Vallourec SA · EURONEXT:VK
Vallourec SA — Kepler Cheuvreux Autumn Conference 2022
24 slides from Vallourec SA's conference presentation, Sep 14, 2022
Slide 1: The New Vallourec: Realizing the Opportunity
The New Vallourec: Realizing the Opportunity Kepler Cheuvreux Autumn Conference September 14, 2022 27 July, 2022 1
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER Forward-Looking Statements This presentation may include 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”, “sh
Slide 3: The New Vallourec: Realizing the Opportunity
THE NEW VALLOUREC: REALIZING THE OPPORTUNITY 1 2 Positive market dynamics New Vallourec transformation 3 4 Solid Q2 performance 2022 financial objectives quantified 3
Slide 4: 1. Positive Market Dynamics
1. POSITIVE MARKET DYNAMICS 4
Slide 5: Higher Drilling and OCTG Prices
HIGHER DRILLING AND OCTG PRICES Global Rig Count OCTG Price Evolution Increase +191% +93% +68% +44% from 3 578 COVID Trough $3 758 2 337 2,211 2 177 2 029 $2 600 1 687 $1 654 $2 200 1 593 $1 631 $1 592 $1 654 1 352 1 361 $1 290 $1 350 $1 312 $1 320 $920 $/ton (2) 2014 2015 2016 2017 2018 2019 2020 2
Slide 6: 2. 'New Vallourec' Transformation
2. ‘NEW VALLOUREC’ TRANSFORMATION 6
Slide 7: Reinforced Governance Framework
REINFORCED GOVERNANCE FRAMEWORK New reference shareholders New executive management team ► Public company with private equity ► New Chairman and CEO: Philippe Guillemot mindset ► New hires for Executive Committee to drive ► Apollo (28.5%), SVP Global (6.2%) transformation ► 65% free-float ► Target:
Slide 8: New Vallourec Journey
NEW VALLOUREC JOURNEY Financial restructuring completed New Vallourec transformation ► €1.7bn debt reduction ► Closure of German assets, transfer of O&G activities ► Refinanced residual debt with 5 years maturity to Brazil, and rationalization of other European assets ► Committed €462m RCF ► Streaml
Slide 9: New Industrial Footprint by 2024
NEW INDUSTRIAL FOOTPRINT BY 2024 EASTERN HEMISPHERE (CHINA) 2024 Rolling capacity after NORTH AMERICA transfer: 600,000 tonnes Steel capacity: 750,000 tonnes Rolling capacity: 750,000 tonnes SOUTH AMERICA Steel capacity: 950,000 tonnes Rolling capacity: 1,100,000 tonnes (30)% Reduced CO2 content of
Slide 10: New Vallourec Yields Benefits for All Stakeholders
NEW VALLOUREC YIELDS BENEFITS FOR ALL STAKEHOLDERS Closure of German assets, transfer of O&G activities to Brazil and rationalization of other European assets 1 +€130m 2,400 Recurring EBITDA increase (30)% Headcount reduction* (+€20m Capex reduction) Reduced CO2 content of tubes produced in Brazil v
Slide 11: P&L and Cash Profile of the New Vallourec Implementation
P&L AND CASH PROFILE OF THE NEW VALLOUREC IMPLEMENTATION Ramp-up of €230 million recurring EBITDA uplift Illustrative cash flow profile Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Restructuring Cash Out (a) Restructuring Cash In (
Slide 12: 3. Solid Q2 2022 Performance
3. SOLID Q2 2022 PERFORMANCE 12
Slide 13: Q2 2022 Key Figures
Q2 2022 KEY FIGURES TUBE VOLUMES (k tonnes) REVENUE (€ million) 433 1,144 842 +35.9% +13.6% Mine revenue 381 Tube revenue Q2 2021 Q2 2022 Q2 2021 Q2 2022 EBITDA (€ million) FREE CASH FLOW (€ million) ~240 Q2 2021 Q2 2022 160 16 148 (42) Mine normalized EBITDA (187) Working Mine EBITDA (92) capital F
