• Revenue: Not explicitly mentioned in the transcript.
• EBITDA Margin: Increased sequentially to 20% in Q4 2024.
• Net Debt: Reduced by nearly EUR600 million, achieving a net cash position of EUR21 million at the end of Q4 2024.
• Dividend Proposal: EUR1.50 per share, representing 90% of second half 2024 total cash generation.
• Q4 EBITDA: EUR214 million.
• Full Year Mine & Forest Volumes: 5.4 million tonnes.
• Q4 Mine & Forest EBITDA: EUR40 million.
• Full Year Mine & Forest EBITDA: EUR108 million.
• Q4 Net Income: EUR163 million.
• Q4 Total Cash Generation: EUR253 million.
• Liquidity: Increased to more than EUR1.8 billion.
• Q1 2025 EBITDA Guidance: Expected to range between EUR180 million and EUR215 million.

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Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Vallourec SA (VLOUF) achieved its zero net debt target a full year ahead of schedule, reducing net debt by nearly EUR600 million.
• The company announced its first dividend in a decade, proposing a EUR1.50 per share dividend, representing 90% of its second half 2024 total cash generation.
• Vallourec SA (VLOUF) delivered a strong EBITDA margin of over 20% for the year, showcasing consistent profitability.
• The Brazil optimization program is progressing well, with cost savings ahead of plan, targeting over EUR150 per ton in regional cost improvement.
• The company successfully finalized the sale of its last remaining production site in Germany for EUR155 million and announced its first acquisition in nearly a decade with the purchase of Thermotite do Brasil for around EUR170 million.

Negative Points

• Vallourec SA (VLOUF) experienced a year-over-year reduction in EBITDA due to a substantial decrease in US EBITDA, driven by a $600 to $700 per tonne reduction in invoice prices.
• The company anticipates lower international shipments in the first quarter of 2025, which may offset the sequentially higher Tubes EBITDA per tonne.
• The Mine & Forest segment faced challenges with lower prices and volumes, impacting overall performance.
• There is uncertainty regarding the impact of increased US tariffs on international competition and potential effects on deliveries.
• The average selling price declined in the US business, with the fourth quarter being the low point in terms of invoice price.

Q & A Highlights

Q: Will the increase in tariffs in the US result in more competition on international markets and impact your deliveries? A: Philippe Guillemot, CEO, confirmed that Vallourec's focus on high value-added products protects them from potential competition due to decreased export opportunities in the US. Therefore, it's not a concern for Vallourec.

Q: How does Vallourec manage changes in raw material costs, and what would it take to increase production closer to nameplate capacity in the US? A: Philippe Guillemot, CEO, stated that Vallourec has been disciplined in passing through cost increases. The focus is on increasing capacity in heat treatment and premium threading, with investments in high-torque connections for the US market.

Q: Can you comment on the regions where you have seen significant tender success and the impact on H2 2025? Also, how do you interpret the increase in US OCTG imports? A: Philippe Guillemot, CEO, noted strong bookings in late 2024, particularly in the Middle East, which will lead to stronger H2 2025 results. Regarding US imports, he emphasized the distinction between welded and seamless pipes, with Vallourec well-positioned in the seamless market.

Q: Are you expecting similar negotiations to the 2017 Section 232 tariffs in the US, and does your H2 guidance assume any pricing increases? A: Philippe Guillemot, CEO, mentioned that Vallourec will continue to protect its margins regardless of tariff changes. The H2 guidance does not assume any pricing increases in the US, indicating confidence in existing contracts and market conditions.

Q: With a strong liquidity position, how might Vallourec use excess cash, and what is your exposure to the US gas market? A: Philippe Guillemot, CEO, stated that Vallourec is exposed to 20% of the US gas market. The company plans to return 80% to 100% of total cash generation to shareholders while maintaining a disciplined balance sheet.

Q: What is the potential for exports from the China region to become accretive to the group? A: Philippe Guillemot, CEO, explained that the Chinese assets are now focused on high value-added exports, with margins in line with the group. There is potential for further improvement as capabilities are enhanced.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.