Tubacex, S.a. · BME:TUB
Tubacex — Investor Presentation (2018)
42 slides from Tubacex's investor presentation, 2018
Slide 1: Corporate Presentation 2018
CORPORATE PRESENTATION 2018
Slide 2: Tubacex Group, Recent Evolution, Outlook & Results, Strategic Plan
Tubacex Group Recent Evolution Outlook & Results Strategic Plan 2016-2020
Slide 3: Tubacex Group
Tubacex Group Recent Evolution Outlook & Results Strategic Plan 2016-2020
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.. Corporate Presentation 2018 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
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 Continue our te
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% EDM 5,1% Two new significant shareholders in 2017: AzValor and Torre Rioja- Ecofin 4,9% Madrid Itzarri 3,2% AZValor 3,0% 77% of analysts
Slide 8: Recent Evolution
Tubacex Group Recent Evolution Outlook & Results Strategic Plan 2016-2020
Slide 9: Evaluation of the Year
Recent Evolution Evaluation of the Year The expected recovery has not taken place: Third consecutive year of the most serious crisis in the Oil&Gas sector Dramatic reduction of the Capex in the industry, causing an unprecedented fall in the volume produced and intense price competition We have
Slide 10: Oil Sector
Recent Evolution Oil Sector For the first time in 30 years we have faced three consecutive years of reduced investments, which together with the decline rate of mature assets allow us to forecast a change in the trend in 2018 Contracts award Upstream Capex Growth 120% 40 33 100% 29 100% 83% 30 24
Slide 11: Oil Sector
Recent Evolution Oil Sector There has been an integration movement in the sector aimed at reducing the total operating costs Major transactions in the oil & gas industry since Jan. 2014 120 Brent crude spot Price FOB ($/B) Wood Group-Amec Trican-Canyon FW Noble-GE Helix-OneSubsea-SLB TGS-SLB 100 F
Slide 12: Oil Sector
Recent Evolution Oil Sector The adjustments made in the industry during the crisis have reduced the break-even point of many projects which are now profitable with lower oil prices Offshore costs evolution Half Cycle Breakeven Oil Price 58.5 50.2 46.3 …but also helped to improve efficiency Sourcee
Slide 13: Sales breakdown by sector
Recent Evolution Sales breakdown by sector* E&P Oil & Gas: – Despite the cuts in the Capex of oil companies 5% 1% 3% 2% some specific big projects awarded that helped 17% the gradual increase 22% Transformational projects awarded 26% – 48% – Better relative performance of the gas sector Power Ge
Slide 14: Revenues Breakdown by Geography
Recent Evolution Renues Breakdown by Geography 58% 56% 34% 32% 9% 8% 1% 2% USA & Canada Europe Asia Rest of World Geographical distribution of sales Final destination for Project market Asia remains the biggest market for the Group Corporate Presentation 2018 14
Slide 15: 2017 in line with 2016 excluding adjustments
Recent Evolution 2017 in line with 2016 exluding adjustments €M 2016 2017 % Var Sales 494.0 490.4 -0.7% EBITDA 34.9 25.9 -25.8% It includes non-recurring extraordinary EBITDA margin 7.1% 5.3% adjustments EBIT 2.5 -28.3 n.m. EBIT margin 0.5% neg. Net Profit 0.5 -19.7 n.m. TUBACEX has registered Net M
Slide 16: Main figures evolution
Recent Evolution Main figures evolution Revenues (€M)* EBITDA (€M) EBIT (€M) 752 64 51 44 46 49 32 12% 27 9% 35 16 532 575 612 554 557 534 6% 20 2 9% 7% 5% 26 -28 2012 2013 2014 2015 2016 2017 -30 2012 2013 2014 2015 2016 2017 (1) 2012 2013 2014 2015 2016 2017 * Figure assuming nickel stable EBITDA
Slide 17: Financial Strategy
Recent Evolution Financial Strategy NFD / EBITDA Cash Flow before acquisitions 118€M generated in 5 years 9,8x 68 5,7x 5,9x 70 47 4,5x 50 37 3,8x 14 2,4x 30 -25 -47 10 0,0x -10 -30 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 -50 Gross Cash flow Financing 47.2€M of work 383€M generate
Slide 18: Outlook & Results
Tubacex Group Recent Evolution Outlook & Results Strategic Plan 2016-2020
Slide 19: Positive macroeconomic indicators
2018 Outlook & Results Positive macroeconomic indicators Crude Futures ($/bbl) OECD crude oil stocks(mb) Demand vs. Supply (mb/d) Consumption vs. Reserves Corporate Presentation 2018 19
Slide 20: Positive macroeconomic indicators
2018 Outlook & Results Positive macroeconomic indicators SOURCE: Visiongain SOURCE: Oil&Gas UK Positive evolution of CAPEX Corporate Presentation 2018 20
Slide 21: Recovery first evidences
2018 Outlook & Results Recovery first evidences 1. Increase in imports in the USA 4. Gap in Decline Range vs. Demand Range 2. Increase in CAPEX in the OEM’s 5. Rise in raw material prices 3. Rise in price per barrel 100% 83% 58% 45% 2014 2015 2016 2017E Contracts awarded for Upstream, Midstream, Dow
Slide 22: Initial signs of recovery
2018 Outlook & Results Initial signs of recovery The North Sea has undergone the biggest fall in percentage demand than any other region. However, this trend is starting to be reversed in 2018. Change in tendency in the Middle East with incremental CRA needs due to the prevalence of sour gas Nor
Slide 23: Market Positioning Strategy
