Meudon (France), November 15th, 2024
Vallourec, a world leader in premium tubular
solutions, announces today its results for the third quarter 2024.
The Board of Directors of Vallourec SA, meeting on November 14th
2024, approved the Group's third quarter 2024 Consolidated
Financial Statements.
Third Quarter 2024 Results
- Q3
EBITDA of €168m, EBITDA margin remained strong at 19%
- Very
strong total cash generation, with €130 million in Q3
- Net debt
now €240 million, marking eighth consecutive quarter of
deleveraging
- Group
full year EBITDA guidance of €800 – €850 million
confirmed; Q4 EBITDA to increase sequentially
-
Vallourec confirms total cash generation in Q3 and future
periods will be subject to its 80 – 100% payout ratio
-
Vallourec plans to announce dividend proposal for 2025 AGM
with Full Year 2024 results
communicationa
HIGHLIGHTS
Third Quarter 2024 Results
- Group EBITDA of
€168 million, down 22% QoQ as anticipated; EBITDA margin remained
strong at 19%
- Tubes EBITDA per
tonne of €556 was down (7%) sequentially and only (1%) year over
year due to lower US OCTG prices, offset by robust international
OCTG prices and cost savings
- Mine &
Forest EBITDA of €22 million, up 43% sequentially due to improved
cost performance and down (44%) year over year due to lower
realized prices and volumes
- Adjusted free
cash flow of €183 million; total cash generation of €130
million
- Further
deleveraging during the quarter: net debt declined €124 million
sequentially to €240 million
Fourth Quarter 2024
Outlookb
- Group EBITDA to
increase versus Q3:
- In Tubes,
volumes will increase sequentially driven by higher deliveries for
both US and international markets
- In Mine &
Forest, iron ore production sold will decline sequentially due to
rainy season impact and soft export market conditions
- Net debt to be
broadly stable versus Q3 2024, driven by sequentially higher EBITDA
offset by sequentially higher capex, increased restructuring
charges & non-recurring items, and higher financial cash
out
Full Year 2024 Outlook
- Confirm full
year Group EBITDA will range between €800 and €850 million
- Confirm second
half total cash generation will be positive
- Confirm net debt
will decline versus the Q2 2024 level in H2 2024
Philippe Guillemot, Chairman of the
Board of Directors and Chief Executive Officer,
declared:
“Our third-quarter results were driven by
healthy profitability in international OCTG markets, despite the
anticipated weakness in the US OCTG market. In this context, the
Group has proven its ability to control its costs, manage its
working capital and ultimately to generate significant cash flow.
This marks the Group’s eighth consecutive quarter of deleveraging
which ended with the exit from the safeguard plan implemented in
2021.
“Over the quarter, Vallourec has once again
demonstrated its role as a key partner for offshore developments.
Thanks to its unique offering of premium seamless tubes,
accessories and associated services, Vallourec has secured a major
contract with Petrobras for the technically-sophisticated Sepia 2
and Atapu 2 projects. Elsewhere in the deepwater market, the Group
will be a key supplier for the development of TotalEnergies’
Kaminho deepwater project in Angola. We also announced an addition
to our premium offshore product offering via the acquisition of
Thermotite do Brasil (TdB). This transaction will add to our
coating capabilities in our Project Line Pipe (PLP) business by
allowing Vallourec to provide premium thermal insulation solutions
for some of the most challenging offshore projects.
“Looking ahead, we continue to see strong demand
across offshore and onshore international markets, with
opportunities stemming from a large variety of geographies and
customers. Market pricing therefore remains robust as premium tube
mills are well-utilized. Meanwhile, after several quarters of
negative market dynamics, the US OCTG market has improved recently.
We have seen a notable uptick in demand from our core US customers,
suggesting inventory levels across the industry have normalized. On
the supply side, OCTG imports have decreased over the past several
months and recent trade actions to preserve fair competition in the
US will support domestic suppliers like Vallourec. As a result,
market sources have reported an increase in spot pricing in both
September and October.
“For 2024, we reiterate our full-year
expectation of EBITDA ranging between €800 and €850 million, which
will result in healthy total cash generation. At the end of the
second quarter, we declared that our target capital structure had
been achieved, and we are well ahead of our plan to reach net debt
zero by year-end 2025. Accordingly, 80% to 100% of the total cash
generation in the third quarter 2024 and future periods will be
returned to shareholders. We are pleased to announce that we will
provide a dividend proposal for our 2025 AGM with our Full Year
2024 results communication.c”
Key Quarterly Data
|
in € million, unless noted |
Q3 2024 |
Q2 2024 |
Q3 2023 |
QoQ chg. |
YoY chg. |
|
Tubes volume sold (k tonnes) |
292 |
351 |
343 |
(59) |
(51) |
|
Iron ore volume sold (m tonnes) |
1.3 |
1.4 |
1.8 |
(0.1) |
(0.5) |
|
Group revenues |
894 |
1,085 |
1,142 |
(190) |
(248) |
|
Group EBITDA |
168 |
215 |
222 |
(46) |
(54) |
|
(as a % of revenue) |
18.8% |
19.8% |
19.5% |
(1.0) pp |
(0.7) pp |
|
Operating income (loss) |
124 |
100 |
146 |
24 |
(22) |
|
Net income, Group share |
73 |
111 |
76 |
(38) |
(3) |
|
Adj. free cash flow |
183 |
81 |
217 |
102 |
(34) |
|
Total cash generation |
130 |
41 |
150 |
89 |
(20) |
|
Net debt |
240 |
364 |
741 |
(124) |
(501) |
CONSOLIDATED RESULTS
ANALYSIS
Third Quarter Results Analysis
In Q3 2024, Vallourec recorded revenues
of €894 million, down (22%) year over year, or (18%) at constant
exchange rates. The decrease in Group revenues reflects a
(15%) volume decrease mainly driven by lower Industry volumes
following the closure of the European rolling mills, a (1%)
price/mix effect, a (2%) Mine & Forest effect, and a (4%)
currency effect.
