Vallourec reports
third quarter and first
nine months
2021
results
Meudon
(France), November
17th
2021 –
Vallourec, a world leader in premium tubular solutions, announces
today its results for the third quarter and first nine months 2021.
The Board of Directors of Vallourec SA, meeting on November 17th
2021, approved the Group's third quarter and first nine months 2021
accounts.
Q3
2021: solid
year-on-year revenue and
EBITDA growth
driven by the dynamism of the Oil &
Gas market in North America and the
strong mine contribution
- €834 million
revenue, up 16.4%
- €128 million
EBITDA, up 80%, EBITDA margin increasing to 15.3% vs. 9.9% in Q3
2020
- Free cash flow
at (€103) million versus €35 million in Q3 2020, driven by a
working capital rebuilt for (€93) million along with stronger
activity
- Acquisition of
the minority shares of VAM USA and Vallourec Star for an amount of
€118 million, leading to full ownership of all North American
entities
- As of September
30th, 2021, strong liquidity position at €1,014 million
|
A decisive move to strengthen Vallourec competitiveness and
profitability: launch of the
disposal process of the German
assets and progressive relocation
of their Oil & Gas activities to
Brazil to serve international market
- A
two-legged
transformation
- Launch of the
disposal process of German assets
- Progressive transfer of their rolling activity for Oil &
Gas to Brazil
- Game
changer for Vallourec’s performance in international
Oil & Gas markets
- Brazilian hub to
deliver the full range of premium tubular products to international
markets
- Allowing better
competitiveness and enhanced margin and cash flow generation
- And positive CO2
impact, driven by the excellent carbon footprint of Brazilian
operations
- Clear
benefits for Vallourec and its stakeholders
- €130 million run
rate EBITDA increase
- €20 million Capex reduction
- -30% reduction
of CO2 content of tubes produced in Brazil vs.
Germany
|
2021 Outlook As
a result of the recent decline in iron ore prices, and based on
their current level, Vallourec targets full year EBITDA close to
the lower end of the €475 to €525 million target communicated on
July 21st, 2021. Stronger than anticipated order momentum leading
into 2022 combined with the evolution of raw material and energy
prices will result in a larger increase in inventories through year
end. As a result, Vallourec now targets free cash flow consumption
for 2021 to be between €(380) and (300) million, representing
mainly the rebuilding of working capital along with the activity
recovery, and inclusive of one-time costs associated with the
financial restructuring. |
Edouard
Guinotte, Chairman
of the Board of Directors and
Chief Executive Officer,
declared:
“With the global economy recovering post-Covid,
Vallourec confirmed its good operating momentum in the third
quarter with a solid revenue and EBITDA growth. The Group benefited
from increased activity and pricing on the North American Oil &
Gas market and a strong contribution from its iron ore mine in
Brazil as well as the positive effects of its savings initiatives,
while deliveries to the EA-MEA Oil & Gas sector remained
significantly below their pre-crisis levels.
Looking ahead towards the end of 2021, we expect
our Mining activity to reflect the recent decline of iron ore
prices. However, we expect to continue benefiting from increased
activity in North America and build up our order book for EA-MEA
Oil & Gas markets.
While our highly efficient production hubs in
North America, Brazil and China allow us to benefit from improving
market dynamics, our operations in Germany are still
underperforming despite several improvement steps. With a view to
achieving a step-change in the Group’s competitiveness on
International markets, today we are launching the disposal process
of our German assets and the upgrade of our capabilities in Brazil.
This will drive our Brazilian operations to deliver the full range
of our premium offer to their local customers and international
markets and allow Vallourec to fully benefit from their extreme
competitiveness as well as their lower CO2 content.
I am expecting this transformational project to
restore and sustain Vallourec’s leadership and profitability on
EA-MEA markets.”
