OCTG January 27, 2021

ENERGY AND SHIPPING INDUSTRY REPORT

Recovery Underway: Reiterate Buy on TS

Igor Levi, CFA
WHAT YOU SHOULD KNOW: OCTG demand has troughed and is gradually recovering (212) 738-6036 [email protected]
in the Western Hemisphere, while US inventories are at the lowest levels seen in the
Gregory Lewis, CFA
past decade. While prices have also troughed in mid-2020 and are slowly recovering, (212) 588-6543 [email protected]
raw material costs have sky-rocketed, bringing US OCTG spot margins to negative for
some products. This is not all bad news, as we expect this to drive OCTG prices higher Jacob Green
(212) 527-3558 [email protected]
before raw material prices subside as steel production picks up. This should allow
OCTG margins to recover to sustainable levels. We recommend playing the recovery
through TS (Buy, $20 PT), as earnings have bottomed, FCF has remained strong, and
TS is exposed to the recovery in the US, Mexico, Argentina, as well as a ramp-up of its
contract in UAE. TS’ balance sheet boasts $900M in net cash, an enviable position in the
oil patch, allowing it to further reinforce its dominant OCTG position by streamlining its
operations (think Canada consolidation), make opportunistic expansions (think JV in
China), and continue to take market share from beat down competitors. Trading at just
below tangible book, we reiterate our Buy rating at $20 PT. Meanwhile, we are more
cautious on VK (Neutral), which on one hand should benefit from tailwinds in Brazil,
but on the other hand faces headwinds in the Eastern Hemisphere where high-priced
contracts for alloys in 2020 are not likely to repeat; we also see uncertainty for equity
holders as VK plans to convert over half its Eur3.5B of debt into equity.
■ Demand recovering in the Western Hemisphere. While the rig count remains
closer to recent lows than 2019 highs, we are seeing a clear recovery off the bottom
across the Western Hemisphere, from the US, to Mexico, to Argentina. We expect
the demand recovery in 2021 to be very gradual. We expect OCTG demand to
continue to benefit from the trend towards longer laterals and thicker pipes.
■ Inventories at record lows. The silver lining behind all this is the clearing up of
inventories. US OCTG inventories have dipped below 2M tons, the lowest in over a
decade. Only 60% of that inventory is under a year old (vs. 80% a year ago), leaving
1/3 of inventory as stalled (1-3 years old) and about 7% as obsolete. Adjusting for
obsolete and a portion of stalled inventories as never coming back, we calculate
that inventories represent 6-7 mo. of demand, approaching healthy levels.
■ Prices near 2016 lows, raw material at 2018 highs. OCTG prices have troughed
25-30% below 2018 highs and 10-15% below pre-COVID levels. Meanwhile, a drop
in steel production brought raw material costs to 2018 highs, with hot-rolled coil
and scrap up 80% and 40% respectively in the past 6 mo. This brought spot OCTG
margins to unsustainable levels, as we estimate spot cash margins for welded
products to be negative, while seamless margins are close to breakeven. However,
we expect the spike in raw material costs to help fuel the OCTG price recovery, while
we expect record steel prices to subside in 2021 as production recovers.
■ Imports are a wild card. During the pandemic, imports have fallen to record
lows, dropping to just 30% of demand (vs. ~40% average in 2019). We believe
the future of imports is a wild card, as the US's protectionist policies of the prior
administration could shift, potentially removing the quotas and tariffs put in place
in 2018.
■ Energy transition: Both TS and VK have announced intentions to play their part in
the energy transition. Hydrogen, geothermal, and carbon capture were named by
both companies last quarter, as key growth markets. We believe tube technology
and premium connections able to withstand torque and pressure in a 10,000 ft well
could be applied to extreme pressures present in handling H2 and CO2.

PLEASE READ: IMPORTANT DISCLOSURES AND ANALYST’S CERTIFICATION APPEAR IN APPENDIX WWW.BTIG.COM
ENERGY AND SHIPPING INDUSTRY REPORT

Exhibit 1: Rig counts remain below year ago levels across all regions, still down over 50% in US and Africa regions.

Rig count change since Dec 2019

0%

-10%

-20%

-30%

-40%

-50%

-60%

-70%
US Africa Middle Argentina Brazil Europe Asia Mexico
East Pacific
Source: Baker Hughes, BTIG

Exhibit 2: However, the recovery is underway in the Western Hemisphere after bottoming this summer.

Rig count change since July 2020

160%
50%

40%

30%

20%

10%

0%

-10%

-20%

-30%
Argentina US Brazil Mexico Europe Africa Asia Middle
Pacific East
Source: Baker Hughes, BTIG

BTIG, LLC Igor Levi, CFA (212) 738-6036 www.btig.com

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ENERGY AND SHIPPING INDUSTRY REPORT

Exhibit 3: US OCTG inventories have hit a 10-year low. A constructive setup into 2021.

Total US OCTG inventory ('000 tons)

4,000

3,500

3,000

2,500

2,000

1,500

1,000
10 11 12 13 14 15 16 17 18 19 20
Source: OCTG Situation Report, BTIG

Exhibit 4: Strong discipline among producers and importers, coupled with production slowdowns related to COVID
19 has prevented the market from being oversupplied for a prolonged period of time as seen in 2015-2016.

US OCTG Inventory Months Demand

12

10

0
13 14 15 16 17 18 19 20
Source: OCTG Situation Report, BTIG; note: this figure is adjusted for obsolete inventories that we believe will never be used

BTIG, LLC Igor Levi, CFA (212) 738-6036 www.btig.com

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 Exhibit 5 & 6: OCTG prices have stabilized near prior cycle 2016 lows, but raw material costs are at 2018 highs.
ENERGY AND SHIPPING INDUSTRY REPORT

OCTG Price/short ton Raw material costs/short ton

1200
2400
1000
2200
2000 800
1800
600
1600
1400 400
1200
1000 200
800 0
600

Jan-20
Jul-16

Jul-17

Jul-18

Jul-19
Jul-15
Jul-12

Jul-14
Jul-10

Jul-11

Jul-13
Jan-10

Jan-14

Jul-20
Jan-18
Jan-12

Jan-13

Jan-15

Jan-16

Jan-17

Jan-19
Jan-11
Jan-20
Jul-10

Jul-11

Jul-12

Jul-13

Jul-14

Jul-15

Jul-16

Jul-17

Jul-18

Jul-19
Jan-15

Jan-17
Jan-13

Jul-20
Jan-11

Jan-12

Jan-14

Jan-16

Jan-18

Jan-19
Jan-10

Seamless Welded Scrap HRC

Source: OCTG Situation Report, Bloomberg, BTIG Research Source: OCTG Situation Report, BTIG Research

Exhibit 7: As a result, the margin between OCTG prices and raw material costs as at a low. When adjusting for labor
and energy costs, welded OCTG cash margins are negative, while seamless are near breakeven levels.

OCTG Price-Raw Material

2000
1800
1600
1400
1200
1000
800
600
400
200
0
Jan-20
Jul-11

Jul-12

Jul-13
Jul-10

Jul-17

Jul-18
Jul-16
Jul-14

Jul-15

Jul-19
Jan-17

Jan-18
Jan-16

Jan-19
Jan-15

Jul-20
Jan-11

Jan-12

Jan-13
Jan-10

Jan-14

Seamless Welded
Source: OCTG Situation Report, Bloomberg, Report, BTIG

BTIG, LLC Igor Levi, CFA (212) 738-6036 www.btig.com

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 Exhibit 8: US OCTG imports have recently dipped below the 2016 lows, but picked up in December.
ENERGY AND SHIPPING INDUSTRY REPORT

US OCTG Imports ('000 tons/month)

600

500

400

300

200

100

0
Oct-16

Oct-17

Oct-18

Oct-19

Oct-20
Jul-16

Jul-17

Jul-18

Jul-19

Jul-20
Jan-16

Jan-17

Jan-18

Jan-19

Jan-20
Apr-16

Apr-17

Apr-18

Apr-19

Apr-20
Source: DoC, OCTG Situation Report, BTIG

Exhibit 9: Imports also recently experienced a new low as a percentage of demand. Future US policy around import
tariffs and quotas will play a role in this going forward.

