VALLOUREC reports first quarter 2017 results
(Thomson Reuters ONE) -
Vallourec reports first quarter 2017 results
+------------------------------------------------------------------------------+
| Q1 2017 |
| |
| * Revenue of ?783 million, up 16.7% year-on-year (down 1.5% excluding scope |
| and exchange rate effects) |
| * EBITDA of -?21 million, up ?51 million year-on-year |
| * Net result, Group share of -?126 million, up ?158 million year-on-year |
| * Free cash flow of -?220 million compared to -?239 million in Q1 2016 |
| * Net debt of ?1,533 million at the end of Q1 2017 compared to 1,287 million|
| at the end of 2016 |
| * FY EBITDA 2017 targeted to be in the upper part of a ?50 to ?100 million |
| improvement range vs. full year 2016 |
| |
+------------------------------------------------------------------------------+
Boulogne-Billancourt (France), 26 April 2017 - Vallourec, world leader in
premium tubular solutions, today announces its results for the first quarter of
2017. The consolidated financial information was presented by Vallourec's
Management Board to its Supervisory Board on 25 April 2017.
Commenting on these results, Philippe Crouzet, Chairman of the Management Board,
said:
"In the first quarter of 2017, our financial performance improved sequentially
and compared to the first quarter of 2016. This is the direct consequence of the
rigorous implementation of our Transformation Plan, of a favorable product mix
in Brazil during this quarter, and, to a lesser extent, of the first benefits of
the new momentum in the United States.
However, the timing of the Oil & Gas market recovery in the rest of the world
remains unclear and other Group markets are still evolving in subdued
environments. Vallourec keeps its focus on achieving ambitious cost reduction
targets and strict cash management discipline.
The Group confirms it targets an EBITDA improvement ranging between
?50 million and ?100 million when compared to 2016.
Nevertheless, considering better market trends in the US than
initially expected, it now targets the upper part of this range.
With a rebalanced geographical footprint and a reinforced financial structure,
Vallourec is well positioned to capture the opportunities of the global cycle
recovery when it fully materialises."
Consolidated key figures
+-------------------------------------------------------------+-----------
| In millions of euros Q1 Q1 Change Q4 | Change
| |
| 2017 2016 YoY 2016 | QoQ
+-----------------------------------------------------+-------+----------+
| Sales Volume (k tons) 475 251 +89.2% | 376 +26.3% |
| | |
| Revenue 783 671 +16.7% | 838 -6.6% |
| | |
| EBITDA (21) (72) +51m | (63) +42m |
| | |
| As % of sales -2.7% -10.7% +8.0 pts | -7.5% +4.8 pts |
| | |
| Operating income (loss) (111) (290) +179m | (188) +77m |
| | |
| Net income, Group share (126) (284) +158m | (183) +57m |
| | |
| Free cash flow((1)) (220) (239) +19m | (3) -217m |
+-----------------------------------------------------+------------------+
1. Free cash flow (FCF) is a non-GAAP measure and is defined as cash flow from
operating activities minus gross capital expenditure and plus/minus change
in operating working capital requirement
I - CONSOLIDATED REVENUE BY MARKET
+------------------------------------------------------------------+
| In millions of euros Q1 Q1 Change Q4 Change |
| |
| 2017 2016 YoY 2016 QoQ |
+--------------------------------------------------+---------------+
| Oil & Gas, Petrochemicals 533 469 +13.6% | 550 -3.1% |
| | |
| Power Generation 84 85 -1.2% | 151 -44.4% |
| | |
| Industry & Other 166 117 +41.9% | 137 +21.2% |
| | |
| Total 783 671 +16.7% | 838 -6.6% |
+--------------------------------------------------+---------------+
Over the first quarter of 2017, Vallourec recorded revenue of ?783 million, up
16.7% compared with the first quarter of 2016. At constant scope and exchange
rates revenue was down 1.5%, with a positive volume impact (+36.3%), mainly due
to the volume rebound in the US more than offset by a negative price/mix
effect (-37.8%) explained by three factors:
* a change in mix in Q1 2017 deliveries compared to a favorable Q1 2016,
* the price deterioration in the Oil & Gas market in 2016, and
* a change in geographical mix with higher US volumes sold at a lower average
selling price than the Group average.
