Slide 1: FY and Q4 2023 Results
FY and Q4 2023 Results March 1, 2024
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 FY & Q4 2023 Highlights Philippe Guillemot, Chairman & Chief Executive Officer 4 2 Market & Commercial Environment Philippe Guillemot, Chairman & Chief Executive Officer 10 3 Q4 Results Review Sascha Bibert, Chief Financial Officer 15 4 Outlook & Key Takeaways Philippe G
Slide 4: FY & Q4 2023 Highlights
1 FY & Q4 2023 Highlights Philippe Guillemot Chairman & Chief Executive Officer
Slide 5: FY & Q4 2023 Highlights
FY & Q4 2023 Highlights Results & Outlook Strong Profitability and Further Deleveraging • Solid FY 2023 and fourth quarter 2023 results • FY 2023 EBITDA of €1,196m, outpacing prior outlook of €1,075m – 1,175m and original outlook of €950 – 1,100m; €280m in Q4 2023 • Adjusted free cash flow of €860m
Slide 6: The New Vallourec Plan
The New Vallourec Plan Key objectives of the New Vallourec plan New Vallourec production footprint now in effect Primary Financial Strategic Goals Targets North America France Domestic Capacity for Finishing and Domestic Demand Niche Products €230m EBITDA / €250m Saudi Arabia Local Value-Add FCF Imp
Slide 7: Update: New Vallourec Targets
Update: New Vallourec Targets Target Current Status Operations closed; Mulheim site divested; Closure of German tube operations dismantling underway Execution of €110m capex program in Brazil Project completed Reduction of global overhead by €100m Project completed Execution of premiumization strate
Slide 8: 2022 New Vallourec Plan Fully Executed; More to Come
2022 New Vallourec Plan Fully Executed; More to Come Already Implemented More to Come • Enhanced global pricing policies Go-to-Market • Develop premier New Energies franchise • Exit of European Industry market Strategy • Grow services and accessories revenues • Exit of China domestic market1 • Plann
Slide 9: Building Momentum in New Energies
Building Momentum in New Energies Meaningful progress in New Energies in 2023 • Substantial new business with favorable margins • >80% YoY increase in bookings (2023 vs. 2022) • >10 new customers across New Energies landscape • Winning business at in-line or accretive margins vs. Oil & Gas business
Slide 10: Market & Commercial Environment
3 Market & Commercial Environment Philippe Guillemot Chairman & Chief Executive Officer
Slide 11: US OCTG Market: Demand Stable, Pricing to Stabilize Imminently
US OCTG Market: Demand Stable, Pricing to Stabilize Imminently Rig count stable since October Imports remain suppressed Price declines slowing significantly US Horizontal Rig Count Monthly US OCTG Imports (Th. Tonnes) Seamless OCTG Price ($ / Tonne) 750 Monthly Imports 3 Month Moving Average 350 4,3
Slide 12: International OCTG Market: Continued Market Strength
International OCTG Market: Continued Market Strength International rig count stable at healthy levels 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,
Slide 13: Tubes Overview: Strong Demand and Solid Execution
Tubes Overview: Strong Demand and Solid Execution Tubes profitability up sequentially and YoY Market and operational tailwinds in 2024 Tubes EBITDA / Tonne (€) • Tubes results improved sequentially due to solid 832 execution in the Americas • Strong commercial environment, particularly in 648 651 Ea
Slide 14: Mine & Forest Overview: Performing as Expected
Mine & Forest Overview: Performing as Expected Mine production down slightly in Q4 Key business highlights Iron Ore Production Sold (Million Tonnes) • Production performance in-line with expectations 1.9 1.8 • Q4 2023 production sold 1.7m tonnes, as expected 1.7 • Continue to expect 6m tonnes of pro
Slide 15: Q4 Results Review
4 Q4 Results Review Sascha Bibert Chief Financial Officer
Slide 16: Key Group Figures
Key Group Figures Revenues EBITDA € Million € Million 1,541 312 280 1,276 (10%) (17%) Q4 2022 Q4 2023 Q4 2022 Q4 2023 Adjusted Free Cash Flow Net Debt € Million € Million 318 741 275 (€43)m (€171)m 570 Q4 2022 Q4 2023 Q3 2023 Q4 2023 Please see “Definitions of Non-GAAP Financial Data” in the Appendi
Slide 17: Tubes Production and Revenue Details
Tubes Production and Revenue Details Volume Sold Average Selling Price Revenues Thousand Tonnes € / Tonne € Million 3,130 1,467 514 2,853 (18%) 1,196 +10% (26%) 382 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Revenue Mix by Geography Revenue Mix by Market % of Q4 2023 Revenues % of Q4 2023 Reven
Slide 18: Tubes Profitability
Tubes Profitability EBITDA and EBITDA Margin EBITDA per Tonne € Million and % of Revenues € / Tonne 285 651 (13%) 249 554 +17% 21% 19% Q4 2022 Q4 2023 Q4 2022 Q4 2023 Please see “Definitions of Non-GAAP Financial Data” in the Appendix 18
Slide 19: Mine & Forest Performance
Mine & Forest Performance Production Sold Average Iron Ore Market Price1 Million Tonnes $ / Tonne (Quarterly Average) 1.7 129 1.4 +20% 99 +30% Q4 2022 Q4 2023 Q4 2022 Q4 2023 Revenues EBITDA € Million € Million and % of Revenues 101 43 70 +44% +99% 22 43% 31% Q4 2022 Q4 2023 Q4 2022 Q4 2023 Please s
Slide 20: Fourth Quarter 2023 Group Net Income Analysis
