Tenaris S.A.

Good day and thank you for standing by. Welcome to Q4 and full year 2024 Tenatis Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Giovanni Sardagna, Investor Relations Officer. Please go ahead.

Thank you, Gigi, and welcome to Tenaris' 2024 Fourth Quarter and Annual Results Conference Call. Before we start, I would like to remind you that we will be discussing forward-looking information in the call and that our actual results may vary from those expressed or implied during this call. With me on the call today are Paolo Rocca, our Chairman and CEO, Alicia Mondolo, our Chief Financial Officer, Gabriele Podkucka, our Chief Operating Officer, and Luca Zanotti, President of our U.S. Operations. Before passing over the call to Paolo for his opening remarks, I would like to briefly comment on quarterly results. During the fourth quarter of 2024, sales reached $2.8 billion, down 17% compared with those of the corresponding quarter of the previous year, and 2% sequentially, mainly driven by lower volumes and lower average selling prices, as price declines in North America were partially offset by a favorable product mix. Our EBDA for the quarter was up 6% sequentially to $726 million, and our EBDA margin increased to 25.5, mainly reflecting the partial reversal of a provision for ongoing litigation relating to the acquisition of a participation in Usiminas. Without taking into account this one-off effect, our EBDA declined 4% sequentially to $659 million, with a margin of 23%. Average selling prices in our tubes operating segment decreased by 7% compared to the corresponding quarter of the previous year, and 1% sequentially. During the quarter, cash flow from operation was $492 million. Our net cash position at the end of the quarter decreased to $3.6 billion following the payment of an interim dividend of $299 million in November of last year, 454 million spent on share buybacks and capital expenditures of 182 million during the quarter. The Board of Directors has decided to propose for approval of the Annual General Shareholders Meeting to be held at the beginning of May, the payment of an annual dividend of 83 cents per share or 166 cents per ADR, which includes the interim dividend of 27 cents per share or 54 cents per ADR that we paid at the end of November last year. If approved, a dividend of 56 cents per share or 112 cents per ADR will be paid on May 21st. Now, I will ask Paolo to say a few words before we open the call to questions.

Thank you, Giovanni, and good morning to all of you. 2024 was a good year for Tenaris in many aspects. we consolidated our leading industry position with a number of major achievements. We delivered a solid financial result, accompanied by higher returns for shareholders, and completed a number of investments which are improving our industrial efficiency and reducing our environmental footprint. It was, however, married by an accident that took place at the end of the year which claimed the lives of two of our employees. The accident occur in the heavy equipment maintenance shop of our main plant in Argentina. This is a major setback for Zeneris, which has an absolute commitment to safety with its employees and its communities. We deeply regret the loss of life and are reinforcing all our action on preventive activities with a focus on critical risk. We ended 2024 with an EBITDA of 3.1 billion and net income of $2.1 billion, on net sales of $12.5 billion. Frequency flow amounted to $2.2 billion, all of which was distributed to shareholders through dividends and share buybacks. We are proposing to increase the annual dividend per share by 38% over that for the previous year. At the same time, we maintain our net cash position of $3.6 billion. In North America, consolidation among major shale operators has continued, and we have strengthened our service differentiation with these operators, comprise the operational efficiency, the reliability, and the quality that we provide through our rig direct service. We have extended our range of wedge series 400 connection, and now provide 24-7 digital well integrity solutions supported by technical specialists and remote monitoring capabilities, in addition to our more established run-ready service. ExxonMobil has honored us with their 2024 Supplier of the Year Award for our extensive effort in supply chain integration worldwide. We have served their operation in various parts of the world over many years, and since 2024, We have been serving all their U.S. shale operation as well as their offshore operation in Bojana under long-term agreement. We were recently awarded the casing supply for the first wells in shale Sparta 20K project in the U.S. deepwater following many months of extensive work on product development and testing and the development of 3D mapping technology that enhance pipe collapse resistance using ultra-high collapse steel grades. This complement an award to supply BP's Kaskida 20K project and consolidate our leading position in the latest frontier in deepwater development. We also consolidated our leading position in the Gujana-Suriname deepwater basin with an award to supply line path and insulation coating for total Grand Morgue development. This achievement was possible thanks to our successful integration of Showcore and its pipe coating technologies and project management capabilities. For other deep water development, we are delivering a line pipe and coating for Equinor Raya project in Brazil and have recently completed deliveries for an offshore pipeline for TPAO Sacaria project in the Black Sea. In the Middle East, our contribution to the development of low-focal industrial capability are being recognized. In Saudi Arabia, we recently won a tender for a major CCS pipeline after Aramco had distinguished our GPC facility with a special quality award. In Abu Dhabi, we extended our long-term agreement with ADNOC while our premium threading facility was certified as an industry 4.0 digital leader by the Minister of Industry and Advanced Technology. In Mexico, our sales have been affected by a steep decline in drilling activity amidst the financial difficulties of Pemex. We have, however, taken the opportunity to reduce our credit exposure. In Argentina, Drilling activity on oil and gas production in Vaca Muerta is ramping up as pipeline and energy infrastructure investment moves forward. Over the next month, we will be supplying the oil pipeline that will connect Vaca Muerta to a new deep water port in Puerto Rosales in Chubut and expect further pipeline investment during the year. During the year, we completed a series of investments in our industrial system aimed at improving the efficiency of our operation as well as contributing to our decarbonization and environmental objectives. These include the installation of a new electric car furnace with modern continuous charging technology in Argentina, the modernization of our Coppel steelmaking facility in the United States, increasing its effective capacity and the installation of new heat treatment furnace and finishing line at our Dalmine mill in Italy. At the same time, we are advancing with our second wind farm in Argentina and other investment aimed at increasing the share of renewable energy used in our operation. We have also been investing to increase the level of automation and digital system in our industrial and supply chain system, and extend pipe-by-pipe traceability. As we will show in our annual report that will be published on April 1, April 1, we continue to make progress towards our target to reduce the carbon emission of our operation. As the perimeter of our operation has expanded with recent acquisition, we have decided to reset the baseline for our target to cover this expanded perimeter, as well as to include inter-meal transportation and other changes aimed at improving reporting transparency. Looking ahead with the change in the administration in the United States, we are heading into uncharted territories when it comes to geopolitics and the global trading system. Changes in tariff Another event could significantly alter the established market environment. Tenaris, with its unique positioning, both globally and in North America, the competitive differentiation in financial strength is well placed to navigate the uncertainties ahead. Before closing, I would like to thank Alicia Mondolo, head of her well-earned retirement, for her contribution to Tenaris. and the Techint group over more than 40 years. I'm very pleased that we will still be able to benefit from her wise advice in the time ahead. I would also like to thank all of our employees for their constant commitment and engagement, without which the results and achievement of the past year would not have been possible. As well as also our customer, our supplier, and all the community in which we operate for their ongoing support. I'm open now for any question you may have.