The scope effect (integration of Tianda, full consolidation of VSB and
divestiture of VHET) was +9.7%[1] and the exchange rate effect was +8.5%.
Oil & Gas, Petrochemicals (68.1% of consolidated revenue)
Oil & Gas revenue reached ?485 million in Q1 2017, up 10.5% year-on-year (+1.4%
at constant exchange rates).
* In the USA, Oil & Gas revenue increased as the number of active rig count
rose soundly (on average +26% qoq and +33% yoy), supporting final demand for
OCTG tubes. As anticipated, Q1 2017 deliveries were locked at low prices and
the increase in raw material costs weighed on margins. However, the positive
momentum of the US market enabled Vallourec to announce during Q1 2017 price
increases which will mostly impact the second half of 2017.
* In the EAMEA region, Oil & Gas volumes were up year-on-year as a result of
the integration of Tianda deliveries and full consolidation of VSB exports
in the region. However, revenue in the region was down mainly due to
deliveries to NOCs at lower prices and with a poorer customer mix than in Q1
2016.
* In Brazil, revenue was up year-on-year, benefiting from higher than average
OCTG deliveries during this quarter linked with the drilling of exploratory
wells in the Libra field.
Petrochemicals revenue was ?48 million in Q1 2017, up 60.0% year-on-year (+53.3%
at constant exchange rates), as a result of the integration of Tianda Oil Pipe.
Power Generation (10.7% of consolidated revenue)
Power Generation revenue amounted to ?84 million in Q1 2017, down 1.2% year-on-
year (-2.4% at constant exchange rates), including the impact related to the
integration of Tianda.
Industry & Other (21.2% of consolidated revenue)
Industry & Other revenue amounted to ?166 million in Q1 2017, up 41.9% year-on-
year (+31.6% at constant exchange rates), including the impact related to the
integration of Tianda.
In Europe, Industry & Other revenue was up essentially thanks to the Mechanical
Engineering while the Automotive and Construction market segments remained
relatively stable. The pricing environment, in a context of increasing raw
material costs, remained however very challenging year on year.
In Brazil, Industry & Other revenue was significantly up mainly thanks to the
important increase in the mine's revenue as a result of higher iron ore sales
prices. The Automotive market recorded an increase in activity thanks to the
heavy vehicles segment while Mechanical Engineering remained relatively stable.
II - Q1 2017 CONSOLIDATED RESULTS ANALYSIS
In Q1 2017, EBITDA stood at -?21 million, up by ?51 million year-on-year, with:
* Consolidated revenue up 16.7% compared with Q1 2016, reaching ?783 million
mostly thanks to a positive scope effect (Tianda acquisition and full
consolidation of VSB), higher OCTG volumes in North America and Brazil, and
despite a negative price/mix effect in the USA and EAMEA on Oil & Gas
deliveries;
* An industrial margin of ?101 million, up ?51 million compared with Q1 2016,
reflecting savings as a result of the Transformation plan, the increase in
revenue in particular in Brazilian offshore and the positive contribution
related to the integration of Tianda and the full consolidation of VSB;
* Sales, general and administrative costs (SG&A) of ?113 million, down 2.6%
compared with Q1 2016 with cost savings being partly offset by a negative
forex impact.
Operating result was a loss of ?111 million, compared to a loss of ?290 million
in Q1 2016, resulting from higher EBITDA and from the absence of restructuring
and impairment charges in Q1 2017.
Financial result was negative at -?43 million versus -?34 million in Q1 2016,
resulting mainly from the recognition of a loss of ?8 million related to the
change in fair value of NSSMC shares held by Vallourec since 2009.
