Vallourec expects full year 2023 results to exceed its prior outlook
February 01 2024 - 12:00PM
Press release
Vallourec expects full year 2023 results
to exceed its prior outlook
Estimated figures indicate full year 2023
EBITDA will exceed €1,190 million and net debt will be below €580
million
Meudon (France), 1 February
2024 – Vallourec, a world leader in premium tubular
solutions, announces today that it expects full year 2023 results
to exceed management’s prior outlook.
As part of Vallourec’s Q3 2023 financial
communication, Vallourec provided its full year 2023 outlook as
follows:
- Full year 2023 EBITDA was expected
to range between €1,075 million and €1,175 million
- Total cash generation was expected
to be positive in the fourth quarter 2023, excluding any potential
benefit of asset sales
- Net debt was expected to decline
further versus the third quarter 2023 level of €741 million,
excluding any potential benefit of asset sales
Though audits are underway and accounts are not
yet approved by the Vallourec Board1, Vallourec now confirms the
following estimated results:
- Full year 2023 EBITDA is expected
to exceed €1,190 million, with fourth quarter 2023 EBITDA exceeding
€275 million
- Total cash generation in the fourth
quarter 2023 is expected to exceed €140 million, which includes the
approximately €37 million cash inflow from the sale of Vallourec’s
Mülheim facility
- Vallourec’s net debt at the end of
December 2023 is expected to be less than €580 million
This sequential improvement in EBITDA was
attributable to an increase in sales volumes, driven by higher
shipments in both North America and Eastern Hemisphere. Higher
sales volumes in North America more than offset pricing declines in
the region, and improved execution in South America drove
sequentially higher EBITDA. Results also benefitted to a lesser
extent from favorable iron ore pricing and sequentially improved
EBITDA in Germany, which led to a slightly positive EBITDA
contribution from Germany in 2023. Relative to Vallourec’s prior
outlook, results exceeded expectations in both main segments, but
particularly in the Tubes results in the Americas.
Vallourec’s net debt declined substantially in
the fourth quarter to less than €580 million. As expected,
restructuring cash out was a significant headwind, but cash flow
was supported by strong EBITDA and further working capital release.
Vallourec expects to further deleverage its balance sheet and
achieve zero net debt by year-end 2025 at the latest.
Philippe Guillemot, Chairman and CEO of
Vallourec, said: "Our fourth quarter results bring a
highly successful year for Vallourec to a close. In addition to
efficiently executing multiple global workstreams related to the
New Vallourec plan, the Group delivered its best EBITDA and cash
generation in nearly 15 years. We have now completed the shutdown
of our German operations, and I thank the team there for their
commitment to delivering quality results and products throughout
this operation’s final year. Moreover, I would like to thank all
Vallourec employees for their tireless efforts to improve our
business and execute the New Vallourec plan. While we are proud of
our accomplishments, we see many more opportunities to enhance our
profitability ahead. We remain on track to reach zero net debt by
year end 2025 at the latest. Following our deleveraging, we aim to
return significant capital to our shareholders, potentially as
early as 2025.2”
A summary of estimated key financial metrics is
presented below.
in € million, unless noted |
Q4 2022 |
Q1 2023 |
Q2 2023 |
Q3 2023 |
Q4 2023 |
FY 2022 |
FY 2023 |
Tubes volume sold (k tonnes) |
514 |
431 |
396 |
343 |
~380 |
1,804 |
~1,550 |
Iron ore volume sold (m tonnes) |
1.4 |
1.5 |
1.9 |
1.8 |
~1.7 |
4.0 |
~6.9 |
Group revenues |
1,541 |
1,338 |
1,358 |
1,142 |
> 1,270 |
4,883 |
> 5,110 |
Group EBITDA |
312 |
320 |
374 |
222 |
> 275 |
715 |
> 1,190 |
(as a % of revenue) |
20.2% |
23.9% |
27.5% |
19.4% |
~22% |
14.6% |
~23% |
Tubes EBITDA |
285 |
279 |
330 |
193 |
> 240 |
638 |
> 1,040 |
Mine & Forest EBITDA |
22 |
48 |
50 |
39 |
> 35 |
113 |
> 170 |
Total cash generation |
323 |
151 |
118 |
150 |
> 140 |
(200) |
> 560 |
Net debt |
1,130 |
1,000 |
868 |
741 |
< 580 |
1,130 |
< 580 |
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.
For further information, please
contact:
Investor Relations Connor LynaghTel: +1 (713)
409-7842connor.lynagh@vallourec.com |
Press relations Héloïse RothenbühlerTel.: +33 (0)6
45 45 19 67heloise.rothenbuhler@vallourec.com |
Individual shareholder relationsToll-free number:
0 805 65 10 10actionnaires@vallourec.com |
|
1 Auditors’ review of 2023 full year financial
statements is in progress. These financial statements will be
examined by the Board of Directors on February 29, 2024 and will be
released on March 1, 2024.2 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 and share repurchases would
also be subject to shareholders’ approval.
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