Borsa Italiana. Paolo Rocca Chairman and CEO

Transcription

1 Paolo Rocca Chairman and CEO

2 Disclaimer This presentation contains forward-looking statements. Forward-looking statements are based on management s current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements. These statements include information regarding management strategy, investment plans, development and growth of the seamless steel pipe and oil and gas industries, trends and other prospective data, including trends regarding the development of raw material costs and the levels of investment in oil and gas drilling worldwide and general economic conditions in the countries where operates and sells its products and services. We do not undertake to update any forward-looking statement to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. September

3 A key player in the global energy industry Leading global supplier of seamless pipes to the oil and gas industry with manufacturing operations worldwide Revenues by segment (1H 2005) Welded 13% Energy 8% Other 3% Leading regional supplier of welded pipes for South America s oil and gas infrastructure Innovative energy supply business in Italy Seamless 76% Consolidated revenues of USD 3.2 billion in the first half of 2005 with 16,500 employees worldwide US billions US millions 1,200 1, Domiciled in Luxembourg with operating subsidiaries all over the world SLB BHI TS WFT Market cap (31 August 05) Net Profit 1H05(RHS) September

4 Global leader in OCTG Leading consolidator in the seamless pipes industry Focusing on sales of high value products direct to end-user customer base Comprehensive range of products for highly demanding environments, including premium connections, CRAs, Super Duplex, sour service, high collapse World seamless OCTG production 2004 market share Eastern Europe & CIS 20% Million tons 25 Others 4% V&M 14% Japan 9% USA 13% 18% China 22% Seamless pipe apparent consumption 20 Integrating the tubular supply chain from the mill to the well Efficient, low-cost operations with 50 years of management know-how World OCTG apparent consumption World apparent consumption September

5 Critical mass and local presence to serve customers globally September

6 Seamless pipe business is global Distribution of production capacity (3.3 million tons) Distribution of sales volume (1H 2005) (1.5 million tons) South America 27% North America 31% South America 15% North America 31% Far East & Oceania 14% Far East & Oceania 8% Europe 34% Middle East & Africa 16% Europe 24% September

7 Growing oil demand not matched by additional supply capacity Mln b/d World oil demand Spare capacity (RHS) Source: EIA, BP Statistical review of World Energy and Spears estimates September

8 Demand growth and supply constraints in oil and gas industry Point to multi-year period of higher investment in all parts of the industry Since 1985 production has exceeded the discovery of new reserves every year Decline rates for older reservoirs are accelerating Long lead-time required to develop new reservoirs New exploration areas present issues of risk and access Downstream infrastructure close to full capacity September

9 Worldwide oil discoveries and production Billion bbl/year Legend Annual Discoveries Annual Production Source: BP Statistics 2004 Statistics 2004 September

10 Oil & Gas proved reserves by company Oil Proved Reserves Gas Proved Reserves Billion barrels, as of 2004 Trillion cubic feet, as of 2004 Saudi Aramco 262 Gazprom 1,320 Iraqi National Oil Co. 112 Qatar Petroleum 910 National Iranian Oil Co. 99 National Iranian Oil Co. 812 Kuw ait Petroleum Co. 97 Saudi Aramco 230 Petroleos de Venezuela 78 Abu Dhabi National Oil Co. 196 Abu Dhabi National Oil Co. 55 Sonatrach 159 Libya National Oil Co. Pemex Lukoil Top 50 Companies = 84% of proved oil reserves Petroleos de Venezuela Rosneft Nigerian National Petr. Co Top 50 Companies = 78% of proved gas reserves Qatar Petroleum 15 Iraqi National Oil Co. 110 Gazprom 15 Petronas 88 Nigerian National Petr. Co. Yukos Majors 6% 7% Independents Pertamina Exxon Mobil Majors 5% 3% Independents Exxon Mobil 13 Kuw ait Petroleum Co. 55 PetroChina 11 Shell 53 Rosneft 11 BP 49 Shell Sonatrach % Nationals Libya National Oil Co. PetroChina % Nationals BP 9 Egyptian General Petroleum Corp. 29 Petrobras 9 Oil and National Gas Corp. 27 Others 92 Others 309 Source: Energy Intelligence and PFC Energy September

