Tubacex, S.a. · BME:TUB
Tubacex — Investor Day (November 2023)
89 slides from Tubacex's investor day presentation, Nov 21, 2023
Slide 1: Agenda
AGENDA Tubacex Equity Story Tubacex's Low Carbon strategy Financial highlights Conclusions & Closure Jesús Esmorís, CEO Miguel Gómez, Low Carbon Managing Guillermo Ruiz-Longarte, CFO Jesús Esmorís, CEO Director 10:00 10:05 10:45 11:05 11:25 11:40 11:55 12:30 10:05 10:45 11:05 11:25 11:40 11:55 12:25
Slide 2: Driving Tubacex's Transformation Success Story Towards the Next Transition
DRIVING TUBACEX’S TRANSFORMATION SUCCESS STORY TOWARDS THE NEXT TRANSITION CAPITAL MARKETS DAY NOVEMBER 21st, 2023 Jesús Esmorís CEO CAPITAL MARKETS DAY // 2
Slide 3: Our Purpose: Tubacex Today
OUR PURPOSE: TUBACEX “We are committed to human TODAY progress by addressing new challenges, providing advanced industrial products and services””
Slide 4: We Emerge as a World Leader in Advanced Industrial Solutions
WE EMERGE AS A WORLD FROM TUBULAR TO ADVANCED INDUSTRIAL LEADER IN ADVANCED SOLUTIONS INDUSTRIAL SOLUTIONS We are a global benchmark in the design, manufacturing, and installation of FOR ENERGY AND advanced industrial products and high-value-added services where only the most sophisticated solutions
Slide 5: A Global Leader in Industrial Products and Services for Energy and Mobility
A GLOBAL LEADER IN INDUSTRIAL PRODUCTS AND SERVICES FOR ENERGY AND MOBILITY 2500 EMPLOYEES 24 PRODUCTION 14 SERVICE 2 INNOVATION GLOBAL PRESENCE AND THREE MAIN HUBS PLANTS CENTERS CENTERS 60 15 400 COUNTRIES COMMERCIAL QUALITY SUPPLIED OFFICES CERTIFICATIONS Sales by geography (as of 2023E) 33% Amer
Slide 6: Pioneering Diversification Across Multiple Business Sectors
PIONEERING DIVERSIFICATION ACROSS MULTIPLE Applications sectors BUSINESS SECTORS (as of 2023E) 37% Industrial Precision and 15% mobility Focus on industries where: Powergen 6% ▪ Only the most sophisticated solutions can deliver the 25% E&P Gas best performance ▪ High requirements applications become
Slide 7: With a Robust Portfolio
WITH A ROBUST PORTFOLIO LOOKING AHEAD BY REACHING LONG-TERM AGREEMENTS WITH KEY CUSTOMERS 01 02 03 04 05 06 Stainless steel & high Seamless Stainless- Forged fittings and High precision Value added Stock, Service & nickel alloys bars and Steel Pipes & Tubes special connections machining operation &
Slide 8: 1. Stainless Steel & High Nickel Alloys Bars and Billets
1. STAINLESS STEEL & HIGH NICKEL ALLOYS BARS AND BILLETS LONG STAINLESS-STEEL PRODUCTS, SPECIALIZED IN INGOTS, BARS AND BILLETS, ROLLED AND FORGED (120-600 mm) Served from SPAIN Application sector Pipes & bars Flanges Valves Industrial Hollow bars & other metal mechanical applications CAPITAL MARKET
Slide 9: 2. Seamless Stainless-Steel Pipes & Tubes
2. SEAMLESS STAINLESS- STEEL PIPES & TUBES SEAMLESS STAINLESS-STEEL PIPES & TUBES (EXTRUSION, PIERCING AND COLD FINISHING) – UP TO 8’’ Served from SPAIN AUSTRIA INDIA USA *Photo caption: Tube typology (OCTG, H&I, Umbilicals, Linepipe and heat exchanger, space tubes). Application sector E&P of Oil &
Slide 10: 3. Forged and Machined Tubular Components, Fittings and Special Connections
3. FORGED AND MACHINED TUBULAR COMPONENTS, FITTINGS AND SPECIAL CONNECTIONS Served from SPAIN ITALY THAILAND KAZAKHSTAN Application sector Nuclear Powergen Industrial & Petrochemical E&P of Oil & Gas CAPITAL MARKETS DAY // 10
Slide 11: 4. High Precision Machining
4. HIGH PRECISION MACHINING COMPLEX MECHANICAL SOLUTIONS FOR HIGH GRADE ALLOY EQUIPMENT THAT SUPPORTS DRILLING, WELLBORE EVALUATION, COMPLETIONS, PRODUCTION, AND UPSTREAM O&G OPERATIONS Served from USA UAE NORWAY SINGAPORE CANADA GUYANA SAUDI ARABIA Application sector E&P of Oil & Gas Offshore subse