Key figures
9 Months 2021 |
9 Months 2020 |
Change |
In € million |
Q3 2021 |
Q3 2020 |
Change |
1,130 |
1,191 |
-5.1% |
Production shipped (k tons) |
391 |
319 |
22.8% |
2,378 |
2,412 |
-1.4% |
Revenue |
834 |
716 |
16.4% |
356 |
182 |
+€174m |
EBITDA |
128 |
71 |
+€57m |
15.0% |
7.5% |
+7.5p.p. |
(as a % of revenue) |
15.3% |
9.9% |
+5.4p.p. |
299 |
(507) |
+€806m |
Operating income (loss) |
72 |
7 |
+€65m |
(49) |
(636) |
+€587m |
Net income, Group share |
(7) |
(69) |
+€62m |
(300) |
(223) |
-€77m |
Free cash-flow |
(103) |
35 |
-€138m |
993 |
2,329 |
-€1,336m |
Net debt |
993 |
2,329 |
-€1,336m |
I - CONSOLIDATED
REVENUE BY MARKET
9 Months 2021 |
9 Months 2020 |
Change |
At constant exchange rates |
In € million |
Q3 2021 |
Q3 2020 |
Change |
At constant exchange rates |
1,343 |
1,641 |
-18.1% |
-13.6% |
Oil & Gas, Petrochemicals |
456 |
443 |
3.0% |
1.8% |
937 |
601 |
55.9% |
67.8% |
Industry & Other |
348 |
208 |
67.2% |
64.2% |
98 |
170 |
-42.6% |
-42.4% |
Power Generation |
30 |
65 |
-54.4% |
-56.2% |
2,378 |
2,412 |
-1.4% |
4.7% |
Total |
834 |
716 |
16.4% |
14.6% |
Over the third
quarter of
2021,
Vallourec recorded a
€834 million
revenue, up
16.4%
compared with
the third quarter
of 2020
(+15%
at constant exchange
rates)
with:
- a +23% volume increase mainly
driven by Oil & Gas in North America and Industry &
Other
- a -8% price/mix due to Oil &
Gas in EA-MEA more than offsetting the rebound in prices in North
America
- a +2% currency conversion effect
mainly related to EUR/BRL.
Over the first nine
months of
2021,
revenue totaled
€2,378
million, almost stable
versus the first nine
months of 2020 (+4.7% at
constant exchange rate) with:
- a -5% volume effect due to Oil
& Gas in EA-MEA and to a lesser extent in North America, partly
offset by higher deliveries in Industry and Other.
- a +10% price/mix effect mainly
driven by iron ore prices and Oil & Gas in North America.
- a -6% currency conversion effect
mainly related to EUR/BRL.
Oil & Gas, Petrochemicals
(54.7% of
Q3
2021
consolidated
revenue)
In Q3
2021, Oil & Gas
revenue reached
€408
million, stable
year-on-year
(-1%
at constant exchange rates).
- In North
America, Oil & Gas revenue more than doubled thanks to
higher volumes and prices.
- In EA-MEA, Oil
& Gas revenue decreased, reflecting lower shipments as well as
an unfavorable price/mix, resulting from the reduced backlog built
during Covid-19 crisis
- In South
America, Oil & Gas revenue increased, reflecting
mainly higher deliveries of project line pipes projects.
Over the first
nine months of
2021,
Oil & Gas revenue totaled
€1,209 million,
a
(€271)
million decrease
or -18%
year-on-year
(-14%
at constant exchange
rates), mainly due to lower
shipments in EA-MEA and to a lesser extent in North America.
In Q3
2021, Petrochemicals
revenue was
€48
million, up
+43%
year-on-year
(+40% at
constant exchange rates) notably due to a better price/mix
and to an increase in deliveries in North America and South
America.Over the first nine months
of
2021,
Petrochemicals revenue totaled €134 million, down 17% year-on-year
(-13% at constant exchange rates).
In Q3
2021,
revenue for Oil & Gas and Petrochemicals amounted
to
€456
million, up
3% compared with Q3 2020 (+2% at
constant exchange rates).Over the first
nine months of
2021,
revenue for Oil & Gas and Petrochemicals
totaled €1,343
million, down
-18% compared
with 9M 2020 (-14% at constant exchange rates).
Industry & Other
(41.7% of
Q3
2021
consolidated
revenue)
Industry & Other
revenue amounted to
€348 million in
Q3
2021,
increasing by
67% year-on-year
(+64% at
constant exchange rates):
- In Europe, Industry revenue was up
reflecting higher volumes.
- In South America, Industry &
Other revenue was up mainly driven by the mine, reflecting higher
iron ore prices while volumes remained stable at 2.2Mt. Higher
sales were as well recorded in Industry markets driven by increased
volumes and prices.
