Hello, and welcome to the Vallourec Q2 and H1 2023 Results Conference Call. Please note, this call is being recorded. For the duration of the call, your lines will be on listen-only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing *1 on your telephone keypad to register your question. If you require assistance at any point, please press *0, and you will be connected to an operator. I will now hand you over to your host, Connor Lynagh, to begin today's conference. Thank you. Good morning, ladies and gentlemen. Thank you for joining us for Vallourec's Q2 2023 results presentation. I'm Connor Lynagh, Vice President of Investor Relations at Vallourec. I'm joined today by Vallourec's Chairman and Chief Executive Officer, Philippe Guillemot, and Vallourec's Chief Financial Officer, Sascha Bibert. Before we begin our presentation, I would like to note that this conference call will be recorded and a replay will be available following the call. You can find the audio webcast on our investor relations website. The presentation slides referred to during this call are available for download here as well. Today's call will contain forward-looking statements. Future results may differ materially from statements or projections made on today's call. The forward-looking statements and risk factors that could affect those statements are referenced at the beginning of our slide presentation. These are also included in our Universal Registration Document filed with the Autorité des marchés financiers, the AMF. This presentation will be followed by a Q&A session. I will now turn the call over to Philippe Guillemot. Thank you, Connor. Welcome, ladies and gentlemen, and thank you for joining us for this update on Vallourec's Q2 2023 results. Before proceeding, let me draw your attention to Slide 2, where you can consult our Safe Harbor statement. Today's agenda is on Slide 3. I will start by giving you an overview of the highlights of the Q2, followed by an update on the execution of our New Vallourec plan and a word on market environment. Sascha will then take you through our Q2 numbers, I will wrap up with the outlook for full year 2023. First, let's look at the highlights of the Q2 on Slide 5. On the Q2 of 2023, EBITDA was EUR 374 million, which reflects the EUR 214 million year-over-year increase. Our Tubes EBITDA contribution was EUR 330 million, a strong increase of EUR 201 million year-over-year. This was supported by a 27% average selling price increase compared to Q2 2022. Mine & Forest EBITDA was EUR 50 million, which was stable year-over-year. This result was driven by higher volumes, offset by lower iron ore prices. Our adjusted free cash flow was very strong once again, coming in at EUR 174 million. In the Q2, we reduced net debt by EUR 132 million, leaving us with net debt of EUR 868 million at the end of June. This is more than EUR 500 million lower than last year, end of June. As we indicated in our early results announcement earlier this month, we confirm our outlook for full-year EBITDA to range between EUR 950 million and EUR 1.1 billion. Moving to our commercial and operational updates. The international Tubes market remains strong. Drilling activity outside of the US has remained on the rise, we have continued to capitalize on this demand environment and capacity constraints at major suppliers in the form of higher prices. The US market has continued to normalize from the very strong levels at which it began the year, the headwinds that have driven this change are abating. We think the supply-demand balance is improving, we expect pricing to normalize at healthy levels. Meanwhile, our mine returned to higher production levels at the end of the Q2 as expected. However, we expect it will operate below its full potential in the second half of 2023. This quarter, we signed two key Memorandums of Understanding or MOUs. First, we signed an MOU with Evonik, where we have agreed to work together to develop an innovative corrosion-resistant CO2 transportation technology. The corrosive nature of CO2 makes the development of carbon capture, utilization, and storage infrastructure challenging. Solutions such as this could substantially enhance the development of this infrastructure. In addition, we signed an MOU with the Ministry of Investment of Saudi Arabia to expand the group's activities in the kingdom. This includes innovations in carbon capture, hydrogen products, and other innovative offering of the Vallourec group. We are pleased to further our scope of cooperation with customers in this key country. Finally, we announced three major offshore line pipe contracts for Brazil's Búzios Field.... The three orders represent a total of 48,000 tons of high-end line pipe. Let's turn to Slide 7, to review our New Vallourec plan. As a reminder, the New Vallourec plan was announced in May 2022. Our key objectives are to cycle-proof our business and drive best-in-class profitability. Versus the 2021 baseline, we plan to drive a €230 million EBITDA improvement and a €20 million CapEx reduction, with a full impact starting in Q2 2024. For reference, our target 2024 industrial footprint is shown at the left. Slide 8 provides some color on a few of the