Slide 12: 5. Value Added Operation & Services
5. VALUE ADDED OPERATION & SERVICES Served from SPAIN USA DUBAI SINGAPORE CANADA ABU DHABI Application sector Tube Threading Welding & bending Tool rental & Repair Heat treatment Component machining Coatings CAPITAL MARKETS DAY // 12
Slide 13: 6. Stock, Service & Trading
6. STOCK, SERVICE & TRADING MASTER STOCKIST IN SEAMLESS STAINLESS STEEL TUBES AND PIPES Served from SPAIN USA AUSTRIA DUBAI INDIA SAUDI ARABIA FRANCE NORWAY BRAZIL SINGAPORE Application sector All industries and energy sector Stock management Service centers CAPITAL MARKETS DAY // 13
Slide 14: A Fully Integrated and Traceable Solution Business Model
A FULLY INTEGRATED AND TRACEABLE SOLUTION BUSINESS MODEL 01 02 03 04 05 CONCEPT & ENGINEERING MANUFACTURE SUPPLY CHAIN SERVICES PRODUCT DESIGN REPAIR & MAINTENANCE INTEGRAL CUSTOMER SERVICE CAPITAL MARKETS DAY // 14
Slide 15: Tubacex's Key Success Factors
PREFERRED GLOBAL PARTNER TUBACEX’S 1. Global and diversified footprint KEY SUCCESS 2. Long-term agreements with key customers 2022 FACTORS 3. A best in class in sustainability according to the most demanding ratings Outstanding performance UNIQUE VALUE PROPOSITION in a very challenging international
Slide 16: Main Financial Figures
MAIN FINANCIAL FIGURES 9M 2023 Results 9M 2022 9M 2023 % Var. Q3 2022 Q3 2023 % Var. (€M) Sales 527.1 641.9 21.8% 173.3 207.2 19.6% EBITDA 67.3 93.8 39.3% 24.8 29.5 18.7% EBITDA Margin 12.8% 14.6% 14.3% 14.2% EBIT 31.7 60.6 91.1% 13.6 19.6 43.4% EBIT Margin 6.0% 9.4% 7.9% 9.4% Earnings Before Taxes
Slide 17: Main Figures from the Income Statement
MAIN FIGURES FROM THE INCOME STATEMENT 9M 2023 Results Quarterly Average EBITDA evolution Annual EBITDA evolution Performance (€M) Performance (€M) 33.9 30.5 29.5 24.8 25.0 92.3 23.4 19.0 69.6 67.1 COVID Effect 17.4 16.8 12.6 93.8 38.1 9.5 9M 4.7 17.5 2023 0.1 2018*2019*2020* H1 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 18: Conclusions: Historical Moment for Tubacex
CONCLUSIONS Strategic Good market Order intake Q4 results will be in commitment to momentum in remains at high line with previous sustainability and which securing the levels, enabling the quarters the energy energy supply is a backlog to remain at transition priority record levels HISTORICAL MOMENT
Slide 19: A Successful Transformation Story
A SUCCESSFUL TRANSFORMATION STORY
Slide 20: Since Our Establishment in 1963, We Have Continually Evolved
SINCE OUR ESTABLISHMENT IN 1963, WE HAVE CONTINUALLY EVOLVED HAND IN HAND WITH OUR CUSTOMERS AND THE SOCIETY Benchmark transformation based Advanced industrial solutions, on high value-added solutions positioning Tubacex as a strategic instead of volumes, obtaining long-term partner and a key player
Slide 21: Successful Evolution: Market Repositioning, Strategic Plan 2014-2020
SUCCESSFUL EVOLUTION MARKET REPOSITIONING Budget 2023 Value products STRATEGIC PLAN 2014-2020 Products type 70% 2012 2022 Marketing repositioning A 65% Petrobras LTA ADNOC LTA Relevant investment in industrial installations and 60% R&D to develop new products CD products manufacturing 55% moved to A
Slide 22: Tubacex Transformation
TUBACEX TRANSFORMATION PREVIOUS TUBACEX CURRENT TUBACEX Seamless stainless steel tubes manufacturer Advanced industrial suppliers of high alloys Selling through distributors Long Term Agreements with main end users and customers Focused on volume Focused on value High volatility Low volatility 3-4 m
Slide 23: Strategic Plan 2021-2025
STRATEGIC PLAN 2021-2025 TUBACEX GROUP
