Vallourec S.A. (OTCPK:VLOUF) Q2 2023 Earnings Conference Call July 28, 2023 3:30 AM ET
Company Participants
Connor Lynagh – Vice President, Investor Relations
Philippe Guillemot – Chairman and CEO
Sascha Bibert – Chief Financial Officer
Jacky Massaglia – Senior Vice President, Business Line Project Line Pipe and Process
Conference Call Participants
Jean-Luc Romain – CIC Market Solutions
Jamie Franklin – Jefferies
Kevin Roger – Kepler
Baptiste Lebacq – Oddo
Christopher Kuplent – Bank of America
Operator
Hello. And welcome to the Vallourec Q2 and H1 2023 Results Conference Call. Please note, this call is being recorded and 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. [Operator Instructions]
I will now hand you over to your host, Connor Lynagh, to begin today’s conference. Thank you.
Connor Lynagh
Good morning, ladies and gentlemen. Thank you for joining us for Vallourec second quarter 2023 results presentation. I’m Connor Lynagh, Vice President of Investor Relations at Vallourec. I’m joined today by Vallourec Chairman and Chief Executive Officer, Philippe Guillemot; and Vallourec 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 French financial market regulator, the AMF. This presentation will be followed by a Q&A session.
I will now turn the call over to Philippe Guillemot.
Philippe Guillemot
Thank you, Connor. Welcome, ladies and gentlemen, and thank you for joining us for this update on Vallourec’s second quarter 2023 results. Before proceeding, let me draw your attention to slide two, where you can consult our Safe Harbor statement.
Today’s agenda is on slide three. I will start by giving you an overview of the highlights of the second quarter, followed by an update on the execution of our New Vallourec plan and a word on market environment. Sascha will take — will then take you through our Q2 numbers and I will wrap up with the outlook for full year 2023.
First, let’s look at the highlights of the second quarter on slide five. On the second quarter of 2023, EBITDA was €374 million, which reflects the €214 million year-over-year increase. Our Tubes EBITDA contribution was €330 million, a strong increase of €201 million year-over-year. This was supported by a 27% average selling price increase compared to Q2 2022. Mine and Forest EBITDA was €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 €174 million. In the second quarter, we reduced net debt by €132 million, leaving us with net debt of €868 million at the end of June. This is more than €0.5 billion 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 €950 million and €1.1 billion.
Moving to our commercial and operational update. The International Tubes market remains strong. Drilling activity outside of the U.S. has remained on the rise and we have continued to capitalize on this demand environment and capacity constraints at major suppliers in the form of higher prices.
The U.S. market has continued to normalize from the very strong levels at which it began the year, but the headwinds that have driven this change are abating. We’re seeing the supply-demand balance is improving and we expect pricing to normalize at healthy levels. Meanwhile, our Mine returned to higher production levels at the end of the second quarter 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 transport 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 in Saudi Arabia to expand the Group’s activities in the Kingdom. This includes innovation 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 Buzios field. The three orders represent a total of 48,000 tonnes of high-end line pipe.
Let’s turn to slide seven 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 deadline, we plan to drive a €230 million EBITDA improvement and a €20 million CapEx reduction with a full impact starting in Q2 2020. For reference, our target 2024 industrial footprint is shown at the left.
Slide eight provides some color on a few of the near-term programs we are executing is 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 and 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 advance sale of Mülheim and
Duesseldorf Rath 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 U.S. 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 second quarter. We are optimistic that drilling activity will stabilize in the second half.
Meanwhile, OCTG prices in the U.S. have continued to moderate versus the high level we have assigned in late 2022. We will begin experiencing the effect of this lower prices in the third quarter and we also expect somehow — somewhat lower volumes as distributors destock their inventory.
However, looking at the chart on the right, you can see that the exceptionally high import volumes that we are entering the U.S. market in Q4 2023 — 2022 and Q1 2023 has moderated substantially in May and June. July data is still preliminary, but confirmed that imports will remain below the abnormal level seen in Q4 2022 and Q1 2023. Therefore, 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 has continued to trend higher across the world and all indications are this will continue.
