Tubacex, S.a. · BME:TUB
Tubacex — Investor Presentation (June 2016)
43 slides from Tubacex's investor presentation, June 2016
Slide 1: Analyst Presentation
Analyst Presentation June 2016
Slide 2: Index
Index 1. TUBACEX GROUP 2. ASSESSMENT OF 2015 3. PROSPECTS FOR 2016 4. STRATEGIC PLAN 5. STOCK EXCHANGE
Slide 3: TUBACEX Group
TUBACEX GROUP : & ius ' : © he ee ote : tan” a. (ihe a xenon
Slide 4: Milestones
TUBACEX Group Milestones 1970-1990 First commercial offices in: 1963 • Mexico (1971) • Houston (1975) • Netherlands (1979) 1991 1995 TUBACEX • Canada (1983) Acquisition of First commercial foundation • France and Italy (1985) SALEM TUBE office in Beijing (EEUU) 1999 2000-2010 2015 Commercial offices
Slide 5: A strong Group to your service
TUBACEX Group A strong Group to your service A fully integrated player Steel billets & Pipes & tubes Master Commercial Hot extrusion Cold finishing & fittings network bars distributor Global leader in seamless stainless steel tubes manufacturing with the widest portfolio Corporate Presentation 2016
Slide 6: Key facts
TUBACEX Group Key facts Worldwide largest supplier of seamless stainless Steel tubes Widest portfolio in the market 150 million EUR invested in the last 5 years More than 700 customers in more than 100 countries Commercial presence in 38 countries 2,300 professionals Leading provider of
Slide 7: Sales breakdown by sector
TUBACEX Group Sales breakdown by sector* E&P Oil & Gas: 3% 5% – Fall in the importance of E&P as a result of the 13% 13% cuts in the Capex of oil companies – Better relative performance of the gas sector 15% 26% Power Generation: 30% – Record year for sales of tubes for boilers at power stations
Slide 8: Geographical breakdown
TUBACEX Group Geographical breakdown USA & Canada Europe Asia Weak general market Low order intake in the Very good development of situation North Sea the power generation Important orders in GoM Good performance of the sector Downstream segment Great importance of gas in Middle East 14%
Slide 9: Assessment of 2015
2 ASSESSMENT PROPUESTA OF DE 2015 ACUERDOS
Slide 10: Macroeconomic environment
Assessment of 2015 Macroeconomic environment Increasing uncertainty regarding growth sustainability has impacted the stocks markets and raw materials Nickel price evolution (US$/ton) Brent price evolution (US$/barrel) 25.000 140 22.000 120 19.000 100 16.000 80 13.000 60 10.000 40 7.000 20 The pr
Slide 11: Oil sector
Assessment of 2015 Oil sector Investments in E&P ($mm) We are facing the worst crisis in the sector since 1986 -43% 673.170 It is lasting longer and is more intense than expected -27% Investment expenditure fell by 43% in 2015, the largest drop since 1986 382.544 The fall projected for 2016
Slide 12: Investment in Oil sector
Assessment of 2015 Investment in Oil sector Upstream capex evolution Capex in Refining (b$) Europe -43% -16% +3% 8,1 North America Middle East 7,0 -40% -39% 6,4 6,2 -54% -5% India, Asia, Australia -46% -18% LatAm Africa -39% -26% -86% -44% 2014 2015 2016E 2017E Region Expected fall Fall in Capex in
Slide 13: General assessment of the year
Assessment of 2015 General assesment of the year Existence of external factors with an adverse impact on TUBACEX’s results… Drop of nickel: Nickel price has fallen by more than 40% during 2015. In average terms, the average price of NEGATIVE EFFECTS nickel during 2015 was 30% lower than its averag
Slide 14: Management Focus
Assessment of 2015 Management Focus 1. Gain market share 2. Continue doing the same things but better • Sales organization strengthening • Specific strategic product plan • Technical standardization • Global value offer for customers • TxPS implementation in all plants • Accelerated pending • Action
Slide 15: Launched projects
Assessment of 2015 Launched projects Mgt Board/ Committee Project Leader Sponsor Steering Comitee Project team 1 Project team 2 Project team 3 Sponsor: Appointed by Mgt Board. Supports, takes part in Steering Committee, guaranties the correct resource allocation, consultants. Management Committee: D