Slide 24: Capitalizing on Emerging Macrotrends
CAPITALIZING ON EMERGING MACROTRENDS… ENERGY TRANSITION ECONOMIC GROWTH MOBILITY • Renewable energy production increase • Consumption increase • Increased movement of people • Net-zero commitments • Growth in emerging markets • Transport demand growth • Electrification of production processes • Ener
Slide 25: ... and on Key Markets Evolution
… AND ON KEY MARKETS EVOLUTION OIL & GAS Global energy demand growth driven by the necessity of securing an affordable energy supply in accordance with the World Energy Trilemma and the updated forecasts by OPEC The world requires $14 trillion in oil sector investments by 2045 to ensure market stabi
Slide 26: Three Clearly Differentiated Phases
Phase 0: 2020-2021 Phase 1: 2022-2025 Phase 2: 2024-2025 RESTRUCTURING DELIVERING STABLE GROWTH & & PREPARING RESULTS AND CASH DIVERSIFICATION GENERATION THREE CLEARLY DIFFERENTIATED PHASES 2030 VISION HIGH VALUE SOPHISTICATED SOLUTIONS PROVIDER FOR ENERGY AND Growing sectors and MOBILITY Significan
Slide 27: Ready to Lead the Next Transition
READY TO LEAD THE NEXT TRANSITION BACKED BY FIVE SOLID STRATEGIC AXES ENSURING LEADING NET DEBT COMPETITIVENESS 01 SUSTAINABILITY 02 REDUCTION 03 CURRENT 04 & EFFICIENCY 05 DIVERSIFICATION STABILITY CAPITAL MARKETS DAY // 27
Slide 28: A Best in Class in Sustainability: Our Ambition 2030
LEADING A BEST IN CLASS IN 1 SUSTAINABILITY SUSTAINABILITY OUR AMBITION 2030 1 2 Advancing towards Contributing to the neutrality and enhancing development of innovative business circularity solutions for energy transition <60% 40% 95% €50M 80% 1%-2% INTENSITY OF GREEN OF WASTE BILLED TO NEW R&D ENE
Slide 29: Anticipating Our Sustainability Targets Ahead of Expectations
LEADING ANTICIPATING OUR SUSTAINABILITY TARGETS AHEAD OF EXPECTATIONS 1 SUSTAINABILITY 2019*Goal status: 9M 2023 (vs. 2019*) GOAL 2030 FULFILMENT Subcategory Unit ENVIRONMENT Mwh/ Energy intensity (1) GAV 2.58 2.13 >100% 1,37 ENERGY & Ton CO2/ Scope 1 + 2 emissions intensity (2) GAV 0.70 0.28 >100%
Slide 30: Energy Related Initiatives Across the Tubacex Group
LEADING WITH MORE THAN 50 PROJECTS LAUNCHED ACROSS THE TUBACEX GROUP 1 SUSTAINABILITY SOME ENERGY RELATED INITIATIVES DECARBONIZATION OF OUR STEEL MILL 01 EFFICIENCY 1. Energy efficiency improvements The defined roadmap incorporates technologies such as oxy- 2. ISO 50001. Energy efficiency combustio
Slide 31: A Sound Balance Sheet to Capitalize on Future Growth
NET DEBT 2 REDUCTION A SOUND BALANCE SHEET TO CAPITALIZE ON FUTURE GROWTH Main ratios Net Financial Debt / EBITDA Focus on cash generation Cash Conversion Ratio Continue with strict CAPEX control and disciplined capital approach >50% Working Capital over sales 3.84x Reduction of working capital 30%
Slide 32: Mitigating Business Fluctuations for Steady Outcomes
ENSURING 3 CURRENT STABILITY MITIGATING BUSINESS FLUCTUATIONS FOR STEADY OUTCOMES LONG TERM AGREEMENTS DIVERSIFICATION PROVIDING HIGH VISIBILITY continue to develop our presence in Aerospace and H&I segments, as well as Low Carbon business In 2022 order book stood at €1.6bn, the highest level in the
Slide 33: Long-Term Agreements in OCTG with Large Business Players
ENSURING 3 CURRENT STABILITY CASE STUDY I LONG-TERM AGREEMENTS IN OCTG WITH LARGE BUSINESS PLAYERS ABUOIL DHABI & GAS BRAZIL 1st State-of-the-art CRA-OCTG Value added operation and services based on a Global energy demand growth driven by the necessity of LTA with Petrobras, for the supply of OCTG m
Slide 34: Tubacex and Aker Solutions Forge Co-Creation Partnership