Income tax was a gain of ?19 million in Q1 2017, compared to a gain of ?28
million in Q1 2016, essentially related to the recognition of deferred tax
assets.
The share attributable to non-controlling interests amounted to -?11 million in
Q1 2017, compared to -?14 million in Q1 2016.
This resulted in a net loss, Group share of -?126 million in Q1 2017, compared
to -?284 million in Q1 2016.
III - CASH FLOW & FINANCIAL POSITION
Over Q1 2017, negative free cash flow amounted to -?220 million, compared to
-?239 million in Q1 2016. This is mainly explained by:
* Negative cash flow from operating activities of -?82 million compared to
-?135 million in Q1 2016 ;
* An increase in operating working capital requirement of ?104 million as a
result of a seasonality effect and the activity recovery in the US, compared
with an increase of ?61 million in Q1 2016 ;
* Lower capital expenditure of -?34 million, compared to -?43 million in Q1
2016.
As at 31 March 2017, Group net debt increased by ?246 million compared to 31
December 2016 to reach ?1,533 million, including an increase of ?24 million
related to the disposal of a 60% interest in the Saint-Saulve steel mill. The
gearing ratio at the end of Q1 2017 was 41.9% compared to 34.1% at the end of
2016.
Through amendments signed on 17 March 2017, the net debt-to-equity covenant
associated to the Group's medium and long-term bank facilities has been revised
with a threshold raised from 75% to 100% for the annual tests occurring at the
end of 2018, 2019 and 2020.
IV - LIQUIDITY
As at 31 March 2017, Vallourec's cash position amounted to ?1,013 million.
Vallourec's medium and long-term committed facilities amounted to ?2.3 billion
(including ?0.2 billion credit facilities maturing in July 2017), out of which
?673 million were drawn.
At the same date, short-term debt amounted to ? 1,462 million.
V - TRANSFORMATION PLAN
On 26 January 2017, Vallourec finalized the divestment of a 60% stake in the
Saint Saulve steel mill to Asco Industries. Vallourec retains a 40% share in the
steel mill.
Vallourec's new organization structured around four regions: North America,
South America, Europe/Africa (EA), and the Middle East/Asia (MEA) and two
central departments (Development & Innovation and Technology & Industry) is in
place.
Vallourec continues to deploy its Transformation Plan through its new
rationalized industrial footprint combined with the rigorous implementation of
the structural cost reductions program.
VI - MARKET TRENDS & OUTLOOK
For 2017, Oil & Gas revenue in the US is expected to rebound more significantly
than previously expected. In Brazil, drilling activity is expected to remain
broadly stable compared to 2016, while revenue in EAMEA should still be impacted
by the low activity and prices reflected in the backlog to be delivered in this
region.
Vallourec does not expect any major change in its other businesses, with the
exception of higher revenue from its iron ore sales in Brazil.
Initiatives deployed as part of the Transformation Plan will enable the Group to
continue to lower its cost base.
Although it operates in a volatile and uncertain environment, the Group confirms
it targets an EBITDA improvement ranging between ?50 million and ?100 million
when compared to 2016. Nevertheless, considering better market trends in the US
than initially expected, it now targets the upper part of this range.
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 19,000
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: FR0000120354, Ticker VK) and eligible
for the Deferred Settlement System (SRD), Vallourec is included in the following
indices: SBF 120 and Next 150. In the United States,
Vallourec has established a sponsored Level 1 American Depositary Receipt (ADR)
program (ISIN code: US92023R2094, Ticker: VLOWY). Parity between ADR and a
Vallourec ordinary share has been set at 5:1.
www.vallourec.com
Follow us on Twitter (at)Vallourec
Presentation of Q1 2017 results
* Analyst conference call / audio webcast at 6:30 pm (Paris time) to be held
in English.