Slide 16: New Perimeter
Assessment of 2015 New Perimeter • Reinforced competitive position • Greenfield Project in Cantabria • Sectoral diversification • Offer of value-added services: • Combined offer of tubes and fittings • Machining • Manufacturer offering a wider • Coatings dimensional range • Shot-peening • Plants in
Slide 17: Business Strategy
Assessment of 2015 Business Strategy Focus on added value Long-term objective Product breakdown Premium products Premium Value chain New products 75% Standard 72% Margin 66% 60% 60% 56% 56% 50% 50% 50% 40% 53% 2015 50% 2013 2014 46% 42% 2012 36% 28% 29% 20% D C B A 50% Type of product 2012 2013 (Val
Slide 18: Operational Strategy
Assessment of 2015 Operational Strategy Integrated focus on improvement Milestones 2015 Reorganization of the Roadmap, giving greater flexibility to plants and Continuous integrating Health and Safety as Improvement basic components Continuous Significant improvement in the use of Improvement ma
Slide 19: Operational Strategy
Assessment of 2015 Operational Strategy TxPS Deployment Roadmap Results 2015 TxPS 4: TxPS 3: TxPS 2: TxPS 1: TxPS B: Innovation 2015: Integration of Safety tools in TxPS B and reorganization of other tools to facilitate integration in new companies in less time Corporate Presentation 2016 19
Slide 20: Innovation Strategy
Assessment of 2015 Innovation Strategy Business vision focus on client Transforming the most demanding needs into customized solutions of high technological value developed in co-creation with customers Support of EIB through a loan to finance the Innovation and Technological Development plan de
Slide 21: Management strategy
Assessment of 2015 Management strategy Initiatives Better management of resources • Implementation of management cycles: Strengthening of sales organization Management • Shift / day / month / week / management plan / strategic cycle Cycles • Higher standardization and PDCA deployed to over 180 peo
Slide 22: General Considerations
Assessment of 2015 General Considerations Under normal market circumstances, 2015 would have been the year for the consolidation of the Strategic Plan, practically fulfilling the objective set for 2017 Calculation of the 2014 pro forma factors places the EBITDA in excess of €80 M even including
Slide 23: FY 2015 P&L
Assessment of 2015 FY 2015 P&L Mill.€ 2014 2015* % var. Revenues 546,7 533,4 -2,4% EBITDA 64,1 48,9 -23,7% EBITDA margin 11,7% 9,2% EBIT 43,7 15,6 -64,4% EBIT margin 8,0% 2,9% Net Profit 23,8 8,4 -64,6% Net margin 4,3% 1,6% * Significant change in the consolidation perimeter vs. 2014 Resilience to c
Slide 24: Balance Sheet
Assessment of 2015 Balance Sheet Mill.€ 2014 2015* Var. (M€) Non current assets 287.3 394.4 107.1 Net working capital 202.4 210.1 7.7 Total Net Assets 489.7 604.5 114.8 Total Equity (1) 285.1 317.5 32.4 Net Financial Debt(2) 151.5 220.5 69.0 Others (net) 53.1 66.5 13.4 Total Equity and Liabilities 4
Slide 25: Financial position
Assessment of 2015 Financial position NFD/EBTIDA (times) Cash flow before acquisitions Gross Cash flow 152M€ generated in 3 years 305M€ generated in 3 years 68 129 5,7x 47 96 4,5x 80 3,8x 37 2,4x 16 2012 2013 2014 2015 2012 2013 2014 2015 2012 2013 2014 2015 -25 Debt maturities schedule 47% 32% 28%
Slide 26: Prospects for 2016
3 PROSPECTS FOR 2016
Slide 27: Market environment and action plan
Prospects for 2016 TUBACEX Action Plan We do not foresee a change in the market Raw Materials: sharp fall in nickel, Diversification: of sectors, products MARKET ENVIRONMENT ferrous alloys, molybdenum and oil and markets. Oil&Gas Sector: investment cuts Cost Control: Adjustment plan in all a
Slide 28: Key issues for the 2016 FY
Prospects for 2016 Key issues for the 2016 FY Providing the best solution by… New Products New Tecnologies New services • Co-development with customers • Lean manufacturing • Additional treatments and • New grades and materials practices finishes • Offer of new dimensions and • New production proc
