First: Health & Safety

Transcription

1 TUBACEX Corporate presentation

2 First: Health & Safety Our MISSION statement pledges that the people working in our group are one of the company s main values: to develop professionally and individually working in a safe pleasant atmosphere In order to achieve this, the Company's directors set themselves the STRATEGIC OBJECTIVE of establishing and introducing an OCCUPATIONAL RISKS PREVENTION PROGRAMME to ensure a standardised working method. This PREVENTION PROGRAMME is implemented through the ANNUAL PLANS with specific targets and responsibilities. Prevention and safety as driver in all internal processes OSHAS certification Environmentally friendly policy & processes ISO certification 2

3 First: Health & Safety OCCUPATIONAL RISK PREVENTION PROGRAMME The target is to ensure the continuous improvement of Prevention management in the Company, minimising the risks involved in our work. This is achieved through a series of ongoing prevention activities, organised by the management in conjunction with the workers, aimed at preventing and avoiding any type of accidents at work and occupational diseases that can affect both the health of the workforce and production, installations and the environment. The Occupational Risks Prevention Department is responsible for providing guidelines and monitoring these activities. Prevention is a commitment and area that involves everybody and, therefore, we are all obliged to ensure we practice RISK PREVENTION in our day - to - day work, integratingitinourprogressiontoensureasafe work environment. 3

4 Table of contents 4

5 Introduction

6 Seamless stainless steel tube sector 1,490 million tons per year 85 million tons per year Crude steel Arcelor Mittal Nippon Steel JFE Baosteel Welded tube (carbon and stainless) 36 million tons per year TMK Arcelor Mittal Baosteel Condesa 32 million tons per year Seamless stainless steel tube 0.29 million tons per year Seamless carbon tube Tenaris TMK Stainless steel Vallourec Sumitomo ThyssenKrupp Outokumpu Acerinox POSCO HIGHEST VALUE - ADDED NICHE Note: Estimated 2011 figures. 6

7 Sector: main characteristics (I) Strong g growth Average growth of demand: 6% in period. Stainless steel has a longer life than other materials and it does not require maintenance. Significant substitution effect when stainless steel prices go down. Global growth requires safer and cleaner products, such as stainless steel. Stainless steel is 100% recyclable. Low transport costs when compared with other materials. 7

8 Sector: main characteristics (II) Linked to oil, gas and energy sectors Carbon Stainless High alloys Several industrial processes Welded tube Construction Automotive Oil conduction LNG Food Water Che - mistry Aerospace Seamless tube Oil and gas extraction Oil and d gas explorationl i Energy generation Petrochemical Tubacex b Group 8

9 Sector: main characteristics (III) where Tubacex sells 90% of its products IL O Onshore Offshore Refining ND AL MICAL AN OCHEMICA CHEM PETRO Plants Organic Plastics Rubber Fiber POWER GEN Thermal Combined cycles Cogeneration Nuclear Renewables GAS Onshore Offshore with a 20% market share in its product range. 9

10 Sector: main characteristics (IV) New competitors Commodity and non- certified products. Market share not relevant. Learning curve. Traditional competitors Specialization in higher value-added products. Global market Allowing synergies among the different geographic areas. 10

11 Breakdown of revenues Revenues breakdown 2012 by end - Revenues 2012 by y geographical g p area user sector t (1) Gas 8% Chemical & Petrochemical 1% Refining 24% Row 6% Spain 9% Low exposure to the Spanish market Asia 17% E&P Oil&Gas 51% Power Generation 16% USA + Canada 14% Europe 54% Revenues breakdown 2012 by final destination of the tube (2) Row 5% USA + Canada 1% Europe 14% Asia 59% Latam 21% (1) Considering the project business. (2) Considering the project business. 11

12 Tubacex Group: Fully integrated structure Raw materials: Nickel Stainless scrap Molybdenum Ferrochrome Others Round bars and square billets FINAL MARKET Commercial offices Hot extrusion Fittings Tube Master distributor Cold rolling and stretching Group stocks Tube 12