Over the first nine
months of
2021,
Industry & Other revenue totaled
€937
million, up
+56%
year-on-year (+68% at constant exchange rates) as a result of a
higher contribution from the mine (reflecting higher iron ore
prices and volumes at 6.5Mt versus 5.6Mt over the first nine months
of 2020) and of higher deliveries in Industry markets in Europe and
South America, despite an unfavorable currency conversion
effect.
Power Generation
(3.6%
of Q3
2021 consolidated
revenue)
Power Generation
revenue amounted to
€30
million in Q3
2021,
down 54%
year-on-year (-56% at constant exchange rates), reflecting
notably the disposal of Valinox Nucléaire SAS on May 31st 2021.
For the first nine
months of
2021,
revenue totaled €98
million, down
43% year-on-year (-42% at
constant exchange rates).
II
– CONSOLIDATED RESULTS
ANALYSIS
Q3
2021
consolidated results analysis
In Q3
2021,
EBITDA reached
€128
million (compared with €71 million in Q3 2020),
and EBITDA
margin
15.3%
of revenue (versus 9.9% in Q3 2020), as a result
of:
- An industrial margin of €207
million, or 24.8% of revenue, versus €154 million and 21.5% of
revenue in Q3 2020. Higher deliveries and prices in Oil & Gas
in North America, the higher contribution of the mine in volume and
prices as well as savings did largely more than offset the lower
activity in Oil & Gas in EA-MEA, and the increase in raw
material and energy costs.
- A 3% decrease in sales, general and
administrative costs (SG&A) at €75 million or 9.0% of revenue
versus 10.8% in Q3 2020.
Operating
income was
positive at
€72
million, compared to €7 million
in Q3 2020, resulting mainly from the EBITDA improvement.
Financial
income was negative at
(€36)
million, compared with (€64) million
in Q3 2020, reflecting the new balance sheet structure.
Income tax amounted to
(€41)
million mainly related to Brazil, compared to (€21)
million in Q3 2020.
This resulted in a
net income, Group
share, of
(€7)
million, compared to (€69)
million in Q3 2020.
9M
2021
consolidated results analysis
Over the first nine months of
2021, EBITDA reached
€356
million, a
€174
million increase
year-on-year,
at
15.0%
of revenue, including:
- An industrial margin of €618
million, or 26% of revenue, up 37% year-on-year, reflecting a
higher contribution of the mine in volume and prices, a higher
activity for Oil & Gas in North America and in Industry markets
along with savings more than offsetting lower activity in Oil &
Gas in EA-MEA.
- Sales, general and administrative
costs (SG&A) down 7% at €233 million, reflecting adaptation
measures, and representing 9.8% of revenue.
Operating
income was positive at
€299
million compared
to a loss of
(€507) million
in 9M 2020
(which was negatively impacted by impairment charges for €441
million and by restructuring costs), resulting from the improvement
in EBITDA, lower depreciation of industrial assets and the positive
effects from the sale of Reisholz buildings and land as well as
from the favorable Brazilian Supreme Court decision on PIS/COFINS
tax claim.
Financial
income was negative at
(€211)
million, compared to (€179) million
in 9M 2020. Net interest expenses amounted to €126 million versus
€149 million in 9M 2020, reflecting our new balance sheet structure
in Q3. Other financial income of (€42) million, compared with +€15
million in 9M 2020, included notably one-offs such as the positive
effects of the PIS/COFINS tax litigation in Brazil for €28 million
and the actualization of the DBOT leasing debt for €24 million
resulting from exercising the repurchase option, more than offset
by (€70) million cost of exercising the option of DBOT repurchase
as well as the net impact of the financial restructuring for (€42)
million.
Income tax amounted to
(€141)
million mainly related to Brazil.
As a result, net
income,
Group share, amounted to
(€49)
million, compared to (€636) million in 9M
2020.
III
- CASH FLOW & FINANCIAL
POSITION
Cash flow from operating
activitiesIn
Q3
2021,
cash flow from operating activities
was positive at
€18
million,
compared to (€32) million in Q3 2020, reflecting mainly the
improved EBITDA and the lower financial interests paid, partly
offset by higher tax.For the first nine months
of
2021,
cash flow from operating activities
was positive at
€16 million compared to
(€128) million in 9M 2020, mainly due to higher EBITDA and lower
financial interests paid, more than offsetting increased tax. It
included debt restructuring fees (€56 million) and adaptation
measures (€30 million).
