Analyst Presentation 2017

Transcription

1 Analyst Presentation 2017

2 Index 1. TUBACEX GROUP 2. RECENT EVOLUTION OUTLOOK & HALF YEAR RESULTS 4. STRATEGIC PLAN

3 1 TUBACEX PROPUESTA GROUP DE ACUERDOS

4 TUBACEX Group A fully integrated supplier Steel billets & bars Extrusion Cold finishing Pipes & tubes fittings Master distribution Commercial network TUBACEX is the largest Seamless Stainless Steel Manufacturer.. 4

5 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 professionals Worldwide leading supplier of SSSP Worldwide Presence 5

6 TUBACEX Group Business Strategy -Market Growth + Std Downstream linepipe Bar Traditional Products Furnaces Heat Exchangers Std Boilers Offshore Precision SC Boilers Higher Added Value Products OCTG High Alloys Urea Umbilicals Nuclear - Profitability + Focus on customer service and delivery Continue our technological development with excellence new products and services Changing successfully our former positioning The size indicates the volume of each segment, measured in Euros (not in tonnes) 6

7 TUBACEX Group Other key matters Relationship with Investors Shareholder Structure Stable core of shareholders committed to the long-term project JM Aristrain 11,0% Only change in significant shareholders: azvalor became significant shareholder in March 2017 Ecofin 4,9% Itzarri 3,2% EDM 3,1% AZValor 3,0% 55% of analysts with active coverage recommended Buy Target average price from analysts in June 2017: 3.49/share Free - float 74,9% Stable shareholder structure with positive market assessment Source: Spanish Securities Exchange Commission (CNMV) on June 20,

8 2 RECENT EVOLUTION

9 Recent Evolution Business Strategy Focus on added value Premium products Product breakdown 50% Value chain 2013 Margin Premium products New products 60% 56% 50% 70% 52% Premium Standard 56% 50% 50% 53% 40% 60% 70% % 28% 29% D C B A 50% Type of product (Value Added) Note: the strong drop of volumes and pressure in prices experienced in 2015 and 2016 have significantly affected the consolidated margin of the Group New products refers to products industrialized since % in euros of Premium products over total consolidated revenues Moving forward in the value chain with Premium Products 9

10 Recent Evolution 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 Support of EIB through a loan to finance the Innovation and Technological Development plan defined for % 52% Effort in R&D and Technological Innovation Sales of new products 15% 21% 32% 29% R&D expenditure, industrialization of new products and technological innovation Sales of new products over sales of manufactured tubes 10

11 Recent Evolution Main figures evolution Revenues ( M)* EBITDA ( M) EBIT ( M) % +40% * Revenues figure assuming nickel stable 46 5,7% 51 9,3% 64 11,7% ,2% 7,1% EBITDA Margin 27 5,0% +65% 32 5,7% 44 8,0% 16 2,9% EBIT Margin 2 0,5% Net Profit ( M) NFD ( M) 12,0 2,2% x2 15,0 2,7% 24,0 4,3% 8,4 1,6% 0,5 0,1% * Bº Neto Margin * Acquisition of two Companies (IBF and Prakash) Significant improvement of results until Oil crash 11

12 Recent Evolution Financial strategy NFD / EBITDA Cash flow before acquisitions Gross Cash flow 5,7x 3,8x 2,4x 4,5x 5,9x 165M generated in 4 years M generated in 4 years Debt maturities schedule % 12% 17% 47% 41% 32% 28% 32% 22% 7% 10% 8% 3% 14% 12% Less than 1 year Between 1-2 years Between 2-4 years Between 4-6 years More than 6 years High cash flow generated allows financial soundness 12

13 Recent Evolution Renues Breakdown by Geography 69% 57% 35% 20% 7% 8% USA & Canada 1% Europe Asia 3% Rest of World Geographical distribution of sales Final destination for Project market Asia remains the biggest market for the Group 13