near-term programs we are executing in the New Vallourec plan. In Brazil, the primary phase of our capability enhancement program is underway. Our plan remains on track. We have moved through several of the key steps of the process. As such, the shift of Oil & Gas volumes from Germany will be completed by the end of 2023. We expect volume and margin upside from Brazil at the completion of this investment program. In Germany, our activity rundown is ahead of schedule, and our tubes production will stop in Q4 2023, as opposed to at the end of the year. The sales processes for Mülheim and Düsseldorf are both ongoing, and we continue to work with all key stakeholders to advance these sales processes. Now, let's discuss the commercial environment. On Slide 10, we focus on the US OCTG market, which is the largest market in our North American operations. The horizontal rig count, a proxy for our demand, fell by about 12% or 85 rigs in the Q2. We are optimistic that drilling activity will stabilize in the second half. Meanwhile, OCTG prices in the US have continued to moderate versus the high levels they attained in late 2022. We will begin experiencing the effect of these lower prices in the Q3. We also expect somewhat lower volumes as distributors destock their inventory. Looking at the chart on the right, you can see that the exceptionally high import volumes that were entering the US market in Q4 2022 and Q1 2023 have moderated substantially in May and June. July data is still preliminary, confirms that imports will remain below the abnormal level seen in Q4 2022 and Q1 2023. While we do expect market pricing to decrease from current levels, we are of the view that the pace of decline will slow and pricing will remain at healthy levels. On Slide 11, we can see that the international OCTG market has continued its positive trend in Q2 2023. Onshore and offshore drilling activity have continued to trend higher across the world, all indications are this will continue. We believe that globally speaking, capacity for premium OCTG is limited, and at Vallourec in particular, we have demand in excess of our capacity. As such, the market has continued to see price increases, and pricing between the US market and the international markets now relatively close to parity. It is worth noting that we experienced a more noticeable lag from our order intake to our shipments in addressing most of these international markets. Therefore, we will have a positive price tailwind in our results outside of the US for the next few quarters. Moving to Slide 12. Looking at our Tubes business as a whole, Q2 2023 furthered the significant upward trend in profitability that began last year. We earned €832 of EBITDA per ton sold, a substantial year-over-year improvement. This reflects the strong market environment and the success of the new pricing policies we implemented last year, and strong execution by our Eastern Hemisphere operations. Sequentially, our results in Brazil also improved to drive margins higher. Our bookings have continued to show a positive price trend outside of the US, and customer activity remains solid, as discussed previously. Our investment program is on track in Brazil, and we expect improvements in profitability in Brazil as this major capability enhancement program comes to an end. Meanwhile, our German operations, which are still in the process of winding down, have thus far exceeded our expectations this year. However, we expect that we will see larger financial losses in this operation in the second half of the year. Coming to our Mine & Forest slide on Slide 13. iron ore production was 1.9 million tons in the Q2, which reflected our return to higher production level. As you will recall, on May fifth, we obtained the necessary permissions from the State Mining and Environmental Authority for the full release of the Cachoeirinha waste pile. In the second half of the year, we expect production sold to be around 3.6 million tonnes. Our production cost will also likely remain at the high end of the recent range for the time being. Both are related to the specific area of the mine we are exploiting at present. As such, we expect EBITDA to decrease sequentially in Q2. We have a permitting process underway to allow us to move our extraction activities to already identified high-quality reserves. We are currently engaging with state and federal regulatory authorities to execute this plan. I will now hand the call over to Sascha to comment on our financial results. Thank you, Philippe, and good morning to everyone. Thank you for participating in our Q2 call. As you have seen from the pre-release, we have had a very strong quarter, better than expected, due to a few factors I will discuss momentarily. We also expect continuous strength in our results going forward, based upon both improvements that are under our own control, as well as positive sector dynamics. Starting with page 15, all KPIs show an improvement year-over-year, and we equally advanced compared to the Q1 of the year. Particularly noteworthy is that we have reduced net debt further to €868 million. As you know, generating cash flow is our key focus and an important proof point that our initiatives