Operating working capital
requirementOperating working
capital requirement
increased by
(€93)
million in
Q3
2021, versus a decrease of €94
million in Q3 2020, mainly as a result of activity increase.
Net working capital requirement decreased to 111 days of sales,
compared to 120 days in Q3 2020.For the first nine
months of 2021,
operating working capital requirement
increased by
(€232)
million versus an increase of (€5) million in 9M
2020.
CapexCapital
expenditure was
(€28)
million in Q3
2021, compared with (€27) million
in Q3 2020, and was (€84)
million in 9M
2021 compared to
(€90) million in 9M 2020.
Free cash flowAs a result,
in Q3
2021,
free cash flow was
negative (€103)
million versus €35 million in Q3 2020. Free cash flow
for 9M
2021 was
negative (€300)
million, compared with (€223) million in 9M 2020.
Asset disposals &
other itemsAsset disposals & other items
amounted to
(€171)
million in Q3
2021 resulting mainly from the
acquisition of minority shares in VAM USA for €35 million and in
Vallourec Star for €83 million. It also included accrued interest
on bonds (for €23 million) and cash collateral related to bank
guarantees (for €25 million).For
9M
2021,
asset disposals & other items
amounted to
€1,520
million mainly as a result of the financial
restructuring.
Net debt and
liquidityAs at September 30th 2021, net debt stood at €993
million, compared with €720 million on June 30th 2021.As at
September 30th 2021, gross debt amounted to €1,545 million
including €96 million of fair value adjustment under IFRS 9 (which
will be reversed over the life of the debt). Long-term debt
amounted to €1,392 million and short-term debt totaled €153
million.As at September 30th 2021, lease debt stood at €71 million,
compared with €75 million on June 30th 2021.Liquidity position was
€1,014 million, with cash amounting to €552 million and undrawn
committed Revolving Credit Facility to €462 million.
IV – 2021
OUTLOOK
Oil & Gas
In North America, the Oil &
Gas market improvement continues to be driven by the significant
increase in prices, in addition to the progressive recovery in
volumes.In EA-MEA, 2021 remains significantly
impacted by the sharp slowdown in order intake in 2020. Tendering
activity has started to resume and should positively impact 2022
deliveries.In Brazil, Oil & Gas volumes
delivered in 2021 are confirmed to increase compared with 2020.
Industry & Other
In Europe, the ongoing economic
recovery should continue having a positive impact on volumes.
However, the overall environment of high raw material and energy
inflation should weigh on results. In
Brazil, the activity in Industry markets is expected to be
maintained at a high level and to benefit from favorable prices.An
higher contribution is expected from the iron ore mine compared to
2020, although prices are experiencing a sharper decrease than
anticipated in H2.
Cost savings
Cost saving initiatives are progressing in line
with the Group’s targets.A strict cash control will be maintained,
and the capex envelope is kept at c.€160 million.
EBITDA and Free Cash Flow
As a result of the recent decline in iron ore
prices, and based on their current level, Vallourec targets full
year EBITDA close to the lower end of the €475 to €525 million
target communicated on July 21st, 2021. Stronger than anticipated
order momentum leading into 2022 combined with the evolution of raw
material and energy prices will result in a larger increase in
inventories through year end. As a result, Vallourec now targets
free cash flow consumption for 2021 to be between €(380) and (300)
million, representing mainly the rebuilding of working capital
along with the activity recovery, and inclusive of one-time costs
associated with the financial restructuring.
V – A decisive move to
strengthen Vallourec’s
competitiveness and profitability:
launching the disposal process
of all German assets and relocation of their
Oil &
Gas activities in Brazil
to serve international
markets
Vallourec has implemented
several steps over the
last years to strengthen its industrial footprint’s
competitiveness
Vallourec’s industrial
footprint has been rebalanced towards its most
competitive manufacturing routes over the last
years
The European share of Vallourec’s rolling
capacities dropped from approximatively 45% in 2016 to less than
30% in 2020. This rebalancing towards the Brazilian and Chinese
most competitive routes was coupled with their increased
utilization to serve EA-MEA customers (62% of premium OCTG and PLP
orders that can be served indifferently from Europe, Brazil or Asia
were rolled in Brazil or China in 2020 vs.19% in 2015).