EBITDA amounted to €168 million, or
18.8% of revenues, compared to €222 million (19.4% of
revenues) in Q3 2023. The decrease was largely
driven by lower average selling prices in Tubes in North America as
well as lower realized iron ore prices and production sold. This
was partially offset by improved Tubes results outside of North
America due to higher market pricing and the benefits of the New
Vallourec plan.
Operating income was €124
million, compared to €146 million in Q3 2023.
Financial income (loss) was (€19)
million, compared to (€22) million
in Q3 2023. Net interest income (expense) in Q3 2024 was (€6)
million compared to (€21) million in Q3 2023.
Income tax amounted to (€28)
million compared to (€44) million in Q3 2023.
This resulted in positive net income,
Group share, of €73 million, compared to €76 million in Q3
2023.
Earnings per diluted share was
€0.30 versus €0.32 in Q3 2023, reflecting the above
changes in net income as well as an increase in potentially
dilutive shares largely related to the Company’s outstanding
warrants, which are accounted for using the treasury share
method.
First Nine Month Results Analysis
In 9M 2024, Vallourec recorded revenues
of €2,969 million, down (23%) year over year, or (21%) at constant
exchange rates. The decrease in Group revenues reflects a
(20%) volume decrease mainly driven by the decrease in Industry
volumes following the closure of the European rolling mills and by
lower volumes in Oil & Gas Tubes in North America, a (0.1%)
price/mix effect, a (1%) Mine and Forest effect, and a (1%)
currency effect.
EBITDA amounted to €618 million, or
20.8% of revenues, compared to €916 million (23.9% of
revenues) over the first nine months of 2023. The
decrease was largely driven by lower average selling prices in
Tubes in North America, as well as lower iron ore production sold.
This was partly offset by improved Tubes results in International
markets due to higher market pricing and the benefits of the New
Vallourec plan.
Operating income was €397
million, compared to €661 million in 9M 2023. Operating
income was burdened by (€62) million of asset disposals,
restructuring costs and non-recurring items, largely due to costs
related to the closure of Vallourec’s German operations.
Financial income (loss) was positive at
€18 million, compared to (€92)
million in 9M 2023. Net interest income (expense) over the first
nine months of 2024 was €17 million compared to (€74) million in 9M
2023. In Q2, Vallourec’s balance sheet refinancing had a net
positive impact of approximately €70 million mainly related to the
reversal of fair value accounting on the 2026 senior notes and
State-guaranteed loan (PGE), of which €44 million impacted interest
income.
Income tax amounted to (€114)
million compared to (€167) million in 9M 2023.
This resulted in positive net income,
Group share, of €289 million, compared to €391 million in
9M 2023.
Earnings per diluted share was
€1.19 versus €1.66 in 9M 2023, reflecting the above
changes in net income as well as an increase in potentially
dilutive shares largely related to the Company’s outstanding
warrants, which are accounted for using the treasury share
method.
RESULTS ANALYSIS BY SEGMENT
Third Quarter Results Analysis
Tubes: In Q3 2024, Tubes revenues were
down (21%) year over year due to a (15%)
reduction in volume sold and a (7%) decrease in average selling
price. This decrease in volumes was largely attributable to the
closure of Vallourec’s German rolling operations as a result of the
New Vallourec plan. Tubes EBITDA decreased from €193
million in Q3 2023 to €162 million Q3 2024 due to lower
profitability in North America offset by improvements in the rest
of the world due to higher market pricing and the benefits of the
New Vallourec plan.
Mine & Forest: In Q3 2024, iron ore
production sold was 1.3 million tonnes, a decrease of ~0.5
million tonnes year over year. In Q3 2024, Mine &
Forest EBITDA reached €22 million, versus €39 million in
Q3 2023, reflecting lower sales volumes and realized price.
First Nine Month Results Analysis
Tubes: In 9M 2024, Tubes revenues were
down (22%) year over year mainly due to a
(20%) reduction in volume sold, while average selling price was
down only (3%) during the period. This decrease in shipments was
largely attributable to the closure of Vallourec’s German rolling
operations as a result of the New Vallourec plan and decreased
volume sold in North America. Tubes EBITDA decreased from
€802 million in 9M 2023 to €592 million 9M 2024 due to a
decrease in profitability in North America partly offset by
improvement in the rest of the world driven by higher market
pricing and the benefits of the New Vallourec plan.
Mine & Forest: In 9M 2024, iron ore
production sold was 4.1 million tonnes, decreasing by 1.1
million tonnes year over year. In 9M 2024, Mine &
Forest EBITDA reached €68 million, versus €137 million in
9M 2023, largely reflecting lower sales volumes, realized price,
and non-cash forest fair value revaluation effects plus higher
costs.
CASH FLOW AND FINANCIAL
POSITION
Third Quarter Cash Flow Analysis
In Q3 2024, adjusted operating cash flow
was €117 million versus €171 million in Q3 2023. The
decrease was attributable to lower EBITDA and higher financial cash
out, only partly offset by lower tax payments.
