TR Corporate Presentation - September 2014 [Sólo lectura] Corporate...Global demand for seamless...
Transcript of TR Corporate Presentation - September 2014 [Sólo lectura] Corporate...Global demand for seamless...
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September 2014
Special Products & Integral Services Worldwide
Tubos Reunidos
GROUP
TUBOSREUNIDOS
September 2014REUNIDOSTUBOSGROUP
Tubos Reunidos Group
1. Market and Trends
2. Company Overview
3. 2014 – 2017 Strategic Plan
4. Financials
Content
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September 2014REUNIDOSTUBOSGROUP
Tubos Reunidos Group
• Seamless Steel tubes Company
• Global International Footprint : 84% of Sales (2013)
• Oriented to the Energy Sector: 81% of Sales (2013)
• Focus on Special Products: 64% of Sales (2013)
• Transformational Investment Plan Under Execution: 150 Mill Eur 2012-2016
• Strategy: Specialization + Service + Competitiveness. Current Strategic Plan 2014-2017: Towards a new Tubos Reunidos
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1.Market and Trends
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REUNIDOSTUBOSGROUP
September 2014REUNIDOSTUBOSGROUP
Tubos Reunidos Market
Global demand for seamless steel pipes, 2013
Standardtubes & pipes Power
generation,petrochemicals
8%
21%
Specialtubes & pipes:
Other
3%4%
* % of Tubos Reunidos’ seamless steel tube (SST) sales in 2013 in euro terms 5
• OCTG: Premium and Special Grades
• Boilers, Heaters and Pressure Pipes : Special Grades
• Line Pipes :
Special Grades
• Stainless Steel
Tubes• Large-diameter
Pipes : Special
Grades
Tubos Reunidos is strategically focused on the specialty tubing segments(64%)* targeted at the energy sector (81%)*
Tubos Reunidos is strategically focused on the specialty tubing segments(64%)* targeted at the energy sector (81%)*
44 million MT
Oil & Gas
UsesSpecial Seamless Steel Tubes, 12 million MT
42%
12 million MT
September 2014REUNIDOSTUBOSGROUP
Oil & Gas
Non-conventional oil & gas exploration technologyDirectional drilling, off-shore,
shale–gas
‣ Deeper drilling wells
‣More corrosive environments
‣ Extreme temperaturesOff-shore pipes
Need for tubing with more complex and high-performance specifications‣ Steels that are more resistant to corrosion,
pressure and aggressive atmospheres (HPHT)
‣ Tubes tailored to individual well characteristics
‣ Premium threading
Sector Trends
New and more efficient technologies – Growing need for specialty tubing6
‣ Steels that are more resistant to corrosion,
pressure and aggressive atmospheres
‣ Greater range of tube diameters, lengths and
thicknesses
Power generation and petrochemicals
New technologies:
‣ Larger-scale power generation facilities(> 600 MW)
‣Work cycles exposed to higher pressure
and temperatures
‣ More stringent safety requirements
September 2014REUNIDOSTUBOSGROUP
OCTG
• Shift towards Unconventional Drilling (Horizontal wells and deeper wells) drives higher demand for seamless steel and Premium Products. Premium OCTG demandwill grow by 8% over 2012-2018
• OCTG Global demand will see a compound annual growth rate of 5% over 2012-2018, and the value of the market will double
Horizontal Shale vs. Vertical Shale
Source: JP Morgan, Industry Sources
Length, KM % Seamless% Premium Connections
OGTG Tons per well
+50% +25% +25% +4,2x
% small OD <7”Tipe of well
Source: The Metal Bulletin Research. The Five Year Outlook for the Global OCTG Industry, 2013, sector companies
x2
2012 2020 OCTG
2012-2018 GrowthGlobal OCTG
Premium OCTG
+ 5% + 8%
+40%
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OCTG growth. Higher for non conventional technologies and for Premium ProductsOCTG growth. Higher for non conventional technologies and for Premium Products
September 2014REUNIDOSTUBOSGROUP
36
24
12
60
48
2013 2030
12
CAGR:± 4%
Premium OCTGtubes (2012-2018)
Nuclearplants(2012-2020)
SST
Fossil fuel power plants(2012-2020)
4%GWh installed
Petrochemicals(2011-2018)
5%MT
Source: SBB, sector companies
60