* To listen to the audio webcast: http://edge.media-
server.com/m/go/vallourecQ12017
To participate in the call, please dial:
+44 20 3427 1916 (UK),
+33 1 76 77 22 25 (France),
+1 212 444 0412 (USA),
+44 20 3427 1916 (Other countries)
Conference code: 3110714
* Audio webcast and slides will be available on the website at:
http://www.vallourec.com/EN/GROUP/FINANCE
-------------------------------------------------------------------------------
Information and Forward-Looking Statements
This press release contains forward-looking statements. These statements include
financial forecasts and estimates as well as assumptions on which they are
based, statements related to projects, objectives and expectations concerning
future operations, products and services or future performance. Although
Vallourec's management believes that these forward-looking statements are
reasonable, Vallourec cannot guarantee their accuracy or completeness and these
forward-looking statements are subject to numerous risks and uncertainties that
are difficult to foresee and generally beyond Vallourec's control, which may
mean that the actual results and developments may differ significantly from
those expressed, induced or forecasted in the statements. These risks include
those developed or identified in the public documents filed by Vallourec with
the AMF, including those listed in the "Risk Factors" section of the
Registration Document filed with the AMF on 21 March 2017 (N° D.17-0191).
Calendar
-----------------------------------------------------------------------
12 May 2017 Annual Shareholders' Meeting
26 July 2017 Release of second quarter and first half 2017 results
-----------------------------------------------------------------------
For further information, please contact:
Investor relations Press relations
Etienne Bertrand Héloïse Rothenbühler
Tel: +33 (0)1 49 09 35 58 Tel: +33 (0)1 41 03 77 50 / +33 (0)6
etienne.bertrand(at)vallourec.com 45 45 19 67
heloise.rothenbuhler(at)vallourec.com
Guilherme Camara Individual shareholders
Tel: +33 (0)1 49 09 39 92 Toll Free Number (from France): 0 800 505 110
guilherme.camara(at)vallourec.com actionnaires(at)vallourec.com
Appendices
Documents accompanying this release:
* Sales volume
* Forex
* Revenue by geographic region
* Revenue by market
* Cash flow statement
* Free cash flow
* Summary consolidated income statement
* Summary consolidated balance sheet
Sales volume
+------------------------------------------------+
| In thousands of tonnes Change |
| 2017 2016 |
| YoY |
+------------------------------------------------+
| |
| |
| Q1 475 251 +89.2% |
| |
| Q2 321 |
| |
| Q3 333 |
| |
| Q4 376 |
| |
| |
| |
| Total 1,281 |
+------------------------------------------------+
Forex
+-------------------------------------------+
| Average exchange rate Q1 2017 Q1 2016 |
+-------------------------------------------+
| EUR / USD 1.06 1.10 |
| |
| EUR / BRL 3.35 4.30 |
| |
| USD / BRL 3.15 3.91 |
+-------------------------------------------+
Revenue by geographic region
+-------------------------------------------------------------------------+
| In millions of euros Q1 As % of Q1 As % of Change Q4 |
| |
| 2017 revenue 2016 revenue YoY 2016 |
+-------------------------------------------------------------------------+
| Q1 |
| |
| Europe 115 14.7% 135 20.1% -14.8 % 186 |
| |
| North America 187 23.9% 128 19.1% +46.1% 193 |
| |
| South America 163 20.8% 98 14.6% +66.3% 89 |
| |
| Asia & Middle East 276 35.2% 171 25.5% +61.4% 289 |
| |
| Rest of World 42 5.4% 139 20.7% -69.8% 81 |
| |
| |
| |
| Total 783 100.0% 671 100.0% +16.7% 838 |
+-------------------------------------------------------------------------+
Revenue by market
+-----------------------------------------------------------------------------+
| In millions of euros Q1 As % of Q1 As % of Change Q4 |
| |
| 2017 revenue 2016 revenue YoY 2016 |
+-----------------------------------------------------------------------------+
