Vallourec (VK) Q3 2024 earnings summary

Executive summary

• Q3 2024 EBITDA reached €168m with a 19% margin, supported by strong international OCTG markets and the New Vallourec Plan, despite softer US pricing and a 22% revenue decline; net income was €73m, nearly flat year-over-year.

• Achieved significant cash generation of €130m in Q3, reducing net debt to €240m for the eighth consecutive quarter.

• Exited the Safeguard plan after eight quarters of deleveraging, marking a major milestone post-financial restructuring, and confirmed plans for a dividend proposal in 2025.

• Announced the strategic acquisition of Thermotite do Brasil to strengthen the offshore line pipe market and premium product offering.

• Welcomed ArcelorMittal as a new anchor shareholder and Board member.

Financial highlights

• Q3 2024 revenues were €894m, down 22% year-over-year; EBITDA was €168m (18.8–19% margin), down from €222m in Q3 2023.

• Adjusted free cash flow in Q3 was €183m, down 16% year-over-year.

• Net debt reduced by €124m quarter-over-quarter to €240m; liquidity position at €1,561m as of September 30, 2024.

• Tubes EBITDA per tonne was €556, nearly flat year-over-year; Tubes volumes in Q3 were 292 kilotons, down 15% year-over-year.

• Mine & Forest EBITDA dropped 56% year-over-year to €22m on lower volumes and prices; Q3 production sold was 1.3 million tons.

Outlook and guidance

• Full-year 2024 EBITDA guidance of €800–€850m reiterated; Q4 EBITDA expected to increase sequentially, driven by higher Tubes volumes.

• Net debt projected to remain broadly stable in Q4 due to higher CapEx and restructuring cash outflows.

• Second half total cash generation to remain positive; dividend proposal for 2025 AGM to be announced with FY 2024 results.

• Mine & Forest volumes to decline in Q4 due to seasonality; full-year segment EBITDA expected slightly below €100m.