Tubacex, S.A. · BME:TUB
Tubacex — Investor Presentation (June 2017)
33 slides from Tubacex's investor presentation, June 2017
Slide 1: Analyst Presentation
GROUP Analyst Presentation 2017
Slide 2: Index
Index 1. TUBACEX GROUP 2. RECENT EVOLUTION 3. 2017 OUTLOOK & QUARTERLY RESULT 4. STRATEGIC PLAN 2016 - 2020
Slide 3: Tubacex Group
1 TUBACEX GROUP PROPUESTA DE ACUERDOS
Slide 4: A fully integrated supplier
TUBACEX Group A fully integrated supplier Pipes & tubes Commercial Steel billets & bars Extrusion Cold finishing fittings Master network distribution TUBACEX is the largest Seamless Stainless Steel Manufacturer.. Analyst Presentation 2017 4
Slide 5: Geographical Presence
TUBACEX Group Geographical Presence KEY FACTS Sales > 500 million euros 11 mills in Spain, USA, Austria, Italy and India. Investment of €160 million in the last 5 years Commercial presence in over 14 countries More than 300 customers in over 100 countries. 2300 professionals Worldwide
Slide 6: Business Strategy: Market Growth
TUBACEX Group Business Strategy Traditional Products Higher Added Value Products + Off- shore Umbilicals Market Growth SC OCTG Boilers Urea Precision High Alloys Furnaces Std Heat Downstream Exchangers linepipe Nuclear Std Bar Boilers - - Profitability + Focus on customer service and delivery Contin
Slide 7: Other key matters
TUBACEX Group Other key matters Relationship with Investors Shareholder Structure Stable core of shareholders committed to the long-term project JM Aristrain 11,0% Cartera Industrial Rea Only change in significant 7,0% shareholders: aZValor became Ecofin 4,9% significant shareholder in March 2017 It
Slide 8: Recent Evolution
2 RECENT EVOLUTION
Slide 9: Business Strategy
Recent Evolution Business Strategy Focus on added value Premium products Product breakdown Premium products Premium Value chain New products Standard Margin 70% 70% 60% 60% 56% 2016 56% 50% 50% 53% 50% 40% 2015 50% 2013 2014 52% 2012 28% 29% 20% D C B A 50% 2012 2013 Type of product 2014 2015 (Value
Slide 10: Innovation Strategy
Recent Evolution Innovation Strategy Strategy focused on client to increase global efficiency of his projects and processes Transforming the most demanding needs into customized solutions of high technological value developed in co-creation with customers Support of EIB through a loan to finance
Slide 11: Main figures evolution
Recent Evolution Main figures evolution Revenues (€M)* EBITDA (€M) EBIT (€M) +15% +40% +65% 612 64 575 51 49 44 554 557 46 11,7% 35 32 532 9,3% 27 8,0% 5,7% 5,7% 16 9,2% 2 0,5% 7,1% 5,0% 2,9% 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 * Revenues figure assuming nickel
Slide 12: Financial strategy
Recent Evolution Financial strategy NFD / EBITDA Cash flow before acquisitions Gross Cash flow 165M€ generated in 4 years 367M€ generated in 4 years 5,7x 5,9x 68 129 4,5x 96 3,8x 47 80 2,4x 37 62 14 16 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 -25 Debt maturities sch
Slide 13: Revenues Breakdown by Geography
Recent Evolution Renues Breakdown by Geography 69% 57% 35% 20% 7% 8% 1% 3% USA & Canada Europe Asia Rest of World Geographical distribution of sales Final destination for Project market Asia remains the biggest market for the Group Analyst Presentation 2017 13
Slide 14: Tubacex Action Plan
Recent Evolution Tubacex Action Plan Market environment TUBACEX Raw Materials: continuing low prices Diversification: of sectors, products and markets. Oil&Gas Sector: investment cuts and delays in the implementation of projects. Cost Control: Adjustment plan in all expenditure items World
Slide 15: Growing in the complete Value Chain
Recent Evolution Key issues for the 2016 FY Providing the best solution by… New Products New Tecnologies New services • Co-development with customers • Lean manufacturing • Additional treatments and • New grades and materials practices finishes • Offer of new dimensions and • New production proces
Slide 16: Key Aspects
Recent Evolution Key Aspects Concentration on cash generation and defending the Balance Sheet Continuation of the projects launched in 2015 Focus on the plan to reduce overheads Growth from the increased market share in strategic products and markets and entry into new sectors other than Oil
Slide 17: Main financials
Recent Evolution Main financials Mill.€ 2014 2015 2016 % Var. 16 vs. 15 Revenues 546.7 533.4 494.0 -7.4% EBITDA 64.1 48.9 34.9 -28.6% EBITDA margin 11.7% 9.2% 7.1% EBIT 43.7 15.6 2.5 -84.1% EBIT margin 8.% 2.9% 0.5% Net Profit 23.8 8.4 0.5 n.s. Net margin 4.4% 1.6% 0.1% Net working capital 202.4 210