Slide 29: Key Aspects
Prospects for 2016 Key Aspects Concentration on cash generation and defensing the Balance Sheet Continuation of the projects launched in 2015 Focus on the plan to reduce overheads Growth from the increased market share in strategic products and markets and entry into new sectors other than O
Slide 30: Main financials Q1 2016
Prospects for 2016 Main financials Q1 2016 Mill.€ Q1 2015 Q1 2016 % var. Revenues 159.8 121.4 -24.0% EBITDA 17.5 7.8 -55.6% EBITDA margin 10.9% 6.4% EBIT 10.4 (0.6) n.m. EBIT margin 6.5% neg. Net Profit 6.6 (0.5) n.m. Net margin 4.2% neg. Dec. 2015 Q1 2016 % var. Net working capital 210.1 221.2 5.3%
Slide 31: Commitment to growth (M&A)
Prospects for 2016 Commitment to growth (M&A) TUBACEX has signed an Letter of Intent to acquire a significant stake in the stainless steel Fittings division of Awaji in the forthcoming months The Division's aim is to invoice 20-25 million euros over 3 years The transaction shows the commitment
Slide 32: Strategic Plan
4 STRATEGIC PROPUESTAPLAN DE ACUERDOS
Slide 33: Four strategic targets
Strategic Plan Four strategic targets Clients People Market Shareholders Be a benchmark Be the Company for Reduce market Double the supplier for which people want volatility Company’s value in customers to work 5 years • Market share • Safety • Break-even vs. sales • Results: EBITDA, • Quality / ser
Slide 34: Strategic Plan Phases
Strategic Plan Strategic Plan Phases Successful fulfillment of Phase I 1. Sales growth 2012 assuming the stable nickel price of 2012 Corporate Presentation 2016 34
Slide 35: Expected Trends 2016
Strategic Plan Expected Trends 2016 It will take some years to return to the level of new projects launched in 2013-2014 Only projects that are sustainable at barrel prices of 50-60 USD will be approved Capex level required for similar projects before the crisis will be reduced by 20-30% Cor
Slide 36: Our Response
Strategic Plan Our Response We must be proactive, offering the market: Co-design in the prior phase to optimize costs Standardization in the design of plants Multi-year framework contracts offering “just in time” services and better prices Elimination of “non-value” in the whole supply cha
Slide 37: Management Focus Evolution
Strategic Plan Management Focus Evolution Strategic Plan 2013 Strategic Plan 2014 Strategic Plan 2015 Lay the bases and improve the Organic and inorganic growth Consolidation of the realm Balance Sheet and P&L Focus 2016… From tube manufacturer... to supplier of solutions and services Diversifying o
Slide 38: Summary of Perspectives 2016
Strategic Plan Summary of Perspectives 2016 Prospects We enjoy a sound financial position We hope to have touched rock bottom in the first quarter of the year We are taking the appropriate measures to optimize the short term without jeopardizing the medium and long term We are active in impo
Slide 39: Stock Exchange
5 STOCK EXCHANGE
Slide 40: Stock price evolution
Tubacex Share Stock price evolution +7.3% -43.5% +45.6% +18% 09.18.2014 12.31.2015 04.26.2016 4.33€ 1.75€ 2.38€ 12.31.2013 2.89€ 12.31.2014 Dec. 2012 3.10€ 01.20.2016 05.20.2016 1.985€ 1.41€ 2.07€ Drop in line wiht oil fall (-35%) and nickel fall (-42%) Data as of 20 May 2016 Corporate Presentation
Slide 41: Share Evolution
Tubacex Share Share Evolution Evolution since June 2014 Evolution since 2013 +4% -44% -50% -50% Tubacex Indice comparables Tubacex Indice comparables Since the start of the oil crisis, Tubacex performance has Since the start of the new Strategic Plan, the value of been the best in the sector Tubacex
Slide 42: Liquidity
Tubacex Share Liquidity Traded securities (million securities) Shareholder Structure +5% JM Aristrain 11,0% 200 162,0 170,6 Cartera Industrial Rea 160 7,0% 120 108,1 Ecofin 4,9% Norges Bank* 80 4,1% 42,1 Itzarri 3,2% 40 EDM 3,1% 0 2012 2013 2014 2015 Free - float Fidelity 1,1% 65,6% dic.-14 ene.-15
Slide 43: Thank you!
THANK YOU! WWW.TUBACEX.COM Corporate Presentation 2016 43