Investor Presentation. November 2017

Transcription

1 Investor Presentation As of November 21, 2017

2 Forward-Looking Statements This presentation contains certain forward-looking statements and information relating to S.A. and its subsidiaries (collectively, ) that are based on the current beliefs of its management as well as assumptions made by and information currently available to. Such statements reflect the current views of with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause the actual results, performance or achievements of to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic, political conditions in the countries in which does business or other countries which have an impact on s business activities and investments, changes in interest rates, changes in inflation rates, changes in exchange rates, the degree of growth and the number of consumers in the markets in which operates and sells its products, changes in steel demand and prices, changes in raw material and energy prices or difficulties in acquiring raw materials or energy supply cut-offs, changes in business strategy and various other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or targeted. does not intend, and does not assume any obligation, to update these forward-looking statements. 2

3 Profile and Performance Investor Presentation 3

4 s Profile A leading steel company in Latin America Net sales of USD 7.2 billion in 2016 Crude steel capacity of 12.3 million tons Industrial facilities in Mexico, Argentina, Brazil, Colombia, USA and Central America Vertically integrated, from iron ore mines to service centers Focus on high value-added products Participation in Usiminas 1 control group Steel Shipments 2 9M 2017 Other Markets 17% Mexico 61% 1 Usiminas: a leading company in the Brazilian flat steel market Southern Region 22% 2 Brasil (ex-csa) started consolidating in September

5 s Profile Consistently superior results Focus on high margin value-added products Flexible production configuration Diversified cost structure Upstream and downstream integration 15% 14% Average 6% EBITDA Margin (% of net sales) 21% 21% 17% 17% 14% 14% 8% Best practices Broad distribution network Recruitment and retention of talent M17 Peers range 1 1 Long steel Americas, global player, U.S. minimill and U.S. integrated (Source: Bloomberg) Innovative culture, industrial expertise and long-term view 5

6 Performance Sustainable growth and resilient profitability Steel shipments (million tons) Mexico Southern Region Other Markets EBITDA (USD million) 1,287 1,487 1,471 1,073 1, Free cash flow (USD million) Capital Expenditures (USD million) ,

7 Performance Solid financial position Strong balance sheet Net debt to EBITDA ratio of 1.5x as of September 2017 Net debt and net debt to EBITDA ratio 2 (USD billion) 2.7 USD1.5 billion five-year syndicated term loan facility to finance CSA acquisition in September x 1.2x 1.1x 0.6x 1.5x Sep-17 Growing dividend payments Annual dividends USD1 per ADS in 2016, 54% increase in last 5 years 5% dividend yield in (USD per ADS) Dividend yield: Dividend paid / Average stock price (Source: Bloomberg) Last 12 months EBITDA 7

8 Performance Quarterly EBITDA and net income EBITDA EBITDA Margin 502 (USD million) % (% of net sales) % 23% 22% 19% 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 EBITDA per ton 1 Net Income and Earnings per ADS 214 (USD) Net Income (Loss) (USD million) 1.33 Earnings (Losses) per ADS Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 1 Consolidated EBITDA divided by steel shipments. 8

9 Performance Continuous focus on profitability Breakthrough initiatives to increase differentiation and reduce costs Customer integration Labor productivity Exiros Working capital optimization Logistics management Contractors management Energy efficiency Continuous improvement 9

10 A Level Playing Field World dealing with unfair trade Cases against steel unfair trade grew strongly in the last decade China is the main target of unfair trade cases in more than 20 countries World reacted against unfair Chinese steel trade conditions Claims initiated against China for unfair steel trade in the world (# per year) Standing duties for Chinese steel imports in U.S. and Mexico Hot-rolled Cold-rolled Corrosionresistant U.S. Mexico U.S. Mexico U.S. Mexico Note: AD: anti-dumping; CV: countervailing up to 91% AD up to USD355/ton AD 256% CV 266% AD up to 103% AD 210% AD up to 241% CV up to 76% AD 10