Imports as % of US Apparent Demand (smoothed)

80%

70%

60%

50%

40%

30%

20%
Apr-16

Apr-17

Apr-18

Apr-19

Apr-20
Jan-16

Jul-16

Jan-17

Jul-17

Jan-18

Jul-18

Jan-19

Jul-19

Jan-20

Jul-20
Oct-16

Oct-17

Oct-18

Oct-19

Oct-20

Source: DoC, OCTG Situation Report, BTIG

BTIG, LLC Igor Levi, CFA (212) 738-6036 www.btig.com

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 OFS Comp Sheet
ENERGY AND SHIPPING INDUSTRY REPORT

local curr $MM $MM

Recent Market Ent EV/EBITDA Price/Earnings P/Book P/TB FCF yield Dividend ROE Net debt/EV Net debt/ LTM EBITDA Net debt/ Capital
Companies Price Cap Value NTM 2020 2021E 2022E NTM 2020 2021 2022 Last Q Last Q LTM Yield 5yr Avg 2014 2018 2020 Current Current 2021E 2022E Current

Service Majors "Big 3"

SLB 22.5 31,334 45,214 10.0 10.7 10.0 8.8 23.3 35.0 23.5 16.0 2.5 NM 5.8% 2.2% -18.9 17.3 6.1 -4.0 31% 3.3 2.8 2.1 47%
HAL 18.0 15,917 24,199 9.4 9.8 9.5 8.0 21.0 29.0 21.2 14.4 3.2 7.3 7.3% 1.0% -18.3 22.4 17.0 7.2 34% 3.4 2.7 2.0 9%
BKR 21.0 21,777 25,278 9.8 11.3 9.9 8.3 30.0 75.9 30.4 19.8 1.2 2.8 2.6% 3.4% NM NM 2.1 -29.2 14% 1.6 1.2 0.9 14%

Other Global Services and Equipment

Hybrid/Onshore weighted
NOV 12.8 4,962 6,106 24.6 15.3 19.4 10.7 NM NM NM 119.6 0.9 1.4 19.8% NM -15.7 11.6 -0.3 -12.7 18% 1.8 0.6 0.3 10%
FLS 36.6 4,768 5,755 12.1 11.9 12.2 11.2 22.0 20.7 22.4 19.1 2.8 16.0 4.5% 2.2% 9.0 25.8 12.5 12.6 17% 1.8 1.6 1.3 28%
WEIR LN 1863.5 6,634 8,091 15.7 15.7 14.3 13.5 33.6 26.7 23.2 20.6 3.0 NM 6.4% NM -3.8 18.1 12.2 10.6 0.2 2.9 1.8 1.4 35%
KEX 51.0 3,060 4,722 13.0 12.6 11.8 9.9 36.3 29.9 28.3 20.4 1.0 1.3 9.4% NM 6.8 13.0 5.0 3.2 35% 4.3 2.6 1.6 34%
CHX 15.8 3,153 4,104 10.5 12.4 9.9 8.5 58.7 NM 44.3 24.0 2.0 7.3 8.9% NM NM NM 10.2 0.3 23% 4.9 1.5 0.7 59%
OIS 6.0 367 515 18.4 21.4 14.4 7.1 NM NM NM NM 0.5 0.8 36.4% NM -5.5 14.0 -0.1 -7.5 29% 17.3 1.8 0.7 10%
CLB 35.7 1,590 1,912 24.5 24.4 23.0 18.3 47.9 49.1 43.7 30.1 23.5 NM 4.9% 0.1% NM 183.8 63.4 24.4 17% 3.1 NM -0.1 56%
FI 2.9 663 487 33.4 88.5 22.6 17.8 NM NM NM 29.9 1.0 1.1 1.2% NM -10.3 16.1 -10.6 -13.7 -36% -10.1 NM NM -21%
GTLS 129.8 4,679 5,302 21.5 24.5 20.9 17.8 41.1 56.9 38.8 29.9 3.6 NM 3.4% NM -0.7 10.4 6.6 6.2 12% 2.7 0.7 -0.1 30%
NESR 10.0 879 1,229 5.1 5.7 4.8 4.0 13.0 16.6 11.0 7.0 0.9 4.1 4.2% NM NM NM 9.3 6.2 28% 1.9 0.9 0.4 32%
Offshore weighted
FTI 11.4 5,101 5,813 4.6 4.7 4.8 4.5 15.2 88.0 17.3 14.2 1.2 7.3 6.4% 1.1% -6.2 25.7 3.8 -9.9 11% 0.6 -0.6 -0.7 5%
OII 9.5 940 1,568 9.1 8.2 9.0 8.5 NM NM NM NM 1.7 1.8 1.4% NM -3.1 22.2 -5.4 -7.6 40% 1.1 2.1 1.7 30%
AKSO 14.7 837 1,604 9.1 9.5 8.7 7.1 NM NM NM 21.0 0.7 8.7 19.5% NM 3.7 19.7 7.2 -4.5 47% 3.3 -0.3 0.1 41%
DRQ 31.2 1,095 743 21.5 22.4 19.9 14.6 NM NM NM 155.2 1.1 1.1 -0.8% NM 1.3 15.8 -2.4 0.1 -47% -11.5 -12.0 -9.3 -32%
HLX 4.4 662 929 6.9 5.3 6.8 6.2 NM NM NM NM 0.4 0.4 3.6% NM -4.9 12.7 NM -0.3 28% 1.2 -0.1 -0.7 11%
OCTG
TS 6.4 9,110 8,640 12.6 13.2 12.1 9.2 102.9 NM 77.9 30.9 0.8 0.9 15.5% 0.9% 3.7 11.5 7.1 -3.0 -8% -0.9 -1.8 -1.4 -5%
VK FP 25.2 349 3,625 12.2 12.2 10.7 7.8 NM NM NM NM 0.7 0.9 -28.1% NM -22.8 4.8 -19.0 -65.4 79% 9.2 8.4 5.7 43%
TRMK RX 59.7 816 2,451 4.7 4.7 5.4 5.1 4.6 4.6 5.6 4.1 1.1 1.1 32.5% 5.0% -0.9 6.7 10.9 45.1 66% 3.3 3.5 3.1 41%

Nam Completion Services

RES 4.4 955 901 34.6 NM 35.3 12.0 NM NM NM 652.9 1.5 1.6 4.0% NM -3.4 22.0 20.0 -14.0 -6% 15.0 5.4 1.8 -8%
LBRT 12.6 2,262 2,554 21.1 68.0 15.1 7.8 NM NM NM 80.3 2.8 2.8 -3.3% NM NM NM 38.9 -12.7 5% 1.6 0.2 -0.2 12%
NEX 3.4 736 819 10.8 11.4 8.6 4.2 NM NM NM NM 1.2 1.6 3.2% NM -45.1 NM 15.6 -44.1 10% 0.7 1.0 0.2 6%
PUMP 8.2 828 775 6.9 5.8 6.2 4.1 NM NM NM 1175.7 0.9 0.9 8.5% NM NM NM 38.7 -3.6 -7% -0.3 -0.6 -0.7 -5%
Land Drillers
HP 25.9 2,831 2,779 36.1 9.2 36.5 14.8 NM NM NM NM 0.8 0.9 14.3% 3.9% -1.4 14.6 3.4 -5.5 -2% -0.1 0.1 0.1 -1%
PTEN 6.4 1,202 1,894 12.9 8.7 12.1 7.1 NM NM NM NM 0.6 0.6 16.3% 1.2% -9.1 7.7 -2.6 -18.2 37% 2.4 4.3 2.3 18%
NBR 63.8 465 3,599 8.3 6.5 7.9 6.3 NM NM NM NM 0.5 0.5 64.0% NM -22.6 5.4 -14.1 -41.7 77% 7.3 5.8 4.6 51%
PDS 21.1 289 1,225 7.9 6.1 7.8 5.9 NM NM NM NM NM NM NM NM -9.5 8.5 -7.8 -8.9 76% 3.9 5.2 3.5 40%