14 Recent Evolution Tubacex Action Plan Market environment Raw Materials: continuing low prices Oil&Gas Sector: investment cuts and delays in the implementation of projects. Worldwide Growth: Low worldwide growth and worsening expectations. Prices: prices at historically low levels. Important change in the product mix demanded and the value chain TUBACEX Diversification: of sectors, products and markets. Cost Control: Adjustment plan in all expenditure items Competitiveness: Focus on Lean company, operational improvements, reduced lead-time, etc. Financial Strategy: reduction of costs, extending the maturity and diversification of the sources of funding Concentration on cash generation We are not stopping our strategic projects Deterioration of the mix, volumes, prices and margins Resilience to the crisis Offsetting the crisis in today's market 14

15 Recent Evolution Key issues in 2016 Providing the best solution by New Products Co-development with customers New grades and materials Offer of new dimensions and applications Design of customized solutions Complementary products New Tecnologies Lean manufacturing practices New production processes New services Additional treatments and finishes Optimized logistics centers / Time to market Assistance at plants and maintenance Concept design Product design Manufacture Logistics Installation & Maintenance Growing in the complete Value Chain to become the best supplier for integrated solution 15

16 Recent Evolution Key Aspects Concentration on cash generation and defending the Balance Sheet Continuation of the projects launched in 2015 Focus on the plan to reduce overheads Growth from the increased market share in strategic products and markets and entry into new sectors other than Oil&Gas Improved market positioning with End-user and EPCs Development of new products, grades and technologies Rapid evolution towards Supplier of comprehensive Solutions We will not stop important strategic investments We will emerge stronger from this crisis 16

17 Recent Evolution Main financials Mill % Var. 16 vs. 15 Revenues % EBITDA % EBITDA margin 11.7% 9.2% 7.1% EBIT % EBIT margin 8.% 2.9% 0.5% Net Profit n.s. Net margin 4.4% 1.6% 0.1% Net working capital Net working capital / sales 37.0% 39.4% 37.1% Net Financial Debt Net Financial Debt / EBITDA 2.4x 4.5x 5.9x 17

18 OUTLOOK & HALF YEAR RESULTS

19 2017 Outlook & Half Year Results Oil Sector Two consecutive years of reduced investment for the first time in 30 years, can have a dramatic impact on the decline rate of mature assets, thus the global upstream investment is expected to increase in 2017 Upstream Capex evolution Norte América -38% +27% Europa -24% -6% Oriente Medio +8% +3% Rusia + FSU -5% +10% ($MM) -26% India + Asia + Australia -23% +7% América Latina Africa -18% +2% -20% +13% -37% +9% E 2017E Caída Capex 2016 Caída Capex estimada 2017 Sourcte: Barclays Global 2017 E&P Spending Outlook (January 2017) Two consecutive years of reduced investments 19

20 2017 Outlook & Half Year Results Oil Sector The subsea market has undergone the most significant downturn in recent history After the bottom in 2016, a gradual recovery is expected to start from 2017 onwards Subsea Trees Orders (#) Global Subsea Capex ($Bn) e 2018e 2019e 2020e 2021e Golden Triangle Rest of World Subsea Services Subsea Equipment SURF Source: Wood Mackenzie Source: Rystad Energy A gradual recovery is expected to start from 2017 onwards 20

21 2017 Outlook & Half Year Results What we learned from 2016 It will take some years to return to the level of new projects launched in Only projects that are sustainable at barrel prices of USD will be approved Capex level required for similar projects before the crisis will be reduced by 20-30% Corporate mergers change the decision-making centers Intermediaries that do not add value will disappear The sector is being restructured 21

22 2017 Outlook & Half Year Results Our Response We must be proactive, offering the market: Co-design in the prior phase to optimize costs Standardization in the design of plants Multi-year framework contracts offering just in time services and better prices Elimination of non-value in the whole supply chain Service in installation and after-sale maintenance Real contribution to the optimization of costs and reduction of Capex 22

23 2017 Outlook & Half Year Results Opportunities 1 GREATER COMMERCIAL SUCCESS 2 FOCUS ON COST REDUCTION Open new customers, KAT s OCTG in Middle East for Gas Boost new products Opening up new markets: Iran Reduce personnel cost Boost projects launched on cost reduction Boost projects on productive improvements Expansion of TSS 3 NEW BUSINESSES /Setting basis for future growth 4 CASH MANAGEMENT Connection Tubacoat Reduction in working capital, specific plans Bigger outside diameters Entering in new patents. Keep on reducing financial cost Generating positive cash flow through operations 23

