Presentación Conference BPI - Tubacex

1 2017 Analyst Presentation1. Tubacex GROUP2. RECENT EVOLUTION3. 2017 OUTLOOK & HALF YEAR RESULTS4. STRATEGIC PLAN 2016 -2020 IndexPROPUESTA DE ACUERDOS1 Tubacex GROUP4 Analyst Presentation 2017 Pipes & tubesfittingsMaster distributionCommercial networkSteel billets & barsExtrusionCold finishingA fully integrated supplierTUBACEX GroupTUBACEX is the largest Seamless Stainless steel Presentation 2017 Sales > 500 million euros 11 mills in Spain, USA, Austria, Italy and India. Investment of 160 million in the last 5 years Commercial presence in over 14 countries More than 300 customers in over 100 countries. 2300 professionals Worldwide leading supplier of SSSPKEY FACTSTUBACEX GroupGeographical PresenceWorldwide Presence6 Analyst Presentation 2017 HeatExchangersHigh AlloysNuclearUreaUmbilicalsOff-shoreStd BoilersOCTGP recisionStdDownstreamlinepipeBarFurnaces SC BoilersMarket Growth-+ProfitabilityThe size indicates the volume of each segment, measured in Euros (not in tonnes)Traditional ProductsHigher Added Value Products-+ Tubacex GroupBusiness StrategyChanging successfully our former positioningFocus on customer service and delivery excellenceContinue our technological development with new products and services7 Analyst Presentation 2017 Other key mattersStable shareholder structure with positive market assessment Source.

2 Spanish Securities Exchange Commission (CNMV) on June 20, 2017 Shareholder StructureRelationship with InvestorsStable core of shareholders committed to the long-term project Only change in significantshareholders: aZValor becamesignificant shareholder in March 201755% of analysts with active coveragerecommended BuyTarget average price from analysts in June 2017: Aristrain 11,0%Ecofin 4,9%Itzarri 3,2%EDM 3,1%AZValor 3,0%Free - float 74,9% Tubacex GroupRECENT EVOLUTION29 Analyst Presentation 2017 Business StrategyMoving forward in the value chain with Premium Products50%53%Product breakdown2012201320142015201640%50%56%Pr emiumStandardPremium productsNew productsPremium productsFocus on added value60%% in euros of Premium products over total consolidated revenuesNote: the strong drop of volumes and pressure in prices experienced in 2015 and 2016 have significantly affected the consolidated margin of the GroupRecent EvolutionNew products refers to products industrialized since 200870%Type of product(Value Added)

3 Va l u echainMarginDCBA20122013201550%201450%20 1620%28%29%52%50%56%60%70%10 Analyst Presentation 2017 Strategy focused on client to increase global efficiency of hisprojects and processes Support of EIB through a loan to finance the Innovation andTechnological Development plan defined for 2015 -2019 Transforming the most demanding needs into customized solutions of high technological value developed in co-creation with customersEffort in R&D and Technological Innovation20122013201420152016R&D expenditure, industrialization of newproducts and technological innovation+50%Sales of new products15%21%32%29%52%20122013201420152 016 Sales of new products over sales ofmanufactured tubesInnovation StrategyRecent Evolution11 Analyst Presentation 2017 Significant improvement of results until Oil crashRevenues ( M)*53257561255455720122013201420152016 Main figures evolution46516449355,7%9,3%11,7%9,2%7,1% 20122013201420152016 EBITDAM argin+15%+40%EBITDA ( M)EBIT ( M)2732441625,0%5,7%8,0%2,9%0,5%201220132 01420152016 EBITM argin+65%Net Profit ( M)12,015,024,08,40,52,2%2,7%4,3%1,6%0,1% 20122013201420152016B NetoMarginx2 NFD ( M)* Revenues figure assuming nickel stable2621951522212072012201320142015201 6* Acquisition of two Companies (IBF and Prakash)