Steel
NUE 51.5 15,546 18,208 6.4 7.9 7.2 7.7 11.9 17.5 13.7 15.9 1.5 2.1 7.8% 3.1% 13.0 9.0 24.9 8.3 12% 1.0 1.1 0.9 15%
STLD 35.8 7,521 9,258 6.3 8.1 6.7 7.3 10.1 13.7 10.1 12.6 1.8 2.2 -2.8% 2.8% 20.8 11.1 34.1 12.6 19% 1.5 1.3 1.0 23%
X 18.5 4,069 7,552 6.9 NM 5.8 7.6 NM NM 23.5 NM 1.2 1.2 -23.4% 0.2% -8.6 8.9 23.9 -32.6 45% -32.1 3.4 4.8 43%
CLF 15.8 7,553 12,294 5.5 37.2 4.9 6.0 6.7 NM 5.9 8.2 7.8 13.3 -8.8% NM NM 0.5 -366.1 NM 36% 77.5 1.6 1.1 179%

Oilfield Distributors
MRC 6.8 563 1,489 15.1 14.9 13.5 9.3 NM NM NM 23.4 1.7 NM 48.5% NM -5.9 12.7 8.1 -3.4 38% 4.1 4.0 2.6 32%
DNOW 8.0 879 600 NM NM NM 17.8 NM NM NM 150.8 1.2 1.2 22.3% NM -11.2 6.9 3.0 -5.4 -47% 46.9 23.7 -8.9 -23%
Source: Bloomberg, Company Data, BTIG

BTIG, LLC Igor Levi, CFA (212) 738-6036 www.btig.com

6
ENERGY AND SHIPPING INDUSTRY REPORT

OCTG Model
2013 2014 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E
Forecasting demand

Sequential growth %
US rig count growth -8% 6% -48% -48% 72% 18% -9% -54% -1% 30% 20% 20% 10%
US well count growth -1% 4% -52% -41% 66% 10% -13% -56% 0% 22% 20% 20% 10%
US Hz well count growth 12% 16% -45% -36% 82% 15% -8% -52% 1% 19% 20% 20% 10%
Footage growth 3% 11% -45% -36% 79% 15% -6% -53% 6% 24% 20% 21% 11%
OCTG/rig 7% 1% 13% 13% 20% 4% 4% 27% 12% -12% 2% 2% 2%
OCTG/well -1% 3% 25% 1% 24% 11% 10% 34% 11% -6% 2% 2% 2%
US OCTG demand growth -2% 7% -41% -41% 107% 22% -5% -41% 11% 14% 22% 22% 13%

Demand drivers
US Rig Count 1,761 1,861 977 509 875 1,031 944 436 431 558 668 800 883
US Horizontal Rig Count 1,102 1,275 744 401 735 899 826 387 393 518 622 746 821
US Wells Drilled 42,972 44,650 21,263 12,473 20,765 22,918 19,832 8,697 8,701 10,595 12,683 15,186 16,768
US Horizontal Wells Drilled 18,382 21,277 11,773 7,537 13,706 15,738 14,535 7,018 7,094 8,426 10,087 12,077 13,336
Total Footage Drilled ('000) 394,579 437,846 239,819 154,279 276,908 318,002 299,655 139,713 147,601 182,889 218,881 264,543 294,896
Lateral Footage Drilled ('000) 104,191 129,856 76,942 59,085 111,754 134,291 131,852 67,235 70,524 86,268 103,216 126,055 141,975
Vertical Footage Drilled ('000) 290,388 307,990 162,877 95,194 165,153 183,711 167,804 72,478 77,077 96,622 115,665 138,488 152,920

OCTG/Rig (monthly) 302 305 346 392 472 488 507 643 722 636 649 662 675
% growth 7% 1% 13% 13% 20% 4% 4% 27% 12% -12% 2% 2% 2%
OCTG/Well Drilled 149 153 191 192 238 264 289 387 429 402 410 418 427
% growth -1% 3% 25% 1% 24% 11% 10% 34% 11% -6% 2% 2% 2%
OCTG/1,000 ft 16 16 17 16 18 19 19 24 25 23 24 24 24
% growth -5% -4% 9% -8% 15% 6% 1% 26% 5% -8% 2% 1% 1%
Average lateral length/Hz well 5,666 6,099 6,560 7,241 7,647 8,112 8,784 9,466 9,834 10,032 10,233 10,438 10,646
% growth 5% 8% 8% 10% 6% 6% 8% 8% 4% 2% 2% 2% 2%

OCTG Demand ('000 short tons)

Apparent demand 6,820 7,004 3,443 2,064 5,509 5,841 5,419 2,705 3,728 4,459 5,600 6,751 7,553
Demand welded 3,410 3,502 1,676 840 2,545 2,436 2,403 1,144 1,491 1,784 2,240 2,700 3,021
Demand seamless 3,410 3,502 1,767 1,224 2,964 3,405 3,016 1,561 2,237 2,675 3,360 4,051 4,532
Real demand 6,386 6,818 4,055 2,391 4,951 6,044 5,738 3,365 3,728 4,259 5,200 6,351 7,153
Change in inventory 434 186 -613 -327 558 -203 -320 -660 0 200 400 400 400
Total inventory 3,206 3,392 2,779 2,452 3,010 2,807 2,487 1,827 1,827 2,027 2,427 2,827 3,227

Inventory months of demand 5.6 10.0 13.9 5.9 6.0 5.9 8.9 5.9 5.1 4.7 4.6 4.7 5.4
Inventory change 434 186 -613 -327 558 -203 -320 -660 0 200 400 400 400

Seamless demand % 50% 50% 51% 59% 54% 58% 56% 58% 60% 60% 60% 60% 60%
Source: Bloomberg, Company Data, OCTG Situation Report, Rystad Energy, BTIG

BTIG, LLC Igor Levi, CFA (212) 738-6036 www.btig.com

7
 Tenaris Income Statement
ENERGY AND SHIPPING INDUSTRY REPORT

Income Statement
($ millions) 2017 2018 2019 2020E 2021E 2022E 1Q20 2Q20 3Q20 4Q20E 1Q21E 2Q21E 3Q21E 4Q21E 1Q22E 2Q22E 3Q22E 4Q22E
Revenues 5,288.5 7,658.6 7,294.1 5,042.6 4,646.7 5,424.8 1,762.3 1,241.0 1,012.8 1,026.5 1,073.8 1,136.1 1,178.2 1,258.6 1,289.4 1,350.6 1,336.8 1,448.0
COGS (3,671.1) (5,279.3) (5,107.5) (3,872.9) (3,559.7) (4,110.0) (1,270.7) (988.3) (827.9) (786.1) (836.8) (876.7) (903.6) (942.5) (987.7) (1,027.5) (1,018.5) (1,076.3)
Gross Profit 1,617.4 2,379.3 2,186.6 1,169.7 1,087.0 1,314.7 491.6 252.7 184.9 240.5 237.0 259.4 274.5 316.1 301.7 323.1 318.3 371.7