| |
| |
| Oil & Gas 485 62.0% 439 65.4% +10.5% 517 |
| |
| Petrochemicals 48 6.1% 30 4.5% +60.0% 33 |
| |
| Oil & Gas, Petrochemicals 533 68.1% 469 69.9% +13.6% 550 |
| |
| |
| |
| Power Generation 84 10.7% 85 12.7% -1.2% 151 |
| |
| |
| |
| Mechanicals 72 9.2% 58 8.6% +24.1% 73 |
| |
| Automotive 33 4.2% 22 3.3% +50.0% 25 |
| |
| Construction & Other 61 7.8% 37 5.5% +64.9% 39 |
| |
| Industry & Other 166 21.2% 117 17.4% +41.9% 137 |
| |
| |
| |
| Total 783 100.0% 671 100.0% +16.7% 838 |
+-----------------------------------------------------------------------------+
Cash flow statement
+------------------------------------------------------------------+
| In millions of euros Q1 Q1 Q4 |
| |
| 2017 2016 2016 |
+------------------------------------------------------------------+
| Cash flow from operating activities (82) (135) (124) |
| |
| Change in operating WCR |
| (104) (61) +196 |
| + decrease, (increase) |
+------------------------------------------------------------------+
| Net cash flows from operating activities (186) (196) +72 |
+------------------------------------------------------------------+
| Gross capital expenditure (34) (43) (75) |
| |
| Financial investments - - - |
| |
| Capital increase - - 21 |
| |
| Impact of acquisition - - (248) |
| |
| Dividends paid - - - |
| |
| Asset disposals & other items (26) (31) (37) |
+------------------------------------------------------------------+
| Change in net debt |
| (246) (270) (267) |
| + decrease, (increase) |
+------------------------------------------------------------------+
| Net debt (end of period) 1,533 1,789 1,287 |
+------------------------------------------------------------------+
Free cash flow
+------------------------------------------------------------------------+
| In millions of euros Q1 Q1 |
| Change |
| 2017 2016 |
+------------------------------------------------------------------------+
| Cash flow from operating activities (FFO) (A) (82) (135) +53 |
| |
| Change in operating WCR (B) |
| (104) (61) (43) |
| [+ decrease, (increase)] |
| |
| Gross capital expenditure (C) (34) (43) +9 |
+------------------------------------------------------------------------+
| Free cash flow (A)+(B)+(C) (220) (239) +19 |
+------------------------------------------------------------------------+
Summary consolidated income statement
+---------------------------------------------------------------+--------------+
|In millions of euros Q1 Q1 Change | Q4 Change |
| | |
| 2017 2016 YoY |2016 QoQ |
| | |
|REVENUE 783 671 +16.7%| 838 -6.6%|
+---------------------------------------------------------------+--------------+
|Cost of sales((1)) (682) (621) +9.8%|(778) -12.3%|
+---------------------------------------------------------------+--------------+
|Industrial margin 101 50 +102.0%| 60 +68.3%|
| | |
|(as % of revenue) 12.9% 7.5% +5.4 pts| 7.2% +5.7 pts|
+---------------------------------------------------------------+--------------+
|SG&A costs((1)) (113) (116) -2.6%|(117) -3.0%|
| | |
|Other income (expense), net (9) (6) na| (6) na|
+---------------------------------------------------------------+--------------+
|EBITDA (21) (72) +51m| (63) +42m|
+---------------------------------------------------------------+--------------+
|EBITDA as % of sales -2.7% -10,7 % +8.0 pts|-7.5% +4.8pts|
| | |
|Depreciation of industrial assets (79) (70) +12.9 %| (73) +8.2%|
| | |
|Amortization and other depreciation (11) (11) na| (16) na|
| | |
|Impairment of assets - (63) na| (1) na|
| | |
|Assets disposals, restructuring and - (74) na| (35) na|
|other | |
+---------------------------------------------------------------+--------------+
|OPERATING INCOME (LOSS) (111) (290) +179m|(188) +77m|
+---------------------------------------------------------------+--------------+
|Financial income (loss) (43) (34) +26.5%| (31) +38.7%|
+---------------------------------------------------------------+--------------+