11 Latin American Steel Markets Investor Presentation 11

12 Latin American Steel Markets Mexico became the largest steel market in the region Mexico, Brazil, Argentina and Colombia account for approximately 80% of Latin America s steel consumption Mexico s steel consumption CAGR of 2.9% in the last decade, among the highest in the region, driven by a dynamic manufacturing industry Apparent steel use (million tons) Brasil Mexico 26.8 Argentina Colombia f f Source: Canacero, Aço Brasil, Cámara Argentina del Acero, ANDI 12

13 Mexico Investor Presentation 13

14 s Markets - Mexico Shipments to industrial customers growing consistently Most attractive steel market in Latin America 46% increase in flat steel consumption since 2011 Opportunity to substitute imports of high-end products Apparent flat steel use Mexico (million tons) Local 11.5 Imports Industrial market increasing relevance 55% 58% Strong measures to promote fair trade in the NAFTA region 33 cases against 35 countries mainly against China China with dumping cases in most of the steel products Renewal of 15% import tariff in Mexico (for countries with no trade agreements) f Apparent flat steel use Mexico (% share) Industrial Commercial 44% 42% 41% 38% 56% 58% 59% 62% f Source: Alacero / estimates 14

15 s Markets - Mexico Strong industrial steel demand Light vehicle production expected to continue growing Production up 10% YTD, to reach 3.9 million units in 2017 New OEM capacity starting up during Light vehicle production (million units) Production expected to reach 4.2 million units by 2020 Home appliance and electrical equipment industries growing 3% YTD Construction activity up 3% YTD Private activity offsetting decrease in government investment Infrastructure investment expected to improve in f Source: AMIA/IHS Private Government f Source: INEGI Construction spending (billion of constant MXN) 15

16 s Markets - Mexico Strong growth of s shipments outpacing Mexican steel consumption growth through import substitution 500,000-ton shipment increase in 2016 Volume growth higher in the automotive and home-appliance industries Broader product range enabled by upgrading of re-rolling facility Differentiation in the commercial market through value-added products and services Increasing customer digital connectivity steel shipments in Mexico (million tons) +8% Industrial Commercial % 40% s shipments growth in 2016 (year-over-year % change) 20% 50% 50% Nationwide coverage through regional distributors and distributors centers 11% 4% 3% Automotive Home appliance Construction Other sectors 16

17 Southern Region - Argentina Investor Presentation 17

18 s Markets - Argentina Recovery in 2017 and positive outlook for 2018 Economic reforms to improve Argentina s performance in following years: GDP ASU % -18.6% Apparent flat steel use Argentina (million tons) % % % % +12.5% % +10.0% Source: BCRA REM Oct f 2018f Source: Alacero / estimates Economy gaining momentum driven by: Agriculture Construction Non-conventional oil & gas Gradually improving: household appliance and automotive industries 18

19 s Markets - Argentina Activity recovering in 2017 and positive outlook for 2018 Higher agro production and investment Production: +14% in 16/ 17 season Bright spots: sales of agro machinery and pick-up trucks Government infrastructure investments driving construction activity Agro equipment sales (thousand units) Implements Seeders Tractors Harvesters % Vaca Muerta: shale oil & gas drilling increasing in 2H M16 9M17 Government price stimulus Restructured labor agreements USD7 billion recently announced investments in next 3 years Government investment estimates: USD14 billion in 2017/18; USD15-20 billion per year from Cement shipments (million tons) % f Source: INDEC and AFCP 19

20 Steel Market Trends Investor Presentation 20

21 Steel Market Trends US steel market Steel price (hot rolled coils) Scrap price (shredded USA Midwest) 800 Europe domestic (USD/ton) US domestic (USD/ton) 450 USD/long ton Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Oct Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Oct 17 US steel imports Million tons Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 US service center inventory Million tons Months of supply Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Oct 17 Source: Metal Bulletin / Steel Business Briefing / MSCI / US Census Bureau / 21