are paying off. What surprised us positively against our prior guidance of a similar Q2 relative to Q1, leading to the pre-release of earnings? We've had about EUR 15 million of additional EBITDA that you can think of as accounting-related, with no uplift to cash. This includes a positive balance sheet revaluation of the forest, as well as some of the German costs now recorded below EBITDA, as they are fully related to the closure and therefore no longer classified as operational. We had about EUR 15 million each, true performance upsides in our Eastern Hemisphere and German business. Eastern Hemisphere came in better than expected, due to, once again, positive developments related to our business in Saudi Arabia, but also good results in Asia. Germany outperformed our expectations due to better volumes and lower costs, including lower energy costs. Moving to our Tubes business on page 16. Volumes are lower year-over-year by 8%, or 37 kilotonnes. This year-over-year decline is driven unsurprisingly by lower volumes in our to-be-closed German operations, and also Asia, where we have applied our value over volume strategy. Germany is also the key driver for the sequential volume declines. As the average selling price per ton has further increased, both year-on-year and sequentially, revenues are up. We have also further enhanced tubes profitability, 26% EBITDA margin or EUR 832 per ton. H2 is expected to be lower than Q2, but to remain at healthy absolute levels. We also will have significant EBITDA tailwinds from our ongoing new valorization initiatives going forward. On page 18, mine production is up, the index price is down, leading to a 37% increase year-over-year in revenues. The average sales price per ton is lower, as the quality of the iron ore mined was worse in Q2 2023 compared to the prior year, leading to a lower realized price. What may seem surprising is that with increasing revenues, the EBITDA is basically flat. Here, I remind you that these are the segment results covering the mine, but also the forests. The latter principally impacts both revenues and EBITDA. While the forest did not impact the year-over-year revenues, it did impact EBITDA through a price valuation effect following IAS 41. In this respect, we actually had a positive effect in both quarters, however, higher in Q2 2022 relative to Q2 2023.... Adjusting for this forest revaluation effect, the pure mine EBITDA is up year-over-year in Q2. Please note that for the second half of this year, we do not assume such a positive revaluation effect. Over to page 19. Revenues and EBITDA are up, mainly due to better prices. We also continue to keep SG&A on a low level. The net income of EUR 159 million includes EUR 66 million other, of which the majority is related to asset disposals and predominantly restructuring expenses. Bigger items in this category include an expense for staff costs in Germany to be treated as non-operating, as well as EUR 10 million higher costs for the New Vallourec plan, driven by more German employees leaving with early retirement plans compared to severance payments. Moving to page 20. Overall, we reduced net debt by a further EUR 132 million. This was driven by EUR 232 million adjusted operating cash flow. Going forward, we expect the financial cash out in H2 to be similar compared to H1, for a total 2023 amount of around EUR 150 million. The tax payments are expected to be higher in 2023 compared to 2022, even though the EUR 61 million payments in Q2 are probably on the high side for a run rate in the next two quarters to come. An adjusted free cash flow of EUR 174 million, with hardly any change in working capital, which was also the key element explaining why our cash flow came in better than expected in Q2. Working capital will always show some fluctuations depending on the specific business developments. However, we are convinced that our many initiatives dedicated to improving our working capital are starting to pay off. In Q2, inventory and receivables improved, while payables slightly deteriorated. The operating working capital improvement was then largely compensated by an increase of non-operating working capital, among others, due to lower tax credits. Total cash generation was EUR 118 million, impacted by restructuring and non-recurring cash outs. For the full year, we expect around EUR 350 million, with a disproportionate amount to come in Q4, due to the closure of the operating business in Germany. Let me now hand back to Philippe. Thank you, Sascha. Let's look at slide 22 to discuss our outlook for the full year 2023. For the Q3, we expect to see lower volumes and prices in the US tubes market, which will be slightly offset by higher international pricing. In our Mine & Forest business, as previously discussed, we expect production sold to be somewhat less than the mine's normal 8.7 million tons per year canon, and production costs will be at the high end of the recent range. Turning to the full year, we reiterate our full year outlook for 2023 we provided earlier this month. We expect EBITDA to range between EUR 950 million to EUR 1.1 billion. In the Tubes business, this assumes US market pricing decreases moderately from