Recent
acquisition of minority
shares in Brazil and the US simplifies
Vallourec’s corporate structure
and creates strategic
benefits
Since the beginning of the year, Vallourec has
acquired minority interests in its most strategic assets. Vallourec
acquired in March 2021 15.4% of the Nippon Steel stake (and its
associated 300kt/year rolling capacity) in VSB allowing the full
ownership of all Brazilian assets. In the US, in addition to the
purchase in July 2021 of the 49% minority shares of VAM USA,
specialized in threading of premium VAM® joints for €35 million, in
September 2021 Vallourec acquired the 19.5% Sumitomo Corporation’s
shares in Vallourec Star, an integrated industrial tool including a
steel mill, two rolling mills and finishing lines, for €83 million.
With these acquisitions, Vallourec fully owns its North American
entities to benefit from a complete operational flexibility,
further develop synergies and will be able to use large NOLs.
Highly efficient
production hubs in North
America,
Brazil and
China
Thus, Vallourec’s industrial footprint relies
now on highly efficient production hubs in North America, where
Vallourec fully owns competitive, right-sized and low-carbon
manufacturing tools dedicated to the local market, Brazil and
China, where Vallourec benefits from cost effective operations
increasingly supporting sales in premium international markets.
European rolling mills viability is
structurally challenged
Vallourec’s seamless tubes
rolling in Europe
is performed in
Germany and
continues to
significantly underperform
In Europe, Vallourec’s tubes manufacturing is
based on the German rolling capacity with three rolling mills
(Mülheim, Rath Plug and Rath Pilger) for a total capacity of
685kt/year, dedicated to Industry and Oil & Gas markets.
The production of Vallourec’s German mills does
not provide enough margin to cover their high fixed costs:
- The intense
competition from low-cost producers in the European Industry
end-markets prevents from generating sufficient margins
- In spite of
additional margin on premium tubes for the Oil & Gas EA-MEA
markets, the fixed cost base cannot be absorbed
Despite several turnaround plans, over €700
million1 of cumulative cash losses have occurred over
2015-2021.
The recently acquired additional
capacity in Brazil will enable to
serve EA-MEA customers more cost effectively
In Brazil, Vallourec relies on three rolling
mills (Jeceaba PQF, Barreiro Plug and Barreiro Mandrel in Belo
Horizonte) producing small and medium diameter tubes for the local
Industry markets and local and international Oil & Gas markets.
With the acquisition of Nippon Steel minority stake in VSB,
Vallourec has recovered access to 300kt/year additional rolling
capacity.
These Brazilian assets are among the world’s
most competitive, and servicing customers in Oil & Gas
international markets from Brazil is significantly more cost
effective than from Germany. The variable costs for producing and
shipping a medium diameter tube to Middle East from Brazil is c.
25% lower than for a tube produced in Germany.
Transformational move: launch of the
disposal process of German assets and progressive transfer of their
Oil & Gas activity to the highly competitive Brazilian
hub
Launch of the disposal process
of German assets
Vallourec has decided to launch the disposal
process of all its German manufacturing assets in order to find a
new operator, better positioned to profitably serve the European
Industrial markets. The Group seeks a responsible and sustainable
owner for the future of the assets, their employees and broader
stakeholders.
The disposal process will be launched in the
coming weeks with a targeted binding offer in Q2 2022. If no buyer
is identified, Vallourec will look at all alternatives, including
the closure.
Progressive transfer of their rolling
activities to Brazil
The transfer will be performed along with the
progressive implementation of a c. €100m capex program being
launched in Brazil to enable the production of the full range of
premium tubular products, both for Brazilian and international Oil
& Gas customers.
A game changer for
Vallourec’s performance in international markets
Following the progressive transfer of the German
rolling activity for Oil & Gas, the Brazilian hub will deliver
the full range of premium tubular products to international
markets, leveraging an already optimized cost base and benefiting
from better fixed costs absorption. This will allow a better
competitiveness and enhanced margin in international Oil & Gas
markets and deliver strong improvement at EBITDA and cash flow
generation levels. It will as well allow a positive CO2 impact,
driven by the excellent carbon footprint of Brazilian operations
(the CO2 content of a tube produced in Brazil is 30% lower than of
a tube produced in Germany).
