Slide 1: Q1 2022 Results Investor presentation
Q1 2022 Results Investor presentation May 19, 2022 18 May, 2022 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: The New Management Team for a "New Vallourec"
THE NEW MANAGEMENT TEAM FOR A “NEW VALLOUREC” Philippe Guillemot Sascha Bibert ► Chairman and Chief Executive Officer ► Chief Financial Officer ► Joined March 2022 ► Joined April 2022 ► Strong Industry and ► Energy and capital markets transformation background background ► Prior positions included C
Slide 4: FY 2022 EBITDA Now Expected to Be Significantly Above 2021
FY 2022 EBITDA NOW EXPECTED TO BE SIGNIFICANTLY ABOVE 2021 ~€130m ► 395 kt shipped, up 10% year-over- year ► €916 million revenue, a 30% year-over-year led by North America €80m Q1 2022 results in ► €45m reported EBITDA negatively impacted by the iron ore mine shutdown; line with normalized level of
Slide 5: Create a "New Vallourec"
CREATE A “NEW VALLOUREC” Initial CEO observations New dynamic ► Strongholds ► Accelerate strategy execution ► Deep customer relationships ► Lower fixed costs and substantially lower break-even point ► Global reach with market leading products ► Invest into energy transition ► Strong engineering cult
Slide 6: Looking Ahead for a New Vallourec
LOOKING AHEAD FOR A NEW VALLOUREC 6
Slide 7: Pursue Footprint Reshaping
1 PURSUE FOOTPRINT RESHAPING ► Launch closure process of German sites* • No credible buyer found during disposal process » Closure process spread over the next 2 years, aligned with the timeline to transfer to volumes to Brazil » 685kt reduction in less competitive rolling capacity Germany » Land an
Slide 8: Streamline Corporate Structure to Better Manage a Reshaped Industrial Footprint
2 STREAMLINE CORPORATE STRUCTURE TO BETTER MANAGE A RESHAPED INDUSTRIAL FOOTPRINT AND A LEANER ORGANIZATION NEAR TERM INITIATIVES OUTCOME • Moving main manufacturing base to Americas ► Streamlined global overhead in line with • Leaner organization in all regions, North America, South America and Eas
Slide 9: Decisions Yield Clear Benefits for All Stakeholders
DECISIONS YIELD CLEAR BENEFITS FOR ALL STAKEHOLDERS Closure of German assets, transfer of O&G activities to Brazil and rationalization of other European assets 1 +€130m 2,400 Recurring EBITDA increase (30)% Headcount reduction* (+€20m Capex reduction) Reduced CO2 content of tubes produced in Brazil
Slide 10: Preparing the Future Low-Carbon Economy
PREPARING THE FUTURE LOW-CARBON ECONOMY A committed player with clear roadmap Accelerate and develop new profitable business opportunities ► Appointment of Ulrika Wising - Senior VP Energy Transition ► Energy transition & corporate development background ► Prior positions included VP Shell Renewable
Slide 11: Supportive Market Environment
SUPPORTIVE MARKET ENVIRONMENT 11
Slide 12: Favorable E&P Fundamentals
FAVORABLE E&P FUNDAMENTALS Historic E&P Capex (in $bn) Projected E&P Capex (in $bn) $173bn increase in aggregate projected Capex between March 2021 and March 2022 forecasts 700 510 520 481 485 467 482 450 441 457 446 410 404 348 365 300 2014 2015 2016 2017 2018 2019 2020 2021 2022 2022 2023 2023 202
Slide 13: Increased Drilling and Higher OCTG Prices
INCREASED DRILLING AND HIGHER OCTG PRICES Global Rig Count OCTG Price Evolution Increase from COVID Trough +134% +48% +52% 3 578 $2 981 2 337 2 211 2 177 $2 000 2 029 1 654 $1 654 $1 631 1 593 $1 400 1 352 1 361 $1 290 $1 350 $1 052 $920 2014 2015 2016 2017 2018 2019 2020 2021 Current Pipelogix - OC
Slide 14: Q1 2022 Results
Q1 2022 RESULTS Y vallourec 14
