Tubacex, S.A. · BME:TUB
Tubacex — Investor Presentation (July 2013)
41 slides from Tubacex's investor presentation, July 2013
Slide 1: Tubacex Corporate Presentation
TUBACEX Corporate Presentation WWW.TUBACEX.COM July 2013
Slide 2: Health & Safety
FIRST HEALTH & SAFETY Our O MISSION statement pledges l d that h the h people l working ki ini our group are one off the h company’s ’ main i values: We compromise to permanently promote a safe and pleasant work environment , always respecting the environment. In order to achieve this, the Compa
Slide 3: Occupational Risk Prevention Programme
FIRST OCCUPATIONAL RISK PREVENTION PROGRAMME The target is to ensure the continuous improvement of Prevention management in the Company, minimising the risks involved in our work. This is achieved through a series of ongoing prevention activities, organised by the management in conjunction with
Slide 4: Table of Contents
TABLE OF CONTENTS INTRODUCTION STRATEGY ECONOMICS TUBACEX CORPORATE PRESENTATION 4
Slide 5: Introduction
INTRODUCTION TUBACEX CORPORATE PRESENTATION 5
Slide 6: Seamless Stainless Steel Tube Sector
INTRODUCTION SEAMLESS STAINLESS STEEL TUBE SECTOR TUBACEX CORPORATE PRESENTATION 6
Slide 7: Sector main characteristics
Sector: main INTRODUCTION characteristics (III) SECTOR MAIN CHARACTERISTICS Strong growth Average growth of demand: 6% in 1993 – 2010 period Stainless steel has a longer life than other materials and it does not require maintenance. Significant substitution effect when stainless steel prices g
Slide 8: Sector main characteristics: linked to oil, gas & energy
Sector: main INTRODUCTION characteristics (III) SECTOR MAIN CHARACTERISTICS Linked to oil Gas & Energy sectors Carbon Stainless High alloys Several industrial processes Welded Construction tube Food Che- Automotive mistry Aerospace Oil conduction LNG Water Oil and gas exploration Energy generation S
Slide 9: Sector main characteristics: end markets
Sector: main INTRODUCTION characteristics (III) SECTOR MAIN CHARACTERISTICS … where Tubacex sells 90% of its products… CHEMICAL AND OIL PETROCHEMICAL • Onshore • Plants • Offshore • Organic • Refining • Plastics • Rubber • Fiber POWER GEN GAS • Thermal • Onshore • Combined cycles • Offshore • Cogene
Slide 10: Sector main characteristics: competitors
Sector: main INTRODUCTION characteristics (III) SECTOR MAIN CHARACTERISTICS New Competitors • “Commodity” and non-certified products. • Market share not relevant. relevant • Learning curve. Traditional Competitors • Specialization in higher value-added products. Global market • Allowing synergies am
Slide 11: Breakdown of Revenues 2013
INTRODUCTION BREAKDOWN OF REVENUES 2013 Revenues breakdown by end-user Revenues by geographical area sector(1) Low S i 7% Spain Row 7% exposure to Chemical & the Spanish Other 4% Petrochem market 14% Asia 18% Europe E&P Oil&Gas 53% 34% USA + Canada 15% Revenues breakdown by final Refining 33% destin
Slide 12: Fully Integrated Structure
INTRODUCTION FULLY INTEGRATED STRUCTURE Hot extrusion Cold rolling and stretching Raw materials Nickel Stainless scrap Molybdenum Ferrochrome Round bars and Others Tube Tube square billets Commercial Final offices Market Master Group Fittings Distributor Stocks TUBACEX CORPORATE PRESENTATI
Slide 13: Key Milestones
INTRODUCTION KEY MILESTONES 1963 1970 1980 1990 2000 2010 2013 1963 1988 2008 2010-11 Company foundation in First stainless grades are Strategic Plan First OCTG Ll di (Spain) Llodio (S i ) manufactured 2008 2012 2008-2012 and umbilical Reduction of carbon tubes are steel production manufactured
Slide 14: Strategy
STRATEGY TUBACEX CORPORATE PRESENTATION 14
Slide 15: Strategic Objectives: 5-year strategic goals
STRATEGY STRATEGIC OBJECTIVES. 5-year strategic goals Double the Reduce market Be a Be the company’s volatility benchmark company for value in 5 years supplier for which people clients want to work Results: EBITDA, EBIT, Break even vs. sales Market Share Safety etc. Product Diversification