Adjusted free cash flow was €183
million, versus €217 million in Q3 2023. Lower adjusted
operating cash flow was partially offset by reduced capex versus
the prior year period. Both periods saw significant working capital
releases.
Total cash generation in Q3 2024 was
€130 million, versus €150 million in Q3 2023.
First Nine Month Cash Flow Analysis
In 9M 2024, adjusted operating cash flow
was €448 million versus €702 million in 9M 2023. The
decrease was attributable to lower EBITDA, partly offset by reduced
tax cash out.
Adjusted free cash flow was €436
million, versus €585 million in 9M 2023. Lower adjusted
operating cash flow was partially offset by a higher release in
working capital and lower capex versus the prior year period.
Total cash generation in 9M 2024 was
€273 million, versus €419 million in 9M 2023.
Net Debt and Liquidity
As of September 30,
2024, net debtd stood at €240 million, a
significant decrease compared to €570 million on December 31,
2023. Gross debt was €1,017 million, down from €1,470
million on December 31, 2023. Long-term debt was €736 million and
short-term debt totaled €281 millione.
As of September
30, 2024, the liquidity position was very strong
at €1,561 million, with €814 million of cash, availability
on our revolving credit facility (RCF) of €550 million, and
availability on an asset-backed lending facility (ABL) of €197
millionf. Both liquidity facilities were upsized and extended in
Vallourec’s April balance sheet refinancing.
FOURTH QUARTER AND FULL YEAR 2024
OUTLOOKG
In the fourth quarter of 2024, based on
our assumptions and current market conditions, Vallourec
expects:
- Group EBITDA to
increase versus Q3:
- In Tubes,
volumes will increase sequentially driven by higher deliveries for
both US and international markets
- In Mine &
Forest, iron ore production sold will decline sequentially due to
rainy season impact and soft export market conditions
- Net debt to be
broadly stable versus Q3 2024, driven by sequentially higher EBITDA
offset by sequentially higher capex, increased restructuring
charges & non-recurring items, and higher financial cash
out
For the full year 2024, based on our
assumptions and current market conditions, Vallourec confirms and
clarifies its outlook as follows:
- Confirm full
year Group EBITDA will range between €800 and €850 million:
- In Tubes, the
strong international OCTG market environment will persist, offset
by the already-realized reductions in US demand and pricing
- In Mine &
Forest, iron ore production sold is now expected to be slightly
above 5 million tonnes (previously 6 million tonnes) and EBITDA is
expected to be slightly below €100 million at current iron ore
prices (€100 million previously), with the reductions resulting
from weak export market conditions
- Confirm second
half total cash generation will be positive
- Confirm net debt
will decline versus the Q2 2024 level
Information and Forward-Looking Statements
This press release
includes forward-looking statements. These forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms as “believe”, “expect”,
“anticipate”, “may”, “assume”, “plan”, “intend”, “will”, “should”,
“estimate”, “risk” and or, in each case, their negative, or other
variations or comparable terminology. These forward-looking
statements include all matters that are not historical facts and
include statements regarding the Company’s intentions, beliefs or
current expectations concerning, among other things, Vallourec’s
results of operations, financial condition, liquidity, prospects,
growth, strategies and the industries in which they operate.
Readers are cautioned that forward-looking statements are not
guarantees of future performance and that Vallourec’s or any of its
affiliates’ actual results of operations, financial condition and
liquidity, and the development of the industries in which they
operate may differ materially from those made in or suggested by
the forward-looking statements contained in this presentation. In
addition, even if Vallourec’s or any of its affiliates’ results of
operations, financial condition and liquidity, and the development
of the industries in which they operate are consistent with the
forward-looking statements contained in this presentation, those
results or developments may not be indicative of results or
developments in subsequent periods. By their nature,
forward-looking statements involve risks and uncertainties because
they relate to events and depend on circumstances that may or may
not occur in the future. These risks include those developed or
identified in the public documents filed by Vallourec with the
French Financial Markets Authority (Autorité des marches
financiers, or “AMF”), including those listed in the “Risk Factors”
section of the Universal Registration Document filed with the AMF
on March 14, 2024, under filing number n° D. 24-0113. Accordingly,
readers of this document are cautioned against relying on these
forward-looking statements. These forward-looking statements are
made as of the date of this document. Vallourec disclaims any
intention or obligation to complete, update or revise these
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by applicable laws
and regulations. This press release does not constitute any offer
to purchase or exchange, nor any solicitation of an offer to sell
or exchange securities of Vallourec. or further information, please
refer to the website https://www.vallourec.com/en .
Presentation of Q3 2024 Results
Conference call / audio webcast on November 15th
at 9:30 am CET
- To listen to the audio webcast:
https://channel.royalcast.com/landingpage/vallourec-en/20241115_1/
- To participate
in the conference call, please dial (password: “Vallourec”):
- +44 (0) 33 0551
0200 (UK)
- +33 (0) 1 7037
7166 (France)
- +1 786 697 3501 (USA)
- Audio webcast
replay and slides will be available at:
https://www.vallourec.com/en/investors
About Vallourec
Vallourec is a world
leader in premium tubular solutions for the energy markets and for
demanding industrial applications such as oil & gas wells in
harsh environments, new generation power plants, challenging
architectural projects, and high-performance mechanical equipment.
Vallourec’s pioneering spirit and cutting edge R&D open new
technological frontiers. With close to 14,000 dedicated and
passionate employees in more than 20 countries, Vallourec works
hand-in-hand with its customers to offer more than just tubes:
Vallourec delivers innovative, safe, competitive and smart tubular
solutions, to make every project possible.
