Tubacex S.A.

Investor Presentation • Apr 20, 2020

CORPORATE PRESENTATION April 2020

Index

1. Current situation 2. Where was Tubacex 3. Future prospects 4. Tubacex Share

Current situation 1

Covid-19 Status

TUBACEX GROUP

	TUBACEX			Special Components		steel and Extrusion		I u bace X Asia		l u Dacex America		Advanced Solutions		Corporate Office
		Num	0/0	Num		0/0	Num	0/0	Num	0/0	Num	0/0	Num	0/0	Num	0/0
1 Gile	Total Headcount Heads not FTEs	2573			639		1339			205		172		154		64
	Confirmed Infected COVID-19	2	0%			0%		0%	O		O		0		0
	Mandatory Quarantine	511	20/0	17		3%	31	2%	0		O		0		B	5%
201	Sick no COVID-19	118	5%	17		3%	95	7%	O		1	1%	4	3%	1	2%
1	Vacation Temporary leaves	204	8%		72	11%	79	6%	3	1%	0		12	8%	38	60%
	Smart Working	279	11%	66		10%	70	5%	69	34%	21	12%	30	19%	23	37%
	Last complete update			09 - 13 APR		24-mar - 1-apr		30-mar		06-08 APR		25-mar - 1-apr	01-apr - 06-apr
	Employees Health and Safety Measures *
	Transmission Risk Minimization	94%		O	92%		● 94%		● 94%		● 98%		● 100%		● 88%
	Support to affected 100000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000	96%			95%		● 100%		● 100%		0	33%		97%	● : 00%

Currently 2 confirmed cases so far, and 52 quarantined. No confirmed cases in Spain Protocols and measures adopted have helped the minimization of the transmission

Plant situation

	Plant situation
Plant	Status
Spain	Working normally until Tuesday 17th of March  Stoppage due to union's pressure from 18th March to 22nd  March when we re-started reducing shifts Stoppage after Royal Decree from 30th March to April 9th  when we reopen thanks to the explanatory notes with 1 shift Restarting of the normal activity on April 14th  until end of month. From May onwards expected reduction in workforce
Italy	 Plants were open and working but with slowdown in production until 26th March, with reduction of shifts From Thursday 26th of March and until at least 3rd  of April, Italy plants needed to be shut down after Italian Government decision Reopening of one of the two mills on 31st  March after an approved application made to Government, but at minimum production level (at least until 3rd May)
Middle East & Norway	 Working at limited level of activity in Norway, UAE and Saudi because of some workers absence and restrictions.  Major concern is UAE and government measures, although we have been classified as essential industry
Austria	 Working at 70% of production approximately  Reduction of personnel working for health and safety reasons
Asia	Tubacex India working normally until March 24th. Complete shutdown until 3rd  May  Level of reported cases still zero or low in the regions we operate in India. In case the situation deteriorate the team at Mumbai office will work from home .  China & Singapore since January have been working from home .
USA	 Both US plants still working, although with low volume  US government has classified, at list per now, our business as essential because of our sales to aerospace/defense
Service centers	 Overall activity is slowing down, and the order intake is experiencing a slowdown  Major risk related with borders closing. Deliveries from TSS central.
	Overall orders slowdown during this period. Production at around 50% in March

Financial Markets situation (1/2)

• During the last weeks we have lived moments of maximum volatility and uncertainty on the markets The fast spread of COVID-19 worldwide and its economic consequences fed investors' risk aversion, causing unprecedent falls in the stock exchanges

Source: Caixabank Research

Source: Caixabank Research

Current Situation

Financial Markets situation (2/2)

• Investors have not found comfort on the bond markets, very pressed by the fiscal stimulus
• announced and the current desire of liquidity Risk premiums, not only the corporate ones but also the sovereign ones, have increased until very
• high levels, what could distort the transmission of the monetary policy in Europe Additionally the oil war between Saudi Arabia and Russia has led to a drop of close to 60% in the brent barrel price year-to-date, affecting even more negatively to companies related to the energy sector In this situation the new base scenario for 2020 is a global recession with an expected global GDP of 0.9% vs. 3.2% expected at 2019 year-end