22 Steel Market Trends Input costs Iron ore price (IODEX CFR China) Slab price (FOB Black Sea) 105 USD/ton 600 USD/ton Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Hard met coal price (FOB Australia) USD/ton Natural gas price (Henry Hub) USD/MMBtu Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Source: Metal Bulletin / Steel Business Briefing / Bloomberg 22

23 Developing s industrial system Investor Presentation 23

24 CSA Acquisition Strong foundation to continue growing New 5 mtpy high-end slab facility in Brazil Integrate CSA into to take it to its full potential Increase competitiveness in the high-end Mexican steel market vis-à-vis imports Improve customer service supported by higher operational flexibility Customized steel products Coordinated product development Enhanced logistics Realize cost reduction opportunities in CSA Coordinated procurement effort (Exiros) IT integration Inventory optimization Benchmarking 24

25 New Hot Rolling Mill at Pesquería Industrial Center A logical step after the addition of CSA Significant technological upgrade to expand TX s product range in Mexico with a broader dimensional offering and the most advanced steel grades Aimed at replacing high value-added steel imports, improving customer service and reducing lead-times in the value chain Targeting the demanding and innovative automotive industry, as well as the home appliance, machinery, energy and construction sectors Annual production capacity of 3.7 million tons (option to increase capacity by 1.1 million tons with small additional investment) Expected start up in second half of 2020 Total investment of USD1.1 billion 25

26 New Coating Lines at Pesquería Industrial Center Opportunity to grow in the high-end Mexican market New hot-dipped galvanizing and painting lines High-end value-added products for the home-appliance, heating-ventilation-air conditioning (HVAC) and automotive industries Most advanced painting technology in Mexico Annual production capacity: Galvanizing: 300,000 tons Painting: 120,000 tons Expected start up: Galvanizing: 2H 2019 Painting: 1H 2019 Total investment of USD260 million 26

27 New Reinforcing Bar Production Facility in Colombia Expanding TX s share in the country s construction sector Colombian long steel market growing significantly over the last years Fourth largest steel market in Latin America Targeting the dynamic construction sector to expand market share by substituting imports Investment to enable upstream integration by replacing purchases of reinforcing bars from third parties Apparent steel use Colombia (million tons) % Annual production capacity of 520,000 tons Expected start up in second half of 2019 Total investment of USD90 million 27

28 Conclusion Investor Presentation 28

29 Conclusion Opportunities for in the next five years Strategic agenda Next five years Expansion in Mexico Increase in high-end product offering Operational excellence Develop market value potential relative to peers Continue growing in the Mexican market Capitalize on the integration of CSA into s industrial system Continue development of new high-end steel products Intensive use of IT/IS to achieve breakthroughs in operational excellence 29

30 Conclusion Consistently superior results in attractive steel markets in Latin America Solid financial position and strong dividend payments Successful implementation of business strategy geared toward sustainable profitable growth CSA acquisition as an opportunity to grow and strengthen business in the region Continued focus on generating longterm shareholder value 30

31 31

32 Appendix Corporate Structure Production Capacity CSA Acquisition Shipments and Net Sales Income Statement Cash Flow Statement Balance Sheet Webcast Presentation Third Quarter and First Nine Months of

33 Corporate Structure Techint Group: 62% Tenaris: 11% (treasury shares): 2% Public: 24% Subsidiaries Joint operations Non-consolidated companies 71% 61% México 29% Siderar 39% Other 100% Las Encinas 50% Peña Colorada 50% CEU: 5% 6% 1 1 ArcelorMittal 28% 1 Nippon Steel & Sumitomo Metal: 32% Usiminas 1 TenarisConfab: 5% 1 100% Other (ordinary shares): 23% 1 Economic participation Brasil 4 Direct Indirect 3 Total 51% 49% Tenigal Nippon Steel & Mexico 71% 17% 89% Sumitomo Metal Siderar 61% 61% 100% Colombia Brasil 4 100% 100% 100% USA 100% Guatemala 48% Techgen 30% Tecpetrol 22% 50% 50% Exiros Usiminas 2 17% 2% 19% Tenigal 51% 51% Colombia 100% 100% TX Guatemala 100% 100% TX USA 100% 100% Las Encinas 71% 17% 89% Peña Colorada 36% 9% 45% 1 Participation based on ordinary shares distributed 2 Tenaris Participation based on total shares distributed 3 Net of non-controlling interest in Siderar 4 Formerly known as CSA 33