24 2017 Outlook & Half Year Results Revenues and EBITDA evolution Revenues Q Q Q Q Q Q Q Q Q Q Q Q Q Q EBITDA ,5 18,3 14,1 15,1 17,5 16,2 11,8% 13,5% 11,5% 10,3% 10,9% 11,4% Q Q Q Q Q Q ,1 7,3% Q ,1 7,8 6,0% 6,4% Q Q ,2 10,5 8,7% 10,1% Q Q ,5 3,5% Q ,0 9,9% Q ,6 4,1% Q % 20% 15% 10% 5% 0% EBITDA (M ) Mg. EBITDA 24

25 2017 Outlook & Half Year Results Revenues and Adjusted Revenues Comparison Revenues Q Q Q Q Q Q Q Q Q Q Q Q Q Q Adjusted Revenues* Q1 2014Q2 2014Q3 2014Q Q1 2015Q2 2015Q3 2015Q Q1 2016Q2 2016Q3 2016Q Q1 2017Q *Adjusted Revenues assuming the stable nickel price of 2012 Perímetro comparable Nuevas compañías adquiridas 25

26 2017 Outlook & Half Year Results Main financials Mill. H H % Var. Q Q % Var. Revenues % % EBITDA % % EBITDA margin 7.6% 7.3% 8.7% 4.1% EBIT % n.m. EBIT margin 1.2% 0.3% 2.7%. neg. Net Profit % n.m. Net margin 0.7% 0.8% 1.6% neg. FY 2016 H Var. Net working capital Net working capital / sales 37.1% % Net Financial Debt Net Financial Debt / EBITDA 5.9x 7.5x neg.: negative n.m.: not meaningful 26

27 2017 Outlook & Quarterly Results Sales breakdown by sector* 56% 5% 1% 2% 11% 13% 13% 26% 48% 30% 16% 26% 24% 40% 28% 26% 31% 57% H E&P Oil&Gas Refining Power Gen Chem & Petrochem. Others E&P Oil & Gas: Despite the cuts in the Capex of oil companies some specific big projects awarded that helped the gradual increase Better relative performance of the gas sector Power Generation: After two years of record sales of tubes for boilers at power stations with supercritical technology, some decrease due to new regulations Integral tubular solutions thanks to the incorporation of IBF and the development of new grades and technologies Downstream: Downward trend during the last quarters, but some big projects in Far East to be awarded Sales to the LNG sector can be highlighted Other alloys Diversifying effort Incorporation of new grades in the product portfolio Gradual increase of fertilizer orders * Direct sales to engineering firms and end-users Strong positioning in Oil&Gas and Energy 27

28 4 STRATEGIC PROPUESTA PLAN DE 2016 ACUERDOS

29 Strategic Plan Strategic Plan 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 plan From tube manufacturer to premium tubular solutions provider 29

30 Strategic Plan Strategic Plan : 4 Objectives 1 Reinforce TUBACEX s positioning as global tubular solutions provider 2 Reduce volatility by diversifying risks Petrochem. 14,0% Others 5,0% Industrial Oil&Gas Power Gen 14,0% Oil&Gas 67,0% Other energies Power Gen Revenues 2013 Revenues

31 Strategic Plan Strategic Plan : 4 Objectives 3 Achieve Revenues > 1,000M in a recovered market situation Step 1 EBITDA 100M Market recovery Step 2 Revenues 1,000M Natural growth of our current products Accomplish fully assembled tubular systems positioning 4 Achieve an excellence level above 500 in EFQM model (silver Q for management model is 400), with all the results above 50% both in internal and external audit People Customers Suppliers Shareholders Society 31

32 Strategic Plan Strategic Plan : Financial Objectives Revenues EBITDA Margin NFD /EBITDA Net Working Capital / Sales 1,000 M 15% 2-3x 35% INTERNAL PROJECTS EXTERNAL PROJECTS Commercial positioning TSS- full development of global logistics Fully assembled tubular systems Industrial plans Innovation plans Costs optimization. Development of testing capabilities (EIC) Agreements with engineering partners M&A operations to acquire complementary products and services 32

33 THANK YOU! 33