We believe that globally speaking, capacity for premium OCTG is limited and at Vallourec particular, we have demand in excess of our capacity. As such, the market has continued to see price increases and pricing between the U.S. market and internal 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 U.S. for the next few quarters.
Moving to slide 12. Looking at our Tubes business as a whole, Q2 2023, further the significant upward trend in profitability that began last year. We earned €832 of EBITDA per tonne 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 U.S. and customer activity remained solid as discussed previously. Our investment program is on track in Brazil and we expect improvements in profitability in Brazil as this major capacity 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.
Turning to our Mine and Forest slide on slide 13. Iron ore production was 1.9 million tonnes in the second quarter, which reflected our return to higher position level. As you will recall, on May 5th, we obtained the necessary permissions from the state mining and environmental authorities 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 costs 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.
Sascha Bibert
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 showed an improvement year-over-year and we equally advanced compared to the first quarter 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.
So what surprised us positively against our prior guidance of a similar Q2 relative to Q1, leading to the pre-release of earnings. We have had about €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 then had about €15 million each true performance upsized 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 kilotons. This year-over-year decline is driven unsurprisingly by lower volumes in our Tube 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 tonne has further increased both year-on-year and sequentially, revenues are up.
We have also further enhanced Tubes profitability, 26% EBITDA margin were €832 per tonne. 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 Vallourec initiatives going forward.
On page 18, Mine production is up, the index prices down, leading to a 37% increase year-over-year in revenues. The average sales price per tonne is lower as the quality of the iron ore Mine 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 Forest. 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 IRS 41. In this respect, we actually had a positive effect in both quarters, however, higher in Q2 2022 relative to Q2 203. 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 €159 million includes €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 €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 €132 million. This was driven by €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 €150 million.
The tax payments are expected to be higher in 2023 compared to 2022, even though the €60 million — €61 6061 million payments in Q2 are probably on the high side for a run rate in the next two quarters to come.
In adjusted free cash flow of €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 €118 million, impacted by restructuring and non-recurring cash collars. For the full year, we expect around €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.
Philippe Guillemot
Thank you, Sascha. Let’s look at slide 22 to discuss our outlook for the full year 2023. For the third quarter, we expect to see lower volumes and prices in the U.S. Tubes market, which will be slightly offset by higher international pricing.
In our Mine and Forest business, as previously discussed, we expect production sold to be somewhat less than the Mine’s normal 8.7 million tonnes per year [inaudible] 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 €950 million to €1.1 billion. In the Tubes business, this assumes U.S. market pricing decreases moderately from current levels and volumes in the U.S. market bottomed in the third quarter before increasing again in the fourth quarter.
In our Mine and Forest business, we expect Mine production sold to be 3.6 million tonnes in the second half of the year and assume that 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 deadline, the full €230 million effect 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 and 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 second quarter due to favorable market conditions, our value-over-volume strategy and strong execution.
Our iron ore Mine has returned to higher operation 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 will remain a bit around the medium-term outlook for this business.
The execution of our major Brazil CapEx program is underway with the shift of oil and gas production 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.
Question-and-Answer Session
Operator
Thank you. [Operator Instructions] We will take our first question from Jean-Luc Romain from CIC Market Solutions. Your line now has been open. Please go ahead.
Jean-Luc Romain
Hi. Good morning and thank you for taking my question. It relates to the quality of the ore in the Mine, you mentioned it has been lower recently. Is it due to the fact that you are exploiting another part of a 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?
Philippe Guillemot
Okay. Thank you for your question. Well, 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 peer-to-peer 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 products with higher affiliated cost. Our plan is to move over time to higher quality reserves and the permitting to do so is currently underway.
Jean-Luc Romain
Thank you very much.
Operator
Thank you. [Operator Instructions] We will take our next question from Jamie Franklin from Jefferies. Your line now has been open. Please go ahead.
Jamie Franklin
Hi, there. Thank you for taking my questions. Firstly, just on the Tubes volumes. Can you just clarify whether you expect 3Q volumes as a whole to decline or if that’s just the U.S. volumes? And then, secondly, if you can give any kind of magnitude on that and just the kind of mix of international and U.S. volumes, and what we can perhaps expect for an exit rate at the end of this year? Thank you.
