VALLOUREC: Vallourec updates its 2014 guidance
Vallourec updates its 2014 guidance
oSignificant temporary adjustments due to key Brazilian customer Petrobras
deciding to eliminate most of its tube inventories, and to reduced level
of Oil & Gas orders in EAMEA
oActions taken to adjust to the temporary demand shortfall
o2014 EBITDA is now targeted to be down by approximately 10% relative to
oCapex reduction by €100 million to protect Free Cash Flow
Boulogne-Billancourt (France), 10 June 2014 - Vallourec, world leader in
premium tubular solutions, today announces an update of its 2014 guidance,
following a significant temporary reduction in demand for its Oil & Gas
operations in Brazil and in EAMEA^.
In Brazil, Petrobras has decided to eliminate most of its tube inventories by
year end, while maintaining its drilling plans. This will be a one-time
adjustment. It will heavily weigh on Vallourec's sales in the second semester
of 2014, with an estimated net EBITDA impact of circa €60 million. In
addition, the Brazilian non Oil & Gas activities are impacted by the continued
deterioration in the local macroeconomic environment, and declining iron ore
In EAMEA, the level of orders has strongly reduced resulting from E&P^
operators adjusting their inventories and delaying some tenders for premium
products. This will impact deliveries through the end of the year and in the
first half of 2015. It does not change the positive structural trends
resulting from major E&P capex programs in the region, required to offset
depletion and support growing demand.
The Group has taken several actions on the operational front to mitigate these
temporary negative impacts:
oIn Brazil, Vallourec is adapting its mills to the lower load.
oTo adjust to a lower demand in EAMEA, Vallourec is adapting its industrial
operations servicing those markets, in addition to the recently announced
measures aiming at structurally improving its European cost base.
As a result, the Group now targets EBITDA to be down by approximately 10% when
compared to 2013.
The Group remains focused on Free Cash Flow generation, and has accordingly
decided to reduce its capital expenditures by €100 million (down from an
initial target of €500 million for 2014).
Philippe Crouzet, Chairman of the Management Board, said:
"The Group is facing a more challenging environment mainly due to temporary
adjustments by selected large customers, and has taken immediate measures to
adjust to this new situation. Management remains convinced of the long-term
attractiveness of the global Oil & Gas end markets the Group serves and
committed to implementing its strategy aimed at taking full advantage of these
favorable structural trends."
Vallourec is a world leader in premium tubular solutions primarily serving the
energy markets, as well as other industrial applications.
With over 24,000 employees, integrated manufacturing facilities, advanced R&D
and a presence in more than 20 countries, Vallourec offers its customers
innovative global solutions to meet the energy challenges of the 21st century.
Listed on Euronext in Paris (ISIN code: FR0000120354, Ticker VK) and eligible
for the Deferred Settlement System (SRD), Vallourec is included in the
following indices: MSCI World Index, Euronext 100, SBF 120 and CAC 40.
In the United States, Vallourec has established a sponsored Level 1 American
Depositary Receipt (ADR) program (ISIN code: US92023R2094, Ticker: VLOWY).
Parity between ADR and a Vallourec ordinary share has been set at 5:1.
Follow us on Twitter @VallourecGroup
Conference call details
Tuesday 10 oAnalyst conference call / audio webcast at 6:30 pm (CET) to be
June 2014 held in English.
To participate in the call, please dial:
0800 279 4835 (UK), 0805 636 389 (France),
1877 280 3459 (USA), +44 (0)20 3427 1926 (Other countries)
oAudio webcast will be available on the website at:
oA replay of the conference call will be available until 17 June
To listen to the replay, please dial:
0800 358 7735 (UK),0800 989 597(France),
1 866932 5017 (USA), +44 (0)20 3427 0598 (Other countries)
Access code: 9092501
Information and Forward-Looking Reflections
This press release contains forward-looking reflections and information. By
their nature, these reflections and information include financial forecasts
and estimates as well as the assumptions on which they are based, statements
related to projects, objectives and expectations concerning future operations,
products and services or future performance. Although Vallourec's management
believes that these forward-looking reflections and information are
reasonable, Vallourec cannot guarantee their accuracy or completeness and
investors in Vallourec are hereby advised that these forward-looking
reflections and information are subject to numerous risks and uncertainties
that are difficult to foresee and generally beyond Vallourec's control, which
may mean that the actual results and developments differ significantly from
those expressed, induced or forecasted in the forward-looking reflections and
information. These risks include those developed or identified in the public
documents filed by Vallourec with the AMF, including those listed in the "Risk
Factors" section of the Registered Document filed with the AMF on April 14,
2014 (N° D.14-0358).
07/30/2014 Release of second quarter and first half 2014 results
11/06/2014 Release of third quarter and first nine months 2014 results
For further information, please contact
Investor relations Press relations
Etienne Bertrand Caroline Philips
Tel: +33 (0)1 49 09 35 58 Tel: +33 (0)1 41 03 77 50
 EAMEA: Europe, Asia, Middle-East, Africa
 E&P: Exploration and Production
140610 - Press Release Vallourec - Guidance 2014 in PDF
This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf
of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for
the content, accuracy and originality of the information contained therein.
Source: VALLOUREC via Globenewswire
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