Vallourec Sa · EURONEXT:VK
Vallourec Sa — Q1 2024 Earnings Presentation
34 slides from Vallourec Sa's earnings presentation, May 16, 2024
Slide 1: Q1 2024 Results
Q1 2024 Results May 16, 2024 vv valiourec
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: Agenda
Agenda Topic Speaker Slide 1 Q1 2024 Highlights Philippe Guillemot, Chairman of the Board & Chief Executive Officer 4 2 Market & Commercial Environment Philippe Guillemot, Chairman of the Board & Chief Executive Officer 6 3 Q1 2024 Results Review Sascha Bibert, Chief Financial Officer 11 4 Outlook &
Slide 4: Q1 2024 Highlights
1 Q1 2024 Highlights Philippe Guillemot Chairman of the Board & Chief Executive Officer
Slide 5: Q1 2024 Highlights
Q1 2024 Highlights Results & Outlook Continuing to Deliver Strong Cash Flow and Profitability • First quarter 2024 results reflect the benefits of the New Vallourec plan and Value over Volume strategy • Tubes EBITDA per tonne reached second-highest level in last 15 years at €751; Group EBITDA was €2
Slide 6: Market & Commercial Environment
2 Market & Commercial Environment Philippe Guillemot Chairman of the Board & Chief Executive Officer
Slide 7: US OCTG Market: Pricing Not Yet Reflecting Market Balance
US OCTG Market: Pricing Not Yet Reflecting Market Balance Rig count stable since October Inventories have normalized Pricing still somewhat lower US Horizontal Rig Count Months of OCTG Inventory Seamless OCTG Price ($ / Tonne) 750 8.0 * 4,062 3,538 7.0 650 2,992 2,567 6.0 2,382 2,235 550 5.0 450 4.0
Slide 8: International OCTG Market: Demand Remains Robust
International OCTG Market: Demand Remains Robust International offshore activity at post-COVID highs International market pricing remains strong Onshore Rig Count Offshore Rig Count Seamless OCTG Price ($ / Tonne) Onshore (L Axis) Offshore (R Axis) Middle East North Sea 3,500 800 250 2,920 3,000 3,0
Slide 9: Tubes Overview: Value over Volume Strategy Bearing Fruit
Tubes Overview: Value over Volume Strategy Bearing Fruit Tubes profitability up sequentially and YoY Results of the New Vallourec plan on display Tubes EBITDA / Tonne (€) • Continued growth in EBITDA per tonne reflects 832 power of Value over Volume strategy 751 • EBITDA / tonne of €751 highest sinc
Slide 10: Mine & Forest Overview: Capitalizing on Strong Market Pricing
Mine & Forest Overview: Capitalizing on Strong Market Pricing Mine production in line with expectations Market pricing supporting EBITDA Iron Ore Production Sold (Million Tonnes) • Production performance in-line with expectations 1.9 • Q1 2023 production sold 1.4m tonnes 1.8 1.7 • Continue to expect
Slide 11: Q1 2024 Results Review
3 Q1 2024 Results Review Sascha Bibert Chief Financial Officer
Slide 12: Key Group Figures
Key Group Figures Revenues EBITDA € Million € Million 1,338 320 (26%) 990 (27%) 235 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Adjusted Free Cash Flow Net Debt € Million € Million 570 194 485 172 (€85)m (11%) Q1 2023 Q1 2024 Q4 2023 Q1 2024 Please see “Definitions of Non-GAAP Financial Data” in the Appendix 12
Slide 13: Tubes Production and Revenue Details
Tubes Production and Revenue Details Volume Sold Average Selling Price Revenues Thousand Tonnes € / Tonne € Million 431 3,226 1,258 1,279 396 382 3,115 3,130 3,189 1,196 343 2,919 1,068 292 932 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q1 2023 Q2 2023 Q3 2023 Q4