Demand for seamless tubesMillions of MT
44
SpecialtySST
8%MT
6%GWh installed
Source: US EIA, : The Metal Bulletin Research. The Five Year Outlook for the Global OCTG Industry, 2013, Broker Share
Growth in specialty segment set to outpace overall growth in demand for SST products
Growth in specialty segment set to outpace overall growth in demand for SST products
Expected Growth
8
24
CAGR:±1.7%
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2.Company Overview
REUNIDOSTUBOSGROUP
September 2014REUNIDOSTUBOSGROUP
Manufacturing of a Wide Portfolio of Pipes
• Small and large size outside diameter tubes
• Carbon, alloyed, high alloyed: 1/2”-25” (12mm – 635 mm)
• Stainless steel tubes: 8”-25” (190 mm – 635 mm)
• 325,000 MT production capacity
• Production sites located in the Basque Country (Northern Spain)
• Production process vertically integrated
Large diameter Tubes: up to 24”
Manufactured at
Productos Tubulares
• Diameter: 26.7 – 180 mm. (6-
120mm upon cold-drawn).
• Thickness: 2.6 – 20 mm.
• Carbon, alloyed and high alloy.
• Diameter: 190-635 mm.
• Thickness: 6.30 – 120 mm.
• Carbon, high alloy and stainless.
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Seamless Steel Tubes CompanySeamless Steel Tubes Company
Small and mid-size diameter tubes: up to 7”
Manufactured at
Tubos Reunidos Industrial
September 2014REUNIDOSTUBOSGROUP
Focused on Special and Niche Products
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Tubes and pipes up to 25" OD and > 40 mm WT in special types of steel
Large diameter TubesLarge diameter Tubes Stainless steelStainless steel Boilers, Heaters
and Pressure PipesBoilers, Heaters and Pressure Pipes
OCTG Premium and Special GradesOCTG Premium and Special Grades
Special service line PipesSpecial service line Pipes
Tubes of > 8" OD in stainless steel up to 25” OD
High chrome alloys
Special lengths (up to 27 meters)
Rifle tube
Quenching and tempering
High collapse
High chrome alloys
Proprietary steel grades
Quenching and tempering
Sour service
Special grades
Offshore
Power generation and petrochemicals - Critical phases and cutting-edge
technological processes
Power generation and petrochemicals - Critical phases and cutting-edge
technological processes
Oil and gas exploration in extreme corrosion,
pressure and temperature conditions
Oil and gas exploration in extreme corrosion,
pressure and temperature conditions
Offshore and special grades
linepipes
Offshore and special grades
linepipes
Special Products: 64% of sales (2013)Special Products: 64% of sales (2013)
September 2014REUNIDOSTUBOSGROUP
Focused on Special and Niche Products
16%
19%
12
26.6%
11.4%
26.5%35.5%
Energy Sector:
81% of sales (2013)
Energy Sector:
81% of sales (2013)
Special Products:
64% of sales (2013)
Special Products:
64% of sales (2013)
Sales breakdown by client, Seamless Steel Tubes and Pipes
Sales breakdown by product, Seamless Steel Tubes and Pipes
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September 2014REUNIDOSTUBOSGROUP
Worldwide Presence
• Historic worldwide presence
• 84% of seamless steel tubes and pipes sales in international markets
• 55% of seamless steel tubes and pipes sales out of Europe
Sales Breakdown by Region,Seamless Steel Tubes and Pipes, Millions of Eur, 2013
International Footprint: 84% of sales (2013)International Footprint: 84% of sales (2013)
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September 2014REUNIDOSTUBOSGROUP
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Shareholder structure
14,9%10,2%
9,0%
6,6%6,4%
3,8%
49,1%
BBVA
Zorrilla Lequerica Family
N+1 por QMC II Iberian Capital Fund (N+1 AssetManagement)
Ybarra Family
Barandiaran Family
De Miguel Nart
Free Float
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3.2014 – 2017 Strategic Plan
REUNIDOSTUBOSGROUP
September 2014REUNIDOSTUBOSGROUP
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Premium products From generalist manufacturers to…
From service predicated on flexibility and versatility to...
