Vallourec Sa · EURONEXT:VK
Vallourec Sa — Investor Presentation (March 2025)
35 slides from Vallourec Sa's investor presentation, March 2025
Slide 1: Investor Presentation
Investor Presentation March 2025
Slide 2: Legal Disclaimer
Legal Disclaimer Forward-Looking Statements This presentation includes 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”, “shoul
Slide 3: Investment Overview
Investment Overview ay vallourec
Slide 4: Vallourec's Strategic Journey
Vallourec’s Strategic Journey More profitable, more resilient, more cash generative Operational and Strategic Improvements Execution of the 2022 New Vallourec Plan Brazil Tubes performance enhancement Downsized and closed activities in Europe Repositioned China towards premium markets Mine Phase 1 a
Slide 5: Significantly Reshaped Production Footprint
Significantly Reshaped Production Footprint Changes resulting from the New Vallourec plan and subsequent Brazil optimization Rolling Capacity (kt) North America 850 Closed ~700kt of rolling capacity South America 800 and various finishing sites East Asia 280 Reduced rolling capacity by Europe 50 ~30
Slide 6: Brazil Performance Program
Brazil Performance Program Eliminating Complexity • Closure of 150kt legacy mill • 30% reduction in distinct products offered • Strict minimum order quantities Reducing Costs Increasing Throughput • Decreasing labor costs by 10-15% • Debottlenecking high-value equipment • Renegotiating raw materials
Slide 7: Vallourec's Capital Allocation Framework
Vallourec’s Capital Allocation Framework Maintain a Crisis-Proof Sustain and Expand Our Establish Our Shares as a Balance Sheet Premium Market Position High-Yielding Investment Vehicle • Retain substantial financial and • Ensure asset integrity with €100 – 125 • Distribute 80 – 100% of total cash st
Slide 8: Establishing Our Shares as a High-Yielding Investment Vehicle
Establishing Our Shares as a High-Yielding Investment Vehicle We aspire to be one of the most shareholder-friendly companies in our peer group Principles of Vallourec’s Shareholder Returns Significant Cash Flow Generation Euros per share • Returning 80 to 100% of total cash generation • Previous yea
Slide 9: Closing the Margin and Return Gap Versus Peers
Closing the Margin and Return Gap Versus Peers Progress since New Vallourec plan announcement in May 2022 Strong progress on margins but more to come Competitive ROIC following asset streamlining Trailing 12 Month Tubes EBITDA per Tonne (Peer vs. Vallourec, $) Trailing 12 Month Return on Invested Ca
Slide 10: Meaningfully Improved Balance Sheet
Meaningfully Improved Balance Sheet Debt Liquidity Net Debt (€ Million) € Million 1,493 1,877 1,130 1,000 868 741 1,714 570 485 364 1,590 1,539 1,561 224 240 1,498 186 1,498 1,391 190 181 177 197 1,203 228 550 (21) 185 462 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 462 462 189 462 550 312 550 2022 2023 2024 703
Slide 11: 2025 Operational Outlook
2025 Operational Outlook First Quarter 2025 Full Year 2025 Expect international shipments to increase in H2 Sales volumes to be down sequentially due to vs. H1 due to strong recent bookings lower international shipments Tubes EBITDA per tonne to further improve in H2 vs. EBITDA per tonne to be highe
Slide 12: Operations & Market Dynamics
2 Operations & Market Dynamics
Slide 13: Supplier of Mission-Critical Premium Seamless Tubular Solutions
Supplier of Mission-Critical Premium Seamless Tubular Solutions Focused on high-end seamless tubular solutions Highly demanding applications for our products Vallourec Focus Vertical Well Commercial Airline Section Cruising Altitude Up to 10,000 meters ~10,000 meters Welded Tubes Seamless Tubes Moun
Slide 14: The Seamless Tube Production Process