13 Key milestones Company foundation in Llodio (Spain) An international commercial network is created The steel mill (ACERÁLAVA) begins operations TUBACEX, S.A. = holding T.T.I., S.A.= manufacturing subsidiary Acquisitions: Schoeller Bleckmann Edelstahlrohr GmbH Agreement with Vallourec & Mannesmann 1970 Listing on the Stock Exchange 1988 First stainless grades are manufactured Reduction of carbon steel production 1995 Acquisition i i of a 100% stake in SALEM TUBE (United States of America). A 60% stake was held since New Strategic Plan First OCTG and umbilical tubes are manufactured 13

14 Strategyt

15 Tubacex Strategy Strategic Reflection ( ) Focus on new high value added products Speeding up movement to high value added d products Accelerate new production capacity in OCTG Accelerate umbilicals goals Speed up supercritical boilers development Developing tube for urea plants Explore inorganic i options in titanium i Speeding up growth in traditional profitable products Increase commercial presence in Asia Increasing Increase productive capacity with competitive competitiveness People cost in India Explore M&A opportunities Increasing profitability in traditional products Innovation Service Quality Focus on increasing competitiveness Excellence in manufacturing Quality & Service Operating cost monitorization 15

16 Tubacex 2012 vs. 2006: Deep change towards added value Orders of new products (% total orders) 45% 41,9% 42,3% 40% 38,0% 35% 30% 25% 27,6% 20% 18,8% 8% 15% 10% 8,8% 4,4% 5% 1,4% 1,8% 0,1% 0% E 2013E 2014E 2015E 2016E Commitment with innovation and development of new products Strategic focus on new high value added products for sectors with positive growth perspectives p New products are expected to account for the 18.8% of the total order intake in

17 Tubacex 2012 vs. 2006: Change in the portfolio of products Order intake 2006 by sector Order intake 2012 by sector (1) E&P 5% Mechanical 8% Power Generation 23% Others 9% Strategic Plan Gas 8% Chemical & Petrochemical 1% Refining 24% Chemical & Petrochemical 55% E&P Oil&Gas 51% Power Generation 16% Successful fulfilment of the Strategic Plan...while esg significantly tydiversifying e s y g our customer base (1) 2011 order intake considering the project business. 17

18 Where does Tubacex want to be? HIGHER VALUE - ADDED PRODUCTS OIL&GAS POWER GENERATION 18

19 Oil & Gas: exploration and extraction are increasingly complex Worldwide offshore rig count E 2012E 2013E Offshore rig count Source: Morgan Stanley In the last 5 years, more than 50% of new oil discoveries were made in deep waters High levels of corrosion and extreme temperatures The technology required for the extaction is increasingly complex. This fact is making (and will continue making) that the relative use of seamless stainless steel tubes increases when compared to less value- added products 19

20 Umbilicals: assistance in critical conditions of extraction Process of acreditation already finished Goal of starting invoicing orders during

21 Where does Tubacex want to be? HIGHER VALUE - ADDED PRODUCTS OIL&GAS POWER GENERATION 21

22 Coal plants as a primary source of energy still growing strongly Coal plants: global annual new capacity (GW) Source: IEA, Tubacex. Energy generated dfrom coal plants will grow at an annual average rate of f2.1% up to 2030, outperforming the average of the other energy sources. Coal has lower geopolitical risk than oil China and India will account for an 85% of this growth. Only in the past five years, China has doubled its coal capacity. 22

23 with materials that meet higher pressures and temperatures Boilers in coal plants: composition and resistance Sub- critical Supercritical Ultrasupercritical Austenitic 9% Austenitic 20% Nickel base 16% Ferritic 91% Ferritic 80% Austenitic 24% Ferritic 60% 250 bars 280 bars 360 bars 550 ºC 610 ºC 710 ºC CO 2 emissions reduction vs. traditional power plant base -33% -40% Boilers must be more efficient and meet the new environmental requirements, leading to a need of pressure and temperature resistant materials. Average annual growth rate E: 10% Source: Tubacex on different sources,. 23