Slide 18: 2017 Outlook & Quarterly Results
3 2017 OUTLOOK & QUARTERLY RESULTS
Slide 19: Oil Sector
2017 Outlook & Quarterly Results Oil Sector Two consecutive years of reduced investment for the first time in 30 years, can have a dramatic impact on the decline rate of mature assets, thus the global upstream investment is expected to increase in 2017 664.767 Upstream Europa Rusia + FSU Capex 492
Slide 20: Oil Sector: Subsea market
2017 Outlook & Quarterly Results Oil Sector The subsea market has undergone the most significant downturn in recent history After the bottom in 2016, a gradual recovery is expected to start from 2017 onwards 50000 600 Subsea 500 Global Trees 400 Subsea Orders Capex 25000 300 (#) ($Bn) 200 100 0
Slide 21: What we learned from 2016
2017 Outlook & Quarterly Results What we learned from 2016 It will take some years to return to the level of new projects launched in 2013-2014 Only projects that are sustainable at barrel prices of 50-60 USD will be approved Capex level required for similar projects before the crisis will be
Slide 22: Our Response
2017 Outlook & Quarterly Results Our Response We must be proactive, offering the market: Co-design in the prior phase to optimize costs Standardization in the design of plants Multi-year framework contracts offering “just in time” services and better prices Elimination of “non-value” in th
Slide 23: Opportunities
2017 Outlook & Quarterly Results Opportunities 1 GREATER COMMERCIAL SUCCESS 2 FOCUS ON COST REDUCTION • Open new customers, KAT’s… • Reduce personnel cost • Boost projects launched on cost • OCTG in Middle East for Gas reduction • Boost new products • Boost projects on productive • Opening up new ma
Slide 24: Revenues and EBITDA evolution
2017 Outlook & Quarterly Results Revenues and EBITDA evolution Revenues 200 160 140 147 143 140 150 136 128 131 123 119 121 112 105 100 50 0 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 EBITDA 20 18,3 17,5 25% 16,5 16,2 15,1 20% 15 14,1 13,0
Slide 25: Revenues and Adjusted Revenues Comparison
2017 Outlook & Quarterly Results Revenues and Adjusted Revenues Comparison Revenues 200 160 140 147 143 140 150 136 128 131 123 119 121 112 105 100 50 0 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Adjusted Revenues* 200 164 180 159 146 147
Slide 26: Main financials
2017 Outlook & Quarterly Results Main financials Mill.€ Q1 2016 Q1 2017 % Var. 17 vs. 16 Revenues 121.4 131.3 +8.2% EBITDA 7.8 13.0 +67.9% EBITDA margin 6.4% 9.9% EBIT -0.6 4.6 n.s. EBIT margin neg. 3.5% Net Profit -0.5 2.8 n.s. Net margin neg. 2.1% FY 2016 Q1 2017 % Var. 17 vs. 16 Net working capit
Slide 27: Sales breakdown by sector
2017 Outlook & Quarterly Results Sales breakdown by sector* E&P Oil & Gas: 5% 1% 3% – Despite the cuts in the Capex of oil companies 11% 12% some specific big projects awarded that helped 13% the gradual increase – Better relative performance of the gas sector 25% 26% 48% Power Generation: – Aft
Slide 28: Strategic Plan 2016 - 2020
4 STRATEGIC PROPUESTA PLAN DE 2016 - 2020 ACUERDOS
Slide 29: Strategic Plan 2013 - 2017
Strategic Plan 2016 - 2020 Strategic Plan 2013 - 2017 Under normal market circumstances, 2015 would have been the year for the consolidation of the Strategic Plan, practically fulfilling the objective set for 2017 If it were not for the oil crisis, we would have fulfilled our Strategic Plan We lau
Slide 30: Strategic Plan 2016 – 2020: Objectives
Strategic Plan 2016 - 2020 Strategic Plan 2016 – 2020: 4 Objectives Reinforce TUBACEX’s positioning as global tubular solutions 1 provider 2 Reduce volatility by diversifying risks Others 5,0% Industrial Petrochem. Oil&Gas 14,0% Oil&Gas 67,0% Other Power Gen energies 14,0% Power Gen Revenues 2013 Re
Slide 31: Strategic Plan 2016 – 2020: Objectives
Strategic Plan 2016 - 2020 Strategic Plan 2016 – 2020: 4 Objectives Achieve Revenues > 1,000M€ in a recovered market situation 3 Step 1 EBITDA 100M€ • Market recovery • Natural growth of our current products Revenues Step 2 • Accomplish fully assembled tubular 1,000M€ systems positioning Achieve an
Slide 32: Strategic Plan 2016 – 2020: Financial Objectives
Strategic Plan Strategic Plan 2016 – 2020: Financial Objectives Revenues 1,000 M € EBITDA Margin 15% NFD /EBITDA 2-3x Net Working Capital / Sales 35% INTERNAL PROJECTS EXTERNAL PROJECTS Commercial positioning Development of testing capabilities (EIC) TSS- full development of global logistics
Slide 33: Thank you!
THANK YOU! WWW.TUBACEX.COM WWW.TUBACEX.COM Analyst Presentation 2017 33