Full year 2014 results and focus on value creation

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Vallourec Logo
24/02/2015 - Finance
Full year 2014 results and focus on value creation.

​​Boulogne-Billancourt (France), 24 February 2015 – Vallourec, world leader in premium tubular solutions, today announces its results for the full year 2014. The consolidated financial statements were presented by Vallourec's Management Board to its Supervisory Board on 23 February 2015.


Resilient 2014 financial performance and strong operational achievements

  • EBITDA at €855 million in line with guidance
  • Strong positive free cash flow in 2014 at €274 million
  • 2014 dividend proposed to be maintained at €0.81 per share



Outlook for 2015

  • Immediate measures taken to face oil market turmoil
  • Vallourec targets a positive free cash flow generation in 2015



Launch of Valens, a 2-year competitiveness plan

  • Cost reduction target of €350 million and capex reduction
  • New capital allocation framework
  • Target: ROCE over WACC in 2018, under normalized oil market conditions



Commenting on these results, Philippe Crouzet, Chairman of the Management Board, said:

"We recorded satisfactory growth in 2014, with a 2.2% increase in our full year sales. Thanks to efficient cost and cash management, we generated a strong free cash flow and decreased our net debt, despite the expected reduction in our EBITDA. Given the current environment we have adjusted the carrying value of certain assets within our portfolio, with no impact on the Group's cash situation and liquidity profile. We will propose to maintain FY 2014 dividend at €0.81 per share.

The current environment is marked by a severe oil price drop and major E&P capex cuts by our customers, notably in the USA and in the EAMEA region. To cope with the drop in sales volumes, all flexibility levers have been activated. In addition to these temporary measures, we have been working over the past six months on the design and implementation of a two-year plan (Valens) to structurally reduce the 2014 cost base by €350 million over the period 2015-2016, or 10% of added costs, and to reduce normalized capex by €100 million per year, at €350 million, an optimized level to maintain and grow the business. In 2015, Immediate and structural measures in the mills will result in a reduction of approximately 15% of working hours, including a reduction of approximately 7% of the workforce.

We will drive value creation by improving our cost competitiveness and cash generation capability, and increasing discipline related to our capital allocation policy. We are committed to improving Vallourec's return on capital employed, which we target to exceed its cost of capital in 2018, under normalized oil market conditions. This is a core component of how our business will be managed going forward."


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