Oil Market situation

• The current situation effects on oil demand and the global economy, throws many projects into
• doubt when will be sanctioned Companies have already started reducing their annual capital spending for 2020 by more than 25% in recent financial updates, although improving in the upcoming years

Taken Actions - Summary Tubacex Group Crisis Committee cross-functional team created to ensure clear execution, coordinate and communicate the contingency plan with focus on the following 4 workstreams

Current Situation
	Tubacex Group Crisis Committee cross-functional team created to ensure clear execution, coordinate and communicate the contingency	workstreams	plan with focus on the following 4
HEALTH & SAFETY	BUSINESS CONTINUITY	FINANCIAL RESILIENCE	COMMERCIAL FOCUS
1. Hygiene & cleaning	1. Key products & services	1. Scenario based stress tests	1. Cash collection
2. Travel restrictions	2. Supply Chain Stabilization	2. Ensure liquidity/ Cash management	2. Contractual coverage, avoid penalties
3. Facility and on-site guidelines	3. Human Resources	3. Cost control, specific plan	2. Analyze short term opportunities
4. Communication		4. Analyze legal implications	4. Communication to customers
		5. Reduction of fixed cost

Taken Actions – Health & Safety

	We have communicated personal hygiene good practices.
---	-------------------------------------------------------	--

• Hygiene & We have increased cleaning protocols frequency.
• cleaning Disinfectants.
  • Specific protocols in the factories.
• Separation Working with protection and physical separation in office spaces, production plants, dining rooms (some closure), etc.
  • Restriction for meetings and boost the use of Microsoft Teams.
• Travel
• Restriction to travel and customer visits since end of February.
• restrictions Stop travelling since March.
  -
• Split between key teams per function area.
• Home office Home office has been proactively recommended to personnel that can work from home.

Constant and continuous proactive communication with our employees.

• • Communication Global guideline created for covid-19.
    - Created a safe channel for employees to notify company about an infection.
    - Management of stress and rumors through each Business Unit Director.

Taken Actions – Business Continuity

• Products & Services
• Analysis of critical products and services implementing corrective actions:
  • Secure necessary stocks.

Advance delivery of planned orders.

Development of alternative suppliers.

Validate substitutive products and manufacturing routes.

Balance risk in collaboration with other business units.

supplier considering country/regions situation.

Current orders

Suppliers

Evaluation of existing contracts and commitments with suppliers for a potential temporary interruption of operations.

Assess the criticality of the supplier service or materials, based on impact on production, considering current and project demand and existing stocks.

Estimate the probability of SC disruptions based on location and activity of

• Define actions to activate Force majeure clauses and reduce risk exposure.
• Identification of key personnel and backup plans.
• Human Resources Legal labor actions scenarios analysis on going for each area with HR in order to ensure coordinated actions.
  • Financial and operations impact have been considered.

Current Situation Taken Actions –	Financial Resilience
Scenario based stress test	 Conduct Stress test scenarios for our economic cost structure in case of stoppage or interruption of the activity. Best, Base and Worst cases.
Cash and liquidity management	 Cash management action plan in place to maximize cash position.  Management of maturities of all our financing and debt issues in the short and long term.  Maturities and actions with private, public banks, regional and national governments with their different entities.
Cost control	 Ensure cost control, transition of fixed cost to variable cost as much as possible.  Stoppage of capital expenditures.
Legal	 Analyze current legal situation of our contracts and different cases for contracts with insurance companies in view of potential stops, losses, etc. in an extraordinary situation .
Fixed cost reduction	 Application of different measures in different scenarios.  Specific plan for fixed costs reduction.  Apply temporary employment regulation with Public support.

