Tenaris S.a. · MIL:TEN
Tenaris — Merger or Acquisition (November 2002)
25 slides from Tenaris's merger presentation, Nov 11, 2002
Slide 1: Exchanging into a global company
Exchanging into a global company 11 November 2002
Slide 2: Disclaimer
Disclaimer This presentation contains “forward-looking statements.” Forward-looking statements are based on management’s current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by th
Slide 3: Executive summary
Executive summary • Tenaris has launched an offer to exchange its shares for shares of Siderca, Tamsa and Dalmine • The transaction is the result of a long-term industrial project under which Tenaris has grown into what it is today • It would consolidate Tenaris into a leading global steel pipe comp
Slide 4: Tenaris: the birth of a global leader
Tenaris: the birth of a global leader
Slide 5: Current shareholding structure
Current shareholding structure • Tenaris is the global brand Tenaris Public shared by Siderca, Tamsa and Dalmine and their respective subsidiaries and the name by 6.9% 0.2% 71.2% 100.0% which Techint’s steel tubes business is known Siderca Tenaris (Argentina) Global Services • Tenaris’s current orga
Slide 6: Tenaris: a leading global OCTG player
Tenaris: a leading global OCTG player • Eight steel pipe mills strategically located around the world with a combined production capacity of 3.125 million tons of seamless and 850,000 tons of welded steel tubes !combined annual sales of US$3.1 billion 14,000 employees worldwide1 Oilfield Pipeline Se
Slide 7: Expansion and geographical diversification over the past 15 years
Expansion and geographical diver- sification over the past 15 years Annual production capacity (thousand tons) Seamless operations 3,125 Welded operations 250 Siderca - Argentina Siat - Argentina Tamsa - Mexico 2,615 260 Confab - Brasil Dalmine - Italy 2,500 65 65 Tavsa - Venezuela 850 NKKTubes - Ja
Slide 8: Strategy based on growth and consolidation
Strategy based on growth and consolidation Tenaris seeks to continue expanding its operations internationally and consolidate its position as a leading supplier of high-quality tubular products and services worldwide to the oil and gas and other industries by: • further integrating the operations of
Slide 9: Competitive strengths
Competitive strengths • Global production, commercial and distribution capabilities • Ability to provide value-added services worldwide • Ability to design and manufacture technologically advanced products • Solid and diversified customer base • Low-cost operations, primarily at state-of-the-art, st
Slide 10: Global manufacturing profile
Global manufacturing profile Seamless operations Tenaris’s total capacity breakdown 2,3 Acquisition date1 Company Country Capacity Seamless + Welded (000 tons) Siderca Argentina 820 Argentina Jun-93 Tamsa Mexico 780 29% Feb-96 Dalmine Italy 950 Oct-98 Tavsa Venezuela 65 Venezuela 2% Aug-00 NKKTubes
Slide 11: ... with a well-balanced portfolio
. . . with a well-balanced portfolio Tenaris volume breakdown Tenaris net sales breakdown 1 2001 Far East 12% In thousand tons 2000 2001 South America Seamless Pipes Sales Volume 2,162 2,673 31% Middle South America 435 504 East and Africa North America 335 451 16% Europe 662 658 Middle East & Afric
Slide 12: Global reach with local presence
Global reach with local presence Stavanger " Aberdeen " " Moscow " Calgary AlgomaTubes Rugby "" London " Paris Dalmine " Baku Beijing " NKKTubes " " Houston " Tamsa " Dubai Maracaibo " Caracas " Tavsa " Kuala Lumpur " Port Harcourt Singapore " Bogota " Quito " Jakarta " Santa Cruz " Confab Santiago
Slide 13: Competitive differentiation based on adding value for customers
Competitive differentiation based on adding value for customers Tubular technologies, Innovative services ! Supply chain services: !Extensive use of IT: ! Just-in-time installed column (JIC) !TenarisTracking ! Advanced product development: !New premium joint technology ! Deep water applications
