At a glance - Vallourec a... · — Petrobras signs a new contract with Vallourec and announces a $74.5 billion investment plan by 2022. Large Brazilian offshore projects are attracting

At a glance

With more than 50 production sites and 19,500 employees in more than 20 countries, Vallourec provides advanced tubular solutions to customers in three markets:

Struck by an oil crisis of unusual force in 2014, the Group began a comprehensive transformation of its model, industrial capacities and ways of working to return to competitiveness. The results show the progress:

Increased demand for oil combined with the slowdown in production decided by OPEC countries and Russia encouraged the rebound in crude oil prices and triggered a return to exploration and production investments. At a barrel price of $ 65 and with cost optimization in the sector, the outlook for deep offshore is improving with 40 potential projects in 2018.

68.5%*

Oil and gas, petrochemicals

2.25 MTProduction shipped +76.1 %

+1.6 MB/DIncreased oil production

in 2017

€3.7 billionSales +26.5%

$42k$66Rebound in crude oil prices June 2017 > February 2018

10.9%*

Power generation

20.6%*

Industry and other

* Distribution of revenues

NORTH AMERICA— MIDDLE EAST/ASIA—— Shale dynamics are boosting global recovery with nearly 930 rigs, and the International Energy Agency (IEA) is projecting a doubling of US production to 1.5 million barrels per day by 2018. This would make the US the world’s leading oil producer. Vallourec is capitalizing by leveraging its competitiveness and its customer experience.

— The «premiumisation» of the Tianda factory in Chuzhou is on track. The Group’s ultra-competitive route will open just in time to take advantage of opportunities in China and in the Middle East where tenders for the oil and gas market are multiplying.

EUROPE/AFRICA—SOUTH AMERICA—— The showcase region for Vallourec’s products and processes holds its destiny in its hands. Ambitious improvement plans implemented to optimize flows between interdependent production sites and the search for new markets seek to capitalize fully on the recovery of the markets.

— Petrobras signs a new contract with Vallourec and announces a $74.5 billion investment plan by 2022. Large Brazilian offshore projects are attracting major producers. Vallourec is well-positioned: it is the only local producer of seamless tubes and the Jeceaba plant is now the Group’s leading rolling mill.

4 regional hubs

— Pipe mill — Steel mill — R&D center — Finishing unit — Sales and services office — Plantation and mine

and central management that guarantees the fulfillment of customer needs at the best cost.

OPTIMIZED ROUTES FROM PRODUCTION TO DELIVERY—

NORTHAMERICA

BRAZIL

25% of production capacity

An offer for the local oiland gas market.

30% of production capacity

A unique and very competitive production center.

Local production capacities and clear roles in Vallourec’s industrial network.

EUROPE

CHINA

25% of production capacity

A center of technological excellence.

20%of production capacity

A new ultracompetitiveproduction center.

3 STRENGTHS OF THE NEW ROUTES—

�1. �2. �3.

Increase market share on the entry-

and mid-range segments.

Serve customers from Asia, the Middle East and Africa

from Brazil and China.

Meet new expectations

in terms of service.

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TRANSFORM A MOMENTUM AND A MINDSET—

The Transformation Office is orchestrating Vallourec’s transformation in phases in all regions of the world. Following work on competitiveness and the optimization of the organization and its processes, the digital transformation has been launched and the cultural transformation is taking shape around two initiatives: killing complexity and putting the customer at the center of all that is undertaken.

“WE NEED TO REDOUBLE OUR

COMPETITIVENESS AND INNOVATE

FASTER BY LEVERAGING ALL OF TODAY’S

TOOLS.” —Philippe Crouzet ,

Chairman of the Management Board

Vallourec tomorrow

DIGITIZE A 3D ROADMAP: PRODUCTION, CUSTOMERS, EMPLOYEES—

The 4.0 era began at the Group’s flagship plant in Jeceaba, Brazil. The first innovations are game changers for customers. The application against counterfeiting, Valguard, allows them to ensure that the tubes are Vallourec tubes by using an innovative marking and to check quality certification via a QR code. From chatting with the President to the corporate social network, collaborative tools are streamlining exchanges and digital solutions are simplifying life for employees.

CHALLENGE IN THE CONTEXT OF START-UPS AND YOUNG MANAGERS—

Vallourec participates in pitching with innovative start-ups at BPI in France, and on the campus of the R&D center in Rio, Brazil. Following the «Open Brazil» challenge around data science, the Group launched its first global «Open Innovation Challenge» on the theme of smart tubes. Guided by employees, more than 40 start-ups from all continents proposed a project. A global judging panel selected two winning teams who have 12 months to co-develop the smart tubes of tomorrow.Imagine Vallourec in 2025, when you take the reins of the Group: this is what the Chairman of Vallourec asked of 25 young managers from all continents and all functions. Out of 17 proposals submitted to the Management Board and Executive Committee, 12 generated enthusiasm and are in the process of being developed.

1/3of Vallourec’s future

innovations will optimize customers’ utilization of

tubes, that’s the objective

MOBILIZE THE COMMITMENT IS THERE—

The transformation has disrupted organizations, teams and ways of doing things. But the commitment remains. The Opinion survey launched in 2017 with 18,104 employees from 52 Vallourec sites around the world reflects this. More than 10,800 employees, or about 60% of the workforce, responded. They rated their employer 7.18 out of 10. More than 93% said they are proud to work at Vallourec and nearly 10,000 employees in 11 countries subscribed to the 10th global employee shareholding operation, «Value 17.» A sign of connection with the company and confidence in its ability to rebound.

“VALLOUREC HAS EVERYTHING IT NEEDS FOR THE PHASE THAT IS NOW BEGINNING.” —Vivienne Cox , Chairman of the Supervisory Board

93%of interviewees

are proud to work at Vallourec