Tubos Reunidos S A : 2023 - Half-Year 2023 Results

EVOLUTION

NEVER ENDS

Results for the First

Half of Financial

Year 2023

tubosreunidosgroup.com

1

RESULTS FOR THE FIRST HALF OF FINANCIAL YEAR 2023

Tubos Reunidos closes the half-year with a net profit of EUR 54.5 million

Amurrio, 28 July 2023

Tubos Reunidos Group has published its results for the first half of the 2023 financial year. The results continue the trend of the final months of the previous financial year, characterised by a high volume of high- priced orders across all segments. Revenue for the first half of the year reached EUR 333 million, a 36% increase on the EUR 244 million earned in the same period of the previous year.

This increase in revenue was mainly based on market prices for the final months of 2022. This allowed the Group to end the financial year with an exceptionally high backlog volume, which was reflected on

the income statement as this backlog was being produced and billed.

The positive growth in revenues was accompanied by cost containment that, together with the efficiency actions of the strategic plan, enabled some exceptional profit margins. As a result, EBITDA was EUR 87 million, 26% of revenue, exceeding the previous year's figure for the same period by EUR 72 million.

BUSINESS REVENUE

EUR 333 million

36% increase compared to 2022

EBITDA

EUR 87 million

exceeding the previous year's figure for

the same period by EUR 72 million.

2

RESULTS FOR THE FIRST HALF OF FINANCIAL YEAR 2023

Millions of euro unless otherwise stated	2023	2022	Change	Change (%)
RESULTS
Business revenue	333	244	89	36%
EBITDA	87	15	72	>100%
EBITDA margin/revenue	26%	6%	20%	-
Operating income	78	6	72	>100%
Net result	54	2	52	>100%
CASH FLOW AND DEBT
Cash flow from operations	40	(13)	53	-
Net cash flow	2	(16)	18	-
Net financial debt*	277	293	(16)	-5%
Net financial debt / EBITDA LTM	2,1X	(5,9x)	-	-
Cash and cash equivalents*	97	95	2	2%
OTHER
Backlog*	151	303	(152)	-50%
CapEx	16	3	13	>100%
Net equity*	2	(50)	52	-
Net equity for trading purposes *(1)	124	105	19	-

*Data compared to 31 December 2022

The exceptional performance of the business and its margins allowed the Group to close the half-year with a net profit of EUR 54.5 million, exceeding the EUR 43.5 million recorded for the entire previous year.

The negative financial result loss for the period was EUR 20.5 million (2022: EUR 4.2 million). Interest expenses on debt were EUR 12.6 million, 3.1 million more than in the same period in the previous year. This was a result of the impact that interest rate increases have had on variable rate financing. This item includes EUR 2.6 million interest on the profit participation loan from the FASEE (Fondo de Apoyo a la Solvencia de Empresas Estratégicas - Solvency Support Fund for Strategic Companies), including EUR 0.6 million in profit participation payable to the FASEE when the Group recorded a profit for the period.

(1) Of the Group's parent company

3

RESULTS FOR THE FIRST HALF OF FINANCIAL YEAR 2023

Consolidated pipe sales by territories and business sectors, and business trends

SALES BY GEOGRAPHY

(millions of euro)

200
180
160
140
120
100
80
60
40
20
0
North America	UE	Spain	East Asia	Middle East	Others
				and Africa

1S 2022

1S 2023

By territories, North America continues to stand out as the Group's main market, with revenue of EUR 173 million, representing 52% of total revenue. The number of rigs in operation remains high, but trended downwards throughout the half-year due to the uncertain macroeconomic situation. This is clearly signalling a decline in demand for pipes in the sector, in terms of both volume and price.

The European Union was the Group's second largest market, earning 23% of the Group's total revenue and growing 13% on the first half of 2022. Also worth highlighting is the strong growth in the Middle East and Africa. Although these territories represent just 3% of revenue, they grew by 174%, led by the United Arab Emirates, Saudi Arabia and South Africa. This is good news in terms of the diversification strategy.

RESULTS FOR THE FIRST HALF OF FINANCIAL YEAR 2023

EVOLUTION SALES BY SECTOR

(millions of euro)

		66	5	333
		20	-4
244	2

H1 2022 Downstream Midstream Upstream Construction, Others H1 2023 mechanical,

industrial

By sector, sales growth was focused on upstream operations (OCTG), which represented 38% of total revenue, a 104% increase on 2022. This was based on the recovery of the North American market to pre-pandemic levels, but with much higher prices. Midstream sales increased by 51%. On the other hand, mechanical-industrial piping weakened to a degree, falling 6% due mainly to price pressure.

Sales from electricity generation, refining and petrochemical (downstream) projects that contribute a mix of high alloy and stainless steels grew 4%, although many projects are pending reactivation in the high interest rate environment.