current levels, and volumes in the US market bottom in the Q3 before increasing again in the Q4. In our Mine & Forest business, we expect mine production sold to be 3.6 million tonnes in the second half of the year, and assume the Platts 62% China index will be around $105 per tonne. We expect our total cash generation to be positive in the second half of 2023. Accordingly, we expect our net debt to decrease further from the current €868 million level. Both of these outlooks exclude any potential benefits of asset sales. We continue to expect that compared to 2021 baseline, the full EUR 230 million impact of the New Vallourec plan will be visible in our earnings run rate in Q2 2024. We remain focused on creating an organization that can generate positive free cash flow through cycle, reducing our net debt to zero by year-end 2025 at the latest. A few words to conclude on Slide 23. We delivered strong earnings and total cash generation in the Q2 due to favorable market conditions, our value over volume strategy, and strong execution. Our iron ore mine has returned to higher production levels, though we expect it will operate below its full potential in the second half of 2023. We have a plan in place and underway to move our activities to higher quality reserves. We are currently experiencing cross currents in our Tubes business as international prices and demand growth are more than offset by U.S., lower U.S. volumes and pricing, but we remain upbeat around the medium-term outlook for this business. The execution of our major Brazil CapEx program is underway, with a shift of Oil & Gas volumes from Germany to be completed by the end of 2023. As such, the New Vallourec plan remains on track, and we remain committed to cycle-proofing our business and balance sheet. Thank you for your attention. Sascha and I are now ready to take your questions. Thank you. If you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star 1 to ask the question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. We will take our first questions from Jean-Luc Romain from CIC Market Solutions. Your line now has been opened. Please go ahead. Good morning, and thank you for taking my question. It relates to the quality of the ore in the mine. You mentioned it, it has, it has been lower recently. Is it just due to the fact that you are exploiting another part of the mine and you will be back to normal concentration quality, maybe in 2024? Or is there a kind of weakening of the quality of the ore? Okay, thank you for your question. First, it is important to keep in mind that we are relatively small-scale mining operation versus some of our publicly traded peers. Thus, we can have more period-to-period volatility in our results based on the specific portions of our reserves that we are exploiting. Right now, we are planning to extract some reserves that require higher levels of processing, which means somehow less sellable product with higher affiliated costs. Our plan is to move over time to higher quality reserves, and the permitting to do so is currently underway. Thank you very much. Thank you. As a reminder, if you would like to ask a question, please signal by pressing star one on your telephone keypad. If you would like to withdraw your question, please press star two. We will take our next question from Jamie Franklin from Jefferies. Your line now has been opened. Please go ahead. Hi there. Thank you for taking my questions. Firstly, just on the Tubes volumes, can you just clarify whether you expect Q3 volumes as a whole to decline, or if that's just the US volumes? Secondly, you can give any kind of magnitude on that, and just the kind of mix of international and US volumes, and what we can perhaps expect for an exit rate at the end of this year. Thank you. U.S., yeah, volume decrease is in the U.S. In the U.S., as we said, we expect Q3 to bottom up and Q4 to be higher. You have seen on one of our charts the import level, which was high in Q4 last year, Q1 this year, and now back to more normal levels. As a consequence, inventory at our distributors are decreasing, and we have clear indication that now they are reaching normalized level, which is a good proxy for the volume we could expect in Q4. Keep in mind that obviously, the vast majority... U.S. is, is not obviously both 50% of our volume worldwide, so U.S. is, is, is less than one third of our total volume worldwide. Jamie, I think the, the, the second part of your question was related to, volume, i.e, tonnage for the full year. I would, I would guess around 1.6 million. Okay, that's great. Thank you. Just on pricing. Talking about international pricing, pricing continuing to show an improving trend, can you give us any indication of what your base case assumption is for, you know, the magnitude of how much that continues to increase, and you know, how, how long it continues to increase for? Thanks. Well, first, as we have indicated, we start to see international pricing at the level of US prices, which is rather good news, given the very healthy level of our US prices. What's important to keep in mind is the price at which we book and the price at which we invoice, as there is a time lag between order booking