2018 Outlook & Results Market Positioning Strategy 1 Move commodity product to plants in Asia (India, Thailand) Develop sale of commodity product through own TSS – Master Distributor network Sale of Premium products directly to End Users and EPC’s 2 Offer the largest range of products on the
Slide 24: Business Strategy
2018 Outlook & Results Business Strategy Added Value Premium Products 2012 2017 Premium Value Chain 40% 40% Standard Margen OEM 60% 60% EPC % in euros of Premium products over total consolidated revenues Fabricators 2017 Pack. New Products 2012 80% Compilers 70% 60% Distribut. 50% 40% 52% 30% 35% Ty
Slide 25: Management Strategy
2018 Outlook & Results Management Strategy 1 Establish the management methodology New organization focusing on the Income Statement. < Cost New “Business Unit Trading” Financial Management 2 Industry 4.0 – Big data Process Automation Robotization Use of sensorization in products Tube
Slide 26: Development Strategy
2018 Outlook & Results Development Strategy 1 Connections Hydraulic connections Fittings, Tees, Caps Use of welding 2 Services New coatings – Coatings Bending, welding, machining, etc. After-sales service Sequencing Product assembly services Testing, life expectancy testing (EIC) 3 O
Slide 27: Innovation Strategy
2018 Outlook & Results 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 Six patent applications in 2016-20
Slide 28: Strategic Positioning
2018 Outlook & Results Strategic Positioning With our market positioning and maintaining the improvements in Productivity and Efficiency and the effort in Innovation, all under the EFQM excellence model Our Vision: TO BECOME A SUPPLIER OF PREMIUM TUBULAR SOLUTIONS Corporate Presentation 2018 28
Slide 29: Outlook for the Year
2018 Outlook & Results Outlook for the Year Gradual recovery of the market Partial recovery of the base prices Increase in the price of raw materials Development of the contracts awarded in 2017 Important year for the launch of new products / businesses Good positioning for new long-term
Slide 30: Revenues and EBITDA evolution
2018 Outlook & Results Revenues and EBITDA evolution Revenues 200 160 168 140 147 143 140 150 136 128 131 129 123 119 121 120 112 105 110 100 50 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 EBITDA 20 18,3 17
Slide 31: Main financials
2018 Outlook & Results Main financials Q1 2018 Q1 2017 % Var. Mill.€ Revenues 168.5 131.3 28.3% EBITDA 15.8 13.0 21.0% EBITDA margin 9.4% 9.9% EBIT 6.5 4.6 40.5% EBIT margin 3.9% 3.5% Profit Before Taxes 2.9 2.8 2.4% PBT margin 1.7% 2.2% Q1 2018 FY 2017 Var. Net working capital 217.1 193.0 +24.0 Net
Slide 32: Outlook for the Year
2018 Outlook & Results Outlook for the Year Uncertainty in the execution of the order for Iran: our expectation is to be able to supply at least until the end of the year (November 2018) Reduction in the working capital as the projects are delivered, gradual reduction of the NFD throughout the y
Slide 33: Strategic Plan 2016 - 2020
Tubacex Group Recent Evolution Outlook & Results Strategic Plan 2016 - 2020
Slide 34: Strategic Plan 2013 - 2017
Strategic Plan 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 launch a new pl
Slide 35: We are better positioned for recovery
Strategic Plan We are better positioned for recovery Pre Crisis Crisis 2014 (Proforma) 2016 - 2017 Change Revenues 750 M€ 500 M€ -250 M€ (-33%) Gross margin 370 M€ (50%) 230 M€ (46%) -140 M€ (-38%) EBITDA 82 M€ (12%) 35 M€ (7%) -47 M€ (-57%) Headcount 2.800 2.314 -486 p. # Patents 0 7 +7 Order Intak
Slide 36: Phases in our Strategic Plan
Strategic Plan Phases in our Strategic Plan Starting Strategic Improvement Oil&Gas Crisis Recovery point Target FY 2012 2013-2014 2015-2017 2018 - 2019 2020 - 2021 Product Mix (% 36.2% Premium 60% Premium 70% Premium 27% 70% Premium premium over sales) Products Products Products Sales n.a. +15% -30%
Slide 37: New Perimeter set up during Crisis
Strategic Plan New Perimeter set up during Crisis IBF (Italy) Prakash (India) Awaji (Thailand) Tubacex Upstream Tubacex Services Tubacex Service Solutions Corporate Presentation 2018 37
Slide 38: Significant advance in market positioning
Strategic Plan Significant advance in market positioning New products, services and materials Corporate Presentation 2018 38
Slide 39: Strategic Objectives 2020
Strategic Plan Strategic Objectives 2020 Continue positioning TUBACEX as a global supplier of tubular 1 solutions SUPPLIER OF PREMIUM TUBULAR SOLUTIONS 2 Reduction of the volatility diversifying risks Market Geographic Diversification Product Correct Product Allocation Sector Increase in
Slide 40: Strategic Objectives 2020
Strategic Plan Strategic Objectives 2020 Obtain a level of excellence above 500 in the EFQM model 3 (Silver Q for the management model is 400), with all of the results above 50% in both internal and external audits 4 Sustainable and profitable growth that takes us to attractive financial ratios for
Slide 41: Strategic Plan 2016 – 2021: Financial Objectives
Strategic Plan Strategic Plan 2016 – 2021: Financial Objectives Revenues 1,000 M € EBITDA Margin 15% NFD /EBITDA 2-3x Net Working Capital / Sales 35% INTERNAL PROJECTS EXTERNAL PROJECTS Organic growth Development of testing capabilities (EIC) Commercial positioning Agreements with engineerin
Slide 42: Thank You!
THANK YOU! © TUBACEX “GRoup WWW.TUBACEX.COM