Philippe Guillemot
U.S., yeah, volume decrease is in the U.S., in the U.S. But as we said, we expect Q3 to bottom up and Q4 to be higher. You have seen on one of our chart, 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 have U.S. is not obviously more than 50% of our volume worldwide. So U.S. is less than one-third of our total volume worldwide.
Sascha Bibert
Jamie, I think, the second part of your question was related to volume, i.e., tonnage for the full year. I would guess around 1.6 million tonne.
Jamie Franklin
Okay. That’s great. Thank you. And then just on pricing, so you’re talking about international pricing continuing to show an improving trend. Can you give us any indication of what your base case assumption is for the magnitude of how much that continues to increase and how long it continues to increase for? Thank you.
Philippe Guillemot
Well, first, as we have indicated, we start to see international pricing at the level of U.S. prices, which is rather good news given the very healthy level of our U.S. prices. And what’s important to keep in mind is the price at which we book and the price at which we invoice and 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 this quarter-after-quarter on our bookings and increase our prices and 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. So the positive impact of what we have observed in the last few quarters in [inaudible] is to come in our profitability on the international market.
Jamie Franklin
Great. Thank you. I will hand over.
Operator
Thank you. We will take our next question from Kevin Roger from Kepler. Your line now has been open. Please go ahead.
Kevin Roger
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, because when I make some math, if we just focus on the U.S. and we assume some lower volume than something like €500 per tonne price decline, what you showed in the presentation. If I’m not mistaken, that should be something like a €75-plus 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 €75 million, €100 million per quarter decline in the profitability from the German assets. So just if you can share with us some dynamics here by segment, 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. And the second question, if I may, so the H2 guidance on the cash is to be positive, excluding disposal, but we do not have any update on the disposal process in Germany. So anything to mention here, please?
Philippe Guillemot
Okay. I will hand over to Sascha to answer your question. But you’re right. The two main reasons why our EBITDA will be lower in Q3 and Q4 compared to H1 is the U.S. volume and pricing, and the losses in Germany that will be mostly in H2. But now I hand over to Sascha.
Sascha Bibert
Okay. Thank you, Kevin. The additional comment I would add to Philippe is that, as Philippe outlined during his speech, also for the Mine and Forest, we expect a sequentially lower EBITDA for the reasons outlined, so that also contributes to the decline H2 versus H1. I suppose, mathematically, everyone is clear, i.e., we take our full year guidance and subtracts close to €700 million EBITDA in H1 and that gets you to H2.
When it comes to the land sale that we usually focus on Germany, even though many activities that are ongoing in the Group, as Philippe had already mentioned in his slides, process are ongoing. Since this is — these are multi stakeholder processes where we really need to ensure that we create a structure that fits via seller, but also the municipality. It is quite difficult to say when that will deliver ultimately a close transaction, but we are actively engaged with those stakeholders as we speak for both plots and we need to see how that develops.
Kevin Roger
Okay. Thanks. And 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 decision that you have potentially with clients, I guess, especially in the U.S. and what will be the timing in terms of potential first material order for you?
Philippe Guillemot
It’s clear that in the Inflation Reduction Act in place in the U.S., we have seen many, many projects on carbon capture, yeah, ramping up. We have already firm orders for carbon capture programs and we are, obviously, as a consequence, having our first delivery very soon. So this is a real market that has materialized even faster than expected. Thanks to the Inflation Reduction Act in the U.S.
Kevin Roger
Okay. Thanks.
Operator
Thank you. [Operator Instructions] We will take our next question from Baptiste Lebacq from Oddo. Your line now has been open. Please go ahead.
Baptiste Lebacq
Yes. Hi. Good morning, everybody. Two questions from my side. The first one is dedicated to the guidance and the second one to your comments regarding mining and high quality products — higher quality products. Regarding your guidance, let’s imagine that you are at the low end of the guidance, meaning €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 tonne close to €360 million, €380 million, just to know exactly what you factor in? And the second point regarding the high-quality mining products, does that imply some additional CapEx for this year and next year? Thank you.