Listed on Euronext in
Paris (ISIN code: FR0013506730, Ticker VK), Vallourec is part of
the CAC Mid 60, SBF 120 and Next 150 indices and is eligible for
Deferred Settlement Service.
In the United States,
Vallourec has established a sponsored Level 1 American Depositary
Receipt (ADR) program (ISIN code: US92023R4074, Ticker: VLOWY).
Parity between ADR and a Vallourec ordinary share has been set at
5:1.
Financial Calendar
|
February 27th,
2025May 15th,
2025May 22nd,
2025 |
Publication of Fourth Quarter and Full-Year 2024 ResultsPublication
of First Quarter 2025 ResultsAnnual General Meeting |
For further information, please contact:
|
Investor relations Connor LynaghTel: +1 (713)
409-7842connor.lynagh@vallourec.com |
Press relations Taddeo - Romain Grière Tel: +33
(0) 7 86 53 17
29 romain.griere@taddeo.fr |
|
Individual shareholdersToll Free Number (from
France): 0 805 65 10 10 actionnaires@vallourec.com |
Nicolas EscoulanTel: +33 (0)6 42 19 14
74nicolas.escoulan@taddeo.fr |
APPENDICES
The Group’s reporting currency is the euro. All
amounts are expressed in millions of euros, unless otherwise
specified. Certain numerical figures contained in this document,
including financial information and certain operating data, have
been subject to rounding adjustments.
Documents accompanying this
release:
- Tubes Sales
Volume
- Mine Sales
Volume
- Foreign Exchange
Rates
- Tubes Revenues
by Geographic Region
- Tubes Revenues
by Market
- Segment Key
Performance Indicators (KPIs)
- Summary
Consolidated Income Statement
- Summary
Consolidated Balance Sheet
- Key Cash Flow
Metrics
- Summary
Consolidated Statement of Cash Flows (IFRS)
-
Indebtedness
- Liquidity
- Definitions of
Non-GAAP Financial Data
Tubes Sales Volume
|
in thousands of tonnes |
2024 |
2023 |
YoY chg. |
|
Q1 |
292 |
431 |
(32%) |
|
Q2 |
351 |
396 |
(11%) |
|
Q3 |
292 |
343 |
(15%) |
|
9M Total |
935 |
1,170 |
(20%) |
|
Q4 |
– |
382 |
– |
|
Annual Total |
– |
1,552 |
– |
Mine Sales Volume
|
in millions of tonnes |
2024 |
2023 |
YoY chg. |
|
Q1 |
1.4 |
1.5 |
(9%) |
|
Q2 |
1.4 |
1.9 |
(25%) |
|
Q3 |
1.3 |
1.8 |
(26%) |
|
9M Total |
4.1 |
5.2 |
(21%) |
|
Q4 |
– |
1.7 |
– |
|
Annual Total |
– |
6.9 |
– |
Foreign Exchange Rates
|
Average exchange rate |
Q3 2024 |
Q2 2024 |
Q3 2023 |
|
EUR / USD |
1.10 |
1.08 |
1.09 |
|
EUR / BRL |
6.09 |
5.61 |
5.31 |
|
USD / BRL |
5.54 |
5.22 |
4.88 |
Quarterly Tubes Revenues by Geographic
Region
|
in € million |
Q3 2024 |
Q2 2024 |
Q3 2023 |
QoQ% chg. |
YoY% chg. |
|
North America |
331 |
383 |
460 |
(14%) |
(28%) |
|
South America |
136 |
169 |
198 |
(19%) |
(31%) |
|
Middle East |
143 |
247 |
162 |
(42%) |
(12%) |
|
Europe |
84 |
48 |
116 |
75% |
(28%) |
|
Asia |
108 |
108 |
80 |
0% |
35% |
|
Rest of World |
40 |
76 |
52 |
(47%) |
(23%) |
|
Total Tubes |
842 |
1,030 |
1,068 |
(18%) |
(21%) |
Year-to-Date Tubes Revenues by Geographic
Region
|
in € million |
9M 2024 |
9M 2023 |
YoY% chg. |
|
North America |
1,164 |
1,781 |
(35%) |
|
South America |
458 |
616 |
(26%) |
|
Middle East |
551 |
431 |
28% |
|
Europe |
184 |
370 |
(50%) |
|
Asia |
284 |
208 |
37% |
|
Rest of World |
164 |
200 |
(18%) |
|
Total Tubes |
2,805 |
3,605 |
(22%) |
Quarterly Tubes Revenues by Market
|
in € million |
Q3 2024 |
Q2 2024 |
Q3 2023 |
QoQ% chg. |
YoY% chg. |
YoY % chg. at Const. FX |
|
Oil & Gas and Petrochemicals |
698 |
879 |
845 |
(21%) |
(17%) |
(15%) |
|
Industry |
85 |
100 |
175 |
(15%) |
(52%) |
(45%) |
|
Other |
60 |
52 |
48 |
14% |
25% |
30% |
|
Total Tubes |
842 |
1,030 |
1,068 |
(18%) |
(21%) |
(18%) |
Year-to-Date Tubes Revenues by Market
|
in € million |
9M 2024 |
9M 2023 |
YoY% chg. |
YoY % chg. at Const. FX |
|
Oil & Gas and Petrochemicals |
2,338 |
2,905 |
(20%) |
(19%) |
|
Industry |
304 |
597 |
(49%) |
(47%) |
|
Other |
163 |
103 |
58% |
62% |
|
Total Tubes |
2,805 |
3,605 |
(22%) |
(21%) |
Quarterly Segment KPIsh
| |
|
Q3 2024 |
Q2 2024 |