From cost-efficient to...
Specialist in premium and niche products
End-to-end service provider
Structurally competitive
New Tubos Reunidosmodel
New Tubos Reunidosmodel
End-to-end service
Competiveness
Strategic cornerstones 2014-2017
September 2014REUNIDOSTUBOSGROUP
Sales and technology strategy focused on higher added-value products:in high-growth, high-return segments
100%
Special Aubes
64% High Value Added
55%Newproducts
5%
Sales 2013 (€) Sales 2017 (€)
Focus on specialproducts
Stronger growth in highadded-value products...
...On the back of new,more Premium products
78%75%
25%
x2
x2
x6
100%
Product Mix Improvement
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September 2014REUNIDOSTUBOSGROUP
•
•
•
•
producer by 2020New high-added value products in TR since 2014
•
•
•
•
High-growth segmentsStainless steel large outside diameter forenergy uses:Strong competitive advantages and entry barriers for TR
Niche product - TR Group large market share
New special products since 2013
Boilers and Heaters:Present in the maximum grade range, with applications inthe most efficient and high-growth technologies in theenergy generation and petrochemical sectors
OCTG:The oil and gas sector is the largest source of energy tomeet future demandsNon-conventional technologies: higher TSS demand
Long-standing presence in the US - will be the largest oil
Boilers and heaters
OCTG
Mechanical industries and others
Stainless steel large diameter
for energy uses
Service line pipe+++
++
+++
2013 2017
Sales volume increase
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September 2014REUNIDOSTUBOSGROUP
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0
10
20
30
40
50
2012 2013 2014 2015 2016 2017
Gradual consolidation of sales of new products
2017 target ROCE: 15%
News products:
2013: 24" diameter tubes, special service line pipes
2014: Premium OCTG tubes, high alloy boilers and heaters
2016: 28” diametertubes
2017: Premium OCTG threading
Investments:2012-2013: 24" diameter tubes, degassing, heat treatment
2015-2016: 28" diameter tubes, OCTG threading
2017: Normalised CapEx400
300
200
100
0CapEx - seamless tubes (€ million) Sales of high added-value tubes (€ million)
Execution of Transforming Investment Plan: 2012-2016 of 150 Million Eur
September 2014REUNIDOSTUBOSGROUP
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+ +Asia
+
RoWPercentage of 2013 revenue in € Percentage of 2017 revenue in €
USA& Canada 30% -> 35%Higher investment in oil & gas 2012-2035Shale gas revolution• TR boasts entrenched positioning, with new products and capabilities• Vertical integration, finishing and increased local presence
Europe 45% -> 35%Consumption recovering from lows of
2012-2013 (-44% vs. 2007)• Entrenched leadership position bolstered by new product capabilities
Geographic market strategy
25% -> 30%
Positioned in highly value-added products
Middle East + North AfricaM. East: $525bn over 5 years: 50% oil,33% gas, 17% electricity• TR positioned in highly value-added segment• New Almesa strategy
LatamOpportunities in Mexico: energy sector
reformOther areas by means of the new strategy
for Almesa
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September 2014REUNIDOSTUBOSGROUP
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
2003-2013
• EBITDA margin expansion of 7pp between two cyclical troughs
2014-2017:
✓✓✓✓ + Gradual volume traction
✓✓✓✓
✓✓✓✓
✓✓✓✓
✓✓✓✓
+ Mix / prices+ ProfitabilityNormalised capexStreamlined working capital requirements
2012-2013
• Strategic capex
- New products
- New processes
Tubos Reunidos’ EBITDA margin in seamless steel tubes
✓✓✓✓ Cash flow generation
New era of faster growth and enhanced profitability
6,2%
28,2%
13,3%
15,6%14,6%13,3%
New phase for growth