Clear benefits
expected after realization for Vallourec
and its stakeholders
The realization of these
operations is targeted
to generate €130
million run rate EBITDA
increase and €20 million
capex reduction.
VI –
Governance
On October 14th, 2021, in accordance with the
legal provisions in force, the Group Committee appointed Mr.
Guillaume Wolf, a French national, as a Director representing
employees on the Board of Directors of Vallourec SA, for a term of
four years.
Information and Forward-Looking Statements
This press release may include 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. 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
Registration Document filed with the AMF on March 29, 2021, under
filing number n° D.21-0226 and the amendment to the Universal
Registration Document filed with the AMF on June 2, 2021 under
filing number n° D.21-0226-A01. 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 press release. 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 press release, those results or
developments may not be indicative of results or developments in
subsequent periods.
Presentation of
Q3 &
9M 2021
results
Analyst conference call / audio webcast at 6:30
pm (Paris time) to be held in English.
- To listen to the audio
webcast:
https://channel.royalcast.com/landingpage/vallourec-en/20211117_1/
- To participate in the conference
call, please dial (password to use is “Vallourec”):
-
+44 (0) 33 0551
0200 (UK)
-
+33 (0) 1 70 37 71 66 (France)
- +1 212 999
6659 (USA)
- Audio webcast replay and slides
will be available on the website 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 17,000 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 SBF 120 index
and is eligible for Deferred Settlement Service Long Only.
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.
Calendar
February 24th
2022 |
Release of fourth quarter and full year 2021 results |
For further information, please
contact:
Investor
relations Jérôme FribouletTel: +33 (0)1 49 09 39
77Investor.relations@vallourec.com |
Press
relations Héloïse Rothenbühler Tel: +33 (0)1 41 03 77
50 heloise.rothenbuhler@vallourec.com |
Individual
shareholdersToll Free Number (from France): 0 805 65 10 10
actionnaires@vallourec.com |
|
Appendices
Due to rounding, numbers presented throughout this and other
documents may not add up precisely to the totals provided and
percentages may not precisely reflect the absolute figures.
Documents accompanying this release:
- Sales volume
- Forex
- Revenue by geographic region
- Revenue by market
- Summary consolidated income
statement
- Summary consolidated balance
sheet
- Free cash flow
- Cash flow statement
- Definitions of non-GAAP financial
data
Sales volume
In thousands of tons |
2021 |
2020 |
Change |
Q1 |
358 |
450 |
-20.4% |
Q2 |
381 |
422 |
- 9.7 % |
Q3 |
391 |
319 |
+ 22.6 % |
Total |
1,130 |
1,191 |
- 5.1 % |
Forex
Average exchange rate |
|
9 Months 2021 |
9 Months 2020 |
EUR / USD |
|
1.20 |
1.13 |
EUR / BRL |
|
6.38 |
5.71 |
USD / BRL |
|
5.33 |
5.08 |
Revenue by geographic
region
In € million |
9 Months 2021 |
As % of revenue |
9 Months 2020 |
As % of revenue |
Change |
Q3 2021 |
As % of revenue |
Q3 2020 |
As % of revenue |
Change |
Europe |
386 |
16.2% |
406 |
16.8% |
-5.2% |
139 |
16.6% |
141 |
19.7% |
-1.4% |
North America (Nafta) |
524 |
22.0% |
581 |
24.1% |
-9.7% |
215 |
25.8% |
99 |
13.8% |
117.5% |
South America |