and invoicing on the international market. As a consequence, as we may start to see less increase quarter after quarter on our bookings, increase our prices on bookings, we will see the impact of the recent increase of our pricing on bookings on the invoicing that will take place in the next few quarters. The positive impact of what we have observed in the last few quarters on the market is to come in our profitability on the international market. Great. Thank you. I'll hand it over. Thank you. We will take our next questions from Kevin Roger from Kepler. Your line now has been opened. Please go ahead. Yes, good morning. I was wondering if you could help me to understand a bit more the guidance that you have for H2 in terms of EBITDA. When I make some math, if we just focus on the US and we assume some lower volume than the something like $500 per ton price decline, what you showed in the presentation. If I'm not mistaken, that should be something like a $75+ million EBITDA decline per quarter. You say that the German operation will generate some losses. Can you give us some color here? Because to be able, at the end, to reach your guidance, it means that this is at least a $75 million-$100 million per quarter decline in the profitability from the German assets. Just, if you can share with us some dynamics here by segments, if there is a mistake somewhere or if it means at the end that in your guidance you are embarking very, a very cautious stance in a way? The second question, if I may, the H2 guidance on the cash is to be positive, excluding disposal, we do not have any update on the disposal process in Germany. Anything to mention here, please? Okay. I will hand over to Sascha, to answer your question. You're right, the two main reasons why our EBITDA will be lower in Q3 and Q4 compared to H1, is the US volume and pricing, and the losses in Germany that will be mostly in H2. Now I hand over to Sascha. Thank you, Kevin. The additional comment I would add to Philippe's is that, as Philippe outlined during his speech, also for the Mine & Forest, we expect a sequentially lower EBITDA for the reasons outlined. That also contributes to the decline H2 versus H1. I suppose mathematically everyone is clear, i.e., you take our full year guidance and subtract close to EUR 700 million EBITDA in H1, and that gets you to H2. When it comes to the land sale, and we usually focus on Germany, even though there are many activities that are ongoing in the group. Think Philippe had it in his slides. Processes are ongoing. Since these are multi-stakeholder processes, where we really need to ensure that we create a structure that fits buyer, seller, but also the municipality. It is quite difficult to say when that will deliver ultimately a closed transaction. We are actively engaged with those stakeholders as we speak, for both plots. We need to see how that develops. Okay, thanks. If I just make one follow-up, you mentioned in the presentation, the carbon capture opportunities. Any color here to bring in terms of what are the level of discussion that you have potentially with clients, I guess especially in the US, and what will be the timing in terms of potential first material order for you? It's clear that since the Inflation Reduction Act is in place in the US, we have seen many, many projects on carbon capture, ramping up. We, we have already firm orders for carbon capture programs. We are obviously, as a consequence, having our first delivery very soon. This is a real market, real market that has materialized even faster than expected, thanks to the Inflation Reduction Act in the US. Okay, thanks. Thank you. As a final reminder, if you would like to ask a question, please press star one now. We will take our next questions from Baptiste Lebacq from Oddo. Your line now has been opened. Please go ahead. Yes, hi. Good morning, everybody. Two questions from my side. The first one is dedicated to the guidance, the second one to your comments regarding mining and high quality products, or higher quality products. Regarding your guidance, let's imagine that you are at the low end of the guidance, meaning EUR 950 million. For the full year, can we say that in order to reach the low end of the guidance, you should see an EBITDA per ton, close to EUR 360 million-EUR 380 million, just to know exactly what you factor in? The second point regarding the high quality mining product, does it imply some additional CapEx for this year or next year? Thank you. Okay. Yes, low end of the guidance. Well, first, we still think that the EUR 1 billion level is quite reasonable. Obviously, we give a range because that's what we have to do when we guide. We are obviously aiming to deliver higher numbers than the floor. Obviously, we are cautious in our guidance. It's clear that the EBITDA pattern will decrease in H2 compared to the peak we have reached in Q2, that's for sure. You have made your math. I think this number seems a bit low. Keep in mind that volume will decrease. We round down Germany. We have lower volume in H2 in the US, especially in Q3. This is a EBITDA pattern, is a ratio, and volume obviously, is very important in this, in this ratio. Your, your second question