Tubacex, S.a. · BME:TUB
Tubacex — Investor Presentation (September 2010)
35 slides from Tubacex's investor presentation, September 2010
Slide 1: Tubacex Corporate Presentation September 2010
TUBACEX Corporate presentation September 2010
Slide 2: Table of contents
Table of contents Introduction Strategy Operating environment
Slide 3: Introduction
Introduction
Slide 4: Sector: main characteristics (I)
Sector: main characteristics (I) Strong growth • Average growth of demand: 6-12% in the past five years. • Stainless steel has a longer life than other materials and it does not require maintenance. • Significant substitution effect when stainless steel prices go down. • Global growth requires safer
Slide 5: Sector: main characteristics (II)
Sector: main characteristics (II) Linked to oil, gas and 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 Seamless Oil and gas extraction tube Pe
Slide 6: Sector: main characteristics (III)
Sector: main characteristics (III) …where Tubacex sells 80% of its products… • Onshore • Plants PETROCHEMICAL CHEMICAL AND OIL • Offshore • Organic • Refining • Plastics • Rubber • Fiber • Thermal • Onshore POWER GEN GAS • Combined cycles • Offshore • Cogeneration • Nuclear • Renewables …with a 20%
Slide 7: Sector: main characteristics (IV)
Sector: main characteristics (IV) New competitors • “Commodity” and non-certified products. • Market share not relevant. • Learning curve. Traditional competitors • Specialization in higher value-added products. Global market • Allowing synergies among the different geographic areas.
Slide 8: Breakdown of revenues
Breakdown of revenues Revenues breakdown 2009 by end- Revenues 2009 by geographical area user sector(1) Fertilizing 3% Rest of the Water Rest of Asia Nuclear World E&P Oil 1% 5% 13% 4% 7% Middle East 4% Petrochemical 10% Refining Power 50% Europe USA + Canada Generation 59% 20% 10% Gas 14% (1) Reven
Slide 9: Tubacex Group: structure
Tubacex Group: structure Raw materials: Nickel FINAL MARKET Stainless scrap Molybdenum Round bars and square Ferrochrome billets Others Commercial offices Hot extrusion Fittings Tube Master distributor Cold rolling and stretching Tube Group stocks
Slide 10: Key milestones
Key milestones 1963 1975 1992 1999 2008 • An international TUBACEX, S.A. = Acquisitions: New 2008-2012 Company foundation commercial network holding Schoeller Bleckmann Strategic Plan in Llodio (Spain) is created Edelstahlrohr GmbH T.T.I., S.A.= and ALTX Inc • The steel mill manufacturing (ACERÁLAVA
Slide 11: Strategy
Strategy
Slide 12: Tubacex: we know where we want to be
Tubacex : we know where we want to be Energy demand will have increased by 45% in 2030 6.000 5.000 4.000 3.000 2.000 1.000 0 1980 2000 2006 2015 2030 Oil Coal Gas Nuclear Hydro Biomass Other renewables Source: IEA. • Despite the current uncertain scenario, investments in energy are a must. • The amo
Slide 13: Where does Tubacex want to be?
Where does Tubacex want to be? HIGHER VALUE-ADDED PRODUCTS •OIL&GAS •POWER GENERATION •NUCLEAR ENERGY
Slide 14: Oil: exploration and extraction are increasingly complex
Oil: exploration and extraction are increasingly complex Number of floating platforms by year of start of construction 80 76 70 60 44 50 39 40 31 10 30 26 26 30 2 21 21 20 5 16 3 18 17 22 13 11 9 8 5 3 21 10 2 2 23 29 10 10 1 21 1 3 4 14 13 16 15 11 11 10 8 5 8 10 6 0 2 2 1998 1999 2000 2001 2002 20
Slide 15: OCTG tube: extraction under critical circumstances
OCTG tube: extraction under critical circumstances
Slide 16: Umbilicals: assistance in critical conditions of extraction
Umbilicals: assistance in critical conditions of extraction
Slide 17: Where does Tubacex want to be?
Where does Tubacex want to be? HIGHER VALUE-ADDED PRODUCTS •OIL&GAS •POWER GENERATION •NUCLEAR ENERGY
Slide 18: Coal plants as a primary source of energy still growing strongly
Coal plants as a primary source of energy still growing strongly Coal plants: global annual new capacity Energy global demand (GW) (GW) 18 16.000 16 14.000 14 12.000 12 10.000 11.172 10 8.000 9.187 8.377 8 6.000 7.444 6 4.000 4 2.000 3.237 3.921 2.448 2.961 2 0 0 2004 2010 2015 2030 1951 1953 1955 1
Slide 19: …with materials that meet higher pressures and temperatures
…with materials that meet higher pressures and temperatures Boilers in coal plants: composition and resistance Sub-critical Supercritical Ultrasupercritical Austenitic Austenitic Nickel base 9% 20% 16% Austenitic Ferritic 24% 60% Ferritic Ferritic 91% 80% 250 bars 280 bars 360 bars 550 ºC 610 ºC 710
Slide 20: Where does Tubacex want to be?