34 Production Capacity Production Capacity (*) (million metric tons per year) (1) Mexico Argentina Other Total Slabs (2) 10.6 Billets Crude steel Coils Rebars & wire rods Hot rolled Cold rolled coils Tinplated products Galvanized products Pre-painted products Service center (1) Brazil, Southern US, Colombia and Central America (2) Corresponds to Brasil (ex-csa) (*) As of year-end

35 CSA Acquisition The Transaction On Sep 7, 2017 acquired thyssenkrupp Slab International B.V. (tksi) and its wholly-owned subsidiary CSA Siderúrgica do Atlântico Ltda. from thyssenkrupp AG (tkag) In addition, tkag assigned to a 2.0 million tons per year agreement to supply slabs to thyssenkrupp s former Calvert re-rolling facility in the U.S. disbursed EUR1.4 billion on a cash-free, debt-free basis, for the acquisition of both the tksi shares and the slab supply agreement The transaction was financed with a five-year syndicated term loan facility in a principal amount of USD1.5 billion began consolidating tksi s balance sheet and results of operations in its consolidated financial statements in September 2017 Upon closing, CSA name was changed to Brasil 35

36 CSA Acquisition The Assets CSA is a Brazilian state-of-the-art steel slab producer 5 mtpy capacity of high-grade steel slabs 490 MW combined cycle power plant Deep-water harbor Compact, efficient and environmentally friendly facility Just-in-time iron ore supply (railroad) Daniel Novegil, s CEO said: This acquisition brings another state-of-the-art facility into s industrial system, along with CSA s highly-skilled personnel and know-how, thereby enhancing our differentiation and value-added capabilities in the steel production supply chain. Upon integration, customers will not only benefit from our expanded high-end steel slabs capacity, but also see the results of an enhanced product development and supply chain management effort that will increase our high-end steel specialization in Mexico and Argentina. We move forward as a strengthened organization across our strategic industrial sectors in Latin America. 36

37 Shipments and Net Sales Third Quarter 2017 and First Nine Months of 2017 Net Sales (million USD) Shipments (thousand tons) Revenue/ton (USD/ton) 3Q Q 2016 Dif. 3Q Q 2016 Dif. 3Q Q 2016 Dif. Mexico 1, , % 1, , % % Southern Region % % % Other Markets % % % Total steel products 2, , % 3, , % % Other products (1) % Total steel segment 2, , % Total mining segment % % % Intersegment eliminations (84.3) (57.5) Total steel and mining segments 2, , % Net Sales (million USD) Shipments (thousand tons) Revenue/ton (USD/ton) 9M M 2016 Dif. 9M M 2016 Dif. 9M M 2016 Dif. Mexico 4, , % 5, , % % Southern Region 1, , % 1, , % % Other Markets % 1, % % Total steel products 6, , % 8, , % % Other products (1) % Total steel segment 6, , % Total mining segment % 2, , % % Intersegment eliminations (202.4) (148.7) Total steel and mining segments 6, , % (1 ) A s of 3 Q 1 7, the item "O ther produc ts " primarily inc ludes the s ale of energy in T ernium Bras il. 37

