Investor Day New York April 6, Paolo Rocca Chairman and CEO

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Transcription:

New York April 6, 26 Paolo Rocca Chairman and CEO

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 forwardlooking statement to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. April 6, 26 2

A key player in the global energy industry Leading global supplier of oilfield equipment to the oil and gas industry Leading supplier of welded pipes for oil and gas pipelines in South America US$ Billion 8 7 6 5 4 3 US$ Million 2,5 2, 1,5 1, Revenues of US$6.7 billion in 25, with 17,5 employees worldwide 2 1 SLB TS BHI RIG WFT NOV 5 European-domiciled company with operating subsidiaries worldwide M arket cap (29 M arch 6) Net profit 5 (RHS) April 6, 26 3

Growth driven by oil & gas activity Revenue Gross profit 23 24 25 23 24 25 Seamless 2,388 3,273 5,123 856 1,198 2,47 Welded 351 348 845 76 99 289 Energy 333 418 526 17 19 13 Others 18 97 242 23 43 85 Total 3,18 4,136 6,736 972 1,359 2,793 Net sales by segment Gross profit Energy 8% Others 4% Welded 1% Energy % Others 3% Welded 13% Seamless 75% Seamless 87% April 6, 26 4

Global operations Distribution of seamless production (2.8 mill tons) 25 Distribution of seamless sales volume (2.9 mill tons) 25 Far East & Oceania 8% Europe 3% Far East & Oceania 14% Middle East 18% Europe 23% South America 3% South America 15% North America 32% North America 29% April 6, 26 5

With worldwide presence April 6, 26 6

Integrated business model Focus on sales of high value products direct to end-user customer base Global industrial system producing comprehensive range of products to a single quality standard Global R&D network Global supply chain management integrating tubular supply chain from the mill to the well Efficient, low-cost operations with 5 years of management know-how April 6, 26 7

Leading market position World seamless OCTG production 25 market share Japan, 8% Others, 7%, 19% US Steel, 8% Rest of USA, 4% TPCO, 9% V&M, 13% Rest of China, 16% Source: Company estimates TMK, 11% Rest of CIS, 5% April 6, 26 8

Demand for oil and gas continues to grow Projected world oil demand (Million of barrels per day) Projected world gas demand (Trillion cubic feet per year) 14 18 12 16 CAGR 1.6% 14 CAGR 2.3% 1 12 8 1 6 8 6 4 4 2 2 24 21E 215E 22E 225E 24 21E 215E 22E 225E Source: BP Statistics and EIA April 6, 26 9

But worldwide oil production exceeds discoveries 6 Billion bbl/year 55 5 45 4 35 3 25 2 15 1 5 19 191 192 193 194 195 196 197 198 199 2 Annual Discoveries Annual Production Source: BP Statistics 24 April 6, 26 1

Drilling activity is growing faster than production International rig count (excluding US, Canada, Russia, onshore China) US and Canada rig count 1 2 9 CAGR 6.8% 18 CAGR 7.8% 8 16 7 14 6 12 5 1 4 8 3 6 2 4 1 2 2 21 22 23 24 25 2 21 22 23 24 25 Land Offshore Land Offshore Source: Baker Hughes April 6, 26 11

Rising reserve depletion leads to higher OCTG consumption Example of a mature basin Oil Gas 125 4 12 35 115 3 11 25 15 2 1 95 15 9 1 85 5 8 22 23 24 25 22 23 24 25 Production (Mill m3) Drilling (Km) OCTG consumption (Kton) Production (B m3) Drilling (Km) OCTG consumption (Kton) Source: Company data April 6, 26 12

Reserve development to be in complex operating environments Production trend towards non-conventional sources 23 Oil & Gas production 21 Oil & Gas production Arctic 4% Deepwater 3% LNG 6% Acid Sour % Tight Gas % Tight Gas Acid Sour 3% 3% LNG 1% Heavy oil 7% Arctic 6% Deepwater 14% Conventional 8% Heavy oil 7% Conventional 57% Source: ExxonMobil April 6, 26 13