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September 2014REUNIDOSTUBOSGROUP
More profitable products
450
300
150
600
2014 2015 2016 2017
‣
2.4xRevenue growth +margin expansion
82,5
55
27,5
110
2014 2015 2016
1.7x‣ Growth in all segments:
seamless tubes, distribution and automotive
Consolidated EBITDA,€ million
Consolidated revenue,€ million
350
2013
598
101
42
• Margin expansion of 6percentage points:
‣
‣ Operational gearing
2013
13%
2017
19%
EBITDA margin, seamless tubes% of revenue
2013 2014 2015 2016 2017
Quantitative Objectives 2014-2017
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September 2014REUNIDOSTUBOSGROUP
Consolidated Capex,€ million
Leverage50
200
150
100
2013 2017
50
40
30
20
10
2012 2013 2014 2015 2016 2017
€108.5mn
Cash flow generation throughout the projection period is expected to drive a significant reduction in leverage without having to jeopardise the capex programme or dividend policy
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4.3x
1.2x
Quantitative Objectives 2014-2017
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4.Financials
REUNIDOSTUBOSGROUP
September 2014REUNIDOSTUBOSGROUP
Increase in Tubos Reunidos' profit in H1,in line with the targets set for 2014
Consolidated Group:H1 2014 financial performance (€ million)
Sales
Q2 2013
93,7
Net ProfitEBITDA & EBITDA Margin (%)
25
Q2 2014
108,9
+16,2%
H1 2013 H1 2014
188,9207,2
+9,7%
Q2 2013
10,911,6%)
Q2 2014
12
11%
+10,1%
H1 2013 H1 2014
21,5
11,4%
24,6
11,9%
+14,5%
Q2 2013
1,9
Q2 2014
2,1
+7,2%
H1 2013 H1 2014
3,1
4,4
+40,9%
September 2014REUNIDOSTUBOSGROUP
H1 2014 milestones
Increased sales in H1 and improvement of the product mi x, derived from transformationalCapex in 2012-2013:• Special sales grow 15% in H1 2014 vs. H1 2013• OCTG: more competitive in-house manufacture of new special steels (new degassing plant) and greater
capabilities for premium finishing processes (new heat treatment facility) • Large diameter pipes: growth of 25% vs H1 2013 (new processes that enable TR to manufacture tubes
of larger outside diameter)• Slight recovery of activity in the European Union, in a more favourable macroeconomic context• Improved demand in North American activity in the oil and gas and industrial sectors• Award of key projects in the energy generation and petrochemicals sectors, despite the ongoing
slowdown due to financial restrictions and the slower pace of growth in emerging economies
Good order book position at the end of June 2014
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The backdrop has continued to be adverse , due to the high level of competition and its efect in prices, and an unfavourable EUR/USD exchange rate, which is improving in the third quarter
Ongoing cost control and continued efforts to improve operating efficiency and productivity
September 2014REUNIDOSTUBOSGROUP
2014: Year of consolidation of 2012-2013 investments
2013: Investments focused on seamless steel tubes (85%) in order to launch new higher added-valueproducts and to boost the competitive edge:
New degassing facility in the steelworks plantNew quenching and tempering heat treatment lineNew facilities for large diameter special tubes
50% of 2012-2016 investment plan already met, at €150 million
Capital Expenditures
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2013 H1 2014
Consolidated Capex 41 10
Seamless Steel Tubes Division Capex 39 8
Consolidated D&A 25 15
September 2014REUNIDOSTUBOSGROUP
Solid financial structure, with 80% of net financial debt maturing in the long term.
Diversified financing sources, with a €59 million long-term loan from the European Investment Bank,in order to support the R&D&I investment plan.
Available credit facilities at June 2014 amounted to €61 million.