SG&A (1,262.0) (1,401.0) (1,356.0) (1,102.9) (929.3) (1,030.7) (357.0) (286.0) (234.1) (225.8) (214.8) (227.2) (235.6) (251.7) (245.0) (256.6) (254.0) (275.1)
Other 1.2 2.5 11.8 4.8 - - 1.3 (3.4) 6.9 - - - - - - - - -
EBIT 356.6 980.8 842.4 71.6 157.7 284.0 135.9 (36.6) (42.3) 14.6 22.2 32.2 38.9 64.4 56.7 66.5 64.3 96.6

Interest income 47.6 39.9 48.0 16.0 22.2 49.6 1.9 3.8 4.9 5.4 5.2 5.3 5.6 6.1 12.2 12.3 12.0 13.2
Interest expense (27.1) (36.9) (43.4) (32.8) (41.7) (42.6) (8.4) (7.4) (6.6) (10.4) (10.4) (10.4) (10.4) (10.4) (10.6) (10.6) (10.6) (10.6)
Other financial results (43.6) (4.6) 14.7 (39.0) - - (15.7) (9.9) (13.4) - - - - - - - - -
EBT 333.6 979.1 861.7 15.7 138.2 291.1 113.6 (50.1) (57.4) 9.6 17.0 27.1 34.1 60.0 58.3 68.1 65.6 99.1

Income Taxes 10.5 (184.2) (202.5) (60.4) (34.5) (72.8) (135.8) 49.4 28.3 (2.4) (4.2) (6.8) (8.5) (15.0) (14.6) (17.0) (16.4) (24.8)
Equity in Affilicates 116.1 194.0 82.0 47.7 81.2 81.2 1.9 4.4 21.1 20.3 20.3 20.3 20.3 20.3 20.3 20.3 20.3 20.3
Minority Interest 8.3 2.2 11.4 5.9 (20.0) (20.0) 5.7 2.3 2.9 (5.0) (5.0) (5.0) (5.0) (5.0) (5.0) (5.0) (5.0) (5.0)
Net Income to Common (Operating) 468.6 991.1 752.7 9.0 164.8 279.5 (14.7) 6.0 (4.9) 22.5 28.0 35.6 40.9 60.3 59.0 66.4 64.5 89.6

Discontinued operations 91.5 - - - - - - - - - - - - - - - - -

Asset impairments - - - - - - - - - - - - - - - - - -
Goodwill/intangible impairments - - - - - - - - - - - - - - - - - -
Other non-recurring items (15.4) (115.0) (10.0) (676.4) - - (622.4) - (54.0) - - - - - - - - -
Net Income GAAP 544.7 876.1 742.7 (667.4) 164.8 279.5 (637.1) 6.0 (58.9) 22.5 28.0 35.6 40.9 60.3 59.0 66.4 64.5 89.6

EPADS (operating) 0.79 1.68 1.28 0.02 0.28 0.47 (0.02) 0.01 (0.01) 0.04 0.05 0.06 0.07 0.10 0.10 0.11 0.11 0.15
EPADS (GAAP) 0.92 1.48 1.26 (1.13) 0.28 0.47 (1.08) 0.01 (0.10) 0.04 0.05 0.06 0.07 0.10 0.10 0.11 0.11 0.15

Reconciliation to EBITDA
EBIT 356.6 980.8 842.4 71.6 157.7 284.0 135.9 (36.6) (42.3) 14.6 22.2 32.2 38.9 64.4 56.7 66.5 64.3 96.6
D&A 608.6 555.4 539.5 643.4 598.4 598.4 167.0 149.2 177.6 149.6 149.6 149.6 149.6 149.6 149.6 149.6 149.6 149.6
EBITDA 965.2 1,536.2 1,381.9 715.0 756.1 882.4 302.8 112.6 135.3 164.2 171.8 181.8 188.5 214.0 206.3 216.1 213.9 246.2

Dividend per ADS 0.82 0.82 0.82 0.14 0.26 0.52 - - - 0.14 - - - 0.26 - 0.26 - 0.26
Source: Company Data, BTIG

BTIG, LLC Igor Levi, CFA (212) 738-6036 www.btig.com

8
 Tenaris Cash Flow Statement
ENERGY AND SHIPPING INDUSTRY REPORT

Cash Flow Statement

($ millions) 2017 2018 2019 2020E 2021E 2022E 1Q20 2Q20 3Q20 4Q20E 1Q21E 2Q21E 3Q21E 4Q21E 1Q22E 2Q22E 3Q22E 4Q22E
Net Income 536.4 873.9 731.3 (729.4) 164.8 279.5 (665.7) (50.3) (35.9) 22.5 28.0 35.6 40.9 60.3 59.0 66.4 64.5 89.6
D&A 608.6 664.4 539.5 643.4 598.4 598.4 167.0 149.2 177.6 149.6 149.6 149.6 149.6 149.6 149.6 149.6 149.6 149.6
Income tax accruals less payment (194.0) 58.5 (193.4) (95.2) (125.5) (87.2) 86.3 (88.6) (55.3) (37.6) (35.8) (33.2) (31.5) (25.0) (25.4) (23.0) (23.6) (15.2)
Equity in earnings of non-consolidated companies (116.1) (194.0) (82.0) (47.7) (81.2) (81.2) (1.9) (4.4) (21.1) (20.3) (20.3) (20.3) (20.3) (20.3) (20.3) (20.3) (20.3) (20.3)
Interest accruals less payments, net 5.5 6.2 (4.4) 1.5 - - 3.1 (1.8) 0.2 - - - - - - - - -
Change in provisions (17.2) (8.4) 2.7 (10.0) - - (11.5) (0.3) 1.8 - - - - - - - - -
Changes in working capital (855.3) (772.1) 523.1 1,058.0 44.9 (66.5) 317.0 446.1 334.2 (39.2) (22.2) 17.4 61.9 (12.1) (71.5) (14.3) 102.4 (83.1)
Currency translation adjustment and others 10.1 (17.6) 11.1 630.3 (20.0) (20.0) 621.8 (2.4) 15.8 (5.0) (5.0) (5.0) (5.0) (5.0) (5.0) (5.0) (5.0) (5.0)
Cash from Operations (22.0) 610.8 1,527.9 1,451.0 581.5 623.0 516.1 447.6 417.3 70.1 94.4 144.0 195.7 147.5 86.4 153.5 267.6 115.6
Capex (558.2) (349.5) (350.2) (200.0) (170.5) (299.2) (68.0) (45.5) (41.6) (44.9) (44.9) (40.4) (40.4) (44.9) (74.8) (74.8) (74.8) (74.8)
Free cash flow (580.3) 261.3 1,177.8 1,250.9 411.0 323.8 448.0 402.0 375.7 25.2 49.5 103.6 155.3 102.6 11.6 78.7 192.8 40.8