|PRE- TAX INCOME (LOSS) (154) (324) +170m|(220) +66m|
+---------------------------------------------------------------+--------------+
|Income tax 19 28 na| 28 na|
| | |
|Share in net income (loss) of associates (2) (2) na| (4) na|
+---------------------------------------------------------------+--------------+
|NET INCOME FOR THE CONSOLIDATED ENTITY (137) (298) +161m|(196) +59m|
+---------------------------------------------------------------+--------------+
|Non-controlling interests (11) (14) na| (13) na|
+---------------------------------------------------------------+--------------+
|NET INCOME, GROUP SHARE (126) (284) +158m|(183) +57m|
+---------------------------------------------------------------+--------------+
|EARNINGS PER SHARE (in ?) -0.3 -2.1 na|(0.1) na|
+---------------------------------------------------------------+--------------+
1. Before depreciation and amortization
na: not applicable
Summary consolidated balance sheet
|In millions of euros |
| |
| 31-Mar 31-Dec 31-Mar 31-Dec|
| Assets Liabilities |
| 2017 2016 2017 2016 |
+---------------------------------------+--------------------------------------+
| | |
| | |
| |Equity, Group share 3,183 3,284|
| | |
|Intangible assets, net 117 125|Non-controlling 479 494|
| |interests |
| +--------------------------------------+
|Goodwill 381 383|Total equity 3,662 3,778|
| +--------------------------------------+
|Net property, plant and 3,555 3,618|Shareholder loan 87 84|
|equipment | |
| | |
|Biological assets 88 88|Bank loans and other 1,084 1,121|
| |borrowings |
| | |
|Associates 128 125|Employee benefits 224 227|
| | |
|Other non-current assets 330 348|Deferred tax liabilities 65 80|
| | |
|Deferred tax assets 202 190|Other long-term 124 121|
| |liabilities |
+---------------------------------------+--------------------------------------+
|Total non-current assets 4,801 4,877|Total non-current 1,497 1,549|
| |liabilities |
+---------------------------------------+--------------------------------------+
|Inventories and work-in- 1,199 1,035|Provisions 271 280|
|progress | |
| | |
|Trade and other 587 546|Overdrafts and other 1,462 1,453|
|receivables |short-term borrowings |
| | |
|Derivatives - assets 7 58|Trade payables 580 530|
| | |
|Other current assets 293 283|Derivatives - 34 105|
| |liabilities |
| | |
|Cash and cash equivalents 1,013 1,287|Other current 307 310|
| |liabilities |
+---------------------------------------+--------------------------------------+
|Total current assets 3,099 3,209|Total current 2,654 2,678|
| |liabilities |
+---------------------------------------+--------------------------------------+
|Assets held for sale - 46|Liabilities disposal for - 43|
| |sale |
+---------------------------------------+--------------------------------------+
|TOTAL ASSETS 7,900 8,132|TOTAL LIABILITIES 7,900 8,132|
+---------------------------------------+--------------------------------------+
| |
+---------------------------------------+--------------------------------------+
|Net debt 1,533 1,287|Net income, Group share (126) (758)|
+---------------------------------------+--------------------------------------+
| |
+---------------------------------------+--------------------------------------+
|Gearing ratio 41.9% 34.1%| |
+---------------------------------------+--------------------------------------+
--------------------------------------------------------------------------------
[1] Scope effect calculated with regard to restated Q1 2016 revenue.
PDF version:
http://hugin.info/143606/R/2099209/795339.pdf
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: VALLOUREC via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 26.04.2017 - 17:45 Uhr
Sprache: Deutsch
News-ID 538550
Anzahl Zeichen: 39949
contact information:
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Kategorie:
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