Q3 2023 |
QoQ chg. |
YoY chg. |
|
Tubes |
Volume sold |
292 |
351 |
343 |
(17%) |
(15%) |
|
Revenue (€m) |
842 |
1,030 |
1,068 |
(18%) |
(21%) |
|
Average Selling Price (€) |
2,888 |
2,937 |
3,115 |
(2%) |
(7%) |
|
EBITDA (€m) |
162 |
210 |
193 |
(23%) |
(16%) |
|
Capex (€m) |
25 |
23 |
44 |
8% |
(44%) |
|
Mine & Forest |
Volume sold |
1.3 |
1.4 |
1.8 |
(5%) |
(26%) |
|
Revenue (€m) |
66 |
69 |
88 |
(5%) |
(25%) |
|
EBITDA (€m) |
22 |
15 |
39 |
43% |
(44%) |
|
Capex (€m) |
11 |
5 |
6 |
100% |
67% |
|
H&O |
Revenue (€m) |
50 |
49 |
47 |
3% |
6% |
|
EBITDA (€m) |
(14) |
(13) |
(10) |
5% |
33% |
|
Int. |
Revenue (€m) |
(64) |
(64) |
(62) |
1% |
3% |
|
EBITDA (€m) |
(2) |
2 |
0 |
– |
– |
|
Total |
Revenue (€m) |
894 |
1,085 |
1,142 |
(18%) |
(22%) |
|
EBITDA (€m) |
168 |
215 |
222 |
(22%) |
(24%) |
|
Capex (€m) |
36 |
30 |
51 |
22% |
(30%) |
Year-to-Date Segment KPIsh
| |
|
9M 2024 |
9M 2023 |
YoY chg. |
|
Tubes |
Volume sold |
935 |
1,170 |
(20%) |
|
Revenue (€m) |
2,805 |
3,605 |
(22%) |
|
Average Selling Price (€) |
3,001 |
3,081 |
(3%) |
|
EBITDA (€m) |
592 |
802 |
(26%) |
|
Capex (€m) |
93 |
150 |
(38%) |
|
Mine & Forest |
Volume sold |
4.1 |
5.2 |
(21%) |
|
Revenue (€m) |
215 |
274 |
(21%) |
|
EBITDA (€m) |
68 |
137 |
(50%) |
|
Capex (€m) |
25 |
19 |
33% |
|
H&O |
Revenue (€m) |
144 |
144 |
(0%) |
|
EBITDA (€m) |
(40) |
(20) |
102% |
|
Int. |
Revenue (€m) |
(194) |
(186) |
5% |
|
EBITDA (€m) |
(1) |
(3) |
– |
|
Total |
Revenue (€m) |
2,969 |
3,838 |
(23%) |
|
EBITDA (€m) |
618 |
916 |
(33%) |
|
Capex (€m) |
121 |
170 |
(29%) |
Quarterly Summary Consolidated Income
Statement
|
€ million, unless noted |
Q3 2024 |
Q2 2024 |
Q3 2023 |
QoQ chg. |
YoY chg. |
|
Revenues |
894 |
1,085 |
1,142 |
(190) |
(248) |
|
Cost of sales |
(633) |
(774) |
(818) |
141 |
185 |
|
Industrial margin |
262 |
311 |
324 |
(49) |
(62) |
|
(as a % of revenue) |
29.3% |
28.6% |
28.4% |
0.6 pp |
0.9 pp |
|
Selling, general and administrative expenses |
(84) |
(91) |
(85) |
7 |
1 |
|
(as a % of revenue) |
(9.4%) |
(8.4%) |
(7.4%) |
(1.0) pp |
(2.0) pp |
|
Other |
(9) |
(5) |
(17) |
(4) |
8 |
|
EBITDA |
168 |
215 |
222 |
(46) |
(54) |
|
(as a % of revenue) |
18.8% |
19.8% |
19.4% |
(1.0) pp |
(0.6) pp |
|
Depreciation of industrial assets |
(46) |
(44) |
(41) |
(2) |
(5) |
|
Amortization and other depreciation |
(8) |
(8) |
(9) |
0 |
1 |
|
Impairment of assets |
(5) |
3 |
– |
(8) |
(5) |
|
Asset disposals, restructuring costs and non-recurring items |
15 |
(65) |
(26) |
80 |
41 |
|
Operating income (loss) |
124 |
100 |
146 |
24 |
(22) |
|
Financial income (loss) |
(19) |
57 |
(22) |
(75) |
3 |
|
Pre-tax income (loss) |
105 |
156 |
124 |
(51) |
(19) |
|
Income tax |
(28) |
(40) |
(44) |
13 |
16 |
|
Share in net income (loss) of equity affiliates |
(0) |
0 |
0 |
(0) |
(0) |
|
Net income |
78 |
116 |
81 |
(39) |
(3) |
|
Attributable to non-controlling interests |
5 |
5 |
5 |
(1) |
(0) |
|
Net income, Group share |
73 |
111 |
76 |
(38) |
(3) |
|
|
|
|
|
|
|
|
Basic earnings per share (€) |
0.32 |
0.48 |
0.33 |
(0.17) |
(0.01) |
|
Diluted earnings per share (€) |
0.30 |
0.46 |
0.32 |
(0.16) |
(0.02) |
|
|
|
|
|
|
|
|
Basic shares outstanding (millions) |
230 |
230 |
230 |
0 |
0 |
|
Diluted shares outstanding (millions) |
244 |
241 |
236 |
3 |
8 |
Year-to-Date Summary Consolidated Income
Statement
|
€ million, unless noted |
9M 2024 |
9M 2023 |
YoY chg. |
|
Revenues |
2,969 |
3,838 |
(868) |
|
Cost of sales |
(2,076) |
(2,634) |
558 |
|
Industrial margin |
893 |
1,204 |
(311) |
|
(as a % of revenue) |
30.1% |
31.4% |
(1.3) pp |
|
Selling, general and administrative expenses |
(263) |
(248) |
(15) |
|
(as a % of revenue) |
(8.8%) |
(6.5%) |
(2.4) pp |
|
Other |
(13) |
(40) |
27 |
|
EBITDA |
618 |
916 |
(298) |
|
(as a % of revenue) |
20.8% |
23.9% |
(3.1) pp |
|
Depreciation of industrial assets |
(135) |
(126) |
(9) |
|
Amortization and other depreciation |
