Investor Presentation Paolo Rocca Chairman and Chief Executive - - PowerPoint PPT Presentation

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Investor Presentation Paolo Rocca Chairman and Chief Executive - - PowerPoint PPT Presentation

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Investor Presentation Paolo Rocca Chairman and Chief Executive Officer London - Sep 22, 2017 Disclaimer This presentation contains forward-looking statements. Forward-looking statements are based on managements current views and

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Investor Presentation

Paolo Rocca Chairman and Chief Executive Officer London - Sep 22, 2017

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Tenaris 2 Investor Presentation September 2017 Disclaimer This presentation contains “forward-looking statements.” Forward-looking statements are based on management’s current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those

  • statements. These statements include information regarding management strategy, investment plans,

development and growth of the steel pipe and oil and gas industries, trends and other prospective data, including trends regarding the development of raw material costs and the levels of investment in

  • il and gas drilling worldwide and general economic conditions in the countries where Tenaris operates

and sells its products and services. We do not undertake to update any forward-looking statement to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Except where otherwise stated, the data presented herein is based on Tenaris analysis and estimates.

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Tenaris 3 Investor Presentation September 2017

Source: Bloomberg ; Rystad ; IHS

Industry Adapting to Lower Oil Prices

US Shale Breakeven Costs ($/bbl) 20 40 60 80 2014 2017 Deepwater Breakeven Costs ($/boe) 20 40 60 80 2014 2017

Liza Kaikias Coral Range ¡-­‑ ¡ ¡ ¡ ¡ ¡20 ¡ ¡ ¡40 ¡ ¡ ¡60 ¡ ¡ ¡80 ¡ ¡ ¡100 ¡ ¡ ¡120 ¡ ¡ ¡-­‑ ¡ ¡ ¡ ¡ ¡100 ¡ ¡ ¡200 ¡ ¡ ¡300 ¡ ¡ ¡400 ¡ ¡ ¡500 ¡ ¡ ¡600 ¡ ¡ ¡700 ¡ ¡ ¡800 ¡ ¡ ¡900 ¡ ¡ ¡1,000 ¡ ¡ 1970 ¡1972 ¡1974 ¡1976 ¡1978 ¡1980 ¡1982 ¡1984 ¡1986 ¡1988 ¡1990 ¡1992 ¡1994 ¡1996 ¡1998 ¡2000 ¡2002 ¡2004 ¡2006 ¡2008 ¡2010 ¡2012 ¡2014 ¡2016 ¡

US$/bbl ¡ Capex ¡US$ ¡Bn ¡

Onshore/ConvenAonal ¡ Onshore/UnconvenAonal ¡ Offshore ¡ WTI ¡

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Tenaris 4 Investor Presentation September 2017

Source: TS estimates

OCTG Demand Recovering

4.3 3.5 4.6 2.3 5.8 4.1 1.3 1.3 1.7 0.9 ¡-­‑ ¡2 ¡4 ¡6 ¡8 ¡10 ¡12 ¡14 ¡16 ¡18 ¡20 2014 2015 2016 2017

Million ¡Tonnes

Russia ¡& ¡China Onshore ¡Others Onshore ¡Shales Middle ¡East Offshore

+8% (4%) +126%

∆ ¡2016

+60% +5%

17.7 11.6 8.8 12.1

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Tenaris 5 Investor Presentation September 2017

Strengthening Rig Direct™ in North America

Expanded North American footprint

Oklahoma City Fort McMurray Grande Prairie Leduc Fort Saskatchewan Bienfait Nisku Prudential AlgomaTubes Midland Freeport Hickman Bakersfield Conroe Houston Westwego Manufacturing Centers Service Centers BayCity

6 new service centers Product development (TSH Wedge XP™) PipeTracer™ digital pipe by pipe tracking system State of the art manufacturing center Shorter, more efficient and flexible supply chain Lead time & inventory reduction

Bay City Others

$1.8 Bn Bay City $0.1 Bn Service Centers

Investment

Tamsa Reynosa Poza Rica Comalcalco Dos Bocas Ciudad del Carmen

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Tenaris 6 Investor Presentation September 2017

