2023 ANNUAL REPORT
PIONEERS FOR AN EMISSION-FREE FUTURE
2023 ANNUAL REPORT | CONTENTS |
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CONTENTS 1
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Letter to the shareholders
2023 at a glance
- Economic situation
- Main figures
- Key milestones
- Projects
Get to know the Tubos Reunidos Group
- What we do
- Where we came from
- Who we are
- Governance body
- Where we are now
- Who our customers are
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6
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Innovation
Sustainability
- Double materiality matrix
- Commitment to the environment
- Social commitment
- Commitment to good governance
Share price status and evolution
Economic information
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Customer focus
2023 ANNUAL REPORT | CONTENTS |
Letter to the shareholders
Carlos López de las Heras
CEO
Josu Calvo
Chairman
Dear shareholders,
It is my pleasure to write to you and share an update on Tubos Reunidos' performance and reflect on the challenges and successes we have seen over the last year. This period has been marked by significant changes and challenges, but also by remarkable achievements that reinforce our commitment to the growth of the group, people and sustainability.
The current geopolitical environment, marked by international conflicts such as the war in Ukraine and the conflict between Israel and Palestine, has created a backdrop of uncertainty that has affected all sec- tors, including our company. These conflicts have led to an increase in production costs due to high energy prices, supply shortages and logistical difficulties.
Despite these adversities, this year Tubos Reunidos has achieved an EBITDA of EUR 106 million and a net profit of EUR 54 million, demonstrating, once again, that it is capable of adapting and being resil- ient. For more than a century we have been able to react quickly to changes in the environment - and this year has been no exception. The strength of our organisation lies in our ability to make quick and effective decisions, which has allowed us not only to overcome challenges, but to also seize emerging opportunities in the market - all while becoming stronger and maintaining sustainable growth that is testament to our strength and long-term vision.
Sustainability is a key pillar in our corporate and commercial strategy. Our commitment to decarbonisation and sustainable production is an added bonus that is becoming increasingly valued within the market and sets us apart from our competitors. That's why we are working to be become pioneers in the manufacture of low-emission pipes. Our goal is to be able to offer a range of climate-neutral products, which would involve bringing to market an option that currently does not exist and that would be the culmination of our sustainability ef- forts. This approach not only responds to market demands, but also demonstrates our responsibility to the environment and future generations.
In light of this, and as part of our strategy to optimise and strengthen operations, in 2023 we combined the Sestao and Amurrio steelworks into a single facility in Amurrio. During this process, we reused as many materials and as much equipment as possible from Sestao, in turn contributing to the circular economy. Doing this has allowed us to increase production capacity and leverage similarities between the manufacture of ingots and billets, making the facility more efficient while reducing energy consumption and greenhouse gas emis- sions. We are now able to offer a greater variety of products meaning that we can meet market demands more quickly and efficiently.
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2023 ANNUAL REPORT CONTENTS
On this journey towards sustainable and emission -free products, people are our greatest asset. Our employees' knowledge and dedication are the heart and soul of Tubos Reunidos. We are therefore focusing on attracting and retaining talent by creating a stimulating, stable and safe work environment that allows our employees to develop their maximum potential.
We are also immersed in a digital transformation process. Digitalising our organisational and production processes allows us to improve efficiency and reduce costs, while liberating the workforce from repetitive tasks so that they can focus on higher value-added activities. This digitalisation process is combined with reinforced cybersecurity, guaranteeing that our systems, processes and data are pro- tected, and maintaining our customers' trust.
In line with our strategy, our values and market de- mand, we have set ambitious ESG (Environmental, Social and Governance) targets to contend with the challenges that lie ahead. Some of our diverse initiatives include: certifying the environmental footprint of our products and implementing improvements to support our customers on their journey towards decarbonisation, so that we become a strategic partner in their efforts to reduce their carbon footprint; implementing measures to increase safety and prevent the occupational risks linked to our activity; establishing procedures for efficiently managing resources, including adopting circular economy practices and; continuing to strengthen our corporate governance policies to ensure that all our operations are transparent and ethical.
All of our progress and achievements over the last few years allow us to look to the future with optimism and determination. We are in a strong position to aspire to be one of the market leaders in the manufacture of climate-neutral seamless steel tubes, and therefore, become pioneers for an emission-freefuture.
Finally, we would like to express our sincerest gratitude to all the people who form part of the Tubos Reunidos team. Your commitment has been crucial to our collective success.
We would also like to thank you for the trust you have placed in our group, as well as that of the other shareholders, the Board of Directors, customers, suppliers, institutions and all the organisations that in one way or another support us in our day to day. Thanks to all of you, Tubos Reunidos continues to grow and has now turned 131, but this is just the beginning. We are confident that, together, we will write the story of a company that will become a future international leader.
Kind regards,
Josu Calvo
Chairman
Carlos López de las Heras
CEO
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2023 at a glance
2023 ANNUAL REPORT | CONTENTS |
Geopolitical background
This year, once again, we have made it clear that one of our greatest strengths is the ability to be agile, decisive and flexible when faced with changes in the environment. This year, fraught with difficult challenges, has been yet another test of our ability to be resilient, thrive in the face of adversity and emerge stronger.