Slide 16: Objective #1: Double the Company's Value
STRATEGY STRATEGIC OBJECTIVES Objective #1: Double the Company’s Company s Value €300 M €600 M Business Strategy Industrial Strategy Financial Strategy Product Mix Achieving of Operational Excellence Financial Cost through the COMPETE Program: Sales S l Channels Ch l Share Sh Price P i Man
Slide 17: Objective #2: Reduce market volatility
STRATEGY STRATEGIC OBJECTIVES Objective #2: Reduce market volatility Alliances and Diversify Subcontractings Break even management 65,000 Tns Alliances 50,000 Tns Internal Capacity 40,000 Tns Break-even Products Industrial Alliances Workforce flexibility Geography Commercial Alliances In
Slide 18: Objective #3: Be a benchmark supplier
STRATEGY STRATEGIC OBJECTIVES Objective #3: Be a benchmark supplier Target Actions Reliability Service Level* > 90% Operational Excellence Looking Rigor Quality < 300 PPM’s V.A. Commercial Profiles Quality < 15 claims Advanced Engineering, for Quality Innovation 3 products/year P
Slide 19: Objective #4: Be the Company for which people want to work
STRATEGY STRATEGIC OBJECTIVES Objective #4: Be the Company for which people want to work Personal satisfaction & illusion SURVEYS Satisfaction Communic. Personal Recognition 180º/ 360º index Policy development Culture O Occupational ti l safety f t TUBACEX CORPORATE PRESENTATION 19
Slide 20: Change in the Portfolio of Products
STRATEGY CHANGE IN THE PORTFOLIO OF PRODUCTS 2006 Revenues breakdown by end-user 2013 Revenues breakdown by end-user sector(1) sector(1) Chemical & Other 4% Petrochem 14% E&P Oil&Gas 34% Refining 33% Power Gen 15% • Successful fulfilment of the Strategic Plan….. • ….while significantly diversifying
Slide 21: Improvement of the Mix
STRATEGY IMPROVEMENT OF THE MIX Weight of new products in the mix Higher value added products New products • Commitment with innovation and development of new products • Strategic focus on new high value added products for sectors with positive growth perspectives • New products are expected to acco
Slide 22: Focus on High Added Value Products
STRATEGY FOCUS ON HIGH ADDED VALUE PRODUCTS High Added Value Products Umbilicals OCTG High Alloys Precision tubing Subsea Urea Nuclear SC Boilers Significant increase of the weight of E&P Oil&Gas sector TUBACEX CORPORATE PRESENTATION 22
Slide 23: Product Strategy: Tubacex positioning
STRATEGY PRODUCT STRATEGY. Tubacex positioning Traditional Products Higher Added Value Products + Off- shore Umbilicals wth OCTG arket Grow SC Boilers Urea Precision High Alloys Ma F Furnaces Heat Std Exchangers Downstream linepipe Std Nuclear Boilers - Bar - Profitability + The size indicates the v
Slide 24: Where does Tubacex want to be?
STRATEGY WHERE DOES TUBACEX WANT TO BE? HIGHER ADDED VALUE PRODUCTS: OIL & GAS POWER GENERATION TUBACEX CORPORATE PRESENTATION 24
Slide 25: Oil & Gas: exploration and extraction increasingly complex
STRATEGY OIL & GAS: Exploration and extraction are increasingly g y complex p Offshore Production (mboed) Deepwater Capex • In the last 5 years, more than 50% of new oil discoveries were made in deep waters • High levels of corrosion and extreme temperatures • The technology gy required q for the ex
Slide 26: OCTG. Oil Country Tubular Goods
STRATEGY OCTG. Oil Country Tubular Goods PRODUCTION TUBES USED IN PETROLEUM INDUSTRY, TO EXTRACT OIL AND GAS NEW SPECIALIZED PILGER MACHINES AND A NEW FINISHING LINE ALREADY WORKING IN SPAIN. SPAIN 60-170 mm O.D. TUBACEX CORPORATE PRESENTATION 26
Slide 27: Subsea umbilicals
STRATEGY Subsea umbilicals • CONNECTION LINE FROM A PLATFORM TO THE SEA BED (WELLS OR MANIFOLDS) • DISTRIBUTION OF FLOW LINE AND GAS PUMPING • TRANSPORT OF HYDRAULIC FLUIDS FOR CONTROL OF VALVES AND/OR PUMPS • INJECTION OF CHEMICAL SUBSTANCES TO DILUTE THE CRUDE OIL • NEW STATE OF THE ART PLANT AT S
