Vallourec Sa · EURONEXT:VK
Vallourec Sa — Q3 2024 Earnings Presentation
34 slides from Vallourec Sa's earnings presentation, Nov 15, 2024
Slide 1: Q3 2024 Results
Q3 2024 Results November 15, 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 Q3 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 8 3 Q3 2024 Results Review Sascha Bibert, Chief Financial Officer 13 4 Outlook &
Slide 4: Q3 2024 Highlights
1 Q3 2024 Highlights Philippe Guillemot Chairman of the Board & Chief Executive Officer
Slide 5: Q3 2024 Highlights
Q3 2024 Highlights Results & Outlook Strong cash generation to be allocated predominantly to shareholder returns • Third quarter 2024 margins benefitted from healthy international OCTG market, offset by softer US market in Q3 • Group EBITDA of €168m with strong EBITDA margin of 19% despite lower rea
Slide 6: Extending Our Premium Product Capabilities
Extending Our Premium Product Capabilities Enhancing Vallourec’s offshore line pipe offering Meaningful impact from coating solutions • Improved deepwater market position Tubes Average Selling Price (ASP) and EBITDA margin • Thermotite do Brasil (TdB) will add thermal insulation capabilities for Pro
Slide 7: Closing the Margin and Return Gap Versus Peers
Closing the Margin and Return Gap Versus Peers Progress since New Vallourec plan announcement in May 2022 Strong progress on margin gap; cost now a focus Competitive ROIC, but opportunities remain Trailing 12 Month Tubes EBITDA per Tonne (Peer vs. Vallourec, $) Trailing 12 Month Return on Invested C
Slide 8: Market & Commercial Environment
2 Market & Commercial Environment Philippe Guillemot Chairman of the Board & Chief Executive Officer
Slide 9: US OCTG Market: Showing Signs of Improvement
US OCTG Market: Showing Signs of Improvement Rig count stable through Q3 Imports declined since January Spot price increasing recently US Horizontal Rig Count Monthly OCTG Imports Seamless OCTG Price ($ / Tonne) Oil Gas All Others Major Welded Importers 2,992 800 350 2,567 2,514 700 300 2,263 600 2,
Slide 10: International OCTG Market: Continued Robust Demand and Pricing
International OCTG Market: Continued Robust Demand and Pricing Onshore and offshore drilling activity broadly flat International market pricing remains healthy Onshore Rig Count Offshore Rig Count Seamless OCTG Price ($ / Tonne) Onshore (L Axis) Offshore (R Axis) Middle East North Sea 800 600 3,000
Slide 11: Tubes Overview: Value over Volume Driving Resilient Profitability
Tubes Overview: Value over Volume Driving Resilient Profitability Tubes profitability remains at healthy levels Market remains healthy, initiatives on track Tubes EBITDA / Tonne (€) • International OCTG market remains strong 832 • Meaningful contracts secured for offshore fields in Q3: 751 – TotalEn
Slide 12: Mine & Forest Overview: Managing a Volatile Global Market
Mine & Forest Overview: Managing a Volatile Global Market Volumes limited by slow export market Overall market volatile; Phase 1 extension on track Iron Ore Production Sold (Million Tonnes) • Weak export market conditions weighing on near- 1.9 term results 1.8 1.7 • Low iron ore prices and weak dema
Slide 13: Q3 2024 Results Review
3 Q3 2024 Results Review Sascha Bibert Chief Financial Officer
Slide 14: Key Group Figures
Key Group Figures Revenues EBITDA € Million € Million 1,142 222 (22%) 894 (24%) 168 Q3 2023 Q3 2024 Q3 2023 Q3 2024 Adjusted Free Cash Flow Net Debt € Million € Million 217 364 183 (16%) (€124m) 240 Q3 2023 Q3 2024 Q2 2024 Q3 2024 Please see “Definitions of Non-GAAP Financial Data” in the Appendix 1
Slide 15: Tubes Production and Revenue Details
Tubes Production and Revenue Details Volume Sold Average Selling Price Revenues Thousand Tonnes € / Tonne € Million 382 3,115 3,130 3,189 1,196 343 351 2,937 2,888 1,068 1,030 292 292 932 842 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q3 2023 Q4 2023 Q1 2024 Q2 2
Slide 16: Tubes Profitability
Tubes Profitability EBITDA and EBITDA Margin EBITDA per Tonne € Million and % of Revenues € / Tonne 193 563 556 (16%) (1%) 162 19% 18% Q3 2023 Q3 2024 Q3 2023 Q3 2024 Please see “Definitions of Non-GAAP Financial Data” in the Appendix 16
