Investors will have to change their habits.
Having suffered losses, disappointing publications and restructurings for many years, Vallourec shareholders risk being surprised by the results of the seamless tube specialist last year.
“2023 was a very good year for Vallourec,”
confides Philippe Guillemot, CEO of Vallourec, to Le
Figaro
.
It allowed us to completely execute the roadmap that I announced in May 2022.”
The good direction of the 2023 financial year was, however, known, since the manufacturer of seamless tubes intended for the vast majority for the oil and gas industry had raised its results forecasts twice during the year, in particular concerning the gross operating surplus (Ebitda).
“It closes at nearly 1.2 billion euros,”
explains Philippe Guillemot.
In 2023, we will reach an Ebitda margin of 23.4%, while the last quarter before my arrival, it was 4%.
The evolution is colossal.
And the cash generation was also very significant, since the net debt fell to 570 million euros.
“Our net debt has been reduced by half in one year!”
, welcomes the CEO of Vallourec.
This publication represents the best of the group in 15 years.
“The page on recovery has been turned,”
welcomes Philippe Guillemot.
It is now a new Vallourec, which once again becomes master of its destiny and in a position to invest for its future.”
As soon as he arrived at the head of the group, the boss quickly took structuring decisions.
There have been industrial restructurings, with the closure of factories in Germany and a factory in France, to focus on North America, Brazil and China, that is to say where there are the group's opportunities.
The organization has been greatly simplified, with the disappearance of three hierarchical levels.
And the strategic choice made to stop selling commodity products to focus on products with higher added value.
“This choice resulted in a drop in volumes but much more margin for each ton sold,”
estimates the group’s CEO.
And, overall, much more margin.”
The figures for 2023 show this clearly.
Thus, volumes fell by 14%, but this decline was more than offset by a price effect of +18%.
In total, turnover for the year increased by 5%, to 5.1 billion euros.
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Rating revised upwards three times in 18 months
Last lever: focusing on cash.
“I notably indexed all the variable shares of a thousand employees to cash,”
explains Philippe Guillemot.
With this objective of net debt at zero by the end of 2025 at the latest.
This triggered creativity on all the levers we could use, particularly working capital.”
This improvement was seen by everyone, particularly the rating agencies.
This allowed Vallourec's rating to be revised upwards three times in just 18 months.
A real performance.
Ultimately, the boss believes that
“this performance was made possible by the commitment and quality of the Vallourec teams”
.
These efforts to improve short-term performance were not made by compromising the future.
“We have not forgotten to invest in the medium and long term, particularly by investing in non-fossil fuels,”
explains the boss.
On December 4, Vallourec inaugurated a compressed hydrogen storage solution, which is a world first.
And, a month later, an agreement (MoU) was signed so that this solution could be included in a project in Marseille-Fos.
“By 2030, we are still targeting 10 to 15% of our gross operating surplus generated outside of fossil fuels,”
indicates Philippe Guillemot.
The outlook for the year ahead looks positive, driven by international activity which remains very strong in terms of prices and volumes and a stabilization of prices in the United States.
“In 2024, we will continue to reduce the group's debt from the first quarter,”
the manager predicts.
And, for the first half of the year, we expect an operating result quite similar to the gross operating profit for the second half of 2023.”
The final proof of recovery will be given by the distribution of a dividend.
This is part of the objectives of the CEO of Vallourec, who believes that the group
“will be able to make a return to our shareholders from 2025, as we mentioned in September”
.