was about the CapEx for the mine. Well, first, we are, we are, as any mine, operated in the world, we are, we are in the permitting process in order to be able to access to already identified higher quality results. This permitting process, obviously is underway. Well, you remember that after the landslide, it took us a few months to get a partial, a partial, release of, of, of the operational of the mine, and it took one year, and only one year, I would like to insist, to get the full release of the Cachoeirinha pile. This just demonstrate our good relationship with the local authorities, and we obviously count on this relationship to have a process as speedy as possible for our permitting. Does this access to new reserve will require CapEx? Yes, for sure. Because we, we have to move some equipment from where they are currently on the mine to other locations. That's. Well, that's normal life when you operate a mine. Thank you. Yeah. Thank you. We will take our next question from Christopher Kuplent from Bank of America. Your line is open. Please go ahead. Thank you very much for taking my questions. Good morning. Two quick one. I think, one, again, on your, on your guidance for the full year. I take your point, EUR 1 billion seems well supported. Can you give us an indication of which sensitivities you have stressed in order to end up with this range? Which ones do you think carry the highest uncertainty from your vantage point here today, where you are least sure about where you, in the end, will end up, lower or higher end of, of that guidance? Maybe you can give us a little more color around your net debt guidance for the end of the year. I appreciate there are many moving parts, not least working capital, but whether that statement you've made is well supported, even at the lower end of your EBITDA guidance. Thank you. Yeah. Net debt, I would just reiterate what I said. Excluding any asset disposal, we intend to further reduce our net debt compared to its level end of June, and I won't tell you more about how, how much. As far as the sensitivity of the guidance, that's why we have indicated the assumptions under which we guide. The US market, obviously, is a material element in our numbers for Q2. We have assumptions both on volume and pricing, that we have shared through the presentation, but obviously, this is the main sensitivity in our H2 numbers. Thank you very much. Thank you. As a reminder, if you would like to ask question, please press star one on your telephone keypad. We will take the next question from Jean-Luc Romain from CIC Market Solutions. Your line is open. Please go ahead. Yes. My, my question relates to the sales of tubes for CCS operations. As CO2 is quite a corrosive material, does your the sale of those products imply higher quality or high-end products comparable to what you recently sold to Petrobras, or is it other standard quality? Hello. Okay, thank you for your question. Here you are mixing two topics, CCUS on one side and line pipe on the other. It's clear that we have indicated in our recent announcement on Búzios, that we are saying high-end line pipe because of the context. Maybe, Jacky, you want to explain the context of this market? On CCUS? CCUS. I will answer on CCUS. The Búzios contracts were transport of oil and gas from the Búzios Fields, which does require high-end line pipe because it's coupled with a CRA mechanically line pipe. Yeah. Well, the reason why it is, as far as CCUS is concerned, it's true that the first project, we, we see, and the one obviously we have, we have won, are with high quality grades, which have required very specific qualification. You know, as you said, rightly, CO2 is highly corrosive, and obviously, nobody wants to take any risk on the first project. The grades that are used are definitely on the very high end of the spectrum. Which is good for us, because as you know, that's our expertise. That's why I was asking the question. Thank you very much. Thank you. We will take our next questions from Daniel Thompson from BNP Paribas Exane. Your line is open. Please go ahead. Mr. Daniel, please go ahead, ask your question. It appears there are no further questions at this time. I'd like to turn the conference back to our host for any closing or additional remarks. Please go ahead, sir. Okay, if there is no more questions, a few words to close this call. Thank you again for joining us for today's call. I leave you with the following thoughts: We remain upbeat about our Tubes business and see stabilization in the US market ahead. Elsewhere, demand remains strong and exceeds our available capacity. We are well on our way to realizing the substantial benefits of the New Vallourec plan, which will be a meaningful earning tailwind in 2024. We are not stopping there. We are continuing to identify additional ways to improve our business beyond our major project in 2023. We look forward to seeing you at our upcoming Capital Market Date on September 12th, and providing you an update on all that we have done and are going to do to create the New Vallourec. Thank you again. Operator, you may close. This concludes today's call. Thank you for your participation. You may now disconnect.