Slide 15: Q1 2022 Key Figures
Q1 2022 KEY FIGURES VOLUMES (kt) REVENUE (€m) +10.3% +30.5% EBITDA (€m) FREE CASH FLOW (€m) ~130 Q1 2021 Q1 2022 (15) (13) 80 (47) WC 45 (62) (217) WC Q1 2021 Q1 2022 Q1 2022 normalized* (230) Q1 EBITDA in line with expectations, weakened by shut-down of mine Significant increase in working capital
Slide 16: Q1 2022 Financial Highlights
Q1 2022 FINANCIAL HIGHLIGHTS ► EBITDA at €45m, margin 4.9% Q1 2021 – Q1 2022 Revenue bridge (€m) • €129m Industrial margin, or 14.1% of revenue » Positive contribution on volume and pricing due to strength of the 152 (61) 916 Oil & Gas market in North America 59 64 » Negative impact from iron ore mi
Slide 17: Cash Flow
CASH FLOW Q1 2022 EBITDA to FCF bridge (€m) 19 64 (4) (21) 45 (18) 21 (217) (196) (34) (230) Q1 2022 EBITDA Provisions and Cash EBITDA Interest payments Tax payments Other (incl Operating cash Change in WCR* Operating cash Capex Free Cash Flow other non-cash restructuring flow before flow elements c
Slide 18: Net Debt and Liquidity
NET DEBT AND LIQUIDITY €m Net Debt Net Debt as of as of Dec 31st 2021 March 31st 2022 ► Liquidity position of €855m: • Cash amounting to €393m • Undrawn committed Free Cash Revolving Credit Flow Asset Facility of €462m disposals & other items (958) (230) (25) (1,213) Solid balance sheet and strong l
Slide 19: Outlook 2022
OUTLOOK 2022 Y vallourec 19
Slide 20: 2022 Outlook & Assumptions
2022 OUTLOOK & ASSUMPTIONS Outlook NORTH AMERICA ► Very favorable market conditions should continue and even improve in H2 2022, in both price and volume terms EUROPE-AFRICA & MIDDLE EAST- ASIA ► Oil & Gas: volumes expected to significantly recover from Q2 onward; cost increases to be passed on to c
Slide 21: 2022 EBITDA Outlook
2022 EBITDA OUTLOOK 2022 EBITDA significantly above 2021 (€m) Significantly above 2021 492 258 FY 2020 FY 2021 FY 2022 EBITDA expected to increase significantly in coming quarters, weighted towards H2 21
Slide 22: Appendices
APPENDICES Y vallourec 22
Slide 23: Q1 2022 P&L
Q1 2022 P&L In € million Q1 2022 Q1 2021 Change Revenue 916 702 30.5% Cost of sales (787) (534) 47.4% Industrial Margin 129 168 (23.2)% (as a % of revenue) 14.1% 23.9% (9.8)p.p. Sales, general and administrative costs (85) (77) 10.4% (as a % of revenue), Group share (9.3)% (11.0)% (1.7)p.p. Other 1
Slide 24: Revenue Breakdown – Q1 2022
REVENUE BREAKDOWN – Q1 2022 REVENUE BY REGION As % of As % of In € million Q1 2022 Q1 2021 Change revenue revenue Europe 142 15.6% 113 16.1% 25.9% North America (Nafta) 346 37.8% 115 16.4% 200.0% South America 207 22.5% 226 32.2% (8.6)% Asia and Middle East 178 19.4% 198 28.2% (10.1)% Rest of the wo
Slide 25: Balance Sheet as at March 31st, 2022
BALANCE SHEET AS AT MARCH 31ST, 2022 In € million Assets 03/31/2022 12/31/2021 Liabilities 03/31/2022 12/31/2021 Equity - Group share * 1,990 1,763 Non-controlling interests 47 45 Net intangible assets 44 45 Total equity 2,037 1,808 Goodwill 44 38 Shareholder loan - - Net property, plant and equipme
Slide 26: Gross Indebtedness
GROSS INDEBTEDNESS In € million 03/31/2022 Bond issue – maturing in June 2026 1,157 PGE 214 RCF drawing - ACC ACE 170 Other 65 TOTAL GROSS FINANCIAL INDEBTEDNESS 1,606 26
Slide 27: Investor Relations Contact and Financial Calendar
► Financial calendar: ► Euronext Paris: ISIN code: FR0013506730, • May 24, 2022 - Ordinary and Extraordinary Ticker: VK Shareholders’ Meeting USA: American Depositary Receipt (ADR) - ISIN • July 27, 2022 - Publication of Q2 and H1 2022 results code: US92023R4074, Ticker: VLOWY • November 21, 2022 –