ENSURING 3 CURRENT STABILITY CASE STUDY II TUBACEX AND AKER SOLUTIONS FORGE CO-CREATION PARTNERSHIP A MODEL OF ENERGY SECURITY AND SUSTAINABILITY Within its Long-Term Agreement Program with the Norwegian Aker Solutions A/S, Tubacex signed a framework contract for 3 relevant hydrocarbon reservoir pro
Slide 35: A Solution Provider in Powergen Nuclear Energy
ENSURING 3 CURRENT STABILITY CASE STUDY III A SOLUTION PROVIDER IN THE SOLUTION POWERGEN NUCLEAR ENERGY Tubacex was awarded with the pipe and fitting design and manufacturing Project, includes approximately 700 fittings and NUCLEAR REACTOR COOLING PIPE CORROSION: EDF/ 2022 400 m of pipes which were
Slide 36: Maintaining a Stable and Robust Operating Profitability
COMPETITIVENESS 4 & EFFICIENCY MAINTAINING A STABLE AND ROBUST OPERATING PROFITABILITY Focus on our lean operations and production systems €641.9M €93.8M 14.6% €1,630M SALES EBITDA EBITDA BACKLOG 9M23 MARGIN Constant optimization of our production processes Flexibility as a key lever, GRADUAL IMPROV
Slide 37: Business Lines Aligned with Society's Decarbonization Goals
5 DIVERSIFICATION BUSINESS LINES ALIGNED WITH SOCIETY’S DECARBONIZATION GOALS A POWERFUL STRUCTURE FOR A NEW ERA CORE LOW CARBON NEW TUBACEX SOLUTIONS BUSINESSES PRODUCTS Supporting our customers in Offering low carbon solutions for energy Analyzing organic and inorganic growth in their decarbonizat
Slide 38: We Have Already Made Great Progress
WE HAVE ALREADY MADE GREAT PROGRESS ENSURING LEADING NET DEBT COMPETITIVENESS 01 SUSTAINABILITY 02 REDUCTION 03 CURRENT 04 & EFFICIENCY 05 DIVERSIFICATION STABILITY • International • Strict CAPEX control • Significant growth • +€30M in fixed costs • Significant growth in recognitions for our • Cash
Slide 39: Anticipating Two Years the Accomplishment of the Main Objectives
ANTICIPATING TWO YEARS THE ACCOMPLISHMENT OF THE MAIN OBJECTIVES A SUCCESSFUL AND VISIONARY STRATEGY CONTRIBUTING TOWARDS A FRUITFUL RESULT FY 2025 FULFILMENT 2022 GOALS EXPANSIVE CYCLE OF 1,000- TRADITIONAL REVENUE ≈ 715M 1,200M BUSINESS ≈900M 2023E EBITDA 12.9% 12-15% MARGIN GROWTH ALIGNED 14.6% 9
Slide 40: Summary
SUMMARY TUBACEX HAS MADE MORE PROGRESS THAN EXPECTED IN MEETING ITS STRATEGIC OBJECTIVES WE HAVE UPDATED OUR STRATEGIC PLAN WITH NEW OBJECTIVES UP TO 2027 KEY POINTS OF OUR NEW PLAN: ▪ Moving forward on our five strategic axes ▪ Diversifying our current businesses and gaining market share in new sec
Slide 41: Tubacex: A Proactive Role in the Energy Transition
TUBACEX: A PROACTIVE ROLE IN THE ENERGY TRANSITION FACILITATING ITS CLIENTS THE ACHIEVEMENT OF THEIR GOALS CONVENTIONAL ENERGY ▪ Increase in gas consumption To accompany our clients in their ▪ Relaunching of nuclear projects decarbonization processes and ▪ New technologies to reduce CO2 emissions su
Slide 42: Innovation as a Lever of Our Transformation Towards the Next Transition
INNOVATION AS A LEVER OF OUR TRANSFORMATION TOWARDS THE NEXT TRANSITION CAPITAL MARKETS DAY NOVEMBER 21st, 2023 Diego Herrero Corporate Innovation Director CAPITAL MARKETS DAY // 42
Slide 43: Evolving with the World
EVOLVING WITH THE WORLD World energy CAPEX and OPEX R&D expenditure related to energy transition 10 years average Units: Billion USD/yr Traditional Low Carbon Fossil Non-Fossil Grids 2010s 2020s 100 2000 90 28% 80 70 2030s 1500 80% 60 2040s 50 1000 40 72% 30 500 20 10 20% 0 0 CAPEX OPEX CAPEX OPEX C
Slide 44: Energy Transition for Tubacex
ENERGY TRANSITION FOR TUBACEX DRIVERS KEY TECHNOLOGIES OUTPUTS Electrolyzers 1 Hydrogen Decarbonized mobility H2-mobility decarbonization ENERGY Processes TRANSITION CO2 separation & Green Ammonia compression 2 Carbon Capture CO2 storage Sources of energy and CO2 valorisation Green Urea resources Bi