Advance to suppliers of PP&E 7.1 4.9 2.3 0.8 - - (0.4) 0.5 0.7 - - - - - - - - -
Acquisitions/Investments in companies (14.1) - (153.9) (1,040.4) (60.0) - (1,063.8) - 38.5 (15.0) (15.0) (15.0) (15.0) (15.0) - - - -
Loan to non-consolidated companies (7.1) (5.4) - - - - - - - - - - - - - - - -
Dispositions 333.1 6.0 2.1 11.7 - - 0.5 0.6 10.5 - - - - - - - - -
Dividends received from non-consolidated companies 23.0 25.7 29.0 0.3 25.0 25.0 - 0.3 - - - 25.0 - - - 25.0 - -
Changes in investment securities 565.4 717.4 389.8 (563.2) - - 31.3 (286.7) (307.8) - - - - - - - - -
Dividends paid to common (484.0) (484.0) (484.0) (82.6) (153.5) (306.9) - - - (82.6) - - - (153.5) - (153.5) - (153.5)
Dividends paid to non-controlling interests (24.0) (3.5) (1.9) - - - - - - - - - - - - - - -
Acquisitions of non-controlling interests (0.0) (0.0) - - - - - - - - - - - - - - - -
Effect of exchange rates 5.8 (7.0) 1.8 (24.2) - - (19.7) (2.2) (2.3) - - - - - - - - -
Other (1.0) (4.5) 12.0 (34.8) - - (13.0) (12.0) (9.9) - - - - - - - - -
Change in liquidity (176.2) 510.9 975.0 (481.5) 222.5 41.8 (617.1) 102.6 105.4 (72.5) 34.5 113.6 140.3 (65.8) 11.6 (49.8) 192.8 (112.7)
Net change in debt 106.7 (412.9) 150.5 (139.8) - - (95.3) (33.5) (10.9) - - - - - - - - -
Total change in cash (69.5) 98.0 1,125.5 (621.3) 222.5 41.8 (712.4) 69.0 94.5 (72.5) 34.5 113.6 140.3 (65.8) 11.6 (49.8) 192.8 (112.7)
Source: Company Data, BTIG

BTIG, LLC Igor Levi, CFA (212) 738-6036 www.btig.com

9
 Tenaris Balance Sheet
ENERGY AND SHIPPING INDUSTRY REPORT

Balance Sheet
($ millions) 2017 2018 2019 2020E 2021E 2022E 1Q20 2Q20 3Q20 4Q20E 1Q21E 2Q21E 3Q21E 4Q21E 1Q22E 2Q22E 3Q22E 4Q22E
ASSETS
Cash & equivalents 330.2 428.4 1,554.3 932.7 1,155.2 1,197.1 841.7 911.0 1,005.2 932.7 967.2 1,080.8 1,221.1 1,155.2 1,166.8 1,117.0 1,309.8 1,197.1
Other investments 1,192.3 487.7 210.4 620.5 620.5 620.5 174.4 445.2 620.5 620.5 620.5 620.5 620.5 620.5 620.5 620.5 620.5 620.5
Trade receivables 1,214.1 1,737.4 1,348.2 948.4 902.9 786.9 1,184.0 1,044.8 910.0 948.4 954.49 936.38 896.45 902.91 888.25 860.85 784.63 786.93
Current tax assets 132.3 121.3 167.4 122.9 122.9 122.9 140.3 126.2 122.9 122.9 122.9 122.9 122.9 122.9 122.9 122.9 122.9 122.9
Other receivables and prepayments 143.9 155.9 104.6 108.3 132.8 152.7 104.4 129.7 84.0 108.29 113.28 119.85 124.29 132.77 136.02 142.48 141.02 152.74
Inventories 2,368.3 2,524.3 2,265.9 1,580.7 1,639.2 1,871.8 2,235.3 1,857.7 1,621.6 1,580.7 1,627.2 1,637.9 1,620.7 1,639.2 1,755.9 1,806.6 1,771.3 1,871.8
Other current assets - 9.2 19.9 - - - 7.9 4.6 6.6 - - - - - - - - -
Total current Assets 5,381.2 5,464.2 5,670.6 4,313.5 4,573.5 4,752.0 4,687.9 4,519.1 4,370.9 4,313.5 4,405.5 4,518.3 4,605.9 4,573.5 4,690.4 4,670.4 4,750.2 4,752.0

Property, plant and equipment, net 6,229.1 6,063.9 6,090.0 6,183.9 5,816.0 5,516.8 6,450.5 6,368.3 6,273.6 6,183.9 6,094.1 5,999.9 5,905.7 5,816.0 5,741.2 5,666.4 5,591.6 5,516.8
Intangible assets 1,660.9 1,466.0 1,561.6 1,444.6 1,444.6 1,444.6 1,470.1 1,460.7 1,444.6 1,444.6 1,444.6 1,444.6 1,444.6 1,444.6 1,444.6 1,444.6 1,444.6 1,444.6
Investments in non-consolidated companies 640.3 805.6 880.0 892.5 948.7 1,004.9 853.2 855.3 872.2 892.5 912.8 908.1 928.4 948.7 969.0 964.3 984.6 1,004.9
Available for sale/right of use assets 21.6 - 233.1 261.3 261.3 261.3 251.4 265.0 261.3 261.3 261.3 261.3 261.3 261.3 261.3 261.3 261.3 261.3
Other investments 128.3 118.2 24.9 178.1 178.1 178.1 25.2 47.1 178.1 178.1 178.1 178.1 178.1 178.1 178.1 178.1 178.1 178.1
Deferred tax assets 153.5 181.6 225.7 310.9 310.9 310.9 230.4 228.7 310.9 310.9 310.9 310.9 310.9 310.9 310.9 310.9 310.9 310.9
Long term receivables 183.3 151.9 157.1 150.6 150.6 150.6 152.6 151.9 150.6 150.6 150.6 150.6 150.6 150.6 150.6 150.6 150.6 150.6
Total Non-current Assets 9,017.1 8,787.1 9,172.4 9,422.0 9,110.3 8,867.3 9,433.6 9,377.0 9,491.4 9,422.0 9,352.6 9,253.6 9,179.7 9,110.3 9,055.8 8,976.3 8,921.8 8,867.3

TOTAL ASSETS 14,398.2 14,251.3 14,843.0 13,735.5 13,683.8 13,619.2 14,121.4 13,896.1 13,862.3 13,735.5 13,758.1 13,771.9 13,785.6 13,683.8 13,746.2 13,646.7 13,671.9 13,619.2

LIABILITIES AND SHAREHOLDERS' EQUITY

Payables 750.7 693.7 555.9 369.7 443.3 506.2 530.2 414.7 364.0 369.7 402.3 416.9 425.0 443.3 474.8 488.6 479.0 506.2
Customer advances 56.7 62.7 82.7 39.1 47.9 55.1 76.8 69.3 68.8 39.1 41.8 43.7 44.8 47.9 50.1 51.9 50.9 55.1
Provisions 32.3 24.3 17.0 12.9 12.9 12.9 14.1 13.0 12.9 12.9 12.9 12.9 12.9 12.9 12.9 12.9 12.9 12.9
Other current liabilities 197.5 177.7 215.9 292.1 292.1 292.1 320.7 308.8 292.1 292.1 292.1 292.1 292.1 292.1 292.1 292.1 292.1 292.1
Current tax liabilities 102.4 250.2 127.6 91.5 91.5 91.5 118.1 97.4 91.5 91.5 91.5 91.5 91.5 91.5 91.5 91.5 91.5 91.5
Short term debt 931.2 509.8 781.3 401.4 401.4 401.4 523.2 467.1 401.4 401.4 401.4 401.4 401.4 401.4 401.4 401.4 401.4 401.4
Total current liabilities 2,070.9 1,718.4 1,780.5 1,206.6 1,289.0 1,359.1 1,583.1 1,370.3 1,230.6 1,206.6 1,241.9 1,258.4 1,267.6 1,289.0 1,322.8 1,338.3 1,327.7 1,359.1