Slide 14: Growth in sales and operating income
Growth in sales and operating income Summary combined consolidated financials (US$ million) 1999 2000 2001 Jan-Jun 01 Jan-Jun 02 6m 6m Volume (000s tons) 1,813 2,415 3,105 1,527 1,423 Sales 1,835 2,311 3,119 1,526 1,570 Operating income (8) 241 442 231 278 margin (0.4%) 10.4% 14.2% 15.2% 17.7% 3 Adj
Slide 15: Strong balance sheet
Strong balance sheet Current debt situation (US$ million) Capitalization As of Jun 30, 2002 (assets of US$ 3.9 bn under IAS 3) Cash & equivalents 1 385 2863 Financial debt 806 421 Net debt Net debt 2 421 Theoretical combined leverage 15% 2443 4 Theoretical combined market cap 1 Includes investment i
Slide 16: Track record of dividend payments
Track record of dividend payments Tenaris’s main source of cash to pay dividends will come from dividends paid by its operating subsidiaries. Siderca and Tamsa have a consistent record of paying dividends. Dividend payments (US$ million equivalent) 1998 1999 2000 2001 2002YTD Siderca 50+140 1 50+592
Slide 17: The exchange offer and its strategic rationale
The exchange offer and its strategic rationale
Slide 18: Offer summary
Offer summary Transaction • Offer to exchange Tenaris ADS/shares for ADSs/shares summary of Siderca, Tamsa and Dalmine • All stock transaction1 • Expires at 5:00 pm (New York city time) on December 13, 2002 Exchange ratios • One Tenaris share/ADS for 1.0933 Siderca shares/ADSs • One Tenaris share fo
Slide 19: Aimed at creating shareholder value
Aimed at creating shareholder value • Consolidation of Techint’s seamless pipe businesses under one corporate identity and brand • Increased visibility and transparency by simplifying Tenaris’s corporate structure and financial reporting • Alignment of interests across all shareholders of the Tenari
Slide 20: Potential for synergies
Potential for synergies • Tenaris has already achieved a certain level of integration - Shared commercial strategy and infrastructure - Product and geographic complements - Joint-procurement and IT systems integration - Coordination of R&D efforts • The corporate reorganization and alignment of shar
Slide 21: A unique opportunity for shareholders of Siderca, Tamsa and Dalmine
A unique opportunity for shareholders of Siderca, Tamsa and Dalmine • The exchange offer represents an opportunity for shareholders of Siderca, Tamsa and Dalmine to become shareholders of a more diversified and better capitalized global company in the same sector - One of the largest publicly-traded
Slide 22: Change in shareholding structure
Change in shareholding structure Pre - Exchange Offer (simplified) Post - Exchange Offer (simplified)1 Techint Public Public Techint 5 Tenaris 6.9% 0.2% 71.2% 100.0% 100.0% 100.0% Siderca Tenaris Siderca Tenaris (Argentina) Global Services (Argentina) Global Services 43.8% 47.0% 51.0%2 39.0%3 56.2%
Slide 23: Resulting ownership structure
Resulting ownership structure Based on the announced exchange ratios and assuming 100% participation level Tenaris’s approximate pro-forma Approximate contribution to Tenaris1 ownership ! Siderca 78.8% 41 % float ! Tamsa not held by Siderca 14.6% ! Dalmine not held by Siderca 3.7% Former Dalmine pub
Slide 24: Corporate governance
Corporate governance • Single class of shares (with equal voting and dividend rights) • Board will include independent directors • Audit committee will include majority of independent members • Articles of association conform with standard practices in countries of listing (Argentina, Italy, Mexico
Slide 25: Conclusions
Conclusions • Global focused company with leadership position in the OCTG industry • Management strategy based on growth and consolidation of competitive leadership • Solid financial platform to take advantage of future opportunities and pay dividends • Strong industrial logic supporting corporate r