Slide 45: Hydrogen by Technology
1 HYDROGEN HYDROGEN BY TECHNOLOGY World hydrogen production by technological route Units: MtH2/yr. 350 Dedicated nuclear electrolysis Dedicated offshore wind 300 electrolysis electrolysis Dedicated onshore wind 250 electrolysis Dedicated solar ▪ Very significant long-term growth 200 electrolysis Gri
Slide 46: Materials for Hydrogen Applications
MATERIALS FOR HYDROGEN APPLICATIONS 1 HYDROGEN CURRENT PROJECTS BEING DEVELOPED FOR THE DIFFERENT HYDROGEN-RELATED TECHNOLOGICAL CHALLENGES HIGH TEMPERATURE: LOW TEMPERATURE: Blue hydrogen: New reformer designs ▪ Standard stainless steel grades are widely used for hydrogen applications. Increasing d
Slide 47: Materials and Components for Electrolyzers
MATERIALS AND COMPONENTS FOR ELECTROLYZERS 1 HYDROGEN PARTICIPATING IN SEVERAL R&D PROJECTS TO DEVELOP ADVANCED MATERIALS AND COMPONENTS PEM ELECTROLYZERS: SCIENTIFIC & TECNOLOGICAL CAPABILITIES MEMBERS OF BASQUE RESEARCH & TECHNOLOGY ALLIANCE SOEC ELECTROLYZERS: AEM AND PCEC ELECTROLYZERS: CAPITAL
Slide 48: New Business Models. Components for Electrolyzers
NEW BUSINESS MODELS. COMPONENTS FOR ELECTROLYZERS 1 HYDROGEN GEARED UP FOR DELIVERING VALUE TO MAIN ELECTROLYZER OEMS PROTOTYPE / FEW UNITS SERIAL PRODUCTION PRODUCT Tubes / pipes off-the-shelf Functional parts SERVICE Stock Just in Time Total Quality Management Zero defects QUALITY Standards Integr
Slide 49: New Business Models
1 HYDROGEN NEW BUSINESS MODELS NEW TECHNOLOGIES AND SOLUTIONS ARE EMERGING CONTINUOUSLY Actively looking for partnerships to develop new business models Example: Waste to hydrogen project Non Recyclable ▪ Parnership with a technology Waste developer (Novargi) 85% waste recovery 12,000 tn/y Non Recyc
Slide 50: Overview of Hydrogen Strategies
1 HYDROGEN OVERVIEW OF HYDROGEN STRATEGIES ENHANCE CURRENT OFFERING BY: ▪ Optimizing precision tubing capacity worldwide ▪ Adding and promoting new alloys EXPLORE NEW MATERIALS SOLUTIONS: ▪ Materials for electrolizer stacks ▪ Ceramic coatings ▪ Bimetallic tubes DEVELOP NEW BUSINESS MODELS: ▪ Serial
Slide 51: New Solutions for Fertilizer Production
1 HYDROGEN NEW SOLUTIONS FOR FERTILIZER UREA PRODUCTION PROCESS PRODUCTION TUBACEX STRATEGIC FOCUS CREATION OF A NEW EMERGING BUSINESS UNIT DRIVEN BY R&D Hydrogen + Nitrogen = Ammonia + CO2 = UREA Steam Ammonia plant Reforming Air Separation Flue gas of New steel grades for the urea synthesis Biomas
Slide 52: Carbon Capture for Tubacex
CARBON CAPTURE FOR TUBACEX 2 CARBON CAPTURE CO2 CAPTURE & STORAGE CCS steps Capture capacity by source MtCO2/ry 300 Historical Announced 250 Other / in evaluation Iron And Steel Production DAC 200 Oil Refining Fertilizer production 150 Chemical production Cement production 100 Ethanol production Nat
Slide 53: Circular Economy
CIRCULAR 3 CIRCULAR ECONOMY ECONOMY BIOFUELS/SYNTHETIC FUELS /BIOPLASTICS PARADIGM SHIFT: FROM REFINERY TO ENERGY HUB THE INCREASED COMPLEXITY OF THE PROCESSES is driving a new CAPEX cycle, with smaller and more diverse projects THE PROCESS OF WASTE LEADS TO HIGHER CORROSIVITY AT THE INITIAL STAGES,
Slide 54: Small Modular Reactors
SMALL MODULAR REACTORS 4 NUCLEAR NUCLEAR ENERGY 2020-2030 The size of the potential global SMR market is expected to be SIZE (MWe) MODEL COMPANY COUNTRY TYPE OF REACTOR INTEGRATED 5G (Y/N) approximately 65-85GW by 2035, valued at £250-£400bn* (Source: UK National Nuclear laboratory) 5 E-VINCI WESTIN
Slide 55: Innovation Strategy Approach