Slide 28: Power Generation: coal plants still growing
STRATEGY POWER GENERATION: Coal plants as a primary source of energy gy still growing g g strongly.. gy Coal plants: global annual new capacity (GW) Source: IEA, Tubacex. • Energy generated from coal plants will grow at an annual average rate of 2.1% up to 2030, outperforming the average of the othe
Slide 29: Power Generation: materials for higher pressures and temperatures
STRATEGY POWER GENERATION: .. with materials that meet higher g pressures p and temperatures p Boilers in coal plants: composition and resistance Sub-critical Sub critical Supercritical Ultrasupercritical 250 bars 280 bars 360 bars 550 ºC 610 ºC 710 ºC CO2 emissions reduction vs. traditional power p
Slide 30: Strategic Alliance with Vallourec & Mannesmann
STRATEGY STRATEGIC ALLIANCE WITH VALLOUREC & MANNESMAN C Commercial i l Oil & Gas Technical PowerGen R+D Complementary Enhancement of goals products sought in Strategic Plan Wider range g TUBACEX CORPORATE PRESENTATION 30
Slide 31: Enhancing exposure to the fastest growing markets
STRATEGY Enhancing exposure to the fastest growing markets Deepwater Productive Capacity er day Million barrels pe • Brazil is going to have the highest expected growth rate in oil extraction capacity in the coming years • Extremely aggressive environments: offshore, deepwater and pre-salt. • Tubace
Slide 32: Tubacex Innovation: towards a change of model
STRATEGY TUBACEX INNOVATION: Towards a change of model Concept generation Development Large scale deployment hase-out Business Build Idea opportunity R&D Program Full scale business RAMP-UP generation def. & project development operation case election l ti Ph Accelerate Develop R&D Robust Capacity I
Slide 33: Our Roadmap
STRATEGY OUR ROADMAP… Phase I Phase II Phase III 2013 - 2014 201 201 - 2016 2015 201 201 2017… CASH ACHIEVEMENT & GROWTH GENERATION CONSOLIDATION TUBACEX CORPORATE PRESENTATION 33
Slide 34: Our Roadmap: phase targets
STRATEGY OUR ROADMAP… Phase I Phase II Phase III Hi h Add High AddeddV l P Value d Prod. Hi h Add High AddeddV l P Value d Prod. Hi h Add High AddeddV l P Value d Prod. Product Mix 30% vs. 70% Traditional 40% vs. 60% Traditional 50% vs. 50% Traditional Sales g growth >15% > 15% > 10% EBITDA Margin 1
Slide 35: Economics
ECONOMICS TUBACEX CORPORATE PRESENTATION 35
Slide 36: Financial Performance
ECONOMICS FINANCIAL PERFORMANCE Sales (€M) EBITDA (€M) 697,2 671,8 106,2 539,1 532,4 , 554,1 486 6 486,6 430,5 72,4 371,5 361,8 64,0 52,7 51,3 45,8 27,2 12,8 , -18,4 2005 2006 2007 2008 2009 2010 2011 2012 2013 2005 2006 2007 2008 2009 2010 2011 2012 2013 EBIT (€M) NET INCOME (€M) 56,7 89,5 37,6 55
Slide 37: Q4 2013 Results
ECONOMICS Q4 2013 RESULTS Sales (€M) ( ) 200 146 148 152 142 135 133 138 150 120 112 112 114 122 101 91 97 100 73 50 0 10 11 12 13 10 11 12 13 10 11 12 13 10 11 12 13 Q1 Q2 Q3 Q4 EBITDA (€M) 20,0 14,4 15,7 16,9 16 9 15,0 12,8 12,6 12,1 10,4 10,0 7,4 6,9 5,9 6,5 5,7 5,7 5,0 5,0 3,5 ‐4,4 00 0,0 ‐5,0 1
Slide 38: Financial Situation
ECONOMICS FINANCIAL SITUATION Working Capital vs. vs NFD (€M) Equity / Total Assests (%) 300 50% 46% 44% 41% 40% 41% 250 40% 38% 37% 37% 200 30% 150 20% 100 10% 50 0 0% Equity / Total Assets Working Capital Deuda Financiera Neta Due to our business model, Net Financial Debt is strongly correlated
Slide 39: Appendix
APPENDIX TUBACEX CORPORATE PRESENTATION 39
Slide 40: Jette Project: Umbilicals
UMBILICALS JETTE PROJECT Superduplex Umbilical Tube SBER SBER 42 1 x 2.0 42.1 20 21.25 x 1.1 SBER SBER 18.08 x 1.1 18 08 x 1.1 18.08 11 SBER SBER 19.02 x 1.57 19 02 x 1 19.02 1.57 57 Center tube TTI Amurrio SBER SBER 84.4 x 41.1 15.16 x 1.23 42.1x 2.0 First umbilical tubes supplied by Tubacex in o
Slide 41: Many thanks for your attention
MANY THANKS FOR YOUR ATTENTION WWW.TUBACEX.COM July 2013