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Investor Presentation
Tenaris 2Investor Presentation May 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 oil 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.
Tenaris 3Investor Presentation May 2017
Global Leader in Pipes for the Oil & Gas Industry
Tenaris 4Investor Presentation May 2017
Source: Bloomberg + World Gas Intelligence; Rystad Energy NASWellCube
[US$/bbl]
[US$
/MM
Btu
]
-
5
10
15
20
-
20
40
60
80
100
120
Jan-12 Sep-12 May-13 Jul-14 Mar'15 Nov'15 Jul'16 Mar-17
WTI
US Gas (Henry Hub)
LNG
Industry Response to Lower Prices
-
10
20
30
40
50
60
70
80
90
Eagle Ford Permian Delaware Permian Midland
Breakeven Evolution for Key Shale Plays
2014 2015 2016
Tenaris 5Investor Presentation May 2017
Source: TS estimates
4.8 4.2 3.5 3.7
3.9
2.62.6 2.6
1.1
0.80.6 0.7
8.0
4.0
2.2
5.2
17.7
11.6
8.8
12.1
2014 2015 2016 2017F
USA & CANADA
LATIN AMERICA
INTERNATIONAL
CHINA & RUSSIA
PJ Mix 20% 21% 23% 22%
[Mill tons]
OCTG Demand Recovery Underway
Tenaris 6Investor Presentation May 2017
Rig Direct™ Global DeploymentIntegrated service solution that addresses costs, quality, operational efficiency and sustainability
TS OCTG Sales: % Rig Direct™ Dec 2016
Tenaris 7Investor Presentation May 2017
0
1
2
3
4
5
6
7
8
2012 2013 2014 2015 2016 E
USA Demand
Imports fromsubject countries
[Mill Tn]
North America
USA InventoryUSA Demand and Imports
Tenaris 8Investor Presentation May 2017
1.000
1.200
1.400
1.600
1.800
2.000
2.200
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
[US$/Mt ton]
North America
Pipe Logix
20
40
60
80
100
120
140
160
180
2013
avg
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
Raw Materials Costs Evolution
Iron Ore (IODEX)
Scrap USA (CRU)
HRC USA (CRU)
Pipe Logix
HCC (Platts)
687 US$/Tn
264 US$/Tn
86 US$/Tn
1,405 US$/Tn
169 US$/Tn
Tenaris 9Investor Presentation May 2017
Rig Direct™ in North America
Industrial infrastructure
Service infrastructure
Product development
Shorter, more efficient and flexible supply chain
Differentiated service offer in the world’s largest and most dynamic market
Tenaris 10Investor Presentation May 2017
American Manufacturing RevivalBay City, the world’s most modern seamless pipe mill, now in Texas
Tenaris 11Investor Presentation May 2017
Short term
Offshore Recovery
Energy reform process advancing steadily but impact in demand will be limited over the next two years
Mex. Energy ReformE. Mediterranean Gas
Conditions for investment in outstanding shale play gradually falling into place
Fast track deepwaterpipeline developments (eg Zohr) with demanding schedules, pipe and service requirements
Vaca Muerta Shale
Medium term
Well Positioned in Growth Areas
Recovery in offshore projects will increase demand for advanced premium products and services
12TenarisInvestor Presentation May 2017
Financial Performance
* EBITDA adjusted excludes restructuring expenses
M illions of US$ (except rat ios and per ADS amounts)2012 2013 2014 2015 2016 Q1 2017
Net Sales 10,648 10,424 10,141 6,903 4,294 1,154
EBITDA 2,856 2,780 2,696 1,219 598 198
EBITDA Adjusted 2,856 2,780 2,696 1,396 672 207
EBITDA Adjusted margin 27% 27% 27% 20% 16% 18%
Net income (loss) of owners of the parent 1,699 1,551 1,159 (80) 55 205
Earnings per ADS 2.88 2.63 1.96 (0.14)
0.09 0.35
Cash flow from operations 1,856 2,377 2,044 2,215 864 26
Capital expenditures 790 753 1,089 1,132 787 139
Free cash flow 1,066 1,624 955 1,083 77 ( 113)
Net financial position -271 911 1,257 1,849 1,441 1,649
Dividend 508 508 531 531 484
13TenarisInvestor Presentation May 2017
Closing Remarks
• Market has changed in response to lower commodity prices: recovery underway led by North American shales
• Pipe prices increasing from unsustainable levels on higher demand
• Tenaris is uniquely positioned to take advantage in all regions and segments where growth is taking place
• Rig Direct™ is a game changer for the efficiency, capital discipline and time to market of the oil and gas industry
• Tenaris is leveraging its strengths in product technology, supply chain efficiency and global reach
• Tenaris has maintained a solid balance sheet and good financial performance throughout the downturn
14TenarisInvestor Presentation May 2017