INNOVATION NEW PRODUCTS/TECHNOLOGIES Develop new STRATEGY products/technologies for APPROACH the emerging energy transition topics COMPETITIVENESS Improve the competitiveness of our current offering SUPPLY CHAIN Move up in the supply chain to provide a more integrated/higher value proposition DECARB
Slide 56: Tubacex Low Carbon Business Unit
TUBACEX LOW CARBON BUSINESS UNIT CAPITAL MARKETS DAY NOVEMBER 21st, 2023 Miguel Gómez Lacabex Corporate Business Development Director Managing Director Low Carbon CAPITAL MARKETS DAY // 56
Slide 57: Introduction
INTRODUCTION THE ENERGY TRANSITION BRINGS MANY OPPORTUNITIES LEADING TO AN INCREASED USAGE OF OUR ADVANCED MATERIALS This background has allowed Tubacex low carbon business unit to launch its operations on different industries where our advanced materials will play a key role Our Low Carbon vision i
Slide 58: Low Carbon Business Unit: Scope
LOW CARBON BUSINESS UNIT: SCOPE ▪ Specific materials and products ▪ Unique premium tubular solution for developed for Hydrogen applications ▪ Stainless- Steel high-pressure tubing 1 2 all stages of Carbon Capture ▪ Integrated OCTG premium solution for most applications HYDROGEN CARBON for CO2 inject
Slide 59: 1. Hydrogen: Size of the Opportunity & Tubacex Strategy
1 1. HYDROGEN: SIZE OF THE OPPORTUNITY & TUBACEX STRATEGY ADDRESSABLE MARKET TUBACEX STRATEGY Hydrogen power generation capacity by region, NZS To be the technical leader in advanced 1 materials used by the hydrogen industry GW 1.200 To lead disruptive technologies that will 2 play a role in the dev
Slide 60: 1. Hydrogen: Size of the Opportunity & Tubacex Strategy
1. HYDROGEN: SIZE OF THE OPPORTUNITY & TUBACEX STRATEGY 1 TECHNICAL LEADER IN ADVANCED TO LEAD DISRUPTIVE TECHNOLOGIES INTEGRAL TUBULAR SOLUTIONS MATERIALS Alloy 699XA ▪ Increased metal dusting resistance for ▪ Unique technology for waste to ▪ One-stop-shop tubular solutions for the hydrogen product
Slide 61: 2. Carbon Capture Utilization & Storage: An Emerging Market
2 2. CARBON CAPTURE UTILIZATION & STORAGE: AN EMERGING MARKET WITH SIGNIFICANT POTENTIAL FOR TUBACEX Carbon Capture is becoming a key tool to accelerate the Energy The US market has positioned itself in a privileged position for Transition, with a pipeline of projects on execution and planning stage
Slide 62: 2. Carbon Capture: Size of the Opportunity and Tubacex Strategy
2 2. CARBON CAPTURE: SIZE OF THE OPPORTUNITY AND TUBACEX STRATEGY ADDRESSABLE MARKET TUBACEX STRATEGY OCTG Demand Carbon Capture €M 1 To deliver an integral tubular solution for all processes involved in the Carbon Capture process 500,00 To leverage on our global leading position in CRA 450,00 2 OCT
Slide 63: 2. Carbon Capture: Existing Projects and Addressable Market
2. CARBON CAPTURE: EXISTING PROJECTS AND ADDRESSABLE MARKET 2 INTEGRATED TUBULAR SOLUTIONS LEVERAGING OUR POSITION IN CRA PARTICIPATE IN THE DESIGN AND OCTG TUBULAR SOLUTIONS ENGINEERING STAGES ▪ To develop a unique value proposition for ▪ To continue positioning ourselves as the ▪ Carbon Capture is
Slide 64: 3. Fertilizers & Ammonia: Size of the Opportunity & Tubacex Strategy
3. FERTILIZERS & AMMONIA: SIZE OF THE OPPORTUNITY & TUBACEX STRATEGY 3 ADDRESSABLE MARKET TUBACEX STRATEGY €M To increase current market share by leveraging the 1 investments made over the past years to develop 425 two new steel grades especially designed to better 400 withstand the corrosive enviro
Slide 65: 3. Fertilizers & Ammonia: Existing Projects and Addressable Market
3. FERTILIZERS & AMMONIA: EXISTING PROJECTS AND ADDRESSABLE MARKET 3 TO INCREASE MARKET SHARE WITH TO DEVELOP AN INTEGRAL SOLUTION TO APPROACH NEW INDUSTRIES WITH OUR NEWLY DEVELOPED MATERIALS WITH JUST IN TIME DELIVERIES SIMILAR TECHNICAL CHALLENGES ▪ To develop a strategic agreement with ▪ Availab