24 Strategic alliance with Vallourec & Mannesmann Commercial Technical R + D Oil & Gas Powergen Enhancement of goals sought in Strategic Plan Complementary products Wider range 24

25 Enhancing exposure to the fastest growing markets Deepwater Productive Capacity Million barrels per day Gulf of Mexico Brazil Nigeria Angola Others Brazil is going to have the highest expected growth rate in oil extraction capacity in the coming years Extremely aggressive environments: offshore, deepwater and pre - salt. Tubacex has achieved a revenue growth rate in Brazil of 700% in the last five years 25

26 Tubacex Innovation COMMERCIAL STRUCTURE SPAIN INDUSTRIAL STRUCTURE AUSTRIA USA. Steel mill Hot Cold Quality Hot Cold Umbilic. Quality Cold Quality Project leaders Customer Service R+ D TRANSVERSALITY Independent d External company technological centers Strategic alliances with third- parties Institutional side (INNOBASQUE) 26

27 Operating environment

28 Commercial situation Order intake grew by 12% in 2012 vs Distribution: Projects: Volumes increasing since Better behaviour in Europe but USA improving since Increase in demand in 2012 in spite of decreasing trend in nickel prices Progressive recovery since Positive performance of the agreement t with V&M: backlog in OCTG until H Strong demand from Offshore projects. Refining and PowerGen improving in recent months. 28

29 Industrial situation 25 Mill. of CAPEX in 2013: Payment commitments due to investments made in the last years (i.e. new OCTG capacity). New manufacturing f t i model d l in TTI (medium - term project): First player in the sector that will implement it. Improvements in productivity. Lead d times i and d intermediate stocks k reduction. i Quality improvement. Minimising operating costs: Personnel Sub - contracting Suppliers Production / Planning 29

30 Annex

31 Financial performance Sales ( Mill.) EBITDA ( Mill) ,2 671, , ,5 430,5 539,1 371,5 361,8 486,6 532, ,9 52,7 64,0 72,4 12,8 27,2 45, ,4 EBIT ( Mill.) Net income ( Mill.) ,5 55,7 47,3 37,0 24,9 26,5 6, ,4-5, ,4 56,7 30,9 37,6 13,5 11,9 3, ,5-25,8 31

32 Q Results Significant improvement in profitability vs. Q Sales ( Mill.) EBITDA ( Mill.) ,6% 11,5% 10,1% 15, % ,3 6,2% 6,7% 7,7% 12,8 7,5% 12,1 4,3% 5,3% 10, ,9% 5,0% 5,7 6,9 5,0 5,7 6,5 5,9 2,9% 5 3, T09 2T09 3T09 4T09 1T10 2T10 3T10 4T10 1T11 2T11 3T11 4T11 1T12 2T12 3T12 4T12 1T ,9% 14,4 1T09 2T09 3T09 4T09 1T10 2T10 3T10 4T10 1T11 2T11 3T11 4T11 1T12 2T12 3T12 4T12 1T13-2,9-4,4-4,5% -8,1-6,1% -9,1% -27,5% -18,7 EBITDA EBITDA Margin 15,0% 10,0% 0% 5,0% 0,0% -5,0% -10,0% -15,0% -20,0% -25,0% -30,0% -35,0% 32

33 Financial Situation Working Capital vs. Net Financial Debt Equity / Total Assets (%) Mill Q10 3Q10 1Q111 Working Capital 3Q111 1Q 12 3Q 12 1Q 13 Deuda Financiera Neta 50% 40% 30% 20% 10% 0% 42% 44% 41% 46% 40% 38% 36% 36% 37% 37% 37% Equity / Total Activo Q12 2Q12 3Q12 4Q12 1Q13 Due to our business model, Net Financial Debt is strongly correlated with our working capital evolution In spite of the sharp decrease in demand during 2009 and 2010, TUBACEX has been able to maintain a sound financial position 33

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