38 Shipments and Net Sales Full Year 2016 and Dif Dif Dif Mexico 4, , % 6, , % % Southern Region 1, , % 2, , % 840 1,006-16% Other Markets % 1, , % % Total steel products 7, , % 9, , % % Other products (1) % Total steel segment 7, , % Total mining segment % 3, , % % Intersegment eliminations (202.7) (200.8) 1% Total steel and mining segments 7, , % (1 ) The item "O ther products " primarily includes the sale of energy in Brasil Net Sales (million USD) Shipments (thousand tons) Revenue/ton (USD/ton) 38

39 Income Statement USD million 3Q Q M M (Unaudited) (Unaudited) (Unaudited) Net sales 2, , , , , ,877.4 Cost of sales (1,917.0) (1,291.3) (5,081.6) (3,967.8) (5,384.4) (6,477.3) Gross profit , , , ,400.2 Selling, general and administrative expenses (211.2) (168.4) (572.6) (512.5) (687.9) (770.3) Other operating (expenses) income, net (1.5) 2.8 (21.3) 0.9 (9.9) 9.5 Operating income , , Finance expense (29.2) (28.7) (74.7) (65.3) (90.0) (89.5) Finance income Other financial (expenses) income, net (4.8) 13.2 (75.5) (17.9) Equity in earnings of non-consolidated companies (272.8) Bargain purchase on acquisition of business Profit before income tax expense , , Income tax expense (103.8) (123.4) (198.2) (306.7) (411.5) (207.3) Profit for the period Attributable to: Owners of the parent Non-controlling interest Profit for the period

40 Cash Flow Statement USD million 3Q Q M M (Unaudited) (Unaudited) Profit for the period Adjustments for: Depreciation and amortization Equity in earnings of non-consolidated companies (15.5) (0.8) (52.1) (8.1) (14.6) Changes in provisions 0.6 (0.8) Net foreign exchange results and others 9.5 (10.7) (10.2) (33.9) 61.5 Interest accruals less payments Income tax accruals less payments (7.4) 73.6 (317.0) (23.9) Results on the sale of participation in subsidiary company Changes in working capital (96.8) (210.1) (555.3) (163.0) (162.4) Net cash provided by operating activities , ,323.5 Capital expenditures (100.4) (104.9) (282.9) (335.0) (435.5) (466.6) Proceeds from the sale of property, plant and equipment Sale of participation in subsidiary company, net of cash disposed (0.7) Investment in consolidated companies Purchase consideration (1,891.0) - (1,891.0) Cash acquired Investment in non-consolidated companies - Usiminas/Techgen (114.4) (114.4) (9.6) Dividends received from non-consolidated companies Loans to non-consolidated companies - (25.2) (23.9) (77.2) (92.5) (10.4) (Increase) Decrease in Other Investments (1.3) 6.4 (9.5) (85.9) Net cash used in investing activities (1,714.1) (123.4) (1,928.3) (485.3) (554.7) (572.1) Dividends paid in cash to company's shareholders - - (196.3) (176.7) (176.7) (176.7) Dividends paid in cash to non-controlling interest - - (30.6) (50.8) (50.8) (32.7) Acquisition of non-controlling interest (74.0) Contributions from non-controlling shareholders in consolidated subsidiaries Finance Lease payments - - (1.1) Proceeds from borrowings 1, , Repayments of borrowings (279.0) (308.4) (806.3) (900.9) (1,191.8) (1,379.7) Net cash (used in) provided by financing activities 1,674.8 (125.4) 1,778.0 (334.9) (508.7) (809.6) Increase (decrease) in cash and cash equivalents (28.4) (58.2) 40