810 |
34.1% |
532 |
22.1% |
52.4% |
302 |
36.2% |
209 |
29.2% |
44.6% |
Asia and Middle East |
512 |
21.5% |
664 |
27.5% |
-22.9% |
142 |
17.0% |
197 |
27.5% |
-28.1% |
Rest of the world |
145 |
6.1% |
229 |
9.5% |
-36.6% |
37 |
4.4% |
71 |
9.9% |
-48.4% |
Total |
2,378 |
100% |
2,412 |
100% |
-1.4% |
834 |
100% |
716 |
100% |
16.4% |
Revenue by market
9 Months 2021 |
As % of revenue |
9 Months 2020 |
As % of revenue |
Change |
In € million |
Q3 2021 |
As % of revenue |
Q3 2020 |
As % of revenue |
Variation |
1,209 |
50.9% |
1,480 |
61.4% |
-18.3% |
Oil & Gas |
408 |
48.9% |
410 |
57.3% |
-0.3% |
134 |
5.6% |
161 |
6.7% |
-16.9% |
Petrochemicals |
48 |
5.7% |
33 |
4.6% |
43.2% |
1,343 |
56.5% |
1,641 |
68.0% |
-18.1% |
Oil & Gas, Petrochemicals |
456 |
54.7% |
443 |
61.9% |
3.0% |
337 |
14.2% |
220 |
9.1% |
53.2% |
Mechanicals |
130 |
15.6% |
66 |
9.2% |
96.9% |
64 |
2.7% |
41 |
1.7% |
55.1% |
Automotive |
24 |
2.8% |
14 |
2.0% |
68.5% |
537 |
22.6% |
340 |
14.1% |
57.7% |
Construction & Other |
194 |
23.3% |
128 |
17.9% |
51.7% |
937 |
39.4% |
601 |
24.9% |
55.9% |
Industry & Other |
348 |
41.7% |
208 |
29.1% |
67.2% |
98 |
4.1% |
170 |
7.0% |
-42.6% |
Power Generation |
30 |
3.6% |
65 |
9.1% |
-54.4% |
2,378 |
100% |
2,412 |
100% |
-1.4% |
Total |
834 |
100% |
716 |
100% |
16.4% |
Summary consolidated income statement
9 Months 2021 |
9 Months 2020 |
Change |
In € million |
Q3 2021 |
Q3 2020 |
Change |
2,378 |
2,412 |
-1.4% |
Revenue |
834 |
716 |
16.4% |
(1,760) |
(1,961) |
-10.2% |
Cost of sales |
(627) |
(562) |
11.6% |
618 |
451 |
37.0% |
Industrial Margin |
207 |
154 |
34.4% |
26.0% |
18.7% |
+7.3p.p. |
(as a % of revenue) |
24.8% |
21.5% |
+3.3p.p. |
(233) |
(250) |
-6.8% |
Sales, general and administrative costs |
(75) |
(77) |
-2.6% |
(29) |
(19) |
-€10m |
Other |
(4) |
(6) |
+€2m |
356 |
182 |
+€174m |
EBITDA |
128 |
71 |
+€57m |
15.0% |
7.5% |
+7.5p.p. |
(as a % of revenue) |
15.3% |
9.9% |
+5.4p.p. |
(121) |
(158) |
-23.4% |
Depreciation of industrial assets |
(43) |
(47) |
-8.5% |
(32) |
(37) |
-13.5% |
Amortization and other depreciation |
(10) |
(10) |
na |
- |
(441) |
na |
Impairment of assets |
- |
- |
na |
96 |
(53) |
na |
Asset disposals, restructuring costs and non-recurring items |
(3) |
(7) |
na |
299 |
(507) |
+€806m |
Operating income (loss) |
72 |
7 |
+€65m |
(211) |
(179) |
17.9% |
Financial income/(loss) |
(36) |
(64) |
-43.8% |
88 |
(686) |
+€774m |
Pre-tax income (loss) |
36 |
(57) |
+€93m |
(141) |
(51) |
+€90m |
Income tax |
(41) |
(21) |
+€20m |
(4) |
(2) |
na |
Share in net income/(loss) of equity affiliates |
(1) |
(1) |
na |
(57) |
(739) |
+€682m |
Net income |
(6) |
(79) |
+€73m |
(8) |
(103) |
na |
Attributable to non-controlling interests |
1 |
(10) |
na |
(49) |
(636) |
+€587m |
Net income, Group share |
(7) |
(69) |
+€62m |
(0.6) |
(2.2) |
na |
Net earnings per share (in €) * |
(0.03) |
(6.0) |
na |
na = not applicable* 9M and Q3 2020 figures adjusted for new
number of shares following reverse stock split effective on May 25
2020
Summary consolidated balance sheet
In €
million |
|
|
|
|
|
Assets |
9/30/2021 |
12/31/2020 |
Liabilities |
9/30/2021 |
12/31/2020 |
|
|
|
Equity - Group share * |
1,645 |
(187) |
|
|
|
Non-controlling interests |
21 |
321 |
Net intangible assets |
42 |
50 |
Total equity |
1,666 |
134 |
Goodwill |
25 |
25 |
Shareholder loan |
- |
9 |
Net property, plant and equipment |