(25) |
(28) |
3 |
|
Impairment of assets |
1 |
(8) |
9 |
|
Asset disposals, restructuring costs and non-recurring items |
(62) |
(94) |
33 |
|
Operating income (loss) |
397 |
661 |
(264) |
|
Financial income (loss) |
18 |
(92) |
110 |
|
Pre-tax income (loss) |
415 |
569 |
(154) |
|
Income tax |
(114) |
(167) |
53 |
|
Share in net income (loss) of equity affiliates |
1 |
– |
1 |
|
Net income |
302 |
402 |
(100) |
|
Attributable to non-controlling interests |
13 |
11 |
2 |
|
Net income, Group share |
289 |
391 |
(102) |
|
|
|
|
|
|
Basic earnings per share (€) |
1.26 |
1.71 |
(0.45) |
|
Diluted earnings per share (€) |
1.19 |
1.66 |
(0.47) |
|
|
|
|
|
|
Basic shares outstanding (millions) |
230 |
229 |
1 |
|
Diluted shares outstanding (millions) |
243 |
236 |
8 |
Summary Consolidated Balance
Sheet
|
In € million |
|
|
|
|
|
|
Assets |
30-Sep-24 |
31-Dec-23 |
Liabilities |
30-Sep-24 |
31-Dec-23 |
|
|
|
|
Equity - Group share |
2,303 |
2,157 |
|
Net intangible assets |
34 |
42 |
Non-controlling interests |
78 |
67 |
|
Goodwill |
36 |
40 |
Total equity |
2,381 |
2,224 |
|
Net property, plant and equipment |
1,809 |
1,980 |
Bank loans and other borrowings |
736 |
1,348 |
|
Biological assets |
60 |
70 |
Lease debt |
30 |
40 |
|
Equity affiliates |
16 |
16 |
Employee benefit commitments |
80 |
102 |
|
Other non-current assets |
123 |
159 |
Deferred taxes |
83 |
83 |
|
Deferred taxes |
192 |
209 |
Provisions and other long-term liabilities |
249 |
317 |
|
Total non-current assets |
2,270 |
2,516 |
Total non-current liabilities |
1,179 |
1,890 |
|
Inventories |
1,231 |
1,242 |
Provisions |
126 |
249 |
|
Trade and other receivables |
586 |
756 |
Overdraft & other short-term borrowings |
281 |
122 |
|
Derivatives - assets |
42 |
47 |
Lease debt |
14 |
17 |
|
Other current assets |
247 |
251 |
Trade payables |
812 |
763 |
|
Cash and cash equivalents |
814 |
900 |
Derivatives - liabilities |
111 |
79 |
|
Other current liabilities |
286 |
370 |
|
Total current assets |
2,920 |
3,196 |
Total current liabilities |
1,631 |
1,600 |
|
Assets held for sale and discontinued
operations |
1 |
1 |
Liabilities held for sale and discontinued operations |
– |
– |
|
Total assets |
5,191 |
5,713 |
Total equity and liabilities |
5,191 |
5,713 |
Quarterly Key Cash Flow
Metrics
|
In € million |
Q3 2024 |
Q2 2024 |
Q3 2023 |
QoQ chg. |
YoY chg. |
|
EBITDA |
168 |
215 |
222 |
(46) |
(54) |
|
Non-cash items in EBITDA |
(14) |
(0) |
11 |
(14) |
(25) |
|
Financial cash out |
(17) |
(65) |
(8) |
48 |
(9) |
|
Tax payments |
(20) |
(54) |
(54) |
34 |
34 |
|
Adjusted operating cash flow |
117 |
96 |
171 |
22 |
(54) |
|
Change in working capital |
102 |
15 |
97 |
87 |
5 |
|
Gross capital expenditure |
(36) |
(30) |
(51) |
(6) |
15 |
|
Adjusted free cash flow |
183 |
81 |
217 |
102 |
(34) |
|
Restructuring charges & non-recurring items |
(73) |
(71) |
(63) |
(2) |
(10) |
|
Asset disposals & other cash items |
19 |
31 |
(4) |
(12) |
24 |
|
Total cash generation |
130 |
41 |
150 |
89 |
(20) |
|
Non-cash adjustments to net debt |
(6) |
80 |
(23) |
(85) |
17 |
|
(Increase) decrease in net debt |
124 |
121 |
127 |
3 |
(3) |
Year-to-Date Key Cash Flow
Metrics
|
In € million |
9M 2024 |
9M 2023 |
YoY chg. |
|
EBITDA |
618 |
916 |
(298) |
|
Non-cash items in EBITDA |
(4) |
3 |
(7) |
|
Financial cash out |
(77) |
(87) |
10 |
|
Tax payments |
(89) |
(130) |
41 |
|
Adjusted operating cash flow |
448 |
702 |
(254) |
|
Change in working capital |
109 |
53 |
56 |
|
Gross capital expenditure |
(121) |
(170) |
49 |
|
Adjusted free cash flow |
436 |
585 |
(149) |
|
Restructuring charges & non-recurring items |
(210) |
(169) |
(42) |
|
Asset disposals & other cash items |
47 |
3 |
45 |
|
Total cash generation |
273 |
419 |
(146) |
|
Non-cash adjustments to net debt |
57 |
(30) |
87 |
|
(Increase) decrease in net debt |
330 |
389 |
(59) |
Summary Consolidated Statement of Cash