11 Production will increasingly be in difficult operating environments Production trend towards non-conventional sources 2003 Oil & Gas production 2010 Oil & Gas production Heavy oil 7% Arctic 4% Deepwater 3% LNG 6% Acid Sour 0% Tight Gas 0% Arctic 6% LNG 10% Tight Gas 3% Acid Sour 3% Deepwater 14% Conventional 80% Heavy oil 7% Conventional 57% Source: ExxonMobil September

12 Positioned at the forefront of industry developments Caspian (Karachaganak, Kashagan, Tengizchevroil) Gas production for LNG (Qatar, Australia, Egypt, Nigeria) Saudi Aramco expanding production West African deepwater Mexico rig count has doubled in last three years Canadian oil sands Venezuelan heavy oil Norwegian offshore September

13 Investing to meet the needs of the industry And enhance competitive differentiation 34% High-end tubes over total tons sold Investing in global industrial structure to increase capacity in high value products, contain cost increases and secure supply of raw materials and energy 32% 30% 28% 26% Increasing investment in R&D to develop new products 24% 22% 20% 2H 03 1H 04 2H 04 1H 05 Investing in finishing facilities and service yards worldwide to provide local supply chain management in complex operating environments Capex program has doubled September

14 Setting new industry standards in premium connections Statoil s Snøhvit project in the Barents Sea is the first field worldwide where all casing and tubing will be dope-free (Blue Dopeless ) Blue Near Flush offers similar benefits for operations requiring semi-flush, integral connections Blue SAGD specially designed for use with slotted liners in SAGD operations Performance envelope Blue Near Flush Internal pressure Sales of premium connections have increased 50% in 2 years to 450,000 t/y Compression Tension Pipe body service envelope External pressure Connection service envelope Connection critical envelope September

15 Seamless pipe margins have grown US$ 2,000 Rigs 1,800 1,600 USD/bb l , , , FY 2001FY 2002FY 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 Margin per ton (RHS) Price per ton Cost per ton 200 September

16 Operating results Millions of US$ H 2005 Net Sales 3,174 3,219 3,180 4,136 3,197 Seamless 2,496 2,244 2,376 3,273 2,413 Welded Energy Others EBITDA ,000 EBITDA margin 20% 21% 19% 22% 31% 3 Net income Net income margin 4% 6% 7% 19% 18% (1) EBITDA = Operating income plus depreciation and amortization taken before non-recurring losses and provisions relating to BHP Billiton lawsuit and non-recurring gains relating to Fintecna arbitration award (2) Net income plus minority interest attributable to shareholdings acquired during the December 2002 exchange offer which marked the listing of as a public company (3) 2003 results have been affected by non-recurring losses of 75 millions from BHP lawsuit results have been affected by non-recurring gains of 258 millions (123 millions arbitration award from Fintecna, 135 millions - equity income gain from Sidor) September

17 Strong balance sheet Indebtedness (Million US$) Firm value US$14,228 As of June 30, 2005 Cash & Cash Equivalents Financial Debt 451 1,165 Net debt Net Debt 714 Net Debt / Equity 24.1% Balance Sheet (Million US$) As of June 30, 2005 Market Cap (1) 13,514 Current Assets 3,368 Current Liabilities 1,759 Non-Current Assets 2,828 Non-Current Liabilities 1,255 Deferred Taxes 362 Minority Interest 218 Equity 2,963 Total Assets 6,196 Total Liabilities & Equity 6,196 (1) Market capitalization as of August 31, 2005 September

18 Investing in growth and paying dividends Million US$ Acquisitions Capex Dividends September

19 Liquidity of shares increasing Average daily trading Millions of US$ ago-04 sep-04 oct-04 nov-04 dic-04 ene-05 feb-05 mar-05 abr-05 may-05 jun-05 jul-05 ago-05 sep-05 NYSE Milan Buenos Aires Mexico September

20 Summary Global leader in a consolidated industry segment with substantial barriers to entry Well positioned to benefit from extended energy cycle and industry developments Consolidating competitive position by investing in R&D and industrial structure Strong operating results and prospects Improved share liquidity September

21 September