2023 was marked by a complex and unstable geopolitical landscape, characterised by international conflicts such as the war in Ukraine and the conflict between Israel and Palestine, as well as tensions between the Western powers and China.
Increased production costs
These international conflicts and geopolitical tensions have impacted the environment, causing high market volatility, volatile costs, as well as serious tensions in global supply chains, especially in terms of raw materials and energy.
Evolution in the price of CO2 emission allowances
As in previous years, the price of CO2 emission allowances increased during 2023. This trend is a result of growing concern surrounding climate change and the measures being taken to cut greenhouse gas emissions.
This has prompted companies in the sector to invest in more efficient and sustainable technologies in order to cut their emissions and meet cus- tomers' growing demand for sustainable products. In fact, an increasing number of manufacturers are launching products with low CO2 emissions.
From Tubos Reunidos' perspective as a manufac- turer, consolidating our steelworks has also served to significantly reduce our carbon footprint and CO2 emissions, mitigating the risk of this price increase.
Sectoral concentration
The sector is becoming more concentrated, some companies are acquiring distributors, processing plants and key assets to strengthen their position in key markets. Other companies are abandoning Europe.
EU Taxonomy
The EU is promoting the European Green Deal, which aims to achieve climate neutrality by 2050, through the Taxonomy Regulation. This regulation classifies economic activities according to six environmental objectives. Companies must assess whether their activities are within the scope of the taxonomy and whether they meet the technical criteria. The taxonomy establishes three key performance indicators for non-financial entities, based on business information, CapEx (capital expenditure) and OpEx (operating expenditure). These reflect the potential and actual sustainability of the activities.
In 2023, we carried out an analysis for our activities in comparison to the requirements of the Taxonomy Regulation. All companies of the consolidated Tubos Reunidos Group were included in scope. As stated in the regulation, we have studied the eligibility and alignment of the two climate objectives (mitigation and adaptation).
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2023 ANNUAL REPORT CONTENTS
2023 figures
(in millions of euro, unless otherwise stated).
2023 2022
532.9 | 513.7 | 56.5 | 43.5 | 4,350 | -49,925 | 56.5 |
Revenue | Attributable profit | Net equity | ||||
(thousands of euro) | ||||||
84.3 | 54.0 | 38 | 15 | 124,129** | 65,726 | |
Operating income | Property, plant and | Net equity | ||||
equipment investment | (thousands of euro) | ATTRIBUTABLE PROFIT | ||||
47.7 38.0 529,964 543,647
Profit/(loss) for the financial | Total assets (thousands of euro) |
year (before tax) |
38.0
CAPEX*
71.3
Operating
cash flow*
108.8
Available liquidity*
-10.3
Reduction in financial debt*
183 | 222 | 1,399 | 1,405 |
Tonnes of pipes sold | Direct employment (average workforce) | ||
(in thousands of tonnes) | |||
106.8 | 64.5 | 112.7 | 43.0 |
EBITDA* | Market capitalisation* |
*The definition of 'Alternative performance measures' used in this Non-financialInformation Statement can be found in Annex I of the Consolidated Management Report.
CASH GENERATION IN 2022 AND 2023, WHICH WAS OBTAINED THANKS TO HIGHER REVENUE AND PROFITS, ENABLED US TO MAKE THE INVESTMENTS SET OUT IN THE STRATEGIC PLAN, MOST NOTABLY THE CONSOLIDATION OF THE STEELWORKS THIS YEAR, REDUCING NET FINANCIAL DEBT AND HAVING SUFFICIENT LIQUIDITY AT THE END OF THE 2023 FINANCIAL YEAR TO FURTHER ROLL OUT THE PLAN.
MOREOVER, WE FULLY PAID OFF ALL ICO-GUARANTEED FINANCING RECEIVED IN 2020 DURING THE PANDEMIC ONE YEAR EARLY.
** Net equity including participation loan
2023 ANNUAL REPORT | CONTENTS |
2023 milestones
Appointment | Resignation | Separation | Preparation | Optimisation | Consolidation | Certification | Appointment | |||||||
of roles | of Josu Calvo | |||||||||||||
Of a Chief | Voluntary | Of Non- | Of the | Of the Customer | Of the two | Of the first Environmental | As the new | |||||||
Commercial | resignation of | Executive Chair | Double | Relationship | steelworks | Product Declarations | Non- | |||||||
Officer, to drive | Mr Francisco | and Chief | Materiality | Management (CRM) | (Sestao and | enabling us to lay the | Executive | |||||||
the commercial | Irazusta, | Executive | Analysis | model, which has | Amurrio) into | foundations to reduce our | Chair | |||||||
strategy | Executive Chair. | more better-quality | a single facility | pipes' environmental footprint | ||||||||||
information and | located in | and allowing our products' | ||||||||||||
establishes new | Amurrio. | environmental footprints to | ||||||||||||
dynamics with | be objectively compared with | |||||||||||||
customers. | those of other manufacturers |
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Tubos Reunidos SA published this content on 23 June 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 June 2024 08:10:13 UTC.