Flows (IFRS)
|
In € million |
9M 2024 |
9M 2023 |
YoY chg. |
|
Consolidated net income (loss) |
302 |
402 |
(100) |
|
Net additions to depreciation, amortization and provisions |
(2) |
85 |
(87) |
|
Unrealized gains and losses on changes in fair value |
20 |
7 |
12 |
|
Capital gains and losses on disposals |
(12) |
(3) |
(9) |
|
Share in income (loss) of equity-accounted companies |
(1) |
(1) |
(0) |
|
Other cash flows from operating activities |
(33) |
– |
(33) |
|
Cash flow from (used in) operating activities after cost of
net debt and taxes |
274 |
491 |
(217) |
|
Cost of net debt |
(17) |
74 |
(91) |
|
Tax expense (including deferred taxes) |
114 |
167 |
(53) |
|
Cash flow from (used in) operating activities before costs
of net debt and taxes |
371 |
732 |
(361) |
|
Interest paid |
(75) |
(88) |
13 |
|
Tax paid |
(89) |
(130) |
42 |
|
Interest received |
29 |
20 |
8 |
|
Other cash flow on financial income |
– |
– |
– |
|
Cash flow from (used in) operating activities |
237 |
534 |
(297) |
|
Change in operating working capital |
109 |
53 |
57 |
|
Net cash flow from (used in) operating activities
(A) |
346 |
587 |
(241) |
|
Acquisitions of property, plant and equipment and intangible
assets |
(121) |
(170) |
49 |
|
Disposals of property, plant and equipment and intangible
assets |
40 |
25 |
15 |
|
Impact of acquisitions (changes in consolidation scope) |
3 |
(0) |
3 |
|
Impact of disposals (changes in consolidation scope) |
– |
2 |
(2) |
|
Other cash flow from investing activities |
0 |
0 |
(0) |
|
Net cash flow from (used in) investing activities
(B) |
(78) |
(143) |
65 |
|
Increase or decrease in equity attributable to owners |
– |
– |
– |
|
Dividends paid to non-controlling interests |
(1) |
(4) |
3 |
|
Proceeds from new borrowings |
759 |
2 |
757 |
|
Repayment of borrowings |
(1,130) |
(30) |
(1,100) |
|
Repayment of lease liabilities |
(17) |
(17) |
0 |
|
Other cash flow used in financing activities |
21 |
(3) |
24 |
|
Net cash flow from (used in) financing activities
(C) |
(368) |
(52) |
(316) |
|
Change in net cash (A+B+C) |
(101) |
392 |
(492) |
|
Opening net cash |
898 |
547 |
|
|
Change in net cash |
(101) |
392 |
|
|
Impact of changes in exchange rates |
10 |
(0) |
|
|
Impact of reclassification to assets held for sale and discontinued
operations |
– |
– |
|
|
Closing net cash |
808 |
938 |
|
Indebtedness
|
In € million |
30-Sep-24 |
31-Dec-23 |
|
8.500% 5-year EUR Senior Notes due 2026 |
– |
1,105 |
|
7.500% 8-year USD Senior Notes due 2032 |
714 |
– |
|
1.837% PGE due 2027 (a) |
194 |
229 |
|
ACC ACE (b) |
63 |
94 |
|
Other |
46 |
42 |
|
Total gross financial indebtedness |
1,017 |
1,470 |
|
Cash and cash equivalents |
814 |
900 |
|
Fair value of cross currency swap (c) |
36 |
– |
|
Total net financial indebtedness |
240 |
570 |
(a) Depending on the outcome of
ongoing discussions with the PGE lenders, this remaining amount may
be repaid by end of December 2024, as reflected in the financial
statements, or by its original maturity in June 2027.
(b) Refers to ACC (Advances on
Foreign Exchange Contract) and ACE (Advances on Export Shipment
Documents) program in Brazil
(c) Vallourec entered into
4-year cross-currency swaps (CCS) to hedge the EUR/USD currency
exposure related to its USD 2032 Senior Notes. The fair value of
the CCS related to the EUR/USD hedging of the principal of the
notes is consequently included in the net debt definition.
Liquidity
|
In € million |
30-Sep-24 |
31-Dec-23 |
|
Cash and cash equivalents |
814 |
900 |
|
Available RCF |
550 |
462 |
|
Available ABL (a) |
197 |
177 |
|
Total liquidity |
1,561 |
1,539 |
(a) This $350m committed ABL is
subject to a borrowing base calculation based on eligible accounts
receivable and inventories, among other items. The borrowing base
is currently approximately $230m. Availability is shown net of
approximately $9m of letters of credit and other items.