Long-term debt & leases 34.6 29.2 40.9 524.3 524.3 524.3 175.2 453.3 524.3 524.3 524.3 524.3 524.3 524.3 524.3 524.3 524.3 524.3
Deferred tax liabilities 458.0 379.0 337.0 386.8 261.3 174.1 419.9 380.0 424.4 386.8 351.0 317.8 286.3 261.3 235.9 212.9 189.3 174.1
Other liabilities 217.3 213.1 443.7 239.9 239.9 239.9 456.5 241.7 239.9 239.9 239.9 239.9 239.9 239.9 239.9 239.9 239.9 239.9
Provisions 36.4 36.1 54.6 75.8 75.8 75.8 73.1 73.9 75.8 75.8 75.8 75.8 75.8 75.8 75.8 75.8 75.8 75.8
Total non-current liabilities 746.3 657.4 876.2 1,226.8 1,101.3 1,014.1 1,124.7 1,148.9 1,264.3 1,226.8 1,191.0 1,157.8 1,126.3 1,101.3 1,075.9 1,052.9 1,029.3 1,014.1

TOTAL LIABILITIES 2,817.2 2,375.8 2,656.6 2,433.3 2,390.3 2,373.2 2,707.8 2,519.2 2,495.0 2,433.3 2,432.9 2,416.1 2,393.9 2,390.3 2,398.7 2,391.2 2,357.0 2,373.2

Capital and reserves attributable to owners of parent 11,482.2 11,782.9 11,989.0 11,121.9 11,133.3 11,105.9 11,222.3 11,188.3 11,182.1 11,121.9 11,150.0 11,185.6 11,226.5 11,133.3 11,192.3 11,105.2 11,169.7 11,105.9
Non-controlling interests 98.8 92.6 197.4 180.2 160.2 140.2 191.4 188.6 185.2 180.2 175.2 170.2 165.2 160.2 155.2 150.2 145.2 140.2
Total equity 11,581.0 11,875.5 12,186.4 11,302.2 11,293.5 11,246.1 11,413.7 11,376.9 11,367.3 11,302.2 11,325.2 11,355.8 11,391.7 11,293.5 11,347.5 11,255.4 11,314.9 11,246.1
TOTAL LIABILITIES and EQUITY 14,398.2 14,251.3 14,843.0 13,735.5 13,683.8 13,619.2 14,121.4 13,896.1 13,862.3 13,735.5 13,758.1 13,771.9 13,785.6 13,683.8 13,746.2 13,646.7 13,671.9 13,619.2
Source: Company Data, BTIG

BTIG, LLC Igor Levi, CFA (212) 738-6036 www.btig.com

10
 Vallourec Income Statement
ENERGY AND SHIPPING INDUSTRY REPORT

Income Statement
(€ millions) 2018 2019 2020E 2021E 2022E 1Q20 2Q20 3Q20 4Q20E 1Q21E 2Q21E 3Q21E 4Q21E 1Q22E 2Q22E 3Q22E 4Q22E
Revenues 3,921.0 4,173.0 3,321.8 2,998.6 3,351.7 1,025.0 843.0 716.0 737.8 715.7 722.8 741.0 819.1 769.7 812.1 840.6 929.3
COGS ex-D&A (3,342.0) (3,435.0) (2,729.8) (2,432.4) (2,702.3) (857.0) (707.0) (562.0) (603.8) (576.8) (590.2) (591.0) (674.4) (616.5) (659.0) (666.3) (760.5)
Gross Profit 579.0 738.0 592.0 566.1 649.4 168.0 136.0 154.0 134.0 138.9 132.6 150.0 144.7 153.2 153.0 174.3 168.8

SG&A (405.0) (378.0) (313.2) (280.7) (296.5) (93.0) (83.0) (77.0) (60.2) (74.4) (67.6) (75.9) (62.8) (76.2) (71.8) (81.9) (66.6)
Other (24.0) (13.0) (24.0) - - (8.0) (10.0) (6.0) - - - - - - - - -
EBITDA 150.0 347.0 254.8 285.5 352.9 67.0 43.0 71.0 73.8 64.4 65.1 74.1 81.9 77.0 81.2 92.5 102.2

Depreciation of industrial assets (266.0) (249.0) (212.4) (192.8) (189.4) (66.0) (52.0) (47.0) (47.4) (48.2) (48.3) (48.4) (47.9) (47.9) (47.7) (47.2) (46.6)
Amortization and other depreciation (35.0) (58.0) (48.0) - - (15.0) (13.0) (10.0) (10.0) - - - - - - - -
EBIT (151.0) 40.0 (5.6) 92.7 163.5 (14.0) (22.0) 14.0 16.4 16.2 16.8 25.7 34.0 29.1 33.5 45.3 55.6

Financial income (loss) (220.0) (244.0) (261.9) (265.6) (259.4) (61.0) (80.0) (64.0) (56.9) (66.4) (66.4) (66.4) (66.4) (66.5) (66.5) (66.5) (59.9)
Other financial results - - - - - - - - - - - - - - - - -
EBT (371.0) (204.0) (267.5) (172.9) (95.9) (75.0) (102.0) (50.0) (40.5) (50.1) (49.6) (40.8) (32.4) (37.4) (33.0) (21.2) (4.3)

Income Taxes (5.0) (75.0) (30.9) 34.6 19.2 (8.0) (10.0) (21.0) 8.1 10.0 9.9 8.2 6.5 7.5 6.6 4.2 0.9
Equity in Affiliates 2.0 (3.0) (2.0) - - (1.0) - (1.0)
Minority Interest (2.0) (3.0) 91.0 - - (1.0) 82.0 10.0 - - - - - - - - -
Net Income to Common (Operating) (376.0) (285.0) (209.4) (138.3) (76.7) (85.0) (30.0) (62.0) (32.4) (40.1) (39.7) (32.6) (25.9) (29.9) (26.4) (17.0) (3.4)

Non-recurring items (126.0) (57.0) (475.0) - - (5.0) (463.0) (7.0) - - - - - - - - -

Net Income IFRS (502.0) (342.0) (684.4) (138.3) (76.7) (90.0) (493.0) (69.0) (32.4) (40.1) (39.7) (32.6) (25.9) (29.9) (26.4) (17.0) (3.4)

EPS (operating) (0.84) (0.63) (0.47) (0.31) (0.17) (0.19) (2.62) (5.41) (2.83) (3.50) (3.47) (2.85) (2.26) (2.61) (2.31) (1.48) (0.30)
EPS (IFRS) (1.12) (0.76) (1.52) (0.31) (0.17) (0.20) (43.06) (6.03) (2.83) (3.50) (3.47) (2.85) (2.26) (2.61) (2.31) (1.48) (0.30)
CEPS (operating) (1.43) (1.19) (0.94) (0.74) (0.59) (0.33) (7.16) (9.52) (6.97) (7.71) (7.69) (7.08) (6.45)