4 *Recent Evolution12 Analyst Presentation 20171612980966220122013201420152016-2568 47371420122013201420152016 Financial strategyHigh cash flow generated allows financial soundness5,7x3,8x2,4x4,5x5,9x20122013201 420152016165M generated in 4 yearsNFD / EBITDAG ross Cash flow15%47%28%7%3%12%32%32%10%14%17%41%22 %8%12%Less than 1 yearBetween 1-2 yearsBetween 2-4 yearsBetween 4-6 yearsMore than 6 years201420152016367M generated in 4 yearsDebt maturities scheduleCash flow before acquisitionsRecent Evolution13 Analyst Presentation 2017 Renues Breakdown by Geography7%57%35%1%8%20%69%3%USA & CanadaEuropeAsiaRest of WorldGeographical distribution of salesFinal destination for Project marketAsia remains the biggest market for the GroupRecent Evolution14 Analyst Presentation 2017 Offsetting the crisis in today's marketTubacex Action PlanMarket environmentTUBACEXD eterioration of the mix, volumes, prices and marginsResilience to the crisis Raw Materials:continuing low prices Oil&Gas Sector.

5 Investment cuts anddelays in the implementation of projects. Worldwide Growth:Low worldwidegrowth and worsening expectations. Prices:prices at historically low levels. Important change in theproduct mixdemanded and thevalue chain Diversification:of sectors, productsand markets. Cost Control:Adjustment plan in allexpenditure items Competitiveness:FocusonLeancompany,opera tionalimprovements,reduced lead-time, etc. Financial Strategy: reduction of costs,extending the maturity and diversificationof the sources of funding Concentration oncash generation WearenotstoppingourstrategicprojectsRece nt Evolution15 Analyst Presentation 2017 Concept designProduct designManufactureLogisticsInstallation & MaintenanceGrowing in the complete Value Chain to become the best supplier for integrated solutionNew servicesNew ProductsNew TecnologiesKey issues in 2016 Providingthe best Co-development with customers New grades and materials Offer of new dimensions and applications Design of customized solutions Complementary products Lean manufacturing practices New production processes Additional treatments and finishes Optimized logistics centers / Time to market Assistance at plants and maintenanceRecent Evolution16 Analyst Presentation 2017 Concentration oncash generationand defending theBalance Sheet

6 Continuationof theprojectslaunched in 2015 Focus on theplan to reduce overheads Growthfrom the increased market share in strategic products and marketsand entry intonew sectorsother than Oil&Gas Improvedmarket positioningwith End-user and EPCs Development ofnew products, grades and technologies Rapid evolution towardsSupplier of comprehensive Solutions We will not stopimportant strategic investmentsWe will emerge stronger from this crisisKey AspectsRecent Evolution17 Analyst Presentation 2017 Main financialsMill. RevenuesEBITDAEBITDA marginEBITEBIT ProfitNet working working capital / Financial Financial Debt / Var. 16 vs. 15 Evolution2017 OUTLOOK & HALF YEAR RESULTS319 Analyst Presentation 2017 Oil SectorTwo consecutive years of reduced : Barclays Global 2017 E&P Spending Outlook (January 2017)UpstreamCapex evolution($MM)-26%-23%+7%-38%+27%-37%+9% -20%+13%-18%+2%+8%+3%-24%-6%-5%+10%Ca da Capex 2016Ca da Capex estimada 2017 Norte Am ricaAm rica LatinaEuropaOriente MedioAfricaIndia + Asia + AustraliaRusia + FSU Two consecutive years of reduced investment for the first time in 30 years, can have a dramatic impact on thedecline rate of mature assets, thus the global upstream investment is expected to increase in 20172017 Outlook & Half Year Results20 Analyst Presentation 2017A gradual recovery is expected to start from 2017 onwards010020030040050060020072008200920 102011201220132014201520162017e2018e2019 e2020e2021eGolden TriangleRest of World The subsea market has undergone the most significant downturn in recent history After the bottom in 2016, a gradual recovery is expected to start from 2017 onwardsSource.

7 Wood MackenzieSubseaTr e e sOrders(#)Global SubseaCapex($Bn)Source: Rystad Energy02500050000 Subsea ServicesSubsea EquipmentSURFOil Sector2017 Outlook & Half Year Results21 Analyst Presentation 2017 It will take some years to return to the level of new projects launched in2013-2014 Only projects that are sustainable at barrel prices of 50-60 USD will beapproved Capex level required for similar projects before the crisis will be reducedby 20-30% Corporate mergers change the decision-making centers Intermediaries that do not add value will disappearWhat we learned from 2016 The sector is being restructured2017 Outlook & Half Year Results22 Analyst Presentation 2017 Our ResponseReal contribution to the optimization of costs and reduction of Capex We must be proactive, offering the market: Co-designin the prior phase to optimize costs Standardizationin the design of plants Multi-yearframework contractsoffering just in time services andbetter prices Elimination of non-value in the whole supply chain Servicein installation and after-sale maintenance2017 Outlook & Half Year Results23 Analyst Presentation 2017 FOCUS ON COST REDUCTION Connection Tubacoat Bigger outside diameters Entering in new patents.