84%
Consolidated Group:Debt 1H 2014 (€ million)
Debt structureGrosss debt at June 2014
3%14%
28
77%
20%
3%Bank borrowings
EIB financing
Sales discounts and others
Maturity schedule
20%
30%
18%12%
18%
< 1 year 1 < years < 2 2 < years < 3 3 < years < 4 > 4 years
80% Long Term
September 2014REUNIDOSTUBOSGROUP
Consolidated Group Financials
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INCOME STATEMENT, Thousands of Euros H1 2014 H1 2013H1 2014 /
H1 20132013 2012
2013 /
2012
Revenue 207.223 188.947 10% 350.451 464.727 (25%)
Changes in inventory 13.462 (2.953) 1.963 240
Supplies (107.607) (83.044) (161.781) (226.403)
Personnel expenditure (55.584) (52.047) (95.952) (108.645)
Other operating expenses (40.613) (38.811) (77.819) (100.282)
Other operating income and net gains/(losses) 7.745 9.410 25.375 19.937
EBITDA 24.626 21.502 15% 42.237 49.574 (15%)
Depreciation and amortisation charge (14.743) (13.986) (24.686) (26.606)
EBIT 9.883 7.516 31% 17.551 22.968 (24%)
Financial income/(expense) (4.917) (4.808) (11.429) (10.443)
Profit before income tax 4.966 2.708 83% 6.122 12.525 (51%)
Profits tax (413) (11) 49 (1.477)
Consolidated profit for the period 4.553 2.697 69% 6.171 11.048 (44%)
Profit from minority interests (121) 449 472 (475)
Profit for the period 4.432 3.146 41% 6.643 10.573 (37%)
September 2014REUNIDOSTUBOSGROUP
Consolidated Group Financials
30
BALANCE SHEET, Thousands of Euros H1 2014 Q4 2013
NON-CURRENT ASSETS 404.361 411.801
Inventories and customers 233.600 188.107
Cash and other cash equivalents 27.227 25.791
CURRENT ASSETS 260.827 213.898
Assets held for sale 4.799 4.836
TOTAL ASSETS 669.987 630.535
NET EQUITY 250.804 246.037
DEFERRED REVENUES 9.898 10.946
Non-current provisions 14.348 15.183
Bank borrowings and other financial liabilities 169.778 169.054
Other non-current liabilities 56.047 55.656
NON-CURRENT LIABILITIES 240.173 239.893
Short-term provisions 3.554 3.839
Bank borrowings and other financial liabilities 50.687 38.568
Other current liabilities 114.871 91.252
CURRENT LIABILITIES 169.112 133.659
Liabilities held for sale - -
TOTAL LIABILITIES 669.987 630.535
Net financial debt 193.238 181.831
September 2014REUNIDOSTUBOSGROUP
Consolidated Group Financials
Consolidated RevenueThousands of Euros
Consolidated EBITDA and EBITDA MarginThousands of Euros; % of revenue
31
95.196 93.751
73.919
87.585
98.278
108.945
--
20.000
40.000
60.000
80.000
100.000
120.000
1T 2013 2T 2013 3T 2013 4T 2013 1T 2014 2T 2014
10.598 10.903
7.814
12.539 12.61612.010
11,1%11,6%
10,6%
14,3%12,8%
11,0%
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
30,0%
--
2.000
4.000
6.000
8.000
10.000
12.000
14.000
1T 2013 2T 2013 3T 2013 4T 2013 1T 2014 2T 2014
EBITDA Margin
September 2014REUNIDOSTUBOSGROUP
Consolidated Group Financials
Consolidated RevenueMillions of Euros
Consolidated EBITDA and EBITDA MarginMillions of Euros; % of revenue
32
350 404
516
586 637
728
396 378
500 465
350
--
200
400
600
800
1.000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
20 33
70
111
142 153
25
11
62
50 42
5,8%8,3%
13,6%
18,9%22,3%
21,0%
6,4%3,0%
12,5%
10,7% 12,1%
0,0%
10,0%
20,0%
30,0%
40,0%
--
20
40
60
80
100
120
140
160
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
EBITDA Margin
33
September 2014
Special Products & Integral Services Worldwide
Tubos Reunidos
GROUP
TUBOSREUNIDOS