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2016 financial highlights
Transformation Plan executed
Commenting on these results, Philippe Crouzet, Chairman of the Management Board, said:
"Vallourec is responding to a crisis of an unprecedented scale by deploying an ambitious Transformation Plan. In 2016, we completed all the key initiatives announced in February: we significantly reshaped our industrial footprint by creating two new competitive production hubs in Brazil and China and by drastically downsizing our European capacities which now represent 23 % of the Group's rolling capacity versus 46 % in 2014. We strengthened our balance sheet. Our cost savings are in line with targets. We are reinforcing the Group's customer focus with a new regional organization supported by two central departments. Thanks to all these achievements, the Group is confident in delivering the full contribution from its Transformation Plan, as announced on 1 February 2016.
2016 financial results are fully in line with targets, in a very challenging environment for Vallourec, and more generally for the oil and gas industry, with a second year of massive E&P capex cuts. The year nonetheless ended on a more positive trend thanks to the recovery of the US market.
Entering 2017, the positive dynamics of the US OCTG market are confirmed. However, IOCs have not started sanctioning new offshore projects, delaying the recovery of the international OCTG market in volume and prices.
Our mid-term outlook depends, as previously stated, on the timing of the global Oil & Gas market recovery which still remains unclear in this market environment. For 2017, based on current forex and market conditions, EBITDA is targeted to improve by €50 million to €100 million compared to FY 2016."