Vallourec Sa · EURONEXT:VK
Vallourec Sa — Q3 2020 Earnings Presentation
23 slides from Vallourec Sa's earnings presentation, Nov 18, 2020
Slide 1: Q3 & 9M 2020 Results Investor Presentation
Q3 & 9M 2020 RESULTS INVESTOR PRESENTATION November 18, 2020 Confidential 1
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER Forward-Looking Statements This presentation may include 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”, “sh
Slide 3: Key Highlights of the Quarter
KEY HIGHLIGHTS OF THE QUARTER 3
Slide 4: Key Highlights
KEY HIGHLIGHTS Q3 results: solid EBITDA generation despite unprecedented Launching structural measures to foster competitiveness drop in O&G market ► Revenue of €716 million, down 32% y-o-y or 22% at constant exchange ► In Europe, adaptation of the production capacity and SG&A streamlining with: rat
Slide 5: Q3 2020 Key Figures
Q3 2020 KEY FIGURES VOLUMES (kt) REVENUE (€m) 1,060 -22% at 595 -46% -32% constant FX 716 319 T3 2019 T3 2020 Q3 2019 Q3 2020 EBITDA (€m) FREE CASH FLOW (€m) 84 -15% 71 35 +35% 26 Q3 2019 Q3 2020 Q3 2019 Q3 2020 Q3 & 9M 2020 Results - Investor presentation 18 November, 2020 5
Slide 6: Q3 2020 Results
¥ vallourec Q3 2020 RESULTS
Slide 7: Q3 2020 Revenue by Market
Q3 2020 REVENUE BY MARKET Oil & Gas Industry and Other -39% QoQ (-31%1) -18% QoQ (+4%1) Q3 2020 revenue ► North America: in million € ► Europe: and as a % of revenue • Lower deliveries due to sharp decrease in • Industry revenue down, reflecting lower rig count, and lower prices volumes and prices ►
Slide 8: Q3 2020 Revenue Bridge and EBITDA
Q3 2020 REVENUE BRIDGE AND EBITDA Q3 2019 – Q3 2020 REVENUE BRIDGE (€m) ► Revenue decrease by 32% YoY • Volume impact of -46% mainly driven by Oil & Gas in North 1,060 (492) America and EA-MEA (114) 716 262 • Positive price/mix effect of +25% reflecting a better price/mix in Oil & Gas in EA-MEA and
Slide 9: Q3 2020 EBITDA to Net Income
Q3 2020 EBITDA TO NET INCOME In € million Q3 2020 Q3 2019 Change EBITDA 71 84 -€13m (as a % of revenue) 9.9% 7.9% +2.0p.p. ► Operating result positive at €7m compared Depreciation of industrial assets (47) (57) -17.5% with €10m in Q3 2019 Amortization and other depreciation (10) (15) na • Lower EBIT
Slide 10: Working Capital Requirement
WORKING CAPITAL REQUIREMENT QUARTERLY NET WORKING CAPITAL REQUIREMENT IN DAYS1 Number of days 154 149 148 141 133 135 Annual 133 124 115 121 117 119 115 120 Quarterly 114 114 111 114 112 113 108 105 106 Average 95 94 84 Period Q3.15 Q4.15 Q3.15 Q4.15 Q1.16 Q1.16 Q2.16 Q2.16 Q3.16 Q3.16 Q4.16 Q4.16 Q
Slide 11: Q3 2020 Free Cash Flow
Q3 2020 FREE CASH FLOW ► Free Cash Flow generation in Q3 2020 of €35m versus €26m in Q3 2019 1► Cash flow from operating activities decline reflecting mainly the lower EBITDA In € million Q3 2020 Q3 2019 Change as well as higher restructuring cash-out 1 Cash flow from operating activities (A) (32) (
Slide 12: Net Debt and Liquidity