The Seamless Tube Production Process Heat Raw Material Sourcing Steelmaking Rolling Treatment Threading Externally sourced & recycled process scrap OCTG Only Scrap Metal Iron Ore Pelletizing Plant Pellets Cast Iron Lumber Kiln Charcoal Blast Furnace Conversion of scrap Piercing and Heating and cooli
Slide 15: Key Seamless Tubes Markets
Key Seamless Tubes Markets Oil Country Project Line Pipe Industry New Tubular Goods (PLP) and Energies (OCTG) and Process Other 2024E Total Market Size (mt) 12.0 4.1 Not Analyzed High-Growth 2024E Served Market Size (mt) 5.7 1.0 0.4 Emerging Market % of 2024 Vallourec Volumes ~70% ~15% <15% Automoti
Slide 16: Limited Set of Premium Seamless Tube Suppliers
Limited Set of Premium Seamless Tube Suppliers Tier 1 Global Suppliers ~6 million tonnes annual production Suppliers Unable to Access Global Premium Market Regional Western Suppliers Asia and CIS Suppliers ~2.5 million tonnes annual production >10 million tonnes annual production Note: reflects prod
Slide 17: Major Seamless OCTG Markets
Major Seamless OCTG Markets 2024 Market Size (Million Tonnes) CIS North America 2.6 Europe 0.4 3.7 China 2.8 1.3 Africa 0.4 Asia Pacific Middle East 0.5 Ex-China 0.4 South America Dominant Connection Technology Proprietary API Sources: Internal market intelligence based on public peer commentary, Ry
Slide 18: Technology Unlocks High-Value Markets
Technology Unlocks High-Value Markets Gaining access to value-added markets Advanced technology drives higher added value • Value over Volume strategy emphasizes participation Market Price ($/tonne) in markets where we are well-positioned due to: 8,000 • Technology 7,000 • Geography or trade 6,000 •
Slide 19: Sustaining and Expanding our Premium Market Position
Sustaining and Expanding our Premium Market Position Expanding our capabilities to produce differentiated products with significant value creation potential Expanding high-torque capabilities Growing CLEANWELL® in OCTG Enhancing PLP coating offering Investing to support customer demands for Investin
Slide 20: Steady Recovery in US OCTG Market Prices
Steady Recovery in US OCTG Market Prices Rig count stable since mid-2024 Imports remain suppressed Spot prices continue to increase US Horizontal Rig Count Monthly OCTG Imports (Thousand Tonnes) Seamless OCTG Price ($ / Tonne) Oil Gas All Others Major Welded Importers 2,567 2,514 800 350 2,405 2,263
Slide 21: US Tariffs Likely to Impact Market Dynamics
US Tariffs Likely to Impact Market Dynamics Welded Imports Seamless Imports Key Impacts of New Policy Annual Imports (Thousand Tonnes) Annual Imports (Thousand Tonnes) • What’s changed? Austria Thailand Canada • Blanket 25% tariff for all steel Korea Taiwan Canada Other product imports, with all neg
Slide 22: Vallourec's Bookings Outperforming International Market Indicators
Vallourec’s Bookings Outperforming International Market Indicators Global activity levels remain broadly stable International market pricing remains healthy Onshore Rig Count Offshore Rig Count Seamless OCTG Price ($ / Tonne) Onshore (L Axis) Offshore (R Axis) Middle East North Sea 800 550 3,000 2,8
Slide 23: Tubes Revenue Mix by Quarter
Tubes Revenue Mix by Quarter Revenues balanced across core regions Increased focus on higher-value oil & gas markets % of Tubes Revenues and Absolute Revenues (€ millions) % of Tubes Revenues and Absolute Revenues (€ millions) North America South America Middle East Rest of World Oil & Gas and Petro
Slide 24: Significant Growth Potential in Our New Energies Business
Significant Growth Potential in Our New Energies Business Carbon Capture, Utilization and Geothermal Hydrogen Storage (“CCUS”) Primary Tubes Casing for Casing and tubing for CO2 injection wells; H2 storage systems; transportation Application geothermal wells transportation line pipes line pipes Heat