Well complexity drives demand for premium products Land Shallow Well Land Directional Deep Well Offsh. Shallow Water Directional Deep Well Offshore Deep Water Deep Well 3 5 m 9 5/8 3 m 2 8 m 18 5/8 85 m 13 5/8 155 m 13 5/8 18 m 5 1/2 18 m 13 3/8 35 m 9 5/8 32 m 9 5/8 32 m 11 ¾ 5 m 9 7/8 555 m 7 585 m 5 61 m 7 45 m 5 1/2 37 m 1 Tons % Premium % Special Grades 1,35 Tons 7% Premium 8% Special Grades 7 Tons 1% Premium 5% Special Grades 7 Tons 7% Premium 3% Chrome Source: Company data Note: Strings with Premium Connections in RED April 6, 26 14

Oil and gas E&P capex will increase Capex survey Billion US$ 3 Oil and gas industry has strong cash flow from high oil and gas prices 25 27 +15% 238 2 Reserve replacement and increased well complexity indicate a strong oil service cycle and substantial increases in capital spending 15 1 5 156 135 22 25 5 57 25 26E Source: USAEIA Canada International Source: Lehman Brothers April 6, 26 15

Meeting rising demand for OCTG... 23 24 25 Increase 5/4 Oilfield (OCTG) 44% 46% 53% 24% Pipelines (risers, flowlines, etc) 1% 8% 9% 22% Process & Power Plant 25% 27% 2% -22% Industrial & Automotive 21% 19% 18% 6% Sales volume (K Tons) 2,27 2,646 2,87 8% Seamless pipe apparent consumption OCTG apparent consumption Million tons Million tons 3 25 2 15 1 19.1 18.1-5% 6% 19.3 16% 22.4 1% 24.6 8 7 6 5 4 3 5.9 5. -15% 7% 5.4 2% 6.5 17% 7.6 5 2 1 21 22 23 24 25 21 22 23 24 25 Rest of the market Rest of the market Source: Company data April 6, 26 16

and for high-end products high-end production Premium connections Thousand tons 7 6 5 High end/total (RHS) 45% 4% 35% 3% Chrome and CRA Special, sour and high collapse steel grades 4 3 25% 2% Offshore risers and flowlines 2 1 2H 3 1H 4 2H 4 1H 5 2H 5 Th. tons 15% 1% 5% % Alloy boilers and heat exchangers Very large diameter seamless Cold-drawn automotive products Hollows for gas cylinders Source: Company data April 6, 26 17

Seamless pipe margins growing US$ 2, 1, 1,8 USD/b bl 9 1,6 1,4 1,2 8 7 1, 6 8 6 4 2 5 4 3 21 22 1Q3 2Q3 3Q3 4Q3 1Q4 2Q4 3Q4 4Q4 1Q5 2Q5 3Q5 4Q5 2 Margin per ton (RHS) Price per ton Cost per ton April 6, 26 18

Driving financial performance Millions of US$ 23 24 25 4Q 25 Net Sales 3,18 4,136 6,736 1,899 EBITDA 1 62 899 2,163 635 EBITDA margin 19% 22% 32% 33% EBIT 288 814 1,948 577 EBIT margin 9% 2% 29% 3% Net income 3 21 785 2 2 1,278 381 Net income margin 7% 19% 19% 2% Cash flow from operations 276 98 1,295 363 Net debt 448 828 183 183 ROE 12% 36% 43% (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) 23 results were affected by non-recurring losses of $75 million from BHP lawsuit. 24 results were affected by non-recurring gains of $258 million ($123 million arbitration award from Fintecna, $135 million - equity income gain from Sidor) (3) Attributable to Shareholders April 6, 26 19

Investing in growth and paying dividends Million US$ 8 7 6 5 4 3 2 1 22 23 24 25 Acquisitions Capex Dividends April 6, 26 2

Investment program to expand high-end capacity New R&D facility in Mexico and expansion of existing facilities in Italy Expansion of heat treatment capacity Increase of premium connection manufacturing capacity New premium connection finishing facility in China New non-destructive testing control lines Expansion of cold drawing and autocomponent installations Increasing product development budgets April 6, 26 21

Liquidity of shares has increased Average daily trading Free float shares by market Millions of US$ 18 16 Argentina 16% Mexico 2% December 25 ADRs 55% 14 12 1 Italy 27% 8 6 December 24 Mexico 2% 4 2 23 24 25 1Q6 Argentina 41% ADRs 52% New York Milan Buenos Aires Mexico Italy 5% April 6, 26 22

Summary A leading global player in the oilfield services and equipment sector Well positioned to benefit from increased drilling activity and well complexity Integrated business model and leading market position Strong financial performance with solid growth prospects Improved share liquidity based on New York and Milan listings April 6, 26 23

April 6, 26 24