 2023 OUTLOOK AND KEY TAKEAWAYS 20
Slide 21: 2023 Outlook
2023 OUTLOOK FY 2023 EBITDA IMPROVEMENT DRIVEN BY BOTH TUBES …LEADING TO POSITIVE FREE CASH FLOW GENERATION AND MINE AND FOREST… IN 2023… (a) (€ million) (€ million) FY 2022 FY 2023 …AND FURTHER NET DEBT REDUCTION (b) (€ million) FY 2022 FY 2023 End Q2 End Q4 End Q1 End Q2 End Q3 End Q4 End Q4 2021
Slide 22: Investor Outreach Update
INVESTOR OUTREACH UPDATE REINFORCEMENT OF THE INVESTOR RELATIONS TEAM CAPITAL MARKETS DAY ► Connor Lynagh ► Head of Investor Relations ► To join March 9, 2023 ➢ 10 years of experience as a lead equity analyst for the Oil Services and Refining sectors at Morgan Stanley ➢ MBA from the NYU Stern School
Slide 23: Key Take Aways
KEY TAKE AWAYS ➢ Strong performance in 2022 with all financial objectives attained; strong increase in profitability, positive Free Cash Flow and significant Net Debt reduction in H2 (a) (b) ➢ New Vallourec plan on track to generate planned €230 million recurring EBITDA uplift with full effect start
Slide 24: Appendices
APPENDICES Y vallourec 24
Slide 25: Q4 2022 KPI per Segment
Q4 2022 KPI PER SEGMENT Holding companies and in € million Tubes Mine and Forest Inter-segment transactions Total others Q4 2022 Q4 2021 % change Q4 2022 Q4 2021 % change Q4 2022 Q4 2021 % change Q4 2022 Q4 2021 % change Q4 2022 Q4 2021 % change INCOME STATEMENT Volume sold (a) 514 510 1% 1.4 1.7 (1
Slide 26: FY 2022 KPI per Segment
FY 2022 KPI PER SEGMENT Holding companies and in € million Tubes Mine and Forest Inter-segment transactions Total others FY 2022 FY 2021 % change FY 2022 FY 2021 % change FY 2022 FY 2021 % change FY 2022 FY 2021 % change FY 2022 FY 2021 % change INCOME STATEMENT Volume sold (a) 1,804 1,640 10% 4.0 8
Slide 27: Tubes Revenues Breakdown – Q4 & FY 2022
TUBES REVENUES BREAKDOWN – Q4 & FY 2022 REVENUE BY REGION in € million Q4 2022 Q4 2021 % change FY 2022 FY 2021 % change Europe 137 135 1.4% 606 537 12.9% North America 744 311 139.0% 2,094 828 153.0% Middle East 111 127 (12.7)% 434 334 29.7% Asia 111 121 (8.4)% 389 402 (3.3)% South America 241 211
Slide 28: Q4 2022 P&L
Q4 2022 P&L FY 2022 FY 2021 Change In € million Q4 2022 Q4 2021 Change 4,883 3,442 41.9% Revenues 1,541 1,064 44.8% -3,807 -2,605 46.1% Cost of sales -1,126 -845 33.3% 1,076 837 28.6% Industrial Margin 415 219 89.5% 22.0% 24.3% (2.3)p.p. (as a % of revenue) 26.9% 20.6% 6.3p.p. -349 -316 10.4% Sales,
Slide 29: Balance Sheet as of December 31st, 2022
BALANCE SHEET AS OF DECEMBER 31ST, 2022 In € million Assets 12/31/2022 12/31/2021(a) Liabilities 12/31/2022 12/31/2021(a) Equity - Group share 1,643 1,763 Net intangible assets 37 46 Non-controlling interests 42 45 Goodwill 40 38 Total equity 1,685 1,808 Net property, plant and equipment 1,829 1,753
Slide 30: Indebtedness
INDEBTEDNESS In € million 12/31/2022 Bond issue – maturing in June 2026 1,135 PGE 220 ACC ACE 282 Other 43 TOTAL GROSS FINANCIAL INDEBTEDNESS 1,681 Cash and cash equivalents 552 TOTAL NET FINANCIAL INDEBTEDNESS 1,130 30
Slide 31: Investor Relations Contact and Financial Calendar
➢ Euronext Paris: ISIN code: FR0013506730, Ticker: VK USA: American Depositary Receipt (ADR) - ISIN code: US92023R4074, Ticker: VLOWY ➢ Investor Relations Contact - Vallourec Group • Email: investor.relations@vallourec.com • www.vallourec.com ➢ Financial Calendar: • May 17, 2023: Publication of Q1 2