Rig Direct™ Global Deployment

Integrated service solution that addresses costs, quality,

  • perational efficiency and sustainability

97 205 157 297 % OCTG Sales Customers Served Rigs Served

Rig Direct™ Evolution

Jul-17 Jul-16

54 49

  • USA: extensive adoption in

Permian, Eagle Ford and Haynesville; extending to

  • ther regions
  • Canada: widespread adoption

facilitating market share gains

  • Latam: established in Mexico

and Argentina for 20 years, now in Colombia and Ecuador

  • EH: fully established in North

Sea, Romania and Chevron Thailand, expanding in Indonesia, Caspian and UAE

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Tenaris 7 Investor Presentation September 2017

US OCTG Imports

0% 10% 20% 30% 40% 50% 60% 70% ¡-­‑ ¡200 ¡400 ¡600 ¡800 ¡1,000 ¡1,200 ¡1,400 ¡1,600 ¡1,800 2014 Quarterly Average 2015 Quarterly Average 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17

Thousand ¡Tonnes

Domestic ¡Supply Other ¡Imports Imports ¡from ¡Subject ¡Countries % ¡of ¡imports ¡on ¡Total ¡Demand

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Tenaris 8 Investor Presentation September 2017

Short term

Offshore Recovery

Recent discoveries by Talos and ENI will encourage energy reform process: as investments are implemented demand should gradually recover

  • Mex. Energy Reform
  • E. Mediterranean Gas

Investments in world- class Vaca Muerta shale are being confirmed and sales in Argentina are recovering Deliveries to fast track deepwater pipeline developments (eg Zohr) will boost results from Q4

Vaca Muerta Shale

Medium term

Well Positioned in Growth Areas

New offshore projects are starting to be sanctioned and a gradual recovery should take place

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Tenaris 9 Investor Presentation September 2017

20 40 60 80 100 120 140

2014 ¡avg 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Jul-­‑17 Aug-­‑17 Sep-­‑17F

Iron ¡Ore ¡(IODEX) Scrap ¡USA ¡(CRU) HRC ¡USA ¡(CRU) HRC ¡FOB ¡China

Cost Inputs Evolution

Raw Materials 334 US$/Tn 687 US$/Tn 72 US$/Tn 595 US$/Tn

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10 Te Tenaris Investor Presentation September 2017

Financial Performance

* EBITDA adjusted excludes restructuring expenses

Millions of US$ (except ratios and per ADS amounts)

2012 2013 2014 2015 2016 1H 2017 Net Sales 10,648 10,424 10,141 6,903 4,294 2,397 EBITDA 2,856 2,780 2,696 1,219 598

398 ¡

EBITDA Adjusted 2,856 2,780 2,696 1,396 672

420 ¡

EBITDA Adjusted margin 27% 27% 27% 20% 16% 18% Net income (loss) of owners of the parent 1,699 1,551 1,159 (80) 55 280 Earnings per ADS 2.88 2.63 1.96 (0.14) 0.09

0.47 ¡

Cash flow from operations 1,856 2,377 2,044 2,215 864

47 ¡

Capital expenditures 790 753 1,089 1,132 787

294 ¡

Free cash flow 1,066 1,624 955 1,083 77

  • ­‑246 ¡

Net financial position (271) 911 1,257 1,849 1,441 1,129 Dividend 508 508 531 531 484

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11 Te Tenaris Investor Presentation September 2017

Closing Remarks

  • Market is adapting to lower oil and gas prices: North American

shales will remain a key driver in coming years

  • Tenaris is uniquely positioned to take advantage in all regions

and segments where growth is taking place

  • Rig Direct™ is being adopted in many parts of the world as its

benefits for the efficiency, capital discipline and time to market of the oil and gas industry are demonstrated in the field

  • Tenaris is leveraging its strengths in product technology, supply

chain efficiency and global service delivery

  • Tenaris maintains a solid balance sheet and good financial

performance giving it the flexibility to take advantage of market

  • pportunities
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12 Te Tenaris Investor Presentation September 2017