Boulogne-Billancourt (France), 29 April 2015 – Vallourec, world leader in premium tubular solutions, today announces its results for the first quarter 2015. The consolidated financial statements were presented by Vallourec’s Management Board to its Supervisory Board on 28 April 2015.
Q1 2015 financial results significantly affected by severe drop in Oil & Gas markets
- Sales at €1,052 million, down 17.2% year-on-year (down 24.2% at constant exchange rates), in line with market trends described at Vallourec’s full year results presentation last February
- EBITDA at €53 million, compared to €196 million in Q1 2014
Short-term flexibility levers
- Ongoing implementation of immediate measures to counteract activity reduction
Free cash flow
- Vallourec continues to target a positive free cash flow generation in 2015, despite a likely free cash outflow in H1
Execution of Valens plan on track, process launched aiming at:
- Downsizing European tube capacity by 1/3rd by 2017, compared with 2014
- Searching for a majority partner for the Saint-Saulve French steel mill
- Reducing fixed costs Group-wide
Commenting on these results, Philippe Crouzet, Chairman of the Management Board, said:
"Vallourec is currently facing very difficult market conditions, characterized by major E&P capex cuts by our customers. Q1 2015 was severely affected by a drop in high margin Oil & Gas sales in the EAMEA region, along with a challenging macroeconomic environment in Brazil and depressed iron ore prices. Following the decline in demand, price pressure in the market has intensified for new orders, particularly in North America and for less differentiated products in the EAMEA region.
To mitigate the negative impact of this challenging environment, Vallourec has activated all the short-term flexibility levers available to quickly adapt its mills to a significantly reduced load.
We are fully committed to the rapid implementation of Valens, our two-year competitiveness plan. We are launching the process to structurally reduce our European steel and tube capacity, and our worldwide overhead costs.
Despite this tough cyclical contraction, the long term fundamentals of our industry remain unchanged, and the measures we are taking will reinforce the Group's position as the market returns to normalized conditions.
In these challenging market conditions, Vallourec continues to benefit from a strong liquidity position, and to target a positive free cash flow generation in 2015."