Dividend per share - - - - - - - - - -

Source: Company Data, BTIG

BTIG, LLC Igor Levi, CFA (212) 738-6036 www.btig.com

11
 Vallourec Cash Flow Statement
ENERGY AND SHIPPING INDUSTRY REPORT

Cash Flow Statement

(€ millions) 2018 2019 2020E 2021E 2022E 1Q20 2Q20 3Q20 4Q20E 1Q21E 2Q21E 3Q21E 4Q21E 1Q22E 2Q22E 3Q22E 4Q22E
Net Income (502.0) (342.0) (684.4) (138.3) (76.7) (90.0) (493.0) (69.0) (32.4) (40.1) (39.7) (32.6) (25.9) (29.9) (26.4) (17.0) (3.4)
D&A 301.0 307.0 260.4 192.8 189.4 81.0 65.0 57.0 57.4 48.2 48.3 48.4 47.9 47.9 47.7 47.2 46.6
Changes in working capital (155.0) 124.0 76.8 (26.8) (29.7) (113.0) 20.0 94.0 75.8 (43.2) 75.6 15.8 (75.1) 15.6 (21.1) (10.0) (14.1)
Others 142.0 29.0 314.9 (34.6) (19.2) (20.0) 363.0 (20.0) (8.1) (10.0) (9.9) (8.2) (6.5) (7.5) (6.6) (4.2) (0.9)
Cash from Operations (214.0) 118.0 (32.3) (7.0) 63.8 (142.0) (45.0) 62.0 92.7 (45.1) 74.3 23.5 (59.6) 26.1 (6.4) 15.9 28.2
Capex (129.0) (159.0) (137.6) (142.1) (148.0) (17.0) (32.0) (27.0) (61.6) (35.0) (35.0) (24.2) (47.9) (40.0) (23.9) (23.6) (60.6)
Free cash flow (343.0) (41.0) (169.9) (149.1) (84.2) (159.0) (77.0) 35.0 31.1 (80.1) 39.3 (0.7) (107.5) (13.9) (30.3) (7.6) (32.4)

Impact of acquisition - - - - - - - - - - - - - - - - -
Asset disposals & other items (21.0) 9.0 13.0 - - 33.0 17.0 (37.0) - - - - - - - - -
Financial investments - - - - - - - - - - - - - - - - -
Dividends paid - - - - -
Increase and decrease in equity - - - - - - - - - - - - - - - - -
Other (plug) (152.0) 59.0 - - - - - - - - - - - - - - -
Change in liquidity (516.0) 27.0 (156.9) (149.1) (84.2) (126.0) (60.0) (2.0) 31.1 (80.1) 39.3 (0.7) (107.5) (13.9) (30.3) (7.6) (32.4)
Net change in debt 235.0 1,027.0 (257.0) - (761.0) (12.0) (176.0) (69.0) - - - - - - - - (761.0)
Total change in cash (281.0) 1,054.0 (413.9) (149.1) (845.2) (138.0) (236.0) (71.0) 31.1 (80.1) 39.3 (0.7) (107.5) (13.9) (30.3) (7.6) (793.4)
Source: Company Data, BTIG

BTIG, LLC Igor Levi, CFA (212) 738-6036 www.btig.com

12
 Vallourec Balance Sheet
ENERGY AND SHIPPING INDUSTRY REPORT

Balance Sheet
(€ millions) 2018 2019 2020E 2021E 2022E 1Q20 2Q20 3Q20 4Q20E 1Q21E 2Q21E 3Q21E 4Q21E 1Q22E 2Q22E 3Q22E 4Q22E
ASSETS
Cash & equivalents 740.0 1,794.0 1,380.1 1,231.0 385.7 1,656.0 1,420.0 1,349.0 1,380.1 1,299.9 1,339.2 1,338.5 1,231.0 1,217.0 1,186.8 1,179.1 385.7
Receivables 599.0 638.0 481.2 445.2 490.7 680.0 600.0 533.0 481.2 477.1 460.7 443.0 445.2 476.8 488.0 492.1 490.7
Inventories and work-in-progress 1,135.0 988.0 754.7 806.4 889.1 1,067.0 963.0 855.0 754.7 737.0 745.9 738.7 806.4 779.2 821.5 818.7 889.1
Derivatives 3.0 7.0 29.0 29.0 29.0 14.0 11.0 29.0 29.0 29.0 29.0 29.0 29.0 29.0 29.0 29.0 29.0
Other current assets 216.0 237.0 265.0 240.0 240.0 211.0 193.0 176.0 265.0 260.0 260.0 260.0 240.0 240.0 240.0 240.0 240.0
Total current Assets 2,693.0 3,664.0 2,909.9 2,751.5 2,034.5 3,628.0 3,187.0 2,942.0 2,909.9 2,803.1 2,834.8 2,809.2 2,751.5 2,742.1 2,765.3 2,759.0 2,034.5

Property, plant and equipment, net 2,691.0 2,642.0 2,150.2 2,099.5 2,058.2 2,455.0 2,266.0 2,136.0 2,150.2 2,137.1 2,123.8 2,099.5 2,099.5 2,091.7 2,067.8 2,044.2 2,058.2
Net Intangible assets 71.0 63.0 43.0 43.0 43.0 62.0 58.0 53.0 43.0 43.0 43.0 43.0 43.0 43.0 43.0 43.0 43.0
Goodwill 358.0 364.0 24.0 24.0 24.0 366.0 26.0 24.0 24.0 24.0 24.0 24.0 24.0 24.0 24.0 24.0 24.0
Biological assets 60.0 62.0 43.0 43.0 43.0 51.0 45.0 43.0 43.0 43.0 43.0 43.0 43.0 43.0 43.0 43.0 43.0
Associates 134.0 129.0 125.0 125.0 125.0 129.0 128.0 125.0 125.0 125.0 125.0 125.0 125.0 125.0 125.0 125.0 125.0
Other non-current assets 156.0 132.0 99.0 99.0 99.0 124.0 110.0 99.0 99.0 99.0 99.0 99.0 99.0 99.0 99.0 99.0 99.0
Deferred tax assets 250.0 249.0 205.0 205.0 205.0 217.0 207.0 205.0 205.0 205.0 205.0 205.0 205.0 205.0 205.0 205.0 205.0
Assets held for sale - - - - - - - - - - - - - - - - -
Total Non-current Assets 3,720.0 3,641.0 2,689.2 2,638.5 2,597.2 3,404.0 2,840.0 2,685.0 2,689.2 2,676.1 2,662.8 2,638.5 2,638.5 2,630.7 2,606.8 2,583.2 2,597.2
TOTAL ASSETS 6,413.0 7,305.0 5,599.2 5,390.1 4,631.7 7,032.0 6,027.0 5,627.0 5,599.2 5,479.1 5,497.5 5,447.7 5,390.1 5,372.7 5,372.2 5,342.2 4,631.7

LIABILITIES AND SHAREHOLDERS' EQUITY

Payables 582.0 580.0 457.7 421.5 520.0 633.0 504.0 445.0 457.7 387.7 455.8 446.8 421.5 441.5 473.9 465.2 520.0
Provisions 136.0 121.0 80.0 80.0 80.0 127.0 93.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0
Tax and other current liabilities 293.0 329.0 263.0 263.0 263.0 287.0 279.0 263.0 263.0 263.0 263.0 263.0 263.0 263.0 263.0 263.0 263.0
Derivatives - liabilities 32.0 18.0 13.0 13.0 13.0 31.0 17.0 13.0 13.0 13.0 13.0 13.0 13.0 13.0 13.0 13.0 13.0
Short-term debt 1,001.0 2,107.0 1,067.8 1,828.8 1,446.8 2,204.0 2,027.0 1,954.0 1,067.8 1,067.8 1,067.8 1,067.8 1,828.8 1,828.8 1,828.8 1,828.8 1,446.8
Total current liabilities 2,044.0 3,155.0 1,881.5 2,606.3 2,322.8 3,282.0 2,920.0 2,755.0 1,881.5 1,811.5 1,879.6 1,870.6 2,606.3 2,626.3 2,658.7 2,650.0 2,322.8