Slide 66: 4. Circular Economy: Tubacex Strategy
4. CIRCULAR ECONOMY: TUBACEX STRATEGY 4 TUBACEX STRATEGY To improve efficiency and reduce CO2 emissions of 1 high emitting industries To actively participate in the challenges attached to 2 the circular economy wherever advanced materials are required Source: Repsol The pursuit of a reinforced circu
Slide 67: 4. Circular Economy: Tubacex Strategy
4. CIRCULAR ECONOMY: TUBACEX STRATEGY 4 TO REDUCE THE CO2 EMISSIONS OF TO LEAD THE TECHNICAL CHALLENGES OF OUR CUSTOMERS THE CIRCULAR ECONOMY ▪ To continue with the penetration of our advanced coatings, thus ▪ Waste to any kind of energy leads to higher levels of corrosion drastically reducing CO2 e
Slide 68: Low Carbon Business Unit Conclusions
LOW CARBON BUSINESS UNIT CONCLUSIONS RUNNING BUSINESS GO TO MARKET STRATEGY Tubacex Low Carbon is a We have a clear Go To Market strategy and reality with existing sales in value proposition for our existing four different applications targets (Carbon Capture, Hydrogen, Fertilizers & Ammonia, and Ci
Slide 69: The Low Carbon Unit
THE LOW CARBON UNIT THE LOW CARBON UNIT HAS BEEN CREATED TO ACCOMPANY OUR CURRENT CUSTOMERS The Low Carbon global market is We hold a conservative approach; Low Carbon could become one expected to grow exponentially however, the energy transition of Tubacex’s most important will be a reality regardl
Slide 70: Securing Energy Supply Is Our Priority
THE WORLD IS MOVING TOWARDS DECARBONISATION OF ENERGY SOURCES SECURING ENERGY SUPPLY IS OUR PRIORITY ENERGY DEMAND RENEWABLES & CONVENTIONAL ENERGY HUGE EFFORT IN INCREASE NEED TO COEXIST CO2 REDUCTION To secure a sustainable, To develop low carbon emissions To decarbonize current affordable and rel
Slide 71: Driving the New Tubacex Towards the Next Transition
NT 2027 2 DRIVING THE NEW TUBACEX TOWARDS THE NEXT TRANSITION CAPITAL MARKETS DAY // 71
Slide 72: New Tubacex
NEW TUBACEX A UNIQUE POSITION Solid financial results (nine consecutive quarters of improved results) 2021-2025 plan executed under normal market conditions Privileged position within the industry to take advantage of current expansion cycle • Successful cost reduction project • Organic ADNOC projec
Slide 73: To Lead the Next Transition
ROOM FOR MARKET SHARE INCREASE In certain products where we already hold a strong market position TO LEAD THE NEXT TRANSITION SIGNIFICANT UPSIDES SUBSTANTIAL GROWTH OPPORTUNITIES IN LOW CARBON NUCLEAR BUSINESS PROJECTS AERONAUTICS & INDUSTRIAL SPACE EXPLORATION APPLICATIONS DIVERSIFICATION THROUGH M
Slide 74: Committed to Meeting Even More Ambitious Targets
THE NEXT TRANSITION COMMITTED TO REDUCE OIL & MARKET LEADERS TO BE A POINT OF MEETING GAS EXPOSURE IN LOW CARBON REFERENCE IN TO 1/3 OF THE BUSINESS SUSTAINABILITY EVEN MORE BUSINESS AMBITIOUS TARGETS THE NEW TUBACEX NT2 2027 TARGETS REVENUE EBITDA NFD / EBITDA €1,200-1,400M >€200M <2X Including pot
Slide 75: Management Team
MANAGEMENT TEAM EXTENSIVE EXPERTISE AND A PROVEN TRACK RECORD Jesús Esmorís Antón Azlor Guillermo Ruiz-Longarte Manuel Sarabia Diego Herrero Miguel Gómez Lacabex CEO Corporate Commercial Corporate Financial Corporate HR Director Corporate Innovation Corporate Business Director Director Managing Dire
Slide 76: Tubacex Financial Highlights
TUBACEX FINANCIAL HIGHLIGHTS CAPITAL MARKETS DAY NOVEMBER 21st, 2023 Guillermo Ruiz-Longarte Corporate Financial Director
Slide 77: P&L Transformation Path 2024-2027: Sales
