Tenaris S.a. · MIL:TEN
Tenaris — Investor Presentation (January 2007)
20 slides from Tenaris's investor presentation, January 2007
Slide 1: Investor Presentation January 2007
Investor Presentation January 2007
Slide 2: Disclaimer
Disclaimer This presentation contains “forward-looking statements.” Forward-looking statements are based on management’s current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by th
Slide 3: A key player in the global energy industry
A key player in the global energy industry • Leading global manufacturer of tubular products and services used in the drilling and production of oil Seamless pipe sales volume by segment (2005) and gas, for process and power plant and specialized industrial and Industrial and automotive automotive a
Slide 4: Demand for OCTG depends on oil and gas drilling activity
Demand for OCTG depends on oil and gas drilling activity • Sustained growth in global demand for oil and gas • Supply constraints led by accelerating depletion of mature fields, lack of discoveries of substantial new reserves and increasingly restricted access of the majors to probable and possible
Slide 5: Rising reserve depletion leads to higher OCTG consumption
Rising reserve depletion leads to higher OCTG consumption USA onshore – all basins Oil Gas 200 200 180 180 160 160 140 140 120 120 100 100 80 80 60 60 2000 2001 2002 2003 2004 2005 2000 2001 2002 2003 2004 2005 Wells SMLS + WLD OC TG C onsumption Production, Mbpd Wells SMLS + WLD OC TG C onsumption
Slide 6: Reserve development to be in complex operating environments
Reserve development to be in complex operating environments Production trend towards non-conventional sources 2003 Oil & Gas production 2010 Oil & Gas production Acid Sour 0% LNG Tight Gas Arctic 6% Tight Gas Acid Sour 3% 4% 0% 3% Deepwater LNG 3% 10% Heavy oil 7% Arctic 6% Deepwater 14% Conventiona
Slide 7: Well complexity drives demand for premium products
Well complexity drives demand for premium products Land Land Offsh. Shallow Water Offshore Deep Water Shallow Well Directional Deep Well Directional Deep Well Deep Well 30” 50 m 9 5/8” 300 m 20” 800 m 18 5/8” 850 m 13 5/8” 1800 m 13 5/8” 1550 m 5 1/2” 1800 m 13 3/8” 3500 m 3200 m 9 5/8” 9 5/8” 3200
Slide 8: Rig count evolution
Rig count evolution Rig count 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Dec-99 Jun-00 Dec-00 Jun-01 Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 International USA Canada Source: Baker Hughes Investor Presentation Tenaris January 2007 8
Slide 9: Expansion and consolidation
Expansion and consolidation 1950s Siderca and Tamsa founded to serve their local markets 1993 Siderca and Tamsa form alliance 1996 Dalmine joins the alliance 1998-2000 Building the global system 2002 Consolidation as Tenaris 2004 Expansion in Eastern Europe 2006 Expansion in North America Investor P
Slide 10: To form unique global footprint
To form unique global footprint Investor Presentation Tenaris January 2007 10
Slide 11: With an integrated business model
With an integrated business model • Focus on sales of high value products direct to end-user customer base • Global industrial system producing comprehensive range of products to a single quality standard • Global R&D network • Global supply chain management integrating tubular supply chain from the
Slide 12: Serving the entire industry
Serving the entire industry OCTG customers Our main customers include: 9M 2006 IOC s • Aramco 21% • Chevron • ConocoPhillips • ENI-AGIP NOC s • PDVSA 47% • Pemex • Petrobras INDs • Repsol-YPF 32% • Schlumberger • Shell • Total Investor Presentation Tenaris January 2007 12
Slide 13: With leading market position reflected in operating results
With leading market position reflected in operating results Millions of US$ 2003 2004 2005 9M 2006 Net Sales 3,180 4,136 6,736 5,668 Seamless 2,376 3,273 5,124 4,657 Welded 351 348 845 363 Energy 333 418 526 404 1 Others 120 97 241 244 EBITDA 602 899 2,163 2,156 3 2 2 EBITDA margin 19% 22% 32% 38% N
Slide 14: Consolidating market position and investing for growth
Consolidating market position and investing for growth R&D expenditures Mill. of US$ • US$350 million investment program to 40 increase high-end seamless capacity 30 20 • Customer take-up of TenarisBlue® connections increasing 10 0 • Premium threading facility in Qingdao to 2003 2004 2005 2006 H1 co
Slide 15: Acquisition of Maverick
Acquisition of Maverick Complementary market position • Gain substantial access to United States and leading position in North American market commensurate with our global position • Product offering in North America will cover a wide range of applications from onshore shallow wells to complex deepw
Slide 16: Rising reserve depletion in USA and Canada reflected in drilling activity
Rising reserve depletion in USA and Canada reflected in drilling activity But oil and gas production is declining Mill. Tonnes oil Rig count equivalent 2,200 1,200 4 2,000 1,100 40 384 1,800 1,000 50 338 900 1,600 46 52 800 1,400 264 67 45 309 700 1,200 258 61 52 37 311 600 67 1,000 574 34 208 500 3
Slide 17: OCTG market in USA & Canada
OCTG market in USA & Canada Market share 2006 Jan-Aug Mill. of tons % Others 6.0 50% 21% 45% Ipsco + NS 5.0 20% 40% 35% 4.0 2.6 30% 2.3 3.0 25% China 13% Tenaris + 2.1 20% Maverick 2.0 19% 15% 2.5 10% 1.0 2.0 Lone Star 1.5 5% 9% US Steel V&M 9% 0.0 0% 9% 2003 2004 2005 Seamless Welded Imports (RHS)
Slide 18: Good share liquidity
Good share liquidity Average daily trading Free float shares by market Millions of US$ December 2006 240 Buenos 200 Aires 17% New York 160 49% 120 80 40 0 2003 2004 2005 2006 Milan Mexico 33% 2% New York Milan Buenos Aires Mexico Investor Presentation Tenaris January 2007 18
Slide 19: Summary
Summary • A leading global player in the oilfield services and equipment sector • Well positioned to benefit from increased drilling activity and well complexity • Successful business model and leading market position in sector with high barriers to entry • Strong financial performance with solid gr
Slide 20: Investor Presentation Tenaris January 2007
Investor Presentation Tenaris January 2007 20