NET DEBT AND LIQUIDITY 2019 – Q3 2020 NET DEBT BRIDGE €m Net Debt ► Net financial debt as at Net Debt as at as at September 30th 2020: Dec 31st 2019 Sept 30th 2020 €2,329m • Asset disposals & other items for (€75)m, as a result mainly of negative currency effects on net debt as well as the repayment
Slide 13: 2020: Outlook Confirmed
¥ vallourec 2020: OUTLOOK CONFIRMED
Slide 14: Outlook for 2020 Confirmed
OUTLOOK FOR 2020 CONFIRMED NORTH AMERICA EUROPE-AFRICA & MIDDLE EAST- ASIA ► Shale operators: after the sharp drop in drilling activity (rig ► O&G: delayed projects mainly from IOCs and NOCs are offset count down 75% since December 19), rig count has in 2020 by the positive effect of the backlog of
Slide 15: Launching Structural Measures to Foster Competitiveness
LAUNCHING STRUCTURAL MEASURES TO FOSTER COMPETITIVENESS 15
Slide 16: Structural Measures to Foster Competitiveness
STRUCTURAL MEASURES TO FOSTER COMPETITIVENESS EUROPE BRAZIL ► Adaptation of European footprint and streamlining of ► Comprehensive action plan will result in: SG&A • In France, a reduction of c.350 positions including • Structural reduction of c.500 positions in closure of Deville heat treatment fac
Slide 17: Appendices
ss vallourec APPENDICES
Slide 18: 9M 2020 P&L
9M 2020 P&L In € million 9 Months 2020 9 Months 2019 Change Revenue (k tons) 2,412 3,169 -23.9% Cost of sales (1,961) (2,611) -24.9% Industrial Margin 451 558 -19.2% (as a % of revenue) 18.7% 17.6% +1.1p.p. Sales, general and administrative costs (250) (291) -14.1% (as a % of revenue), Group share -
Slide 19: Q3 2020 Revenue Bridges
Q3 2020 REVENUE BRIDGES Q3 2019 – ’20 REVENUE BRIDGE PER MARKET 1,060 (261) (51) (45) 13 716 Q3 '19 Oil & Gas Petrochemicals Industry & Other Power Generation Q3 '20 Q3 2019 – ’20 REVENUE BRIDGE BY GEOGRAPHY 1,060 (214) 30 (5) (137) (17) 716 Q3 '19 North America South America Europe Asia & Middle Re
Slide 20: Revenue Breakdown – Q3 2020
REVENUE BREAKDOWN – Q3 2020 REVENUE BY REGION As % of As % of In € million Q3 2020 Q3 2019 Change revenue revenue Europe 141 19.7% 146 13.8% -3.4% North America (Nafta) 99 13.8% 313 29.5% -68.4% South America 209 29.2% 179 16.9% 16.8% Asia and Middle East 197 27.5% 334 31.5% -41.0% Rest of the world
Slide 21: Balance Sheet as at September 30, 2020
BALANCE SHEET AS AT SEPTEMBER 30, 2020 In € million Assets 9/30/2020 12/31/2019 Liabilities 9/30/2020 12/31/2019 Equity - Group share * 378 1,467 Non-controlling interests 354 513 Net intangible assets 53 63 Total equity 732 1,980 Goodwill 24 364 Shareholder loan 8 21 Net property, plant and equipme
Slide 22: Gross Indebtedness
GROSS INDEBTEDNESS In € million 9/30/2020 Private placement – maturing in August 2027 54 Bond issue – maturing in September 2024 499 Non-convertible bond issue – maturing in October 2022 546 Convertible bond issue – maturing in October 2022 237 Bond issue – maturing in October 2023 397 RCF drawings
Slide 23: Investor Relations Contact - Vallourec Group
► Euronext Paris: ISIN code: FR0013506730, Ticker: VK USA: American Depositary Receipt (ADR) - ISIN code: US92023R2094, Ticker: VLOWY ► Investor Relations Contact - Vallourec Group • Email: investor.relations@vallourec.com • www.vallourec.com 23