P&L TRANSFORMATION PATH: 2024-2027 UNDER NORMAL MARKET / MID-CYCLE CIRCUMSTANCES 1) SALES ACTUAL BUSINESS Starting point €850M +9% DONE STRATEGIC PLAN 2025 €780M GOAL 2027 + €250- ADNOC + FMAD(1) + NIS (2) + M&A €1,200 – 1,400M ROAD TO 450M 2027 + €100M LOW CARBON BUSINESS UNIT INCREASE IN SALES = B
Slide 78: P&L Transformation Path 2024-2027: EBITDA
P&L TRANSFORMATION PATH: 2024-2027 UNDER NORMAL MARKET / MID-CYCLE CIRCUMSTANCES 2) EBITDA ACTUAL BUSINESS Starting point €125M 14.7% Margin +14% GOAL 2027 DONE STRATEGIC PLAN 2025 €110M 14% Margin ≈15% + >€55M Margin ADNOC + FMAD(1) + NIS (2) + M&A >€200M ROAD TO 2027 ≈20% + €20M Margin LOW CARBON
Slide 79: P&L Transformation Path 2024-2027: Operational Free Cash Flow Conversion
P&L TRANSFORMATION PATH: 2024-2027 UNDER NORMAL MARKET / MID-CYCLE CIRCUMSTANCES 3 ) O P E R AT I O N A L F R E E C A S H F L O W * C O N V E R S I O N GOAL 2027 ACTUAL BUSINESS Starting point 56% +12% STRATEGIC PLAN 50% 2025 >60% DONE MAINTAINING CONVERSATION RATIO > 60% THANKS TO INCREASE OF EBITD
Slide 80: Balance Sheet Transformation Path 2024-2027: Capex
BALANCE SHEET TRANSFORMATION PATH: 2024-2027 UNDER NORMAL MARKET / MID-CYCLE CIRCUMSTANCES 1) CAPEX AVERAGE MAINTENANCE CAPEX Current perimeter = €21M 2024-2027 AVERAGE TARGET €25-30M + LOW CARBON BUSINESS UNIT €10M ‘ONE – OFF’ €20M €120M CAPEX + GROWTH IN ADVANCED TECHNICAL SOLUTIONS €30M/YEAR + AB
Slide 81: Balance Sheet Transformation Path 2024-2027: Financial Debt
BALANCE SHEET TRANSFORMATION PATH: 2024-2027 UNDER NORMAL MARKET / MID-CYCLE CIRCUMSTANCES 2) FINANCIAL DEBT ACTUAL BUSINESS Starting point 2.5x NDF/EBITDA STRATEGIC PLAN 2x – 3x DONE 2025 NDF/EBITDA CURRENT FROM 2023 TO 2027 PERIMETER Expected evolution ≈2.5x <1x IN ANY SCENARIO OF STRATEGIC DEVELO
Slide 82: Balance Sheet Transformation Path 2024-2027: Gross Financial Debt Structure
BALANCE SHEET TRANSFORMATION PATH: 2024-2027 UNDER NORMAL MARKET / MID-CYCLE CIRCUMSTANCES 3 ) G R O S S F I N A N C I A L D E B T Q U A L I TAT I V E S T R U C T U R E ACTUAL BUSINESS TARGET 2027 Starting point NET WORKING CAPITAL / SALES 28% DONE ≤ 30% Strategic Plan 2025≤ 30% FINANCIAL COST / SAL
Slide 83: Shareholders' Value Creation
SHAREHOLDERS’ VALUE CREATION % APPRECIATION OF TUBACEX’S SHARE 2022 +33% % APPRECIATION OF TUBACEX’S SHARE YTD 2023 +48% AVERAGE TARGET PRICE (1) €4.5/SHARE (+50% CURRENT PRICE) POSITIVE RECOMMENDATIONS FROM ANALYSTS 100% COMMITTED PAY OUT RATIO 30%- 40% Illustrative example EBITDA 2027 €200M X 7X E
Slide 84: Main Financial Messages from CFO
MAIN FINANCIAL MESSAGES FROM CFO KEY DRIVERS: ROAD TO 2027 1 2 3 4 INCREASE IN SALES MARGIN IMPROVEMENT 2025 strategic targets Our starting point is = = exceeded without M&A unprecedented “solid activity ground” better markets prospects premium products just thanks to framework = + development agree
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Slide 86: Driving Tubacex's Transformation Success Story
DRIVING TUBACEX’S TRANSFORMATION SUCCESS STORY TOWARDS THE NEXT TRANSITION CAPITAL MARKETS DAY NOVEMBER 21st, 2023 CAPITAL MARKETS DAY // 86
Slide 87: Tubacex Conclusions
TUBACEX CONCLUSIONS CAPITAL MARKETS DAY NOVEMBER 21st, 2023 Jesús Esmorís CEO CAPITAL MARKETS DAY // 87
Slide 88: Be Part of the NT2: Reasons to Invest in Tubacex
BE PART OF THE NT2 NT2 2027 TARGETS REASONS TO INVEST IN TUBACEX DRIVING SUSTAINABLE VALUE AND TO REDUCE OIL MARKET & GAS LEADERS IN ENTERING INTO A NEW PHASE OF VALUE EXPOSURE TO 1/3 LOW CARBON CREATION FOR OUR SHAREHOLDERS OF THE BUSINESS BUSINESS ▪ A world leader in unique advanced industrial sol
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