Long-term Debt 1,797.0 1,851.0 2,723.7 1,968.7 1,594.2 1,834.0 1,841.0 1,836.0 2,723.7 2,725.2 2,726.7 2,728.2 1,968.7 1,970.2 1,971.7 1,973.2 1,594.2
Employee benefits 214.0 228.0 213.0 213.0 213.0 187.0 220.0 213.0 213.0 213.0 213.0 213.0 213.0 213.0 213.0 213.0 213.0
Deferred tax liabilities 15.0 9.0 19.0 19.0 19.0 12.0 10.0 19.0 19.0 19.0 19.0 19.0 19.0 19.0 19.0 19.0 19.0
Provisions and other long term liabilities 50.0 61.0 64.0 64.0 64.0 59.0 73.0 64.0 64.0 64.0 64.0 64.0 64.0 64.0 64.0 64.0 64.0
Liabilities held for sale - - - - - - - - - - - - - - - - -
Total non-current liabilities 2,076.0 2,149.0 3,019.7 2,264.7 1,890.2 2,092.0 2,144.0 2,132.0 3,019.7 3,021.2 3,022.7 3,024.2 2,264.7 2,266.2 2,267.7 2,269.2 1,890.2

TOTAL LIABILITIES 4,120.0 5,304.0 4,901.2 4,871.0 4,213.0 5,374.0 5,064.0 4,887.0 4,901.2 4,832.7 4,902.3 4,894.8 4,871.0 4,892.5 4,926.4 4,919.2 4,213.0

Capital and reserves attributable to owners of parent 1,802.0 1,467.0 336.0 157.1 56.7 1,161.0 561.0 378.0 336.0 284.4 233.2 191.0 157.1 118.2 83.7 61.0 56.7
Non-controlling interests 462.0 513.0 354.0 354.0 354.0 480.0 386.0 354.0 354.0 354.0 354.0 354.0 354.0 354.0 354.0 354.0 354.0
Shareholder loan 29.0 21.0 8.0 8.0 8.0 17.0 16.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0
Total equity 2,293.0 2,001.0 698.0 519.1 418.7 1,658.0 963.0 740.0 698.0 646.4 595.2 553.0 519.1 480.2 445.7 423.0 418.7
TOTAL LIABILITIES and EQUITY 6,413.0 7,305.0 5,599.2 5,390.1 4,631.7 7,032.0 6,027.0 5,627.0 5,599.2 5,479.1 5,497.5 5,447.7 5,390.1 5,372.7 5,372.2 5,342.2 4,631.7
Source: Company Data, BTIG

BTIG, LLC Igor Levi, CFA (212) 738-6036 www.btig.com

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 BTIG Covered Companies Mentioned in this Report
ENERGY AND SHIPPING INDUSTRY REPORT

Tenaris S.A. (TS, Buy, $20 PT; Closing Price: $15.19; Analyst: Igor Levi)
Vallourec SA (VK-FR, Neutral, Closing Price: €24.79; Analyst: Igor Levi)

BTIG, LLC Igor Levi, CFA (212) 738-6036 www.btig.com

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 Appendix: Analyst Certification and Other Important Disclosures
ENERGY AND SHIPPING INDUSTRY REPORT

Analyst Certification
I, Igor Levi, hereby certify that the views about the companies and securities discussed in this report are accurately expressed and
that I have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations
or views in this report.

I, Gregory Lewis, hereby certify that the views about the companies and securities discussed in this report are accurately
expressed and that I have not received and will not receive direct or indirect compensation in exchange for expressing specific
recommendations or views in this report.

I, Jacob Green, hereby certify that the views about the companies and securities discussed in this report are accurately
expressed and that I have not received and will not receive direct or indirect compensation in exchange for expressing specific
recommendations or views in this report.

Regulatory Disclosures
Ratings Definitions
BTIG LLC’s (“BTIG”) ratings, effective June 12, 2017, are defined as follows:

BUY – A security which is expected to produce a positive total return of 15% or greater over the 12 months following the
recommendation. The BUY rating may be maintained as long as it is deemed appropriate, notwithstanding price fluctuations that
would cause the target to fall outside of the 15% return.

SELL – A security which is expected to produce a negative total return of 15% or greater over the next 12 months following the
recommendation. The SELL rating may be maintained as long as it is deemed appropriate, notwithstanding price fluctuations that
would cause the target to fall outside of the 15% return.

NEUTRAL – A security which is not expected to appreciate or depreciate meaningfully over the next 12 months.

NOT RATED – A security which is not rated or covered by BTIG.

UNDER REVIEW – Effective immediately, coverage of the following securities is Under Review. Ratings, price targets, disclosures,
and estimates for the companies listed below are suspended and should no longer be relied upon.

Distribution of Ratings and Investment Banking Clients

BTIG must disclose in each research report the percentage of all securities rated by the member to which the member would
assign a “buy”, “neutral” or “sell” rating. The said ratings are updated on a quarterly basis. BTIG must also disclose the percentage
of subject companies within each of these three categories for whom the member has provided investment banking services
within the previous twelve months.

Current Rating Distribution (as of January 27, 2021):

Coverage Universe Count Percent Inv. Banking Relationships Count Percent

Buy 254 66.8% Buy 91 35.8%

Neutral 121 31.8% Neutral 22 18.2%
Sell 5 1.3% Sell 0 0.0%
For purposes of FINRA ratings distribution rules, BTIG’s stock ratings of Buy, Neutral and Sell fall into Buy, Hold and Sell
categories, respectively.

Company Valuation and Risk Disclosures

Tenaris S.A. (TS, Buy, $20 PT)

BTIG, LLC Igor Levi, CFA (212) 738-6036 www.btig.com

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 Valuation: Our $20 PT is derived using ~15x 2021 EV/EBITDA, a few turns lower than the multiples seen in the early years of
ENERGY AND SHIPPING INDUSTRY REPORT

recovery, such as in 2016 when shares traded at 20-25x NTM EBITDA.

Risks: Risks include: (i) reversal of tariffs and quotas on certain OCTG imports, (ii) high raw material cost inflation offsetting price
improvements, (iii) oil macro headwinds.

Tenaris S.A. Rating History as of 01/26/2021

I:B:$50.00 B:$35.00 B:$20.00
06/14/2018 01/13/2020 04/27/2020
$60
$50
$40
$30
$20
$10
$0
Apr 18 Jul 18 Oct 18 Jan 19 Apr 19 Jul 19 Oct 19 Jan 20 Apr 20 Jul 20 Oct 20 Jan 21

Closing Price Price Target

B:Buy N:Neutral S:Sell NR:Not rated UR:Under review I:Initiation of Coverage D:Dropped Coverage

Vallourec SA (VK-FR, Neutral)

Valuation: We derive our valuation using EV/EBITDA and other comparable metrics. We believe the share price fairly reflects the
risks. BTIG does not provide price targets for Neutral-rated names.
Risks: Risks to VK include: (i) drop off in high margin eastern hemisphere pipe shipped out of backlog, (ii) change in iron ore prices,
impacting profitability of its mine in Brazil, (iii) costs increase and FCF remains negative in the near to medium-term, (iv) need
to recapitalize, converting debt to equity, (v) oil macro risks.

Vallourec SA Rating History as of 01/26/2021

I:N:NA
06/14/2018
€250

€200

€150

€100

€50

€0
Apr 18 Jul 18 Oct 18 Jan 19 Apr 19 Jul 19 Oct 19 Jan 20 Apr 20 Jul 20 Oct 20 Jan 21

Closing Price Price Target

B:Buy N:Neutral S:Sell NR:Not rated UR:Under review I:Initiation of Coverage D:Dropped Coverage

Company–Specific Regulatory Disclosures

BTIG LLC served as advisor to PAO TMK regarding sale of IPSO Tubulars Inc to Maverick Tube Corporation, a company of Tenaris
Group.

Other Disclosures
Additional Information Available Upon Request

BTIG, LLC Igor Levi, CFA (212) 738-6036 www.btig.com

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 General Disclosures
ENERGY AND SHIPPING INDUSTRY REPORT

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 Jurisdiction and Dissemination
ENERGY AND SHIPPING INDUSTRY REPORT

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