Tenaris S.a. · MIL:TEN
Tenaris — Investor Presentation (February 2009)
16 slides from Tenaris's investor presentation, February 2009
Slide 1: Investor Presentation
Tenaris Investor Presentation
Slide 2: Disclaimer
Disclaimer This presentation contains “forward-looking statements.” Forward-looking statements are based on management’s current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by th
Slide 3: Oil prices strongly corrected but rig count yet to be affected
Oil prices strongly corrected but rig count yet to be affected Rig count WTI US$/bbl 6,000 120 5,000 100 4,000 80 3,000 60 2,000 40 1,000 20 0 0 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 Current International USA & Canada WTI US$/bbl Source: EIA and Baker H
Slide 4: Supply is constrained but what will happen to demand?
Supply is constrained but what will happen to demand? Million bbl/d 100 50% 45% 90 40% 80 35% 70 30% 60 25% 20% 50 15% 40 10% 30 5% 20 0% 1974 1979 1984 1989 1994 1999 2004 2009E Spare capacity World oil demand World oil production capacity Spare capacity / World oil demand (%) Source: EIA Investor
Slide 5: Supply side constraints will remain
Supply side constraints will remain World oil Access to world’s demand and production proven oil reserves Million bbl/d Oil reserves held by 120 new Russian companies 2015 6% 100 94 Mill NOC oil reserves with 2007 equity access 85 Mill 11% 80 New investments Reserves with full IOC access 6% 60 51 Mi
Slide 6: Relative positioning in the USA and Canada
Relative positioning in the USA and Canada • USA and Canada – 13 industrial Depletion in the USA facilities; 29% of our total (2002=100) revenues (2008) 220 • 80% of USA OCTG sales are to 180 alliance and program customers 140 • The majority of our expected USA alliance sales will be to customers 10
Slide 7: Relative positioning in the rest of the world
Relative positioning in the rest of the world • Long term agreements with majors Tenaris OCTG sales volumes to NOCs ex USA and Canada • JIT and key customer relationships with Latin American NOCs concerned about energy security • Key Middle East NOC customers coming NOCs out of inventory adjustment
Slide 8: Relative positioning: Costs and financial position
Relative positioning: Costs and financial position FX rates (Jan 08 = 100) • Flexible industrial system using electric arc furnaces production 140 route 130 120 • Ability to adjust production first in 110 higher cost facilities 100 90 • Labor and local costs benefit from 80 US dollar appreciation (M
Slide 9: Products and services for a complete range of applications
Products and services for a complete range of applications • TenarisHydril premium connections cover full range of applications with leading technology • Combination of premium, seamless, welded and coiled tubing unique in our sector and instrumental to expansion of alliance model Blue™ Wedge 523™ •
Slide 10: Raw material cost environment
Raw material cost environment Correction after sharp increase in 2008 H1 (Jan 2006 = 100) 450 400 350 300 250 200 150 100 50 0 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Scrap HRC Pig iron Iron ore - pellets Investor Presentation Tenaris February 2009 10
Slide 11: Margins per ton of our Tubes segment
Margins per ton of our Tubes segment Prices and costs per metric ton of our Tubes segment US$ per metric ton 4,000 3,000 2,000 1,000 0 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 Margin per ton Cost per ton Price per ton Pip
Slide 12: Regions show different market dynamics
Regions show different market dynamics US$ million 2006 2007 2008 North America 1,993 2,922 4,519 South America 960 1,222 1,354 Europe 1,315 1,661 1,706 Middle East & Africa 1,896 2,058 1,810 Far East & Oceania 663 690 727 Total tubes sales 6,827 8,553 10,115 Projects 454 876 1,271 Others 447 613 74
Slide 13: Strong operating results
Strong operating results Millions of US$ 2005 2006 2007 2008 (except ratios and per ADS amounts) Net sales 6,210 7,728 10,042 12,132 Tubes 5,128 6,827 8,553 10,115 Projects 790 454 876 1,271 Others 292 447 613 746 Operating income 1,946 2,792 2,957 3,028 EBITDA 1 2,158 3,046 3,449 4,064 EBITDA margi
Slide 14: Preparing for the next cycle
Preparing for the next cycle • New small diameter rolling mill in Mexico with an annual production capacity of 450,000 tons of pipes • Capital expenditure plans to focus on long-term projects involving safety, quality, technology and product development. • Projects which were aimed at increasing cap
Slide 15: Summary
Summary • We continue to strengthen our unique position in the industry • Our financial strength and engineering capabilities enable us to undertake an expansion program of organic growth • Human resource base strengthened through investment in TenarisUniversity • Preparing to accompany the next exp
Slide 16: Investor Presentation Tenaris February 2009
Investor Presentation Tenaris February 2009 16