Fourth Quarter 2023 Group Net Income Analysis EBITDA to Net Income Bridge Items of Note in Q4 2023 € Million • Financial income (loss) includes a benefit of €40m due to settlement of a longstanding dispute in Brazil with one of the Company’s electricity suppliers 26 • Effective tax rate elevated due
Slide 21: Fourth Quarter 2023 Group Cash Flow Bridge
Fourth Quarter 2023 Group Cash Flow Bridge Largely severance € Million costs in Germany 92 Includes €37m 1 1 43 Mülheim sale 52 22 67 280 275 Includes €40m inflow from settlement in Brazil 226 171 149 193 EBITDA Non-cash Financial Tax Adj. Chg. in Gross Adj. Restruct. Asset Total Non-cash (Increase)
Slide 22: Debt and Liquidity
Debt and Liquidity Debt Liquidity Net Debt (€ Million) € Million 1,130 1,000 1,590 868 1,498 1,539 741 570 1,391 190 181 177 1,203 185 462 462 189 462 312 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 703 462 Gross Debt (€ Million) 1,894 1,724 1,681 1,679 412 938 1,470 894 855 900 552 291 Q3 2022 Q4 2022
Slide 23: Cash Flow Modeling Items for 2024
Cash Flow Modeling Items for 2024 Financial Approximately €100m cash out Tax payments Mid-to-high 20% cash tax rate relative to reported pre-tax income Capital Approximately €200m expenditures Restructuring charges & non- Approximately €200m recurring items Please see “Definitions of Non-GAAP Financ
Slide 24: Outlook & Key Takeaways
5 Outlook & Key Takeaways Philippe Guillemot Chairman & Chief Executive Officer
Slide 25: Strong Performance in 2023
Strong Performance in 2023 Group EBITDA1 Group Free Cash Flow2 € Millions € Millions Tubes Mine & Forest and Holding & Other 600 1,196 498 1,200 500 145 400 300 900 715 200 77 100 600 492 1,051 – (100) 258 344 638 (111) 300 (200) 197 (216) (300) 148 (284) – 61 (400) 2020 2021 2022 2023 2020 2021 202
Slide 26: 2024 Earnings, Cash Flow and Net Debt Outlook
2024 Earnings, Cash Flow and Net Debt Outlook First Half 2024 Full Year 2024 Slight international volume decline due to closure Strong market environment to persist with results of German operations to be offset by improved Tubes international pricing and increased US sales benefiting from strong in
Slide 27: Key Takeaways
Key Takeaways 2023 marked the Group’s best year in nearly 15 years as we executed 1 the New Vallourec plan and substantially deleveraged our balance sheet Durable strength in the premium Tubes market will contribute to 2 another year of robust results in 2024 We are well on track to reach zero net d
Slide 28: Appendices
Appendices Y vallourec
Slide 29: Key Performance Indicators
Key Performance Indicators Quarterly Figures Annual Figures Q4 2023 Q3 2023 Q4 2022 QoQ chg. YoY chg. FY 2023 FY 2022 YoY chg. Volume sold* 382 343 514 11% (26%) 1,552 1,804 (14%) Revenue (€m) 1,196 1,068 1,467 12% (18%) 4,802 4,663 3% Tubes Average Selling Price (€) 3,130 3,115 2,853 0.5% 10% 3,093
Slide 30: Tubes Revenue Breakdown
Tubes Revenue Breakdown Revenue by Region Quarterly Figures Annual Figures QoQ YoY YoY in € million Q4 2023 Q3 2023 Q4 2022 % chg. % chg. FY 2023 FY 2022 % chg. North America 548 460 744 19% (26%) 2,329 2,094 11% South America 230 198 241 16% (5%) 846 855 (1%) Middle East 212 162 111 31% 91% 643 434
Slide 31: Income Statement
Income Statement Quarterly Figures Annual Figures € million, unless noted Q4 2023 Q3 2023 Q4 2022 QoQ chg. YoY chg. FY 2023 FY 2022 YoY chg. Revenues 1,276 1,142 1,541 134 (265) 5,114 4,883 231 Cost of sales (886) (818) (1,126) (68) 240 (3,520) (3,807) 287 Industrial margin 390 324 415 66 (25) 1,594
Slide 32: Balance Sheet
Balance Sheet In € million Assets 31-Dec-23 31-Dec-22 Liabilities 31-Dec-23 31-Dec-22 Equity - Group share 2,157 1,643 Net intangible assets 42 37 Non-controlling interests 67 42 Goodwill 40 40 Total equity 2,224 1,686 Net property, plant and equipment 1,980 1,829 Bank loans and other borrowings (A)
Slide 33: Cash Flow Summary
Cash Flow Summary Quarterly Figures Annual Figures In € million Q4 2023 Q3 2023 Q4 2022 QoQ chg. YoY chg. FY 2023 FY 2022 YoY chg. EBITDA 280 222 312 58 (32) 1,196 715 481 Non-cash items in EBITDA (1) 11 (13) (12) 12 2 (68) 70 Financial cash out (1) (8) (63) 7 62 (88) (110) 22 Tax payments (52) (54)
Slide 34: Financial Indebtedness and Liquidity
Financial Indebtedness and Liquidity Financial Indebtedness In € million 31-Dec-23 31-Dec-22 8.500% Bonds due 2026 1,105 1,135 1.837% PGE due 2027 229 220 (a) ACC ACE 94 282 Other 42 43 Total gross financial indebtedness 1,470 1,681 Cash and cash equivalents 900 552 Total net financial indebtedness
Slide 35: 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 36: 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 37: 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 38: Share Information and Financial Calendar
Share Information and Financial Calendar Share Information Financial Calendar Euronext Paris • May 16th, 2024: Publication of First Quarter ISIN code: FR0013506730 2024 Results Ticker: VK • May 23rd, 2024: Annual General Meeting • July 26th, 2024: Publication of Second Quarter USA: American Deposita