8 Reduction in working capital, specific plans Keep on reducing financial cost Generating positive cash flow through operations Opennew customers, KAT OCTG inMiddle East for Gas Boostnew products Opening upnew markets:Iran Expansion ofTSS Reducepersonnel cost Boost projects launched oncostreduction BoostprojectsonproductiveimprovementsGRE ATER COMMERCIAL SUCCESSNEW BUSINESSES /Setting basis for future growthCASH MANAGEMENTO pportunities24132017 Outlook & Half Year Results24 Analyst Presentation 2017 Revenues and EBITDA evolutionEBITDAR evenues2017 Outlook & Half Year Results140136123147160143112119121140105 128131110050100150200Q1 2014 Q2 2014 Q3 2014 Q4 2014Q1 2015 Q2 2015 Q3 2015 Q4 2015Q1 2016 Q2 2016 Q3 2016 Q4 2016Q1 2017 Q2 201716,518,314,115,117,516,28,17,17,812, 210,54,513,04,611,8%13,5%11,5%10,3%10,9% 11,4%7,3%6,0%6,4%8,7%10,1%3,5%9,9%4,1%0% 5%10%15%20%25%05101520Q12014Q22014Q32014 Q42014Q12015Q22015Q32015Q42015Q12016Q220 16Q32016Q42016Q12017Q22017 EBITDA (M )Mg.

9 EBITDA25 Analyst Presentation 2017 Revenues and Adjusted Revenues ComparisonAdjusted Revenues*Revenues*Adjusted Revenues assuming the stable nickel price of 20122017 Outlook & Half Year Results140136123147160143112119121140105 128131110050100150200Q1 2014 Q2 2014 Q3 2014 Q4 2014Q1 2015 Q2 2015 Q3 2015 Q4 2015Q1 2016 Q2 2016 Q3 2016 Q4 2016Q1 2017 Q2 2017157153138164133122981061111381001291 2910631251921232120151812050100150200Q1 2014Q2 2014Q3 2014Q4 2014Q1 2015Q2 2015Q3 2015Q4 2015Q1 2016Q2 2016Q3 2016Q4 2016Q1 2017Q2 2017 Per metro comparableNuevas compa as adquiridas164147116159127134120144146118 26 Analyst Presentation 2017 Main financialsMill. RevenuesEBITDAEBITDA marginEBITEBIT ProfitNet working working capital / 2017H1 2016 Net Financial Financial Debt / + Var. + 2017FY 2016Va r. 2017 Outlook & Half Year 2017Q2 Var.

10 Neg.: : not meaningful27 Analyst Presentation 201720152016H1 201726%24%31%30%16%26%26%48%28%13%11%13% 5%1%2%E&P Oil&GasRefiningPower GenChem & breakdown by sector* * Direct sales to engineering firms and end-usersStrong positioning in Oil&Gas and Energy56% E&P Oil & Gas: Despite the cuts in the Capex of oil companies some specific big projects awarded that helped the gradual increase Better relative performance of the gas sector Power Generation: After two years of record sales of tubes for boilers at power stations with supercritical technology, some decrease due to new regulations Integral tubular solutions thanks to the incorporation of IBF and the development of new grades and technologies Downstream: Downward trend during the last quarters, but some big projects in Far East to be awarded Sales to the LNG sector can be highlighted Other alloys Diversifying effort Incorporation of new grades in the product portfolio Gradual increase of fertilizer orders40%57%2017 Outlook & Quarterly ResultsPROPUESTA DE ACUERDOS4 STRATEGIC PLAN2016 - 202029 Analyst Presentation 2017 Strategic Plan 2013 - 2017 Strategic Plan 2016 - 2020 From tube manufacturer to premium tubular solutions provider Undernormalmarketcircumstances, 2015 would havebeentheyearfortheconsolidationoftheS trategicPlan,practicallyfulfillingtheobj ective set for 2017If it were not for the oil crisis.