Taken Actions – Commercial focus

Cash collection	 Proactive collection management, main priority.  Management of defaults with customers.
Contracts coverage	 Force majeure coverage in contracts being proactively analyzed with customers in a very positive way.
Multiannual contracts	 Large multiannual contracts still in effect today, last conversations with customers confirm the contract  Important contracts to be sign in short time.
Short-term opportunities	 Order Intake clearly reduced, projects postponed, some cancelations…  No clear visibility of the consequences regarding market volume and price.  Close urgently orders under negotiation.
Customer communication	 Formal feedback to customers regarding our operations status already provided.  Provided efficient communication with customers.

2

Where was Tubacex?

• Before Covid-19 Sales evolution Global investment in Upstream The dramatic crisis in the Oil sector characterized by an unprecedent fall in Upstream Capex affected Tubacex's revenues
• However, the correct positioning in premium products allowed the Group to increase revenues in 2018 -2019

market

New perimeter investing in 9 productive mills with potential revenues of approx. €300M and with a positioning focused on complete solutions

So now, we are better positioned for the recovery

	Where was Tubacex? So now, we are better positioned for the recovery
	Pre Crisis 2014 (Proforma)	Crisis 2016 - 2017	Recovery 2018 - 2019	Change
Revenues	750 M€	500 M€	677 M€	+177 M€ (+35%)
Gross margin	370 M€ (50%)	230 M€ (46%)	320 M€ (47%)	+90 M€ (+36%)
EBITDA	82 M€ (12%)	35 M€ (7%)	70 M€ (10%)	+35 M€ (+100%)
Headcount	2.800	2.314	~2.600	+286 p.
# Patents	0	7	8	+1
Order Intake	≈ 700 M€	≈ 1.000 M€	500 M€	-500 M (-50%)*
% Premium Product	40%	65%	73%	▲ 8%
Sales to End User / EPC	35%	65%	50%	▲ 30%

Loss of volume and reduction in prices not offset by cost reduction measures

Where was Tubacex?
Getting closer to our previous Strategic Target
	Starting point	Improvement	Oil&Gas Crisis	Recovery	Strategic Target
	FY 2012	2013-2014	2015-2017	2018 - 2019	2020 - 2021
Product Mix (% premium over sales)	27%	36.2% Premium Products	60% Premium Products	70% Premium Products	70% Premium
Sales	n.a.	+15%	-30%	700-800M€	1,000M€
EBITDA Margin	8.6%	11.7%	7-8%	12%	13-15%
Net Debt / EBITDA	5.7x	2.4x	>3x	<3x	<3x
RoCE	5.2%	10%	<1%	10%	>10%
Working Capital / Sales	55.3%	37%	40%	35%	35%

Before covid-19 we were aligned with market consensus for FY20

Main relevant projects under discussion

We are now better positioned for large frame agreements in different products

Focused on long term agreements

I+D – we have bet heavily in Innovation and we have a large backlog of projects: Tubacoat example An R&D effort that has become a reality with a successful go-to-market strategy

The technology is being widely accepted with orders already invoiced, trials and testing being done by most of the main refining companies in the world

3

Social support (1/2)

We have created a supply management team based on our international structure and related companies Purchasing of material and distribution to a "maker group" to produce and distribute masks produced by 3D printers We have bought more than 500k masks that we are distributing mainly at nursing homes in the Basque Country

Protective

• mask 10,000 protective masks

Regular masks

PPE

PPE We have bought and currently delivering other types of Personal Protective Equipment such us boiler suits, coats, globes, thermometers, etc.