Slide 14: Cash Flow
CASH FLOW Q2 2022 EBITDA to FCF bridge (€ million) Q2 21/22 Net Working Capital (€ million) o/w 160 (21) €1,471m 139 (49) inventory (17) 1,471 (32) 41 o/w €870m inventory 928 (187) (146) (25) (171) Q2 2022 Provisions Cash Interest Tax Other (incl Operating Change in Operating Capex Free Cash EBITDA
Slide 15: Net Debt and Liquidity
NET DEBT AND LIQUIDITY (€ million) Net Debt Net Debt ► Liquidity position of €752 million: as of as of March 31 June 30 ► Cash of €365 million 2022 2022 ► Revolving Credit Facility of €462 million o/w €387 million remaining headroom ► Average debt maturity of 4 years ► Vallourec Outlook Revised To P
Slide 16: 4. 2022 Financial Objectives
4. 2022 FINANCIAL OBJECTIVES 16
Slide 17: 2022 Outlook
2022 OUTLOOK 2022 EBITDA Guidance at €650 to €750 million ► 2022 EBITDA now expected in a range of €650 to €750 million (€ million) ~1,000* ► EBITDA driven by growth of tube business [650-750] (particularly in North America) 492 ► This strong performance more than offsets significantly lower than no
Slide 18: Summary of the 'New Vallourec'
SUMMARY OF THE ‘NEW VALLOUREC’ New corporate philosophy… …to increase shareholder value ► Strict focus on value vs. volume ► Increase operating earnings and cash flow ► Cycle proof the company, lowering the break- ► Optimize working capital with sustainable even point to be free cash flow positive a
Slide 19: Appendices
APPENDICES Y vallourec 19
Slide 20: Q2 2022 P&L
Q2 2022 P&L In € million Q2 2022 Q2 2021 Change Revenue 1,144 842 35.9% Cost of sales (890) (599) 48.6% Industrial Margin 254 243 4.5% (as a % of revenue) 22.2% 28.9% (6.7)p.p. Sales, general and administrative costs (98) (81) 21.0% (as a % of revenue) (8.6)% (9.6)% (1)p.p. Other 4 (14) na EBITDA 16
Slide 21: Revenue Breakdown – Q2 2022
REVENUE BREAKDOWN – Q2 2022 REVENUE BY REGION As % of As % of In € million Q2 2022 Q2 2021 Change revenue revenue Europe 142 12.4% 134 15.9% 6.0% North America (Nafta) 461 40.3% 194 23.0% 138.2% South America 264 23.0% 283 33.6% (6.7)% Asia and Middle East 231 20.2% 173 20.5% 34.1% Rest of the world
Slide 22: Balance Sheet as of June 30th, 2022
BALANCE SHEET AS OF JUNE 30TH, 2022 In € million Assets 06/30/2022 12/31/2021 Liabilities 06/30/2022 12/31/2021 Equity - Group share * 1,627 1,763 Non-controlling interests 48 45 Net intangible assets 43 45 Total equity 1,674 1,808 Goodwill 43 38 Shareholder loan - - Net property, plant and equipmen
Slide 23: Indebtedness
INDEBTEDNESS In € million 06/30/2022 Bond issue – maturing in June 2026 1,150 PGE 216 RCF 75 ACC ACE 264 Other 49 TOTAL GROSS FINANCIAL INDEBTEDNESS 1,754 Cash 365 TOTAL NET FINANCIAL INDEBTEDNESS 1,389 23
Slide 24: Investor Relations Contact
► Financial calendar: ► Euronext Paris: ISIN code: FR0013506730, • November 21, 2022 – Publication of Q3 and nine- Ticker: VK month 2022 results USA: American Depositary Receipt (ADR) - ISIN code: US92023R4074, Ticker: VLOWY ► Conference and roadshow ► Investor Relations Contact - Vallourec Group •