Where does Tubacex want to be? HIGHER VALUE-ADDED PRODUCTS •OIL&GAS •POWER GENERATION •NUCLEAR ENERGY
Slide 21: Nuclear energy: the alternative in the medium/long term
Nuclear energy: the alternative in the medium/long term Costs per source of energy: evolution Costs breakdown (dollars per btu) 12 12% 10 32% 50% 8 6 76% 41% 16% 4 2 27% 34% 12% 0 Natural gas Coal Nuclear 98 98 99 99 00 00 01 02 02 03 03 04 05 05 06 19 19 19 19 20 20 20 20 20 20 20 20 20 20 20 Overh
Slide 22: Nuclear energy: potential for Tubacex
Nuclear energy: potential for Tubacex New nuclear capacity and extension of the useful life of the current installed base 344 635 650 600 550 500 450 400 372 267 350 186 300 250 200 150 100 50 0 Installed GW 2006 End of useful life Revamping (current New plants GW 2030 (current base) base) Source: A
Slide 23: Strategic alliance with Vallourec & Mannesmann (II)
Strategic alliance with Vallourec & Mannesmann (II) Commercial Oil & Gas Technical Powergen R+D Enhancement of goals Complementary sought in Strategic products Plan Wider range
Slide 24: Enhancing exposure to the fastest growing markets (I)
Enhancing exposure to the fastest growing markets (I) Opening in 2008 Op eni ng in 2 007 Co m m Ph erc ys ial ica of l s fic Group commercial offices to e o ck p si ene Group stocks nc d e 20 in 2 09 00 Partners´ stocks . 6. Agent / Representative
Slide 25: Enhancing exposure to the fastest growing markets (II)
Enhancing exposure to the fastest growing markets (II) Water depth of selected Brazilian offshore projects (km) 1.200 1.000 800 600 400 200 0 Tupi Roncador Marlim Jubarte Papa Marlim Leste Terra Sul • Brazil is going to have the highest expected growth rate in oil extraction capacity in the coming y
Slide 26: Tubacex Innovation
Tubacex Innovation INDUSTRIAL STRUCTURE COMMERCIAL STRUCTURE SPAIN AUSTRIA USA. Steel mill Hot Cold Quality Hot Cold Umbilic. Quality Cold Quality Project leaders Customer Service R+ D TRANSVERSALITY Independent External company technological centers Strategic alliances Institutional side with third
Slide 27: Operating environment
Operating environment
Slide 28: Commercial situation
Commercial situation • Order intake in 1H09 was the lowest in fifteen years. • Still difficult commercial environment: pricing and mix. • Distribution: • Volumes increasing in 2010, especially in Europe. • Projects: • Clear improvement since late 2009 but still high number of open enquiries. • Stron
Slide 29: Competitiveness improvement (I)
Competitiveness improvement (I) • Management skills in turnaround stories. • Traditional portfolio consolidation: clients, products and services. • Capacity adjustments: • Reuction in the number of shifts • Temporal labour adjustment plan: from April 09 to June 10. • Operating costs reduction: • Ove
Slide 30: Competitiveness improvement (II)
Competitiveness improvement (II) • Balance sheet management: • Measures implemented to reduce working capital • Net debt decrease Dec/08 – Dec/09: € 62 Mill. • Strengthening financial position • Cash-flow is the priority • Focus on operating efficiency : • Being the most competitive player in high v
Slide 31: Annexes
Annexes i
Slide 32: Financial performance
Financial performance Sales (€ Mill.) EBITDA (€ Mill) 120 106,2 800 697,2 671,8 100 700 539,1 80 72,4 600 64,0 500 430,5 60 52,7 371,5 42,9 400 347,5 40 258,9 23,1 300 20 200 0 100 2003 2004 2005 2006 2007 2008 2009 0 -20 -18,4 2003 2004 2005 2006 2007 2008 2009 -40 EBIT (€ Mill.) Net income (€ Mill
Slide 33: 2Q10 results
2Q10 results Positive EBITDA after four quarters of negative figures. Difficult but improving environment. 1H10 1H09 % Sales 173.1 239.3 -27.7 EBITDA 0.54 3.24 -83.4 EBIT -9.07 -6.40 n.a. Net income -8.89 -9.68 n.a. EBITDA Margin (%) 0.3 1.4 n.a.: no aplica Source: Tubacex Figures in million euros a
Slide 34: Raw materials: impact on profitability and cash-flow
Raw materials: impact on profitability and cash-flow 1 Invoicing methods • Fixed price: hedging. No impact. • Variable price: very limited impact due to the use of the alloy surcharge mechanism. 2 Inventory write-downs • Very limited impact on Tubacex due to manufacturing against an order and the hi
Slide 35: Shareholding structure
Shareholding structure Bagoeta 18,1% Caja Navarra 8,8% Atalaya Inversiones Free float 57,7% 5,0% Cartera Autocartera BT Pension Industrial 2,4% Schema REA Trustees 5,0% Limited 3,0%