Slide 17: Mine & Forest Performance
Mine & Forest Performance Production Sold Average Iron Ore Market Price1 Million Tonnes $ / Tonne (Quarterly Average) 1.8 114 99 (13%) (26%) 1.3 Q3 2023 Q3 2024 Q3 2023 Q3 2024 Revenues EBITDA € Million € Million and % of Revenues 88 39 (25%) 66 (€17)m 22 44% 33% Q3 2023 Q3 2024 Q3 2023 Q3 2024 Plea
Slide 18: Group Net Income Analysis
Group Net Income Analysis Net Income, Group Share (Q3 2024) Net Income Evolution € Million Net Income, Group Share (€ Million) 157 159 105 105 111 78 76 73 54 6 19 (35) 5 168 28 73 EBITDA D&A Financial Other Income tax Net (415) income income, (loss) Group Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 share 2022
Slide 19: Third Quarter 2024 Group Cash Flow Bridge
Third Quarter 2024 Group Cash Flow Bridge € Million 36 102 14 17 73 20 6 19 183 168 130 124 117 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
Slide 20: Debt and Liquidity
Debt and Liquidity Debt Liquidity Net Debt (€ Million) € Million 1,493 1,714 1,130 1,590 1,561 1,000 1,498 1,539 186 1,498 868 741 1,391 190 570 485 177 197 364 181 228 240 1,203 185 462 462 462 189 462 550 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 312 550 2022 2022 2023 2023 2023 2023 2024 2024 2024 703 462 Gross
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 Fourth Quarter 2024 Full Year 2024 Sequential volume increase driven by higher Strong international market environment to Tubes deliveries for both US and International markets persist, offset by lower US demand and pricing Production sold to be slightly
Slide 23: Key Takeaways
Key Takeaways We remain focused on improving our profitability and ROCE versus our 1 peers, regardless of market conditions The international OCTG market remains robust while the previously- 2 weak US market has improved Vallourec plans to announce a dividend proposal for its 2025 AGM with 3 its Ful
Slide 24: Appendices
Appendices Y vallourec
Slide 25: Key Performance Indicators
Key Performance Indicators Quarterly Figures Year-to-Date Figures Q3 2024 Q2 2024 Q3 2023 QoQ chg. YoY chg. 9M 2024 9M 2023 YoY chg. Volume sold 292 351 343 (17%) (15%) 935 1,170 (20%) Revenue (€m) 842 1,030 1,068 (18%) (21%) 2,805 3,605 (22%) Tubes Average Selling Price (€) 2,888 2,937 3,115 (2%) (
Slide 26: Tubes Revenue Breakdown
Tubes Revenue Breakdown Revenue by Region Quarterly Figures Year-to-Date Figures QoQ YoY YoY in € million Q3 2024 Q2 2024 Q3 2023 % chg. % chg. 9M 2024 9M 2023 % chg. North America 331 383 460 (14%) (28%) 1,164 1,781 (35%) South America 136 169 198 (19%) (31%) 458 616 (26%) Middle East 143 247 162 (
Slide 27: Income Statement
Income Statement Quarterly Figures Year-to-Date Figures € million, unless noted Q3 2024 Q2 2024 Q3 2023 QoQ chg. YoY chg. 9M 2024 9M 2023 YoY chg. Revenues 894 1,085 1,142 (190) (248) 2,969 3,838 (868) Cost of sales (633) (774) (818) 141 185 (2,076) (2,634) 558 Industrial margin 262 311 324 (49) (62
Slide 28: Balance Sheet
Balance Sheet In € million Assets 30-Sep-24 31-Dec-23 Liabilities 30-Sep-24 31-Dec-23 Equity - Group share 2,303 2,157 Net intangible assets 34 42 Non-controlling interests 78 67 Goodwill 36 40 Total equity 2,381 2,224 Net property, plant and equipment 1,809 1,980 Bank loans and other borrowings 736
Slide 29: Cash Flow Summary
Cash Flow Summary Quarterly Figures Year-to-Date Figures In € million Q3 2024 Q2 2024 Q3 2023 QoQ chg. YoY chg. 9M 2024 9M 2023 YoY chg. EBITDA 168 215 222 (46) (54) 618 916 (298) Non-cash items in EBITDA (14) (0) 11 (14) (25) (4) 3 (7) Financial cash out (17) (65) (8) 48 (9) (77) (87) 10 Tax paymen
Slide 30: Financial Indebtedness and Liquidity
Financial Indebtedness and Liquidity Financial Indebtedness In € million 30-Sep-24 31-Dec-23 8.500% 5-year EUR Senior Notes due 2026 – 1,105 7.500% 8-year USD Senior Notes due 2032 714 – 1.837% PGE due 2027 (a) 194 229 ACC ACE (b) 63 94 Other 46 42 Total gross financial indebtedness 1,017 1,470 Cash
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 • February 27th, 2025: Publication of Fourth ISIN code: FR0013506730 Quarter and Full-Year 2024 Results Ticker: VK • May 15th, 2025: Publication of First Quarter 2025 Results USA: American Depositary Receipt