Slide 14: Tubes Profitability
Tubes Profitability EBITDA and EBITDA Margin EBITDA per Tonne € Million and % of Revenues € / Tonne 279 751 648 +16% (21%) 220 24% 22% Q1 2023 Q1 2024 Q1 2023 Q1 2024 Please see “Definitions of Non-GAAP Financial Data” in the Appendix 14
Slide 15: Mine & Forest Performance
Mine & Forest Performance Production Sold Average Iron Ore Market Price1 Million Tonnes $ / Tonne (Quarterly Average) 125 123 1.5 (2%) 1.4 (9%) Q1 2023 Q1 2024 Q1 2023 Q1 2024 Revenues EBITDA € Million € Million and % of Revenues 93 80 48 (14%) (37%) 30 52% 38% Q1 2023 Q1 2024 Q1 2023 Q1 2024 Please
Slide 16: Group Net Income Analysis
Group Net Income Analysis Net Income, Group Share (Q1 2024) Net Income Evolution € Million Net Income, Group Share (€ Million) 200 157 159 105 105 100 78 76 6 53 – 20 (35) 11 (100) 235 46 (200) 105 (300) (400) EBITDA D&A Financial Other Income tax Net (415) income income, (500) (loss) Group Q1 Q2 Q3
Slide 17: First Quarter 2024 Group Cash Flow Bridge
First Quarter 2024 Group Cash Flow Bridge € Million 5 10 15 7 56 235 235 67 3 172 17 102 85 EBITDA Non-cash Financial Tax Adj. Chg. in Gross Adj. Restruct. Asset Total Non-cash (Increase) items in cash out payments operating working capital free cash & non- disposals & cash adj. to net decrease EBIT
Slide 18: Debt and Liquidity
Debt and Liquidity Debt Liquidity Net Debt (€ Million) € Million 1,714 1,493 1,590 1,130 1,498 1,539 186 1,000 868 1,391 190 741 177 570 181 485 1,203 185 462 462 462 189 462 312 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 703 462 Gross Debt (€ Million) 1,784 1,681 1,894 1,724 1,679 1,06
Slide 19: Holistic Balance Sheet Refinancing Completed
Holistic Balance Sheet Refinancing Completed Transaction Highlights Key Benefits • Increased and extended liquidity facilities Reduced • New 5-year €550m multi-currency RCF €30-35m net benefit per year1 Cost • Upsized and extended 5-year $350m ABL • Reduced and extended long-term debt • Issued new 8
Slide 20: Pro Forma Balance Sheet: Reduced Gross Debt, Ample Liquidity
Pro Forma Balance Sheet: Reduced Gross Debt, Ample Liquidity Gross debt to be reduced by €550m+ Strong liquidity for all market conditions € Million € Million 396 129 194 88 1,023 93 1,714 1,551 750 1,341 923 68 194 Q1 2024 2026 PGE PGE to be 2032 Other Pro Forma Q1 2024 Cash PGE to be Increased Inc
Slide 21: Outlook & Key Takeaways
4 Outlook & Key Takeaways Philippe Guillemot Chairman of the Board & Chief Executive Officer
Slide 22: 2024 Earnings, Cash Flow and Net Debt Outlook
2024 Earnings, Cash Flow and Net Debt Outlook Second Quarter 2024 Full Year 2024 Volumes to increase sequentially due to higher Strong international market environment to Tubes international shipments; EBITDA per tonne to persist with results benefiting from strong decline primarily due to lower US
Slide 23: Key Takeaways
Key Takeaways Our successful balance sheet refinancing has established a sustainable 1 capital structure aligned with the New Vallourec footprint Durable strength in the premium tubes market will contribute to 2 another year of robust results in 2024 We are ahead of plan in reducing our net debt and
Slide 24: Appendices
Appendices Y vallourec
Slide 25: Key Performance Indicators