Slide 25: Delphy Vertical H2 Storage: Superior Intermediate Scale Solution
Delphy Vertical H2 Storage: Superior Intermediate Scale Solution Competition has higher costs or other drawbacks Delphy is a superior-cost solution in its target range € / kgH2 Delivered Solution Capex Opex Other Factors 3.0 Low-pressure Not scalable 2.5 gaseous High-pressure Higher safety risk 2.0
Slide 26: Midcycle Cash Flow Simulation: Significant Potential Returns
Midcycle Cash Flow Simulation: Significant Potential Returns Metric Assumption EBITDA (€) Tubes €750m Mine & Forest €125m Holding & Other, Intersegment (€25m) Group EBITDA €850m Cash Flows (€) Capital expenditures €175m Financial cash out €50m Cash tax €175m Group total cash generation €450m Total c
Slide 27: Financial Data
Financial Data Y vallourec
Slide 28: Summary Income Statement
Summary Income Statement € million, unless noted 2019 2020 2021 2022 1Q23 2Q23 3Q23 4Q23 2023 1Q24 2Q24 3Q24 4Q24 2024 Revenues 4,173 3,242 3,442 4,883 1,338 1,358 1,142 1,276 5,114 990 1,085 894 1,065 4,034 Cost of sales (3,435) (2,634) (2,605) (3,807) (926) (890) (818) (886) (3,520) (669) (774) (6
Slide 29: Summary Balance Sheet
Summary Balance Sheet € million, unless noted 2019 2020 2021 2022 1Q23 2Q23 3Q23 4Q23 2023 1Q24 2Q24 3Q24 4Q24 2024 Goodw ill & intangible assets 427 74 83 76 89 89 87 82 82 80 73 69 67 67 PP&E and biological assets 2,705 1,748 1,790 1,891 1,871 1,923 1,960 2,050 2,050 2,040 1,944 1,869 1,903 1,903
Slide 30: Summary Cash Flow Statement
Summary Cash Flow Statement € million, unless noted 2019 2020 2021 2022 1Q23 2Q23 3Q23 4Q23 2023 1Q24 2Q24 3Q24 4Q24 2024 EBITDA 347 258 492 715 320 374 222 280 1,196 235 215 168 214 832 Non-cash items in EBITDA (22) 1 (37) (68) 13 (21) 11 (1) 2 10 – (14) (5) (9) Financial cash out (234) (232) (228)
Slide 31: Segment Key Performance Indicators
Segment Key Performance Indicators € million, unless noted 2021 2022 1Q23 2Q23 3Q23 4Q23 2023 1Q24 2Q24 3Q24 4Q24 2024 Volume sold* 1,640 1,804 431 396 343 382 1,552 292 351 292 362 1,297 Revenue (€m) 3,030 4,663 1,258 1,279 1,068 1,196 4,802 932 1,030 842 981 3,786 Tubes Average Selling Price (€) 1
Slide 32: Definitions of Non-GAAP Financial Data and Concepts
Definitions of Non-GAAP Financial Data and Concepts Adjusted free cash flow is defined as adjusted operating cash flow +/- change in operating working capital and gross capital expenditures. It corresponds to net cash used in operating activities less restructuring and non-recurring items +/- gross
Slide 33: Definitions of Non-GAAP Financial Data and Concepts
Definitions of Non-GAAP Financial Data and Concepts Gross capital expenditure: gross capital expenditure is defined as the sum of cash outflows for acquisitions of property, plant and equipment and intangible assets and cash outflows for acquisitions of biological assets. (Increase) decrease in net
Slide 34: Definitions of Non-GAAP Financial Data and Concepts
Definitions of Non-GAAP Financial Data and Concepts Non-cash adjustments to net debt includes non-cash foreign exchange impacts on debt balances, IFRS-defined fair value adjustments on debt balances, and other non-cash items. Non-cash items in EBITDA includes provisions and other non-cash items in E
Slide 35: Share Information and Financial Calendar
Share Information and Financial Calendar Share Information Financial Calendar Euronext Paris • May 15, 2025: Publication of First Quarter ISIN code: FR0013506730 2025 Results Ticker: VK • May 22, 2025: Annual General Meeting • May 26, 2025: Target Ex-Dividend Date USA: American Depositary Receipt (A