Sascha Bibert
Okay. Yes. Low end of the guidance. Well, first, we still think that the €1 billion level is quite reasonable. So, obviously, we give a round figures, that’s what we have to do when we guide, but we are obviously aiming to deliver higher numbers than the floor.
Obviously, we are cautious in our guidance. It’s clear that the EBITDA per tonne 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.
Baptiste Lebacq
Okay.
Sascha Bibert
Keep in mind that volume we decreased — we run down Germany. We have lower volume in H2 in the U.S., especially in Q3. So this is EBITDA percent ratio and volume, obviously, is very important in this ratio.
Your second question, what about the CapEx for the Mine. But first, we are — as any Mine operated in the world. We are in the permitting process in order to be able to access the already identified higher quality reserves. This permitting process, obviously, is underway.
You remember that after the launch slide, it took us a few months to get a partial release of the operation of the Mine and it took one year and only one year, I would like to get the full release of the Cachoeirinha. So this just demonstrates our relationship with the local authorities and we obviously count on this relationship to have a process as speedy as possible for our permitting.
Do — does this access to new reserve will require CapEx? Yes, for sure. Because we have to move some equipment from where they are currently under Mine to other locations. But that’s normal life when you operate the Mine.
Baptiste Lebacq
Okay. Thank you.
Philippe Guillemot
Yeah.
Operator
Thank you. We will take our next question from Christopher Kuplent from Bank of America. Your line is open. Please go ahead.
Christopher Kuplent
Thank you very much for taking my question. Good morning. Two quick ones. I think, one, again, on your guidance for the full year. I take your point, €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 advantage point here today where you are least sure about where you in the end will end up a lower or higher end of that guidance? And 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.
Philippe Guillemot
Yeah. Net debt, I would just reiterate what I said. Excluding any asset disposal, we intend to further reduce our net debt compared to this level end of June. And I won’t tell you more about how much.
As far as the sensitivity of the guidance, that’s why we have indicated the assumptions under which we guide. The U.S. 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.
Christopher Kuplent
Thank you very much.
Operator
Thank you. [Operator Instructions] We will take the next question from Jean-Luc Romain from CIC Market Solutions. Your line is open. Please go ahead.
Jean-Luc Romain
Yes. My question relates to the sales of Tubes for CCUS operations as the CO2 is quite a close material. Does it imply — does — the sale of those products imply higher quality or high end products comparable to what you recently sold to Petrobras or is it have a standard quality?
Philippe Guillemot
Okay. Thank you for your question. Here, you are missing two topics, CCUS on one side and line pipe on the other. So it’s clear that we have indicated in our recent announcement on Buzios that we are saying high end line pipe because of the context. Maybe, Jacky, do you want to explain the context of this market.
Jacky Massaglia
Compared to U.S.
Philippe Guillemot
State of U.S — we answered to State of U.S.
Jacky Massaglia
The Buzios contracts were transport of oil and gas from the Buzios fields, which does require high end line pipe because it’s coupled with CRA mechanically line pipe.
Philippe Guillemot
yeah. Was the reason why it is — as far as the U.S. is concerned, it’s true that the first project we see and the one, obviously, we have won are with high quality grades, which have required very specific qualification.
As you know — as you said rightly, CO2 is highly corrosive, and obviously, nobody wants to take any risk on the first project. So 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.
Jean-Luc Romain
That’s why I was asking the question. Thank you very much.
Operator
Thank you. We will take our next question from Daniel Thomson from BNP Paribas Exane. Your line is open. Please go ahead. Mr. Daniel, please go ahead, ask your questions. As 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.
Philippe Guillemot
Okay. So if there is no more questions, a few words to close this call. Thank you again for joining us for today’s call. I’ll leave you with the following thoughts. We remain upbeat about our Tube business and see stabilization in the U.S. 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 earnings tailwind in 2024. But we are not stopping there. We are continuing to identify additional ways to improve our business beyond our major projects in 2023.
We look forward to seeing you at our upcoming Capital Markets Day 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.
Operator
This concludes today’s call. Thank you for your participation. You may now disconnect.
Read the full article here