DEFINITIONS OF NON-GAAP FINANCIAL
DATA
Adjusted free cash flow is
defined as adjusted operating cash flow +/- change in operating
working capital and gross capital expenditures. It corresponds to
net cash used in operating activities less restructuring and
non-recurring items +/- gross capital expenditure.
Adjusted operating cash flow is
defined as EBITDA adjusted for non-cash benefits and expenses,
financial cash out and tax payments.
Asset disposals and other cash
items includes cash inflows from asset sales as well as
other investing and financing cash flows.
Change in working capital
refers to the change in the operating working capital
requirement.
Data at constant exchange
rates: The data presented “at constant exchange rates” is
calculated by eliminating the translation effect into euros for the
revenue of the Group’s entities whose functional currency is not
the euro. The translation effect is eliminated by applying Year N-1
exchange rates to Year N revenue of the contemplated entities.
EBITDA: Earnings Before
Interest, Taxes, Depreciation and Amortization is calculated by
taking operating income (loss) before depreciation and
amortization, and excluding certain operating revenues and expenses
that are unusual in nature or occur rarely, such as:
- impairment of
goodwill and non-current assets as determined within the scope of
impairment tests carried out in accordance with IAS 36;
- significant
restructuring expenses, particularly resulting from headcount
reorganization measures, in respect of major events or
decisions;
- capital gains or
losses on disposals;
- income and
expenses resulting from major litigation, significant roll-outs or
capital transactions (e.g., costs of integrating a new
activity).
Financial cash out includes
interest payments on financial and lease debt, interest income and
other financial costs.
Free cash flow, as previously
defined, may continue to be derived as follows: total cash
generation - asset disposals & other cash items. This is also
defined as EBITDA adjusted for changes in provisions, less interest
and tax payments, changes in working capital, less gross capital
expenditures, and less restructuring/other cash outflows.
Gross capital expenditure:
gross capital expenditure is defined as the sum of cash outflows
for acquisitions of property, plant and equipment and intangible
assets and cash outflows for acquisitions of biological assets.
(Increase) decrease in net debt
(alternatively, “change in net debt”) is defined as total cash
generation +/- non-cash adjustments to net debt.
Industrial margin: The
industrial margin is defined as the difference between revenue and
cost of sales (i.e. after allocation of industrial variable costs
and industrial fixed costs), before depreciation.
Lease debt is defined as the
present value of unavoidable future lease payments.
Net debt: Consolidated net debt
(or “net financial debt”) is defined as bank loans and other
borrowings plus overdrafts and other short-term borrowings minus
cash and cash equivalents plus the fair value of the cross-currency
swaps related to the EUR/USD hedging of the principal of the $820
million 7.5% senior notes. Net debt excludes lease debt.
Net working capital requirement
is defined as working capital requirement net of provisions for
inventories and trade receivables; net working capital requirement
days are computed on an annualized quarterly sales basis.
Non-cash adjustments to net
debt includes non-cash foreign exchange impacts on debt
balances, IFRS-defined fair value adjustments on debt balances, and
other non-cash items.
Non-cash items in EBITDA
includes provisions and other non-cash items in EBITDA.
Operating working capital
requirement includes working capital requirement as well
as other receivables and payables.
Restructuring charges and non-recurring
items consists primarily of the cash costs of executing
the New Vallourec plan, including severance costs and other
facility closure costs.
Total cash generation is
defined as adjusted free cash flow +/- restructuring charges and
non-recurring items and asset disposals & other cash items. It
corresponds to net cash used in operating activities +/- gross
capital expenditure and asset disposals & other cash items.
Working capital requirement is
defined as trade receivables plus inventories minus trade payables
(excluding provisions).
a Vallourec’s dividend policy would in any event
be conditional upon the Board’s decision taking into account
Vallourec’s results, its financial position including the
deleveraging target and the potential restrictions applicable to
the payment of dividends. Dividends would also be subject to
shareholders’ approval.
b In all cases, total cash generation and net
debt guidance excludes the potential positive impact of major asset
sales. See further details regarding the fourth quarter and full
year 2024 outlook at the end of this press release.
c Vallourec’s dividend policy would in any event
be conditional upon the Board’s decision taking into account
Vallourec’s results, its financial position including the
deleveraging target and the potential restrictions applicable to
the payment of dividends. Dividends would also be subject to
shareholders’ approval.
d Vallourec entered into 4-year cross-currency
swaps (CCS) to hedge the EUR/USD currency exposure related to its
USD 2032 Senior Notes. The fair value of the CCS related to the
EUR/USD hedging of the principal of the notes is consequently
included in the net debt definition.
e Short-term debt includes €194 million of
remaining PGE (prêts garantis par l'État) outstanding. Depending on
the outcome of ongoing discussions with the PGE lenders, this
remaining amount may be repaid by end of December 2024, as
reflected in the financial statements, or by its original maturity
in June 2027.
f As of September 30, 2024, the borrowing base
for this facility was approximately $230 million, and $9 million in
letters of credit and other commitments were issued.
g In all cases, total cash generation and net
debt guidance excludes the potential positive impact of major asset
sales.
h Volume sold in thousand tonnes for Tubes and
million tonnes for Mine & Forest. H&O = Holding &
Other; Int = Intersegment Transactions. Values for percentage
changes not shown where not meaningful.
- Vallourec Q3 & 9M 2024 Results Press Release
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