1,719 |
1,718 |
Bank loans and other borrowings (A) |
1,392 |
1,751 |
Biological assets |
39 |
30 |
Lease debt (D) |
54 |
84 |
Equity affiliates |
36 |
42 |
Employee benefit commitments |
149 |
203 |
Other non-current assets |
159 |
128 |
Deferred taxes |
16 |
20 |
Deferred taxes |
189 |
187 |
Provisions and other long-term liabilities |
189 |
142 |
Total non-current assets |
2,209 |
2,180 |
Total non-current liabilities |
1,800 |
2,200 |
Inventories |
1,023 |
664 |
Provisions |
74 |
104 |
Trade and other receivables |
544 |
468 |
Overdraft and other short-term borrowings (B) |
153 |
1,853 |
Derivatives - assets |
3 |
37 |
Lease debt (E) |
17 |
24 |
Other current assets |
187 |
203 |
Trade payables |
557 |
426 |
Cash and cash equivalents (C) |
552 |
1,390 |
Derivatives - liabilities |
24 |
21 |
Other current liabilities |
267 |
241 |
Total current assets |
2,309 |
2,762 |
Total current liabilities |
1,092 |
2,669 |
Assets held for sale and discontinued operations |
49 |
107 |
Liabilities held for sale and discontinued operations |
9 |
37 |
Total assets |
4,567 |
5,049 |
Total equity and liabilities |
4,567 |
5,049 |
|
|
|
|
|
|
* Net income (loss), Group share |
(49) |
(1,206) |
|
|
|
|
|
|
|
|
|
Net debt (A+B-C) |
993 |
2,214 |
|
|
|
|
|
|
|
|
|
Lease debt (D+E) |
71 |
108 |
|
|
|
Free cash flow
9 Months 2021 |
9 Months 2020 |
Change |
In € million |
Q3 2021 |
Q3 2020 |
Change |
16 |
(128) |
+€144m |
Cash flow from operating activities (A) |
18 |
(32) |
+€50m |
(232) |
(5) |
-€227m |
Change in operating WCR [+ decrease, (increase)] (B) |
(93) |
94 |
-€187m |
(84) |
(90) |
+€6m |
Gross capital expenditure (C) |
(28) |
(27) |
-€1m |
(300) |
(223) |
-€77m |
Free cash flow (A)+(B)+(C) |
(103) |
35 |
-€138m |
Cash flow statement
9 Months 2021 |
9 Months 2020 |
In € million |
Q3 2021 |
Q3 2020 |
16 |
(128) |
Cash flow from operating activities |
18 |
(32) |
(232) |
(5) |
Change in operating WCR [+ decrease, (increase)] |
(93) |
94 |
(216) |
(133) |
Net cash flow from operating activities |
(75) |
62 |
(84) |
(90) |
Gross capital expenditure |
(28) |
(27) |
1,520 |
(75) |
Asset disposals & other items |
(171) |
(37) |
1,220 |
(298) |
Change in net debt [+ decrease, (increase)] |
(274) |
(2) |
993 |
2,329 |
Financial net debt (end of period) |
993 |
2,329 |
Definitions of non-GAAP financial data
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.
Free cash flow: Free cash-flow
(FCF) is defined as cash flow from operating activities minus gross
capital expenditure and plus/minus change in operating working
capital requirement.
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.
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: defined as the
present value of unavoidable future lease payments
Net debt: consolidated net debt
is defined as Bank loans and other borrowings plus Overdrafts and
other short-term borrowings minus Cash and cash equivalents. Net
debt excludes lease debt.
Net working capital
requirement: 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.
Operating working capital
requirement: includes working capital requirement as well
as other receivables and payables.
Working capital requirement:
defined as trade receivables plus inventories minus trade payables
(excluding provisions).
1 Vallourec Deutschland excluding Reisholz
- Vallourec-press-release-Q3 9M 2021 results
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