Key Performance Indicators Q1 2024 Q4 2023 Q1 2023 QoQ chg. YoY chg. Volume sold* 292 382 431 (23%) (32%) Revenue (€m) 932 1,196 1,258 (22%) (26%) Tubes Average Selling Price (€) 3,189 3,130 2,919 2% 9% EBITDA (€m) 220 249 279 (12%) (21%) Capex (€m) 46 33 45 38% 3% Volume sold* 1.4 1.7 1.5 (21%) (9%
Slide 26: Tubes Revenue Breakdown
Tubes Revenue Breakdown Revenue by Region QoQ YoY in € million Q1 2024 Q4 2023 Q1 2023 % chg. % chg. North America 450 548 658 (18%) (32%) South America 153 230 189 (33%) (19%) Middle East 162 212 112 (24%) 45% Europe 51 57 152 (11%) (67%) Asia 68 89 54 (23%) 26% Rest of World 48 61 92 (20%) (48%) T
Slide 27: Income Statement
Income Statement € million, unless noted Q1 2024 Q4 2023 Q1 2023 QoQ chg. YoY chg. Revenues 990 1,276 1,338 (286) (348) Cost of sales (669) (886) (926) 216 257 Industrial margin 321 390 412 (70) (91) (as a % of revenue) 32.4% 30.6% 30.8% 1.8 pp 1.6 pp Selling, general and administrative expenses (87
Slide 28: Balance Sheet
Balance Sheet In € million Assets 31-Mar-24 31-Dec-23 Liabilities 31-Mar-24 31-Dec-23 Equity - Group share 2,307 2,157 Net intangible assets 40 42 Non-controlling interests 71 67 Goodwill 40 40 Total equity 2,378 2,224 Net property, plant and equipment 1,974 1,980 Bank loans and other borrowings (A)
Slide 29: Cash Flow Summary
Cash Flow Summary In € million Q1 2024 Q4 2023 Q1 2023 QoQ chg. YoY chg. EBITDA 235 280 320 (45) (85) Non-cash items in EBITDA 10 (1) 13 11 (3) Financial cash out 5 (1) (18) 6 23 Tax payments (15) (52) (16) 37 1 Adjusted operating cash flow 235 226 299 9 (64) Change in working capital (7) 92 (52) (9
Slide 30: Financial Indebtedness and Liquidity
Financial Indebtedness and Liquidity Financial Indebtedness In € million 31-Mar-24 31-Dec-23 8.500% Bonds due 2026 1,098 1,105 1.837% PGE due 2027 231 229 (a) ACC ACE 117 94 Other 106 42 Total gross financial indebtedness 1,551 1,470 Cash and cash equivalents 1,066 900 Total net financial indebtedne
Slide 31: Definitions of Non-GAAP Financial Data and Concepts
Definitions of Non-GAAP Financial Data and Concepts Adjusted free cash flow is defined as adjusted operating cash flow +/- change in operating working capital and gross capital expenditures. It corresponds to net cash used in operating activities less restructuring and non-recurring items +/- gross
Slide 32: Definitions of Non-GAAP Financial Data and Concepts
Definitions of Non-GAAP Financial Data and Concepts Free cash flow, as previously defined, may continue to be derived as follows: total cash generation - asset disposals & other cash items. This is also defined as EBITDA adjusted for changes in provisions, less interest and tax payments, changes in
Slide 33: Definitions of Non-GAAP Financial Data and Concepts
Definitions of Non-GAAP Financial Data and Concepts Net working capital requirement is defined as working capital requirement net of provisions for inventories and trade receivables; net working capital requirement days are computed on an annualized quarterly sales basis. Non-cash adjustments to net
Slide 34: Share Information and Financial Calendar
Share Information and Financial Calendar Share Information Financial Calendar Euronext Paris • May 23rd, 2024: Annual General Meeting ISIN code: FR0013506730 • July 26th, 2024: Publication of Second Quarter Ticker: VK and Half Year 2024 Results • November 15th, 2024: Publication of Third USA: Americ