Agenda Market dynamics Actions underway Operating results Competitive position Investor Presentation Tenaris May 2010 3
Recovery driven by oil prices Rig count, WTI, North American natural gas and coal [Rigs] [US/mmbtu] 4,000 25 3,500 20 3,000 2,500 15 2,000 10 1,500 1,000 5 500 0 0 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06…
Demand for OCTG is also recovering (2006 = 100) 160 140 120 100 80 60 40 20 0 2006 2007 2008 2009 2010F Premium API Consumption Demand and consumption of OCTG are expected to come back into balance in 2010 2008…
Global OCTG consumption and Tenaris positioning Local markets in the Rest of the China and Americas world Russia API 55% API 84% API 94% Worldwide OCTG market PRM 45% PRM 16% PRM 6% 39% 27% 34% In these markets Tenaris…
Changing patterns in demand: US gas shales Gas: drilled wells and OCTG consumption evolution Tons/well Bcf/well Index 160 1.4 140 1.2 120 1 100 0.8 80 0.6 60 0.4 40 20 Shales 0.2 Shales Shales Shales Shales 0 0 2006…
Changing patterns in demand: Shales in the USA Connections Onshore gas (w/o shales) PRM API Shales gas PRM API Steel grades Onshore gas (w/o shales) HT NHT Shales gas HT NHT Conforming Onshore gas (w/o shales)…
Changing patterns in demand: Middle East gas OCTG Consumption Breakdown 3% 100% 7% 23% 25% 26% 28% 80% 30% 60% 40% 77% 75% 74% 69% 63% 20% 0% 2006 2007 2008 2009 2010F Oil Gas Iraq Premium % share OCTG used in…
Changing patterns in demand: worldwide offshore drilling Worldwide OCTG Consumption Offshore Worldwide OCTG Consumption USA 11% C HINA 10% SUB SAHARAN AFRIC A SOUTH EAST 11% ONSHORE OFFSHORE ASIA 89% 11% 27% MIDDLE EAST…
Agenda Market dynamics Actions underway Operating results Competitive position Investor Presentation Tenaris May 2010 11
Investments to support competitive positioning New rolling mill in Mexico by the end of 2010 expanding the range of our high-end products Transforming North American industrial operations: new heat treatment, finishing and…
New rolling mill in Veracruz Investor Presentation Tenaris May 2010 13
Strengthening our presence in the Eastern hemisphere Moving our Eastern Hemisphere oil and gas operations headquarters to Dubai New premium threading facility in Saudi Arabia by May 2010. Enhancing local content and customer…
Acting to limit unfair competition in local markets Important actions taken to defend our local markets against unfair competition from China 9 Duties introduced in USA 9 Duties introduced in Canada 9 Duties introduced in…
R&D: customer solutions and competitive differentiation Process improvements to enhance quality, reduce costs and manufacturing new steel grades Fatigue resistant steel grades and connections for shales applications Sour…
Agenda Market dynamics Actions underway Operating results Competitive position Investor Presentation Tenaris May 2010 17
Raw material costs are rising but (Jan 2006 = 100) 450 400 350 300 250 200 . 150 100 50 0 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Scrap HRC Pig iron Iron ore - pellets Investor…
prices are also starting to rise (Jan 2006 = 100) 450 400 350 300 250 200 . 150 100 50 0 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Scrap HRC Pig iron Iron ore - pellets Pipelogix…
Margin of TS Tubes segment [USD/Tn] [Th Tn] 4,000 1,500 3,000 1,000 2,000 500 1,000 0 - 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09 1Q10 Margin per ton Tubes volumes Cost per ton Price per ton Pipe Logix basket…
Operating and financial results Millions of US (except ratios and per ADS amounts) 2005 2006 2007 2008 2009 Net Sales 6,051 7,559 9,874 11,988 8,149 Tubes 5,055 6,734 8,433 10,010 6,671 Projects 790 454 876 1,271 986 Others 207 372 565…
Agenda Market dynamics Actions underway Operating results Competitive position Investor Presentation Tenaris May 2010 22
Well placed in a changing and competitive world Financial position US million 4,000 1.0 Financial strength: positive net cash 3,000 0.8 position, good cash flow and higher 2,000 0.6 margins than competitors 1,000 0.4 0 0.2…
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