41 Balance Sheet USD million September 30, 2017 December 31, 2016 USD million September 30, 2017 December 31, 2016 Property, plant and equipment, net 5, ,136.0 Intangible assets, net 1, Investments in non-consolidated companies Deferred tax assets Receivables, net Trade receivables, net Other investments Total non-current assets 7, ,622.6 Receivables Derivative financial instruments Inventories, net 2, ,647.9 Trade receivables, net 1, Other investments Cash and cash equivalents Total current assets 4, ,690.1 Non-current assets classified as held for sale Total assets 11, ,322.9 Capital and reserves attributable to the owners of the parent 4, ,391.3 Non-controlling interest Total Equity 5, ,166.6 Provisions Deferred tax liabilities Other liabilities Trade payables Financial Lease Liabilities Borrowings 1, Total non-current liabilities 2, ,324.8 Current income tax liabilities Other liabilities Trade payables Derivative financial instruments Financial Lease Liabilities Borrowings 1, Total current liabilities 2, ,831.5 Total liabilities 5, ,156.3 Total equity and liabilities 11, ,

42 3Q17 Results Webcast Presentation Consolidated Net Sales Net Sales Steel Shipments 1,856 1,850 (USD million) 2,040 2,263 10% 2,480 (thousand tons) 2,475 2,348 2,378 2,641 16% 3, Q16 4Q16 1Q17 2Q17 3Q Revenue per ton (USD/ton) 855-6% 802 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 Mexico 53% Steel Shipments 3Q17 Other Markets 25% Southern Region 1 22% 1 Southern Region encompasses the steel markets of Argentina, Bolivia, Chile, Paraguay and Uruguay. 42

43 3Q17 Results Webcast Presentation Mexico Net Sales 1,173 1,128 Net Sales (USD million) 1,300 1,424-5% 1,349 Steel Shipments (thousand tons) 1,663 1,720 1,529 1,525-6% 1,625 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q Revenue per ton (USD/ton) Q16 4Q16 1Q17 2Q17 3Q17 43

44 3Q17 Results Webcast Presentation Southern Region Net Sales Net Sales Steel Shipments 452 (USD million) % (thousand tons) % 666 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 1, Revenue per ton (USD/ton) 940 3Q16 4Q16 1Q17 2Q17 3Q

45 3Q17 Results Webcast Presentation Other Markets Net Sales Net Sales (USD million) Steel Shipments (thousand tons) 83% % Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q Revenue per ton (USD/ton) % 3Q16 4Q16 1Q17 2Q17 3Q

46 USD Million 3Q17 Results Webcast Presentation EBITDA (163) EBITDA 2Q17 Shipments Price/Mix Cost Other EBITDA 3Q17 46

47 USD Million First 9M 2017 Results Webcast Presentation EBITDA 2, ,000 1,800 1,600 1, (749) (14) 1,200 1, ,198 EBITDA 9M16 1,429 Shipments Price/Mix Cost Other EBITDA 9M17 47

48 USD Million 3Q17 Results Webcast Presentation Net Results (43) (45) Net Income 2Q17 Operating Income Net Financial Results Equity in Earnings of nonconsolidated companies Income Tax Net Income 3Q17 48

49 USD Million First 9M 2017 Results Webcast Presentation Net Results (102) Net Income 9M16 Operating Income Net Financial Results Equity in Earnings of nonconsolidated companies Income Tax Net Income 9M17 49

50 USD Million 3Q17 Results Webcast Presentation Free Cash Flow (18) 300 (111) (97) 100 (100) EBITDA 3Q17 Cash financial results Cash income tax Changes in working capital Other Capex Free cash flow 3Q17 50

51 USD Million First 9M 2017 Results Webcast Presentation Free Cash Flow 1,600 1,400 1,200 1,000 (52) Inventories: +USD318 million steel price +USD189 million steel volume +USD85 million raw materials and other (price/volume) +USD44 million Trade and other receivables and payables (net): +USD141 million ,429 (515) (555) 0 EBITDA 9M17 Cash financial results Cash income tax Changes in working capital (283) 69 Other Capex Free cash flow 9M17 51

52 3Q17 Results Webcast Presentation Free Cash Flow and Net Financial Debt Cash from operations (USD million) Capital expenditures (USD million) Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 Free cash flow Net debt and net debt to EBITDA ratio (USD million) 145 (USD billion) x 0.6x 0.5x 0.7x 1.5x (78) 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 1 Last 12 months EBITDA 52