Social support (2/2)

• To use our installations to storage and manage all kind of material To use our medical service infrastructure in Llodio and Amurrio in order to realize rapid tests to population

CASH MANAGEMENT DEFENSIVE TOOLS:

• Diversified and resilient financial structure (public and private financing facilities, bilateral structure, main banks compromised to renew short-term revolving lines, etc) Year 2020 – Summary of actions
  • Starting point of 140M€ of cash at the end of February proof of our financial strength
  • Even under COVID crisis the effect on cash of our "stress test in operations" including collections, payments and capex disbursements shows that the financial structure of the company withstands the current situation
  • Important cost reduction at all levels:
    • − Salary reductions:
      • − Management Committee & Board: 30%
      • − Other groups and executives: 10%-30%
    • − Stoppage of non-strategic investments
• − Non-essential costs removal
• − Fixed costs reduction
• − Job regulation measures (i.e. ERTEs) analysis according to current regulation
  • To keep current financial sources: renewing/substituting credit lines and activating all the cash management defensive tools available, including Public supported measures
  • Don't burn cash at operating level despite the current situation
  • Don't stop strategic projects
  • To complete multiannual contracts with customers and significant orders
  • Big uncertainty in real effects depending on the duration of the pandemic

Our main target is to maintain neutral cashflow

Future…

It is to early to forecast possible scenarios for the upcoming years, but it is important to highlight that our market positioning has significantly improved in the last years and that we have an experienced team that has already overcome different crisis periods:

Frame Agreements Success

Frame Agreements Success Customer Status Customer 1 Pending Customer 2 Signed Customer 3 Signed Customer 4 Signed Customer 5 Signed Customer 6 Pending Customer 7 Signed Customer 8 Signed Customer 9 Pending Customer 10 Signed
Customer 11 Pending
Customer 11 Pending
Customer 12 Signed

Objective to sign over 15frame agreements in 2019-2020

Objective to sign multiannual contracts for over 1.000M€ value for the next 4-5 years.

Stronger market positioning oriented to long-term agreements Offering a complete solution gives us a competitive advantage vs other players

Possible scenarios of recovery

Tubacex share in 2020

Tubacex share Price (€/share)

Tubacex vs. other players in 2020

Stock Market evolution

Tubacex vs. other players in March & April 2020

Corporate Presentation 2020 33

Buy back Program – Goal and detail

• a Buy Back Program Main characteristics:
• -
  -
  -
  -

	Tubacex Share
	Data		Acquired shares	Average price	Investment (€)	% share capital
On 12nd March at Market closing 		#	Accumulated	€/share		accumulated
suspension of liquidity program is	13/03/2020	69.450	69.450	1,4722	102.248	0,1%
announced due to the beginning of	16/03/2020	85.145	154.595	1,3509	115.022	0,1%
a Buy Back Program	17/03/2020	77.590	232.185	1,4049	109.006	0,2%
	18/03/2020	73.340	305.525	1,4358	105.302	0,2%
	19/03/2020	88.970	394.495	1,3023	115.866	0,3%
 Main characteristics:	20/03/2020	93.644	488.139	1,3010	121.831	0,4%
	23/03/2020	89.551	577.690	1,2660	113.372	0,4%
 Destinated funds: 6M€	24/03/2020	89.985	667.675	1,2822	115.379	0,5%
	25/03/2020	98.018	765.693	1,2820	125.659	0,6%
 Objective: amortization	26/03/2020	93.180	858.873	1,2813	119.392	0,6%
	27/03/2020	96.692	955.565	1,2952	125.235	0,7%
 Duration: 6 months	30/03/2020	84.671	1.040.236	1,2627	106.914	0,8%
 Financial broker: JB Capital	31/03/2020	78.746	1.118.982	1,2842	101.126	0,8%
	01/04/2020 02/04/2020	75.100 47.212	1.194.082 1.241.294	1,2634 1,2658	94.881 59.761	0,9% 0,9%
	03/04/2020	38.000	1.279.294	1,3060	49.628	1,0%
	06/04/2020	28.397	1.307.691	1,3929	39.554	1,0%
	07/04/2020	43.218	1.350.909	1,4680	63.444	1,0%
	08/04/2020	54.157	1.405.066	1,4576	78.939	1,1%
	09/04/2020	61.000	1.466.066	1,4520	88.572	1,1%
	14/04/2020	25.080	1.491.146	1,4400	36.115	1,1%
					1.987.245	1,1%